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Combining Human Intelligence and AI to Maximize Efficiency in Lending and Underwriting

CHRIS GRIMES

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While Artificial Intelligence (AI) has proven to be quite disruptive in the last 10-15 years, there is still a lot to be done in this niche. Since it’s all about making our computers and algorithms more ‘intelligent’ and resembling the human brain as much as possible, the scope of blending Human Intelligence (HI) with AI seems like a never-ending process to achieve the desired level of efficiency.

 

Combining Human Intelligence and Artificial Intelligence

This is what we normally refer to as hybrid intelligence. The aim of this powerful blend is to make our computer-based systems more robust, rational, and intelligent while adding cognitive abilities to them. The primary reason why this combination is so important and looked upon is because the human brain and AI are two powerhouses that almost always complement one another; each of them fails to address the task that the other one does at its best.   

For instance, Artificial Intelligence is capable of processing a huge amount of data in less than a fraction of a second (whereas human brains need more time). However, the brain is capable of taking emotions and other human factors into account while making a decision (an area in which AI lags by a decent margin as machines do not have emotional or cognitive powers to the same level as a human brain).

While plenty of AI-enthusiasts call the human brain ‘dumb’ if compared with Artificial Intelligence, it is not entirely true because our brains are much better when performing in drastically changing or disturbing conditions (e.g. background noise while identifying a pattern in the given data).

So, this is the primary reason why they need to work together to produce results in the world dominated by humans!

 

Why Is the Combination of Human Intelligence and AI Good for Lending and Underwriting?

Short answer? To bring efficiency in this massively data-dependent and process-oriented niche. But let’s discuss it in detail and understand the particular areas in which AI can provide efficiency so that you can make an informed decision before implementing an AI-based solution in your organization.

Productivity

This is the area in which AI takes a clear edge due to its immense processing power. In mortgage lending, typically at the underwriting stage, there is a massive amount of data that must be extracted, verified, and analyzed before providing any judgment. Although this process can be done by humans as well and we have been doing it manually for many decades, it needs to be replaced by something more efficient (i.e. Artificial Intelligence).

Moreover, AI-based algorithms can also detect patterns and understand the potential answers before performing extensive calculations (by just looking at the data) by shuffling through the previous data sets and their corresponding results. This particular property links back to the aspect of logical mathematical intelligence offered by HI and, as a result of this sharp ability, 90% of the manual work can be replaced, thus increasing the efficiency of your organization.

Customer Experience

The dynamics of doing business have changed in the last decade as services have become more customer-oriented. This fact increases in value when we talk about the lending niche in which two of the most sensitive aspects are involved - customers’ money and sentiments!

So, we need intelligent solutions that can address these two things, instead of just providing automated and robotic services.

It is also worth noticing that providing a great experience goes way beyond answering customers’ questions via chat. In fact, it also refers to understanding their preferences and aligning the services with their demands so they feel acknowledged instead of being treated as strangers.

Since underwriting takes a huge chunk of time per application, customers often get fed up as waiting is the biggest turn off for your prospects and you must avoid it to provide a decent customer experience.

These are some of the experience-oriented reasons why you should pursue a robust AI-based underwriting tool (like the one offered by FundMore) in your organization in order to service your clients so that their demands are addressed and managed at the highest possible level.

You would also gain a clear edge over your competitors by allowing your customers’ mortgage applications to be approved within minutes compared to days or weeks for some of the established market players due to extensive workload and the absence of intelligent systems.

Cost

For financial institutions, particularly the ones involved in lending, it is crucial to bring efficiency in cost-cutting. However, it is just not feasible to cut operational costs in organizations that mostly rely on a manual workforce.

With the help of AI and HI, all you need is a single algorithm to replace hundreds of your employees and still perform better than them all together.

 

Conclusion

While it is evident that Artificial and Human Intelligence are essential for a lending organization to enhance in-house productivity and bring efficiency in providing services to the customers, there is another aspect that should also be considered.

Apart from the fact that AI allows a decent throughput in data processing and analyzing, your organization needs a file management tool as well to cut the extra time that your employees spend on surfing through different files. It is often reported by many managers that their workforce spends a major amount of time in finding the files for a given keyword, name, address, or any other metric. It does not only reduce the working capacity and decrease efficiency, but it also happens to be a major reason for frustrating your employees and customers.

Therefore, along with an AI-based system, you should also consider deploying a document management software that categorizes each file you collect from the customers during the underwriting process. As such, whenever you need them in the future, it involves a simple search with multiple filters that keep everything sorted. This is one of the areas that is often neglected by most of the managers working in lending companies, but its utility increases the overall efficiency significantly!

Tags: AI platforms, FinTech, Automation, lending