GARP Risk Podcast
Risk-Based Decisioning in an Age of Uncertainty Part 2
Sep 6, 2023
This podcast explores the trends and practices in digitizing credit decisioning for financial institutions. It discusses the impact of digitalization on credit decisioning, examples of machine learning in the non-bank sector, digitalizing SME lending, and the implementation of the Basel framework in credit risk transformation.
36:28
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Quick takeaways
- Digitalization of credit processes involves creating personalized and automated customer journeys using AI and machine learning algorithms.
- Success in digitalizing credit risk decisioning requires milestones such as data management, advanced analytics, and customer-centric credit processes.
Deep dives
Digitalization of Credit Decisioning
Digitalization changes how financial institutions make credit decisions. It involves creating personalized and automated customer journeys, leveraging AI and machine learning algorithms. Fintech companies like Klarna and Upstart use machine learning in credit decisioning, predicting payment behavior and streamlining the lending process. Other examples include chatbots increasing conversion rates and fintechs using alternative data for risk evaluation. Established players like Amazon also leverage machine learning for small business lending. Digitalization benefits include faster credit decisions, improved customer experience, revenue growth, and cost reduction.
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