Banks, Credit Unions Testing AI Models for Underwriting in Credit Cycle

S&P Capital IQ
Tuesday, October 10, 2023

"The changing economic environment is opening a window of opportunity for banks and credit unions to put their artificial intelligence models for loan underwriting through a credit cycle.

The digital banking evolution in the past decade has significantly enriched data around consumer profiles and behaviors. It has incubated a group of financial technology vendors to develop AI underwriting models for banks and credit unions. Since most of them were established in a benign environment, early adopters are now looking to validate their AI models in the current dynamics with the downside risks leading to credit deterioration being high."