AI could cut banking industry's cost base by 20% - McKinsey

Artificial Intelligence is set to revolutionize the backend of consumer lending, potentially cutting bank operating costs by 20%. For retailers and operators, this means the lenders you partner with are about to get much more efficient. Currently, most financial institutions are only using AI for small productivity wins, like helping staff write emails faster. However, the next wave of AI integration focuses on core credit decisions and risk management. What does this mean for your store? As lenders reduce their overhead, we expect to see faster approval times and more sophisticated underwriting. When a lender lowers their cost to serve a loan, they can theoretically offer more competitive rates or approve a wider range of customers. The report suggests that banks will soon move beyond simple chatbots to 'AI-first' operating models. This shift will likely lead to smoother financing integrations at the point of sale and fewer manual hurdles for your customers during the application process. If your current financing partner isn't talking about AI integration, they may soon fall behind on cost-competitiveness and speed.

Source: Finextra — Lending

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