Beyond ROI: How banks can better measure AI impact

AI is changing how your lending partners approve customers and manage risk. This shift matters to you because traditional return-on-investment (ROI) metrics are no longer enough to judge if a lender's technology is actually helping your business. Banks are moving toward more nuanced tracking that measures speed, accuracy, and customer experience rather than just immediate profit margins. For a retailer, this means the 'black box' of financing approvals is getting more sophisticated. Lenders are now focusing on 'unrealized value.' For example, instead of just looking at the cost of an AI tool, they are measuring how much time is saved during the credit application process. They are also looking at how AI reduces 'false negatives'—those instances where a good customer is unfairly declined for financing. If your financing partner uses these better metrics, you should see faster closing times at the point of sale and potentially higher approval rates for your customers. You should start asking your current lending partners how they are leveraging AI to improve the specific conversion rates in your stores, not just their own internal efficiency.

Source: American Banker — Top News

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