Even the largest US banks measure AI returns differently

Large banks are currently split on how to measure the success of AI, and this lack of standard reporting will soon impact the financing tools you use in your store. JPMorgan Chase and Bank of America are leading the charge, but they use different metrics to decide if AI is actually working. For retailers, the most important finding is that banks using 'pre-AI baselines' are better at proving a return on investment. This means the lenders you partner with are increasingly focused on efficiency and cost-reduction rather than just flashy new features. As these banks refine their AI models, expect a shift in the consumer financing landscape. Lenders are using AI to speed up the approval process and better predict which customers are creditworthy. If your financing partner can prove their AI reduces defaults, they can afford to offer more competitive rates or higher approval limits for your customers. However, the lack of a universal 'success metric' means some lenders may be moving faster than their technology allows. Keep a close eye on your approval rates over the upcoming quarters. If your lender’s AI strategy is working, you should see faster decisions at the point of sale and fewer manual reviews. If they are struggling to measure ROI, you might experience inconsistent service as they tweak their algorithms.

Source: American Banker — Top News

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