Everyone’s using AI. So where does the advantage come from?

The widespread adoption of AI across the financial sector means that simply 'having' AI is no longer a competitive edge for lenders or retailers. As every major fintech and bank integrates large language models, the real advantage is shifting toward how these tools are applied to specific customer pain points. For merchants offering financing, this means the focus should be on how AI improves the speed of credit approvals and the personalization of payment offers at the point of sale. Retailers should look for financing partners who use AI for more than just internal automation. The true winners will be those who use the technology to improve 'straight-through processing'—meaning more instant approvals and fewer manual reviews that cause cart abandonment. Additionally, AI is being leveraged to better predict a customer’s ability to pay, which can lead to higher approval rates for subprime or near-prime borrowers without increasing the lender's risk. The advantage now lies in the data quality and the specific use cases that make the financing journey smoother for the end consumer.

Source: Tearsheet

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