New Orleans community bank, Crescent Bank, has partnered with consumer credit verification software provider, Informed.IQ, to leverage its AI-driven lending technology
The collaboration will benefit Crescent’s a dealers as the AI-driven automation process will make it easier to submit documents and clear stipulations, speeding the lending process.
The automatic verification process will also lower the cost of credit for the dealers and the customers of Crescent Bank.
Informed.IQ’s technology will provide accurate consumer income calculations and validations of application as well as faster, more accurate loan processing and reduced fraud risk to the auto dealers.
According to Informed.IQ’s website, the fintech’s software delivers automatic verifications with a 99% accuracy, and currently processes 8% of all US auto loans through its API.
Informed.IQ focuses on auto business
Informed.IQ’s partnership with Crescent Bank falls within the fintech’s ambition to gain more auto business.
In March, the company hired former Santander senior VP of digital transformation, Jessica Gonzalez, as director of auto to expand Informed.IQ’s automotive market share.
Following the recruitment, Informed.IQ has announced several partnerships serving the expansion goals.
In July, the group partnered with lending technology solutions provider Origence, which is the preferred technology supplier of 1,130 credit unions.
In September, the Informed.IQ also secured the custom of indirect automobile financier Consumer Portfolio Services to automate the latter’s lending process.
Lenders tap into AI technolog
Crescent bank is the latest in the series of community banks and credit unions tapping into the AI capabilities to streamline their services.
A report on artificial intelligence by OECD highlighted the potential benefits of AI in lending stating that it could “reduce the cost of credit underwriting and facilitate the extension of credit to ‘thin file’ clients, potentially promoting financial inclusion.”
The drive for AI adoption has picked up in recent years among smaller banks which has been behind larger banks with bigger spending power.
According to a 2018 report by Brighterion, 11% of large banks were spending more than $50 million to their AI and machine learning budgets, while 37% were spending between $25 million and $50 million. Only 5% of small and mid-sized banks were spending the same amount.
Despite the lower spending, smaller banks have been open to AI technology adoption, and in recent months, news of collaboration with AI solution providers have been frequent.
In April, Innovations Federal Credit Union selected Scienaptic AI for its AI-powered underwriting to streamline the firm’s loan decisioning process.
Likewise in May, Oklahoma Community Bank opted for Teslar Software’s lending process automation platform to improve reporting and management of loan portfolio.