US Bank partners Pagaya Technologies for inclusive lending with AI
Minneapolis-based lender US Bank has tapped US-Israeli fintech Pagaya Technologies to leverage artificial intelligence (AI) within its credit decisioning processes for personal loan applications.
US Bank partners Pagaya for AI lending tech
The partnership will see the bank adopt its partner’s embedded lending technology and credit intelligence network to induce a “second review” of a loan application should the applicant fail to meet its traditional lending requirements the first time around.
A lender typically considers a range of factors when granting a loan, including data on the applicant’s credit score, credit history and debt-to-income ratio.
It’s expected that the partnership will be implemented across the bank’s Simple Loan function, which it says “helps clients meet short-term cash needs from $100 to $1,000 with a transparent, easy-to-understand instalment loan”.
Should the applicant be approved via Pagaya, US Bank will originate the loan and provide services to the client over the loan’s lifespan.
The bank claims that in the “few short months” since the partnership went live, it has been able to apply the technology in granting over 2,000 applicants personal loans, while also claiming that its Simple Loan function has saved borrowers around $40 million since launching in 2018.
Realising that not all of its clients “fall within our traditional credit parameters”, Mike Shepard, head of consumer lending partnerships at US Bank, says that by expanding access to personal loans and responsible credit solutions, “we are giving clients access to funds when they need it the most”.
The partnership arrives after the bank put out a call for a vendor that could “drive advanced process automation” throughout its operations organisation last September, which revealed the bank’s growing interest in AI.
