Banks leveraging AI may achieve scalable profitability in small business lending by reducing costs and improving risk pricing, a new report says.
Banks can achieve viable economics for small business loans by adopting AI-driven strategies, according to new research. The report highlights demand-supply gaps and persistent dissatisfaction in the sector, creating opportunities for agile lenders to capture market share by lowering operational costs and enhancing customer experience.
Historically, most small business credit providers have struggled to generate sufficient returns, particularly for underserved segments. The report identifies four pillars for economic viability: customer insights, cross-team SLAs, AI-powered workflows with alternative data, and innovative lending models.
The findings target tier 1-3 banks, small business banking heads, data analytics leaders, and digital loan origination vendors. A follow-up report will focus on solution providers in the space.