There’s a strong argument being made to start leaving many major finance decisions to AI. An AI can react faster, spot trends sooner and analyse more data than any human – it’s easy to see why it’s a sensible decision. But is this wise for the broking world, where personality can mean so much?
Fintech and the rise of technology has certainly had an impact on broking – AI decisions on finance applications are becoming more and more prominent. Could you simply enter your business details into a piece of software and have an AI decide exactly what loan is best for your business? It’s definitely a possibility. Is it the right way to find finance? We’d like to argue that it probably isn’t.
When it comes to finance, there are so many variables. Every business is different, and different finance options work for different businesses in ways that may not be obvious from data alone. AI might be getting sophisticated, but we’re still a long way off it being able to replicate a human perspective. AI decision-making risks businesses being denied finance that might actually a sensible option. Or, even worse, it risks businesses being approved for finance they can’t repay because of factors outside of the dataset.
We can give a personal example of one such situation:
- ASC recently dealt with a client who was 83 years old, looking for a £150k loan with an asset bank of 2.5k and a strong income from various rental properties and other sources.
- He was looking for a loan to acquire another commercial property, but was turned down at the first hurdle with the banks. Why? Well, the AI that the banks were using to sort applications saw that he was 83, and instantly rejected it!
From a human perspective, our client was obviously a solid candidate for a loan – but an AI just sees the numbers, it can’t apply “common sense”.
We’re not alone in our thoughts, either – according a recent survey of brokers by United Trust Bank, nearly 60% of brokers believe that AI will become one of the most significant factors in the lending world in the coming years. AI and technology can bring with them a whole host of improvements that make finance easier for everyone, but we have to be sure that we don’t cut the personality out of it in the process!