How AI Can Improve Lending Workflows

Artificial Intelligence (AI), Machine Learning (ML) and robotic process automation (RPA) are shaping the future of the lending industry, enabling lenders, both traditional and alternative, and other financial institutions to improve efficiency and reduce costs. But AI can do much more than automate processes and boost efficiency.

AI can optimise and personalise customer lifecycle experiences and manage risks more effectively. Most importantly, it can reimagine even the most complex workflows.  Examples could include evaluating a commercial customer’s loan application, including processing a mix of structured and unstructured data, to make faster lending decisions and deliver tailored products and solutions based on a clear visualisation of preferences, behaviours, financial health, and creditworthiness.  Likewise, it can pinpoint loans which might default and enable the lending provider to proactively intervene and support the client, whilst protecting their risk tolerance.

Generally speaking, the more complex the workflow, the more value AI can generate - especially in corporate and commercial lending where the level of complexity allows for powerful results.

The commercial lending environment, and why it’s ripe for AI workflow transformation

The EY ITEM Club predicts UK bank-to-business lending growth will increase to 4.5% in 2025 – the highest rate since 2020 – and to 5.6% in 2026.  

But the lending environment remains tough thanks to significant economic fluctuations, the pace of regulatory change, and of course customer expectations.  Competition is also greater than ever. The rise of alternative lenders means there are now more lenders active in the market. Lenders must refine their strategies if they are to grab their share of the total addressable market.

However, many commercial lenders do not have the right technology in place. They are often burdened with out-dated highly manual processes, fraught with errors, and hampered by data silos with incomplete visibility into customer credit risk exposure, affordability, and liquidity. This presents a real challenge to commercial lenders at every stage of the lending lifecycle – acquire, onboard, originate, monitor, retain, and grow.  

The integration of AI powered data-driven insights into lending workflows can transform how decisions are made, enabling lenders to spot opportunities faster, onboard customers quicker, refine application processes, and enhance customer lifecycle experiences to increase lending without taking on additional risk.

Eight examples of AI workflow optimisation in commercial lending

1. When it comes to acquisition, AI can assist in digital-led marketing activities as well as augmenting front-line sales-enablement.  It can also spot hidden opportunities such as potential new revenues from rejected applications, or accepted applications that have not been taken up.
2. Orchestrating workflows, automating customer validation activities, executing KYC, KYB, and AML screening, and verifying client identity all in one place helps lenders perfectly balance the customer onboarding experience and regulatory compliance, to reduce attrition, bring down cost and time to onboard, eliminate the risk of errors, and meet demanding expectations.
3. In the loan origination process, AI can automate screening and validation processes such as document verification, and third-party validation through a range of financial data sources, as well as checking for errors, incomplete data, and automating application decision making against pre-defined lending rules.
4. Credit scoring and financial analysis requires lenders to analyse vast amounts of data – AI makes this process faster and more accurate.  Decision making against real-time analysis of creditworthiness, total risk exposure (because of multi-banking), and affordability.  McKinsey estimates this could deliver productivity gains of 20% to 60%, and up to 30% faster decision making.
5. Fraud detection – automation of Know Your Customer (KYC), Know Your Business (KYB), Anti-Money Laundering (AML) - and Identity Verification (IDV) can help spot potentially fraudulent activities faster.  Likewise, risk assessments from unstructured data sources, such as adverse media screening can help protect a lender’s risk position and protect them from both regulatory scrutiny and reputational damage.
6. An area AI has huge potential to add value is in risk monitoring. With AI powered workflow orchestration, lenders can predict risks and vulnerabilities and mitigate them proactively. Specifically, AI can spot patterns and risk factors and alert lenders to early warning signs – e.g. pinpointing a loan which might go bad – so that lenders can process and mitigate risk and better support customers.
7. When it comes to growth and retention, AI can augment relationship management teams with real-time customer insights to assist with continuous value-driven engagement and cross-selling/upselling activities.
8. AI workflow optimisation can also help lenders better support underserved segments of the market, thereby driving a fairer lending system. For example, with advanced data orchestration lenders can become more inclusive in their support of SMEs and cut cost to serve making the delivery of smaller loans more financially viable.

How can FullCircl assist lenders reimagine lending workflows?

FullCircl has a range of tools to assist lenders:

• ProBanker ensures multi banking is no longer an issue, lenders can gain a full picture of their customer’s liquidity, debt exposure, and cash positions, accounts across different banks to deliver total visibility when assessing a customer’s financial health and deep understanding of borrowing behaviour for more informed decision making at every stage of the lending lifecycle.
• SmartOnboard provides lenders with an end-to-end onboarding platform that incorporates robust automated KYB and KYC procedures, ensuring comprehensive and fast commercial onboarding and effortless compliance.
• SmartBanker assists lenders in accurately determining if a business fits its lending criteria and risk appetite via advanced data workflow orchestration including financial standing, credit history and industry risks.
• SmartAcquire delivers actionable insights to assist lenders in Identifying and securing new opportunities for growth - broadening their customer base, exploring innovative avenues for acquisition, and proactively responding to shifting market dynamics.

Check out our new case study and see how Tide has increased the number of loan applications it processes each year by 72%.