Why Are Many Bank Lenders Not Using AI?

Why Are Many Bank Lenders Not Using AI?

This IDC Perspective looks at AI technology and provides insight into the levels at which banks are investing in technology solutions. Despite the potential of AI to enhance operational efficiencies and customer experiences in banking, many lenders, particularly traditional financial institutions, are hesitant to adopt AI for credit decisioning. This reluctance is attributed to various factors including cost uncertainty, lack of familiarity with AI tech providers, insufficient understanding of AI, and integration challenges with existing IT systems. Consequently, banks are currently more inclined to invest in cloud solutions, which offer quicker ROI, although the trend may shift as AI's benefits in lending operations optimization become more apparent."Legacy bank lenders are not typically early adopters when it comes to new technology solutions, especially those that are complex and require enterprise application integration, data synthesis, and regulatory compliance," commented Raymond Pucci, research director, Worldwide Lending Digital Strategies at IDC. "But the tide is now turning as we are seeing increasing investment and deployment of AI solutions by bank IT buyers, which we believe will continue, especially with the emergence of many AI tech suppliers that have applications readily available in the current lending market environment."

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