How AI Is Shaking Up Banking and Wall Street

ONE THEORY HAS ARISEN in the decade since the subprime mortgage crisis: Machines may be better than humans at giving out home loans. A new Fannie Mae survey of mortgage lenders found that 40% of mortgage banks have deployed A.I.--using it to automate the document-heavy application process, detect fraud, and predict a borrower's likelihood of default. San Francisco–based Blend, for one, provides its online mortgage-application software to 114 lenders, including lending giant Wells Fargo, shaving at least a week off the approval process. Could it have prevented the mortgage meltdown? Maybe not entirely, but it might have lessened the severity as machines flagged warning signs sooner.