Artificial Intelligence revolution in lending: Hype or reality? - The Economic Times

By Ashwini Anand When virtually everyone claims to use "artificial intelligence", "big data" or "machine learning" to "disrupt"/ "revolutionize" one industry or the other, I would not blame you for being sceptical about the much-touted AI revolution in Fintech. But, before you throw the baby out with the bathwater, let us delve a little deeper and understand if there is a real problem in lending and if AI can help solve it. Is there really a problem in the banking system? Banks and financial institutions, with some notable exceptions, are struggling with bad loans. According to India Ratings the average Impaired Asset Ratio - the sum of gross NPAs and restructured advances (a measure of the stress on a lender's balance sheet) stands at 12% of advances and is slated to rise to 12.5%.