Navigating loan growth in turbulent times

The uncertainty in our current economic environment has caused some lenders to tighten their approach to credit and pull back from some lending activities. However, I believe that this is a moment when AI can help credit unions best serve their communities while properly managing the risk and returns in their portfolios—resulting in higher approval rates and lower cost of credit.

Rather than relying on traditional qualifiers alone, such as credit score and debt-to-income ratio, credit unions can assess these alongside thousands of other variables to generate much more accurate predictions about a borrower’s likelihood to repay a loan. Furthermore, credit unions can create seamless, embedded experiences that create stickier member relationships while also attracting new members.

During uncertain times, credit unions can make short-term decisions that come at the cost of long-term strategic priorities. Given the cyclical nature of the economy, investing in technology during turbulent times is the best way to take advantage of opportunity during better times. Rather than inaction or scaling back, credit unions that double down on digital transformation and disruptive technologies like AI and machine learning cannot only weather challenging times, but continue to grow.

 

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