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Clientcase: AI-driven Commercial Credit Process

By June 3, 2020 No Comments

What they wanted
Our client wanted to improve their commercial credit process for real estate clients and transform it to be more risk-based, data driven and efficient. This market-leading Commercial Bank experienced the need to maintain their competitive edge and contribute to company-wide cost reductions. Also important was the objective of freeing up capacity of their Front Office and Risk team specialists. These experts should focus more on new business, on innovation and on the biggest risks. Their commercial credit process was highly manual and especially the credit risk reviews required a lot of back-and-forth, precious time and lots of information.

What we did
We started by quickly building the value case and aligning the required stakeholders. Next, we introduced AI to largely automate the annual credit risk review cycle that was taking up thousands of hours each year. The client’s credit specialists trained our AI algorithms to assess the need for risk reviews. We used the specialists’ input and feedback to design the total solution in such a way that it was transparent, interactive and customizable. During a pilot the proof of value was highly convincing and the enthusiasm among specialists and senior management grew further. Then we started to use the AI model in practice, harvesting value and lessons learned, while preparing and realizing the full IT, process and Organizational change.

What we achieved
Within a few months the first AI model runs in production and automates >80% of all credit risk reviews. It outperforms the experts consistently in accuracy and helps redirect €500k annually in manual FTE.

AI not only accelerates the process and reduces costs; it also provides whole new capabilities. Using the AI model our client can now monitor risk on portfolio level and case level continuously. The model can also be used for quick scans of scenarios to spot which cases likely need first attention should the real estate market, or an individual client’s circumstances change. Building out new decision models for other parts of the process is in progress.

What they said
“Initially I was doubtful about the benefits of AI in real estate financing. The results have now completely convinced me”  – General manager Real Estate Finance –

IG&H

Author IG&H

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