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Can AI and ML Impede the Next Financial Crisis?

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A decade after the subprime crisis, we find ourselves in quite a different mortgage environment. The fundamental changes in the business models, expansion of mortgage portfolios, and rise in the magnitude of intricate warehouse lines have led mortgage lenders and servicers to adopt technology to manage diverse financial and operational challenges including multi-channel document collection, document ingestion, data extraction, and unstructured data consolidation. The scale and complexity of the lending industry are more significant than ever before.

The complexity posed due to the multitude of stakeholders in the mortgage lifecycle combined with a highly competitive landscape has led to the birth and adoption of data-driven approaches to ensure business continuity and ways to manage and mitigate the financial impact from the next big ordeal.

A paradigm shift in the lending industry

Mortgages and their associated document processes are complex by nature. Furthermore, the changing paradigm of loan processing times and organizations’ global presence with large teams scattered across have eventually led to complicated business models and differentiation between business units, processes, functions, which in turn has bolstered the scope, and scale of the ever-evolving mortgage industry.

Most organizations in the financial sector are evaluating cutting edge technological developments such as AI and ML to automate the ingestion and analysis of unstructured data in their business models and deliver exceptional customer service while fearing the next financial meltdown.

AI is all set to rethink the future in a changing paradigm

Recent reports have also shown a drastic surge in financial organizations moving towards AI and ML methodologies to automate a wide array of functions within the mortgage lifecycle to ensure early assessment and mitigation of credit and geopolitical risks and improve operational effectiveness. According to Fannie Mae, 63% of lenders are familiar with some form of AI or ML technology.

From self-driving cars to maximizing agricultural yield, the benefits derived from AI and ML are enormous and play a vital role in the mortgage industry. Whether it will help us prevent the next big financial crisis, time will tell.

Reach out to us at [email protected] to learn more on Tavant VΞLOX, the industry’s leading Artificial Intelligence-powered digital lending platform.

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