“Many banks may decide to wait on venturing into AI and alternative data until regulators provide greater clarity. However, in an environment where technological capabilities outpace regulators’ capacity to issue guidance, that certainty may never arrive. Moreover, nonbanks are already experimenting with AI and other technologies, and they are likely to raise consumers’ expectations for faster loan approvals and more offers. Competitive pressure may build for banks to be able to offer the same services to their customers, forcing more and more banks to experiment out of necessity.
Banks that are on the fence may also want to consider that the current environment is more favorable to innovation than ever before. The banking agencies not only issued the joint statement on alternative data—limited though it is—they also have each taken separate steps to encourage innovation.”
Photo by Gertrūda Valasevičiūtė