New Delhi, Dec 4: Machine learning (ML) is improving access to credit and reducing bad loans in India, with 93% of lenders using machine learning for auto loans reporting an increase in approvals, a report said on Thursday.
Machine learning is helping lenders improve portfolio performance and accelerate digital decision-making, with 90% of people using the tool to reduce bad debt on their credit cards, according to an Experian report.
The report, based on feedback from 109 senior credit decision makers in India, found that 79% believe machine learning has increased access to new customer segments and fostered financial inclusion.
71% of respondents said machine learning has improved profitability by improving risk prediction and reducing bad debts, and nearly 68% cited improved risk prediction accuracy and operational efficiency as key benefits.
“ML not only improves approval rates and reduces non-performing loans, but also contributes to creating a more transparent, efficient and inclusive credit journey,” said Manish Jain, Country Managing Director, Experian in India.
“As India continues its digital credit expansion, institutions that invest early in ML and GenAI will be in a position to compete, comply and innovate,” he added.
Lenders are now automating with confidence, with 71% saying ML can automate more credit decisions, reduce manual workload, and speed decision-making.
As many as 78% of people believe that most credit decisions will be fully automated within five years.
Generative AI is emerging as a powerful productivity tool in credit risk, with 84% of respondents saying it can reduce the time it takes to develop and deploy new credit risks.
However, 65 percent of non-adopters said the cost of implementation outweighed the perceived benefits, 44 percent did not fully understand the value of machine learning, 54 percent were concerned about model transparency, and 55 percent were concerned about regulatory inconsistency.
IANS
