Consumer credit bureau Equifax said artificial intelligence (AI) is playing an increasing role in its operations.
In announcing the company’s quarterly earnings Thursday (April 18), management noted that 70% of the new models and scores Equifax built last year were made using artificial intelligence (AI) and machine learning (ML), with the goal of bringing that number to 80% this year.
“In the first quarter, we exceeded this goal with 85% of our new models and scores being built with Equifax AI Machine Learning,” said CEO Mark Begor. “Equifax.ai, leveraging our proprietary data Equifax Cloud And NTI capabilities is a big area of focus and execution for Equifax in 2024 and beyond.”
This quarter saw the company’s revenues climb by 7%, despite steep declines in mortgage and employer inquiries.
PYMNTS looked at the role of AL and ML in lending decisions last year in a conversation with Kelly Uphoff, chief technology and product officer at Tala.
“There’s a lot of data science magic that goes behind the simple act of giving credit to our customers in our markets,” Uphoff said. “By coupling new and novel data sources with machine learning and AI, we provide the ability to detect creditworthiness where others can’t.”
As that report noted, using these technologies to build proprietary financial identities for customers in emerging markets has revolutionized the lending space, serving as a catalyst for financial inclusion for people ignored or frustrated by traditional financial institutions that rely on existing credit scores and other legacy methods.
“People’s financial lives, and in particular the financial lives of our customers, are very personal and they’re very nuanced,” Uphoff said. “We cannot just use machine learning and AI to optimize for a transaction … the product has to [build a long-term relationship with them.]”
And when dealing with the “global majority” of people who need credit but can’t find it, Uphoff pointed out that FinTechs and lending platforms that have the ability to continuously innovate will realize a competitive advantage.
More recently, PYMNTS spoke with MJ Jiang, chief strategy officer at Credibly, about the way AI is reshaping the landscape of underwriting loans for small businesses
“Underwriting is governed by risk assessment,” Jiang explained. “There’s a lot of information about these businesses that is being collected throughout the underwriting process … and there’s a great opportunity in applying generative AI to extract more information and more understanding about the relationships between that information. It’s something that, when using traditional methods, hasn’t been possible up to this point.”