Much has been written about the rise of machine learning and artificial intelligence and how it will impact the auto lending industry. While there has been a significant amount of hype, the promise of artificial intelligence is simply game changing.
The most obvious application is that thinking machines will be able to assess risk and provide an accurate estimate of whether certain borrowers will repay their loans. The ramifications of this change will be massive. If auto lenders are better able to understand whether a particular borrower is not able to pay back the entirety of his or her auto loan, lenders can mitigate their risk while offering better pricing and more approvals to new loan applicants.
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