Introducing The Risk & Credit AI Engine: Power To Predict Who Becomes A Borrower Debt Crisis

Loan to buy a house, pressure to buy a house

In today’s world, the loan management system has undergone massive transformation. Technology has played a significant role since constant advancements continue to raise customer expectations and alter their behaviour when it comes to their experiences across industry.

Nevertheless, lenders must consider the possibility that they will not receive the principal and interest payments required to repay the borrower’s debt. Of course, lenders will incur a loss of part of the loan or the entire loan extended to the borrower. Thus, the development of the Risk & Credit AI Engine has had a crucial role on loan management system.


What is Risk & Credit AI Engine?

Risk & Credit AI Engine is a platform that uses Artificial Intelligence (AI) to assess the probability of creditworthiness of a borrower. Creditworthiness is an essential component of the loan management system because it informs the lender about the borrower’s previous financial behavior. A thorough examination of this aspect will provide the lender with information on previous debts, repayment, commitment length, and so on.

Furthermore, the Risk & Credit AI Engine can be used in a variety of different ways, but they are most commonly used by lenders, banks, or other financial institutions. It is used to decide whether they should approve borrower’s loans or not. It uses algorithms to assess a borrower’s likelihood of payment default based on their credit history and Debt-To-Income ratio (DTI).

Risk & Credit AI Engine is highly useful platform as it allows lenders to make a better decision about whether they should provide their customers with certain services or not. It also helps reduce the amount of fraud that goes on in the lending process by ensuring that the people who apply for loans are who they say they are and that their financial histories are accurate.


Key Characteristics in Determining a Borrower’s Creditworthiness

There are five factors that lenders need to consider when determining a borrower’s creditworthiness, such as:


Capacity measures the ability of borrowers to repay new debt based on their current obligations. Borrowers’ cash flow and debt-to-income (DTI) ratio become critical in this situation, as lenders want to know how much borrowers owe compared to how much they own. The lower the borrower DTI ratio, the more positively lenders will view the borrower’s credit request.


Character assists lenders in determining a borrower’s ability to repay a loan. Lenders need determine whether or not the borrowers are honest and have integrity. Also, lenders must define whether borrowers have the necessary background, education, and experience to run a successful business. In addition, since history is the best predictor of the future, lenders will scrutinize borrowers’ credit histories. Borrowers’ credit history reflects their character and influences their ability to obtain a loan from lenders.


Capital demonstrates to lenders whether or not borrowers are serious about obtaining the credit they seek. Lenders may inquire about the personal investment that borrowers intend to make in the business. Furthermore, a good capital rating also indicates that the borrower is adequately capitalized to absorb any unexpected losses.


Conditions include information that can assist lenders in deciding whether or not borrowers qualify for credit and the terms. Before lending money, lenders may consider two factors: how borrowers intend to use their loan and external factors such as the economy and industry conditions, which will have an indirect impact on the borrower’s ability to repay the loan. As a result of this conditions factor, lenders can determine whether the current conditions of the borrower’s business will continue, keep improving, or worsen.


Collateral is something that serves as a security, especially for a secured loan or secured credit card. When lenders offer borrowers with a secured loan, they will require borrowers to provide collateral in the event that borrowers are unable to repay their loan. Borrowers’ collateral will be taken if they are unable to make payments. However, collaterals will not be used to determine borrower capacity as it only liquidated in worst-case when borrowers fail to repay their loan.


Reason Why It’s a Smart Decision to Use The Risk & Credit AI Engine

Risk and credit management are unavoidably becoming one of the most important aspects of all businesses that lend money. They must constantly work to combat factors that increase risk, such as cybersecurity threats and scams. Not only that, but they must also be on guard against reckless or unreliable borrowers.

Furthermore, credit risk management’s important due to the losses incurred by the lending party even with a single missed payment. The collateral also loses its value because the lender will still receive a loss. Thus, the Risk & Credit AI Engine’s role is to assist lenders in resolving existing issues.

The following are some of the reasons why you should use the Risk & Credit AI Engine for your business:

  1. A faster rate of risk assessment processes and more accurate calculations
  2. Streamlining credit procedures with fewer personnel requirements
  3. Automating the credit evaluation process to lower the probability of human error
  4. Enables smarter and more informed credit risk decisions
  5. Acts as a loss prevention tool for finance teams and account handlers


Risk & Credit AI Engine Application Use Case Example

Financing Service Platform is an easy-to-use Loan Management System (LMS) which integrates all areas, including but not limited to capital management, Return on Investment (ROI), account receivable, general ledger, and many more. This application assists the lender company to process client data, generate new loans, automate the collection processes, and produce accurate reports.

Furthermore, scalability is one of the most important aspects of this application. The reason is because it allows the company to grow and prepare their lending business for the market with multi-Agile SDLC. With scalable support, the lender company not only streamlines processing for a different process but can also make the entire process automated.

Loan Management System

The Financing Service Platform has 3 essential features:

  1. Loan Origination

The process by which a loan borrower applies for a loan and the lender process it. There are several components that play an important role in the loan origination process, such as loan document software, digital Know Your Customer (KYC), multiple loan types, and automation of loan application. A lending CRM’s loan origination capabilities can assist businesses in advising clients on the best loan for them while also speeding up task completion.

  1. Loan Services

Each loan has unique characteristics, whether it is interest rates, payment dates, terms and conditions, and so on. The loan services feature assists lenders in calculating loan interest, payment duration, fees, and other factors. In addition, there is a feature for debt collection. Recovering the payment is crucial for lending companies. The Financing Service Platform can send them notifications when their accounts become past due.

  1. Analytics and Reporting

In order for a lending company to obtain thorough cash flow reports, analytics and reporting are features that are crucial. The analytics and reporting features also enable the company to visualize and comprehend the direction their business is taking. With this feature, lending companies can get speed and efficiency to produce appropriate and accurate reports.


Is the Risk & Credit AI Engine really Worth Investing in?

These are the questions we’ll look into to see how risk and credit management fit into today’s business. There are several conditions in which a company finds itself in that pushes them to utilize Risk & Credit AI Engine, which are as following:

  1. Time Consuming: when the company’s loan procedures are unmanageable and require a lot of time
  2. Complex Procedures: when a lot of attention and employee participation are required for the processes
  3. High Volume: when there is an overwhelming number of tasks need to be done by the team
  4. Manual Errors: when high number of errors are found in the loan documents
  5. Less Visibility: when not all loan processes are explicitly stated and documented



In conclusion, the Risk & Credit AI Engine is a powerful combination of data analysis and deep learning capabilities. It will continue to expand in its capacity to analyze existing and future types of financial risk factors that traditionally have been difficult or impossible for traditional analysis techniques. The future will see the continued existence of not only strong credit bureaus that maintain financial databases on the net. However, it also online services accessible to all net users interested in obtaining credit scoring information on both individuals and businesses.

So, what are you waiting for? It is time for your business to take advantage of artificial intelligence’s potential in credit risk scoring!

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