- Banks are expected to adopt artificial intelligence (AI) technologies at scale, as estimates show doing so could add a combined $1 trillion in value to the sector
- AI promises to not only deliver better customer experiences, but also offer the ability to create better-value products for banks and lending businesses
- One of the ASX-listed finance stocks already utilising the technology is MoneyMe (MME), which offers a variety of credit products and small loans to digital natives
- The company relies on artificial intelligence to power its Horizon digital platform, which has the added benefit of being cloud based
- MME shares last traded at $1.92 per share
Banks across the globe are expected to begin adopting artificial intelligence (AI) technologies at scale within their businesses.
Management consultant firms, McKinsey & Company, estimates banking companies which adopt AI could add $1 trillion in extra value per year.
A report by the consultancy business explains that AI-tech in banking can not only deliver better customer experiences but also offer the ability to create better-value products.
Beyond banks, many fintech businesses have already begun using AI technologies within products to compete with legacy banking companies.
For example, BNPL leader Afterpay (APT) uses AI to analyse customer data generated from interactions on its platform to create spending insights for itself and merchants.
Another fintech business using AI to generate better outcomes for itself and its customers is the ASX-listed company, MoneyMe (MME).
The digital lender and diversified financial stock offers a variety of different credit products and personal loans to digital natives, who want to access cash online, whenever they want and wherever they want.
Earlier this year, MME hit the $1 billion mark in originations after triple-digit growth in the September quarter – proving just how valuable an AI-driven lending platform can be.
CEO and Founder Clayton Howes explained the focus of MoneyMe is to service ‘Generation Now’, people who don’t want to go through cumbersome processes, or wait days, to access their money or credit card.
To facilitate the fast application process, MME cut out the finance broker and slow processes and went straight to AI technology, creating its Horizon Technology Platform.
Horizon works by consuming data from multiple sources to make an informed decision on which customer should be approved for the correct loan amount or credit card limit.
“MME created its own AI technology, called Aiden,” the CEO explained.
“It is powerful machine learning that uses data and algorithms to predict customer behaviour.
“It makes risk adjusted decisions on credit, and gives us the edge over tradition banks that predominately rely on outdated Equifax scores.”
MoneyMe’s automated loan application process takes less than five minutes to complete and can return a decision within an hour, with the money cleared for transfer shortly after.
The Aiden-backed Horizon platform also has the added benefit of being cloud-based, an increasingly popular method for many businesses.
According to the same report about AI in banking, McKinsey argues “cloud computing liberates financial companies from non-core businesses” and gives “access to flexible storage and computing services at a lower cost”.
Mr Howes explains for MoneyMe, having its platform be cloud-based allows for quicker interaction of data and integration of systems and software.
“One of the main benefits of being cloud-based is the speed of data transfer,” Mr Howes said.
“It’s also flexible for accessibility, offers better security overall and is efficiently scalable.”
MME argues its combination of cloud-based computing, and an AI-backed platform has created a truly scalable business.
An example of this can be seen in the company’s recent launch of Autopay, a vehicle financing product available for car dealers and finance brokers across Australia.
The product went live in April 2021 and since then it has racked up more than $111 million in cars financed.
The rate of growth shows no sign of decreasing, with $68 million bought in during October and November alone, up from $37 million in the first two months of Q1.
Explaining how the company was able to build a completely new product with minimal costs, the MoneyMe CEO said it relied on its own technologies to make the process easier.
“Because we own our own tech, the Aiden-backed Horizon Platform, we can automate a lot, making our human capital efficient,” he said.
“We can build new products and test them rapidly, manage our business intelligently and with agility to provide the best experience on the market.”
MoneyMe believes its early adoption of new technologies has helped the business establish itself as a leader within the lending sector.
The company added that by building its lending solutions using AI, it’s been able to reduce costs faced by legacy banks and build new solutions using the data insights from its own tech.
Shares in MME last traded at $1.92 each.