In Latin America, Artificial Intelligence is opening the door to the credit system to a large number of people and companies that traditionally would not have enjoyed this benefit, traditionally, would not have enjoyed this benefit.
The use of alternative data, together with the implementation of AI, allows financial institutions to more accurately assess credit risk.
Alternative Data in Credit Evaluation
In certain regions of Latin America, a large part of the population does not have access to formal financial services. In these places, creditworthiness is assessed based on traditional data, such as credit histories or financial statements. In many cases, traditional data is limited and this is where alternative data comes into play. This data comprises a wide range of unconventional information, such as consumption patterns, online behavior, utility payments, rental history, among others.
In Latin America, the use of alternative data has become critical for assessing the credit risk of individuals and companies that lack traditional credit histories. AlgoNew’s technology allows, for example, the analysis of spending patterns across bank accounts or utility payment history to provide a more complete picture of a credit applicant’s ability to pay.
Integration of Artificial Intelligence in Credit Evaluation
The implementation of AI significantly streamlines the credit evaluation and decision-making process. This not only reduces the operational costs associated with traditional evaluations, but also optimizes response times, allowing for greater agility in granting credit.
Using proprietary artificial intelligence techniques at AlgoNew, we have generated innovative approaches to the way this alternative data is analyzed for credit decisioning. Our machine learning algorithms and AI techniques can process large volumes of data efficiently, identifying patterns and correlations that may be missed by traditional methods.
By using AI, financial institutions are able to develop more accurate predictive models to assess credit risk. These models continuously adapt as more information is gathered, improving their ability to predict the payment and financial behavior of credit applicants.
Benefits and Challenges in Latin America
Financial inclusion has emerged as a key driver of economic and social development around the world. However, despite global efforts to expand access to financial services, the World Bank estimates that around 1.7 billion people lack a bank account, highlighting the persistent gap in access to safe financial products.
In particular, underserved areas and marginalized communities are the most affected by this disparity in access to financial services. The microfinance industry, which has historically been the avenue for serving this segment of the population, faces significant challenges. Traditionally, risk assessment in this sector has relied on physical visits to businesses and referrals from neighbors, which implies high operating costs and unaffordable microfinance interest rates for many.
The adoption of alternative data and the implementation of Artificial Intelligence (AI) in lending in Latin America is opening up new perspectives and transformative opportunities. This approach significantly broadens the potential customer base, opening the door to individuals and communities that previously had no access to financial services.
If you are interested in exploring how this type of technology can take your business to the next level, contact us at https://www.algonew.com/contact
Artificial Intelligence has revolutionized the world of healthcare. Thanks to it, abnormalities can be detected in early stages of the disease, patients can search for information about their symptoms, schedule appointments online, receive health advice… Do you want to know more?
About AlgoNew
At AlgoNew, we add intelligence to your digital interactions so you can deliver a personalized and efficient experience to your customers. How do we do it? Through a combination of intelligent decision management, natural language processing, and advanced analytics.
We use algorithms to help you make informed decisions in real-time and improve the efficiency of your processes. In other words, we make sure that every action you take is based on relevant data and artificial intelligence, resulting in faster and more accurate decision-making.
Conversation management, on the other hand, refers to how you interact with your customers through digital platforms such as chatbots or virtual assistants. We use natural language processing technology to understand and respond to customer requests effectively and naturally. This means your customers can interact with digital systems in the same way they would with a human, which enhances the user experience.
Finally, we use advanced data analytics to gain valuable insights from your digital interactions. We analyze the data generated from your interactions to identify patterns and trends that can help you improve your business. This can include things like identifying common problems your customers have and how to solve them efficiently or identifying areas for improvement in your business processes.
This combination of intelligence that we offer at AlgoNew can help you significantly improve your digital interactions with customers. It helps you make informed, data-driven decisions, interact with them effectively and naturally, and gain valuable insights into your business processes.
All leads to a better customer experience and greater business efficiency!
