The explosive emergence of ChatGPT, Google Bard and other remarkable, new generative AI applications clearly indicate that the time of Artificial Intelligence (AI) has finally arrived.

Financial services organizations are not immune to this trend, as new technology is developing at a rapid pace to automate manual processes, streamline decisions and transform the way financial institutions interact with their customers. Revenue growth for banks has always relied on presenting lending solutions to suitable clients at the appropriate pricing. This new technology helps lenders streamline the lending cycle and reduce time to decisioning, giving them a competitive edge.

Industry-wide recognition of the need to employ AI and other cognitive technologies to improve current processes is growing. Nearly half of respondents to a recent Nvidia survey said that AI will help increase annual revenue by at least 10%, and over a third anticipated yearly cost savings of at least 10%. Increased support from the C-suite is sure to follow, with two-thirds of respondents stating that “my executive leadership team values and believes in AI,” compared with just 36% who believed this a year ago.

The benefits for financial institutions can be game-changing. According to McKinsey & Co. the annual potential value of AI and analytics to the global banking sector may exceed $1 trillion.

However, implementing new technology is not an easy task for any organization. Many institutions are saddled with siloed legacy systems, incomplete data, and outdated manual workflow processes. Lenders should begin by identifying the key gaps in their credit process that would benefit from automation to capture efficiency gains and cost optimization.

For banks, the key to achieving a successful digital transformation lies in evaluating existing customer and employee experiences to determine where investments should be focused for optimal results. Simply automating or digitizing current practices is not enough to stay competitive. Banks must adopt a comprehensive approach that considers the entire customer journey and recognizes the potential for profitable growth through technology and strategic process improvements. By keeping these desired outcomes in mind, banks can develop a progressive vision supported by various departments such as sales, credit administration, IT, finance, capital planning, and the executive leadership team.

Recent advances in technology for credit analysis and financial statement processing make lending a key area for transformation. Delays in the pursuit of deals that are unlikely to be approved result in both opportunity and material costs for the customer and the bank. Reimagining the allocation of human expertise and process sequencing around this technology can deliver better decisions, faster—a key to improving the customer experience.
 

Accelerating Financial Spreading with QUIQspread

To help address these market challenges around financial spreading, Moody’s has built QUIQspread™, an automated spreading tool powered by AI that is the culmination of years of advancements in cognitive technologies.

“The promise that AI will change the world has been in the background for so long,” says Nelson Almeida, Director at Moody’s. “Now we are finally starting to see the effects of an almost exponential growth in AI models. The ability to apply AI and machine learning to the credit side is now coming to fruition.”

QUIQspread is an intelligent financial spreading software solution that uses advanced machine learning technology coupled with an intuitive user interface to accelerate time to decision on even the most complex financial statements—without sacrificing accuracy.

Since launching in 2019, QUIQspread has served over 100 lenders globally, ranging from the largest international commercial banks to regional banks, captive finance companies, insurance providers, asset managers, government agencies and financial technology companies.

QUIQspread is designed to accelerate the spreading process by generating completed spreads with an average accuracy of over 95%*. This allows lenders to enhance the entire credit decisioning process and gain more time to focus on higher-value, more cerebral activities.

The QUIQspread machine learning model was built and trained with one of the largest and most robust data sets in the industry, leveraging financial statement information from millions of individual borrowing entities of all sizes and types across a diverse range of industries. This means that QUIQspread’s AI currently produces results with higher accuracy than other leading spreading solutions on the market.

Moody’s innovative solution also supports multiple languages and complex, multi-unit and multi-entity borrowing relationships. It also provides an audit trail that enhances the organization’s ability to detect potentially fraudulent transactions. And because QUIQspread seamlessly integrates into your existing lending workflow, systems and processes, the result is less manual entry and improved data quality.

QUIQspread accelerates validation and processes data quickly so your team can generate considerable time savings and improve productivity in high-value activities. With hybrid intelligent spreading software, lenders can increase loan capacity and throughput via efficient decision-making, providing measurable benefits to the bottom line. 
 

Nedbank Saves Time, Improves Consistency and Reduces Errors with QUIQspread

With $71 billion in total assets, nearly 26,000 employees and over 600 branches, Nedbank is one of the largest financial institutions headquartered in South Africa. In its drive to work smarter and create better, more efficient internal processes, the Bank pursued ways to eliminate mundane, manual tasks across its lending workflows. Executives identified the commercial lending financial spreading process as an area suitable for digital transformation.

Citing Moody’s superior experience in the industry and its deep database of millions of customer data points, Nedbank chose QUIQspread, Moody’s AI-enabled digital financial spreading tool. According to Mariette Meyer, Head of Nedbank Commercial Banking Credit Enablement and Support at Nedbank, the firm decided to take a “big bang” approach, and upon implementation began “pushing everything through QUIQspread.” Today, over 90 percent of Nedbank's borrower financials are spread through the AI-enabled solution.

Previously, Nedbank's financial spreading function was disseminated across credit analysts located in 86 different offices, resulting in a lot of variability in how the analysts performed their job. Now, with the help of QUIQspread, financial spreading is done centrally from one location in a more standardized fashion, reducing variability and improving consistency in the process.

“QUIQspread has enabled our team to take on other activities,” says Meyer. “We’ve been able to centralize the department that deals with bringing in financials, freeing up our front-line staff’s capacity so they could focus on other tasks like developing our customer relationships."

Overall, Nedbank is pleased with its deployment of the QUIQspread solution.

“QUIQspread has allowed us to significantly reduce errors in our spreading process,” Meyer says. “The result has been time savings, improved standardization, enhanced data integrity and the opening up of workforce capacity.”
 

Automation is Key to Meeting and Exceeding Customer Expectations

The employment of digital automation tools throughout the lending process offers several real, tangible benefits to a financial institution. They include improved speed in every step from onboarding to underwriting to decisioning, while enabling greater efficiency, accuracy, and the freedom to redeploy knowledgeable workers to tackle more analytical organizational challenges. The outcomes are an improved experience for both customers and employees and the potential for an increase in loan book and portfolio size, without an increase of resources.

This same concept of leveraging technology to achieve scale and improved performance can be extended to the front office of your institution as well. Identification of high value and high potential customers or segments can be exponentially improved using the right algorithms, and when combined with an effective pricing of the holistic customer relationship, becomes a crucial differentiator versus the competition.

The landscape for lending is changing rapidly, and financial institutions face new pressures from every direction. For lenders to maintain competitiveness and profitability, they must ensure they can provide needed financing in a timely and efficient manner, while always keeping an eye on offering outstanding customer experience. Automation is the key to the future of lending, and those financial institutions that embrace it early—and effectively—will harvest the greatest rewards