As competition increases and defaults rise, banks, credit card companies and non-bank lenders all seek to create a more accurate credit scoring model. No matter what type of financial institution involved or what model they employ, consumer credit scoring is facing new and increasing challenges.
As we awaken to 2019, recent financial technology developments are signaling a new disruptive era in credit scoring. Modern credit processes and risk modeling platforms are leveling up with algorithm-based solutions that are using Artificial Intelligence (AI) based innovations. Improved credit scores usage combined with data from alternative sources are offering deeper data insights, greater accuracy, and more financial transparency. In effect Machine Learning for credit risk models are closing an information gap between banks and consumers and opening opportunities for new consumer experiences.