Cybersecurity is one of the greatest risks facing the financial industry. Digital lenders are more vulnerable here. Today’s lending industry sits in the eye of a perfect storm, driven by three key components.
First, alternative financing, fuelled by fintech mobile apps, is growing by 51% per year. And traditional lenders are all going digital. It’s big news that’s catching the attention of hackers. Second, massive data breaches are throwing enormous amounts of personal financial data out on the dark web. And third, instant-decision software systems, often supported by third-party vendors, create a variety of vulnerabilities that cyber criminals are ready, willing and able to exploit.
As digital lending continues to grow, firms are looking for ways to secure their delicate data. Here Artificial Intelligence has become the need of the hour. AI’s crucial role right now is to offload work from human cybersecurity engineers, to handle the depth and detail that humans cannot tackle fast enough or accurately enough. Advances in machine learning technology mean that AI applications can also automatically adapt to changes in threats and spot problems as they arise.
AI can discover risks and alert any possible attacks beforehand. Machine Learning can follow the patterns of criminals and tell when an attack is coming. Then, the part of the company’s system or network that is vulnerable can be patched before it’s too late. AI can also match business owners with the right lender. AI analyses and authenticates users’ transactional data, and income verification and spend analysis helps highlight risk factors used for a richer credit scoring experience. This will reduce the risk of default and increase borrowers’ financial profiling. AI quickly detect any suspicious behaviour. It can analyse hundreds of thousands of visitors and categorize them based on their behaviour and threat level in seconds. It can improve the authentication process to a much accurate degree.
AI makes it possible for lenders and borrowers to move through the lending process faster through quicker approvals, funding and underwriting. In legitimate transactions, this is beneficial. However, that swiftness also makes it harder to catch or recognize a fraudulent transaction before it goes through.