Amount Blog

AI Policy Optimizer: Smarter Lending, Empowered Employees

Written by Garrett Laird | Oct 24, 2024 2:07:51 PM

The rise of artificial intelligence (AI) in financial services is reshaping the landscape, providing powerful tools to enhance decision-making, reduce risks, and improve operational efficiency. What sets AI apart, however, is not just its potential to automate processes but its ability to empower employees. Amount’s new AI Policy Optimizer is a prime example of this, offering lenders a revolutionary way to optimize their credit, pricing, and fraud management strategies while keeping their teams central to the decision-making process.

What Does the AI Policy Optimizer Do?

At its core, the AI Policy Optimizer is a comprehensive tool that helps lenders analyze and adjust their policies with the power of AI. The tool offers two key functionalities:

  1. Automatic Application Data Review and Recommendations: The AI Policy Optimizer automatically reviews a lender’s application data and generates tailored recommendations. This automated process provides deep insights into which applications could have been approved under different policies, helping lenders understand how adjustments to credit thresholds, fraud triggers, or pricing could improve outcomes.
    The tool allows lenders to quickly identify where they can safely extend credit or adjust pricing models to increase approvals while maintaining compliance and minimizing risk. This ensures that lenders can operate more efficiently without sacrificing regulatory standards.
  2. Performance Data Upload for Deeper Insights: For institutions that want an even more comprehensive view, the AI Policy Optimizer allows users to upload their performance data, structured similarly to the Metro 2 reporting file format, which banks and credit unions already maintain. This feature provides an even deeper level of analysis, particularly around pricing policy optimizations. By uploading historical loan performance data or other relevant datasets, lenders can explore how changes to their policies might impact profitability, approval rates, and fraud detection. This detailed analysis provides critical decision points for fine-tuning policies in a way that maximizes business outcomes while maintaining compliance.

Empowering Teams, Not Replacing Them

A critical aspect of the AI Policy Optimizer is its focus on empowering employees. As financial institutions continue to adopt AI, the fear of job displacement is ever-present. However, the AI Policy Optimizer is designed to augment human expertise rather than replace it. The tool automates complex data analysis tasks, allowing credit teams to focus on high-level strategy​.

This approach aligns with broader trends in the industry. According to the 2024 Cornerstone Advisors report, 53% of financial institutions are planning to adopt AI technologies, with most viewing these tools as a means to enhance productivity rather than reduce staff. By automating the time-consuming tasks of scenario analysis and policy modeling, the AI Policy Optimizer frees up employees to concentrate on strategic decision-making, ultimately improving job satisfaction and team performance.

Balancing Agility and Compliance

One of the most significant challenges in using AI in financial services is ensuring compliance with constantly shifting regulatory standards. The AI Policy Optimizer was built with these concerns in mind. 

The tool generates recommendations based on existing data, which never moves off-platform nor is it shared with third parties. Only attributes which are approved for each use case are considered, for example FCRA compliant attributes for credit and pricing. Every recommendation is fully transparent, offering an audit trail that details the data points and analysis behind each suggestion. This provides lenders with peace of mind, knowing they can confidently adjust policies without risking non-compliance.

Seamless Integration for Rapid Execution

In today’s fast-paced financial environment, the ability to act quickly on new insights is crucial. The AI Policy Optimizer integrates seamlessly with Amount’s Unified Account Opening and Lending Platform, enabling lenders to publish new policies with just a few clicks. However, the tool does not automatically push policies live. Instead, it makes recommendations, which are then reviewed by the lender’s team. The final decision to implement any policy changes remains firmly in the hands of the bank or credit union​.

A Tailored Approach to Policy Optimization

What makes the AI Policy Optimizer especially powerful is its flexibility. Lenders can tailor the tool to focus on specific business objectives, whether it’s increasing approval rates, optimizing credit performance, or reducing fraud. This customization means that lenders can use the tool to address the unique needs of their institution, ensuring that the recommendations align with their strategic goals.

Furthermore, the tool’s ability to work with a lender’s proprietary data—rather than relying solely on broader market trends—means that the recommendations are highly personalized. This specificity is critical for institutions that serve niche markets or have unique customer demographics, allowing them to fine-tune policies in a way that resonates with their target audiences.

The Future of AI in Lending

As AI adoption continues to rise in the financial sector, tools like the AI Policy Optimizer will become essential for staying competitive. According to the Cornerstone Advisors 2024 report, 42% of financial institutions cite fraud reduction as a top concern, and 37% are already investing in AI solutions to tackle this challenge. The AI Policy Optimizer provides a solution to these concerns, offering lenders the ability to optimize their policies while maintaining control over their compliance and risk management processes.

Conclusion

Amount’s AI Policy Optimizer represents a new era in lending strategy, where AI doesn’t replace employees but empowers them to make smarter, faster decisions. By automating the complex task of policy modeling and offering customizable insights based on unique performance data, the tool enables lenders to refine their strategies while ensuring compliance. This not only enhances operational efficiency but also gives employees the freedom to focus on high-impact, strategic work.

In an industry that demands agility and precision, the AI Policy Optimizer ensures that lenders have the tools they need to thrive—while empowering their teams to remain at the center of decision-making.

For more information on how the AI Policy Optimizer can transform your lending strategy, reach out to us today www.amount.com/demo