US Bank partnered with Pagaya Technologies for inclusive lending with AI

US Bank has tapped Pagaya Technologies to leverage artificial intelligence (AI) 

The partnership entails the bank's adoption of its partner's embedded lending technology and credit intelligence network to initiate a "second review" of loan applications if the applicant fails to meet the bank's traditional lending criteria initially. In evaluating loan applications, lenders typically consider various factors such as the applicant's credit score, credit history, and debt-to-income ratio. The collaboration is expected to be integrated into the bank's Simple Loan service, designed to assist clients in meeting short-term cash needs ranging from $100 to $1,000 through transparent and easy-to-understand installment loans. Upon approval through Pagaya, the bank will originate the loan and provide ongoing services to the client throughout the loan's duration.

US Bank asserts that since the partnership's inception a "few short months" ago, the technology has facilitated personal loans for over 2,000 applicants, with the Simple Loan service purportedly saving borrowers approximately $40 million since its launch in 2018. Recognizing that not all clients meet the bank's traditional credit criteria, Mike Shepard, head of consumer lending partnerships at US Bank, emphasizes the aim to expand access to personal loans and responsible credit solutions, thereby providing clients with funds when they are most needed. This collaboration follows the bank's call for a vendor capable of driving advanced process automation throughout its operations organization last September, reflecting the institution's increasing interest in artificial intelligence.