Technology in lending decisions – will AI be the answer to faster CBILS roll-out?

The UK Government has already promised un-precedented financial aid for SME businesses to support the UK economy against the impact of COVID-19 on the UK economy and small businesses generally. One of these measures is the Corona Virus Business Loan Scheme (CBILS) which purports to offer interest free loans to businesses to support their working capital requirements as the UK economy grinds to a halt.

The initial measure has come under criticism – many feel that the CBILS scheme is not moving quickly enough and with an estimated 800,000 businesses reported to be heading for collapse within weeks the pressure is mounting on banks and HM Government to improve accessibility and speed up the application process.

The Chancellor on 3 April confirmed smaller companies will be further supported with business interruption loans and a new scheme for larger companies.

Banks of course are not charities, their boards have an obligation to act prudently and in the best interests of stakeholders just as in any other company. Could increased use of technology to speed up the decision making be part of the answer? The use of technology in the lending process is not a new concept and the use of big data in assessing creditworthiness is already being explored by financial institutions around the globe. The use of big data can use more metrics to make a more comprehensive assessment in respect of credit and algorithms can be used to build a profile where an applicant has little or no prior credit history.

So, will technology save the day? Probably not on its own, as speed of decision is only part of the problem. Whatever the answer, and for the sake of the SME market place, let us hope the aid promised is enough to get the UK economy through these difficult times.