US Bank taps Pagaya to Enhance Credit Decisioning with AI

US Bank, headquartered in Minneapolis, has entered into a partnership with US-Israeli fintech company Pagaya Technologies to integrate artificial intelligence (AI) into its credit decisioning processes for personal loan applications.

Under this collaboration, the bank will utilise Pagaya’s embedded lending technology and credit intelligence network to conduct a “second review” of loan applications that do not meet its traditional lending criteria initially.

Typically, lenders assess various factors such as an applicant’s credit score, credit history, and debt-to-income ratio when evaluating loan applications.

The partnership is anticipated to be integrated into US Bank’s Simple Loan function, which offers transparent and easily understandable instalment loans ranging from $100 to $1,000 to assist clients in meeting short-term cash needs.

If an applicant is approved through Pagaya’s technology, US Bank will originate the loan and provide ongoing services throughout the loan’s term.

US Bank asserts that since the partnership’s inception a “few short months” ago, over 2,000 applicants have been granted personal loans using this technology. Additionally, the bank claims that its Simple Loan function has saved borrowers approximately $40 million since its launch in 2018.

Recognising that not all clients fit within its traditional credit parameters, Mike Shepard, head of consumer lending partnerships at US Bank, emphasises the importance of expanding access to personal loans and responsible credit solutions. He states, “We are giving clients access to funds when they need it the most.”

This collaboration follows US Bank’s call for a vendor capable of “driving advanced process automation” across its operations organisation in September. This initiative underscores the bank’s growing interest in leveraging AI technology to enhance its operations.