Many banks and credit unions have outdated business models and legacy infrastructure that weren’t designed for today’s consumer.
Banks wanting to reach new customer segments and grow their lending portfolios need to increase their funding speed and offer more flexible funding options. This can be accomplished with a scalable lending platform that integrates real-time data and third-party providers, allowing lenders to make better-informed decisions.
AI-based lending solutions are being rapidly implemented by most of today's forward-thinking bank executives. What’s more, AI lending solutions provide the tools your bank needs to increase loan volumes without increasing risk.
Lenders who don't adopt AI solutions are unable to compete effectively against their competition due to slower response times for loan decisions and fragmented workflows.
Keep reading to learn more about the benefits of AI lending solutions and how your bank can effectively scale its operations responsibly and safely.
The Limitations of Legacy Lending Systems
While older lending systems were adequate before advanced technology became the norm, they impede growth in today’s digital-first economy.
Several factors contribute to this challenge.
Challenges in Launching New Products and Modifying Systems
The costs associated with modifying or upgrading older systems can be high. This often prevents banks from launching new loan products or modifying their underwriting criteria fast enough to meet borrower expectations.
Fintech companies and larger banks, on the other hand, are designed to add new products and alter policies as needed. So they’re able to implement changes in just a few weeks.
Higher Costs and Increased Risks With Manual Workflows
Manual application processes involve extensive paper trails and documentation, evaluating an applicant's financial history, performing credit analysis, and dealing with exceptions.
These manual workflows increase a bank's operational costs as well as the risk of human error. It can also create inconsistencies, lead to compliance gaps, and limit your bank’s ability to scale profitably.
Fragmented Data Silos
Traditional lending systems have fragmented borrower and financial data spread out across systems and spreadsheets, resulting in a lack of cohesion.
Built-in dashboards on AI systems provide a unified view of real-time data, helping decision-makers leverage analytics more effectively.
Lack of Integration Capabilities
Older systems make it more difficult to integrate new capabilities or partner with third-party tools and providers.
The right AI platform connects easily with data providers, document services, fraud tools, and customer-facing platforms. These partnerships are essential for banks to succeed today.
AI Lending Solutions - The Backbone of Modern Banking Infrastructure
AI in banking, according to the American Bankers Association, can result in lower interest rates for borrowers through better credit analysis, leading to fewer loan defaults.
AI lending solutions provide financial institutions with the ability to support a wide variety of loan products with minimal reconfiguration (if any) required.
By far one of the biggest advantages of AI lending solutions is that banks have the tools needed to grow and scale more effectively and cost-efficiently.
Important Features of a Scalable, AI-Based Loan System
A scalable AI-powered loan system must be designed to evolve as a bank grows, adapt to regulatory change, and respond to shifting borrower needs.
The following features represent the core capabilities banks should look for when evaluating AI lending solutions that can support long-term growth without adding operational complexity.
Flexible Architecture and Interoperability
A scalable AI-based loan system uses an API-first architecture that facilitates smooth connectivity between a bank’s core system and fintech partners, KYC and data providers, compliance systems, and CRM systems.
With faster implementation of an AI lending solution, there’s less disruption to core systems and operations as your bank innovates and adopts new technologies and capabilities.
An AI-based loan system also has a modular design to provide banks with the ability to:
- Launch new loan products
- Change credit or underwriting policies
- Enter into new markets without the need to build new core systems
Automated End-to-End Processing
Automation is one of the main contributors to scalability in AI lending solutions. Automated processes can handle much of the loan origination and underwriting lifecycle, including:
- Onboarding
- Document intake
- Data analytics and risk assessment
- Credit review
- Loan decisions
- Compliance
- Loan closing
- Loan servicing
Automation minimizes manual workflows in loan processing, reduces delays, and gives lenders increased operational efficiency.
Intelligent, Data-Driven Decisioning
AI lending platforms evaluate applicants based on real-time data from multiple sources, including:
- Credit bureaus
- Bank and vendor transactions
- Borrower financials
- Other third-party providers
An AI-based loan system centralizes this data into one decision-making platform to understand borrower behavior and risk profile. This helps lenders make more accurate and consistent underwriting decisions.
Banks retain control over their credit risk and underwriting policies and can adjust their policies as needed to ensure portfolio health.
How Banks Can Scale AI in Lending
Scaling an AI lending ecosystem is best accomplished through a phased approach. Here are some steps to consider for scaling AI lending solutions responsibly and successfully.
1. Start with a Single Product.
Instead of trying to modernize workflows for every lending product all at once, begin with one high-impact loan product. For many banks, this is often small business term loans or lines of credit.
Once your team has outlined workflows, decision models, and which integrations are needed, the same framework can be reused to:
- Launch other loan products
- Adjust underwriting rules for different risk tiers
- Support new borrower segments
Incorporating this model when implementing AI lending solutions dramatically reduces the time-to-market as your bank’s lending portfolio grows.
2. Scale Volume Through Automation
True scalability comes from increasing loan throughput without adding staff.
As application volume increases:
- Decision timelines remain consistent
- Underwriting quality improves through standardization
- Operational costs per loan decline
AI-driven automation can help your bank process significantly higher application volumes by eliminating manual steps across intake, underwriting, and compliance.
3. Expand Into New Markets With Configurable Policy Controls
AI lending platforms allow banks to scale geographically by configuring region-specific:
- Credit policies
- Regulatory rules
- Risk thresholds
Your bank will best benefit from developing standardized workflows with localized controls. This accelerates expansion while maintaining governance.
4. Use Portfolio-Level Insights to Guide Growth
Scaling responsibly requires visibility beyond individual loan decisions. AI lending solutions provide portfolio-level analytics that can help your bank:
- Identify emerging risk trends
- Adjust credit policies in real time
- Re-evaluate portfolios as volumes increase
These insights contribute to proactive growth instead of reactive risk management.
5. Build an Ecosystem
Banks that scale successfully treat AI lending as a core ecosystem and not a standalone tool. Open APIs allow institutions to continuously add:
- New data sources
- Fraud and identity services
- Customer experience enhancements
This approach ensures your bank’s AI platform doesn’t become another legacy constraint.
Choosing the Right AI Lending Partner
Choosing the right AI lending partner is paramount to successfully scaling your lending operations. The ideal partner offers more than the technology needed to power your platform. They understand your bank’s unique needs and will provide ongoing support as new AI technologies are implemented to grow your lending business.
Look for reputable, proven, and configurable platforms built specifically for financial institutions, with transparent and explainable decisioning that keeps control of credit policy and compliance in your bank’s hands.
Just as important, the platform should integrate easily with your bank's existing systems, helping it to innovate and grow with confidence.
Case Study: Biz2X’s AI Lending Solution Helps TAB Bank Scale With Speed and Precision
Utah-based TAB Bank has been a leader in expanding capital access to underserved businesses. Its bank leaders realized that its existing infrastructure was unable to efficiently handle larger loan volumes.
The bank needed an AI lending solution that could streamline both front-end borrower journeys and back-end banker workflows.
TAB Bank partnered with Biz2X to address these challenges and launched its customized Biz2X Ascend platform in early 2023. The platform provided a fully digital lending experience, combining a borrower-facing application with a configurable banker portal to improve operational efficiency.
Since going live on Biz2X, TAB Bank tripled its loan volume year-over-year, increased average loan sizes by 27%, and reduced average decision times from 19 days to just 7. Approval rates reached more than 78%.
Biz2X's solution helped TAB scale responsibly through faster growth, stronger margins, and a more consistent lending experience. Meanwhile, the bank was able to continue helping more SMBs access the capital needed to succeed.
Final Thoughts
AI lending solutions provide the speed, scalability, and operational efficiency necessary to compete in a digital-first environment.
Human oversight is still crucial when implementing AI-driven lending solutions so that it’s executed in accordance with your bank’s defined credit policy, ethical standards, and risk tolerance.
Automated decisioning, strong data governance, and human oversight can help your bank scale responsibly, manage risk, and maintain customer trust.
Selecting the right AI platform and strategic partner ensures flawless integration with existing systems, supports future innovation, and strengthens the borrower experience.
To future-proof your lending operations, you’ll need to build a flexible, digital lending operation that will adapt to evolving borrower needs, regulatory requirements, and market pressures. An AI-based loan system can empower your bank to grow confidently, today and well into the future.
FAQs
1. What are AI lending solutions?
AI lending solutions use machine learning, generative AI, and automation in the loan origination process to make faster, more informed decisions. AI lending platforms are designed to scale easily and quickly so that banks can write more loans without increasing risk exposures.
2. How does AI in lending benefit small and regional banks?
By reducing manual work for loan teams, AI can reduce the time from application to funding by 70%. Smaller banks can better compete against larger financial institutions and Fintechs. A lending solutions also provide a superior user experience and helps banks serve more customers without needing to hire more staff.
3. Can AI lending solutions integrate with my bank's existing systems?
Yes. Most modern platforms are API-driven and designed to work along with core banking systems. Choosing a platform that's designed to integrate easily will ensure fewer disruptions for your bank.
4. Does AI in lending replace the need for human intervention in the loan process?
Forward-thinking banks view AI as an enabler and not a replacement. A hybrid approach that combines advanced automation with human judgment preserves trust, regulatory integrity, and long-term customer relationships.
5. How long does it typically take to implement an AI-based loan system?
Implementation timelines vary based on a bank’s existing infrastructure, data readiness, and integration needs. Biz2X's platform is one of the top in the industry and can have your AI system up and running in as little as 90 days.
