How AI could change the future of P2P

The use of Artificial Intelligence (AI) could change the way peer-to-peer lending is done in the future, leading to streamlined processes and possible regulatory upheaval, industry stakeholders have claimed.

As the use of AI in the financial services sector grows, several P2P industry stakeholders have been debating the use cases of the technology and how it can shape the future of P2P.

Last year, Kuflink stated that AI is “the next frontier for lending”, and said that it had already begun building support algorithms to predict future trends based on historical data.

Read more: Swiss P2P debuts AI loan predictor

Meanwhile, Qardus uses machine learning for its credit risk scoring, and Crowd2Fund’s automated investing tool SmartInvest incorporates AI.

Bruce Davis, co-founder and managing director of Abundance Investments, said that AI has a place in the P2P landscape, but with certain limitations.

“It is definitely something which will be changing how we do things in the future,” he said.

Read more: Mintos expects ‘positive future’ for AI tools

“The ability to tailor content and be creative in a way that is scalable is something to explore and we are already seeing offerings to simplify the production of contracts and other investment documentation, which would certainly be worth considering when you have predictable and relatively straightforward lending terms.

“I’m not sure it is a revolution but it will certainly mean changes to the relative productivity and efficiency of P2P and crowdfunding companies.”

Read more: P2P marketplaces predicted to expand into new marketplaces and adopt AI

However, Lee Birkett, founder and chief executive of JustUs, warned that using AI on lending platforms could potentially pose a regulatory risk.

“If AI recommends certain financial products to investors it can be viewed as a form of advice,” he said.

“The use of AI could be classed as a promotion if it leads to a product outcome.”