Artificial Intelligence Can Help Banks Ride the Incoming Wave of Non-Performing Loans

A surge in non-performing loans (NPLs) is predicted as a result of the economic crisis brought on by the COVID-19 pandemic. Artificial intelligence may be the best technology for financial institutions to leverage when handling the forthcoming deluge.

20 November 2020

NPL Surge Covid-19

Even pre-COVID-19, non-performing loan transactions had their challenges. “Consistent, quality data,” “organized documentation” and “smooth due diligence” were rarely mentioned in the same sentence as “NPL.”

Right now, investors and global banks are looking at a massive, COVID-19-triggered wave of NPLs. European banks, already besieged by pre-COVID-19 NPLs, will feel the onslaught of loan defaults the most. NPLs will impact balance sheets, so financial institutions will need to act quickly.

When that wave arrives, institutions that can’t accommodate investors quickly will be at a disadvantage. Efficiency, clarity and transparency — many of the things NPL deals seldom offer — will be a necessity.

During a time when teams are virtual and onsite due diligence is hampered, how can NPL investors create a competitive advantage? Enter artificial intelligence (AI). 

In our new white paper, Artificial Intelligence: 4 Key Benefits for Non-Performing Loan Investors, we show how AI — combined with secure cloud storage platforms — can help simplify data, streamline reporting and overcome the tedious due diligence NPL transactions often require..

AI provides financial institutions with an incredible competitive advantage. Forward-looking firms are already leveraging AI-powered cloud-based platforms to create efficiencies. AI can save enough time and money that the NPL industry projects up to a 40 percent increase in productivity over the next 15 years.

Using machine learning, deep learning — even natural language processing — AI can parse massive volumes of data. For instance, in an NPL offering, AI can comb through documents to detect complex language about the legal relationship between borrower and lender. What's more, the technology can identify missing documentation much sooner than someone working on the deal.

In a remote-work world that comes with a set of challenges, AI can close information gaps while maintaining transparency for even smaller investors. 

Download the white paper to learn how AI can give investors the ability to get comfortable quickly, and adeptly surf the oncoming wave of NPL offerings.

Patricia Gatmaitan

Patricia Gatmaitan

Patricia is director of product marketing for banking and securities at Intralinks, responsible for content and go-to-market strategy for the debt capital markets business. Prior to joining Intralinks in 2019, Patricia held senior product marketing and communications roles at global financial services firms including Envestnet, IHS Markit, and Morgan Stanley.

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