How AI Helps Payday Lenders Work Faster and Protect Sensitive Data


Artificial intelligence is making steady progress in all major industries. Direct lenders offering payday financial solutions were among the first that provide short-term loans online. That gave them a head start in developing smart solutions for their clients.

One leading industry example is 1FirstCashAdvance, a platform for consumers to access emergency payday loans from legitimate direct lenders. The company has partnered with several IT leaders to cover the three main objectives: fraud detection, credit scoring, and preliminary loan decisions. AI-assisted professionals are responsible for the loan application process. As an effect, errors are caught early in the process, and customers get fast loans without compromising on the quality of the service.

Fraud detection. Financial crime is on the rise in the lending industry. To stay safe, payday businesses use artificial intelligence to confirm a person’s identity. 1FirstCashAdvance CEO Latoria Williams states that identity theft is a major concern for the lending industry, with scammers coming up with more elaborate schemes. Their company took extensive measures to research, identify, and successfully combat fraud attempts. They built a custom protection wall that thoroughly checks the data received and saves hours of tedious human labor. All the data going through the platform is encrypted and safely transferred to direct lenders only.

Credit scores check. Unlike traditional financial institutions, direct lenders pay less attention to an applicant’s credit score. That means people with lower credit scores also have a chance to get approval. Nonetheless, most lenders still have to run a credit check through alternative databases. AI does that automatically in a few seconds, thus speeding the work process and helping millions of people receive the money they need faster.

Loan decision. Although the lender has the final word, AI generates a preliminary decision based on a custom dataset. Ms. Williams states that artificial intelligence makes unbiased decisions and can handle the task with a low error rate. The upper management with 1FirstCashAdvance decided to keep human verification to eliminate machine errors in case they occur. Due to the automation of verifying procedures, lenders spend by 20% less time on each application. As a result, they can make a loan decision faster and assist more applicants on a daily basis. To some customers, a payday loan with no credit check is their last resort. For that reason, the entire team takes their roles seriously and does its best to handle loan requests as fast as possible. Their next step is providing their customers with AI consulting services, available 24/7. The project currently undergoes rigorous testing and the estimated release date is within half a year or one year max.

SBS has participated in one of the ongoing projects 1FirstCashAdvance was developing a year ago to remove bias from machine loan processing. The issue is a leading concern for FinTech companies in general. Due to our extensive knowledge in the field, we helped adjust the algorithms so that the tools developed follow all risk-assessing and security protocols. If you are the owner of a lending business interested in our SAFE Advanced Solutions, feel free to contact us and learn more.