In a significant move towards enhancing the efficiency of small business lending, First Internet Bank has integrated Parlay Finance’s AI-native Loan Intelligence System (LIS) into its operations. This innovative system is expected to transform the bank’s approach to Small Business Administration (SBA) lending, potentially boosting operational efficiencies by as much as 50%. By automating numerous manual tasks, the LIS aims to provide deeper insights for loan decision-making, streamlining what has traditionally been a time-consuming process.

According to a press release issued on October 16, the collaboration with Parlay Finance has enabled First Internet Bank to reclaim valuable hours that were previously spent on manual data entry and repetitive tasks. Nicole Lorch, the bank’s President and Chief Operating Officer, emphasized the considerable time savings that the integration has already begun to offer, highlighting a common pain point in the lending industry: manual bureaucracy.

Craig Fortner, the senior vice president and chief information officer, added that the LIS has seamlessly integrated into the bank’s existing tech stack. This has led to an immediate boost in data quality and workflow efficiency, essential factors for any bank aiming to stay competitive in today’s fast-paced financial landscape.

The features of the Loan Intelligence System are particularly noteworthy. It offers real-time customer onboarding and guidance, which significantly improves the speed and accuracy of loan submissions. Additionally, the system employs intelligent information validation by tapping into various data sources, including credit bureaus, financial statements, tax records, and incorporation documents. This multifaceted approach not only expedites the decision-making process but also enhances the bank’s ability to pre-vet and structure deals more efficiently.

For borrowers, the LIS promises to revolutionize the customer experience. Small business owners can now submit inquiries and receive real-time updates regarding their business health, application status, and next steps in the loan process. This level of transparency and communication is crucial for building trust and satisfaction among clients.

Parlay Finance’s founder and CEO, Alex McLeod, underscored the importance of this integration, stating that First Internet Bank is paving the way for relationship banking in the digital age. By adopting advanced AI solutions, the bank is not only enhancing its own operations but also enabling lenders to serve a much larger segment of the small business market.

This shift towards automation in loan underwriting is not just a trend; it reflects a broader movement within the financial services industry aimed at improving access to credit. Current reports indicate that as more lenders adopt AI-driven decision frameworks, there is a democratization of access to working capital for small and medium-sized businesses. This is particularly vital in a challenging economic landscape where traditional lending methods may not suffice.

A study published earlier this year by PYMNTS highlighted that 84% of lenders with robust underwriting practices found that their small business loans were highly profitable, suggesting that an emphasis on data quality can yield significant returns.

As digital lending continues to evolve, it remains clear that solutions like the AI-native Loan Intelligence System are not merely enhancements but vital components of a competitive strategy for financial institutions. The promise of improved efficiency, better data quality, and enhanced customer experiences indicates a bright future for AI in banking.

Overall, the integration of Parlay Finance’s LIS by First Internet Bank signifies a major step forward for the industry. It showcases how the adoption of advanced technologies can fundamentally reshape traditional banking frameworks, catering to the evolving needs of small businesses and setting a benchmark for others to follow.