The Rise of Digital Labor in Lending


The dawn of digital labor in the form of artificial intelligence, chatbots and process automation has arrived for financial institutions looking to improve their back-office lending operations. What once was the stuff of science fiction is now a reality. In fact, digital labor is becoming a staple of business across multiple industries, and it's fueling consumer expectations.

Those expectations are playing a prominent role as financial institutions decide whether to embrace the emerging technologies. People are experiencing the speed and efficiency digital labor provides in other areas of their lives, such as when investment firms use it to reconcile trades and cut a day out of the process. Consumers will notice if financial institutions aren't keeping up.

Looking at it through that lens, adopting artificial intelligence and related technologies can be about far more than trying out the latest technology trend; it's about meeting consumer expectations and achieving a banking experience that's consistent with other industries.

At its core, digital labor is a set of tools that comes in various forms and performs different duties that match an institution's needs. But it's important to fully grasp what's available and what it can do.

Robotic Process Automation

It's among the simplest versions of digital labor. Robotic process automation can mimic the actions of people completing various types of processes. In lending terms, for instance, the technology can apply to the process of managing the steps in the maturation of a consumer's automotive lease.

Cognitive Computing

The next rung on the ladder of digital labor sophistication, cognitive computing acts like a search engine. It offers the ability to take in requests for information and provide optimal responses.

Virtualized Agent

The technology is among the most sophisticated for lending operations and presents the possibility of major changes within back-office and consumer-facing services, such as mortgage management. The virtualized agent is a human avatar that has parsed an enormous knowledge base. People can ask it questions, and it will understand the context, all the way down to the tone of voice. That kind of technology can create a platform for lending systems, enabling financial institutions to employ digital labor as help desk attendants or loan officers, providing the steps to process a request while remaining compliant.

Solving Common Problems

No matter what type of emerging digital labor financial institutions adopt, they give themselves the potential to realize practical benefits and solve common problems across their lending operations. Those problems often revolve around achieving greater audit visibility, reducing the cost of operations and driving higher process quality.

Slotting the correct digital labor into the lending process can improve efficiency and effectiveness, enabling financial institutions to complete processes with less manual labor and at reduced costs. Those technologies leave a full audit trail of all actions and improve quality by removing the risk of humans introducing errors, whether through key entry or interpretation.

The long-term ripple effects of digital labor are nearly impossible to gauge, but financial institutions can expect it to change the way they view entry-level talent and back-office staffing. Highly manual, rules-oriented positions might fade away, and, as a result, prompt a shift in the career entry points at financial institutions.

Digital labor, in some form, is already in place, and people in financial services already are testing it out. The challenge for financial institutions is to find the type of digital labor that works best for them.

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