AI Case Study

JPMorgan Chase sped up loan application and approval process for small businesses using AI-powered OnDeck to analyse a variety of online data

JPMorgan Chase has extended a partnership with the online small business loan provider OnDeck to use algorithmic lending decision process to approve business for loans via the Chase Business Quick Capital.

Industry

Financial Services

Banking

Project Overview

From PYMNTS.com: "Through Chase Business Quick Capital, small businesses can access up to $200,000 in loans with terms up to 24 months. The online lending product is Chase’s, powered and enabled by OnDeck technology". According to Business Insider, "Using online data and relatively little input from the business owner, On Deck's algorithms asses risk, build credit profiles, and make lending decisions quickly. Everything from cash flow to past credit use to vendor payment history to legal history goes into the model. It even takes into account a presence on sites like Yelp".

Reported Results

The loan application process is substantially expedited, as the system takes "minutes, reaches a decision in just seconds and delivers funds as early as the following day" according to PYMNTS.com.

Technology

Function

Operations

General Operations

Background

From Business Insider: "'Banks typically don't love lending to smaller businesses... It's much more efficient for a bank to make a million dollar loan than a $50,000 loan.' This has been the status quo for years, and banks have been slow to innovate in the space due to tight regulatory scrutiny, their sheer size, and issues with their legacy business." JPMorgan Chase stated on PYMNTS.com that it wanted "to be the easiest bank for small businesses to work with, and part of that is simplifying delivery of our products so they have more time to run their businesses."

Benefits

Data

Legal history, vendor payment history, cash flow statements online reviews, third-party data; likely JPMorgan Chase internal data