Private Credit Industry Leverages AI for Faster, Smarter Lending Decisions

The private credit industry is growing rapidly, with assets under management expected to reach $2.28 trillion by 2025, according to Preqin. To keep up with this growth and make lending decisions more efficient, JPMorgan Chase is using artificial intelligence (AI) and machine learning to automate the analysis process.

Traditional credit analysis involves manual data extraction from documents, which can take hours or even days. With AI, analysts can extract and standardize information in seconds, freeing up time for more strategic work. Predictive models can also help identify potential defaults before they happen, allowing lenders to intervene earlier.

JPMorgan's global head of underwriting, credit financing, Sarah Gang, emphasized the importance of identifying potential defaults early on, saying 'The probability of default is exactly what we’re trying to solve.'

The adoption of AI-enabled underwriting technology is already accelerating, with a recent survey finding that 20% of private credit lenders are using third-party underwriting tools, up from 10% the previous year.