Lending Reimagined: The Power of Intelligent Servicing

Hi everyone, hope you had a great 4th! I wanted to take a moment to share what our team at Canopy has been working on over the past several months.

We’ve been all in on something we call Intelligent Servicing. As we consider how AI will transform the future of fintech, loan servicing is an area that stands out for its high potential.

The last decade has seen a rapid evolution in AI/ML applied to origination and fraud. However, most lending servicing solutions are static once a loan is approved and transactions are posted.

At Canopy, we believe that the evolution of AI and machine learning is not just an advantage—it's necessary for any lender to thrive in today's market.

First things first, let’s talk about what Intelligent Servicing is.

What is Intelligent Servicing?

Intelligent Servicing is a set of tools that leverages data and automation to enhance the loan servicing process. It helps lenders be proactive around borrower events by utilizing a unique data set, vertical lending context, and large language model (LLM) technology to help operators make better decisions and give borrowers a better end-to-end lending experience.

What Intelligent Servicing Does

In most cases, loan servicing is static. Once a loan is approved, it’s often managed using a one-size-fits-all approach. In a business lending context, this is a dangerous game. Imagine you’re funding startups that need to draw a fast line of credit—how your customers repay can vary widely, depending on cash flow.

Intelligent Servicing aims to make the loan servicing process more efficient, adaptive, and responsive to lender and borrower needs. It leverages ledger adaptability, data, and advancements in AI/ML technologies to improve the process.?

This allows you to take advantage of:

• A Predictive Ledger: Your ledger goes from static to adaptable with the ability to shift policies, identify risk, automate workflows and reporting, and enrich underwriting.
• Data for Decision Making: Leverages ledger data and modeling through Canopy AI. This can also advance your underwriting process over time.
• Advancements in AI/ML: Makes sense of unstructured data, industry context, and large language models (LLM).

This means you’ll see growth in revenue because you’re now able to automate common workflows and processes rather than managing them through individual teams.?

It can also reduce your cost of loan servicing by giving you the upper hand to proactively reach out to your borrowers, work with them to adjust their policies and payment schedules, and better understand their unique business circumstances.

Applying Intelligent Servicing to Vertical SaaS

Flexport, a leading global supply chain technology and logistics services company, is a great example here. Flexport Capital provides many of its customers with quick access to working capital financing. This arm of the organization leverages Canopy for its loan ledger and calculation engine.?

As a result of its integration with an advanced loan ledger, Flexport has improved its client experience. They can support the full lifecycle, from reviewing clients’ requests to finance shipments to reporting loan data to their funding partner.?

It also makes it easier for Flexport’s team members to review and approve those financing requests, store supplier payment information, and associate that information with loans.?

The White Glove Experience: Personalized Loan Servicing

All of this context-building makes it easier to improve the borrower experience through personalization and timely services.?

Understanding all the inputs that go into each account, the engagement, and lifecycle events enables lenders to make more personalized recommendations about increasing repayments and ultimately lowering default rates. Automating routine tasks also increases operational efficiency.?

At the same time, since most at-scale programs have a 50% premium in human capital and reactive actions, Intelligent Servicing can significantly reduce costs while increasing portfolio yield.

This gives you the best of both worlds: a highly engaged, intelligent AI service combined with a history of everything that has happened on that account.

The B2B Lender’s Competitive Edge

In an increasingly competitive fintech market, offering intelligent, customized, and responsive servicing can be the distinguishing factor.?

Intelligent Servicing allows businesses to assess and accurately manage risks proactively. This reduces defaults and ensures secure, sustainable operations. The cherry on top? Building a scalable foundation supports growth without increasing cost or complexity.

One example of proactive Intelligent Servicing in action would be an alerting mechanism as your first line of defense against issues. No more sifting through data or getting delayed notifications that someone is late on a payment. With Intelligent Servicing, the alerts come in real-time (or even before the event happens, depending on the level of data).?

The integration of AI with industry-specific data offers lenders a powerful tool. It’s not just about having advanced technology; it's about applying it in a way that ties in the nuances of your commercial customers and their unique financing needs. This loan servicing approach ensures precision and effectiveness, enabling businesses to offer a better lending and borrower experience.?

The Future of Intelligent Servicing

To paint a clear picture, here are just a few capabilities we’re working to make possible through our Intelligent Servicing layer, powered by Canopy AI:

• The ability to optimize your portfolio: Predictive recommendations and insights are given based on repayment behavior. This can help lenders adjust their portfolios and adjust terms to match each customer’s current financial situation, rather than what it was when you extended the loan.
• Test and launch new products: Through LoanLab, lenders can simulate new credit policies before they launch at scale, previewing the downstream effects (e.g., payment pouring) to understand how new draws will affect your customers’ accounts.
• Suggested workflow automation: Today, you can automate common workflows through Canopy Connect. Over time, if/then workflows will be produced and suggested by an AI rule set. For instance, your ledger could build a workflow based on your internal processes for when an account goes delinquent.
• Reduction in cost to service: Let’s say you’re using voice AI or through the automations mentioned above. As the lender, you’ll need less human capital to manage and run your portfolio.

In case you couldn’t tell, I’m pumped to see how we can continue pushing the boundaries of what’s possible in financial technology. Reach out to our team if you’re interested in learning more about how we’re helping to shape the future of loan servicing.