Chapter 11: Leveraging AI-Powered Personalization to Enhance Borrowers’ Experience and Trust for Customer Engagement in Digital Lending

By examining the intersection of AI and digital lending, this chapter provides insights into how personalized approaches can improve borrower engagement and trust, which were not on the horizon. Through integrating AI into digital lending, businesses can enhance customer interactions (processing of loan applications, mortgage assistance) and trust while reaping rewards. The relationship between AI-personalization (also Gen AI) with the borrowers' experience and trust, which highlights new touchpoints and engagement strategies, is mapped by delving into the role of Recommendation systems, Chatbots and Virtual Assistants, Risk Assessment and Fraud Detection, and Blockchain and Smart Contracts in digital lending decisions. The overall goal is to exemplify the personalization in digital lending caused by AI technologies. The focus is on five elements (such as Recommenders and Chatbots) that broadcast orientations of AI-personalization. The discourse is useful for designing personalization strategies, innovating upcoming technologies, effectuating optimized resource utilization, harvesting competitive advantages, etc. To elucidate the industry's theoretical and practical underlying values, various instances of outcomes attained by businesses that have adopted AI-based personalization technologies in online lending are illustrated. Using the descriptive study, this chapter captures the spectrum of borrower engagement and trust through the prism of real-life examples, use cases, and case studies. It is also demonstrated to grab valuable insights into how AI-powered techniques, including machine learning, natural language processing (NLP), and predictive analytics, are involved in creating personalized experiences in digital lending to augment customer satisfaction, trust, and retention.