GenAI technology has been improving in capability and performance to better serve highly regulated industries, such as financial services. Lenders are quickly reaping the benefits! According to Cornerstone Advisors’ What’s Going On in Banking? report, 16% of banks and 36% of credit unions have already implemented GenAI, with another 28% of banks and 29% of credit unions planning to do so in 2025. 

Lenders recognize the potential of GenAI to streamline operations, enhance customer experiences, and drive better decision-making. But how exactly are financial institutions using this technology today? Here are five key ways GenAI is transforming lending:

1. Enhancing customer support with chatbots 

Borrowers expect instant answers. GenAI-driven chatbots and virtual assistants can help lenders provide 24/7 customer service, answering questions on loan applications, payment schedules, and eligibility criteria. This has been the most popular GenAI use case across several industries, including online retailers. According to Cornerstone Advisors, financial services is no different: In the past five years, 45% of credit unions and 26% of banks deployed chatbots, with 43% of banks and 74% of credit unions planning to implement GenAI in contact centers in 2025. 

2. Accelerating compliance reviews

Keeping up with compliance can be a challenge for every lender. GenAI can simplify regulatory reporting by automating document reviews, flagging potential compliance issues, and summarizing regulatory changes. Lenders can reduce manual workloads while ensuring they stay ahead of evolving regulations and support examination prep by reviewing extensive volumes of documentation, and presenting likely questions and answers ahead of time. 

3. Strengthening risk management

According to a Thomson-Reuters report, 89% of professionals in risk, compliance, and fraud find GenAI to be advantageous in their sectors, and almost a third of both banks and credit unions plan to implement GenAI for risk management. Potential use cases include analyzing trends to surface potential risks across the organization and catching inconsistencies in reporting and documentation. 

4. Gaining competitive intelligence

According to TransUnion, two-thirds of lenders feel that data and analytics are evolving faster than their internal capabilities. GenAI can help financial institutions close that gap. Lenders need to stay ahead of market trends, and GenAI is giving them a competitive edge by analyzing customer data to uncover new lending opportunities or comparing your FI’s performance across delinquencies, interest rates, and more with peers. 

The ability to remain agile through changing economic climates, using data to your advantage, and being proactive with trend forecasts, competitive analysis, and more will be even more critical for FIs as GenAI tools become more advanced and widely adopted. 

5. Optimizing institutional knowledge 

One of AI’s primary functions is to increase efficiency, whether that’s through machine learning solutions like AI-automated underwriting, fraud detection, or now generative AI. 

GenAI has the potential to uplevel team alignment and efficiency, increasing the ability to access institutional knowledge like credit policy guidelines, rate sheets, and documentation for models and systems to surface insights that help them boost productivity and better support organizational goals. The technology can seamlessly connect intelligence throughout the organization, enabling team members to access answers directly and use information more efficiently.

What’s next for GenAI in lending?

As tech companies continue to invest in GenAI, its adoption and performance across all industries is only going to accelerate. Nearly 30% of banks and credit unions plan to implement GenAI for the first time in 2025, meaning GenAI is quickly becoming a competitive differentiator. As adoption grows, expect to see even more innovative use cases emerge, from AI-powered portfolio optimization to predictive pricing and policy modeling.

The future of lending is GenAI-driven. Is your lending business ready?