Study reveals strong AI adoption in Australia and New Zealand but highlights challenges with talent gaps and integration
Nearly half of banks, credit providers, and telecommunications companies in Australia and New Zealand are increasing investment in artificial intelligence (AI) to enhance lending speed and accuracy, according to new research by data and technology firm Experian.
The report, conducted in partnership with Forrester Consulting, surveyed 150 C-suite and senior executives across Australia and New Zealand. It found that 47% of respondents are increasing spending on automation technologies, even as 72% cited a need to better educate senior leadership about the value of generative AI.
With more borrowers applying for loans through digital channels, the competition for faster approval times has intensified. Consumers have greater options and less tolerance for delays, the report noted.
Despite progress in automation, fewer than one in five (17%) Australian and New Zealand lenders can approve a standard consumer loan in under an hour, falling below the global average of 22%.
Globally, only 24% of lenders have adopted automated credit risk decisioning, and just 33% believe they have achieved broad adoption. Australia and New Zealand are leading the charge, with only 17% reporting limited or no adoption of automated credit risk decisioning tools.
The region also fares better in same-day loan approvals. Over half (56%) of Australian and New Zealand lenders said they can approve a typical consumer loan within one day, compared to the global average of 39%. Still, barriers remain, with many companies struggling to implement advanced analytics models quickly. Only 29% of respondents said they can operationalise new models in under six months.
The research underscores AI’s growing importance in financial services. A majority (64%) of respondents said the future success of their industry depends on effective AI use, while 53% reported significant gains in decision-making speed and quality thanks to AI and machine learning.
However, challenges remain in aligning AI investments with return on investment (ROI). Nearly three in five (58%) said identifying the most valuable generative AI use cases is a key difficulty. Talent shortages are also slowing progress, with 42% of data and analytics leaders reporting a lack of in-house expertise to develop and manage advanced models.
As economic pressures persist, lenders are sharpening their focus on identifying and supporting financially vulnerable customers. Rising inflation and interest rates have impacted borrowers’ ability to repay loans, with 62% of respondents acknowledging this as a key concern.
Although 77% of credit risk leaders believe Australia has passed the worst of its economic challenges, 69% anticipate higher credit stress, missed repayments, and delinquencies over the next 12 months. In response, 39% said they plan to prioritise technologies that improve early detection of financial vulnerability.
Jordan Harris (pictured above), head of innovation at Experian, said financial services and telecommunications leaders understand the importance of investing in customer insights and automation to remain competitive.
“Although the tools that enable automation are available, the adoption and transition is taking longer than some lenders would like, with integration of data, analytics, and software,” Harris said.
“By fostering collaboration, education, and a customer-centric approach, organisations can not only unlock the full potential of these technologies but also drive meaningful change in the industry.”
The report also found that almost half (49%) of leaders are increasing budgets for customer insights, while 51% are investing in cloud solutions to improve data accessibility for AI-driven credit risk assessments. In addition, over half (56%) of technology leaders said they expect to boost technology spending as economic conditions stabilise.
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