Embracing GenAI in credit risk

How to Lend Money to Strangers

Brendan le Grange

Credit, Fintech, Management, Lending, Banking, Business, Careers

5 • 2.6K Ratings

🗓️ 7 July 2025

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

McKinsey recently surveyed senior credit risk executives from, among others, nine of the top ten US banks, and they asked them about their organisations’ adoption of GenAI, its current use cases, their future plans for it, and the challenges they expected. Twenty percent of the respondents had already implemented at least one GenAI use case in their organizations, and a further 60 percent expect to do so within a year.

With how quickly AI is embedding itself in our daily lives, we have to assume that's already increased significantly, so I sat down with Arv Govindarajan, one of the authors of that article and a partner at McKinsey & Company, to talk about how lenders are embracing generative AI in credit risk.

McKinsey & Co is online at https://www.mckinsey.com/ (also here, to jump straight to the Risk Dynamics team https://www.mckinsey.com/capabilities/risk-and-resilience/how-we-help-clients/risk-dynamics)

Click here to read the article we're talking about https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/embracing-generative-ai-in-credit-risk

McKinsey are, of course, also on LinkedIn at https://www.linkedin.com/company/mckinsey/

Arv, in turn, is on LinkedIn at https://www.linkedin.com/in/arvindgovindarajan/

I am on LinkedIn, too, at https://www.linkedin.com/in/brendanlegrange/ as is the show https://www.linkedin.com/company/how-to-lend-money-to-strangers

You can support the show by buying one of my guests via the affiliate links on my site (it doesn't cost you anything extra): https://www.howtolendmoneytostrangers.show/recommended-reads

Commercial partners include (when you click one of these affiliate links, I earn a small commission but you won't pay a cent more)

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And since you like podcasts, I'm also co-create hAIghtened senses with Christo van Zyl, in which looks at the intersection between human senses and technology

Keep well, Brendan

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Transcript

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0:00.0	Hey, it's Jay Humphrey here, host of High Performance. We're currently sponsored by London Business School.
0:05.4	London Business School is a place where learners from around the world come together to learn, grow,
0:10.0	and challenge convention. It's a community that believes real progress comes from embracing
0:14.5	difference because when we share ideas, we find better ways forward. LBS believes that difference
0:20.4	drives progress.
0:22.3	Find out how bringing together unique perspectives
0:24.5	creates real change.
0:26.4	Search London Business School or visit London.edu.
0:32.3	But as I started to play with it more and more,
0:34.9	I started to understand that, hey, if I ask questions the right way,
0:37.2	it actually gives me reasonable answers. And so there is some element of, like, anything
0:41.3	that is a tool like this, before you make a decision whether you like it or not, I encourage
0:46.5	folks that they spend real time with it to form a decision on what they like it for and what
0:50.3	they don't like it for as opposed to it's good or it's bad. It's a little question of what it's good for what's not.
1:00.2	Welcome back to How to Lend Money to Strangers with myself, Brendan LaGrange.
1:05.3	I've said it on the show before and I'll say it again.
1:08.2	I am delighted to see that big-name strategy houses, like McKinsey,
1:13.0	one of the biggest of them all, is taking such a deep interest in credit risk modeling.
1:18.8	For a long time, we had to sit in a back room, can work on our little models and be a niche
1:24.4	value ad that only one or two people knew about.
1:28.5	Not anymore.
1:31.9	Now we're talking at the level of executive boards about how to optimize models,
	...

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