Difficult decisions in uncertain times: AI and automation in commercial lending

Sean Hunter, Chief Information Officer and Onur Güzey, Head of Artificial Intelligence, OakNorth

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Abstract: Progress in artificial intelligence (AI) and automation has improved many parts of financial services. These techniques have struggled, however, to make inroads in many areas of commercial lending, largely because of the relative unavailability of sufficient data. Traditional techniques of extrapolation from historical data are also inadequate in times of significant disruption (such as the COVID-19 pandemic). In this paper we discuss these challenges and present techniques such as driver analysis, nowcasting and the use of AI to enable granular subsector classification and forecasting. These allow greater use of data-driven AI-augmented decision making even where full decision automation is not necessarily possible or desirable. Finally, we examine the case study of OakNorth Bank in the UK, which has used these techniques to achieve very promising results since its launch in 2015.


Keywords: nowcasting, commercial lending, driver analysis, small to medium enterprises (SME)


Sean Hunter is chief information officer at OakNorth. Prior to this, Sean was one of the first commercial engineers at Palantir Technologies in Europe, where he led trader oversight partnerships with large financial institutions, particularly Credit Suisse, which led to being co-head of the joint venture known as Signac. Before Palantir, Sean was a strategist at Goldman Sachs for eight years, working in a number of areas including equities, fixed income and algorithmic trading. Prior to Goldman Sachs he was IT director at a dot com start-up, writing its initial systems and managing a growing development team through two initial public offerings (IPOs). Sean is an adviser to entrepreneurs at Antler, the social impact start-up Kamayi, and is on the editorial board of the Journal of Digital Banking. Sean contributed a chapter to The RegTech Book (Wiley Press) and is co-author on two patents in the field of anomaly detection.


Onur Güzey serves as head of artificial intelligence at OakNorth. Prior to this, he was an assistant professor of computer engineering at Istanbul Sehir University. Onur received his BSc in computer engineering from Istanbul Technical University. He earned his MSc and PhD degrees in electrical and computer engineering from University of California, Santa Barbara, and received his MBA from MIT Sloan School of Management. His previous work experience includes positions at Mentor Graphics, Intel and McKinsey & Co.

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