Powered by digitalisation, data and AI, European banks are rapidly reducing friction across lending journeys, moving from pilot projects to real operational impact. The question is no longer if credit lifecycle transformation will happen, but how to do it in a way that is secure, efficient and truly customer-centric.
What if the entire credit lifecycle, from application to collection, could be managed with the same ease with which we book a trip or open an online account today? No duplicated paperwork, no indefinite waits, no having to explain the same thing over and over again.
That future is no longer a hypothesis. The combination of digitalization, data, and Artificial Intelligence (AI) is radically reducing frictions in credit, especially in mortgage lending, and redefining how each loan is originated, managed, and resolved.
In Europe, banks have moved from pilot projects to operational reality: the European Banking Authority (EBA) estimates that around 92% of EU institutions are already implementing AI in their operations, and more than half of mortgage lenders are expected to have adopted AI software by the end of 2025. The question is no longer "if" the credit cycle will be transformed, but how to do it safely, efficiently, and in a customer-centric way.
For decades, the credit lifecycle has been managed as distinct phases: origination, analysis, formalization, servicing, collection... Each with its own systems, teams, and criteria. The result: duplication of tasks and data, a lack of visibility into the client and the asset, long lead times, and a frustrating experience for all involved parties.
Today, technology allows us to treat credit as an integrated and traceable journey, where information flows seamlessly between all phases and actors: banks, servicers, credit intermediaries, insurers, and regulators. AI is applied to tasks such as document processing, scoring, or anomaly detection; automation reduces repetitive tasks; and digital workflows replace email and spreadsheets. Reducing friction isn't just about efficiency gains; it also means making credit more accessible to more people, with simpler, more transparent, and understandable processes.
The reduction of friction becomes visible when reviewing each moment of the credit lifecycle.
1. Origination: From Paper Files to Rapid Decisions
Today, 100% digital applications are possible, featuring automated document ingestion via AI, accelerated verification thanks to Know Your Customer (KYC) and Know Your Business (KYB) processes, and secure access to external data sources. Real-time simulations and transparent offer comparisons, often facilitated by platforms managed by credit intermediaries, align the process with digital consumer expectations and reduce human errors.
2. Servicing: A Single Source of Truth
Friction arises when a client wants to change terms, understand their amortization schedule, update data, or explore options in response to a change in their situation. Modern platforms reduce these friction points by offering self-service portals and apps to check their position, download documentation, or reschedule payments, and by providing internal teams with a unified view of the client and the asset, complete with a full history. Automated alerts for due dates or interest rate changes help prevent inadvertent defaults and improve the ongoing client relationship.
3. Collections and Recovery: Greater Efficiency and More Empathy
In the delinquency and recovery phase, AI models differentiate between situations of temporary stress and structural over-indebtedness, applying distinct strategies in each case. Omnichannel communication (SMS, email, web, apps, telephony) allows clients to choose how and when to interact, while automated and traceable workflows ensure regulatory compliance and consistency with internal policies.
Managing credit without friction demands a comprehensive view of its entire lifecycle. From origination to recovery, technology enables the orchestration of complex processes, ensures regulatory compliance, and improves operational efficiency without losing sight of the customer.