Embedded Lending
Embedded Lending

How AI is reshaping the embedded finance landscape

2023 has been the year of AI. From ChatGPT becoming the fastest-growing app, to sky-rocketing investment in artificial intelligence tools, the genie is out of the bottle. YouLend is focusing on ensuring that the benefits apply to financing for small businesses.

The potential of an AI-finance future

As we covered in our 2023 Impact Report, we believe the value of technology should be applied to those who deserve it most – small businesses, marginalised entrepreneurs, and financially disadvantaged communities. AI has the potential to help achieve this mission.

When it comes to financing, legacy technology and lack of data is one of the key reasons that incumbent institutions fall short on providing a good financing experience. Without the ability to quickly source, sort and analyse information on SME applications, banks lean on old standbys such as collateral and credit scores. The result - a huge portions of SMEs are shut out of business finance.

AI and Machine Learning (ML) based models have the potential to transform the speed, personalisation and delivery of financing by bringing together more data, analysing trends, accelerating review and enabling the near real-time tailoring of finance offers.

For YouLend, AI and machine learning is a key development frontier. One example, our proprietary deep neural net architecture is trained on all available merchant profile data, where it ‘learns’ industry specific seasonal trends and thus leverages insights from SMEs with more than a complete cycle of data by applying them to those with less.

As the training data set grows, the performance of the algorithm continually improves, making it scalable while remaining flexible enough to respond to changing macro-economic trends.

The AI data challenge 

When it comes to training AI models, data is the key asset - requiring vast datasets from which machine learning models can derive insights. The challenge for most businesses attempting this is sourcing enough quality information, since poor quality or limited assets either slow down learning or result in poor outputs.

This is a challenge that can be seen clearly in large financial institutions. These providers hold vast amounts of historic data on their customers, covering everything from credit history to repayment schedules. Despite sitting on oceans of information, large institutions have struggled to leverage it to provide customer value. The issues: a lack of accessibility, structure and integration.

  • Gartner reports the cost of poor data quality at $15 million per organisation per year. 
  • One McKinsey report found a bank spending $100 million over a few months to document the data lineage for a handful of models.

In the race to make the most of the latest generation of tools, modern fintechs such as YouLend take a leading role in defining what value looks like, especially for SMEs.

"Successful machine learning requires very large datasets. Many start-ups and established firms struggle to reach the scale needed to meaningfully apply machine learning, whereas YouLend's role in enabling a wide array of platforms to offer lending services gives us unparalleled business reach as we aggregate data from our partners, enabling us to collate data significantly faster than many other firms."

Building the foundations for smarter lending

YouLend occupies a unique position in the finance industry, offering infrastructure for some of the world’s leading B2B platforms, such as eBay, Dojo and Just Eat Takeaway. These platforms offer services to thousands of businesses, who each have their own complex needs and experiences. 

This enables our business to aggregate data from a wide range of sources and grow our resources at an unparalleled rate. 

  • Rapid data scaling: Consider a payment service provider or an e-commerce platform with an SME pool constituting just 5% of YouLend’s business reach. It would take them decades to accumulate the data we can garner in a single year. 
  • Regular review: Data prowess is not just about volume, but also about the network effects. The rapid feedback loop on YouLend’s assets, combined with its general growth, ensures a continuous refinement of our AI models. 
  • Targeted infrastructure: Unlike sprawling financing institution architecture, YouLend’s technology platform is built around a single, core purpose - aggregating, analysing and integrating financing data; meaning that our systems are already set up to structure data for use. 

This is just the start of our journey in redefining what’s possible with this crucial technology. The key for us is to know why we’re doing it – YouLend aims to make finance more accessible, equitable and valuable for the small businesses that drive our economy forward and make a difference in their communities.

Download YouLend's 2023 'Impact Report' here

<script charset="utf-8" type="text/javascript" src="//"></script>



   region: "na1",

   portalId: "6742482",

   formId: "f61d2d67-f7c9-4955-a073-153d7d88d90d"



Ready to get started?

Explore how revenue-based embedded financing solutions can change your relationship with your merchants, bolster your brand, and improve your long-term growth.

Book a demo
Explore the docs