AI-Powered, Low-Code Credit Modeling Tools Open New Doors for Smaller Lenders

Carrington Labs has partnered with decisioning platform Taktile to build a low-code toolkit for lenders to upgrade how they assess borrower risk, and it could help level the playing field for mid-sized and smaller institutions trying to keep pace with shifting borrower behaviors.

The project addresses the increasing number of lenders pursuing opportunities in the subprime and near-prime segments and looking for ways to optimize credit models without slowing down operations.

Rather than a one-size-fits-all solution, Carrington Labs offers AI-powered tools to help lenders keep pace with the current credit landscape — primarily, the nonprime market. In response to regulatory pressures and shifting market conditions, subprime lenders increasingly demand flexible tools where speed and accuracy meet.

The Carrington–Taktile partnership is just one representation of a larger movement within financial technology: giving smaller entities the capability to hone credit models without sinking time and money into custom engineering.

By integrating with Taktile’s no-code engine, lenders can test variables, add alternate data, and deploy changes to decision flows without writing complex code.

“With Carrington’s technology, lenders can iterate on their credit decision flows quickly and confidently to optimize performance and reduce risk,” said Maik Taro Wehmeyer, Taktile CEO and Co-Founder. 

A 2024 World Bank Group study indicates the need for better decisioning infrastructure on the nonprime side, where standard platforms often have difficulty adapting to shifting risk signals.

Taktile had already built a reputation for speed and adaptability in embedded finance. The firm raised a $20 million Series A in 2022 led by Index Ventures to expand its low-code platform for additional fintechs and lenders.

Carrington, however, provides plug-and-play AI components that can be easily incorporated into Taktile’s platform. Together, the companies seek to offer a flexible and powerful solution that can be adopted even by smaller lenders.

“We’re shifting the industry into real-time tuning of models,” Wehmeyer said. “Lenders need to tune models against today’s data, not assumptions made three or four months ago. That’s what the partnership provides.”

Subprime-focused lenders stand to benefit most from that flexibility.

In volatile credit cycles, the ability to test, tune, and redeploy risk models without large-scale engineering redesigns can be the difference between profit and loss. That flexibility also lets them more responsibly adapt to regulatory changes and consumer protection requirements.

The subprime industry is seeing an influx of tech solutions that can help lenders accelerate decision-making without increasing risk.

The announcement comes as the demand for automated credit decisioning is increasing across asset classes.

According to Allied Market Research, the global credit bureaus market was valued at $124.4 billion in 2023 and is projected to grow to $385.6 billion by 2032, driven by a surge in the use of alternative data and open banking tools.

Carrington and Taktile are two of the players here. Zest AI and Provenir, among others, are also building AI-based credit decisioning with low-code customization. Carrington, however, is betting on the modularity of its AI pieces — fine-tuned for real-world use cases for credit — giving it the edge.

This could be a breakthrough for smaller lenders that often lack the capital to build and maintain advanced risk systems. With Carrington’s and Taktile’s combined tools, even smaller lenders can tap into data-driven credit modeling without overextending their technical teams.

With lenders bracing for continued volatility within the consumer credit marketplace, the Carrington and Taktile alliance could help them build smarter, faster, and more responsive systems — something the subprime arenas need more than ever.