Banks are beginning to use artificial intelligence to handle time-consuming parts of the loan-loss process, but they are not letting machines decide how much money to set aside for bad loans, according to accounting advisers who spoke with Thomson Reuters on July 9, 2026.

“It’s important to distinguish between AI assisting the process and AI actually estimating loan losses,” Gabe Nachand, a principal in Baker Tilly’s financial services practice, said.

Nachand said banks are using AI mainly for the routine legwork tied to a loan file — refreshing a borrower’s credit score, updating the value of a home or piece of commercial property used as collateral, checking whether that property is currently listed for sale, or matching terms within loan documents. What AI is not typically doing, he said, is deciding how large a bank’s allowance for credit losses should be for loans that might not get repaid — a figure required under an accounting rule known as CECL, or Current Expected Credit Losses under FASB ASC 326.

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