Dutch multinational bank ING and automation technology provider Flowcast announced Monday they are piloting a new platform that would automate loan assessment to identify potential defaults. As part of the partnership, ING also will invest $3 million in the fintech startup.

The pilot platform will leverage artificial intelligence (AI) to continuously evaluate transaction-level data, essentially “underwriting” the loan, Flowcast spokesperson Otto Pohl told Bank Automation News. The bank will be able to target potential defaulters for loan restructuring before they’ve even missed a payment, he added.

“The fact is, [loan default is] a relatively inefficient and broken process; it ends up being expensive and bad for both the customer and the bank, frankly, if a customer goes into default,” Pohl said.

The Amsterdam-based bank will also be able to use the tool to assess the risk level of its portfolio to more accurately predict how much to set aside for loan loss provisioning, Pohl said.

The pilot program will allow ING to test how well the platform can support customers, with the end goal being to help clients before they fall behind, said Julie Kerremans, of ING.

“What the client reach-out process will look like is now going to be tested in the pilot,” Kerremans told BAN. “Based on the pilot results, we will get to know what approach went well, and how this impacts the processes today.”

The $1.1 trillion ING led the Series A funding round for the San Francisco, Calif.-based Flowcast, and Monday’s announcement brings ING’s total investment in the startup to more than $10 million, according to an ING press release. Flowcast has raised a total of $14.2 million over seven funding rounds, according to Crunchbase.

Flowcast, which also offers the small business credit-monitoring tool Tillful, will use the $3 million investment for general business growth and activities, Pohl said.

Bank Automation Ignite, on April 13-14, is the event for inspiring automation initiatives and investment in financial services. At the virtual event, financial services professionals can discover new use cases and technologies that are accelerating automation in banking. Learn more and register at www.BankAutomationIgnite.com.