Valley Bank’s VC arm ‘actively exploring’ AI for commercial lending
AI in lending market could jump fivefold to $58B by 2033
Valley Bank’s venture capital arm is diving deep to identify strong AI providers for commercial lending.
Valley Ventures is “actively exploring several areas where AI can reduce friction” in commercial lending, including document intake, underwriting and portfolio monitoring, Valley Ventures Partner Jeff Allen told FinAi News.
Valley Ventures has zeroed in on tools that “significantly compress” traditional lending timelines, Allen said, noting that “transforming manually intensive processes into a streamlined digital experience” is key to return on investment.
The investment arm is also evaluating agentic AI’s ability to navigate various stages of the lending cycle, “from initial intake through to the preparation of credit memos and ongoing portfolio monitoring,” he said.
High friction solutions key
Valley Ventures meets with hundreds of fintech founders every year to ensure that the $64 billion bank is “aware of emerging trends and AI applications before they become mainstream,” Allen said.
“It’s about taking the pulse of the startup ecosystem and translating those insights into actionable direction for our commercial lending initiatives,” Allen said. Valley’s vetting process focuses on domain expertise and product-market fit, he added.
“We prioritize founders who truly understand the day in the life of a commercial lender and have built something that solves a specific, high-friction problem.”
— Jeff Allen, partner, Valley Ventures
Allen declined to disclose prospective vendors, but said Valley expects to share details on several collaborations that are taking shape.
The Wayne, N.J.-based bank, which saw its technology expenses rise 6.7% year over year in the first quarter to $31.9 million, announced multiple partnerships with fintechs in 2025, including:
- Digital banking platform Infinant;
- Treasury open banking platform Koxa; and
- Debt management software provider Finley Technologies.
A $58B market
The global market for AI in lending is projected to total $58.1 billion by 2033, up from $10.7 billion in 2025, according to research and consulting firm Market.us.
Valley Venture’s Allen’s take is that the “winners” of commercial lending over the next few years “won’t necessarily be those with the most advanced technology, but those who best bridge the gap between new tools and institutional trust.”
“AI is quickly becoming a requirement for operational efficiency, but we believe the real differentiation will come from how a bank uses that reclaimed capacity,” he said. “Ultimately, the advantage may lie in using that speed to be more present for the client, not less.”
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