Lending platform Upstart (NASDAQ: UPST), which uses artificial-intelligence (AI) technology to provide an alternative to traditional credit scores for its bank and credit union partners, is struggling in a tough economic environment. Banks are tightening lending standards as they gird themselves for deteriorating collateral values and credit quality within their portfolios.

This tightening on the part of lenders has put a severe chill on Upstart's business that even artificial intelligence can't overcome. Revenue was down 4% year over year in the fourth quarter of 2023, marking the close of a tough year where revenue crashed 39%.

Transaction volume was down 19% in the fourth quarter, and the conversion on rate requests hovered just above 11%. That conversion rate is down from 24% in the fourth quarter of 2021.

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Source Fool.com