Rise of the machines: AI begins to tackle credit risk
Self-taught technology could push humans aside from some – or all – of the underwriting process
Artificial intelligence has been a trope of science fiction for decades. From the unsettling and double-crossing HAL in the film 2001: A Space Odyssey to the oppressive robots enslaving humanity in The Matrix and The Terminator, the concept of sentient machines outsmarting and overthrowing their creators has long permeated popular culture.
If these movies are anything to go by, credit risk
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Risk management
Op risk data: FIS pays the price for Worldpay synergy slip-up
Also: Liberty Mutual rings up record age bias case; Nationwide’s fraud failings. Data by ORX News
Banks hold 73% of liquidity buffer in cash and Level 1 assets, on average
Largest lenders hold highest share of central bank reserves in buffer, latest analysis shows
EBA supports global op risk taxonomy, but it won’t happen soon
New EU framework designed to ease adoption by banks; other jurisdictions have different priorities
Allocating financing costs: centralised vs decentralised treasury
Centralisation can boost efficiency when coupled with an effective pricing and attribution framework
EVE and NII dominate IRRBB limit-setting
ALM Benchmarking study finds majority of banks relying on hard risk limits, and a minority supplementing with early-warning indicators
Banks split over AI risk management
Model teams hold the reins, but some argue AI is an enterprise risk
Collateral velocity is disappearing behind a digital curtain
Dealers may welcome digital-era rewiring to free up collateral movement, but tokenisation will obscure metrics
New EBA taxonomy could help integrate emerging op risks
Extra loss flags will allow banks to track transversal risks like geopolitics and AI, say experts
