June 13, 2024
Model risk management

The term that arises from the merger between Finance and Technology and which, in its broadest sense, means the use of digital tools applied to the financial sector with Model risk management.

This is a phenomenon that for some time has also arrived , especially in consideration of the important changes that have occurred during the health emergency: with travel restrictions and lock downs, the use of digital technologies has increased exponentially also in banking and finance, leaving room for mobile payments, P2P payments, cardless withdrawals, blockchains, data transfers from CC and other services.

In the near future it is therefore highly probable (if not certain) that an important change will take place in the banking, financial and insurance landscape: in these contexts.

Artificial Intelligence, we recall, is the branch of computer science responsible for the development of hardware and software systems with the capabilities and characteristics of the human being, such as for example learning, adaptation, planning, reasoning and interaction with the surrounding environment. Its goal is to offer solutions capable of autonomously pursuing specific purposes and, equally independently, of making decisions typically entrusted to human personnel.

Model risk management

To date, we know with certainty that Artificial Intelligence is already an integral part in the Banking sector also with regard to identity verification and progressive fraud detection applications, with a significant improvement of these functions and consequent reduction of risks.

In the first case, the need to use AI is linked to the enormous volume of data generated by banks, impossible to manage or control simply by employing human personnel. Thanks to sophisticated algorithms, Artificial Intelligence has the ability to collect and analyze Big Data more quickly and efficiently, minimizing the risk of error. It goes without saying that, in the face of more accurate data, even the increase in profitability is practically a guaranteed result.