Name: Code & Capital - Revolutionizing Credit Risk Management with AI
Uploaded: 2024-08-07T09:16:12.907Z
Duration: 442.21
Description: Code and Capital explores the Credit risk management with AI in finance with Dr Gabriele Sabato, Co-Founder & CEO at Wiserfunding during the Centre Stage.

Code & Capital - Revolutionizing Credit Risk Management with AI.mp4

Code & Capital - Revolutionizing Credit Risk Management with AI.vtt

ENGLISH

{{00:00:16}}
There is no doubt, AI has significantly
changed a lot of aspects in our lives,

{{00:00:23}}
and that includes also in in credit risk.

{{00:00:26}}
But, to be honest, in credit risk, AI has
been around for quite some time, actually.

{{00:00:32}}
The first machine learning
models were developed 20 years

{{00:00:37}}
ago, so there was a lot of AI.

{{00:00:39}}
What has really changed in the last
couple of years is the power of

{{00:00:45}}
the computing power and the speed
at which data can be processed.

{{00:00:51}}
Also, the models behind AI have been
trained with more data, and they

{{00:00:58}}
can replicate the human thinking and
the human behavior in a better way.

{{00:01:03}}
So these changes, this
development in technology

{{00:01:07}}
actually brought new life to AI.

{{00:01:12}}
in many aspects of our lives, and in
credit trees, where now these models

{{00:01:18}}
can actually interpret data, transform
data into insights very quickly, so that

{{00:01:25}}
they can feed credit trees models, they
can retrieve unstructured data, they can

{{00:01:31}}
interpret language, images, And these
are changes that are quite significant.

{{00:01:38}}
If you think about it before,
only humans could really go and

{{00:01:42}}
understand what an image meant.

{{00:01:44}}
Today you can train a model to do
that, and that is really incredible.

{{00:01:50}}
It saves a lot of time, improves
the accuracy of models, decisions,

{{00:01:56}}
so it's a real revolution.

{{00:02:06}}
I started Wiser Funding together with
Professor Edward Altman seven years

{{00:02:11}}
ago, and since the beginning we knew
that technology had to be key in what

{{00:02:17}}
everything we were doing at Wiser Funding.

{{00:02:19}}
So we used, since the beginning, natural
language processing module to interpret

{{00:02:26}}
unstructured data, retrieve information
from the web, from sources that were never

{{00:02:32}}
used before, in assessing the credit risk
for small and medium sized companies.

{{00:02:39}}
The way we use AI, it's really
to transform raw data and

{{00:02:44}}
structured data into insight
that can feed into our models.

{{00:02:49}}
And that is absolutely key when assessing
the credit risk of small and medium

{{00:02:56}}
sized firms, because traditionally that
was only based on structured data like

{{00:03:01}}
financial information or payment history.

{{00:03:04}}
That doesn't give you very often
an up to date or a complete view

{{00:03:11}}
of the history of the company.

{{00:03:21}}
Financial institutions have been trying to
adopt AI more recently, very much because

{{00:03:26}}
it's clearly a hot topic, so they want to
be part of it, but there are challenges.

{{00:03:33}}
In my opinion, the most
important are three.

{{00:03:36}}
Trust explainability, it's a difficult
word, but of AI models is still, an issue.

{{00:03:43}}
And so obviously financial
institutions struggle with that.

{{00:03:46}}
Compliance.

{{00:03:48}}
Regulators are trying to
write rules of how to use AI.

{{00:03:55}}
We have something in the U.

{{00:03:56}}
S.

{{00:03:56}}
still expecting something in Europe.

{{00:03:58}}
So obviously there is a bit
of a question mark on what's

{{00:04:04}}
going to happen in that space.

{{00:04:06}}
And the third one is skills, obviously
hard to find in this moment the

{{00:04:12}}
right resources with the right
competence to work on AI, models.

{{00:04:18}}
Wiser funding can provide all that
because we have the right people,

{{00:04:23}}
the right technology, so we can
absorb a lot of these issues.

{{00:04:28}}
and help support financial institutions
to get into the AI journey.

{{00:04:41}}
AI can help retrieving information,
data, that would be hard before.

{{00:04:48}}
So let me say very clearly,
I still believe that human

{{00:04:52}}
intelligence is far superior, right?

{{00:04:54}}
So there is no doubt that our brain
can capture elements that are unique.

{{00:05:01}}
when you're looking at a company.

{{00:05:02}}
But the reality, if you want to scale, or
if your margins are quite tight, you may

{{00:05:10}}
need to use something that is automated.

{{00:05:12}}
That's where AI is the closest thing
to the human brain that today we have.

{{00:05:17}}
And in that respect, using AI can
help scaling, processing a lot of data

{{00:05:23}}
very quickly in a fully automated way.

{{00:05:27}}
And that's the future.

{{00:05:28}}
There is no doubt that we are
increasingly becoming digitalized.

{{00:05:33}}
And in a digitalized world, you obviously
need to learn how to process a large

{{00:05:39}}
amount of data, so called Big Data.

{{00:05:43}}
And in that respect, AI is
the best answer to that.

{{00:05:47}}
That's why at Weiser Funding,
our technology has been developed

{{00:05:51}}
specifically to do that.

{{00:05:53}}
Process a large amount of data and
transform it into insight and risk

{{00:05:58}}
metrics that then can improve the
efficiency and automation for our clients.

{{00:06:11}}
Computing power continues to increase.

{{00:06:15}}
And with that, AI will become
more and more powerful.

{{00:06:18}}
We will be able to train more models with
more data, and they will learn how to

{{00:06:25}}
replicate our thinking in a better way.

{{00:06:29}}
So there is no question mark there.

{{00:06:33}}
AI will become an
integral part of our life.

{{00:06:38}}
Integrating AI in different aspects
of our life is going to be key.

{{00:06:44}}
Learning how to do it, how to
control it, because there are aspects

{{00:06:47}}
where we want to make sure it's
going to behave in the right way,

{{00:06:51}}
is going to be the next challenge.

{{00:06:53}}
And that applies also to credit.

{{00:06:56}}
How to avoid credit risk models,
to take the wrong decision, to

{{00:07:01}}
take into account the wrong things.

{{00:07:03}}
that we don't want them
to take into account.

{{00:07:06}}
That is going to be the key challenge
for anyone like us at Weiser Funding

{{00:07:13}}
working with AI, with credit risk
models, and with financial institutions.

There is no doubt, AI has significantly
changed a lot of aspects in our lives,

and that includes also in in credit risk.

But, to be honest, in credit risk, AI has
been around for quite some time, actually.

The first machine learning
models were developed 20 years

What has really changed in the last
couple of years is the power of

the computing power and the speed
at which data can be processed.

Also, the models behind AI have been
trained with more data, and they

can replicate the human thinking and
the human behavior in a better way.

So these changes, this
development in technology

in many aspects of our lives, and in
credit trees, where now these models

can actually interpret data, transform
data into insights very quickly, so that

they can feed credit trees models, they
can retrieve unstructured data, they can

interpret language, images, And these
are changes that are quite significant.

If you think about it before,
only humans could really go and

Today you can train a model to do
that, and that is really incredible.

It saves a lot of time, improves
the accuracy of models, decisions,

I started Wiser Funding together with
Professor Edward Altman seven years

ago, and since the beginning we knew
that technology had to be key in what

everything we were doing at Wiser Funding.

So we used, since the beginning, natural
language processing module to interpret

unstructured data, retrieve information
from the web, from sources that were never

used before, in assessing the credit risk
for small and medium sized companies.

The way we use AI, it's really
to transform raw data and

structured data into insight
that can feed into our models.

And that is absolutely key when assessing
the credit risk of small and medium

sized firms, because traditionally that
was only based on structured data like

financial information or payment history.

That doesn't give you very often
an up to date or a complete view

Financial institutions have been trying to
adopt AI more recently, very much because

it's clearly a hot topic, so they want to
be part of it, but there are challenges.

In my opinion, the most
important are three.

Trust explainability, it's a difficult
word, but of AI models is still, an issue.

And so obviously financial
institutions struggle with that.

Regulators are trying to
write rules of how to use AI.

So obviously there is a bit
of a question mark on what's

And the third one is skills, obviously
hard to find in this moment the

right resources with the right
competence to work on AI, models.

Wiser funding can provide all that
because we have the right people,

the right technology, so we can
absorb a lot of these issues.

and help support financial institutions
to get into the AI journey.

AI can help retrieving information,
data, that would be hard before.

So let me say very clearly,
I still believe that human

So there is no doubt that our brain
can capture elements that are unique.

But the reality, if you want to scale, or
if your margins are quite tight, you may

That's where AI is the closest thing
to the human brain that today we have.

And in that respect, using AI can
help scaling, processing a lot of data

There is no doubt that we are
increasingly becoming digitalized.

And in a digitalized world, you obviously
need to learn how to process a large

And in that respect, AI is
the best answer to that.

That's why at Weiser Funding,
our technology has been developed

Process a large amount of data and
transform it into insight and risk

metrics that then can improve the
efficiency and automation for our clients.

And with that, AI will become
more and more powerful.

We will be able to train more models with
more data, and they will learn how to

AI will become an
integral part of our life.

Integrating AI in different aspects
of our life is going to be key.

Learning how to do it, how to
control it, because there are aspects

where we want to make sure it's
going to behave in the right way,

How to avoid credit risk models,
to take the wrong decision, to

that we don't want them
to take into account.

That is going to be the key challenge
for anyone like us at Weiser Funding

working with AI, with credit risk
models, and with financial institutions.

Code & Capital

Expert Insight

Code and Capital explores the Credit risk management with AI in finance with Dr Gabriele Sabato, Co-Founder & CEO at Wiserfunding during the Centre Stage.