Artificial Intelligence (AI) is being adopted at an accelerating pace, and is poised to have a staggering impact on the world. The AI models being used are backed by sophisticated algorithms which make the difficult look easy. But the algorithms and models can only do their jobs well with the help of high-quality labeled data.
AI platforms are inductive systems that learn from past experiences. They are “Systems of Intuition” that build their own reasoning through learning and exhibit human-like capabilities for a very narrow set of outcomes. This wave of AI is different because it has all the characteristics of a “General Purpose Technology” (GPT). Such technologies re-shape the entire socio-economic structure as they span across the global economy.
An approach for using AI-based systems (deep neural networks) for Credit Risk management through efficient margin and Limit management using an intelligent Value at Risk (VaR) computation engine as opposed to traditional IT applications employing Monte Carlo simulations with simplifying assumptions.