In parallel with traditional institutions of the banking sector, a thriving fintech industry has flourished, challenging older hierarchies and appealing to the masses with innovative and exciting new solutions. After decades of a relatively stable banking landscape, developments in AI, connectivity, blockchain, and general banking regulation have brought about massive change.
In consequence, risk assessment methods that don't use AI are falling behind at a rapid pace. Banks must become more agile and reactive to the changing landscape if they are going to keep up with new technology, changing regulations, and disruptions from emerging fintech.
Meanwhile, there is increased pressure from the business units to release more products to extract more business from their current customer base and build a bigger market share. It is very much in the hands of the risk modeling department to close the circle as fast as possible to allow the bank/FI to offer more financial products and increase their business or at least defend their existing business against emerging competition.
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