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Application Of Blockchain And Artificial Intelligence In Bank Risk Management

Author

Listed:
  • Plamen Dzhaparov

    (Department of Finance, University of Economics – Varna)

Abstract

The transformation from analogue to digital risk management is becoming a prerequisite in the implementation of the incresingly digital bank institutions’ strategies. Among the key steps in this direction is the optimal use of blockchain technology’s potential and artificial intelligence. Huge hopes are set on blockchain in view of two key risks facing today’s banks: the danger of using the bank system for money laundering and financing terrorism, and cyberattack threat. Artificial intelligence, in turn, creates conditions for processing large arrays of unstructured data risk, more precise identification of potential problems in the future, full automation of manual processes in risk function, credit scoring automation, developing adequate market risk assessment models, etc.

Suggested Citation

  • Plamen Dzhaparov, 2020. "Application Of Blockchain And Artificial Intelligence In Bank Risk Management," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 17(1), pages 43-57.
    • Handle: RePEc:neo:journl:v:17:y:2020:i:1:p:43-57
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    References listed on IDEAS

    as
    1. Dancho Petrov, 2018. "Application of Blockchain and Smart Contracts in the Financial Industry," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 7(2), pages 24-33, November.
    2. Nedyalko Valkanov, 2019. "Mitigation Of Regulations Burden In Financial Sector By Application Of High Tech Solutions," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 16(1), pages 19-30.
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    Cited by:

    1. Stefan Vachkov & Nedyalko Valkanov, 2021. "Some Aspects Of Regulatory Optimizations In The Financial Sector," Economics and Management, Faculty of Economics, SOUTH-WEST UNIVERSITY "NEOFIT RILSKI", BLAGOEVGRAD, vol. 18(1), pages 1-18.

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    More about this item

    Keywords

    banks; blockchain; artificial intelligence; digitalization; risk management;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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