Is technological development in the scope of the continuation of the current technological revolution. Industry 4.0, ie above all new information technologies will change the processes of financial risk management?
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More data, better Artificial Intelligence programs, implies better understanding of complex financial variables iterations and allows one step ahead in the risk management processes.
If you were analyzed changes in risk management from Millennium you can see the improving connected with IT opportunities. Firstly all Basel Agreements assumed big historical data bases and developing of model's system and their verification and validation. It is important for all parts of Agreements, not only for credit risk management but also for other type of risks. Secondly I want mentioned apart operation risks and especial data bases for analyzing this type of risk and fulfilled special models. I can propose my books "Handbook of ratings" in English as well as "Credit ratings and their modeling" unfortunately in Russian.
As technology is creating more operational complexity, also it is helping in risk management process. Although it may change the process but level of risk may not be affected.
In recent years, in financial institutions, but also others, more and more funds are spent on building information security systems and improving IT risk management processes and information transfer on the Internet. In banks, improvement of IT systems risk management and information transfer processes on the Internet is treated as just as important as the management of classic banking and financial risk categories, such as credit risk management.
Do you agree with my opinion on this matter?
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I invite you to the discussion
Thank you very much
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Dear Colleagues and Friends from RG,
Joining the above discussion I would like to add a few words. The problem is very important, so it requires clarification and investigation. The discussion conducted on the Research Gate portal shows that the improvement of analytical methods, risk analysis instruments and risk management processes is carried out, among others, through the use of new ICT information technologies and the Industry 4.0 advanced data processing technology. The current technological revolution referred to as Industry 4.0 is determined by the development of the following advanced information processing technologies: Big Data database technologies, cloud computing, machine learning, Internet of Things, Artificial Intelligence, Business Intelligence and other advanced technologies of Data Mining, Data Science, Data Analytics, etc. For several years, the progress of technological advances has also been related to improving risk management processes. Thanks to this, computerized applications and analytical platforms used to implement the risk management process can also be implemented in medium-sized companies and many entities of the SME sector.
In the context of the above discussion, another key research question arises:
Does the improvement of credit risk management processes through the use of new ICT information technologies and advanced data processing technologies Industry 4.0 contribute to the improvement of business process prediction processes, diagnosis of opportunities and threats in functioning business entities and better forecasting of subsequent financial and economic crises that will appear in the future?
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I invite you to discussion
Thank you very much
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