How can artificial intelligence and Big Data Analytics be helpful in the credit risk management process of cryptocurrency lending?

 

Some commercial and investment banks are already creating their cryptocurrencies. Some investment funds are also allocating part of their funds for the purchase of certain investment financial instruments and other investment assets as part of building their investment prortfolio to the purchase of selected cryptocurrencies. It may therefore be that in the future, financial or para-financial institutions will be established that will accept selected cryptocurrencies for deposits and, on the other hand, will also lend cryptocurrencies. Related to this issue will be an increase in the level of institutionalisation of cryptocurrency trading platform markets. As part of a potential increase in the level of formalisation of procedures and institutionalisation of markets in which citizens and businesses use cryptocurrencies, supervisory institutions should also be created, thanks to which the level of security of the use of cryptocurrencies should increase and also the level of investment risk of investing in cryptocurrencies should decrease significantly. Thus, with a higher level of security in the use of cryptocurrencies, more citizens will be willing to use cryptocurrencies both as payment instruments and as alternative investment instruments. With certain financial institutions or para-financial firms lending cryptocurrencies in a formula similar to bank lending transactions, the importance of the credit risk management process of cryptocurrency lending will increase. Since new information technologies and Industry 4.0, including artificial intelligence, machine learning, deep learning and analytics conducted on computerised Big Data Analytics platforms, are already being used in the credit risk management process occurring in the context of banks' lending and investment transactions in securities and other capital markets assets, so in the future such new technologies may also be applied to improve the credit risk management processes of cryptocurrency lending.

 

In view of the above, I address the following question to the esteemed community of scientists and researchers:

 

What is your opinion on this subject?

 

Please respond,

 

I invite you all to discuss,

 

Thank you very much,

 

Best wishes,