Published on: May 2026
SMART CREDIT SYSTEMS: HOW AI AND FINTECH ARE TRANSFORMING RISK MANAGEMENT
Koushik Vedula Devarasetty Divya
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Abstract
Risk is the constant shadow of credit—it always follows, and at times, it even overtakes which gives rise to the concept of effective credit risk management . Effective risk management is very crucial for the stability and resilience of Financial Institutions. The inefficiencies of traditional credit risk management frameworks were exposed during the 2008 financial Crices which has paved the way for exploring better and innovative models that can predict and mitigate the credit risk. Integration of emerging technologies such as artificial intelligence (AI), machine learning (ML), and big data analytics has introduced new dimensions to assessing and managing credit risks. These technologies enable institutions to enhance predictive accuracy, assess risks dynamically, and improve overall resilience to economic shocks
With the rapid digitalization of world , financial services have also adopted the technology which has brought some new challenges , especially in Fintech segment. Even though FinTech businesses provide cutting-edge credit solutions, they are also vulnerable to special threats like cyber, operational, and cascading credit risks in interconnected digital ecosystems. The growing cyber threats are posing a significant challenge which, when coupled with operational risks like process inefficiencies and technological failures will significantly impact credit risk assessments. For example , a data breach can compromise the integrity of credit evaluations and jeopardize the systemic financial risks. According to Chen et al. (2022), these vulnerabilities highlight the necessity of thorough risk management frameworks that take into consideration the interdependencies between operational and credit risks in FinTech ecosystems.
How to Cite this Paper
Vedula, K. & Divya, D. (2026). Smart Credit Systems: How AI and Fintech are Transforming Risk Management. International Journal of Creative and Open Research in Engineering and Management, <i>02</i>(05). https://doi.org/10.55041/ijcope.v2i5.437
Vedula, Koushik, and Devarasetty Divya. "Smart Credit Systems: How AI and Fintech are Transforming Risk Management." International Journal of Creative and Open Research in Engineering and Management, vol. 02, no. 05, 2026, pp. . doi:https://doi.org/10.55041/ijcope.v2i5.437.
Vedula, Koushik, and Devarasetty Divya. "Smart Credit Systems: How AI and Fintech are Transforming Risk Management." International Journal of Creative and Open Research in Engineering and Management 02, no. 05 (2026). https://doi.org/https://doi.org/10.55041/ijcope.v2i5.437.
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- •Published on: May 14 2026
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