AI-DRIVEN CREDIT RISK MANAGEMENT: A LONGITUDINAL ANALYSIS OF BANKING SECTOR METRICS

The integration of Artificial Intelligence (AI) into financial systems has become a game-changer, particularly in the realm of credit risk management. As banks face increasing pressures to manage risks more effectively, AI technologies offer new avenues for enhancing decision-making processes and improving financial outcomes. This paper explores the transformative impact of AI on credit risk management practices. By analysing key financial metrics—Provision Coverage Ratio (PCR) and Capital Adequacy Ratio (CAR)—across 11 selected commercial banks over a 12-year period, this study provides empirical evidence on how AI adoption has influenced the financial stability and risk management capabilities of these institutions. Utilizing a paired t-test analysis, this research aims to quantify the benefits of AI in mitigating credit risks and enhancing the overall resilience of banks, offering valuable insights for both practitioners and scholars in the field of financial management.