Ukrainian Banking Sector Embraces AI to Enhance Lending Practices Amid Ongoing Challenges
The Ukrainian banking sector continues to grapple with challenges related to risk identification and control during the lending process. Kateryna Rozhkova, the First Deputy Chairman of the National Bank of Ukraine, highlighted the potential of artificial intelligence (AI) in addressing these issues more swiftly and effectively.
In her remarks, Rozhkova pointed out that in developed countries, AI is increasingly being leveraged not just for credit scoring and call center operations, but also in client contract formation and document verification. This application of technology improves the quality and precision of complex processes, enabling banks to better anticipate future client needs.
Despite the ongoing full-scale war, Rozhkova noted that retail lending in Ukraine is continuing to progress. However, she emphasized that the penetration of retail credit remains historically low compared to European benchmarks. This raises concerns about the broader accessibility of financial services for the average citizen.
Further insight came from Perwin Dadashova, Director of the Financial Stability Department of the National Bank. She explained that the resurgence of retail lending is being fueled by an increase in real incomes and a gradual improvement in consumer sentiment, although it has not yet reached the levels of a credit boom. To foster a more robust credit market, banks must undertake significant efforts to expand their client base, particularly targeting demographics whose access to credit had previously been curtailed at the onset of the war.
Additionally, the implementation of sophisticated scoring systems has emerged as a critical tool for financial institutions. These systems are designed to detect potential fraud while assessing the risk of loan defaults, ensuring that credit is not denied to individuals who are capable of repayment.
As the Ukrainian banking sector navigates these complex challenges, the incorporation of AI technologies and a focus on improving consumer access to credit promise to reshape the lending landscape in the country.
