On July 3rd, NPL Markets gave a guest lecture on the use of artificial intelligence (AI) for the management of non-performing loans as part of a training course organised by the Joint Vienna Institute, the ECB, and the World Bank. The Joint Vienna Institute (JVI) is a regional training centre, primarily for public sector officials from countries in Central, Eastern and South-eastern Europe, and Central Asia. The JVI was established by the Austrian Ministry of Finance and the Austrian National Bank, the International Monetary Fund, and several other international organizations.
Our CTO, Burkhard Heppe, presented AI use cases and challenges across the NPL value chain. AI based solutions include machine learning applications based on structured data and large language models implemented in document processing pipelines. The following use cases were presented:
- Customer interaction and marketing,
- Data standardisation and migration,
- Workout strategy optimisation,
- Investor reporting,
- Legal due diligence automation, and
- Data enrichment during NPL transaction processes.
The lecture was followed by a stimulating discussion about how banks can overcome confidentiality concerns when using AI tools, the best models available for credit risk estimates and the prospect of making the market for NPL in Eastern Europe and Central Asia more efficient with broader investor participation. Other lectures of the training course given by ECB, IMF, and World Bank focused on NPL resolution strategies, NPL sales and securitisations, and bank loan loss provisions.
