Adoption of AI-Enabled Fintech Solutions in Banks and Its Effects on Credit Risk Management

Résumé fourni par la source

This paper examines how banking sectors in Bangladesh uses AI and FinTech to deal with credit risk management.Among the three commercial banks in Bangladesh (Dutch-Bangla Bank, Prime Bank and Trust Bank) has been conducted a study to find out the effectiveness of their respective credit risk management processes for the year 2023 and 2024.A study of the effects of bank's loan advances on the financial status of customers is based on statistical data.This study involved 150 customers who got loans from retail banks.Using Partial Least Squares Structural Equation Modeling (PLS SEM), this study tested the proposed conceptual framework.It was observed that loan repayments in a timely manner result in a better quality of loans.Conversely, high operational costs per loan, high loan default rates, and long loan processing times are all detrimental to loan quality.The company's entire asset allocation is closely tied to risk management.There is significant evidence that Journal of Convergence in Technology and Management: Global Nexus (eISSN: 3049-1126) vol. 1, no. 3 (December, 2025-January, 2026), pp.56-87 portfolio management assists and facilitates risk management techniques.Throughout the recruitment process a high standard portfolio is necessary.In the financial industry, credit risk management can be improved with the use of AI driven technologies.The main cause of the benefits is the influence they have on debtors who are paying back their loans and the financial well-being of the loan companies rather than merely trimming costs and the swift handling of transactions.This study provides insights on how artificial intelligence is adopted by the retail banking sector in Bangladesh, focusing particularly on its practical applications in that country.In addition, the study provides practical guidance to educators, banking professionals and those responsible for making financial policy on the use of artificial intelligence in the banking sector.The research project focuses on whether or not computer systems can make more accurate judgments on clients' creditworthiness.

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