The Role of Artificial Intelligence Technology for Prudential Supervision of Credit Institutions
Kholiavko N. I., Kononenko S. O., Bondarenko A. A.

Kholiavko, Nataliia I., Kononenko, Serhii O., and Bondarenko, Andrii A. (2024) “The Role of Artificial Intelligence Technology for Prudential Supervision of Credit Institutions.” The Problems of Economy 3:276–282.
https://doi.org/10.32983/2222-0712-2024-3-276-282

Section: Finance and banking

UDC 330.101

Abstract:
The aim of the article is to define the role of artificial intelligence technologies for the implementation of prudential supervision and the features of its implementation in the context of external shocks. To achieve the aim of the article, the following tasks are solved: to determine the essence of artificial intelligence on the basis of systematization of scientific approaches to its interpretation; consider the principle of operation of this digital technology; specify the stages of the evolution of artificial intelligence; determine the potential impact of the use of this technology on the prudential supervision of credit institutions; to outline the main features of the implementation of such supervision in the context of external shocks. The article considers the essence and features of the digital economy, which covers all spheres of public life and significantly affects the activities of credit institutions. Digitalization of the economy involves the active use of digital technologies in production, consumption, exchange and management, which stimulates the adaptation of traditional sectors of the economy, including the financial sector. The digital economy places new demands on credit institutions and regulators, which must adapt to the fast-paced conditions of digital transformation, while maintaining the stability of the financial system and protecting the interests of consumers. The digitalization of credit institutions provides them with significant benefits, including increased efficiency of operational processes, improved customer service, the ability to analyze big data, and make accurate decisions. The development of innovative products and services becomes an important component, allowing to remain competitive in the market. There is also a need for regulators to adapt approaches to prudential supervision by integrating digital tools such as artificial intelligence, machine learning, and big data analysis to improve efficiency of monitoring of financial activities. The article focuses on risk-oriented approaches to prudential supervision, which are based on data analysis and risk forecasting, as well as the need for international cooperation to harmonize regulatory standards. The growth of cyber threats is causing increased requirements for cybersecurity and data protection. The results of the study highlight the importance of the proactive role of regulators in maintaining the stability of the financial system in the face of external shocks.

Keywords: credit institution, prudential supervision, artificial intelligence, external shocks, machine learning, digital economy, digital technology.

Fig.: 1. Bibl.: 10.

Kholiavko Nataliia I. – Doctor of Sciences (Economics), Professor, Professor, Department of Finance, Banking and Insurance, National University «Chernihiv Polytechnic» (95 Shevchenka Str., Chernihiv, 14027, Ukraine)
Email: nateco@meta.ua
Kononenko Serhii O. – Postgraduate Student, Department of Management and Administration, National University «Chernihiv Polytechnic» (95 Shevchenka Str., Chernihiv, 14027, Ukraine)
Email: job.s.kononenko@gmail.com
Bondarenko Andrii A. – Postgraduate Student, Department of Management and Administration, National University «Chernihiv Polytechnic» (95 Shevchenka Str., Chernihiv, 14027, Ukraine)
Email: Bondarenko_Andrii@outlook.com

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