In a recent article in The Global Treasurer on international regulation reducing banks’ ability to offer trade finance, Tradeteq’s Head of AI, Michael Boguslavsky, argues that artificial intelligence (AI) could help mitigate such issues – particularly for SMEs.
Boguslavsky notes that AI has the capacity to “evaluate and potentially recognise credit quality of a more diverse set of companies than the traditional models”. These traditional models, such as the Altman Z credit scoring model, no longer suffice as they do not consider all of a company’s variables. Boguslavsky emphasises AI’s flexibility, and how using it could open up the trade finance market to non-bank investors, who are not faced with the same rigorous regulations as banks.
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