Loan, risk managers urged to adopt AI in fraud detection

The Chartered Institute of Loan and Risk Management of Nigeria (CILRMN) has underscored the need for members of the association to leverage Artificial intelligence (AI) in fraud detection.

President and Chairman of the Governing Council of the Institute Dr. Harriet Nkechi Akubuiro, gave this charge on Saturday in Abuja at the 2024 international conference of the Institute with the theme Artificial Intelligence: An Essential Factor in Risk Management Practice”.

Insisting that AI is revotionalising risk management worldwide, Akubuiro maintained that the technology improves accuracy and efficiency, enhances risk management practices, provides simulation capabilities, and reduce risks in credit decisions and modelling.

She identified AI as one that everyone irrespective of their profession or life’s endeavor will quickly want to embrace, adding that it assists in analysing big data, enables financial disclosures, and consequent risk quantum.

“It is broad, current and its benefits are overwhelming. A summary of what we are looking at through this theme is how to optimise risk management using AI.

“It is very useful in fraud detection, improves accuracy and efficiency, enhances risk management practices, provides simulation capabilities, reduces risks in credit decisions and modelling, assists in analysing big data, enables financial disclosures and consequent risk quantum.

“AI incidents are quietly shaping the future of risk management count yourselves very lucky to have attended this conference.”

In his keynote address, Provost, College of Postgraduate Studies, Veritas University, Prof. Linus Osuagwu who identified risk management as an integral component of strategic management decisions in organizations, explained that systematically identifying and addressing risks, they can safeguard their objectives and capitalize on potential opportunities, thereby ensuring sustainable growth in the ever-changing environments of operations.

According to Osuagwu, AI stands as a transformative force with regard to risk management, adding that, it offers tools that enhance accuracy, efficiency, and responsiveness.

“The trend of Al in risk management points toward increased integration and sophistication. Emerging technologies such as explainable Al aim to enhance transparency and trust in the applications of Al systems in risk management.

“Additionally, the development of Al governance frameworks will be of importance in ensuring the ethical and responsible use of Al in risk management practices.

“Generally, Al can enhance risk management predictions by providing more accurate, timely, and comprehensive assessments. Its ability to process large data, learn from new data, and automate complex analyses makes it an invaluable tool in modern risk management practices.

“However, while Al offers some benefits in enhancing risk management decisions, it is imperative to recognize and address its challenges.

“In this vein, organizations associated with risk management decisions should adopt a balanced approach and integrate Al with human oversight, in addition to ensuring data quality, adhering to ethical standards, and maintaining compliance with regulatory requirements, among other relevant strategic considerations.

“By doing so, organizations saddled with risk management decisions can harness the advantages of Al while mitigating associated challenges.”