Abstract:
It was mid-November 2025, and Sharvani was putting together a presentation for Gautam, who was the Chief Credit Officer (CCO) of Best Bank Ltd. Best Bank was in the middle of reassessing its credit analysis framework to evaluate borrowers’ ability to repay loans. The objective of this revaluation was to explore AI (artificial intelligence) capabilities to support financial decision-making. This exercise consisted of reviewing all the techniques and practices that the bank employed to select the appropriate borrower. The credit evaluation process involved multiple steps; therefore, the review was assigned to several analysts based on their expertise. Sharvani, who joined the bank recently, was assigned to develop an approach to analyse the financial statements of select companies. Her task was to identify, using AI, the financial characteristics that reflect the business models prevalent in the industries to which companies belong. Finally, she was required to make recommendations on how to incorporate AI into the credit appraisal process.
Sharvani was stressed after receiving critical feedback from the CCO for using an AI bot without understanding its strengths and weaknesses. Given the importance of the current task, her anxiety continued to increase. Each analyst was required to submit the report to the CCO, who would make the comprehensive review and then present the findings to the Bank Credit Committee (BCC). BCC comprised the bank's CEO and board members. The report's outcome was expected to provide future direction for the bank’s credit analysis framework. Even though she had worked tirelessly for the past 20 hours, she was uncertain whether she had conducted sufficient analysis to justify her findings.
