AI's growing role in credit management

Artificial intelligence is no longer a futuristic concept—it's now a vital part of many businesses' credit management strategies. 

AI: A key tool for managing credit and payments

According to the European Payment Report 2024, over half of European businesses (56%) believe that AI will significantly enhance their ability to manage late payments and optimise payment processes​. AI-powered tools offer personalised payment solutions and help automate traditionally manual workflows, such as customer engagement strategies, which allows companies to manage their cash flow more efficiently.

AI's potential benefits in this space include identifying anomalies in payment data, assessing creditworthiness, and even creating highly personalised communication strategies with customers, all of which can help businesses reduce bad debt and improve overall financial health. For companies dealing with a high volume of payments, these AI-driven efficiencies are invaluable.

The risks of AI in credit management

Despite the enthusiasm for AI, there are real risks that businesses must consider before fully integrating it into their credit management systems. One of the primary concerns is the lack of transparency around how AI makes decisions.

More than 60% of executives worry that their AI systems may make unfair or biased decisions based on historical data ​(Intrum EPR 2024). This lack of visibility could lead to problematic outcomes, particularly if the AI’s decisions affect a company’s ability to extend credit fairly or accurately predict which clients are at risk of default.

Another key risk is the potential loss of the “personal touch” that is often critical in customer relationships. While AI can automate many functions, over-reliance on these tools could harm customer trust if the system’s automated decisions don’t take nuanced human factors into account.

Country-specific adoption and challenges

AI adoption is not uniform across Europe. Countries like Slovakia and Slovenia have made significant investments in STEM education, leading to a higher level of in-house expertise and faster AI implementation​. In contrast, businesses in other parts of Europe, such as Spain and Italy, struggle with the skills gap, which makes it difficult to fully exploit the advantages that AI can bring.

The report indicates that around 46% of businesses worry that they will fall behind competitors if they do not integrate AI into their payment and credit management processes​. However, despite the clear advantages, the same proportion of businesses cite a lack of necessary skills in-house to effectively manage and maximise the benefits of AI​.

Balancing AI innovation with human oversight

As businesses look to the future, AI is becoming a non-negotiable tool for staying competitive. The challenge lies in striking the right balance between automation and human oversight. While AI can handle vast amounts of data quickly and efficiently, ensuring that the technology is used ethically and without bias is essential. Companies must invest not only in the technology itself but also in developing the skills and expertise needed to manage these systems effectively.

The risks of moving too quickly into AI without adequate safeguards could result in unreliable or biased outcomes. To mitigate these risks, businesses are advised to combine AI’s efficiency with human judgement, ensuring that all decisions are transparent, fair, and in the best interest of both the company and its customers.

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