An Evaluation of Technology in Banking Process Systems for a Non-Performing Assets Perspective

Abstract

The role of technology in banking processes and systems, particularly concerning Non-Performing Assets (NPAs), is of paramount importance in today's digital era. Technological innovations, such as Artificial Intelligence (AI), blockchain, and advanced data analytics, have revolutionized traditional banking operations, offering unprecedented opportunities for NPA management. The reduction in NPAs of a bank can be attributed to various factors such as effective risk management, stringent lending policies, and asset quality improvement. Hence to overcome the challenges author focuses on the role of technology in the banking process to reduce the NPA ratio. It finds that AI-powered algorithms enable banks to automate credit risk assessment processes, identify potential NPAs at an early stage, and make informed decisions to prevent defaults. Additionally, blockchain technology provides a secure and transparent platform for managing loan contracts and collateral documentation, reducing the risk of fraud and enhancing the integrity of loan transactions. Furthermore, digital lending platforms and mobile banking solutions offer seamless and convenient experiences for customers, facilitating faster loan processing and improving loan servicing efficiency. The strategic integration of technology into banking processes and systems holds immense potential for reducing NPAs, enhancing asset quality, and fostering financial stability. Collaborative efforts between banks, regulators, and technology providers are essential to harnessing the full benefits of technology in NPA management and ensuring the resilience and growth of the banking sector in the digital age.