The future of credit: Credit professionals weigh AI’s promise against tomorrow’s risks

Business-to-business credit is an industry rooted in tradition, with established practices and principles passed down and shaped by generations of professionals. But today’s credit professionals are confronting challenges vastly different from those their predecessors faced, changing not only how they work but how they think about the future of credit. 

AI: Creating advancements and challenges 

Artificial intelligence (AI) continues to drive innovation and improved efficiency for businesses. When OpenAI’s ChatGPT introduced generative AI to the mainstream, people gained access to a revolutionary tool. Generative AI’s ability to reason, solve problems, provide insights and understand language, has helped streamline a host of operations and uncover new solutions for credit departments. This is part of the reason why 55% of credit professionals expect to see greater automation and use of AI in the coming years, according to an eNews poll.  

AI’s analytic capabilities, in particular, allow for more comprehensive financial analysis. “With the help of AI, we stay current on industry trends as well as identify changes in payment behavior and potential credit risk in customer portfolios,” said Renee Sullivan, credit manager at SitePro Rentals (Lewisville, TX). “It’s even helped us build a dashboard to track daily changes in accounts receivable (AR). As we look for more ways to use AI, I’m encouraging my team to experiment more with it by asking it questions and continuously refining its responses.” 

Despite its advantages, some credit teams are still hesitant on using AI. One of the biggest concerns is the risk of having confidential financial information made publicly available and repurposed for AI training. This data leakage, even when using in-house models, could compromise a customer’s privacy and lead to legal issues and strained customer relationships. 

Additionally, shared data can be used to devise AI-driven fraud schemes. According to Vectra AI, attackers can scrape public data from social media, corporate filings or conference recordings to build target profiles. They can use Dark Large Language Models (LLMs), voice cloning services and deepfake generators to generate personalized phishing emails, synthetic voice messages or deepfake videos. 

Because generative AI uses pattern recognition from available data, it may produce false, misleading or inaccurate outputs. As a result, some credit professionals are using AI more cautiously and relying more on their own judgment and experience to make sound conclusions. 

Geopolitical tensions heighten risk 

Lately, emerging risks remain top of mind for 20% of poll respondents, many of which stem from volatile market conditions caused by ongoing geopolitical tensions. “We’re expecting some financial distress resulting from the Russo-Ukrainian and Middle Eastern conflicts,” said Celeste Worthean, senior treasury and credit risk manager at Eurochem North America Corp. (Tulsa, OK). “Following the closure of the Strait of Hormuz, for instance, we saw fertilizer prices double and to accommodate this, customers started asking for greater credit limits. Where a customer would normally request $1 million increased to $2 million to facilitate all of their shipments. This is a trend that we’re anticipating with rising energy costs as well as customers holding off on making purchases until economic conditions improve.” 

Credit professionals are also anticipating financial strain on businesses from higher interest rates and borrowing costs. “In the next six months, I expect some customers will struggle to finance equipment to cover operating costs,” said Sullivan. “Smaller customers with limited cash reserves will be the most impacted by far.” 

Credit teams strategize for a better tomorrow 

Moving forward, credit professionals will be thinking more strategically when making decisions, per 15% of survey participants. As automation and AI assume more routine tasks, some credit teams are spending more time analyzing information, advising leadership and playing a larger role in broader business strategy. 

“I would hope that the role of a credit manager evolves into that of a strategic business partner,” said Tracy Mitchell, CBA, CCRA, director of accounts receivable at Trinity Logistics (Seaford, DE). “Beyond credit and collections, credit leaders have extensive knowledge on customer behavior, cash flow and industry trends that is useful for making business decisions. Their experience and ability to work with multiple departments, such as sales and operations, enables them to develop strategies to mitigate present and future risk for their company.” 

As new risks emerge, credit managers remain alert and proactive. “We’re going to be monitoring accounts more closely by using an Enterprise Resource Planning (ERP) system that notifies us when a customer exceeds or may exceed their credit limit as well as holding weekly AR meetings to address past-due accounts and customers on the verge of being past due,” said Worthean. 

Supporting the next generation of credit professionals 

The evolution of the profession will also affect the people entering it. As older generations retire, younger professionals are stepping into credit positions with less guidance than those before them. This is not to say tenured professionals are unwilling to pass on their knowledge, but training professionals on what took years to refine takes more time and effort than most people realize. 

Having access to advanced technology and resources makes developing new skills a priority for 10% of respondents. As companies recruit and develop the next generation of credit professionals, qualities such as technological fluency, adaptability, critical thinking and strong communication may become increasingly important.  

“They have to have the ability to make difficult decisions, which takes a certain level of confidence,” said George Demakis, corporate credit and pricing manager at Stone Group (Spokane, WA). “At times, you’re going to face opposition and criticism, so being able to defend your choices is critical.” 

The bottom line: As credit professionals look toward the future, they are balancing the promise of innovation with emerging risks while preparing the next generation to carry the industry forward.