Leveraging AI models to enhance credit risk assessment for Maltese startups

Abstract

This study addresses the critical need for accurate, effective risk management because of the particular difficulties faced by startups in Malta by looking at the application of Artificial Intelligence (AI) models to improve financial risk assessment (FRA) in Maltese startups. The study employed a mixed-methods approach, combining case studies' qualitative insights and surveys' quantitative data to assess the efficacy of current risk assessment strategies, and investigate the possibilities of AI-enhanced ones. The results show that AI can significantly increase the speed and accuracy of risk assessments, assisting startups to make more informed financial decisions. By giving startups innovative tools for data analysis and risk prediction that are specific to the unique market dynamics and regulatory environment of Malta, the integration of AI has been found to reduce common financial risks. The study concludes that by enabling more efficient management of financial uncertainties, using AI in FRA can result in more sustainable business practices among startups. These findings have important ramifications for investors, legislators, and startup founders. They point to the need for more AI-integrated risk management systems to strengthen Malta's startup ecosystem.