The European Union has been working hard in recent years to establish a legal framework for artificial intelligence. With the adoption of the EU AI Act, the first global law is a reality. For many companies, this may sound abstract or far away, but for credit managers, the impact is very concrete. After all, AI systems that make decisions about creditworthiness fall into the high-risk category. That means that in the coming years you have to reckon with stricter requirements and more responsibility.
What does this mean in practice?
The law requires that decisions made by AI be transparent and explainable. For example, if a customer is assigned a credit limit, you must be able to show what factors influenced that decision. In addition, the EU AI Act places clear requirements on the quality of the data being used. Old or one-sided information can lead to biased outcomes, and that will soon be prohibited. Moreover, there must not be fully automated decisions: there must always be human verification.
The timeline: from 2025 to 2027
Although the AI Act has already been passed, implementation is phased in. In 2025, the first general provisions will take effect, such as the ban on discriminatory applications. In 2026, registration and transparency requirements for high-risk AI will follow. And in 2027, all organizations must be fully compliant, including comprehensive documentation and a robust risk management process. For credit managers, this means that rather than taking action two years from now, you need to start thinking now about how your systems and processes are set up.
Opportunities for the industry
At first glance, the AI Act appears to be mostly additional work, but there are also clear benefits. Companies that are transparent about their credit decisions gain trust from customers. Moreover, the Act forces organizations to clean up and better manage their data sources, ultimately leading to more reliable decisions. It also has benefits internally: finance, legal and IT will have to work more closely together, which can increase efficiency.
Prepare for the new reality
As a credit manager, you can take steps now. Start by mapping out the AI applications you use in your credit and receivables management. Ask your suppliers how they are dealing with the new legislation and whether their systems will soon be compliant. In addition, establish internal policies around data quality, documentation and human control. And perhaps most importantly, make sure your team understands what the AI Act means for their day-to-day work so that everyone is prepared.
The role of CreditDevice
At CreditDevice, we closely follow the developments surrounding the EU AI Act. Our software is designed to enable you to comply with laws and regulations without having to find out everything yourself. From transparent credit information to insightful workflows and a PolisManager that links up with compliance and risk management: we ensure that you keep a grip on your processes, even in a changing legal landscape.
Conclusion
The EU AI Act is changing the way you handle data and technology as a credit manager. Where it now feels like a legal obligation, soon it may actually be an opportunity to improve processes and increase customer confidence. Those who prepare now will not soon be behind the times.
