Artificial intelligence and distributed ledger technology are already affecting the corporate sector. In the future, they could fundamentally change the entire economy by transforming or eliminating certain industries and creating new markets from scratch.
Moody’s Investors Service analysts presented a report that analyzed the potential impact of DLT and artificial intelligence on the economy in general and on the creditworthiness indicators of the corporate sector in particular.
Among Moody’s global forecasts are the prospects for a radical transformation of the overall economy. According to analysts, innovations can significantly transform entire sectors, including their disappearance, but they can also help create completely new markets. They’ll certainly lead to significant changes in the labor market and may trigger global political and geopolitical changes.
There’s currently a “tipping point” in the development of artificial intelligence and DLT, so that all major transformations far beyond corporate balance sheets should be expected in the next decade. At present, however, the innovations outlined are already influencing the formation of creditworthiness indicators. In this context, Moody’s analysts emphasize five main factors:
- The emergence of additional resources to improve existing products, services, and infrastructure or create new ones.
- Opportunities to boost labor productivity and reduce production costs.
- Changes in expenditure and investment profiles.
- The need to adapt to new regulatory rules.
- Cybersecurity issues.
Additionally, new challenges and opportunities arising from AI and DLT will be reflected in existing credit risk metrics. This, in turn, will impact business strategy development and implementation processes, improved operational efficiency, and the growing importance of management factors. Active innovation could substantially change the market structure, widening the gap between leaders and laggards.
Moody’s predictions are already receiving practical confirmation. For example, the Hong Kong Monetary Authority (HKMA) as a result of research has concluded that tokenization technology can significantly improve almost all processes in the bond market. Meanwhile, the Lao authorities intend to actively use blockchain to improve the economic and social situation in the country.