The government is trying to make it mandatory for solution experts to use artificial intelligence (AI) agents in the bankruptcy process to improve efficiency, transparency and accuracy.
According to a report by the Indian Bankruptcy and Bankruptcy Board (IBBI), “By leveraging AI tools, India can address challenges such as delayed solutions, fraudulent activities and overwhelming financial data that experts have to analyze.”
Mandatory AI adoption can help solution experts streamline compliance, automate documentation, detect anomalies and improve stakeholder communication, the board added.
Unlock advanced AI use cases beyond legal investigations
Bankruptcy experts have already leveraged AI applications like CHATGPT, but the use of AI tools is limited to summarizing legal judgments and enhancing legal research. However, many AI use cases remain unexplored.
Through the report, IBBI outlined many AI agents that can have different purposes. For example, a professional fraud detection AI agent can identify potential fraud such as preferential, undervalued, fraud, and horrifying (PUFE) transactions, hidden assets, or other fraudulent financial records.
Similarly, you can leverage bankruptcy forecasting agents to predict the outcome of your recovery. “Using advanced AI models, these agents analyze historical bankruptcy data, financial records, and case-specific variables to predict creditor recovery rates and timelines. Forecast agents can model a variety of misleading scenarios, such as asset liquidation and restructuring plans, and evaluate outcomes,” the report states.
Increases global precedent and efficiency for IBC
Experts said there could be important efficient benefits to implementing AI agents in the IBC process, especially when it comes to reviewing information and documents. RCIC said:
Many countries are actively integrating AI into the bankruptcy process. The UK launched its “National AI Strategy” in 2021 with the aim of establishing a comprehensive framework for AI governance. The initiative explicitly supported the use of AI in law enforcement agencies, including bankruptcy-related issues. Additionally, Finland will use the Costi platform to improve efficiency in the event of bankruptcy.
