The Monetary Authority of Singapore (MAS) will be developing “fairness metrics” in credit risk scoring and customer marketing as part of the first phase of its Veritas initiative.
Veritas is a framework for financial institutions to promote the responsible adoption of artificial intelligence (AI) and data analytics.
Veritas consortium members United Overseas Bank and Element AI will develop the metrics on credit risk scoring, which assesses the creditworthiness of borrowers. Given the large amount of customer data to analyse, financial institutions are increasingly employing AI tools for this purpose.
“It is crucial that AI-driven decisions do not systematically disadvantage any particular individuals or groups when determining the credit risk scoring,” MAS said.
Meanwhile, HSBC, together with IAG Firemark Labs and Gradient Institute, will develop the metrics on customer marketing, which has been identified as an area with significant potential for AI adoption. There is increasing scope to use AI tools to analyse customer data and match products and services to customers, the statement added.
The “fairness metrics” will allow financial institutions to validate the fairness of their AI and data analytics solutions in the two areas. More use cases will be identified in subsequent phases of the initiative, MAS said.
HSBC group chief data officer Rakshit Kapoor said: “Through the Veritas partnership with MAS and other constituents, we would like to further develop and embed practical implementation of AI principles into our global data strategy, in particular around good data governance and accountability.”
MAS chief fintech officer Sopnendu Mohanty said the responsible use of AI is a prerequisite for the greater adoption of AI in the financial sector.
“Veritas is the first industry-wide collaboration to provide a mathematical way to validate AI and data analytics solutions against the principles of fairness, ethics, accountability and transparency. We hope Veritas will speed up the adoption of AI in financial services in the right direction,” Mr Mohanty added.
Amol Gupte, Asean head and Citi country officer for Singapore, said: “While artificial intelligence brings significant benefits to the financial sector, maximising its potential will require the financial ecosystem to concurrently advance the responsible use of this technology.”
The consortium – which currently has 25 members – will publish a white paper documenting the metrics and also release an open-source code to enable financial institutions to adopt the fairness metrics in credit risk scoring and customer marketing by the end of 2020.
Financial institutions can integrate the open-source code into their own IT environment to validate the fairness of their AI solutions.
The Veritas consortium currently comprises MAS, SGInnovate, EY, CFA Society Singapore, the Bankers Association for Finance & Trade, tech giants Amazon Web Services and Microsoft, IAG Firemark Labs and Gradient Institute, Element AI, and 16 financial institutions.
Original article: The Business Times