Singapore has kicked off efforts to develop a framework to ensure the "responsible" adoption of artificial intelligence (AI) and data analytics in credit risk scoring and customer marketing. Two teams comprising banks and industry players have been tasked to establish metrics that can assist financial institutions in ensuring the "fairness" of their AI and data analytics tools in these instances.
The Monetary Authority of Singapore (MAS) said a whitepaper detailing the metrics would be published by year-end along with an open source code to enable financial institutions to adopt the metrics. These organisations then would be able to integrate the open source code into their own IT systems to assess the fairness of their AI applications, the industry regulator said in a statement Friday.
It added that the open source code would be deployed on the online global marketplace and sandbox, API Exchange (APIX), which enabled fintech and FSI companies to integrate and test applications via a cloud-based platform.
Given that financial institutions needed to analyse a large amount of customer data to asses the credit worthiness of borrowers, these organisations increasingly were employing AI tools to do so, MAS said. "It is crucial that AI-driven decisions do not systematically disadvantage any particular individuals or groups when determining the credit risk scoring," it said.
Customer marketing processes also were becoming digitalised and automated, paving the way for AI tools to be deployed to analyse customer data and match products and services to consumers, it added. This underscored the need for AI applications to recommend the right products to to the right customers at the right time.
According to MAS, the two teams tasked to work on the framework are part of the Veritas consortium, which is part of Singapore's national AI strategy and responsible for providing financial institutions with a verifiable way to incorporate the FEAT principles -- of Fairness, Ethics, Accountability and Transparency -- into their AI and data analytics tools. The consortium currently comprises 25 members including MAS, DBS Bank, Microsoft, Bank of China, BNP Paribas, and Standard Chartered Bank.
A team led by UPB and Element AI would develop the metrics on credit risk scoring, while a second team comprising HSBC and IAG Firemark Labs & Gradient Institute would work on customer marketing metrics.
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."
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