Singapore promotes responsible artificial intelligence in finance

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Singapore has launched efforts to develop a framework to ensure "responsible" adoption of artificial intelligence (AI) and data analysis in credit risk assessment and customer marketing. Two teams of banks and industry players were tasked with setting parameters that could help financial institutions ensure the "equity" of their artificial intelligence and data analysis tools in these cases.

The Singapore Monetary Authority (MAS) said a White Paper detailing the measures would be published by the end of the year, as well as an open source code to allow financial institutions to adopt the measures. These organizations will then be able to integrate open source code into their own IT systems to assess the fairness of their AI applications, the sector’s regulatory body said on Friday.

She added that open source code would be deployed on the global online market and on the sandbox, API Exchange (APIX), which allows fintech and FSI companies to integrate and test applications via a cloud-based platform.

With the launch of its National Artificial 

Intelligence (AI) Strategy, as well as a series of initiatives, The Government of Singapore aims to encourage the adoption of AI to generate economic value and provide a global platform on which to develop and test AI applications.

Financial institutions are increasingly using AI

As financial institutions need to analyze a large amount of customer data to assess the creditworthiness of borrowers, these organizations are increasingly using AI tools to do so, said the Singapore authority. “It is critical that decisions made using AI do not consistently disadvantage individuals or groups when determining the credit risk rating,” she added.

Customer marketing processes are also becoming digitized and automated, paving the way for the deployment of artificial intelligence tools to analyze customer data and match products and services to consumers, MAS said. It is necessary for AI applications to recommend the right products to the right customers at the right time.

The Veritas consortium at the helm

According to the Monetary Authority of Singapore, the two teams responsible for working on this framework are part of the Veritas consortium, is part of Singapore’s national AI strategy and is responsible for providing financial institutions with an auditable way to incorporate the 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 credit risk rating measures, while a second team including HSBC and IAG Firemark Labs and Gradient Institute would work on customer marketing measures.

Responsible use of AI is a prerequisite for greater adoption of AI in the financial sector. Veritas is the first sector-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 that Veritas will accelerate the adoption of AI in financial services in the right direction,” said Sopnendu Mohanty, MAS Fintech Division Director.

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