The Monetary Authority of Singapore (MAS) announced on 28 May that the first phase of the Veritas initiative – a framework for financial institutions to promote the responsible adoption of Artificial Intelligence and Data Analytics (AIDA) – will commence with the development of fairness metrics in credit risk scoring and customer marketing.
These metrics will help financial institutions validate the fairness of their AIDA solutions in the two use cases. More use cases will be identified in subsequent phases of the initiative.
Credit risk scoring to assess the credit worthiness of borrowers is a critical function of the financial services industry and impacts most customers of financial institutions. 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.
Customer marketing is another area with significant potential for AI adoption. As marketing processes become increasingly digitalised and automated, there is increasing scope to use AI tools to analyse customer data and match products or services to customers. Hence, it is important that such AI solutions recommend the right product to the right customer at the right time.
Two core teams within the Veritas consortium will be taking on the development of the fairness metrics: UOB and Element AI will develop the metrics on credit risk scoring, while HSBC, IAG Firemark Labs and Gradient Institute will develop the metrics on customer marketing.
The consortium will publish a white paper documenting the metrics and release an open-source code to enable financial institutions to adopt the fairness metrics in these two areas by the end of this year. Financial institutions can integrate the open-source code into their own IT environment to validate the fairness of their AI solutions. The open-source code will also be deployed as a service on the APIX2 platform. This will allow financial institutions and FinTechs to have access to the service and technology providers on the platform who are able to validate their AI solutions.
Since the announcement of the project in November 2019, 8 new members have joined the Veritas consortium. This brings the current membership to 25 members. The full list of members are listed in the Annex.
Mr Sopnendu Mohanty, Chief FinTech Officer, MAS, 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 AIDA 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.”