MAS Consortium to Develop AI Fairness Metrics for Credit Scoring
MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing. Veritas Initiative is a framework that will enable financial institutions to evaluate their AIDA-driven [Artificial Intelligence and Data Analytics] solutions against the principles of fairness, ethics, accountability, and transparency; the aim of this evaluation is to strengthen internal governance around the application of artificial intelligence (AI) and the management and use of data. The Veritas 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.
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. 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 analyze, financial institutions are increasingly employing artificial intelligence tools for this purpose. It is crucial that decisions driven by artificial intelligence do not systematically disadvantage any individuals or groups when determining the credit risk scoring.
HSBC, IAG Firemark Labs, and Gradient Institute will develop the metrics on customer marketing. Customer marketing is another area with significant potential for artificial intelligence adoption. As marketing processes become increasingly digitalized and automated, there is increasing scope to use artificial intelligence tools to analyze customer data and match products or services to customers. Hence, it is important that such artificial intelligence solutions recommend the right product to the right customer at the right time.
Since the announcement of this project in November 2019, eight new members have joined the Veritas consortium, which brings the current membership to 25 members. MAS has published a list of members of the Veritas consortium.
Keywords: Asia Pacific, Singapore, Banking, Fintech, Veritas Consortium, Credit Risk, Data Analytics, APIX Platform, Artificial Intelligence Metrics, Credit Scoring, MAS
Previous Article
IOSCO Consults on Outsourcing Principles for Operational ResilienceRelated Articles
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
BCBS, CPMI, and IOSCO to Survey Market Participants on Margin Calls
BCBS, CPMI, and IOSCO (the Committees) are inviting entities that participate in market infrastructures and securities markets through an intermediary as well as non-bank intermediaries to complete voluntary surveys on the use of margin calls.
