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
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
