The Monetary Authority of Singapore (MAS) announced on Thursday the first phase of its “Veritas initiative” with the development of a fairness metrics for credit risk scoring and customer marketing. The Veritas framework was initiated in November 2019 to promote the responsible adoption of artificial intelligence and data analytics by financial institutions. The Veritas consortium currently includes 25 members.
MAS points out that credit risk scoring—which assesses the creditworthiness of borrowers—is a critical function of the financial services industry and impacts most customers of financial institutions. The institutions are increasingly employing AI tools for this purpose. Therefore, “it is crucial that AI-driven decisions do not systematically disadvantage any particular individuals or groups when determining credit risk scoring,” the regulator said in a statement.
There are two core teams within the Veritas consortium that will be working on this project. UOB and Element AI will be in charge of developing the metrics for the credit risk scoring. HSBC, IAG Firemark Labs, and Gradient Institute will look at the metrics for customer marketing, which is considered to have “significant potential for AI adoption”.
“The responsible use of AI is a prerequisite for the greater adoption of AI in the financial sector,” said MAS chief fintech officer Sopnendu Mohanty. “Veritas is the first industry-wide collaboration to provide a mathematical way to validate AIDA (artificial intelligence and data analytics) solutions against the principles of fairness, ethics, accountability and transparency.”