Harnessing Responsible AI in the Financial Sector – Fintech Singapore

Artificial Intelligence (AI) has become integral to our daily lives, driving technological advancements and enhancing various industries, including finance.

However, the increasing use of AI also raises concerns about responsible and ethical practices. 

It is essential to ensure that AI systems are fair, unbiased, and accountable to prevent adverse impacts on individuals and society. In line with this need, NEC has taken significant steps to promote responsible AI initiatives. 

With the recent announcement of the MAS Toolkit version 2.0 in June, NEC’s commitment to fairness, ethics, accountability, and transparency (FEAT) principles in the financial sector has been further reinforced.

The importance of responsible AI in the financial sector

Integrating responsible AI into the financial industry is critical as it facilitates access to services and wealth distribution and counters potential bias in data-driven decisions.

Preserving data confidentiality and adhering to legal and ethical standards is fundamental. Transparent AI decision-making, coupled with human oversight, cultivates trust among stakeholders.

Responsible AI fosters innovation, inclusivity, and sustainability by addressing biases, necessitating a joint effort from various stakeholders.

While AI has significantly benefited the financial sector, its applications with potential ramifications on individuals’ lives require scrutiny to ensure fairness and prevent biases.

Responsible AI in finance involves risk identification, assessment, and mitigation. It demands transparency, interpretability, and all stakeholders’ understanding of AI models and tools.

Financial institutions must address potential AI-induced biases, particularly affecting vulnerable groups. Robustness, brand, and reputation management are vital to prevent harm from AI misuse or malfunctions.

Compliance with laws, regulations, and standards governing AI use in finance is paramount. Financial institutions need a comprehensive AI governance approach, promoting accountability, oversight, and alignment with ethical values.

MAS’ Veritas Toolkit promotes ethical AI in finance

The Veritas Toolkit, created by the Veritas Consortium under the guidance of the Monetary Authority of Singapore (MAS), is an open-source software suite that fosters ethical AI practices within the financial sector. Its primary objective lies in assisting financial institutions in ensuring fairness in AI applications through automated fairness metric evaluation and seamless integration with existing IT systems.

The toolkit simplifies the Fairness Assessment Methodology by aligning with the FEAT principles. This comprehensive evaluation process spans the entire AI development lifecycle—from system design and data preparation to model building and deployment.

Version 2.0 of the Veritas Toolkit, updated by a consortium of 31 industry players under the MAS, takes a significant leap forward by offering comprehensive assessment methods and easy integration with existing IT systems. The toolkit provides a user-friendly interface enriched with guidelines, examples, templates, and checklists for adequate documentation and reporting.

To solidify its value and applicability, the consortium regularly publishes white papers and use cases that showcase the toolkit’s practical application and advantages in the financial sector.

NEC championing responsible AI and FEAT principles

As a responsible technology company, NEC has embraced the challenge of developing and implementing ethical AI practices that prioritise accuracy, fairness, transparency, and accountability to prevent negative societal impacts.

NEC’s commitment to responsible AI shines through its collaboration with regulatory bodies and the development of advanced tools like the Veritas Toolkit, which aligns with the FEAT principles.

The company’s approach revolves around comprehensively evaluating its AI systems to mitigate bias, enhance transparency, and improve decision-making processes. By adopting explainable AI, NEC ensures its algorithms are interpretable, enabling stakeholders to understand the reasoning behind AI-driven decisions.

Transparency is the cornerstone of NEC’s AI systems, fostering trust among customers, regulators, and stakeholders while ensuring accountability and fairness in AI deployments.

To combat biased AI algorithms, NEC employs several strategies. Firstly, the company focuses on ensuring diverse and representative datasets during the training phase to minimise the risk of bias. Secondly, rigorous testing and evaluation are conducted to identify and rectify potential algorithm biases.

NEC collaborates with external experts, regulators, and customers to gain valuable perspectives and feedback on responsible AI practices. This ensures that various viewpoints are considered in the development process.

Additionally, NEC is supportive of the Singapore Computer Society’s effort to promote the responsible use of AI with the AI Ethics & Governance Special Interest Group (SIG). This group aims to facilitate a network of networks to unite diverse mindsets and backgrounds, tap into knowledge bases, and share resources from different organisations to build a robust ecosystem of guidance on responsible AI for the industry.

Ethics plays a fundamental role in NEC’s AI development processes, establishing an ethics committee that oversees AI projects, provides guidance, and ensures adherence to ethical standards.

Moreover, NEC emphasises accountability by involving all stakeholders in decision-making and taking responsibility for its AI systems’ actions and outcomes. The company strives to establish clear lines of accountability to ensure transparency and trust.

To underscore its commitment, NEC introduced the “NEC Group AI and Human Rights Principles” in April 2019, advocating for deep learning AI while emphasising respect for human rights, including the responsible utilisation of biometrics and personal data.

NEC’s responsible AI in action

NEC has steadfastly committed to responsible AI practices across various real-world applications, demonstrating its dedication to ethical AI across diverse industries. Working closely with Hawaiian airports, NEC developed an integrated system deployed in over five airports that combines thermal scanning and facial recognition technology.

With privacy protection at its core, this initiative ensured responsible handling of personal information by storing only necessary details and promptly discarding the rest.

NEC emphasises fairness and transparency in its credit assessment and modelling tools, allowing financial institutions to make unbiased, informed decisions. Collaborating with the National University of Singapore (NUS) Center for Research in Privacy Technologies further underscores NEC’s priority in addressing privacy concerns while developing AI solutions.

Their support for AI ethics movements and their adoption of the AI Verify Toolkit in partnership with the Infocomm Media Development Authority (IMDA) reveals a culture within the organisation that goes beyond mere compliance.

By adhering to stringent guidelines and fostering collaboration with academic institutions, NEC ensures that ethics, privacy, and responsible data handling are integral to their AI development and application, aligning with the broader movement towards responsible AI usage.

NEC aids financial institutions in AI assessment

As AI continues to revolutionise the financial sector, the role of responsible AI practices cannot be overstated. It’s more than just complying with regulations; it represents a moral duty that goes to the core of trust in finance.

By prioritising responsible AI, financial institutions can protect themselves from potential risks related to biased or unethical AI systems while gaining a competitive edge in today’s dynamic market.

The growing movement towards responsible AI allows financial institutions to positively shape the industry and foster confidence among stakeholders and the wider community.

NEC’s dedication to responsible AI provides financial institutions with indispensable tools. These resources ensure a thorough assessment and governance of AI applications, upholding fairness, ethics, accountability, and transparency.

Visit NEC’s website to understand how NEC’s solutions can help you assess and manage AI use cases with utmost accountability and transparency.

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• Source: https://fintechnews.sg/76591/ai/harnessing-responsible-ai-in-the-financial-sector/