AI and Financial Inclusion
A person generally needs a financial history to be approved for credit. Access to credit is often taken for granted in developed countries. Traditionally to provide someone with credit, a credit score must first be established. Artificial intelligence allows financial service providers to make use of alternative data sources, such as information on a person’s phone that might be shared for the purpose of obtaining credit. Satellite images can also provide an estimate of past and future agriculture income as well as the timing and sources of this income, and thus, they can provide key inputs to credit assessments for small farmers. A significant number of features that describe a person’s behaviour can be extracted from the phone, and AI is capable of relating these seemingly unrelated features to a single credit score based on examples of past loan behaviour.
By using AI and data analytics, financial products such as loans become available to a significant part of the world population that has no formal bank account, payslip or digital financial track record. Disbursing small loan amounts suddenly becomes financially feasible, since the entire process is automated and scalable. Fintech companies have found a way to monetize the regulatory hurdles that have kept traditional banks from lending to the poor. The idea of lending purely based on the data available on a consumer’s mobile device, ie creating a mobile digital credit store was an unproven model before but now it is a reality. We are witnessing the emergence of new business models with traditional banks partnering with fintechs for provision of digital credit services and the emergence of non banks fintechs in the digital lending space.
The objective of this session is to discuss some of the innovations that AI and big data analytics and how this can enhance financial inclusion in emerging economies.
Speakers, Panelists and Moderators
RORY MACMILLANFounding partnerMacmillan Keck, Attorneys & SolicitorsBorn and raised in Edinburgh, Scotland, Rory Macmillan is a founding partner of Macmillan Keck and a member of the New York Bar. Prior to Macmillan Keck, Rory practised law in New York and London for ten years with leading New York law firm Debevoise & Plimpton. He has extensive experience advising policy makers, regulators, international institutions, service providers and investors on communications policy, law and regulation, and major corporate and financial transactions. He has chaired dispute processes, acted as arbitrator, mediator and independent expert in disputes of national importance, and trained officials from over 40 countries.
VENKATESEN (VIJAY) MAUREEProgramme coordinatorInternational Telecommunication Union (ITU)Vijay joined the ITU in 2010 where he is responsible for coordinating the implementation of the Bridging the Standardization Gap programme, development of e-learning courses on standardization and undertaking research on emerging ICT standardization activities for production of Technology Watch reports. He has already published three such reports on ICT as an enabler for Smart Water Management, the Optical World and Privacy in the Cloud. He is also coordinating the work of the new Focus Group on Bridging the Gap: From Innovation to Standards which was set up in 2012.