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    To AI or not to AI? Why artificial intelligence deciding your loan application makes regulators nervous

    Synopsis

    AI & ML are now ubiquitous in banks and financial institutions as it helps the companies improve credit assessment and reduce frauds. Though these models have some risks — and the regulators are rightfully concerned — the good news is these can be resolved without much trouble.

    The use of artificial intelligence and machine learning models (machine learning is a subset of AI) has surged in the banking and financial services ecosystem over the last decade. It is now routine to find credit assessment, fraud detection, income estimation, loan sanction, cross-selling and even collections management being driven largely by AI/ML models, with low levels of human involvement. This is particularly true in new-age fintech
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    The Economic Times