A report by the Department of Economic Affairs, under the Finance Ministry, on fintech noted that fintech companies like Credit Mantri, CreditVidya and Samunnati were using AI and ML to create an alternate lending data score. It recommended that NABARD (National Bank for Agriculture and Rural Development) work along the same lines as these companies and create a credit registry for farmers for credit scoring, default analytics, predictive crop analytics, repayment monitoring, fraud control, and improving efficiency in credit services. It's worth noting that CreditVidya was found to be embedding tracking software in certain mobile apps, which gave it the access to a person's GPS locations, and business SMSes from ecommerce sites and banks, according to a HuffPost India report. The user data was used to power CreditVidya’s algorithms that help lending companies determine the credit-worthiness of loan applicants. It ran this code for several months in 2017. Here are some key recommendations made by the DEA surrounding AI and ML: 1. PSU banks can use AI and ML for risk management: The report recommended that the Department of Financial Services (DFS) and PSU (public sector undertaking) banks use AI, ML and cognitive analytics for risk management, compliance management and fraud control. It also said that the DFS and PSU banks should work on a roadmap to adopt these technologies in a time-bound manner. 2. AI can help in better compliance: AI has the potential to help firms detect compliance risks and make better-informed decisions about how to mitigate them, the report…
