Kunstmatige intelligentie (AI)
technology has changed the delivery of traditional financial services, offering opportunities to boost revenue while reducing costs.
However, its advancement comes with new challenges and risks, particularly in
relation to complying with existing laws that are often archaic in nature and
fail to provide a conducive environment for such technologies.
Niettemin, het
is important to understand the regulatory intricacies before implementing AI
in your business. This article will analyze the use of
artificial intelligence in the context of consumer finance and responsible
lending obligations.
If you provide or otherwise assist consumers in obtaining or increasing the limit of a credit product provided to
individuals and strata corporations for personal, domestic, and household
purposes or the purchase or improvement of residential investment property,
then the responsible kredietverlening obligations will apply to you.
The responsible lending verplichtingen are provided under Chapter 3 of the National Consumer Credit Protection Act 2009 (Cth) (NCCPA).
Generally, they prohibit credit licensees from entering into or
assisting a consumer with a credit product that is not suitable for them.
“The responsible lending obligations under the National Consumer Credit Protection Act 2009 (NCCP) that apply to the credit providers (lenders) & credit assistance providers (broker) marked a new era of the professionalism in the finance industry.” pic.twitter.com/Q0taFac7dY
— Outsolu (@OutsoluNepal) 1 september 2020
The NCCPA requires providers of Credits
assistance and credit to make an assessment as to whether the credit contract
will be unsuitable for the consumer if the contract is entered into or the credit
limit is increased. Before making the assessment, the provider is required to:
- Make reasonable inquiries about the consumer’s requirements and objectives regarding the credit product.
- Make reasonable inquiries about the consumer’s financial situation.
- Nemen
steps to verify the consumer’s financial situation.
Er zijn
certain circumstances in which an application for a credit product or an
increase to a credit limit must be assessed as unsuitable. This includes if, at
the time of the assessment, it is likely that:
- De
consumer will be unable to comply with their financial obligations under the
credit product, such as not being able to meet repayments when they are due. - De
consumer will only be able to meet their financial obligations under the credit
product with substantial hardship. - De
credit product will not meet the consumer’s requirements or objectives.
There are other scenarios in which you may determine that an increase in a credit product or credit limit is unsuitable and decline some applications.
Uitdagingen
AI-technologieën zijn
increasingly being used in the application approval process to assess unsuitability. However, the challenge to using AI is the potential
for the data to be skewed, creating inherent discrimination. To overcome this
hurdle, AI technology needs to be based on transparent models that
recognize and address the potential for prejudice.
If you intend to rely on
this technology, you should be able to explain to consumers how the outcome of
the AI technology is attained and how it is consistent with your responsible
lending obligations.
Continuous testing and monitoring of the technology are requisites to mitigate the likelihood of new biases emerging and to
appropriately redress such biases or inaccuracies in a timely manner.
Robust data privacy and security measures are paramount to the reliability and integrity of AI technologies. Consumers
should be able to trust that their data will be responsibly managed. For
example, it may be appropriate to anonymize personally identifiable information
terwijl ondernemen machine learning techniques or to otherwise include synthetic
data.
It is important to be cautious of data intrusions and develop controls to
identify and address such risks, such as restricting the control of algorithms.
Good governance in relation to AI technologies
is more likely to facilitate a smooth integration into the business. There
needs to be an appropriate allocation of human and financial resources, together with clear lines of responsibility and accountability. A decision framework for AI centered upon responsible lending obligations, together with formal training programs, will translate into trusted and responsible use of AI.
#AI regelgeving in de #UK: a path to good #bestuur and global leadership? https://t.co/4ul65KC5pd✍️@HuwJRoberts1 @jessRmorley @Floridi @RosariaTaddeo v @PolicyR @sallyeaves @nigewillson @mvollmer1 @Shi4Tech @enilev @SusanHayes_ @BetaMoroney @tlloydjones @danfiehn @Corix_JC pic.twitter.com/leUTrGvLxi
— BusinessIntelligence (@bimedotcom) 26 mei 2023
Ultimately, as we continue to transition to a
digitaal economy, it is pivotal that the use of AI technology in consumer finance focuses
op:
·
-
doorzichtigheid
so that the reasons for an assessment of unsuitability can be explained to
consumenten,
· - gecontroleerd
implementation so that data privacy and security can be maintained while also
ensuring any biases are corrected for outcomes that are consistent with
responsible lending obligations, and - accountability to encourage trust and confidence
in AI, including the decision-making behind such technology.
Kunstmatige intelligentie (AI)
technology has changed the delivery of traditional financial services, offering opportunities to boost revenue while reducing costs.
However, its advancement comes with new challenges and risks, particularly in
relation to complying with existing laws that are often archaic in nature and
fail to provide a conducive environment for such technologies.
Niettemin, het
is important to understand the regulatory intricacies before implementing AI
in your business. This article will analyze the use of
artificial intelligence in the context of consumer finance and responsible
lending obligations.
If you provide or otherwise assist consumers in obtaining or increasing the limit of a credit product provided to
individuals and strata corporations for personal, domestic, and household
purposes or the purchase or improvement of residential investment property,
then the responsible kredietverlening obligations will apply to you.
The responsible lending verplichtingen are provided under Chapter 3 of the National Consumer Credit Protection Act 2009 (Cth) (NCCPA).
Generally, they prohibit credit licensees from entering into or
assisting a consumer with a credit product that is not suitable for them.
“The responsible lending obligations under the National Consumer Credit Protection Act 2009 (NCCP) that apply to the credit providers (lenders) & credit assistance providers (broker) marked a new era of the professionalism in the finance industry.” pic.twitter.com/Q0taFac7dY
— Outsolu (@OutsoluNepal) 1 september 2020
The NCCPA requires providers of Credits
assistance and credit to make an assessment as to whether the credit contract
will be unsuitable for the consumer if the contract is entered into or the credit
limit is increased. Before making the assessment, the provider is required to:
- Make reasonable inquiries about the consumer’s requirements and objectives regarding the credit product.
- Make reasonable inquiries about the consumer’s financial situation.
- Nemen
steps to verify the consumer’s financial situation.
Er zijn
certain circumstances in which an application for a credit product or an
increase to a credit limit must be assessed as unsuitable. This includes if, at
the time of the assessment, it is likely that:
- De
consumer will be unable to comply with their financial obligations under the
credit product, such as not being able to meet repayments when they are due. - De
consumer will only be able to meet their financial obligations under the credit
product with substantial hardship. - De
credit product will not meet the consumer’s requirements or objectives.
There are other scenarios in which you may determine that an increase in a credit product or credit limit is unsuitable and decline some applications.
Uitdagingen
AI-technologieën zijn
increasingly being used in the application approval process to assess unsuitability. However, the challenge to using AI is the potential
for the data to be skewed, creating inherent discrimination. To overcome this
hurdle, AI technology needs to be based on transparent models that
recognize and address the potential for prejudice.
If you intend to rely on
this technology, you should be able to explain to consumers how the outcome of
the AI technology is attained and how it is consistent with your responsible
lending obligations.
Continuous testing and monitoring of the technology are requisites to mitigate the likelihood of new biases emerging and to
appropriately redress such biases or inaccuracies in a timely manner.
Robust data privacy and security measures are paramount to the reliability and integrity of AI technologies. Consumers
should be able to trust that their data will be responsibly managed. For
example, it may be appropriate to anonymize personally identifiable information
terwijl ondernemen machine learning techniques or to otherwise include synthetic
data.
It is important to be cautious of data intrusions and develop controls to
identify and address such risks, such as restricting the control of algorithms.
Good governance in relation to AI technologies
is more likely to facilitate a smooth integration into the business. There
needs to be an appropriate allocation of human and financial resources, together with clear lines of responsibility and accountability. A decision framework for AI centered upon responsible lending obligations, together with formal training programs, will translate into trusted and responsible use of AI.
#AI regelgeving in de #UK: a path to good #bestuur and global leadership? https://t.co/4ul65KC5pd✍️@HuwJRoberts1 @jessRmorley @Floridi @RosariaTaddeo v @PolicyR @sallyeaves @nigewillson @mvollmer1 @Shi4Tech @enilev @SusanHayes_ @BetaMoroney @tlloydjones @danfiehn @Corix_JC pic.twitter.com/leUTrGvLxi
— BusinessIntelligence (@bimedotcom) 26 mei 2023
Ultimately, as we continue to transition to a
digitaal economy, it is pivotal that the use of AI technology in consumer finance focuses
op:
·
-
doorzichtigheid
so that the reasons for an assessment of unsuitability can be explained to
consumenten,
· - gecontroleerd
implementation so that data privacy and security can be maintained while also
ensuring any biases are corrected for outcomes that are consistent with
responsible lending obligations, and - accountability to encourage trust and confidence
in AI, including the decision-making behind such technology.
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- Bron: https://www.financemagnates.com//fintech/ais-role-in-responsible-lending-balancing-innovation-with-regulatory-compliance/
