Artificial Intelligence and machine learning can be used by banks for enhancing the quality and quantum of corporate lending, according to KV Subramanian, Chief Economic Advisor.
He was speaking at the Future of the Work Summit organised by the Indian School of Business (ISB) in association with all.ai 2020 @PopulationScale Virtual Summit on Thursday.
“The opportunity for using AI in the financial sector is enormous. We are the fifth largest economy in the world, but private credit to GDP ratio is much lower than that of OECD economy at 52 per cent,’’ Subramanian said.
The AI and analytics can help in credit rating in corporate lending banks on a bigger scale, he said adding that there were patterns like poor disclosures and high percent of promoters’ share in pledging which can be tracked by AI for rating purposes.
Financial inclusion
Referring to over 40 crore financial inclusion accounts opened under Pradhan Mantri Jan Dhan Yojana, the CEA said the transaction data should be used to design credit as well as insurance products for the bottom of the pyramid.
Stating that the Covid-19 pandemic had, in many ways, accelerated the pace of adoption of AI showing the importance of the digital economy, he said: “It will be one of the positive aspects for which this year which will be remembered.’’
There was also significant scope for use of AI in health technology and agriculture. “The prospects for agri tech with the reforms being done is another big area where AI and machine learning can come together to enable better crop choice and diversification,” he pointed out.