Human-AI solutions offered to Philippines banks

September 6, 2024 | 12:00am

MANILA, Philippines — Human Managed, a data platform for businesses and financial institutions, said Philippine banks should adopt collective intelligence and federated learning as critical strategies to drive innovation.

In an interview with The STAR, Human Managed CEO Karen Kim said collective intelligence and federated learning could enable banks to personalize customer experiences in risk assessment as well as fraud and money laundering management.

“The federated learning collaboration can improve various scoring models by incorporating diverse data from multiple institutions, leading to more accurate assessments of a borrower’s risk profile,” she said.

Collective intelligence is a concept that pools insights from various individuals or groups to optimize decision-making.

Meanwhile, federated learning is a machine learning technique that enables banks to collaboratively train a model while keeping data private and secure.

“When multiple banks share anonymized and privacy-protected use cases on fraud, threat, risk behavior, the entire industry benefits from the generated collective intelligence,” Kim said.

She said knowledge sharing would provide insights into industry benchmarks and best practices. This would further enable banks to understand customer risk profiles and other relevant products.

Kim said one of the best uses of federated learning in the banking sector is risk assessment, as banks have limited data on risk profiles to cater to an individual or small business. This affects the unbanked population, especially in rural areas.

“With federated learning, banks can collaborate with other finance institutions and e-commerce companies to build their AI models on a much wider range of data points. The raw data remains private, but she said that intelligence from multiple participants via federated learning helps build a more robust risk assessment model,” she said.

Kim said banks of all sizes in the Philippines, including the smaller ones, can adopt these concepts even though federated learning is still at a “nascent stage” in the country.