South Korea’s central bank unveils system for verifying AI use in credit scoring

Credit bureaus will be supervised under this new verification system.

The Financial Services Commission (FSC) of South Korea introduced a new system to verify Artificial Intelligence (AI)-managed credit scoring model.

The new system comes along with a security guideline for the credible use of AI in the financial sector.

Beginning last 17 April, the verification system will oversee whether credit bureaus (CB) supervised credit data according to unique characteristics of AI and if companies utilise proper algorithms and variables in their credit scoring models. More importantly, if these models are statistically noteworthy.

Other than the aforementioned, the system is set to monitor if CBs are able to communicate with their clients regarding their credit scoring models and assessment results.

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The verification committee for personal credit scoring systems will utilise this verification system to assess CBs that provide credit scoring services to sole proprietors and use an AI-based credit scoring model within the current year.

Evaluations of the AI-based credit scoring models employed by CBs that offer personal credit scoring services to individuals will also occur at a later date.

The security guideline for using AI in financial industries is presently available on the financial security regtech portal (regtech.fsec.or.kr) and will be updated accordingly.

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