AI for Promoting Financial Inclusion

Abstract

The new and transformative wave of artificial Intelligence (AI) is no longer news to many, as it is rapidly changing every human sector, and the financial environment is not excluded. Its transformative superpower offers opportunities to address financial inclusion. Based on a rapid literature review, this study examines the role that AI technologies play in bridging the gap between traditional financial ecosystems and financially excluded populations in countries around the world, as well as in developing countries. Using the opportunities presented by natural language processing (NLP), machine learning, predictive analytics, and data analytics, these AI technologies can assist financial institutions to develop a customised financial product, credit scoring process, and system, real-time risk assessment, and assessment for people with limited (little) or no credit history. In addition, AI-driven mobile banking apps, platforms, and chatbots help improve financial knowledge, literacy, skills, and accessibility for those in rural and low-income communities. The potential of AI technologies to promote financial inclusion is quite large and is increasing. However, some challenges include ethical concerns, algorithm bias, data privacy, and a lack of a regulatory framework and process. This chapter sets a conceptual framework for considerations to be made with a view to promoting an ethical and responsible use of AI technologies towards financial inclusion. The model set is built on AI innovation and critical considerations towards promoting financial inclusion, as well as driving economic development, empowerment, and digital finance.