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Temenos to use Explainable AI to support SMEs during COVID-19

Temenos has announced the launch of software-as-a-service (SaaS) Explainable AI (XAI) models, to help banks process digital onboarding and loan applications from SMEs and retail customers seeking financial relief in the COVID-19 crisis.

The XAI models, available in the cloud, are available for banks and credit unions worldwide and will speed up loans reaching small businesses at a time where cash flow has been significantly hit.

Hani Hagras, Chief Science Officer at Temenos, told IBS Intelligence: “Digitisation is going to increase the customer support of the banks and make sure that any decision which is going to be taken is going to be trustworthy, transparent and fair. We believe that this is the time that artificial intelligence and specifically explainable AI is not going to be seen as a future technology, it’s a future that we need today, to be able to minimise the pressure on our human workforce and making sure that we are able to keep our economy’s success.”

Hani Hagras, Chief Science Officer at Temenos

Hani Hagras, Chief Science Officer at Temenos

The models have already been tested in the US, where Temenos has helped banks speed up applications for the Paycheck Protection Program (PPP) – the US equivalent to the UK’s Coronavirus Business Interruption Loan Scheme (CBILS) – delivering $1.4 billion to 6,500 businesses in 13 days by one bank.

“We are now at a very critical point where people realise that digitisation is not an option, it is not a luxury, it’s a necessity. We don’t know how this is going to take, but we will be able to navigate through this crisis, by making sure that digitisation is implemented in different parts of the banking sector,” Hagras said.

The XAI models include SME Smart Decisioning, Urgent Relief Loan, Personalisation, Loan Pre-Approvals and Digital Financial Advice. They are available as part of the Temenos AI portfolio or can be integrated with Temenos Infinity, the digital omnichannel product.

Hagras noted that Temenos is currently working on applying its XAI technology to different parts of the banking sector, adding the technology to different banking software every day to allow better efficiency, risk, personalisation and digitisation.

XAI models help banks make urgent lending decisions that are transparent and explainable in human language to the end-users, customers and the regulators. The SME model, in particular, provides on average over 25 per cent greater accuracy compared to the risk score provided by leading credit bureaus, allowing banks to increase their pass rate by 20 per cent while keeping defaults under control.

These API-driven XAI models can be rolled out with the associated policy rules, allowing smart decision-making with minimal integration that can be deployed in the cloud in days or just a few weeks and can be used by any business user with minimum reliance on the IT department. However, Hagras stressed the urgency of acting now.

“We are trying to solve a problem which we are having right now. The problem is we have a big number of businesses which need cash to allow continuity. These companies are employing a lot of people all over the world, and you are speaking about families that are reliant on this cash to come through, from banks or government-supported schemes.

“Banks may be hesitant to apply such systems because they are worried they are going to lend more and run out of money. What we are offering is a system which can be deployed very fast to manage the twin pressure on banks, allowing more customers to be approved in the right way. This is going to shift a lot of pressure from the front line and human underwriter.”

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