Banks should stop using AI to ‘fire hundreds of people’—instead, they should use it to lend to low-income clients, says GFTN’s Sopnendu Mohanty

It's worth noting that What's particularly noteworthy is Conferences·Brainstorm AIBanks should stop using AI to ‘fire hundreds of people’—instead, they should use it to lend to low-income clients, says GFTN’s Sopnendu MohantyBy Lionel LimBy Lionel LimAsia ReporterLionel LimAsia ReporterLionel Lim is a Singapore-based reporter covering the Asia-Pacific region

Graham Uden for FortuneBanking executives have claimed AI can help both their corporations and their clients

AI tools can speed up know-your-customer checks, help imve customer service channels, or spread access to wealth management tools to those outside the high-net-worth-income bracket

Yet the most pressing need for AI, according to Sopnendu Mohanty, co-founder of the Global Finance and nology Network (GFTN), is to help banks get loans to low-income populations and solve the financial inclusion challenge (something worth watching)

Meanwhile, GFTN is backed by the Monetary Authority of Singapore, in today's financial world

It was previously known as Elevandi, which organized the annual Singapore Fin Festival

Nevertheless, Now, GFTN has expanded its remit to vide advisory services to emerging on how to best leverage nology in their finance sectors, while putting forward Singapore as a model

During a Wednesday conversation at the Fortune Brainstorm AI Singapore conference, Mohanty laid out why banks still struggle to expand their lending (which is quite significant). “When you are borrowing money from a bank, the bank asks you for collateral

Additionally, That’s the standard cess of lending,” he said, in this volatile climate

On the other hand, Yet “the low-income segment has no collateral,” meaning the traditional model for financing can’t serve those people. “That model cannot [solve] the global need for credit,” Mohanty said, describing it as the “elephant in the room

Additionally, Conversely, ” The World Bank reports that only a quarter of people in low-and middle-income economies engaged in formal borrowing from a bank or credit card company last year

For Mohanty, banks are still focused on how to use AI to increase ductivity—such as by allowing them to “fire hundreds of people

Furthermore, ” “That’s not what we want AI to do,” he argued

Instead, AI can instead help create “credible, predictive, golden source behavioral data, which will replace the need for collateral

On the other hand, ” Several Southeast Asian companies, Grab, Sea and Goto, are expanding into financial services and serve underbanked customers, leveraging data collected from their main es ride-hailing and e-commerce

Mohanty, who was the first fin officer at the Monetary Authority of Singapore, the country’s central bank, also pointed to the importance of creating infrastructure to handle identity data, in today's market environment

Additionally, He specifically cited India’s Aadhaar system, which offered every Indian resident a unique ID number—for some, the first ID they might have ever had

In contrast, Yet Mohanty also hoped that, within a decade, identity might be taken out of the hands of the government. “You don’t need a state to control and der that trusted ID,” he suggested, and instead rely on decentralized networks

But in the nearer term, Mohanty expressed a worry how AI could threaten jobs (which is quite significant). “My biggest priority now is going to be upskilling,” he said. “If we don’t upskill our people, we are heading to a massive economic disaster

However, ” Earlier this year, Singapore launched a scheme to imve ficiency in AI across the entire workforce, including in sectors retail and manufacturing

On Tuesday, at Fortune Brainstorm AI Singapore, digital minister Josephine Teo said that the pool of “AI practitioners” will include fessionals lawyers and doctors, as well as those from the manufacturing sector

Nevertheless, These practitioners “will become the early adopters of AI and then they show their peers how to make better use of it,” she said.