Smarter Better Faster: The next generation of risk modelling with Machine Learning - Financial Services UK

Alan Turing's seminal 1950 paper "Computing Machinery and Intelligence", posed the question "Can machines think?" Since then machine learning (ML) has found its way into numerous processes; seeking to simplify our lives by making processes smarter, better and faster. Financial risk management is an industry that is rife with opportunities for ML to disrupt in the coming years, one of the most obvious areas being credit scoring. In this blog we explore some of the main findings of the recently published Bank of England survey on ML, this is followed by our views on the challenges and potential solutions of implementing ML within a credit risk scoring framework. When we talk about the rise of ML in credit risk, we quite often forget that one of the earliest real life use cases for ML was within this very industry.