ROLE OF Artificial intelligence AND DIGITAL LENDING
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary role of Artificial Intelligence in retail banking?
AI in retail banking is used to automate processes, enhance customer experience, detect fraud, enable personalized product recommendations, and improve credit underwriting through data-driven decision making.
What is 'Supervised Learning' in the context of AI-based credit risk models?
Model trained on labeled historical data to predict outcomes.
What does the term 'Digital Lending' refer to in the context of banking?
Digital lending refers to the use of digital channels and technology platforms to originate, process, disburse, and manage loans, significantly reducing turnaround time and paperwork compared to traditional lending.
What is 'Unsupervised Learning' and how is it used in banking fraud detection?
Detects hidden patterns in unlabeled data to flag anomalies.
Which RBI regulatory framework governs digital lending in India?
RBI's Digital Lending Guidelines (2022), based on the Working Group on Digital Lending report, govern digital lending by regulating Lending Service Providers (LSPs), loan disbursals directly to borrower accounts, and transparency in charges.
What is the RBI's definition of a 'Regulated Entity' (RE) in digital lending?
NBFC or bank licensed by RBI to extend digital credit.
What is a Lending Service Provider (LSP) as per RBI digital lending norms?
An LSP is an agent of a Regulated Entity (RE) such as a bank or NBFC that carries out one or more lender's functions or activities in customer acquisition, underwriting support, pricing support, disbursement, servicing, monitoring, and recovery.
What does 'First Loss Default Guarantee' (FLDG) mean in digital lending partnerships?
Third party guarantees to cover a portion of loan defaults.
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