SCMP: Citi testing AI for corporate loans in Hong Kong

Citi is tapping artificial intelligence to analyze companies’ financial statements in the approval process for corporate loans – an unusual step because to date AI technology has concentrated on retail consumer loans.

Hong Kong was chosen for testing the bank-developed technology, which enables computers to scan and read hard copies of clients’ financial statements and automatically calculate indicators such as current ratio and leverage ratio, Anson Kwok, head of commercial bank at Citi Hong Kong, said in an interview with South China Morning Post. Bankers will use the results to decide whether and how much to lend to a company.

The trial began last month in the bank’s credit analysis department in Hong Kong, and has shortened the usual 10 to 15 days needed to approve a corporate loan by at least two days. Without the technology, employees have to key in and calculate the financial figures manually.

Citi has tested the technology on less than 10% all cases, and achieved 94% accuracy rate with the calculations, Kwok said. The bank will improve the accuracy and expand the use of the technology to all cases over the next six to eight months. The bank will not lay off staff because of the automation, which will allow employees to concentrate on higher value-added tasks.

“Financial analysis is after all only one part of the whole process. Humans still have to make all the judgments and decisions,” he said. Built by Citi’s in-house developers over the past year, the technology could eventually be applied to branches in China, Taiwan and Singapore once it can understand the Chinese language.

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