Banks' machine learning models hit hard by pandemic

A Bank of England (BOE) survey has said that 35 per cent of banks reported a negative impact on machine learning (ML) model performance as a result of the pandemic.

The BOE attributed this to the pandemic creating a downturn that could not have been expected based on historical economic predictors.

The survey was conducted on UK banks in August 2020 to help understand the impact of the Covid-19 pandemic on their use of machine learning (ML) and data science (DS), which BOE said was part of their aim of supporting the safe and productive deployment of these technologies.

50 per cent of the banks surveyed reported an increase in the importance of ML and DS due to the pandemic and none of the banks believe that Covid-19 will reduce the importance of ML and DS for them.

However, only a third of banks said there was an increase in the number of planned or existing ML or DS projects.

In addition, 35 per cent of banks reported a ‘positive’ impact from Covid on the ML and DS technologies that support remote working among employees.

The Bank of England said: "We will continue to monitor these developments closely, along with other regulators like the Financial Conduct Authority, and take necessary steps to support the safe adoption of ML and DS in financial services.”

It added: "As Covid has resulted in changes in model performance, more continuous monitoring and validation is required to mitigate this risk, compared to static validation and testing methods."

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