The Monetary Authority of Singapore (MAS) has announced an artificial intelligence (AI) powered minimum viable product to assist banks when issuing sustainability-linked loans (SLLs) in the real estate sector.
The tool facilitates setting performance targets for SLLs in real estate sector through peer and industry benchmarking.
"By harnessing data from government sources and conducting property-specific peer comparisons, MAS said the AI tool can help banks set key performance indicators (KPIs) judiciously and establish practical sustainability performance targets (SPTs), to enable a more accurate sustainability assessment
Banks can monitor against selected KPIs/SPTs to curb greenwashing by using buildings’ energy consumption data on a continuous basis at-source. It assists to compare borrowers’ current sustainability performance with the agreed SPTs
on a more timely basis.
"Risk assessment teams can swiftly identify discrepancies, ensure SLLs maintain their intended impact," MAS said.
Further, the product enhances processing sustainable finance transactions through autonomous documentation insights engine (ADIE).
This feature utilises natural language processing to support banks’ relationship managers, KYC teams, and finance units to extract sustainability insights from diverse sources.
The product is identified as "shift away from manual processing of disclosure documents, allowing for more informed decision-making based on comprehensive data extracted from borrower disclosures."
The MVP is an outcome of the first phase of Project NovA!, launched in 2021 as part of the National Artificial Intelligence (AI) Programme in finance.
In the next phase, MAS will collaborate with the Building and Construction Authority (BCA) to connect data and services from BCA’s Super Low Energy Building (SLEB) database.
This will help banks to identify prospective green building projects, achieve real-time SPTs monitoring, and accelerate green financing within the real estate sector.
MAS chief fintech officer Sopnendu Mohanty said NovA! will also extend its AI capabilities to support sustainable financing in other sectors such as power and manufacturing industries.
