The Risks And Rewards of Artificial Intelligence For Lenders

BB: While there are caveats, the rewards significantly outweigh the risks. There are many underserved individuals, businesses, and micro-borrowers with little or no credit that could benefit from alternative data. If an applicant doesn't have good credit, or any credit at all, lenders can use MLAI techniques to paint a richer portrait about the borrower's reliability using nontraditional factors like e-commerce histories, phone bills, and purchasing records. MLAI can open up the credit market, measure patterns, and fill in the data gaps, giving lenders a more holistic view of an applicant. Alternative data doesn't have to be "creepy" data and doesn't have to be social media data.