The "black-box" conundrum is one of the biggest roadblocks preventing banks from executing their artificial intelligence (AI) strategies. It's easy to see why: Picture a large bank known for its technology prowess designing a new neural network model that predicts creditworthiness among the underserved community more accurately than any other algorithm in the marketplace. This model processes dozens of variables as inputs, including never-before-used alternative data. The developers are thrilled, senior management is happy that they can expand their services to the underserved market, and business executives believe they now have a competitive differentiator. But there is one pesky problem: The developers who built the model cannot explain how it arrives at the credit outcomes, let alone identify which factors had the biggest influence on them.
May-20-2022, 15:40:38 GMT