Artificial Intelligence may be pushing the limits of decision making. Banks that want to use AI still have to adhere to several industry specific rules primarily around transparency. Other industries like tech don't have the same hurdles to climb when it comes to regulation around there AI efforts. Rules for banks were put in place to protect poor and minority consumers, including laws which are supposed to ensure the equal treatment of customers. Are black people going to fall further behind in getting approved for loans and credit cards if banks start using AI for lending decisions?
As digital lending continues to grow in size, companies are looking for ways to make their services more efficient and profitable to both lenders and borrowers. And they believe artificial intelligence and big data hold the key to the future of loans. Lenders traditionally make decisions based on a loan applicant's credit score, a three-digit number obtained from credit bureaus such as Experian and Equifax. Credit scores are calculated from data such as payment history, credit history length and credit line amounts. They're used to determine how likely applicants are to repay their debts and to calculate the interest rate of loans.
So, how AI can be used to re-think the lending industry? AI goes much beyond the binary world of lend-don't lend decisions. It can improve customer personalization, identify patterns and connections that humans can't, and answer questions in real-time. Historically, lenders used to make go-no go loan decisions based on a loan applicant's credit score. Digital lending platforms believe that this kind of information does not paint a complete picture of a loan applicant's creditworthiness.
The BBC has been blasted for rejecting work applicants because they are white. It advertised two 36,000 junior scriptwriting roles for shows like Holby City, but said they were only for people from "ethnic minority backgrounds". One outraged job-hunter said: "It's racial discrimination and just wrong. "If you applied for a position and got a reply saying it was only open to white applicants you'd quite rightly not be happy. The Sun can reveal the Beeb is running four recruitment schemes open only to black, Asian or ethnic minorities.
"I grew up insecure about my name," says Rawan Mohamed, a British-Muslim of Sudanese heritage. She says the best way she found to manage it was to change it. The 22-year-old from Manchester, who has just graduated from Leeds University, says the success of her job applications more than doubled since she changed her name to Rowan as a teenager. "I think it confuses people," she says. "Interviewers usually think I'm mixed-race or Irish and don't expect to see a young black girl walk through the door."