Dave Girouard, the chief executive of the AI lending platform Upstart Holdings Inc. UPST, -2.51% in Silicon Valley, understood the worry. "The concern that the use of AI in credit decisioning could replicate or even amplify human bias is well-founded," he said in his testimony at the hearing. But Girouard, who co-founded Upstart in 2012, also said he had created the San Mateo, Calif.-based company to broaden access to affordable credit through "modern technology and data science." And he took aim at the shortcomings he sees in traditional credit scoring. The FICO score, introduced in 1989, has become "the default way banks judge a loan applicant," Girouard said in his testimony.

Anyone still doubting whether fintech is disrupting Chicago's financial services industry only needs to look at a handful of recent partnerships to see that innovative technology is necessary for large enterprises to stay competitive in an ever-evolving market, lest they become obsolete. Take the following inked deals, for example. Amount -- a digital credit solution provider -- partnered with TD Bank and HSBC last year to help the two large institutions streamline their personal loan services, reflecting a marketplace that grew by $21 billion in 2018 to a record high of $138 billion, according to credit reporting agency TransUnion. Meanwhile, AI-powered financial compliance solution Ascent recently partnered with global information tech company IBM to help banks and other financial entities meet changing regulatory requirements. These types of partnerships help banks and financial institutions react to market changes and prepare for the future of finance; namely, by giving consumers more of the seamless user experiences they're used to and leveraging AI to streamline manual regulatory processes, saving valuable time and resources.

We live in a renaissance, a historic technological age. Literally, every aspect of our lives is touched in some way by the computer revolution, the growth of artificial intelligence (AI), advanced business applications, and the Internet of Things (IoT). Everything from our daily jogs and morning meditation sessions, to meal planning and drives to the office, are part of the new connected society. Like it or not, believe it or not, the tech epoch is here to stay. Though the concept is scary for some, there are several very positive things that have already sprung from the societal metamorphosis.

The burgeoning online lending segment in India is also giving rise to a new kind of challenge on sourcing credit score data. To solve this problem, several fintech companies are using Artificial Intelligence (AI) and Machine Learning (ML) to create alternate lending data score for more than 80 per cent of the Indian population who have no credit scores. From the place where people live to the restaurants they visit to their digital footprints on social media, ML captures it all. Mohan Yadav, a 25-year-old software professional in Mumbai, was denied a ₹25,000 personal loan by his bank since he had no credit history. After a quick search online, he applied for a loan from Cashe, a Mumbai-based fintech company that offers personal loans to salaried professionals who have just entered the workforce.

Chqbook is a Gurgaon based financial technology start-up that allows customers to explore, compare, book and get personal finance products such as home loans, personal loans, and credit cards. Chqbook is a marketplace for financial products -- that brings suppliers (banks and NBFC's), distributors, and customers onto a single platform -- both online and offline. The startup currently offers 23 options from the country's leading banks & NBFC's for home loans. It also offers customers a choice of 16 institutions for personal loans and has over 35 credit cards. Chqbook is currently operational in 14 cities for home loans and personal loans through its 400 plus verified experts on its platform.

While most traditional banks and credit unions realize the inefficiency and bad consumer experience created by legacy lending solutions, few have automated more than the application step. Even in those cases, the process is not simple or fast, resulting in prospect borrower abandonment. Subscribe to The Financial Brand via email for FREE!Over the past few years, more traditional and non-traditional lenders have developed improved digital lending processes. This includes investments in online applications and borrower portals, as well as new digital tools to improve borrower acquisition and servicing. For the most part, the digital transformation has focused on automating previous paper-based processes as opposed to significantly improving the borrower experience.

The banking industry in India has traditionally funded corporate loans to those corporations who could navigate their labyrinthine processes. This paradigm, however, is beginning to get disrupted, thanks to the advent of consumer lending startups, armed with complex algorithms and machine learning software to replace antiquated credit rating systems. RBI has identified 12 accounts with 25 percent (Rs 1.75 lakh crore) of bank NPAs for insolvency; now, corporates are selling their assets which never happened earlier; these are amongst the top 500 exposures in the banking system. The NPAs have been attributed to cyclicality of industry sectors and that entrepreneurs shouldn't be hounded. However, siphoning of funds and CBI investigations like the one being done for Vijay Mallya's Kingfisher Airlines paves the way for banks to shift focus to retail lending.

Where can you find an unbiased, personal finance app that serves purely in your interests? An app that analyzes your bank accounts, your recurring subscriptions and your spending habits to figure out how to save you money? Clarity Money is cofounded by Adam Dell, Michael Dell's brother, and backed by some heavy hitters including the Soros Fund, Maveron Partners and Bessemer Venture Capital. Once you download the app and link your bank accounts, Clarity Money promises to analyze your accounts and make suggestions to save you money. It uses data science and machine learning to negotiate bills, create a savings account, find lower interest rate credit cards and/or personal loans, transfer money between accounts, and deliver actionable insights based on your spending patterns, credit score and credit cards.