UK regulators have recently warned banks about the use of artificial intelligence (AI) in loan applications.
Indeed, many banks are currently trying to automate more of their lending by using AI and advanced algorithms. By doing so, banks can then take a decisionregarding lending money based on the historical data of borrowers.
However, this system could be risky as machine learning (ML) could discriminate against minorities. Banks need to be completely sure that AI can approve loan applications without discriminating against minorities so as to be able to deploy the technology safely.
Using AI-based technology, banks believe that it could make lending decisions fairer for ethnic groups by removing the subjective and unfair judgments of humans. UK regulators are then working on analyzing this use of data in AI and ML models’ bias leading to discrimination and exclusion.