High street banks are exploring ways to automate more of their lending, including the use of AI and more advanced algorithms, to decide who to lend to based on historical data held on different types of borrowers, who can be grouped by categories such as postcodes and employment profiles.
UK financial regulators have warned banks looking to use AI to approve loan applications that they can only deploy the technology if they can prove it will not worsen discrimination against minorities, who already struggle to borrow.
Banks believe using machine learning techniques to make lending decisions could reduce discrimination against ethnic groups who have historically struggled to access reasonably priced loans. They feel AI would not make the same subjective and unfair judgments as humans.
In their submission on regulating digital finance, the EU’s financial regulators called on lawmakers to consider analysing the use of data in AI/Machine Learning models and potential bias leading to discrimination and exclusion.
Banks in the UK were cleared of racism in loan decisions by a government review almost a decade ago but were still found to be lending less to ethnic minorities.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now
We welcome comments that add value to the discussion. We attempt to block comments that use offensive language or appear to be spam, and our editors frequently review the comments to ensure they are appropriate. If you see a comment that you believe is inappropriate to the discussion, you can bring it to our attention by using the report abuse links. As the comments are written and submitted by visitors of the The Paypers website, they in no way represent the opinion of The Paypers.