“Research suggests artificial intelligence and machine learning can create measurable benefits including financial inclusion, yet we also know it can bake in and even exacerbate historical bias and exclusion.”

This article outlines the ways in which AI is being adopted by banks and describes the growing competitive pressure on these institutions to adopt AI technologies. Relevant use cases for AI include well-established applications like fraud detection as well as emerging uses like lending, where AI has potential to improve the accuracy and fairness of models, but poses more significant risks to consumers, firms, and investors.

“The New York fintech startup Harvest began offering a new credit score Thursday that uses artificial intelligence to take into account cash flow, spending habits and financial discipline alongside traditional scoring data to help lenders determine if a potential borrower is creditworthy.”

“Regulators are trying to send an important signal that they are aware that there are certain data that can be quite useful, especially in assessing credit risk for an underserved population.”

“Through Alternative lenders like LendingClub, Kabbage, and Upstart, and auto lenders like Ford Motor Credit use artificial intelligence every day in loan decisions…”

“Freddie Mac’s foray into artificial intelligence may be a significant turning point in broadening the use of the technology

“Melissa Koide, co-founder and CEO of FinRegLab, analyzed loan data from six lenders that use cash-flow data in their underwriting.”

“A Growing number of fintechs are becoming increasingly reliant on using alternative data like cash-flow analysis as a key underwriting tool.

“FinRegLab, a nonprofit that tests new technologies to foster an “inclusive financial marketplace” analyzed the data of six nonbank lender that use cash-flow data in their underwriting: Accion, Brigit, Kabbage, LendUp, Oportun, and Petal