“‘[T]he predictiveness of the cash flow scores and attributes was generally at least as strong as the traditional credit scores and credit bureau attributes,’ suggesting it’s a reliable complement to or replacement for traditional scoring.”

“Policymakers are actively building their understanding of the implications of AI/ML on model governance, fairness, explainability, and financial inclusion”

FinRegLab’s forthcoming research will help to inform the extent to which current laws and regulations are able to be satisfied in light of the emergence of more complex underwriting models, how well tools to develop and monitor those models perform in identifying effective ways to pursue greater inclusion and fairness, and considerations for policy and market developments that can support the safe, inclusive, and nondiscriminatory adoption of machine learning.

“AI adoption and data maturity within enterprises have seen significant growth in the past decade. With each passing day, new enterprise AI use cases come to life in more organizations and more industries.”

FinRegLab CEO Melissa Koide testified in the Task Force’s hearing on “Equitable Algorithms: How Human-Centered AI Can Address Systemic Racism and Racial Justice in Housing and Financial Services.”

“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.”

FinRegLab is working with researchers from Stanford Graduate School of Business to launch a ground-breaking evaluation of emerging market practices to improve the transparency and fairness of machine learning underwriting models in consumer credit.

“As we begin to emerge from the coronavirus pandemic, it will be more important than ever for lenders to have a more comprehensive and inclusive picture of how Americans have been managing their financial health — even in extraordinary circumstances — beyond what’s seen in the traditional credit bureau file alone.”

America’s credit system is under serious pressure as it faces the most sudden and severe downturn since the Great Depression. Our CEO Melissa Koide and former President and CEO of FICO Larry Rosenberger released an op-ed titled “Data needs to be wider-sourced and more inclusive” discussing using more financial data for lending, enhancing public policy guidance, and financial exclusion and the COVID-19 effect.

“Even though credit scores play a key role in determining who gets a mortgage and at what terms, the current credit system disadvantages a disproportionate share of low-income consumers who don’t have enough information in their credit files.”