“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.

“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.”

“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.”

A variety of technology companies have adapted software and platforms to support emergency small business lending. This article explores the various ways in which fintechs have helped banks implement the Paycheck Protection Program, including allow banks to automate application review and underwriting, collecting and verifying documents, and transmitting information to the Small Business Administration.​

This article addresses risks related to the use of artificial intelligence and machine learning models that were trained on and use data that overweight benign credit conditions.

“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…”