Artificial intelligence (AI) has been a game-changer in various industries, including finance. In the lending industry, AI has revolutionized loan underwriting, making it faster, more efficient, and less prone to human error. However, the use of AI in loan underwriting has also raised concerns about social bias in algorithmic decision-making. This article explores the role of AI in loan underwriting and its impact on social bias.
Loan underwriting is the process of evaluating a borrower’s creditworthiness and determining the terms and conditions of a loan. Traditionally, loan underwriting has been a manual process that involves collecting and analyzing a vast amount of data, including credit history, income, debt-to-income ratio, and employment history.