AI can outperform human credit decisions by 2024 - survey

AI can outperform human credit decisions by 2024 - survey
22.01.2019 05:27 am

AI can outperform human credit decisions by 2024 - survey

Artificial Intelligence

Artificial intelligence (AI) will produce more accurate, reliable and transparent credit decisions than human-based systems within five years, according to capital markets professionals surveyed by Intertrust.

Intertrust, a global leader in providing expert administrative services to clients operating and investing in the international business environment, surveyed over 500 capital markets executives to identify the impact that disruptive technology is having on jobs and skills. Of these, one in six (14%) believe that AI has already surpassed human-based systems.

In recent years, the data sources used in credit decision-making have become increasingly broad and non-traditional, now including social media activity, retail spending habits and even political inclinations.

The research revealed a division in the industry about the impact of using such data on the quality of decision-making. While a third (30%) of respondents believe that using a broader range of data reduces subjectivity, a fifth (18%) think AI exacerbates existing prejudices in the credit decision-making process.

Intertrust’s study also highlighted privacy concerns regarding expanded data sets. Although almost a third (31%) of respondents think that the use of non-traditional data such as and personalised algorithms leads to better credit decisions than just relying on detached data, 36% believe tighter legislation is required to protect borrowers’ rights when they apply for funding and to restrict the information included in the assessment. A fifth (20%) suggested that the use of non-traditional data has already overstepped the ethical line and needs to be better controlled.

Cliff Pearce, Global Head of Capital Markets at Intertrust said, “The use of AI in credit decision-making has become increasingly commonplace, with the potential to make quicker more accurate credit decisions based on an expanded set of available data.

“A challenge in this area is that AI systems are only as good as the information programmed into them. For example, while a prospect may look like a poor risk at first sight, there may be extenuating circumstances overlooked by the system that a human would have noted. Put simply, AI underlines the contrast between the prime and more specialised non-conforming lending markets.” 

Related News

Numerix Launches New Artificial Intelligence Solution to Address $200 Trillion of Financial Contracts Affected by the Global LIBOR Transition

Numerix, the leader in risk technology, has partnered with NextGen Strategic Advisors, an innovative Financial Institutions management consulting firm, to introduce Numerix... Read more »

Kooomo launches state-of-the-art AI Chatbot

Following the launch of its new Help Centre, digital eCommerce solutions specialist, ... Read more »

Sidetrade Joins the Ranks of Euronext’s Rising Tech Stars

Sidetrade (Euronext Growth: ALBFR.PA), the artificial intelligence platform dedicated to accelerating company revenue and cashflow, has earned the European Rising... Read more »

QuantaVerse offers AI-powered country code derivation to enable financial institutions to experience the potential of automated entity resolution

QuantaVerse, which uses AI and machine learning to automate financial crime investigation processes, is now offering the country code... Read more »

Ethically accelerating businesses with the use of Artificial Intelligence

Businesses have an opportunity to discover the opportunities and challenges as well as benefits of Artificial Intelligence in a free Immersive Tech Session on Monday 6th of... Read more »

FICO Awarded 13 New Patents for Responsible AI, Fraud and Decision Management

Silicon Valley analytic software firm FICO has been awarded 13 new patents related to fraud, artificial intelligence (AI) and decision management. In total, FICO currently... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel