The Biden administration is setting the tone for new rules governing businesses' use of artificial intelligence, including in lending. Some call it a "toothless tiger," while others worry that it goes too far.

AI, ML, predictive analytics and complex algorithms can help lenders expand credit to more consumers, but some critics feel the technology can feed into existing discrimination and bias that applicants face.

The path to artificial intelligence implementation can be costly and arduous. Are financial leaders reaping the benefits?

Banks and fintechs wonder if regulators are getting more comfortable with machine learning-based ways of assessing credit, or if agency oversight will mean a crackdown. 

It’s tempting to add yet another screen or an external piece of software, but that’s not always the quickest path to success, writes a director at InRule Technology.

The Consumer Financial Protection Bureau is examining whether artificial intelligence discriminates against minorities and other applicants. But GreenState Credit Union in Iowa says the technology can be harnessed to make lending fairer in underserved communities.

Banks and companies that use artificial intelligence to make loans agree with regulators that it should be tested for fairness. But they also say traditional loans could be just as biased.

Rohit Chopra, the director of the Consumer Financial Protection Bureau, has cautioned banks, credit unions and fintechs about fair-lending violations that may stem from reliance on artificial intelligence. His comments threaten to discourage financial firms from using the technology to crunch nontraditional data about borrowers, experts say.

The fintech’s algorithms are programmed like "Tesla’s self-driving cars," according to the company’s CEO.

Financial institutions said they needed more time to weigh in on issues such as how they use artificial intelligence for fraud prevention and underwriting.

Artificial intelligence (AI) is increasingly gaining ground in a number of areas of banking and financial services. However, there is growing evidence that AI systems are biased.

By tracking remote workers with customizable benchmarks, Grind Analytics’ new software tool increased efficiency for one of its first users, OneTrust Home Loans.

The software will aim to take advantage of the anticipated volume growth in this particular type of origination.

Federal Reserve Gov. Lael Brainard said regulators are seeking to "understand the potential benefits and risks" from utilizing artificial intelligence in the financial services sector.

If you are underbanked you probably have limited access to mainstream financial services normally offered by retail banks. Many fintech startups offer alternative ways to measure credit risk, and assert that their products can help extend financial services to consumers who have not been well-served by traditional banks.

While it's no silver bullet, automation with careful monitoring and testing can help lenders eliminate racial bias toward potential borrowers, the developers say.

The move follows a report last year that the government-sponsored enterprise was looking into working with the provider of artificial intelligence-driven credit-risk models.

Former MBA chair and owner, president, and CEO of Union Home Mortgage, Bill Cosgrove, provides a peek into his pandemic playbook and offers advice to smaller lenders on how to stay competitive amid a rash of companies going public.