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ARTICLE · 09 SEPTEMBER 2022

Ethical Artificial Intelligence (AI): What Does It Mean For Digital Lenders?

Ikigai Law
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"In our early days at Upstart, we couldn't know for certain whether our model would be biased. It wasn't until loans were originated that we were able to demonstrate that our platform was fair.

IndiaTechnology
Ikigai Law
Ikigai Law
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The RBI wants digital lenders to follow ethical AI standards. But what does this mean in practice? In this article, we explore how digital lenders can adopt ethical AI standards before hardline regulation causes business disruption.

"In our early days at Upstart, we couldn't know for certain whether our model would be biased. It wasn't until loans were originated that we were able to demonstrate that our platform was fair. As an early-stage startup, this was a risk worth taking, but it's not a risk a large bank would have considered."

That's the CEO of Upstart testifying before the US Congress in 2019. Upstart was the first digital lender to receive a 'no-action letter' from the Consumer Finance Protection Bureau (CFPB). The letter enabled Upstart to undertake AI based credit underwriting without risking penalties under anti-discrimination laws. Upstart, as a part of the arrangement, also agreed to regularly share data about its AI model with CFPB. This

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