Biased AI systems contributing to $17 billion gender credit gap in emerging markets: Study

According to a recent study, artificial intelligence systems that predict credit score of individuals, used by global financial technology companies in emerging markets, often discriminate against women. These fintech companies, prevalent in Indian markets too, exclude women from loans and other financial services.

The study was conducted by Women’s World Banking, which said that fintech companies in the emerging markets are missing out on an opportunity to reach 1 billion new customers and are contributing to the already existing “$17 billion gender credit gap”.

Titled “Algorithmic Bias, Financial Inclusion and Gender”, the study was aimed to decode the limitations of digital tools in opening up credit to women who are working or are entrepreneurs. The study highlighted the biases within AI systems and why they work against women.

For the purpose of the study, researchers at the Women’s World Banking studied data that digital credit providers collect to create algorithms. They conducted interviews with “thought leaders and practitioners across the digital credit space” – including data scientists, academics, entrepreneurs, app developers and coders.

It was found that these algorithms are often tilted in favour of men since the unconscious bias of those creating the systems seeps in. Another reason, the study said, could be because of the “incomplete, faulty, prejudicial” data sets that eventually inform the algorithm. Further, a major chunk of data sources are susceptible to “gender-based bias”, the report noted.

Finally, the study also found that those developing algorithms typically are based out of the US, male and are awarded high income. These characteristics aren’t representative of those who are using this algorithm.