Augmentation does not directly fight bias. The bias, intentional or not, comes from the process. The lending industry’s rigid workflow includes a series of documentation requirements and long, complex application procedures in English. This is intimidating to some in minority groups, discouraging them from participating in this mainstream financial undertaking. Our AI technology incorporates more than 100 languages and simplifies the loan application to a handful of simple questions, making the application process welcoming and inclusive.
Augmentation results are more exact, and AI improves the applicant’s experience and ease of use while reducing the costs to the consumer. We put safeguards in place to ensure the safety, accuracy, and reliability of financial decisions, giving people a new level of confidence. The results are dramatic with approval rates improving for certain ethnic groups by over 50% in some cases.
The other critical components are financial education and financial literacy, arguably the most critical area for long-term progress in closing the wealth gap. This must start with basic education in schools and be developed and funded by financial institutions. While progress so far has been disappointing, we are trying to solve it by having our AI program handle more direct questions and providing easy access to answers.
If we make access to financial resources easier and more equitable, we incentivize the home builders. Currently, many builders prefer to build high-end condominiums when banks offer them below-market interest rates. With several recent large-scale banking collapses and other national economic problems, many of these condominiums or apartments sit empty, yet many still need housing. The market has also allowed large investors to manipulate supply to artificially keep prices high with affordability out of reach.
In the meantime, banks are not pursuing low-income borrowers even though there are government programs designed specifically for them. While banks used to do a lot of these government loans, due to lending rule complexities, trained labor shortages, originated loans riddled with human error, and other problems, banks have avoided those products, restricting access to low-income financing.
