What Early Industrial Revolutions Can Teach Us About Inclusive AI Adoption

Artificial Intelligence is rapidly changing how lenders approve customers, but it carries a significant risk of leaving certain shoppers behind. This report highlights that while AI can process applications faster, it often relies on historical data that may exclude people with thin credit files or non-traditional income. For retailers, this means that even if you have a 'high-tech' financing partner, your approval rates might not actually improve for the customers who need it most. The focus for operators should be on 'inclusive AI.' This means working with lending partners who use technology to expand the pool of eligible buyers rather than just automating rejections. When AI is used correctly, it can identify creditworthy customers that traditional scoring models miss. However, the industry is currently at a crossroads similar to the Industrial Revolution. If the technology isn't implemented with a focus on inclusion, it could create a wider gap between who gets approved and who gets turned away at the point of sale. Merchants should ask their financing providers how their AI models handle diverse customer backgrounds to ensure they aren't losing sales to invisible bias.

Source: Finextra — Lending

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