Advancing the Ethical Use of AI in Financial Services: A Conversation with Brad Blower
Introduction
Our special guest is Brad Blower, Principal and Founder of Inclusive-Partners LLC, and author of a recent blog post titled “The CFPB Has An Opportunity to Greatly Advance the Ethical and Non-Discriminatory Use of AI in Financial Services and Should Take It.” In our discussion, we delve into the lack of clear guidance from the Consumer Financial Protection Bureau (CFPB) on the non-discriminatory use of artificial intelligence (AI) in financial services. We also explore the reasons behind the CFPB’s hesitance to provide more specific guidance in this area.
The Need for Clear Guidance
Blower highlights the importance of clear guidelines from the CFPB to ensure that AI is used ethically and without discrimination in the financial services industry. Without such guidance, there is a risk that AI algorithms could inadvertently perpetuate biases and inequalities, leading to unfair treatment of consumers.
We discuss the specific areas where additional guidance from the CFPB could be beneficial, such as ensuring transparency in AI decision-making processes and promoting the use of diverse and representative data sets. Blower also outlines steps that the CFPB could take to address the lack of clarity and promote the ethical use of AI in financial services.
Industry Developments
In the absence of clear guidance from the CFPB, Blower sheds light on the direction that the industry is taking to ensure fairness in AI applications while maintaining the accuracy of underwriting models. Many companies are proactively implementing internal policies and controls to mitigate biases in their AI systems and promote fairness in decision-making.
Future Outlook
We conclude our conversation with a discussion on the likely actions that the CFPB will take in the coming year to address concerns around fairness in AI. Blower emphasizes the need for ongoing collaboration between regulators, industry stakeholders, and consumer advocates to establish a framework that promotes the ethical and non-discriminatory use of AI in financial services.
Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the informative conversation with Brad Blower, providing valuable insights into the evolving landscape of AI regulation in the financial services industry.
