Reducing Bias in Credit Scoring with Generative AI

Credit scoring plays a crucial role in determining who gets access to credit and on what terms. Traditional credit scoring systems have been plagued by biases, limited data consideration, and scalability challenges. To overcome these issues, banks and other lenders are looking to adopt artificial intelligence (AI) to develop increasingly sophisticated models for scoring credit risk. Generative AI has the potential to revolutionize credit scoring with its ability to create synthetic data and understand intricate patterns, offering a more nuanced, adaptive, and predictive approach. The convergence of alternative data, artificial intelligence, and generative AI is reshaping the foundations of credit scoring, marking a pivotal moment in the financial industry.