THE APPLICATION OF ARTIFICIAL INTELLIGENCE IN CREDIT RISK EVALUATION: OBSTACLES AND OPPORTUNITIES IN PATH TO FINANCIAL JUSTICE

Abstract

Despite global efforts, financial inclusion has been a persistent challenge as millions of people are excluded by traditional credit assessing systems due to their systemic biases and outdated assessment models. The introduction of Artificial Intelligence (AI) and Machine Learning (ML) in the financial sector offers impactful solutions to these inequalities. This article demonstrates the diverse potential of these technologies to completely transform the landscape of credit risk analysis. In this context, the use of diverse datasets and alternative data sources such as rental payments, utility bills, and employment history, enables AI-powered platforms to provide a complete picture of a person’s creditworthiness. When properly developed on the principles of equity, these algorithms can help in eliminating discriminatory patterns, pushing financial institutions toward a more equitable and inclusive credit system. Therefore, as technology continues to evolve, its growth can be strategically applied to promote the responsible use of AI, with machine learning serving as a tool for creating a fairer credit environment and advancing financial justice.