Loan Zone: Artificial intelligence in lending

Automation promises faster, informed decisions on business loans—and the potential for being able to approve a wider range of borrowers.

“Can machines think?” Alan Turing posed this question at the outset of his 1950 paper “Computing Machinery and Intelligence,” a seminal piece of literature in the field of artificial intelligence. Turing wanted to know whether computers would eventually imitate humans’ responses so well that people wouldn’t be able to tell whether they were interacting with a human or a machine.

Decades later, in an era when computers are capable of recognizing and responding to human speech, processing images and even driving cars, the question for data scientists and engineers has become “What else can machines think about?”

In my previous position at OnDeck Capital, I became particularly interested in how AI could be used to rethink the financial industry. OnDeck is a lending company that provides working capital and loans to small businesses. My work there provided my first exposure to computers making decisions that were previously reserved for humans.

Before this begins to sound too much like sci-fi, let me clarify that the work we were doing at the time—and the mission of the banks and fintech companies we work with at Yhat—is still created and maintained by humans. This work is also subject to the same financial regulations as lending decisions made by humans, like the Fair Credit Reporting and Equal Credit Opportunity Acts. The algorithms generated by these computer systems do not replace human logic, ethics or creativity but augment and automate it.


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