Mitigating AI bias in financial decision-making: A DEI perspective
1 Department of Business Analytics, University of West Georgia, USA.
2 UNC Kenan-Flagler Business School, Chapel Hill, NC, USA.
Review Article
World Journal of Advanced Research and Reviews, 2024, 24(03), 1822-1838
Publication history:
Received on 10 November 2024; revised on 16 December 2024; accepted on 18 December 2024
Abstract:
The growing reliance on Artificial Intelligence (AI) in financial decision-making offers significant potential for increased efficiency and innovation but also raises critical concerns about perpetuating existing inequities. As financial services adopt AI for tasks like credit scoring, loan approvals, and investment analysis, the risk of algorithmic bias impacting marginalized groups has garnered significant attention. Biases in training data, model design, and deployment processes can lead to discriminatory outcomes, undermining efforts to promote Diversity, Equity, and Inclusion (DEI). Addressing these challenges requires a comprehensive framework for aligning AI systems with DEI principles. This study analyses the risks of AI reinforcing systemic inequities in financial decision-making and identifies key strategies for mitigating these biases. Transparent algorithmic processes are essential to enable stakeholders to understand decision-making logic and detect potential biases. Accountability mechanisms, such as regular audits and independent evaluations, ensure that AI systems comply with ethical standards and DEI objectives. Inclusivity must be prioritized in both data collection and model design, ensuring diverse representation to reduce inherent biases. By implementing these strategies, financial institutions can leverage AI to drive equitable decision-making, fostering trust among stakeholders while addressing regulatory and societal demands. This paper proposes a roadmap for developing and deploying bias-mitigating AI systems in financial services, with a focus on creating fair, inclusive, and accountable models. Through case studies and best practices, it highlights actionable solutions to bridge the gap between technological innovation and ethical imperatives, ensuring AI serves as a tool for equity and inclusion rather than a perpetuator of inequality.
Keywords:
Artificial Intelligence (AI); Algorithmic Bias; Financial Decision-Making; Diversity; Equity; Inclusion (DEI); Transparency; Accountability
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Copyright © 2024 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0