Democratic presidential candidate and current mayor of South Bend, Indiana Pete Buttigieg expressed his apprehensions about implementing artificial intelligence (AI) technology in credit scoring, Bloomberg reports. Buttigieg is worried that the existing degree of inequality in credit scoring may be aggravated by using big data and algorithms.
During the Black Economic Alliance Forum held in Charleston, South Carolina, Buttigieg said that automating the process may lead to the system learning structures, systems, assumptions and attitudes that have racial implications. He adds that this may perpetuate bias against ethnic minorities, especially African Americans.
However, the Democrat believes that this new tech can also help expose racial bias currently existing in the credit scoring system. According to him, AI can give a bird’s-eye view of the process, allowing for the identification of factors that enable bias.
Buttigieg emphasized that the tech-based scoring system should not automatically categorize African American businessmen as having high credit risks. This also applies to entrepreneurs whose businesses cater to black customers.
Aside from his worries over AI-based credit scoring, he also stated that the government should build community development financial institutions (CDFI). He believed that this can encourage a ‘culture of entrepreneurship.’ He also said that it is important to urge the biggest financial firms to invest in these CDFIs.
South Carolina, where the Black Economic Alliance Forum was held, is considered as the first primary state with a Democratic electorate that is majorly black.
Meanwhile, Buttigieg’s track record includes working as a consultant at McKinsey & Co. Inc., a management consulting company, before serving as a public official. He has had difficulty in getting support from African American voters, only gaining 1% in the racial group out of 8% in the most recent Economist and YouGov poll.