Instruction: Discuss the potential benefits and ethical risks of using AI to predict financial behavior for credit scoring purposes.
Context: This question requires the candidate to balance the financial industry's interest in innovative risk assessment methods with ethical considerations such as fairness, privacy, and transparency.
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The way I'd explain it in an interview is this: Behavioral prediction in credit scoring is ethically risky because it can expand prediction power in ways that are hard for consumers to understand or contest. If the model uses behavioral proxies that correlate...