Algorithmic Decision Making Methods for Fair Credit Scoring
The effectiveness of machine learning in evaluating the creditworthiness of loan applicants has been demonstrated for a long time. However, there is concern that the use of automated decision-making processes may result in unequal treatment of groups or individuals, potentially leading to discrimina...
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| Format: | Article |
| Language: | English |
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IEEE
2023-01-01
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| Series: | IEEE Access |
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| Online Access: | https://ieeexplore.ieee.org/document/10151887/ |
| _version_ | 1797798124739100672 |
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| author | Darie Moldovan |
| author_facet | Darie Moldovan |
| author_sort | Darie Moldovan |
| collection | DOAJ |
| description | The effectiveness of machine learning in evaluating the creditworthiness of loan applicants has been demonstrated for a long time. However, there is concern that the use of automated decision-making processes may result in unequal treatment of groups or individuals, potentially leading to discriminatory outcomes. This paper seeks to address this issue by evaluating the effectiveness of 12 leading bias mitigation methods across 5 different fairness metrics, as well as assessing their accuracy and potential profitability for financial institutions. Through our analysis, we have identified the challenges associated with achieving fairness while maintaining accuracy and profitabiliy, and have highlighted both the most successful and least successful mitigation methods. Ultimately, our research serves to bridge the gap between experimental machine learning and its practical applications in the finance industry. |
| first_indexed | 2024-03-13T03:58:49Z |
| format | Article |
| id | doaj.art-36aa34698c914dd98801ce0baa90cf21 |
| institution | Directory Open Access Journal |
| issn | 2169-3536 |
| language | English |
| last_indexed | 2024-03-13T03:58:49Z |
| publishDate | 2023-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | IEEE Access |
| spelling | doaj.art-36aa34698c914dd98801ce0baa90cf212023-06-21T23:00:14ZengIEEEIEEE Access2169-35362023-01-0111597295974310.1109/ACCESS.2023.328601810151887Algorithmic Decision Making Methods for Fair Credit ScoringDarie Moldovan0https://orcid.org/0000-0001-7268-0453Faculty of Economics and Business Administration, Babeş-Bolyai University, Cluj-Napoca, RomaniaThe effectiveness of machine learning in evaluating the creditworthiness of loan applicants has been demonstrated for a long time. However, there is concern that the use of automated decision-making processes may result in unequal treatment of groups or individuals, potentially leading to discriminatory outcomes. This paper seeks to address this issue by evaluating the effectiveness of 12 leading bias mitigation methods across 5 different fairness metrics, as well as assessing their accuracy and potential profitability for financial institutions. Through our analysis, we have identified the challenges associated with achieving fairness while maintaining accuracy and profitabiliy, and have highlighted both the most successful and least successful mitigation methods. Ultimately, our research serves to bridge the gap between experimental machine learning and its practical applications in the finance industry.https://ieeexplore.ieee.org/document/10151887/Bias mitigationcredit scoringalgorithmic decisionfair AI |
| spellingShingle | Darie Moldovan Algorithmic Decision Making Methods for Fair Credit Scoring IEEE Access Bias mitigation credit scoring algorithmic decision fair AI |
| title | Algorithmic Decision Making Methods for Fair Credit Scoring |
| title_full | Algorithmic Decision Making Methods for Fair Credit Scoring |
| title_fullStr | Algorithmic Decision Making Methods for Fair Credit Scoring |
| title_full_unstemmed | Algorithmic Decision Making Methods for Fair Credit Scoring |
| title_short | Algorithmic Decision Making Methods for Fair Credit Scoring |
| title_sort | algorithmic decision making methods for fair credit scoring |
| topic | Bias mitigation credit scoring algorithmic decision fair AI |
| url | https://ieeexplore.ieee.org/document/10151887/ |
| work_keys_str_mv | AT dariemoldovan algorithmicdecisionmakingmethodsforfaircreditscoring |