‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
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Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#2Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#3How does "simple AI" compare with an old fashioned small table lookup and a few "if" statements?
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#4This isn't surprising. Most 'AI' comes down to correlating a small number of variables (one or two) with a prediction target. The real benefit of any form of machine learning is detecting functional relationships between variables (ie, "when this AND NOT that OR this"). It's just that these relationships don't provide a real benefit in 99/100 real world use cases.
In the case of a loan, if the credit score is high they'll probably qualify. If it's low, they won't. All other variables are very minor in comparison to this one, which already encapsulates almost all of the relevant information. This is by far the most common situation for practical machine learning.
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#5I really wish we would stop calling this AI.
I understand startups need funding from VCs whose idea of technology is "BLOCKCHAIN AI" but, being interested in AI, the amount of spam I have to dig through to find actual AI work is insane.
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#6minimum_credit_score = Loan.joins(:borrower).where("loans.default = true").average("borrowers.credit_score")
if loan_applicant.credit_score > minimum_credit_score
decision = "approve"
decision = "reject"
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#7I had a look at LendingClub data and indeed unsexy RF and GB were pretty good. This shouldn't surprise us though, because what are the likely predictive features other than how much the person makes compared to what they want to borrow? Sure, there's what they intend to do with it, perhaps adjustments as well for how high their income is relative to where they live. All things that a model can help quantify, but nothing terribly surprising either.
What's left is a bit of judgement as to whether an applicant is temporarily showing wrong data, eg if they're a student starting their first job, what is their income, low or high? But basically it means the bulk of cases can be done by machine and the loan officer looks at some corner cases.
Note this person is also an actual person, i.e. capable of being held to account. I once worked with a prime broker who decided to waive the red flagged checks on a certain client in order to win the business. The guy blew up badly, the bank lost money, and he lost his job.
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#8How does "simple AI" compare with an old fashioned small table lookup and a few "if" statements?
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#9I really wish we would stop calling this AI. I understand startups need funding from VCs whose idea of technology is "BLOCKCHAIN AI" but, being interested in AI, the amount of spam I have to dig through to find actual AI work is insane.
What does actual AI work look like these days?
Re: ‘Simple’ AI can anticipate bank managers’ loan decisions to over 95% accuracy
#10If you want to impress me, tell me also the results of these:
- Performance against a fair dice - Performance against a group of humans trained to predict bank managers' loan decisions