AI Ethics: Mitigating Bias in Automated Lending and Hiring

AI Ethics: Mitigating Bias in Automated Lending and Hiring

K
Kaprin Team
Jan 16, 20269 min read

AI models are mirrors. They reflect the data they are trained on. If you train a model on 50 years of hiring data from the tech industry, it will learn that "Software Engineer" correlates strongly with "Male, named John."

If you deploy this model blindly to screen resumes, it will penalize female candidates. This is not "Malice"; it is "Math." But in the eyes of the EEOC (and the public), it is discrimination.

Algorithmic Auditing (Red Teaming)

Responsible AI deployment requires a new step in the QA process: Adversarial Testing.

Before an HR bot goes live, we "attack" it. We feed it 1,000 pairs of identical resumes where only the name key is changed (e.g., "John" vs. "Mary", "Jamal" vs. "Greg"). If the model's scoring output varies by more than 1%, it fails the audit.

Explainability (XAI)

Black boxes are dangerous. If a loan is denied, you must be able to explain why. "The neural network said no" is not a legal defense. We use techniques like SHAP (SHapley Additive exPlanations) to force the model to show its work.

"Loan denied because: Debt-to-Income ratio > 40%." This is defensible. "Loan denied because: Zip Code correlates with default." This is Redlining, and it is illegal.

Conclusion

Ethics is not just a "nice to have." It is risk management. One bad algorithm can lead to a class-action lawsuit that destroys a company.

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