AI in Finance: Tackling Bias with Blockchain and XAI
Artificial intelligence is revolutionizing finance, offering rapid, data-driven insights. AI advisors personalize financial strategies, and advanced trading systems make split-second decisions.However, a major issue persists: bias.
Even with speed and precision, financial AI systems can carry the same biases the industry has long tried to eliminate. For instance, Lehigh University found that OpenAI’s GPT-4 Turbo required certain demographics to have 120 credit points higher than white applicants for the same approval, despite identical financial profiles.
This bias affects traditional markets and the crypto ecosystem.AI-powered market forecasting platforms, relying on price history and news sentiment, can overreact to anomalies like the Terra collapse or FTX crash, leading to poor predictions.
Blockchain and Explainable AI (XAI) offer solutions. XAI ensures decision-making is fair and ethical, while blockchain provides openness and immutability. This combination can improve auditing and promote trust.
For example, FICO uses blockchain to log AI model decisions, allowing regulators to trace credit
