FairPlay AI

I had the pleasure of joining 22 Minutes in Lending with Vince Passione, a long-time leader in consumer credit and founder of LendKey Technologies, Inc. which provides Lending-as-as-service solutions to credit unions and community banks. We dove deep into topics that are shaping the future of lending: AI, cash flow data, fair lending, and the growing role of credit unions and community banks in financing the transition to a clean energy economy. I’m in Vegas at Money 2020. If you’re here too and curious about fair lending solutions that make more money and do more good, let's connect at my table at Canaletto in St Mark's Square.  And thanks for having me on, Vince!

My heart breaks reading about the tragic case of 14-year-old Sewell Setzer III, who took his own life after developing an emotional bond with an AI chatbot. This wasn’t just a casual interaction—Sewell became deeply attached, and ultimately addicted, to the chatbot, which blurred the line between reality and simulation in ways a young mind couldn’t fully grasp. The facts are chilling. It’s a stark reminder that while AI can accomplish incredible things, it can also unleash devastating, unforeseen consequences—especially when vulnerable populations like children or those with mental health challenges are involved. At FairPlay, we’ve always advocated for strong safeguards and guardrails to ensure AI operates fairly and safely. But as Dr. Rumman Chowdhury points out, this tragedy makes one thing abundantly clear: there comes a point when no amount of safeguards, regulation, or oversight can fully mitigate the risks posed by some AI systems. Certain applications, particularly those that manipulate emotional bonds may be too dangerous to entrust with human lives, especially those of children. AI has the potential to create addictive, all-consuming experiences that blur the line between fantasy and reality, potentially leading to disastrous outcomes. Make no mistake, I’m an AI advocate, not a doomsayer. But not every use of AI is worth the potential cost. As a society, we need to have this conversation now—because the stakes have never been higher. My deepest condolences go out to Megan Garcia and the family of Sewell Setzer III. Rest in peace. https://lnkd.in/ekS_KNRH

Small banks face a stark choice: evolve or perish. Big Banks are wielding vast resources and economies of scale to woo customers. Fintechs are redefining customer expectations. Big Tech is eyeing the financial sector with keen interest, armed with massive user bases and unparalleled data and software expertise. And looming open banking regulations threaten to democratize financial data, potentially eroding traditional customer relationships. In this tumultuous environment, small banks risk becoming the next Blockbuster or EDS – once-mighty companies that failed to adapt to shifting competitive landscapes. Remember, Blockbuster could have bought Netflix, and EDS passed on acquiring Microsoft for a mere $80 million. The cost of complacency in the face of innovation can be extinction. Many small banks, sensing these headwinds, have eyed partner banking as a lifeline. But partner banking is no Swiss picnic. The regulatory environment is downright hostile. And the customer base of many potential fintech partners? Not exactly a banker's dream. We're talking average account balances of $70 and fraud rates that would make even the steadiest risk officer lose sleep. To succeed in this arena, small banks need to think big. Serving fintech consumers profitably requires massive scale, a fully digital approach, and investment in state-of-the-art operational and compliance controls. It's about leveraging technology to turn high volume, low-balance accounts into a viable business model. Is it easy? Absolutely not. But for small banks willing to embrace change, invest wisely, and navigate the regulatory maze, partner banking could be the key to not just survival, but relevance in the digital age. Toys "R" Us thought online shopping was child's play. Now it's game over.

Excited to be heading to the City of Brotherly Love this week for the Federal Reserve Bank of Philadelphia's annual fintech conference! I’ll be joining a great panel of fintech leaders to discuss BaaS Strategies for Success and Compliance. It’s a privilege to share the stage with Jason Henrichs, Kirsten Muetzel, CPA, Ashwin Vasan and Dan Quan and to hear insights from fintech all-stars like Hans Morris, Zachary Perret, Brandon Milhorn and others. Special thanks to Julapa Jagtiani and the Philly Fed for the kind invitation. Join us October 22-23 for what promises to be an exciting two days of robust discussions. See you there!

You know what I didn’t think would be cool, but totally is? Payments infrastructure for the trucking industry. Let me explain. Trucking is the backbone of the U.S. economy. Almost everything we buy, from groceries to gadgets, spends time on a truck. But behind the scenes, the payment process is a tangled mess. Trucking companies, brokers, shippers, and factoring firms all have to coordinate payments, and delays often lead to cash flow headaches for everyone. That’s where a little bank called Triumph steps in. This innovative bank has built TriumphPay, a payment network that works like Visa or Mastercard, but is laser-focused on trucking. By streamlining payments, they’re ensuring everyone in the supply chain—truckers, brokers, and shippers—gets paid fast and on time. Why is this so interesting? Because trucking finance is more than just payments—it’s a real-time window into the economy’s health. When the trucking industry slows down, it often signals economic trouble. On the flip side, when the trucking industry is humming, it means goods are moving and business is booming. Triumph sits at the center of all this, providing valuable insights into key economic metrics like shipping volumes and fuel consumption, making them an under-the-radar player with big data capabilities. Beyond payments, Triumph offers financial lifelines like freight factoring, getting truckers paid instantly by purchasing their unpaid invoices, and fuel cards to help them manage gas costs. This isn’t just about efficiency—it’s about keeping the whole supply chain moving in a world where disruptions are the new normal. Put another way, Triumph Financial isn’t just moving money—they’re building the infrastructure that keeps the trucking industry (and the broader economy) in gear. 

🚨 Customer Announcement! 🚨 I’m excited to announce that Flex has joined the FairPlay family! 🎉 Flex is transforming the rental experience by offering a flexible rent payment plan that gives renters more control and flexibility, making housing more accessible for millions. I’m delighted to partner with Chelsea K., Daniel Gordon, Ryan Metcalf, TJ Jiao, and Shragie Lichtenstein to integrate Fairness-as-a-Service into Flex’s innovative financial products. Here’s to empowering renters and driving better housing outcomes! 💪🏽🏡 https://lnkd.in/gKzUR3Bx

American households are under unprecedented financial pressure. Despite earning "middle-class" incomes, many families are struggling to keep up with rising costs for essentials like housing, childcare, healthcare, food and education. A recent Financial Health Network report reveals alarming trends about the state of America's middle class: 🔹 Only about one-third of Americans are considered "financially healthy" 🔹 50% of adults nearing retirement age have no retirement savings 🔹 Just 35% of the population qualifies as "middle class" based on basic financial criteria Between 1990 and 2019: ▶ Median family income grew 140% ▶ Childcare costs increased over 200% ▶ Higher education expenses rose nearly 400% After accounting for essentials, many households face negative net income. This financial strain impacts more than individual budgets. It contributes to pessimism about the future that may hamper growth and fuel polarization. Now, more than ever, we need innovative solutions to address rising costs, boost incomes, and strengthen our middle class. Kudos to Meghan Greene and Lisa Berdie for their work on this report, and to Jennifer Tescher for her leadership at the Financial Health Network. This research makes an important contribution to understanding—and ultimately solving—America's financial health crisis. https://lnkd.in/gdyApYte

Are AI-Driven College Admissions Processes Declining Qualified Students? Colleges are facing an unprecedented surge in fraudulent applications, driven by bad actors seeking to exploit the financial aid system. But as institutions use AI to counteract application fraud, the unintended consequences could jeopardize the academic futures of many promising students. The rise in fraudulent applications stems from a lucrative scam: 1. Submit false applications to multiple colleges 2. Gain acceptance and qualify for student loans and grants 3. Abscond with the funds, leaving taxpayers and institutions to foot the bill This scheme has become increasingly sophisticated, costing colleges and taxpayers millions annually. To combat this fraud, many colleges are deploying AI-powered screening tools. While these systems offer powerful fraud detection capabilities, they also introduce new risks of bias and discrimination. AI fraud detection systems in college admissions analyze a vast array of data points—from schools previously attended to extracurricular activities. But these variables can inadvertently become proxies for socioeconomic status or race, leading to potential marginalization of some populations. Who’s at risk? ▶ Low Income Students: AI models using variables like zip codes or school names might inadvertently flag more applications from low-income areas as suspicious. ▶ Non-Traditional Applicants: Adult learners or those with interrupted educational histories may be disproportionately flagged due to "atypical" patterns. ▶ First-Generation Students: Less familiarity with the admissions process could lead to applications appearing "different" to AI systems. ▶ International and Non-Native English Speakers: Cultural and linguistic differences might be misinterpreted as red flags. What Can Colleges Do About It? ♦ Improve the Training Data: Take steps to train AI systems on diverse datasets that accurately reflect the contemporary applicant pool. ♦ Regular Fairness Testing and Model Retraining: Implement continuous monitoring and auditing of AI admissions tools to ensure they remain effective and fair. This includes periodic retraining of AI systems to adapt to new patterns in application data. ♦ De-Bias the Data and Algorithms: Actively identify and remove biases from data sources and algorithms. This can involve reevaluating the weight given to certain data points that might disproportionately impact marginalized groups. ♦ Human Oversight and Appeals: Establish protocols for human review of AI-flagged applications, particularly in marginal cases. Provide a recourse for applicants who believe their application was unfairly assessed. Transparent AI Use: Communicate openly with prospective students about the use of AI in the admissions process, including how data is used and how decisions are made. A hat-tip to the always awesome Jonathan Joshua for shedding light on the burgeoning issue of fraudulent college applications.

Tenant Screening Software is facing a reckoning. A newly filed lawsuit accuses a tenant screening company of failing to implement basic AI safety controls, resulting in widespread harm to renters. According to the complaint, the company’s algorithm flagged people for criminal records they didn’t have and misclassified applicants in ways that disproportionately led to wrongful denials of housing for low-income and minority renters. These errors exacerbate existing inequalities in the rental market. Many of these issues could have been prevented had the company implemented algorithmic fairness testing and de-biasing techniques. As AI increasingly powers critical decisions in our daily lives, failures like this will spark more legal challenges. Make sure your AI is making headlines for innovation, not litigation — FairPlay can help. Hat tip to Andrew W. Grant for bringing this case to my attention. https://lnkd.in/g6eWcN_g

By integrating FairPlay AI's fairness technology, we’re one step closer to ensuring every student—no matter their background—has a clear path forward. At Clasp, our mission goes beyond financial support; it’s about creating opportunities that solve workforce challenges while empowering the next generation and building a stronger, more equitable future. 🤝 🚀 We’re tackling critical talent shortages, the student debt crisis, and expanding access to education with a fresh, equity-driven approach to recruiting, retention, and education financing. We are excited to use FairPlay AI's Fairness-as-as-Service solutions to further our mission and ensure that our models remain fair. 📰 Full Press Release: https://lnkd.in/ehGYjxTj #FairAccess #EducationForAll #TalentShortageSolutions #Clasp #StudentDebtCrisis