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socially and politically unacceptable to allow biases Other approaches that have been suggested
in the case of race, ethnicity and gender. include consumer agencies randomly reviewing
A key question is to what degree industry should scoring systems of financial service providers (and
bear the responsibility and cost of identifying bias, health providers, educational institutions and other
using data to identify discrimination. When auto- bodies that routinely make decisions about people)
mated decision-making causes unlawful discrim- from time to time. They might run hypothetical sce-
ination and harm under existing laws, firms relying narios to assess whether the models were effectively
on such processing might employ tools (and, under using statistical proxies for protected groups, such
some laws, they may be responsible) to ensure that as race, gender, religion and disability. Such auditing
using data will not amplify historical bias, and to use might encourage firms to design against such risks. 140
data processing methods that avoid using proxies
for protected classes. In addition, human reviews of Differential pricing and other terms
algorithm outputs may be necessary. It may also be Availability of data allows a financial service provider
possible to use data to identify discrimination, and to to better assess the risk that a consumer represents,
require companies by regulation to do so. and so to offer services that might not otherwise be
Even if the result may not violate existing laws available. However, the availability of a potentially
prohibiting discrimination on the basis of race, reli- vast array of data about a consumer also creates an
gion or another protected class, the unfair harm to information asymmetry whereby the provider knows
individuals may merit requiring industry to employ more about the consumer than the consumer knows
ethical frameworks and “best practices” to adjust about the provider. The provider may take advan-
algorithms to ensure that outcomes will be moni- tage of such situation and be able to engage in what
tored and evaluated. Other mitigating measures may economists refer to as “differential pricing,” in which
include providing individuals the opportunity (or the provider charges different prices to different
right) to receive an explanation for automated deci- consumers for the same product.
sions (see section 7.2), and employing data protec- Differential pricing is common and often has con-
tion impact assessments (DPIAs) (see section 8). sumer benefits, for example, for train tickets are often
Monetary Authority of Singapore’s FEAT Principles
1. Individuals or groups of individuals are not systematically disadvantaged through AIDA-driven deci-
sions unless these decisions can be justified.
3. Data and models used for AIDA-driven decisions are regularly reviewed and validated […] to mini-
mize unintentional bias.
Smart Campaign’s draft Digital Credit Standards
Indicator 5�2�1�0
Protected Categories include ethnicity, gender, age, disability, political affiliation, sexual orientation,
caste, and religion.
Indicator 5�2�3�0
Algorithms are designed to reduce the risk of client discrimination based on Protected Categories.
Indicator 5�2�3�1
After an initial learning phase provider conducts analysis on connections between non-discriminatory
variables and discriminatory variables in order to check for unintentional bias in automated credit
decisions.
Indicator 5�2�3�2
If the provider outsources the algorithm development, the provider must require the same standards
of the indicator above be met by the third party. The provider has access to the following information
from the third party: algorithm features and documentation, material of training provided to the team,
and documents tracking testing history including date, description, outcome, discrimination items
identified, corrective action taken.
28 Big data, machine learning, consumer protection and privacy