At Fintech Meetup 2024 in Las Vegas, Fairplay CEO Kareem Saleh and Upgrade CEO Renaud Laplanche discuss the integration of AI in financial services, Upgrade’s strategic adoption of Fairplay’s fair lending automation technology, and the new role of compliance as a catalyst for innovation and profits in the sector.
The State of Play in Consumer Credit
Peter Renton:
Okay. Good morning everybody. Um, good morning Renault. Good morning, Kareem. So let’s just get right into it. We’re not gonna do introductions ‘cause I think Renault, I think everybody will know who you are. Um, why don’t you just tell us a little bit about what’s the state of play in consumer credit today?
Renault Laplanche:
All right. Uh, good way to start. Um, so I think they, I mean, generally, uh, US consumer is in a good place.
Introducing FairPlay: Fairness-as-a-Service
Peter Renton:
So, Kareem, tell us a little bit about FairPlay. What do you guys do?
Kareem Saleh:
Yeah, thanks, Peter. Well, FairPlay is the world’s first Fairness-as-a-Service company. We make software that allows anybody using a predictive model to answer five questions:
- Is my algorithm fair?
- If not, why not?
- Could it be fairer?
- What’s the economic impact to our business of being fairer?
- Did we give our declines a second look?
Upgrade’s Shift from Manual Compliance to Real-Time Fairness
Peter:
Renault, were you being fair to your borrowers before FairPlay?
Renault:
Yeah, no, uh, yeah, I hope we were being fair . I think we were being fair at great cost, and a lot of friction.
FairPlay is tightly integrated with everything we do. It’s highly customizable, and it’s real-time.
The Technology Behind Fair Lending Automation
Peter:
Kareem, how are you able to go into a company like Upgrade and perform real-time analysis?
Kareem:
Yeah, sure. Well, we always start by understanding our partner’s business […]
We run demographic imputation […] Then we analyze:
- What rate did we approve women relative to men?
- What variables are causing differences?
- Can we maximize predictive power while minimizing disparity?
Compliance as Competitive Advantage in Fintech
Peter:
Can compliance be a competitive advantage?
Kareem:
Yes, absolutely. Consumers are demanding fairness from the brands they patronize. […]
Like self-driving cars, we must give AI algorithms two objectives:
- Predict default risk
- Minimize disparities for protected groups
And the great news is: it works.
Has Fairness in Lending Been Solved?
Peter:
So is disparate impact a thing of the past?
Kareem:
Unfortunately, I don’t think it’s possible to be perfectly fair to everyone all the time. […] But our tools help lenders do right by their customers as much as possible.
Renault:
No , but it’s getting closer. […] Automating compliance leads to faster improvement loops and better data. […]
Final Thoughts: A Fairer Future for AI Credit Underwriting
Peter:
So what does the future hold?
Kareem:
The question is: have we done as much as we can to narrow disparities while also achieving business objectives? Our mission is to help partners like Upgrade deliver the fairest financial products possible.
To see for yourself why banks, credit unions, fintechs, and specialty lenders choose FairPlay to make better AI decisions, schedule a free demo today.
Key Takeaways
- Fairness in lending is no longer a trade-off between compliance and innovation—it can be a business advantage.
- Real-time fairness analytics and automated compliance tools like FairPlay are transforming how fintechs operate.
- Regulatory pressure is rising, but consumer expectations around fairness are even more influential.
- Done right, fairness can increase approval rates, reduce bias, and build trust—all while improving bottom-line performance.
FAQs
1. What is the current state of consumer credit in the U.S.?
According to Renault from Upgrade, the U.S. consumer is currently in a relatively stable position. While 2023 saw rising delinquencies that exceeded pre-pandemic levels, recent data shows those delinquencies are now stabilizing. Key indicators like the debt service-to-income ratio remain below the historical average, suggesting consumers are generally managing their debt loads.
2. What does FairPlay do?
FairPlay is the first “fairness-as-a-service” company. Their software helps financial institutions evaluate whether their lending algorithms are fair, identify why they may not be, and make real-time adjustments to improve fairness. FairPlay also helps measure the economic impact of fair lending and automate compliance testing.
3. Why did Upgrade choose to work with FairPlay?
Upgrade brought on FairPlay to simplify and modernize their fair lending practices. Previously, testing for fairness involved manual, labor-intensive processes with long feedback loops. FairPlay offers real-time, customizable insights that are tightly integrated into Upgrade’s systems, allowing them to adjust quickly and stay compliant.
4. How does FairPlay evaluate fairness if lenders don’t collect demographic data?
FairPlay uses a process called demographic imputation, which follows regulator-approved methodologies to estimate protected class membership (e.g., race, gender). This enables them to run fair lending analyses like approval rate comparisons and disparity impact assessments without requiring lenders to collect sensitive demographic data directly.
5. What impact has FairPlay had on lenders’ performance?
Lenders using FairPlay have reported:
- ~10% increase in approval rates
- ~13% increase in take rates
- ~20% improvement in fairness to protected groups
These improvements show that fairness can drive both social equity and business performance.
6. Is perfect fairness achievable in lending?
Both Renault and Kareem agree that perfect fairness is extremely difficult—perhaps impossible—to achieve. Fairness often involves trade-offs, and disparities can arise from numerous complex factors. The goal is to minimize these disparities as much as possible while maintaining business goals like risk management and profitability.
7. How does compliance become a competitive advantage?
Traditionally, compliance has been seen as a cost center. However, with real-time tools like FairPlay, compliance becomes more agile and embedded in product development. Lenders that automate compliance can innovate faster, reduce legal risk, and build consumer trust—giving them an edge in the market.
8. Has the regulatory environment influenced this shift?
Yes. The current regulatory environment is more focused on fairness and equity in financial services than in previous years. However, many companies are proactively adopting fairness tools like FairPlay not just due to regulation, but because the technology now allows them to balance fairness with performance more effectively than ever before.
9. Does integrating FairPlay reduce staffing needs?
FairPlay can reduce manual workloads, but companies like Upgrade are choosing to redeploy their compliance teams to higher-value tasks—like analyzing data and driving faster improvements—rather than cutting staff. This approach enhances agility and responsiveness in a volatile credit environment.
10. What does the future hold for fair lending?
While it’s unlikely that fairness will ever be completely “solved,” tools like FairPlay bring the industry significantly closer. The future will likely include more automation, tighter feedback loops, and deeper integration of fairness into core lending processes.
