A few years ago some banks began underwriting loans based on data accumulated and evaluated by a computer. It works fairly well for people with good credit, but doesn’t seem to work with subprime loans.
Why? Good credit loans do not require a computer to interpret anything. A person’s credit score meets a set of criteria or it doesn’t. Everything is cut and dry. With bad credit loan originations, there is a story to be looked at. Is the bad credit situational? Did the borrower lose a job and get behind, but now has a good job and is paying current bills? When would a score of 550 get a car loan and when would it be a bad risk? Despite advances in computer technology, they have not become self-aware or gained personal insight. That creates the conundrum that prevents subprime auto loans from being automatically originated.
Now comes the group of people who wonder why the obstacles can not be overcome. The money is available. If someone builds the right program, banks will buy it, but why? Why remove humans from decisions about other humans? How long before someone becomes too lazy to think and develops a computer to remove that stress from our daily lives?