Towards ethical financial innovation and inclusion: implications of AI targeting on vulnerable individuals seeking pay day loans

FinTech is bringing a long-term societal transformational change in providing financial services. Likewise, Artificial Intelligence (AI) is opening more opportunities for the financial services industry. AI is used for default risks predictions, product recommendation and customer segmentation engines. The pace at which AI is integrated into financial service provision highlight reasons to be more mindful and aware of its implication beyond its advantages. While recognising the opportunities, AI is bringing into FinTech; this paper aims to theoretically explore and positions the purpose of AI in financial service advertising and provision. AI determines who is eligible for a financial product, but the terms and condition varies based on the AI algorithms. The paper will highlight three critical implications which require further consideration. • Firstly, Access to Information - much information from customers are collected to serve advertisements, highlighting the ethical and marketing issues surrounding the collection of financial information. • Secondly, targeting – Based on information collected, Advertisements can be targeted towards individuals at a more personal level, perhaps encouraging them to borrow more money or nudge them to save. • Thirdly, biased algorithm used for making financial decisions. As human connections are lacking in financial decision, there is heavy reliance on AI which may be biased towards specific individuals. This paper is positioned as a theoretical paper to explore AI in financial services marketing and provision. It is anticipated that it will stir more discussion on this topic, shape research and also make managers more responsible as they explore the opportunities and prospectus of AI in financial services