(work in progress)
The credibility to charge interest on worthless pieces of paper is the greatest invention of capitalism.
The three important factors behind any venture to be successful are "intent", "ability" and "luck".
Let us try to examine whether we can assess all of these.
It
is impossible to predict or assess someone's luck. We need to look at
the other two factors to find the odds of the person being unlucky. This
brings to "ability". This factor can easily be measured using data, the
one that is the standard practise now. For example, to assess "luck",
one can see the cash reserve or proper insurances. Such
data will always be private and consent based. In the current financial
framework, it has to be driven by the government appointed regulators. The important factor that gets overlooked is "intent".
Most of the bad loans are due to the wrong intent.
Suppose
a person takes a loan to start a restaurant. It may happen that the
menu does not strike a chord with the customers and the business fails.
This is not a lost cause. The restaurant still has the furniture and
crockery. People employed by him were paid which they had spent and the
money had gotten re-circulated in the economy. And there are more
valuable assets in the form of knowledge gained. With little guidance,
this business can be recovered. However, if the person made a world tour
with the loan, then it is impossible to recover.
"Intent"
- the main ingredient in the recipe for success can also be measured
with the advancement done in computer vision. It is the most mature
application of second generation artificial intelligence.
The
idea is to build a lie detection platform. Typical with lie detection
methodology, there will be questions which the person is likely to say
the truth and few where he is likely to cover it. The questions have to
be annotated with the expectation of falsification. Thereafter, the
system can detect subtle changes which humans cannot. For e.g. pupil
dilation is impossible to observe with the naked eye. Other things may
be changes in posture or voice tone (pitch) or detecting unusually long
answers.
Study:
1. Computer vision systems developed by Israeli companies.
(these were primarily used in military surveillance)
2. Softwares used in casinos
References:
1. Actual tender for building such a system.
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