Sample interview questions: How do you assess the impact of technological advancements on a borrower’s creditworthiness?
Sample answer:
Assessing the Impact of Technological Advancements on Borrower’s Creditworthiness:
1. Automation and Job Displacement:
* Automating tasks can displace certain jobs, reducing income potential and affecting debt-to-income ratios.
* Analyze industry trends to identify sectors and job functions at high risk of displacement.
2. Digital Lending and Alternative Data:
* Digital lenders use alternative data sources (e.g., social media, transaction histories) to assess creditworthiness.
* Consider how the availability of non-traditional data may impact loan applications and approval rates.
3. Artificial Intelligence and Risk Scoring:
* AI algorithms are used to derive risk scores from vast amounts of data.
* Evaluate the accuracy and fairness of these models to ensure borrowers are not unfairly penalized.
4. Digital Assets and Cryptocurrency:
* The rise of digital assets and cryptocurrency creates new opportunities for lending and borrowing.
* Assess the volatility and liquidity of these assets to determ… Read full answer