Addressing Bias and Data Privacy Concerns in AI-Driven Credit Scoring Systems Through Cybersecurity Risk Assessment

The increasing reliance on artificial intelligence (AI) in credit scoring has raised concerns about algorithmic bias and data privacy, necessitating robust cybersecurity risk assessment frameworks. This study investigates the role of cybersecurity risk assessment in mitigating these risks, utilizing multiple datasets, including the Home Mortgage Disclosure Act (HMDA) dataset, the Equifax Data Breach Report, the Financial Cybersecurity Incidents Database, and the MITRE ATT&CK Financial Sector Threat Intelligence Dataset. We employ statistical fairness metrics, Bayesian Probability Modeling, Markov Chain Analysis, and Monte Carlo Simulations to evaluate the extent of bias, privacy risks, and cybersecurity vulnerabilities. Findings reveal significant disparities in loan approvals, with Black applicants receiving approval rates 28% lower than White applicants (χ² = 59.83, p < 0.001), highlighting systemic bias in AI-driven credit scoring. Data privacy remains a pressing issue, as financial sector breaches affect an average of 5,069,760 individuals per incident. Insider threats pose the greatest risk, with a probability of 0.81 of leading to financial fraud. These findings underscore the urgency of integrating fairness-aware machine learning, enhancing regulatory compliance with AI governance policies, and deploying AI-driven cybersecurity tools to fortify financial AI applications against emerging threats. This research contributes to the broader discourse on ethical AI by providing a structured cybersecurity risk assessment approach to mitigate algorithmic bias and strengthen data privacy protections. Implementing these recommendations will enhance fairness, security, and transparency in AI-driven financial decision-making, ensuring compliance with evolving regulatory frameworks and fostering trust in automated credit scoring systems.

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Publication Details

Journal
Asian Journal of Research in Computer Science
Published
2025-03-11
DOI
https://doi.org/10.9734/ajrcos/2025/v18i4608
Citations
6
Primary Topic
Blockchain Technology Applications and Security
Type
article
Field-Weighted Citation Impact
19.48
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article

Addressing Bias and Data Privacy Concerns in AI-Driven Credit Scoring Systems Through Cybersecurity Risk Assessment

Oluwaseun Oladeji Olaniyi, Abayomi Titilola Olutimehin, Olufunke Cynthia Metibemu, Isaac Adinoyi Salami et al.
6 citations
Asian Journal of Research in Computer Science
Blockchain Technology Applications and Security
19.48
article

Addressing Bias and Data Privacy Concerns in AI-Driven Credit Scoring Systems Through Cybersecurity Risk Assessment

Oluwaseun Oladeji Olaniyi, Abayomi Titilola Olutimehin, Olufunke Cynthia Metibemu, Isaac Adinoyi Salami, Temilade Oluwatoyin Adesokan-Imran, Olufisayo Juliana Tiwo
article en
6 citations

Abstract

The increasing reliance on artificial intelligence (AI) in credit scoring has raised concerns about algorithmic bias and data privacy, necessitating robust cybersecurity risk assessment frameworks. This study investigates the role of cybersecurity risk assessment in mitigating these risks, utilizing multiple datasets, including the Home Mortgage Disclosure Act (HMDA) dataset, the Equifax Data Breach Report, the Financial Cybersecurity Incidents Database, and the MITRE ATT&CK Financial Sector Threat Intelligence Dataset. We employ statistical fairness metrics, Bayesian Probability Modeling, Markov Chain Analysis, and Monte Carlo Simulations to evaluate the extent of bias, privacy risks, and cybersecurity vulnerabilities. Findings reveal significant disparities in loan approvals, with Black applicants receiving approval rates 28% lower than White applicants (χ² = 59.83, p < 0.001), highlighting systemic bias in AI-driven credit scoring. Data privacy remains a pressing issue, as financial sector breaches affect an average of 5,069,760 individuals per incident. Insider threats pose the greatest risk, with a probability of 0.81 of leading to financial fraud. These findings underscore the urgency of integrating fairness-aware machine learning, enhancing regulatory compliance with AI governance policies, and deploying AI-driven cybersecurity tools to fortify financial AI applications against emerging threats. This research contributes to the broader discourse on ethical AI by providing a structured cybersecurity risk assessment approach to mitigate algorithmic bias and strengthen data privacy protections. Implementing these recommendations will enhance fairness, security, and transparency in AI-driven financial decision-making, ensuring compliance with evolving regulatory frameworks and fostering trust in automated credit scoring systems.

Asian Journal of Research in Computer ScienceVol. 18(4)
Ekiti State University (NG), University of Ibadan (NG), Royal Holloway University of London (GB), University of Lagos (NG), University of the Cumberlands (US), University of Tampa (US)
Openalex Percentile: Top 1%
Blockchain Technology Applications and Security
19.48
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