As regulators and banks ponder ways to correct unfair lending practices to people of color, fintech startup Ocrolus Inc. has taken part in a study that shows that automating more of the loan application process boosts diversity in loans.
With non-white borrowers continuing to receive a lower percentage of capital for homes and businesses, Ocrolus executive David Snitkof has co-authored a study by New York University Professor Sabrina Howell on automation in small business lending. Black-owned companies disproportionately obtained PPP loans from fintech lenders, not traditional banks, particularly in areas with high racial animus, according to the NYU study.
Snitkof, who is head of analytics for Ocrolus, said that document automation and analysis technology that the company uses for customers such as PayPal PYPL , Brex, SoFi, SOFI and Plaid helps reduce human bias in lending.