Discuss Forward Versus Backward Reasoning.

1. The forward reasoning is data-driven approach while backward reasoning is a goal driven.
2. The process starts with new data and facts in the forward reasoning. Conversely, backward reasoning begins with the results.
3. Forward reasoning aims to determine the result followed by some sequences. On the other hand, backward reasoning emphasis on the acts that support the conclusion.
4. The forward reasoning is an opportunistic approach because it could produce different results. As against, in backward reasoning, a specific goal can only have certain predetermined initial data which makes it restricted.
5. The flow of the forward reasoning is from the antecedent to consequent while backward reasoning works in reverse order in which it starts from conclusion to incipient.

Banks have started incorporating AI-based systems to make more informed, safer, and profitable loan and credit decisions. Currently, many banks are still too confined to the use of credit history, credit scores, and customer references to determine the creditworthiness of an individual or company.

However, one cannot deny that these credit reporting systems are often riddled with errors, missing real-world transaction history, and misclassifying creditors.

An AI-based loan and credit system can look into the behavior and patterns of customers with limited credit history to determine their creditworthiness. Also, the system sends warnings to banks about specific behaviors that may increase the chances of default. In short, such technologies are playing a key role in changing the future of consumer lending.