Machine learning works by setting up programmes that could consider multiple variables and then taking as input huge quantity of data. The programme sifts the data. It formulates its own rules and finds patterns and co-relations. It is in effect a blackbox.
When there is a loan or credit card application, the yes/no decision is often made by a machine. The cedit limit, interest rates, tenure and other details are also likely to be automated.
Nobody except the machine knows the logic behind a decision. It is not known whether the machine is transparent and fair.
A person’s savings is allocated by intelligent agents. No fly lists of passengers are made by running algorithims. AI is used to read body language, and to figure out sexual orientation.
The Europeon Union’s proposed General Data Protection Regulation (GDPR) will be enforced from 2018, and some sections of the law give citizens a right to demand explanations about decisions made by algorithms. Article 22 implies that a human element would have to be present in the chain if algorithms are run to make key decisions that affect individuals.