Algorithmic transparency & accountability for a loan approval system

Peter Haenni

• 1 min read
Algorithmic transparency & accountability for a loan approval system
SIPOC map auto generated by the ProcessHorizon web app

Algorithmic transparency refers to the degree to which the workings of an algorithm, i.e. how it processes data, makes decisions, and produces outcomes are understandable, explainable, and accessible to relevant stakeholders (developers, users, regulators, etc.).

1. Informed Users: Ensure applicants are clearly informed when an algorithm is being used in loan decisions.

    1. Define required disclosures
    2. Design UX for transparency
    3. Provide an end-to-end SIPOC map making data origins, data & process flows & stakeholder impact transparent all-in-one diagram
    4. Integrate into onboarding & application forms

2. Explainable Results: Provide understandable reasons for automated decisions.

    1. Apply explainability techniques (e.g. SHAP, LIME, SIPOC context mapping)
    2. Connect features to decisions
    3. Deliver reason codes or narratives to users

3. Auditability: Make model decisions traceable and available for auditing.

    1. Log each decision with associated data
    2. Tag decisions with metadata (e.g. version, timestamp)
    3. Store and secure logs for future audit

4. Human Fallback: Allow manual review or override of algorithmic decisions.

    1. Accept appeal requests
    2. Review cases manually
    3. Approve or deny override
    4. Communicate results to applicant

5. Bias Monitoring: Continuously detect and mitigate unfair outcomes.

    1. Segment decisions by demographic
    2. Run fairness tests (e.g. disparate impact)
    3. Report bias and recommend mitigation

6. Clear Accountability: Assign responsibility for system decisions and oversight.

    1. Define accountability at each step of model lifecycle
    2. Establish escalation paths and oversight roles
    3. Conduct periodic governance reviews

Algorithmic transparency implies that you can see and understand how and why an algorithm makes the decisions it does.

Using the following link you can access this sandbox SIPOC model in the ProcessHorizon web app and adapt it to your needs (easy customizing) and export or print the automagically created visual AllinOne SIPOC map as a PDF document or share it with your peers: https://app.processhorizon.com/enterprises/N9iUVjYzStkPJkdyDu89XmY5/frontend