Using AI to Spot More Good Borrowers with Coastal Credit Union
Coastal is on a five-year strategic plan to reinvent the future of its lending with speed, efficiency and more approvals. It was looking to acquire more good borrowers further down the credit spectrum without adding risk or impacting member experience. So Coastal turned to Zest, a leader in AI underwriting software, for a partnership.
The zest AI effect
At a glance
Coastal Federal Credit Union wanted to lend deeper into the credit spectrum as part of a five-year strategic plan, but reliance on national scores and their existing rules engine made it nearly impossible to confidently approve borrowers below Tier A paper without taking on additional risk.
Coastal FCU partnered with Zest AI to build an AI-driven credit model using 10x more variables than before, dramatically improving risk prediction accuracy for lower credit tier applicants while integrating within their existing MeridianLink Consumer environment.
In two years, automatic approvals increased by 35%, overall auto-decisioning grew by 43%, and the auto loan portfolio specifically saw a 90% increase in auto-approvals and a 71% increase in auto-decisioning.
Challenges with lending down the credit spectrum
Coastal Federal Credit Union set out a five-year strategic plan to strengthen their team’s lending strategy with speed, efficiency, and more approvals. The credit union wanted to confidently lend down the credit spectrum without adding risk or impacting member experience, but reliance on national scores and the rules engine built into MeridianLink Consumer made it difficult to effectively lend below Tier A paper. By using more data and better math with Zest AI’s technology, Coastal FCU was able to dramatically increase the accuracy of its risk predictions down to D paper, and deliver a better member experience.
More data, better math means more members served
Coastal FCU used Zest AI’s technology to build an AI-driven credit model with 10x more variables than it had before, producing a far more accurate picture of each loan applicant, especially applicants in the lower credit tiers. In their two years since partnering with Zest, the underwriting team can now automatically approve 35% more applicants, and automatically 43% more applicants overall. Coastal FCU’s auto portfolio experienced a 90% increase in auto-approvals and a 71% increase in auto-decisioning.
Coastal Credit Union
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