6X more instant approvals. Greater capacity with the same team.

When Russ Bernardo, Senior Vice President and Chief Lending Officer, first joined iQ Credit Union, he set his sights on growing loan volume without increasing risk or staff headcount. Fortunately, both he and iQ’s leadership team were already familiar with Zest AI and immediately began the exploration process. 

iQ then worked with Zest AI to build a custom model aligned with their risk tolerance, based on historical data. Zest AI trained the model on 8,000 different features engineered from credit bureau data, tradelines, inquiries, collections, bankruptcy data, and more. The iQ team then tested and retested the model to ensure it aligned with their lending strategy. 

“It was nice to know that Zest AI was methodically validating the model because, at the end of the day, we need it to be accurate, and we need it to be reflective of the risk posture that iQ is willing to take,” noted Bernardo. 

While Zest AI conducted exploratory data analysis and custom modeling, Bernardo and iQ’s leadership team began introducing Zest AI across the organization. Knowing this was a change management project as much as a technology one, Bernardo focused on transparency and clarity around Zest AI and shared how it would support the team, their members, and dealer-partners. They developed a change management campaign that focused on ensuring their team that AI would make their jobs more efficient so they could spend time where it mattered: with their members. Through those efforts, Bernardo and the leadership team were able to instill confidence in the product.

As the Zest AI project launched, with stakeholders  getting deeper into the solution, and questions naturally were raised, Bernardo made sure to maintain consistent messaging regarding his confidence in the Zest AI model. 

Growing revenue 

Bernardo’s confidence in the Zest AI model and scores has led to significant growth for iQ. While the organization has historically been conservative with instant responses for personal loans, it has been able to increase automated approvals from 3% to 17%, supporting growth in funded loans. With credit cards, automated opportunities grew 342%, and indirect loan approvals, mostly auto loans made with dealer partners in the area, have quadrupled due to the faster decisioning that makes iQ more competitive. 

“The indirect auto side has been a lift for us. What we've seen is that by getting decisions back faster, we've gained additional trust from the dealers, and they're sending us more deals to look at,” explained Bernardo. “If you get more loans coming into the funnel, you're going to close more loans because you're going to say ‘yes’  before somebody else does.”

iQ has also expanded its loan opportunities by buying loan participations. Zest AI provides a new data point to improve how they evaluate loan pools. With each pool up for assessment, Bernardo asks if the selling institution uses Zest AI. From there, they can have what Bernardo dubs a “Zest conversation” that dives into the particular type of loan and what they’ve learned from Zest AI, as well as how they use the platform. That information, in turn, provides details on how they think the pool will perform and factors into their investment decision. 

“When we're evaluating a pool, we run numbers to determine what we believe our annualized loan loss percentage will be for that pool,” said Bernardo. 

As iQ continues to move toward more automated underwriting , they feel that Zest AI will play a big role in their future direction. In fact, Bernardo sees this strategic partnership as an extension of iQ’s lending team. 

“When we look back on any solution implemented, we always ask, ‘Would you do it again?’ With Zest AI, that answer is an emphatic yes, which is a testament to both the partnership and the return these products have brought to iQ,” said Bernardo.

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