Credit & Risk

A change in how you lend, will do you (and your members) good

Zest AI team
December 5, 2022

A change in how you lend, will do you (and your members) good

Change is a popular theme, from Sheryl Crow, David Bowie to philosophers, activists and dreamers, as change presents opportunities to make things better. And in lending, there is no denying that there is much to be desired from traditional, national score underwriting methodologies–from a lack of efficiency to inherent bias’.  Do you know anyone who would be excited to start the process of a loan application?


What if changing your underwriting process and scoring method is not only possible, but fast, easy, and delivers proven results? Zest AI’s mission is to make fair and transparent credit available to everyone. That is why we partner with credit unions in this shared mission to better serve members while improving the credit union’s efficiency by increasing automation. 


Let’s take a closer look at the process. Credit applications fall into one of three buckets:

  1. Applications you can auto-approve because the applicant’s credit score is so good.
  2. Applications you can auto-decline because the applicant’s credit score is so bad.
  3. Applications that you’re forced to manually process because the applicant’s credit score falls somewhere in between.


For example, maybe you auto-approve any applicants with an industry score over 750 and auto-decline any applicant with a score under 600. The problem here is that the vast majority of credit applications you receive invariably fall in that gray area.


The purpose of the traditional scoring system is to allow you to compare apples to apples when it comes to credit decisioning – except that apples come in all different shapes, sizes, flavors, and levels of ripeness. In other words, two applicants with the same industry scores don’t necessarily represent the same level of risk. Unfortunately, these scores are based on so few data points, your decisioning system can’t tell one apple from another.


What if we could shrink the number of applications that require manual review without increasing risk and, in fact, find more deserving borrowers that would have been denied due to the old score’s inherent bias? In short, what if we could make the change to spend less time on manual review safely, increase efficiency and member delight?


The good news is that with Zest AI’s automated underwriting technology, this change is within reach for all credit unions. Underwriting with Zest AI is better because we instantly evaluate hundreds of data points instead of the handful that comprise a national score. The model and scoring is completely transparent and ensures compliance. It’s faster because we apply cutting-edge data science, resulting in more accurate approvals, and with a majority of applications able to be auto-decisioned. And it can strengthen your member relationships and delight them with fintech decisioning speeds along with better identifying and serving the historically underserved.


It’s easy to see what this means to your borrowers. More instant yesses is never a bad thing as far as they’re concerned. And it’s easy to see what this change means to your lending staff, too. More auto-decisioned applications means fewer manual applications for your employees to trudge through, leading to lack of decisoning consistency and less time spent building relationships.


But what about your operating expenses? Here’s a little exercise for you: Based solely on labor costs, figure out how much money you spend to manually process a credit application. Now calculate the delta between how many applications you auto-approve now and how many more a bump to 80% of all approvals would represent. Multiply that number by the per-manually processed application cost and you’ll have a conservative estimate of how much money AI-based lending can save you.


Times they are-a changin’, and now you have the power to lead that change to better serve your members with Zest AI.

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