Credit Unions

What Every Credit Union Needs To Know Before Choosing An AI Lending Partner

Zest AI team

October 27, 2021

Are you thinking about switching to AI-driven lending? Good choice. AI-driven lending equals faster approvals, more loan bookings with confidence, and happier members.  

Your next big choice is picking a partner. Unless you have great data scientists or machine learning (ML) engineers on staff, you’re probably going to need a partner. Choosing the right one is a big decision, so we put together this rundown of questions you should ask every AI vendor.

How many models have you put into live production with credit unions? There are folks out there making flashy promises but have yet to deliver actual results. You want a partner that has a track record you can trust. Ask any vendor how long it took to get its last credit union client model into production if they have any at all. Ask any vendor how many of their models have passed through federal and state exams. Ours have, with flying colors. Zest has helped more credit unions go live with AI scoring than anyone in the industry, delivering 11 million scores to date through recessions and pandemics. Models built with Zest software now touch 3 million CU members and power $1.5 billion in originations each quarter.

You want a partner that puts you in the driver’s seat, that gives you the kind of control over your model that you don’t get with FICO or a vendor that rents you access to their AI through some platform.

With what size credit unions do you typically work? You want a partner that understands the different needs of credit unions, large and small. For example, Zest is powering underwriting at credit unions from First Service in Houston ($800 million assets) to Suncoast in Tampa ($14 billion assets). You also want a vendor that can flex. Ask about client support levels so your team’s not left behind in the long run. 

Do you understand what’s different about credit unions and banks? You want a partner dedicated to the credit union mission of enriching people’s lives. Zest is a CUSO, backed in part by credit unions, and we understand what’s unique about credit union lending strategies. There’s a reason CUNA Strategic Services chose Zest as its partner for AI-driven lending. We deliver results on which credit unions can depend. 

How rigorous are your fair lending analysis? You want a partner that has solved the complex problems of fairness, bias, and model transparency. You want a partner that gives you visibility and control over the credit model and what makes it tick. If you’re concerned about a variable, you should be able to take it out or justify it being there. Ask what kind of fair lending testing their models go through. Any vendor ought to tell you how good their models are at closing the approval gap for thin-file applicants or members of color. Ours use an accepted and patented approach to drive more inclusive lending.

What kind of visibility do I have into my model? You want a partner that puts you in the driver’s seat, something you don’t get with FICO or a model you access through some vendor’s platform. For example, Zest software builds a tailored model that is transparent enough for you to know exactly how much each variable contributes to model accuracy and bias. Ask if they use their own monitoring tools or do any financial performance monitoring at all. You may not want to outsource that to yet another third party.

How good is your compliance? We work closely and frequently with the NCUA and other regulators to ensure that Zest-built models meet every compliance standard. Our software explains each model decision using provably correct and independently verifiable methods, while others take shortcuts. Always ask to see their model documentation, and ask what they do to protect your member data. 

We think all credit unions will eventually switch from generic scoring to AI-driven lending. The economics are too good to pass up. But you want to make that journey with someone who’s been there many times before. There are all kinds of new providers making big promises or offering access to their model for a fee. Your job is to ask the right questions, identify the best solution for your organization, one that builds a more vital and competitive financial institution. At Zest, we are committed to giving you transparency, control, and a competitive advantage from better credit scoring.

Drop us a note if you want to learn more.

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