Zest Finance has developed a new credit scoring platform called ZAML that provides a technology solution for alternative credit underwriting; similar to other emerging alternative credit models, the technology uses machine learning software to analyze alternative credit reporting information and arrive at a lending decision; the firm has worked with Baidu to test its credit underwriting, which helped the firm approve 150% more borrowers with no increased losses. Source
Originators of all stripes are using machines in the underwriting process. Understanding the capabilities and how best to underwrite in a more automated way is something lenders are still working on.
At LendIt USA 2016 Douglas Merrill of Zest Finance discusses the credit and underwriting process and how consumers are really looking for an experience that automates the choice of loans for them based upon the existing data available.
Douglas believes that speed matters but nobody knows that it matters, when consumers come to the lender for a loan they are not looking for a loan but for life certainty. The loan is just a product, a seamless and improved experience is what the borrower wants.
We should be discussing loans in seconds and microseconds, not days or weeks. Machines can help to automate the process based on your existing data set and a borrower should not need to fill out a loan application. Computation, storage and bandwidth are free and infinite. The things we can do with data are exciting and seemingly endless.
The current underwriting has been stuck in the 70's. Data has enabled us to change underwriting and develop new types of products; machines can help to make this happen. Why do lenders make you apply for a loan? Lenders know enough about you to know what you should need and they don't need you to fill out an application at all.
An automated underwriting process and the amount of data available through traditional and nontraditional means will help to continue the advancement in credit. At LendIt USA 2017 we will be covering the latest innovations in credit and underwriting. Learn what is coming next from the top originators, credit bureaus and service providers.
Check out the full video here: