Zest AI, a Burbank-based financial services company that makes software for credit underwriting, and WithClutch, a tech company that builds digital experiences for credit unions, announced a partnership last week to offer finance and refinance rates through credit unions.
“Our goal is to turn credit unions into fintechs,” Nicholas Hinrichsen, chief executive and co-founder of WithClutch, said in a statement. “The partnership with Zest AI will remove further friction from the loan application process and will bring us yet another step closer to our goal. We fell in love with what Zest AI is doing, and both our products become even better through this partnership.”
Zest AI’s artificial intelligence technology helps lenders make decisions and, according to the company, increase revenue, reduce risk and automate compliance.
“It’s extremely important in today’s economic climate that financial institutions figure out every possible way to help members maximize their disposable income,” said José Valentín, senior vice president of partnerships at Zest AI. “Working with the Clutch team means that together we can provide members greater flexibility through fair and affordable reduced monthly payments on their loans.”
Zest AI’s technology is informed by data tailored to individual borrowers as well as the community a credit union serves.
“All of our software and our patents are effectively leveraging artificial intelligence to be able to create a better risk picture of the applicant or consumer or credit union member in order to be able to evaluate them for loans,” Valentín said. “That could be personal loans, credit cards, or automobile.”
When this data is applied to Zest AI’s machine-learning algorithms, credit unions see an average increase in approvals of 25% without increasing their risk tolerance. Zest AI’s automation power also lets credit unions monitor and respond to shifts in market conditions.
WithClutch says its goal is to turn credit unions into fintechs, giving them the technology to compete with traditional methods to deliver financial services.
“They want to equip credit unions with the ability to create digital experiences that delight credit union members. When they’re focused on being able to help credit unions provide products and services in a manner that is turnkey and create a member experience that the credit union can be proud of, Zest is equipping a credit union with the ability to make better decisions about who to lend to,” Valentín said.
Credit unions that utilize Zest AI and WithClutch’s joint offering will be able to provide new options for financing and refinancing to more members.
“That’s when you combine the two products. Actively, when members are using the platform, they effectively insert a phone number to verify their identity and then are able to say, ‘I want to refinance my auto loan.’ Within just a few steps, they can go straight through to funding with the credit union,” Valentín said.
Last month, the company also partnered with Equifax, Inc., a credit reporting agency. This new partnership allows credit union members direct access Zest AI’s technology along with its consumer credit reporting data. This connectivity allows credit unions to automate most of their lending decisions without needing massive IT modernization projects.
“Credit unions are leading the charge among financial institutions to further financial inclusion and bring greater transparency and innovation to lending. Zest AI is excited to partner with Equifax to help them do just that,” Valentín said in a statement.