A New Turnkey Approach to Capturing the Gains from ML Underwriting

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$4 million in reduced charge-offs
Model development time cut in half

How does a lender without its own modeling team capture the value of machine learning-powered underwriting? It’s a question we’re asked often, so we came up with an answer: a full SaaS solution called ZAML Silver that reduces the barriers to ML adoption for any underwriter. All a lender has to do is upload their data and ZAML takes care of the rest, including model build, test, validation, deployment, and all the required compliance and documentation. Lenders get a powerful, custom model that they can trust in only a few weeks.

The story began in early 2019 with a lender that had grown fast over the last few years. All that growth and acquisitions brought on some underwriting challenges. Its charge-off rate had grown from 20% to more than 25% over a recent two-year period. The lender was eager to use ML to improve that loss rate but lacked the data science resources to handle its own ML modeling process.

Enter ZAML Silver. The lender uploaded to ZAML Silver’s SaaS service its application and performance data for two years of loan performance. The lender also provided entire credit bureau reports for every applicant. This was enough data to build a custom tree-based ML model that returned excellent results:

30% reduction in charge-offs over its traditional credit scorecard, equal to $4 million in annual savings. (The model could also expand the lender’s portfolio by up to 30% keeping risk constant.)

The ZAML Silver-built model benefited from using 5 times as many data points as the lender’s existing scorecard. Once the lender approves the model, ZAML Silver deployed it in the cloud so that it returns a score quickly with all the necessary key factors to support the adverse action process. Along with the model comes all the reports lenders need: stability validation, business impact analysis, and model risk management documentation.

ZestFinance’s new product, ZAML Silver, can provide any lender with the same trusted performance and transparency enjoyed by Zest’s largest customers. You don’t need armies of data scientists and engineers to do ML. Let ZAML Silver get it done for you.


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