VyStar Credit Union has partnered with a bank and venture capital firm to invest $ 18 million in Zest AI, a developer of credit underwriting software based in Los Angeles.
Zest AI on Thursday announced the capital injection, which it said was led by strategic investors VyStar CU of Jacksonville, Fla. ($ 10.7 billion in assets, 764,701 members) and First National Bank of Omaha , which has $ 25.5 billion in assets and 119 branches in Nebraska. , Colorado, Illinois, Iowa, Kansas, South Dakota and Texas. Returning investor Northgate Capital, a San Francisco-based venture capital firm, also contributed.
The funds will be used to accelerate the adoption of Zest AI’s model management system to build and deploy AI-based, explainable and compliant credit underwriting models. The investment will also fund Zest AI’s efforts to drive more rigorous technologies and standards around algorithmic fairness, with the aim of reducing bias in consumer lending.
Zest AI also announced that VyStar CLO Jenny Vipperman will join the Zest AI Board of Directors.
The announcement comes as Zest AI strives to deepen its relationship with credit unions across the country. Earlier this month, Zest AI was named the CUNA Strategic Services alliance provider for AI-driven lending to credit unions nationwide.
âJenny shares our mission to make fair credit available to everyone,â said Mike de Vere, CEO of Zest AI. âYou rarely meet someone who cares as much as Jenny about helping others. Jenny also brings in-depth knowledge of the specific needs of credit unions – the fastest growing part of our customer base. “
Vipperman said the job of leaders in the financial industry is to invent new and better ways to serve members.
âFor me that means fairer, faster and more accurate credit decisions,â she said. âThis investment will help ensure that more credit unions can make the same leap forward. “
Zest AI software is designed to help banks and credit unions overcome the statistical and data limits of traditional credit scores to identify good borrowers who are often overlooked by traditional techniques. Zest AI said its models generate up to a 20% increase in approval rates without additional risk, and up to 50% reduction in burdens using more data and advanced machine learning mathematics.