While we still have a quaint image of loan officers sitting behind desks making decisions about vehicle loans as well as most other type of lending, the truth is that today’s lending decisions are largely made by machines engaging in data analysis. Like humans, machines don’t always get things right, so it’s generally believed that the more data points a system has to work with, the more likely a loan approval or denial will be made for the right reasons.
Digital Matrix Systems’ Data Access Point solution is a DMS platform designed to make it easier to create and deploy credit attributes and scorecards for automated decisions, risk assessment and probability calculations. The solution supports the entire data management life cycle, including secure access to credit bureaus and data providers, data storage, and analytics. The company is adding machine learning to the platform thanks to a newly announced partnership with ZestFinance, a technology provider of artificial intelligence (AI) software for credit.
Collectively, the companies are integrating Zest Automated Machine Learning (ZAML) software with Data Access Point, a move that is expected to improve on traditional methods by using 100 times more data signals and sophisticated math to make more good loans and fewer bad ones. Getting these results from machine learning requires secure, consistent access to clean data, according to ZestFinance. “Clean data” is often beyond the power of typical DMS solutions for a variety of reasons, including user errors, duplications and poorly managed CRM solutions.
“This partnership will remove a big challenge of doing ML — getting the right data in the right format,” said Douglas Merrill, CEO and founder of ZestFinance. “Together we can help more lenders use ML to approve more good borrowers and control their underwriting risk.”
DMS and Zest say their partnership will make credit scoring instantly accessible to thousands of lenders. DMS provides connections to more than 20 loan operating systems (LOS) and has connections with more than 40 data providers and all three credit bureaus.
“I believe this partnership will bring tremendous value to our clients,” said Mark Dreux, head of strategy and business development at DMS, in a statement. “The ability to pair Zest’s ML capabilities with DMS’ standardized and normalized attributes, as well as our clients’ custom attributes via our CreditAnalyst tool, will be a big win for lenders in support of their risk management efforts.”