ZestFinance has recently announced its new technology, ZAML Fair. This new software launched by the company makes use of artificial intelligence (AI) to help in the company’s lending practices and processes, allowing them to lessen lending discrimination.
Throughout many years, the lending scene has been particularly harsh to individuals looking to taking out a loan. Most of the time, people who seek loan help come from minority groups, often going out of their comfort zones to borrow money in order to finance a home purchase.
How ZAML Fair Came to Be
The lending market has found to be pretty discriminatory, particularly with applicants whose credit scores are found to be on the lower scale. This reduces the applicants’ chances to buy homes and other necessities.
Following this, the company decided to launch its ZAML Fair algorithm, still under the ZestFinance flagship ZAML platform, as reported in Bankless Times. This allows lenders to be less discriminatory towards their applicants.
How the Program Works
Powered by artificial intelligence, the ZAML Fair scans the system and ranks the lenders by tracking their credit signals, according to Forbes. This process allows the ZAML platform to gauge lender biases.
After the initial screening, the AI will now provide a new model that has a fairer, allowing lenders to reduce discriminatory factors based on the findings shown. According to Mortgage Professional America, these factors include the applicant’s income and credit score. Banks and other financial institutions who practice lending can run their variables in the system and adjust accordingly, allowing them to accommodate more borrowers.
A Brighter Future
Should the program work seamlessly, ZestFinance hopes that their artificial technology software could greatly reduce the disparity between white and other minority borrowers, notes Forbes. Using this tool on a nationwide scale would help more than 170,000 new homeowners to attain their dream homes.