Lenders using ZestFinance Inc.’s technology can now use Microsoft’s cloud-based Azure platform rather than their own servers to analyze machine learning models.
“Testing and training machine learning models is a very compute-intensive task,” said ZestFinance founder and Chief Executive Doug Merrill. “Being able to tap Microsoft’s Azure cloud allows customers using Zest tools to train machine learning models in a matter of hours, so they can work quickly, rather than waiting for computing time to free up on servers that a bank might have in its data center, which could take days.” It holds the potential for financial institutions to ultimately provide more credit at a lower cost across their entire credit portfolios, he added.
Financial institutions can use machine learning to extend credit to people who, based on traditional underwriting standards, would not qualify for it. But explaining exactly how the models reached certain results is less common. This can be problematic in an industry that is heavily regulated, Merrill said, adding that ZestFinance’s tools are unique in that the machine-learning aspects are transparent, or explainable.
When Microsoft incorporated ZestFinance’s artificial intelligence tools into its suite of services last month, it allowed lenders to use Zest’s tools to build, deploy, and monitor credit models in Microsoft’s cloud. The tools can also be used via on-premise data centers tied to Microsoft’s database management system. Microsoft offers several tools used by financial institutions, from Office to its cloud server, Azure. ZestFinance’s ML-based underwriting tools will be the suite’s the newest addition, and customers “don’t have to rip and replace their entire system” to use it, said Merrill, who was formerly Google’s chief information officer.
Now that ZestFinance’s tools are used on Microsoft’s cloud server, lenders will have the added benefit of “a reliable and secure technology stack,” a ZestFinance spokeswoman said in an email. Lenders will be able to manage and scale their risk-scoring capabilities in less time.
ZestFinance’s only publicly announced auto finance partner is subprime lender Prestige Financial Services.