Findings suggest credit reporting companies’ hold on the industry is faltering as consumers demand more accuracy, transparency and options
LOS ANGELES, April 20, 2022 /PRNewswire/ — Zest AI, a leader in AI-powered underwriting software, today released a new study of more than 1,000 consumer reviews of financial and credit rating systems in America.
More than two-thirds of respondents believe that racism and bias are present in our financial system and in our credit reporting system. The financial services industry has struggled for years to achieve fairer results in lending practices and, as many banks realize that traditional methods of measuring creditworthiness are not working, the survey results from Zest AI suggest a persistent lack of consumer confidence.
- 68% of Americans think the financial services industry at least sometimes treats customers differently based on their race and gender.
- Millennials are particularly passionate about this, with 74% believing that the financial services industry at least sometimes treats customers differently based on race and gender.
- Overall, 40% of people think racism is at least somewhat embedded in the credit scoring system, but that number jumps to 55% among millennials.
- 41% of respondents knew nothing at all about the FICO scoring system and how each score is calculated or were not very familiar with it.
- 55% of respondents think the government should allow more competition in credit scoring methods.
Consumers believe there is racism present in our financial system and our credit reporting system – but not in their particular bank.
Many consumers have a more positive view of their own bank than of the financial system as a whole, with only 45% saying their bank at least sometimes treats people differently based on their race and gender. Consumers tend to have a blind spot when it comes to their bank. While more than two-thirds of consumers think the financial services industry treats customers differently based on their race and gender, they feel better about their own bank. This is true for all age groups, including millennials.
“The apparent lack of transparency and trust in financial and credit reporting systems underscores the importance of challenging legacy lending practices,” says Mike deVere, CEO of Zest AI. “The disparate impact of unfair lending practices on consumers cannot be ignored, particularly in the wake of Covid-19, and Zest AI is dedicated to ensuring the accuracy, transparency and options consumers deserve.”
Background to the survey
This survey was conducted on behalf of Zest AI by Toluna. The survey included over 1,600 respondents from various age groups.
About Zest AI
Zest AI software helps lenders make better decisions and better loans, increasing approvals, reducing risk and automating compliance. Since 2009, it has made fair and transparent credit available to everyone and is today the leader in more inclusive underwriting software. The company is headquartered in Los Angeles, California. Learn more about www.zest.ai and join us on Twitter at @Zest_AI or Zest AI Knowledge Blog.
Contact: [email protected]
SOURCE Zest AI