Innovation and Inclusion in AI Credit Risk Models
Executive SummaryBuilding upon the “people helping people” credit union philosophy, C-level decision-makers must continually rethink the member experience. Increasingly, that includes adopting smarter credit risk models that harvest alternative data sources to create new member opportunities and enable frictionless transactions.Gone are the days of a credit union relying solely on traditional risk models such as FICO, who founded its scoring model in 1956 and focuses on payment history, amounts owed, length of credit history and credit mix. While a FICO score still has value, with time comes change. In today’s marketplace, whether dealing with prime or subprime lenders, a credit union that relies on traditional credit scores alone is unwillingly experiencing a lack of precision, which lead...