Zest AI Debuts LuLu Strategy for GenAI-Powered Lending Intelligence

Zest AI says it has introduced a tool to help banks make AI-powered lending decisions.

LuLu Strategy is the newest model of the company’s artificial intelligence (AI) lending intelligence platform, according to a Monday (May 5) news release. The new offering will — at least initially — be available exclusively to customers of digital lending firm MeridianLink, per the release.

“By equipping financial institutions with advanced generative AI tools like LuLu Strategy, we’re not just helping individual organizations, we’re strengthening the entire financial ecosystem by fostering greater innovation throughout the sector,” Zest AI CEO Mike de Vere said in the release. “Now, financial institutions have better insights to responsibly expand access to affordable credit to Main Street consumers, which strengthens the economy overall.”

By teaming with MeridianLink, he added, Zest can scale its solution quickly across the financial services landscape, giving regional banks and credit unions the same level of technology that was once exclusively available via national lenders.

According to the release, the platform offers lenders a deeper understanding of borrower behavior patterns, as well as loan performance monitoring and policy simulations. It also gives banks and credit unions lending performance insights with generative AI simulations and actionable analysis.

In addition to using AI for lending decisions, Zest also employs the technology to fight fraud, something PYMNTS explored in an interview with de Vere last month.

“Fraud is only going to get worse with the creation of generative AI,” he said.

As that report noted, research by PYMNTS Intelligence has found that 28% of consumers fell victim to credit card fraud last year. In addition, 37% said they were “very” or “extremely” worried about falling victim to such fraud.

De Vere told PYMNTS that fraud losses are projected to reach $40 billion by 2027, with fraud tools becoming more accessible. For as little as $20 he said, criminals can do things like create fake IDs and pay stubs.

The CEO also shared some misconceptions about fraud prevention, such as the notion that fraudsters only target bigger financial institutions. In fact, 80% of banks and credit unions, smaller ones included, reported fraud losses of more than $500,000 last year.

“It disproportionately impacts smaller financial institutions,” de Vere said. “A fraudster going up against Citi’s IT team is probably going to be less successful than [targeting] a tiny credit union that outsources their IT.”

For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.