Upstart uses AI and more data than traditional credit scorers to dig deeper into a borrower’s true risk and match customers and lenders who trust his proven research.
According to Rouse, the company’s AI has led to the approval of customers who are not correctly seen by the market as a high risk and avoids loan customers who mistakenly think it is a security. This increase in accuracy has led to a 43 percent increase in approval rates and a 43 percent drop in interest rates in the company’s own business. loans, according to Upstart.
Upstart automates all of its payment processing, according to Upstart CEO Dave Girouard, but customers’ information may still need to be verified. While AI also helps here, only one-third of personal loans are actually used without additional sales support, according to Rouse. But he said this segment can happen, noting that Upstart’s personal loans were fully utilized 75 percent of the time.
“That’s where we think we’re headed,” Rouse said.
Girouard said he thought the rate could be higher for car loans, because the risk of fraud in that area is reduced by the dealers who look at the applicants.
According to Rouse, Upstart’s digital marketing and lending allows for adding financing and insurance to a transaction.
“One of the key features of AI financing is that we can qualify people for more loans,” he said.
Girouard sees a role for Upstart in helping auto finance companies capture more volume and reduce losses, and he said the company is in talks with those lenders. related to cars.
“I think that’s something we hope for in the future,” he said.