Risk management firm Digital Matrix Systems (DMS) has teamed up with ZestFinance to enable financial institutions to use machine learning (ML) in better managing credit risks.

The collaboration will involve integrating Zest Automated Machine Learning (ZAML) software with DMS’ Data Access Point. This will enable ML credit scoring instantly accessible to lenders.

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DMS head of Strategy & Business Development Mark Dreux said: “I believe this partnership will bring tremendous value to our clients.

“The ability to pair Zest’s ML capabilities with DMS’ standardised and normalised attributes, as well as our clients’ custom attributes via our CreditAnalyst tool, will be a big win for lenders in support of their risk management efforts.”

Machine learning-based credit models use more data signals and algorithms, compared to conventional models, to determine credit risks.

According to DMS, the use of ZAML results into a 15% increase in approval rates for customers. It also boosts booked loan rates due to more competitive pricing.

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The combination of ZAML with DMS’ Data Access Point will provide the former with consistent access to clean data.

ZestFinance founder and CEO Douglas Merrill said: “This partnership will remove a big challenge of doing ML — getting the right data in the right format.

“Together we can help more lenders use ML to approve more good borrowers and control their underwriting risk.”

Established in 1982, DMS provides risk management solutions to enable its clients make informed business decisions.

The scope of its services includes data warehousing, advanced analytics, scoring models, and comprehensive consulting services.