More than two-thirds of consumers say that racism and bias is present in the US financial and credit scoring system, revealed a new survey; highlighting the lack of transparency and trust in banks.
The survey carried out by software firm Zest AI of over 1,600 consumers’ views on the financial and credit scoring systems in America, revealed a persistent lack of consumer trust. The financial services industry has struggled for years to achieve more equitable outcomes in lending practices; and while many banks are realising that legacy methods of measuring creditworthiness aren’t working, Zest AI’s survey found that 68% of Americans believe the financial services industry sometimes treats customers differently based on race and gender.
Millennials feel particularly passionately about this; with 74% believing the financial services industry at least sometimes treats customers differently based on race and gender. Around 40% of the population believe racism is at least somewhat built into the credit scoring system; but that number jumps to 55% amongst millennials.
LACK OF TRANSPARENCY & TRUST
That said, many consumers have a more positive outlook on their own bank than the financial system overall; with only 45% saying their bank at least sometimes treats people differently based on race and gender. The survey found that consumers tend to have a blind spot when it comes to their bank. While more than two-thirds of consumers believe the financial services industry treats customers differently based on race and gender; they feel better about their own bank. This holds true across age demographics, including millennials.
“The apparent lack of transparency and trust in financial and credit-scoring systems underscores the importance of challenging legacy lending practices,” stated Mike de Vere, CEO of Zest AI. “The disparate impact of unfair lending practices on consumers cannot be ignored; especially in the wake of Covid-19. And Zest AI is dedicated to securing the accuracy, transparency, and options consumers deserve.”
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