Two different men find themselves on two different financial paths. Source: Shutterstock

More than two-thirds of consumers said they believe racism and bias is present in the U.S. financial and credit scoring system, according to a recent survey from Zest AI, a Los Angeles-based provider of artificial intelligence-based lending software for credit unions and banks.

In the survey of over 1,600 respondents, which was conducted by market research company Toluna on behalf of Zest AI, 68% said they believe the financial services industry at least sometimes treats customers differently based on race and gender. Millennials in particular agreed with that opinion, with 74% of respondents from the generation stating they believe the financial services industry at least sometimes treats customers differently based on race and gender.

However, the survey results indicated this racism and bias is not necessarily being experienced or witnessed first-hand by consumers. Only 45% of respondents said their own bank at least sometimes treats people differently based on race and gender.

“Consumers tend to have a blind spot when it comes to their bank,” Zest AI stated in a news release detailing the survey results. “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 survey also revealed the following:

• 40% of people overall said they believe racism is at least somewhat built into the credit scoring system, but that number jumped to 55% among millennials.
• 41% of those surveyed said they either knew nothing at all about FICO’s scoring system and how each score is calculated or were not very familiar with it.
• 55% of respondents said they believe the government should allow for more competition in credit scoring methods.

“The apparent lack of transparency and trust in financial and credit-scoring systems underscores the importance of challenging legacy lending practices. The disparate impact of unfair lending practices on consumers cannot be ignored, especially in the wake of COVID-19,” Zest AI CEO Mike de Vere stated in the news release, adding that his company is dedicated to securing accuracy, transparency and options for borrowers.

Zest AI has been expanding its reach within the credit union industry this year, having formed partnerships with the Northwest Credit Union Association, California and Nevada Credit Union Leagues, the Cornerstone League, the Minnesota Credit Union Network, Montana’s Credit Unions and the Wisconsin Credit Union League – making its loan decisioning software available to credit unions all of the states represented by those associations.