velera How Credit Union Innovation Can Drive Gen Z Engagement May 2024 Banner

Upstart Unveils Custom Loan Tool for Banks and CUs


Lending marketplace Upstart has debuted a tool to help lenders offer customized loan offers.

That tool, dubbed Recognized Customer Personalization (RCP), lets banks and credit unions (CUs) identify when a customer is actively seeking a loan and make them an offer of credit, Upstart said in a Thursday (April 25) news release.

“In the current economic environment, lenders are laser focused on retaining their customers and increasing the lifetime value of those relationships,” said Michael Lock, senior vice president of lending partnerships at Upstart. “RCP enables them to reach their existing customers in a new way, provide more value, and build loyalty.”

Features of the offering include instant identification of a lender’s customer and their tradeline status, allowing an immediate and automated response with a customized and branded offer of credit. It also lets lenders choose between Upstart’s artificial intelligence (AI)-enabled credit decisioning or the institution’s underwriting model.

“RCP will enable us to retain and better serve our existing members,” said Charles Eads, chief lending officer, Abound Credit Union. “This innovative program will allow us to continue to meet the financial needs of our members in the communities we serve, as well as those members who have moved outside of the area.”

PYMNTS looked at the roles personalization and customization play in credit union loan offerings last year in a conversation with Denise Stevens, senior vice president and chief product and digital officer at PSCU.

She said that these two factors are critical to offering the right credit products to members, making it possible to approve loans that might be rejected by traditional banks.

“When you look beyond the traditional ways used in this industry to approve consumers, credit unions really can get creative in that area, and they usually do,” Stevens said. “[Credit unions] need to be very focused on the innovation side of lending to ensure they have a large reach.”

Meanwhile, PYMNTS in February spoke with Michael Haney, head of product strategy at Galileo Financial Technologies, who said AI will bring about a new era in which financial services organizations use data to deliver hyper-personalized experiences

Generative AI can improve loan decisioning and other interactions, supporting loan lifecycle management from applications to credit collections, he told PYMNTS. 

“In more commercial settings, AI is already helping treasury managers within the various banks examine cash flow and interest rate changes and navigate liquidity risk,” that report said. “Hyper-personalization will be a natural by-product of AI, Haney said, although he cautioned that models must be examined to safeguard against bias.”