A partnership between credit and risk decisions company Stratyfy and Beneficial State Foundation is designed to combat ethnic and racial disparities in lending. The partnership was formed under the auspices of the Foundation’s Underwriting for Racial Justice (URJ) program. URJ consists of a team of financial institutions and “equity champions” tasked with identifying ways to improve access to credit for underserved communities and individuals.
The partnership has kicked off a two-year pilot program that will resource capital for people of color with the goal of stimulating wealth-building in their communities. To this end, 20 lenders will use Stratyfy’s technology, including its credit risk and decision optimization solutions, to remove bias from the credit decisioning process and encourage the fairest possible outcomes. Beneficial State Foundation Executive Director and Chief Impact Officer Erin Kilmer Neel called Stratyfy a “key partner” in the effort. Stratyfy co-founder and CEO Laura Kornhauser praised the institutions who are supporting the initiative.
“The innovative lenders selected for the URJ program are redefining how people of color in their communities are able to access credit,” Kornhauser said. “And Stratyfy is the technology chosen to deliver the collective insights and recommended actions to make it happen.”
The selected lenders are:
- Beneficial State Bank
- Berkshire Bank
- Chehalis Tribal Loan Fund
- Community Vision
- Eastern Bank
- Enterprise Community Loan Fund (ECLF)
- Leech Lake Financial Services
- Montecito Bank & Trust
- NBT Bank, N.A.
- New Orleans Fireman’s Federal Credit Union
- REDF Impact Investing Fund
- Rivermark Community Credit Union
- Texas National Bank
- Twin Cities Habitat for Humanity Lending, Inc.
- Urban Redevelopment Authority
- Vermont Community Loan Fund
- Working Solutions CDFI
- Washington State Employees Credit Union
Leaders from both the Vermont Community Loan Fund and NBT Bank underscored the opportunity to work together on behalf of greater financial inclusion. “Our team looks forward to collaborating with the 20-lender cohort to enhance our individual and collective impact on racial equity in lending,” NBT EVP and Consumer Lending Executive Shauna M. Hyle said. Forbes named NBT Bank to its World’s Best Banks roster this year, making NBT Bank the highest rated bank in the state.
Founded in 2017, Stratyfy made its Finovate debut in 2018. The company won Best of Show in its return to the Finovate stage last September at FinovateFall. At the conference, the company demoed its UnBias solution. Unbias enables financial institutions and fintechs to uncover and undo bias in complex financial decisions. The API-delivered technology is one of many transparent, machine learning tools Stratyfy offers to help companies minimize bias and improve risk-adjusted returns.
New York-based Stratyfy raised more than $10 million in funding this spring. Truist Ventures and Zeal Capital Partners co-led the round.