Earnest

Earnest increases automated approval rate by 56% with Alloy
 

Alloy helps Earnest optimize customer onboarding and underwriting to boost conversion rates

01. At a Glance 02. Challenge 03. Solution 04. Outcome

At a glance

Industry
Business Banking
Company Size
300+
Established
2013
Headquartered
San Francisco, California

Earnest — which was recently named by CNBC as one of the world’s top fintechs — is a leading student loan provider. The company was founded in 2013 on the belief that financially responsible people deserve better options and access to credit. Earnest's education tools and lending products empower anyone seeking higher education to reduce the total price tag of their education, supercharge their ability to pay down student debt, and get on the right financial track fast. 

In partnership with Alloy, Earnest uses a data-driven approach to assess applicants' creditworthiness, taking into account factors such as education, employment, and financial history, in addition to traditional credit scores.

56%
increase in automated approval rate
89%
decrease in the average time it takes to make a policy change

The Challenge: Earnest needed to streamline customer experience

In a space historically dominated by one major player, Earnest knew they needed to offer a premium, seamless customer experience to compete and grow. They felt the delays caused by unnecessary manual reviews hindered their customer experience and dragged down conversion rates. 

“It’s a challenging macro environment right now: inflation is affecting customers, consumer credit is rising, and the cost of education has never been higher. Students are stressed, and there’s a lot of confusion in the space. All these factors make it even more important to be able to give our applicants a decision right away. Quickly assessing the risk on customers and underwriting them accordingly is critically important to us.”

Dave Moy, Credit Strategy and Portfolio Analytics Manager

The Solution: Earnest implemented Alloy to transform their customer onboarding and underwriting process

In 2023, Earnest began looking for a technology provider to consolidate all their product lines into one risk management system, decrease their manual review rate, increase their speed to market, and allow them to test and implement new data sources swiftly. Ultimately, they chose Alloy as their identity risk management solution.

“From a technical perspective, we knew we’d be able to integrate with Alloy seamlessly. We got sandbox access early on, which built a lot of confidence on our side. And from a risk-user perspective, we were able to see right away that Alloy had the functionality for us to make all the changes we wanted to make to improve our customer experience.”

Dave Moy, Credit Strategy and Portfolio Analytics Manager

The Outcome: Alloy helped Earnest cut the time it took to implement changes to their credit policy by 89%, while auto approval rates rose from 45% to over 70%

After implementing Alloy’s Identity Risk Solution, Earnest unlocked access to over 200 data sources to verify and underwrite their applicants faster and more efficiently — ultimately contributing to a reduction in decision time since launching with Alloy. 

“Having access to best-in-class third-party data sources ultimately helps our customer experience. As a lending business, we’re very focused on conversions. Alloy connects us to more data sources, which helps us increase the speed at which we’re able to give applicants a decision.”

Jun Cho, Senior Product Manager

Earnest's team members are now power users of Alloy’s Testing Suite. The Testing Suite allows their team to fine-tune their existing workflows and vet potential new data vendors without utilizing valuable engineering resources.

“Vendor integration was a pretty heavy lift on us pre-Alloy. After integrating with Alloy, we were able to integrate with our existing vendors seamlessly, and now we can easily experiment with new data vendors, too. We utilize A/B testing, Champion Challenger, and batch testing to optimize our policies before we set them live.” - Dave Moy, Credit Strategy and Portfolio Analytics Manager

Before Alloy, it was an incredibly labor-intensive task for Earnest to make changes to their credit policies. Alloy has drastically reduced the time it takes for the Earnest team to implement policy changes. 
 

“Before integrating with Alloy, it would take 2-3 sprints or 4-6 weeks to make even simple changes. With Alloy, we got that down to implementing changes in production within 3-6 days, allowing our engineers to focus on other more critical product-related tasks.”

Dave Moy, Credit Strategy and Portfolio Analytics Manager

With Alloy, Earnest’s risk management teams are empowered to make swift changes to their credit policies, without relying on their engineering teams. Meanwhile, their improved workflows allow them to provide instant decisions to more applicants, leading to a significantly higher conversion rate.

Earnest Loans are made by Earnest Operations LLC or One American Bank, Member FDIC. or FinWise Bank, Member FDIC. Earnest Operations LLC, NMLS #1204917. 535 Mission St., Suite 1663, San Francisco, CA 94105. California Financing Law License 6054788. Visit www.earnest.com/licenses for a full list of licensed states. For California residents: Loans will be arranged or made pursuant to a California Financing Law License. One American Bank, 515 S. Minnesota Ave, Sioux Falls, SD 57104. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107.

Earnest loans are serviced by Earnest Operations LLC with support from Navient Solutions LLC (NMLS #212430). One American Bank, FinWise Bank, and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. 

nmlsconsumeraccess.org 
© 2024 Earnest LLC. All rights reserved.

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