Q&A with Sean Willett, EVP, Chief Administrative Officer at Five Star Bank

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With the metaphorical ink now dry, we at Zest AI are excited to announce our partnership with Five Star Bank. Across Central and Western New York State, Five Star Bank covers ten-thousand square miles of New York. This (roughly) $5.5B community bank has put their community at the heart of their business model for more than two hundred years and operates 48 branches across the state.

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Let’s dive in and get to know Five Star Bank a little more through the perspective of Sean Willet, the Executive Vice President and Chief Administrative Officer for the bank.

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Q: Tell me a little bit about Five Star Bank and the community you serve?

I would say that we’re a fairly traditional, straightforward community bank. We’re very focused on the communities we serve and offer small business lending, commercial lending, and wealth and insurance services.

This was our main area of focus and operating model going into 2020, but then we shifted gears and made it a strategic focus to be a community bank with a tech-forward and data-driven approach to our decisioning. We’re also a growing bank and we don’t always have the luxury of adding people to support influx. So we had to ask, how can we do more with less, but do it in such a way that we could support regulatory expectations at the same time? That’s what eventually led us to Zest AI.

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Q: This brings up a good point about automation. Automation scares employees at financial institutions. Any thoughts?

Automation and AI is something that we like to talk about and dispel the myth around. There’s a fear that exists that sounds something like, “If a robot or AI/ML is doing my job, what value do I add?”

The way we approach it is that yes, there are some decisions that are very straightforward when volumes of information are processed. This is something that would take a person a lot of time to do and can be inconsistent. When we let AI step in and process that information, we get more consistent results, faster. But there are going to be situations that don’t perfectly fit into the AI model, and require human intervention and subject matter expertise. AI can remove low-value, repetitive work and gives our associates time to assist on more rewarding lending activities that require the human element or a creative solution.

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Q: I did a little digging on your website and found mention of the “Five Star Promise.” Let’s talk about what that means in application and why it’s important that this promise exists.

That’s a really great question that really speaks to the “why” of the journey we’re on at Five Star Bank.

Our purpose is having people at the heart of everything we do. We want to enable our customers to be able to thrive financially. Our focus is understanding the financial journey that they’re on and how we can match solutions to them. We want to hold an advisory role in our customer’s lives and not have a huge product focus when working with them.

So we had to ask, how do we do that? You do that through data.

Now, I could sit here 24-hours, every day of the week, looking at data, but I don’t have the same speed and capacity for identifying trends, patterns, or opportunities as a machine created to analyze a lot of data quickly. That’s the key component of why we chose AI-underwriting. The beauty of AI is that it can process a lot of disparate information and identify opportunities, trends, and insights in seconds. It’s somewhat ironic, right — that we’re using technology to be more human?

But when a financial institution can understand who a customer is through data and then offer helpful solutions and insights to their specific situation, that customer walks away feeling uniquely seen and understood. As a result, a deeper relationship is built between the customer and their bank. Proactively solving for the next steps in a customer’s financial journey resonates, and ultimately allows financial institutions to be even more human through the use of data.

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Q: This also leads to another question from the website. I just have to ask about the five core values you have at Five Star Bank: Humble, Empowered, Ambitious, Resilient, and Transparent. All of them are great values, but I’d love to know which one influences and inspires your work the most?

Can I say all of them?

If I was to pick just one for my team, I would have to say ambitious. We’re always striving for excellence. But ambition objectively can’t happen without all of those other values. We have to be genuinely interested in who our customers are. We need to uniquely see them. And only then can we deliver excellence and improve our customer’s financial wellbeing — every day, any day. Anytime they need us, we can be there for them.

And now we’re looking to see where we can be more proactive and come to them with solutions instead of waiting for customers to come to us with a problem. I think that’s a key paradigm shift, especially for a small bank such as ours.

We’re flipping the script. You don’t need to be Discover to utilize AI. To make customers’ lives better, you don’t need to be Chase or Bank of America. That’s where finding partners like Zest AI really helps us remain competitive and helps us thrive as a financial institution.

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Q: Let’s get into Five Star Bank’s new partnership with Zest AI. What sold you on investing in AI for credit underwriting?

We have a large indirect auto loan business — serving about 500 dealerships in New York and Pennsylvania — that adds a pretty significant portion to our balance sheet. That area of lending sees a ton of regulatory scrutiny, so it’s vital to reflect that standard of excellence in our decisioning.

“Are you doing what’s right by the customer?” 

“Are auto dealerships lending to everyone?” 

“Are they making credit accessible to everyone?”

We’re always looking to reduce fair lending risk while broadening the number of borrowers that we could lend to at the same time. Traditional underwriting is focused on hitting a certain ‘box’ that is determined by a score, but people’s lives don’t fit into a box. We wanted to find an auditable and transparent way that we could expand our parameters for decision -making, that also made our decisions efficient and effective. That’s what brought us to AI decisioning, and ultimately Zest AI.

Zest AI is just as interested in our success and our customers’ success as they are their own. I think it’s a true partnership and collaboration versus just selling us a product. Zest AI has invested time, energy, and expertise in helping us build a solution that we think will bolster our differentiation in the marketplace. That’s a hallmark of a great partner and someone I’m equally going to be loyal to on a go-forward basis. It’s beyond transactions — it’s a meaningful relationship.

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Q: What does increased credit accessibility look like for the members Five Star Bank serves?

Credit accessibility boils down to our customers being able to get from Point A to Point B. We live in an area that doesn’t have robust public transportation systems. People really rely on their cars for their lifestyles, whether that be work, social, leisure, etc. For us, it’s just as important for someone in urban areas like Buffalo and Rochester to have reliable and affordable transportation than someone in a more rural area.

It’s ultimately about being able to provide that access to our customers, regardless of who they are. It’s a thoughtful and disciplined approach in finding credit opportunities where we wouldn’t have looked previously. It’s thinking outside of the box and providing credit outside of the box — in a very credit-disciplined way, of course.

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