Digital Technology
In 2017, 81 percent of U.S. Americans have a social media profile, representing a five percent growth compared to the previous year. Pick your poison. Facebook. Instagram. Twitter. Snapchat. LinkedIn. The list goes on, and it is clear social media is used by all. Grandma and grandpa are hooked, and tweens are begging for accounts. Factor in the amount of data being generated by our social media obsession – one report claims Americans are using 2,675,700 GB of Internet data per minute – and it makes some lenders wonder if social media insights can be used to assess credit risk. Can banks, credit unions and online lenders look at social media profiles when making a loan decision and garner intel to help them make a credit decision? After all, in some circles, people believe a person’s character is just as important as their income and assets when making a lending decision. Certainly, some businesses are seeing value in collecting social media insights for marketing purposes. An individual’s interests, likes and click-throughs reveal a lot about their lifestyle and potential brand linkages. But credit decisions are different. In fact, there are two key concerns when considering social media data as it pertains to financial decisions. There is that little rule called the Equal Credit Opportunity Act, which states credit must be extended to all creditworthy applicants regardless of race, religion, gender, marital status, age and other personal characteristics. A quick scan of any Facebook profile can reveal these things, and more. Credit applications do not ask for these specific details for this very reason. Social media data can also be manipulated. One can “like” financial articles, participate in educational quizzes and represent themselves as if they are financially responsible. Social media can be gamed. On the flip side, a consumer can’t manipulate their payment history. There is no question that data is essential for all aspects of the financial services industry, but when it comes to making credit decisions on a consumer, FCRA data trumps everything. In the consumer’s best interest, it is essential that credit data be both displayable and disputable. The right data must be used. For lenders, their primary goal is to assess a consumer’s stability, ability and willingness to pay. Today, social media can’t address those needs. It’s not to say that social media data can’t be used in the future, but financial institutions are still grappling with how it can be predictive of credit behavior over time. In the meantime, other sources of data are being evaluated. Everything from including on-time utility and rental payments, insights on smaller dollar loans and various credit attributes can help to provide a more holistic view of today’s credit consumer. There is no question social media data will continue to grow exponentially. But in the world of credit decisioning, the “like” button cannot be given quite yet.
Earlier this week, Javelin Strategy & Research announced its inaugural edition of the 2017 Identity Proofing Platform Awards. We were honored to see CrossCore as the leader – taking the award for the best overall identity proofing platform. According to the report, “Experian’s identity proofing platform is a strong performer in every category of Javelin’s FIT model. It is functional. It is innovative. And, most important, it is tailored toward the advisory’s expectations. The comprehensive nature of CrossCore makes it the market-leading solution for identity proofing.” It’s harder than ever to confidently identify your customers in today’s digital economy. You have lots of vendor solutions to choose from in the identity proofing space. And, now Javelin has made it much easier for you to select the partner that is right for your needs. Javelin’s newly minted Identity Proofing Platform Scorecard assesses current capabilities in the market to help you make that decision. And they have done a lot of the heavy lifting, looking across 23 vendors and scoring them based on three categories of their FIT model – functional, innovative, and tailored. Protecting customers is a priority for you – and for us. Here at Experian, we have a range of capabilities to help businesses manage identity proofing, and our CrossCore platform brings them all together. We launched CrossCore last year, with the goal of making the industry’s fraud and identity solutions work better for everyone. CrossCore delivers a future-proof way to modify strategies quickly, catch fraud faster, improve compliance and enhance the customer experience. We’re proud of the work we’ve done so far, integrating our products as well as adding more than 10 partners to the program. We’re pleased to see so many of our partners included in Javelin’s report. We’re working closely with our clients to pull in more partner capabilities, and further enhance our own platform to create a layered approach that supports a risk-based, adaptable strategy. As highlighted in the Javelin report, a reliance on traditional identity verification approaches are no longer sufficient or appropriate for digital channels. With CrossCore, our clients can choose the capabilities they want, when they want them, to dial in the right confidence level for each and every transaction. This is because CrossCore supports a layered approach to managing risk, allowing companies to connect multiple disparate services through a common access point. We are committed to making it easier for you to protect consumers against fraud. CrossCore is helping us all do just that.
The collections space has been migrating from traditional mail and outbound calls to electronic payment portals, digital collections and virtual negotiators. Now that collectors have had time to test virtual collections, we’ve collected some data points. Here are a few: On average, 52% of consumers who visit a digital site will proceed to a payment schedule if the right offer is made. 21% of the visits were outside the core hours of 8 a.m. to 8 p.m., an indication that traditional business hours don’t always work. Of the consumers who committed to a payment plan, only 56% did it in a single visit. The remaining 44% did so mostly later that day or on a subsequent day. As more financial institutions test this new virtual approach, we anticipate customer satisfaction and resolutions will continue to climb. Get your debt collections right>
We use our laptops and mobile phones every day to communicate with our friends, family, and co-workers. But how do software programs communicate with each other? APIs--Application Programming Interfaces--are the hidden backbone of our modern world, allowing software programs to communicate with one another. Behind the scenes of every app and website we use, is a mesh of systems “talking” to each other through a series of APIs. Today, the API economy is quickly changing how the world interacts. Everything from photo sharing, to online shopping, to hailing a cab is happening through APIs. Because of APIs, technical innovation is happening at a faster pace than ever. We caught up with Edgar Uaje, senior product manager at Experian, to find out more about APIs in the financial services space. What exactly are APIs and why are they so important? And how do they apply to B2B? APIs are the building blocks of many of our applications that exist today. They are an intermediary that allows application programs to communicate, interact, and share data with various operating systems or other control programs. In B2B, APIs allow our clients to consume our data, products, and services in a standard format. They can utilize the APIs for internal systems to feed their risk models or external applications for their customers. As Experian has new data and services available, our clients can quickly access the data and services. Are APIs secure? APIs are secure as long as the right security measures are put in place. There are many security measures that can be utilized such as authentication, authorization, channel encryption and payload encryption. Experian takes security seriously and ensures that the right security measures are put in place to protect our data. For example, one of the recent APIs that was built this year utilizes OAuth, channel encryption, and payload encryption. The central role of APIs is promoting innovation and rapid but stable evolution, but they seem to only have taken hold selectively in much of the business world. Is the world of financial services truly ready for APIs? APIs have been around for a long time, but they are getting much more traction recently. Financial tech and online market place lending companies are leading the charge of consuming data, products, and services through APIs because they are nimble and fast. With standard API interfaces, these companies can move as fast as their development teams can. The world of financial services is evolving, and the time is now for them to embrace APIs in day-to-day business. How can APIs benefit a bank or credit union, for example? APIs can benefit a bank or credit union by allowing them to consume Experian data, products, and services in a standard format. The value to them is faster speed to market for applications (internal/external), ease of integration, and control over the user’s experience. APIs allow a bank or credit union to quickly develop new and innovative applications quickly, with the support of their development teams. Can you tell us more about the API Developer Portal? Experian will publish the documentation of our available APIs on our Developer Portal over time as they become available. Our clients will have a one-stop shop to view available APIs, review API documentation, obtain credentials, and test APIs. This is simplifying data access by utilizing REST API, making it easier for our clients.
We regularly hear from clients that charge-offs are increasing and they’re struggling to keep up with the credit loss. Many clients use the same debt collection strategy they’ve used for years – when businesses or consumers can’t repay a loan, the creditor or collection agency aggressively contacts them via phone or mail to obtain repayment – never considering the customer experience for the debtor. Our data shows that consumers accounted for $37.24 billion in bankcard charge-offs in Q2 2017, a 17.1 percent increase from Q2 2016. Absorbing credit losses at such a high rate can impact the sustainability of the institution. Clearly the process could use some adjusting. Traditionally, debt collection has been solely about the money. The priority was ensuring that as much of the outstanding debt as possible was repaid. But collecting needs to be about more than that. It also should focus on the customer and his or her individual situation. When it comes to debt collection, customers should not all be treated the same way. I recently shared some tips in Credit Union Business Magazine about how to actively engage and collect from members. The same holds true for other financial institutions – they need to know the difference between a customer who has simply forgotten to make a payment and one who is dealing with financial hardship. As an example, if a person is current on his or her mortgage payment but has slipped behind on his or her credit card payment, that doesn’t necessarily signify financial hardship. It’s an opportunity to work with the customer to manage the debt and get back to current. Modern financial institutions build acquisition and customer management strategies targeted at individuals, so why should the collection process be any different? The challenge is keeping the customer at the center while also managing against potential increases in delinquencies. This holistic approach may be slightly more complex, but technology and analytics will simplify the process and bring about a more engaging experience for customers. The Power of Data and Technology Instead of relying on the same outdated collections approach – which results in uncomfortable exchanges on the phone that don’t ensure repayment –leverage data to your advantage. The data and technology exists to help you make more informed decisions, such as: What’s the most effective communication channel to reach the defaulting customer? When should you contact him or her? How often? The best course of action could be high-touch outreach, but sometimes doing nothing is the right approach. It all depends on the situation. Data and analytics can help uncover which customers are most likely to pay on their own and those who may need a little more help, allowing you to adjust your treatment strategy accordingly. By catering to the preferences of the customer, there’s a greater chance for a positive experience on both sides. The results: less charge-off debt, higher customer satisfaction and a stronger relationship. Explore the Digital Age In 2016, 36 million Americans made some form of mobile payment—paying a bill, purchasing something online, or paying for fast food, or making a Mobile Wallet purchase at a retailer. By 2020, nearly 184 million consumers will have done so, according to Aite. Consumers expect and deserve convenience. In the digital world, financial institutions have an opportunity to provide that expectation and then some. Imagine a customer being able to negotiate and manage his or her past-due account virtually, in the privacy of his or her own home, when it’s most convenient, to set their payment dates and terms. Luckily, the technology exists to make this vision a reality. Customers, not money, need to be at the heart of every debt collections strategy. Gone are the days of mass phone calls to debtors. That strategy made consumers unhappy, embarrassed and resentful. Successful debt collection comes down to a basic philosophy: Treat customers and his or her unique situation individually rather than as a portfolio profile. The creditors who live by that philosophy have an opportunity to reap the rewards on the back-end.
We live in a digital world where online identities are ubiquitous. But with the internet’s inherent anonymity, how do you know you’re interacting with a legitimate individual rather than an imposter? Too often we hear stories about consumers who see unauthorized purchases on their credit cards, enable access to their devices based on an imposter claiming to be a security vendor or send money to someone they met online only to learn they’ve been “catfished” by a fraudster. These are growing problems, as more consumers transition to digital services and look to businesses to protect them, enable seamless trusted interactions and maintain their privacy. I recently chatted with MarketWatch about how consumers can protect themselves and their privacy when using online dating apps, as well as what businesses are doing to safeguard digital data. As part of the discussion, I mentioned that a simple, standard verification process companies of all sizes can leverage is vital to our rapidly evolving digital economy. Today, companies have their own policies, processes and definitions of identity verification, depending on the services they offer. This ranges from secure access requiring strong identity proofing, document verification, multifactor authentication and biometric enrollment to new social profiles that do little more than validate receipt of an email to establish an online account. To satisfy those diverse risk-based needs, more organizations are turning to federated identity verification options. A federated system allows businesses to leverage trusted, reputable, third-party sources to validate identity by cross-referencing the information they’ve received from a consumer against these sources to determine whether to establish an account or allow a transaction. While some organizations have attempted to develop similar identity verification capabilities, many lack a trusted identity source. For example, there are solutions that leverage data from social media accounts or provide multifactor fraud and authentication options, but they often become easily compromised because of the absence of verifiable data. A trusted solution aggregates data across multiple providers that have undergone thorough security and data quality vetting to ensure the identity data is accurately submitted in accordance with business and compliance requirements. In fact, there are only a handful of trusted identity sources with this level of due diligence and oversight. At Experian, we assess verification requests against an aggregate of hundreds of millions of records that include identity relationships, profile risk attributes, historical usage records and demographic data assets. With decades of knowledge about identity management and fraud prevention, we help companies of all sizes balance risk mitigation and maintain compliance requirements — all while ensuring consumer data privacy. Trust takes years to build and mere seconds to lose, and the industry has made undeniable progress in security. But there is much left to do. Consumers are increasingly involved in the protection and use of their data. However, they often don’t realize downloading a hot new app and entering personal details or linking to their friends exposes them to unnecessary risk. It’s important for businesses to be clear about their identity verification processes so consumers can make educated decisions before electing to provide invaluable identity data. The most effective fraud prevention and identity strategy is one that quickly establishes trust without inconveniencing the consumer. By staying up to date on verification methods, businesses can ensure customers have a smooth, personalized and engaging online experience.
This summer, Experian is releasing the market’s first-ever credit solution that enables consumers to apply for credit with a simple text message. Utilizing patent-pending mobile identification through our Smart Lookup process, most consumers will be recognized by their device credentials and in turn bypass the need to fill out a lengthy credit application. To learn more about this new technology and how the innovation came to market, we interviewed Steve Yin, Experian’s Vice President of New Ventures for the DataLabs. Yin has worked with a few dozen clients to gain feedback and gauge interest on this idea, which was birthed in early spring 2016. 1. Tell me about Experian’s DataLabs. How long has it existed and what type of work is produced here? The DataLabs was started a bit over six years ago by Eric Haller – current Global EVP of the DataLabs – with the vision of providing an advanced data R&D, analytics, and incubation capability for Experian and our largest clients. The group started with one lab in San Diego supporting a handful of business units in North America. Today we have DataLabs on three continents supporting all the business units and geographies where Experian does business around the world. The work we focus on is usually new market and new data/technology. We endeavor to follow an experimental design approach in most of our projects and products: identify a problem, develop a hypothesis, and execute on research to germinate a solution. Given our relatively small size compared to Experian overall, we must be very disciplined about the types of projects and products we take on. We filter projects by potential impact (big marketing, complex problems, leveraged opportunities) and probability of success. Our projects are initiated by one of three primary avenues: client discussion/request, internal discussion/request, and organic discovery within the DataLabs. 2. Text for CreditTM is one of Experian’s newest products, and I understand the DataLabs was instrumental in the development from concept to end-product. How did this idea emerge and shape in the Lab? The concept evolved after talking with our clients who were trying to figure out how they could provide access to credit to potential customers through their mobile devices. With the explosion of smartphones and the attachment people have to them, it felt odd that the credit application process had not evolved to synch up with the mobile experience individuals enjoy in every other aspect of their lives. Customers don’t want to fill out lengthy forms to apply for credit, nor do they want to discover they may not qualify for a credit offer at the cash register after being invited to open a store card. We wanted to find a way to provide the customer with the ability to apply for credit seamlessly on their devices, limiting the fields of data they needed to supply, and also enhance the overall credit experience for retailers and consumers. Our DataLabs allow us the runway to preform breakthrough experimentations with data. After trial and error with many different approaches in the lab, we knew we had a winner with text for credit. It’s easy to use, the customer experience is frictionless, it requires minimal infrastructure from our clients and it can be implemented to solve for a large variety of instant credit situations. 3. What excites you most about this product? This has been a fun project. There are several things that make it cool, and most revolve around the reception we’ve had with clients, knowing that we’re delivering something innovative and useful to our clients, their partners and ultimately to consumers. We’re enabling a segment of the consumer landscape to interact with financial institutions on their own terms, from their mobile devices. 4. Have clients been closely involved in providing feedback on the concept and overall product design? Definitely. We’ve been working with clients on refining the concept, design and delivery of Text for Credit since almost day one. We learned very early on that private branding and a flexible user experience would be important since clients have different needs and desires relative to user flow. We also learned that simple integration with existing systems would enable adoption. And critically, we confirmed that providing a total solution rather than small components would enable us to position Text for Credit very differently and facilitate a great end-user experience for our clients. 5. Mobile is now clearly a dominant channel for consumers, and it only makes sense for lenders to embrace it. Is there more on the horizon for the world of mobile and credit optimization? Text for Credit is a beachhead of our broader mobile discovery and development. As clients begin to embrace delivery of credit in a mobile-first environment, we can foresee evolutions like the location-based triggers and integration with cross-channel marketing initiatives spanning social media, paid electric media, market places, and perhaps even integration with voice. In addition to this broadening of offerings, we may also look to creating greater functional value for clients in specific verticals where mobile devices are inherently suited for data and decision delivery. This could include streamlined credit in retail, auto, and mortgage markets where being able to offer credit at the right time, at the right place, to the right people would deliver great value for our clients. I think we’re in a unique position as a company to deliver on this promise within the credit space. Learn more
Call it big data, smart data or evidence-based decision-making. It’s not just the latest fad, it’s the future of how business will be guided and grow. Here are a few telling stats that show data is exploding and a new age is upon us: Data is growing faster than ever before, and we’re on track to create about 1.7 megabytes of new information per person every second by 2020. The social universe—which includes every digitally connected person—doubles in size every two years. By 2020, it will reach 44 zettabytes or 44 trillion gigabytes, according to CIO. In 2015, more than 1 billion people used Facebook and sent an average of 31.25 million messages and viewed 2.77 million videos each minute. More than 100 terabytes of data is uploaded daily to the social channel. By 2020, more than 6.1 billion smartphone users will exist globally. And there will be more than 50 billion smart connected devices in the world, all capable of collecting, analyzing and sharing a wealth of data. More than one-third of all data will pass through or exist in the cloud by 2020. The IDC estimates that by 2020, business transactions on the internet—business-to-business and business-to-consumer—will reach 450 billion per day. All of this new data means we’ll be looking at a whole new set of possibilities and a new level of complexity in the years ahead. The data itself is of great value, however, lenders need the right automated decisioning platform to store, collect, quickly process and analyze the volumes of consumer data to gain accurate consumer stories. While lenders don’t necessarily need to factor in decisioning on social media uploads and video views, there is an expectation for immediacy to know if a consumer is approved, denied or conditioned. Online lenders have figured out how to quickly capture and understand big data, and are expected to account for $122 billion in lending by 2020. This places more pressure on banks and credit unions to enhance their technology to cut down on loan approval times and move away from various manual touch points. Critics of automated decisioning solutions used in lending cite compliance issues, complacency by lenders and lack of human involvement. But a robust platform enables lenders to improve and supplement their current decisioning processes because it is: Agile: Experian hosts our client’s solutions and decisioning strategies, so we are able to make and deploy changes quickly as the needs of the market and business change, and deliver real-time instant decisions while a consumer is at the point of sale. A hosted environment also means reduced implementation timelines, as no software or hardware installation is required, allowing lenders to recognize value faster. A data work horse: Internal and external data can be pulled from multiple sources into a lender’s decisioning model. Lenders may also access an unlimited number of scores and attributes—including real-time access to credit bureau data—and integrate third-party data sources into the decisioning engine. Powerful: A robust decision engine is capable of calculating numerous predictive attributes and custom scoring models, and can also test new strategies against current decision models or perform “what if” simulations on historical data. Data collection, storage and analysis are here to stay. As will be the businesses which are savvy enough to use a solution that can find opportunities and learnings in all of that complex data, quickly curate the best possible actions to take for positive outcomes, and allow lenders and marketers to execute on those recommendations with the click of a button. To learn more about Experian’s decisioning solutions, you can additionally explore our PowerCurve and Attribute Toolbox solutions.
The creation of synthetic identities (synthetic id) relies upon an ecosystem of institutions, data aggregators, credit reporting agencies and consumers. All of which are exploited by an online and mobile-driven market, along with an increase in data breaches and dark web sharing. It’s a real and growing problem that’s impacting all markets. With significant focus on new customer acquisition and particular attention being paid to underbanked, emerging, and new-to-country consumers, this poses a large threat to your onboarding and customer management policies, in addition to overall profitability. Synthetic identity fraud is an epidemic that does more than negatively affect portfolio performance. It can hurt your reputation as a trusted organization and expose institutions, like yours, as paths of lesser resistance for fraudsters to use in the creation and farming of synthetic identities. Here is a suggested four-pronged approach to mitigate this type of fraud: The first step is knowing your risk exposure to synthetic identity fraud. Identify how much you could lose or are losing today using a targeted segmentation analysis to examine portfolios or customer populations. Next, review your front- and back-end identity screening operational processes and procedures and analyze that information to ensure you have industry best practices, procedures and verification tools deployed. Then incorporate data, analytics and some of the industry’s cutting edge tools. This enables you to perform targeted consumer authentication and identify opportunities to better capture the majority of fraud and operational waste. Lastly, ensure your organization is part of the solution – not the problem. Analyze your portfolio data quality as reported to credit reporting agencies and then minimize your exposure to negative compliance audit results and reputational risk. Our fraud and identity management consultants can help you reduce synthetic identity fraud losses through a multilayer methodology design that combats the rise in synthetic identity creation and use in fraud schemes.
Today is a great day for Experian and our automotive clients. We’ve been working with String Automotive for several years, and have now taken the next step in our relationship, as String Automotive has become part of the Experian family. In today’s generally flat new-car market, successful dealers need the perfect mix of data and market intelligence to drive more sales, cultivate deeper customer relationships and develop new ways of better conquesting customers from their competition. String Automotive’s Dealer Positioning System, matched with our own information and data-driven insights, provides our automotive dealer clients with an ideal solution to grow their businesses. It is the only platform to combine dealership website analytics and inventory information with automotive market, consumer demographic and purchasing behavior data. Simply put, it takes the pulse of each dealership’s local market and guides dealers to make the most profitable, proactive decisions for every store and unique situation. This powerful analytics solution simplifies choices like how to spend marketing dollars and where to target conquesting efforts by letting market and dealership data drive decisions. What’s the bottom line? The Dealer Positioning System increases profitability across the dealership. It’s one thing to hear that message from us, but we also hear of the benefits from our clients. Paul Schnell, digital marketing director at Wilsonville Toyota in Oregon, had this to say: \"There is no \'I wonder if...\' with the Dealer Positioning System®. Now it is, \'I know it and I can act on it today’. Their latest tools give us zip-code-level intelligence that\'s just not available at the dealer level any other way. We are micro-targeting the perfect message with the perfect vehicle to the perfect prospect.\" For more information on Experian or our other automotive products and services, please visit www.experian.com/automotive. For more information about String Automotive and the Dealer Positioning System, please visit http://stringautomotive.com/Dealer_Positioning_System.
Experian’s ID Fraud Tracker, a quarterly analysis of fraud rates across consumer financial products, found that British families who are struggling financially — about 4 million people — are increasingly becoming prime targets of financial fraud. The research performed on data from 2014 to 2016 in the United Kingdom also revealed: There has been a 203% increase in the total number of fraudulent credit applications over the past two years. Current account, credit card and loan fraud were the most common types of credit products fraudsters applied for in other people’s names, making up 94% of the total. 35% of all third-party fraud came from households with high salaries and large disposable incomes. Fraud’s increasing around the world. We all have a responsibility to be vigilant and take measures to protect our business and customers, online and offline. Protect your customers >
There are about as many definitions for people-based marketing as there are companies using the term. Each company seems to skew the definition to fit their particular service offering. The distinctions are vast, and especially for financial services companies running regulated campaigns, they can be incredibly important. At Experian, we define people-based marketing in its purest form: targeting at the individual level across channels. This is a practice we’re very familiar with in offline marketing, having honed arguably one of the most accurate views of U.S. consumers over the past three decades. And now we’re taking those tried and true principals and applying them to digital channels. It’s not as easy as it sounds. The challenge with people-based marketing With direct mail, people-based marketing was easy. Jane Doe lives at 123 Main St. If I want to reach her, I can simply send her a direct mail piece at that address. To help, I can utilize any number of services, including the National Change of Address database, to know where to reach her if she ever moves. People-based marketing through digital channels is exponentially more difficult. While direct mail has one signal with which you use to identify a consumer (the address), digital channels offer countless signals. And not all of those signals can be used, either individually or in conjunction with other signals, to reliably tie a consumer to a persistent offline ID. A prime example of this is cookies. The problem with cookies A cookie, in and of itself, isn’t the problem. The problem is the linkage. How was a cookie associated with the person to whom the ad is being served? As marketers, we need to make sure that we are reaching the right people with the right ad … and more importantly not reaching those people who have opted out. This is especially true in the world of regulated data, where you need to know who you are targeting. And cookie-based linkage is controlled by a handful of companies, many of which are walled gardens who don’t share how they link offline people to online cookies and don’t collect this information directly. They rely on other third-party websites to gather PII, and connect it to their cookies. In some cases, the data is very accurate (especially with transaction data). In some cases, it is not (think websites that collect PII when giving surveys, offering coupons, etc.). In short, in order for you to use cookie-based targeting accurately, you need to have insight into the source of the base linkage data that was used to connect the offline consumer record to the online cookie. This same concept applies to all forms of digital linkage that drive people-based marketing. Why does people-based marketing matter in digital credit marketing? With campaigns that utilize non-regulated data, such as “Invitation to Apply” campaigns that are driven from demographic and psychographic data, the consequences of not reaching the consumer you meant to target are negligible. But with campaigns that utilize regulated data, you must ensure you’re targeting the exact consumer you meant to reach. More importantly, you must make sure you’re not targeting an ad to a consumer who had previously opted out of receiving offers driven with regulated data (prescreen offers, for example). Even if you’ve already delivered a direct mail piece with the same offer, this doesn’t negate your responsibility to reach only approved consumers who have not opted out. --- Bottom line, the world of 1:1 marketing is growing more sophisticated, and that’s a good thing. Marketers just need to understand that while regulated data can be powerful, they must also take great responsibility when handling it. The data exists to deliver firm offers of credit to your very specific target in all-new mediums. People-based marketing has its place, and it can now be done in a compliant, digitally-savvy way – in the financial services space, nonetheless. Register for our webinar on Credit Marketing Strategies to Drive Today\'s Digital Consumer.
The final day of Vision 2017 brought a seasoned group of speakers to discuss a wide range of topics. In just a few short hours, attendees dove into a first look at Gen Z and their use of credit, ecommerce fraud, the latest in retail, the state of small business and leadership. Move over Millennials – Gen Z is coming of credit age Experian Analytics leaders Kelley Motley and Natasha Madan gave audience members an exclusive look at how the first wave of Gen Z is handling and managing credit. Granted most of this generation is still under the age of 18, so the analysis focused on those between the ages of 18 to 20. Yes, Millennials are still the dominant generation in the credit world today, standing strong at 61 million individuals. But it’s important to note Gen Z is sized at 86 million, so as they age, they’ll be the largest generation yet. A few stats to note about those Gen Z individuals managing credit today: Their average debt is $12,679, compared to younger Millennials (21 to 27) who have $65,473 in debt and older Millennials (28 to 34) who sport $121,460. Given their young age, most of Gen Z is considered thin-file (less than 5 tradelines) Average Gen Z income is $33,000, and average debt-to-income is low at 5.7%. New bankcard balances are averaging around $1,574. As they age, acquire mortgages and vehicles, their debt and tradelines will grow. In the meantime, the speakers provided audience members a few tips. Message with authenticity. Think long-term with this group. Maintain their technological expectations. Build trust and provide financial education. State of business credit and more on the economy Moody’s Cris deRitis reiterated the U.S. economy is looking good. He quoted unemployment at 4.5%, stating “full employment is here.” Since the recession, he said we’ve added 15 million jobs, noting we lost 8 million during the recession. The great news is that the U.S. continues to add about 200,000 jobs a month, and that job growth is broad-based. Small business loans are up 10% year-to-date vs. last year. While there has been a tremendous amount of buzz around small business, he adds that most job creation has come from mid0size business (50 to 499 employees). The case for layered fraud systems Experian speaker John Sarreal shared a case study that revealed by layering on fraud products and orchestrating collaboration, a business can go from a string 75% fraud detection rate to almost 90%. Additionally, he commented that Experian is working to leverage dark web data to mine for breached identity data. More connections for financial services companies to make with mobile and social Facebook speaker Olivia Basu reinforced the need for all companies to be thinking about mobile. “Mobile is not about to happen,” she said. “Mobile is now. Mobile is everything. You look at the first half of 2017 and we’re seeing 40% of all purchases are happening on mobile devices.” Her challenge to financial services companies is to make marketing personal again, and of course leverage the right channels. Experian Sr. Director of Credit Marketing Scott Gordon commented on Experian’s ability to reach consumers accurately – whether that be through direct or digital delivery channels. A great deal of focus has been around person-based marketing vs. leveraging the cookie. -- The Vision conference was capped off with a keynote speech from legendary quarterback and Super Bowl MVP Tom Brady. He chatted about the details of this past season, and specifically the comeback Super Bowl win in February 2017. He additionally talked about leadership and what that means to creating a winning team and organization. -- Multiple keynote speeches, 65 breakout sessions, and hours of networking designed to help all attendees ready themselves for growing profits and customers, step up to digital, regulatory and fraud challenges, and capture the latest data insights. Learn more about Experian’s annual Vision conference.
Risk analysts are insatiable consumers of big data who require better intelligence to develop market insights, evaluate risk and confirm business strategies. While every credit decision, risk assessment model or marketing forecast improves when it is based on better, faster and more current data, leveraging large data sets can be challenging and unproductive. That’s why Experian added a new functionality to its Analytical Sandbox, giving clients the flexibility they need to analyze big data efficiently. Experian’s Analytical Sandbox now utilizes H2O –an open source machine learning and deep learning platform that can model and predict with high accuracy billions of rows of high-dimensional data from multiple sources in various formats. Through machine learning and advanced predictive modeling, the platform enables Experian to better provide on-demand data insights that empowers analysts with high-quality intelligence to inform regional trends, provide consumer transactional insight or expose marketing opportunities. As a hosted service, Sandbox is offered as a plug-and-play, meaning no internal development is required. Clients can instantly access the data through a secure Web interface on their desktop, giving users access to powerful artificial and business intelligence tools from their own familiar applications. No special training is required. “AI monetizes data,” said SriSatish Ambati, CEO of H2O.ai. “Our partnership with Experian democratizes and delivers AI to the wider community of financial and risk analysts. Experian\'s analytics sandbox can now model and predict with high accuracy billions of rows of high-dimensional data in mere seconds.” Through H2O and the Experian Sandbox, machine learning and predictive analytics are giving risk managers from financial institutions of all sizes the ability to incorporate machine learning models into their own big data processing systems.
In just a few short hours, Vision attendees immersed themselves into the depths of the economy, risk models, specialty finance data, credit invisibles, student loan data, online marketplace lending and more. The morning kicked off with one of the most respected and trusted macroeconomists in the U.S., Diane Swonk. With a rap sheet filled with advising central banks and multinational companies, Swonk treated a packed house to a look back on what has transpired in the U.S. economy since the Great Recession, as well as launching into current state and speculating on the months ahead. She described the past decade not as “lost, but rather lagging.” She went onto to say this past year was transitional, and while markets slowed slightly during the months leading up the U.S. presidential election, good things are happening: We’ve finally broken out of the 2% wage rut Recruiting on college campuses has picked up The labor force is growing Debt-to-income levels have returned to where they were prerecession and Investment is coming back. “I believe we’ll see growth over 2% this year,” said Swonk. Still, change is underway. She commented on how the way U.S. consumer spending is changing, and of course we’re seeing a restructuring in the retail space. While JC Penney announces store closings, you simultaneously see Amazon moving from “click to brick,” dabbling in the opening of some actual storefronts. Globally, she said the economy is the strongest it has been in eight years. She closed by noting there is a great deal of political change and unrest in the world today, but says, “Never underestimate our abilities when we tap our human capital.” -- More than 100 attendees filled a room to hear about the current trends and the future of online lending with featured guests from Oliver Wyman, Marlette Funding and Lending USA. While speakers commented on the “hiccup” in the space last year with some layoffs and mergers, volume has continued to double every year for the past several years with roughly $40 billion in cumulative originations today. Panelists discussed the use of alternative data to decision, channel bias, the importance of partnerships and how the market will see fewer and fewer players offering just one product specialty. “It is expensive to acquire customers, so you don’t just want to have one product to sell, but rather a range,” said Sharat Shankar of Lending USA. -- The numbers in the student lending universe are astounding. In a session focused on the U.S. student loan market, new Experian data reveals there is $1.49 billion in total student loan outstandings. In fact, total outstandings have grown 21% over the past four years, while the number of trades have only grown 4%. Costs are skyrocketing. The average balance per trade has grown 17% over the past four years. “We don’t ration education in this country,” said Joe DePaulo of College Ave. Student Loans. “We give everyone access to liquidity when it comes to federal student loans – and it’s not like that in other countries.” While DePaulo notes the access is great, offering many students the opportunity to obtain higher education, he says the problem is with disclosures. Guardians are often the individuals filling out the FAFSA, but the students inherit the loans. Students, he says, rarely understand how much their monthly payment will ultimately be after graduation. For every $10,000 in student loans, he says that will generally equate to a $100 monthly payment. -- Tomorrow, Vision attendees will be treated to more breakout sessions and a concluding keynote with legendary quarterback Tom Brady.
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