Fraud & Identity Management
Experian's fraud and identity platform, CrossCore™ won New Security Product or Service and Security Product Management / Development Team of the Year awards at the 13th Annual Info Security Products Guide’s 2017 Global Excellence Awards®.
There has been a lot of discussion around the auto loan market regarding delinquency rates in the past year. It is a topic Experian is asked about frequently from clients in regard to what particular economic market behaviors mean for the overall consumer lending. To understand this issue more clearly, I ran a deeper dive on the data from our Q3 Experian-Oliver Wyman Market Intelligence report. There are some interesting, and perhaps concerning, trends in the data for automotive loans and leases. Want Insights on the latest consumer credit trends? Register for our 2016 year-end review webinar. Register now Auto loan delinquency rates are at their highest mark since 2008 The findings indicate that the performance of the most recent loans opened from Q4 2015 are now performing as poorly as the loans from the credit crisis back in 2008. In fact, you have to go back to 2008, and in some cases, 2007, to see loan default rates as poorly as the Q4 2015 auto loans originated in the last year. Below we have the auto loan vintage performance for loans originated in Q4 of the last 8 years — going back to 2008. The lines on the chart each represent 60 days late or more (60+) delinquency rates over specific time period grades. For these charts, I analyzed the first three, six, and nine months from the loan origination date. As you can see, the rates of delinquency have steadily increased in recent years, with the increase in the Q4 2015 loans opened equaling or even surpassing 2008 levels. The above chart reflects all credit grades, so one might think that this change is a result of the change in the credit origination mix. By digging a little deeper into the data, we can control for the VantageScore® credit score at the loan opening, or origination date, and review performance by looking at two different score segments separately. Is there concern for Superprime and Prime consumers auto loans? In the chart immediately below, the same analysis as above has been conducted, but only for trades originated by Superprime and Prime consumers at the time of origination. You can see that although the trend is not as pronounced as when all grades are considered, even these tiers of consumers are showing significant increases in their 60+ days past due (DPD) rates in recent vintages. Separately, looking at the Subprime and Deep Subprime segments, you can really see the dramatic changes that have occurred in the performance of recent auto vintages. Holding score segments constant, the data indicates a rate of credit deterioration in the Subprime and Deep Subprime segments that we have not observed since at least 2008 — back to when we started tracking this data. What’s concerning here is not only the absolute values of the vintage delinquencies but also the trend, which is moving upward for all three time periods. Where does the risk fall? Now that we see the evidence of the deterioration of credit performance across the credit spectrum, one might ask – who is bearing the risk in these recent vintages? Taking a closer look at the chart below, you can see the significant increase in the volumes of loans across lender type, but particularly interesting to me is the increase in 2016 for the Captive Auto lenders and Credit Unions, who are hitting highs in their lending volumes in recent quarters. If the above trend holds and the trajectory continues, this suggests exposure issues for those lenders with higher volumes in recent months. What does this mean for your business? Speak to Experian's global consulting practice to learn more. Learn more Just to be thorough, let's continue and look at the relative amounts of loans going to the different score segments by each of the lender types. Comparing the lender type and the score segments (below) reveals that finance lenders have a greater than average exposure to the Subprime and Deep Subprime segments. To summarize, although auto lending has recently been viewed as a segment where loan performance is good, relative to historical levels, I believe, the above data signals a striking change in that perspective. Recent loan performance has weakened to a point where comparing the 2008 vintage with 2015 vintage, one might not be able to distinguish between the two. // <![CDATA[ var elems={'winWidth':window.innerWidth,'winTol':600,'rotTol':800,'hgtTol':1500}, updRes=function(){var xAxislabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'14px'}},xAxislabelRotation=function(){if(elems.winWidth<elems.rotTol){return-90}else{return 0}},seriesLabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'16px'}},legenLabelSize=function(){if(elems.winWidth<elems.winTol){return'12px'}else{return'16px'}},chartHeight=function(){if(elems.winWidth<elems.rotTol){return 600}else{return 400}},labelInside=function(){if(elems.winWidth<elems.rotTol){return false}else{return true}},chartStack=function(){if(elems.winWidth<elems.rotTol){return null}else{return'normal'}};this.sourceRef=function(){return['Source: Experian.com']};this.seriesColor=function(){return['#982881','#0d6eb6','#26478D','#d72b80','#575756','#b02383']};this.chartFontFamily=function(){return'"Roboto",Helvetica,Arial,sans-serif'};this.xAxislabelSize=function(){return xAxislabelSize()};this.xAxislabelOverflow=function(){return'none'};this.xAxislabelRotation=function(){return xAxislabelRotation()};this.seriesLabelSize=function(){return seriesLabelSize()};this.legenLabelSize=function(){return legenLabelSize()};this.chartHeight=function(){return chartHeight()};this.labelInside=function(){return labelInside()};this.chartStack=function(){return chartStack()}}(), updY=function(chart){var points=chart.series[0].points;for(var i=0;i elems.rotTol){if(thisWidth<20){var y=points[i].dataLabel.y;y-=10;points[i].dataLabel.css({color:'#575756'}).attr({y:y-thisWidth})}}}},updX=function(chart){var points=chart.series[0].points;for(var i=0;i elems.rotTol){if(thisWidth
Internet-connected devices provide endless possibilities, but they rely on technology and collected data to deliver on their promises.
Using digital technology like a big bank How was your holiday? Are the chargebacks rolling in yet? It’s no secret - digital technology like mobile device usage has increased significantly over the years, making it a breeding ground for fraudsters. As credit unions continue to grow their membership, their fraud security treatments need to grow as well. Bigger banks are constantly updating their fraud tools and strategies to fight against cybercrime and, therefore, fraudsters are setting their eyes on credit unions. Even as I write this, fraudsters are searching and targeting credit unions that don’t have their mobile channel secured. They attempt to capitalize on any weakness or opportunity: Registering stolen cards to mobile wallets Taking over an account via mobile banking apps Using a retailers’ mobile app to make fraudulent payments Disabling the SIM card in the victim’s phone and diverting the one-time password sent through text message to their own phones These are clever ways to commit fraud. But credit unions are becoming wise to these new threats and are serious about protecting their members. They are incorporating device intelligence with a solid identity authentication service. This multi-layered approach is essential to securing mobile channels, and protecting your Credit Union from chargebacks. To learn more about our fraud solutions, click here.
Experian shares five trends and twists coming over the next 12 months, that could push new boundaries and in many cases improve the customer experience as it pertains to the world of credit and finance.
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Technology sharing can unlock a more effective strategy in fighting fraud. Experian’s multi-layered and risk-based approach to fraud management is discussed
It's the holiday season - you've been breached. Fraudsters and other criminals can make one of the busiest shopping times of the year, a miserable one.
Experian Data Breach Resolution releases its fourth annual Data Breach Industry Forecast report with five key predictions on the 2017 data breach landscape
FinCEN and email-compromise fraud sheds additional light on the threats of Email Account Compromise and Business Email Compromise.
Panel discussion on Reinventing Identity for the Digital Age at Electronic Signature & Records Association (ESRA) conference
Under the updated requirements for Customer Due Diligence, financial institutions must expand programs.
Experian is recognized as a leading security solution provider for fraud and identity solutions in order to protect customers and financial institutions
Experian announces partnership with U.S. Communities to help state and local public agencies prevent fraud, maximize revenue, strengthen security
As we approach the one-year anniversary of the EMV liability shift, we have seen an increase in e-commerce fraud — to the tune of 15% higher than last year.