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Credit scores hold the key to many aspects of our financial lives. Whether qualifying for a mortgage, insurance, or a smartphone plan, financial institutions rely on credit reports — a document detailing how responsibly a person has used credit accounts in the past — to decide if they should approve your financing application. However, here's the problem: because today's scoring system leans heavily on a person’s credit history to generate a credit score, it leaves out large segments of the United States population from accessing credit. According to a recent Oliver Wyman report, an estimated 28 million U.S. consumers are considered ”credit invisible," while another 21 million are deemed "unscorable," meaning they don’t have the types of accounts that have been traditionally used to generate a credit score. Using the traditional credit-scoring formula, certain populations, such as communities of color and low-income consumers, are left behind. Now, times are changing. A modern approach to credit scoring can significantly improve the financial inclusion of millions of U.S. consumers and correct past and present inequities. ­Tapping into advanced technologies that leverage expanded data assets can produce powerful results. A cycle of exclusion: The limitations of conventional credit scoring A big part of the problem lies with how credit scores are calculated. Between payment history and length of accounts held, a consumer’s credit history accounts for 50 percent of a FICO credit score — the credit score used by 90 percent of top lenders for credit decisions. In other words, the credit system rewards people who already have (or can get) credit and penalizes those that cannot or don't yet have credit. For those who do not have credit, their financial behaviors ­— such as timely rental and utility payments, bank account data and payday loan installment payments — may not get reported to credit bureaus. As a result, consumers without a credit history may appear as credit invisible or unscorable because they don't have enough tradelines to generate a score. But they also can’t get credit to improve their score. It creates a cycle of exclusion that’s hard to break. Who gets left behind? According to the latest research, the limitations on the traditional credit scoring system disproportionately impact certain communities: Low-income: 30 percent of those in low-income neighborhoods are credit invisible, and 16 percent are considered unscorable, compared with just 4 percent and 5 percent, respectively, in upper-income neighborhoods.1 Communities of color: 27 percent of Black and 26 percent of Hispanic consumers are either credit invisible or unscorable, while only 16 percent of white consumers are.1 Immigrants: People who have recently arrived in the United States can lack a credit history here, even if they may have had one in their home country. Meanwhile, undocumented immigrants, who don’t have a Social Security number, can find it difficult to get a credit card or use other financial services. Young adults: 40 percent of credit invisibles in the U.S. are under the age of 25,1 with 65 percent of 18- to 19-year-olds lacking a credit score. Being labeled unscorable or credit invisible can hinder participation in the financial system and prevent populations from accessing the socioeconomic opportunities that go with it. Why are certain individuals and communities excluded? There are often complex — and valid — reasons for why many consumers are deemed unscorable or credit invisible. For example, newcomers may appear to be credit invisible because haven’t yet generated a credit history in the U.S., although they may have a solid score in their home country. Young consumers are also a common category of unscorable or credit invisible people, largely because they haven't acquired credit yet. Only 35 percent of 18- to 19-year-olds have a credit score, while 91 percent of 25- to 29-year-olds do. However, those who can quickly get a credit history typically come from wealthier households, where they can rely on a creditworthy guarantor to help them establish credit. Finally, some consumers have had negative experiences with the financial system. For instance, a prior default can make it difficult to access credit in the future, which can result in an extended period without credit, eventually leading to being labelled unscorable. Others may distrust the mainstream financial system and choose not to participate. Underpinning all this are racial disparities, with Black and Hispanic consumers being classified as unscorable and credit invisible at significantly higher rates than white and Asian consumers. According to the Consumer Financial Protection Bureau (CFPB), Black and Hispanic people, as well as low-income consumers, are more likely to have “scant or non-existent” credit histories. Financial inclusion is an equity issue Traditional credit scoring places big barriers on certain communities. Without access to credit, marginalized communities will continue to face challenges. They will lack the ability to purchase property, secure business and/or personal loans and deal with financial emergencies, further widening the wealth gap. Since credit scores are used to decide loan eligibility and what interest rate to offer, those with low or no credit rating tend to pay higher interest rates or are denied desired loans, which compounds financial difficulty. The impact is profound: a significant percentage of the population struggles to access basic financial services as well as life opportunities, such as financing an education or buying a home. Without the ability to generate a credit score, unscorable or credit invisible consumers often turn to less-regulated financial products (such as payday loans or buy now pay later agreements) and pay more for these, often locking them in a vicious cycle. Consumers who are credit invisible or unscorable often end up paying more for everyday transactions. They may be required to put up hefty deposits for housings and utilities. Auto and homeowners insurance, which use credit score as a factor in setting rates, may be more expensive too. Consider how much this could impede someone’s ability to save and build generational wealth. Financial inclusion seeks to bring more consumers into the financial system and enable access to safe, affordable financial services and products. With the right technology on your side, there are solutions that make it easier to do so. Tap into technology Banks, credit unions and other lending institutions are well positioned to move the needle on financial inclusion by embracing expanded definitions of creditworthiness. By seeking out expanded FCRA-regulated data with wider sources of financial information, financial institutions can find a vast untapped pool of creditworthy consumers to bring into the fold. Technology makes achieving this goal easier than ever. New credit scoring tools, like Lift Premium™, can give lenders a more complete view of the consumer to use for credit decisioning. It combines traditional credit data with expanded FCRA-regulated data sources, helping lenders uncover more creditworthy consumers. Lift Premium can score 96 percent of U.S. consumers, compared to just 81 percent that conventional scoring systems do now. By applying machine learning to expanded data sets, Lift Premium can build a fuller and more accurate view of consumer behaviors. Moreover, the 6 million consumers whose scores are now considered subprime could be upgraded to prime or near-prime by analyzing the expanded data that Lift Premium uses. The opportunity presented by financial inclusion is significant. Imagine being able to expand your portfolio of creditworthy borrowers by almost 20 percent. The last word With a renewed focus on social justice, it’s no surprise that regulators and activists alike are turning their attention to financial inclusion. A credit-scoring system that allows lenders to better evaluate more consumers can give more people access to transparent, cheaper and safer financial products and the socioeconomic benefits that go along with them. New models and data assets offer additional data points into the credit scoring system and make it possible for lenders to expand credit to a greater number of consumers, in the process creating a fairer system than exists today. Early adopter lenders who embrace financial inclusion now can gain a first-mover advantage and build a loyal customer base in a competitive market. Learn more Download white paper 1Oliver Wyman white paper, “Financial Inclusion and Access to Credit,” January 12, 2022. 

Nearly 28 million American consumers are credit invisible, and another 21 million are unscorable.1 Without a credit report, lenders can’t verify their identity, making it hard for them to obtain mortgages, credit cards and other financial products and services. To top it off, these consumers are sometimes caught in cycles of predatory lending; they have trouble covering emergency expenses, are stuck with higher interest rates and must put down larger deposits. To further our mission of helping consumers gain access to fair and affordable credit, Experian recently launched Experian GOTM, a first-of-its-kind program aimed at helping credit invisibles take charge of their financial health. Supporting the underserved Experian Go makes it easy for credit invisibles and those with limited credit histories to establish, use and grow credit responsibly. After authenticating their identity, users will have their Experian credit report created and will receive educational guidance on improving their financial health, including adding bill payments (phone, utilities and streaming services) through Experian BoostTM. As of January 2022, U.S. consumers have raised their scores by over 87M total points with Boost.2 From there, they’ll receive personalized recommendations and can accept instant card offers. By leveraging Experian Go, disadvantaged consumers can quickly build credit and become scorable. Expanding your lending portfolio So, what does this mean for lenders? With the ability to increase their credit score (and access to financial literacy resources), thin-file consumers can more easily meet lending eligibility requirements. Applicants on the cusp of approval can move to higher score bands and qualify for better loan terms and conditions. The addition of expanded data can help you make a more accurate assessment of marginal consumers whose ability and willingness to pay aren’t wholly recognized by traditional data and scores. With a more holistic customer view, you can gain greater visibility and transparency around inquiry and payment behaviors to mitigate risk and improve profitability. Learn more Download white paper 1Data based on Oliver Wyman analysis using a random sample of consumers with Experian credit bureau records as of September 2020. Consumers are considered ‘credit invisible’ when they have no mainstream credit file at the credit bureaus and ‘unscorable’ when they have partial information in their mainstream credit file, but not enough to generate a conventional credit score. 2https://www.experian.com/consumer-products/score-boost.html

Generation Z has money on their minds, and as their appetite for personal finance grows, financial institutions better be ready. Accounting for 40% of all U.S. consumers, Gen Z is comprised of digital natives with little to no memory of the world as it existed before smartphones, social media and the internet. Aside from growing up in a tech-saturated world, Gen Zers are also socially conscious and determined to take control of their financial futures. According to Credit Union Times, Gen Zers wield a purchasing power of more than $143 billion, which is projected to increase by more than 70% in the next five years. What do these insights mean for financial institutions? As the newest and soon-to-be largest cohort of consumers, Gen Zers represent an enormous opportunity for growth. While establishing a relationship with Gen Z now is key to creating lifelong customers, the same approaches used to capture previous generations may not be as effective with this younger cohort. To successfully reach and acquire Gen Z consumers, financial institutions must recognize their unique needs, preferences and experiences. Here are some key trends and preferences to consider: They live and breathe social media. According to Mintel, 99% of Gen Z adults and teens are active social media users. Despite this percentage of Gen Zers on social media, credit card issuers spent 94% of their media budget on direct mail from January 2019 to May 2021. This highlights the need for financial institutions to recognize social media as a powerful and necessary marketing vehicle. As a fast-growing consumer group with massive spending power, Gen Z makes for valuable customers, but are being missed by current marketing strategies. While direct mail is popular among millennials, financial institutions must recognize Gen Z’s preference for social media and pivot themselves to effectively reach them. By leveraging both social media and direct mail, financial institutions can dramatically increase their reach and acquire a wider pool of consumers. They want to be financially literate. Concepts like budgeting, investing and credit building can seem daunting to Gen Zers, especially if they lack the proper guidance and resources to get started. According to a NerdWallet survey, 41% of Gen Zers feel anxious about their personal finances, while 40% feel nervous and confused. To add onto their worries, older Gen Z members may have witnessed their parents struggle financially during the Great Recession or have seen millennials burdened with student loan debt. For fear of facing the same challenges as their predecessors, Gen Zers have shown great interest in taking control of their financial lives and becoming financially literate. In response to this desire for financial education, many banks and credit card issuers have taken an educational approach in their marketing by using infographics and ‘how-to’ guides to teach Gen Z about the basics of personal finance. Offering educational resources not only gives Gen Zers the confidence to make financial decisions, but it gives financial institutions the opportunity to build an early connection with this consumer group. Many banks and credit card issuers are also positioning themselves as companies Gen Zers can “grow with.” By not limiting their products to a specific life stage, these financial institutions seek to grow alongside the consumer so that they remain loyal customers even when their needs and lifestyles change. They care about what brands stand for. According to Mintel Trend Buydeology, Gen Z consumers are passionate about the causes close to their hearts and are more likely than other generation to pay a higher price for brands that support the causes they care about. With this in mind, financial institutions must prove they are authentic, socially responsible and committed to serving their communities. To resonate with Gen Z consumers and align with their preferences, financial institutions should educate themselves about social issues, take part in meaningful discussions both on and offline, and develop innovative strategies to drive real impact and change. Ready to win over Gen Z? Financial institutions have a massive opportunity to build lasting relationships with Gen Z consumers and having a pulse on what this fast-growing segment wants is a must. To learn more, check out our efforts to help marginalized and underserved communities or join our upcoming webinar on November 3, 2021. Learn more  Register for webinar

Shri Santhanam, Executive Vice President and General Manager of Global Analytics and Artificial Intelligence (AI) was recently featured on Lendit’s ‘Fintech One-on-One’ podcast. Shri and podcast creator, Peter Renton, discussed advanced analytics and AI’s role in lending and how Experian is helping lenders during what he calls the ‘digital lending revolution.’ Digital lending revolution “Over the last decade and a half, the notion of digital tools, decisioning, analytics and underwriting has come into play. The COVID-19 pandemic has dramatically accelerated that, and we’re seeing three big trends shake up the financial services industry,” said Shri. A shift in consumer expectations More than ever before, there is a deep focus on the customer experience. Five or six years ago, consumers and businesses were more accepting of waiting several days, sometimes even weeks, for loan approvals and decisions. However, the expectation has dramatically changed. In today’s digital world, consumers expect lending institutions to make quick approvals and real-time decisions. Fintechs being quick to act Fintech lenders have been disrupting the traditional financial services space in ways that positively impacts consumers. They’ve made it easier for borrowers to access credit – particularly those who have been traditional excluded or denied – and are quick to identify, develop and distribute market solutions. An increased adoption of machine learning, advanced analytics and AI Fintechs and financial institutions of all sizes are further exploring using AI-powered solutions to unlock growth and improve operational efficiencies. AI-driven strategies, which were once a ‘nice-to-have,’ have become a necessity. To help organizations reduce the resources and costs associated with building in-house models, Experian has launched Ascend Intelligence Services™, an analytics solution delivered on a modern tech AI platform. Ascend Intelligence Services helps streamline model builds and increases decision automation and approval rates. The future of lending: will all lending be done via AI, and what will it take to get there? According to Shri, lending in AI is inevitable. The biggest challenge the lending industry may face is trust in advanced analytics and AI decisioning to ensure lending is fair and transparent. Can AI-based lending help solve for biases in credit decisioning? We believe so, with the right frameworks and rules in place. Want to learn more? Explore our fintech solutions or click below. Listen to Podcast Learn more about Ascend Intelligence Services

The AutoCheck FREE Flood Risk Check site has been updated with Hurricane Ida information New cars have been in short supply due to the worldwide microchip shortage, so consumers quickly turned their attention to used cars. Unfortunately, dealers continue to struggle with obtaining enough used car inventory to meet demand. To add to an already challenging year, Hurricane Ida hit the gulf coast in August resulting in an estimated 250,000 cars sustaining flood damage. It’s more important than ever that dealers be careful about obtaining pre-owned cars that could potentially have flood damage. The best way to mitigate the risk of purchasing a flood damaged vehicle is to start by running an AutoCheck Free Flood Risk Check. Visitors simply enter any vehicle's 17-digit VIN and the tool will check for flood brands and provide information if the vehicle was registered in a region impacted by a FEMA disaster declaration. Two levels of reporting available The first level of reporting determines whether the vehicle has been titled/registered 12 months prior in a county that has been identified as requiring public and individual assistance (FEMA categories A and B) for a FEMA-declared major disaster. This would yield a “Yes” result. For instance, you would get a “Yes” result if the vehicle was registered in an impacted area during the time of a FEMA-declared major disaster like Hurricane Ida. The “Yes” result should not be interpreted as confirmation of flood damage or even possible flood damage. The data is provided merely as information regarding the location of the vehicle’s registration/title history so users can be aware of risk exposure. For example, the Hurricane Ida region had thousands of damaged cars, but some cars in the region may not have been damaged by the hurricane — the owner could have driven the car when they evacuated, or a child or other family member may have been out of town with the car when the hurricane hit. The second level of reporting is based on search results from Experian data such as flood title and problem records, including flood State title brands, auction flood announcements, salvage auction flood designations, and other vehicle records determined by Experian to relate to or suggest an increased likelihood of flood damage or risk exposure. It takes time for claims and updates to vehicle title information to appear on a vehicle’s history and although the DMV requires that title brands be issued for vehicles damaged by floods, not every vehicle flood event is reported by car owners. Unreported flood events may not appear on an AutoCheck Flood Risk Check or AutoCheck Vehicle History Report. Although Experian provides flood related records from available data sources, we cannot provide assurance that an AutoCheck Flood Risk Check that does not produce any records means that the subject vehicle has not experienced flood damage. That’s why it’s important to review a full AutoCheck Vehicle History Report, which—in addition to potential flood damage—includes reported accidents, branded titles, recalls, number of owners and more. Once you run the full Vehicle History Report we recommend an independent evaluation and inspection of the vehicle to determine and confirm a vehicle’s condition prior to purchase. Try the AutoCheck Flood Risk Check today to help mitigate the risk of purchasing flood damaged vehicles. Not an AutoCheck subscriber?  Contact us to become an AutoCheck client.

Experian recently announced that it has made the IDC 2021 Fintech Rankings Top 100, highlighting the best global providers of financial technology. Experian is ranked number 11, rising 33 places from its 2020 ranking. IDC also refers to Experian as a ‘rising star.’ The robust data assets of Experian, combined with best-in-class modeling, decisioning and technology are powering new and innovative solutions. Experian has invested heavily in new technologies and infrastructures to deliver the freshest insights at the right time, to make the best decision. For example, Experian's Ascend Intelligence Services™ provides data, analytics, strategy, and performance monitoring, delivered on a modern-tech AI platform. With the investment in Ascend Intelligence Services, Experian has been able to streamline the delivery speed of analytical solutions to clients, improve decision automation rates and increase approval rates, in some cases by double digits. “Recognition in the top 20 of IDC FinTech Rankings demonstrates Experian’s commitment to the success of its financial clients,” said Marc DeCastro, research director at IDC Financial Insights. “We congratulate Experian for being ranked 11th in the 2021 IDC FinTech Rankings Top 100 list.” View the IDC Fintech Rankings list in its entirety here. Focus on Data, Advanced Analytics and Decisioning Creates Winning Strategy for Experian Experian’s focus on data, advanced analytics and decisioning has continued to gain recognition from various notable programs that acknowledge Fintech industry leaders and breakthrough technologies worldwide. Beyond the IDC Fintech Rankings Top 100, Experian won honors from the 2021 FinTech Breakthrough Awards, the 2021 CIO 100 Awards and was most recently shortlisted in the CeFPro Global Fintech Leaders List for 2022 in the categories of advanced analytics, anti-fraud, credit risk and core banking/back-end system technologies. “At Experian, we are committed to supporting the Fintech community. It’s great to see our continued efforts and investments driving positive impacts for our clients and their consumers. We will continue to invest and innovate to help our clients solve problems, create opportunities and support their customer-first missions,” said Jon Bailey, Vice President for Fintech at Experian. Learn more about how Experian can help advance your business goals with our Fintech Solutions and Ascend Intelligence Services. Explore fintech solutions Learn more about AIS

Artificial intelligence is here to stay, and businesses who are adopting the newest AI technology are ahead of the game. From targeting the right prospects to designing effective collections efforts, AI-driven strategies across the entire customer lifecycle are no longer a nice to have - they are a must.  Many organizations are late to the game of AI and/or are spending too much time and money designing and redesigning models and deploying them over weeks and months. By the time these models are deployed, markets may have already shifted again, forcing strategy teams to go back to the drawing board. And if these models and strategies are not being continuously monitored, they can become less effective over time and lead to missed opportunities and lost revenue. By implementing artificial intelligence in predictive modeling and strategy optimization, financial institutions and lenders can design and deploy their decisioning strategies faster than ever before and make incremental changes on the fly to adapt to evolving market trends.  While most organizations say they want to incorporate artificial intelligence and machine learning into their business strategy, many do not know where to start. Targeting, portfolio management, and collections are some of the top use cases for AI/ML strategy initiatives.  Targeting  One way businesses are using AI-driven modeling is for targeting the audiences that will most likely meet their credit criteria and respond to their offers. Financial institutions need to have the right data to inform a decisioning strategy that recognizes credit criteria, can respond immediately when prospects meet that criteria and can be adjusted quickly when those factors change. AI-driven response models and optimized decision strategies perform these functions seamlessly, giving businesses the advantage of targeting the right prospects at the right time.  Credit portfolio management  Risk models optimized with artificial intelligence and machine learning, built on comprehensive data sets, are being used by credit lenders to acquire new revenue and set appropriate balance limits. Strategies built around AI-driven risk models enable businesses to send new offers and cross-sell offers to current customers, while appropriately setting initial credit limits and managing limits over time for increased wallet share and reduced risk.   Collections  AI- and ML-driven analytics models are also optimizing collections strategies to improve recovery rates. Employing AI-powered balance and response models, credit lenders can make smarter collections decisions based on the most predictive and accurate information available.   For lending businesses who are already tight on resources, or those whose IT teams cannot meet the demand of quickly adapting to ever-changing market conditions and decisioning criteria, a managed service for AI-powered models and strategy design might be the best option. Managed service teams work closely with businesses to determine specific use cases, develop models to meet those use cases, deploy models quickly, and monitor models to ensure they keep producing and predicting optimally.  Experian offers Ascend Intelligence Services, the only managed service solution to provide data, analytics, strategy and performance monitoring. Experian’s data scientists provide expert guidance as they collaborate with businesses in developing and deploying models and strategies around targeting, acquisitions, limit-setting, and collections. Once those strategies are deployed, Experian continually monitors model health to ensure scores are still predictive and presents challenger models so credit lenders can always have the most accurate decisioning models for their business. Ascend Intelligence Services provides an online dashboard for easy visibility, documentation for regulatory compliance, and cloud capabilities to deliver scores and decisions in real-time.  Experian’s Ascend Intelligence Services makes getting into the AI game easy. Start realizing the power of data and AI-driven analytics models by using our ROI calculator below: initIframe('611ea3adb1ab9f5149cf694e'); For more information about Ascend Intelligence Services, visit our webpage or join our upcoming webinar on October 21, 2021.  Learn more Register for webinar

Establishing a strong digital strategy remains a top priority for most financial institutions. With more eyes on screens and electronic devices, the pandemic-induced shift to digital has increased the need to meet consumers where they are. New Innovations As a Result of an Accelerated Shift to Digital  In Ernst & Young’s 2019 biannual Global Fintech Adoption Index, 46% of American respondents indicated they were using at least one fintech service. Fast forward, COVID-19 has accelerated the American adoption rate to 59%, according to a September survey conducted by Plaid, a leading digital payments infrastructure company. This shift to digital also resulted in an uptick in the creation of banking and savings processes that leverage advanced technologies. For example, digital-first technologies and artificial intelligence (AI) are changing the prescreen landscape as never before. For financial institutions, smart prescreen marketing solutions, coupled with a traditional approach to personalized service, present vast opportunities to build deeper consumer relationships. However, implementing an effective strategy can be challenging. In a recent webinar, Experian’s Vice President of Product Management Jacob Kong tackled the topic of using new analytics and AI to create a digital-first strategy. Joined by Mark Sievewright, founder of Sievewright & Associates and co-author of Digital Life, and Devon Kinkead, CEO of Micronotes.ai, they explored the evolution of banking and the possibilities offered by pairing data with technology in our new digital world. Watch the full webinar, 'Digital-First Strategies: New Analytics and Artificial Intelligence for Marketing,' and learn more about: The shift to digital life and banking, new analytics and AI How data and information value empowers prescreen marketing Emerging technologies and new tools that can support aggressive growth and marketing initiatives while mitigating risk How Experian is joining forces with Micronotes.ai to launch Micronotes ReFI powered by Experian, to help lower customers’ or members’ borrowing costs by refinancing mispriced debt Learn more about Micronotes ReFI powered by Experian To explore how Experian’s solutions and capabilities can power your prescreen and marketing strategies, please visit our solutions page or contact us for more information. Contact Us

As quarantine restrictions lift and businesses reopen, there is still uncertainty in the mortgage market. Research shows that more than two million households face foreclosure as moratoriums expire. And with regulators, like the Consumer Financial Protection Bureau (CFPB), urging mortgage servicers to prepare for an expected surge in homeowners needing assistance, lenders need the right resources as well. One of the resources mortgage lenders rely on to help gain greater insight into their borrower’s financial picture is income and employment verification. The challenge, however, is striking the right balance between gaining the insights needed to support lending decisions and creating a streamlined, frictionless mortgage process. There are three main barriers on the path to a seamless and digital verification process. Legacy infrastructure Traditional verification solutions tend to rely on old technology or processes. Whether a lender’s verification strategy is centered around a solution built on older technology or a manual process, the time to complete a borrower verification can vary from taking a day to weeks. Borrowers have grown accustomed to digital experiences that are simple and frictionless and experiencing a drawn out, manual verification process is likely to impact loyalty to the lender’s brand. Stale employment and income data The alternative to a manual process is an instant hit verification solution, with the aim to create a more seamless borrower experience. However, lenders may receive stale borrower income and employment data back as a match. Consumer circumstances can change frequently in today’s economic environment and, depending on the data source the lender is accessing, data may be out of date or simply incorrect. Decisioning based on old information is problematic since it can increase origination risk. Cost and complexity Lenders that use manual processes to verify information are adding to their time to close and ultimately, their bottom line by way of time and resources. Coupled with pricing increases, lenders are paying more to put their borrowers through a cumbersome and sometimes lengthy process to verify employment and income information. How can mortgage lenders avoid these common pitfalls in their verification strategy? By seeking verification solutions focused on innovation, quality of data, and that are customer-centric. The right tool, such as Experian VerifyTM, can help provide a seamless customer experience, reduce risk, and streamline the verification process. Learn more

To grow in today’s economic climate and beat the competition, financial institutions need to update their acquisition and cross-sell strategies. By doing so, they are able to drive up conversions, minimize risk, and ultimately connect consumers with the right offers at the right time. Businesses and consumers are spending more time online than ever before, with 40% of consumers increasing the number of businesses they visit online. They’ve also made it clear that they expect easy, frictionless transactions with their providers. This includes new accounts and offers of credit – creating the need for better delivery systems. Effective targeting and conversion come down to more than just direct mail and email subject lines, especially now in a volatile economy where consumers are seeking appropriate products for their current situation. Be the first to meet consumers’ needs by leveraging the freshest data, advanced analytics, and automated decision systems. For example, when a consumer tries to open a checking account, the system can initiate a “behind-the-scenes” real-time prescreen request while assessing information needed to open the deposit account. The financial institution can then see if the consumer qualifies for overdraft protection, refinancing offers, loans, credit cards, and more. By performing the pre-approval process in seconds, financial institutions can be sure that they're making the right offers to the right customer, and doing it at the right time. All of this helps to increase the offer acceptance rate, improving customer retention, and maximizing customer account life-time value. The pandemic upended a lot of the ways that your businesses run day-to-day – from where you work to how you (better) engage with customers. Arguably, some of the changes have been long overdue, particularly the acceleration to digital and better customer acquisition strategies. Ahead lies the opportunity to grow – strategies enacted now will determine the extent of that opportunity. To learn more about how Experian can help you assess your prescreen strategy and grow, contact us today. Request a call

In today’s digital-first environment, fraud threats are growing in sophistication and scope. It’s critical for credit unions to not only understand the specific threats presented by life online, but to also be prepared with a solid fraud detection and prevention plan. Below, we’ve outlined a few fraud trends that credit unions should be aware of and prepared to address. 2021 Trends to Watch: Digitization and the Movement to Life Online Trend #1: Digital Acceleration As we look ahead to the rest of 2021 and beyond, we expect to see adoption of digital strategies nearing the top of credit unions’ list of priorities. Members’ expectations for their digital experience have permanently shifted, and many credit unions now have members using online channels who traditionally wouldn’t have. This has led to a change in the types of fraud we see as online activities increased in volume. Trend #2: First-Party Fraud is On the Rise First party fraud is on the rise – 43% of financial executives say that mule activity is up 10% or more compared to attack rates prior to the pandemic, according to Trace Fooshee, Senior Analyst for Aite Group, and we expect to see this number grow. The ability for credit unions to identify and segregate the “good guys” from “bad guys” is getting more difficult to discern and this detail is more important than ever as credit unions work to create frictionless digital experiences by using digital tools and strategies. Trend #3: Continual Uptick in Synthetic Identity Fraud We expect synthetic identity fraud (SID) to continue to rise in 2021 as cybercriminals become more sophisticated in the digital space and as members continue with their new digital habits. Additionally, fraudsters can use SIDs to bring significant damage and loss to credit unions through fraudulent checks, debit cards, person-to-person and automated clearing house (ACH) transactions. More and more, fraudsters are seen opening accounts and remaining very patient – using an account to build and nurture a trusted relationship with the credit union and then remain dormant for two years before ensuing in any sort of abuse. Once the fraudster feels confident that they can bypass authentication processes or avoid a new product vetting, oftentimes, they will take that opportunity to get easy access to all solutions credit unions have available and will abuse them all at once. There are no signs of fraud slowing, so credit unions will need to stay vigilant in their fraud protection and prevention plans. We’ve outlined a few tips for credit unions to help protect member data while reducing risk. The Fight Against Fraud: Four Key Tips Tip #1: Manage Each Fraud Type Appropriately Preventing and detecting fraud requires a multi-level solution. This can involve new methods for authenticating current and prospective members, as well as incorporating synthetic identity services and identity proofing throughout the member lifecycle. For example, credit unions should consider taking extra verification steps during the account opening process as a preventative measure to minimize SID infiltration and associated fraud losses. As credit unions continue down the path of digitization, it’s also important to add in digital signals and behavior-based verification, such as information about the device a consumer is logging in from to heighten defenses against bad actors. Tip #2: Be Resourceful In the wake of the COVID-19 pandemic, many have asked, “How should credit unions approach fraud prevention tactics when in-person contact is limited or unavailable?” In some cases, you might need to be willing to say no to requests or get creative and find other options. Sometimes, it takes leveraging current resources and using what’s readily available to allow for a binary decision tree. For example, if you’re suspicious of a dormant account that you think could be synthetic, call them, and ask yourself these questions: Did they answer? Was the phone still active? Send the account holder an email – did you get a reply? Is this a new member? Is this a new channel for the member? Could they have logged on to do this instead of calling the call center? Tip #3: Empower Members Through Education Members like to know that their credit unions are taking the necessary steps and applying the right measures to keep their data secure. While members might not want every detail, they do want to know that the security measures are there. Require the use of strong passwords, step-up authentication, and empower members with alerts, notifications, and card controls. Additionally, protect members by providing resources like trainings, webinars, and best practices articles, where they can learn about current cyber trends and how to protect their data. Tip #4: Trust Data Many credit unions rely on an employee’s decision to decide when to take action and what action to take. The challenge with this approach comes when the credit union needs to reduce friction for members or tighten controls to prevent fraud, because it’s extremely hard to know exactly what drove prior actions. A better alternative is to rely on scores and specific data. Tweaks to the scores or data points that drive actions allow credit unions to achieve the desired member experience and risk tolerance – just be sure to leverage internal experts help figure out those policies. By determining what conditions drive actions before the actions are taken (instead of doing it one case at a time) the decisions remain transparent and actionable. Looking for more insights around how to best position your credit union to mitigate and prevent fraud? Watch our webinar featuring experts from around the industry and key credit unions in this Fraud Insight Form hosted by CUES. Watch now Contact us

Preventing fraud losses requires an understanding of each individual fraud type—including third-party, first-party, synthetic identity, and account takeover fraud—and how they differ from one another. It’s only with a multi-layered fraud strategy that businesses can adequately detect and treat each type of fraud while maintaining the customer experience. When’s the last time you reviewed your existing fraud strategy? Download infographic Review your fraud strategy

The ongoing COVID-19 crisis and the associated rise in online transactions have made it more important than ever to keep customer information accurate and company databases up to date. By ensuring your organization’s data quality, you can allocate resources more effectively, minimize costs and safely serve your customers. As part of our recently launched Q&A perspective series, Suzanne Pomposello, Experian’s Strategic Account Director for CEM vertical markets, and William Palmer, Senior Sales Engineer, provided insight on how utility providers can manage and maintain accurate client data during system migrations and modernizations, achieve a single customer view and implement an operational data quality program. Check out what they had to say: Q: What are the best practices for effective data quality management that utility providers should follow? SP: To ensure data quality, we advise starting with a detailed understanding of the data your organization is currently maintaining and how new data entering your systems is being utilized. Conducting a baseline assessment and being able to properly validate the accuracy of your data is key to identifying areas that require cleansing and enrichment. Once you know what improvements and corrections need to be made, you can establish a strategy that will empower your organization to unlock the full potential of your data. Q: How does Experian help clients improve their data hygiene? SP: Experian has over 30 years of expertise in data cleansing, which is tapped to help clients deploy tactics and strategies to ensure an acceptable level of data integrity. First, we obtain a complete picture of each organizations objectives and challenges. We then assess the quality of their data and identify sources that require remediation. Armed with insight, we work alongside organizations to develop a phased action plan to standardize and enhance their data. Our data management solutions satisfy a wide range of needs and can be consumed in real-time, bulk and batch form. Q: Are there any protection regulations to be aware of when obtaining updated data? WP: Unlike Experian’s regulated divisions, most Experian Data Quality data elements are not burdened by complex regulations and restrictions. Our focus is on organizations’ main customer data points (e.g., address, email address and phone). We reference this data against unregulated source systems to validate, append and complete customer profiles. Experian’s data quality management tools can serve as a foundation for many regulatory, compliance and governance requirements, including, Metro 2 reporting, TCPA and CCPA. Q: Are demos of Experian’s data management solutions available? If so, where can they be accessed? WP: Yes, you can visit our website to view product functionality clips and recorded demonstrations. Additionally, we welcome the opportunity to explore our comprehensive data quality management tools via tests and live demonstrations using actual client data to gain a better understanding of how our solutions can be used to improve operational efficiency and the customer experience. For more insight on how to cleanse, standardize, and enhance your data to make sure you get the most out of your information, watch our Experian Symposium Series event on-demand. Watch now Learn more About Our Experts: Suzanne Pomposello, Strategic Account Director, Experian Data Quality, North America Suzanne manages the energy vertical for Experian’s Data Quality division, supporting North America. She brings innovative solutions to her clients by leveraging technology to deliver accurate and validated contact data that is fit for purpose. William Palmer, Senior Sales Engineer, Experian Data Quality, North America William is a Senior Sales Engineer for Experian’s Data Quality division, supporting North America. As an expert in the data quality space, he advises utility clients on strategies for immediate and long-term data hygiene practices, migrations and reporting accuracy.

It’s obvious that 2020 was a year of unprecedented change and created brand new opportunities for fraud. In 2021, fraudsters will continue to iterate on new and old methods of attack, requiring businesses to remain flexible and proactive to prevent losses. We created the 2021 Future of Fraud Forecast to help businesses anticipate new types of fraud and prepare and protect consumers on the road ahead. Here are the trends we expect to see over the coming year: Putting a Face to Frankenstein IDs: Synthetic identity fraud will start to rely on “Frankenstein faces” for biometric verification. “Too Good to Be True” COVID Solutions: The promise of at-home test kits, vaccines and treatments will be used as means for sophisticated phishing and social engineering schemes. Stimulus Fraud Activity, Round Two: Fraudsters will take advantage of additional stimulus funding by using stolen data to intercept payments. Say ‘Hello’ to Constant Automated Attacks: Once the stimulus fraud attacks run their course, hackers will increasingly turn to automated methods. Survival of the Fittest for Small Businesses: In 2021, businesses with lackluster fraud prevention tools will suffer large financial losses. To learn more about how to protect your business and customers, download the Future of Fraud Forecast and check out Experian’s fraud prevention solutions. Future of Fraud Forecast Request a call

Previously, we discussed the risks of account takeover and how a Defense in Depth strategy can protect your business. Before implementation it’s important to understand the financial benefits of the strategy. There are a few key steps to assessing and quantifying the value of Defense in Depth. Transaction risk assessment: This requires taking inventory of all possible transactions. Session-level risk analysis: With the transactions categorized by risk level, the next step is to review session history based on the highest risk activity within the session. Quantify the cost of a challenge: There are multiple costs associated with challenging a user using step-up authentication. Consider both direct and indirect costs – failure rate, contact center operational cost, and attrition rate following failed challenges (consider lifetime value of account) Quantify the expected challenge rate: This can be done by comparing the Defense in Depth approach to a traditional approach. Below is a calculator that will help determine the cost of the reduced challenges associated with a Defense in Depth strategy versus a traditional strategy. initIframe('5f039d2e4c508b1b0aafa4bd'); In addition to the quantitative benefits, it is important to consider some of the qualitative benefits of this approach: Challenging at moments that matter: Customers appreciate and expect protection in online banking, especially when moving money externally or updating contact information. This is a great way to achieve both convenience and security. Improved fraud management: By staging the risk decision at the transaction level, the business can balance the type of challenge with the transaction risk. There are incremental cost considerations to include in the business case as well. For instance, there is an increase in transaction calls for a risk assessment at the medium/high risk transactions – about 10% in the example above. Generally, the increased transaction cost is more than offset by the reduction in cost of challenges alone. A Defense in Depth strategy can help businesses manage fraud risk and prevent account takeover in online banking without sacrificing user experience. If you are interested in assistance with building your business case and understanding the strategies to implement a successful Defense in Depth strategy, contact us today. Contact us 1Identity Fraud in the Digital Age, Javelin Strategy & Research, September 2020