Tag: data
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 var expChannel = \"Blog\"; var expBUPartner = \"eCom\"; var expBUSegment = \"Insights-Blog\"; var expProductGrp = \"\";
In today’s digital environment, consumers have higher expectations of their interactions with businesses than ever before – and utility companies are no exception. By obtaining a deeper consumer view, you can improve your contact strategies, allocate resources more effectively, reduce costs and more accurately assess ability to pay. As part of our recently launched Q&A perspective series, Traci Veldboom, Experian Marketing Services Relationship Manager, Jason Weinstein, Experian Account Executive and Kara Marshall, Manager of Energy Efficiency Business Intelligence at Eversource, provided insight on how utility providers can leverage data attributes to enhance targeting efforts and optimize customer assistance and energy efficiency programs. Check out what they had to say: Q: What commercial data insights and services does Experian provide? JW: Experian offers firmographic data attributes to help organizations segment their target market and discover their ideal customers. This data includes contact names, job titles, number of employees, total sales volume, as well as information around the office space itself such as building square footage, office size and multi-tenant codes. Additionally, we have a wealth of business credit data, including legal liability amounts, tax lien indicators and our Commercial Intelliscore. Q: How can data be leveraged to reach customers using different communication channels? Can you gain further insight into cross-sell opportunities for regulated vs. unregulated energy customers? JW: Experian’s ConsumerViewSM database was developed to connect to most DSPs, DMPs, digital publishers, OTVs and more. We offer fully managed digital media buying services and assist with marketing to regulated energy customers by providing a ‘file’ of data and demographic insights on households within a certain service area. This file remains separate from your CRM and can be used for direct marketing purposes. TV: We have several utility clients that service regulated energy customers but also offer unregulated services that they want to promote including home repair services, tree cutting services and smart home devices. As an unregulated business, they are unable to use their regulated customer data files. They license the Experian ConsumerView file as an acquisition tool to reach and expand their customer footprint. KM: At Eversource, we use Experian’s comprehensive consumer marketing data to create targeted audience lists for direct mail and email campaigns. With a better understanding of a consumer’s behavior and ability to pay, we can better promote and optimize our customer assistance and energy efficiency programs. Additionally, we use consumer data for geographic segmentation, so we can reach more relevant audiences and increase the effectiveness of our advertising. Q: How can utility providers identify customers who are likely to sign up for renewable energy services? JW: For clients that have already identified a sample of customers utilizing renewable energy solutions, Experian’s analytics team can create a robust lookalike model to determine similar households that may be likely to sign up for the same services. Alternatively, we can utilize our GreenAwareSM segmentation system to better understand and identify consumers based on their level of green activity – and in turn – convert them into profitable customers. KM: While my primary responsibility is marketing our energy efficiency programs, I have used Experian’s consumer data to help promote our renewable efforts. The natural gas side of Eversource is currently working on a geothermal energy microgrid pilot in Massachusetts. We are leveraging data insights to identify and target a similar audience segment as that of our home weatherization and heating system programs. Additionally, we’ve partnered with our customer service team to promote a ‘Shared Clean Energy Facility’ program designed to bring the benefits of solar panels to lower-income customers. For more insight on how to increase customer acquisitions, identify consumers eligible for financial-aid programs and maximize your marketing spend, watch our Experian Symposium Series event on-demand. Watch now Learn more About Our Experts Traci Veldboom, Relationship Manager, Experian Marketing Services, North America Traci is the Relationship Manager for Experian’s Marketing Services, supporting North America. She supports Experian’s utilities client’s strategic business initiatives and assists with developing multi-channel engagement strategies. Jason Weinstein, Account Executive, Experian Marketing Services, North America Jason is an Account Executive for Experian’s Marketing Services division, supporting North America. He manages relationships with Experian’s utilities clients and helps them to optimize their processes and capabilities with unparalleled data, analytics and technology. Kara Marshall, Manager, Energy Efficiency Business Intelligence, Eversource Kara is Manager of Energy Efficiency Business Intelligence at Eversource, New England’s largest energy provider. She develops customer insights to increase participation in Eversource’s nation-leading energy efficiency programs and improve the overall customer experience.
DDigitalization, also known as the process of using digital technology to provide new opportunities for revenue and growth, continues to remain a top priority for many organizations in 2021. In fact, IDC predicts that by 2024, “over 50% of all IT spending will be directly for digital transformation and innovation (up from 31% in 2018).”[1] By combining data and analytics, companies can make better and more instant decisions, meet customer expectations, and automate for greater efficiency. Advances in AI and machine learning are just a few areas where companies are shifting their spend. Download our new white paper to take a deep dive into other ongoing analytics trends that seem likely to gain even greater traction in 2021. These trends will include: Increased digitalization – Data is a company’s most valuable asset. Companies will continue utilizing the information derived from data to make better data-driven decisions. AI for credit decisioning and personalized banking – Artificial intelligence will play a bigger role in the world of lending and financial services. By using AI and custom machine learning models, lending institutions will be able to create new opportunities for a wider range of consumers. Chatbots and virtual assistants – Because customers have come to expect excellent customer services, companies will increase their usage of chatbots and virtual assistants to facilitate conversations. Cloud computing – Flexible, scalable, and cost-effective. Many organizations have already seen the benefits of migrating to the cloud – and will continue their transition in the next few years. Biometrics – Physical and behavioral biometrics have been identified as the next big step for cybersecurity. By investing in these new technologies, companies can create seamless interactions with their consumers. Download Now [1] Gens, F., Whalen, M., Carnelley, P., Carvalho, L., Chen, G., Yesner, R., . . . Wester, J. (2019, October). IDC FutureScape: Worldwide IT Industry 2020 Predictions. Retrieved January 08, 2021,
The ongoing COVID-19 pandemic has facilitated an increase in information collection among consumers and organizations, creating a prosperous climate for cybercriminals. As businesses and customers adjust to the “new normal,” hackers are honing in on their targets and finding new, more sophisticated ways to access their sensitive data. As part of our recently launched Q&A perspective series, Michael Bruemmer, Experian’s Vice President of Data Breach Resolution and Consumer Protection, provided insight on emerging fraud schemes related to the COVID-19 vaccines and how increased use of digital home technologies could lead to an upsurge in identity theft and ransomware attacks. Check out what he had to say: Q: How did Experian determine the top data breach trends for 2021? MB: As part of our initiative to help organizations prevent data breaches and protect their information, we release an annual Data Breach Forecast. Prior to the launch of the report, we analyze market and consumer trends. We then come up with a list of potential predictions based off the current climate and opportunities for data breaches that may arise in the coming year. Closer to publication, we pick the top five ‘trends’ and craft our supporting rationale. Q: When it comes to data, what is the most immediate threat to organizations today? MB: Most data breaches that we service have a root cause in employee errors – and working remotely intensifies this issue. Often, it’s through negligence; clicking on a phishing link, reusing a common password for multiple accounts, not using two-factor authentication, etc. Organizations must continue to educate their employees to be more aware of the dangers of an internal breach and the steps they can take to prevent it. Q: How should an organization begin to put together a comprehensive threat and response review? MB: Organizations that excel in cybersecurity often are backed by executives that make comprehensive threats and response reviews a top corporate priority. When the rest of the organization sees higher-ups emphasizing the importance of fraud prevention, it’s easier to invest time and money in threat assessments and data breach preparedness. Q: What fraud schemes should consumers be looking out for? MB: The two top fraud schemes that consumers should be wary of are scams related to the COVID-19 vaccine rollout and home devices being held for ransom. Fraudsters have been leveraging social media to spread harmful false rumors and misinformation about the vaccines, their effectiveness and the distribution process. These mistruths can bring harm to supply chains and delay government response efforts. And while ransomware attacks aren’t new, they are getting smarter and easier with people working, going to school and hosting gatherings entirely on their connected devices. With control over home devices, doors, windows, and security systems, cybercriminals have the potential to hold an entire house hostage in exchange for money or information. For more insight on how to safeguard your organization and consumers from emerging fraud threats, watch our Experian Symposium Series event on-demand and download our 2021 Data Breach Industry Forecast. Watch now Access forecast About Our Expert: Michael Bruemmer, Experian VP of Data Breach Resolution and Consumer Protection, North America Michael manages Experian’s dedicated Data Breach Resolution and Consumer Protection group, which aims to help businesses better prepare for a data breach and mitigate associated consumer risks following breach incidents. With over 25 years in the industry, he has guided organizations of all sizes and sectors through pre-breach response planning and delivery.
Dealing with challenges is part of the collections process. But in today’s economic environment, there are even more barriers to overcome. Since it is unclear how long the COVID-19 pandemic and associated financial stress will last, debt collection agencies and departments must evolve and refine their collections and recovery capabilities. As you step into the new collections environment, it will be imperative to keep pace with shifting consumer behaviors and trends and properly react, adapt and engage. Recent data findings show that many consumers are still worried about their finances and ability to pay down existing debt: Revolving Card Credit Line Increases (CLI) are up 78.4% overall1 Almost 3% of auto loans are 30+ Days Past Due (DPD) 2% of unsecured personal loans are 30+ Days Past Due (DPD) New account originations are up 0.8% overall Download our latest white paper to discover more industry trends, outlooks for 2021, and the benefits of leveraging data and advanced analytics to develop better strategies, make more profitable decisions and better serve consumers in times of continued economic uncertainty. Access white paper Learn more 1Findings from Experian\'s Ascend Market Insights Dashboard, data based on number of accounts. Data refreshed: January 24, 2021.
2020 is finally over – been there, done that. And while it seems safe to say most everyone is all too eager to kick off a new calendar year, the reality is we’re still reeling – and will continue to reel – through the economic impacts of the COVID-19 global pandemic. As we inch closer to the one year marker of when many businesses were sent home – across all industries, including those tech-inclined and those less so – the understatement of the year is that the world has since changed as have consumer communication preferences, how businesses and customers interact, tweaked definitions of privacy, and new (heightened) expectations of evolving a positive customer experience with minimal friction and maximum security. While last year’s predictions of entering a new set of Roaring 20’s may not have panned out the way we had initially imagined, many of the trends thought to evolve over the last 365 days did. As we all look toward a post-pandemic world, here are six top trends to keep tabs on throughout 2021. 1. Data Data as a commodity and as a business differentiating factor has reached an all-time high. It’s doing more across the entire customer lifecycle and can elevate businesses to best prep for growth, especially as consumers begin to look for more financial products (whether looking for financial assistance as the CARES Act accommodation period ends, or to take advantage of the booming mortgage industry, etc.). Data can also give more insights into consumers than ever before. Far beyond just credit scores and financial data, today’s data sets can reveal consumers’ lifestyle preferences, their preferred communication channels, their rental histories, and so much more. With alternative credit data and non-traditional data (including consumer-permissioned data), businesses can get a holistic picture of their customers’ payment behaviors. That streaming media service monthly payment may seem minimal, but now could increase your credit score through Experian Boost. Experian is still making big strides in all efforts to use data for good. As of December 31, 2020, Experian Boost has “boosted” Americans’ credit scores nearly 47 million points. Additionally, throughout 2020, Experian worked with financial institutions and credit furnishers to continue to put consumers first and serve as the consumer’s bureau. Coming up in 2021? Using data for differentiation, which can ultimately drive business growth. From instant prescreens to identifying your best customers (and offering them cross-sell and upsell opportunities to increase retention and customer loyalty) to helping customers that may be on the brink of financial distress and connecting them with management solutions to help them get back on their feet, data can help businesses – and their customers – get there. 2. Fraud and Friction (And the Reduction of Both) With the pandemic, fraud saw increases across the board. Here are just some quick stats: 200% increase in first-time online banking usage immediately following shelter-in-place orders (Aite Group, “Workplace Distancing: Adapting Fraud and AML Operations to COVID-19,” April 2020) 652% year-over-year increase in records found on the dark web (Experian CyberAgent technology) 50% increase in human farming – real people being hired for purposes of fraud – month-over-month in March 2020 (Arkose Labs) And, unsurprisingly, consumer and business sentiments toward fraud are also evolving with these increasing trends. For example, according to Experian’s North America Trends Report, half of consumers continue to site security as the most important factor of their online experience. Additionally, there’s been an increase in the percentage of businesses who have recently increased or are planning to increase fraud budget from 76% in 2019 to 89% as of Sept. 2020. More complex phishing schemes and increased fraudster activity is due in part to numerous industries having to shift to online processes and business transactions overnight. Adoption for mobile wallets has jumped 11% since July 2020, according to the 2020 Global Insights Report. Systems and technology that were not ready or not armed with the necessary infrastructure left critical access points open that could be exploited by fraudsters. Fraud exists across the customer lifecycle, at every access point. And while fraud is complex, with Experian as your partner, solving it isn’t. Innovative technology enables businesses to prevent fraud by identifying credible customers and applying the correct treatment to the riskiest consumer and business accounts. We can help you develop a layered risk management strategy so you can focus resources on growing and protecting your customer relationships. 3. A New Administration – Changing of the Guards on the Regulatory Front With the new year enters the inauguration of a new president and administration. Though there is still much to be determined, certain areas are drawing a lot of attention with this changing of the guards. The highlights? The CFPB. Priorities and leadership could change. With COVID-19 top of mind, it is likely there will be aggressive agendas put forth to help protect the millions of consumers who have suffered economic distress and harm as a result of the pandemic. Data Portability. With an increased consumer appetite to port their data, questions and concerns around data security – and how to verify for a third party asking for the data – are also on the rise. There are a number of issues facing financial institutions around data portability, one of the largest being defining the line between consumer account information and proprietary data. All things privacy – state vs. national bills. The debate continues on how to move forward (whether privacy legislation will be handled by the states or at the national level), but for now it seems there is more progress at the state level. California was the first state to push through state-level privacy legislation in the form of the California Consumer Privacy Act of 2018. Twenty-four states are considering legislation that would require consent before collecting or disclosing personal information with third parties. 4. Analytics + Digitalization – Smarter, Better, Faster COVID-19 accelerated digital transformation for many. Some companies were ready, having already started making the headway in years prior, while others struggled – and some continue to struggle. The pandemic – and its corresponding recovery – is reason now, more than ever, to get some of your digital transformation priorities checked off of your list. Your customers demand it and your business needs it. Tackling analytics and digitalization not only brings your business up to speed, but improves your decisioning, enhances your offerings, and enables better platforms and data usage. In addition to digitalization, artificial intelligence for credit decisioning and personalized banking can also be expected to be a top trend, especially AI that is ethical and explainable, as will the increasing adoption and implementation of cloud computing. As consumer experience continues to reign supreme, any and all technology to enhance and improve that experience – think chatbots and virtual assistants – will also likely increase in presence. 5. Verification & Identity Identity has been a trending topic over the last few years, brought on by increasingly digital lifestyles and the intersection of personalization, frictionless transactions and adequate security. Identity verification and verification of other information such as income, employment and the like are increasingly needed in a today’s pandemic and tomorrow’s post-pandemic world. Leveraged across the lifecycle and during critical customer interactions, the need is especially heightened for insights, data accuracy, and diversification of data sets – to name a few. And while it was already established that identity verification is not just for marketing services, there are now even greater needs for financial institutions to be able to confidently know that their customers are who they say they are. Some areas to keep your eye on in 2021? Identity, income, assets and employment. 6. Redefining the Modern Mortgage As has been a common trend, spurred by the disruption caused by COVID-19, the mortgage industry is one of the many to have a magnifying glass brought to its areas for improvement. Some of those areas include operational efficiency, digital adoption and transparency. In line with the better and faster needs that lenders are continually trying to pace with, the need for speed is hitting mortgage originations, with an ideal situation outlined as closing in 30 days or less. Creating operational efficiencies through faster, fresher data can be the key for lenders to more accurately assess a borrower’s ability to pay upfront. Additionally, now, as most mortgage lenders are breaking previous origination records by a landslide (thanks pandemic), there’s new focus on other performance indicators. With such impetus, the modern mortgage is constantly evolving, incorporating customer-centric facets including a seamless digital process, providing meaningful customer experiences and leveraging the latest and greatest technology to better future-proof the industry through scalable technology, while aiming to reduce costs. For all your needs in 2021 and beyond, Experian has you covered. Learn More
New challenges created by the COVID-19 pandemic have made it imperative for utility providers to adapt strategies and processes that preserve positive customer relationships. At the same time, they must ensure proper individualized customer treatment by using industry-specific risk scores and modeled income options at the time of onboarding As part of our ongoing Q&A perspective series, Shawn Rife, Experian’s Director of Risk Scoring, sat down with us to discuss consumer trends and their potential impact on the onboarding process. Q: Several utility providers use credit scoring to identify which customers are required to pay a deposit. How does the credit scoring process work and do traditional credit scores differ from industry-specific scores? The goal for utility providers is to onboard as many consumers as possible without having to obtain security deposits. The use of traditional credit scoring can be key to maximizing consumer opportunities. To that end, credit can be used even for consumers with little or no past-payment history in order to prove their financial ability to take on utility payments. Q: How can the utilities industry use consumer income information to help identify consumers who are eligible for income assistance programs? Typically, income information is used to promote inclusion and maximize onboarding, rather than to decline/exclude consumers. A key use of income data within the utility space is to identify the eligibility for need-based financial aid programs and provide relief to the consumers who need it most. Q: Many utility providers stop the onboarding process and apply a larger deposit when they do not get a “hit” on a certain customer. Is there additional data available to score these “no hit” customers and turn a deposit into an approval? Yes, various additional data sources that can be leveraged to drive first or second chances that would otherwise be unattainable. These sources include, but are not limited to, alternative payment data, full-file public record information and other forms of consumer-permissioned payment data. Q: Have you noticed any employment trends due to the COVID-19 pandemic? How can those be applied at the time of onboarding? According to Experian’s latest State of the Economy Report, the U.S. labor market continues to have a slow recovery amidst the current COVID-19 crisis, with the unemployment rate at 7.9% in September. While the ongoing effects on unemployment are still unknown, there’s a good chance that several job/employment categories will be disproportionately affected long-term, which could have ramifications on employment rates and earnings. To that end, Experian has developed exclusive capabilities to help utility providers identify impacted consumers and target programs aimed at providing financial assistance. Ultimately, the usage of income and employment/unemployment data should increase in the future as it can be highly predictive of a consumer’s ability to pay For more insight on how to enhance your collection processes and capabilities, watch our Experian Symposium Series event on-demand. Watch now Learn more About our Experts: Shawn Rife, Director of Risk Scoring, Experian Consumer Information Services, North America Shawn manages Experian’s credit risk scoring models while empowering clients to maximize the scope and influence of their lending universe. He leads the implementation of alternative credit data within the lending environment, as well as key product implementation initiatives.
The global pandemic has created major shifts in the ways companies operate and innovate. For many organizations, a heavy reliance on cloud applications and cloud services has become the new normal, with cloud applications being praised as “an unsung hero” for accommodating a world in crisis, as stated in an article from the Channel Company. However, cloud computing isn’t just for consumers and employees working from home. In the last few years, cloud computing has changed the way organizations and businesses operate. Cloud-based solutions offer the flexibility, reduced operational costs and fast deployment that can transform the ways traditional companies operate. In fact, migrating services and software to the cloud has become one of the next steps to a successful digital transformation. What is cloud computing? Simply put – it’s the ability to run applications or software from remote servers, hosted by external providers, also known as infrastructure-as-a-service (IaaS). Data collected from cloud computing is stored online and is accessed via the Internet. According to a study by CommVault, more than 93% of business leaders say that they are moving at least some of their processes to the cloud, and a majority are already cloud-only or plan to completely migrate. In a recent Forrester blog titled ‘Troubled Times Test Traditional Tech Titans,’ Glenn O’Donnell, Vice President, Research Director at Forrester highlights that “as we saw in prior economic crises, the developments that carried business through the crisis remained in place. As many companies shift their infrastructure to cloud services through this pandemic, those migrated systems will almost certainly remain in the cloud.” In short, cloud computing is the new wave – now more than ever during a crisis. But what are the benefits of moving to the cloud? Flexibility Cloud computing offers the flexibility that companies need to adjust to fluctuating business environments. During periods of unexpected growth or slow growth, companies can expand to add or remove storage space, applications, or features and scale as needed. Businesses will only have to pay for the resources that they need. In a pandemic, having this flexibility and easy access is the key to adjusting to volatile market conditions. Reduced operational costs Companies (big or small) that want to reduce costs from running a data center will find that moving to the cloud is extremely cost-effective. Cloud computing eliminates the high cost of hardware, IT resources and maintaining internal and on-premise data systems. Cloud-based solutions can also help organizations modernize their IT infrastructures and automate their processes. By migrating to the cloud, companies will be able to save substantial capital costs and see a higher return on investment – while maintaining efficiency. Faster deployment With the cloud, companies get the ability to deploy and launch programs and applications quickly and seamlessly. Programs can be deployed in days as opposed to weeks – so that businesses can operate faster and more efficiently than ever. During a pandemic, faster deployment speeds can help organizations accommodate, make updates to software and pivot quickly to changing market conditions. Flexible, scalable, and cost-effective solutions will be the keys to thriving during and after a pandemic. That’s why we’ve enhanced a variety of our solutions to be cloud-based – to help your organization adapt to today’s changing customer needs. Solutions like our Attribute Toolbox are now officially on the cloud, to help your organizations make better, faster, and more effective decisions. Learn More
No one can deny that the mortgage and real estate industries have been uniquely affected by COVID-19. Social distancing mandates have hindered open house formats and schedules. Meanwhile, historically low-interest rates, pent-up demand and low housing inventory created a frenzied sellers’ market with multiple offers, usually over-asking. Added to this are the increased scrutiny of how much borrowers will qualify and get approved for with tightened investor guidelines, and the need to verify continued employment to ensure a buyer maintains qualifying status through closing. As someone who’s spent more than 15 years in the industry and worked on all sides of the transaction (as a realtor and for direct lenders), I’ve lived through the efforts to revamp and digitize the process. However, it wasn’t until recently that I purchased my first home and experienced the mortgage process as a consumer. And it was clear that, for most lenders, the pandemic has only served to shine a light on a still somewhat fragmented mortgage process and clunky consumer experience. Here are three key components missing from a truly modernized mortgage experience: Operational efficiency Knowing that the industry had made moves toward a digital mortgage process, I hoped for a more streamlined and seamless flow of documents, loan deliverables and communication with the lender. However, the process I experienced was more manual than expected and disjointed at times. Looking at a purchase transaction from end to end, there are at least nine parties involved: buyer, seller, realtors, lender, home inspectors/inspection vendors, appraiser, escrow company and notary. With all those touchpoints in play, it takes a concerted effort between all parties and no unforeseen issues for a loan to be originated faster than 30 days. Meanwhile, the opposite has been happening, with the average time to close a loan increasing to 49 days since the beginning of the pandemic, per Ellie Mae’s Origination Insights Report. Faster access to fresher data can reduce the time to originate a mortgage. This saves resource hours for the lender, which equates to savings that can ultimately be passed down to the borrower. Digital adoption There are parts of the mortgage process that have been digitized, yes. However, the mortgage process still has points void of digital connectivity for it to truly be called an end-to-end digital process. The borrower is still required to track down various documents from different sources and the paperwork process still feels very “manual.” Printing, signing and scanning documents back to the lender to underwrite the loan add to the manual nature of the process. Unless the borrower always has all documents digitally organized, requirements like obtaining your W-2’s and paystubs, and continuously providing bank and brokerage statements to the lender, make for an awkward process. Modernizing the mortgage end-to-end with the right kind of data and technology reduces the number of manual processes and translates into lower costs to produce a mortgage. Turn times are being pushed out when the opposite could be happening. A streamlined, modernized approach between the lender and consumer not only saves time and money for both parties, it ultimately enables the lender to add value by providing a better consumer experience. Transparency Digital adoption and better digital end-to-end process are not the only keys to a better consumer experience; transparency is another integral part of modernizing the mortgage process. More transparency for the borrower starts with a true understanding of the amount for which one can qualify. This means when the loan is in underwriting, there needs to be a better understanding of the loan status and the ability to better anticipate and be proactive about loan conditions. Additionally, the lender can profit from gaining more transparency and visibility into a borrower’s income streams and assets for a more efficient and holistic picture of their ability to pay upfront. This allows for a more streamlined process and enables the lender to close efficiently without sacrificing quality underwriting. A multitude of factors have come into play since the beginning of the pandemic – social distancing mandates have led to breakdowns in a traditionally face-to-face process of obtaining a mortgage, highlighting areas for improvement. Can it be done faster, more seamlessly? Absolutely. In ideal situations, mortgage originators can consistently close in 30 days or less. Creating operational efficiencies through faster, fresher data can be the key for a lender to more accurately assess a borrower’s ability to pay upfront. At the same time, a digital-first approach enhances the consumer experience so they can have a frictionless, transparent mortgage process. With technology, better data, and the right kind of innovation, there can be a truly end-to-end digital process and a more informed consumer. Learn more
This is the fourth in a series of blog posts highlighting optimization, artificial intelligence, predictive analytics, and decisioning for lending operations in times of extreme uncertainty. The first post dealt with optimization under uncertainty, the second with predicting consumer payment behavior, and the third with validating consumer credit scores. This post describes some specific Experian solutions that are especially timely for lenders strategizing their response to the COVID Recession. Will the US economy recover from the pandemic recession? Certainly yes. When will the economy recover? There is a lot more uncertainty around that question. Many people are encouraged by positive indicators, such as the initial rebound of the stock market, a return of many of the jobs lost at the beginning of the pandemic, and a significant increase in housing starts. August’s retail spending and homebuilder confidence are very encouraging economic indicators. Other experts doubt that the “V-shaped” recovery can survive flare-ups of the virus in various parts of the US and the world, and are calling for a “W-shaped” recovery. Employment indicators are alarming: many people remain out of work, some job losses are permanent, and there are more initial jobless claims each week now than at the height of the Great Recession. Serious hurdles to economic recovery may remain until a vaccine is widely available: childcare, urban transportation, and global trade, for example. I’m encouraged by the resilience of many of our country’s consumer lenders. They are generally responding well to these challenges. If past recessions are a guide, some lenders will not survive these turbulent times. This time, many lenders—whether or not they have already adopted the CECL accounting standards—have been increasing allowances for their anticipated credit losses. At least one rating agency believes major banks are prepared to absorb those losses from earnings. The lenders who are most prepared for the eventual recovery will be those that make good decisions during these volatile times and take action to put themselves in the best position in anticipation of the recovery that will certainly follow. The best lenders are making smart investments now to be prepared to capitalize on future opportunities. Experian’s analytics and consulting experts are continuously improving our suite of solutions that help consumer lenders and others assess consumer behavior and respond quickly to the rapidly fluctuating market conditions as well as changing regulations and credit reporting practices. Our newly announced Economic Response and Recovery Suite includes the ABCD’s that lenders need to be resilient and competitive now and to prepare to thrive during the eventual recovery: A – Analytics. As I’ve written about in prior blog posts, data is a prerequisite to making good business decisions, but data alone is not enough. To make wise, insightful decisions, lenders need to use the most appropriate analytical techniques, whether that means more meaningful attributes, more predictive and compliant credit scores, more accurate and defensible loss forecasting solutions, or optimization systems that help develop strategies in a world where budgets, regulations, and other constraints are changing. For example, Experian has released a set of Spotlight 2020 Attributes that help consumer lenders create a positive experience for customers who have received an accommodation during the pandemic. In many cases motivated by the new race to improve customer experience online, and in other cases as a reaction to new and creative fraud schemes, some clients are using this period as an opportunity to explore or deploy ethical and explainable Artificial Intelligence. B – Business Intelligence. Credit bureaus like Experian are uniquely situated to understand the impact of the COVID recession on America’s consumers. With impact reports, dashboards, and custom business intelligence solutions, lenders are working during the recession to gain an even better understanding of their current and prospective customers. We’re helping many of them to proactively help consumers when they need it most. For example, lenders have turned to us to understand their customer’s payment hierarchy—which bills they pay first when times are tough. Our free COVID-19 US Business Risk Index helps make lending options available to the businesses who need them most. And we’ve armed lenders with recommendations for which of our pre-existing attributes and scores are most helpful during trying times. Additional reporting tools such as the Auto Market Tracker, Ascend Market Insights Dashboard, and the weekly economic update video provide businesses with information on new market trends—information that helps them respond during the recession and promises to help them grow during the eventual recovery. C – Consulting. It’s good to turn data into information and information into insight, but how do these lenders incorporate these insights in their business strategies? Lenders and other businesses have been turning to Experian’s analytics and Advisory services consultants to unlock the information hidden in credit and other data sources—finding ways to make their business processes more efficient and more effective while developing quick response plans and more long-term recovery strategies. D – Delivery. Decision science is the practice of using advanced analytics, artificial intelligence, and other techniques to determine the best decision based on available data and resources. But putting those decisions into action can be a challenge. (Organizations like IBM and Gartner estimate that a great majority of data science projects are never put into production.) Experian technologies—from our analytics platform to our attribute integration and decision management solutions ensure that data-driven decisions can be quickly implemented to make a real difference. Treating each customer optimally has a number of benefits—whether you are trying to responsibly grow your portfolio, reduce credit losses and allowances, control servicing costs, or simply staying in compliance during dynamic times. In the age of COVID, IT departments have placed increased priority on agility, security, customer experience, and cost control, and appreciate cloud-first approach to deploying analytics. It’s too early to know how long this period of extreme uncertainty will last. But one thing is certain: it will come to an end, and the economy will recover someday. I predict that many of the companies that make the best use of data now will be the ones who do the best during the recovery. To hear more ways your organization can navigate this downturn and the recovery to follow, please watch our on-demand webinar and check out our Economic Response and Recovery Suite. Watch the Webinar
In today’s uncertain economic environment, the question of how to reduce portfolio volatility while still meeting consumers’ needs is on every lender’s mind. With more than 100 million consumers already restricted by traditional scoring methods used today, lenders need to look beyond traditional credit information to make more informed decisions. By leveraging alternative credit data, you can continue to support your borrowers and expand your lending universe. In our most recent podcast, Experian’s Shawn Rife, Director of Risk Scoring and Alpa Lally, Vice President of Data Business, discuss how to enhance your portfolio analysis after an economic downturn, respond to the changing lending marketplace and drive greater access to credit for financially distressed consumers. Topics discussed, include: Making strategic, data-driven decisions across the credit lifecycle Better managing and responding to portfolio risk Predicting consumer behavior in times of extreme uncertainty Listen in on the discussion to learn more. Experian · Effective Lending in the Age of COVID-19
As the COVID-19 pandemic continues to create uncertainty for the U.S. economy, different states and industries have seen many changes with each passing month. In our July edition of the State of the Economy report, written by Principal Economist Joseph Mayans, we’ll be breaking down the data that financial institutions can use to navigate a recovery. Labor markets and state-level employment impact Prior to the pandemic, unemployment in the U.S. was at a 50-year low, at an astonishing rate of 3.5%. Following the start of the pandemic, research shows that unemployment rose from 6.2 million in February to 20.5 million in May 2020, and sent the unemployment rate soaring to 14.7%. However, the data from last month’s State of the Economy Report revealed that the unemployment rate began to decline, with 46 states seeing rises in new job opportunities. Although unemployment started to increase, many states (like Nevada) saw a 25.3% unemployment rate statewide. The numbers for June are much more promising, and reveal a continuous uptick in the number of jobs added. The unemployment rate in the U.S. also fell from 13.3% to 11.1%. The impact to industries COVID-19 had major impacts on every industry in the U.S., with the leisure and hospitality industry being the hardest-hit at 7.7 millions job lost. According to CNBC, “The large number of layoffs in this industry led the U.S. economy to its worst month of job losses in modern history.” However, job growth for the leisure and hospitality industry began to gain momentum in May, with 1.2 million jobs added. This can be attributed to a slow and gradual rollback of stay-at-home orders nationwide. As of June 2020, 4.8 million jobs have been added to this industry. The trade, transportation, and utilities, as well as education and health services, manufacturing, and business services industries also saw improvements in employment. The impact to retail sales Clothing stores, furniture, and sporting goods stores were only a few of the many retailers that saw heavy declines following lockdown orders. After two consecutive months of decline, retail sales finally rebounded by 17.7% in May, with the largest gains occurring in clothing stores (+188%). In June, retail sales continued to rise substantially, resulting in saw a v-shaped bounce. However, with unemployment benefits nearing the expiration date and the number of pandemic cases continuing to increase, recovery remains tentative. Our State of the Economy report also covers manufacturing, homebuilders, consumer sentiments, and more. To see the rest of the data, download our report for July 2020. We’ll be sharing a new report every month, so keep an eye out! Download Now
Consumer sentiment can help automotive marketers create a more human connection with consumers.
Experian recently released its Q1 2020 Market Trends report, which provides insights about the vehicles on the road and the most popular vehicle segments.
Every few months we hear in the news about a fraud ring that has been busted here in the U.S. or in another part of the world. In May, I read about a fraud ring based in Georgia and Louisiana that bought 13,000 stolen identities of children who were on the Louisiana Medicaid program and billed the government for services not rendered. This group defrauded the Medicaid program of more than $500,000. This is just one of many stories that we hear about fraud rings, and given the rapidly changing economic environment, now is the time for businesses to think about how to protect against fraud rings. There are a number of challenges that organizations may have when it comes to sharing trends and collaborations, understanding the ways to tie fraud rings together, creating treatments for identifying fraud rings and ways to store and catalogue fraud ring experiences so they can be easily recognized. The trouble with identifying fraud rings It’s important to understand the challenges that organizations have because they see the fraud rings through their own internal lens. Here are a few of the top things businesses should work on: Think like a fraudster. This will help businesses become more creative in their approach to fraud prevention. Facilitate internal collaboration. Share with in-organization partners. Sometimes this can be difficult due to organizational structure. Promote external collaboration. Intel-sharing groups are a great way for businesses to network within their industries and learn about the fraud that others are seeing. An organization that I’ve worked with in the past is the National Cyber Forensic and Training Alliance (NCFTA). Putting the pieces together How do businesses identify a fraud ring? There are three steps to get started. The first is reviewing and understanding the data. Fraudsters are lazy and want to replicate the process over and over again, and because of this there is always some piece of information that is repeated. It could be a name, an email address, device fingerprint, or similar. The second step is tying the fraud ring together. This is done by creating rules to help identify the trends. Having rules in place to identify fraud rings allows businesses to easily pull stats together for their leadership. Lastly, applying an acronym or name to the particular fraud ring and adding comments to the cases associated with a particular ring will help with post-investigation analysis. Learning from the past Before I became a consultant, I remember identifying a fraud ring that was submitting events with the same language pack and where the device fingerprint was staying consistent. Those events were being referred out for review and marked with the same note. At a post-mortem review, I was able to talk to the fraud ring we had seen, and it was easy to pull all events associated with this fraud ring because my team had marked the events with the same comments. Another fraud ring example happened a few years ago. A client called me and said that they were under a fraud attack and this fraud ring was rotating the email handle. I reviewed the data and came up with a rule to catch this activity. Fraud rings will use email handle rotation to help them keep track of accounts that are opened or what emails they used in the past. By coupling the email handle rotation with an email verification service like Emailage, this insight could be very telling. I would assume that when fraud rings use email handle rotation these emails are new and have just been created. These are just a few of the many fraud rings that I’ve encountered over the course of my career and I’m sure there will be a lot more in the years to come. The best advice I can give to anyone that reads this post is to understand the data that you are reviewing, look for anomalies within the data, ask questions and test your theories by running queries on the data that you’re reviewing. I would love to hear about the different fraud rings that you’ve encountered over your career. Stay safe. Contact us
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