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A data-driven customer experience certainly has a nice ring, but can your organization deliver on the promise? What we're really getting at is whether you can provide convenience and personalization throughout the customer journey. Using data to personalize the customer journey About half of consumers say personalization is the most important aspect of their online experience. Forward-thinking lenders know this and are working to implement digital transformations, with 87 percent of business leaders stating that digital acceleration has made them more reliant on quality data and insights. For many organizations, lack of data isn't the issue — it's collecting, cleaning and organizing this data. This is especially difficult if your departments are siloed or if you're looking to incorporate external data. What's more, you would need the capabilities to analyze and execute the data if you want to gain meaningful insights and results. LEARN: Infographic: Automated Loan Underwriting Journey Taking a closer look at two important parts of the customer journey, here's how the right data can help you deliver an exceptional user experience. Prescreening To grow your business, you want to identify creditworthy consumers who are likely to respond to your credit offers. Conversely, it's important to avoid engaging consumers who aren't seeking credit or may not meet your credit criteria. Some of the external data points you can incorporate into a digital prescreening strategy are: Core demographics: Identify your best customers based on core demographics, such as location, marital status, family size, education and household income. Lifestyle and financial preferences: Understand how consumers spend their time and money. Home and auto loan use: Gain insight into whether someone rents or owns a home, or if they'll likely buy a new or used vehicle in the upcoming months. Optimized credit marketing strategies can also use standard (and custom) attributes and scores, enabling you to segment your list and create more personalized offers. And by combining credit and marketing data, you can gain a more complete picture of consumers to better understand their preferred channels and meet them where they are. CASE STUDY: Clear Mountain Bank used Digital Prescreen with Micronotes to extend pre-approved offers to consumers who met their predetermined criteria. The refinance marketing campaign generated over $1 million in incremental loans in just two months and saved customers an average of $1,615. Originations Once your precise targeting strategy drives qualified consumers to your application, your data-driven experience can offer a low-friction and highly automated originations process. Alternative credit data: Using traditional and alternative credit data* (or expanded FCRA-regulated data), including consumer-permissioned data, allows you to expand your lending universe, offer more favorable terms to a wider pool of applicants and automate approvals without taking on additional risk. Behavioral and device data: Leveraging behavioral and device data, along with database verifications, enables you to passively authenticate applicants and minimize friction. Linked and digital applications: Offering a fully digital and intuitive experience will appeal to many consumers. In fact, 81 percent of consumers think more highly of brands after a positive digital experience that included multiple touchpoints. And if you automate verifications and prefill applications, you can further create a seamless customer experience. READ: White paper: Getting AI-driven decisioning right in financial services Personalization depends on persistent identification The vast majority (91 percent) of businesses think that improving their digital customer journey is very important. And rightly so: By personalizing digital interactions, financial institutions can identify the right prospects, develop better-targeted marketing campaigns and stay competitive in a crowded market. DOWNLOAD: A 5-Step Checklist for Identifying Credit-Active Prospect To do this, you need an identity management platform that enables you to create a single view of your customer based on data streams from multiple sources and platforms. From marketing to account management, you can use this persistent identity to inform your decisions. This way, you can ensure you're delivering relevant interactions and offers to consumers no matter where they are. WATCH: Webinar: Omnichannel Marketing – Think Outside the Mailbox Personalization offers a win-win Although they want personalization, only 33 percent of consumers have high confidence in a business' ability to recognize them repeatedly.4 To meet consumer expectations and remain competitive, you must deliver digital experiences that are relevant, seamless, and cohesive. Experian Consumer View helps you make a good first impression with consumer insights based on credit bureau and modeled data. Enrich your internal data, and use segmentation solutions to further refine your target population and create offers that resonate and appeal. You can then quickly deliver customized and highly targeted campaigns across 190 media destinations. From there, the Experian PowerCurve® Originations Essentials, an automated decisioning engine, can incorporate multiple external and internal data sources to optimize your strategy. *Disclaimer: When we refer to “Alternative Credit Data," this refers to the use of alternative data and its appropriate use in consumer credit lending decisions, as regulated by the Fair Credit Reporting Act. Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.

In recent years, the automotive industry has witnessed average loan amounts spike due to ongoing inventory challenges. Though, in the fourth quarter of 2022, we are beginning to see numbers level out—a positive sign that the market is bouncing back. Experian’s State of the Automotive Finance Market Report: Q4 2022 found that the year-over-year (YOY) average new loan amount increased 4.04%, a smaller growth rate compared to 12.46% YOY in Q4 2021, while the average used loan amount dropped from a 20.96% YOY increase last year to only a 1.38% YOY increase this quarter. The average loan amount financed for a new vehicle increased to $41,445 in Q4 2022, from $39,834 in Q4 2021 and $35,420 in Q4 2020. On the used side, the loan amount increased to $27,768 this quarter, from $27,390 the previous year and $22,643 in Q4 2020. While the loan amount increases weren’t as drastic compared to previous years, we are still witnessing considerable growth in average monthly payments due to increased interest rates. In Q4 2022, captives offered a 5.45% interest rate for new vehicles, from 3.14% in Q4 2021 and credit unions increased from 3.61% to 5.49% year-over-year. Banks were considerably higher, with a 7% interest rate, a jump from 4.34% this time last year. For used vehicles, credit unions had the lowest rate, coming in at 7.03% in Q4 2022, from 5.08% in Q4 2021—while captives and banks offered similar rates, with captives at 9.25% this quarter, up from 7.11% last year and banks having a 9.34% rate, from 6.47% in Q4 2021. The increased rates resulted in the average monthly payment for a new vehicle hitting $716 this quarter, from $646 in Q4 2021, while the average monthly payment for a used vehicle was $526 in Q4 2022, up from $490 the previous year. Staying up to date on the latest trends and data will enable automotive professionals to properly assist consumers who are currently in the market for a vehicle and ensure they find a monthly payment that fits their budget. To learn more about automotive finance trends, view the full State of the Automotive Finance Market: Q4 2022 presentation on demand.

What Is Identity Proofing? Identity proofing, authentication and management are becoming increasingly complex and essential aspects of running a successful enterprise. Organizations need to get identity right if they want to comply with regulatory requirements and combat fraud. It's also becoming table stakes for making your customers feel safe and recognized. Nearly 75 percent of consumers expect businesses to protect them online, and 70 percent say it's important for businesses they frequently deal with to identify them across visits.1 Identify proofing is the process organizations use to collect, validate and verify information about someone. There are two goals — to confirm that the identity is real (i.e., it's not a synthetic identity) and to confirm that the person presenting the identity is its true owner. The identity proofing process also relates to and may overlap with other aspects of identity management. Identity proofing vs identity authentication Identity proofing generally takes place during the acquisition or origination stages of the customer lifecycle — before someone creates an account or signs up for a service. Identity authentication is the ongoing process of re-checking someone's identity or verifying that they have the authorization to make a request, such as when they're logging into an account or trying to make a large transaction. READ: Leveraging Artificial Intelligence to Optimize Digital Identity Strategies How does identity proofing work? The National Institute of Standards and Technology (NIST) Special Publication 800-63-3, Digital Identity Guidelines, has an overview of the three stages of the identity proofing process: Resolution: The goal of the first step is to accurately identify the single, unique individual that the identity represents. Resolution is relatively easy when detailed identity information is provided. In the real world, collecting detailed data conflicts with the need to provide a good customer experience. Resolution still has to occur, but organizations have to resolve identities with the minimum amount of information. Validation: The validation step involves verifying that the person's information and documentation are legitimate, accurate and up to date. It potentially involves requesting additional evidence based on the level of assurance you need. Verification: The final step confirms that the claimed identity actually belongs to the person submitting the information. It may involve comparing physical documents or biometric data and liveness tests, such as a comparison of the driver's license to a selfie that the person uploads. The NIST guidelines are the standards that federal agencies must follow for their digital identity services, and industry often uses the same guidelines as a framework for their identity and access processes. The current NIST guidelines — Revision 3 — were updated in 2017 and have three identity assurance levels (or IALs). IAL 1: Doesn't require identity proofing to create an account. For example, you may be able to sign up for an online game or newsletter without submitting any identification. IAL 2: Requires users to submit identifying information and evidence either in-person or remotely. For example, when you need to upload a picture of your driver's license and a selfie to create an account or confirm a transaction. It also requires address confirmation and may include (but doesn't require) biometric checks, such as a fingerprint or face scan. IAL 3: Requires in-person or supervised remote identity verification, address verification and biometric checks. There is a proposal to update the NIST guidelines, and the NIST is requesting comments on the proposed Revision 4 through March 24, 2023. The updates aim to advance equity, give consumers additional choices, deter fraud and build on the lessons learned from previous revisions and real-world implementation. It also has four identity assurance levels, starting with IAL0, which is when there's no requirement for identity proofing. Service providers that offer identity proofing, verification and management services can get certified if they conform to the current NIST guidelines. For example, Experian's identity proofing solutions are NIST 800-63-3 IAL2 certified by Kantara Initiative. Building an effective identity proofing strategy By requiring identity proofing before account opening, organizations can help detect and deter identity fraud and other crimes. And although the NIST offers guidelines, you can use different online identity verification methods to implement an effective digital identity proofing and management system. These may include: Document verification plus biometric data: The consumer uploads a copy of an identification document, such as a driver's license, and takes a selfie or records a live video of their face. Database validations: The proofing solution verifies the shared identifying information, such as a name, date of birth, address and Social Security number against trusted databases, including credit bureau and government agency data. Knowledge-based authentication (KBA): The consumer answers knowledge-based questions, such as account information, to confirm their identity. It can be a helpful additional step, but they offer a low level of assurance, partially because data breaches have exposed many people's personal information. In part, the processes you'll use may depend on business policies, associated risks and industry regulations, such as know your customer (KYC) and anti-money laundering (AML) requirements. But organizations also have to balance security and ease of use. Each additional check or requirement you add to the identity proofing flow can help detect and prevent fraud, but the added friction they bring to your onboarding process can also leave customers frustrated — and even lead to customers abandoning the process altogether. WATCH: Webinar: Identity Evolved — Building consumer trust and engagement Finding the right amount of friction can require a layered, risk-based approach. And running different checks during identity proofing can help you gauge the risk involved. For example, comparing information about a device, such as its location and IP address, to the information on an application. Or sending a one-time password (OTP) to a mobile device and checking whether the phone number is registered to the applicant's name. With the proper systems in place, you can use high-risk signals to dynamically adjust the proofing flow and require additional identity documents and checks. At the same time, if you already have a high level of assurance about the person's identity, you can allow them to quickly move through a low-friction flow. Experian goes beyond identity proofing Experian builds on its decades of experience with identity management and access to multidimensional data sources to help organizations onboard, authenticate and manage customer identities. With a single API integration, Experian CrossCore® gives you access to a suite of identity proofing and fraud detection capabilities, including identity element verifications, risk analytics, device intelligence, document validation and biometrics. CrossCore Doc Capture offers end-to-end support for document and selfie verification, and you can use step-up OTP or KBV checks when appropriate. Learn more