Margin test

If you were to survey American consumers whether or not they would like to be their own boss and successfully run their own business, I would imagine that a good majority would probably say yes. There is something empowering about the thought of setting your own hours and controlling your own destiny, but many people don’t actually take the steps to make that dream a reality. However, during the height of the recession and shortly thereafter, many consumers were forced to take the plunge and start their own business as a way to generate a source of income. As a result, entrepreneurism skyrocketed. While some struggled, others succeeded. But how have entrepreneurs fared in the post-recessionary period? As a way to better understand the start-up environment post-recession, Experian conducted an analysis on small business start-up trends from 2010-2014. Interestingly, the number of startups has decreased nearly 45 percent since 2010 – most likely due to a slowdown following the influx of businesses started during the recession. That said, the trend has become somewhat stable over the past few years. While the drop in the number of start-ups may appear discouraging, it isn’t necessarily a cause for concern. As we see employment rates trek higher, and the Gross Domestic Product climb, we’ve been able to experience an improved economy. This also means that fewer consumers feel the need to startup new businesses out of necessity. Furthermore, we’ve also seen that the start-ups that opened in 2010 have grown in size by nearly 29 percent, or added 1.2 employees in the four years that the analysis tracked. Additionally the data showed that of the businesses started in 2010, approximately 57 percent of them are still in business. The analysis also found that entrepreneurs tend to favor the restaurant industry when starting a new venture, as 10.6 percent of start-ups were in the food and drink business. Restaurants were followed by personal services, miscellaneous retail, business services and general contractors. Interestingly, the restaurant and personal services industries were also the two with the highest rates of failure at 9.2 percent and 8.1 percent, respectively. Gaining insight into the data and trends of small business start-ups can be extremely beneficial to new entrepreneurs and lenders, alike. On one hand, entrepreneurs can use the data to understand what types of businesses are the most popular, and which are most prone to failure. On the other, lenders can use the data to determine which start-ups present the least amount of risk and when it is most beneficial to market to prospective borrowers. Small businesses are the life blood of the economy, and their continued success is paramount to a well-functioning financial system. With the power of data and insights at their side, lenders can make better decisions when looking to fund new ventures and entrepreneurs become more empowered to take that leap and turn their dreams a reality. Overall, a winning recipe that any restaurant owner can get behind.

Today, Experian’s global Fraud and Identity business released its analysis of client transaction data from the 2014 holiday season, showing an 80 percent reduction in the number of manual reviews among online merchants using the company’s fraud and identity products and services compared with the industry average. These results and other observations indicate that a customer-centric approach to fraud prevention would be more effective for many online merchants, leading the company to recommend five best practices for online merchants preparing for the 2015 holiday season. [View our Customer Centric Fraud Prevention Strategy infographic] Experian’s holiday fraud data highlighted the performance delta between the company’s technology and alternative approaches. Many merchants, for example, will loosen their fraud rules to process more orders during peak periods. To compensate for the increased risk of fraud caused by this approach, more manual reviews were conducted. This is a counterproductive approach that drives up operating costs and increases customer friction. Despite the increase in manual reviews, undetected fraud can occur and good revenue can be left on the table. “Good fraud detection should be about more than preventing loss. It should increase revenue by allowing more good customers through and providing a hassle-free shopping experience, especially during the critical holiday shopping season,” said Steve Platt, Global EVP, Fraud and Identity, Experian. “To help our clients with this, we combine insights derived from device intelligence and digital behavior, with the contextual data about the event itself (e.g., transaction, application, login, etc.). We analyze millions of transactions per day, evaluate risk in real time and deliver responses in mere milliseconds. With this approach, our clients are catching more fraud and reducing customer friction, leading to fewer manual reviews and lower operational costs. It’s a win-win-win.” For one U.S. multichannel retail client, this “win” translated into a 95 percent detection rate (amount of fraud caught) valued at $17.3 million during the fourth quarter alone. This is just one example of how applying the following recommended best practices can help clients reduce fraud and drive top-line growth. Best fraud-prevention practices for the holidays With the 2015 holiday shopping season less than five months away, now is the time for merchants to prepare to effectively protect themselves and their customers during the busiest time of the year. Experian® shares five fraud-prevention best practices for a stronger 2015 holiday sales cycle: Avoid one-size-fits-all approaches — Many online merchants make a general temporary adjustment to loosen fraud-prevention rules, supplementing with additional manual reviews to accommodate the increased holiday volume. Not only does this increase operational costs for the business, but it also translates to an insult rate (falsely identifying good customers) of 29 percent to address a 0.9 percent problem. This is a significant imbalance. By leveraging the right fraud-prevention measures at the right time, you’ll see increased and sustainable top-line growth. Make your customer data work for you across the business — While many risk teams already use internal customer data to improve fraud detection, the explosion of channels and devices means there are other data sets across the enterprise that can be leveraged effectively to maintain visibility and authenticate identities across the digital ecosystem. Further, by establishing and maintaining a single, persistent customer view, companies benefit from additional, actionable insights throughout the customer journey. According to Experian Marketing Services’ 2015 Digital Marketer Report, 89 percent of marketers globally say that they have trouble achieving a single customer view. By using technology to link data sets and identities together — like customer loyalty data with customer transactional data, social and digital behavior, demographics and more — merchants are getting a clearer picture of who their customers are. In addition, they have a better understanding of how those customers engage across channels. It is also critical to understand that the amount of data alone is not the answer; the insights and intelligence gleaned from or applied to that data must be considered as well. Bring fraud and marketing efforts together — Although this is not an obvious combination at first glance, this relationship can be one of the most powerful in the enterprise. Just last year, a survey by Experian Marketing Services reported that 80 percent of marketers planned to run cross-channel marketing campaigns in 2014. More channels, more campaigns and increased volume mean new challenges for fraud-risk managers. Together, fraud and marketing teams can help the top line and the bottom line by preventing bad transactions without impacting the customer experience. The past often can tell a lot about the future. These groups should jointly review past holiday performance in terms of both top-line growth (i.e., successful campaigns) and successful risk strategies that complement those growth objectives and use the insight to form future strategies. Establish a dedicated team responsible for the customer experience — Several of our financial services clients are reporting notable success with digital groups. These teams are responsible for bringing together marketing, risk and consumer experience experts to create and maintain a directional and strategic customer purview across channels. Formalizing the sharing of data, processes and best practices among these traditionally siloed departments is a way to process more customers while reviewing fewer transactions, catching more fraud and providing a hassle-free customer experience. Stay ahead of evolving market conditions — There are some things that are out of retailers’ control, such as the impending October 2015 EMV rollout in the United States. While most point-of-sale transactions will be vastly safer and more secure as a result of the rollout, we have seen card-not-present fraud rise in Europe, where EMV already is in place. This is because criminals will focus their energies on the fraud they can still perpetrate. We also have the proliferation of personalized mobile transactions. While this technology aids in ensuring a seamless customer experience, personal and/or financial information now is being exchanged at an increasing rate and exposing businesses to new fraud risks. Being aware and having a plan to react quickly to the ever-changing fraud landscape can significantly increase the chances of thwarting criminals and keeping businesses safe. Listen to a recording of our 2015 Holiday Fraud webinar to learn how your business can prepare its fraud strategy for this season.

Some of my fondest memories on road trips as a child were the games we were able to play. I’m sure many kids played “I Spy” and did “Sing-a-longs,” but my go-to game was “Slug Bug” (It’s a game where you get points for spotting a Volkswagen Beetle). While it’s been quite some time since I’ve played the game, I still find myself very aware of the different types of vehicles around me. As a matter of fact, if I were to play the game today, I’d probably rack up a number of points for the amount of cross-over utility vehicles (CUVs) I’ve seen on the road lately. There are quite a few. After reviewing Experian Automotive’s most recent Market Trends and Registration analysis, it all made sense. During the first quarter of 2015, the entry-level CUV was the top new registered vehicle segment, up 6.3 percent from a year ago. It also marked the fifth consecutive quarter that the entry-level CUV was the top selling new vehicle segment. It was followed by the small economy car and full-sized pickup truck. The analysis also found that it wasn’t just the CUV that saw an uptick in new registrations. In fact, seven of the top 10 new registered vehicle segments saw increases in sales from a year ago, and 16.6 million new vehicles overall found their way onto U.S. roads in the first quarter of 2015. The spike in new registrations combined with fewer vehicles going out of operation drove the number of vehicles on the road to nearly 253 million, its highest level since the second quarter of 2008. As CUVs continue to stand on top of the mountain of new vehicle sales, and small economy cars sprint pass the full-sized pickup truck, you might think similar patterns have emerged in the overall number of vehicles on the road. But it’s not necessarily the case. Despite falling to the third most purchased new vehicle segment, full-sized pickup trucks remain the most popular vehicle on the road, making up roughly 15 percent of the market. That said, entry-level CUVs have seen the most dramatic increase, rising 12.2 percent from a year ago. Trends in the automotive market can sometimes appear to be cyclical, which is why it’s important for the industry to pay close attention to the data sets available to them. By leveraging the data, dealers, retailers and manufacturers can benefit from the insights to make better business decisions, whether it’s relocating inventory or adapting to consumer demand. Similarly, identifying what vehicles consumers are driving, can do more than help you win in “Slug Bug,” it can help you win in the market.

Health information security breaches and identity theft have become an epidemic with losses occurring across the country. In fact, according to a recent Ponemon Institute study sponsored by the Medical Identity Fraud Alliance, medical ID theft has increased by 21.7 percent since 2013. Additionally, data from the Department of Health and Human Services indicates that health data on more than 120 million people has been compromised in more than 1,100 separate breaches since 2009. In May 2015, CareFirst BlueCross BlueShield, the largest health insurer in the Mid-Atlantic region, reported a cyber-attack that affected 1.1 million past and present customers. This comes on the heels of the February 2015 data breach at Anthem, the second-largest health insurer in the United States that affected about 80 million customers, and Premera Blue Cross’ reported cyber-attack that may impact as many as 11 million people. These attacks reflect an unsettling pattern in cybercrime as identity thieves expand their target from the financial sector into healthcare.The mere fact that health records are now digital makes them a prime target. Providers have now moved rapidly into the digital space and many don’t deploy the same robust security measures taken by their banking counterparts. Furthermore, patients now have unprecedented access to their health information thanks to the widespread use of patient portals. With providers, payers, pharmacies, labs and patients all having access to sensitive records, information security becomes vulnerable to the weakest link in the data chain. To compound the issue, stolen medical identity information is extremely valuable. While a purloined credit card number might fetch $10 on the black market, a stolen medical identity can bring in more than five times that amount. So, what’s the solution? Other major industries including financial services, telecommunications and insurance have been using Big Data and analytics for years to protect their online portals, minimize risk and reduce fraud losses. When applied in a healthcare setting, it is these same techniques that will enable professionals to gain insights that can be turned into actions to protect patient data. For example, identity-matching tools can confirm whether a patient or a physician is who they claim to be, and analyzing data and usage characteristics can more effectively assess the risk of a patient’s remote interaction. In essence, by utilizing these techniques, data can be a force for good – good for the patient, good for the healthcare provider and good for the industry.

With rising insurance costs, deductibles and copays, some people struggle to afford the out-of-pocket expense that can come with seeking medical treatment. Because of this, some consumers decide not to seek treatment, which could have negative effects on their health and overall well-being. While it’s true healthcare organizations do provide financial assistance and often have charity programs to help offset the costs, most do not have the financial resources to absorb a substantial increase in patient debt that is being driven by consumers selecting high deductible health insurance plans then not being able to pay. The additional challenge is that many hospitals and healthcare providers do not have the means to quickly and accurately determine which patients qualify for charity programs, which are able to pay for care, and which patients need payment plans to help them soften the blow from an unforeseen healthcare event. To help address the problem, Experian provides hospitals, medical offices and clinics with unique data and analytics to provide insight into each patient’s financial situation. By leveraging healthcare-specific predictive models, Experian enables healthcare organizations to easily and efficiently determine which patients qualify for financial assistance programs. In short, Experian is using its data for good by helping make patients aware that they qualify for federal benefits or financial assistance, and effectively pairing them with the right program. From a provider standpoint, the data and insight that we provide not only enables them to determine which patients meet the requirements for Medicaid and other grant or charity programs, but also allows them to do so during the registration process, saving them time and effort on the back-end. Gaining insight into a patient’s financial situation also enables healthcare organizations to minimize or avoid potential bad debt, and improve reimbursement rates by connecting patients with financial programs or setting up a payment plan that fits within their current budget. The bottom line is, in order for healthcare organizations to continue to exist and assist patients in need, it’s important for them to remain financially secure. When healthcare organizations are better able to identify the difference between the patients who can pay versus those that are truly in need of and qualify for financial assistance, everybody wins. The patient doesn’t have to worry about a financial burden that they can’t afford and the healthcare organization can operate without the threat of closure. In order to protect their financial well-being, it’s important for healthcare organizations to identify those patients who qualify for financial assistance and those who can afford treatment. Dan Johnson, Experian’s Executive Vice President of Healthcare Strategy, discusses how big data can help answer that question.