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Experian is all about turning insights into action… using data for good. Our commitment is to work with our clients, consumers, non-profits and other parties to help ensure that we, as a company and within society, continue to properly leverage big data for good. As part of that effort, every other week we bring you Experian Insights – a round-up of news and resources highlighting how data is used for positive business, consumer and societal actions in many ways and across multiple sectors. Experian Insights in the News Marketing: A Primary Breeding Ground for Big Data Innovation – AdExchanger Companies that use data to put the consumer at the center of their innovations win in the digital economy. [ReTweet] Small Business Momentum Bodes Well – BankingExchange.com Gaining insights into small business data can help banks take the right action when extending credit. [ReTweet] Why Privacy Matters in a Data-Driven Economy – Experian Blog @ExperianMKt releases white paper on why privacy matters in a data-driven economy. [ReTweet] If Only You Could Improve Your Credit Just by Paying Rent & Utilities – Realtor.com 97% of study participants had a credit score increase or neutral impact after adding utility data to credit report. [ReTweet] Data-Driven Companies Need a Foundation in Data Quality – Experian Blog 95% of global companies feel the drive to turn data into insight, but lack quality data. [ReTweet] Subscribe to this blog by email to learn more about our data and analytics.
With an ongoing shift towards a data-driven economy, many questions arise. For example, why does privacy matter and what is the role of consumer privacy in this economy? While it may be too early to answer all of these important questions, Experian Marketing Services' new white paper, Why privacy matters in a data-driven economy, hopes to start the conversation. The latest report assesses the rise of the data-driven economy within the media and advertising industry and the evolution of privacy in that economy. The white paper recognizes how ubiquitous consumer data is bringing programmatic media, interactive marketing and digital technology companies closer together by forming a new hybrid industry with a shared goal — to enhance the digital experience for the consumer and collectively ensure that data is being used for good, positive and productive purposes. “Society, businesses and consumers are better off when we can make sense of the world around us — a world made more complex by the vast amount of available information,” said Matt Seeley, President, North America, Experian Marketing Services. “Data on its own can’t transform the ways in which we manage our health, discover new information or connect to each other. These changes require technology that can put this data into context, generate insights and apply those insights responsibly and effectively. The digital marketing community plays an essential leadership role in that process and, as such, is helping to empower people, governments and brands to make more informed decisions about how they can use data for good.” The data-driven economy will continue to grow and thrive so long as there is a collective effort between data companies and digital marketers to create and protect the conditions that allow it to remain open, healthy and responsive to the privacy concerns of consumers. To learn more about the data driven economy and its impact on the tech world, download the new whitepaper, here.
Data is one of the most valuable assets in our society and drives many decisions. For businesses, data can reveal insights about customers and prospects, product trends, areas for investment and efficiency improvements. For consumers, data provides more personalized interactions with brands, including targeted deals or coupons, and geo-location services. Because of these benefits, business leaders are increasingly reliant on first and third party information when it comes to decision making and operational execution. According to a recent Experian Data Quality study, 95 percent of global companies feel the drive to turn data into insight. The four main reasons behind this include the desire to: understand customer needs, find new customers, increase the value of each customer, and secure future budgets. However, many businesses are falling short. They aren’t able to get the insight needed from data assets. While there are many challenges around data, like rapidly-changing technology, skills shortages in data management and shifting regulations, business leaders can control data quality strategy. Many are not able to gain insight because the quality of their data is not up to par. Ninety-two percent of organizations suspect their customer and prospect data might be inaccurate in some way and on average, businesses believe 26 percent of their data is inaccurate. That figure has risen significantly over the past several years. While there are many possible reasons for this increase, one major contributing factor is that data management strategies have not kept pace with the changing needs of business intelligence and analytics. Many organizations still manage data using legacy technology and processes. This creates reactive strategies that stop data issues from being discovered before they cause harm and prevent a single customer view. To move into a modernized and proactive strategy, businesses need to adjust their data management strategy from a departmentalized approach to a central data owner. We see many companies finding success by doing so. In fact, more companies who have enjoyed significant profits in the last 12 months manage their data quality strategy centrally, with ownership resting with a single director. We also see companies who have more sophisticated data management approaches dealing with less inaccurate data and fewer negative consequences. Most commonly, that director tends to be the CDO or CIO. There is certainly a case for adding a CDO to the organization, especially considering the value of data and the benefit of having someone to take responsibility for the quality, standards, meaning, security, metrics, integration or coordination of data among the various divisions. The rise of the CDO is something we are watching very closely at Experian and we expect this role to grow rapidly in prominence over the next few years. Building a foundation in data quality by centralizing data management people, technology and processes under one group is a key step in creating actionable insight from the valuable asset of data. To stay competitive, businesses have to operate in intelligent ways by developing strong consumer understanding. That starts with quality data. We at Experian enable business users to obtain quality, actionable data when it is required. This doesn’t mean implementing massive technology solutions that take months or years to see benefit from. We focus on solving specific problems with targeted technology solutions, helping you focus on counting the data that really matters to your business. To become data-driven, start by thinking about where you’re currently getting your data insights. Do you trust your information? Does it produce reliable information and insight? By starting with a strong data management strategy, organizations can build trust in their data and see the true benefit of data having a positive influence on their business. Subscribe to this blog by email to learn more about our data and analytics.
Today, we stand at the forefront of a digital revolution that is reshaping the financial services industry. And, against this backdrop, financial institutions are at vastly different levels of maturity; the world’s biggest banks are managing large-scale infrastructure migrations and making significant investments in AI while regional banks and credit unions are putting plans in place for modernization strategies, and fintechs are purpose-built and cloud native. To explore this more, I recently had the privilege of attending the annual Reuters NEXT live event in New York City. The event gathers globally recognized leaders across business, finance, technology, and government to tackle some of today’s most pressing issues. On the World Stage, I joined Del Irani, a talented anchor and broadcast journalist, to discuss the future of lending and the pivotal role of data and AI in building a more inclusive financial system. Improving financial access Our discussion highlighted the lack of access to traditional financial systems, and the impact it has on nearly 100 million people in North America alone. Globally, the problem affects over one billion people. These people, who are credit invisible, unscoreable, or have subprime credit scores, are unable to secure everyday financial products that many of us take for granted. What many don’t realize is, this is not a fringe subset of the population. Most of us, myself included, know someone who has faced the challenges of financial exclusion. Everyday Americans, including young people who are just starting out, new immigrants and people from diverse communities, often lack access to mainstream financial products. We discussed how traditional lending has a limited view of a consumer. Like looking through a keyhole, the lender’s understanding of the person in view is often incomplete and obstructed. However, with expanded data, technology, and advanced analytics, there is an opportunity to better understand the whole person, and as a result have a more inclusive financial system. At Experian, we have a unique ability to connect the power of traditional credit with alternative data, bringing a more holistic understanding of consumers and their behaviors. We are dedicated to leveraging our rich history in data and our expertise in technology to create the future of credit and ultimately bring financial power to everyone. The future of lending After spending two days with over 700 industry leaders from around the world, one thing is abundantly clear: much like the early days of the internet, today, we are at the cutting-edge of a technical revolution. Reflecting on my time at Reuters NEXT, I am particularly excited by the collective commitment to drive innovative, and smarter ways of working. We are only beginning to scratch the surface of how data and technology can transform financial services, and Experian is positioned to play a significant role. As we look to the future, I am excited about the ways we will create new opportunities for businesses and consumers alike.
We believe that financial literacy leads to empowerment. That is why Experian supports initiatives and partners with community organizations to deliver financial education. We also develop products and services that give more control to consumers over their credit profile and financial health. As part of advancing our mission of Financial Power to All®, we are proud to announce we are helping more than 5,000 Hispanic individuals nationwide by relieving $10 million dollars of consumer debt. To provide families with this boost, we joined forces with ForgiveCo, a Public Benefit Corporation (PBC), to administer the acquisition and cancellation of qualifying consumer debt for the selected recipients. Beneficiaries will also receive a one-year premium Experian membership for free that offers access to their Experian credit report in English and Spanish[i], FICO® Score[ii], bilingual educational content, and other financial resources. We hope this effort helps raise awareness of the importance of financial literacy for everyone, and that Experian has resources to help individuals reach their financial dreams. To amplify the message, we collaborated with multi-platinum, award-winning singer and songwriter Prince Royce and you can see his video here. In fact, we have been making a concerted effort the last several years to evolve our educational resources and products to better support all underserved communities. Some of our other activities include the creation of the B.A.L.L. for Life initiative that connects African American and Hispanic youth with financial education, supporting scholarships for Asian Americans through the Ascend organization, providing custom resources for Out & Equal and Born This Way Foundation for the LGBTQ+ community, supporting the NextGen Innovation Lab for Disability:IN, and sponsoring credit counseling for the military community with Operation HOPE. For resources in Spanish, Experian offers a credit e-book and consumers can access a full suite of articles at the Ask Experian blog here. [i] Only Experian credit reports are available in Spanish. All other services associated with an Experian membership are available in English only. English fluency is required for full access to Experian’s products. [ii] Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.
Amid some of the financial challenges that underserved communities experience, members across the financial services community remain committed to championing initiatives and programs that drive greater financial inclusion. In fact, collaboration has led to the inclusion of non-debt related payment information on consumers’ credit profiles, as well as digital services that make it easier to manage money. These efforts have helped to broaden access to fair and affordable financial resources for more individuals. While significant progress has been made, there is still more work to do. However, some of the misconceptions and myths about the financial services community are hindering further advancement. Debunking these myths will accelerate progress by building trust between the financial services community and consumers. Person withdrawing money from ATM contactless Myth #1: “Financial institutions have no interest in underserved consumers or credit invisibles.” The truth is, banks and credit unions want to say “yes” to more prospective borrowers, including individuals and families from underserved communities. Beyond being the right thing to do, it’s an opportunity to potentially build lifelong relationships with a relatively untapped market. A show of good faith to communities who have largely been ignored by the financial system could lead to customer loyalty that may extend to their family and friends. That’s why participants across the financial ecosystem have been proponents of including expanded data sources—such as on-time telecom, utility and video streaming service payments—on to consumer credit reports, as well as exploring other Fair Credit Reporting Act (FCRA)-regulated data sources, including payment data on short-term small dollar loans and expanded public records data. Making this data more accessible to lenders provides a more comprehensive view of a consumer’s ability and willingness to repay outstanding debt—an actionable solution to extending credit to consumers without lenders taking on additional risk. Myth #2: “There is a lack of trustworthy financial education resources.” The financial services community and affiliated organizations recognize that empowering people with financial knowledge and skillset are critical to consumers’ financial success. In fact, banks and credit unions are partnering with nonprofits and non-governmental organizations to better understand the unique challenges and opportunities within specific communities and provide relevant tools and resources. For example, Experian’s B.A.L.L. for Life (Be A Legacy Leader) program, launched in partnership with the National Urban League, serves as a catalyst for engaging with Black communities and low-income youth through live events and digital financial education. Subject matter experts, professional athletes, celebrities, and other influencers share their experiences and expertise, covering topics such as banking, credit, financial management and investing. In addition, to help people improve their financial management, Experian partners with the National Foundation for Credit Counseling (NFCC). The NFCC connects consumers with certified financial counselors to help them address various pain points, including debt management, homeownership, student loans or small business cash flow issues. Myth #3: “Underserved communities have few opportunities to build credit and enter the mainstream financial system.” People from underserved communities, as well as younger consumers and recent immigrants are often excluded from the mainstream financial system because they lack an extensive credit history. Historically, it’s created a vicious cycle; in order to get credit, you have to have credit. Fortunately, there has been a sea change in innovative solutions to address the specific needs of these populations. These include new credit scoring models and microfinancing which provide financial services to individuals who may have been excluded from traditional banking systems. In addition, by incorporating expanded data sources, such as telecom, utility and residential rental payments onto credit reports, lenders have more visibility into consumers who may have been excluded by traditional credit scoring methods.These programs help individuals and families from underserved communities establish and build a credit history that could enable loans, or the ability to rent an apartment or open their dream business. An example is Experian Boost®, a free feature that allows Experian members to contribute their history of making utility, cellphone, insurance, residential rent and video streaming service payments directly into their Experian credit profile. By incorporating nontraditional credit data like paying utility bills on time, online banking transactions, rental payments and verified income data, more people can establish a credit profile that can potentially qualify them for a loan. More Inclusion, Fewer Myths It’s encouraging that community organizations and banks are beginning to see the economic and social benefits of aligning on financial literacy and inclusion. As more initiatives come online, underserved populations will be able to establish a better financial foundation. Then, we can declare the myths to be history.