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For more than 40 years, Orange County has been the home of Experian’s North American headquarters. We have strong roots here. And as part of that, Experian and our employees work and volunteer with organizations around the community to help make the OC a better place to live. As a long-time Experian employee and Orange County resident, I am proud to represent a critically important organization to our community: the Orange County Business Council (OCBC). And as 2015 Chair of OCBC, I thought it was a good time to discuss not only the mission of OCBC, but more importantly, how it relates to what we do at Experian. OCBC’s mission is to advance business and enhance the quality of life for all Orange County residents. As an organization, Experian is committed to assisting businesses around the world understand and harness the power of data and insights to positively move the economy forward. In short, helping businesses grow. One of the goals of Experian’s Business Information Services unit, for which I lead marketing, is to provide information that help business owners manage their credit, enabling them to take action and obtain funding that will increase cash flow and uncover growth opportunities. The business unit works with organizations such as the Small Business Administration (SBA) and the National Federation of Independent Businesses (NFIB) to reach entrepreneurs and sole proprietorships to deliver tools and educational resources that help them better understand the credit landscape and position their business for future success. This is yet a small example of what Experian does and how it correlates to OCBC, and my mission in chairing this important organization. Ultimately, businesses, both large and small, are what drive our economy forward, and we believe the work OCBC does to help businesses is of the utmost importance. Whether in Orange County or around the world, advancing business and enhancing the quality of life for consumers are goals we can all get behind. As Walt Disney would say, “it is a small world after all.”
Just as looking in the rear view mirror can help you navigate your next move, looking into recent trends can serve as a guide to where the industry should head in the future. With that in mind, let’s take a step back and look at some of the trends in the automotive industry that finished off 2014. After all, it’s the insights from these trends that enable dealers, manufacturers, aftermarket retailers and lenders to take the right action to uncover growth opportunities and improve profitability. As we look at Experian Automotive’s 2014 Market Share and Registration Trends analysis, we see that the volume of new and used vehicle sales continued to increase year-over-year to reach 16.3 million and 39.3 million, respectively. However, despite the volume increases, the growth rate for both types of sales has slowed considerably. The growth rate of new vehicle sales slowed to 6.6 percent, while the growth rate for used vehicle sales actually decreased to 1.8 percent from 1.9 percent a year ago. Findings from the analysis also showed that entry-level cross-over utility vehicles and full-sized pickup trucks remained the top two new registered vehicle segments, while alternative-powered vehicles fell out of the top ten. Among new entrants into the top ten was the upscale-near luxury vehicle segment, which includes such cars as the BMW 3-Series, Mercedes-Benz C Class and the Lexus ES350 Other findings from the analysis include: The total number of vehicles on the road increased by 5 million from a year ago to reach 251.1 million More than 92 million vehicles on the road fell within the aftermarket “sweet spot,” model years 2003-2009. Analysis also shows the sweet spot shifting toward a higher share of import vehicles. Ford F150, Chevrolet Silverado/1500 and Honda Accord were the top three vehicle models of all vehicles on the road at the end of 2014 Ford (20.6 percent), International (16.9 percent) and Freightliner (15.8 percent) were top three manufacturers of medium- and heavy-duty vehicles in terms market share of all vehicles on the road General Motors had the highest market share of new vehicle sales in the South and Midwest, while Toyota led the way in the Northeast and West Fast forward three months into 2015, the automotive industry seems to be picking up right where it left off last year – clicking on all cylinders. It will be important to keep an eye on how these trends fluctuate through the rest of the year, as those insights can help the industry navigate and adapt to situations that may arise. Subscribe to this blog by email to learn more about our data and analytics.
In today’s world, it seems as though there is a statistic that we can apply to just about anything. Whether it’s viewership of the Super Bowl, popularity of breakfast cereal or the number of red M&Ms that come in a pack, I bet the data is out there. In fact, there is so much data in the world that Emery Simon of the Business Software Alliance once said that if data were placed on DVDs, it would create a stack tall enough to reach the moon. But let’s take a step back. If you break it down to its bare bones, all data is, is a bunch of numbers. Until you can understand what those numbers mean, data by itself isn’t that helpful. Delivering data insights in order for our clients to make better decisions is at the core of everything we do at Experian. We are continuously looking for ways to use our data for good. This is especially critical for the automotive industry, including dealerships, manufacturers, lenders and consumers alike. For example, with data and insights, manufacturers and dealerships can better understand what vehicles consumers are purchasing, as well as where certain vehicle segments are most popular. This information can help them decide which vehicles models are performing or where to move inventory. For automotive lenders, gaining insight into the shifts in consumer payment behavior, enables them to take the appropriate action when making decisions on loan terms and interest rates. By leveraging this information, lenders are able to minimize their own risk and improve profitability. On the consumer side, a vehicle is often the second largest purchase they will make. It’s important, especially when purchasing a used vehicle, to get as much information as possible to make the best decision. Vehicle history reports contain hundreds of data points from a variety of sources that provide insight into whether a vehicle has been in an accident, has frame damage, and odometer fraud, among other things. Consumers are able to take these insights to assist in the car buying process to ensure the vehicle is safe and meets their own standards. Leveraging the information available to make better decisions across the board will help the industry and consumers cruise down the highway of success. And that’s how we roll … 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.