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The summer months in Italy often provide us with a short time to take a break and recharge our batteries as we head into the second half of Experian’s financial year. Yet, there is still the opportunity to move important projects further forward. In July, Chief Operating Officer of Experian EMEA Marco Benvenuto announced we had agreed to partnerships with two non-profit organisations as part of our United for Financial Health programme. MircoLab and AMS both have goals that align with ours in working to reduce financial exclusion. Today, I can provide you with more details about our partnership and how we will help groups of people who find it hard to access fair and affordable credit because they lack relevant financial data. These credit “invisibles” can often come from vulnerable groups such as NEETs (Not in Employment, Education or Training), foreign caregivers and female victims of violence. The Covid-19 pandemic has been a challenge for us all, not least the people in these groups. Working with our partners, the IncludiMi initiative aims to create a new credit assessment based on data that can contribute to a more inclusive measure once analysed. We will also strengthen the skills of the people involved by offering financial education and mentoring them to become economically independent. At the heart of the new programme is the planned IncludiMi app, which will allow credit “invisibles”, including the unbanked, to have their financial health estimated by reviewing non-traditional data. People will use the app to create and understand their personal and family’s budgets while following tips and suggestions from the financial education sessions led by experts at our partners. We are excited about the potential this partnership – and the United for Financial Health programme overall – has to improve the lives of so many people by tackling financial exclusion. I look forward to providing you with further updates on our progress in the coming months.
When it comes to access to credit, we know that it’s not equal. There are barriers some consumers face, and that negatively affects how they can spend, save and borrow money. We have a responsibility to find and facilitate solutions. Financial inclusion is a core commitment for us. That’s why we are excited to launch a first-of-its-kind program called Inclusion Forward – Experian Empowering Opportunities™. This initiative harnesses Experian’s data, analytics and technology that can help clients create and provide more affordable credit access. Additionally, Inclusion Forward™ will provide ongoing resources to help consumers better understand their credit health, particularly in diverse communities. Inclusion Forward™ will focus on three key areas: homeownership, small business entrepreneurship and financial education. It can help companies achieve their diversity, equity and inclusion goals, but most importantly, it will help consumers achieve their life goals. Closing the wealth gap is key in racial equity efforts. By unlocking the power of Experian data, clients can better understand the financial challenges consumers from diverse backgrounds may face. This can lead to creating solutions and education for all consumers. We look forward to sharing more about Inclusion Forward™ and how this program is making a difference in underserved communities. To learn more about Experian’s commitment to diversity and inclusion, click here.
Experian works hard at having a workplace culture where everyone feels a sense of belonging. We’re constantly evolving and improving, and proud to share several recent acknowledgements that we’re on the right track. We have a robust multi-generational employee base, and know that the diversity of perspectives and experience spark innovations that lead to financial inclusion for all. Millennials make up the largest portion of our workforce and we’re thrilled to be named a Fortune Best Workplace for Millennials. Millennials want to work for organizations that offer fair pay and meaning, inclusive benefits beyond parenthood, gender equity, flexibility and safe spaces, according to Great Place to Work (GPTW). Employee comments to a GPTW survey indicate our team believes we are doing well: “One question you ask is do we hire people who fit in… No, we don't always – which is why we can innovate and create change – if everyone agrees on every approach, we wouldn't be nearly as successful as we are. That's one thing that makes it a great place to work – our diversity of thought and approach to problems.” Gender equity has been a focus of ours, from recruiting to talent development. Almost half of our new hires, current employees and promoted talent identify as women. Further demonstrating our commitment to diversity and inclusion, former Experian North American CEO Craig Boundy is ranked the #12 Best CEO for Women 2021 by Comparably. This ranking is based on 10 million ratings across 60,000 companies, Every CEO on the list is in the Top 5% of all CEOs rated by female employees. Experian also earned several other awards from Comparably: Best HR Teams of 2021 Best Company Outlook of 2021 Best Places to Work in Los Angeles 2021 Top 10 for Career Growth “I've worked for a ton of different technology companies and have never seen such a strong leadership team nor seen a company invest so much in their employee's future!” (quote from GPTW survey) “Opportunity to grow and move around various lines of business through your career within Experian – allows you to continue to challenge yourself and grow without leaving the organization.” (quote from GPTW survey) Comparably’s Annual Best Places to Work Awards rely solely on the input of employees, which makes these honors especially meaningful. We appreciate their feedback and their contributions every day. Check out our 2020 Power of YOU report to learn more about our coworkers, leadership and how we serve our communities.
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.