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There are times in most of our lives where we can't get access to the financial system in a way that we want. Be it for a mortgage, a car, or a business loan. We've all experienced the frustration when you feel you're on the outside of the system and you can’t do the things you want for yourself or your family. At Experian, it's our job to change that. We want to make sure everybody is included and has access to fair and affordable financial products. Financial inclusion is fundamental to our business. With our focus on increasing access to financial services, improving financial literacy and confidence, and helping people manage their financial lives; we help power people and businesses to create their future. In fact, the United Nations includes access to financial services, such as credit and microfinance, among its Sustainable Development Goals. Access to affordable credit opens the door to opportunities for people to transform their lives – from homes and healthcare to education and entrepreneurship. This has never been more important than it is today. Creating a Campaign to Drive Financial Health Worldwide As the pandemic took hold in 2020, we stepped in with data and analytics to support governments, health services and national emergency response efforts through major initiatives such as COVID Radar in Brazil and Experian CORE (COVID Outlook & Response Evaluator). These are just two examples of how we can use our data and expertise to make the biggest difference to society. It soon became clear that the impact — not just on physical health, but on financial health — would be far-reaching for people around the world. We looked at how we could use our expertise and resources to help vulnerable communities through the crisis and focused on financial education as the best way to strengthen their resilience and support their road to recovery. We launched our United for Financial Health programme. We rapidly established 11 NGO partnerships across our biggest consumer markets to deliver targeted financial education for some of the communities hit hardest by COVID-19. By the end of the year, we had reached nearly 35 million people, more than double our original goal of 15 million, and we’re not stopping there. We aim to reach 100 million people by 2024. Part of our efforts include our member relationships around the world. This year, we surpassed the milestone of 100 million direct relationships with consumers globally and delivered further innovations to support people through our business, with the launch of products like Experian Boost in the UK and Serasa Score Turbo in Brazil. This, of course, is on top of our ground-breaking Experian Boost launch in the United States in 2019. Our goal is to have a direct relationship with as many people as possible; to truly become the Consumers’ Credit Bureau and power financial opportunities for all. Driving Innovation with Social Purpose Our culture of innovation helps us harness opportunities to drive business growth. We are continually investing in product innovation and new sources of data to address emerging market opportunities that can make a real difference to global communities. In 2020, around 1,000 “innovators” from across Experian joined our annual Future of Information Conference, which was held virtually because of the pandemic, to encourage them to think differently in their work. Topics included fairness in artificial intelligence, transforming agribusiness and enhancing the consumer healthcare experience. Teams at our DataLabs in Brazil, Singapore, the UK and the USA tap into our culture of innovation to continually create new solutions to global challenges. The result of all this is that our Social Innovation products have now reached 61 million people since 2013. We aim to reach 100 million by 2025. As John Hope Bryant, CEO of one of our NGO partners Operation HOPE, says, “Experian’s commitment to unlocking the power of data to create opportunity means more people will be set up not just to survive, but to thrive in the months and years to come.” In this year’s Sustainable Business Report our commitments come through stronger than ever. We are raising our ambition and aiming to reach 100 million people through our social innovation products by 2025. Our goal is to reach 100 million people through our United for Financial Health campaign by 2024. We have also pledged to protect our planet by becoming carbon neutral in our own operations by 2030. We know we’ve got more work to do and we remain focused on using our business to make real and sustainable change. With social innovation running so deeply through the core of our culture, and our commitment to improving global financial health front and centre of our thinking, we will continue to push to find new solutions to help people, serve communities and protect the environment, helping to create a better future for all. All of this is very personal to me. I passionately believe we can and should drive to make a difference in society. I serve as executive sponsor of our ESG programs and this isn’t just another corporate program, it’s at the heart of what we do as a company to power financial opportunities. My personal pledge is to continue to keep you updated, as we progress our agenda to sustainable environmental and societal change. Read the full SBR report here.
Last week, I had the chance to take part in a few really important conversations and further exemplify our leadership and commitment to driving financial inclusion. On July 13, I had a frank dialogue with Derrick Johnson, President of the NAACP, during their 112th NAACP Virtual Annual Convention. Our conversation centered around economic inclusion, the wealth gap and the ways companies, like ours, can help provide education and access to financial services. During my conversation with Derrick, he referred to credit as a currency. I think that’s absolutely the right way to talk about it. Credit gives people access to financial services. It can divide people or bring them together to achieve their goals. We recognize there are millions of consumers who lack access to credit today. That’s why we continue to innovate through tools like Experian Boost, our free tool that enables consumers to contribute positive payment data to their Experian credit report. Especially in underserved communities, consumers may not get credit for paying their utility bills, cell phone bills, or even their streaming services, and they should. This provides a more accurate picture of their financial situation. I also participated in a virtual press conference with the U.S. Office of the Comptroller of the Currency and leaders from PNC, HomeFree-USA and Fifth Third Bank to discuss our participation in Project REACh, which stands for Roundtable for Economic Access and Change. It brings together leaders from the banking industry, national civil rights organizations, business and technology to reduce barriers that prevent full, equal and fair participation in the nation’s economy. We were approached to participate because of our deep understanding of credit risk and our ability to help financial institutions make informed credit decisions through data and advanced analytics. Our role is to help develop programs with the Alternative Credit Scoring Utility Team and Small Business Opportunity Team that drive financial inclusion. Our participation in Project REACh is the latest example in a string of efforts to address this important issue, including Experian Boost and our flagship lender score Experian Lift, which leverages all Experian assets to improve consumer’s access to credit. We believe that every individual deserves the opportunity to reach their fullest financial potential through fair and affordable access to credit. By sharing information around tools like Experian Boost, expanding credit education through partnerships like the NAACP, and working with leaders in the industry through Project REACh, we can help increase financial access and empower consumers to enter into the credit ecosystem – some for the first time. We’re committed to working side-by-side with regulators, businesses and consumers to eliminate credit invisibility and improve financial equity and access.
At Experian, we create a better tomorrow by powering opportunities for consumers, customers, our people and communities. We use the full range of our capabilities to drive financial education and inclusion, and one of the ways we do this is through our United for Financial Health programme. I am delighted to announce the launch of this important programme in two of EMEA’s markets today. We’re excited for the positive difference our two new partnerships will make to help vulnerable consumers financially recover from the impacts of Covid-19. In Italy, incidents of domestic violence have increased considerably during the global pandemic, with the Italian National Institute of Statistics reporting a 75% increase in calls to anti-violence helplines in 2020 alone. Further statistics show women are particularly affected by unemployment due to Covid-19, reducing victims’ financial independence and their ability to escape from situations of abuse. The increase in domestic violence since the onset of the pandemic has also been highlighted globally by the UN. To help those impacted, we intend to partner with MicroLab and Microfinanza, who support women victims of domestic violence, foreign caregivers, and young people not in employment, education or training (NEETs). Our partnership aims to help these people access credit, so they have the financial means to improve their current situation, and take steps toward creating a better tomorrow. We will collaborate to deliver financial education, and we intend to develop an app that captures open (non-traditional) financial data to help them build their credit profiles. In South Africa, unemployment stands at 32.6%. A large proportion of people in the country run or work for small to medium-size enterprises (SMEs). By helping these organisations access affordable credit so they can continue to operate through the pandemic, we believe we can have a tangible impact on people’s employment. We will partner with the National Small Business Chamber, a non-profit membership organisation that supports SMEs. Together, we will educate small business owners on their financial and credit health, empowering them to improve their personal and business credit profiles to access the funding required to maintain and grow their businesses. Combined, we estimate our partnership with our NGO partners will reach 3.8 million consumers, helping deliver on our Company’s commitment to reach 100 million people by 2024. We start work on these projects today on our path to creating a better tomorrow.
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.