Greater transparency in buy now, pay later activity is key to helping consumers build their credit histories and supporting responsible lending.
Experian North AmericaScott Brown, Group President, Financial Services
Affirm plans to report all pay-over-time loan products issued from April 1, 2025, and beyond, including Pay-in-4. The move will help drive greater transparency into the buy now, pay later market while helping consumers build their credit histories over time.
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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.
The advertising ecosystem has seen significant transformation over the past few years, with increased privacy regulation, changes in available signals, and the rise of channels like connected TV and retail media. These changes are impacting the way that consumers interact with brands and how brands understand and continue to deliver relevant messages to consumers with precision. Experian has been helping marketers navigate these changes, and as a result, our marketing data and identity solutions underpin much of today’s advertising industry. We’re committed to empowering marketers and agencies to understand and reach their target audiences, across all channels. Today, we are excited to announce our acquisition of Audigent—a leading data and activation platform in the advertising industry. With Audigent’s combination of first-party publisher data, inventory and deep supply-side distribution relationships, publishers, big and small, can empower marketers to better understand their customers, expand the reach of their target audiences and activate those audiences across the most impactful inventory. I am excited to bring together Audigent’s supply-side network as a natural extension to our existing demand-side capabilities. Audigent’s ability to combine inventory with targeted audiences using first-party, third-party and contextual signals provides the best of all worlds, allowing marketers to deliver campaigns centered on consumer choices, preferences, and behaviors. The addition of Audigent further strengthens our strategy to be the premier independent provider of marketing data and identity, ultimately creating more relevant experiences for consumers. To learn more about Experian and Audigent, visit https://www.experian.com/marketing/ and https://audigent.com/.
You’re sitting at home thinking about opening up a new business…maybe you’re just planning on relocating an existing office…or maybe you’re looking to do business with a new vendor. Whatever the situation may be, you have to ask the question, which cities are primed for new business opportunity? Where are businesses performing at a high level? Are businesses in City A paying their bills faster than City B? To help answer those questions and more, Experian released its new quarterly Metro Business Pulse analysis on the top metropolitan areas based on business credit data. The analysis focuses on the top 25th percentile of metropolitan areas based on the number of businesses in major industry groups, and looks at four leading indicators of business health including risk score, days beyond term (DBT), delinquency and bankruptcy. • Risk Score — We used our proprietary commercial risk score, which is based on a scale of 1 to 100 (with 100 being least risky) and predicts the likelihood of severe delinquency (more than 91 days past due) within the next 12 months • Days Beyond Terms — The weighted average number of days that businesses paid their bills beyond the contracted terms. • Delinquency — The average percentage of dollars that are considered delinquent or past due. • Bankruptcy — The average rate of businesses filing for legal protection under Chapters 7, 11, 13 or 15 of the bankruptcy code. According to the Q1 2013 analysis, Omaha, NE tops the list of DBT, paying their bills the fastest, with businesses in that area paying an average of 4.75 days beyond contracted terms, followed by San Francisco, Rochester, NY, Salt Lake City and Milwaukee to round out the top five. On the flip side, Florida metro areas are taking considerably longer to pay, having made up four of the bottom five in this category with Miami businesses being the slowest to pay. However, all is not bleak in Miami, as businesses in that area had the fifth lowest bankruptcy rate at 0.43 percent. Businesses in New York City topped the list with the lowest bankruptcy rate in Q1, followed by Nassau-Suffolk, NY, Baton Rouge, LA and Honolulu to make up the remaining top five. To view the full analysis, check out our Metro Business Pulse website. For more information on this report and other business-related insights, visit Experian.com/b2b.
The past several years have been somewhat of an uphill climb for our country’s economy and this has impacted the default rates for consumer credit. However, now that we’re out of the recession, consumers are managing their credit back to pre-recession levels. In June 2013, the S&P/Experian Consumer Credit Default Indices, a monthly comprehensive measure of changes in consumer credit defaults, showed that default rates have fallen at a national level, as well as, in all four major buckets it tracks including, bankcard, auto, first mortgage and second mortgage. Additionally, the national composite and first mortgage defaults rates hit new post-recession lows at 1.34 percent and 1.23 percent, respectively. Also, two of the five cities the indices focus on, New York and Miami, both saw decreases in default rates during the month. The other three cities, Chicago, Dallas and Los Angeles all saw marginal increases in June. However, all five cities remain below their levels a year ago. To view the full press release, visit http://bit.ly/14WuRzx.
A recent study conducted by the Governing Institute and commissioned by Experian confirms that government benefit agencies can greatly improve their eligibility verification processes through automated data analytics. Historically, assorted health and human service programs have been compartmentalized, with each benefit agency having its own data collection system, eligibility requirements and program rules. The technology to streamline processing by allowing one agency to match its data against other content repositories, though available, has not been in place. The result has been frequent re-entry of information causing processing delays, slowing response time and increasing manual labor costs. These shortcomings have limited agencies’ ability to detect and combat fraud. The Governing Institute survey of 150 state and local government leaders shows several areas of concern for benefit agencies. Notably, those surveyed cited a need to validate applicant information and the desire for reliable fraud detection and prevention tools. Nearly 70 percent of respondents cited the need for improved accuracy of their eligibility decision-making, and almost 60 percent of respondents believed that false income reporting was seen as the greatest cause of fraud. The study also found that while only 70 percent of benefit agencies report currently verifying information, even fewer re-verify an applicant once they are in the system. Yet, 88 percent of respondents described eligibility verification as either “very important” or “one of the most important” issues they face. And more than half the government officials responding (53 percent) believe that the issue of eligibility fraud will increase in importance to their agency over the next two years. The Governing Institute survey highlights the fact that benefit-eligibility verification is still in its early adoption stage. “A number of technology controls can help improve the fraud situation,” the analysts found. “These include fraud detection and monitoring.” However, a mere 26 percent of respondents are currently taking advantage of these types of systems. The research points out the many obstacles agencies face when attempting to combat abuse. In addition to insufficient resources (budget and personnel), respondents cited difficulty integrating data from multiple sources and inadequate fraud-detection tools as the greatest hurdles to preventing eligibility fraud. According to the survey, 67 percent of respondents said they were either concerned or very concerned about fraud affecting their organizations and the programs they steward. Check out the results of the eligibility verification study and learn more about Experian’s Eligibility Assurance Framework solution.
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