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Student loan forbearance, part of the Coronavirus Aid, Relief, and Economic Security (CARES Act) economic stimulus bill that paused student loan repayment, interest accrual, and collections, is set to expire on May 1, 2022.  Borrowers who carry  federal student loans in the United States need to anticipate the resumption of repayment and interest accrual. In this article, we’ll answer questions your borrowers will be asking about the end of the student loan pause and how they can better prepare.   Lenders and servicers should anticipate an influx of requests for modification and for private student loan lenders, a potential significant push for refinancing.   When do student loans resume and when does student loan interest start again?  Student loan repayments and resumption of interest accruals are set to resume on May 1, 2022. This means that student loans will start accruing interest again, and payments will need to resume on the existing payment date. In other words, if the due date prior to the pause was the fifth of every month, the first repayment date will be May 5, 2022.  In the weeks preceding this, borrowers can expect a billing statement from their student loan servicer outlining their debt and terms or they can reach out to their servicers directly to get more information.  Will student loan forbearance be extended again? Will the CARES Act be extended?  There is no indication that the federal government will extend student loan forbearance beyond May 1, 2022, which was already extended beyond the original deadline in February 2022. Your borrower’s best strategy is to prepare now for the resumption of repayments, interest accrual and collections. Will Biden forgive student loans?  Free community college tuition and federal student loan forgiveness up to $10,000 were a centerpiece of the Biden platform during his candidacy for president and were included in early iterations of the government's Build Back Better agenda. In February 2022, during bargaining, the administration removed the free tuition provision from the bill. The Build Back Better bill has yet to pass.  Although there remains a student loan relief provision in the draft Build Back Better agenda, there is no guarantee that it will make it into the final iteration.  What should borrowers do if they paid student loans using auto-debit?  Most borrowers will need to restart auto-debit after the student loan pause. If auto-debit or ACH was used prior to the student loan pause went into effect on March 13, 2020, borrowers can expect to receive a communication from their servicer confirming they wish to continue with auto-debit. If the borrower doesn’t respond to this notice, the servicer may cancel auto-debit. If the borrower signed up for auto-debit after the beginning of forbearance, payments should automatically begin.  How much interest will borrowers have to pay?  Unless terms have changed, such as consolidating loans, the interest rate will be the same as it was before the student loan pause went into effect.  Will balances be the same as they were before the student loan pause? Will it take the same amount of time to pay off the student loan?  For those on a traditional repayment plan, a student loan servicer might recalculate the amount based on the principal and interest and the amount of time left in the repayment period. Borrowers will still make payments for the same number of months in total, but the end date for repayment will be pushed forward to accommodate the payment pause.   In other words, if the loan terms originally stated that it would be repaid in full on January 1, 2030, the new terms will accommodate the pause and show full repayment on January 1, 2032.  For those on an Income-Driven Repayment Plan (IDRP) – such as Revised Pay as You Earn Repayment (REPAYE), Pay As You Earn Repayment (PAYE), Income-Based Repayment (IBR), or Income-Contingent Repayment (ICR) – the payment amount will resume at the same rate as before the payment pause. Student loan forbearance will not delay progress towards repayment.  What are borrower options if the student loan payment is too high?  Enroll in an IDRP program: Available plans include REPAYE, PAYE, IBR or ICR.  Student loan refinancing: When a borrower refinances, he or she can group federal and private loans and possibly negotiate a lower repayment amount. However, they will not be eligible to access federal loans protections or programs.  Loan consolidation: This process allows borrowers to combine multiple federal loans into a single loan with a single payment, which can reduce monthly payments by extending the repayment period. Note this will result in more interest being charged, as the time to repay will be extended. Will this change affect those with private student loans?  Private lenders are not covered by the CARES Act, so student loan forbearance did not apply to them. Most private lenders have continued collecting repayments throughout the COVID-19 pandemic.   Borrowers having trouble making payments to a private lender, can discuss options such as deferment, forbearance, consolidation and modified repayment terms.  What happens if a student loan payment is missed or the borrower can’t pay at all?   If a payment is missed, the account will be considered delinquent. The account becomes delinquent the first day after a missed payment and remains that way until the past-due amount is paid or other arrangements are made.   If the account remains delinquent, the loan may go into default. The amount of time between delinquency and default depends on the student loan servicer. If the loan goes into default, borrowers could face consequences including:  Immediate collections on the entire loan and interest owed Ineligibility for benefits such as deferment and forbearance,   Inability to choose a different payment plan or obtain additional federal student aid  Damage to credit score  Inability to buy or sell assets  Withholding of tax refunds or other federal benefits Wage garnishment A lawsuit Do student loans affect credit scores?  Yes, for delinquent student loans, the servicer will report the delinquency to the three major credit bureaus and the borrower’s credit score will drop.2 A poor credit score can affect a consumer’s ability to obtain credit cards or loans and may make it difficult to sign up with utilities providers, cell phone providers and insurance agencies. It can also be challenging to rent an apartment.  What are the options for those who can’t pay? Can student loans be deferred?  For those with federal student loans, now is the time to prepare for the end of student loan forbearance. Revisit budgets, make sure records are up to date and communicate with student loan servicers to make sure payments can be made in full and on time.  For those unable to pay back loans, they can consider requesting a deferment. A deferment is a temporary pause on student loan payments. Depending on the type of loan, interest may or may not continue to accrue during the deferment.  If they wish to apply for a deferment, they must meet eligibility requirements. Some common grounds for deferment are:  Economic hardship  Schooling  Military service  Cancer treatment  Loan servicers and private lenders should arm themselves for the large volume of questions  from borrowers who are not prepared to begin resuming payment. Now may the time to increase customer service or consider adding student loan consolidation products to serve the increase in demand.  For information on mitigating risk and effectively managing your portfolio, click here.  

The digital innovation that has come out from the pandemic across businesses of all kinds – and the resulting improvement to customer experience – has been welcomed by consumers and the financial services industry.   However, it created a challenge for those institutions, namely credit unions, who thrived on and were famous for an excellent in-person customer experience. But rather than viewing it as a threat, the savviest credit unions began to look at some of the cloud-based tools this pandemic-induced digital wave brought with it.   To continue to deliver personalized, secure and fast decisions to their members, credit unions are now adopting cloud-based decisioning and fraud prevention platforms. These systems, like Experian PowerCurve, have helped credit unions and financial institutions alike overcome a dependency on manual processes and other potential resource constraints. In doing so, they can to deliver an excellent online customer experience that can handle high volumes of members from a variety of backgrounds, which reinforces the brand promises of trust and personalized customer service.    But it’s not just members who are benefiting from an improved lending experience. Credit unions may want to follow OneAZ Credit Union, who has seen a 26% increase in booking rates after implementing PowerCurve, in addition to a 25% reduction in manual reviews.  With 21 branches and a full-service digital team, OneAZ prides itself on a world-class member experience while helping members exceed their financial goals. They partnered with Experian® to implement an advanced decisioning system that would increase efficiency and further improve the member experience.  “The speed at which we can return a decision and our better understanding of future performance has really propelled us in being able to better serve our members,” said John Schooner, VP Credit Risk Management for OneAZ.  To read the full case study, click here. And to find more information on how Experian can improve your lending experience through automated decisioning tools,  you can read more about PowerCurve here.   

Since January 27, 2020, the federal government has been operating under a Public Health Emergency (PHE) related to the COVID-19 pandemic. On January 14, 2022, this PHE was renewed for an eighth time. While we are currently in the midst of the omicron surge, some suggest that we may be nearing the beginning of the end of the pandemic — and thus the inevitable expiration of the PHE. Impacts of the PHE While the PHE remains in effect, states must maintain current Medicaid enrollees, regardless of changes to their eligibility status. A recent report showed Medicaid enrollment increased 16.8% from February 2020 to June 2021. This is counter to the previous trend, where enrollment declined from 2017 to 2019. Furthermore, the average per capita Medicaid cost to states is estimated at $5K–$10K (states share about one-third of the cost of Medicaid). The combination of the per capita expense and the increased number of enrollees during the pandemic translates to a significant impact on state budgets. Once the federal order expires, states will have 12 months to redetermine eligibility for continued enrollment in the program, or risk bearing 100% of the associated cost. Processing redetermination in a timely manner is critical for states to avoid unnecessary expenditures and to ensure that citizens are receiving access to the correct services. It’s imperative that states start planning for redetermination of benefits for continued Medicaid coverage as soon as possible to be prepared to take action at the inevitable conclusion of the PHE. Preparing for redeterminations At the end of the PHE, states will need a system to easily and confidently review their current Medicaid rolls to confirm eligibility. Implementing this system will likely involve working with a trusted partner who can provide tools and advantages such as: Portfolio analysis Real-time analysis Verification of income and employment Compliance adherence Affordability With the correct systems in place, states can act quickly once the PHE ends, saving unnecessary expenditures and providing better services to citizens in need. If your state agency would like to learn more about how Experian can assist with citizen benefit redetermination efforts, visit us or request a call. Learn more

Reporting positive rental payment histories to credit bureaus has been in the news more than once in recent months. In early November, Freddie Mac announced it will provide closing cost credits on multifamily loans for owners of apartment properties who agree to report on-time rental payments. In July, California began requiring multifamily properties that receive federal, state or local subsidies to offer each resident in a subsidized apartment home the option of having their rental payments reported to a major credit bureau. And while reporting positive rental payments to credit bureaus may not yet be part of the multifamily mainstream, forward-thinking operators have already been doing it for years. Below is a quick primer on this practice and its benefits. Why do renters need this service? A strong, positive credit history is critical to securing car loans, credit cards and mortgages – and doing so at favorable interest rates. Unfortunately, unlike homeowners, apartment residents traditionally have not seen a positive impact on their credit reports for making their rent payments on time and in full, even though these payments can be very large and usually make up their largest monthly expense. In fact, renters are seven times more likely to be credit invisible – meaning they lack enough credit history to generate a credit score – than homeowners, according to the Credit Builders Alliance (CBA). This especially impacts lower-income households and communities of color. Renters make up approximately 60% of the U.S. households that make less than $25,000 a year, while Black and Hispanic households are twice as likely as White households to rent, according to the CBA. Experian is among the organizations working with the Consumer Data Industry Association (CDIA) on the association's Rental Empowerment Project. Through the REP, CDIA and its partner organizations seek to increase the reporting of rental payment history information by landlords and property managers through the development and adoption of a uniform, universal data reporting format for landlords and property managers to use. How does reporting positive rental payments to credit bureaus have an impact on a resident's credit history? The impact on any individual renter will obviously vary because of a wide array of factors. But to get some sense of the potential impact reporting on-time rental payments can have, consider the results of the CBA's Power of Rent Reporting pilot. In that test, 100% of renters who started off with no credit score became scorable at the near prime or prime level. In addition, residents with subprime scores saw their score increase by an average of 32 points. How does reporting positive rent payments benefit rental-housing owners and operators? Reporting positive rental payments provides residents with a powerful incentive to pay their rent on time and in full. And because there’s not a huge percentage of apartment communities currently doing this, helping residents build their credit history in this manner can offer a real competitive advantage. Learn more

With consumers having more banking options than ever before, loyalty has become the most valuable currency for financial institutions (FI). As fintechs and big tech companies continue to roll out innovative banking and payment options, traditional FIs must rethink their strategies to drive new business, retain existing customers and remain competitive. According to a recent Mintel report, rewards, transparency and customer service are the top three constants when it comes to building loyalty. Here’s how financial institutions can deliver on these fronts to create and maintain lasting customer relationships: Rewards programs and incentives Rewards have long been a key customer retention strategy, with 39% of consumers stating they would remain loyal to their financial service providers if they offered incentives and rewards. While traditional rewards programs that offer points or cash back on everyday purchases remain popular, many companies are expanding beyond the conventional rewards structure to attract new customers and stand out from the competition. For example, one California-based startup enables its cardholders to earn points at every winery, wine club or wine shop, while a health and wellness company rewards its cardholders with extra cash back when they meet their weekly fitness goals. To build and maintain customer loyalty, FIs can follow suit by incentivizing positive financial behavior, such as offering points to customers when their credit score increases or when they reach their monthly savings goal. Being rewarded for improving their financial health can encourage customers to continue making positive and responsible financial decisions. When customers see how much their financial institution invests in their financial well-being, they are more likely to remain loyal to the brand. Nurturing existing customers through rewards programs is also more cost-effective than acquiring new ones. Rewards program members spend 5-20% more than non-members on average, which not only covers operating costs but leads to increased sales and revenue. Transparency over fees Beyond rewards programs and incentives, many FIs have created innovative tools to help customers avoid overdraft fees, such as real-time alerts for low balances. To take it a step further, some have eliminated these fees altogether. While overdraft fees can be an easy source of revenue for financial institutions, they are a pain point for customers, especially for those who are financially vulnerable. Rather than continuing to be saddled with hefty penalties, customers are likely to switch to providers that are more upfront about their fees or have eliminated them outright. To avoid losing current and prospective customers to new competition, FIs need to be more transparent and work toward establishing fairer practices. Quick, friendly, and accessible customer service With today’s consumers having increased expectations for easy, convenient and accessible customer service, many FIs have refined their strategies by becoming digital-first. When customers have a question or concern, they can engage with financial institutions at any time through digital channels, including chat, email or social media. Being accessible at any hour of the day to assist their customers provides FIs with a great opportunity to build trust, loyalty and a positive reputation. By providing exceptional customer service, compelling rewards and being transparent, financial institutions have the power to create long-lasting customer relationships. Learn more about what you can do to retain your best customers or check out how to build lifetime loyalty with Gen Z. Learn more Build loyalty with Gen Z

The payments landscape is rapidly evolving, and as businesses set their strategic agendas for the new year, it’s important to analyze and adapt to changing consumer payment behaviors. Here are a few payment trends to look out for: Consumer sentiment remains low while inflation hits 39-year high According to the University of Michigan’s latest consumer sentiment survey, sentiment rose to 70.4 in December 2021 from 67.4 in November. While this was a slight improvement from the 10-year low logged in November, the figure was roughly in line with the average reading of the past four months (70.6). Additionally, consumer prices increased 6.8% over the past year, the highest in nearly 40 years. When asked whether inflation or unemployment was the more serious problem facing the nation, 76% of survey respondents selected inflation while 21% selected unemployment. Rising prices and the uncertainty surrounding the Delta and Omicron variants may cause consumers to remain pessimistic about their personal financial progress and delay large purchases. Payment preferences vary by age and purchase type According to a recent Mintel report, credit cards are the most preferred method of payment among U.S. adults. Despite the overall preference for credit cards, attitudes toward this payment option differ based on consumer age. Credit card preference skews strongly toward older consumers, with 46% of Baby Boomers opting to use credit cards for most of their purchases and 72% of the World War II generation preferring credit cards to any other payment type. Conversely, younger generations are turning to cash, debit cards and digital payment alternatives for most of their purchases. This difference can be explained by younger consumers’ fear of debt and lack of credit education. While older consumers may feel more comfortable and capable of paying off their credit card bill each month, most Gen Z consumers are not creditworthy enough to own a credit card or are afraid of falling behind on their monthly payments. Though Gen Z’s low ownership rate may seem concerning to credit card issuers, there’s an enormous opportunity for them to reach and engage this younger cohort. By educating younger consumers about their products and the importance of building credit, credit card issuers can build lasting customer relationships and maintain their standing in the payments hierarchy. Payment preferences also vary by purchase type. Consumers mostly use debit cards and credit cards for in-store purchases, while direct payments from bank accounts are used to pay off recurring bills. Despite these preferences for card and online payments, cash remains a popular secondary payment method across age demographics. Older consumers use cash to make small, personal transactions, while younger consumers are more likely to use cash or debit cards for large purchases. Digital payment popularity continues to soar From 2019 to 2020, peer-to-peer payment (P2P) services, like Venmo, Zelle and Cash App, saw usage increases of 2 to 3 percentage points. In 2021, that year-over-year increase jumped to 8, 9 and 7 percentage points respectively. This jump indicates that while consumers may have been reluctant to adjust their payment behaviors at the beginning of the pandemic, ongoing social distancing measures forced them to adapt to a new reality, leading to the widespread adoption of digital payment methods. As consumers continue to embrace P2P services, traditional payment powerhouses must pivot their strategies to capitalize on this trend and remain competitive in today’s payments landscape. To keep up with the latest consumer and economic trends, register for our upcoming Monthly Credit and Economic Trends webinar.

With consumers continuing to take a digital-first approach to everything from shopping to dating and investing, fraudsters are finding new and innovative ways to commit fraud. To help businesses anticipate and prepare for the road ahead, we created the 2022 Future of Fraud Forecast. Here are the fraud trends we expect to see over the coming year: Buy Now, Pay Never: Buy now, pay later lenders will see an uptick in identity theft and synthetic identity fraud. Beware of Cryptocurrency Scams: Fraudsters will set up cryptocurrency accounts to extract, store and funnel stolen funds, such as the billions of stimulus dollars swindled by criminals. Double the Trouble for Ransomware Attacks: Fraudsters will not only ask for a hefty ransom to cede control back to the companies they’ve hacked but also steal and leverage data from the hacked company. Love, Actually?: Romance scams will continue to see an uptick, with fraudsters asking victims for money or loans to cover fabricated travel costs, medical expenses and more. Digital Elder Abuse Will Rise: Older consumers and other vulnerable digital newbies will be hit with social engineering and account takeover fraud. “Businesses and consumers need to be aware of the creativity and agility that fraudsters are using today, especially in our digital-first world,” said Kathleen Peters, Chief Innovation Officer at Experian Decision Analytics in North America. “Experian continues to leverage data and advanced analytics to develop innovative solutions to help businesses prevent fraudulent behavior and protect consumers.” To learn more about how to protect your business and customers from rising fraud trends, download the Future of Fraud Forecast and check out Experian’s fraud prevention solutions. Future of Fraud Forecast Read Press Release

Who said that direct mail was dead? Though consumers have flooded to digital channels since the onset of the pandemic, with 55% now having a higher expectation of their customer experience, traditional methods shouldn't be cast aside. On the other hand, sending printed mail without adapting to consumer demands may leave recipients disengaged and less likely to act. So, where does that leave marketers? How can businesses create a balance between traditional and digital credit marketing? Before diving into that discussion, it’s important to note that direct mail is still effective and when done right, can help businesses win the hearts and wallets of today’s consumers. According to the U.S. Postal Service’s (USPS) Certified Direct Mail Professional (CDMP) program, 79% of households say they read their daily mail, while 70% of recipients are curious to find out what’s in their mailbox. So, how can credit card marketers capitalize on these trends to generate higher response rates and returns from their direct mail campaigns? It’s simple – businesses must weave interactive elements and technology into their direct mail pieces to make them more effective and engaging. Here’s how credit card issuers are leveraging technology to level up their direct mail campaigns: QR codes QR codes, which allow consumers to read restaurant menus and make touchless payments with their mobile devices, have become a global sensation, with the number of interactions having grown 94% between 2018-2020. More recently, credit card marketers have included interactive QR codes into their direct mail pieces, allowing recipients to learn more about the offer, download their mobile app or quickly apply for a credit card. A few brands took it a step further by matching their QR codes with the colors of their logos to add more brand recognition and personalization. Voice Activated Call to Action (VACTA) According to Mintel, over 25% of U.S. adults own at least one smart speaker. To capitalize on this trend, many credit card issuers have included a Voice Activated Call to Action (VACTA) in their direct mail pieces. A VACTA allows recipients to respond to direct mail offers verbally by using their Amazon Alexa or Google Assistant device. Instead of reaching for their smartphones or laptops, consumers can call out to their smart speaker with the offer code. This low-effort, hands-free method is a quick and convenient way for consumers to engage with businesses as it enables them to respond to offers even when they are performing other tasks. Once their smart speaker receives the code, a link is then sent to the consumer’s phone so that they can examine the offer at any time. Giving consumers more flexibility enhances their experience and increases the chances of them responding to future offers. Additionally, including a VACTA in direct mail pieces allows marketers to manage, track and optimize their marketing campaigns in real-time. Because VACTAs make offers immediately redeemable, businesses can easily measure the performance and effectiveness of each direct mail piece. Informed Delivery emails What better way to build anticipation and excitement for direct mail offers than to give consumers a sneak peek of what’s to come? USPS’s Informed Delivery is a service that allows consumers to digitally preview their direct mail before it arrives in their physical mailbox. Until the physical mail piece is delivered, consumers can look at what the mailing might reveal or offer to them through email, an online dashboard or a mobile app. The best part? Informed Delivery emails meet today’s consumer expectations for convenient digital experiences as they are available to view them anytime, anywhere. Currently, one in five households has an Informed Delivery participant. What’s more, the average open rate for an Informed Delivery email is nearly 70%. By incorporating Informed Delivery into direct mail campaigns, businesses can generate additional impressions, improve customer engagement and drive more conversions. Doing direct mail, the right way Direct mail isn’t outdated, antique or ineffective – it has evolved and adapted to meet the expectations of today’s consumers. The use of QR codes, VACTA and USPS Informed Delivery, are just a few examples of how credit card marketers are leveraging digital enhancements to improve the success of their direct mail campaigns. While it’s clear that direct mail is still an effective way to reach consumers, businesses should not overlook the power of digital marketing. Expectations for seamless and connected digital experiences are higher than ever, making it crucial for businesses to develop strong digital marketing strategies. By engaging with consumers in the way that works best for them, with the right messages at the right time, you can drive more opportunities, reduce costs and deliver exceptional customer experiences. Learn more Download white paper

Experian’s newest Global Insights Report found that consumers are online 25% more today than they were just a year ago, highlighting the importance of the digital customer experience. To acquire customers and retain their loyalty, businesses need to focus on improving the online experience, preventing fraud, and managing credit risk.   This September, Experian surveyed 3,000 consumers and 900 businesses across all industries to explore business priorities and recent changes in consumer activities.   Many businesses and consumers are reportedly feeling more economically stable now than they were a year ago. As consumers resume spending the digital customer experience becomes even more paramount – requiring businesses to invest in scalable software solutions that will accurately assess credit risk and meet ever-changing needs and priorities.   Our research found that:   42% of consumers have increased concern for the safety of banking and shopping transactions Business adoption of advanced analytics has increased over last year, and adoption of artificial intelligence is up from 69% to 74% Consumers are more likely to share their personal data if it improves their experience, with 56% willing to share their contact information The top three consumer priorities continue to be security, privacy and convenience   Download the report to get all the latest insights into consumer desires and business behaviors as we move further through the digital evolution. Download the report

Credit scores play a massive role in a consumer’s financial life as they help determine an individual’s creditworthiness. While 62% of consumers are interested in improving their credit scores, a troublingly high percentage are unsure of where to start. What’s more, one in four Americans have no idea how credit scores are even determined. This knowledge gap presents an opportunity for financial institutions to help consumers increase their credit understanding and establish lasting relationships. Some of the benefits of providing credit education to consumers include: Consumer trust and loyalty Today’s consumers are looking for guidance and support on all things credit. Helping consumers navigate their credit reports, improve their credit scores and explore the impacts of various scenarios are all opportunities for financial institutions to meet this demand and foster loyalty. With the knowledge and tools needed to make confident and responsible financial decisions, consumers will continue to trust and look toward the same financial institutions for credit guidance as they navigate their financial journeys. Credit education is especially valuable to younger consumers. As rookies to the credit game, many Gen Zers may find credit to be mysterious, complex and difficult to grasp. Despite these feelings, Gen Zers have shown considerable interest in becoming financially literate. By continuously providing Gen Z consumers with reliable and accessible credit education early on, financial institutions can grow to become their valuable partner, educator and mentor for life. More cross-sell opportunities The more educational resources financial institutions provide their consumers, the more likely they are to pay their credit card bills on time, take out loans and mortgages they can meet and purchase within their buying power, making them prime candidates to approach for additional credit offerings. According to studies conducted by Visa Performance Solutions, consumers respond more to credit offers from institutions they currently have a relationship with than those they don’t. By providing credit education and relevant offers to existing customers, financial institutions can improve satisfaction while increasing their revenue. Enhances brand reputation While credit education allows financial institutions to strengthen their relationships with existing clients, it also gives them an opportunity to expand and acquire new ones. When consumers feel valued and cared for, they are more likely to recommend a business’s products and services to someone else. The more consumers see how much a financial institution invests in their customers’ financial well-being, the more likely they are to convert themselves. Ready to get started? Providing value to consumers is no longer just about offering great products and services; it’s about helping them understand the basics and importance of credit so that achieving their financial goals comes easily. To learn more about how credit education can help deepen customer relationships and drive business growth, visit our Experian Partners Solutions page. Learn more

It is no news that businesses are increasing their focus on advanced analytics and models. Whether looking to increase resources or focus on artificial intelligence (AI) and machine learning (ML), growth is the name of the game. But how do you maximize impact while minimizing risk? And how can you secure expertise and ROI when budgets are strapped?  Does your organization have the knowledge and talent in-house to remain competitive? No matter where you are on the analytics maturity curve, (outlined in detail below), your organization can benefit from making sure your machine learning models solution consists of: Regulatory documentation: Documentation for model and strategy governance is critical, especially as there is more conversation surrounding fair lending and how it relates to machine learning models. How does your organization ensure your models are explainable, well documented and making fair decisions? These are all questions you must be asking of your partners and solutions. Integrated services: For some service providers, “integrated,” is merely a marketing ploy, but it is essential that your solution truly integrates attributes, scores, models and decisions into one another. Not only does this serve as a “checks and balances” system of sorts, but it also is a primary driver for the speed of decisioning, which is crucial in today’s digital-first world. Deep expertise: Models are a major component for your decisioning, but ensuring those models are built and backed by experts is the one-two punch your strategies depend on. Make sure your services are managed by data scientists with extensive experience to take the best approach to solving your business problems. Usability: Does your solution close the loop? To future proof your processes, your solution must analyze the performance of attributes, scores and strategies. On top of that, your solution should make sure the items being built are useable and can be modified when needed. A one-and-done model does not suit the unique needs of your organization, so ensure your solution provides actionable analysis for continual refinement. Does your machine learning model solution check these boxes? Do you want to transform your existing system into a state-of-the-art AI platform? Learn more about how you can take your business challenges head-on by rapidly developing, deploying and monitoring sophisticated models and strategies to more accurately predict risk and achieve better outcomes. Learn more Access infographic   More information: What’s the analytics maturity curve? “Analytics” is the discovery, interpretation and communication of meaningful patterns in data; the connective tissue between data and effective decision-making within an organization. You can be along this journey for different decision points you’re making or product types, said Mark Soffietti, Director of Analytics Consulting at Experian, at our recent AI-driven analytics and strategy optimization webinar. Where you are on this curve often depends on your organization’s use of generic versus custom scores, the systems currently engaged to make those decisions and the sophistication of an organization’s models and/or strategies. Here’s a breakdown of each of the four stages: Descriptive Analytics – Descriptive analytics is the first step of the analytics maturity curve. These analytics answer the question “What is happening?” and typically revolve around some form of reporting. An example would be the information that your organization received 100 applications. Diagnostic Analytics – These analytics move from what happened to, “Why did it happen?” By digging into the 100 applications received, diagnostic analytics answer questions like “Who were we targeting?” and “How did those people come into our online portal/branch?” This information helps organizations be more strategic in their practices. Predictive Analytics – Models come into play at this stage as organizations try to predict what will happen. Based on the data set and an understanding of what the organization is doing, effort is put towards automating information to better solve business problems. Prescriptive Analytics – Optimization is key for prescriptive analytics. At this point in the maturity curve, there are multiple models and/or information that may be competing against one another. Prescriptive analytics will attempt to prescribe what an organization is doing and how it can drive more desired behaviors. For more information and to get personalized recommendations throughout your analytics journey, visit our website.

Experian’s Sure Profile was selected as a Platinum winner in the “Fraud and Security Innovation” category in the sixth annual Fintech & Payments awards from Juniper Research, a firm dedicated to delivering thought leadership and analysis in the Fintech and Payment industries.   An innovative service in the fight against synthetic identity fraud, Sure Profile is a comprehensive credit profile that provides a composite history of a consumer’s identification, public record, and credit information in order to detect synthetic identities. It utilizes premium data to help businesses identify potential synthetic fraud threats across credit inquiries, thus allowing lenders to transact more confidently with the vast majority of legitimate consumers.   “Experian has always been a leader in delivering innovative services that both combat fraud and provide identity verification and trust to lending environments. Sure Profile delivers an industry-first fraud offering—integrated directly into the credit profile—that mitigates lender losses while protecting millions of legitimate consumers’ identities,” said Keir Breitenfeld, Senior Vice President, Portfolio Marketing, Experian Decision Analytics. “In times of rapid changes to customer interactions, growth strategies, and risk management practices, it’s particularly important to focus on building tools that can help businesses make better decisions and I’m proud that Experian has again provided an instrument to enable those decisions.”   To learn more about Sure Profile and how Experian is working to solve this multibillion-dollar problem, visit us or request a call. Learn more

Chatbots, reduction of manual processes and explainability were all hot topics in a recent discussion between Madhurima Khandelwal, Vice President and Head of DataLabs at American Express®, and Eric Haller, Executive Vice President and head of Experian DataLabs. The importance of AI’s role in innovation in the financial services space was the focus of the recent video interview. In the interview, Khandelwal highlighted some of the latest in what American Express DataLabs is working on to continue to solve complex challenges by building tools driven by AI and Machine Learning: Natural language processing has come a long way in even the last few years. Khandelwal discussed how chat bots and conversational AI can automate the simple to complex to enhance customer experience. Document recognition and processing is another leading-edge innovation that is useful for extracting and analyzing information, which saves staff countless manual hours, Khandelwal said. Fairness and explainability are consistently brought to the forefront especially in financial services as regulators are looking at ways to prevent AI/ML from causing bias for the consumer. Khandelwal showcased how there is extreme rigor in each part of creating their models and how human oversight and training are primary drivers for how they stay on top of this. As for innovation advice, Khandelwal points out that it’s important to be aware that AI and innovation are not always interchangeable, and companies need to think through whether a problem needs to be solved through AI/ML models before charting ahead. Another major key to the equation is the data. In all use cases, the undercurrent of innovation in any form is dependent on the data being used. Learn more about this topic and what Harry Potter has to do with women in data science. Watch the Interview

It’s time for organizations to harness the power artificial intelligence (AI) can bring to digital identity management – quickly and accurately identifying consumers throughout the lifecycle. The rise in crime   The acceleration to digital platforms created a perfect storm of new opportunities for fraudsters. Synthetic identity fraud, stimulus-related fraud, and other types of cybercrime have seen huge upticks within the past year and a half. In fact, the Federal Trade Commission revealed that consumers reported over 360,000 complaints, resulting in more than $580 million in COVID-19-related fraud losses as of October 2021. To protect both themselves and consumers, businesses — especially lenders — will have to find and incorporate new strategies to identify customers, deter fraudsters and mitigate cybercrime. The benefits of AI for digital identity In our latest e-book, we explore the impacts of AI on organizations’ digital identity strategies, including: How changing consumer expectations increased the need for speed The challenges associated with both AI and digital identities The path forward for digital identity and AI How to develop the right strategy Building a solution It’s clear that current digital identity and fraud prevention tools are not enough to stop cybercriminals. To stay ahead of fraudsters and keep consumers happy, businesses need to look to new technologies — ones that can intake and compute large data sets in near-real time for better and faster decisions throughout the customer lifecycle. By using AI, businesses will enjoy a fast and consistent decisioning system that automatically routes questionable identities to additional authentication steps, allowing employees to focus on the riskiest cases and maximizing efficiency. Read our latest e-book to dive into the ways artificial intelligence and digital identity interact, and the benefits a clear identity strategy can have for the entire user journey. Download the e-book

Generation Z has money on their minds, and as their appetite for personal finance grows, financial institutions better be ready. Accounting for 40% of all U.S. consumers, Gen Z is comprised of digital natives with little to no memory of the world as it existed before smartphones, social media and the internet. Aside from growing up in a tech-saturated world, Gen Zers are also socially conscious and determined to take control of their financial futures. According to Credit Union Times, Gen Zers wield a purchasing power of more than $143 billion, which is projected to increase by more than 70% in the next five years. What do these insights mean for financial institutions? As the newest and soon-to-be largest cohort of consumers, Gen Zers represent an enormous opportunity for growth. While establishing a relationship with Gen Z now is key to creating lifelong customers, the same approaches used to capture previous generations may not be as effective with this younger cohort. To successfully reach and acquire Gen Z consumers, financial institutions must recognize their unique needs, preferences and experiences. Here are some key trends and preferences to consider: They live and breathe social media. According to Mintel, 99% of Gen Z adults and teens are active social media users. Despite this percentage of Gen Zers on social media, credit card issuers spent 94% of their media budget on direct mail from January 2019 to May 2021. This highlights the need for financial institutions to recognize social media as a powerful and necessary marketing vehicle. As a fast-growing consumer group with massive spending power, Gen Z makes for valuable customers, but are being missed by current marketing strategies. While direct mail is popular among millennials, financial institutions must recognize Gen Z’s preference for social media and pivot themselves to effectively reach them. By leveraging both social media and direct mail, financial institutions can dramatically increase their reach and acquire a wider pool of consumers. They want to be financially literate. Concepts like budgeting, investing and credit building can seem daunting to Gen Zers, especially if they lack the proper guidance and resources to get started. According to a NerdWallet survey, 41% of Gen Zers feel anxious about their personal finances, while 40% feel nervous and confused. To add onto their worries, older Gen Z members may have witnessed their parents struggle financially during the Great Recession or have seen millennials burdened with student loan debt. For fear of facing the same challenges as their predecessors, Gen Zers have shown great interest in taking control of their financial lives and becoming financially literate. In response to this desire for financial education, many banks and credit card issuers have taken an educational approach in their marketing by using infographics and ‘how-to’ guides to teach Gen Z about the basics of personal finance. Offering educational resources not only gives Gen Zers the confidence to make financial decisions, but it gives financial institutions the opportunity to build an early connection with this consumer group. Many banks and credit card issuers are also positioning themselves as companies Gen Zers can “grow with.” By not limiting their products to a specific life stage, these financial institutions seek to grow alongside the consumer so that they remain loyal customers even when their needs and lifestyles change. They care about what brands stand for. According to Mintel Trend Buydeology, Gen Z consumers are passionate about the causes close to their hearts and are more likely than other generation to pay a higher price for brands that support the causes they care about. With this in mind, financial institutions must prove they are authentic, socially responsible and committed to serving their communities. To resonate with Gen Z consumers and align with their preferences, financial institutions should educate themselves about social issues, take part in meaningful discussions both on and offline, and develop innovative strategies to drive real impact and change. Ready to win over Gen Z? Financial institutions have a massive opportunity to build lasting relationships with Gen Z consumers and having a pulse on what this fast-growing segment wants is a must. To learn more, check out our efforts to help marginalized and underserved communities or join our upcoming webinar on November 3, 2021. Learn more  Register for webinar