Financial Services

Many organizations commit to diversity, equity, and inclusion (DEI) policies and practices to build a more diverse and just workplace. Organizations that  live by these values ensure they're reflected in the products and services they offer, and in how they attract and interact with customers. For financial institutions, there could be a direct link between their DEI efforts and financial inclusion, which can open up growth opportunities. Defining DEI and financial inclusion DEI and financial inclusion aren't new concepts, but it's still important to understand how organizations are using these terms and how you might define a successful outcome. What is DEI? DEI policies help promote and support individuals and groups regardless of their backgrounds or differences. In the Experian 2022 Diversity, Equity and Inclusion Report, we define these terms more specifically as: Diversity: The presence of differences that may include thought, style, sexual orientation, gender identity/expression, race, ethnicity, dis(ability), culture, and experience. Equity: Promoting justice, impartiality, and fairness within the procedures, processes, and distribution of resources by institutions or systems. Inclusion: An outcome to ensure those who self-identify as diverse feel and are welcomed. You meet your inclusion outcomes when you, your institution, and your programs are inviting to all. We also recognize the importance of belonging, or “a sense of fitting in or feeling you are an important member of a group." A company's DEI strategy might include internal efforts, such as implementing hiring and promotion practices to create a more diverse workforce, and supporting employee resource groups to foster a more inclusive culture. Companies can also set specific and trackable goals, such as Experian's commitment to increase its representation of women in senior leadership roles to 40 percent by 2024.1 But DEI efforts can expand beyond internal workforce metrics. For example, you might review how the products or services you sell — and the messaging around those offerings — affect different groups. Or consider whether the vendors, suppliers, nonprofits, communities, and customers you work with reflect your DEI strategy. What is financial inclusion? Financial inclusion is less specific to a company or organization. Instead, it describes the strategic approach and efforts that allow people to affordably and readily access financial products, services, and systems. Financial institutions can promote financial inclusion in different ways. A bank can change the requirements or fees for one of its accounts to better align with the needs of people who are currently unbanked. Or it can offer a solution to help people who are credit invisible or unscoreable by conventional scoring models establish their credit files for the first time. For example, Mission Asset Fund, a San Francisco-based nonprofit, organizes credit-building lending circles that have historical roots in savings programs from around the world. Participants can use them to build credit without paying any interest or fees. In particular, the organization focuses on helping immigrants establish and improve their credit in the U.S. Financial institutions are also using non-traditional data scoring to lend to applicants that conventional scoring models can't score. By incorporating alternative credit data1 (also known as expanded FCRA-regulated data) into their marketing and underwriting, lenders can expand their lending universe without taking on additional risk. READ MORE: Experian's Improving Financial Health Report 2022 has many examples of internal products and external partnerships that help promote financial literacy and inclusion. DEI and financial inclusion can complement each other Although DEI and financial inclusion involve different strategies, there's an undeniable connection that should ultimately be tied to a business's overall goal and mission. The groups who are historically underrepresented and underpaid in the workforce also tend to be marginalized by the established financial system. For example, on average, Black and Hispanic/Latino workers earn 76 percent and 73 percent, respectively, as much as white workers.2 And 27 percent of Black and 26 percent of Hispanic/Latino consumers are either credit invisible or unscoreable, compared to only 16 percent of white consumers.3 Financial institutions that work to address the inequities within their organizations and promote financial inclusion may find that these efforts complement each other. During a webinar in 2022 discussing how financial growth opportunities can also benefit underserved communities, Experian asked participants what they thought was the greatest business advantage of executing financial inclusion in their financial institution or business. The majority of respondents (78 percent) chose building trust and retention with customers and communities — undoubtedly an important outcome. But the second most popular choice (14 percent) was enhancing their brand and commitment to DEI, highlighting how these efforts can be interconnected.4 By building a more diverse workforce, organizations can also bring on talent that better relate to and understand consumers who weren't previously part of the company's target market. If the company culture supports a range of ideas, this can unlock new ways to propel the business forward. In turn, employees can be more engaged and excited about their work. Find partners that can help you succeed Setting measurable outcomes for your DEI and financial inclusion efforts and tracking your progress can be an important part of implementing successful programs. But you can also leverage partnerships to further define and achieve your goals. Experian launched Inclusion ForwardTM with these partnerships in mind. Building on our commitment to DEI and financial inclusion, we offer various tools to help consumers build and understand their credit and to help financial institutions reach underserved communities. Products like Experian GoTM and Experian BoostTM help consumers establish their credit file and add positive utility, rent, and streaming service payments to their Experian credit report. Lenders can benefit from access to various non-traditional credit data and expanded FCRA-regulated scoring models, including Experian's Lift PremiumTM, which can score 96 percent of U.S. adults. Whether you've established your strategy and need help with implementation or are at the starting stages, Experian can help you promote DEI and enhance your financial inclusion efforts. Learn more about driving financial inclusion to bring change  1Experian (2022). 2022 Diversity, Equity and Inclusion Report 2U.S. Department of Labor (N/A). Earnings Disparities by Race and Ethnicity 3Oliver Wyman (2022). Financial Inclusion and Access to Credit 4Experian (2022). Three Ways to Uncover Financial Growth Opportunities that Benefit Underserved Communities.

Machine learning (ML) is a powerful tool that can consume vast amounts of data to uncover patterns, learn from past behaviors, and predict future outcomes. By leveraging ML-powered credit risk models, lenders can better determine the likelihood that a consumer will default on a loan or credit obligation, allowing them to score applicants more accurately. When applied to credit decisioning, lenders can achieve a 25 percent reduction in exposure to risky customers and a 35 percent decrease in non-performing loans.1 While ML-driven models enable lenders to target the right audience and control credit losses, many organizations face challenges in developing and deploying these models. Some still rely on traditional lending models with limitations preventing them from making fast and accurate decisions, including slow reaction times, fewer data sources, and less predictive performance. With a trusted and experienced partner, financial institutions can create and deploy highly predictive ML models that optimize their credit decisioning. Case study: Increase customer acquisition with improved predictive performance Looking to meet growth goals without increasing risk, a consumer goods retailer sought out a modern and flexible solution that could help expand its finance product options. This meant replacing existing ML models with a custom model that offers greater transparency and predictive power. The retailer partnered with Experian to develop a transparent and explainable ML model. Based on the model’s improved predictive performance, transparency, and ability to derive adverse action reasons for declines, the retailer increased sales and application approval rates while reducing credit risk. Read the case study Learn about our custom modeling capabilities 1 Experian (2020). The Art of Decisioning in Uncertain Times

Recent statistics certainly illustrate why many renters are feeling anxious lately. More than 40% of renter households in the U.S. — that’s 19 million households — spent more than 30% of their total income on housing costs during the 2017–2021 period, according to the U.S. Census Bureau’s new American Community Survey (ACS). Households that spend more than 30% of their income on housing costs — including rent or mortgage payments, utilities, and other fees — are considered “housing cost burdened” by the U.S. Department of Housing and Urban Development. Digging a little deeper, nearly 8% of the nation’s 3,143 counties had a median housing cost ratio for renters above 30% during the five-year period, according to ACS, and nearly a third of all U.S. renters lived in these counties. Unsurprisingly, 60% of Americans say they’re “very concerned” about the cost of housing, according to the Pew Research Center. The financial plight of renters today underscores the importance of incorporating renter payment history into screening efforts. It also indicates why reporting positive rent payments to credit bureaus can be such a powerful amenity. Rental data: The key to optimizing the screening process Simply put, a screening process that includes an applicant’s rental payment history provides a more comprehensive understanding of their risk profile and likelihood of paying rent on time and in full. That’s especially critical in an environment when paying rent can be something of a financial burden for many. Wouldn’t an apartment manager want to make a leasing decision by taking into consideration every possible bit of relevant data, especially the most relevant data available — rental payment history? Credit scores are often at the heart of an operator’s screening process. A credit score can give a very general sense of the risk posed by a prospect, but it doesn't provide crystal-clear insight into the likelihood of an applicant paying their rent on time and in full. Even people who are financially responsible and diligent about paying their rent can find themselves with less-than-ideal credit scores. Maybe they were injured in an accident, came down with a serious illness or lost their job, and then suffered a host of financial consequences that harmed their credit score. It can't be assumed people who have been through these situations won't pay their rent on time. At the same time, especially given the burden rent payments pose for many renters, reporting positive payments to credit bureaus can serve as an effective way to attract residents. 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 very large and usually make up their largest monthly expense. Rental reporting According to the Credit Builders Alliance (CBA), renters are seven times more likely to be credit invisible — meaning they lack enough credit history to generate a credit score — when compared to homeowners. But by reporting their on-time rent payments to credit bureaus, apartment communities can help renters build their credit histories, which can make it easier for them to do things such as secure a car loan or credit card — and to do so at favorable interest rates. Additionally, rent reporting gives residents a strong incentive to pay their rent on time and in full. And it can provide apartment communities with a competitive advantage since this financial amenity is not widespread throughout the rental-housing industry. The data is clear: this is a challenging time for many renters. But by making rental payment histories part of their screening, operators can minimize their risk. And by reporting positive rental payments, they can attract residents and help them build a better financial future. To learn more about Experian’s largest rental payment database and how to start reporting with us, visit us online. Experian RentBureau™

In a dynamic, consumer-driven market, speed and agility are essential to providing seamless customer experiences. However, many financial institutions are still relying on legacy processes and systems to acquire new customers, leading to slow decision-making and significant customer dropout. Experian surveyed over 6,000 consumers and 1,800 businesses worldwide to gain insights into the latest digital consumer trends and key business priorities. Here are some findings to consider if you’re looking to refine your customer acquisition strategy: 40% of businesses consider investing in more digital and automated operations a priority. From application processing to identity verification, many lenders are still performing customer onboarding tasks manually. To increase efficiency and digital acquisition, forward-thinking businesses are focusing on flexible, data-driven technologies that enable centralized, automated, and scalable decision-making. 58% of consumers don’t feel that businesses completely meet their digital online experience. With today’s consumers expecting instant responses, lenders must ensure they’re providing quick and seamless credit application experiences. A nimble decisioning platform can help by providing lenders with greater visibility into consumers through automated data connectivity, allowing them to drive faster, more informed decisions digitally. For more consumer and business trends, download our infographic and check out our customer acquisition solution to learn how to optimize your customer acquisition strategy. Access infographic Power your customer acquisition process

As economic conditions shift and consumer behavior fluctuates, first- and third-party debt collectors must adapt to continually maintain effective debt collection strategies. In this article, we explore collections best practices that can empower collectors to improve operational efficiency, better prioritize accounts and enhance customer interactions, all while ensuring compliance with changing regulations. Best practices for improving your collection efforts 1. Implement a data-driven collection strategy Many collectors are already using artificial intelligence (AI) and machine learning (ML) to gain a more complete view of their consumers, segment accounts and create data-driven prioritization strategies. The data-backed approach is clearly a trend that's going to stick. But access to better (i.e., more robust and hygienic) data and debt collection analytics will distinguish the top performers.You can use traditional credit data, alternative credit data, third-party data and advanced analytics to more precisely segment consumers based on their behavior and financial situation — and to determine their propensity to pay. Supplementary data sources can also help with verifying consumers' current contact information and improving your right-party contact rates.Cloud-based platforms and access to various data sources give debt collectors real-time insights. Quickly identifying consumers who may be stretched thin or trending in the wrong direction allows you to proactively reach out with an appropriate pre-collection plan.And for consumers who are already delinquent, the more precise segmentation and tracking can help you determine the best contact channels, times and personalized treatments. For instance, you could optimize outreach based on specific account details (rather than general time-based metrics) and offer payment plans that the customer can likely afford. 2. Use technology to maximize your resources Data-driven prioritization strategies can help you determine who to contact, how to contact them and the treatment options you offer. But you may need to invest in technology to efficiently execute these findings. Although budgets may be limited, the investment in debt recovery tools can be important for handling rising account volumes without increasing headcount. Some opportunities include: Automate processes and outreach: Look for opportunities to automate tasks, particularly monotonous tasks, to reduce errors and free up your agents' time to focus on more valuable work. You could also use automated messages, texts, chatbots and virtual negotiators with consumers who will likely respond well to these types of outreaches. Establish self-service platforms: Create self-service platforms that give consumers the ability to choose how and when to make a payment. This can be especially effective when you can accurately segment consumers based on the likelihood that they'll self-cure and then automate your outreach to that segment. Keep consumer data up to date: Have systems in place that will automatically verify and update consumers' contact information, preferences and previous collection attempts. Reprioritize old accounts based on significant changes: Tools like Experian's Collection Triggers℠ allow you to monitor accounts and automatically get alerted when consumers experience a significant change, such as a new job, that could prompt you to put their account back into your queue. 3. Prioritize customer experience In some ways, debt collectors today often work like marketers by embracing digital debt collection and a customer-first philosophy to improve the consumers' experiences. Your investment in technology goes together with this approach. You'll be able to better predict and track consumers' preferences and offer self-cure options for people who don't want to speak directly with an agent. You also may need to review your regular onboarding and training programs. Teaching your call center agents to use empathy-based communication techniques and work as a partner with consumers to find a viable payment plan can take time. But the approach can help you build trust and improve customer lifetime value. 4. Continue to carefully monitor regulatory requirements Keeping up with regulatory requirements is a perennial necessity for collectors, and you'll need to consider how to stay compliant while adding new communications channels and storing consumer data. For example, make sure there are “clear and conspicuous" opt-out notices in your electronic communications and that your systems can track which channels consumers opt out of and their electronic addresses.1In some cases, the customer-first approach may help minimize regulatory risks, as you'll be training agents to listen to consumers and act in their interest. Similarly, data-driven optimizations can help you increase collections with fewer contacts.WATCH: Explore credit union collection trends and successful account management strategies. Partner with a top provider to achieve success Experian has partnered with many debt collectors to help them overcome challenges and increase recovery rates. There are multiple solutions available that you can use to improve your workflow: TrueTrace™ and TrueTrace Live™: Leverage access to the consumer credit database that has information on over 245 million consumers, and additional alternative databases, to maintain current addresses and phone numbers. PriorityScore for Collections ℠ Know which accounts you should focus on with over 60 industry-specific debt recovery scores. You can choose to prioritize based on likelihood to pay or expected recovery amount. Collection Triggers℠: Daily customer monitoring can tell you when it's time to approach a consumer based on life events, such as new employment or recent credit inquiries. Phone Number ID™ with Contact Monitor™: Increase right-party contact rates and avoid Telephone Consumer Protection Act (TCPA) violations with real-time phone ownership and type monitoring from over 5,000 local exchange carriers. Experian's PowerCurve® Collections and Experian® Optimize solutions also make AI-driven automated systems accessible to debt collectors that previously couldn't afford such advanced capabilities. Building on Experian's access to many sources of credit and non-credit data, these solutions can help you design debt collection strategies, predict consumer behavior and automate decisioning.Learn more about Experian's debt collection solutions. Learn more This article includes content created by an AI language model and is intended to provide general information.

"Out with the old and in with the new" is often used when talking about a fresh start or change we make in life, such as getting a new job, breaking bad habits or making room in our closets for a new wardrobe. But the saying doesn't exactly hold true in terms of business growth. While acquiring new customers is critical, increasing customer retention rates by just 5% can increase profits by up to 95%.1 So, what can your organization do to improve customer retention? Here are three quick tips: Stay informed Keeping up with your customers’ changing interests, behaviors and life events enables you to identify retention opportunities and create personalized credit marketing campaigns. Are they new homeowners? Or likely to purchase a vehicle within the next five months? With a comprehensive consumer database, like Experian’s ConsumerView®, you can gain granular insights into who your customers are, what they do and even what they will potentially do. To further stay informed, you can also leverage Retention TriggersSM, which alert you of your customers changing credit needs, including when they shop for new credit, open a new trade or list their property. This way, you can respond with immediate and relevant retention offers. Be more than a business – be human Gen Z's spending power is projected to reach $12 trillion by 2030, and with 67% looking for a trusted source of personal finance information,2 financial institutions have an opportunity to build lifetime loyalty now by serving as their trusted financial partners and advisors. To do this, you can offer credit education tools and programs that empower your Gen Z customers to make smarter financial decisions. By providing them with educational resources, your younger customers will learn how to strengthen their financial profiles while continuing to trust and lean on your organization for their credit needs. Think outside the mailbox While direct mail is still an effective way to reach consumers, forward-thinking lenders are now also meeting their customers online. To ensure you’re getting in front of your customers where they spend most of their time, consider leveraging digital channels, such as email or mobile applications, when presenting and re-presenting credit offers. This is important as companies with omnichannel customer engagement strategies retain on average 89% of their customers compared to 33% of retention rates for companies with weak omnichannel strategies. Importance of customer retention Rather than centering most of your growth initiatives around customer acquisition, your organization should focus on holding on to your most profitable customers. To learn more about how your organization can develop an effective customer retention strategy, explore our marketing solutions. Increase customer retention today 1How investing in cardholder retention drives portfolio growth, Visa. 2Experian survey, 2023.

Believe it or not, 2023 is underway, and the new year could prove to be a challenging one for apartment operators in certain ways. In 2021 and into the beginning of 2022, demand for apartment rentals approached record levels, which shrunk vacancy rates and increased monthly rents. The rest of the year remained stagnant while other regions saw some decline, but inflation and other economic factors have many apartment communities confronted with labor shortages, and other challenges which can certainly make leasing and operating properties difficult. Against that backdrop, here are some of the technologies and solutions operators should consider for optimizing their success and efficiencies in 2023 and beyond. Tools that allow prospective residents to have a fully digital and contactless leasing experience — During the pandemic, many operators rushed to implement virtual tours, onsite self-guided tours and other solutions that allowed prospects to apply for and finalize their leases remotely. Prospective renters have undoubtedly grown fond of navigating the leasing process from their homes and taking self-guided tours when onsite, and the demand for digital solutions will surely continue even after COVID distancing is no longer a factor. Therefore, apartment owners and operators should think of these capabilities as long-term investments and always seek ways to optimize the digital leasing experience they provide. Along those lines, forward-thinking operators are employing solutions that allow them to embed credit functionality into their websites and mobile apps using modern, RESTful APIs like the Experian ConnectSM API. Not only does it enhance the information included in a lease application with credit report data, but it also allows prospective renters to easily apply for more than one property at once, enhancing their experience at the same time. Automated lease application form fill — By using information entered by a lease applicant (such as first name, last name, postal code and the last four digits of a Social Security number), this technology uses information from credit files to automatically fill other data fields in a lease application. This tool reduces the effort required by prospective renters to complete the application process, resulting in a better user experience, faster completions, greater accuracy and reduced application abandonment. Automated verification of income, assets, and employment — These solutions eliminate the need for associates to manually verify these components of a lease application. Manual verification is both time-consuming and prone to human error. In addition, automated tools eliminate the opportunity for applicants to supply falsified supporting documentation. The best part about verification is the variety of options available; leasing managers can pick and choose verification options that meet their needs. Renter Risk Score™ and custom-built scores and models applying RentBureau data — These options offer a score designed expressly to predict the likelihood that an applicant will pay rent. Renter risk score can be purchased with preset score logic, or for high-volume decisions, a model can be built calibrated for your specific leasing decisioning needs. A rental payment history report — The RentBureau Consumer Profile tool can provide detailed insight into a lease applicant's history of meeting their lease obligations, which is invaluable information during the lease application process. Having a tool to report rental payment histories to credit bureaus can be a powerful financial amenity. By reporting these payments, operators can help residents build credit histories and improve financial well-being. Such an amenity can attract and retain residents and provide them with a powerful incentive to pay rent on time and in full. In the end, tools that seek to manage risk and create improved experiences for prospective renters have a multitude of benefits. They create meaningful efficiencies for onsite staff by greatly reducing the time, resources and paperwork required to process applications and verify applicant information. This gives overextended associates more time to handle their many other responsibilities. Beyond just efficiency savings, these technologies and solutions also can help operators avoid the complications and loss of income that result from evictions. In fact, the National Association of Realtors estimates that average eviction costs $7,685. Managing risk and providing the best possible customer experience should always be top of mind for rental housing operators. And with the solutions outlined above, they can effectively accomplish those goals in 2023 and beyond.

How businesses respond to economic uncertainty can determine whether they get ahead or fall behind. To better prepare for the coming months, you must remain up to date on the latest economic developments to better understand and evolve with changing consumer needs. With insight into critical macroeconomic and consumer trends, you can proactively manage your portfolio, enhance your decisioning and seize new opportunities. Grab a cup of coffee and join Experian's Shawn Rife, Client Executive, and Josee Farmer, Economic Analyst, during our fireside chat on February 16 @ 1 P.M. ET/10 A.M. PT. Our expert speakers will provide a view of the latest economic and market trends, their impact on consumers, and how financial institutions can survive and thrive. Highlights include: Macroeconomic and consumer credit trends Economic implications on consumer behavior How financial institutions can adapt Register now

With fraud expected to surge amid uncertain economic conditions, fraudsters are preparing new deception techniques to outsmart businesses and deceive consumers. To help businesses prepare for the coming fraud threats, we created the 2023 Future of Fraud Forecast. Here are the fraud trends we expect to see over the coming year: Fake texts from the boss: Given the prevalence of remote work, there’ll be a sharp rise in employer text fraud where the “boss” texts the employee to buy gift cards, then asks the employee to email the gift card numbers and codes. Beware of fake job postings and mule schemes: With changing economic conditions, fraudsters will create fake remote job postings, specifically designed to lure consumers into applying for the job and providing private details like a social security number or date of birth on a fake employment application. Frankenstein shoppers spell trouble for retailers: Fraudsters can create online shopper profiles using synthetic identities so that the fake shopper’s legitimacy is created to outsmart retailers’ fraud controls. Social media shopping fraud: Social commerce currently has very few identity verification and fraud detection controls in place, making the retailers that sell on these platforms easy targets for fraudulent purchases. Peer-to-peer payment problems: Fraudsters love peer-to-peer payment methods because they’re an instantaneous and irreversible way to move money, enabling fraudsters to get cash with less work and more profit “As fraudsters become more sophisticated and opportunistic, businesses need to proactively integrate the latest technology, data and advanced analytics to mitigate the growing fraud risk,” said Kathleen Peters, Chief Innovation Officer at Experian Decision Analytics in North America. “Experian is committed to continually innovating and bringing solutions to market that help protect consumers and enable businesses to detect and prevent current and future fraud.” 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 Press Release

Putting customers at the center of your credit marketing strategy is key to achieving higher response rates and building long-term relationships. To do this, financial institutions need fresh and accurate consumer data to inform their decisions. Atlas Credit was looking to achieve higher response rates on its credit marketing campaigns by engaging consumers with timely and personalized offers. The company implemented Experian’s Ascend Marketing, a customer marketing and acquisition engine that provides marketers with accurate and comprehensive consumer credit data to build and deploy intelligent marketing campaigns. With deeper insights into their consumers, Atlas Credit created timely and customized credit offers, resulting in a 185% increase in loan originations within the first year of implementation. Additionally, the company was able to effectively manage and monitor its targeting strategies in one place, leading to improved operational efficiency and lower acquisition costs. To learn more about creating better-targeted marketing campaigns and enhancing your strategies, read the full case study. Download the case study Learn more

Alternative credit scoring has become mainstream. Lenders that use alternative credit scores can find opportunities to expand their lending universe without taking on additional risk and more accurately assess the credit risk of traditionally scoreable consumers. Obtaining a more holistic consumer view can help lenders improve automation and efficiency throughout the customer lifecycle. What is alternative credit scoring? Alternative credit scoring models incorporate alternative credit data* that isn't typically found on consumer credit reports. These scores aren't necessarily trying to predict alternative outcomes. The goal is the same — to understand the likelihood that a borrower will miss payments in the future. What's different is the information (and sometimes the analytical techniques) that inform these predictions.Traditional credit scoring models solely consider information found in consumer credit reports. There's a lot of information there — Experian's consumer credit database has data on over 245 million consumers. But although traditional consumer data can be insightful, it doesn't necessarily give lenders a complete picture of consumers' creditworthiness. Alternative credit scores draw from additional data sources, including: Alternative financial services: Credit data from alternative financial services (AFS) can tell you about consumers' experiences with small-dollar installment loans, single-payment loans, point-of-sale financing, auto title loans and rent-to-own agreements. Buy Now Pay Later: Buy Now Pay Later (BNPL) borrowing is popular with consumers across the scoring spectrum, and lenders can use access to open BNPL loans to better assess consumers' current capacity. Rental payments: Landlords, property managers, collection companies, rent payment services and consumer-permissioned data can give lenders access to consumers' rent payment history. Full-file public records: Credit reports generally only include bankruptcy records from the previous seven to ten years. However, lenders with access to full-file public records can also learn about consumers' property deeds, address history, and professional and occupational licenses. READ: Take a deep dive into Experian's State of Alternative Credit Data report to learn more about the different types of alternative credit data and uses across the loan lifecycle. With open banking, consumers can now easily and securely share access to their banking and brokerage account data — and they're increasingly comfortable doing so. In fact, 70% would likely share their banking data for better loan rates, financial tools or personalized spending insights.Tools like Experian Boost allow consumers to add certain types of positive payment information to their Experian credit reports, including rent, utility and select streaming service payments. Some traditional scores consider these additional data points, and users have seen their FICO Score 8 from Experian boosted by an average of 13 points.1 Experian Go also allows credit invisible consumers to establish a credit report with consumer-permissioned alternative data.  The benefits of using alternative credit data The primary benefit for lenders is access to new borrowers. Alternative credit scores help lenders accurately score more consumers — identifying creditworthy borrowers who might otherwise be automatically denied because they don't qualify for traditional credit scores. The increased access to credit may also align with lenders' financial inclusion goals.Lenders may additionally benefit from a more precise understanding of consumers who are scoreable. When integrated into a credit decisioning platform, the alternative scores could allow lenders to increase automation (and consumers' experiences) without taking on more credit risk. The future of alternative credit scoring Alternative credit scoring might not be an alternative for much longer, and the future looks bright for lenders who can take advantage of increased access to data, advanced analytics and computing power.Continued investment in alternative data sources and machine learning could help bring more consumers into the credit system — breaking barriers and decreasing the cost of basic lending products for millions. At the same time, lenders can further customize offers and automate their operations throughout the customer lifecycle. Partnering with Experian Small and medium-sized lenders may lack the budget or expertise to unlock the potential of alternative data on their own. Instead, lenders can turn to off-the-shelf alternative models that can offer immediate performance lifts without a heavy IT investment.Experian's Lift PlusTM score draws on industry- leading mainstream credit data and FCRA-regulated alternative credit data to provide additional consumer behavior insights. It can score 49% of mainstream credit-invisible consumers and for thin file consumers with a new trade, a 29% lift in scoreable accounts. Learn more about our alternative credit data scoring solutions. Learn more * When we refer to “Alternative Credit Data," this refers to the use of alternative data and its appropriate use in consumer credit lending decisions as regulated by the Fair Credit Reporting Act (FCRA). Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.1Experian (2023). Experian Boost

E-commerce digital transactions are rapidly increasing as online shopping becomes more convenient. In fact, e-commerce is projected to exceed 17% of all retail sales worldwide by 2027. As a result, opportunities for fraudsters to exploit businesses and consumers for monetary gain are reaching high levels. Businesses must be aware of the risks associated with card not present (CNP) fraud and take steps to protect themselves and their customers. What is card not present fraud? CNP fraud occurs when a criminal uses a stolen or compromised credit card to make a purchase online, over the phone, or through some other means where the card is not physically present at the time of the transaction. This type of fraud can be particularly difficult to detect and prevent, as it relies on the use of stolen card information rather than the physical card itself. CNP fraud can yield significant losses for businesses — these attacks are estimated to reach a staggering $28 billion in losses by 2026. Many have adopted various fraud prevention and identity resolution and verification tools to better manage risk and prevent fraud losses. Since much of the success or failure of e-commerce depends on how easy merchants make it for consumers to complete a transaction, incorporating CNP fraud prevention and identity verification tools in the checkout process should not come at the expense of completing transactions for legitimate customers. What do we mean by that? Let’s look at false declines. What is a false decline? False declines occur when legitimate transactions are mistakenly declined due to the business's fraud detection system incorrectly flagging the transaction as potentially fraudulent. This can not only be frustrating for cardholders, but also for merchants. Businesses may lose the sale and also be on the hook for any charges that result from the fraudulent activity. They can also result in damage to the business's reputation with customers. In either case, it is important for businesses to have measures in place to mitigate the risks of both. How can online businesses increase sales without compromising their fraud defense? One way to mitigate the risk of CNP fraud is to implement additional security measures at the time of transaction. This can include requiring additional verification information, such as a CVV code or a billing zip code to further authenticate the card holder’s identity. These measures can help to reduce the risk of CNP fraud by making it more difficult for fraudsters to complete a transaction. Machine learning algorithms can help analyze transaction data and identify patterns indicating fraudulent activity. These algorithms can be trained on historical data to learn what types of transactions are more likely to be fraudulent and then be used to flag potentially fraudulent transactions before it occurs. Businesses require data and technology that raise confidence in a shopper’s identity. Currently, the data merchants receive to approve transactions is not enough. A credit card owner verification solution like Experian Link fills this gap by enabling online businesses to augment their real-time decisions with data that links customer identity to the credit card being presented for payment to help verify the legitimacy of a transaction. Using Experian Link, businesses can link names, addresses and other identity markers to the customer’s credit card. The additional data enables better decisions, increased sales, decreased costs, a better buyer experience and better fraud detection. Get started with Experian Link™ - our frictionless credit card owner verification solution. Learn more

For a credit prescreen marketing campaign to be successful, financial institutions must first define their target audience. But just because you’ve identified your ideal customers, it doesn’t mean that every individual within that group has the same needs, interests or behaviors. As such, you’ll need to use data-driven customer segmentation to create messages and offers that truly resonate. Customer segmentation example Customer segmentation is the practice of dividing your target audience into smaller sub-groups based on shared characteristics, behaviors or preferences. This allows you to develop highly targeted marketing campaigns and engage with individual groups in more relevant and meaningful ways. What role does data play in customer segmentation? When it comes to segmenting customers, there isn’t a one-size-fits-all approach that works perfectly for all campaigns and markets. However, regardless of the campaign, you’ll need accurate and relevant data to inform your segmenting strategy. Let’s walk through a customer segmentation example. Say you want to launch a credit marketing campaign that targets creditworthy consumers in the market for a new mortgage. Some of the most influential data points to consider when segmenting include: Demographics Demographic data allows you to get to know your customers as individuals in terms of age, gender, education, occupation and marital status. If you want to create a segment that consists of only middle-aged consumers, leveraging demographic data makes it easier to identify these individuals, refine your messaging and predict their future buying behaviors. Life stage Life event data, such as new parents and new homeowners, helps you connect with consumers who have experienced a major life event. Because you’re targeting consumers in the market for a new mortgage, using fresh and accurate life stage data can help you create an engaging, event-based marketing campaign relevant to their timeline. Financial Financial data segments go beyond income and estimate the way consumers spend their money. With deeper insights into customers’ financial behaviors, you can more accurately assess creditworthiness and make smarter lending decisions. Transactional Transactional data segments group your customers according to their unique buying habits. By getting to know why they purchase your products or their frequency of spend, you can gain a better understanding of who your most engaged customers are, segment further and find opportunities for cross-sell and upsell. Why is data-driven customer segmentation critical for your business? With data-driven customer segmentation, you can develop relevant marketing campaigns and messages that speak to specific audiences, enabling you to demonstrate your value propositions more clearly and deliver personalized customer experiences. Additionally, because customer segmentation enables you to tailor your marketing efforts to those most likely to respond, you can achieve higher conversions while cutting down on marketing spend and resources. Ready to get started? While data-driven customer segmentation may seem overwhelming, Experian can help fill your marketing gaps with custom-based data, audiences and solutions. Armed with a better understanding of your consumers’ patterns and journeys, you can start targeting them more effectively. Create highly targeted credit marketing campaigns

With an abundance of loan options in today’s market, retaining customers can be challenging for banks and credit unions, especially small or regional institutions. And as more consumers look for personalization and digital tools in their banking experience, the likelihood of switching to institutions that can meet these demands is increasing.1 According to a recent Experian survey, 78% of consumers have conducted personal banking activities online in the last three months. However, 58% of consumers don’t feel that businesses completely meet their expectations for a digital online experience. To remain competitive in today's market, organizations must enhance their prescreen efforts by accelerating their digital transformation. Prescreen in today's economic environment While establishing a strong digital strategy is crucial to meeting the demands of today’s consumers, economic conditions are continuing to change, causing many financial institutions to either tighten their marketing budgets or hold off on their prescreen efforts completely. Fortunately, lenders can still drive growth during a changing economy without having to make huge cuts to their marketing budgets. How? The answer lies in digital prescreen. Case study: Uncover hidden growth opportunities Wanting to grow their business and existing relationships, Clear Mountain Bank looked for a solution that could help them engage customers with money-saving product offers while delivering a best-in-class digital banking experience. Leveraging Digital Prescreen with Micronotes, the bank was able to identify and present dollarized savings to customers who held higher-priced loans with other lenders. What’s more, the bank extended these offers through personalized conversations within their online and mobile banking platforms, resulting in improved digital engagement and increased customer satisfaction. By delivering competitive prescreen offers digitally, Clear Mountain Bank generated more than $1 million in incremental loans and provided customers with an average of $1,615 in cost savings within the first two months of deployment. “Digital Prescreen with Micronotes supplied the infrastructure to create higher-quality, personalized offers, as well as the delivery and reporting. They made prescreen marketing a reality for us.” – Robert Flockvich, Director of Community Outreach and Retail Lending at Clear Mountain Bank To learn more about how you can grow your portfolio and customer relationships, read the full case study or visit us. Download the case study Visit us 1The Keys to Solving Banking’s Customer Loyalty & Retention Problems, The Financial Brand, 2022.

Financial institutions have gone through a whirlwind in the last few years, with the pandemic forcing many to undergo digital transformations. More recently, rising interest rates and economic uncertainty are leading to a pullback, highlighting the need for lenders to level up their marketing strategies to win new customers. To get started, here are a few key trends to look out for in the new year and fresh marketing ideas for lenders. Challenges and consumers expectations in 2023 It might be cliche to mention the impact that the pandemic had on digital transformations — but that doesn't make it any less true. Consumers now expect a straightforward online experience. And while they may be willing to endure a slightly more manual process for certain purchases in their life, that's not always necessary. Lenders are investing in front-end platforms and behind-the-scenes technology to offer borrowers faster and more intuitive services. For example, A McKinsey report from December 2021 highlighted the growth in nonbank mortgage lenders. It suggested nonbank lenders could hold onto and may continue taking market share as these tech-focused lenders create convenient, fast and transparent processes for borrowers.2 Marketers can take these new expectations to heart when discussing their products and services. To the extent you have one in place, highlight the digital experience that you can offer borrowers throughout the application, verifications, closing and loan servicing. You can also try to show rather than tell with interactive online content and videos. Build a data-driven mortgage lending marketing strategy The McKinsey report also highlighted a trend in major bank and nonbank lenders investing in proprietary and third-party technology and data to improve the customer experience.2 Marketers can similarly turn to a data-driven credit marketing strategy to help navigate shifting lending environments. Segment prospects with multidimensional data Successful marketers can incorporate the latest technological and multidimensional data sources to find, track and reach high-value prospects. By combining traditional credit data with marketing data and Fair Credit Report Act-compliant alternative credit data* (or expanded FCRA-regulated data), you can increase the likelihood of connecting with consumers who meet your credit criteria and will likely respond. For example, Experian's mortgage-specific In the Market Models predict a consumer's propensity to open a new mortgage within a one to four-month period based on various inputs, including trended credit data and Premier Attributes. You can use these propensity models as part of your prescreen criteria, to cross-sell current customers and to help retain customers who might be considering a new lender. But propensity models are only part of the equation, especially when you're trying to extend your marketing budget with hyper-segmented campaigns. Incorporating your internal CRM data and non-FCRA data can help you further distinguish look-alike populations and help you customize your messaging. LEARN MORE: Use this checklist to find and fix gaps in your prospecting strategy Maintain a single view of your borrowers An identity management platform can give you a single view of a consumer as they move through the customer journey. The persistent identity can also help you consistently reach consumers in a post-cookie world and contact them using their preferred channel. You can add to the persistent identity as you learn more about your prospects. However, you need to maintain data accuracy and integrity if you want to get a good ROI. Use triggers to guide your outreach You can also use data-backed credit triggers to implement your marketing plan. Experian's Prospect Triggers actively monitors a nationwide database to identify credit-active consumers who have new tradelines, inquiries or a loan nearing term. Lenders using Prospect Triggers can receive real-time or periodic updates and customize the results based on their screening strategy and criteria, such as score ranges and attributes. They can then make firm credit offers to the prospects who are most likely to respond, which can improve cross-selling opportunities along with originations. Benefit from our expertise Forward-thinking lenders should power their marketing strategies with a data-backed approach to incorporate the latest information from internal and external sources and reach the right customer at the right time and place. From list building to identity management and verification, you can turn to Experian to access the latest data and analytics tools. Learn about Experian credit prescreen and marketing solutions. Explore our credit prescreen solutions Learn about our marketing solutions 1Mortgage Bankers Association (October 2022). Mortgage Applications Decrease in Latest MBA Weekly Survey 2McKinsey & Company (2021). Five trends reshaping the US home mortgage industry