Market Trends

There's no magic solution to undoing the decades of policies and prejudices that have kept certain communities unable to fully access our financial and credit systems. But you can take steps to address previous wrongs, increase financial inclusion and help underserved communities. If you want to engage consumers and keep them engaged, you could start with the following four areas of focus. 1. Find ways to build trust Historical practices and continued discriminatory behavior have created justifiable distrust of financial institutions among some consumers. In February 2022, Experian surveyed more than 1,000 consumers to better understand the needs and barriers of underserved communities. The respondents came from varying incomes, ethnicity and age ranges. Fewer than half of all the consumers (47 percent) said they trusted their bank's personal finance advice and information, and that dropped to 41 percent among Black Americans. In a follow-up webinar discussion of financial growth opportunities that benefitted underserved communities, we found that many financial institutions saw a connection between their financial inclusion efforts and building trust with customers and communities. Here is a sample question and a breakdown of the primary responses: What do you think is the greatest business advantage of executing financial inclusion in your financial institution or business?1 Building trust and retention with customers and communities (78%) Increasing revenue by expanding to new markets (6%) Enhancing our brand and commitment to DEI (14%) Staying in alignment with regulator and compliance guidelines (2%) Organizations may want to approach financial inclusion in different ways depending on their unique histories and communities. But setting quantifiable goals and creating a roadmap for your efforts is a good place to start. 2. Highlight data privacy and mobile access If you want to win over new customers, you'll need to address their most pressing needs and desires. Consumers' top four considerations when signing up for a new account were consistent, but the specific results varied by race. Keep this in mind as you consider messaging around the security and privacy measures. Also, consider how underserved communities might access your online services. Having an accessible and intuitive mobile app or mobile-friendly website is important and likely carries even more weight with these groups. According to the Pew Research Center, as of 2021, around a quarter of Hispanic/Latino and 17% of Black Americans are smartphone-dependent — meaning they have a smartphone but don't have broadband access at home. Low-income and minority communities are also less likely to live near bank branches or ATMs. 3. Offer lower rates and fees Low rates and fees are also a top priority across the board — everyone likes to save money. However, fewer Black and Hispanic households have $1,000 in savings or more compared to white households, which could make additional savings opportunities especially important. There have been several recent examples of large banks and credit unions eliminating overdraft fees. And the Bank On National Account Standards can be a helpful framework if you offer demand deposit accounts. Lowering interest rates on credit products can be more challenging, particularly when consumers don't have a thick (or any) credit file. But by integrating expanded FCRA-regulated data sources and new scoring models, such as Experian's Lift PremiumTM, creditors can score more applicants and potentially offer them more favorable terms. 4. Leverage credit education tools and messaging For consumers who've had negative credit experiences, are new to credit, or are recent immigrants with little understanding of the U.S. credit system, building and using credit can feel daunting. About 80% of women have little or no confidence in getting approved for credit or worry that applying could hurt them further. Only 20% of consumers who make less than $35,000 a year say they're "extremely" or "very" confident they'll be approved for credit. While most consumers haven't used credit education tools before, they're willing to try. More than 60 percent of Black and Hispanic respondents said they're likely to sign up for free credit education tools and resources from their banks. Offering these tools could be an opportunity to strengthen trust and help consumers build credit, which can also make it easier for them to qualify for financial products and services in the future. Moving forward with financial inclusion Broadening access to credit can be an important part of financial inclusion, and financial institutions can grow by expanding outreach to underserved communities. However, the relationship must be built on trust, security, and offerings that meet these consumers' needs. Through our Inclusion Forward™ initiative, Experian can support your financial inclusion goals — helping you empower underserved communities by helping them grow their financial futures. Learn more about Experian financial inclusion solutions and financial inclusion tools.

Mortgage lenders are no stranger to income and employment verification. Leveraging a third-party solution provider for automated verifications is a standard practice in mortgage underwriting. Yet many lenders still struggle with time-consuming and complex verification experiences, which can be manual, inefficient and painful for borrowers. Since introducing Experian Verify™ to the market, we’ve had countless conversations with key players in the industry – from the largest banks to small independent mortgage brokers and everything in between. Through these conversations, we’ve learned quite a bit about some of the dos and don’ts when it comes to implementing a successful strategy for income and employment verification for mortgage. Lead with instant verification Digital transformation has forever changed borrower expectations for online experiences. The first key to a successful verification strategy is starting your workflow with an instant verification solution. This allows you to verify information in real time, delivering a completely frictionless experience for you and your borrowers. Consider building a waterfall process For instances when a borrower’s income and employment information is unable to be verified through an instant verification solution, add a consumer-permissioned (bank or payroll) option as a backup. Cascading from one digital solution to the next will ensure you can verify borrower information in seconds or minutes, as opposed to days or weeks. The goal is to prevent as many borrowers as possible from going through a costly manual process. Tap into unique data sources Many verification solutions in market today tap into the same data sources, which can make it difficult to differentiate between solutions and measure additive benefits. When evaluating options, look for verification solutions that leverage unique and exclusive data sources – allowing you to optimize hit rates and maximize value. Avoid a “one-size-fits-all” approach There is no silver bullet. Every market is unique and every lender has different needs. Your verification requirements are likely specific to your business, which means you need to leverage verification solutions that offer flexible options and enable you to build a verification experience that works best for you and your borrowers. Find a solution provider who’s all in It’s important to find a solution provider where income and employment verification isn’t just a “side hustle,” but is core to their business strategy. Find a provider who is fully committed – delivering new innovations, investing in key partnerships, maximizing accessibility through leading LOS / POS technology providers, and offers eligibility for key industry programs, such as Day 1 Certainty® from Fannie Mae. Challenge the status quo Many lenders have an existing relationship with a third-party solution provider. But it’s important not to put all your eggs in one basket. If your existing provider is not meeting all your needs, challenge the status quo. Consider adding a second provider to the top of your waterfall to help contain costs and tap into unique data that is not available from your existing provider. Ready for further insight? Learn more about income and employment verification for mortgage.

To drive profitable growth and customer retention in today’s highly competitive landscape, businesses must create long-term value for consumers, starting with their initial engagement. A successful onboarding experience would encourage 46% of consumers1 to increase their investments in a product or service. While many organizations have embraced digital transformation to meet evolving consumer demands, a truly exceptional onboarding experience requires a flexible, data-driven solution that ensures each step of customer acquisition in financial services is as quick, seamless, and cohesive as possible. Otherwise, financial institutions may risk losing potential customers to competitors that can offer a better experience. Here are some of the benefits of implementing a flexible, data-driven decisioning platform: Greater efficiency From processing a consumer’s application to verifying their identity, lenders have historically completed these tasks manually, which can add days, if not weeks, to the onboarding process. Not only does this negatively impact the customer experience, but it also takes resources away from other meaningful work. An agile decisioning platform can automate these tedious tasks and accelerate the customer onboarding process, leading to increased efficiency, improved productivity, and lower acquisition costs2. Reduced fraud and risk Onboarding customers quickly is just as important as ensuring fraudsters are stopped early in the process, especially with the rise of cybercrime. However, only 23% of consumers are very confident that companies are taking steps to secure them online. With a layered digital identity verification solution, financial institutions can validate and verify an applicant’s personal information in real time to identify legitimate customers, mitigate fraud, and pursue growth confidently. Increased acceptance rates Today’s consumers demand instant responses and easy experiences when engaging with businesses, and their expectations around onboarding are no different. Traditional processes that take longer and require heavy documentation, greater amounts of information, and continuous back and forth between parties often result in significant customer dropout. In fact, 40% of digital banking consumers3 abandon opening an account online due to lengthy applications. With a flexible solution powered by real-time data and cutting-edge technology, financial institutions can reduce this friction and drive credit decisions faster, leading to more approvals, improved profitability, and higher customer satisfaction. Having a proper customer onboarding strategy in place is crucial to achieving higher acceptance and retention rates. To learn about how Experian can help you optimize your customer acquisition strategy, visit us and be sure to check out our latest infographic. View infographic Visit us 1 The Manifest, Customer Onboarding Strategy: A Guide to Retain Customers, April 2021. 2 Deloitte, Inside magazine issue 16, 2017. 3 The Financial Brand, How Banks Can Increase Their New Loan Business 100%, 2021.

Experian recently attended Fintech Nexus USA, formally known as LendIt Fintech USA, the leading event for innovation in financial services. The event was held at the Javits Center in New York City on May 25-26. This year’s event housed over 4,000 attendees, 350 speakers and 225 sponsors. Experian was a proud platinum sponsor and participated in two expert sessions. Day one Gasan Awad, Product Management Vice President for Experian Fraud and Analytics, led the session, “Frictionless Fraud Prevention: Fintech’s Balancing Act.” Gasan was joined by Ibo Dusi, Chief Risk Officer for Revolut, and Ashish Gupta, Chief Risk Officer for LendingPoint, to discuss the growing fraud landscape. “ Fraud is not slowing down; it is getting more complex as customers continue to grow their online and digital usage.” Gasan Award There has been $56 billion in identity fraud losses since 2020, $13 billion stemmed from traditional identity fraud and $43 billion from identity fraud scams. 53% of consumers say security is the most important aspect of their online experience. During the session, our experts delved into important questions, including: What fraud and identity-proofing strategies should you consider to prevent sophisticated attacks and balance ease of interactions? How do you detect fraudsters without disrupting the customer experience? Want more insight? Access the discussion here. Learn more about how Experian supports fintechs by visiting our fintech resources page, and how we’re helping businesses of all types stay guarded against fraud with our fraud prevention solutions. Day two Greg Wright, Executive Vice President and Chief Product Officer for Experian, joined Afterpay, Sunbit and Jifiti in the session, “Reconciling Responsible Buy Now Pay Later (BNPL) with the Need for Access.”   BNPL industry fast facts: Last year in the U.S., 45 million Americans used BNPL. The number of U.S. users has grown 300% since 2018. Spending in the U.S. was $20.8B in 2021 and is forecasted to grow globally to $1T by 2025. Real-time data is critical for the BNPL industry. Greg provided insight into what Experian is doing to incorporate BNPL data into the lending ecosystem. Through The Buy Now Pay Later Bureau™, Experian plans to bring transparency to the BNPL and financial services industries. We are currently working with large BNPLs to support data furnishing of BNPL tradelines to the new bureau.     “We figured out a way to work with the BNPL clients to bring BNPL data into the lending ecosystem to where it does not have an immediate impact on your credit score just because you chose to use a BNPL option rather than a credit card,” said Greg Wright.      Typical lending risk models limit the accessibility of financing, but the nature of BNPL dictates that merchants and consumers need instant decision-making. Experian's response to the BNPL finance method is a consumer-friendly solution that supports end-to-end credit risk insights and point-of-sale financing solutions that do not fit into mainstream credit processes and aren’t adequately handled by traditional credit scores. This one-of-a-kind specialty bureau allows consumers to benefit from successful repayment behaviors and lenders of all types to drive more inclusive and responsible practices. Additionally, Experian has plans to make BNPL data visible on the core consumer credit profile. Ready to learn more? Access the discussion here. Discover how you can bring transparency to the industry with The Buy Now Pay Later Bureau and power innovative fintech lending solutions. Fintech resources The Buy Now Pay Later Bureau

These days, the call for financial inclusion is being answered by a disruptive force of new financial products and services. From fintech to storied institutional players, we're seeing a variety of offerings that are increasingly accessible and affordable for consumers. It's a step in the right direction. And beyond the moral imperative, companies that meet the call are finding that financial inclusion can be a source of business growth and a necessity for staying relevant in a competitive marketplace. A diaspora of credit-invisible consumers To start, let's put the problem in context. A 2022 Oliver Wyman report found about 19 percent of the adult population is either credit invisible (has no credit file) or unscoreable (not enough credit information to be scoreable by conventional credit scoring models). But some communities are disproportionately impacted by this reality. Specifically, the report found: Black Americans are 1.8 times more likely to be credit invisible or unscoreable than white Americans. Recent immigrants may have trouble accessing credit in the U.S., even if they're creditworthy in their home country. About 40 percent of credit invisibles are under 25 years old. In low-income neighborhoods, nearly 30 percent of adults are credit invisible and an additional 16 percent are unscoreable. Younger and older Americans alike may shy away from credit products because of negative experiences and distrust of creditors. Similarly, the Federal Deposit Insurance Corporation (FDIC) reports that an estimated 5.4 percent (approximately 7.1 million) households, were unbanked in 2019 — often because they can't meet minimum balance requirements or don't trust banks. Credit invisibles and unscoreables may prefer to deal in a cash economy and turn to alternative credit and banking products, such as payday loans, prepaid cards, and check-cashing services. But these products can perpetuate negative spirals. High fees and interest can create a vicious cycle of spending money to access money, and the products don't help the consumers build credit. In turn, the lack of credit keeps the consumers from utilizing less expensive, mainstream financial products. The emergence of new players Recently, we've seen explosive growth in fintech — technology that aims to improve and automate the delivery and use of financial services. According to market research firm IDC, fintech is expected to achieve a compound annual growth rate (CAGR) of 25 percent through 2022, reaching a market value of $309 billion. It's reaching mass adoption by consumers: Plaid® reports that 88 percent of U.S. consumers use fintech apps or services (up from 58 percent in 2020), and 76 percent of consumers consider the ability to connect bank accounts to apps and services a top priority. Some of these new products and services are aimed at helping consumers get easier and less expensive access to traditional forms of credit. Others are creating alternative options for consumers. Free credit-building tools. Experian Go™ lets credit invisibles quickly and easily establish their credit history. Likewise, consumers can use Experian Boost™ to build their credit with non-traditional payments, including their existing phone, utility and streaming services bills. Alternative credit-building products. Chime® and Varo® , two neobanks, offer credit builder cards that are secured by a bank account that customers can easily add or withdraw money from. Mission Asset Fund, a nonprofit focused on helping immigrants, offers a fee- and interest-free credit builder loan through its lending circle program. Cash-flow underwriting. Credit card issuers and lenders, including Petal and Upstart, are using cash-flow underwriting for their consumer products. Buy now, pay later. Several Buy Now Pay Later (BNPL) providers make it easy for consumers to pay off a purchase over time without a credit check. Behind the scenes, it's easier than ever to access alternative credit data1 — or expanded Fair Credit Reporting Act (FCRA)-regulated data — which includes rental payments, small-dollar loans and consumer-permissioned data. And there are new services that can help turn the raw data into a valuable resource. For example, Lift PremiumTM uses multiple sources of expanded FCRA-regulated data to score 96 percent of American adults — compared to the 81 percent that conventional scoring models can score with traditional credit data. While we dig deeper to help credit invisibles, we're also finding that the insights from previously unreported transactions and behavior can offer a performance lift when applied to near-prime and prime consumers. It truly can be a win-win for consumers and creditors alike. Final word There's still a lot of work to be done to close wealth gaps and create a more inclusive financial system. But it's clear that consumers want to participate in a credit economy and are looking for opportunities to demonstrate their creditworthiness. Businesses that fail to respond to the call for more inclusive tools and practices may find themselves falling behind. Many companies are already using or planning to use alternative data, advanced analytics, machine learning, and AI in their credit-decisioning. Consider how you can similarly use these advancements to help others break out of negative cycles. 1When 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. Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.

Last month my blog discussed how Building the Perfect Audience is Like Building the Perfect Burger! It was National Hamburger Month, so it seemed apropos! We offered marketers insight into building better audiences to help run more strategic marketing campaigns. This month, I am keeping with the monthly ‘holiday’ theme. June 20th was National American Eagle Day and being so close to our 4th of July holiday, I thought this was a perfect tie-in this month! You are probably wondering how I am going to tie in National American Eagle Day with another marketing strategy, but I promise you, I can! It’s all about having strategic insight into your customers and using an “eagle eye” to learn what you can about them to obtain better results from your marketing efforts. An eagle's-eye approach to finding and reaching the right consumers Here are a few fun facts about the great American Bald Eagle. Bald Eagles were placed at the center of the Great Seal of the United States in 1782! “Bald” in Bald Eagle refers to an old English word that means “white-headed.” We’ve all heard people talk about having an “eagle eye.” It’s true—this comes from the eagle’s astonishing eyesight. Eagles can see clearly and about eight times as far as humans can, allowing them to spot and focus on a rabbit or other prey at a distance of about two miles. Can you imagine? They can also look ahead and to the side simultaneously with a 340-degree visual field! Imagine if you had an eagle-eye, 340-degree view of your customers or prospects before running a marketing campaign. Well, you can. Experian data insights offers an eagle-eye approach to finding and reaching the right consumers at the right time in the buying journey to help you eliminate marketing waste and deliver a more significant return on your marketing spend. Understanding your customers is key With Experian’s Insights solution, as part of our comprehensive Experian Marketing Engine, we offer OEM marketers, agencies, and larger dealer groups access to multiple Insight categories to learn more about your customers. Understanding your current customers or the segment of prospects you would like to target allows for a more strategic approach to marketing campaigns. Our brand, model, registration, title, finance, market analysis, lifestyle, and household insights can help you take a 360-degree view of your customer (that's right, 360 degrees, 20 degrees more than an eagles eye!) There’s a lot of discuss here, so we’ve put together a complimentary resource, Understand Your Customer Before Choosing Your Audience that explains all the ways you can use Insights to learn more about your customers. What is the Experian Marketing Engine? Insights is part of the Experian Marketing Engine marketing solution that helps automotive marketers, manufacturers, advertisers, agencies, and platforms identify the right audience, uncover the most appropriate communication channels, develop messages that resonate, and measure the effectiveness of marketing activities.

Credit reports and conventional credit scores give lenders a strong starting point for evaluating applicants and managing risk. But today's competitive environment often requires deeper insights, such as credit attributes. Experian develops industry-leading credit attributes and models using traditional methods, as well as the latest techniques in machine learning, advanced analytics and alternative credit data — or expanded Fair Credit Reporting Act (FCRA)-regulated data)1 to unlock valuable consumer spending and payment information so businesses can drive better outcomes, optimize risk management and better serve consumers READ MORE: Using Alternative Credit Data for Credit Underwriting Turning credit data into digestible credit attributes Lenders rely on credit attributes — specific characteristics or variables based on the underlying data — to better understand the potentially overwhelming flow of data from traditional and non-traditional sources. However, choosing, testing, monitoring, maintaining and updating attributes can be a time- and resource-intensive process. Experian has over 45 years of experience with data analytics, modeling and helping clients develop and manage credit attributes and risk management. Currently, we offer over 4,500 attributes to lenders, including core attributes and subsets for specific industries. These are continually monitored, and new attributes are released based on consumer trends and regulatory requirements. Lenders can use these credit attributes to develop precise and explainable scoring models and strategies. As a result, they can more consistently identify qualified prospects that might otherwise be missed, set initial limits, manage credit lines, improve loyalty by applying appropriate treatments and limit credit losses. Using expanded credit data effectively Leveraging credit attributes is critical for portfolio growth, and businesses can use their expanding access to credit data and insights to improve their credit decisioning. A few examples: Spot trends in consumer behavior: Going beyond a snapshot of a credit report, Trended 3DTM attributes reveal and make it easier to understand customers' behavioral patterns. Use these insights to determine when a customer will likely revolve, transact, transfer a balance or fall into distress. Dig deeper into credit data: Making sense of vast amounts of credit report data can be difficult, but Premier AttributesSM  aggregates and summarizes findings. Lenders use the 2,100-plus attributes to segment populations and define policy rules. From prospecting to collections, businesses can save time and make more informed decisions across the customer lifecycle. Get a clear and complete picture: Businesses may be able to more accurately assess and approve applicants, simply by incorporating attributes overlooked by traditional credit bureau reports into their decisioning process. Clear View AttributesTM uses data from the largest alternative financial services specialty bureau, Clarity Services, to show how customers have used non-traditional lenders, including auto title lenders, rent-to-own and small-dollar credit lenders. The additional credit attributes and analysis help lenders make more strategic approval and credit limit decisions, leading to increased customer loyalty, reduced risk and business growth. Additionally, many organizations find that using credit attributes and customized strategies can be important for measuring and reaching financial inclusion goals. Many consumers have a thin credit file (fewer than five credit accounts), don’t have a credit file or don’t have information for conventional scoring models to score them. Expanded credit data and attributes can help lenders accurately evaluate many of these consumers and remove barriers that keep them from accessing mainstream financial services. There's no time to wait Businesses can expand their customer base while reducing risk by looking beyond traditional credit bureau data and scores. Download our latest e-book on credit attributes to learn more about what Experian offers and how we can help you stay ahead of the competition.  Download e-book  Learn more 1When 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. Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.

We are thrilled to introduce a new quarterly series, Automotive Consumer Trends & Analysis. For years, Experian has been delivering automotive insights in our State of the Automotive Finance Market and Automotive Market and Registration Trends quarterly presentations. We are now bringing similar insights and analyses to the automotive consumer market. At Experian, we understand that marketers need to have a deep understanding of consumers in order to develop targeted, effective marketing strategies. Whether you are an OEM marketer, an agency or large dealer group our presentations will transform complex market data into actionable insights that you can begin using immediately. Learn more about vehicle segments and consumers Would you like to understand which people are buying what vehicles with a clear view of what these consumers look like? The Automotive Consumer Trends & Analysis presentations will provide updated quarterly insights on specific vehicle segments and the associated consumers within that segment. We’ll answer questions like: How many vehicles are on the road? Where are they located? How have recent registrations shifted the geographic distribution? Which manufacturers are selling those vehicles? Who is taking market share from whom? Who are the consumers who registered those vehicles? What are the demographic and psychographic insights for those consumers? We’ll also cover industry news and provide a special market analysis Inaugural Presentation! Release Date: June 23rd Segment: Crossover Utility Vehicles (CUV) You’ll leave the presentation with insights you need to make more strategic marketing decisions and better connect with consumers. Register now for the Automotive Consumer Trends & Analysis quarterly series. Once you register, you’ll receive an email when the presentation has been released.

With used vehicle sales up 13% from 2020 to 2021, and auction volumes at historic lows, obtaining vehicles directly from consumers offers an opportunity for dealers to maintain a profitable sales pipeline. The key for dealers is to understand how their sales stack up against other local dealers — and more specifically, what types of vehicles those competitive dealers are selling. Dealers should take advantage of market visibility Experian’s marketing solution, the Automotive Intelligence Engine (AIE), offers dealers market visibility of pre-owned sales trends and recommends marketing strategies to help acquire used vehicle inventory. AIE provides specific strategies to help dealers acquire the most desired units and reach/resonate with consumers who are most likely to bring those units in on trade. Dealers can view: Who owns desirable vehicles the dealer would like to purchase Strategies to acquire and sell used units Sales trends such as segment, class, model, make and model Financing trends such as credit score, term, and lender Audience makeup: demographic and psychographic characteristics, who owns what type of vehicle, and where they live. By understanding the used owner, dealers can use messaging that resonates to help upsell them into a newer vehicle they desire—helping dealers stay competitive in today’s market. Dealers should also look at lending trends Exploring the world of used vehicle sales should also extend into lending trends. Since used vehicles are not included in OEM lending incentives, understanding trends helps dealers make more informed decisions. Used vehicles can qualify for special OEM sponsored CPO financing. With AIE, dealers have visibility into the amount financeable percentages, APR trends, terms, and tiers for lenders within their market. This benefits dealers to know which lenders are covering more significant percentages like 140% of NADA and what lenders are covering lower credit tiers. Knowing options on the lending side of the transaction empowers dealers to expand their financing options to work with lenders who facilitate lower credit scores or cover higher percentages. Learn how Experian’s Automotive Intelligence Engine can help you make more informed decisions about used car inventory acquisition. You may also be interested in reading more about audience segmentation and AIE in our blog, Data-Driven Audience Segmentation Empowers More Effective Omnichannel Marketing. 1US Used Car Market Finishes Strong in 2021: What's Up for 2022? | Nasdaq

Experian’s latest Global Insights Report found that more than half of consumers have increased their online spending in the last three months, and 50% say it will increase in the next three months. Life online is here to stay, and consumer expectations have shifted, giving businesses and opportunity to sink or swim when building trust and gaining loyalty. This spring, Experian surveyed 6,000 consumers and 2,000 businesses across all industries to learn more about how, why, and where consumers are interacting with businesses online. Our research found that: Experience is top of mind, with 81% of consumers saying that a positive online experience makes them think more highly of a brand Digital payment options are on the rise with 62% of consumers using mobile wallets and 57% considering buy now, pay later as a replacement for their credit card Security is still a big factor, but 73% of consumers say the onus is on businesses to protect them online Download the report to get all the latest insights into consumer sentiment and how recent changes are impacting business priorities and investments. Download the report

It's one thing to make a corporate commitment to financial inclusion, but quite another to set specific goals and measure outcomes. What goals should lenders set to make financial inclusion a reality? How can success be quantified? What actionable steps must be taken to put policy into practice? The road to financial inclusion may feel long, but this step-by-step checklist can help you measure diversity and achieve goals to become more inclusive as an organization. Step 1: Set quantifiable goals with realistic outcomes Start by defining what you plan to achieve with a financial inclusion strategy. When setting goals, Alpa Lally, Experian's Vice President of Data Business at Consumer Information Services, recommends organizations "assess the strategic opportunity at the enterprise level." "It is important that KPIs are aligned across each business unit and functional groups in order to understand the investment opportunity and what the business must achieve together," said Lally. "The key focus here is 'together', the path to financial inclusion is a journey for all groups and everyone must participate, be committed and be aligned to be successful." Figuring out your short- and long-term goals should be the first step to kickstarting a financial inclusion strategy. But equally important is driving towards outcomes. For instance, if the goal is to increase the number of loans made to previously overlooked or excluded consumers, you may want to start by examining your declination population to better understand who is being left out. Or if financial inclusion is tied to a wider strategy or vision on corporate social responsibility, your goals may include an education component, community outreach, and a re-examination of your hiring practices. No matter what KPIs you're using, here are relevant questions to ask in four key areas – which will help draw out your organizational goals and priorities: Organizational awareness: What action is your organization taking to enhance Diversity, Equity and Inclusion and embrace Corporate Social Responsibility (CSR) around financial inclusion? If you already have financial inclusion programs in place, what are the primary goals? Barriers: What barriers prevent the organization from pursuing equity, diversity and inclusion programs? Education: How do you create awareness and education around financial inclusion? Which community or third-party organizations can help you reach consumers who aren't aware of ways to access financial services? Markers of success: What benchmarks will your organization use to measure and analyze success? Step 2: Do a financial inclusion audit Before developing and implementing a robust financial inclusion program, Lally recommends conducting a financial inclusion audit – which is a "detailed assessment of where you are today, relative to the goals and results you've outlined". In a nutshell, it allows you to assess your current systems and results within your financial institution. According to Lally, a financial inclusion audit should address the following key areas: Roadmap: What are your strategic priorities and how will financial inclusion fit within them? Tracking: Track the actual volume and distribution of different underserved populations (e.g., young adults, low-income communities, immigrants, etc.) within your book of business. Look at the applications and the approval rates by segment. In addition, assess the interest rates these consumers are offered by credit score bands for each group: “Benchmarking is critical. Understanding how they compare to national averages? How do they compare to the rest of your portfolio?" said Lally. Hiring practices: Is diversity, equity and inclusion (DEI) central to your talent management strategy? Is there a link between a lack of DEI in hiring practices and the level of financial inclusion within an organization? Affordability and access: Determine if the products and services you offer are easily accessible, can be understood by a reasonable consumer and are affordable to a broad base. Internal practices: What policies exist that influence the culture and behavior of employees around financial inclusion? Partnerships: Identify outside organizations that can help you develop financial literacy programs to promote financial inclusion. Advertising: Does your advertising promote equal and diverse representation across a wide range of consumer groups? Tools to measure: Are you financially inclusive as a company? How can you improve? The Bayesian Improved Surname Geocoding (BISG) method used by the Consumer Financial Protection Bureau (CFPB) predicts the probability of an individual's race and ethnicity based on demographic information associated with the consumer's surname. Lenders can use this type of information to conduct internal audits or set benchmarks to help ensure accountability in their diversity goals. Step 3: Tap into technology New technology is emerging that gives lenders powerful tools to evaluate a wider pool of prospective borrowers while also mitigating risk. For instance, scoring models that incorporate expanded FCRA-regulated data provide greater insight into 'credit invisible' or 'unscorable' consumers because they look at a wider set of data assets (or 'alternative data'), which allows lenders to assess a larger pool of applicants. It also improves the accuracy of those scores and better assesses the creditworthiness of consumers. Consider these resources, among others: Lift Premium™: Experian estimates that lenders using Lift Premium™ can score 96 percent of U.S. adults, a vast improvement over the 81 percent that are scorable today with conventional scores relying on mainstream data. Such enhanced scores would enable six million consumers who are considered subprime today to qualify for “mainstream" (prime or near-prime) credit. Experian® RentBureau®: RentBureau collects rent payment data from landlords and management companies, which allows consumers to leverage positive rent payment history similarly to how consumers leverage consistent mortgage payments. Clarity Credit Data: Clarity Credit Data allows lenders to see how consumers use alternative financial products and examine payment behaviors that might exist outside of the traditional credit report. Clarity's expanded FCRA -regulated data provides a deeper view of the consumer, allowing lenders to identify those who may not have previously been classified as "at risk" and approve consumers that may have previously been denied using a traditional credit score. Income Verification: Consumers can grant access to their bank accounts so lenders can assess their ability to pay based on verified income and cash flow. In addition, artificial intelligence (AI) and greater automation can reduce operational costs for lenders, while increasing the affordability of financial products and services for customers. AI and machine learning (ML) can also improve risk profiling and credit decisioning by filling in some of the gaps where credit history is not available. These are just a few examples of a wide range of cutting-edge solutions and technologies that enable lenders to promote greater financial inclusion through their decisioning processes. As new solutions are introduced to the market, it is imperative that lenders look into these technologies to help grow their business. Step 4: Monitor and measure Measuring your progress on financial inclusion isn't a one-and-done proposition. After you've set your goals and created a roadmap, it's important to continue monitoring and measuring your progress. That means your performance to gauge the impact of financial inclusion at both the community and business levels. Lally recommends the following examples: Compare your lending pool to the latest population data from the United States census. Is your portfolio representative of the U.S. population or are there segments that should have greater access? How does it compare against other lenders competing in the same space? Keep in mind that it has been widely reported that certain populations were undercounted, so you may want to factor this reality into your assessments. Work to understand how traditionally underserved consumers are performing in terms of their payment behaviors, purchase patterns and delinquencies. Measure the impact of financial inclusion on your company's overall revenue growth, ROI and brand reputation. Conduct an analysis to better understand your company's brand reputation, how it's perceived across different groups and what your customers are saying. Last word Financial inclusion represents a big step towards closing the wealth gap and helping marginalized communities build generational wealth. Given the prevalence of socioeconomic and racial inequality in our country today, it's a complex issue that disproportionately impacts marginalized groups, such as consumers of color, low-income communities and immigrants. Adopting more financially inclusive practices can help improve access to credit for these groups. For financial institutions and lenders, the first step is to identify realistic, quantifiable goals. A successful financial inclusion initiative also hinges on completing a financial inclusion audit, tapping into the right technology and continually monitoring and measuring progress. "It is paramount that financial institutions hold themselves accountable and demonstrate their commitment to make these practices a part of their DNA." - Alpa Lally. Learn more

“Disruption has caused enormous amounts of innovation,” said Jennifer Schulz, CEO of Experian, North America. “We must continue to be the disruptors in our industry which takes effort, data, technology, bright minds and vision for what the future will be.” Schulz kicked off the 39th Vision conference with a future-focused keynote delivered to a crowd of more than 400 attendees. Alex Lintner, Group President, Experian Consumer Information Services, talked about the next phase of great, highlighting the digital transformation that has taken place in the generations of the past and the disruption and innovation happening today and in the future. Keynote speaker: Dr. Mohamed A. El-Erian Dr. Mohamed A. El-Erian, renowned economist and author, President of Queens’ College, Cambridge, Chief Economic Advisor at Allianz, Chair of President Obama’s Global Development Council and Former CEO and Co-Chief Investment Officer of PIMCO, spoke about the Fed, inflation, negative interest rates and the labor market, as well as the importance of inclusion. El-Erian, who said he reads the Financial Times religiously, acknowledged that we will make mistakes on the journey as we work to be even more inclusive. To navigate what’s ahead, he said we will need resilience, optionality and agility. “It’s important to connect with information, acknowledge the insecurity, in a language people understand, in order to connect,” he said.     Session highlights – day 1 The conference hall was buzzing with conversations, discussions and thought leadership. Buy Now Pay Later A large audience was in attendance for a session that introduced Experian’s Buy Now Pay Later Bureau™ and explored how it’s the first and only solution of its kind — serving consumers, BNPL providers, financial institutions and regulators. Identity Identity is constantly evolving, and while biometrics and authentication may have become ubiquitous, there is much activity around the concepts of eIDs, identity wallets and identity networks. Experian is making identities personal and helping businesses to recognize, manage and connect customer identities in new ways using data, analytics and technology. Marketing In today’s hypercompetitive world, businesses need to engage the freshest data and increase velocity when it comes to time to market. An average of 120 days won’t cut it. Ascend Marketing speeds time to market and helps achieve higher ROI. Regulatory Landscape With so much happening at Capitol Hill, a panel of experts from DC discussed a number of topics and proposals (and their impacts), including the defense for risk-based pricing, the impact of suppressing negative data, and trending topics like Buy Now Pay Later and data portability. All the while, the tech showcase had a constant flow of attendees with demos ranging from data and decisioning to financial inclusion and technology. This is just the beginning. And as Schulz said, “There’s more to do.” More insights from Vision to come. Follow @ExperianVision to see more of the action.

Experian’s in-person Vision conference returns next Monday, April 11 in Los Angeles, Calif. The event is known for premier thought leadership, net-new insights and the latest and greatest in technology, innovation and data science. This year’s agenda promises to have intentional discussions around tomorrow’s trending topics including financial inclusion, buy now pay later, open banking, the future of fraud, alternative data strategies, and much more. A few spotlight sessions include: Top trends including the future application of the cloud and emerging technologies, emerging regulatory legislation and the broader implications and opportunities of DeFi. A deep dive into strategies around the targeting/marketing revolution and how to deliver in the post-COVID-19 market environments and bolster financial inclusion decisions. An introduction to Experian’s Buy Now Pay Later BureauTM, the industry’s first and only solution designed to address the needs of consumers, BNPL providers, financial institutions and regulators alike. A roundup of sessions addressing innovation in action spanning from real-time verifications, to data-driven automation, and unified platforms from data to deployment to decisioning. Several sessions highlighting future-looking strategies and solutions that leverage alternative data that can increase conversion rates while concurrently reducing risk. Multiple sessions centered on the rapidly changing identity environment and combatting emerging fraud threats. The event will also include a Tech Showcase, where attendees can get a taste of tomorrow today with more than 20 demos and the latest innovations at their fingertips. And, as always, the event features marquee keynote speakers sure to inspire. This year’s featured speakers are Dr. Mohamed A. El-Erian, President of Queens’ College, Cambridge, Chief Economic Advisor at Allianz, and Former CEO and Co-Chief Investment Officer of PIMCO; Allyson Felix, Olympic Gold Medalist, co-founder of Saysh, a footwear and lifestyle brand for women, and Right to Play and Play Works ambassador; and the closing keynote will feature actor, investor, entrepreneur and philanthropist, Ashton Kutcher. Stay tuned for additional highlights and insights on our social media platforms throughout the course of the conference. Follow Experian Insights on Twitter and LinkedIn.  

For decades, the credit scoring system has relied on traditional data that only examines existing credit captured on a credit report – such as credit utilization ratio or payment history – to calculate credit scores. But there's a problem with that approach: it leaves out a lot of consumer activity. Indeed, research shows that an estimated 28 million U.S. adults are “credit invisible," while another 21 million are “unscorable."1 But times are changing. While conventional credit scoring systems cannot generate a score for 19 percent of American adults,1 many lenders are proactively turning to expanded FCRA-regulated data – or "alternative data" – for solutions. Types of expanded FCRA-regulated data By tapping into technology, lenders can access expanded FCRA-regulated data, which offers a powerful and complete view of consumers' financial situations. Expanded public record data This can include professional and occupational licenses, property deeds and address history – a step beyond the limited public records information found in standard credit reports. Such expanded public record data is available through consumer reporting agencies and does not require the customer's permission to use it since it's a public record.1 “Experian has partnerships with these agencies and can access public records that provide insight into factors like income and housing stability, which have a direct correlation with how they'll perform," said Greg Wright, Chief Product Officer for Experian Consumer Information Services. “For example, lenders can see if a consumer's professional license is in good standing, which is a strong correlation to income stability and the ability to pay back a loan." Rental payment data Experian RentBureau draws updated rental payment history data every 24 hours from property managers, electronic rent payment services and collection companies. It can also track the frequency of address changes. “Such information can be a good indicator of risk," said Wright. “It allows lenders to make informed judgments about the financial health and positive payment history of consumers." Consumer-permissioned data With permission from consumers, lenders can look at different types of financial transactions to assess creditworthiness. Experian Boost™, for example, enables consumers to factor positive payment history, such as utilities, cell phone or even streaming services, into an Experian credit file. “Using the Experian Boost is free, and for most users, it instantly improves their credit scores," said Wright. “Overall, those 'boosted' credit scores allow for fairer decisioning and better terms from lenders – which gives customers a second chance or opportunity to receive better terms." Financial Management Insights Financial Management Insights considers data that is not captured by the traditional credit report such as cash flow and account transactions. For instance, this could include demand deposit account (DDA) data, like recurring payroll deposits, or prepaid account transactions. “Examining bank account transaction data, prepaid accounts, and cash flow data can be a good indicator of ability to pay as it helps verify income, which gives lenders insights into consumers' cash flow and ability to pay," Wright added. Clarity Credit Data With Experian's Clarity Credit Data, lenders can see how consumers use expanded FCRA-regulated data along with their related payment behavior. It provides visibility into critical non-traditional loan information, including more insights into thin-file and no-file segments allowing for a more comprehensive view of a consumer's credit history. Lift Premium™ By using multiple sources of expanded FCRA-regulated data to feed composite scores, along with artificial intelligence and machine learning, Lift Premium™ can vastly increase the number of consumers who can be scored. For example, research shows that Lift Premium™ can score 96 percent of American adults ­– a significant increase from the 81 percent that are scorable with conventional scores relying on only traditional credit data. Additionally, such enhanced composite scores could enable 6 million of today's subprime population to qualify for “mainstream" (prime or near-prime) credit.1 How is expanded FCRA-regulated data changing the credit scoring system? The current credit scoring system is rapidly evolving, and modern technology is making it easier for lenders to access expanded FCRA-regulated data. Indeed, this data disruption is changing lender business in a positive way. “When lenders use expanded credit data assets, they see that many unscorable and credit invisible consumers are in fact creditworthy," said Wright. “Layering in expanded FCRA-regulated data gives a clearer picture of consumers' financial situation." By expanding data assets, tapping into artificial intelligence and machine learning, lenders can now score many more consumers quickly and accurately. Moreover, forward-thinking lenders see these expanded data assets as offering a competitive edge: it's estimated that modern credit scoring methods could allow lenders to grow their pool of new customers by almost 20 percent.1 Case study: Consumer-permissioned data To date, over 9 million people have used Experian Boost. The technology uses positive payment history as a way to recognize customers who exhibit strong credit behaviors outside of traditional credit products. “Boosted" consumers were able to add on average 14 points to their FICO scores in 2022 so far, making many eligible for additional financial products with better terms or better product offerings. Active Boost consumers, post new origination performed on par or better than the average U.S. originator, consistently over time. “In other words, having this additional lens into a consumer's financial health means lenders can expand their customer base without taking on additional credit risk," explains Wright. The bottom line The world of credit data is undergoing a revolution, and forward-thinking lenders can build a sound business strategy by extending credit to consumers previously excluded from it. This not only creates a more equitable system, but also expands the customer base for proactive lenders who see its potential in growing business. Learn more 1Oliver Wyman white paper, “Financial Inclusion and Access to Credit,” January 12, 2022.

At Experian, we know that financial institutions, fintechs and lenders across the entire spectrum – small, medium and large, are further exploring and adopting AI-powered solutions to unlock growth and improve operational efficiencies. With increasing competition and a dynamic economy, AI-driven strategies across the entire customer lifecycle are no longer a nice to have, they are a must. Our dedication to delivering on this need for our clients is why we are thrilled to be recognized as a Fintech Breakthrough Award winner for the fifth consecutive year. Experian’s Ascend Intelligence ServicesTM (AIS) platform hosts a suite of analytics solutions and has been named “Best Consumer Lending Product” in the sixth annual FinTech Breakthrough Awards. This awards program is conducted by FinTech Breakthrough, an independent market intelligence organization that recognizes the top companies, technologies and products in the global fintech market today. This is the second consecutive year that AIS has been recognized with a FinTech Breakthrough Award, previously being selected for the “Consumer Lending Innovation Award” in 2021. “Winning another award from FinTech Breakthrough is a fantastic validation of the success and momentum of our Ascend Intelligence Services suite. Now more than ever, the world is in a state of constant change and companies are being reactive, with data scientists spending too much time on manual, repetitive data-wrangling tasks, at a time when they cannot afford to do so,” said Shri Santhanam, Experian’s executive vice president and general manager of Global Analytics and AI. “Companies need to be able to rapidly develop and deploy ML-powered models in an agile way at low cost. We are now able to offer this to more lenders no matter their size.” With AIS, Experian can empower financial services firms to make the best decisions across the customer life cycle with rapid model and strategy build, seamless deployment, optimization and continuous monitoring. The AIS suite is comprised of two key solution models: Ascend Intelligence Services Acquire is a managed services offering that enables financial institutions to increase approval rates and control bad debt by acquiring the right customers and providing the best offers. This is accomplished through a rapid AI/ML model build that will help better quantify the risk of an individual applicant. Next, a mathematically optimized decision strategy is designed to provide a more granular view of the applicant and help make the best decision possible based on the institution’s specific business goals and constraints. The combination of the AI/ML model and optimized decision strategy provides increased predictive power that mitigates risk and allows more automated decisions to be made. The model and strategy are seamlessly deployed to help deliver business value quickly. Ascend Intelligence Services™ Limit enables financial institutions to make the right credit limit decisions at account origination and during account management. Limit uses Experian’s data, predictive risk and balance models and our powerful optimization engine to design the right credit limit strategy that maximizes product usage, while keeping losses low. To learn more about how Ascend Intelligence Services can support your business, please explore our solutions page. Learn more For a list of all award winners selected for the 2022 FinTech Breakthrough Awards, click here.