Today’s consumer lending environment is more dynamic and competitive than ever, with renewed focus on personal loans, marketplace lending and the ever-challenging credit card market. One of the significant learnings from the economic crisis is how digging deeper into consumer credit data can help provide insights into trending behavior and not just point-in-time credit evaluation. For example, I’ve found consumer trending behavior to be very powerful when evaluating risks of credit card revolvers versus transactors. However, trended data can come with its own challenges when the data isn’t interpreted uniformly across multiple data sources. To address these challenges, Experian® has developed trended attributes, which can provide significant lift in the development of segmentation strategies and custom models. These Trended 3DTM attributes are used effectively across the life cycle to drive balance transfers, mitigate high-risk exposure and fine-tune strategies for customers near score cutoffs. One of the things I look for when exploring new trended data is the ability to further understand payment velocity. These characteristics go far beyond revolver and transactor flags, and into the details of consumer usage and trajectory. As illustrated in the chart, a consumer isn’t easily classified into one borrowing persona (revolver, transactor, etc.) or another — it’s a spectrum of use trends. Experian’s Trended 3D provides details needed to understand payment rates, slope of balance growth and even trends in delinquency. These trends provide strong lift across all decisioning strategies to improve your business performance. In recent engagements with lenders, new segmentation tools and data for the development of custom models is at the forefront of the conversation. Risk managers are looking for help leveraging new modeling techniques such as machine learning, but often have challenges moving from prior practices. In addition, attribute governance has been a key area of focus that is addressed with Trended 3D, as it was developed using machine learning techniques and is delivered with the necessary documentation for regulatory conformance. This provides an impressive foundation, allowing you to integrate the most advanced analytics into your credit decisioning. Alternative data isn’t the only source for new consumer insights. Looking at the traditional credit report can still provide so much insight; we simply need to take advantage of new techniques in analytics development. Trended attributes provide a high-definition lens that opens a world of opportunity.

 Organizations that can mobilize their data assets to power critical business initiatives will see a distinct advantage in the coming years. In fact, most C-level executives (87%) believe data has greatly disrupted their organization’s operations over the past 12 months. Here are more insights from the newly released 2018 global data management benchmark report: As digital transformation efforts proliferate and become commonplace, organizations will need to implement processes and technology that scale with the demands of data-driven business. Read the full report

It’s clear the digital marketplace is here to stay. Online activities among consumers reflect the increased adoption of digital commerce. In fact, recent findings from our 2018 Global Fraud and Identity Report show the top activity on mobile devices is online shopping, followed closely by personal banking.   Consumers trust technology and, by proxy, the businesses that help enable it. It’s critical for organizations to continue to build trust online without disrupting the consumer experience. It’s the goal — and the responsibility — of businesses. Learn more

Experian® is honored to be an MRC Technology Award nominee. But we can’t win the MRC People’s Choice Award without your help! The annual MRC Technology Awards recognize the most elite solution providers making significant contributions in the fraud, payments and risk industries. CrossCore® is the first smart, open, plug-and-play platform for fraud and identity services. We know, and our clients agree, that it delivers a better way to modify strategies quickly, catch fraud faster, improve compliance and enhance the customer experience. Need further convincing? Here are the top 3 reasons you should vote for CrossCore. Reason 1: common access Manage your entire fraud and identity portfolio. Start immediately by turning on Experian services through a single integration. Connect to services quickly with a common, flexible API. Reason 2: open approach Control the data being used in decisions. CrossCore supports a best-in-class approach to managing a portfolio of services that work together in any combination — including Experian solutions, third-party services and client systems — delivering the level of confidence needed for each transaction. Reason 3: workflow decisioning Act quickly and adapt to new risks with built-in strategy design and workflow capabilities. You can precisely tailor strategies based on transaction type or risk threshold. Make changes dynamically, with no downtime. We hope you’ll vote for CrossCore as a better way to manage fraud prevention and identity services.

In the world of marketing, this can happen to all of us. We think we know how much ad spend we should put towards a PPC campaign or what time a TV ad should air. In this digital realm, dealers are given a lot of data when a campaign finishes. Technology has pushed our boundaries so now, someone looking at a video of a specific automobile on a social media platform like YouTube can be targeted to receive video advertisements for your dealership. With that said, how do you know if you are targeting the right people? When it comes to your campaigns, you want to know your money is going towards the right forms of advertisements as well as the right demographics. If a campaign is doing well, extending out that campaign can be a better decision compared to letting it end. On the other side, if a campaign is doing poorly, pausing or evening stopping the campaign can be more beneficial in the future. The big questions you must ask yourself are: Am I targeting the wrong people? There can be a few reasons why you may be targeting the wrong people. First, the type of campaign can be incorrect. Social media is the newest and hottest form of marketing, but that may not work with your audience. Second, your demographics may be off. Without knowing the key demographics that you are targeting, you could be blindly targeting customers not interested in your vehicles or not in the market. The opposite could be said for that as well. You may be leaving out potential customers in key geological areas around your dealership. Because of this, you could be losing sales. Targeting doesn’t just stop with humans. You must think about your location and what you have in your inventory. If you are in a state like Colorado, you will want to allocate more SUVs and vehicles that have all-wheel-drive. By advertising rear-wheel-drive or sports cars to individuals that exclusively drive SUVs or only research SUVs, that can be a loss of advertising dollars. What can I do about it? A revamped marketing campaign is a good start for a strategy, but it may not be enough. Targeting can be a difficult endeavor, but thankfully there are programs and companies that can help. Experian Automotive’s Dealer Positioning System® can target key ZIP Code™ and display which campaigns are working - as well as which should be cut. Thanks to this type of data-driven targeting, market share and sales can increase even while advertising spend decreases. Another great aspect of using a system like Experian DPS is the ability to create campaigns to target vehicles your customers want. Like the example above of what not to do, you can formulate a plan of attack to focus on SUVs and light-duty trucks in a mountainous area. Conquesting intelligently not only means more people coming through your door but more allocations for vehicles your customers will want. Marketing is important. Whatever kind of advertising you do, remember that building your dealership is important. Having a solid game plan to conquest around you relies on smart targeting and the correct forms of advertising. Experian DPS can help boost market share and increase sales core models which is very helpful. To learn more about how Experian Automotive can assist with your targeting, click here.

Are you ready to launch a new product to capture the revenue growth opportunities in today’s market? The competition is heating up for new growth, as banks increased personal loan balances by 10 percent year-over-year in 2015 and another 6 percent in 2016.* Many lenders are now looking for robust data to understand the market opportunity based on their risk appetite. This challenge usually takes a significant investment in consumer credit data to gain the necessary insights. In helping lenders launch new products, I’ve found there are common areas of focus and specific steps you must take to move from the initial business case to more tactical planning. The following details come to mind: refining risk thresholds, pricing, loss forecasting and use of models within the initial go-to-market strategy. These project tasks can’t be successfully completed without having the right breadth and depth of data available. Knowing the past can help you create a better future for your business. When I start working with a client on a new product launch, I want to ensure they have sufficient data that can provide a comprehensive historical consumer view. In my experience, the best data to use will show an exhaustive view of consumer behaviors through the economic cycle. Having this large volume of data enables me to evaluate the business strategy and risks through the financial crisis while also giving my clients the foundation for compliance with loss forecasting regulations. Obtaining this breadth of data often can be a significant, but necessary, investment. Data is a great starting point, but it isn’t enough. Understanding the data sufficiently to design an effective go-to-market strategy is critical for success. I’ve found that identifying specific attributes helps give my clients a deep dive into the structure of a consumer’s credit history at the trade level. This level of information provides insight into the structure of the consumer’s wallet and preferences. Additionally, this depth of data allows my clients to develop powerful custom models for use in their business strategy. Being prepared is half the victory. Having comprehensive data that will help you understand consumer spending behavior and the risk they carry through the economic cycle will assist in creating a successful go-to-market strategy. Our Market Entry ServicesTM data sets are analytics-ready, including attributes and performance flags, to give you a holistic view of your target market. Having this breadth and depth of data, along with strong tactical planning and execution, will ensure your success in launching new products and entering new markets.   *Experian–Oliver Wyman Market Intelligence Report

Our 8th annual State of Credit report shows that consumer credit scores and signs of economic recovery continue on an upward trend, coming close to a prerecession environment. The average U.S. credit score is up 2 points to 675 from last year and is just 4 points away from the 2007 average. Originations are increasing across nearly all loan types, with personal loans and automotive loans showing 11% and 6% increases year-over-year, respectively. Consumer confidence is up 25% year-over-year and has increased more than 16% from this period in 2007. With employment and consumer confidence rising, the economy is expected to expand at a healthy pace this year and continue to rebound from the recession. Now is the time to capitalize on this promising credit trend. State of Credit 2017

At their heart, car dealers have always been marketers. It's part of learning the trade and understanding the business to gain natural insight into modern marketing and advertising practices. One could even argue that the experience gained through knowledge passed down, trial and error, and exposure to the automotive game itself can yield better strategies than a marketing degree. With all that said, it's still important to have the right data to guide the decisions as well as the tools necessary to decipher the data. Although we have a vast amount of information at our fingertips, it's very possible to truly build on "actionable data" and allow it to define the parameters for a dealership's marketing strategy. One of the most important things to consider when you're building and enhancing your strategies is that the data allows for decision making on the macro and micro levels. We see trend reports, analytics, and test cases that can influence decisions on both sides of the spectrum. Making decisions on the macro level means wholesale changes or additions. For example, the overall effectiveness of a particular classified advertising website can be broken down to determine whether or not it's making the right type of impact. Dealers have so many options today to advertise both online and offline, so making sure that any particular venue is effective is key to success. On the micro level, decisions can be made about how to position the dealership within the individual venues. You may be a big believer in search pay-per-click advertising, for example, and data can help to guide you or your vendor partners to position the dealership properly on search. Knowing which messages about individual cars are effective can be a guide. Then, understanding what zip codes have the highest opportunity level for the individual model can mold your PPC spend, while demographic data can drive effective messaging and help you optimize campaign creative and landing pages. Having access to the data is only the first step. Looking at the data appropriately is an important second step that many dealers are missing. Putting it all together into a decision-driving model is the step that almost every dealer should embrace to allow them to make the best decisions, macro or micro.

Consumers are hungry for more personalized marketing, and I’m an actual example. As a new stepmom to two young kids, who has a full-time job, I rarely have any down time. No revelation there. I no longer have time to surf the web to buy clothes. And shepherding everyone to an actual store to shop? #forgetaboutit I’m not alone. Of the 57 percent of women in the U.S. workforce, 70 percent have a child under the age of 18. We don’t always have the time to shop for clothes, financial products, and nearly anything else, but it doesn’t mean we don’t need or want to. I would give the right bank or retailer my data in exchange for personalized marketing offers in my inbox, social feeds and mailbox. And many others would, too. Sixty-three percent of Millennial consumers and 58 percent of Gen Xers are willing to share data with companies in exchange for personalized offers, discounts and rewards. This indicates consumers are craving more customized marketing. Providing their personal data to get that is acceptable to them. In the financial services space, Mintel research shows that just 61 percent of male consumers, 49 percent of consumers aged 18-44, and 44 percent of Hispanic Millennials have a general-purpose credit card, either with or without rewards (Mintel’s Marketing Financial Services Report for June 2017). This indicates a significant market opportunity for cards that offer segmented or boosted rewards based on specific sectors and categories. Here are some other interesting trends specific to financial services: Relying on Experts Although chatbots and robo-advisors allow easy access to many financial services, 81 percent of consumers prefer in-person meetings when it comes to personalized financial advice. According to Mintel, men aged 18-44 are most interested in a free consultation with a financial advisor, and 19 percent of consumers are open to a free consultation. This interest surpasses attending free classes about finance and receiving email and mobile alerts from a financial institution. Quick, Efficient Delivery While consumers are calling for increased personalization, they also want it delivered quickly and efficiently. These expectations create unique challenges for financial institutions of all sizes. Some banks have embraced “card finder” apps, which allow consumers the convenience of inputting personal information to generate customized offers. There is a huge opportunity for financial institutions to leverage available consumer data to understand their target audience, and then deliver relevant products via multiple channels where they are consuming media now. Those who do will be positioned to provide personalized financial recommendations that were impossible just a few years ago.

Global Fraud and Identity Report 2018 Customer recognition. Convenience. Trust. Fraud risk. We obtained input from more than 5,500 consumers and 500 businesses worldwide on these priorities for our Global Fraud and Identity Report 2018. Top takeaways include: Your customers expect you to protect them. Are you meeting this need? Spot fraud by recognizing your customers. Can you identify yours? While perfect fraud prevention shouldn't undermine customer happiness, we can't forget that fraud victims aren’t happy customers. Businesses recognize the importance of trust - and the need for technology to enable it. Most businesses tend to demonstrate suspicion when it comes to preventing fraud, following a route of detection rather than permission or trust. This leads to lost sales and damages that customer’s lifetime value. There’s a better approach. Read the full report>

Benjamin Franklin famously said that nothing in life is certain except death and taxes. While that may be true, I think we can add another item to the list — traffic. An unfortunate part of many people’s day, traffic is an inevitable consequence when moving from point A to point B, especially when you consider the sheer volume of vehicles on the road. According to the latest research from Experian, the number of vehicles in operation (VIO) has jumped 5.7 million, going from 265.3 million in Q3 2016 to 271 million in Q3 2017. In fact, more than 17 million new vehicles hit the road in the United States, with just 11.4 million exiting operation. Numbers of that size can be hard to process, so let’s focus on something more relatable. When you’re stuck in traffic, what types of vehicles are inching along at a snail’s pace with you? No matter which state you live in, chances are you’ll see lots of full-size pickup trucks. Why? The top vehicle segment in 42 out of the 50 states is full-size pickups. The only exceptions are Hawaii — which has small pickup trucks as the number one segment — and Rhode Island, New York, New Jersey, Connecticut, Massachusetts, California and Maryland, which prefer midrange standard cars. If you think about it, these exceptions make sense. Residents of the East Coast commuter states and California probably prefer smaller vehicles because they’re more fuel efficient and it’s easier to find parking. But if you talk to a pickup truck owner, you’ll almost certainly hear why trucks are the best vehicle to own. Not surprisingly, full-size pickups aren’t just the top segment in most states; they also make up the largest vehicle segment currently on the road, at 15.3 percent. In terms of top models for full-size pickups, the Ford F-150 and Chevy Silverado 1500 are the top two best-selling trucks nationwide. Overall, Ford and GM still hold the largest market share across all makes and models. Toyota showed the greatest market share growth, going from 12.5 percent in 2016 to 13.6 percent in Q3 2017. For more information about Experian’s most recent VIO data, watch our latest webinar.

Below is our 5 Results for Dealers and Agencies Using DPS infographic.

  The auto industry has been riding a wave of prosperity for the past seven years, bouncing back nicely from the 2008 market collapse. But, it looks like rising sales of the past 10 years, are, well...a thing of the past. According to Alix Partners, 2016 sales of 17.5 million units might be the high-water sales mark, at least through 2022. Alix Partners says the next five years sales will range between 15.6 million to 16.8 million annually. Suddenly, it will be challenging for dealers to stay in strong growth mode. How can dealers best react to the tightening market? The Experian white paper “Data Tools Evolve to Give Dealers an Edge in a Tight Sales Market” takes a look at how new and improved data and analytic tools can provide deeper insights to help automotive retailers unlock sales. The paper reviews current market sales statistics, historical sales trends and how dealers reacted during similar market conditions in the past. In addition, the paper provides a look at the challenges faced by automotive retailers, in terms of shrinking gross profit, higher advertising expenses and increased competition. Automotive retailers also will find information on the importance of customer conquesting and a look at technology tools to help provide a deeper understanding and actionable intelligence about local markets. Data and analytics are no longer the private purview of large mega-dealers. The Experian white paper outlines today’s data tools that can be implemented quickly and cost effectively by dealers of any size. To learn more about these trends, download the paper here: https://www.experian.com/automotive/dealerwhitepaper.html

Once a scorecard has been redeveloped, it is important to measure the impact of changes within the strategy by replacing the old model with the new one. This impact assessment can be completed with a swap set analysis. The term swap set refers to “swapping out” a set of bad accounts and replacing them with or “swapping in” a set of good accounts. Different approaches can be used when evaluating swap sets to optimize your strategy and keep: The same overall bad rate while increasing the approval rate. The same approval rate while lowering the bad rate. The same approval and bad rates but an increase in customer activation or customer response rates. When measuring your swap sets, remember to also include the population that doesn’t change — those accounts that would be approved or declined using either the old or new model. Learn more>

You’ve been tasked with developing a new model or enhancing an existing one, but the available data doesn’t include performance across the entire population of prospective customers. Sound familiar? A standard practice is to infer customer performance by using reject inference, but how can you improve your reject inference design? Reject inference is a technique used to classify the performance outcome of prospective customers within the declined or nonbooked population so this population’s performance reflects its performance had it been booked. A common method is to develop a parceling model using credit bureau attributes pulled at the time of application. This type of data, known as pre-diction data, can be used to predict the outcome of the customer prospect based on a data sample containing observations with known performance. Since the objective of a reject inference model is to classify, not necessarily predict, the outcome of the nonbooked population, data pulled at the end of the performance window can be used to develop the model, provided the accounts being classified are excluded from the attributes used to build the model. This type of data is known as post-diction data. Reject inference parceling models built using post-diction data generally have much higher model performance metrics, such as the KS statistic, also known as the Kolmogorov-Smirnov test, or the Gini coefficient, compared with reject inference parceling models built using pre-diction data. Use of post-diction data within a reject inference model design can boost the reliability of the nonbooked population performance classification. The additional lift in performance of the reject inference model can translate into improvements within the final model design. Post-diction credit bureau data can be easily obtained from Experian along with pre-diction data typically used for predictive model development. The Experian Decision Analytics team can help get you started.