According to the latest Experian–Oliver Wyman Market Intelligence Report, HELOC originations came in at $43 billion for Q4 2015 — a 22% increase over Q4 2014. HELOC originations for all of 2015 totaled $160 billion — a 21% increase year over year. As HELOC originations continue their growth trend, lenders can stay ahead of the competition by using advanced analytics to target the right customers and increase profitability. >> Revamp your mortgage and HELOC acquisitions strategies

Providing the essentials to credit risk managers

Basically, a blockchain is a permissionless, distributed database that maintains a growing list of records in a linear, chronological ledger.

According to a recent Experian Marketing Services study, 36% of companies interact with customers in five or more channels.

Data Privacy Day reminds consumers to protect their privacy online — and for organizations to ensure they are vigilant in their fight against fraud.

Who will take the coveted Super Bowl title in 2016? Now that we’re down to the final two teams, the commentary will heighten. Sportscasters, analysts, former athletes, co-workers ... even your local barista has an opinion. Will it be Peyton Manning's Denver Broncos or the rising Carolina Panthers? Millions will make predictions in the coming weeks, but a little research can go a long way in delivering meaningful insights. How have the teams been trending over the season? Are there injuries? Who is favored and what’s the spread? Which quarterback is leading in pass completions, passing yards, touchdowns, etc.? Who has been on this stage before, ready to embrace the spotlight and epic media frenzy? The world of sports is filled with stats resulting from historical data. And when you think about it, the world of credit could be treated similarly. Over the past several years, there has been much hype about “credit invisibles” and the need to “score more.” A traditional pull will likely leave many “no-file” and “thin-file” consumers out, so it’s in a lender’s best interest to leverage alternative scoring models to uncover more. But it’s also important to remember a score is just a snapshot, a mere moment in time. How did a consumer arrive to that particular score pulled on any given day? Has their score been trending up or down? Has an individual been paying off debt at a rapid pace or slipping further behind?   Two individuals could have the exact same score, but likely arrived to that place differently. The backstory is good to know – in sports and in the world of credit. Trended data can be attached to balances, credit limits, minimum payment due, actual payment and date of payment. By assessing these areas on a consumer file for 24 months, more insights are delivered and lenders can take note of behavior patterns to assist with risk assessment, marketing and share-of-wallet analysis. For example, looking closer at those consumers with five trades or more, Experian trended data reveals: 27% are revolvers, carrying balances each month 27% are transactors, paying off large portions, or all of their balances 9% are rate surfers, who tend to frequently transfer balances to credit cards with 0% or low introductory rates. Now these consumers can be viewed beyond a score. Suddenly, lenders can look within or outside their portfolio to understand how consumers use credit, what to offer them, and assess overall profitability. In short, trended data provides a more detailed view of a borrower’s historical credit performance, and that richness makes for a more informed decision. Without a doubt, there is power in the score – and being able to score more – but when it comes time to place your bets, the trended data matters, adding a whole new dimension to an individual’s credit score. Place your wagers accordingly. As for who will win Super Bowl 2016? I haven’t a clue. I’m more into the commercials. And I hear Coldplay is on for the half-time show. If you’re betting, best of luck, and do your homework.

With the rapid growth in the number of online marketplace lenders , and projections the field will continue to grow in 2016, winning the race to greater revenue and profitability is key to survival. In 2014, online marketplace lenders issued loans totaling around $12 billion in the United States. In a recent report, Morgan Stanley said it expects the U.S. number to grow to $122 billion by 2020, and the global number will surpass $280 billion in the same time period. Investors fear growth in acquisition costs will erode profitability as more online marketplace lenders enter the market. And as portfolios grow, there will be a need for greater sophistication as it pertains to managing accounts. Online marketplace lenders use a variety of different models to generate revenue including charging interest, loan origination and other service fees. However, regardless of the model, there are typically three key levers all should monitor in order to increase their odds for a profitable and sustainable future. 1. Cost per Account (CPA) CPA is more than a simple calculation spreading marketing cost across new account volume. Rather, it is a methodical evaluation of individual drivers such as channel lead cost, success rates, identity verification and cost of marketing collateral. When measured and evaluated at the granular lever, it is possible to make the most informed strategic decisions possible. Marketplace lenders will have to go much deeper than simply evaluating lead costs, clicks, completed and accepted applications, and funding/activation including whether customers take the loan proceeds or use a revolving product. Don’t forget ID verification and the costs associated with risk mitigation and determining if the low-risk customers are deciding to apply elsewhere. In addition, take into account marketing costs including collateral and channel strategies including any broadcast media, direct mail, web and social media expenses. Evaluate results across various product types – and don’t forget to take into account web content and layout, which can impact all metrics. 2. First Pay Default (FPD) FPD is not a long-term loan performance measure, but it is a strong indicator of lead source and vintage quality. It will most closely correlate to long-term loan performance in short-term loans and non-prime asset classes. It is also a strong indicator of fraud. The high value of online loans, combined with the difficulty of verifying online applicants, is making online lenders a prime target for fraud, so it is essential to closely monitor FPD. Online lenders’ largest single cost category is losses from unpaid loans with fraud serving as a primary driver of that number. It is important to evaluate FPD using many of the same segments as CPA. Online lenders must ask themselves the tough questions. Is a low-cost lead source worthwhile? Did operational enhancements really improve the customer experience and credit quality? 3. Servicing Online account servicing is generally the least costly means of servicing customers, an obvious advantage for online marketplace lenders. However, a variety of factors must be considered when determining the servicing channels to use. These include avoidance of customer backlash and regulatory scrutiny, servicing channel effectiveness in providing feedback regarding product design and administration, servicing policies and marketing collateral. Already, we know the legal and regulatory landscape will evolve as policy makers assess the role of marketplace lending in the financial system, while a recent federal appeals court ruling increases the risk that courts could deem some loans void or unenforceable, or lower the interest rates on them. An effective customer complaint escalation policy and process must also be created and allow for situations when the customer is not “right.” Voice of the customer (VOC) surveys are an effective method of learning from the customer and making all levels of staff know the customer better, leading to more effective marketing and account servicing. Lastly, online lenders can’t ignore social media. They should be prepared for customers, especially millennials, to use it as a means to loudly complain when dissatisfied. But also remember that the same media can be an excellent medium for two-way engagement and result in creating raving fans. A Final Consideration As online marketplace lenders continue to come of age, they are likely to find themselves facing increased competition from incumbent consumer lenders, so optimizing for profitability will be essential. Assessing these three key areas regularly will help in that quest and establish their business for a sustainable future. For more information, visit www.experian.com/marketplacelending.

For marketers, the start of a new year is an opportunity to look ahead.

What will 2016 hold for our market and the economy in terms of demand deposit accounts

As millennials continue to experience challenges in obtaining credit, Experian’s latest research finds that this population is very receptive to nonbank lenders for the ease, speed and accessibility they provide.

The world of online marketplace lending has grown tremendously over the past several years. Still, for as much hype as it has received, it’s important to note the sector represents only 1.1 percent of unsecured loans and 2.5 percent of small business loans in the United States. While the industry is still in its infancy, it's expected to grow at an annual rate of 47 percent in the U.S by 2020, according to Morgan Stanley. And as it transitions from its “start-up” phase into “adolescence,” many expect it will become a high-growth, mature and stable market, bringing great benefit to consumers of financial services. So what does the future hold for online marketplace lenders? Who better to weigh in than those in the space, going through the evolution, seeing challenges first-hand and keeping a pulse on where they need to invest in order to survive. This video features a diverse group of leaders in the online marketplace lending industry. // Peter Renton, Founder, Lend Academy Scott Sanborn, COO, Lending Club Sam Hodges, Co-founder, Funding Circle USA Andrew Smith, Partner, Covington & Burling Joseph DePaulo, CEO, College Ave. Kathryn Ebner, VP, Credibly Without stealing all of their thunder, a few key themes emerged for 2016. Online marketplace lenders will look to expand their product offerings into all credit verticals – personal loans, auto, student, small business and beyond. Expect competition to continue to heat up. Large institutional investors will increasingly back and test the space. Some players will partner with large banks. Many will explore scoring with the use of alternative data. Innovations to come in customer service and product expansion. Bottom line, alternative finance doesn’t seem so “alternative” anymore. As such, competition will heat up, and regulators will continue to keep an eye on business practices, processes and what it all means for consumers. To learn more about online marketplace lending, visit https://www.experian.com/business-services/landing/marketplace-lending.html

Thanks to a recent announcement from the Internal Revenue Service, identity theft protection will now be considered a non-taxable benefit.

The new year has started, the champagne bottles recycled. Bye-bye holidays, hello tax season. In fact, many individuals who are expecting tax refunds are filing early to capture those refunds as soon as possible. After all, a refund equates to so many possibilities – paying down debt, starting a much-needed home improvement project or perhaps trading up for a new vehicle. So what does that mean for lenders?  As consumers pocket tax refunds, the likelihood of their ability to make payments increases. By the end of February 2014, more than 48 million tax refunds had been issued according to the IRS – an increase of 5.6 percent compared to the same time the previous year. As of Feb. 28, the average refund in 2014 was $3,034, up 3 percent compared to the average refund amount for the same time in 2013. To capitalize on this time period, introducing collection triggers can assist lenders with how to manage and collect within their portfolios. Aggressively paying down a bankcard, doubling down on a mortgage payment or wiping out a HELOC signal to the lender a change in positive behavior, but without a trigger attached, it can be hard to pinpoint which customers are shifting from their status quo payments. Experian actually offers around 100 collection triggers, but lenders do not need all to seek out the predictive insights they require. A “top 20” list has been created, featuring the highest percentages in lift rates, and population hit rates. Experian has done extensive analysis to determine the top-performing collection triggers. Among the top 15 to 20 triggers, the trigger hit rate ranged from 2 to 8 percent on an average client’s total portfolio, taking into consideration liquidation rates, average percent of payment lifts, lift in liquidation rates over the baseline liquidation, percent of overall portfolio that triggered, percent of overall portfolio that triggered only on the top-selected triggers, and percent of volume by trigger on the total customers that had a trigger hit. With that said, it is essential to implement the right strategy that includes a good mixture of the top-performing triggers. The key is diversifying and balancing trigger selection and setting triggers up during opportune times. Tax season is one of those times. Some of the top-ranked triggers include: Closed-Zero Balance Triggers: This is when a consumer’s account is reported as closed after being delinquent for a certain number of days. Specifically, the closed-zero balance trigger after being delinquent for 120 days has the highest percent of payment lift over an average payment that you would receive from a customer (at a 710 percent lift rate). These triggers are good indicators the consumer is showing positive improvement, thus having a higher likelihood for collections. Paid Triggers: This is when a consumer’s account is reported as paid after being delinquent, in collections, etc. Five of the top 20 triggers are paid triggers. These triggers have good coverage and a good balance between high lift rates (100 percent to 500 percent) and percent of the triggered population. These triggers are also good indicators the consumer is showing positive improvement, thus having a higher likelihood for collections. Inquiry Triggers: This is when a consumer is applying for an auto loan, mortgage loan, etc. The lift rates for these triggers are lowest within the Top 20, but on the other hand, these triggers have the highest hit rates (up to a 33 percent hit rate). These triggers are good indicators consumers are seeking to open additional lines of credit. Home Equity Loan Triggers: These triggers indicate the credit available on a consumer’s home equity loan. They are specifically enticing to collectors due to the fact that home equity lines of credit are usually larger than your average credit on your bank card. The larger the line of credit, the more you are able to potentially collect. To learn more about collection triggers, visit https://www.experian.com/consumer-information/debt-collection.html

What is the true fraud cost? We must be vigilant and keep our acceptable fraud rate at zero

Consumer credit card debt reached $650 billion in Q3 2015 — the highest level since Q4 2009.