Tag: credit data

    This article was updated on September 11, 2023. According to research, only 15% of American consumers have swapped out their go-to credit card in the past year and spend more money both online and offline with the card they designate as their top-of-wallet card. With over 578 million existing credit card accounts in the U.S., here are four top-of-wallet strategies to keep your card top of mind: Go digital In today’s digital world, the rules of customer engagement are changing – and card issuers must develop their digital capabilities, including identity resolution, to keep pace. Cardholders enjoy (and expect) the convenience of being able to apply for credit, track their purchases, make payments and view their monthly statements on-the-go. Another popular phenomenon? Digital wallets. Also known as e-wallets, these house digital versions of credit or debit cards and are stored in an app or a mobile device. Digital wallets can be used in conjunction with mobile payment systems, allowing customers to store digital coupons and pay for purchases with their smartphones. Financial institutions that digitally transform and adapt to these new dynamics can more efficiently service and retain their customers. Prioritize fraud prevention As customers’ affinity for e-commerce rises and cyberthieves grow smarter and more sophisticated, card issuers must improve their security measures and increase their focus on cutting-edge fraud management solutions. Not only should you be familiar with the many ways that criminals steal customer payment information, but you should ensure customers that you have multiple lines of defense against cyber threats. Many financial institutions have added digital “on/off switches,” allowing customers to remotely turn off their credit or debit card should they have misplaced it or suspect that they’re a victim of identity theft. With credit card fraud being the most prevalent in identity theft cases, failing to properly safeguard your customers impacts not only their experience but also your ability to grow revenue. Create a single customer view A single customer view is a consolidated, consistent and holistic representation of the data known by an organization about its customers. And according to Experian research, 68% of businesses are currently attempting to implement this type of strategy. By achieving a consolidated customer view, you can attain better consumer insight and fully understand your cardmembers’ needs and buying preferences. Careful tracking of all customer interactions enables you to target more accurately and implement effective marketing strategies. Provide incentives According to Experian research, 58% of consumers select credit cards based on rewards. The top incentives when selecting a rewards card include cashback, gas rewards and retail gift cards. Rewarding loyalty with ongoing benefits goes a long way to encourage customers to keep your credit card top of wallet but it’s also important to figure out what works – and what doesn’t. Bonus tip: Optimize credit limit management Managing credit limits is just as important as setting optimal credit limits from the get-go. Consumer credit needs will evolve over time along with their income and ability to pay. The key here is being able to identify qualified customers who can take on higher spending limits and also have a need. Leveraging advanced analytics models and a proactive credit limit management strategy can help you uncover areas of opportunity to increase wallet share and push your card toward that coveted top-of-wallet spot — or remain there. We recommend reviewing your credit limits at a regular cadence, but especially ahead of periods of increased spending such as the holiday season. In today’s competitive marketplace, getting your credit card top of wallet isn’t easy. That’s why we’re here to help. Experian’s comprehensive view of consumer credit data and best-in-class account management solutions help you target higher-spending customers and promote top-of-wallet use. Learn more

The challenges facing today’s marketers seem to be mounting and they can feel more pronounced for financial institutions. From customizing messaging and offerings at an individual customer level, increasing conversion rates, moving beyond digital while keeping an eye on traditional channels, and more, financial marketers are having to modernize their approach to customer acquisition. The most forward-thinking financial firms are turning to customer acquisition engines to help them best build, test and optimize their custom channel targeting strategies faster than ever before. But what functionality is right for your company? Here are 5 capabilities you should look for in a modern customer acquisition engine. Advanced Segmentation It’s without question that targeting and segmentation are vital to a successful financial marketing strategy. Make sure you select a tool that allows for advanced segmentation, ensuring the ability to uncover lookalike groups with similar attributes or behaviors and then customize messages or offerings accordingly. With the right customer acquisition engine, you should be able to build filters for targeted segments using a range of data including demographic, past behavior, loyalty or transaction history, offer response and then repurpose these segments across future campaigns. Campaign Design With the right campaign design, your team has the ability to greatly affect customer engagement. The right customer acquisition engine will allow your team to design a specific, optimized customer journey and content for each of the segments you create. When you’re ready to apply your credit criteria to the audience to generate a pre-screen, the best tools will allow you to view the size of your list adjusted in real-time. Make sure to look for an acquisition engine that can do all of this easily with a drag and drop user experience for faster and efficient campaign design. Rapid Deployment Once you finalize your audience for each channel or offer, the clock starts ticking. From bureau processing, data aggregation, targeting and deployment, the data that many firms are currently using for prospecting can be at least 60-days. When searching for a modern customer acquisition engine, make sure you choose a tool that gives you the option to fetch the freshest data (24-48 hours) before you deploy. If you’re sending the campaign to an outside firm to execute, timing is even more important. You’ll also want a system that can encrypt and decrypt lists to send to preferred partners to execute your marketing campaign. Support Whether you have an entire marketing department at your disposal or a lean, start-up style team, you’re going to want the highest level of support when it comes to onboarding, implementation and operational success. The best customer acquisition solution for your company will have a robust onboarding and support model in place to ensure client success. Look for solutions that offer hands-on instruction, flexible online or in-person training and analytical support. The best customer acquisition tool should be able to take your data and get you up and running in less than 30 days. Data, Data and more Data Any customer acquisition engine is only as good as the data you put into it. It should, of course, be able to include your own client data. However, relying exclusively on your own data can lead to incomplete analysis, missed opportunities and reduced impact. When choosing a customer acquisition engine, pick a system that gives your company access to the most local, regional and national credit data, in addition to alternative data and commercial data assets, on top of your own data. The optimum solutions can be fueled by the analytical power of full-file, archived tradeline data, along with attributes and models for the most robust results. Be sure your data partner has accounted for opt-outs, excludes data precluded by legal or regulatory restrictions and also anonymizes data files when linking your customer data. Data accuracy is also imperative here. Choose a marketing and technology partner who is constantly monitoring and correcting discrepancies in customer files across all bureaus. The best partners will have data accuracy rates at or above 99.9%.

In today’s ever-changing and hypercompetitive environment, the customer experience has taken center-stage – highlighting new expectations in the ways businesses interact with their customers. But studies show financial institutions are falling short. In fact, a recent study revealed that 94% of banking firms can’t deliver on the “personalization promise.” It’s not difficult to see why. Consumer preferences have changed, with many now preferring digital interactions. This has made it difficult for financial institutions to engage with consumers on a personal level. Nevertheless, customers expect seamless, consistent, and personalized experiences – that’s where the power of advanced analytics comes into play. It’s no secret that using advanced analytics can enable businesses to turn rich data into insights that lead to confident business decisions and strategy development. But these business tools can actually help financial institutions deliver on that promise of personalization. According to an Experian study, 90% of organizations say that embracing advanced analytics is critical to their ability to provide an excellent customer experience. By using data and analytics to anticipate and respond to customer behavior, companies can develop new and creative ways to cater to their audiences – revolutionizing the customer experience as a whole. It All Starts With Data Data is the foundation for a successful digital transformation – the lack of clean and cohesive datasets can hinder the ability to implement advanced analytic capabilities. However,  89% of organizations face challenges on how to effectively manage and consolidate their data, according to Experian’s Global Data Management Research Benchmark Report of 2019. Because consumers prefer digital interactions, companies have been able to gather a vast amount of customer data. Technology that uses advanced analytic capabilities (like machine learning and artificial intelligence) are capable of uncovering patterns in this data that may not otherwise be apparent, therefore opening doors to new avenues for companies to generate revenue. To start, companies need a strategy to access all customer data from all channels in a cohesive ecosystem – including data from their own data warehouses and a variety of different data sources. Depending on their needs, the data elements can come from a third party data provider such as: a credit bureau, alternative data, marketing data, data gathered during each customer contact, survey data and more. Once compiled, companies can achieve a more holistic and single view of their customer. With this single view, companies will be able to deliver more relevant and tailored experiences that are in-line with rising customer expectations. From Personalized Experiences to Predicting the Future The most progressive financial institutions have found that using analytics and machine learning to conquer the wide variety of customer data has made it easier to master the customer experience. With advanced analytics, these companies gain deeper insights into their customers and deliver highly relevant and beneficial offers based on the holistic views of their customers. When data is provided, technology with advanced analytic capabilities can transform this information into intelligent outputs, allowing companies to optimize and automate business processes with the customer in mind. Data, analytics and automation are the keys to delivering better customer experiences. Analytics is the process of converting data into actionable information so firms can understand their customers and take decisive action. By leveraging this business intelligence, companies can quickly adapt to consumer demand. Predictive models and forecasts, increasingly powered by machine learning, help lenders and other businesses understand risks and predict future trends and consumer responses. Prescriptive analytics help offer the right products to the right customer at the right time and price. By mastering all of these, businesses can be wherever their customers are. The Experian Advantage With insights into over 270 million customers and a wealth of traditional credit and alternative data, we’re able to drive prescriptive solutions to solve your most complex market and portfolio problems across the customer lifecycle – while reinventing and maintaining an excellent customer experience. If your company is ready for an advanced analytical transformation, Experian can help get you there. Learn More

Retailers are already starting to display their Christmas decorations in stores and it’s only early November. Some might think they are putting the cart ahead of the horse, but as I see this happening, I’m reminded of the quote by the New York Yankee’s Yogi Berra who famously said, “It gets late early out there.” It may never be too early to get ready for the next big thing, especially when what’s coming might set the course for years to come. As 2019 comes to an end and we prepare for the excitement and challenges of a new decade, the same can be true for all of us working in the lending and credit space, especially when it comes to how we will approach the use of alternative data in the next decade. Over the last year, alternative data has been a hot topic of discussion. If you typed “alternative data and credit” into a Google search today, you would get more than 200 million results. That’s a lot of conversations, but while nearly everyone seems to be talking about alternative data, we may not have a clear view of how alternative data will be used in the credit economy. How we approach the use of alternative data in the coming decade is going to be one of the most important decisions the lending industry makes. Inaction is not an option, and the time for testing new approaches is starting to run out – as Yogi said, it’s getting late early. And here’s why: millennials. We already know that millennials tend to make up a significant percentage of consumers with so-called “thin-file” credit reports. They “grew up” during the Great Recession and that has had a profound impact on their financial behavior. Unlike their parents, they tend to have only one or two credit cards, they keep a majority of their savings in cash and, in general, they distrust financial institutions. However, they currently account for more than 21 percent of discretionary spend in the U.S. economy, and that percentage is going to expand exponentially in the coming decade. The recession fundamentally changed how lending happens, resulting in more regulation and a snowball effect of other economic challenges. As a result, millennials must work harder to catch up financially and are putting off major life milestones that past generations have historically done earlier in life, such as homeownership. They more often choose to rent and, while they pay their bills, rent and other factors such as utility and phone bill payments are traditionally not calculated in credit scores, ultimately leaving this generation thin-filed or worse, credit invisible. This is not a sustainable scenario as we enter the next decade. One of the biggest market dynamics we can expect to see over the next decade is consumer control. Consumers, especially millennials, want to be in the driver’s seat of their “credit journey” and play an active role in improving their financial situations. We are seeing a greater openness to providing data, which in turn enables lenders to make more informed decisions. This change is disrupting the status quo and bringing new, innovative solutions to the table. At Experian, we have been testing how advanced analytics and machine learning can help accelerate the use of alternative data in credit and lending decisions. And we continue to work to make the process of analyzing this data as simple as possible, making it available to all lenders in all verticals. To help credit invisible and thin-file consumers gain access to fair and affordable credit, we’ve recently announced Experian Lift, a new suite of credit score products that combines exclusive traditional credit, alternative credit and trended data assets to create a more holistic picture of consumer creditworthiness that will be available to lenders in early 2020. This new Experian credit score may improve access to credit for more than 40 million credit invisibles. There are more than 100 million consumers who are restricted by the traditional scoring methods used today. Experian Lift is another step in our commitment to helping improve financial health of consumers everywhere and empowers lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. This isn’t just a trend in the United States. Brazil is using positive data to help drive financial inclusion, as are others around the world. As I said, it’s getting late early. Things are moving fast. Already we are seeing technology companies playing a bigger role in the push for alternative data – often powered by fintech startups. At the same time, there also has been a strong uptick in tech companies entering the banking space. Have you signed up for your Apple credit card yet? It will take all of 15 seconds to apply, and that’s expected to continue over the next decade. All of this is changing how the lending and credit industry must approach decision making, while also creating real-time frictionless experiences that empower the consumer. We saw this with the launch of Experian Boost earlier this year. The results speak for themselves: hundreds of thousands of previously thin-file consumers have seen their credit scores instantly increase. We have also empowered millions of consumers to get more control of their credit by using Experian Boost to contribute new, positive phone, cable and utility payment histories. Through Experian Boost, we’re empowering consumers to play an active role in building their credit histories. And, with Experian Lift, we’re empowering lenders to identify consumers who may otherwise be excluded from the traditional credit ecosystem. That’s game-changing. Disruptions like Experian Boost and newly announced Experian Lift are going to define the coming decade in credit and lending. Our industry needs to be ready because while it may seem early, it’s getting late.

Alternative Data Shedding New Light on Consumers Why Investors Want Alternative Data Banks and Tech Firms Battle Over Something Akin to Gold: Your Data Alternative data for credit has created national headlines in the past year and a lasting buzz in the financial services world. But what exactly qualifies as alternative data in credit? How can it benefit lenders? Consumers? Ask two people these questions and you may get very different answers. Experian defines alternative data as FCRA-compliant data points that are not typically considered when evaluating a potential customer’s creditworthiness. These data points may include rent payments; utility payments, including gas, electric; telecommunications payments, such as mobile telephones; insurance payments; and any other recurring financial obligations. Taking these alternative data points into account can benefit consumers and lenders in multiple ways. Consider that roughly 45 million Americans have either no credit history, or a credit history that is too scarce or outdated to manufacture a credit score. This group of consumers includes not only minority consumers or those from low income neighborhoods, but also the shared economy workforce and millennials without traditional credit histories. Some estimate 121 million U.S. adults are credit-challenged with thin-to-no credit file and subprime credit scores below 600. “People with little or no credit history, or who lack a credit score, have fewer opportunities to borrow money to build a future, and any credit that is available usually costs more,” said Richard Cordray, while he was director of the Consumer Financial Protection Bureau. Indeed, these consumers are in a catch-22; many lenders will not lend to consumers with credit scores of under 620. In turn, these consumers have trouble building credit, and they are blocked from achieving goals like buying a car, owning a home or starting a business. By combining credit reports with alternative data, a more complete picture of subprime, near-prime and thin-file consumers can develop. And analysis of this data can help lenders evaluate a consumer’s ability to pay. When alternative data like rent payments and an individual’s short term lending history are trended appropriately, it can be an accurate predictor of an individual’s financial behavior, and can be an important step toward promoting greater financial inclusion for more consumers. In addition to using alternative data in underwriting, lenders can leverage the data to help with: Expanding the prospecting universe. Data can be used to enrich batch prospecting decisioning criteria to identify better qualified prospects, suppress high-risk consumers, and offer a more complete borrowing history Account review. Alternative data can help signal a consumer’s financial distress earlier, better manage credit lines and grow relationships with existing consumers. Collections. Identify consumers who are rebuilding credit with specialty finance trades, or who are exhibiting high-risk behaviors in the alternative financial services space. More info on Alternative Credit Data More Info on Alternative Financial Services

The housing market continues to recover, with mortgage originations increasing 12 percent year over year, moving from $508 billion to $570 billion.