Tag: customer acquisition

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%.

With the growing need for authentication and security, fintechs must manage risk with minimal impact to customer experience. When implementing tactical approaches for fraud risk strategy operations, keeping up with the pace of fraud is another critical consideration. How can fintechs be proactive about future-proofing fraud strategies to stay ahead of savvy fraudsters while maintaining customer expectations? I sat down with Chris Ryan, Senior Fraud Solutions Business Consultant with Experian Decision Analytics, to tap into some of his insights. Here’s what he had to say: How have changes in technology added to increased fraud risk for businesses operating in the online space? Technology introduces many risks in the online space. As it pertains to the fintech world, two stand out. First, the explosion in mobile technology. The same capabilities that make fintech products broadly accessible makes them vulnerable. Anyone with a mobile device can attempt to access a fintech and try their hand at committing fraud with very little risk of being caught or punished. Second, the evolution of an interconnected, digital ‘marketplace’ for stolen data. There’s an entire underground economy that’s focused on connecting the once-disparate pieces of information about a specific individual stolen from multiple, unrelated data breaches. Criminal misrepresentations are more complete and more convincing than ever before. What are the major market drivers and trends that have attributed to the increased risk of fraud? Ultimately, the major market drivers and trends that drive fraud risk for fintechs are customer convenience and growth. In terms of customer convenience, it’s a race to meet customer needs in real time, in a single online interaction, with a minimally invasive request for information. But, serving the demands of good customers opens opportunities for identity misuse. In terms of growth, the pressure to find new pockets of potential customers may lead fintechs into markets where consumer information is more limited, so naturally, there are some risks baked in. Are fintechs really more at risk for fraud? If so, how are fintechs responding to this dynamic threat? The challenge for many fintechs has been the prioritization of fraud as a risk that needs to be addressed. It’s understandable that fintech’s initial emphasis had to be the establishment of viable products that meet the needs of their customers. Obviously, without customers using a product, nothing else matters. Now that fintechs are hitting their stride in terms of attracting customers, they’re allocating more of their attention and innovative spirit to other areas, like fraud. With the right partner, it’s not hard for fintechs to protect themselves from fraud. They simply need to acquire reliable data that provides identity assurance without negatively impacting the customer experience. For example, fintechs can utilize data points that can be extracted from the communications channel, like device intelligence for example, or non-PII unique identifiers like phone and email account data. These are valuable risk indicators that can be collected and evaluated in real time without adding friction to the customer experience. What are the major fraud risks to fintechs and what are some of the strategies that Risk Managers can implement to protect their business? The trends we’ve talked about so far today have focused more on identity theft and other third-party fraud risks, but it’s equally important for fintechs to be mindful of first party fraud types where the owner of the identity is the culprit. There is no single solution, so the best strategy recommendation is to plan to be flexible. Fintechs demonstrate an incredible willingness to innovate, and they need to make sure the fraud platforms they pick are flexible enough to keep pace with their needs. From your perspective, what is the future of fraud and what should fintechs consider as they evolve their products? Fraud will continue to be a challenge whenever something of value is made available, particularly when the transaction is remote and the risk of any sort of prosecution is very low. Criminals will continue to revise their tactics to outwit the tools that fintechs are using, so the best long-term defense is flexibility. Being able to layer defenses, explore new data and analytics, and deploy flexible and dynamic strategies that allow highly tailored decisions is the best way for fintechs to protect themselves. Digital commerce and the online lending landscape will continue to grow at an increasing pace – hand-in-hand with the opportunities for fraud. To stay ahead of fraudsters, fintechs must be proactive about future-proofing their fraud strategies and toolkits. Experian can help. Our Fintech Digital Onboarding Bundle provides a solid baseline of cutting-edge fraud tools that protect fintechs against fraud in the digital space, via a seamless, low-friction customer experience. More importantly, the Fintech Digital Onboarding Bundle is delivered through Experian’s CrossCore platform—the premier platform in the industry recognized specifically for enabling the expansion of fraud tools across a wide range of Experian and third-party partner solutions. Click here to learn more or to speak with an Experian representative. Learn More About Chris Ryan:  Christopher Ryan is a Senior Fraud Solutions Business Consultant. He delivers expertise that helps clients make the most from data, technology and investigative resources to combat and mitigate fraud risks across the industries that Experian serves. Ryan provides clients with strategies that reduce losses attributable to fraudulent activity. He has an impressive track record of stopping fraud in retail banking, auto lending, deposits, consumer and student lending sectors, and government identity proofing. Ryan is a subject matter expert in consumer identity verification, fraud scoring and knowledge-based authentication. His expertise is his ability to understand fraud issues and how they impact customer acquisition, customer management and collections. He routinely helps clients review workflow processes, analyze redundancies and identify opportunities for process improvements. Ryan recognizes the importance of products and services that limit fraud losses, balancing expense and the customer impact that can result from trying to prevent fraud.

Fintech is quickly changing. The word itself is synonymous with constant innovation, agile technology structures and being on the cusp of the future of finance. The rapid rate at which fintech challengers are becoming established, is in turn, allowing for greater consumer awareness and adoption of fintech platforms. It would be easy to assume that fintech adoption is predominately driven by millennials. However, according to a recent market trend analysis by Experian, adoption is happening across multiple generational segments. That said, it’s important to note the generational segments that represent the largest adoption rates and growth opportunities for fintechs. Here are a few key stats: Members of Gen Y (between 24-37 years old) account for 34.9% of all fintech personal loans, compared to just 24.9% for traditional financial institutions. A similar trend is seen for Gen Z (between 18-23 years old). This group accounts for 5% of all fintech personal loans as compared to 3.1% for traditional Let’s take a closer look at these generational segments… Gen Y represents approximately 19% of the U.S. population. These consumers, often referred to as “millennials,” can be described as digital-centric, raised on the web and luxury shoppers. In total, millennials spend about $600 billion a year. This group has shown a strong desire to improve their credit standing and are continuously increasing their credit utilization. Gen Z represents approximately 26% of the U.S. population. These consumers can be described as digital centric, raised on the social web and frugal. The Gen Z credit universe is growing, presenting a large opportunity to lenders, as the youngest Gen Zers become credit eligible and the oldest start to enter homeownership. What about the underbanked as a fintech opportunity? The CFPB estimates that up to 45 million people, or 24.2 million households, are “thin-filed” or underbanked, meaning they manage their finances through cash transactions and not through financial services such as checking and savings accounts, credit cards or loans. According to Angela Strange, a general partner at Andreessen Horowitz, traditional financial institutions have done a poor job at serving underbanked consumers affordable products. This has, in turn, created a trillion-dollar market opportunity for fintechs offering low-cost, high-tech financial services. Why does all this matter? Fintechs have a unique opportunity to engage, nurture and grow these market segments early on. As the fintech marketplace heats up and the overall economy begins to soften, diversifying revenue streams, building loyalty and tapping into new markets is a strategic move. But what are the best practices for fintechs looking to build trust, engage and retain these unique consumer groups? Join us for a live webinar on November 12 at 10:00 a.m. PST to hear Experian experts discuss financial inclusion trends shaping the fintech industry and tactical tips to create, convert and extend the value of your ideal customers. Register now

As we enter 2017, it’s no surprise people are buying and selling online and using their mobile devices more than ever. At the close of November, Adobe released its online shopping data from Black Friday, Cyber Monday, and the overall holiday season. According to the data, the major November holiday shopping season was driving close to $40 billion in online and mobile revenue alone — a 7.4% increase year-over-year! Every year, we see tremendous growth in spending through online and mobile channels. Interestingly, this pattern is not just indicative of consumer spending and overall market confidence. The consumer pattern also illustrates a clear change in communication preferences — with the ever-present shift toward digital. In general, consumers are interacting more and more through both online and mobile channels for all of their personal needs, including banking and financial services; and the lending community is anxious to continue connecting to consumers where they need them most. No longer is digital communication the “cool thing to do,” but rather it is essential. While Experian’s lending customers still find tremendous success in direct mail prospecting, many financial institutions are preparing to implement an enhanced acquisition strategy in 2017. This strategy includes multi-channel prospecting initiatives to present consumers with preapproved credit offers. In addition to direct mail, our customers are evaluating digital channels such as email, mobile, and other online channels to improve the overall consumer experience and responsiveness. In the latest Digital Banking Report, published in July 2016, email is the top channel financial marketers are turning to for cross-channel marketing after the initial onboarding process (as illustrated in chart 49), but you can see social media and retargeting are rising in the ranks. In Sept., 2016, Experian was named one of the top 100 most innovative companies for a third year by Forbes magazine. A key part of that success was driven by investments in Experian’s Data Lab and Experian Marketing Service’s Audience Engine, which is an audience management platform that changes the way the advertising industry buys and measures media. We are focused on meeting our customers and the consumer where they need us most. Bottom line? As you refine your goals for 2017, the financial services sector should dig deeper when making connections. They must reach consumers where they want to connect – and that means a successful credit marketing strategy will be one that includes both direct mail and digital communications. A new year is the perfect time to re-evaluate those same-old, same-old marketing and acquisition tactics. We're not saying you need to abandon direct mail, but it is certainly time for lenders to complement their direct mail efforts with a savvy digital plan as well. Resolve to do it better in 2017.

Prescriptive solutions: Get the Rx for your right course of action By now, everyone is familiar with the phrase “big data” and what it means. As more and more data is generated, businesses need solutions to help analyze data, determine what it means and then assist in decisioning. In the past, solutions were limited to simply describing data by creating attributes for use in decisioning. Building on that, predictive analytics experts developed models to predict behavior, whether that was a risk model for repayment, a propensity model for opening a new account or a model for other purposes. The next evolution is prescriptive solutions, which go beyond describing or predicting behaviors. Prescriptive solutions can synthesize big data, analytics, business rules and strategies into an environment that provides businesses with an optimized workflow of suggested options to reach a final decision. Be prepared — developing prescriptive solutions is not simple. In order to fully harness the value of a prescriptive solution, you must include a series of minimum capabilities: Flexibility — The solution must provide users the ability to make quick changes to strategies to adjust to market forces, allowing an organization to pivot at will to grow the business. A system that lacks agility (for instance, one that relies heavily on IT resources) will not be able to realize the full value, as its recommendations will fall behind current market needs. Expertise — Deep knowledge and a detailed understanding of complex business objectives are necessary to link overall business goals to tactical strategies and decisions made about customers. Analytics — Both descriptive and predictive analytics will play a role here. For instance, the use of a layered score approach in decisioning — what we call dimensional decisioning — can provide significant insight into a target market or customer segment. Data — It is assumed that most businesses have more data than they know what to do with. While largely true, many organizations do not have the ability to access and manage that data for use in decision-making. Data quality is only important if you can actually make full use of it. Let’s elaborate on this last point. Although not intuitive, the data you use in the decision-making process should be the limiting factor for your decisions. By that, I mean that if you get the systems, analytics and strategy components of the equation right, your limitation in making decisions should be data-driven, and not a result of another part of the decision process. If your prescriptive environment is limited by gaps in flexibility, expertise or analytic capabilities, you are not going to be able to extract maximum value from your data. With greater ability to leverage your data — what I call “prescriptive capacity” — you will have the ability to take full advantage of the data you do have. Taking big data from its source through to the execution of a decision is where prescriptive solutions are most valuable. Ultimately, for a business to lead the market and gain a competitive advantage over its competitors — those that have not been able to translate data into meaningful decisions for their business — it takes a combination of the right capabilities and a deep understanding of how to optimize the ecosystem of big data, analytics, business rules and strategies to achieve success.

Attract and retain high-value demand deposit accounts The excitement of the new year has ended, and now the big question remains: What will 2016 hold for our market and the economy? So far, we’ve seen this election year bring a volatile financial market: The Federal Reserve increased short-term interest rates by 25 basis in December, and there is uncertainty if and when future increases will come China’s gross domestic product is forecasted at 6.5 percent, the lowest in a quarter century The Dow Jones industrial average is down 10 percent to start the year, signaling a lot of uncertainty for banks and consumers It’s hard to find answers in a shifting financial landscape with a long list of mixed signals. The average consumer is looking on and wondering if we face another Great Recession or if the current economy is spiking a fever just before it is completely cured. The reality, for those of us in the banking industry, is that the modest economic recovery is likely to continue as part of a new normal pattern. In 2016, banks that remain competitive in a more digital world will be those that have frictionless products and processes to attract and retain high-value, highly sought-after consumer deposits and loans. Banks should expect the competition for deposits to intensify, and they will need to ensure that new deposit customers are on boarded effectively and cross-sold loan products quickly to reduce first-year attrition. Cross-selling at the point of origination for the demand deposit account (DDA) customers is the best way to ensure that new customers keep the institution as their primary bank. Financial institutions can exceed consumer expectations and ensure a competitive business model by leveraging modernized technology capabilities fully in combination with making relevant decisions to deliver consumer-friendly experiences. First-year DDA attrition rates will demonstrate how the consumer’s expectations were met and if the new bank got the account-opening process right or wrong. Experian® suggests three capabilities clients should consider: A deposits technology platform that offers frictionless change to data, origination strategies and instant cross-sell to loan products that yield sticky customers Strategies that comply with current and evolving regulatory demands, such as those being sought by the Consumer Financial Protection Bureau (CFPB) Business planning to identify execution gaps and a road map to ensure that gaps are addressed, confirming continued competitive ability to attract high-value deposit and loan customers DDA-account opening effectiveness can be achieved by using a consumer’s life stage, affordability considerations, unique risk profile and financial needs to on board optimally and grow those high-value consumers effectively and efficiently. Financial institutions that are nimble and fast adopters of these critical capabilities will reduce operating expenses for their organizations, grow sustainable revenue from new prospects and customers, and delight those new customers along the way. This is a win-win for banks and consumers. Join me next week as we discuss best practices across the entire demand deposit account life cycle.