Unemployment inches up as job growth slows I’m excited to share the current Experian Commercial Pulse Report with you. I have the opportunity each week to analyze data on the millions of U.S. small businesses in Experian’s database and discover actionable insights that benefit our clients. Making these discoveries is rewarding work, and we utilize these insights to guide our recommendations. I thought I would share what I am watching through Experian’s bi-weekly Commercial Pulse Report (just bookmark the link; we will update it on a bi-weekly basis). What I am watching: The U.S. population and labor force are experiencing a major transformation Aging Baby Boomers are changing the U.S. labor market. The only age group whose labor force participation rate is projected to rise are people 75 and older. Birth rates declined 50% since 1950. The median employment age is expected to grow from 39.9 in 2002 to 42.8 years old in 2032. That’s a quick take – Download the latest report. Download Commercial Pulse Report

Experian is very pleased to announce the release of the Q1 2024 Main Street Report. Join us for a deep dive on Q1 performance Experian will share key findings from our Q1 Main Street Report in the Quarterly Business Credit Review: Tuesday, June 4th, 10:00 a.m. Pacific | 1:00 p.m. Eastern Register to attend Strength in the economy pushes through inflation The U.S. (United States) economy demonstrated resilience in the first quarter of 2024, driven by robust consumer spending and a solid labor market. Contrary to previous fears of a recession, consumer willingness to participate in markets has remained high as the confidence building favorable labor market conditions encourage an anxious consumer to keep spending. As we move into the second quarter of 2024, the economic landscape offers a diverse array of both opportunities and challenges for small businesses. Spending during the first quarter exceeded expectations, providing much-needed cash flow for small businesses. This influx of capital has enabled small firms to reduce debt and consider future growth and capital expenditures. Despite inflationary pressures and tighter lending conditions, the outlook remains cautiously optimistic. The Federal Reserve’s anticipated rate cuts, expected to begin late in 2024, could further stimulate economic activity and provide a boost to small businesses. Download your copy of the latest report for details. Download Q1 2024 report now

Effective marketing strategies for insurance agents and brokers to boost ROI and client engagement. One of the key questions we often explore is how to maximize the ROI of marketing campaigns and effectively target specific business niches. In this Experian Business Chat, we dive into the challenges that commercial insurance agents and brokers face as they try to launch successful marketing strategies in an ever-evolving digital landscape. Joining me in this discussion are two of Experian’s top experts. Dan Mullooly, our Director of Product Management, manages the strategy and roadmap for the Commercial Insurance Vertical. Accompanying him is Tony Romero, a Senior Product Manager with a rich background in developing our marketing solutions. Watch Our Business Chat Interview Subscribe To Our YouTube Channel Experian experts talk about solutions to help insurers jump-start their marketing In our business chat, Dan introduced the Rapid Growth SMB Bundle, a new offering designed specifically for brokers and agents grappling with outdated marketing tools. This bundle is crafted to rejuvenate their marketing efforts and deliver the results they’re looking for. Dan shared that the bundle was inspired by common issues within the insurance space, as reported by clients. These challenges include difficulties in executing high-performing marketing campaigns due to inadequate or stale data and a lack of effective data usage and analytics in their campaign strategies. He pointed out that brokers or agents who incorporate data and analytics into their campaigns see notable success, especially in personalization and targeted marketing, which significantly boosts lead conversion rates. Dan also emphasized the advantages of focusing on existing clients for easier and more profitable upselling, which can be up to twelve times more likely to secure new business from an existing client than from a new prospect. Dan also explained how the bundle addresses these issues by refining audience targeting, enhancing message reception, and identifying the optimal risks for clients' specific needs. He highlighted the importance of a multi-channel marketing approach, integrating direct mail with digital strategies like email campaigns to improve reach and conversion rates. Tony then took over to detail the three tiers of the Rapid Growth SMB Bundle—Essentials, Intermediate, and Advanced. Each tier is designed to cater to different levels of client sophistication and marketing needs, from enriching lead data to advanced analytics and segmentation. Tony also outlined the unique aspects of Experian's offerings, including our comprehensive data capabilities that provide a 360-degree view of prospects, our superior small business database, and the rapid deployment of tailored marketing strategies. " We can help by really helping to hone in on some of those audiences you're truly after, to make sure that your messaging is well received, and also make sure that we're identifying the best risks for your particular appetite." Dan Mullooly, Dir. Product ManagementExperian If the Rapid Growth SMB Bundle sounds like something that could benefit your business, I encourage you to contact your Experian Commercial Insurance Account Executive to start tailoring a strategy that fits your needs. What follows below is a lightly edited transcript of our discussion: Gary Stockton: Hello everyone and welcome to Business Chat. Today's conversation focuses on challenges faced by commercial agents and brokers to quickly deploy successful marketing strategies as the digital landscape continues to evolve. Are you challenged to maximize the ROI of your current marketing campaigns? Is it difficult for you to target business niches based on granular demographics? I'm joined by two of our experts. Dan Mallooly is the Director of Product Management who manages our strategy and roadmap for the Commercial Insurance Vertical. Dan is joined by Tony Romero, a senior product manager with Experian, who has an extensive background in developing our marketing solutions.Gentlemen, welcome. Gary Stockton: Dan and Tony, we just introduced a new bundle offering called Rapid Growth SMB Bundle. Who do we have in mind when we made the decision to bundle a set of solutions? Dan Mullooly: So the primary audience we're trying to help here are brokers and agents who have been using outdated solutions that are no longer getting them to the results they want. So, we really tried to cater this bundled offering to that particular audience. Gary Stockton: Can you talk about what we see in the insurance space that led us to create the bundle? Dan Mullooly: The clients that we've spoken with have expressed a few common challenges across the board. One of them is being able to execute high-performing marketing campaigns. And they've expressed some issues with things like not having enough data or, I should say, inadequate data. Also, the data that they have might become stale. So, they might not be reaching out to the right contact information that they once had for a particular customer. The other thing that we hear is that there's a lack of data and analytics within the process of running their marketing campaigns. So, they don't have a good understanding of whether or not a campaign is working or not working. And so we really try to help them with understanding through our solutions, help them understand how they could overcome some of these challenges and get a better return of a better ROI from some of the solutions we can help to offer. Gary Stockton: So, what market insights are you following related to the space's winners and how they use data and analytics? Dan Mullooly: First and foremost, I'd say those brokers or agents who embrace data and analytics within their campaigns to do things like further personalization or target specific segments. We see a sense of success, which typically leads to a significant increase in lead conversion rates for these campaigns. We also see opportunities for some of our customers to look at the existing book that they have before they go out and try to prospect for new businesses and really look inside that book and say, Hey, where can I have a meaningful impact on some of the customers I already have? It's well known that selling to an existing customer is much easier than selling to a new prospect. From some of the analyses we've seen, we see that this trend could be anywhere from three to twelve times more likely to win over new business from an existing client than from a prospect. So, our solutions are geared to help with some of these key insights and trends that we're seeing in the marketplace. Tony will talk about those in a little bit. Gary Stockton: Can you describe some of the problems clients face that are being addressed with these bundled solutions? Dan Mullooly: There's a lot of competition in the market, first and foremost. We see many of our clients trying to capture the same audiences. They're trying to go after those good risks. On the backend, we see areas where there's just not enough differentiation within their marketing efforts. We can help by really helping to hone in on some of those audiences you're truly after, to make sure that your messaging is well received, and also make sure that we're identifying the best risks for your particular appetite. Second, we see agents and brokers who are just using traditional methods, which are not having the profound impact that they might have once had within the industry. We see things like just using direct mailers, and really, you have to go beyond just doing that; it's not enough for today's landscape. So, there are additive ways that we can help with solutions, such as combining your direct mail with maybe an email campaign. When you do this, you're trying to have multiple touchpoints with customers that you're targeting. And then lastly is just really helping to enable more of a digital strategy for marketing efforts. Again, going back to the direct mail, if you're just going the direct mail route and you don't have a digital strategy, you will have a difficult time reaching the audiences and having better conversion rates. What's the takeaway from here? Consistently delivering your messages across multiple channels will help you in 2024 and beyond as the marketing landscape evolves. Gary Stockton: Tony, tell me more about the new Rapid Growth SMB bundle for insurance. Tony Romero: When Dan came to me with the needs and concerns of the carriers, agents and brokers, we sat down and collaborated on a very focused bundle. And these options were designed to effectively maximize our client's marketing budget across their customer life cycle or across their levels of sophistication. Overall, we have a very comprehensive marketing toolkit. But we want it to be very focused. And so, we defined essential options, intermediate and advanced. Gary Stockton: What does each of the options include? Can you go into a further detail? Tony Romero: Yes. Before I do, I just wanted to mention that we view ourselves as marketing advisors, trusted consultants who help identify the right marketing strategy for our clients. What's the right data to be used? What are the right services to be utilized? What's the timing? So all of that comes together to help our clients truly maximize their campaigns. So, with these options, we have the essential package, which, as Dan mentioned, is focused on existing client bases. So, our clients who want to upsell or cross sell to their existing customer base, this is the right package here, and it includes our lead list, which includes over 17 million verified business records with contacts. As Dan mentioned, some of our clients have stale data. First and foremost, you want to be able to make sure that data is correct and current. So our lead list can help to ensure that we're filling in the gaps where any data is missing or to fix stale or incorrect data. Secondly, we have our consumer-to-business linkage capability, which is where our clients can look at their consumer customer base and identify individuals who are also involved with a business and be able to promote business products to those individuals who have businesses. Lastly, to Dan's point, we can provide email capabilities to provide a multi-channel marketing approach. This includes not only providing business emails and or consumer emails, but we can also act as an agency where we're helping to develop creative. We can deploy an email campaign. We can track the level of engagement and conversions on emails. So, we can provide the full gamut in order to create those multi touch points. Now, along with this, we can provide analytic services. This is for both the essential and the intermediate packages. So we can start by doing simple profiling or segmentation, which is identifying certain key attributes on which you might want to focus a marketing campaign. So that could be certain industries. It could be geo-location. It could be the company size or revenue, whatever elements you want to add to a profile, and we can do that to identify the right prospects to go market to. Secondly, we can also do what's called a lookalike analysis, which is another step further. With lookalike analysis, you're looking at your existing customer base. You identify who are the ideal customers. What are their attributes? Why did they convert? Being able to use those levels of attributes to identify a marketing or prospect list that has similar attributes to be promoted certainly leads to higher conversion rates. Next is the intermediate option, and that's now where a client may focus instead of focusing on marketing towards their existing client base, now they want to look outside the four walls or out to the open market and doing more of a true prospecting. And so here's where the intermediate package plays in. We provide on top of the essential package, we provide, lead enrichment. We can provide data hygiene to ensure that all of the data that we're prospecting to is the most current and accurate. In addition, we also can provide an omni-channel marketing approach. And this is where instead of having a disjointed direct mail and a disjointed email, marketing campaign, we really combine this now into more of a unified marketing campaign where you're making sure that the timing, the messaging, the call to action is unified between a direct mail piece, email and or social media altogether combined and tracking the, the conversions and the engagement rates to make sure that you can learn from it for the next round of marketing. And lastly, we have our advanced option. The advanced option now brings in a higher level of a data-driven set of strategies. For example, we can do higher levels of segmentation, we can do prescreen and prequalification campaigns that either use just commercial data alone or commercial and consumer data together to provide a blended prescreen prequal approach. We also have Diversity and Equity Indicators to identify minority-led businesses or women-led businesses. So that's another element we can provide. On the analytics side, our commercial data scientist team can provide very predictive response models that can provide yet another level of targeting for marketing campaigns. Gary Stockton: So what's unique about the Experian offering? Tony Romero: Yeah, I'd say the way to frame this is that the depth, breadth, and accuracy of our data is unique to what we can offer here. First, I'll say that the best way to say this is a 360 view of our prospects. We can use demographic, firmographic, and risk data all together to hone in on who the right prospects are to go after and suppress the businesses that have high risk or don't fit the right profile. So, there's a lot that we can do to do with segmenting there. Also, I'll say we have a superior small business database. Our capability to identify micro businesses may not have a file at all or it's a thin file. We can still identify that, these, opportunities or prospects are worth marketing to. And, it goes beyond what most other vendors have capability to do.We also provide affordable and rapid deployment with a very data-driven refinement of our solutions. For example, once we've defined a strategy, we can deploy it within five business days. The way I like to describe our capability is again as a consultant to make it easy for our clients to define what their strategies need to be, to define what their campaigns need to look like and to measure the results of those campaigns then. Gary Stockton: It sounds like the suite of solutions you've put here, and the options you've given to agents and brokers will get them a lot faster. Dan Mullooly: Absolutely. Tony Romero: Yeah, couldn't agree more. Ease of use, being able to do rapid deployment, we're here to help. And again, we can tailor our solutions accordingly for every client. Gary Stockton: Excellent stuff. Dan, Tony, thanks so much for coming on Business Chat. You've given us a lot to think about. If the Rapid Growth SMB Bundle sounds like something that you would like to explore, please reach out to your Experian Commercial Insurance Account Executive to start a conversation. Thanks for watching everyone. Learn more about advanced marketing solutions for insurers Related Posts

The Path to Modernization Framework To complete our five-part series on the Path to Modernization framework, Erikk Kropp, Senior Product Manager at Experian, discusses APIs and external data sources and how they can increase productivity and efficiency with credit teams. Many commercial reporting agencies offer hosted websites for clients. These websites provide convenient access to various services, from credit reports to credit scores. Clients typically receive user IDs and passwords to log in and access the necessary information. However, there is a growing trend among businesses to integrate external data into their systems, leveraging it to enhance their unique processes and automate various workflows. This approach offers significant advantages over using standalone websites, especially in terms of efficiency and customization. Integrating Data with APIs A prime example of this trend can be seen in the use of APIs (Application Programming Interfaces). APIs allow businesses to import data from external sources into their internal systems, such as customer relationship management (CRM) software like Salesforce or enterprise resource planning (ERP) systems. This capability is particularly valuable for portfolio management, where companies manage risk across a broad client base. Businesses can enrich their existing information and streamline their workflows by integrating data via APIs. This integration eliminates the need for separate login credentials and makes the data readily accessible within the company’s existing processes. Moreover, it enables further automation, connecting various in-house systems to enhance overall functionality. Advantages of In-House Data Integration The primary benefit of bringing data in-house through APIs is the seamless integration into existing workflows. This integration allows businesses to append new data to their current datasets, improving data accuracy and usability. Additionally, it supports automation, reducing manual intervention and increasing operational efficiency. Another significant advantage is connecting imported data to other automated processes within the company’s software ecosystem. This connectivity facilitates more sophisticated workflows and enhances the capability to respond to business needs promptly and effectively. Implementing Segmentation Strategies Beyond risk management, integrating external data enables businesses to deploy advanced segmentation strategies. Companies can segment their client base by combining imported data with internal information to identify risks and opportunities. This segmentation can reveal the potential for upselling or cross-selling, contributing to revenue growth rather than focusing on risk mitigation.Segmentation strategies can help businesses better understand their clients, identifying areas for improvement and opportunities for growth. This comprehensive view of client data supports informed decision-making and strategic planning. The trend towards integrating external data via APIs is reshaping how businesses manage and utilize information. By bringing data in-house, companies can streamline their workflows, automate processes, and implement advanced risk management and growth strategies. This approach enhances efficiency and provides a competitive edge in today's data-driven business environment. Businesses looking to stay ahead should consider the potential of API integration and explore how it can transform their data management and operational processes.

Insights on small business credit performance Experian shared important insights on small business credit conditions and presented key findings from the Main Street Report for Q1 2024 during the Quarterly Business Credit Review. Our lead presenter, Brodie Oldham, provided his take on the macroeconomic environment and then conducted a deep dive into the Q1 Main Street Report, along with the most recent small business credit data. He highlighted what the data revealed about how small businesses were performing at the time. The session concluded with a Q&A segment, during which audience questions were addressed. Key Takeaways from the Session: Insights from leading experts on commercial and macro-economic trends Credit trends and performance metrics for over 30 million active businesses Coverage of key industry topics, including small business and business owner data Exclusive commercial credit insights unavailable elsewhere Real-time peer feedback through interactive polls Deep understanding of small business trends to support better decision-making Practical takeaways based on up-to-date credit performance data Get Notified About Future Webinars

Beyond the Trends Report is now available We are excited to announce the release of the Spring 2024 Beyond the Trends report. The report offers a unique view of the small business economy based on what we see in the data. With up-to-date information on over 33 million active businesses and how they perform from a credit standpoint, Experian will share insights and commentary on how economic conditions, public policy, and other factors might shape future small business performance. Here are a few key highlights: Economic and Financial Market Dynamics There’s cautious optimism among U.S. small businesses facing economic uncertainties and persistent inflation challenges. The Federal Reserve's policy adjustments are pivotal. They focus on managing inflation and maintaining employment stability, aiming to foster a fertile business growth and stability environment. By aiming to keep unemployment low and inflation around a manageable 2% target, the Fed is creating an environment where businesses can expect stable consumer spending and labor costs. This stability is vital for small businesses that operate with thinner margins and less buffer against shocks. Workforce and Wage Dynamics Small businesses are increasingly challenged by workforce issues, particularly in attracting and retaining talent amid competitive wage pressures from larger companies. We discuss how certain businesses have been forced to enhance their employment packages to retain staff. However, wage growth is expected to slow, potentially easing operational costs for some small businesses. Access to Capital and Credit Conditions Tighter credit conditions and rising interest rates make it increasingly difficult for small businesses to secure the necessary funding. These conditions hinder businesses' ability to expand and sustain operations, highlighting the need for strategic financial planning and exploration of alternative funding sources. Technological Advancements and Market Adaptability The rapid pace of technological change requires small businesses to continuously update their operations. We talk about the importance of integrating innovative technologies to maintain competitive advantage and adapt to changing market demands. Download Spring 2024 Beyond the Trends Report

I’m excited to share the current Experian Commercial Pulse Report with you. I have the opportunity each week to analyze data on the millions of U.S. small businesses in Experian’s database and discover actionable insights that benefit our clients. Making these discoveries is rewarding work, and we utilize these insights to guide our recommendations. I thought I would share what I am watching through Experian’s bi-weekly Commercial Pulse Report (just bookmark the link; we will update it on a bi-weekly basis). What I am watching: Q1 GDP slowed to 1.6% compared to 3.4% in Q4 2023. April unemployment rate inched up to 3.9% in April, up from 3.8% in March. April was the 27th consecutive month with unemployment under 4%. The Federal Reserve did not change rates at their May 1st meeting and indicated that they will not reduce interest rates until inflation is closer to their 2% target. Since the COVID-19 shock to the supply chain, business logistics are normalizing. Take a look inside this week’s report to delve into trends in the trucking industry. That’s a quick take – Download the latest report. Download Commercial Pulse Report

Modernizing commercial credit approvals for efficient workflow and improved customer experiences In our fourth installment of our Path to Modernization series, Erikk Kropp, Sr. Product Manager at Experian, talks about driving efficient rules-based credit decisions based on scores and other attributes. Introduction to Batch Decisioning In the realm of business automation, batch decisioning emerges as a powerful tool that extends beyond mere batch scoring. This method integrates credit data and scoring into a portfolio to enhance decision-making processes. Unlike traditional methods that rely on manual interpretation, batch decisioning leverages automation to act on data without human intervention to render instant decisions. Batch decisioning not only streamlines operational processes but also provides strategic advantages. By automating routine decisions, companies can gather and analyze outcomes over time, leading to better-informed business strategies and adjustments based on empirical data. This strategic use of data can drive innovation and maintain competitive advantage in the market. The Path To Modernization Framework About the framework The “Path to Modernization” framework is intended to highlight five key areas where Experian can potentially assist clients when introducing digitization and automation to help drive change across their risk management process. The framework is based on observed best practices and common tools frequently used today in the industry. Higher levels of modernization and performance can be achieved with each subsequent step of the process. The Mechanism Behind Batch Decisioning Batch decisioning functions by applying predefined logic or automated decision policies. These policies analyze individual data points derived from the scoring process, enabling businesses to take calculated actions based on this analysis. For instance, consider a scenario where a business is evaluated with specific financial scores. An automated decision policy might be set to trigger actions if the business meets certain criteria, such as having a high commercial IntelliScore and Financial Stability Score. Practical Applications and Examples of Batch Decisioning A practical application of batch decisioning can be demonstrated through an "if-then" statement. For example, if a business scores above a certain threshold in both commercial intelligence and financial stability, an automated policy might suggest actions related to acquisition, portfolio management, or collections. This level of automation significantly enhances efficiency by reducing the need for manual data interpretation. Enhancing Efficiency and Sophistication The introduction of batch decisioning into business processes represents a significant step in the path to modernization. It not only saves time but also increases the sophistication of data handling and decision-making processes. With the ability to handle more complex information and simplify operations, batch decisioning stands as a testament to the evolving landscape of business technology. As businesses strive to manage resources more effectively and process increasing amounts of data, tools like Experian's DecisionIQ play a crucial role. They offer a higher level of automation and decision-making sophistication, which is becoming increasingly prevalent in modern credit management organizations.

In our third installment of our Path to Modernization series, Erikk Kropp, Sr. Product Manager at Experian, shares how we are helping clients to push productivity and transformation through the application of batch append credit scores. As he explains in his latest video, applying certain scores in bulk at the portfolio level can empower businesses to significantly enhance their risk management processes. The Path To Modernization Framework About the framework The “Path to Modernization” framework is intended to highlight five key areas where Experian can potentially assist clients when introducing digitization and automation to help drive change across their risk management process. The framework is based on observed best practices and common tools frequently used today in the industry. Higher levels of modernization and performance can be achieved with each subsequent step of the process. Streamlining Risk Assessment with Bulk Processing One of the cornerstone advantages of using batch append credit scores lies in its bulk processing capability. This approach allows financial institutions and credit issuers to append a comprehensive set of credit scores or additional credit attributes across their entire customer base or portfolio at once. By doing so, it eradicates the need for the labor-intensive and time-consuming process of individually pulling full credit reports and manually analyzing them to decide on subsequent actions for each customer. Cost Efficiency and Enhanced Operational Efficiency The process of batch appending credit scores is not only more efficient but also more cost-effective than traditional credit assessment methods. Kropp emphasizes that by utilizing this advanced approach, clients can significantly reduce operational costs associated with credit risk assessment. The savings come not just from the reduced need for manual labor but also from the ability to make quicker, more informed decisions that can mitigate risk and potentially prevent losses. Unlocking Deeper Insights for Strategic Decision-Making Beyond the immediate benefits of efficiency and cost savings, the real power of batch append credit scores lies in the depth of insights it unlocks for businesses. With access to a richer dataset, companies can conduct more nuanced segmentation analysis, identifying varying levels of risk and opportunity within their customer base. This detailed understanding allows for the development of tailored strategies to address specific segments, optimizing both risk management and customer relationship strategies. For example, you might avoid spoiling relationships introducing third-party collections efforts for clients who are able to pay you based on trends in the data indicating they are meeting obligations with other suppliers. Offering this segment incentives to pay on time for example, or raising their limit. Facilitating Proactive Risk Management By implementing batch append credit scores, businesses can transition from reactive to proactive risk management. Instead of waiting for delinquencies to occur, companies can identify potential risks early on, based on the comprehensive credit data appended to their portfolios. This early warning system enables the formulation of preventative strategies, minimizing the impact of potential financial setbacks. Enhancing Customer Relationship Management Moreover, the insights gained from batch appending credit scores offer the potential to enhance customer relationship management. By understanding the specific risk profiles and credit behaviors of their clients, businesses can tailor their communication and engagement strategies to better meet the needs and preferences of different customer segments, fostering stronger, more loyal relationships. This approach not only streamlines operations and reduces costs but also provides the insights necessary for effective risk segmentation and proactive management. By leveraging the power of batch append credit scores, businesses are well-equipped to navigate the complexities of the modern credit landscape with greater agility and precision.

New business formations continue to outpace pre-pandemic levels, but lack of funding cited among many failures It is a positive sign for the U.S. economy that small business starts have been trending upward, with rates higher than pre-pandemic levels. However, new business survival rates have been stubbornly consistent, with half of all new businesses closing shop within five years. The top reasons for new business failure are related lack of access to financial capital. Financial capital can be more easily acquired with a better business credit score, which requires having a business credit profile on a commercial bureau, and the business’s account payment experiences represented on its credit profile.One way business creditors and service providers can help their customers is through data contribution to a credit bureau. Through this action, a new commercial bureau file is established, or another trade payment experience is added to an existing profile. This will improve the credit score for these businesses, enabling them to get easier access to financial capital and other business services, which is what small businesses need to remain healthy and grow. What I am watching: Small business owners begin their journey with the hope that hard work will pay off, but some things are beyond their locus of control. Commercial creditors and service providers should assess bureau data contribution as an investment in their business customers, as adding to the credit profile for these customers will increase their chances for success. Download Report

Modern credit approvals make the customer onboarding process efficient, and it begins with credit data In today's rapidly evolving financial landscape, the shift towards modern credit approvals is not just a trend but a necessary step for businesses aiming to streamline their customer onboarding process. This transformation is powered by advanced data analytics and digital technologies, making credit decisions faster, more accurate, and incredibly efficient. Modern credit approvals stand at the forefront of this change, revolutionizing how companies assess creditworthiness and manage risk in real-time. This post marks the second installment in our series on the "Path to Modernization," where we unravel the intricate steps and strategies businesses can adopt to embrace modern credit approvals. Spearheaded by Sr. Product Manager, Erikk Kropp, our series offers a deep dive into optimizing credit processes for the digital age. Today's focus is on the vital role of diverse data sources—a cornerstone in enhancing risk assessment and driving efficiency within credit departments through modern credit approvals. As we navigate through the complexities of digitizing and automating credit approval processes, it becomes evident that modern credit approvals are not just about adopting new tools but about rethinking our approach to credit risk management. By leveraging a blend of traditional and innovative data insights, businesses can unlock unparalleled efficiency and accuracy in their credit operations, setting a new standard for customer onboarding and financial assessment. The Path To Modernization Framework About the Framework The “Path to Modernization” framework is intended to highlight five key areas where Experian can potentially assist clients when introducing digitization and automation to help drive change across their risk management process. The framework is based on observed best practices and common tools frequently used today in the industry. Higher levels of modernization and performance can be achieved with each subsequent step of the process. Understanding Your Data Landscape The journey to modernizing risk assessment begins with recognizing the importance of diverse data sources. This is crucial for comprehensively understanding the risks associated with your clients. Often, clients are unaware of the wealth of options available to them for risk analysis. Providing a structured framework helps clients identify where they stand and offers guidelines and tools for a new perspective on risk assessment. Exploring Data Sources Beyond the Basics Credit reporting agencies like Experian are commonly known for their role in assessing risk through commercial credit data, payment history, public records, demographics, and firmographics. However, the landscape is much broader, especially for small businesses where personal and business finances often overlap. Blended credit reports that combine a business's commercial health with the owner's personal credit history offer a deeper insight into potential risks. This approach not only helps in evaluating small business delinquency but also enriches the existing data, making it more actionable in the risk management process. Leveraging Consortium Data and International Insights The concept of consortium data, such as the Small Business Financial Exchange, introduces a reciprocal data-sharing model. This "give to get" strategy enables access to unique credit insights, enhancing the risk assessment process with additional financial information. Furthermore, with the global economy continually expanding, considering international data sources becomes essential for businesses looking to operate or expand overseas. Tools like Experian’s Global Data Network can provide valuable financial and credit risk insights across different regions, thus broadening your risk assessment capabilities. The Role of Data in Modern Credit Approvals The trend towards incorporating alternative data sources into risk assessment is growing. These sources offer a new dimension of insights that, when combined with existing data, can significantly enhance the understanding of a business's risk profile. This approach not only diversifies the data pool but also offers a more nuanced view of potential risks. Modernizing risk assessment requires a multifaceted approach, embracing a variety of data sources beyond traditional credit data. From leveraging blended credit reports and consortium data to exploring international insights and alternative data sources, businesses can gain a comprehensive understanding of risk. This journey towards modernization is not only about enhancing data accessibility but also about enriching the quality of risk assessment, ensuring businesses are well-equipped to navigate the complexities of today’s financial landscape.

Over the next several weeks, we will be sharing a series of videos featuring Sr. Product Manager, Erikk Kropp talking about the Path To Modernization framework. Path To Modernization is centered around common needs we help clients to address when modernizing their credit process. This includes managing risk in customer acquisition and retention, especially important as market conditions evolve. Credit Departments Adapting to Change The COVID-19 pandemic led to significant shifts, such as employee furloughs and changing demand, forcing businesses to reconsider their operations. Credit departments, despite facing staff reductions, had to continue managing risk amidst these challenges, pointing to a need for long-term strategic adjustments rather than short-term fixes. Long-Term Strategy Shifts In the new normal, businesses are modifying their models to accommodate these changes sustainably, focusing on automation and remote work to manage risks more effectively with fewer resources.In our next post we will focus in on the various forms of data available to credit departments in addition to traditional business credit reports and scores so be sure to subscribe to this blog to be notified when we post. Pivotal Growth: A Guide to Modernization If you are looking to modernize your credit processes, Experian's guide, Pivotal Growth, offers a structured framework to navigate these changes. We encourage downloading the guide and consulting with an Experian representative for further discussion.