All posts by Theresa Nguyen

As consumer credit behaviors change, staying informed is crucial for credit unions. Experian’s new State of Credit Unions Report offers a comprehensive analysis of consumer credit trends from January 2022 to October 2024, with a particular focus on auto loans, unsecured personal loans and unsecured credit cards. The report covers: Trends in originations and delinquencies among credit union members How credit unions fare against other fintech lenders and regional banks Strategies to attract new members and mitigate portfolio risk Discover key insights into the consumer credit landscape and how credit unions stack up against other financial institutions. Download the report

With cybersecurity threats on the rise, organizations are turning to token-based authentication as a secure and efficient solution to safeguard sensitive data and systems. Data breaches impacted 1.1 billion individuals in 2024, a staggering 490% increase from the previous year.1 Token-based authentication is a method of verifying a user's identity through digital tokens rather than traditional means such as passwords. These tokens are temporary and serve as access keys, allowing users to securely interact with systems, applications, and networks. The goal of token authentication is to strengthen security while improving the user experience. Instead of relying solely on static credentials (like passwords), which can be intercepted or stolen, leveraging a type of multi-factor authentication like tokens adds an additional layer of security by functioning as dynamic access credentials. How token-based authentication works Token authentication unfolds through a series of steps to ensure robust security. Here's a simplified breakdown of how it works in practice: User request and authentication: When a user attempts to log in, they provide their credentials (e.g., username and password). These credentials are verified by the authentication server. Token generation: After verifying the user's credentials, the server generates a token — a cryptographically secured string often containing information like the user's ID and permissions. Token sent to the user: The generated token is sent back to the user or their device to confirm authentication. Token usage for access: Now authenticated, the user uses the token to access the system or application. The token is passed along with each request to ensure the user is authorized to proceed. Token validation: Each time a token is presented to the server, its integrity and expiration are verified. If the token is valid, access is granted; if not, the session is terminated. Token expiration and renewal: Tokens are typically temporary and expire after a set period. Users must either re-authenticate or renew the token for continued access. This limits the time window during which a stolen token can be misused. Types of token authentication methods Token authentication comes in different forms to meet various use case requirements. Common types include: JSON Web Tokens (JWT) Lightweight, self-contained, and easily transferred between clients and servers, JWT is one of the most widely used token formats. It includes claims, which are bits of information about a user encoded within the token, such as roles and permissions. Example: A financial application uses JWTs to ensure only registered users can access private account data. OAuth tokens OAuth is an industry-standard authorization protocol that uses tokens to grant limited access to applications without revealing the user's credentials. It’s often used for third-party service integration. Example: When you log into an e-commerce platform using your Google credentials, OAuth tokens authorize access. Session tokens These are temporary tokens stored on the server to track authenticated sessions, commonly used in web applications to ensure secure browsing. Example: Online banking platforms rely on session tokens for secure user sessions. Refresh tokens Refresh tokens are designed to renew access tokens without requiring the user to log in repeatedly. They extend session durations while maintaining a high-security standard. Example: A subscription service app uses refresh tokens to maintain a seamless user experience without frequent logouts. Benefits of token-based authentication Token-based authentication offers several advantages that make it a preferred security measure for organizations of all sizes. Enhanced security: Tokens reduce the risk of breaches as they are temporary and encrypted. They’re also specific to sessions, applications, or devices, meaning unauthorized users cannot reuse stolen tokens effectively. Elimination of password reliance: Tokens reduce dependence on static passwords, which are often reused and susceptible to brute-force attacks. This bolsters an organization’s overall cybersecurity posture. Improved user experience: Token authentication allows for more seamless interactions by minimizing the need for repeated logins. With features like single sign-on (SSO), users enjoy convenient access to multiple platforms with a single token. Scalability: Tokens are flexible and can adapt to varied business use cases, making them ideal for organizations of all scales. For instance, application programming interfaces (APIs) and microservices can communicate securely via token exchanges. Supports compliance: Token-based authentication helps organizations meet regulatory compliance requirements by offering robust access control and audit trails. This is critical for industries like finance, healthcare, and e-commerce. Cost efficiency: While implementing token-based authentication may require an initial investment, it reduces long-term risks and costs associated with data breaches, system downtime, and customer trust. How Experian can help strengthen your authentication process At Experian, we recognize that strong security measures should never compromise the user experience. That's why we offer cutting-edge identity solutions tailored to meet the needs of organizations. Our tools allow you to integrate token-based authentication seamlessly into your systems while ensuring compliance with security best practices and industry regulations. Are you ready to take your business's security and user experience to the next level? Visit us online today. Learn more 12024-2025 Data Breach Response Guide, Experian, 2024. This article includes content created by an AI language model and is intended to provide general information.

Whether consumers are shopping for new credit or experiencing financial stress, monitoring their behavior is crucial — even more so in an ever-changing economy. Our latest infographic explores economic trends impacting consumers’ financial behaviors and how Experian’s Risk and Retention TriggersSM enable lenders to detect early signs of risk or churn. Key highlights include: Credit card balances climbed to $1.17 trillion in Q3 2024. As prices of goods and services remain elevated, consumers may continue to experience financial stress, potentially leading to higher delinquency rates. Increasing customer retention rates by 5% can boost profits by 25% to 95%. View the infographic to learn how Risk and Retention Triggers can help you advance your portfolio management strategy. Access infographic

The credit card market is rapidly evolving, driven by technological advancements, economic volatility, and changing consumer behaviors. Our new 2025 State of Credit Card Report provides an in-depth analysis of the credit card landscape and strategy considerations for financial institutions. Findings include: Credit card debt reached an all-time high of $1.17 trillion in Q3 2024. About 19 million U.S. households were considered underbanked in 2023. Bot-led fraud attacks doubled from January to June 2024. Read the full report for critical insights and strategies to navigate a shifting market. Access report

Today’s fast-paced, digital-first hiring environment calls for a more comprehensive approach to pre-employment screening. With growing pressure on employers and HR teams to make swift, accurate, and secure hiring decisions, having access to the tools and data to enhance efficiency and security is more important than ever. By evolving beyond traditional screening methods, background screeners can better meet these needs and deliver added value to their clients.  Fraud remains a significant challenge. In fact, fraud scams resulted in a staggering $485.6 billion in losses in 20231 — and hiring teams aren’t exempt from these risks. Fraudulent resumes, synthetic identities, and the risk of non-compliance with evolving regulations create a challenging landscape for pre-employment verifications. What if there was a way to make smarter, faster, and more secure hiring decisions? This article explores how background screeners can optimize pre-employment verification processes, reduce fraud risks, and ensure compliance — all while delivering a positive candidate experience. What is pre-employment screening? Employers conduct pre-employment screenings to thoroughly evaluate job candidates and make informed hiring decisions. It’s designed to verify key details about candidates, such as their identity, employment history, and references among others to assess their suitability for a role and ensure compliance with industry regulations. Enhancing traditional screening processes For decades, pre-employment background checks have been a cornerstone of the hiring process. While effective, many traditional methods face challenges in keeping up with the evolving demands of modern hiring. Delays in hiring: Background checks can oftentimes rely on manual processes, which could extend timelines leading to delays of days or even weeks. This not only slows down hiring cycles but can make it harder for employers to compete for top talent in a tight labor market. Errors and inaccuracies: Human errors, incomplete data, and inconsistencies across systems can lead to missed insights or red flags. Fraudulent activity: As hiring becomes increasingly digital, identity theft and synthetic identities present growing challenges to verifying candidate-provided data.  Regulatory challenges: With regulations like the Equal Employment Opportunity Commission (EEOC) and Fair Credit Reporting Act (FCRA), companies must navigate complex compliance requirements to avoid legal and financial repercussions. 1 in 3 HR professionals report losing top candidates due to slow pre-employment screening processes.2 These challenges highlight the opportunity to build on existing screening practices with tools that enhance speed, provide actionable insights and prevent fraud. Adapting to the evolving fraud landscape Employment fraud is becoming increasingly sophisticated, fueled by trends like the rise of remote work and digital applications. In fact, the employment sector accounted for 45% of all false document submissions in 2023, making it the most targeted industry for fraud.3 From fake references and degrees to synthetic identities created using stolen personal information, the risks are higher than ever. Synthetic identity fraud: This form of fraud — where fake identities are created by combining real and fabricated data — makes up more than 80% of all new account fraud.4 Fake credentials: Many candidates falsify qualifications or work histories to enhance their chances of securing a role. Compliance risks: Failure to verify candidate information accurately can result in legal penalties, brand reputation damage, or internal security breaches. Modernizing pre-employment screening The good news? Experian offers advanced solutions that complement existing screening processes, empowering background screeners to deliver more efficient, secure and reliable results for their clients looking to higher faster, and with greater confidence.  Gain a more holistic view of a candidate’s risk profile: Experian’s nationwide database contains files on more than 245 million credit-active consumers, providing the most current, accurate, and comprehensive information available in the industry. Conduct real-time identity verification: Leverage a range of identity verification solutions to authenticate and verify a candidate’s identity by accessing a breadth set of non-credit and credit data sources to create a robust social footprint that defines each consumer as unique individuals. Integrate advanced fraud detection: Powered by purpose-built analytics and machine learning algorithms, Experian’s fraud detection tools can detect synthetic identities, inconsistencies, and other red flags while ensuring a seamless candidate experience. Enhance compliance efforts: Experian’s solutions are designed to help businesses navigate complex compliance requirements with ease. Fraud prevention playbook in preemployment Uncover essential strategies for fraud prevention and identity verification in employment screening. Download now The pre-employment screening landscape is evolving, and staying ahead requires tools that enhance the efficiency and effectiveness of your processes. Experian’s advanced solutions are designed to complement your existing screening services, helping you reduce fraud risks, maintain compliant, and deliver data-driven insights that empower smarter hiring decisions. Get started today Ready to transform your pre-employment verification process with fraud mitigation and identity verification solutions? Explore our innovative solutions today. Learn more 1 Nasdaq finds scams led to $486 billion in losses in 2023, 2024. 2 Research reveals Candidates’ Frustrations with Hiring Process, 2024. 3 Employment Identity Fraud: Do You Know Who You’re Hiring, 2024. 4 Report: Synthetic identity fraud is growing, 2024.

The digital domain is rife with opportunities, but it also brings substantial risks, especially for organizations. Among the innovative tools that have risen to prominence for fraud detection and online security is browser fingerprinting. Whether you're looking to minimize security gaps or bolster your fraud prevention strategy, understanding how this technology works can provide a significant advantage in today’s ever-evolving fraud and identity landscape. This article explores the concept, functionality, and applications of browser fingerprinting while also examining its benefits and relevance for organizations. How does browser fingerprinting work? Browser fingerprinting is a powerful technology designed to collect unique identifying information about a user’s web browser and device. By compiling data points such as browser type, operating system, time zone, and installed plugins, browser fingerprinting creates a distinct profile — or "fingerprint"— that allows websites to recognize returning users without relying on cookies. Here’s a breakdown of its key steps: Data collection: When a user visits a website, their browser sends information, such as user-agent strings or metadata, to the website's servers. This data provides insights about their browser, device, and system. Fingerprint creation: The collected information is processed to generate a unique ID or fingerprint, representing the user's specific configuration. Tracking and analyzing: These fingerprints enable websites to track and analyze user behavior, detect anomalies, and identify users without relying on traditional tracking mechanisms like cookies. For organizations, employing technology that leverages such fingerprints adds an additional layer to identity verification, detecting discrepancies that may indicate fraud attempts. What are the different techniques? Not all browser fingerprinting methods are identical; varying approaches offer different strengths. The most common techniques used today include: Canvas fingerprinting: This method utilizes the "Canvas" element in HTML5. When a website sends a command to draw a hidden image on a user's device, the way the image is rendered reveals unique characteristics about the device's graphics hardware and software. Font fingerprinting: Font fingerprinting involves analyzing the fonts installed on a user's system. Since computers and browsers render text in slightly different ways based on their configurations, the resulting variations aid in identifying users. Plugin enumeration: Browsers and devices often come equipped with plugins or extensions like Flash or Java. Analyzing which plugins are installed, their versions, and their order helps websites build unique fingerprints. What are the benefits of browser fingerprinting? For organizations, browser fingerprinting is not just a technical marvel — it’s a strategic asset. Benefits include: Enhanced fraud detection: Browser fingerprinting detects inconsistencies within user accounts, flagging unauthorized logins, synthetic identity fraud, or account takeover fraud without introducing significant friction for legitimate users. By identifying patterns that deviate from the norm, organizations can better prepare for malicious activities. Learn more about addressing account takeover fraud. Supports multi-layered security: A single security measure often isn't enough to combat advanced fraudulent schemes. Browser fingerprinting pairs seamlessly with other fraud management tools, such as behavioral analytics and risk-based authentication, to provide robust security. See how behavioral analytics can help organizations spot and stop next-generation fraud bots. Seamless user experience: Unlike cookies or authentication codes, browser fingerprinting operates passively in the background. Users remain unaware of the process, ensuring their experience is unaffected while still maintaining security. Level up with Experian's fraud prevention tools Browser fingerprinting offers organizations a game-changing tool to secure online interactions. However, given the growing complexity of fraud threats, organizations will need additional layers of insights and protection. Experian offers integrated, AI-driven fraud prevention solutions tailor-made to tackle challenges in the digital space. By leveraging advanced technologies like browser fingerprinting alongside Experian’s solutions, organizations can safeguard their operations and uphold customer trust while maintaining a frictionless user experience. Learn more about our fraud prevention solutions This article includes content created by an AI language model and is intended to provide general information.

 Technology has dramatically transformed the financial services landscape, fostering innovation and enhancing operational efficiency. In an interview at this year’s Money20/20 conference, Scott Brown, Group President of Financial and Marketing Services for Experian, sat down with Fintech Futures’ North America Correspondent Heather Sugg to share how Experian is leveraging data, analytics, and artificial intelligence (AI) to modernize the financial services industry. During the discussion, Scott highlighted the recent launch of Experian Assistant — our newest generative AI tool designed to accelerate the modeling lifecycle, resulting in greater productivity, improved data visibility, and reduced delays and expenses. While Experian Assistant is a business-to-business solution built alongside our clients, Scott also noted its broader impact — helping increase credit access for underserved consumers. “At Experian, we’re really focused on addressing the underserved community who doesn’t have access to credit,” said Scott. “And we think that this tool helps lenders reach those customers in an easier way.”  Learn more about Experian Assistant and watch our tech showcase to see the solution in action. Learn more Watch tech showcase

This series will explore our monthly State of the Economy report, which provides a snapshot of the top monthly economic and credit data for financial service professionals to proactively shape their business strategies. After the Federal Reserve announced its first cut since 2020 in September, several pieces of economic data have surpassed expectations. Job creation was almost double economists’ estimates, unemployment ticked down, and personal incomes were revised up. Alongside these areas of strength, inflation continued to prove stubborn. The October State of the Economy report fills in the rest of the developing macroeconomic story. This month’s highlights include:  Unemployment decreased for the second month in a row, down to 4.1%. Core inflation increased from 3.2% to 3.3%, driven by shelter and service costs. Negative rental payment activity has declined 1.9% over the past year. Check out our report for a detailed analysis of the rest of this month’s data, including the latest trends in originations, retail sales, and consumer sentiment. Download October's report As our economy continues to fluctuate, it's critical to stay updated on the latest developments. Subscribe to our new series, The Macro Moment, for economic commentary from Experian NA’s Chief Economist, Joseph Mayans, with additional economic resources, including our new Lending Conditions Chartbook and our new Labor Market Monitor. For more economic trends and market insights, visit Experian Edge.

In this article...Understanding the scope of fintech fraudThe importance of fintech fraud preventionSynthetic identity (ID) fraud: A growing threatHow fintech fraud detection and prevention are evolvingGet started today The integration of technology with traditional financial services has unlocked unprecedented convenience and opportunities for consumers and businesses alike. However, this digital shift has opened the door for more sophisticated fraud tactics. With fraudsters continuously refining their methods, fintech companies must invest in advanced fintech fraud detection and prevention solutions. Understanding the scope of fintech fraud As fintech platforms expand, they also attract the attention of cybercriminals. The accessibility of digital financial services can create vulnerabilities that fraudsters exploit, executing everything from personal account takeovers to larger-scale breaches involving synthetic identities.  Source: Experian’s 2024 U.S. Identity & Fraud Report To counter these threats, fintech companies must deploy innovative fraud management solutions powered by artificial intelligence (AI), machine learning (ML), and advanced analytics. Unlike traditional methods that often rely on static rules and manual reviews, these solutions can process vast amounts of data, learn from historical patterns, and detect anomalies in real-time. This allows organizations to identify suspicious activities before they lead to significant losses. The importance of fintech fraud prevention While detecting fraud is crucial, preventing it from occurring in the first place is even more important. Fraud prevention solutions aim to create robust systems that stop fraudsters in their tracks before they can cause damage. With the rise of digital financial services, the need for proactive fraud prevention measures has never been greater. These solutions protect both consumers and businesses from financial harm, reducing the risk of financial loss and reputational damage. Advanced fraud prevention solutions employ multi-layered strategies, combining AI-driven fraud detection tools with methods such as multifactor authentication and biometric identity verification. These tools create an extra layer of security, making it difficult for fraudsters to access sensitive data or execute fraudulent transactions. Experian’s fraud prevention solutions offer businesses a comprehensive suite of tools designed to prevent various types of fraud. From real-time transaction monitoring to sophisticated user authentication methods, these solutions provide the protection businesses need to stay ahead of evolving fraud tactics. Synthetic identity (ID) fraud: A growing threat One of the most concerning forms of fraud that fintech companies face is synthetic ID fraud. This type of fraud involves the creation of a fake identity using a combination of real and fabricated information. Fraudsters often steal pieces of personal data—such as Social Security numbers or addresses—and then combine them with fictional information to create a new, synthetic identity. These synthetic identities can be used to open bank accounts, apply for credit cards, or take out loans, leaving businesses and consumers vulnerable to significant financial losses. Synthetic ID fraud is particularly difficult to detect because the synthetic identity often looks legitimate to traditional verification systems. As a result, fintech companies must deploy sophisticated fraud detection systems that can identify synthetic identities before they’re used to commit fraud. Machine learning algorithms, for instance, can analyze behavioral data, detecting discrepancies that may indicate a synthetic identity. Experian is ranked #1 by the Center for Financial Professionals (CeFPro®) for Identity and Fraud. The ranking appeared in CeFPro’s Fintech Leaders Report, a comprehensive annual study of the fintech industry. How fintech fraud detection and prevention are evolving As fraudsters continue to evolve their tactics, fintech companies must remain one step ahead by investing in cutting-edge fraud detection and prevention technologies. Real-time monitoring, predictive analytics, and biometrics are just a few of the technologies shaping the future of fraud detection. By integrating these technologies into their fraud management processes, fintech companies can offer a more secure and seamless experience for their users. With the acquisition of NeuroID, an industry leader in behavioral analytics, Experian has amplified its fraud risk suite by providing a new layer of insight into digital behavioral signals and analytics. Available through our fraud solutions on the Experian Ascend Technology PlatformTM, clients can proactively monitor and analyze a user’s real-time digital behavior, allowing them to confidently navigate the online landscape and provide frictionless customer experiences. Get started today As the fraud landscape continues to evolve, fintech companies must adopt comprehensive solutions to stay ahead of emerging threats. By doing so, they can protect themselves and their customers, ensuring the continued success of digital financial services in the years to come. To learn more, check out our fraud management and fintech solutions. Fraud management solutions Fintech solutions This article includes content created by an AI language model and is intended to provide general information. In this article...

Alternative lending is continuing to revolutionize the financial services landscape. From full-file public records to cash flow transactions, alternative credit data empowers financial institutions to make more informed lending decisions.  This article focuses on cashflow insights and how they help financial institutions drive profitable and inclusive growth.  Challenges with traditional credit underwriting  Traditional underwriting often limits access to credit for marginalized communities, including young adults, immigrants, and those from low-income backgrounds. Because the process relies heavily on credit history and credit scores to determine an applicant’s ability to pay, those with less-than-ideal credit profiles could be overlooked. This then creates a cycle — those who are already disadvantaged face further barriers to accessing credit, limiting their abilities to invest in opportunities that can improve their financial situations, such as education or homeownership.  Additionally, traditional underwriting models can be rigid. Consumers with stable incomes or significant assets may be denied credit if their financial profiles don’t fit the narrow criteria established by traditional models. As the financial landscape evolves, it’s important for lenders to adopt more inclusive and adaptive approaches to credit underwriting.  What is cashflow underwriting?  Cashflow underwriting is a modern approach to evaluating a borrower’s creditworthiness. It uses fresh, consumer-permissioned bank account transaction (balance, income and expense) data, giving lenders greater visibility into loan applicants’ financial situation. This process is made possible through open banking, an established, secure framework that enables consumers to quickly and easily share their bank account information with third-party financial service providers.  READ: Learn more about the open banking landscape.  Let’s look at a few quick examples:   A prospective tenant is filling out a rental application. Instead of manually submitting paystubs to verify their income, open banking facilitates the digital sharing of full cashflow data in seconds, enabling property managers to quickly access the applicant’s full cash flow information.  A consumer was previously denied credit due to insufficient credit history. With cashflow underwriting, the consumer is offered a second chance to qualify for the loan by including cashflow data in the lender’s decisioning model. The additional information gathered on the consumer’s ability to pay can transform the initial decline decision into an approval.   Cashflow underwriting can also be used for credit line management. By assessing a borrower’s income and expense transactions, lenders can recommend optimal credit limits that cater to their spending potential while minimizing risk.  Benefits of cashflow underwriting  There are many benefits to integrating cashflow data into the credit underwriting process, including:  Enhanced risk assessment. Going off credit scores and repayment behaviors alone won’t provide lenders with a complete or current picture of applicants. Through open banking, lenders can gain access to cashflow data in real-time, allowing them to more accurately assess consumers, increase approvals, and reduce credit risk.  Inclusive lending. Over 100 million adult Americans are considered unscoreable, invisible, or subprime.1 However, 71% of consumers are willing to share their banking information if it could improve their chances of getting approved for credit.2 With deeper insights into consumers’ income and expenses, lenders can increase credit access in underserved communities.  Improved customer experiences. Gaining a more comprehensive view of a consumer’s financial situation enables lenders to determine what loan products they’re eligible for and craft personalized options.  READ: Learn more about the benefits of leveraging alternative data for credit underwriting.  Get started  Cashflow underwriting represents a significant step forward in the world of lending. It offers a more comprehensive approach to assessing creditworthiness, helping financial institutions drive growth and profitability.   Experian’s Cashflow Attributes are an open banking enabled solution that provides lenders with consumer-permissioned insights into borrowers’ financial behaviors. With 940+ attributes derived from transaction data across 133 categories, financial institutions can make smarter, more inclusive lending decisions. Learn more about Cashflow Attributes Learn more about open banking 1 2023 State of Alternative Credit Data Report, Experian, 2023.  2 Atomik Research survey of 2,005 U.S. adults online, matching national demographics, 2024.  This article includes content created by an AI language model and is intended to provide general information. 

Getting customers to respond to your credit offers can be difficult. With the advent of artificial intelligence (AI) and machine learning (ML), optimizing credit prescreen campaigns has never been easier or more efficient. In this post, we'll explore the basics of prescreen and how AI and ML can enhance your strategy.  What is prescreen?  Prescreen involves evaluating potential customers to determine their eligibility for credit offers. This process takes place without the consumer’s knowledge and without any negative impact on their credit score.  Why optimize your prescreen strategy?  In today's financial landscape, having an optimized prescreen strategy is crucial. Some reasons include:  Increased competition: Financial institutions face stiff competition in acquiring new customers. An optimized prescreen strategy helps you stand out by targeting the right individuals with tailored offers, increasing the chances of conversion.  Customer expectations: Modern customers expect personalized and relevant offers. An effective prescreen strategy ensures that your offers resonate with the specific needs and preferences of potential customers.  Strict budgets: Organizations today are faced with a limited marketing budget. By determining the right consumers for your offers, you can minimize prescreen costs and maximize the ROI of your campaigns.  Regulatory compliance: Compliance with regulations such as the Fair Credit Reporting Act (FCRA) is essential. An optimized prescreen strategy helps you stay compliant by ensuring that only eligible individuals are targeted for credit offers.  Financial inclusion: 49 million American adults don’t have conventional credit scores. An optimized prescreen strategy allows you to send offers to creditworthy consumers who you may have missed due to a lack of traditional credit history.  How AI and ML can enhance your strategy  AI and ML can revolutionize your prescreen strategy by offering advanced analytics and custom response modeling capabilities.  AI-driven data analytics  AI analytics allow financial institutions to analyze vast amounts of data quickly and accurately. This enables you to identify patterns and trends that may not be apparent through traditional analysis. By leveraging data-centric AI, you can gain deeper insights into customer behavior and preferences, allowing for more precise targeting and increased response rates.  LEARN MORE: Explore the benefits of AI for credit unions.  Custom response modeling  Custom response models enable you to better identify individuals who fall within your credit criteria and are more likely to respond to your credit offers. These models consider various factors such as credit history, spending habits, and demographic information to predict future behavior. By incorporating custom response models into your prescreen strategy, you can select the best consumers to engage, including those you may have previously overlooked.  LEARN MORE: AI can be leveraged for numerous business needs. Learn about generative AI fraud detection.   Get started today  Incorporating AI and ML into your prescreen campaigns can significantly enhance their effectiveness and efficiency. By leveraging Experian's Ascend Intelligence Services™ Target, you can better target potential customers and maximize your marketing spend.   Our optimized prescreen solution leverages:  Full-file credit bureau data on over 245 million consumers and over 2,100 industry-leading credit attributes.  Exclusive access to the industry's largest alternative datasets from nontraditional lenders, rental data inputs, full-file public records, and more.  24 months of trended data showing payment patterns over time and over 2,000 attributes that help determine your next best action.  When it comes to compliance, Experian leverages decades of regulatory experience to provide the documentation needed to explain lending practices to regulators. We use patent-pending ML explainability to understand what contributed most to a decision and generate adverse action codes directly from the model.  For more insights into Ascend Intelligence Services Target, view our infographic or contact us at 855 339 3990. View infographic This article includes content created by an AI language model and is intended to provide general information. 

Finding a balance between providing secure financial services and user-friendly experiences is no easy task. One of the biggest hurdles? Ensuring identity authentication is robust and reliable. Let's walk through the essentials of identity authentication, its importance, and what effective solutions look like. What is identity authentication? Identity authentication is the process of proving that an individual is who they claim to be. Unlike identity verification, which simply confirms that the provided identity information is valid, identity authentication goes a step further by ensuring that the person presenting the information is indeed its rightful owner. At its core, identity authentication relies on various methods to verify identities. These methods can range from simple password checks to more sophisticated technologies like biometrics and adaptive authentication. The goal is to create multiple layers of security that make it difficult for unauthorized users to gain access. Types of authentication methods Several types of identity authentication methods are used today. Passwords and PINs are the most basic forms, but they are increasingly being supplemented or replaced by more advanced solutions like multi-factor authentication (MFA) , biometric scans, and knowledge-based authentication (KBA). Each method has its advantages and limitations, making it crucial for financial institutions to choose the right mix. Authentication vs. verification While often used interchangeably, identity verification and identity authentication serve different purposes. Identity verification solutions confirm that the provided identity information matches public records, whereas identity authentication solutions ensure that the person presenting the information is its true owner. Identity verification is typically a one-time process conducted at the beginning of a relationship, such as when opening a new bank account. On the other hand, identity authentication is an ongoing process, ensuring that each login or transaction is carried out by a legitimate user. Though different, these processes are crucial for financial institutions. They work together to provide a robust security framework that minimizes the risk of fraud while offering a seamless user experience. READ: Learn how to overcome online identity verification challenges. Why it's important for financial institutions The importance of identity authentication for financial institutions cannot be overstated. With the rise of cyber threats and sophisticated fraud schemes like synthetic identity fraud, robust identity authentication measures are more critical than ever. Enhancing security. Effective authentication significantly enhances the security of financial transactions. By preventing unauthorized access, sensitive information and financial assets are safeguarded. Advanced solutions like multi-factor authentication solutions add extra layers of protection. Building trust with customers. Robust authentication also helps build trust with customers. When users feel confident that their accounts and personal information are secure, they are more likely to engage with the institution and utilize its services. Regulatory compliance. For financial institutions, compliance with regulatory standards is paramount. Many regulations now mandate strong identity authentication measures to protect against fraud and ensure the security of financial transactions. What to look for in an identity authentication solution The ideal solution should offer a balance between security, user experience, and cost-effectiveness. Adaptive authentication solutions use machine learning algorithms to assess the risk level of each transaction. This allows for a dynamic approach to authentication, where additional checks are only required when necessary. Multi-factor authentication (MFA) solutions add an extra layer of security by requiring users to provide multiple forms of identification. This could include something they know (password), something they have (smartphone), and something they are (biometric data). Knowledge-based authentication (KBA) solutions ask users to answer questions based on their personal information. This method is particularly useful for verifying identities during online transactions and account recoveries. Experian’s Knowledge IQSM offers KBA with over 70 credit- and noncredit-based questions to help you authenticate consumers by asking noninvasive questions that can be answered quickly by the true consumer. Comprehensive identity solutions take a holistic approach by integrating various methods and technologies. Experian’s identity solutions offer a range of services, from risk-based authentication to automated identity verification, ensuring comprehensive protection. Importance of user experience. While security is paramount, user experience should not be overlooked. The ideal identity authentication solution should be seamless and user-friendly, minimizing friction during the authentication process. READ: By adopting a consumer-centric approach to digital identity, organizations can offer customers a better experience while minimizing risk. How Experian can help Identity authentication is a critical component of modern financial institutions. By implementing robust and user-friendly solutions, organizations can enhance security, build customer trust, and comply with regulatory standards. Whether it's through adaptive authentication, multi-factor authentication, or knowledge-based authentication, the goal is to create a secure and seamless experience for users. Ready to take your identity strategy to the next level? Explore Experian’s identity solutions today and discover how they can help your institution achieve its security and user experience goals. Learn more This article includes content created by an AI language model and is intended to provide general information.

With more consumers online, bad actors are taking the opportunity to commit more financial crimes, such as account takeover fraud. This online scheme resulted in nearly $13 billion in losses in 2023, up from $11 billion in 2022.1 So, what do organizations need to know about this form of identity theft? And how can they prevent it? Let’s explore one type of account takeover fraud: email account takeover. What is email account takeover? Email account takeover occurs when a fraudster gains access to a legitimate user’s email account through data breaches that expose credentials, purchasing from the dark web, or phishing scams. It's usually one of the first steps in a broader account takeover scheme. Once fraudsters have access to a consumer’s email or social media account, they have access to the private information in that consumer’s inbox: financial statements, health records, and other forms of PII. Fraudsters can also now use the consumer’s email to impersonate them with friends, family, financial institutions or other businesses they interact with.   They can also gain access to other accounts and here’s where email account takeover becomes more dangerous. In this attack, the fraudster gains access to an email or mobile account. Once they have an email, they start by trying to guess the user’s password, commonly called a brute force attack, or through password spraying, where they use commonly used passwords, i.e. ‘password’ or ‘123123.  A recent Google survey found that 65% of people use the same password for some or all of their online accounts. This, along with a corresponding email address can give fraudsters further entre into a consumer’s other accounts. If unsuccessful, they’ll then execute a ‘forgot password’, password reset, or one-time password. Then, they take over the victim’s account with their financial institution to facilitate the transfer of funds from the compromised account. 57% of businesses are experiencing rising fraud losses associated with account opening and account takeover.2 While email account takeover can be quickly executed, detecting it can take time. Unlike credit card fraud, where an individual may soon notice suspicious activity, an email account takeover can go undetected for longer. The owner may not realize until later that their account has been compromised, especially with a dormant account or secondary account they use less. As a result, criminals have more time to facilitate additional attacks. LEARN MORE: Explore 2024 fraud trends listed by Experian. How does it affect your organization? Account takeover fraud doesn't just impact consumers, it can result in significant financial losses for organizations. For example, if your organization offers credit products, you might have to cover the costs of disputing chargebacks, card processing fees, or providing refunds. In the case of a data breach, you may have to pay fines against your organization for not properly protecting consumer information. Nearly two-thirds of consumers say they’re very or somewhat concerned with online security.3 But email account takeover isn't just costly — it can damage your organization's reputation. Consumers expect organizations to have proper security measures in place to protect their information. If a data breach occurs, your security can seem weak, leading consumers to lose trust in your organization. As a result, they may potentially take their business elsewhere. The importance of prevention While consumers listed identity theft as their top concern when conducting activities online, they’re still interacting, opening new accounts, and transacting digitally.4 Coupled with the rise of account takeover fraud and associated losses, it’s more crucial than ever for organizations to accurately detect and prevent these attacks. To do this, they must have a proactive fraud prevention strategy in place. Account takeover fraud prevention requires your business to maintain and continuously reaffirm confidence in the identity data you collect. Your team can monitor, segment, and proactively act on customer identities that display a higher risk of fraud than was determined at account origination through risk-based fraud detection models, machine learning, and advanced analytics. Experian offers many flexible solutions, including: CrossCore® Solutions are best practice-based groupings of fraud and identity products that enable organizations to solve common to complex issues. For example, our fraud risk solutions include email and phone intelligence to improve verification for thin-files and other challenging populations. Experian offers phone/carrier-based matching capabilities with address validity and occupancy data for >95% of U.S. households. FraudNet is a device intelligence solution that analyzes hundreds of device attributes and prevents fraud on all digital channels. Combining contextual data, behavioral data, and device data, it bridges the gap between physical and digital identity to achieve fraud capture rates that exceed industry averages. To further alleviate account takeover fraud, your organization can offer educational resources for fraud prevention. Using various, strong passwords across their accounts, and changing them regularly, is a foundational way consumers can help ensure their accounts are secure. Leveraging user names that are different from your email can also help. If a fraudster is able to takeover an account and initiate a lost password request, and that password is used for other accounts, that fraudster now has the credentials they need to further defraud that consumer. By spreading awareness about identity fraud risks and providing best practices for prevention, you can better protect your organization and consumers. LEARN MORE: Building a multilayered fraud and identity strategy with CrossCore Solutions Partnering with Experian Email account takeover, along with other types of fraud, can be detected and prevented with the right partner. Experian’s fraud management solutions can help your organization accurately verify customers and assess risk with our account takeover and fraud management solutions. Explore Experian’s account takeover solutions and watch an on-demand recording of our Fraud Risk and Identity Verification Solutions tech showcase. Learn more Watch tech showcase 1 Identity Fraud Cost Americans $43 Billion in 2023, AARP. 2-4 2023 U.S. Identity and Fraud Report, Experian.

For lenders, first payment default (FPD) is more than just financial jargon; it's a crucial metric in assessing credit risk. This blog post will walk you through the essentials of FPD,  from defining the term to exploring how you can prevent and mitigate its potential impact. Understanding first payment default FPD occurs when a consumer fails to make their initial payment on a loan or credit agreement, which is often perceived as an early signal of a potential cascade of risky behavior. Recognizing FPD is the starting point for lenders to address potential issues with new borrowers before they escalate. One important aspect to grasp is the timeline of FPD. It’s not just about missing the first payment; it's about "early" missing. The timing of defaults is often critical in assessing the overall risk profile of a borrower or group of borrowers. The earlier a borrower starts to miss payments, the riskier they tend to be. Examining the causes of FPD The roots of FPD are diverse and can be classified into two broad categories: External factors: These include sudden financial crises, changes in employment status, or unforeseen expenses. Such factors are often beyond the borrower's immediate control. Internal factors: This category covers more deliberate or chronic financial habits, such as overspending, lack of savings, or overleveraging on credit. It's often indicative of longer-term financial instability. Understanding the causes of early payment default is the first step in effective risk management and customer engagement strategies. Implications of FPD for lenders FPD doesn't just signal immediate financial loss for lenders in terms of the missed installment. It sets off a cascade of consequences that affect the bottom line and the reputation of the institution. Financial loss. Lenders incur direct financial losses when a payment is missed, but the implications go beyond the missed payment amount. There are immediate costs associated with servicing, collections, and customer support. In the longer term, repeated defaults can lead to write-offs, impacting the institution's profitability and regulatory standing. Regulatory scrutiny. Repeated instances of FPD can also draw the attention of regulators, leading to scrutiny and potentially increased compliance costs. Mitigating first payment default Mitigating FPD requires a multifaceted approach that blends data, advanced analytics, customer engagement, and agile risk management. Lenders need to adopt strategies that can detect early signs of potential FPD and intervene preemptively. Data-driven decision-making. Leveraging advanced analytics and credit risk modeling is crucial. By incorporating transactional and behavioral data, lenders can make more accurate assessments of a borrower's risk profile. Utilizing predictive models can help forecast which borrowers are likely to default on their first payment, allowing for early intervention. Proactive customer engagement. Initiatives that revolve around education, personalized financial planning advice, and flexible payment arrangements can help borrowers who might be at risk of FPD. Proactive outreach can engage customers before a default occurs, turning a potential negative event into a positive experience. Agile risk management. Risk management strategies should be dynamic and responsive to changing market and customer conditions. Regularly reviewing and updating underwriting criteria, credit policies, and risk assessment tools ensures that lenders are prepared to tackle FPD challenges as they arise. Using FPD as a customer management tool Lastly, and perhaps most importantly, lenders can use FPD as a tool to foster better customer management. Every FPD is a data point that can provide insights into customer behavior and financial trends. By studying the causes and outcomes of FPD, lenders can refine their risk mitigation tools and improve their customer service offerings. Building trust through handling defaults. How lenders handle defaults, specifically the first ones, can significantly impact customer trust. Transparent communication, fair and considerate policies, and supportive customer service can make a difference in retaining customers and improving the lender's brand image. Leveraging data for personalization. The increasing availability of data means lenders can offer more personalized services. By segmenting customers based on payment behavior and response to early interventions, lenders can tailor offerings that meet the specific financial needs and challenges of individual borrowers. How Experian® can help First payment default is a critical aspect of credit risk management that requires attention and proactive strategies. By understanding the causes, implications, and mitigation strategies associated with FPD, financial institutions can not only avoid potential losses but also build stronger, more enduring relationships with their customers. Learn more about Experian’s credit risk modeling solutions. Learn more This article includes content created by an AI language model and is intended to provide general information.

This article was updated on February 21, 2024. With the rise of technology and data analytics in the financial industry today, it's no longer enough for companies to rely solely on traditional marketing methods. Data-driven marketing insights provide a more sophisticated and comprehensive view of shifting customer preferences and behaviors. With this in mind, this blog post will highlight the importance of data-driven marketing insights, particularly for financial institutions. The importance of data-driven marketing insights 30% of companies say poor data quality is a key challenge to delivering excellent customer experiences. Today’s consumers want personalized experiences built around their individual needs and preferences. Data-driven marketing insights can help marketers meet this demand, but only if it is fresh and accurate. When extending firm credit offers to consumers, lenders must ensure they reach individuals who are both creditworthy and likely to respond. Additionally, their message must be relevant and delivered at the right time and place. Without comprehensive data insights, it can be difficult to gauge whether a consumer is in the market for credit or determine how to best approach them. READ: Case study: Deliver timely and personalized credit offers The benefits of data-driven marketing insights By drawing data-driven marketing insights, you can reach and engage the best customers for your business. This means: Better understanding current and potential customers To increase response and conversion rates, organizations must identify high-propensity consumers and create personalized messaging that resonates. By leveraging customer data that is valid, fresh, and regularly updated, you’ll gain deeper insights into who your customers are, what they’re looking for and how to effectively communicate with them. Additionally, you can analyze the performance of your campaigns and better predict future behaviors. Utilizing technology to manage your customer data With different sources of information, it’s imperative to consolidate and optimize your data to create a single customer view. Using a data-driven technology platform, you can break down data silos by collecting and connecting consumer information across multiple sources and platforms. This way, you can make data available and accessible when and where needed while providing consumers with a cohesive experience across channels and devices. Monitoring the accuracy of your data over time Data is constantly changing, so implementing processes to effectively monitor and control quality over time is crucial. This means leveraging data quality tools that perform regular data cleanses, spot incomplete or duplicated data, and address common data errors. By monitoring the accuracy of your data over time, you can make confident decisions and improve the customer experience. Turning insights into action With data-driven marketing insights, you can level up your campaigns to find the best customers while decreasing time and dollars wasted on unqualified prospects. Visit us to learn more about how data-driven insights can power your marketing initiatives. Learn more Enhance your marketing strategies today This article includes content created by an AI language model and is intended to provide general information.