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Even as 75% of large and mid-sized U.S. e-commerce marketplace merchants predict continued double-digit online sales growth rates through the end of 2022,1 their success is hampered by unnecessary friction driven by concerns of card-not-present fraud and additional fraud risks in an online world. Compared to the 96% approval rate for point-of-sale purchases, card-not-present transactions yield a surprisingly low 81% approval rate. According to a survey conducted by Aite Novarica,1 the difference stems from reviewing up to 16% of attempted transactions for possible fraud. Even more surprising is that many of the respondents report that more than two-thirds of these reviews are later found to be unwarranted. Current transaction processing and risk capabilities are impeding growth and creating friction that damages e-commerce marketplace brands. What do we mean when we talk about online card-not-present transaction friction? Much of the success or failure of e-commerce depends on how easy merchants make it for consumers to complete a transaction. Effective identity resolution, fraud mitigation and risk solutions can lead to increased sales, while unrefined solutions and unnecessary friction will run merchants the risk of denying a legitimate customer purchase at checkout because they have been incorrectly labeled a fraudster–a ‘false positive’ or ‘false decline.’ These solutions leave room for improvement based on several key factors–the limited amount of data that passes through the authorization stream from the merchant to the issuer is a key contributor. According to Aite-Novarica Group’s The E-Commerce Fraud Enigma: The Quest to Maximize Revenue While Minimizing Fraud Report, “This reinforces the importance for merchants to augment the decisioning on their side with a wide variety of data sources that can help inform them regarding the risk profile of both the customer and the transaction.” Challenges with current transaction processing and verification tools Today, merchants leverage email address data, device information and other technologies to augment their address verification capabilities. The challenge is that these tools each judge the risk of a specific component of the transaction or the individual. Where integration is lacking, false positives are amplified and that is exactly what the data1 says is happening. Different tools working in isolation all catch the same fraud but flag different false positives—dragging down overall performance. The result is that 75% of e-commerce merchants place maximizing sales, minimizing friction and reducing false declines at the top of their to-do list. 88% say they are ready for a change to achieve these goals.1 Fast Facts 16% of all attempted online transactions experience friction for suspected fraud. 70% of this number is unnecessary, and upon manual review, are ultimately approved.1 78% of e-commerce merchants report friction driven by suspected fraud is increasing. 78% of merchants report increasing declines due to suspected fraud over the last two years. 46% indicate an increase of more than 5%.1 81% of consumers say that a positive online experience makes them think more highly of a brand.2 The longer it takes for banks and issuers to process new account, the higher the rate of abandonment, which reaches 40% when the process takes longer than 10 minutes.3 The friction that consumers encounter throughout their buying journey and the expenses associated with merchant and issuer manual reviews can be costly. It is estimated that 70% of unwarranted friction is costing businesses ~$11B in false decline losses and sales annually.1 That number is expected to increase. And, beyond profit losses incurred from the order that was declined, merchants risk damaging brand reputation because of poor customer/buying experiences, and in some cases, the loss of the customer relationship as well. Reducing friction and providing a positive shopping experience is increasingly important to business success Businesses looking to address this and limit false declines should not allow this to come at the expense completing transactions for legitimate customers. Experian can help. By leveraging our multidimensional data, technical expertise and advanced analytics capabilities, we can help businesses authenticate valid customers without unnecessary friction, thus increasing revenue by increased approval rates, without increasing fraud or operating expenses. Get started with Experian Link™ - our frictionless credit card owner verification solution. Learn more. Experian Link   1"E-Commerece Fraud Enigma: The Quest to Maximize Revenue While Minimizing Fraud Report" Aite-Novarica Group, July 2022 2"Global Insights Report: The Evolving Expectations and Experience of the New Digital Customer" Experian, April 2022 3"Capturing the Digital Identity Evolution Through a Layered Approach" Liminal, June 2021

There’s no doubt that fraudulent transactions can end up costing businesses money , which have led many to implement risk-mitigation strategies across every stage of the purchasing journey. However, this very same protection can increase false declines, and the associated friction can create high rates of cart-abandonment and negative impacts for a business’s brand. What is a false decline? A false decline is a legitimate transaction that is not completed due to suspected fraud or the friction that occurs during verification. False declines occur when a good customer is suspected of fraud and then prevented from completing a purchase. This happens when a company’s fraud prevention solution provides inadequate insight into the identity of the customer, flagging them as a potential bad actor. The result is a missed sale for the business and a frustrating transaction and experience for the customer. Are false declines costing your business money? False declines have high revenue and cost consequences for e-commerce marketplace merchants. By denying a legitimate customer purchase at checkout, businesses risk: Loss of new sales directly impacting revenue 16% of all sales are rejected by e-commerce merchants unnecessarily costing businesses ~$11B in sales annually,1 with an estimated 70% of unwarranted friction as a contributing cause. Loss in customer loyalty and lifetime value Blocked payments can leave customers with a poor impression of your business and there’s a good chance they’ll take their business elsewhere. Tarnished business reputation Today’s customers expect businesses and online services to work seamlessly. 81% of consumers say a positive experience makes them think more highly of a brand. Therefore, your brand might take a hit if unnecessary obstacles prevent them from having a good experience. High operational overhead costs The average business manually reviews 16% of transactions for fraud risk. It is estimated that 10 minutes are needed for each review. This inefficiency can be costly as it takes time away from fraud teams who can work on higher priority or strategic initiatives. Businesses can benefit from a seamless and secure payment experience that drives real-time resolution and eliminates a majority of false declines and bottlenecks, ultimately helping increase approval rates without increasing risk. Get started with Experian Link™ - our frictionless credit card owner verification solution. Learn more 1"E-Commerece Fraud Enigma: The Quest to Maximize Revenue While Minimizing Fraud Report" Aite-Novarica Group, July 2022

There's no magic solution to undoing the decades of policies and prejudices that have kept certain communities unable to fully access our financial and credit systems. But you can take steps to address previous wrongs, increase financial inclusion and help underserved communities. If you want to engage consumers and keep them engaged, you could start with the following four areas of focus. 1. Find ways to build trust Historical practices and continued discriminatory behavior have created justifiable distrust of financial institutions among some consumers. In February 2022, Experian surveyed more than 1,000 consumers to better understand the needs and barriers of underserved communities. The respondents came from varying incomes, ethnicity and age ranges. Fewer than half of all the consumers (47 percent) said they trusted their bank's personal finance advice and information, and that dropped to 41 percent among Black Americans. In a follow-up webinar discussion of financial growth opportunities that benefitted underserved communities, we found that many financial institutions saw a connection between their financial inclusion efforts and building trust with customers and communities. Here is a sample question and a breakdown of the primary responses: What do you think is the greatest business advantage of executing financial inclusion in your financial institution or business?1 Building trust and retention with customers and communities (78%) Increasing revenue by expanding to new markets (6%) Enhancing our brand and commitment to DEI (14%) Staying in alignment with regulator and compliance guidelines (2%) Organizations may want to approach financial inclusion in different ways depending on their unique histories and communities. But setting quantifiable goals and creating a roadmap for your efforts is a good place to start. 2. Highlight data privacy and mobile access If you want to win over new customers, you'll need to address their most pressing needs and desires. Consumers' top four considerations when signing up for a new account were consistent, but the specific results varied by race. Keep this in mind as you consider messaging around the security and privacy measures. Also, consider how underserved communities might access your online services. Having an accessible and intuitive mobile app or mobile-friendly website is important and likely carries even more weight with these groups. According to the Pew Research Center, as of 2021, around a quarter of Hispanic/Latino and 17% of Black Americans are smartphone-dependent — meaning they have a smartphone but don't have broadband access at home. Low-income and minority communities are also less likely to live near bank branches or ATMs. 3. Offer lower rates and fees Low rates and fees are also a top priority across the board — everyone likes to save money. However, fewer Black and Hispanic households have $1,000 in savings or more compared to white households, which could make additional savings opportunities especially important. There have been several recent examples of large banks and credit unions eliminating overdraft fees. And the Bank On National Account Standards can be a helpful framework if you offer demand deposit accounts. Lowering interest rates on credit products can be more challenging, particularly when consumers don't have a thick (or any) credit file. But by integrating expanded FCRA-regulated data sources and new scoring models, such as Experian's Lift PremiumTM, creditors can score more applicants and potentially offer them more favorable terms. 4. Leverage credit education tools and messaging For consumers who've had negative credit experiences, are new to credit, or are recent immigrants with little understanding of the U.S. credit system, building and using credit can feel daunting. About 80% of women have little or no confidence in getting approved for credit or worry that applying could hurt them further. Only 20% of consumers who make less than $35,000 a year say they're "extremely" or "very" confident they'll be approved for credit. While most consumers haven't used credit education tools before, they're willing to try. More than 60 percent of Black and Hispanic respondents said they're likely to sign up for free credit education tools and resources from their banks. Offering these tools could be an opportunity to strengthen trust and help consumers build credit, which can also make it easier for them to qualify for financial products and services in the future. Moving forward with financial inclusion Broadening access to credit can be an important part of financial inclusion, and financial institutions can grow by expanding outreach to underserved communities. However, the relationship must be built on trust, security, and offerings that meet these consumers' needs. Through our Inclusion Forward™ initiative, Experian can support your financial inclusion goals — helping you empower underserved communities by helping them grow their financial futures. Learn more about Experian financial inclusion solutions and financial inclusion tools.

“As an industry, fintech is known for creating compelling and personalized online journeys. But that experience can suffer if the fraud-prevention routines are perceived as burdensome by consumers,” said Kathleen Peters, Chief Innovation Officer for Experian’s Decision Analytics business, in a recent Q&A article with Finovate.  With the proliferation of the digital world, managing digital identity and “getting it right” is crucial. However, as much as it is an opportunity, leveraging consumer identity data can also create a stumbling block for some organizations. Peters cited Experian’s annual Global Identity and Fraud Report, specifically, the consumer concern around online security and the need for industry players to find the right balance between security and a frictionless experience.  “In short, we need the right fraud-prevention treatment for the right transaction; it is not a one-size-fits-all exercise,” Peters said.  The interview also covered the importance of knowing a customer’s identity for compliance reasons and business use cases, dispelling the myth that banks’ efforts around personalization are considered “creepy” by consumers, and the best ways for banks and fintechs to build trust among their consumers.   According to Experian’s Global Identity and Fraud Report, consumers are willing to give entities they trust more data, particularly if they feel they are receiving value. And it’s undeniable that data is at the heart of personalization and building better relationships.  “It comes down to identifying and understanding consumers and their needs. The best way to do that is with a lot of data,” Peters said.  To read the full article, visit Finovate’s website.  Finovate: Experian CIO on Digital Identity, Personalization and Building Trust with Consumer Data  Learn more about Experian Identity

As competition for used vehicles remains fierce, dealers must make quick decisions on whether to acquire a potential vehicle—or someone else will. Whether you need to evaluate a trade-in or want to make a flat-out offer on a vehicle, quickly accessing the vehicle’s history is only the first step. What if you could determine the likelihood that a vehicle will be on the road in five years and compare it to other similar vehicles? Would this help in your decision-making? Use the AutoCheck Score to evaluate vehicles for your lot The patented AutoCheck ScoreSM was developed to help dealers determine the likelihood that a vehicle will be on the road in five years. The AutoCheck Score summarizes vehicle history data into an easy-to-understand “score” and provides an equivalent score range. Understanding the likelihood that a unit will still be on the road in five years gives dealers more perspective on a vehicle’s desirability and can help you accurately price it. Use the AutoCheck Score to more accurately merchandise vehicles The AutoCheck Score range will give you similarly aged and classed vehicles for comparison that you can use to help merchandise the vehicle for market and help manage consumer conversations regarding the vehicle’s price. How does the AutoCheck Score work? The AutoCheck Score analyzes various characteristics, including age, segment, mileage, number of owners, vehicle use, vehicle events, accidents, theft, and title brands. Essentially, this score summarizes the AutoCheck Vehicle History Report fields and delivers a “score range” that allows you to compare the actual vehicle (score) to other similarly aged and classed vehicles. The score is based on a scale of 1 to 100, but reading the score in conjunction with the score range is essential since looking at the score without knowing the range will reveal only half the story. Check out the example below. Car #1 has a lower score than Car #2. However, look at the score ranges (73-86). For Car #1, other comparable vehicles should fall into a range from 73 to 86, and this car scored an 84. That means the vehicle is within the AutoCheck Score range compared to other similar cars of the same age and class. Car #2 has a score of 89. Because this is higher than Car #1’s score, you might assume this car has a more favorable vehicle history, but that’s not entirely accurate. Comparable vehicles should score in a range from 90 to 95, and this car falls short. That means the car’s history is slightly less favorable compared to similar vehicles of the same age and class. In today’s competitive environment though, dealers may decide to take in both trades, and the AutoCheck Score can also help make decisions on how to price the vehicles for market. Become an AutoCheck member today As an AutoCheck subscriber, you’ll have access to the AutoCheck Score. Between the large graphic display and the simple number comparison, the AutoCheck Score can help you make decisions on vehicle acquisition much quicker and easier!

According to Experian's State of the Automotive Finance Market Report: Q1 2022, SUVs and CUVs made up 60.38% of total vehicle financing, an increase from 58.95% in Q1 2021.

This post was updated in 2022. Fraud prevention can seem like a moving target. Criminals often shift from one scheme to the next, forcing organizations to play catch up to protect consumers’ identities and funds. But with the right technology, it’s possible to implement a fraud solution that provides protection and enhances the consumer journey. The pandemic fraud boom Government stimulus funds, COVID-19 testing and the loosening of business controls were a boon for criminals and levied an immense cost against businesses and consumers.   Consumer fraud losses rose to $3.3 billion in 2020, up from $1.8 billion in 2019.   The rapid increase in digital activity had two significant impacts. First, it shifted new account applications to the digital channel, where increased anonymity favors fraudsters by creating an environment where identity thieves could hide among the immense volume of applicants and monetize stolen personally identifiable information (PII). Second, it fueled account takeover (ATO) attacks by introducing digital “newbies” with unsophisticated password habits and limited ability to recognize and protect themselves from malware or social engineering, making them easy targets for credential theft. The return of old-school fraud Now that businesses and consumers are growing wise to some of the fraud schemes brought on by the COVID-19 pandemic, criminals are turning to new avenues, including tried-and-true methods like account opening and ATO fraud. New account fraud is expected to cost U.S. financial institutions $3.5 billion in 2021 alone.   Fraud organizations will take the PII available and match it with automated tools to increase their efficiency and success rates while continuing with phishing and other schemes to gain new information that can fuel further attacks. Building a fraud solution Staying ahead of fraudsters may feel like a losing proposition but equipped with the proper fraud controls, you can enhance the customer experience, increase operational efficiency and protect against developing fraud schemes. With a fraud solution that uses multiple tools in concert, it’s possible to recognize, verify and holistically risk assess most consumers that pass through your portfolio. The right platform — ideally one that can call upon different services to perform each job — will enable your organization to flag suspicious activity, increase insight into large-scale attacks, track risky users and break down traditional internal silos. By coordinating efforts and adding multiple touchpoints to run both in the foreground and background, you can ensure the right friction is applied at the right time without diminishing the end-user experience. In fact, by improving your recognition tools, you can make the experience for recognized, legitimate customers even easier. To learn more about the potential impacts of traditional fraud and how your organization can leverage a fraud prevention solution to achieve your retention and growth goals, read our latest white paper or request a call. Read white paper Schedule a call

Mortgage lenders are no stranger to income and employment verification. Leveraging a third-party solution provider for automated verifications is a standard practice in mortgage underwriting. Yet many lenders still struggle with time-consuming and complex verification experiences, which can be manual, inefficient and painful for borrowers. Since introducing Experian Verify™ to the market, we’ve had countless conversations with key players in the industry – from the largest banks to small independent mortgage brokers and everything in between. Through these conversations, we’ve learned quite a bit about some of the dos and don’ts when it comes to implementing a successful strategy for income and employment verification for mortgage. Lead with instant verification Digital transformation has forever changed borrower expectations for online experiences. The first key to a successful verification strategy is starting your workflow with an instant verification solution. This allows you to verify information in real time, delivering a completely frictionless experience for you and your borrowers. Consider building a waterfall process For instances when a borrower’s income and employment information is unable to be verified through an instant verification solution, add a consumer-permissioned (bank or payroll) option as a backup. Cascading from one digital solution to the next will ensure you can verify borrower information in seconds or minutes, as opposed to days or weeks. The goal is to prevent as many borrowers as possible from going through a costly manual process. Tap into unique data sources Many verification solutions in market today tap into the same data sources, which can make it difficult to differentiate between solutions and measure additive benefits. When evaluating options, look for verification solutions that leverage unique and exclusive data sources – allowing you to optimize hit rates and maximize value. Avoid a “one-size-fits-all” approach There is no silver bullet. Every market is unique and every lender has different needs. Your verification requirements are likely specific to your business, which means you need to leverage verification solutions that offer flexible options and enable you to build a verification experience that works best for you and your borrowers. Find a solution provider who’s all in It’s important to find a solution provider where income and employment verification isn’t just a “side hustle,” but is core to their business strategy. Find a provider who is fully committed – delivering new innovations, investing in key partnerships, maximizing accessibility through leading LOS / POS technology providers, and offers eligibility for key industry programs, such as Day 1 Certainty® from Fannie Mae. Challenge the status quo Many lenders have an existing relationship with a third-party solution provider. But it’s important not to put all your eggs in one basket. If your existing provider is not meeting all your needs, challenge the status quo. Consider adding a second provider to the top of your waterfall to help contain costs and tap into unique data that is not available from your existing provider. Ready for further insight? Learn more about income and employment verification for mortgage.

To drive profitable growth and customer retention in today’s highly competitive landscape, businesses must create long-term value for consumers, starting with their initial engagement. A successful onboarding experience would encourage 46% of consumers1 to increase their investments in a product or service. While many organizations have embraced digital transformation to meet evolving consumer demands, a truly exceptional onboarding experience requires a flexible, data-driven solution that ensures each step of customer acquisition in financial services is as quick, seamless, and cohesive as possible. Otherwise, financial institutions may risk losing potential customers to competitors that can offer a better experience. Here are some of the benefits of implementing a flexible, data-driven decisioning platform: Greater efficiency From processing a consumer’s application to verifying their identity, lenders have historically completed these tasks manually, which can add days, if not weeks, to the onboarding process. Not only does this negatively impact the customer experience, but it also takes resources away from other meaningful work. An agile decisioning platform can automate these tedious tasks and accelerate the customer onboarding process, leading to increased efficiency, improved productivity, and lower acquisition costs2. Reduced fraud and risk Onboarding customers quickly is just as important as ensuring fraudsters are stopped early in the process, especially with the rise of cybercrime. However, only 23% of consumers are very confident that companies are taking steps to secure them online. With a layered digital identity verification solution, financial institutions can validate and verify an applicant’s personal information in real time to identify legitimate customers, mitigate fraud, and pursue growth confidently. Increased acceptance rates Today’s consumers demand instant responses and easy experiences when engaging with businesses, and their expectations around onboarding are no different. Traditional processes that take longer and require heavy documentation, greater amounts of information, and continuous back and forth between parties often result in significant customer dropout. In fact, 40% of digital banking consumers3 abandon opening an account online due to lengthy applications. With a flexible solution powered by real-time data and cutting-edge technology, financial institutions can reduce this friction and drive credit decisions faster, leading to more approvals, improved profitability, and higher customer satisfaction. Having a proper customer onboarding strategy in place is crucial to achieving higher acceptance and retention rates. To learn about how Experian can help you optimize your customer acquisition strategy, visit us and be sure to check out our latest infographic. View infographic Visit us 1 The Manifest, Customer Onboarding Strategy: A Guide to Retain Customers, April 2021. 2 Deloitte, Inside magazine issue 16, 2017. 3 The Financial Brand, How Banks Can Increase Their New Loan Business 100%, 2021.

“Businesses are managing vast and growing amounts of consumer data – all while ensuring consumers’ privacy and complying with complex government regulations.” This is one of the many reasons there’s an increasing need for innovative digital identity solutions, as explored in a in Axios in a new Experian advertorial. Experian Identity, an integrated suite of identity solutions, products, and services, solves for challenges presented by the continuing migration of consumers to the internet and the resulting growth of consumer data. Leveraging that data stemming from diverse sources and combining it with advanced technologies, is critical to better determining and understanding a company’s best marketing prospects, as well as making confident decisions that enhance and safeguard the consumer experience. How? By leveraging multidimensional data and adhering to all consumer protection laws and industry self-regulatory standards, businesses can best recognize and connect with their consumers in more personalized, meaningful and secure ways. The Axios article discusses the benefits of Experian Identity, including strengthening fraud detection, solving for identity resolution, and helping to uncover business opportunities through segmenting, targeting and engaging consumers. “While today’s consumers are intensely interested in protecting their personal data and identities, they also want to be recognized and understood by the companies they do business with,” said Kathleen Peters, Chief Innovation Officer of Experian Decision Analytics, in the article. Read more about how Experian’s identity solutions helps businesses stay relevant with audiences, create a positive consumer experience, and meet people’s desire to be recognized in Axios’ new article. AXIOS: Making identities personal Learn more about Experian Identity

Experian recently attended Fintech Nexus USA, formally known as LendIt Fintech USA, the leading event for innovation in financial services. The event was held at the Javits Center in New York City on May 25-26. This year’s event housed over 4,000 attendees, 350 speakers and 225 sponsors. Experian was a proud platinum sponsor and participated in two expert sessions. Day one Gasan Awad, Product Management Vice President for Experian Fraud and Analytics, led the session, “Frictionless Fraud Prevention: Fintech’s Balancing Act.” Gasan was joined by Ibo Dusi, Chief Risk Officer for Revolut, and Ashish Gupta, Chief Risk Officer for LendingPoint, to discuss the growing fraud landscape. “ Fraud is not slowing down; it is getting more complex as customers continue to grow their online and digital usage.” Gasan Award There has been $56 billion in identity fraud losses since 2020, $13 billion stemmed from traditional identity fraud and $43 billion from identity fraud scams. 53% of consumers say security is the most important aspect of their online experience. During the session, our experts delved into important questions, including: What fraud and identity-proofing strategies should you consider to prevent sophisticated attacks and balance ease of interactions? How do you detect fraudsters without disrupting the customer experience? Want more insight? Access the discussion here. Learn more about how Experian supports fintechs by visiting our fintech resources page, and how we’re helping businesses of all types stay guarded against fraud with our fraud prevention solutions. Day two Greg Wright, Executive Vice President and Chief Product Officer for Experian, joined Afterpay, Sunbit and Jifiti in the session, “Reconciling Responsible Buy Now Pay Later (BNPL) with the Need for Access.”   BNPL industry fast facts: Last year in the U.S., 45 million Americans used BNPL. The number of U.S. users has grown 300% since 2018. Spending in the U.S. was $20.8B in 2021 and is forecasted to grow globally to $1T by 2025. Real-time data is critical for the BNPL industry. Greg provided insight into what Experian is doing to incorporate BNPL data into the lending ecosystem. Through The Buy Now Pay Later Bureau™, Experian plans to bring transparency to the BNPL and financial services industries. We are currently working with large BNPLs to support data furnishing of BNPL tradelines to the new bureau.     “We figured out a way to work with the BNPL clients to bring BNPL data into the lending ecosystem to where it does not have an immediate impact on your credit score just because you chose to use a BNPL option rather than a credit card,” said Greg Wright.      Typical lending risk models limit the accessibility of financing, but the nature of BNPL dictates that merchants and consumers need instant decision-making. Experian's response to the BNPL finance method is a consumer-friendly solution that supports end-to-end credit risk insights and point-of-sale financing solutions that do not fit into mainstream credit processes and aren’t adequately handled by traditional credit scores. This one-of-a-kind specialty bureau allows consumers to benefit from successful repayment behaviors and lenders of all types to drive more inclusive and responsible practices. Additionally, Experian has plans to make BNPL data visible on the core consumer credit profile. Ready to learn more? Access the discussion here. Discover how you can bring transparency to the industry with The Buy Now Pay Later Bureau and power innovative fintech lending solutions. Fintech resources The Buy Now Pay Later Bureau

These days, the call for financial inclusion is being answered by a disruptive force of new financial products and services. From fintech to storied institutional players, we're seeing a variety of offerings that are increasingly accessible and affordable for consumers. It's a step in the right direction. And beyond the moral imperative, companies that meet the call are finding that financial inclusion can be a source of business growth and a necessity for staying relevant in a competitive marketplace. A diaspora of credit-invisible consumers To start, let's put the problem in context. A 2022 Oliver Wyman report found about 19 percent of the adult population is either credit invisible (has no credit file) or unscoreable (not enough credit information to be scoreable by conventional credit scoring models). But some communities are disproportionately impacted by this reality. Specifically, the report found: Black Americans are 1.8 times more likely to be credit invisible or unscoreable than white Americans. Recent immigrants may have trouble accessing credit in the U.S., even if they're creditworthy in their home country. About 40 percent of credit invisibles are under 25 years old. In low-income neighborhoods, nearly 30 percent of adults are credit invisible and an additional 16 percent are unscoreable. Younger and older Americans alike may shy away from credit products because of negative experiences and distrust of creditors. Similarly, the Federal Deposit Insurance Corporation (FDIC) reports that an estimated 5.4 percent (approximately 7.1 million) households, were unbanked in 2019 — often because they can't meet minimum balance requirements or don't trust banks. Credit invisibles and unscoreables may prefer to deal in a cash economy and turn to alternative credit and banking products, such as payday loans, prepaid cards, and check-cashing services. But these products can perpetuate negative spirals. High fees and interest can create a vicious cycle of spending money to access money, and the products don't help the consumers build credit. In turn, the lack of credit keeps the consumers from utilizing less expensive, mainstream financial products. The emergence of new players Recently, we've seen explosive growth in fintech — technology that aims to improve and automate the delivery and use of financial services. According to market research firm IDC, fintech is expected to achieve a compound annual growth rate (CAGR) of 25 percent through 2022, reaching a market value of $309 billion. It's reaching mass adoption by consumers: Plaid® reports that 88 percent of U.S. consumers use fintech apps or services (up from 58 percent in 2020), and 76 percent of consumers consider the ability to connect bank accounts to apps and services a top priority. Some of these new products and services are aimed at helping consumers get easier and less expensive access to traditional forms of credit. Others are creating alternative options for consumers. Free credit-building tools. Experian Go™ lets credit invisibles quickly and easily establish their credit history. Likewise, consumers can use Experian Boost™ to build their credit with non-traditional payments, including their existing phone, utility and streaming services bills. Alternative credit-building products. Chime® and Varo® , two neobanks, offer credit builder cards that are secured by a bank account that customers can easily add or withdraw money from. Mission Asset Fund, a nonprofit focused on helping immigrants, offers a fee- and interest-free credit builder loan through its lending circle program. Cash-flow underwriting. Credit card issuers and lenders, including Petal and Upstart, are using cash-flow underwriting for their consumer products. Buy now, pay later. Several Buy Now Pay Later (BNPL) providers make it easy for consumers to pay off a purchase over time without a credit check. Behind the scenes, it's easier than ever to access alternative credit data1 — or expanded Fair Credit Reporting Act (FCRA)-regulated data — which includes rental payments, small-dollar loans and consumer-permissioned data. And there are new services that can help turn the raw data into a valuable resource. For example, Lift PremiumTM uses multiple sources of expanded FCRA-regulated data to score 96 percent of American adults — compared to the 81 percent that conventional scoring models can score with traditional credit data. While we dig deeper to help credit invisibles, we're also finding that the insights from previously unreported transactions and behavior can offer a performance lift when applied to near-prime and prime consumers. It truly can be a win-win for consumers and creditors alike. Final word There's still a lot of work to be done to close wealth gaps and create a more inclusive financial system. But it's clear that consumers want to participate in a credit economy and are looking for opportunities to demonstrate their creditworthiness. Businesses that fail to respond to the call for more inclusive tools and practices may find themselves falling behind. Many companies are already using or planning to use alternative data, advanced analytics, machine learning, and AI in their credit-decisioning. Consider how you can similarly use these advancements to help others break out of negative cycles. 1When we refer to “Alternative Credit Data," this refers to the use of alternative data and its appropriate use in consumer credit lending decisions, as regulated by the Fair Credit Reporting Act. Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.

Previously, the Global Identity and Fraud Report called for businesses to meet consumer expectations for online recognition and security while improving the digital experience. Organizations have answered this call with investments and new initiatives, but the fraud risk persists and consumers are relying on businesses to protect them. In our latest report, we explore the issues associated with siloed recognition processes, consumer expectations and preferences, and effective risk strategies.   We surveyed more than 6,000 consumers and 1,800 businesses worldwide about this connection for our 2022 Global Identity and Fraud Report.   This year’s report dives into:   How online security yields engagement and trust with today’s digital consumers The role of businesses in protecting online consumers, and the associated benefits The current opportunity for businesses to implement multiple identity and fraud solutions The role that orchestration and outsourcing play in helping companies prevent fraud   To earn consumer trust and loyalty, organizations need to leverage automated solutions to identify and protect consumers across their online journeys while providing seamless recognition and low-friction fraud prevention with a robust and flexible fraud platform. To learn more about our findings and how to implement an effective solution, download Experian’s 2022 Global Identity and Fraud Report. Read the report Review your fraud strategy

Last month my blog discussed how Building the Perfect Audience is Like Building the Perfect Burger! It was National Hamburger Month, so it seemed apropos! We offered marketers insight into building better audiences to help run more strategic marketing campaigns. This month, I am keeping with the monthly ‘holiday’ theme. June 20th was National American Eagle Day and being so close to our 4th of July holiday, I thought this was a perfect tie-in this month! You are probably wondering how I am going to tie in National American Eagle Day with another marketing strategy, but I promise you, I can! It’s all about having strategic insight into your customers and using an “eagle eye” to learn what you can about them to obtain better results from your marketing efforts. An eagle's-eye approach to finding and reaching the right consumers Here are a few fun facts about the great American Bald Eagle. Bald Eagles were placed at the center of the Great Seal of the United States in 1782! “Bald” in Bald Eagle refers to an old English word that means “white-headed.” We’ve all heard people talk about having an “eagle eye.” It’s true—this comes from the eagle’s astonishing eyesight. Eagles can see clearly and about eight times as far as humans can, allowing them to spot and focus on a rabbit or other prey at a distance of about two miles. Can you imagine? They can also look ahead and to the side simultaneously with a 340-degree visual field! Imagine if you had an eagle-eye, 340-degree view of your customers or prospects before running a marketing campaign. Well, you can. Experian data insights offers an eagle-eye approach to finding and reaching the right consumers at the right time in the buying journey to help you eliminate marketing waste and deliver a more significant return on your marketing spend. Understanding your customers is key With Experian’s Insights solution, as part of our comprehensive Experian Marketing Engine, we offer OEM marketers, agencies, and larger dealer groups access to multiple Insight categories to learn more about your customers. Understanding your current customers or the segment of prospects you would like to target allows for a more strategic approach to marketing campaigns. Our brand, model, registration, title, finance, market analysis, lifestyle, and household insights can help you take a 360-degree view of your customer (that's right, 360 degrees, 20 degrees more than an eagles eye!) There’s a lot of discuss here, so we’ve put together a complimentary resource, Understand Your Customer Before Choosing Your Audience that explains all the ways you can use Insights to learn more about your customers. What is the Experian Marketing Engine? Insights is part of the Experian Marketing Engine marketing solution that helps automotive marketers, manufacturers, advertisers, agencies, and platforms identify the right audience, uncover the most appropriate communication channels, develop messages that resonate, and measure the effectiveness of marketing activities.

According to Experian’s State of the Automotive Finance Market Report: Q1 2022, credit unions had their highest total share in five years