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Do more with less. Once the mantra of the life-hacking movement, it seems to be the charge given to marketers across the globe. Reduce waste; increase conversion rates; customize messages at a customer level; and do it all faster and more efficiently (read cheaper) than you did last quarter. The marketing challenges facing all companies seem to be more pronounced for financial institutions – not surprising for an industry with a reputation for late adoption. But doing more with less is not just a catchphrase thrown around by lean-obsessed consultants, it’s a response to key changes and challenges in the market. Here are 3 of the top marketing challenges creating business problems for financial institutions today. Budget constraints and misalignment As someone charged with the marketing remit in your firm, this probably comes as no surprise to you. Marketing budgets are stagnant, if not shrinking. Based on a 2018 report from CMO Survey, marketing budgets represent just over 11% of firm expenditures, a level which has remained largely constant over the last six years.Meanwhile, budgets at many financial firms appear to be out-of-touch with today’s ever-evolving market. In this Financial Brand report, virtually no financial institution committed more than 40% of their budget to mobile marketing, a stat unchanged from the prior two years. More channels mean even more segmentation Gone are the days where a company can rely heavily on traditional media to reach targets and clients. Now more than ever, your customers have access to a compounding amount of media on a proliferating number of channels. Some examples: In 2018, the Pew Research Center found most Americans (68%) get their news from social media. Cable companies recently followed streaming services to offer seamless service and experience across TV, desktop and mobile. Apple and Disney are two of several media juggernauts who are throwing their new streaming services and networks into the ring.This level of access is driving a shift in customers’ expectations for how, when and where they consume content. They want custom messages delivered in a seamless experience across the various channels they use. Shorter campaign cycles According to a recent study by Microsoft, humans now have shorter attention spans, at 8 seconds, than goldfish at 9 seconds. This isn’t surprising considering the levels of digital reach and access your customers are presented with. But this is also forcing a shortening of content and campaign cycles in response.   Marketers are now expected to plan, launch and analyze engaging campaigns to meet and stay ahead of customer need and expectation. Ironically, while there’s an intentional shortening of campaign cycles, there’s also a corporate focus to prolong and grow the customer relationship. It’s clear, competing in today’s world requires transforming your organization to address rapidly increasing complexity while containing costs. Competing against stagnant marketing budgets, proliferating media channels and shorter campaign cycles while delivering results is a formidable task, especially if your financial institution is not effectively leveraging data and analytics as differentiators. CMOs and their marketing teams must invest in new technologies and revisit product and channel strategies that reflect the expectations of their customers. How is your bank or credit union responding to these financial marketing challenges? Download Customer Acquisition eBook

Your consumers’ credit score plays an important role in how lenders and financial institutions measure their creditworthiness and risk. With a good credit score, which is generally defined as a score of 700 or above, they can quickly be approved for credit cards, qualify for a mortgage, and have easier access to loans with lower interest rates. In the spirit of Financial Literacy Month, we’ve rounded up what it takes for consumers to have a good credit score, in addition to some alternative considerations. Pay on Time Life gets busy and sometimes your consumers miss the “credit card payment due” note on their calendar squished between their work meetings and doctor’s appointment. However, payment history is one of the top factors in most credit scoring models and accounts for 35% of their credit score. As the primary objective of your consumers’ credit score is to illustrate to lenders just how likely they are to repay their debts, even one missed payment can be viewed negatively when reviewing their credit history. However, if there is a missed payment, consider checking their alternative financial services payments. They may have additional payment histories that will skew their creditworthiness more so than just their record according to traditional credit lines alone. Limit Credit Cards When your consumers apply for a new loan or credit card, lenders “pull” their credit report(s) to review their profile and weigh the risk of granting them credit or loan approval. The record of the access to their credit reports is known as a “hard” inquiry and has the potential to impact their credit score for up to 12 months. Plus, if they’re already having trouble using their card responsibly, taking on potential new revolving credit could impact their balance-to-limit ratio. For your customers that may be looking for new cards, Experian can estimate your consumers spend on all general-purpose credit and charge cards, so you can identify where there is additional wallet share and assign their credit lines based on actual spending need. Have a Lengthy Credit History The longer your consumers’ credit history, the more time they’ve spent successfully managing their credit obligations. When considering credit age, which makes up 21% of their credit score, credit scoring models evaluate the ages of your consumers’ oldest and newest accounts, along with the average age of all their accounts. Every time they open new credit cards or close an old account, the average age of their credit history is impacted. If your consumer’s score is being negatively affected by their credit history, consider adding information from alternative credit data sources for a more complete view. Manage Debt Wisely While some types of debt, such as a mortgage, can help build financial health, too much debt may lead to significant financial problems. By planning, budgeting, only borrowing when it makes sense, and setting themselves up for unexpected financial expenses, your consumers will be on the path to effective debt management. To get a better view of your consumers spending, consider Experian’s Trended3DTM, a trended attribute set that helps lenders unlock valuable insights hidden within their consumers’ credit scores. By using Trended3DTM data attributes, you’ll be able to see how much of your consumers’ credit line they typically utilize, whether they tend to revolve or transact, and if they are likely to transfer a balance. By adopting these habits and making smart financial decisions, your consumers will quickly realize that it’s never too late to rebuild their credit score. For example, they can potentially instantly improve their score with Experian Boost, an online tool that scans their bank account transactions to identify mobile phone and utility payments. The positive payments are then added to their Experian credit file and increase their FICO® Score in real time. Learn More About Experian Boost Learn More About Experian Trended 3DTM

If you’re a credit risk manager or a data scientist responsible for modeling consumer credit risk at a lender, a fintech, a telecommunications company or even a utility company you’re certainly exploring how machine learning (ML) will make you even more successful with predictive analytics. You know your competition is looking beyond the algorithms that have long been used to predict consumer payment behavior: algorithms with names like regression, decision trees and cluster analysis. Perhaps you’re experimenting with or even building a few models with artificial intelligence (AI) algorithms that may be less familiar to your business: neural networks, support vector machines, gradient boosting machines or random forests. One recent survey found that 25 percent of financial services companies are ahead of the industry; they’re already implementing or scaling up adoption of advanced analytics and ML. My alma mater, the Virginia Cavaliers, recently won the 2019 NCAA national championship in nail-biting overtime. With the utmost respect to Coach Tony Bennett, this victory got me thinking more about John Wooden, perhaps the greatest college coach ever. In his book Coach Wooden and Me, Kareem Abdul-Jabbar recalled starting at UCLA in 1965 with what was probably the greatest freshman team in the history of basketball. What was their new coach’s secret as he transformed UCLA into the best college basketball program in the country? I can only imagine their surprise at the first practice when the coach told them, “Today we are going to learn how to put on our sneakers and socks correctly. … Wrinkles cause blisters. Blisters force players to sit on the sideline. And players sitting on the sideline lose games.” What’s that got to do with machine learning? Simply put, the financial services companies ready to move beyond the exploration stage with AI are those that have mastered the tasks that come before and after modeling with the new algorithms. Any ML library — whether it’s TensorFlow, PyTorch, extreme gradient boosting or your company’s in-house library — simply enables a computer to spot patterns in training data that can be generalized for new customers. To win in the ML game, the team and the process are more important than the algorithm. If you’ve assembled the wrong stakeholders, if your project is poorly defined or if you’ve got the wrong training data, you may as well be sitting on the sideline. Consider these important best practices before modeling: Careful project planning is a prerequisite — Assemble all the key project stakeholders, and insist they reach a consensus on specific and measurable project objectives. When during the project life cycle will the model be used? A wealth of new data sources are available. Which data sources and attributes are appropriate candidates for use in the modeling project? Does the final model need to be explainable, or is a black box good enough? If the model will be used to make real-time decisions, what data will be available at runtime? Good ML consultants (like those at Experian) use their experience to help their clients carefully define the model development parameters. Data collection and data preparation are incredibly important — Explore the data to determine not only how important and appropriate each candidate attribute is for your project, but also how you’ll handle missing or corrupt data during training and implementation. Carefully select the training and validation data samples and the performance definition. Any biases in the training data will be reflected in the patterns the algorithm learns and therefore in your future business decisions. When ML is used to build a credit scoring model for loan originations, a common source of bias is the difference between the application population and the population of booked accounts. ML experts from outside the credit risk industry may need to work with specialists to appreciate the variety of reject inference techniques available. Segmentation analysis — In most cases, more than one ML model needs to be built, because different segments of your population perform differently. The segmentation needs to be done in a way that makes sense — both statistically and from a business perspective. Intriguingly, some credit modeling experts have had success using an AI library to inform segmentation and then a more tried-and-true method, such as regression, to develop the actual models. During modeling: With a good plan and well-designed data sets, the modeling project has a very good chance of succeeding. But no automated tool can make the tough decisions that can make or break whether the model is suitable for use in your business — such as trade-offs between the ML model’s accuracy and its simplicity and transparency. Engaged leadership is important. After modeling: Model validation — Your project team should be sure the analysts and consultants appreciate and mitigate the risk of over fitting the model parameters to the training data set. Validate that any ML model is stable. Test it with samples from a different group of customers — preferably a different time period from which the training sample was taken. Documentation — AI models can have important impacts on people’s lives. In our industry, they determine whether someone gets a loan, a credit line increase or an unpleasant loss mitigation experience. Good model governance practice insists that a lender won’t make decisions based on an unexplained black box. In a globally transparent model, good documentation thoroughly explains the data sources and attributes and how the model considers those inputs. With a locally transparent model, you can further explain how a decision is reached for any specific individual — for example, by providing FCRA-compliant adverse action reasons. Model implementation — Plan ahead. How will your ML model be put into production? Will it be recoded into a new computer language, or can it be imported into one of your systems using a format such as the Predictive Model Markup Language (PMML)? How will you test that it works as designed? Post-implementation — Just as with an old-fashioned regression model, it’s important to monitor both the usage and the performance of the ML model. Your governance team should check periodically that the model is being used as it was intended. Audit the model periodically to know whether changing internal and external factors — which might range from a change in data definition to a new customer population to a shift in the economic environment — might impact the model’s strength and predictive power. Coach Wooden used to say, “It isn’t what you do. It’s how you do it.” Just like his players, the most successful ML practitioners understand that a process based on best practices is as important as the “game” itself.

Earlier this month, Experian joined the nation’s largest community of online lenders at LendIt Fintech USA 2019 in San Francisco, CA to show over 5,000 attendees from 50 countries the ways consumer-permissioned data is changing the credit landscape. Experian Consumer Information Services Group President, Alex Lintner, and FICO Chief Executive Officer, Will Lansing, delivered a joint keynote on the topic of innovation around financial inclusion and credit access. The keynote addressed the analytical developments behind consumer-permissioned data and how it can be leveraged to responsibly and securely extend credit to more consumers. The session was moderated by personal finance expert, Lynnette Khalfani-Cox, from The Money Coach. “Consumer-permissioned data is not a new concept,” said Lintner. “All of us are on Facebook, Twitter, and LinkedIn. The information on these platforms is given by consumers. The way we are using consumer-permissioned data extends that concept to credit services.” During the keynote, both speakers highlighted recent company credit innovations. Lansing talked about UltraFICO™, a score that adds bank transaction data with consumer consent to recalibrate an existing FICO® Score, and Lintner discussed the newly launched Experian Boost™, a free, groundbreaking online platform that allows consumers to instantly boost their credit scores by adding telecommunications and utility bill payments to their credit file. “If a consumer feels that the information on their credit files is not complete and that they are not represented holistically as an applicant for a loan, then they can contribute their own data by giving access to tradelines, such as utility and cell phone payments,” explained Lintner. There are approximately 100 million people in America who do not have access to fair credit, because they are subprime, have thin credit files, or have no lending history. Subprime consumers will spend an additional $200,000 over their lifetime on the average loan portfolio. Credit innovations, such as Experian Boost and UltraFICO not only give consumers greater control and access to quality credit, but also expand the population that lenders can responsibly serve while providing a differentiated and competitive advantage. “Every day, our data is used in one million credit decisions; 350 million per year,” said Lintner. “When our data is being used, it represents the consumers’ credit reputation. It needs to be accurate, it needs to be timely and it needs to be complete.” Following the keynote, Experian, FICO, Finicity and Deserve joined forces in a breakout panel to dive deeper into the concept of consumer-permissioned data. Panel speakers included Greg Wright, Chief Product Officer at Experian’s Consumer Information Services; Dave Shellenberger, Vice President of Product Management at FICO; Nick Thomas, Co-Founder, President and Chief Technology Officer at Finicity, and Kalpesh Kapadia, Chief Executive Officer at Deserve. “As Alex described in today’s keynote, consumer-permissioned data is not a new concept,” said Greg Wright. “The difference here is that Experian, FICO and Finicity are applying this concept to credit services, working together to bring consumer-permissioned data to mass scale, so that lenders can reach more people while taking on less risk.” For an inside look at Experian and FICO’s joint keynote, watch the video below, or visit Experian.com and boost your own credit score.

So often a microscope is set on examining millennials and their behaviors – especially when it comes to their priorities and finances. But there’s a new generation entering the economy, with an entirely new set of preferences, behaviors and approach to money. Enter Gen Z. According to Bloomberg, this year, Generation Z becomes the biggest consumer cohort globally, “displacing millennials as a top obsession for investors.” This generation (falling between the ages of seven and 22) is 61 million strong and has a spending power of $143 billion in the U.S. alone. While much of the population that makes up Generation Z may still be in school, they are already creating their reputation as conscientious consumers. And lenders and financial institutions need to get in front of them if they want a chance at these meaningful investments. Because this generation has grown up in a world where the internet has always existed, everything can be ordered and delivered on demand, and communications occur over mobile platforms like Instagram and Snapchat, they view the world – and finances – through a different lens. Bloomberg suggests the following Gen Z broad trends; which investors should consider if they want this growing generation in their portfolios: They can be influenced. According to a recent Bloomberg survey, 52% of Gen Zers said they primarily find out about new products from social media. And they are 3 times more likely to purchase a product recommended by one of their favorite influencers than by a television or film celebrity. They have different vices – beyond just their smartphone addictions. As they are growing up in a world where screen time is eminent and cannabis is becoming legal (already legal in 10 U.S. states), they live with a different world view than many of the other generations. They don’t have to go to stores. Gen Z shops via clicks, not bricks. They choose their brand loyalties carefully. This generation is interested in environmental issues and ethical shopping, which drives their consumer activities, meaning it’s time for new considerations when it comes to marketing. They eat differently. Less likely to eat meat, we’re already seeing the shift that fast-food restaurants and packaged-food distributors are taking. What does this mean for financial institutions? You don’t have to be a social media influencer to get Gen Z in your portfolio – but it wouldn’t hurt. Many reports indicate that by 2020, Gen Z will command nearly 40% of all consumer shopping. With shopping driven by scrolling and purpose-driven purchases facilitated primarily by online transactions, gaining an understanding of these young consumers’ credit and charge card habits means you can better understand bankcard wallet share and target them as they start joining the workforce and beyond. In the not-too-distant future, there will be a need to examine high spend to increase interchange income. Trended data solutions can gain insight into these consumers as well as help you target and offer new lines of credit as they purchase with purpose – fueling them with credit to fund the ventures that matter to them most. Learn More  

A court in a Northern China province has developed a mobile app designed to enforce court rulings and create a socially credible environment. The app, which can be accessed via WeChat, China's most popular instant messaging platform, is designed to alert users when they are within a 500-meter radius of someone in debt. Users will get personal information about the debtors, including their exact location, names, national ID numbers, and why they have a low score. It's the latest innovation to become integrated into China's social credit system. What is a social credit system? China's social credit system, which will be enforced in 2020, aims to standardize the social reputation of citizens and businesses. It will rank citizens by attaching a score to various aspects of their social life - ranging from paying court fees to drinking alcohol to failing to pay bills. Although there are proposed consequences for low scorers, including travel bans and loan declines, 80% of citizens recently surveyed by the Washington Post support it. While the app seems like it could be a plotline from a "Black Mirror" episode, with its emphasis on reputation scoring and location-based activation, there are reasons it makes sense for the rather remote northern province. With many people in China still not having formal access to traditional banks, being able to alternatively assess their trustworthiness and risk could provide them the ability to access loans, rent houses, and even send their children to school. Additionally, to increase their scores, Chinese citizens are displaying improved behavior. China isn't the first country to attempt to gain a robust understanding of its consumers through alternative data sources. While U.S. financial institutions have experimented with using social media as a factor in determining a borrower's risk, Philippines-based Lenddo, a world leader in scoring and identity verification technology, is doing that and more. The company looks at social media, email, and mobile headset activity to determine repayment ability. Moreover, Discovery Bank in South Africa believes there's a correlation between fiscal responsibility and physical health. The South African bank plans to begin tracking the habits of its 4.4 million customers and offering better deals to those who are living a healthier lifestyle. For example, consumers can earn points for visiting the gym, getting a flu shot, or buying healthy groceries. The more points a consumer collects the better deals and savings they'll receive. The willingness to share data is not a characteristic unique to South African or Chinese citizens. A recent Accenture study of 47,000 banking and insurance customers showed that consumers are willing to share personal data in exchange for better customer assistance and discounts on products and services. The full extent of the impact on social credit to Chinese citizens is impossible to calculate, simply because the system doesn't fully exist yet. However, it does serve as an example of the many ways that credit scoring and the use of customer-permissioned data are evolving. Long gone are the days of mailing checks, ordering from a catalog, or even needing to carry cash. What's next?

At Experian, we know that fintechs don’t just need big data – they need the best data, and they need that data as quickly as possible. Successfully delivering on this need is one of the many reasons we’re proud to be selected as a Fintech Breakthrough Award winner for the second consecutive year. The Fintech Breakthrough Awards is the premier awards program founded to recognize fintech innovators, leaders and visionaries from around the world. The 2019 Fintech Breakthrough Award program received more than 3,500 nominations from across the globe. Last year, Experian took home the Consumer Lending Innovation Award for our Text for Credit Solution – a powerful tool for providing consumers the convenience to securely bypass the standard-length ‘pen & paper’ or keystroke intensive credit application process while helping lenders make smart, fraud protected lending decisions. This year, we are excited to announce that Experian’s Ascend Analytical Sandbox™ has been selected as winner in the Best Overall Analytics Platform category. “We are thrilled to be recognized by Fintech Breakthrough for the second year in a row and that our Ascend Analytical Sandbox has been recognized as the best overall analytics platform in 2019,” said Vijay Mehta, Experian’s Chief Innovation Officer. “We understand the challenges fintechs face - to stay ahead of constantly changing market conditions and customer demands,” said Mehta. “The Ascend Analytical Sandbox is the answer, giving financial institutions the fastest access to the freshest data so they can leverage the most out of their analytics and engage their customers with the best decisions.” Debuting in 2018, Experian’s Ascend Analytical Sandbox is a first-to-market analytics environment that moved companies beyond just business intelligence and data visualization to data insights and answers they could actually use. In addition to thousands of scores and attributes, the Ascend Analytical Sandbox offers users industry-standard analytics and data visualization tools like SAS, R Studio, Python, Hue and Tableau, all backed by a network of industry and support experts to drive the most answers and value out of their data and analytics. Less than a year post-launch, the groundbreaking solution is being used by 15 of the top financial institutions globally. Early Access Program Experian is committed to developing leading-edge solutions to power fintechs, knowing they are some of the best innovators in the marketplace. Fintechs are changing the industry, empowering consumers and driving customer engagement like never before. To connect fintechs with the competitive edge,  Experian launched an Early Access Program, which fast-tracks onboarding to an exclusive market test of the Ascend Analytical Sandbox. In less than 10 days, our fintech partners can leverage the power, breadth and depth of Experian’s data, attributes and models. With endless use cases and easy delivery of portfolio monitoring, benchmarking, wallet share analysis, model development, and market entry, the Ascend Analytical Sandbox gives fintechs the fastest access to the freshest data so they can leverage the most out of their analytics and engage their customers with the best decisions. A Game Changer for the Industry In a recent IDC customer spotlight, OneMain Financial reported the Ascend Analytical Sandbox had helped them reduce their archive process from a few months to 1-2 weeks, a nearly 75% time savings. “Imagine having the ability to have access to every single tradeline for every single person in the United States for the past almost 20 years and have your own tradelines be identified among them. Imagine what that can do,” said OneMain Financial’s senior managing director and head of model development. For more information, download the Ascend Analytical Sandbox™ Early Access Program product sheet here, or visit Experian.com/Sandbox.

With the number of consumer visits to bank branches having declined from 52% of people visiting their bank branch on a monthly basis to 32% since 2015, the shift in banking to digital is apparent. Rather than face-to-face interaction, today’s financial consumers value remote, on-demand, services. They expect instant credit decisioning, immediate account funding, and around-the-clock customer assistance. To adapt, financial service providers see the necessity to respond to consumers’ growing expectations and become part of their overall digital lifestyle. Here are a few ways that financial services can adjust to changing consumer behavior: Drive mobile app activity With more than 50% of the world’s population actively using smartphones, the popularity of mobile banking apps has soared. Mobile apps have revolutionized the banking sector by facilitating easier communication between clients and institutions, offering value-added services, and introducing blockchain technologies. Consumers use mobile banking apps to pay bills, transfer funds, deposit checks, and make person-to-person payments. In fact, according to a study by Bank of America, more than 60% of millennials use mobile apps to make person-to-person payments on a regular basis! Financial institutions who launch new, or invest in enhancing existing mobile apps, can lower their overall costs, increase ROI, and maintain customer loyalty. Provide convenience and rewards CGI conducted a survey on emerging financial consumer trends, focusing on bank customers’ top requirements. Results confirmed that 81% of respondents expected to receive some form of an incentive from their primary banks. Today’s financial consumers may reasonably be won over by service offerings. They want rewards, limited fees, and convenience. As an example, Experian’s Text for CreditTM simplifies the credit process by providing customers with instant credit decisioning through their mobile devices. Personalized offers based on customer behavior can help enhance your brand and attract new customers. Stay connected Today’s consumers expect instant service and gratification. Consumers prefer to work with banks who offer accessible and responsive customer service. According to a recent NGDATA consumer banking survey, 41% of banking customers report that poor customer service is the primary reason they would leave their bank. Mintel suggests developing an omnichannel experience aligned with consumer media consumption. Stay connected with consumers through mobile apps, chatbots, social media, and email. Ensure that all interactions are relevant and helpful and immediately alert customers of any institutional issues or changes. The growing digital demands of consumers are influencing how people purchase banking, lending, and credit services. These changes are driving increased urgency for financial service institutions to adopt real-time financial processes that meet demands for convenience and speed. Interested in more best practices? Watch our On-Demand Webinar

Be warned. I’m a Philadelphia sports fan, and even after 13 months, I still relish in the only Super Bowl victory I’ve ever known as a fan. Having spent more than two decades in fraud prevention, I find that Super Bowl LII is coalescing in my mind with fraud prevention and lessons in defense more and more. Let me explain: It’s fourth-down-and-goal from the one-yard line. With less than a minute on the clock in the first half, the Eagles lead, 15 to 12. The easy option is to kick the field goal, take the three points and come back with a six-point advantage. Instead of sending out the kicking squad, the Eagles offense stays on the field to go for a touchdown. Broadcaster Cris Collingsworth memorably says, “Are they really going to go for this? You have to take the three!” On the other side are the New England Patriots, winners of two of the last three Super Bowls. Love them or hate them, the Patriots under coach Bill Belichick are more likely than any team in league history to prevent the Eagles from scoring at this moment. After the offense sets up, quarterback Nick Foles walks away from his position in the backfield to shout instructions to his offensive line. The Patriots are licking their chops. The play starts, and the ball is snapped — not to Foles as everyone expects, but to running back Corey Clement. Clement takes two steps to his left and tosses the ball the tight end Trey Burton, who’s running in the opposite direction. Meanwhile, Foles pauses as if he’s not part of the play, then trots lazily toward the end zone. Burton lobs a pass over pursuing defenders into Foles’ outstretched hands. This is the “Philly Special” — touchdown! Let me break this down: A third-string rookie running back takes the snap, makes a perfect toss — on the run — to an undrafted tight end. The tight end, who hasn’t thrown a pass in a game since college, then throws a touchdown pass to a backup quarterback who hasn’t caught a ball in any athletic event since he played basketball in high school. A play that has never been run by the Eagles, led by a coach who was criticized as the worst in pro football just a year before, is perfectly executed under the biggest spotlight against the most dominant team in NFL history. So what does this have to do with fraud? There’s currently an outbreak of breach-fueled credential stuffing. In the past couple of months, billions of usernames and passwords stolen in various high-profile data breaches have been compiled and made available to criminals in data sets described as “Collections 1 through 5.” Criminals acquire credentials in large numbers and attack websites by attempting to login with each set — effectively “stuffing” the server with login requests. Based on consumer propensity to reuse login credentials, the criminals succeed and get access to a customer account between 1 in 1,000 and 1 in 50 attempts. Using readily available tools, basic information like IP address and browser version are easy enough to alter/conceal making the attack harder to detect. Credential stuffing is like the Philly Special: Credential stuffing doesn’t require a group of elite all-stars. Like the Eagles’ players with relatively little experience executing their roles in the Philly Special, criminals with some computer skills, some initiative and the guts to try credential stuffing can score. The best-prepared defense isn’t always enough. The Patriots surely did their homework. They set up their defense to stop what they expected the Eagles to do based on extensive research. They knew the threats posed by every Eagle on the field. They knew what the Eagles’ coaches had done in similar circumstances throughout their careers. The defense wasn’t guessing. They were as prepared as they could have been. It’s the second point that worries me when I think of credential stuffing. Consumers reuse online credentials with alarming frequency, so a stolen set of credentials is likely to work across multiple organizations, possibly even yours. On top of that, traditional device recognition like cookies can’t identify and stop today’s sophisticated fraudsters. The best-prepared organizations feel great about their ability to stop the threats they’re aware of. Once they’ve seen a scheme, they make investments, improve their defenses, and position their players to recognize a risk and stop it. Sometimes past expertise won’t stop the play you can’t see coming.  

The lending market has seen a significant shift from traditional financial institutions to fintech companies providing alternative business lending. Fintech companies are changing the brick-and-mortar landscape of lending by utilizing data and technology. Here are four ways fintech has changed the lending process and how traditional financial institutions and lenders can keep up: 1. They introduced alternative lending models In a traditional lending model, lenders accept deposits from customers to extend loan offers to other customers. One way that fintech companies disrupted the lending process is by introducing peer-to-peer lending. With peer-to-peer lending, there is no need to take a deposit at all. Instead, individuals can earn interest by lending to others. Banks who collaborate with peer-to-peer lenders can improve their credit appraisal models, enhance their online lending strategy, and offer new products at a lower cost to their customers. 2. They offer fast approvals and funding In certain situations, it can take banks and credit card providers weeks to months to process and approve a loan. Conversely, fintech lenders typically approve and fund loans in less than 24 hours. According to Mintel, only 30% of consumers find various banking features easy-to-use. Financial experts at Toptal suggest that banks consider speeding up the loan application and funding process within their online lending platforms to keep up with high-tech companies, such as Amazon, that offer customers an overall faster lending process from applications to approval, to payments.   3. They're making use of data Typically, fintech lenders pull data from several different alternative sources to quickly determine how likely a borrow is to pay back the loan. The data is collected and analyzed within seconds to create a snapshot of the consumer's creditworthiness and risk. The information can include utility, rent. auto payments, among other sources. To keep up, financial institutions have begun to implement alternative credit data to get a more comprehensive picture of a consumer, instead of relying solely upon the traditional credit score. 4. They offer perks and savings By enacting smoother automated processes, fintech lenders can save money on overhead costs, such as personnel, rent, and administrative expenses. These savings can then be passed onto the customer in the form of competitive interest rates. While traditional financial institutions generally have low overall interest rates, the current high demand for loans could help push their rates even lower. Additionally, financial institutions have started to offer more customer perks. For example, Goldman Sachs recently created an online lending platform, called Marcus, that offers unsecured consumer loans with no fees. Financial institutions may feel stuck in legacy systems and unable to accomplish the agile environments and instant-gratification that today's consumers expect. However, by leveraging new data sets and innovation, financial institutions may be able to improve their product offerings and service more customers. Looking to take the next step? We can help. Learn More About Banks Learn More About Fintechs

When it comes to new vehicle registration, there is one segment that stands out from the pack: crossover vehicles. According to Experian’s Q4 2018 Automotive Market Trends Analysis, over the last four years, crossovers (CUVs) have spiked in popularity, representing about a third of new vehicle registrations in 2014 (34.1 percent), but growing to nearly half the new vehicle market in 2018 (47.6 percent). In fact, the large growth in CUVs isn’t limited to just the last four years – there was a large volume of growth year-over-year compared to 2017; the share has grown nearly 4 percent. Sedans and hatchbacks, meanwhile, have seen their share decrease year-over-year. The charts below detail this change in market, based on Experian’s latest 2018 quarterly findings. Source: Experian Automotive VIO as of December 31, 2018 (light duty registered vehicles only) What’s driving this growth? Across the board, the number of light-duty vehicles on the road continues to increase, up to 275.3 million in the U.S. market, at the end of 2018, compared to 271.4 million a year prior. The growth in CUVs isn’t entirely unprecedented, as it’s been going on for a number of years.  CUVs continue to grow in popularity for a variety of reasons including: Greater visibility, as the driver sits higher than in a sedan/coupe Larger storage capacities for passengers or cargo Number of varieties available, such as size, engines, and manufactures Higher fuel efficiency than a full-size SUV or minivan Currently, there are over 130 different CUV/SUV Make/Model combos offered, and of those, the different engines, options, etc. drive that volume even higher. Source: Experian Automotive VIO as of December 31, 2018 (light duty registered vehicles only) Potential for growth Currently, there are only two CUVs among the top vehicles in the aftermarket “sweet spot.” Vehicles in the sweet spot are 6 to 12 model years old, and typically aged out of general OEM warranties for any repairs. These vehicles likely require more part replacement services, which may be performed by aftermarket service shops using parts from aftermarket part manufacturers. According to Experian data, the sweet spot has stopped falling and has settled for now. But, there is expected growth of the number of vehicles that fall into the sweet spot over the coming years. One of the segments where the aftermarket industry can begin to focus on will be CUVs. Source: Experian Automotive VIO as of December 31, 2018 (light duty registered vehicles only) The aftermarket can use this data to make more informed product decisions, specifically, around the high volume of CUVs expected to come into the sweet spot. With the number of vehicle options available on the market today, CUVs will continue to stand out as a segment to watch within the auto industry. There’s a greater story beyond the numbers and understanding how to leverage the data at hand can provide the industry with a greater understanding of CUVs and its potential for even greater growth. To learn more about CUVs/SUVs and total vehicles in operation, view the full Q4 2018 Automotive Market Trends Analysis.

While it’s a word that has only recently made its way into financial circles, consumers and businesses alike have been enjoying life in a platform world. Digital platforms connect riders with drivers, friends with family, manufacturers with buyers and sellers, and the list goes on. Digital platforms are technology-enabled business models that work to enhance efficiency, flexibility, scalability, integration, and ultimately user engagement. They’re integral to the operation and success of some of the most valuable companies in the world, including Google, Facebook, and Amazon. While digital platforms have made their way beyond high-tech to other industries, like supply chain management and logistics, financial institutions have fallen behind. The reasons why are understandable: a quickly evolving marketplace, regulatory induced risk aversion, and the need to protect data and privacy. Most of the digital platform adoption that has occurred in the financial industry has revolved around open banking, with a focus on enriching the customer experience. BBVA, for instance, recently launched a platform to enable their business clients to use white-labeled versions of BBVA products and services on-demand. But the value of digital platforms for the financial industry can go beyond how the consumer interfaces with his or her bank or credit union. Financial institutions could see the same efficiency, flexibility, and integration benefits by implementing technology platforms into their internal systems. Traditionally, financial institutions have used contrasting technology and systems across their customers’ lifecycle. From financial marketing and targeting, to acquisition and underwriting, there is ample opportunity to streamline and integrate these systems by adopting a platform architecture. The most future-forward platforms not only enable financial institutions to integrate their internal systems, but they also allow companies to seamlessly integrate their customer data with third-party data resources. The powers of data-driven answers combined with platform technology can help overcome business challenges and satisfy consumer and client demands. Is it time you and your company stepped up to the platform?

Whenever someone checks in for a flight, airport security needs to establish their identity. Prior to boarding the plane, passengers are required to show a government-issued ID. Agents check IDs for validity and compare the ID picture to the face of the person standing in front of them. This identity proofing is about making sure that would-be flyers really are who they claim to be. But what about online identity proofing? That’s much more challenging. Online banks certainly want to make sure they know a person’s identity before giving them access to their account. But for other online services, it’s fine to remain anonymous. The amount of risk involved in the engagement directly ties to the amount of verification and assurance needed for the individual. Government agencies care very much about identity. They won’t — and shouldn’t — issue a tax refund, provide a driver’s license or allow someone to sign up for Social Security benefits before they’re certain that the claimant’s identity is verified. Since we increasingly expect the same online user experience from government service providers as from online banks, hotel websites and retailers, this poses a challenge. How do government agencies establish a sufficient level of assurance for an online identity without sending their customers to a government office for face-to-face identity verification? To answer this challenge, the National Institute of Standards and Technology (NIST) has developed Digital Identity Guidelines. In its latest publication, SP 800-63-3, NIST helps government agencies implement their digital services while still mitigating the identity risks that come with online service provision. The ability to safely sign up, transact and interact with a government agency online has many benefits. Applying for something like unemployment insurance online is faster, cheaper and more convenient than using paper and waiting in line at a government field office. And for government agencies themselves, providing online services means that they can improve customer satisfaction levels while reducing their costs and subsequent bureaucracy. CrossCore®, was recently recognized by the independent Kantara Initiative for its conformance with NIST’s Digital Identity Guidelines for Identity Assurance (IAL2). Our document verification solution combines authoritative sources, machine learning and facial recognition technology to identify people accurately using photo-based government identification like a driver’s license or passport. The best part? Users can verify their identity in about 60 seconds, at whatever location they prefer, using their personal smartphone.

There’s recently been a significant amount of discussion about the stability of the automotive finance industry. Many fear the increase in the volume of delinquent U.S. automotive loans may be an early stage harbinger of the downfall of the automotive industry. But, the fact is, that’s not entirely true. While we certainly want to keep a close eye on the volume of delinquent loans, it’s important to put these trends into context. We’ve seen a steady increase in the volume of outstanding loan balances for the past several years – though the growth has slowed the past few quarters. And while much of the increase is driven by higher loan amounts, it also means there’s been an overall higher volume of vehicle buyers leaning on automotive lenders to finance vehicles. In fact, findings from our Q4 2018 State of the Automotive Finance Market Report show 85.1 percent of all new vehicle purchases were financed in Q4 2018 – compare that to 81.4 percent in Q4 2010 and 78.2 percent in Q4 2006. Suffice it to say, more financed vehicles will undoubtedly lead to more delinquent loans. But that also means, there is a high volume of car buyers who continue to pay their automotive loans in a timely manner. Through Q4 2018, there were nearly 86 million automotive loans and leases that were in good standing. With a higher volume of automotive loans than in the past, we should pay close attention to the percentage of delinquent loans compared to the overall market and compare that to previous years. And when we examine findings from our report, the percentage of automotive loans and leases that were 30-days past due dropped from 2.36 percent to 2.32 percent compared to a year ago. When we look at loans and leases that were 60-days past due, the percentages are relatively stable (up slightly from 0.76 percent to 0.78 percent compared to a year ago). It’s worth noting, these percentages are well below the high-water mark set during Q4 2009 when 3.30 percent of loans were 30-days delinquent and 0.94 percent of loans were 60-days delinquent. But, while the rate of delinquency is down and/or relatively stable year-over-year, it has trended upward since Q4 2015 – we’ll want to stay close to these trends. That said, much of the increase in the percentage of 60-day delinquent automotive loans is a result of a higher percentage of deep subprime loans from previous years – high-risk originations that become delinquent often occur more than 16 months after the origination. Additionally, the percentage of deep subprime originations has steadily decreased over the past two years, which could lead to a positive impact on the percentage of delinquent automotive loans. Despite rising automotive loan amounts and monthly payments, the data shows consumers appear to be making their payments on-time – an encouraging sign for automotive lenders. That said, lenders will want to continue to keep a close eye on all facets of car buyers’ payment performance moving forward – but it is important to put it into context. A clear understanding of these trends will better position lenders to make the right decisions when analyzing risk and provide consumers with comprehensive automotive financing options. To learn more about the State of the Automotive Finance Market report, or to watch the webinar, click here.    

Although half of businesses globally report an increase in fraud management over the past 12 months, many still experience fraud losses and attacks. To help address these challenges, Experian held its first-ever Fintech Fraud & Identity Meetup on February 5 in San Francisco, Calif. The half-day event was aimed at offering insights on the main business drivers of fraud, market trends, challenges and technology advancements that impact identity management and fraud risk strategy operations. “We understand the digital landscape is changing – inevitably, with technology enhancements come increased fraud risk for businesses operating in the online space,” said Jon Bailey, Experian’s Vice President of Fintech. “Our focus today is on fraud and identity, and providing our fintech customers with the tools and insights needed to grow and thrive.” The meetup was attended by number of large fintech companies with services spanning across a broad spectrum of fintech offerings. To kick off the event, Tony Hadley, Experian’s Senior Vice President of Government & Regulatory Affairs, provided an update on the latest regulatory news and trends impacting data and the fintech space. Next followed a fraud and identity expert panel, which engaged seasoned professionals in an in-depth discussion around two main themes 1) fraud trends and risk mitigation; and 2) customer experience, convenience, and trust. Expert panelists included: David Britton, Experian’s Vice President of Industry Solutions; Travis Jarae, One World Identity’s Founder & CEO; George Kurtyka, Joust’s Co-Founder & COO; and Filip Verley, Airbnb’s Product Manager. “The pace of fraud is so fast, by the time companies implement solutions, the shelf-life may already be old,” Britton said. “That is the crux – how to stay ahead. The goal is to future-proof your fraud strategy and capabilities.” At the close of the expert panel, Kathleen Peters, Experian’s Senior Vice President Head of Fraud and Identity, demoed Experian’s CrossCore™ solution – the first smart, open, plug-and-play platform for fraud and identity services. Peters began by stating, “Fraud is constant. Over 60% of businesses report an increase in fraud-related losses over the past year, with the US leading the greatest level of concern. The best way to mitigate risk is to create a layered approach; that’s why Experian invented CrossCore.” With the sophistication of fraudsters, it’s no surprise that many businesses are not confident with the effectiveness of their fraud strategy. Learn more about how you can stay one step ahead of fraudsters and position yourself for success in the ever-changing fraud landscape; download Experian’s 2019 Global Identity and Fraud Report here. For an inside look at Experian’s Fintech Fraud & Identity Meetup, watch our video below.