Customer Targeting & Segmentation

This article was updated on August 24, 2023. The continuous shift to digital has made a tremendous impact on consumer preferences and behaviors, with 81% thinking more highly of brands that offer multiple digital touchpoints. As a result, major credit card issuers are making creative pivots to their credit marketing strategies, from amplifying digital features in their card positioning to promoting partnerships and incentives on digital channels. But as effective as it is to reach consumers where they most frequent, credit card marketing will need to be more customer-centric to truly captivate and motivate audiences to engage.  So, what does this innovative period of credit marketing mean for financial institutions? How can these institutions stand out in a competitive, ever-changing market?  To target and acquire the right consumers, here are three credit card marketing strategies financial institutions should consider:  Maximize share of voice through targeted approaches  About half of consumers say personalization is the most important aspect of their online experience. Because today’s consumers are now expecting to engage digitally with brands, it’s important for financial institutions to not only be seen and mentioned on the right digital channels, but to deliver content that will resonate with their specific audiences. To do this, lenders must leverage fresh, comprehensive data sets to gain a more holistic view of consumers. This way, they can create targeted, customer-centric prescreen campaigns, allowing for enhanced personalization and increased response rates.  Seek new opportunities to provide value to customers  77% of Gen Zers believe having an established credit history is important to being less financially dependent on their parents. Changes in consumer needs and lifestyles provide great opportunities to deliver value to customers. For example, younger consumers starting their credit journeys may look for brands that offer financial education or tools to help them build credit. Financial institutions that are open to pivoting their strategies to adapt to these needs and behaviors are those that will succeed in attracting new customers and maintaining long-lasting relationships with existing ones.  Amplify points of differentiation in their products and marketing  Before buying a product, consumers likely want to know more about the items they are purchasing and how they compare to different players in the market. To help set their products apart from other offerings, financial institutions should clearly define their product’s key differentiators and convey them in a personalized and compelling manner.  Enhance your credit card marketing campaigns  From identifying the right prospects to saturating your targeting criteria with data-rich insights, Experian offers credit marketing solutions to help you level up your campaigns and stand out from the competition. Learn more

In a changing economy, banks of all sizes are more budget conscious, leading many to pull back on their marketing spend for new customer acquisition. But by making strategic marketing moves now, banks can uncover new opportunities and drive profitable, long-term growth. So, how can you find, engage, and win over high-value customers? Know who’s in the market for credit To build an effective bank customer acquisition strategy, you’ll want to be proactive with your campaign planning. Let’s say you’ve already defined your customer profile and have insights into their interests, lifestyles, and demographics. With predictive metrics and advanced tools like trended data and propensity-to-open models, you can further refine your segmentation strategies by identifying individuals who are likely to be in the market for your product. This way, you can reach consumers at the right time and personalize offers to achieve higher open rates. Embrace the digital era With today’s consumers increasing their banking activities online, leveraging digital channels in your bank customer acquisition strategy is imperative. In addition to connecting with consumers through direct mail, consider reaching out to them through email, social media, or your mobile banking applications. This will not only help increase the visibility of the offer, but also allow consumers to receive and respond faster. Another way to enhance your banking strategies for growth while meeting consumer expectations for digital is by making it easier and more convenient for consumers to onboard. With an automated and data-driven credit decisioning solution, you can streamline steps that are traditionally manual and time-consuming, such as data collection and identity verification. By providing seamless customer acquisition in banking, you can accelerate your decision-making and increase the likelihood of conversion. Make the most of your marketing spend While customer acquisition in banking should remain a high priority, we understand that driving growth on a tight marketing budget can be challenging. That’s why we created a tip sheet outlining ways for banks and other lenders to enhance their customer acquisition processes while effectively managing costs. Some of the tips include: Going beyond conventional scoring methods. By leveraging an advanced customer acquisition solution, you can gain a holistic view of your prospective customers to enhance predictive performance and identify hidden growth opportunities. Focusing on high-potential customers. Pinpointing consumers who are actively seeking credit enables you to focus your offers and resources on those who are likely to respond, resulting in a greater return on marketing investment. Amplifying your credit offers. Re-presenting preapproved credit offers through the digital channels that consumers most frequent enables you to expand your campaign reach, increase response rates, and reduce direct mailing costs. View the tip sheet to learn how you can make the most of your marketing budget to acquire new customers and drive long-term growth. Access tip sheet

Credit portfolio management has often involved navigating uncertainty, but some periods are more extreme than others. With the right data and analytics you can gain deeper insight into financial behaviors and risk to make better decisions and drive profitable growth. Along with access to an increasing amount of data, advanced analytics can help lenders more accurately: Forecast losses under different economic scenarios to estimate liquidity requirements. Identify fraud by detecting behaviors that could indicate identity theft, account takeover fraud, first-party or synthetic identity fraud. Incorporate real-time and alternative data,1 such as cash flow transaction data and specialty bureau data, in decisioning and scoring to accurately assess creditworthiness and expand your lending pool without taking on undue risk. Precisely segment consumers using internal and external data to increase automation during underwriting and identify cross-sell opportunities. Improve collections using AI-driven strategies and automated debt collection software to enhance operations and increase recovery rates. It’s imperative to take a proactive approach to portfolio monitoring. Monthly portfolio reviews with bureau scores, credit attributes and specialized scores — and using the results to manage credit lines and loan terms — are critical during volatile times. View our interactive e-book for the latest economic and consumer trends and learn how to set your portfolio up to succeed in any economic cycle. Download e-book 1"Alternative credit data" 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.

On average, the typical global consumer owns three or more connected devices.1 80% of consumers bounce between devices, while 31% who turned to digital channels for their last purchase used multiple devices along the way.2 Considering these trends, many lenders are leveraging multiple channels in addition to direct mail, including email and mobile applications, to maximize their credit marketing efforts. The challenge, however, is effectively engaging consumers without becoming overbearing or inconsistent. In this article, we explore what identity resolution for credit marketing is and how the right identity tools can enable financial institutions to create more cohesive and personalized customer interactions. What is identity resolution? Identity resolution connects unique identifiers across touchpoints to build a unified identity for an individual, household, or business. This requires an identity graph, a proprietary database that collects, stitches, and stores identifiers from digital and offline sources. As a result, organizations can create a persistent, high-definition customer view, allowing for more consistent and meaningful brand experiences. What are the types of identity resolution? There are two common approaches to identity resolution: probabilistic ID matching and deterministic ID matching. Probabilistic ID matching uses multiple algorithms and data sets to match identity profiles that are most likely the same customer. Data points used in probabilistic models include IP addresses and device types. Deterministic ID matching uses first-party data that customers have produced, enabling you to merge new data with customer records and identify matches among existing identifiers. Examples of this type of data include phone numbers and email addresses. What role does identity resolution play in credit marketing? Maintaining a comprehensive customer view is crucial to credit marketing — the insights gained allow lenders to determine who they should engage and the type of offer or messaging that would resonate most. But there are many factors that can prevent financial institutions from doing this effectively: poor data quality, consumers bouncing between multiple devices, and so on. Seven out of 10 consumers find it important that companies they interact with online identify them across visits. Identity resolution for credit marketing solves these issues by matching and linking customer data from disparate sources back to a single profile. This enables lenders to: Create highly targeted campaigns. If your data is incomplete or inaccurate, you may waste your marketing spend by engaging the wrong audience or sending out irrelevant credit offers. An identity resolution solution that leverages expansive, regularly updated data gives you access to high-definition views of individuals, resulting in more personalization and greater campaign engagement. Deliver seamless, omnichannel experiences. To further improve your credit marketing efforts, you’ll need to keep up with consumers not only as their needs or preferences change, but also as they move across channels and devices. Instead of creating multiple identity profiles for the same person, identity resolution can recognize an individual across touchpoints, allowing you to create consistent offers and cohesive experiences. Picking the right marketing identity resolution solution While the type of identity resolution for marketing solution can vary depending on your business’s goals and challenges, Experian can help you get started. To learn more, visit us today. 1 Global number of devices and connections per capita 2018-2023, Statista. 2 Cross Device Marketing - Statistics and Trends, Go-Globe.

To reach customers in our modern, diverse communications landscape, it's not enough to send out one-size-fits-all marketing messages. Today's consumers value and continue to do business with organizations that put them first. For financial institutions, this means providing personalized experiences that enable your customers to feel seen and your marketing dollars to go further. How can you achieve this? The answer is simple: a customer-driven credit marketing strategy. What is customer-driven marketing? Customer-driven marketing is a strategy that focuses on putting consumers first, rather than products. It means thinking about the needs, wants and motivations of the prospects you're trying to reach and centering your marketing campaigns and messages around that audience. When done well, this comprehensive approach extends beyond the marketing team to all members of a company. The benefits of customer-driven credit marketing One benefit of this type of personalized credit marketing is that you can target customers with a potentially higher lifetime value. By focusing your marketing efforts on the right prospects, you'll ensure that budgets are being spent wisely and that you're not wasting valuable marketing dollars communicating with consumers who either won't respond or aren't a fit for your business. Customer-driven marketing enables you to identify and reach the most profitable, highly responsive prospects in the most efficient way, while also engaging with current customers to optimize retention rates. When you create marketing programs that are customer-driven, you're not just selling; you're building relationships. Rather than being simply a service provider, you become a trusted financial partner and advisor. This kind of data-driven customer experience can help you onboard more customers and retain them for longer, translating to better results when it comes to your bottom line. Customer-driven marketing: How to get started Customer-driven marketing is less funnel, more spiral. You research, test, refine and repeat, all while taking into account customer feedback and campaign results. It starts with defining your target audience and creating customer personas. As you do this, think about all the factors that are involved in your target customers’ path to purchase, from general awareness and growing need to the final motivation that pushes them to commit. You'll also want to consider what their pain points may be and the barriers that may prevent them from buying. Next, develop a marketing strategy that aligns with your target customers' needs and outlines how and where you'll reach them. It may also be helpful to gather and respond to customer feedback to ensure the value propositions in your campaigns are aligned with customer expectations. These insights can help you refine your messaging, resulting in increased response and retention rates. Use the right data to extend relevant credit offers When you send credit offers, you want to ensure they're reaching the right prospects at the right time. You also want to make sure these credit offers are relevant to the consumers that receive them. That's where quality data comes in. By optimizing your data-driven customer segmentation, you can develop timely and personalized credit offers to boost response rates. For example, you might have a target audience of consumers who are both creditworthy and looking for a new vehicle. Segmenting this audience into smaller groups by demographic, life stage, financial and other factors helps you create credit marketing campaigns that speak to each type of customer as an individual, not just a number. Meet consumers on their preferred channels Nowadays, consumer behavior is more fragmented than ever. This is relevant not just from a demographic point of view, but from the perspective of purchasing behavior. Customer-driven marketing helps you interact with prospects as individuals so that the value propositions they encounter are a true fit for their life situation. For instance, different age groups tend to spend time on different platforms. But why they're on those channels at any particular time matters too. Messaging aimed at prospects in their leisure time should be different from messaging they'll encounter when actively researching potential purchases. Keep up with your customers This is one answer to the question of how to improve customer retention as well. Research demonstrates that it's more cost-effective to keep a customer than to acquire a new one. When you tailor retention efforts with a well-thought-out customer-driven marketing strategy, you're likely to boost retention rates, which in many cases lead to better profits over time. Importance of a customer-driven marketing strategy Putting consumers at the center of credit marketing strategies — and at the center of your business as a whole — is the foundation for personalized experiences that can ultimately increase response rates and customer satisfaction. For more on how your organization can develop an effective customer-driven marketing strategy, learn about our credit marketing solutions.

Despite economic uncertainty, new-customer acquisition remains a high priority in the banking industry, especially with increasing competition from fintech and big tech companies. For traditional banks, standing out in this saturated market doesn’t just involve enhancing their processes — it requires investing in the future of their business: Generation Z. Explore what Gen Z wants from financial technology and how to win them over in 2023 and beyond: Accelerate your digital transformation As digital natives, many Gen Zers prefer interacting with their peers and businesses online. In fact, more than 70% of Gen Zers would consider switching to a financial services provider with better digital offerings and capabilities.1 With a credit prescreen solution that harnesses the power of digital engagement, you can extend and represent firm credit offers through your online and mobile banking platforms, allowing for greater campaign reach and more personalized digital interactions. READ: Case study: Drive loan growth with digital prescreen Streamline your customer onboarding process With 70% of Gen Z and millennials having already opened an account online, it’s imperative that financial institutions offer a digital onboarding experience that’s quick, intuitive, and seamless. However, 44% of Gen Z and millennials state that their digital customer experience has been merely average, noting that the biggest gaps exist in onboarding and account opening.2 To improve the onboarding process, consider leveraging a flexible decisioning platform that accepts applications from multiple channels and automates data collection and identity verification. This way, you can reduce manual activity, drive faster decisions, and provide a frictionless digital customer experience. WATCH: OneAZ Credit Union saw a 25% decrease in manual reviews after implementing an integrated decisioning system Provide educational tools and resources Many Gen Zers feel uncertain and anxious about their financial futures, with their top concern being the cost of living. One way to empower this cohort is by offering credit education tools like step-by-step guides, score simulators, and credit alerts. These resources enable Gen Z to better understand their credit and how certain choices can impact their score. As a result, they can establish healthy financial habits, monitor their progress, and gain more control of their financial lives. By helping Gen Z achieve financial wellness, you can establish trust and long-lasting relationships, ultimately leading to higher customer retention and increased revenue for your business. To learn how Experian can help you engage the next generation of consumers, check out our credit marketing solutions. Learn more 1Addressing banking’s key business challenges in 2023.

 With nearly seven billion credit card and personal loan acquisition mailers sent out last year, consumers are persistently targeted with pre-approved offers, making it critical for credit unions to deliver the right offer to the right person, at the right time. How WSECU is enhancing the lending experience As the second-largest credit union in the state of Washington, Washington State Employees Credit Union (WSECU) wanted to digitalize their credit decisioning and prequalification process through their new online banking platform, while also providing members with their individual, real-time credit score. WSECU implemented an instant credit decisioning solution delivered via Experian’s Decisioning as a ServiceSM environment, an integrated decisioning system that provides clients with access to data, attributes, scores and analytics to improve decisioning across the customer life cycle. Streamlined processes lead to upsurge in revenue growth   Within three months of leveraging Experian’s solution, WSECU saw more members beginning their lending journey through a digital channel than ever before, leading to a 25% increase in loan and credit applications. Additionally, member satisfaction increased with 90% of members finding the simplified process to be more efficient and requiring “low effort.” Read our case study for more insight on using our digital credit solutions to: Prequalify members in real-time at point of contact Match members to the right loan products Increase qualification, approval and take rates Lower operational and manual review costs Read case study

A data-driven customer experience certainly has a nice ring, but can your organization deliver on the promise? What we're really getting at is whether you can provide convenience and personalization throughout the customer journey. Using data to personalize the customer journey About half of consumers say personalization is the most important aspect of their online experience. Forward-thinking lenders know this and are working to implement digital transformations, with 87 percent of business leaders stating that digital acceleration has made them more reliant on quality data and insights. For many organizations, lack of data isn't the issue — it's collecting, cleaning and organizing this data. This is especially difficult if your departments are siloed or if you're looking to incorporate external data. What's more, you would need the capabilities to analyze and execute the data if you want to gain meaningful insights and results. LEARN: Infographic: Automated Loan Underwriting Journey Taking a closer look at two important parts of the customer journey, here's how the right data can help you deliver an exceptional user experience. Prescreening To grow your business, you want to identify creditworthy consumers who are likely to respond to your credit offers. Conversely, it's important to avoid engaging consumers who aren't seeking credit or may not meet your credit criteria. Some of the external data points you can incorporate into a digital prescreening strategy are: Core demographics: Identify your best customers based on core demographics, such as location, marital status, family size, education and household income. Lifestyle and financial preferences: Understand how consumers spend their time and money. Home and auto loan use: Gain insight into whether someone rents or owns a home, or if they'll likely buy a new or used vehicle in the upcoming months. Optimized credit marketing strategies can also use standard (and custom) attributes and scores, enabling you to segment your list and create more personalized offers. And by combining credit and marketing data, you can gain a more complete picture of consumers to better understand their preferred channels and meet them where they are. CASE STUDY: Clear Mountain Bank used Digital Prescreen with Micronotes to extend pre-approved offers to consumers who met their predetermined criteria. The refinance marketing campaign generated over $1 million in incremental loans in just two months and saved customers an average of $1,615. Originations Once your precise targeting strategy drives qualified consumers to your application, your data-driven experience can offer a low-friction and highly automated originations process. Alternative credit data: Using traditional and alternative credit data* (or expanded FCRA-regulated data), including consumer-permissioned data, allows you to expand your lending universe, offer more favorable terms to a wider pool of applicants and automate approvals without taking on additional risk. Behavioral and device data: Leveraging behavioral and device data, along with database verifications, enables you to passively authenticate applicants and minimize friction. Linked and digital applications: Offering a fully digital and intuitive experience will appeal to many consumers. In fact, 81 percent of consumers think more highly of brands after a positive digital experience that included multiple touchpoints. And if you automate verifications and prefill applications, you can further create a seamless customer experience. READ: White paper: Getting AI-driven decisioning right in financial services Personalization depends on persistent identification The vast majority (91 percent) of businesses think that improving their digital customer journey is very important. And rightly so: By personalizing digital interactions, financial institutions can identify the right prospects, develop better-targeted marketing campaigns and stay competitive in a crowded market. DOWNLOAD: A 5-Step Checklist for Identifying Credit-Active Prospect To do this, you need an identity management platform that enables you to create a single view of your customer based on data streams from multiple sources and platforms. From marketing to account management, you can use this persistent identity to inform your decisions. This way, you can ensure you're delivering relevant interactions and offers to consumers no matter where they are. WATCH: Webinar: Omnichannel Marketing - Think Outside the Mailbox Personalization offers a win-win Although they want personalization, only 33 percent of consumers have high confidence in a business' ability to recognize them repeatedly.4 To meet consumer expectations and remain competitive, you must deliver digital experiences that are relevant, seamless, and cohesive. Experian Consumer View helps you make a good first impression with consumer insights based on credit bureau and modeled data. Enrich your internal data, and use segmentation solutions to further refine your target population and create offers that resonate and appeal. You can then quickly deliver customized and highly targeted campaigns across 190 media destinations. From there, the Experian PowerCurve® Originations Essentials, an automated decisioning engine, can incorporate multiple external and internal data sources to optimize your strategy. *Disclaimer: When 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.

In a dynamic, consumer-driven market, speed and agility are essential to providing seamless customer experiences. However, many financial institutions are still relying on legacy processes and systems to acquire new customers, leading to slow decision-making and significant customer dropout. Experian surveyed over 6,000 consumers and 1,800 businesses worldwide to gain insights into the latest digital consumer trends and key business priorities. Here are some findings to consider if you’re looking to refine your customer acquisition strategy: 40% of businesses consider investing in more digital and automated operations a priority. From application processing to identity verification, many lenders are still performing customer onboarding tasks manually. To increase efficiency and digital acquisition, forward-thinking businesses are focusing on flexible, data-driven technologies that enable centralized, automated, and scalable decision-making. 58% of consumers don’t feel that businesses completely meet their digital online experience. With today’s consumers expecting instant responses, lenders must ensure they’re providing quick and seamless credit application experiences. A nimble decisioning platform can help by providing lenders with greater visibility into consumers through automated data connectivity, allowing them to drive faster, more informed decisions digitally. For more consumer and business trends, download our infographic and check out our customer acquisition solution to learn how to optimize your customer acquisition strategy. Access infographic Power your customer acquisition process

"Out with the old and in with the new" is often used when talking about a fresh start or change we make in life, such as getting a new job, breaking bad habits or making room in our closets for a new wardrobe. But the saying doesn't exactly hold true in terms of business growth. While acquiring new customers is critical, increasing customer retention rates by just 5% can increase profits by up to 95%.1 So, what can your organization do to improve customer retention? Here are three quick tips: Stay informed Keeping up with your customers’ changing interests, behaviors and life events enables you to identify retention opportunities and create personalized credit marketing campaigns. Are they new homeowners? Or likely to purchase a vehicle within the next five months? With a comprehensive consumer database, like Experian’s ConsumerView®, you can gain granular insights into who your customers are, what they do and even what they will potentially do. To further stay informed, you can also leverage Retention TriggersSM, which alert you of your customers changing credit needs, including when they shop for new credit, open a new trade or list their property. This way, you can respond with immediate and relevant retention offers. Be more than a business – be human Gen Z's spending power is projected to reach $12 trillion by 2030, and with 67% looking for a trusted source of personal finance information,2 financial institutions have an opportunity to build lifetime loyalty now by serving as their trusted financial partners and advisors. To do this, you can offer credit education tools and programs that empower your Gen Z customers to make smarter financial decisions. By providing them with educational resources, your younger customers will learn how to strengthen their financial profiles while continuing to trust and lean on your organization for their credit needs. Think outside the mailbox While direct mail is still an effective way to reach consumers, forward-thinking lenders are now also meeting their customers online. To ensure you’re getting in front of your customers where they spend most of their time, consider leveraging digital channels, such as email or mobile applications, when presenting and re-presenting credit offers. This is important as companies with omnichannel customer engagement strategies retain on average 89% of their customers compared to 33% of retention rates for companies with weak omnichannel strategies. Importance of customer retention Rather than centering most of your growth initiatives around customer acquisition, your organization should focus on holding on to your most profitable customers. To learn more about how your organization can develop an effective customer retention strategy, explore our marketing solutions. Increase customer retention today 1How investing in cardholder retention drives portfolio growth, Visa. 2Experian survey, 2023.

Putting customers at the center of your credit marketing strategy is key to achieving higher response rates and building long-term relationships. To do this, financial institutions need fresh and accurate consumer data to inform their decisions. Atlas Credit was looking to achieve higher response rates on its credit marketing campaigns by engaging consumers with timely and personalized offers. The company implemented Experian’s Ascend Marketing, a customer marketing and acquisition engine that provides marketers with accurate and comprehensive consumer credit data to build and deploy intelligent marketing campaigns. With deeper insights into their consumers, Atlas Credit created timely and customized credit offers, resulting in a 185% increase in loan originations within the first year of implementation. Additionally, the company was able to effectively manage and monitor its targeting strategies in one place, leading to improved operational efficiency and lower acquisition costs. To learn more about creating better-targeted marketing campaigns and enhancing your strategies, read the full case study. Download the case study Learn more

For a credit prescreen marketing campaign to be successful, financial institutions must first define their target audience. But just because you’ve identified your ideal customers, it doesn’t mean that every individual within that group has the same needs, interests or behaviors. As such, you’ll need to use data-driven customer segmentation to create messages and offers that truly resonate. Customer segmentation example Customer segmentation is the practice of dividing your target audience into smaller sub-groups based on shared characteristics, behaviors or preferences. This allows you to develop highly targeted marketing campaigns and engage with individual groups in more relevant and meaningful ways. What role does data play in customer segmentation? When it comes to segmenting customers, there isn’t a one-size-fits-all approach that works perfectly for all campaigns and markets. However, regardless of the campaign, you’ll need accurate and relevant data to inform your segmenting strategy. Let’s walk through a customer segmentation example. Say you want to launch a credit marketing campaign that targets creditworthy consumers in the market for a new mortgage. Some of the most influential data points to consider when segmenting include: Demographics Demographic data allows you to get to know your customers as individuals in terms of age, gender, education, occupation and marital status. If you want to create a segment that consists of only middle-aged consumers, leveraging demographic data makes it easier to identify these individuals, refine your messaging and predict their future buying behaviors. Life stage Life event data, such as new parents and new homeowners, helps you connect with consumers who have experienced a major life event. Because you’re targeting consumers in the market for a new mortgage, using fresh and accurate life stage data can help you create an engaging, event-based marketing campaign relevant to their timeline. Financial Financial data segments go beyond income and estimate the way consumers spend their money. With deeper insights into customers’ financial behaviors, you can more accurately assess creditworthiness and make smarter lending decisions. Transactional Transactional data segments group your customers according to their unique buying habits. By getting to know why they purchase your products or their frequency of spend, you can gain a better understanding of who your most engaged customers are, segment further and find opportunities for cross-sell and upsell. Why is data-driven customer segmentation critical for your business? With data-driven customer segmentation, you can develop relevant marketing campaigns and messages that speak to specific audiences, enabling you to demonstrate your value propositions more clearly and deliver personalized customer experiences. Additionally, because customer segmentation enables you to tailor your marketing efforts to those most likely to respond, you can achieve higher conversions while cutting down on marketing spend and resources. Ready to get started? While data-driven customer segmentation may seem overwhelming, Experian can help fill your marketing gaps with custom-based data, audiences and solutions. Armed with a better understanding of your consumers’ patterns and journeys, you can start targeting them more effectively. Create highly targeted credit marketing campaigns

From chatbots to image generators, artificial intelligence (AI) has captured consumers' attention and spurred joy — and sometimes a little fear. It's not too different in the business world. There are amazing opportunities and lenders are increasingly turning to AI-driven lending decision engines and processes. But there are also open questions about how AI can work within existing regulatory requirements, how new regulations will impact its use and how to implement advanced analytics in a way that increases equitable inclusion rather than further embedding disparities. How are lenders using AI today? Many financial institutions have implemented — or at least tested — AI-driven tools throughout the customer lifecycle to: Target the right consumers: With tools like Ascend Intelligence ServicesTM Target (AIS Target), lenders can better identify consumers who match their credit criteria and send right-sized offers, which enables them to maximize their acceptance rates. Detect and prevent fraud: Fraud detection tools have used AI and machine learning techniques to detect and prevent fraud for years. These systems may be even more important as new fraud risks emerge, from tried-and-true methods to generative AI (GenAI) fraud. Assess creditworthiness: ML-based models can incorporate a range of internal and external data points to more precisely evaluate creditworthiness. When combined with traditional and alternative credit data*, some lenders can even see a Gini uplift of 60 to 70 percent compared to a traditional credit risk model. Manage portfolios: Lenders can also use a more complete picture of their current customers to make better decisions. For example, AI-driven models can help lenders set initial credit limits and suggest when a change could help them increase wallet share or reduce risk. Lenders can also use AI to help determine which up- and cross-selling offers to present and when (and how) to reach out. Improve collections: Models can be built to ease debt collection processes, such as choosing where to assign accounts, which accounts to prioritize and how to contact the consumer. Additionally, businesses can implement AI-powered tools to increase their organizations' productivity and agility. GenAI solutions like Experian Assistant accelerate the modeling lifecycle by providing immediate responses to questions, enhancing model transparency and parsing through multiple model iterations quickly, resulting in streamlined workflows, improved data visibility and reduced expenses. WATCH: Explore best practices for building, fine-tuning and deploying robust machine learning models for credit risk. The benefits of AI in lending Although lenders can use machine learning models in many ways, the primary drivers for adoption in underwriting include: Improving credit risk assessment Faster development and deployment cycles for new or recalibrated models Unlocking the possibilities within large datasets Keeping up with competing lenders Some of the use cases for machine learning solutions have a direct impact on the bottom line — improving credit risk assessment can decrease charge-offs. Others are less direct but still meaningful. For instance, machine learning models might increase efficiency and allow further automation. This takes the pressure off your underwriting team, even when application volume is extremely high, and results in faster decisions for applicants, which can improve your customer experience. Incorporating large data sets into their decisions also allows lenders to expand their lending universe without taking on additional risk. For example, they may now be able to offer risk-appropriate credit lines to consumers that traditional scoring models can't score. And machine learning solutions can increase customer lifetime value when they're incorporated throughout the customer lifecycle by stopping fraud, improving retention, increasing up- or cross-selling and streamlining collections. Hurdles to adoption of machine learning in lending There are clear benefits and interest in machine learning and analytics, but adoption can be difficult, especially within credit underwriting. A recent Forrester Consulting study commissioned by Experian found that the top pain points for technology decision makers in financial services were reported to be automation and availability of data. Explainability comes down to transparency and trust. Financial institutions have to trust that machine learning models will continue to outperform traditional models to make them a worthwhile investment. The models also have to be transparent and explainable for financial institutions to meet regulatory fair lending requirements. A lack of resources and expertise could hinder model development and deployment. It can take a long time to build and deploy a custom model, and there's a lot of overhead to cover during the process. Large lenders might have in-house credit modeling teams that can take on the workload, but they also face barriers when integrating new models into legacy systems. Small- and mid-sized institutions may be more nimble, but they rarely have the in-house expertise to build or deploy models on their own. The models also have to be trained on appropriate data sets. Similar to model building and deployment, organizations might not have the human or financial resources to clean and organize internal data. And although vendors offer access to a lot of external data, sometimes sorting through and using the data requires a large commitment. How Experian is shaping the future of AI in lending Lenders are finding new ways to use AI throughout the customer lifecycle and with varying types of financial products. However, while the cost to create custom machine learning models is dropping, the complexities and unknowns are still too great for some lenders to manage. But that's changing. Experian built the Ascend Intelligence Services™ to help smaller and mid-market lenders access the most advanced analytics tools. The managed service platform can significantly reduce the cost and deployment time for lenders who want to incorporate AI-driven strategies and machine learning models into their lending process. The end-to-end managed analytics service gives lenders access to Experian's vast data sets and can incorporate internal data to build and seamlessly deploy custom machine learning models. The platform can also continually monitor and retrain models to increase lift, and there's no “black box" to obscure how the model works. Everything is fully explainable, and the platform bakes regulatory constraints into the data curation and model development to ensure lenders stay compliant. Learn more * When 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 (FCRA). Hence, the term “Expanded FCRA Data" may also apply in this instance and both can be used interchangeably.

Strategic automotive marketing and measurement are getting more complicated with the increase in consumer channels and devices. This makes it harder for marketers to obtain a complete measurement picture. Measurement terminology is also evolving. Here's a look at some of today’s key definitions to familiarize you with the nuances and challenges it may already bring to your analytics. What is the open web? The open web is the web as a whole or the public side of the web with all the millions of sites that do not require a subscription or fee to use them. For example, in our industry, this would be an auto manufacturer’s website, a dealership’s website, or an online consumer shopping portal where you list your vehicles for sale – all of these are on the open web. These sites use open-source standards to deliver content to consumers without a separate app or company acting as gatekeepers. However, tracking approaches on the open web will shift as cookies will eventually disappear. What is a walled garden? A walled garden is a closed platform or ecosystem (e.g., Amazon, Apple, Facebook) wherein the platform provider controls the content, applications, and/or media and restricts access as it sees fit. The publisher offers consumer privacy and rich first-party data to advertisers, but the measurement is limited to activity within the ‘walls’ of the garden.  From an advertising perspective, buyers can only access these platforms through their own buying tools; they do not give access to any independent platforms. The publisher (the Walled Garden) handles all the buying, serving, tracking, and reporting within their ecosystem.  So, let’s say you are an automotive consumer checking out vehicles. If you’re reading your Facebook feed on your phone and you see an advertisement for a vehicle or a dealership, that OEM or dealership is advertising in a walled garden – in this case, the walled garden is Facebook. The challenge to an advertiser is that they can only measure activity that occurred within that ecosystem using the walled garden’s platform and measurement tools. What is a hedged garden? The “hedged garden” is a new industry concept. A hedged garden is when a network of publishers work together to activate first-party data sets in a privacy-compliant way across many partners at scale. These publishers run their businesses with large amounts of first-party consumer data. They often do not own or operate complete buying stacks. For example, companies like Target and Walmart let advertisers employ their data on shoppers for ad targeting, but brands can use their own buying tools. Other examples of a hedged garden might include Connected TV platforms such as Vizio’s or Samsung’s in-house ad businesses. If you’re sitting on your couch watching your Vizio-connected TV and you see an advertisement for a dealership or a manufacturer, they are advertised within that hedged garden.  As an advertiser, the advantage is that you can use their buying tool when targeting shoppers for your advertising. How to fill in the gaps the walled garden may leave open The walled garden can challenge marketers who desire cross-channel activation and measurement. If you're a marketer working within a walled garden, we can work with the data you have to give you a complete picture of your audience’s digital journey. Our experience and vast databases, including vehicle, credit, and customer insights, allow us to continue building strong partnerships within the fast-growing (Hedged Garden) ecosystem. We can help. Our Subject Matter Expert, Laurel Malhotra will be happy to answer any questions you may have. Contact her today.

With an abundance of loan options in today’s market, retaining customers can be challenging for banks and credit unions, especially small or regional institutions. And as more consumers look for personalization and digital tools in their banking experience, the likelihood of switching to institutions that can meet these demands is increasing.1 According to a recent Experian survey, 78% of consumers have conducted personal banking activities online in the last three months. However, 58% of consumers don’t feel that businesses completely meet their expectations for a digital online experience. To remain competitive in today's market, organizations must enhance their prescreen efforts by accelerating their digital transformation. Prescreen in today's economic environment While establishing a strong digital strategy is crucial to meeting the demands of today’s consumers, economic conditions are continuing to change, causing many financial institutions to either tighten their marketing budgets or hold off on their prescreen efforts completely. Fortunately, lenders can still drive growth during a changing economy without having to make huge cuts to their marketing budgets. How? The answer lies in digital prescreen. Case study: Uncover hidden growth opportunities Wanting to grow their business and existing relationships, Clear Mountain Bank looked for a solution that could help them engage customers with money-saving product offers while delivering a best-in-class digital banking experience. Leveraging Digital Prescreen with Micronotes, the bank was able to identify and present dollarized savings to customers who held higher-priced loans with other lenders. What’s more, the bank extended these offers through personalized conversations within their online and mobile banking platforms, resulting in improved digital engagement and increased customer satisfaction. By delivering competitive prescreen offers digitally, Clear Mountain Bank generated more than $1 million in incremental loans and provided customers with an average of $1,615 in cost savings within the first two months of deployment. “Digital Prescreen with Micronotes supplied the infrastructure to create higher-quality, personalized offers, as well as the delivery and reporting. They made prescreen marketing a reality for us.” – Robert Flockvich, Director of Community Outreach and Retail Lending at Clear Mountain Bank To learn more about how you can grow your portfolio and customer relationships, read the full case study or visit us. Download the case study Visit us 1The Keys to Solving Banking’s Customer Loyalty & Retention Problems, The Financial Brand, 2022.