Tag: fintech

Scott Brown presents at Reuters Next “If I were to look into a crystal ball, traditional lending methodology and processes will not be replaced; they will be augmented by consumers connecting to banks via APIs, contributing the data they are comfortable with, and banks using that in conjunction with historical credit data to offer newer and better products they didn’t have access to before. The convergence of data, tech and AI leads to more financial inclusion and a more modern way of underwriting.”Scott Brown, Group President Financial Services, Experian North America Scott Brown, Group President of Financial Services for Experian North America, recently presented at Reuters Next discussing the transformative power of AI and data analytics in financial services. The session also covered the top challenges that financial institutions face today and how advances in technology are helping organizations overcome those challenges. This keynote presentation was a timely follow-up to Brown’s previous appearance at the Money20/20 conference in Las Vegas, where he revealed the details of Experian’s latest innovation in GenAI technology, Experian Assistant. Brown, in a conversation with TV writer, producer and anchor Del Irani, spoke about the ethical considerations of AI innovation, what the future of underwriting may look like, and how open banking can drive financial inclusion and have a significant positive impact on both businesses and consumers. “If you are extending a line of credit to a given consumer, how do you do so in a way that’s integrated into their everyday lives? That’s where the concept of embedded finance comes in, and how to embed finance into a consumer’s life, and not the other way around.”Scott Brown, Group President Financial Services, Experian North America By embedding finance into consumers’ lives, and not the other way around, organizations can develop better strategies to balance risk and generate more revenue. He also focused on three foundational steps to take advantage of the capabilities AI offers: data quality, transparency, and responsibility. Areas of focus for implementing AI As organizations rely on more sophisticated approaches, data quality inputs are more important than ever. Inaccurate data can lead to poor business decisions that can have a negative impact on organizations’ bottom line. Transparency is also a crucial component of implementing AI solutions. Companies should be able to explain how their models work and why the end results make sense while avoiding biases. Leveraging data with AI tools allows organizations to get a better view of the consumer, which is a goal of most banks and lending institutions. Using that consumer data responsibly is important for financial institutions to establish and maintain trust with the people who use their services. While incorporating AI solutions into everyday business operations is important for financial institutions to better serve their consumers and remain competitive in the industry, a lack of access to AI tools can prevent some organizations from doing so. A fragmented approach leads to higher costs, lower efficiency, and greater risk Until recently, financial institutions have had to rely on several different technology providers and tools to optimize customer experience and operational efficiency while protecting consumers from the risk of identity theft and fraud. This fragmented approach can result in increased costs for organizations and higher risk for consumers. Now, AI technology is solving this issue by integrating functionality into a single platform, such as the Experian Ascend Technology Platform™. This streamlined access to a comprehensive suite of tools can help accelerate time-to-value while also eliminating compliance risks. Full interview available now Brown’s full interview at Reuters Next reveals more details about how Experian is empowering organizations to better serve their consumers’ financial needs through AI innovation while also helping more than 100 million Americans who don’t have access to the mainstream credit ecosystem due to being credit invisible, unscoreable, or have a low credit score. Watch the full interview to learn more about how Experian is continuing to bring financial power to all through innovative technology. Watch the full interview now

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

In the dynamic consumer credit landscape, understanding emerging trends is paramount for fintechs to thrive. Experian's latest fintech trends report provides deep insights into the evolving market, shedding light on crucial areas such as origination volumes, average loan balances, and delinquency trends. Let's delve into some key findings and their implications for fintech lenders. Fintech lending origination volume trends The report reveals intriguing shifts in origination volumes for unsecured personal loans and credit cards. While overall origination amounts dipped, fintechs experienced a notable decrease, signaling potential challenges in funding availability and economic uncertainties. Despite this, the total origination volume for fintechs remains robust, underlining their continued significance in the market. Fintech market share versus traditional lenders Fintechs, known for their agility and digital prowess, witnessed fluctuations in market share, particularly in the unsecured personal loan segment. While digital loans continue to drive a significant portion of originations, there's a discernible shift in market dynamics, urging fintech lenders to explore diversification strategies, including expanding into credit card offerings. Fintech lending average loan balance trends Amidst changing economic landscapes, average loan balances for both unsecured personal loans and credit cards exhibited intriguing patterns. Fintech lenders, although maintaining a competitive edge in average balances, face the challenge of balancing risk and profitability, especially amidst rising delinquency levels. Fintech lending delinquency trends One of the most critical aspects highlighted in the report is the uptick in delinquency levels for unsecured personal loans and credit cards. While fintechs navigate through economic uncertainties, there's a growing imperative to enhance risk management strategies and focus on prime and above credit tiers to mitigate potential risks. Understanding the digital borrower As digital borrowing continues to gain prominence, it's essential for fintechs to grasp the nuances of the digital borrower. With millennials emerging as key players in the digital lending landscape, fintechs must tailor their offerings to cater to the unique preferences and behaviors of this demographic segment. Looking ahead to 2024 for fintech lenders As we look to the future, data-driven decision-making and strategic portfolio management are more important than ever for fintechs. With economic uncertainties still in the mix, fintechs must leverage data and analytics to fuel growth while safeguarding against potential risks. Experian's fintech trends report serves as a guiding beacon, equipping fintechs with the knowledge and strategies needed to navigate through uncertainties and unlock opportunities for sustainable growth. The report offers actionable insights, including the imperative to conduct periodic portfolio reviews, retool data analytics and models, and remodel lending criteria to stay ahead in the competitive landscape. Learn more about our fintech solutions and how we can work together to drive profitable growth for your company. Learn more Download the report About the report: Experian's Fintech Trends Report 2024 offers a comprehensive analysis of credit trends, leveraging data from January 2019 to November 2023. The report provides valuable insights into the evolving landscape of unsecured personal loans and credit cards, empowering fintechs with actionable intelligence to thrive in a competitive market environment.

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

Trust is the primary factor in any business building a long-lasting relationship, especially when a company operates globally and wants to build a loyal customer base. With the rapid acceleration of digital shopping and transactions comes a growing fraud landscape. And, given the continual increase of people wanting to transact online, marketplace companies – from ecommerce apps, ridesharing, to rental companies – need to have ideal strategies in place to protect themselves and their customers from fraudulent activities. Without ideal risk mitigation or comprehensive fraud and identity proofing strategies, marketplaces may find themselves facing the following: Card-not-present (CNP) Fraud: As online shopping increases, customers can’t provide a credit card directly to the merchant. That’s why fraudsters can use stolen credit card information to make unauthorized transactions. And in most cases, card owners are unaware of being compromised. Without an integrated view of risk, existing credit card authentication services used in isolation can result in high false positives, friction and a lack of card issuer support. Unverified Consumer Members, Vendors, Hosts & Drivers: From digital marketplace merchants like Etsy and Amazon, to peer-to-peer sharing economies like AirBnB, Uber and Lyft, the marketplace ecosystem is prone to bad actors who use false ID techniques to exploit both the platform and consumers for monetary gain. Additionally, card transaction touchpoints across the customer lifecycle increases risks of credit card authentication. This can be at account opening, account management when changes to existing account information is necessary, or at checkout. Buy Now, Pay Later (BNPL) Muling: While a convenient way for consumers to plan for their purchases, experts warn that without cautionary and security measures, BNPL can be a target for digital fraud. Fraudsters may use their own or fabricated identities or leverage account takeover to gain access to a legitimate user’s account and payment information to make purchases with no intent to repay. This leaves the BNPL provider at the risk of unrecoverable monetary losses that can impact the business’ risk tolerance. Forged Listings & Fake Accounts: Unauthorized vendors that create a fake account using falsified identities, stolen credit cards and publish fake listings and product reviews are another threat faced by ecommerce marketplaces. These types of fraud can happen without the vast data sources necessary to assess the risk of a customer and authenticate credit cards among other fraud and identity verification solutions. By not focusing on establishing trust, fraud mitigation management solutions and identity proofing strategies, businesses can often find themselves with serious monetary, reputational, and security qualms. Interested in learning more? Download Experian’s Building Trust in Digital Marketplaces e-book and discover the strategies digital marketplaces, like the gig economy and peer-to-peer markets, can take to keep their users safe, and protected from fraudulent activity. For additional information on how Experian is helping businesses mitigate fraud, explore our comprehensive suite of identity and fraud solutions. Download e-book

The unsecured personal loan, one of the most popular products in the financial space, has seen ebbs and flows over the last several years due to many factors, including economic volatility, the global pandemic, changing consumer behaviors and expectations, and more. Experian data scientists and analysts took a deep dive into data between 2018 and 2022 to uncover and analyze trends in this important industry segment. Additionally, they recommend fintech lending solutions to help fintechs stay ahead of ever-changing market conditions and discover new opportunities. This analysis shows that digital loans accounted for 45 percent of the market in 2022. While this is down from 52% in 2021, digital loan market share continues to grow. The analysis also provides a detailed look into who the digital borrower is and how they compare to traditional borrowers. As we look to the rest of 2023 and beyond, fintechs must be armed with the best digital lending technology, tools, and data to fuel profitable growth while mitigating as much risk as possible. Download our fintech trends report for a full analysis on origination volume trends, delinquency trends, and consumer behavior insights. Download now

BNPL is a misunderstood form of credit. In fact, many consumers are unaware that it is credit at all and view it simply as a mode of payment. This guide debunks common BNPL myths to explain what BNPL data will mean for lenders and consumers. In the past year, Experian collected more than 130 million buy now, pay later (BNPL) records from four major BNPL fintech lenders and conducted the most comprehensive analysis of BNPL data available today. The results provided valuable insights on: Who are the consumers using BNPL loans? What is the nature of their current mainstream credit relationships? What do their current BNPL behaviors look like? BNPL myth-busting: Who’s using it, how much are they spending and how risky are BNPL loans? Since BNPL launched in the United States in the 2010s, BNPL has exploded into the consciousness of online shoppers, especially during the COVID-19 pandemic.  According to Forrester, Millennials are the biggest adopters of BNPL at 18%, followed by their younger counterparts in Gen Z at 11%.1 But looking at statistics like these without additional analysis could be problematic.  The dramatic growth of leading BNPL fintechs such as Klarna, Affirm and Afterpay has demonstrated how strongly these services resonate with consumers and retailers. The growth of BNPL has attracted the attention of established lenders interested in capitalizing on the popularity of these services (while also looking to minimize its impact on their existing services, such as credit cards or personal loans). Meanwhile, the Consumer Financial Protection Bureau (CFPB) has urged caution about potential risks, calling for more consistent consumer protections market-wide and transparency into consumer debt accumulation and overextension across lenders. The underlying assumptions debated are that BNPL is used: Predominantly by young people with limited incomes and credit history To pay for frequent, low-value purchases using a cheap and readily available source of credit As a result, it is often seen as a riskier form of lending. But are these assumptions correct? Using data from more than 130 million BNPL transactions from four leading BNPL fintech lenders, we’ve obtained a more detailed and comprehensive understanding of BNPL users and their defining features. Our findings look somewhat different to the popular stereotypes. Myth 1: BNPL is used only for low-value purchases According to our analysis, most BNPL purchases, 95 percent are for items costing $300 or less.2 Some of it is low-value, but not all. In fact, we found that the average purchase using BNPL was similar to that of a credit card, at $132.Average transaction sizes have increased 10 percent year-over-year, and we now see BNPL purchases for goods costing well over $1,000. We also see that consumers take out an average of 5 BNPL loans in a year and 23 percent of them have loans with more than one BNPL provider at a time. Myth 2: BNPL is simply an easier payment method Consumers see BNPL as a simple, quick and convenient way to pay. But, as shoppers receive goods for which payment is deferred, it’s also a form of credit. However, unlike short-term high-interest loans, BNPL credit comes at zero cost to the borrower, with some, but not all BNPL fintech providers charging late payment fees – fueling many borrowers’ sense that it’s an easy way to pay, rather than a loan. Myth 3: Only Gen Z shoppers aged 25 and below are using BNPL Younger shoppers are slightly more represented in the data transactions, but our analysis shows consumers of all ages use BNPL. BNPL is going mainstream, and its appeal is widening. The average age of BNPL consumers is 36 years old, with an average credit history of 9 years.2 The ease of use of these services at the checkout means they have a broad appeal. Over half of U.S. adults have reported using a BNPL service at least once. Despite Millennials and Gen Z having used BNPL financing the most, Gen Xers are not too far behind in usage, with 52% having used it.2 We anticipate that in the use of BNPL will continue to grow as more customers become more familiar with the benefits, and the diversification of products continues. Understanding the opportunities this growth presents to both consumers and lenders is critical to protecting their interests. And helping to facilitate access to credit, enabling responsible spending, while also limiting risks and providing services that consumers can afford is also critical. Download the full guide for additional myths we’re exposing We will take a deep dive into what our early data analysis suggests about the market and the BNPL myths our analysis is exposing. Additionally, we will examine: Why BNPL data matters to providers and lenders How BNPL data can improve visibility of consumers’ creditworthiness Ways in which transparency of BNPL data could benefit consumers 1The Buy Now, Pay Later (BNPL) Opportunity,” Forrester Report, April 29, 2022.2Experian data and analytics derived from 130M+ BNPL transactions

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

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

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

Experian’s in-person Vision conference returns next Monday, April 11 in Los Angeles, Calif. The event is known for premier thought leadership, net-new insights and the latest and greatest in technology, innovation and data science. This year’s agenda promises to have intentional discussions around tomorrow’s trending topics including financial inclusion, buy now pay later, open banking, the future of fraud, alternative data strategies, and much more. A few spotlight sessions include: Top trends including the future application of the cloud and emerging technologies, emerging regulatory legislation and the broader implications and opportunities of DeFi. A deep dive into strategies around the targeting/marketing revolution and how to deliver in the post-COVID-19 market environments and bolster financial inclusion decisions. An introduction to Experian’s Buy Now Pay Later BureauTM, the industry’s first and only solution designed to address the needs of consumers, BNPL providers, financial institutions and regulators alike. A roundup of sessions addressing innovation in action spanning from real-time verifications, to data-driven automation, and unified platforms from data to deployment to decisioning. Several sessions highlighting future-looking strategies and solutions that leverage alternative data that can increase conversion rates while concurrently reducing risk. Multiple sessions centered on the rapidly changing identity environment and combatting emerging fraud threats. The event will also include a Tech Showcase, where attendees can get a taste of tomorrow today with more than 20 demos and the latest innovations at their fingertips. And, as always, the event features marquee keynote speakers sure to inspire. This year’s featured speakers are Dr. Mohamed A. El-Erian, President of Queens’ College, Cambridge, Chief Economic Advisor at Allianz, and Former CEO and Co-Chief Investment Officer of PIMCO; Allyson Felix, Olympic Gold Medalist, co-founder of Saysh, a footwear and lifestyle brand for women, and Right to Play and Play Works ambassador; and the closing keynote will feature actor, investor, entrepreneur and philanthropist, Ashton Kutcher. Stay tuned for additional highlights and insights on our social media platforms throughout the course of the conference. Follow Experian Insights on Twitter and LinkedIn.  

At Experian, we know that financial institutions, fintechs and lenders across the entire spectrum – small, medium and large, are further exploring and adopting AI-powered solutions to unlock growth and improve operational efficiencies. With increasing competition and a dynamic economy, AI-driven strategies across the entire customer lifecycle are no longer a nice to have, they are a must. Our dedication to delivering on this need for our clients is why we are thrilled to be recognized as a Fintech Breakthrough Award winner for the fifth consecutive year. Experian’s Ascend Intelligence ServicesTM (AIS) platform hosts a suite of analytics solutions and has been named “Best Consumer Lending Product” in the sixth annual FinTech Breakthrough Awards. This awards program is conducted by FinTech Breakthrough, an independent market intelligence organization that recognizes the top companies, technologies and products in the global fintech market today. This is the second consecutive year that AIS has been recognized with a FinTech Breakthrough Award, previously being selected for the “Consumer Lending Innovation Award” in 2021. “Winning another award from FinTech Breakthrough is a fantastic validation of the success and momentum of our Ascend Intelligence Services suite. Now more than ever, the world is in a state of constant change and companies are being reactive, with data scientists spending too much time on manual, repetitive data-wrangling tasks, at a time when they cannot afford to do so,” said Shri Santhanam, Experian’s executive vice president and general manager of Global Analytics and AI. “Companies need to be able to rapidly develop and deploy ML-powered models in an agile way at low cost. We are now able to offer this to more lenders no matter their size.” With AIS, Experian can empower financial services firms to make the best decisions across the customer life cycle with rapid model and strategy build, seamless deployment, optimization and continuous monitoring. The AIS suite is comprised of two key solution models: Ascend Intelligence Services Acquire is a managed services offering that enables financial institutions to increase approval rates and control bad debt by acquiring the right customers and providing the best offers. This is accomplished through a rapid AI/ML model build that will help better quantify the risk of an individual applicant. Next, a mathematically optimized decision strategy is designed to provide a more granular view of the applicant and help make the best decision possible based on the institution’s specific business goals and constraints. The combination of the AI/ML model and optimized decision strategy provides increased predictive power that mitigates risk and allows more automated decisions to be made. The model and strategy are seamlessly deployed to help deliver business value quickly. Ascend Intelligence Services™ Limit enables financial institutions to make the right credit limit decisions at account origination and during account management. Limit uses Experian’s data, predictive risk and balance models and our powerful optimization engine to design the right credit limit strategy that maximizes product usage, while keeping losses low. To learn more about how Ascend Intelligence Services can support your business, please explore our solutions page. Learn more For a list of all award winners selected for the 2022 FinTech Breakthrough Awards, click here.

Experian was recently named a global fintech leader in the Center for Financial Professionals (CeFPro) Fintech Leaders 2022 report, ranking among the report’s top companies within the Credit Risk and Fraud Prevention categories, and in the top 15 Overall Ecosystem Rankings, rising five places from 2021. This award comes at a time where fraud and identity management services are of utmost importance given the rise of digital channels and activity; and as risk management strategies continue to be a priority – especially in times of economic volatility. “This recognition as a fintech leader by industry peers is a testament to how Experian partners with businesses and consumers to enable fintechs with innovative solutions and insights to mitigate credit risk and make better decisions,” said Jon Bailey, Vice President of Fintech at Experian. “Despite times of rapid change, Experian has been and remains committed to focusing on helping our clients with a wide range of challenges by providing valuable solutions. It’s great to see our continued efforts and investments driving positive impact. We will continue to invest and innovate to enable our clients for growth and create opportunities to support their customer-first missions.” Over the past year, Experian has placed bets on helping open-up credit to underserved communities, adapting to changing consumer expectations, addressing the growing threat from fraud, and becoming a more agile technology provider in an ever-changing market while helping clients mitigate credit risk. To learn more about Experian’s solutions that power fintechs, visit our fintech solutions page here. Click here for the full press release and to read more about the award.

Shri Santhanam, Executive Vice President and General Manager of Global Analytics and Artificial Intelligence (AI) was recently featured on Lendit’s ‘Fintech One-on-One’ podcast. Shri and podcast creator, Peter Renton, discussed advanced analytics and AI’s role in lending and how Experian is helping lenders during what he calls the ‘digital lending revolution.’ Digital lending revolution “Over the last decade and a half, the notion of digital tools, decisioning, analytics and underwriting has come into play. The COVID-19 pandemic has dramatically accelerated that, and we’re seeing three big trends shake up the financial services industry,” said Shri. A shift in consumer expectations More than ever before, there is a deep focus on the customer experience. Five or six years ago, consumers and businesses were more accepting of waiting several days, sometimes even weeks, for loan approvals and decisions. However, the expectation has dramatically changed. In today’s digital world, consumers expect lending institutions to make quick approvals and real-time decisions. Fintechs being quick to act Fintech lenders have been disrupting the traditional financial services space in ways that positively impacts consumers. They’ve made it easier for borrowers to access credit – particularly those who have been traditional excluded or denied – and are quick to identify, develop and distribute market solutions. An increased adoption of machine learning, advanced analytics and AI Fintechs and financial institutions of all sizes are further exploring using AI-powered solutions to unlock growth and improve operational efficiencies. AI-driven strategies, which were once a ‘nice-to-have,’ have become a necessity. To help organizations reduce the resources and costs associated with building in-house models, Experian has launched Ascend Intelligence Services™, an analytics solution delivered on a modern tech AI platform. Ascend Intelligence Services helps streamline model builds and increases decision automation and approval rates. The future of lending: will all lending be done via AI, and what will it take to get there? According to Shri, lending in AI is inevitable. The biggest challenge the lending industry may face is trust in advanced analytics and AI decisioning to ensure lending is fair and transparent. Can AI-based lending help solve for biases in credit decisioning? We believe so, with the right frameworks and rules in place. Want to learn more? Explore our fintech solutions or click below. Listen to Podcast Learn more about Ascend Intelligence Services

Experian recently announced that it has made the IDC 2021 Fintech Rankings Top 100, highlighting the best global providers of financial technology. Experian is ranked number 11, rising 33 places from its 2020 ranking. IDC also refers to Experian as a ‘rising star.’ The robust data assets of Experian, combined with best-in-class modeling, decisioning and technology are powering new and innovative solutions. Experian has invested heavily in new technologies and infrastructures to deliver the freshest insights at the right time, to make the best decision. For example, Experian's Ascend Intelligence Services™ provides data, analytics, strategy, and performance monitoring, delivered on a modern-tech AI platform. With the investment in Ascend Intelligence Services, Experian has been able to streamline the delivery speed of analytical solutions to clients, improve decision automation rates and increase approval rates, in some cases by double digits. “Recognition in the top 20 of IDC FinTech Rankings demonstrates Experian’s commitment to the success of its financial clients,” said Marc DeCastro, research director at IDC Financial Insights. “We congratulate Experian for being ranked 11th in the 2021 IDC FinTech Rankings Top 100 list.” View the IDC Fintech Rankings list in its entirety here. Focus on Data, Advanced Analytics and Decisioning Creates Winning Strategy for Experian Experian’s focus on data, advanced analytics and decisioning has continued to gain recognition from various notable programs that acknowledge Fintech industry leaders and breakthrough technologies worldwide. Beyond the IDC Fintech Rankings Top 100, Experian won honors from the 2021 FinTech Breakthrough Awards, the 2021 CIO 100 Awards and was most recently shortlisted in the CeFPro Global Fintech Leaders List for 2022 in the categories of advanced analytics, anti-fraud, credit risk and core banking/back-end system technologies. “At Experian, we are committed to supporting the Fintech community. It’s great to see our continued efforts and investments driving positive impacts for our clients and their consumers. We will continue to invest and innovate to help our clients solve problems, create opportunities and support their customer-first missions,” said Jon Bailey, Vice President for Fintech at Experian. Learn more about how Experian can help advance your business goals with our Fintech Solutions and Ascend Intelligence Services. Explore fintech solutions Learn more about AIS