Insight Recap: Top 9 Takeaways from the First Half of 2025

Highlights: 

• Fraud prevention, alternative data, and Gen Z financial behaviors were prominent themes in H1 2025, emphasizing the need for robust strategies and data utilization.

• To counter evolving digital fraud and expand lending opportunities, businesses should implement integrated solutions that leverage AI, alternative data, and thorough customer journey analysis.

• Key takeaways also include adopting updated income models for accuracy, effectively managing credit freezes to maintain customer satisfaction, and strategically using alternative data for deeper consumer insights and competitive pricing.

Fraud prevention, alternative data, and navigating Gen Z's financial behaviors were all hot topics in the first half of 2025. If you missed any of our blogs on these subjects and more, we've compiled a list of the top 9 insights from our blogs published in the first six months of the year to help you catch up.

1. The increasing shift to digital banking has fueled a growing fraud problem that many banks feel unprepared to handle, underscoring the urgent need for enhanced fraud prevention strategies.

In recent years, there has been a significant increase in fraud within the banking industry, driven by the widespread adoption of digital account opening and transactions. A survey by Equifax and the Consumer Bankers Association found that identity theft, account takeover, and synthetic identity fraud are major concerns, with synthetic identity fraud alone increasing by 50% between 2020 and 2023. Despite these escalating threats, many banks lack confidence in their current fraud prevention capabilities, with only 36% feeling somewhat confident in their existing solutions. This underscores an urgent need for financial institutions to enhance their fraud prevention strategies, including implementing advanced identity verification processes and leveraging data solutions to combat these evolving risks effectively. 

To learn more about the increase of fraud in banking and what banks should know about fighting it, check out “The Rising Tide of Fraud: A Challenge for Banks.”

2. To combat evolving digital fraud, businesses must adopt integrated, adaptable solutions leveraging artificial intelligence (AI), alternative data, and comprehensive customer journey analysis.

This blog highlights ten crucial strategies for businesses, especially lenders, to combat the escalating threat of digital fraud and optimize customer onboarding in 2025. Key insights include the necessity of adapting to generative AI-enabled fraud with advanced AI and machine learning, authenticating the person rather than just documents, and implementing integrated fraud checks throughout the entire customer journey. Organizations should look for thoughtful data orchestration, recognizing different fraud types (first-party, third-party, synthetic), and leveraging real-time data to detect sophisticated schemes like synthetic identity fraud. Ultimately, businesses must build adaptable systems to stay ahead of the constantly evolving fraud landscape. 

Ready to transform your fraud prevention strategy? Discover 10 critical insights.

3. Businesses must leverage data, including alternative data, for enhanced risk management and balanced growth in account opening to thrive in 2025’s fast-moving market.

The most recent Market Pulse survey highlights that businesses plan to prioritize proactive risk identification and enhanced risk modeling. 86% of respondents say they are balancing growth opportunities with careful risk management. There's a growing recognition of alternative data's value, with some using it to reduce risk and score new customers. The survey identifies opportunities to optimize account opening through enhanced risk management, data-driven account origination, and integrating alternative data to approve more loans, particularly for thin-file consumers. Effective data utilization is crucial for a resilient business and competitive edge. 

Gain key insights from our Market Pulse survey on optimizing account opening and origination with data.

4. Lenders could approve more Gen Z borrowers and reduce risk by using alternative data to assess creditworthiness.

Traditional credit decisioning models could overlook Gen Z borrowers, who may have thin or nonexistent credit files as they are just entering the credit world, despite their responsible financial habits. This blog highlights that integrating alternative data—such as utility and phone payments and specialty finance data—can provide a clearer picture of creditworthiness. By complementing traditional credit data with alternative data, lenders could approve more applicants, increase their customer base, and reduce risk. This approach helps lenders remain competitive and build relationships with a significant emerging market, ensuring more young people gain access to necessary credit. 

Optimize your lending strategy: See how a fuller financial picture of Gen Z could drive growth.

5. An updated income model could be the key to improve accuracy, reduce verification needs, and drive better business decisions.

Dated income models can lead to inaccurate estimates, resulting in fewer new customers, higher verification costs, and increased losses. Consumer IncomeView+ offers a solution by providing an updated, re-engineered income model. This refreshed model seamlessly integrates updates, leverages newer inputs with advanced analytics like AI and machine learning, and expands the range of income estimates. Implementing this updated model can save expenses, expand customer relationships, and ultimately drive growth for businesses relying on income estimates for various applications, from acquisition to collections.

Looking to make more confident income-related decisions? Explore the advantages of a refreshed income model.

6. To remain competitive and expand access to credit, businesses must use alternative data for smarter lending decisions.

In today's lending environment, traditional credit data may not provide a complete financial picture, especially for the over 70 million adults in the United States with little to no credit history. Alternative data, like utility payments, is becoming essential for businesses to gain a competitive edge. By leveraging this data, companies can approve more loans, reduce risk, and improve customer experience. Ignoring alternative data means missing profitable opportunities and falling behind competitors who are already using these insights for smarter decisions. Get a 360-degree customer view, leading to sustainable growth and more responsible lending in an uncertain economy.

Don't get left behind: Learn how leveraging alternative data could help your business approve more loans and gain a competitive edge.

7. Effectively managing credit freezes is crucial to maintain customer satisfaction and avoid lost revenue in lending.

Credit freezes and locks, while beneficial for consumer security, pose significant challenges for businesses relying on credit reports for loan applications and account verification. These measures disrupt credit decisioning processes, leading to lost revenue, increased operational costs, and reduced customer satisfaction as consumers abandon applications due to friction. The impact spans a range of industries, including financial services, utilities, and automotive. 

Discover how to minimize friction caused by credit freezes and enhance your customer's lending experience.

8. To thrive in lending, businesses must strategically use alternative data for deeper consumer insights, expanding approvals and competitive pricing.

In today's competitive lending landscape, businesses must look to augment traditional credit data to drive growth and mitigate risk. Alternative data sources are crucial for identifying creditworthy applicants who might otherwise be overlooked, such as those with thin credit files. By strategically incorporating alternative data throughout the lending lifecycle with products like OneScore from Equifax, lenders can gain deeper consumer insights. This allows for more precise risk assessment, enabling businesses to safely approve more loans and optimize risk-based pricing strategies. 

Don't miss out on hidden lending opportunities. Read our blog to understand how alternative data empowers better credit assessments.

10. Gen Z's growing credit presence and evolving financial behaviors necessitate tailored business strategies for profitable engagement and growth.

Gen Z's presence in the credit system has surged over 76% in the last four years, now outpacing older generations in credit file presence and new credit card openings. Despite a limited history, their high credit engagement and appetite for new financial products present both challenges and opportunities for businesses. Economic pressures, student debt, and high housing costs could affect Gen Zers’ financial decisions. Businesses must tailor marketing and strategies to this tech-savvy demographic, understanding their unique banking behaviors and payment hierarchies to foster profitable engagement.

Unlock key insights into Gen Z's credit engagement and learn how to adapt your strategies for future growth.