It’s no big news that today’s consumers are savvier than ever. They expect online interactions — and they better be seamless, or you risk losing the business. But with increasing digitization comes an increased risk of fraud. To see smarter revenue and provide better experiences across the customer journey, you must verify that who you’re engaging with is a) a real person and b) who they say they are — without causing extra friction in the process. With portfolio growth in the balance, how do you ensure you’re not opening your business up to risk while still providing great customer experiences?
Successful prospecting starts with more confidence
Did you know it’s possible to expand your acquisition audience by up to 20% without changing your risk profile?¹ This means increasing your acceptance rates to say ‘yes’ to more applicants while making better, more confident decisions.
Nearly 20% of subprime consumers are financially stable and could be great acquisition targets, even in uncertain economic environments.¹ And consumers want new offers, too. New credit inquiries rose significantly in Q1 2021 over Q1 2020.¹ Layering in economic insights can also help you reach consumers that are most likely to be interested in your products and services. Effectively segment and target consumers using a more accurate and complete picture of total income, total discretionary spending, credit capacity, and usage, combined with all of the key demographic, behavioral, and lifestyle attributes. Leveraging economic insights to fuel an invitation-to-apply (ITA) campaign resulted in more than a 15% lift in response rates.¹
Long story short: Yes, acquisition is an expensive initiative for any company. However, it can be equally as profitable. Opening up and saying 'yes' more often can provide a gold mine of additional quality customers.
But doing this requires a deeper understanding of customer risk
Reviewing a prospect’s credit report is the obvious place to start. But finding even better customers can be achieved by layering in financial insights — verified income and employment data, debt-to-income data, consumer-permissioned data, telecom and utilities data, etc. Having access to this expanded, cloud-based information and incorporating near-real-time and historic (up to 24 months) insights can give you dynamic visibility into payment behaviors. In fact, including alternative data like bank transaction data can help you approve around 5-7% more applications, without impacting risk.¹ And, when adding telecom and utilities data into the mix, nearly four million more consumers can move to prime or super-prime classifications.¹
Think: if you can look beyond just someone’s credit report to truly understand their ability to pay — well, that’s where more confident risk assessments and decisions happen.
So, what about the customer experience?
Digital credit applications are increasing for a range of credit types² — traditional cards, loans, mortgages, and even buy-now-pay-later loans. The amount of friction in your application process can make or break your success — and abandonment rates. Some banks are seeing as high as 70% in digital transaction abandonment.¹ Improving your customer experience, decreasing the number of abandoned applications, and reducing fraud can be solved by incorporating the right data, analytics, and technology into your credit decisioning processes. For example:
Auto-filling required form fields with verified data minimizes manual data entry and smooths the process.
Automating applications reduces paperwork, process time, and empowers instant decisions.
Confirming identities in real-time using mobile capture and facial match features (built on biometric technologies) reduces fraud without disrupting the experience.
Simply put: streamlined processes are a necessity in today’s credit landscape. The more you reduce friction, shorten timeframes, and keep good customers coming, the better.
Only Equifax can help you turn challenges into advantages
We know that saying yes to more applicants may seem daunting and overwhelming, but it doesn’t have to be. Incorporating alternative data, cloud-based solutions, and predictive analytics that only Equifax can provide can give you the visibility you need to grow your business and keep risk in check — across the customer journey. To learn more, visit equifax.com/only-equifax.
1 Based on assessments from Equifax Data & Analytics team, 2021
2 U.S. Department of Commerce