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<ul><li><p>Everything you need to know about trended credit data</p><p>LendIt USA 2017 </p></li><li><p>LendIt USA 2017</p><p>About our speaker:</p><p>Paul DeSaulniers Sr. Director, Experian Email: Paul.Desaulniers@experian.com Phone: 714.830.7580</p><p>28/02/2017</p></li><li><p>LendIt USA 20174</p><p>1. Trended data 101 </p><p>2. How Trended Data helps lenders </p><p>3. Leverage the power of trended data </p><p>4. Best practices </p><p>5. Q&amp;A</p><p>Agenda</p><p>28/02/2017</p></li><li><p>LendIt USA 20175</p><p>Who is going to win?</p><p>28/02/2017</p><p>AB</p><p>Finish Line</p></li><li><p>LendIt USA 20176</p><p>What if I showed you an additional snap shot?</p><p>28/02/2017</p><p>B A</p></li><li><p>LendIt USA 20177</p><p>What if I showed you a second snap shot?</p><p>28/02/2017</p><p>B A</p></li><li><p>LendIt USA 20178</p><p>Or all three together?</p><p>28/02/2017</p><p>AB</p><p>Finish Line</p><p>B A</p><p>B A</p><p>Time O-2</p><p>Time O-1</p></li><li><p>LendIt USA 20179</p><p>Who would you bet on?</p><p>28/02/2017</p><p>Image source: www.sport-it.net</p></li><li><p>LendIt USA 201710</p><p>Market perspective on trended data</p><p>28/02/2017</p><p>An underutilized tool today due to technology barriers </p><p> Intuitively trended data sounds like a no-brainer (with value seen across the credit chain of acquisitions, origination and account management) but the limitations of technology have historically prevented its widespread use. Change after all requires people, process and technology; and trended data has historically been difficult to deploy with a lot of testing required and ultimately needs the customers to adjust their decisioning, acquisition, offering and other strategies.</p><p>Barclays Research October 6, 2016</p></li><li><p>LendIt USA 201711</p><p> Understand trended data beyond the buzz word </p><p> Learn what trended data can tell you across the Customer Life Cycle to improve your business</p><p> Most effective uses of trended data</p><p> How to use trended data to solve your most pressing business challenges</p><p>Objective</p><p>28/02/2017</p></li><li><p>LendIt USA 201712</p><p>Trended Data24 months of history on key data fields for every trade</p><p>28/02/2017</p><p>Trade #1 Balance Credit limitMinimum </p><p>payment dueAccount payment</p><p>Date of payment</p><p>Month 0 $13,300 $25,800 $275 $1,000 Aug</p><p>Month 1 $14,680 $25,800 $280 $1,000 July</p><p>Month 2 $16,060 $25,800 $286 $1,000 June</p><p>Month 3 $17,440 $25,800 $297 $1,000 May</p><p>Month 4 $18,820 $25,800 $310 $1,000 April</p><p>Month 5 $20,200 $25,800 $330 $1,000 March</p><p>Month 6 $21,580 $25,800 $343 $1,000 February</p><p>Month 7 $22,960 $25,800 $350 $1,000 January</p><p>Trade #1</p><p>Bank name Account #</p><p>Open date Credit limit Balance</p><p>Actual payment</p><p>Loan type</p><p>Account condition</p><p>Account status</p><p>Special comment</p><p>Months reporting</p><p>Minimum payment </p><p>due</p><p>Months since </p><p>update</p><p>Date of payment</p><p>Visa 4812 3/9/1990 $25,800 $13,300 $1,000 Credit card OPEN CURR ACCT CH 231 $275 1 Aug-13</p></li><li><p>LendIt USA 201713</p><p>A unique profile of a consumer</p><p>28/02/2017</p><p>FebruaryVantageScore 720Balance $22,000 Status Good standing</p><p>Month Balance Min Pay Due Actual PayJan $22,000 $550 $2,000 Dec $26,000 $650 $3,500 Nov $20,000 $500 $12,000 Oct $28,000 $700 $8,000 Sep $35,000 $875 $6,000 Aug $45,000 $1,125 $11,000 Jul $48,000 $1,200 $3,000 </p><p>Month Balance Min Pay Due Actual PayJan $22,000 $550 $550 Dec $19,000 $475 $475 Nov $16,000 $400 $400 Oct $15,000 $375 $400 Sep $11,500 $288 $320 Aug $9,000 $225 $300 Jul $6,500 $163 $200 </p><p>Consumer A Consumer BFebruary</p><p>VantageScore 720Balance $22,000 Status Good standing</p><p>Paying well over minimum payments Demonstrated ability to pay No payment stress</p><p>X Making minimum payments for the last three months X Payment amounts vs. minimum due is decreasing over time X Increasing payment stress</p><p>Trad</p><p>e D</p><p>ata</p><p>Tren</p><p>ded </p><p>Dat</p><p>a</p></li><li><p>LendIt USA 201714</p><p>Differentiating consumers through payment data</p><p>28/02/2017</p><p> Consumer A Consumer B Consumer C Average monthly balance $3,462 $3,435 $3,465 VantageScore 740 736 744</p><p>Monthly balanceand payments</p><p>Total annual payments $1,126 $22,390 $42,429 Average % of balance paid 2.6% 53.4% 100.0%</p><p>Who is the best prospective customer?</p><p> $- 0</p><p> $1,750 </p><p> $3,500 </p><p> $5,250 </p><p> $7,000 </p><p>Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec</p><p>Total Bankcard BalanceTotal Bankcard Payments</p><p>Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec Jan Feb Mar Apr May Jun Jul Aug Sep Oct NovDec</p><p>Historical payment data enables a much better understanding of how a consumer uses their bankcard accounts</p></li><li><p>LendIt USA 201715</p><p>Problem: </p><p>Solution: </p><p>Benefit: </p><p>How trended data helps lenders</p><p>28/02/2017</p><p>Knowing a consumers credit information at a single point in time only tells part of the story </p><p>To understand the whole story, lenders need the ability to assess a consumers credit behavior over time</p><p>Understanding how a consumer uses credit or pays back debt over time can help lenders: Offer the right products &amp; terms to increase response rates Determine up sell and cross sell opportunities Prevent attrition Identify profitable customers Avoid consumers with payment stress Limit loss exposure</p></li><li><p>LendIt USA 201716 28/02/2017</p></li><li><p>LendIt USA 201717</p><p>The challenge with trended data</p><p>28/02/2017</p><p>How do you find the payment pattern?</p></li><li><p>LendIt USA 201718</p><p>Data</p><p>28/02/2017</p><p>10 trades</p><p>24 months</p><p>1,200 DATA POINTS</p><p>1 consumer</p><p>5 historical </p><p>payment fields</p></li><li><p>LendIt USA 201719</p><p>and more data!</p><p>28/02/2017</p><p>10 trades</p><p>24 months</p><p>120,000,000 DATA POINTS</p><p>100,000 consumers</p><p>5 historical </p><p>payment fields</p></li><li><p>LendIt USA 201720</p><p>But there is a solution to help clients unlock the power of trended data..</p><p>28/02/2017</p><p>Credit Profile Point-in-time snapshot </p><p>of a consumers credit standing</p><p>Trended Data Dynamic story </p><p>of how a consumer is using credit over time</p><p>Credit3D Solutions that </p><p>unlock the power of the credit profile and trended data</p><p>3D</p></li><li><p>LendIt USA 201721</p><p>Trended Data Time Line</p><p>28/02/2017</p><p>1998 2000 2002 2004 2006 2008 2010 2012 2013 2014 2015 2016 2017</p><p>1998 Experian launches Credit Trends</p><p>2001 First batch </p><p>product TrendView </p><p>(73 attributes)</p><p>2002 Launch Trended </p><p>Raw Archive </p><p>data</p><p>2005 Custom </p><p>trended data models on Exp. data</p><p>2010 Experian launches: </p><p>Short term (108) </p><p>Credit Line Mgmt (56)</p><p>2012 Experian launches </p><p>TAPS (Total Annual </p><p>Plastic Spend)</p><p>2013 Payment Stress </p><p>(132) Balance transfer </p><p>(2)</p><p>2014-2015Experian extends trade table by 18 new fields and launches </p><p>EIRC (Estimated Interest Rate Calculator) </p><p>Experian is the first in the industry to provide trade level spend, yield and revenue data by industry in a non-consortium </p><p>environment</p><p>2016 Experian launches </p><p>Trended Data in on-line credit </p><p>reports</p></li><li><p>LendIt USA 201722</p><p>Trended Data/ Credit3D A comprehensive view of the consumer</p><p>28/02/2017</p><p>Payment behavior: MIN PAY 2%</p><p>Annual card spend: $7,500</p><p>6 month yield: $ 74</p><p>Average effective APR 16.99%</p><p>In the market? Personal Loan</p><p>BT Index (0-999) 875</p><p>BTs in last 12 months 2</p><p>Revolving trades: 4</p><p>Transacting trades: 0</p><p>Surfer, Transactor- Segment ID</p><p>Utilization increase in last 6 months: </p><p>+ 35%</p><p>Credit card balance last 6 months: </p><p>+ $8,000</p><p>BEHAVIOR</p><p>RISK REVENUE</p><p>RESPONSE</p><p>Credit3D leverages </p><p>behavioral insight to improve risk, tap into new credit segments, </p><p>improve response, profitability and develop market share strategies </p></li><li><p>LendIt USA 201723</p><p>Experian TAPS Annual credit card spend Estimated Interest Rate Calculator Interest rate and term information </p><p>for personal loan, student loan, auto, revolving bankcard, retail bankcard and mortgage </p><p>Extended Trade Trade-level profitability metrics Custom models Client initiated </p><p>Trend View Identify revolving / transacting </p><p>trades </p><p>Short-Term Attributes Capture balance / utilization </p><p>changes </p><p>Line Management Attributes Identity limit changes Payment Stress Attributes Aggregate payment data Custom attributes Client initiated </p><p>In the Market Models Propensity to open auto, personal </p><p>loan, student loan, mortgage, HELOC and bankcard </p><p>Balance Transfer Index Propensity to balance transfer Balance Transfer Surfer Overlay Propensity to be a rate surfer Custom scores Client initiated </p><p>Leverage the power of Trended Data</p><p>28/02/2017</p><p>Trended attributesProfitability modelsPropensity scores </p></li><li><p>LendIt USA 201724</p><p>Credit3D / Trended Data capabilities</p><p>28/02/2017</p><p>Who is likely to respond to an offer? Balance Transfer Index</p><p>In the Market Model</p><p>Likelihood to balance transfer in 6 months</p><p>Likelihood to open a trade in next 90 days</p><p>Is there a better way to understand risk or to conduct swap set analysis? </p><p>Payment Stress Attributes </p><p>Deleveraging Attributes </p><p>Level of consumer payments against balances</p><p>Change in total payment obligations over time</p><p>Short-Term Attributes Changes in revolving balance and utilization</p><p>How can I acquire profitable consumers? How do I increase wallet share and usage? </p><p>EIRC for Revolving</p><p>Experian TAPS</p><p>Yield in the last 6 months and effective APR</p><p>Credit card spend in last 12 months</p><p>How does a consumer use credit? How do I identify revolvers, transactors and consolidators? </p><p>Trend View Revolving / transacting trades / balance transfer activity /seasonality Trend View Segment ID</p><p>Business Challenge Solution What clients receive</p></li><li><p>LendIt USA 201725</p><p>Comprehensive Credit Marketing using Trended Data/Credit 3D</p><p>28/02/2017</p></li><li><p>LendIt USA 201726</p><p>Marketing strategy should be about more than just response rate. A comprehensive approach can ensure quality originations and healthy portfolio growth. Response Rate Risk Expansion Long-term Value</p><p>Three Pillars of Comprehensive Prescreen</p><p>28/02/2017</p></li><li><p>LendIt USA 201727</p><p>How do you reach receptive audiences to get the most out of your marketing campaigns? </p><p> Offer timing Offer relevance </p><p>Combine propensity models and offer relevance to get the right consumers the right offer at the right time. </p><p>Response Rate: Make an ImpactMost people dont need your product; are you effectively finding those that do?</p><p>28/02/2017</p></li><li><p>LendIt USA 201728</p><p>Risk Expansion: Not Your Average JoeRisk expansion without all the risk</p><p>28/02/2017</p><p>Current Profile Credit Score: 641 Utilization: 41% Revolving and Personal Trades: 4 Outstanding Balances: $13,000 Whats Joe Doing? Making more than the monthly payment to pay down revolving debt Seeking personal loan to consolidate remaining balance Wants one monthly payment at a lower interest rate than revolving </p><p>cards Wheres Joe Going? Prime risk score as a result of decreased utilization Building new borrowing relationships How do you spot the trend? Declining trended utilization indicating deleveraging Ability to pay indicated by estimated income</p><p>` Past Present Future</p><p>Score 618 641 703</p><p>Utilization 66% 41% 23%</p><p>Trades 6 4 4</p><p>Balances $21,000 $13,000 $6,000</p></li><li><p>LendIt USA 201729</p><p> Maximize response rates: Propensity tools arent enough. Layering credit attributes can further refine results and improve campaign performance. </p><p> Risk expansion: Expand risk score cutoffs without taking on incremental risk. Trended data helps identify trends in credit behavior. Find candidates in lower score ranges who are deleveraging and trending up. </p><p> Long-term value: Understanding how a consumer uses credit enables long-term loyalty building. Give your team the edge by identifying likely short-term and long-term borrowers. </p><p>Think comprehensive</p><p>28/02/2017</p></li><li><p>LendIt USA 201730</p><p>Questions</p><p>28/02/2017</p></li><li><p>LendIt USA 2017</p><p>Paul DeSaulniers Sr. Director, Experian Email: Paul.Desaulniers@experian.com Phone: 714.830.7580</p><p>28/02/2017</p></li></ul>