Unleash the power of Equifax alternative data and AI-powered risk decisioning from Provenir

As a financial services provider, you’re likely feeling the pressure in today’s dicey economy. Total US consumer debt is soaring, recently hitting a new all-time high of more than $17 trillion. Write-offs for non-mortgage consumer debt (auto loans/leases, credit cards, and student loans) are up 32.7 percent. Severe delinquency rates are rising across all major lending categories.¹  

In this risky market, everything you do matters. Every nugget of consumer data you use to identify creditworthiness. Every second that slows down the credit decisioning process. Every time you provide “ho-hum” customer experiences instead of “yes” moments. 

In this article, you’ll discover why integrating alternative data into your existing decisioning technology solutions can help boost access to credit for your consumers.  

A “point-and-click easy” approach; no data scientist needed. 

Your decisioning models run on data. Yet, traditional credit data alone limits the power of these models. More than 76 million consumers lack traditional credit. Since these consumers have little to no credit history, oftentimes a credit score cannot be produced. This leads to financial service providers unable to predict these consumers' future payment performance.

This is where alternative data from Equifax can help. Our data supports decision-making strategies by providing financial insights from outside the traditional credit file. This includes payment data for utilities, cable, and cell phones, which aren’t typically reported to the credit bureaus. It also includes short-term loan data (sometimes called payday loans), and insights about income, assets, and more. This data can be highly predictive of future account performance. It spans nearly 100 percent of the American population. Think about it. Almost everybody has utilities and a cell phone.  

But wait for it…here’s the innovation piece. 

Third-party data integrations can sometimes be out of reach for financial services institutions, whether they are smaller and mid-sized firms with limited data expertise, or larger organizations with siloed data access. So, they stick with decisioning models built on standard credit data and unwittingly miss potentially creditworthy consumers who could be scored using alternative data. 

However, due to our partnership with Provenir we are simplifying everything. Financial service providers will now be able to easily incorporate differentiated alternative insights into Provenir’s powerful decisioning technology solutions. 

Our alternative data is now available as a pre-formatted, ready-to-use data asset within the Provenir platform. It is “point-and-click easy,” with:

• No data storage resources required 

• No long waits for data delivery

• No downtime for data handling

• No need for data scientists

Using a single API to connect to Provenir’s ecosystem of industry leading data partners means all the data you need is in one single place. Our data can be automatically integrated into your decisioning workflows, via Provenir’s low-code, drag-and-drop studio, available to use across multiple decisioning processes, and optimized by Provenir’s embedded decision intelligence.

Not only can you stay ahead of risk, but you also gain the flexibility to iterate, expand, and scale as needed. This is due to our data being quickly dialed up or dialed down based on fast-changing market conditions, consumer behaviors, and business needs. 

Now let’s put this data into action to explore what this can mean for your financial business.

1.  Promote greater financial inclusion. 

More than 61 million consumers have thin credit files And, 16 million consumers are “credit invisible,” meaning they don’t use credit. Put another way, nearly one in three Americans fall into a credit invisible audience. Meaning, a large amount of consumers have thin credit files or do not use credit. 

Knowing this, financial providers are embracing the idea of greater financial inclusion in their go-forward strategies. It’s a customer-first approach that makes financial services more widely attainable for those who might need them most. When properly executed, it can help grow your business without increasing risk levels. 

Our alternative data is a powerful source of decisioning insight for this purpose. Research shows that integrating our alternative data into your decisioning strategy can help you:

• Score up to 32 percent of previously unscorable consumers

• Score up 21 percent more applicants overall

• Approve up to 15 percent more consumers

It also supports improved decisioning strategies across other audiences. 

• For those with healthy credit, alternative data can help widen your view of the consumer. Alternative data provides more complete views of their financial behaviors, lifestyle, and trajectory. After all, what financial provider doesn’t want to know more about their best customers? 

• For those with sub-prime credit who (according to standard credit risk models) fall “below the cutoff line” and would normally be denied credit, alternative data can provide insight into their transactions and financial behaviors outside the traditional credit file.This helps you better differentiate between risk and opportunity. 

Instead of outdated, “linear” decisions based on a credit score, you gain the predictive power to make more precise, streamlined decisions about creditworthiness and unlock a new world of financial possibilities for a far wider population of consumers. Likewise, having the ability to score and decision millions of underserved consumers can help expand your customer portfolio and bottom line while keeping risk steady. 

2. Get to market faster with a more efficient process. 

Financial providers are often hobbled by siloed data, which can lead to big problems. For example, disparate data streams can create insight gaps and incomplete customer views that hide opportunities and risks. Meanwhile, separately managing and storing data requires extra time and money. And, acquiring new data sources adds even more time and money to the equation.   

Working within a single decisioning solution like Provenir solves this issue. 

Your existing data plus new third-party data is quickly and seamlessly integrated into holistic customer views and intelligently orchestrated within Provenir’s AI-powered decisioning processes. This removes data handling complexities, which helps speed up the analytic development process so you can get new decisioning models and model adjustments to market faster. Think days and weeks, not months. 

Further, having the ability to customize and adjust your mix of decisioning data in real-time with our alternative data sources can further optimize your decisioning models by facilitating: 

• More agile decisioning strategies that align with nuanced consumer behaviors and fast-moving market conditions.

• Proactive portfolio management that exposes unknowns and hidden risks so you can take action to protect your customers and your bottom line. 

Improved decisioning speed, agility, and efficiency create big advantages for your financial services business, culminating in the ultimate benefit: a faster track to revenue.

3. Offer better customer experiences.

The “customer experience” isn’t one thing: it’s everything. It’s all the individual transactions and moments throughout their journey with your financial business. That’s why it’s essential to incorporate the right predictive data that’s unified into a single customer view. And by “right data,” we mean relevant, predictive data that helps you better understand your customers, their wants and needs, and how you can help them achieve their financial best.  

By continually augmenting and updating standard credit-based decisioning strategies with alternative data, you can better understand where your customers are and where they’re headed.

• Offer more personalized customer experiences that meet them wherever they are in terms of creditworthiness and affordability. Instead of automatically denying a recent college graduate with zero credit a premium bank card, you can confidently offer him a card but with a low credit limit. You can do this because you know he pays his “everyday bills” on time every month. That’s the power of alternative data. Over time, you can gradually increase his credit limit based on his expanding credit history and payment behaviors. 

On the flip side, you can proactively seek out and engage underserved consumers with prospecting models that use alternative data to identify low-risk groups. You can then target these segments with personalized offers that include relatable imagery, compelling content, and reassuring financial terms that grab their attention and motivate them to respond. Your business will stand out as a trusted provider among underserved audiences, and you’ll win new business that you can securely nurture and grow over time. 

• Deepen existing relationships and maximize customer lifetime values. This involves personalizing your cross-selling and upselling strategies with “next best step” suggestions and recommendations. For example, try analyzing your portfolio and segmenting your customers based on key characteristics such as upticks in income, long-term payment consistency, asset growth, and more. Then engage these customers with premium or bundled offers for expanded products and services. They get a good deal, while you get a grateful customer whose financial profile is improving in lockstep with your bottom line.    

You choose the amount and type of Equifax alternative data you need, and it effortlessly flows into your Provenir decisioning solution that’s built on next-gen AI technology and data orchestration for decisioning optimization. Put simply, it’s a fast track to saying “yes” more often to more consumers.      

Looking ahead, it’s difficult to know which direction the economy will move. As of today, it’s never been more unpredictable. But as a financial service provider, you can count on one thing. Having simplified, one-click access to Equifax alternative data within Provenir’s risk decisioning platform will give you a competitive edge to focus on forward. One that enables you to put more customers on the path to their best financial future. It gives you the decisioning speed and intelligence you need to pull ahead and lead your industry in today’s precarious, fast-moving marketplace. 
 

1 EFX_PortfolioCreditTrends_202402.pdf (equifax.com)

Americans Are Carrying Record Household Debt into 2024 (marketwatch.com)

Infographic: Expanding Access to Credit With Alternative Data (equifax.com)