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Leveraging hosted decisioning for cross-sell marketing and segmentation opportunities
Alpa Jain Experian
Allison Saffran Experian
#vision2014
2 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
After today, you will…
All by harnessing the power of Experian’s data and processes
Know that increasing relationships with the customer increases profitability
Know how to more successfully cross-sell customers
Be increasingly knowledgeable about tools that will help you more effectively cross-sell to customers
Know how to reduce overall costs
3 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Agenda
Why cross-sell?
How we do it?
Segmenting consumers for growth
Simple as ordering off a menu
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Why cross-sell?
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$23,622
$26,755
$33,130 $30,757
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Bankcard Only Bankcard + 1 otherproduct
Bankcard + 2 otherproducts
Bankcard + 3 otherproducts
Average bankcard total annual plastic spend
6 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
0.32%
0.20%
0.03% 0.03%
738 738 746 737
300
400
500
600
700
800
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
Bankcard Only Bankcard + 1 otherproduct
Bankcard + 2 otherproducts
Bankcard + 3 otherproducts
Bad Rate (90+ DPD)
Vantage V3
Average bankcard bad rate (90+ DPD)
7 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
0%
5%
10%
15%
20%
25%
300-499Deep Subprime
500-600Subprime
601-660Nonprime
661-780Prime
781-850Super Prime
24.6%
1.9%
0.1% 0.0% 0.0%
15.3%
6.1%
4.5%
0.6% 0.0% 0.0% 0.0%
Bankcard Only
Bankcard + 1 other product
Bankcard + 2 other products
Bankcard + 3 other products
Bankcard bad rate by risk band
8 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
$1,699
$2,473 $2,984
$3,529
$8,683
$9,724
$10,743 $10,078
27%
31% 30%
38%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Bankcard Only Bankcard + 1 otherproduct
Bankcard + 2 otherproducts
Bankcard + 3 otherproducts
Balance Credit Limit Utilization
Average bankcard balance, credit limit and utilization
9 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
0%
20%
40%
60%
80%
100%
120%
300-499Deep Subprime
500-600Subprime
601-660Nonprime
661-780Prime
781-850Super Prime
100%
80%
64%
28%
6%
86% 91%
78%
43%
11%
Bankcard Only
Bankcard + 1 other product
Bankcard + 2 other products
Bankcard + 3 other products
Utilization by risk band
10 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
How we do it?
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Poll Question #1
Where do you have an opportunity
to connect with your customers?
a) In branch (branch representative
at account opening/teller)
b) ATM
c) Online (account opening or account online login)
d) Call center
e) All above
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Poll Question #2
Where do you actually connect
with your customers?
a) In branch (branch representative
at account opening/teller)
b) ATM
c) Online (account opening or account online login)
d) Call center
e) None of the above
f) All above
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Every interaction with the consumer is an opportunity for cross-sell
Underwrite Cross-sell Prequalify
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Present real-time tailored credit offers while your customers are engaged: Instant prescreen
Opportunity Current customer walks into a
branch to make a deposit
Action Teller uses name and address
from CRM to prescreen customer
Experian returns “Yes” response if
customer passes pre-defined
criteria
Inquiry type Soft
Result A pre-approved firm offer of credit
is made while the customer is in
the branch
“Congratulations!”
Since this is behind the scenes, the CSR only communicates a positive result
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Qualified?
Yes
No
“You qualify for a
credit card, would
you like to apply?”
No action required
This is accomplished in real-time: Typical instant prescreen flow
A “firm offer of credit” is required
Real-time inquiry (permissible purpose is not required)
Fin
ancia
l
Institu
tion
Account opened
Decisioning as a ServiceSM
Soft inquiry for Approvals
Attributes Risk / fraud score(s)
Instant prescreen decisions
Treatment
Risk score
Debt to income
Approve
Decline
Employment status
Approve
Decline
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Extend prequalified offers while your customers are engaged: Prequalification
Opportunity Customer visits your Website
Action Invite them to see their best-fit
credit options and obtain consent
to pull their credit profile
Experian returns best-fit credit
options
Inquiry type Soft
Result The customer is presented only
with relevant offers – credit and/or
non-credit
“See what you prequalify for!”
Removes the opportunity for the consumer to adverse select the wrong products
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Instantly approve customers for credit while they are engaged: Instant credit
Opportunity Consumer is engaged and ready
to apply for a loan
Action Consumer fills out application and
lender initiates call to Experian
Experian returns credit
underwriting decision and
credit report
Inquiry type Hard
Result The consumer is instantly
approved for a loan
“Apply now”
Receive an instant credit decision using your own custom underwriting criteria
18 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Segmenting consumers
for growth
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Poll Question #3
For which products do you see the most
opportunity for growth this fiscal year?
a) Bankcard
b) Auto loan
c) Mortgage
d) Personal installment loan
e) Home equity line of credit
f) Home equity loan
g) Student loan
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Poll Question #4
Are you currently using segmentation
tools to deliver the right offer to the
right consumer?
a) Yes
b) No
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Differentiating consumers through data
Spend, payment, and revolving APR data enable a much better understanding of how a consumer uses credit
Monthly
balance
and payments
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Total Bankcard Balance
Total Bankcard Payments
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Total Bankcard Balance
Total Bankcard Payments
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Total Bankcard Balance
Total Bankcard Payments
Consumer A Consumer C
Average monthly balance
VantageScore®
$3,462 $3,465
740 744
Consumer B
$3,435
736
What is the best product for the customer?
Total annual payments: $1,126 $42,429 $22,390
Average % of balance paid: 2.6% 100.0% 53.4%
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Segmentation
Does the consumer
own a home?
Does the consumer
use revolving credit?
Is the consumer’s debt
spread across multiple
credit card products?
Is the consumer high risk?
Is the consumer likely to
consolidate their debt?
Is the consumer paying a high
rate on their revolving lines?
Is the consumer likely to open
a new tradeline in the next
2–4 months?
Does the consumer
have high annual
spend on credit cards?
23 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Precise targeting
Identify consumers who have been revolving for many months for balance transfer offers
Target revolvers with consolidation / personal loans
Target transactors and “super transactors” with reward offers
Create campaign efficiency - suppress “card collectors” and “rate surfers”
Target revolvers who are homeowners with less than 43% DTI for home equity products to consolidate debt
Understanding behavior to satisfy consumer credit needs
… results should drive offer strategy improving
response, optimizing marketing expense and
enhancing the customer experience
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Simple as ordering
off a menu
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Propensity Models and Scores
VantageScore® 3.0
In the Market ModelsSM
Ability to Pay
Income InsightSM
Income Insight W-2SM
Trended Solutions
Trend ViewSM
EIRCSM
Risk Stability IndexSM
Experian TAPSSM (Total Annual Plastic Spend)
Analytics
Premier AttributesSM
Balance Transfer IndexSM
Extended ViewSM score
Asset InsightSM
Short Term AttributesSM
Payment Stress AttributesSM
Deleveraging AttributesSM
Property Valuation
Real strategies. Real opportunities. Real growth.
26 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Payment Behavior:
MIN PAY – 2% Annual Card
Spend:
$7,500
6 month yield:
$ 74
Avg. Effective APR
16.99%
In the market?
Bankcard
BT Index (0-999)
875 BTs in last 12
months
2
Revolving trades:
4
Transacting trades:
0
Risk Index rating:
Unstable
Utilization in last 6 months:
+ 35%
Credit card bals last 6 months:
+ $8,000
Viewing the customer as a unique individual An opportunity for enhanced segmentation
Behavior
Risk Revenue
Response
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Customer
profile
Female, age 40, dentist, married
with 2 kids and a dog
Credit
profile
VantageScore® 3.0 – 740 Bank ABC products – DDA and
mortgage
Products with other banks – two credit
cards, one retail card
Gross family income – $420,000
Total annual plastic spend – $103,000
Consumer behavior – transactor
Result (cross-sell
opportunity)
Rewards product with no preset
spending limit
Benefit to
customer
Rich rewards program, flexibility
to spend
Case study – meet Jenny, Bank ABC client
28 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Propensity Models and Scores
VantageScore® 3.0
In the Market ModelsSM
Ability to Pay
Income InsightSM
Income Insight W-2SM
Trended Solutions
Trend ViewSM
EIRCSM
Risk Stability IndexSM
Experian TAPSSM (Total Annual Plastic Spend)
Analytics
Premier AttributesSM
Balance Transfer IndexSM
Extended ViewSM score
Asset InsightSM
Short Term AttributesSM
Payment Stress AttributesSM
Deleveraging AttributesSM
Property Valuation
Real strategies. Real opportunities. Real growth.
29 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Customer profile
Male, age 32, lawyer, single
Credit
profile
VantageScore® 3.0 – 732 Bank ABC products – DDA and bankcard
Products with other banks – auto loan
(newly opened, 5.34%, $16,000,
60 months)
Gross income $90,000
Total annual plastic spend – $12,500
Consumer behavior – revolver
Result (cross-sell
opportunity)
Direct Auto loan, 3.75%,
60 months
Benefit to
customer
Lower rate translates to 4% savings
per month totaling $695 over the life
of the loan
Case study – meet Mark, Bank ABC client
30 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Propensity Models and Scores
VantageScore® 3.0
In the Market ModelsSM
Ability to Pay
Income InsightSM
Income Insight W-2SM
Trended Solutions
Trend ViewSM
EIRCSM
Risk Stability IndexSM
Experian TAPSSM (Total Annual Plastic Spend)
Analytics
Premier AttributesSM
Balance Transfer IndexSM
Extended ViewSM score
Asset InsightSM
Short Term AttributesSM
Payment Stress AttributesSM
Deleveraging AttributesSM
Property Valuation
Real strategies. Real opportunities. Real growth.
31 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Case study – meet Peter, Bank ABC client
Customer profile
Male, age 45, business owner,
married with two kids
Credit
profile
VantageScore® 3.0 – 744 Bank ABC products – DDA
Products with other banks – five credit
cards, three retail cards, mortgage
Customer income – $125,000
Total annual plastic spend – $9,500
Consumer behavior – revolver
DTI – 30%
Result (cross-sell
opportunity)
HELOC to consolidate debt from
credit cards
Benefit to
customer
Consolidate balances to one loan
product, lower APR, interest is tax
deductible
32 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Propensity Models and Scores
VantageScore® 3.0
In the Market ModelsSM
Ability to Pay
Income InsightSM
Income Insight W-2SM
Trended Solutions
Trend ViewSM
EIRCSM
Risk Stability IndexSM
Experian TAPSSM (Total Annual Plastic Spend)
Analytics
Premier AttributesSM
Balance Transfer IndexSM
Extended ViewSM score
Asset InsightSM
Short Term AttributesSM
Payment Stress AttributesSM
Deleveraging AttributesSM
Property Valuation
Real strategies. Real opportunities. Real growth.
33 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
Increasing relationships with the customer increases profitability
Endless opportunities to engage with your customer
Understand how to more successfully cross-sell customers
Increased knowledge about tools that will help you more effectively cross-sell to customers
Opportunity to reduce overall costs
It is as simple as ordering off a menu
Next step: Call your Account Executive
Last course: Desert and coffee
Bon Appétit
34 © 2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.
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