Fintech

Personal loans have been booming for the past couple of years with double-digit growth year-over-year. But the party can’t last forever, right? In a recent Experian webinar, experts noted they have seen originations leveling off. In fact, numbers indicate it’s gone from leveled off to a slight year-over-year decline. They projected the first quarter of calendar year 2017 may also be down, but then we’ll see a peak again in the second quarter, which is typical with the seasonality often associated with personal loans. The landscape is changing. A recent data pull revealed a 9-point shift in the average VantageScore® credit score for originations from Q3 to Q4 of 2016. Lenders are digging deeper in order to keep their loan volumes up, and it is definitely a more competitive marketplace. The days where lenders were once able to grow their personal loan business with little effort are gone. Kelley Motley, Experian’s director of analytics, noted some of the personal loan origination volume shifts may be due to the rebound in the housing market and increased housing values, enabling super-prime and prime consumers to now also consider home equity loans and lines of credit, in lieu of personal loans. Still, the personal loan market is healthy. Lenders just need to be smart about their marketing efforts and utilize data to improve their response rates, expand their risk criteria to identify consumers trending upward in the credit ranks, and then retain them as their cash-flow and financial situations evolve. In the presentation, experts revealed a few interesting stats: 67% of those that open a personal installment loan had a revolving trade with a balance >$0 5% of consumer that close a personal loan reopen another within a few months of the original loan closure 68% of consumers that re-open a new personal loan within a short timeframe of closing another personal loan do so with the same company Together, these stats illustrate that individuals are largely leveraging personal loans to consolidate debt or perhaps fund an expense like a vacation or an unexpected event. Once the consumer comes into cash, they’ll pay off the loan, but consider revisiting a personal loan again if their financial situation warrants it. The calendar year Q2 peak has been consistent since the Great Recession. For many consumers, after racking up holiday debt and end-of-year expenses, the bills start coming in during the first quarter. With the high APRs often attached to revolving cards, there is a sense of urgency to consolidate and lock in a more reasonable rate. Others utilize the personal loan to fund weddings, vacations and home improvement projects.  Kyle Matthies, a senior product manager for Experian, reminded participants that most people don’t need your product, so it’s essential to leverage data find those that do. Utilizing propensity score and attributes, as well as tools to dig into ability-to-pay metrics and offer alignment can really fine-tune both an organization’s marketing and retention strategies. To learn more about the current state of personal loans, access our free webinar How lenders can capitalize on the growth in personal loans.

When you think of criteria for prescreen credit marketing, what comes to mind? Most people will immediately discuss the risk criteria used to ensure consumers receiving the mailing will qualify for the product offered. Others mention targeting criteria to increase response rates and ROI. But if this is all you’re looking at, chances are you’re not seeing the whole picture. When it comes to building campaigns, marketers should consider the entire customer lifecycle, not just response rates. Yes, response rates drive ROI and can usually be measured within a couple months of the campaign drop. But what happens after the accounts get booked? Traditionally, marketers view what happens after origination as the responsibility of other teams. Managing delinquencies, attrition, and loyalty are fringe issues for the marketing manager, not the main focus. But more and more, marketers must expand their role in the organization by taking a comprehensive approach to credit marketing. In fact, truly successful campaigns will target consumers that build lasting relationships with the institution by using the three pillars of comprehensive credit marketing. Pillar #1: Maximize Response Rates At any point in time, most consumers have no interest in your products. You don’t have to look far to prove this out. Many marketing campaigns are lucky to achieve greater than a 1% response rate. As a result, marketers frequently leverage propensity to open models to improve results. These scores are highly effective at identifying consumers who are most likely to be receptive to your offer, while saving those that are not for future efforts. However, many stop with this single dimension. The fact is no propensity tool can pick out 100% of responders. Layering just a couple credit attributes to a propensity score allows you to swap in new consumers. Simultaneously, credit attributes can identify consumers with high propensity scores that are actually unlikely to open a new account. The net effect is even higher response rates than can be achieved by using a propensity score alone. Pillar #2: Risk Expansion Credit criteria are usually set using a risk score with some additional attributes. For example, a lender may target consumers with a credit score greater than 700 and no derogatory or delinquent accounts reported in the past 12 months. But, most of this data is based on a “snapshot” of the credit profile and ignores trends in the consumer’s use of credit. Consider a consumer who currently has a 690 credit score and has spent the past six months paying down debt. During that time, utilization has dropped from 66% to 41%, they’ve paid off and closed two trades, and balances have reduced from $21,000 to $13,000. However, if you only target consumers with a score greater than 700, this consumer would never appear on your prescreen list. Trended data helps spot how consumers use data over time. Using swap set analysis, you can expand your approval criteria without taking on the incremental risk. Being there when a consumer needs you is the first step in building long-term relationships. Pillar #3: Customer profitability and early attrition There’s more to profitability than just originating loans. What happens to your profitability assumptions when a consumer opens a loan and closes it within a few months? According to recent research by Experian, as many as 26% of prime and super-prime consumers, and 38% of near-prime consumers had closed a personal loan trade within nine months of opening. Further, nearly 32% of consumers who closed a loan early opened a new personal loan trade within a few months. Segmentation can help identify consumers who are likely to close a personal loan early, giving account management teams a head start to try and retain them. As it turns out, many consumers use personal loans as a form of revolving debt. These consumers occasionally close existing trades and open new trades to get access to more cash. Anticipating who is likely to close a loan early allows your retention team to focus on understanding their needs. If you don’t, you’re competition will take advantage through their marketing efforts. Building the strategy Building a comprehensive strategy is an iterative process. It’s critical for organizations to understand each campaign is an opportunity to learn and refine the methodology. Consistently leveraging control and test groups and new data assets will allow the process to become more efficient over time. Importantly, marketers should work closely across the organization to understand broader objectives and pain points. Credit data can be used to predict a range of future behaviors. As such, marketing managers should play a greater role as the gatekeepers to the organization’s growth.

As we enter 2017, it’s no surprise people are buying and selling online and using their mobile devices more than ever. At the close of November, Adobe released its online shopping data from Black Friday, Cyber Monday, and the overall holiday season. According to the data, the major November holiday shopping season was driving close to $40 billion in online and mobile revenue alone — a 7.4% increase year-over-year! Every year, we see tremendous growth in spending through online and mobile channels. Interestingly, this pattern is not just indicative of consumer spending and overall market confidence. The consumer pattern also illustrates a clear change in communication preferences — with the ever-present shift toward digital. In general, consumers are interacting more and more through both online and mobile channels for all of their personal needs, including banking and financial services; and the lending community is anxious to continue connecting to consumers where they need them most. No longer is digital communication the “cool thing to do,” but rather it is essential. While Experian’s lending customers still find tremendous success in direct mail prospecting, many financial institutions are preparing to implement an enhanced acquisition strategy in 2017. This strategy includes multi-channel prospecting initiatives to present consumers with preapproved credit offers. In addition to direct mail, our customers are evaluating digital channels such as email, mobile, and other online channels to improve the overall consumer experience and responsiveness. In the latest Digital Banking Report, published in July 2016, email is the top channel financial marketers are turning to for cross-channel marketing after the initial onboarding process (as illustrated in chart 49), but you can see social media and retargeting are rising in the ranks. In Sept., 2016, Experian was named one of the top 100 most innovative companies for a third year by Forbes magazine. A key part of that success was driven by investments in Experian’s Data Lab and Experian Marketing Service’s Audience Engine, which is an audience management platform that changes the way the advertising industry buys and measures media. We are focused on meeting our customers and the consumer where they need us most. Bottom line? As you refine your goals for 2017, the financial services sector should dig deeper when making connections. They must reach consumers where they want to connect – and that means a successful credit marketing strategy will be one that includes both direct mail and digital communications. A new year is the perfect time to re-evaluate those same-old, same-old marketing and acquisition tactics. We're not saying you need to abandon direct mail, but it is certainly time for lenders to complement their direct mail efforts with a savvy digital plan as well. Resolve to do it better in 2017.

The holidays are behind us, the presents are unwrapped, resolutions have been made and may already be broken. For many, it’s the most depressing time of the year as the reality of holiday spending settles in. According to the American Consumer Credit Council the average American spends $935 on gifts each holiday season. A recent report by Mintel showed the average consumer held $16,000 in debt at the end of 2015. Now is the time to reach out to consumers who may be suffering from a financial hangover; an Experian study revealed consumers typically look to personal loans for help with credit card debt in the second quarter of each year. What’s the best way to reach these consumers? Direct mail is still one of the most successful paths. Here are four keys to securing new personal loan customers via direct mail marketing: Focus on education: Some of the most successful direct mail campaigns for personal loans in 2015 focused on educating consumers about personal loans first, and then showing options for debt consolidation. Consumers are weary of trusting new lenders, according to Mintel, with 50% viewing them as riskier than banks and credit unions. Marketplace and online lenders should take the extra step of introducing their brand and showing their product as a safe option. Highlight the use of the loan: Consumers generally have a negative attitude toward debt, with 72% feeling uncomfortable holding any type of debt. Stressing that personal loans are a responsible tool for consolidating debt is critical. Some effective campaigns listed the top three reasons to choose a personal loan, while others used customer testimonials to show how a personal loan was used and how they benefited. Provide a competitive comparison: Another way to highlight the benefits of personal loans is by comparing the fixed rates and payments of a personal loan to credit cards. Many consumers consolidate credit card debt to one card immediately after the holidays, according to the Experian study. Simply showing the long-term benefit of a personal loan versus credit card is often enough to trigger action. Personalize the offer: Lenders are delivering more personal, relevant offers that are tailored to the interests of each recipient through the use of the latest personalization technology. For example, highlight the recipient’s specific qualifying loan amount or the qualifying loan rate for which they are eligible. Unsecured loans have experienced growing popularity in the last several years, and originations are poised for a seasonal peak in the coming months. Are you ready?

Using digital technology like a big bank How was your holiday? Are the chargebacks rolling in yet? It’s no secret - digital technology like mobile device usage has increased significantly over the years, making it a breeding ground for fraudsters. As credit unions continue to grow their membership, their fraud security treatments need to grow as well. Bigger banks are constantly updating their fraud tools and strategies to fight against cybercrime and, therefore, fraudsters are setting their eyes on credit unions. Even as I write this, fraudsters are searching and targeting credit unions that don’t have their mobile channel secured. They attempt to capitalize on any weakness or opportunity: Registering stolen cards to mobile wallets Taking over an account via mobile banking apps Using a retailers’ mobile app to make fraudulent payments Disabling the SIM card in the victim’s phone and diverting the one-time password sent through text message to their own phones These are clever ways to commit fraud. But credit unions are becoming wise to these new threats and are serious about protecting their members. They are incorporating device intelligence with a solid identity authentication service. This multi-layered approach is essential to securing mobile channels, and protecting your Credit Union from chargebacks. To learn more about our fraud solutions, click here.

Experian shares five trends and twists coming over the next 12 months, that could push new boundaries and in many cases improve the customer experience as it pertains to the world of credit and finance.

As 2016 comes to a close, many in the financial services industry are trying to assess the impact the Trump administration and Republican controlled Congress will have on regulatory issues. Answers to these questions may be clearer after President-elect Trump is inaugurated on Jan. 20. However, those in the federal regulatory environment are already exploring oversight and regulation of the FinTech and marketplace lending sector. Warning on alternative credit risk models Inquiries by federal and state policymakers over the past year have centered on how FinTech and marketplace lenders are assessing credit risk. In particular, regulators have asked about how credit models different from traditional credit scoring models and what, if any, new attributes or data are being incorporated into credit risk models for consumers and small businesses. On Dec. 2, Federal Reserve Governor Lael Brainard signaled that policymakers continue to be interested in this area during a wide-ranging speech on the potential opportunities and risks associated with FinTech. In particular, Brainard warned that “While nontraditional data may have the potential to help evaluate consumers who lack credit histories, some data may raise consumer protection concerns” and that nontraditional data “… may not necessarily have a broadly agreed upon or empirically established nexus with creditworthiness and may be correlated with characteristics protected by fair lending laws.” Brainard also suggested that there are transparency concerns with alternative scoring models, saying that “alternative credit scoring methods present new challenges that could raise questions of fairness and transparency” given that consumers may not always understand what data is used utilized and how it impacts a consumer’s ability to access credit at an affordable price. Look for regulators and Congress to continue to focus on the fairness and accuracy of new credit risk models and the data underpinning those models in debates surrounding FinTech and Marketplace lending in 2017. A national charter for FinTech? Earlier this month, the Office of the Comptroller of the Currency (OCC) announced that it was considering the creation of a national charter for FinTech lenders. There has long been speculation that the OCC would offer a national charter for FinTech. Analysts have suggested that the creation of a charter could help increase regulatory oversight of the growing market and also provide additional regulatory certainty for the emerging FinTech industry. The OCC’s proposal would create a special purpose national bank charter for FinTech businesses that are engaged in at least one of three core banking activities: receiving deposits; paying checks; or lending money. The OCC will be developing a formal agency policy for evaluating special purpose bank charters for Fintech companies that will designate the specific criteria that companies applying for a charter will have to meet for approval. OCC has suggested that this will likely focus on safety and soundness; financial inclusion; consumer protection; and community reinvestment. The OCC is collecting comments on the proposed policy through Jan. 15, 2017.  

You know what I love getting in the mail? Holiday cards, magazines, the occasional picturesque catalog. What I don’t open? Credit card offers, invitations to apply for loans and other financial advertisements. Sorry lenders, but these generally go straight into my shredder. Your well-intentioned efforts were a waste in postage, printing and fulfillment costs, and I’m guessing my mail consumption habits are likely shared by millions of other Americans. I’m a cusper, straddling the X and Millennial generations, and it’s no secret people like me have grown accustomed to living on our mobile devices, shopping online and managing our financial lives digitally. While many retailers have wised up to the trends and shifted marketing dollars heavily into the digital space, the financial services industry has been slow to follow. I’m hoping 2017 will be the year they adapt, because solutions are emerging to help lenders deliver firm offers of credit via email, display, retargeting and even social media platforms. There are multiple reasons to make the shift to digital credit marketing. It’s trackable. The beauty of digital marketing is that it can be tracked much more efficiently over direct mail efforts. You can see if offer emails are opened, if banners are clicked, if forms are completed and how quickly all of this takes place. In short, there are more touchpoints to measure and track, and more insights made available to help with marketing and offer optimization. It’s efficient. A solid digital campaign means you now have more flexibility. And once those assets start to deploy and you begin tracking the results, you can additionally optimize on the fly. Subject line not getting the open rate you want? Test a new one. Banners not getting clicked? Change the creative. A portion of your target audience not responding? Capture that feedback sooner rather than later, and strategize again. With direct mail, the lag time is long. With digital, the intelligence gathering begins immediately. It’s what many consumers want. They are spending 25% of their time on mobile devices. Research has found they check their phones and average 46 times per day. They are bouncing from screen to screen, engaging on desktops, tablets, smartphones, wearables and smart TVs. If you want to capture the eyeballs and mindshare of consumers, financial marketers must embrace the delivery of digital offers. Consumer behaviors have evolved, so must lenders. Sure, there is still a place for direct mail efforts, but it would be wasteful to not embrace the world of digital credit marketing and find the right balance between offline and online. It’s a digital world. It’s time financial institutions join the masses and communicate accordingly.

Technology sharing can unlock a more effective strategy in fighting fraud. Experian’s multi-layered and risk-based approach to fraud management is discussed as many businesses are learning that combining data and technology to strengthen their fraud risk strategies can help reduce losses. Evolving fraud schemes, changes in regulatory requirements and the advent of new digital initiatives make it difficult for businesses to manage all of the tools needed to keep up with the relentless pace of change.

Let’s play word association. When I say holiday season, what’s the first thing that comes to mind? Childhood memories. Connecting with family. A special dish mom used to make. Or perhaps it’s budgeting, debt and credit card spend. The holidays can be a stressful time of year for consumers, and also an important time for lenders to anticipate the aftermath of big credit card spend. According to a recent study by Experian and Edelman Intelligence: 48 percent of respondents felt thoughtful when thinking about the season 30 percent felt stressed 24 percent felt overwhelmed. Positive emotions are up across the board this year, which may be a good sign for retailers and bankcard lenders. And if emotion is an indicator of spending, 2016 is looking good. But while the holly-jolly sentiment is high, 56 percent of consumers say holiday shopping puts a strain on their finances. And, 43 percent of respondents said the stress of holiday shopping makes it difficult to enjoy the season. Regardless of stress, consumers are seeking ways to spend. Nearly half of respondents plan to use a major credit card to finance at least a portion of their holiday spending, second only to cash. With 44 percent of consumers saying they feel obligated to spend more than they can afford, it’s easy to see why credit cards are so important this time of year. Bankcard originations have fully rebounded from the recession, exceeding $104 billion in the third quarter of 2016, the highest level since the fourth quarter of 2007. While originations have rebounded, delinquency rates have remained at historic lows. The availability of credit is giving consumers more purchasing power to fund their holiday spending. But what happens next? As it turns out, many consumers resolve to consolidate all that holiday debt in the new year. Experian research shows that balance transfer activity reaches annual highs during the first quarter as consumers seek to simplify repayment and take advantage of lower interest rates. Proactive lenders can take advantage of this activity by making timely offers to consumers in need. At the same time, reactive lenders may feel the pain as balances transfer out of their portfolio. By identifying consumers who are most likely to engage in a card-to-card balance transfers, lenders can anticipate these consumer bankcard trends. The insights can then be used to acquire new customers and balances through prescreen campaigns, while protecting existing balances before they transfer out of an existing lender portfolio. With Black Friday and Cyber Monday behind us, the card balances are likely already rising. Now is the time for lenders to prepare for the January and February consolidations. Those hefty credit card statements are coming soon.

Which part of the country has bragging rights when it comes to sporting the best consumer credit scores? Drum roll please … Honors go to the Midwest. In fact, eight of the 10 cities with the highest consumer credit scores heralded from Minnesota and Wisconsin. Mankato, Minn., earned the highest ranking with an average credit score of 708 and Greenwood, Miss., placed last with an average credit score of 622. Even better news is that the nation’s average credit score is up four points; 669 to 673 from last year and is only six points away from the 2007 average of 679, which is a promising sign as the economy continues to rebound. Experian’s annual study ranks American cities by credit score and reveals which cities are the best and worst at managing their credit, along with a glimpse at how the nation and each generation is faring. “All credit indicators suggest consumers are not as ‘credit stressed’ — credit card balances and average debt are up while utilization rates remained consistent at 30 percent,” said Michele Raneri, vice president of analytics and new business development at Experian. As for the generational victors, the Silents have an average 730, Boomers come in with 700, Gen X with 655 and Gen Y with 634. We’re also starting to see Gen Z emerge for the first time in the credit ranks with an average score of 631. Couple this news with other favorable economic indicators and it appears the country is humming along in a positive direction. The stock market reached record highs post-election. Bankcard originations and balances continue to grow, dominated by the prime borrower. And the housing market is healthy with boomerang borrowers re-emerging. An estimated 2.5 million Americans will see a foreclosure fall of their credit report between June 2016 and June 2017, creating a new pool of potential buyers with improved credit profiles. More than 12 percent who foreclosed back in the Great Recession have already boomeranged to become homeowners again, while 29 percent who experienced a short sale during that same time have also recently taken on a mortgage. “We are seeing the positive effects of economic recovery with the rise in income and low unemployment reflected in how Americans are managing their credit,” said Raneri. Which means all is good in the world of credit. Of course there is always room for improvement, but this year’s 7th annual state of credit reveals there is much to be thankful for in 2016.

2017 data breach landscape Experian Data Breach Resolution releases its fourth annual Data Breach Industry Forecast report with five key predictions What will the 2017 data breach landscape look like? While many companies have data breach preparedness on their radar, it takes constant vigilance to stay ahead of emerging threats and increasingly sophisticated cybercriminals. To learn more about what risks may lie ahead, Experian Data Breach Resolution released its fourth annual Data Breach Industry Forecast white paper. The industry predictions in the report are rooted in Experian's history helping companies navigate more than 17,000 breaches over the last decade and almost 4,000 breaches in 2016 alone. The anticipated issues include nation-state cyberattacks possibly moving from espionage to full-scale cyber conflicts and new attacks targeting the healthcare industry. "Preparing for a data breach has become much more complex over the last few years," said Michael Bruemmer, vice president at Experian Data Breach Resolution. "Organizations must keep an eye on the many new and constantly evolving threats and address these threats in their incident response plans. Our report sheds a light on a few areas that could be troublesome in 2017 and beyond." "Experian's annual Data Breach Forecast has proven to be great insight for cyber and risk management professionals, particularly in the healthcare sector as the industry adopts emerging technology at a record pace, creating an ever wider cyber-attack surface, adds Ann Patterson, senior vice president, Medical Identity Fraud Alliance (MIFA). "The consequences of a medical data breach are wide-ranging, with devastating effects across the board - from the breached entity to consumers who may experience medical ID fraud to the healthcare industry as a whole. There is no silver bullet for cybersecurity, however, making good use of trends and analysis to keep evolving our cyber protections along with forecasted threats is vital." "The 72 hour notice requirement to EU authorities under the GDPR is going to put U.S.-based organizations in a difficult situation, said Dominic Paluzzi, co-chair of the Data Privacy & Cybersecurity Practice at McDonald Hopkins. "The upcoming EU law may just have the effect of expediting breach notification globally, although 72 hour notice from discovery will be extremely difficult to comply with in many breaches. Organizations' incident response plans should certainly be updated to account for these new laws set to go in effect in 2017." Omer Tene, Vice President of Research and Education for International Association of Privacy Professionals, added "Clearly, the biggest challenge for businesses in 2017 will be preparing for the entry into force of the GDPR, a massive regulatory framework with implications for budget and staff, carrying stiff fines and penalties in an unprecedented amount. Against a backdrop of escalating cyber events, such as the recent attack on Internet backbone orchestrated through IoT devices, companies will need to train, educate and certify their staff to mitigate personal data risks." Download Whitepaper: Fourth Annual 2017 Data Breach Industry Forecast Learn more about the five industry predictions, and issues such as ransomware and international breach notice laws in our the complimentary white paper. Click here to learn more about our fraud products, find additional data breach resources, including webinars, white papers and videos.

In order to compete for consumers and to enable lender growth, creating operational efficiencies such as automated decisioning is a must. Unfortunately, somewhere along the way, automated decisioning unfairly earned a reputation for being difficult to implement, expensive and time consuming. But don’t let that discourage you from experiencing its benefits. Let’s take a look at the most popular myths about auto decisioning. Myth #1: Our system isn’t coded. If your system is already calling out for Experian credit reporting data, a very simple change in the inquiry logic will allow your system to access Decisioning as a ServiceSM. Myth #2: We don’t have enough IT resources. Decisioning is typically hosted and embedded within an existing software that most credit unions currently use – thus eliminating or minimizing the need for IT.  A good system will allow configuration changes at any time by a business administrator and should not require assistance from a host of IT staff, so the demand on IT resources should decrease.  Decisioning as a Service solutions are designed to be user friendly to shorten the learning curve and implementation time. Myth #3: It’s too expensive. Sure, there are highly customized products out there that come with hefty price tags, but there are also automated solutions available that suit your budget. Configuring a product to meet your needs and leaving off any extra bells and whistles that aren’t useful to your organization will help you stick to your allotted budget. Myth #4: Low ROI. Oh contraire…Clients can realize significant return-on-investment with automated decisioning by booking more accounts … 10 percent increase or more in booked accounts is typical. Even more, clients typically realize a 10 percent reduction in bad debt and manual review costs, respectively. Simply estimating the value of each of these things can help populate an ROI for the solution. Myth #5: The timeline to implement is too long. It’s true, automation can involve a lot of functions and tasks – especially if you take it on yourself. By calling out to a hosted environment, Experian’s Decisioning as a Service can take as few as six weeks to implement since it simply augments a current system and does not replace a large piece of software.  Myth #6: Manual decisions give a better member experience. Actually, manual decisions are made by people with their own points of view, who have good days and bad days and let recent experiences affect new decisions. Automated decisioning returns a consistent response, every time. Regulators love this! Myth #7:  We don’t use Experian data. Experian’s Decisioning as a Service is data agnostic and has the ability to call out to many third-party data sources and configure them to be used in decisioning. --- These myth busters make a great case for implementing automated decisioning in your loan origination system instead of a reason to avoid it. Learn more about Decisioning as a Service and how it can be leveraged to either augment or overhaul your current decisioning platforms.  

Experian is recognized as a leading security solution provider for fraud and identity solutions in order to protect customers and financial institutions

It’s been a wild ride for the financial services industry over the past eight years. After the mortgage meltdown, the Great Recession and a stagnant economy … well, one could say the country had seen better days. Did you watch The Big Short last winter? It all came crumbling down. And then President Barack Obama entered the scene. Change was needed. More oversight introduced. Suddenly, we had the Affordable Care Act, the Dodd-Frank Wall Street Reform Act and the creation of the Consumer Financial Protection Bureau (CFPB). Taxes were raised on the country’s highest earners for the first time since the late-1990s. In essence, the pendulum swung hard and fast to a new era of tightened and rigorous regulation. Fast forward to present day and we find ourselves on the cusp of transitioning to new leadership for the country. A new president, new cabinet, new leaders in Congress. What will it all mean for financial services regulations? It’s helpful to initially take a look back at the key regulations that have been introduced over the past eight years. Mortgage Reform: Long gone are the days of obtaining a quick mortgage.  New rules have required loan originators to verify and document the consumer’s income and assets, including employment status (if relied upon), existing debt obligations, mortgage-related obligations, alimony and child support. The CFPB has also expanded foreclosure protections for struggling borrowers and homeowners. Maintaining the health of the mortgage industry is important for the entire country, and updated rules have enhanced the safety and transparency of the mortgage market. Home values have largely recovered from the darkest days, but some question whether the underwriting criteria have become too strict. Combatting Fraud: The latest cyber-attack trends and threats come fast and furious. Thus, regulators are largely addressing the challenge by expecting banks to adhere to world-class standards from organizations such as the National Institute of Standards and Technology (NIST). The Federal Trade Commission (FTC) and the National Credit Union Administration (NCUA) implemented the Red Flags Rule in November 2008. It requires institutions to establish policies and procedures to identify and recognize red flags — i.e., patterns, practices or specific activities that indicate the possible existence of identity theft — that occur during account-opening activities, existing account maintenance and new activity on an account that has been inactive for two or more years. Loss Forecasting: The Dodd-Frank Act Requires the Federal Reserve to conduct an annual stress test of bank holding companies (BHCs), savings and loan holding companies, state member banks, and nonbank financial institutions. In October 2012, the Fed Board adopted the Comprehensive Capital Analysis and Review (CCAR) rules. This requires banks with assets of $50 billion or more to submit to an annual review centered on a supervisory stress test to gauge capital adequacy. In January 2016, Dodd-Frank Act Stress Testing (DFAST) was introduced, requiring bank holding companies with assets of $10 billion or more to conduct separate annual stress tests known as “company-run tests” using economic scenarios. Every year regulators expect to see continued improvement in stress-testing models and capital-planning approaches as they raise the bar on what constitutes an acceptable practice. CFPB: No longer the new kids on the block, the CFPB has transitioned to an entity that has its tentacles into every aspect of consumer financial products. Mortgage lending was one of their first pursuits, but they have since dug into “ability-to-pay underwriting” and servicing standards for auto loans, credit cards and add-on products sold through third-party vendors. Now they are looking into will likely be the next “bubble,” – student lending – and educating themselves about online marketplace lending. Data Quality: Expectations related to data quality, risk analytics, and regulatory reporting have risen dramatically since the financial downturn. Inaccuracy in data is costly and harmful, slows down the industry, and creates frustration. In short, it’s bad for consumers and the industry. It’s no secret that financial institutions rely on the accuracy of credit data to make the most informed decisions about the creditworthiness of their customers. With intense scrutiny in this area, many financial institutions have created robust teams to handle and manage requirements and implement sound policies surrounding data accuracy. --- This is merely a sliver of the multiple regulations introduced and strengthened over the past eight years. Is there a belief that the regulatory pendulum might take a swing to other side with new leadership? Unlikely. The agenda for 2017 largely centers on the need to improve debt collections practices, enhance access to credit for struggling Americans, and the need for ongoing monitoring of the fintech space. Only time will tell, but one thing is certain. Anyone involved in financial services needs to keep a watchful eye on the ever-evolving world of regulation and Washington.