Market Trends

Consumers are hungry for more personalized marketing, and I’m an actual example. As a new stepmom to two young kids, who has a full-time job, I rarely have any down time. No revelation there. I no longer have time to surf the web to buy clothes. And shepherding everyone to an actual store to shop? #forgetaboutit I’m not alone. Of the 57 percent of women in the U.S. workforce, 70 percent have a child under the age of 18. We don’t always have the time to shop for clothes, financial products, and nearly anything else, but it doesn’t mean we don’t need or want to. I would give the right bank or retailer my data in exchange for personalized marketing offers in my inbox, social feeds and mailbox. And many others would, too. Sixty-three percent of Millennial consumers and 58 percent of Gen Xers are willing to share data with companies in exchange for personalized offers, discounts and rewards. This indicates consumers are craving more customized marketing. Providing their personal data to get that is acceptable to them. In the financial services space, Mintel research shows that just 61 percent of male consumers, 49 percent of consumers aged 18-44, and 44 percent of Hispanic Millennials have a general-purpose credit card, either with or without rewards (Mintel’s Marketing Financial Services Report for June 2017). This indicates a significant market opportunity for cards that offer segmented or boosted rewards based on specific sectors and categories. Here are some other interesting trends specific to financial services: Relying on Experts Although chatbots and robo-advisors allow easy access to many financial services, 81 percent of consumers prefer in-person meetings when it comes to personalized financial advice. According to Mintel, men aged 18-44 are most interested in a free consultation with a financial advisor, and 19 percent of consumers are open to a free consultation. This interest surpasses attending free classes about finance and receiving email and mobile alerts from a financial institution. Quick, Efficient Delivery While consumers are calling for increased personalization, they also want it delivered quickly and efficiently. These expectations create unique challenges for financial institutions of all sizes. Some banks have embraced “card finder” apps, which allow consumers the convenience of inputting personal information to generate customized offers. There is a huge opportunity for financial institutions to leverage available consumer data to understand their target audience, and then deliver relevant products via multiple channels where they are consuming media now. Those who do will be positioned to provide personalized financial recommendations that were impossible just a few years ago.

The nation’s economic recovery is continuing in a positive upward trend with consumer credit scores coming exceptionally close to pre-recession numbers—the healthiest in a decade. Experian’s 8th annual State of Credit report reveals the nation’s average credit score is up two points year-over-year to 675, and is just four points shy of the 2007 average of 679. “The trend line we are seeing is quite promising,” said Michele Raneri, Experian vice president of analytics and new business development. “With employment and consumer confidence on the rise, the data is indicating that we have made great progress as a country since the recession. The economy is expected to expand at a healthy pace this year and we believe that credit will continue to rebound. All of the factors point towards a good year for credit in 2018.” The study also revealed that year-over-year: Personal loan and auto loan originations increased 11 percent and 6 percent, respectively. The average number of retail cards remains at 2.5 per consumer, while the average retail debt increased $73 to $1,841 per consumer. The average number of bankcards increased slightly from 3.03 to 3.06, with the average card balance also increasing by $166 to $6,354. Instances of late payments (includes bankcard and retail) remained about the same at under 1 percent. And importantly, consumers have a positive outlook with consumer confidence up 25 percent. Top of the credit charts As part of the annual study, Experian analyzed consumer credit habits in U.S. cities. As in previous years, Minnesota continues to stand out with three of its cities — Minneapolis, Rochester and Mankato—leading the way with credit scores of 709, 708 and 708, respectively. Wausau, Wis. (706), Green Bay, Wis. (705) round out the top five. Again, Greenwood, Miss., and Albany, Ga., ranked the lowest with scores of 624 and 626. While still at the bottom of the list, Greenwood and Abany residents did improve their scores by two points. Riverside, Calif.,—fifth on the list—improved its score by four points—the greatest increase of any city in the bottom 10. Generational divide Taking the research further, Experian analyzed consumer credit information by generation, and found: Generation Z (born 1996 and later) is building credit through different methods than the generations before them, with heavier student loan debts and fewer credit cards and department store cards. And they are keeping debts low and managing them well. Generation Y/Millennials (born 1977-1995) have seen their scores climb four points over the past year. They’ve also decreased their overall average debt by nearly eight percent, but have added six percent in mortgage debt. Generation X (born 1965-1976) has a credit score of 658, the highest mortgage debt of all generations, and a high instance of late payments compared to the national average. Their scores have improved, so they are managing their debts better than in the past,. Baby Boomers (born 1946-1964) continue to carry quite a bit of mortgage debt, and have the lowest late payment instances of all the generations. The Silent Generation (born 1945 and before) has quite a bit of mortgage debt, but are keeping other debts low and making payments on time. At 729, they have the best credit score of all generations and the fewest late payments of any generation. To review findings from Experian’s 2017 State of Credit report, join WiseBread’s chat Jan. 18. To register, go to www.wisebread.com and follow #wbchat. To chat with Experian live, and learn more about credit, join #CreditChat hosted by @Experian_US on Twitter every Wednesday at Noon PT/3 p.m. ET.

It’s no secret. Consumers engage and interact with brands through a variety of channels, including email, direct mail, websites and mobile. And since most organizations work to keep the consumer experience at the core, they tend to invest in an omnichannel approach that caters to the consumer’s preferences. The lone exception may be during the collections process. Often, once an account falls behind on payment, the consumer experience falls behind with it. But should it? While many banks and financial institutions view the collections process merely as an opportunity to collect outstanding debt, the potential is much more. If treated effectively, the collections process can present an opportunity to develop a positive customer relationship that builds loyalty over time. If handled poorly, the collections process could cost an organization a number of lifetime customers. To correct this, banks and financial institutions need to implement the same omnichannel approach in the collections process as they do with every other consumer interaction. Collections can no longer be treated as a linear process that leads from one channel to the next. There needs to be a more personalized touch — communicating with consumers through preferred channels, contacting them at the most opportune times. Sound complex? Sure. But consider a recent Experian analysis that invited consumers to establish a nonthreatening dialogue with an online debt recovery system. The analysis revealed 21 percent of visits to an organization’s website were outside the traditional working hours of 8 a.m. to 8 p.m. Furthermore, of the consumers who committed to a repayment plan, only 56 percent did so in a single visit. Each consumer is different. So is each situation. And banks and financial institutions need to acknowledge those differences. Luckily, technology can address the complexities of an omnichannel and personalized approach. Platforms such as Experian’s PowerCurve® Collections enable banks and financial institutions to simplify the collections process for both the consumer and the organization. By treating the collections process the same as any other stage in the consumer journey, organizations have an opportunity to build a relationship. And to do so, banks and financial institutions need to leverage the data and technology at their disposal. If they do so appropriately, they’ll minimize their charge-offs and also create a lifetime customer. To learn more about leveraging the collections process to build customer loyalty, download our white paper Getting in front of the shift to omnichannel collections.

Experian on the State of Identity podcast In today’s environment, any conversation on the identity management industry needs to include some mention of synthetic identity risk. The fact is, it’s top of mind for almost everyone. Institutions are trying to scope their risk level and identify losses, while service providers are innovating ways to solve the problem. Even consumers are starting to understand the term, albeit via a local newscast designed to scare the heck out of them. With all this in mind, I was very happy to be invited to speak with Cameron D’Ambrosi at One World Identity (OWI) on the State of Identity podcast, focusing on synthetic identity fraud. Our discussion focused on some of the unique findings and recommended best practices highlighted in our recently published white paper on the subject, Synthetic identities: getting real with customers. Additionally, we discussed how a lack of agreement on the definition and size of the synthetic identity problem further complicates the issue. This all stems from inconsistent loss reporting, a lack of confirmable victims and an absence of an exact definition of a synthetic identity to begin with. Discussions must continue to better align us all. I certainly appreciate that OWI dedicated the podcast to this subject. And I hope listeners take away a few helpful points that can assist them in their organization’s efforts to better identify synthetic identities, reduce financial losses and minimize reputation risks.

As we enter the holiday season, headlines abound around the shifts and trends in retail. How are consumers shopping? What are they buying online versus in-store? How can retailers maintain share and thrive? To gain some fresh perspective on the retail space, we interviewed John Squire, CEO and co-founder of DynamicAction, a business featuring advanced analytics solutions designed specifically for eCommerce, store and omnichannel retail teams. Squire has had a tenured career in the retail and technology sectors serving in key executive roles for IBM Smarter Commerce and Coremetrics. He has spent the past decade guiding nearly every retail brand to a better understanding of their customers and utilization of their data to make profitable decisions.  Business headlines claim we are in the midst of a retail apocalypse. Is this statement a reality?  The reality is that retail is in a renaissance – a revolution driven by the most empowered, connected consumer in history, a burgeoning technology infrastructure and retail tech innovators who have disrupted the status quo. The most agile of retailers and brands are leaning forward to serve their customer with remarkable experiences in the store, online and anywhere the customer decides to interact with the brand. And for those retailers, the days ahead are filled with newfound opportunity. However, the retailers and brands who don’t have a strong core purpose beyond being filler between anchor stores may no longer have a place in this new world of retail. The strongest retailers and brands will tap into their wealth of customer data to better understand, and therefore better serve their customers, creating long-term relationships. They should only continue gain in strength as consumers concentrate more and more of their time (and wallets) with businesses that passionately focus on their unique needs and buying patterns. It seems like shoppers are increasingly turning online to make their purchases. Is this the case, and do we see seasonal spikes with this trend? The key for successful retailers is to understand that customers aren’t just searching, browsing, buying and returning online OR in-store. They are shopping online AND in-store … and even online while in-store. Shoppers simply do not see channels, and the sooner that retailers reorganize their mindset, their organizations and their data understanding around this reality, the more successful they will become. Shoppers are indeed moving online with increasing frequency and larger amounts of their overall spending. Connecting data across the enterprise, across their partners and across social channels is critical in enabling their retailing teams to make decisions on how best to simultaneously serve their customers and their company’s shareholders. If retailers have a store credit card to offer to consumers, how can they encourage use and get them to maximize spend? Are there particular strategies they should employ? As with any loyalty program or service item, consumers are looking for tools and offers they value. Therein lies the opportunity and the challenge. Value can come in many forms, depending on the individual. Does the credit card offer travel or retail points, or dollars that they can accumulate? Does the credit card save them time? Provide them with additional purchasing power? Reduce their friction of making large purchases? Increase the security of the initial purchase and long-time use of the product or service? The competition for just a consumer’s current and future wallet is being upended by retailing offers that are serving up entertainment, services, convenience and broader product selections. Understanding the high-value activities correlated to their VIP consumers generating the highest amount of profit for the business is the essential to building strategies for encouraging card use. Beyond online shopping, are there other retail trends you see emerging in the coming year? What excites you about the space? Online shopping is not a trend; it is retail’s greatest disruption of the last 100 years. Digitization of shopping in both the online and store setting is what thrills me. One to watch is Wal-mart. The company is taking a highly energized track to build a business of next-gen brands and using their supply chain acumen to battle Amazon, while simultaneously gaining huge amounts of market share from other less sophisticated and strong retailers. In addition, seeing how next-gen brands like Warby Parker, Everlane, Untuckit, Bonobos, Indochino and Rent the Runway are rapidly building out a store experience, albeit radically different than the stores of the past, is exciting to watch. Seeing the growth in Drone deliveries outside the US for retail and commercial applications is surely the next big jump for ‘Next Hour’ in-home delivery. Made-to-order with a very short lead-time is also a big trend to keep an eye on. However, what excites me most in the industry is the universal mind shift that is becoming undeniable in retail: that data understanding and action will be the very basis for customer centricity and companies’ growth. Retailers have had access to these data pools for ages, but the ability to sync the data sets across channels, make sense of the findings and take action at the speed the consumer expects is truly the next leap forward for great retailers. To learn more about the state of retail credit cards, access our latest report.

With 81% of Americans having a social media profile, you may wonder if social media insights can be used to assess credit risk. When considering social media data as it pertains to financial decisions, there are 3 key concerns to consider. The ECOA requires that credit must be extended to all creditworthy applicants regardless of race, religion, gender, marital status, age and other personal characteristics. Social media can reveal these characteristics and inadvertently affect decisions. Social media data can be manipulated. Individuals can represent themselves as financially responsible when they’re not. On the flip side, consumers can’t manipulate their payment history. When it comes to credit decisions, always remember that the FCRA trumps everything. Data is essential for all aspects of the financial services industry, but it’s still too early to click the “like” button for social media. Make more insightful decisions with credit attributes>

The data to create synthetic identities is available. And the marketplace to exchange and monetize that data is expanding rapidly. The fact that hundreds of millions of names, addresses, dates of birth, and Social Security numbers (SSNs) have been breached in the last year alone, provides an easy path for criminals to surgically target new combinations of data. Armed with an understanding of the actual associations of these personally identifiable information (PII) elements, fraudsters can better navigate the path to perpetrate identity theft, identity manipulation, or synthetic identity fraud schemes on a grand scale. Using information such as birth dates and addresses in combination with Social Security numbers, criminals can target new combinations of data to yield better results with lower risk of detection. Some examples of this would be: identity theft, existing account takeovers, or the deconstruction and reconstruction of those PII elements to better create effective synthetic identities. Experian has continued to evolve and innovate against fraud risks and attacks with an understanding of attack rates, vectors, and the shifting landscape in data availability and security. In doing so, we’ve historically operated under the assumption that all PII is already compromised in some way or is easily done so. Because of this, we employ a layered approach, providing a more holistic view of an identity and the devices that are used over time by that identity. Relying solely on PII to validate and verify an identity is simply unwise and ineffective in this era of data compromise. We strive to continuously cultivate the broadest and most in-depth set of traditional, innovative and alternative data assets available. To do this, we must enable the integration of diverse identity attributes and intelligence to balance risk, while maintaining a positive customer experience. It’s been quite some time since the use of basic PII verification alone has been predictive of identity risk or confidence.  Instead, validation and verification is founded in the ongoing definition and association of identities, the devices commonly used by those individuals, and the historical trends in their behavior. Download our newest White Paper, Synthetic Identities: Getting real with customers, for an in-depth Experian perspective on this increasingly significant fraud risk.

  Our national survey found that consumers struggle to find a credit card that meets their needs. They say there are too many options and it’s too time-consuming to research. What do consumers want?     With 53% of survey respondents not satisfied with their current cards and 1 in 3 saying they’re likely to get a new card within 6 months, now’s the time to start personalizing offers and growing your portfolio. Start personalizing offers today>

Direct mail is dead. It’s so 90s. Digital is the way to reach consumers. Marketers have heard this time and again, and many have shifted their campaign focus to the digital space. But as our lives become more and more consumed by digital media, consumers are giving less time and attention to the digital messages they receive. The average lifespan of an email is now just two seconds and brand recall directly after seeing a digital ad is just 44%, compared to direct mail which has a brand recall of 75%. Further research shows direct mail marketing is one of the most effective tools for customer acquisition and loan growth. The current Data & Marketing Association (DMA) response rate report reveals the direct mail response rates for 2016 were at the highest levels since 2003. Additionally, while mailing volume has trended down since October 2016, response rates have trended up, and reached 0.68% in March 2017, up from 0.56% in October 2016. Using data and insights to tailor a direct mail campaign can yield big results. Here are some attention-grabbing tips: Identify Your Target Market: Before developing your offer and messaging strategy, begin with the customer profile you are trying to attract. Propensity models and estimated interest rates are great tools for identifying consumers who are more likely to respond to an offer. Adding them as an additional filter to a credit-qualified population can help increase response rates. Verify your Mailing List: Experian’s address verification software validates the accuracy and completeness of a physical address, flags inaccuracies, and corrects errors before they can negatively impact your campaign. Personalize the Offer: Consumers are more likely to open offers that are personalized, and appeal to their life stage, organizational affiliations or interests. Experian’s Mosiac profile report is a simple, inexpensive way to gather data-based insight into the lifestyle and demographics of your audience. Time the Offer: Timing your campaign with peak market demand is key. For example, personal loan demand is highest in the first quarter after the holidays, while student loans demand peaks in the Spring. Direct mail can help overcome digital fatigue that many consumers are experiencing, and when done right, it’s the printed piece that helps marketers boost response rates.

We recently analyzed millions of online transactions from the first half of 2017 to identify fraud attack rates. Here are the top 3 riskiest states for e-commerce billing and shipping fraud for H1 2017: Riskiest states for billing fraud Oregon Delaware Washington, D.C. Riskiest states for shipping fraud Oregon Delaware Florida Fraudsters are extremely creative, motivated and often connected. Protect all points of contact with your customers to prevent this growing type of fraud. Is your state in the top 10?

  National Hispanic Heritage Month is observed each year from Sept. 15 to Oct. 15, by celebrating the histories, cultures and contributions of American citizens whose ancestors came from Spain, Mexico, the Caribbean and Central and South America. With one in six U.S. residents being Hispanic, all communities are impacted by the contributions of Hispanics—and now is a great time for financial institutions to reflect upon their largest growth opportunity. What is the best way to reach Hispanic consumers? What are the nuances of the Hispanic market? What are some of the myths FIs have about the Hispanic community? Miriam De Dios Woodward, CEO of Coopera, a Hispanic market strategy firm that helps credit unions reach and serve the Hispanic consumer segment, recently chatted with Experian about serving the Hispanic market. Here she shares her thoughts: Are there special considerations or insights credit unions should know when serving the Hispanic market? It’s very important to understand the Hispanic market is nuanced. There are 22 Spanish-speaking Latin American countries from which prospective Hispanic credit union members may hail. Add to that the fact, many U.S.-born Hispanics think, speak and behave differently than their parents and grandparents. Layer over this the existence of segments like small business owners or Millennials and you can begin to see the complexities involved with targeting and serving a multi-faceted Hispanic market. A smart Hispanic membership growth strategy will be based on segmentation, so credit unions should be willing to invest upfront in good market research. You have to understand what your local Hispanic community really looks like before you can mobilize your teams and leadership around serving them well. Are there particular consumer trends you have seen in the Hispanic community that impact the financial services space? The increasing digitization of financial services is a trend that definitely impacts Hispanic consumers. That’s because Hispanics typically over-index in studies that look at consumer use of connected devices, online banking and social media. A good Hispanic membership growth strategy will take mobile and digital products and services into account and will be tailored to the specific needs of local Hispanic communities. People often assume the Hispanic market is largely centered in states like California, Arizona, Texas and New Mexico. Are you finding that credit unions outside of these southwestern states are discovering they too need to build out a strategy in partnering with this consumer base? Absolutely. Hispanic population growth is happening far beyond so-called “gateway states” like those you mention above. In fact, states such as North Dakota, Kentucky, Louisiana, Delaware and Maryland actually saw the largest Hispanic population growth between 2007 and 2014. Midwestern states, too, are discovering just as many opportunities for engagement with their own growing numbers of Hispanic residents. Iowa and Wisconsin, for instance, each experienced explosive growth rates and now count Hispanics among one of the largest, fastest-growing and youngest groups in their cities. With a comprehensive and strategic approach to Hispanic membership growth, credit unions in unexpected places can become the preferred financial institution for this important segment. That’s because a great number of Hispanics in the U.S. are not tethered to an existing financial relationship. For more on this, check out our recent white paper Hispanic Member Growth Not Just for 'Gateway States' Anymore. What are the biggest myths financial services companies have about the Hispanic community? While there continue to be many misconceptions about the multifaceted Hispanic community, the following three continue to prevail most heavily. Myth: Hispanic consumers are only interested in transaction-based products. Check cashing and remittances are necessary services for many first generation Hispanic segments. At the same time, many of these consumers are interested in long-term relationships. Our own research indicates product penetration increases at a faster rate among Hispanic members as compared to non-Hispanic members when credit unions execute a strategic plan. Myth: The majority of Hispanics are undocumented. This misperception has been somewhat renewed this year with all the political back and forth on the subject of immigration. That’s why it’s so important for credit unions to educate – from the inside out – stakeholders on the facts. Many people do not know, for instance, that of the country's more than 52 million Hispanics, most are native-born Americans, and nearly three in four are U.S. citizens. Myth: The law prevents us from serving immigrants. There are many forms of acceptable government issued identification, such as passports and consular cards that are in full compliance with the Patriot Act and Customer Identification Program rules. In addition, financial institutions can compliantly lend to individuals who have Individual Taxpayer Identification Numbers. In fact, the NCUA wants credit unions to serve Hispanic members, including Hispanic immigrants. For more on this, check out the recording of the NCUA hosted panel, “Unique Challenges and Opportunities Serving Hispanic Credit Union Members.” For a credit union seeking to build a relationship with this community, what are your recommendations? Are there particular products or touchpoints they should focus on? Solidifying the right organizational mentality first is an important best practice. Building buy-in, doing the market research, developing a comprehensive strategy based on segmentation and defining what success truly looks like – these are all a part of laying the foundation for success with the Hispanic market. Credit unions should also be smart about talking to and partnering with local organizations that already know – and are trusted by – Hispanic residents. Conducting focus groups with the leaders of these groups and the people they serve can give credit unions a wealth of information about the makeup of their local Hispanic community and the value they might bring to the community.  

We use our laptops and mobile phones every day to communicate with our friends, family, and co-workers. But how do software programs communicate with each other? APIs--Application Programming Interfaces--are the hidden backbone of our modern world, allowing software programs to communicate with one another. Behind the scenes of every app and website we use, is a mesh of systems “talking” to each other through a series of APIs. Today, the API economy is quickly changing how the world interacts. Everything from photo sharing, to online shopping, to hailing a cab is happening through APIs. Because of APIs, technical innovation is happening at a faster pace than ever. We caught up with Edgar Uaje, senior product manager at Experian, to find out more about APIs in the financial services space. What exactly are APIs and why are they so important? And how do they apply to B2B? APIs are the building blocks of many of our applications that exist today. They are an intermediary that allows application programs to communicate, interact, and share data with various operating systems or other control programs. In B2B, APIs allow our clients to consume our data, products, and services in a standard format. They can utilize the APIs for internal systems to feed their risk models or external applications for their customers. As Experian has new data and services available, our clients can quickly access the data and services. Are APIs secure? APIs are secure as long as the right security measures are put in place. There are many security measures that can be utilized such as authentication, authorization, channel encryption and payload encryption. Experian takes security seriously and ensures that the right security measures are put in place to protect our data. For example, one of the recent APIs that was built this year utilizes OAuth, channel encryption, and payload encryption. The central role of APIs is promoting innovation and rapid but stable evolution, but they seem to only have taken hold selectively in much of the business world. Is the world of financial services truly ready for APIs? APIs have been around for a long time, but they are getting much more traction recently. Financial tech and online market place lending companies are leading the charge of consuming data, products, and services through APIs because they are nimble and fast. With standard API interfaces, these companies can move as fast as their development teams can. The world of financial services is evolving, and the time is now for them to embrace APIs in day-to-day business. How can APIs benefit a bank or credit union, for example? APIs can benefit a bank or credit union by allowing them to consume Experian data, products, and services in a standard format. The value to them is faster speed to market for applications (internal/external), ease of integration, and control over the user’s experience. APIs allow a bank or credit union to quickly develop new and innovative applications quickly, with the support of their development teams. Can you tell us more about the API Developer Portal? Experian will publish the documentation of our available APIs on our Developer Portal over time as they become available. Our clients will have a one-stop shop to view available APIs, review API documentation, obtain credentials, and test APIs. This is simplifying data access by utilizing REST API, making it easier for our clients.

Since the advent of the internet, our lives have changed drastically for the better. We can perform many of life’s daily activities from the comfort of our own home. According to Aite, in 2016 alone 36 million Americans made some form of mobile payment — paying a bill, purchasing something online, paying for fast food or making a mobile wallet purchase at a retailer. Simply put, the internet has made our lives easier. But with the good also comes the bad. While most consumers have moved to the digital world, so have fraudsters. With minimal risk and high reward at stake, e-commerce fraud attacks have increased dramatically over the last few years, with no signs of slowing down. We recently analyzed millions of transactions from the first half of 2017 to identify fraud attack rates based on billing and shipping addresses and broke down the findings into various geographic trends. Fraud attack rates represent the attempted fraudulent e-commerce transactions against the population of overall e-commerce orders. Consumers living out West and in the South have experienced more than their fair share of fraud. During the first half of 2017, the West and the South were the top two regions for both billing and shipping attacks. While both regions were at the top during the same time last year, the attacks themselves have increased substantially. Given the proximity to seaports and major international airports, this is somewhat unsurprising — particularly for shipping fraud — as many fraudsters will leverage reshippers to transport goods soon after delivery. .dataTb{margin:20px auto;width:100%}.dataTb:after{clear:both}.dataTb table{}.dataTb td,.dataTb th{border:1px solid #ddd;padding:.8em}.dataTb th{background:#F4F4F4}.tbL{float:left;width:49%}.tbR{float:right;width:49%;margin:0 0 0 2%} Shipping: Riskiest Regions Region Attack rate West 38.1 South 32.1 Northeast 27.0 North Central 20.7 Billing: Riskiest Regions Region Attack rate West 37.2 South 32.9 Northeast 27.3 North Central 24.0   At the state level, the top three shipping fraud states remained the same as 2016 — Delaware, Oregon and Florida — but the order changed. Oregon was the most targeted, with a fraud rate of 135.2 basis points, more than triple its rate at in the end of 2016. Though no longer in the top spot, Delaware saw alarming spikes as well, with shipping attack rates nearly triple last year’s rate at 128.6 basis points and billing attacks at 79.6 basis points. .dataTb{margin:20px auto;width:100%}.dataTb:after{clear:both}.dataTb table{}.dataTb td,.dataTb th{border:1px solid #ddd;padding:.8em}.dataTb th{background:#F4F4F4}.tbL{float:left;width:49%}.tbR{float:right;width:49%;margin:0 0 0 2%} Shipping: Riskiest States State Attack rate Oregon 135.2 Delaware 128.2 Florida 57.4 New York 45.0 Nevada 36.9 California 36.9 Georgia 33.5 Washington, D.C 30.8 Texas 29.6 Illinois 29.4 Billing: Riskiest States Region Attack rate Oregon 87.5 Delaware 79.6 Washington, D.C. 63.0 Florida 47.4 Nevada 38.8 California 36.9 Arkansas 36.6 New York 35.5 Vermont 34.2 Georgia 33.4     Diving a bit deeper, ZIPTM codes in Miami, Fla., make up a significant portion of the top 10 ZIP CodeTM lists for shipping and billing attacks — in fact, many of the same ZIP codes appear on both lists. The other ZIP Code that appears on both lists is South El Monte, Calif., which has a high percentage of industrial properties — common targets for fraudsters to ship packages, then reship overseas. You can download the top 100 riskiest Zip Codes in the U.S. for H1 2017. .dataTb{margin:20px auto;width:100%}.dataTb:after{clear:both}.dataTb table{}.dataTb td,.dataTb th{border:1px solid #ddd;padding:.8em}.dataTb th{background:#F4F4F4}.tbL{float:left;width:49%}.tbR{float:right;width:49%;margin:0 0 0 2%} Shipping: Top 10 riskiest ZIP™ Codes ZIP Code Attack rate 33122 [Miami, Fla.] 2409.4 91733 [South El Monte, Calif.] 1655.5 33198 [Miami, Fla.] 1295.2 33166 [Miami, Fla.] 1266.0 33195 [Miami, Fla.] 1037.3 33192 [Miami, Fla.] 893.9 97251 [Portland, Ore.] 890.6 07064 [Port Reading, NJ] 808.9 89423 [Minden, Nev.] 685.5 77072 [Houston, Tex.] 629.3 Billing: Top 10 riskiest ZIP™ Codes ZIP Code Attack rate 77060 [Houston, Tex.] 1337.6 33198 [Miami, Fla.] 1215.6 33122 [Miami, Fla.] 1106.2 33166 [Miami, Fla.] 1037.4 91733 [South El Monte, Calif.] 780.1 33195 [Miami, Fla.] 713.7 97252 [Portland, Ore.] 670.8 33191 [Miami, Fla.] 598.8 33708 [St. Petersburg, Fla.] 563.6 33792 [Miami, Fla.] 493.0   As e-commerce fraud continues to grow, businesses need to be proactive to keep themselves and their customers safe. That means incorporating multiple, layered fraud prevention strategies that work together seamlessly — for example, understanding details about users and their devices, knowing how users interact with the business and evaluating previous transaction history. This level of insight can help businesses distinguish real customers from nefarious ones without impacting the customer experience. While businesses are ultimately responsible for the safety of customers and their data, the onus doesn’t rest solely with them. Consumers should also be vigilant when it comes to protecting their digital identities and payment information. That means creating strong, unique passwords; actively monitoring online accounts; and using two-factor authentication to secure account access. At the end of the day, e-commerce fraud is a challenge that businesses and consumers will experience for the foreseeable future. But rising attack rates don’t have to spell doom and gloom for the industry. E-commerce growth is still extremely strong, as consumers interact through multiple channels (in-store, mobile and web) and expect a personalized experience. Establishing trust and verifying digital identities are key to meeting these latest expectations, which provide new opportunities for businesses and consumers to interact seamlessly and transact securely. With multiple safeguards in place, businesses have a variety of options to protect their customers and their brand reputation.   Experian is a nonexclusive full-service provider licensee of the United States Postal Service®. The following trademarks are owned by the United States Postal Service®: ZIP and ZIP Code. The price for Experian’s services is not established, controlled or approved by the United States Postal Service.

We regularly hear from clients that charge-offs are increasing and they’re struggling to keep up with the credit loss. Many clients use the same debt collection strategy they’ve used for years – when businesses or consumers can’t repay a loan, the creditor or collection agency aggressively contacts them via phone or mail to obtain repayment – never considering the customer experience for the debtor. Our data shows that consumers accounted for $37.24 billion in bankcard charge-offs in Q2 2017, a 17.1 percent increase from Q2 2016. Absorbing credit losses at such a high rate can impact the sustainability of the institution. Clearly the process could use some adjusting. Traditionally, debt collection has been solely about the money. The priority was ensuring that as much of the outstanding debt as possible was repaid. But collecting needs to be about more than that. It also should focus on the customer and his or her individual situation. When it comes to debt collection, customers should not all be treated the same way. I recently shared some tips in Credit Union Business Magazine about how to actively engage and collect from members. The same holds true for other financial institutions – they need to know the difference between a customer who has simply forgotten to make a payment and one who is dealing with financial hardship. As an example, if a person is current on his or her mortgage payment but has slipped behind on his or her credit card payment, that doesn’t necessarily signify financial hardship. It’s an opportunity to work with the customer to manage the debt and get back to current. Modern financial institutions build acquisition and customer management strategies targeted at individuals, so why should the collection process be any different? The challenge is keeping the customer at the center while also managing against potential increases in delinquencies. This holistic approach may be slightly more complex, but technology and analytics will simplify the process and bring about a more engaging experience for customers. The Power of Data and Technology Instead of relying on the same outdated collections approach – which results in uncomfortable exchanges on the phone that don’t ensure repayment –leverage data to your advantage. The data and technology exists to help you make more informed decisions, such as: What’s the most effective communication channel to reach the defaulting customer? When should you contact him or her? How often? The best course of action could be high-touch outreach, but sometimes doing nothing is the right approach. It all depends on the situation. Data and analytics can help uncover which customers are most likely to pay on their own and those who may need a little more help, allowing you to adjust your treatment strategy accordingly. By catering to the preferences of the customer, there’s a greater chance for a positive experience on both sides. The results: less charge-off debt, higher customer satisfaction and a stronger relationship. Explore the Digital Age In 2016, 36 million Americans made some form of mobile payment—paying a bill, purchasing something online, or paying for fast food, or making a Mobile Wallet purchase at a retailer. By 2020, nearly 184 million consumers will have done so, according to Aite. Consumers expect and deserve convenience. In the digital world, financial institutions have an opportunity to provide that expectation and then some. Imagine a customer being able to negotiate and manage his or her past-due account virtually, in the privacy of his or her own home, when it’s most convenient, to set their payment dates and terms. Luckily, the technology exists to make this vision a reality. Customers, not money, need to be at the heart of every debt collections strategy. Gone are the days of mass phone calls to debtors. That strategy made consumers unhappy, embarrassed and resentful. Successful debt collection comes down to a basic philosophy: Treat customers and his or her unique situation individually rather than as a portfolio profile. The creditors who live by that philosophy have an opportunity to reap the rewards on the back-end.

School is nearly back in session. You know what that means? The next wave of college students is taking out their first student loans. It’s a milestone moment – and likely the first trade on the credit file for many of these individuals. According to the College Board, the average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public colleges, and $24,930 for out-of-state residents attending public universities. So really, regardless of where students go, the cost of a college education is big. In fact, from January 2006 to July 2016, the Consumer Price Index for college tuition and fees increased 63 percent. So, unless mom and dad did a brilliant job saving, chances are many of today’s students will take on at least some debt to foot the college bill. But it’s not just the young who are consumed by student loan debt. In Experian’s latest State of Student Lending report, we dive into how the $1.4 trillion in student loan debt for Americans is impacting all generations in regards to credit scores, debt load and delinquencies. The document additionally looks at geographical trends, noting which states have the most consumers with student loan debt and which ones have the least. Overall, we discovered 13.4% of U.S. consumers have one or more student loan balances on their credit file with an average total balance of $34k. Additionally, these consumers have an average of 3.7 student loans with 1.2 student loans in deferment. The average VantageScore® credit score for student loan carriers is 650. As we looked across the generations, every group – from the Silents (age 70+) to Gen Z (oldest are between 18 to 20) had some student loan debt. While we can make assumptions that the Silents and Boomers are likely taking out these loans to support the educational pursuits of their children and grandchildren, it can be mixed for Gen X, who might still be paying off their own loans and/or supporting their own kids. Gen X members also reported the largest average student loan total balance at $39,802. Gen Z, the newest members to the credit file, have just started to attend college, thus their generation has the largest percent of student loan balances in deferment at 77%. Their average student loan total balance is also the lowest of all generations at $11,830, but that is to be expected given their young ages. In regards to geographical trends, the Northern states tended to sport the highest average student loan total balances, with consumers in Washington D.C. winning that race with $52.5k.  Southern states, on the other hand, reported higher percentages of consumers with student loan balances 90+ days past due. South Carolina, Louisiana, Mississippi, Arkansas and Texas held the top spots in the delinquency category. Access the complete State of Student Lending report. Data from this report is representative of student loan data on file as of June 2017.