Market Trends

In Experian’s Automotive Market Trends Review: Q2 2021, we looked at the data to better understand EV and internal combustion engine registration trends.

Experian recently announced that it has made the IDC 2021 Fintech Rankings Top 100, highlighting the best global providers of financial technology. Experian is ranked number 11, rising 33 places from its 2020 ranking. IDC also refers to Experian as a ‘rising star.’ The robust data assets of Experian, combined with best-in-class modeling, decisioning and technology are powering new and innovative solutions. Experian has invested heavily in new technologies and infrastructures to deliver the freshest insights at the right time, to make the best decision. For example, Experian's Ascend Intelligence Services™ provides data, analytics, strategy, and performance monitoring, delivered on a modern-tech AI platform. With the investment in Ascend Intelligence Services, Experian has been able to streamline the delivery speed of analytical solutions to clients, improve decision automation rates and increase approval rates, in some cases by double digits. “Recognition in the top 20 of IDC FinTech Rankings demonstrates Experian’s commitment to the success of its financial clients,” said Marc DeCastro, research director at IDC Financial Insights. “We congratulate Experian for being ranked 11th in the 2021 IDC FinTech Rankings Top 100 list.” View the IDC Fintech Rankings list in its entirety here. Focus on Data, Advanced Analytics and Decisioning Creates Winning Strategy for Experian Experian’s focus on data, advanced analytics and decisioning has continued to gain recognition from various notable programs that acknowledge Fintech industry leaders and breakthrough technologies worldwide. Beyond the IDC Fintech Rankings Top 100, Experian won honors from the 2021 FinTech Breakthrough Awards, the 2021 CIO 100 Awards and was most recently shortlisted in the CeFPro Global Fintech Leaders List for 2022 in the categories of advanced analytics, anti-fraud, credit risk and core banking/back-end system technologies. “At Experian, we are committed to supporting the Fintech community. It’s great to see our continued efforts and investments driving positive impacts for our clients and their consumers. We will continue to invest and innovate to help our clients solve problems, create opportunities and support their customer-first missions,” said Jon Bailey, Vice President for Fintech at Experian. Learn more about how Experian can help advance your business goals with our Fintech Solutions and Ascend Intelligence Services. Explore fintech solutions Learn more about AIS

Financial inclusion is a challenge, that, while not new, has become ever more apparent over the last year. The inequities and inequalities in our society, exasperated by the COVID-19 pandemic, which disproportionately affected underserved populations, have amplified the challenge lenders and others in the financial services industry face in fostering financial inclusion. As a result, there is an increased focus and importance on diversity, equity and inclusion (DEI) and having the ability to assess creditworthiness of overlooked and ‘invisible’ consumers. In a recent webinar, we sat down with Sarah Davies, Head of Data Analytics at Nova Credit, and a panel of Experian experts including Wil Lewis, Chief Diversity, Equity and Inclusion Officer, Alpa Lally, Vice President of Product Management, and Greg Wright, Product Chief Officer, to explore the topic of DEI, what best practices exist to break down financial inclusion barriers and move financial access forward for all, and real-takeaway strategies and capabilities designed for fintechs and other financial institutions to leverage for lending deeper. Below are a few key perspectives from our speakers: What barriers to access are there for credit across different groups of people? [WL]: There are many barriers to financial inclusion, especially for underserved communities. The first of which is lack of awareness and lack of education about credit and how it impacts financial access – from obtaining loans, buying a first home, a new car and more. Not every American has someone in their life to teach and provide coaching on credit responsibility and how to be financially literate. [AL]: Historically, credit, wealth and health inequalities have all contributed to financial disparities, and as a result, have created an underrepresentation of marginalized communities in the current credit ecosystem. That’s compounded by today’s ecosystem where consumer underwriting favors those with established thick-file credit histories with minimal delinquencies, particularly in the last 24 months. So, all things being equal, additional points distributed to elevate scores are given to consumers that are maintaining low revolving debt. This poses credit barriers for those starting out new to credit, or even to immigrants coming into a new country who don’t have an established credit history.   What role could the credit industry play in healing the financial disparities created by the COVID-19 pandemic? [WL]: Our opportunity lies in meeting consumers where they are today. COVID-19 has spotlighted economic and social disparities in a way it hasn’t been done before. At the same time, it illustrated how the inability of some groups to access financial services requires meaningful solutions, quickly. Historically, organizations have been known to look at this in a traditional way: meaning “we are the organization, consumers come to us and we can tell you what you can and can’t do.” We need to shift our focus to how we can provide consumers with tools, technology and machine learning (ML) that are available to empower them. [SD]: One of the lessons we’ve learned from COVID, is that we need to be able to get to the marketplace fast in order to respond to the economic conditions. Fintechs have been very effective at this and it has shown through the approach they’ve taken towards immediacy in identifying, developing and distributing solutions. With consumers in a stressed position, it’s incumbent upon us, as the industry, to deliver consumer-centric options and opportunities in an efficient manner rather than having our consumers sit around waiting for them.   Are there solutions to help ensure we are lending deeper and serving thin-filed consumers? [AL]: At its core, data – not limited to only traditional credit data – that can be decisioned on, can help enrich financial inclusion. Alternative data, or expanded FCRA data, means that the data is displayable, disputable and correctable by the consumer. We recognize that traditional credit is still an effective way to assess a consumer’s credit worthiness. However, expanded FCRA data includes data points from rental, video streaming, all other industry sectors to help provide a 360 view of the consumer with additional insights - whether you are a thick-file consumer, thin-file consumer, or credit invisible. Through these different various data assets paired with advanced analytics and ML, we now have a mechanism to make sure consumers go from credit invisible to visible – and scorable. Leveraging Experian Boost and Experian Lift scores can do just that. [SD]: Expanded FCRA data is powerful and vital for helping the consumer. In addition, we are now in a place where the consumer can take on the responsibility and accountability for giving permission to include their data in the credit score. You’re putting the consumers in the driver seat, and with that, we are dissolving the psychological barriers that consumers may have had previously around their credit score being out of their control. As a player in the financial services space, we can put out as much data as we want, but it’s about engaging the consumer, sharing with them how it’s safe to share their data, and what the benefits of doing so are.   Are there tangible and intangible benefits of DEI that companies can realize when they have formal DEI programs in place? [WL]: Often times, when we think of lending, we talk about it from the standpoint of our business – ‘what are we doing for our customers, how are we helping consumers who are going to a institution for a loan.’ What we typically forget about is our own backyard. Every organization has employees who are at different points in their credit journey. How often do we talk directly to our employees and give them tools and details that may help them, their family member, or neighbor? As I think about DEI, it’s about involving folks inside your company to continue moving financial inclusion forward. As for an intangible benefit, when doing work in DEI and driving impact, you’re also reducing negative reputational risk. Reputable brands are invaluable, as you begin to make and show an impact, consumers begin to trust you. [AL]: Brand and reputation is huge in today’s world. We are starting to see a shift in consumers selecting certain institutions to work with, not just because of the services provided, but because it’s based on the brand and what they stand for. You as an institution are doing financial inclusion and you’re living up to it. You are truly embarking internally and externally on this initiative and it adds weights on the products and solutions that you sell. For consumers, that may be very important.   What does the future look like relative to financial inclusion? [WL]: It’s a world where all of us play a role in - no matter where you are in the organization. It’s all of our jobs and responsibility to talk about it to our fellow neighbor, consumer, and direct them to tools that will help them. [SD]: We no longer need to justify why financial inclusion is necessary. We’ve got all the data we need. Tools and mechanisms for organizations and consumers are almost universally available. The go-forward view requires all ‘players’ within the space to aggressively embrace these tools and data and start sharing and applying them across all markets and verticals. There’s no longer a reason not to be able to underwrite somebody with a thin file or marginal set of data. We have everything in place at this point. [AL]: It’s all our jobs. I think we have to put a lot of importance on our younger leaders and colleagues to carry our initiatives forward, so we are truly inclusive. We have just started taking the initial steps and we’ve made good progress, but we need to continue to make progress. In the future, I hope to see all that are younger take this forward and drive financial inclusion for all across the spectrum. Watch the full session to hear more of the engaging and timely discussion. Access the recording To learn more about how Experian is committed to advancing financial inclusion, please visit Experian’s Inclusion Forward resources page. For Fintechs looking to partner with Experian on marketplace lending solutions, explore our solutions here.

Despite an unprecedented 18 months since the pandemic was in full force and many Americans were sent home, financial wellness continues to be on the up and up. Consumers continue to manage credit well and the average credit score climbed seven points since 2020 to 695, the highest point in more than 13 years. In Experian’s 12th annual State of Credit report, the headlines are hopeful regarding how Americans are managing personal finances in the face of the pandemic. The report provides a comprehensive look at the credit performance of consumers across America by highlighting consumer credit scores and borrowing behaviors. This year’s report features data from 2019 pre-pandemic, the 2020 pandemic year, and the start of 2021. “The findings from this year’s report show something I’ve always believed: Americans are resilient, for the most part they make smart decisions in the face of adversity and they are agile in adjusting their financial habits when the environment or circumstances change,” said Alex Lintner, President, Experian Consumer Information Services. Highlights of Experian’s State of Credit report: 2021 State of Credit Report 2019 2020 2021 Average VantageScore® credit score [1] 682 688 695 Median VantageScore® credit score 687 697 707 Average number of credit cards 3.0 3.0 3.0 Average credit card balance $6,494 $5,897 $5,525 Average revolving utilization rate 30% 26% 25% Average number of retail credit cards 2.50 2.42 2.33 Average retail credit card balance $1,930 $2,044 $1,887 Average nonmortgage debt $25,057 $25,483 $25,112 Average mortgage debt $210,263 $215,655 $229,242 Average auto loan or lease $19,034 $19,462 $20,505 Average 30–59 days past due delinquency rates 3.8% 2.4% 2.3% Average 60–89 days past due delinquency rates 1.9% 1.3% 1.0% Average 90–180 days past due delinquency rates 6.6% 3.8% 2.5% We asked Joseph Mayans, Principal Economist at Advantage Economics, LLC, for his reactions to the findings: “The State of Credit Report captures the three central themes of the pandemic. First, it shows the overwhelming success of the fiscal support packages. By far, the most striking example of this is the broad based and significant decline in delinquencies during a time when millions of people were out of work. Second, the report showcases the resiliency of American households. People used their stimulus dollars to stay on top of their bills and pay down debt, which boosted average credit scores across all generations. And third, it highlights the unique behavioral shifts brought on by the pandemic. We can see these changes in the rise of housing and auto debt as people bought larger homes and sought to drive rather than ride public transportation.” Generational Trends As indicated in the findings, consumers across all generations except Gen Z saw decreased utilization rates and decreased credit card balances year over year. Consumers are also missing fewer payments with notable improvements seen among the youngest consumers. Mortgage debt was up across every generation, which may correlate with the record low interest rates on mortgages, refinances and moves. According to the CBRE, “the pandemic accelerated several long-standing American migration patterns” as evidenced by more than 15.9 million people filing change-of-address requests with the United States Postal Service. Compared with 2019, 2020 change-of-address requests show a 4% increase in total movers, 2% increase in permanent movers and 27% increase in temporary movers, according to a study by MyMove. Mayans also made note of the mortgage trends. “It’s becoming clearer that millennials are stepping into the homebuying phase in a big way. Once thought to be the generation of apartments and urban revival, many older millennials are now buying homes and moving to the suburbs much like their parents before them,” Mayans said. “This will have significant implications for the post-pandemic world, especially as work from home becomes more prevalent.” State Trends The states with the highest and lowest average credit score remained unchanged from last year with the highest average score of 726 held by Minnesota and an average score of 666 held by Mississippi. New Jersey had the highest number of credit cards and retail cards at 3.37 and 2.54 respectively, and Alaska had the highest credit card debt at $7,089 (U.S. average is $5,525) and Texas had the highest retail debt at $2,248 (U.S. average is $1,888). What Lies Ahead Some have argued that the past year of the pandemic and quarantine forced a lot of time for reflection. The continued positive trends of consumer behavior seem to indicate some of that effort was put toward better financial health practices. That said, like any sourdough bread recipe or DIY home glow-up, there’s always more to learn and opportunities to seize when it comes to financial health. “We are committed to working with lenders and the industry to help consumers gain access to credit, driving broader financial inclusion, while also teaching consumers how to responsibly build and use credit responsibly,” Lintner said. In addition to the free weekly credit report at AnnualCreditReport.com, Experian also offers consumers free access to their credit report and ongoing credit monitoring at Experian.com. Additional credit education resources and tools Join Experian’s #creditchat hosted by @Experian on Twitter with financial experts every Wednesday at 3 p.m. Eastern time. Bilingual and Spanish speakers are also invited to join Experian’s monthly #ChatdeCredito hosted on Twitter at 3 p.m. Eastern time beginning September 16. Visit the Ask Experian blog for answers to common questions, advice and education about credit. Add positive telecom, utility and streaming service payments to your Experian credit report for an opportunity to improve your credit scores by visiting experian.com/boost[2] For additional resources, visit https://www.experian.com/consumereducation To see all the findings, download the 2021 State of Credit Report.   Download the full report [1] VantageScore® is a registered trademark of VantageScore Solutions, LLC. VantageScore® credit score range is 300 to 850. [2] Results may vary. See Experian.com for details

The automotive finance market is beginning to level out to pre-pandemic trends in Q2 2021.

Over the last year and a half, strong trends emerged in how businesses and consumers interact online - specifically when validating identities and preventing fraud. We initially explored these trends at a global level, and now we've explored U.S.-specific insights into online security, the customer experience, and digital activities and operations. Download the North America findings report to learn more about business and consumer fraud and identity trends impacting the way we live, work, and interact. Review your fraud strategy

Millions of consumers lack credit history and/or have difficulty obtaining credit from mainstream financial institutions. As a result, the use of expanded Fair Credit Reporting Act (FCRA) – or alternative – data has continued to gain popularity among lenders and financial intuitions to enrich decisions across the entire lending lifecycle to meet the financial needs of their consumers. Experian presented in a recent webinar hosted by AFSA, where Alpa Lally, Vice President of Product Management, and David Elmore, Automotive Solutions Consultant, had a chance to speak about the benefits of FCRA data, and ways lenders can leverage this data to ease access to credit for “invisible” and below prime consumers. Watch the full webinar, “FCRA Data: The Key to Unlocking Credit Universe” and learn more about: How expanded FCRA data is being used throughout the lending lifecycle The benefits of leveraging FCRA data including providing a more holistic view of a consumer’s credit profile and behavior beyond financial services, leading to smarter, more informed lending decisions The lift FCRA data can offer when augmented with traditional credit data This webinar is a part of AFSA’s partner webinar series. To learn more about FCRA data and explore related content, please visit our FCRA Alternative Credit Data Resources Page. Learn More About FCRA-Alternative Credit Data

As lenders and consumers emerge from the pandemic, predicting the attributes of the “new normal” will be difficult. Consumer demand, credit characteristics and economic conditions have all been affected by the pandemic – changing the way we think about doing business. Regulators and legislators have also developed new priorities and expectations for financial institutions. Clint Ivester, Experian’s Solutions Consultant and VP of Sales, joined Lee Gilley and Jonathan Kkolodziej, Partners for Bradley, to share their observations from the past year at AFSA’s 2021 Independents Conference. They also discussed recommendations financial institutions should consider to achieve the best possible posture with respect to compliance and business readiness. Here are a few Q&A highlights: Q: How are stimulus packages and increased government spending affecting economic conditions? A: [Ivester]: Our Experian forecast shows that the economy will grow 6% in 2021. That is well above the 2.5% average we have seen over the last four decades and highest rate since 1983. While the economy is oriented toward growth, how strong that growth is going to be will really depend on how well things go when the “training wheels” are taken off, how robust the recovery is for lower-income workers, and how consumer spending habits have been altered by the pandemic. *Data sources include Bureau of Economic Analysis and Experian’s “COVID-19 Economics Scenarios” April 2021 Report Q: How should businesses be assessing future consumer demand, conditions, and broader economic conditions over the next few quarters? A: [Ivester]: To answer this question, we should consider some factors including unemployment. What happens with lower income workers will have a big impact on where consumer spending goes post-stimulus. While the overall economy is set for solid growth there are still 8 million people out of work with the vast majority being lower income workers. Employment for lower income workers is still down more than 20%. These workers are set to lose the most by the phase out of the federal pandemic unemployment programs and are the highest risk to lose all unemployment benefits. However, if we see a strong jobs recovery – as is very possible – in bars, restaurants, hotels and other industries, these individuals will return to more normal spending habits and consumer spending should remain robust. *Data source includes Opportunity Insights Economic Tracker Watch the full session to hear more about the discussion. For more resources and content on this topic, please visit our Look Ahead Resources page or contact us for more information.  

If it looks like a bank and acts like a bank, there’s a good chance the company behind that financial services transaction may not actually be a bank – but a fintech. Born out of Silicon Valley, New York and tech hubs in between, fintechs have been categorically unfettered from regulation and driven by a focus on customer acquisition and revenue growth. Today, the fintech market represents hundreds of billions of dollars globally and has been disrupting financial services with the goal of delightful customer experiences and democratizing access to credit and banking. Their success has led many fintechs to update their strategy and growth targets and set their sites outside of core banking to other sectors including payments, alternative lending, insurance, capital markets, personal wealth management, alternative lending and others. Depending on the strategy, many are seeking a bank charter, or a partnership with a chartered financial institution to accomplish their new growth goals. Meanwhile, all this disruption has caught the attention of banks and credit unions who are keen to work with these marketplace lenders to grow deposits and increase fee-revenue streams. Historically, obtaining a bank charter was an onerous process, which led many fintechs to actively seek out partnerships with financial institutions in order to leverage their chartered status without the regulatory hurdles of becoming a bank. In fact, fintech and FI partnerships have boomed in the last few years, growing more than five times over the past decade. Gone are the days of the zero-sum game that benefits solely the bank or the fintech. Today, there are more than 30 partner banks representing hundreds of fintech relationships and financial services. These partnerships vary in size and scope from household names like Goldman Sachs, which powers the Apple credit card, to Hatch Bank, which has $68 million in assets and started with a single fintech partner, HM Bradley.[1] But which scenario is right for your fintech? Much of that depends on which markets and lines of business round out your growth strategy and revenue goals. Regardless of what framework you determine is right for your fintech, you need to work with partners who have access to the freshest data and models and a firm handle on the regulatory and compliance landscape. Experian can help you navigate the fintech regulatory environment and think through if partnering with a bank or seeking your own fintech charter is the best match for your growth plan. In the meantime, check out this new eBook for more information on the bank charter process and benefits, fintech-FI partnerships and the implications of the Office of the Comptroller of the Currency (OCC) new fintech charter. Read now Explore Fintech solutions   [1] https://a16z.com/2020/06/11/the-partner-bank-boom/

As stimulus-generated fraud wanes, we anticipate a return of more traditional forms of fraud, including account opening fraud. As businesses embrace the digital evolution and look ahead to responsible growth, it’s important to balance the customer experience with the risks associated with account opening fraud. Preventing account opening fraud requires a layered fraud and identity management strategy that allows you to approve good customers while keeping criminals out. With the right tools in place, you can optimize the customer experience while still keeping risk low. Download infographic Review your fraud strategy

The pandemic changed nearly everything – and consumer credit is no exception. Data, analytics, and credit risk decisioning are gaining an even more significant role as we grow closer to the end of the global crisis. Consumers face uneven roads to recovery, and while some are ready to spend again, others are still dealing with pandemic-related financial stress. We surveyed nearly 9,000 consumers and 2,700 businesses worldwide about how consumers are stabilizing their finances and businesses are returning to growth for our new Global Decisioning Report. In this report, we dive into: Key business priorities in 2021 Financial concerns for consumers How to navigate an uneven recovery Business priorities for the year ahead The importance of the online experience As we begin to near the end of the pandemic, businesses need to prioritize technology that enables a responsive, flexible, efficient and confident approach. This can be done by leveraging advanced data and analytics and integrating machine learning tools into model development. By investing in the right credit risk decisioning tools now, you can help ensure your future. Download the report

The surge in digital demand over the past year reinforced the deep connection between recognition, fraud prevention and the online customer experience. As businesses transformed their operations to accommodate the rapidly growing volume of digital transactions, consumer expectations for easy, secure interactions increased at an even faster pace. That meant less tolerance for the interruptions caused by security and risk controls. We surveyed more than 9,000 consumers and 2,700 businesses worldwide about this connection for our 2021 Global Identity and Fraud Report. This year’s report dives into: Business priorities for the year ahead Why the digital customer experience remains siloed Consumer preferences that impact the digital customer journey Pandemic-era digital activities that have changed consumer expectations As we move forward into the rest of 2021 it’s crucial that businesses continue to focus on fraud prevention. In order to implement an effective fraud strategy that also makes it easier for customers to engage, businesses need to move away from a one-size-fits-all approach and focus on applying the right level of protection to each and every transaction. Download the report Review your fraud strategy

Digitalization, also known as the process of using digital technology to provide new opportunities for revenue and growth, continues to remain a top priority for many organizations in 2021. In fact, IDC predicts that by 2024, “over 50% of all IT spending will be directly for digital transformation and innovation (up from 31% in 2018).”[1] By combining data and analytics, companies can make better and more instant decisions, meet customer expectations, and automate for greater efficiency. Advances in AI and machine learning are just a few areas where companies are shifting their spend. Download our new white paper to take a deep dive into other ongoing analytics trends that seem likely to gain even greater traction in 2021. These trends will include: Increased digitalization – Data is a company’s most valuable asset. Companies will continue utilizing the information derived from data to make better data-driven decisions. AI for credit decisioning and personalized banking – Artificial intelligence will play a bigger role in the world of lending and financial services. By using AI and custom machine learning models, lending institutions will be able to create new opportunities for a wider range of consumers. Chatbots and virtual assistants – Because customers have come to expect excellent customer services, companies will increase their usage of chatbots and virtual assistants to facilitate conversations. Cloud computing – Flexible, scalable, and cost-effective. Many organizations have already seen the benefits of migrating to the cloud – and will continue their transition in the next few years. Biometrics – Physical and behavioral biometrics have been identified as the next big step for cybersecurity. By investing in these new technologies, companies can create seamless interactions with their consumers. Download Now [1] Gens, F., Whalen, M., Carnelley, P., Carvalho, L., Chen, G., Yesner, R., . . . Wester, J. (2019, October). IDC FutureScape: Worldwide IT Industry 2020 Predictions. Retrieved January 08, 2021, from https://www.idc.com/getdoc.jsp?containerId=US45599219

According to Experian’s latest Global Insights Report, 38% of consumers expect to increase their online activity in the next 12 months. The report also found that consumers continue to have high expectations for their online experience, and businesses are re-imagining the customer journey to reflect that need. This January, Experian surveyed 3,000 consumers and 900 businesses to explore the changes in consumer behavior and business strategy pre- and post-COVID-19. As consumers have embraced life online, they’ve continued to emphasize their feelings regarding the importance of protecting their information. More than half of consumers still consider security to be the most important factor in their digital experience – the same experience they have such high expectations of. Business are acting in turn, with more than half investing in fraud detection methods or software to reduce friction in the customer experience. Digital transformation is also highlighting the need to: Manage regulatory compliance Integrate security measures Ensure access to AI models Attract and manage customers Integrate automation solutions Download the report to get all the latest insights into consumer desires and business behaviors, and keep visiting the Insights blog for a deeper dive into US-specific findings. Download report  

Over the last several weeks, I’ve shared articles about the problems surrounding third-party, first-party and synthetic identity fraud. To wrap up this series, I’d like to talk about account takeover fraud and how digital transformation has impacted it over the last year. What is account takeover fraud? Account takeover fraud is a form of identity theft that involves unauthorized access to a user’s online accounts to enable financial crimes. Criminals can obtain information in a number of ways, including the dark web, spyware and malware, and phishing to allow them to make unauthorized transactions with the user’s account. Fraudsters have made efforts to also gain control of mobile or email accounts so they can intercept one-time passwords or password change instructions to retain control of the account. Once fraudsters have control of one account, they can use it to access other personal information to breach additional accounts and graduate to full-scale identity theft. How does account takeover fraud impact me? Account takeover fraud is damaging to businesses and consumers. It leads to losses and well as resources invested to confirm fraud. The potential losses from account takeover fraud have spiked over the last year, in large part due to the opportunities created by the rapid increase of digital interactions and the influx of users interacting with merchants and financial institutions online for the first time. Aite research shows that 64% of financial institutions are seeing higher rates of ATO fraud attacks now than prior to the pandemic. – Trace Fooshee, Senior Analyst, Aite Group1 Account takeover can also be difficult to detect. Unlike credit card fraud where the true owner might quickly notice suspicious charges, an account takeover attack can go undetected for long periods of time. That’s because the criminal can change login and contact information, ensuring that the real accountholder doesn’t realize they’ve been compromised immediately. Solving the account takeover fraud problem A good account takeover fraud prevention strategy requires two things: frictionless customer experience and robust risk management. It’s clear that customers expect seamless interactions with merchants and lenders. At the same time, businesses need to be able to spot risky or suspicious behavior before a bad transaction occurs. That’s where a layered fraud management solution comes into play. With the right tools—including risk-based identity and device authentication and targeted step-up authentication—businesses can provide a good customer experience and only pull in staff for deeper investigations where necessary. With this strategy in place, businesses can easily recognize good customers and provide a more personalized experience, while at the same time combatting fraud – boosting growth and minimizing losses in the long run. I hope this series has helped provide insights into the different types of fraud and why each of them requires different treatment. To learn more about the risks of account takeover and how a layered fraud management solution can help protect your business and your customers, feel free to contact us. 1Key Trends Driving Fraud Transformation in 2021 and Beyond, Aite Group, December 2020