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Vision 2014: Leveraging Hosted Decisioning for Cross-sell Marketing and Segmentation Opportunities
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Vision 2014: Leveraging Hosted Decisioning for Cross-sell Marketing and Segmentation Opportunities

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This session will examine how Hosted Decisioning (DaaS) can enhance the customer experience in retail bank and mortgage environments when cross-selling products. We’ll also explore the power of …

This session will examine how Hosted Decisioning (DaaS) can enhance the customer experience in retail bank and mortgage environments when cross-selling products. We’ll also explore the power of segmentation tools and their use in classifying customers to offer the right product at the point of cross-sell.

Published in: Economy & Finance, Business
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  • 1. ©2014 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. Leveraging hosted decisioning for cross-sell marketing and segmentation opportunities Alpa Jain Experian Allison Saffran Experian #vision2014
  • 2. 2©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. After today, you will… All by harnessing the power of Experian’s data and processes  Know that increasing relationships with the customer increases profitability  Know how to more successfully cross-sell customers  Be increasingly knowledgeable about tools that will help you more effectively cross-sell to customers  Know how to reduce overall costs
  • 3. 3©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Agenda  Why cross-sell?  How we do it?  Segmenting consumers for growth  Simple as ordering off a menu
  • 4. 4©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Why cross-sell?
  • 5. 5©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. $23,622 $26,755 $33,130 $30,757 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Bankcard Only Bankcard + 1 other product Bankcard + 2 other products Bankcard + 3 other products Average bankcard total annual plastic spend
  • 6. 6©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0.32% 0.20% 0.03% 0.03% 738 738 746 737 300 400 500 600 700 800 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% Bankcard Only Bankcard + 1 other product Bankcard + 2 other products Bankcard + 3 other products Bad Rate (90+ DPD) Vantage V3 Average bankcard bad rate (90+ DPD)
  • 7. 7©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0% 5% 10% 15% 20% 25% 300-499 Deep Subprime 500-600 Subprime 601-660 Nonprime 661-780 Prime 781-850 Super Prime 24.6% 1.9% 0.1% 0.0% 0.0% 15.3% 6.1% 4.5% 0.6% 0.0% 0.0% 0.0% Bankcard Only Bankcard + 1 other product Bankcard + 2 other products Bankcard + 3 other products Bankcard bad rate by risk band
  • 8. 8©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. $1,699 $2,473 $2,984 $3,529 $8,683 $9,724 $10,743 $10,078 27% 31% 30% 38% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Bankcard Only Bankcard + 1 other product Bankcard + 2 other products Bankcard + 3 other products Balance Credit Limit Utilization Average bankcard balance, credit limit and utilization
  • 9. 9©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. 0% 20% 40% 60% 80% 100% 120% 300-499 Deep Subprime 500-600 Subprime 601-660 Nonprime 661-780 Prime 781-850 Super Prime 100% 80% 64% 28% 6% 86% 91% 78% 43% 11% Bankcard Only Bankcard + 1 other product Bankcard + 2 other products Bankcard + 3 other products Utilization by risk band
  • 10. 10©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. How we do it?
  • 11. 11©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Poll Question #1 Where do you have an opportunity to connect with your customers? a) In branch (branch representative at account opening/teller) b) ATM c) Online (account opening or account online login) d) Call center e) All above
  • 12. 12©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Poll Question #2 Where do you actually connect with your customers? a) In branch (branch representative at account opening/teller) b) ATM c) Online (account opening or account online login) d) Call center e) None of the above f) All above
  • 13. 13©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Every interaction with the consumer is an opportunity for cross-sell UnderwriteCross-sellPrequalify
  • 14. 14©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Present real-time tailored credit offers while your customers are engaged: Instant prescreen Opportunity Current customer walks into a branch to make a deposit Action Teller uses name and address from CRM to prescreen customer Experian returns “Yes” response if customer passes pre-defined criteria Inquiry type Soft Result A pre-approved firm offer of credit is made while the customer is in the branch “Congratulations!” Since this is behind the scenes, the CSR only communicates a positive result
  • 15. 15©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Qualified? Yes No “You qualify for a credit card, would you like to apply?” No action required This is accomplished in real-time: Typical instant prescreen flow A “firm offer of credit” is required Real-time inquiry (permissible purpose is not required) Financial Institution Account opened Decisioning as a ServiceSM Soft inquiry for Approvals Attributes Risk / fraud score(s) Instant prescreen decisions Treatment Risk score Debt to income Approve Decline Employment status Approve Decline
  • 16. 16©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Extend prequalified offers while your customers are engaged: Prequalification Opportunity Customer visits your Website Action Invite them to see their best-fit credit options and obtain consent to pull their credit profile Experian returns best-fit credit options Inquiry type Soft Result The customer is presented only with relevant offers – credit and/or non-credit “See what you prequalify for!” Removes the opportunity for the consumer to adverse select the wrong products
  • 17. 17©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Instantly approve customers for credit while they are engaged: Instant credit Opportunity Consumer is engaged and ready to apply for a loan Action Consumer fills out application and lender initiates call to Experian Experian returns credit underwriting decision and credit report Inquiry type Hard Result The consumer is instantly approved for a loan “Apply now” Receive an instant credit decision using your own custom underwriting criteria
  • 18. 18©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Segmenting consumers for growth
  • 19. 19©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Poll Question #3 For which products do you see the most opportunity for growth this fiscal year? a) Bankcard b) Auto loan c) Mortgage d) Personal installment loan e) Home equity line of credit f) Home equity loan g) Student loan
  • 20. 20©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Poll Question #4 Are you currently using segmentation tools to deliver the right offer to the right consumer? a) Yes b) No
  • 21. 21©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Differentiating consumers through data Spend, payment, and revolving APR data enable a much better understanding of how a consumer uses credit Monthly balance and payments $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Total Bankcard Balance Total Bankcard Payments $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Total Bankcard Balance Total Bankcard Payments $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Total Bankcard Balance Total Bankcard Payments Consumer A Consumer C Average monthly balance VantageScore® $3,462 $3,465 740 744 Consumer B $3,435 736 What is the best product for the customer? Total annual payments: $1,126 $42,429$22,390 Average % of balance paid: 2.6% 100.0%53.4%
  • 22. 22©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Segmentation Does the consumer own a home? Does the consumer use revolving credit? Is the consumer’s debt spread across multiple credit card products? Is the consumer high risk? Is the consumer likely to consolidate their debt? Is the consumer paying a high rate on their revolving lines? Is the consumer likely to open a new tradeline in the next 2–4 months? Does the consumer have high annual spend on credit cards?
  • 23. 23©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Precise targeting  Identify consumers who have been revolving for many months for balance transfer offers  Target revolvers with consolidation / personal loans  Target transactors and “super transactors” with reward offers  Create campaign efficiency - suppress “card collectors” and “rate surfers”  Target revolvers who are homeowners with less than 43% DTI for home equity products to consolidate debt Understanding behavior to satisfy consumer credit needs … results should drive offer strategy improving response, optimizing marketing expense and enhancing the customer experience
  • 24. 24©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Simple as ordering off a menu
  • 25. 25©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Propensity Models and Scores  VantageScore® 3.0  In the Market ModelsSM Ability to Pay  Income InsightSM  Income Insight W-2SM Trended Solutions  Trend ViewSM  EIRCSM  Risk Stability IndexSM  Experian TAPSSM (Total Annual Plastic Spend) Analytics  Premier AttributesSM  Balance Transfer IndexSM  Extended ViewSM score  Asset InsightSM  Short Term AttributesSM  Payment Stress AttributesSM  Deleveraging AttributesSM  Property Valuation Real strategies. Real opportunities. Real growth.
  • 26. 26©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Payment Behavior: MIN PAY – 2% Annual Card Spend: $7,500 6 month yield: $ 74 Avg. Effective APR 16.99% In the market? Bankcard BT Index (0-999) 875 BTs in last 12 months 2 Revolving trades: 4 Transacting trades: 0 Risk Index rating: Unstable Utilization in last 6 months: + 35% Credit card bals last 6 months: + $8,000 Viewing the customer as a unique individual An opportunity for enhanced segmentation Behavior Risk Revenue Response
  • 27. 27©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Customer profile Female, age 40, dentist, married with 2 kids and a dog Credit profile VantageScore® 3.0 – 740  Bank ABC products – DDA and mortgage  Products with other banks – two credit cards, one retail card  Gross family income – $420,000  Total annual plastic spend – $103,000  Consumer behavior – transactor Result (cross-sell opportunity) Rewards product with no preset spending limit Benefit to customer Rich rewards program, flexibility to spend Case study – meet Jenny, Bank ABC client
  • 28. 28©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Propensity Models and Scores  VantageScore® 3.0  In the Market ModelsSM Ability to Pay  Income InsightSM  Income Insight W-2SM Trended Solutions  Trend ViewSM  EIRCSM  Risk Stability IndexSM  Experian TAPSSM (Total Annual Plastic Spend) Analytics  Premier AttributesSM  Balance Transfer IndexSM  Extended ViewSM score  Asset InsightSM  Short Term AttributesSM  Payment Stress AttributesSM  Deleveraging AttributesSM  Property Valuation Real strategies. Real opportunities. Real growth.
  • 29. 29©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Customer profile Male, age 32, lawyer, single Credit profile VantageScore® 3.0 – 732  Bank ABC products – DDA and bankcard  Products with other banks – auto loan (newly opened, 5.34%, $16,000, 60 months)  Gross income $90,000  Total annual plastic spend – $12,500  Consumer behavior – revolver Result (cross-sell opportunity) Direct Auto loan, 3.75%, 60 months Benefit to customer Lower rate translates to 4% savings per month totaling $695 over the life of the loan Case study – meet Mark, Bank ABC client
  • 30. 30©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Propensity Models and Scores  VantageScore® 3.0  In the Market ModelsSM Ability to Pay  Income InsightSM  Income Insight W-2SM Trended Solutions  Trend ViewSM  EIRCSM  Risk Stability IndexSM  Experian TAPSSM (Total Annual Plastic Spend) Analytics  Premier AttributesSM  Balance Transfer IndexSM  Extended ViewSM score  Asset InsightSM  Short Term AttributesSM  Payment Stress AttributesSM  Deleveraging AttributesSM  Property Valuation Real strategies. Real opportunities. Real growth.
  • 31. 31©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Case study – meet Peter, Bank ABC client Customer profile Male, age 45, business owner, married with two kids Credit profile VantageScore® 3.0 – 744  Bank ABC products – DDA  Products with other banks – five credit cards, three retail cards, mortgage  Customer income – $125,000  Total annual plastic spend – $9,500  Consumer behavior – revolver  DTI – 30% Result (cross-sell opportunity) HELOC to consolidate debt from credit cards Benefit to customer Consolidate balances to one loan product, lower APR, interest is tax deductible
  • 32. 32©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Propensity Models and Scores  VantageScore® 3.0  In the Market ModelsSM Ability to Pay  Income InsightSM  Income Insight W-2SM Trended Solutions  Trend ViewSM  EIRCSM  Risk Stability IndexSM  Experian TAPSSM (Total Annual Plastic Spend) Analytics  Premier AttributesSM  Balance Transfer IndexSM  Extended ViewSM score  Asset InsightSM  Short Term AttributesSM  Payment Stress AttributesSM  Deleveraging AttributesSM  Property Valuation Real strategies. Real opportunities. Real growth.
  • 33. 33©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public.  Increasing relationships with the customer increases profitability  Endless opportunities to engage with your customer  Understand how to more successfully cross-sell customers  Increased knowledge about tools that will help you more effectively cross-sell to customers  Opportunity to reduce overall costs  It is as simple as ordering off a menu  Next step: Call your Account Executive Last course: Desert and coffee Bon Appétit
  • 34. 34©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. For additional information, please contact: Alpa.Jain@experian.com Allison.Saffran@experian.com Hear the latest from Vision 2014 in the Daily Roundup: www.experian.com/vision/blog @ExperianVision | #vision2014 Follow us on Twitter
  • 35. 35©2014 Experian Information Solutions, Inc. All rights reserved. Experian Public. Visit the Experian Expert Bar to learn more about the topics and products covered in this presentation.

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