Revolutionizing lending in today's digital world
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Imagine a world where the lending journey is streamlined and aligned with today's innovative technologies. A world where income and asset verification happen real-time. No need to return to your customers and request even more paperwork to support their ability to pay. This presentation dives into how lenders can now bring financial data aggregation into the mainstream. With a simple interface, lenders can verify income and assets in minutes vs. days, leading to reduced processing times, improved revenue streams and higher customer satisfaction.
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Revolutionizing lending in today's digital world
- 1. Revolutionizing lending in today’s digital world March 23, 2017
- 2. About our speakers: Laura DeSoto Senior Vice President, Experian Steve Smith CEO, Finicity Reshma Peck Moderator, Experian
- 3. 1. Today’s lending landscape 2. The role of account aggregation 3. Industry use cases 4. A look at Experian’s Digital Transaction Solutions 5. Q&A Agenda
- 4. • Understand the opportunity to reimagine lending • Learn how to apply it to various industries • Discover the power of Experian’s Digital Transaction Solutions Objective
- 5. Partnering to provide innovative solutions User-permissioned Access to Data Robust Analysis and Insights Integrated Decisioning and Delivery Better Customer Experience & More Efficient Business Processes Experian and Finicity Partnership + + =
- 7. Trends defining the banking industry in 2017 and beyond “Long term, banks without legacy overhangs of branch networks and heavy ties to paper-based processing will be advantaged, as those assets will be increasingly less valued.” SOURCE: http://www.businessinsider.com/these-are-the-top-trends-that-will-define-the-banking-industry-in-2017-2017-2?pt=385758&ct=Sailthru_BI_Newsletters&mt=8&utm_source=Triggermail&utm_medium=email& utm_campaign=email_article/#1-onerous-carl-compliance-audit-risk-and-legal-costs-abate-1
- 8. • Verification is time consuming • Relying on proof documents Challenge: Assessing ability to pay MORTGAGE INCOME FRAUD RISK 12.5%FROM Q2 2015 TO Q2 2016 SOURCE: CoreLogic 2016 Mortgage Fraud Report September 2016 • Increases risk of fraud • Drives up operational costs • Slows down application and funding process • Burdens consumers • Negatively impacts customer experience • Results in higher abandonment rates
- 9. With the rise of “mobile financial services” consumer’s expect to be able to complete their financial transactions at the click of a button. Challenge: Shifting consumer expectations 53%Smartphone owners using mobile banking 28%Smartphone owners using mobile payments SOURCE: Federal Reserve, Consumers and Mobile Financial Services March 2016 94% 58% 56% 65% 42% 33% Checking balances or transactions Transferring money between accounts Receiving an alert Paying bills Purchasing remotely Purchasing in a store
- 10. “Let me state the matter as clearly as I can here: We believe consumers should be able to access [their financial] information and give their permission for third-party companies to access this information as well.” - Richard Cordray, Director, CFPB at Money 20/20, October 2016 Challenge: Regulatory pressure SOURCE: https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-cfpb-director-richard-cordray-money-2020/
- 11. • Financial Institutions/service providers must create a hassle-free customer experience. • To do this they will need to invest more heavily in digital capabilities and in technology that removes paper from the process. Lenders are forced to adapt https://thefinancialbrand.com/63617/digital-banking-strategies-fintech-data-analytics/ “Digitization is driving transformation, rewriting the model as consumer expectations change”
- 12. We need to be connected ... very connected Legacy Business Model Risk Management Inertia Innovation Weary Increased Margins Tailored Customer Experiences Speed of Innovation Digital Laggards Digital Innovators Cloud - Mobility - Big Data Digital Divide
- 13. The role of Account Aggregation What’s new?
- 14. A method that involves compiling information from different accounts. What is account aggregation? • Bank accounts, credit card accounts, investment accounts, other consumer or business accounts, into a single place • FIs and accounts are chosen by the consumer • Permission is given by the consumer to the aggregator
- 15. vs. Account Aggregation Credit Reporting • Pulled from a resting database • May be viewed without consumer’s knowledge • Data provided by “furnishers” • Real time data collection • User permissioned for every access • Consumer is owner of data
- 16. Benefits of Account Aggregation • Automated, paperless verification process reduces processing times • Relies on consumer’s permissioning of data and true aggregation technology • Verification via real-time access into financial systems versus customer provided paperwork or third-party systems • Easy-to-use transparent interface for online and mobile experiences
- 17. Why our solution is different • FCRA compliant and delivered by registered and mature CRAs • Integrated with best in class Decisioning as a Service platform • Unparalleled data quality with 100% formatted data sources and comes with a Financial Transaction ID
- 18. Use Cases
- 19. • Lenders require that borrowers income and assets be verified which takes days sometimes weeks • Current verification process is tedious and time consuming for the borrower • Borrower intervention increases risk of false documentation and inflated reporting Mortgage
- 20. Verification of Asset Pilot • Freedom from paper-based processes for validation of assets for first mortgages • Freedom from representations and warranties • Greater speed and simplicity, enabling an improved borrower experience
- 21. • Lenders often have income threshold stipulations (STIPs) for borrowers with credit scores< 625 • Dealers often required to verify car buyers income to meet lender stipulations (STIPs) • Consumer overstates or understates income at time of application • Consumer provides fake or altered paystubs • Employment verification often required to meet lender stipulations (STIPs) Automotive
- 22. • Lenders require verification of borrowers income which takes times to gather and verify • Current verification process is tedious and time consuming for the borrower • Borrower intervention increases risk of false documentation and inflated reporting Personal loans
- 23. Helping organizations across a wide range of industries Home Loans Card & Personal Loans Small Business Screening Eliminate paper to move towards an all-digital mortgage underwriting process More precise ability to pay assessment Deeper understanding of cash inflows and outflows Improved insight into prospective employees and tenants Auto Loans Reduced manual verification and stipulations
- 24. New Products • Income Verification • Asset Verification • Cash Flow • Scores and Attributes Improved Outcomes • Increase consumer satisfaction • Reduce risk • Broaden loan availability • Accelerate loan underwriting Account Aggregation will power new consumer insights and digitize the application and lending process ACCOUNT AGGREGATION API Auto Loans Home Loans Card & Personal Loans Small Business Screening Digital Identity Employment Data DDA Savings Credit Accts Investment 401K
- 26. • Historical transaction data (typically 12-24 months) • Income report containing attributes: - Direct deposit income - Other income - Average monthly income - Frequency of income deposits - Payor • Verification of account owner Verification of Income
- 27. Verification of Assets • Account balance query across various types: - Checking (credits and debits) - Savings/CD’s - 401K, brokerage account • Historical transaction data details (typically 90 days) • Account balance attributes (typically last 90 days) - Average account balance and trend - Min and max account balance • Verification of account owner
- 28. Prequalification Use across the lifecycle of a lending relationship Underwriting/ Decisioning Verification Credit Risk Modeling Account Review/ Monitoring
- 29. Data flow Multiple Integration Options Checking Investment Account Savings Real-timeAccount Aggregationprocess Access via Modern API, NetConnect, or ATB Report ID Loan Application Consumer
- 35. Jones
- 40. What makes us different? Broad Coverage • 80% certified coverage • Full spectrum of account types High Quality Data • 100% formatted data • Auditable FI Transaction ID’s Compliant Solutions • Delivered by registered CRA • Robust security
- 41. Reimagining Lending Crosses the credit lifecycle; the uses and benefits are wide-ranging: Decisioning Verification Credit Risk Modeling Account Review Prequalification • Increases consumer satisfaction and loyalty • Reduces credit and fraud risk • Broadens loan availability • Accelerates loan underwriting • Improves ability to match consumer to right offer
- 42. Q&A
- 43. To learn more about Experian’s verification of income and verification of assets solutions: - Reach out to your account executive - Call 1-888-414-1120
Editor's Notes
- Online banking is top choice of consumers at 28%, followed by branch banking at 24% 60% of bank customers use online banking at least weekly if not more frequently
- re: Dodd Frank 1033
- Text left, image right slide [uses Title, Text, Image layout] The headline appears in Arial (Experian Dark Blue) at 34pt. If a sub headline is required, it should be manually sized to 20pt. The text has five pre-set levels in 17pt Arial: Level 1 – ranged to the left margin for continuous text; if you require a bold subheading you can embolden this to 17pt Arial Bold Level 2 – ranged to the left text margin with a round bullet, subsequent lines aligning with the text of the previous line Level 3 – horizontal dash bullet, subsequent lines aligning with the text of the previous line Level 4 – round bullet, subsequent lines aligning with the text of the previous line Level 5 –horizontal dash bullet, subsequent lines aligning with the text of the previous line Advancing through the text levels can be done by using the ‘Increase List Level’ and ‘Decrease List Level’ buttons in the ‘Paragraph’ tools on the ‘Home’ ribbon. If your text content exceeds the depth of the text box, you may need to consider creating an additional slide. Inserting an image A squircle picture placeholder has been set up on the slide layout, bleeding off to the top and right of the layout. The placed image should be a square format and the squircle placeholder is 16cm x 16cm. To optimize screen and desktop printed output, it is recommended that images are saved to 100dpi at these dimensions. The brand mark on this slide layout is set up at the correct size and position and should not be altered. The date and footer info can be edited across all slides by using the ‘Header and Footer’ settings on the ‘Insert’ ribbon (do not edit these manually on the individual slides).
- Before we launch into our pitch, is there something more high-level we can speak to around how account agg has been around that then tees up why our evolution is better.
- Text left, image right slide [uses Title, Text, Image layout] The headline appears in Arial (Experian Dark Blue) at 34pt. If a sub headline is required, it should be manually sized to 20pt. The text has five pre-set levels in 17pt Arial: Level 1 – ranged to the left margin for continuous text; if you require a bold subheading you can embolden this to 17pt Arial Bold Level 2 – ranged to the left text margin with a round bullet, subsequent lines aligning with the text of the previous line Level 3 – horizontal dash bullet, subsequent lines aligning with the text of the previous line Level 4 – round bullet, subsequent lines aligning with the text of the previous line Level 5 –horizontal dash bullet, subsequent lines aligning with the text of the previous line Advancing through the text levels can be done by using the ‘Increase List Level’ and ‘Decrease List Level’ buttons in the ‘Paragraph’ tools on the ‘Home’ ribbon. If your text content exceeds the depth of the text box, you may need to consider creating an additional slide. Inserting an image A squircle picture placeholder has been set up on the slide layout, bleeding off to the top and right of the layout. The placed image should be a square format and the squircle placeholder is 16cm x 16cm. To optimize screen and desktop printed output, it is recommended that images are saved to 100dpi at these dimensions. The brand mark on this slide layout is set up at the correct size and position and should not be altered. The date and footer info can be edited across all slides by using the ‘Header and Footer’ settings on the ‘Insert’ ribbon (do not edit these manually on the individual slides).
- Closing slide [uses Holding Slide layout] This slide can be used as a ‘closing’ slide and should not include any additional text or graphics. The same slide layout is used as a presentation opening slide. The brand mark and data art graphic on this slide layout are set up at the correct size and position and should not be altered.