‘With Boost, we had to break things’: Experian’s Gregory Wright

The evolving credit bureau

More and more, the way I think about how we drive innovation and new solutions to market is not only through data, but also through advanced analytics. Not just your traditional analytics, but through machine learning, and AI, and all that rests upon having really world class technology platforms. It includes having cloud-based solutions, leveraging the power of the cloud, and having easy integration points through modern API's.

It really is changing how consumer credit works, how people interact with their lenders, how they interact with getting the right kinds of products. When we think about who we want to be as a credit bureau, we want to be the consumer's bureau. That was a mission that our CEO, Brian Cassin, set us on more than five years ago.

More focus on the consumer

More and more, we think about being a B2B2C player, where at the end of the day, we're enabling our lenders to serve the consumer at points in their life when they have really big, important decisions, like buying a house, buying a car, maybe getting their first job, maybe getting their first apartment.

One of the biggest changes in consumer expectations is things like smartphones, instant access to apps and cloud based solutions, where things happen at the speed of your thumb. You expect that to be available in your pocket, 24/7 -- not just thinking about which hours the branch is open. So, we now have to enable that for our lenders, and our financial institutions and our landlords, anytime a consumer wants to engage.

Hiring for the future

I'm not your traditional financial services credit expert (although I've had to become one in this role). My background is more from Silicon Valley. I spent eight years at Intuit. I ran teams for product and design and marketing for small business and direct to consumer products, like QuickBooks and mint.com and Quicken. And there, I really learned how to become customer obsessed and really understand what the job is that we're trying to solve.

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I've been able to translate that into thinking through, what the consumer is ultimately trying to do through their lender or through their landlord or through whatever job they're trying to get done. And then re-engineering how we accomplish that through data and analytics and technology for our lenders and for our financial institutions to create the best consumer experience possible.

When I joined the team at Experian more than four years ago, you really had to think differently about how the product team partners with our development and engineering teams. We were going through a transformation to agile development and the partnership and collaboration between sales and product and engineering had to evolve as we went through that process. Who you bring onto your team also changes -- people who have a mobile-first mindset, people who are more entrepreneurial have to balance with the technical product managers, with a lot of the folks that we already had on a team, who were credit domain experts and client-facing, who really understood our needs of our clients. We were probably more overweighted towards financial services, client experts and domain expertise. And so, I've evolved the team, bringing on more agile development processes, as well as having product managers who can engage in that agile and innovative process. It's been a lot of fun.

Consumer-permissioned data

It goes to the heart of what it means to be the consumer's bureau. If you think about traditional credit reporting agencies, like traditional credit bureaus, you don't necessarily see them as thinking about the consumer journey, the consumer experience, but that's really the challenge that we put ourselves to. I think what you see more and more in today's world is consumers want to control the access to their own data, they want to be in the driver's seat. And we want to enable that.

The vast majority of connections to long-tail banks is still through username, password -- credentials. But we're moving into a new world of more federated sign-on, new tokenization and more secure and direct connections to banks. I'm excited to see where that goes. Because I think it's a future that will provide even more control for the consumer, if we go about it in the right way.

Getting consumers to take part

When I came to the credit bureau, I thought long and hard about how to bring a consumer-permissioned model to the credit bureau. There have been ideas bouncing around within Experian for more than 10 years about having consumers contribute data to their credit report to improve their credit access to provide a more holistic, comprehensive view of the credit report.

The reality is, it was really hard. There's a lot of regulations you have to work through, there's the technology of the credit report itself that we're still running on relatively legacy technology and a lot of barriers. And so that's what I love about innovation. Innovation is all about driving through barriers, questioning the way we always did things, and seeing if there's a new way we can solve a job for consumer.

We developed a product called Experian Boost. And if you watch any type of live sports, you've probably seen a commercial for Experian Boost, and you may have seen our purple cow. But behind all the marketing, which is awesome, is really a fundamental change in how we view the credit report itself: that consumers should be able to provide a more comprehensive view of their financial life. And that should improve lenders' ability to lend to them because they see a more complete financial picture.

Excitement around Boost

One of the ways that we challenged the status quo is Experian has been trying to get utility providers, mobile carriers, and TV and cable providers to furnish data like banks do to the credit bureaus. Historically, they just have not done that. And so that data, your bill, your positive bill payment history is not part of your credit report, for the most part.

Now, we showed through advanced analytics that positive utility payments, on a regular basis, actually do show that you are a better credit risk. When we added in the positive bill payment history to their behavior, you actually see that the consumer behaves at a higher credit score. We wanted to make that available to all consumers, and we wanted to do it for free.

You can go to Experian Boost, add your bank account where you pay your bills. And when you do that, we we get your bank credentials, we download 24 months of bank statement data, which is read only. And then we categorize it and find all your positive bill payment history, whether it's utility bills, your water bill, your electric bill, your cell phone bill, your cable TV. Now we've added Netflix and Hulu. You can add that directly to your credit report. It's not added as a supplement -- it's added as an actual trade line to the credit report itself.

To do that, we had to break a lot of things: we had to be able to instantly add new data to your credit report, which if you know anything about credit reports, generally that's updated on a monthly basis. So now, in real time on a phone, you put in your bank credentials, and within minutes, it's added to your credit report. We had to instantly recalculate your FICO score, and send it back to you. And so again, within minutes, you can connect your bank account, add your trade lines that are utility payments and cell phone and then instantly see the improvement to your credit score, which we call Experian Boost.

We now have had millions of people connect their bank account information to Experian Boost, and over two and a half million have seen their credit scores go up. Basically, about two thirds of the time someone will see an improvement in their score, because if you think about it, this is positive bill payment data. It's just you paying more bills on time. And the best part about it is as a consumer, you are completely in control.

Expanding credit to more people

We also work very closely with lenders. 89% of lenders believe that harnessing and using extended FCRA data, or what people call alternative credit data, acts as a way to serve more clients and serve more consumers. Especially when you think about thin files.

We've invested in and acquired assets like Clarity Services, which is an alternative financial services firm that serves the payday lending and short term installment loan space, with really accurate credit data that doesn't show up on your credit report. We have other assets we've acquired over time, like what we call the Rent Bureau, which is actually looking at and collecting rental history. Paying your rent on time is actually another really great credit determinant. We're looking at how we can leverage different types of data assets. And then when you combine the alternative data assets or extended FCRA data assets with advanced analytics, that's where you can really drive up predictiveness.

Looking at into the near future

We've seen fraud tick up. During the pandemic, we launched a new product that we're excited to get traction with some of our largest clients. It's called Sure Profile. It's the first time the industry has combined the traditional credit report itself with an assurance that this is an authentic identity. Fraudsters create identities out of pieces of other identities. And then they use that and cultivate that to then, nine to maybe 12 months later, breakout. They might have stacked up personal loans or credit cards or other things and then leverage those all at once. They take all the money, and then they disappear.

We've been able to use advanced analytics and all of our various data assets to figure out whether a credit report actually represents a real person. And we assure that this is a real person. About 90-95% of the time, we can say, yeah, this is a real person. And in fact, we're so sure of that, if we get it wrong, we can negotiate with lenders that will actually take part of that credit loss if they actually were a victim of synthetic identity. So it's a pretty game-changing approach to thinking about credit risk and fraud and combining that in the top of the funnel, rather than in a lot of projects that happen after the fact.