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Personalization Means Fast Credit

We see the effects of AI on marketing as it grows more and more personalized. The data science that makes it work happens in places like Experian’s DataLabs.

Eric Haller, EVP and global head of Experian DataLabs spoke to me about using machine learning and data discovery. Experian leverages data drawn on 160 million profiles that are updated daily. That data is passed on the credit card issuers who can use it to personalize their marketing to those profiles. 

Haller explained that “unsupervised machine learning can be used for clustering and segmentations.” That means that the transactional database built up from a customer’s use of a credit card is what determine the individual’s category, rather than an a priori classification.

Building on that usage data allows marketers to design targeted offers that are “relevant” to the interests of customers as demonstrated by their previous transactions. They review “card usage to determine which merchants” would be of interest to particular customers “even if they never went there before.”

Haller offered the example of card “transaction that show” the customer is a DIYer would get promotions for stores that sell “tools, lumber or auto parts,” including “co-branded” offers between the card and such merchants  because that person has indicated that he is “likely to respond to that.”  

While Experian build out these personalized profiles, Haller says, they “don’t know the identity of these people, though the banks do.” Experian only looks “at transaction data,” while the banks issuing the cards have the ability to connection “them to individuals or small businesses.”

Experian has also built on data it has gathered about consumer preferences to develop a fast track to credit approval it calls Text for CreditTM.  In a survey they conducted, they found “12 percent of consumers said they have walked away from a purchase because it was taking too long to get approved for credit, while 16 percent have walked away because the person in front of them was applying for credit.”

To remedy the problem of sales lost due to delay, Experian developed a solution that works simply and quickly. Those who wish to apply for a store credit card or to qualify for financing for a car simply follow these steps:

  • Text a keyword such as “CREDIT” to a short code supplied by a merchant or a credit issuer, the same way some retailers now allow consumers to “text to buy”
  • Receive a text message response that takes them to a hosted website where they can apply, review credit offers, and receive an instant decision
  • Fill out minimal information (because the device credentials of their phone automatically transfers much of the data that typically has to be filled into longer credit applications).

Immediate access to the credit is given via a barcode or account details sent to their device upon approval, which should take just minutes.

As Experian explains in this video, the idea is hit the “sweet spot” for marketing by closing the deal on credit cards or financing on the spot for customers applying on their phones while in the store or on the way to the dealership.

Haller said: It takes the pain out of “that whole acquisition, provisioning, validating” process by making it “super convenient on mobile devices.” That instant and private process removes the “risk of being declined at register.” It also provides the satisfaction of curiosity at the car lot” when customers can ascertain what level of financing they qualify for “on the spot without having to go to back office and talk to loan professionals.”

 This “really puts power in the hands of the consumer,” Haller says. “That’s the magic of it.”

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