Profit From Approval Rate Improvements

Evidence and data. Interviewees mentioned that with Experian Ascend Platform, their organizations experienced improvements in approval rates due to enhanced data access and credit-risk modeling. Additionally, they explained that marketing capabilities allowed them to refine their campaigns, contributing to higher conversion rates. Interviewees said Experian Ascend Platform contributed to improvements in approval rates in the following ways:

• Enhancing credit risk modeling. The chief credit officer at a fintech said Experian Ascend Platform’s model-building tools provided insights into how applicants who might have been previously declined were performing elsewhere, further refining their organization’s decision-making process. They said: “There is a benefit to modeling off others’ data. … Maybe you want to check if you’re doing the right thing when dropping some people for credit reason and you want to see how they perform elsewhere. With Experian Ascend Platform, you can look at outside performance.”

• Increasing predictability and model accuracy. Interviewees said Experian Ascend Platform contributed to improvements in predictability and accuracy of credit decisions. The chief credit officer at a fintech said: “[With Ascend,] everything is standardized. Even though we pull the data ourselves at time of application, we don’t have to worry about the accuracy of the data. We are sure that they’ve gone through the checks to make sure the data is correct.”
  
  The credit manager at a car leasing company also described the improvements in accuracy resulting from Experian Ascend Platform: “We now get a lot of data back, which helps us understand why and how customers are passing and failing automated assessments. It gives us a lot of confidence that the affordability assessments are accurate and working to a high degree of accuracy.”

• Delivering consistent improvements. The credit manager at a car leasing company highlighted how Experian Ascend Platform contributed to improvements in approval rates for their organization: “Before, our approval rate was 60% overall. Since we’ve switched over to Experian Ascend Platform, we’re seeing a consistent return of around 66% approval rate, which is brilliant.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to adopting Experian Ascend Platform, the composite previously processed 250,000 loan applications per year.

• The composite deploys Experian Ascend Platform for 40% of its portfolio in Year 1, 60% in Year 2, and 90% in Year 3.

• The composite’s approval rate prior to adopting Experian Ascend Platform was 25%.

• With Experian Ascend Platform, the composite’s approval rate increases by 3% in Year 1, by 8% Year 2, and by 12% in Year 3.

• The composite’s improved approval rates with Experian Ascend Platform are 26% in Year 1; 27% in Year 2; 28% in Year 3.

• The composite’s average loan amount is $5,000.

• The composite’s operating margin is 16%.

Risks. Risks that could impact the realization of this benefit include:

• The organization’s previous approval rate.

• The organization’s average loan amount.

• The organization’s operating margin.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $5.6 million.

Accelerated Business Growth

Evidence and data. Interviewees said that with Experian Ascend Platform, their organizations processed more applications due to enhanced customer insights and more targeted marketing campaigns. Additionally, they explained that Experian Ascend Platform’s automated decisioning capabilities allowed their organizations to overcome previous challenges in scaling application reviews without the need for added overhead. As a result, the organizations saw an increase in the number of loans originated, which contributed to business growth.

• Facilitating expansions into new market segments. The CEO at a credit union described how Experian Ascend Platform’s data and insights allowed their organization to access new market segments, hence contributing to additional loan applications: “Experian Ascend Platform has allowed us to take a deeper dive into markets we wouldn’t necessarily have looked at initially. It’s allowed us to now look at areas that are potential targets.”

• Refining audience targeting. The same interviewee explained how improvements in data quality gained from Experian Ascend Platform helped their organization deepen its understanding of existing customers and new customer prospects, which ultimately drove more targeted marketing campaigns and contributed to increasing the volume of loans. They said: “We no longer have to do a scattered approach with a few hundred thousand pieces per campaign. The cost of deploying a campaign that size versus the results [is] typically unbalanced. … Now, we can do this for a tenth of that cost and produce campaigns of 10,000 names that will get a 30% to 40% conversion rate compared to before when we would get a 2% conversion rate.”

• Improving ease of building and adjusting decisioning strategies. The senior credit risk manager at a bank said: “Implementing Experian Ascend Platform has allowed us to originate more loans because it’s allowed more flexibility in our strategies, which has meant we can do a higher volume of loan originations. … There’s been a 5% uplift on all loan originations numbers across all our portfolios.”

• Scaling up operations with automation. The credit manager at a car leasing firm described the challenges their organization faced with scalability: “Before, we were unable to scale up. We had reached a limit of what [Experian] PowerCurve could do on-premises. We were constrained by staffing resources. The only way we could scale up was to recruit more people or train more people in that role, which takes a long time to get up to speed on.” They added: “[With Experian Ascend Platform,] we’ve halved our processing time. We can now double the number of deals that we can underwrite in a day manually. … [Overall,] we estimate that we’re seeing 10% more business today than where we were last year, and we think that’s purely because we have an automated solution. A lot of brokers like to work with funders that have automated solutions and therefore will get quicker decisions back.”

Modeling and assumptions. Based on the interviews, Forrester assumes the volume of loan applications the composite organization processes increases by 5% in Year 1, by 10% in Year 2, and by 16% in Year 3.

Risks. Risks that could impact the realization of this benefit:

• The organization’s volume of loan applications processed prior to using Experian Ascend Platform.

• The organization’s approval rates.

• The share of the organization’s portfolio to which Experian Ascend Platform is deployed.

• The organization’s operating margin.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $8.2 million.

Improved Decisioning Efficiency With Automation

Evidence and data. Interviewees said that prior to using Experian Ascend Platform, credit decisioning required their organizations to perform extensive manual efforts, including searching and checking data from multiple sources. But they explained that Experian Ascend Platform’s automated decisioning streamlined these processes by consolidating data into a single report for review and that, in some cases, it eliminated manual intervention with auto-approve or auto-decline. As a result, the interviewees’ organizations experienced improvements in decisioning efficiency and significantly reduced the time needed to render decisions.

• Compiling credit reports. The senior credit risk manager at a bank said application reviews previously took between 30 minutes and 1.5 hours depending on the loan complexity, and they described how Experian Ascend Platform’s credit report compilation functionality streamlined decisioning: “Before, the credit decisioning team would have to link up different sources of information to do manual bureau checks and manual affordability calculations and assess income on an isolated, manual basis. Doing all of this in isolation on a check-by-check basis is timely and open to human error. … Experian Ascend Platform has allowed us to onboard everything on one place, consolidate all that application detail together on the front-end system, and feed all that information into Experian Ascend Platform to run credit checks around it and present that story back.”

• Improving loan underwriting. The credit manager at a car leasing firm described the how Experian Ascend Platform contributed to efficiency improvement across the loan underwriting process: “Before, it would take up to 20 to 30 minutes to underwrite a single case, depending on its complexity. … Now, all that data is in one place and it’s all on an easily consumable and digestible format, [so] the actual processing time manually has gone down massively to 10 to 15 minutes.”
  
  The CEO at a credit union outlined how little savings added up with scale: “We process 100,000 loans per year. On average, a credit report review would save 5 minutes at the minimum with Experian Ascend Platform. So, we save about 500,000 minutes a year.”

• Automating decisions. Interviewees said Experian Ascend Platform rendered instant approvals or declines for customers. The senior credit risk manager at a bank said: “Customer onboarding is now instant. The broker puts all the information into our digital application form, which then calls out to Experian Ascend Platform. It’s [done in] real time, and the decision comes back instantly as to whether that application is good to go or not.”
  
  The CEO at a credit union elaborated on how automated declines helped their organization save time from manual tasks: “In a decline situation, nobody has to review it, which is even more time saved. … Experian Ascend Platform immediately does that on our side and issues the appropriate compliance documentation through the Equal Credit Opportunity Act, alerts, and feedback to the consumer.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to deploying Experian Ascend Platform, the average time the composite spent per decisioning was 30 minutes.

• The fully burdened hourly salary for a loan underwriter FTE is $33.

• With Experian Ascend Platform, the composite fully automates 25% of decisioning in Year 1, 31% in Year 2, and 39% in Year 3.

• The composite’s decisioning effort reduction for applications partially automated is 33%.

• The composite has an 80% productivity capture rate, which means 80% of the time saved through efficiency improvements is used for productive work.

Risks. Risks that could impact the realization of this benefit include:

• The complexity of the organization’s credit products.

• The average time the organization spends per application decisioning.

• The organization’s previous rate of automation.

• The salaries of loan underwriter employees.

• The share of applications the organization fully automates with Experian Ascend Platform.

Results. To account for these risks, Forrester adjusted this benefit downward by 15%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $2.7 million.

Improved Marketing Campaign Productivity

Evidence and data. Interviewees said their organizations used Experian Ascend Platform to deepen customer understanding, which enabled them to craft highly targeted audiences based on customer profile and behavioral attributes. They pivoted from running broad, seasonal campaigns to smaller but higher-frequency ones, improving marketing effectiveness and reducing campaign costs. Interviewees described how Experian Ascend Platform contributed to their marketing teams’ productivity improvements:

• Deepening customer insights with analytical tools. The CEO at a credit union said: “Experian Ascend Platform took our existing portfolio and did historical trend analysis on our performance. We’re able to identify trend patterns and consumers that we underserved who we could have potentially offered a higher credit amount to.”
  
  Similarly, the chief credit officer at a fintech shared: “Using the data and attributes in the [Ascend Analytical Sandbox] gave us real value. When [my organization] started, we didn’t have our own data. [For example,] even if you’re in a large company, there are benefits to modeling off other people’s data when you want to expand to the subprime segment.”

• Improving speed of campaign deployment. The CEO of a credit union said: “The biggest benefit for us has always been how fast we can deploy campaigns and the ability to get very precise with our target audience. We know who our customers are, and we know how to apply those filters through Experian Ascend Platform to narrow down to those consumers. I’ve been able to target a lot better with a lot less.” The interviewee shared that campaign deployment lead time shrank from three months to two days.

• Refining targeting. The same interviewee shared: “We run a lot more campaigns now, in the range of 10 to 20 per year. But they’re a lot smaller and a lot more targeted. We no longer have to produce a list [of half a million names] anymore. We can produce a 10,000-name list and get a much better conversion rate compared to our old method.” They said refining campaign targeting also raised conversions.

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to adopting Experian Ascend Platform, the composite ran one large-scale campaign each quarter.

• Each of these campaigns required a marketing team of four to each spend 12 days on planning and execution. This totaled 384 person-hours per year.

• The composite uses Ascend to deepen customer insights and run highly targeted campaigns. It experiments with three small-scale campaigns in Year 1, and it expands to eight and 10 campaigns in years 2 and 3, respectively.

• Each of these targeted campaigns require 67% less effort to plan and execute.

• The composite has a 50% productivity capture rate, which means half of the time saved is put back into productive work.

• The composite’s campaign channel includes direct mail. Using Experian Ascend Platform, it refines its mailing lists by 90%, which saves $1.25 per piece on printing and mailing costs.

Risks. The value of this benefit may vary, depending on factors including the frequency and scale of existing marketing campaigns, marketing channels, and an organization’s marketing effectiveness.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $610,000.

Reduced Default Costs

Evidence and data. Interviewees said that with Experian Ascend Platform, their organizations rejected fraudulent applications and improved credit risk modeling, which reduced default rates. Interviewees described how Ascend contributed to improved loan quality:

• Enhancing credit risk insights. The CEO of a credit union said: “Experian Ascend Platform gave us insight into the consumers who we were overextending credit to that we shouldn’t have. This resulted in a 20% drop in default rates.”

• Eliminating manual errors. The senior credit risk manager at a bank said: “We’re able to process our unsecured lending decisions and fraud items a bit quicker and slicker through our other hosted systems. … When you’ve got human error occurring, you have to go back and rework those cases when that human error becomes an issue later down the lifecycle of that mortgage. Implementing Experian Ascend Platform has removed some of that rework and allows it to flow through better.”

• Reducing fraud. The credit manager at a car leasing firm said the time to value of Experian Ascend Platform’s fraud solution is fast: “We’ve seen a massive increase in avoided fraud. It has pretty much paid for itself 10 times over in the first six months of operation. In avoiding applications that we believe to be suspect or fraud, we have saved over £500,000 worth of business by not underwriting that business.”

• Reducing chargeback and associated costs. The fraud manager at an airline described the impact of improved fraud detection in their organization’s credit card transactions. They said: “A lot of fraud slipped through because of the high volume of work. There is no more manual investigation now. This year, we’ve had four chargebacks among our 4.6 million transactions, down from 6,660 cases in 2016. And we saved a lot of person-hours just on managing chargebacks. … The biggest benefit apart from the cost saving on the actual chargebacks is the reputational damage we avoided by not having created card fraud.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• Prior to using Experian Ascend Platform, the composite’s default rate was 3%.

• With Experian Ascend Platform, the composite’s default rate falls by 20% in Year 1. This rate decreases by 5% year-over-year, yielding reductions of 26% and 32% in years 2 and 3, respectively.

• In the event of a default, the composite loses an average of 80% of the loan amount.

• With Experian Ascend Platform, the composite reduces the time spent on debt collection as its default rate decreases. On average, the collections team avoids 4 person-hours per case.

• The fully burdened hourly rate for a member of the collections team is $31.

Risks. Risks that could impact the realization of this benefit include:

• The organization’s default rate and factors leading to default (e.g., credit-risk appetite, economic environment, etc.).

• The organization’s fraud-prevention strategy and processes.

• The organization’s collections strategy.

Results. To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $3.2 million.

Legacy Consolidation Cost Savings

Evidence and data. Interviewees said moving to the cloud-based Ascend Platform enabled their organizations to reduce operational costs associated with maintaining on-premises solutions.

The credit manager at the car leasing business said their organization said on IT labor by migrating to Experian Ascend Platform: “By removing the on-premises solution, we’ve reduced the need for expertise on-site — the cost equivalent of one headcount in the IT department — to manage that solution and manage upgrades, updates, and security patches.”

Modeling and assumptions. Based on the interviews, Forrester assumes the following about the composite organization:

• By consolidating its legacy systems, the composite reallocates one IT FTE.

• The fully burdened annual salary for an IT FTE is $93,000.

• Moving to the cloud saves the composite $30,000 annually on maintenance and update fees.

Risks. Risks that could impact the realization of this benefit include:

• The complexity of the organization’s system landscape.

• The organization’s IT maturity.

• The organization’s change management strategy and processes.

Results. To account for these risks, Forrester adjusted this benefit downward by 10%, yielding a three-year, risk-adjusted total PV (discounted at 10%) of $275,000.

Unquantified Benefits

Interviewees mentioned the following additional benefits that their organizations experienced but were not able to quantify:

• Improved customer and broker experience through faster decisioning. Automation reduced friction during application and accelerated decision times for brokers and customers alike. The credit manager at a car leasing firm said: “We’re certainly seeing more applications from certain brokers who weren’t using us this time last year, and there’s no real change in our pricing structure or strategy. So, we can only assume that they’ve started using us because either more consistent decisioning or they’re getting faster decisioning — both of which Experian Ascend Platform enables.”
  
  The senior credit risk manager at a bank also described the impact of Ascend on their organization’s response time: “[With Experian Ascend Platform,] we were able to be more automated, reduce time to offer on our mortgages, and even offer same-day decision for our small and medium enterprise customers.”
  
  The credit and collections manager at a consortium highlighted the impact of Experian Ascend Platform on their organization’s customer experience: “Today, we do a CES (customer effort score) survey, and we have reached much more significant results after Experian Ascend Platform was implemented.”

• Reduced risk at origination. Each interviewee mentioned that Experian Ascend Platform helped their organization mitigate risk by providing high-quality data analysis and reducing manual intervention, thereby minimizing the potential for human error through automated decisioning. The senior credit risk manager at a bank said: “We’re now less open to manual error. Building our scorecard and affordability rules in one place allows us to show how these calculators are being used, monitored, and maintained. Previously, we would have spreadsheets doing some of that, which was prone to human error. As a result, we’ve tightened up the risk management framework around the systems.”

• Improved compliance and audit process. Interviewees noted that Experian Ascend Platform enhanced the transparency and traceability of their organization’s credit decisioning process, making it easier to conduct audits. The credit manager at a car leasing firm said: “[Experian Ascend Platform] has made our response to audits a lot easier because we’ve got a lot more transparency in the data that’s coming back, and Experian did a huge amount of work to help us understand regulated lending and affordability assessments. … From a compliance perspective, that’s absolutely golden to be able to go into any kind of compliance audit and say, ‘I have a high degree of accuracy and here is all the evidence to prove it.’”

• Reduced risk of regulatory fines. Interviewees said Experian Ascend Platform reduced the risk of fines from fraudulent transactions and potential loss of merchant status for their organizations. The fraud manager at an airline noted: “Our big concern before was fraud escalations. With credit card fraud, you have to deal with the issuers. And if you exceed a certain threshold, they put you under review. If you don’t bring your number of frauds down, you start incurring penalty fines. Eventually, if the fraud keeps escalating, then there is a risk of being discontinued and losing the merchant status. Then, if all your sales are online and you can no longer proceed credit card payments, you just have to close your doors.”

• Sustainability and ecological footprint benefits. Interviewees noted that Experian Ascend Platform reduced the need for physical documentation, minimized paper usage, and lowered carbon footprints. The fraud manager at an airline said: “With each fraudulent chargeback, you have to print out three to four pages. We used to get 6,600 chargebacks per year, [and that’s] a lot of paper compared to [what we use for] the four frauds we now have [with Experian Ascend Platform]. And [we also save on the cost of] equipment, [including] the ink for the printers, the mailing, and the electricity use of printers. Currently, we are totally paperless.”

Flexibility

The value of flexibility is unique to each customer. There are multiple scenarios in which a customer might implement Experian Ascend Platform and later realize additional uses and business opportunities, including:

• Future-proofing lending strategies with enhanced market intelligence and competitive benchmark. Interviewees mentioned that Experian Ascend Platform provided their organizations with access to comprehensive market data and analytics, enabling them to benchmark performance against peers, identify market trends, and make informed strategic decisions. This allowed them to test new products and access new markets and segments with greater agility and ease, which further enhanced their offerings.

  • Monitoring markets. The CEO at a credit union said, “We use Ascend Marketing to monitor the heartbeat of existing markets as well to see if they're expanding or shrinking.”
  • Benchmarking against competition. The chief credit officer at a fintech described how Experian Ascend Platform helped their organization benchmark against competition. They said: “We can use [Experian Ascend Platform] to track our performance relative to the external environment. We use it as a gauge of how well we’re doing relative to the market, how our performance compares to peers, and how we can improve.”
  • Future-proofing lending strategies. The senior credit risk manager at a bank said: “[Experian Ascend Platform] is allowing us to enhance our offering moving forward because it’s more efficient and it’s easier to build strategies within, and we’ve got the knowledge of building the strategies quickly in the system. It’s an enabler for us to future-proof credit decisioning and build on these strategies moving forward. [For example,] if we wanted to enter into near-prime markets on mortgages moving forward in the future, the fact that we’ve now got this infrastructure set up allows us to be more agile and move into those markets more easily than [we could] have previously.”
  • Launching new products. The credit manager at a car leasing company noted: “Experian Ascend Platform allows us to launch new products or expand to a new market faster than the previous on-premises solution because we are in control of Experian Ascend Platform strategy. With the assistance of their design strategy, we can design what we want to do, we can test it in the design strategy, and we can deploy it within hours. Previously, if we wanted to make that kind of change [on the] front end involving our IT department, we would be involved in weeks of development, discussions, and testing.”

Flexibility would also be quantified when evaluated as part of a specific project (described in more detail in Appendix A).