by Erica Gunn
In today’s dynamic financial landscape, the opportunity to offer exceptional products is boundless. Consumers are eager for easy, helpful, and deeply personalized experiences that genuinely empower their financial health. Customer experience has emerged as a critical differentiator, with a staggering 80% of consumers expecting their financial provider to contribute to their financial well-being. Even more compelling, 60% would consider switching providers for better financial education.
Consumers are looking beyond basic loans and accounts. They seek support, advice, and tools to confidently manage their financial lives.
A More Complete Picture: Credit Scores and Alternative Data
While traditional credit reports remain a strong indicator of credit history and past financial reliability, alternative data – data not found on traditional credit reports such as utility payments, rent history, verified employment, consumer-permissioned banking data, and speciality finance data – can help unlock additional opportunities for millions of Americans who possess limited to no credit history, meaning they are considered “thin file” or “credit invisible.”
Alternative data refers to non-traditional financial information that offers insights into how people live, earn, and spend. This can encompass a variety of data points, including:
- Rent payments
- Consumer-permissioned bank transactions
- Utility payments
- Employment and income history
- Investment account data
- By leveraging this diverse data, lenders gain a more holistic view of a consumer.
Transforming the Customer Journey: The Power of Alternative Data in Marketing
Better data leads to better experiences. Integrating alternative data sets into your marketing strategy could significantly enhance marketing and prospecting efforts for lenders looking to grow their business.
For example, investment data can be a goldmine for marketers, offering a powerful tool to identify and engage young and affluent – or emerging affluent – consumers, a customer base that could be big business. The rise of fintech apps has democratized investing, empowering younger generations to take part and prioritize their financial futures at an earlier stage than ever before.
Gen Z consumers are actively engaging with investments, with an average starting age of 19. By incorporating investment data into their marketing strategies, financial institutions can more precisely target these young investors with personalized offers and advice that resonate with their financial goals and life stage. Combining traditional data with alternative data refines audience targeting, leading to remarkable improvements in marketing efficiency and precision—resulting in up to 53% higher conversion rates.
By leveraging investment data to identify and engage Gen Z prospects, not only can firms acquire more new accounts but they can also cultivate long-term loyalty with high-potential consumers and responsible borrowers. This approach shifts the focus from a transactional relationship to one built on understanding, support, and tailored financial guidance.
Want to learn more about how alternative data can help your organization drive growth and improve experiences throughout the customer journey? Check out the eBook, Unlocking Growth Amid Uncertainty.
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Erica Gunn leads Portfolio Marketing for Data-driven Marketing and Consumer Engagement solutions at Equifax. Erica has spent her career in marketing across the data and technology industries. A B2B specialist, Erica drives strategic go-to-market and demand growth across the full marketing funnel.
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