Category Archives: Banking

FHA eSignature

FHA Expands Acceptance of eSignatures

The Federal Housing Administration (FHA) recently expanded its acceptance of electronic signatures (eSignatures) on documents associated with mortgage loans.  The new policy allows for eSignatures on origination, servicing and loss mitigation documents, as well as FHA insurance claims, REO sales contracts and related addenda.  eSignatures are still not allowed on the mortgage note itself, but FHA said in a press release that it plans to begin accepting eSignatures on forward mortgage notes at the end of the year.

This move by the FHA changes the entire mortgage process and is leading the way for industry-wide acceptance of electronic signatures.  An electronic process offers obvious benefits to borrowers and lenders in speed and convenience, but it also provides compliance benefits for lenders.  For example, an electronic process automatically gives lenders a time stamp so they can easily validate that documents were delivered on time.  The time stamp is invaluable in light of the CFPB’s new rule stating that all closing documents must be delivered 72 hours prior to closing.  A fully electronic process makes it easier to meet the deadline and provides documentation that it was met.

FHA now accepts eSignatures on:

  • Origination, servicing and loss mitigation documents
  • IRS Forms 4506-T and 4506T-EZ
  • FHA insurance claims
  • REO sales contracts and related addenda
  • Mortgage insurance endorsement documents
  • HUD real estate owned documents

Tapping Underbanked Customers Boosts New Accounts

Consider the impact of expanding demand deposit accounts at your bank by 25 percent. More than one in four households (28.3 percent) are either unbanked or underbanked, according to a 2011 FDIC survey. But, with an improving economy and expanding job market, many of these potentially profitable households are looking to re-enter the financial mainstream.

The impact of acquiring these consumers can be considerable, if you can identify and target the most credit-worthy among them. With advanced alternative data, you can.

25 million opportunities

Leveraging the power of nontraditional data, the Equifax Insight Score for Retail Banking[AM1]enables financial institutions to risk-rate many consumers with little or no credit. It leverages relevant and predictive data such as payment histories on cable, cell phones and utilities supplements to ‘fill in’ critical information missing on no-file or thin-file account applicants. But it doesn’t stop there. There are additional data sources that provide valuable insight for this segment. You can have insight into employer-provided income records that allow precise verification; data and value regarding U.S. investment assets, which ensure opportunities for cross-selling aren’t missed; and residential property value information that allows for practical risk as well as potential profit evaluation.

When you consider the innovative data now available, financial institutions that are simply relying on credit scores and negative information are overlooking hidden opportunities.

Scoring the most new customers

Evaluating underbanked or unbanked potential customers requires the cross-referencing of multiple databases. It’s not just a yes-or-no check-off list. With a robust and flexible technology platform, such as Equifax’s InterConnect, a multidimensional view of new account applicants can be developed. It offers real-time access to millions of consumer records, allowing for efficient point-of-sale segmentation of new checking account customers.

With powerful information and technology, the related costs and time requirements of account openings can be reduced. Not only that, but the customer experience is enhanced, and the possibility of future charge-offs can be reduced.

Good customers who might have been turned down before can be on-boarded with confidence, initiating a profitable relationship that strengthens a bank, its customer base and community.

[AM1]Link to white paper:


Customer Retention Opportunities Your Business Might Be Missing

While many of your best marketing tactics might be targeted toward gaining new customers, never underestimate the power of customer retention. Not only are current customers typically less costly than new customers, but they might also be a gold mine for cross-selling opportunities. By looking at the whole picture to find out what your customers really need, you can reduce the chances they’ll look elsewhere for products and services. This keeps them in your portfolio and away from your competitors. Using big data and segmentation can help you develop strategies to achieve this that you may not have considered before.

To keep your customers, you need to think like your customers. They consider more than just their bank accounts or credit scores. They understand their current financial status and their goals for the future. With intelligent data, you can look at your services from a customer’s point of view. If a customer has been spending a lot of money on home repairs, for instance, you could extend an offer of a home equity line of credit at the right time. Not only does this offer healthy, safe growth, it assures your customer that you’re dialed into his or her needs.

Not every customer is going to be a home run, so you should aim some customer retention tactics specifically at the most profitable clients in your portfolio. By matching profitable services with customers who are most likely to utilize them, you show some of your most important clients that you can predict their needs. The right data can help identify those customers who are most likely to use services, and who have the highest probability of success.

Finally, timely, relevant marketing materials can be an excellent retention tool. Think about it: Your customers are likely to receive a number of marketing materials — mailers, e-mails, online ads and more — from banks hoping to cast a wide net and snare new business. When your marketing materials are in line with your customer’s actual financial situation, there’s a better chance for response. By segmenting your current customers based on spending, credit and propensity to open new accounts, you can send the right materials at the right time to keep your customers using your services — not your competitor’s.


Defining Big Data and its Effect on Your Growth

It’s one of those industry buzzwords that you might have heard but not fully understood: big data. And while it might sound intimidating, there are practical ways to leverage customer insights and intelligence to grow your business. Unfortunately, that data can be exactly as the name implies: big. The sheer size and volume of information can lead you to feeling confused about how you’ll harness the intelligence and use it for growth. By gaining a better understanding of what data is readily available and how to use it, you’ll be better equipped to apply it to your own portfolio growth.

The Gartner Group defines the term “big data” as “high volume, velocity and/or variety of information assets that demand cost-effective, innovative forms of information processing that enable enhanced insight, decision making and process automation.” Breaking down the three v’s here helps to put it all into perspective.

Volume: Due to the sheer volume of information, processing is required to break down the data so that it can be applied to the right customers at the right time. One way for the information to be processed is through segmentation, where a company creates criteria to essentially group like terms and behaviors to reveal like customers. That way, marketing tactics are used to target the right group with the right offers, products and services for the best chance of success.

Velocity: Speed is of the essence when it comes to big data. That’s because the world of consumer finance is constantly changing — almost as fast as customer behavior itself. Whether an existing customer is looking to renovate his or her basement or a prospective client has a high propensity to apply for a new home loan, having access to the fastest and most recent applicable data means you’re the first one on the scene and have the upper hand when it comes to creating solutions and competing against other lenders or organizations.

Variety: You need much more than a credit score to predict a customer’s behavior, which is why one of big data’s main advantages is its variety. Not only do you gain access to basic information such as credit score, credit history and employment history, you have other intelligence, too, from investable assets and investment history to utility payments and property data. The result is a more complete customer profile that you can use in your targeted marketing efforts.

Big data isn’t a trendy buzzword — it’s a viable way to increase your efforts and grow your business. By gaining complete customer intelligence, you gain an edge that allows you to cross-sell more effectively, develop comprehensive retention strategies and target and track your marketing efforts. Get the upper hand against competitors with timely and comprehensive information that increases your growth and complements your success.

ATM banking

Customer Lifecycle: Don’t Lose Your Customers at These Critical Points

The future profitability of new banking customers is often determined the moment they walk through the door. While a lot of effort goes into protecting the client experience around opening that first account (and rightly so), it is also critical to assess the household’s potential and capture as much as possible on day one. Unfortunately, for most financial institutions data is lacking for new customers. This information can mean the difference between a “drive-through” client with a minimal profit profile and a customer who is fully engaged with an institution’s banking services.

Initiating a profitable relationship

Identifying affluent clients enhances revenue opportunities. Can it be that simple? Not without real-time detailed client profiles. Traditional account screening aside, detailed analytics allow customer relationships to begin with their proper placement into relevant accounts and services. Without this data, it’s just another basic checking account. Cross-selling opportunities can be lost.

Using big data at a small bank

The term “big data” is heard so often these days. Many consultants and suppliers in the financial services industry focus on larger institutions when they ‘pitch’ their big data strategies and solutions.

Equifax Retail Banking solutions give financial institutions of every size access to unmatched data, analytics and technology that provide:

  • The ability to reduce fraud and operational costs
  • Information that helps minimize customer attrition
  • Data to boost customer satisfaction
  • An enterprise-wide unified view of customer wallet share

Equifax has the data and, more importantly, the tools to transform that data into consumable insights for institutions of all sizes. Big data presents opportunities for banks to better assess household potential.


Segmentation Strategies: Defining Your Existing and Potential Customers

Each customer is an individual. When it comes to spending habits, credit propensity, investable assets and spending styles, lumping all your customers into one marketing strategy can do them — and your business — a disservice. Instead, segmentation strategies that categorize existing and potential customers based on their spending, saving, credit and asset characteristics can help ensure you get the right offer to the right group at the right time. Whether you’re looking to cross-sell to your existing client database or to expand with new customers, segmentation can help you create targeted marketing solutions for efficient and timely growth.

For existing customers

When you already enjoy a healthy customer portfolio, your main concern isn’t only keeping those existing customers happy but making sure first that they come to you for new products and services and, second, look to you for solutions before going to one of your competitors. Putting segmentation strategies in place can help you achieve both goals and continually keep your customers’ individual needs in mind.

With intelligent data from Equifax, you can easily categorize your existing customer portfolios into segments based on spending habits, lifestyle changes, assets and other demographic information for smarter, in-budget marketing that targets their current needs. Take existing customers who tend to spend online. By grouping similar customers together, you can send out offers for products such as online ID protection.

For new customers

When competing for new business, remember that potential customers are usually attracted to timely, organic marketing methods. A renter, for instance, will likely toss an offer for a home equity line of credit. By gathering intelligence about potential customers, you can choose to send offers and marketing materials that closely match each defined segment, whether it’s researching a riskier group of borrowers or tailoring online messages to match a preset demographic.

Segmentation strategies allow you to better define your potential customer so you can offer a more personal marketing experience. While you might not be able to get to know each customer or potential portfolio personally, creating intelligent segments can help you reach your client base with the offers and products that they need the most. It’s a tailored, personal strategy that can create relationships with the best quality customers while helping you dial in on the individual needs of your client base.


Build relationships with the underserved market

The underbanked/underserved market represents 88 million consumers with nearly $1.3 trillion in income. More than a quarter of these consumers have good credit scores and household income greater than $50,000 per year. How will your organization attract and build relationships with one of the fastest-growing segments in the U.S.?

View the recorded webinar, “Uncovering Opportunity: The True Potential of the Underserved Market “ hosted by the Center for Financial Services Innovation (CFSI), BAI Banking Strategies and Equifax to learn more about executing an underserved strategy to unlock new revenue streams.