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TransUnion advocates data analysis in resurgence vs economic paralysis

Global information and insights provider TransUnion (NYSE: TRU) is urging the business community to embrace the increasing role of data analytics in order to find stability during these uncertain times. By coming together and adopting best-practice and new technologies, the current economic downturn caused by the COVID-19 pandemic can start to be addressed before it escalates into a longer-term economic paralysis, reversing progress achieved in previous years.

“The cautious and reactive stance that many businesses are taking often stems from information gaps and an inability to make informed decisions. When lenders, for instance, have a limited view of their portfolio, they can find it difficult to take action. However, stifling growth has historically been an unsustainable strategy. Philippine businesses must not allow themselves to be crippled by this pandemic, and instead, embrace an information-powered recovery,” said Pia Arellano, TransUnion Philippines president and CEO.

In its virtual Big Data Summit held recently, TransUnion gathered industry leaders and wider stakeholders to tackle the challenges ahead and to discuss the path to recovery and growth. By helping inform policy and inspire data-led actions, TransUnion believes businesses can continue to provide services and solutions with confidence and fulfill their role as economic enablers.

As digital transformation accelerates, new trends and new realities emerge, which may require major upgrades in systems and possibly even business models. In the banking sector, for example, ensuring trust in a digital environment is a massive undertaking that, while slowly being rolled out even before the pandemic, continues to create challenges.

In navigating pandemic uncertainty, data insights and new technology can provide a more certain map. The use of artificial intelligence and machine learning in data analytics can ensure a wealth of insights is at hand. Data gives a rounded and more encompassing understanding of consumers or segments, which can enable businesses to create a more strategic decisioning framework on whether to engage them and how best to do it.

Pia Arellano, President and CEO, TransUnion and Arniel Ong, President and CEO, RCBC Bankard

Data solutions available in PH
Many of the challenges that businesses face have digital solutions readily available to solve the problem. It’s just a matter of employing the right solution(s) at the right time to achieve set goals.

Take lender portfolio reviews, for instance. Increased portfolio reviews — coupled with trended credit data and alerts on shifting consumer behaviors — can help businesses better address customer needs and provide instant transactions and access to finance they have come to expect.

It can answer questions like, “Will having an equal or higher credit limit vs. their first credit card result in a higher share of wallet shift in terms of spend, principal, and unbilled balances?” and “Will giving an equal or higher credit limit impact credit card delinquency or bad rate?” By unearthing off-books consumer behavior, frequent portfolio reviews can provide the basis for strategy that will drive preference and increase customer loyalty, among other capabilities.

Lending industry leaders said that they have to check their data on a daily basis now, compared to at least monthly during pre-pandemic times. The volume of data generated by digital channels now provides richer insights into how consumer behaviors change, highlighting the need for businesses to be flexible and respond to changes. In other words, they should be able to quickly react to events, as well as shifting regulatory requirements, without being hampered by in-house technology limitations.

Pursuing growth in an uncertain environment also means being open to explore market segments that were previously overlooked. Specifically, new-to-credit (NTC) consumers comprise a big chunk of the Filipino population, which presents a vast growth opportunity for proactive players. This is also a chance for lenders to attract and gain the loyalty of the tens of millions of consumers who aren’t credit-visible yet by extending them access to credit products and other services that may be critical in these trying times.

Often this is a risk that not all lenders have enough appetite or ability to take. To bridge that gap, technology providers like TransUnion have started harnessing the power of trended data and alternative data from non-traditional sources such as telecom companies to create lookalike models that generate scores to underwrite NTC consumers. This ultimately allows lenders to say ‘yes’ to more customers while keeping risk flat or even reducing it on a consistent volume basis.

Jesus Angelo ‘Biboy’ Gomez, SVP, Group Head, Credit Cycle & Enabling Services, Bank of the Philippine Islands and Aylwin Herminia ‘Mia’ P. Tamayo, FVP & Head, Credit Cards and Business Governance, EastWest Bank

Protecting businesses and consumers
As consumers become increasingly comfortable with transacting digitally, the biggest risk often comes from fraudsters who target industries with high transaction volumes. Businesses are faced with finding the balance between providing instant decisioning and transactions and successfully catching fraud, while still maintaining friction-right customer experiences lest they risk letting even the good ones get away. At this point, multi-layered defenses are necessary.

TransUnion has found that adding device intelligence to its bureau data and alternative data sources expose fraud and fraud linkages that can’t be detected by simple security questions or even face and ID scans. Its advanced insights and a global network of reported fraud enable it to help members discover their vulnerabilities and manage risk. Coupled with continuous consumer education, addressing the rise in digital fraud attempts through these technologies can also enhance the acquisition experience of genuine customers and result in growth for the business.

‘Information for Good’
TransUnion uses data, software and technology in a smart way, providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. It helps drive better decisions, enables secure friction-right customer experiences and encourages greater engagement through better offers and communication. TransUnion is driven by its purpose of helping businesses and consumers transact with confidence and achieve great things. This is ‘Information for Good.’

Guided by the principle of responsible data stewardship, TransUnion’s data security adheres to global InfoSec standards. This ensures that the information and technology that fuels its solutions are trustworthy and accurate, while also complying with local privacy and other relevant legislation around the world. In addition, it collaborates closely with members to actively manage risks related to technology adoption and data innovations.

“At a time when the pandemic poses an imminent threat of economic paralysis, data solutions offer a new perspective that promises more accurate, efficient, and inclusive results. TransUnion makes the task easier by providing a much-needed reliable basis for mutual trust between businesses and consumers. When both are better informed, they make smarter financial decisions that contribute to the growth of the economy,” Arellano said.

Pursue growth through data and information and make an impact in your industry today. For more information, visit the website or contact your TransUnion Relationship Manager.

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