Financial inclusion is a primary focus for nearly all banks and financial institutions according to a new commissioned study Experian released and conducted by Forrester Consulting. The study highlights lenders’ plans to make financial products and services more affordable for consumers across the United States and shows one-quarter of banks have financial inclusion plans up and running with over two-thirds in the process of implementing financial inclusion strategies.

In addition, the study reinforces the role expanded data plays in increasing access to fair and affordable credit. In fact, sixty two percent of respondents stated the use of additional data sources can improve access to credit for consumers and 60 percent plan to use advanced analytic technologies, machine learning and AI in credit decisions to support their financial inclusion strategies.

“We believe this research confirms our industry is heading in the right direction and that financial inclusion is a top priority for lenders across the U.S.,” said Greg Wright, executive vice president and chief product officer, Experian Consumer Information Services. “Leveraging data and technology to drive financial inclusion is job number one for us. We have the right insight, teams, products and technology in place to help our clients reach their financial inclusion goals, overcome challenges and, most importantly, increase fair access to credit for underserved consumers.”

According to the study, many lenders view financial inclusion as a way to engage new audiences and better serve their existing customers. Today’s financial inclusion programs are primarily focused on those new to credit (46% of programs), followed by low-income consumers (41% of programs) and small businesses (40% of programs). Secondary targets are customers with no or thin credit files (38% of programs) and the unbanked/underbanked (34% of programs).

Data that drives inclusion

The study also explored lenders’ perceptions about the most valuable data sets for risk assessment. Sixty-two percent of financial institutions use or are planning to use expanded data to improve risk profiling and credit-decision capabilities with the following data sets considered most helpful to supporting financial inclusion strategies:

•     64% banking data
•     57% cash flow data
•     52% employment verification data
•     51% asset, investments and wealth management data
•     51% alternative financial services data
•     36% telcom and utility data

Reaching new heights with Experian and guest Forrester

While financial inclusion is a top priority for many, other organizations still face barriers. Two-thirds of respondents said not having the right technology, data, and talent in place to execute a financial inclusion strategy were the greatest challenges faced. In addition, 56 percent of businesses said they need greater internal education about the benefits of diversity and inclusion.

Those interested in learning more about the “Reaching News Heights Together with Financial Inclusion” study and the tools available to implement and track financial inclusion programs are invited to join a live webinar hosted by Experian and featuring Forrester on Tuesday, May 24, from 10 – 11 a.m. PT.