I’m finally surfacing from all the emails and follow up conversations after the Lend360 Conference in Dallas. It was my first time at the event and it proved to be a great opportunity to hear from and meet so many players in the space. As many as 800 attendees came together to discuss the future of online lending. And make no mistake, the future is online.
Looking around the conference floor, booths were dominated by online lead sellers—the lifeblood of the industry. Every lender I spoke with either had an established flow of leads or were looking to create and/or improve the lead funnel. The open question is whether lenders are equipped with the infrastructure to effectively scale and manage the volatility of purchased leads.
If you’re relying on the same old bureau data and loan management platforms to negotiate a purchased lead funnel – you are not equipped to succeed. There are three essentials every lender should be evaluating alongside their decision to buy leads:
- Data: do you have personal identity to evaluate leads? Sophisticated lenders might reject as many much as 85% of leads they purchase. Relying on expensive bureau data to make those marketing decisions will most likely destroy your margins. Moreover, recent PII breaches should give pause to any lender using SSN for identification verification—potentially leading to fraud and subsequent defaults.
Buying leads requires a multi-fold approach to identity verification:
- Take advantage of your own data—it’s free! Have you seen this customer before? Did they default or pay you back? Start building your blacklists today.
- Use unregulated data to verify identity first: phone, email, address, name and IP. Just checking the phone number isn’t enough—you need to look at the whole identity. Fraudsters can get their hands on a phone that may be associated with your lead, but is it registered to the address provided? And was that email recently created to match the lead’s name or has it been established for over a year? Read about other key risk signals to consider in our eBook.
- Analysts: who’s evaluating your models? If you’re looking for a magic score that can give you an up-down vote on your leads—it doesn’t exist. Identity verification isn’t like a credit risk score where you can easily accept anything above a certain number. It’s important your analyst is able to harness data into scorecards or models that can assess the probability of a lead to have a positive outcome. The goal is take calculated risk.
- Technology Platforms: what’s in front of your underwriting? You need technology to empower your analysts. Making decisions at the lead level is crucial for success in online lending and relying on traditional servicers won’t enable an analyst to utilize and act on the data. Many lenders have built their own proprietary platforms, but new players are entering the space to fill the gap between leads and underwriting.
Lend360 proved to be a showcase event for a growing industry and brought a good mix of technology, data, and analytics leaders together to discuss challenges and solutions. I look forward to continuing the conversation with lenders who are interested in revamping their acquisition process to scale their lead gen efforts.
Click here to download our eBook: Speed to Lead: Identifying Your Best Customers at the Top of the Funnel.