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Experian Public.

LendIt 2016

Michele Raneri

April 2016

2 © 2015 Experian Information Solutions, Inc. All rights reserved.

Experian Confidential.

© 2015 Experian Information Solutions, Inc. All rights reserved.


Topics to cover OML Trends

Deep Dive into OML Loans

Industry Best Practices

2


Experian Public.

Online Marketplace Lending

So what

online marketplace IS

lending?


Experian Public.

OML Industry

Unsecured Personal

Loans

Education Loans

Real Estate

Small Business

Loans Auto Loans

Lines of Credit

Rentals/ Leases








5


Experian Public.

Number of loans originations

1.8

3.8

8.6

0

2

4

6

8

10

12

14

16

18

Personal Secured Personal Unsecured Student

Mil

lio

ns

Q3 2006 Q3 2009 Q3 2012 Q3 2015

28% over

Dec 2006

-12% down

from Dec 2006

7% over

Dec 2006


Experian Public.

Average balances

$7,949

$15,747

$10,372

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

Unsecured Personal Loans Secured Personal Loans OML Loans

Q2 2014 Q4 2014 Q2 2015 Q4 2015

4% over

Dec 2011


Experian Public.

VantageScore® 3.0 at origination

637 645

655

500

520

540

560

580

600

620

640

660

680

700


Q3 2014 Q1 2015 Q3 2015

Higher than consumers

who originate unsecured / secured loans Avg. US VantageScore 3.0: 671


Experian Public.

Risk Levels at Origination

34%

29%

42%

26% 27%

38%

0%

10%

20%

30%

40%

50%

60%


Super Prime Prime Nonprime Subprime Deep Subprime

Avg. VantageScore 3.0:

637

Avg. VantageScore 3.0:

645 Avg. VantageScore 3.0:

655


Experian Public.

Interest rates

Secured

Loans

Unsecured

Loans

0% 5% 10% 15% 20%

5.0% 7.3%

10.4% 12.8%

Revolving

Bankcard

10.6% 19.4%


Experian Public.

Trendview Segments – Consumer Behaviors

Consolidator Rate Surfer Revolver Transactor Mixed

Consumer

transfers

multiple

balances to

one loan

product

Consumer

balance

transfers

debt from

one product

to another

Consumer

carries a

balance from

month to

month

M1 M2

$$

Consumer

pays off the

entire

or majority of

the balance

every month

M1 M2

Consumer

exhibits

transactor as

well as

revolver

behavior

REVOLVER/

TRANSACTOR


Experian Public.

0%

10%

20%

30%

40%

50%

Co

ns

olid

ato

r

Ra

te S

urf

er

Re

vo

lver

Tra

ns

acto

r

Mix

ed

Co

ns

olid

ato

r

Ra

te S

urf

er

Re

vo

lver

Tra

ns

acto

r

Mix

ed

Co

ns

olid

ato

r

Ra

te S

urf

er

Re

vo

lver

Tra

ns

acto

r

Mix

ed

Q4 2014 Q2 2015 Q4 2015

Trend ViewSM segments

12

Unsecured loans Secured loans OML loans








13


Experian Public.

0%

2%

4%

6%

8%

10%

12%

14%

16%

-91%

to

lo

w

-81%

to

-9

0%

2

-71%

to

-8

0%

2

-61%

to

-7

0%

2

-51%

to

-6

0%

-41%

to

-5

0%

-31%

to

-4

0%

-21%

to

-3

0%

-11%

to

-2

0%

-1%

to

-10%

0%

1%

to

10%

11%

to

20%

21%

to

30%

31%

to

40%

41%

to

50%

51%

to

60%

61%

to

70%

71%

to

80%

81%

to

90%

91%

to

hig

h

Correlation with Revolving Balances

Percentage of consumers with change

in revolving balance after OML loan origination

Revolving balance

went down more

than 10% for:

23%

consumers

Revolving balance

went up more than

10% for:

46%

consumers

14

32%


Experian Public.

Comparison of Loan Performance

Dec‘ 2015

Dec 2014

Performance for the trades (12 months) New Originations

85%

2% 1% 1%

11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

current 30 60 90 120+

Unsecured Loans

89%

3% 1% 1% 6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

current 30 60 90 120+

Secured Loans

85%

2% 2% 2%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Current 30 60 90 120+

OML Loans

13% 8% 13%


Experian Public.

Who’s a typical OML borrower?

OML BORROWER CREDIT ACTIVE CONSUMER

55%

VantageScore 3.0

= 626 VantageScore 3.0

= 687

REV UTILIZATION

REV BALANCES

$9.9K

ACCOUNTS BANKCARD

5 NEW BANKCARD

1 INSTALLMENT

3

DELINQUENCIES

ON ANY

ACCOUNT

2.1 (Currently 30+ DPD)

0.9 (60+)

31%

$5.3K

BANKCARD

3 NEW BANKCARD

0.3 INSTALLMENT

1

0.7 (Currently 30+ DPD)

0.3 (60+)

*at least 1 open trade or inquiry


Experian Public.

Who’s a typical OML borrower?

OML BORROWER

4%

21%

43%

30%

2%

0%

10%

20%

30%

40%

50%Age of

Borrower

45 yrs

CREDIT ACTIVE CONSUMER

2%

35%

25%

19% 18%

0%

10%

20%

30%

40%Income

$74K

9%

19%

26%

33%

13%

0%

10%

20%

30%

40%

50%Age of

Borrower

49 yrs

5%

30%

20% 19%

26%

0%

10%

20%

30%

40%Income

$87K








18


Experian Public.

“Not instead of ..”

“…But Complementary to”

Where the industry is heading

Beginning to attract a lot of lenders

Traditional lenders mimicking OML Lenders

Risk evaluation including more data

Application data

Small business data


Experian Public.


Consumer is in the driver’s

seat

No firm offer of credit

Offers ability to screen

consumers with no affect on

their credit

Under 21 ok for credit card

Credit and/or non-credit

options for multiple product

types

Prequalification


Experian Public.

Sophisticated Analytics

Risk models with segmentation

Industry specific models and attributes

Business Intelligence

Peer Benchmarking

Custom models

Optimization





Topics covered OML Trends



22


Experian Public.

Internal Use

For additional information: [email protected] Twitter Handle: MLRaneri

Documents

LendIt 2016 - Amazon S3...No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian