Amid the great digital shift, cross-pollination is key.
United States Information Services (USIS) Chief Revenue
Officer and Equifax Senior Vice President of Global Partnerships Joy Wilder
Lybeer said retailers and FinTechs can learn from one another as they
collaborate with the consumer in mind.
She noted that the cross-pollination that is happening
between FinTechs and merchants represents a new paradigm shift, improving the
customer experience, identity and fraud protection.
As she told PYMNTS, digital commerce, traditional commerce
and consumer behavior are aligning in ways never seen before. As a result,
FinTechs and merchants are responding to what she termed “an overwhelming shift
in consumer empowerment — where the consumers themselves are deciding how to
shop and how they finance purchases.”
Consumers are demanding the same streamlined and safe
experiences at smaller merchants’ sites (online and offline) that they’ve seen
from major eCommerce players.
Consumer In The Driver’s Seat
Simply put, the consumer is in the driver’s seat, not the
FinTech, and not the retailer, she said. Those enterprises are reacting to and
striving to meet the consumer where he or she wants to be met.
Retailers have been willing to consider different economic
models to capture market share, and FinTechs are enabling disruption through
innovations such as buy now, pay later (BNPL) services, she said.
And in the mix, too, are traditional financial services
firms, which Wilder Lybeer said “get a bum rap” when it comes to innovation.
(After all, traditional banks were the innovators behind credit cards, internet
banking and contactless payment tech.)
The financial services ecosystem must create a superior
customer experience that supports digital tools, gets the borrowing experience
just right, and manages (and prevents) fraud in ways as frictionless as
possible, she said.
To get there, to meet consumer expectations and create a
frictionless experience, merchant and FinTech partnerships are making better
use of data — and, especially, alternative data — than ever before in a trend
that Wilder Lybeer said is accelerating.
“Sometimes a consumer comes into the FinTech ecosystem
without a strong credit footprint,” she explained. “So, using income,
telecommunications and utility data, those are examples of insights that both
merchant and FinTech partners are using to say ‘yes’ more often.”
She pointed to Equifax’s own InnovationX lab that helps the
firm work with FinTechs to capture, analyze and leverage data to help extend
credit to users. The greenfield opportunity is significant, she said, adding
that there were, as of recently, nearly 11,000 FinTech startup companies in the
U.S. focused on delivering innovation into the financial services markets.
“This innovation process and experience helps us to test new
products, understand new markets and help our customers model performance,
giving them access to real-time data and helping them fend off competitors and
embrace and optimize their value-differentiation with urgency,” she told
PYMNTS.
Looking Ahead At BNPL — And Fraud Prevention
Looking ahead, she said, the BNPL model will expand rapidly,
as it’s being embraced and tested by traditional lenders who want to preserve
and grow their position within the financial services ecosystem.
The FinTech/merchant partnerships are having a significant
impact in reducing fraud, where, as she said, “winning the battle over identity
and fraud means bringing a range of identity signals together.”
Historically, she added, Equifax has seen players in this
space forge a deep competency in one signal, like email.
But as companies jointly leverage their expertise, this will
enhance the consumer experience across the retail journey and across channels.
She said Equifax’s acquisition of Kount combines personal identifiable
information (PII) with other attributes to forge insights on consumer activity
that can offer end-to-end protection across the commerce continuum. Fraud
prevention has to be invisible.
“The winners will be those firms that put identity at the
heart of their strategy,” she told PYMNTS, adding that “identity should drive
all the motions to create that optimal consumer experience while balancing risk
and cost on the backend for both the merchant and the FinTech.”
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