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Big Data means Big Brother

Kim S. Nash | July 23, 2012
One credit bureau in the United States shows how Big Data is helping not just to sell information but also new ways to look at massive data to derive new business insights.

Monetising Innovation
Pulling in US$2 billion in revenue, Equifax is the second-largest of the three credit bureaus, tucked between US$1 billion TransUnion and US$4 billion Experian. With no one dominant player, the three are in a constant, tense battle to come up with new products that reveal that much more about consumers. Each touts the breadth and uniqueness of its data. Where they overlap -- and despite their rhetoric, they do overlap -- speed and innovation are the advantages. "It's a fast-followers game," Webb said.

His mission: to use his operations and IT background, combined with financial industry expertise, to uncover new revenue for Equifax. Webb joined the company in 2010 from SVB Financial Group, a financial services company with US$20 billion in assets, where he was CIO and later COO. While his bachelor's degree in Russian may not help, his MBA certainly does.

"I am amazed at how few opportunities business identifies to mine data," Webb said. "We have a responsibility to identify opportunities."

Asked how far Equifax should go, Webb paused. "The morality question is another whole discussion. But we have the technology to do this, and if it's legal, we should."

They are. Equifax cranked out 69 new products last year in risk management, identity verification, fraud detection, analytics and marketing. Equifax executives carefully measure innovation in revenue terms. An index called New Product Innovation (NPI) measures the revenue generated from products launched in the previous three years to see if they, combined, can bring in at least 10 percent of the company's revenue in a given year. NPI revenue last year was US$181 million, up from US$176 million in 2010 and US$134 million in 2009.

In another innovation program, the company removes 12 to 15 high-performers from various business units and support functions and sends them off together to brainstorm new products. They meet for three or four weeks, excused from their day jobs, to talk about how to target a need in a specific industry. Most of their ideas make it through the NPI process.

Two new products in development would help companies use analytics to avoid bad customers, said David Brooks, senior vice president of integrated data solutions at Equifax. In one, developers are building a model for banks that combines a person's credit scores with his track record for paying utility bills. The results would indicate whether it's worth the bank's time to pursue the customer for delinquent credit card payments.

The other new product, nicknamed Suspicious ID internally, is a system for watching inquiries on credit reports in real time, to catch crime in the making. The rate of inquiries, along with other factors, would be scored according to fraud risk. "When fraudsters find something that works," says Keith Manthey, the company's vice president of integrated data solutions, "they share it and use it quick."


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