We sat down with John Krickus, Senior Product Manager for Experian's Scoring solutions to ask about the new Social Media Insight, and how this data and score are being used to help businesses strengthen scoring models, and create opportunities for emerging small businesses with limited credit history but strong social media profiles.
What is Social Media Insight?
We're very excited to bring what we consider a breakthrough capability. Social Media Insight is an expansion, a use of new information beyond traditional credit data, that both improves the performance of our scores, provides attributes to our clients, and is directly sourced from the social media providers - no screen scraping.
What type of social media data is used?
So the social media data comes from sources that, like with our other data sources, we are not allowed to publicly disclose, but we are focused on business social media sites. So we're not going after consumer social media data, but social media data from business oriented sites, so that we can better evaluate small and midsize businesses.
What steps are taken to prevent artificially boosting the ratings of a business?
So that's a question that we often receive about artificially boosting ratings. We work with the social media companies, they have many techniques to identify where the reviews are coming from and to prevent someone gaming the system. Is it 100 percent full proof? No, but it is very effective.
How effective has social media data been in predicting risk?
As we've seen with using the data in our scoring solutions, we've seen a tremendous boost in score performance. There have been two real gains from using social media data. First is, we've developed about 70 social media attributes. We can now include those attributes and make these attributes available to our clients to improve the performance of risk scores.
The second area really devolved from client feedback as we piloted the data. They indicated to us that there were social media data elements that are very helpful. So, we've been able to attain information such as pricing, parking situation, hours of operation, and those additional data elements have also helped our clients in improving their risk performance scores.
What type of data do our clients get with Social Media Insight?
We're able to provide our clients one of three types of data. First, we can provide a social media IntelliScore. That's our normal IntelliScore with commercial data, and now social media data. So, you get a higher performance. We've boosted performance by 37 percent with our IntelliScore. Second, we can provide those same social media attributes to our clients. So, they can incorporate those social media attributes into their scoring models. And third, we have the descriptive data. I mentioned hours of operation for example, social media data also provides a better description of the business. So, you just don't get an Exercise Gym, you get whether that gym is kickboxing or whether that's just exercise equipment.
Can I target specific kinds of businesses? Can it be used for Marketing?
We do have the ability to use social media data for identifying better businesses to do business with. Our initial focus though is in developing the attributes and the score for risk management. So that's really the focus for this first phase of Social Media Insight.
How might Social Media Insight help an Insurance company?
Insurance companies have been very anxious for this data, and they're getting a different view of the business. We're going beyond traditional trade, public record, background information, and now we're able to provide a view of how long has that business been rated? How are the ratings? What's the trend in the number of ratings? So, it's not just your level rating, but are you getting reviews over time? All that information provides a really unique view of the business that we've never seen before.
How can Experian clients access Social Media Insight?
Our clients can access the data one of two ways. We can provide a batch file. So, if you have a portfolio and you want to add social media attributes and a social media score to that you can provide us a file in batch. We also have our new API access, and we're very excited about that. So that allows you online real time access to obtain the social media insight data, and it's very easy to program to.
Can Social Media Insight help emerging businesses gain access to capital?
Yeah that's an excellent area for Social Media Insight. It's really the newer smaller businesses that don't have a very deep credit history, that Social Media Insight now provides a view that previously it may have lacked information, therefore, credit may not have been extended. Now by having a social media site data available. We're adding depth of information to that business. We've actually found that businesses with social media data, as a group, are less risky than businesses without.
How does Social Media Insight help improve risk model performance?
So, the view that the social media data provides, we have found has boosted model performance, more than doubling model performance for those new emerging businesses. But even for established businesses we've seen double digit gains in the measure of performance for models such as KS, and again you're getting a view of a business, number of reviews, and we normalized that. So, if you're in an area that's very active with social media data we take that into account. So, if you have 10 reviews in your history, which are in a very active area, you may not get as much of a positive as if you had 10 reviews and a less active social media area. So that combination really boost performance and predictiveness of the data.
How do Social Media Insight help our clients reduce risk?
And really that's been one of the biggest breakthroughs with the social media data. Is by being able to boost the performance as I discussed earlier on KS, those new to the world businesses. They now are able to more confidently make decisions in their portfolio, because there is now a wealth of information. They're able to improve their models with this new additional information and have a very good performance improvement with it before and after. So, there's an across the board performance improvement.
How does Social Media Insight help to automate the decisioning process?
When you have an automated system, you want to have a higher level of confidence. The higher level of confidence you have, the stronger you can, for example, having automatic approve and automatic reject areas. By adding social media data we're able to get a stronger KS performance, which means you have more confidence in the models, and you can now increase the percentage your portfolios that you're putting through either automated or highly automated decision making. It's a significant boost in performance however you cut it.
We're very excited about this unique new information source. Social media data is totally different from any other business credit information that's available, and when it's utilized in a model, in a decisioning system, the gain in performance are dramatic, and we're very excited to bring this capability to our clients.