Gathering and verifying consumer data is a necessity for any DTC business. Any data gathered for marketing, operational, or customization purposes requires information to be taken and synthesized for its specific use-case. For lenders, insurers, background checkers, or any business who uses consumer data to move their business operations forward, the data gathering options are vast. And that’s because consumer data is everywhere.
From data warehouses, financial agencies, public records, and the consumer themselves, the data we gather to drive business growth, loan approvals, etc. can be found almost anywhere. But it pays to discern where we get that data from and what type of data it is. As a general rule, consumer data can be divided into two categories: credentialed and non-credentialed. So what’s the difference and which should you use?
Credentialed vs. non-credentialed data
It’s simple really: credentialed data is data taken from a primary source using credentialed (i.e. username and password protected) information. This means that information gathered using credentials predominantly comes from the consumer directly. When a request is made for specific consumer data, the consumer must provide permission by logging into the direct data source for a company to access their information. For example, if a requesting business needs to verify or collect a homeowners insurance policy:
- The insurance policy request would be sent to the consumer
- The consumer would log into their Allstate account to share their coverage details directly with the business
- The requesting business would receive the consented information
This is also known as consumer-permissioned data (CPD). From a technical standpoint, all consumer-permissioned data is provided by the same method: online accounts that house consumer data, where access is provided through consumer consent. This data can include:
- Educational data for school transcripts
- Tax services for tax returns
- Employer data for income and employment
- Insurance carriers for policies
- And more
Open banking and data collection software as a service
Credentialed data isn’t a new concept, but it’s recently evolved to be collected on a larger scale. Companies, like Yodlee, originated the use of CPD and credentialed data for connecting and making available bank account data to 3rd party applications. This model has continued to gain adoption with open banking companies like Plaid and Finicity.
MeasureOne, too, uses credentialed data (or CPD) to empower the consumer while also helping businesses drive their operations efficiently and effectively.
On the other hand, non-credentialed data is information taken by any other means besides directly from the consumer. Non-credentialed document and data collection rely on third parties and data warehouses to drive data collection from consumers. Third parties can include: credit bureaus, alternative financial institutions (including private lenders), public records (such as property deeds and occupational licenses), rental agreements, and collection companies. Organizations, like Equifax’s The Work Number deliver consumer information from these databases which they have built and maintained through various means.
Consumer permission, or lack thereof, isn’t the only major difference between credentialed and non-credentialed information however.
Advantages of using credentialed data
Up-to-date and reliable data, lower operational costs for verifications and data collection, and superior scalability are all associated with using credentialed data. Because information is initiated by the consumer and pulled directly from the primary source, businesses who use credentialed data have the upper hand. The advantages are abundant:
- Better coverage and advanced scalability: direct-from-consumer or consumer-permissioned data allows businesses to take data directly from the source without relying on the need for third-party partnerships (or sourcing more).
- Transparency and consumer-privacy focused: Trust and data is more important than ever in today’s hyper-online world. When you request information directly from the consumer, you open the door to customer confidence, retention, and referrals.
- Cost-effective data requests: Because there are no middlemen (i.e. third-parties and other data sources), the costs per data request and doc gathering decrease.
- Fresh data every time: By gathering data from the source directly, there are nearly never data quality issues. You get reliable and accurate data for any data pull.
- Improved operations and better decision-making: By linking to consumers’ accounts directly, businesses can quickly verify necessary consumer data without sifting through superfluous documentation, leading to quicker approvals, underwriting, and more.
Consumer-permissioned data can accelerate any businesses consumer data needs and lead growth, cost-savings, and consumer trust.
Advantages of using non-credentialed information
Collecting consumer data through non-credentialed means may provide speed and efficiency. Businesses that pull non-credentialed data for their customers rely on data partners (including data warehouses and other sources).
- Nearly instant data collection: Rather than waiting on consumer permission, the requested data is found through third-party or partnered sources (data warehouses and other databases), which allows access to consumer data almost instantly.
- Specialized data sources: Most data warehouses specialize in a specific type of consumer data, such as credit information, employment data, etc. At a large scale, relying on non-credentialed data allows businesses to gather large amounts of this specific data from consumers.
- A smooth customer experience: Without the need for consumer-permission to gather their data, verifications run quickly and efficiently and allow consumers to get the decisions they need faster, improving your customer experience.
- Less admin work and more meeting targets: Technology-driven data gathering tools means paperless documentation that can flow into automated underwriting. Plus, with less paperwork, businesses may have more time to focus on operational objectives and goals.
Less friction, more reliability with credentialed data from MeasureOne
The need for collecting and synthesizing consumer data isn’t going away. Credentialed and non-credentialed data both have their place in the world of consumer data collection, and it’s best practice for businesses to use a waterfall approach, using both to their advantage. MeasureOne takes on the waterfall approach itself with our many data solutions, offering document uploads and automated document processing as fallback options to connecting to the consumer's account directly.
With the energy and interest in direct-from-consumer, CPD, or credentialed data to drive the data sharing market, MeasureOne knows that use-cases go beyond income and employment verification. The reality is that credentialed data and CPD are accessible for all consumer-data focused businesses and provide ultimate benefits to businesses and their consumers.
MeasureOne is a horizontally minded, platform-based, consumer-focused platform aiming to meet the needs of both businesses and consumers alike using credentialed data. As champions of consumer-permissioned data for any business needs, we’re here to drive a major leap forward in improving business growth and the customer experience. Plus, we simplify data collecting solutions with our many technology integration options, all while saving time, energy, and money for your business.
Searching for low-cost automation solutions or just interested in streamlining your consumer data collection using credentialed data? MeasureOne can help.