How The Work Number® Gets Lenders Up to Speed

As the digital world moves faster, and digital banking adjusts to the new hyperdrive normal of post-pandemic technology, credit scores just won’t cut it as the lynchpin of lending. Shelly Nischbach of Equifax Workforce Solutions joins Lou Carlozo on the “Bankadelic: The colorful side of finance” podcast to discuss how The Work Number® helps financial institutions leverage the power of income and employment verifications to make smarter, more inclusive loan decisions.

Carlozo: Why is data surrounding the VOE/VOI – that’s verification of employment and verification of income – important in today’s lending environment? For starters, it allows access to technology that can help streamline the process. To discuss the exciting developments, we have Shelly Nischbach from Equifax Workforce Solutions here on Bankadelic. 

Shelly is the Vice President of Verification Services Consumer Finance for Equifax Workforce Solutions. Shelly is a sales leadership professional with a 30-year career in the banking industry. As a sales leader for the Verification Services Consumer Finance team, she’s responsible for leading a national sales team and exceeding sales goals by developing deep client relationships built on trust, thought partnership, and value creation using unique data, innovative analytics, technology, and industry expertise. 

I've, of course, heard of Equifax. I have not heard of The Work Number® before, so tell me a little bit about that and what it involves and what your role there is. 

Nischbach: First off, I can't believe you haven't heard of The Work Number, so I'm thrilled that I get the chance to tell you all about it. Yes, Equifax is a credit reporting agency. And within Equifax, we have a very unique and differentiated data source called The Work Number. The Work Number is what it sounds like – we acquire payroll information from a multitude of sources – direct from employers, payroll partners – and we take that information and feed it back into the lending ecosystem to help decisioning flow easily, to help lenders make high-quality fast decisions, to help reduce their risk, and at the end of the day, the most important part, the core of all of this, is to help the consumer. And we help make sure that we live out our purpose which is helping people live their financial best. So when we're able to take that information and help lenders make quick, quality decisions, consumers benefit in the process. I'm super excited to help educate as many people as I can about the work that we do to help consumers live their financial best.

Carlozo: When we talk about the consumer being at the core of all of this, we also have the rocket fuel that makes this possible, more than 136 million active records provided by more than 2.5 million small, medium, and large employers (as of the date of this conversation). That is a tremendous amount of data. Help us to make the connection between that data and how it works to improve this decisioning process and the whole lending process. 

Nischbach: We're all consumers. And what I love about this, I work and my teams work to make sure that we always keep that core in our mind. The consumer is the core of all things. And in today's lending environment and today's market, the people that we work with directly are the financial institutions and they need to make sure that they are being as fast and as efficient as they can possibly be in order to remain competitive and keep their customer base and grow their customer base, all while making sure they're managing risk effectively in the process. 

Think about anything that you want, anything of magnitude where you're going to have to borrow in the process. We are people that desire instant gratification. We want fast decisions. We want transparency into the decisions that are being made about us, and we want to make sure that we are looked at holistically. And so, traditionally, the things like the credit score might be sufficient, but in today's day and age consumers want to be seen more broadly than a three digit number. In order for our lenders to be able to deliver in that fast pace, instant gratification desired atmosphere and to deliver seamless transactions and give those consumers a fair shot at an approval it requires that they look broader and deeper and create a process that is as inclusive of data as it can possibly be. Using alternative data sets like what The Work Number brings to the table, income and employment information, helps capture a much more comprehensive financial view of the applicant and helps those borrowers prove, “Hey, I am credit worthy for what I'm looking to do,” and helps those lenders say yes to more on a faster basis. 

Carlozo: There's no doubt about that. . I'm just wondering from your viewpoint, what are some of these common methods that revolve around conducting verifications that lenders really need to take another look at. 

Nischbach: Think of how many people in the world right now, in the United States right now, don’t have that credit score number? I can tell you that it's in the tens of millions.¹ Lenders are thinking through what is necessary in order to make sure that we are being holistic for those tens of millions of U.S. citizens that are defined in that space of thin to no credit for a number of reasons. They might be new to the country. It might be a recent graduate that just hasn't developed their credit score. It may be this growing population that we are entitling credit savvy, that are kind of anti-credit and they're looking for lenders that are using other non-traditional data sources in order to have that holistic point of view in making their lending decisions. 

And so lenders are expanding their opportunity sets by ways of the example here being The Work Number. We offer a number of different ways to translate this data into their workflows so that it is part of an automated immediate decision tool to help them be more inclusive, to help them broaden their understanding of those consumers, and help them get to that yes faster. 

Carlozo: So it sounds like before we may have had something akin to a very static two-dimensional pencil sketch. Now we have a three-dimensional portrait that moves in real time and that's what impresses me because if we talk about, for example, incorporating the borrower’s income and their employment information, that not only gives more heft to these crediting decisions, it also keeps the process moving. 

Tell me a little bit about how that works and why that’s so crucial.

Nischbach: I'm going to go back again to the consumer and I'm going to reinforce this notion of instant gratification. While the world was already evolving before the pandemic to being a more digitally-based world, I think that process of entering into a global pandemic, and everything about how we functioned, immediately changed. Loan providers across almost every industry were affected by [the pandemic]. I have to now accelerate how I turn and deliver a digital experience across this full process, including the verification process up front. Think about words like “accelerate”. Think about words like “increased efficiency”,  “reducing risk”. At the end of the day, generating more revenue. 

Using an instant provider of verified information ensures that these lenders have what they need in order to function in the world that they were forced into and that now consumers are really gravitating toward. We want things to be simple, right? A digital experience does a couple of things, it reduces the overwhelming nature of paper-based transactions, it helps shorten the actual decisioning process, and enables bankers and lenders to do things much more quickly. The automated process reduces manual energies to support it, it helps reduce costs, it helps reduce reprocessing on the heels of when things are done manually as riddled with the potential for error. 

It's all about increasing efficiency. We're not just about the consumer. We're about helping make sure that lenders make those great decisions, that they've got clean, quality portfolios so that they can say yes to more consumers over time. Then, because they still have those human resources, those folks can focus their energies on more complex deals and again generating more revenue for their institution.

Carlozo: As we get ready to wrap up, one of the things that I would love to ask about involves the fact that so many people in any endeavor or business are trying to move the ball forward and certainly people are looking into how to make better credit decisions or how to help lenders make better credit decisions. What do you think really makes the work that you're doing at The Work Number stand out and really move things ahead in a way that competitors may not be?

Nischbach: Let me go back to our history. We’ve been working on building the database for over 25 years. I'm here in St. Louis and it all started, we had an organization called TALXand TALXpartnered with a company at the time called McDonnell Douglas, now Boeing. McDonnell Douglas was interested in leveraging this organization to help provide verification of employment as they were going through some massive changes in their institution and we said, “Yeah, we can definitely help you with that.” And once upon a time we were just a phone number, a 1-800 number, and over time we realized this is a tremendous value add. It does so many things. It helps take the workload away from the employer. They don't have to put those human resources, and again the potential for error in the process. It helps provide for the verifiers, the lenders, immediate and ongoing access to the information. 

We have a website that our credentialed verifiers can turn to and pull information. We embed through API directly into waterfalls so that it's immediately put into their decisioning process. At the end of the day, back to the middle of all of this, is the consumer. The consumer is getting the benefit of having this information instantaneously to support them getting what they need today. 

We realize, wow, this is a really great service. We need to figure out how to build it. Twenty-five years of work has gotten us to the numbers that you talked about – 136 million active records, 2.5 million contributing organizations. We've grown that. In the beginning, we started with the big guys, right? The Fortune 500, and our lenders said, “Hey, we like what you got. We want more of it.” 

So we've been working all this time to build. We've got a tremendous group of folks that reach out into the world and talk to employers and talk to payroll partners and have helped build what we have here and are continuously looking to where we need to expand. Who isn't being served by us and how do we continuously close that gap? There's tons of different ways to do this and there are others that do what we do, but the difference is that we've been doing it and we've been building upon this for a very, very long time, which nets the numbers that you cited at the beginning of our call.

*This excerpt was edited for clarity. Listen to the rest of the episode here: Episode 94: How The Work Number Gets Lenders Up To Speed

¹Equifax Data Study, 2022