TransUnion is a leading global risk and information solutions provider to businesses
and consumers. We provide consumer reports, risk scores, analytical services
and decisioning capabilities to businesses. Businesses embed our solutions into
their process workflows to acquire new customers, assess consumer ability to
pay for services, identify cross-selling opportunities, measure and manage debt
portfolio risk, collect debt, verify consumer identities and investigate potential
fraud. Consumers use our solutions to view their credit profiles and access
analytical tools that help them understand and manage their personal information
and take precautions against identity theft. We are differentiated by our comprehensive
and unique datasets, our next-generation technology and our analytics and decisioning
capabilities, which enable us to deliver insights across the entire consumer
lifecycle. We believe we are the largest provider of risk and information solutions
in the United States to possess both nationwide consumer credit data and comprehensive,
diverse public records data, which allows us to better predict behaviors, assess
risk and address a broader set of business issues for our customers. We have
deep domain expertise across a number of attractive industries, sometimes referred
to as verticals, including financial services, specialized risk, insurance and
healthcare. We have a global presence in over 30 countries across North America,
Africa, Latin America and Asia.
Our addressable market includes the big data and analytics market, which continues
to grow as companies around the world recognize the benefits of building an
analytical enterprise where decisions are made based on data and insights, and
as consumers recognize the importance that data and analytics play in their
ability to procure goods and services and protect their identities. There are
several underlying trends supporting this market growth, including the creation
of large amounts of data, advances in technology and analytics that enable data
to be processed more quickly and efficiently to provide business insights, and
growing demand for these business insights across industries and geographies.
Leveraging our 48-year operating history and our established position as a leading
provider of risk and information solutions, we have evolved our business by
investing in a number of strategic initiatives, such as transitioning to the
latest big data and analytics technologies, expanding the breadth and depth
of our data, strengthening our analytics capabilities and enhancing our business
processes. As a result, we believe we are well positioned to expand our share
within the markets we currently serve and capitalize on the larger big data
and analytics opportunity.
We believe that we have the capabilities and assets, including comprehensive
and unique datasets, advanced technology and analytics to provide differentiated
solutions to our customers. We have over 30 petabytes of data, growing at an
average rate of over 25% each year since 2010, representing over one billion
consumers globally. We obtain financial, credit, alternative credit, identity,
bankruptcy, lien, judgment, insurance claims, automotive and other relevant
information from an average of 90,000 data sources, including financial institutions,
private databases and public records repositories. We refine, standardize and
enhance this data using sophisticated algorithms to create proprietary databases.
Our next-generation technology allows us to quickly and efficiently integrate
our data with our analytics and decisioning capabilities to create and deliver
innovative solutions to our customers and to quickly adapt to changing customer
needs. Our deep analytics expertise, which includes our people as well as tools
such as predictive modeling and scoring, customer segmentation, benchmarking
and forecasting, enables businesses and consumers to gain better insights into
their risk and financial data. Our decisioning capabilities, which are generally
delivered on a software-as-a-service platform, allow businesses to interpret
data and apply their specific qualifying criteria to make decisions and take
actions. Collectively, our data, analytics and decisioning capabilities allow
businesses to authenticate the identity of consumers, effectively determine
the most relevant products for consumers, retain and cross-sell to existing
consumers, identify and acquire new consumers and reduce loss from fraud. Similarly,
our capabilities allow consumers to see how their credit profiles have changed
over time, understand the impact of financial decisions on their credit scores,
manage their personal information and take precautions against identity theft.
We leverage our differentiated capabilities in order to serve a broad set of
customers across multiple geographies and industry verticals. We have a global
customer base of over 65,000 businesses and millions of consumers. We offer
our solutions to business customers in financial services, insurance, healthcare
and other industries. Our customer base includes many of the largest companies
in each of the primary industries we serve. For example, in the United States,
we contract with all of the ten largest banks, all of the top five credit card
issuers, all of the top twenty-five auto lenders, fourteen of the fifteen auto
insurance carriers, thousands of healthcare providers and federal, state and
local government agencies. We have been successful in leveraging our brand,
our expertise and our solutions in our global operations and have a leading
presence in several high-growth international markets, including India, Hong
Kong and Africa.
We believe we have an attractive business model that has highly recurring and
diversified revenue streams, low capital requirements, significant operating
leverage and strong and stable cash flows. The proprietary and embedded nature
of our solutions and the integral role that we play in our customers’
decision-making processes have historically translated into high customer retention
and revenue visibility. For example, our top ten financial institution customers
have an average tenure of over ten years. We continue to demonstrate organic
growth by further penetrating existing customers, innovating new solutions and
gaining new customers. We have a diversified portfolio of businesses across
our segments, reducing our exposure to cyclical trends in any particular industry
or geography. We operate primarily on a contributory data model in which we
typically obtain updated information at little or no cost and own most of our
data. We augment this data with a growing set of public record and alternative
data as we develop new solutions and expand into new industries and geographies.
We also directly manage and control our technology, which provides us with an
efficient cost structure and allows us to benefit from economies of scale. Additionally,
our technology investments enable us to grow and expand our business with low
incremental cost, providing significant operating leverage.
Our business has a 48-year operating history and a long track record of providing
risk and information solutions to businesses and consumers while continuing
to innovate to meet their changing needs. Since our founding as a provider of
regional credit reporting services, we have built a comprehensive database of
U.S. consumers, which created a unique and highly valuable base to build solutions
that span many industry verticals and customer processes. From this base, we
expanded our operations by targeting new customers, industry verticals and geographies
and also entering into the consumer space. We have strengthened our analytics
and decisioning capabilities and acquired complementary datasets enabling us
to enhance our solutions, diversify our revenue base and expand into high-growth
verticals, such as healthcare and insurance. We have grown our global presence
to over 30 countries, creating credit reporting agencies in new geographies
and establishing strong international footholds from which we could expand into
other emerging markets. We also expanded the reach of our consumer solutions
by partnering with other market leaders and innovators.
we believe there are several key trends in the global macroeconomic environment
affecting the geographies and industry verticals we serve that will create increasing
demand for our solutions:
Rapid Growth in Data Creation and Application: Larger and more diversified datasets
are now assembled faster while the breadth of analytical applications and solutions
has expanded. Companies are increasingly relying on business analytics and big
data technologies to help process this data in a cost-efficient manner. In addition,
non-traditional sources of structured and unstructured data have become important
in deriving alternative metrics. The proliferation of smartphones and other
mobile devices also generates enormous amounts of data tied to consumers, activities
and locations. We believe that the demand for targeted data and sophisticated
analytical solutions will continue to grow meaningfully as businesses seek real-time
access to more granular views of consumer populations and more holistic views
on individual consumers.
Advances in Technology and Analytics Unlocking the Value of Data: Ongoing advances
in data collection, storage and analytics technology have contributed to the
greater use and value of data and analytics in decision making. As businesses
have gained the ability to rapidly aggregate and analyze data, they increasingly
expect access to real-time data and analytics from their information providers
as well as solutions that fully integrate into their workflows. We believe this
has made sophisticated technology critical for gaining and retaining business
in the risk and information services industry.
Greater Adoption of Big Data Solutions across New and Existing Industry Verticals:
With the proliferation of data, we believe companies across new and existing
industry verticals recognize the value of risk information and analytical tools,
particularly when tailored to their specific needs.
Financial Services Industry: The combination of increased regulatory capital,
additional compliance costs and the overhang of legacy assets is pushing large
segments of small-to-medium-sized business and consumer lending out of the banking
sector, and resulting in the creation of new specialty finance companies, such
as peer-to-peer lending platforms and online balance sheet lenders, which are
actively filling the void. These technology-enabled lending platforms provide
access to credit in a fast and efficient manner by utilizing sophisticated risk
assessment tools that leverage data, such as behavioral data, transactional
data and employment and credit information. At the same time, traditional financial
services companies are also increasing the use of applications and data in order
to address regulatory requirements, lower operating costs and better serve their
customers.
Insurance Industry: As consumers increasingly obtain quotes from multiple insurers
in an effort to lower their costs, insurers are trying to improve the accuracy
of their risk assessments and initial quotes. For example, insurance carriers
are using driver violation data to uncover offenses that will impact pricing
earlier in the quoting process so consumers have a more accurate view of the
premiums they will be charged.
Healthcare Industry: Greater patient financial responsibility, focus on cost
management and regulatory supervision are driving healthcare providers to use
data and related analytics tools to better manage their revenue cycle. For example,
to reduce collection risks, healthcare providers seek information about their
patients’ insurance coverage and ability to pay at the time of registration.
In addition, insurance discovery tools are being utilized to optimize accounts
receivable management, maximize collections and minimize uncompensated care
Increasing Lending Activity in Emerging International Markets: As economies
in emerging markets continue to develop and mature, we believe there will continue
to be favorable socio-economic trends, such as an increase in the size of the
middle class and a significant increase in the use of financial services by
under-served and under-banked consumers. In addition, credit penetration is
relatively low in emerging markets when compared to developed markets. For example,
using our database of information compiled from financial institutions as a
benchmark of credit activity, we estimate that less than 15% of the adult population
in India is currently credit active. Furthermore, the widespread adoption and
use of mobile phones in emerging markets have enabled greater levels of financial
inclusion and access to banking and credit. We expect the populations in emerging
markets to continue to become more credit active, resulting in increased demand
for our services.
Increased Management and Monitoring of Personal Financial Information and Identity
Protection by Consumers: Demand for consumer solutions is rising with higher
consumer awareness of the importance and usage of their credit information,
increased risk of identity theft due to data breaches and more readily available
free credit information. The annual growth in the number of consumers subscribing
to a credit monitoring or identity protection service has been almost 20% over
the last several years. In addition, the proliferation of mobile devices has
made data much more accessible, enabling consumers to manage their finances
and monitor their information in real-time. We believe these trends will continue
to fuel growth for our consumer business.
Increased Management and Monitoring of Personal Financial Information and Identity
Protection by Consumers: Demand for consumer solutions is rising with higher
consumer awareness of the importance and usage of their credit information,
increased risk of identity theft due to data breaches and more readily available
free credit information. The annual growth in the number of consumers subscribing
to a credit monitoring or identity protection service has been almost 20% over
the last several years. In addition, the proliferation of mobile devices has
made data much more accessible, enabling consumers to manage their finances
and monitor their information in real-time. We believe these trends will continue
to fuel growth for our consumer business.