Q €“ Kelsey Zhu: Got it. Super helpful. And then just on Boa Vista, I think that would be a really nice addition to your LATAM portfolio. And I was wondering if you could give us a little bit more color on how you’re thinking about their data assets and their strategy. On the merger — on the acquisition call, you mentioned Boa Vista is very strong regionally. Is there a strategy to expand them kind of more towards nationally. Would appreciate any color you can share with us.
A €“ Mark Begor: Yeah, sure. So first, we’re working to try to finish the acquisition. We’ve been negotiating since December with the Board of Boa Vista. We’re pleased with the progress, and we’re — we want to conclude that. So that’s kind of priority number one. But everything we talked about in December, we’re still quite energized about. First and foremost, we would bring all of the Equifax capabilities to Boa Vista, whether it’s our new cloud technology our products from around the globe, our big platforms like Ignite and InterConnect, we’d really bring their capabilities up substantially versus what they have today as a standalone number two credit bureau in the market. So that is a real positive. And the underlying business is performing exceptionally well.
They’ve got strong double-digit growth. It’s a big market in Brazil that’s expanding. There’s a lot of alternative data available there that we would want to focus on. We just see a bunch of potential. As we pointed out, they have some unique data outside of the normal banking data that’s unique to Boa Vista, which is another element that we like about it. So we’re focused on completing our negotiations, so we can try to move forward in closing it.
Kelsey Zhu: Thanks.
Operator: Thank you. Our next questions come from the line of Andrew Jeffrey with Truist. Please proceed with your questions.
Andrew Jeffrey: Hi. Good morning. Appreciate you taking the question and all the details as usual guys. Mark, one of the things that happened, obviously, that drove your mortgage growth before the sort of collapse of the overall market was greater digital engagement. And I think you’ve talked to mortgage shopping a little bit today, too. Has — given that mortgage volumes are down so much, purchase and refi, do you think there’s anything that’s structurally changed in the market such that your customers either want to engage more digitally with you or less digitally? So I guess what I’m asking is when mortgage recovers, is that lever, which was such a nice driver for you when volumes were booming, is that still there? Is it — do you get more leverage, less leverage, about the same? Can we think about that structurally, if anything has changed?
Mark Begor: Yes, it’s a great question, and we believe that it’s more leverage or more opportunity to really drive our digital solutions. And if you think about a mortgage originator, that clearly is under significant financial pressure now because of the reduced — the reductions in volumes. They’re looking to improve their productivity, and the only way to improve your productivity is through instant decisioning. And the goal that they always have and the leading players in the space are working to really shorten the time frame between application and closing. As you know, it’s a very long time frame and that time frame has cost involved in it. It also has risk involved in it around the consumer changing. It has risk involved in it, and the consumer deciding, I’m not going to buy the home, meaning you’ve spent a bunch of COGS on it.
And you’ve heard us talk before, the average mortgage originators spending $5,000 of expense in a mortgage application if they can shorten the time and take labor out of it by using instant data. That’s a positive. So we expect our conversations around using our Instant data, particularly around TWN, to accelerate in this environment, meaning we’re going to become more embedded and more instant, which has been a trend, as you know, over the last couple three years, even in the stronger mortgage environment. Some of that over the — in 2020 and 2021 was challenged by the — just the pace of the volume they had. They didn’t have time to really focus on changing their processes. Now they do. So it’s clearly a focus of ours, and we think a positive going forward that Instant is going to drive speed and drive productivity.
And that doesn’t only apply to mortgage, that applies to really all our verticals. Think about government, think about talent. If we’re able — they’re under cost pressure today. And those verticals, whether you’re a background screener or a government agency, improving your productivity and improving the speed of the service you deliver is very, very valuable to them. And the way to do that is to use instant data from Equifax like our twin data, our income and employment data.
Q €“ Andrew Jeffrey: That’s very helpful. Thanks. I appreciate it.
Operator: Our next question is coming from the line of Andrew Nicholas with William Blair. Please proceed with your questions.
Q €“ Andrew Nicholas: Hi. Good morning. Thanks for taking my questions. I wanted to first touch on a comment you made about a win for EWS and Verification Services within the U K, I believe. I wanted to ask, I think you said 40% of the private sector employee base, if I heard correctly, if you could clarify that. And then just curious, is that an exclusive relationship? And how important could that relationship be to getting a foothold or the pole position in the UK market, especially given a competitor of yours ambitions to build a similar business there?
A €“ Mark Begor: Yeah. I think we’ve been quite clear that over the last couple of years, as we completed the cloud, we were looking for new international markets to take Workforce Solutions into. As we talked on the call earlier, we’ve been building out businesses in Australia and Canada, and then most recently, a year ago, really in the first quarter, we launched our UK business using our new cloud capabilities and started to go into the market and talk to both individual contributors and payroll processors around adding data records. So we’ve made some positive traction over the last, I guess, four years in Australia and four years in Canada and over the last 12 months in the UK. We’re looking to continue to grow and expand our capabilities there.
We had — I don’t know the number, but we’ve had a handful of agreements signed in the UK, and we also signed an agreement with an entity that has tax data that is a proxy for income and employment. So that’s been a positive addition in the UK. That gives us a lot of coverage so we can start rolling out solutions there. In Australia, we’ve got — had an agreement with a pension administrator that brought that kind of data in, which is — and also has the equivalent of W-2 type data in it that’s quite accretive also. So it’s clearly part of our strategy to continue to build out and invest into international footprint for workforce.
Q €“ Andrew Nicholas: Great. Thank you. And then for my follow-up, I just wanted to ask a question on margins. It looks like you’re expecting 30% plus type margins exiting the year. Is there any reason not to believe that’s a good starting point for 2024? And I know you’re not going to give guidance for that year, but mostly asking about if there are kind of cost-saving actions that you expect to still be underway that late in the year or if that fourth quarter number is a decent run rate to think about kind of a stable base for out years? Thank you.
