A new report from Equiniti Credit Services has found consumer motivations for borrowing split between funding aspirational items such as holidays and household goods (47%), and managing or consolidating existing debt (53%).
The report has also saw a major age group difference in attitudes to technology with 73% of millennials and Generation X happy to research a loan on their smartphone, compared with just 9% of baby boomers.
The report, entitled Great Expectations: The Demanding Market for Credit, highlights variations in attitudes between age-groups that are creating new opportunities for established and alternative lenders alike.
One such opportunity relates to how lenders manage customers whose credit applications have been declined.
“Rarely do lenders focus on applicants to whom they have declined credit,” said Richard Carter, managing director of Equiniti Credit Services.
“This is a mistake. 68% of those surveyed indicated that they would likely accept an alternative loan offer at a higher interest rate, if it was offered to them immediately. Agile technologies are the key to unlocking these revenues. We connect lenders to our whole-of-market panel and match declined customers with affordable, alternative products which they are likely to qualify for. ‘White labelling’ products in this way is a real-world example of how Equiniti Credit Services can deliver measurable revenue into any lender, irrespective of scale, almost immediately.”
The report brings into focus the need for lenders to not only digitise their loan services, but to personalise them precisely to the varying characteristics of different customer groups.
Carter said: “Lenders that have the foresight to invest in moulding their products for different customer segments while using agile technology to enhance their operational efficiency stand to prosper the most.
“The power of this combination will enable much needed competitive differentiation in a rising market. Going digital is one thing. Going digital in a way that chimes with different customer groups is something different entirely.”
The full report, which also explores consumer attitudes toward the use of biometric and e-signature technologies, social media data in credit decisioning, and loan comparison sites, is available for free download here.