Against a backdrop of political and economic uncertainty, UK borrowers turned to established and familiar lenders in 2019, according to a new research report* launched today by Equiniti Credit Services and Credit Kudos.

Entitled A Brands’ New Decade: Loyalty on loan as consumers consent to data-driven lending services, the report finds that although banks remained the lender of choice in 2019, 64% would be likely to consider a loan from a non-traditional brand, if it was well-known and had a good reputation. Loans from Google and Apple, for example, would be chosen by 26% and 21% of those surveyed, and Amazon by 34%. With political uncertainty resolved, the report’s findings now suggest a ready-made market for brands that can move quickly to deliver attractive credit products.

“Consumers still consider a low interest rate to be the key factor when choosing a loan product,” says Sarah Jackson, Managing Director, Sales at Equiniti Digital, which incorporates Equiniti Credit Services, the UK’s leading consumer credit technology and outsourced service provider. “Interestingly, however, brand reputation was cited by one in four as the most important factor overall, overtaking low weekly or monthly repayments for the first time. That doesn’t mean people are loyal to any one brand, however. Only 14% said they would return to a lender they’d used in the past.”

One area where lenders should focus, says Jackson, is on meeting the growing expectations for digital, consumer-centric services: “As technology continues to drive convergence across sectors, borrowers are rightly expecting a digital-grade service experience from their loan provider. While banks continue to play catch-up, there is a big opportunity for the tech-enabled brands that are known for delivering exceptional user experiences to make a play in consumer credit. Established lenders need to work hard to make up ground here. Delivering a first-rate UX will be key in ensuring they protect their lender-of-choice status.”

The report also suggests that consumer perception of open banking is moving beyond concept stage, presenting lenders with a number of exciting opportunities to expand hypothetical use-cases into real revenue-driving products and services.

“Our research highlights that consumers are becoming increasingly aware of the benefits offered by open banking,” comments Freddy Kelly, CEO, Credit Kudos, an FCA-authorised Credit Reference Agency and Account Information Service Provider (AISP). “Demand for personalisation and instant, consumer-centric digital services was evident in the report, with consumers becoming increasingly receptive to how their data could be translated into more personalised services, presenting a real opportunity for lenders.

“By leveraging this data, lenders can gain a better understanding of their customers, offer new transaction data-based products which can flex and adapt to fit changing individual circumstances and, as a result, create a more central-role for themselves in the lives of their customers.” 

The full report also explores the impact of the ‘Brexit limbo’ on the credit market, the apparent decline of traditional price comparison sites and consumer attitudes to new technologies, like AI. Importantly, it identifies where opportunities for credit providers lie and offers support on how they can create new, personalised services which deliver for consumers of all ages.