Nostrum Group questioned over 2000 individuals around their attitudes to borrowing and undertook extensive secondary research to produce this insightful report. Here is our summary, and you can read the full report here.
The research is completed annually, and this year’s findings found a continuation of the previously identified trend of consumers desiring to have more control over their accounts. Technology has become a vital part of financial institutions’ customer service strategy and the evolution of digital banking has transformed the way we manage our finances. According to a survey from Lloyds Banking Group, 96% of those questioned who banked online said they value the freedom to manage their money 24/7, and found they typically check their bank balances three times more frequently than those who do not use internet banking. This provides more opportunities for providers to differentiate their offering by aligning their services with how consumer wish to behave around financial services.
However, this wave of financial freedom and control adds a new layer of consumer confidence in shopping around and a reduction in customer loyalty. Nostrum’s report suggests that this could be due to a better economic environment with looser lending criteria as well as information dissemination to consumers. A staggering 86% use comparison sites to get the best deal, with the majority exploring five or more lenders.
When examining sectoral challenges the report stated how the lender needs to wrestle back control from intermediaries and introducers, gaining consumer trust and building loyalty. Without either of those, lenders risk being an undifferentiated service provider.
The report highlighted the growing awareness of alternative finance; “Research shows 84% of those asked would consider an alternative lender, with 33% likely or very likely to use one next time they needed credit.” Further, 3% would rather handle their financial services needs through Google, Amazon, Apple, PayPal or Square than from a mainstream bank. This last statistic looks set to rise over the coming years- but by how much is up for debate.
Cybersecurity was also a topic on consumer’s minds as 84% of those Nostrum asked were concerned about how much personal data financial companies held on them. Consumers are now wanting to take a more proactive approach to how their data is handled and taking an active role in who has access. Lenders need to do more to reassure consumers how they will treat and protect their data. As more of our financial assets become digitalised 1/3 of consumers would close their online account following a data breach.
“This year we see the consumer taking charge of their financial future. With more choice than ever, the borrower now has the power to steer the future of lending and drive innovation through their selections”. – Nostrum Group.
If you are interested in reading the full report – click here.
Richard Carter, Chief Executive of Nostrum Group will be chairing a panel at the one day tech conference FinTech North, happening on the 26th April 2017. Hosted by Whitecap, White Label Crowdfunding and FiNexus and taking place at aql in Leeds, this event will feature a number of well-known keynote speakers who will cover topics including innovation, alternative finance, big data and analytics, machine learning, digital identity and authentication. Read more here or sign up here.