consumers' attitudes to borrowing 2014 - the emergence of the digital borrower
DESCRIPTION
As presented by Richard Carter at the 2014 Annual Consumer Credit Trade Association Conference in October 2014. This presentation provides some highlights from Nostrum's research. Further details of the report can be found at www.nostrumgroup.comTRANSCRIPT
CONSUMER ATTITUDES TO DIGITAL FINANCE
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• Consumer Attitudes to Digital Finance 2014
• ‘The Emergence of the Digital Borrower’
• 2002 consumers surveyed
• 991 men, 1001 women
• Balanced UK representation
NOSTRUM’S RESEARCH
THE DEMANDING CUSTOMER
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89% rank interest rate as most important factor, followed by transparency of information (80%)
71% expect cash in 24 hours or less
Consumers want the benefits of the payday market (eg instant decision-making and funds
transfer) but have become more rate-sensitive
Source: Nostrum Consumer Attitudes to Digital Finance research 2013 & 14
THE ONLINE CONSUMER
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Almost all research into loans is done online, with 84% using a computer.
15% would use a device including a smartphone or a tablet.
90% own a smartphone (up 25% on 2013)
Source: Nostrum Consumer Attitudes to Digital Finance research 2013 & 14
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THE ONLINE
CONSUMER
Digital nativesDesirable regularsFuture natives
Capable massesTraditionalists
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• Loves her iPhone and iPad
• Manages her life online and via apps
• Hasn’t set foot in a bank for several years except when her
Gran gave her a cheque for her birthday, which took her
several weeks to get round to paying in
• Doesn’t need to borrow money very often but is confident
handling her finances online
• Lately she’s been experimenting with various contactless
payments applications
Helen, 23 years old
DIGITAL NATIVE
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Tom, 42 years old
• Has been with his bank for over 20 years
• Owns a smartphone but prefers to surf the web from
his computer
• Manages his bill payments online but if he has a query
he likes to ring the call centre
• Uses comparison sites when he is renewing his home
and car insurance, but he only takes out policies with
companies he has heard of
• Has a facebook account and likes to read what his
friends are doing, but rarely posts anything
TRADITIONALIST
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Dave, 25 years old
• Organises his life via his smartphone
• Keeps in touch with his friends via Facebook,
WhatsApp and Instagram
• Orders his groceries online each week and does his
clothes shopping on sites like ASOS
• Manages his banking online but when it comes to
borrowing money he likes to speak to someone at the
finance provider
• Feels his limited knowledge means that’s the sensible
thing to do, although he’s gaining confidence as he
gets more experienced
FUTURE NATIVE
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Gina, 40 years old
• Spends a lot of time online and loves a deal
• Regularly visits discount websites and only buys
clothes from her favourite retailer when they have an
offer on, which she knows they will do every few
months
• Uses comparison websites and will growth the
cheapest price available, irrespective of whether or not
she’s heard of the brand
• She’s influenced by online reviews and ratings
CAPABLE MASSES
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James, 45 years old
• Confident managing all aspects of this life online,
particularly his finances
• Has bought numerous items on credit and has taken
out several loans in recent years
• Very familiar with the borrowing process and is happy
to take out and manage loans without talking to anyone
or visiting a branch
• As a regular borrower, he finds it useful to use an
online app where available
DESIRABLE REGULARS
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OTHER TRENDS • Bank loans continue to be the most recognised product, with
93% awareness - but the banks have their challenges
• People who have taken out a loan in the last 12 months are
less brand-sensitive and more influenced by interest rates
• 36-45 year old borrowers have more knowledge than 18-35s
about niche products such as logbook loans (36% vs 17%)
peer-to-peer (35% vs 21%)
• Awareness of peer-to-peer lending has increased 87% since
2013
• 40% of people surveyed have never taken out a loan – this is
an opportunity for lenders who can offer cost effective finance
that aligns with people’s lifestyles
Source: Nostrum Consumer Attitudes to Digital Finance research 2013 & 2014
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THE FUTURE • The next 12 months will be a defining period for online lenders
• Adoption of technology over the entire consumer lifecycle is
inevitable
• Children aged 12-15 only conduct 3% of their communications
on the telephone
• 94% of their communication is text based
• The digital borrower is set to be the dominant borrower in 2015
and beyond
• Lenders who stay in tune with consumer attitudes and maintain
visibility will be well-positioned to be their lender of choice time
and again
Sources: Nostrum Consumer Attitudes to Digital Finance research 2013 & 2014
Ofcom Adults’ Media Use & Attitudes Report – April 2014
LET’S MAKE LENDING, CHEAPER, FASTER AND SAFER
putting the customer in control of their finances, any place, any time and on any device.
The challenge is to ensure you satisfy your customer base.
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FOR OUR FULL REPORT ON CONSUMER ATTITUDES TO
DIGITAL FINANCE VISIT OUR WEBSITE:
WWW.NOSTRUMGROUP.COM