New Research: How consumers are engaging with Lending 3.0

Today, we released our new report “Seeking out the alternatives: how consumers are engaging with the lending 3.0 landscape”, which details European consumer attitudes to and experiences of lending. We surveyed 2,000 European consumers, conducted in partnership with Propeller Insights, to learn about consumer preferences when it comes to lending.

Our report found that consumers are frustrated with the lending industry with 70% of consumers surveyed saying that the experience of getting a loan is a decade behind online banking. They also noted that they want more clarity from lenders, with 75% of respondents saying they “switch off” when prospective lenders use industry jargon and 80% believing that lenders try to obscure the final cost of a loan. This lack of clarity is often compounded by consumer experiences of lending: 55% of respondents say it takes too long for money to come in once a loan has been accepted.

The report shows that 59% of consumers surveyed feel the pandemic has opened their eyes to alternative finance, underlining the hunger for change in the lending industry. Younger generations are particularly keen to explore alternative lending, with 71% of respondents aged 18-34 saying their eyes were opened.

A few other key findings include:

• BNPL is the best-understood alternative finance option, with 77.6% of respondents saying that they have a good understanding of such services and 32% have used them

• 47% of consumers surveyed don’t know what peer-to-peer lending is and only 15% have actually used it

• Almost half (45%) of consumers surveyed don’t know what salary finance is

When looking to future technologies, the research showed that there is a real appetite from consumers to explore emerging technologies such as cryptocurrency, NFTs, and gaming for taking out loans:

• 49% of consumers surveyed would take out a cryptocurrency loan or would be open to doing so

• 69% of NFT owners surveyed would be open to using their assets as collateral for a better loan

• 40% of respondents play games where tradable gaming assets can be bought. And of those, 62% would be open to using these assets as collateral for a better loan

It’s clear that more needs to be done to support those looking for innovation in finance, particularly the younger generation. Our Lending 3.0 Report details the above, providing insights into what exactly consumers want from their lending providers moving forward, and how providers can better connect with the digital-era consumer.

You can access the full report here: https://www.marqeta.com/uk/lending-3-0-research