As a B2C finance provider do you really know what your borrowers want? And if you do, are you truly meeting their credit needs?
To help lenders better understand the expectations of modern consumers, Marqeta spoke to thousands of people across Europe.
1. Breaking with tradition: modern tools offer a chance of fairness
It might come as no surprise but we found that lots of people who had been declined a loan by a traditional lender felt their application would have been a success if other factors had been taken into account.
This means that better data connectivity between lender and borrower can achieve credit outcomes that work for both sides – while presenting a challenge to traditional providers to embrace digital transformation.
2. Lags in the system: catching up with current accounts
A stand-out insight from the research was that consumers felt their lending user experiences were about 10 years behind current accounts.
To bring things up to date, lenders should
introduce real-time notifications on disbursements and spending, personalised offers and rewards for good behaviour and advice on how to get the most out of the loan.
3. Subscribing to a new approach: business lessons from streaming services
With the right proposition in place, we found that many borrowers would be interested in a subscription based relationship with their lender.
This involves offering exclusive interest rates, an improved rate over time for a good repayment record and access to other useful financial services.
4. Bridging the crypto gap: financing another way to use digital assets
Innovators are bringing the crypto and fiat currency worlds closer together and finance providers have a unique opportunity to become a part of this trend.
Although our research showed that cryptocurrencies, NFTs and tradeable gaming assets were yet to reach a mass adoption tipping point, it’s clear there is a growth opportunity for lenders. By offering loans secured against digital assets, it’s possible to reach new and sometimes younger audiences.
5. Taking control: card-based lending to drive customer satisfaction
Both borrowers and lenders told us that they appreciated having more control over their relationship and agreed that disbursing funds via a Visa or Mastercard offered several benefits.
These include being able to take advantage of better rates attached to spending with certain categories, the ability to freeze a card to deter or prevent poor spending behaviour and the real-time data flows that are enabled by modern card products.
Join Marqeta’s Lending 3.0 thought leadership community
Interested in our Lending 3.0 market research? Are you a finance provider with insights and experiences you’d like to share? If the answer’s yes, please contact Marqeta for a chat about our API Chronicles thought leadership programme.