Building Consumer Trust Will be a Key Driver of Growth for Finance Providers

Released today, TransUnion’s new white paper, which examines consumer credit behaviour in the UK, unveils key trends and themes for lenders to note as we embark on a new decade.

Consumer Credit 2020 is based on extensive research with UK consumers, comprising two nationwide surveys, internal research carried out by TransUnion, and interviews with industry experts. It also incorporates findings from TransUnion’s US consumer study** carried out by Javelin Strategy and Research, introducing a global perspective.

The findings suggest an enhanced level of consumer confidence when it comes to finance. More than half of UK consumers (53%) say they want to improve their financial situation in the next 12 months and can see a path to do so, and three in five (62%) are feeling confident that their financial situation will remain stable in 2020.

However, the findings demonstrated some recognisable challenges. Only two in five (44%) feel in control of their finances and whilst the majority (61%) say they have the capacity to withstand a financial shock, it seems that many routinely turn to credit to deal with any unexpected expenses.

The report provides key data points to show that in order to establish longstanding relationships with consumers, providers need to build trust and empower their customers with greater access to credit information and the knowledge needed to make more informed financial decisions.

“Lenders need to understand the challenges consumers are facing,” said Satrajit “Satty” Saha, CEO of TransUnion in the UK. “Our analysis shows a clear need for more education around credit and finance among consumers, along with an affirmation of the importance of consumer trust as a driver of growth for financial institutions. More than a third of British consumers (36%) make their choice of finance provider based on trust.”

Consumer education can play a role in building trust, as well as helping customers to access products and interest rates tailored to their situation. Many don’t understand the role that credit reports and scores play in their access to finance. Two thirds of British consumers (66%) don’t know their credit score, and just 38% are confident they know what information is stored in their credit report.

Tools such as TransUnion’s CreditView – a white-labelled, interactive solution for lenders that provides consumers with access to their TransUnion credit report and score – can help engage customers, increase brand loyalty and personalise offers.

“Consumer awareness around credit scores leads to a generally more well-developed credit market, as is the case in the US,” explains Kelli Fielding, managing director of consumer interactive at TransUnion in the UK. “By taking control of their credit report, consumers can take steps to improve their score if necessary, and ensure that they are able to access the most competitive rates.”

For finance providers in the UK, the report highlights key areas of focus to drive growth and help consumers access the finance they need; both for everyday living and to achieve their financial goals.