Global information and insights company TransUnion recently hosted its UK Summit, bringing together leading names from banking, fintech and more, to discuss tackling the cost of living crisis, financial inclusion and next generation lending.
TransUnion’s latest Consumer Pulse highlighted the impact the current economic picture is having on spending. Nearly six in 10 consumers say they’ve decreased discretionary spend over the last three months, with the same proportion (58%) intending to make further reductions in the three months ahead. Many (62%) plan to shift their spending toward utility bills and credit card payments instead.
“With a sizeable portion of UK consumers reaching their expenditure limit, we as an industry need to be there for consumers to help them manage their finances and weather any financial uncertainty,” said TransUnion’s UK CEO Satrajit “Satty” Saha. “In these turbulent times, lenders need as comprehensive a picture as possible of a consumer’s financial standing to understand risk and to be able to provide appropriate finance. TransUnion offers differentiated and actionable insights into consumer behaviour that can support both businesses and consumers through this challenging economic climate – aligned to our mission of using Information for Good.”
As part of the panel debate on ‘Next Generation Lending’, TransUnion’s UK chief product officer Shail Deep and panellists covered new methods of reaching consumers, such as the ubiquitous buy now, pay later, which she described as “the hottest trend in lending”, or through heavy investment in digital experiences, something HSBC referred to as “core to meeting customer needs.”
Talking about digital acceleration in the industry, Shail Deep commented: “Over the last few years, we’ve seen a rapid shift to digital and app-first offerings. These developments seek to reach consumers, and capture market share through ease of access, informative user experiences, and of course, low-friction digital journeys. With these digital offerings gaining traction, consumer expectations have shifted away from traditional lending and payment products toward low-cost or free services with convenient digital experiences.”
Managing director of consumer interactive at TransUnion in the UK, Kelli Fielding, picked up the debate on customer experience, focusing on building brand loyalty and enabling trust with consumers as she hosted a panel discussion on financial inclusion.
Kelli Fielding explained: “We believe that credit inclusion is crucial to meeting consumer needs. In 2022, working with our partners, we’ve provided over 12 million consumers with access to their TransUnion credit information and enabled credit education. As consumers become more financially aware, they improve their credit profile and can access more credit products at better rates. As well as helping people to achieve life goals, such as buying a home or car, this also helps businesses and our economy to thrive.”
Four key steps for empowering credit inclusion:
- Credit education – helping people to understand their credit information and how it’s used is essential in supporting wider financial inclusion and something Lloyds Banking Group spoke passionately about at TransUnion’s Summit. This follows the successful implementation of its ‘Your Credit Score’ service, which saw almost one million of the bank’s customers check their TransUnion credit score for the first time in April this year, and currently has over four million of the bank’s customers registered for the service
- Supporting consumers through the cost of living crisis – with TransUnion’s recent Consumer Pulse study showing that over a quarter (26%) of consumers may struggle to pay all their bills in the coming months, lenders need to be engaging with customers, pre-empting any financial difficulties and offering payment plans where appropriate. TransUnion’s affordability solutions analyse historical trends and predict future consumer credit behaviour, helping lenders to understand their customers on a deeper level and make more accurate and better lending decisions
- Giving consumers a clear value exchange – Open Banking is becomingly more widely adopted and can help provide further insights and granular detail of an individual’s spending but relies on consumer participation. TransUnion’s Kelli Fielding called out the need to make clearer to consumers the benefits of sharing data, such as swifter onboarding, greater security, and potentially access to better rates when it comes to finding finance
- Broader awareness – fintech Monevo spoke of the need for credit education to extend beyond finance providers during the panel discussion. TransUnion shares this belief and recently launched a new free online teaching resource for UK schools: Credit Score Explained. It aims to give secondary school students the best start to their financial life, helping them learn about managing money and understanding from an early age the role that their credit report and score will play