BIIA member Creditinfo has published a very interesting report on the future of the lending industry: 2020 Global Lending Industry Trends. The report covers three major developments in the lending industry:
- Added value lending
- Full picture scoring
Full picture scoring is about the other types of data e.g. account balance, spending habits or even education and job position that can be used to assess the creditworthiness of an individual.
The report argues that whoever is producing data on users is inevitably a direct player or an indirect participant in the lending market. Therefore, traditional lending players will possibly have to form data partnerships and collaborate with existing popular B2C offerings in order to reach wider audiences, as well as identify and evaluate them.
Implications for Business:
Businesses are always looking to optimize their client acquisition and retention efforts. Added-value lending is not the result of optimization but rather a product of diversification, i.e. developing new channels and messages to attract users that might initially be uninterested in the core lending products.
The additional tools companies are providing consumers with a turning into brand-specific sales channels that can be developed to independently attract new customer and client segments. Another use – building ongoing and repeated service usage that helps building brand loyalty in a segment that is characterized by extreme rates of service switching.
Implications for Consumers:
Due to such added-value offerings in the market clients will have increased expectations about the way the product usage can be controlled, monitored and what outside help they can expect in different product usage situations. The question that lending players have to answer is how their product is going to impact their clients or even ensure their financial well-being in the future.