UK borrowers are increasingly favourable to taking loans from Google, Amazon and Apple, with more than a third interested in borrowing from Jeff Bezos’ company.
The joint report by Equiniti Credit Services and Credit Kudos found that, although banks remained the lender of choice in 2019, 64 percent of UK consumers would be likely to consider a loan from a non-traditional brand, if it was well-known and had a good reputation. Loans from Google and Apple, for example, would be chosen by 26 percent and 21 percent of those surveyed, and Amazon by 34 percent.
The survey, conducted by ResearchBods, questioned 2,000 people in the year’s survey. Around 51 percent were women, and 49 percent were men. The age demographics analysed included 26 percent millennials (18–34), 35 percent, generation X (35–54) and 39 percent were baby boomers (55 and over).
“Consumers still consider a low interest rate to be the key factor when choosing a loan product,” says Sarah Jackson, managing director for sales at Equiniti Digital. “Interestingly, however, brand reputation was cited by one in four as the most important factor overall, overtaking low weekly or monthly repayments for the first time. That doesn’t mean people are loyal to any one brand, however. Only 14 percent said they would return to a lender they’d used in the past.”
As a result, lenders must focus on meeting customers’ digital expectations, Jackson added.
She said: “As technology continues to drive convergence across sectors, borrowers are rightly expecting a digital-grade service experience from their loan provider. While banks continue to play catch-up, there is a big opportunity for the tech-enabled brands that are known for delivering exceptional user experiences to make a play in consumer credit.”
The report also found that that consumer perception of open banking is moving beyond concept stage, presenting lenders with potential opportunities.
“Consumers are becoming increasingly aware of the benefits offered by open banking,” said Freddy Kelly, chief executive of credit reference agency, Credit Kudos. “Demand for personalisation and instant, consumer-centric digital services was evident in the report, with consumers becoming increasingly receptive to how their data could be translated into more personalised services, presenting a real opportunity for lenders.”