There has been a shift in consumer attitude towards obtaining credit, according to a report by EQ Credit Services, part of EQ (Equiniti).
This shift described by EQ Credit Services as “new nervousness” appears to be most acute amongst the youngest generation (age 18-24), with over half of this group responding that they would only be prepared to borrow from a well-known high street lender.
In contrast, the so-called Generation X (age 45–54) seems less considered, with 24% indicating they would happily borrow from any lender, providing the rate was acceptable.
This contradicts the common assumption that new entrants and challenger brands with an all-digital or mobile-first proposition would be in high demand among the emerging generation of ‘digital native’ young adults. It supports a wider trend shown by the report that consumers of all ages are rushing toward ‘safe-house’ credit brands.
Richard Carter, managing director of EQ Credit Services, says: “Clearly the events of 2020 have ushered in a new nervousness. Not only is gross borrowing down, but just 20% would even consider borrowing from an alternative lender, down from 62% in 2019. This is a major shift, illustrated most surprisingly by the young adults of Generation Z, who are most likely to trust an established high street brand.
“Given the prevailing climate of financial anxiety post 2020, this would make sense, as 61% of all respondents still insist on speaking directly to the lender during their application. So clearly it is the brands that offer human expertise, experience and a compassionate and empathetic approach to individuals’ needs that will win out.”