New Report Explores Increased Role of Online Lending

Introduction

Consumer attitudes toward using the online channel for borrowing are constantly evolving. Ongoing technological advancement as well as demographic and lifestage complexities are driving these shifts in attitude. Lenders must understand what consumers want from the online channel in order to maximize the advantages that it can bring to their business.

Scope

--  Using global data from our FSCI survey this report analyzes how
    consumer attitudes towards borrowing online are changing.
--  The report analyzes the causes of these shifts and identifies
    strategies that can be employed by lenders to attract & retain online
    customers.
--  The report discusses the opportunities and threats faced by lenders
    wanting to develop their online strategy.
--  A number of key trends have been identified that describe the impact
    of new technologies upon the market for loans.
    

Highlights

The online channel is becoming increasingly important for borrowing-related activity, such as searching for suitable deals. Across nearly all markets, consumers are more likely to take out loans online direct from a provider rather than use an aggregator site.

Continuing concerns over online security are a worry for consumers, which may become more of an issue as dependence on this channel rises. Among those who have never bought financial products online, there is considerable doubt as to the safety of borrowing online.

Web 2.0 technologies and the emergence of social networking give banks greater scope to engage with their borrowing customers, and enable them to target their loan offerings more effectively. Blogs, video content and personalized recommendations can all help to strengthen relationships and build loyalty.

Reasons to Purchase

--  Access the results of Datamonitor's Global FS Consumer Insight survey,
    enabling you to understand shifting online attitudes and behaviors.
--  Identify why these changes are occurring, and understand the future
    implications for online borrowing.
--  Identify actionable strategies that can help encourage consumers to
    engage with the online channel.
    

Topics covered in the report include...
Overview
    Catalyst
    Summary
    Methodology
    Table of Contents
    Table of figures
    Table of tables
    Introduction
    Financial Services Consumer Insight: dispelling the myths surrounding
     online behaviors
    Understanding consumers' attitudes towards financial services is vital
     for providers
    The Future Decoded
    Trend: Online activity continues to grow across the world
    The majority of online consumers have bought financial products and
     services online
    Older consumers are almost as likely to buy financial services online
     as younger consumers
    Insight: The online channel is increasingly important for
     borrowing-related activity
    There is significant regional variation in the propensity of consumers
     to borrow online
    Consumers' take-up of online borrowing facilities varies across
     countries
    Older searchers of online deals are more likely to convert to
     borrowers than younger searchers
    The wealthier consumers are, the more inclined they are to search for
     loan deals online
    The more financially knowledgeable consumers are, the more likely they
     are to search out deals
    Insight: Consumers exhibit caution when searching and applying for
     loans online
    Consumers prefer to apply for loans direct from a provider rather
     than through an aggregator site
    Consumers do not buy exclusively on the basis of price
    Price-focused consumers are much more likely to apply for loan
     deals online
    Insight: Consumers still desire human contact when searching and
     applying for loans
    Consumers cite a preference for dealing with people as a key reason
     for not buying online
    Financial intelligence and use of financial advice in borrowing
    Trend: Security remains a significant barrier to the further adoption
     of online banking
    Criminal activity directed at online consumers is on the rise
    Commonwealth Bank in Australia was subjected to three separate
     phishing attacks in just one week
    NatWest has introduced measures to combat the threat of phishing
    Insight: Many consumers harbor doubts about the safety of borrowing
     online
    Perceptions of safety are closely linked to previous experience of
     online searches and applications
    Confidence in security directly impacts upon propensity to borrow
     online
    Insight: Rising dependence on online channels increases vulnerability
     to attacks
    Social networking sites were compromised by hackers targeting a
     specific blogger
    Three individuals have been charged with stealing 130 million
     credit card numbers in the US
    Trend: Web 2.0 presents new opportunities for banks to engage with
     their borrowing customers
    Social networking is here to stay
    Social media have been adopted by all sections of the population
    Insight: Banks can exploit new media to increase customer engagement
    Providers need to carefully consider how to make use of new media
    Wells Fargo transforms the internet from a liability into an asset for
     itself
    Wells Fargo was the first bank to enter the world of blogging
    YouTube provided another opportunity for Wells Fargo to engage with
     its customers
    CompareTheMarket.com has scored a hit with its current 'meerkat'
     campaign
    The Compare the Meerkat campaign encompasses, Facebook, YouTube
     and Twitter
    The campaign has succeeded in boosting traffic to the
    CompareTheMarket.com website
    Other aggregators have been forced to respond to the success of
     the 'meerkat' campaign
    Insight: Providers should avoid using social media for traditional
     sales and marketing approaches
    Social media can help create a more conducive environment for
     building business
    Social media is a valuable tool for providers, but there can
     be pitfalls
    UBank makes a rare slip-up
    The furniture store Habitat was lambasted for exploiting the Iran
     crisis to promote itself on Twitter
    Insight: New technology enables banks to target their loan offerings
     more efficiently
    BBVA has launched an innovative online service that identifies the
     needs of individual customers
    Applications such as Tú Cuentas increase the possibilities for the
     cross-selling of loan products
    Several banks now boast the capacity to instantly communicate online
     with prospective loan applicants
    Web chat presents fraudsters with new opportunities
    Action Points
    Action point: Take advantage of Web 2.0 and social media to enhance
     customer engagement
    Banks should move beyond basic sales pitches focused primarily on rate
    Use new channels as a proxy for face-to-face contact
    Exploit new technology to create a richer customer experience
    Action point: Target loan products at older consumers
    Video and social media can be used to reach this market
    Action point: Take steps to improve online security, and perceptions of
     security
    Banks need to tighten up their security protocols to reassure customers
    Mobile technology can be incorporated into authentication procedures
    Greater efforts to educate and reassure the public are needed

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