EQ Credit Services Report Reveals the “New Nervous”

EQ Credit Services, part of EQ (Equiniti) has released its latest UK research report into the unsecured lending sector. This reveals some startling consumer attitude shifts including a ‘new nervousness’ characterising the current credit market.

Surprisingly, this appeared 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 ‘safehouse’ credit brands.

Richard Carter, managing director of EQ Credit Services, commissioned and launched the report. He adds “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.”

Findings in the report also reinforce the need for an appropriate balance between human interaction and cutting-edge technology. Whilst the human touch remains important, data still holds the key to successfully supporting customers, especially when it comes to identifying the growing number that have found themselves more financially vulnerable after the turmoil of the past year.

Richard Carter concludes “The lenders with agile systems and technologies that enable them to adjust quickly to their evolving responsibilities and changing customer circumstances will stand out in the market, both to customers and to their supervising authorities.”