Consumer finance trends or where the industry will be in 5 years

Consumer finance is a subject that everyone has already faced or will soon face as an introduction to the subjects of personal finance and financial wellness.

Nowadays, cheap, low-risk and household products-based loans (think of Klarna or Zip) are something that introduces first-time users to the world of lending and leads customers to more complicated instruments like credit cards or mortgages. However, the trends are here – all the financial area is changing across 3 main pillars. Here are the trends that we clearly see and support at JO1N.

1. Customer satisfaction is not an advantage anymore. It is a minimum requirement.

An obsession for a happy client was a distinctive characteristic of the best examples in any industry. Digitalization made it different.  With widespread access to online, public opinion, free VC money for the newcomers as well as any personal comment or complaint has become a part of what product is for every next user.  Reviews, Trustpilot ratings, posts – all of that is considered even before the first trial of the service. As a result – YOU MUST WORK closely and thoroughly with the level of satisfaction of your customers. Otherwise, IT WILL WORK itself against your product.

2. Consolidation is occurring not only between entities, but among product lines as well.

The trend of the last 2 years – super-apps.  Everything in the same place, the whole range of services within 3 clicks on your smartphone.

So, what happens? There will be fewer and fewer “monoliners”. The hybrid products are appearing: opening your first debit account means the best FX-rate products, which leads you to some special offers for credit cards, convenient cryptocurrency purchase, the ability to send GIF with the transaction (hey Monzo ) and lends somewhere close to a happy mortgage.

How could it look like on the UX side? Probably, it is easier to have a single account with “split-it” options on any of the operations you are making. Sounds even better if we add some open-banking details cooking up the most precious customer profile.

3. Cheap capital is a problem. But there is a solution.

Low interest rates, high VC activities, the era of unicorns. What does it mean for the operational side of the financial industry? Huge budgets spent on acquisition, only growth is what really stays important – customers are being captured almost at any cost. Well, it sounds like it will be even more expensive to find and attract your client .

And here the good old pal JO1N comes! Cheap, low-risk and household products-based loans that will give a smooth introduction to both a financial institution, that could look closely at a client), and the consumer itself, having one’s need solved and happy with a new feature at home.

So, in the end, seems that consumer finance is dead. Long live the consumer finance!