Alex Oliver writes:
There are some perks in being a consultant, and being invited to speak at a conference in Paris on managing change in consumer credit and debt behaviour, as I was last week, is one of them. The conference was organised by the European Financial Management and Marketing Association, and was hosted at the elegant Paris Concorde Opera hotel. The two day conference tackled a number of difficult credit management issues, including the best approach to sustainable and responsible lending in an environment still reeling from the shock of the global economic crisis, where regulation is increasingly restrictive and consumer demand remains sluggish.
Drawing on our Global Monitor international trends data, I explored the implications of the ‘New Normal’ for European consumers whose attitudes in relation to spending appear to have shifted permanently. Aspirations have changed: the era of ‘bling’ and platinum credit cards is behind us and although consumers may still be willing to spend, they need to be able to justify doing so. They’re searching for reassurance around value and reduced risk. And regardless of pressure from the regulators, consumers themselves are scrutinising choice in a way they may not have done before and looking for new tools to give them greater levels of control.
Other speakers also explored the attitudes and behaviours of the Millennial generation and whether this target is really attractive to credit providers or too fickle and costly to be of real value. Our data suggests the challenge for financial services providers is to be authentic and transparent in their dealings with this group, offering regular communication through multiple channels and inviting, sharing and acting on honest feedback.
The potential prize, for those willing to invest in the relationship, could be a loyal base of young customers, who become brand advocates and – as illustrated a fellow speaker from FICO with reference to US trends – are also willing to prioritise repayments for those credit providers with whom they feel affinity above others – thus also reducing the credit risk for providers who get it right.
The photo is from Donald Townsend’s photostream, and is published under a Creative Commons licence. It is used here with thanks.