Change. What change?
2007 seems like such a long time ago. Pre-recession and at the height of a housing boom, we were such carefree (and careless) souls. Girls Aloud and Sugababes ruled the charts and drumming gorillas were selling chocolate bars. Happy days indeed.
But very soon the biggest financial black cloud the world had ever seen turned into the biggest black hole, sucking us all in and plunging the global economy into five gloomy years of recession and regret.
Things had to change. The lessons that were learnt have given rise to new rules and new attitudes towards lending and borrowing.
2014 was an important year for change with the FCA stepping into the consumer credit market as regulator and the MMR redrawing the mortgage landscape. Anyone who has attempted to borrow money in the last six months would barely recognise the process from 10 years ago. Tighter controls and criteria may well afford us greater protection but the extra complexity should deter most people from applying for a loan ever again.
Except that it hasn’t.
Since Q4 2014, the availability of personal loans has increased and the number of credit card applications has shot up, reaching levels not seen since 2007. Increasing property prices and growing consumer confidence has driven up demand for credit and, like the pre-2008 era, the market is extraordinarily competitive with lenders of all shapes and sizes vying for position. It would appear that whilst the governance may change, the need to lend, and consumers’ desire to borrow, is just the same.
What has definitely changed is the process of getting advice and finding a lender. In meeting the needs of customers in a highly regulated and highly competitive sector, marketers have to think a little differently:
• Search is now the key acquisition driver with the majority of UK consumers researching their next mortgage online. With Google stepping into the comparison market, things will only become more competitive. The challenge is to stand out and maintain cost effectiveness in the face of competitors with bigger budgets
• With brokers playing a greater role in the application process, finding ways to initiate and build direct relationships with new customers is vital
• The C word – content. It’s a big thing in just about every sector but what about financial services? What is the nature of the content? How can it be compliant? And can it deliver a ROI?
• When negative customer feedback can be broadcast to the public in an instant, reputation management becomes a major issue for lenders seeking to defend their credentials to an increasingly savvy and cynical marketplace
• Social media has emerged as a powerful way to propagate brand awareness, drive acquisition and support retention. But as social is normalised into our routines, how are the likes of Facebook and Twitter integrated into the requirements and restrictions of financial services campaign planning?