Pub. 6 2018 Issue 3

www.uba.org 22 A fter years of sustained practicality, consumers are borrow- ing again at a record pace. Many are beginning home improvements, buying new homes and autos, or financing their children’s educations. Consumer confidence reached 100.7% in October 2017 1 What is driving the rosier outlook? Consumers are generally positive about their financial situations with consumer con- fidence reaching 100.7% in October 2017. Strong job growth and improved business conditions are also fueling consumer spending. 1 Rising confidence, increased spending As consumer expectations and spending increase, so does bor- rowing. Credit inquiries increased by three million, to 176 mil- lion, in just six months. 2 Total household indebtedness reached $11.85 trillion, a 2 percent increase over the prior quarter. 3 Consumer borrowing — led by automotive — is revving up Since the recession, consumers have been very confident taking on more overall debt. Auto loans and leases produced re- cord-setting volume. Revolving consumer credit outstanding – loans that are given as a line of credit to be used when the consumer needs them, like credit cards – is inching toward $1 trillion. 4 In addition to their increased economic confidence, consumers are more trustful of nontraditional channels, i.e., digital, to purchase products and loans. These disruptors contribute to increased lending competition, propelling financial institutions to be more resourceful in identifying, targeting, and acquiring creditworthy consumers. Making borrowing easier is more important than ever As technology improves and access to data increases, so do customer expectations for superior, friction-free service. Finan- cial institutions know the importance of being customer-centric. This year’s trends show 61% of organizations rank it a top three, compared to 54% last year. The trend around the use and appli- cation of data also increased in importance from last year, with 57% placing it the top 3 for 2018, compared to 53% for 2017. 5 Better use and application of data, which strongly influences customer experience, also increased in importance from last year, with 57% of those surveyed placing this in the top 3 for 2018, compared to 53% in predictions for 2017. 6 W hy a holistic approach to marketing makes sense To generate sustainable loan growth today, financial institutions must rethink how to communicate with potential borrowers. Today’s consumer is more informed than ever with more lend- ing options from which to choose. With the speed and conve- nience of digital and consumers now in the driver’s seat when choosing their lenders, modern day financial markets must look beyond conventional, seasonal push-marketing tactics and focus on strategies that engage prospects and account holders and achieve lending goals. A great way to start is by redefining “po- tential borrower” as anyone who pre-qualifies for a loan, credit card, or other product with your financial institution, whether Stephenie Williams, Market Strategist for Lending Solutions, Harland Clarke WAYS TO TRIGGER LOAN MARKETING SUCCESS