J.D. Power has released its 2021 U.S. Consumer Lending Satisfaction Study findings, which could prove useful to mortgage lenders that are interested in consumer trends in financial segments. (Hint: Certain technology plays a key role in customer satisfaction.)
According to the J.D. Power, the consumer lending space was severely disrupted during the COVID-19 pandemic as a combination of stimulus funding, record high mortgage refinance volume and a tenuous economy crimped the consumer loan market.
The study found that customer satisfaction was flat for the personal loan industry, with fintech lenders seeing their overall satisfaction scores decline four points (on a 1,000-point scale) this year, due to slower application approval times and tighter credit criteria.
By contrast, traditional bank and credit card-branded lenders saw overall customer satisfaction scores rise four points this year.
Trust in lending partners was up year over year, according to the report. While the pandemic forced lenders to change how they did business, overall industry trust improved.
Traditional lenders significantly outperformed fintechs in:
- Putting the customer first
- Providing guidance
- Aligning with customer social views
- Providing honest communication
- Treating people fairly
- Providing more reliable technology
Easy-to-use websites and mobile apps gained even more importance during the pandemic as lenders were forced to rely on digital means of interacting with customers. Fintech customers were more likely to use their personal computer to engage, while traditional lenders relied on mobile applications.
No matter how they were accessed, secure and easy to use sites were high on consumer wants, as they continue to compare site use against all of their other web interactions.
“The consumer lending landscape shifted dramatically over the past year and consumers need to understand that this shift will be permanent,” said Jim Houston, managing director of consumer lending and automotive finance intelligence at J.D. Power. “To attract and retain customers, personal lenders need to deliver easy-to-use technology and adapt communication channels to market demands.”
The J.D. Power U.S. Consumer Lending Satisfaction Study measures overall customer satisfaction based on performance in three factors: offerings and terms; loan management; and application and approval. The study is based on responses from 2,467 personal loan customers and was fielded in December-February 2021. The study also includes Home Equity Line of Credit (HELOC) customers, but this segment was not award-eligible in the 2021 study due to a lack of lenders with sufficient sample size.