Five Changing Dynamics in Consumer Finance and Cards

Customer-first, near-zero marginal cost operating models will emerge as the new standard for successful players, supported by end-to-end digital delivery. Covid is accelerating this and exposing weaknesses in fintechs and legacy lenders who are lagging in digital capability.
Non-prime consumer population will grow by circa 100% by the end of 2021 as a result of Covid; representing the largest growth opportunity in consumer lending.
Risk-adjusted margin management will move from a static, customer-level discipline to transaction-level, real-time decisioning as capabilities developed by large tech companies are translated to consumer finance businesses.
Lenders are being disintermediated and losing direct access to new customers by the growth of online shopping for financial products through product comparison websites and the reduced importance of physical bank branches.
Point of sale finance will grow. New payment propositions are redefining the commercial relationship between the retailer, consumer and lender, facilitated by app technology and and transaction-level underwriting.

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