COSTA MESA, Calif.–A new study from J.D. Power has found trust in lenders actually increased during the past year and, perhaps even more surprising to many, traditional lenders actually outperformed fintechs in a number of critical areas.
But it was a well-known brand best known for its credit cards that was rated highest by consumers in overall customer satisfaction.
In releasing its new analysis, J.D. Power noted 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.
‘Dramatic Shift’
The analysis was released as part of the J.D. Power 2021 U.S. Consumer Lending Satisfaction Study.
"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.”
Key Findings
According to J.D. Power, key findings in its most recent study found:
- Customer Satisfaction Was Flat for The Personal Loan industry: Fintech lenders see their overall satisfaction scores decline five 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 see overall customer satisfaction scores rise four points this year, J.D. Power said.
- Trust in Lending Partners is up Year over Year. “While the pandemic forced lenders to change how they do business overall industry trust improves,” J.D. Power reported. “Traditional lenders significantly outperformed fintechs in putting the customer first; providing guidance; is aligned with my social views; provides honest communication; treats people fairly; and provides more reliable technology.”
- Easy-to-use Websites and Mobile Apps Gain Even More Importance. Lenders were forced to rely on digital means during the pandemic, especially traditional lenders, noted J.D. Power. “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.”
Other Findings
Om the J.D. Power study, American Express (874) and Discover (874) ranked highest in a tie among personal loan lenders in overall customer satisfaction. Citi (864) ranked third.
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.