The demand for credit information has increased as consumers seek to manage their credit health during these difficult times. Financial institutions that empower consumers to access, understand and apply this information will likely be well-positioned for rapid recovery in the “new normal.” In this blog, Roman Mykhaylyshyn, Head of Consumer Solutions, Canada, explores the dynamics of credit monitoring and consumer engagement, their impact on credit behaviour, and subsequent implications for lenders’ growth strategies through the crisis and beyond.
Market uncertainty, such as we’re experiencing now, creates new expectations as well as new opportunities for financial institutions.
In terms of expectations, it’s a sound — and likely, necessary — industry practice to support the most vulnerable customers and address immediate risks. Our Consumer Financial Hardship studies, which track the perceived impact of the COVID-19 crisis on Canadian consumers, show that over 50% of consumers say their household income has been impacted by reductions in work hours, the closing of small businesses or loss of jobs.1
However, lenders also need a prudent growth strategy focused on finding opportunities and putting measures in place to prepare for the rebound.
Helping consumers engage with their credit information during turbulent times is one such measure. Access to credit information can have a positive impact on consumers’ behaviour, financial decisions and credit health.
In the consumer first era, people are more aware of their information and want to be able to access it on demand. At TransUnion, we’ve witnessed a trend: A growing number of consumers monitoring their credit information more often. And with digital adoption now in full effect, consumers expect personalized, relevant experiences on mobile or online platforms.
Organizations that respond to this demand for information with appropriate tools and resources will be able to improve consumer engagement and set themselves up for growth.
Our data shows over 5 million active consumers in Canada are using TransUnion credit monitoring services. Around 5.6 million used a TransUnion credit monitoring solution in the last 12 months, while upwards of 2.3 million monitored their credit in March 2020 — a figure that’s been growing steadily since 2017.2
Breaking this down further, we see that:
But what makes this good news for lenders? The answer is consumer credit engagement also has a positive impact on credit health. It creates more informed consumers with higher propensities to seek new credit
Our research into consumers that use a TransUnion monitoring services reveals that:
An effective customer support response strategy should therefore incorporate tools and capabilities for educating and engaging customers, and equipping them to make smarter decisions about their credit and financial health.
Most importantly, use every touchpoint as an opportunity to drive further engagement with your customers. Remember, businesses that engage now will be in a strong position to benefit later.
To learn more about our ongoing consumer research, or download the latest reports and infographics, visit transunion.ca/financial-hardship-study.
At TransUnion, helping consumers manage their credit health has always been an integral part of our mission. We believe that educating and empowering consumers leads to real economic opportunity for them and businesses alike.
TransUnion’s CreditView® is a digital platform that allows your organization to provide branded, on-demand access to credit information through intuitive dashboards and interactive simulations. Use it to:
Visit transunion.ca/product/creditview to find out more.
1 TransUnion Consumer Financial Hardship Survey Canada, Wave 5
2 All information on usage is derived from TransUnion Canadian consumer credit monitoring access information. Other Sources: TransUnion Study, 2019-2020; TransUnion Consumer Financial Hardship Survey Canada, 16 to 21 April 2020