The consumer lending business is “hard on everyone” these days: hard on consumers trying to figure out which type of loan is best for them and from which provider, hard on traditional banks trying to protect and expand their market share, and hard on new bank and non-bank entrants trying to identify the right “sweet spots” to challenge.
Meanwhile, change is surely coming for HELOCs. With interest rates on lending products trending downward again, mortgage refinancing will pick up, and HELOCs will become an attractive option for gaining access to cash for home improvement, debt consolidation, and paying off student loans.
My recent e-book, “Home Equity: A View from the Customer”, provides some “through your customers’ eyes” insights based on our most recent survey of HELOC customers. This is our second survey of this sector of the banking industry, and we’ve uncovered some interesting preferences regarding home equity lending. In this e-book, you will hear from U.S. consumers who have opened a HELOC in the past 12 months—either with their primary bank, a traditional brick-and-mortar bank, or with a marketplace lender.
One top-level takeaway is that that banks need to better engaged with their customers and then guide them to optimized HELOC product offerings that precisely meet their needs. The book also highlights that banks need to understand their customers and potential customers ever more deeply and quickly in order to serve them, and compete effectively with the dizzying number and variety of bank and non-bank competitors offering HELOCs, unsecured personal loans, and other types of consumer loans.
Think you know your target customer’s shopping behavior? You might want to take a deeper look. While the 35 years and under generation is perceived as those who function solely from a screen – our respondents reported that while HELOC shopping, they were more likely to shop in person.
It is a story of competition, choice and confusion – but points to clear benefits for banks that focus well on not just price, but also education and convenience. Download the book and you will develop insights regarding how real customers selected from among competing HELOC offers across banks and how they made decisions across HELOCs and competing products.