New research from TransUnion has highlighted the importance of trust and says that empowering and educating consumers is essential for lenders to compete in a changing financial landscape

TransUnion’s new white paper, which examines consumer credit behaviour in the UK, unveils key trends and themes for lenders to note as we embark on a new decade.

;Consumer Credit 2020′ is based on extensive research with UK consumers, comprising two nationwide surveys*, internal research carried out by TransUnion, and interviews with industry experts. It also incorporates findings from TransUnion’s US consumer study** carried out by Javelin Strategy and Research, introducing a global perspective.

The findings suggest an enhanced level of consumer confidence when it comes to finance. More than half of UK consumers (53%) say they want to improve their financial situation in the next 12 months and can see a path to do so, and three in five (62%) are feeling confident that their financial situation will remain stable in 2020.

However, the findings demonstrated some recognisable challenges. Only two in five (44%) feel in control of their finances and whilst the majority (61%) say they have the capacity to withstand a financial shock, it seems that many routinely turn to credit to deal with any unexpected expenses.

The report provides key data points to show that in order to establish longstanding relationships with consumers, providers need to build trust and empower their customers with greater access to credit information and the knowledge needed to make more informed financial decisions.

Satrajit “Satty” Saha, CEO of TransUnion said “Lenders need to understand the challenges consumers are facing,”  “Our analysis shows a clear need for more education around credit and finance among consumers, along with an affirmation of the importance of consumer trust as a driver of growth for financial institutions. More than a third of British consumers (36%) make their choice of finance provider based on trust.”

Consumer education can play a role in building trust, as well as helping customers to access products and interest rates tailored to their situation. Many don’t understand the role that credit reports and scores play in their access to finance. Two thirds of British consumers (66%) don’t know their credit score, and just 38% are confident they know what information is stored in their credit report.

Kelli Fielding, Managing Director of consumer interactive at TransUnion said “Consumer awareness around credit scores leads to a generally more well-developed credit market, as is the case in the US.”

“By taking control of their credit report, consumers can take steps to improve their score if necessary, and ensure that they are able to access the most competitive rates.”