The next generation wants control over their data for a more transparent lending experience.
Having grown up with the internet, smart phones, and social media, young Millennials and Gen-Z borrowers are particularly savvy about using their digital footprints for their own benefit.
They embrace technology to streamline everyday tasks and they want to make informed decisions about transactions. As they increase their presence in the workforce, they are becoming the generations poised to drive the future of lending.
When Mastercard surveyed 7,600 consumers across the United States, Canada, the United Kingdom, Australia, France, Germany and Spain about their recent financial experiences, young people’s voices came through: They want a more transparent, simpler, digitally-enabled lending process.
Open banking can make this a reality. Using secure APIs, advanced data analytics, and machine learning, open banking technology allows consumers to safely share their financial data, giving a more up-to-date and holistic view of their ability to repay a loan or afford a line of credit.
Most borrowers are already on board. According to our survey, 77% of those ages 45 to 60 and 68% of those over 60 are willing to grant access to their banking data to secure a credit or loan. Among respondents 18 to 29, the number shoots up to 84%.
Nearly 60% of younger customers have already linked their accounts while applying for a loan. And, as digital natives, nine out of ten would prefer a loan option with a digital application or approval process.
The consumer base is changing, opening a window for the industry to evolve in step. Today’s borrowers are calling for a new, digital-first era of lending, giving applicants more control over the information used to determine their creditworthiness.
By allowing consumers to share access to their financial data, open banking can provides a current view of their ability to repay a loan or afford a line of credit for more transparent lending decisions – and a more financially inclusive economy. Younger borrowers are embracing digital lending.
Read more about the future of lending in Mastercard’s Lend Report here.
