Introduction

Online aggregators are a growing force in the distribution of consumer credit products. While they do pose a number of challenges to UK lenders, the latter must look to benefit from the many opportunities they offer.

Scope

Discusses both the advantages and disadvantages online aggregators pose to UK lenders. Provides insight into how some lenders are innovating and taking advantage of this recently developed distribution channel. Details the main online aggregators with regards to consumer credit products and their business models.

Highlights

Online aggregators present a number of important advantages to lenders in terms of acquisition and distribution, including low cost of customer acquisition in comparison to other channels, a captive audience, a choice on the volume of customers they desire, relationships that are easy to manage and high visibility. Lenders concerns are that aggregators’ orientation on price means many lenders are unable to portray products in the way they want, that they can receive too many applications from the wrong kind of customer, and that customers acquired via this channel yield low profits and offer little cross-sell opportunity. Online aggregators have changed the competitive dynamics of the consumer credit market.

Price competition has increased, giving rise to lower margins for lenders, and product innovation for aggregator-only distribution is gradually becoming more common.

Reasons to Purchase

Understand what lenders can do to take full advantage of the distribution opportunities posed by online aggregators. Keep track of competitors' strategies with regards to the online aggregator distribution channel. Gives you a competitive edge by understanding what the future holds for this channel of distribution.