Future of Consumer Credit, Part 2: Revenue-Generating Strategies and Implementation Timing

This is one of a pair of TowerGroup Research Notes presenting the findings of a proprietary study on the future direction of consumer lending (including home equity, first mortgage, personal lines and loans, and automobile and student lending). The companion document is TowerGroup Research Note V52:15C, Future of Consumer Credit, Part 1: Lenders' Views on Industry Trends, Strategies, and IT Priorities.

The survey, commissioned by CGI and conducted by TowerGroup, had three sections:

• Section 1 asked respondents to rank their respective institutions' top 10 business drivers, strategic responses, and IT priorities in consumer lending. The items they were asked to rank were based on lists published in October 2006 in TowerGroup Research Note V49:12C, Consumer Lending's Top 10 for 2007, Business Drivers, Strategies Responses and Technology Priorities. The findings from section 1 are reported in the companion Research Note.
• Section 2 asked respondents to rank their institutions' major revenue-generating strategies in the categories of organic growth, new market entry, and customer retention. The present Research Note reports the results.
• Section 3 asked respondents to indicate their timeframes for implementing the various technology initiatives and programs ranked in section 2.. The results are reported below with those rankings.

This TowerGroup Research Note presents TowerGroup's analysis of the findings of survey sections 2 and 3 and our commentary on the results and market trends and recommendations to consumer lenders. The Note provides insight on what is driving consumer lenders' business strategies. The study results will be of use to both financial services institutions and vendors. Lenders of all sizes, not only large institutions like the study participants but also midtier institutions, can compare and contrast their viewpoints and future direction against those of the lenders surveyed here. The findings will also help vendors to provide the technology and tools that consumer lenders need to achieve their business goals.

Report Coverage

Survey Overview

Background

Methodology

Survey Section 1 Review: Business Drivers, Strategies, and IT Priorities

Survey Section 2: Strategies for Top-Line Revenue Growth

Survey Section 3: Timing of Technology Investments in Support of Strategies

Survey Results

Organic Growth Strategies

New Market Entry Strategies

Customer Retention Strategies

Survey Shows It's Time to Take Action

Summary