Table of Contents
Executive Summary
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- The market
- Strong growth in the numbers checking their credit score
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- Figure 1: Use of credit monitoring services, November 2018 and October 2016
- Appetite for credit has declined
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- Figure 2: Net consumer credit flow, January 2016 to December 2018
- Data security creates opportunities and threats
- GDPR pushes data transparency up the agenda
- Companies and brands
- Experian is most widely used but ClearScore is gaining ground fast
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- Figure 3: Use of selected credit check and monitoring services among credit score users, November 2018
- Experian and ClearScore merger halted, while Credit Karma enters UK market
- Free credit reports dent traditional subscription model
- Credit monitoring as a tool for engagement
- Renters receive a credit score boost
- Open banking is driving innovation in the sector
- ATL adspend up by 24% in 2017/18, Experian leads the way
- The consumer
- People are more likely to check their credit score than not
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- Figure 4: Use of credit monitoring services, by generation, November 2018
- Scope to increase engagement among financial strugglers
- Younger Millennials represent key group for new business
- Looking beyond the direct link with credit applications
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- Figure 5: Reasons for not using credit check services in the next 12 months, November 2018
- Borrowing drives use among under-45s; over-45s look to fraud detection
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- Figure 6: Reasons people would use credit monitoring services, November 2018
- A third of users are unwilling to pay for premium services
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- Figure 7: Interest in features that would prompt people to pay for premium credit report services, November 2018
- Most trust providers to keep their data safe
- Banks have an opportunity to extend their role
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- Figure 8: Attitudes towards credit monitoring services, November 2018
- What we think
Issues and Insights
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- Subscription-based services need to differentiate to survive
- The facts
- The implications
- Scope for lenders and banks to extend into credit check services
- The facts
- The implications
- Improving levels of engagement among financial strugglers
- The facts
- The implications
The Market – What You Need to Know
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- Strong growth in the numbers checking their credit score
- Appetite for credit has declined
- Data security creates opportunities and threats
- GDPR and open banking push transparency up the agenda
Market Size
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- Use of credit checking services shows strong growth
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- Figure 9: Use of credit monitoring services, November 2018 and October 2016
- Regular credit checkers are driving growth
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- Figure 10: Population estimates of consumer use of credit monitoring services, November 2018 and October 2016
Market Drivers
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- Consumer confidence has dipped
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- Figure 11: Financial Confidence Index, January 2016 to January 2019
- Consumer credit lending weakens
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- Figure 12: Net consumer credit flow, January 2016 to December 2018
- Mortgage lending continues to flatline
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- Figure 13: Value of lending secured on dwellings, January 2016-December 2018
- Individual insolvencies exceed 115,000 in 2018
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- Figure 14: Individual insolvencies in England and Wales, by type, 2015-18 (seasonally adjusted)
- Data security
- Security remains top priority for finance customers
- Equifax data breach – damaging but not devastating
- GDPR provides an opportunity to bolster relations with consumers
- Open banking and credit scoring are a perfect match
Companies and Brands – What You Need to Know
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- Experian is most widely used but ClearScore is gaining ground fast
- Experian and ClearScore merger halted, while Credit Karma enters UK market
- Free credit reports dent traditional subscription model
- Credit monitoring as a tool for engagement
- Renters receive a credit score boost
- Open banking is driving innovation in the sector
- ATL adspend up by 24% in 2017/18, Experian leads the way
Consumer Use of Credit Score Brands
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- Experian remains dominant but ClearScore is now a major challenger
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- Figure 15: Use of selected credit check and monitoring services among credit score users, November 2018
- ClearScore rivals Experian among regular users
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- Figure 16: Use of selected credit check and monitoring services, by frequency of use, November 2018
- 29% have used more than one site to check their credit score
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- Figure 17: Number of credit check and monitoring services used, November 2018
Competitive Strategies
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- Experian and ClearScore merger falls through
- CMA concerns halt proposed merger between sector’s two largest players
- Experian revenue under pressure as subscription income declines
- US firm Credit Karma agrees to buy Noddle…
- …and commits to offering free access to services
- Free credit reports dent traditional subscription model
- Credit monitoring as a tool for engagement
- Moving from product comparison to credit matching
- TotallyMoney launched live credit check services in 2017
Launch Activity and Innovation
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- Renters get a credit score boost through rental recognition scheme
- Open banking provides scope to improve access to credit…
- …and to speed up credit applications
- ClearScore introduces open banking solution, OneScore
Advertising and Marketing Activity
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- Adspend grew strongly in 2017/18
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- Figure 18: Total above-the-line, online display, and direct mail advertising expenditure by credit monitoring companies, 2015/16-2017/18
- Experian is by far the biggest spender
- Noddle shunned ATL adspend in 2017/18, but TotallyMoney saw strong growth
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- Figure 19: Total above-the-line, online display, and direct mail advertising expenditure on credit monitoring companies by top six advertisers, 2015/16-2017/18
- Adspend is mainly split between TV and Digital
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- Figure 20: Total above-the-line, online display, and direct mail advertising expenditure on credit monitoring companies by media type, 2015/16-2017/18
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- People are more likely to check their credit score than not
- Scope to increase engagement among financial strugglers
- Younger Millennials represent key group for new business
- Looking beyond the direct link with credit applications
- Borrowing drives use among under-45s; over-45s look to fraud detection
- A third of users are unwilling to pay for premium services
- Most trust providers to keep their data safe
- Banks have an opportunity to extend their role
Use of Credit Monitoring Services
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- People are more likely to check their credit score than not
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- Figure 21: Use of credit monitoring services, November 2018
- Millennials are frequent checkers, while Gen X are occasional users
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- Figure 22: Use of credit monitoring services, by generation, November 2018
- The financially healthy are more likely to engage
- Scope to increase engagement among private renters
- Younger Millennials represent the key group for new business
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- Figure 23: Likelihood to use credit check services in the next 12 months, November 2018
Barriers to Using Credit Score Services
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- Looking beyond the direct link with credit applications
- Financial wellbeing is becoming a key marketing message
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- Figure 24: Reasons for not using credit check services in the next 12 months, November 2018
- A lack of awareness and knowledge are only minor barriers
Prompts to Use Credit Monitoring Services
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- Borrowing is main driver of credit check activity…
- …but over-45s look to fraud protection
- Opportunities to widen services to provide a financial security check
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- Figure 25: Reasons people would use credit monitoring services, November 2018
Interest in Features of Premium Credit Monitoring Services
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- A third rule out paying for services
- Understanding data and fraud detection hold wide appeal
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- Figure 26: Interest in features that would prompt people to pay for premium credit report services, November 2018
- Renters are looking for advice
Attitudes towards Credit Monitoring Services
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- Majority of users trust services to keep their data safe
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- Figure 27: Attitudes towards credit monitoring services, November 2018
- Consumers appreciate the ability to compare credit products
- Opportunities for banks to extend their role in the market
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- Figure 28: Credit Monitoring – CHAID – Tree output, November 2018
Appendix – Data Sources, Abbreviations, and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 29: Credit Monitoring – CHAID – Table output, October 2018
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