THE CONSUMER GAP & LARGE UNDERSERVED MARKET
The European consumer credit market is underserved across all groups.
despite a developed payment infrastructure.
The European vs US consumer credit gap is €1.1 trillion, despite both economies broadly the same size. Consumer credit (excluding mortgages and student loans) is just 5.2% of GDP in Europe vs 12.5% in the US.
Based on historical growth, credit card ownership penetration in Europe will take 20 years to reach current levels in the US.
We have successfully launched in Spain, where there is a clearly defined market and demand for the product
TRADITIONAL BANKS ARE LOSING RELEVANCE
Despite the financial sector expanding by almost 50% since pre-financial crisis, total bank assets in Europe have decreased in absolute terms. The principal driver has been the imposition of more onerous capital requirements that have seen minimum levels increase by 75% for certain banks since 2011.
Other factors that have reduced the lending appetite of banks include more prudent accounting rules, the most recent being the amendment to IFRS 9, increasing costs of compliance & cumbersome traditional credit underwriting (due to lack of positive credit bureau records in Europe).
REGULATORY CHANGES CREATING OPPORTUNITY FOR NEW ENTRANTS
Regulatory changes have encouraged alternative lenders to enter the market & provided consumers greater control over who has access to their banking history.
The European Payment Services Directive 2 (“Open Banking”) gives individuals the right to permit alternative lenders to access their banking records & thereby develop fair credit profile. Positive credit bureau records do not exist in Europe.
Sophisticated use of AI makes such credit analysis substantially more accurate and efficient than traditional bank credit underwriting.
EUROPEAN CONSUMERS SEEK SOPHISTICATED, TAILORED MOBILE PRODUCTS
European consumers seek to efficiently obtain and access mainstream products, such as credit cards and loans, in a digital world anytime, anywhere through their phones. Smartphones and high speed wireless communications networks are enabling consumers to easily access sophisticated financial services via their smartphones.
Effective deployment of technology (including AI) helps quickly & accurately screen potential customers and provide tailored credit products to them.
Banks are burdened by legacy technology & processes that make it difficult for them to be responsive to rapidly changing consumer demands.
EuroOne companies provide intelligent financial services for consumers across Europe