AUSTIN, Texas--(BUSINESS WIRE)--In a recent analysis, Kasasa® identified three new segments of borrowers within Millennials, Gen Xers and Baby Boomers, using a consumer lending study by PWC and revealed the types of experiences each group expects and the loan products that most interest them.
To identify and market lending products to the ideal consumers who are looking for loans right now, financial institutions must understand each generation. Kasasa’s most recent study identifies and then analyzes the most attractive borrower groups within each generation, which Kasasa has termed “Moving Up” Millennials, “Upward and Onward” Gen Xers and “Established and Educated” Boomers.
“Understanding and targeting these markets will be critical as we head into a rising rate environment,” said John Waupsh, Chief Innovation Officer, Kasasa. “The lending atmosphere will change as rates continue to rise – auto sales are projected to be down slightly compared to last year, while personal lending is expected to grow. Knowing exactly who to target and with what loan product is absolutely necessary to compete with FinTechs and other alternative lenders.”
Kasasa’s latest research exposes more about these segments of the population, as well as what type of experience they expect and which products will connect with them, helping community financial institutions increase their competitiveness and more intelligently market their loan products. An overview of each segment follows:
1. “Moving Up” Millennials
Who are they?
- Age 18-34
- Educated, driven professionals with good (though sometimes limited) credit
- Household incomes range between $50k-$100k
- They can make higher payments than other Millennials
What is important to them when selecting a lender?
- They are less concerned with interest rates
- 65% say they make decisions based on the consumer experience and only 35% on rates
- They prefer an all-digital process, appreciate loan management tools and like being rewarded for loyalty
- They like an easy, fast process with a slick user experience
- Convenience, flexibility and speed are key to attracting them, along with a product that allows (and even encourages) them to pay down their debts faster
What types of loans should financial institutions offer them?
- Higher education and graduate school is most important
- Personal loans for early-stage life events like weddings and home improvement projects
2. “Upward and Onward” Gen Xers
Who are they?
- Age 35-54
- Well-educated, employed and financially savvy with great credit
- Household incomes range between $75k-$125k
- Have access to preferred interest rates and loan terms
What is important to them when selecting a lender?
- Rates are more important than experience, but experience is still a deciding factor
- They like the convenience of a digital lending application but prefer in-person interaction when closing
- They like exclusive offers, a sleek digital platform and a friendly, casual in-person experience
- They can be skeptical about loans, so make it easy to understand loan terms and where their money is going
- Products and services that provide visibility and put them in control are critical
What types of loans should financial institutions offer them?
- Auto loans to replace aging vehicles is a priority
- Refinancing students loans is the next important
- Home loans follows behind at third
3. “Established and Educated” Boomers
Who are they?
- Age 55-72
- Well educated, employed but nearing retirement, financially stable with excellent credit
- Household income ranges between $100k-$150k with a sizable savings
What is important to them when selecting a lender?
- Interest rate is most important
- 82% will choose a lender for the rate compared to 18% who might be swayed by the overall experience
- They research and submit documents online (meaning a digital application process is still important), but want a positive in-person experience when closing the loan
What types of loans should financial institutions offer them?
- Auto loans is the highest priority
- Refinancing student loans comes second
- Home loans are the least important
Waupsh continued, “While these groups vary, there is a way to attract all three with a revolutionary new loan. The very first of its kind, the Kasasa Loan™ gives consumers from all generations the lending experience they want. It is transforming the way people think about borrowing money and paying it back with a new concept called take-backs™. It’s the only loan that lets borrowers pay ahead to get out of debt faster, but gives them the flexibility to take back what they overpaid in case of surprises. This not only meets the needs of all three market segments, but it is the most people-friendly loan available on the market today. We’re confident it is a game-changer for the lending category.”
For a full copy of the analysis, visit https://kasasa.com/blog/post.html?slug=breaking-down-the-borrower/.
About Kasasa
Kasasa is an award-winning financial technology and marketing technology provider. Based in Austin, Texas with 400 employees, Kasasa is committed to driving results for more than 800 community financial institutions by attracting, engaging, and retaining consumers. Kasasa does this through branded retail products, world class marketing, and expert consulting. The company reinvented checking and is now reinventing lending through its latest patent-pending offering, Kasasa LoansTM. Learn more about Kasasa’s innovation products and services:
Kasasa LoanTM – The only loan with take-backs
Marketing & Technology - Connect
For more information, please visit www.kasasa.com, or visit them on Twitter @Kasasa, Facebook, or LinkedIn.
