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Tink Urges for Reduced Friction, as 22% of Young Brits Abandon Loan ‘Arduous’ Application Process

Access to finance and access to credit are quickly becoming some of the biggest topics in the world of finance. Particularly across the UK, people from all situations and backgrounds have revealed that it is much harder to access credit products or get loans approved. 

Now, new research from Tink, the payment services and data enrichment platform, has revealed that 78 per cent of 18 to 34-year-olds have had a loan application rejected. When asked why they had been disqualified from a loan, 12 per cent were told they didn’t have enough credit history to qualify, while 11 per cent were rejected because they were unable to prove their financial history.

Tink also revealed that younger people are abandoning ‘arduous’ applications, with no tolerance for any type of friction in loan application processes, meaning they may not be capitalising on the financial services available to them.

From Tink’s survey of 1,000 UK borrowers, 22 per cent of 18 to 34-year-olds abandoned a loan application and used a different lender because the process was too cumbersome. Meanwhile, when applying for a loan, 20 per cent of respondents said they had the correct documents, but abandoned the process because they needed to submit them manually (such as having to print them off and post them).

Another Tink survey of 200 UK lenders supports these findings, with research showing that 36 per cent of lenders cite manual income verification as the point when they see the most drop-off in the loan application process.

Similarly, the research suggests that cumbersome manual processes can be costly and time-consuming for lenders. Thirty-two per cent of lenders surveyed cite manual income verification as the most time-consuming step in their own risk decisioning process, and 25 per cent say document validation (capturing application information and analysing its authenticity) is the highest cost they face.

‘Harnessing data-driven risk decisioning solutions’
Jack Spiers, banking and lending director at Tink
Jack Spiers, banking and lending director at Tink

Jack Spiers, banking and lending director at Tink, commented: “Our research highlights a clear access issue amongst younger generations trying to borrow. Not only are a significant amount wrestling with cumbersome application processes, but they’re also being rejected for loans based on factors that suggest blinkered financial assessments.”

As a solution to overcome these barriers, younger age groups cite a willingness to give lenders permission to view transaction data from their bank accounts in return for smoother application processes and a better chance of securing a loan.

In fact, 40 per cent of 18 to 34-year-olds surveyed would enable lenders to digitally view transaction data from bank accounts to improve the application process, while 57 per cent would prefer the option of having loans tailored to their financial situation.

While the financial industry is often seen to move slowly when adapting certain areas of offerings and application processes to customer needs, Tink research suggests lenders are aware of the need for change.

Seventy-eight per cent of lenders surveyed agree reducing friction in the lending application process is important and would give them a competitive advantage, while 77 per cent say it’s crucial to improve risk decisioning models to give a more accurate view of people’s finances.

Spiers also added: “It is important lenders are harnessing data-driven risk decisioning solutions to offer fair, accurate affordability checks, while also removing the friction associated with manual application submissions. And it’s not just benefiting the end user. Adopting these models can help lenders too – boosting customer acquisition through improved success rates, while reducing operational costs.”


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