* Boost customer acquisition by understanding the consumer expectation for their personal and unique needs to be met by FS products and services.
* Improve consumer perceptions of a brand by recognizing the need to design transparent and straightforward products and services.
* Capitalize on the consumer demand for convenience and transparency by understanding how to meet these needs.
* Innovate effectively by gaining insight into how to target a specific consumer segment successfully.
The value of the UK payday lending market has increased significantly in recent years. In part this growth has been driven by payday lenders identifying and serving a viable market segment. This includes the increasing number of consumers who are no longer willing or able to borrow from banks and other established lenders.
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Consumers increasingly expect financial services providers to deliver simple and transparent products and services. Trust plays an important role in developing long-term relationships between consumers and companies. Firms offering uncomplicated products and services in a transparent manner are likely to enjoy commercial success.
Consumers feel that there are numerous demands, both personal and business, on their time and as a result are looking for products and services which offer convenience. Wonga's automated lending process meets this need and has enabled the lender to justify imposing higher fees on its loans in comparison to conventional lenders.
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* Why do consumers consider simplicity and transparency to be vital in FS products and services?
* How can a new entrant build a well-known and trusted brand?
* Why are consumers prepared to pay a premium for factors such as convenience?
* How can FS providers stand out in a crowded marketplace?
Companies Mentioned in this Report: CMS Energy Corporation, Schindler Holding Ltd.
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* Wonga facilitates emergency borrowing with a transparent and open approach to lending
* Key issues covered in this case study include:
* Wonga empowers consumers by enabling them to tailor the amount and duration of a loan
* Wonga's short-term loans serve a market segment excluded from traditional borrowing sources
* Wonga aims to differentiate itself from other payday lenders with its commitment to lending responsibly
* Wonga is involved in an initiative to provide interest-free loans to people in developing countries
* By setting out the total repayable amount at the start of all applications, Wonga demonstrates a transparent approach to lending
* The speed of Wonga's cash transfers make it a very convenient lender
* The total value of the UK payday lending market has increased significantly in recent years
* Wonga has criticized the finance industry as a whole and has committed to the principles it says enable it to bring a fresh approach to the market
* Wonga offers further convenience via its pay my bills facility
* The innovative approach adopted by Wonga and its staff has been formally recognized
* Wonga may increase the "trust rating" of responsible customers and lend them larger amounts of cash
* Wonga runs extensive advertising campaigns to build and sustain its brand
* Wonga also has a significant online presence, making use of both YouTube and Facebook
* Wonga's loans draw heavily on the Convenience and Individualism Megatrends
* An automated lending process increases convenience
* Wonga is empowering its customers by putting them in control of their financial arrangements
* Consumers are coming to expect transparency from all of the companies that they deal with
* Removing complexity and focusing on simplicity engenders trust from consumers
* Financial services providers should recognize the demand among customers for transparency and simplicity
* The simplicity of Wonga's service is easy to overlook but has played a crucial role in its success
* Consumers may be willing to pay a premium for convenience and good service
* Building a brand is essential to the success of new entrants across all financial services industries
* Wonga has differentiated itself from other providers by being vocal on its commitment to lend responsibly
* Ultimately, Wonga has achieved success by targeting its service at a particular market segment
* The Datamonitor Financial Services Consumer Insight Megatrend Framework
* Demographic Complexity
* Financial Intelligence Complexity
* Lifestage Complexity
* Wealth Complexity
* Secondary sources
* Further reading
* Ask the analyst
* Figure: Wonga enables customers to set the exact terms of their loans
* Figure: The pay my bills service offers further convenience to time-pressed consumers
* Figure: As part of its commitment to responsible lending Wonga carries out credit checks, something not all of the companies operating in this market have in place
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