Credit 2.0 – Time for financial services to catch up with 21st Century consumers, warns new report

Digital technologies have changed the way consumer credit providers can make lending decisions and the way consumers engage with their finances.
The first in-depth analysis of short-term loan market and the impact of new regulations on borrowers will be launched today by the UK short-term lending industry.
At an event in Parliament the Consumer Finance Association unveils Credit 2.0 – a commentary on spending and borrowing in the 21st Century, a 40 page report which contrasts the changing financial attitudes of borrowers in the growing economy with a 70% reduction in access to short term credit following the introduction of new consumer credit regulations. The report shows:

Restricting access to short-term credit presents new risks for low to middle income borrowers;
Debt is being driven by arrears on household bills including utilities and council tax, while credit is being used as a money management tool;
Changes to the economy and our lifestyle are driving demand for short-term credit from a diverse range of borrowers.
The report is the most up to date snapshot of the short-term loans industry. It is based on analysis of hundreds of thousands of loan applications made since the regulations came into force, unique insight from leading credit reference agency Equifax and a wide range of secondary research sources.

Russell Hamblin-Boone, the Chief Executive of the Consumer Finance Association, said:

“Credit 2.0 takes a fresh look at alternative forms of credit, including short-term loans, and shows that turning off the credit tap has had no impact on demand or debt levels. It is an attempt to educate all those who continue to call for further restrictions on lenders without considering the consequences for millions of families.

“Our analysis of hundreds of thousands of loan applications proves that borrowers are being excluded from credit and concerns are growing for how they are filling the gap in their finances. It’s time to draw a line under the attacks on short-term lenders, recognise the huge improvements in lending and accept that we have a highly-regulated, legitimate market to keep people out of the hands of unscrupulous, illegal lenders.”

“The report shows the scale of the challenge for the regulator in finding the right balance between consumer protection and maintaining a competitive alternative credit market.”

Credit 2.0 also explains how short-term lenders are using pioneering technology that is leaving mainstream services standing. With 82% of households now online and 62% of adults using a smartphone, digital technology has fundamentally changed the way consumer credit providers can make lending decisions and the way consumers engage with the finances.

Russell Hamblin-Boone told MPs: “The economy is growing again, but the financial landscape has changed forever. Technology is changing the way we live and our ‘instant society’ demands quick decisions, simple products and convenient ways to borrow small sums for short periods of time. Critics of innovation that refuse to embrace the change by trying to hold back the tide could find themselves swept away by modern life.”

The Credit 2.0 report is available from


For more information, or for interviews with the CFA, please contact Richard Griffiths at or on 07875 653959

Editor notes

About the report

‘Credit 2.0 – A commentary on borrowing and spending in the 21st Century’ was researched and written by the Consumer Finance Association. Insight was provided by Equifax, a leading consumer and business credit intelligence agency, providing insight into the latest consumer borrowing and short-term credit market trends.

As well as a range of secondary research sources, which are all cited in the report, the CFA analysed data regarding hundreds of thousands of loan applications made o CFA members in 2015. This data is independently collected and aggregated by Shelley Stock Hutter to ensure the veracity and integrity of the data.