Table of Contents
- DATAMONITOR VIEW
- ANALYSIS
- Online aggregators are a growing phenomenon in the UK
- Online aggregators generally earn a fee by linking consumers to
financial services providers
- Aggregators earn the core of their revenue in three ways, depending
on their business model
- As the number of Internet users has risen, online aggregators have
become increasingly popular
- Confused.com and moneysupermarlet.com are two of the largest
aggregators for consumer credit products
- moneysupermarket.com focused on consumer credit products when
entering the market
- Confused.com looks to become a significant player in consumer
credit, following its success in insurance
- Aggregators offer a number of acquisition advantages to lenders, but are
not problem-free
- Online aggregators chiefly allow for low-cost and large-scale
acquisition
- But lenders are concerned by aggregators' focus on price and the
inability to know their applicants
- Aggregators' orientation on price means many lenders are unable to
portray products in the way they want
- Lenders can receive too many applications from the wrong kind of
customer
- Customers acquired via this channel yield low profits and offer
little cross-sell opportunity
- Online aggregators have changed the competitive dynamics of the consumer
credit market
- Price competition has increased, giving rise to lower margins for
lenders
- The ' Big Four' players, although reluctant at first, have become
active players in this channel too
- Consumer credit product innovation for aggregator-only distribution is
gradually becoming more common
- In order to stay ahead, lenders have no choice but to embrace this form
of distribution
- It is ultimately in lenders' own interest to work with, rather than
against, online aggregators
- Even in the current difficult consumer credit environment, lenders
still need to work with aggregators
- The online aggregator space still has significant room to grow unless
consumer skepticism gets in the way
- A large number of other players, such as Tesco Personal Finance,
have moved into this space
- Only considerable consumer skepticism can really hamper this
channel' s growth, but this is unlikely
- Some aggregators are going into the editorial space and becoming
opinion-makers within the industry
- Aggregators are becoming more sophisticated comparers and need help
from lenders to take this further
- A number of aggregators allow for product differentiation by credit
rating, but this is at a beginning stage
- There is discussion around using customer feedback as a way to rate
lenders, but this is a long way off
- Aggregators are keen to draw up a code of conduct for transparency,
which can only be good for lenders
- APPENDIX
- Definitions
- Consumer credit
- Online aggregator
- Methodology
- Further reading
- Relevant links
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: moneysupermarket.com group revenue and operating profit,
2004-06 (£m)
- Table 2: Revenue and profit for Confused.com, 2004-06 (£m)
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