Equifax research reveals that one in five (20%) of people in the UK have had an application for a financial product rejected, and that following an unsuccessful application, almost two-thirds (62%) of people are unlikely to use that company again in the future.
The online survey, conducted by YouGov, also highlights the emotional impact of an application being denied, finding that 23% felt frustrated, 19% embarrassed and 12% upset by the experience.
As the breadth of financial products on the market continues to grow, providers must ensure they implement the most accurate ‘know your customer’ strategy possible. This is vital to ensure that products are not marketed to people inappropriately and to avoid the risk of alienating customers.
Paul Birks, Chief Data and Analytics Officer at Equifax, said: “With the amount of data and insight currently available, it’s important that lenders use this information smartly in order to correctly target their products and maximise their marketing budgets. Companies genuinely want to build long-term relationships with customers and the fact that such a high number of respondents were unlikely to use a provider again after a rejection highlights how easily these relationships can be damaged.
“When a customer is rejected for a financial application, it’s usually to avoid them taking out a product that is beyond their financial means. This is clearly the right thing to do but with more robust analysis, companies can be more accurate with their marketing, avoid unnecessary rejections and ensure their brand doesn’t push consumers away.”