Consumers are more reluctant to use credit and instead are
trying to save more, the results of the third European credit risk
outlook report by FICO and the European Financial Marketing
Association (Efma) has revealed.
The report, that provides an overview of the
European credit market and represents feedback from more than 70
risk managers from banks across 26 countries, presents a gloomy
picture of credit performance, reversing the positive trend that
was displayed in the previous survey (June 2011).
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The FICO and Efma report contains in-depth
analysis on the UK, Germany and the Iberian Peninsula credit
markets, as well as trends across the European region.
FICO’s recent Professional Risk Managers’
International Association (PRMIA) Survey that looks at similar
issues in the North American market shows that the use of credit in
the US is expected to rise slowly over the next six months, while
European survey respondents reported greater consumer reluctance to
use credit.
Results of the third European credit risk
outlook report also reveal that delinquencies are expected to rise
for current accounts, credit cards, and small business loans, due
to a continued weakness in the economy and high unemployment
rate.
Lack of credit availability and high
delinquencies will indicate that banks must focus on understanding
their customers to make the right decisions about when and how much
to lend, and who to lend to, according to the third European credit
risk outlook report.
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