The Rise of Retail Finance: A New Era of Consumer Lending
May 17, 2025, 4:06 am
Location: United States, New Hampshire, Manchester
Employees: 501-1000
Founded date: 1878
In the bustling world of retail, a quiet revolution is taking place. Retail finance is surging, and it’s reshaping how consumers make big purchases. The latest figures tell a compelling story. Consumer finance grew by 13% in March 2025 compared to the previous year. This growth is not just a blip; it’s a trend. The first quarter of 2025 saw a 6% increase over the same period in 2024, with a staggering £12 billion in new lending reported in March alone.
As traditional banks step back, specialist lenders are stepping up. Secure Trust’s retail finance arm, V12, is at the forefront of this shift. They’ve carved out a niche, lending to consumers through 1,400 retailers across the UK. From sofas to season tickets, V12 is financing aspirations. The average purchase value hovers around £1,500, heavily influenced by furniture sales.
The landscape is changing. Major banks like HSBC and Barclays are focusing on their core operations, leaving a gap for nimble players like Secure Trust. The retail finance market, valued at around £10 billion annually, is relatively small compared to other lending sectors. Yet, it’s ripe for growth.
Secure Trust is capitalizing on this opportunity. In 2024, they achieved record lending figures, with balances rising 11% to £3.6 billion. Their market share of new business jumped from 13.5% to 15.3%. This growth story is not just about numbers; it’s about strategy. The firm has embraced modern technology, allowing them to make quick lending decisions. About 90% of decisions are made in six seconds. This speed is a game-changer.
However, with opportunity comes risk. Unsecured lending carries the weight of potential defaults. The government is stepping in, implementing reforms to regulate Buy Now, Pay Later (BNPL) services. Starting in 2026, providers must assess consumers’ ability to repay before offering credit. This is a crucial step in protecting consumers from unmanageable debt.
Secure Trust’s cost of risk, a measure of potential losses, increased to 1.8% in 2024. Yet, their retail finance division managed to reduce its cost of risk to 1%. This indicates a cautious yet optimistic approach to lending. The vehicle finance sector, however, faced challenges, with costs rising significantly.
The narrative of retail finance is also one of collaboration. Secure Trust’s acquisition of V12 in 2012 exemplifies this. The partnership merges the agility of fintech with the stability of traditional banking. This synergy allows them to navigate the complexities of the lending landscape effectively.
Looking ahead, the future is bright for retail finance. Secure Trust aims to expand into the home improvement sector, tapping into similar consumer aspirations. The potential for growth is vast. There’s also a desire to strengthen relationships with consumers. V12 currently boasts 1.2 million live customers, and understanding their needs is paramount.
The world of retail finance is evolving. It’s not just about transactions; it’s about building connections. As consumers seek to enhance their lives through purchases, lenders must adapt. The focus is shifting from merely providing credit to fostering relationships.
In this new era, transparency is key. Consumers need clear information about loan terms. They must feel empowered to make informed decisions. The landscape is changing, and so are the expectations of consumers.
As the retail finance market continues to grow, it’s essential to keep an eye on the regulatory landscape. The Financial Conduct Authority (FCA) is tightening oversight, ensuring that lenders adhere to consumer protection standards. This is a necessary evolution, as the market matures.
The interplay between technology and finance is another critical aspect. Fintechs are often seen as disruptors, but the reality is more nuanced. Secure Trust’s model demonstrates that collaboration can yield better results than competition. By leveraging technology, they can assess creditworthiness swiftly and accurately.
In conclusion, retail finance is on the rise, driven by consumer demand and a shift in lending dynamics. As traditional banks retreat, specialist lenders are stepping into the spotlight. The future holds promise, but it also demands responsibility. Balancing growth with consumer protection will be the challenge of this new era.
The landscape is changing, and those who adapt will thrive. Retail finance is not just about lending; it’s about understanding and serving the aspirations of consumers. As we move forward, the focus will be on building trust and fostering relationships. This is the essence of modern retail finance.
As traditional banks step back, specialist lenders are stepping up. Secure Trust’s retail finance arm, V12, is at the forefront of this shift. They’ve carved out a niche, lending to consumers through 1,400 retailers across the UK. From sofas to season tickets, V12 is financing aspirations. The average purchase value hovers around £1,500, heavily influenced by furniture sales.
The landscape is changing. Major banks like HSBC and Barclays are focusing on their core operations, leaving a gap for nimble players like Secure Trust. The retail finance market, valued at around £10 billion annually, is relatively small compared to other lending sectors. Yet, it’s ripe for growth.
Secure Trust is capitalizing on this opportunity. In 2024, they achieved record lending figures, with balances rising 11% to £3.6 billion. Their market share of new business jumped from 13.5% to 15.3%. This growth story is not just about numbers; it’s about strategy. The firm has embraced modern technology, allowing them to make quick lending decisions. About 90% of decisions are made in six seconds. This speed is a game-changer.
However, with opportunity comes risk. Unsecured lending carries the weight of potential defaults. The government is stepping in, implementing reforms to regulate Buy Now, Pay Later (BNPL) services. Starting in 2026, providers must assess consumers’ ability to repay before offering credit. This is a crucial step in protecting consumers from unmanageable debt.
Secure Trust’s cost of risk, a measure of potential losses, increased to 1.8% in 2024. Yet, their retail finance division managed to reduce its cost of risk to 1%. This indicates a cautious yet optimistic approach to lending. The vehicle finance sector, however, faced challenges, with costs rising significantly.
The narrative of retail finance is also one of collaboration. Secure Trust’s acquisition of V12 in 2012 exemplifies this. The partnership merges the agility of fintech with the stability of traditional banking. This synergy allows them to navigate the complexities of the lending landscape effectively.
Looking ahead, the future is bright for retail finance. Secure Trust aims to expand into the home improvement sector, tapping into similar consumer aspirations. The potential for growth is vast. There’s also a desire to strengthen relationships with consumers. V12 currently boasts 1.2 million live customers, and understanding their needs is paramount.
The world of retail finance is evolving. It’s not just about transactions; it’s about building connections. As consumers seek to enhance their lives through purchases, lenders must adapt. The focus is shifting from merely providing credit to fostering relationships.
In this new era, transparency is key. Consumers need clear information about loan terms. They must feel empowered to make informed decisions. The landscape is changing, and so are the expectations of consumers.
As the retail finance market continues to grow, it’s essential to keep an eye on the regulatory landscape. The Financial Conduct Authority (FCA) is tightening oversight, ensuring that lenders adhere to consumer protection standards. This is a necessary evolution, as the market matures.
The interplay between technology and finance is another critical aspect. Fintechs are often seen as disruptors, but the reality is more nuanced. Secure Trust’s model demonstrates that collaboration can yield better results than competition. By leveraging technology, they can assess creditworthiness swiftly and accurately.
In conclusion, retail finance is on the rise, driven by consumer demand and a shift in lending dynamics. As traditional banks retreat, specialist lenders are stepping into the spotlight. The future holds promise, but it also demands responsibility. Balancing growth with consumer protection will be the challenge of this new era.
The landscape is changing, and those who adapt will thrive. Retail finance is not just about lending; it’s about understanding and serving the aspirations of consumers. As we move forward, the focus will be on building trust and fostering relationships. This is the essence of modern retail finance.