According to a joint study by management consultancy Mercer Oliver Wyman and European Credit Research Institute (ECRI), the European consumer finance market has grown at an annual rate of over 7% over the past five years to generate around ©Ä billion in profits. The study found big differences in performance amongst consumer finance players. Consumer credit is becoming a highly contested space with specialist firms fighting for particular sectors.
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The study identified that winners will be those with specialist skills. Europe has already produced a number of pan-European credit specialists. Moreover, regulatory changes resulting from the new capital requirements for banks in the EU will substantially reduce the cost of capital for consumer lending.
The study concludes that not all players can become Pan-european consolidators, or sector specialists. The key will be for companies to perform a self-diagnosis of starting point, physical assets, competencies and ambitions and determine what their reasonable optimal long-term position will be.
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