By Aimee Gethin, COO, Zuto
Financial services companies are becoming increasingly sophisticated in their ability to offer personalised solutions to customers. With product development fuelled by data and underpinned by automation, lenders can cater to groups of people that wouldn’t historically fit the ‘typical borrower’ profile.
This shift has been essential. The notion of an ideal borrower being someone in stable, full-time employment – with a predictable income and an established credit history – is no longer fit for purpose. The rise of the gig economy and zero hours contracts, for example, has changed workforce patterns and financial behaviours, and the systems and processes designed to support borrowers have also needed to evolve.
To cater to underserved groups better, the financial services industry is re-evaluating how it assesses risk. The challenge is to identify where the gaps in financial provision lie and find ways to respond quickly. The car finance ecosystem is a great example of how this can be achieved by embracing a spirit of collaboration and transparency, providing better outcomes to more customers.
Broader borrower profiles
There are various reasons why accessing finance is harder for certain people. A growing number simply don’t fit traditional credit profiles – from self-employed workers to people with low financial confidence or knowledge. In many cases, these customers are not necessarily high risk or vulnerable, they just don’t meet the outdated criteria.
For example, over the last 12 months more than a quarter of a million people looking to finance a second-hand car purchase on the Zuto platform fell into the category of young adults living with parents. They may have the financial means to manage repayments but will have fewer options due to a thin credit profile and having limited bills in their name.
Data for better decision making
That’s why the industry is increasingly using data such as real-time income and spending information to build a more accurate picture of a borrower’s financial behaviour. Open banking tools, for example, allow lenders to go beyond a static credit score and look at someone’s actual financial activity.
This is enabling quicker, fairer decisions to be made – by identifying who might be creditworthy despite having limited credit history. This also supports more personalised and flexible finance products, matched to people’s individual needs and circumstances.
Shared access to this level of insight can help to close the gap and tailor services to reflect how people live and work today. It can also highlight customers who, with some minor adjustments, might be able to improve their credit score.
Support beyond lending
Improving access to finance isn’t just about increasing the number of approvals without scrutiny or due care. The industry has a responsibility to help customers understand what they’re committing to and to gauge how confident they feel about managing repayments.
Consumer research that we conducted in early 2025, revealed significant gaps in people’s financial literacy. Just 16% of 18–24-year-olds, for example, said they think car finance terms and conditions are easy to understand.
Technology and automation are helping here. The industry is building tools that support financial understanding, such as in-app budgeting features, repayment calculators and real-time alerts. These tools can help borrowers stay on top of their finances, make more informed choices and reduce the risk of falling behind on payments.
Collaboration that benefits all
A fairer, more responsible finance industry requires collaboration – from traditional banks which bring trust and scale, to technology-driven organisations that can provide agility and innovation.
At Zuto, for example, we work closely with our lending partners to share relevant insights that support the development of new products designed to benefit customers. We have access to whole-of-market data that covers a broad range of customer demographics. Every month, our platform has around 12 million interactions with our lenders’ systems, which demonstrates the scale and depth of data exchanged throughout the car-buying journey.
We have also partnered with lenders within our ecosystem to develop soft search capabilities that are less daunting for underserved groups and enable lenders to develop products that reach more customers.
Initiatives like these are invaluable for understanding where gaps in financial provision might lie and bridging those gaps. Traditional providers can serve a broader range of customers using revised risk models. Intermediaries can then ensure those customers are offered products that suit their needs and are properly explained. Plus, industry-wide initiatives can promote responsible standards around affordability, transparency and support. Essentially, by working together – and prioritising customer outcomes – we can create a more accommodating and forward-thinking car finance market.
A more inclusive market means access to new customers, stronger relationships, more accurate assessments and reduced risk. But it can also help to strengthen the reputation of our sector and build an ecosystem that works for everyone.