In-depth insights on digital lending platform market
A digital lending platform market enables customers and lenders to advance money without paper using electronic or paperless methods. This reduces expenses by speeding up customer verification. The digital lending process begins with a user-registered online application, followed by client verification and authentication, online document submission, loan sanction, loan distribution, and loan recovery.
The digital lending platform market worth in 2021 was USD 5.84 billion, and by 2030 it will be worth USD 47.85 billion, growing at a 25.97% CAGR during 2021-2030.
The market is driven by factors including the increase in government efforts and the financial industry’s growing digitalization trend. Additionally, the development of the global market is driven by the growing use of smartphones and the internet in contemporary culture.
Market Dynamics
Drivers
The growing adoption of blockchain-based digital lending platforms and solutions, artificial intelligence, and machine learning drives significant financial market development. These new technologies are opening up possibilities for expanding the functionality of digital learning systems.
The automation of the loan’s beginning life cycle is becoming simplified with the introduction of new capabilities by major vendors. For instance, the new blockchain-based lending systems for Small and Medium Enterprises will be unveiled by Singaporean fintech company Shuttleone in March 2021.
Restraints
Due to the fact that the entire loan application process takes place online, these digital lending platforms are susceptible to data hacking and a wide range of frauds, such as mortgage, payday, A.T.O. loans, and other scams, which reduces the market expansion rate.
Opportunities & Trends
The primary goal of digital lending platforms has always been to expedite the loan application and approval process. Before the introduction of computerized underwriting, loans could only be distributed through manual underwriting. Automated loan underwriting enables digital verification procedures throughout the loan cycle. For businesses in need of loans, automation has opened up a new era of possibilities. Robotic process automation (R.P.A.) and machine learning (ML) technology let fintech companies collect customer data and digitally create suggested loan approval conditions, opening up a wide range of options for market expansion over time.
Market Segmentation
On the basis of solution, the market is segmented into loan origination, lending analytics, loan management, business process management, risk & compliance management, and others.
With over 31.67% of the market share in 2021, the business process management category led the overall market. In the lending industry, business process management has a wide range of advantages, including greater worker productivity, reduced mistake rates, improved customer satisfaction, automation of routine tasks, control over core business operations, management of process logic, etc. Additionally, advances in big data & cloud computing are significantly boosting the effectiveness of business process management, which in turn is boosting market expansion rates globally.
On the basis of service, the market is segmented into consulting, training & Education, risk management, design & implementation, and support & Maintenance.
Design & Implementation held the top spot in the market in 2021, accounting for about 34.78% of global revenue. Financial institutions need a design and execution framework to facilitate the adoption of digital lending platforms. The approach can help financial institutions run their lending operations more effectively. Organizations on their lending platform offer these implementation services so that they may easily interface with various lending solutions while ensuring regulatory compliance. Numerous benefits are also offered by the design and implementation segment, including the maintenance of an adaptable and flexible administrative process and cost savings in operations.
On the basis of end-user, the market is segmented into banks, insurance companies, credit unions, savings & loan associations, and peer-to-peer lending.
With a share of roughly 33.12% in 2021, the Banks category greatly outpaced the market’s growth. Banks are making a concerted effort to digitize their financial services. Governments in established and emerging economies are encouraging banks to implement digital lending platforms and improve customer experience through strict rules and supportive policies. Banks can often confirm openness in their loan procedures thanks to digital lending platforms.
Regional Analysis
In 2021, North America ruled the market with a share of more than 33.0%. The existence of significant digital lending providers across North American nations drives the market expansion in the region. Additionally, the area has been a pioneer in implementing cutting-edge technologies. As a result, North America has always seen a higher-than-average demand for digital, end-to-end financial solutions.
Asia Pacific will experience the fastest growth. The expansion is due to the region’s growing fintech industry. The proliferation of smartphones and the rising rate of internet penetration are also positive signs for the expansion of the local market.
Key Players
- Newgen Software
- Fiserv, Inc.
- Nucleus Software
- Sigma Infosolutions
- Ellie Mae, Inc.
- F.I.S.
- Roostify
- Wizni, Inc.
- Pegasystems Inc.
- Paytm
- Tavant
The digital lending platform market worth in 2021 was USD 5.84 billion, and by 2030 it will be worth USD 47.85 billion, growing at a 25.97% CAGR during 2021-2030. Market expansion is driven by the benefits of digital lending platforms, including enhanced loan optimization loan process, quicker decision making, compliance with regulations and norms, and improved corporate efficiency.
