Digital Lending Platform Industry Overview
The global digital lending platform market size was valued at USD 5.84 billion in 2021 and is expected to register a compound annual growth rate (CAGR) of 25.9% from 2022 to 2030.
The benefits offered by the digital lending platforms, such as enhanced loan optimized loan process, quicker decision making, compliance with regulations and rules, and improved business efficiency, are expected to drive market growth. Traditional lending platforms relied on human interventions and physical interactions at every step, which increased the processing time and the chances of errors caused by humans. However, the digital lending platforms enable the banks to automate their entire loan process and thereby enhance customer experience.
The growing importance of open banking worldwide is creating new opportunities for market growth. Open banking enables the lenders to efficiently consolidate the borrowers’ data, such as previous loans, current outstanding debts, and credit scoring, among others. This helps the lenders to speed up their decision process and offer customized loan solutions based on client needs. Therefore, various financial service providers are entering into a partnership with open banking providers to improve their lending process. According to the survey conducted by Credit Kudos from October to November 2021, out of the surveyed lenders, 87% of them plan to use open banking technology by 2023 in the U.K.
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The capabilities of blockchain technology to efficiently transfer documents with high integrity are expected to increase its importance among the digital lending providers. Through blockchain technology, the participants involved in the lending process, such as regulators and auditors, can easily verify identities and track transactions. For instance, in March 2022, Figure Lending LLC and Apollo completed a transaction involving the transfer of ownership and digital mortgage loans through blockchain technology. This secured and streamlined mortgage loan registry is expected to bring greater transparency and efficiency to the mortgage industry. Digital lenders across the world are making efforts to secure banking licenses to lower funding and origination costs. For instance, Zopa, a U.K.-based digital lending company, secured a banking license in June 2020. Additionally, in January 2022, SoFi Technologies, an online lender, received approval from U.S. regulators to become a bank holding company. Thus, the growing number of digital lenders with banking licenses is creating new opportunities for the market.
The increasing use of digital lending platforms involves the transfer of sensitive and personal financial data over the internet. This transfer of information has raised concerns regarding data security across businesses using digital lending. At the same time, digital lending providers are also expected to comply with data protection laws framed by regulatory bodies to protect customer data from data breaches. The digital lending solution providers in Europe are expected to follow the European General Data Protection Regulation (GDPR) guidelines, which include standards that protect customer data.
The outbreak of the COVID-19 pandemic led to a positive impact on the digital lending platform market. Credit unions and banks are particularly enhancing their digital banking offerings to better meet the needs of their customers in the wake of the outbreak of the pandemic. Additionally, in the COVID-19 pandemic, the banks have increasingly started using digital channels for lending loans under the Paycheck Protection Program. The Paycheck Protection Program in the U.S. provides small businesses funds for up to 8 weeks. According to the statistics provided by Numerated, a digital lending platform provider, 82% of businesses in the U.S. choose to apply for PPP loans online during COVID-19 rather than via traditional channels.
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Digital Lending Platform Market Segmentation
Grand View Research has segmented the digital lending platform market based on solution, service, deployment, end-use, and region:
- Digital Lending Platform Solution Outlook (Revenue, USD Million; 2017 – 2030)
- Business Process Management
- Lending Analytics
- Loan Management
- Loan Origination
- Risk & Compliance Management
- Digital Lending Platform Service Outlook (Revenue, USD Million; 2017 – 2030)
- Design & Implementation
- Training & Education
- Risk Assessment
- Support & Maintenance
- Digital Lending Platform Deployment Outlook (Revenue, USD Million; 2017 – 2030)
- Digital Lending Platform End-Use Outlook (Revenue, USD Million; 2017 – 2030)
- Insurance Companies
- Credit Unions
- Savings & Loan Associations
- Peer-to-Peer Lending
- Digital Lending Platform Region Outlook (Revenue, USD Million; 2017 – 2030)
- North America
- Asia Pacific
- Latin America
- Middle East & Africa (MEA)
Market Share Insights
- March 2022: Figure Lending LLC and Apollo completed a transaction involving the transfer of ownership and digital mortgage loans through blockchain technology.
- January 2022: Paytm announced its partnership with Fullerton India, a non-banking financial company.
- June 2021: Razorvision Consulting, a digital lending technology provider, announced its partnership with NXTsoft, an API connectivity provider.
- February 2021: Nomis Solutions announced a partnership with Heitman Analytics, a provider of mortgage analytics reporting. The partnership is aimed at helping lending clients develop strategies based on effective and efficient analysis of data.
- June 2020: Zopa, a U.K.-based digital lending company, secured a banking license in.
Key Companies profiled:
Some of the prominent players in the global digital lending platform market are:
- Ellie Mae, Inc.
- Fiserv, Inc.
- Newgen Software
- Nucleus Software
- Pegasystems Inc.
- Sigma Infosolutions
- Wizni, Inc.
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