Fintech Companies

Rising inclination toward digital transformation to drive digital lending platform market trends

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Growing adoption of mobile banking services driven by rapid digitization trends has fueled digital lending platform market size over the past few years. Consumer inclination towards using digital lenders for automotive loans is growing steadily owing to minimal documentation required, transparent and quick loan processing, as well as lower interest rates compared to conventional lending. Increasing implementation of software solutions among financial institutions to reduce operating costs and deliver services via digital channels is anticipated to bolster product demand worldwide.

South Korea Digital Lending Platform Market Revenue, By Business Model, 2018 & 2025 (USD Million)

South Korea Digital Lending Platform Market Revenue, By Business Model, 2018 & 2025 (USD Million)

A digital lending platform will essentially reduce operational, business as well as regulatory risks in digital lending organizations with a responsive and configurable approach. Use of digital platforms will cater to the mounting demand among financial organizations for enhanced customer experience while interacting with lenders and borrowers, providing speed and transparency. These platforms also improve loan collection and repayment methods for institutions with efficient real-time loan approval, processing and disbursal, which will augment digital lending platform industry share over the forecast period.

Studies have estimated that 53% of adults worldwide will be using smartphones, PCs, tablets or smartwatches to avail financial services by 2021. Cloud-based digital lending platforms are already being used by banks and NBFCs to reach customers across the globe, informing them about the status of their loan payments as well as basic account information.

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A large number of banks are leveraging the opportunity to offer digital lending services for expanding their customer base, impacting product demand. Moreover, expansion of IoT coupled with the cloud computing revolution in digital banking will help meet customer expectations by redefining loan processes, strengthening digital lending platform market outlook.

Technology has been the driving force in business transformation over the years, but the speed at which advanced technologies are being launched has reached an unprecedented level. Increasing digitalization worldwide along with growing adoption of digital platforms for conducting business is anticipated to stimulate digital lending platform industry prospects.

Digital transformation is not solely based on development of new technology, but also an organization’s ability to accept transformation at the intersection of business and people. Reportedly, 55% of startups had already switched to digital business strategies in 2018 as opposed to 38% of conventional organizations. This suggests that startups will be accountable for increasing revenue via digital platforms, expanding the scope of digital lending platform market.

Built Technologies, which focuses on taking construction lending into the digital age, had raised close to $21 million in a Series A round in 2017. The company was aimed at using digital transformation to enable lenders to use data for making more informed decisions on their loans while simultaneously providing borrowers a conveniently digital user experience with quicker access to money and propelling projects forward. Rising adoption of digital technology for lending among financial companies for loan repayments is expected to complement digital lending platform industry trends over the forecast timeframe.

Increased utilization of internet services coupled with changing end-user requirements are encouraging financial organizations to shift to digital business models for managing consumer needs on their choice of channel. Advent of advanced technologies such as biometric-based authentication, e-signatures, e-mandates, ML, AI, advanced analytics and blockchain for mitigating fraud and NPAs risk is estimated to bolster digital lending platform market expansion.

Declining costs of internet connectivity and fast-paced advancement in smartphone technology will support the rising digitalization across financial institutions, proving to be crucial factors in pushing the market growth.

Leading market players are relying on strategic alliances through mergers and acquisitions to enhance product offerings and expand their regional presence. Key players comprising digital lending platform space are Built Technologies, Finastra, Finantix, Nucleus Software, Arena Limited and Newgen Software Technologies Limited, among several others. Global digital lending platform market size is projected to surpass USD 17 billion in annual revenues by 2025.

Author NameHrishikesh Kadam

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