Digital Lending Platform Market To Hit Value .50 Billion By 2030 |Grand View Research, Inc.

Posted by Mrudula Anil Karmarkar on October 17th, 2022

The global digital lending platform market size is expected to reach USD 44.50 billion by 2030, registering a CAGR of 25.9% from 2022 to 2030, according to a new report by Grand View Research, Inc. The growing adoption of digitalization in the BFSI sector is expected to create new opportunities for market growth. According to the European Central Bank, in 2020, 46% of European banks could process mortgages digitally in two days compared to 8% in 2015.

The funding raised by the digital lending providers worldwide is also one of the major factors expected to drive market growth. For instance, in April 2021, Auxmoney, a digital lending platform provider, announced that it raised USD 271.4 million. The company uses this funding to enhance its digital lending platform for consumer credit. Furthermore, companies operating in the digital lending space are focused on partnerships to enhance their offerings and market position. For instance, in April 2022, the two fintech companies, UI Enlyte and Exaloan, announced that they are launching a strategic corporation. Through this initiative, the companies will link their platforms for digital assets and lending.

The COVID-19 pandemic had a positive impact on market growth. The established digital lenders adopted new partnerships to cater to the borrower’s funding demand amid the COVID 19 pandemic. At the same time, efforts taken by the banks to digitalize their process due to the pandemic also paved to be one of the major factors driving the market growth.

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.

To Request Sample Copy of this report, click the link:

https://www.grandviewresearch.com/industry-analysis/digital-lending-platform-market/request/rs1

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.

Digital Lending Platform Market Report Highlights

• The lending analytics segment is anticipated to register the highest CAGR during the forecast period. The benefits provided by the lending analytics solution, such as reduced operation risk, labor hours, operational cost, and others, are driving the segment
• The risk assessment segment is anticipated to register the highest CAGR from 2022 to 2030. The strong emphasis financial institutions are putting on ensuring proactive responses to various cyber threats and resuming normalcy in the event of a cyberattack is expected to drive the growth of the risk assessment segment
• The cloud segment is expected to register the highest CAGR during the forecast period. Cloud deployment helps in reducing up-front costs, particularly for new entrants contemplating a foray into the lending business
• The peer-to-peer lending segment is expected to emerge as the fastest-growing end-use segment during the forecast period. The adoption of digital lending platforms is expected to gain traction as the digitally savvy consumer base continues to expand
• North America accounted for the largest share of the market in 2021. The region is home to a large number of technology providers and hence provides immense opportunities for the adoption of digital lending platforms

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.

List of Key Players in the Digital Lending Platform Market

• Ellie Mae, Inc.
• FIS
• Fiserv, Inc.
• Newgen Software
• Nucleus Software
• Pegasystems Inc.