Digital Lending Platform Market Size By Component (Solution [Loan Origination System (LOS), Loan Management System, Risk & Compliance Management System, Point of Sale (PoS) Systems, Lending Analytics, Collection & Recovery System], Service [Support & Maintenance, Design & Implementation, Training & Education, Risk Assessment, Consulting]), By Deployment Model (On-Premise, Cloud), By Business Model (Customer Driven, Staff Driven), By Product (Personal Loan, Automotive Loan, SME Finance Loan, Mortgage Loan), By Application (Banks & NBFCs, Credit Unions, Fintech Companies, P2P lenders) Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2019 - 2025

Published Date: Jul 2019  |  Report ID: GMI3019  |  Authors: Ankita Bhutani, Preeti Wadhwani

Report Format: PDF   |   Pages: 330   |   Base Year: 2018




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Digital Lending Platform Market size estimated at USD 4 billion in 2018, growing at a CAGR of over 20% from 2019 to 2025.
 

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

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The digital lending platform market is projected to exhibit an accelerated growth between 2019 and 2025 due to rising internet penetration coupled with the proliferation of smartphones and increasing digitization across financial institutions. The growing demand among financial institutions to reduce operating costs through streamlined operations across all lenders and borrowers’ interactions is further estimated to drive the adoption of digital lending platforms. A digital lending platform is anticipated to mitigate business, operational, and regulatory risks in digital lending organizations with a configurable and responsive approach.
 

The advent of advanced technologies, such as biometric-enabled authentication, e-mandates, e-signatures, AI, ML, blockchain, and advanced analytics, to mitigate fraud and NPAs risk is expected to proliferate digital lending platform market growth. A digital lending platform will cater to the growing demand among financial institutions for improved customer experience through digital end-to-end platforms. It automatically pulls credit for consumer applicants at specific points in the application process origination, servicing, collections, underwriting, and borrower’s portal for leasing and lending. Additionally, it offers omnichannel customer experience for lenders and borrowers with speed and transparency. 
 

Digital Lending Platform Market Report Coverage
Report Coverage Details
Base Year: 2018 Market Size in 2018: 4 Billion (USD)
Historical Data for: 2014 to 2018 Forecast Period: 2019 to 2025
Forecast Period 2019 to 2025 CAGR: 20% 2025 Value Projection: 17 Billion (USD)
Pages: 330 Tables, Charts & Figures: 523
Geographies covered (21): U.S., Canada, UK, Germany, France, Italy, Spain, Switzerland, China, Japan, India, Australia, South Korea, Singapore, Argentina, Brazil, Colombia, Mexico, South Africa, Saudi Arabia, UAE
Segments covered: Component, Deployment Model, Business Model, Product, Application and Region
Companies covered (26): ARGO Data Resource Corporation, Blend, Built Technologies, Inc., CU Direct, Decimal Technologies Pvt. Ltd., Docutech LLC., Ellie Mae, Inc., Finantix Pro SRL, Finastra, Fidelity National Information Services (FIS), Inc., Fiserv Inc., Intellect Design Arena Ltd., Juristech Sdn Bhd, Mambu GmbH, MeridianLink, MortgageHippo, Inc., Newgen Software Technologies Ltd., Nucleus Software Exports Ltd., Pegasystems, Inc., Roostify, Sageworks (Abrigo), Sigma Infosolutions, Symitar, Tavant, Temenos AG, Turnkey Lender
Growth Drivers:
  • Increasing digitalization
  • Adoption of digital channels to improve customer experience
  • Growing penetration of smartphones & tablets
  • Integration of blockchain and AI
  • Supportive government initiatives & regulations
Pitfalls & Challenges:
  • Reluctance to adopt digital financial services
  • Data safety & security issues
  • Lack of digital literacy in developing countries

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Digital Lending Platform Market, By Component

The solution market dominated the digital lending platform market with more than 80% share in the revenue in 2018. The market growth is attributed to the growing adoption of software solution among financial institutes to deliver their services via digital channels. The increasing adoption of internet services and changing customer requirements are also encouraging financial institutes to move toward digital business models to meet customer requirements on their choice of channel.
 

The lending analytics segment in the digital lending platform market is projected to exhibit significant growth with a CAGR of more than 22% over the forecast period. It is catering to the growing customer expectations in digital lending platforms such as personalized offerings for credit seekers. Additionally, AI, blockchain, advanced analytics, and ML offer capabilities, such as text analytics and neural networks, which further enhance the credit decision for digital lenders. It also monitors the lender’s performance and manages the risks associated with their business models. Lending analytics offers a cost-effective, scalable delivery solution through actionable reporting to digital lenders.
 

Switzerland Digital Lending Platform Market Revenue, By Service, 2018 & 2025 (USD Million)

Switzerland Digital Lending Platform Market Revenue, By Service, 2018 & 2025 (USD Million)

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Services are estimated to grow significantly over the forecast period with a CAGR of more than 24%. The growing importance of post-purchase services to facilitate a smooth transition from traditional models to digital business models is presenting huge opportunities for the service market. The design & implementation service in the digital lending platform market is gaining traction due to the growing need for sophisticated and user-friendly UX & UI design for employees of financial institutions. Design & implementation service providers are expected to cater to robust and certifiable digital asset management processes. The maturity in AI will offer autonomous agents who will operate on behalf of consumers.
 

Digital Lending Platform Market, By Deployment

The cloud-based digital lending platform market is expected to grow at a CAGR of 24% over the forecast timeline due to the increasing demand to reduce higher up-front costs among new entrants in the digital lending industry. Startups and fintech companies are adopting cloud-based digital lending platforms due to their pay-per-use payment model, which reduces the overall operational cost. Cloud-based digital lending platforms will cater to the growing need in back-end operations such as customer on-boarding, simplified online process, and reduced operational time. Additionally, the increasing digitized loan application, digitized document uploads, e-signatures, and growing use of digital channels, such as email or instant messaging for customer service, are driving the demand for cloud-based digital lending platforms.
 

Digital Lending Platform Market, By Business Model

The customer-driven business model is projected to account for over 28% share in the digital lending platform market. The customer-driven business model improves customer satisfaction & loyalty, resulting in referral business and repeat sales. It caters to specific customer needs for improving customer acquisition & retention. Additionally, it helps marketers of financial institutions to develop specific strategies for the target customer base. The changing customer preference and increase in the number of Generation-Y customers are expected to drive the demand for customer-driven business models.
 

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

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

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Digital Lending Platform Market, By Product

Consumers are increasingly using digital lending platforms to avail automotive loan due to low-interest rate than traditional lending, transparent & fast loan processing, and minimal documentation. The surging trend of digitalization, rapid urbanization, and increasing use of mobile banking for repayment of loans are driving the digital lending platform market growth. Automobile dealers are predominantly using digital lending platforms to offer customers affordable loan options, collateral-free loans, and flexible repayment methods. Additionally, it helps automobile dealers to increase their sales. The integration of advanced analytics and AI in digital lending platforms for automotive loans helps consumers in automating credit decisions, less costly underwriting, and quicker approval & disbursal of loans.
 

Digital Lending Platform Market, By Application

Banks & NBFCs leading the digital lending platform market with more than 56% share in the revenue in 2018 and is estimated to maintain dominance over the forecast timeline due to rapid digitization across financial institutions to improve customer experience, increase operational efficiency, and reduce operational costs. These financial institutions are focusing on strategic initiatives, such as mergers, acquisitions, and partnerships, to enter the digital lending market. For instance, in April 2019, KeyBank National Association acquired Laurel Road's digital lending business. The acquisition will enhance end-to-end platform digital capabilities with customer-centric technology that will streamline and improve transparency in the platform. Additionally, this acquisition is expected to improve its customer acquisition by targeting millennial professionals using technology leveraged from Laurel Road.
 

France Digital Lending Platform Market Revenue, By Application, 2018 & 2025 (USD Million)
France Digital Lending Platform Market Revenue, By Application, 2018 & 2025 (USD Million)

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Fintech companies will grow to attain an annual growth rate of more than 24% during the forecast timeline. The influx of various technology players from adjacent industries into the BFSI industry is fueling the growth of fintech companies. The innovative operating models adopted by fintech companies backed by advanced technologies, such as AI, blockchain, and ML, to reduce will further enhance digital lending platform market growth. The supportive government initiatives and regulations across regions to assist a cashless economy are driving the growth of fintech companies. The VCs, angel investors, and prominent players in the BFSI sector are providing hefty funding to fintech companies across the regions.
 

Fintech companies are focusing on strategic alliances with other market players to offer innovative digital lending solutions. For instance, in April 2019, Xiaomi partnered with KreditBee to offer loans to MIUI users in India above the age of 18. The credit amount ranges from USD 14.53 to USD 1,453.10. Smartphone & tablet manufacturers are focusing on salaried individuals to avoid bad loan credit and reduce Non-Performing Assets (NPAs).
 

Digital Lending Platform Market, By Region

North America accounts for the highest share in the digital lending platform market in 2018 due to the high adoption of digital end-to-end banking solutions in the region. According to the America Bankers Association, over 50% larger banks in the region along with over 38% smaller banks in the region are already using digital platforms to deliver their lending services to customers. Furthermore, supportive government policies across the region to promote the use of digital banking solutions are also the major forces driving the digital banking market. Governments are constantly working to drive the adoption of digital banking solution to streamline the lending process and reduce the risks of loan defaults.
 

The Asia Pacific digital lending platform market is estimated to grow with the annual growth rate of 25% over the forecast period. The growth of the market is attributed to the widespread adoption of digital solutions in countries of this region. The increasing smartphone users and high penetration of internet users in the region also foster market growth in this region. Supportive government initiatives in developing countries including India and China to promote the use of digital banking instruments will augment the demand for digital lending platforms in the region.
 

APAC Digital Lending Platform Market Share, By Region, 2018
APAC Digital Lending Platform Market Share, By Region, 2018

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Competitive Market Share

The digital lending platform market is highly fragmented due to the presence of several multinational and regional players. These companies are investing heavily in R&D to develop more robust digital lending platform solutions and innovate their existing solutions. For instance, in 2018, Fiserv, Inc. invested over USD 465 million in developing new & innovative as well as enhancing existing offerings.
 

Prominent market players are focusing on strategic alliances, such as partnerships, acquisitions, and mergers, to improve their product offerings and expand their regional presence. For instance, in August 2018, Q2 Holdings, Inc. acquired Cloud Lending, Inc., a privately-held SaaS company which offers an integrated end-to-end lending and leasing platform. The acquisition will help Q2 Holdings to use Cloud Lending’s platform to generate more revenue, close more loans, and offer a better experience to borrowers throughout the loan process.
 

The key players operating in the digital lending platform market are ARGO Data Resource Corporation, Built Technologies, Inc., CU Direct, Decimal Technologies, Docutech LLC, Ellie Mae, Inc., Finantix, Finastra, FIS, Fiserv Inc., Intellect Design Arena Limited, Juristech, Mambu GmbH, Newgen Software Technologies Limited, Nucleus Software, Pegasystems Inc., Roostify, Sigma Infosolutions, Symitar, and Tavant Technologies.
 

Industry Background

The digital lending platform is a technology-based lending solution used by financial institutions to reduce the risk of fraud & NPAs and fasten the loan lifecycle. The advent of technologies, such as AI, ML, blockchain, cloud computing, and biometric authentication, coupled with the proliferation of smart devices is supporting the digital lending platform concept to become cost-effective and efficient. The platform is integrated with advanced technologies such as AI algorithms, blockchain technology, biometric authentication, e-signature, big data analytics, machine learning, and deep learning. These platforms support financial institutions with efficient real-time loan processing, approval, and disbursal. This also enhances the loan collection and repayment methods used by financial institutions.
 


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