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Digital Lending Market - Growth, Trends, and Forecasts (2020 - 2025)

  • ID: 5177546
  • Report
  • August 2020
  • Region: Global
  • 120 pages
  • Mordor Intelligence

FEATURED COMPANIES

  • Ellie Mae, Inc.
  • Finastra
  • Fiserv, Inc.
  • Fujitsu Limited
  • Pegasystems Inc.
  • RapidValue Solutions
The Digital Lending Market is expected to register a CAGR of approximately 20% during the forecast period (2020 - 2025). The Lending landscape has changed drastically over the years due to the rapid adoption of digitization in the BFSI industry. The traditional form of lending still prevails in many parts of the world. However, the benefits provided by the digital solution providers are increasingly paving the way for the adoption of digital lending solutions and services across the enterprises.
  • Another major factor driving the growth of the market studied is the changing consumer expectation and behavior due to the several benefits offered by the digitization of banking and financial services. The customers may range from diversified backgrounds and may require the loan for a variety of purposes ranging from personal loans to SME finance and home loans, amongst many others.
  • Further, the adoption of several technological advancements, such as the proliferation of adoption of smartphones has led to an increase in the adoption of digital banking across several end-user verticals. Also, technologies like Artificial Intelligence, Machine Learning, and Cloud Computing benefit the banks and fintech as they can process huge amounts of information about customers. This data and information are then compared to obtain results about suitable services/solutions that customers want, which has aided, essentially, in developing customer relations.
  • Aire, Kabbage, and Kasisto are some of the most prominent financial sector startups that have fully invested in AI. For instance, Kabbage uses AI algorithms that assess all risks of lending money to a certain customer, and it allows managers of the company to give loans in minimal time. The demand for personalization of their needs among consumers in the fintech and banking companies have further strengthened the demand for AI.
  • Moreover, due to the Covid-19 pandemic, SMEs across the globe are facing challenges to raise funds during the crisis to keep their businesses operating. Digital Lending is expected to find several opportunities, especially amongst the SMEs for growth and adoption. For instance, in April 2020, IndiaLends launched Digital Lending 2.0, a range of touchless and contactless products, including loans, insurance, and a line of credit. The new offering is expected to provide its consumers with quick and effective financial solutions during and after the nationwide lockdown paving the way for a new normal.
Key Market Trends

Cloud-based Solutions Expected to Gain Maximum Traction

The cloud-based services have been experiencing increased adoption across Fintechs, owing to its advantages over the on-premise solutions. The cloud-based digital lending solution simplifies the borrowing experience of the borrowers by helping lenders close loans faster and reduce operational inefficiencies. It also provides enhanced business agility, automation, and configuration of the loan cycle.
  • Since the Fintech companies are relatively new and have been offering solutions such as digital lending, which is still evolving, cloud-based deployment of these solutions is expected to be on the rise. Many financial institutions are adopting cloud-based solutions with the aim of leveraging the benefits shared IT resources and ecosystems deliver across the enterprise.
  • The major adopters for these solutions are expected to be the Fintech business units that generate massive amounts of data but lack IT infrastructure and computational power required to analyze such data. Also, due to data confidentiality, there has also been a trend of utilizing the hybrid solution, where core data may be kept in the on-premise systems.
  • Recently, Temenos, the banking software company, launches new transparent AI (XAI) models delivered as SaaS to help banks and credit unions speed up digital onboarding and loan processing for economic relief to SMEs and retail customers during Covid-19 crisis. These patented XAI models allow banks to accelerate digital onboarding, conduct eligibility checks, and process loan applications for SMEs and retail customers.
North America Expected to Dominate the Market

North America is one of the largest and most advanced markets for digital lending, globally, due to its early adoption of digitization in various sectors. Also, factors such as the strong economy, robust presence of prominent solution providers, coupled with strong investment by government and private organizations for the development and growth of research & development activities, are poised to drive the demand for digital lending in the region.
  • The region is expected to dominate the global market in the forecast period, owing to its developed infrastructure that can house advanced solutions in the fintech sector. The increasing inflow of investments in startups for the implementation of AI and cloud computing technologies in the BFSI sector would further augment the growth of the market in the near future.
  • The region is also witnessing strategic partnerships and acquisitions which help the solution providers boost their market presence. For instance, in June 2020, OptifiNow collaborated with the Ellie Mae Digital Lending Platform, to integrate its sales and marketing automation technology platform with the company's digital lending platform, including the Encompass Partner Connect API technology. The collaboration will allow the lenders to more efficiently and securely share data between OptifiNow’s solutions and Encompass to drive quality and efficiency in the loan origination process.
Competitive Landscape

The competitive landscape of the Digital Lending Market is moderately fragmented owing to the presence of several solution providers, with none of them holding a majority share in the market. The market players are making several innovations to improvise their offerings and gain maximum market traction. The emerging players in the market are strategically raising funds to provide innovative and technologically integrated solutions. The market players are also viewing strategic collaborations as a lucrative path towards growth.

June 2020 - A Mumbai-based digital loan provider, InCred, with loans, such as home loans, business loans, and personal loans, acquired Qbera, another digital lending platform. With the acquisition of Qbera, InCred is aiming to strengthen its digital distribution business.
  • January 2020 - PayU, the payments, and fintech business of Prosus, created a new digital lending provider in India through the merger of LazyPay, PayU’s consumer lending business, with PaySense, one of India’s fastest-growing digital credit platforms.
  • August 2019 - Tala, a digital lending startup, raised USD 110 million funding for expansion in India.
Reasons to Purchase this report:
  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support
Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Ellie Mae, Inc.
  • Finastra
  • Fiserv, Inc.
  • Fujitsu Limited
  • Pegasystems Inc.
  • RapidValue Solutions
1 INTRODUCTION
1.1 Study Assumptions & Market Definition
1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Digitization of the Banking Industry and the Loan Processing Cycle
4.2.2 Increased Adoption of Technologies like AI and Cloud Computing in the BFSI Industry
4.3 Market Restraints
4.3.1 Skepticism About Shifting from Traditional Lending Processes
4.3.2 Increasing Data Security and Privacy Concerns
4.4 Industry Attractiveness - Porter's Five Forces Analysis
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Assessment of Impact of Covid-19 on the Market

5 MARKET SEGMENTATION
5.1 By Components
5.1.1 Solutions**
5.1.1.1 Loan Origination
5.1.1.2 Loan Administration
5.1.1.3 Loan or Collaterals Management
5.1.1.4 Risk & Compliance Management
5.1.1.5 Other Solutions (Loan Servicing, Portfolio Management, etc.)
5.1.2 Services
5.2 By Deployment Model
5.2.1 On-Cloud
5.2.2 On-Premise
5.3 Geography
5.3.1 North America
5.3.2 Europe
5.3.3 Asia-Pacific
5.3.4 Latin America
5.3.5 Middle-East & Africa

6 COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 Fujitsu Limited
6.1.2 Salesforce.com, Inc.
6.1.3 Sigma Infosolutions
6.1.4 Fiserv, Inc.
6.1.5 Fidelity National Information Services, Inc.
6.1.6 Newgen Software Technologies Limited
6.1.7 Ellie Mae, Inc.
6.1.8 Nucleus Software Exports Ltd.
6.1.9 Pegasystems Inc.
6.1.10 RapidValue Solutions
6.1.11 Finastra
6.1.12 Tavant Technologies, Inc.
6.1.13 TietoEVRY

7 INVESTMENT ANALYSIS

8 MARKET OPPORTUNITIES AND FUTURE TRENDS
Note: Product cover images may vary from those shown

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  • Fujitsu Limited
  • Salesforce.com, Inc.
  • Sigma Infosolutions
  • Fiserv, Inc.
  • Fidelity National Information Services, Inc.
  • Newgen Software Technologies Limited
  • Ellie Mae, Inc.
  • Nucleus Software Exports Ltd.
  • Pegasystems Inc.
  • RapidValue Solutions
  • Finastra
  • Tavant Technologies, Inc.
  • TietoEVRY
Note: Product cover images may vary from those shown

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