The global digital lending platform market size was valued at USD 3.5 billion in 2018 and is anticipated to exhibit a CAGR of 20.7% from 2019 to 2026. The increasing focus of financial institutions to offer an enhanced and personalized experience to their customers is expected to drive the market over the forecast period. Furthermore, the rising shift from traditional lending to digital lending and growing need to reduce loan management time among lenders and borrowers are expected to boost the market growth. Increasing internet penetration, along with the proliferation of smartphones, is further expected to propel the market growth.
A digital lending platform helps in mitigating operational, business, and regulatory risks among digital lending organizations through configurable and responsive approach. The rising demand for digital lending platform among financial institutions to minimize operating costs by modernizing operations across all borrowers and lenders is anticipated to propel the market growth. Moreover, changing customer requirements and growing adoption of internet services are also encouraging banking, financial services, and insurance organizations to shift toward digital business models. This is further helping the organizations to meet their customer requirements on their choice of channel.
The technological advancements such as e-mandates, biometric-enabled authentication, e-signatures, blockchain, Artificial Intelligence (AI), machine learning, and advanced analytics, to mitigate fraud is anticipated to accelerate the market growth. A digital lending platform helps in catering to the rising demand among financial institutions for enhanced customer experience through end-to-end digital platforms. The digital lending platform also offers an omnichannel customer experience for borrowers and lenders with transparency and speed. Additionally, increasing consumer demand and expectations towards transparent transaction processes is expected to drive the market.
The increasing focus on digital channels by both financial institutions and their customers, has led to an increase in volume of payment transactions in the marketplace. This is expected to drive the demand for digital lending platform to manage the transaction processing. Digital lending platform uses industry best practices and customized models along with the existing customer data to automate the lending process. It also eliminates the risk of improper decision making as it happens in traditional lending.
However, challenges such as data theft and privacy concerns are expected to pose as a challenge to the market growth. The digital platform is heavily reliant on technology and internet access. A single technical issue with a system or a power outage may virtually disable a user’s ability to use a digital platform. Other challenges, such as higher dependency on traditional lending methods and lack of digital literacy in underdeveloped countries, are expected to restrict the market growth to a certain extent.
On the basis of solution, the digital lending platform market is segmented into business process management, lending analytics, loan management, loan origination, and risk and compliance management. The business process management segment dominated the market in 2018. Business process management has gained popularity owing to its potential to minimize operational costs and significantly increase productivity. Furthermore, benefits such as flexibility, agility, and the ability to deploy new applications quickly are expected to drive demand for business process management segment over the forecast period.
Large financial institutions are inclined towards automation. The adoption of automation in business processes improves the customer experience, owing to better customer service and reduced lead times for the products. These factors are expected to drive the growth of the business process management segment. Moreover, advancements in big data and cloud computing offer high efficiency in business process management. The increased IT expenditure globally is further expected to provide significant growth for the business process management segment.
The design and implementation segment dominated the market in 2018 and was valued at USD 297.9 million. The adoption of digital platforms by financial institutions needs to be supported by the design and implementation framework. The framework helps the financial institutions to perform lending business operations efficiently. Organizations are imparting these services in their lending platform, which allows them to easily integrate with various lending solutions and also to maintain the regulatory compliances of the governing bodies.
The growing prominence of post-purchase services to expedite a smooth transition from traditional to digital business models is providing opportunities for the service providers in the market. The increasing need for user-friendly and sophisticated User Interface (UI) design for employees of financial institutions is further expected to drive demand for design and implementation segment during the forecast period. The design and implementation service also helps financial institutions to adopt new cloud solutions while integrating with traditional infrastructure. These factors are anticipated to drive demand for the design and implementation segment.
On the basis of deployment, the market is segmented into the on-premise and cloud. The on-premise segment dominated the market in 2018 and expected to witness remarkable growth over the forecast period. The rising number of data breaches and cyberattacks is encouraging the financial institutions to adopt on-premise digital lending platforms to prevent cyber risk. Furthermore, on-premise deployment minimizes the total cost of ownership as there is zero or minimum monthly or annual subscription fees. This, in turn, is driving the growth of the on-premise deployment segment.
The cloud deployment segment is gaining traction owing to innovative practices and preferred use of cloud platforms in the industry. Fintech companies are now focusing on deploying cloud-based digital lending platforms, owing to their pay-per-use payment model, which allows companies to minimize the overall operational cost. It also helps to cater to the growing need in back-end operations such as simplified online process, customer onboarding, and reduced operating time. Furthermore, increasing number of digitized document uploads, digitized loan applications, and increasing use of digital channels, such as instant messaging or email for customer service, are expected to drive demand for the cloud deployment segment.
The bank segment dominated the digital lending platform market in 2018 and is expected to maintain its dominance over the forecast period. The dominance can be attributed to the introduction of digitalization and increasing focus of banks on digitizing their financial services, followed by stringent government regulations. The increase in the number of government initiatives and financial regulations in both developed and developing countries have encouraged banks to adopt digital lending platforms to offer enhanced customer experience.
Increasing digitization to improve front-end customer experience and surge in customer acquisition over social media channels are further expected to drive demand for digital lending platform in banks. The banks are focusing on strategic initiatives, such as partnerships and mergers and acquisitions, to enter the digital lending market. For instance, in April 2019, KeyBank National Association acquired the digital lending business of Laurel Road. The acquisition helped the company to enhance its digital capabilities through customer-centric technology and end-to-end lending products, which improves transparency in the platform.
North America dominated the market in 2018 and is anticipated to continue its dominance throughout the forecast period. This dominance can be attributed to the presence of key players, technological advancements, and the high demand for digital end-to-end financial solutions. Owing to the presence of a large number of the mobile workforce in the region, the financial institutions are digitalizing their services to enhance their customer experience. In order to differentiate themselves from competitors, financial institutions in the region are significantly adopting the digital capabilities into their offerings to maintain a substantial competitive advantage.
The Asia Pacific regional market is anticipated to register significant growth over the forecast period. This growth can be attributed to the increasing number of fin-tech companies in the region. The growing number of smartphone users and the high penetration of internet users in the region are likely to propel the market growth in the region. Additionally, favorable government initiatives in developing economies, including China, India, and Singapore to promote the use of advanced banking instruments is expected to drive the market in the Asia Pacific region.
Key players in the market comprise Ellie Mae Inc.; FIS; Fiserv, Inc.; Newgen Software; Nucleus Software; Pegasystems Inc.; Roostify; Sigma Infosolutions; Tavant; and Wizni, Inc. Product launches, mutual agreements, and product upgrades are some of the key strategies adopted by the key players to strengthen their market position. The companies are also focusing on mergers and acquisitions with banks to provide enhanced customer experience. For instance, in March 2019, Amount LLC partnered with TD Bank, N.A. Through the partnership, TD Bank is leveraging Amount’s platform to boost its TD Fit Loan. The platform helped the bank to meet increasing consumer demand for mobile and digital lending experience.
Key players are also highly investing in research and development activities to develop and expand the capabilities of their technologies. The companies are focusing on maintaining and extending the support of their existing solutions and are investing in strategic applications that incorporate the latest business innovations. For instance, in 2018, Pegasystems Inc. invested USD 181 million in research and development activities to develop innovative business solutions.
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Attribute |
Details |
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Base year for estimation |
2018 |
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Actual estimates/Historical data |
2015 - 2017 |
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Forecast period |
2019 - 2026 |
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Market representation |
Revenue in USD Million and CAGR from 2019 to 2026 |
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Regional scope |
North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
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Country scope |
U.S., Canada, Germany, U.K., China, India, Japan, Brazil |
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Report coverage |
Revenue forecast, company share, competitive landscape, and growth factors and trends |
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15% free customization scope (equivalent to 5 analyst working days) |
If you need specific information, which is not currently within the scope of the report, we will provide it to you as a part of customization |
This report forecasts revenue growth at global, regional, and country levels and provides an analysis on the latest industry trends in each of the sub-segments from 2015 to 2026. For the purpose of this study, Grand View Research has segmented the global digital lending platform market report based on solution, service, deployment, end use, and region:
Solution Outlook (Revenue, USD Million, 2015 - 2026)
Business Process Management
Lending Analytics
Loan Management
Loan Origination
Risk & Compliance Management
Others
Service Outlook (Revenue, USD Million, 2015 - 2026)
Design & Implementation
Training & Education
Risk Assessment
Consulting
Support & Maintenance
Deployment Outlook (Revenue, USD Million, 2015 - 2026)
On-premise
Cloud
End-use Outlook (Revenue, USD Million, 2015 - 2026)
Banks
Insurance Companies
Credit Unions
Savings & Loan Associations
Peer-to-Peer Lending
Others
Regional Outlook (Revenue, USD Million, 2015 - 2026)
North America
U.S.
Canada
Europe
U.K.
Germany
Asia Pacific
China
India
Japan
Latin America
Brazil
Middle East & Africa
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