The global digital lending platform market size is expected to reach USD 26.08 billion by 2028, registering a CAGR of 24.0% from 2021 to 2028, according to a new report by Grand View Research, Inc. Digitization is emerging as the most popular strategy pursued by financial institutions to improve core processing competencies, gain deeper business insights, and enhance consumer services. Digitization of lending services is particularly benefitting lenders and borrowers in the form of convenient loan application and disbursement processes. Digitizing lending services is also allowing financial institutions to make better and informed loan management decisions. The strong emphasis put by financial institutions on digitalizing their services to achieve business efficiency and better outcomes is expected to drive the growth of the market.
Favorable initiatives pursued by various governments to ensure the easy availability of credit for businesses are expected to drive the adoption of digital lending platforms over the forecast period. For instance, in May 2018, Lending Loop, a financial institution that provides a peer-to-peer online lending platform for small and medium enterprises, announced its partnership with Ontario government. The Ontario government provided USD 3 million loans for small businesses through this partnership, which boosted the Lending Loop’s loans by 10%. On the other hand, regulators in economies, such as the U.S., Singapore, the U.K., Hong Kong, and Australia, have created sandboxes to support innovations in the financial sector. All such measures pursued by governments and regulators are anticipated to bode well for the growth of the market over the forecast period.
The emergence of innovative solutions based on the latest technologies, such as blockchain, Machine Learning (ML), Artificial Intelligence (AI), and Robotic Process Automation (RPA), is helping financial institutions in securing customer data while adding transparency to the overall lending process. As such, innovative digital lending solutions are particularly allowing banks, credit unions, and insurance companies, among others, to streamline their processes and improve the quality of their services. AI-enabled digital lending solutions can potentially reduce loan processing time and operational costs. For instance, in October 2020, Roostify-a digital lending platform provider-announced its partnership with Google. Owing to this partnership, the former company can apply Google Cloud AI capabilities for helping its lenders to process mortgage applications more effectively and faster.
The outbreak of the COVID-19 pandemic is expected to have a positive impact on market growth. While several companies across the globe are facing challenges in obtaining credit in the wake of the outbreak of the pandemic, digital lending platforms are allowing enterprises to gain access to credit easily and conveniently and expand their business. For instance, in April 2020, India Lends announced the launch of Digital Lending 2.0 to provide consumers with efficient financial solutions in the wake of the outbreak of the COVID-19 pandemic.
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