The global Alternative Lending Platform Market was valued at 2.6 billion in 2022 and it is anticipated to grow up to USD 22.2 billion by 2032, at a CAGR of 23.9% during the forecast period.
The Global Alternative Lending Platform Market Report by Global Insight Services is the single and trusted source of information for the Alternative Lending Platform Market. This report provides an analysis of the market impact of the latest market disruptions such as the Russian-Ukraine War and Covid-19. The report provides a qualitative analysis of the market using various frameworks such as Porters’ and PESTLE analysis. The report includes in-depth segmentation and market size data by category, product type, application, and region. The report also includes a comprehensive analysis of recent events such as key issues, trends and drivers, restraints and challenges, competitive landscape, and M&A activity in the market.
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Major Players in the Global Alternative Lending Platform Market
Market players are focusing on strategic collaborations to enhance their product offerings. Some prominent participants in the global alternative lending platform market include Funding Circle, On Deck Capital, Kabbage, Social Finance, Inc., Prosper Funding LLC, Avant, LLC, Zopa Bank Limited, LendingClub Bank, Upstart Network, Inc., and CommonBond, Inc. among others.
An Alternative Lending Platform is a type of financial institution that provides loans and other forms of financing to individuals and businesses. These platforms typically use online platforms and peer-to-peer lending models to connect borrowers with lenders. Alternative lending platforms typically have lower borrowing costs and faster funding timelines than traditional banks.
Market Trends and Drivers
Increasing Adoption of Internet of Things and Blockchain-based Alternative Lending Platforms.
Alternative financial companies are increasingly adopting and implementing the Internet of Things (IoT) and blockchain-based technologies. These technologies help add advanced features such as easy accessibility and transparency to alternative funding platforms, further driving the Alternative Lending Platform Market growth. For example, digital products and solutions company Tavant Technologies has developed a blockchain-based digital solution that takes full advantage of data-driven processes in generating alternative funding lifecycles. Therefore, the increasing adoption of the Internet of Things and blockchain-based alternative lending platforms are expected to drive market growth for global industries in the coming years.
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Global Alternative Lending Platform Market Segmental Overview
The report analyses the global Alternative Lending Platform Market based on Deployment, Services, Solution, End-user, and Region.
Global Alternative Lending Platform Market by Deployment
Based on the deployment, the alternative lending platform market is divided into P On-Premise, and Cloud. Of these, the on-premise segment registered significant revenue in 2022. The on-premise segment dominated the market in 2021 and contributed to a share of more than 68.0% of the global revenue. Although the lending industry is steadily adopting the cloud, many lenders still view this as a barrier since they are apprehensive about data security. They choose on-premise deployment over the cloud because they are unfamiliar with the technology and concerned about losing control over their data. The data kept with lending institutions are sensitive and can be stolen or misused. As a result, businesses are still preferring on-premise deployment.
The cloud segment is anticipated to grow at the fastest CAGR during the forecast period. In addition to offering a comprehensive view of client relationships to provide a better customer experience, cloud technology also reduces overall costs and improves operational efficiency. Furthermore, adopting cloud-based deployment enables remote access, which increases business flexibility. Several players are deploying cloud-based models to gain a competitive edge over their peers.
Global Alternative Lending Platform Market by Services
By services, the industry is bifurcated into Integration & Deployment, Support & Maintenance, Training & Consulting, and Managed Services. In 2022, the integration & deployment segment held the largest revenue share of more than 42.0%. The growing prevalence of alternative lending and the rising awareness of digital means of financing are propelling the segment’s growth. Continuous improvement in customer acquisition and the growing demand for matching the right lender with the borrowers are responsible for increasing the need for these services. Moreover, the flexibility to pick the deployment model as per various attributes such as security, budget, organizational needs, and infrastructure capability is also an important factor in boosting the growth of the segment.
The managed services segment is expected to witness the fastest growth during the forecast period. Managed services can help the institutions to cope with the rapidly changing industry trends and technological advancements. Businesses cannot maintain their line of operations while keeping up with the most recent IT trends. With the help of managed services, businesses are empowered to focus on what they do best. Additionally, the technology partners support these efforts with strong IT support; hence the segment is growing significantly.
Global Alternative Lending Platform Market by Solution
Based on solution, the industry is categorized into Loan Origination, Loan Servicing, Lending Analytics, and Others. The loan origination segment accounted for the largest revenue share of more than 28.5% in 2022. The dominance is attributable to the growing popularity of alternative lending platforms as many individuals, especially students, are applying for personal and education loans. Several non-bank institutions such as insurance companies and fund managers previously invested in securitized products are exploring the growth potential. They offer credit to startups and SMEs in their developing phase.
The lending analytics segment is anticipated to witness significant growth during the forecast period. The growth is driven by the growing adoption of tools such as data analytics and predictive analytics in financing activities to reduce operational costs and maximize profitability. Improved customer acquisition and enhanced consumer experience contribute to the growth. Moreover, the efficient lifecycle management of the loans is one of the principal elements responsible for the growth of the segment.
Global Alternative Lending Platform Market by End-user
Based on end-user, the alternative lending platform market is divided into Credit Unions, Peer-to-Peer Lending, Insurance Companies, and Others. The peer-to-peer lending segment is anticipated to grow at a promising CAGR during the forecast period. The proliferation of smartphones and internet penetration is driving the segments’ growth as P2P lending platforms are run primarily via the internet using laptops or smartphones. In addition, the advantages associated with it, such as relatively low operational cost compared to legacy platforms, fuel the segments’ growth. Moreover, the convenience of getting a loan and easy accessibility also bodes well for growth.
Geographical Analysis of Global Alternative Lending Platform Market
Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. North America dominated the Alternative Lending Platform Market growth, recording the highest CAGR during the forecast period. According to the Global Entrepreneurship Monitor, U.S. start-ups make up more than 17.4% of the country’s total population. Thus, it represents an excellent opportunity for cloud lending in the region. Moreover, this region’s collaboration between banks and market lenders is rapidly increasing. These factors are expected to drive the growth of the Alternative Lending Platform Market during the projected period in this region.
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