by The Credit Risk Assessment Market is estimated to be valued at US$ 7.31 Bn in 2023 and is expected to exhibit a CAGR of 12.4% over the forecast period 2023 – 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Credit risk assessment refers to the process of evaluating the likelihood that a borrower will default on their debt obligations. It helps lenders determine the creditworthiness of potential borrowers and monitor the risk levels of existing borrowers. Credit risk assessment involves collecting, analyzing and verifying various types of risk-related data such as credit history, repayment capacity, collateral coverage etc. This helps lenders make informed lending decisions and minimize losses from bad loans.
Market key trends:
One of the key trends driving growth in the credit risk assessment market is the increasing adoption of artificial intelligence and data analytics technologies by lenders and financial institutions. AI tools such as machine learning and neural networks are being used to gather, analyze and interpret huge volumes of consumer data coming from varied sources to assess credit risk more accurately. Data analytics helps identify patterns and risk predictors from past consumer behaviours. This allows for more consistent, precise and real-time credit risk assessments compared to conventional methods. AI and data-driven approaches also help automate labor-intensive manual processes, thereby improving operational efficiencies for organizations.
Porter’s Analysis
Threat of new entrants: New players will face high entry barriers due to high capital requirements, strong brand loyalty of existing players, and needs specialized technical skills.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of substitutes and differentiated offerings by various players.
Bargaining power of suppliers: Suppliers have low bargaining power due to availability of alternative suppliers in the market.
Threat of new substitutes: Threat of substitution is low as there are limited direct substitutes available for credit risk assessment solutions.
Competitive rivalry: Intense competition among existing players.
SWOT Analysis
Strengths: Well established global presence of key players, proven track record, advanced analytical tools and techniques.
Weaknesses: High dependency on trained professionals, ongoing changes in regulations impacts solutions.
Opportunities: Growing adoption in emerging markets, integration with other financial solutions, customized offerings.
Threats: Economic slowdowns impacts lending, privacy and security challenges.
Key Takeaways
Global Credit Risk Assessment Market Demand is expected to witness high growth, exhibiting CAGR of 12.4% over the forecast period, due to increasing lending activities and adoption of advanced analytics across banks and financial institutions. The US dominates currently due high credit card debt and availability of FICO scores. However, China and India are expected fastest growing markets in Asia Pacific due to rapid economic growth and focus on financial inclusion.
Regional analysis Credit risk assessment solutions are seeing increasing adoption in Asia Pacific region growing at fastest pace. China dominates currently riding on increased lending while digital lending startups drive adoption in India and other Southeast Asian countries. North America is the largest market currently led by US where credit scores are deeply ingrained in financial processes. Europe is another major market driven by stringent banking regulations.
Key players operating in the credit risk assessment market are Experian, Equifax, TransUnion, FICO, Moody’s Analytics, Oracle, IBM, SAP, SAS Institute, Fiserv, Pegasystems, Genpact, ACL, Kroll, PRMIA, Riskonnect, RiskSpotter, Riskdata, BRASS, Misys.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
