by The digital lending market involves the use of technological solutions and advanced analytics for lending operations. The increasing use of AI and machine learning enables lenders to streamline operations, automate repetitive tasks, and provide enhanced customer experiences. AI helps strengthen underwriting practices by considering thousands of data points to ascertain creditworthiness. It also assists in detecting fraud cases and reducing risks. Major players are investing in AI to power their lending platforms and mobile applications.
The global digital lending market is estimated to be valued at US$ 538.99 in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The increasing adoption of artificial intelligence is expected to be a major driver for the global digital lending market over the forecast period. AI aids lenders in analyzing massive amounts of data, identifying patterns and creditworthiness faster. It is proficient at automating repetitive tasks like data entry, basic calculations etc. This helps lenders reduce turnaround times, enhance operational efficiency and offer personalized lending options to customers. Moreover, AI-powered tools streamline KYC verification, income assessment and risk evaluation processes.
Another factor propelling the market growth is the growing volume of digital lending transactions. More customers are opting for paperless, hassle-free digital lending platforms which offer convenient application procedures, swift approval decisions and flexible repayment options. This transition to digital is prompting established traditional lenders to invest in technological upgrades and focus on developing robust digital channels. The above mentioned drivers are expected to largely influence the global digital lending market expansion during the forecast period.
Segment Analysis
The digital lending market is segmented into business lending and consumer lending. The consumer lending segment dominated the market in 2022 with a market share of around 60%. This is primarily due to the rising popularity of digital lending platforms for personal loans, education loans, and car loans among consumers. Consumers find digital lending process more convenient compared to traditional banking methods as it provides easy access to credit through mobile and online channels with minimal documentation.
PEST Analysis
Political: Government regulations around data privacy and security have been increasing which directly impacts digital lenders. However, some countries are promoting financial inclusion through digitization which benefits the market.
Economic: Growing internet and smartphone penetration coupled with rising disposable income levels is fueling the demand for digital lending services. Rising FinTech investments and innovations are further driving the market.
Social: Younger population is more comfortable transacting online which is increasing the adoption of digital lending platforms. Convenience of 24*7 access is a major social factor for digital lending.
Technological: Advances in data analytics, AI and mobile technology is enabling digital lenders to analyze large customer data and offer customized loan offers. Blockchain can further enhance the security and transparency of digital lending processes.
Key Takeaways
Global Digital Lending Market Size is expected to witness high growth over the forecast period of 2023 to 2030. The global digital lending market is estimated to be valued at US$ 538.99 Mn in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2023 to 2030.
Regionally, Asia Pacific is projected to dominate the market growing at over 15% CAGR owing to increasing smartphone and internet users in countries like India and China. Presence of large underbanked population and initiatives towards financial inclusion is driving the adoption of digital lending platforms in the region.
Key players
Key players operating in the digital lending market are Continental AG, Valeo, Robert Bosch, Denso Corporation, Magna International, Ficosa, ZF Friedrichshafen, Gentex, Aptiv, Renesas Electronics. Continental AG and Robert Bosch are among the top players dominating the digital lending solution provider market owing to their extensive product portfolio and global presence.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
