Digitization has quickly become one of the top strategies pursued by financial institutions to improve core processing competencies, gain deeper business insights, and enhance customer services. The digitization of lending services is particularly beneficial to lenders and borrowers in the form of convenient loan applications and disbursement processes.
Digital lending services also allow financial institutions to make better, more informed loan management decisions. The strong emphasis put by financial institutions on digitizing their services to achieve business efficiency and better outcomes is expected to drive the growth of the market.
Various governments are pushing their favorite initiatives to ensure easy availability of credit for businesses, which is expected to drive the adoption of digital lending platforms over the forecast period. For example, 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 the Ontario government.
The Ontario government provided $3 million in loans for small businesses throughout this partnership, which boosted Lending Loop’s loans by 10%. Alternatively, 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. These measures are anticipated to bode well for the growth of the market over the forecast period.
Specifically, the emergence of innovative solutions based on the latest technologies, such as blockchain, Machine Learning (ML), Artificial Intelligence (AI), and Robotic Process Automation (RPA), are helping financial institutions in securing customer data while adding transparency to the lending process.
Additional benefits of these emerging technologies allow 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 significantly.
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 are struggling to obtain credit in the wake of the outbreak of the pandemic, digital lending platforms have allowed enterprises to gain access to credit easily and conveniently and expand their business.
For example, 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.
