LendTech Market Expected to Reach $61.9 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “LendTech Market By Component (Solution, Services), By Deployment Mode (On-Premises, Cloud), By Type (Consumer Lending, Business Lending), By Organization Size (Large Enterprises, Small And Medium-Sized Enterprises), By End User (Banks, Credit Unions, NBFCs): Global Opportunity Analysis And Industry Forecast, 2022-2031". The lendtech market was valued at $8 billion in 2021, and is estimated to reach $61.9 billion by 2031, growing at a CAGR of 23.2% from 2022 to 2031.

The use of lending technology will be further boosted by the rising use of advanced technologies like AI. Financing is becoming simpler and more cost-effective owing to its usage. Many FinTech companies are creating and utilizing lendtech loans technologies today resulting in lendtech market growth. Prosper, which is a peer-to-peer lending company, allows borrowers and lenders to collaborate and provides new-age lending technology benefits, including affordable rates, good terms, and evaluation, which are not dependent only on credit score.

Moreover, to maximize the benefits of borrowing from FinTech lenders, consumers need to provide direct access of records through a cloud-based accounting software package and banking data permissions. In addition, bank permission allows lenders to run their analytical tools to speed up the credit decisions. Furthermore, rapid growth of the lendtech market is attributed to continuous increase in digitalization initiatives among financial organizations and surge in government initiatives for lendtech in developing countries, such as India and China. Conversely, technological advancements such as integration of AI in lending platforms and rapid penetration of cloud-based platforms are expected to present potential growth opportunities for the lendtech market in the near future.

Moreover, in an effort to strengthen their position in the market, the major companies are adopting methods including new product releases, collaborations, and product improvements, among others. For instance, Paytm announced its collaboration with Fullerton India, a non-banking financial institution, in January 2022. Through this collaboration, the former company hopes to increase digital lending to Indian consumers, micro, small, and medium-sized businesses, and residents of rural and small-town areas.

Transferring private and sensitive financial information over the internet is part of the growing use of digital lending platforms. Concerns over data security across businesses using digital lending have been raised as a result of this information transfer. In order to safeguard consumer data from data breaches, regulatory organisations have also established data protection regulations that digital lending firms must abide by. The suppliers of digital lending solutions in Europe are required to adhere to the General Data Protection Regulation (GDPR) principles, which include requirements for safeguarding client information.

Furthermore, digital lenders across the world are making efforts to secure banking licenses to lower funding and origination costs. For instance, Zopa, a U.K.-based digital lending company, secured a banking license in June 2020. Additionally, in January 2022, SoFi Technologies, an online lender, received approval from U.S. regulators to become a bank holding company.

Key players are also making strong investments in R&D projects to enhance and broaden the capabilities of the solutions they are providing. The businesses are working to incorporate cutting-edge technologies like blockchain and machine intelligence into digital lending platforms. Market leaders are also concentrating on preserving and expanding support for their current solutions while investing on tactical applications that use the newest advancements.

By organization size, the large enterprises segment acquired major lendtech market size in 2021. This is attributed to the fact that larger enterprises commonly have more assets that their smaller counterparts and they can use these assets to obtain a business loan or line of credit. Further, the loan amount is generally high in case of large business lending, and it can be used for various purposes such as upgrading infrastructure and acquiring new business  

By region, the North America dominated the lendtech market share in 2021. This is attributed to the rising demand for lending technology solutions from the lending corporations. In addition, the increasing technological advancements along with the existence of a large number of players are some other main factors that are providing support to the growth of the lendtech market trends in the region.

LendTech firms across the globe were majorly focusing on digitizing their financial assets as well as lending schemes, which was helping them to capture large customer base even in the lockdown. In addition, various governments across the globe had restricted banks and lenders to change their debt reconstruction policy, which has negatively impacted the growth of the lendtech market. However, various lendtech firms were increasingly providing online lending for improving the loss suffered, owing to the pandemic situation and to improve their market share. This, in turn, boosted the growth of lendtech industry during the pandemic.

Key Findings of the Study

• By component, the solution segment accounted for the highest lendtech market share in 2021.
• By type, the consumer lending segment accounted for the highest share in lendtech market in 2021.
• By region, North America generated the highest revenue in 2021.

The key players profiled in the lendtech market analysis are Visa, Inc., American Express, Fiserv, Inc., Finastra, Nelito Systems Pvt. Ltd., Q2 Software, Inc., Newgen Software Technologies Limited, FIS, Roostify, Inc., and Pegasystems Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.