The Global Digital Lending Platform Market will exceed $58.6 billion by 2030 (+90% in 8 years)

The integration of advanced information technologies into financial services has revolutionized many aspects of transactions, allowing for greater efficiency, accessibility, and personalization of transactions. In fact, McKinsey says that revenues in the fintech sector are expected to grow almost three times faster than those in the traditional banking sector, in the period between 2022 and 2028, forecasting annual revenue growth of 15% for fintechs over the next 5 years, compared to 6% for traditional banks. It is no coincidence, as shown by a very recent research conducted by  the World Economic Forum, that fintech has recorded a significant increase in customers globally in all its vertical sectors, with an average growth rate of more than 50% between 2020 and 2022.

A significant increase that testifies to the growing adoption of fintech solutions by consumers and businesses. In particular, in Italy there has been a rapid expansion of financial services dedicated to SMEs, such as Insurtech or Digital Payments, which still have enormous growth potential in the Italian market. Among these, Digital Lending, i.e. the provision of loans through digital platforms and advanced algorithms, which simplifies and accelerates the process of applying, evaluating and granting loans, has been experiencing significant growth in recent years. Suffice it to say that in 2022 alone, more than 28,000 Italian small and medium-sized enterprises were able to access financing through fintech, with over €4.5 billion disbursed through digital platforms, as ItaliaFintech reports.

A trend that more generally reflects the expansion of  the global Digital Lending Platform market, whose value, estimated at $30.8 billion in 2022, is expected to reach $58.6 billion by 2030, with a compound annual growth rate (CAGR) of 8.4% and an increase of about 90% in 8 years,  as highlighted by a very recent research by Research and Markets. "Digital Lending is redefining the current financial landscape, revolutionizing on the one hand the way we access credit and on the other hand the way we provide loans. In fact, this approach makes it possible to eliminate many of the complexities and delays associated with traditional lending processes, greatly improving the user experience and at the same time reducing operational costs for lending companies," explained Bruno Natoli, CEO & Co-Founder of Mia-FinTech..

Digital Lending is more generally part of digital banking services, a pillar of digital transformation in the financial sector, which has undergone a great acceleration, especially following the pandemic: customers, unable to go to the branch, have been forced to familiarize themselves with banking mobile apps. After the reopening of banks, many have opted to continue using mobile banking apps, appreciating their great benefits. By the end of this year, the number of online banking users is expected to exceed 3.6 billion. As Statista reports, the penetration of online banking, in the European Union alone, has increased steadily since 2010, reaching 66% in 2022.

If we talk more specifically about loans, as reported  by Ernst & Young in a recent survey, 63% of consumers prefer the online mortgage application over the  physical process and 58% said that the possibility of making a digital loan request  affects the choice of financial institution. In fact, the comparison between  traditional and digital loans reveals significant differences in the different processes, from application to verification: "While traditional loans involve paper-based procedures and in-person meetings, digital loans are entirely managed online, allowing applicants to save time and effort, related to office opening hours, for example. If I apply for a loan online, I can do it anywhere and at any time – continues NatoliDigital lending platforms also offer faster and more accessible approval, with automated processes and immediate decisions: this digital transformation not only simplifies the process of obtaining a loan, improving the overall customer experience, but also allows the financial institution to reduce costs regarding, for example, customer support, allowing you to have access to all the information."

But how is the lending process structured on digital platforms?
"When we talk about digital loans, we are talking about 'Smart Lending', understood as the process of granting digital financing, based on reliable and more accurate data, where each component of the loan flow is autonomous, so that the final flow is modular and easily customizable," continues Natoli. Basically, we can identify 4 macro-phases that characterize the Smart Lending process:

  1. Quotation and simulation: by digitizing the product, effective solutions can be made available on the platform in terms of quoting and simulating a loan.
  2. Digital Onboarding: when a potential customer is interested in receiving a loan, they must be identified and "onboarded", i.e. integrated into the digital platform. This process therefore enables the identification and certification of identity. Mia-FinTech, for example, has developed a dedicated component, the Identification Manager, an end-to-end solution that speeds up the entire document acquisition and validation process, while allowing you to create customized identification processes and connect them to different certified Digital Identity providers.
  3. Credit Scoring: in this phase, the reliability and creditworthiness of the potential customer is assessed, which then determines the financing rate. It is therefore a process based on automated systems that use statistical methods or models that provide a synthetic score or judgment, thus allowing the risk or reliability of applicants to be assessed quickly and effectively. Here, too, Mia-FinTech has created the Scoring Manager application, which allows you to customize the credit risk assessment process, allowing automatic decisions based on accurate and up-to-date data from different sources. This helps businesses reduce errors and inefficiencies in decision-making processes, improving the overall effectiveness of their approach to credit. Additionally, it offers monitoring and customization tools that allow businesses to tailor the process to their specific needs, providing greater flexibility and control.
  4. Signing of documents: the loan request is transmitted to the core-banking systems, for which the physical operator then takes over, whose intervention remains essential.





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