As per a recent industry report put forward by Global Market Insights, Inc. Digital Lending Platform Market is forecast to register its name in the billion-dollar fraternity down the line of seven years, by exceeding a revenue of USD 59 billion by 2032 with a projected CAGR of 20.5% over 2023-2032.
Digital lending and digital mortgage have emerged as prominent concepts in the field of online banking. Over the past few years, the financial sector has undergone rapid digitization with the emergence of novel banking needs.
Digital mortgage is rapidly replacing traditional loan processing systems as it provides a holistic experience to lenders as well as borrowers. Lenders are increasingly implementing modern digital mortgage strategies across targeted marketing, auditing, loan closing, and lead generation activities. Owing to the ease and level of sophistication, a combination of hyper-automated tools, big data analytics, and real-time digital mortgage applications are gaining demand among businesses.
In November 2022, Navi Technologies, an Indian financial service provider, unveiled its cloud-based real-time co-lending platform, called Navi Lending Cloud (NLC). The platform aims to support direct assignment collaboration and digital management co-lending with banks and NBFCs.
The digital lending platform market is classified into component, solutions, service, deployment, business model, product, application, and region.
Based on solution, Point of Sale (POS) systems held more than a 10% share of the digital lending platform industry in 2022. POS systems enable lenders to source and validate documents and e-signatures of credit customers and facilitate conditional decisions instantly. Advancements in mortgage POS systems allow lenders to process loans more efficiently and manage large volumes of data regarding lending rates, borrower behavior, and risks.
In terms of service, the digital lending platform market share from design & implementation is anticipated to record over 21.5% CAGR from 2023-2032. Design and implementation service providers are expected to address the growing need for robust and validated digital asset management processes. Technological advancements and rapid integration of artificial intelligence (AI) will enable the automation of services pertaining to the design & implementation of digital lending platforms.
By deployment, the market landscape is fragmented into cloud and on-premise deployment. The cloud segment is projected to exhibit over 20% CAGR through 2032. Due to low maintenance features and cost-effectiveness, cloud-based digital lending is picking up pace. Increasing demand for fast processing, documentation storage, and reduced cost and time consumption associated with loan processing will proliferate cloud-based digital lending platforms.
With regards to the business model, the industry is segregated into staff-driven, and customer driven. The staff-driven segment is expected to witness promising growth between 2023-2032. Digital lending platforms cater to staff needs including loan disbursement, customer acquisition, and repayment. Growing end-user requirements to reduce the risk of fraud and improve loan processing efficiencies will accelerate the segment growth.
Based on product, mortgage loan accounted for more than 15% share of the digital lending platform in 2022. Large mortgage banks are increasingly implementing digital strategies and technologies to boost the traction of credit seekers for mortgage loan. Digital mortgage solutions reduce costs per loan, allowing considerable savings. The influx of smart technologies will advance the capabilities of mortgage lifecycles on digital lending platforms.
From a regional perspective, North America digital lending platform market share was more than 38% in 2022. Rapid digitization of banking services in the region has resulted in the acquisition of open-banking platforms. A large number of fintech giants in the U.S. and Canada are ramping up efforts to digitize lending processes and safeguard financial services. For instance, in September 2022, J.P. Morgan announced plans to acquire Renovite Technologies, Inc., a cloud-native payments technology firm to modernize payment infrastructure.
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