Digital Lending Market Set for a Huge Boost
Arsh Singh Parmar • November 13, 2020
Lending as a business started from helping out a fellow friend or a relative which led to a business of the first moneylenders who eventually got organized and formed the banking system as we recognize it today. The lending industry has always developed and grown to cater to the needs and demands of its customers like the development of need-based loans like personal loans, home loans, car loans, etc. The further evolution of this concept seems to point to the growing trend of digital lending as the future of the lending industry.
A variety of reports forecast the CAGR for the industry globally from 2020 – 2026 to be roughly 20%. Led by the high penetration of smartphones and tablets across the country digitization could further foster financial inclusion as organizations and governments have been trying to achieve for years. It could also help bring more and more of the unorganized sector of the market into the organized sector helping the government regulate the markets currently beyond its scrutiny.
With digital processes like the video KYC already being adopted, upcoming digital innovations are set to further promote the trend. The sector has already made a strong platform in India with the government openly declaring its patronage of increased digitization with its digital literacy program Digital India.
The demonetization of currency in 2016 jumpstarted digitalization in a big way in India with a number of payment applications being launched soon after. The country since then seems to have accepted the changing times all industries are gradually being headed towards it with exciting innovations attracting the non-believers. A niche number of lending businesses had actually begun accepting digital processes as essential for their growth.
With the covid epidemic affecting traditional businesses in a big way, the trend for e-processes including digitized lending is set to undergo a sudden surge resulting in major disruption and change in the industry as we know it. As you read these many major traditional companies are looking to add technological solutions to their arsenal. In the wake of the challenges posed by the pandemic, they are wary of the growing threat of companies such as HomeFirst whose core ethos based on digital processes and technological investments that help them provide more convenient and personalized solutions.
A well-defined customer segment of the salaried class using their inherent strengths to provide convenient and personalized solutions has worked well for HomeFirst as they are steadily climbing up the ranks despite multiple disruptive events. Quickly becoming synonymous with convenient and affordable home loan solutions, they stand as an example of the evolving digital lending market.
As the traditional ways of the loan market evolve to give rise to the new, exciting processes of the future, the road ahead appears very hopeful. With the potential of technologies like Artificial Intelligence, Machine Learning, Cloud Banking, and Blockchain waiting to be fully realized, there are surely some exciting times ahead in the field of Digital Lending.
