Digital lenders ‘must keep investing to grow’

 

Lex Sokolin, Global Director Fintech Strategy at Autonomous NEXT

Research from digital ID specialist Mitek has concluded that there is a huge opportunity for digital lenders to grow, if they continue to invest in digitisation.
The findings have been published as a whitepaper, authored by fintech research practice Autonomous NEXT. Titled European Digital Lenders, it looks into the state of the digital lending market in Europe.
The research concluded that while European digital lenders are growing quickly, digital share is still low relative to the addressable market opportunity. Efficient onboarding and servicing using digitised workflows, such as digital identity verification technology, are being used by both new entrants and incumbents to boost competitiveness – ensuring regulatory compliance, improving speed, and reducing the cost of customer onboarding.
“The digital lending sector has grown dramatically in the last few years and is a great example of how technology can democratise access to financial services,” said Lex Sokolin, Global Director Fintech Strategy at Autonomous NEXT. “But banks still dominate lending, and digital-first lenders are struggling to provide loans on better terms than their traditional rivals given high cost of capital.”

He said the report found that venture capital investment is still flowing into the space and is set to hit $800m in Europe: “The UK alone has originations of over $6bn, and Europe-wide, the addressable market is $150bn – with current digital lender revenues estimated at $400m,” he added. “Moreover, the market shows impressive originations growth, with a 60% CAGR since 2013.”

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