PAYMENT SOLUTIONS
Online lending revolution drivers
Sankar Krishnan , Executive Vice President at Capgemini , Industry Head , Banking & Capital Markets , says ; access to loans results in a culture of debt and borrowing .
Sankar Krishnan , Executive Vice President at
Capgemini , Industry Head , Banking & Capital Markets , agrees that the majority of online borrowers are in the younger generation but says easy access to credit is essential for innovation and growth . “ Millennials and digitallysavvy consumers are increasingly borrowing from smart fintechs . The Digital Lending Market is expected to grow by approximately 11.9 % CAGR between 2020-2025 ,” he says , adding that lessons have been learned from previous market crashes .
• COVID-19 : COVID-19 has been the greatest enabler of digital spending , with 80 % of all transactions now digital , compared to the pre-covid era .
• Price : Fintechs are able to price loans much cheaper compared to traditional banks as they don ’ t have the “ legacy effect of costs ”.
• Innovative Products : Online lenders have become innovative , with significantly reduced cycle times for a loan product at attractive repayment terms . This innovation includes the very popular BNPL deals announced by several fintechs , which have taken a dominant share of the market .
• Digital Savviness : The overall growth of millennials as the largest segment of the economy , who prefer to be served digitally , has resulted in fintechs appealing to their needs on a personalised and customised basis with better UI / UX and better customer satisfaction .
• Growth of Data and Cloud : Thanks largely to AWS and Microsoft and the growth of Open finance , smart online lenders have found it easy to launch their better business models with friendly PEs supporting this industry like no time before in global history .
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