2030: A Sneak Peek into the Future of Indian Digital Lending
Digital lending has become one of the fastest-growing fintech segments and is expected to reach a value of approximately 350 billion USD in 2023 in India.
In recent times, we are witnessing rapid deployment of cutting-edge technologies by financial institutions.
The integration of such advanced technologies has made it feasible for banks to provide instant loans, credit approvals, streamlined processes and phenomenal lending experience. Fintech startups, like ours, brought forth a sea of opportunities in the digital lending space. Traditionally, customers faced a myriad of challenges to obtain a loan: Lengthy paperwork, a time-consuming approval process and a lack of credit. However, the present-day scenario is different. Banking and financial services are integrated with technologies that process loan applications within minutes.
One can say, a revolution has taken place!
In the business world, a forward-looking outlook is one of the imperative factors to success. Being proactive is truly the key. Businesses need to watch where the puck is heading - to stay ahead in the game.
As we see the year 2023 unfold with new advancements, we can’t help but wonder - what can be some of the emerging trends of Digital Lending that come into play by the year 2030. Let’s dive in to get a peek through a futuristic lens.
1.Artificial Intelligence, Everywhere: We beam with excitement as we bring forth this fact to you - according to the World Bank, innovations in fintech have enabled 1.2 billion unbanked people to access financial services. We often wonder how far we have got, and the rapidity is truly astonishing. In the coming times, AI and ML will play a crucial role in assessing borrowers' creditworthiness and risk, automating underwriting processes, and reducing manual errors.
2030 will witness an “AI everywhere” era which will revolutionize the lending industry, making it more accessible, efficient, and secure than ever before.
2. Curated, More Personalized Loans: By 2030, we can expect the lenders to gather more data on borrowers, which could help them offer more personalized loan products and terms.
Digital Lending by 2030 will be governed by our Financial DNA - that encompasses a rich tapestry of data, including our income streams, spending habits, credit history, savings patterns, et al. Tailor-made Loan offerings will match unique financial profiles, in the coming years.
Lenders may leverage real-time responses from prospective customers to curate data and offer customers personalized solutions. Personalized lending will become the new standard in the lending industry, providing a seamless and exciting experience for borrowers.
3. Empowering Financial Access: In the coming years, we could see more partnerships between digital lenders and other financial marketplaces. This could allow borrowers to access multiple financial services, including loans, insurance, investments, and savings, all in one platform. Integration, expansion, partnerships & collaborations will lead the way in future. Digital lenders could expand their reach to emerging markets where traditional financial services are less accessible.
Coming years will witness millions of people gaining access to affordable credit and financial inclusion.
4. Digital Currencies will take over : If you aren’t familiar with this term, allow us to explain. Central bank digital currencies are the digital form of a government-issued currency that isn't pegged to a physical commodity
As more countries explore the possibility of launching their own digital currencies, we could see digital lending platforms adopting these currencies.
This could enable lenders to offer loans in CBDCs, reducing transaction costs and increasing transparency.
5. Alternative Lending (Peer-to-Peer & Co-Lending): Peer-to-peer lending allows investors and borrowers to connect directly through an online platform operated by a third party. According to Statista, digital P2P lending is expected to reach $1 Trillion by 2025. It’s time to join the movement toward more cost-effective and convenient financing options for both start-ups and existing businesses.
Co-lending is also another alternative that is set to gain popularity in coming years. This lending model brings together banks and NBFCs to offer credit to customers.
In the last few years, we have witnessed that Fintech has opened avenues for banking and financial institutions to innovate. This will allow them to stand ahead of their competition as technology’s prowess to anticipate future trends and client expectations can create extraordinary experiences.
Final thoughts
The digital lending space has been reshaped with the emergence of key growth drivers – data analytics, digital payment gateways and automated loan disbursals. This will fuel economic inclusion and expansion of financial services across different consumer segments. We believe that the coming years will showcase some of the pathbreaking advancements in digital banking.
