Trends forecasted for the digital lending space in India in 2024 Digital lending has been a catalyst in revolutionizing the financial landscape, reshaping perceptions, and forging a path towards a future that is more inclusive and efficient
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In the not-sodistant past, the fintech landscape was largely an enigma to many in the financial industry. Only a few understood the disruptive potential that technology held for reshaping traditional financial models, and here we are today. The fintech sector has undergone a massive shift gaining widespread recognition for its game-changing innovations - be it payments, digital lending, wealth tech, inclusive finance, CBDCs, Web 3.0 and more. Digital lending has been a catalyst in revolutionizing the financial landscape, reshaping perceptions, and forging a path towards a future that is more inclusive and efficient. It has shattered traditional notions of lending, making financial services more accessible and tailored to individual needs. This transformation in the lending sphere has altered the perception of borrowing, from a cumbersome process to a seamless and personalized experience. And now, it is projected to reach an astounding USD 515 billion by 2030, as per a latest report.
But what next, you ask? Well, here are five trends that will take the digital lending industry by storm in 2024.
CONTINUAL RISE OF CO-LENDING: Today, many traditional financial institutions are collaborating with fintech companies. In fact, at Lendingkart, a significant portion of lending is done in partnership with some of the most prestigious financial institutions. This synergy offers diverse funding sources and enhanced credit access, reshaping the lending landscape by providing borrowers with more tailored and competitive loan products.
OPEN BANKING'S IMPACT: The advent of open banking has catalyzed the sharing of financial data securely between different financial institutions. In 2024, this trend is expected to foster greater collaboration between banks, fintech's, and third-party service providers. Consumers will have more control over their financial data, leading to enhanced product offerings and streamlined processes across various financial services.
AI-POWERED PERSONALIZATION: Artificial intelligence continues to be a game-changer, facilitating hyper-personalization in lending. Advanced algorithms analyze vast datasets to tailor loan products, interest rates, and repayment schedules to individual borrowers. This personalized approach not only enhances customer satisfaction but also optimizes loan approval rates and minimizes risks through more precise risk assessments.
BANKING-AS-A-SERVICE (BAAS) AND EMBEDDED FINANCE: Banking-asa- Service is revolutionizing financial services, allowing non-banking entities to provide banking products and services via APIs. Embedded finance, an offshoot of this trend, integrates financial services seamlessly into non-financial platforms like e-commerce, travel, or lifestyle apps. In 2024, expect an upsurge in collaborations between fintech firms and various industries, offering consumers the convenience of accessing financial services within the platforms they use daily.
HYPER AUTOMATION. AUTOMATION: Powered by AI and machine learning, it is set to revolutionize the lending process. Hyper automation involves the integration of various technologies like robotic process automation (RPA) and AI-driven decision-making systems to automate end-to-end lending workflows. This trend will significantly reduce manual intervention, streamline operations, and expedite loan processing, resulting in quicker disbursals and improved customer experiences.
The convergence of these trends in India's digital lending landscape paints a picture of a dynamic and rapidly evolving sector. These trends signify not just technological advancements but also a fundamental shift in how financial services are accessed, delivered, and experienced in the country.
