- Lending is an estimated $15 trillion industry in the United States — and the banking industry’s share in this market is estimated to be around $6.6 trillion (~ 44% of the overall market).
- Within the FinTech sector, lending is the largest segment in terms of funding from investors, and market altered the lending landscape.
- Marketplace lenders — online platforms that match borrowers with lenders — will likely see some consolidation in ’17 and continue to converge with banks through partnerships, white label contracting and yes, even mergers.
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Fintech lending has grown from $12 billion in 2014 to $23.2 billion in 2015 and is expected to reach $36.7 billion in 2016, a year-over-year growth of 93 percent and 58 percent in 2015 and 2016. This market, according to Morgan Stanley Research, is expected to grow further and reach $122 billion by 2020.
As noted throughout our Acquire or Be Acquired conference, partnerships between a bank and a tech company can take on many forms — largely based on an institution’s available capital, risk appetite and lending goals. With FinTech solutions gaining momentum, many advisors here have encouraged banks to look at viable alternatives to meet consumer demands, maintain and expand their lending revenue and give formidable competition to those looking to take that marketshare.
With this in mind, I invite you to take a look at a new Fintech Intelligence Report on Marketplace Lending (to download the PDF version, click: fintech-intelligence-report-lending). The research paper, developed by Bank Director’s FinXTech platform and MEDICI, a subscription-based offering from LetsTalkPayments.com, explores current market dynamics along with technology & partnership models. As noted in this report, the gains of new FinTech companies were widely thought to be at the expense of banks; however, many banks recognized the potential value from collaboration and built relationships with FinTechs.
While our Acquire or Be Acquired conference wrapped up yesterday, you can take a look back on the conversations + presentations that found their way onto Twitter via @AlDominick, the host company, @BankDirector and our @Fin_X_Tech platform, and search #AOBA17 to see what was shared with (and by) our attendees.