Analysis by Type {Natural Language Processing (NLP), Deep Learning (DL), Machine Learning (ML), and Others}; by Functionality (Self-Aware, Reactive Machines, Limited Memory, Theory of Mind, and Others); by AI Type (Analytic, Text, Visual, Interactive, and Others); and by End-User (Bank, Educational Institution, Government Organization, and Others) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2033
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The global AI platform lending market is estimated to garner a revenue of USD 90 billion by the end of 2033 by growing at a CAGR of ~25% over the forecast period, i.e., 2023 – 2033. Further, the market generated a revenue of USD 70 billion in the year 2022. The growth of the market can primarily be attributed to the exponential increase in digital transformation spending across the globe. For instance, in 2022, worldwide spending on digital transformation (DX) was valued at around USD 2 trillion and is further expected to drop to approximately USD 3 trillion by 2025. An increasing number of smartphone and computer users owing to rising disposable income and internet penetration across the world. Smartphones make everything so easy and offer many facilities at the fingertips. To improve better customers, reach many lending companies launched smartphone apps such as KreditBee, mPokket, and others. On the contrary apps such as Snapmint work similarly to credit cards, providing EMI options, and rewards with the simple verification of certain documents through smartphones. Thus, digitalization has changed loan processing very simple and fast for customers.
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Global AI platform lending market trends such as a significant escalation in IT spending and a higher number of populations borrowing loans from banks, are projected to influence the growth of the market positively over the forecast period. It is estimated that over 20 million people in America have personal loans in 2022, up from the base of 19 million people in 2020. People take out loans to achieve their short or long-term goals. Even though many are against borrowing money, there are situations where financial help is necessary. Some of these situations include a business, health needs, education, or a dream house. Therefore, people borrow money from friends, relatives, or banks. More people borrow money from banks as they lend large amounts of funds in a short span with less interest cost to meet their needs, the EMI facility provided helps everyone to pay the loan in several small payments rather than a single full payment. Moreover, the spike in the number of financial institutions is further expected to hike the growth of the market over the forecast period. For instance, in 2021, around 125 financial institutions were estimated to be functioning worldwide. Hence, all these factors are expected to hike the growth of the market over the forecast period.
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Base Year |
2022 |
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Forecast Year |
2023-2033 |
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CAGR |
~25% |
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Base Year Market Size (2022) |
~ USD 70 Billion |
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Forecast Year Market Size (2033) |
~ USD 90 Billion |
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Regional Scope |
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Growth Drivers
There’s a remarkable number of banks functioning in every nation, and since digitalization is at its peak, they all are adopting AI-based lending platforms. It helps the bank or any other lending institution understand the latest financial trends, demand, and existing data of customers and creates efficient and credible results for decision-making. Therefore, such a higher adoption is expected to hike the growth of the market over the forecast period.
It is estimated that the United States had about 11,000 registered banks and credit unions in 2018.
As of 2021, approximately 1.5 billion transactions were estimated to be completed via credit card in India.
Rising Advancement in Cloud Computing and Increasing Adoption to Store Big Data and Operate Remote Servers
Cloud computing helps many financial institutions by providing computing services such as security, operating servers, storing data, remote management, communication, and networking. There are about 3.5 billion people who use the cloud across the globe which accounts for about 50% of the world’s population and nearly 70% of Americans for storing data online or using web-based software applications as of 2022 updates.
Higher Prevalence of Digitalization Worldwide with More Number of People Using Internet- The huge adoption and integration of digital technology into all sectors and organizations has proliferated digital transformation throughout the world. For instance, in 2022, approximately 90% of businesses were projected to be involved in some sort of digital initiative, while 85% of business leaders admitted that digitalization is a priority across the globe.
Increasing Banking Activities on Smartphones with Net Banking and Mobile Banking Applications
It was noticed that about 3 billion people were using smartphones in 2019 worldwide.
Challenges
Digitalization of banks is rising with the use of all services on a smartphone, computer, or any internet-connected device. The increasing digitalization increases the cyber threat, as these services can be easily hacked to get all the information from the web. The online web will provide all the information required by cybercriminals. There is a high chance of cyber threats in many cases, which hinders market growth during the forecast period.
Higher Credibility for Traditional Lending Methods
The global AI platform lending market is segmented and analyzed for demand and supply by end-user into bank, educational institution, government organization, and others, out of which, the bank segment is anticipated to witness major growth over the forecast period. The growth of the segment can be accounted to the rising number of banks and their users. In 2018, the number of banks worldwide was anticipated to be around 45,000. The automation and digitization of banks increase the preference of people for banks for their financial support. More government and private banks are increasing their branches in rural and urban areas to increase their turnover. The banks initiated many policies for farmers with less interest in improving customers and loan transactions in public and private banks. The regulations and documentation process required for loan processing are increasing the adoption of AI tools in the banking sector, which in turn drives the growth of the market segment.
The global AI platform lending market is also segmented and analyzed for demand and supply by type into natural language processing (NLP), deep learning (Dl), machine learning (ML), and others. Amongst these three segments, the machine learning segment is expected to garner a significant share. ML and AI-based lending help to save time and energy by using raw data very efficiently. The ML application in finance helps to automate many tasks, including calculation, data monitoring, claim to process, and paper works. This reduces labor costs and improves customer service. Customer behavior can be easily analyzed and their preferences can be generated by ML and AL in IoT devices. Algorithm trading, detection of fraud activities, security portfolio management, high-frequency trading, chatbot creation, risk management, trade settlements, customer acquisition, onboarding automation, and asset valuation are done through ML in many financial institutions.
Our in-depth analysis of the global AI platform lending market includes the following segments:
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By Type |
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By Functionality |
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By AI Type
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By End-User
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The North American AI platform lending market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2033. The growth of the market can be attributed majorly to the spiking digital banking activities and the rising number of credit card holders. For instance, around 1.05 billion credit cards were observed to be utilized in the United States alone in 2021, and the number is further projected to grow Y-O-Y. Credit cards are used by most people as they are convenient, and secure, with no interest for a certain period of time, and even give rewards and credits. Credit cards are safer to carry, help to keep track the spending, and easy way to increase credit scores. Also, a credit card gives financial stability to a person as the loan can be paid after a tenure of one month which allows time to plan a budget. Large purchases can be made through credit cards with less or no interest and an EMI option that can be paid over the long term. The grace period of credit cards aids to manage last-minute purchases or emergency expenses that are not in the budget and cannot be delayed. Also, it provides many discounts and cashback on credit card purchases. Additionally, escalating number of bank users in the region is further expected to push the growth of the market over the forecast period.
Tavant is to unveil its two products at the MBA Annual that are AI-powered and for Touchless Lending. Touchless Lending facilitates an end-to-end mortgage manufacturing pipeline along with mortgage processing and automated underwriting.
Sigma Infosolutions to collaborate with Colve.AI to enhance its business intelligence solutions. It is estimated to help the company to enlarge the eCommerce economy and provide AI-powered recommendation solutions for the growth of sales
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Increasing number of banks across the globe is estimated to majorly boost market growth.
Ans: The market is anticipated to attain a CAGR of ~25% over the forecast period, i.e., 2023 – 2033.
Ans: The bank segment is anticipated to garner the largest market size by the end of 2033 and display significant growth opportunities.
Ans: The market in North America region is projected to hold the largest market share by the end of 2033 and provide more business opportunities in the future.
Ans: The major players in the market are Ellie Mae, Inc., Tavant, Sigma Infosolutions, Roostify, Inc., Fiserv, Inc., Pegasystems Inc., Newgen Software Technology Limited, Nucleus Software Exports Limited, and others.
Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue-generating capacity as well as the new products being launched into the market by the company.
Ans: The market is segmented by type, functionality, AI type, end-user, and by region.
Ans: The bank segment is anticipated to garner the largest market size by the end of 2033 and display significant growth opportunities.
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