GlobalData’s 'Insight Report: Digitization in Lending' analyzes the effect of digitization, emerging trends and competitive landscape of the lending industry. The report also discusses in detail the drivers of digitization for financial institutions and how they are using it for improving operational efficiency and customer experience.

With significant adoption of digital channels by customers, financial institutions are compelled to provide the convenience of anywhere, anytime banking to customers. Although digitization has transformed the transactional banking process, it has not been fully adopted in lending process.

Many online lending companies and non-bank lenders have emerged to capitalize on the inefficient lending process of banks. The growth of these companies also demonstrates that customers are looking for more convenience, which digitization can provide. The significant rise of non-bank lenders has led banks to invest more in digital technology, and form partnerships with them to remain leading operators in the lending market.

Scope

• An examination of the trends that will shape the global lending industry in the next five years

• A comparative analysis of the various business models in the global lending industry

• An analysis of the key trends and drivers in digitization, and their combined impact on the lending process

• Details of key initiatives adopted by financial institutions in digitizing the lending process

• Case studies of financial institutions which have implemented pioneering technology to improve the lending process

• An exploration of the challenges in implementing digitization in the lending process

• An overview of how financial institutions can utilize digital channels to enhance productivity, efficiency and the customer experience

Key Highlights

• What are the key advantages of digitized loan applications?

• Which factors make the current lending process slow and expensive?

• What are the prime requirements in customer service that need to be addressed as digital banking grows worldwide?

• In which area is the digitization of lending likely to provide the most cost-effective solution?

• What are the main drivers behind the launch of online lending platforms?

• What are the key challenges that have deterred financial institutions from digitizing the lending process?

Reasons to Buy

• Identify threats from new market entrants to protect and maintain market share.

• Investigate emerging global opportunities due to digitization, and target those which enable a gain in competitive advantage.

• Gain insights into key initiatives adopted by financial institutions to digitize the lending process, and align operations accordingly to increase market share.

• Evaluate how organizations will be affected by the changing industry dynamics, and ensure that operations are best placed to protect market share

• Analyze key technology and ensure continuing cost-effective participation in the lending market.

Key Players

HDFC Bank
Google
mBank
Westpac
Wells Fargo
US Bank
First Internet Bank
Association for Information and Image Management
Bank of Queensland
Thomson Reuters
Consumer Financial Protection Bureau
Astoria Bank
Wolters Kluwer Financial Services
Capgemini
American Bankers Association
Lloyds Bank
Bank of America
BAI Banking Strategies
PwC
Zopa
Lending Club
Funding Circle
Faircent
Quicken Loan
PayPal
Amazon
Square
Goldman Sachs
Kueski.com
Fidor Bank
Atom Bank
WeBank
MyBank
Touch Bank
Radius Bank
Bank Leumi
Metro Bank
Royal Bank of Scotland
Santander Bank
BBVA Compass
Tesco Bank
United Overseas Bank
State Bank of India
Barclays Bank
Bank of Industry
Axis Bank
Capital One
eBroker.com.au
Sterling Bank
Citibank
Commercial Bank
Bank Dhofar

Table of Contents

1 Executive Summary

2 What is Driving Digitization in Lending?

2.1 Growing Need for Enhanced Customer Experience

2.2 The Quest for Operational Efficiency

2.3 Impact of Changing Competitive Landscape

2.3.1 Strategic initiatives by non-banks to gain traction

2.3.2 Banks’ answers to the impending challenge

3 Digital Transformation of Lending in Retail Banks

3.1 Front-End Digitization

3.1.1 Digitized loan application process

3.1.2 Loan servicing

3.2 Back-End Digitization

3.2.1 Application processing and verification

3.2.2 Automated underwriting and credit scoring

3.2.3 Loan closure and disbursal

4 Challenges in Digitization of Lending

5 Case Studies

5.1 Enhanced Efficiency with Paperless Loan Processing by US Bank

5.2 First Internet Bank – the Digital Platform of Lending

5.3 Bank Dhofar – Automation of Loan Origination Improved Efficiency

5.4 Zopa – a Pioneer in Peer to Peer Lending

5.5 HDFC Bank – Banking on Digitized Personal Loan Product

6 The Way Forward for Digitized Lending

7 Appendix

7.1 Methodology

7.2 Definitions

7.3 References

7.4 Contact GlobalData

7.5 About GlobalData

7.6 GlobalData’s Services

7.7 Disclaimer

List of Tables

Table 1: Comparative Analysis of Competitors

Table 2: Business Proposition of P2P Lending Companies

Table 3: Business Propositions of Non-Bank Financial Service Providers

Table 4: Initiatives of Digital-Only Banks

Table 5: Banks’ Responses to the Changing Competitive Environment

Table 6: Front-End Digitization Initiatives in Lending

Table 7: Back-End Digitization Initiatives in Lending by Banks

Table 8: Impact on Lending of Changing Regulations

Table 9: Definitions

List of Figures

Figure 1: Drivers of Digitization for Financial Service Providers, 2014

Figure 2: Regional Analysis of Top Three Drivers for Digitization, 2014

Figure 3: Drivers of Digitization Based on Size of Companies, 2014

Figure 4: Increased Productivity Due to Banking Process Automation, 2013

Figure 5: Customer’s Preferred Channels for Banking in the US

Figure 6: Average Transaction Costs of Various Delivery Channels in the US, 2012

Figure 7: Customer Confidence in Transaction through Different Organizations, 2014

Figure 8: Rise of P2P Lending in the US and the UK (US$ Million), 2012–2014

Figure 9: Non-Bank Lending by Country, 2013

Figure 10: Increasing Shares of Non-Banks in FHA Mortgage Lending in the US

Figure 11: Strategies of Non-Bank Lenders

Figure 12: Evolution of Digital Lending in Banks

Figure 13: How Banks are Digitizing their Processes, 2014

Figure 14: Front-End Digitization Initiatives by Financial Service Providers

Figure 15: Increasing Preference for Digital Channels by US Customers, 2014

Figure 16: Back-End Digitization Initiatives by Banks

Figure 17: Preferred Back-End Process Automation by Financial Solution Providers

Figure 18: Benefits of Incorporating Social Media Analytics in Underwriting

Figure 19: Issues in Digitization of Banking Processes, 2014

Figure 20: Regional Analysis of Key Challenges to Digitization, 2014

Figure 21: Fund Allocation for Digitization Across the World by 2016

Figure 22: Share of Digitization in the Overall Investment Budget by 2016

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