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With an uptick in consumer lending, fintech companies see a chance to grow by filling gaps for underserved borrowers, online lenders and industry analysts say. Rather than relying on traditional credit scores, many fintech lenders are feeding a wider range of data into platforms powered by artificial intelligence to present a broader picture of applicants who might otherwise be turned away by banks.
Jerry Silva, a research vice president at International Data Corp.’s financial insights unit, said fintech lenders—by their very nature—leverage digital capabilities that traditional lending institutions “are still moving to.” He said smaller online lenders are benefiting from a head start in the use of AI and machine-learning models, digital document management and customer services designed around mobile devices—though many banks are catching up, he added. The global fintech lending market is expected to grow at a compound annual rate of 27.4% over the next eight years, reaching $4.9 trillion by 2030, according to research firm Allied Market Research.
