How has the P2P Lending Segment Grown?
The P2P Lending model or the peer to peer lending model has been gaining high popularity in the US especially amongst the borrowers. This is mainly because of its low interest rates, simplified application process, and faster lending decisions. This model is rapidly intensifying to new product categories including mortgages student loans, small business loans and others. P2P Lending platforms seemed to have found a forte by offering it s customers i.e. both borrowers and investors better customer experience and faster. Big data and other such technologies have been helping the technology driven marketplace investors. The investors can look onto the borrower profile and select to which borrower he wants to extend the loan to. Although the market is still in its infant stage, the platform issued around USD ~million in 2015 increasing at a CAGR of ~% from 2010 to 2015. Major players in the market include Lending Club, SoFi, Prosper and others with Lending club leading the market in terms of the loan disbursed followed by SoFi and Prosper as of 2015.
The P2P Lending appeals to underserved millennials to provide them with opportunities for accessing the credit from these sources since there are times when they are not able to do it from the banks. Currently the target population is around 65 million and still growing which provides high growth opportunity for the market in the future. It is expected that the market will move towards high concentration since rising interest rates will put pressure on the refinancing activities and hence smaller player would face troubles attracting borrowers. It is also expected that the wide range of investors would eventually be replaced by higher proportion of large supplies such as institutional investors and banks since they have been drawn to the marketplace by strong unlevered yields and expected credit performance across a large portfolio of loans. The market is expected to grow and reach the levels of USD ~Billion by 2020 in terms of loan disbursed.
What is the Future Outlook of Robo Advisor Market?
During the past few years from 2010 to 2015, the technologies such as the big data, machine learning and others have been attracting considerable investment and attentions. These firms leverage algorithms and client information to develop preset portfolio distribution and suggestions for investments particular to the individual clients. The advisors can be accessed via rich digital user interface and at very low fees. Albeit the high growth of the robo advisors in the investment market, they still are at a very nascent stage with only around ~% of the total invested assets under management. Since the robo advisors use algorithm driven automated investment techniques, they incur less cost and hence are priced lower than the traditional investment advisors. The traditional advisors charge around ~% of the management fee while the robo advisors charge only one third or even a quarter of the fee charged by a traditional investment advisor.
The robo advisors offer higher transparency as compared to the traditional investors and hence attract more investments. The market has grown from USD ~Billion in 2010 to around USD ~Billion in 2015 Major players in the market on the basis of asset under management include Vanguard with a share of ~% followed by Charles Schwab Intelligence Portfolio with ~% share in total assets under management.
Most of the underserved clientele of the financial advisory space have been the people whom either manage their own assets or do not prefer to go to the advisors due to the high fees. Robo advisors have provided advanced advisory services which have made the automated portfolio management accessible, affordable, and amazingly convenient. Moreover, robo advisors offer customized advices according to client’s need and wants anytime they want. They use advance algorithm driven investment software and analytics technique which makes their services more reliable (since there won’t be difference of interests) and cheaper.
How has the Business Lending Segment Performed?
Small and medium sized enterprises (SMEs) are considered as one of the major drivers of economies and a reckoning force in job creation. They accounted for more than half of the world’s GDP and employ almost two-thirds of the global work force. Small businesses always have a hard time to secure financing as compared to larger established players in any industry. The challenges have grown even more in the recent years amidst the backdrop of global financial crisis of 2007-008 and higher regulations and capital costs for loans.
In the US, bank debt accounted for more than USD ~billion of SME funding, followed by credit card debt of about USD ~billion as of 2015. Small businesses with revenues of more than USD 500,000 per year account for about ~% of all credit revenues of banks. The US FinTech business lending market has grown at an unprecedented pace in the last five years from USD ~million in 2010 to USD ~million in 2015 in terms of loan disbursed. This represented growth at a CAGR of ~% between 2010 and 2015.
The major players in the business lending market include Funding Circle, OnDeck, Kabbage, CAN Capital and others with OnDeck and CAN capital leading the market in terms of loan disbursed. The business lending market has grown at an impressive CAGR of ~% from 2010 to 2015 and is expected to grow further at remarkable rate. In the short term scenario, the market is expected to show a lower rate of growth since past two years have not only been the years of innovation but also startups which mean high growth and newer business models. It is expected that the market will show the correction phase along with the consolidation in the market. However this would act as a much needed pain and the industry will still rise fueled by the increasing number of small businesses, startups and their mounting capital needs, innovation in technologies such as for risk minimization and process streamlining will help the market stay on a growth trajectory. In the longer run, the overall scenario remains positive. The market is expected to reach USD ~Billion by 2020.
Key Factors Considered in the Report
Comprehensive analysis of the US FinTech market and its segments
Listed major players and their offerings
Identified major developments in last few years and assessed the future growth of the industry
Government initiatives taken to stimulate the growth of the market.
US Financial Technology Market
US P2P Lending Market
US Digital Payments Market
US Mobile Wallet Market
Market Size Robo Advisors Market
Robo Advisors AUM US
Global Fintech Market
United States Fintech
Market Forecast Equity Crowd Funding
Pulse of Fintech
Fintech Companies United States
Fintech Companies Growth
Challenges Fintech Market
Financial Services FinTech Industry
Top Financial Technology Market
Mobile Payments Market
Money Transfers Market United States
Digital Commerce Market
Marketplace Lending Industry
Companies Cited in the Report
List of Major Companies Companies Covered in the Report
Fundable Major Players
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Ankur Gupta, Head Marketing & Communications