S&P Global Market Intelligence publishes second annual U.S. Digital Lending Landscape and U.S. Mobile Banking Landscape whitepapers in continued expansion of fintech coverage

Digital Lending Growth Slows in favor of sustainable client base, while Mobile Banking Strengthens driven by consumer demands

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S&P Global Market Intelligence

Dec 05, 2017, 05:30 ET

NEW YORK, Dec. 5, 2017 /PRNewswire/ -- S&P Global Market Intelligence recently published its second annual set of flagship whitepapers on U.S. Digital Lending and U.S. Mobile Banking, both building on S&P's deep and expanding financial technology (fintech) coverage.

The 2017 U.S. Digital Lending Landscape white paper projected that digital lending growth will slow down over the next several years, contrary to similar industry reports, as lenders look to build sustainable and profitable businesses focused on quality borrowers. The report forecasts that digital lenders will originate $62.84 billion in new loans in 2021, up from $29.31 billion in 2016, representing a compound annual growth rate (CAGR) of 16.5% through 2021. This compares to a CAGR of 129.4% for the five-year period ended Dec. 31, 2016.

The 2017 U.S. Mobile Banking Landscape, based on a survey conducted by S&P Global Market Intelligence of 4,000 respondents and research into more than 70 bank apps, found that banks across the U.S. are adopting a mobile-first strategy for their digital offerings. The survey also found that meeting customers' increasingly sophisticated expectations for mobile apps often means that banks have to invest in services such as P2P payments that do not directly add revenue.

"The growth of fintech has transformed the way consumers and businesses gain access to financial services, which drives innovation across the board," said Eric Turner, Fintech Analyst at S&P Global Market Intelligence. "Fintech has grown to a point where both Congress and regulators have started to take a closer look at how to create regulation that protects consumers without stifling innovation. Over the past year, we have researched and analyzed key drivers within the fintech space such as mobile banking, digital lending, blockchain, cryptocurrency and more. A common theme across some of these segments is lack of consistent regulation, but also continued desire to innovate on the part of small startups and large institutions alike. Going forward, we will see widespread innovation thanks to partnerships between incumbent institutions and startups."

Additional takeaways from 2017 U.S. Digital Lending Landscape white paper:

15 of the most prominent U.S. digital lenders grew originations at a compound annual growth rate of 129.4% during the five-year period ended Dec. 31, 2016, but it is projected that growth will slow for the industry as lenders focus on building sustainable businesses with higher quality borrowers.
Personal-focused lending is projected to grow at a CAGR of 12.4% to $24.31 billion by 2021. The small and medium enterprise and student-focused lending segments are projected to grow faster, with respective CAGRs of 21.5% and 18.4%.

Additional takeaways from 2017 U.S. Mobile Banking Landscape white paper include:

U.S. consumers value their mobile bank apps more than ever, and satisfied mobile banking users could prove to be stickier deposit customers even as interest rates continue to rise and other banks tempt them with promotional offerings.
A robust mobile channel along with a strong local brand could prove to be a powerful combination for smaller institutions seeking to compete with big banks and fintech challengers, especially as tech-savvy millennial customers build wealth and act on the "shop local" cultural trend.

The two whitepapers add to S&P Global Market Intelligence's suite of fintech research and analysis, which has expanded since formally launching in late 2016. The scope of research has cultivated the launch of S&P Global's first fintech conference titled Fintech Intel: Technology For Tomorrow's Financial Institutions. The day-long conference will be held on December 13 in New York City and is open to the press.

Additional fintech research published through 2017 include:

To learn more about S&P Global Market Intelligence's fintech research, please click here.

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SOURCE S&P Global Market Intelligence