Perspective: Alternative Lending — Technology Principles for a Growing Market

Perspective: Alternative Lending — Technology Principles for a Growing Market

This IDC Financial Insights Perspective looks at the global market for alternative or digital lending market. Although it is only four years old in most parts of the world, it developed in 2006 in the U.S. and the U.K. The financial crisis interrupted growth in 2008 for a few years before the main markets started growing again in 2011, after which development in other areas of the world began apace.A substantial part of the alternative lending market is taken up by peer-to-peer lending (P2PL), which is one way of lending money to unrelated individuals via an Internet platform, to obtain a better rate of return than savings held with a bank. For borrowers, P2PL is an alternative source of borrowing to that of high street banks. This short report looks at the alternative lending sector only.

Please Note: Extended description available upon request.

In This Perspective
Technology Overview
Scoring Technology
Technology Cases
Off-the-Shelf Software or In-House Development?
The Evolution of Regulations
The Banks' Perspective
Future Outlook and Essential Guidance
Non-Bank Lenders Cannot Offer Current Accounts But May Introduce Overdraft Loans
Banks Should Not Overlook the Importance of Non-Fintech Factors in Avoiding Failure
Beware of Public Opinion Around Shadow Banking
An API May Be the Easiest Way for a Bank to Operate in the Alternative Lending Market
Secondary Market Trade Investment Works Well in This Market
Another Credit Crunch Need Not Have a Negative Effect on Alternative Lending
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