Nonbanks offer customers and businesses a variety of loan options including: mortgage loans, small business alternative loans, and peer-to-peer loans. According to data reported by SME Finance Forum, in 2018 there was funding gap of $5 trillion between the financing needs of SMBs and the institution-based financing available to them - causing SMBs to seek alternative funding options.Īlt lenders use technology like artificial intelligence and machine learning to gather data and onboard customers, and Business Insider Intelligence's SMB Lending Report explains that if incumbents don't explore technology advancements, alt lenders could begin taking a larger share of the market. The presence of alternative lenders and digitally advanced nonbanks is continuing to grow in the banking industry - pressuring traditional financial institutions to digitize their own lending options.Īccording to Oracle's Digital Demand in Retail Banking study of 5,200 consumers from 13 countries, over 40% of customers surveyed think nonbanks can better assist them with personal money management and investment needs, and 30% of respondents who haven't tried a nonbank platform said they're open to trying one.Īlt lenders are also garnering attention, particularly from small- and medium-businesses (SMBs). Nonbank and Alternative lending industry trends These lenders provide users with easier access to obtaining loans - especially for consumers who may not have the best credit. Nonbanks can engage in typical bank-related services like credit card operations and various lending services, such as mortgage lending.
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#Quicken home and business 2019 with alternative full#
Nonbanks - financial institutions that do not have a full banking license - also offer different lending options to smaller businesses. Small businesses typically struggle when attempting to receive financing, so oftentimes they turn to alternative lending - where funds are provided outside of traditional banking. Below we break down what alternative lending is, list the top alt lenders in the industry, and detail how alternative financial institutions are threatening the dominance of incumbent banks.