Transaction Trends

Global revenue from fintech platforms for lending and financing should double in the next four years to reach $10.5 billion by 2020, according to Juniper Research. Several factors—including growth in peer-to-peer (P2P) lending; crowdfunding viability; and new analytics platforms—will fuel the increase.

Juniper argued that with credit checking bureaus lacking in emerging markets, social media activity will help lenders assess applicants’ riskiness and will factor into overall application decision-making. “Nevertheless, the research cautioned that the process might meet with greater consumer resistance in developed markets, with many would-be applicants likely to perceive the practice as an unwarranted invasion of privacy,” according to the press release.

Juniper also predicted North American and European crowdfunding and P2P platforms will provide more opportunities for individual investment in promising startups, as global interest rates remain at record lows. However, the firm said some analytics platforms may not be sophisticated enough to fully evaluate “distinct corporate operating environments” and their management teams.

“Platform providers need to be transparent about how they assess firms and not just sell the [tantalizing] potential of funding the next Facebook,” research author Michael Larner said. “We are yet to witness a blockbuster exit for investors, but a successful IPO would cement crowdfunding’s foothold in the marketplace.”