The global consumer credit market was valued at more than $6 trillion in 2015 and is expected to reach almost $8 trillion by 2020, says Technavio.
Technavio has announced its latest market research report on consumer credit for the forecast period, 2016-2020. This market analysis discusses the major drivers and key emerging trends that will influence the growth of the global consumer credit market during the forecast period. Some of the top vendors listed in this industry analysis include BNP Paribas, Citigroup, HSBC, Industrial and Commercial Bank of China (ICBC), and JPMorgan Chase.
In terms of geographical analysis, the Americas will account for the largest share of the global market and is anticipated to reach a revenue of almost 3 trillion by 2020. The US will emerge as the key revenue generator in the region.
“Several banks are focusing on developing an environment where there is constant technological innovation from stand-alone technology projects. Many top vendors are preferring mergers and acquisitions and joint ventures in an attempt to reduce cost. The high-cost reduction enables smooth integration in data mining and organizational resources in businesses. Many top banking vendors are also making use of the cost-effective solutions in infrastructure, communication, and analytics,” says Amit Sharma, a lead analyst at Technavio.
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The new industry research report from Technavio analyzes some of the key drivers and trends responsible for the growth of this market and its sub-segments.
Quicker access to credit
Banking institutions provide credit to marginalized borrowers such as small and medium-scale enterprises that are unable to obtain funds from other banking and financial institutions. Small and medium enterprises lack high-quality collateral and long credit histories as these firms are usually associated with a higher risk factors. Traditional banking institutions are attempting to address the specific needs of potential clients to reduce the huge funding and credit gap between large firms that are licensed to lend in small amounts. This is expected to encourage credit access to the small and rural borrowers.
High economic growth in emerging markets for micro enterprises
Developing markets such as China, India, Thailand, and Nigeria exhibit vast opportunities for banks to increase their penetration into the microenterprise segment. For instance, countries like Africa are expected to generate 50% to 55% of revenues on a global scale by 2020, which highlights the vast job opportunity from the perspective of investment. Such countries have 50%-60% of micro enterprises that remain unserved or underserved. The microenterprise segment is continually expanding rapidly.
Portfolio risk solutions
Banks are increasingly realizing the costs of operational and sales inefficiency, which is reflected in their revenue. As enterprises become more active in supply chains, their ability to manage risk becomes more important. Investments in risk management are of utmost importance to compete in the global market to ensure compliance or deploying risk-minimizing technologies. This will help to increase the transparency beyond first-tier suppliers. As a hedge against this, banks are increasingly adopting automated portfolio monitoring to stay abreast of the credit flow of their client segment and allow them to take appropriate steps with immediate effect.
Some of the other prominent vendors identified in this report are Bank of America, Barclays, China Construction Bank, Deutsche Bank, Mitsubishi UFJ Financial, and Wells Fargo.
This research report includes an in-depth analysis, market shares, and sizes of the sub-segments and geography. It provides a comprehensive analysis of the key companies, including their market shares, business overview, and key financials. The market study also offers a detailed analysis of key drivers, challenges, and opportunities influencing this market.
A more detailed analysis is available in the Technavio report titled, ‘Global Consumer Credit Market 2016-2020’. Technavio also customizes reports by other regions and specific segments upon request.
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