According to a recent study by TransUnion – a US consumer loan advisory firm – American consumers are increasingly borrowing from fintech companies.
Record high loans
Consumer credit loans reached an all-time high in the US last year. According to a February survey by TransUnion, unsecured personal loans rose 17 percent to $ 138 billion. By comparison, in Switzerland, the market volume is less than 8 billion francs, which is about 2.5 times more compared to the population.
Growth thanks to Fintechs
Fintech companies and, above all, crowdlending platforms have made a decisive contribution to market growth. Jason Laky of TransUnion said: “Digital business models are largely responsible for this growth. And they continue to be the most important driver. “Fintech companies now have a market share of 38 percent. Five years ago, this market share was only 5%.
The most important fintechs offering consumer credit in the US include SoFi, LendingClub, Prosper, Avant and GreenSky.
Role of traditional banks
Banks lost 12% market share in consumer credit business in the last five years, credit unions 10% in this period. In absolute terms, all groups of providers were able to grow as a result of the overall strong demand for credit, but growth was mainly achieved through lower risks. From this point of view, it is to be hoped that the good economic situation will continue and that there will not be major outages.
Comparison to Switzerland
In the Swiss consumer credit market, the market shares are still over 80% of the four major providers. Nonetheless, according to a study by the Lucerne University of Applied Sciences, crowdlending platforms are on the rise with double-digit growth rates. Maybe this is just the beginning of a development as we see it today in the USA. After all, with the founding of Thomas Bigger in 2008 after the UK, Switzerland was the second country in Europe to venture into the new era of financing.