Industry research
Scope
US
Companies
157
Table of contents
What does the Lending services market landscape look like in the US?
The US lending services and platforms market is mostly fragmented. However, the level of consolidation varies across segments. Within traditional lending, large commercial banks dominate the consolidated consumer and business loan markets, whereas nonbank lenders hold a leading position in mortgage lending. In the alternate lending segment, the consumer BNPL space is highly competitive with rising competition from banks and international players entering the US market. Meanwhile, the earned wage access (EWA) and invoice discounting and factoring market is highly fragmented, with a long tail of smaller providers. Similarly, the loan marketplace segment remains relatively fragmented, with some identified players (e.g. Upstart, LendingTree) leading the pack by offering a broad range of products from various lenders to customers.
What is the level of investor activity in the US lending services industry?
Investor-led interest has been moderate, with >30% of identified assets being sponsor-backed (April 2025). Herein, the alternate lending segment stands out, with ~75% of identified assets being sponsor-backed (April 2025). The relatively high interest in this segment can be attributed to the surge in alternate loan origination volumes and values, as well as rapid growth in consumer adoption and usage. Broader investor interest is fueled by (i) a large addressable market of SMEs being underserved by traditional banks and (ii) AI models driving down operational costs. The main detractors relate to (i) increasing delinquency rates, (ii) intensifying cybersecurity risks and (iii) rising competition from large banks and international lenders.
What are the key ESG considerations in the US lending services industry?
ESG topics mainly relate to social and governance aspects. Significant social issues include the neglect of microenterprises and individuals with limited credit histories, as well as the prevalence of unfair lending practices. Historically, low-income applicants and underserved communities have more frequently experienced credit denials or received less credit than requested. Additionally, complex presentations of borrowing costs have misled borrowers, resulting in financial harm to consumers. Identified players address this by expanding access to credit through AI models that consider alternate data points while simplifying loan terms with complete disclosure to ensure transparency. Governance challenges primarily revolve around data privacy. Cybersecurity threats are rising, with data breaches impacting lenders and non-compliance with data regulations resulting in major legal liabilities. Players are countering these issues by strengthening cybersecurity measures, improving compliance frameworks and investing in advanced fraud detection systems.
Total revenue in the global digital lending market is expected to grow from ~$15.3bn in 2023 to ~$49.9bn in 2028 (+26.6% CAGR 2023-2028; Technavio, September 2024)
According to Statista (March 2025), the penetration rate of credit cards in the US is forecasted to grow from ~60% in 2014 to ~68.4% in 2029
Lenders are increasingly using AI-driven platforms to automate verifications and enhance credit modeling, enabling faster loan approvals with accuracy. This not only improves scalability and responsiveness but also delivers a smoother borrower experience while driving down operational costs (Wolters Kluwer, September 2024; Alkami, July 2024; EY, January 2024; Federal Reserve Bank of Dallas, January 2023)
US government initiatives are poised to accelerate the growth of secure digital lending platforms, helping emerging FinTechs to market innovative products faster. To illustrate, the CFPB’s regulatory sandbox gives companies the flexibility to test technologies such as blockchain-based loans under eased compliance conditions (American Banker, January 2025)
As major retailers and BNPL providers expand cross-industry partnerships, they enhance consumer access to short-term credit amid ongoing inflation and pressure on household budgets. This surge in demand is especially driven by subprime borrowers who turn to flexible, interest-free payment plans to better manage everyday expenses (American Banker, January 2025; Harvard Business Review, November 2024)
Rising delinquency rates among subprime borrowers are putting pressure on loan portfolio performance, with credit card and auto loan delinquencies reaching ~15.7% and ~15.4% in Q3 2023, respectively – both exceeding their highest levels since 2012. This trend will prompt lenders to tighten credit standards while increasing their exposure to charge-offs (Wolf Street, January 2025; Payments Dive, November 2024; Federal Reserve, January 2024; PYMNTS, January 2024)
Intensifying cybersecurity risks along with regulatory scrutiny on digital lending platforms drive up compliance and security costs. To illustrate, new CFPB rules on overdraft fees and the FTC’s amendments to the Safeguards Rule require lenders to invest heavily in advanced security measures and compliance efforts, leading to bottom-line margin pressure (The Wall Street Journal, December 2024; CPO Magazine, December 2024; Mayer Brown, October 2024)
The entry of traditional banks and global BNPL players disrupts the exclusive partnerships that once favored regional players, limiting their ability to expand market share. As a result, regional lenders face mounting pressure from thinner margins, rising customer acquisition costs and escalating marketing spending (Financial Times, March 2025; Yahoo Finance, March 2025; PYMNTS, September 2024; PYMNTS, August 2024)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 157 private companies, incl. financials, ownership details and more.
A view on all 334 deals in the industry
ESG assessments with highlighted ESG outperformers
