Deloitte, Experian, Cetif monitor: digital lending will account for 30 percent of the credit market by 2029

The banking sector and the credit market are undergoing a profound transformation, under the joint push of technological innovation and new customer habits. As of today, in fact, 60 percent of banked customers use mobile banking, with a figure that is expected to reach 80 percent in 2029, doubling the number ofinternet banking users. In parallel, banking networks are also evolving with the growth of digital branches (about 5,000 operators as of 2024, expected to reach 8,000 in 2029) and networks that are increasingly light as well as cashless. In this context, the digital lending is growing exponentially: since 2019 the value has increased more than 5 times, reaching 18.8 billion euros in 2024. Forecasts, therefore, show that it will account for 30 percent of the lending market by 2029, with an estimated value of more than 44 billion euros. Growing particularly rapidly are finalized loan and buy now pay later(bnpl) solutions, with annual growths of more than 100 percent and 80 percent respectively between 2019 and 2024.

These are some of the findings of theDigital Lending Observatory 2025, carried out by Monitor Deloitte, Experian and Cetif - Università Cattolica with the aim of identifying key trends in the sector, exploring the growth prospects of the different credit segments, the main characteristics of consumers and the latest technological innovations that are transforming the banking sector.

"Customers are increasingly digital-first. In this context, digital lending is the ultimate representation of the evolution toward the digital paradigm where even for credit, the most complex banking product, it is starting to be the "new" normal: from 3 percent of total lending volumes in 2019, to 16 percent in 2024 to reach, according to our estimates, about 30 percent by 2029," says Manuel Pincetti, managing partner of Monitor Deloitte. "Digital is no longer just an opportunity for banks to attract new customers and reduce cost-to-serve, but has become a key lever to continue to be competitive. In an industry where physical presidium and interaction is contracting due to new consumer habits, the challenge for intermediaries lies in the ability to maintain digital differentiation and human touch leverage by integrating AI as a tool for simplified and hyper-personalized services."

"In such a rapidly transforming environment, collaboration among diverse expertise and in-depth data analysis are crucial to fully understanding the Digital Lending phenomenon and supporting sustainable growth," comments Chiara Frigerio, professor of business organization and secretary general of the Cetif -. "This synergy can lead to innovative solutions that effectively meet the needs of consumers and businesses. In addition, a holistic approach involving all stakeholders can foster greater transparency and trust in the financial system."

Digital channels as a new growth engine for banking

After the events of recent years that profoundly affected the economy globally, financing services have shown signs of recovery, recording volumes close to pre-pandemic levels. In recent years, the sector's growth has been driven by the digital channel, particularly in simpler products such as special purpose loans, which have recorded an annual growth rate of more than 100 percent, and bnpl, up 80 percent annually. This segment, which is characterized by lower average tickets, has benefited from the speed, flexibility and inclusiveness inherent in digital lending, as well as the adoption of advanced anti-fraud systems and new sources of creditworthiness assessment, which have helped reduce the online channel's default rates, bringing them in line with those of the traditional channel.

The adoption of digital lending is driven mainly by young men from northern Italy with high incomes, while in the South traditional channels, such as branches, still prevail. A significant exception is bnpl, where female customers predominate, driven by purchases in the fashion industry, which alone accounts for more than 80 percent of transactions made with this payment method.

"The digitization of credit is now an inevitable trend, not just a passing fad ," says Giulio Mariani, director data & AI at Experian Italia. "While this trend is most evident for digitally born products, such as bnpl, the 100 percent growth for finalized loans over the past 5 years is a symptom of exponential consumer interest, inevitably influenced by the growing market share occupied by the younger generation. The availability of digital credit application tools represents a unique opportunity not only to ensure safer and more efficient access to credit, but also to ensure greater financial inclusion and broaden the consumer base."

Mortgage also goes digital, but at a slower pace

For more complex and higher average ticket products, such as mortgages, the digital transition is proceeding more slowly, with a preponderance of consumers, typically from the older age groups, still preferring traditional banking channels. In this sense, although the mortgage industry is also benefiting from the adoption of advanced technologies such as artificial intelligence and remote assessments, digital disbursements are experiencing slower annual growth, increasing by 18 percent annually between 2019 and 2024. 

Automated and increasingly faster digital processes

Technological evolution has enabled the creation of comprehensive digital customer experiences through the adoption of innovations such as artificial intelligence and machine learning. Onboarding processes-which include information gathering, identity verification, and contract signing-and lending processes-from application submission to risk assessment and credit approval-can now be fully automated, eliminating the need for in-branch steps and minimizing the amount of information required, with time to yes as low as 12 minutes for fully digital personal loans and 3 minutes for pre-approved loans. These are timelines being reduced by more than 30 percent from 2024.

Riskiness of digital customers declining, with default rates increasingly closer to traditional channels

Digital customers have always presented a higher risk profile, but today, with theintroduction of new credit assessment solutions, default rates are decreasing and increasingly aligned with the traditional channel.

Specifically, the default rate for personal loans remains the highest (2.6 percent recorded in 2024), reflecting the higher risk of customers who are required to have less collateral as opposed to financed loans (2.1 percent rate), where the collateral is the asset itself. An overall reduction in riskiness is also observed in mortgages, with the default rate falling and the gap between channels narrowing (1.2% digital vs. 1.0% traditional).

Finally, the bnpl, despite high default rate expectations related to the absence of rigorous credit scoring controls (CDD II on bnpl not yet transposed into Italian law), has declining default rates from 3 percent in 2020 to 2.4 percent in 2024, even lower than that of personal loans, reflecting more conscious credit management by consumers and operators.