A regulatory change in 2004 opened a space for niche banks to compete in the B2B financial services market. This market is now facing spill-over expectations and behaviors from the consumer markets, where it has become commonplace to compare products and services in the purchasing process. Since their launch, B2B loan aggregators have experienced significant growth, and aggregators are reporting a steady and continuous increase in popularity and usage. As aggregators continue to gain popularity, they are becoming an increasingly important channel for lenders to acquire new customers. To effectively leverage these platforms to stay competitive, it is crucial for lenders to understand the role and impact of these platforms.
The changing landscape of business lending
Insights about the market implications of the emergence of loan aggregators
Key insights
Aggregators are expected to grow on the market
Aggregator platforms are expected to grow in importance for lenders as a customer acquisition channel as more B2B customers are utilizing these platforms. The current spread in effective rates and lender fragmentation on the platform indicate limited competition and present growth opportunities for lenders.
Shift may come with risks of dependency and price pressure
Lenders can profit on aggregators’ market growth as they enable lenders to reach and target more customers. However, the shift to a market where customers utilize aggregators instead of approaching lenders directly may reduce bargaining power for lenders and increase the risk of price pressure.
Balance channels and tune strategies to win in the market
To win in a market where aggregators are becoming the norm, lenders need to tune their on- and off-platform strategies, as well as their customer retention strategy. Furthermore, finding the optimal balance between on- and off-platform channels is crucial for lenders to ensure a low customer acquisition cost.
