Online lending is expanding quickly. New loans are being launched. New target audiences are being serviced. From plain vanilla consumer and business loans, to mortgages, credit builders, asset-backed business loans — things are quickly becoming more personalized, immediate, cross-platform, and transparent.

Tearsheet asked some of the top experts in online lending to describe what they feel are the top trends in their businesses.

Trends in online lending, 2019

From large incumbent banks and lenders to new rising startups, there is added emphasis on providing personalized service and offerings.

More personalization in online lending

John Schleck is senior vice president, centralized and on line sales at Bank of America:

“When it comes to the home of your dreams, the #1 trend heading into 2019 will be intuitive, simple ways for buyers to apply for a mortgage. We know they’re looking for an efficient, personalized experience — and one that has value — that they can complete on their mobile device and at their convenience.

We’re already there today with some online mortgages that are guiding buyers with an approach so straightforward that clients can complete it quickly, easily and with minimal effort on their part. Speed and simplicity are becoming an expectation, not just an added bonus. The value piece comes in with banking rewards. Consumers are already excited about tapping into their relationship bank with credit card rewards, but that can be taken a step further to explore options with mortgage origination fees on a new purchase or refinance.”

Adrian Nazari is the CEO and founder of Credit Sesame: “We expect to see the continued evolution of targeted mobile and cloud-based lending solutions as we head into 2019. Backed by powerful data analytics, these platforms will be competing to offer personalized lending experiences to customers, particularly to millennials, who place more value on this personal attention.”

BJ Lackland is CEO of Lighter Capital:

“The largest trend in online lending is, ironically, offering more than simple lending – being ‘more than just money’ for customers. Money is a commodity, so lending alone ends up being a price-based competition. This means the most successful online lenders will offer unique benefits its target borrowers want; everything from credit cards to unique industry-specific lending structures to integrated payments offerings to any other kind of fundamental need the lender’s target borrowers share.”

Jay Jacobs is Global X‘s, fintech fund (FINX) manager, head of research and strategy

“A broader trend in FinTech utilizes scalable technology platforms to provide financial services to customers who previously were ignored by traditional financial institutions. This is most apparent in the emerging markets where the rising middle class has historically largely been deprived of small loans or wealth management solutions given a lack of scalable financial services.”

Brent Vallat is the head of lending at Varo Money

“As we approach 2019, we’re seeing a higher demand for online lenders to develop an ongoing customer relationship that demonstrates incremental value add. Transactional business models will no longer suffice as innovation among lending products evolve beyond standard-term loan offerings to better meet ongoing borrowing needs.

Lenders should be looking for opportunities to create value for their customers — for example, personalized suggestions to improve a customer’s financial situation based on data, like their debt obligations. Integrating financial education tools with a focus on responsible lending options is the future of this industry. The impetus will be on socially-responsible companies to create products that, not only address immediate borrowing and refinancing needs, but also help customers use credit responsibly in anticipation of future needs.”

Adding new loan products

Eyal Lifshitz is the CEO and founder of BlueVine:

“When the fintech revolution began, most of the early players were essentially single product companies, i.e. offering just one product or solution. Some had products for searching for mortgages, while others focused on student loans. My own startup initially just offered invoice financing services. But the days of one-trick ponies in fintech are numbered. More companies will see the need to offer multiple solutions and services. My own company has expanded to offer a business line of credit and we continue to explore other products.”

Priyanka Prakash is a lending and credit expert at Fundera:

“Going into 2019, we are seeing more online lenders offer a full suite of financial products and services, either on their own or through partners with other firms. Lenders and lending marketplaces want to position themselves as the only financial tool that their customers need, so they will offer one-stop shopping.

For instance, some business lenders are now offering business bank accounts and business credit cards customized to the the borrower’s credit and financial profile. Some business lenders are also partnering with personal loan providers to ensure a seamless experience for their customers, no matter what type of financial product they are on the market for. In the near future, consumers and business owners will be able to access every type of loan and financial product they need from one app.”

Alexander Schoenbaum is the CEO of CrowdOut:

“We believe that the biggest trend in online lending will be a search for diversity and differentiation. With most investors now having found real estate and consumer lending platforms – and spreads compressing from an excess of capital and completion – they will look to alternative credit products that have not saturated the market, including niche industry lenders like Allegro, legal finance providers such as YieldStreet, or larger corporate loan providers like CrowdOut.”

Traditional players continue to enter online lending

Luke Voiles is a director at QuickBooks Capital Direct Lending:

“As fintechs have been leading the way, banks will begin to utilize the massive sets of transactional data produced by small businesses in the normal course. Lenders will be able to move away from using multiple years of audited financial statements and tax returns as their core validated, trended data set for underwriting. They will move toward the use of validated, trended data sets generated from payments, payroll, time tracking, invoicing, and accounting apps. Apps that small businesses use in the normal course to efficiently run things. This will enable a new generation of underserved startup businesses to gain access to capital when they consent to allow their data to be used by their lenders for underwriting.”

Bianca Crouse is an analyst at Merchant Maverick:

“Banks will continue to enter the online lending space by implementing digital applications and faster underwriting processes. This will allow them to compete with alternative lenders already in the space, and to give their customers a more modern and convenient service.”

Robin Abrams is finance director at Trade Finance Global:

“In our view, the #1 trend is a move towards sustainable tech platforms, with lending structures that work over the long term.

Many lending tech businesses have received heavy investment over a long period of time, which has resulted in the build out of expensive tech platforms and systems. While these platforms are technologically advanced, some of them have failed to address a specific lending market need. Some lenders have also been unable to access the right pool of borrowers (due to a lack of routes to market).

The more successful platforms have focussed on one or more specific financial products and industries. For example, some of the mortgage platforms have done this very well.

We are now at a point where traditional lenders, who previously rested on their established market share, have sat-up and taken notice by actually adding or changing their lending structures and lowering the cost of borrowing by partnering with these fintech models. An example would be Barclays’ investment in MarketInvoice.

We see this bank-fintech partnership model continuing to grow, giving borrowers access to more efficient tech platforms at better rates through their existing banking relationships.”

Rahul Easwar is the COO and co-founder at Tavalor:

“Trends going into 2019 in the online lending space:

Increased demand by business owners for transparency in the fees, rates and structure of the contracts. In the world of Blockchain and smart contracts there is complete transparency available in how calculations are computed and under what conditions they are triggered.

Extending credit lines versus term loans to encourage recurring and continued engagement with the online lender. Customer acquisition and cost to retain customers is increasingly going to push online lenders to a business model where they can continuously offer increasing lines of credit versus having to go through a new loan origination process.

Expectation of both borrowers and investors will be for more powerful analytics providing visibility to not only current state but projection of things to come. Automation features such as auto investing and integration to business operation systems will expedite the overall process.”

David Nilssen is the CEO and co-founder of Guidant Financial:

“Startups will continue to be left behind by digital lenders. They do not have the capability or appetite to support entrepreneurs in the early stages. Important tools for startups and business transfers – which are often used together (i.e. 7a SBA loans and rollovers as business startups) will continue to serve Main Street entrepreneurs where digital lenders and retail banking establishments cannot.”

James Garvey is CEO of Self Lender:

“In 2019, we will see more banks willing to do payday-style online lending. In the last decade, banks have stayed below the 36% APR interest rate threshold. Recently, U.S. Bank launched a small-dollar loan with 80% APR. The fact that U.S. Bank has broken the 36% APR barrier will absolutely pave the way for other banks to offer short-term credit at interest rates that approach payday lending rates.”

Dmitry Voronenko is the CEO of Turnkey Lender

“Given the tendencies and the scope of technological advancements over the last five years, we’re looking at two notable trends for the near future of fintech. Firstly, a much more comprehensive AI usage in online lending for alternative credit scoring and portfolio management. (the scandal with TransUnion has really put the institutional credit evaluation on the spot). It will allow lenders to utilize multiple data points – from mobile data to behavioral and transactional patterns. This way the most vulnerable in our society, the chronically underbanked, are given access to meaningful financial services with the chance to build a credit history or start a real business.

Secondly, under growing pressure from multiple fintech lenders and big innovative financial institutions (Goldman Sachs’ Marcus comes to mind), we’re looking at a massive migration of traditional banks and credit unions online. Recent American Banker Association report indicated that at least a third of banks and credit unions would be taking practical steps towards adding online lending operations broadening the range and area of services, implementing new approaches to everything from decisioning to customer service to accounting to collections within next 24 months.”

Real estate becoming more receptive to technology

John Bodrozic is the co-Founder of HomeZada:

“In the mortgage lending business, only about 30% of original mortgage customers do repeat business with their mortgage company when it comes to refinancing or home equity loans. In conjunction with the cost of acquiring new customers being very high and competitive, mortgage lenders are looking for building long term loyalty with their existing homeowners by providing digital home management platforms to help consumers actually manage, maintain, protect and improve their home.

This strategy allows mortgage lenders to go beyond the initial transaction to help homeowners which leads to more repeat and referral business at a much lower customer acquisition cost. It also becomes a platform where mortgage companies can build an extended ecosystem of other partners to provide products and services that homeowners need to manage the home.”

Adi Chugh is president of Remissary:

“The biggest trend on the commercial real estate finance side will be disruption in the matchmaking process. When it comes to commercial real estate lending, the more aligned the borrower and lender’s specifications, the more likely the deal can be successful. The future of lending will rely on technology turbo-charging the information flow between borrowers and lenders, making capital more accessible to borrowers and making the perfect deal flow more accessible to lenders. There is a shift in the mindset of the user base to adapt to technology. People still think that borrowers and lenders will have a tough time adapting, but the truth is, the commercial real estate finance community is ready for change. The market is ready for the change. The overall commercial real estate finance industry is set to change. Uniting technology with a personal, bespoke matchmaking process is the future of borrowing and lending.”