News 02/06/25

Opportunities and risks of digitalisation of the lending market by 2035

Digitalisation will have a major impact on the lending sector in the next 10 years. Looking ahead, technological innovations will enable consumers to receive a tailor-made credit offer at short notice. This offers opportunities, but also risks – for both consumers and regulators. This is stated in an exploratory study by the Dutch Authority for the Financial Markets (AFM). The exploratory study is an outline of the lending sector in 2035, specifically for mortgage and consumer credit. The study is a guide for a dialogue with the sector and stakeholders.

In short

Increasing digitalisation will have an impact on the lending sector
Opportunities, but also risks
Issues for supervision and the sector
Call to the sector and stakeholders

Increasing digitalisation will have an impact on the lending sector

2035 will be the time of 'one click away': everything can be done anywhere and directly, interactively and digitally. Lenders will work towards this as much as possible; the credit process will be further digitized and become more personalized and interactive. Lenders are collecting more data and making smarter data analyses, increasingly with artificial intelligence (AI). AI can be deployed in almost the entire lending value chain. The opportunities for lenders to gain access to data sources from other organizations are also growing; this is due to open finance legislative initiatives in the EU. This allows the lender to classify consumers more and more accurately into very specific target groups. And actors in the lending value chain increasingly have more and different types of data at their disposal to determine the consumer's creditworthiness quickly, accurately, and with more granularity, and thus to increasingly personalize the credit offer. The development of AI can also play an increasingly important role in customer contact. Initially to support the advisor. But AI may be able to help the customer to complete the customer journey independently, for example via an online mortgage portal. The advisor is then on standby if the customer needs help.

Opportunities, but also risks

For consumers, further digitization will lower access thresholds and increase ease of use. This has positive effects, such as early detection of payment problems and low-threshold payment solutions. But also negative effects, such as habituation to debt, possible exclusion of customers due to more granular data analyses and privacy issues. Based on the principle of giving central priority to the consumer’s interests, the AFM considers the importance of adequate management of risks to be paramount. At the same time, we will continue taking account of the opportunities of digitalisation to improve the quality of and access to financial services for consumers. This requires a balance between giving room for taking advantage of these opportunities and mitigating possible risks. Against this background, we will pay particular attention to a number of issues that emerge from this exploratory study in the coming years.

Issues for supervision and the sector

The first question is about instant credit. Because being able to take out a loan quickly can lead to a gradual cultural change from 'credit is the exception' to 'credit is the norm'. A second issue is how to protect consumers from risks of exclusion from credit, without sacrificing opportunities for greater accessibility. A third issue concerns the risks of personalisation of credit offerings. This can lead to risks of division and unequal treatment among consumers. A fourth issue concerns the supervision of an increasingly complex and interconnected lending ecosystem. And finally, a number of technological trends also require thinking about how they relate to existing laws and regulations in the field of conduct supervision and privacy.

Call to the sector and stakeholders

We call on the sector, as well as other supervisors, regulators and policymakers involved, to think about the possible future perspective of the lending market and the issues raised in this exploratory study, based on their role and responsibility. The AFM would like to continue the dialogue on this in the coming period.