Millennials and Online Marketplace Lending Collide

by Kerry Rivera 3 min read December 15, 2015

online-marketplace-lenders-millennials

Last December, American Banker named online marketplace lending its innovation of the year as a result of the “industry’s rapid growth and evolution.”

Meanwhile, in 2015, millennials scored headlines in nearly every publication imaginable – industries, politicians and academics all trying to understand and articulate how the now largest-living generation will influence how we work, live and lead.

So perhaps it’s no surprise the two hot topics have collided this year.

Gen Y is tech-dependent and Internet-enabled. They have increasingly grown to expect the tools and services they use to be available online, including anything and everything in the financial services space. Marketplace lenders are ever-so eager to sweep in and serve.

Online and mobile solutions are certainly one thing, but Experian’s latest research reveals this generation is also very receptive to “non-bank” lenders for the ease, speed and accessibility they provide.

  • 47 percent of millennials said they are likely to use alternative finance sources in the near future
  • 57 percent reported they are willing to use alternative companies and services that innovate to meet their needs
  • 13 percent said they’ve already taken out a loan from an alternate or non-bank lender

As they come of age, hitting those big milestones – college graduations, marriage, starting families, making home purchases – Gen Y is wading through its financial options. Research and logic suggest millennials will without a doubt have a greater openness toward nontraditional banking, representing a huge market for online marketplace lenders.

For the millennial entrepreneurs especially, marketplace lending is proving to be a good fit.

“They are on the earlier curve of their small business ownership and entrepreneurial paths,” David Solis, sales performance manager at Bank of America, told CNN Money. “It makes sense they’re going to be pursuing alternative forms of lending.”

Affluent millennials are another segment open to alternative financial services. A 2015 LinkedIn study on this specific target stated affluent millennials are particularly likely to envision a cashless, sharing-based economy in the future, where banks no longer serve as their primary financial institutions.

Nearly seven out of 10 affluent millennials are likely to consider such offerings outside of the traditional financial services space, compared to just 47 percent of affluent Gen X’ers.

The millennial generation may not fully understand all products traditional banks offer, since they rarely set foot in “brick-and-mortar” establishments, but they are a prime market for online investing and lending services.

They’re more experimental, more digital, less loyal.

In short, they are looking for financial services that are as tech-savvy as they are; those who don’t keep up may get left behind, and online marketplace lenders are certainly positioning themselves to win over this generation.

To be most successful in capturing this highly sought-after generation, online marketplace lenders will need to continue to innovate both in terms of differentiating their product offerings and getting more sophisticated in their targeted marketing approach. As the online marketplace continues to expand with more players, heating up with increased competition, segmentation strategies will be key in finding the right borrowers and matching them with the right offer.

As we head into 2016, there is no doubt many will continue to monitor the financial services trends emerging. Chances are online marketplace lenders and millennials will likely be attached to many of the headlines.

For more information, visit www.experian.com/marketplacelending.

Related Posts

Customer Spotlight: How Matrix Rental Solutions Strengthens Trust in Affordable Housing

Learn how Matrix continues to deliver a secure, trusted rental experience as fraud tactics evolve. Read more!

July 31, 2026 by Laura Burrows
What Is AI Decisioning?

Every business makes decisions about people and transactions all day long. Should we approve this loan? Is this purchase fraud? Which customer should get this offer, and what should it be? For a long time, those decisions were made in one of two ways: a person reviewed each case by hand, or the company wrote fixed rules, like "approve anyone with a credit score above 700." Both work. Both also leave value on the table. The manual review is slow and hard to scale. The fixed rule can turn away good applicants and is slow to adapt when the market shifts. AI decisioning is a third way. What makes AI decisioning work Instead of relying on a single reviewer or a rigid rule, automated decisioning uses models that learn from data — studying how thousands of past cases turned out, finding the patterns that predict an outcome, and applying them to each new decision, often in real time. The result is faster, more consistent decisions. But a model on its own isn't the whole story. Getting real value from AI decisioning takes good data to learn from, AI analytics to generate insights, the tools to act on it and the governance to keep it compliant. What we've found is that the pieces only pay off when they work together, and that is where we're built differently. A model is only as good as what it learns from, and we pair your data with one of the deepest views of consumer and commercial credit: decades of full-file history and vetted attributes. Then we give you the tools to act on it. Use cases across your business Whether you're trying to grow your customer base, reduce fraud, manage lending risk, or improve collections, automated decisioning brings all the pieces together to make more accurate, consistent and explainable decisions at scale. Fraud and Identity A fraudulent transaction that slips through costs money and erodes trust. Rules are static, and fraudsters move fast. They'll probe boundaries, find the blind spots and move to the next scheme. By the time the rules are updated, they're already three steps ahead. How AI decisioning changes this: AI fraud detection with real-time risk scoring and decisioning across transactions and customer interactions Intelligence that continuously learns from results to help adapt fraud strategies as threats evolve Reduced false positives and less friction for customers at account opening and checkout Identity verification tools that confirm someone is who they say they are without slowing down the experience Credit and Lending Loan approval is where the relationship begins. Credit risk decisioning helps lenders find that delicate balance between approving enough people to grow, but carefully enough to manage risk. Missing that balance means turning away good customers or taking on losses that are difficult to absorb. How AI decisioning changes this: Increased approval opportunities for creditworthy applicants without increasing overall risk Models you can update and deploy quickly as market conditions change, rather than waiting months Ability to run "what-if" scenarios to test how a new strategy would have performed on your historical data before putting it live Collections Which customer should your team reach out to today? Through which channel? What kind of message? If you reach out too aggressively, you push someone who might have recovered into default. If you wait too long, you lose them. If you call someone at work, they resent you; if you text, they might ignore it. If you offer a payment plan, they might accept it, but only if the terms make sense to their financial situation. How AI decisioning changes this: Optimized next-best-action and contact-channel strategies for each individual customer Improved recovery potential through better targeting Less time spent on accounts with a lower propensity to pay, freeing your team for higher-impact cases Ability to segment and test new strategies before rollout Customer Acqusition Finding the right customers is about reaching the right people with the right offer at the right time. To stay competitive, it’s now a requirement to balance growth with risk while creating a seamless experience converting prospects into customers. How AI decisioning changes this: More precise prospect targeting using credit, behavioral, and alternative data, where permitted, to identify consumers most likely to respond Personalized offers delivered in real time Dynamic decision strategies that can be updated quickly as market conditions and customer behavior change Ongoing testing and optimization of acquisition strategies to improve campaign performance and support customer lifetime value Driving results with AI decisioning Every customer interaction is a decision. Businesses that can adapt quickly will be better positioned to grow, manage risk, and deliver the experiences customers expect. The technology will continue to evolve, but the goal remains the same: making informed decisions that balance business objectives, risk, and customer experience. Learn more about our decisioning software

July 27, 2026 by Zohreen Ismail
Why Innovation Matters for Members First Credit Union

Learn how Members First Credit Union uses innovation and data-driven insights to better serve members and expand financial opportunity.

July 24, 2026 by Scarlet Nickel

Subscribe to our Newsletter

Enter your name and email for the latest updates.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Subscribe to our Newsletter

Don't miss out on the latest industry trends and insights!
Subscribe