Digital Transformation Reshapes Competitive Dynamics in Consumer Credit: Opportunities for Santander

Consumer credit has become a key component of modern financial systems, supporting household consumption while contributing to economic growth. In recent years, however, the industry has undergone profound structural changes driven by technological innovation, evolving consumer behaviour and an increasingly complex regulations. Among these developments, digital transformation has emerged as the principal force reshaping competition within the industry. This thesis analyses the competitive dynamics of the consumer credit market in Italy and identifies the strategic opportunities available to Santander within this evolving landscape. The research combines consumer credit literature with strategic management frameworks. It first examines the evolution of consumer credit and the role of digital transformation as a structural driver of change. It then analyses the Italian market through a segment-specific perspective, focusing on personal loans, automotive financing, salary- and pension-backed loans, and durable goods financing. Finally, it evaluates Santander's competitive position through PESTLE, Porter's Five Forces, RBV, VRIO and SWOT analyses. The findings show that digital transformation is progressively redefining competition through AI, Open Banking, embedded finance and platform-based ecosystems. Building upon these findings, the thesis identifies three strategic priorities for Santander: diversifying the lending portfolio, strengthening strategic ecosystems and increasing customer lifetime value. Overall, the study argues that digital transformation should be understood not simply as a technological trend, but as the principal strategic driver shaping the future competitiveness of consumer finance institutions.