PREMIUM — For online lenders, small business lending continues to grow into big business.

Online lenders continue to grow their originations of small business loans, according to a new study released today by Washington D.C.-based economic research firm NDP. The Online lenders — including OnDeck, Kabbage, Lendio as well as smaller ones like BlueVine or lending platform Mirador — have originated almost $10 billion in online loans to 180,000 U.S. small businesses from 2015 to 2017. But the amount of small-business loans made by the top five online lenders, including Kabbage, OnDeck and Lendio,  increased to $3.9 billion last year from $2.6 in 2015, a nearly 50% increase.

Thanks to technology, these fintech lenders have carved the small-business niche for themselves. Unlike many banks, fintechs extensively use artificial intelligence in most aspects of the underwriting process. This enables them to originate more loans in a shorter time and more cost-efficient manner, Jeffrey Brown, senior partner at consulting and software provider Genpact, told Bank Innovation.

Most banks are bogged down by legacy systems and tedious underwriting processes — a bulk of which is still done by humans, Brown said. But more importantly, many banks consider underwriting smaller loans as an expensive endeavor. Regardless of their size, these loans require compliance, risk management and other functions within underwriting. And since the loan amount is small, the returns are minimal.

According to today’s report, within the online lenders’ originations, 42% were to small businesses, which borrowed between $10,000 and $50,000 from with the average amount of $55,498. That’s a small loan for the average bank.

And yet, not catering to the small-business lending market could cost banks their most valuable customer (more on this here). Online lender Mirador’s CEO, Trevor Dryer, previously explained to Bank Innovation that when a small business is denied a loan from its bank, “a lot of them tend to take their entire business to someone that’s giving them the loan,” he said, ultimately costing the bank a valuable customer.

Jason Oxman, CEO of the Electronic Transactions Association, which commissioned today’s report, said in a statement:

Advanced technology enables online small business lenders to gather information and assess credit risks quickly to provide critical funding for small businesses. Online small business lenders provide key options and benefits to American small business owners in the highly competitive lending marketplace.

The study was conducted by research firm NDP, and, in addition to the Electronic Transactions Association, was sponsored by the Innovative Lending Platform Association and the Small Business Finance Association.

Read the full report here.