We have been huge fans of peer-to-peer (P2P) finance (see OBR 127, 148/149). In theory, it makes sense to tap Internet efficiencies to match the buyers and sellers of money. On the other hand, there are good reasons to have highly regulated intermediaries, though that system is far from perfect. We expect interesting hybrids to take hold during the next ten years.
If you are a bank, learn to love crowdfunding and P2P. Yes, it’s a threat. But it’s also an opportunity. Harness it to help those who don’t qualify under your existing underwriting while improving your bottom line, both directly (interest income) and indirectly (retention, satisfaction, differentiation).