Marketplace Lending Promotes Innovations in Customer Credit

By CIOReview | Wednesday, July 29, 2015
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BOSTON, MA: Mercator Advisory Group’s recent research, “The disruptive Potential of Marketplace Lending in the U.S Consumer Credit market” finds that success of alternative lending models is attracting attention, forcing banks to respond. It explores what exactly that disruption will look like, both in terms of impact to the $3.4 trillion U.S. consumer credit market as well as the broader strategic implications for established banks and credit card issuers.

The market place lending industry is one of the fastest growing industries in the U.S. Financial industry. The new lenders are sophisticated in application of technology and operational efficiencies which are profitably fulfilling consumer lending needs that have traditionally been underserved by traditional banks. With huge amount of investment money and publicity flowing into the marketplace lending industry, regulations are slowly coming into existence. It is clear that the impact of the regulations will be felt in the existing status quo.

“Marketplace lenders are to lending technology what Google is to self-driving cars, a wake-up call for incumbents in their industry” comments Alex Johnson, Senior Analyst at Mercator Advisory Group and one of the authors of the report.

Some of the highlights of this research report include: Introduction to the marketplace lending model utilized by leading by the largest platforms, profiles of the two most successful marketplace lending platforms, lending club and prosper, comparisons of the U.S. and European marketplace lending industries, with a focus on how U.S. firms could learn from their European counterparts, analysis of the current state of the marketplace lending and its place in the broader alternative lending fintech space, overviews of the current regulatory environment for marketplace lenders and likely future regulatory frameworks, projected development paths for the evolution of marketplace lending platforms and an overview of the strategic implications of those development paths for existing industry.