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Is this your Approach to P2P Lending? Bad Idea…

by Kristin Moyer  |  November 20, 2008  |  2 Comments

Is this your approach to peer-to-peer (P2P) lending financial social networks (FSNs)?

It is for many banks.  We hear the following almost daily from banks from around the world:  “P2P volumes are low, so I don’t have to worry about it.  Right?”

No – this is changing.  Some FSNs that support P2P lending are reporting an increase in uptake in Q3 relative to Q2 of this year, by as much as ~50% for the number of borrowers joining and ~40% for the number of lenders joining.

 P2P lending is not the death of banks.  However, every deposit dollar/euro/yen/renminbi/ real/rupee/ruble/etc. counts right now.  Money that consumers are putting into P2P lending sites is money consumers do not have in deposits.

What should banks be doing?  At a minimum, develop a strategy for social networking and P2P lending.  Some banks are doing this and have a lead on the rest of the pack because of it.  Don’t get left behind.

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Tags: banking-and-investment-services  financial-social-network  fsn  p2p  peer-to-peer  peer-to-peer-lending  social-networking  

Kristin R. Moyer
Research Vice President
14 years at Gartner
more than 20 years IT industry

Kristin Moyer is a Research Vice President in Industry Advisory Services/Banking and Investment Services. She has more than 20 years of experience across the global high-technology industry in a variety of roles. Ms. Moyer's research coverage includes… Read Full Bio

Thoughts on Is this your Approach to P2P Lending? Bad Idea…

  1. Rick DeLotto says:

    Rick De Lotto here, checking in from vacation.

    Just a thought or two—

    Keep in mind that web-based p2p direct lending just hasn’t been regulated yet in any real sense… I am REALLY curious how it is going to stand up to close attention from the anti-money laundering, consumer protection and anti-loan sharking specialists. P2P Lenders may tighten up– or drop out completely– when they have to explain their source of funds, how they chose who to lend to, etc. Not only that, they have been lending into an up market under good financial conditions– mass defaults are VERY likely if conditions continue to worsen. This will chase many lenders out of the market completely.

    Sorry always to be so negative on this…

    Happy Thanksgiving!

  2. […] Bank Customer Relationships, FSNs as Technology Providers, I Just Put all my Money into Prosper, Is This your Approach to P2P Lending?  Bad Idea.  In addition to the perils of not having a social media strategy, the reasons are […]

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