 | In the last months, a few of the major banks in Europe started moving the first steps into the peer to peer lending space. Most of them are entering the market in a soft way, partnering with established portals, while only the Royal Bank of Scotland announced it would have piloted a P2P platform by the end of this year. |
The impressive growth of peer-to-peer lending has caught the attention of the traditional banking system, which started to wonder whether the new phenomenon was a friend or a foe, a threat or an opportunity? P2P lending could be a potential disruptor to traditional banking models, operating in a more cost-effective way, with less overhead and providing loans at better interest rates for both the borrowers and the lenders than what banks have been doing in the last five years. As a consequence these new players may “eat” part of the market which traditionally has always been a monopoly of banks. In this sense it would be a threat. However, it could also be the case that these P2P players operate in a part of the market which is not covered by banks, because too risky or too innovative. In this other sense, P2P lending may turn into an opportunity. This latter view is also encouraged by the British government, which a few weeks ago took a very fore-thinking decision: banks will forward the information of SMEs whose loan applications were rejected to P2P portals, provided the companies authorize it.
Besides the Royal Bank of Scotland, other major international banks, such as Credit Suisse and Santander, entered the crowdfunding space through partnerships with existing portals. In the US a few banks are starting to invest through P2P portals alongside other institutional investors as hedge funds and venture capitalists. All these moves signal that the banking industry is increasingly considering crowdfunding as an opportunity rather than a threat and it believes that collaborating with P2P players may create synergies that would benefit not only the parts involved but the entire economy too.
Learn more about Crowd Valley’s P2P product reading this case study.
References
Credit Suisse jumps on Peer-to-Peer bandwagon. Altfi News (2014)
Herrie, H. (2014). Crowd-funding: Will peers-funding-peers hurt banks’ bottom lines?. KPMG.com
Besides the Royal Bank of Scotland, other major international banks, such as Credit Suisse and Santander, entered the crowdfunding space through partnerships with existing portals. In the US a few banks are starting to invest through P2P portals alongside other institutional investors as hedge funds and venture capitalists. All these moves signal that the banking industry is increasingly considering crowdfunding as an opportunity rather than a threat and it believes that collaborating with P2P players may create synergies that would benefit not only the parts involved but the entire economy too.
Learn more about Crowd Valley’s P2P product reading this case study.
References
Credit Suisse jumps on Peer-to-Peer bandwagon. Altfi News (2014)
Herrie, H. (2014). Crowd-funding: Will peers-funding-peers hurt banks’ bottom lines?. KPMG.com
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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