Aug 02 2006

Peer-to-Peer Lending: Back to the Future

Report  
Number  
122

In today’s retail financial services market, many firms lack a clarity of purpose, or in other words, something that is innovative and different. Peer-to-Peer (P2P) lending is one of the few exceptions.

Executive Summary

Over the past year, Filene Research Institute had the unique opportunity to interact with a novel breed of lenders. Eschewing the conventional wisdom of today’s financial services firms, these lenders aim to make borrowing and lending intimate. In lieu of heavy infrastructure and legions of credit experts, these upstarts are combining a unique blend of high technology with the credit union ethos of pooling of resources. These so-called “peer-to-peer lenders” (P2P) are just getting started and may look like a distant threat to the world of traditional retail banking.

Filene Research Institute sees this emerging trend as one credit union watchers need to be acutely aware of; if not from a competitive perspective, then from an opportunity standpoint. The following special report will furnish insight into P2P lending and suggest ideas for your credit union to ride this trend before your competition catches on.

What is the research about?

While the vast majority of today’s loans rely on traditional financial services to complete the transaction, a novel breed of lenders is making waves in the industry. These lenders, commonly referred to as peer-to-peer lenders – or P2P – aim to make borrowing and lending a more intimate business.

This research looks into the concept of P2P lending and includes insights into current P2P models around the globe. We also look at the advantages of P2P lending for businesses and the opportunities available for credit unions looking to adopt similar concepts into their business model. 

What are the credit union implications?

The Filene Research Institute sees the P2P phenomenon as a trend credit unions need to be aware of, as both challenge and opportunity. In this special report, we examine the potential impact of P2P lending and suggests ideas for credit unions to take advantage of the trend in its formative stages.