[Editor’s note: This is a white paper from Deloitte. Deloitte is a Gold Sponsor at LendIt USA 2016, which will take place on April 11-12, 2016, in San Francisco.]
Let’s get this straight upfront: Marketplace lenders have already disrupted the lending industry. Whether or not this disruption will lead to bank disintermediation is a topic for debate, but we at Deloitte think not. Instead, we expect a growing convergence of banks and marketplace lenders. In this paper, we discuss how this future is already foreshadowed in every phase of the current marketplace lending lifecycle, including funding, originations, underwriting, servicing, and securitization.
In every phase of this lifecycle, marketplace lending has seen exceptional maturity. Although the industry is only a decade old in the United States, and having had to effectively restart after the global financial crisis, originations alone have grown by a compound annual growth rate of over 75 percent since 2010. This brisk development has created tremendous buzz, generating diverse theories on the future of this neophyte industry. Some say marketplace lenders are going to disintermediate banks for good, while others believe marketplace lenders are too small to matter. Then there are those who think marketplace lenders will pose a systemic risk to the economy, and even some who see marketplace lenders saving the financial services sector. In this paper we will put these disparate prognostications into perspective.
Download the full white paper: Marketplace lenders and banks: An inevitable convergence?
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