Researchmoz added Most up-to-date research on "P2P Lending: Responding to Disruption" to its huge collection of research reports.
P2P platforms have grown exponentially in the last couple of years. Their superior customer experience, speed, and ultimately cost of credit have allowed P2P lending platforms to compete for banks' customer bases directly. P2P lending platforms are not attempting to serve a previously underserved segment of the market, but lucrative creditworthy borrowers. Alternative credit risk models are a key competitive advantage for P2P lending platforms, enabling cheaper cost of credit through more accurate default risk assessment. The more customers P2P lending platforms acquire, the more refined their credit risk models become and consequently the cheaper the cost of credit.
P2P lending platforms have a 400-425 basis point advantage over traditional banks in loan origination.
Retention of customers who have used a P2P platform before is high, with 75% saying they would approach one again when seeking a loan.
Fractional lending and alternative credit risk assessments allow platforms to reduce exposure to default and asses risk more accurately than banks.
The domination of institutional investors does pose a risk to the sustainability of some P2P platforms.
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