Traditional banks need to adapt to keep up with this new, nimble market – and fast. In a market where a small difference to an interest rate can make all the difference in attracting a good customer’s business, banks that don’t push ahead with technological advancements in the way that newer challengers are could really begin to suffer.One in five credit analysts said P2P posed a “big threat” to banks, but more than half welcomed this development. Read more: P2P is transforming business lending – here's how The new lending methods cropping up are not without risks, however, as 73 per cent of those surveyed said they were worried the methods used to decide who to lend to and how much are dangerous. A quarter of those surveyed were also concerned alternative lenders are too relaxed on lending controls, or that they circumvent regulations. Of course, the rise of P2P lenders is all good news for consumers looking for loans. But it may also be good news for the market overall, as competition drives FinTech innovation.
Greater competition will encourage innovation in areas such as personalising interest rates for customers.