The Future of Peer-to-Peer Finance
Zeitschrift für Betriebswirtschaftliche Forschung, August/September 2013, p. 466-487
28 Pages Posted: 20 May 2014
Date Written: May 20, 2012
Peer-to-peer finance has received increasing attention over the last years, not only because of its disruptive nature and its disintermediation of nearly all major banking functions, but also because of its rapid growth and expanding breadth of services. Drivers for this growth are the emergence of the Internet, ongoing innovation by startup companies and increasing financial regulation of traditional banks. Notably, the financial risks stemming from peer-to-peer financial transactions are borne by the participants and span all major financial risk types. The effect of this risk assumption by individuals on economic growth and stability and required regulation will decide over the future of peer-to-peer finance. If it is not desirable, peer-to-peer finance requires a risk management mechanism -- either funded or unfunded. The increasing use of peer-to-peer finance by institutional investors indicates a gradual movement towards funded risk management, transforming peer-to-peer platforms into institution-to-peer platforms.
Keywords: Financial innovation, Disintermediation, Peer-to-peer finance, P2P lending, Peer-to-peer lending, Social lending, Social investing, Crowdfunding
JEL Classification: G21, G28
Suggested Citation: Suggested Citation