Illustration: Sturt Krygsman Source: Supplied
Forget the term peer-to-peer lending, the new buzzword is marketplace lending — and Australia will be a global leader and a key player, according to a recent Morgan Stanley report on the industry.
The report says by 2020 there will be $10.4 billion in loans outstanding in Australia.
The reasons why it is so bullish locally are more to do with Australia’s technological capacity and preparedness to adopt new technology rather than anything fundamentally wrong with the Australian banks. Marketplace lending encompasses all of the forms of peer-to-peer lending on various platforms.
Society One, Thin Cats and RateSetter are the early adopters of peer-to-peer lending in Australia, which is a market tipped to grow quickly.
The report forecast $10.9bn in so-called marketplace loans in Australia by 2020. But this could quickly grow in a global marketplace of $590bn.
The 18- to 34-year age group was the key to early adoption in the Australian market, according to the report.
This is important for the mainstream industry because it shows use of technology rather than any fundamental flaws with the existing industry.
What it does show is that industry must adapt to the new technology or be left behind.
This lesson is well and truly understood by the Australian bank leaders. The marketplace was quickly changing, with the US and China to lead the way with new marketplace lending.
Whether those numbers are almost by definition higher in those markets, Australia would be close behind.
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