The Rise of Peer-to-Peer Lending

Last week, I spoke on a panel about data and technology at LendIt USA 2015. As we began, our moderator asked the audience, "By a show of hands, how many people are using tech or data from any of the five companies on stage?" Not one person raised their hands. I immediately fired my VP of Sales.

I jest.

What did occur to me was that one of the major themes of this conference was peer-to-peer lending and that most of the audience worked for or owned these types of companies. This is an area that is blowing up fast and it was obvious from the discussion and reaction of the audience that there is still so much to figure out.

What is peer-to-peer lending, anyway? Peer-to-peer lending, commonly abbreviated as P2PL, is the practice of lending money to unrelated individuals, or "peers," without going through a traditional financial intermediary such as a bank or other traditional financial institution. This lending takes place online through these websites using various different lending platforms and credit checking tools.

A great example of this in real estate would be one of our partners and Startup Wars participants, Patch of Land. They market themselves as a Peer-to-Real-Estate platform whereby an individual can either invest in a real estate project or seek funding for one. It's an awesome model, but a new one. I think about when online trading came to market and the local bus driver could just log on and buy some Yahoo stocks before his daily route. The issue that quickly plagued this awesome idea was lack of access to data, knowledge and decision support. The bus driver lost money. Today is much different world. Today data platforms like Onboard Simplicity help solve this problem of access.

In my introduction of Onboard, I said that we started as a real estate data company because we saw an opportunity in the market as technology advanced in real estate and home buying moved online. Today, we continue to try and stay ahead of the next trend, which in part seems to revolve around this idea of transparency.

On last week's panel the word transparency got tossed around a lot. In principle, that is great. But in a world where more and more data is available, it's still very fragmented. The process of bringing data all together is arduous, at best.

I argued last week that even beyond the transparency, the future was in the access to all of this data. Access in a way that is consumable, digestible and that can be transposed into information like Patch of Land offers its potential investors. Customers of Patch of Land can now perform a good amount of due diligence on a property, area, school or anything else that may correlate with their potential risk and/or upside.

Peer-to-peer needs the power of data and knowledge to fuel its growth long-term to avoid potential lawsuits and loss of confidence. I love watching movements like this unfold; I love it even more when Onboard fits right into the fold.

To view the original article, visit the Onboard Informatics blog.