While traditional financial institutions struggle to attract borrowers, the under 30's demographic have flocked to the disruptive market entrants in the fintech space, particularly Peer to Peer ("P2P") lenders. Are they attracted to the perceived flexibility of P2P lending, the buzz of being in a "network" or just rewarding innovation? It seems P2P has gained traction and is a serious force in the financial services marketplace.
Banks with aging borrowers are using peer-to-peer lenders to pick up younger customers needing funds for "life events" such as getting married or buying a car, according to the co-founder of industry pioneer Society One. G&C Mutual Bank is the first of several banks to reveal it is making personal loans via SocietyOne, which was the first P2P lender to start in Australia three years ago. It was followed in November 2014 by UK based RateSetter. They will be joined in early October by another local rival MoneyPlace. Chief executive and co-founder of SocietyOne, Matt Symons, said G&C Mutual, which is a Sydney-based bank with about $700 million in assets on its books, and other credit unions, including the Maritime, Mining, Power Credit Union, have been lending on this platform for close to a year.