An overview of Social-lending and the challenges to traditional banks.

1. Social-lending
“Loans for everyone”

2. Web 2.0
“Web 2.0 is the business
revolution in the computer
industry caused by the
move to the Internet as a
platform, and an attempt to
understand the rules for
success on that new
platform.” Tim O’Reilly
Interaction
Technology Styles
Change
Solutions

3. • Share
http://www.flickr.com/photos/asbjorn_floden/2507182385/
• Shop
http://www.flickr.com/photos/thomashawk/21151707/

4. What is Social-lending
“eBay for Money”
Chris Larson, CEO of Prosper.com

5. Social-lending
• Cuts out the middleman
• Better response times
• More user friendly
• Supports our communities
• Feels good to lend to people
rather than a savings
account
• Delivered in a well known
interface e.g. On-line
auctions
• Fewer costs
– No branch,
– fewer staff
– Less infrastructure (initially)

6. Typical usage of Social-lending
Credit cards
Student loans
Expensive debt
Startups

7. Zopa is currently working with six
credit unions, including Forum Credit
Union of Fishers, Ind., and USA
Federal Credit Union of San Diego
Doug True, SVP of Forum Credit Union of
Fishers, says Zopa's merging of financial
services and social networking quot;is a great way
to reach the younger generationquot;
http://blog.zopa.com/archives/2006/11/23/330-of-fame/

8. http://www.cbsnews.com/sections/i_video/main50021.shtml?id=3959487

9. “With money from family and friends, you can pick your
own interest rate and loan terms to fit your situation. Rather
than giving interest to a bank, you can keep it in the family
– often adding up to thousands of dollars of savings”

10. LendingClub and Facebook

11. “small businesses may find PayPal cheaper and easier to use
than getting a credit card account”

13. Social-lending Roadmap
Beta 2008 (New Zealand)
Feb 2008
Oct 2007
(CircleLending)
May 2007
Feb 2008 (Australia)
2005
End 2007
(Australia)
2007
Feb 1983
2006
Oct 2005
MicroCredit Feb 2005
Marshall plan 1945
13

14. Gartner
Feb 2008 for 2011
“Social-banking platforms will capture 10% of
the market for retail lending and financial
planning.”
“10 percent of banks’ revenue from retail
payments will be supported by competitors
such as PayPal.”
“U.S. banks will start shutting down their
full-service mobile-banking channels.”
“Centralized retail core banking applications
will cease to exist in at least 20 percent of
banks worldwide.”
competition change restructure

15. Traditional banks
need to consider
how they service
• Student loans
• Credit card
consolidation
• Business startup
• Small loans
• Agricultural funding
• Home loans

16. What happens
if?
Loans from…

17. Undercut the
competition?
Offer a similar
service?
Buy Vs Build?

18. Can I help?
Chris Sparshott
(Sparkbouy)
chris@chrissparshott.com
Portfolio
http://www.slideshare.net/sparkbouy/slideshows
Blog
http://chrissparshott.com
IBM
chris_sparshott@nz.ibm.com