Renaud Laplanche, founder and chief executive of the Lending Club believes that online marketplaces will be a driving force in the transformation of the banking system and that traditional banks will benefit. But he also believes that there are five myths that need to be dispelled first:
Myth #1: Marketplace Lending Competes with Bank Lending
Myth #2: Marketplace Lending is Unregulated
Myth #3: Marketplaces Use Unproven Underwriting Models
Myth #4: Marketplaces Are Unproven in a Down Cycle
Myth #5: Marketplaces Have No Skin in the Game
The size and success of Lending Club's $1 billion initial public offering last month has fueled a fresh debate as to whether Lending Club and other marketplaces can truly transform the banking industry.