Social lending will take 10% of loans market in two years – Gartner

James Gardner’s Bankervision (an incredible read whether you are interested in financial services or not) carries a link to a shocking report:

Over at Technology and Finance, Tom Groenfeldt reports that Gartner is forecasting that in two years, ten percent of all retail lending and financial advice services will go to social banking applications.

Now James calls that prediction “aggressive” – and he’s better placed to judge that than I – but what an incredible thought nonetheless…

Imagine ten percent of your market disappearing in a few years to social marketplace… Of course it’s happened (and then some) already for music, news, classified ads, movies etc – but there’s something thrilling about seeing the forces of change stirred up by the social web reaching the personal finance sector. (Or is that just me?)

Looking at the “eBay for loans” that is Zopa, the idea is working. Really working. I have put a small amount of money into play as a lender

I would say that the conditions are right for this to happen in the UK faster than many might think. You see, we think of “the mainstream” in many markets, especially financial services, in a prejudiced, old media kind of a way. It’s habit.

But the mainstream for financial services in the UK has a massive, online-savvy, activist core. It’s called MoneySavingExpert.com.

Over the past couple of years MSE’s forum has grown massively and it now has over 283,000 active members, making it one of the most significant communities in the UK, and certainly the pre-eminent consumer finance community.

The email newsletter put together by the editorial team reaches a million people and the MSE website says it gets over 4 million visitors a month. This community was a major force – if not the prime mover in my opinion – in bringing the bank charges issue to the fore in the UK: an incredible demonstration of the power of online networks to out manoeuvre vested interests and corporations.

Zopa’s already been discussed on the site’s editorial and blog sections and is recommended as an alternative for people earning over £25,000 in MSE’s advice on loans:

If Zopa’s ‘uniqueness’ worries you, I wouldn’t be. It’s unsecured lending; you get the money and need to pay it back. If you were looking at ‘lending’ to Zopa, it’d be a whole different kettle of fish requiring some risk analysis, but borrowing from it is pretty straightforward really!

There are also 285 mentions of Zopa in the forums – sometimes people mention investing in it as part of their savings plan.

I think that it is here that we will see the momentum building that gives Zopa and similar providers the tipping point into the mainstream… What comes next? Well insurance and mortgages look like good candidates….