A RAPIDLY CHANGING MARKETING ENVIRONMENT: NEW ENTRANTS IN THE MARKETPLACE

AM | @MackinlayEuruni

The people who write books about financial marketing will gladly tell you that their sector is undergoing change at a faster rate that anybody else. Maybe it's a marketing strategy after all: buy their books! Having said that, it is true that financial markets are changing fast — on the heels of the financial crisis and relentless technological change. That might well justify statements like these:

. "A unique and highly specialized branch of marketing" (Estelnami);

. "The financial industry operates in a unique way, and its marketing tasks are correspondingly complex" (Ehrlich & Fanelli)

So let's explore some of those sources of change. We begin by taking a look at P2P lending or "social lending" (*). From the Financial Times:

Peer-to-peer lending companies have never been shy about their aims. The majority openly seek to bypass banks and extend loans directly to businesses and individuals, cutting out the complex infrastructure and branch network that underpin more traditional lenders. "When yout think about what a bank does for the masses; it's take deposits and make personal loans", says John Mack (a former Morgan Stanley chairman, now on the board of Lending Club). "You don't need to go to a bank to do that".

For investors and borrowers the attraction of P2P lenders is simple. Because the companies avoid the complexity of normal banks, they can pass on savings to customers — lending money at a lower rate than most credit cards and returning more money to lenders than bank deposits [...]. "Lending Club is helping reinvent the consumer lending industry", said Mary Meeker, the bank analyst dubbed the "queen of the net".

Lending Club, one of the market leaders. See also: Lending Hub.

(*) Tracy Alloway & Ellaine Moore: "Mack moves to cutting edge of P2P lending", Financial Times, April 24, 2012; Tracy Alloway: "Lending Club role for queen of the net", Financial Times, July 7, 2012.
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