Uber. Airbnb. Etsy. What do all of these companies have in common? In addition to offering ways for people to make a little bit of extra income on a part-time basis (sound like another company you know of?), they allow for more efficient transactions by removing the middleman.
For example, instead of having your call routed through a livery service, needing to contact a rental agency, or having to visit a retailer offering handmade crafts, you are able to deal directly with the entity that is providing you with the service in all of the above instances. This phenomenon is also commonly known as disintermediation.
It seems that “disintermediated” companies are beginning to infiltrate the world of finance. Personally, it seems that this sector is perfect for this kind of innovation, as banks typically make a decent profit off of transaction fees, amongst other things.
Additionally, consumers are becoming more and more disillusioned with the banking industry, especially the younger generation. In one poll, 7 out of 10 young people said they would rather go to the dentist than listen to what banks have to say. Not only this, but some sources estimate that the alternative lending industry is potentially worth a trillion dollars.