Big Banks Will Buy Small Lenders, Says Deloitte

The marketplace lending industry is likely to see more consolidation. It will be driven by normal credit changes, interest rate changes, and technological improvements such as artificial intelligence, the blockchain and machine learning.

In a study, Deloitte reported that the financial industry is ready for a shakeout and over the next five years, blockchain technology, collaborative ecosystems and cryptocurrencies will become ubiquitous.

For marketplace lending specifically, Deloitte predicts that big banks will start to acquire these lenders or partner with them.

“First, a few marketplace lenders with scale will survive, acquiring smaller rivals and securing joint ventures with big banks and partnerships with small banks; second, big banks will acquire marketplace lenders and other technology/data ecosystem players, replacing or strengthening many aspects of their banking operations; and third, some MPLs will choose to provide white-label services to banks,” said Deloitte in the report.

It also predicts machines to take over most processes of the security trade cycle. But however it added that the role of “human insight will become even more important in serving clients.”