Zopa, (how the internet is deconstructing consumer finance)

You may have heard of Zopa, a lead gen company in the consumer finance industry. They just announced that they would close their US operations because of the lack of access to credit in the US (where they had deals with 6 credit union).

Companies are born and die every day but in the case of Zopa, they will keep on operating in Italy and in the UK where their model is a P2P model rather than a lead gen.

I find this interesting for several reasons:

• It seems that in the current market environment people are more reliable than banks when doing the very job banks are supposed to do: using the extra cash of someone to finance the needs of someone else.

• It also shows that European markets, including southern ones, are ripe for consumer finance over the internet.

• And, more importantly, that something fundamentally new is happening in consumer finance: Until now, intermediaries always depended on lenders to monetize their access to consumers. This is already no longer the case for less sophisticated products (such as consumer credit).

More than ever, gaining consumer reach and trust is where the value is.