This week the former Treasury Secretary delivered the keynote address at LendIt. During the conference he acknowledged that he expects online lenders to eventually capture 70% of the market share in small business lending. He also provided his own view on how banking as a whole will be disrupted by technology stating that “technology based businesses have the opportunity to transform finance over the next generation..."
... Finance has innovated, but the benefits of these innovations have gone to large capital holders and not society more broadly. With online lending, Summers argued, the information available the information made available makes it easier for borrowers and lenders to make good decisions and will drive up profits for lenders and costs down for borrowers, all the while extending credit to small businesses that banks can’t afford to consider lending to because they have less information at their disposal and higher cost structures. It’s this logic that leads Summers to believe that online lenders could eventually capture upwards of 70% of the market share in small business lending, and why a Wall Street bigwig like Jamie Dimon said in a recent letter to shareholders that “Silicon Valley is coming” after the banking industry.