P2P marketplaces predicted to expand into new assets and adopt AI

European peer-to-peer lending marketplaces will expand into new asset classes and adopt artificial intelligence (AI), as they continue to disrupt the traditional investment industry, it has been predicted.

Swaper, the Estonia-headquartered P2P lending marketplace, has said that “P2P marketplaces are poised to transform how people allocate their funds”.

It predicted that the sector will expand into new asset classes as it continues to grow.

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“Currently, most P2P marketplaces focus on consumer and small business loans,” the firm said in a blog post on its website. “However, as the market size continues to grow there is potential to improve the current focus or for expansion into new asset classes such as real estate, art, and commodities. This will provide customers with a wider range of options where to invest their money, diversifying their portfolios and reducing risk.”

Swaper also highlighted the potential in AI to transform the industry. It said that the technology could improve the matching process between loan originators and customers, reducing the risk of default and increasing returns for customers.

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Swaper’s predictions come after Robo.cash said that the continued uptake of AI among European P2P lending platforms could bring an additional €400m (£354m) into the market.

Additionally, Swaper predicted increased regulation of the sector, which has already been seen in the UK.

“As P2P marketplaces become more mainstream, there will be an increasing need for regulation,” it said. “The regulatory environment for P2P marketplaces is still evolving, but it is expected to become more stringent in the coming years. This will help to weed out fraudulent platforms and ensure the safety of customer funds.”

Swaper said that P2P marketplaces are “poised to revolutionise the way people generate returns on their money”, shifting the power from large traditional financial institutions to individual customers.

“However, as with any disruptive technology, ahead lie challenges and regulatory issues to overcome,” it added. “Nonetheless, the future of P2P marketplaces looks very bright. And it will be exciting to see how they continue to evolve and reshape the investment landscape.”