A new survey from professional services and auditing giant KPMG has described peer-to-peer lender platforms as “the major disrupter to the personal/consumer market.”

KPMG’s New Zealand-based financial services spokesman, John Kensington, explained that peer-to-peer lenders were demonstrating remarkable agility and innovation, with increasing numbers of them venturing into other markets such as vehicle and equipment finance and property lending.

These platforms, he said, were distinguished by the efficiency and sharpness of their distribution models, their agility and the simple fact that they provided borrowing options for individuals and SMEs at precisely the time when the banks began closing credit for these customers down. They were, he said, using online platforms to reduce borrowing costs and deliver speedily.

As online entities, peer-to-peer lenders operating within the rapidly rising alternative finance space eliminate the costs of running physical branches, and they are not encumbered by often outdated legacy IT systems (like the banks). These factors enable them to administer short loans for individuals and SMEs at far lower cost than the banks.

London-headquartered P2P platform Unbolted, for example, uniquely offers secured asset loans: unlike virtually all its competitors, it never subjects its borrowers to credit searches. Instead, it collateralises a high value possession or asset owned by the customer as security for the loan.

From the outset, customers are aware that their asset, which is securely stored by Unbolted for the duration of the loan, will be sold at auction if they are unable to settle at the end of the term (usually six months).