LEHI — Spiraling consumer debt is helping drive a blossoming financial technology sector that has led to dozens of new, online business models that are looking to disrupt traditional banking institutions.
But in 2007, the idea of creating an online personal loan marketplace that connected borrowers in need with investors looking for a little return on their cash was a novel concept.
Now, peer-to-peer business models are commonplace, but Lending Club was among the first to see an opportunity to disrupt some of the staid practices of traditional banking. As the company’s founder pointed out early on, there was a lot of room for carving out a profitable business within a traditional banking system that was paying out next to nothing in savings account interest while charging upward of 20% when loaning out the same money.
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