We have seen how the internet has changed a whole range of business sectors — travel, property and media to name just a few.
Quite literally, it has opened up a world of choice to the consumer with suppliers competing for business with ever more flexible, innovative and competitive offerings.
Cutting out the middle man — and the cost savings this can bring — is one such route to the consumer and is finding its way into a range of business areas, including banking.
In the same way as web pioneers undercut the travel companies and made life more flexible for holidaymakers, lenders too have been going direct to the borrower.
A growing concept is “social lending” with an increasing number of websites helping a new wave of savers to break the mould of traditional borrowing and repayment.
One of the leaders in this arena is www.zopa.com , which for the past couple of years has been matching borrowers with lenders and allowing them to choose their own interest rates — usually below those of the banks.
Since its launch, the enterprise has arranged more than £20m in unsecured personal loans in the UK and is preparing to launch in Japan, its fourth country after Italy and the US since its launch in the UK.
The site carries out the same credit checks on borrowers that they would normally undergo with a bank or mortgage company.
As an additional safeguard, loans are limited to £15,000. Lenders’ money is also divided between a large number of borrowers to minimise risk.
Some of the people behind Zopa were involved in setting up Egg ( www.egg.com ), one of the first internet banks. But Zopa is not the only company involved in social lending.
The American site Prosper ( www.prosper.com ) offers a similar service. But it has an interesting twist on the concept.
People advertise their reason for wanting the money (such as college fees or getting married) and others offer “bids” on how much they are prepared to lend.
The web is also making inroads into the vast currency exchange market. Tired of losing money when you change sterling to euros and then losing more when you change it back again?
Then you may be interested in the leading peer-to-peer currency exchange www.fxaworld.com .
The testimonials on the site include one from a UK resident who says he was able to buy his family a restaurant meal with the money he saved compared with more traditional currency trading.
But the innovations don’t stop there. One site is giving people the chance to lend money to people in the developing world to help them start businesses and work their way out of poverty.
Kiva ( www.kiva.org ) uses a similar technique to Prosper, highlighting the businesses that need money and inviting people to finance them.
There is a fascinating video on the New York Times site showing how one man who became involved in this kind of lending went to visit the recipient of his money in the Afghan capital, Kabul.
The Kiva site also tells the stories of lenders. One man from California says he spends all day looking at a computer screen in an office and wanted to do something that was going to make a difference to the world.
So is social lending the next big thing? Or is it merely a flash in the pan?
Several factors lead me to the former conclusion. In the wake of tightening credit conditions, these enterprises have reported record number of people approaching to borrow money.
Notably the enterprise has primarily been driven by the ‘Net Generation’, young people and high net worth individuals, who are comfortable interacting in social networks and are attracted to the altruistic aspect of peer-to-peer lending.
And research indicates longevity. A survey commissioned by the Social Futures Observatory ( www.socialfuturesobservatory.co.uk ) indicated that three out of four people would be prepared to borrow in this way.
A recent report by research company Gartner ( www.gartner.com ) showed that social lending will account for 10 per cent of the personal loan market by 2010. In addition, these loans can be paid off early with no penalty.
The idea also has the indefinable extra ingredient offered by the web. When Pierre Omidyar said he was going to set up an online auction site and call it eBay ( www.ebay.com ), people probably told him it would never work.