One of the potentially most disruptive technologies to emerge in 2005 is Zopa, the peer to peer banking web site.

Traditional banks have been around for hundreds of years and weather they operate solely from the Internet or from branches, they follow the same basic principles, the most important one of being the diversification of risk.

A bank borrows money from the public and lends it to those who need it, making a profit from the difference in interest. Because it has so many lenders and borrowers, it has its eggs in more than one basket.

Zopa’s plan is simple: Allow the general public to diversify the risk of lending money without the middle man.

Zopa allows users to put money up for a loan, which is spread between at least fifty borrowers and vice versa. This is all done with a transparent interest fee of 1%.

What is more, they seem to “get” many aspects of the Internet. They run a friendly, informal blog and their site is friendly, usable and intuitive.

The Guardian recently ran a piece on Zopa, which is an interesting read.

This entry was posted on Friday, January 27th, 2006 at 8:40 am and is filed under Business, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.