How can the lending industry be disrupted?
Back in the 1990's U.K., the Alliance and Leicester Building Society sold itself off. It became a publicly traded company seeking profit for its shareholders.
It was one of many mutuals that did the same. A mutual is like a credit union but mostly about providing mortgage lending, the thing is that the organization, the Building Society, is owned by its members.
True disruption, might come from reversing that trend. Why borrow from someone who wants to profit from you, when you can borrow from someone who will share the profit with you?
Co-operatives, Credit Unions, Mutual Building Societies, ought to be thriving in the online and social media environment. I'd be interested to hear about any, because I bet there are some innovative ideas out there.
Undercutting the interest rates is an obvious first step - but a risky one. Most players in the industry, be they mainstream banks, credit unions, "payday loan" usurers, or peer-to-peer things like LendingClub or Prosper, have a pretty good actuarial idea of how much risk they have, and set their interest rates accordingly.
I think there would be some value to something that from the outside looked like a "payday loan" place, but leveraged peer-to-peer lending and required its customers to undergo some basic financial management education - thus lowering its risk and enabling it to offer rates a percent or two lower than the "payday loan" places.