Prosper and Billguard changing the finance industry
Recently Prosper marketplace, one of the fasted growing tech companies in the U.S., has acquired BillGuard, which is one of the fastest growing finance apps in the U.S. Both companies are disturbing the traditional banking industry by peer-2-peer lending and by revolutionizing personal finance management services (Sawers, 2015). This acquisition intrigues me because interesting future developments can evolve from it.
First, let’s briefly get to know Prosper marketplace. The company is market leader in the peer-to-peer lending industry and provides cheap loans and good returns on investment by cutting out the middle-man (Prosper, 2009). Moreover, lending or borrowing money through Prosper is a significantly faster process than the usual processes in banks, which include a lot of wait times. More specifically, the ability to require online, day or night, investment or loans provides excellent customer services (Prosper, 2009). More so, the safety application and the risk assessment tools are painting a thorough understanding of the project investing in (Prosper, 2009). This has resulted in issuing over $2.5 billion in personal loans in the U.S. over the past six years (Prosper, 2009).
Billguard is also disrupting the traditional finance industry, not by providing an investment platform but by enabling customers to manage their personal finances. Yaron Samid and Raphael Ouzan founded the company in 2010 after having determined the need for more transparency in unauthorized credit card charges (Billguard, 2009). BillGuard is a free service that harnesses our collective vigilance to protect everyone from hidden charges, billing errors, misleading subscriptions, scams and fraud (Sawers, 2015). More specifically, the crowdsourcing application allows users to ‘flag’ false charges, which will be distributed throughout the community, providing valuable information about ghost-chargers. It is estimated that the average consumer is wrongfully charged for $300 a year of which they have no knowledge that could have easily been avoided by using Billguard. The company has currently over 1.3 million registered users, which have generated more than $70 million in unauthorized charges over the years (Sawers, 2015).
Acquiring Billguard Prosper enables itself by to provide recommended financial decision-making tools to its current customers. By combining historic data from both platforms and applying big data technologies, Prosper could deliver impressive financial recommendation and provide valuable insight to investors (Sawers, 2015). Moreover, a marketplace lending system and personal finance management has never been combined and has in my opinion the potential to truly empower, protect and educate customers globally.
Billguard, 2009. Company profile. [Online] Available at: https://www.billguard.com/ [Accessed 2015].
Prosper, 2009. Prosper. [Online] Available at: http://www.vbprofiles.com/companies/52ce53ac1dedae2e6b001a5b [Accessed 2015].
Sawers, P., 2015. P2P lending platform Prosper Marketplace acquires personal finance-tracking startup BillGuard for $30M+. [Online] Available at: http://venturebeat.com/2015/09/24/peer-to-peer-lender-prosper-marketplace-acquires-personal-finance-tracking-startup-billguard/ [Accessed 24 September 2015].