The Internet, Crowdfunding and the Banking Industry
This chapter discusses some issues at the crossroads between the Internet and banking. It focuses on the impact of the Internet on the banking industry. As the topic is still very broad and the available space limited, only a selected number of more specific themes are covered. The section "The Internet, Network Effects and the Horizontalization of Organizations" discusses network effects and the horizontalization of established organizations and communications that arise from the Internet and social media, and how such horizontalization may ultimately affect market structure. The section "Loan Based Crowdfunding, Peer to Peer Lending and the Banking Industry" covers the main theme of the chapter, namely loan based crowdfunding and peer to peer lending. This new form of corporate finance for smaller businesses is likely to affect banks' core activities in several ways, some of which have already been studied in recent years. The section "Further Issues" discusses a few other topics related to the Internet and the banking industry that have attracted attention among researchers and for which data have become available. "Concluding Remarks" draws the chapter to a close.