"Risk: Deloitte says its research "gives us limited grounds to believe that MPLs will systematically price risk better in areas where banks have an appetite to play."

In other words, banks could exploit the same algorithmic innovations.

By building up specific expertise in areas like, say, asset finance or invoice financing, they can develop an advantage over the banks.Tomlinson of Deloitte says: "In the medium term, however, MPLs are likely to find a series of profitable niches to exploit, such as borrowing which falls outside banks' risk appetite and segments that value speed and convenience enough to pay a premium for example SMEs, particularly in invoice financing, or high-risk retail borrowers .

This has been driven by the competitive prospectus for investors and borrowers offered by peer-to-peer lending platforms unencumbered by the legacy systems and costly infrastructure of banks, combined with excellent levels of customer service.Many of the conclusions in the Deloitte report depend on assumptions which do not reflect the development of peer-to-peer lending to date.

Lord Adair Turner, the banking regulator from 2008 to 2013, said in February that "the losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses.

"More recently, the poster child of online lending in the US, LendingClub, has been engulfed in a scandal over disclosure and minor doctoring of loans that has led to the ousting of its CEO and founder.• Funding Circle's CEO addressed 'the most pertinent question anyone can ask about our industry'• 'This is not the canary down the coal mine': Here's what the industry is saying about LendingClub's crisis• One epic slideshow tells you everything you need to know about the $180 billion world of online lendingNOW WATCH: This is the best Ferrari ever builtLoading video...

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