VentureBeat: Prosper vs. Zopa: “Streamline” vs. “Rigor”
Tom F
· 3 years ago
Both of these sites have huge flaws which no one seems to be talking about.
By requiring users to enter "social security number, your bank account, your income level and your drivers license" there are huge privacy, security and compliance issues.
First, I hope few people are brave enough to hand over all that sensitive information. Some immediate questions: how secure are their systems, do their employee receive rigorous ongoing background checks? The risk of identity theft is huge here. With SSN and account numbers it really isn't difficult for a criminal of middling intelligence to drain your bank account.
Second, by providing financial services, these new companies should fall under the Gramm-Leach-Bliley Act, which requires rigorous compliance and high levels of privacy, reporting and security. I wonder if they are complying or not. I hope any investors in these companies are thinking about these issues. They are the highest risk facing these startups.
pwb
· 3 years ago
I suspect these two companies are very sensitive to privacy and regulatory issues so let's move on and discuss the business potential.
Julie Meyer
· 3 years ago
I am based in London, England, and ZOPA is a phenomenon over here. My understand is that Prosper has just launched so they'll go through their first year's "teething" issues. Meanwhile, ZOPA is a maturing service which has significantly iterated and refined the value proposition to lenders and borrowers. They are phenomenally well funded by Bessemer and Benchmark, and Richard Duvall, the founder of Egg, is the leading consumer financial services entrepreneur in the world.
Julie Meyer, CEO of Ariadne Capital and Founder of First Tuesday
Alison Chaiken
· 3 years ago
What no one has commented is the similarity of Prosper and Zopa to the microfinance pioneered by the Grameen Bank in Bangladesh. See http://www.grameen-info.org/bank/WhatisMicrocredit.htm to read more about how Grameen works. Grameen founder Mohammed Yunus' principal insight was in the importance of peer pressure and groups for loan repayment. He also saw the importance of loans for tiny amounts and the need of non-traditional buyers. Prosper at least appears to be inspired in part by Grameen. That the founders of these start-ups have taken an idea from a desi NGO as an inspiration for their profit-making companies is fascinating.
Anshu Sharma
· 3 years ago
From my perspective, Prosper is a true blue "Web 2.0 Business". There are many Web 2.0 sites and utilities being built today in the valley and elsewhere. However, there are very few new business models being tried out. Web 1.0 had Ebay, Amazon and other innovative businesses. So far, Prosper is a lead candidate for the Business 2.0. You can read more about this on my blog by clicking on my name.
All Comments
By requiring users to enter "social security number, your bank account, your income level and your drivers license" there are huge privacy, security and compliance issues.
First, I hope few people are brave enough to hand over all that sensitive information. Some immediate questions: how secure are their systems, do their employee receive rigorous ongoing background checks? The risk of identity theft is huge here. With SSN and account numbers it really isn't difficult for a criminal of middling intelligence to drain your bank account.
Second, by providing financial services, these new companies should fall under the Gramm-Leach-Bliley Act, which requires rigorous compliance and high levels of privacy, reporting and security. I wonder if they are complying or not. I hope any investors in these companies are thinking about these issues. They are the highest risk facing these startups.
Julie Meyer, CEO of Ariadne Capital and Founder of First Tuesday
to read more about how Grameen works. Grameen founder Mohammed Yunus' principal insight was in the importance of peer pressure and groups for loan repayment. He also saw the importance of loans for tiny amounts and the need of non-traditional buyers. Prosper at least appears to be inspired in part by Grameen. That the founders of these start-ups have taken an idea from a desi NGO as an inspiration for their profit-making companies is fascinating.