Factors affecting continuity in the peer-to-peer lending industry

Due to the effect of high tech on customer relationships in the loans industry, the internet has brought significant changes in the way people borrow money with financial institutions. This study examines those systematic factors that have critical effects on customer satisfaction with firms in the peer-to-peer (P2P) loans industry. Consistent with the findings reported in earlier studies, this research also identified four types of switching costs that affects the P2P lending exercise, namely, procedure, financial, relationship, and risk. Two other factors, continuity and satisfaction, were found to be related to the first four factors. However, the four cost factors were shown to have a negative effect on continuity and satisfaction. In other words, customers will select to remain with a specific platform even when the satisfaction level is low because it is now very costly to switch to another vendor.