Do new models suffer for their transparency?

I was fascinated to see the press release today from uSwitch which stated that 84% of consumers do not want to invest their money with a peer-to-peer lender - not because of the 39% who are worried about the lack of FCA regulation or the 49% who say it's because they don't know enough about them; nor even the 9% who don't want to use an online platform. What fascinated me was the 25% who don't want to lend money if they don't know where it's going.

I wonder what these people think happens to their money when they stick it in a bank, except that it gets lent out to someone else - probably multiple times, rather than just the once. I think that leverage was 25x for some banks just ahead of the 2008 crisis, wasn't it?

Yes, yes... I realise that there is a Financial Services Compensation Scheme which bails people out if their bank goes under and they lose money. But my point is that people didn't answer the question with, "I would be concerned about the fact that it doesn't fall under the FSCS" (which would anyway allow companies like RateSetter (of which I am a director) to demonstrate how they deal with that risk through their provision fund, and boast how no default has cost any lender  so much as a penny of interest or capital since it launched). Rather, they answered it with, "I don't want to lend my money out if I don't know where it is going".

Yesterday, an organisation called Move Your Money issued a press release calling on people to move their money (clever name, eh? Proper does-what-it-says-on-the-tin stuff) out of banks which "fund climate change". Inadvertently, it made the point that people haven't the first clue what happens to their money when they stick it in the bank. Equally, inadvertently, it made the point that on the whole, no-one gives a monkey's, either.

I'm currently exploring how regulation, which in turn can be influenced by public perception, impacts business models which actually bring transparency to a process that always existed, but in a more opaque form. No prizes for guessing which company is my starting point. But I found today's example of it pretty interesting.

If you have any thoughts on the subject, please either post them in the comments below or drop me an e-mail.