Deconstruction in business is when a company starts to outsource parts of its activities to other companies in an effort to increase efficiency and retain only the key processes that maximize its value.
In the case of a brokerage firm for example it may offer you a full service account, but in reality parts of it may be outsourced. The money market may be managed by another mutual fund company, the checking and debit card service by another bank, the securities may be held at a central custody service for the industry, and when you enter trades they might be executed by a third party wholesale broker.
In the same way Prospser.com is involved in the deposit and lending business just like a bank, the difference is it is not a bank. Propser.com gives investors direct access to the borrowers and vice versa.
The way it works is that the company does some of the activities that banks do like analyzing the credit rating of borrowers, providing an account where the money is deposited and withdrawn, and being a place where investors and borrowers go.
The things that Prosper.com doesn’t do are delegated to borrowers and lenders and that is mainly finding each other and deciding to lend and borrow. Investors can browse many borrower profiles and lend to the ones they select and borrowers can post their profile with the amounts and objectives for their loans.
Since Prosper is a thin layer that provides a space and only the key services to enable investors and borrowers to meet and transact their costs are much lower than a traditional bank and thus the rates for lenders and borrowers are much better.
Prosper.com’s business model is called peer to peer lending and to become one by lending or borrowing money in an intelligent and cost effective way visit them below: