Marketplace lenders are chewing away at two important domains of incumbent banks: lending and investing. These challengers, also called shadow banks, are defined as non-banking institutes who are in the lending business providing similar services to traditional banks. What makes them distinct is that most of them try to stay away from regulators, leverage technology, and have a superior customer experience provided at lower cost. On the other hand, none of these marketplaces have experienced a full credit cycle yet. Should banks be worried? The answer is yes!