The problem of peer-to-peer financial system

There are many peer-to-peer financial platforms currently. However, there are many problems existing in the system. It has very high transaction costs and adverse selection problems. The amount asked by one borrower does not always exactly matches one existing potential lender, which means a lender may split his/her available funds or a borrower may need to ask for loans from several different lenders. This increases the transaction costs. Moreover, traditional banks have experts to analyze their borrowers' credibilities, but individuals may spend huge amount of time and resources on researching one lender. Some individuals may not be willing to spend too many resources on doing research, and borrowers tend to hide information from their potential lenders, then the problem of adverse selection appears. People believe that borrowers who borrow from the peer-to-peer platforms are highly risky, as they are not qualified to borrow from traditional banks. Therefore, I think the peer-to-peer platforms are platforms that offer individuals to buy smaller amount high yield bonds, there is no any magic in it.