The financial crisis of 2008 resulted in a loss of public confidence in traditional financial intermediaries like banks. People sought alternative business models to serve consumers’ interests and create a fair financial system. Players driven by digital technologies started to emerge in the credit sector, including peer-topeer (P2P) lenders. These companies operate technology platforms that connect lenders and borrowers, directly facilitating loan deals and disintermediating banks from the process. Since its origination, this subsector has experienced exponential growth and become a meaningful force in the industry and growing field of literature. However, scholars have not compared these new players to traditional banks to determine whether they facilitate an efficient lending process. I aim to investigate how the digital platforms used by P2P lenders affect underlying transaction costs resulting from information asymmetries in the credit market. To this end, a conceptual framework was developed with a focus on four key aspects: provision of liquidity, transformation of risk, diversification of investment and level of agency. Case studies of two UK P2P lending platforms, Zopa and Relendex, were analysed using the framework. The findings show that P2P lenders are superior to banks with regards to reducing transaction costs in three of the four key areas. Therefore, these new intermediaries do indeed promote the efficiency of the credit market by disintermediating the banking system.