49 Chapter V Summary and Conclusion V.1 Summary The rapid growth of peer-to-peer (P2P) lending has become a newer innovative financial service provider compared to the commercial banks. This situation pushed the banking industry to understand its market positioning. Is P2P lending have a negative effect on a bank’s performance. Based in consumer theory and disruptive innovation theory, it is explained that newer innovative providers (in this study is P2P lending) that fulfil customers demand could replace the old traditional providers (in this study is commercial bank). Moreover, there are two perspective on explaining the competition among banks, fragile-competition and stability-competition. By adopting these two perspective to understand the effect of P2P lending existence on bank’s profitability and stability, this research studied 98 commercial banks in Indonesia from December 2018 to July 2020. Using fixed-effect panel data regression, this study found that P2P existence decreases bank profitability and stability. The result is confirmed through three additional approaches to conclude that P2P lending’s loan disbursed and total assets gave a positive significant effect on LLP and a negative significant effect on the bank’s ROA, ROE, and ZSCORE. V.2 Conclusion and Practical Implication to Relevant Stakeholder In this study’s beginning, this research explains how the previous literature involved consumer theory, disruptive innovation theory, and the two perspective of competition theory, fragility-competition and stability-competition. The result of this study complete the empirical view for this theories. This research found that banking performance is decreasing due to the appearance of the new innovative financial service provider that negatively affect bank performance. Similarly, the result of bank’s stability shows declining trend. It is due to tighter competition that makes the bank accepts more risky loan-borrower as P2P lending appeared to be the new innovative financial service provider in the market. 50 Due to the unfavorable outcome of relationship on a bank’s profitability and stability, various stakeholders should consider this outcome. Firstly, the bank itself should be aware of this new innovative financial service provider. The banks could improve themselves by creating innovative development of products and services. Learning from the fintech ease of use, a few banks have adopted the technology to create digital banking with similar simple usage. Besides the banks, regulators must also keep up with the P2P lending update. Due to its rapid growth, regulators must ensure that P2P lending can be supervised to assure customer convenience, especially customer safety. Lastly, investors can also see the stance of P2P lending and banking in the credit market.