Is Lending Club transforming banking?

The marketplace lender just had one of its best quarters ever, and CEO Renaud Laplanche was rightly proud on Thursday’s earnings call. But is Lending Club really succeeding in its mission to “profoundly transform the banking system” when 25% of its loans are funded by banks?

Perhaps it is, but not the way SoFi CEO Mike Cagney speaks about replacing banks. Instead, Lending Club is working within the system, using banks to fund its loans, but extending credit where banks might fear to tread, and improving the experience in the bargain.

Lending Club reached 1.4 million customers in 2015, Laplanche said, and $8.4 billion in loans. The average loan size was approximately $6,000. Investors earned a net return of 7.8%. Revenue for the quarter came in at $135.5 million, beating analyst estimates of $130 million. Higher loan origination volume fueled the good results.

To be sure, considerable headwinds exist. Customer acquisition costs continue to climb, and marketing expenses doubled to $53.5 million in 2015. Rising interest rates will also pose challenges. But overall, Lending Club has shown it can make money and will not be withering away any time soon. Bankrate recently noted 24 million Americans are expected to take out a personal loan in the next 12 months. Credit card debt isn’t going away, and loans like those offered by Lending Club are often less expensive to repay.

Further, Lending Club will be “entering into a new major consumer credit category in the first half of this year,” Laplanche said, also mentioning auto loans and student loans as possible items on the roadmap. “The plan is really to cover all credit needs of a bank.”

But banks will play a part, issuing the credit cards that are the raison d’etre of Lending Club, and funding many of the loans. It’s not clear where Lending Club will end up, but it will be as part of the banking system and not, as SoFi positions itself, as its destroyer.