The Peero to Peer Finance Association (P2PFA) Conference took place on Tuesday 25th February at the offices of Pricewaterhouse Coopers(PwC) in London.
The event was attended by The Treasury, the regulators- The Financial Conduct Authority and the Office of Fair Trading, all the main Peer to Peer (P2P) exchanges, industry commentators, policy makers and professionals. Also several European Commercial attachés -all testament to the interest in and the importance of this growing sector where the UK is seen as having the most developed market in Europe.
The P2P sector is rapidly emerging as an alternative to banks for consumer and SME lending, invoice discounting and real estate lending. Neil Bindoff of PwC, spoke of a “perfect storm” supporting P2P’s growth. Interest rates are close to zero, the public is fed up with banks, costs are low (one third of banks), and e-commerce is becoming part of everyday life.
P2P is not fully regulated; that will change on April 1st. The Financial Conduct Authority will issue the new rules imminently. Britain’s P2P industry is awaiting a decision to extend tax-free savings schemes to its lenders.
Topics discussed during the conference included increasing institutional appetite to lend, expansion into new markets (property, residential mortgages and cars), the development of a secondary market on each lending exchange and the return of bank liquidity.
There were discussions with policymakers, regulators and commentators all of whom agree that the sector is poised for huge growth over the next 5 years. There was a ‘Real people/Real experiences’ panel consisting of consumer and business borrowers and lenders, who described their user experience when transacting business through the exchanges. This was generally favourable. There was a strong sense of community and collaboration and the sites were generally efficient and the staff helpful.
Panel members outlined consumer benefits- modern, friendly, innovative, way of enabling borrowers to borrow and lend. Pioneered in 2005, so far UK P2P exchanges have lent £1bn to consumers and businesses. The sector is expected to double in size every 6 months going forward.
