The peer-to-peer property industry has grown by leaps and bounds over the past few years. But what do platforms such as ourselves offer to borrowers that they can’t get from high-street banks?
There are a multitude of reasons that could influence a borrower’s decision to go for the ‘alternative lending platform’ (which honestly is becoming more mainstream and less alternative).
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There was a time when all commercial property lending was almost exclusively in the hands of banks, large insurance companies and pension funds, and they made good secure returns quietly lending their investors’ money to borrowers.
How times have changed. Since technology got more sophisticated and a lot cheaper, new lending business models emerged in the form of Peer to Peer (P2P) lenders. This new breed of ‘marketplace lenders’ is now a force to be reckoned with and in the UK alone the P2P market has grown massively since the first platform launched in 2005. In fact approximately £5bn has been lent since then.
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ALTFI EUROPE SUMMIT: Alternative finance providers outmanoeuvring banks
By Michael Lynn CEO, Relendex Limited
The great and good as well as the smaller players of the alternative finance community were gathered for the AltFi Europe Summit in London last Thursday. The vast space was abuzz with talk of challenger banks, mobile banking, Peer to Peer platforms and FinTech activity. It was in fact the sound of new players eating the High Street banks’ lunch.
The peer-to-peer (P2P) industry has seen tremendous growth in the past year that even big players like Goldman Sachs are launching online platforms and RBS has announced that it is setting up an SME lending platform. The dividing lines between conventional banking and the alternative players were beginning to blur. Not all platforms are looking to become a bank however Zopa, the personal loan (and oldest) P2P platform, has announced its intention to become a bank in the near future.
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Last night we attended a well put together seminar where the Alternative Funding Network brought together a panel of experts to offer industry insights. With only a couple of weeks to go till the end of 2016, it made sense to take a look back at what the year has brought for the industry. But of course, life is all about moving forwards so they also provided their thoughts on what 2017 could possibly bring.
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The ‘faceless’ tomorrow of financial services.
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