Attack of the killer bugs: P2P lenders are investing in IT to stay ahead
ROBUST technology is more important than ever, say peer-to-peer lending platforms, as they invest in their systems to maintain their advantage over traditional financial services players.
A number of firms are developing new technologies in order to improve their customer service, but most admit that the occasional glitch is an inevitable risk for a fintech firm.
“Technology is very important – we invest in our system all the time,” a spokesperson from Collateral told Peer-to-Peer Finance News.
“I think occasional bugs are inevitable as the website’s coding changes, but as soon as it happens our development team is responsive.”
Last year, the asset-backed P2P lender experienced an IT issue regarding its data storage, which had a significant impact on the platform.
“The only major issue we’ve had was to do with faulty random access memory (RAM) on one of our servers,” said the spokesperson.
“It only got corrected when we upgraded our server. The problem was due to the host, not us, but it was quite a serious fault that meant the website was down for 12 hours.”
And over the bank holiday weekend at the end of April, the platform experienced an error with its bank NatWest which meant that a small number of investors’ withdrawals were not processed, but the issue was resolved quickly.
Occasional glitches aside, the Collateral spokesperson said that its technology proposition is very reliable and that the platform can now process 26 transactions per second.
Technology is not just important on the investor side of the business. Proplend’s chief executive Brian Bartaby revealed that the platform is planning to develop its proposition for borrowers later this year.
“Tech – or fintech – is to do with the ability to collect and analyse information on both the borrower and the lender side, and distribute that among a group of people,” he said.
“We’ve spent more time working on the lender side of business and now we’re starting to look at how to make the borrower process more efficient, creating a better experience going forward.”
Bartaby said that Proplend has experienced the occasional IT issue in the past, such as a loan part getting sold twice on the secondary market. However, he added that the platform usually catches errors within 24 hours and emphasised the importance of good communication with customers.
“You’ve got to stay on top of things, rather than just rely on your system,” he said. “It’s important that the platform is running smoothly to reinforce trust.”
Several P2P lenders emphasised the importance of responsiveness if an error does occur.
“Robust technology is really important for providing a good service for investors and borrowers,” said Sophie Pearce, business development director at MoneyThing.
“Whenever you’re dealing with technology, there’s always a chance that things can go wrong, but it’s about how you handle it.”
Lendy, formerly known as Saving Stream, experienced an IT glitch recently which stopped new deposits showing up on certain accounts, but emailed investors quickly to inform them of the issue.
“[IT problems] are inevitable to an extent, but there are steps that you have to take to minimise risk and be responsive to clients when they happen,” said a spokesperson from Lendy. “Open and prompt communication is important in that regard.”
The spokesperson added that the platform had been very careful to ensure its growth has been sustainable for its technology.
“You hear about platforms essentially having to ‘rebuild the plane in mid-air’, so to speak, and that tends to come as a result of the underlying tech not being scalable enough,” he said. “We have hit a speed bump or two along the way, but for the most part, our tech has been very solid, and has coped well with a very sharp rise in both investors and loans.”