Bruce Davis: Election result is a boost for democratic finance
Bruce Davis (pictured), director of the UK Crowdfunding Association and co-founder of Abundance and Zopa, argues that the election result is good news for P2P
Whatever your politics, peer-to-peer and crowdfunding should celebrate the win for democracy last Thursday.
Feels good doesn’t it? Realising you have the power to make change happen. Millions of voters have woken up to the fact that their individual vote matters on the national stage. This is not a new idea for the P2P and crowdfunding sector; we have long advocated the benefits of a more transparent and democratic financial system. Now the idea of taking control of your politics (through your vote or through your money) is something that has finally got through to the mainstream voter and investor.
Alternative finance has many labels – crowdfunding, P2P, marketplace lending – but what binds us is a belief in the benefits of giving people control over their money and how it is donated, lent or invested. It is no accident that we characterise this movement as ‘democratic finance’. How you decide to use your money has the potential to affect the economy and society you see around you almost as much as your vote in the ballot box.
The UK Crowdfunding Association was formed to give a diverse and emergent industry a voice to government, the regulator and the market. We believe that alternative finance is changing the UK’s finance system for the good by creating robust and compelling alternatives to the empty slogans, poor service and moribund interest rates of the establishment finance institutions. We have worked hard (and will continue to work hard) with those in policy and regulation to make sure that the sector is not pushed backwards towards the models of the past but instead continues to grow and innovate the models of the future; a future where the balance of power over our money shifts from the technocratic to the democratic. We hope that the Financial Conduct Authority’s review of the sector will build on the success of the past and continue the pace of innovation that we need to respond to the ever-changing economic and social challenges and opportunities we face.
We welcome the progress made to complete the transition of the P2P sector to full authorisation, alongside the investment crowdfunders that will give new impetus to the groundbreaking Innovative Finance ISA.
Looking back since our launch the sector has come a long way. We no longer measure success in the millions but in the billions. We are more mature businesses, many with aspirations to take our models to new markets overseas as well as extend our reach into the mainstream of the UK market. The rest of the finance industry are waking up to us as representing more than a ‘fintech’ revolution, but something more fundamental, a change in the relationship people have with their money and an opening of minds to the real public value which can be created by adopting the principles which have driven the development of ‘alternative finance’.
This week the UKCFA is holding its annual general meeting, with directors being voted in for the coming year and members (who are all people who run platforms themselves) able to give their views and inputs into the shape and scope of the organisation. We see challenges ahead in the form of the Brexit negotiations but we also see the opportunity to build a financial system for the UK that is more diverse, resilient and democratic. Our sector is seen as the world’s leading example of what can be achieved if you give people more control over their money. We will continue to push that message out to all who need to hear and understand it, to make sure we maintain that leadership over the coming years.