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Peer2Peer Finance News | September 20, 2017

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Why wasn’t the spotlight on P2P at Fintech Week 2017?

Why wasn’t the spotlight on P2P at Fintech Week 2017?

Peer-to-peer lending is one of the biggest fintech success stories – so why was the sector under-represented at the recent Fintech Week in London? Debbie Zaman (pictured) founder of the fintech-focused marketing and PR company Withpr, offers her view.

Peer-to-peer lending has risen dramatically, both in visibility and credibility, over the last few years. Once deemed a niche area for toffs and boffs, P2P has taken giant strides into the mainstream and the lives of everyday investors and borrowers. A Research and Markets report from December 2016 suggested that by 2018, P2P lending in the UK could be worth over £5bn, up from less than half a billion in 2013. P2P even has its own place on money comparison websites.

So how come P2P wasn’t the star of the show at the recent Fintech Week event? Zopa was up there but only in its new guise as a challenger bank. Topics from innovations in FX to the use of robo-advisories were covered but P2P was left largely in the dark in comparison.

Thank heavens there are plenty of other places and ways in which P2P will remain, firmly on the agenda in 2017. As the new digital banks try and build scale through simplicity and insurtech takes the first steps to overthrowing an archaic sector, P2P is quietly continuing to drive exciting innovation in a financial climate tempered with caution.

Here are three ways P2P is getting creative:

• Bold R&D: Over the course of 2017, P2P companies have been launching Innovative Finance ISAs in increasing numbers. This tax efficient wrap around the P2P lending model is driving levels of lending exponentially. Pioneers include Abundance, which allows people to get a return on their cash by funding renewable energy projects, and P2P platform Lending Works. The latter launched its ISA on 8 February and claimed to have taken around £2.5m within the first 24 hours. While not quite the pinnacle of innovation, it provides lenders with a channel to offer more volume and quality to their customers – a creative step forward.

• Smaller businesses packing a mega punch: Folk2Folk is using the principles of banking success from yesteryear to bring innovation to P2P…and it is working. It is pioneering a highly localised, branch-based model and is already expanding with high street branches now in Devon, Cornwall, Somerset, Yorkshire and Gloucestershire. It knows its crowd(s) and is creating a human touch that transcends a personalised app.

• Partners in new banking: The partnership between Revolut and Lending Works was arguably one of the most exciting P2P partnerships of 2017 so far. Offering Revolut’s customers instant credit at half the cost of banks, these two powerhouses of fintech disruption came together for the greater good of the banking public.

In my work as a fintech marketing specialist, I have seen innovation in many parts of the fintech ecosystem – from payments to money management – but it is P2P that continues to steal the limelight. The rate of growth for the industry shows no sign of slowing down, while the looming spectre of tougher, Brexit-induced economic conditions is only going add fuel to the fire as borrowers seek alternative sources of capital. This is what made its high profile absence at Fintech Week all the more surprising.

Samir Desai, chief executive of Funding Circle, summed the category up perfectly late last year saying; “we’re entering a golden age for P2P lending”.

All things considered, it’s hard to disagree.