P2P lenders prepare investors for sort code changes under bank reforms
PEER-TO-PEER lenders are starting to inform investors about new sort codes on their client money accounts as a result of major banking reforms.
The Banking Reform Act mandates the UK’s banks to separate their retail banking services from their riskier investment banking arms, to protect consumers in the aftermath of the financial crisis.
The legislation, introduced in 2013, gives banks until 2019 to implement the changes. A senior regulator at the Bank of England, James Proudman, has estimated that almost a million retail and corporate customers will be given new sort codes on their bank accounts as part of the reforms.
Last month, P2P business lender ThinCats announced that it was changing the sort code on its client money account with immediate effect.
“ThinCats have implemented the change early to give lenders time to change the details at their end before it becomes a requirement,” a spokesperson told Peer2Peer Finance News via email.
And this week, P2P property platform Lendy, which uses Barclays, informed its investors of the change. It said the old sort code will continue to work for the next few months.
In July, Barclays said thousands of its business customers are to be given new bank sort codes by Easter 2018.
Tushar Morzaria, Barclays’ finance director, predicted that other banks would also choose the same date in 2018. “That weekend we have to create a brand new bank, probably the largest bank that will ever be created in the UK,” he said at the time of the bank’s half-year results in July.