THE UK’S peer-to-peer finance sector will see a long-awaited flurry of M&A activity over the next few years, the chief executive of a technology-focused investment bank has said.
The industry has not experienced any significant consolidation yet, but the conventional banking sector is starting to take fintech much more seriously, according to Jason Purcell, CEO of First Capital.
“In the early days, the financial services industry ignored what was going on with technology, but now they’re looking at it with more interest,” he told Peer-to-Peer Finance News.
“I absolutely expect to see more banks experiment with this space, either by building their own platforms, investing in platforms or lending through platforms.
“I think there will be more acquisitions over the next three or four years as the firms get bigger and the banks react and buy them,” added the boss of the independently-owned investment bank, which has offices in London and San Francisco.
“We’re in touch with all the key players and talking to banks and investors about how they can get involved in this area.”
Purcell added that the country’s P2P platforms could be attractive targets for overseas companies looking to enter the UK market.
“It’s a lot less risky to experiment overseas than to try and amalgamate a business into your existing brand, so I wouldn’t be surprised if we saw some interest from abroad,” he said.
The UK’s P2P industry has seen very minor deal activity so far, such as RateSetter’s acquisition of GraduRates’ loan book in 2014.