THE MONEY Platform is aiming to be one of the first firms to capitalise on Open Banking, as it plans to quadruple its monthly lending in the next 12 months.
The peer-to-peer lender, which launched in late 2016 to provide a more ethical alternative to the “morally bankrupt” payday lending market, now has more than 40,000 registered customers and is lending around £100,000 per month.
Chief executive Charles Balcombe told Peer2Peer Finance News that he sees huge opportunities from Open Banking – the new rules that mandate high street banks to share anonymised customer data with third parties.
“We’re very excited about Open Banking and hope we’ll be one of the first to use its capabilities,” he said. “It’s just a case of working out where to implement it along the customer journey.”
The Money Platform raised just under £1m in a pre-funding round last year and is planning to embark on another fundraising in 2018 “once we have nailed down our Open Banking plans”, Balcombe said, which will finance increased technology development.
Providers wishing to access the banks’ data can either obtain regulatory permissions from the Financial Conduct Authority (FCA) to access the API data directly or can do it through third parties. Balcombe said that The Money Platform is currently whittling down a short list of partners.
The Money Platform is the UK’s first fully-authorised P2P payday lender and was put in the FCA’s Project Innovate incubator programme, which supports innovative fintech start-ups.
Balcombe said that he partly attributes the firm’s success so far to its decision not to take up-front fees.
“The Money Platform doesn’t get paid until the lenders get paid, which is dependent on the borrower re-paying,” he said.
“I think this reassures our lenders that we are choosing good borrowers.”
Around 10 per cent of the platform’s 40,000 registered users are lenders. Balcombe said that they initially had far more borrower demand but there is now a balance between lender funds and suitable loans.