P2P platforms should champion their differences, says Tim Ryan, partner and national head of technology at DAC Beachcroft…
IT CAN BE DIFFICULT FOR peer-to-peer lending platforms to find service providers who understand the unique challenges and opportunities that alternative finance presents.
But this is where DAC Beachcroft is different. The international law firm has a team of specialists who understand better than most how to work with innovators. What’s more, they know the importance of differentiation.
DAC Beachcroft partner and national head of technology Tim Ryan is based in the firm’s London office. His team has deep experience of working with fintechs, alternative lenders and P2P platforms, providing specialist commercial and regulatory legal advice.
“Our role is to advise on whatever the client needs from a legal perspective,” says Ryan. “But where P2P lenders are involved, we’re experienced in advising on their technology platforms – the software which connects their intermediaries and enables them to do business. We work to protect their interests from a legal perspective, and we do this by drawing on our broad experience in commercial fields.
“I’m fortunate enough to have a large team of colleagues with diverse and highly technical skill sets. But we are not just the lawyers in the room – we also bring to bear the ability to leverage our commercial knowledge and the network that we have within the sector.”
This role has given DAC Beachcroft a strong insight into the emerging trends and challenges of UK-based P2P lending. Growth has been a challenge, he says, although there is no shortage of innovation within the sector, and this is where P2P platforms can truly excel.
“I think there are several core areas in which alternative finance differs from mainstream finance,” he adds. “One is to ensure that they have a differentiating factor. So, in the example of P2P lending, this means sticking to the DNA of what P2P means and delivers.
“It is also vital that they differentiate from traditional businesses so that they are not providing an offering that can be easily absorbed into a large established financial institution, unless that is the ultimate goal, of course. One of the ways that they can do this is by being quite agile and quick to move.
“And a third differentiating factor is that these firms can use very clever technology to carve out their place in the market, so they have a real competitive advantage.”
In fact, unlike many P2P service providers, Ryan does not believe that the highest value of a P2P business is always its potential as an M&A offering. Instead, he believes that P2P and traditional banking should be viewed as complementary elements of the financial ecosystem.
“I think the initial view among some industry onlookers was that alternative finance and other fintech companies were there to attack the banks,” he says. “But that perception has changed somewhat, and they are now seen as more of a complementary offering.
“There is plenty of market space and plenty of commerce to go around.”
As the P2P market heats up and new opportunities emerge, DAC Beachcroft is the sort of firm that every lender wants to have in their corner.
If you would like more information about DAC Beachcroft’s services, please email p2pfinance@ dacbeachcroft.com.