PEER-TO-PEER and other alternative lenders could ‘disrupt’ more than a third of business lending by 2030, new research claims.
A new report from accountancy giant PwC, called ‘harnessing the power of disruption’, identifies key financial services areas open to – and already being impacted by – advances in technology, changes in demographics and customer behaviour.
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In the UK small- and medium-sized enterprises (SME) sector, the report found that new digital entrants such as P2P lenders could dominate the market for underserved business borrowers, representing £4.1bn or 37 per cent of lending.
It warned that new entrants could face the pressure of regulatory scrutiny or a full economic cycle but said that this does not mean established brands can rest on their laurels.
The report suggested that financial services firms should keep a close eye on changes in appetite among their customers, highlighting the emergence of P2P lending as a “preferable option” for those not able to access lending through mainstream sources.
Business P2P lender Funding Circle is highlighted as an example of a “disruptive” brand that is “providing SMEs with easier access to credit and growing quickly.”
“Firms operating in a sector where the consumer is becoming more sophisticated and more demanding will have to embrace technological disruption – or be disrupted themselves,” Alan Gemes, senior partner at PwC, said.