Wellesley has had a banner year, reaching a series of milestones while completely revamping its platform. Managing director Luke Madden tells all…
IT’S BEEN A BIG YEAR for property lender Wellesley. Over the past 12 months, Wellesley has gained full regulatory authorisation, repaid all capital and interest on its existing bonds and undergone a revamp of its product offering.
In February, Wellesley received enhanced permissions from the Financial Conduct Authority (FCA) allowing it to arrange investments and safeguard client money and client assets. This means that the platform can now distribute regulated listed bonds directly to its customers on its own fully-regulated platform and these listed bonds are ISA eligible.
“We’re always looking for innovative ways of serving our customers better,” says Luke Madden, managing director of Wellesley. “In the peer-to-peer market you have had the evolution of the Innovative Finance ISA in the last two years which has been a great success. Our listed bonds themselves can also be held in a stocks and shares ISA. So, I think what you’re seeing is platforms maturing in line with the market.”
For Wellesley, that means putting the customer front and centre and responding to feedback regarding accessibility, risk and ease of use. Last year, Wellesley hired MIAC Analytics to conduct a series of stress tests on its loanbook. These tests were reassuring and showed only small losses in the very negative scenario where house prices fell by a third. This was part of Wellesley’s efforts to “raise our standards in line with the new regulations and provide greater transparency of the loanbook for our customers so they can better understand the impact of an adverse economic environment,” Madden says.
“Regulation is a good thing,” Madden adds. “It’s a good thing for the industry and it’s a good thing for the consumers. It raises the minimum standards that all firms have to adhere to. It also raises the barriers of entry, and again, that’s a good thing from a consumer perspective as long as the market remains competitive.”
In many ways, Wellesley’s journey over the past year has mirrored the overall growth of the alternative finance sector. Enhanced regulations and a focus on customer safety will soon be the norm, but Wellesley has been preparing for these changes even before they were announced by the FCA. In launching its own dedicated investment platform and stocks and shares ISA, Wellesley is anticipating the next big trend – usability. By creating its own investment platform, Wellesley has streamlined the investing process in a way that makes it a leader in the alternative finance space. In the year ahead, Wellesley’s primary goal is to be flexible so it can serve its customers better.
“In a year’s time we would love to be able to say that the enhanced permissions and platform which were brought in this year have created a happy customer base,” says Madden. “Ultimately, we see relationships as the cornerstone of our business, both lenders and borrowers, and we will measure our future success on the growth of these relationships.”
This article featured in the August issue of Peer2Peer Finance News.