THE PEER-TO-PEER lending market could be set for a wave of consolidation in 2020, according to new predictions.
Regulatory consultancy Bovill has suggested that the new Financial Conduct Authority (FCA) P2P regulations could herald more mergers and exits in the sector.
It comes after a Freedom of Information (FOI) request by Bovill found more P2P firms are withdrawing rather than applying for regulatory permissions.
It found that between 13 June 2018 and 7 November 2019, 17 firms withdrew their application to be authorised for P2P permissions, compared with sixteen firms that applied.
Ben Blackett-Ord, chief executive of Bovill, said uncertainty in the lead-up to the new rules may well have roiled the sector and could create consolidation in the market over the next year.
“The new P2P rules, along with a review into open-ended fund liquidity, indicates a broader shift in the FCA’s focus,” he said.
“The FCA always treads a tightrope, of course, in balancing its core principles.
“But these developments in the retail investment space suggest the regulator is leaning in the direction of consumer protection – though perhaps at the expense of promoting market competition.”
In recent weeks, both Landbay and ThinCats have shut their platforms to retail investors to focus purely on institutions, while MoneyThing announced that it is winding down its platform entirely.