THE CLOSURE of the Peer-to-Peer Finance Association (P2PFA) has left a void when it comes to industry data but experts say other bodies and extra regulation can fill the gap.
The P2PFA was disbanded last month and replaced with the 36H Group, a sub-group that will sit within fintech trade body Innovate Finance.
The P2PFA released lending data from its members on a quarterly basis, which helped provide an insight into the state of the industry. The 36H Group said it will focus on policy and regulatory matters, as well as promoting the benefits the sector is delivering but will not provide the same loanbook updates.
“The P2PFA did a lot of things that were very positive for customers,” said Neil Faulkner, founder of P2P analysis and ratings firm 4th Way. “It set good standards and it improved transparency.
“However, if transparency and high standards are good for business – which they are – you don’t need an association to drive that.
“Many platforms outside the P2PFA provided more information and data either publicly or to 4th Way than those inside of the organisation did. Many of them have exceptionally high standards of underwriting.”
“In some ways, the standards of an association can be dragged down by the lowest common denominator within the group.” Jonathan Minter, of alternative finance research firm Intelligent Partnership, highlighted that all firms must now provide loanbook data under the new Financial Conduct Authority (FCA) regulations.
“While we would encourage the industry to provide potential investors with as much information about themselves as possible, it is important to remember that the P2PFA only had a very limited number of members,” he said.
“Therefore, while their figures were useful to some extent, they did not provide a full market overview.
“Figures from trade bodies are only one source of data. Thanks to the new FCA regulation, P2P platforms now have quite a lot of disclosure requirements. This includes actual returns compared to target rates, expected and actual default rates as well as information on any provision fund the platform will have.
“That said, we certainly think that a mechanism that offers simple comparisons of regularly updated P2P platform data is very important for the future of P2P.”