Digitisation was a buzzword in 2020, as millions of businesses were forced to go online in response to the Covid-19 crisis and a series of national lockdowns. But for cloud-based software company Katipult, the digitisation of the lending market has been happening for quite some time now.
“When we launched the company, we were already approaching the lending industry knowing that it was all going online – it’s just a matter of time,” says Brock Murray, head of global development at Katipult,
“Everything’s going digital. Finance is going digital rapidly. This is the time that firms either strengthen their businesses and become more competitive or potentially get displaced by new entrants and up and comers.”
Katipult provides bespoke digital infrastructure for cloud-based lending platforms, including peer-to-peer lenders. Since the company was founded five years ago, it has expanded into five international markets: the UK, the US, Canada, Singapore and Australia.
Three years ago, it was listed on the Toronto Venture Exchange, making it one of the few fintech lending companies to have successfully managed a public listing.
“There have been challenges,” says Murray.
“There’s a lot of nuance to compliance in different countries. And sometimes certain regulations require some unique features to work around them or to solve that situation, so you’re dividing your resources to achieve some variability amongst clients, but ultimately getting through the pain cycle of that placed us in a unique market position.”
This hard work is already paying off, by allowing Katipult to offer a range of unique, game-changing services which can help both investors and lending platforms alike.
At its core, Katipult’s offering allows for the digitisation of the investment workflow by eliminating transaction inefficiency, strengthening compliance and bringing more fully-automated capabilities to lending firms.
But new services are on the horizon, including an auto-invest option, and the third iteration of Katipult’s repayment system. This will include advanced tools to deal with issues such as penalty fees and missed payments.
“One of the strong value propositions Katipult has is its bringing a very modern investment workflow online that’s powerful for both attracting investors and lenders, as well as maintaining and growing the average contribution of a lender,” says Murray.
“Once that investor sends in their money and starts contributing to loans, they can do everything online in an automated workflow – they can contribute to loans, receive their repayments and then reinvest those repayments into new and upcoming loans.”
The addition of a new auto-invest functionality means that lenders can set the criteria of where they would like to allocate their dollars or pounds. The Katipult system will automatically allocate these funds into the respective loans on the platform.
“It’s creating a very low touch interaction with the investor, while providing the investor with real-time access to deals and risk-mitigated allocation of their of their cash into various loan opportunities,” explains Murray.
The UK market currently represents approximately 20 per cent of Katipult’s global market, but post-Brexit Murray believes that more opportunities will arise.
“I think we’ll see a continued demand globally for investing in the UK,” he says. “There is a strong rule of law, good quality assets – all of the variables that I think have made the UK a big financial hub.
“Brexit will cause some short term pain, but if anything I think there will be a pretty good rebound there.”
Murray adds that he believes Katipult’s global offering will only grow throughout 2021, as more lenders realise the benefits of signing up for cloud-based lending solutions.
“What happened in 2020 has been a bit of that reality check that everybody has had to go digital, and I think that acceleration is only going to happen more where people realize what powerful things they can do when they’re done online,” he says.
“This is a trend that’s only going to gain momentum in 2021 and beyond.”