Brock Murray, head of global development at Katipult, explains how Katipult’s software can drastically reduce the stress of an audit, while helping platforms to attract and retain investors
Most peer-to-peer lending platforms are not ready for an audit of their past transactions and regulatory permissions, despite increasing scrutiny from the Financial Conduct Authority (FCA).
Brock Murray, head of global development at software company Katipult, has warned platforms that in an ever-changing regulatory environment, it is all too easy to miss something.
For example, in the UK, financial firms must keep investor data for up to seven years. “But a lot of firms are not doing that,” says Murray. “Could you really stand up to a three year or five year audit?
“Can you access transaction data from January 2017, for example?
“I think a lot of firms don’t factor in the risk of an audit when they’re making a purchase decision of software.”
In the event of an audit, it is certainly useful to have all of your company’s transaction data stored in one place. Katipult’s software creates a digital footprint in a centralized comprehensive transaction system so that it is easy to find historical data within moments. In the event of an audit, this would translate to huge cost savings and a vastly reduced administrative burden on the platform’s key personnel.
Its end-to-end solution for P2P lending platforms has been designed to protect lenders from data breaches and ensure that they remain complaint with FCA guidance. This includes everything from how different types of investors are onboarded, to where the platform is hosted.
“When I say end-to-end, it really is everything from when you first have an interaction with your investor, to how you collect their information,” says Murray. “And then allowing them to access investments that are suitable for them, depending on what type of investor they are.”
Katipult can hide and control which investors see which types of deals, to reduce the risk of mis-selling or mis-marketing more sophisticated products.
“I could sign up as a retail investor and not even be aware that I’m only accessing the deals that are allowable by the FCA for an investor of my status,” Murray says.
But for P2P lenders who are recovering from a year of economic instability and a shifting P2P landscape, Katipult’s software can also create much-needed cost savings without compromising on the quality of the platform’s offering.
“The cost savings and the efficiencies that we can bring are pretty dramatic,” says Murray.
“Most firms have not ever really done a full cost analysis. For most firms, scaling the business – the issue isn’t so much about getting new investors and getting good deals and building the business. It’s usually an administrative hurdle.”
By outsourcing these administrative tasks and compliance checks, platforms can focus on what they do best – sourcing creditworthy borrowers and matching risk-aware investors with the loans that are best suited to their needs.