JustUs predicts digital finance revolution
Traditional lenders and big banks risk being sidelined as digital currencies, peer-to-peer lending and fintech innovation create a new monetary system, JustUs’ founder and chief executive Lee Birkett has predicted.
Birkett (pictured) believes that in addition to the Chinese central bank, other nations will soon roll out their own digital currencies, and this will trigger a digital revolution in the world of finance. While banks risk being left behind, alternative lenders such as JustUs can take advantage of these new opportunities in cryptocurrency and P2P lending.
“It’s definitely going to happen, it’s just a matter of who gets there first,” he says.
“Furthermore, I’d say our business opportunity has increased tenfold because the marketplace demand has increased dramatically due to the withdrawal of some alternative finance players.
“Over the last 12 to 18 months, the majority of lending has been propped up by the government. That’s due to end within the coming months. So next year, the demand is going to be off the charts for alternative lending platforms because the banks are going to be retrenching, they’re going to be administering the bounce back loans and coronavirus business interruption loans that don’t get paid back.
“I can see a crisis in the financial system in the first or second quarter of next year because it’s not resourced sufficiently to deal with the avalanche of administrative challenges that the banks are going to face.”
The P2P lending platform is the only regulated entity in the UK which has its own digital currency (BiPS) and Birkett believes that digital money represents the future for UK banking. In fact, the slogan for the company’s upcoming Seedrs campaign is “Old Money Is Out and New Money Is In”.
“Its an evolution of P2P,” says Birkett. “Crypto is P2P, but instead of just lending you are storing and exchanging value too.
“At the moment, we’re restricted to one country as a British P2P platform, but with us creating our own digital currency, we have become exposed to 200 countries and this enables even more investors to access our P2P platform.
“This gives the holders of those BiPS freedom, security and flexibility. So it’s creating a new digital monetary ecosystem. It’s an evolution of an old-school, broken financial system. And obviously the governments of the world have recognised this new technology as the evolution of money and they’re all creating their own digital pounds, digital euros and digital dollars.”
Despite the huge opportunities in the crypto lending space, Birkett believes that the barriers to entry are now so substantial that it is unlikely that any new platforms will be able to secure a crypto-backed P2P lending licence now.
In fact, the world’s largest regulated wallet provider – Coinbase – had to halt its lending plans last month until it secures appropriate P2P lending licences, so in this sense JustUs is very much ahead of the digital money curve.
However, despite a commitment to innovation, Birkett is adamant that risk management remains at the core of his business.
“I think we are a very conservative platform,” says Birkett. “We are predominantly property backed, so our exposure and our risk profile is probably akin to a bank. And we don’t take high unsecured risks or invest in risky loans. We don’t want to expose the platform to any structural economic risk.”
This conservative approach goes hand-in-hand with the platform’s forward-thinking approach. JustUs uses open banking to help identify any potential borrower difficulties, and the company will not sacrifice loan quality for loan quantity.
“I’ve been involved in lending for 30 years and my philosophy is the same,” Birkett says. “For us, it’s not about volume – it’s about quality and building a sustainable business.”