Weekly peer to peer lending news round up - 25th July, 2014
Our first piece of news should be pretty obvious to regular readers of the round up - Harmoney's new website got launched this week. We had a hiatus on the round up last week while the new website was switched over - but we're back this week with a shiny new blog!
International peer to peer lending & finance news.
In big news for the U.K.'s banking sector, it's been announced that the Competition and Markets Authority plans to run a full-scale inquiry of the lending market, which could force the market's four largest banks to break up. The C.M.A reportedly found that measures to increase competition in the market had been ineffective, and that the market overall is failing to meet the needs of the public. Reuters gives good coverage of the developments, but you can also read more about it on RT.com, and on The Guardian. BBC has a video on the issue here. We certainly anticipate hearing more about the inquiry as it progresses.
Tim Simon, Founder and CEO of Madiston LendLoanInvest (a U.K. based peer to peer lending platform), spoke with Crowdfund Insider last week about the future of peer to peer lending.
He speaks about the recently introduced FCA regulation of the industry (calling it a "huge turning point" for the industry, which "clamp[ed] down on poor practice whilst clearly encouraging innovation"). He also discusses peer to peer lending's involvement in Individual Savings Accounts, and peer to peer lending's role in banking disruption. Simon argues that the banks are in "worst of all possible scenarios: old systems that are too risky to replace, expensive to maintain, provide a poor customer experience and an inefficient cost per transaction", and that while many banks initially saw peer to peer lending platforms as a threat (citing Wells Fargo's short lived ban against employee involvement in peer to peer lending), many are now reviewing their strategies, and "may see participation in Peer to Peer lending as an opportunity".
It's an insightful interview with someone with a broad insider's view of the industry, and well worth reading. You can find the full interview over at Crowdfund Insider.
The British Business Bank (owned by the British government) announced last week that they would be investing in £10m worth of small business loans through RateSetter. According to is4profit.com, "The Bank’s loans will be targeted to individuals, sole traders or partnerships borrowing for business purposes; for the first £4m of funds, the Bank will lend 40% of any qualifying loan, before dropping to 20% for the remaining £6m – assisting in a total of £40m of lending."
Funding Circle, a peer to peer lending platform which started out in the U.K. and recently expanded to the U.S., successfully raised $65 million in funding - only nine months after its last round of funding which raised $37 million. Techcrunch.com has more information about the company's intentions for the funds, and an interview with CEO Samir Desai.
The company also announced the addition of Bob Steel to their board of directors. Steel has a fairly impressive resume, as CEO of Perella Weinberg, former CEO of Wachovia, former US Treasury undersecretary and former NYC deputy mayor. You can find more aboutthe appointment on Quartz.
Crowdfund Insider has publicised a couple of great infographics recently. This one from funding circle is a great display of the comparative length of time it takes to get a loan from a bank or through peer to peer lending.
New Zealand peer-to-peer lending news.
It's now been three weeks since the announcement that Harmoney had received its peer to peer lending licence from the Financial Markets Authority, and the news has been picked up in quite a few places. We were pretty excited to see a piece in Crowdfund Insider - one of our favourite sources of industry news.
There was an interesting piece in the NZ Herald this week looking at digital disruption in Australasian banking, suggesting that the big Aussie banks are afraid of their digital rivals.
Interest posted a couple of good articles, one which covers our Chief Data Scientist, Andrew Cathie's presentation at LendIt conference, referencing what we published last week on the blog in Andrew Cathie Presents at LendIt 2014. The article on interest is for paying subscribers only, but you'll find the video of Andrews presentation (which is both entertaining and informative) over in the blog post. They also had an interview with the CEO of the NZ Bankers' Association on the topic of peer to peer lending (again, for paying subscribers only).
That's all for now - we'll be back with more next week!