future of peer to peer lending
TRANSCRIPT
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The Future of P2PDoes it look bright?
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• Should we invest P2P loans?• Should we invest in a platform?• Should we launch our own platform?• Will this growth continue?• Will yields be as good in future?• Is this a bubble?• What about risks in this market?• What regulation and compliance?
Your Questions
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The Future looks Bright
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United Kingdom
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Europe
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`
Drivers of Exponential
Growth
• Banks de-leverage• Huge un-met demand• Government Drive• Regulation? (Unbelievable!)• Technology•Millennials & Changing Consumers• Low interest rates
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Will this Trend Continue?
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• Specialised Niches• Align to attract• “Co-opetition” with Traditional
Players• Cooperation with Non-Financial
Services Giants• P2P Networks
YESWith Re-
Alignment
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Innovation
Further DisruptDisruption
• Big Data lead to better decision• Innovation in collateral management• Portfolio analytics – lead to greater risk
transfer (beware!)• Payment Systems Outside Banks
(Bitcoin?)• Cross border transactions• “RegTech” & automated compliance
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Tread with Caution
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• Increasing complexity• No “through the cycle” stress test• Interest rate rise• Dealing with Tsunami of inflows• Is a market correction over-due?• Platform failure & contagion risk?• Fraud• Cost pressure – squeeze margins
MarketPressures
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• Transition from light touch regulation• Nervous regulator• 2016 regulatory review • Tightening regulatory landscape• Systemic Implications
RegulatoryPressures
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Shadow banks, “can pose the same key vulnerabilities as banks, including high leverage, excessive maturity transformation, and complexity, all of which can lead to financial instability,”
Stanley Fischer Vice Chair of US Federal Reserve Board of Governors
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• “Basel III” type regulation for P2P?• Increased prudential capital
requirements• Risk based prudential requirements• Greater need for risk measurement
and management
RegulatoryPressures
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• Future looks bright…..
However……..• Growing pains to maturity•More risks•More regulation
Conclusion
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“What new technology does is create new opportunities to do a job that customers want done.”
Tim O'Reilly
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