by: Grow VC Group
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AltFi Europe Summit was organized in London in late March. Online lending services and models particularly dominated the discussion. As a whole the UK-based services and UK regulation were in the main focus at the event. The event served as a good summary of the p2p lending and equity crowdfunding market in the UK and some other countries. At the same it also illustrated, how the discussion now focuses on a few services and countries, when much more happens behind the curtains.

The online alternative finance market is still in its early stages. According to Grow Advisors research, the total market is only 0.7 percent of the potential global addressable market (approximately $11B loan originations through online platforms 2014, and Goldman Sachs has evaluated the addressable market to be $3.3T). The UK has been the leading market, where the FCA has had an important role to play in enabling the fast development of the industry.

SME lending is an important growth area for lending platforms. Banks have their capital restrictions and price for capital tied to higher risk loans that leaves a lot of room for other players. One comment that describes well the bank’s position was “banks make the best profit from SME loans, but the worst ROI due to the capital requirements.”

Securitization of p2p loans is still in quite an early phase. There are some activities in that area and often sought from the investors position, but e.g. a panel at the event discussed the nature of the early phase market and how loans interest rates and securitization are not really yet in line. Many parties also see that much more data, including historical data, is needed to get the market to a more mature phase. Now some services have really started to offer data available that help follow many platforms and see historical trends (see e.g. dealindex.co).

Many parties see that there will be more requirements for the back offices of the platforms, for example in KYC, AML and reporting functions. This is the area where Crowd Valley also offers leading solutions for platforms and portal to meet their ongoing and long-term requirements.

In summary, many alternative finance and fintech events have started to repeat one another. They have the same stories about regulation, some known platforms and speculation, how new models can have a huge potential. But much less is talked, e.g. what is needed to develop the market, how this has impact on the value chains of financial services, what can the traditional finance companies act on, what are all technical and back office functions that are needed to develop new services, and especially what kind of dimensions and roles there are in the ecosystem.

Now it is important that this new industry really starts to think about the next big steps, how to really get alternative and digital finance to a major role in the finance sector. It requires more ecosystem, business model and technology competence than most conferences offer today.

Read the whole article and more about discussions on Crowd Valley News.

AltFi Europe Summit


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Grow VC Group The Grow VC Group is the world leading, global pioneer of securities crowd funding, peer to peer marketplaces, new investment models and global business development. Established in 2009, the Group has developed new investment models on six continents and continues to innovate the global market.

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This entry was posted on Saturday, April 23rd, 2016 at 7:50 am and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.