Tag Archives: P2P

LFP083 – Matchmaking Lending and Borrowing with Conrad Ford CEO Funding Options

Conrad was on the show back in LFP020 since when he has built Funding Options (strapline “your free marketplace for business finance”) into one of the most successful London Fintechs. They were chosen as one of three UK government mandated SME Referral Portals, are the largest of those by an order of magnitude, increased revenue fourfold last year, are on target to triple again this year as well as being on target to be the UK’s largest introducer of working capital finance.

Funding Options essential task/service is lining up all the many SME borrowers out there with relevant sources of Finance. A task made all the harder by the plethora of lenders and the many types of lending finance available.

How has this task evolved over the past 2.5yrs?

How is lending right now?

How is borrowing?

Topics discussed on the show include:  Continue reading

LFP069 – IFAs, Fintech & Roboadvisers with Dan Kiernan Research Director Intelligent Partnership

IP banner for London Fintech Podcast“Everyone” frets over financial advice in the Fintech Age. Regulators set out to “protect the consumer”, worthy bodies talk no end about the need to protect “people” (never themselves oddly – generally they imply (/mean) folks of lesser education/wealth) and the rest of us are just confused over the labyrinthine rules around tax, savings and investments.

Needless to say a myriad on rules and regulations and the implicit costs of this suprastructure all act together in a Kafkaesque way to produce the opposite result – known as “the advice gap”.

In Fintechland breathless media and PR firms high on sugar, caffeine and other stimulants promise us a golden era of so-called “roboadvice”.

Dan KiernanHow to make sense of all this?

I am delighted to be joined today by Dan Kiernan Research Director at Intelligent Partnership “the UK’s leading provider of research, training and events on Alternative Investments” to cut through all this and to give us insights into why advisers are not recommending eg P2P to their clients when it has outperformed bank deposits for more than a decade.

On the show today we discuss all of the above and: Continue reading

LFP068 – The London Fintech Podcast’s 2016 Highlights and 2017 Awards

Dilbert by Scott Adams - Fintech 2016 turns into Fintech 2017Happy New Year boys and girls 🙂 May 2017 be a great one for you and yours! This is the New Year Special where I look back at my 9 highlights from 2016, dish out 10 immensely prestigious awards  and take a peak at 2017.

So without futher ado lets kick off the awards… Continue reading

LFP064 – P2P in the US, China and UK with Peter Renton

Lendit US 2017After organising nearly 1,000 folks in the O2 for Europe’s largest P2P conference ever I managed to grab Peter long enough to have a fascinating tour of the globe and P2P sitrep in the three major hubs.

Peter Renton PhotoPeter Renton has perhaps has more of a broad and deep understanding of P2P worldwide than anyone.

When he first came on the show way back in LFP015 he shared with us the fascinating history of US P2P with its hugely up and down roller-coaster road.

Since then he has created the world’s go-to conferences on P2P in the US, China and Europe which gives him a unique insight into what’s what and where.

It’s a big world and P2P is a vast domain these days so there is plenty to discuss. Key topics are: Continue reading

LFP062 – “Hard Fail” Provision Funds Revisited with Rhydian Lewis CEO Ratesetter

Ratesetter LFPI am delighted to be joined on the show today once again by Rhydian Lewis CEO at Ratesetter to talk about the ultra-hot topic of provision funds in p2p/marketplace lending. Rhydian was on in the early days back in LFP019 in an episode talking about P2P beyond the metaphors. That’s a good theme for today on a narrower topic as all too often when one reads about provision funds its metaphorical.

Rhydian LewisIn practice as with most/all of FS one really needs to get the metaphorical whiteboard out and draw some diagrams and a bit of arithmetic to make it real.

Lets provide some context first. Ratesetter was formed 7 yrs ago and has accumulated an amazing 300,000 customers with an amazing 250,000 on the platform right now and have lent an amazing £1.5bn with no lender ever losing a penny of interest or capital along the way.

Those are phenomenal achievements that very very very few Fintechs will ever manage to better.

But like growing up there are growth pains along the way. Ratesetter has been somewhat the P2P of choice for taking pot-shots at this year for the FT Alphaville column and the impressive Kadhim Shubber who seems to do more research than most. What are euphemistically described perhaps as missteps around self-investment of provision funds, not publishing future loan losses and rebasing of how the provision fund excess is calculated came in something of a flurry and even generous if sceptical folks like I started to raise an eyebrow.

But behind all this is the need to change. Did Ratesetter – or for that matter you and I – get everything right in 2009 (or for that matter every year since) or do they and we all need to keep changing in the light of experience and further thought?

Let’s briefly mention provision funds.

So briefly a soft-fail provision fund to use my terms is like the platform having a piggy bank into which it puts a few pence on every deal. If lenders loans are impaired that piggy bank is raided to subsidise them. But when it runs out the platform says “sorry guys no more funds to subsidise your loss, over to you”.

A hard fail model in contrast (which off the top of my head Ratesetter is the only big user of) when it runs out pools all investors assets together (to share the losses out). This is a big phase change – like going from water to ice. Its always been a concern of mine – if only as 30+ yrs in FS has shown me time and time again in different markets the impossible is always happening. No amount of whiteboard ink will ever save everyone in all circumstances.

So lets dive into all of this. An annus trickyus for Rhydian and colleagues and this important point about hard provision funds.

Plenty discussed on the show including: Continue reading

LFP057 – Five Reasons Corporate Governance is Essential for Fintech with Geoff Miller CEO Afaafa

AFAAFA

Geoff Miller

I have the pleasure to be joined today by Geoff Miller, CEO of Afaafa and former CEO of GLI Finance which he built from having no presence in AltFi to having over two dozen share stakes and loan agreements.

If existing FS has gone far to far in the direction of endless PC box-ticking – the porridge is too hot, then for sure in Fintech the porridge is too cold. Fintech is a long way behind grown-up FS is on corporate governance – the average Fintech board being comprised of founders & VCs/angels – little independence there.

How can Fintech get the porridge “just right”?

What are the advantages for a Fintech of a well-composed board?

A quick count on LinkedIn shows that Geoff may have been on getting on for two dozen boards.  So who better to talk about the importance of corporate governance then Geoff. As Professor John Kay said in LFP055 corporate governance may sound like a dull box-ticking exercise but it is a vital function of FS. Just look at what has happened to senior executive pay in the UK when the FS industry (now the largest holder as most of our investments are indirect) hasn’t much to vote much at board meetings. If the cat is off busy making whoopee its hardly surprising if the mice steal most of the cheese.

If you are anywhere near the Fintech scene in London (or in some other countries) you will have heard of Geoff. Geoff has always been a rare soul in terms of brutal honesty. At AltFi Europe 2015, the general tone of which was “ra-ra aren’t we wonderful” Geoff spoke of “woeful underwriting standards and hopelessly naïve CEOs”.

Geoff is an ideal guest on the London Fintech Podcast as he doesn’t just have “views and opinions” which are so prevalent amongst the so-called “thought-leader” classes   Rather he has been at many coal faces with many miners. And as with coal mining its often painful work. In LFP037 John Regan gave an excellent account of managing ones way out of business model crisis at Platform Black. GLI Finance had its own internal shuffle before Xmas bringing in new management. More recently Funding Knight went into administration and there was plenty of work for the board there.

Topics discussed on the show include: Continue reading

LFP056 – “Everything You Wanted to Know About Fintech Venture Capital But Were Too Afraid To Ask” with Rob Moffat Partner at Balderton Capital

Balderton BannerI am  delighted to welcome Rob Moffat, Partner at Balderton Capital to dive into the topic of Venture Capital and Fintech.  As I aim to present London Fintech in the round I have been – for a long time – keeping my eye open for a friendly VC to have on the show. This has taken two years would you believe!

Viewed from Mars you might think this is curious given how the whole mainstream tech media is so focused on fund-raisings, so-called valuations (and fantasy animals with one horn), and the whole machismo around money.

Viewed not from Mars the VC sector globally is perhaps rather problematic. If this is a surprise to you then I recommend as an entry point Diane Mulcahy’s 2014 Harvard Business Review article Venture Capitalists get well paid to lose money. As a former VC she knows where to direct the fire – high fees, illiquidity and underperformance. As I recall in the greatest tech boom ever, in the US the aggregate stats are something like that the average VC hasn’t even returned to the investors the funds they raised, let alone got a carry cheque (the performance related fee).

Furthermore as we heard way back in LFP008 with Richard Goold the UK/European venture capital market was very thin indeed in most of the 20th Century (post-WW2 the UK basically had the (originally government) 3i as the only player for a long time) and returns were poor.

Set against this virtually every Fintech that scales needs VC money – without which there would be no boom at all.

Equally like in all industries there are always some good players with a reputation for adding value. It was such a lead that led me to Balderton Capital who are one of the real players in the London Fintech scene.

Rob MoffatRob also writes a lot on the industry – I recommend his blog – and is on the board of seven of Balderton’s investments, the best-known of which in UK Fintech are perhaps GoCardless and Nutmeg. Balderton invests around £20m per annum into Fintech.

Above and beyond this Rob is – finally – someone who is happy to talk on air about the reality of VC and Fintech. As he joined the firm in 2009 (from Google) he has experienced the Fintech world from roots through shoots and now into a rather varied garden.

There is more than plenty discussed on the show, key topics include: Continue reading

LFP055 – How Fintech Could Become Far Greater by Re-Forming FS with Professor John Kay

John KayI am delighted to be joined this week by Professor John Kay – one of the UK’s leading economists and outstanding authority on Financial Services to discuss the truly vast potential that still exists for Fintech to disrupt FS. Fintech as we know it now has so far only put its toe into that ocean of possibility.

Maybe Fintech as we know it now is as good as it gets. Or maybe it could be far far more. If the latter it really needs to get stuck into the areas we discuss on the show and in a far more radical way really support society at large and both re-form and reform FS.

John’s CV includes having written for the Financial Times for over 20yrs, being a successful author of at least 9 books, a fellow of St John’s college Oxford for some 46yrs, a visiting Professor at the LSE, being awarded the CBE, has been a director of well over a dozen FS companies, a successful businessman (Google tells me he has an investment in London Fintech Nutmeg), a member of the British Academy, the Royal Society of Edinburgh, establishing the IFS as one of Britain’s leading think tanks,  and in 2012 producing a review for the UK Government on equity markets and long term decision making. Post-Brexit he has been appointed to advise the Scottish Government on European Union issues.

So he knows a thing or two about FS. Not only this but as his website strapline is “accessible and relevant economics” he has the rare ability to take all that knowledge and experience and make it readily assimilable to the layman. Never more so than in his latest book “Other People’s Money: Masters of the Universe or Servants of the People?” (which currently gets 4.4*/5 from 32 reviews on amazon.co.uk).

If you want a taste of the book and an education (I learnt a lot and I know a little about FS myself) I recommend checking out John talking about the book at Google or at the LSE. And then buy the book 🙂

Anyway all this deep background serves for a very deep and vitally important issue.

Fintech would not be where it is today without the FS crisis of 2008. Leading authorities – John, the ex-governor of the Bank of England and the ex head of the FSA – have all written books saying that the fundamental dynamics behind that crisis have not been eliminated and that we will see a similar crisis again. I agree entirely.

In his Google Talk John mentioned that his book was in part educative but also in part so that when the next FS crisis breaks authorities will not be able to say (as they did last time) they had no forewarning and no policy prescriptions to reach for.

This made we wonder whether we couldn’t repurpose and leverage John’s work – inverting it as it were – turning problems into opportunities and showing what Fintech could do to both reform and re-form FS. Continue reading

LFP054 – Special Episode! Do we need Fintech 2.0? What are Brexit’s impacts? with Giles Andrews Zopa Chairman

Zopa-930-x-180Less than a week ago the UK voted to leave the EU. This comes against a background of severe problems for listed US marketplace lenders, a worlwide tailing off of institutional capital into the sector and only a tiny number of Fintechs having achieved profitability (many years after launch).

I thought it time to take a big picture look at Fintech – is Fintech 1.0 flagging? Do we need Fintech 2.0 to take us onward and upwards? Will Brexit be a positive force or a negative force for Fintech?

ST-ZopaA14vc051I could think of no better figure to discuss this with than Giles Andrews who has been at the top of perhaps the UK’s oldest Fintech Zopa per se as well as one of the most blue-chip today.

It’s a wide-ranging conversation but one that lays out some of the parameters of the territory ahead – one which right now may be shrouded in fog but one which we all, including the Fintech sector, will travel through.

It’s a longer episode than normal and there is plenty on the show. Some main topics we discuss include:

Continue reading

LFP053 – Innovating In P2P with Cormac Leech Co-founder Liberum Alternative Finance

LFP LiberumCormac Leech is co-founder of Liberum Alternative Finance who are a (the?) specialist strategic adviser and development partner to the UK Alternative Finance sector, focusing on online direct and marketplace lending and equity crowdfunding.

Liberum have done some $2bn of the largest P2P investment fund originations in the UK – notably P2PGI now a listed FTSE250 company. Which to make that explicit means that one of the biggest 250 listed companies in the UK purely invests in P2P. An interesting stat in itself when you hear how Fintech ain’t much from the odd naysayer.

Cormac LeechCormac is perhaps London’s best known and deepest thinker on Alternative Finance. In LFP038 Peter Renton and I discussed the highlights of Lendit 2015 – Europe’s largest P2P conference last year. We both picked out Cormac’s coruscating presentation – a little like the scene in Apocalypse now where they are on LSD under the bridge while the battle is going on. More prosaically it fitted a 3hr presentation into about 20 minutes and included everything about P2P including advice to the Bank of England as to how they should in the future use P2P assets to control the money supply.

Plenty has been happening in all directions with P2P lending and I thought it would be a great time to hear from someone who, although having an indirect stake in the success of the industry, is not the CEO of one and therefore that much more dispassionate.  Furthermore as always I aim to dive beneath all the froth and trivia and get to the deeper waters.

Plenty in this show including: Continue reading