An influx of reputable finance workers leaving their companies to join the rising number of FinTech companies appears to be indicative of FinTechs’ place in society.
One of the main attractions of the booming peer to peer lending industry is its appeal to those who have a negative financial past. For example, being turned down for financing due to a poor credit history. The P2PL industry may be a positive for some, but for others, it does nothing but set off alarm bells. Former City regulator Lord Adair Turner stated that “The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the worst bankers look like lending geniuses…”
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While Turner is convinced of his own vision, others seem to strongly disagree. Even reputable bankers themselves are embracing the new peer to peer financing methods. One example of this is Rich Ricci, founding partner of Barclays. He was one of the main figures in guiding Barclays through the recession and a member of their senior management team before retiring in 2013. Ricci has recently become a chairman of peer to peer currency exchange platform freemarketFX. Another example of a major financial figure jumping onto the FinTech bandwagon is Hugh Davies. After joining Goldman Sachs as an analyst, he recently left to join LendInvest – a London-based peer to peer lending mortgage company.
Turner’s further comments on the P2PL industry entailed that peer to peer lenders should come with clear warnings, and that only people who can afford to lose money should take part, thereby ignoring all facts. With the industries’ high standards of transparency and the FCA completing its full platform authorisation process, it seems P2PL is here to stay.