In their recently completed review, the Financial Conduct Authority (FCA) was particularly worried about some platforms using customer money to buy loans from rival platforms; FCA CEO Andrew Bailey explained that platforms don't have enough loans to present so in turn they use investor money to buy up loans from a rival platform; this is worrisome as investors are not being told the correct risks; Mr. Bailey did not disclose any platforms by name and said the issue was not widespread but worth keeping an eye on. Source
The Financial Conduct Authority released its interim update on crowdfunding rules last week; the update reported that the regulator would be scrutinizing numerous factors pertaining to P2P lending in the UK; one such factor, discussed by the Financial Times, includes the disclosure of loan performance; the introduction of provision funds has caused this disclosure to potentially be misleading for investors; in some cases platforms use provision funds to cover defaults for borrowers; this action could potentially lead to better than actual loan performance on the loans. Source
According to a report by AltFi, P2P Global Investments (P2PGI) is continuing their share buybacks; P2PGI has purchased shares on 14 days in the past two months with buybacks ranging from 3,400 to 50,000; the fund currently trades at a 25.3% discount to net asset value; contributing factors to recent performance have been cash drag from currency hedging, level of defaults and volatility surrounding Brexit. Source
The Financial Conduct Authority (FCA) has launched a study analyzing the UK's mortgage industry; study will focus on the industry's tools for consumers and the partnerships among mortgage lenders; the FCA will specifically seek to identify ways to better utilize technological solutions within the industry; the FCA will be obtaining information from a range of market participants and plans to release the results of the study in an interim report in 2017 followed by a comment period and final report in 2018. Source
British Business Bank (BBB) is a government-owned entity designed to support small businesses in the UK through a fund with 1 billion British pounds ($1.27 billion); it currently has 85 million British pounds ($108 million) invested in the P2P lending industry; the Financial Conduct Authority's release of an update on the crowdfunding market last week noting a number of factors for further investigation has caused taxpayers to question the large allocation to the P2P lending sector; specifically John O'Connell, chief executive of the TaxPayers' Alliance, has said, "This is extremely concerning and taxpayers will want to know how this can be good use of their money."; according to a Freedom of Information request reported on by Business Insider, the allocations from BBB include 60 million British pounds ($76 million) invested with Funding Circle, 15 million British pounds ($19 million) invested with MarketInvoice and 10 million British pounds ($13 million) invested with RateSetter. Source
Money Platform has launched in the UK with full authorization from the Financial Conduct Authority; the platform provides short term personal loans and seeks to offer a more affordable solution than payday loans; it will include 3 to 12 week loans of up to 1,000 British pounds ($1,255) with interest rates ranging from 0.3% to 0.7% per day; the platform is targeting 12% net returns for investors and will retain 35% of the interest payments from each loan; overall the most a borrower will pay in interest on the platform is 165%. Source
The founder of Metro Bank, a UK challenger bank, says app-only banks are "all hype" and sees them more as a provider of solutions and not banking; Vernon Hill told Business Insider in an interview that Metro Bank has been around for six years, has a market cap of $3.2 billion but only started to become profitable now; he went on to say: "No mobile-only bank can deliver anything I can't deliver in the next minute and a half. What they're offering you is a tool, not a solution. The customer wants the best of every channel and my job is to deliver them the best of every channel." Source
Invoice financing platform, BillFront, has secured $35 million in financing from a Series A funding round which included 4Finance, NIBC Bank and FinLeap; BillFront offers a working capital solution to media companies; uses advanced technology to evaluate a company's invoices for financing approval; the firm will use the new capital for company expansion and continued development of its technology. Source
UK-based Growth Capital Ventures (GCV) has received a 1.1 million British pound ($1.37 million) investment from Maven Capital Partners; GCV will use the funds to develop a new P2P lending platform and for expansion of its current crowdfunding solutions; the firm focuses on crowdfunded investments in real estate, clean energy and technology. Source
Leading UK consumer organization, Which?, has published new research showing in the last two years 1,045 branches have closed; HSBC has closed 27% of branches, Lloyds has closed 14% and Co-operative Bank has closed 53% of branches; the banks have said the rise of digital banking has moved their customers away from in person branches; while the move to digital banking is continuing, research by Bain also shows that 40% of global customers would consider a new bank if their branch was closed. Source