1

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

3

The Future looks Bright

4

United Kingdom

5

Europe

6

`

Drivers of Exponential

Growth

• Banks de-leverage• Huge un-met demand• Government Drive• Regulation? (Unbelievable!)• Technology•Millennials & Changing Consumers• Low interest rates

7

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

9

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

17

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