On Tuesday 22nd March The Brewery, in the City of London, welcomed the Alternative Finance Industry to the annual AltFi Europe Summit with Proplend happy to be among the attendees.
David Stevenson of AltFi set the tone for the day with his opening remarks about the continued rise and strengthening of the industry over the last year but also taking head on the various challenges facing it. The challenges included: possible slowing of the economy, how to better educate the market, danger of fraudulent activity from rouge platforms and Lord Turner’s recent comments on risk management and underwriting.
A keynote from Samir Desai of Funding Circle, the event’s headline sponsor, echoed these comments, “There’s been a lot of negativity around the industry recently and sure we have these short-term challenges. It’s going to be hard work but the kind of hype phase or hype year is definitely over.” He addressed Lord Turner’s comments directly telling the audience, “I don’t agree with some of the credit assessment stuff and I think many platforms have invited Lord Turner in to view our processes, to reassure him, because I think it is important that we tackle this criticism head-on rather than just shout him down.” Samir went on to talk about what he describes as the last unanswered question the industry has to answer, can it survive a recession. “I think the stuff around the recession is obviously the thing that we talk about a lot internally, we model to, we try and create buffers for. That is clearly the most pertinent question that anyone can ask about our industry.”
In summarising Samir declared the reasons they set up Funding Circle in the first place were still in place and if not stronger today: “My view is that when you take a step back, in the medium to long-term prospects for the industry are better than ever.”
A key discussion point during the debates was balance sheet vs pure marketplace lending. Both sides were well represented with compelling arguments on each side and the important question of, how you best align yourselves with your lenders at the centre of it. At Proplend, we believe that transparency holds the key, thoughts echoed by Samir Desai of Funding Circle and Rhydian Lewis of RateSetter. By opening up loan books and presenting all information to lenders you are giving them a clear choice and are never compromised by decisions, you might have to make if and when loans go ‘bad’.
Transparency was also a key feature of Rupert Taylor’s (AltFi Data) presentation with him commentating that “Disclosure has fuelled growth” within the industry.
Throughout the day there was a definite sense that the Alternative Finance Industry is growing up quickly, bringing with it all of the challenges of a rapidly maturing market. There were more than one or two suggestions that ‘Alternative’ would soon need to be dropped although our hosts may not agree!