In its final rules for P2P lending platforms issued in June, the FCA called for greater disclosure from an industry which already prides itself on being much more open and transparent than the incumbent banks it seeks to challenge. The FCA wants to see firms give investors sufficient information about the nature of their P2P investments, the risks involved, fees and charges, and the role of the platform.
“Transparency is absolutely paramount and lenders on a platform should be clearly presented with every bit of information about historical performance, years of operation, payback track record, asset expertise of the team, operational best practice and most importantly the relationship between the rate received by the lender and the rate paid by the borrower,” said Mike Bristow, chief executive and co-founder of CrowdProperty.
“This final point is critical as borrower rate is the strongest proxy for the risk being borne by the lender capital – as that capital is lent out in a competitive market."
Read the full interview on the p2pfinancenews website.