Zopa rebrands

December 6th, 2016
Zopa
Zopa

The world's first peer-to-peer lending platform Zopa has rebranded itself today. The new Zopa colour scheme is teal, dark blue, and red. The logo is remarkably similar to that of Landbay without the border. This is the first major rebrand of Zopa which launched in 2005 with a dynamic logo, but dropped this in 2008 for a static logo.

Initial reactions were mixed on the P2P Independent Forum, with one lender writing:

Is it actually as bad as I think it is? Or am I simply reacting badly because I am unused to it?

Another lender wrote in reply:

No, it is worse. Presumably they got in some 14 year old wanne be hipster consultant rather than a grown up for the design. I expect it might appeal to day-time TV watching potential borrowers though.

There were a number of noticeable errors on the website with broken links and words overlapping!

Here is the email send to lenders this morning:

We're thrilled to unveil our brand new look.

We're on an exciting journey to offer a wider range of products: and we wanted to update our look and feel to reflect who we are and what we offer, now and in the future.

This fresh new identity will give us a springboard for our plans to bring our products to even more people in the UK, and create radically personalised services that will help them fully realise their financial potential.

While a lot has changed – a bold new logo, icons, and tone of voice – our products still work in exactly the same way.

You can read more about these changes on our blog.

We want to hear from you: if you have any feedback on the new look Zopa, let us know.

Further reactions and comments coming up...

LandlordInvest launches

December 5th, 2016
LandlordInvest

A new peer-to-peer lending platform LandlordInvest has launched today after obtaining full permission from the FCA.  LandlordInvest has now applied to become an ISA manager in order to offer Innovative Finance ISAs.  The time taken to obtain the necessary permission from the FCA highlights a issues with the current application and approval process.

Here is the full press release:

LandlordInvest (www.landlordinvest.com), a marketplace lending platform for buy-to-let and bridging loans, gains full FCA Authorisation after a 24 months application process.

Being fully FCA authorised, LandlordInvest has submitted an application to HMRC to become an ISA manager to be able to offer the Innovative Finance Individual Savings Account (“IFISA”). Currently, only a handful peer-to-peer lending platforms are able to offer the IFISA as only fully FCA authorised platforms, that have been approved by the HMRC as ISA manager, may do so.

The Company expects to receive a green light from the HMRC over the next few weeks and will offer the IFISA directly through its lending platform.

Filip Karadaghi, LandlordInvest’s Chief Executive said: “We have after a long and rigorous process finally been authorised by the FCA. We are delighted to have reached this important milestone, ahead of many larger peer-to-peer lending platforms, that are still operating under an interim permission. Full FCA authorisation means that we have proved to the regulator that we are able to meet its high threshold standards and have the appropriate regulatory and operational infrastructure in place. 

Our next milestone is to be able to offer the IFISA, which we believe will benefit savers given the low interest rate environment and low returns. Indeed, we will be looking to offer tax-free returns between 5-10% per annum with our IFSA. In addition to higher potential returns, the IFISA is a valuable addition in a diversified portfolio, especially if it is not correlated with the stock markets, which our IFISA would not be.”

Zopa not accepting new money transfers

December 2nd, 2016
Zopa

Zopa have announced that they are not accepting new money transfers into the platform.  An email was sent to all lenders this morning stating that due to current volumes of new money, combined with an expected seasonal fall in borrower demand, there will be a platform limit for new money.

With classic peer-to-peer lending, as supply remains constant and demand falls off, lending and borrowing rates would normally fall, and Zopa has reduced rates several times over the last few months.  Zopa has taken the decision to also reduce the supply by preventing new money from entering the platform.  Existing money from borrower repayments would be unaffected, and would continue to be relent as previously.

The email sent to lenders is as follows:

We always aim to lend your money out in a reasonable time. However, with current volumes of new money transfers combined with demands for loans seasonally declining in December, we don’t expect this to be achievable this month.

We are committed to the risk and underwriting strategies that have served us well for more than 11 years and will not compromise our high standard of borrower to increase loan disbursals. This has led us to introduce a platform limit for new money into the platform so we can aim to lend out your money in an acceptable time.

What does this mean for you?

Throughout December, we will monitor the levels of new money. When necessary, we'll stop all inbound transfers while we disburse the new funds already in the queue.

Currently, the time to lend new money is projected to be slow, so we are not accepting new money transfers. You can check your Weekly Update email and live tracker in My Zopa for the latest information. We recommend you log in to My Zopa and check the tracker before making a transfer.

Money you have already lent out and set to relend will continue as before, keeping your existing money earning. This limit only affects new money into the platform: not your repayments and funds in your holding account.

What happens if I transfer money when the limit is in place?

We'll return your most recent transfer and advise you of your refund by email.

What will happen after December?

We want to be able to lend your money in a reasonable time. If upcoming months are projected to have longer lending speeds, we’ll activate the platform limit. We will keep you informed about the platform limit via the Weekly Update email and your My Zopa dashboard.

Any questions?

You can find more detail in the FAQ section below, and as always, our Customer Services team are on hand.

FAQs

Q: Why have the queues been increasing?

The queues have been increasing because Zopa has grown its investor base both in terms of new investors and total funds from investors. This growth has outpaced the growth of new loans. It is important to note that we have strict lending principles and will only lend to those who meet our risk criteria.

Q: What about existing money and repayments?

The platform limit only affects new money; repayments, and money already in the platform are not affected.

Q: Why can’t I just queue for longer?

We believe money should be simple and fair. We don’t think it’s fair for you to wait too long to lend out your money.

Q: How long does is usually take to start lending new money?

Since January 2016, the average time to start lending new money has been 5 days.

Q: What will happen when ISAs are launched?

We don’t yet have approval to be able to offer ISAs, when we know more we will give you an update.

Q: What happens for institutional investors?

Our current ratio of institutional and retail investments will stay the same.

Q: If my funds are returned, how long will it take?

We refund money by BACS, which typically takes 3 business days, depending on your bank.

Q: How long does it take Zopa to recognise that my funds need to be returned?

As soon as we receive your transaction, we will know that your funds need to be refunded. We will let you know via email and begin the refund process immediately.

There is a message when lenders login as follows:

We are not accepting new money transfers

We have a limit for new money into the platform so that we can aim to lend out your money in a reasonable time. This limit only affects new money into the platform: not your repayments or funds already in your holding account. Read more.

Any new money transfers into the platform will be refunded directly to your bank account.

Check the Weekly Lender for updates about the platform limit.

Preferred P2P Platform Award 2016

December 2nd, 2016
MoneyThing
Saving Stream
Assetz Capital

We are pleased to announce the winners of the P2P money Preferred P2P platform award 2016, as voted for by members of the P2P Independent Forum.  The winners are as follows:

WINNER: MoneyThing

RUNNERS-UP: Saving Stream, Assetz Capital

There is also a noteable mention for Collateral, who almost beat Assetz Capital into the top three.  For a company that only launched in May 2016, this is quite an achievement.  Of the big three peer-to-peer platforms RateSetter was the only company within the top ten, but had dropped to seventh place from third in 2015.  The highest place European platform was Mintos in nineth.

The members of the P2P Independent Forum are some of the most knowledgeable individuals on peer-to-peer lending, and as such these awards should carry some weight.  The winners of the P2P money awards 2015 were Saving Stream, MoneyThing and RateSetter.

Full story »

Reaction to Zopa launching a bank

November 18th, 2016
Zopa

P2P money was the first to break the news that Zopa was launching a bank on Wednesday. The reaction from experienced lenders on the P2P Independent Forum has been mixed, with some accusing Zopa of going over to the dark side. The user hendragon wrote:

I understand that things move on and evolve. Zopa began as a market where borrower and lender met in the middle (Zone Of Potential Agreement). Loans were approved by underwriters before they were allowed on the market. Where applications were rejected the potential borrower could appeal directly to lenders via an auction process. This has now evolved to Zopa classic and plus. There is also the fact that Zopa is trying to become a bank and enter the establishment it set out to disrupt.

Latter day Zopa has strayed so far from P2P that it seems to want to become an entity that has left its original purpose behind. There must be severe pressure to start making profits and becoming a bank is one way to do it. As Zopa was the originator of the whole sector I cannot help but feel sadness at this outcome.

The user sl75 wrote:

It was clear that was the direction they were going in when they launched safeguard...

That was the point where it seemed to me that Zopa stopped looking at innovation, and instead sought to imitate the traditional banking system.

The question then is whether acquiring a banking licence will ultimately be used to allow the P2P side to become more innovative (branching out into new and innovative ideas that would scare off the mass-market investors who are more comfortable with something that looks like a bank, and even more comfortable with something that actually is a bank), or if the P2P side of the business will then simply be allowed to wither away and die over the following few years as the remaining P2P loans get paid off.

(compare with how Safeguard was originally introduced as an alternative to what were then "standard" P2P loans, and very quickly become the only available option).

So why would experienced lenders be wary of such a move?  Zopa launched in 2005 as a lending exchange - matching borrowers to lenders like a financial dating website - cutting out the middleman. The big idea, taken from Zopa's website in 2006, was all about removing the bank from the process:

Here's the way the world works (and it must be right because it's been like this for hundreds of years...)

People who have spare money give it to a bank. Banks then do whatever they like with it. Some of it they lend to people who need to borrow. Some of it they give to their shareholders. Some of it they gamble on the price of tin, or the dollar going down, or whether there'll be floods in Asia. Banks make lots of money from all this, a fraction of which they give back to their customers.

Zopa though lets people who have spare money to lend it directly to people, like them, who want to borrow it. No bank in the middle, no huge overheads, no unethical investments.

To minimise any risk, the money each lender puts in is spread amongst at least 50 borrowers (and likewise each borrower gets their money from a number of different lenders).

Zopa is, therefore, for people who want to be a part of something new. Who want to join a community of like-minded individuals and lend to them and borrow from them in a trusting but secure way.

Zopa is for people who are looking for a better rate of return. Zopa's interest rates aren't squeezed by middlemen (the banks) because there are no middlemen - that's the Zopa idea.

Zopa is for creditworthy people who earn money in new ways, in ways that banks don't always recognise. People who are self employed, people who have peaks and troughs to their income, people who would be invisible to a bank's credit rating system but are seen and validated by Zopa's.

When Zopa launcged it targeted both lenders and borrowers who were looking for an alternative to banks.  Zopa offered great rates to both lenders and borrowers and made finance interesting and personal again. It is perhaps reasonable to assume that these original lenders would look at the idea of Zopa launching a bank as a betrayal of its founding principles.

However there are more rational reasons to support this move.  A number of innovative FinTech challenger banks are launching that are closer technologically and ethically to Zopa, than they are to classic banks.  It is therefore only reasonable for Zopa to look at this as an opportunity for diversification and growth.  Given than peer-to-peer lending is now regulated by the Financial Conduct Authority, the incremental effort to obtain a banking licence will not be as great as it would be for a new challenger bank.

It is likely the new Zopa bank and Zopa P2P platform would be separate companies under the Zopa unbrella.  There is also the possibility that other top tier P2P companies such as Funding Circle could go down the same route, but it is unlikely to be a trend for peer-to-peer companies in general at this stage.

Full story »