The year 2018 was a revolutionary year for the Fintech industry. The overall investment and lending business turnover surpassed than those of 2017’s total turnover even before 2018 ended. We attribute the sharp increase in activity to three massive changes: implementation of PSD2, GDPR, and the introduction of emerging technologies in the lending industry.
As the Fintech market is maturing in areas of lending and payments, the big players in the market continued to emerge over the first three quarters of 2018, attracting more substantial deals. Moreover, a broader range of companies now focuses on newer areas of Fintech innovation, like blockchain, artificial intelligence (AI), and data analytics.
Regulations implemented in the lending sector have been a hot topic for corporations, fintech investors, as well as consumers. The increasing focus on managing regulatory requirements and compliance contributed to an increase in Fintech companies.
The type of investment opportunities available to people across the world is different. With enhanced opportunities and possibilities, the growth in the number of marketplace lending in the UK is finally catching up. The United Kingdom is by far the most significant European lending market. The interest returns from the market now are surprisingly exceeding the income from the other sources. But still, the most promised investment schemes and projects have failed to live up to their expectations.
According to Brismo, gross lending reached a figure of 6 billion pounds for the first time in the year 2018. If we look at the year-on-year growth, the 2018 number represents a 20% growth from the year 2017. However, this growth represents a slow-down, because, for the previous two years, the market was witnessing 40% year-on-year expansion in terms of volumes. The lending sector earlier breakneck development where the market quadrupled between the year 2013-2015 is soon becoming a distant memory.
Funding Circle, a peer-to-peer lending platform which was recently listed on the London Stock Exchange, is dominating the lending market. Marketplace lending to SMEs seemed to grow much stronger in the year 2018 as it grew by 21% and reach 2.13 billion pounds. Again, SMEs lending grew at a much larger scale in the year 2017 as it registered a year-on-year growth of just a little over 50%.
Outside of peer-to-peer lending, the United Kingdom boasts a number of well-known online lenders. LendInvest, is estimated to have lent out £2.1bn The platform specialises in loans to real estate people currently and no longer works as a peer-to-peer lending space. LendInvest offers loans using a mix of sources which includes a private investment portal for sophisticated investors, retail bonds listed on the London Stock Exchange, and credit lines from institutions.