Wednesday , January 29 2020
Home / FT Alphaville / Moody’s rains on the online lending parade

Moody’s rains on the online lending parade

There has been a lot of excitement recently in online lending circles in the UK over a speech. Specifically a speech by Lord Adair Turner, the former financial services authority chairman who famously rubbished the sector back in February. At the LendIt Europe conference last week he stood up and said: ‘alright fine maybe the sector doesn’t like totally suck’. Such optimism is in short supply on the other side of the Atlantic. On Wednesday, Warren Kornfeld and team at ratings agency Moody’s put out a note with the message: ‘no! it definitely totally does!’: US online lenders have quickly seized opportunities to meet demand for more targeted, easy-to-access digital financial services, raising the possibility of a fundamental transformation in the way financial services are delivered. Given the competitive advantages of streamlined and nimble online lenders, some commentators have predicted a broad displacement of banks. In our view, however, inherent weaknesses in the online lender business model – in particular, low recurring revenue and a reliance on wholesale, confidence-sensitive funding – will likely limit them to a small segment of the overall lending market.

Kadhim Shubber considers the following as important: , , , , ,

This could be interesting, too:

Alexandra Scaggs writes Thought for the weekend

Sujeet Indap writes Jonathan Knee explains 25 years of Wall Street’s evolution

Paul Murphy writes The Beaufort sting

Thomas Hale writes The green multiplier effect

There has been a lot of excitement recently in online lending circles in the UK over a...

Kadhim Shubber
He is a freelance journalist who first bought bitcoins so that he could buy a beer at The Pembury Tavern, Hackney’s bitcoin pub. He has reported for Slate, Wired, The Daily Telegraph, The Sunday Times and Ampp3d. He is currently studying for a Masters in Journalism at City University London.

Leave a Reply

Your email address will not be published. Required fields are marked *