AltFi Australasia: Disrupting the lending ecosystem

This week, RateSetter was very pleased to sponsor the 2017 AltFi Australasia Summit. This is the largest peer-to-peer lending and alternative finance summit in Australia, bringing together platforms, regulators, customers and the media to discuss important trends and issues facing our industry.

As anticipated, there was an impressive list of speakers, ranging from founders of disruptive Australian businesses to prominent executives from large international platforms, to a very straight-talking Shane Elliot, CEO of ANZ.

While there was a wide range of topics discussed, perhaps the ‘golden thread’ that ran through the entire conference was the positivity of the delegates and the open and collaborative atmosphere. No doubt this was supported by the wide-held view that loan markets in Australia are highly concentrated, lack concentration and that those in the room together have the potential to transform our financial landscape over the next decade, for the better.

CEO Dan Foggo speaking at AltFi

I was fortunate to be invited to participate in a ‘fire-side chat’ with John Price, ASIC Commissioner, facilitated by the Financial Review’s James Eyers. It’s rare for a peer-to-peer lender – or any business for the matter – to be able to have a frank discussion with a senior regulator in an open forum, so there was curiosity as to where the conversation would go.

Our discussion centred on the importance of regulation in facilitating access for retail lenders to invest in peer-to-peer lending in Australia. This is a topic that we at RateSetter (both in Australia and in the UK) have spent some time considering and we think is an important topic for our sector and our own community.

Below is a brief recap of the themes and perspectives I hoped to get across during our session:

  • RateSetter’s core objective is to build an alternative to the banking model, one which provides more value to both the investor and the borrower by closing the spread, whilst ensuring that there is a more fair allocation of risk-bearing in our financial system
  • RateSetter is determined to bring its new model into the mainstream, requiring a very large number of customers. This is one of the reasons why RateSetter has always prioritised providing its services to everyday Australian investors, not just financial institutions and wholesale investors
  • For retail investors to adopt a new product, it needs to be simple and the risks need to be clear and understood. Trust needs to then be earned by building a solid track record for delivering and meeting investors expectations

We think that the current regulation of retail peer-to-peer lending operators in Australia strikes the right balance between providing robust consumer protections and providing sufficient flexibility for operators to innovate and bring new products to their customers. Some investors may not know this, but we think the Australian regulatory regime provides one the most sensible and robust set of protections to peer-to-peer lending investors of any regulatory regime in the world.

Overall, this event was thoroughly enjoyable, and it helped to reinforce the vision that those in peer-to-peer lending and the broader alternative lending industry share as to how our financial system can improve. RateSetter is looking forward to sponsoring the AltFi event again in 2018. We’d be delighted if you’d join us.

This information does not constitute financial advice and you should consider whether it is appropriate to your circumstances before you act in reliance on it. Any opinions, forecasts or recommendations reflect the judgement and assumptions of RateSetter as at the date of publication and may later change without notice.