The technology tips to help P2P platforms grow their user base
Fintech partnerships, embedded finance and open banking have been described as key ways for P2P lending platforms to attract and retain users.
A panel at the P2P Leaders Forum, an industry event hosted by Peer2Peer Finance News, this morning discussed how to attract the right customers while lowering acquisition costs.
The online event, held under Chatham House rules, attracted c-level executives from P2P firms, regulators, consultants and other industry stakeholders.
One senior technology expert said fintech partnerships are an effective method of acquisition as you can “piggy back” off the brand equity of partners.
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One method is through embedded finance, which allows firms to use their own customer data to embed an external lending product from a different provider to provide pre-approved credit.
“What we are seeing in the credit space is if you can give the costumer a more relevant experience, then the conversion rates go up from 10 to 40 per cent,” a panel member said.
Open banking was highlighted as an opportunity to grow and hold on to customers and also to develop tools for forecasting loan arrears and defaults, but platforms were urged to make it relevant for users.
“There needs to be a value exchange,” one technology expert said.
“Open banking is great from a lender perspective as it can be used to quickly assess someone’s affordability.
“But for a customer, they need to understand the value they are getting by letting you access their data and giving their re-authorisation every 90 days.”
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One issue that was raised was how platforms use technology as they grow and attract more users.
“Platforms use different technology,” one panellist said.
“Some use in-house teams but that becomes costly as you get bigger.
“Alternatively, there are software-as-service-solutions but they can face limitations if they are too rigid.
“When you start a business, its easier to rely on out-of-the-box software but you need to be able to tweak it as you scale-up.”