Capgemini: We Will See Acquisitions of P2P Lending Platforms By Banks Soon

Bank of England Charter 1694Capgemini recently posed the question;  “To what extent is crowdfunding a problem for our traditional bank manager? And what, if any, pressure does this bring to our big banks?”

We think this is an astute question to ask – especially in the UK where peer to peer lending is experiencing dramatic growth.  Meanwhile traditional banks… well not so much.

Associate Consultant Patsy Neville, part of the segment at CG that targets Operating Model & Performance Improvement, shared her wisdom on the pages of  the OMPI blog.  She posed the rhetorical question “if we remember the days when each business had a bank manager?”  What she is truly alluding to, is the disruption of the traditional banking industry as leaner and more efficient P2P sites such as Zopa, RateSetter, Funding Circle .. and the list grows – Patsy Nevillebring much needed efficiency to an industry that has been asleep at the wheel for far too long.  She makes the statement that if banks don’t fight back … our bank manager could be left with a P2P shaped hole in their customers. Ouch.  But then it is her chosen metier to advise businesses on which way to turn.  Sometimes the advice can be difficult to swallow.

Neville notes that Santander and Funding Circle recently announcedGrowth of Active Lenders P2PFA 2014 Q2 a quite sensible partnership.  This may be just the beginning of new trend.

But in the end she closes wondering;

“But how big is the jump between “partnership” and “acquisition”? My money is on pretty small, and I predict, actually expect, we will see acquisitions of P2P lending platforms from other large banks on the horizon very soon. I wonder if our Bank Manager is secretly thinking “Keep your friends close but your enemies closer”?”

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  • Barry James

    @ M

    I think it will be a ‘disaster’ – but not that kind.

    Associate Consultant Patsy Neville writes almost as if the status quo were a good thing and these unreconstructed banks had not just taken us all to the brink of a global disaster from which we’ve yet to recover. Some business model.

    I’m reminded, again, of a story told in Tracy Kidder’s book “The Soul of a new machine” about the emergence of the minicomputer market when the hegemony of the corporate mainframe makers began to crumble – precursor to the PC and all that’s followed since,

    IBM took out a full page ad in the New York Times trumpeting that their entry into it had ‘legitimised the min-computer market’. Upstart Data General followed suit the following day saying ‘The Bastards Say Welcome!’.

    Sometimes it’s the lumbering, overgrown, predators – rather than the agile intelligent under-dogs – that are at risk.


    • crowdfundinsider

      @disqus_DHPLhk7mjO:disqus agreed. When I read Patsy’s missive – I understand these very same lumbering banks are her clients. As you allude to – the question is whether bank management has learned from the errors of the past or will they continue to charge forward without the benefit of lessons learned. They will be disrupted. Just a question as to whether they choose the path of Kodak, Blockbuster, Tower Records etc. .. or something else. IBM actually was somewhat unique in their transformation from a hardware company to a services / consulting company.


  • M

    That would be a disaster .. similar to what happened to Egg.

    • crowdfundinsider

      There is a risk to that but I think (or perhaps hope) banks need to let the new markets flourish. They can participate by partnering or acquiring. If they acquire they must be a willing partner and let the entrepreneurs run the show. This is right up the alley of Clayton Christensen and his theory of disruptive innovation.