NEW YORK, NY. – Many important conclusions can be learned when comparing peer-to-peer data from the United States and United Kingdom, Altfi Data’s CEO Rupert Taylor said in an address at the 2015 Altfi Global Summit in New York today.
While the US market is four times the size of the UK’s, when you consider their respective populations both are important players, Mr. Taylor said.
The makeup of those markets is quite different, however. Roughly 80 percent of investment in the US comes from institutions. The UK share is 42 percent and growing.
More than 90 percent of US altfi activity is in the consumer space, Mr. Taylor said. The UK market is more segmented as property and invoice financing are among the industries contributing to that diversification.
At first glance, the market is dominated by the big players. In the UK, the three biggest control 60 percent of the market. Two players control that share stateside.
Dig deeper and the two regions diverge, Mr. Taylor said. Consolidation has started to occur in the UK, not surprising given its lengthier history. Their three biggest players are gaining market share.
Their second level is also more developed, Mr. Taylor added. An additional 14 companies have at least one percent market share across the pond.
America’s market is still forming. Prosper and Lending Club are still the dominant players but their share is not yet growing. Only six other platforms have at least one percent of market share.
The two countries display additional differences which reflect their respective risk tolerance levels. The UK tends to be more conservative while the US is characterized by greater volatility and return. Those differences are narrowing as the UK market takes on more risk.
Average loan sizes are growing at similar rates while bad debt rates are lower in the UK due to the use of contingency funds designed to protect investors, Mr. Taylor added.
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