P2P Lending Apps Swamp UK Regulator

Reuters reported on Thursday (March 31) that, in the United Kingdom, “a flurry of companies” have been busy pursuing authorization to boost, or create, their peer-to-peer (P2P) platforms that would, in turn, allow those companies to enjoy the benefits of a program focused on investing in tech startups. The interest and growth in applications was noted by the U.K.’s Financial Conduct Authority (FCA).

The result, said the newswire, has been a bottleneck in turning those applications around, and this implies that the go-ahead to operate those platforms may be stymied, at least temporarily.

The FCA said that it had authorized eight firms to operate such platforms, with interest in facilitating payments between people or between people and various enterprises. The lure comes with such tech upstarts offering a traditional bank alternative. But 86 firms remain in the queue, with 44 having interim permission from the FCA to actually operate. The impetus to file and await permission has its roots in the Innovative Finance ISA, which the newswire billed as a “tax-free savings product” that has been designed to stimulate tech investment at the enterprise level.

The FCA has said that it wants to promote competition in the P2P lending industry but acknowledged the need for a set of standards in place. However, it can take a year before decisions are rendered about whether a new platform may be authorized.

In a statement the FCA put forth in response to the initial enthusiasm of firms: “We are working closely with individual firms to ensure they meet the rigorous statutory standards and are authorized as quickly as possible.”