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Mobile Marches Forwards




By Ryan Weeks on 16th March 2016

Maurizio Pesce, https://goo.gl/8uOsF4

Mobile is establishing itself as the primary means of borrower acquisition in P2P lending

 

Mobile devices are becoming an increasingly important part of the customer acquisition jigsaw for alternative finance providers. We first observed this trend back in May 2015, when two of the UK’s leading peer-to-peer lending platforms were experiencing a surge in mobile activity. We found in May that mobile had become Zopa’s most lucrative means of borrower acquisition, with lender on-boarding via mobile on the up as well. RateSetter was charting a similar course, with mobile and tablet acquisitions responsible for over 40% of the platform’s borrowers.

 

The value of mobile as an origination channel in online lending is clear. Mobile application and account management simply serves to accentuate some of the core benefits of the established online lending model, namely; speed, transparency, control and convenience. What’s more, customer referral via smart phone or tablet device entails limited friction – a potentially important point for lenders looking to drive down customer acquisition costs.

 

Another major benefit of mobile as a means of customer acquisition relates to credit assessment. A vast amount of behavioural data is stored up within the world’s mobile networks. Alternative lenders are able to turn such information to the purpose of indicating creditworthiness. In China, online payments platform Tencent Tenpay has over 800 million users. The digital footprint of those customers is gold dust to the nation’s leading online lenders – which often cannot rely on credit bureau data to cover all applicants.

 

We’ve reached out to Zopa and RateSetter for a refresh on their mobile acquisition numbers. The results reflect the continued growth and importance of mobile as a means of customer acquisition.  

 

Zopa

 

Borrowers

 

March 2015

March 2016

Tablet

16%

15%

Mobile

34%

43%

Desktop

50%

42%

 

Lenders

 

March 2015

March 2016

Tablet

16%

15%

Mobile

14%

17%

Desktop

69%

68%

 

RateSetter

 

Borrowers

 

March 2015

March 2016

Tablet

13.45%

13.88%

Mobile

27.44%

39.96%

Desktop

59.11%

46.16%

 

Lenders

 

March 2015

March 2016

Tablet

11.85%

15.21%

Mobile

14.09%

16.68%

Desktop

74.07%

68.10%

 

The effectiveness of the desktop is – for both platforms – being eroded in favour of the mobile device. Two further trends are observable in the data. The first is that mobile acquisition has grown far more quickly than tablet acquisition over the past year. Indeed, Zopa is acquiring less lenders today via tablets than it was 12 months ago. The second point to note is that mobile is clearly more effective as a borrower acquisition channel than as a means of acquiring lenders. Both Zopa and RateSetter attain a little over 15% of their lenders via mobile devices. Conversely they acquire 43% and 40% respectively of their borrowers through mobile. The data also demonstrates that – for both platforms – the combination of borrowers acquired through tablet and mobile devices outweighs those acquired via desktops.

 

It’s worth remembering that peer-to-peer platforms are generally speaking constrained by a shortage of borrowers, with plenty of lending capital to spare. The significance of the mobile channel is thus all the more pronounced.

 

Bear in mind also that the mobile trend is not limited to P2P. Digital consumer finance company 4Finance – which has to date issued over €3 billion in single payment and instalment loans across 14 countries – is exhibiting a similar kind of growth. The company has seen 31% of its 2016 loan applications come via mobile device, up from 22% in 2015. In the Mexican market, which 4Finance entered into at the end of 2015, over 40% of applications have been sourced via mobile.

 

We’ll doubtless return to this subject in the future, and I expect to be telling a similar story – one of continued growth – when we do. Femi Ajayi, SEM manager at RateSetter, commented on the growth of mobile:

 

“This is in line with what we’d expect, and also with wider industry trends – we anticipate this shift toward mobile use continuing in future.”

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