But as my FT column this weekend confirms (the link is at http://www.ft.com/cms/s/0/4f890e6c-1b9d-11e3-b678-00144feab7de.html?siteedition=uk#axzz2f3SkpsFY) that's about to change. Specialist City bank Liberum is, absolutely, wading into this space with plans for the flotation of its new Exchange Associates outfit. It's a bold and brave move raising up to £200m for a London stock market listed entity that will dedicate its time to international P2P platforms, but it could well tickle the fancy of a range of smaller institutions and wealth advisers.
We're still many weeks away from knowing whether Exchange Associates will actually raise the money but if Liberum's P2P seminar last week is anything to go by - at the plush surroundings of The Dorchester in Central London - I'd wager that wealth managers will probably stump up the money, tempted by the diversified yield on offer.
What started as a small gathering for 40 select wealth advisers quite quickly snowballed into a well attended event for over 100 investors, plus the assorted journalist or two. Crucially most of the major platforms were at the event, with a few international players lurking in the audience at the back.
I'm not about to give you a running commentary on what was said at the event but a number of themes emerged that I think are hugely revealing for the P2P space.
In absolutely no order of prominence I'd suggest the following:
The dog that didn't bite - fraud
. Lord Young provided the valuable government perspective - and support - but also I think correctly identified the big threat: What happens to the P2P space when the first big fraud starts to hog the newspaper headlines? Couldn't P2P end up doing a Wonga, invited for tea with the Archbishop at Lambeth to discuss the morality of the business model? Yet speaker after speaker from the sector suggested that anti fraud procedures in the sector were in fact every bit as tight as the mainstream banks - if not tighter! Quite the most revealing statistic came from market leader Zopa, which revealed that it had only suffered 2 frauds to date.
The quantum of growth
. Everybody and their mum by now knows that P2P is growing fast but the number that kept coming through from the speakers was a three fold quantum of growth over this year and the next few. Zopa for instance seems to be running at £20m a month whilst the invoice funding platform was at £3m a month. Funding Circle chipped in with £14m a month. If I were a betting man I'd suggest that the top 5 players across the sector (Zopa, Ratesetter, Funding Circle, MarketInvoice and Platform Black) could be running with a combined £175m a month by Q4 in 2014 - implying a £2billion pa run rate.
Defaults are still running low
. According to Zopa and Ratesetter default levels continue to remain very low for these big consumer platforms, but that story is also echoed by the likes of Platform Black which revealed a default rate at under 0.2%. Interestingly in private discussions afterwards, Trustbuddy - a Swedish outfit that is aimed at the P2P short term lending market - also confirmed to me that their default rate was still running at just 1% per annum for what must be an intrinsically riskier marketplace. No doubt these levels will rise if the economy starts to slow down, but everyone at the event seemed confident that we wouldn't see an explosion of bad debt
Insourcing debt management picks up speed
. Quite the most interesting discussion centered on how the big platforms will cope with an upsurge of defaults, especially at the corporate level. Platform after platform confirmed that they either planned to, or had already insourced their default management systems - taking contracts for chasing debts back into the organisation so that they could better manage debt collection.
The Market Gaps are still huge
. Even if we believe those numbers on the quantum of growth, it's clear that there's continued opportunity for growth. Relendex for instance reckons that its addressable market is worth £120 billion, while Platform Black suggested a market that could be worth £254 billion. Zopa confirmed that it had loan demand 10 times its actual advance whilst US based Funding Circle had allegedly turned away $18 billion
Technology, technology, technology.
Last but no means least, the simple scale of transactions on these platforms is already hugely impressive, if we're to believe the industry leaders. Funding Circle for instance confirmed that over just 4 days it had had to deal with over 1 million individual data points ranging from new investments through to secondary market trades. At this scale it's clear that the sector could already cope with increased demand. My own personal 'no shit' moment came when Funding Circle's CEO confirmed that it takes just 25 minutes to liquidate a portfolio on its secondary market at par value. And if you need any confirmation that the technology involved with these credit scoring and transactions based systems is already pretty impressive, then look no further than the statement by Zopa's CEO that it had been approached by one consultant to see whether it would white label its credit system to a big mainstream player.