By Rupert Taylor on Friday 11 September 2015
Hargreaves Lansdowne has confirmed plans that it will build its own P2P lending platform. Rumours began in December 2014 and were fuelled in early 2015 when Chief Executive Ian Gorham made positive comments on HL’s participation in the sector, explaining that “This is a market that is a very good idea but it’s very sub-scale and if there’s one thing Hargreaves can bring, it’s scale.”
Gorham continued, “If only a small proportion of our customers take part, that could still make us the largest peer-to-peer lender by some considerable way.”
Such a confident assertion from the UK’s market leading provider of pensions and savings product should be taken very seriously. The company has in excess of £50bn of client assets around 10% of which is presently held in cash.
In the company's preliminary results published this week they have confirmed plans revealing that they have initiated a project to build their own platform as part of a broad review of client cash management that they describe as a ‘digital deposit service’. This service will allow customers to switch more easily between conventional deposit offerings or to choose to deploy cash on their own P2P platform.
News of the P2P platform was further explored at their results presentation where HL revealed that they intend to lend to both consumer and SME markets. They also reference a plan to ‘simplify some of existing market complexity and apply innovation’. Understandably they remain cagey about details and made reference to commercial sensitivity to explain the limited disclosure at this stage. However the company did highlight that they recognise their large asset base to be a USP and seemed to intimate that as well as the obvious opportunity that this gives them to lend significant sums it may also help to price borrower risk. This suggests that as well as HL customers being offered the chance to enhance the returns on their cash from lending money, they may also be able to use the service to borrow cash at more attractive rates.
Whilst the incumbent UK p2p market leaders will doubtless be watching the arrival of Hargreaves with interest they may take some comfort that the launch is still some way off – expected for Autumn 2016.