By Roger Baird on 22nd March 2019
The Passion Capital co-founder says increased scrutiny will lead to improved behaviour.
A co-founder of the world’s first peer-to-peer lender is “worried” that fintech firms will suffer the same consumer backlash that BigTech is wading through.
Zopa co-founder Giles Andrews (pictured, left) said: “In some cases across fintech, the focus on the customer is being potentially lost. I am worried that there is a slight shift in focus from the customer towards aggressive expansion.”
Andrews was speaking on a two-person panel about the potential of a fintech backlash with Eileen Burbidge (pictured, centre), a founding partner of venture capital business Passion Capital, which backs a range of digital firms such as online bank Tide and financial information company DueDil, at the sixth AltFi London Summit earlier this week. Andrews helped launch Zopa in 2005.
The talk comes after BigTech giants, such as Amazon and Google, have faced calls for tough new legislation for pushing out rivals, paying low rates of tax and selling consumer data to third parties without their customer’s knowledge.
Google was slapped with a £1.3bn fine by the European Union for blocking rival online search advertisers on Wednesday. It was the firm’s third EU anti-competition fine in under two years, meaning it has paid out a total of £7.1bn since 2017.
Earlier this month, it emerged that digital bank Revolut, valued at $1.7bn, is being probed by regulator the Financial Conduct Authority, over whether it has flouted anti-money laundering controls. The bank has raised around $340m in venture capital and has amassed over 4m retail customers and 80,000 business customers across Europe since launching in 2015.
Burbidge, who did not mention Revolut, said: “It is an open secret that the greatest financial diligence is not being applied across the whole of the fintech industry.”
But she added the “call out” came earlier that Wonga, the payday lender, which collapsed into administration last August, following a surge in consumer compensation claims amid a government clampdown on high debt repayment fees that totalled as much 5,000 per cent a year.
Burbidge, who is also head of the government-backed Tech Nation, which promotes the digital economy, added: “Are we are going in the right direction? Absolutely. Scrutiny is always a good thing. It leads to improved behaviour.”
Zopa’s Andrews said: “The public is always sensitive to any form of misselling. We are a lending business, and ultimately we will be judged on the quality of our lending.”