KPMG offers an examination of the issues that may help manage what we expect will be an escalation in regulation of the P2P and B2B lending and investing industry. Its steady growth is starting to make a dent in the lending activities of traditional bankers, causing regulators to consider widening their role in this emerging industry.
As the growth of the marketplace-lending-platform industry is escalating, so too is the urgency for participants to focus on new and over-the-horizon regulatory scrutiny.
KPMG believes the success and expansion of the P2P and B2B lending/investing industry, as described inValue-Based Compliance: A Marketplace Lending Call to Action (PDF 2 MB), has resulted in more regulators turning their attention to this fast-growing segment of the financial services industry.
If nothing else, that kind of attention increases the stakes on the marketplace lending (MPL) players to get much better at their regulatory oversight and transparency capabilities.
KPMG’s paper describes how the industry’s underlying technology – algorithm-based platforms that operate online credit marketplaces to connect borrowers, lenders and investors – is no longer a curiosity. There are at least 50 platforms in operation in mature economies, and high-profile institutional and individual investors are gobbling up the securitized debt created by the industry.
Value-Based Compliance: A Marketplace Lending Call to Action (PDF 2 MB) includes an explanation of KPMG’s Marketplace Lending Value Chain, including the platforms, the investors, the regulators, the borrowers and the bank partners.