Increase P2P lending strategies
As the alternative finance market develops and matures, competition is becoming increasingly fierce.
With these challenging market conditions in mind, it’s critical that P2P lenders and crowdfunding platforms
pursue the right strategies to maximise their own growth potential. Those organisations who choose to progress
without a clear plan of action risk leaving themselves vulnerable when competing with more strategic rivals.
Here are a few growth strategies leaders in the sector are adopting to enhance their own market position and
potential.
Luring business away from banks
In the space of a decade, lenders have gone from serving the customers who struggled to raise bank finance, to
competing directly with the banks themselves on traditional business loans.
Offering a number of advantages over banks, including better customer service, quicker onboarding and
approvals, and more responsive automated platforms, alternative finance lenders are leveraging their capabilities
to drive growth in this sector.
However, it’s still not easy to compete as a lack of brand awareness, marketing resource and volume of
established customer relationships make it difficult to challenge the banks and their scale.
Channel partnering
By partnering and integrating with other organisations, lenders are enhancing their level of access to prospects
and customers, particularly in the SME sector. Banks, accounting firms, business associations and universities
all present opportunities to widen reach and many alternative finance organisations are taking full advantage.
Internationalisation
Many lenders are looking beyond the shores of the UK to grow their business. With the European market
expanding fast and offering significant opportunities, the potential is high, although challenges around multiple
currencies and different regulatory regimes make it tough to succeed.
Product/Sector diversification
Most lending platforms have built their initial success on a single product category, such as P2P loans or invoice
financing. These organisations are now moving away from this focused model and are diversifying into other
areas to maximise their growth potential. By continuously developing new and innovative products to match
evolving market conditions and customer needs, alternative finance providers are branching out for the benefit
of their customers and their bottom line.
A push to retain customers, rather than acquire
With a view to driving growth, some organisations are investing their efforts on improving customer retention,
over winning new customers. This strategy is often pursued by ensuring customer satisfaction is optimised at
every commercial touchpoint and engagement.
Cost reduction
Some alternative finance companies are focusing their efforts for growth on maximising their profitability, and
this often comes down to good cost management. Most are looking for ways to scale without incurring
significantly increased operational costs. Organisations who achieve this ambition will have a major competitive
advantage in the market, now and into the future.
With so many opportunities for growth, P2P lenders and crowdfunding platforms must choose the strategy that
suits their businesses’ capabilities to maximise their potential. By choosing the right strategy, alternative finance
organisations can effectively compete in a hostile market and drive ongoing business growth.