Banks Offering Local P2P Networks

Current headlines are dominated by traditional institutions becoming minor or even major players in fintech platforms globally. This week it was announced that BlackRock made an investment of £12.7 million in Funding Circle. Similar activity is mirrored by companies such as Goldman Sachs, JPMorgan and DBS in Singapore. While these large institutions are making waves in the digital finance space, similar size opportunities are being exploited by community banks and institutions in the form of local P2P networks.

The aim is simple, institutions with a network of local or “community” banks are providing their customers an alternate avenue to raise capital if they cannot do so within the physical branch. This comes in the form of onboarding these customers onto a digital finance portal which they operate. The motive for the institution is clear and with the rise of “collaboration” it makes entering the market effortless.

​The need for collaboration is framed very well by Eyal Lifshitz of Techcrunch: “Technological advances have raised consumer expectations for a personalized, integrated service, while also reducing the barriers and cost for new entrants to do so, putting banks in a vulnerable position. While startups may not have the infrastructure and systems that give banks their staying power, they aren’t burdened by the legacy systems common in big banks”

Local P2P platforms often sit outside the legacy banking infrastructure and leverage cutting edge technology to automate AML/KYC checks, credit scoring, disbursement and payments. By operating in the “cloud” platforms both future proof scaling and mitigate internal controls to enter the market efficiently.

Originally published at You can read the full story here: