Tech City: Fintech companies going head-to-head with banks
- Credit: Archant
A leading peer to peer (P2P) lender has predicted that the industry will account for a third of all business borrowing in the next five years.
Anil Stocker, 31, co-founder and CEO of fintech company MarketInvoice, said: “The industry did £2 billion last year and we are aiming to reach £25 billion in the next five years, which will take a huge chunk out of what banks are doing.
“That can only be good for the consumer to give them more choices, they will not just be limited to high street banks. I think eventually all aspects of banking will be disintermediated by fintech players.”
Small to medium-sized businesses are increasingly looking to P2P funding within Tech City over the stringent terms and conditions set by mainstream banks.
MarketInvoice’s online platform gives clients access to funds in outstanding invoices which are otherwise tied up for between 30 to 120 days.
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Businesses can register online and get access to funding on the same day.
Anil said: “Cash flow is the oxygen that keeps businesses alive, this is the money they need to pay their suppliers, cover overheads and so on. With MarketInvoice, it is super fast to get set up and get a decision with 24 hours.
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“The process is quick, transparent and flexible – just when they need it – unlike with banks, businesses don’t get locked into long term contracts and it is generally a lot less hassle than going to the bank as well as helping companies who wouldn’t get as much funding from them.”
Anil said the main challenges of building the fintech brand, which was founded in Old Street, from scratch, was a limited budget and persuading business owners to trust the model would work.
Eventually businesses to business referral led to growth in the company, which has issued more than £450 million in over 7,000 loans since it was founded in 2011.
He said: “There is a lot of animosity against the banks. The UK has been dominated by them for the past four or five years and we were really shocked business owners, both old and young are really looking to move away from the banks. They want a better service and want it to be all online.
“I really think this will be the mainstream way of getting funding.”
He continued: “It’s quite cool that Tech City is on the edge of the city; we benefit by a lot of people in finance thinking they are fed up and want to part of something new.
“People have thought that what banks do is difficult and complex, but it’s not and technology makes it easier.
“People are excited by technology shaking up old industries.
“You see that in music, travel and retail: finance is ripe for disruption.”