24 Oct

Savings revolution – government consults on game-changing £15,000 P2P ISA

Money Global AccountantThe government has finally published its much anticipated consultation on how peer-to-peer (P2P) loans will be included within Individual Savings Accounts (ISAs).

It has been estimated that ISA inclusion will see the sector grow from £2bn to £45bn over the next few years. This is a tipping point for the UK P2P market. It highlights the industry’s shift from niche into mainstream.

It is perhaps more significant than July’s increase in the ISA allowance to £15,000. Why? Because it adds a new alternative to the financial landscape. It proposes a new asset class.

David Gauke, the Financial Secretary to the Treasury, said:

We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they invest and access their savings.

P2P lending is an exciting, innovative new sector and it’s right that investors who want to lend money via P2P platforms should be able to hold these loans in their ISA alongside more traditional investments.

Rhydian Lewis, Founder and CEO, RateSetter said:

RateSetter_RGB_Logo_TM Global AccountantWe are obviously delighted that the Consultation has been launched. The government has stated that it wants to encourage greater competition and choice in financial services and allowing peer-to-peer into ISAs is part of that. The UK is a leader in peer-to-peer lending and inclusion in ISAs will open up the benefits to more British savers and borrowers.

More choice in a market of stagnant rates

The government wants to encourage greater competition in financial services. At RateSetter, we welcome this. We were created with the retail saver in mind to return more value to the customer.

Allowing P2P loans to be held in ISAs also supports the government’s aim to diversify the different sources of finance that are available to borrowers by encouraging the growth of the P2P lending sector.

By allowing the higher rates of interest on offer to be shielded from tax, the inclusion of P2P will breathe new life into ISAs. And the appetite is certainly there: research we carried out with Populus earlier this year revealed that two-thirds of people will consider trying P2P when it is ISA-able.

A “Third ISA”?

Options include P2P loans being held within the existing Stocks & Shares ISA or the exciting idea of a new third type of ISA – a P2P ISA.

We believe that giving savers more choice must be at the heart of this decision. As such, we have led the way in promoting a ‘Third ISA.

It is great news that government is considering a third ISA category to open up a new choice to the polarised options of cash or investments – providing that missing link between low returns and high risk.

This bold new product would be a healthy middle ground, especially in light of the recent volatility in the stock market.

Next steps?

The landmark consultation closes on 12 December 2014. You can read the consultation here. I would encourage anyone interested in getting more from their money to take a look.

Once it has closed, the government will review responses and publish a summary document. Taking all views into account, the necessary legislation will be amended to pave the way for P2P to be included in ISAs.

17 Jun

Barbarians at the gate? Or the making of an industry?

RateSetter1The dam has given way and the large institutions have arrived in UK peer-to-peer (P2P) lending.

Earlier this month – amidst much media fanfare – P2P Global Investments, a London Stock Exchange-listed investment trust, raised £200m from institutional investors to lend through the major platforms.

And this is likely to just be the first wave of institutional money. Now that the major platforms, including RateSetter, are boasting very impressive track records, you can expect to see more interest from institutions seeking income returns.

The influx of institutional money is no doubt a tipping point – it means that P2P is no longer a niche activity.

Rather, it is a serious alternative to the traditional savings and loans industry; to the established order. And the flow of traditional finance professionals into the sector backs this up.

But how will this development impact the everyday savers; the intrepid pioneers who have driven the sector’s exponential growth to date?                                                     

The challenges

There is concern that the community aspect of P2P is threatened by the arrival of the institutions.

It certainly poses some fresh challenges: huge inflows pressuring cautious platforms to compromise their impressive credit standards; powerful institutions demanding favourable terms or simply “re-intermediating the dis-intermediators”, eating into the value that P2P delivers to savers and borrowers.

Savers rightly value the social aspect of P2P. They like its transparency – the open machinery of the market versus the closed doors of the banks.

And the opportunities

But the arrival of institutions – with their procedures, their standards and their ability to aggregate large amounts of money – is a step forward for P2P lending. The scale they bring – the liquidity – allows the platforms to make the significant investments required to maintain a mass-market product.

It is a vote of confidence in the sustainability of the P2P model to become a mainstream way of saving and borrowing – to become the future of finance. Furthermore, many savers will see the credibility of institutional involvement as the green light to try out P2P lending themselves.

Being a new challenger industry, value and service are critical differentiators for success – and so far the industry has delivered on both. The next challenge is to deliver that at scale – and institutional money will aid this process.

Holding the line

Integrating institutional money responsibly and successfully will be a major test for UK platforms – (it is already standard for institutions to lend on the US platforms).

The emphasis is on the P2P players themselves to hit the right balance and ensure that normal savers can compete on even terms with the institutions.

Rhydian Lewis, RateSetter CEO and Founder, said:

Our vision is simple: create an open market and ensure everyone is treated the same.

We offer a market where people decide the fair rate for money – the key is that normal savers can express themselves on the same terms as the institutions. They can both set the rate that suits them.

We fought hard to ensure the everyday saver – whatever their deposit – is able to access the market easily and isn’t forced to go via an intermediary. This has been a hard-won regulatory victory – one that is re-defining the level of control people have over their money.

For me, it is imperative that these open market principles are maintained. We will not allow any moves that disturb the balance of our fair market.

If the platforms bow to all the demands of institutional money, it could be – I believe – the end of P2P as a value proposition.

Get the balance right, however, and the platforms have the potential to cause massive disruption to the traditional ways of lending and borrowing.

So – keep a fair market and “peer-to-peer” can move seamlessly to “many-to-many.”

15 May

Too big to fail? Barclays takes another hit

SmallisBigIn another damaging blow for the “under pressure” banking industry, Barclays recently announced that they will be cutting a total of 19,000 jobs worldwide by 2016, with 7,000 of the lay-offs coming from their investment banking division.

The banking giant has said that the business will be ‘repositioned, simplified and rebalanced‘. CEO Antony Jenkins believes it will make them ‘leaner’ and ‘much better balanced’ in the future. He also mentioned that they will only be focusing on international banking where Barclays has ‘capability, scale and competitive advantage.’ It has subsequently been estimated that about 7,000 of the total will be from bankers based in the City of London – 2,000 of whom will be from the investment arm. High street banks in France, Portugal and Italy are also in the firing line.

The new player in the finance arena

In the wake of the news, many commentators believe that as these jobs are shed, so will be a significant part of British banking tradition.

Charlotte Webster, Campaign Manager for MoveYourMoney, said:

As 19,000 jobs go at Barclays, so too does part of British Banking history. And this is not one we remember with great affection, lets face it. Despite their scale, as one of the five banks often termed ‘too big to fail and too big to jail’ they represent the old school. Meanwhile people are talking with their feet, with 2.4 million people opening accounts with other providers that offer more transparency and don’t combine investment and retail arms. Britain is already moving on to a new financial system, with new jobs as the UK leads the alternative finance revolution. Looking for a fresh, modern approach to finance, peer to peer lending volumes in this country alone are doubling every six months. The world of finance is on the move, driven by people not the banks.

Charlotte looks spot on in highlighting peer-to-peer (P2P) lending as the future of finance in light of recent industry figures. For example, a report published by the Peer‐to‐Peer Finance Association (P2PFA) in April shows that cumulative lending in the UK at the end of the first quarter in 2014 hit £1.2 billion, compared to just £491 million at the same period of 2013. The data also highlighted strong growth in both business and consumer lending with over 5,100 business borrowers and 82,000 consumer borrowers supported by more than 94,000 lenders at the top British platforms, including RateSetter.

Commenting on the figures, Christine Farnish, Chair of the P2PFA, said:

Peer-to-peer lending is becoming mainstream and is a credible alternative to banks for consumer and business finance

RateSetter Global AccountantRateSetter CEO Rhydian Lewis echoes these sentiments, and is quick to point out that, whilst the industry has certainly taken root since the 2008 banking crisis, P2P does not rely solely on bank weaknesses in order to prosper.

It is growing because it is offering better value and service and consumers are choosing to use it. Designed with the customer in mind and unburdened by legacy issues, it is proving to be an efficient means of matching the supply and demand of money.

With the sector now regulated by the Financial Conduct Authority, the onus is on the P2P platforms themselves to build strong businesses and continue to deliver better outcomes for savers and borrowers than has been the case with the traditional banking service.


12 Apr

‘Bricks and mortar’ banks facing increasing competition from ‘booming’ internet finance services

In my last blog, I talked about how peer to peer (P2P) lending is making a real breakthrough in 2014 as an attractive alternative to traditional financial institutions.

It has really taken root since the 2008 banking crisis, but does not rely on bank weaknesses in order to prosper. Free from expensive overheads and legacy systems, it is fast proving an efficient means of matching the supply and demand of money and is growing rapidly.

The scale of growth, on a global scale, is now truly staggering.

The South China Morning Post is the latest respected commentator to pick up on the sense of excitement in the industry. It has reported how internet finance firms in China are filling the sizeable lending gap left by state-backed banks.

Gregory Gibb of Ping An Group subsidiary Shanghai Lujiazui International Financial Asset Exchange, which runs a top P2P lending service, spoke at the Boao Forum on the benefits of P2P.

Discussing how P2P lenders cut out the intermediaries, and therefore the costs and inefficiencies, between savers and investment vehicles, he said:

In China, most loans are not a lot of money, ranging between 30,000 yuan and 50,000 yuan. If you borrow that amount through traditional channels, the operational cost will be high as banks may feel it’s not good business.

But internet finance can offer that at low cost and thus cover a market wider than traditional banks, reaching micro businesses and SMEs.

UK P2P pioneer RateSetter has picked up on the massive opportunity that the sector offers to savers all over the world.

Building on its UK success, in which it helped to create the Peer-to-Peer Finance Association, RateSetter has secured investment of AUS$3m from local and international investors to kick-start its offering from its Sydney offices.

Headed by Daniel Foggo, a former banker with Barclays Capital and NM Rothschild in Sydney and London respectively, the company will be the only Australian P2P company offering market-beating savings rates to individuals who lend funds on its platform and accessible loan rates to everyday borrowers who are tired of banks’ hidden fees and profiteering.

RateSetter will go live in Australia this summer. It will be the first P2P lender in Australia to be fully regulated from the outset, allowing all Australians to participate on its award-winning platform, not just professional investors.

Rhydian Lewis, founder and CEO of RateSetter, said:

RateSetter Global AccountantWhen looking at international markets in which to expand, Australia was the obvious choice as it bears great similarity to the UK before the advent of P2P lending. Its saving and loans industry is ripe for disruption as banks have been offering below-par deals for too long with little true competition.

We have decided to focus on strategic growth markets such as Australia, which is a natural stepping stone to the huge opportunity in Asia. Targets closer to home on mainland Europe will not be overlooked, however, and initiatives there are already in train

The future is bright for P2P – it is one industry to keep a very close eye on!

01 Apr

The Rise of Peer to Peer Lending

Peer to peer (P2P) lending is a simple concept with a growing international appeal, especially in the UK, the US and China.

Essentially it is the practice of lending money to unrelated individuals, or “peers”, through web-based platforms. This online process cuts out the costs and inefficiencies associated with traditional financial institutions and provides a win/win situation as both savers and borrowers can access much better rates.

Amidst a groundswell of publicity, many commentators see 2014 as the year for P2P in the UK. Firstly the Chancellor announced his intention to include P2P within the lauded NISAs and then FCA regulation of the sector, which came into effect on 1 April, added another stamp of approval.

The sector is also being driven forward by record low interest rates and technological advances, known as FinTech. An increasingly viable source of funding for entrepreneurs and start-ups, it provides an attractive alternative for owner-managers as the failure rate for bank loan applications soars.

However, while the recent media attention will no doubt introduce P2P to new audiences, RateSetter CEO, Rhydian Lewis, believes that, whilst regulation is a solid foundation, more needs to be done by P2P platforms to earn consumer trust and ensure that the industry grows as a credible challenger to traditional financial institutions.

An intelligent choice for smart savers

RateSetter is a pioneer with a ground-breaking proposition that lets savers and borrowers set the interest rates they want via a safe and fair online platform.

A young, entrepreneurial company established in October 2010, RateSetter recently hit the £200m money matched milestone.  The business grew at 219% in 2013 (according to NESTA) compared to overall sector growth of 109%, making it the fastest growing major P2P company in the UK.

At a time when UK P2P lending has exceeded the £1bn mark, Rhydian believes it is now up to the P2P players themselves to bolster consumer confidence by putting adequate measures in place to prevent savers from losing money.

RateSetter’s Provision Fund already addresses this issue, ensuring savers are protected against borrower defaults. Their fund remains the biggest by a large margin, currently standing at £3.7m and growing at over 16% on average per month last year. The fund currently covers anticipated bad debt by 180% and is expected to reach 200% in 2014.

The key point here is that, if P2P is to become a mainstream alternative to banks, P2P providers can’t simply rely on regulation and must take steps to protect their lenders.

To date RateSetter is the only P2P platform of scale that can claim 100% compensation with not one of their savers, which number over 11,000, losing a single penny.

This year has provided the conditions that open up a massive opportunity for the P2P industry. It is essential that savers do their research before entering the sector, but there seems little doubt that P2P represents the future of the savings and loans market – no banks, low fees and market-beating rates.

28 Oct

US Job Search

Job Interview_Global_AccountantYou should be well prepared to welcome “good fortune”. I finished my last AICPA exam on 12 August 2013, had an interview 14 August, received a job offer the same day, and began to work on 22 August.

I would like to share some tips with you.

Use LinkedIn more often

There are two main functions of LinkedIn. The first is for employers. Employers use LinkedIn to search for candidates like you, view your profile and your connection and make sure you keep your profile up to date. Yes, not only your profile, but also your connections. Use attractive buzz words in your profile. Such as accomplished, solved, contributed, made possible, initiated, motivated etc.

Many people neglect other function of LinkedIn. Build your network with professionals. You can send an invitations and ask for advice. You can learn from their profiles and improve on how to write your own job description. You can join in groups which are useful for collaboration and exchanging ideas and links. What’s more, you can introduce yourself to firms, partners or HR managers of which you may consider your ideal workplace in Big 4 or Fortune 500!

Visit and subscribe to other job search websites

Choose your preference, and set alerts to be sent to your email account. Once new jobs become available and those which suit your search criteria, these websites will send you an email.  Below are some websites I used:






Make each bullet point specific in your resume

I know it is hard to do resume critique. There is a vast amount of available resources at your university (which most students or recent graduates fail to utilise), use networking sites more effectively rather than for social reasons. Remember, once your CV has passed the elimination stage it will be reviewed swiftly. So keep it short but precise.

For example, use lines in your CV such as, you interned in a company as a staff accountant. You have no idea how to describe what you’ve done; or the luxury to write about your whole experience. What will you do? Go ahead and use search engines, find people who have similar experience to yours, and then figure out how they described their experiences.

Many employers use specific keywords when searching for recruits. Make your resume unique and specific, then you the odds may be on your side in getting noticed.

For instance, if an employer carries out a search on “accounts payable” and you include those two words, you will be found!

Moreover, employers prefer candidates with initiative, leadership, teamwork and analytical skills. Let your resume speak loud for you. You need to remember, your resume is your key to an interview.

Regard your interview as a SHOW

Find potential interview questions and think of as many situations and examples as you can. Then be prepared for those questions. Be familiar and make sure you are able to explain each word in your resume. Rehearse, rehearse and rehearse again! Eventually, you will be a star in your interview show!

Follow up after career fairs and interviews

It is always a good idea to send a letter of thanks to each recruiter you talked to right after career or interview. Briefly introduce yourself and thank them for their time and efforts. I did exactly that. After one particular career fair last semester in spring 2013, I sent out “Thank-you” letters that evening. One reply really surprised me. The recruiter said I was the only one to follow up with him that evening! He was impressed and strongly recommended me to do this after each interview.

Accept the honour of Beta Gamma Sigma

Beta Gamma Sigma honours the top 10% junior and senior undergraduates students and top 20% graduate students. It’s the highest academic honour at the College of Business at UIUC. It also provides a lot of professional resources and all kinds of member benefits, such as free shipping from the Apple store. Members will even get a chance to be honoured in the commencement!

Don’t overlook those employers who do not provide sponsorship (This is for non US nationals)

You probably are looking for a company which can sponsor your H1B visa. If you can, that’s great. Otherwise, why not give other companies a shot? With one more year in the US, you will meet new people, build your network, keep on looking for new opportunities and roles, or even persuade your current employer to provide sponsorship.

The above describes my recent past. If you have difficulty in understanding what your standing is in respect of your visa requirements, consult a lawyer. I consulted several lawyers. Their replies were really motivating. In a nutshell; as long as your employer agrees to sponsor you for a H1B application, even though they many have never provided sponsorship before, it is doable!

Work hard!

Jun (Coco) Qiu is US correspondent for Global Accountant and  Staff Accountant at Regency Consolidated Residential LLC which is a real estate company awarded “The Best in the Industry” for the last six years.