The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Social Lending’ Category

the pinstripes are chasing the poor | TIME

Microfinance, small loans in impoverished areas is becoming business that is interesting the large Banks.

The Big Trouble In Small Loans – TIME

And he’s getting more of them, from directions he never could have anticipated. Last year the Spanish multinational BBVA raised some $300 million to invest in microfinance, then reached across the Atlantic to snap up two Peruvian firms. “Everyone wants to do this now,” says Llosa. “And it’s not only Peru. This change is everywhere. Everywhere microfinance is working, it’s happening.”

Written by Colin Henderson

June 6, 2008 at 10:22

Posted in Social Lending

When will web 2.0 meet reality?

This is an important article in todays FT, that is summarised well in this first paragraph. / Companies / Media & internet – Web 2.0 fails to produce cash

Many members of the Web 2.0 generation of internet companies have so far produced little in the way of revenue, despite bringing about some significant changes in online behaviour, according to some of the entrepreneurs and financiers behind the movement.

The idea of web 2.0 germinated shortly after the crash that happened in 1999 / 2000. Three things have happened since then, at the macro level:

  1. the rise of the social web
  2. the rise of new web based tools, and a shift away from PC based tools
  3. the rise of advertising as a model, with Google being the poster child

What is highlighted in the FT article is that web 2.0 has not produced any new business models of consequence. There has been talk to SaaS (Software as a Service) but so far just talk. It seems ludicrous to suggest that an entire economy would shift from a diversified revenue model to one of advertising, yet many web 2.0 guru’s still speak as if that day is coming. The consensus in Silicon Valley appears to be that advertsing is the only means of making money in the future.

Its time for a wake up call in terms of how web based companies and that includes Banks online, would make money in the ‘new economy’ if there is in fact such a thing. I know from personal experience with CommunityLend that building a service in that is web based, and that challenges the norms, requires to address regulatory needs for example, and it is hard work.

The article speaks about the expectation, espoused in the recent Charlene Li/ Josh Bernoff book, Groundswell, that the holy grail lies in making the connection between the social graph, and personalised advertising.

At the start of the decade, Google struggled to find a suitable way to
make money from search before alighting on the keyword advertising that
has underpinned its fortune. A similar hunt for forms of advertising
that suit the social media – where users want to engage with each
other, not corporate brands – has proved difficult. By common consent,
the key to commercial success lies in co-opting the crowd, though few
have so far succeeded.

A key hindrance to the above, is that people interact in social media because they want to not because they want to be advertised to. Back to the work at CommunityLend, making the link between social connections, and economics is complex, and introduces many nuances that have not been previously encountered. More to come on that.

Written by Colin Henderson

May 27, 2008 at 11:42

Question for Zopa | is that 10K registered or 10K real customers?

Zopa are reporting 10,000 members in their US service. At first I was highly impressed and pleasantly surprised, however on reflection, I now question this number.

Is it:

  1. registered members with investments or loans at Zopa? (lower but a ‘real’ number)
  2. registered users of the site (always a higher number)

Both numbers have importance, but the Finextra press release is written to suggest that the 10k number relates to 1. but I am betting now that it relates to 2.

I can’t locate this info on Zopa’s blog, something I also find odd … so am posting here.

Anyone from Zopa care to comment and clarify?

Finextra: Zopa reports 10,000 US members

After its first full quarter of operation in the U.S., Zopa, an online lending company that uses the power of community to help people reach their goals, has reached a number of significant benchmarks for success.

In addition to growing to more than 10,000 US community members, a number of Zopa borrowers have actually achieved a negative effective rate on their loan.

Written by Colin Henderson

May 3, 2008 at 13:34

Posted in Social Lending, zopa

Tagged with

Digital Money Forum conference – 2008

Off to London now for the conference. I am really looking forward to this event, and the content. The panel in particular should be an interesting chat.

Co-participants are:

Expert Panel: Meet the Bloggers

Moderator: Steve Bowbrick

Chris Skinner, Balatro

Aneace Haddad, Welcome RT

Colin Henderson, Bankwatch

Scott Loftesness, Payments News

Dave Birch, Digital Money Blog

I am sure we will get into some good discussion about whats wrong with payments, and missing in electronic money/ smart cards/ alternative financial services/ social lending. What really interests me, is that I feel I know each of these participants personally, yet have met none of them … until Thursday.

I will be live-blogging while there, so if you are interested, feel free to listen in/ chime in. You can also follow quick updates here.

[ Digital Money Forum ]

The goal of the Forum is to encourage discussion and debate around the real issues at the heart of electronic money in all its forms. In addition to this Forum, every autumn we organise the annual Digital Identity Forum (see the web site at for more details), the sister event to the Digital Money Forum

Written by Colin Henderson

April 21, 2008 at 21:40

Beginning the conversation about p2p Lending in Canada

Shameless plug: Its been a long haul, but we are making progress, and this week launched our blog at CommunityLend. /Shameless plug

As we evolve the conversation, I want to get beyond what happens here at Bankwatch, which is Bank oriented, and focus on p2p Lending in Canada, and around the world from a consumer perspective. What do consumers want and expect in their financial services? How do consumers see the balance between themselves and financial services changing?

Thoughts and comments welcome.

CommunityLend blog

Beginning the conversation about p2p Lending in Canada

Written by Colin Henderson

April 7, 2008 at 00:25

Posted in Social Lending

The role of social in the economy

William is doing a good job at taking the discussion forward on the Social Economy. I have wavered myself on whether it is an economy or whether social is rather a new factor in the (online) economy.

FORUM Solutions Discovering the Social Economy

I tend to define the social economy a little more broadly: as that increasing part of our society’s economic decision-making that is influenced by emerging social tools. The water cooler is now global, and people can influence each other’s spending habits and brand preferences more effectively and instantly.

The Social Futures Observatory have an extensive paper on Social Lending. They make the point about the confluence of social capital with traditional economic capital. When that happens, they argue, the sum is greater than a simple economic transaction. People value their social capital, so when it is brought to bear upon economic transactions, much greater value is developed.

Written by Colin Henderson

April 6, 2008 at 16:58

Posted in Social Lending

FT reports social lending set to soar | thoughts on Zopa

The FT reports on Zopa’s progress as they move into their fourth country and have their third birthday.  What intrigues me a little is the nature of their expansion, that I believe is a mix of licensing and direct involvement.  Their business model is also different in each country, particularly US which has a strange interest sharing arrangement.  So its not clear to me, yet, that Zopa Japan particularly supports the title of this article in terms of volume until the model is clearer for Zopa in their expansive activities. – Social lending set to soar

Since its launch, the enterprise has arranged more than £20m in unsecured personal loans in the UK and is preparing to launch in Japan, its fourth country after Italy and the US since it launch in the UK.

Written by Colin Henderson

March 11, 2008 at 23:16

Posted in Social Lending

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