ISLA: Beneficial owners exploring P2P lending
23 June 2016 Vienna
Image: Shutterstock
Increasing numbers of beneficial owners are looking to cut out the middleman and engage in peer-to-peer lending with non-banks, according to conference panellists at the ISLA conference in Vienna.
One buy-side panellist explained: "Securities lending at its core is a very simple transaction. I'm here with a very high demand to borrow securities, and the other side wants to lend them, but there are a lot of people in the way who are often using clunky infrastructures that make the process very inefficient."
In an audience poll it was revealed that 47 percent of voters were beneficial owners that are "seriously considering lending to non-banks".
Delegates at the ISLA 25th Annual Securities Finance and Collateral Management Conference heard that greater transparency and communication between counterparties is the future of the industry, and that this will likely result in the growth of peer-to-peer lending.
However, the counterpoint was raised that, historically, end users have not had the resources to properly manage the various exposures and counterparty vetting processes involved in securities lending without leaning heavily on agent lenders, and that this hasn't changed significantly yet.
However, the unstoppable rise of fintech as well as the growth of central counterparties could mean that change is finally on the horizon.
One buy-side panellist explained: "Securities lending at its core is a very simple transaction. I'm here with a very high demand to borrow securities, and the other side wants to lend them, but there are a lot of people in the way who are often using clunky infrastructures that make the process very inefficient."
In an audience poll it was revealed that 47 percent of voters were beneficial owners that are "seriously considering lending to non-banks".
Delegates at the ISLA 25th Annual Securities Finance and Collateral Management Conference heard that greater transparency and communication between counterparties is the future of the industry, and that this will likely result in the growth of peer-to-peer lending.
However, the counterpoint was raised that, historically, end users have not had the resources to properly manage the various exposures and counterparty vetting processes involved in securities lending without leaning heavily on agent lenders, and that this hasn't changed significantly yet.
However, the unstoppable rise of fintech as well as the growth of central counterparties could mean that change is finally on the horizon.
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