The asset management sector is set to dramatically increase its involvement in peer-to-peer (P2P) lending, according to a new report from PwC.
The report, titled ‘Asset & Wealth Management Revolution: Embracing Exponential Change’, says asset and wealth managers will need to seek investment opportunities in niche areas such as P2P if they are to prosper. PwC charges the wealth management sector with being a “digital technology laggard” and says to keep up it needs to substantially reinvent itself.
The report also predicted the value of assets under management would rise to $145.4 trillion by 2025, but said fewer firms would be managing far more assets.
The report gave a nod to the huge financing needs for small- and medium-sized businesses since banks pulled back in the wake of regulatory and capital restrictions.
PwC said that asset and wealth managers have been filling these financing gaps, such as in P2P lending, that has emerged since the financial crash, as well as investing in real asset classes.
To generate alpha, their involvement in niche areas such as trade finance, P2P lending and infrastructure will dramatically increase. They will be more active in all aspects of lending activities traditionally undertaken by banks, the report said.
Meanwhile, SME’s may get a boost in the form of new offerings from TSB. The boss of TSB has told media outlets that he wants to make “an aggressive move” into lending more money to Britain’s growing number of small businesses.
Paul Pester said, “Our intention is to help Britain’s small businesses by offering something new.” There is not enough competition in the business lending market, claiming the UK’s five biggest banks “don’t have an incentive to compete” and he added that TSB sees itself as a challenger bank with teeth and said it will be as aggressive as possible when it comes to small business lending.