Shifting Paradigms: The 4th European Alternative Finance Benchmarking Report

University of Cambridge | Tania Zieglar | April 20, 2019

shifting paradigms 4th european altfi study - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking ReportThis year's report is titled 'Shifting Paradigms' to, in part, emphasise the continued growth and development of the European Alternative Finance Industry, but also underscore that these patterns of growth can develop and change as the sector continues to develop and mature. Throughout the region, platforms have continued to grow, respond to regulation, and expand operations internationally.  In some regions, model prominence has shifted, allowing for others to grow. At times, this has been a response to the development or lack of regulation, or simply a result of competing market forces.

Last year's report, 'Expanding Horizons', sought to exemplify the positive developments in European Alternative Finance in 2016 and foreshadowed future developments in the industry. The sector as a whole has continued to expand, and across the board has grown in volume.  As with last year, this study captured market data from 45 European countries, and continued to explore issues with regard to innovation, research and development, as well as internationalisation trends.

This year's European Alternative Finance Industry Report has been produced by the Cambridge Centre for Alternative Finance at Cambridge Judge Business School and the University of Agder. This report was generously supported by Invesco and the CME Group Foundation.

Highlights from the report

  • This year's study gathered data from 269 platforms with reported operations in 2017. These 269 platforms were responsible for 519 unique data entries across 45 countries in Europe. The study shows that the total European online alternative finance market (including the UK) grew by 36 per cent to reach €10.44 billion in 2017. The United Kingdom is still the largest individual alternative finance market, albeit with a declining market share from 73 per cent in 2016 to 68 per cent in 2017. Excluding the UK from overall volume, the European online alternative finance industry grew 63 per cent from €2.06 billion to €3.37 billion in 2017.

total altfi european volumes 2017 - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report

Year over year growth by European region (see countries for inclusion grouping)

regional european altfi growth - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report

  • France (€661.37 million), Germany (€595.41 million) and the Netherlands (€279.93 million) remained the top three national markets for online alternative finance by market volume in Europe, excluding the United Kingdom.

european altfi volume by country - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report

    • For the fourth year in a row P2P Consumer Lending accounted for the largest market share of European Alterative Finance (excluding the UK). This model accounted for 41 per cent of all volume and grew by 99.8 per cent from €697 million in 2016 to €1.39 billion in 2017.

Online alternative finance for businesses across Europe continued to grow, providing €1.66 billion to over 24,000 businesses. Overall, European business funding grew by €534 million, and raised funds for an additional 9,586 businesses.

  • Internationalisation of platforms is on the rise. In 2017, 88 per cent of platforms reported some level of cross-border inflows, while 61 per cent reported outflows. This represents a growth of 11 per cent for platforms reporting cross-border inflows, and 17 per cent growth for those reporting cross-border outflows. Despite growth in international orientation of platforms, the extent of actual localisation of services, interface and brand remains limited.
  • While in 2016, models that were associated with larger volumes reported a higher level of change to their business model, the opposite trend was observed in 2017. For the top five model types by volume, 50 per cent or more of platforms reported making no changes to their business model. Product innovation, however, was high across the board.

product innovation by model - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report

  • As was observed in the previous year, most innovation focused on improving the operational efficiency of platforms through process streamlining and automation, as well as optimising payment processing and customer verification. Additionally, as with last year, the secondary research focus for platforms in Europe regards investment and development in customer service features, predominantly social media and promotional tools, community management, and CRM systems.
  • As regulatory regimes across Europe continue to develop, so to do the perceptions of platforms on the adequacy of these regulations. In general, while overall views are still divided, it appears that the level of approval has been increasing.

Continue to the full article --> here

Download the 147 page PDF research report --> here

 


NCFA Jan 2018 resize - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

Latest news - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking ReportFF Logo 400 v3 - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Reportcommunity social impact - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report
NCFA Fintech Confidential Issue 2 FINAL COVER - Shifting Paradigms:  The 4th European Alternative Finance Benchmarking Report