In the Telegraph article dated 4th November, James Titcomb states that the analysts at Berenberg have predicted that a rise in the costs of running the big financial institutions which outweigh the benefits they provide "could force banks to shrink and break apart". Analysts are predicting that as "Godzilla had emerged as a response to the human race's power, forces sweeping across the industry would balance out the exuberance of the world's biggest banks". There is no doubt that the UK alternative banking sector is growing.
In the Telegraph article dated 4th November, James Titcomb states that the analysts at Berenberg have predicted that a rise in the costs of running the big financial institutions which outweigh the benefits they provide "could force banks to shrink and break apart". Analysts are predicting that as "Godzilla had emerged as a response to the human race's power, forces sweeping across the industry would balance out the exuberance of the world's biggest banks". There is no doubt that the UK alternative banking sector is growing. The FCA now appreciate that the alternative finance sector can provide huge benefits to the consumer and have recognised that alternatives to mainstream traditional banking are important.
At Quidcycle, we are very aware of the costs of running a business and aim to optimise running costs so that an efficient and effective service is provided to members without the need to sacrifice on unnecessary overheads and unreasonable budgets. Not only does Quidcycle provide a greater interest rate to Investors than they would receive from the traditional mainstream banking sector, but it also offers low rate consolidation loans to enable Borrowers to achieve financial success faster. Quidcycle are driven by the belief that everyone should have a fair shot at financial freedom, not just the elite few and our mission is to help the UKs middle-income families and individuals achieve financial success whilst raising consumer confidence in financial services. Borrowers reduce the cost of their borrowing by receiving a lower rate loan, significantly reducing the making repayments and Investors receive up to 6% return, allowing them to really grow their nest egg. Everybody benefits.
Interest rates on traditional savings accounts have been at a low rate for a few years now and from research carried out by Quidcycle, more than 35% say that they would not change their approach to saving. If the banks were to reconsider their positions owing to rising costs, it could force people to take a closer look at their own finances and possibly consider alternatives within the financial sector. The CEO of Quidcycle says that "it is vitally important that the financial services industry helps its customers to take control of their finances. Instead of sticking to the usual solutions and hoping for the best - even where we are managing to make repayments every month - we need to do better at managing money as a nation". For this reason, Quidcycle go a step further with our Borrowers, working with them until they become investors, providing them with support and financial incentives to stay on track with their refinance, in addition to the provision of financial education to help them make better decisions for the future. It is this focus on financial education that sets Quidcycle apart from other P2P platforms.
As with most sectors within the alternative finance arena, there are some risks involved Quidcycle is regulated by the Financial Conduct Authority, but Investors' money is not protected by the Financial Services Compensation Scheme. This does present a risk, however, at Quidcycle we take Investors' money seriously and do what we can to ensure their money is safe. All Borrowers are fully credit checked using a external credit scoring agency. There is then an enhanced internal credit check to make sure the Borrowers available are credit worthy. Borrowers on the Refinance+ are incentivised to repay their loans, which should give Investors additional comfort. Investors also have automatic access to a provision fund sufficient to cover up 1.5% of the total loan book. Therefore,in the rare event that a Borrower defaults, cash available in the fund can be used to make the payment missed by the Borrower. In addition, Quidcycle only expose a maximum of 20% of Investor funds to any Borrower. Therefore, there is some security in place should the worst case scenario arise.
Read more on James Titcomb's article here.
To start investing, go to www.quidcycle.com/invest.
Image courtesy of Sira Anamwong on freedigitalimage.net