This is a guest post by Neil Roberts, CEO of Harmoney
Harmoney is New Zealand’s first and only licensed peer to peer lending platform, founded by serial financial services entrepreneurs with several successful start-ups and exits that have created shareholder wealth in excess of $1bn. Harmoney launched in September of 2014 with NZ$100m of institutional funding, and recently announced a successful NZ$10m round of funding lead by Trade Me, the leading online marketplace in New Zealand, currently accounts for 70% of the entire country’s online domestic traffic!
The New Zealand Story
We are a small country, globally significant in so much as we are regularly the test bed for financial services innovation due to the high adoption rate of technology, Western culture and contained geography. Up until mid-2014, most New Zealanders had never heard of peer to peer lending, and the FinTech/AltFin industry was not strongly established.
Why? Dominated by four Australian owned and protected banks, New Zealand’s financial market has grown stagnant. Our “Big-4” banks are protected by Aussie legislation known as the “four pillar” policy, which has not only allowed the creation an artificial oligopoly, but also made those four banks among the most profitable in the world – even more than their Australian counterparts. Without much in the way of serious challenge, these banks have dominated the market with neither need nor motivation to change.
It’s created a perfect storm for the introduction of peer to peer lending. The passing of the Financial Markets Conduct Act (FMCA) – a Bill that was applauded as “once-in-a-generation” (http://www.interest.co.nz/business/66116/once-generation-financial-markets-conduct-bill-passed-law) – in April last year opened the doors to a fully licensed and regulated crowdfunding and peer to peer lending industry in New Zealand.
Of a handful of known applications, Harmoney is at this stage the first and only peer to peer lending platform to be licensed. The licensing process is very thorough – and appropriately so. New verticals and business models within the financial sector will inevitably be treated with caution, both by regulators and by the public. We have long held the belief that a thoroughly audited and strictly regulated industry will be safer for customers and foster greater public trust. Continue reading