It’s that time of the year again where I look into my dusty crystal ball and (attempt to) offer wisdom and intelligence. Lucky you. Forecasts are a difficult enough practice in normal circumstances, let alone an election year, but that said it's highly likely that SMEs and crowdfunding will escape the ravages of any electoral earthquake. Politicians thankfully don’t mess with the little guys. Those dirty banks though, easy pickings. So here you are, the six epic trends, which will transform crowdfunding in 2015.
Reasons to be cheerful - part 1
Crowdfunding is gearing UP to kick ass
As investors and businesses awareness of crowdfunding grows in 2015 the already heightened interest in crowdfunding will turn into a flood. Crowdfunding has been a novelty, with the media interest partly due to the fact that finance is actually incredibly boring to report on. Stocks, shares and banks miss the human touch. Crowdfunding is an exception to the rule. It’s about the people, stupid! As crowdfunding goes mainstream, 2015 will bring normalisation to how the crowdfunding process is perceived.
Reasons to be cheerful - part 2
UK government support for crowdfunding will endure and grow
Next year is election year, and as you know it’s hard to say in election years what measures the new incumbent party will choose to support. There has been little on the political landscape to support any argument that political support for the alternative finance sector will change. In fact, with the UK discovering a world-leading niche with the fintech sector, support for tech and finance is likely to grow, even potentially through direct government investment. Further tax incentives, changes in the way banks treat failed loan application and greater awareness at the very top, will ensure continued strength in the already rapidly growing industry.
Reasons to be cheerful - part 3
The entrance of mainstream companies and banks into the crowdfunding scene
There are smatterings of rumours within the industry that many of the old digital guard (Paypal, Ebay, Amazon) are looking at the sector as a way to build fresh new revenue models. In 2015 we will start to see an indication of how they will look to mobilise their large networks within crowdfunding. Likewise banks, which have viewed the sector with utter ambivalence, are starting to take notice. Whilst banks are utterly constrained by regulation, and therefore struggle to compete with new innovative business models, it is safe to expect to see banks investing and partnering up with crowdfunding sites. The effect of their entrance could transform the sector (I’ll leave it to you to decide whether that’s a good/bad thing).
Reasons to be cheerful - part 4
The FCA is about to turn the heat UP
In a growing young industry there are always going to be catch up between good practice, as defined by the regulators, and the crowdfunding sites themselves. Expect the FCA to make examples of bad practice. Lots of them. This will help crowdfunding in the long run in become the strong trusted industry everyone is forecasting.
Reasons to be cheerful - part 5
Crowd-lending ISAs are a BIG deal
2015 will bring a third ISA to the market, which will be based on loan-based crowdfunding. Can’t really understate the massiveness of this one. Many have as a consequence forecast that this will open UP access to £50bn a year of retail money. By all accounts this will be a huge transformation within the crowdfunding world, as well as signalling that crowdfunding is going mainstream. Also public awareness of crowdfunding will be transformed this time next year due to this change. Exciting stuff.
Reasons to be cheerful - part 6
Worldwide crowdfunding will continue to grow massively
Whilst the UK is the most advanced western crowdfunding marketplace, worldwide crowdfunding is catching up. A recent report suggesting crowdfunding was growing at 10x the rate of Moore’s Law. WOW. Alternative lending will continue to grow at around 200% a year globally. The 2013 Massolution report suggested that global crowdfunding had reached circa $5bn. With Nesta in Nov suggesting the 2015 alternative finance market in the UK alone would reach £4.4bn, it’s clear that global figures are going to be much higher. #theonlywayisUP
Reasons to be cheerful - part 7 (I lied when I said there were only 6 reasons - this one is HUGE)
P2P lenders tax relief
‘The government will introduce a new relief to allow individuals lending through P2P platforms to offset any losses from loans which go bad against other P2P income,’ said the Autumn Statement document. I think that sums it up nicely. Expect more investors viewing P2P as a viable lending option, in a similar vein to SEIS and EIS on the equity side.
There you have it. It’s safe to say that 2015 will be exciting for everyone involved in crowdfunding. It’s not just massive growth within the sector that is so intoxicating, but the way more and more businesses, investor and ordinary people are looking at crowdfunding as a weapon of empowerment. Now that can’t be a bad thing. As a site which works with every part of the UK's crowdfunding world, we at UP are pretty excited to be launching with this backdrop. Bring on 2015.