P2P lending is a simple concept. There’s a platform that connects people who want to borrow money with people who want to lend money. These Fintech platforms help democratize credit with more loan opportunities to borrowers with less than ideal financial situations, like poorer credit history or weaker financial profiles. This does mean investors can end up taking on bigger financial risks. Regardless, P2P lending investment attracts investors with the lure of bigger returns than what traditional big banks and their savings accounts can offer. So, in the end everyone’s got a chance to be happy. With this model, many P2P lending platforms sprang up over the last decade in some of the most developed economies, including China, UK, US, and India. Some analysts projected global market growth of over 48% to bring the valuation at $897+ billion by 2024 (Transparent Market Research, May 2016). And India’s no exception with Lendbox, Faircent, i-Lend, LenDen Club and Easy Rupiya leading in their P2P lending space.
In a Fintech space like P2P lending, it makes sense that a lot of customers’ personal information is collected and used by these companies, making them a big target for cybercriminals and emphasizing the need for strong data security. P2P lending is riddled with other challenges aside from the aforementioned cybersecurity risks including increased default risks, money-laundering, bogus companies, and terrorist exploitation (Claudia Ng, February 2018). And, recent events in China highlight one example of this darker side. The Chinese government didn’t meddle in its lending platforms at first, encouraging them to flourish without much by way of tight regulations. And flourish they did; hundreds of lending platforms popped up in China and with them misrepresentation and crime (Rivers, M. and Mullen, J., August 2018). When China started to crack down, down came hundreds of platforms like Tourongja and with them investors’ money disappeared. Trust is gone and people are mad.
Lenders and borrowers alike need trust to hop on board with P2P lending platforms, to give their personal information and know their data is safe and their money is safe. And they need to believe that their lending platform is legitimate and capable of reacting to ever changing regulations. Companies need a comprehensive data security solution that secures sensitive data and meets their compliance needs like PCI, GDPR, and others. These lending platforms should prioritize risk and compliance including data privacy and security very high. They should work diligently to prove to consumers that they can protect their data and money. Kogni is a leading data security product in the big data space with presence in North America and Asia. Kogni’s approach to data security reduces the impact of a data breach, helps enterprises comply with regulations, and enables data governance initiatives by monitoring for policy violations.
Whether you’ve got a Fintech offering like P2P lending or another product in a highly regulated space, data security and responsiveness to regulatory change is critical. Kogni, the first purpose-built data lake solution focused on data security and governance, helps enterprises accelerate their implementations, maintain governance and keep their data trusted, secure and ready for analytics. Learn more at: http://www.kogni.io
Transparency Market Research (2016, May) Peer-to-Peer Lending Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2016 - 2024. Retrieved from: https://www.transparencymarketresearch.com/peer-to-peer-lending-market.html
Ng, C. (2018, February 22). Regulating Fintech: Addressing Challenges in Cybersecurity and Data Privacy. Retrieved from: https://www.innovations.harvard.edu/blog/regulating-fintech-addressing-challenges-cybersecurity-and-data-privacy
Rivers, M. and Mullen, J. (2018, August) China has an online lending Crisis and People are Furious about it. CNN Money. Retrieved from: https://money.cnn.com/2018/08/08/news/economy/china-p2p-lending/index.html