...Zopa is a UK-based peer-to-peer (P2P) online brokerage that links British residents who want to lend with those who would like to borrow. The idea was formed because of the increasing amount of 'freeformers', who are defined as project-based, self employed or freelance workers who weren't in full-time employment [Kupp et al. 2007], and had fluctuating incomes. Zopa describe peer-to-peer lending as a "smarter, fairer and more human way of doing money" which contrasts to the traditional banking model [Zopa Website]. In this essay I plan to discuss the uniqueness of Zopa and their business model in relation to existing financial institutions. Following this I will analyse Zopa's competitive advantage and then discuss Zopa's main competitors and how they could create barriers to entry for late entrants. 1) Begin your essay by discussing how Zopa is different from existing financial institutions. Table 1 Due to the combined impact of the financial crisis causing access to credit to tighten, the increasing multi financial service products available, and the competitive rates, Zopa's members count has been able to grow to 140,000 in 2007. Table 1 can help provide a better understanding of how Zopa is operationally different to other financial institutions. Firstly, Zopa, unlike their rival larger financial institutions, only carries one product through personal loans. In contrast is RBS's seventy different services across a range of deposit accounts with over 14 million personal...
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...Zopa 1. Zopa is the world’s oldest peer-to-peer lending and borrowing services. They provide a matching solution that brings people who want to borrow with individual who want to lend. So Zopa was considered industrial-scale online financial matchmakers at which point borrowers or companies with savers willing to put money aside for longer in order to hunt for higher return. According to Martin Lewis 2014, showed the comparison interest rate between peer-to-peer lending and original bank (see table below). |Savings interest vs peer-to-peer predicted returns |Easy access |3-year fix |5-year fix | |(best pre-tax rates at June 2014) | | | | |Normal savings |1.5% |2.7% |3.1% | |Peer-to-peer websites |2.5% (1) |5.2% (2) |6.2% (3) | Therefore, as a member of the team at the investor reviewing the viability of the Zopa business. There are some criteria that should analyze to evaluate potential future of Zopa: -Target Market: Zopa completely aim to new market that never exists in whatever business model. The consumer-to-consumer lending and borrowing financial online market appears. Zopa...
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...China Microfinance Market: the untamed territory Greg Au-Yeung When people talk about China’s financial market, they naturally refer to the capital market such as stock trading, or the banking sector like personal savings or commercial lending. After all, this is the mainstream market, which is more visible to the outside world. There is a lesser known territory which already catches the attention of foreign investors over the past few years. It is the microfinance market. By definition, it is financial services for micro-entrepreneurs, small businesses, and individuals who lack access to traditional banking services. The Market In China, microfinance products range from consumer loans to commercial lending. Similar to other nations, this financial market segment has become a necessity rather than a choice. The growth of China’s microfinance market is also fueled by an imbalanced financial eco-system and the central government’s strict control of interest rates which resulted in banks deserting this market segment. Subsequently, new operators arose to provide financial aid for those in need. This includes microfinance (microcredit) and guarantee companies, P2P (person to person) lenders, as well as underground banks. Although there are banks in China that also provide microloans, they are still relatively small and not regarded as a mainstream service. Middle Kingdom’s Challenges in Borrowing It is not news that many enterprises and individuals struggle to secure loans...
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...Negotiation Theory Types of Negotiation Table of contents 1. Introduction 2. Negotiation Theory: Foundations and Approaches 2.1. Basic concepts of negotiation 2.2. Negotiation approaches: An overview 2.2.1. Structural approach 2.2.2. Strategic approach 2.2.3. Behavioral approach 2.2.4. Processual approach 2.2.5. Integrative approach 2.3. Summary of approaches 3 Types of Negotiation Negotiation Theory and Practice: A Review of the Literature “major public policies are the outcome of a complex round of negotiation between interests, choices between values and competition between resources… there are no single ‘best’ options for any player in this game, for the ‘best’ outcome depends on what others do and what deals are possible.” (Davis et.al., 1993) 1. INTRODUCTION “Pure” conflict defined as the existence of competing interests between parties in absence of interests that are shared, is an anomaly in international relations where the defining feature of the relationship between states is mutual dependence. Such was the observation of Thomas Schelling, noted international economist, during the height of the Cold War. In the decades that have since transpired, globalizing developments in technology, communications, finance and trade have given rise to a world in which citizens, organizations and governments engage in millions of trans-national interactions on a daily basis. In the modern age, the need...
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...AN INTRODUCTION TO CROWDFUNDING The late 19th century saw the creation of one of the world’s most recognisable landmarks with the gift of the Statue of Liberty by the French to the US. While the French paid for the construction and shipping of the statue it was down to the US to fund the base upon which it would stand. With the statue ready to leave France, the Americans were still well short of the $300,0001 needed to build the base and erect the statue. Running short of time the American Committee (responsible for raising the funds) teamed up with newspaper owner Joseph Pulitzer to launch a campaign to invite citizens to donate even small amounts to help in the funding of the pedestal, offering donors miniature replicas of the statue in return. This 19th century crowdfunding campaign raised $100,000 in just five months, contributed to one of the most popular attractions in the world and illustrated the financing power of a large crowd when tapped for funding. While the American Committee were lucky to have Mr Pulitzer and his paper to publicise their plea for donations, others wishing to access so many people would have had no such help. This, however, has changed in recent years with the rise of social media and the new ease with which communities can form and interact online. Annual growth in the number of crowdfunding platforms worldwide Growth |||||||||||| |||||||||||| |||||||||||| ...
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...Economics 4307 Banking and Financial Intermediation Term Paper 16th October 2015 Authors: Aatman Ajmera- 40743, Abhilash Badami-40744, Lampros Baltas-40757 New Business Models: Peer-to-Peer (P2P) Lending Abstract: This paper evaluates the efficacy of the peer-to-peer lending model. While we primarily discuss the consumer loan market, the structure, principles and associated risks are fairly similar for other end markets as well. Contrary to popular opinion, empirical evidence from the limited available market data proves that P2P platforms do not have a lower cost as a percentage of loan receivables at this point compared to traditional banks. As these higher costs are primarily due to marketing activities, going forward, with scalability, they are poised to generate significant cost savings. Through our research, we conclude that P2P lending has a strong value proposition and the potential to disrupt the existing lending market, however, data quality, regulation and investor confidence will play a monumental role in determining the speed and magnitude of its success. What is peer-to-peer lending? Technological evolution, along with changing consumer behaviour, has led to a new era of innovation in financial services and subsequently more transparent and easy-to-use platforms. One of the new business models that has evolved, is peer-to-peer (P2P) lending. In essence, P2P lending is a form of debt financing which allows borrowers and lenders to bypass traditional ...
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... Contents Banking on the Cloud What exactly is Cloud Computing? Finding cost savings in the Cloud What opportunities does the Cloud create for banks beyond cost savings? Having confidence in Cloud Computing A journey not a destination 3 5 8 9 12 14 Banking on the Cloud Cloud computing is one of the hottest technology and business topics today, and the market for cloud services is expected to skyrocket in the next few years. At its most basic, cloud computing can enable banks to reuse IT resources more efficiently—whether they are purchased up-front or rented without any long-term commitment. According to research firm Gartner, this market for cloud services will increase from $36 billion today to $160 billion by 2015. Gartner also says 20 percent of companies will be using cloud computing for significant parts of their technology environment by 20121. However, cloud computing is much more than simply renting servers and storage on-demand to reduce infrastructure costs—as many believe. Furthermore, it’s not simply a technology issue. In fact, the cloud offers a host of opportunities for banks to build a more flexible, nimble and customer-centric business model that can drive profitable growth and, as a result, should be something that non-IT decision makers at banks understand and appreciate. So what does the future of cloud computing look like for banks—both in the near and long term? The pundits tend to overestimate the impact of a technology and paradigm shift in the short term...
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...Objectives_Class 2 3. A570_Learning Objectives_Class 3 4. A570_Learning Objectives_Class 4_Valuation II 5. A570_Learning Objectives_Class 7 c. Chapter 18: An Introduction to Deal Design in M&A d. Chapter 20: Choosing the Form of Financing and Payment e. Chapter 22: Structuring and Valuing Contingent Payments in M&A f. Chapter 23: Risk Management in M&A 6. A570_Learning Objectives_Class 8 g. Chapter 16: Financial Accounting for Mergers and Acquisitions h. Chapter 19: Choosing the Form of an Acquisitive Reorganization A570_Learning Objectives_Class #1 Chapter 1 1. While I do not want you to memorize the lists contained in Chapter 1, I think that they provide a useful model for thinking about M&A. Bruner opines that M&A outcomes (see #2) are driven by “structure” and “conduct”, but that structure and conduct also interact with each other. a. In the case of “structure”, Bruner is referring to “what exists.” He is thinking of exactly the kinds of issues one contemplates when looking at a “SWOT” analysis. As you will recall, the “SW” side of the analysis deals with issues that are INTERNAL to the company (its resources—both capital and labor, and what it is capable—and incapable—of doing) while the OT side of the analysis deals with issues that are EXTERNAL to the company (changes in the marketplace, new technologies, competitors that could invade the company’s turf and competitors whose turf...
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...in shopping for and consuming a product are also part of its opportunity cost. Examples are when we need to take time to compare potential suppliers to find the best price for a product, when we need to spend time queuing to buy a product, or when it takes time to consume or use a product. Question: Sally Stockbroker has to decide whether to return to university to study for a Masters of Business Association (MBA). The MBA will take three years to complete. Sally knows that the information relevant to calculating opportunity cost is that: (a) MBA fees will cost $20000 per year; (b) her salary as a stockbroker in every future year of her working life would be $80000 per year if Sally does not do an MBA; (c) during her time studying, Sally can work as a tutor at the university and earn $10000 per year; and (d) other costs of studying such as textbooks that Sally would not otherwise incur amount to $5000 per year. At present, Sally has not incurred any of these costs. What is the opportunity cost for Sally of doing an MBA? Case study 1.7 Are we always rational? Almost every economic model incorporates decision...
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...Abstract This study focuses on demand of P2P market among SMEs and consumer market. The researcher has developed a framework based on how peer to peer lending platforms are important for SME’s and what are the governmental regulations to promote online lending platforms, how SMEs play an important role in the development of economy, how important is the peer to peer platform to them and the future position of peer to peer market in Singapore. The focal point lies on the demand of peer to peer lending platforms among small and medium enterprises and consumer market. The study illustrates a high demand of peer to peer lending among small and medium enterprises regardless of less security of investment. This study also includes risk and regulations associated with peer to peer lending and the impact of social behaviours and social connections on the decision of investors related to investment in online platforms. Acknowledgement I owe a debt of gratitude for working adults and SMEs for providing me accurate data and their feedback regarding their loan preferences. I would like to thank all for their precious time and respond. As this work would not be possible without their time and effort. Tables of Contents 1.0. Introduction 4 1.1. Peer to peer lending platform 5 1.2. Background of the research 7 1.3. Objectives 8 1.4. Research Rationale 9 2.0. Literature Review 9 3.0. Research Methodology 19 4.0. Data analysis 21 5.0. Results and Finding...
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...CH. 6: STRATEGY KEY STRATEGY ELEMENTS 1) Time (deadlines) 80/20 rule (Pareto’s law) often applies in negotiations. 80% of the deal getting done in the last 20% of the time spent in bargaining. If you have a firm deadline, use one of 3 strategies… 1) Without revealing your deadline, work to reach a settlement well in advance 2) Declare an earlier “deadline” before your real deadline 3) Question negotiators on the other side about their deadline – and if you find out their deadline is before yours, agree to it and work to meet it. If it’s a deadline for both sides, then neither has an advantage BOX 6.1: Use Time to Your Advantage (p. 142) 2) Info Called the “The Heart of Negotiations” because it shapes our appraisal of reality, our negotiation strategy, our BATNA, our expectations of what can be achieved and the outcome of a negotiation. Often, more info discovered both before and during a negotiation process makes you a better negotiator. The party that has more and better info is more likely to negotiate a better outcome. So, why do people fail to get info? Several reasons… 1) People regard a negotiation encounter as a limited or one-time event and simply fail to anticipate that they will need info until they are heavily involved in negotiations. 2) Novice negotiators believe the process doesn’t start until they the other party face-to-face and don’t prepare...
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...Sharing corps: Should company build competitive advantage by embracing the sharing economy? SHARING CORPS SHOULD COMPANIES build a new competitive advantage BY embracing the SHARING ECONOMY? ECOVALA - December 2013 1 Sharing corps: Should company build competitive advantage by embracing the sharing economy? Ecovala © 2013 This report was produced by the Ecovala in December 2013. If no other source is specified, the contents of this report are under a Creative Commons Attribution – Non-Commercial - Share Alike 3.0 Unported License. You can find the full text of the license in this website. Ecovala Ecovala provides innovative solutions to private and public organisations to accelerate their transition towards sustainability. The organisation offers a wide range of services around sustainability and system innovation: from companies’ environmental assessment to sustainable strategic design, from new green services definition to effective implementation of CSR management. Based in Finland, the organisation is active throughout Europe, relying on an extensive network of like-minded organisations and sustainability experts. www.ecovala.eu Author Erwan Mouazan is director and founder of Ecovala. He develops and implements innovative sustainability solutions both at private and public level. Erwan owns a Master's degree in economics, with a specialization in international management. In the last 9 years, he has worked at international level in environmental...
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...Reinventing Retail Banking Series Evolving Models of Retail Banking Distribution Capitalizing on changes in channel usage Produced by the Deloitte Center for Banking Solutions Reinventing Retail Banking Generation Y Reinventing Retail Banking Series Consumer Trust Reinventing Retail Banking Series Catalysts for Change The Implications of Gen Y Consumers for Banks Building Consumer Trust in Retail Payments Laying a Solid Foundation Produced by the Deloitte Center for Banking Solutions Produced by the Deloitte Center for Banking Solutions The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competitive landscape. Customers are demanding seamless, multi-channel sales and service experiences and not consistently receiving them. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation. The result is forcing banks to examine a more balanced, integrated approach to the customer experience and growth. In this series, entitled Reinventing Retail Banking, the Deloitte Center for Banking Solutions looks at how banks must move beyond simply meeting their profit and growth goals to delivering more completely on the customer experience. Specifically, these articles will focus on: understanding customers needs; identifying emerging and profitable customer segments and strategies...
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...Reinventing Retail Banking Series Evolving Models of Retail Banking Distribution Capitalizing on changes in channel usage Produced by the Deloitte Center for Banking Solutions Reinventing Retail Banking Generation Y Reinventing Retail Banking Series Consumer Trust Reinventing Retail Banking Series Catalysts for Change The Implications of Gen Y Consumers for Banks Building Consumer Trust in Retail Payments Laying a Solid Foundation Produced by the Deloitte Center for Banking Solutions Produced by the Deloitte Center for Banking Solutions The traditional retail bank is at an inflection point. The needs and expectations of customers are changing as quickly as the competitive landscape. Customers are demanding seamless, multi-channel sales and service experiences and not consistently receiving them. Simultaneously, other financial institutions and non-traditional players are looking for opportunities to invade this space or to redefine it through disruptive innovation. The result is forcing banks to examine a more balanced, integrated approach to the customer experience and growth. In this series, entitled Reinventing Retail Banking, the Deloitte Center for Banking Solutions looks at how banks must move beyond simply meeting their profit and growth goals to delivering more completely on the customer experience. Specifically, these articles will focus on: understanding customers needs; identifying emerging and profitable customer segments and strategies...
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...Insurance Industry – Road Ahead Path for sustainable growth momentum and increasing profitability kpmg.com/in Foreword The Insurance industry in India has undergone transformational changes over the last 12 years. Liberalization has led to the entry of the largest insurance companies in the world, who have taken a strategic view on India being one of the top priority emerging markets. The industry has witnessed phases of rapid growth along with spans of growth moderation, intensifying competition with both life and general insurance segments having more than 20 competing companies, and significant expansion of the customer base. There have also been number of product innovations and operational innovations necessitated by increased competition among the players. Changes in the regulatory environment had path-breaking impact on the development of the industry. While the life insurance industry got affected by the introduction of cap in charges, the general insurance industry got impacted by price detariffication and Motor third party risk pooling arrangements. While the insurance industry still struggles to move out of the shadows cast by the challenges and uncertainties of the last few years, the strong fundamentals of the industry augur well for a roadmap to be drawn for sustainable long-term growth. The available headroom for development, sustainable external growth drivers, and competitive strategies would continue to drive growth in the gross written premiums. However...
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