Show me the Money: Opening up Big Data in Finance provides the most comprehensive snapshot to date of the £378m UK peer-to-peer (P2P) lending market since October 2010. Using open data from the three biggest P2P businesses in the UK (Zopa, RateSetter and Funding Circle) the report focuses on the regional geography of lending in the UK and is able to provide a fascinating insight into which regions are net creditors and recipients. It is the first time financial data has been published with an open data certificate.
Regions in the South lend more, but the UK is surprisingly balanced when it comes to recipients.
Key differences in UK regional activity from the report include:
- Scotland, the North East and the North West have similar statistics for £ received per person as the South of the UK. Hence, there is substantially more lending in London and the South of the UK, whilst recipients are evenly distributed across the country.
- Four regions invest more than they receive. All four regions, London, South East, South West and the East of England, lie in the South of the UK.
- The range of lending per person ranges from £1.4 to £11.8 for UK regions, whereas the range for recipients only goes from £3.9 to £7.3 per person.
The original data is on UK postcode level, so we can look at any regional aggregation:
- London is the biggest investor and the second biggest recipient in absolute terms with £96.5m and £48.7m respectively. Only the South East receives more financial resources from the P2P market (£57.6m).
- On a county level the top three net lenders (lending - receiving loans) in England are Surrey (7.4m), Buckinghamshire (£4.6m) and Cambridgeshire (4.0m). On the other hand, the biggest investments, or net recipients, happen in Nottinghamshire (£3.2m), Staffordshire (£3.1m) and Lancashire (£2.2m).
A broader message of this project is that this sort of granular financial data is collectable in the age of terabyte warehouses, and analytically tractable with visualisation tools we demo here. In sum this project is a step toward a more publicly transparent and comprehensive mapping of the financial system. Eventually we hope this map will become updated in real-time with data feeds directly sourced from P2P platforms.
What is P2P lending?
Peer-to-peer (P2P) platforms are online sites that match lenders to recipients. At this basic level they are much like banks. However, unlike banks, P2P platforms usually do not invest these funds solely at their own discretion. Instead some enable lenders to directly make investment decisions by choosing the recipient they fund or allowing lenders to define the general social or financial features of the projects in which they want to invest.
P2P lending is due to be regulated in 2014 and will fall under the Financial Conduct Authority.