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BoE chief says loan technology could lead to disintermediation


Bank of England executive director of financial stability Andrew Haldane says the increasing use of technology in organising loan finance could see intermediaries become “surplus links in the chain”.

In an interview with The Independent, Haldane says improvements and innovation in technology, such as the peer-to-peer lending and crowd-funding sectors, could see execution-only become “a more realistic possibility”.

He says: “The banking middle-men may in time become the surplus links in the chain. It has happened in the liberal arts, music and publishing, and there is no reason it should not in finance. eBay has shown that with transparency, it can be done. Why can’t you have an open market for loans? With an information-based web, the disintermediated model of finance becomes a more realistic possibility.”

Haldane says he is “optimistic” that peer-to-peer lending and crowd-funding could solve the credit drought to small and medium-sized business.

He says: “I am congenitally pessimistic about most things in life but on this I am really optimistic – it is a time of opportunity knocking for finance.

“Hopefully, the growth of peer-to-peer lenders such as Zopa, Funding Circle and Thin Cats, and those involved in crowd-funding, such as Crowdcube, will help solve the problems we have in the UK with lending for SMEs.”

Lentune Mortgage Consultancy director Stuart Gregory says: “There is not enough information on the internet to make an informed choice. Lenders do not list their full criteria on their websites. That is why the need for advice will always be there and it has increased since the financial crisis.”


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