On 21 October 2015, the Economic Secretary, Harriet Baldwin MP, delivered a speech on the Government’s approach to peer-to-peer lending (P2P) and innovation in the financial services sector (fintech). The Government believes that financial services must appeal to the consumer, working with them to achieve their long term aspirations and making life easier in their day-to-day banking. The speech confirms that P2P and fintech are part of a technological revolution which will help to meet the government objectives of choice and competition in the retail banking sector.

The Government will be encouraging the expansion of P2P lending by putting in place policies to support the sector to grow and develop through the Business Finance Partnership and the British Business Bank’s Investment Programme. Stocks and shares ISAs will now also include loans made through P2P platforms, allowing interest received under these loans to be tax-free from April 2016.

The speech also set out that the Government sees fintech as a tool to provide financial services in a new, more convenient way, and is emphasising the need to keep up with the pace of technological change. It is instigating an international fintech benchmarking exercise of how the UK compares with other countries, and is assessing the feasibility of a “regulatory sandbox” allowing innovators to experiment with new ideas and real customers without the burden of excessive regulation, but with the informed consent of consumers.