Archives For alternative finance

It is no secret that as a society, we are quickly losing faith in the banking system. As technology continues to grow, there is a fast approaching sub-sector in alternative finance that could provide us with a solution. Crowdfunding platforms have completely transformed how we approach business through the medium of new technology. The good news doesn’t stop there.

Crowdfunding is just the tip of the iceberg in terms of the new industry norm, especially when it comes to finance. In the UK in 2014, equity-based crowdfunding grew by 420%. Because of its recent boom, many now ask whether crowdfunding is trustworthy, and if so, can it pick up the slack of the banks?

An attractive alternative to banking, this thriving industry has not yet reached its full potential. As more and more companies use crowdfunding as a fundraising opportunity, digital platforms continue to grow, offering companies an attractive and already popular resource. The UKCFA recently reported that, “The European online alternative finance market grew by 144% last year to nearly 3bn euros and could top 7bn euros in 2015.  The UK is by far the largest European country for alternative finance at 2.34bn euros (£1.78bn) in 2014.”

Small and large companies both thrive from crowdfunding because it gives the public a degree of control over what makes it onto the public market and what does not. It has particularly changed the way we view bank loans. As banks continue to let individuals and small companies down, there is now a shift in how we view the role of lenders. More so than ever before, we realise a financing system can indeed be built by and for the people. Highly decentralised and equal in its prospects, crowdfunding is that financing system.

In the near future, crowdfunding will surely replace lenders, as more people realize the success of this new financial platform.