Matt Symons is the CEO and co-founder of SocietyOne, Australia’s only active p2p lender. In this interview, he tells us what makes SocietyOne different from traditional loans and also shares his favourite success story so far.
How does SocietyOne work?
As a p2p lender, we connect savvy investors to creditworthy borrowers in a way that is simple and direct. SocietyOne takes the complexity out of getting a personal loan and at the same time introduce investors to an attractive fixed income asset class.
What is the benefit of this approach compared to traditional loans and investment?
Peer-to-peer lending involves using an advanced technology platform to enable people to invest in other people. SocietyOne offers a 100% online loan origination process that is far more efficient than a traditional loan application process. With no branch overhead or complicated legacy systems, SocietyOne is perfectly placed to offer creditworthy Australian borrowers a better deal. SocietyOne is pioneering true risk-adjusted pricing so that borrowers with good credit histories can be rewarded with better rates. For investors, SocietyOne is a financial community where for the first time, they have the opportunity to invest in a diversified portfolio of personal loans.
Why do you think ideas like SocietyOne, Airbnb and Lyft interest people? What makes it work?
The Internet and the rapid pace of innovation has improved platform technologies and made marketplace models more appealing to a new generation of users. People like going direct and dispensing with the middleman, especially if the end-result is a faster, simpler and more rewarding experience. I think the inherent appeal of the Sharing Economy is that it connects people in a more direct way, without the need for intermediaries or gatekeepers. For example, when you can rent the entire principality of Lichtenstein on Airbnb for $70k a night, you know this model is clearly on to something.
There is a framework of trust and peer validation that gives this movement a powerful social currency that is much more appealing than the traditional corporate business model: it’s unique, personal with a stronger social contract. It unlocks under-utilised assets and connects people in meaningful ways.
We see no reason why this cannot work in banking. By connecting borrowers with investors we are proving it’s possible to create more value all around: better returns for investors while offering borrowers meaningful savings. We think the “Personal” is really missing from Personal Loans, and we aim to fix that by creating a community that rewards good borrowers with better, more personalised rates.
The Australian finance sector is heavily regulated – what processes did SocietyOne have to go through to receive its license?
Before launching SocietyOne, we took great care to assess the regulatory environment and design a fully compliant structure that conformed with all of Australia’s credit and financial services laws. So for example, we are the holders of an Australian Credit License and we are also an Authorised Representative of Ironbark Asset Management Pty Ltd, the holder of an Australian Financial Services License, by which we can conduct a financial services business. We also took the additional precaution of establishing a Trust to segregate the interests of investors on the platform from the day-to-day operations of SocietyOne. It’s a flexible and transparent structure that holds investor interests (either as funds invested or entitlements to be received) as the loans are repaid.
What is your favourite SocietyOne success story so far?
My favourite success stories are without doubt, those where we are able to help customers solve a problem and offer them a much better deal. One of the best examples is one of our first customers from the Gold Coast. She discovered us not long after we launched our platform while doing comparison shopping online through a comparison rate site. Her first loan was to consolidate expensive credit card debt on which she was paying interest rates from 19% to 29%. Since then, she has refinanced her original loan and topped up with funds to repair her old car and more recently, to buy a new one. The process has been so positive that she has referred her friends to SocietyOne. She even invited me to speak at her work association’s annual conference! What I appreciate most is that – while our price has been important – that’s not the only reason she has come back. It’s because she thinks this is a superior experience: she is fascinated by the people-powered process and thinks we are great to deal with.
Where would you like to see SocietyOne in a year’s time?
We expect that the market will grow significantly as it has done in other international markets. With Comprehensive Credit Reporting now in effect in Australia there are some exciting opportunities for us to provide creditworthy borrowers more innovative solutions and a much better deal going forward. We have a few exciting products in the pipeline – in a year’s time we’d like to see our Peer-to-Peer Livestock Lending program expand to include a wide range of agent networks across the country. We also want to see our special Peer-to-Peer Medical Lending Program reach a broader group of professional categories like radiographers, dentists, engineers, CPAs, etc. Our goal is to turn SocietyOne into a true multi-asset P2P lender that can offer investors a unique opportunity to diversify across multiple fixed-income asset classes using an online marketplace model.
