The alternative finance models of crowdfunding and P2P lending have been growing rapidly in popularity over the last few years, as individuals and businesses turn to them for much needed finance and better ways of using their money. In 2014 alone, P2P lending and crowdfunding platforms delivered more than £1.7 billion in finance to UK SME’s and individuals. In our study of the sector, we project it to more than double in 2015.

However, this market is not only growing in size, but also evolving in how it operates and serves customers. Established platforms are seeking out new markets and new entrants are constantly innovating the services being made available. At the same time, traditional funders from banks to local governments are exploring how they can make the most of these new opportunities presented by P2P lending and crowdfunding.  

In this blog series we set out some of the major trends that will dominate the alternative finance market over the next decade.

Some of these, such as civic crowdfunding and the established institutions tapping into alternative finance are already happening but have the potential to become much more mainstream. Others, such as crypto currencies and crowdfunding in developing economies, have still to be explored in much depth.

While this hopefully provides some insight into the rapidly-evolving crowdfunding and P2P lending industry, it is also clear that practice is years ahead of research. At Nesta we are interested in further understanding how these trends will evolve, and in exploring future opportunities for collaboration on research. We also recognise that this isn’t the definite list of future developments, and would be really interested in your views.

This blog series is the first in a new wave of research and thought pieces from Nesta’s Centre for Innovation in Finance.

• Blog 1. Big and Small Funders Learning to Play Together
• Blog 2. Crowdfunding Public Services
• Blog 3. More Than Money - Crowdsourcing Meets Crowdfunding
• Blog 4. Crowdfunding and Cryptocurrencies
• Blog 5. Making Everyone an Investment Manager
• Blog 6. Not Disrupting, Building - Crowdfunding and P2P Lending will be an Integral Part of New Financial Systems in Developing Economies
• Blog 7. The Rise of the Crowdfunding Consultant
• Blog 8. The competition between global, local and niche crowdfunding sites