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September 18, 2017updated 27 Sep 2023 8:46am

Liquid Lunch: Rhydian Lewis on ‘dinosaur’ banks and making RateSetter the ‘crowdsourced Libor’

By Alec Marsh

Alec Marsh lunches with Rhydian Lewis, the founder and CEO of peer-to-peer lender RateSetter. Just don’t call it fintech

The first thing you notice as Rhydian Lewis strides towards the Spear’s table at 1 Lombard Street is what very white teeth he has. They’re not quite LA, fridge-freezer white, but they’re good-sized and – along with a slightly hesitant manner of speaking involving non-verbal punctuations that come out as half-smiles – it’s a bit Alastair Sim. Lewis, you’ll doubtless know, is the founder and CEO of peer-to-peer lender RateSetter and as such is fintech royalty. Since he and co-founder Peter Behrens set up the online exchange from a flat in 2010, it has handled the loans of £2 billion.

Over two glasses of white burgundy I ask him to start at the beginning. ‘I’m sure that a very happy and peaceful childhood has made me basically a very cheerful person,’ he offers, explaining that he was raised in South Oxfordshire near Lambourn, in a horseracing family, an activity which remains a big thing in his life. Betting, however, is not: ‘It’s futile,’ he notes.

We order pea and mint soup and asparagus and poached eggs to start, followed by grilled salmon and veal milanese. Lewis’s journey continues: school at Sunningdale, followed by Eton. Then to Bristol to read two degrees: first French and Spanish, then Arabic, taking a first in both.

‘I was mortified not to get into Oxford because I thought I had the intellectual ability to do so,’ he recalls. ‘Whether I had the emotional maturity is a different matter. I’ve come to realise the importance of emotional intelligence to give other forms of intelligence the chance to come out right.’ Was that helpful for RateSetter? ‘Actually I wouldn’t put those qualities high on the list of what got us going. I think sheer bloody-mindedness and not really worrying – even if you’re detecting what other people are thinking – has a place in time and for a period that’s actually what one wants.’

I get the impression that Lewis, 40, does sheer bloody-mindedness rather well, albeit in a firm, courteous fashion that’s more Smiley than Social Network. But we’re getting ahead of ourselves: after Bristol, he worked in a bookshop, went travelling, and then called up the online bookie Betfair, ‘desperate for a job’. It was instructive: while he was there the firm grew from 40 staff to 200. ‘It imprinted on my mind quite an optimistic view of how businesses can grow,’ he says.

Nine months in, with a request for shares rejected, he quit and joined a grad scheme at Lazards, ending up in the financials team. It was there that the idea for RateSetter crystallised. ‘I really like markets,’ says Lewis, as he slices up his veal. ‘I love transparency and I love open participation.’

He doesn’t love banks, though – ‘dinosaurs’, he calls them, crippled by a conflict of interest as deposit-takers and lenders. ‘Those two things are basically incompatible and every 30-40 years that fact is proven. It makes so much more sense for lending to be funded by investment as opposed to by an instrument called the deposit’ – not least because of the strictures imposed by regulators. ‘Basically the bank is going to be too safe for 99 years and then for one calamitous year it’s not going to be safe enough. Arguably it’s kind of wrong the whole time.’

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Which is where his outfit comes in. More fin than tech (‘tech is delivery’), he says: ‘We think that by saving that pot of over-insurance there’s actually value being created. And if there’s a bit more value on the table, you as a customer can have some of it and we’ll keep some of it, so the business can sustainably start competing against banks and not just be jokers on the sidelines to pick up the scraps, which is where it probably had to start.’

Some start. So far, 50,000 people have lent money through RateSetter, with £1.3 billion of loans repaid. Turnover this year should be £30 million; the headcount is 260. ‘Our ambition is that in due course the rates exchanged on RateSetter will be seen as benchmark rates,’ he says. And one day he would like peer-to-peer lending be ‘a crowd-sourced Libor’.

The official title of the nine people on the Bank of England’s monetary policy committee is Rate Setters, he notes, and that’s not a coincidence: ‘The whole point is democratising
the rate-setting process.’

It’s not too late to purchase your ticket to the Spear’s Wealth Insight Forum 2017 with Rhydian Lewis, Gina Miller, and many more thought leaders from the wealth management industry and beyond.

This feature first appeared in the September/October issue of Spear’s which is available at your nearest WHSmiths travel store or independent news agent. To subscribe, visit www.spearswms.com/subscribe

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