James Alexander Zopa

Slide 1: Social Finance: Where did it come from, where is it going? James Alexander Wednesday 14th May 2008

Slide 2: Consumers are changing “… The consumer revolution of the last 30 years is giving way to the Freeform Revolution of the next 30 …”

Slide 3: We have been here before Turning TECHNOLOGY INSTALLATION Point DEPLOYMENT REVOLUTION ERUPTION FRENZY GOLDEN AGE MATURITY 1st ‘Industrial Revolution’ Canal Panic 1825 1771 1797 1819 mania 1793 1810 Panic 2nd Age of Steam & Railways 1836 Railway 1847 1857 1866 1873 1829 mania Revolutions1848 Age of Steel, Electricity 1890 3rd & Heavy Engineering The “Great Argentina 1903 USA 1907 1920 1875 Depression” (Baring) USA “Rich man’s 1893 panic” 4th Age of Oil, Automobiles 1920* 1929 1930s 1974 & Mass Production USA stock 1960 1908 and “Oil crisis” mania WWII 1987 1997 5th Age of Information Asia 2005 ? & Telecommunications 1974* 1989 20?? 1971 2000 eBay “Oil crisis” Collapse NASDAQ 2nd World Source: Carlota Perez ‘Technological Revolutions and Financial Capital – the Dynamics of Bubbles and Golden Ages’

Slide 4: Freeform companies, enabled by technology are transforming industries Turning TECHNOLOGY INSTALLATION Point DEPLOYMENT REVOLUTION ERUPTION FRENZY GOLDEN AGE MATURITY 1987 1997 5th Age of Information Asia 2005 ? & Telecommunications 1974* 1989 20?? 1971 2000 eBay “Oil crisis” Collapse NASDAQ 2nd World 2000 2005 2010 P2P Payments P2P Voice P2P Video ? ? P2P Trading P2P Social Social Networks ? ? Personalised Search P2P Lending P2P Info P2P Photos eBay for things … iTunes for music … Zopa for money

Slide 5: The online marketplace where people meet to lend and borrow money With no bank in the middle, both parties get better rates Borrowers Lenders • Low, low rates • Great Returns • No banks • It’s human • It’s fair • It’s safe • You’re in control Lenders receiving a c.30% better return than base rate; Borrowers borrowing c.30% below the market

Slide 6: Financial return and social reward Working, differentiated, compelling • Launched in the UK March 2005 • >200,000 members • Borrowers getting the cheapest loans in the country • Lender returns 7-11% • <0.2% defaults • Launched in the US • Launched in Italy • JV in Japan

Slide 7: Control, community, transparency and ethicality key for value and trust Openness “No other financial site that I have visited is highly has the guts to run a discussion board and valued take it on the chin. That makes me feel like I am part of a Users feel community and seems to trigger a sense of valued belonging. With belonging comes pride and and passion. committed When I tell my friends about Zopa I feel hurt Users by any negative comments they make as become though the site was my own, and for that champions reason it gets me all wound up when I see of Zopa even the tiniest glitches on the site” Mosshill, Zopa lender (Oct 18 2006, 09:17 AM)

Slide 8: An evolving model More involving, more viral

Slide 9: An evolving model A derivative in the US

Slide 10: Social Finance is already global Expect proliferation, niches developing, consolidation

Slide 11: Opportunities • What new opportunities can you see to serve Freeformers? • How will you provide an experience that embraces • Community? • Transparency? • Control? • Ethicality? • How will you take your brand into a consumers life and give up demanding they hold a relationship with you?

Slide 12: Feel free to get in touch: James Alexander Jamesalexander1969@mac.com +44 7957 209670