The alternative finance revolution may have been spearheaded by peer-to-peer (P2P) lender platforms in the UK, but they can benefit their investors and customers further by collaborating with challenger banks, a challenger bank co-founder has suggested.

Speaking to City A.M., Rishi Khosla, serial entrepreneur and co-founder of challenger bank OakNorth, which launched last year, said: “It’s logical for banks and P2P platforms to co-exist, and co-operate. Often, the risk profile platforms need to go to doesn’t match the kind of investors they’re working with, but we can help mitigate some of that risk.”

Khosla cited the example of London-based serviced apartments provider Thesqua.re, which raised financing from OakNorth in January this year. A fortnight later, it secured further financing from 15 retail investors via a P2P platform, raising a total of $2 million to build 500 apartments in central London in the coming two years.

He believes that having already secured funding from a bank, Thesqua.re appeared more credible to P2P investors, as OakNorth had already undertaken a good deal of vetting and due diligence. The latter made raising additional funds through a P2P lender platform easier, not just for Thesqua.re but also for the platform and its investors.

On the relationship between challenger banks and P2P platforms, Khosla said: “There is plenty of room for collaboration.” Challenger banks can support the platforms by providing sophisticated credit analysis skills, allowing retail investors to come forward and make more informed decisions.

UK P2P lender Unbolted, however, has already dispensed with the need for credit analysis, offering a unique secured asset loan, collateralising high-value assets owned by prospective borrowers as security for the loan.