‘Technology’ category

The ZOPA Part 3 – your place in the queue

Posted by Matt at 5:30 pm

This post is aimed at those lenders who are interested in the technical details behind matching borrowers with lenders. The change to the matching mechanism discussed here is a subtle point and only makes a marginal difference to how fast a lender’s money is lent out but, for the team at Zopa these details are important so I’ve written this post to share our thinking.

The Zopa marketplace matches lender offers with borrower loan requests by putting lender offers into a queue; there is a different queue for each market. When a borrower requests a personalised quote for a loan the system takes offers off the queue until it the requested loan amount is met. The borrower’s quoted APR is an average of the rates offered by lenders participating in the loan.

The lending offer queue is ordered by:

• Interest rate (cheapest to most expensive) and then by
• The time the interest rate was last set in that market

The second criterion is changing to use a round robin queue order. This means that as soon as a lending offer in a market is matched with a borrower’s loan request the offer goes to the back of the queue. Because there are more personalised quotes than actual loan applications the queue position changes very frequently and all lenders have an equal chance of participating in loans.

This change makes a difference only at the margins but is a step toward ensuring an equitable distribution of loans across all lenders which should make the market that little bit more efficient – prices should be driven by consideration of risk and reward and by the forces of supply and demand; not by the micro-structure of our market place.
The only difference you will see on the lending offer page is the Minimum Loan Size column will disappear (this currently appears when you click on more info button). This figure made sense when your queue position was fixed but not when it is constantly changing. Also, the MLS was an important figure in calculation of the ZOPA but it plays no role in the new method described in part 2 of this blog series.

Posted in Changes, General, Lenders, New stuff, Technology | 10 Comments »

The ZOPA Part 2 – an accurate and stable lending forecast

Posted by Matt at 1:59 pm

The ZOPA is a range of rates over which you can expect to lend out money over the next 7 days.  The bottom of the ZOPA is where you will lend out your money as fast as possible by participating in all loan applications.  The top of the ZOPA is where you will lend out your money at a slow rate while still participating in some loan applications over the coming week.  The rate you choose in each market should give you a return you find acceptable after fees and possible bad debt regardless of what the rest of the market is doing.  But, if you select a very high rate that is above the Zopa in all markets, you may not lend money and earn no interest at all.

To give you an accurate forecast of your lending over the next 7 days we need to work out two key figures:

1. The percentage of loans your lending offer will participate in a given market
2. The total number of loans that will be disbursed in the next 7 days in that market

• Lending Forecast=Loans Disbursed × Participation Rate × Max Exposure

Posted in Changes, Design, General, Lenders, New stuff, Technology | 2 Comments »

The ZOPA Part 1 – the ZOPA is getting better.

Posted by Matt at 4:15 pm

As a lender at Zopa you will be pleased to know that over the next few weeks we will be improving the information available to you when deciding what interest rate to offer to borrowers. These changes will make it easier for you to estimate how long it will take to lend your money on the Zopa marketplace and better equip you to choose the interest rate that is right for you.

Lenders set the rate they offer to borrowers on the lending offer page and one of the key features of the page is the ZOPA. The ZOPA is defined as “the ‘Zone of Possible Agreement’ and is where all the action takes place in a market. It is defined by the range of interest rates that were included in all the approved loans in the market over the last seven days, which is a good benchmark for how competitive rates will be over the next seven days. So, if the rate you’ve selected is in the ZOPA, you should get a good balance between lending your money out quickly and earning optimum returns. If the rate you’ve selected is too low, you’ll get your money lent out at the maximum possible speed but you could have earned a higher return on it. And if the rate you’ve selected is too high, you’ll take a long time to lend your money out and start earning interest”

In other words the ZOPA is a forecast of how much money you will lend out in the next 7 days. Right now this is worked out by following a simple and logical procedure:

1. Figure out where your lending offer is in the lending offer matching queue
2. Calculate the smallest size of loan the lending offer can participate in given its position in the queue
3. Work out the number of sufficiently large loans that were disbursed in the last 7 days and assume the same number will be disbursed in the next 7 days – this is the lending forecast

The method suffers a drawback – a lending offer’s position in the matching queue can change significantly through-out the day as other lending offers further up the queue are matched or funded and drop in and out of the queue. This often means that the top and bottom of the ZOPA changes significantly from one hour to the next. Since the ZOPA is intended to provide a 7 day forecast this can be confusing and doesn’t serve the intended purpose.

Work is in progress to provide a more accurate lending forecast and a more stable ZOPA to give our lenders the best and most consistent experience possible. I’ll be posting some details of the new method here in the next day or two.

Posted in Changes, Design, General, Lenders, Technology | 9 Comments »

Zopa’s time has come

Posted by Martin at 1:40 pm

Last month, a very senior figure at the Bank of England – Andrew Haldane – made an important speech in New York and put a number of very lively cats amongst the pigeons of banking. He said:

“Small peer-to-peer lenders like Zopa could in time replace High Street banks.  These firms could be revolutionary.  At present, these companies are tiny.  But so, a decade and a half ago, was Google.  If eBay can solve the lemons problem [duff products] in the second-hand sales market, it can be done in the market for loans”.

Zopa and the wave of peer-to-peer innovation it has kicked off has been singled out before by policymakers like Haldane – as examples of how deep innovation can bring powerful new competitive pressures to bear on the apparently sleeping dinosaurs of the banking sector.  Zopa has been mentioned in no less than four White Papers across two Governments now and continues to be a favourite poster child for the Coalition  when envisaging the bright new world that UK technological innovation can bring about – even in the City.

Mr Haldane’s comments have clearly served to raise the profile of how Zopa is disrupting finance to give people a better deal on their money.  But he is not the first distinguished commentator to draw parallels between Zopa and the impact Google has had on access to information, Amazon on the market for cheap books and eBay on the ability to find, buy and sell “stuff”.

This increasingly bright spotlight helps to make these prophecies come true.  Despite the crucial nature of competitive priced loans and inflation-beating returns to the public’s well-being, radically better deals on money tend to be less head-turning   than easy, cheap access to your favourite music, books and gadgets, that vintage Fender guitar you always wanted and information you’re after about, well, anything.  However, as more and more people have enjoyed some of the cheapest loans available and returns on their savings that have easily beaten inflation when not a single bank account did, public awareness of Zopa’s offering continues to grow.

So three cheers for Mr Haldane, his fellow luminaries, and the press for picking the story up so enthusiastically.  Even today’s LEX column in the FT cites the importance of the P2P finance movement. They have all helped make more Britons aware of the better way that there now is to borrow and save money, something as essential as it gets. Let the disruption continue!

Posted in Finance, P2P, Press, Technology, web 2.0 | No Comments »

Lending Offer Screen: Understanding the data

Posted by Marie at 12:23 pm

Creating a Lending Offer is one of the key actions a Lender at Zopa can take. To make the experience simpler for new Lenders and at the same time give enough information to more experienced Lenders, we have launched a new simplified Lending Offer screen today.

This blog post explains the changes we have made to the screens and above all, the data they present to our Lenders.

Zopa icon
The data that informs the Zopa icon has been changed slightly to be more representative of what’s actually going on in the markets. While previously, the Zopa looked at the last 5 matched applications and defined the lower and upper boundaries as the lowest and highest rates included in these loans (which meant the Zopa could fluctuate quite rapidly), the new Zopa boundaries are defined by the extremes of the last 7 days.

The upper boundary comes into force when the rate you’ve selected was not included in any of the loans approved in the market during the last week, while the lower boundary is defined by the rate that would’ve gotten you included in absolutely every loan approved in the past week in the respective market.

More information section
One of the key improvements in the new screen is the quality of data we provide that further informs how you set rates – in addition to the Zopa icon. Instead of the ‘Max rate’, ‘Min rate’, ‘Lending Speed’ and ‘Offered Lower’ columns, you can now see a ‘Lending Forecast’, ‘% Loans’ and ‘Minimum loan size’, based on the data of the last 7 days.

These columns are intended to show more experienced (or interested newbie!) Lenders what they could have lent and how many % of loans they would have been included in the past 7 days and at what loan size their money would currently be matched at using the selected rate. While we can’t issue 100% accurate predictions, the performance in the previous week should be a good indicator of the possible performance in the future.

Market data
You may have heard of our weekly market data spreadsheet in the weekly Lender email, you may have even downloaded it before. If you have, you might also know that it’s updated once a week on a Monday, and therefore not very useful on a Friday afternoon when you want to find out where you are in the Queue. On the upside, it’s in a spreadsheet format, so you can easily find yourself and do calculations that help inform your rate choices – if you want to get really stuck in.

At the same time, the previous lending screen had a little ‘Mkt’ link, which opened a window showing you the real-time Queue to a high degree of detail, but unfortunately not in a format that’s very easy to play with.

For the new screen, we’ve decided to take the best of both worlds and provide a downloadable spreadsheet providing up-to-date information on the current Queue of Offers in all markets. Additionally, we’ve anonymised the information (except for your username) for security reasons.

All that aside, we believe the new screens are a lot cleaner and easier to navigate, and should make it less daunting for new Lenders and more insightful for experienced Lenders to play with their Lending Offer.

Posted in Changes, Design, New stuff, Technology | 36 Comments »

Mixing it up in Vegas (baby)

Posted by Beth at 9:43 am

Zopa has been working with Microsoft for a few months now – looking at ways in which we can use some of their new Windows Live services to provide useful tools for our members. As a result of this, they were kind enough to invite me over to Las Vegas the other week to take part in the Mix 07 conference they were hosting.

They describe Mix as being “A 72 hour conversation” – and with a great mix of developers, designers and the odd business person (like me) it was a great few days – with some very interesting Keynote speakers and content.

Zopa’s little moment of fame came when I talked about Zopa and demoed a new service we’re hoping to roll out very shortly (We’ve done our bit – Microsoft need to finish theirs!) – you can see the video below.

The idea is to use your Windows Live contact list (or your Hotmail, or MSN Messenger contacts – they’re all the same thing) in the Zopa ‘Tell a friend’ scheme – so you don’t have to type in everyones email addresses again and again. To do this, we’re using a new service from Microsoft that allows third parties like Zopa to access and amend users contacts (With their permission of course) – and we’re one of the first companies in the world to be doing this.

I also talk a little in the video about future plans for creating ‘friends and family’ networks within Zopa – using additional Microsoft services that they’re planning on releasing over the next 12 months – but the ‘Tell a friend’ piece should be live very soon.

I’d be interested to hear what you think about the new tool – and also what else you think we could be doing with Microsoft.

Posted in mix07, New stuff, Technology, web 2.0 | 5 Comments »

New toy

Posted by Beth at 3:06 pm

I promise I won’t make a habit of this, but if anyone’s in the market for a new camera phone – I can recommend the Sony Ericsson K800i.

You might remember I complained about the camera on my SE P910i a few posts ago, well I upgraded this week, and the photo below is an example of what it can do.

Taken at Clapham Junction late last night, I was playing round with the night mode which uses image stabilisation technology so you can take a photo without a flash and still get a great shot with a slow exposure. (You can click the photo to get the full 3 megapixel glory)

Other features of note – a full xenon flash (the same as you’d find on a ‘proper’ camera), ‘Best shot’ (Which takes 4 shots before you press the shutter, and 4 after- so you can choose the best one) and auto focus.

Anyway – SE plugging over…but colour me impressed – this ‘phone’ has pretty much the same camera specs as my first digital camera…and that wasn’t many years ago.

Posted in Non Zopa, Technology | No Comments »

Powerlenders are go!

Posted by Beth at 4:33 pm

We had a web site release yesterday – which I’ve said I won’t write about here any more (and talk about them on the discussion boards instead), but this was an important one.

For the first time at Zopa, it is possible to lend more than £25,000 to Zopa borrowers. This is a great thing – it means we can have larger lenders lending through Zopa, which means that more borrowers will get the loans they want – which has to be a good thing for all concerned.

It’s been a big job to get this live, and the reason why is principally to do with a piece of legislation known as the Consumer Credit Act (CCA).

Because people who lend more than £25,000 could be considered to be lending in the course of a business by the Office of Fair Trading (who are responsible for regulating unsecured lending in the UK), they need two things – 1) a consumer credit licence, and 2) to be lending in a way that is in line with the CCA.

The CCA sets out, in painful detail, exactly how a loan contract should be presented to borrowers, how both parties should sign it, and what document has to be available. It’s been designed with big banks in mind – where there is one lender and one borrower.

Zopa is of course slightly different. Lenders lend to at least 50 borrowers, in £10 contracts (£500 for CCA lenders, unless they ask us to change it). So a CCA lender (who are the only lenders who need to worry about this) can have hundreds of contracts to sign. Each one has be individually signed with a distinct action on the behalf of the lender (So a tick box that say’s “Sign all” won’t cut it), with it’s own time stamp. In additin, each contact has to be made available as a downloadable (and signable!) PDF document – all filled out with the amount of the contact, the lenders contact details (Their username, and Zopa’s Tipton address) and the time and date. Quite a task….

Anyway – after much work and input from just about everyone in the office (We’re an opinionated lot around here) we finally came up with a solution. It’s so clever, it’s patent pending, and because only CCA lenders will get to see it ‘in the wild’ I thought I’d show you a video of it here. (Can you tell we’ve got a YouTube account recently?)

(You can also download it here (Quicktime file) – slightly better quality than the YouTube version – and a snip at 9MB)

Besides this new signing screen, there has been a huge amount of work on the entire site to get this implemented, and I think it’s worth taking some time to thanks people individually – so here goes:

• Tim – for managing the whole process and getting it delivered on time
• Simon DJ – for legal input and creative thinking about how you sign contracts online
• Ian @ BJSS – for leading the team there who have created a technical wonder – we really have no idea how it actually works
• Sarah and Justin – for managing the design and usability work involved….with him being an Apple user is it any wonder we settled on 1 button?
• Damon and Dan @ Pynk & Fluffy – for the early Flash mock ups and working up endless prototypes
• Giles – for getting lenders to sign up to lend under the Zopa Powerlender scheme
• Thomas B and Tom E – for HTML, deployment skills under pressure and lots of copy
• Hilary, Ian and everyone else in Tipton – for testing the release over a hot and sweaty weekend, and making sure everything (pretty much) worked as it was supposed to
• James – for pushing the whole damn thing into motion in the first place

Thank you everyone!

Posted in Lenders, New stuff, Technology | 3 Comments »

Opening up Zopa data

Posted by Beth at 7:14 pm

You might not have noticed, but over on the discussion board we’ve been talking about the new Zopa API (v0.5!). An API is a a way that third parties (members, other organisations etc) can access Zopa data without coming to the Zopa web site and signing in.

The first baby steps on this path have been taken – we’ve taken the data from the marketplace screens and made it available via a URL as XML data. In future we want to allow members to access their own data this way (with security in place) and eventually, to allow people to transact at Zopa, from outside the website.

We’ll be extending the range of data available over this path in the coming months – but in the mean time, go have a look, and see what you can do with this new tool.

Posted in Members, New stuff, Technology | No Comments »

We’ve gone Mac and aren’t going back!

Posted by Beth at 5:18 am

We tried Skype, we heard robots.
We tried email, but the message (and relationships) couldn’t be nurtured right.
We bought iSight, but lacked universal reach (only Mac compatible).
So we decked the US & UK offices out with brand new Macs! Free calls and great video chat all around – Yippee!

Has anyone checked out the latest Mac vs. PC ads – hysterical. You can watch the video here.

I think the stuffy guy looks like a heavier Bill Gates (no offense, Bill)? Anyone vote differently?

~Megan

Posted in America, General, Technology | 6 Comments »

Avoiding the geek trap

Posted by Beth at 11:12 pm

Josh Kopelman has an interesting post where he talk about companies that target a very early adopter community of ‘Web 2.0 geeks.’

As Zopa’s resident geek, this struck a cord. I love finding great new web sites, like Pandora, or Zillow, or Flickr. But how many of our members use them as well?

Josh’s post raises the issue of designing for the early adoptors…and whether by doing so, a company runs the risk of alienating mainstream consumer.

Zopa definitely has a core of early adoptors – we did a survey about 6 months ago, and we asked a sample of our base whether they used various web sites or web technologies (RSS, blogs, eBay etc) – and I was astonished at how tech savvy many of our members were.

The challenge for Zopa, and any other Web 2.0 company, is to move beyond this early core, and attract a more mass market crowd…but to do so in a way that doesn’t ‘dumb down’ too much for the geeks.

We’re doing it through research – both with a mainstream audience and some of our most active members, and as a result we’re trying very hard to build a web site that balances both needs.

Our aim is a site that offers two levels of interaction with Zopa. A very simple, quick and easy route to lend (or borrow – although we’re focused on lending really here), and a much more involved route – with access to data, RSS feeds, analytical tools etc.

This isn’t something we can do in an afternoon, but you should see the signs gradually over the coming months. Let us know how we’re doing, and please, if you think we’re about to fall into the chasm, throw us a rope.

Posted in Members, Technology | 2 Comments »

Skyping Zopa

Posted by Beth at 5:22 pm

We’d love to be the next Skype (Well, wouldn’t you?), but in the mean time we’ve finally got ourselves Skyped up – and much hilarity in the office ensued as some of the less technically literate of the team struggled with such advanced concepts as headphones. (Hello Giles!)

Anyway – we did it to cut down our communications costs between the UK and US offices, but if anyone fancies a chat with me please feel free to:

If you want to get in touch, please do, and if you want to add me as a contact you can do as well – but put something about Zopa in your contact invitation or I probably won’t accept you…too much dodgy Skype spam otherwise!

Posted in Members, Team, Technology | 4 Comments »

Technical hitches

Posted by Beth at 11:56 am

We’ve been having some volume related problems over the last few days with both our email system and our database. This has meant that some emails have not been received, and that borrowers are waiting longer than normal for a decision to be made on their loan applications.

We’re very sorry about all this – one of the dis-advantages of not having a Barclays Bank sized IT budget – but we’re all over it like a rash, and normal service will be resumed shortly.

If you’ve written to us over the last few days and we haven’t replied, it might be worth resending your email. If you’ve applied for a loan, we will get back to you as soon as possible, but it is taking a few days longer than normal.

Thanks for your understanding and patience – and for helping to give us these sort of problems by growing Zopa!

Posted in Bugs and problems, Technology | No Comments »

Simple is as simple does

Posted by Beth at 1:50 pm

We’re spending a lot of time at the moment thinking about the next generation of Zopa – and as you might imagine, we have lots (and lots) of ideas about what we’d like ‘Zopa 2.0′ to be, what we’d like it to be able to offer members, and how it all might work.

But actually thinking up all this stuff is the easy bit. It turns out the hard(est) bit is to make it all usable for our members – simple but powerful is a terribly difficult combination of things to achieve. To be honest, I think we started out well – with the help of our friends at Pynk and Fluffy – but we’ve gone down hill over the last 6 months as we’ve been frantically adding in all the things we wanted to build for launch and never had the time or money to do so.

Anyway – this post was inspired by a great Fast Company article about the beauty of simplicity. When we pause, take a deep breath, and start to design Zopa 2.0 (and we’ve asked P&F to help us again so Tim and I don’t make it look like, er… this) we’re going to be working really hard on the simplicity angle. My personal belief is that Zopa is still at the ‘pre iPod MP3 player’ stage – lots of people thought that the concept of having all your music in your pocket was a great idea….but it took Apple to take that idea and make it truely usable. Today, Zopa is a bit like the Rio Diamond (but with nicer colours), tomorrow, we want to be the iPod. (Does that make any sense?)

What would you like to see Zopa make simpler? Are there things about the site today that just confuse the heck out of you? Let us know, and we’ll see what we can.

Posted in Design, New stuff, Technology | 17 Comments »

Now you see us…

Posted by Beth at 3:07 pm

We’re upgrading the site this afternoon – the site is likely to be down for an hour or so from 3:30. I’ll be back with a detailed explanation of what we’ve done later, once we know it’s all worked!

Posted in Changes, Technology | No Comments »