< p>Over one-quarter of peer-to-peer (P2P) lenders seeking authorisation from the Financial Conduct Authority (FCA) have withdrawn their applications, according to specialist financial services regulatory consultancy, Bovill.

Bovill stated that this raises concerns over the ability of P2P firms to meet new regulatory requirements.

According to Bovill, the FCA has received 114 applications for full authorisation from new P2P lenders since April 2014, when the FCA took over the regulation of the consumer credit industry from the Office of Fair Trading.

Since then, 30 have been withdrawn. (23 were partial withdrawals where the applicant withdrew P2P lending activities specifically from its application, but proceeded with its application to carry on other regulated activities.) The other seven were full withdrawals.

Gillian Roche-Saunders, Head of Venture Finance at Bovill, said: “The high number of withdrawals suggests that the FCA IS setting the bar high when it comes to full authorisation for P2P lenders - the process appears to be much tougher and more costly than many firms first anticipated.

“P2P lenders have enjoyed a relatively light touch approach from the regulator for some time,” said Gillian.

“A rigorous authorisation process will have come as a shock to the system, particularly for smaller and less profitable lenders.”

Gillian said the FCA was leaving no stone unturned and looked carefully at how firms met strict consumer protection requirements.

“They are particularly focused on conduct risk and on ensuring P2P lenders have the right level of experience in their management teams,” said Gillian.

“The regulator is likely to put pressure on those they feel are not up to scratch to withdraw their application at an early stage.”

“Many firms are now hiring compliance officers or sourcing external advice to help them navigate the authorisation process. The industry is still very new, however, which means finding the right level of expertise can be a challenge.”