With the year racing towards the finish line, here’s the latest on what’s happening across the Squirrel P2P platform, and what we expect from this month’s OCR announcement.
Verification: why we ask the tough questions
You’ve probably noticed we’re pretty strict around identification, source-of-funds and transaction monitoring. Here’s why – yes, it’s a regulatory requirement, but more importantly it keeps Kiwi money safe.
This year, we’ve stopped three attempted money-laundering cases involving Squirrel accounts. In all three cases, the scam victims had their money safely returned.
Our controls are intentionally tough so we can beat scammers, which can create a little extra friction for you at times. We genuinely appreciate your patience. If you’re curious, here’s an article I wrote explaining how Squirrel works to stop money laundering in its tracks.
Important note: No Squirrel customer accounts were compromised. These incidents relate to the broader banking system, and this is where we play our part as a responsible operator.
OCR announcement 26 November: what we’re expecting
The Reserve Bank is widely expected to cut the OCR by 0.25% p.a.
The real question will be the tone of the announcement—will this be the final cut in the cycle? My view (for what it's worth…) is yes, based on current data.
What does that mean for your investment? If the OCR drops, we’ll reduce the On-Call Account rate accordingly. We’ll wait until the dust settles before making any decisions around the Term Investment and Managed Funds returns.
Housing market: a bit more movement
We’re seeing more transactions occur as sellers gain some tractions, which is a welcome shift.
Earlier this year I mentioned that I expected an increase in mortgagee sales across the market. That trend is playing out now, and I expect to see more into early next year as the final part of the cycle works its way through. I think we’ll be largely at the end of this cycle by the time we get to April.
Loan performance and portfolio update
Some of the longer-running over-term loans in the portfolio are finally closing out this month.
We’ve been working closely with borrowers to deliver the best outcome for our investors, and sometimes that means some tough conversations. The good news is that many of the trickier situations are resolving and of course, our Reserve Funds continue to grow and are there if needed.
And finally, waiting times… there is good news with wait times trending down for home loan and construction loan term investments.
This should continue over the next few weeks based on the lending pipeline. The personal loans wait times remain long (no change).
Questions, comments, ideas?
You'll hear from me again before Christmas with a bit of a wrap-up on the year that's been. In the meantime, I hope the run into the festive season is a smooth and joyous one.
If you’ve got feedback —what’s working well and what we could be doing better — I’d love to hear it. Get in touch at dave@squirrel.co.nz.