Platform risk and diversity - a heretical thought?

In economic downturn all platforms will have issues and will be hit hard but so will stock shares etc. The main risk to platforms if you ignore the economic risk (as would effect all and you could go on for ever with that) to me are:-

Fraud
Poor evaluation of current value of security
Poor control of recovering bad loans 
Over lending 
Unrealistic objectives i.e loan to build 8 houses no planning permission yet loaning full amount in one go 

Totally agree how many of the current P2P platforms are making a profit? yes the market is still growing and yes the existing lending market dominated by traditional banks is huge but how much of this business is really going to move over to P2P platforms at rates that are going to keep investors interested. I personally will not touch anything under 6% on any organisation not covered by the FCA's deposit guarantee, which I think is where the largest growth could be for P2P platforms to eat the Banks lunch.

I am starting to worry that my desire to diversification across many platforms is actually going to result in me almost guaranteeing I will be using the platform that is wound up because it just cannot get sufficient business. Granted this will be only a small portion of my portfolio but maybe soon I will need to think more carefully about the long term survivability of the platforms I use and move appropriately.

I am probably in too many although most of my money is in 5 of the bigger ones and two of the crowd funding ones. I have smaller amounts in several of the other sites, one of which is probably at risk through to lack of business, but then if you plan on keeping small the costs are not that much so they still might be making enough profit to keep going. 

beta.companieshouse.gov.uk has the last published accounts but some of the platforms are too new to be listed.

Different platforms for different asset types, as hopefully they won't all correlate.

The platforms that worry me are those that are not demonstrating regular new loans while developing more and more complicated software solutions or spending big money on marketing. 

This appears to come about when the first wash of youth has ended and someone decided that "we need a strategic change", this of course does two things 1) stimulates a second large cash burn and 2) distracts from the core cash generation process.

I guess just about every platform has to do this in the business cycle but that would be the period when I would be concerned.

Right now of my five platforms, one is deep in this process and one is skirting the edge of the "strategic change" element.

Just to be clear FC has now stepped beyond this point and is moving into a market dominant position (which opens it up to all kinds of interesting legislation).

Clearly if the market conditions means that core cash generation becomes impossible the clever business will the one that manages to survive by either a) a good balance sheet or b) a cash cow element in the business mix that will ensure that it keeps ticking over

If I was selecting a new portal I would be using these as yardsticks rather than say, their speed of answering the phone

I am a relative newb and have been signing up for a wide variety with smallish amounts for now to practice and really get to know the platforms before committing more. In my enthusiasm I nearly came unstuck on one site that looked fine at first glance but turned out to be very dodgy once I started engaging with it: 

o Refused to divulge who would take over the loans if the site went bust.

o Refused to give any details of loan security, trying to use the data protection act as an excuse for their complete lack of information.

o Glib, evasive and dismissive when asked direct questions on their section of the forum. The message seemed to be "just trust us it will be fine". Given that some of its numerous directors have been heavily involved with dodgy banks I do not feel inclined to do that.

o Had a website built from a modified blogging platform, marked as beta test software, riddled with bugs and completely opaque and incomprehensible  in its operation. At one point it looked like a faulty autoinvest had trapped all my money in the site, but after some fiddling I managed to find a way to get most of it out. Some of it is still trapped but I'm hoping to free it up in a few days and get out without loss.

So in future I will be much more wary. Diversifying to mitigate the effects of platform failure seems a good plan but so is avoiding platforms that are potentially fraudulent, easily hacked, incompetent or lazy.