Lyft is woke, also not nice, also also a better boyfriend, says Lyft.Continue reading: Thought for the weekend
Lyft is woke, also not nice, also also a better boyfriend, says Lyft.
Continue reading: Thought for the weekend
Lyft is woke, also not nice, also also a better boyfriend, says Lyft.
Continue reading: Thought for the weekend
Lyft is woke, also not nice, also also a better boyfriend, says Lyft.Continue reading: Thought for the weekend
News Comments Today’s main news: BlackRock bets on robots to improve stock picking. Orca launches beta platform to stream P2P market investment. Quint raises 10M GBP for recapitalization. Monzo raises 2.5M GBP via Crowdcube. RegTech Association launches in Australia. Lending fraud trial begins in China. Yirendai announces intent on performance bond agreement with PICC P&C. Today’s main analysis: The strategic case […]
BlackRock Inc. BLK +0.96% has started a shake-up of its stock picking business, relying more on robots rather than humans to make decisions on what to buy and sell.
Seven stock portfolio managers are among several dozen employees who are expected to leave the firm as part of the revamp, a person familiar with the matter said.
The changes are the most significant attempt yet to rejuvenate a unit that has long lagged behind rivals in performance. Clients have pulled money from the actively managed stock business in three of the past four years even as BlackRock’s total assets climbed to a record $5.1 trillion. BlackRock had $275.1 billion in active stock assets under management at the end of December, down from $317.3 billion three years earlier.
On Deck Capital Inc. is unlikely to be tempted by a takeout offer from privately held competitor Kabbage, but a combination of the two digital lenders could make strategic sense.
A combination of these two companies would create the largest digital lender focused on small and medium enterprises in the U.S., with an estimated combined 2016 loan origination amount of $3.82 billion.
While a few years ago this would have seemed like an odd pairing, recent changes to On Deck’s business model have moved it closer to Kabbage. On Deck itself has had a tough time as a publicly traded company, with shares falling about 80% since its IPO. The company has struggled to rework its business strategy and create a clear path for profitability, despite growing annual originations from an estimated $15.9 million in 2008 to $2.40 billion in 2016.
By leveraging their existing technology to develop white-label solutions for banks, both companies have found a new source of higher-margin revenue. A combination of what are arguably the most advanced underwriting systems in the SME lending space would only accelerate licensing deals, which could eventually become a significant portion of revenue.
A federal appeals court may offer guidance on “true lender” analysis and how it affects bank partnerships with marketplace lenders and fintech companies ( Cons. Fin. Protection Bureau v. CashCall Inc. , 9th Cir., 17-cv-80006, petition for interlocutory appeal 1/13/17 ).
At issue is a petition by CashCall Inc., an online lender based in Orange, Calif., that’s now before the U.S. Court of Appeals for the Ninth Circuit. CashCall wants the Ninth Circuit to hear a mid-case appeal from an August ruling in a deceptive practices case that said it was the “true lender” in an arrangement with Western Sky Financial, a self-described tribal loan company.
In general, “true lender” analysis scrutinizes relationships between banks and nonbanks to discern which party actually makes the loan to a consumer.
PeerStreet, an award-winning platform for investing in real estate backed loans, has announced an integration with Wealthfront, the most trusted automated investment service among young people with nearly $6 billion assets under management. This integration was made possible by the rollout of Wealthfront’s new financial planning experience, Path, which allows Wealthfront clients to receive financial advice and planning for all of their accounts.
As customers’ financial lives become increasingly complex, having all investments across platforms in one place provides consumers with more comprehensive information. PeerStreet users have sought out integrations with platforms like Wealthfront. Both PeerStreet and Wealthfront were able to quickly respond to their clients’ needs using Quovo, the industry leader in financial account connectivity. Using its account aggregation engine, customers investing on both platforms can view their PeerStreet positions within the context of their greater Wealthfront investment portfolio.
Rodrigo Niño is founder and CEO of a platform called Prodigy Network, which uses crowdfunding to build commercial real estate, like the tallest skyscraper in his home country of Colombia. Marketplace’s Molly Wood talked with Niño about crowdfunding.
Niño: I have to say that it is different because you would argue that traditional equity funding is easier because you deal only with one institution that gives you a check for the total equity that you require for a building, and you don’t need to deal with thousands of investors like we do. On the other hand, the top-down approach was one of the bigger issues in the crisis of 2007. We learned that the model of giving your money to experts that would know better didn’t work. So we like to believe that we act as curators of that collective wisdom of the crowd, and that they need to understand what they do.
Niño: I think that the model will spread and because this industry was ripe for disruption. You know, I think that the commercial real estate industry in the United States is even larger than the stock market. And now, thanks to technology and the JOBS Act, I believe that the public has access to incredible assets because it’s very understandable and very predictable. If you think about it, people cheat and lie and bricks don’t. So, that was exclusive to a select few, and now it is available to everybody.
Airbnb currently lists over 2.3 million homes, averaging more than 500,000 nightly stays across 65,000 cities. In 2016, the home-sharing giant snatched headlines after raising over $555 million from Google Capital and Technology Crossover Ventures, in pursuit of a reported $850 million round, raising the company’s valuation to $30 billion. This valuation positioned Airbnb as the second most profitable tech startup after Uber.
Founded in 2011 by Bill Lyons, Revestor is a digital real estate search engine that uses proprietary data and live listings to help sync realtors and potential investors with desired residential properties. While other services allow users to search real estate based on specific property details, Revestor lets users search based on investment criteria. This approach works to ensure the most profitable use of available funds, helping homebuyers track the projected resale value of their property over time. Thus, real estate investors can use various tools to determine whether a property matches their firm investing goals.
Bill Lyons: Per a 2016 National Association of Realtor’s study, 51% of home buyers found their home without using an agent. Additionally, over 90% used the internet to research the home they were buying.
Bill Lyons: The riches are in the niches. Everyone has their niche, and Revestor’s niche is that 25% of the business is investors.
Bill Lyons: Crowd funding for real estate is on the rise with companies like Patch of Land and RealtyMogul. I can see Revestor playing a key role in analyzing investments for private groups of individuals.
But a new study by consulting firm Accenture finds that clients across all ages and economic brackets want robots and humans together, not one instead of the other.
The findings follow news on Tuesday that BlackRock (BHK, +0.08%), the world’s biggest money manager, was laying off some portfolio managers in favor of spending more on data-mining techniques that could improve investment performance.
However, the market is changing so rapidly that study respondents said online tools they considered to be “bells and whistles two years ago” are now expected, Thompson said.
John Ndege, founder and CEO of Pocket Risk, is predicting a collapse in the world of robo-advisors.
On Tuesday, Ndege announced a complete re-launch of his software, Pocket Risk 2, a digital risk tolerance questionnaire that attempts to holistically measure an individual’s risk tolerance and capacity.
Rather than an engine of efficiency, Ndege presents Pocket Risk as a tool to make financial advice more effective. According to Ndege, trust and awareness are the largest barriers between the advice industry and new client acquisition, not technology. Thus, advisors would be better served focusing on delivering financial plans rather than building the next great client portal or onboarding application.
Garnet Capital Advisors, LLC is announcing the launch of a sale of $100 million of consumer loans on behalf of the National Credit Union Administration (NCUA).
Clarity Services, the subprime industry’s largest credit reporting agency, today announced the release of its 2017 Subprime Lending Trends report. More than just a demographics report, it offers exclusive insight into emerging consumer trends that can help lenders reach the consumer where they are.
The report is based on a dataset containing exclusive performance data on 16 million loans from the past four years.
Orca, an independent data, research and analysis provider in the UK P2P lending market, launched a new platform which aims to help financial advisers and sophisticated investors to better “seize” opportunities within the P2P market. The platform, by offering unique standardized metrics to compare P2P investments, will allow users to perform in-depth due diligence on P2P investments, benchmark them, and make risk-adjusted, informed investment decisions or recommendations.
The Belfast-based platform noted that the P2P market has seen tremendous growth in the past two years, increasing by 40% in 2016 and estimates that by 2020 around 2.7 million people will be investing in P2P.
Through Orca’s relationships with UK P2P lending providers, the platform has translated millions of loans, covering 90% of the UK P2P professional market.
NORTH West headquartered Quint Group, a leading international, highly innovative fintech group operating in the consumer finance market, has secured a £10m financing deal from Manchester based Tosca Debt Capital to fund its recapitalisation.
Quint is the company behind the UK’s fastest growing consumer price comparison site MoneyGuru.com*. It also owns and operates a portfolio of mutually beneficial and strategically aligned financial technology businesses in the consumer credit sector, including business-to-business lending marketplace and platform, Monevo, consumer credit reporting and financial management services such as Credit Angel, as well as its data business, Monevo Data Services which develops and provides cutting edge credit, risk, marketing and analytical data to the financial services sector.
Digital bank Monzo has broken a platform record on Crowdcube. The challenger bank has raised £2.46 million supported by 6,800 plus investors. The offer on Crowdcube is for 2.83% equity at a valuation of £84.75 million. The number of investors that have participated in the Monzo offer is the most ever on Crowdcube.
The challenger bank is raising a total of £22 million in the Series C investment round, including a £19.5 million investment from Thrive Capital, £5 million from Passion Capital and £1.5 million from Orange Digital Ventures, alongside the £2.5 million of equity crowdfunding on Crowdcube.
What was formerly Saving Stream is now called Lendy. The operator of the marketplace has been Lendy Ltd. already, it was just trading as Saving Stream for investors. Now under the new domain Lendy.co.uk the company has brought together its services for investors and borrowers citing feedback by users.
The announcement email sent, reads:
Following feedback from users, we are integrating the Saving Stream platform under the Lendy brand. This is in order to simplify the brand and make accessing the crowdfunding platform easier for all our clients.
Theresa May has signed the letter that will formally separate the UK from its 43 year membership in the European Union. As the UK initiates Article 50, Lawrence Wintermeyer, CEO of Innovate Finance – the advocacy group that supports all things Fintech – is out with a cautionary statement. Wintermeyer fears that Brexit may undermine the UK’s dominance in disruptive finance as it may be unable to attract the necessary skills to remain the global leader in financial innovation.
Editor’s note: The EU was organized on November 1, 1993, making it 23 years old.
If you want to feel thoroughly depressed about your future financial prospects, we have a disheartening new stat for you: according to a new survey from peer-to-peer lending platform Lending Works, 24 percent of single adults believe that they will never be financially secure enough to retire in their old age.
After surveying over 1,500 UK adults who are yet to reach retirement age, Lending Works found that financial security is more of a worry for those of us who aren’t in a relationship.
19 percent of those who are married or living with their partner reported the same concern. More drastically, 40 percent of the singles said they are currently unable to save money each month to plan for the future, in comparison to 29 percent of those who are married or co-habiting.
National advice firm Alexander House has partnered with the parent company of The Daily Mail to launch a new firm called Timber Finance.
According to the website Timber will charge an initial fee of 1% with a minimum amount of £750. It will also charge an ongoing fee of 1% per years for advice.
A recent report released by the lab examines the insurtech sector specifically, and explores the investment landscape in the sector. The report analyzed over 450 deals conducted over the last three years, and reveals a particular focus in the sector on technologies such as AI and IoT. Indeed, deals in these two areas alone increased by 79% in 2016.
The insurance industry is targeting technologies such as AI and the IoT specifically to help it deliver more personalized service to increasingly demanding customers. The technologies both help provide insurers with more data to assess risk, and then help them do the calculations to underpin that assessment.
The NACFB has revealed that both Funding Circle and LeaseTeam Solutions Ltd will be supporting the event as the Association celebrates its 25th anniversary.
Academy courses will now be held for the first time in Manchester on 25-26th May, Edinburgh on 22-23rd June, Birmingham on 7-8th September and Bristol on 9-10th November.
Ron Suber, the President of the US marketplace lender Prosper, was interviewed today by Cédric Teissier, the CEO of the French factoring platform Finexkap, at the annual conference of the France Fintech association, titled “Fintech Revolution 2017 – Here to Stay”. Cédric Teissier asked Ron Suber as head of a worldwide pioneering and leading online lender to share his advice and his vision for the benefit of French fintech startups.
Asked about consolidation in the US market. Ron Suber pointed out that there are 3,000 online lenders in China and 300 in the US. These lenders serve diverse categories of borrowers from student to larger SMEs, from super-prime to subprime. Consolidation will happen because it is all but easy to master the three legs of online lending: the investors, the borrowers and the platform’s operational efficiency in risk management.
There are 14 different ways to find borrowers such as direct mail, partnerships, promotion etc. But out of ten prospects, only two will come to loan origination. Startups must focus on conversion efficiency to start making money. Prosper is 10 years old and next quarter will be its first profitable quarter. Generating cash is the most powerful way to dissipate doubts.
“My vision of where we are going is that of a portal where any of us can go to invest in any currency and any country, a portal similar to the Amazon or Priceline of finance. We are only in the first or second inning of this revolution. I used to buy CDs. My kids never do. Soon they will say: “I can’t believe that you used to go to the bank to get money.”
Between 2010 and 2015, total global investment in FinTech amounted to $49.7 billion. The most popular FinTech areas are those of payment and lending services (consumer and retail), block-chain services, such as bitcoin, and cybersecurity and cloud-based services, such as market monitoring and tracking.
Compliance with the Distance Marketing of Consumer Financial Services Directive is regulated by the Malta Financial Services Authority (MFSA). Failure to comply with the provisions in the Distance Marketing of Consumer Financial Services Directive may result in an administrative fine of up to €93,000 on the supplier, or the manager, secretary, director or other person responsible for the supplier’s activity.
Under the Electronic Commerce (General) Regulations, implemented through S.L. 426.02 in Malta, the financial institution shall only send direct marketing by electronic means if certain conditions are met.
The First Hall of the Civil Court in Malta may fine up to €4,658.75 for any breach of the provisions relating to comparative and misleading advertising.
Financial institution websites must ensure compliance with the Data Protection Act and the EU Directive on the Protection of Personal Data, and the Directive on Privacy and Electronic Communications. In Malta, the Data Protection Commissioner may impose fines of up to €23,300 for breach of any provisions within the Data Protection Act, and €50 for each day the violation persists, and/or to imprisonment of up to six months.
The RegTech Association has officially launched in Australia and is aiming to aid the regulation technology sector just like fintech is changing financial services.
According to a report from Finder, the Association will promote good corporate practice in compliance management and boost regulatory compliance outcomes.
Fintech investment in Australia increased in 2016 while the rest of the globe saw a decrease in funding. In a report from KPMG, last year saw total fintech investment amount to $US656 million across 25 deals compared to $US185 million across 23 deals in 2015.
The RegTech Association, which aims to shine a light on regulation technology, officially launched last night with an industry-first event in Sydney for key industry influencers including stakeholders from major banks, start-ups and industry regulators.
“What we’re really looking to do is facilitate collaboration between a group of Australian financial services stakeholders who we think can use these new technologies, and this growing crop of innovators who are building regtech businesses. And we hope that by bringing them together we can create a bit of an ecosystem in Australia around regtech,” Symons said.
A high-profile financial fraud trial — involving 1.5 billion yuan (US$220 million) of investor savings — started at Xuhui District People’s Court of Shanghai yesterday.
Fifteen former employees of the now-defunct online peer-to-peer lender Jinxing Investment were on trial. Ji Jianhua, the company’s chief financial officer, was accused of illegally raising funds, and 14 senior managers have been accused of illegally absorbing public savings.
Prosecutors said there were still 400 million yuan of repayments that weren’t made in the wake of the case being exposed.
More than 200 investors gathered in court in Xuhui for the hearing yesterday, many of them elderly investors. Trials of the 14 senior managers would be held at a later date, the court said.
Chinese marketplace lending platform Yirendai (NYSE: YRD) announced on Thursday it has entered into an agreement of intent with the Beijing branch of PICC Property and Casualty Company Limited (PICC P&C).
Yirendai reported that under this new agreement, PICC P&C would provide Yirendai with a performance bond for certain loans facilitated through the online marketplace. PICC P&C will also reimburse lenders within the agreed scope should any losses incur due to the Company’s failure to perform adequate due diligence during the credit underwriting process.
by Matt Burton, Co-Founder & CEO, Orchard Platform
Let me just begin by saying that I’m no expert on China or Southeast Asia, but I am committed to learning and keeping up. The market is incredibly complex and is advancing very fast. Based on my last two trips, I’m floored by how quickly the market is developing.
It’s also pretty clear that the development in the region, particularly in the financial services and technology sectors, is happening at a staggering pace and scale. As of September 2016, China had 8 of the 27 current fintech “unicorns” at an estimated US$96.4 billion total valuation with US$9.4 billion in capital raised—including the four largest valuations globally: Ant Financial (US$60 billion), Lufax (US$18.5 billion), JD Finance (US$7 billion), and Qufenqi (US$5.9 billion). To help put those numbers in perspective, the U.S. is home to 14 fintech “unicorns” at an estimated US$31 billion combined valuation with US$5.7 billion in capital raised.
The region is also seemingly light-years ahead in terms of innovation and adoption of these new technologies by a large base of underbanked and unbanked consumers—something I learned first-hand by being on the receiving end of scowls from the various vendors I interacted with when I tried to pay with cash. Mobile payment is everywhere, and is the preferred method of transacting at the point of sale.
China’s approach to fintech has been to focus on financial inclusion over financial protection, and this has led to rapid innovation and incredible growth.
Another takeaway? A significant area where the U.S. is ahead of China in this space is on the capital markets side. Most lending platforms in China are still funding loans using the peer-to-peer model. However, in my discussions with lenders, that does seem like something that is shifting. Some of the bigger platforms indicated that they are now seeing 20% to 30% of their originations purchased by institutional investors.
Marvelstone Capital, a Singapore-based data-driven asset management company, has announced the launch of a licensed ‘robo advisor’ platform for family offices in Asia in Q3 this year. The platform is being developed in partnership with Smartfolios, a Singapore-based fintech startup and will be available on desktop and mobile for Marvelstone’s clients.
Live markets commentary from FT.com
Continue reading: Markets Live: Friday, 31st March, 2017
Live markets commentary from FT.comContinue reading: Markets Live: Friday, 31st March, 2017
Peppa Pig boosts Entertainment One; Blackstone and Prudential pair up; Ofcom price controls for fibre networks. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here. Continue reading: FT Opening Quote: Peppa…
Peppa Pig boosts Entertainment One; Blackstone and Prudential pair up; Ofcom price controls for fibre networks. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here.Continue reading: FT Opening Quote: Peppa Pig boosts Entertainment One
Daimler shareholder demands right to be naked; on the second order effects of electric cars; the convenient scapegoat of gerrymandering; breaking up Gringotts Wizarding Bank; Tyrannosaurus rex was a sensitive lover; other stuff.
Continue reading: Furth…
Daimler shareholder demands right to be naked; on the second order effects of electric cars; the convenient scapegoat of gerrymandering; breaking up Gringotts Wizarding Bank; Tyrannosaurus rex was a sensitive lover; other stuff.Continue reading: Further reading
If all the free-thinkers in a country leave, guess who’s left?
Continue reading: How America made Scandinavian social democracy possible
If all the free-thinkers in a country leave, guess who's left?Continue reading: How America made Scandinavian social democracy possible
Coal isn’t dead, and it might even get support from the Trump Administration’s policies. Unfortunately, that won’t provide much-needed help to the regions hit hardest by coal-mining job losses and the opioid epidemic.
Coal isn't dead, and it might even get support from the Trump Administration's policies. Unfortunately, that won't provide much-needed help to the regions hit hardest by coal-mining job losses and the opioid epidemic.Continue reading: Coal isn’t dead, but it won’t revive Appalachia, either
A few footnotes on a mea culpa.
Continue reading: What went wrong with Ackman and Valeant- the alternative edition
A few footnotes on a mea culpa.Continue reading: What went wrong with Ackman and Valeant- the alternative edition
Personal loans come in a variety of shapes and sizes. Two popular alternative lending vehicles for people with low or no credit are payday loans and car title loans. But what’s the difference? Payday loans are a type of unsecured debt where the borrower receives money with a high interest rate that must be paid […]
Personal loans come in a variety of shapes and sizes. Two popular alternative lending vehicles for people with low or no credit are payday loans and car title loans. But what’s the difference?
Payday loans are a type of unsecured debt where the borrower receives money with a high interest rate that must be paid back on her next pay day, hence the name. In that regard, payday loans are short-term loans, usually with a payback period of a few days to a month, depending on your pay schedule.
Car title loans are a type of asset-backed debt where the borrower receives a loan using their vehicle’s title as collateral. If they don’t pay the loan back, the lender can repossess the vehicle. But there are different types of car title loans, one of which is an auto equity loan.
Auto equity loans are low-value, high-interest loans that are risky both for the lender and the borrower. The reasons they are so risky should be clear once you know how they work. In short, they are short-term loans where the borrower extracts equity out of the vehicle he or she owns.
Like home equity, auto equity is based on the difference between the fair market value of the vehicle and how much is still owed on it. Unlike your home, however, your automobile is more likely to depreciate in value, which means the older it is, the less equity you’re likely to extract from it. Another thing that makes the auto equity loan unique is that your payback is added to the original loan, so you end up paying more for the vehicle than you originally planned.
Lets say, for example, that you own a 2016 Toyota Camry. You bought the vehicle with a ticket price of $27,000 and put $10,000 down. If you bought the vehicle in April 2016 and have made all your $300 monthly payments, you still owe $13,400. But vehicles tend to depreciate up to 25% in the first year of ownership. Let’s be conservative and say your Camry depreciates only 16%. That means your $27K Camry’s true value is about $22,680. That leaves you with $9,280 equity. Since most auto equity lenders use a loan-to-value (LTV) ratio of 25% to 50%, the most you should expect to borrow against your vehicle is $4,640.
If you own an older vehicle outright, then your auto equity is based on the Kelley Blue Book value, or fair market value. A 2006 Toyota Camry in good condition might sell, depending on where you live, in the $2,500 to $3,000 range. Your max loan value would be about $1,200.
Like payday loans, auto equity loans are typically sought during crisis moments or emergencies. For people with bad credit who can’t get personal lines of credit from a bank or other types of loans, these emergency loans can be just what the doctor ordered. They’re attractive to borrowers for just that reason. Auto equity loans are attractive to lenders because the borrower uses their vehicle’s title to secure the loan. If the borrower doesn’t pay back the loan, their vehicle will be repossessed, or the lender can place a lien on the vehicle until the loan is paid back and continue to add interest rates and fees to cumulative effect until the loan is paid.
In most cases, auto equity loans are made without credit checks. Many lenders also do not report them to credit bureaus if borrowers don’t pay back the loans. However, the loans are not legal in all states, and in states where they are legal, the rules can be different.
Determining the number of auto equity lenders in the U.S. is difficult because most states lump all types of car title loans into one reporting category. A run-of-the-mill car title loan may simply be a personal loan secured by the automobile as collateral. The loan amount may not be based on the vehicle’s equity. On the other hand, auto equity loans are becoming more popular.
Car title loans are only legal in 21 states. If you live in one of these states, the amount you can borrower and the amount of interest your lender can charge you varies. In Alabama, for instance, car title loans are limited to 300% APR and one month terms. Wisconsin has no cap on APR but limits loan amounts up to $25,000 and 50% LTV; furthermore, loans are limited to no more than 180 day terms. The only limitation in Texas is a 180-day loan term.
In July 2013, The Center for Responsible Lending references a median loan size of $845 on a median car value of $3,150 with a median LTV of 26% and median APR of 300% from 561 borrowers. Their estimates of the lending volume are 2 million loans at $1.9 billion excluding refinances and $4.3 billion in loan fees paid by the borrowers. These numbers are likely higher today. In Texas, there was a jump in payday and auto title lending businesses from 1,303 to 2,532 from 2014 to 2015, according to the Texas Fair Lending Alliance. How much of these figures involves auto equity is anybody’s guess.
In states where they are legal, you may be able to get an auto equity loan by walking into a storefront. In that regard, it’s just like getting a payday loan. On the other hand, it’s much easier to apply for one online. There are hundreds, and growing, online lenders that are beginning to offer auto equity loans online. Some of them are national companies and others are regional or state-based companies that operate only in specific states where it is legal. One such company is Loan Cheetah, which operates in several states including Alabama, South Carolina, Pennsylvania, California, Florida, Illinois, Ohio, Texas, Tennessee, Missouri, Kansas, and Delaware.
Why not have corporate financiers be paid in the shares of the companies they’re bringing to market?
Continue reading: How to fix a broken IPO market
Why not have corporate financiers be paid in the shares of the companies they're bringing to market?Continue reading: How to fix a broken IPO market