Friday March 30 2018, Daily News Digest

Friday March 30 2018, Daily News Digest

News Comments Today’s main news: LendingClub grows short interest. Larry Summers resigns from LendingClub board. RealtyShares intros gap financing for projects under $20M. Mark Davies steps down from RateSetter board. Today’s main analysis: Heap’s behavior attribution platform. Today’s thought-provoking articles: Can Noto sell mortgages at his new SoFi post? China banks report drop in bad loans. Chinese families rack up […]

Friday March 30 2018, Daily News Digest

News Comments

United States

United Kingdom

China

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News Summary

United States

LendingClub Corp (LC) Sees Significant Growth in Short Interest (the Ledger Gazette), Rated: AAA

LendingClub Corp (NYSE:LC) was the recipient of a large increase in short interest during the month of February. As of February 28th, there was short interest totalling 31,244,316 shares, an increase of 11.0% from the February 15th total of 28,142,392 shares. Based on an average daily volume of 9,132,224 shares, the days-to-cover ratio is presently 3.4 days. Currently, 11.3% of the company’s stock are short sold.

Larry Summers Has Resigned From the LendingClub Board (Lend Academy), Rated: AAA

Yesterday, we learned that after nearly six years Mr. Summers will be leaving the board of LendingClub. He is being replaced by leading economist and Stanford professor Susan Athey. While she is not nearly as well known as Larry Summers she still brings serious economics clout to the board.

Heap launches behavioral attribution platform (Venture Beat), Rated: AAA

Source Heap

Heap is aiming to automate insights and is starting today with the launch of Heap Behavior Attribution. The new product is the industry’s first attribution product that measures behavior and does so in a way that requires no data science or engineering resources, the company said.

The Heap Behavioral Attribution measures standard marketing channels (i.e. Google and Facebook), and also ties in a set of broad user behavior, including email, customer relationship management (CRM), shopping cart, customer success, and either-or testing platforms. Examples include user behaviors stored in Salesforce, Marketo, Shopify, Autopilot, Optimizely, Oracle, and more.

Source Heap

It has more than 100 employees and 6,000 customers, including Twilio, Lending Club, App Annie, Morningstar, Monotype, and Casper.

 

RealtyShares Introduces Gap Financing Program For Projects Under $ 20 Million (Business Wire), Rated: AAA

RealtyShares today announced a gap financing program that delivers subordinated financing solutions to commercial real estate owners seeking higher leverage on the financing of projects under $20 million. The suite of solutions, which includes preferred equity, mezzanine debt, and second lien loans, helps commercial real estate operators get the capital they need to buy, refinance, or renovate commercial properties.

He Can Fix Your Student Debt, but Can He Sell You a Mortgage? (Bloomberg), Rated: AAA

As chief operating officer of Twitter Inc., Anthony Noto did a lot to calm the company’s perpetually anxious shareholders. On Feb. 26, however, Noto took over as chief executive officer of a financial technology startup, Social Finance Inc., or SoFi.

He’ll be facing increasingly tough competition. SoFi sees Marcus, the consumer-lending business started by Goldman Sachs Group Inc. in 2016, as the biggest threat, according to people familiar with SoFi’s thinking.

One question Noto will have to navigate is how much SoFi should use its own balance sheet—that is, hold on to the loans it originates as opposed to selling them to other investors. It currently keeps a slice of loans but sells off most of them. Holding loans allows a company to earn a stream of interest income, but investors generally put a lower value on financial firms than tech platforms.

SoFi says it plans to hold 500 events in 2018, up from 41 in 2015.

The wealth management unit, fully launched in May 2017, had $42.3 million in assets under management as of Jan. 18, according to Prosser.

 

Instant Financing Offers Drive Sales, Decrease Cart Abandonment (Retail Touchpoints), Rated: AAA

E-Commerce retailers in the U.S. recognize the value of instant financing offers, and 64% believe providing financing options through their online store is important to driving new and increased sales, according to a survey from Klarna. Another 46% believe such services decrease cart abandonment, which is a pressing concern for retailers.

Instant financing is a revolving line of credit that shoppers can apply for during online checkout, letting them spread payments out over time with low annual percentage rate (APR) offers. The option is particularly appealing to Millennials, as fewer than 33% of them carry credit cards, according to a 2016 Bankrate survey.

Retailers’ enthusiasm for online financing is shared by shoppers, and a 2017 Researchscape International survey conducted on behalf of Klarna found that consumers:

  • Prefer online merchants that offer instant financing (75%);
  • Want to be presented with an instant financing option when shopping online (47%);
  • Would spend more if given instant credit options when making a purchase (39%); and
  • Are very or completely likely to change retailers to use instant financing (28%).

FINANCE THEORY, LISTED EQUITIES, AND LIQUIDITY (AllAboutAlpha), Rated: A

A recent paper from Robeco discusses whether a liquidity premium exists in the stock market. The authors, David Blitz, Jean-Paul van Brakel, and Milan Vidojevic, conclude that “the evidence for such a premium is, at best, weak.”

Less politely, these authors refer to the whole notion of a liquidity premium as having been “challenged and debunked in various studies.”

Theory and Practice

In a sense there “should” be a liquidity premium. The more illiquid a stock, the more difficult it is to trade it, which on some models means that illiquid stocks are less attractive than liquid stocks, and should command a premium. One should have to be bribed to hold an illiquid stock just as one has to be bribed to hold a risky one.

BLACK ENTREPRENEURS, SMALL BUSINESS OWNERS NOT TAKING ADVANTAGE OF SBA OFFERINGS (Black Enterprise), Rated: A

Here is a surprising statistic: Over 80% of small business owners have never visited their local U.S. Small Business Administration office.

The finding was revealed as part of a random survey of 409 owners and senior leadership at small businesses by national online lender Fundera and online research firm Qualtrics.

Fundera also offers a list of other resources black entrepreneurs can tap into to help them get help with everything from how to run a small business to becoming a certified minority business.

Marketplace Lending Update #2: Another Rocky Mountain Remand (The National Law Review), Rated: A

In our prior Clients & Friends Memo “Who’s My Lender?” published on March 14, 2018, we analyzed two actions brought against marketplace lenders, one against Kabbage Inc. (“Kabbage”) in federal court in Massachusetts1 and the other against Avant in federal court in Colorado.2 In that memo, we noted that the Massachusetts action against Kabbage is proceeding to arbitration, while the action against Avant was remanded to state court.

Last week, Colorado courts issued several new rulings related to marketplace lending. First, the federal court in Colorado remanded another enforcement action brought by the Administrator of the Colorado Consumer Credit Code against Marlette Funding (“Marlette”),3 which had been doing business as a marketplace lender in Colorado under the name Best Egg. Following the reasoning in the Avant decision discussed in our prior memo, the court rejected the marketplace lender’s argument that Colorado’s usury laws were subject to complete preemption under federal law and therefore the court granted plaintiff’s motion to remand. As a result, Avant and Marlette will be forced to make their arguments that a bank is the “true lender” and that the Colorado Administrator’s usury claims are therefore preempted by federal law, and any other defenses, in Colorado state court.

KBRA Comments on Cross River Bank’s Settlement with the FDIC (Business Wire), Rated: A

The FDIC announced yesterday that it had reached settlements with Cross River Bank (“Cross River”) and Freedom Financial Asset Management (FFAM). Kroll Bond Rating Agency (KBRA) believes that the settlement and related consent order have a low likelihood of adverse impact upon the credit profile of Cross River and that of its parent, CRB Group, Inc. (CRB). While FFAM represents a very small portion of Cross River’s customer base, KBRA believes any adverse regulatory action draws heightened scrutiny to Cross River and the MPL industry, a factor already considered in the current ratings. Furthermore, KBRA believes that the matters cited by the FDIC were isolated instances and is not representative of pervasive issues with Cross River’s Compliance Management System (CMS). Nonetheless, we believe that has Cross River has since adopted enhanced compliance and reporting requirements consistent with FDIC guidance and incorporated enhancements to their CMS.

Enacomm and VOX Network Solutions to Provide Financial Institutions with Data-Driven Phone and Digital Assistant Banking (Global Newswire), Rated: B

VOX Network Solutions (VOX) has announced a partnership with Enacomm, Inc. (Enacomm) to bring Enacomm’s self-service solutions to VOX clients.  Through the reseller agreement, financial institutions will be equipped with VPA (Virtual Personal Assistant) banking and the Enacomm Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

Crypto Asset Expert David Drake Joins Advisory Board of Digits (Nothing in Particular Blog), Rated: B

Digits, a leading crypto company using technology aimed to combine the convenience of credit and debit card payments with the utility of cryptocurrency payments and to easily allow the consumer the ability to effortlessly pay for goods and services with crypto via their existing credit or debit card, announced today the addition of a highly respected crypto expert, David Drake, to its advisory board team.

United Kingdom

Betfair founder Mark Davies steps down from RateSetter board (Peer2Peer Finance), Rated: AAA

MARK Davies has stepped down from the board of RateSetter after more than six years.

Davies, who was part of the founding management team at e-gaming company Betfair, joined the board of the peer-to-peer lender as a non-executive director in November 2011 – just 13 months after the company’s launch.

Data gatherers should be regulated like financial advisers (Financial Times), Rated: A

There was a time in the UK when most people were under the impression that financial advice was free. They went to see an adviser. He gave them advice. They handed over their money to him to be looked after. They never got a bill.

Only when the government changed the laws in 2012 did they realise they were paying. A lot. They just hadn’t noticed for the simple reason that they did not physically pay it to the adviser.

Deal maker Numis on the front foot after M&A numbers surge (Evening Standard), Rated: A

The City broker, which worked on the Trinity Mirror takeover of the Daily Express, and the sale of cocktail bar Revolution, said sales would be “significantly ahead” of £53 million recorded last year.

Since September, the company has worked on big deals like  the Mirror-Express takeover, the £600 million float  of car insurer Sabre and  the Aveva tie-up with Schneider’s electrical business.

Numis is also lined up to work on AJ Bell’s £500 million float and Funding Circle’s £1.5 billion float later in the year.

Shares rose 1.5%, gaining 5.5p to 365p.

One year to Brexit: How to protect you finances (Money Observer), Rated: A

Brexit is officially one year away and the impact it is having, and will continue to have, on our financial lives is filling the pages of our newspapers and TV screens daily.

Foreign currency

Since the Brexit vote in June 2016, sterling has fallen significantly in value against the euro. The pound reached a high of €1.42 in October 2015, but at the time of writing on 20 March 2018, it was worth 21 per cent less at €1.14, according to currency specialist Moneycorp.

Typical transaction costs for using your card abroad are between 2.75 and 2.99 per cent, and you will be charged a non-sterling purchase fee of up to 1.25 per cent on top.

Each time you use an ATM abroad, you can also be charged anything from £1.50 to £2 a time, so it is wise to withdraw larger sums in one go or to get a specialist overseas card that allows fee-free spending and cash withdrawals, according to Nick England, chief executive of travel money firm EasyFX.

Where are the current UK BTL hot spots? (Property Reporter), Rated: B

The latest UK buy-to-let index from property finance experts, LendInvest, has shown that the Midlands appears unaffected by the UK’s current house price growth slowdown, sending three of its largest cities into the top 5 places to invest – but where came out top?

  1. 1.  Colchester
  2. 2.  Northampton
  3. 3.  Leicester
  4. 4.  Luton
  5. 5.  Birmingham
  6. 6.  Manchester
  7. 7.  Ipswich
  8. 8.  Brighton
  9. 9.  Rochester
  10. 10.  Norwich

Together appoints new regional development director (Bridging & Commercial), Rated: B

Together has expanded its professional sector team with the appointment of Mel Fourie as its new regional development director.

Mel joins the specialist lender from RateSetter, where she was its strategic partnership manager covering the North of England.

China

Big four China banks report first drop in bad loans in 6 years (Asian Review), Rated: AAA

Industrial and Commercial Bank of ChinaChina Construction BankAgricultural Bank of China and Bank of China had a total of 765.7 billion yuan ($122 billion) in non-performing loans on their books at the end of 2017, marking a 0.2% drop on the year.

Non-performing loans ratios — a gauge of asset quality — averaged 1.57% at the four state-owned lenders, 0.15 percentage point less than at the end of 2016. “Special mention” loans with an elevated potential for default decreased 0.9% to 1.59 trillion yuan. All four banks had reported 2017 results as of Thursday.

Famous for hoarding cash, Chinese families are now racking up debt on an unprecedented scale (South China Morning Post), Rated: AAA

Chinese families with their long tradition of saving money are now accumulating debt at a rate never been seen before, according to data compiled by a state-backed think tank in Beijing.

The country’s household leverage ratio – or the ratio between debt incurred by families and gross domestic product – surged to 49 per cent at the end of last year from 17.9 per cent at the end of 2008, going up about 3.5 percentage points annually, the think tank said in a report released on Thursday.

So in the period from 1993, when the data became available, to 2008, the household debt ratio went from 8.3 per cent to 17.9 per cent, with an annual rise of 0.65 percentage points.

According to its report, average disposable income could cover standard loan interest and mortgage repayments, while households were still sitting on 70 trillion yuan (US$11.13 trillion) worth of bank deposits and cash overall – enough to offset the 40 trillion yuan in outstanding bank debt.

Dianrong and Sino Guarantee Announce Lenders Protection Plan (PR Newswire), Rated: A

Dianrong and China United SME Guarantee Corporation, known as Sino Guarantee, one of China’s leading guarantee companies, today announced a new lenders protection plan for Dianrong customers. The plan, which went into effect at the beginning of 2018, is designed to provide third-party protection in the event of a loan default.

Dianrong’s borrowers now have the option to purchase the Sino Guarantee lenders protection plan, which further improves the borrower’s risk and credit profile. Sino Guarantee will then use a dedicated fund account to pay lenders the loan principal and any outstanding interest in the event of a loan default covered by the plan.

European Union

Spotcap Roundtable: Customers Expect More as Fintech Boosts User Expectations (Crowdfund Insider), Rated: A

Spotcap, an SME focused online lender based in Berlin, recently held a roundtable on the future of finance. Individuals from prominent firms joined with the Fintech lender to assess progress made so far. Representatives from Deutsche Bank, Figo, GP Bullhound, McKinsey along with Spotcap debated how the financial ecosystem model will evolve, the implications for the customer, and the challenges and opportunities for Fintechs and more traditional financial service firms.

International

Alt.Estate To Become an Industry Standard for Blockchain-Based Real Estate Transactions (the Merkle), Rated: A

Using the blockchain technology to disrupt the real estate market, Alt.Estate has a strong potential to become an industry standard for the blockchain-based real estate transactions. A strong technology stack, a go-to-market strategy with 10X leverage, a working prototype with three tokenized apartments in key geographies, strong community support, and a solid pipeline of enterprise deals all position Alt.Estate as a win-win solution for real estate developers and investors.

Estimated at $217 trillion, the real estate market is worth nearly 2.7 times the global GDP.

“ERC-20” FOR REAL ESTATE

Developed two years ago, ERC-20 has quickly become a significant industry standard for all the tokens on Ethereum. Inspired by the approach of ERC-20 developers, Alt.Estate’s Protocol aims to become an industry standard for the tokenized real estate.

 

Asia

This Startup Combines FinTech And Traditional Lending Circles To Empower Women (Forbes), Rated: AAA

When Fonta Gilliam joined the foreign service out of school, she didn’t expect it would lead her to entrepreneurship. But after seeing community lending in practice throughout her work in East Asia and Africa, Gilliam wondered what would happen if she combined these traditional practices with new financial technology.

It all started when Gilliam was working in the visa department at the embassy in South Korea.

The practice of a lending circle is a kind of informal savings program. Say you have 10 members who each put $100 into the lending club each month. One member collects the full 1,000 each month and each month the total amount rotates until 10 months has passed and the circle starts back at the beginning.

Proptech – the emerging disruption in real estate (The Business Times), Rated: A

In proptech, three forms of technologies are particularly pertinent and pervasive: blockchain, augmented reality (AR) and artificial intelligence (AI). In Singapore, these technologies are already making their impact felt in the real estate industry with their adoption by startups, global corporations and the government.

Blockchain: facilitating real estate transactions

A form of distributed ledger, the blockchain is distributed across nodes, locations and even countries. Being decentralised, it eliminates the need for an intermediary to process, validate or authenticate transactions.

Artificial intelligence: extracting insights from data

The most valuable tech companies (Facebook, Amazon, Netflix, Google) are where they are today because of the trove of consumer data they possess and continue to accumulate. In the realm of technology, data is wealth, and AI is the key to unlocking this wealth. AI, as the name suggests, is teaching the computer to think like a human, making sense of the data fed to it.

Proptech: transforming real estate in Singapore

Cognisant of the need to keep up with change, the Singapore government has introduced an Industry Transformation Map (ITM) for the real estate industry. The ITM is focused on using automation, digitised contract templates, and predictive systems to streamline processes for property transactions and facilities management.

MENA

How GISC LoanCoin Network (GIS) is democratizing Credit with its Blockchain P2P, B2B & Altcoin Lending Platform (MenaFn), Rated: AAA

GISC uses a strict proprietary model composed of a fundamental and technical analysis strategy. So when their analysts suggested that cryptocurrency are poised to outperform in developing nations for some years to come, the company dedicated to coming up with a solution that would basically democratize lending of blockchain digital assets on a global scale.

GISC LoanCoin Network platform is designed with an aim of bridging traditional lending services to the blockchain and opening access to the non-banked. GISC LoanCoin Network is a Ethereum blockchain utility token based lending platform that will support P2P and B2B lending by eliminating intermediaries like banks and other financial institutes. It’s a platform where borrowers can interact and deal directly with the lender and GIS token holders can earn income by becoming Lenders or Guarantors.

GISC differs from other lending platforms like ETHLend and SALT in a way that GLN lends against Altcoins and this feature is yet to be introduced by any other lending platform. The platform usually takes a low, around 2% transaction fee for credit assessment/KYC-AML/ ID verification and connection through the network.

Authors:

George Popescu
Allen Taylor

The endless SMR

AT&T wants to exchange its April 22 deal deadline for a never-ending grace period.

AT&T wants to exchange its April 22 deal deadline for a never-ending grace period.

Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

Companies across all sectors increasingly use big data as part of business decision-making. “Big data” has many definitions, but generally refers to “a collection of data from traditional and digital sources inside and outside [a] company that represents a source for ongoing discovery and analysis.”1 The credit and mortgage lending businesses are no exception to […]

Legal Considerations When Using Big Data And Artificial Intelligence To Make Credit Decisions

Companies across all sectors increasingly use big data as part of business decision-making. “Big data” has many definitions, but generally refers to “a collection of data from traditional and digital sources inside and outside [a] company that represents a source for ongoing discovery and analysis.”1 The credit and mortgage lending businesses are no exception to this growing trend. Companies use big data, algorithms, and artificial intelligence to make decisions about the extension of credit. While this emerging practice has the potential to accurately identify more people who are good credit risks and expand access to credit to traditionally under-served communities, companies should be aware of the legal risks that may arise under familiar laws such as the Fair Housing Act (FHA), Equal Credit Opportunity Act (ECOA), and the Fair Credit Reporting Act (FCRA).

Like companies in other sectors, banks and fintech companies have access to an increasing amount of data about their consumers. For example, a company might know what websites its consumers visit, the people they are connected to on social media, the clothes they buy online, the college they went to, the bills they pay, the places they used to live, and more.2 A company might collect this information itself, or it may purchase it from a “data broker” that compiles information about consumers from across the internet.3 Lending companies can use this data to make decisions about who should get credit by developing and applying algorithms that analyze the various data points and drawing conclusions from them about a consumer’s credit risk.4

For example, one company that has embraced the use of big data in evaluating consumers’ credit risk is Upstart. Upstart provides personal loans to consumers based on an assessment of their credit-worthiness that is based in part on “non-traditional sources of information such as education and employment history.”5 The company uses artificial intelligence and machine learning to make its determinations. Another company in this space is underwrite.ai. Underwrite.ai creates algorithms that use machine learning (i.e., artificial intelligence) that lenders can customize to help them make credit decisions.6 Its algorithms “analyze[] thousands of data points from credit bureau sources” in order to “accurately model credit risk for any consumer.”7

These companies and others are using technology to change the way that lending decisions are made, and more companies will likely enter this space in the near future. Yet even as technology and decision-making methods change, companies that choose to use big data, algorithms, and artificial intelligence to make lending decisions should not forget that traditional fair lending risks remain. Specifically, lenders should be attentive to avoiding discriminatory impact in lending decisions and consider how to comply with the obligation to disclose why a consumer was denied credit.

First, lenders must ensure that their lending decisions do not have a discriminatory impact in terms of race, gender, or other protected classes. The FHA prohibits discrimination in securing financing for housing on the basis of race, sex, and familial status, among other protected characteristics.8 ECOA plays a similar role context of credit transactions.9 The discrimination need not be intentional; a violation of these statutes occurs if there is a disparate impact on members of a protected class.10

The use of big data raises particular concerns related to disparate impact. For example, the inputs—that is, the data itself—can lead to inadvertent disparate impact on protected classes. If, say, a lending decision is made in part by screening people in certain zip codes, the racial distribution of loans may be uneven since de facto residential segregation persists in the United States. The same could be true for decisions made based on connections on social media sites such as Facebook. While the data is not explicitly based on race, it may still have a racially disparate impact. Relatedly, the algorithms a lender uses may contribute to a disparate impact. The algorithm might rely on correlations between certain data points that end up affecting people of certain groups differently. And machine learning could exacerbate the problem. If a machine learns through patterns that credit risk is correlated to zip code, it could adjust the algorithm and sort consumers by race, even though the algorithm itself is racially neutral.

To avoid making unintentional disparate lending decisions, companies should be vigilant about testing the impact of their algorithms and adjusting them as necessary. Moreover, companies should give close and careful thought to the business justifications for using a particular data set or algorithm.

Second, lenders that use big data, algorithms, and artificial intelligence to make lending decisions should be attentive to the requirements of the Fair Credit Reporting Act. Specifically, the FCRA requires lenders to disclose to consumers if they deny credit based on a consumer report and to disclose to consumers if they charge more for credit based on a consumer report.11 This allows consumers to check for inaccuracies in the consumer report, the document that determines their access to credit.12 This is a fairly simple requirement to satisfy when a credit decision is based on a FICO score. But when a credit decision is based on a complicated algorithm drawing from a wide data set that incorporates a multitude of data points compiled by a third party, it is much more difficult to explain the credit decision to the consumer. Lenders ought to think carefully about choosing data sets and designing algorithms that can lead to clear explanations of lending decisions.

Though this is still an emerging area, federal regulators have already demonstrated an interest in the fair lending implications of the use of big data. For example, in September 2017, the Consumer Financial Protection Bureau (CFPB) issued a No Action Letter to Upstart. In the letter, the CFPB indicated that it did not intend to take an enforcement or supervisory action against Upstart.13 But it clarified in an accompanying press release that it was paying attention to the emerging field of big-data-based lending. It noted that the CFPB had “launched an inquiry into the use of alternative data sources in order to evaluate creditworthiness and potentially expand access to credit for consumers with limited credit history.”14 Other government agencies have also begun thinking about the fair lending ramifications of big data, algorithms, and machine learning. For example, the Federal Trade Commission put out a report in January 2016 raising a number of issues that may become relevant in this space.15

It is difficult to predict how the current administration will address these emerging issues.16 Yet companies continue to recognize the real risks that fair lending laws can pose to their business models. For example, underwrite.ai has specifically noted its intent to incorporate federal fair lending and credit laws into its algorithmic model: “Our system was designed to be fully compliant with all FCRA regulations from the ground up. Additionally, we specifically exclude from analysis any data that might proxy for a protected class. In our model, we don’t know or care about the gender, age, race, religion, zip code, sexual preference, or ethnicity of applicants. We strongly believe that these attributes are fundamentally NOT predictive of credit worthiness.”17 Other companies would be prudent to follow a similar path.

This is particularly true because, even if federal enforcement of fair lending laws wanes, private plaintiffs may still take action. The FHA and ECOA both provide for private rights of action.18 Available remedies include punitive damages and equitable and declaratory relief, as well as attorneys’ fees. State attorneys general, too, may seek to enforce state statutes that protect fair lending. Many states have fair lending laws, and, in fact, many of those statutes are more expansive in terms of protected classes than the federal laws are.19 No matter the role the federal government takes in the near future, private plaintiffs and state attorneys general still have the power and opportunity to seek relief.


1 Lisa Arthur, What Is Big Data?, Forbes.com (Aug. 15, 2013).
2 See, e.g., Federal Trade Commission, Big Data: A Tool for Inclusion or Exclusion?: Understanding the Issues (January 2016), at 3-5, (“FTC Report”); Charles Lane, Will Using Artificial Intelligence To Make Loans Trade One Kind Of Bias For Another?, WBEZ (March 31, 2017); Executive Office of the President, Big Data: A Report on Algorithmic Systems, Opportunity, and Civil Rights (May 2016), at 11-12.
3 FTC Report at 4.
4 Id. at 4-5; Lane, Will Using Artificial Intelligence To Make Loans Trade One Kind Of Bias For Another?.
5 Press Release, Consumer Financial Protection Bureau, CFPB Announces First No-Action Letter to Upstart Network (Sept. 14, 2017), (“Upstart Press Release”).
6 /> 7 /> 8 42 U.S.C. § 3605.
9 15 U.S.C. § 1691.
10 Tex. Dep’t of Hous. & Cmty. Affairs v. The Inclusive Cmtys. Project, Inc., 135 S. Ct. 2507 (2015).
11 FCRA, 15 USC § 1681m(a), (h).
12 FTC Report at 14.
13 Letter from Christopher M. D’Angelo, Associate Director for Supervision, Enforcement & Fair Lending, Consumer Financial Protection Bureau, to Thomas P. Brown, Paul Hastings, LLP (September 14, 2017).
14 Upstart Press Release.
15 See generally FTC Report.
16 Michael Mulvaney, the acting Director of the CFPB, recently decided to move the Fair Lending Office out of the Supervision, Enforcement, and Fair Lending Division and into the Office of the Director. Many consumer groups viewed this move as a signal that the CFPB will decrease fair lending enforcement. Kate Berry, CFPB’s Mulvaney Strips His Fair-Lending Office of Enforcement Powers, American Banker (Feb. 1, 2018).
17 /> 18 42 U.S.C. § 3613; 15 U.S. Code § 1691e.

Authors:

Kali Bracey is a litigation partner in the firm’s Washington, DC office and a member of the firm’s Government Controversies and Public Policy Litigation Practice.  She brings 20 years of experience handling complex commercial litigation, investigations and regulatory matters.

 

 

 

Marguerite L. Moeller is an associate in the firm’s Litigation Department.

Thursday March 29 2018, Daily News Digest

Thursday March 29 2018, Daily News Digest

News Comments Today’s main news: SoFi changes wealth portfolios. Silver Lake buys $500M of Credit Karma stock. Half of Zopa deposits are into IFISA accounts. Landbay considers IPO, opens Seedrs campaign. Wonga South Africa enters personal lending. Today’s main analysis: 7 reasons to hate the long bond (A GREAT READ). Today’s thought-provoking articles: The benefits of additional data from […]

Thursday March 29 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Asia

Africa

News Summary

United States

SoFi Announces Changes to Wealth Portfolios (Crowdfund Insider), Rated: AAA

On Tuesday, online lending platform SoFi announced it was making changes to wealth portfolios. SoFi made changes in all five risk strategies – Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive.

Conservative:

“Our lowest risk portfolio invests heavily in bonds, which may be appropriate for someone investing with a lower tolerance for risk or a shorter time horizon, like under three years. With bonds, there are three options: Short-term bonds are considered lower-risk/lower-reward, intermediate-term bonds are considered moderate-risk/moderate-reward, and long-term bonds are considered higher-risk/higher-reward.

Source Crowdfund Insider

Moderately Conservative

“The Moderately Conservative strategy is also weighted toward short-term bonds, so it’s a fairly cautious approach. Historically, we’ve selected both investment-grade bonds (lower risk, lower interest rate) and high-yield bonds (higher risk, higher interest rate). Now, we’re reducing some of that high-yield exposure and increasing the amount of investment-grade bonds to lower the overall risk of this portfolio. This strategy also invests a bit in the stock market. Our approach here (and in other strategies) is to balance our investments across the globe. We’re putting a little less in Emerging Markets, less in U.S. Markets, and more in Developed Markets outside the U.S. (like Japan, parts of Europe, and Canada). We believe that these new allocations will give this portfolio a relatively better chance to grow.”

Source Crowdfund Insider

Silver Lake Buys $ 500 Million Stake in Credit Karma (Fintech Collective), Rated: AAA

San Francisco based Credit Karma has received $500m in a secondary offering from Silver Lake, valuing the company at $4b.

Credit Karma isn’t receiving any proceeds or issuing any new shares as part of the transaction, Chief Executive Kenneth Lin said in an interview. Rather, Silver Lake is amassing common shares from earlier investors and employees in a so-called secondary sale that values the 11-year-old company at roughly $4 billion, according to a person familiar with the matter.

How You May Benefit from Additional Data When Reviewing Subprime Applicants (Lendit), Rated: AAA

Nearly 80 million adults have what is considered subprime credit, according to Experian data.

The takeaway: while Darrell has a higher biweekly income than Nancy, he is much less stable in his borrowing history. And, while Nancy has been late on a few payments, she has a proven track record of ultimately satisfying her debts.

These examples illustrate why lenders hoping to help consumers in the growing nonprime and subprime markets stand to benefit from alternative credit data.

Sophisticated Investors May Be Harming Fintech Lending Platforms (Harvard Business School), Rated: AAA

But lending platforms, also called peer-to-peer lending, must address a major design problem: Sophisticated investors have been gaming the system by applying specialized screening tools to scoop up the choicest loans with the lowest default rates, leaving less experienced investors with less attractive loans to choose from. After these lower-grade loans perform poorly—that is, the borrowers fall into arrears with payments or default altogether—these less savvy investors may flee the platform.

Can lending platforms make their systems more equitable for all investors?

In their new working paper Marketplace Lending: A New Banking Paradigm? Vallée and Yao Zeng, an assistant professor of finance at the University of Washington, address these issues from the perspective of what platforms can do to level the investing playing field.

The key variable to control, Vallée and Zeng found, is the amount of information available about loan applicants. When platforms share a lot of information about applicants with potential investors—data such as income, debt level, and credit history, and even whether the loan is financing a wedding, for instance—experienced investors can precisely pin down the safest loans to back.

The researchers looked at all transactions executed by LendingRobot users for a three-year period between January 2014 and February 2017, including more than $120 million invested on the two major lending platforms, LendingClub and Prosper. They found that using the LendingRobot screening model paid off by reducing the average loan default rate by more than 20 percent compared to the average level on the platforms.

Bond Investors Should Double Down On Due Diligence As Yields Rise (Seeking Alpha), Rated: AAA

Appealing to this new financial demographic is the idea behind such companies as Upstart and Social Finance Inc. (commonly known as SoFi). Since 2013, SoFi has securitized about $9.5 billion in loans, while Upstart last year packaged $338 million of personal loans into two deals.

SoFi targets top college graduates – Harvard lawyers, Yale doctors, Wharton bankers – people whose outstanding student-loan balances match their outstanding career potential. For SoFi, this cohort is a good bet to provide lower-cost loans that allow the buyers to de-lever faster and hopefully return for car loans, mortgages and wealth management services such as college and retirement savings plans. Upstart took the idea a stage further by widening the customer base beyond the Ivy League.

Kabbage Data Shows Mobile is the Future for Small Business Lending (Lend Academy), Rated: A

Mobile devices have changed consumer expectations. People now expect that you can have access to anything you might need right from your mobile device. While this has historically been the case for consumer financial apps, Kabbage released data today on small businesses which shows they too are leveraging mobile to better manage their business.

They analyzed behavior of almost 150,000 small business and found that between April 2014 and February 2018 loans accessed through mobile increased by more than 360 percent. Dollars accessed through mobile increased over 1,220 percent.

Petal, WebBank to launch card for ‘credit invisibles’ (American Banker), Rated: A

The fintech startup Petal announced a partnership Wednesday with WebBank to officially launch a credit card for the estimated 65 million people who have insufficient credit history to qualify for a traditional credit card.

The CFPB has identified 45 million people who have no credit score,” Gross said. “Experian and others have indicated that there are 50 million more people that are thin file people and have a have a credit score that’s not accurate because of limited data at the credit bureau. Andreessen Horwitz has estimated 90 million people are misscored — that’s a third of the U.S. population.

Property Coin ICO: A Securities Token for a Real Estate Portfolio (Crowdfund Insider), Rated: A

Aperture is a new platform that is focusing on the real estate marketplace putting a new spin on property crowdfunding. While not the first blockchain based real estate startup, Property Coin (PCX) is in the midst of a security token offering that is claiming first when it comes to crypto denominated securitization / structured real estate portfolio using distributed ledger technology.

Operating in the fix and flip space, Aperture says they have delivered over “50% un-levered IRRs so far – a claim that is pretty impressive.

In aggregate, their team claims they have been involved in the closing of over $150 billion of real estate financing transactions and have originated over $10 billion in mortgage loans, having worked for some of the largest investment banks in the world.

A mortgage in 30 minutes? Fintech says it’s coming (American Banker), Rated: A

Lenda claims to make the fastest mortgages out there — currently two weeks start to finish, with an eventual goal of 30 minutes in a nearly all-digital process.

Launched in 2014, Lenda has made $200 million worth of mortgages, is licensed in 12 states and plans to expand to 12 more later this year. Jason van den Brand, its co-founder and CEO, said that despite other big players, the mortgage arena is ripe for further disruption.

How Lenda works

Lenda lets the consumer log in to their bank account from its portal to retrieve the necessary three months of bank statements. (They could also download the statements from their Dropbox, Box or Google Drive account and then upload them to Lenda.)

Income verification and employment verification are automated where possible. To be sure, some employers don’t share employment data with databases used by lenders. In such cases employment verification needs to be manual.

Consumers ready for a digital mortgage

Consumers, meanwhile, seem to be increasingly ready for digital mortgages. According to a Harris poll commissioned by Fiserv, 69% of consumers already research loan options online and 68% said they review loan documents online. Among millennials, 48% said they would be comfortable researching loan options on their smartphone.

New small businesses have a tough time in these 10 cities, report says (Fast Company), Rated: A

Specifically, it looked at businesses that earn an annual revenue of less than $7,500,000, have been in business for at least six months and no longer than 60 months, and submitted a loan query to LendingTree between Jan. 1, 2016, and Jan. 23, 2018. The self-reported data was then limited to the 50 most populous metropolitan areas, and with that, a list was born.

Here are the 10 worst cities, per LendingTree:

  1. Cincinnati
  2. Rochester, N.Y.
  3. Philadelphia
  4. Louisville, Ky.
  5. Birmingham, Ala.
  6. Detroit
  7. Harrisburg, Pa.
  8. New Orleans
  9. Virginia Beach, Va.
  10. Chicago

Here are the 10 best cities, per LendingTree:

  1. Sacramento, Calif.
  2. Grand Rapids, Mich.
  3. Portland, Ore.
  4. Knoxville, Tenn.
  5. Denver
  6. Seattle
  7. Tulsa, Okla.
  8. Albuquerque, N.M.
  9. Fresno, Calif.
  10. Los Angeles

With No Movement On Lending Reforms, Catholic Group Starts Microloan Program (WOSU), Rated: A

Faced with watching some parishioners struggle to pay back high-interest loans, the Society of St. Vincent de Paul Diocese of Columbus launched its own microloan program in Licking County in late 2016. Since then, it’s expanded to four other counties.

The non-profit organization has partnered with a local credit union to offer loans of up to $500. Borrowers then make monthly payments for 12 to 15 months to pay off loans that carry an interest rate of 3 percent.

That’s a fraction of the rate for loans from payday lending businesses, where interest can exceed 600 percent.

The Catholic microloan program is open to people of all faiths, and Zabloudil says about 75 percent of loan recipients have made good on their payments. Part of the reason for that, Zabloudil says, is they work to ensure borrowers don’t get in over their head.

The program currently offers loan to people from Franklin, Delaware, Fairfield, Knox, Licking and Ross Counties. Zabloudil hopes to eventually take the program to the 17 other counties served by the Roman Catholic Diocese of Columbus.

 

 

LENNAR TO INTRODUCE ONLINE, MOBILE MORTGAGE APPS (Builder), Rated: B

Lennar Corp. plans to start using mortgage-application technology from San Francisco, Calif.-based startup Blend in an effort to attract younger buyers. By applying for a mortgage online or on a phone, consumers can shave 10 days off the process, executives say. The Wall Street Journal’s Laura Kusisto reports:

Making it easier for those buyers to get mortgages could help Lennar with attracting millennials, a critical group of home buyers that have been put off from buying new homes by the high prices and long commute times to many communities. An additional obstacle on the margins for younger home buyers is the complicated process of applying for a mortgage.

GoKapital Launches Its Nationwide Business Loans Affiliate Program (PR News), Rated: B

GoKapital, an online lender from Miami Florida, has launched an affiliate program that will allow bloggers, webmasters, and digital marketers to earn commissions when they refer new customers to one of their business loan programs.

GoKapital’s Affiliate program highlights:

  • Business loans ranging from $10,000 to $1,000,000 for every industry. Servicing businesses in all 50 states, Canada, and Puerto Rico
  • 24-hour funding with 95% approval rate
  • Dedicated support and integration manager

Marshall Lux Joins Marlette Funding as an Advisor (Business Wire), Rated: B

Marlette Funding, LLC, owner of the Best Egg personal loan platform, today announced the addition of Marshall Lux as an Advisor to the Board and Company.

Marshall Lux has been a Financial Services consultant and practitioner for 30 years. He began his career at McKinsey where he served all manner of financial service firms across a variety of subsectors and functional areas. Marshall led McKinsey’s and BCG’s private equity practice. He has extensive relationships across PE Firms.

Seven banks in seven months select Jack Henry’s Core Director platform (Fintech Futures), Rated: B

Jack Henry & Associates’ banking division is in seventh heaven with the revelation that seven US community banks within the last seven months have selected to implement its Core Director processing platform.

The platform can be installed in-house or implemented through JHA OutLink Processing Services, Jack Henry Banking’s outsourced offering.

The firm names two of the banks – California International Bank and the State Bank of Bottineau, located in North Dakota. FinTech Futures has contacted Jack Henry for the other five names but they won’t be revealed yet.

United Kingdom

Accounts promising rates up to 15% are drawing in savers – with 12,000 at Zopa alone (This Is Money), Rated: AAA

Half of all customer deposits at peer-to-peer lender Zopa since the start of the year have come via its Innovative Finance Isa, despite only launching the tax-free accounts in June 2017, This is Money can reveal.

Zopa, which was the first to offer the new style Isa product, said 12,000 customers have opened one of its two Isas, which offer up to 4.6 per cent interest.

For savers with a cash Isa, the FSCS offers protection of up to £85,000 per banking licence. This means that if something goes wrong with the bank or building society where you have deposited your money, you will never lose the first £85,000.

Meanwhile for those with a stocks and shares Isa, the first £50,000 is protected, as long as the provider belongs to the scheme.

Landbay opens Seedrs round to new investors as chief eyes IPO (Peer2Peer Finance), Rated: AAA

LANDBAY has announced that it is opening its latest equity funding round to new investors on Seedrs, as its chief executive unveils the company’s flotation ambitions.

The peer-to-peer lender, which specialises in buy-to-let mortgages, has already raised its target of £1.25m from this funding round but it has been opened up again to new investors.

Landbay recently hit the £100m cumulative lending milestone, with over 25 per cent of that amount having been originated in the last three months.

LendingCrowd raises $ 2.8 mln (PE Hub), Rated: A

LendingCrowd said March 28 that it secured another 2 million pounds ($2.8 million) in funding led by Equity Gap. Also participating were a number of private investors from Scotland’s entrepreneurial and finance scene and the Scottish Investment Bank. LendingCrowd, of Edinburgh, Scotland provides a peer to peer lending platform.

Credit unions and the tech revolution: Lessons from the Abcul conference (Coop News), Rated: A

But technology also presents opportunities to reach new markets – making it vital that credit unions keep up with new developments, delegates at this year’s conference of the Association of British Credit Unions (Abcul) were told.

Pitching his fintech to the conference, he said it could offer new possibilities to the sector, such as partnering with the Post Office to offer branch facilities where members can deposit and withdraw money.

“Mobile use is continuing to shoot up. 78% of the UK population is using a smartphone two-four hours a day – and fastest growth is the over -55s. In the South Manchester Credit Union 65% of traffic comes from mobile devices. It’s something we’ve got to accept.”

Colchester is top area for buy-to-let (Mortgage Introducer), Rated: A

Colchester in Essex is the top area to invest in buy-to-let based on capital growth, transaction volumes, rental yield and rental price growth, LendInvest research shows.

In Colchester prices are rising by 9.98% per year, rental growth is increasing by 3.41%, transaction volumes are rising by 2.79% and yields stand at 3.71%.

Despite topping LendInvest’s list Colchester is far from the best in terms of yield, with Manchester offering returns of 5.42%.

The worst area to invest is in East Central London, where capital gains are falling by 3.76%, rental price growth is sliding by 1.1% and transaction volume growth is down 1.73% year-on-year. Despite all of these factors landlords in that area still make a yield of 2.9%.

Scott Wright: Will RBS fund lead to better deal for SMEs? (Herald Scotland), Rated: A

In a growing economy there is a balance to be struck between ensuring banks are well-capitalised and providing the credit private companies need to expand. That much is recognised by leading business figures such as Mike Welch and Jim McColl, with the latter planning to launch his own bank to help address the funding issues.

In that context, the £425 million Royal Bank of Scotland has set aside to boost competition in the banking sector for SMEs is to be welcomed.

And it is encouraging that Nationwide said it would direct that funding to the UK’s 5.7 million smaller and micro businesses rather than the big corporates, given that is arguably firms of this size which have suffered most from the tightening of bank lending. It is also SMEs, broadly speaking, which have been caught up in the shocking mistreatment scandals that have to occurred at certain banks since the financial crisis.

Cryptocurrencies yet to convince the savvy investor – Assetz Capital (Finextra), Rated: B

Investors in the Assetz Capital platform are yet to be convinced by cryptocurrencies, with just 16% seeing them as worthwhile investments.

The peer-to-peer lending platform canvassed the views of its investors in the Q1 Assetz Capital Investor Barometer. 43% believe the entire market is on the brink of collapse, while 40% feel cryptocurrencies are still too immature at present with significant risks attached. 14% feel it is a worthwhile investment but only in moderation, with just 2% thinking it is the future of investments.

The doors are open to MBAs in finance, including fintech, wealth management and venture capital (Find MBA), Rated: B

One route into the fintech sector is the Spotcap Fellowship, which provides up to £8,000 towards the cost of an MBA and a path to working at the Berlin-based online lender.

Niels Turfboer, UK managing director of Spotcap and an IE Business School MBA graduate, says he created the scholarship to address a talent shortage. A survey by recruitment website Indeed found that 20 percent of top fintech job vacancies were left unfilled after 60 days.

 

 

China

CreditEase FinTech Investment Fund Invests in Branch International (PR Newswire), Rated: AAA

CreditEase, a Beijing-based leading FinTech conglomerate in China, announced that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”), recently joined a group of prestigious investors to participate in the Series B investment round of $70 million in Branch International. Other strategic investors in this round of financing include International Finance Corporation (IFC), Andreessen Horowitz, Trinity Ventures and Victory Park.

According to the report recently published by CreditEase, jointly with IFC and Stanford Business School, there are over two billion adults globally in the emerging markets who do not have access to basic financial services (click here to download the Financial Inclusion Report). On a daily basis, Branch processes tens of thousands of loans, in amounts ranging from $2.50 to $500, and expects its total loan origination to exceed $250 million in 2018. Recently entered into the Nigerian market, Branch is currently growing 50 percent month-over-month within that country and 20% month-over-month overall.

European Union

How Fintech is Fixing Broken Credit (Lend Academy), Rated: AAA

For millions of people, a lack of access to credit is just another part of life. Yet, without this access, it can be incredibly difficult for businesses and customers to connect with each other. In fact, according to The World Bank, despite a 20% increase between 2011 and 2014 in the number of adults with access to formal financial services worldwide, an expected 2 billion adults worldwide are unbanked. In addition, some 200 million businesses are excluded from the formal financial system.

The problem is particularly prolific in high growth markets; with a 2015 PwC report putting India’s unbanked population at 233 million (that’s nearly every 1 in 6 people). In South East Asia, a further 264 million people are without access to credit (including a staggering 80% of Cambodians). And even beyond the individuals affected, some 200 million businesses are excluded from the formal financial system.

A key way that we are achieving this at PayU is through our €110 million investment in German fintech company Kreditech, a leading technology group for digital consumer credit using machine-learning based underwriting. With traditional credit models simply not catering to large sections of the population, collaborative partnership can be instrumental in finding new ways to offer innovative solutions to the huge problem at hand.

International

Seven reasons to hate the long bond (INTL FCStone Email), Rated: AAA

The price of long-term treasuries will fall because:
1 – The global savings glut is turning into a global savings squeeze
2 – Just look at a chart of Treasury yields
3 – Speculative traders have a massive one-way bet on curve-flattening
4 – China could (should?) sell long-term Treasuries to teach Trump a lesson
5 – The Federal Reserve is reducing the size and duration of its holdings: it still has $526 bn of long bonds to sell!
6 – U.S. public debt is abnormally short: deficit-driven issuance will hit the long end disproportionately
7 – Forward guidance artificially compressed term premia: economic uncertainty will make them rise again

Source: INTL FCStone
Source: INTL FCStone

Chinese savings are unlikely to support anymore U.S. bonds for at least five reasons:
• The disappearance of China’s trade surpluses: China’s trade surplus has fallen from 10% of GDP in 2007 to 1% last year. China may become a deficit country next year.
• The Belt and Road initiative: China has found much better uses for its savings than financing the U.S. military and boomers’ Social Security claims. Going forward, China’s mountains of savings will build the infrastructure of Central Asia, the horn of Africa, Russia, Iran, Southeast Asia, and Eastern Europe, rather than flood the U.S. Treasury market.
• American protectionism: In the unlikely event that Trump’s bid to reduce the U.S.-China trade deficit by $100 billion next year is successful, China will have $100 billion less to invest in the U.S. Treasury market.
• China’s retaliation against American protectionism: Despite Trump’s claim that “trade wars are easy to win”, other countries have national interests too. China also has industries to protect, jobs to defend, and face to maintain. China is sitting on $3.1 trillion in currency reserves: according to the U.S. Treasury, China holds about $1.2 trillion in U.S. national debt (that just includes official accounts).

Source: INTL FCStone

 

Fintech and Property: What You Need to Know (The Urban Developer), Rated: A

Fintech is disrupting the global finance industry, to the benefit of both businesses and consumers.

Advancements in communication and information technology has enabled the rapid growth of technology platforms that provide transactional services. Online payment systems, debt platforms and online exchanges allow companies to better manage their clients and use the data collected to provide the best possible service.

What Fintech products will the property industry gain the most benefit from?

Data Analytics: Using information and data from Fintech platforms will help advisors and agents to make informed decisions for their clients. They will be able to get a better understanding of the client’s overall position, while also increasing the level of personalisation for the client.

 

Raising Capital: There are a number of avenues available for raising capital and the digitalisation of fundraising will open up new opportunities. Using Fintech products will not only speed up the process, but it will also open the door for reaching new investors through a number of online platforms.

India

Nuo Bank, India’s First Decentralized Cryptocurrency Bank, Raises $ 250,000 from Directors of PayU India (Crypto News), Rated: AAA

Despite government’s discouraging stance towards cryptocurrencies India’s crypto startups are getting their deserved thumbs-up from the industry and investors. One such promising startup known as Nuo Bank just raised about Rs. 1.6 crore ($250,000) from the CEO and MD of PayU India within a week of its launch, which shows the kind of trust that both PayU directors have in its growth potential.

Next, like other major cryptocurrency companies Nuo bank will also have its own coin. It’s going to issue 200 million Nuo tokens to customers, which represent 20% of its 1 billion token supply. The value of these tokens will be determined from smart contracts, and the smart contracts stipulate that 25% of Nuo Bank’s revenue should be kept reserved for these tokens.

P2Ps are in a race to build 1st blockchain platform here (The Economic Times), Rated: A

From established players like Faircent to early stage companies like India Money Mart, Paisadukaan and OML P2P, all are trying to develop the industry’s first blockchain platform and also share data about lending transactions between them in order to mitigate frauds.

All these companies have applied and are waiting for the NBFC P2P licence from the Reserve Bank of India.

Faircent, the country’s largest P2P platform has committed upwards of $1 million for this kind of a solution which they feel will help them reap huge benefits when traction on these platforms gains.

 

Asia

Fintech startup takes receivables platform to blockchain (Global Trade Review), Rated: A

The Singapore-based firm forecasts a US$2tn market opportunity in its use of blockchain to provide a secure invoice factoring solution using its customised cryptocurrency. With its token pre-sale set to end on April 8, the group’s initial coin offering will launch on April 9.

Acudeen Technologies brands its platform as “an inclusive environment for small businesses who are having a hard time getting financing using traditional means”.

Africa

Wonga South Africa Enters the Personal Loans Market (The African Exponent), Rated: AAA

Fintech craze changing face of lending (Business Daily), Rated: A

The numbers are in and the jury is out. The world over the fintech craze that underpins lending outside the traditional banking ecosystem continues unabated.

Whether the channel of consumption is online, mobile or the services packaged differently such as payday lending and layaway financing, investments continue to pour in chasing opportunities in a vertical that is quickly getting overcrowded with little to no service differentiation and a continued insistence on insight wizardry riding off copious amounts of personal data ingested.

Will technology save independent financial advice? (Money Web), Rated: B

Essentially technology can do two things for the advisor. It can significantly reduce the costs of administration and record keeping, while also making these processes simpler and more efficient.

“The whole market place is talking about digital – the rewiring of the investor and the investment advisor,” Wilson says.

Authors:

George Popescu
Allen Taylor

Further reading

Chicago’s divide; Belt and Road; cricket; arctic foxes; the Phillips Curve; and much more

Chicago's divide; Belt and Road; cricket; arctic foxes; the Phillips Curve; and much more