News Comments Today’s main news: OnDeck creates subsidiary for bank partnerships. Lendio hits $1B in business loans. Blend Network on track to exceed 5M GBP in lending. Hexindai completes P2P compliance self-inspection report. Today’s main analysis: Bank earnings for JPMorgan, Wells Fargo, and Citigroup. Today’s thought-provoking articles: Why Google and Amazon are not a threat to small banks. Cities […]
Q3 bank earnings. An exellent report on JPMorgan, Wells Fargo, and Citigroup bank earnings. Especially interesting are the figures on digital banking customers.
Why Google and Amazon are no threat to small banks. I’ve been saying all along that banks should not be worried. Amazon and Google are stretching well beyond their core offerings, but they can’t get too far afield without destroying their business models.
OnDeck Capital, an online lender that also provides the technology to JPMorgan Chase’s digital small-business lending platform, is creating a new subsidiary to pursue partnerships with other banks.
The wholly owned subsidiary will be called ODX, according to New York-based OnDeck.
OnDeck, which specializes in online small-business loans, has been working to build its bank partnership business since announcing its deal with JPMorgan Chase in 2015. The nation’s largest bank launched its QuickCapital platform in 2016.
Lendio today announced it has facilitated $1 billion in financing to more than 51,000 small businesses across the U.S. Since its inception in 2011, Lendio has been bridging the financing gap for small business owners. As a result of access to growth capital, Lendio’s small business clients have burgeoned, generating an estimated $3.8 billion in economic output and creating more than 25,000 jobs in communities nationwide.
Revenues at JPM grew by 5% YoY to $27.8 Bn, and earnings grew by 24% YoY to $8.4 Bn. Earnings growth was driven by record NII of $14.1 Bn, up by 7% YoY, while fixed income trading revenues dropped by 10% YoY. JPM saw a small increase of 2% YoY in its consumer loan book. Net charge-offs declined by 11% YoY to $1.1 Bn and the provision for loan losses declined by 35% YoY to $0.9 Bn. The bank saw healthy growth of 11% YoY in its digital banking customers to 32.5 Mn. JPM’s ROE for this quarter was 14%, up by 3% points YoY.
Wells Fargo Q3 Earnings
WFC’s revenues were flat YoY at $21.9 Bn, but earnings grew by 33% YoY to $6 Bn. Earnings growth was driven by 1% YoY increase in NII to $12.6 Bn. The consumer loan book continues to decline with a drop of 3% YoY to $440 Bn driven by auto loans. Net charge-offs declined by 13% YoY to $0.5 Bn and the provision for loan losses declined by 19% YoY to $0.6 Bn. Digital banking customers grew by 4% YoY to 29 Mn. WFC’s ROE for this quarter was 12%, up by 3% points YoY.
Citigroup Q3 Earnings
Citi’s revenues were flat YoY at $18.4 Bn, but earnings grew by 12% YoY to $4.6 Bn. Earnings growth was driven by 9% YoY increase in fixed income trading revenue, the first increase since 2017. Citi’s outstanding consumer loans grew by 3% YoY to $309 Bn. Net charge-offs increased slightly by 1% YoY to $1.7 Bn but the provision for loan losses declined by 13% YoY to $1.9 Bn. Digital banking customers grew by 5% YoY to 18 Mn. Citi’s ROE for this quarter was 9.6%, up by 2% points YoY.
It’s a logical theory that sounds reasonable on its face: Since most small businesses already use Google, Amazon and Facebook for marketing, it will be easy for these tech giants to market loans to small businesses that they already have as customers.
One CNBC headline sums up the sentiment: “Another industry Amazon plans to crush is small-business lending.” The story notes that Amazon has already made billions of small-business loans to thousands of merchants and suggests that the online giant could come to dominate lending. In addition, there are countless fintech startups also seeking to disrupt small-business lending.
That’s because the theory misses a crucial detail: When tech giants and fintech startups target a business segment, they take a programmatic approach of catering to the most common use cases. That’s the opposite of what community banks do.
In data for 2017, the Census Bureau found that 13.7% of the U.S. population was foreign-born.
Key findings Cities with larger foreign-born populations and homeowners have higher home prices. Prices for the top 10 cities average $491,750 compared with $167,560 for the bottom 10.
But the lead city has modest home prices. Miami is top of the list with 26% of homes owned by foreign-born residents, but has a median price of just $278,700.
Immigrants love the coasts. The rest of the top five are also coastal cities, all in California with 17% and higher foreign-born homeownership rates and home prices above $300,000.
Some bargains are available. In addition to Miami, more affordable cities with high immigrant populations include Houston at No. 6 and Las Vegas at No. 7.
Cheaper cities are mostly shunned. Immigrants show little interest in bargain hunting in the cities towards the bottom of the list. The percentage of foreign-born homeowners in the bottom five cities is below 3%, despite home prices averaging about $160,000.
There are many VC firms investing in fintech today but most are based in the US or Europe. Our next guest on the Lend Academy Podcast runs a different type of fund that has its origins in China.
Anju Patwardhan is a Managing Director of the CreditEase Fintech Fund, which has quietly become one of the leading VC firms globally focused on fintech. They only launched in March 2016 and already they have made 45 investments into many of the leading fintech names such as Upgrade, Marqeta, Funding Circle, Ellevest, NAV, Figure, Onfido, DV01 and True Accord just to name a few.
Barclays is launching a US current account in a move that will put them in a head to head battle with Marcus; the account will be added to their current digital offering in the U.S. which currently includes credit cards, savings and loans to about 13 million customers; “We’re going to launch checking, we’re in the process of doing the build and we’re doing some testing .
We expect to have that in the market next year,” explained Barry Rodrigues, head of cards and payments at Barclays International, to the FT; the company does believe their knowledge in the U.S. market with credit cards can help to position them as they make this push into checking accounts; the company has not released targets for how many accounts they look to attract.
So how can a fintech startup stand out in an increasingly crowded fintech space? For personal finance and lending startup MoneyLion, the answer is to go where the audience goes—and go around in a loop with them 500 times.
Pedal To The Metal Scaling
That’s why MoneyLion recently announced it was partnering with Penske Automotive Group, Inc.PAG‘s Team Penske to sponsor NASCAR driver Austin Cindric’s Ford Motor CompanyFMustang for four races this season. It’s an unexpected move from a fintech startup, whose primary marketing channels to date have generally been social media and TV commercials.
With the number of retirement age citizens (65+) set to increase from 48 million today to 79 million, if reforms aren’t made, social security will start running out by 2035.
4. If you start investing now, you could be a millionaire later
If you want to start off small you can try investing in peer-to-peer lending with a minimum of $25. Instead of going through banks, peer-to-peer lending connects borrowers to lenders. Lenders can finance all or part (along with other investors) of a borrower’s loan at an interest rate of roughly between 5-36 percent.
Speaking exclusively to Development Finance Today, Yann Murciano, CEO, and Roxana Mohammadian-Molina, chief strategy officer (left), both of Blend Network, highlighted the company’s significant growth and future plans for the platform.
“We had a target of £5m, which it looks like we are going to exceed, because we will be at more than £4.2m in the next 10 days.
“In the first four months, we provided one facility of £1.3m and one for £1.4m, so this is how quickly we are growing.
Green and social infrastructure crowdfunding platform Abundance is set to announce a fund-raising of its own. The platform will this week unveil plans to raise a seven-figure sum to fund its next stage of growth, with an equity issue that will be hosted on its fellow crowdfunding service Seedrs.
But there is perhaps one small corner of the alternative finance universe in which the UK has been behind the curve – namely royalty finance. Originally developed to service the mining and commodities industries, the concept of royalty finance has been adapted to the needs of SMEs and mid sized companies. US businesses have been able to access this form of funding since the early 1990s, when a fund called Cypress Growth Capital was established to provide an alternative to venture capital, but to date the idea has failed to gain much traction in the UK.
But things are changing. Corporate finance companies offering variations on the royalty finance theme are emerging – including
The Financial Conduct Authority has written a “Dear CEO” letter to platforms providing high-cost short-term credit – which includes some peer-to-peer lending firms – to check on their creditworthiness assessments, particularly for repeat borrowers, and to assess whether customers are being treated fairly.
It warns that firms must be able to fund any remediation costs from complaints and should inform the FCA if they are unable to.
The letter follows the collapse of payday lender Wonga in August.
Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced it has completed the submission of its P2P Compliance Self-Inspection Report to the Beijing Municipal Bureau of Financial Work, completing one of three key steps for compliance with industry reforms from the National P2P Rectification Office.
Hexindai is actively supporting and participating in this compliance process, which aims to foster the stable growth of the P2P lending industry in China. The result of this process will be a set of standards and best practices across the whole industry to protect the interests of both borrowers and lenders.
Now, Hexindai will focus on the next two steps in the process, including an inspection conducted by Beijing Internet Finance Industry Association. This will be followed by verification of inspection results by the Beijing Municipal Bureau of Financial Work with field inspection and possible final check by higher level government organizations.
On October 10th, People’s Bank of China, China Banking & Insurance Regulatory Commission and the China Securities Regulatory Commission jointly issued the “Administrative Measures on Anti-Money Laundering and Anti-Terrorism Financing for Internet Finance Institutions (Trial)” (hereinafter referred to as the “Administrative Measures”).The purpose of this document is to regulate the possible anti-money laundering and anti-terrorist financing of Internet finance institutions, and to effectively prevent money laundering and terrorist financing activities.
The “Administrative Measures” will be implemented from January 1, 2019, and require deeper compliance requirements for Internet finance institutions. At the same time, NIFA should coordinate with other industry self-regulatory organizations to formulate industry rules to achieve effective linkage between supervision and self-discipline management.
Dow Jones VentureSource is out with their quarterly report on VC activity for Q3 of 2018. According to their numbers, European VC fundraising increased during Q3 but investment in European companies “showed a notable decline in deal flow activity and investment levels.”
The report states that VC investment for the quarter totaled €3.51 billion across 24 European VC funds. This is a significant increase of 50% versus Q2 of 2018. Additionally, when comparing to Q3 of 2017 both capital and fund closings increased by 90% and 14% – respectively.
A new digital platform, run in partnership with Bendigo and Adelaide Bank, has launched to give Australians a “radically different banking alternative”.
The new digital app, called Up, was created by Melbourne-based technology developer Ferocia and operates under Bendigo and Adelaide Bank’s banking licence.
The smartphone banking app was officially launched last week and enables customers to track their money in real time, predict upcoming bill charges automatically and pay them on time, and also offers multiple saver accounts, round-ups on purchases, digital payments (such as Apple Pay and Google Pay) and no international transaction fees.
Start-ups in fintech and peer-to-peer (P2P) lending platforms are devising strategies of attracting more millennials towards small-ticket loans ranging from Rs 10,000 – 200,000, which are being mainly utilised towards experiential travel. Entrepreneurs say small ticket loans generally go towards home renovation, home decoration, home repairs, purchase of second cars/bikes, etc.. “But off late, the trend is tilting more towards utilisation of such loans for fulfilling travel ambitions,’’ say entrepreneurs.
“There is no doubt this segment (travel) is rising and more people are opting for this loan. Any customer would love a packaged deal which comes with financial support to go on a vacation, and this will also help them enjoy their vacation well,” says Bhavin Patel, co-founder and CEO, LenDenClub.
Although people going for longer vacations or to expensive destinations take loans that are in lakhs, during long weekends, the frequency of very small loans ranging from Rs 3,000 – 10,000 increases significantly, observes Bala Parthasarathy, co-founder and CEO, MoneyTap. The idea is to supplement their existing cash coffers, without causing any imbalance in their daily lifestyles, say experts.
It’s 2018. We’re facing the impending risk of climate change, rampant wealth inequality, and increasing populism around the world. We need to think beyond quarter-to-quarter profits to survive this. Companies must think about the long-term effects of their work—beyond their bottom dollar.
Find a purpose for your company that will help you soar during the good times, and persevere during the tough. What’s helped me fight fires every day—and get through the hardest challenges—is our mission of powering a new, more equal digital economy in India. A true mission serves a massive need in our society, especially for SMBs navigating the post-GST economy, and has the potential to create millions of jobs for companies looking to digitize and become compliant.
What’s my business model? How does it relate to my mission? What vulnerabilities does it have?
A mission should be more than words on your website’s ‘About’ page. It should lie at the core of everything you do, including your business model. You’re destined to fail—or at least be gravely disappointed—if your mission and business model do not align.
One of India’s fastest growing P2P lending platforms, ATL facilitates instant unsecured loans (personal, education and business loans) to eligible borrowers by connecting them with investors or lenders across India through a 100% digital ecosystem.
With this certification, ATL joins a select group of fintech startups who hold the NBFC-P2P accreditation. RBI follows a very stringent due diligence process while granting this license, which involves eligibility criteria like financial stability, business continuity plan, and how the business will aid in RBI’s larger vision of financial inclusion. The startup says that recognition from RBI is a strong validation of the startup’s sharp business model, processes and compliance with the RBI guidelines.
It looked like the end had arrived for Adewale Fatai’s chicken farm. Money was running out. Built to house 30,000 chickens, the farm was producing fewer than 2,000 chicks. His family had no funds to lend, and Nigeria’s banks weren’t interested.
Instead, he went online.
Two years later, Fatai now has 20,000 chickens. Flanked by thousands of chirping birds at his farm in Nigeria’s southwestern Ogun state, Fatai says his operation was saved by Farmcrowdy, one of a breed of new peer-to-peer lending companies aiming to match farmers with small investors.
Equity Group Holdings Ltd., Kenya’s biggest bank by market value, expects its financial-technology unit to bring in as much as 2.2 billion shillings ($22 million) of revenue in its first year of independent operations, according to Chief Executive Officer James Mwangi. The bank “has resolved to make Finserve an independent commercial subsidiary,” Mwangi said in a statement published in the Nairobi-based Sunday Nation newspaper. The unit serves 1.96 million subscribers on its mobile-banking platform, Equitel, he said.
The unit, Finserve Africa Ltd., became an independent entity this year and facilitates cross-border transactions in seven Eastern African nations worth 2 billion shillings each month, according to the statement. It has a startup capital base of 1 billion shillings and its assets are valued at 1.98 billion shillings, Mwangi said.
With a walloping around US$100 billion check, SoftBank’s Vision Fund is the world’s largest venture capital vehicle, and it’s also considered too big to be a conventional one. The Vision Fund is known for throwing gigantic amount at startups, urging them to compete for more market share at costly expenses.
Online lender Social Finance’s ex-CEO Mike Cagney, after investments from SoftBank in 2015, said that the funding “takes the pressing need of an IPO off the table,” and allow the company to put off an IPO indefinitely.
It seems that, receiving SoftBank investment is the new form of doing an IPO.
The firm in Southeast Asia invested in Grab and is encouraging the ride-hailer to form joint ventures with its portfolio companies to help them enter the region.
Unethical debt collection practices are part of the reason Indonesia’s financial services authority, OJK, has been strictly monitoring the sector. It recently blacklisted 407 online lenders for not registering with the authority. Raja Uang was one of them.
OJK cracks down on all firms who operate without being registered with OJK, but in practice, it’s difficult to ensure they do shut down for good.
News Comments Today’s main news: PayPal to fully integrate Swift Financial after closing acquisition.GoCardless raises $22.5M.Qudian poising for U.S. IPO.Varengold Bank AG to give $61M to MarketInvoice.Bondora hits 100M Euro milestone.Reserve Bank of India to treat P2P lenders as non-banking financial companies. Today’s main analysis: Public distrusts regulators as much as Wall Street.(a must-read) Today’s […]
Public distrusts Wall Street regulators as much as Wall Street. AT: “This is a must-read. Based on a Cato Institute survey, it tells the attitudes of Americans toward banks, regulations, Wall Street, credit, consumer lending, and a host of other financial matters. Quite interesting that Americans thing tech executives, along with athletes and entertainers, are over paid, however, they don’t want regulation to oversee pay scales.”
A manifesto to all men: We have to do better. AT: “I wholeheartedly agree. With two younger sisters, three daughters, and two granddaughters, I want them to live in a world where they are as respected for their talents as men are for theirs. There’s absolutely no reason men shouldn’t respect their female colleagues as much as they respect their male colleagues.”
PayPal said that it plans to fully integrate Swift Financial into its payment service “over the course of the next year,” according to Darrell Esch, PayPal’s vice president and commercial officer of global credit, in a blog post.
PayPal has actually offered a working capital program for lending money to small businesses since 2013, and it has loaned more than $3 billion through the program to date. This compares to the $3 billion Amazon has loaned SMEs since the launch of Amazon Lending back in 2011, and the $1.5 billion in loans Square has doled out since launching Square Capital in 2014.
Americans have a love-hate relationship with regulators. Most believe regulators are ineffective, selfish, and biased:
74% of Americans believe regulations often fail to have their intended effect.
75% believe government financial regulators care more about their own jobs and ambitions than about the well-being of Americans.
80% think regulators allow political biases to impact their judgment.
But most also believe regulation can serve some important functions:
59% believe regulations, at least in the past, have produced positive benefits.
56% say regulations can help make businesses more responsive to people’s needs.
Americans want regulators to focus on preventing banks and financial institutions from committing fraud (65%) and ensuring banks and financial institutions fulfill their obligations to customers (56%).
77% believe bankers would harm consumers if they thought they could make a lot of money doing so and get away with it.
64% think Wall Street bankers “get paid huge amounts of money” for “essentially tricking people.”
Nearly half (49%) of Americans worry that corruption in the industry is “widespread” rather than limited to a few institutions.
Few Americans Want “More” Financial Regulations—They Want the Right Kinds of Regulations, Properly Enforced
Polls routinely find that a plurality or majority of Americans want more oversight of Wall Street banks and financial institutions. This survey is no different. A plurality (41%) of Americans think more oversight of the financial industry is needed. However, only 18% think the problem with federal oversight of the banking industry is that there are “too few” rules on Wall Street. Instead, 63% say the government either fails to “properly enforce existing rules” (40%) or enacts the “wrong kinds” of regulations on big banks (23%).
Despite Distrust of Wall Street, Americans Like Their Own Banks and Financial Institutions
90% are satisfied with their personal bank; 76% believe their bank has given them good information about the rates and risks associated with their account.
87% are satisfied with their credit card issuer; 81% believe their credit card issuer has given them good information about the rates, fees, and risks associated with their card.
83% are satisfied with their mortgage lender.
Of those who have used payday or installment lenders in the past year, 63% believe the lender gave them good information about the fees and risks associated with the loan.
Democrats and Republicans Want a Bipartisan Commission to Run CFPB, Divided on CFPB Independence
Nearly two-thirds (63%) of Americans think the CFPB should be run by a bipartisan commission of Democrats and Republicans, rather than by a single director. Support is post-partisan with 67% of Democrats and 64% of Republicans in favor of a bipartisan commission leading the agency.
A majority (54%) of Americans think that Congress should not set the CFPB’s budget and should only have limited oversight of the agency.
Few Americans (26%) believe the CFPB has achieved its mission to make the terms and conditions of credit cards and financial products easier to understand. Instead, 71% say that since the CFPB was created in 2011 credit card terms and conditions have not become easier to understand—including 54% who believe they have stayed the same and 17% who think they have become less clear.
Most Support Risk-Based Pricing for Loans, Say Low Credit Scores are Due to Irresponsibility
Nearly three-fourths of Americans (74%) say they’d be “unwilling” to pay more for their home mortgage, car loan, or student loan to help those with low credit scores access these loans.
The acquisition will expand PayPal’s ability to provide access to business financing options to the millions of small business owners who rely on PayPal and our partner platforms to run their businesses. As we’ve said before, increasing access to capital is vital to the success of small businesses and is a strategic offering for PayPal, which drives merchants’ sales growth, increases processing volume, and reduces merchant churn.
Like many of you I was shocked and infuriated by the news out of SoFi last week. I think we all expected better from the company and its leaders. Some of the behavior that has been reported is reprehensible and it points to a much deeper problem that goes way beyond fintech. The problem of sexual harassment in the workplace is bigger than any one company, any one industry or even any one country. It is rampant throughout the globe.
Men: we cannot keep behaving this way.
I have been drinking at the bar late at night at enough conferences to know that many men believe it is still ok to treat women as objects. This kind of attitude has consequences in the workplace. And if the leaders of the company condone this behavior there will be a culture that is at best unwelcoming towards women and at worst so toxic it can endanger the very survival of the company.
Women in Fintech
People often complain to me about the lack of women in fintech. People say that LendIt does not have enough female speakers and there are not enough women in general at our events.
This article is the first step in what I expect will be a long journey towards making fintech a more welcoming place for women. I want to see us do better as an industry. We should do everything we can to make fintech an attractive career choice for young women. We have several initiatives around this that are in the planning stages that we hope to roll out at LendIt USA in San Francisco next year.
Ellevest, a nearly three-year-old, New York-based digital investment platform built for women and led by former Wall Street titan Sallie Krawcheck, has raised $34.6 million in fresh funding.
It’s technically a Series A round, according to the company, which says a widely reported $10 million round that closed last year was seed capital.
The round — which was led by Rethink Impact, and includes participation from PSP Growth, Salesforce Ventures, CreditEase Fintech Investment Fund, LH Holdings, SK Impact Fund, Morningstar, Khosla Ventures, Mellody Hobson, Ulu Ventures, Contour Venture Partners and Astia Angels — brings the company’s total funding to $44.6 million.
Chinese payments company Ant Financial is planning to resubmit its application for U.S. review of its deal to buy MoneyGram International Inc (MGI.O) for $1.2 billion, a source familiar with the matter said on Friday.
Ant Financial and MoneyGram have already refiled for clearance from Committee on Foreign Investment in the United States (CFIUS) when they were unable to secure it within an assessment period after the first application, Reuters reported in July, citing sources.
Ant Financial’s latest attempt for approval would be its third as the maximum time of 75 days for assessing such applications nears completion.
JPMorgan Chase & Co. is partnering with another fast-growing technology firm, this time to help business clients eradicate paper checks.
The bank is working with Bill.com, the largest U.S. business-to-business payments network, to enable customers to send and receive electronic payments and invoices, according to Stephen Markwell, a product strategy head for JPMorgan’s commercial bank. The New York-based lender will pilot the service in early 2018 and plans to offer it to more business and commercial clients later in that year, Markwell said.
While many consumers already are embracing digital tools for sending money, like PayPal Inc.’s Venmo or the banking industry’s Zelle, more than half of business payments are still via check, according to Markwell. Companies write 8 billion checks a year, each costing about $4 to print and handle, he said.
LendingTree Inc. (NASDAQ:TREE) has acquired an online loan platform for businesses called Snap Capital, known as SnapCap, in a potential $21 million deal. SnapCap is LendingTree’s fifth acquisition since June of 2016.
LendingTree says the acquisition has a potential value of $21 million. The online marketplace will pay $12 million in cash upfront and if SnapCap hits certain performance targets over time, it will receive contingent payments of up to $9 million.
Charlotte-based LendingTree has been diversifying its business over the last several years beyond mortgages. And its stock price has been on the rise as a result. LendingTree’s stock was up about 7% Tuesday afternoon after the acquisition announcement. The company’s shares were trading at $251 Tuesday afternoon, up from about $93 per share a year ago.
Online lender LendingPoint announced Tuesday (Sept. 19) that it had closed an up to $500 million credit facility on Aug. 22.
In a press release, the company said the credit facility was arranged by Guggenheim Securities. LendingPoint noted it drew down $138.5 million of the facility at the closing, and it took an additional $32.7 million on Sept. 15. The proceeds are being earmarked to bankroll the growth of its consumer installment loan portfolio, a business element which has roughly doubled between August 2016 and August 2017.
According to the company, the up to $500 million credit facility is among the largest credit facilities raised in the online consumer lending market in 2017.
Most of the country has never heard of Madden v. Midland Funding and the common law doctrine of “valid-when-made,” but the impact of the misguided decision by the 2nd U.S. Circuit Court of Appeals on consumers is far-reaching.
Rate exportation has been key to the rise of standardized nationwide financial products, like credit cards, allowing banks to lend to borrowers across state lines without necessarily establishing a physical presence in every state, giving consumers better choices.
Following the Madden decision, it is unclear in the 2nd Circuit whether certain bank loans transferred to a marketplace lending platform would be ruled valid or not. Are loans bound by the bank’s “home” state rate cap, or the borrower’s “host” state rate cap? No one knows for sure. This legal uncertainty has caused nonbank investors in these loans to pull back, which, in turn, has led to a reduction in responsible and affordable online lending. Borrowers who are still trying to build credit have lost better options. According to an August study by professors at the Columbia, Stanford and Fordham law schools, “the decision reduced credit availability for higher-risk borrowers in affected states.”
San Diego-based Reliant Funding and New York-based Merchants Capital Access are now joined as one under the Reliant Funding name.
Four Facts about Reliant Funding
Reliant Funding’s business model provides access to capital for businesses that traditional banking typically does not serve. With innovative pricing and cutting-edge risk management, it gives businesses the fuel they need to penetrate their market and grow.
Since its founding, Reliant has funded businesses over thirty thousand times, providing over $900 million in working capital to America’s small businesses.
Reliant Funding speaks directly with thousands of American small and medium sized businesses each month and services thousands more. The focus is always on the individual client, their business story and meeting their needs.
Reliant Funding’s Wholesale Division currently works with hundreds of partners, providing them with funding for their clients as if those clients were directly originated in-house. The key is a commitment to strategic alliances, ensuring the relationship lasts longer than a single transaction. It’s just one aspect of many which sets Reliant Funding apart from the competition.
Cloud computing, big data and financial technologies have raised the stakes for finance and accounting professionals according to Randstad Professionals‘ new whitepaper, Technology’s Impact on Finance and Accounting.
There are three broad areas in which emerging technologies and digital tools are causing significant disruption to the way things are done:
Breaking down big data for strategy: Finance and accounting employees can use big data to their advantage by forecasting trends, pinpointing behavioral patterns and suggesting probable outcomes — all of which can tie into a company’s strategy and impact their bottom line.
Leaving repetitive work to the cloud: Cloud actions have the ability to handle inventory management, generate invoices and provide accurate financial data. The software also delivers convenience for employees who want to digitally share company finances among coworkers, financial advisors, customers and other key stakeholders at a moment’s notice.
Putting the functionality in finance: Finance is making its way into fixed markets that provide mobile phone applications and access on everyday devices. Over the years, we have revolutionized how we pay, view our bank statements and transfer money through start-ups such as Bitcoin and Linden Dollar. Technologies that also integrate peer-to-peer lending or personal loan requests allow for a frictionless experience for customers.
The Consumer Financial Protection Bureau (CFPB) is expected in coming days to release a long-anticipated rule curbing payday lending, now that a final review by other regulatory agencies has concluded, three people familiar with the matter said.
The rule pits the country’s consumer financial watchdog against payday lenders who say the new regulation will wipe out much of their established industry, currently overseen by the states, and push poor and rural customers to use illegal loan sharks.
Because the loans can carry interest rates as high as 390 percent, borrowers can become trapped in devastating cycles of taking out new loans to pay outstanding ones, the CFPB said.
Payday and short-term lending is an approximately $6 billion-a-year industry, one that both critics and supporters of payday lending agree will take a major hit if the CFPB’s proposed rules on payday lending go through.
To make that block happen, Republicans in the House of Representatives added a “rider,” or amendment, to a spending bill banning the CFPB from regulating the payday loan industry.
The CFPB rules on payday lending have been in the works for some time and would require lenders to conduct background checks showing borrowers can afford the loans and to limit the number of loans made to a single borrower.
First Associates Loan Servicing announced today the release of the Morningstar ranking report certifying their overall excellence in loan servicing. Morningstar awarded First Associates a MOR RV1 ranking of ‘stable’ which is the highest certification possible and deeply assesses risk management, call center performance, quality assurance, technology, security protocols, project management and disaster recovery protocols.
Since the majority of consumers lacked insurance coverage for flood damage, the costs keep adding up from replacing furniture and appliances to renting another home or apartment until the costly repairs are completed.
What makes it so diverse? The markets available or the types of real estate?
Amy Kirsch: All of the above. We’ve done deals in 39 states, we offer debt and equity, commercial and residential, and we’ve done basically every asset class.
Do you have a minimum for investment?
The lowest limit we have now is $5,000, but it varies on how large of a fundraise we’re completing.
What’s innovative about RealtyShares? The technology, or what it lets you access?
A combination of both—I’ve invested in real estate in the past, and it’s always come through people I knew, and it was concentrated to where I was living at the time. When you’re looking at middle-market opportunities or don’t have hundreds millions of dollars to invest, the opportunities become a little more rare. So access is definitely a differentiator here.
On Monday, Prime-Ex Perpetual‘s real estate crowdfunding effort began in earnest with the launch of their PEX-Token cryptocurrency sale, aimed at generating $25,000,000 in USD equivalent cryptocurrencies. The PEX-Token is a dividend token in which the company will pay 80% of company profits back to the PEX-Token holders. Beginning Monday people purchasing PEX-Tokens will receive 15% bonus PEX-Tokens for purchasing PEX-Tokens early.
Once again, Accel, Balderton Capital, Notion, and Passion are backing GoCardless, this time to the tune of $22.5 million and on the back of what the startup says is record annual growth in the U.K. and strong, early traction in new markets. Outside of Blighty, the company operates its bank-to-bank payments network in the Eurozone and Sweden.
GoCardless isn’t disclosing revenue. Instead the company says it processes over $4bn worth of transactions across more than 30,000 organisations in the U.K. and Europe, working with small startups and large enterprises across a number of industries. It offers an API and off the shelf integrations with over 100 partners including Xero, Sage and Zuora. Customers include Sage, Thomas Cook, Box and The Guardian.
Artificial intelligence (AI) will soon be everywhere. The insurance industry is facing huge changes as AI steps boldly into every aspect of its internal operations and external relationships wearing the bright new clothes of InsurTech.
It has brought new players into the insurance market with some, like Lemonade, the world’s first peer-to-peer insurance carrier powered by AI and behavioural economics, experiencing phenomenal growth over a very short time.
It is estimated that around £1.32 billion was invested globally in the InsurTech arena in 2016, up 32% on the previous year. The lion’s share of this was in the United States but the UK and Europe are increasing their investment (see chart below).
Other innovations, such as fractional insurance where customers buy on a pay-as-you-go basis or peer-to-peer insurance, will have a deeper impact.
For Rutter, one of the key cultural challenges for the insurance industry is going to be its cautious approach to regulation.
he Financial Conduct Authority is the lead regulator in this area and it has been trying to engage the industry, setting up a ‘sandbox’ to encourage insurers to work with it to explore the impact of regulation on technological innovation. In particular, it will be aiming to test the boundaries of legislation such as the Insurance Distribution Directive (IDD).
There will be some InsurTech applications that get it wrong, predicts Rutter, potentially selling large numbers of policies to the very people underwriters don’t want on their books: “Insurers need to understand that once automated decisions have been made, you can’t pull back from them by cancelling policies. That is hardly treating customers fairly”.
Bruce Davis, co-founder and MD of green energy-focused P2P platform Abundance, has been appointed to the government’s Green Energy Taskforce. The group has been set up to help accelerate the growth of green finance and the UK’s low carbon economy.
Abundance is the UK’s biggest green energy-centric peer-to-peer site, with roughly £50m in finance facilitated for projects to date, according to AltFi Data. Its investors are able to invest in debentures for projects such as wind turbines and solar farms, and can hold those investments in an Innovative Finance ISA.
Online consumer microlender Qudian said it plans to raise up to $750 million in a New York IPO, in the second of two major fintech deals this month which are expected to kick off a wave of similar listings by year-end. But a source with direct knowledge of the situation told Caixin the final fundraising amount is likely to exceed $1 billion, possibly making it the largest IPO by a Chinese company in the US this year.
Uncertainty around Brexit may be mounting as political leaders from the U.K. and the European Union clash on the terms of separation, but that isn’t slowing down foreign investors from betting on Britain’s top peer-to-peer lenders.
Varengold Bank AG, a Hamburg-based private banking firm, will provide 45 million pounds ($61 million) in annual funding for loans to small businesses arranged by MarketInvoice Ltd., the British finance company said in an emailed statement.
Younited Credit, the Paris-headquartered consumer lender announced a capital increase of €40 million subscribed by a panel of the top of the crop growth investors in France. Next to its historical shareholders, Eurazeo, Crédit Mutuel Arkema, AG2R La Mondiale and Weber Investissements which are already very active in Fintech and alternative finance financing, the startup now takes on board new major investors: Bpifrance, Matmut Innovation, and Zencap Asset Management.
Today, on the 20th of September, GoldMint is launching its ICO.
GoldMint is celebrating the beginning of its ICO by attending 3 major events on the same day the crowdsale kicks off. One of these events is BlockchainLive in London – Europe’s leading Blockchain conference bringing together over 75+ global experts in various fields.
Another one is Moscow’s ICO Event which this time mainly focuses on how legislation will impact the cryptocurrency space.
Today GoldMint is also present at the Global Blockchain Summit in Hong Kong gathering iconic speakers from various industries to discuss about the real-world applications of blockchain technology, as well as its potential benefits, risks, and regulatory concerns.
To spread the word about GoldMint in the USA – GoldMint’s advisor and business developer Evgeniy Volfman has recently completed the official Northern American road trip representing the project in New York, Los Angeles, San Francisco and Miami.
Simultaneously, GoldMint is opting to expand its campaign globally, with the Middle East & Singapore regions being the current primary focus.
Nominations are open to Innovate Finance’s Women in Fintech Powerlist, which recognises women shaping the future of fintech around the world.
UK-based membership organisation Innovate Finance compiles its Powerlist of Women in Fintech each year, with the aim of closing the fintech gender gap by showcasing the women driving the global fintech space.
Wayniloans joins several other companies in withdrawing support for SegWit2x and the NYA. Banking and payment processor Bitwala announced last month it will only follow the SegWit2x blockchain if it receives support from Bitcoin Core, which does not appear likely.
FinTechs are certainly in competition with other FinTechs, but the real competition is the established financial service industry, epitomised by the big four banks. Consumer banking is where FinTechs aim to cause the most disruption – and many would say it’s an area where disruption is long overdue.
One recent startup, Spriggy, is out to grab its fair share of the kids’ bank accounts market, for instance.
Over the past 10 years, consumers have lost about $5.7 billion to financial advisers and financial services providers who put their own interests first. The scandals have included Opes Prime, Storm Financial, Timbercorp/Great Southern, Bridgecorp, Fincorp, Trio/Astarra, Westpoint and Commonwealth Financial Planning.
The size of the market in Australia has grown substantially year on year. In 2014, $9.45 million changed hands by way of P2P consumer lending platforms, for instance; in 2015, the P2P consumer lending figure stood at $43.15m.
And when it comes to money raised through crowdfunding, the figure jumped from $8.2m to $26m over the same time period.
At the moment, there are at least 86 FinTech tools operating in Australia through which you can borrow money, most of which are P2P lending services.
And there are at least 24 crowdfunding services on offer. It’s no surprise, then, that the biggest external challenge for FinTechs these days is finding customers.
Nine Australian FinTech companies made the 2016 list of the top 100 FinTech innovators around the world, an annual roundup compiled by the FinTech investment firm H2 Ventures and KPMG Fintech.
Prospa – Offers small business loans from $5000 to $250,000 with payback terms from three to 12 months, “for any business purpose”
Tyro – A payment system technology designed for businesses.
Society One – A P2P lender that says it provides “simple, investor funded personal loans with low rates based on your good credit history”.
Afterpay – Allows you to pay for goods in instalments direct debited from your credit card or other payment option.
Brighte – Offers 0% interest loans to approved homeowners for household energy efficiency improvement, such as solar panels or more efficient windows.
Data Republic – A customer data exchange service to help businesses better target their services to customers.
Identitii – Allows banks and other financial institutions to get more information about where and when payment transactions occur.
HashChing – An online home loan service that connects you with mortgage brokers.
Spriggy – Allows parents to manage kids’ bank accounts using digital tools.
The Reserve Bank of India on Wednesday notified that peer-to-peer (P2P) lending platforms would be treated as non-banking financial companies (NBFCs), an agency reported. This suggests the lending interface will now come under the purview of RBIs regulation under the RBI Act.
Rubique, India’s leading FinTech company, is now taking giant strides in enhancing the level of education and training in the FinTech domain in India. In view of the highly lucrative opportunities that await young professionals in the landscape, it is leveraging its expertise to co-certify courses in FinTech at the prestigious SP Jain School of Global Management.
Many Latin Americans are hard pressed to obtain credit for their businesses or family needs, as 49% of adults do not have bank accounts.
The region’s fintech industry secured $186 million in venture capital investments last year, according to the Latin America Venture Capital Association (LAVCA) – with more than one-third going to startups. Deal count increased by 81%, with 38 transactions.
In Brazil, 160 million adults have some type of banking relationship, but only 55 million are borrowers, according to the country’s central bank. This, combined with more than 20 million unbanked people, turns Latin America’s largest economy into a fertile ground for fintechs, says Jose Prado, founder of Conexao Fintech, an online hub for fintech entrepreneurs and enthusiasts.
Creditas raised $19 million in a Series B funding round. The Sao Paulo-based firm provides asset-backed debt focused on auto and mortgage loans.
In Mexico, where 55.9% of adults have no access to any form of savings deposits, fintechs are offering digital, user-friendly alternatives to traditional banking products, according to Jorge Ortiz, founding president and CEO of non-profit organization Fintech Mexico.
Ripio Credit Network, a company that has raised $5 million in funding from VC like Tim Draper, Pantera, DCG, Overstock (Medici Ventures) and others. Has launched their Initial Coin Offering pre-sale as they gear up for the crowd sale scheduled to launch on October 17th. This comes just as Ripio has received a nice recognition, along with a check, from the d10e Pitch competition.
Ripio, a prominent crypto-based company in Latin America, is building a global credit network solution that aims to enhance transparency and reliability in credit and lending. Ripio is designed to enable connections between lenders and borrowers located anywhere in the world, regardless of currency.
FMO together with Miami based Fintech and digital transformation strategists above & beyond (a&b), launched “ FinForward”, a marketplace where Fintech companies, Financial Institutions (FIs) and Mobile Money Providers (MMPs) in Africa are matched.
The objective of the new platform is to accelerate the digitization of the financial industry in Africa by supporting innovation of the core business with digital solutions. The matching and integration tool will make global Fintech companies accessible and top-of-mind to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs.
The matching and integration tool will make global Fintech companies accessible and top-of-mind to African financial institutions in order to help them to reduce costs, innovate, add services, tap into new revenue streams and work towards open banking platforms. It will also enable them to service difficult to reach segments such as the bottom of the pyramid, women and small entrepreneurs.
How does it work?
Outreach – Banks, Mobile Money Providers and Fintechs are invited to join
Fintech Opportunity Scan – Participating banks and mobile money providers define their problems and needs
Matching – Pairing of Fintechs based on problem definition
Acceleration & Integration – Testing of Fintech solutions in a sandbox and integrating the technology into the bank’s operations
Showcase – demonstrate success during showcase days
News Comments Today’s main news: SoFi CEO Mike Cagney to step down by end of year. Goldman Sachs invests 100M GBP in Neyber. PayJoy raises $6M investment. Groundfloor announces $100M expansion of lending capital with Direct Access Capital. Zopa customers battle loan sale delays. Former Ezubao lead gets life sentence. Lenda raises $5.25M to fund expansion Today’s main analysis: LendingClub launches next generation […]
Lending Club launches next generation credit model. AT: “Without giving a lot of details, Lending Club does allude to the necessary changes in its credit model, and they are very interesting. Trending data can make a huge difference in analyzing risk, and technology is what makes this type of predictive modeling a possibility. This is the type of tech that will keep Lending Club on top.”
What critics of fintech ILC bids aren’t saying. AT: “They’re actually not saying quite a bit, but this article sheds light on one of the most important things not being said, namely, that these companies are asking for more regulation, not less.”
Mike Cagney, the co-founder and chief executive of Social Finance, is to step down from the online lender by the end of the year.
Several former employees said that Mr. Cagney had inappropriate relationships with SoFi employees.
In 2012, Mr. Cagney sent sexually explicit text messages to an executive assistant named Laura Munoz. The company and its board agreed to pay Ms. Munoz a $75,000 settlement.
A former employee of SoFi filed a lawsuit in August saying that he had witnessed female employees being harassed by managers and was fired after he reported it. The lawsuit did not initially name Mr. Cagney, but he was added later.
Mr. Cagney may have been overaggressive in expanding the business, skirting risk controls and compliance rules.
The company said it had raised $90 million in debt financing for one of the loan products that it sold to investors in 2012, but that financing never took place. SoFi eventually bought the loans back from investors.
Employees who spoke to The Wall Street Journal also described a culture in which they felt pressure to work extra hours for fear of being fired. These employees also described angry executives breaking furniture and throwing telephones.
It used to be that financial services firms would respond to accusations of sexual harassment inside their company with denials, followed by investigations and inevitably a spate of firings and public apologies.
In Silicon Valley, the whole thing seems to be strangely flipped. Harassment is so seemingly rampant in tech that companies are on the offense, attempting to prove a negative and paint themselves as the rare “Woke” tech firm. More often than not, the whole thing unravels.
According to the WSJ, the online lender SoFi is denying widespread sexual harassment inside the company by willfully misunderstanding what sexual harassment is.
So like a Fantasy Football thing, or was this another example of a touching-based-yet-non-sexual dispute? It seems like nothing at SoFi is ever sexual, which is hard to believe at a place that offers such great rates!!!
SoFi today announced its first-ever ‘SoFi Accelerate’ event series for ambitious millennials looking to break away, look beyond, and get ahead in their careers. SoFi Accelerate is a series of one-day retreats taking place just outside Chicago, New York City, and San Francisco that will give event attendees the time and space to think big—as well as the tools and structures to make their career goals happen.
Launching in September, the retreats will consist of creative visioning and leadership exercises, career strategy sessions with SoFi career advisors, and inspirational talks from unconventional thinkers like criminal justice reform advocate Adam Foss, Stanford professor and co-founder of Electronic Arts Dave Evans, and Gretchen Rubin, author of New York Times bestseller The Happiness Project, among others on how to set and achieve professional goals.
UNCONVENTIONAL VENUES SoFi Accelerate will offer its programming in unconventional retreat settings to encourage expansive views and open minds. These venues include the Chicago Botanic Garden (Glencoe, IL), Grounds for Sculpture (Hamilton Township, NJ), and Montalvo Arts Center (Saratoga, CA).
UNEXPECTED SPEAKERS A panel of experts from unexpected (i.e. outside of the financial planning realm) and highly relevant disciplines discuss how to create and execute on life, career, and financial goals. These speakers will include:
Ryan Holiday: Writer, media strategist, entrepreneur, and editor-at-large for the New York Observer
Adam Foss: Criminal justice reform advocate; co-founder of Roxbury CHOICE Program, a collaborative effort between defendants, the court, the probation department, and the D.A. to recast probation as a transformative experience rather than a punitive process
Gretchen Rubin: New York Times bestselling author of The Happiness Project and Happier at Home, and most recently, Better Than Before
Coss Marte: Ex-drug dealer, ex-convict, and founder of ConBody, a “prison-style” fitness boot camp with a loyal following of 10,000+ clients that employs formerly incarcerated individuals, giving ex-convicts stability and breaking down barriers between them and the general population
Today, Lending Club announced a new credit model in an email to investors. According to the email, this is the most advanced and predictive credit model ever used on the Lending Club platform. This is Lending Club’s fifth generation model that began to go in effect on September 8, 2017 and will roll out to all borrowers in the coming days.
The company outlines that the model further leverages machine learning along with the 10 years of data on 1.5 million borrowers they have accumulated. The new model is 24% better at differentiating the likelihood of a borrower charging off compared to the fourth generation model. It also includes more data points, and uses new custom attributes that Lending Club states are predictive in assessing risk.
Instead of using aggregates, the new model uses very granular views of credit data which discern individual borrower actions vs. a simple aggregate (e.g. a borrower’s credit card balance per credit card vs. his total credit card balance).
The model makes more extensive use of trended data, which provides insight into a borrower’s credit behavior over time rather than a snapshot into a borrower’s credit behavior at a point in time. Dozens of new custom variables like these improve the model’s predictive power and are proprietary to Lending Club.
The bids by tech firms Social Finance and Square for industrial loan company charters and federal deposit insurance have rekindled debate over two questions: What is the appropriate regulatory oversight for industrial loan companies, and should fintech platforms be allowed to compete with traditional banks?
Many of the arguments in this debate have less to do with either applicant’s qualifications than with traditional banks’ fear of new, innovative competitors, and with a decades-old turf war between the Federal Deposit Insurance Corp. and the Federal Reserve over the regulation of ILCs.
ILCs face greater restrictions on the types of deposits they are allowed to offer compared to commercial banks.
SoFi and Square are actually asking for more regulation, not less, by seeking a charter. This would put leading nonbank fintech providers on more equal regulatory ground with banks — something that mainstream financial institutions say they want. Getting an ILC would add yet another agency — the FDIC — to the regulatory labyrinth the companies must navigate. This should be considered a win for banking industry and consumer advocates who favor more transparency and oversight of fintechs.
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-P1 (“CLUB 2017-P1”). This is a $363.098 million consumer loan ABS transaction that is expected to close September 28, 2017.
Groundfloor, the only real estate crowdfunding platform that is open to non-accredited investors, today announced that it has entered into a whole loan purchase relationship with Direct Access Capital (DAC), a specialty finance company focused on providing liquidity to non-bank lenders of short term residential backed business loans. This marks Groundfloor’s first institutional partnership to enable the company to scale its loan origination volume and expand its product offerings over the next year. The shared target is $100 million in loans through 2018.
It’s been a busy few days for fintech startup PayJoy, which today announced that it closed a $6 million investment, only a few days after it reached another milestone.
Based in San Francisco, PayJoy hopes to make the smartphone a mainstream financial tool for those who cannot afford these devices. Established in 2015 at Stanford University, PayJoy provides payment plans to purchase smartphones for people with limited or no access to credit.
Betterment for Business, the technology-led 401(k) provider that aims to deliver better retirement outcomes and personalized advice, today announced the results of its new consumer retirement survey, the State of Consumer Retirement Advice. The results of the survey show that alongside the expansion of digital and employer-sponsored retirement advice resources, a majority of respondents (53 percent) report receiving absolutely no advice on their retirement investments. For the 47 percent of consumers who do seek retirement advice, 65 percent of this group utilize a financial advisor, the top source of advice among those consumers.
Less than half of respondents (42 percent) correctly identified the definition of a fiduciary; 20 percent of respondents believed that the terms “fiduciary” and “financial advisor” are synonymous, and 27 percent did not know what one was at all.
Nearly all (94 percent) of respondents in a 401(k) with auto-enrollment, which allows an employer to “enroll” an eligible employee in their plan unless the employee affirmatively elects otherwise, currently make contributions to their plan. In fact, for those who remained enrolled, 49 percent of respondents increased the contribution rate. Millennial respondents were most likely to remain enrolled in the plan after auto-enrollment. 78 percent of respondents that have access to an auto-escalation feature, which gradually increases plan contribution amounts over time, use it.
Targeted education could go a long way in setting consumers on the right path–given that 89 percent of respondents were offered a 401(k) match by employers, but 23 percent didn’t take full advantage of it. Of those 23 percent, 16 percent don’t max out their match, and 7 percent don’t know if they do.
“We believe there are two types of financial products: chutes and ladders. Ladders help you up, chutes push you down. We’ve used design to create loan and credit card ‘ladder’ products for the more than half of Americans who’ve traditionally been shut out of mainstream banking due to poor credit or income volatility,” said Sasha Orloff, co-founder and CEO of LendUp.
According to Fast Company, the award—one of the most sought-after in the design industry—is based on seven core factors of innovation: functionality, originality, beauty, sustainability, depth of user insight, cultural impact and business impact.
Studies have shown that 56 percent of Americans don’t have access to traditional financial services due to low credit scores or thin credit files1, and nearly half of U.S. families don’t have enough savings to cover a $400emergency expense2. As workplace trends shift from careers to jobs to the gig economy, 40 percent of Americans blame irregular work schedules for volatile monthly incomes, with paychecks sometimes varying by more than 30 percent3.
Small business lenders have unprecedented opportunities ahead of them, according to Rohit Arora, the CEO of Biz2Credit.
The only thing is, not all lenders are positioned to seize these opportunities. The ones that are, says Arora, are the lenders that understand two things. “They understand the changing expectations of today’s borrowers. They also understand how to leverage new technology,” Arora explains.
Biz2Credit recently analyzed 30,000 small business credit applications. Based on the analysis, one of the top expectations small business borrowers have is for 24/7 customer availability. In fact, 51 percent of customer application activity occurred outside of regular banking hours or on weekends.
Advanced Credit Repair Technology – Last year alone, Lexington Law helped clients remove more than 9 million negative items from their credit reports. This wouldn’t have been possible without advanced technology.
Growing Focus on Artificial Intelligence
Emergence of Challenger Banks – If there’s one thing we know about Millennials, they’ve shown an affinity for online banking and “challenger banks.” On a related note, there’s been a massive increase in the use of virtual wallets and alternative forms of payment. These two trends go hand-in-hand and will support each other.
XRF’s 14.61% institutional ownership seems enough to cause large share price movements in the case of significant share sell-off or acquisitions by institutions, particularly when there is a low level of public shares available on the market to trade.
XRF insiders hold a significant stake of 16.89% in the company.
A big stake of 38.57% in XRF is held by the general public.
Zopa users are reporting significant delays when trying to sell their loans, with the firm battling against slow speeds on its platform.
At present, users trying to sell their loans on the site are currently told to expect delays beyond the standard 20-day sales window. The platform says: “We will continue to try and sell your loans for 20 days, but there is no guarantee that you will be able to access your money before your loans mature.”
Fellow Moneywise reader John Mitchell is an existing Zopa customer and wished to transfer his holdings to its IF Isa. When the Isa product was launched, customers were told they would soon be able to sell their existing Zopa loans – without incurring a 1% sales fee – before purchasing new loans within the Isa wrapper.
Three months on, and Zopa is yet to offer these fee-free sales to its customers.
Moneywise reader Jonathan Yonge, who manages his own portfolio of assets for a living, is one of the customers that has been affected by the issue. He currently has around £220,000 invested in the Zopa Access product and a further £100,000 in Zopa Plus. Zopa Access has now been closed to new investors and he has been unable to sell most of his loans.
Goldman Sachs is making its first investment in the British consumer lender market by providing £100m of debt and equity financing to Neyber, a fintech start-up providing loans that are repaid out of people’s salaries.
Founded by two former Goldman Sachs investment bankers five years ago, Neyber partners with companies to offer their employees loans at lower rates than credit cards or payday lenders.
The company says its loans are less likely to default because of the security of deducting repayments directly from a borrower’s salary, and the extra information it gains about its customers by tapping into their employer’s payroll systems.
The government launched the Innovative Finance ISA last year to give savers a tax-efficient way to participate in peer-to-peer lending. Official figures for the last tax year showed low take-up of the new ISA so far, with just £17 million invested. But there are renewable projects available through this route so it could be worth a look.
A crowdfunding platform called Abundance Investments launched what it said was the UK’s first green energy ISA in 2016. It allowed customers to invest directly in renewable energy projects through a range of bonds, and predicted a 6% annual return.
A Beijing court on Tuesday sentenced the architect of the $9 billion Ezubao online financial scam to life imprisonment, and handed down jail time to 26 others, marking the close to one of the biggest Ponzi schemes in modern Chinese history.
Beijing First Intermediate People’s Court sentenced Ding Ning – chairman of Anhui Yucheng Holdings Group that launched Ezubao in 2014 – to life in prison and fined him 100 million yuan ($15.29 million) for crimes including illegal fundraising, illegal gun possession and smuggling precious metals.
Ding Dian, the chairman’s brother, was also sentenced to life, while Zhang Min, Yucheng’s president, and 24 others were sentenced to imprisonment for 3 to 15 years, according to an article on the Beijing Courts social media account.
Pittsburgh-based Pineapple Payments, which offers omnichannel payment processing technology, has secured a $35 million growth equity commitment from Providence Strategic Growth (PSG), the an affiliate of Providence Equity Partners, a global private equity firm with more than $50 billion in assets under management.
PayJoy, which offers smartphone financing for underserved consumers, has closed $6 million of new investment with strategic partners that will help the San Francisco-based company, which has offices in Mexico City, to further expand throughout Latin America, Asia and Africa.
Finnish B2BPay earned the top spot among hundreds of entries in its segment in BBVA’s Open Talent competition “because of the way their solution enables SME businesses to grow internationally and trade with greater ease.”
In his first interview since being appointed chief executive of the nation’s largest retail superannuation fund, MLC Super, Matthew Lawrance told The Australian that the industry needed to lift its standards.
He also called for more balanced media commentary that would help to inform the public rather than instil fear.
“Our customers want more targeted support and advice across banking and wealth management, and so we need to invest to develop new and innovative solutions that give them the ability to engage us — whenever, however, and through whatever means suits them, whether it be digital or face-to-face,” Mr Lawrance said.
NAB is currently developing its robo-advice capabilities, with more details to be released in the coming months, but Mr Lawrance says it won’t replace traditional face-to-face advice. Rather, the two will complement each other.
There is no doubt that future growth would also be sustained by the performance of the 50-million plus strong SME sector, which employs close to 40 percent of India’s total workforce and contributes 45 percent of the total industrial output.
A major challenge that could stymie SME sector growth is the lack of adequate and timely funding.
Fintech lenders use non-conventional data sources for underwriting
This movement makes available data pertaining to these businesses which new-age Fintech lenders can use to accurately assess the SMEs. For instance, an SME registered under GST files documentation that reveals their sales trajectory, income sources, inventory sold, credit cycles, etc.
Banks want to diversity loan books without scaling OPEX
Banks have large balance sheets from which they churn loans, catering to millions of customers. However, traditional underwriting practices have prevented them from effectively underwriting certain SME segments.
News Comments Today’s main news: OnDeck celebrates 10 years of online lending with $7B+ milestone.SoFi responds to sexual harassment allegations, wage lawsuits.RateSetter hires Dave Bibby for North of England.Assetz Capital gets FCA approval.Zopa vows to improve loan sale times.China bans ICOs. Today’s main analysis: OneMain deal analysis.International P2P lending volumes for August 2017. Today’s thought-provoking […]
RateSetter hires Dave Bibby for North of England. AT: “I’m seeing a lot of personnel migrations between banking and online lending. It seems to be going both ways, but mostly toward online lending. This is a good thing. If online lenders want to grow their businesses to really compete with banks, it makes sense to hire the bankers.”
In 2007, the first online loans from OnDeck to small businesses in the United States created a new type of commercial lender, one that believed the Internet could revolutionize how small business owners access capital. Today, OnDeck celebrates a decade of innovation on behalf of entrepreneurs, having emerged as the nation’s largest online lender to small businesses. To date, OnDeck has provided over $7 billion in capital to more than 70,000 customers in 700 different industries across the United States, Canada and Australia.
Flash forward to 2017 and the company has now provided small businesses more than $7 billion in capital. In the retail industry alone, OnDeck has lent more than $1 billion online.
“OnDeck started lending online to small businesses ten years ago with a customer-first philosophy and a relentless commitment to providing capital online with speed, efficiency and top-quality service to America’s small business owners. This is still the hallmark of our business today as we celebrate a decade of innovation on behalf of small business owners, truly the lifeblood of our economy.”
Now, SoFi CEO Mike Cagney is sharing more information about those suits, which were filed by the same lawyer, Robert Ottinger. In a new post, he also stresses that he’s taking the complaints seriously, writing:
“While we’re confident in our positions in these cases, we take these types of claims seriously. Our legal team is hard at work preparing our responses, and as part of that work, we’ve had many discussions with current and former employees about these issues.
Based on these discussions, we’ve discovered that the same lawyer has been trying to collect information relating to alleged sexual harassment at the company, and that he has several people who are prepared to formally allege they were the victims of or witnesses to improper activity at our Healdsburg operations office.
To be blunt, that kind of behavior has no place at SoFi, and we’re not going to tolerate it.”
Social Finance Inc., the hot online lender known as SoFi, has launched an internal investigation into claims of sexual harassment at the San Francisco company.
In a post on the company blog, co-founder and Chief Executive Mike Cagney wrote Friday that outside attorneys are conducting an investigation in response to a lawsuit filed last month and amended this week by a former employee.
The executive board of ride-hailing company Uber recently hired a new chief executive to replace Travis Kalanick, who left amid complaints of sexual harassment, discrimination, bullying and retaliation at the San Francisco-based firm.
In our recent earnings overview, we highlighted OneMain Financial as the pack leader across non-bank lenders. And it shows – initially slated for $639 Mn, OneMain increased the deal size by almost 50% to $947 Mn due to strong investor demand. OneMain differentiates via their high touch approach, unique distribution channels, and strong servicing, and decades of historical underwriting data.
Although OMFIT 2017-1’s structure is much closer to SLFT 2017-A than OMFIT 2016-3, its senior tranche has a much shorter WAL than both. OMFIT 2017-1’s A-2 floater pays LIBOR + 80bps with no floor or cap. This introduces a layer of interest rate risk because the underlying loans are not variable rate. At the same time, the floater enables investors to guard against rising rates.
Amortization Triggers and Revolving Period
An early amortization event will be triggered if OMFIT’s ANL is greater than 17% for any rolling 3-month period. As you can see, OneMain typically has a generous cushion between its 1-month ANL and the 17% trigger.
The year 2016 will be forever remembered as the annus horribilis in the marketplace lending industry in the US.
According to Pitchbook, online lending equity investment was $2.3 billion in the USA in 2016. Through August 3rd of this year the total stood at $2.5 billion. While this is still down from the heady days of 2015 when $5.6 billion came flowing into the industry we are having a much better year in 2017 than in 2016.
Here are some interesting deals that have closed so far in 2017:
SoFi raised $500 million in a Series F round led by Silver Lake.
Kabbage raised $250 million in a Series F led by SoftBank.
Bread raised $126 million in a Series B led by Menlo Ventures.
Funding Circle raised $100 million in a Series F led by Accel Partners.
Upgrade raised $60 million in a Series A, the largest ever Series A for a US fintech company.
The biggest segment of online lending is still unsecured consumer loans. And with millennials now coming into their peak borrowing years this will provide a significant tailwind for the industry in the US.
One of the struggles when lending to an SME is the cost that goes into making a lending decision. It is estimated that at regional and community banks, $4-5K in operational costs go into processing each loan under $100K, leaving very little margin for bad loan decisions. In fact, these small loans take nearly as much time and manpower to process as much bigger loans. This is where automation and artificial intelligence (AI) can come into play.
Unlike traditional models of underwriting, which focus on only a handful of credit attributes, machine learning can analyze thousands of data pointsfrom various sources, which allows for a bank to model credit risk for SMEs more accurately than ever before. These machine learning techniques are able to radically outperform traditional scorecards in SME lending. In the not-distant future, a bank could use robots and predictive AI to 100% automate lending decisions in cases where the SME is under a certain amount and the predictive analytics give the applicant a certain baseline score.
Upgrade’s founders are Renaud LaPlanche and Soul Htite. This may not be the first time you’ve heard these names used together because they were both co-founders of LendingClub, America’s largest loan marketplace.
LendingClub has arranged over 28 billion dollars in loans to over 1.5 million customers. Htite also founded one of China’s largest marketplace lending platforms, Dianrong.
So, both founders have a good track record in the online lending business.
Upgrade’s application process is online, and the personal loan structure is pretty standard. It offers term loans with fixed interest rates and charges an origination fee. All loans are unsecured, so no collateral is required.
A differentiating factor about the company is in their plan to help people manage and improve their credit. If applicants are denied, they will have the necessary support to help them improve their credit and work towards getting approved in the future.
Easy and fast online application which doesn’t hurt your credit score
Plans to provide credit monitoring, alerts, and mentoring
Can pick your payment due date
No prepayment penalties
Founders very successful in past online lending ventures
Competitive fixed interest rates
Funds are quickly transferred to bank account upon approval
Company is still very new
Charges an origination fee
Doesn’t offer lowest-advertised interest rate range on the market
Only offers fixed interest rates, no variable rates
Local officials are supporting efforts to limit interest rates on advance or “payday” loans in Ohio, which are the highest on average in the country — close to 600 percent; two or three times higher than neighboring states.
That bill — currently in committee in the Ohio Statehouse — modifies the Short-Term Loan Act of 2008, which capped interest rates at 28 percent but also contained a loophole allowing lenders to keep charging whatever fees they want through another loan law.
One in 10 Ohioans — about a million people — have borrowed from a payday lender, according to a May study from the Pew Charitable Trusts. In Ohio, the average APR is 591 percent, meaning a $300, five-month loan could end up costing Ohioans between $780 and $880, according to the study.
When Kevin Karrels first joined the digital team at First Tennessee, he knew a drastic overhaul was in order.
“I inherited a broken and weak digital platform,” said Karrels, senior vice president and digital channel strategy executive at the $29.4 billion-asset bank.
Karrels also realized the online and mobile experience was not up to snuff, especially when it came to meeting the expectations of digital-savvy millennial consumers.
For that reason, First Tennessee ditched its multiple vendor relationships to revamp both online and mobile with D3 Banking, a relatively new entrant in the banking technology space; it was founded in 2008.
Cordray’s term as the bureau’s first and only director doesn’t expire until next summer. But there is widespread speculation that he will run for the Democratic nomination for governor of his home state of Ohio.
His departure could leave the controversial watchdog agency, created in the aftermath of the 2008 financial crisis, in limbo for months and jeopardize regulations covering consumer arbitration clauses and payday lending.
At the risk of sounding cliché, I’m a millennial with almost no investing experience. I have a 401(k) retirement account, but all my non-retirement savings has been stashed in a standard savings account from Bank of America.
Plus, I knew there was a possible alternative. As someone plugged into the tech world (and someone who listens to a lot of podcasts with ads), I’d been hearing about so-called robo-advisors, apps that automatically manage and invest your money for you. The meeting with the financial advisor got me intrigued about whether these apps might offer a better alternative. So I went home that night and downloaded the two most popular ones, Wealthfront and Betterment.
Not only did the apps take much less time than the human advisor to offer similar advice, they came with a big cost advantage. Wealthfront manages your first $10,000 for free. After that, both Betterment and Wealthfront charge an annual fee equal to 0.25% of your investments.
One other benefit: You can start an account with either service by investing just $500, which is significantly less than what traditional financial advisors typically require.
Race car driver Scott Tucker and lawyer Timothy Muir are slated to stand trial soon on charges they ran an illegal $2 billion payday loan operation that they tried to hide behind the sovereign immunity of three Native American tribes, proceedings that are expected to intensify scrutiny of how tribes participate in the business of high-interest online lending.
For originators, Optimal Blue delivers an Enterprise Secondary Marketing Solution that completely automates their operations including product and pricing, lock desk workflow, pipeline risk management, secondary market commitment and delivery, and more.
For investors, Optimal Blue provides an Investor Network Management Solution that automates compliance, product and pricing distribution, marketing, and business intelligence capabilities.
For providers, Optimal Blue’s best-in-class eCommerce platform leverages state-of-the-art API capabilities to integrate with their leading technology and service solutions used by originators and investors throughout the loan life cycle – wherever, whenever it matters most.
Responding to reports that the Consumer Financial Protection Bureau’s (CFPB) final payday loan rule will be narrower in its coverage than originally proposed, Rep. Jeb Hensarling (R-TX) is questioning CFPB Director Richard Cordray on the reported change.
The CFPB’s original proposal established limitations for a “covered loan” which could be either a short-term consumer loan with a term of 45 days or less or a loan with a term of more than 45 days where the total cost of credit exceeds an annual rate of 36 percent along with other qualifications.
Online lender SoFi announced this week its program, SoFi Accelerate, will be heading to Chicago later this month. According to the lending platform, SoFi Accelerator is the first-of-its-kind career incubator that gives “ambitious” professionals the time and space to think big – and the tools and structures to make it happen.
Nowadays, we are seeing an increase in platforms providing investors with the chance to join forces and capitalize on real estate properties to diversify and enhance their investment portfolio.
Not only are you able to join other investors in launching a new company and receive the benefits from those companies, now “you are also able to choose from multiple investment opportunities and gain the full return on investment targeted at the beginning of your investment process” says, Craig Cecilio, CEO at DiversyFund.
You want to look for a platform with tools that allow you to:
Analyze an investment opportunity the same way the platform is analyzing it. Trust a company that shows you all their research, pictures, market studies, etc.
Keep a close eye on the development process of an investment property. Make sure they send you regular updates, so you can feel comfortable every month until payout time.
Have a profile dashboard where you can keep track of your earnings as well as new opportunities in the market. A platform you can trust is always creating new ways to help its investors grow their earnings.
Be virtually anywhere in the world, but still able to invest when the time is right for you. The world is a lot smaller these days, thanks to technology itself. Your investments should be able to be with you and travel with you anywhere you go.
The report concluded that fintech lending has “penetrated areas that could benefit from additional credit supply, such as areas that lose bank branches and those in highly concentrated banking markets,” and that the use of alternative information sources has allowed some borrowers who would be classified as subprime by traditional criteria to be slotted into “better” loan grades and therefore receive lower-priced credit.
The report relied upon five sources of information for its analysis: data on loans that were originated through an online alternative channel (specifically, loan-level data from the Lending Club platform), data on loans that were originated from traditional banking channels, consumer credit panel data, banking market concentration data and bank branch information, and economic factors.
The Federal Reserve Bank of Philadelphia noted an increasing disparity between the rating grades of Lending Club and FICO scores. While the lender’s rating grades initially tracked the FICO scores of borrowers (with roughly 80 percent correlation in 2007), the similarities have dropped to only 35 percent in 2016, seeming to indicate that Lending Club is relying more on other information.
Overall, the study found that Lending Club’s rating grades have served as a good predictor for the borrowers’ probability of becoming at least 60 days past due within the 12-month period following the loan origination date, “despite the fact that the rating grades have a low correlation with the FICO scores.”
Diversification is important because it spreads risk across multiple types of investments within a single portfolio.
Asset allocation is important because it reduces the risk of an outsized impact on an investor’s portfolio from a market moving change in one asset class. In addition, asset allocation takes into account each individual investor’s risk tolerance, time horizon and investment goals.
Real estate is an important part of a well-diversified portfolio, and the advent of online real estate investing makes it easy, convenient, and transparent for all investors to add real estate to their investment strategy.
Since opening its first East Coast office in Chesterfield County in late 2015, LendUp Global Inc. has hired 50 employees locally, and company officials say they expect to add more jobs in the area as the company grows.
Nelson and other LendUp managers say the company expects to broaden its hiring in the Richmond area soon to include more engineers and technology specialists.
California-based LendUp Global Inc., is an example of a social justice enterprise that has the potential to help ameliorate the lives of millions of poor people — without a single dollar of government funding.
They conceived the idea of tapping the emerging FinTech industry to make small loans to an estimated 100 million Americans, mostly poor with low credit ratings and income volatility, who cannot get loans from traditional banks. In early 2016, LendUp raised $150 million in venture capital with the goal of becoming a better small-loan provider.
As with payday lenders, LendUp’s interest rates are extremely high on small, short-term loans. A $250 loan repayable within a month would carry a finance charge of $44, equivalent to an annualized interest rate of 214 percent. Interest payments must cover the transaction costs of making the loans, after all. They also reflect the increased risk on non-payment by low credit-score borrowers.
Earlier this year, LendUp passed the $1 billion mark in loans provided. It has made more than 3.5 million loans.
LendingTree recently announced a pair of changes to its management, promoting its chief financial officer to its board of directors and replacing him with the company’s senior vice president of corporate development.
Gabe Dalporto, who served as the LendingTree’s CFO since 2015 and who previously served as the company’s chief marketing officer from March 2011 to June 2015, was promoted to the company’s board of directors.
Replacing Dalporto as CFO will be J.D. Moriarty, who joined the company earlier this year as SVP of corporate development.
Today, Assetz Capital, one of the UK’s largest Peer-to-Peer platforms, announced it has received full authorisation from the UK regulator, the Financial Conduct Authority (FCA).
As the UK’s second largest peer-to-peer business and property lending platform, to date it has lent more than £316 million to businesses nationwide. Following its successful FCA application, Assetz Capital is now in the final stages of completing its work on its Innovative Finance ISA (IFISA), which will be ready for roll out in Q4 2017.
RATESETTER has helped fuel a locomotive repair specialist best known for overhauling the famous Flying Scotsman.
Investors on the peer-to-peer platform have helped fund a £420,000 loan to restorer Riley and Son to help restructure existing debt and improve cashflow.
The company – one of only three in the UK able to carry out locomotive repair work on the scale of The Flying Scotsman – which is 70ft long, 13ft high and weighs around 10 tonnes – had been given 18 months’ notice to move premises.
Peer-to-peer Isas failed to gain much popularity in their first year, while the amount held in cash Isas fell by nearly £20 billion.
Just 2,000 Innovative Finance Isa accounts were opened in the tax year 2016/2017, according to the latest statistics from HMRC.
Across the 2,000 IF Isa accounts opened, £17 million worth was subscribed. The average subscription per account was £8,500 – about the same as the average stocks and shares Isa account subscription.
Overall, the amount held in Isas in 2016/17 fell to £61.5 billion, compared with £80 billion the previous tax year. This decline was largely driven by a steep fall in the amount held in cash Isas. In 2015/16, a total of £58.7 billion was held in cash Isas; in the latest tax year this fell by a third to £39 billion.Across the 2,000 IF Isa accounts opened, £17 million worth was subscribed. The average subscription per account was £8,500 – about the same as the average stocks and shares Isa account subscription.
The UK’s peer-to-peer lenders are shifting towards passive investment strategies. Funding Circle, the leading online marketplace for small business loans, called a halt to manual loan selection at the end of August. Henceforth it will funnel customers into one of two passive investment accounts, with a view to generating more consistent returns for all of its investors.
The change has earned the platform a number of disgruntled investors. One investor, commenting on an AltFi article, called it “the last straw”. “I’ll be withdrawing all my funds from FC and placing them on more attractive P2P platforms,” he wrote.
Investors in P2P Global Investments (P2P) are no longer being compensated for the risks they are taking, according to Canaccord.
Alan Brierley and Brian Newell, analysts at Canaccord, have downgraded the peer-to-peer lending trust from ‘hold’ to ‘sell’ because they expect returns will stay below the 6% to 8% target until the end of 2018.
Atomico, the venture fund set up by Skype founder Niklas Zennstrom, led the £18.5m series B round with existing investors Ribbit Capital, Mosaic Ventures and Revolutionary (ad)Ventures also participating.
It brings total funding for the startup – which is also backed by the entrepreneurs behind Transferwise and Funding Circle Taavet Hinrikus and Samir Desai respectively – to £27.5m. City A.M. exclusively revealed its first major round of funding earlier this year.
Atomico, the venture fund set up by Skype founder Niklas Zennstrom, led the £18.5m series B round with existing investors Ribbit Capital, Mosaic Ventures and Revolutionary (ad)Ventures also participating.
It brings total funding for the startup – which is also backed by the entrepreneurs behind Transferwise and Funding Circle Taavet Hinrikus and Samir Desai respectively – to £27.5m. City A.M. exclusively revealed its first major round of funding earlier this year.
Global online payments leader PayPal has inducted five new FinTech startups into its PayPal Incubator in Chennai.
The give startups to be selected are Finbox, Neoeyed, Paymatrix, Scalend and Tybo.
“In its 5th year, the PayPal Incubator has received an overwhelming response with over 250 applications from early stage FinTech startups – a 150% growth from last year, reflecting both the need for an incubation program, as well as the FinTech industry’s potential,” said Guru Bhat, GM Technology & Head of Engineering – PayPal.
FUNDING Circle’s upcoming shift away from manual lending will soon mean the three biggest peer-to-peer lenders in the UK only offer auto-bid options, but there is still plenty of choice for investors still looking to self-select their loans.
The manual versus auto-bid debate is important in P2P as it dictates the level of due diligence and diversification an investor will need to conduct.
PEER-TO-PEER lending poses little threat to the traditional banking business model, new research claims.
A report by the Bank for International Settlements – an international financial institution owned by central banks – looks at ways in which fintech could change how mainstream lenders and regulators operate.
The report suggests this scenario, where P2P becomes a primary source of lending, is unlikely to become significant in the short to medium term.
It is worth reminding ourselves what an important part SMEs play in the UK economy. At the start of 2016, there were approximately 5.5 million private sector businesses in the UK, of which 99.9% fell within the SME definition. These businesses employ 15.7 million people, accounting for 60% of all private sector employment in the UK.
The launch of the government portal, enabling SMEs declined by high street banks to be referred to an alternative lender, will hopefully help in terms of access, although the Treasury has commissioned an early review of bank referrals to the portal as usage has been lower than anticipated. Meanwhile, banks stand ready to lend and there are also many new lenders on the market—start ups, peer to peer platforms, crowdfunders, fintechs—offering innovative products, with a desire to provide finance for SMEs and encourage entrepreneurs.
Manchester has been flagged as the UK’s new buy to let hotspot following a boost from new developments, according to the latest report from LendInvest.
Following the decline that has marred the buy to let sector in London, investors have been seeking a new location to turn to. Manchester has seen strong growth in both culture and economy, as well as through infrastructure. The report found that Manchester has the fastest rental growth in the UK, with rental prices up 7.53 per cent in the last year. The city is also ranked number one for rental yields in the UK, offering average returns of 6.11 per cent for landlords and buy to let investors.
China on Monday banned and deemed illegal the practice of raising funds through launches of token-based digital currencies.
Individuals and organizations that have completed ICO fundraisings should make arrangements to return funds, said a joint statement from the People’s Bank of China (PBOC), the securities and banking regulators and other government departments that was posted on the central bank’s website.
In total, $2.32 billion has been raised through ICOs, with $2.16 billion of that being raised since the start of 2017, according to cryptocurrency analysis website Cryptocompare.
By creating and issuing digital tokens, entrepreneurs can raise large sums quickly — sometimes hundreds of millions of dollars in minutes — with little or no regulatory oversight. But unlike traditional fundraising, token holders are generally not given any share in the particular project, nor any security.
In a statement yesterday, the National Internet Finance Association of China warned that ICOs may be using misleading information as part of fundraising campaigns, urging investors to proceed with extreme caution. The group, which works with government agencies on regulatory matters, further stated its intention to toughen security measures.
To promote the exchange of financial and technological fields between China and the United States, local time from August 23 to 24, by the Peking University Digital Finance Research Center (IDF) and the Shanghai New Financial Research Institute (SFI) organized by the US financial technology delegation , To San Francisco financial technology enterprises and regulatory agencies to visit and study.
This week, as Sthlm Tech Fest gathered the Swedish tech elite under one roof, fintech stood out as a key theme. Recent breakthroughs by homegrown payment giants like iZettle, Klarna and Bambora catalyzed a vivid discussion.
Izettle co-founder and CEO Jacob de Geer pointed towards key fintech trends: increased consolidation, lower startup valuations, and the importance of making money on other things than just payments.
This week, as Sthlm Tech Fest gathered the Swedish tech elite under one roof, fintech stood out as a key theme. Recent breakthroughs by homegrown payment giants like iZettle, Klarna and Bambora catalyzed a vivid discussion.
Izettle co-founder and CEO Jacob de Geer pointed towards key fintech trends: increased consolidation, lower startup valuations, and the importance of making money on other things than just payments.
Banks operating in the U.K. could face approximately €15 billion ($17.8 billion) in restructuring expenses, plus potentially another €40 billion in extra capital requirements, according to a study by Boston Consulting Group Inc. and Clifford Chance LLP. Some of these costs could be passed on to companies.
Small and medium-size enterprises are particularly exposed to higher charges, as they often rely on a single bank and lack contingency plans to deal with the fallout from the U.K.’s departure from the European Union. Firms with annual revenue of up to €10 million are defined as small businesses. Medium-size ones earn maximum revenue of €50 million, according to the EU Commission.
U.K. banks in June charged SMEs an average of 3.89% for an overdraft facility and 3.12% for a loan, according to the Bank of England. A year ago, the rates were 4.11% and 3.36%, respectively.
New legislation on the European financial markets, MiFID II, is expected to come into force on January 3rd 2018 and will impact Fintech’s future. Through regulating trading activities and enhancing investors protection, it will aid the creation of more transparent and robust financial markets. It will also extend the regulatory coverage to non-equity products, including cash and derivative instruments in fixed income, foreign exchange and commodities.
The amended directive will also apply to more industry stakeholders engaged in investment services, such as investment banks, portfolio managers, brokers and market makers.
Kreditech has a controversial business model. The company’s 29-year-old chief executive Alexander Graubner-Müller spends a good deal of time explaining how the company rates clients and gives them credit.
Kreditech looks at potential borrowers’ Facebook friendships, among other factors, to score their credit. Based on that score, the company might offer them a loan – but in some cases with double-digit interest, which critics say is excessively high.
But that hasn’t kept Kreditech from securing the kind of high-caliber investors few German fintech firms can match. Besides World Bank’s IFC, the company counts US private equity firm J.C. Flowers among its backers, as well as Paypal founder and Donald Trump supporter Peter Thiel.
Payment services provider PayU, owned by the South African media conglomerate Naspers, spent €110 million ($129.9 million) on a roughly one-third stake.
Disruption is not just happening to retail, hospitality and taxis. It’s also happening in financial services, especially banks, where borrowers and lenders are finding ways to engage, cutting traditional players out of the picture.
At best, in this scenario, both investors and borrowers can end up winning, with better lending rates and higher returns.
Funds are available for personal commitments such as car and housing loans and refinancing existing debts as well as those seeking small business loans.
One of the largest companies in the market is SocietyOne. It offer consumer loans from $5000 up to $50,000 for up to five years with principal and interest repayments fortnightly or monthly. It also lends to the agricultural sector. SocietyOne does not pool loans like some industry rivals; rather investors can select individual loans in which to invest.
At RateSetter, supply and demand for products determine the rates of return. Minimum investment is just $10, for terms of 1 month out to five years.
ThinCats Australia deals in secured business loans for Australian companies. Lenders bid for amounts for fixed rate loans, with a minimum bid of $1000, the maximum being the value of the loan.
New research from Businessloans.com.au has found that small businesses are embracing peer-to-peer lending, crowdfunding and online loans. However, while businesses are looking outside the traditional and applying with fintech lenders, not all SMEs are getting the loans they hope for.
Not for profit Good Shepherd Microfinance says the fifth anniversary of its low or no-interest Good Money shops, now operating in three states, has proved the worth of the three-way partnership between business, community and government.
Since beginning as a pilot store in Victoria, Good Money has grown to seven Australian stores located in Victoria, South Australia and Queensland and is the result of a partnership between banking group NAB, state governments and community organisation Good Shepherd Microfinance.
Good Shepherd Microfinance CEO Adam Mooney told Pro Bono News the stores had provided more than 5,800 low or no-low interest loans to “vulnerable Australians” living on a low income.
Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards has underlined its market dominance by becoming the largest organized distributor of secured mortgages in the country. It is currently facilitating USD 30- 40Mn (INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, home against property and business loan.
An incubator for non-profit startups, backed by big names like MakeMyTrip founder Deep Kalra and Paytm chief Vijay Shekhar Sharma, has picked 10 early-stage startups for a six-month programme.
The applicants include non-profit startups by graduates from top institutions such as Harvard, Yale, Princeton, Stanford, Oxford, Indian Institutes of Technology and Indian Institutes of Management, the statement said.
It was early 2016 and Rajiv Anand, the Executive Director of Retail Banking at Axis Bank, was hard at work with his team to figure out the impact of the digital world on banking. Among the questions he asked his team was whether the present day consumers know how a bank would look in the future.
His team realised that the answers are not going to come from their bank, but from the people outside his company. Young people in urban centres are no longer going to be in a physical bank branch, but are going to be exploring the bank digitally.
One can say that in July 2017, the marriage between Axis Bank and startups was the best move that happened in the banking sector since a decade. Axis Bank’s acquisition of mobile wallet company FreeCharge for Rs 385 crore in an all-cash deal has taken that relationship further, quite possibly opening the doors to more such deals in the future.
Therefore Axis Banks’s first bunch of startups which are S2Pay, FintechLabs, Perpule, Pally, Paymatrix, and Gieom are indeed defining how banks should function in the future. Of these startups Pally, FintechLabs and Gieom have been selected for long-term engagements with the bank.
YES Bank has tied up with BankBazaar to showcase loan products, including personal loans, home loans, and car loans. The big daddy of them all, State Bank of India, whose balance sheet size is Rs 41 lakh crore, has also entered into the agreement with BankBazaar to display its home loan products on bankbazaar.com and initiate door-step delivery.
WikiLeaks recently published a report claiming that the Central Intelligence Agency, the CIA, in its cyber spying efforts may have compromised Aadhaar data. The report alleges that the CIA is using tools devised by US-based technology provider Cross Match Technologies for cyber spying. However, the official sources have rubbished the reports.
Indian startup OYO announced the launch of OYO Asset Management Service. The service is geared towards building a nationwide network of hotels through a partnership with real estate asset owners.
Mumbai-based technology company Zeta has started partnering with banks to deploy solutions around BharatQR, Unified Payments Interface, and card payments to capitalise on the spurt in digital transactions for retail payments.
XSTOK PayLater card is a “Purchase Now, Pay Later” payment option enabled through a line of credit sanctioned to a buyer (member), for making purchases on XSTOK.com.
Two years of fin tech driven reach has helped banks grow about 15 to 20 per cent indicating that banks’ dependence on `feet-on-street’ to campaign for loans may recede in a few years. Bankers said nearly a third of their customers below 30 years were on-boarded through the digital platform.
Reserve Bank of India data showed retail loans grew 15 per cent while overall banking credit grew 4.7 per cent on a year-on-year (YoY) basis. Personal loans grew the most at 35.7 per cent followed by credit card outstanding at over 32.5 per cent. Loans to weaker sections also grew over 11 per cent on a YoY basis.
If Fintech is such a big revolution, why not seize the opportunity? This is exactly what the emerging start-ups of India are doing and consequently, providing efficient and cheaper financial services with Paytm, Mobikwik, Freecharge, Bank Bazaar etc. leading the way and several others following in to test their Fintech ideas. To share some numbers, the first quarter of 2017 saw global investments in Fintech, to the tune of approximately $3 billion which includes a $1.4 billion investment in Indian giant- Paytm! PwC estimates that within the next 3-5 years, the total investment in Fintech would rise to a whopping $150 bn globally. Needless to say, the age of Fintech entrepreneurs is here to stay!
Let us now explore the Fintech ecosystem and the sectors in Fintech which will roll the next set of innovations!
Alternate lending- Traditional banking industry found it unprofitable to lend to small entrepreneurs. Fintech entrepreneurs took advantage of this opportunity by diving into Peer to peer (P2P) based lending and building web platforms to bring together the lenders and borrowers at lower interest rates.
Robo advisory- Earlier intermediaries played an important role between the stock market and the investors. Many times this led to non-traceable and inefficient transactions. Robo advisory will make the stock market easier to access, transparent and traceable and give more value addition to the smarter investors.
Digital payments- Fintech start-ups have increased the speed and convenience of payments. Mobile wallets have already replaced traditional wallets in a lot of places and will penetrate further with better and faster payment options.
Insurance sector- Currently, we can find various online market places where consumers can compare their insurance policies and take prudent decisions.
UangTeman, an Indonesian firm offering online loans of up to USD 350, recently announced it has secured USD 12 million in Series A funding from Thailand’s K2 Venture Capital, US-based Draper Associates, Indonesia’s Alpha JWC Ventures, Malaysian angel investor Terrence Teong Chee Hooi and multiple unidentified local investors. Hong Kong-based STI Financial Group also lent the firm an undisclosed amount. UangTeman plans to invest a portion of the funding in research and development offices in India and Singapore.
BORROWERS are finding themselves with more options from a financial technology (fintech) startup that aims to secure loan refinancing business worth Bt3.4 billion in transaction value by the end of this year.
The operator, refinn.com, is looking to get 1,700 debtors on board to secure the year-end goal.
Three Colombian fintech startups have been selected to participate in an exclusive accelerator program coordinated by Washington-based venture capital firm Village Capital that will award a $75,000 USD investment to top-performing early-stage Latin American companies.
Payment platform ePayco, short-term loan provider RapiCredit, and tuition savings facilitator ESCALA Educación are the three Colombian companies that have been chosen to compete in the first ever regional “Village Capital FinTech – Latin America 2017” program.
Along with these finalists, eight other fintech startups from across Latin America were picked out of the nearly 100 companies that applied for the program, which is supported by PayPal, Citibanamex, and BlackRock in addition to Village Capital.
News Comments Today’s main news: RateSetter tops 2B GBP in lending. P2P Global Investments holds steady. P2P Finance Association reports new lending growth. One of China’s largest P2P lenders quits. BNI Europa invests 15M Euro in Creditshelf. Marqeta, Visa partner on global payments. Prospa secures $20M debt facility. Today’s main analysis: Bank and credit card issuer charge-off trends. Today’s thought-provoking articles: […]
Bank, credit card issue charge-off trends. AT: “Are we beginning to see the decline in credit card usage? Online and mobile payments could kill credit cards in the long run as consumers realize the convenience and transparency of the tech while credit card loan practices continue to be non-transparent and expensive for consumers.”
Discover reported a 55% increase in loan loss reserves citing re-normalization of credit performance, an increased supply of consumer credit, and an increase in consumer leverage. We also see observe increases in loan loss reserves from Synchrony Financial (30%), American Express (26%), and Capital One (13%).
Outlook for Consumer Lending
The backdrop for consumer lending businesses is strong. Although delinquencies have picked up, originators remain compensated for taking on credit risk. The ROE for Discover and American Express are both over 20% as compared to C, JPM, WFC, and BAC where ROE remains stubbornly low in the 6 to 11% range. Also, consumer loan demand continues to grow (total loan requests on Lending Tree increased 48% year-over-year to 5.4 Mn).
The biggest challenge to the above state-of-play is the latest scale entrant to the retail banking business–Goldman Sachs. GS’s new lending business, Marcus, is on pace to originate $2 Bn in loans this year–the fastest growth rate of any lender that PeerIQ tracks.
A task force convened by the Federal Reserve has released its evaluations of 16 proposals to build a faster U.S. payment system. The plans were judged by the task force’s consulting firm, McKinsey & Co., based on how well they satisfied 36 criteria related to speed, security and other attributes.
Gotianun-led EastWest Banking Corp. has teamed up with FINTQ, the technology arm of PLDT and Smart’s Voyager Innovations, to offer consumer loans through digital lending platform Lendr.
With this partnership, consumer-focused lender EastWest will make available personal loans and auto loans through Lendr by the fourth quarter of this year. Eventually, the offering will also include EastWest home loans, small and medium enterprise (SME) loans and credit cards.
While robo-advice may account for only a fraction of the total assets under management today, it is a technology that is here to stay—but not in the way that has dominated news stories. Rather than supplanting the financial advisor with technology, firms need to leverage new multi-channel automation to empower their advisors to focus on value-added, relationship-building activities. In this paper, we look at how wealth management players can focus on getting to the right combination of human advisors and automated investment advisory solutions in a hybrid model that seamlessly integrates the two.
US retail giant Overstock.com has been waiting for the US Securities and Exchange Commission (SEC) to tell the world exactly when a crypto token is a security.
Then, earlier this week, tØ got the news it had been waiting for when the SEC finally published the results of a landmark report in which it clearly laid out its rationale for why some tokens are still securities.
Long a detractor of a practice called “naked short selling” – where traders methodically bid down the price of stock by selling shares they haven’t first procured, Byrne set about using blockchain to cut out everyone who stood in the way of buyers and sellers.
For those who hoped that the SEC would allow cryptocurrency and ICO markets to evolve unregulated, their hopes were dashed by the report and the bulletin. The SEC did not outlaw ICOs by any stretch of the imagination, but it did indicate that, depending on the facts and circumstances, an ICO may indeed involve an offering of securities. In that case, organizations that proceed without registering with the SEC or that structure the offering in such a manner so as to qualify for an exemption from registration will violate federal securities laws. The remedies for such a violation include rescission of the offering, cease-and-desist orders, fines and penalties, bans from participating in the securities industry, bans on serving as an officer or director of a public company, and, in the most egregious cases, referral to the local U.S. Attorney for possible criminal prosecution. So, whether an offering involves a “security” is a very important initial determination.
However, when Bank of America got a sense of the vision for its AI-enabled “digital assistant,” called erica, it didn’t take the bank long to gather the resources necessary to make her real.However, when Bank of America got a sense of the vision for its AI-enabled “digital assistant,” called erica, it didn’t take the bank long to gather the resources necessary to make her real.
Paypal is the world leader in processing payment apps today. The app for Android and iOS devices provides the same functionality as the online Paypal.com service.
A good choice for small businesses Due.com lets users benefit from a convenient digital wallet, invoicing service and fast operations handled at low transaction rates.
iZettle also efficiently serves small businesses. What this fintech app does perfectly is that it allows small business owners accept cash and credit card payments from a smartphone or tablet. With additional cash drawers and receipt printers from iZettle one can also provide customers with printed or online receipts.
Another interesting example of a successful fintech app is Mobikwik. Now with the base of 50 million users Mobikwik offers a user-friendly digital wallet, which has become a real substitute of a physical purse for its users worldwide.
In regards to the ways of making personal loans an easier experience for users, LendUp offers just one of them. It’s a web application (also available for mobile) that lets users from selected US states apply for a short-term loan 24/7.
Citi Mobile is one of the leading mobile apps for iOS and Android mobile devices introduced by Citibank. According to Business Insider, the app has significantly grown in popularity mainly due to addition of FICO scorefeature.
By tech start-up standards, robo-advisors are already approaching middle age. Betterment, the pioneering robo-advisor and still the largest of the independent firms, turned seven in May. It now has $9.1 billion in assets under management.
Rep. Emanuel Cleaver II (D-Mo.) has reportedly sent letters to five alternative SMB lending companies with questions regarding borrower protections, anti-discrimination efforts, transparency and other factors.
Cleaver is reportedly seeking details of the companies’ business models and products offered to small businesses, how those products are originated, information on fees and rates and whether these businesses offer borrowers a repayment plan based on future credit card receivables, reports said.
The lawmaker is also seeking information on how these lenders handle transparency and whether they make disclosures to SMBs the same way they do to consumers as required under the Truth in Lending Act. He is also asking about whether these firms pull a consumer credit report for small business lending.
The SEC’s ICO crackdown will help in the long-run. (The Financial Revolutionist Email), Rated: A
For many business owners, it makes sense to borrow funds to create a liquid cash cushion to operate their business to the best of their ability. Before you decide to borrow, you need to understand what your working capital needs are and to make sure numbers make sense for you and your business.
The finance industry is one of the most data-driven trades, and by visualizing and analyzing data in VR, early adopters can get a leg up on the competition. Not only can VR improve the way data is viewed, but it can also improve the level of communication through the use of a shared virtual office (SVO). This is immensely important because, in the high stakes world of finance, a mistake or lapse in communication could cost millions of dollars.
Typical of hot real estate markets, there’s a cycle. Home prices rise, people catch on and want in, and then they decide to sell. Soon, even more people jump in the market and serious sellers make their sale, causing inventory to thin. Buyers get wise to the overheated marketplace and decide to wait until the prices come down. The sellers who are eager to make a buck overprice their houses and when they don’t sell, they become income properties. As a result, the rental markets fill up with income properties, and the inventory continues to thin out.
We are at historic lows for mortgage rates, and they are not going to spike that drastically in the next year that it would preclude you from getting a solid thirty-year fixed rate loan. The important thing is that you do NOT overpay for a home.
After 16 years at General Electric, Chris Capozzi was still a young man. That was because he’d joined the company upon graduating from Boston College, where he earned a degree in finance and management information systems.
Eventually, one of the alumni introduced Capozzi to Stone Point Capital, which had just become a major investor in Freedom Financial Network, a privately held financial services firm. Everything clicked with the company’s co-founders and co-CEOs, Bradford Stroh and Andrew Housser, so Capozzi moved across the country to start work as Freedom’s CFO at the beginning of this year.
What kinds of opportunities are you focused on?
Secondly, we’re in the process of developing a securitization platform to complement our existing sources of capital and further expand our investor base, which will enable the growth on the marketplace lending side. Initially the plan is to securitize unsecured consumer loans, very similar to what other marketplace lenders, like SoFi and Avant, have done.
Peer-to-peer lender RateSetter announced on Monday that it has passed £2 billion in loans over its platform, with more than £1 billion of the total made since the beginning of 2016.
About £1.3 billion of the total lent has gone to individuals, with £700 million going to businesses. The company now has 423,000 customers, the majority of whom are borrowers, more than any other UK peer-to-peer lender.
Onerous banking regulations will continue to hamper growth in regulatory capital‐intensive lending asset classes, according to the investment managers of the £821m P2P Global Investments trust.
The fund is moving away from a pure P2P play, instead transitioning more into direct lending and other Alternative Credit niches. Its manager MW Eaglewood is also merging with Pollen Street Capital, which while still on-going, is expected to close later this year subject to regulatory approval. Pollen Street is also the manager of £359m Honeycomb investment trust which invests in direct lending assets.
Alternative property lender and investment platform LendInvest has launched a five-year bond paying 5.25 per cent a year for investors with a minimum of £2,000.
In an era of one per cent savings rates and where yields ranging beyond 5 per cent are hard to come by in the equity markets, this deal is sure to whet the appetite of many investors – particularly as it comes with twice-yearly payouts.
According to Christian Faes, CEO and co-founder of LendInvest, the retail bond serves a number of purposes – it allows the business to diversify its funding and expand its capacity to lend to property professionals, but also creates a new entry point into property for investors.
[The retail bond] is launching at a critical time when demand in the UK’s residential property market continues to outstrip supply. There’s a serious lack of capital available to professional property investors who buy, build, refurbish and renovate homes for UK streets. Our model allows us – and by extension our investors – to support these people and small businesses.
Faes says that it is difficult to pin down what a typical LendInvest investor looks like; the investor base ranges from those looking to build a portfolio of property loans on the firm’s online investment platform all the way up to pension funds, infrastructure funds and banks.
Abundance Investment, a UK based peer to peer lending platform in the renewable energy sector, has just topped £50 million in investment, according to a company report. Management said the “huge” popularity of its IFISA and three highly popular renewable projects from tidal, geothermal and energy efficiency technologies helped to fuel the recent growth. Abundance says three projects have attracted more than £10 million of new investment in less than 2 months.
Atlantis tidal energy debenture has sold out raising £4.3 million,
Green Deal bond will close in 4 days’ time and has raised £3.95 million to date
With inflation on the rise but interest rates at an all-time low in the UK – and some high-street banks even raising the prospect of charging commercial customers to keep deposits – companies’ savings may actually be losing value in real terms.
If you can’t beat ’em, join ’em
Over the past few years a new way to potentially beat the banks has emerged – one that plays them at their own game. Called property-backed peer-to-peer lending, it gives companies the opportunity to be the lending bank themselves.
One of the fastest-growing products of this type is Choice, offered by Octopus Investments, an experienced investment company that manages more than £6bn of assets.
Working with a growing roster of challenger banks, Octopus can offer a savings product that currently provides an interest rate of more than one per cent.
Banks have been out of favour for the last ten years after they almost brought the global financial system to its knees.
So why would anybody invest in them? Oddly, one reason is “the failure by politicians to enforce a key promise” – that no bank would ever become “too big to fail” again. “In every developed country”, says Jonathan, the big banks have just got bigger. The “never again” promises have been replaced with “complex rules to strengthen bank capital, thus reducing the chances of collapse”. Another reason is that “banking has changed for the better” – governance has improved and customer satisfaction has shot up.
It remains to be seen if any bank can ever do what the music industry is in the process of doing – taking back “their” industry by becoming the pre-eminent innovators. Such a thought might be laughable right now. But a word of caution on laughing too soon – if they do realise how to leverage their enormous power, accept that legacy systems must be overhauled and replaced wth the truly innovate, and execute such a strategy well, would you bet against them retaining and entrenching their dominance?
For now and the foreseeable future, most banks prefer to sit back and avoid risk. Really the risk lies in doing nothing and inviting a slow death by a thousand cuts. OK, yes, you can talk about record bank investment in fintech, cooperation between banks and fintechs – again, this is only helping fintechs move in on bank stomping ground.
China’s pending regulatory crackdown on the $120bn peer-to-peer lending industry has claimed its first scalp before it has even begun, with one of the biggest players saying it will wind up its business in an industry full of bad loans and no profits.
P2P lending, in which borrowers are matched with investors via online platforms, has mushroomed in the past five years, with China boasting more than 2,100 such platforms, but so too have scandals. Last year was marked by multibillion-dollar scams in China and a governance scandal that rocked New York-listed LendingClub.
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A few days ago, UnionPay cloud flash together with Apple Pay launched promotional activities; early June, CUP also joined nearly 10 million businesses to create “62 CUP cloud flash to the whole people Sheng Hui.” Looks, CUP is imitating Alipay, WeChat to pay the subsidy routine.
Can you imagine using your Jingdong or US group (the new US big) account, you can pay through the UnionPay POS machine? Do not scan, do not have to swipe, do not open the APP, just need to close the POS machine and verify the fingerprint can be completed to pay.
The point is that you do not need to use the bank card account directly, but through the Jingdong or US group to pay the account, you can use the phone in the UnionPay POS machine to complete the payment.
In Banco BNI Europa (“BNI Europa”), Creditshelf has succeeded in acquiring another strategic partner to help it provide financing to small and medium-sized undertakings (SMEs).
The online marketplace that specialises in SME financing, and the Bank, which operates throughout Europe, have agreed that Banco BNI Europa will invest up to 15 million Euro in the credit platform over the coming months.
Aida is the perfect employee: always courteous, always learning and, as she says, “always at work, 24/7, 365 days a year.”
Aida, of course, is not a person but a virtual customer-service representative that SEB AB, one of Sweden’s biggest banks, is rolling out. The goal is to give the actual humans more time to engage in more complex tasks.
Besides Aida at SEB, there’s Nova, which is a chatbot Nordea Bank AB is introducing at its life and pensions unit in Norway. Swedbank AB is adding to the skills of its virtual assistant, Nina. All three are designed to sound like women, based on research suggesting customers feel more comfortable with female voices.
Visa (NYSE: V) and Marqeta, a payment card issuing platform that can provide consumers with immediate loans, has announced a global partnership to propel innovations in commercial and consumer payments in lending. Visa has also made a strategic investment in Marqeta and led a $25 million funding round that included the participation of previous Marqeta investors including Commerce Ventures, 83 North, Granite Ventures, IA Capital, and CommerzVentures GmbH, as well as new investor CreditEase in China, one of the world’s largest alternative lender.
i2ifunding.com, a peer-to-peer (P2P) lending platform, today said it aims to break even by the second half of 2019-20, given its robust growth in the last two years and promising outlook in the next two years.
It has a vision to scale up this disbursement up to Rs 200 crore over the next two years, i2ifunding.com said in a statement.
After working in a bank for many years, Brahma Mahesh and his friend decided to do something in the burgeoning FinTech space. They zeroed in on lending, as only 5-6% of the population is covered by banks and NBFCs. Mahesh, along with four other co-founders, started FinMomenta last year, and launched its first product ‘Tachyloans’, a peer-to-peer lending platform in May this year.
In the next five years, almost 50% of the world’s financial services are planning to acquire fintech startups, according to a report by PricewaterhouseCoopers LLP. Collaborations, too, are expected to increase, with eight out of 10 companies waiting to partner with these new players, the report added.
Some 67% of senior Indian financial sector executives believe their business is at risk following the rise of fintech firms, and 95% of them were willing to explore partnership with them, a separate report by PwC released this April revealed.
On July 27, Axis Bank, the country’s third-largest private sector lender, acquired FreeCharge, a payments application and mobile-wallet company, for Rs385 crore ($60 million). This is the first such deal in the sector, potentially setting off more such transactions in the future, believe experts.
Five-month-old fintech startup Cashcow, which provides banking services and products to a customer at his doorstep, has expanded its operations to seven cities including Delhi, Kolkata, Pune, Ahmedabad, Hyderabad and Chennai.
Joining fintech company Rubique as a chief product officer in 2016 introduced him to Manish Aggarwal, his future co-founder, who was leaving the startup at that point.
According to the founders, Cashcow is a platform providing banking services and products to a customer at his doorstep.
The Indian financial services sector is undergoing major changes today. With more than 600 startups in the space of lending, payments, insurance and trading space, Fintech startups are not only spearheading innovation, but are also prompting traditional banks and financial institutions to explore new technologies and investing heavily in digital service delivery channels.
However, fintech startups unlike others face additional challenges of operating in a heavily regulated industry and have stiff competition as their key competitors are well established banking players. To overcome this challenge, experts believe, adopting a “Regulatory Sandbox” based approach where the regulator works closely with emerging Fintech firms make better sense.
FINCA Microfinance Bank, one of the fastest growing microfinance banks in Pakistan, has announced a movement to make digital commerce and payments free in the country.
SimSim, a mobile payment platform, was introduced in partnership with Finja – an internationally funded FinTech startup – at a launch event Thursday night at Mohatta Palace, Karachi. The event was attended by major industry stakeholders, government officials, artists, tech enthusiasts and media figures.
SimSim will give people access to frictionless payment options directed towards a diverse pool of merchants.
Over 25 FinTech companies attended the recent inaugural meeting of FTAN – FinTech Association of Nigeria – which principal objective is to serves as a platform for the development of the financial technology industry in Nigeria and to be a forum for the exchange of ideas and dissemination of information by and between various stakeholders in the industry.
News Comments Today’s main news: Lending Club wins motion to compel arbitration, avoids class action. Orchard: Q3 originations move up. A quiet crash in bank lending? Abundance IFISA attracts nearly 10m GBP investment. Dubai regulates first P2P lender. Today’s main analysis: The Velocity of money. Today’s thought-provoking articles: SFIG Vegas 2017 recap. Legacy banking systems are the risk. Indian FinTechs attracting […]
Lending Club (LC) wins motion to compel arbitration, avoids class action. GP:”While the agreement between Lending Club and the borrower was supposed to compell arbitration, the industry was concerned that a ruling could override that clause of the contract. Had that been the case the cost of disputes would have been much higher, which is great for the attorneys but not that good for anybody else. We are glad the arbitration clause held the scrutiny of the court.” AT: “This is a huge plus for Lending Club, and for all platforms.”
AltFi adds Prosper to AltFi Data Analytics platform. GP:” A good validation point for AltFi Data. We continue to believe that data transparency is a must in order for the industry to succeed. We would like to see more student loan, SMB lending data and Real Estate Crowdfunding Data. I strongly believe that Lending Club’s openness with their data put this industry on the map. And for Prosper having a 3rd party independent company validate and publish their own research on their raw data also should serve as an addition point of confirmation and comfort for anybody doing business with them.”
How the velocity of money affects economic growth. GP:” Inflation is controlled by inventory of money and velocity of money. This piece means that inflation is still nowhere in sight, which should affect decisions on central interest rates. And interest rates are at least a little bit important for our industry. ” AT: “Some interesting points, but it isn’t good news for optimism.”
REITs vs. RECF. AT: “Again, a good read, but not favorable toward RECF. Actually, this piece attacks head on the selling point RECFs use to attract investors over REITs. Investors shouldn’t make decisions based on sales pitches, anyway.”
A quiet crash in bank lending. GP:”Net loans to small businesses by the largest UK banks fell by a hefty £536m from December to January. Gross lending by the banks in question fell further still, nosediving from approximately £5.1bn in December to £4.05bn in January. I continue to say that we should compare Dec 16 vs Dec 17 and Jan 16 vs Jan 17, to take into account seasonality in the lending business. P2P volume of 208m GBP is therefore now roughly 5% of the UK bank lending market. “AT: “An excellent read.”
Lending Club (NYSE:LC) has was a significant court victory regarding its ability to compel arbitration. The case Bethune v. LendingClub Corp. was filed in the Souther District Court of New York in 2016.
The issue pertained to the interest rate a New York resident was being charged (29.5%). The amount was higher than the statutory limit of 16% under New York’s usury laws. The judge presiding on the case sided with the defendant, Lending Club, by granting the motion the motion to compel arbitration on an individual basis and thus stayed the case pending the outcome of the arbitration. The decision also means Lending Club will dodge a class action lawsuit.
AltFi Data Announces the Addition of Prosper Marketplace to the AltFi Data Analytics Platform (AltFi Data Email), Rated: AAA
AltFi Data today announced that it has added the Prosper loan portfolio historic origination data to AltFi Data Analytics USA. The data for loans originated through the Prosper platform can now be presented according to AltFi Data’s established standards. This allows investors to review a track record of net return, together with all supporting metrics, to perform like-for-like analysis against the other marketplace lending platforms that make up AltFi Data Analytics UK – including Zopa, Funding Circle, RateSetter and MarketInvoice.
The availability of standardized data will further facilitate the due diligence that ultimately drives investor adoption of this asset class. The addition of loan data from the Prosper platform also represents the first time that a viable comparison has been made available across geographies.
Prosper Marketplace Net Return to the AltFi Data Marketplace Lending Returns Index methodology
The 12 month trailing net return that investors have achieved through Prosper Marketplace can now be reviewed based on the same standard as the major UK platforms. In addition to analysis of net return, AltFi Data also provides further analytics covering lending rates, bad debt, arrears, term, gross origination, and net lending/change in outstanding principal.
Back in the 1980s and 1990s, politicians could always count on having their debts and spending programs bailed out by economic growth. Politicians are expecting the same thing today. All they talk about is how they will spend money to grow the economy, and the economic growth will wipe out the debt. It’s a fairy tale that used to work at the end of the last century, in a generational Unraveling era, but stopped working about 13 years ago when we entered a generational Crisis era.
What nobody wants to talk about is the velocity of money. This indicates the rate at which people are willing to spend money. You can’t have economic growth if people aren’t willing to spend money, which means that the velocity of money would have to increase. Instead, we have this:
When the real estate bubble burst in 2007, and the financial crisis occurred, millions of people went bankrupt or lost their homes. At that point, people stopped spending money. They used what money they had to pay off their debts and save money. As a result, the velocity of money has continued to fall steadily since then, just as it did during the Great Depression and World War II.
Investors who are pushing the stock market to new parabolic heights are completely oblivious to the fall in the velocity of money, and in fact have the vaguest clue what it means. Similarly, they’re oblivious to the debt ceiling crisis that’s approaching.
Orchard’s platform published their quarterly report a few days back covering Q4 of 2016. According to Orchard, loan volume increased in Q4 reversing a trend that began in Q4 of 2015. While originations ticked up in Q4 versus Q3, they are still nowhere close to where they were back in Q4 of 2015 where they hit an all-time high of more than $3.8 billion.
According to Orchard:
Loan originations totaled $2.045 billion in Q4. In Q3 of 2016, loan originations came in at $1.85 billion
2014 and 2015 vintage charge-offs have increased more steeply than in prior years.
Borrower rates continued their decline in Q4, falling another 42bps from Q3 levels, largely due to a sharply falling share of subprime originations in the second half of 2016.
The SFIG Vegas conference set an attendance record this year, mirroring improved investor sentiment amidst an improving economic backdrop. Several participants drew comparisons to the 2004 environment which also featured a rising rate environment, deregulatory agenda, and conditions leading to an acceleration in ABS volumes.
On the regulatory front, the US District Court of the Southern District of New York issued a decision in Madden v. Midland on remand.
Money360 is experiencing rapid growth in the marketplace lending sector for real estate. Recently Money360 announced it had surpassed $200 million in commercial real estate loans after exceeding $100 million last August. Money360 expects to top $500 million in real estate financing by the end of the year representing a rapid acceleration for the peer to peer lending site. Money360 launched in California in 2010 and expanded across the US two years later.
The company looks to provide financing for real estate loans between $200,000 and $5 million.
When searching for ‘REITs versus Crowdfunding’ on Google, one can quickly find many different Crowdfunding websites trying to sell their product in a very biased manner relative to REITs. The main arguments that they seem to make are always the same: REITs are not real estate, REITs are riskier, and REITs are therefore less attractive than real estate crowdfunding investments. I disagree with all these points and will aim to explain why REITs offer in fact much superior investment characteristics compared to any crowdfunding platform.
MYTH #1: REITs are not real estate
Crowdfunding websites make sure to quickly point out that REITs are traded in the form of stocks to try to scare investors away from these supposedly “highly volatile and risky” investments. On the other hand, crowdfunded real estate investments are independent of the stock market and are hence pure real estate.
While this is true, it is in my opinion very unreasonable to assume that REITs are less of a real estate investment than crowdfunded deals simply because of how they are traded.
MYTH #2: REITs are riskier
REITs offer the opportunity for investors to invest in broad and widely diversified portfolios of properties in a liquid and cost efficient manner. Crowdfunding websites, on the contrary, allow you to invest in a concentrated, illiquid and often cost inefficient manner with potentially higher conflicts of interest between sponsor and investor.
Crowdfunding investors are also able to diversify by investing small sums in multiple deals. But this will never achieve the same scale as investing in REITs, which (often) own thousands of properties across different property types and geographical locations.
MYTH #3: Crowdfunding is superior to REIT investments
You are at the mercy of the deal sponsor and pure luck. Real estate is a local business and if you are not actively involved in the local market, you simply cannot assess an individual property investment. You need to be able to analyze the macro and micro location, the surrounding infrastructure, the growth trends, the demand and supply factors, etc.
This is the beauty of REITs: You do not need to know everything; you have a professional management team taking care of all the operational work.
My conclusion: If you are not a professional real estate investor, forget any form of private real estate investing including crowdfunding. And even if you are a professional investor, you might be better off investing in REITs.
One company looking to help with that advice is Cinch with its on-demand app. We sat down with Cinch’s cofounder and head of company development, Kerri Moriarty, to learn more about how the company is helping guide everyday financial consumers with on-demand finance advice.
KM: Cinch is about making it easy for everyone to have access to unbiased financial advice, specific to their personal situation.
KM: Cinch comes with a free trial and then has a monthly fee for continued use. We think of it like a true client and advisor relationship. To truly remain unbiased, we ask customers to pay a fee.
KM: There are some budgeting and credit card tools like Mint or NerdWallet that we consider competitive that offer on-demand financial recommendations, but hardly any do so in the context of consumers’ entire financial situation. We think there is a big opportunity for Cinch to be one of the first companies in the FinTech space to offer a dedicated and unbiased financial advisor anytime it’s needed.
KM: We’ve definitely learned a lot along the way. I think one of the most important lessons learned, especially when it comes to tech or software, is that it’s important to just get something out in front of users. The longer you wait to test designs or features or even launch your product, the more risk you have of something “better” coming along or the needs of your customers changing.
Net loans to small businesses by the largest UK banks fell by a hefty £536m from December to January, according to the latest statistics from the Bank of England. It’s by far the biggest retrenchment in SME lending in the past two years, which is as far back as the data set stretches.
Gross lending by the banks in question fell further still, nosediving from approximately £5.1bn in December to £4.05bn in January. The figure for January is, again, by some distance the lowest figure for monthly gross lending by the banks to SMEs over the past two years.
Brexit may well lie at the root of the problem. It’s no secret that the banks have been pulling back from certain segments of the small business lending space since the UK’s vote to leave the European Union, but the January drop-off is by far the sharpest we’ve seen.
Funding Circle, the world’s largest marketplace lending firm for small businesses, lent £103m in January (£50m net). Meanwhile the peer-to-peer lending sector as a whole lent £208m during that same period, according to AltFi Data. There are then a raft of balance-sheet based alternative lenders, which are also lending millions of pounds to SMEs each month.
ABUNDANCE has attracted almost £10m of investment into its Innovative Finance ISA (IFISA), the peer-to-peer lending platform’s managing director has revealed.
Davis said £6.5m has now been invested and £3m is being held in a new cash holding account launched last month, which pays two per cent interest, in anticipation of new projects coming onto the platform.
Crowdstacker last month revealed it was attracting £7,000 on average in its IFISA, which is just above the average subscription of £6,338 across cash and stocks and shares ISAs in the 2015-16 tax year.
Bricklane.com offers a property Isa that buys buy-to-lets with cash and provides a return based on rental income and capital appreciation.
Landbay, on the other hand, is a peer-to-peer lender that allows landlords to borrow from private investors so they can purchase buy-to-lets. Returns are generated as the landlord repays the loan with interest.
It’s possible to put some peer-to-peer investments into the new innovative finance Isa, with many of these set to launch in April.
If you do consider investing, make sure that you do your own research, question any suggested returns carefully and weigh up the fees that are charged, which will eat into any money that you make.
Simon Heawood, chief executive of online Property ISA Bricklane.com, replies: People often like the security of investing in real bricks and mortar, and it has historically delivered strong returns – around 9.6 per cent a year through a combination of price growth and rental income.
You should remember though that property prices can rise and fall, and rental income isn’t guaranteed, so as with all investing, you need to do your research and invest sensibly. Any investment platform should clearly explain the risks to you and you need to make the decision that’s right for you.
If you’re looking for a simple way to invest your money in the property market, then you might want to have a look at something like our residential property Isa, which launched last autumn.
It is similar to an investment Isa and offers the same tax benefits as both a cash and stocks and shares Isa.
However, rather than returns being linked to interest rates or stock performance, they come from rental income and property price changes. As an example, whilst the best cash Isas are currently offering returns of between 0.9 per cent and 1.3 per cent, our Bricklane.com property Isa is presently delivering an average return of 3.5 per cent from the rental income alone.
Unlike crowdfunding, it can be included within a £15,240 2016/7 Isa allowance. If you find a property Isa that also uses the Real Estate Investment Trust (REIT) structure, then it will give you even greater benefits, with zero tax to pay on property price increases and rental income.
John Goodall, chief executive of buy-to-let peer-to-peer lender Landbay, adds: Your situation sounds similar to that faced by a growing number of people, keen to reap some of the well-publicised rewards from the UK property market, but without getting directly involved with the demands of owning, renovating or renting yourself.
As you rightly say, investing through a platform that lends to property developers, such as LendInvest is one obvious option – these loans help finance mid to large scale developments and offer returns of around 4 to 8 per cent depending on the risk you’re willing to take on.
Property development is a relatively higher risk investment than buy-to-let, there all manner of complications that could potentially derail a development project, but the returns do typically reward the higher risk.
For those after a more secure route into property-backed peer-to-peer, the buy-to-let sector is another option. A few platforms now allow investors to lend money to a diversified pool of buy-to-let mortgages lent to experienced and professional landlords.
Not only has this proven itself to be statistically the lowest risk sector in the peer-to-peer mix, but the demand for rental property is growing at pace, as the UK’s housing shortage leaves millions of people unable to buy a property outright.
Landbay for example lends solely to experienced and credit-worthy landlords and as such is positioned at the conservative end of the market, offering interest of up to 4 per cent, with many layers of protection for investors’ money.
With four adult Isas now available, you could be confused as to which one is right for you.
The total amount of money you can invest in one or more Isas is capped at £15,240 for the 2016/17 tax year. However, this limit will rise to £20,000 for the new tax year, which starts on 6 April.
You can save all or part of your annual Isa allowance into a cash Isa.
These accounts are available from banks, building societies and credit unions and can take the form of an easy access account, notice account or a fixed-rate bond.
Right now the top rate on an easy access account is 1.05% from Paragon Bank which you can open with £1.
Suitable for: Anyone uncomfortable with risk and willing to accept a lower rate in return for security.
Stocks & shares Isas
Alternatively you can invest all or part of your annual ISA allowance into a stocks and hares Isa.
You should only really invest in a stocks and shares Isa if you are happy to take a risk with your savings as investments can go down as well as up in value.
Suitable for: Long-term investors who are happy taking on an element of risk in order to get a potentially better return.
Innovative Finance Isas
Investors can use an Innovative Finance Isa to get tax-free returns from the money they put into peer-to-peer loans made via platforms like Lending Works and Landbay.
What kind of returns can you get? Annoyingly, most of the biggest peer-to-peer lenders, including Zopa and RateSetter, have yet to launch their Innovative Finance Isas.
However, you can get a rate of 7% at Crowdstacker.
Suitable for: Investors who understand the risks involved with peer-to-peer lending and crowdfunding.
Help to Buy Isas
The Help to Buy Isa was launched to help first-time buyers save a deposit for a home worth up to £450,000 in London or up to £250,000 in the rest of the country.
You can save up to £200 a month into a Help to Buy Isa (or £2,400 a year) and when you first open an account you can deposit a lump sum of £1,200. The money you save will boosted by a government bonus of 25% when you come to buy your first home.
Suitable for: Aspiring first-time buyers trying to build up a deposit. Ideally able to set aside money each month rather than in a lump sum.
Every once in a while the financial community gets itself in a fluster about fintech. Mark Carney, governor of the Bank of England, is the latest person to raise concerns about the technology. Speaking at a G20 conference in Berlin, Carney said fintech presented “systematic risks” to the banking system, hinting that the next financial crisis could be caused by tech. The usual reasons were rolled out: liquidity, risk of cyber attacks, and the ability to subvert anti-money laundering laws.
Many bankers are mortally scared of new technology; of changing their systems or reforming the way things are done.
Secondly, you can’t ‘contain’ the reach of fintech.
The truth is that technology can actually make banks and the financial system safer.
Regtech allows regulatory officers in investment banks to detect suspicious figures submitted by potentially rogue employees; banks to detect hidden signals in their data which might suggest fraudulent activity or money laundering; and regulators to monitor the early warning signs of crises.
New machine learning technology also gives us the power to monitor the financial markets in real-time, looking for telltale warning signs of crises, and alerting regulators and officials when something needs investigating more thoroughly with a human eye.
The irony is that the real risks lie in the legacy core banking systems that many of our banks run on.
RateSetter, the nation’s second-biggest peer-to-peer lender, has wooed former ING Direct chief Vaughn Richtor to accelerate the fintech company’s quest to gain scale and take on the big banks.
The appointment expands RateSetter’s board to five, including co-founder of the British group Peter Behrens, chief of the Australian arm Daniel Foggo, Stratton Finance boss Rob Chaloner and Martin Dalgleish.
When money and technology is gender agnostic, then any space of the business cannot be gender bias towards women, be it fintech. However, the smart phone penetration happening rapidly across the country and fintech has become a vibrant space before and after the demonetization. Now we see more number of women entrepreneurs venturing in fintech space.
There is no more talk of absence of women entrepreneurs instead the focus is on their competencies and equipping them to be more competitive and exploring the potentials.
Indian women are very good money manager, responsible investors and wealth creators in the world. In the fintech space women can be a great leader and rise to the top of the hierarchy with the help of regular mentorship.
In India Inc the participation of women as an entrepreneur and board of director is just 8 percent compared to 33 percent globally.
Credit Suisse has announced, “enhancements” to its digital private banking platform in Asia by partnering with Fintech company Mesitis Pte Ltd to provide its clients the ability to access “Canopy”, an automated account aggregation platform and reporting solution through Credit Suisse’s digital private banking platform.
Dubai-based Beehive said on Sunday it had become the first peer-to-peer lender to become regulated by the Dubai Financial Services Authority (DFSA), the regulator for the Middle East and North Africa’s largest financial centre.
Beehive is one of the few peer-to-peer lenders in the region. Nearly 4,500 investors have provided more than 75 million dirhams in loans via Beehive since the platform launched in November 2014.
The DFSA last month launched a consultation on its proposed framework for regulating loan-based, crowdfunding platforms.
News Comments Today’s main news: OnDeck continues to experience loss in Q3 despite origination record. Today’s main analysis : PeerIQ analyzes Cross River Bank. TransUnion reports low delinquency rates and strong balance growth in credit markets. Today’s thought-provoking articles: The credit scoring blind spot. How FinTech will impact finance in the next decade. ACCC wants to prevent banks […]
OnDeck shows $12.9m loss in Q3 2016. GP: ” As we have seen for the last few quarters OnDeck has moved from selling loans to holding them on the balance sheet for longer. This strategy continues and for now provides short term losses, in principle, to be offset by long term larger profits. They have about $85mil in cash and equivalents so at a rythm of $15mil in loss per quarter that’s another 6 quarters left. I wish OnDeck would demonstrate and explain when this strategy is going to turn around in their models. On the other side losing $15mil on $71mil in revenue is a little high perhaps. I hope they can make it profitable within 2-3 years. “AT: “This could be seen as a short-term blip. Sales went down as gross revenues went up, but the company is also investing in technology and analytics, which indicates a long-term strategy for growth.”
Cross River Bank is no ordinary bank. AT: “We’ve reported on this already, but PeerIQ takes a look at CRB in their newsletter, including charts showing the bank’s improved ROE positioning. The question here for banks is, can they follow Cross River into alternative lending and be more profitable than ever before?”
CFPB ruling won’t change anything. AT: “The structure of CFPB as likely been mended, but that won’t stop the battle from continuing. You’ll likely see more on this issue in the future as Washington continues to talk about regulation of MPL.” GP: ” I also stronly believe that the CFPB structure will be solved one way or another and will have no impact on CFPB’s activity. The ruling on CFPB’s structure is just a witty anecdote. “
Credit markets spurred by strong balance growth and low delinquency rates. AT: “This is another indication that the credit market is looking good even for marketplace lenders. Maybe especially for MPLs.” GP: ” This is a great indication that the credit market is healthy. When a market is healthy it’s much easier to build a business. It will become much more interesting when the credit market will be less healthy and that is what online lenders should prepare for.”
TD Ameritrade gets a robo-advisor. GP: ” As we wrote in the past, online lenders should learn from the dynamics of the robo-advisor market. I believe they behave in very similar ways.”
The credit scoring blind spot. GP: ” A very interesting analysis pointing out that credit scores ” are not designed to provide an absolute statement of risk but rather a relative assessment within a population of borrowers.””
Kroll assigns final ratings to SoFi Consumer Loan Program 2015-1. GP: ” first term ABS securitization of unsecured consumer loans for SoFi. Very interesting.PeerIQ has repeatedly pointed out that SoFi has the best rated and lowest priced securitizations. Why ? Is it all about belief in their underwriting or just the fact that they focus on super prime borrowers ? “
OnDeck, the New York Stock Exchange listed online lender for small businesses, has published its financial results for the third quarter. The company increased its loans under management by 44 per cent year-over-year to $1.1 billion, while bolstering originations by 27 per cent to $613m. Gross revenues rose by 15 per cent to $77.4m.
OnDeck operates a hybrid lending model which involves keeping some loans on balance sheet while distributing others via an institutional marketplace, often for a mark-up. But the platform’s marketplace sales have been trending downwards in 2016, in keeping with a wider decline in investor appetite across the industry.
The firm’s cost of funding during the third quarter of 2016 decreased to 5.7 per cent, down from 5.8 per cent in Q3 2015. Operating expenses were $49.4 million, up 16 per cent over last year as the company continued to invest in its technology and analytics capabilities.
OnDeck’s common stockholders lost $16.6m in the third quarter, compared to net income of $3.7m across the same period in the previous year.
Cross River Bank – Not Your Ordinary Community Bank (PeerIQ Email), Rated: A
Currently, community banks are in a secular consolidation trend owing to a low spread environment, and higher regulatory fixed costs, such as capital and liquidity rules, tighter Bank Secrecy Act/AML obligations, tighter FDIC de novo charter requirements, and new consumer protection requirements.
Indeed, per FDIC, from 2000 to 2008 there were over 1,000 community bank de novo charters issued. Post-2008, bank formation has slowed to a handful of charters per year. Industry consolidation across the 6,000+ extant community banks is expected to continue.
Cross River Bank was one of the few new charters and was founded in 2008 by CEO Gilles Gade, a former banker at Barclays and CFO of a mortgage lender.
CRB is also an early adopter of new financial technology innovations. It has partnered with payments companies including TransferWise, Stripe, Ripple, and CoinBase. CRB is reportedly developing an online-only digital bank dubbed ‘Almond Bank’ with a focus on millennials.
In prior newsletters, we made the argument that banks can improve their ROE position by purchasing or financing whole loans using Discover Financial Services as a case-study.
Here we test the hypothesis further:
While the broader banking industry consolidates and struggles to earn their cost of capital, Cross River Bank has expanded NIM (net interest margins) and lowered funding costs over time.
Exhibit 2 shows the increasing basis between NIM and cost of funding since June 2012. The improved NIM and declining cost of funding provides a powerful motivation for non-bank lenders to entertain bank acquisition, and also the converse, for banks to seek partnership or origination of consumer loans.
Below, we have listed some statistics to put growth and value in perspective:
Cross River Bank has experienced a ~70% CAGR in Net Operating Income since 2012 around when CRB increased MPL origination activities.
Total assets have grown from $10 Mm to nearly $500 Bn in assets since inception, while maintaining high levels of equity and asset quality.
Maintaining an ROE of 20% over 10 years will generate a 6.2x increase in book value.
9-month revenue more than doubled to $55MM from $26 MM last year.
Marketplace lending firms should still prepare for scrutiny and the possibility of challenges brought against them by the CFPB. This is despite a recent ruling that the agency’s structure is unconstitutional, which has raised questions about the government body’s future.
Richard Eckman, partner at Pepper Hamilton law, believes that the CFPB’s future is far from over. He says of the ruling: “It sounds more ominous than it really is. It was more about the structure of the CFPB and that in its current form, it has a single director who can’t be removed without cause, so is therefore technically unconstitutional.”
Of concern is the lack of controls and checks on the CPFB that are incumbent on other US government bodies. However, this could change as a result of the ruling.
At the moment, for example, there are a real lack of checks on the CFPB and this case may provide opponents of the agency with greater ammunition. The CFPB is not subject to an appropriation process, for example, that may now be pursued by Congressional actions and the financial industry – which has been concerned about the CFPB’s extensive powers since its establishment.
For the marketplace lending sector, the recent ruling may have provided hopes for a dissemblance of the CFPB’s powers and perhaps therefore less scrutiny. But the CFPB is still most likely going to pursue platforms if it spots any sign of wrongdoing.
Balances continue to rise and delinquencies remain muted across all credit products, according to TransUnion’s TRU, +1.17% Q3 2016 Industry Insights Report. The report, powered by PramaSM analytics, points to a healthy, well-functioning consumer credit market, which has seen continued growth across diverse products such as the mortgage market and the personal loan space.
More than 15 million consumers had a personal loan in the third quarter of 2016. The number of consumers with a personal loan grew by 1.5 million between Q3 2015 and Q3 2016. The report also found that personal loan balances surpassed $100 billion for the first time in Q3 2016, with $17 billion of balance growth occurring in the last year.
Despite surpassing $100 billion, total personal loan balances experienced the slowest third quarter growth rate since Q3 2013. In the third quarter of 2016, balances grew 20.9%, down from 24.9% in Q3 2015 and 25.5% in Q3 2014.
FinTech lender share of originated personal loans has more than tripled since 2013. FinTech originations reached 26% of all personal loans in Q2 2016, up from 8% in Q2 2013 and 16% in Q2 2014. Originations are viewed one quarter in arrears to ensure all accounts are reported and included in the data. In total, more than 3.57 million personal loans were originated in the second quarter, down 0.5% from 3.58 million in Q2 2015.
FinTech Lenders’ Share of the Personal Loan Market
In Q2 2016, near prime originations declined 4.7% and prime originations declined 2.7%, while both subprime and super prime originations grew by 3.2%, compared to Q2 2015. A prior TransUnion analysis found that FinTechs were outpacing traditional lenders in personal loans originated to near prime and prime borrowers. “The decline in near prime and prime originations reflects the challenges faced by some FinTech lenders,” added Laky. “Offsetting this, banks and credit unions are expanding in the super prime risk tier, while traditional finance companies continue to expand in subprime.”
To help investors better adapt to various market conditions and craft a diversified investment portfolio, TD Ameritrade will provide a low-cost robo-advisory service that offers intuitive and easy-to-use investment advice.
The new TD Ameritrade Essential Portfolios is an automated, low-cost advisory service for digital-first investors. There will be five portfolios, all designed by Morningstar, to provide investors with a diversified strategy based on low-cost exchange traded funds from Vanguard or BlackRock’s iShares. The minimum investment is $5,000 to open an Essential Portfolios account with a 0.30% fee per year.
The low minimum investments in the robo-advisor program may be a good way for starting investors to begin saving today as many human advisors require large minimum balances. The robo-advisory is seen as an easy step for investors to gain more in-depth financial advise without having to hire a financial advisor, allowing users to access their accounts from anywhere with a smartphone or personal device.
Some advice and guidance is better than nothing. Research has shown that people who have a financial plan with specific goals are 85% confident they will reach their retirement goals, compared to 28% that do not, according to TD Ameritrade.
Using a slider bar to change monthly contributions or target dates, investors are able to further customize their recommended strategies. Through the various adjustments, users may find varying details on asset allocations, expected returns and some limited historical returns.
TD Ameritrade joins a number of custodians in adding their own robo-advisories. Charles Schwab launched its retail robo-advice, Intelligent Portfolios, in March 2015. Fidelity Investments came out with its Fidelity Go in July 2016. Others money managers in the space include Vanguard Group, BlackRock Inc., Morgan Stanley and Bank of America.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
Investors will choose a robo portfolio based on their investment goals and their general investment time frame, selecting from options like retirement, wealth-generation, education or other. A range of risk exposure is also provided from least to most risky options.
Making another $ 500M Wish (The Daily Pitch email), Rated: A
WAIN Street’s analysis of over a million loans originated by a leading marketplace lender between January 2012 and June 2016 shows that median credit scores have been flat and even increased slightly since Q1 2014.
First, don’t blame the credit scores. They are not designed to provide an absolute statement of risk but rather a relative assessment within a population of borrowers. The actual level of defaults is influenced by economic conditions. Not convinced. Just look at default rates for various credit score bands before, during, and after the Great Recession. For the same credit scores, defaults nearly doubled during the Great Recession.
Third, link individual borrowers to economic conditions. We assigned each loan to a Local Economic Vitality band based on data current as of the origination date and examined the loan mix for the eighteen quarters. The proportion of loans originated to borrowers from economically stronger locations peaked mid-2014 and has been declining since then.
Kroll Bond Rating Agency (KBRA) assigns ratings to one class of notes issued by SoFi Consumer Loan Program 2015-1 LLC (“SCLP 2015-1” or the “Issuer”). This is a $189.37 million unrated consumer loan ABS transaction that closed on August 21, 2015 and as of the October 17, 2016 payment date has a current note balance of $143.8 million. At the request of SoFi Lending Corp. (“SoFi” or the “Company”), KBRA is issuing public ratings for SCLP 2015-1 on November 4, 2016.
SCLP 2015-1 represents the first term ABS securitization of unsecured consumer loans for SoFi. Since the closing of SCLP 2015-1, SoFi has sponsored four unsecured consumer loan securitization in 2016, each has been rated by KBRA. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.
On September 22, 2016, Republican Congressman Patrick McHenry from North Carolina announced the introduction of H.R. 6118, the Financial Services Innovation Act of 2016 (the “Bill”). McHenry is the chief deputy whip and vice chairman of the House Financial Services Committee. According to the press release, the bill was introduced as part of the “Innovation Initiative” that McHenry co-launched earlier this year with House Majority Leader Kevin McCarthy, a fellow Republican from California. On October 19, 2016, the Bill was referred to the Subcommittee on Commodity Exchanges, Energy, and Credit. Before the Bill becomes law in the United States, it must be past by both chambers of Congress and signed by the President. With this Bill, America joins, among others, the United Kingdom, Hong Kong, and Malaysia in establishing FinTech regulatory sandboxes.
In its current form, the Bill takes a two-prong approach to constructing a regulatory sandbox. First, it creates a government-wide FinTech oversight regime, and second, it codifies an exclusive no-action relief mechanism for financial innovators.
Over the past decade, venture capitalists, private equity firms and a number of other big players have been pouring money into fintech start-ups. Since 2010, more than $50 billion has been invested globally in almost 2,500 companies as these innovators redefine the way we bank, according to Accenture. In the United States alone, revealed a Citibank report, investing increased from $1.8 billion in 2010 to $19 billion in 2015.
Although only about 1 percent of North American consumer banking revenue has so far migrated to these new digital business models, claims the report, that number is expected to increase to about 10 percent by 2020 and 17 percent by 2023 as consumer behavior continues to shift toward digital ways to save, spend and move money.
Citibank, for one, formed Citi Fintech in November 2015, a division consisting of a number of employees from tech companies such as Amazon and PayPal. Its first mission: an upgraded app that uses voice and facial recognition to eliminate the need for passwords. Although Citibank won’t disclose any of the details, a spokesperson there did confirm the app is on point to roll out before the end of the year, is partnering with a number of fintech start-ups and was testing its voice recognition feature using Amazon’s “Alexa” program.
Their approach is to embrace the latest financial technology, not fight it. “We talk to fintech’s all the time,” said the Citibank spokesperson.
MPOWER Financing today announced that it has exceeded $100 million in loan application volume, offering thousands of high-potential students a way to access and complete their undergraduate or graduate education at top U.S. universities. To celebrate this milestone, MPOWER awarded a zero-interest loan to one of its borrowers.
Nitish Gupta, the student granted a zero-interest loan, shares a background and experience similar to many of MPOWER’s borrowers. A graduate student in a STEM (Science, Technology, Engineering, or Math) field, Gupta was turned down several times for loans in his native country of India because the banks failed to recognize his promising future, instead focusing on co-signers, on collateral, or on his not-yet-established credit history. Yet within a week of completing his application to MPOWER, Gupta’s loan was approved based on dozens of factors, including his future earning potential.
MPOWER designed its loans to serve high-potential students like Gupta who may not fit within traditional credit assessment models. MPOWER borrowers attend top universities and hold high post-graduation employment potential but may not yet have an established U.S. credit history.
MPOWER Financing today announced that it has secured $6M in its Series A equity round, led by Zephyr Peacock India Fund III and followed by several other institutional backers, including initial investors 1776 Ventures, Goal Structured Solutions (GS2), and VilCap Investments (Village Capital), as well as newcomers DreamIt Ventures, Fresco Capital, and University Ventures.
This latest funding allows MPOWER to create solutions for a greater number of students, offering more loan approvals to qualified candidates. MPOWER plans to use the capital to enhance its technology platform and expand its outreach efforts in emerging markets.
Abundance has become the first investment platform in the UK to open an Innovative Finance ISA (IFISA) targeting green energy projects.
The IFSA, which has been open to new subscriptions since April in a pre-launch phase was formally launched late last week. It enables investors to lend tax-free to renewable energy projects via Abundance’s peer-to-peer platform.
IFSAs first launched in April this year, and Abundance was one of the first peer-to-peer lending platforms to receive an approval to offer the investment vehicle.
Under Abundance’s IFISA investors will be able to invest in a host of clean energy projects.
Independent ratings agency 4thWay is out with an interesting report on the peer to peer property lending market in the UK. This sector of alternative finance has been very popular due to the asset class and the solid returns. Even in light of Brexit turmoil, P2P property lending remains a robust and growing opportunity for investors.
According to the report, today there are 12 P2P lenders that specialise in property. Combined, these platforms have lent £1.6 billion since 2013. Returns have ranged from 2.25% to 12.7% and lender losses have been placed at zero at 11 out of the 12 platforms. 4thWay explains there have been cases of bad debt but lenders have not lost their money largely due to the investment being secured by the property. Overall, lenders have lost just £15,000 out of £1.6 billion lent (0.0009%). Only one platform, Funding Secure, has experienced losses of 0.02% – spread over three years. 4thWay states this is easily offset by interest of 12.7% per year.
The report says that lending decisions are underpinned by underwriting processes with “sensible” maximum loans-to-value of 70% to 80%. Average loans-to-value (LTV) are considerably lower. In some cases, lenders can specifically choose loans with a maximum of 50% LTV. An example of this may be found through Proplend. Interest rates remain high as lenders are cautious and thus demand a premium.
Fintech Week 2016ranked the UK first amongst the world’s leading Fintech hubs. Last year, professional services firm EY listed the UK as the most fintech-friendly country, with the industry employing over 61,000 people and generating £6.6bn in revenues. For investors, the country provides a fertile ground for fintech entrepreneurs and start-ups. The UK fintech investment growth is driven by the availability of business capital, supportive regulations, tech talent, and position of London as a global trading base.
The availability of funds in the UK is good for fintech start-ups. According to a study by Let’s Talk Payments over $5.5 billion of investments were made in the financial technology sector from July 2015 to January 2016. The UK leading fintech investors include Index Ventures, Seedcamp, Balderton Capital, The London Co-Investment Fund, Northzone, Octopus Ventures, Accel, and 83North, Draper Esprit, Anthemis Group, Passion Capital, Notion Capital and General Atlantic.
The fintech industry is served by many angel investors who have the required experience and skills to understand fintech business. Also, private equity investors are many, with more than 130 funds registered.
The UK has the best fintech policy environment in the world, with a very supportive regulatory regime. The Financial Conduct Authority (FCA) has reduced barriers to the entry of new fintech players, with UK-based start-ups benefiting from tax breaks and funding schemes designed to foster growth. For instance, R&D tax incentives are available to firms that employ few people.
Fintech accelerators, too, play an important role in shaping investment environment in the UK. There are many Fintech start-ups accelerators in the UK willing to give support in the form of affordable office spaces, starting capital and mentorship. These accelerators in the UK include Seedcamp accelerator, Barclays accelerator, and Fintech-Innovation-Lab accelerator, Techstars Accelerator, Level39, Tech City UK and Dot Forge Accelerator.
My recent experience with FinTech Startup Revolut has shown me that the banks can still sleep quietly for a while as Fintech Start-ups will in fact not be in measure to disrupt the industry if they don’t also change the rules of the game…
So what went wrong with my Revolut account… I used my multi-currency card abroad to pay for goods in Euro. I received a VAT refund in Euro that was to be re-credited to my Revolut account. But today, when I logged into my account, I noticed that the refund had been re-credited in Sterling, with someone taking a hefty spread in the process…
What clients of FinTech Start-ups want is a completely different approach that puts them at the center. They want services that are not only answering their needs, but that are also:
simple to use
Banks on the other hand are struggling to make sense of big data. Because it lives on several databases and systems that are hardly integrated, because they did not think of asking clients the right to use this data twenty years ago when they signed them up, and because of plenty other valid reasons, mining through this data is a difficult, near impossible, task.
Clients are attracted to FinTech Start-ups because of the glitter this new lawyer of technology provides. They see the novelty in the approach and they believe something has changed…
Clients love the new simplicity – no more endless paper form to sign, all is done with a click on a fancy app interface and they even work with pictures of you, your ID card or proof of residence taken through your smartphone!
Clients love the increased speed – they can do it here and there, through the internet and 4G mobile connection, wherever they are, no more need to visit a branch in person.
Clients love the convenience – FinTech Start-ups provide the same services as traditional banks, often even better, and at a fraction of the price they normally pay their bank.
What should have happened instead at a Fintech Start-up?
First, the FinTech angle should have kicked in immediately:
The data analysis should have been instantaneous, with artificial intelligence reading the support chat channel and picking up that I was growing more and more upset by the interaction with the customer service representative.
Social Media listening should have also indicated real-time that I was starting to tweet about my problem and my frustration at the lack of understanding from the customer service representative, and that I was starting to drag influencers in the discussion.
Finally, the CRM system should have spitted out a customer profile showing that over the past 4 months:
I had increased my volume of transactions significantly (so I was on my way to become a “good” client) that all transactions I had done were in Euros and that there were no transaction in GBP (so there was possibly something abnormal with those two transactions in GBP).
So, in other words, the customer service representative should have assessed what was my issue with Revolut (i.e. refund process did not work properly), should have assessed the most practical and easiest way for Revolut to address my need (i.e. fix the refund by compensating the difference) and should have asked me how Revolut could still increase my client satisfaction (i.e. reinforce their client promise and turn me into a champion of their brand to drum up more business).
Client-centric champion Amazon would have paid back the 2.92 GBP in a split-second and would have probably issued a compensation voucher to make up for the bad customer experience. This would have reinforced my trust in their brand and would have led me to sing their praises on the social networks, bringing them additional clients attracted by this positive client experience sharing.
The British regulators, undoubtedly running while others seem to have just began walking, announced a raft of new measures to shake up banking based on recommendations by the Competition and Markets Authority. The most relevant for Fintech is an emphasis on Open Banking, giving access to traditional bank provided APIs and customer data so that they can provide direct services.
The CMA, however, fell short of what some had asked – the breaking up of giant banks as only a handful of them dominate the market, making banking an oligopoly or, even, a cartel which, at times, operates capriciously with little, if any, recourse as the closure of CoinJournal’s banking facilities illustrates.
The race has now been joined by the Swiss which announced a new proposal for light-touch fintech regulations. They are to create a “sandbox” for companies to experiment in a customized regulatory environment together with a fintech license, allowing new entrants to hold up to just above $100 million, making it easier to compete with traditional banks.
The race, however, is not limited to just the west. Abu Dhabi is also making its run with an announcement that they are to launch a Regulatory Laboratory through a new fintech legislative framework. Similar to a sandbox, it makes it easier to launch new innovative products and experiment with market reactions.
The United States is also on the move with the banking regulator appointing a senior lawyer to run a new “Office of Innovation” for Fintech. The primary task of the new center will be the designing of a fintech licensing framework to streamline regulation across the 52 states. Such discussions have now been ongoing for months, with the speed of movement probably decided by the outcome of the election.
The overall picture, therefore, seems to be one of a global understanding that finance is rapidly changing due to new technologies such as blockchains, smart contracts, APIs, and the internet.
Huy Nguyen Trieu is currently the CEO of The Disruptive Group, a business builder and advisory firm in finance. The firm aims to build and help the next generation of large-scale financial companies by combining a good understanding of financial services and technology disruption.
Prior to founding The Disruptive Group, Huy has navigated between startups and large organisations. He founded Ukibi — a precursor to Linkedin — in 1999. After five intense years, he joined international banks where he built high-growth businesses for over a decade, culminating in his last position as Managing Director at Citi.
Apart from writing his personal blog, Disruptive Finance, he is the Fintech Resident Expert at Oxford and a board member of Fintech Hong Kong.
1. Can you share with us your experiences and motivations behind launching The Disruptive Group?
The Disruptive Group was shaped by my experiences over the last eighteen years. I’ve worked in very large international banks but have also been very involved in the startup scene as a mentor, investor as well as a startup CEO.
3. You mentioned that you are a strong advocate for the potential of fintech. Could you elaborate further on your views?
In 1990, I co-founded Ukibi, which was essentially LinkedIn, but five years before LinkedIn. Despite having great investors, people and a superb product, it wasn’t enough to get significant traction. This experience taught me the importance of timing.
Over the last few years, I’ve applied this approach to finance and it is very clear that finance is being revolutionised because of technology. Although we are only at the beginning, there have been incredible results. For example, Zhong An sold online insurance to more than 300 million people in two years. Twenty per cent of the US adult population uses Credit Karma — a company that had no clients five years back.
In addition to innovative startups, we will start to see some real transformations in finance. The whole value chain will be transformed and there will be new entrants. At the same time, this will be a great way to bring finance to those who couldn’t access it — both in the West and in emerging markets.
Finally, we will start to see whole new services, which we never imagined. It will be much more than bringing new technology to old finance. It will be about creating new ways to manage finance – in exactly the same way that Facebook was not just a mere evolution of existing services.
4. Having been involved in fintech across Europe and Asia, how would you access the potential of fintech across these markets?
I would say that there is a more mature ecosystem in Europe today — especially London. That’s because it started earlier, but also because you have a very established financial capital in London that became a de facto Fintech capital for Europe. Hence, there are definitely a lot of projects, ideas, and emulation happening in Europe. However, the financial infrastructure is also very mature, meaning that startups have to compete with existing products coming from very large companies, which is not easy.
One of the main challenges in Asia would be the heterogeneity of the markets, especially from a regulatory standpoint. Today, in Europe and the USA, you could access a large market without having to be regulated on a case-by-case basis. In Asia, there isn’t a common regulatory framework yet. I think this would help a lot for the development of fintech.
5. Vietnam’s fintech industry is still in its early stages. How would you evaluate Vietnam’s fintech potential, and how does it compare to the international scene?
Despite being in its early stages, Vietnam has huge potential. Only a third of the population has a bank account, but on average, people have more than one mobile phone each! So there is definitely great opportunities to build fintech in Vietnam. There have been some very good traction in Vietnam. For example, we look at the case of Timo and Momo. That should hopefully attract more and more entrepreneurs to that space.
The examples of London and Singapore show that there are a few keys to building a successful fintech momentum. This includes the ecosystem, talents, money, government and regulations.
Of course, not all countries are in the same position as the UK or Singapore, but a lot can be done to build a thriving ecosystem for new financial services. I don’t know enough about Vietnam to properly compare, but I am definitely looking forward to knowing more at Echelon.
According to Reuters, ACCC Chairman Rod Sims said the government regulatory body has not yet examined any cases of Australia’s “Big Four” banks purchasing smaller fintech companies or acquiring blockchain technology. However, in the interest of fair marketplace competition, Sims alluded to the fact that any major proposed deals by the banks would face ACCC scrutiny.
Startup entrepreneurs, however, suggest that the ACCC’s attempts at regulation may harm rather than help small businesses.
Larger companies such as Apple, on the other hand, have leaned toward regulation of big banks in the blockchain industry, especially when they are attempting to enter a new market.
For now, the ACCC has yet to find the big banks in violation of laws protecting marketplace competition. We will see how far the banks can push the boundaries.
Lufax, China’s biggest peer-to-peer lending and wealth management platform, sees a potential listing helping to fund expansion at home and abroad, though it has set no specific timeline for a deal, Chief Executive Officer Gregory Gibb told Reuters in an interview on Monday.
Valued at $18.5 billion when it raised $1.2 billion from a group of investors in January, Lufax picked four banks to prepare a Hong Kong initial public offering that could raise $5 billion, sources said previously. Giant Chinese insurer Ping An Insurance (601318.SS) is its biggest investor.
ZhongAn Online Property & Casualty Insurance Co. Ltd., China’s first online insurance company, has launched a fintech innovation company.
The company, called Called ZhongAn Information and Technology Services Co. Ltd. (also known as “ZhongAn Technology”), will explore innovation for its parent company, ZhongAn, and its external partners.
ZhongAn Technology will focus on innovation in four main areas: artificial intelligence, blockchain, cloud computing, and data driven.
Megabanks and regional banks have started creating a framework to safely provide their customers’ information to burgeoning start-up companies that offer new services called fintech, a combination of financing and information technology.
The framework aims to prevent personal information from being leaked and give a further sense of security to customers.
Banks, fintech companies, the Financial Services Agency and experts established a review panel earlier this month and will compile a report by the end of this fiscal year.
Although the FSA can request financial institutions, including banks that are subject to its supervision, to carefully manage the information they have, it only loosely regulates and supervises fintech companies at the moment.
Banks have asked fintech companies through contracts for thorough information management and sharing responsibility when personal information is leaked. They aim at easily cooperating with fintech companies by drawing up unified security standards industrywide.
A HOMEGROWN fintech has snagged India’s largest bank has its client, using technology to create spending analyser tools for card customers at the State Bank of India (SBI). The move is a good sign that fintechs are moving beyond Singapore, noted the Monetary Authority of Singapore (MAS) in a statement issued by the fintech, Percipient.
Privately held investment firm Senjo Group has relocated its corporate headquarters to Singapore in recognition of Singapore’s growing influence in the Fintech sector. Representatives said the business-friendly environment and focus on financial innovation was key in their decision to lease the entire 56th floor of One Raffles Place. Senjo was only recently set up in 2015. The company was launched to manage a portfolio of payments processing, cross-border remittance, foreign exchange, trade finance, e-commerce, mobile payments, commodity trading and factoring businesses. Senjō also has regional offices in Japan, Indonesia, Malaysia, Myanmar, Thailand, Luxembourg and the UK, and operations in most major markets.
500 Startups is described as a global venture capital company and startup accelerator. It has supported 1,700 startups in over 50 countries. Silicon Valley Forum has reportedly hosted over 150 conferences and demo days. It also has a global network of more than 20,000 in 40 countries. The new MOUs marked South Korea’s fifth accord with foreign countries in regards to fintech. Other MOUs were from Britain, Australia, France, and Singapore.
The Government of Singapore is inviting startups, tech companies, investors, and banks to its inaugural Singapore FinTech Festival between November 14-18. Events will include a Hackcelerator Demo Day, the FinTech Awards, and a speakers expo. Finalists competing in the FinTech Awards had been busy implementing their solutions to fintech company and financial institution obstacles by June to compete for one of ten awards, ranging from S$ 50,000 to S$ 250,000 for a total prize pool of SG $1.15 million. Nearly 40 startups and companies are finalists, including Citi and OCBC Bank. The festival is expecting over 6,000 attendees.
Singapore’s FinTech Festival is another step in the country’s push to establish itself as Asia’s leader in fintech and a global hub for the industry.
On Friday, Uber and Mexican fintech bank Bankaool announced they have team up to launch Uber’s first ever debit card in Latin America. The online transportation network company revealed that the Uber Bankaool card has been available since October 21st and offers users who do not have a credit card an e-commerce new payment option.
On Nov. 10, representatives of IBM, Microsoft, QIWI and Sberbank will gather in Moscow to discuss challenges related to the digitizing of the FinTech sector and its transition to Blockchain.
Representatives of IT, financial system and entrepreneurship will learn more about operational Blockchain projects in Russia and abroad.
There are many reasons to attend the annual Blockchain & Bitcoin Conference Russia in 2016, including cases of implementing public and private Blockchains in banking, logistics, real estate and media, as well as issues connected with cryptocurrency regulation.
The Royal Bank of Scotland (RBS) in partnership with Google Cloud Platform and Intel are set to host a 48-hour Fintech Hackathon in Israel from November 15th to the 17th. The event will be taking place at the fintech accelerator dedicated to connecting Israeli startups with global financial markets – The Floor – located inside the Tel Aviv Stock Exchange building.
During the RBS Fintackathon, the bank’s team will set out various challenges and give entrepreneurs from Israel the opportunity to shape, design and build solutions for one of the UK’s largest financial institutions.
The RBS notes that people with ideas from all over fintech world are encouraged to participate.
People enjoy work. Even those who don’t enjoy what they do enjoy the feeling of agency and being able to provide for others. For a world to work where a universal basic income accounts for the bulk of the consumer spending for many people, something else needs to account for the social side of work. It is disappointing to think that we’d have to create make-work for people, but it may be the hard truth.
Disappointing indeed, but the reality is rich countries have been dealing with this problem for decades. A staggering 96 per cent of America’s net job growth since 1990 has come from sectors known to have low productivity (construction, retail, bars, restaurants, and other low-paying services were responsible for 46 percentage points of total growth) and sectors where low productivity is merely suspected in the absence of competition and proper measurement techniques (healthcare, education, government, and finance explain the remaining 50 percentage points):
People enjoy work. Even those who don’t enjoy what they do enjoy the feeling of agency and being able to provide for others. For a world to work where a universal basic income accounts for the bulk of the consumer spending for many people, something else needs to account for the social side of work. It is disappointing to think that we’d have to create make-work for people, but it may be the hard truth.
Disappointing indeed, but the reality is rich countries have been dealing with this problem for decades. A staggering 96 per cent of America’s net job growth since 1990 has come from sectors known to have low productivity (construction, retail, bars, restaurants, and other low-paying services were responsible for 46 percentage points of total growth) and sectors where low productivity is merely suspected in the absence of competition and proper measurement techniques (healthcare, education, government, and finance explain the remaining 50 percentage points):