- Today’s main news: Orchard Platform, Experian partner on big data. Marlette closes $369 ABS transaction. OCC seeks to make banks fintech enforcers. MarketInvoice Q2 results. Dashu Finance raises $117M. BNI Europa enters Portuguese market with Puzzle. TWINO expands into central Asia.
- Today’s main analysis: The state of consumers and technology (a must-read report). International P2P volumes.
- Today’s thought-provoking articles: High-tech, low-effort loans for online shoppers. Why banks, fintechs should collaborate. The attraction of cash. Goldman Sachs is creating an iPhone app for everyone
- Orchard Platform, Experian collaborate on big data challenges. GP:”This is a great move. All loans are underwriten at emission. Credit lines require ongoing underwriting which is already challenging. But as an investor in loans being able to independently check the borrower’s data before you purchase a note is an amazing method to pick and chose what to buy. And on the other side if you do have a portofolio of notes, being able to monitor the borrower’s profiles would allow you to sell notes before they get into default. However the consequence of this system is that it will split the notes into good-to-buy and not-good-to-buy much faster and much more clearly. And once some note investors have the capacity to evaluate the borrower behind the note it will become a must have for all other investors who don’t want to be left holding the worthless notes only. “AT: “This is a smart partnership. I’m glad to see traditional credit bureaus seeing the opportunity in alternative lending.”
- Marlette Funding closes $369M securitization transaction. GP:”Congratulations!”
- The state of consumers and technology. AT: “It isn’t young millennials leading the way on innovation adoption as one might expect. Rather, it’s the 30-39 age group. However, it is the 18-29 age group that is the most technologically savvy. This is a must-read report.”
- High-tech, low-effort loans for online shoppers. AT: “I think the numbers of people interested in instant financing is only going to grow. Already at 47%, that’s a good sign for online retail.”
- Goldman Sachs is creating an iPhone app for everyone. GP:”It seems that Goldman Sachs is going towards being a commercial retail bank. They probably realized that it is much cheaper, faster and easier to sell 10 million people on putting their $10k savings accounts with Goldman Sachs Retail Bank then selling 100 hedge fund managers to put $1bil with Goldman Sachs Investment Bank”.
- Betterment CEO says they could become the Amazon of financial services. GP:”I’ve known John Stein since 2003. I certainly believe in him and his innovation capabilities. I would want to see Betterment apply the same approach they did to the advisory market to a next market now. Maybe the insurance buying market? “AT: “Betterment is a long way from being Amazon. SoFi is much closer.”
- In lending, Next-day payout doesn’t cut it. AT: “Speed, transparency, and security, but not at the expense of customer service. Whoever can get the money into the hands of the borrower first wins.”
- What fintech entrepreneurs can learn from big tech companies. AT: “Excellent insights from one who has made the leap from Google to fintech startup co-founder.”
- Finra fines have skyrocketed for financial advice offenders.
- Two major lending changes mean it’s suddenly easier to get a mortgage.
- Creating a bridge between fintech and FinServ. AT: Essentially a sales pitch for qlik.
- OCC seeks to make banks fintech enforcers. GP:”This is a great approach. It’s like relying on local upraisers and brokers in real estate. This will allow innovation, but also will mean that the rules are applied locally on a case by case basis in a smart way. The OCC continues to support the fintech world. I am very impressed.”
- Bank web lending can be faster and cheaper.
- Payday lender DFC Global taps Wall Street for cash.
- Experian legislative update 160. GP:”Always a very interesting read.”
- Public pensions should weigh pros, cons of alternative investments. GP:”They should allocate some of their highrisk tiny allocation to online lending for sure.”
- Dental service provider provides financing through Lending Club. AT: “There is plenty of untapped opportunity for these types arrangements with local service providers.”
- 18 states sue Betsy DeVos.
- Elevate to release Q2 results on Monday, July 31, 2017.
- Flender celebrates first wave of success with SME loans.
- MarketInvoice sees record-breaking Q2. GP:”Q2 2017 volumes of £161.9m, vs £103 in Q2 2016″
- VPC Specialty Lending fund sees growth but NAV hit. GP:”A fall of 0.68% in NAV”
- Bridging dabblers expected to exit.
- Some top UK platforms went down temporarily.
- How fintech can beat the banks.
- Why banks, fintechs should collaborate.
- International P2P lending volume. AT: “TWINO hit a new milestone.”
- The unconquerable attraction of cash. AT: “We reported on this a few days ago, but charts bring a new perspective to the data.”
- How alt lending startups rewrite traditional lending habits.
- Yes Bank uses AI to offer direct loans to students.
- A look at 7 fintech startups.
- KPMG says fintech is innovator and enabler.
- United States
- Orchard Platform, Experian collaborate on big data challenges (Cision), Rated: AAA
- Marlette Funding Closes $ 369 Million Securitization Transaction (BusinessWire), Rated: AAA
- The State Of Consumers And Technology: Benchmark 2017, US (Bank Innovation), Rated: AAA
- The high-tech, low-effort loans winning over online shoppers (American Banker), Rated: AAA
- Goldman Sachs is working on an iPhone app for the masses (Business Insider), Rated: A
- BETTERMENT CEO: We ‘could become the Amazon of financial services’ (Business Insider), Rated: A
- In Lending, Next-Day Payout Doesn’t Cut It (PYMNTS), Rated: A
- What Fintech Entrepreneurs Can Learn From Big Tech Companies (Entrepreneur), Rated: A
- Finra Fines Have Skyrocketed for Offenders (Financial Advisor IQ), Rated: A
- Two major lending changes mean it’s suddenly easier to get a mortgage (CNBC), Rated: A
- Creating a Bridge Between Fintech and FinServ (qlik), Rated: A
- OCC SEEKS TO MAKE BANKS FINTECH ENFORCERS (Yodlee), Rated: A
- Bank web lending can be faster and cheaper (Banking Exchange), Rated: A
- Payday Lender Taps Wall Street For Cash As Regulations Bite (ValueWalk), Rated: A
- Legislative Update 160 (Experian Email), Rated: A
- Public Pensions Should Weigh Pros and Cons of Alternative Investments (Plan Sponsor), Rated: A
- New Teeth Dental Solutions Provides Exceptional Dental Implant Dentistry (Digital Journal), Rated: A
- 18 States Sue Betsy DeVos for Refusing to Enforce Student-Loan Protections (New York Magazine), Rated: B
- Elevate to Release Second Quarter 2017 Earnings on Monday, July 31, 2017 (BusinessWire), Rated: B
- United Kingdom
- Peer-to-Peer Lender Flender Celebrates First Wave of Successfully Funded SME Loans (Crowdfund Insider), Rated: AAA
- MarketInvoice sees record-breaking Q2 (AltFi), Rated: AAA
- VPC Speciality Lending fund sees income growth but NAV hit (AltFi), Rated: A
- Bridging ‘dabblers’ expected to exit the market (Mortgage Solutions), Rated: A
- Some of the UK’s hottest fintech firms went down, including Monzo and Revolut (Business Insider), Rated: A
- How fintech can beat the banks and offer you competitive savings rates (Startups.co.uk), Rated: B
- PAG, Primavera Lead $ 117M Round In Online Unsecured Loan Lender Dashu Finance (China Money Network), Rated: AAA
- P2P firm Jusheng gets new funding (Shanghai Daily), Rated: A
- European Union
- Challenger Bank BNI Europa Announces “Puzzle”, an Online Lender to Streamline Consumer Credit (Crowdfund Insider), Rated: AAA
- Accel leads Series B round for PayFit (PE Hub), Rated: A
- Why Banks And Startups Should Collaborate On Fintech (Forbes), Rated: AAA
- International P2P Lending Volumes June 2017 (P2P-Banking), Rated: AAA
- The unconquerable attraction of cash (ATM Marketplace), Rated: AAA
- KKR bids $ 500 million for Australian mortgage lender Pepper (PE Hub), Rated: A
- How alternative lending startups are rewriting traditional lending habits in India (India Times), Rated: AAA
- Yes Bank taps AI to directly offer small loans to students (India Times), Rated: A
- Where is fintech headed? Seven start-ups chart their course (livemint), Rated: A
- Fintech is now an innovator and enabler, says KPMG India’s Neha Punater (livemint), Rated: A
- TWINO expands into Central Asia with Kazakhstan loans (IBS Intelligence), Rated: AAA
- Convenience drives growth of South Korean P2P lenders (Asian Review), Rated: A
- Deputy Finance Minister I of Malaysia: Disruption in Banking is The Normal (SAT PR News), Rated: B
Orchard Platform, Experian collaborate on big data challenges (Cision), Rated: AAA
Experian® and Orchard Platform, the provider of data, technology and software to the online lending industry, have joined together to announce a strategic collaboration that will give institutional investors access to Experian’s depersonalized consumer credit data. Orchard’s institutional clients can use depersonalized credit data for ongoing monitoring of borrower creditworthiness for loans in existing portfolios. Experian also will provide access to anonymized historical data sets for enhanced credit modeling, analytics and reporting.
Delivering greater transparency, high-quality data and analytical tools to the market is central to the mission of both companies. Orchard’s institutional clients should benefit from the use of Experian data to not only make more informed investment decisions through refined credit modeling but also through the ability to manage risks more effectively with more current loan data. Experian has been harnessing the power of data for many years to help consumers, financial institutions and governmental organizations make more informed and effective decisions. Raw data without the right level of interpretation is nothing more than untapped potential.
Marlette Funding Closes $ 369 Million Securitization Transaction (BusinessWire), Rated: AAA
Marlette Funding, LLC, a leading provider of online consumer lending platforms and services, announced it has closed its third securitization from its proprietary “MFT” shelf. Approximately $369 million of Best Egg unsecured personal loan collateral was financed via three classes of Notes and one class of Certificates with certain loan sellers retaining risk on a portion of the Certificates.
The transaction was significantly oversubscribed and successfully priced well inside the two previous Marlette sponsored offerings. In this transaction ratings for each of the offered Notes attained one higher category to AA (sf), A (sf) and BBB (sf), respectively, by Kroll Bond Rating Agency (KBRA). Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Deutsche Bank and Citi.
This transaction, in similar vein to MFT 2017-1, involved the sale of loans by Marlette and four other whole loan buyers who accessed the securitization markets via the MFT shelf.
The State Of Consumers And Technology: Benchmark 2017, US (Bank Innovation), Rated: AAA
The US market is fueled by empowered customers, who experiment with and rely on technology. In 2017, for example, 14% of US online adults use a fitness tracker, 8% use a smart speaker with a personal assistant, and 7% use Apple Pay.1 Forrester’s Empowered Customer Segmentation shows that about a quarter of US online adults are Progressive Pioneers, the most empowered consumers who lead the demand for product and experience innovation. Smartphone and tablet usage is now common among mainstream US consumers: Three-quarters use a smartphone, and half use a tablet.
Get the full report here.
The high-tech, low-effort loans winning over online shoppers (American Banker), Rated: AAA
In a study of more than 2,000 consumers conducted by Researchscape and sponsored by Klarna North America, 47% said that when shopping online, they would like to be presented with the option of instant financing.
The customer types in very little information — in some cases, nothing more than a name and email address. No effort is required.
Behind the scenes, Klarna’s underwriting software takes in data from more than 100 sources and uses artificial intelligence to make a credit decision in less than a tenth of a second.
Jim Lofgren, Klarna’s CEO for North America, theorizes that instant loans have become popular as a reaction against widely publicized card fraud and data breaches. Essentially, people are drawn to not having to surrender a bunch of information.
“The phone is only this big and you don’t like the inconvenience of having to pull up the card and keypunch all those numbers in and verify everything every time you want to make a purchase,” Lofgren said. “Instant financing lends itself well to the smartphone environment.”
Aaron Allred, CEO of Acima Credit, a provider of instant leases at the point of sale, gives a lot of credit for the growing U.S. market in the U.S. to Affirm, a startup based here.
Lofgren calls Klarna’s credit issuing platform the “secret sauce of what we do.”
It takes into account more than 180 creditworthiness variables.
Goldman Sachs is working on an iPhone app for the masses (Business Insider), Rated: A
Goldman Sachs, which has been expanding its offerings to retail consumers in recent years, is building an iOS app for its growing crop of digital retail banking services, according to a job listing on the company website.
Here’s the job posting (emphasis added):
“We are looking for an expert iOS developer to work on a greenfield enterprise-grade project delivered on iOS platforms. Our goal in engineering is to facilitate the creative, iterative, and data driven creation of our all digital retail bank. As a Mobile Developer you will be working closely with our marketing team and UX designers to build mobile user experiences which will be A/B tested for effectiveness and impact to our clients. The code you write will reach millions and help redefine the firm.”
BETTERMENT CEO: We ‘could become the Amazon of financial services’ (Business Insider), Rated: A
Betterment, the largest independent roboadviser in the world, with $9 billion under management and 270,000 customers, thinks it might be able to do the same in finance.
Chaparro: Incumbents have had their own robo offerings for years, and they have their big brand and infrastructure to back them up. What makes you so certain Betterment can survive up against such competition?
Stein: For the same reason why we often see those few innovators break out.
You could also ask “Why did Amazon break out and become the dominant online retailer?” — some would say dominant retailer period. And why wasn’t it Barnes and Nobles, Target, or Walmart, or anybody else? It is because Amazon has a specific focus. They didn’t have conflicts with a set of existing infrastructure and systems and people who were built around doing things the old way.
In Lending, Next-Day Payout Doesn’t Cut It (PYMNTS), Rated: A
“So, many of these lenders have been wrestling with this problem for a long time,” said Edwards. “The number one complaint they get after a loan is approved is, ‘Why do I have to wait on my money?’”
That speed factor is why some online lenders may lose market share to competition. If a borrower’s car breaks down and he needs the vehicle to get to work, an online loan that takes a week for funds to transfer to his account won’t be much help. Instead, Edwards said, those borrowers are going to go to someone who can provide cash immediately.
The emergence of push payments and instant funding perfectly addresses this need for lenders. Push payments use the same mechanism as pull payments — only in reverse, moving funds from a business to a consumer. They deploy existing rails to do this, instantly transferring funds to credit and debit cards or a PayPal account.
For Ingo Money, API technology has been critical to making it easy for lenders and other companies to deploy push payment capabilities.
What Fintech Entrepreneurs Can Learn From Big Tech Companies (Entrepreneur), Rated: A
You may have heard of a number of successful “big tech” execs leaving behind great jobs at companies like Apple and Google to develop a new passion project in fintech. The trajectory from big tech to fintech is becoming increasingly common. What makes for a successful transition and what can big tech folks take with them in their new ventures?
This is a lesson I learned repeatedly at Google. What you are trying to do as a company, and often as a team within a company, matters. It’s not simply having a mission, but having a mission that galvanizes others to action.
Leverage the “tech method.”
A huge lesson I learned from my career is the benefit of building a platform that empowers an ecosystem. Think about Android, AirBnB or Amazon. If your business model is designed to benefit other participants in the ecosystem, rather than competing with them, it can have far-reaching impacts that turn an industry in your favor. If you can create a system that connects buyers, sellers, service-providers, etc., you have the ability to change how that industry functions.
Use your network.
Leverage your network in a way that also allows them to participate in your cause. The successful big tech to fintech pioneers do not view the companies they have left as something in the past, but rather an ongoing support group.
We do lots of things, but one amusing yet somehow successful example is taking pictures of people wearing our PeerStreet hats.
Finra Fines Have Skyrocketed for Offenders (Financial Advisor IQ), Rated: A
The industry’s self-regulator imposed 624 monetary sanctions in 2016 – a 10% drop from the 691 it doled out the year prior, according to the report. But revenues from fines grew to $173.8 million in 2016 from $80 million in 2015, according to the regulator.
Finra also ordered firms to pay back $27.9 million in restitution to investors last year, according to the report. The fines helped the regulator post net income of $57.7 million in 2016, compared to a net loss of $39.5 million the year prior, Finra says.
In addition to a boost from fines, the regulator’s portfolio returns grew $70.9 million year-on-year, according to the report.
First, the nation’s three major credit rating agencies, Equifax, TransUnion and Experian, will drop tax liens and civil judgments from some consumers’ profiles if the information isn’t complete. Specifically, the data must include the person’s name, address, and either date of birth or Social Security number.
Of about 220 million Americans with a credit profile, approximately 7 percent have liens or civil judgments against them. With these hits to their credit removed, their scores could go up by as much as 20 points, according to a study by credit rating firm Fair Isaac Corp. (FICO).
In addition to the FICO changes, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.
Creating a Bridge Between Fintech and FinServ (qlik), Rated: A
With this in mind, I recently set out to create examples of utilizing the Qlik platform in the Fintech space.
Ripple distributed financial ledger:
Working with our Qlik partner (Pomerol Partners) we utilized the Restful API’s provided by Ripple to access all 8.7 million payments transacted on the Ripple platform.
Lending Club peer-to-peer lending and alternative investing:
Whether it is Fintech, Insurtech, Regtech or any other new & exciting technology, there is one certainty…the data from these systems will need to be combined with other information to get a complete picture of the customer relationship, profitability and risk profile of the business.
OCC SEEKS TO MAKE BANKS FINTECH ENFORCERS (Yodlee), Rated: A
But, even amidst serious uncertainty with regard to the future of a federal charter for certain fintech firms, the OCC continues to demonstrate that it has every intention of continuing to expand its jurisdiction over the fintech market. Earlier this week, the agency released supplementary guidance to its risk management bulletin on third-party relationships for federally regulated banks. The new guidance very broadly defines third-party relationships as “any business arrangement between the bank and another entity, by contract or otherwise.” The guidance further notes that “If a fintech company performs services or delivers products on behalf of a bank or banks, the relationship meets the definition of a third-party relationship,” and the OCC would require that the bank include that fintech firm as part of its OCC-supervised third-party risk management process.
Bank web lending can be faster and cheaper (Banking Exchange), Rated: A
The company, with four subsidiary banks in New York and Pennsylvania, continues to do a traditional community banking business. Yet, just as every local retailer is potentially competing with Amazon and Walmart.com, Tompkins and other commercial lenders face competition from the likes of Kabbage and other business-oriented online lenders that promise fast online service with minimal hassle.
A year and a half ago, the parent company began evaluating web-based services from outside vendors that could help its subsidiary banks deliver what customers desired. What they found was a service that could integrate with their existing systems and credit standards—as a pure technology play, not a substitute for the bank’s own lending.
In January the company began rolling out Lightning Loans, beginning with the Tompkins VIST affiliate.
Payday Lender Taps Wall Street For Cash As Regulations Bite (ValueWalk), Rated: A
As lenders grow, they’re turning to the ABS market for funding as a natural step of diversifying. Securitisation trades began in 2014 and are slowly gaining traction around the world. Last year, P2P Global Investments Plc and Zopa Ltd. produced Europe’s first securitization of unsecured consumer loans originated online. The $179 million transaction was backed by 27,137 lines from individuals. This deal followed Funding Circle’s first securitization of peer-to-peer loans, comprising small-business debt — another first for Europe.
And as the pace of securitization picks up for peer-to-peer, other short-term non-traditional lenders are looking to get into the market. According to the June 30 issue of the Asset-Backed Alert, payday lender DFC Global is eyeing securitization as a funding source.
At least one other payday lender, Check ‘n Go, is known to be looking at the asset-backed bond market as a funding source.
Legislative Update 160 (Experian Email), Rated: A
- The CFPB estimated in its May 2015 study “Data Point: Credit Invisibles” that more than 45 million American consumers are credit invisible, meaning they either have a thin credit file that cannot be scored or no credit history at all.
- On June 8, the US House of Representatives passed the Financial CHOICE Act on a strictly partisan vote with Republicans supporting the bill and Democrats opposing it. In addition to making broad changes to the Dodd-Frank Act, the bill would substantially transform the CFPB into an enforcement agency by repealing the Bureau’s supervision authority, abolishing the UDAAP provision
and prohibiting the public disclosure of complaint data.
- On June 12, the US Treasury Department released a report on the Administration’s priorities for financial regulatory reform. The report was requested as part of the President’s February Executive Order on Dodd-Frank Reform.
- Massachusetts H.B. 157 stipulates that no person or company engaged in trade or commerce shall have a right to obtain, possess, sell, lend, distribute, disseminate or use any person’s account number without his/her prior written permission. Account number is defined to include each person’s social security number, driver’s license number, license plate number, bank account number, credit card number, account number at a retail store which sells goods or services, account number at a business which sells goods or services on-line, telephone number and all other account numbers of all kinds and varieties.
See the full legislative update here.
Public Pensions Should Weigh Pros and Cons of Alternative Investments (Plan Sponsor), Rated: A
The allocation to alternative investments more than doubled from 9% to 24% during 2005 to 2015, according to data by the Public Plans Database (PPD), which accounts for more than 95% of pension assets. Between 2010 and 2016, traditional equity returned about 14% compared to private equity at 25% minus fees.
In 2005, for example, the maximum share held in alternatives by any plan was less than 30% and half of plans held less than 10%. As of 2015, however, the maximum allocation among plans was more than 50%, and only 9% of plans held less than 10% in alternatives.
New Teeth Dental Solutions Provides Exceptional Dental Implant Dentistry (Digital Journal), Rated: A
Another unique service that New Teeth Dental Solutions offers is their financing options. Dental service is considered a compulsory service to all people, and at a patient’s convenience, the clinic provides a choice between dental loans (CareCredit, Healthcare lending) and patient financing plans (Lending Club) that allow a low monthly payment with no down payment for at least three to seven weeks.
18 States Sue Betsy DeVos for Refusing to Enforce Student-Loan Protections (New York Magazine), Rated: B
Federal law already allows borrowers to apply for loan forgiveness if they attend a school that deployed fraudulent advertising or violated state consumer-protection laws. But the process for securing such forgiveness can be cumbersome. And some schools limit their students’ capacity to win settlements in fraud cases, by forcing them to pursue justice through arbitration instead of the court system.
These defects became conspicuous during the Obama administration’s final years, as hundreds of for-profit colleges collapsed amid accusations of widespread fraud. The demise of the mega-chain Corinthian Colleges, alone, led to more than 15,000 loan discharges, totaling $247 million.
Eighteen states and the District of Columbia reject that rationale. On Thursday, 19 Democratic attorneys general, led by Massachusetts’s Maura Healey, filed a lawsuit against the Trump administration in federal court, accusing DeVos of refusing to enforce duly enacted regulations in violation of the Administrative Procedures Act. They are hoping to convince a federal judge to order the administration to implement the new rules.
Elevate to Release Second Quarter 2017 Earnings on Monday, July 31, 2017 (BusinessWire), Rated: B
Elevate Credit, Inc. today announced that it will release its second quarter 2017 financial results after the market closes on Monday, July 31, 2017.
Peer-to-Peer Lender Flender Celebrates First Wave of Successfully Funded SME Loans (Crowdfund Insider), Rated: AAA
The recently launched peer-to-peer lending platform, Flender, announced on Thursday it is celebrating the successful funding of its first batch of SME loans. According to the online lender, companies that received their requested funding include one of Europe’s fastest growing lingerie retailers, a café, and coffee roasting chain, a further education provider and developers of non-toxic disinfectant technology.
MarketInvoice sees record-breaking Q2 (AltFi), Rated: AAA
The growth builds on its previous record set in Q1 2017, with the firm funded invoices worth £161.9m in Q2 2017 providing UK business with critical working capital.
June 2017 was the company’s busiest ever month funding invoices worth £64.2m. The value of invoices funded is up 57.2 per cent from £103m (Q2 2016) to £161.9m (Q2 2017), and the current cumulative value of invoices funded stands at £1.34bn.
VPC Speciality Lending fund sees income growth but NAV hit (AltFi), Rated: A
The £350m VPC Speciality Lending fund saw a fall in its net asset value [NAV] of 0.68 per cent in May after a 0.62 per cent income return but a -1.3 per cent capital loss. It’s income return was the fifth consecutive payout increase.
Bridging ‘dabblers’ expected to exit the market (Mortgage Solutions), Rated: A
Earlier this week, asset finance lender Borro announced it was leaving the bridging sector with new chief executive officer John Allbrook citing overcrowding in the market as the reason for the decision.
“However, if you are well funded and provide a first-class service there is plenty of business. I suspect the cost of funding was prohibitive for Borro which was only a small player. Potentially others will exit this market, such as the ‘dabblers’ who may excel elsewhere but have been drawn into the property market seeing the potential returns while not realising what is involved and how competitive it is.”
Some of the UK’s hottest fintech firms went down, including Monzo and Revolut (Business Insider), Rated: A
A number of UK fintech startups encountered technical issues on Thursday, warning customers that their payments may not go through.
App-only banks and firms including Monzo, Revolut, Loot, Starling Bank, and Curve all ran into problems due to a supplier that provides some of their underlying technology.
How fintech can beat the banks and offer you competitive savings rates (Startups.co.uk), Rated: B
Rather than the modest 0.1% or 0.5% offered by most banks, the alternative saving and investment sectors have seen significant growth, offering rates of up to 15% per annum.
This is currently one of the most popular ways to obtain a higher interest rate, with the peer-to-peer (P2P) lending industry estimated to reach £7bn in 2017.
This allows you to pitch to purchase a stake in a small business or start-up. Usually through a platform like Crowdcube, the business states how much of a stake they are willing to give up based on their valuation e.g. 7% or 15%.
|Product||Savings Rate||Per £1,000 per annum||Source|
|Peer to peer loans||3.3% to 9.9%||£1,033||Zopa|
|Innovative Finance||8%||£1,080||Innovative Finance ISA|
|Business loans||10% to 15%||£1,150||Rebuilding Society|
|Guarantor loans||10%||£1,100||Guarantor My Loan|
|Equity Crowdfunding||1% to 20%||Depends||Crowdcube|
PAG, Primavera Lead $ 117M Round In Online Unsecured Loan Lender Dashu Finance (China Money Network), Rated: AAA
Asian alternative investment management firm PAG and China-focused private equity firm Primavera Capital Group have led a RMB800 million (US$117 million) series C round in Dashu Finance, a Shenzhen-based online lender of unsecured loans to small and micro enterprises that traditionally could not secure funding from banks.
Dashu specializes in credit analysis based on big data, a method traditionally applied only to credit card loans and micro loans. It has issued over RMB200 billion in accumulated unsecured loans to individuals over the past several years, it said in an announcement.
In addition, Dashu offers its credit analysis tools to traditional financial institutions such as banks. To date, it has helped commercial banks issue micro loans worth roughly RMB10 billion. The cumulative non-performing loan ratio of these loans is around 2.3%, it says.
P2P firm Jusheng gets new funding (Shanghai Daily), Rated: A
ONLINE finance firm Jusheng Assets announced yesterday in Shanghai to finish a new round of finance, which made its registered capital hit 300 million yuan (US$43.5 million) and triple the previous level.
The new investor Zhejiang Fengzhou has core business in tourism, hotel and construction materials, which will help the platform find projects related to consumption upgrade as the national strategy, said Yang Dengpeng, chairman of Jusheng.
Challenger Bank BNI Europa Announces “Puzzle”, an Online Lender to Streamline Consumer Credit (Crowdfund Insider), Rated: AAA
Announced today, “Puzzle“, as it has been named, is the first totally digital and real time credit application in the Portuguese market.
“Puzzle” offers credit of up to three thousand euros with different payment maturities and is intended to be a quick response to small credit needs.
Accel leads Series B round for PayFit (PE Hub), Rated: A
PayFit, which simplifies payroll management and core HR processes for SMBs, announces that it has closed a €14 million Series B investment led by global venture capital firm Accel, with participation from Xavier Niel and Otium Venture.
Founded just one year ago, the startup has grown to have more than 600 clients and a team of more than 40 employees. This round will enable PayFit to continue to expand its suite of digital HR processes, kickstart its international expansion, with an initial focus on Europe, and double its workforce by 2018.
PayFit’s ambition: become the go-to solution to manage core HR and payroll processes for SMBs in Europe
PayFit drastically simplifies payroll management, which can be complex, expensive and time consuming for businesses of all sizes, particularly SMBs in countries with complicated labor laws. PayFit’s Software-as-a-Service solution is fast, intelligent, intuitive and automated. It allows employers to easily manage payroll on their own, saving time and money, and comply with local labor laws without having to be a payroll expert.
Accelerating internationalization – first step: Europe
The startup is planning to launch internationally with an initial focus on Europe. Rollout will begin with Spain, Italy, Germany and the United Kingdom. Markets with labor laws that can be as complex as those in France are a particular focus, as PayFit can bring significant core HR and payroll improvements to local businesses. In each market, PayFit will launch a fully localised version of its solution, covering all relevant regulations.
Why Banks And Startups Should Collaborate On Fintech (Forbes), Rated: AAA
Volume migration to pure digital players remains in the low single digits in the US, multiple challenger banks in the UK are facing funding and regulatory issues before they are even out of the gate, and many of the more successful fintech insurgents have been bought by incumbent banks just as they matured into legitimate competitors. Disruption of the banking industry hasn’t turned out to be a dramatic big bang; instead, the erosion of bank profitability by low interest rates and increased regulatory costs has triggered an industry-level response in which banks are using technology to improve efficiency and the customer experience. Instead of going extinct, the dinosaurs have been evolving.
London-based TransferWise, which allows consumers to transfer money internationally at a fraction of the traditional cost, is actually disruptive because it lowers fees by smart trade matching between buyers and sellers.
But TransferWise is an exception. Most fintechs have struggled to create sustained competitive differentiation.
This doesn’t mean that banks can be complacent. The asteroid strike on the banking industry is still possible, but is far more likely to come from existing tech giants than small startups. Amazon is now lending a billion dollars a year to merchants on its platform, a drop in the ocean for the largest commercial banks, but a statement of intent. While it hasn’t happened yet, Accenture research suggests that the combined disruption from fintech startups and Google, Apple, Facebook and Amazon could cause full-service banks in developed markets to lose about 35% of their market share over the next five years.
International P2P Lending Volumes June 2017 (P2P-Banking), Rated: AAA
The unconquerable attraction of cash (ATM Marketplace), Rated: AAA
An online survey of consumers in France, Germany, Israel, the U.K. and the U.S. poll revealed that fintech does appear to be gaining traction, with Israel emerging as a leader in early-adoption, according to a press release.
Nevertheless, cash remains king in most of these countries. For instance, in Germany, 75 percent of adults still use paper currency and coins to make purchases at least once a week.
What is more, nearly 1 in 10 Israeli adults say they have used alternative financing or lending services within the last 12 months.
KKR bids $ 500 million for Australian mortgage lender Pepper (PE Hub), Rated: A
U.S. private equity giant KKR & Co LP moved to bolster its presence in Australia’s lucrative mortgage market on Wednesday, joining a rush of players hungry for a slice of a property boom even as the sector shows early signs of slowing.
KKR Credit Advisors LLC made a $500 million bid for non-bank lender Pepper Group Ltd at an indicative price of A$3.60 per share, a 4 percent discount to Tuesday’s close. Pepper shares sank 7.2 percent to A$3.48 on Wednesday.
How alternative lending startups are rewriting traditional lending habits in India (India Times), Rated: AAA
People like Desai form the key clientele for financial-technology startup MoneyTap, which has developed a lending product called Credit Line—essentially, it assigns Rs 25,000 to Rs 5 lakh to a borrower deemed eligible for a loan.
The startup has nearly 300,000 registered users in about six months of launch. Like MoneyTap, which recently raised about $9 million from Sequoia India and others, a dozen-odd startups have attracted a string of investors to back them in the past few months.
EarlySalary secured $4 million from IDG Ventures and Diwan Housing Finance, and PaySense recently raised $5.3 million from Jungle Ventures.
The lending models are diverse—to allow customers to buy online; to buy consumer durables from regular stores; providing salary advances; or helping cover unplanned requirements such as medical bills.
Yes Bank taps AI to directly offer small loans to students (India Times), Rated: A
Yes Bank has partnered with fintech startups like Redcarpetup, Anytime Loans and FRS Labs among few others to adopt innovative technology based solutions for various businesses, such as lending, anti-fraud detection and easier customer onboarding processes.
Redcarpetup will allow the bank to lend to students, which is something banks have never done before. The technology company has identified about 100 colleges in the National Capital Region and underwrites applicants on the basis of the college, the type of course, their education background and their social circle.
Anytime Loans is an automated P2P lending platform that uses artificial intelligence to read facial features and feed it into a predictive model that determines the borrower’s propensity to default. The company has disbursed Rs 68 crore over the last 30 months to 38,700 entities for personal loans, business loans and education loans. Its gross defaults are at a low 0.6 per cent.
Where is fintech headed? Seven start-ups chart their course (livemint), Rated: A
Atyati Technologies: Mobile delivery
Bengaluru-based Atyati Technologies Pvt. Ltd, is a technology platform provider for the rural banking sector in India.
The company’s long-term vision is to have more services and products—custom lending products, insurance, e-tailing, etc.—across more geographies and more points of service, besides achieving quality-of-service levels in remote areas that are on a par with those in the metros.
FinBox: Banking on apps
This fintech aims to increase the revenue of lenders by increasing the number of customers on their books by reducing the cost of acquiring and servicing the loan—which it essentially does by building software tools such as application programming interfaces (APIs) and software development kits (SDKs).
The goal of FlexiLoans, the fintech platform run by Mumbai-based FlexiLoans Technologies Pvt. Ltd, is to provide working capital financing to small- and medium-sized businesses in India that are currently underserved by traditional institutional channels due to lack of collateral or inadequate credit history.
FundExpert: Robo adviser
Gumption Labs Software Solutions Pvt. Ltd, which launched FundExpert’s automated investing platform in 2016, wants to make monitoring investments “super-easy, using algorithms”.
IndianMoney.com: Financial guidance
Today, IndianMoney.com boasts of being “India’s largest financial education company”, with over 200 employees, serving 80,000 financial intermediaries and 3 million consumers.
KrypC: Blockchain riders
This fintech provides blockchain technology solutions to various organizations to enable them “to utilize blockchain features such as privacy, security and trust”, among others.
Turtlemint: Insuring its future
Touted as India’s first online-offline insurance platform, Turtlemint is building a pan-India network of offline partners and, according to co-founder and CEO Dhirendra Mahyavanshi, has been “a pioneer” in the online insurance aggregation domain with offerings like ‘match score’, ‘policy recommender’, ‘renew in a snap’, etc.
Fintech is now an innovator and enabler, says KPMG India’s Neha Punater (livemint), Rated: A
“This industry is definitely a force to reckon with,” Punater added, pointing out that the global annual growth of the fintech sector at 55% is not led by volume expansion but by investment, which shows investor confidence in the space. “Compared to about 12,000 global start-ups, there are about 900 Indian fintech firms—and over 120 of them were started in 2016 alone. An investment of $2.25 billion has been infused into Indian fintechs from 2010 to 2016,” she added.
The Indian fintech market, according to her, typically mirrors global trends. “Payments-related companies have the highest market share at 25% in India and in the world. Payments, lending and wealth management are growing, while P2P (peer-to-peer) lending, blockchains and payment banks are still nascent. Many payments-related activities are still in the business-to-consumer space but we haven’t seen much happening on the business-to-business side,” she added.
According to Punater, wealth tech is the third-largest sector in the fintech space and is still relatively small.
TWINO expands into Central Asia with Kazakhstan loans (IBS Intelligence), Rated: AAA
TWINO, a European peer-to-peer lending platform, has announced that it has started to list short-term loans via its Kazakhstan originator.
Kazakhstan is the sixth country to appear on the peer-to-peer lender’s platform. It is also the first time a European peer-to-peer lender has expanded into Central Asia.
The Kazakh loans have a duration of one month and will offer investors a return rate of 11% per annum.
Convenience drives growth of South Korean P2P lenders (Asian Review), Rated: A
The Korea P2P Finance Association said that accumulated loans of its 56 members reached 1.2 trillion won in June, up 665.1% from a year ago when the total reached 152.6 billion won. Month-on-month, total loans rose 17.5%.
“It is very convenient. Borrowers can get short-term loans quickly while investors enjoy higher profitability,” said Kim Soo-hyun, an analyst at Shinhan Finance Investment. “They may threaten banks’ business in the long term, if they become equipped with more advanced technology infrastructure.”
Lenders focusing on real estate projects are leading the market, with the biggest lender, Tera Fintech, accounting for 147.5 billion won of total loans in June, followed by Roof Funding with accumulated loans of 114.3 billion won.
Deputy Finance Minister I of Malaysia: Disruption in Banking is The Normal (SAT PR News), Rated: B
In a room of over 200 senior level bankers, Deputy Finance Minister I, YB Dato’ Wira Othman Aziz made a call to Malaysian banks during his opening speech at the 9th BankTech Asia Conference & Exhibition, an event co-organized by Knowledge Group of Companies, to disrupt themselves before others do it for them.
Quoting recent studies from Gallup which states that more than half of Malaysian banking consumers are indifferent towards their primary banks, YB Dato’ Wira Othmanbrought attention to this point to illustrate the industry’s need for an overhaul to remain relevant.