Friday February 2 2018, Daily News Digest

Groundfloor repayment timelines

News Comments Today’s main news: Alibaba acquires 33% stake in Ant Financial. MPL issuance grew by 100% year-over-year in Q4 2017. RateSetter prepares investors for IFISA launch. Bitbond launches alt investment fund with 1741 Fund Management. Today’s main analysis: An empirical analysis of Groundfloor’s loan vintages. International P2P lending volumes for January 2018. Today’s thought-provoking articles: The effect of […]

Groundfloor repayment timelines

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Africa

News Summary

United States

PeerIQ 4Q17 securitization tracker shows growth of marketplace lending industry (Bankless Times), Rated: AAA

Ten marketplace lending securitizations priced this quarter totaled $4.4 billion, a record for quarterly issuance, head of research Ashish Dole said. That is 100 per cent growth in issuance over the same quarter in 2016. Cumulative issuance is now $28.2 billion from 106 deals.

THE EFFECT OF ORIGINATION GROWTH ON QUALITY: AN EMPIRICAL ANALYSIS OF LOAN VINTAGES (Groundfloor), Rated: AAA

As we addressed those limitations by qualifying our offering with the SEC and raising our first round of venture capital funding in 2015, new critics emerged to say that while we might be able to lend in a local market at a small scale, we could never lend nationwide in very large numbers without compromising loan quality. In 2016, we set out to build a lending operations team (including risk management, underwriting, and asset management) with the professional expertise, policies, tools and processes to do just that. Our aim was to improve loan quality and volume simultaneously, well beyond our home market.

How have we done?

Vintages

Vintage A is composed of 88 relatively small, mostly local Atlanta-area loans originated during Groundfloor’s formative years, a period of 30 months (2.5 years).

Vintage B, by contrast, is composed of 222 loans that were originated following our addition and application of greater lending expertise. This vintage is more than 2.5X larger, and was originated over the course of 24 months (two years, a 20% shorter period of time).

Source: Groundfloor

Performance Measure #2: Timeliness of Repayment

For each vintage, we analyzed when loans repaid in relation to their maturity dates. Here is a comparison of the timeliness of repayment for Vintage A and Vintage B, with percentages provided to break down the share of repaid loans.

Source: Groundfloor

Here is a snapshot of the situation as of December 31, 2017:

Source: Groundfloor

Juniper Square raises $ 6M for its real estate investment platform (TechCrunch), Rated: A

Juniper Square, which today announced it has raised a $6 million Series A round led by Felicis Ventures, is tackling the real estate investment side by helping investment managers raise and manage outside capital for their projects.

Today’s funding round brings the company’s total funding to date to $8 million; the company plans to use the new influx of capital to accelerate its product development and grow its team to better service its user base.

Overstock Introduces Robo-Advising Investment Platform tZERO Advisors (Crowdfund Insider), Rated: A

Overstock.com, Inc. (NASDAQ:OSTK) has introduced a digitally-driven investment platform (aka robo-advising), presented by tZERO Advisors. The service is accessible to investors through the online retailer’s FinanceHub. For a monthly fee of $9.95, investors can either select from a group of pre-established Adaptive Dynamic Portfolios matched to their investment profiles, or create a customized blend of these portfolios.

States mull loosening of laws in response to CFPB payday rule (American Banker), Rated: A

The Consumer Financial Protection Bureau’s payday loan rule was supposed to reduce the number of Americans who get mired in debt they can’t afford.

But in an ironic twist, the 4-month-old rule is being used in state legislatures to justify the creation of a new category of loans that would be even costlier for many borrowers.

One such bill in Florida has zipped through three legislative committees in recent weeks. The Indiana House of Representatives voted to pass a similar measure Wednesday.

Bradley Strock, PayPal CIO, Joins Elevate’s Board of Directors (BusinessWire), Rated: A

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that Bradley Strock has joined its Board of Directors, effective immediately.

Mr. Strock joined PayPal in 2011 and since 2014 has been its Chief Information Officer.

Chase is using memes and GIFs to bring millennials to QuickPay (Tearsheet), Rated: A

JPMorgan is focusing its Zelle efforts on millennials, despite the platform outwardly claiming it’s not targeting that age group.

Chase will soon roll out an animated GIF campaign on social media as the second part of its Quick Pay with Zelle campaign.

With Chase QuickPay with Zelle, they can set recurring payments so you never wait for rent again. The best part? It’s already in your Chase Mobile app.  href="https://t.co/tQyDUm75Hf">pic.twitter.com/tQyDUm75Hf

In 2017 Chase saw a nearly 50 percent increase in p-to-p transactions — which includes all transactions before and after it joined the Zelle network — and a 15 percent increase in enrollments.

On Monday Zelle reported it transacted $75 billion across its member banks in 2017. Venmo processed $30 billion in the same period.

Subcommittee hearing looks at challenges, opportunities with fintech (Financial Regulation News), Rated: A

The House Subcommittee on Financial Institutions and Consumer Credit convened this week to discuss opportunities and challenges in the financial technology, or fintech, market.

“From online lending and payment companies to blockchain and cryptocurrencies, advances in financial technology are changing the way financial markets work and how consumers access credit,” Subcommittee Chairman Blaine Luetkemeyer (R-MO) said.

“Fintech lenders present an opportunity to expand credit access and quality. Although such lenders should be subject to appropriate regulation, the regulation must work with the fundamental economic reality of the market,” said Brian Knight, director of the program on financial regulation and senior research fellow at Mercatus Center, George Mason University. “Ensuring that regulations do not burden fintech lenders more heavily than their bank competitors are burdened and that the validity of their loans is not in doubt are important steps toward helping realize the promises of innovation.”

EquityBuild Launches New Website Showcasing Their New Revolutionary Hybrid Capital Fund (PR Web), Rated: A

EquityBuild announces the launch of their completely new website and newest investment product EquityBuild Fund.This site is dedicated to the company’s new revolutionary hybrid capital fund only available on their platform.

How to boost your monthly income: The easy way (Augusta Free Press), Rated: A

Safe investments are a real thing, and there cannot be a more secure way of investing in interest rates at a lending club. However, the alternative for which you must search is a peer-to-peer lending platform, where investors finance loans and then get interest rates as high as 10% on a yearly basis.  For instance, you could start with an initial deposit of $2,500, as the starting investment rate is 25%.

Cryptocurrency passive income is a thing – And you should try it

  • Decred – Decred is a self-funded crypto platform, where investors have a share of the platform’s currency even at the very beginning.
  • AKR – is a mining platform which offers each investor, even at the beginning of their journey a “delegated proof of work”. It works literally all around the clock and you virtually have to put NO EFFORTS.
  • NEO – another passive crypto income for those searching to round a bit their monthly income. The network works on “Gas” – this is the name of this small cryptocurrency.

Square shares climb after the payments company launches bitcoin trading for most users (CNBC), Rated: B

Nearly all users of Square‘s Cash payments app can now buy and sell bitcoin on the platform, CEO Jack Dorsey announced Wednesday.

The service will not be available for customers in New York state, Georgia, Wyoming and Hawaii, according to Square’s website.

LendingPoint Names Antonio Martino as New Chief Financial Officer (BusinessWire), Rated: B

LendingPoint, the online balance sheet lender and provider of the LoanHero point of sale financing platform, today announced that Antonio Martino has joined the company as its Chief Financial Officer (CFO).

Martino is a financial industry leader with more than 25 years of experience spanning 10 countries. Most recently he was Director, Citi Corporate Treasury, where he had global oversight roles within the asset liability management and balance sheet management processes for Citibank, N.A. Previously, Martino served as CFO of Citibank in Turkey and across Central Europe, with roles in Istanbul and Budapest, Hungary. In addition, Martino was Finance Director of Citibank Poland’s consumer banking division in Poland and Vice President of Finance within Citibank credit card business in Canada. Martino started his career in public accounting with Ernst & Young.

United Kingdom

RateSetter starts preparing investors for IFISA launch (P2P Finance News), Rated: AAA

RATESETTER has begun emailing existing investors to get them ready for the launch of its Innovative Finance ISA (IFISA) this month.

The peer-to-peer lender sent messages to its customers on Thursday revealing that the IFISA would be made available to investors in the order they opened accounts.

Innovative Isas finally take off (MoneyWeek), Rated: A

The new innovative finance individual savings accounts (IF Isas) raised just £17m in the 2016-2017 tax year, their first year of operation, but the figure for 2017-2018 looks set to be a lot higher, says HM Revenue & Customs. IF Isas enable savers to use their annual Isa allowance to invest through peer-to-peer (P2P) lending platforms, which match investors looking for income with borrowers who need a loan.

In all, more than 30 platforms now offer the product, and providers report high demand – so much so that the market’s potential size in 2017/2018 may be limited only by the platforms’ ability to source enough borrowers who want to take out loans from investors wanting to lend.

Folk2Folk launches local lending movement (Bridging&Commercial), Rated: A

The local lending movement has been created by the peer-to-peer lending platform to build and sustain socially and financially successful rural communities.

Folk2Folk intends to incorporate this ethos into its behaviour and activity.

The movement involves the participation and support of the platform’s lenders and borrowers, legal and accountancy partners, local authorities, MPs, chambers of commerce, local enterprise partnerships, surveyors, land agents, local cooperatives, leisure and tourism platforms, interest groups, community associations, charities, business groups and banks.

Novae GC joins payday lender Wonga after company takeover (The Lawyer), Rated: A

Payday loan company Wonga has hired a new general counsel following the departure of Bill Flynn after nearly three years.

Goji celebrates first year of investment bond (Bridging&Commercial), Rated: B

Goji has reported a strong first year for its diversified lending bond, which has yielded a net return of 6% to investors.

The Business Funding Show closes the funding knowledge gap (KCW Today), Rated: B

The only funding exhibition in the UK and EU is returning to London for its third year. The Business Funding Show will be held on 22nd February 2018 at East Wintergarden and will connect entrepreneurs to top funders and service providers through conference talks,  an exhibitor showcase, and one-to-one investment clinics.

BFS aims to bring awareness to entrepreneurs about alternative funding options, from crowdfunding and peer-to-peer lending to business angels and venture capital. The event saw a 33% increase in attendance in 2017, a figure the organisers aim to surpass this year.

China

Alibaba nabs 33% stake in Alipay operator A (IT Brief), Rated: AAA

With Alipay and Alipay Wallet under its umbrella, the company also runs 4 other major businesses: Yu’e Bao, Zhao Cai Bao, Ant Credit, and MYbank, a cloud based online lender the company was in the middle of establishing at the time of the name change.

Now, Alibaba Group Holdings has announced it will strengthen its strategic relationship with Ant Financial by acquiring a 33% equity stake in the company. The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.

Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial.

Alibaba-backed online lender MYbank owes cost-savings to home-made tech (The Star), Rated: A

MYbank, a Chinese online lender that is an offshoot of Alibaba Group Holding Ltd, has built its business on doing things cheaply.

The bank says it can deliver loans to borrowers across China at lightning speeds for up to 1,000 times less than it would cost brick-and-mortar banks to do so.

MYbank employs about 300 people, half of whom are technicians.

As a result, the cost of approving a small business loan can be as little as 2 yuan (RM1.24), compared to at least 2,000 yuan (RM1,239) at a traditional bank, according to data provided by the bank. MYbank has built its technological infrastructure with Chinese-made technology, avoiding more expensive products from companies like IBM Corp, Oracle Corp and Dell EMC, which form the network backbone for much of China’s finance sector, Huang said.

MYbank is one of a handful of Chinese lenders – along with Tencent Holdings Ltd’s WeBank – that are founded completely with private investment. Since mid-2015, MYbank has served more than 7 million small business owners, Huang said. The bank is seeking to expand its network to include China’s 70 million to 100 million small businesses under-served by traditional financial institutions.

The bank’s net interest margin – around 3% to 5% – is higher than those for China’s major banks, which target large state companies, Huang said.

 

European Union

Bitbond Launches Alternative Investment Fund in Partnership with 1741 Fund Management (Finovate), Rated: AAA

Peer-to-peer small business financing platform Bitbond has entered into a partnership with 1741 Fund Management to launch an alternative investment fund.

European Alternative Finance Market Expanded by 41% in 2016, P2P Consumer Lending Leads (Crowdfund Insider), Rated: AAA

The European online alternative finance market grew by 41 per cent to 7.7 billion euros in 2016, according to the 3rd annual European Alternative Finance Industry Benchmarking Report by the Cambridge Centre for Alternative Finance. The report entitled “Expanding Horizons” indicates that online alternative finance showed growth in new areas across Europe.

For country-specific numbers, click here.

Among other findings of the report:

• Institutionalization grew considerably from 2015 to 2016, with 45 per cent of peer-to-peer consumer lending and 29 per cent of peer-to-peer business lending funded by institutions such as banks, pension funds and asset management firms.

• Online alternative finance for business continued to grow, providing 1.14 billion euros to more than 14,000 businesses throughout Europe. Debt models including peer-to-peer business lending accounted for 67 per cent of business finance, while equity models accounted for 27 per cent.

• Estonia ranked first for alternative finance volume per capita for the second year in a row, at 63 euros, followed by Monaco (51 euros) and Georgia (28 euros).

• Countries in which platforms believe that existing regulations are adequate are more likely to show higher levels of alternative finance per capita and a larger share of business funding.

• While overall perceptions of regulatory adequacy are divided, the greatest discontent concerns laws governing equity-based crowdfunding

• Two types of risk are of greatest concern to European alternative finance platforms: a potential collapse of a well-known platform due to malpractice, and fraud involving one or more high-profile transactions.

Bob Diamond to join board of Corrado Passera acquisition vehicle (Financial Times), Rated: A

Bob Diamond plans to join the board of a €600m acquisition vehicle chaired by Corrado Passera, which listed on Thursday, bringing together two of Europe’s best known ex-bankers to buy an Italian lender to small businesses.

After the cash shell’s initial public offering on Thursday, Mr Passera told reporters in Milan that it had shortlisted five small Italian lenders and would complete the acquisition of one of them for up to €60m — allowing it to become a bank.

The plan is to turn the small bank into an online lender to small businesses and a merchant bank, which will buy non-performing loans from other banks and parcel them up before selling them on to institutional investors.

 

Italy’s SPAXS shortlists five banks in acquisition hunt (Reuters), Rated: A

Saddled with one quarter of Europe’s nearly $1 trillion debt pile, which has rattled investor confidence in them, Italian banks have become more selective in their lending and compete to lend to low-risk firms, squeezing profit margins, while many small businesses find it hard to access funds.

Shares in SPAXS, which will use up to 10 percent of the amount raised in the IPO for the acquisition, were 4.04 percent higher at 1038 GMT on their market debut on the alternative investment segment of the Milan bourse.

Google and Facebook set off a second wave of fintech talent (Financial Times), Rated: A

One cloud on the horizon, however, is Brexit. The UK’s departure from the EU could make it harder for Irish fintechs to scale up quickly through expansion into the neighbouring British market, which many of them use as an early testing ground.

A good example of this is Plynk, a payment and messaging app aimed at young people, which was co-founded by Charles Dowd and Clive Foley in 2015, a year after Mr Dowd left Facebook. Based in the Camden Street area, Plynk last year raised €25m from investors led by Swiss Privée.

Another start-up that aims to build a global presence from its Irish base is TransferMate, which has handled more than $10bn of cross-border payments for businesses since it set up in 2010. Last year it raised €30m from Allied Irish Banks, with plans to offer the fintech’s software to all the bank’s clients.

By the end of this year, TransferMate expects to derive as much as half its revenue coming from clients in the US, where it has been approved by all 50 states. A third of its revenue is expected to come from European clients and a fifth from the rest of the world.

The most successful product of Ireland’s fintech scene is actually based in San Francisco. Stripe, which provides payment services to businesses, was founded by Irish brothers Patrick and John Collison, who have become paper billionaires thanks to its rapid growth.

Stripe has its European headquarters in Ireland, where it employs about 10 per cent of its 1,000 global staff. Iain McDougall, the company’s head of UK and Ireland, says the country’s fintech growth is being driven by “a second wave of talent in Ireland, spawned by the massive investment of Google, Apple, Facebook and Amazon in Silicon Docks”. A former Google employee himself, Mr McDougall says: “We’re starting to see some of that talent come through, not just college graduates with a couple of years experience . . . there’s now significant depth to it.”

International

International P2P Lending Volumes January 2018 (P2P-Banking), Rated: AAA

This month I added Linked Finance.

Zopa crossed the milestone of 3 billion GBP originated since launch.

Source: P2P-Banking

Moven To Buy US Bank, Create Joint Venture In Japan With SBI (PYMNTS), Rated: A

According to a report in the American Banker, SBI will receive one seat on Moven’s six-member board and the companies will create a joint venture in Japan.

Of the funding the company will receive from SBI Group, some will go toward the joint venture to sell customized Moven software for Asian banks.

Salesforce boosts nCino global expansion plans (American Banker), Rated: A

NCino, a vendor of cloud-based banking technology, announced a new round of funding led by Salesforce Ventures to help fund its global expansion strategy.

The funding round led by Salesforce Ventures, the corporate investment group of Salesforce, also featured participation from another existing nCino shareholder. The amount of investment was not disclosed.

Several countries investigating Japanese virtual coin heist (e27), Rated: B

Takao Asayama, who is a member of the Singapore-based NEM Foundation that is behind the cryptocurrency, told reporters in Tokyo that it is working with exchanges to block the hackers from cashing out the stolen cryptocurrency. He did not name the countries involved in investigations.

India

Jaitley extends avenue for SME financing, bad loans in the sector now on radar (Economic Times), Rated: AAA

As bank credit to micro, small and medium enterprises shrink, the government has decided to get innovative by getting Non-Bank Finance Companies (NBFCs) and the burgeoning fintech industry to play a larger role in financing. However, NPAs in the MSME sector would also now undergo greater scrutiny.

“Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.

If we look at the NBFC segment first, it specialises in catering to sector specific financial needs covering retail; consumer and vehicle loans; micro, small and medium enterprises (MSMEs) and micro finance among others.

Source: Economic Times

Tech play
Jaitly also laid out a roadmap to use data generated by the Goods and Services Tax (GST) to enhance credit availability to the SME sector.

“It is proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks. Government will soon announce measures for effectively addressing non-performing assets and stressed accounts of MSMEs. This will enable larger financing of MSMEs and also considerably ease cash flow challenges faced by them,” said Jaitley.

Source: Economic Times

At end-March 2017, there were 11,522 NBFCs registered with the Reserve Bank, a number that is only bound to increase with fintech sectors like P2P being clubbed in the segment. The Economic Survey has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises.

For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.

Indian Budget 2018: A Push for Blockchin and Cyber Tech (Bank Info Security), Rated: A

In a move to push adoption and development of new technologies, such as machine learning, artificial intelligence and the internet of things, the finance minister announced allocation of Rs 3,073 crore for the Department of Science and Technology.

Meanwhile, the finance minister’ pledge to encourage use of blockchain, the distributed ledger technology that supports cryptocurrencies, in payment systems has earned him accolades from some security practitioners.

“Blockchain can be effectively used to process banking transactions. I see blockchain-enabled wallets and blockchain-enabled cards as next big thing in the payment systems,” Jyoti says. “Blockchain can provide an extra layer of cybersecurity to the payment systems, which could have led to this decision.”

Why Blockchain?

Blockchain has been popular among the banking industry in India. In fact, banks in India have formed a “bank chain,” an association of more than 20 banks where they discuss some typical use cases of blockchain.

Sapan Gupta, national practice head – banking and finance, at the law firm Shardul Amarchand Mangaldas, notes: “Capitalizing on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors. Segregating the use of blockchain from crypto-currencies reflects the government’s intention to use the technology in a gradual and safe manner.”

What do Ola, ShopClues, Practo, and Paytm feel about the budget? (Yourstory), Rated: A

Rajat Gandhi, Founder & CEO, Faircent.com 

“The finance minister’s budget speech reflects the government’s intent to increase the credit access for the MSME sector and women entrepreneurs under MUDRA scheme. P2P lending is using technology and new-age data, and diligently working towards taking organised credit to the non and under-banked segments of the Indian economy. This is an opportunity for the government to directly invest or co-fund through registered P2P Lending Platforms and ensure credit access for MSMEs, New-To-Credit as well as female entrepreneurs. P2P lending is an asset class ensuring flow of investments from those with surplus to those in need. Hence it’s important that the lenders are supported through tax incentives. We look forward to working with the government towards the common goal of financial inclusion.

 

Bipin Preet Singh, Co-founder, MobiKwik 

“A reformist budget for startups and digital India. The government’s impetus on digitising the rural hinterlands, focus on smart cities, and commitment to blockchain technology will encourage the promotion of digital payments across the country, thereby making India truly digital. Further, disallowing cash payments beyond Rs 10,000 by trusts and institutions will boost digital payments. I commend the government’s decision to reduce corporate tax to 25 percent and improve the ease of doing business by providing a unique ID for every company on lines of Aadhaar. These initiatives will benefit startups and MSMEs immensely and lay a strong foundation for a progressive India. However, the government should consider regulating cryptocurrencies than curbing their use entirely.”

Budget 2018: 10% Long Term Capital Gain tax to benefit P2P lending players (moneycontrol), Rated: B

Imposing 10% long-term capital gain tax on equity investments may create some level playing field for the P2P lending industry. So far, the favourable tax treatment on long-term gains on equity investments made them a preferred choice for the investors. Now, those who are ready to take higher risk for earning better returns may also think of investing in P2P lending projects which have a better risk profile as compared to equity-oriented investments.

Asia

Ulema council, OJK to issue fatwa on sharia-based fintech lenders (The Jakarta Post), Rated: AAA

The Indonesia Ulema Council’s (MUI) sharia division and the Financial Services Authority (OJK) are preparing a fatwa to serve as a legal basis for the operation of sharia-based financial technology (fintech) lending institutions.

“Many non-Muslims are also interested in sharia-based fintech financing. So it has a very large potential market,” Adiwarman said as reported by kontan.co.id.

Since a trial run in November 2017, Investree has disbursed Rp 2.7 billion (US$189,000) in sharia-based financing.

Africa

Five ways to finance your dream (Standard Digital), Rated: AAA

It found that in 2015, Kenya and South Africa raised $16.7 million (Sh1.7 billion) and $15 million (Sh1.5 billion), respectively, in financing from various online channels. However, unlike in South Africa, most of the money raised using these alternative financing platforms in Kenya came from foreigners.

Overall, a total of $62.2 million (Sh6.4 billion) was raised across Africa, with more than 75 per cent of this money going towards funding start-ups and SMEs.

  1. Equity-based crowdfunding
  2. Peer-to-peer business lending
  3. Debt-based securities
  4. Donation-based crowdfunding
  5. Reward-based crowdfunding

Authors:

George Popescu
Allen Taylor

Wednesday January 3 2018, Daily News Digest

ETFs Europe

News Comments Today’s main news: GreenSky raises $4.5B in equity, becomes most valuable online lender. Funding Circle has eye on IPO at 2B GBP valuation. P2P lenders in India blame lending limit on rising costs. GN Compass wants to disrupt lending liquidity in Canada. Today’s main analysis: Can Mifid II spur growth in European ETF market? Today’s thought-provoking […]

ETFs Europe

News Comments

United States

United Kingdom

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Who’s the Most Valuable Online Lender? After This Deal, It’s GreenSky (WSJ), Rated: AAA

Financial-technology firm GreenSky LLC raised new equity from Pacific Investment Management Co. in a deal that valued the digital lender at nearly $4.5 billion, said a person familiar with the matter.

It vaults GreenSky over Social Finance Inc. to become the most highly-valued online lender in the U.S. It also makes the Atlanta company the second most valuable privately held U.S. fintech company behind Stripe Inc., which processes payments for Internet businesses.

Pimco, the Newport Beach, Calif., money manager, invested at a valuation roughly 25% above the $3.6 billion GreenSky fetched in 2016.

What 2018 Will Mean For Marketplace Lenders (PYMNTS), Rated: AAA

2017 was a tough year for some of the biggest names in alternative financial services in the U.S. – Prosper, OnDeck and LendingClub, in particular.

Breslow is hyping OnDeck’s future of partnerships with mainstream baking players – in particular, calling out a renewed partnership with JPMorgan Chase in August to expand the banks’ SMB lending reach.

Prosper, perhaps unsurprisingly, is focused on remaining prosperous, as measured by profitability and further developing its new securitization platform.

LendingClub finally got investors to show them some love – and after its record low following its analyst day earnings accounting, stock jumped 15 percent in mid-December and has managed to hold relatively stable.

Marketplace Lending Predictions for 2018 (Lend Academy), Rated: AAA

First, let’s review my predictions I made exactly one year ago.

  1. 2017 will be the year of the bank partnership
    I would say I was partially right on this one.
  2. The OCC Fintech Charter will receive a positive reception
    So, while many of the fintech platforms supported the charter there was no real positive movement this year.
  3. Lending platforms will offer banking products
    While we had a couple of platforms offering credit cards for the most part this prediction failed to materialize.
  4. One large platform will be acquired
    Student lender Earnest was acquired by Navient in a deal announced in early October.
  5. There will be no new IPOs this year
    I was almost right on this one but one US lending platform did have an IPO in 2017.
  6. China will become an important source of capital outside the USA
    I got this one right.
  7. Artificial intelligence will take center stage
    I think I read more articles about AI this year than in the previous five years combined.

My 2018 Marketplace Lending Predictions

  1. Five top 25 banks will launch their own online lending platforms
    Banks have realized that if you want to provide successful loan products today you need to have an online presence.
  2. Two new pieces of legislation will be passed that will benefit the industry
  3. One of the top five (non-bank) online lending platforms will be acquired
  4. A major lending platform will get hit with a cyber attack
    Here is the one prediction where I really hope I am wrong.
  5. The tech giants consolidate their positions in online lending
    Amazon, PayPal and Square have all started to roll out various online lending offerings to their huge customer bases.
  6. 2018 is the year of product line expansion
  7. Messaging apps start to get integrated into online lending

The Top 10 Most Important Marketplace Lending Stories of 2017 (Lend Academy), Rated: A

  1. Mike Cagney is Gone as CEO of SoFi Effective Immediately
  2. The Cleveland Fed Retracts Their Report on “P2P Lending”
  3. Prosper Finally Closes Their Big $5 Billion Deal
  4. Renaud Laplanche is Back with a New Consumer Lending Platform Called Upgrade 
  5. The New Breed of Small Business Lenders: Amazon, Paypal and Square
  6. The Fastest Consumer Lenders to $1 Billion in Originations
  7. CFPB Announces No-Action Letter to Upstart
  8. The OCC Publishes Details on the Fintech Charter
  9. Bills Being Introduced to “Fix” Decision in Madden v. Midland
  10. Takeaways From LendingClub’s First Ever Investor Day

Ex-Netflix Exec Thinks This Fintech Company Has Netflix-Like Potential (The Motley Fool), Rated: AAA

Netflix has completely disrupted the entertainment industry, sending large incumbents scrambling to compete with its vast global scale.

How did Netflix pull this off? Several reasons, but one is certainly Netflix’s unique culture, outlined in its now-famous Culture Deck.

That deck was constructed by Patty McCord, who spent 14 years as Netflix’s chief talent officer.

The company McCord joined is Lending Club (NYSE:LC).

In the press release, McCord stated:

I see a lot of parallels between where Netflix was as a company 10 years ago, where LendingClub is today, and where it can go in the next 10 years. I’m attracted to LendingClub for the stellar people and the way it exemplifies the concepts of freedom and responsibility. Culture can help drive innovation in companies that are paving new ground and transforming legacy industries, like Netflix did and like LendingClub is doing today. … In our innovative world, I see marketplaces like LendingClub as the future.

Ousted SoFi CEO is back with a new startup (Axios), Rated: A

Why it matters: If 2017 was the year in which VCs began to fire controversial execs, 2018 may be the year in which they’re forced to decide on quick-turn second acts.

Affirm’s big business for 2018 is marketing (Tearsheet), Rated: A

  • Affirm isn’t just a payment method or a personal loan anymore — it’s a marketing lever for merchants

  • Affirm sees every transaction at the point of sale — who is buying, what they’re buying and where; it’s a departure from the way credit is underwritten today, where lenders have no idea why borrowers need the money or how they’ll use it

Where Does Alternative Lending Go in 2018? (Hackernoon), Rated: A

When most people think of alternative lending, they immediately think of payday loans and other abusive loan products. In the tech world, the first thing that comes to mind are online lenders: those who take loans traditionally originated in person and move them online. That was the first wave of alternative lenders — think LendingClub, Prosper, OnDeck, to name a few.

Alt investments on the rise among RIAs (InvestmentNews), Rated: A

Based on the success of the RIA industry, the trend of breakaway advisers interested in exploring the independent channel continues to gain momentum.

Propagated by wirehouse branch management to keep their top producers in their seats, this false campaign is now being revealed as its exact opposite; there are more customizable solutions for RIAs to access and deploy alternative investments for their high net worth clients than ever before.

For example, to access alternatives on their own, RIAs in the past typically would be looking at $25 million AUM minimums just to reach cost-effective scale, and many alternative managers have $10 million individual minimums themselves.

5 fintech charts that surprised us this year (Tearsheet), Rated: A

Loyalty and rewards incentives may not be enough to make consumers like mobile payments, and it could be on retailers to find what would keep people coming back to their mobile wallets. Mobile payment adoption among Apple, Android and Samsung Pay today is low. Paying with cash or card works just fine for them, customers say.

Transparency is the big sticking point when it comes to why small businesses still prefer banks to online lenders.

What Silicon Valley Misunderstands About Banking & Fintech (The Financial Brand), Rated: A

There are some relevant lessons learned about behavioral finance and digital adoption discussed in the book “FinTech Innovation.” One of the most important lessons is the distinction between digital banking winners and laggards over time.

  • Disruptive innovation is ultimately less important than sustaining innovation.
  • Digital is a ‘pull’ technology, while much of financial serves are ‘push’ market places.
  • Platforms win on digital: bundling is more important than unbundling.

The Distinction Between ‘Push’ and ‘Pull’ Marketplaces

Digital brings many benefits to streamline the processes in financial services, but front office disintermediation could easily create financial exclusion in the Western world because many households operate in a ‘push’ modality. Only the few self-directed consumers are comfortable enough to ‘pull’ financial products.

This is the reason why the growth of first mover Robo-Advisor solutions were initially very promising but then faltered, while firms like Vanguard and Charles Schwab can still grow fast on digital.

Being a ‘pull’ marketplace means using digital with a purpose, like looking for a specific product on Amazon. However, very few households would google for the next investment fund or business loan. Instead, the majority would ask a friend, a banking organization or an advisor about their recommendations.

Will tomorrow’s core banking systems run on open-source software? (American Banker), Rated: A

Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.

Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.

For fintech owned by a CUSO, will banks buy? (Banking Exchange), Rated: A

Morales, CEO of QCash Financial, a credit union service organization (CUSO) owned by WSECU (formerly Washington State Employee Credit Union), says that constraint may be lessening based on the final ruling on payday lending issued by the Consumer Financial Protection Bureau in October.

Credit unions, however, are interested in the QCash small-dollar lending platform. Morales says that nine credit unions have signed up for the product and five are currently live with it.

Fintech Predictions For 2018 (Financial Advisor), Rated: B

Identity verification will be a priority in 2018, with 60 percent of online marketplaces and other websites adopting technologies and techniques for verifying new users’ identities, the company predicts.

Bankers anxious as Trump mulls credit union regulator for CFPB (American Banker), Rated: B

The Trump administration’s consideration of J. Mark McWatters to lead the Consumer Financial Protection Bureau is stoking fears among bankers that he will show favor to credit unions once in office.

United Kingdom

UK’s Largest P2P Lender Funding Circle Said to be Planning IPO at £2 Billion Valuation (Crowdfund Insider), Rated: AAA

Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.

Urban Jungle Raises £1M in Seed Funding (FinSMEs), Rated: A

Urban Jungle, a London, UK-based insurtech startup, completed a £1m seed funding round.

Moneywise reveals top 2018 financial resolutions for UK adults (London School of Business & Finance), Rated: A

Research from financial advice website Moneywise has revealed the top financial goals of its users for 2018.

Moneywise found that cutting down on unnecessary spending was the top financial resolution for 2018, with 18 per cent citing this as their main priority.

Starting or boosting cash savings was voted the second most popular financial resolution for 2018, with this goal being set by 11 per cent of Moneywise users, whilst 10 per cent plan to start investing for the first time or boosting investments in a Stocks and Shares Isa.

When IFAs fight back against digital investment management (WhatInvestment.co.uk), Rated: A

More robo-advice platforms are on the market than ever before, and the number will grow rapidly during 2018. A joint report from the FCA and the Treasury, published last June, found that 100 robo firms are either on the market already or in active development.

IFAs may well find this frustrating – even with professional credentials and years of experience, they are subject to more distrust and scrutiny than a number of untested algorithms. Worse, these algorithms may come to represent their primary competition: they offer lower prices, they open up access to financial advice, and there is a range of options available for customers minded to use them, with more to come.

Proplend Looks Back on 2017 P2P Successes & Announces 2018 Plans (Crowdfund Insider), Rated: A

On Tuesday, online platform Proplend gave its 2017 peer-to-peer lending year in review.

  • The majority of platforms gained full Financial Conduct Authority (FCA) authorization
  • Many platforms sought ISA Manager Status to launch Innovative Finance ISA (IFISA) – with Proplend being among the early adopters.
  • LendInvest withdrew FCA approval application and stepped down from the Peer to Peer Finance Association as it moved from all P2P activity
  • RateSetter’s wholesale lending practices notably proved costly. The lender eventually withdrew from the P2PFA after breathing the association’s operating principles

The lender went on to note its plans for 2018:

  • The redesign of Lender Dashboards, Proplend.com website and the launch of our Auto-Invest product
  • Initially Proplend Auto-Invest will be a low-risk (Tranche A), three-year, Innovative Finance ISA product targeting returns of c.5% each year
  • The lender has built a “healthy” loan pipeline which will be available on the platform from early 2018, subject to due diligence, valuations, and legals.

5 alternative investments to the stock market (BM Magazine), Rated: B

  1. Real Estate
  2. Gold and other Precious Metals
  3. Backing and Staking in Poker
  4. Peer-to-Peer Lending
  5. Equity Crowdfunding

Could 2018 be a bumper year for tech IPOs? (Computer Business Review), Rated: B

After a couple of quiet years on the IPO front, the market could be ready to bounce back with Funding Circle said to be the first targeting flotation.

In January 2017 the P2P site surpassed a £1bn valuation thanks to an £82m funding round, led by the likes of Accel.

With distribution deals with the likes of the Royal Bank of Scotland and Santander, Funding Circle lent more than £1.7bn in 2017.

The London Stock Exchange revealed that 106 companies floated on its markets in 2017, raising £15bn, up 63% by number and 164% by value on 2016. These numbers mean that the LSE surpassed all European exchanges in the year by both IPO number and by money raised.

European Union

ETF providers hope Mifid II will spur European growth (Financial Times), Rated: AAA

ETF trading has since spread to 25 exchanges across Europe, but no accurate record of activity has been required by regulators. About 70 per cent of ETF trading in Europe goes unreported because it occurs via private bilateral over-the-counter transactions.

This should begin to end from Wednesday with the introduction of sweeping European rules designed to strengthen protection for investors and improve transparency across the continent’s financial markets. The package of regulations, known as Mifid II, requires comprehensive, detailed reporting of ETF trades.

Source: Financial Times

The passive investment industry, which is dominated by BlackRock, State Street and Vanguard, are betting Mifid II will set their European businesses on a growth path akin to the US, where usage has spread far more widely and deeply. Assets held in US-listed ETFs stood at $3.5tn at the end of November, compared with just $790bn across all European-listed ETFs, according to ETFGI.

Source: Financial Times
International

The FinTech outlook for 2018 (The Finanser), Rated: AAA

There are four big things for 2018 from a FinTech viewpoint that are obvious to me however, which are:

  1. Getting down to business with Artificial Intelligence (AI)
  2. Rationalising and cleansing core data structures
  3. Continuing the digital drive
  4. Distributed Ledger Technology (DLT) continues to rise

Therefore, rather than me making predictions, I thought it interesting to review the views of other commentators.

Jim also wrote another piece that nicely summarises Forrester’s predictions for 2018 which include:

  1. Banks not embracing Open Banking, but increasing partnerships with start-ups;
  2. Faster moves to embrace Digital Banking whilst losing focus on face-to-face communications; and
  3. Focus on back office transformation.

 

Saxo Bank’s Payments business sent me a press release with their top three predictions, which are:

  • The demise of traditional, slow, expensive cross border payments
  • Payment Service Providers (PSPs) will help merchants to expand internationally
  • Tech giants move into banking

Top 10 Companies of the Blockchain Industry in 2017 (Coin Telegraph), Rated: A

The total market capitalization of all the cryptocurrencies hit the $600 bln mark in December.

Source: Coin Telegraph

Coinbase is one of the top digital currency wallet and platform for exchange. Market capitalization: $2 bln (GDAX)

Ripple is a real-time gross settlement and currency exchange. Its main goal is to make an entire system devoted to money transferring. Market capitalization: $30 bln

India

P2P players blame lending limit for rising costs (Business Standard), Rated: AAA

Peer-to-peer lending (P2P) platforms have seen a rise in traffic as well as investor interest after registering themselves with the  But they argue the Rs 1-million limit placed on across all platforms is restrictive.

“With time, these limits are going to be relaxed by the  These have been imposed in order to avoid rapid growth that could lead to systemic risk,” said Ekmeet Singh, CEO, Lendbox.

Industry players want the to raise the limit for individual borrowers and remove the limit for institutional 

P2P lender AnyTimeLoan, prop-tech startup Foyr, tech firm Imanis raise funds (Deal Street Asia), Rated: A

While Spice Digital is investing up to $3.9 million in AnyTimeLoan, prop-tech startup Foyr has raised $3.8 million from JLL and others. Also, Wipro has put in an additional $2 million in US-based tech firm Imanis.

Asia

Crowdo Recaps 2017 Milestones: 3,500+ Projects Funded (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding, posted an infographic citing its 2017 milestones.

Canada

Meet GN Compass: The ICO Attempting to Disrupt Liquidity In The Lending Market (Equities.com), Rated: AAA

Collins: I left the railway, cashed out my pension and started my own lending company; Great North Capital Inc. We have successfully funded approximately 100 loans; primarily focusing on high risk clients. Based on my accumulative knowledge and experience in both banking and running Great North Capital, I started to develop the idea for a peer-to-peer lending solution where there is very limited risk to the investors (lenders) while making loans liquid. Also by having our own credit system for borrowers, they have the opportunity to improve their credit rating on the platform by making timely payments and having no delinquencies. At the same time, I was learning more about cryptocurrencies and blockchain technology. I quickly realized the huge potential of the blockchain and how it can solve the liquidity problem as well as securing an investor’s principal capital; which are the main issues of current peer-to-peer lending platforms. I got in touch with Jean Pierre Rukebesha who immediately liked the idea and decided to come on board as co-founder and CFO. Hence GN Compass (Great North Compass) was born.

Older Canadians still leery of fintech despite flood of services, RateHub finds (IT Business), Rated: A

Between last year’s official release of Android Pay, the increasing ubiquity of artificial intelligence (AI)-powered support platforms such as Sun Life’s Ella, and the ongoing digital transformation of Canada’s banks, Canadians have more opportunities than ever to integrate fintech into their lives – but according to financial comparison platform developer Ratehub.ca, the eldest among us aren’t taking advantage.

According to the company’s 2017 Digital Money Trends Report, released last month, fewer than half of baby boomers reported trusting robo-advisors, mobile payments, marketplace and peer-to-peer lenders, and rate comparison website, while in many cases millennials and generation X-ers were nearly twice as likely to do so.

Other findings from the report include:

  • Nearly twice as many millennials (44 per cent) and generation X-ers (42 per cent) reported trusting robo-advisors compared to boomers (23 per cent).
  • Nearly twice as many millennials (71 per cent) said they trust mobile payments compared to boomers (38 per cent). (62 per cent of generation X-ers said they trust mobile payments.)
  • Twice as many millennials (47 per cent) and generation X-ers (48 per cent) trust marketplace lenders compared to boomers (23 per cent).
  • 58 per cent of millennials and 53 per cent of generation X-ers trust peer-to-peer lenders, versus only 32 per cent of boomers.
  • 63 per cent of millennials and 60 per cent of generation X-ers trust rate comparison websites, versus 42 per cent of boomers.
Africa

Internet firm Opera bets on Kenyan to steer Africa Fintech (Business Daily), Rated: A

Internet browser company Opera has picked Eddie Ndichu to drive its Fintech strategy in Africa even as it prepares to set up an office in Nairobi.

Opera has said that it is investing Sh10.3 billion ($100 million) in Africa’s digital economy over the next two years and OPay is part of those investments.

In a statement Tuesday, Opera said that it had appointed Mr Ndichu as the managing director and vice president for Fintech in Africa.

Authors:

George Popescu
Allen Taylor

Wednesday January 3 2018, Daily News Digest

ETFs Europe

News Comments Today’s main news: GreenSky raises $4.5B in equity, becomes most valuable online lender. Funding Circle has eye on IPO at 2B GBP valuation. P2P lenders in India blame lending limit on rising costs. GN Compass wants to disrupt lending liquidity in Canada. Today’s main analysis: Can Mifid II spur growth in European ETF market? Today’s thought-provoking […]

ETFs Europe

News Comments

United States

United Kingdom

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Who’s the Most Valuable Online Lender? After This Deal, It’s GreenSky (WSJ), Rated: AAA

Financial-technology firm GreenSky LLC raised new equity from Pacific Investment Management Co. in a deal that valued the digital lender at nearly $4.5 billion, said a person familiar with the matter.

It vaults GreenSky over Social Finance Inc. to become the most highly-valued online lender in the U.S. It also makes the Atlanta company the second most valuable privately held U.S. fintech company behind Stripe Inc., which processes payments for Internet businesses.

Pimco, the Newport Beach, Calif., money manager, invested at a valuation roughly 25% above the $3.6 billion GreenSky fetched in 2016.

What 2018 Will Mean For Marketplace Lenders (PYMNTS), Rated: AAA

2017 was a tough year for some of the biggest names in alternative financial services in the U.S. – Prosper, OnDeck and LendingClub, in particular.

Breslow is hyping OnDeck’s future of partnerships with mainstream baking players – in particular, calling out a renewed partnership with JPMorgan Chase in August to expand the banks’ SMB lending reach.

Prosper, perhaps unsurprisingly, is focused on remaining prosperous, as measured by profitability and further developing its new securitization platform.

LendingClub finally got investors to show them some love – and after its record low following its analyst day earnings accounting, stock jumped 15 percent in mid-December and has managed to hold relatively stable.

Marketplace Lending Predictions for 2018 (Lend Academy), Rated: AAA

First, let’s review my predictions I made exactly one year ago.

  1. 2017 will be the year of the bank partnership
    I would say I was partially right on this one.
  2. The OCC Fintech Charter will receive a positive reception
    So, while many of the fintech platforms supported the charter there was no real positive movement this year.
  3. Lending platforms will offer banking products
    While we had a couple of platforms offering credit cards for the most part this prediction failed to materialize.
  4. One large platform will be acquired
    Student lender Earnest was acquired by Navient in a deal announced in early October.
  5. There will be no new IPOs this year
    I was almost right on this one but one US lending platform did have an IPO in 2017.
  6. China will become an important source of capital outside the USA
    I got this one right.
  7. Artificial intelligence will take center stage
    I think I read more articles about AI this year than in the previous five years combined.

My 2018 Marketplace Lending Predictions

  1. Five top 25 banks will launch their own online lending platforms
    Banks have realized that if you want to provide successful loan products today you need to have an online presence.
  2. Two new pieces of legislation will be passed that will benefit the industry
  3. One of the top five (non-bank) online lending platforms will be acquired
  4. A major lending platform will get hit with a cyber attack
    Here is the one prediction where I really hope I am wrong.
  5. The tech giants consolidate their positions in online lending
    Amazon, PayPal and Square have all started to roll out various online lending offerings to their huge customer bases.
  6. 2018 is the year of product line expansion
  7. Messaging apps start to get integrated into online lending

The Top 10 Most Important Marketplace Lending Stories of 2017 (Lend Academy), Rated: A

  1. Mike Cagney is Gone as CEO of SoFi Effective Immediately
  2. The Cleveland Fed Retracts Their Report on “P2P Lending”
  3. Prosper Finally Closes Their Big $5 Billion Deal
  4. Renaud Laplanche is Back with a New Consumer Lending Platform Called Upgrade 
  5. The New Breed of Small Business Lenders: Amazon, Paypal and Square
  6. The Fastest Consumer Lenders to $1 Billion in Originations
  7. CFPB Announces No-Action Letter to Upstart
  8. The OCC Publishes Details on the Fintech Charter
  9. Bills Being Introduced to “Fix” Decision in Madden v. Midland
  10. Takeaways From LendingClub’s First Ever Investor Day

Ex-Netflix Exec Thinks This Fintech Company Has Netflix-Like Potential (The Motley Fool), Rated: AAA

Netflix has completely disrupted the entertainment industry, sending large incumbents scrambling to compete with its vast global scale.

How did Netflix pull this off? Several reasons, but one is certainly Netflix’s unique culture, outlined in its now-famous Culture Deck.

That deck was constructed by Patty McCord, who spent 14 years as Netflix’s chief talent officer.

The company McCord joined is Lending Club (NYSE:LC).

In the press release, McCord stated:

I see a lot of parallels between where Netflix was as a company 10 years ago, where LendingClub is today, and where it can go in the next 10 years. I’m attracted to LendingClub for the stellar people and the way it exemplifies the concepts of freedom and responsibility. Culture can help drive innovation in companies that are paving new ground and transforming legacy industries, like Netflix did and like LendingClub is doing today. … In our innovative world, I see marketplaces like LendingClub as the future.

Ousted SoFi CEO is back with a new startup (Axios), Rated: A

Why it matters: If 2017 was the year in which VCs began to fire controversial execs, 2018 may be the year in which they’re forced to decide on quick-turn second acts.

Affirm’s big business for 2018 is marketing (Tearsheet), Rated: A

  • Affirm isn’t just a payment method or a personal loan anymore — it’s a marketing lever for merchants

  • Affirm sees every transaction at the point of sale — who is buying, what they’re buying and where; it’s a departure from the way credit is underwritten today, where lenders have no idea why borrowers need the money or how they’ll use it

Where Does Alternative Lending Go in 2018? (Hackernoon), Rated: A

When most people think of alternative lending, they immediately think of payday loans and other abusive loan products. In the tech world, the first thing that comes to mind are online lenders: those who take loans traditionally originated in person and move them online. That was the first wave of alternative lenders — think LendingClub, Prosper, OnDeck, to name a few.

Alt investments on the rise among RIAs (InvestmentNews), Rated: A

Based on the success of the RIA industry, the trend of breakaway advisers interested in exploring the independent channel continues to gain momentum.

Propagated by wirehouse branch management to keep their top producers in their seats, this false campaign is now being revealed as its exact opposite; there are more customizable solutions for RIAs to access and deploy alternative investments for their high net worth clients than ever before.

For example, to access alternatives on their own, RIAs in the past typically would be looking at $25 million AUM minimums just to reach cost-effective scale, and many alternative managers have $10 million individual minimums themselves.

5 fintech charts that surprised us this year (Tearsheet), Rated: A

Loyalty and rewards incentives may not be enough to make consumers like mobile payments, and it could be on retailers to find what would keep people coming back to their mobile wallets. Mobile payment adoption among Apple, Android and Samsung Pay today is low. Paying with cash or card works just fine for them, customers say.

Transparency is the big sticking point when it comes to why small businesses still prefer banks to online lenders.

What Silicon Valley Misunderstands About Banking & Fintech (The Financial Brand), Rated: A

There are some relevant lessons learned about behavioral finance and digital adoption discussed in the book “FinTech Innovation.” One of the most important lessons is the distinction between digital banking winners and laggards over time.

  • Disruptive innovation is ultimately less important than sustaining innovation.
  • Digital is a ‘pull’ technology, while much of financial serves are ‘push’ market places.
  • Platforms win on digital: bundling is more important than unbundling.

The Distinction Between ‘Push’ and ‘Pull’ Marketplaces

Digital brings many benefits to streamline the processes in financial services, but front office disintermediation could easily create financial exclusion in the Western world because many households operate in a ‘push’ modality. Only the few self-directed consumers are comfortable enough to ‘pull’ financial products.

This is the reason why the growth of first mover Robo-Advisor solutions were initially very promising but then faltered, while firms like Vanguard and Charles Schwab can still grow fast on digital.

Being a ‘pull’ marketplace means using digital with a purpose, like looking for a specific product on Amazon. However, very few households would google for the next investment fund or business loan. Instead, the majority would ask a friend, a banking organization or an advisor about their recommendations.

Will tomorrow’s core banking systems run on open-source software? (American Banker), Rated: A

Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.

Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.

For fintech owned by a CUSO, will banks buy? (Banking Exchange), Rated: A

Morales, CEO of QCash Financial, a credit union service organization (CUSO) owned by WSECU (formerly Washington State Employee Credit Union), says that constraint may be lessening based on the final ruling on payday lending issued by the Consumer Financial Protection Bureau in October.

Credit unions, however, are interested in the QCash small-dollar lending platform. Morales says that nine credit unions have signed up for the product and five are currently live with it.

Fintech Predictions For 2018 (Financial Advisor), Rated: B

Identity verification will be a priority in 2018, with 60 percent of online marketplaces and other websites adopting technologies and techniques for verifying new users’ identities, the company predicts.

Bankers anxious as Trump mulls credit union regulator for CFPB (American Banker), Rated: B

The Trump administration’s consideration of J. Mark McWatters to lead the Consumer Financial Protection Bureau is stoking fears among bankers that he will show favor to credit unions once in office.

United Kingdom

UK’s Largest P2P Lender Funding Circle Said to be Planning IPO at £2 Billion Valuation (Crowdfund Insider), Rated: AAA

Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.

Urban Jungle Raises £1M in Seed Funding (FinSMEs), Rated: A

Urban Jungle, a London, UK-based insurtech startup, completed a £1m seed funding round.

Moneywise reveals top 2018 financial resolutions for UK adults (London School of Business & Finance), Rated: A

Research from financial advice website Moneywise has revealed the top financial goals of its users for 2018.

Moneywise found that cutting down on unnecessary spending was the top financial resolution for 2018, with 18 per cent citing this as their main priority.

Starting or boosting cash savings was voted the second most popular financial resolution for 2018, with this goal being set by 11 per cent of Moneywise users, whilst 10 per cent plan to start investing for the first time or boosting investments in a Stocks and Shares Isa.

When IFAs fight back against digital investment management (WhatInvestment.co.uk), Rated: A

More robo-advice platforms are on the market than ever before, and the number will grow rapidly during 2018. A joint report from the FCA and the Treasury, published last June, found that 100 robo firms are either on the market already or in active development.

IFAs may well find this frustrating – even with professional credentials and years of experience, they are subject to more distrust and scrutiny than a number of untested algorithms. Worse, these algorithms may come to represent their primary competition: they offer lower prices, they open up access to financial advice, and there is a range of options available for customers minded to use them, with more to come.

Proplend Looks Back on 2017 P2P Successes & Announces 2018 Plans (Crowdfund Insider), Rated: A

On Tuesday, online platform Proplend gave its 2017 peer-to-peer lending year in review.

  • The majority of platforms gained full Financial Conduct Authority (FCA) authorization
  • Many platforms sought ISA Manager Status to launch Innovative Finance ISA (IFISA) – with Proplend being among the early adopters.
  • LendInvest withdrew FCA approval application and stepped down from the Peer to Peer Finance Association as it moved from all P2P activity
  • RateSetter’s wholesale lending practices notably proved costly. The lender eventually withdrew from the P2PFA after breathing the association’s operating principles

The lender went on to note its plans for 2018:

  • The redesign of Lender Dashboards, Proplend.com website and the launch of our Auto-Invest product
  • Initially Proplend Auto-Invest will be a low-risk (Tranche A), three-year, Innovative Finance ISA product targeting returns of c.5% each year
  • The lender has built a “healthy” loan pipeline which will be available on the platform from early 2018, subject to due diligence, valuations, and legals.

5 alternative investments to the stock market (BM Magazine), Rated: B

  1. Real Estate
  2. Gold and other Precious Metals
  3. Backing and Staking in Poker
  4. Peer-to-Peer Lending
  5. Equity Crowdfunding

Could 2018 be a bumper year for tech IPOs? (Computer Business Review), Rated: B

After a couple of quiet years on the IPO front, the market could be ready to bounce back with Funding Circle said to be the first targeting flotation.

In January 2017 the P2P site surpassed a £1bn valuation thanks to an £82m funding round, led by the likes of Accel.

With distribution deals with the likes of the Royal Bank of Scotland and Santander, Funding Circle lent more than £1.7bn in 2017.

The London Stock Exchange revealed that 106 companies floated on its markets in 2017, raising £15bn, up 63% by number and 164% by value on 2016. These numbers mean that the LSE surpassed all European exchanges in the year by both IPO number and by money raised.

European Union

ETF providers hope Mifid II will spur European growth (Financial Times), Rated: AAA

ETF trading has since spread to 25 exchanges across Europe, but no accurate record of activity has been required by regulators. About 70 per cent of ETF trading in Europe goes unreported because it occurs via private bilateral over-the-counter transactions.

This should begin to end from Wednesday with the introduction of sweeping European rules designed to strengthen protection for investors and improve transparency across the continent’s financial markets. The package of regulations, known as Mifid II, requires comprehensive, detailed reporting of ETF trades.

Source: Financial Times

The passive investment industry, which is dominated by BlackRock, State Street and Vanguard, are betting Mifid II will set their European businesses on a growth path akin to the US, where usage has spread far more widely and deeply. Assets held in US-listed ETFs stood at $3.5tn at the end of November, compared with just $790bn across all European-listed ETFs, according to ETFGI.

Source: Financial Times
International

The FinTech outlook for 2018 (The Finanser), Rated: AAA

There are four big things for 2018 from a FinTech viewpoint that are obvious to me however, which are:

  1. Getting down to business with Artificial Intelligence (AI)
  2. Rationalising and cleansing core data structures
  3. Continuing the digital drive
  4. Distributed Ledger Technology (DLT) continues to rise

Therefore, rather than me making predictions, I thought it interesting to review the views of other commentators.

Jim also wrote another piece that nicely summarises Forrester’s predictions for 2018 which include:

  1. Banks not embracing Open Banking, but increasing partnerships with start-ups;
  2. Faster moves to embrace Digital Banking whilst losing focus on face-to-face communications; and
  3. Focus on back office transformation.

 

Saxo Bank’s Payments business sent me a press release with their top three predictions, which are:

  • The demise of traditional, slow, expensive cross border payments
  • Payment Service Providers (PSPs) will help merchants to expand internationally
  • Tech giants move into banking

Top 10 Companies of the Blockchain Industry in 2017 (Coin Telegraph), Rated: A

The total market capitalization of all the cryptocurrencies hit the $600 bln mark in December.

Source: Coin Telegraph

Coinbase is one of the top digital currency wallet and platform for exchange. Market capitalization: $2 bln (GDAX)

Ripple is a real-time gross settlement and currency exchange. Its main goal is to make an entire system devoted to money transferring. Market capitalization: $30 bln

India

P2P players blame lending limit for rising costs (Business Standard), Rated: AAA

Peer-to-peer lending (P2P) platforms have seen a rise in traffic as well as investor interest after registering themselves with the  But they argue the Rs 1-million limit placed on across all platforms is restrictive.

“With time, these limits are going to be relaxed by the  These have been imposed in order to avoid rapid growth that could lead to systemic risk,” said Ekmeet Singh, CEO, Lendbox.

Industry players want the to raise the limit for individual borrowers and remove the limit for institutional 

P2P lender AnyTimeLoan, prop-tech startup Foyr, tech firm Imanis raise funds (Deal Street Asia), Rated: A

While Spice Digital is investing up to $3.9 million in AnyTimeLoan, prop-tech startup Foyr has raised $3.8 million from JLL and others. Also, Wipro has put in an additional $2 million in US-based tech firm Imanis.

Asia

Crowdo Recaps 2017 Milestones: 3,500+ Projects Funded (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding, posted an infographic citing its 2017 milestones.

Canada

Meet GN Compass: The ICO Attempting to Disrupt Liquidity In The Lending Market (Equities.com), Rated: AAA

Collins: I left the railway, cashed out my pension and started my own lending company; Great North Capital Inc. We have successfully funded approximately 100 loans; primarily focusing on high risk clients. Based on my accumulative knowledge and experience in both banking and running Great North Capital, I started to develop the idea for a peer-to-peer lending solution where there is very limited risk to the investors (lenders) while making loans liquid. Also by having our own credit system for borrowers, they have the opportunity to improve their credit rating on the platform by making timely payments and having no delinquencies. At the same time, I was learning more about cryptocurrencies and blockchain technology. I quickly realized the huge potential of the blockchain and how it can solve the liquidity problem as well as securing an investor’s principal capital; which are the main issues of current peer-to-peer lending platforms. I got in touch with Jean Pierre Rukebesha who immediately liked the idea and decided to come on board as co-founder and CFO. Hence GN Compass (Great North Compass) was born.

Older Canadians still leery of fintech despite flood of services, RateHub finds (IT Business), Rated: A

Between last year’s official release of Android Pay, the increasing ubiquity of artificial intelligence (AI)-powered support platforms such as Sun Life’s Ella, and the ongoing digital transformation of Canada’s banks, Canadians have more opportunities than ever to integrate fintech into their lives – but according to financial comparison platform developer Ratehub.ca, the eldest among us aren’t taking advantage.

According to the company’s 2017 Digital Money Trends Report, released last month, fewer than half of baby boomers reported trusting robo-advisors, mobile payments, marketplace and peer-to-peer lenders, and rate comparison website, while in many cases millennials and generation X-ers were nearly twice as likely to do so.

Other findings from the report include:

  • Nearly twice as many millennials (44 per cent) and generation X-ers (42 per cent) reported trusting robo-advisors compared to boomers (23 per cent).
  • Nearly twice as many millennials (71 per cent) said they trust mobile payments compared to boomers (38 per cent). (62 per cent of generation X-ers said they trust mobile payments.)
  • Twice as many millennials (47 per cent) and generation X-ers (48 per cent) trust marketplace lenders compared to boomers (23 per cent).
  • 58 per cent of millennials and 53 per cent of generation X-ers trust peer-to-peer lenders, versus only 32 per cent of boomers.
  • 63 per cent of millennials and 60 per cent of generation X-ers trust rate comparison websites, versus 42 per cent of boomers.
Africa

Internet firm Opera bets on Kenyan to steer Africa Fintech (Business Daily), Rated: A

Internet browser company Opera has picked Eddie Ndichu to drive its Fintech strategy in Africa even as it prepares to set up an office in Nairobi.

Opera has said that it is investing Sh10.3 billion ($100 million) in Africa’s digital economy over the next two years and OPay is part of those investments.

In a statement Tuesday, Opera said that it had appointed Mr Ndichu as the managing director and vice president for Fintech in Africa.

Authors:

George Popescu
Allen Taylor

Tuesday June 27 2017, Daily News Digest

shadow banking

News Comments Today’s main news: Venmo is testing a physical debit card. Zopa shares its banking plans. Ranger Direct Lending enters arbitration with Investee Princeton. Aegon Life explores digital channels for selling policies. Today’s main analysis: What’s driving the growth of shadow banking? Today’s thought-provoking articles: Prosper performance update for May 2017. The fastest consumer lenders to $1B in […]

shadow banking

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Canada

News Summary

United States

Venmo is testing its own physical debit card (recode), Rated: AAA

Venmo has been testing its own version of a physical debit card that would allow people who use its app to make purchases in brick-and-mortar stores using money stored in their Venmo account, according to multiple sources.

One potential advantage is that it would allow Venmo users to immediately spend money that is sent to them via the app without having to wait a business day for a deposit of those funds to appear in their bank account.

Prosper Performance Update: May 2017 (Prosper), Rated: AAA

Today we are sharing performance data for the Prosper portfolio for May 2017.  The weighted average coupon for assets originated through Prosper’s platform in May 2017 was 16.34%i, the highest for a monthly vintage since 2013.

Additional highlights from the May Update include:

  • Continued credit tightening can be seen via an increase in expected loss rate, coupon, Loss/FICO, and Coupon/FICO compared to prior months.
  • Prepayments for the 2017 origination months continue to trend above prior vintages.
  • 2015 and 2016H1 vintage delinquencies continue to trend below their prior peaks.

What’s driving the growth in ‘shadow banking’ (Chicago Booth Review), Rated: AAA

According to Chicago Booth’s Gregor Matvos, Booth PhD candidate Greg Buchak, Columbia’s Tomasz Piskorski, and Stanford’s Amit Seru, much of the growth is due to regulations that have pushed banks out of traditional lending businesses. The researchers also attribute some growth to online technology that has lowered the barrier to entry in markets where lenders once needed networks of physical branches to have any hope of building business.

The researchers focus on the US residential lending market, the largest consumer loan market in the country—and the market that drew the most attention from regulators after 2008. Between 2007 and 2015, shadow banks nearly tripled their market share, from 14 percent to 38 percent.

During the study period, lenders that originated loans online (fintech lenders) saw market share rise from 4 percent to 13 percent—but that remains less than half of the shadow-banking sector.

Source: Review.ChicagoBooth.edu

Fiserv partners with fintech startup to launch digital adviser (American Banker), Rated: A

The core banking software provider Fiserv and the fintech startup GoldBean have partnered to provide a digital adviser meant to provide that extra assistance.

GoldBean has an “investing for beginners” platform that was designed to promote financial literacy. By analyzing people’s spending, it creates customized portfolios featuring companies and brands with which end users are already familiar. GoldBean is a graduate of the INV Fintech Accelerator run by Fiserv and Bank Innovation.

Fiserv hopes that by integrating GoldBean education and advice into its Unified Wealth Platform, some of these investors will eventually interact with the human wealth managers who use Fiserv’s platform, for instance when they need to talk about a life change.

Amazon, Klarna, And The ‘Creative Destruction’ Of The Banking System (Seeking Alpha), Rated: A

As a consequence, Klarna has become “one of the most highly valued technology groups in Europe. A round of fundraising in 2015 valued it at $2.25 billion. And it is solidly profitable.”

The crucial thing here is that Mr. Siemiatkowski wants Klarna to stay focused. He believes that other innovative FinTech organizations will fill in the rest of the financial landscape. That is, banking will be done by numerous FinTech companies moving at the speed of technology innovation, not at the speed of ordinary banks.

First, there is so much to be gained from creating a network or a platform that is more inclusive than separate “specialists” joining together to create “full bank offering.”

Second, there is the issue of regulation. Banks are heavily regulated.

What Mr. Bezos of Amazon.com and Mr. Siemiatkowski of Klarna seem to be doing is reinventing banking on the basis of a payments platform that can serve many purposes. The “creative destruction” of the banking system as we know it appears to be just beginning.

The Fastest Consumer Lenders to $ 1 Billion in Originations (Lend Academy), Rated: A

Anyway, I did a little digging and through publicly available information I was mostly able to figure out how quickly many of the major platforms reached their first billion in total loans issued.

1. Marcus – 8 months

2. SoFi – 14 months – Based on data from Kroll Bond Rating Agency, we know that by August 1, 2016 (when the SCLP 2016-2 securitization closed) SoFi had issued at least $1.3 billion in loans based on the loan pool balance of their first three personal loan securitizations. Based on that data I estimate they crossed the $1 billion mark around April of 2016, 14 months after they launched the product.

3. Marlette – 17 months

4. Avant – 28 months – Avant launched in January of 2013 and when they crossed $1 billion in May 2015 they were the fastest platform to that milestone at the time.

5. Lending Club – 65 months – Lending Club was the first platform to cross a billion dollars back in November 2012.

6. Prosper – 98 months – Prosper was the first marketplace lender to launch in this country all the way back in February 2006. For many years it was just Lending Club and Prosper in the online consumer lending space and for much of that time Prosper was the market leader. Prosper crossed $1 billion in April 2014. They took over seven years to do their first $500 million and just 11 months for them to go from $500 million to $1 billion in total loans issued.

ezVerify and LendingPoint Launch ezCarePoint for Medical Payments (BusinessWire), Rated: A

Today at the HFMA ANI 2017 conference, ezVerify and LendingPoint announced an exclusive partnership that will make it easier and more affordable for consumers to pay their medical bills. Working together, the two companies will provide a new service called ezCarePoint, which will allow patients to accurately predict their out-of-pocket expenses and apply for flexible payment plans and loans to cover the costs of medical procedures.

According to a report by The Commonwealth Fund, more than 30 million people do not get necessary medical attention out of fear that doing so would be financially burdensome. Many Americans do not have a clear understanding of their insurance coverage and out-of-pocket obligations — as a result, consumers face medical costs they weren’t expecting, and practitioners lose money on unpaid bills.

By integrating the ezVerify and LendingPoint technologies, ezCarePoint will help patients verify their insurance coverage and payment responsibility for health care services before the procedure takes place, preventing incidents where patients unexpectedly find themselves responsible for bills outside of their insurance coverage. If the patient can’t pay the out-of-pocket costs up front, they will have the option to apply for a loan and payment plan quickly and easily from the ezCarePoint platform. Patients will be notified of approvals in a matter of seconds, and upon approval, LendingPoint will pay the loan proceeds to medical practitioners within one business day to pay the patients’ out-of-pocket medical costs up front.

Euler Hermes Digital Agency Announces CRiskCo Partnership (PR Newswire), Rated: A

Euler Hermes, the world’s leading trade credit insurer, today announced an innovative partnership with fintech credit risk analysis company, CRiskCo. With a focus on revolutionizing factoring, trade and supply chain finance, CRiskCo uses state-of-the art artificial intelligence (AI) credit analysis and fraud detection processes.

Christophe Spoerry, Euler Hermes Digital Agency (EHDA) co-founder, said, ” EHDA and CRiskCo are working together to evolve trade credit insurance and risk management, particularly at the transaction and single invoice cover levels. This has the potential to offer small-medium enterprises (SMEs) significantly more protection when doing business, by providing innovative, simple and affordable customer analyses.”

EHDA recently launched its first breakthrough product – Single Invoice Cover – which protects companies from non-payment by business customers. Cover is provided transaction by transaction while optimizing end-to-end supply chains and extending optimal credit terms to buyers. Based on a proprietary application program interface (API), it creates a seamless process for businesses, while facilitating a comprehensive and granular management of credit exposure.

RIAs Should Embrace Alternative Investments or Risk Client Attrition (WealthManagement.com), Rated: A

Before the emergence of crowdfunding-style investment platforms, it was hard for investors to reap the benefits of investing in a diversified portfolio of rental real estate. They can now, and you can show them how.

Wealth management is a “share of wallet” game. If you diversify your solutions, clients will end up with more diversified risk—and that’s the point.

Lending Club’s first securitization is a big deal (American Banker), Rated: A

Lending Club’s first securitization of its own consumer installment loans is an important step in rebuilding its business following a scandal last year over its corporate controls.

The company has been seeking to broaden its funding sources after concerns about the integrity of its data caused many investors to pause or scaled back their purchases. Lending Club originally acted purely as a matchmaker, connecting borrowers with lenders over its platform. It did not hold on to the loans.

Money in Cleveland tech-startup community begins to circulate (Cleveland.com), Rated: A

Splash Financial is a perfect example of this long journey.

Splash Financial completed a $3.3 million financing round in January of 2017 from several local angels and will become the newest entrant in the booming digital lending marketplace that includes LendingClub, OnDeck, SoFi and Cabbage.

The company is now working with banks to help build an efficient lending platform where a strong capital source (i.e. – the banks) do not have immediate access to the doctor marketplace.

1 in 5 Small Business Owners Would Give up a Vacation Day Rather Than Their Smartphone (Small Biz Trends), Rated: A

According to a recent survey of small business owners on their mobile device use by peer-to-peer lending marketplace Funding Circle, one in five (20.4 percent) small business owners said they would rather give up a vacation day than their smartphones for a week.

Funding Circle also found more than half (56 percent) of small business owners surveyed find their smartphone gives them the flexibility to work wherever and whenever they want, so they can make time for other passions.

Nearly half (49 percent) said their smartphone keeps them in closer contact with loved ones while away from home — via tools like text messages throughout the day and video calls while traveling for work.

Forty-four percent said having their smartphone helps them relax during vacation time because it gives them peace of mind to know if there’s a problem with the business at home, they are accessible.

Follow the yellow Laurel Road (Transform Magazine), Rated: A

National online lender Laurel Road, previously known as Darien Rowayton Bank Lending Division, is a division of the Connecticut-chartered Darien Rowayton Bank, which launched over a decade ago in 2006. Wishing to define its bank lending division as the first source of income advice and financial security for the state’s many university students, DRB turned to the New York office of international design agency Brand Union to create an identity and help carve out its unique path.

Laurel Road’s new strapline, also developed by Brand Union, is ‘Rewarding determination’ and acts with double meaning, being reminiscent of both the student’s educational motives and the lender’s financial role. It also serves to encourage its customers to pursue their college journey to its conclusion,

loanDepot: “The Momentum is Just Starting” (Crowdfund Insider), Rated: B

One of the most promising is loanDepot, the creation of CEO Anthony Hsieh, has become one of the top mortgage lenders in the US. Additionally, loanDepot has migrated into the personal loan space too challenging online consumer lenders like LendingClub.

RealtyShares Sources Debt For Seattle Student Housing Deal (Bisnow), Rated: B

RealtyShares, an online marketplace for real estate investing, has sourced $11.9M for the acquisition and partial recapitalization of a 10-property portfolio of student housing in Seattle.

3 Alternative Ways To Hedge Against A Market Downturn (NASDAQ), Rated: B

When approached correctly, peer-to-peer lending can be among the safest ways to invest right now.

The key to making it safe is to diversify across many loans. Diversification eliminates the risk of default because any single loan you invest in can default without sinking the entire investment.

I consider peer-to-peer lending via a reputable platform the safest way to invest right now while still earning respectable returns on your money.

United Kingdom

Zopa boss Janardana details plans for customer-centric bank (AltFi), Rated: AAA

Zopa aims to launch its bank next year with a series of products based on simple, flat pricing – and a direct challenge to the industry’s traditional strategy of milking their large “back books” of existing long-term customers who rarely switch or shop around.

Jaidev Janardana, Zopa’s chief executive confirmed in an exclusive interview that credit cards and auto-finance would be among the first products, and would charge a single rate for all customers, instead of ultra-low teaser offers that flip to high rates after a fixed term, catching borrowers who do not switch.

He pointed out that Zopa already follows this approach in its P2P lending with all investors receiving the same rate, and returns changing for everyone simultaneously. The company expects to apply to the Prudential Regulation Authority for its banking licence later this year.

Ranger Direct Lending Enters Arbitration Against Investee Princeton (London South East), Rated: AAA

Ranger Direct Lending Fund PLC said Monday it has entered arbitration proceedings against the parent company of investee firm Princeton Alternative Income Fund Ltd, following a provision taken over a loan portfolio.

Ranger said Monday it is now seeking to enforce redemption and provision of financial information rights against Princeton via the arbitration proceedings.

Lendy highlights gap between property prices and key influences (Bridging & Commercial), Rated: A

Lendy stated that residential property prices have risen by 20% since the start of 2014, however, the LPP, the new property market index, has only increased by 17% during the same period with the gap between them continuing to grow.

Fintech credit firm Quint posts record revenues (Express), Rated: A

FAST-growing UK fintech group Quint is forecasting a £50 million plus turnover this year after seeing a record 64 per cent rise in growth and revenues rise to £32 million.

The main drivers are the launch of its consumer credit comparison site MoneyGuru.com as well as strong growth in its lending platform Monevo and Monevo data services business.

Racefields to buy and sell debt from bridging lending market (Bridging & Commercial), Rated: A

Racefields is seeking to connect with bridging lenders who are interested in refinancing parts of their loan book after opening a trading room to buy and sell debt from the bridging market.

Blockchain raises $ 40 million from Lakestar and Google’s venture arm (Business Insider), Rated: A

Bitcoin and blockchain technology company Blockchain has raised $40 million (£31.5 million) in its second round of institutional funding.

European venture capital fund Lakestar and GV, Google’s venture capital arm, both led the round. Nokota Management and Digital Currency Group also took part in the investment, as did Blockchain’s existing investors Lightspeed Venture Partners, Mosaic Venture Partners, Prudence Holdings, Virgin, and Sir Richard Branson.

The Series B funding takes the total raised by Blockchain to $70 million (£55.2 million).

Why Sipps aren’t yet embracing P2P (MoneyWeek), Rated: A

Since April 2016, investors have been able to shield gains from peer-to-peer (P2P) lending from the taxman in the innovative finance Isas (IF Isas). And while it has taken a while for most P2P platforms to win the necessary approvals from HM Revenue & Customs and the Financial Conduct Authority (FCA) to offer IF Isas, these products are finally beginning to take off, with several launched since the start of the new tax year. However, the same can’t be said for P2P investments through self-invested personal pensions (Sipps).

Referral schemes: earn over £1,000 through family and friends (BT), Rated: B

People using peer-to-peer platform Funding Circle can net £50 if they recommend a friend or relative who goes on to lend at least £2,000. Normally, Zopa investors can earn up to £50 if the person they recommend lends £2,000 with the platform. They’ll receive £50 too. However, at the time of writing Zopa isn’t accepting any more investors due to high demand.

Elsewhere, Alliance Trust Savings will give existing customers a £50 Marks and Spencer voucher when they get a friend or family member to open an Investment Dealing Account, ISA or Select SIPP. Your friend will get £25 worth of vouchers, too.

Mutual Scottish Friendly is offering two £25 MyRewards card to their customers – that’s one for the customer and one for the person they recommend.

China

Internet majors, banks edge closer to fintech success (China Daily), Rated: AAA

China’s internet giants that forayed into online finance are now joining hands with banks, their perceived competitors, to succeed together in the booming financial technology or fintech sector.

The latest such partnership is between Tencent Holdings Ltd and Huaxia Bank Co Ltd, which was announced on Thursday.

Tencent’s peers, Baidu Inc and Alibaba Group Holding Ltd, which together comprise China’s “Tech Trinity”, are jostling for supremacy in the internet finance segment. The two already have partnerships or collaborations with the nation’s top lenders.

JD.com Inc, another e-commerce major, has also joined the fintech partnerships fray. It is working with ICBC, China’s largest bank by assets, on fintech, retail banking, loans for small and medium-sized enterprises, and consumer finance.

European Union

Ingenico ePayments Partners with French FinTech Company SlimPay on SEPA Direct Debit (EuroInvestor), Rated: A

Ingenico ePayments, the online and mobile commerce division of Ingenico Group, today announced that it has teamed up with French recurring payments specialist Slimpay to support a SEPA Direct Debit (SDD) solution the company is developing for online merchants to simply and securely create and manage the e-mandates required to process SDD payments. With the partnership, SlimPay joins a rapidly expanding ecosystem of exciting and innovative FinTech companies that work closely with Ingenico to jointly develop new solutions for online merchants.

International

Aegon Life insurance company explores e-commerce channels to sell policies (Financial Express), Rated: AAA

Private sector life insurer Aegon Life Insurance Company is exploring options to sell policies via fintech and e-commerce platforms. The company’s Chief Digital Officer Martijn de Jong said digital channel is to become the primary channel for the insurers to expand customer base.

The company’s first premium income grew by 30 per cent to Rs 10.40 crore during April-May period of the current fiscal, according to data available with Irdai. Aegon Life Insurance is a joint venture between global insurer Aegon and Bennett Coleman & Company (India).

Australia

Digital advice will bypass member apathy, embarrassment (Investment Magazine), Rated: A

Despite the tremendously importance of retirement planning to the long-term financial security of the working population, the majority of Australians tend to neglect their superannuation funds throughout most of their working lives.

For example, more than 50 per cent of Australians now retire on a date not of their choosing. In addition, research from global banking and financial services firm HSBC showed that a staggering 41 per cent of Australian pre-retirees do not receive any retirement advice.

Digital advice allows users to bypass any potential sensitivities they may feel when consulting a human adviser. Those who have limited knowledge about the basics of their own savings goals or liabilities may feel too embarrassed to talk to a professional and therefore switch off from engagement.

India

Fintech Startup Stashfin Raises $ 5 Mn Funding From Snow Leopard Ventures, Others (Inc42), Rated: A

Delhi-based fintech startup Stashfin has raised $5 Mn Pre-Series A funding from Snow Leopard Ventures and Singapore-based Alto Partners. Snow Leopard Ventures is the VC arm of the Kirloskar Group.

Stashfin is the parent company of digital lending platform, StashEasy. It was founded in February 2016 by Tushar Aggarwal.

Middle East

Machine learning is transforming lending (Khalee Times), Rated: AAA

In June 2015, the World Economic Forum published The Future of Financial Services – How disruptive innovations are reshaping the way financial services are structured, provisioned and consumed. The paper defined a taxonomy for disruption in financial services. It identified six broad areas and within them, 11 clusters of disruptive innovation.

The six areas are Payments, Market Provisioning, Investment Management, Insurance, Deposits & Lending and Capital Raising. Of the 11 clusters in the report, the combination of Alternative Lending and Shifting Customer Preference clusters are most relevant to today’s article. Within this combination, the Banking-as-Platform movement is playing a remarkable intermediary role in matching lenders and borrowers via a seamless, transparent, user-friendly standard API based model which leverages advances in processing power, artificial intelligence, user interfaces and design-thinking.

Traditional lenders, i.e. banks, usually find it difficult to match the agility and granular understanding that P2P Lending players have. Banks’ credit evaluation and origination platforms are often industrial-age processes with a large quantum of human intervention.

Canada

Billionaire Buffett throws lifeline to cash-starved Home Capital (Daily Mail), Rated: AAA

Berkshire Hathaway Inc’s commitment of a C$2 billion (US$1.51 billion) credit facility to Home Capital Group Inc, Canada’s largest nonbank lender, marks the billionaire’s latest effort to shore up a company in dire need of cash.

Home Capital shares soared as much as 18 percent, but was still more than two-thirds below the 2014 peak.

Berkshire also agreed through its Columbia Insurance unit to buy up to C$400 million (US$302 million) of Home Capital shares for a 38.4 percent stake, pending shareholder and regulatory approvals.

Home Capital has suffered a deposit exodus resembling a bank run since mid-April, when the Ontario Securities Commission accused it of deceiving investors.

Authors:

George Popescu
Allen Taylor

Tuesday June 13 2017, Daily News Digest

credit card charge-offs

News Comments Today’s main news: KBRA assigns preliminary ratings to Lending Club securitization. Ant Financial extends online credit service to retailers. Credit Peers secures 45 million GBP credit line. Today’s main analysis: A significant increase in US credit cards defaults. Today’s thought-provoking articles: 4 in 10 Brits are shunning savings. Why India’s fintech startups are flocking to the […]

credit card charge-offs

News Comments

United States

  • KBRA assigns preliminary ratings to Lending Club securitization. GP:”The securitization volumes continue to increase. This is a package of near prime unsecured consumer loans.”
  • Lending Club markets first sponsored deal. GP:”This should be a teamplate for further securitizations. Why is this important? Because this further diversifies the sources of capital available to Lending Club and also probably makes their capital even cheaper. This should also perhaps enable Lending Club to increase their revenue by turning some profit on these securitizations. All in all, I think it’s a very bullish sign for Lending Club.”
  • Americans are suddenly defaulting on credit cards. GP:”The increase is still not out of the channel bounds we have seen since beginning 2014 for the average credit card company except for Capital One. The question is: Is Capital One ahead of the pack in noting defaults or are they a special case? Further analysis  seems to point that underwriting standards have recently degraded in fact. Would this be seen this quickly in the default performance? “AT:”Excellent analysis. Remember the mortgage crisis? The S&L crisis? Bank failure bailouts? The controversial CFPB was created to solve some of the problems associated with consumer financial management behavior. Could we be headed toward another political crisis? If it is perceived that banks are using poor risk assessment metrics or issuing credit card debt to people who shouldn’t have it, then we may see more headlines soon.”
  • CommonBond closes $231M securitization. GP:”Aa3 from Moody’s. CommonBond’s fourth and largest, and was more than three times oversubscribed by investors.”
  • Marketplace Lending: The Next 10 Years GP:”Most industries follow the same bell curve of solution and no problem, problem found, exponential increase, margin collapse, consolidation, new innovation. I don’t see why online lending is any different.”
  • The next industry Amazon could dominate. GP:”Amazon will probably dominate lending to Amazon vendors. That is not an industry, just a small and growing piece of it. Will Amazon dominate retail commerce in its entirety? I hope not, as in general, we don’t think that monopolies are good for society.” AT: “An overstatement. Amazon is a product retailer. While there may be a good business case for Amazon having a lending vertical, Amazon will never be a specialist in online lending, to small businesses or otherwise. But there are some good points made in this article, one of which is the cost of the loans themselves–not exactly competitive.”
  • Rubicon adds Bond Street for financing options. GP:”Growth through partnerships continues to be the  best way for good cost of customer acquisition which is one of the two pain points (together with cost of capital).”
  • Corporate America has lost control of your wallet. AT: Interesting comparison of PayPal and Bitcoin. All to say that banks may not be necessary, which is arguable despite Bill Gates’ prescient wisdom.”
  • PeerStreet offers new way to bet on housing. GP:”PeerStreet offers p2p investment in debt in real estate. Is the yield sufficient to justify it?”
  • The best way to beat robos: Be more human. GP:”In my experience in capital markets the robos work until the market type changes. And markets change types, due to the underlying source driving source changing, every few months. “AT: “I’m seeing more and more of this type of advice for financial advisors.”
  • Marketplace lending and the future of consumer bitcredit. AT: “Interesting podcast interview.”
  • Fundbox launching new product for SMBs. GP:”A line of credit”
  • SoFi has applied for a bank charter. GP:”Here is the application.”
  • Elevate launches analytics team in San Diego.
  • Lendio Pilots Online Lending Platform with Comcast Business Customers GP:”Growth through partnerships continues to be the  best way for good cost-of-customer-acquisition which is one of the two pain points (together with the cost of capital).”

United Kingdom

China

European Union

International

India

Asia

News Summary

United States

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-NP1 (Digital Journal), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2017-NP1 (“CLUB 2017-NP1”). This is a $279.388 million consumer loan ABS transaction that is expected to close June 22, 2017.

This transaction is LendingClub Corporation’s (“LendingClub” or the “Company”) first sponsored transaction and the second rated securitization of near prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform. All loans in this securitization are whole loans that were purchased through a pro-rata allocation of the near prime loans originated on the platform by seven third parties unaffiliated with LendingClub.

Lending Club markets first sponsored deal (Global Capital), Rated: A

San Francisco-based online platform Lending Club is sponsoring its first multi-seller securitization, which is backed by a portfolio of near-prime consumer loans.

“A club deal program enables Lending Club to drive standardisation in offering docs, covenants, structure, servicing, collateral consistency, and offering cadence,” wrote Ram Ahluwalia.

Americans are suddenly defaulting on their credit cards (Business Insider), Rated: AAA

The American economy has looked pretty robust of late — unemployment just hit a 16-year low, and stocks recently reached an all-time high.

This makes it all the more curious that Americans have suddenly stopped paying off their credit-card bills at a rapid rate.

In the past two fiscal quarters, banks reported a steep rise in credit-card charge-offs — debt that companies can’t collect from their customers — according to a report from Moody’s.

The sharp increase, the largest since 2009, is especially unusual given how strong the US employment market has been, Moody’s noted. It suggests that American consumers haven’t fallen on hard times so much as banks have started to loosen their standards and issue credit more aggressively.

Charge-offs and unemployment tend to be related: When people lose their jobs, credit cards tend to be one of the first bills people stop paying, as compared with loans for a home or a car in which people risk losing those crucial assets.

CommonBond Closes $ 231M Securitization (CommonBond Email), Rated: A

Of the transaction, CEO David Klein said:

“Our highest-rated and largest deal yet clearly reflects both the growing investor and customer demand for CommonBond’s products. By maintaining maniacal focus on our category, and delivering the best possible experience for our members, we’ve been able to consistently provide investors with superior credit quality assets. We’re pleased to welcome a standout group of investors to this transaction. And as a programmatic issuer, we look forward to continuing to bring opportunities to market for investors over time.”

Highlights include:

  • The offering achieved AA ratings from Moody’s and DBRS – Aa3 and AA, respectively – which are our highest ratings to date.
  • The transaction was CommonBond’s fourth and largest, and was more than three times oversubscribed by investors.
  • CommonBond and Goldman Sachs acted as co-sponsors for the transaction. Goldman Sachs served as structuring agent, co-lead manager, and book-runner.
  • Barclays and Citi served as co-lead managers and book-runners on the transaction as well. Guggenheim Securities served as co-manager.
  • CommonBond’s inaugural securitization from 2015 was also recently upgraded by DBRS.

Marketplace Lending: The Next 10 Years (deBanked), Rated: A

The marketplace for consumer and small-business loans has come a long way over the last 10 years. Since the early days of peer-to-peer lending, there has been a great proliferation of new types of intermediaries creating new layers of distribution for the risk involved with the lending process. Now marketplace lending has reached an inflection point that will create a much different scenario with fewer players and more partnerships.

The linchpin holding this model all together is technology including machine learning, which is driving more efficient distribution. “Technology is what has made marketplace lending so rich and competitive. But technology firms must now compete within the market they’ve created. And typically technology – once it exists can be commoditized,” said Hadden, adding that technology will eliminate intermediaries, not create new ones.

Meanwhile, growth for the software providers will be through partnerships.

The Next Industry Amazon Could Dominate (Fortune), Rated: A

Amazon revealed last week that it loaned $1 billion to merchants on its marketplace in the past 12 months. Square and PayPal have adopted similarly successful models. As of November, Square’s two-year-old lending arm had lent $1 billion to businesses. PayPal’s small business lending is growing at a rate of $4.5 million a day.

These tech giants’ emergence and momentum in this burgeoning industry might be the boost online lending needs to become a mainstream option for small businesses.

They’re well positioned to succeed for a few reasons. First, the tech giants have massive, active customer bases; Amazon has 2 million potential lending customers already selling products on its own marketplace.

Second, while there are certainly well-known players inside the online lending space, from OnDeck to Lending Club, there’s no direct lender that’s a household name.

Third, companies like Amazon, Square, and PayPal know who they’re lending to. Since their core business model encompasses their customers’ business transactions, they know exactly how much money their customers are making and when that money comes into their business. This information makes the tech giants better prepared and more likely to underwrite loans for businesses that might have been denied elsewhere.

While Amazon’s pricing is particularly attractive, with estimated annual interest rates between 10.9 and 12.9%, PayPal’s annual percentage rate (APR) is estimated to be between 15 and 40% and Square’s is estimated between 30 and 35%. This pricing is competitive for short-term loans, but if business owners have larger, longer-term, or revolving credit needs, they could qualify for more cost-efficient options.

Rubicon adds Bond Street for financing options (Waste Today Magazine), Rated: A

Rubicon Global, Atlanta, has announced online lender Bond Street, New York, has joined as a partner in its RubiconPro consortium buying program. The program delivers fuel, equipment, maintenance and financial benefits for independent waste hauling companies and truckers across North America.

Rubicon says Bond Street is an affordable option for companies to finance growth investments such as hiring additional employees, purchasing inventory or equipment or refinancing a business credit card. An online lender, Bond Street provides one-year to three-year term loans that range from $25,000 to $ 1 million, with rates starting at 6 percent, according to the company.

These loans were created to help homeowners, but for some they did the opposite (Los Angeles Times), Rated: A

Now her mother, who receives $11,600 a year from Social Security and suffers from dementia, is struggling with a roughly $50,000 loan paid through a $5,500 annual tax assessment — an increasingly popular form of home-improvement financing known as PACE.

Edwards said the contractor explained that “a government program” would help the octogenarian afford the improvements, but never explained how the payments would work or warned them Hill could lose her house if payments were missed.

The total amount lent for residential PACE projects topped $1.5 billion in 2016, up from $350 million just two years earlier, according to trade group PACENation.

The loans are secured by a property lien and if unpaid a borrower can be foreclosed upon. Consumers put no money down and usually don’t pay anything for at least six months. Eligibility is largely based on home equity. Credit score and income are not a factor.

Many consumers simply know their loans as the HERO program, the name of the PACE program from the industry’s biggest lender, Renovate America in San Diego.

Critics say PACE can serve a worthy purpose, but worry too many consumers are agreeing to loans they don’t need or understand after being contacted by aggressive contractors, who often make cold calls or engage in door-to-door marketing.

According to lawsuits and interviews with borrowers and their advocates, some contractors are inflating the cost of their services and misrepresenting how much the loans cost or how they are paid back.

Contractors can get consumers approved on the spot, having them sign documents on a tablet computer — an experience advocates say can be confusing, particularly for elderly homeowners. Lenders then send final financing documents to homeowners for their signature, with the process taking a few hours to several days.

The three major private lenders — Renovate America, Renew Financial of Oakland and Ygrene Energy Fund of Petaluma, Calif., — say most of their customers come away happy and point to low default and delinquency rates as evidence the programs are working.

Across the nation, less than 1% of all securitized PACE loans that Kroll Bond Rating Agency tracks have defaulted, said Cecil Smart, a senior director at the company.

Renovate America said over the last five years, none of its clients have been foreclosed on for not paying their PACE loan, but nearly 80 homeowners with such financing, or 0.08% of the total, have been foreclosed upon after they didn’t pay their mortgage.

Corporate America Has Lost Control Of Your Wallet, Thanks To These Innovators (Huffington Post), Rated: A

For as long as there have been big banks, Wall Street has controlled your money. They’ve chosen who gets loans, how much they cost, who gets access – they’ve basically hand picked the economic winners and losers of the world. But not anymore, thanks to the rise of the sharing economy, financial technology, and the disruption of the traditional banking system.

The democratization of money starts with decentralizing control over that money. And that means more peer-to-peer payments, greater convenience, and a simple, easy-to-use electronic payments system working behind the scenes. Wirecard AG is a leader on all these fronts, helping consumers break free of big bank control.

We’ve had a pretty convenient way of sending money abroad, paying for odd jobs and transferring money online for goods and services for a while now. All by using an email address. PayPal came onto the scene breaking down the need for costly bank transfers and setting up recipients.

Like payment company, Square. Their convenient app, Square Cash, lets you send money from email to email.

Peer to peer lending companies like Lending Club, Prosper, and Upstart, now provide individual loans of up to $35k and business loans of up to $300k.

And for those of you comfortable with an unregulated, digital type of platform, now you can buy and sell in Bitcoin.

In fact, a report by Goldman Sachs found that one third of millennials don’t believe they’ll need or have a bank account within the next five years! And that makes Wall Street traders tremble.

PeerStreet Offers New Way to Bet on Housing (Investopedia), Rated: A

Whether he stills feels this way or not, Burry has placed a different bet on the U.S. housing market by taking a seat on the board of PeerStreet, a peer to peer marketplace that allows investors to buy into the debt of real estate investments. Think Lending Club, but for real estate, where investors can access prime traunches of real estate debt. It’s real estate loan securtization by any other name, but by investing in the debt of a real estate investment at low loan to value ratios, PeerStreet is offering what it calls a ‘safer type of real estate investment’. If things go sour, debt investors are paid off ahead of equity investors, thereby cushioning the risk. Furthermore, PeerStreet advertises 6-12% annualized returns, and the loan periods are as short as 6 months to a just a couple years, but only for accredited investors.

The best way to beat robos: Be more human (Financial-Planning), Rated: A

Anything in an adviser’s daily routine that can be automated should be outsourced to technological tools, says Alan Moore, co-founder of XY Planning Network. According to Bloomberg, 58% of an adviser’s role can be automated with artificial intelligence.

Fava agrees, suggesting that rather than trying to best robo advisers, advisers should shift their focus to aspects of their organization that requires a human touch.

Virtual meetings can take place anytime via video chat and chat bots can help answer routine questions. In his research McDermott says he’s found a growing number of advisers using video chat for initial consultations and their clients are satisfied with telephone consultations afterwards.

Another easy automation is password management software, McDermott says. Using that tool is simpler than trying to remember 70 passwords or having to input and look them up individually on a spreadsheet, he says.

Marketplace Lending and the Future of “Consumer Bitcredit” (American Bankruptcy Institute), Rated: A

A podcast interview with Profs Andrew Dawson and Christopher Odinet.

Marketplace Lending and the Future of “Consumer Bitcredit” – Episode 203

Fundbox Launching New Product for SMBs (Fundbox Email), Rated: B

Tomorrow, Fundbox, the leading cash flow optimization platform for small businesses will unveil its newest product, Direct Draw – a revolving line of credit (up to $100,000) that offers business owners instant access to working capital, without using personal credit scores and we wanted to give you an early look. The company will also reveal survey findings indicating the widespread industry need for the Direct Draw product; 65 percent of business owners don’t believe that FICO should be tied to business credit.

Direct Draw enables Fundbox to help the 18M SMBs in the U.S. that are underserved by existing funding options, most of which rely on personal credit, something that is unpopular with many SMBs. For Direct Draw, customers are approved using bank account data.

Would you like to see the embargoed release and / or speak with Eyal Shinar, Founder & CEO? Eyal has often said that he aims to be the next Visa, and they are on well on their way. Also, Direct Draw is possible because of the company’s deep investments in artificial intelligence and Eyal can speak to that as well.

SoFi has applied for a bank charter (Tech Crunch), Rated: B

In May, SoFi CEO Michael Cagney told TechCrunch the company would be applying for a bank charter “in the next month.” Well, it’s about a month later, and — surprise! — the company has actually done so.

On June 6, SoFi applied for a de novo (or “new”) bank charter, according to a filing notice on the FDIC website. There will be an open comment period on the application for the next month, which will close July 6. The company confirmed it submitted the application, which TechCrunch has received a copy of.

The company is applying for an industrial loan charter under the name SoFi Bank in Utah, listing a Salt Lake City location as its proposed depositary address.

Elevate Launches Analytics Team In San Diego (SocalTech), Rated: B

San Diego-based Elevate Credit, a fintech startup aimed at providing credit to non-prime customers, said it has launched a new “Advanced Analytics” center in San Diego. The company said the San Diego team has more than 35 data scientists, including more than 25 member with advanced degrees, and eight with PhDs.

Lendio Pilots Online Lending Platform with Comcast Business Customers, (Email), Lendio

Lendio, a marketplace for small business loans, today announced a pilot agreement with Comcast Business designed to provide its small business customers with quick and easy access to capital. Through the collaboration, Comcast Business customers will have more streamlined access to Lendio’s marketplace and network of more than 75 lenders, where they can get matched with the financing they need to help them start, grow and thrive.

According to the Small Business Administration (SBA), there are more than 28 million small businesses in America, accounting for 48 percent of U.S. employees. Many of these businesses face obstacles getting a loan, like researching an overwhelming number of potential lenders, soliciting financing offers, and determining what loan is right for them. The collaboration between Lendio and Comcast Business will seek to resolve these challenges by providing more direct access to capital through an established set of lenders offering a wide range of loan offerings, and personal attention from small business loan experts.

Comcast Business customers participating in the pilot will be able to choose from various loan products such as lines of credit, working capital loans, Small Business Administration (SBA) loans, term loans, equipment loans, accounts receivable financing, and more.

United Kingdom

Four in 10 Brits shunning savings, RateSetter warns (P2P Finance News), Rated: AAA

ALMOST four in 10 Brits failed to save a penny in the three months to April, RateSetter research has found, with the peer-to-peer lender warning that this could lead to financial difficulties down the line.

37 per cent of UK adults did not put any money away, and just 21 per cent expected to be able to save more over the next 12 months, data from the platform showed on Tuesday.

Almost half of respondents to a survey commissioned by RateSetter blamed the non-existent returns currently available on cash, with the higher rate of inflation compressing income opportunities.

Credit Peers Secures £45 million Credit Line (PR Newswire), Rated: A

Credit Peers, one of the first peer-to-business (P2B) secured property lending platforms in the UK, announced today that it has secured a credit line of £45 million from a European investment management firm.

The financing should allow Credit Peers to expand its growing business by providing fast-tracked debt funding to experienced property investors and developers on investment grade property transactions across the UK.

Earlier this year Credit Peers launched its loan-based P2B platform offering property transactions to the public that were previously only available to institutions and banks. Credit Peers aims to significantly speed up the process of property financing compared to the traditional model.

Fintech CEO on how to create Buzz in a start-up (CNBC), Rated: A

A fintech can effectively become a ‘concierge’ directing its customers to insurance, or any other financial service if they control the data. However, linking to established insurers or banks, which often have legacy IT systems and data silos that cannot interact with newer formats, messaging standards and more modern IT, can be problematic for any start-up looking to partner with a financial institution (FI). This may be an issue for BuzzGroup in the future as it attempts develop a data-centric ‘concierge’ business and scale up.

The spin-off BuzzVault insurtech digital inventory and app, which stores and protects belongings on the blockchain, takes a fee from insurers for its services, effectively acting a sales channel. But it offers insurance partners a fresh approach to customer acquisition and retention that they would not otherwise possess.

Many older fintech firms see insurance as another vertical in which they can use the same artificial intelligence (AI) techniques, big data analysis, blockchain or other technologies that they’ve already used in the investment or retail banking arena , to disrupt a new area. Other newer start-ups are focusing on insurtech as a standalone vertical because they believe the younger unploughed field has more scope for growth. BuzzGroup falls into this later group.

BuzzGroup has so far raised $9.2m in five rounds of equity fundraising from a mix of nine angel, seed and accelerator investors.

  • Wayra contributed €532,610 ($579,865) in February 2015, having been part of an earlier €597,129 ($650,000) BuzzGroup fundraising round in March 2014 that included Andrew Weisz, Justin Peters, Tom Singh and Avonmore Developments.
  • Wayra also contributed €60,000 ($65,000) at the birth of BuzzGroup in May 2013, alongside money from the founder.
  • The last round of investment in August 2016 raised £6 million ($7.75m) from White Mountains Insurance Group – the largest insurtech seed investment at that time in Europe – and emanated from the SBC InsurTech London.

One possible way around the recruitment challenge is to hire hungry youngsters who want to be part of an innovative new company and to perhaps offer them an equity stake in exceptional circumstances to help retain and motivate them.

As start-ups grow the ability to hand out equity stakes naturally diminishes, especially as angel and seed fund investors will be hungry for their cut.

Venture capitalists jamming on the brakes in 2017 (CNBC), Rated: A

The tidal wave of venture capital (VC) money that flowed into global financial technology (fintech) investments during 2016 has already shown signs of receding, according to the U.K.’s fintech chief.

Continuation of such momentum is critical given than once the U.K. has left the EU – with the clock already ticking down to a March 2019 deadline – the domestic fintech industry will lose access to the European Investment Fund. This EU body provides financing to small and medium sized enterprises and contributed around EUR 2.3 billion ($2.6 billion) to U.K. VC funds between 2011 and 2015.

Two institutional investors increasing stakes in Funding Circle and Honeycomb investment trusts (AltFi), Rated: A

Two newer entrants include the £405m Funding Circle SME Income fund, launched November 2015, and £300m Honeycomb, launched December 2015. The two portfolios differ greatly but both are products of the bank-deleveraging trend and have seen their assets grow as high investor demand has also prompted new issuance of shares.

The Railways Pension Trustee Company recently increased its stake in Funding Circle SME Income to fund to a 26.18 per cent of total share capital making their holding worth – according to today’s prices – more than £100m.

Invesco Perpetual, which backed Honeycomb since launch, recently increase its stake following an oversubscribed share issuance of more than £100m. It now has 37.8 per cent held in the fund, representing £113m at today’s share price.

China

Ant Financial extends online credit service to retailers (China Daily), Rated: AAA

Ant Financial Services Group, the online finance firm backed by billionaire Jack Ma, will extend its online consumer credit service to four million retail businesses across the country to boost sales and encourage spending-as China’s consumers increasingly feel more comfortable shopping with borrowed money.

iang, vice-president of Alipay Business Unit at Ant Financial, said that sales surged by an average 41 percent per client year-on-year from 2015 to 2016 after a number of retailers adopted Huabei, or Ant Check Later, a loan and installment service.

Credit score by Alibaba applicable for visa applications to Japan or Luxembourg (ECNS.com), Rated: A

Sesame Credit, a credibility scoring system used on Alibaba’s Ant Financial platforms, could be used as supporting documents for visa applications to Japan and Luxembourg, the People’s Daily reported on Thursday, citing the company’s announcement.

Ant Financial users with a score of at least 750 for Japan, or 700 for Luxembourg, on the scale which ranges from 350 to 900, will be “exempt from the normally required process of submitting bank records when applying through Alibaba’s travel-booking service provider for visas,” said the statement.

Interview with Co-founder and CEO of Monaco, Kris Marszalek (Urban Crypto), Rated: A

KM: We’ve certainly seen a number of people questioning this approach, I think it remains to be seen whether the decision was right or not. Our initial plan was to follow the advice of TokenMarket and launch in July, after at least a month of pre-marketing. We decided to go with an accelerated timeframe when we found out a competing project, that also does FX+Crypto was getting ready to launch their ICO in June.

UC: Can you tell us where are you guys based?

KM:  The only physical presence we have is in Hong Kong at the moment.

UC: What is the status of the Visa connection?

KM: We’re in the process of becoming a VISA program manager. Our card designs were not approved yet, so you can’t see any VISA logos on the website and apps. We’re just following the protocol here. Another reason we want to be extra careful is that TKN case showed VISA and other companies are not really keen on being associated with ICOs at this moment.

European Union

Revolut expands into business market (CNBC), Rated: AAA

Revolut, a financial technology (fintech) firm that offers foreign currency to consumers abroad at the interbank rate available on the financial markets is to expand into the business sector with claimed interest from large European corporations such as Virgin Atlantic.

Users of the new Revolut for Business app can set up an account within five minutes and hold, exchange or transfer money from 25 currencies, including British pounds, euros or U.S. dollars from this home bank account.

Three packages ranging from £25 up to £1,000 per month are available to business end users, who get additional features such as real-time spending notifications and data analysis alerts, plus dedicated customer support.

International

Real Estate & Alternative Investments in Bulgaria & Around the World (Novinite), Rated: A

The latest innovation in smart investing comes from stREITwise with their use of new legislation to provide one of the first crowdfunded office REITs. The idea behind their launch was to deliver private real estate crowdfunding into the hands of a younger group of investors who enjoy crowdfunding sites and would like to invest using the same technology.

Instead of relying on buying private REITs through financial advisors with hefty sales commissions and REIT fees added on, their new REIT keeps fees around 2% while avoiding joint venture deals that tend to add an additional layer of costs. New property deals are sourced directly to avoid outside consultants. Their first REIT specializes in acquiring and managing office space in central business districts and other neighborhoods in the U.S. where there is a need.

India

Why India’s Fintech Startups Are Flocking To Disrupt The UAE (Forbes), Rated: AAA

According to the Associated Chambers of Commerce & Industry in India (ASSOCHAM), India now stands third after the UK and USA in fostering the growth of technology startups.

Sandeep Jhingran, co-founder of cross-border payment start-up Remitr, says, “UAE has a high appetite for innovation. Investors here are ready to pay for creativity, and disruptive companies stand a fair chance to thrive.”

With more than 2.6 million members and a 30% population share, Indians constitute the largest expatriate community in the UAE. Specifically, there is a growing need for diverse financial services. While India’s fintech sector peaked in 2015, with investment reaching USD$2 billion, UAE’s fintech sector is showing signs of steady growth. A report titled State of Fintech by Wamda says that the number of fintech startups launched in the MENA region will reach 250 by 2020 from the current 105, and will be predominantly involved in offering payment solutions, P2P lending or raising capital. Notably, most of the startups surveyed in the report originated from the UAE.

India’s top court halts plan to link for biometric ID to tax (SMH), Rated: A

Indian citizens cannot be forced to enroll for a 12-digit unique identity number to be able file tax returns, the country’s top court said in a ruling that may be a hurdle for Prime Minister Narendra Modi’s plan to move transactions online.

The Supreme Court partially stayed a law that made the Aadhaar card mandatory for filing returns or for obtaining a 10-digit alpha-numeric code the Income Tax Department issues to tax payers. The stay is needed till a question on the right to privacy under Indian laws is decided by a constitution bench of the top court with at least five judges, a two-judge panel ruled.

Asia

PT INVESTREE Radhika Jaya (Investree), a pioneer peer-to-peer lending (P2P) marketplace in Indonesia, officially registered with the Financial Services Authority (OJK) on May 31 with the registration number of S -2492 / NB.111 / 2017 as indicated on the “Investee Radhika Jaya Registered Evidence” letter from OJK.

Investree is registered as an Information-Technology-based Lending and Borrowing Service Provider under the Directorate of Institutional and Products of Non-Bank Finance Industry (IKNB) administration.

As of June 5, 2017, Investree had successfully disbursed loans amounting 148 billion rupiah with 592 total loans, a 17.5% average rate of yield, and no defaults.

3 Western Governments Partnering With Asian FinTech Intitatives (Edgy Labs), Rated: A

The OCC feels it is high time to create a regulatory framework for FinTech banking institutions as the number of FinTech companies in the U.S. has soared. Investment in FinTech companies has increased more than ten times in the last five years, currently around $24 billion USD worldwide.

Meanwhile, FinTech Investment in Other Parts of the World

According to Nikkei again, soon, 10 new cryptocurrency platforms will be in use in Japan. This is all building on top of Japan’s already significant FinTech investment. Both legally and financially, Japan laid the groundwork in the spring of 2016 when they passed bills to recognize cryptocurrencies as the digital equivalent of money.

Singapore has FinTech Investment deals with South Korea, the UAE, France, and Japan, and their unique position in Asia makes them an ideal partner for FinTech-friendly countries in other regions.

In an effort to make intellectual Fintech investment, the Australian Securities and Investments Commission signed an agreement with Indonesia in order to share information of FinTech market trends and regulatory developments.

Swift, operator of the global interbanking platform, recently chose Hyperledger Fabric as the core tech for its blockchain proof-of-concept.

Nostro accounts make international transactions for the global banking system possible. Simply put, banks put their money into nostro accounts that are closer to a transaction destination so that funds are available to make global transactions more efficient.

The Australia and New Zealand Banking Group (ANZ), BNP Paribas, BNY Mellon, DBS Bank, RBC Royal Bank and Wells Fargo will all be participating in testing the Swift PoC.

Authors:

George Popescu
Allen Taylor

Monday June 12 2017, Daily News Digest

Philippine banking

News Comments Today’s main news: Zopa’s  6.1% return IFISA to launch June 15. CFPB’s Corday extends small biz lending RFI comment period. Zopa looking for 40 tech whizzes.  WeChat Pay available globally through Paymentwall. Today’s main analysis: Lending Club and the rise of securtization club deals. Today’s thought-provoking articles: China urges banks to devolve loan approval responsibility. How Thailand could […]

Philippine banking

News Comments

United States

United Kingdom

China

International

Australia

India

Asia

Philippines

News Summary

United States

Weekly Industry Update: Lending Club and The Rise of Club Deals (PeerIQ Email), Rated: AAA

A club deal program enables Lending Club to drive standardization – in offering docs, covenants, structure, servicing, collateral consistency, and offering cadence. As a sponsor, Lending Club is able control its brand in the public ABS markets and manage competing interests amongst issuers, placement agents, and investors. (See this week’s

Corday announces extension of comment period for small business lending RFI (Ballard Spahr), Rated: AAA

Last month, in conjunction with a field hearing, the CFPB issued the RFI, together with a white paper on small business lending.  In his remarks, Director Cordray revealed that, in response to requests for additional time to respond to the RFI (which currently has a July 14, 2017 comment deadline), the CFPB is extending the comment period by 60 days.

With regard to the CFPB’s debt collection rulemaking, Director Cordray discussed thedebt collection proposals under consideration by the CFPB which it released last July in anticipation of convening a SBREFA panel.

Elevate Launches Elevate Labs (News Channel 10), Rated: AAA

Elevate Credit, Inc., a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the launch of Elevate Labs at its new San Diego-based Advanced Analytics center. The center of excellence underscores the company’s commitment to innovation in the non-prime credit market.

Elevate’s industry-leading technology and proprietary risk analytics are optimized to help non-prime consumers meet their immediate financial needs while improving their financial futures. The company annually invests $40 million in its technology and analytics capabilities, including substantial investments in its proprietary IQ and DORA risk technology and analytics platforms, to support rapid scaling and innovation, robust regulatory compliance and ongoing improvements in underwriting.

DORA, Elevate’s proprietary risk analytics platform, utilizes a terabyte-scale Hadoop database composed of thousands of elements, 1.5 million customer records and other wide-ranging data inputs including credit bureau data, web behavioral and performance data, bank account data and other non-traditional data, to accurately assign risk to customers.

Elevate’s cutting edge technology and analytics team, worldwide, consists of the most advanced thinkers in risk analytics with more than 35 data scientists in our Risk Management department including over 25 staff members with advanced degrees and eight with PhDs. While the San Diego location is the company’s most concentrated and fastest growing analytics center, the team is spread across offices in Texas and the United Kingdom.

Here Are All The Financial Reforms That Will Disappear With Dodd-Frank (Forbes), Rated: A

The U.S. House of Representatives on Thursday passed the Financial CHOICE Act.

The Act has seven principals:

1. Taxpayer bailouts of financial institutions must end and no company can remain too big to fail.

2. Both Wall St. & Washington must be accountable

3. Simplicity must replace complexity

4. Economic growth must be revitalized

5. Every American must be able to achieve financial independence

6. Consumers must be protected

7. Systemic risk must be managed via profit & loss

The Act proposes to restructure the Consumer Financial Protection Bureau, an agency that monitors financial products from loans to high-fee investment products.

Stress tests for America’s big banks, another Dodd Frank invention, are also contentious. The CHOICE Act proposes major changes.

In mortgages, the CHOICE Act will aim to allow smaller banks to increase lending by minimizing a rule about qualified mortgages. The rule increases costs of lending to higher risk borrowers and often precludes banks from holding mortgages on their books. Modifying the rules may allow local banks to increase lending.

The Death of Basis Points? (ETF Trends), Rated: A

The Financial Services industry is in the middle innings of a multi-phased and disruptive process that began in 1993 with the first ETF, and jump-started in 2008 with the first “robo advisor.” These two disruptive events continue to put enormous downward pressure on the fees charged by mutual fund companies and individual Advisors.

I do not believe financial services is racing toward a flat-fee model. However, the pace of fee compression will accelerate as clients have more low-priced options from which to choose. The end-result is enormous pressure on traditional Advisors to justify their higher prices and deliver an asset management solution more sophisticated than buy-hold-rebalance.

There are six key steps to becoming a Quant Advisor:

1. Develop a small but powerful set of investment models that are both unique and compelling. As an example, we only work with a small number of Advisors in an area to create and keep a competitive edge.

2. Have discretion on client accounts. The real value of using models is the ability to affect many client accounts at the same time to create efficiency and scalability. Building scale is the only sustainable way to overcome fee compression.

3. Communicate. Most clients simply don’t need or want to meet with their Advisor four times a year, but they want regular access to bite-sized information about what their Advisor thinks. Creating valuable, but short-and-sweet communications keep a client happy and informed. Generic newsletters do not count (because no one reads them).

4. Create multiple channels for a client to engage. Most traditional Advisors have a simple fee grid based on assets. A Quant Advisor will have a service menu that provides options from super low-cost investment-only relationships all the way to complex financial planning solutions. Due to scale and efficiency, any of these service levels can be highly profitable. Maybe one of the options is aflat fee only service level?

5. Sell more than advice. A Quant Advisor sells financial advice/planning and asset management services. Traditional Advisors only sell advice/planning and pay someone else to provide asset management (such as managed accounts, SMA’s, mutual funds, etc.). By having a unique and compelling asset management capability in-house, Quant Advisors do not have to pay someone to do it for them. That creates a new revenue source and the ability to capture a higher percentage of the total fees paid by the client. As fee compression continues to eat away at advice/planning prices, having multiple services to sell a client creates a more stable revenue stream.

6. Be hyper-transparent. Clients are more afraid of what they do not know than what they do. By proactively talking about and disclosing fees (including the hidden ones), risk and performance the relationship can blossom based on a new level of trust and understanding.

Industry Power Players Join RealtyShares (RealtyShares Email), Rated: A

We recently had the honor of welcoming

U.S. business schools embrace ‘fintech’ as students clamor for courses (Reuters), Rated: A

Stanford University and Georgetown University business schools are planning to offer “fintech” courses for business school students for the first time this fall. New York University is planning a new course for undergraduates after launching a fintech specialization in its business school last year.

They join the University of Pennsylvania’s Wharton School, Columbia University’s business school and the Massachusetts Institute of Technology’s (MIT) Sloan School of Management, which all launched similar programs in recent years.

A number of prominent startups have exploded onto the fintech scene in recent years, fostering interest in mobile payment apps like Venmo, digital loan platforms like SoFi and robotic wealth managers like Betterment.

Lending Club Shareholders Approve Election of Directors (Crowdfund Insider), Rated: A

Present at the Annual Meeting in person or by proxy were holders of 313,460,225 shares of common stock, representing 77.7% of the shares of common stock outstanding.

The vote tallies were as follows:

Nominees
 
For
 
Withheld
 
Broker Non-Votes
Scott Sanborn
231,733,112
2,464,510
79,262,603
Lawrence Summers
189,603,973
44,593,649
79,262,603
Simon Williams
192,466,148
41,731,474
79,262,603

Approach alternative investments with care (Business-Standard.com), Rated: A

Unlike the wealthy, retail (individual) investors have limited options to invest in high-risk, high-return alternative instruments. The ticket size of such products — private equity, exclusive wines and paintings — are too high for small investors. But, in recent times, more avenues have opened that allow retail investors to make risky bets in assets other than stocks. For example, bitcoins is one such asset that younger investors are looking at. The price of this virtual currency has gone up from $579.13 a year back to $2,825.03 — a return of 488 per cent.

Marketplace Lending News Roundup – June 10 (Lend Academy), Rated: A

Fintech’s ultimate value: Making sense of the data explosion from American Banker – Interesting piece what the true role of fintech should be: making sense of the masses of data.

U.S. business schools embrace ‘fintech’ as students clamor for courses from Reuters – Today fintech is one of the hottest courses at MBA schools, driven by student demand.

Peer-to-peer lender calls hung parliament “the worst of all outcomes” from AltFi – Commentary on yesterday’s UK election from an online lending perspective.

Marketplace Lending: The Next 10 Years from deBanked – Interesting thoughts on where marketplace lending may be heading.

LendingTree, Inc. to Present at RBC Financial Technology Investor Day (PR Newswire), Rated: B

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced that it will participate in RBC Financial Technology Investor Day at The Westin New York Grand Central in New York, NY.

Doug Lebda, LendingTree Founder and CEO, is scheduled to present on Wednesday, June 14 at 8:55am ET. The presentation will be webcast live and archived at

Additionally, the company’s latest investor presentation will be available on its investor relations site at investors.lendingtree.com.

The week in real estate industry deals: June 5-9, 2017 (Inman), Rated: B

RealtyeVest lowered its required minimum investment amount to $5,000 for all offerings on their real estate crowdfunding platform for accredited investors. Previous minimum investment amounts ranged from $15,000 to $50,000, depending on the real estate project. The new $5,000 threshold is intended to draw first-time investors to experience RealtyeVest’s high-caliber performance with a nominal financial commitment. “We are seeing significant activity on our platform, however we feel there is a corner of the market we are not appealing to,” said Daniel Summers, RealtyeVest CEO, in a statement. “So we are offering investors a taste of our service with a new lowered investment amount for all projects. Once they see the quick return on their investments, they will no doubt want to increase their contribution amounts.”

United Kingdom

Zopa hunts for 40 tech whizzes as it narrows focus on bank launch (The Telegraph), Rated: AAA

Britain’s largest peer-to-peer lender has heightened its focus on building a bank, firing the starting gun on a recruitment push that will see it hire at least 40 developers for the project.

However its tune changed late last year, when it emerged that the technology firm wanted to challenge high-street lenders by offering deposit accounts and overdrafts.

Having raised £32m from investors eager to support the project earlier this month, the group is now looking to bulk out its workforce by at least 16pc – bringing in tech experts able to build a digital bank from scratch.

The hires will come from London and Barcelona, where Zopa opened a technology hub last week.

Zopa clarifies coverage ratios ahead of Core account launch (P2P Finance News), Rated: AAA

ZOPA has clarified the expected implications of phasing out of its provision fund as it prepares to launch Zopa Core on Thursday, a new account which will not be backed by the fund.

On 15 June, the peer-to-peer platform’s target date for unveiling its Innovative Finance ISA, the new account will formally take over from the firms’ existing Access and Classic products, whose safeguard fund will be phased out by December this year.

Existing safeguarded loans and new loans purchased before that deadline will continue to be covered by the fund until they reach maturity.

Zopa’s innovative finance Isa, paying projected 6.1%, to launch on 15 June (Which), Rated: AAA

Zopa’s long-awaited innovative finance Isa (Ifisa) will be made available to existing customers on Thursday 15 June, but it won’t be protected by the company’s Safeguard scheme.

The Isa, offering projected returns of up to 6.1%, will initially be made available to existing Zopa customers wanting to invest new money. It will then be possible to move existing Zopa loans into an Isa wrapper from 1 July, and transfer funds from third-party Isas from 17 August.

It is expected that new customers will have to wait two months or longer before being invited to open a Zopa Ifisa, due to expected high demand.

Zopa’s Safeguard scheme is a central compensation fund that aims to pay out to lenders whenever a borrower defaults on a loan. This fund is limited, so it could run out if lots of borrowers fail to repay, but it has covered 100% of eligible loans to date.

However, this scheme won’t be offered to Isa customers, nor will it be available to any new investors after December 2017.

It will offer two savings products in an Isa wrapper.

  • Zopa Core, in which your money will only be lent to lower-risk borrowers, offers expected returns of 3.9%.
  • Zopa Plus lends your money to a wider range of borrowers, offering expected returns of 6.1%.

LandlordInvest reports high demand for secondary market loans (P2P Finance News), Rated: AAA

ACTIVITY on LandlordInvest’s newly-launched secondary market has been better than expected, with investors shrugging off political uncertainty to snap up loan parts in record time.

The peer-to-peer lender, which specialises in buy-to-let finance, launched its secondary market in the middle of May.

Filip Karadaghi, the firm’s co-founder and chief executive, told Peer2Peer Finance News that uptake had been higher than expected, with no signs of a slowdown ahead of Thursday’s UK General Election.

Peer-to-peer comes of age as alternative asset class for investors (Financial Times), Rated: A

More than a decade after the first peer-to-peer sites launched in the UK, the sector that allows investors to lend directly to individuals and small businesses is coming of age. Two of the largest sites in the UK — Zopa and Funding Circle — were last month authorised by the City watchdog, marking a seal of approval for the lenders and providing a boost to the broader sector.

Institutional investors are already piling in. High-profile fund managers including Neil Woodford and Artemis invested more equity capital into RateSetter in recent weeks, valuing the company at more than £200m. Zopa completed a £32m funding round, led by Wadhawan Global Capital, an Indian financial services company.

The rise of peer-to-peer sites means that lending, which as an asset class has been a monopoly for the banks, is opening up to ordinary investors.

Othera and Credit Crowd strike a blockchain partnership (AltFi), Rated: A

Credit Crowd gets on Othera’s blockchain, citing transparency as the key issue.

Blockchain provider Othera has linked up with Australian fintech lender Credit Crowd, allowing the Sydney fintech to digitise its loans on blockchain.

The partnership will allow Credit Crowd’s loans to be tokenised and traded on digital asset token exchanges—in effect, a kind of securitisation.

Credit Crowd is a P2P marketplace that specialises in short-term loans, secured by first mortgage properties. The company claims to have facilitated more than A$100 million worth of loans since its founding in 2012 and managed over A$50 million in their retail fund.

P2P lenders stay away from apps (P2P Finance News), Rated: A

APPS may be seen by some as a vital tool for any fintech business but peer-to-peer lenders have largely avoided this area so far.

Of the biggest UK P2P players, only Funding Circle has an app for investors, while Zopa has one in development.

Instead, others such as RateSetter, MarketInvoice and Landbay have focused on the overall web, desktop and mobile user experience.

Julian Cork, chief operating officer at buy-to-let lender Landbay, said the platform had considered making an app but decided against it.

Will robo-advice mean checkmate for human financial advisers? (Lexology), Rated: A

To date, robo-advice offerings have tended to focus more on the less complex end of the financial advice spectrum. The FCA’s enthusiasm for robo-advisers stemmed largely from concerns about an ‘advice gap’, situations where consumers (particularly those with limited assets) are unable to get advice and guidance on a need they have at a price they are willing to pay. The FCA has therefore seen robo-advisers as a way of providing quick and inexpensive advice primarily in relation to lower value or less complex scenarios. Robo-advice is still in its infancy and is generally not yet at the stage where it can provide sophisticated advice in relation to complex circumstances. Certain external factors are also slowing the spread of robo-advice. For example, recent research sponsored by ING suggests that the majority of the public remains uncomfortable with the idea of automated advice and this attitude will take time to change. In addition, PI Insurers may feel, by necessity, that they need to take a relatively cautious view in relation to new and untested technology. Firms implementing robo-advice solutions may therefore face increased insurance premiums, which is a further potential brake on innovation.

For the foreseeable future then, it appears that human advisers have no need to be concerned. Robo-advice is in the process of automating only one part of the wider industry and even then at a relatively restricted pace. But what about the longer term? If we make the reasonable assumption that advances in robo-adviser technology are inevitable does that mean that robo-advisers will one day become so sophisticated and accepted as to render human input redundant?

Meet the next generation of fintech startups set to revolutionise the world of finance (Wired), Rated: A

Winner of the startup stage Curve, started out in 2015 to cut out the noise and disconnection in the banking landscape. The digital wallet platform is designed to connect all of a person’s financial services into a single go-to place online, which is accessed with a Mastercard.

Finimize has grown an online community of 100,000 people. Each day, members receive a newsletter that digests the biggest finance stories of the day and why they should matter to them.

AgentCASH is an enterprise grade omnichannel platform that enables SMEs to sell and manage their products on multiple channels in real time.

Crowdsurfer brings big-data engineering expertise to crowd and peer finance to help the world understand where funds are flowing to.

Reposit was developed by its CEO Curran McKay as a faster, more affordable alternative to the £3.5 billion tenancy deposit system.

Lendr uses artificial intelligence to act as a reverse auction platform for mortgages.

Co-founder of Capitalise Paul Surtees has built technology that enables SMEs and their advisors to find, compare and select the best lenders available to them – allowing them to access the funding available. The platform matches SMEs with lenders, who are ranked based on their past successes.

London-based Paybase rolls an end-to-end solution for payments, compliance and risk into one unified API. The platform is designed for marketplaces such as the sharing economy or crowdfunding sites, as well as fintech apps and products that have complex payment processes.

China

China urges banks to devolve loan approval responsibility to boost lending (BusinessLine), Rated: AAA

China’s banking regulator has urged lenders to devolve responsibility for loan approvals to boost credit to small and micro businesses, but also emphasised that risks need to be kept under control.

Guo’s comments were made at a forum on Friday, according to a statement on the website of China Banking Regulatory Commission.

P2P Industry News (Xing Ping She Email), Rated: A

Internet Investment Fund has been Subscribed in Down Payment of ¥30bn

The Chinese Internet Investment Fund was founded jointly by the Cyberspace Administration of China and the Ministry of Finance. The total size of the fund is around $14.9billion. The initial subscription (almost $4.4 billion) has been finished with $300million was acquired by central government as guiding fund, and the rest was raised from strategic investors. Thus, the driven coefficient of the government funds reached to 1:14.

After a new round of share price increasing, Alibaba’s market value has reached to $360bn.

On 9th June, shares of Alibaba jumped by 13.29% and closed at $142.34 per share, the companies’ total market value reached to $362.3 billion. Exceeding Tencent for the second time and become Aisa’s most valuable company.

Previously, Alibaba issued its annual report of 2017 fiscal year, showing that Alibaba has surpassed Tencent on core metrics such as revenue, net earnings and cash flow.

According a report released by Deutsche Bank, Alibaba's estimated revenue for 2018 fiscal year will be far higher than expected, and the disclosed information will drive its stock price up further.

Ping An Launches Fintech Fund (Crowdfund Insider), Rated: A

Sepaking at the recent WSJ D.Live Asia event in Hong Kong, Ping An CIO Jonathan Larsen said Ping An is launching a new fund to invest in early stage Fintech ranging from $10 million to $30 million, according to a report from Dow Jones (here).

NYSE-listed P2P firm confident on its business model (ShanghaiDaily), Rated: A

CHINA Rapid Finance will follow the strategy of “low and grow” to realize a stable and sustainable growth after its debut on the New York Stock Exchange on April 28,  Wang Zhengyu, founder and CEO of the Shanghai-based peer-to-peer lender, said in Shanghai yesterday.

CreditEase’s CEO Tang Shares Insights on FinTech in China at The Asian Banker Summit (PR Newswire), Rated: A

CreditEase’s founder and CEO Ning Tang was invited to deliver a keynote speech today at The Asian Banker’s 18th flagship Summit “The Future of Finance” in Singapore. The Summit gathered leading industry, government and academic speakers such as Barney Frank, former US Congressman and a leading co-sponsor of the 2010 Dodd–Frank Act, David Shrier, Managing Director, MIT Connection Science and Engineering, and representatives from: ANZ, Bank of the Philippine Islands, DBS Bank, the Federal Reserve Bank of Chicago, Prosper Marketplace, Prudential, and Uber.

Future Life, Future Finance

The theme of this year’s Summit shares the same vision as CreditEase at its 11th anniversary – “Future Life, Future Finance”.

In his keynote speech, Tang shared his insights as a pioneer and thought leader in the FinTech industry, giving an overview of the current landscape, and anticipating where opportunities will be against the backdrop of potential or inevitable changes.

Going Global

After 10 years of successful domestic growth, at its 11th anniversary, CreditEase is ready to accelerate its global expansion. The opening of the new Singapore office and Tang’s delivery of the keynote speech at one of world’s renowned financial summits is just part of the global voyage.  In addition to Singapore, CreditEase Wealth Management operates overseas offices and affiliate offices in Hong Kong, New York, and Tel Aviv and its domestic mainland China network covers over 40 cities. Its resources are also spread across the US west coast, Germany, UK, and Australia.

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: A

On June 3, 2017 Tsinghua PBCSF Global Finance Forum, which was hosted by Tsinghua University, and organized jointly by the Tsinghua University PBC School of Finance (PBCSF) and Tsinghua University National Institute of Financial Research (NIFR), convened in Beijing.

The highlights of the forum include:

Digital Financial Inclusion: LI Dongrong, President of National Internet Finance Association of China, pointed out in his speech that China and the world had the potential to drive the growth of inclusive economies by promoting digital financial services. While tremendous gains in financial inclusion have already been achieved, digital financial services, together with effective supervision, are essential to close the remaining gaps in financial inclusion.

InsurTech Innovation: JIANG Bo, Director-General of the International Department of China Insurance Regulatory Commission and Member of the strategic Council of PBCSF, said that Insurance technology (InsurTech) is a burgeoning phenomenon that has the potential to help the insurance industry reconnect with its customers following a period of increasing alienation and disengagement.

Three Chinese Fintech Companies Join Slate of Overseas Listing in 2017

  • Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, has resumed a plan to raise $1 billion or more in a Hong Kong initial public offering (IPO) in the second half of this year.
  • Rong360, an online platform for financial product search, comparison and recommendation, has announced to raise at least $400 million in an initial public offering in the U.S. as soon as 2017.
  • With its rapid expansion, Chinese online lending platform Neo Capital has revealed its IPO plan in the U.S. last year.

On June 5, Chinese company Xiaomi, perhaps best known for its smartphones, announced that its affiliate Xiaomi Loan would partner with CITIC Securities to list CNY600 million asset backed securities (ABS) under a shelf registration on Shanghai Stock Exchange.

The ABS product was split into three tranches: AAA, AA and the subprime:

Rating level

Volume

Interest rate

AAA

CNY426 million

5.7%

AA

CNY78 million

6.3%

The subprime

CNY96 million

8%

International

WeChat Pay is now available globally via Paymentwall (Payment Wall), Rated: AAA

Paymentwall has partnered with Tencent to bring WeChat Pay (Weixin Pay) to every online and retail store. The partnership allows every business owner around the world to get instant access to 600 million Chinese shoppers in China and abroad.

With over 600 million active users, WeChat Pay is now one of the most popular payment methods in the world. WeChat Pay processed over $1.5 trillion in Chinese digital payments, representing over 30% of all online transactions made in 2016.

Human-robo combo has greatest chance of success (International-Adviser.com), Rated: A

A combination of human and robo could be the answer for underserved Asian investors seeking low-cost technology-driven financial advice, a market that pure robo-advice providers have found hard to crack.

Inexpensive, automated robo-advisors could be a solution, but unlike in the large markets of US and Europe, in Asia they face difficulties stemming from regulatory fragmentation, lack of scale and investors’ preference for human contact.

The hybrid approach uses automated financial advice systems, but provides a layer of personal contact when dealing with the institution. Some call this approach “cyborg-advisor”, others “bionic advisor”.

Due to low profit margins of robo-advisory services and the necessity to achieve scale in order to be profitable, independent robo-advisors are not likely to succeed in the region under current regulations, according to Aldcroft.

Australia

NAB Ventures provides seed funding to Australian start-up Basiq (Banking Business Review), Rated: A

NAB Ventures, a venture capital arm of National Australia Bank, along with Reinventure have provided seed funding to Basiq, an Australian-based start-up that offers open banking API platform.

India

Lending startup Loanmeet raises seed funding (VC Circle), Rated: AAA

Online peer-to-peer lending platform LoanMeet, which is run by Strivers Solutions Pvt. Ltd, has raised an undisclosed amount of seed funding from a clutch of investors.

Chinese entrepreneur-turned-investors Cao Yibin and Huang Wei, along with KrazyBee.com co-founder and CEO Madhusudan E, participated in this round.

LoanMeet provides short-term working capital loans to retailers for inventory financing. The company claims to be growing at 50% month-on-month.

Flipkart to Add Online Loans to its Marketplace (Crowdfund Insider), Rated: A

Flipkart, one of the largest e-commerce platforms in India sales topping $2 billion each year, is getting into Fintech. Flipkart states that with the creation of a new focused team for financial services and products, Flipkart will be providing the public the option of obtaining loans from e-lending firms.

Flipkart is also expected to start offering other financial services such as access to funds.

Lendingkart gets Rs 50 crore loan from Yes Bank (Medianama), Rated: A

Lendingkart, an online platform for lending to small businesses and entrepreneurs, has raised debt funding worth Rs 50 crore from Yes Bank Ltd. The company said that this is the first step towards eventually shifting from non-banking financial companies (NBFCs), who provide loans at a higher rate, to banks.

In June last year, Lendingkart had raised Rs 205 crore ($32 million) in a series B round of funding led by Bertelsmann India Investments (BII) and Darrin Capital Management, with participation from existing investors Mayfield India, Saama Capital and India Quotient. Of this, $20 million was raised through equity sale and remaining $12 million  through debt financing.

How the rise of P2P lending presents several opportunities to banks (India Times), Rated: A

Peer to peer lending is hardly new. But it has risen to commercial prominence in the past few years, thanks to technology. The emergence of marketplace lending platforms connecting individual borrowers and lenders is disrupting the business of lending.

Peer to peer lending is hardly new. But it has risen to commercial prominence in the past few years, thanks to technology. The emergence of marketplace lending platforms connecting individual borrowers and lenders is disrupting the business of lending.

A 2015 survey shows that 25% of U.S. millennials have used a P2P lending platform. According to recent research, the cumulative amount of loans that originated via marketplace lending platforms in China was over $150 billion in 2015. In US and UK, it was close to $30 billion and $10 billion respectively.

While the Indian P2P market is much smaller, the scene is heating up. Last year alone, 20 lending firms cropped up to take the total to about 30. What does this imply for our banking industry?

Asia

How Thailand Could Become Southeast Asia’s Next Fintech Hub (Forbes), Rated: AAA

Omise, a payment management platform founded by Jun Hasegawa and Ezra Don Harinsut, is Thai fintech’s greatest success story to date. In 2016, it raised a $17.5 million Series B round and currently operates in Thailand, Japan, Indonesia and Singapore.

The Thai Fintech Association formed in 2016 as a networking club that would facilitate connections among fintech startups, big banks and investors, according to Disyadej. But the organization filed as an association with the Ministry of the Interior this year so it could take a more hands-on role in the industry’s development.

Although TechGrind operates in six countries in the region, it has relocated several of its startups to Bangkok so they can make use of TechGrind’s network and resources there. But TechGrind approaches opportunities in fintech — and in all startup sectors — from a cross-border perspective.

One such company is Pymlo, which creates accounting software for small businesses in Thailand and the broader region.

Hong Kong, Singapore rivalry hobbling Asia in $ 100 billion fintech race (Reuters), Rated: A

Governments across Asia – most notably Hong Kong and Singapore – have launched a raft of initiatives to grab a slice of the $100 billion invested in financial technology globally but the regulatory hotchpotch is making it tough for firms to scale up, the Asia Securities Industry and Financial Markets Association (ASIFMA) said in a report on Friday.

Investors poured $19 billion worldwide into fintech – including P2P lenders, distributed ledger technology and crowdfunding platforms – in 2016 alone and thousands of fintech start-ups continue to proliferate, according to a February report by global regulatory body the International Organization of Securities Commissions (IOSCO).

Hong Kong, Singapore, Australia, Japan, South Korea and Malaysia have launched a range of special programs to attract and foster fintech ventures, from incubators and grants, to temporary license waiver schemes, with competition fiercest between Hong Kong and Singapore.

Philippines

Consolidated credit database likely to improve lending in the Philippines in 2018 (ASEAN Today), Rated: A

The Philippines will launch a credit consumer database in 2018 in a bid to bolster retail lending.

Bulk of lending in the Philippines have been corporate loan, forming more than 80% of loan books. Consumer lending business have been secondary to corporate lending – analysts explained that the lack of consumer level data can explain this.

The gap between corporate and retail lending is the lack of a credible database.

The government’s Credit Information Corporate collects data from banks in the Philippines. This will be extended to rural financial institutions to build a credible database by 2018.

Authors:

George Popescu
Allen Taylor

Wednesday May 3 2017, Daily News Digest

funding circle

 News Comments Today’s main news: China Rapid Finance goes public at $350M valuation, down from C round valuation of $1bil. VPC Specialty Lending Investments annual results continues to disappoint Morty launches fully-automated mortgage marketplace. Barclay’s opens Europe’s largest fintech site in London. Airwallex wins $17M funding. India to see fintech regulations soon. Today’s main analysis: National survey shows instant […]

funding circle

 News Comments

United States

United Kingdom

China

International

European Union

Australia

India

News Summary

United States

Elevate Announces Expanded Elastic Funding Capacity (BusinessWire), Rated: AAA

Elevate Credit, Inc. (“Elevate”) announced today that Elastic SPV, which purchases loan participations in the Elastic line of credit product originated by Republic Bank & Trust Company (“Republic Bank”), increased its debt facility with Victory Park Capital from $150 million to $250 million. This is the first step in a two-step process to further increase and diversify the funding capacity for the Elastic line of credit product.

During the second quarter of 2017, an additional SPV will be created as another funding source for the Elastic line of credit product. This additional SPV for Elastic would provide additional funding, diversified funding sources and further lower the cost of funds.

SoFi’s first PR campaign answers the question, ‘How do I ask for a raise?’ (PRWeek), Rated: AAA

Starting May 15, SoFi staffers will participate in an online series that will offer users tips on communicating their value in the workplace and tell inspirational stories. The company will hold workshops in eight U.S. cities including New York, Chicago, Seattle, San Francisco, and Washington, DC, on negotiating pay raises, non-monetary benefits, and other topics. Career expert Nicole Lapin will appear at the New York event.

The average SoFi student loan customer is about 33 years old and has a student loan balance of about $75,000, more than twice the national average. A SoFi survey also found 50% of young, college-educated professionals had not negotiated their own salaries, and 54% said they don’t know their “market value.”

PayPal launches a small biz toolset, ‘Business in a Box,’ with WooCommerce & Xero (TechCrunch), Rated: AAA

PayPal today launched a new service, called Business in Box, aimed at bringing more U.S. small business owners to its payments platform. The service, which was developed in partnership with WooCommerce and Xero, offers merchants a suite of tools for running their online businesses, including an online storefront, accounting tools, the ability to apply for working capital from PayPal and, of course, support for taking payments either online or offline, via PayPal.

Business in a Box is largely aimed at first-time business owners who already know what they want to sell and have a roadmap in mind, as well as at established offline businesses that want to make the move online.

Often, these business owners would otherwise turn to an e-commerce platform, like Shopify, Magento, BigCommerce or WooCommerce, to establish their online presence and take advantage of other add-ons that can help them with other aspects of their business, like running promotions, marketing, order management, shipping, social media and more.

The company also noted today that PayPal Working Capital has now helped more than 115,000 businesses worldwide access more than $3 billion in loans and cash advances since the service launched in 2013.

National Survey Shows Instant Financing Will Drive Business to Online Retailers (PR Newswire), Rated: AAA

American consumers appear to be warming up to instant financing options when purchasing goods and services online. According to a new national survey, three quarters (75 percent) of consumers indicate they would be likely to select an online retailer that offered instant financing compared to another that did not; 28 percent would be very likely to change merchants in order to use instant financing.

Instant financing is an easy-to-use, revolving line of credit that consumers apply for within a merchant’s online checkout. It allows consumers to spread purchases over time with low APR financing offers, and provides an alternative to credit and debit cards when paying for an online purchase.

The online study was fielded between April 10 and 13, 2017 by Researchscape International on behalf of Klarna North America (www.klarna.com). The survey of 2,024 consumers, ages 18 and older, was designed to better understand the behaviors and attitudes of consumers towards instant financing. Consumers were quota-sampled using 32 different cells (gender by age by region) to closely match the overall national population.

In terms of how instant financing might impact their spending while shopping online, 39 percent of consumers indicated they would spend more money on a purchase if they had the option of instant financing compared to 42 percent who would not and 19 percent who did not know if they would spend more money.

Smartphone owners, 88 percent of consumers who responded, were asked about the ease and willingness to enter certain types of personal information when applying for instant financing. Among the information seen to be “too much trouble” to enter were Social Security number and bank account numbers (51 percent each), and credit card numbers (40 percent). On the other hand, just over a tenth of consumers found it to be too much trouble to enter an email address (11 percent), birthday (12 percent) or spouse’s name (12 percent).

Other key findings of the survey include:

  • Nearly half of respondents (47 percent) would like to be presented with an instant financing option while shopping online
  • Just over a quarter of consumers surveyed (28 percent) have used instant financing while 68 percent have not and 4 percent were not sure if they had

Beyond probing consumers’ thoughts regarding availability, the survey also asked about the convenience and ease-of-use factors of instant financing. For instance, a majority of consumers (52 percent) expect to wait three or more minutes to be approved for instant financing. Twenty-eight percent would expect to wait two minutes and just 20 percent would expect to wait under a minute. Klarna’s approval process typically provides an approval in under a minute with only simple, top-of-mind information required.

This infographic illustrates the impact of instant financing on consumers’ purchasing decisions as revealed in a survey conducted by Klarna in April 2017. (PRNewsfoto/Klarna)

Morty launches fully-automated mortgage marketplace (PRNewswire), Rated: A

Focused on empowering homeowners to make smarter decisions about their mortgages, today Morty (www.himorty.com) launches its fully-automated mortgage marketplace, where homebuyers can shop, compare — and close — any loan option from among its network of lenders. Morty is initially rolling out with 10 major lenders across 10 markets in the United States, with plans to expand nationally by the end of 2017.

Leveraging the founding team’s diverse experience and learning first-hand from homebuyers during its initial pilot, Morty was able to identify pain points from start to finish and prove the benefits of a marketplace model. In the over one thousand real-life loan scenarios it has run for homebuyers, Morty has observed rate and fee variances across lenders that can add up to tens of thousands of dollars in fees and monthly payments.

Morty is creating an entirely new model: access to any lender or mortgage product within a single, unified mortgage process from first click to closing day.

Here’s how it works:

  • Homebuyers create a simple financial profile by linking their income, assets, employment, and property information and describing their homeownership goals.
  • Morty’s pricing engine algorithmically matches the homebuyer’s profile with each lender’s eligibility and pricing guidelines to show accurate, customized quotes, inclusive of all lender fees and closing costs.
  • Borrowers see their loan options in full transparency and compare across lenders and products.
  • Never once leaving the Morty platform, the homebuyer chooses a loan and Morty automates the process all the way to the closing table.

In addition to its launch, Morty also announces that it has raised $3 million in funding led by Thrive Capital with participation from SV Angel, FJ Labs, Corigin Ventures, MetaProp, Techstars and several angel investors.

RealtyeVest Is the One-Stop Platform for Real Estate Investing and Project Financing (PR Newswire), Rated: A

RealtyeVest, Formerly IHT Realty Group, officially unveiled their new brand and optimized website. Destined to become one of the largest real estate crowdfunding platforms in the US, the new RealtyeVest website () provides a simple, secure and transparent platform for accredited investors, real estate developers and owner-operators.

“Our decision to rebrand from IHT Realty Group to RealtyeVest was a result of listening to feedback from our strategic partners and observing best practices in the industry,” said Daniel Summers, CEO. “We believe our new name better represents the essence of our business, and we are excited about the innovative technology that powers our new online marketplace. We spared no expense in the new build, providing a win-win to our investors and Sponsors.”

RealtyeVest is an online marketplace that connects investors and Sponsors (real estate owner-operators) to crowdfund exclusive real estate investments. Their platform allows its members to browse, research and make informed investment decisions on these exclusive properties.

Lending IPOs Find Cautious Investors Amid Consumer Credit Fears (Bloomberg), Rated: A

China Rapid Finance Ltd. on Friday became just the second consumer lender this year to list in the U.S., following Elevate Credit Inc. earlier in April. Although they do business on opposite sides of the world, the duo has much in common: Both face investor questions about the reliability of their borrowers, both begin trading amid a particularly iffy time in the credit cycle and — perhaps consequently — both slashed their IPO price days before going public.

When LendingClub Corp. went public in 2014, some hailed the event as the dawn of a new era for finance. Shares have since fallen 60 percent from the IPO price.

“China Rapid Finance is coming to the market during a turbulent time in the China peer-to-peer industry as regulators roll out more controls to clean up what has so far been chaotic growth in the past few years,” MCM Partners analyst Ryan Roberts wrote in a note on the stock’s first initiation, a buy rating. “The company reduced the pricing range by about 40 percent, which we suspect reflected tepid demand from backers,” the note said.

Both recent IPOs are now trading up from their reduced offering prices by nearly 25 percent. MCM says the IPO valued China Rapid Finance at 4.7 times its book ratio. William Blair on Monday said that Elevate Credit is trading at 7.5 times its 2018 estimated earnings per share.

This Startup Wants to Be the Amazon of Real Estate (Inc), Rated: A

Even so, the 29-year-old Williams is a force, as is his company. Since launching, Cadre has generated nearly $1 billion worth of deals, raising close to $70 million in funding from high-profile investors such as Peter Thiel, Goldman Sachs, and Jack Ma.

So Williams set up a website where he could analyze these homes using a tax parcel ID–which tracks the value of a property over time–and measured this against what they were selling for. Using the data, and bolstered by the cash of wealthy Harvard alums including the Kushners, he started buying dozens of properties and flipping them for three times their original price. “By the time I graduated, I was at a crossroads: Do I scale this business nationally, or do I do tech banking at Goldman Sachs?” he recalls thinking.

Williams decided to do both. He pulled 18-hour days as an investment banker–and then would quietly work on his startup from the comfort of a supply-closet-size room by night. Real estate, he figured, was a valuable asset that ought to be made available to more (and more average) investors.

Cadre is an e-commerce site for investing in real estate. It connects customers–primarily wealthy individuals, referred to as “qualified purchasers”–to property deals across the U.S. (Cadre requires a minimum investment of a few hundred thousand dollars; that’s somewhat less than what a traditional fund requires, but likely more than what you’d pay to buy into a real estate investment trust, or REIT, which trades like common stock.) Williams declined to comment on what exactly the company charges its investors–it asks for an upfront fee and a recurring subscription rate–though notes that it’s in the range of a “couple hundred basis points.” A fund, by contrast, will typically take 2 percent of the investment, and then 20 percent of profits over time.

Although Cadre faces competition mainly from the traditional brokers, a growing number of startups have emerged in the real estate leasing space, such as 42Floors, a San Francisco website that lists commercial real estate and office rentals, and Rofo, an online marketplace for property listings and potential tenants that can facilitate lease deals without broker intervention.

NCAP Notice to Clients regarding Public Record Standards (Experian Email), Rated: A

In 2015, Equifax, Experian, and TransUnion announced the National Consumer Assistance Plan (NCAP), a set of initiatives designed to improve the accuracy of credit report information, as well as to provide consumers with a better experience interacting with the nationwide Credit Reporting Agencies (CRAs).

In June 2016, the CRAs announced enhanced public record data standards for the collection and timely updating of public record data reported on consumer credit reports.  The enhanced standards require: (i) minimum consumer identifying information (name, address, social security number and/or date of birth) (“PII”) and (ii) minimum collection frequency for public records (at least every 90 days).  These enhanced standards will apply to new and existing public record data on the CRAs’ respective consumer credit reporting databases. As previously announced, these enhanced standards are effective July 1, 2017.

Based on information provided by our public record vendor about the data available from courts and recorders’ offices, we expect bankruptcy public record data will continue to meet the enhanced collection and reporting standards. However, civil judgments and approximately half of tax lien data are not expected to meet the enhanced standards.

During the week of July 10, 2017, the CRAs will remove from their databases previously collected public record data that does not meet the enhanced PII standards. This includes the removal of all judgment public records and the portion of tax liens not meeting the enhanced standard. Public record data will also be monitored for adherence to the enhanced PII and collection frequency standards after July 1, 2017.

Despite the anticipated loss of significant volume of public record data from credit files, impact analysis conducted by the CRAs, as well as leading scoring model companies using CRA data, show a modest risk scoring impact and minimal loss in predictive performance as a result of these changes.

Please contact any member of your Account teams with questions you may have or forward questions to:

Robo Advice: Better Than No Advice? (Forbes), Rated: A

The proliferation of Robo-Advisors bringing low priced financial services out into the market has received significant buzz over the past few years.

When it comes to managing your money, minimal human intervention can be good or bad. The good comes when the algorithms and mathematical rules produce an asset allocation that is sensible for the purpose for which it is intended. The good also comes when the “human advisor” interjects personal preferences and judgments that are in the clients’ best interest.

Now, let’s analyze the downside, which can be a very deep and chasm. How we consider money, how we use money, how we value money, and what we believe about money is very human, indeed, and cannot be solved by mathematical equations.

For those who are looking for an asset allocation and a low-cost entry into investing, Robo advice can be a great place to start.

Helping Clients Determine Risks in Alternative Investments (Wealth Management), Rated: A

Alternative investments constitute a growing $7 trillion industry and more than 10,000 hedge funds have money in alternative platforms. Yet, most retail investors are just learning about these lucrative asset classes.

To illustrate the difference for clients who may not be familiar with alternative investments, ask them to imagine this scenario. A successful real estate flipper has bought and sold 25 properties in five years. After finding a great deal on a house in foreclosure, he applies for a bank loan to purchase it. The bank declines, spooked by four open mortgages he holds on current projects.

He’s never defaulted, but the bank still judges him as overleveraged because his loan-to-value ratio is 50 percent. It doesn’t fit into the bank’s rigid evaluation box, which has become even more stringent after the 2008 financial crisis. The perceived risk is much higher than the actual risk.

Then, he approaches an alternative lender who sees he’s willing to put his own money into a property in a desirable neighborhood and to offer a personal guarantee. The decision comes down to actual risk. Can this property fall in value by 50 percent in nine months? Will the borrower flip it in nine months for a handsome profit? By understanding the data and the flipper’s borrowing track record, the lender concludes that he will flip the house and fronts the capital.

FLEETCOR to Acquire “Cambridge Global Payments,” a B2B International Payments Provider (BusinessWire), Rated: A

FLEETCOR Technologies, Inc. (NYSE: FLT), a global provider of fuel cards and workforce payment products to businesses, announced today that it has signed a definitive agreement to acquire Cambridge Global Payments (“Cambridge”), a B2B international payments provider.

Lantern Credit Appoints Ricardo Gomez-Acebo to Board of Managers (BusinessWire), Rated: B

Lantern Credit, a financial technology company working to solve systematic inefficiencies in the consumer credit industry, adds Ricardo Gomez-Acebo to its Board of Managers. He joins Chairman John Mack, Vice Chairman John Sculley, James Held, Seth Johnson, Kevin Knight and Chad Swensen on the Lantern Board.

Gomez-Acebo has more than 30 years of experience in the Spanish and International Retail Banking sector, holding various executive roles at Spanish banks Banesto and Banco Santander including General Manager of Europe for Banesto. Gomez-Acebo led business development with strategic financial partners at Banco Santander and most recently is heading risk management for the bank.

Incumbent financial services’ millennial strategy (The New Yorker via CB Insights Email), Rated: B

Attorney Jonathan Frutkin Featured Speaker at Washington D.C Crowdfunding Conference (Benzinga), Rated: B

Radix Law’s principal attorney, Jonathan Frutkin, will be a featured speaker at the “Fourth Annual Conference and Workshop for Crowdfunding USA” scheduled for May 4 to 5 at the National Press Club in Washington D.C. Frutkin is the author of the book Equity Crowdfunding: Transforming Customers into Loyal Owners.

United Kingdom

RateSetter upgraded transparency to “top-tier” level, says 4th Way (P2P Finance News), Rated: AAA

RATESETTER’S upgraded data disclosure on its loan book and expected losses has brought its transparency to a top-tier level, according to peer-to-peer lending research firm 4th Way.

Based on the amended methodology, expected cumulative losses now stand at £18.06m, which paired with the current £22.44m provision fund buffer result in a 124 per cent coverage ratio – six per cent higher than last reported.

RateSetter’s data table now provides a clear estimate of the losses expected over the lifetime of its loan book, spelling out the losses that have already materialised and future expected losses for each year of origination, as well as a detailed breakdown of different types of arrears, provision fund adequacy levels, and investors’ expected returns.

Sharing the voice of British small businesses (Funding Circle), Rated: AAA

What we discovered is that small businesses are going for growth, unfazed by the uncertainty caused by last year’s referendum result and the snap election. Nearly 70% of UK small businesses expect their turnover to increase within the next 12 months – half of whom expect a steady increase of between 6 and 20%, and only 6% expect turnover to decrease.

Small businesses, who already account for 60% of private sector employment, will continue to drive much needed job creation this year. More than half of the businesses we spoke to are planning to hire at least one new full-time member of staff over the next year. With more than 5 million small businesses across the country – this could mean the creation of millions of new jobs in the next 12 months!

When asked what their one policy priority is in the run up to the election, tax was by far the most important issue. With business rates mentioned specifically nearly 300 times, 40% said that they want the new Government to focus on this area after the election. The second most important policy area, according to a quarter of businesses, was of course Brexit.

To date investors have lent £2.2 billion to more than 23,000 UK small businesses.

 

UK SMEs set to back Tory leadership (P2P Finance News), Rated: A

A vast majority of the 2,300 firms interviewed by the country’s third largest small- and medium-sized enterprises (SME) lender are poised to throw their weight behind Theresa May’s party as the best positioned to deliver Brexit, despite half of them opposing the separation from the 28-nation bloc in the referendum last year.

The research also confirmed that UK SMEs have quickly shrugged off Brexit-induced economic worries, as seven in 10 firms expect to deliver stronger profits in the next 12 months and only six per cent forecast a drop in turnover over the same period.

Flender is granted its P2P credit license (AltFi), Rated: A

Peer-to-peer friends and family lender, Flender announced it has now received its full authorisation from the FCA and has also launched operations in Ireland.

The platform says it has funded loans of over €900,000 since its soft-launch, without any marketing or advertising. It has seen demand from companies in a wide range of industry sectors including construction, F&B, energy companies, retailers and more. It reports that it has attracted over 750 registered users, 138 campaigns submitted with 11 currently live on the platform.

RateSetter Partners with George Banco, Acquires Two Motor Finance Businesses (Crowdfund Insider), Rated: A

RateSetter previously provided financing to George Banco. RateSetter will now lend directly to George Banco’s growing customer base with George Banco generating the leads.der George Banco. RateSetter has also acquired an equity stake in the George Banco company.

Additionally, RateSetter has acquired specialist motor finance providers Vehicle Stocking Limited and Vehicle Credit Limited out of their parent company’s administration. RateSetter will rebrand both businesses and invest in them to build on its current motor finance capabilities. RateSetter previously provided wholesale finance to these businesses.

UK P2P Lender Growth Street Celebrates Marketplace Rate Drop, Signals Increased Momentum (Crowdfund Insider), Rated: A

Growth Street’s marketplace rate dropped on Monday from 6.5% AER to 6.4% AER, rewarding borrowers with a 10bps drop in their costs of funds. The UK P2P lender attributes the drop to the momentum it has built on its platform, welcoming over 700 investors to date since the launch of its investment offering in November.

FUNDING CIRCLE REVIEW (Orca Money), Rated: A

Loans are split into a minimum of £20 chunks or loan parts allowing investors to achieve a high level of diversification when investing relatively low amounts. Funding Circle suggests lending to a minimum of 100 businesses to achieve a 1% exposure to any one business. When investing a minimum of £2,000, Funding Circle’s auto-bid function will achieve this level of diversification automatically.

Borrowers across Funding Circle are all small to medium sized businesses (SMEs), borrowing between £5,000- £1million for loan terms of 6 months to 5 years.

Funding Circle is the only peer-to-peer lending platform of scale which operates across multiple geographies. The P2P platform has expanded from the UK to the USA, Germany and Spain. 74% of Funding Circle’s group (Funding Circle Holding Limited) revenue in the period ending the 31st December 2015 came from its UK business (Funding Circle UK Limited).

VPC Specialty Lending Investments Annual Results Continues to Disappoint (Crowdfund Insider), Rated: A

VPC Specialty Lending Investments PLC (LSE:VSL.L) released 2016 annual results last week and according to Chairman Andrew Adcock, results continue to disappoint. Shares in the fund that invests in various online lending assets continue to trade at a significant discount to the net asset value per share. As of December 31, 2016, VPC had deployed 87% of its NAV (with its cash holding of 13% temporarily elevated due to the recent sale of the Funding Circle U.K. portfolio). During 2016, VPC generated an NAV return of 0.85% for the Ordinary Shares and distributed dividends of 6.00 pence per Ordinary Share relating to the income earned during the year.

Going round in circles (Bridging&Commercial), Rated: B

The recent news that peer-to-peer lending platform Funding Circle plans to stop all property development lending by mid-2018 came as something of a surprise.

Risk is always a factor in construction, but it is how that risk is managed that is important. Funding Circle’s withdrawal could allow other lenders to enter this space, and increased competition will be no bad thing in giving developers greater choice.

While we appreciate that there are always certain areas of the market that give cause for concern, many of our clients have a clear appetite for further growth. While demand is strong, and developers continue to be starved of funds by traditional lenders, the market for alternative finance – and peer-to-peer lending particularly – will come to the fore.

China

Former Unicorn China Rapid Finance Goes Public at a $ 350M Valuation (Lend Academy), Rated: AAA

The IPO price was set at $6.00 and the company raised $60 million which was adjusted down from their anticipated raise of $105 million. Back in 2015, it was reported that the company had a pre-money valuation of $1 billion after closing a $35 million Series C. The company is now valued at $350 million.

At time of writing shares were trading around $7.10 per share.

The fact that China Rapid Finance and Yirendai before them chose to go public in the US is significant. In a recent Lend Academy podcast with Yirendai CEO Yihan Fang, she stated that they felt the US was more educated on marketplace lending. This coupled with the fact that Ning Tang (Founder of parent company CreditEase) and other management members had experience in the US and were more comfortable with the US capital markets led to their decision to list in the US.

Another company that could seek a US IPO is Ppdai.com who last year said it could go public in the first half of 2017.

P2P Industry News (Xing Ping She Email), Rated: A

Financial Company of XIAOMI Raised A Round of 100 Million RMB

Today, FuMi Tech, MI’s related eco-chain company, announced it has finished A round of financing and raised 100 million RMB. This round of financing led by Buddhism Capital, with MoBai Capital and the previous investor ShunWei Capital participated. The fund will be continuously used to improve users’ experience.

WeBull, one of the products of FuMi Tech, providing trading services of US and HK stocks, and supporting real-time quotes of global stock, foreign exchange, funds and derivatives markets of over 20 countries. In fact, FuMi Tech has previously raised a joint investment of 50 million RMB from MI and ShunWei Capital.

China’s State-owned Commercial Bank Breaking the Ice between P2P platforms

Recently, China Construction Bank(Guangdong Branch) has launched its P2P funding depository product “Dragon depository”, and currently the bank has reached agreements with several P2P lending platforms.

According to an insider of CCB, the two critical measurements for their P2P cooperators are: bad debts and overall strength of the platform.The participation of CCB will promote the compliance process and bring a sustainable development of P2P lending industry.

NDRC(National Development and Reform Commission): Promote the Construction of Asia Credit System

The first Asia Credit Rating Agencies CEO Fair & Systemic Risk International Seminar was held in Beijing recently. Hongwan Chen, the deputy director of the financial department of National Development and Reform Commission, said that the regional cooperation across Asia is important for it could accelerate the Construction of Credit System in the area. He also advise to build credit record for local companies incorporated overseas and foreign investors, and set up a “blacklist” about those seriously illegal enterprises.

China Rapid Finance a consumer lending force in China (Bankless Times), Rated: A

Dr. Wang completed his Ph.D in statistics at the University of Chicago in 1995 before moving on to Sears Credit where as head of analytics he developed models employing credit bureau data while also overseeing the creation of a credit data warehouse. He returned to China, where in 2001 he founded  China Rapid Finance which began by developing credit scoring and decisioning models that helped companies issue more than 100 million credit cards.

In 2010 they made the move into marketplace lending, where they teamed up with more than 100 Chinese internet companies to analyze and score data that allowed them to preselect customers.

Seven years later China Rapid Finance has become China’s leading online consumer credit marketplace after facilitating 15 million loans to two million borrowers, beginning with small amounts for short durations and growing into longer-term loans for larger amounts.

EMMAs total 500 million and have been underserved by traditional credit providers, who focus on the 300 million super prime people who work for government or large institutions, Dr. Wang explained. He estimates China’s consumer credit coverage at roughly one-fourth that of the United States. While roughly 60 per cent of Americans have credit coverage, that rate is 16 per cent in China.

EMMAs are prime and near-prime consumers who are educated and have stable employment in the services and with startups and SMEs, but they have little credit history and cannot obtain bank credit.  They also largely stayed away from the notorious shadow banks, a large (no one knows precisely how large) opaque industry which helped fuel both real estate and small consumer loans.

International

International P2P Lending Volumes April 2017 (P2P-Banking), Rated: AAA

Funding Circle leads ahead of Zopa and Lendinvest. The total volume for the reported marketplaces adds up to 445 million Euro.

Milestones reached this month are:

  • Younited Credit crossed 500 million Euro loan volume since launch

European Union

Barclays Opens Europe’s Largest FinTech Site in London (Yahoo! Finance), Rated: AAA

Barclays has today opened its flagship open innovation site, Rise London, in Shoreditch. It is Europe’s largest co-working space dedicated to financial technologies (FinTech).

Rise, created by Barclays, brings together from across the world a carefully curated community of FinTech startups, along with our corporate clients and other experts, to work on Barclays’ customer and business opportunities and together help to create the future of financial services.

Rise London will house more than 40 FinTech companies, along with Banking and Technology teams from Barclays, and will serve as a gathering place for leaders in the FinTech and venture capital communities. Rise London will play host to more than 200 hours of learning, workshops, hackathons and networking on a monthly basis.

Australia

Melbourne fintech Airwallex just won $ 17 million funding from Mastercard, Sequoia and Tencent (Business Insider), Rated: AAA

Australian cross-border payment startup Airwallex has secured US$13 million ($17.4 million) in a funding round to continue its expansion overseas.

For Sequoia — the 45-year-old firm famous for investing in famous tech brands such as Apple, Google and AirBnB – the deal represents its Chinese arm’s first investment in an Australian startup.

Airwallex founder and chief executive Jack Zhang told Business Insider that the company, which already can make payments to 100 countries, will use the cash injection to expand its physical presence in locations such as London, Shanghai, Hong Kong, Indonesia, Malaysia and Taiwan.

FinTech Australia Reflects on First Year (Crowdfund Insider), Rated: A

FinTech Australia, the advocacy group promoting all things fintech related in Australia, celebrated its one year anniversary by sharing its “Year of Review.”

India

India to see regulations for fintech space soon: KPMG report  (Outlook), Rated: AAA

The government is expected to come out with regulations for fintech (financial technology) space as the industry is likely to witness increased payments and lending activities, a study said today.

Over the next quarter, insurtech may come into its own in India, according to the report.

Citing Paytm attracting Asia’s largest funding round of USD 200 million in March quarter, it said AI and blockchain may be big bets for investors apart from payments, open data and data analytics.

Over the quarter, investment into Asia’s fintech space hit USD 492 million across 33 deals, as per the report.

SoftBank Said in Talks to Invest $ 1.4 Billion in India’s Paytm (Bloomberg), Rated: AAA

SoftBank Group Corp. is in talks to invest about $1.4 billion in India’s One97 Communications Ltd. in a deal that would value the owner of the country’s largest digital-payments provider at about $7 billion, according to people familiar with the matter.

The deal is not yet finalized and the terms may yet change, said the people, asking not to be identified because the matter is private. One97 Communications, whose Paytm unit has seen business surge as India took most of its paper bills from circulation, has also had discussions with two other investors, one of the people said. The company was last valued at $4.2 billion, according to research firm CB Insights.

3 Alternative Lending Trends That Have Made Fintech Startups Popular (Inc42), Rated: A

Traditional banks have left quite a few gaping holes when it comes to unsecured loans, especially for salaried people who are not employed in companies that they classify as A/A+ category.

Quick Personal Loans

Customers, it appears, are warming up to online alternative lending portals, and it is predominantly due to the speed with which the loan application is processed, verified and approved. Tedious documentation, in addition to ambiguous rules and non-transparency in the whole process that a customer faces with banks, has made entrepreneurs reinvent lending for salaried employees. The ease and convenience of digital (and painless) transactions are considered priceless. There are lenders such as Qbera, which disburses personal loans up to INR 5 Lakhs in 24 hours.

Alternative Fixed Income Products Become More Popular

2016 saw RBI releasing a set of directives regarding P2P loans in India. The paper recommends NBFCs status for P2P lenders, which is almost consistent with what the P2P sector has been demanding. This liberal approach helps to protect the interest of all stakeholders without choking innovative ideas. P2P lenders are hoping for these recommendations to become regulations after the budget announcement, which will give the arena a facelift.

Short-Term Payday Loans

You don’t get instant cash from banks and online payday loan providers often save the day. As they are offered for shorter tenures compared to online personal loans, it gets repaid more quickly, which is a definite plus. You can even opt for monthly, fortnightly, weekly or daily loans.

Authors:

George Popescu
Allen Taylor

Monday January 30 2017, Daily News Digest

price & yield table for SCLP 2017-1

News Comments Today’s main news: ABA Banks seeks MPL partnership. Zopa passes 2bil GBP milestone. Today’s main analysis: SoFi Unsecured Consumer 2017-1. Today’s thought-provoking articles: Orchard Online Lending Snapshot. Five mistakes to avoid when starting a FinTech company. Spanish banks lead FinTech VC in Europe. Tyro, RateSetter, Stockspot and Westpac on past and future. United States ABA seeks MPL partnership. […]

price & yield table for SCLP 2017-1

News Comments

United States

United Kingdom

European Union

Australia

India

Asia

News Summary

United States

U.S. bank trade group seeks marketplace lending partnership (Reuters), Rated: AAA

The American Bankers Association, a trade group for U.S. banks, has been hunting for a marketplace lending platform to help its members ramp up their digital offerings.

The ABA has run a formal bidding process to secure a marketplace lending partner, spokesman John Hall confirmed on Friday. He could not say which companies were under consideration because the information was confidential.

Weekly Industry Update: January 29, 2017 (PeerIQ), Rated: AAA

The ABS market finished January on a high note with strong buyer interest. SoFi and Mosaic priced their first and inaugural transactions respectively in 2017, which were both heavily oversubscribed.
FinTech financings continue apace. Nyca announced the successful closing of a

Orchard Weekly Online Lending Snapshot (Orchard Platform), Rated: AAA

It was reported this week that LendingRobot launched a robo-advisor hedge fund for accredited investors that will invest in loans from LendingClub, Prosper, Funding Circle, and Lending Home. loanDepot announced that they have funded $100 billion in home, personal, and home equity loans since their inception in 2010. In yet another sign that positive sentiment seems to be returning to the industry, BorrowersFirst, an online consumer lending platform, announced last week that it has secured an additional $100 million in debt financing to accelerate loan originations and fund continued growth of its balance sheet. The Office of the Comptroller of the Currency issued OCC Bulletin 2017-7 as a supplement to OCC Bulletin 2013-29, which “governs the risk management frameworks maintained by OCC- regulated banks in establishing, monitoring and concluding third party relationships (including relationships with bank affiliates).” On Monday, we announced that LendIt has partnered with us for our 2017 Meetups–as a way to enrich the events–strengthening the depth and breadth of ourrelationships in the industry.

DiversyFund Takes Crowdfunding Real Estate Investment Giants Head On (Military Technologies), Rated: A

DiversyFund, Inc., announces the launching of its new full-service online crowdfunding real estate investment platform. DiversyFund principals, Craig Cecilio and Alan Lewis, have been delivering exclusive investment opportunities that generate high returns for their investors for over a decade. The company has planned to offer some unique features to its investors in the upcoming months. These are aimed to disrupt the current status quo of the industry.

With their new online crowdsourcing platform, DiversyFund is planning to become the key sponsor and lead developer to the majority of their projects, if not all of them. This is a key difference in their crowdfunding real estate investment platform. It makes them stand out since many of their competitors work with third-party sponsored projects and act only as mediators by providing technology to implement funding for outsourced deals.

AirBnb’s Fintech Future (The Financial Revolutionist), Rated: A

This week, word “leaked” that Airbnb is in advanced talks to acquire Tilt, a group payments/social network hybrid start-up that helps people split the cost of rent, dinners and events. Whether or not this deal happens (it probably will), the rumors support our view that of all the next-wave tech giants known as WASSUPPs (WeWork, AirBnb, Slack, Snap, Uber, Pinterest and Palantir), AirBnb is the most aggressive in embracing fintech as core to its business.

Crowdfunding takes aim at commercial real estate (Westfair Online), Rated: A

Despite a lack of data on the exact size of the real estate crowdfunding market in the U.S. – no federal agency or national trade association tracks those deals – the investment vehicle apparently is attracting a particular class of investor.

“This investor is typically younger,” said Ben Sayles, director in the Boston office of real estate brokerage HFF. “From what I am seeing, this person is high-earning, usually in the tech world – though maybe in the financial world – and doesn’t have a lot of expenses. They probably rent their apartment, do not have a car and have an extra income that they want to put to work.”

Among real estate professionals, the use of crowdfunding to raise capital also appears to be concentrated within a particular demographic.

“For a smaller commercial real estate developer or investor, the non-Donald Trump type, this can be a cheaper source of financing for a $10 million to $30 million project,” said professor Anthony Macari, executive director of graduate programs at Sacred Heart University in Fairfield.

Three Crowdfunding Sectors to Watch in in the US in 2017 (Crowdfunding), Rated: A

With investors becoming increasingly more comfortable with new Fintech platforms, the amount of money invested in crowdfunding in the Americas jumped from $11.4 billion in 2014 to $36.49 billion in 2015 — and Technavio market research analysts predict the overall industry will grow at a compounded average annual rate of 27% through 2020.

Since the first provisions of the JOBS Act went into effect, real estate has remained one of the most popular crowdfunding investment classes. The physical nature of buildings and land lends real estate more security than higher risk startups. And with a self-proclaimed real estate mogul now in the White House, many leading experts are predicting a record year for real estate. We are also seeing increasing issuer adoption — more real estate firms are launching their own crowdfunding platforms, and a variety of Regulation A+ real estate funds and traditional investment firms are increasingly using platforms to raise a portion of their capital stack.

In addition to standard real estate crowdfunding platforms, we think we will see an influx of hybrid platforms that allow users to not only invest but to solve other problems as well.

Last year’s announcement from OPEC to cut production in combination with President-elect Trump’s oil friendly appointments has oil and gas prices on the rise. Oil prices have already climbed 17.5 percent as of December 27 and show no signs of slowing. And investors are taking notice. EnergyFunders, a crowdfunding marketplace that allows investors to directly invest in U.S. oil and gas wells, reported a 45 percent increase in signups after OPEC’s announcement.

Impact investing, or investing in companies that bring about positive change in the world, is growing in popularity as more millennials enter the market. A recent survey from U.S. Trust states 93% of millennials believe that social impact is key to their investing decisions. Ryan Ràfols, CEO of Newchip.co an aggregation platform that uses Robo-advising to showcase impact investing crowdfunding offering, explains;

“Millennials want to invest in companies that can make a return while making a difference in the world.”

Elon Law dean addresses poor SoFi ranking (Biz Journals), Rated: A

Social Finance Inc. (commonly known as SoFi) ranks Elon among the bottom 10 law schools in the nation in its Return on Education Law School Rankings. It ranked Elon eighth out of the 10 worse schools. Elon’s graduates, SoFi said, average $87,680 in salary and $145,610 in debt.

Luke Bierman, dean of Elon Law, which is based in Greensboro, said he doesn’t argue that a law school degree requires a sizeable investment from a student in terms of both time and money. But he said Elon adopted a new curriculum two years ago intended to make it quicker and less expensive for a student to earn a law degree. He said the school’s current tuition is 20 percent below the national average for private law schools and said the new curriculum allows a student to graduate in 2.5 years as opposed to the three years required through a traditional curriculum.

He said the study released by SoFi doesn’t reflect students who have enrolled at Elon since the adoption of the new curriculum. The first group enrolled solely under the new curriculum, he said, will be graduating in December. He said it’s Elon’s hope that those students will be graduating with less debt.

Bitcoin P2P Lending Remains A Risky Business (Live Bitcoin News), Rated: A

On paper, the service provided by companies such as BTCJam is an excellent way to use Bitcoin. Extending loans to people from all over the world is a great solution to promote Bitcoin usage. Unfortunately, this concept still needs a lot of work, as there are a lot of caveats to using services such as BTCJam right now. In most cases, a lot of the loans are never repaid in full.

It is evident a lot of BTCJam users are losing money unless they are the borrowers for a specific amount of Bitcoin. In fact, some Reddit users argue the only people who benefit from using BTCJam are the ones who borrow money, and everyone else is losing money left, right, and center. BTCJam has been dealing with these issues for quite some time, yet it seems very little has changed over the past year or so.

Global Debt Registry Successfully Completes SOC 1 and 2 Attestation (Global Debt Registry Email), Rated: A

Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced receipt of its Service Organization Control [SOC] 1 and SOC 2 Type 1 attestation engagement report, providing independent validation that the Company’s internal security controls are in accordance with the American Institute of Certified Public Accountants’ (“AICPA”) applicable Trust Services Principles and Criteria. Just days after International Data Privacy Day on January 28, this attestation showcases GDR’s continued dedication to meeting the highest industry standards for protecting confidential consumer information.

GDR’s SOC 1 and 2 Report demonstrates that the Company has the necessary internal controls and processes in place to protect consumer data, maintain operational integrity, and comply with industry standards and regulations.  The SOC 2 engagement included evaluating GDR in accordance with the trust principles of security, availability, processing integrity, and confidentiality. The AICPA created the SOC guidelines to provide an authoritative benchmark for service organizations to demonstrate implementation of proper policies, operational practices and controls.

As a partner to online lenders, investors, warehouse lenders and other industry stakeholders, GDR delivers real validation and helps ensure asset certainty including protection against double pledging and double selling of assets with its suite of digital due diligence solutions. The Company contracted with KirkpatrickPrice for its SOC 1 and 2 engagement to meet the ongoing public and private reporting requirements of its financial institution clients.

GDR is also compliant with a number of additional industry standards, including PCI DSS (Payment Card Industry Data Security Standard), the GLBA (Gramm Leach Bliley Act) Safeguards Rule, and ISO 27002 (International Organization for Standardization 27002). As evidenced by the SOC 1 and 2 Report, the Company is continuing its focus on meeting the highest standards of data and information protection and operational integrity for its clients.

The 4 Best P2P Lending Platforms For Investors In 2017 — Detailed Analysis (Forbes), Rated: A

With interest rates at all-time lows since 2008 and many historically “safe” investments like government bonds carrying negative yields, investing in P2P loans in 2017 is a no-brainer.

Founded in 2007, Lending Club is the world’s largest P2P lending platform with over $20 billion in loan issuance. Lending Club has grown exponentially and currently has a 45% market share. It raised over $900 million from its IPO in 2014, but its share price has since fallen 72%.

Launched in 2006, Prosper was the first P2P platform in the US. It has since funded over $6 billion in loans and serviced over 2 million customers. Prosper grades borrowers through its Prosper Score. This proprietary system focuses on criteria such as debt-to-income ratio and other “soft checks” conducted by credit bureaus.

Launched in 2014 by a bunch of ex-Googlers, Upstart has originated more than $300 million worth of loans. Upstart uses unique grading criteria. It looks at FICO scores but also considers educational background. The firm has the lowest default rates across the industry thus far. Over 94% of loans are on track to be repaid in full. The company makes its money solely on origination fees from the borrower.

Funding Circle was founded by Sam Hodges who, after the 96th time of being rejected by banks, decided to take action. The company only makes business loans and operates in the US, UK, Germany, Spain, and the Netherlands. Funding Circle was founded by Sam Hodges who, after the 96th time of being rejected by banks, decided to take action. The company only makes business loans and operates in the US, UK, Germany, Spain, and the Netherlands.

Why More Consumers Are Seeking Alternative Investments (Newswire.net), Rated: A

However, modern consumers are starting to look at alternative investments, which stray from “conventional” standards either because they’re riskier, newer, less tested, or involve unknown variables. What you need to know about alternative investing is this: it’s on the rise, and there may be a benefit in jumping in early.

Types of Alternative Investments

  • Private lending. Private lending has grown in popularity in recent years, thanks to peer-to-peer apps that make it possible, such as Lending Club. Here, you may lend some of your own money to one or more private borrowers, who pay you back with interest.
  • Currencies. Currencies are constantly shifting in value against each other as various countries grow or shrink economically. Investing in a country’s currency when they’re poised for growth with an app like XE could result in a major gain.
  • Other tech-based solutions. There is also a rising number of new apps and technological solutions opening the doors to new investment possibilities. The rise of machine learning and automated investing solutions, like Wealthfront, is an example of this.

Manhattan Beach’s PeerStreet opens real estate investing to individuals (TBR News), Rated: B

Headquartered in Manhattan Beach just across the street from the town’s iconic 24-hour diner, The Kettle, PeerStreet may be located in a small beach town, but the reach of this real estate investment firm is national.

Crosby describes PeerStreet as an eTrade for real estate investing.

The business began right in the heart of Manhattan Beach, and currently has 50 employees. According to Johnson, they’ve recently received funding from venture capitalist Andreesen Horowitz and investor Michael Burry.

United Kingdom

Peer-to-peer lender Zopa passes £2 billion loans milestone (Business Insider), Rated: AAA

Zopa, the fintech businesses credited with inventing peer-to-peer lending, has passed £2 billion ($2.5 billion) in loans over its online platform.

The milestone means Zopa is still just about Britain’s biggest peer-to-peer lender by historical loan book. Funding Circle, which lends to small businesses, has lent £1.92 billion since its launch in 2010.

Zopa says in a release on Monday that the £2 billion in lending represents 300,000 loans made to 246,000 borrowers since its founding in 2005. 75,000 investors funded the lending over the platform.

Five mistakes to avoid when starting a fintech company (Banking Technology), Rated: AAA

However, what I feel very comfortable doing is pointing out some things that failed companies do, based on my experience in Startupbootcamp as well as building a number of successful companies. Here it goes:

  1. They forget to validate

Intuition, experience and opinions are important and helpful. However, building a fintech start-up based only on these three is very risky. A business can’t be built on limited data. Without really understanding if there is a real pain you are solving, a need you are fulfilling or knowing how many people would pay for your product or service you are multiplying the possibility of going after the wrong market, building the wrong solution or having the wrong commercial model or doing the wrong thing.

  1. They lose focus

 

Successful entrepreneurs focus on one thing at a time and they are very good at saying “No” to anything that would distract their real focus. This does not mean that they are not aware of what is going on around them or blindsided to changes or competition but they just know how to use their time efficiently.

  1. They focus too much on being “investable” and forget to build a sustainable business

It is easy to fall trapped to the chants of investors. It can be easy to believe that you have a sustainable business when an investor says that the company you started working on 12 months ago is worth £2 million. That does not mean that you have a business. It means that you can build a viable business. The criterion that investors use is not normally sustainability but potential for a large payout. Sometimes, those two factors are contradictory. Investors have to go for big money and some of these attempts fail.

  1. They don’t invest enough in team and culture

Building a fintech company is hard. The pressure is incredibly strong and never stops. Under continuous pressure, it is very easy for teams to crack and fall apart which in many occasions kill the company. A start-up’s biggest challenge is getting the team right and having the different skill sets covered to succeed. Complementing each other’s strengths and weaknesses is extremely important in small teams, especially with co-founders.

  1. They underestimate what it takes

The journey of an entrepreneur is incredibly hard and requires grit, execution and a lot of patience. In many cases, entrepreneurs get caught in the “fintech celebrity” hype and think that being on panels, and ranking high in different top lists and Twitter means success. Building a real business takes a lot of hours “in the basement”. Once the reality hits, many founders get bored and quit or fade.

Welendus – One Week on Seedrs (Welendus Email), Rated: A

One week has passed since the release of our Seedrs fundraise campaign with significant results.

Over the past week, Welendus attracted over 50 investors and raised over 25% of our target which only proves the level of interest people have in Welendus. The level of engagement and the discussion is another indication of how much people love Welendus.

We are raising £300k for equity in our company and would like to invite you to be one of our first investors and shareholders. You can access our Seedrs campaign at

Assetz Capital CEO Stuart Law Shares His 2017 P2P Lending Predictions (Crowdfund Insider), Rated: A

Nearly one month after ringing in the new year, Stuart Law, CEO and co-founder of peer-to-peer lending platform Assetz Capitalprovided his alternative finance predictions for 2017. 

Law stated:

“Brexit has already had a very positive effect on the peer-to-peer (P2P) market, and all indications signal that it will grow further in 2017 whilst bank lending remains subdued. With the larger platforms announcing record second half results in the six-month period after the Brexit vote, they are also attracting increasing amounts of capital in the form of equity.  Smaller P2P players however will likely struggle to lure the necessary lending or growth capital to survive independently, so we expect a degree of consolidation and some to drop out of the market altogether.

Alternative finance has certainly started to make its mark with savvy investors, but the biggest attraction to date will be the Innovative Finance (IF) ISA.  We predict that this will attract a huge amount of capital onto the main platforms and represent as much as 30% of all capital inflows to P2P platforms this year, assuming all large P2P lenders such as Assetz Capital get approved before the end of March 2016, and perhaps as much as 50% in 2018.

“The desire to invest in secured loans will increase amongst lenders and professionals.”

P2P Lender Flender Closes Successful Seedrs Campaign (Crowdfund Insider), Rated: A

P2P lending platform Flender has officially closed its successful equity crowdfunding campaign on Seedrs. Originally seeking £500,000, the initiative secured a total of £501,700 from more than 230 investors.

Flender stated it does not consider itself a traditional P2P platform with an anonymous marketplace. Instead, its team believes that it will help businesses create lasting bonds with customers, and for consumers to reach through their existing networks and be part of each other’s success. And at the same time, underpinned with legal contracts created by the platform between borrowers and lenders.

ArchOver Announces P2P Business Lending Services Expansion (Crowdfund Insider), Rated: A

On Friday, peer-to-peer business lending platform ArchOver announced it is expanding its current “Secure & Insured” lending model by launching “Secure & Assigned” business loans.

According to the lender, the first Secured & Assigned loan will be for Ergowealth, a firm of chartered financial planners based in Marlow, Buckinghamshire.

The loan announcement comes just a couple of months after ArchOver revealed it was extending its exclusive partnership with international credit insurer and collections company Coface by a further three years.

Banks and lenders face clampdown from the Bank of England on household borrowing (This is Money), Rated: A

The Bank is due to release figures this week showing that the growth in personal loans and credit cards is running at more than 10 per cent a year.

Lenders have been slashing rates in the past six weeks and banks including TSB are offering unsecured personal loans at less than 3 per cent.

The rock bottom rates come alongside cheap loans by peer-to-peer lenders which bypass the banks by allowing loans between private individuals. Ratesetter and Zopa are offering loans at just 3.1 per cent and 3.2 per cent respectively.

Funding Circle welcomes new BDM (Bridging & Commercial), Rated: B

Funding Circle has announced the appointment of Sarah Beard as its new business development manager.

Prior to joining Funding Circle, Sarah spent three years at Lease Plan as an account manager and three-and-a-half years at Hitachi Capital Business Finance, where she managed a portfolio of 30 introducers.

Sarah, who will be based in Bristol, said she was very excited about joining the company.

European Union

Spanish Banks Lead FinTech VC Investments Against Their European Peers (The Corner), Rated: AAA

Citi’s analysts also take a look at how different the FinTech evolution has been in the West: (1) the U.S. pivoted to InsurTech in 2016; and (2) two of the largest U.S. FinTech VC funding rounds in 2016 were in the health insurance space. Big data, the Internet of Things (IoT), and wearable devices, among other trends, will help insurance companies use FinTech to be more creative and customized.

Europe remains a laggard for start-ups/VC investing at about 10% of global FinTech VC investment in 2015-16. This is not a big surprise as Europe has a smaller VC market versus the U.S., it has none of the large technology/Internet companies that exist in the U.S. or China and its banking system (despite the sector’s weak stock prices, earnings and capital challenges of the past decade) offers more of a full-service provision versus U.S. or Chinese peers.

As reported by Citi:

European banks are increasingly interested in FinTech and with more bank investors and affiliates, we will see more of a shift to business-to-business (B2B). In 2017 we expect more focus on B2B FinTech topics, such as Artificial Intelligence, especially in London which is a hotspot with DeepMind and its concentration of universities; regulatory tech both in the U.K. and the U.S.; and cybersecurity primarily in the U.S. and Israel.

European Crowdfunding Networks Calls for Members to Assist with EU Crowdfunding Regulatory Review (Crowdfund Insider), Rated: AAA

The European Crowdfunding Network (ECN), a pan-European alternative finance advocacy group, is asking members to participate regarding input on the Capital Markets Union.  Specifically, the ECN will be working with the Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) regarding input on obstacles to cross-border

The ECN will also launch an open survey to all EU securities and lending crowdfunding platforms with will deliver input for the European Commission’s review of the Capital Market Union and which will be followed up by individual interviews with interested parties.crowdfunding for both online lending (peer to peer lending) and equity crowdfunding.

Australia

Tyro, RateSetter, Stockspot and Westpac on 2016 and the year ahead (The Mitchel Lake Group), Rated: AAA

CK: The transferability of information is huge with a growing number of middleware, SaaS applications and APIs. Sharing data and improving collaboration in the market is continually on the improve, benefiting the customer.

DF: Investors are much more discerning in the businesses they back. This will be better in the medium term, but it’s been difficult for some businesses locally.

CB: This year Stockspot became the first robo-adviser in the world to give clients the flexibility to personalise their portfolio with the launch of Stockspot Themes. We’ve already managed to generate some fantastic net returns for early adopters (6.2% and 9.2% per year) while charging clients less.

DF: For RateSetter, expanding our offering from consumer lending to business lending was a significant development. In Australia there’s been a real lack of business financing options outside residential property-secured bank finance and expensive short-term working capital finance, so we’re excited that RateSetter now offers Australian businesses a low-rate funding alternative to help them grow and prosper.

JS: My biggest highlight has been Tyro receiving a bank license. We are the only tech company to have achieved this so far. This was such a massive win for us and the sector. Following this, we were then able to deliver next-gen banking, a cloud-based, totally mobile & totally integrated banking solution for SMEs and growth companies.

JS: The FinTech community has limited potential if banking is not opened up. In a way, Australia is cursed by the entrenched bank oligopoly. If we don’t get our act together and open up banking, the next-gen banking providers will not be Australian.

CB: There are two things the Government could do to improve fairness for consumers when it comes to investing and superannuation. One is to require all superannuation and managed funds to provide fee and performance data to comparison websites so consumers can easily compare fund options. The second is to implement a public tender for the right to manage default super funds as outlined by the [Grattan Institute]( Chile established public tenders for the right to manage default super funds and it has reduced average annual super fees by 50%.

John Cummins Appointed New CIO for Australian Marketplace Lender SocietyOne (Crowdfund Insider), Rated: A

The Australian largest marketplace lending platform SocietyOne announced John Cummins has joined the group as CIO, according to The Advisor. Reporting to SocietyOne CEO and MD Jason Yetton, Cummins will be responsible for SocietyOne’s funding requirements to support demand from an expanding number of borrower customers, including building on SocietyOne’s existing network of investor funders which features large financial institutions, mutual banks, credit unions, high net worth individuals and SMSFs.

India

India Money Mart Serves as a P2P Lending Platform (Military Technologies), Rated: A

With India Money Mart serving as a P2P lending platform, borrowers and lenders find transactions easy. This online market place provides a reliable platform for both lenders and borrowers in India with a minimal operational cost.Lenders and borrowers can avail loan facilities at their own will. Borrowers can choose single or multiple lenders at the same time. IMM ensures that these transactions are carried forward without any hassles or meeting one another personally.

Through an easy lending process, Kissht helps consumers avail quick loans (YourStory), Rated: A

There is an entire population that has the money to repay loans, yet mainstream banks reject their loan applications. This does not favour consumer spending, although consumption has grown in this country. According to data available with the RBI there are only around 27 million credit cards in the country, and 300 million bank accounts. In 2016, although personal loans were 22 percent of all bank credit disbursed, several Indians remained without personal credit.

With this as the backdrop, Krishnan Vishwanathan, a consultant from McKinsey, wanted to find a fix to help people consume. Giving up his lucrative career, he set up Kissht, which means EMI  in Hindi, to provide collateral-free loans for products that consumers want to purchase. The total loans disbursed so far are to the tune of Rs 17 crore, with over 9,000 customers.

Asia

Peer-to-peer lending platform awaits BOT nod (The Nation), Rated: A

VORAPOL PHORNVANICH, chief executive of PeerPower, a financial-technology start-up, aims to create a new online peer-to-peer lending platform for investors and borrowers.

“At present, investors and savers in Thailand earn a relatively low return on their funds, averaging 0.5 per cent for savings accounts, 2-2.5 per cent for fixed deposits and 4-4.5 per cent for corporate bonds.

“On the other hand, if you are a borrower, you have to pay a relatively high interest rate on consumer loans, which have no collateral. Interest rates are currently as high as 15-36 per cent per annum. The interest-rate spread is huge, so we think this new online platform can help narrow the gap between deposit and lending rates as happens in other countries.”

Authors:

George Popescu
Allen Taylor

Wednesday January 4 2016, Daily News Digest

p2p lending volume

News Comments Today’s main news: Fannie Mae says SoFi’s home loan refinance program may include other lenders. Today’s main analysis: International P2P lending volumes. Today’s thought-provoking articles: FT Partners’ CEO FinTech market analysis. Why equity crowdfunding cap should be raised. Bridg offers Bluetooth-enabled mobile payments. United States Interview with Fannie Mae’s Jonathan Lawless. AT: “This is important […]

p2p lending volume

News Comments

United States

International

European Union

  • Top 10 Baltic FinTech companies. AT: “Interestingly, six out of 10 are based in Latvia. Three of the other four are in Estonia. Several of them are important outside of their home countries.”

China

India

Asia

United States

New Home Loan Refinance Product May Help Address Student Debt Debacle (MortgageOrb), Rated: AAA

Jonathan M. Lawless, vice president of single-family analytics and affordable housing at Fannie Mae, says research shows that borrowers who use home equity to pay down student debt perform well on their mortgages.

Q: How does SoFi’s cash-out refinance program work? What kind of loan-to-value (LTV) mortgages are eligible? Is this offering only for primary residences?

Lawless: This program allows borrowers to refinance their loans and increase their loan amounts to use the additional cash to retire student debt, which typically carries a higher interest rate. This will allow borrowers to increase their balances up to 80% LTV, to keep people from taking on more debt than they can handle, and requires that the property be their primary residence. The mortgage being refinanced does not need to be an existing Fannie loan. The loan – as long as it meets our standards – will become a Fannie loan once it is refinanced.

Q: By some estimates, about $1.4 trillion of student debt is outstanding. How many homeowners could benefit from the cash-out refinance program?

Lawless: SoFi estimates that 8.5 million Americans with or co-signed on student debt also own a home. A large share of those homeowners is likely to have equity to use to pay down student debts.

Q: How did SoFi and Fannie Mae come together to create this novel cash-out refi program for student debt?

Lawless: Fannie Mae has been working on a variety of programs to address the significant burden that student debts have put on achieving homeownership. When we started thinking about how to leverage the close to $8 trillion of home equity today to lessen some of the $1.4 trillion of student debt, we approached SoFi, a new customer of ours, to learn about student debt and refinancing. Through those discussions, we developed this program.

Q: Will this cash-out refinance program be made available by other lenders?

Lawless: Our intention is to make this program available to all lenders, depending on the level of consumer interest and final approvals from our regulator. Our hope is that this will be made widely available early next year.

FT Partners’ CEO Monthly FinTech Market Analysis (FT Partners Email), Rated: AAA

FT Partners regularly publishes profiles on key transactions in the FinTech sector. Please feel free to download these reports below.  And if you don’t already, please follow us on here.

A Million Bucks Crowdfunding… Not Enough? (Crowdfund Insider), Rated: AAA

Many entrepreneurs quickly point out, the $1 million cap under Regulation Crowdfunding (Reg CF) is limiting. $1 million may not provide sufficient capital to scale, especially after offering expenses and portal fees are deducted at closing. No longer can equity crowdfunding be written off so quickly. Building a fundraising strategy that incorporates equity crowdfunding AND traditional methods of fundraising is not only possible but being successfully implemented by savvy startups today.

Regulation Crowdfunding provides for a maximum annual amount that can be raised of $1 million. Regulation D does not contain the same maximum offering restrictions. In fact, under Regulation D, Rule 506, an unlimited amount of funds can be raised from accredited investors.

2017 may prove to be an especially promising year for the startup community. A legislative fix addressing many of the shortcomings of the JOBS Act, called the Fix Crowdfunding Act(HR 4855) is on its own path through Capitol Hill.

In its original form, the Fix Crowdfunding Act sponsored by Representative Patrick T. McHenry, included an amendment to permit issuers relying on Regulation Crowdfunding to increase their maximum offering amount under the exemption from $1 million to $5 million.

This amendment would tremendously serve startups and small businesses seeking seed, bridge and Series financing. Those issuers seeking more than $5 million in financing per year could still choose to conduct multiple offerings in reliance on alternative exemptions as discussed above.

US digital payments market is expected to reach $ 4,300 bn in the future (India Info Line), Rated: A

Technological developments such as data analytics, social networks and increased penetration of the smartphone have led to the emergence of newer models such as marketplace lending, people based marketing, equity crowdfunding, peer-to-peer lending and several others.

Apple Pay, Android Pay, Samsung Pay and PayPal wallet were the most used mobile wallets by customers for making online and in-store payments in the US. Dwolla, Venmo and Chase QuickPay were the pioneers in the space of P2P money transfers.

Digital payment segment was by far the most revenue generating segment that saw maximum customer interest and participation. The segment was majorly driven by the overwhelming sales of e-commerce market in the country.

The digital commerce market includes all the transactions made for online purchase of goods or services in the country through payment gateways. The market is the largest segment of the digital payment market in the US because of the heightened transactions for e-commerce in the country which have grown due to highly developed internet ecosystem and high internet penetration.

P2P money transfers have been on a rise especially amongst the teens and young working class, with the major transfers happening between friends, family of co-workers.

Three Tech Trends That Will Impact Small Business Lending (Forbes), Rated: A

Banks and FinTech companies are using technological advances to improve access to capital, which is the lifeblood for small business growth.

Artificial Intelligence

AI is causing a transformation in small business lending by improving credit assessment, financial product development, and loan decision-making.

For instance, FinTech companies are partnering with online accounting software platforms, and that the data collected is used to target business owners in need of financing. Thus, Artificial Intelligence enables lenders to offer ever more personalized unsecured business loans.

Convergence

While marketplace lending currently accounts a relatively small percentage of the small business loan transactions today, technological innovations are forging partnerships between banks and marketplace lenders that could never have been seen a few years ago.

Convergence is on the uptick and this will continue into 2017.

Serving The Underserved

Banks are being encouraged fund minority business owners and ventures in economically disadvantaged areas. Meanwhile, marketplace lenders are in the forefront of providing capital to entrepreneurs and communities where their small business financing needs are not being met.

The National Federation of Independent Businesses’ November index of small business optimism climbed from 94.9 to 98.4  its sharpest surge since 2009.

Will OCC’s New Charter Go Beyond Fintech Firms? (National Mortgage News), Rated: A

The Office of the Comptroller of the Currency’s decision to offer a special-purpose charter for fintech firms may entice more players than expected, including mortgage lenders and even some payday lending shops.

In the leadup to the charter’s release last month, most had expected it to focus on marketplace lenders and others with a more technologically oriented business model. But the wording of the charter is broader, potentially allowing other nonbank players a way to enjoy the benefits of federal preemption and avoid state by state registration.

Some attorneys are even hearing interest in the charter from payday lenders. Though it might be a long shot for them to obtain the OCC’s blessing, observers say that the agency might at some point prefer to handle these companies through direct supervision.

23rd Annual VC & Private Equity Conference Announces Keynote Speakers and Agenda (BusinessWire), Rated: B

Conference panels will comprise a wide variety of leading alternative investment professionals, including general partners, limited partners, intermediaries, and industry consultants, among others. To view the full schedule of speakers and events, and to register to attend, please visit:

International

International P2P Lending Volumes December 2016 (P2P-Banking), Rated: AAA

The following table lists the loan originations of p2p lending marketplaces in December. The total volume for the reported marketplaces adds up to 414 million Euro.

P2P-Banking’s Lehmann: Predictions for 2017 (Crowdfund Insider), Rated: B

“2017 will be a boom year for the UK P2P lending sector as it will be the first year which fully benefits from the newly introduced IF ISAs. On the continent origination volumes will continue to grow and several new marketplaces will launch. For the marketplaces it remains a challenge to attract enough creditworthy borrowers to match the investor demand. New VC activity in the sector will be slowing, possibly made up partly by bank engagements in the companies. The year may also offer some cues how fintech companies can profitably incorporate blockchain/bitcoins in alternative lending use cases – though on a small scale in absolute numbers.”

European Union

Top 10 Fintech companies in the Baltics (TechBullion), Rated: AAA

In the recent years Baltic States have become a lot more active in Fintech sector and the most rapidly growing areas are lending, payments and insurance. Thanks to the local Peer-to-Peer lending companies, the Baltic region has also undergone an uprising in alternative loan segment. According to the research performed by KPMG, in 2016 Latvia alone broke into the top 3 countries by the size of alternative lending volume with the third largest volume of funded loans archived in Q1-Q3 2016.

BitFury is currently operating in the US, Iceland, United Kingdom, Netherlands, Georgia and Hong Kong.

Since 2009 Bondora has been consistently delivering double-digit returns to over 14,000 investors on the platform.

In 2016, Creamfinance was acknowledged as a second fastest-growing European company by Inc.5000.

Factury is Latvian-founded blockchain solution supporting secondary market trading of bank loans, smart invoice payment and settlement.

Launched in Latvia, Mintos is a peer-to-peer marketplace where investors can invest in loans originated by non-bank lenders.

Founded in 2013 in Latvia, Monea is a P2P micro payment application providing money transfers via phonebook contacts from bank account into the receiver’s bank account.

TransferGo is a global money transfer company that supports migrant workers to send money back to their relatives without paying unnecessary bank fees.

In August 2015 TransferWise was named a World Economic Forum Tech Pioneer.

Twino is a privately-owned marketplace lender, operating across 10 countries with headquarters in Riga, Latvia.

China

Hong Kong to rank top again this year for global IPOs, PwC predicts (South China Morning Post), Rated: AAA

Hong Kong will continue to rank top globally for initial public offerings in 2017, with 130 companies raising up to HK$220 billion, according to accounting firm PwC.

The estimate, published on Tuesday, is 13 per cent higher than last year’s total and would represent a turnaround after 2016 saw funds raised from IPO plunge 26 per cent from the previous year. Despite the drop, Hong Kong retained the No.1 spot for a second consecutive year.

PwC is also positive about IPOs in the A-shares markets in Shanghai and Shenzhen. It expects the two bourses to raise a combined 220 billion to 250 billion yuan in 2017, up 51 per cent to 66 per cent from HK$167.8 billion last year, which was low because China had suspended IPOs for some months.

India

Financial authority issues regulation on fintech lending (The Jakarta Post), Rated: AAA

The Financial Services Authority (OJK) has finally issued a regulation on financial technology (Fintech) firms that run peer-to-peer (P2P) lending businesses.

The regulation, POJK No. 77/2016, requires a fintech company to have Rp 1 billion (US$74,239) capital when it registers its business with the OJK and for this to rise to Rp 2.5 billion when it applies for a business license.

The figures are lower than the respective Rp 2 billion and Rp 5 billion stated in the draft regulation.

The regulation also does not strictly regulate maximum interest rates on loans. It only states that a fintech firm can advise its investors and customers of an interest rate by “taking into account fairness and national economic development”.

Asia

UAE Tech Duo’s ‘Bridg’ Offers Bluetooth Route To Smarter Mobile Payments (Forbes), Rated: AAA

Pursuing a little off the beaten path, Moussa Beidas and Nadim Jarudi, co-founders of Bridg, have created an app that allows smartphone-to-smartphone payments using bluetooth, and only requires one of the devices to be online.

Surprisingly, the UAE has the highest per capita mobile phone penetration (estimated at 80.6 % of the population) but many in lower income bracket don’t use the device for mobile payments.

For customers, the app operates like a wallet, with all the expendable cash in their smartphones. Money is transferred into the Bridg app from a traditional savings or checking account. The money is then transferred via bluetooth to a participating vendor.

Bridg uses tokenization, a process where sensitive data elements are replaced with a non-sensitive equivalent.

Authors:

George Popescu
Allen Taylor