BlueVine raises $102.5 million for banking services. This is a welcome service, and a new milestone in online banking because most digital banks target consumers. As far as I know, this is the only online banking service specifically targeting small businesses.
Pro.com, the premier digital platform focused exclusively on building custom homes and major remodels from start to finish, announced a new partnership Tuesday with online personal finance company SoFi, aimed at revolutionizing how homeowners finance and complete their remodels, renovations and upgrades.
The startup, which offers financing and other banking services to SMBs, today is announcing that it has raised $102.5 million, a Series F round of equity funding that is coming from a mix of financial and notable strategic investors.
Led by ION Crossover Partners, the round also includes existing investors Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Nationwide (a major financial services player in the UK), Citi Ventures, Microsoft’s venture fund M12, and private investors; as well as new investors MUFG Innovation Partners Co., Ltd, O.G. Tech (the VC connected to Israeli billionaire and property magnate Eyal Ofer), Vintage Investment Partners, ION Group, Maor Investments and additional private investors.
There is finally some real light at the end of the tunnel. In the last two days we have heard from both the OCC and the FDIC on the Madden issue, something they called unfathomable in a joint amicus brief in Colorado a couple of months ago. They have each given notice of their proposal that would clarify the “valid when made” doctrine once and for all.
At the core of the issue is the ambiguity created by the Madden decision. A loan can be valid when it is made but if it is sold or transferred can suddenly become invalid in the Second Circuit states of NY, CT and VT. This has led to reduced consumer lending to these states and also concern that, given no regulatory clarity, this could expand to other states.
Here are links to the OCC and FDIC proposals. There will be a 60-day comment period where interested parties can weigh in.
Just two months ago, the ink was barely dry on a more than $24 million Series A that Sam Hodges raised for his startup Vouch Insurance. Now he is back with an even larger funding, led by Y Combinator‘s Continuity Fund, as the company seeks to join a crop of startups that cater to the needs of other startups.
Fireblocks (www.fireblocks.com), an enterprise platform for securing digital assets in transit, announced today, Celsius Network, the largest provider of interest income and digital asset loans in over 150 jurisdictions worldwide is enlisting Fireblocks to help protect over $400 million assets and 53,000 active wallets, securing both retail and institutional divisions.
The primary difference between using a crowdfunding site versus flying solo on your investment journey is that your investment is managed by a team of real estate professionals. Of course, that is also the biggest risk as you are completely dependent on the project developer to deliver what they promised.
If you are not an accredited investor but want to be involved in real estate crowdfunding, companies such as Fundrise, stREITwise, and RealtyMogul are a great place to start.
ArborCrowd (the “Company”), the first crowdfunding platform launched by a real estate institution, announced today that its Quarry Station Apartments investment (“Quarry Station”) has been realized in under two years, providing investors with returns quicker and higher than initial projections. The property’s $49.35 million sale price generated an internal rate of return (IRR) of 20.31%, surpassing the original return target of 16% to 19%.
Through real estate crowdfunding, the developer can utilize an online platform that enables a large group of people to invest small dollar amounts in the project. If the development company chooses to follow the crowdfunding option, here’s how that could work:
First, the developer identifies an online platform that is suited to the company or mixed-use development. Each platform is different and most real estate crowdfunding sites receive significantly more project applications than they select.
If the investment passes all the legal, physical, and financial due diligence requirements the platform requires, that platform will then allow the developer to solicit funds using their site.
An investor can then use that platform to contribute financially to the development.
The funds are then tied up until the investor delivers on the project.
Online loan marketplace Lending Tree published a report on the most expensive commutes in the 100 largest cities in the US in October.
Consider a resident in New York, which Lending Tree ranked as the city with the fifth most expensive commute. Using Lending Tree’s findings via 2017 Census Bureau data, the median annual earnings for a full-time employee in New York is $51,573; their hourly wage is $26. Now, consider the mean time of commuting one way, 41.8 minutes. If you make $26 per hour at your job, and you spend 83.6 minutes daily on your round-trip commute, then your time wasted commuting is worth $37 of time you would have been working.
While the first generation of fintech companies created billions of dollars of value, because of new enablers like Plaid, Cross River Bank, Finix and Wisetack, we’re now moving past that phase to one where fintech moves from being a business model unto itself, to being the fourth layer in the stack or the “fourth platform,” wherein financial functions like payments, lending and insurance join connectivity, intelligence and ubiquity as layers of the stack upon which new companies can be built.
Online lender Balboa Capital released the results of its 2019 Black Friday Survey, which was conducted to examine how small business owners are preparing for this historically busy shopping day, and to find out what their Black Friday sales expectations are.
The survey reveals that 70% of small business owners are preparing for Black Friday early, and 83% anticipate meeting or exceeding their Black Friday sales goals. Balboa Capital’s survey was sent to a sample of small business owners in a wide variety of industries during the first week of November 2019.
American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced today the launch of its AMERIBOR on the blockchain. AFX now mints two ERC-721 non-fungible tokens for each AMERIBOR transaction on the AFX platform (for each counterparty to the transaction). The pair of tokens is automatically minted when the transaction is repaid by the borrowing counterparty to the lending counterparty. Each token contains encrypted transaction data and encrypted counterparty data. The counterparty data is normalized prior to encryption to further preserve counterparty anonymity.
The pros. Peer-to-peer lending tends to be a win-win: Investors get a higher rate of return on their money than a lot of banking products offer, and borrowers get an interest rate on their loan that’s usually less than bank-offered loans and credit cards.
The cons. Peer-to-peer lending won’t give you quick access to your cash if you need liquidity.
Funding Xchange (FXE), a company that helps people and organizations find suitable business loans and funding options from its marketplace of more than 45 established lenders, has raised £8 million (appr. $10.4 million) through an investment round.
Arbuthnot Commercial ABL, the specialist asset based lending arm of Arbuthnot Latham, has completed a £2m asset based lending (ABL) transaction in support of the strategic acquisition of Circum Ltd, a fire protection services specialist, by EA-RS Fire Engineering Ltd. (“EA-RS”). The facility comprises a flexible confidential invoice discounting line and a term loan.
Starling’s head of banking compliance Rachel Coote has quit to join startup Paybase. Coote is the sixth senior employee to leave the buzzy finance company in 2019.The company’s chief financial officer Tony Ellingham has confirmed he will also depart within the next year.
US fintech Robinhood, a commission-free trading startup valued at $7.6bn (£5.9bn), has today arrived in the UK.
Users will be able to invest in more than 3,500 US-denominated stocks, including Apple, Amazon and Tesla. They will also be able to access foreign stocks that are available to trade in dollars through depository receipts, such as Barclays and Burberry.
The finance will be used to fund the acquisition of a mixed-use property at 68‐86 Clapham Road in Oval, and in its place, develop an aparthotel with between 120-175 units, subject to receiving planning permission. The site is located within walking distance of several Zone 1 underground stations – Oval, Stockwell and Vauxhall – as well as the South Western railway line, providing services to Clapham, Waterloo, Guildford, etc.
Nexo, the dominant player in the crypto lending space, is joining the Foundation for Wallet Interoperability (FIO), the industry consortia bringing together leading companies in the blockchain ecosystem to solve the biggest problem faced by the industry — usability.
LexinFintech (LX) reported a solid set of Q3 results with loan origination growing 170% y/y that resulted in a beat on both revenue and EPS. More importantly, loan origination guidance was increased to RMB115-125b vs. the prior forecast of RMB115b.
Overall, asset quality remains stable at the end of Q3 with delinquency rate declining 9bps to 1.4% and the 6-month charge-off rate maintained at just above 2%.
Institutional funding has reached 75% of the total loan balance. In terms of origination, institutional accounts for 94% of the total loans originated, meaning that LX’s own P2P platform Juzi Licai is becoming less relevant going forward.
Twino founder Armands Broks is to standing down as CEO and will now focus on new business opportunities and bringing talent on board.
The management change comes as Twino, which offers European investors investment opportunities in unsecured European consumer loans, reports pre-tax profits of €13m (£11m) for 2018, compared to a €7.2m (£6.2m) loss the year previous.
Twino has also disclosed that it has also issued loans to the value of €1bn (£860m), since it was set up 10 years ago, half of the value of which have been issued in the past three years.
Up to date, Mintos has issued over EUR 3 billion in investments, making it one of the biggest crowdlending platforms in Europe. Investors can invest in consumer loans such as cars, mortgage, short-term, and personal, as well as business loans like invoice financing, agriculture, business, etc. starting from as little as EUR 10 with return on investment of 11% per year on average.
Real estate crowdfunding platform EstateGuru and OberHaus, real estate agency operating across the Baltic region, have joined together to produce shared real estate market research and analysis with a specialized focus on the needs of the crowdfunding platform.
The lowest fixed rate in Finder’s database right now is 2.68%, a single basis point lower than the lowest variable. This is unusual (the lowest three year fixed rate this time last year was 3.74%).
Another online lender I spoke to was fine with apartments in the same suburb but didn’t offer pre-approval. This meant I would have to start a full application with them even before I had found a place to buy. For some borrowers, this can be a significant turn-off.
OneConnect Financial Technology Co. Ltd. (OneConnect), today announced it is leading Southeast Asia’s sustainable financing with the launch of two smart lending platforms – SeekCap, the Philippines’ first lending platform that helps the underserved micro, small and medium enterprises (MSMEs) manage cashflow and grow their business, as well as a multi-finance platform that will empower millions of unbanked and underbanked Indonesians with easy access to loans to finance their purchase of vehicles essential for their daily transportation so as to improve mobility and their lives.
MSMEs form the backbone of any economy. In the Philippines, more than 99% of all businesses are MSMEs and they contribute to almost 63% of total employment. Yet, at present, only 9% of loans and financing from the country’s major banks go to MSMEs.
There were 380 fintechs operating in the country in May 2019, per Finnovista, and around two-thirds (64%) of Brazilian consumers are defined as fintech adopters by EY — a rate that’s level with the global average and higher than the majority of G7 countries’.
Smartphone and internet penetration: Three-quarters of Brazilians used smartphones in 2017, which is expected to tick up to 86% by 2025 — and both figures are the highest across the region.
High fees charged by incumbents: Brazil’s four largest banks control almost 80% of the country’s deposits, with similar concentrations in credit and assets.
A large underserved population: Around 45 million people in the country don’t have access to or have not used a bank account in the past six months.
The economy in Mexico remains largely informal and cash dependent. An estimated 44% of the adult population in Mexico owns no financial products. This largely unbanked population, coupled with the new fintech legislation, has created immense opportunities for Mexico’s fintech sector to grow. In fact, roughly 100 new Mexican fintechs were established in 2018 alone, representing 52% growth for the industry. Mexico has become a regional leader with more than 273 fintech ventures operating in the country. When combined with Brazil’s 380 fintech ventures, the two countries make up 56% of the region’s total fintech activity.
Affirm debuts new app for shoppers. The app allows consumers to shop and check out with “virtually any retailer.” This Business Insider article highlights Affirm’s need to step up its game in order to compete with Amazon, 66 percent of whose customers begin their search for new product at Amazon. Affirm will have to offer better deals for consumers and make it easy to purchase things. With Affirm’s relationship with Walmart, that shouldn’t be too much of a challenge. However, it will be a challenge.
OnDeck today announced the results of a national survey of U.S. small business owners that finds economic issues are the most important factors in determining their choice for president in 2020.
Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
57% of small businesses surveyed said they were either Very Optimistic or Somewhat Optimistic about the economic outlook for their businesses;
93% of those surveyed said they plan to vote in the 2020 election.
60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.
Affirm’s app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay, which is increasingly important as 24% of consumers want the flexibility to look online and shop in-store.
Those with Apple Pay or Google Pay enabled have also seen up to 14% of transactions driven in-store, making the Affirm app a rare omnichannel solution for customer acquisition.
Since Affirm’s launch, the landscape in the POS space is radically different than it was when Affirm entered. It is, first and foremost, a much bigger and more populated space than it once was. Other startups have come to the field — Afterpay, Uplift and Sezzle for example — but also bigger and more established names in financial services. In the last 12 months alone Square, Mastercard, PayPal and Chase have all rolled out POS installment lending products or enhancements as the market continues to pick up popularity among consumers, particularly younger ones.
The upward trend in my returns continued in Q2, making it the fifth quarter in a row with increasing returns. My preliminary return for the 12 months ending June 30, 2019 is 6.20% (one investment is still not final), the best I have achieved since Q3 2017.
Afterpay is one of a number of platforms that have sprouted up over the past couple years that are willing to float customers a couple hundred or thousand dollars to shop. In addition to it, there are Affirm, Sezzle, Klarna, and Quadpay. They are positioned as a more consumer-friendly option than credit cards, a whole host of services bent on—because this is 2019—disrupting the powers that be.
Globally, Afterpay, which launched in Australia, has over 4.6 million customers and 35,000 retail partners. In the U.S., where Afterpay only launched in May of last year, it has two million customers and is available at 6,500 retailers. Over three million people use Affirm, while another 500,000 have shopped with Sezzle.
Silicon Valley promises aside, Afterpay is, at best, a platform that allows you to take out what amounts to a small loan on an item. After an approval process—Afterpay does not check a credit score; others like Affirm do—the customer pays a fourth of the price upfront and the rest is paid off in three equal installments every two weeks.
Also new is the $1,500 limit, up from $500, that Afterpay raised after Hyde-McCormick proved himself a responsible shopper and the $87.50 payments currently due every two weeks.
In its quarterly report that tracks consumer delinquency trends, the American Bankers Association said that 30-day past-due rates ticked up in eight of 11 categories in the second quarter when compared with the first quarter, but stressed that delinquencies remain well below historic norms.
Maker DAO, the most active decentralized finance app on the Ethereum network, has announced a date for its long-awaited multi-collateral DAI generation. According to observers, November 18 may be the date MKR starts accepting other assets as collateral.
Multi-collateral DAI creation has the potential to be riskier in comparison to ETH-based models. Currently, Maker is deliberately over-collateralized at above 300%, with the minimum at 150%, due to the high volatility of crypto assets.
Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.
It’s hardly a full-blown apocalypse for the junk-rated leveraged loan market, which totals $1.2 trillion.
Energy is the hardest-hit sector on the list, with more than $12 billion of loans falling more than 10 cents on the dollar. Consumer and health care follow, comprising around $8 billion and $5 billion of loans outstanding, respectively.
Under the CFPB’s May proposal, debt collectors could have unlimited contact with debtors through email and text messages, though consumers could opt out of such communications. Additionally, collectors could satisfy disclosure requirements with a hyperlink embedded in an email that takes consumers to a description about how they can dispute a debt.
Voyager Digital, LLC, a subsidiary of publicly-traded Voyager Digital (Canada) Ltd (Ticker VYGR.CN), an industry-leading best execution crypto asset broker, today announced a partnership with Celsius Network, in which Celsius will manage a portion of Voyager’s digital assets.
Zopa Group – which incorporates the P2P platform and upcoming digital bank – reported a pre-tax loss of £18.295m for the year ended 31 December 2018, compared to a pre-tax loss of £5.536m the previous year.
In a survey of 2,000 consumers, 47% of people who had recently bought a car with finance are unable to identify which type of finance deal they signed up for. Zopa estimates that the average car buyer could save up to £11,000 over the course of their lifetime by working out the best finance deal available.
Customers who were mis-sold loans by the collapsed payday lender Wonga are expected to receive less than 10% of what they are owed in compensation after administrators revealed that only £41m will be put aside for claimants.
I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.
Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland.
Crowdfunding a start up brings to mind the statement ‘Nothing worth having comes easy’, never truer than in the case of launching a start-up. Getting a new business off the ground will often require capital. Something which a lot of people don’t know how to go about getting.
Half of the 200 landlords approached agreed tax changes and tougher mortgage borrowing criteria have thwarted their plans to buy more properties, while 15% admitted they had been put off buying homes to rent.
A third who still wanted to invest are considering a switch from buy to let to peer-to-peer lending secured against property, while 8% have already done so.
The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.
For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI’s guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.
At the conference, Business Insider Intelligence identified four emerging themes that we expect to set the tone for the space for the next year: further proliferation of partnerships between banks and fintechs, increased focus on digital banks’ sustainability, accelerated innovation and disruption from small- and medium-sized business (SMB) lenders, and more challenges ahead for the UK’s P2P lenders.
CYBG bank and price comparison site GoCompare recently partnered to offer an energy compare and switch service for all of CYBG’s B customers.
Barclays bank partnered with SMB finance fintech MarketInvoice last year to give Barclays’ SMB clients access to MarkeInvoice’s solutions.
French Banking-as-a-Service platform Treezor was acquired by Société Générale last year, as the bank looked to enhance its ability to innovate and decrease time to market.
ID Finance, the fintech operating in Europe and Latin America, saw revenue growth of over 100% in the first 9 months of 2019 and is on track to double its revenues to €90m revenue this year. The data science, credit scoring and digital finance company is now planning its first equity crowdfunding round via Crowdcube as it targets €300m+ of revenue within 2 years.
The Binance cryptocurrency exchange has launched the latest phase of its relatively new lending program. For the program’s eighth installment, Binance is sticking with the model of short-term loans, as users only have to commit their crypto for 14 days.
These underbanked markets, led by countries in Asia and Africa, have inspired fintech innovation that’s leapfrogging the technology available in the developed world. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.
Take Facebook Inc.’s plan to launch a digital currency called Libra in 2020. The social network’s gigantic reach—more than 2.4 billion active monthly users—could draw a much wider audience to Libra than has used previous cryptocurrencies. For instance, global remittances by migrants reached a record $689 billion last year, according to the World Bank.
San Francisco-based 500 Startups staked 43 such companies in the 12 months ended June 30.
Goldman is losing $1.3 billion on Marcus, trying to build a Fintech leader. Etrade is going to lose $75 million from cutting trading fees to $0 to keep up with Robinhood. Revolut is losing £35 million on £60 million in revenue, with another £140 million burned by Atom, Monzo, Tandem, and the rest.
Generally speaking, from a deposit point of view, these are still all small businesses at £1 billion in assets (e.g., Betterment manages $20 billion).
The first is that the Robinhoods and Monzos of the world are 10x overpriced relative to the payments apps. I can sort of buy this — though money in motion is way easier to capture than money at rest. The second is that venture investors think a finance user is worth $1,500 in a digital bank.
Recent examples of blockchain’s impact on financial markets go well beyond these initial applications or P2P lending or crowdfunding.
The first wave of applications in finance and banking is being driven by easily achievable gains in actively traded assets.
MasterCard incorporated a blockchain payment system providing vendors real time, lower cost settlements on cross-border transactions. Representing a consortium of more than 40 of the world’s largest banks, fintech firm R3 launched a payment system built on DLT platform Corda, to expedite intra-bank transfers.
St. Regis Aspen, a Colorado resort, is a partnership formed with a crowdfunding site, Indiegogo, that in lieu of a traditional IPO completed a private placement via DLT financing real estate. This sale of ‘tokens’ – fractional interests in the underlying property – raised $18m, compliant with securities laws.
The RBA has cut official interest rates for the third time this year, and already a handful of lenders have responded by slashing rates across their range of variable rate home loans. Right now, if your home loan doesn’t have a ‘2’ in front of it, you’re missing out.
The online lender has announced its response to the 0.25% drop in the official cash rate though, with loans.com.au taking 0.15% off a number of variable rate home loan offers for both owner occupiers and investors.
The changes, which come into effect on October 17, will have an impact on a number of loans.com.au home loan offers including:
The growth and success of peer-to-peer (P2P) lending is a testament of the viability of risk-sharing contracts, where the investors take on some risks (for higher return) from the ventures they are financing. This way, finance will be grounded in the real economy, which is another core principle of Islamic finance.
BFS Capital, a leader in small business lending, has officially launched a data science and engineering hub in Toronto as the company accelerates its plans to develop best-in-class digital financial products for small businesses across the globe.
LendingClub shared a few stats on borrowers who choose this method:
Save an average of nearly $900 over the course of their loan
Cut their credit card interest rate nearly in half
Increase their credit score in just three months
The product has been tested for over a year and LendingClub is working with a partner network of over 1,700 credit card, bank and loan companies to make the process seamless. What’s interesting is borrowers can add up to 12 creditors per loan which is an important feature since borrowers often hold balances across many cards.
US Core CPI rose by 2% YoY in May, just at the Fed’s target rate but below economists’ expectations. Consistently low inflation is boosting calls for a rate cut next week. The market is pricing in a 24% probability of a rate cut next week and a 76% probability of a rate cut in September.
Algorithmic fintech lending is less discriminatory against minorities than traditional loan officers, according to a recent study of US mortgages. The findings signal hope that technology could provide financing that’s more fair, but the research also underscores how widespread discrimination remains.
The US housing market has long been prejudiced against minorities. When Latino and Africa-American borrowers are looking to buy a home, they usually end up paying 7.9 basis points (0.079 percentage points) more than whites to take out the mortgage, and 3.6 basis points more when they refinance the debt, according to a National Bureau of Economic Researchworking paper published this month.
When Clear Point Gardens, a 604-unit apartment complex in Columbus, Ohio, recently changed hands, it produced a nearly 43% gain in 16 months, an amazing windfall for investors in the deal.
All 68 of them.
The sale of Clear Point, financed with help from investors on CrowdStreet’s online platform, is the latest example of how online syndication is revolutionizing the way deals are financed in the $6 trillion commercial real estate market.
One of the world’s largest banks is about to join the digital mortgage revolution, as HSBC Bank USA, the U.S. arm of HSBC Group, announced that it is partnering with Roostify to launch a digital mortgage platform.
The Los Angeles-based company, backed by investors including Mark Cuban, the DJ Diplo, and hedge fund Mark 2 Capital, said on Tuesday it’s rolling out a new checking account product that reports all rent payments to credit agencies. The new feature, added to Dave’s original app, helps customers to build their credit. Dave plans to begin reporting utility payments later this summer.
With Marketrac Platinum, lenders and title companies can utilize the interactive platform to identify top performing real estate agents and brokerage firms to prioritize professional relationships based on market trends.
Sprout Mortgage, the innovative force in Non-QM lending, today announced the launch of its ACORN automated underwriting system (AUS) as part of an ongoing effort to deliver value-added services to its third-party origination clients.
Finicity announced today an integration with LendingQB. LendingQB’s platform now uses Finicity’s digital Verification of Assets (VoA) solution to allow lenders to free up resources, increase processing speed and reduce mortgage fraud while providing borrowers with a more efficient and positive experience.
Last week, three Capital One cardholders filed a putative class action in the Eastern District of New York, Cohen v. Capital One Funding, LLC,1 alleging that the rates of interest they paid to a securitization trust unlawfully exceed the sixteen percent threshold in New York’s usury statutes. The Plaintiffs seek to recoup the allegedly excessive interest payments and an injunction to cap the interest rates going forward.
Fundbox Tapped By Top B2B E-Commerce Software Provider OroCommerce to Power Net Terms (Fundbox Email), Rated: A
Cross River Bank, a Teaneck, N.J.-based bank that focuses most of its energy on supporting fintechs, is hiring several people from the student loan refinancing company Laurel Road to its capital markets team.
Cross River’s fintech partners include Affirm, Circle, Best Egg, Coinbase, Rocket Loans, Stripe, Upstart and Transferwise.
Optimisation platform Optimizely has closed US$105 million in financing, including US$50 million in Series D funding. The funding, led by Goldman Sachs Private Capital Investing, also included Accenture Ventures.
Quicken Loans Mortgage Services (QLMS), the second largest mortgage lender serving the needs of brokers, regional banks and credit unions, today announced that Austin Niemiec has been named Executive Vice President.
Self Lender is pleased to announce its inclusion in the inaugural list of winners of the Inclusive Fintech 50. The Inclusive Fintech 50 is a competition launched in February to help early-stage fintech companies attract capital and resources to benefit the world’s 3 billion financially underserved people. The competition was organized by MetLife Foundation and Visa Inc., with global nonprofit Accion and World Bank Group member IFC.
The early days of a company’s life on the stock market tends to set the tone for what follows. The grief around Funding Circle’s listing began even earlier and has continued to plague it.
Days before trading in shares of the specialist online lender began at the end of September, Funding Circle and its bankers were gunning for a valuation of up to £1.75 billion, only to be forced to narrow the expected range shortly before it came to market, and then to price the shares at the lower level of 440p apiece.
Three Biggest Overperformers And One Underperformer In Peer-To-Peer Lending (4th Way Email), Rated: AAA
Over £300 million lent.
Maximum loan size to property valuation (LTV) 80% – better than all the major high-street banks.
Average LTV: 72% – highly suitable for these kinds of mortgages.
Average rent: 190% of the monthly mortgage payment.
Over 90% of mortgages are to experienced and professional landlords.
Reserve fund: 0.6% of outstanding mortgages – modest but useful.
Type of lending: residential BTL.
Typical risk of this type of bank lending: very low.
P2P bad debts: none.
Interest rate: 3.54% after expected bad debts.
£65 million lent.
Maximum loan size to property valuation (LTV) 75% and investors can choose to limit to 50% – lower than all high-street banks.
Average LTV 60% – highly suitable for these kinds of mortgages and loans.
Minimum rent on rental properties usually 110% of the monthly mortgage payment.
Type of lending: residential and commercial rented properties up to five years; some development lending; a mix of senior and junior debt (junior means other lenders get repaid first if the borrower’s property has to be forcibly sold to repay the loans).
Typical risk of this type of bank lending: low to moderate for shorter-term rental properties; moderate to high for developments and junior debt.
P2P bad debts: none.
Interest rate: 7.32% to 9.43% after expected bad debts (7.32%-12.13% before bad debts).
£35 million lent.
Maximum loan size to property valuation (LTV) 70% and investors can choose to limit to 50% – lower than all high-street banks.
Average LTV 61% (against starting value of property) – very low for these kinds of loans.
Type of lending: property development lending.
Typical risk of this type of bank lending: moderate to high.
P2P bad debts: none.
Interest rate: 8% after expected bad debts (7.32%-12.13% before bad debts).
Rebuildingsociety – the Underperformer
£15 million lent.
Type of lending: unsecured small business lending to sub-prime.
Typical risk of this type of bank lending: moderate to high.
P2P bad debts: 17% of total lent in pounds
Interest rates: estimate an average 5% after heavy losses.
One-fifth of UK investors are increasing their exposure to debt amid low interest rates and Brexit uncertainty, according to research from FJP Investment, which found this number climbs to 34% when 18-to-35 year-olds are considered in isolation.
However, the independent survey – which comprises 950 investors – discovered 44% of participants are more focused on short-term debt investments over this financial year due to both political and economic uncertainty; this figure rose to 68% among under 35s.
London-based java developers lead the pack, commanding starting salaries of up to £60,000, followed by software developers in the capital on up to £55,000.
Intense competition between UK-based fintechs – lead by Revolut, TransferWise, OakNorth and Funding Circle – and high street banks attempting to upgrade their services has led to bidding wars in order to gain top level IT professionals, said the report called The UK Fintech Revolution.
A number of incumbent banks are known to be developing new digital-first products in a bid to keep the new wave of challenger banks at bay and now it appears that the latest to make that move is J.P. Morgan.
According to sources, the investment bank has begun recruiting for a secretive skunkworks project within London’s booming fintech industry. Very few details are known about what exactly J.P. Morgan plans to build, although TechCrunch understands the bank is busy hiring high level developers with full-stack and cloud-based dev skills for the new project, along with other personnel.
Over 60% of YRD’s FY 2018 revenues stem from “haircut loans” (P2P service fees charged to borrowers) that are prohibited by Chinese regulation. Recent developments in the P2P lending sector with regards to questionable lending practices, unethical collections, and usury are not being disclosed in YRD’s SEC filings, leaving U.S., Canadian, and international investors completely in the dark.
The Chinese P2P Lending Market
Unlike in developed countries, there are no administrative bodies (such as the U.S. Securities Exchange Commission) which regulate peer to peer lending exchanges in China. Instead, such services are regulated by self-organized internet associations and retail banks. The lack of meaningful oversight has caused the Chinese P2P lending market to bubble into $178.9 Billion in FY2018, almost 22 times the size of the P2P lending market in the United States and 447 times that of Japan’s.
A slew of Chinese fintech and peer-to-peer (P2P) lending platforms are looking to more lenient markets in Southeast Asia (SEA), following a prolonged industry crackdown in China that has left the sector reeling.
Over the past year, China’s regulatory clampdown on risky financial practices has wiped out more than half of the country’s P2P lending platforms. As of May, just 900 survived, down from almost 1,900 recorded a year ago.
In early June, Indian daily newspaper the Economic Times reported that Chinese fintech companies, including WeShare, 9F Group, and CashBUS, are exploring investment opportunities in the country’s burgeoning online lending sector, particularly in the P2P lending space.
When Stockholm studio Snask was approached by Klarna, one of Europe’s biggest banks, to help communicate how its revolutionary payment solutions make life easier for its customers, it set out to create seven “never-seen-before” worlds.
You might wonder why that is relevant as most readers are unlikely to be LHV Bank customers. LHV Bank is a bank in Estonia.
I think it is highly interesting, as it is – to my knowledge – the first time a bank has integrated p2p lending investments in its customer interface. So the LHV bank customers, not only see their accounts and stock depots, but also their Estateguru investments conveniently listed in their online bank dashboard. Much has been talked about what role could banks have in p2p lending (mere transaction banks? providing credit lines?) and also there is a lot of speculation if PSD2 (open banking) will help fintechs to seize the access to the customer from banks because they could control the user interface in the future. But this is actually a first step a bank takes in the opposite direction. By aggregating “non-bank” information inside the dashboard, they aim to make the banking interface more useful for the customers.
Klarna is the latest Buy Now Pay Later (BNPL) app to sweep through the world. Originating in Sweden, the BNPL platform allows users to purchase goods and schedule repayments in timeslots. At this point in time, Klarna is the first and only BNPL platform that’s available in the U.S. It’s also available in the UK, Denmark, Norway, Belgium and many other European countries.
In April 2019, the Australian Securities and Investments Commission (ASIC) released its third report on marketplace lending, the Survey of marketplace lending providers: 2017–18. The report paints a clear picture of a once-nascent industry enjoying growth with new borrowing increasing by nearly 45% in the 2017-18 financial year. The report notes that this growth is moderating compared to the near doubling in funds borrowed the previous year (from $156 million to $300 million). By contrast, the Australian Bureau of Statistics (ABS) reports that overall personal lending has declined by an astonishing 24% in the 12 months to March 2019.
The ASIC report found that the average interest rate charged for marketplace loans entered into during the 2017–18 financial year was 11.5%, up from 10.5% in the 2016–17 financial year.
Vinay Mathews, Founder and COO, Faircent and Sanjay Gakhar, Vice President, MCX talks about the benefits of investing via the P2P platform and Commodities, ET Wealth investment Workshop in Delhi Listen in!
Small companies in Asia-Pacific are tapping new funding sources, according to the Economist Intelligence Unit (EIU) study commissioned by Mastercard, with peer-to-peer (P2P) lending platforms in Indonesia reportedly posting USD1.4bn worth of transactions in 2018, an increase from USD20m in 2016.
News Comments Today’s main news: Kabbage expands into India. GreenSky launches loan product for elective health care. Lending Works hits 150M GBP in loans in five years. Ant Financial’s money market fund shrinks to two-year low. Ant Financial raised close to combined raise of all U.S., Europe fintechs last year. Varo Money raises annual percentage yield on savings accounts to […]
Review of SoFi Money. I, too, signed up for a SoFi Money account, though I haven’t funded it yet even though I’ve been taken off the waiting list. This is an excellent review, and I agree with the conclusion that digital banking is at the earliest stages of mass adoption. There have been several challenger banks in Europe. The U.S. has been reluctant to adopt digital banking alternatives, but SoFi Money is likely one of the contenders to change that.
Kabbage expands into India. Kabbage is the first U.S.-based lender to enter India. This is significant, and given Kabbage’s reputation in the U.S., this move positions the company to do great things in India.
The Atlanta fintech on Tuesday announced the launch of a revolving credit line of up to $25,000. GreenSky previously offered only installment loans; the new product is designed to be a better fit for elective medical providers that rely heavily on repeat business.
There are three main benefits that SoFi touts with the SoFi Money account:
Pay zero account fees.
Earn more interest.
Free ATMs everywhere.
SoFi will pay (as of this writing) 2.25% on balances held in a SoFi Money account. Note about the small print: you will only earn this 2.25% for the first three months and then the interest rate drops to a (still respectable) 1.25% unless you do one of two things. Either setup a salary direct deposit of $3,000 or more a month or do $500 in debit card transactions each month. I am in the process of moving my salary deposit to my SoFi Money account.
The cash balance in SoFi Money Accounts is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. FDIC Insurance is not provided until the funds arrive at partner bank. There are currently six banks available to accept these deposits, making customers eligible for up to $1,500,000 of FDIC insurance (six banks, $250,000 per bank).
Credit card master trust data shows that delinquencies have picked up from their lows but remain significantly below their peaks. Issuers (with the exception of Capital One), have increased loan loss reserves at a rate higher than loan growth as credit renormalization continues.
30 and 90-day delinquency rates from credit card master trust data
In the years after the financial crisis, small businesses that needed credit were stuck. New capital rules discouraged big banks from touching any borrower perceived as risky. The bond and loan markets, where larger businesses flocked for inexpensive debt capital, have little use for sums under $100,000 — which is what most small enterprises need.
A handful of non-bank lenders, payment and e-commerce companies have leapt into the gap. In an environment of easy money and economic expansion, small business lending operations at OnDeck, Kabbage, PayPal, Square and others have grown fast.
Managing existing debt is far and away the most popular reason for a personal loan, representing 61 percent of all loan requests in 2018. Thirty-nine percent of borrowers plan to use their loans to consolidate debt, and 22 percent plan to use it to refinance credit cards.
Consumers seeking personal loans to manage debt also requested the highest origination amounts: $14,107average amount for credit card refinance, and $12,670 for debt consolidation.
Almost 15 percent of loans reasons are categorized as “other” — the third most popular choice. Home renovation and improvement loans are the next-most popular loan purpose, accounting for 7.7 percent of loan requests with an average loan amount of $12,384.
New Englanders are the most likely to use their loans to manage existing debt, taking the top five spots. The residents of Mississippi, Louisiana, and Arkansas are the least likely.
Washington, D.C. is home to the highest rates of a few offbeat loan purposes, with more residents requesting loans here for a move (7.4 percent) or business (2.6 percent). It’s also tied with New York and Louisiana as the place where wedding loans are most requested, with 1.5 percent of loans in these states intended to cover the costs of tying the knot.
West Virginia is the top state for borrowers requesting loans for their home, specifically home improvements (8.6 percent of loans requested in this state) or home buying (4.9 percent).
In Wyoming, residents request personal loans for medical expenses more than anywhere else (6.5 percent). In fact, most of the states where people are more likely to request a loan for medical costs are low-density states with more rural areas.
Cities with shorter housing tenure have greater price appreciation. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12%. The bottom 10, with an average tenure of 6.63 years, have average price appreciation 30%. This suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing home owners to sell.
The northeast dominates the list of cities with the longest tenure. The top three cities, Pittsburgh, New York and Buffalo are all in the northeast. An additional three northeastern cities are in the top 10 for a total of six.
Hot and sunny places have the shortest tenures. The three cities with the shortest tenures — Las Vegas, Phoenix and Austin — are all in warm-weather areas. This reflects high migration rates to those cities, something we looked at in a prior study on where Americans are moving. Denver is the only city in the bottom 10 that experiences a significant winter season.
dv01, a New York-based startup, has raised $15 million in a series B round led by Pivot Investment Partners, a venture capital firm started by a a trio of bankers who worked together at Deutsche Bank AG. One of those ex-bankers, Dinkar Jetley, will join dv01’s board.
Atlanta-based Kabbage Inc. has hired the chief marketing officer at LegalZoom as its new chief revenue officer.
Laura Goldberg‘s appointment is effective immediately, according to a Kabbage spokeswoman. She succeeds Victoria Treyger, who vacated the CRO position at Kabbage in August 2018 to accept a position with Felicis Ventures.
In a move to make high-yield savings available to more Americans, no-fee mobile banking company Varo Money, Inc., announced today that it raised the Annual Percentage Yield (“APY”) on its FDIC-insured Varo Savings Account to 2.80% for customers whose Savings Account balance is $50,000 or less, and who have qualifying direct deposits and debit card purchases from their Varo Bank Account.1 An APY of 2.12%1 will apply if these conditions are not met.
Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that its largest consumer product, RISE, will offer college scholarships in an effort to promote financial literacy.
The RISE scholarship will offer five $5,000 awards each year to students who demonstrate a desire to improve their financial knowledge and educate others on personal finance. To be eligible for the scholarship, students must complete an online financial literacy course that was developed in partnership with digital education expert EVERFI.
As more banks take the often risky step of expanding outside their traditional markets, especially through digital means, some fintechs sense an opportunity to offer them data they need to find new customers and assess risk.
LendingClub, OnDeck Capital and Lending Tree are each online lending platforms that have bet on this trend. CrediFi, a finance data provider, aims to do the same with a focus on one of the largest asset classes around: commercial real estate.
San Francisco-based digital banking service Oxygen has raised $2.3 million in funding to breathe life into its gig economy plans.
In this round it got funding from Digital Horizon Capital; Cynthia Chen, investor, advisor, executive and board member for several US-based fintechs and now co-founder and chief risk officer at Figure; ZMT Capital (China); Locus Ventures; Endure Capital; PioneerFund; Magic City; Light Bridge; Strawberry Creek; Base Ventures; The House Fund and Sam Yam, co-founder of Patreon.
Better Mortgage, one of the leading digital mortgage lenders in the U.S., today announced its closing of $70 million in Series C financing from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP), in addition to existing investors Kleiner Perkins, Goldman Sachs, and Pine Brook. The new capital will support continued growth and investment in Better’s technology platform.
On January 25, 2019, the Consumer Financial Protection Bureau (CFPB) announced that it had entered into a consent order with an online lender that extends unsecured payday and installment loans, as well as lines of credit, resolving allegations that the lender had engaged in unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. §§ 5531, 5536.
Betterment, a digital wealth manager popular among millennials, has picked Philadelphia for the first office outside its New York home base.
The company, which manages $15 billion in assets, plans to open a Philadelphia office as soon as February, according to founder Jon Stein. Betterment is looking for office space in Center City, with the intent of adding 20 employees in its computer and engineering departments by the end of 2019.
Numerated announces that it will integrate PayNet’s MasterScore v2 within its real-time lending and growth platform. PayNet, a leading commercial lending data and analytics firm, will integrate its proprietary database within Numerated’s customizable rules- and segment-based credit decisioning engine to offer banks additional business scoring criteria for managing risk when lending to businesses in real-time.
Planet Home Lending, LLC opened 26 active distributed retail branches and brought on 165 mortgage loan originators in 2018. Planet Home Lending also enjoyed additional growth in 2018 in its other channels.
Guaranteed Rate is building a winning team to reinvent the mortgage experience through innovation, technology and a relentless focus on providing industry-leading mortgage products and superlative customer service. The Senior Counsel will embrace and support these efforts by working to pursue claims and resolve disputes as appropriate through negotiation, arbitration or litigation, with a particular focus on employment claims and matters.
UNSECURED consumer lending has slowed to its lowest level since 2014, as Brits scale back their spending amid Brexit uncertainty.
The latest Bank of England Money and Credit statistics also found that the total number of mortgage approvals fell from 126,794 to 124,829 in December 2018, indicating an overall lag in the lending market.
Meanwhile, mortgage approvals for house purchase were around 63,800 in December – just slightly less than the 2018 average of 65,200.
Online borrowing should be all about convenience, and Loanski loans have made this aspect their rising pillar for excellence. The only requirement for one to apply for a loan through the platform is they must be United Kingdom residents and have an active bank account. These minimum requirements essentially mean that anyone who uses their bank accounts frequently can have the pleasures of having an instant loan when they need it the most.
The world’s largest money-market mutual fund, Ant Financial’s Tianhong Yu’E Bao, was at its smallest for two years by the end of last year as Chinese regulators pressured it to downsize over concerns about systemic risk.
The shrinkage is a sign that Ant, the financial services business of Alibaba Group, is shifting away from marketing its own financial products to serving as a platform for other groups to access its huge customer base.
Chinese police investigated more than 10,000 cases of illegal fundraising last year, a 22 per cent rise in the caseload, according to China’s top prosecutors.
The total amount involved also rose, more than doubling to about 300 billion yuan (US$44.5 billion), the Supreme People’s Procuratorate said on Wednesday.
Apart from traditional hotbeds such as product marketing, real estate investment, and education, there has been a big rise in fundraising schemes in online lending, wealth management, private equity, cryptocurrency, and elderly care services.
Europe’s fintech companies are getting serious about the possibility of a no-deal Brexit.
As uncertainty looms over the U.K.’s split from the EU, the industry gathered this week at the Paris Fintech Forum. Payments providers, cryptocurrency exchanges and digital banks all said they were taking steps to prepare for the worst-case scenario.
N26 is a Berlin-based digital bank that was recently named one of Europe’s largest fintech start-ups.
Synsam Group has over 50 years of experience in improving people’s eye health and is today Sweden’s largest optician chain with over 190 stores in Sweden, and 500 stores throughout the Nordic region. One of the company’s most popular services is Synsam Lifestyle Contact Lens Subscription, which includes home deliveries and annual contact lens examinations. To create a better and smoother customer experience, Synsam Group and Klarna have developed a new concept that allows customers to subscribe to contact lenses by using their mobile phones instore, while they can manage all the administration around the subscription online.
When it comes to financial technology companies, Ant Financial is in it own league. The affiliate of e-commerce giant Alibaba raised $14 billion in venture capital last year, not far from the $15.9 billion for all fintech investments in the EU and US in the same period. A key question is whether the growth of the world’s most valuable fintech firm is an anomaly or a sign of things to come from China.
Ant Financial accounted for 35% of global venture capital investment in fintech firms last year, according to CB Insights.
Cross River Bank (“Cross River”), a leading innovator and provider of banking services for financial technology companies, and Railsbank Technology Limited (“Railsbank”), a leading UK-based open banking and RegTech technology services platform, today announced that they have entered into a partnership arrangement that will provide Railsbank the opportunity to offer a variety of API-powered, banking and payment processing services across the U.S.
In the last three months of the year, five companies joined the coveted ranks of fintech “unicorns”, or companies valued at more than $1 billion. These include credit card provider Brex, digital bank Monzo and data aggregator Plaid.
The South Australia Home Battery Scheme, launched by the state government, offers a maximum of AU$6,000 assistance per household for the purchase of battery energy storage. Home storage systems are typically, but not always, paired with solar PV, and homeowners can get back between AU$500 and AU$600 per kilowatt hour of battery storage capacity purchased.
As of the end of the last financial year, we have a register user base of more than 107 Mn users and a network of over 3 Mn merchants. We are aiming at 400% growth this fiscal. We are aiming at 400% growth this fiscal. We are adding over 3 Mn new users every month, one of the highest in the industry. We will have close to 200 million users by the end of 2019.
A) Lending is growing by leaps and bounds ever since we started out. The opportunity is huge with less than 10% of Indians having access to credit.
Gurgaon-based StreamSource Technologies, a decentralized marketplace for loans, has raised $1 million in seed funding from Accel India, making it Accel’s first local investment in the blockchain sector.
A group of 11 Indian banks have teamed together to unveil the nation’s first blockchain-linked funding for SMEs.
According to the Economic Times, the participants include ICICI, Axis, HDFC, Kotak Mahindra, Yes Bank, Standard Chartered, RBL, South Indian Bank, IndusInd Bank, State Bank of India and Bank of Baroda.
“Borrowers on our platform are given a score out of 100, which determines their risk profile. A score of 52 to 60 points is high risk while a borrower with more than 60 points will get a lower interest rate,” says Bhavin Patel, Founder & CEO, LenDenClub.
P2P lending or peer-to-peer lending is a mode of direct debt financing that enables individuals to borrow and lend money on mutual terms. Platforms like IndiaMoneyMart (IMM) eliminate the traditional financial institutions and enable businesses to flourish through a people to people contact.
“While a great boost to the P2P industry would be via the regulator easing lending caps, we look forward to a critical role from the finance ministry for better financial inclusion by extending SOPs to retail investors,” says Dhiren Makhija, CEO, Cashkumar.
Digital marketing strategist Abhinav Kumar who shot to fame because of his appearance on television commercials of travel search engine Trivago has joined peer to peer lending platform Paisadukan as a digital marketing and branding advisor and also will be on the company’s advisory board.
The country’s growing peer-to-peer (P2P) lending sector has become one of the most complained about business sectors partly because of high interest rates and aggressive debt collection practices, according to a report.
The report by the Indonesian Consumers Foundation (YLKI) shows online lending platforms are the third most complained about business sector while property and banking rank second and first respectively.
News Comments Today’s main news: Upgrade completes $282M securitization. KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-4 Trust. Funding Circle backs Just a Card. Monzo raises 85M GBP. Lendix changes name to October. Today’s main analysis: Which cities are spending within their means? Today’s thought-provoking articles: Total student loan balances by age group. Which cities are spending within […]
Upgrade, Inc., a consumer credit platform that offers affordable personal loans and personal credit lines with credit monitoring and education tools that help consumers better understand their credit, announced today it closed its inaugural securitization of personal loans. Upgrade Receivables Trust 2018-1 (“UPGR 2018-1”) issued approximately $282 million in notes to nearly 20 banks and asset managers.
This transaction marks the inauguration of Upgrade’s securitization program, designed as a quarterly issuance program. Credit Suisse and Jefferies acted as joint lead underwriters, and Upgrade served as sponsor, servicer and administrator for the transaction.
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-4 (“SCLP 2018-4”). This is a $549.00 million consumer loan ABS transaction.
Initial credit enhancement levels are 37.29% for the Class A Notes, 29.29% for the Class B Notes. 17.96% for the Class C Notes and 8.96% for the Class D Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A Notes, Class B Notes and Class C Notes), excess spread and a reserve account funded at closing.
SoFi’s ads boasted that its products led to people saving more than $20,000 on average. But, in its calculations, the company excluded student loan borrowers for whom refinancing resulted in a longer, and sometimes more expensive, repayment timeline than they had held prior, according to the FTC.
LendingTree today released its study on where Americans are spending within (and beyond) their means across the U.S.
To determine where people can afford their financial obligations, LendingTree analysts combed through anonymized credit report data of My LendingTree users from August 2018 and compared it to the average household income from the latest U.S. Census Bureau data. The ranking of the 50 largest metro areas factored in data such as the number of credit inquiries from the past two years, the use of revolving credit lines, non-housing debt and mortgage balances.
It may come as a surprise, but some of the most expensive U.S. cities have residents living within their budgets, suggesting that higher education and greater income may be the most salient factors for living within your means.
San Jose, Calif. (Silicon Valley), San Francisco and Raleigh, N.C., top the list for cities in which people are living within their means. High incomes help residents of San Jose and San Francisco pay their bills (despite exceptionally high housing costs), while a modest mortgage-to-income ratio gives Raleigh a big boost.
Residents of San Antonio, Riverside, Calif., and Las Vegas are struggling to meet their bills. Previous studies have shown that people spend a lot on vehicles in San Antonio, incomes are very low in Riverside and unemployment runs high in Las Vegas.
Popular Bank in New York has contracted with Biz2Credit to use its software for automating commercial loan approvals and to outsource the underwriting of certain small-business loans — a move that is part of a broader effort among banks to better compete with online lenders.
The $9.5 billion-asset Popular Bank started using the loan software earlier this month, said Rohit Arora, the CEO of Biz2Credit, an online marketplace that connects lenders and small businesses seeking credit.
Financial terms of the contract were not disclosed.
TV personality Montel Williams and a payday loan website he endorsed do not have to face racketeering charges for allegedly marketing illegal payday loans, a federal judge in California ruled on Tuesday.
U.S. District Judge Jeffrey White in Oakland granted a judgment in favor of Williams and online firm MoneyMutual, saying borrowers suing them failed to show that they participated in coordinated activity to commit fraud, as required for claims under the U.S. Racketeer Influenced and Corrupt Organizations Act.
The ranks of challenger banks offering financial products and services to small businesses are growing.
But what do these firms offer that banks don’t or won’t?
In interviews, several executives argue that they make the process easier and more user-friendly. Loans can be approved quickly and digitally and challenger banks say they can provide a better customer service experience than traditional institutions.
Strong mobile apps
Only 52% consider their bank’s mobile banking solution to be satisfactory, according to Javelin surveys.
Cred, the leading provider of crypto-backed lending with over $250 million in credit facilities, today announced the addition of three executive team members. Maxim Rohkline joins as Chief Product Officer, James Alexander joins as Chief Capital Officer, and Richard Oh joins as GM of Asia. Each executive brings a 20+ year proven track record of financial technology innovation, spanning capital markets, online lending, payment systems, risk management, and analytics.
Factual Data, one of the nation’s premier providers of credit and data verification services to lenders nationwide, today announced an integration of its credit reporting capabilities with LendingPad (www.lendingpad.com), a leading provider of loan origination software headquartered in McLean, VA.
This integration allows clients to order tri-merged credit reports directly from Factual Data. Credit reports are merged in LendingPad’s document management system and liabilities data is updated in real time. The integration is available to all LendingPad users and will automatically populate credit information into the platform.
White Oak Commercial Finance, a division of White Oak Global Advisors, today announced the appointment of Robert Dean to Managing Director of Risk Management for ABL and Factoring. Mr. Dean joins from Wells Fargo Capital Finance, where he served as Senior Vice President and Regional Sales Manager responsible for sourcing and structuring asset-based financing for middle-market companies with credit needs ranging from $5 million to $40 million.
FUNDING Circle has teamed up with small business campaign group Just A Card to provide an alternative to the annual Black Friday shopping event.
The peer-to-peer business lending giant will help promote the Just A Card campaign – run by artists, designers and small business owners – to encourage people to shop locally in the run up to Christmas.
The joint campaign will take place during Just A Card Indie Week on 19 November, the week before Black Friday where bigger retailers hold sales.
Monzo, the U.K. challenger bank that now boasts more than a million customers, has raised £85 million in Series E funding. The round is led by U.S. venture capital firm General Catalyst and Accel. Existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe also participated.
The latest funding was at a pre-money valuation of £1 billion (~$1.27b), meaning that Monzo is now a bona-fide member of the U.K. fintech unicorn club, joining recent entrant Revolut.
Meanwhile, the bank upstart is also planning to launch a large crowdfunding round later this year. Like a lot of other fintechs — and before it was fashionable — Monzo has historically opened up its fundraising to its passionate community and other armchair investors.
iwoca, one of Europe’s fastest growing small business lenders, has today successfully released Open Banking for all new customers with a Lloyds Bank account. The company becomes the first ever business lender to connect with any of the UK’s nine largest banks under the Open Banking initiative, launched in January 2018.
By securely linking their Lloyds Bank data, business owners can now provide iwoca up to five years of transaction history with a few quick clicks of a mouse. This speeds up the lender’s already swift application process even further for Lloyds customers, reducing the time they spend submitting bank information to less than 60 seconds.
Small businesses (SMBs) left behind by their banks, thanks to tightening risk and capital requirements post-financial crisis, certainly left a gap in the SMB lending market that alternative and marketplace lenders rushed to fill. In the U.K., support for FinTech, as well as challenger banks, to boost competition in the small business lending market is driven by the oft-repeated conundrum for this industry: small businesses are more complex than a consumer, yet not as lucrative as a large enterprise, and are, therefore, unattractive borrowers to traditional, large lenders.
With a growing community of alternative finance (AltFin) players, banks have taken to either letting AltFin handle filling the small business lending gap or partnering with and acquiring those FinTech firms to retain their SMB customers. Yet, a gap remains. While the Goldilocks Conundrum offers a simple explanation as to why, a deeper dive into the issue of small business bank lending reveals a far more complex issue.
According to OakNorth Analytical Intelligence, both large banks and alternative FinTech firms are struggling to overcome the challenges of SMB lending, and it often comes down to data. Amir Nooriala, COO of OakNorth, said that to underwrite an SMB loan, financiers have to take in and analyze unstructured data.
China’s online peer-to-peer (P2P) lending industry will grow at an estimated annual growth rate of 30% to 40% after the government’s tightened regulations weeding out bad and small players in the following two to three years. That’s the projection of Kevin Zhang, chief financial officer of X Financial, a Chinese P2P lender that completed a listing in New York two months ago.
The news was leaked last week. Now it’s official. From its Paris headquarters, Olivier Goy, founder and CEO, announced that the European lending marketplace formerly known as Lendix is changing its name into October. With this name change the company reasserts its ambition to expand both into new geographies and new products.
Why October? Among other things, the name celebrates the 4th anniversary of the company founded in October 2014. But more importantly, it is better suited to support the company’s international ambitions. Earlier this year, Lendix / October raised €32 million to fuel its international expansion. The marketplace already operates in four countries: France, Spain, Italy and the Netherlands where it has helped finance more than €230 million worth of SME loans. October as a name is easy to understand, to remember and to spell in most languages.
Another important reason behind the name change is that October as a name frees the company from an exclusive association with the lending category. We can expect more announcements soon. A banking license? Bonds retail? An equity platform? We can expect the unexpected from October.
Ireland’s first online peer-to-peer lending platform for property investors went live yesterday.
Property Bridges is targeting investors who are finding it difficult to secure a loan from a bank, or who need funding relatively quickly, with people able to invest in projects with as little as €500.
Marc Rafferty – who was also an investor in the SME peer-to-peer lending platform Linked Finance – is one of the Co-founders of Property Bridges.
Several factors were taken into account to establish this ranking, including the amount raised on average over a year or the degree of innovation of their products or services.
24. N26 – Offering a mobile banking app that operates without a single physical branch, N26 is expecting to enter the US market in the first quarter of 2019 — the company is a new entry in this year’s ranking.
22. Monzo – Monzo, a new entry to the list, is a digital bank focused on building the best current account in the world.
19. Klarna – Klarna is a leading European provider of e-commerce payment options that distinguishes payers from buyers — the company came 14th in last year’s ranking.
5. SoFi – Social Finance Inc. is an online finance company that provides lending products, such as student loan refinancing, mortgages, and personal loans — SoFi came 11th in last year’s ranking.
1. Ant Financial – Ant Financial Services Group is dedicated to using technology to bring the world equal opportunities.
Their technologies, from blockchain and artificial intelligence to security, the Internet of Things and computing, have helped Ant Financial to “serve the unbanked and underbanked”.
BlockFi, a blockchain-based platform backed by Galaxy Capital, is taking its lending services to the global market.
The primary objective of BlockFi is to provide incremental liquidity for clients in the cryptocurrency space. Recently, the company expanded its customer service team to onboard Spanish and Mandarin speakers. In Q3 2018, half of the traffic on the BlockFiwebsite came from users residing outside the US. These foreigners were also responsible for 33% of loan applications on the platform.
An extra AU$100 million (US$70.76 million) of funding could be put into a rebate scheme for households buying energy storage systems in South Australia, after a peer-to-peer lending group stepped in.
Peer-to-peer lending company RateSetter has agreed to finance the sum as part of the South Australian government Home Battery Scheme, which has committed to granting 40,000 households in the state up to AU$6,000 each in subsidies towards the purchase of batteries for use in home solar-plus-storage solutions. The Home Battery Scheme also allows households to finance the unsubsidised remainder of the cost, as well as rooftop solar. Launched in September, the scheme is partly motivated by the need to help manage peaks in energy demand on the state’s grid network.
Xinja, which is building a 100% independent digital bank, or ‘neobank’ for mobile, (subject to it receiving a banking licence) is adding significant global expertise to its organisation with the announcement that Brett King will act as a permanent advisor to the Board, and help guide Xinja’s strategic direction.
Brett King founded neobank Moven in 2011, which launched the world’s first mobile, downloadable bank account. He is widely considered the most influential expert on retail banking innovation globally.
Many investors get excited the moment they hear that P2P lending can earn them higher double-digit returns. However, the very next moment they would ask: what happens if the borrower defaults? How do P2P companies handle such defaults.
To begin with, P2P companies assess the financial footprints of the borrower through different sources as per their own credit evaluation system. “We try to ensure that loans are advanced to genuine customers with a structured credit evaluation process. Usage of alternate data also helps in refining the process to gauge the intent of a customer,” says Dhiren Makhija, co-founder and CEO, Cashkumar.
Pramod Akhramka, Founder and Managing Director of OML P2P has been elected as the President of the newly formed association of NBFC P2P Platforms. Rajiv Ranjan, Founder of PaisaDukan has been appointed as the Secretary and Mukesh Bubna, Founder of Monexo has been elected as the Treasurer of the association.
To represent the NBFC-P2P lending industry at international forums, existing and new players in the industry has formed an association of NBFC P2P Platforms.
DISRUPTIVE technology evolution has made a wide impact to global economies, the very first forefront business that feel this in both positive and negative way is financial service industry.
Due to the nature of business has been digitised and operated both locally and internationally when conduct business transaction and service. In this “global-digitisation” context, financial service firm must excel how to harness these technologies to improve efficiency and enhance customer experiences. New tech and fin tech in particular, have been increasing adopted by not only financial industry but also other businesses as well. This promote the collaboration and interdependency within and outside of the industry.
News Comments Today’s main news: Zuckerberg, Bezos, Gates back Wagestream. Funding Circle plans 300M GBP IPO. P2P lenders take in 300M GBP in second year of IFISA. Hong Kong receives 29 bids for virtual bank licenses. Today’s main analysis: Does fintech has a vicious funding circle? Today’s thought-provoking articles: Samir Desai discusses Funding Circle’s IPO as plan to […]
Samir Desai on Funding Circle’s IPO as a path to conquer America. This is an excellent article with a lot of detail and critical perspective. It discusses more than Funding Circle and UK lending. There is also much to say about international competition, including China, U.S., Asia, and the rest of Europe. A great read.
There are fintechs, and then there are fintechs. Cheerleaders point to payments startups like Jack Dorsey’s Square Inc., whose stock has soared 242 percent in a year, as evidence of a Silicon-Valley-style revolution in the making. But there are sob stories, too: loan platforms LendingClub Corp. and On Deck Capital Inc. are still trading well below their IPO prices. Promises of break-neck expansion often crash into the reality of regulated finance.
We remain in the late stages of the credit cycle. The US consumer has benefitted from record low unemployment, rising incomes and home prices, and a lower tax rate. The supply of credit and competition to offer loans is increasing. Lenders are optimistic about consumer spending and debt levels, and are reserving for potentially higher losses in the future.
We see divergent credit performance across FinTech asset classes. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. LendingClub also increased its charge-off estimates across loan grades by ~40 bps QoQ.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. Loan loss provisions are increasing at roughly twice the rate of loan growth across card issuers, but overall reserve levels are still low.
Scratch Introduces First Loan Servicing Platform To Align Financial Interests of Lenders and Borrowers (Scratch Email) Rated: A
Scratch, a new financial technology company started in 2015 to transform the antiquated business of getting America’s $13 trillion household debt repaid, introduced the first loan servicing platform to align the financial interests of lenders and borrowers.
The Scratch loan servicing platform empowers borrowers with a simple web application for understanding, managing and paying back their loans while providing lenders accurate, real-time portfolio insights. And, by automating the back-office complexities of loan management, Scratch can devote more resources to giving borrowers the attention and guidance they deserve.
Loan Servicing Crisis Persists
U.S. household debt composed of mortgages, student loans, auto loans, credit cards, home equity lines of credit, and other consumer loans, is at an all-time high and growing daily.
Today, household debt is at a high of $13 trillion and 8 out of 10 Americans carry some type of debt, including mortgages, credit cards, student loans, and auto loans. And everyone who has a loan has a loan servicer.
Funding Circle has announced plans to become the first of Britain’s new generation of financial technology companies to go public, in a deal expected to raise £300m and value the peer-to-peer lender at more than £1.5bn.
The initial public offering of Britain’s biggest peer-to-peer lender will provide a significant test of investor appetite for the breed of fintechs that have sprung up in the past decade to challenge high-street banks. Funding Circle has arranged £5bn of loans to small companies in the UK, the US, Germany and the Netherlands since its launch in 2010 by connecting businesses looking to borrow money with retail and institutional investors willing to lend them money.
However, the company’s prospective value of more than £1.5bn is above the current value of US-listed peers OnDeck and Lending Club, which have both suffered tumbling share prices since their lPOs.
FUNDING Circle has said it expects its existing investors will be able to become shareholders in the company after it goes public.
Funding Circle said that its initial public offering (IPO), if it goes ahead, would aim to raise around £300m, with at least 25 per cent of the company’s issued share capital to be placed on a free float.
In a blog post on its website, also on Monday, the P2P lender said that its customers would have the opportunity to apply to participate in the IPO and become a shareholder in Funding Circle via an intermediaries offer.
Given that Funding Circle’s flotation comes just days after the collapse of that other trailblazing fintech, Wonga, it’s hard not to compare the two.
Both were launched to fill the gaps in the lending market where traditional banks feared to tread. Both used tech wizardry to check they were lending to the right people at the right price. Both brilliantly deployed digital technology to make their services simple and fast to use.
Hopefully, for future investors, the similarities end there.
UK sub-prime investors are shrugging off Wonga’s cloud. Customer complaints and a regulatory clampdown forced the payday lender to stop making loans. The likes of Amigo Holdings and Non-Standard Finance have different models, and regulators’ blessing. Yet, with Wonga out of the picture, they too risk becoming the focus of public ire.
Investors love it. Amigo’s return on equity will be around 40 percent this year, using Thomson Reuters I/B/E/S, while it and Non-Standard Finance should grow revenue on average by more than 20 percent each year up to 2021, analysts reckon. NSF, which has a more diversified business including unguaranteed loans, is valued at over 17 times forward earnings. Amigo’s shares were priced at 12 times forward earnings even after a selloff promoted by disappointing results on Thursday. The consumer finance sector on average trades at less than 11 times forward earnings, according to Eikon.
Stuart Law, who heads up the business P2P lender, warned that the strong take-up of the IFISA could be hampered by the FCA’s proposed marketing restrictions for the sector.
Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P agreements.
The company shifted its headquarters to Hong Kong from Melbourne earlier this month as it prepares to submit a virtual banking license application, along with partners, ahead of Friday’s deadline.
Airwallex co-founder and chief executive Jack Zhang said the company will team up with a traditional bank and other local partners as part of the application process, although he declined to reveal their identities.
Another reason for the relocation to Hong Kong is proximity to major clients, including Tencent, online travel operator Ctrip, e-commerce JD.com as well as traditional lender Bank of East Asia.
And Beijing’s crackdown on the peer-to-peer lending sector – the shadow banking system that saw rampant illicit and risky behaviour continue in the first half of this year – has helped increase demand for corporate lending levels too.
First-half earnings showed the lenders rallying after several years of low growth. Collective net profit rose 5.7% year on year to 532.1 billion yuan ($77.9 billion), while the lenders’ average ratio of bad debt fell 0.06 percentage point in six months to 1.52% at the end of June.
Today Instantor, the Swedish fintech company making financial decisions easy, announces, WDSK, The World Domination Starter Kit. The WDSK is an initiative to support start-ups and scale-ups to develop next-generation products by giving them access to Instantor´s Bank API with no associated costs for new Instantor customers. By using Instantors bank API, developers will have access to transactional data from over 300 banks in 25 countries, with the potential to reach half a billion people. Instantor´s bank API has an unrivaled reach, and the WDSK initiative includes access to several markets outside new Open Banking legislation. The authentication and the end user’s interaction with banks are handled by Instantor, and the data can be accessed once the end user has given their consent.
The analyst suggested robo-adviser may be ahead of their time, given high net-worth demand for robo-advice is on the rise among the next generation of investors.
“While robo-advice is here to stay, it will take time to cement itself. The digitally-savvy next generation will embrace an automated service and big banks should capitalize on this. However, a big brand is not enough to justify much higher fees,” Woldemichael said.
To succeed, incumbents will have to provide a level of service, and prices, that are genuinely competitive with those offered by startups.”
The collapse of Wonga, one of Britain’s most high-profile fintech lenders, provides salient lessons for Australia, which considers the UK a template for financial technology policy and where tighter laws to protect vulnerable customers from payday lenders appear to have stalled.
Wonga, built around a slick app allowing customers to get expensive loans via their mobile phone, was “notorious for its extortionate interest rates and was a toxic symbol of Britain’s household debt crisis”, said The Guardian last week.
The payday lender “failed because it was too greedy and at times crossed the ethical line”, it said, quoting prominent UK financial columnist Martin Lewis, who described Wonga’s loans as “the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive”.
Her heartfelt story was told at Good Money’s one-year anniversary last week during what Carol described as a “life-changing event” after borrowing money to buy essential appliances like a new fridge and washing machine.
The low to no-interest lender was set up in July last year in partnership with Good Shepherd Microfinance and the National Australia Bank, following a $2.3 million investment from the state government.
More than 2900 people made enquiries in the hub’s first year, and the store has provided more than 500 no and low-interest loans for household appliances, car-related expenses, household furniture and costs such as medical and education expenses.
SlicePay, a digital lending platform which caters to college students and young professionals, has raised an undisclosed amount in an extended Series A round of funding led by Chinese firm FinUp Finance Technology Group.
The company said in a statement that existing investors Blume Ventures, Japan’s Das Capital, and Russia’s Simile Ventures had also participated in the round.
A person close to the development who did not wish to be named pegged the deal at $14.9 million (around Rs 105 crore at current exchange rates).
Having recently raised what is estimated to be the largest Series B funding round for a fintech firm in Southeast Asia, Indonesia-focused lending platform Kredivo says the process was far from smooth sailing.
The company was forced to look beyond the region to raise the majority of its fund, as it found that there were simply very few investors in the region that specialized in doing Series B investments.
Tel Aviv University is among the top ten global undergraduate programs in terms of producing venture capital-backed entrepreneurs, according to a report published last week by Seattle-based market research company Pitchbook. Pitchbook ranked Tel Aviv in eighth place, up from ninth last year, above Yale, Princeton, and Brown.
Two other Israeli universities made the top 50 list: the Technion-Israel Institute of Technology came in at 14, while the Hebrew University of Jerusalem placed at 35.
News Comments Today’s main news: Elevate Credit expected to announce $203.49M in sales. Ant Financial delays IPO again. SocietyOne getting close to $500M in total lending, six years in. ClearScore to offer credit scores in India. Capital Float buys Sequoia and Walnut. Today’s main analysis: 10 years after financial crisis, credit market on upward curve. Today’s thought-provoking articles: New […]
Equities research analysts forecast that Elevate Credit Inc (NYSE:ELVT) will post $203.49 million in sales for the current fiscal quarter, Zacks reports. Two analysts have issued estimates for Elevate Credit’s earnings, with estimates ranging from $201.00 million to $205.97 million. Elevate Credit reported sales of $172.85 million during the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The firm is expected to report its next quarterly earnings report on Monday, October 29th.
According to Zacks, analysts expect that Elevate Credit will report full-year sales of $803.23 million for the current financial year, with estimates ranging from $801.00 million to $805.45 million. For the next financial year, analysts expect that the company will report sales of $927.09 million per share, with estimates ranging from $926.97 million to $927.20 million. Zacks’ sales calculations are a mean average based on a survey of research firms that follow Elevate Credit.
Ten years after the biggest financial crisis to hit the United States since the Great Depression, much has changed in the consumer credit marketplace. Serious delinquency rates have recovered since that period, and the credit quality of consumers has broadly improved. Yet the crisis has had a profound effect on consumer access to credit and the relationship they have with it.
TransUnion’s (NYSE:TRU) just-released Q2 2018 Industry Insights Report allows for comparisons between Americans’ credit preferences today versus 2008, specifically in the auto finance, credit card, mortgage and unsecured personal loan markets.
Rep. Emanuel Cleaver (D-Mo.) released a report Friday detailing the lending practices of some prominent fintech companies, finding that some companies could be discriminating against minorities and calling for more transparency from the fintech sector.
Fintech companies are somewhat controversial because many engage in traditional banking practices, and some consumers and regulators are calling for them to be regulated like traditional banks.
The modern banking customer wants advanced online and mobile banking options, and delivering such services requires even the smallest community bank to get a handle on customer data, said Corey LeBlanc, chief technology officer and vice president at Origin Bank.
Building Block, Inc. announced today it is the first North American REIT (Real Estate Investment Trust) to embrace the emerging efficiencies of blockchain technology and provide a new way to invest in one of the world’s most well-known and trusted assets, real estate. Blockchain technology will enable Building Block REIT to virtually eliminate friction in REIT shareholder communication by allowing direct dividend disbursement, secure user voting, and smart contract functions that execute automatically when pre-set parameters are met.
Building Block REIT plans to raise funds in the form of a digital initial public offering (Digital IPO) accepting payments via U.S. Dollars or fractional Ethereum cryptocurrency. Investors worldwide will be able to purchase shares in Building Block REIT on SEC compliant alternative trading systems (ATS) or peer-to-peer exchanges with whitelisted parties to invest in US commercial office, multi-family and mixed-use real estate.
JPMorgan’s corporate and investment bank is best known for advising businesses on billion-dollar acquisitions, helping private unicorns tap into the public markets, and managing the cash of Fortune 500 companies.
But now it is quietly working on a new platform that would go far beyond anything the firm has previously done, using crowdsourcing to accumulate massive amounts of data intended to one day help its clients make complex decisions about how to run their businesses, according to people familiar with the project.
The platform, called Roar by JPMorgan, would store sensitive private data, such as hospital records or satellite imagery, that’s not in the public domain. Typically, this type of information is exchanged between firms on a bilateral arrangement so it is not improperly used. But Roar would allow clients to tap into this data, which they could then use in a secure fashion to make forecasts and gain business insights.
A new report from Whitepages Pro shows that an overwhelming majority of North American companies in ecommerce and financial services surveyed consider identity verification to be a top business priority but many still don’t believe they do it well or have all the data and tools they need to be successful. For the report, “The State of Identity Verification Maturity in North America,” businesses were asked, among other things, to rank themselves on a 4-stage scale of identity verification maturity for how they use identity data to combat fraud and improve the customer experience.
Among the report’s key findings:
Driven by the belief that fraud attempts are increasing in frequency and sophistication, identity verification is a priority for most organizations (93 percent). While they vary in the degree to which they use advanced techniques, most organizations want to improve their identity verification methods and outcomes. Just 2 percent believe they are completely successful at identity verification.
Organizations want access to more data points (just 13 percent say they have all the data they need) and see data linkages (the relationships between data elements) as a way to improve their identity verification processes. While access to traditional data (like a street address) is common, many still don’t have or use digital data (like an IP address). Most of the survey respondents believe linking data reduces fraud with 77 percent believing it increases confidence in a customer’s identity.
Organizations want more and improved identity verification automation. However they often rely on in-house (such as historical data and white/black lists) that make it difficult to expand the use of automation, resulting in an over reliance on costly and time consuming manual reviews. A large majority (71 percent) believe machine learning can play a role in reducing manual reviews and making identity verification more effective.
White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as lead lender and administrative agent on the funding of a $40 million asset based senior credit facility for LifeCare Holdings, Inc. (“LifeCare”). The funds were primarily used to refinance existing indebtedness. White Oak previously announced the financing of LifeCare Home Health LLC, the home health entity owned by LifeCare.
TradeStation, a Monex Group company and award-winning online broker-dealer and futures commission merchant, today announced the launch of its Fully Paid Lending Program. This program allows qualified equities account holders the opportunity to earn interest income on lendable securities in their accounts.
Under the Fully Paid Lending Program, TradeStation identifies stocks in qualified accounts that are eligible for lending. Based on market demand, some or all of a qualified client’s fully paid positions or excess-margin securities may be lent out to other financial institutions to satisfy their customers’ position requirements. While their stocks are on loan, clients automatically receive 50% of the net proceeds earned by TradeStation for lending out the shares, which is accrued daily and automatically posted monthly to their accounts. Daily income ceases to accrue when the client sells a lendable stock or the stock is no longer on loan.
US President Donald Trump has signed the National Institute of Standards and Technology (NIST) Small Business Cybersecurity Act, a bill which will provide a set of resources for small businesses to best protect their digital assets from cybersecurity threats.
A blockbuster listing of Ant Financial, the fast-growing electronic payment affiliate of China’s leading tech group Alibaba, has again been delayed as it continues to burn through cash and come under pressure from Beijing’s crackdown on non-traditional financial institutions.
Ant was valued at $150bn in its last private fundraising in June, a round that bankers said paved the way for an initial public offering as early as this year.
The global credit rating agency Moody’s called China’s newly-issued regulations on peer-to-peer lending platforms are “credit positive”, because they will strengthen protections to individual lenders and prevent risk spilling over to the broader financial system.
Moody’s commentary came after Chinese regulators announced 10 measures to address risks related to P2P lending platforms on August 12. The P2P platforms enable individuals to lend directly to borrowers through the Internet.
The new regulations clarified responsibilities of P2P platforms and their shareholders, stipulated conditions for orderly liquidation of failed platforms, outlined penalties for borrowers that escape their debt obligations and prohibited registration of new platforms.
Months into the crisis in China’s online lending industry, regulators want to know who actually owns the country’s peer-to-peer (P2P) lending platforms.
The National Internet Finance Association of China (NIFA) issued a notice on Monday designed to help it keep tabs on key stakeholders in China’s online P2P lending platforms as financial and legal difficulties continue to engulf the business.
The effort to bring greater clarity to the workings of P2P platforms comes after hundreds of online platforms have encountered financial and legal troubles in the last few months. In July, at least 165 P2P platforms had difficulties meeting cash-withdrawal demands, saw their owners abscond with investor funds, or were investigated by police, according to a report by internet lending research firm Wangdaizhijia. The number was nearly triple that in June, Wangdaizhijia said.
Peng Xiaofeng was once China’s youngest billionaire and a rising star in the solar industry. But the founder of now-bankrupt LDK Solar has been put on China’s most-wanted list, hunted by law enforcement agencies for illegal fund-raising by his peer-to-peer (P2P) lending platform Solarbao.com.
Police in the city of Suzhou, where Solarbao.com is registered, want Interpol to issue a Red Notice against 43-year-old Peng, who is accused of swindling more than 5,000 investors and leaving a trail of debt amounting to 220 million yuan ($32.1 million). They have also branded the platform, a subsidiary of Nasdaq-listed SPI Energy Co. Ltd., a fraud.
The Shanghai office of fund manager HuaAn Future Asset Management Co. Ltd.was surrounded on Monday by throngs of angry investors who blame the company for what they perceive to be its role in an online-lending fraud. HuaAn denies any involvement.
Monday’s protest centered on P2P site PPMiao.com, which was accused of illegal fundraising by police in the eastern city of Hangzhou, where PPMiao.com operator Guangxi PPMiao Internet Technology Co. Ltd. is registered. HuaAn held a 37.5% stake on behalf of an asset management plan in PPMiao.com’s former operator, Hangzhou Fuqian Network Technology Co. Ltd., as of June 30, making HuaAn the target of investor ire when PPMiao.com’s financial problems surfaced.
In the US, a good credit score can feel like a key determinant of success. It defines how good an interest rate you can get on a car loan or mortgage, the quality of credit card you can get approved for, or if you’ll get approved for any credit at all.
The better your score, the better the perks. A bad score can become a black mark that leads to missing out on the home you want (credit checks are a common aspect of apartment applications), higher car insurance rates, or even difficulty getting a cell phone, according to Nerdwallet.
But as monolithic as the credit score seems, many countries in the world handle credit very differently — with many having no credit score system at all.
Blockchain technology can help car-sharing companies to track a person using the car any time. According to industry analysts, the car sharing economy is expected to hit $335 billion by the year 2025.
The car sharing idea has been gaining a lot of interest among car drivers over the recent years. According to estimates by Global Market Insight, the peer-to-peer car sharing sector will amount to $11 billion. The growth has largely been attributed to raising cost of owning a car.
The biggest challenge with the Peer-to-peer lending system is trust. The car owner has to have total trust in the person hiring the car. Additionally, the car owner has to be sure that the hirer has enough money to cover the period the car is hired. The owner of the vehicle would also like to track where the car is as well as the condition in which it is being driven. On the side of the hirer, they would love to know if they are hiring the car from the original owner and that the data exchanged between the two parties is secure.
Australia-based marketplace lender SocietyOne announced celebrated its sixth anniversary of operations as total lending since inception approaches $500 million.
SocietyOne also reported it has more than 20,000 customers and since the beginning of 2016, total lending has grown nearly 6 times and the lender’s loan book now totals over $220 million, up from $41 million at the start of 2016.
UK-headquartered fintech startup ClearScore is all set to start its business in India offering credit scores to Indian consumers in partnership with Experian, free of cost, to improve the awareness levels of the consumers regarding credit. India is their second international market after the company started operations in South Africa last year.
ClearScore will be available on Google Play Store and will provide details of the credit score, giving alerts about changes in the score and provide details about how consumers can improve the score.
Bengaluru-based digital lending platform Capital Float has acquired personal finance management app-maker Walnut for $30 million (Rs 209 crore) in a cash and stock deal, a company statement said. Both the companies count Sequoia Capital and SAIF Partners as common venture capital investors.
Walnut allows users to track spends, check on credit and bank balance, bill payments and split expenses within a group. In July 2017, it launched a small ticket credit line for its users called Walnut Prime based on user data and consumer behaviour. The platform has so far disbursed Rs 100 crore in consumer loans.
OfBusiness, a Gurgaon, India – based technology enabled SME financing platform, raised INR 200 crore (approx $29m) in Series C financing.
The round was led by Creation Investments and Falcon Edge with participation from existing investors Matrix Partners India and Zodius Capital. With this new round of funding, the company has raised a total of INR 500 crore of equity and debt funding to date. It has also raised debt lines from Kotak, Tata Capital, RBL Bank and Northern Arc amongst other lending partners.
The capital will be used for continued rapid growth and model scaling.
The round was led by alternative asset firm TPG, with participation from existing investors Norwest Venture Partners, an investment fund managed by Morgan Stanley, and Sequoia Capital. The company’s first investor, Matrix Partners India, continues to stay invested in the company.
Led by D. Lakshmipathy, Chairman and Managing Director, Five Star is a non-bank finance company providing loans to nearly 40,000 customers.
Bangalore-based peer to peer (P2P) lending platform Finzy on Monday announced raising funds worth USD 2.3 million in Pre-Series A round, including USD 1.3 million raised in the first tranche in March 2018.
This funding round has been funded by senior professionals from BFSI industry and successful entrepreneurs. The startup plans to use the freshly raised capital for geographical expansion, technology investment and stronger distribution networks.
Founded in 2016, by Abhinandan Sangam, Amit More and Vishwas Dixit, Finzy is a premier P2P lending solution in India that connect borrowers with investors and make the entire process simple and easy so that one can get a loan in as little as 48 hours.
Don’t let greed cloud your judgment. If you are in a tearing hurry to pocket double-digit returns, you are likely to overlook many warnings signs. That is why it is always better to start with a small amount, learn the ropes, before going for the kill.
Different platforms have different ticket size for lending. With companies like Faircent offering as low as Rs 750 per loan. The ROI would vary as per the borrower profile and loan tenure. The total amount invested by a lender across all P2P-NBFCs is capped at Rs 10 lakh, as per the existing RBI norms.
The RBI came out with regulations for P2P companies in October. There are around 30 online P2P companies in India, of which only eight have received a certificate of registration (CoR) from the RBI to carry out P2P lending activities.
Singapore police said on Tuesday (Aug 21) they have recovered more than S$27 million linked to one of the biggest Ponzi schemes in China, which saw 1.15 million investors cheated out of 38 billion yuan (S$7 billion).
Ezubao, once China’s biggest peer-to-peer lending platform, folded in 2016 after it turned out to be an online scam that concocted fake projects to attract investment and pocketed funds instead of passing them to borrowers to generate returns.
Mexico’s next government will look to fintech companies and large corporate banks to increase financial inclusion in the country, where only one-third of adults have a bank account, senior officials said on Tuesday.
Arturo Herrera, one of two future deputy finance ministers, said in an interview that the lack of financial inclusion was one of the biggest obstacles in the new government’s fight against poverty, inequality and slow economic growth.
News Comments Today’s main news: PayPal is on an acquisition binge. Financial advisers eschew P2P lending. Ant Financial to go all in on the blockchain. 51 Credit Card IPO priced at HKD 8.50 per share. Today’s main analysis: Consumer debt increases in May. Today’s thought-provoking articles: Business loan drought ends for banks. Germany’s crowdfunding market hits $588M. Brazil leaders want […]
PayPal leads an acquisition binge. PayPal is a forerunner to the modern fintech company, but for a long time it rested on its laurels. Now, the company is snatching up smaller fintechs left and right. This should improve the company’s financial position and make it a real competitor globally.
Consumer debt increases in May. Total consumer debt looks to be down from two years ago, but outstanding debt as a percentage of disposable income is going up at quite a pace. At first glance, this looks like disposable income may be going down. If that is the case, how will it affect consumer lending in the next 2-5 years?
PayPal is tearing through a flurry of payment company acquisitions, having snapped up four in just a five-week period this year.
This year has already been a record for payment company deals, with $46 billion in acquisitions (paywall) though June, according to Dealogic. That compares with $33 billion in total for last year
Recent acquisitions include iZettle, a Swedish mobile payments company, and Hyperwallet, which businesses can use to pay employees around the world (the deal size is only shown if it has been verified by Pitchbook):
Preliminary second-quarter data from the Federal Reserve indicate the year-over-year growth rate of business loans rose to 5.5% in late June from less than 1% near the end of 2017. The upturn marks the reversal of a prolonged slump in business-loan growth that began in earnest about two years ago.
For banks, the acceleration in lending may help lift results when firms report quarterly results this month. Profits from lending are a major component of bank earnings and grow when total loans increase or rates on loans rise. Business-loan growth often helps on both fronts because these credits typically carry floating rates that allow banks to capture rate increases.
New data shows that U.S. consumer debt rose in May by the most in six months, showing that Americans were more comfortable with spending midway through the second quarter. The data from the Federal Reserve shows an increase in revolving debt, which includes credit cards, as well as a boost in non-revolving debt that includes educational and auto loans.
This latest news comes after LendingTree, the nation’s leading online loan marketplace, released its first Consumer Debt Outlook in May 2018, finding that Americans owe more than 26 percent of their income on consumer debt, up from 22 percent in 2010. That means Americans are on track to accumulate a collective $4 trillion in consumer debt by the end of this year. In fact, over the past five years, Americans have been accumulating more debt, and for nearly two years, consumer credit has grown at a steady rate of 5 to 6 percent annually.
Virginia National Bankshares in Charlottesville, Va., will increase the loan-loss allowance for its student loan portfolio after an outside insurance carrier was shut down.
The $625 million-asset Virginia National said in a regulatory filing Thursday that ReliaMax Surety, a South Dakota insurer that issued surety bonds tied to purchased student loans, is insolvent and was placed into liquidation last month.
Finn, a mobile bank built by Chase, recently rolled out nationwide. And I gave it a try.
In addition to offering bread-and-butter checking and savings account functionality, it also offers services many firms in the personal finance startup space have built their businesses around. These include automatic saving tools and charts to see where you are spending money.
Personally, I think the app is a better experience than my traditional Chase mobile bank, since it more easily allows you to send checks from the app, save money in an easy and fun way, and keep track of your spending. It’s also free. And there’s no overdraft fees. But it’s not without flaws.
Last Thursday, Square confirmed that it withdrew its application to the FDIC for depository insurance, which would allow it to take deposits from customers in all 50 states. The company said it plans to refile.
Regardless of the reason for withdrawing the application, this news revives the debate over whether fintech companies should be allowed to become banks in the first place – at least in the manner that Square and SoFi have sought to attain bank status.
Don’t let your money sit, let it work for you. I know I sound bit weird, but you can put your money to work. No! you do not need the fortune to invest in, just $100 is all that is required. Though investing an amount may appear bit difficult in starting but once you get a hold on the things, it will become easy eventually. Investing is all about making a choice, you can invest $100 and can earn thousands in future or you can just spend this amount on a dinner.
This could be another great option to make the investment in. Lending Club is basically a peer-to-peer lending, where borrowing and lending takes place between the ordinary folks. This is one of the largest online market in the world, that connects the investors and borrowers.
A decade is a fairly short period of time, so think about what it will take to grow your initial investment by a factor of ten in ten years. With no additional investment, turning $100K into 1 million would require a compound average annual return of 25.9 percent, which is pretty unrealistic. Historically, the U.S. stock market has averaged a return on investment of about 10 percent per year.
Peer-to-peer lending has created a relatively new form of income investing in which you can invest by making personal loans. Higher risk loans produce higher income yields but are also more likely to default. You can manage your risk somewhat by choosing lower risk loans, focusing on shorter term loans and diversifying by funding small amounts of many different loans.
Credibly, a small and medium-sized business lending platform, announced on Tuesday it has hired Jerome Pender to drive its information technology strategy. According to the online lender, Lender is a seasoned professional more than three decades of experience in information technology. He has experience in business systems, enterprise architecture, technology, and governance.
Prior to joining Credibly, Pender was the Chief Information Officer, Operating Partner, and Managing Director at Z Capital Partners. He also spent more than a decade at the FBI, serving as Chief Information Officer and Executive Assistant Director, as well as Deputy Assistant Director. Before the FBI, he held several leadership positions at UBS AG.
The principle growth areas are projected as account aggregation, analytics of expenditure and financial product comparisons. This is difficult to understand given that none of these areas is new – in fact the information is being delivered differently – that is all that has changed. And in most cases (relative to challenger banks) the data delivered is very limited, preventing innovation on these pre-existing services. The major market comparison engines pull richer data through a combination of private means and screen scraping, and have made clear that open banking APIs will not replace this in their current form.
Ant Financial: you may never have heard of it if you don’t live in Asia, but its payment platform Alipay is one of the biggest payments facilitators in the region, bigger than Samsung Pay, Apple Pay, and Android Pay in most Asian countries.
It is part of Jack Ma’s $450+ billion valued Alibaba empire and recently raised significant investment from investors worldwide pumping its own value up to a whopping $150 billion.
China’s 51 Credit Card, an online credit card management platform, is set to price its IPO at HKD 8.5 per share at the bottom of its indicative range of between HKD8.5 – 11.5, according to various reports.
The company is set to raise an estimated US$129 million in the flotation, according to a Tencent report.
Its net profit is up nearly 1304% in 2017 from a year earlier, standing at $112 million (RMB 744 million). However, it has been operating in a negative cash-flow for the last three years and its cash and cash equivalents dropped to 1.26 billion yuan in 2017 from 2.1 billion yuan in 2016.
China’s crackdown on shadow banking has caused some high-profile blowups. Now it’s driving the country’s car makers off course.
One big target for Beijing has been the proliferation of peer-to-peer lending platforms—total transactions on these ballooned to 2.8 trillion yuan ($423 billion) last year, more than 10 times the total in 2014, according to industry website wdzj.com. The worry is that such platforms have become a hotbed for embezzlement, or could simply run out of money. Local media reported dozens of them collapsing.
Only one out of the nine peer-to-peer lending companies in China might be able to survive as top financial regulators are stepping up the pace of scrutiny to curb risks caused by the massive unregulated sprawl in the past few years.
The central government plans to maintain “pressing posture of severe attack” to clamp down on activities violating laws and regulations in internet finance, extending the ongoing nationwide crackdown for another year, Pan Gongsheng, deputy governor of the People’s Bank of China, the central bank, said during a meeting on Monday.
Dianrong today announced the appointment of Tony Zhang as Chief Technology Officer (CTO). Mr. Zhang will report to Long Hsiang Loh, CEO of Dianrong.
Mr. Zhang has nearly two decades of experience in science and technology, with in-depth knowledge of financial and internet technology as well as company management. He worked in Silicon Valley for 11 years, including eight years at PayPal in various leadership roles. He provided recognized technical and business leadership across a range of PayPal’s core product features and functionalities.
LendLedger hopes to be the solution to these problems by opening up global lending markets. The platform is changing the face of lending to the underserved segments. Already this platform has processed tens of millions of dollars in loan requests in India, which has led to the provision of loans to hundreds of thousands of borrowers in the informal and small business sectors in 40 Indian cities. This platform is opening up new financial markets across the globe.
The platform unlocks data on informal and small business borrowers making it possible for lenders to offer loans to the informal traders. LendLedger seeks to bridge the $2.6 trillion lending gap between the institutional lending capital and informal borrowers. The aim of the platform is to come up with a lending market that is both inclusive and profitable for all the participants.
Etherisc, the global, decentralized insurance platform for collectively building insurance products, has announced the launch of a blockchain consortium to create Collateral Protection Insurance (CPI) for the crypto lending market. The consortium aims to address a current, significant barrier to mass adoption by facilitating safe participation in crypto lending, clearing the way for more institutional players to enter the market.
The founding members of the lending consortium include bZx, formerly b0x, a decentralized margin lending protocol and liquidation oracle marketplace; Celsius Network, a peer-to-peer decentralized borrowing and lending platform; Colendi, a comprehensive credit scoring protocol and microcredit platform; ETHLend, a peer-to-peer lending smart contract on the Ethereum blockchain for lending ether; Lendroid, a unique non-custodial lending platform working to enable a range of collateralized loans, advanced auction markets and trust-independent margin trading; Libra Credit, a lending ecosystem that facilitates open access to credit; Nexo, a platform for instant crypto-backed loans, powered by the 10-year-old leading European FinTech group Credissimo; Ripio Credit Network, a protocol based on smart contracts and blockchain technology, which brings enhanced transparency and reliability in credit and lending; and Sweetbridge, a blockchain-based economic framework that transforms supply chain, logistics, and unleashes working capital.
At the end of June 2018, small- and medium-sized businesses (SMBs) in Germany had raised €500 million ($588 million) using equity crowdfunding and crowdlending marketplaces, according to a report from crowdfunding.de.
Here are a couple of key takeaways from the report:
Real estate companies use crowdfunding most. Real estate accounted for over half, 53.3% of all the crowdfunding in Germany, making it the most common segment to opt for this funding method. It was followed by enterprise with a 42.6% share of funding raised and energy at 3.8%. Other segments combined only had a 0.3% share, showing that crowdfunding is largely dominated by two areas. However, as crowdfunding becomes more popular, we might see other sectors increasingly choosing it.
Unsurprisingly, a digital real estate investment provider had the largest share of funding among platforms. Germany-based Exporo raised 32.3% of the total, followed by UK-based Funding Circle with 14.4%. This shows that foreign companies also have a lot to gain from Germany’s crowdfunding market.
Insights from the automated investment platform show 36.5% of its users are attempting to grow wealth outside of super, while 28.6% are using it to accrue retirement savings.
The top reasons driving use of automated investment and advice platforms were lower fees and investment diversification, highlighted by 18.3% and 16.7% of users respectively.
Viewing the data through a gender lens, half of Six Park’s female clients are checking the progress of their portfolios at least once a month and their most common goal is the ability to purchase a property in the near-term; 25% of females flagged this, compared to just 10% of men. In contrast, more than half of Six Park’s male clients are checking their portfolios on a daily or weekly basis.
At the country’s first social finance forum in 2014, you could count the participants on one hand. All of them were in Rio and Sao Paulo. Equity crowdfunding and peer-to-peer lending were still in regulatory review. Few universities included social finance in their curriculum. All of that has changed. Today:
São Paulo-based Vox Capital scored a 26% IIR in an exit from affordable healthcare network TEM, marking one of the country’s first impact investment exit. Vox has raised two funds totaling more than 200 million-real and backed more than 20 social ventures since 2009;
Singapore-based credit management services (CMS) provider AsiaCollect has raised $4.5 million to date after closing its recent investment round led by SIG Asia Investments.
Dymon Asia Ventures, the venture capital arm of Dymon Asia Capital, a Singapore-based alternative investment management firm, returned to co-invest in this round after investing $1 million in AsiaCollect’s pre-series A equity round in August last year.
News Comments Today’s main news: How to invest in the sharing economy. Elevate expected to report $184.82M in sales. Funding Circle scraps downloadable loanbook. Ant Financial valued at $150B. Standard Chartered to apply for virtual bank license in Hong Kong. Today’s main analysis: Marcus update. Today’s thought-provoking articles: PeerIQ lending earnings insights. Alternative uses of fixed-income markets. LendingTree Personal Loan Offers […]
While not a hard asset like a home or car, lending services have also come into the crosshairs of the sharing economy. Lending Club, the nation’s largest peer-to-peer lender, gets borrowers lower interest rates and smaller fees than a credit card or other traditional lending source typically offers by connecting them with investors on its online platform.
Since becoming a public company in December 2014, Lending Club revenue has soared more than 50% as seeking out alternative means of funding has increased in popularity. That sounds like a great investment, but Lending Club has actually fallen on hard times. The stock is down 75% from its 2014 debut as a result.
Other concerns, like increased competition, have surfaced: Goldman Sachs‘ online-only bank Marcus is just one of them. But there is some hope for this “sharing” company as first-quarter 2018 revenue increased 22% on an 18% increase in lending origination.
Where are we in the credit cycle? Most lenders see the US consumer in a good place with high consumer confidence, home prices, and higher take-home pay from tax cuts. The economy is at or near full employment with low wage and productivity growth. GDP gains are driven by consumer spending, fueled in term by consumer credit (8% YOY growth – well ahead of GDP and wage growth). Over the next few quarters due to stimulus and short-term effects there may be robust GDP prints, however, 16 to 24 months out we expect a lower pace of growth and heightened recession risk.
Credit re-normalization continues across all major lending groups. Credit performance this quarter is generally in-line with expectations. We see some of the lowest charge-offs and delinquencies at near-prime and retail lenders such as Enova and OneMain. Online lenders such as LendingClub have increased their charge-off estimates by ~50 bps.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions by 35% although loan growth was only 16% and Discover increased loan loss provisions by 26% on loan growth of 9%. Capital One saw a drop in loans outstanding.
Personal loans are just the start, with possible expansion opportunities for Marcus into mortgages, credit cards, auto loans and insurance. There are 4 key product areas – Borrow, Spend, Save, Protect with 12 separate products listed with a focus on Clarity Money. Since its launch Marcus has served ~1.5 Mn customers with $3+ Bn loans originated and $20+ Bn in online deposits.
GS views their lack of legacy banking software as a competitive advantage and has invested heavily in building their platform. GS has invested, through capital spending and operating losses, $600 Mn, including reserves, up by $100 Mn.
GS is building Marcus as a business “for the next 50 years” but is expanding the personal loan program cautiously as the credit cycle may turn. GS wants to integrate the consumer platform with its wealth management business.
Equities analysts expect that Elevate Credit (NYSE:ELVT) will report $184.82 million in sales for the current quarter, Zacksreports. Two analysts have issued estimates for Elevate Credit’s earnings, with estimates ranging from $182.44 million to $187.20 million. Elevate Credit posted sales of $150.47 million during the same quarter last year, which suggests a positive year over year growth rate of 22.8%. The business is scheduled to issue its next earnings results on Monday, July 30th.
According to Zacks, analysts expect that Elevate Credit will report full-year sales of $803.08 million for the current fiscal year, with estimates ranging from $801.06 million to $805.10 million. For the next financial year, analysts expect that the firm will report sales of $930.53 million per share, with estimates ranging from $920.75 million to $940.30 million. Zacks’ sales averages are an average based on a survey of analysts that follow Elevate Credit.
Mick Mulvaney, acting director of a controversial consumer finance bureau, fired an advisory board after the members criticized the new leadership for not taking their advice.
The Consumer Financial Protection Bureau (CFPB) announced Wednesday that the 25 current Consumer Advisory Board members will be replaced, and will be ineligible to reapply to the board, the Washington Post reports.
Eleven advisory board members held a news conference Monday calling out Mulvaney for canceling several meetings — which are required to take place under the Dodd-Frank Act which created the agency.
The report, called “Building Resilience into Portfolios,” explains that the traditional use of fixed income in a portfolio is quite straightforward. That use generally involves a long position on debt of various sorts (sovereign, corporate, developed or emerging markets), that is relied upon to reap premiums from duration and credit risk.
But there are alternative uses of these instruments, and given the “rapid pace of change within fixed-income markets” in recent years they have become more available than ever, with the goal of securing absolute return, “steady positive returns above cash.”
These strategies include the exploitation of relative valuation differentials and/or the taking of short positions in order to profit from rising yields.
One obvious problem is that the central banks are about to start (in some jurisdictions have started) raising rates, reversing the tailwind that has benefitted the traditional use of FI in recent years.
Alternative investors in FX, though, have the flexibility to avoid such problems. They can “avoid issues, sectors, or sub-categories of assets altogether, as they see fit, investing solely in their highest conviction views.”
Offered APRs continue to rise for all borrowers, while lenders offer slightly lower loan amounts. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.
The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 63% of all loan inquiries.
In Chicago, a new startup has introduced a tool that builds algorithms based on questions completed by the investor to establish the baselines. The tool then finds both on- and off-market deals that suit the preferences of the investor.
PayPal wants its customers to get a tangible experience of what cash-back rewards look like, adding a physical and emotional association with the digital financial-services company.
PayPal is hosting a live walk-through pop-up exhibit in New York City on June 8 and June 9, the first time the company has hosted an experiential event of this kind. Anyone can attend the free event with music and refreshments. PayPal is the latest financial company to add realness to what many consumers see as abstract, transactional products.
Atlanta-based real estate mogul Jay Morrison recently launched a new real estate crowdfundingprogram, and it’s finding some strong early success, having raised nearly $10 million in its first week.
The Tulsa Real Estate Fund is described as “the first African-American owned Regulation A+ Tier II crowdfund designed to revitalize urban communities across the U.S.” According to the group’s press release, the Tulsa Real Estate Fund “allows both accredited and non-accredited investors to collectively invest and own real estate projects around the country that are unique, diversified, and yield a reasonable rate of return.”
Ironhorse Funding, LLC, a Beverly, MA-based financing platform that provides operational and capital support for dealers and distributors in the motorcycle and powersports market, raised $30M strategic financing.
Crestline Investors made the investment through the firm’s Opportunity Fund III platform, which seeks to deploy capital where Crestline finds inefficiencies in the primary credit markets in North America and Europe.
The funding will be used to provide alternative financing solutions for consumers in the motorcycle and powersports market.
The stock of SBI HOLDINGS INC ORDINARY SHARES (OTCMKTS:SBHGF) registered a decrease of 3.53% in short interest. SBHGF’s total short interest was 3.16M shares in June as published by FINRA. Its down 3.53% from 3.28M shares, reported previously. With 11,600 shares average volume, it will take short sellers 273 days to cover their SBHGF’s short positions. The short interest to SBI HOLDINGS INC ORDINARY SHARES’s float is 1.59%.
The stock decreased 1.20% or $0.32 during the last trading session, reaching $26.41. About 3,352 shares traded. SBI Holdings, Inc. (OTCMKTS:SBHGF) has 0.00% since June 8, 2017 and is . It has underperformed by 12.57% the S&P500.
US-based Lendstreet has just closed a $7 million series A equity round, led by Prudential Financial and Radicle Impact.
Prudential and Radicle join Lendstreet’s existing investors Accion, the Centre for Financial Services Innovation (CFSI), Serious Change, Crunchfund, Kapor Capital, and Cross Culture Ventures in participating in the round.
Ten years after the 2008 housing crisis, Americans eye the housing market with caution, as more than half (53%) of Americans who have or plan to buy a home admit they’re concerned about their ability to afford a home in the current market, according to a recent study of college-educated adults. The findings, release today by national online lender and FDIC-insured bank Laurel Road, also reveal that Americans on average believe a similar housing crash will occur in the next five years, and nearly one-fifth of respondents anticipate a crash in less than one year.
The survey found that women in particular are potentially underestimating affordability, as they are significantly less likely than men (49% vs. 59%) to be familiar with the alternatives.
This lack of knowledge around alternative options potentially contributes to the fact that more than one-third (35%) of respondents – and 46% of millennials – do not feel confident that they could currently afford a 20% down payment. Women (45%) feel particularly less confident than men (24%), while more than two-fifths (42%) of student loan carriers do not feel confident.
British tech businesses attracted $7.8bn of funding last year, which was almost double the amount received in 2016. Research by Dealroom and Tech Nation showed that the UK’s venture capital investment last year was higher than Germany’s total of $3.2bn and France, which brought in $2.8bn.
According to a report by EY, there was a 22pc increase in digital investment into the UK, which helped to offset a decline in investment to sectors such as a financial services and logistics, due to investor concerns over Brexit.
Fintech start-up MarketInvoice has appointed Rija Javed as its chief technology officer (CTO) as the company looks to invest heavily into its technology. Rija Javed joins from Wealthfront, a leading Silicon Valley based start-up.
SINCE its fifteen minutes of fame back around ‘OB Day’ on 13 January, when excited media reports promised the dawn of a new era of high-tech banking, Open Banking has slipped back into the fintech background, accompanied from some quarters by accusations of having been something of a damp squib.
But such claims misunderstand the nature of the beast, says Imran Gulamhuseinwala, implementation trustee of the snappily-named Open Banking Implementation Entity (OBIE) which develops and tests the APIs on which the system is built.
There are a handful of peer-to-peer lending platforms already active in Open Banking, including Zopa and Lending Works.
Online mortgage lender LendInvest reports it is scrambling to hire new employees due to the demand of its Buy-to-Let (BTL) product. The LendInvest team has now grown to 15 people in the short period since the BTL product was launched in November 2017.
Pike, joined the team from Fleet Mortgages.
LendInvest has also hired field-based Business Development Manager, Shane Wallace to cover the East of England. Shane brings over 10 years’ experience from Aldermore, where he was most recently employed as a Commercial Mortgage Manager.
Hong Kong and London-listed Standard Chartered plans to apply for a virtual bank licence, making it the first traditional bank seeking a licence locally to operate purely online without physical branches.
Startups across Europe are racing to try and replicate the success of Robinhood, the hot US stock trading app. San Francisco-based Robinhood offers a zero-fee trading app that has taken off with young Americans. Founded in 2013, it claims to have 4 million customers and in May hit a valuation of $5.6 billion. This success has not gone unnoticed. Fast-growing UK fintech startup Revolut on Thursday announced plans to build a commission-free stock trading platform, similar to the way Robinhood works.
Brokers are charging people as much as £5.00 ($6.70) per trade and the user interfaces are typically clunky, slow and confusing for consumers. The pain points are clear for us and the room for improvement is massive. We’ve just done some research and found 94% of millennials don’t actually invest but do want to, Ackred said. There are 16 million millennials just in the UK and 100 million more in Europe who are new to investing and have no good options to start.
On the surface it looks like the world is making good progress towards financial inclusion with the Findex report showing that 68% of adults globally having some kind of bank account versus 61% in 2014 and 51% in 2011. That is rapid progress.
But CFI found a different story when just focusing on active accounts, those accounts that had some kind of transaction in the past 12 months. This takes the percentage down to 55% and what is worse the gap is widening between total accounts and active accounts indicating a growing number of people who open an account but never use it. This is true for both developing and high income countries but the gap is getting much wider in developing countries as shown in the graphic below.
At the Finovate Spring 2018 conference, CEO Miron Lulic and CFO Jesse Stockwell presented the company’s new SuperMoney No-fee Financing platform, which allows merchants to obtain point of sale financing from online lenders and banks.
The new platform allows a small business merchant, like a furniture store, to create a free profile that is co-branded with SuperMoney. With the profile, the merchant can easily see when a customer has applied for financing and follow up.
According to a Forrester Consulting study on SuperMoney’s website, businesses that offer point of sale financing enjoy an average increase in sales of 17 percent and an average increase in order value of 15 percent.
While the term “lending platform” might sound harmless and even beneficial to society, it was never disclosed outright to whom the coins were being lent or for what exact purpose they were being lent (though they did have the courtesy to mention “volatility software” – a trading bot concept directly plagiarized from Bitconnect). They were in fact being “lent” to Ethconnect themselves. This lack of detail did not stop hundreds of people, blinded by the prospects of huge profits, from throwing thousands of dollars at the project. But also unlike Bitconnect, none of them would ever see another penny of it again.
The co-founders of small business lender Prospa maintain the company can return to the public markets for a future float, after a last-minute regulatory query this week created “confusion” that sapped the listing of vital “momentum.”
If corporate lending was the flavour of the season at the turn of the decade, then retail lending has captured the attention of financiers over the last few years. Now, it is lending to the country’s small and medium enterprises, which is attracting increased focus from both traditional and new-age financial sector entities.
Capital Float, ranked among the country’s largest digital lending platforms, disbursed Rs 1,500 crore to MSMEs in 2017-18 out of a total portfolio of Rs 2,500 crore, according to information provided by the company. The ticket size of loans ranged from Rs 50,000 given to small local businesses to Rs 8-10 lakh loaned to larger SMEs.
Resolution no. 4.656/2.018 published by the Brazilian Central Bank on 26 April, which regulated credit fintechs in Brazil, opens the door of the highly concentrated banking sector in Brazil, so that financial technology companies can offer products and financial services in the credit market. Today, credit fintechs already operate in the financial market, but always through a financial institution duly regulated by the Brazilian Central Bank (CB).
With this new regulation, two types of financial institutions with different business models were created. They are: the “Sociedade de Crédito Direto” (SCD) (“Direct Credit Company”), which will carry out credit operations only using its own financial resources, and the “Sociedade de Emprésimo entre Pessoas” (SEP), (Peer-to-Peer Loan Company), which will carry out credit operations only as a financial intermediary without retaining risks or using their own resources, known in the market as “peer-to-peer lending”. Both institutions, after approval by the Central Bank (CB), will be authorized to operate, only, through an electronic platform.
Chinese fintech companies have made headway in expanding their business to Southeast Asian markets, as they increasingly find their know-how in big data and artificial intelligence being sought after by Asian financial institutions in risk management and compliance.
Online consumer finance platform Weshare, which offers consumer loans through its mobile app, says it is applying for a P2P licence from Indonesia’s central bank.
We also have smaller fintech start-ups as our clients. One of them is Bomapp, an insurance service application that is designed to offer insurance advice and find redundant coverage of registered insurance. For a start-up like Bomapp, we don’t charge per piece of data because we acknowledge that start-ups lack funds. Instead, we agreed to take equity from Bomapp.
As P2P start-ups become more active, we also provide user data for them. Among our clients are Lendit and 8percent. They use the data to assess credit ratings and get information about individual asset size. They try to use the online data because the P2P companies pursue a different credit rating approach to banks. We see there is a great opportunity in the fintech industry because they are keen to venture into new businesses.
News Comments Today’s main news: N26 reaches 1 million customers. Prospa postpones float. Transferwise could be working with Monzo. Ant Financial shifts away from finance. Goldman Sachs backs Marqeta. BlueVine raises $60M. Today’s main analysis: Capitalists invest in Chinese companies. Today’s thought-provoking articles: Goldman shares its vision for Marcus. 10x Banking founder discusses the future of fintech. Indonesia’s looming digital disruption. United […]
Transferwise could be working with Monzo. All the best news today is from outside of the U.S. This rumor leads the way. If Transferwise is working with Monzo, or intends to, this will be a powerful partnership.
Goldman Sachs Group Inc (GS.N) has joined a $45 million investment round in Marqeta, a U.S. fintech company offering technology businesses can use to issue payment cards, the startup said on Tuesday.
The round, which brings Marqeta’s total funding raised to $116 million, was led by venture capital firm ICONIQ Capital, according to a statement from the companies. Marqeta is also backed by Visa Inc (V.N).
In the presentation Solomon did not address everything on this slide directly but much of it is self-explanatory. First, Goldman is breaking down their vision for their consumer platform into four key areas: Borrow, Spend, Save, Protect with 12 separate products listed. It is also interesting that Clarity Money is front and center on this slide. They clearly view the personal financial management app as a critical piece of the puzzle.
Let’s look at the future products in the Borrow space beyond personal loans:
Credit Cards – we have already heard about their deal with Apple but there will likely be a Marcus branded credit card at some point.
Mortgage – This is a huge market and one that still has plenty of room for disruption. While it won’t be easy to displace the banks or large non-bank lenders like Quicken Loans and loanDepot there is a huge market to go after.
Auto – Another big market with no clear fintech leader. The banks still dominate auto lending, particularly for new cars. LendingClub has started in the auto space focused on auto refinancing and I expect that will be the area Marcus would go to first.
As chief information and digital officer at Popular Inc., Burckhart’s role is mostly in the office and boardroom. But in the aftermath of the Category 4 storm, she and her team spent days in the field, figuring out how to get banking services to those who needed them.
Their efforts cannot be overstated, since the company occupies a key role in the island’s economy: Its Banco Popular claims to have 56% of the deposits in Puerto Rico and 49% of the net loans, as of year-end.
A week after Hurricane Maria, despite islandwide communication and electrical outages, Popular had 53 of 168 branches and 150 of 635 ATMs in service, as well as all digital channels.
Last year, Spence oversaw the configuration of so-called Agile teams to work on Fifth Third’s online banking channels and mobile apps. This resulted in a revamped bill pay experience, along with the addition of online branch appointment scheduling and the ability to withdraw cash at ATMs using the bank’s mobile app. In months, it was also able to launch Zelle peer-to-peer payments and Momentum, a proprietary app that helps millennials pay off student loans faster through micro payments from rounding up purchases.
Apex Clearing helps to power leading fintech firms like Robinhood, Betterment and Stash, acting as the plumbing and operating in the background; as these digital platforms begin to slow their growth Apex has started to look beyond the startups for bigger clients; Bill Capuzzi, CEO of Apex Clearing, says there is more than $500bn of addressable market with larger firms who want to digitize; the effort is not easy as some traditional players still use fax machine technology; making progress slow but firms know they need to digitize and Apex is hoping to take a big share of those making the shift.
FlyHomes, a Seattle, WA-based real estate startup, raised $17m in Series A funding.
The round was led by Andreessen Horowitz, with participation from Mark Vadon and Shasta Ventures, among others.
The company intends to use the funds to increase deployment of its Cash Offers program, accelerate hiring, invest in further product development, and drive new market expansion in Seattle, San Francisco, Chicago and Boston.
Key consumer behavior trends and other major findings identified in the IDology Consumer Digital Identity Studyinclude:
Fraud concerns are impacting consumer choices online, with 83 percent surveyed having extreme to moderate concern that their identities will be used to fraudulently open accounts.
Consumers view biometrics, knowledge-based authentication and one-time passcodes as the most secure methods of authentication. Overall, 90 percent of consumers are comfortable answering knowledge-based authentication questions to verify their identities but prefer demographic-based questions over credit-based questions two to one.
Fifty-six percent of consumers report that they are more likely to choose a financial institution if they know it offers advanced identity verification methods.
When opening an account online, consumers place a premium on security (88 percent) and ease (72 percent), with 31 percent reporting they have abandoned signing up because it was too difficult or took too long. This reveals that more than ever, consumers are looking to do business with companies and financial institutions that have minimal friction as part of their overall service experience, along with assurance that their transactions and identities are secure.
According to the survey, 53 per cent and 52 per cent respectively of small business owners named (1) the cost of providing health insurance for employees and (2) the effect of changes in the new tax law as key business considerations. What’s more, 35 per cent of respondents report the new tax plan has already caused them to make changes in their business, with 10 per cent reporting that they are actively investing in new equipment or staffing.
Cross River, a leader in the emerging Fintech industry, has hired Kevin Gallagher, an accomplished small business lending specialist, to head its Small Business Administration loan division.
Gallagher joins Cross River from Empire State CDC: The 504 Company, where he led business development efforts around various SBA loan products and community lending products. Prior to that, he served as national sales director for SBA-related programs at Customers Bank and Citibank.
According to sources, the international money transfer service and European unicorn is working with the fast-growing U.K. challenger bank Monzo.
The tie-in will likely see TransferWise functionality offered within Monzo’s mobile banking app, courtesy of the TransferWise API. It will give Monzo’s 700,000 customers the ability to send money in various supported currencies at the ‘mid market’ rate in addition to TransferWise’s low and transparent fees.
Multiply, the UK’s first fully-automated independent financial advice service, has secured investments totaling £1.75 million, led by Octopus Ventures.
Octopus Ventures, the early stage investor, invested £1 million, and was joined by Portag3 Ventures LP and Entrepreneur First to support Multiply’s development and roll-out of their beta consumer facing product. Angel investors include Nick Hungerford, former CEO of Nutmeg, Taavet Hinrikus, CEO and co-founder of TransferWise, Peter Rading, Michael Orland and Toby Moore.
Ant Financial Services, the dominant Chinese fintech company, is shifting its main focus to technology services and away from payments and consumer finance as Beijing’s crackdown on financial risk deepens, four sources with knowledge of the matter said.
But in five years, technology services will make up 65 percent of Ant Financial’s revenue, compared with an estimated 34 percent in 2017, according to confidential company projections viewed by Reuters. That would involve helping banks and other institutions with services like online risk management and fraud prevention.
Over the past week, two private Chinese technology unicorns, Xiaohongshu (“Little Red Book”) and Sensetime, announced that they had raised nearly $1 billion, adding to the ranks of large Chinese enterprises thinking about going public. Another Chinese company is scheduled to IPO in June, 3 recently selected bankers (a key step for launching an IPO) and 11 have already gone public for a total of 15 year to date, compared to 15 in all of 2017.
Year to date, the 11 Chinese companies are up 39%, compared to only 3% for last year’s vintage. HUYA, a leading live streaming platform for video games, is up 147% since its May 10, 2018 IPO, followed by another video streamer, IQIYI, up 62%. Last year’s big winner was tiny filter maker Newater, up 177%, followed by online lender Lexin Fintech, up 73%, while more than half of its 2017 comrades are under water.
Hangzhou-based fintech platform Caogen Touzi has closed an RMB 2.3 billion ($357.8 million) Series D round led by Shanghai-listed Geo-Jade Petroleum, a property development and oil and gas firm, and other investors.
In a security filing, Geo-Jade Petroleum said it will invest no more than RMB 500 million ($78 million) in Caogen Touzi.
Caogen Touzi told Kr36 that the firm will focus on tapping the rural finance market in the future and use the funds for business development.
We are very excited to announce that N26, that’s us, now has over a million customers.
To celebrate we put together a look at how customers help us transact €1 billion a month. Before continuing though, we’d like to mention that while we do look at aggregated data, we never look at individual data unless explicitly asked to do so.
ING is launching a marketplace for SME financing in the Netherlands, which will open to other external financing providers, becoming the first Dutch bank in doing so.ING is keen to maximise the possibilities of open banking and is working with Yolt and Funding Options on bringing new features to customers across Europe.
ING is also expanding its money management capabilities offered to consumers with the launch of Yolt in France and Italy.
FinCompare, a Berlin, Germany-based fintech company, raised €10m in Series A funding.
The round was led by ING Ventures with participation from Speedinvest and Uniaq Ventures.
The company intends to use the funds for the expansion of the team, investment in IT and further growth.
Challenger bank Banco BNI Europa selects Alterestfor effortless loan data management (Banco BNI Europa Email) Rated: B
Banco BNI Europa and Alterest, an innovative loan data and intelligence platform, publicly announced today their partnership to streamline investment analytics and risk management between the bank and its credit originating partners. Initiated in Oct, 2017, the partnership comprised of data-feeds integration with tech-enabled lending platforms, implementation of a reconciliation process between operations and nostro accounts, and configuration of an IFRS9-compliant impairment calculation model.
The marketplace lending sector in Europe is growing, with a sharp focus on the small to medium sized enterprise segment, but it is still lagging UK and the US markets and lenders will need to ramp up scale and educate investors before a meaningful pipeline of securitization can build
A panel on focused on European marketplace lenders on day one highlighted the risks and the challenges facing the sector. Speakers hit on some well tread talking points, such as the availability of data on underlying loan portfolios and the lack of performance history.
Automated advice, robo-adviser, machine learning, AI-enabled expert advice, robo-advice digital journey, hybrid machine/adviser solution … in a very short space of time the advisory sector has coined a significant amount of terminology for robo-advice.
Being properly informed about these issues and asking the right questions of a provider can make an enormous difference in levels of investment.
Small business lender Prospa says it has taken a conservative approach in delaying its $576 million ASX float by two days, in order to respond to renewed concerns from the corporate regulator that its standard form contracts may contain unfair clauses in breach of consumer laws.
Online mortgage startup HashChing is advertising with a billboard above a Commonwealth Bank of Australia (CBA) branch.
The home loan marketplace has launched a campaign against the big banks, which includes this billboard in the Melbourne CBD. The slogan reads, “Our brokers will go to mortgage hell, so you don’t have to”.
Israeli alternative business lending company BlueVine today announced that it has closed $60 million iSeries E financing round led by Menlo Ventures, and including new investors, such as SVB Capital. All major existing investors also participated. Including this financing round, the company has raised $533 million to date including $128 million in equity financing and $405 million in debt financing. This latter figure included $200 million raised from Credit Suisse two months ago.
The new financing will support BlueVine’s plan to expand its highly-successful invoice factoring and business line of credit products, and to explore new products catering to small and medium-sized businesses. BlueVine also plans to use the funding to accelerate R&D hiring.
INDONESIA’S digital economy is set to boom, helping its overall economy expand from US$1 trillion in 2017 to US$2.7 trillion by 2027.
Over the next 10 years, we expect online retail in Indonesia to increase 14-fold from just US$4.4 billion in 2017 to US$63.2 billion, or 19 per cent of total retail sales versus 3 per cent currently.
To support this growth, as well as the rise in e-services such as ride hailing, travel bookings and food delivery, we expect an equally rapid adoption of e-money from just 2 per cent of nation-wide transactions in 2017 to 24 per cent by 2027.
We are also seeing the emergence of fintech solutions such as peer-to-peer lending targeting the 44 per cent of the population who do not have access to banking services today.
We’ve shifted our activities and are now mainly financing women’s businesses. Lending to women is safer in Indonesia. Statistics show that five percent of male borrowers, on average, will not pay back. With our female borrowers, it’s only 0.5 percent. Which is why we chose to focus on women. They also have a harder time getting financed. Now, 95 percent of the businesses we finance are women’s businesses.
The Eastern Caribbean Central Bank (ECCB) is aware of the emergence of several initiatives which compete directly with traditional financial services. These include but are not limited to: peer to peer lending, digital wallets, crowd funding ventures, crypto-assets and initial coin offerings (ICOs) in the Eastern Caribbean Currency Union (ECCU).