Thursday February 7 2019, Weekly News Digest

origination costs

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M. Today’s main analysis: International P2P lending volumes for January 2019. Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. […]

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

origination costs

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

Class Preliminary Rating Class Principal
A AAA (sf) $351,800,000
B AA+ (sf) $39,400,000
C A+ (sf) $51,500,000
D BBB (sf) $38,000,000

Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA

This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.

The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.

Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here).  Marlette announced another year of profitability in 2018.

Prosper’s December Performance Update showed that Prosper is focusing on making higher grade loans with 62% of December originations rated AA-B.

Overall, lenders view the US consumer as healthy and the US economic growth as solid.

The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA

So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.

There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.

The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:

The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.

Source: Online Lenders Alliance

The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.

Read the full Online Lenders Alliance response here.

LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA

LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.

Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.

Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA

1. BankMobile — Hooked Up With T-Mobile

Parent Company: Customers Bank
Websitewww.bankmobile.com
Launched: 2015
Category: Mobile bank

The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.

2. Chime — Super Slick App

Websitewww.chimebank.com
Launched: 2013
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships

3. Finn — Chase Bank’s Millennial Play

Parent Company: JPMorgan Chase
Websitewww.chase.com/personal/finnbank
Launched: 2017
Category: Mobile bank

Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).

4. Marcus — Sucking Up Your Customers

Parent Company: Goldman Sachs
Websitewww.marcus.com
Launched: 2016
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.

Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).

5. N26 — Platform Maestro

Websiten26.com
Launched: 2015
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.

6. Revolut — The Amazon of Banking

Website:www.revolut.com:
Launched: 2015
Category: Mobile financial provider

Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.

7. SoFi Money — Join The ‘Waitlist’

Parent Company: Social Finance, Inc.
Websitewww.sofi.com
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account

8. Varo Money — Almost OCC Approved

Websitewww.varomoney.com
Founded: 2015
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.

Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”

P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A

It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.

15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A

Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.

Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A

57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.

1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A

Key Findings

  • 1 in 4 Americans considers funding to be the biggest obstacle.
  • More women say not knowing how to run a business is a challenge than men.
  • Millennials ages 25 to 34 are the most afraid of failure.
  • 1 in 3 Americans lacks a strong business idea to begin with.
Source: Valpak

Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A

The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an 

Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A

United Kingdom

Due diligence on P2P platforms (FT Adviser), Rated: AAA

In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.

UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA

The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.

With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.

Source: Business Insider Intelligence

Read the full report here.

Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A

The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.

Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A

Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.

AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A

A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.

The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.

Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A

Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.

SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A

SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.

What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A

The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.

Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.

Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A

AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.

Exclusive: P2P firm shuts platform (AltFi), Rated: B

The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.

China

From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA

Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?

European Union

PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA

German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.

ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A

Dutch bank ING is linking its small business (SMB) customers to alternative lending marketplace Funding Options, the firms said on Monday (Feb. 4).

The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.

The Irish fintech startups disrupting their industries (Irish Times), Rated: A

Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.

Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A

The European challenger bank in Portugal, Banco BNI Europa, has become a customer of NDGIT, provider of the API platform for banking and insurance in Europe.

BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.

International

International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA

While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.

Source: Business Insider Intelligence

Why VC Is The Answer To Falling Returns (Forbes), Rated: A

In uncertain times, VC offers the advantage that its performance is completely uncorrelated with public equity markets. Last year, both the US and Europe saw record VC investment, reaching over 

Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A

Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.

In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.

TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.

Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A

SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.

The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.

Revolut team ups with WeWork (AltFi), Rated: B

The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.

Australia

Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A

Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.

APAC

Diversify investments in P2P lending, youths urged (The Star), Rated: AAA

Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.

To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.

Africa

DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA

The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.

Canada

Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA

iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.

iBank Products & Services:

Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.

Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.

Authors:

George Popescu
Allen Taylor

The post Thursday February 7 2019, Weekly News Digest appeared first on Lending Times.

Monday August 6 2018, Daily News Digest

China alternative assets

News Comments Today’s main news: Barclays buys stake in MarketInvoice. N26, Revolut are coming to America. Zopa raises 44M GBP for new bank. China private equity funds suffer. Linked Finance ink 10M Euro in loans in Q2. Today’s main analysis: The states where payday lending charges almost 700 percent interest. Today’s thought-provoking articles: PeerIQ’s MPL Securitization Tracker. Debut of the […]

China alternative assets

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Will Europe’s fintech banks conquer North America? (AltFi), Rated: AAA

Revolut and N26 will be launching in the US soon, but what sort of market will they be entering? How are local banks adapting their offerings to suit younger users? And what will be the impact of the newly-announced bank charters for fintechs?

PeerIQ’s MPL Securitization Tracker for 2Q2018 (PeerIQ), Rated: AAA

  • Twelve marketplace lending securitizations priced this quarter totaling $5.0 Bn, the highest level of quarterly issuance, representing 36% growth YoY.  To date, cumulative issuance equals $38.4 Bn across 126 deals.
  • We observed spreads widening and yields rising on new issuance. Weighted average all-in yields on consumer deals increased from 2.9% to 4.2% QoQ, and on student deals from 3.0% to 4.5% QoQ.
  • All deals issued this quarter except SoFi’s student loan passthrough securitizations were rated.   
  • Tranches continue to get upgraded. So far, ratings’ agencies have upgraded 51 consumer MPL tranches and 67 student MPL tranches that are outstanding.
  • Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 54% of MPL ABS transaction volume.
  • Freedom Financial issued its inaugural deal and OnDeck returned to the market. SoFi issued over $2 Bn in student loan passthrough securitizations.
Source: PeerIQ

Debut of the OCC’s FinTech Charter + Supervisory Standards (PeerIQ), Rated: AAA

The US economy added 157k jobs in July and the unemployment rate dropped to 3.9%. Wage growth came in strong at 2.7%, potentially fueling inflation down the road and keeping the Fed on its stated rate hike path.

OCC Asserts its Authority and is Open to Accepting SPNB Charters

Immediately following the report, Joseph Otting, Comptroller of the Currency, announced that the OCC would start accepting applications from “fintech companies that are engaged in the business of banking but do not take deposits.”

An SPNB can engage in a limited range of banking or fiduciary activities like credit card operations, taking deposits, paying checks, lending money, community development, or cash management activities. The policy is a significant development as companies with the Fintech charter would be able to perform banking activities like lending and payment processing nationally.

Who are the Likely Winners and Losers?

The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to credit. Payments companies that seek to compete with Visa/Mastercard also stand to benefit. Lenders that qualify for the charter may also have a competitive advantage. Payments arms of firms like Google, Apple, Amazon and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintechs that have liquidity, funding, or going-concern risks will struggle to obtain charters.

Less is more for OCC’s fintech financial inclusion plans (American Banker), Rated: A

The Office of the Comptroller of the Currency is threading a tricky needle.

It has affirmed that it plans to evaluate fintech charter applicants based on their fair lending efforts, but it’s pulled back on specifics for how that process might work. That has made some consumer groups nervous.

The OCC published an updated version of its licensing manual supplement for fintechs on July 31, in connection with an announcement that it’s begun accepting applications for fintech charters.

Fintech charter: Be wary of innovating into another crisis (The Hill), Rated: A

But before we allow fintech firms to bound over the regulatory mound, it’s important to take a hard look at why we regulate the financial services sector so thoroughly to begin with.

Many also claim that fintech will bank the unbanked and lead to financial inclusion. The only thing standing in the way of all of this change and disruption, many claim, is overbearing government regulation.

With OCC’s door officially open, will fintechs enter? (American Banker), Rated: A

Fintech companies now have the federal option they have long sought after the Office of the Comptroller of the Currency green-lighted firms to apply for a special-purpose bank charter. But winning OCC approval on charter bids will not be a walk in the park.

One day after the OCC announcement, some fintech firms signaled clear interest in the charter. But the agency’s decision also prompted a slew of additional questions, including whether firms would be able to meet the regulator’s tough criteria, and whether state regulators would continue to fight

Does a Bank Charter for Square Still Make Sense? CEO Jack Dorsey Thinks So (Bank Innovation), Rated: A

POS payments provider Square is still interested in pursuing a bank charter, but how? It may be more challenging given that the company will be paying more attention to its customer-facing prepaid products like Square Cash and its Cash Card, according to CEO Jack Dorsey in the company’s earnings call yesterday.

This map shows the states where payday loans charge nearly 700 percent interest (CNBC), Rated: AAA

Some short-term loans cost over 20 times more in interest than the average credit card. And yet one in 10 Americans have used them.

In the U.S. today, these loans are a $9 billion business. In the past two years, 11 percent of U.S. adults say they’ve taken out a payday loan, according to a recent survey of approximately 3,700 Americans that CNBC Make Itperformed in conjunction with Morning Consult.

Source: CNBC

This Rebrand Is Not Barking Up The Wrong Tree (Forbes), Rated: AAA

For 

$ 203.49 Million in Sales Expected for Elevate Credit Inc (ELVT) This Quarter (Fairfield Current), Rated: A

Equities analysts expect Elevate Credit Inc (NYSE:ELVT) to announce sales of $203.49 million for the current fiscal quarter, according to Zacks. Two analysts have made estimates for Elevate Credit’s earnings, with the lowest sales estimate coming in at $201.00 million and the highest estimate coming in at $205.97 million. Elevate Credit reported sales of $172.85 million in the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The business is scheduled to announce its next earnings report on Monday, October 29th.

NCUA’s Proposed Payday Alternative Loans Unattractive to CUs: Trades (CU Times), Rated: A

A new payday alternative program proposed by the NCUA is unlikely to convince many more credit unions to offer short-term loans because the loan terms are too prescriptive, credit union trade groups said.

Why Real Estate Deals, Not Startups are the Big Success Story of Equity Crowdfunding (Crowdfund Insider), Rated: A

In the year after Title III went into effect, startups received only $38 million in equity crowdfunding, according to Bloomberg—an amount that amounted to “a rounding error” in the larger system.

Before the JOBS Act, there were three formidable barriers to widespread individual investment in commercial real estate.

  1. Limited access to deal flow
  2. Inconvenience
  3. High minimums

Online crowdfunding has eliminated all three barriers

To begin with, the process is far more transparent and accessible, with minimum investments dropping to as low as $10,000.

ICBA calls for a new FDIC moratorium on industrial loan charter applications (American Banker), Rated: A

Renewing longstanding opposition to industrial loan charters, the Independent Community Bankers of America urged the Federal Deposit Insurance Corp. to impose a two-year moratorium on such applications.

The trade group also pressed the FDIC to reject an application from the student loan servicer Nelnet for an industrial loan charter.

Lenders One Names Michael Kuentz as Chief Executive Officer (Altisource), Rated: A

Lenders One Cooperative, a national alliance of independent  mortgage bankers, announced that Michael Kuentz has been promoted to the role of Chief Executive Officer of Lenders One by its Board of Directors. Mr. Kuentz previously held the title of President. In his new role, he will assume responsibility for Lenders One’s day-to-day operations and strategic execution as well as continue to lead and manage the cooperative’s sales effort.

United Kingdom

Barclays takes stake in SME lender MarketInvoice (Banking Tech), Rated: AAA

Barclays has taken a “significant” minority stake in UK-based SME lending platform MarketInvoice.

Details were not disclosed, because we live in the age of secrecy, but the bank says the deal is a key part of its plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.

P2P lender Zopa raises £44m to fund new bank (Financial Times), Rated: AAA

Zopa has raised £44m in a new funding round to aid its expansion into traditional banking as its traditional peer to peer business comes under pressure from regulators.

Wonga investors inject £10M so cash-strapped payday lender can fund claims (TechCrunch), Rated: A

Yesterday Sky News reported that those same two, Accel Partners and Balderton Capital, are among a group of Wonga investors that have agreed to inject a further £10M (~$13M) into the business to help fund compensation claims related to its past censured practices.

Can this new breed of robo-advisers help you take control of your money? (The Telegraph), Rated: A

Savers have historically been forced to choose between picking and managing their own investments, paying for financial advice, or, recently, handing their money over to a “robo adviser” to do it for them.

China

China private equity funds suffer wave of closures (Financial Times), Rated: AAA

Chinese alternative asset managers have become the latest casualty of the country’s crackdown on debt and financial risk, with a record number of private equity and hedge funds dissolving in recent months as new regulations limit their fundraising.

In the first six months of this year, the Asset Management Association of China (Amac) — a government-controlled industry body — “lost contact” with 163 private fund institutions, more than 70 per cent of the total for which contact was lost for 2017.

Source: Financial Times

Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation (SCMP), Rated: A

Yao Kunjie, 28, is the CEO of peer-to-peer lending platform Beimi Wallet and was named on the financial sector list on Thursday.

Forbes magazine puts out regional lists of high achievers born after January 1, 1988, in 20 sectors every year.

The announcement came just a week after Shanghai police said Yao had been detained on July 13 on suspicion of “illegally absorbing public funds”, without elaborating, in a statement last Saturday.

Qudian Tries to Distance Itself from Other P2P Lenders (Capital Watch), Rated: A

Qudian Inc. (NYSE: QD) defended its business model Friday, saying that it is not undergoing the same “[volatility] and uncertainty” suffered by China’s broader peer-to-peer industry.

The announcement sent the company’s stock up nearly 5 percent mid-afternoon to $7.59 per American depositary share.

Source: Capital Watch

China lends trillions to SMEs, farmers as part of inclusive finance push (Global Times), Rated: A

For example, banks’ balance of loans to farmers stood at 30.95 trillion yuan ($4.53 trillion) as of the end of 2017, up 48.2 percent from 2013. The balance of lending to small and micro-sized businesses stood at 34.74 trillion yuan in 2017, up 73.1 percent from 2013, according to Feng.

European Union

€10m loans mark record quarter for Linked Finance (Independent), Rated: AAA

Linked Finance, an Irish peer-to-peer (P2P) lending platform, recorded its strongest quarter to date in the three months to the end of June, facilitating over €10.1m to Irish SMEs.

This followed on from a strong start to 2018, with total lending for the year now more than €18.7m, up 65pc on the same period in the previous year.

The increase in lending is down to both the volume and size of loans. The number of loans that went live on the platform rose by 39pc in the period to 335, with average loan size up 19pc to almost €56,000.

BANCO BNI EUROPA LAUNCHES EQUITY RELEASE IN SPAIN WITH ÓPTIMA MAYORES (Fintech.Finance), Rated: A

Banco BNI Europa launches equity release in Spain in partnership with Óptima Mayores, the Spain’s leading financial advisor specialized in this segment.

Altisource Names Justin Vedder as Chief Operating Officer of Origination Solutions (Altisource), Rated: B

Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a leading provider of services and technologies to the mortgage and real estate industries, today announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions.

International

How Fintex Capital Enabled the $ 30M Banco BNI Europa Investment in Upgrade Loans (Lend Academy), Rated: AAA

Last month we learned about the new $30 million investment received by Upgrade from the Portuguese digital bank Banco BNI Europa.

In reality BNI Europa did not actually purchase Upgrade loans, they invested in a privately placed bond that was backed by Upgrade loans. This bond was issued by Fintex Capital.

India

Regulations Shrink India’s Peer-To-Peer Lending Industry (Bloomberg Quint), Rated: AAA

When the Reserve Bank of India first brought out a discussion paper on peer-to-peer lending in April 2016, it said that there were 30 such start-ups in the country. It then proceeded to fashion a set of rules for the nascent but fast growing sector and came out with regulations in October 2017. Key among them was a requirement that peer-to-peer lenders register with the RBI.

Nine months since, only five of these lenders are registered in the ‘NBFC-P2P’ category, according to RBI data available until June 30, 2018.

This includes:

  • Fairassets Technologies India Pvt. Ltd.
  • Fincquare Fintech Pvt. Ltd.
  • Bridge Fintech Solutions Pvt. Ltd.
  • Bigwin Infotech Pvt. Ltd.
  • OHMY Technologies Pvt. Ltd.

Cashkumar foresees huge potential in online lending for short-term credit (The Hindu Business Line), Rated: A

Peer-to-peer (P2P) lending company Cashkumar, which offers short-term credit to borrowers, foresees huge potential to lend in the online space.

At present, the company services around 200 loans a month . It is targeting to service about 80 loans a day in the next six months, besides expanding operations to 20 cities by next year.

Asia

Japan’s Samurai Asset Finance Offers Loans Collateralized by Digital Assets (Bitcoin Exchange Guide), Rated: A

A Japanese firm listed on the Tokyo Stock Exchange recently unveiled loans that can be collateralized by three digital assets, namely BitcoinBitcoin Cash and Ethereum. As of now, the maximum amount borrowable is capped at 300 million yen (approximately $2.7 million).

Currently, the loan limits range from a minimum of 20 million yen ($180,000) to a maximum of 300 million yen ($2.7 million). The default repayment period is twelve months, although there are provision for extensions. The interest rates for these loans start from 7% to 155 annually, inclusive of commissions and extensions charges. If a lender fails to repay the loan in time, they will liable to a delinquency charge of 20% per year.

Crypto for real estate (Business Times), Rated: A

WE believe, in time, all real estate assets will reside on the blockchain – this is the grand vision of real estate entrepreneurs Julian Kwan and Alice Chen. The married couple – who co-founded Singapore-based real estate crowdfunding platform InvestaCrowd – has created a new product: RealFuel,

IMDEX ICO (IMDX Token): Decentralized Exchange & Crypto Banking Platform? (Bitcoin Exchange Guide), Rated: B

It’s difficult to ascertain much information about the people behind IMDEX. The company appears to have some connection to a Korean company called Techton Soft that was established in 2016. The Techton Soft website indicates that the company specializes in investment trading solutions, peer-to-peer lending, artificial intelligence, and cryptocurrency exchange. The Techton site states that the company has 10 employees, making it a rather small operation, and lists a man named SangHyun Kim as the CEO.

Authors:

George Popescu
Allen Taylor

Monday July 23 2018, Daily News Digest

securitization

News Comments Today’s main news: OnDeck completes two international credit facilities. Elevate launches prime credit card for non-prime customers. RateSetter backtracks on Rolling Market rate changes. China’s P2P lender are falling like dominoes. Banco BNI Europa invests in US consumer loans. Today’s main analysis: Deloitte’s survey on fintech lenders. Today’s thought-provoking articles: An inside look at SoFi-Promontory Interfinancial Network […]

securitization

News Comments

United States

United Kingdom

China/Hong Kong

International

India

Other

News Summary

United States

Elevate launches prime credit card for non-prime consumers (Bankless Times) Rated: AAA

Elevate and Capital Community Bank of Utah announced the launch of Today Card powered by Mastercard. As the first non-prime credit card with a full suite of prime features, Today Card will be issued by Capital Community Bank of Utah and will specifically help expand access to credit for members of the New Middle Class, the nearly 160 million non-prime Americans who are too often overlooked by mainstream financial institutions.

An Inside Look at Bank/Fintech Partnerships: Promontory Interfinancial Network and SoFi (Lend Academy) Rated: AAA

The recent surge in financial innovation has caused many community banks to rethink how they are serving their customers and what they can do to improve that experience. I recently spoke with two community banks about their decision to buy SoFi loans using Promontory Interfinancial Network’s service.

I spoke with Brian Plum, CEO of Blue Ridge Bank, which is a Virginia based community bank with mortgage offices in North Carolina, and Nicole Austin, Chief Lending Officer of Pioneer Bank, which is a New Mexico-based community bank.

Both banks had experience in looking at fintech partnerships before moving ahead with their decision on the SoFi program. They both said that as lending and banking changed, they needed to better understand how new technology could help their businesses.

Lowest Jobless Claims since 1969, Strong Bank and Card Issuer Earnings (PeerIQ), Rated: AAA

Blackstone is launching a $10 Bn direct lending fund focused on middle-market corporate credit opportunities. The search for yield has pushed investors into higher-yielding middle-market lending, with direct lending funds raised $54 Bn in 2017. Consumer, small-business and middle-market lending have been a consistent theme among investors starved for yield by low global interest rates.

Deloitte’s Survey on Fintech Lenders

The main take-aways from the study:

1. 7% of respondents listed cost of funding as one of the top 3 concerns, with liquidity and an inability to diversify rounding out the top 3.

Source: Deloitte, PeerIQ

PeerIQ view: Securitization remains the cheapest source of large-scale financing. MPL bonds continue to go mainstream as credit spreads tighten vs comparable consumer credit issuers. Emerging issuers continue to take efforts to build a brand in the ABS markets via repeat issuance.

Source: Deloitte, PeerIQ

3. Investors remain interested in the online lending space with $11 Bn in equity capital expected to flow into the sector in 2018. The number of startups has decreased, suggesting a maturing market and some consolidation.

Why You Should Bank Without a Branch (US News) Rated: AAA

The first online banks hit the U.S. market more than 20 years ago, attracting customers with higher interest rates and lower fees. While some early innovators are no longer operating, others have evolved. Take ING Direct, for example, which was acquired by Capital One and transformed into Capital One 360 in 2012, or Ally Bank, which is one of the most dominant names in the online banking market.

Today, however, these banking institutions face competition from new direct banks as well as traditional banks that are looking to expand using the online-only model. For instance, Finn by Chase and Marcus by Goldman Sachs bring digital banking to areas in which the companies have no physical presence.

Long-Term Business Loans Available Today (LendEDU) Rated: A

Fortunately, some lenders offer long-term small business loans, which give borrowers the opportunity to repay the loan over a longer period of time (typically up to 25 years).

Long-term business loans certainly do exist but if you’re hoping to score one, you’ll need to have an established business (i.e., no startups or new businesses) and have good business credit.

There are a variety of lending institutions, both traditional and non-traditional, that offer long-term financing, so it’s always best to review all your options, including those offered by your chosen banking institution. However, there are a few lenders that consistently top the charts, and those that follow are known to offer competitive rates, flexible terms, quick access to funds, and positive customer feedback.

Compare Long-Term Business Loans

Loan Amounts

$5,000 – $300,000

$25,000 – $500,000

Term Lengths

Up to 60 months

Up to 60 months

APR Range

10% – 35.5%

4.99% – 26.99%

Walmart’s pay-advance app Even used by 200,000 employees (American Banker) Rated: A

Walmart’s experiment with offering Even.com’s money management and pay-advance app to employees appears to be off to a good start.

The retailer launched the app to employees in December. On Thursday, Walmart and its fintech partner announced that 200,000 Walmart employees are now using it. (The retailer employs 1.5 million people in the U.S.)

About 75% of associates use the app every week and 46% use it every day.

DFS Report Indicates Increased Level Of Online Lending In New York (Mondaq) Rated: A

The New York State Department of Financial Services (“DFS”) found that online marketplace lending has increased dramatically since 2015. In the newly published report, DFS analyzed responses from a “New York Marketplace Lending Survey” along with comments from relevant stakeholders.

Based on data from 2017, DFS found that:

  • the total number of loans increased approximately 118% and the total dollar amount of all loans increased approximately 42% as compared to 2015 levels;
  • many more individuals were being served in this market than small businesses;
  • lenders generally charge a variety of fees (e.g. origination fees, closing fees, processing fees, maintenance fees, transactional fees, and penalty fees), with origination fees being the most common;
  • delinquent loans (both to individuals and businesses) represent approximately 11% of the total number of loans outstanding as of the end of 2017; and
  • respondents used “internal models with various inputs provided by the applicant such as employment history, business history, bank statements and tax records” to determine whether a borrower qualifies for a loan.

LendKey, Gradifi Help U.S. Employers Offer a Student Loan Refinance Benefit to Employees (Business Wire) Rated: A

Gradifi today said it is now offering access to LendKey’s nationwide network of lenders through Gradifi Refi, a student refinance program for employers seeking to help their employees save money or reduce the monthly payment on their student loans.

Gradifi Refi is one of three employee benefit solutions from Gradifi that enable employers to positively impact their employees’ financial well-being. Gradifi’s SLP Plan (Student Loan PayDown) benefit helps employees pay off their student loans faster through employer-sponsored contributions to their student loan provider. The College SaveUp benefit helps employees save for their children’s education and avoid further student debt through employer contributions to an employee’s 529 college savings plan account.

LendingTree Announces Top Customer-Rated Lenders by Loan Product for Q2 2018 (Markets Insider) Rated: B

Mortgage Category

#1 Winner:
loanDepot, LLC

Personal Loans Category

#1 Winner:
LendingClub

Home Equity Loans Category

#1 Winner:
First MidWest

P2Bi partners with Amalgamated Bank (Bankless Times) Rated: B

P2Binvestor (P2Bi), a marketplace lending platform offering crowdsourced, asset-secured lines of credit to growing companies, today announced a partnership with Amalgamated Bank, a socially responsible bank based in New York.

The P2Bi bank partnership program gives growing businesses a way to quickly access capital while allowing banks to increase their addressable market and improve their conversion rates. This particular alliance will enable Amalgamated Bank to continue to help fund emerging socially responsible businesses.

Colonial Partners with Roostify for Superior Online Mortgage Experience (PR Newswire) Rated: B

Starting today, Roostify’s online, mobile-friendly application and loan collaboration tools will be available to all of Colonial retail mortgage branches and its Home Loan Center national call center.

United Kingdom

RateSetter backtracks on Rolling Market rate changes (Peer2Peer Finance) Rated: AAA

RATESETTER has reversed its decision to stop investors setting their own rate for capital reinvesting on its Rolling Market.

The peer-to-peer lender implemented an overhaulof its popular Rolling Market product on 6 June, no longer allowing investors to set their own rate on reinvested money.

In an email to customers, the lender said feedback demonstrated how much investors valued the option to set their own rate for capital reinvesting.

Some challenger banks are challenging (The Finanser) Rated: AAA

The UK’s challenger banks are busy getting on with it. They’ve got their licences, they’ve deployed their services, they’re partnering with third parties and creating marketplaces. Much of this was cited in a report by CBInsights, comparing the features of the five most notable new ones: Atom, Starling, Monzo, Revolut and Tandem.

N26 were also included, but is not a UK start-up and their report builds on the one I blogged about last month from Optima. The thing I took from the CBInsights report is the massive numbers of users that Revolut and Monzo have already gained. At that time, it was 1.5 million for Revolut and 500,000 for Monzo.

Starling marketplace grows with Growth Street addition (FinTech Futures) Rated: A

Growth Street will be the first SME finance provider on Starling Bank’s in-app marketplace, giving users access to services like pensions, insurance and loyalty schemes.

This partnership is Growth Street’s first marketplace integration, and represents the first live use of its third-party API. The firm is a P2P platform that matches investors’ funds with growing SMEs.

MarketInvoice looks to bolster its financial crime prevention (Peer2Peer Finance) Rated: A

MARKETINVOICE is looking to bolster its financial crime prevention with the appointment of dedicated anti-money laundering (AML) officer.

All regulated firms have to have someone in the business with responsibility for AML monitoring, with some choosing existing staff and others making it a dedicated role.

The peer-to-peer business finance platform is advertising for a AML/financial crime officer to sit within its legal unit.

The IFISA Phenomenon – The New Way to Invest (Dispatch Weekly) Rated: A

There are different types of ISAs including Cash ISAs and Stock & Shares ISAs but the Innovative Finance ISA (IFISA) is fast becoming the new trend in the ISA market.

Source: The Weekly Dispatch

Home loans turned us into a hot property, says Christian Faes, founder of lendinvest (The Sunday Times) Rated: A

Christian Faes could hardly have picked a worse time to get into mortgage lending. It was 2008, financial markets were in free fall and most people were more concerned about putting food on the table than buying a house.

That did not deter Faes, a former lawyer who had moved to London from Australia’s Gold Coast 10 years earlier. He co-founded Montello Bridging Finance in a “windowless serviced office” in the City and set about cold-calling potential investors. “The idea was really sound, but it wasn’t the best moment to be setting up a mortgage lending company,” said Faes, 41.

China/Hong Kong

China’s Peer-to-Peer Lenders Are Falling Like Dominoes as Panic Spreads (Bloomberg) Rated: AAA

The shakeout in China’s $192 billion peer-to-peer lending industry is accelerating at a rapid clip.

At least 118 platforms have failed this month through early Friday, according to Shanghai-based Yingcan Group, whose tally for July stood at 57 just three days ago. The number of failures, which includes platforms that have halted operations or come under police investigation, is already the highest in two years with more than a week left in the month.

China’s clampdown on financial risk has weighed on P2P platforms for the past two years, but the pressure has intensified in recent months after the country’s credit markets tightened and the banking regulator issued an unusual warning to savers that they should be prepared to lose all their money in high-yield products. While that has triggered bouts of panic among users of smaller P2P platforms, there’s little evidence that the turmoil has spread to more systemically important parts of China’s financial sector.
Source: Bloomberg

Chinese Investors Reel as Internet Lenders Close (Wall Street Journal) Rated: AAA

A string of Chinese internet lenders have shut their doors in recent weeks, stranding investors as the economy slows and regulators tighten controls over an unruly side of the fintech sector.

Across China, more than 200 internet-based fund managers since late June have either shut down, closed parts of their operations or are reeling from cash crunches, missing executives and other problems, according to industry tracker Wangdaizhijia.

The tide began to turn against the sector as an end-of-June deadline for new stringent registration regulations approached. With a slowing economy making it difficult for some companies to pay back loans, some lenders decided to shut down, analysts said. Investors, already souring on the sector, began pulling out funds, further pinching the lending platforms.

Source: Wall Street Journal

Distributed Credit Chain wants to use blockchain to prevent the next financial crash (Tech World) Rated: A

Figures from Bloomberg Economics based on data from the People’s Bank of China indicated that three major assets of shadow banking – trust lending, entrusted loans and banks’ acceptances – increased by $555 million in 2017. Entrusted loans, for example, are when businesses loan money to each other, using banks as intermediaries. Meaning that larger (state owned) companies may lend money to smaller companies and make a profit from the differences in interest.

Micro-lending is another phenomenon that has ballooned in recent years, with a proliferation of online lending or peer-to-peer lending platforms springing up. Outstanding debts on these sites increased by 256 percent between October 2015 and October 2017, topping 1.2 trillion yuan (over $179 million).

These issues have been acknowledged by the Chinese government, with China’s top banking regulator, Guo Shuqing, promising the shadow banking industry will be ‘dismantled’.

Shanghai vows to ramp up enforcement of P2P lending platform regulations (Global Times) Rated: A

The Shanghai municipal government has announced it will soon launch a campaign to enforce compliance of financial regulations on the city’s peer-to-peer (P2P) online lending platforms, according to a report by domestic website the Shanghai Observer, in a sign that local authorities will put order into China’s troubled fintech sector.

The Shanghai Office of the Leading Group for the Special Campaign against Internet Financial Risks said that it will  investigate the local online lending industry and severely punish those committing illegal fundraising and financial fraud, as well as fugitive owners. The authorities have reasserted their support of law-abiding firms in a bid to promote a more orderly internet finance industry.

In the last 50 days, up to 163 P2P lending platforms have essentially gone out of business, stopping cash withdrawals from customers, and many have seen their owners run away and declared fugitives,  chinanews.com reported.

Jim Rogers-backed ITF to miss August deadline for virtual bank licence in Hong Kong (South China Morning Post) Rated: B

ITF, a fintech company backed by US veteran investor Jim Rogers, plans to apply for a virtual bank licence in Hong Kong, but will not rush to meet the first application deadline on August 31.

The fintech firm would prefer to wait for more details about regulations, according to its adviser Ignious Yong.

European Union

Creditshelf raises €16.5m through landmark IPO (AltFI News) Rated: AAA

German mid-market lending platform Creditshelf has successfully closed its IPO, raising €16.5m at the fixed price €80.00 per share.

In the end, the company had no need of its €15m backstop order, provided by Hevella Capital GmbH & Co. KGaA, part of a group controlled by Rolf Elgeti. But Obotritia Capital KGaA, which is also part of the group, subscribed for an additional amount of €1.5m, underlining its support for the firm.

International

OnDeck Completes Two New International Credit Facilities (PR Newswire) Rated: AAA

OnDeck (NYSE:ONDK) announced today the closing of an AUD75 million asset-backed revolving credit facility with Credit Suisse, and the closing of a CAD50 million asset-backed revolving credit facility with Crédit Agricole, to finance OnDeck originations in Australia and Canada, respectively.

The new Credit Suisse facility will be used to refinance OnDeck Australia’s current loan book at a significantly lower cost, as well as to fund future originations. The Crédit Agricole facility is the first for OnDeck Canada and provides the business with access to CAD25 million of committed capacity and an additional CAD25 million of capacity available at the discretion of the lenders.  Both facilities are floating rate and have an initial weighted average interest rate of approximately 5.6%. The Credit Suisse facility and Crédit Agricole facility are scheduled to mature in June 2020 and June 2021, respectively.

Banco BNI Europa invests in US consumer loans via Fintex and Upgrade, Inc (Fintech Finance) Rated: AAA

European challenger bank Banco BNI Europa and Fintex have entered into a strategic partnership to invest in Upgrade’s consumer loans and expand access to affordable credit to consumers in the United States. Banco BNI Europa, which is active across Europe, now invests in US consumer loans through Upgrade, one of the fastest growing platforms in the US. This loan purchase programme was implemented by Fintex Capital, which issued a bond to Banco BNI Europa backed by the portfolio and Fintex acts as asset manager for the underlying loans.

As part of the agreement, Banco BNI Europa committed an initial sum of USD 30 million. Banco BNI Europa has already invested in US consumer loans originated on platforms like Lending Club and Prosper through a third-party fund.

How the Blockchain is Helping Redefine Business Financing (Equities) Rated: A

In fact, one report by CB Insights found that about 29 percent of startups failed because they ran out of working capital, which speaks volumes about the morbid state of business financing for startups and budding businesses.

Consequently, business financing has become one of the many areas of fintech that could benefit immensely from blockchain, the decentralized ledger that has been disrupting industries for over a decade.

Here are a few ways that showcase why blockchain could change the way enterprises access funding.

Credit Rating Firm Backs $ 8 Million Fundraise for Crypto Alternative (CoinDesk) Rated: A

A startup looking to build a credit scoring protocol on top of the recently-launched Ontology blockchain has raised $8 million in seed funding.POINTS, founded in 2017, said it drew funding from a mix of traditional venture capitalists including Danhua Capital and Ceyuan Ventures, a backer of OKCoin. Other participants in the seed round include the Ontology Foundation as well as Zhong Cheng Xin Credit Technology, China’s first nationwide credit rating agency.The new capital will be used to expand the company’s engineering team in an effort to speed up its development of blockchain-based know-your-customer (KYC) and credit scoring applications. The idea is to build its protocol on top of a decentralized network and empower apps that can eliminate repetitive processes around identity.

Bitcoin Holds the Line, Salt Slumps, Dash Drives Onward (Blockonomi) Rated: A

The crypto lending platform Salt Lending just got a dose of some strange news when the company suddenly released an announcement stating the appointing of what they call an interim CEO. The former CEO ,who was essentially the face of the company and one of the cofounders, Shawn Owen, appears to have left the company.

But the circumstances under which he left are unclear.

Salt tokens (that run on Ethereum) have been on a strong downward slide for the last few months, and are currently sitting at just over one dollar each. The tokens entered the market at the three dollar range and so are down by more than 66% post ICO. It is also unclear as to whether or not Salt Lending is still operating or giving out new crypto-to-cash loans.

RAD Lending: The Future of Crypto-Assets Backed Lending (News BTC) Rated: A

The growing user base of cryptocurrency and related products has skyrocketed, with the highest number originating from countries like New Zealand, Denmark and Belgium. The community growth is expected to follow the upward trajectory to hit 100 million users soon.

RAD Lending platform might just be the push the market needs to fill the gap between crypto holdings and real-life fiat spending. The P2P lending platform from RAD will act as a matchmaker between loan requests and funding proposals.

India

Digital lending to become $ 1 tn opportunity in India over next 5 years (Money Control) Rated: AAA

A Boston Consulting Group (BCG) report suggests that digital lending in India will become a $1 trillion opportunity in the next five years.

According to the report, four fundamental drivers that pushed the space are internet giants that changed the way consumers behave, rapid growth in technological advances including the proliferation of smartphones and consequent increase in the consumption of data. Also the digital market lending prospered under supportive regulatory conditions across the globe.

Funding in Indian startups this week (16 July-21 July) (EnTrackr) Rated: AAA

This week 16 startups received funding, of which 10 received a total sum of about $228.5 million. Among them, BookMyShow raised the highest investment of $100 million, followed by Cars24 which raised about $50 million.

Meanwhile, funding for six of the total funded startups remained undisclosed.

Source: EnTrackr

Lending platform LenDenClub gets NBFC-P2P certification from RBI (MediaNama) Rated: A

P2P lending platform LenDenClub has received its NBFC-P2P certification from the Reserve Bank of India (RBI), the Economic Times said. The RBI issued those guidelines last October, to register and accredit P2P lending firms that resell loans from individuals who have money to invest.

RBI’s registry will help solve problem of credit shortage: iSpirt’s Sharad Sharma (Livemint) Rated: A

Out of the 8.8 million businesses in India that file taxes, at least 6.6 million businesses do not have access to the credit sources such as banks, non-banking financial companies (NBFCs), and upcoming online lenders. This is a problematic situation for both lenders, and for businesses (especially small businesses), looking for capital loans.

The problem of credit shortage for small businesses is daunting, but the regulators in India have already set things in motion to address the issue. According to Sharma, the revamped goods and services tax (GST) structure, the Reserve Bank of India’s (RBI’s) new public credit registry (PCR) initiative, and UPI (Unified Payments Interface) 2.0 will solve the shortage of data for lenders.

Here’s a look at some brands that are making India artificially intelligent (Business Standard) Rated: A

The rise of promising tech-startups has been successful in ushering India into a dawn of technology.

While AI is believed to revolutionize the current modus operandi and bring about fast-paced automation and efficiencies, it still remains an abstract topic, palled by a lack of nuanced understanding amongst the general public.

Here are some enterprises that are integrating AI in everyday tasks:

Faircent: Making Lending more conducive with AI & Machine Learning

If you think AI is only limited to the IT industry, think once again. Faircent, India’s largest P2P (peer-to-peer) lending platform, has been utilizing the technology to provide users with money during your financial crunch. Doing away with methodologies of conventional lenders (which can often prevent a creditworthy applicant from securing a loan,) the platform leverages Machine Learning and Artificial Intelligence to enhance the effectiveness of its credit profiling and assessment.

Ebix acquires enterprise lending software company Indus for $ 29 M (Your Story) Rated: A

Global on-demand software provider Ebix Inc on Friday announced the acquisition of Indus Software Technologies Pvt. Ltd. (Indus), a global provider of enterprise lending software solutions to financial institutions, captive auto finance and telecom companies, for approximately $29 million, including $5 million of contingent earn-out.

Further to this acquisition, key Indus business executives will become a part of the combined EbixCash senior leadership. The acquisition will increase the employee strength of Ebix in India by 900, to approximately 7,200 employees.

Canada

Fintech OnDeck Canada lines up $ 50-million credit facility from Crédit Agricole (Financial Post) Rated: AAA

OnDeck Canada, the local online arm of the U.S. headquartered OnDeck now has a $50-million asset-backed credit facility, provided by Crédit Agricole, to fund its loans. According to a recent ranking of assets, the French bank is the world’s ninth largest. Its Montreal office offers commercial and investment banking services.This is the first time that OnDeck Canada — which has originated $180 million in small business loans since 2014, all made using a “wide spectrum of data, technology and analytics” — has arranged funding from a source other than its parent.There are two parts to the three-year facility that will finance loan originations created by OnDeck Canada: a $25-million committed facility and an extra $25 million that can be drawn if needed. OnDeck provides term loans up to $250,000 and revolving lines of credit of up to $50,000 to small business.

Authors:

George Popescu
Allen Taylor

Loan Amounts

$5,000 – $300,000

$25,000 – $500,000

Term Lengths

Up to 60 months

Up to 60 months

APR Range

10% – 35.5%

4.99% – 26.99%

on LendingClub’s secure website

on Funding Circle’s secure website

Wednesday June 27 2018 Daily News Digest

Bank of Amazon unbundling financial services

News Comments Today’s main news: Consumer debt surpasses mortgage debt. Funding Circle, INTRUST Bank expand partnership. Revolut offers app store for business banking. VPC Specialty Lending hits record monthly returns. Today’s main analysis: Amazon’s big push into lending, and beyond. Today’s thought-provoking articles: The past and future of banking. Should income investors consider P2P lending? Banks can’t partner themselves into […]

Bank of Amazon unbundling financial services

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Consumer Debt Now Surpasses Mortgage Debt (Investopedia) Rated: AAA

Mortgages may represent the largest debt for households, but as a percentage of disposable income, home loans are comprising less of a liability, LendingTree found.

In a research report, the online lender, which analyzed data from the Federal Reserve, said that mortgage-related household debt has declined 5.5%, while consumer credit, which includes revolving credit and installment loans, jumped 45%. Of that, 42% was student loan debt. What’s more, LendingTree found that American household debt is on track to hit $1 trillion above the 2008 peak by the end of June. The debt figure has been increasing at a 3.4% annual rate and includes mortgage debt.

By the end of the second quarter, LendingTree is forecasting total mortgage and consumer debt to reach $15.7 trillion compared with $14.7 trillion 10 years ago.

INTRUST Bank and Funding Circle expand partnership (PR Newswire) Rated: AAA

Funding Circle, the small business loans platform, and INTRUST Bank, a leading US regional bank headquartered in Kansas, today announced the next phase of their strategic partnership to support the growth of US small businesses. Following the successful launch of this partnership earlier this year, the second phase increases INTRUST’s funding commitment and kicks off a targeted, co-branded marketing campaign, giving business owners across KansasMissouriOklahoma, and Arkansas greater access to fast and flexible financing.

To date, over 150 American small businesses have received loans backed by INTRUST through the Funding Circle platform. The upsized commitment is anticipated to increase this number above 500.

Amazon and Their Push Into Fintech (Lend Academy) Rated: AAA

Last week CB Insights released this really interesting report titled, Everything You Need To Know About What Amazon Is Doing in Financial Services.

Source: Lend Academy

The report provides an in depth look at the moves Amazon has made in payments, lending, the new Amazon Cash program and also takes a look at how the company has been developing fintech programs internationally.

By the simple addition of a debit card, Amazon could move the unbanked into a quasi bank account that could be used at places beyond Amazon.

They have had a small business lending operation since 2011 and much fanfare was made about the $3 billion they have loaned through June 2017. But that doesn’t even put them in the top three online small business lenders in that time period. OnDeck, Kabbage and CAN Capital all loaned more.

To be fair Amazon is not trying to be a general purpose lender. Their SMB lending operation is targeted solely at Amazon marketplace sellers as a way to help them grow their business so they will sell more products on Amazon. It is not clear they have a desire to do more than that.

Source: CB Insights

The Banking Industry: Past and Future (The Motley Fool) Rated: AAA

INDUSTRY FOCUS // Financials // 06-25-2018

One of the big things that’s happened over the past 25 years is that the big banks have gotten bigger. We now have what are known as the Big Four banks in the U.S. — CitigroupBank of AmericaWells Fargo and JPMorgan Chase. All of those have grown substantially through acquisitions, not just from the financial crisis, which saw a lot of consolidation, but beforehand. Actually, three of the four were actually acquired themselves, and the acquiring companies just decided to keep the names because they were more recognizable.

Douglass: I believe that peer-to-peer lending will represent at least 25% of total lending spent in 25 years. Now, I only say 25%. For me, it’s very clear that peer-to-peer lending has become a lot more widespread and a lot more feasible than it was previously. I do expect the peer-to-peer lenders — or a bank, perhaps, who hops in — to help solve for one of the current difficulties, which essentially is poor underwriting by some of the peer-to-peer facilitators right now, meaning that the investors who are putting the money in aren’t making the kind of money that they’d hoped to — I believe those will ultimately be solved.

But, I only say 25% because banks have legitimately trillions of dollars to lend, and they will absolutely be looking for ways to deploy that capital effectively. So, I would expect that they will be helping facilitate a lot of these peer-to-peer loans. I believe they will be, in some cases, investing alongside. I think they will often invest in alone, and perhaps then sell it to peer-to-peer lenders for an arbitrage so that they can do it all again, sort of like you see with agency-backed mortgages.

Marcus Is Not Adding Credit Cards Products … Yet (Bank Innovation) Rated: A

Marcus, the consumer lending arm for Goldman Sachs, wants to become the one-stop shop for many of your financial matters, except for one: credit cards — at least for now. Right now, Marcus is heavily focused on launching a savings platform in the U.K. in the coming months, Talwar said. 

The challenges for a new ‘bank’ with a famous parent (American Banker) Rated: A

When JPMorgan Chase set out to make its digital-only brand Finn, it quickly rejected the idea of using it to lure millennial customers over to the institutional side of the bank.

Finn has also found that for the 27 states where JPMorgan Chase is part of a shared ATM network but has no ATMs or branches of its own, customers have difficulty depositing cash. While those same customers can still withdraw cash and often don’t carry money with them, customers that work for tips have a hard time keeping Finn as their main banking account.

Sharestates Launches New Loan Programs  (PR Newswire) Rated: A

Sharestates announced the launch of a Long-Term Portfolio Loan Program to facilitate the needs of borrowers throughout the life cycle of their real estate projects.

Some highlights of the Long-Term Portfolio Loan Program include 30 and 40-year mortgage terms, interest rates ranging from 5.99 to 7.5%, loans with a 10-year interest only period, followed by 20 or 30 years of amortization, as well as the ability to cover three or more properties under a single loan.

Venmo officially launches its own MasterCard-branded debit card (TechCrunch) Rated: A

Venmo today is officially introducing its own debit card in partnership with MasterCard, following beta tests of a Visa-branded debit card last year. The new card will allow Venmo users to pay anywhere MasterCard is accepted in the U.S., and will record transactions to the user’s Venmo account for easy splitting with friends. It can also be used at an ATM to withdraw funds from the Venmo’s account’s balance.

Unlike the beta version of the card, the MasterCard-branded Venmo card can be used to withdraw up to $400 per day at ATMs displaying the MasterCard, Cirrus, PULSE, or MoneyPass acceptance marks. No fees apply for U.S. MoneyPass ATMs, while the others will charge a $2.50 ATM domestic withdrawal fee.

There are no fees for using the card for purchases, even if you get cash back at the point of sale. However, if a signature is required to get cash back at a bank, you’ll pay a $3.00 Over the Counter Domestic Withdrawal Fee, the company says.

PayPal gets anti-fraud ability with $ 120m acquisition of Simility (Fintech Futures) Rated: A

Following on from its $400 million purchase of Hyperwallet on 20 June, it has now acquired fraud prevention and risk management platform Simility for $120 million.

Following the close of the deal, merchants on the PayPal platform will gain access to fraud tools that can be customised through their existing account management dashboard.

Crowd lending fintech raises more than $ 17M (American Banker) Rated: A

The crowd lending startup P2Binvestor has secured more than $17 million in funding from more than 20 participants to expand its bank partnership program, the company announced Thursday.

CrowdOut Capital Surpasses $ 100 Million in Loans to Middle Market Companies to Fuel Growth (Business Wire) Rated: A

CrowdOut Capital, the first tech-enabled online marketplace to fund corporate loans for middle market companies, announced it funded more than $112 million in loans in less than two years. Accredited investors choose from the company’s vetted loan offerings on a deal-by-deal basis.

CrowdOut funds loans as small as $3 million to companies with annual revenues between $10 – $500 million to fuel growth.

James Gutierrez of Insikt (Lend Academy) Rated: A

My next guest on the Lend Academy Podcast has spent his career doing just that. James Gutierrez is the CEO and Founder of Insikt. Since I last had James on the show a lot has changed but their mission is still to improve the financial health of the underserved consumer.

Banks can’t partner themselves into digital relevancy (American Banker) Rated: AAA

For banks, these partnerships won’t generate the quantum leap they need to move beyond a decades-old, product-centric mentality to deliver next-generation financial services that consumers deserve. At best, financial institutions may gain a workable solution that squats awkwardly in the existing infrastructure and brand. At worst, after a lot of time and effort — and increasing their infrastructure costs — banks will fail to deliver any noticeable difference to customers beyond a flurry of press releases.

StraightUp Announces Merger With Slice (PR Newswire) Rated: A

StraightUp, an innovative real estate-focused platform giving investors access to previously unavailable development opportunities, announced today a merger with Slice, the first blockchain-based REIT for investors around the world.

StraightUp was designed to democratize access to previously unattainable high-potential investment opportunities in New York City. As a result of merging with Slice, the new and improved platform will give international investors access to premium equity opportunities in desirable cities across the country, including New York CityLos Angeles and San Francisco.

Mobile app for underbanked looks to go national (American Banker) Rated: A

You could easily mistake Anne Leland Clark, a Twin Cities nonprofit executive, for a banker with with big, national ambitions as she discusses her organization’s digital platform for the underbanked.

The product, known as Fair Financial, launched in a pilot program this week to serve about 500 local customers over the next 18 months.

Majority of Americans Won’t Use a Credit Card to Pay for This Summer’s Vacation (Herald Courier) Rated: A

The survey of over 1,000 U.S. respondents, conducted by Affirm, found that Americans typically take their biggest vacations of the year over the summer, and cost is a major factor when planning travel.

55 percent of Americans said it’s very important to have the cost of the vacation paid off before going. The cost of a trip can linger even after the vacation is over: 32 percent of people said they regretted taking a vacation altogether.

House passes bill allowing telecom, utility payments in credit scores (American Banker) Rated: B

The legislation, authored by Rep. Keith Ellison, D-Minn., is aimed at helping consumers, those in particularly lower-income and minority households, build their credit histories.

Under the bill, information about a consumer’s utility or telecommunications service may be reported only to the extent that the information relates to payment by the consumer for such service.

Depositing the Future (NullTX) Rated: A

What differentiates Depository Network from both of those companies/platforms is the fact that Depository Network is actually not a lending platform. Rather, it is a depository infrastructure that other P2P lending platforms, banks and credit institutions can utilize. Depository Network is the world’s first fully decentralized multi-platform collateral network that connects traditional lending and blockchain technology.

Invoice Factoring Edges Out Competition Among Short-Term Borrowing Options (PR Newswire) Rated: A

When a business needs to raise capital, the more short-term the borrowing options, the better. For every option, though, business owners must weigh the increased cash flow against the trade-off. Interstate Capital looked at a breakdown of options – from bank loans to savings – invoice factoring comes out on top.

AFR Announces Expanded Technology Offering (AFR Wholesale) Rated: B

American Financial Resources, Inc. (AFR) announces that it has completed a pilot and will now be providing its broker network with notification when a house for which AFR owns the servicing is listed for sale. This will enable AFR’s broker partners an opportunity to reconnect with the homeowner and, ideally, assist with their next mortgage, on both the relisted property as well as the borrower’s next home.

Wells Fargo revamps premium card to compete on rewards (Payments Source) Rated: B

Two years after JPMorgan Chase & Co. launched an arms race in credit-card rewards with its Sapphire Reserve card, Wells Fargo will now offer three points per dollar spent on dining, travel and streaming services such as Netflix on its Propel card. Other purchases will earn one point per dollar, and points are redeemable at one cent per point.

United Kingdom

Revolut Now Offers an App Store for Business Banking (Crowdfund Insider) Rated: AAA

Revolut, a digital only bank that says it is signing up over 120 businesses per day, has launched a new services for their business customers – Revolut Connect. This new feature is described as an “App store” for businesses to help provide easier access to digital tools.

With more than 60,000 businesses uses their bank now,  Revolut Connect is designed to help firms easily connect and build integrations for the most popular business apps, including accounting platforms like FreeAgent, communication tools like Slack, Apps to help with tax, payroll, expense management and more. Revolut adds that many more popular Apps are in the queue. Revolut wants to create a one stop mobile experience where businesses may manage all of their financial needs in a single mobile friendly application.

VPC Specialty Lending sees record monthly returns (AltFi News) Rated: AAA

The £289m VPC Specialty Lending investment trust has recorded its highest monthly return to date for May 2018, according to stock market filings.

Its net asset value [NAV] total return for the month of May, the latest numbers released by VPC, was 1.03 per cent for the month. Returns comprised 0.94 per cent of income gains and 0.09 per cent of capital gains.

Should Income Investors Consider P2P Lending? (Morningstar) Rated: AAA

Peer-to-peer investment trusts now have around £1 billion of assets under management between them, but the jury is still out on whether or not they are worth backing.

P2P trusts launched four years ago as direct peer-to-peer lenders including Zopa and Funding Circle were fast gaining traction. The trusts promised exposure to hundreds, or even thousands, of different peer-to-peer loans, in return for a juicy dividend yield.

Majority of brokers’ biggest frustration is lenders changing their mind on a deal (Mortgage Introducer) Rated: A

Over half (56%) of brokers said the lenders changing their mind on a deal frustrates them the most about the specialist finance market, LendInvest found from surveying brokers at the NACFB Commercial Finance Expo in Birmingham.

A quarter (24%) identified the lack of good service as their main frustration. Rates not being good enough was an issue for 14% of those surveyed, while only 6% of those surveyed cited lack of choice as their biggest frustration.

Acceptance of robo advice on the rise (Financial Reporter) Rated: A

According to a recent poll carried out at the Intelliflo Change the Game conferences held in Manchester and London, robo-advice is now regarded as less of a threat to business for advisers than it has been in recent years.

Last year, both options gained equal top share in the poll (37% each of 315 respondents), while this year,’ robo-advice’ dropped to 25.5% (419 respondents), with ‘large product providers going direct’ down slightly but still the top concern at 32.5%.

A guide to liquid IFISAs (Peer2Peer Finance) Rated: A

But the rising popularity of the secondary market and ‘instant access’ accounts have created enhanced liquidity for P2P investors. On an array of platforms, lenders can sign up for long-term loans before selling their stake to others, while some of the bigger platforms allow free or low-fee withdrawals.

We’ve put together a guide to all the platforms offering IFISAs with extra liquidity…

  • Ablrate
  • Abundance
  • Assetz Capital
  • CapitalRise
  • Crowd2Fund
  • Folk2Folk
  • Funding Circle
  • FundingSecure
  • HNW Lending
  • JustUs
  • Landbay
  • LandlordInvest
  • LendingCrowd
  • Lending Works
China

Chinese online lending platform Hui Ying Financial lowers US IPO deal size to $ 32 million (Nasdaq) Rated: AAA

Hui Ying Financial Holdings, which operates an online peer-to-peer lending platform in China, lowered the proposed deal size for its upcoming IPO on Tuesday.

The Shanghai, China-based company now plans to raise $32 million by offering 5.6 million shares at a price of $5.85. The company had previously filed to offer 6.8 million shares at the same price. Hui Ying Financial Holdings will raise -19% less in proceeds than previously anticipated and command a market value of $436 million. Shares are currently listed on the OTCQB under the symbol SFHD.

European Union

Raisin and Banco BNI Europa Deepen Collaboration (Crowdfund Insider) Rated: AAA

Fintechs Banco BNI Europa and Raisin have furthered the collaboration between the two firms. Banco BNI Europe says it has entered into a cooperation to allow Portuguese savers to gain access to the best savings rates available from across Europe.

International

Global Debt Registry Launches Decentralized Ledger for the Loan Market  (Payment Week), Rated: A

Global Debt Registry (“GDR”)today announced the launch of its loan registry designed to verify and provide transparency on loan data on the cloud-based IBM Blockchain Platform. All loan level collateral positions and verification activity will now be immutably recorded on the decentralized registry with highly secure permissioning and access controls to provide new levels of efficiency to the $400bn asset backed securities (ABS) market.

Mobilum Crypto Payment Processor Partners With EthicHub Crowdlending Platform (Bitcoin Exchange) Rated: B

Mobilum is a cryptocurrency enabled payment processing platform which allows for cryptocurrency payments in real time at points of sale via an already existing debit or credit cards of the customer and the issuer of the Mobilum token. Mobilum recently announced its partnership with EthicHub, an affiliation that is expected to bolster a mutual sharing of investment opportunities for users on both platforms.

EthicHub’s crowd lending projects have provided financial solutions for small projects especially those involving farmers in less economically disadvantaged parts of the world, an accomplishment for which it was awarded the Best financial inclusion project at LaBitConf in Bogota as well as the award of the “Start-up with the Greatest social impact” at Unconference Fintech Awards in Madrid, Spain.

Australia

Mortgage Choice partners with P2P lender (The Adviser) Rated: AAA

Mortgage Choice has announced that it has partnered with RateSetter in a move that would provide its 600 brokers with access to personal loans and green loans offered by the P2P lender.

RateSetter CEO Daniel Foggo claimed that the partnership was part of the lender’s plan to develop its broker relationships.

ING distribution boss joins RateSetter (Independent Financial Adviser) Rated: B

ING’s former head of third-party distribution, who led relationships with financial advice and mortgage broking networks, has left to join fintech peer-to-peer lender RateSetter.

India

All Financial Transactions on Faircent Conducted through Escrow Account (BW CI World) Rated: AAA

Faircent.com was the first platform in India to meet all guidelines prescribed by RBI and receive the NBFC-P2P certification in May, this year. This is a validation of the business model that we have painstakingly built over the last five years.

All financial transactions on our platform are undertaken through an escrow account under the trusteeship of ITSL (an IDBI Trusteeship Services Ltd). Borrowers are evaluated by our fully-automated credit evaluation mechanism across more than 400 data points to understand their ability, stability and intent to repay before they are listed on the platform.

Canada

Finastra to sell Canadian-based Collateral Management Corporation business to Teranet (Finastra) Rated: AAA

Finastra today announced that it has entered a definitive agreement to sell its Canadian-based Collateral Management Corporation (CMS) business to Teranet. The transaction is expected to close in July 2018, subject to required regulatory approvals and customary closing conditions.

CMS will join Teranet as a new complementary line of business. Jointly, they will deliver enhanced, integrated solutions to a broad set of financial services customers, leveraging investments in technology, rich insightful data, and market leading electronic registry and workflow platforms.

Authors:

George Popescu
Allen Taylor

Monday June 25 2018, Daily News Digest

FREED 2018-1 collateral characteristics

News Comments Today’s main news: SoFi launches SoFi Money. Robinhood in talks with regulators about bank products. Orca Money plans to double in size this year. Monzo, TransferWise partner. Banco BNI Europa drops 50M Euro into Linked Finance. Today’s main analysis: FREED 2018-1 Deep Dive. Today’s thought-provoking articles: What financial service firms can learn from direct-to-consumer companies. Graduate degrees with […]

FREED 2018-1 collateral characteristics

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi’s Latest Product Called “SoFi Money” is Here (Lend Academy) Rated: AAA

At time of writing, SoFi is paying 1.1% on their account which is a competitive rate when you consider that it is a hybrid account. Other banks who continuously offer the highest rates available on the market such as Goldman Sachs’ Marcus are currently paying around 1.7% on savings accounts. The largest banks in the US such as Bank of America, Citi and JP Morgan Chase pay between 0.01% and 0.1% on savings accounts which varies depending on deposit amounts and current promotions.

Source: Lend Academy

Continued Yield Curve Flattening, FREED 2018-1 Deep Dive (PeerIQ), Rated: AAA

The yield curve continued its unrelenting flattening after last week’s Fed meeting. The spread between 10-year and 2-year treasury yields now stands at 36 bps (about 1 to 2 rate hikes from inversion). An inverted yield curve and lower-long term yields have presaged economic slowdown or recessions in the past. You can read our analysis of the Fed’s interest rate decision here.

FREED 2018-1 Deep Dive

FREED 2018-1’s collateral pool consists of 2 types of loans – 61.6% Freedom Plus (F+) and 38.4% Consolidation Plus (C+).

F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 8 months and WA remaining term of 41 months. The WA current FICO score of the pool is 723 and the WA interest rate is 14.8%.

C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds immediately available to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 44 months. The WA current FICO score of the pool is 654 and the WA interest rate is 22.9%.

Source: Source: PeerIQ, KBRA, DBRS
Source: PeerIQ
Source: PeerIQ

There’s plenty more. See the rest of the charts here.

Robinhood is said to discuss bank products with regulators (American Banker) Rated: AAA

Robinhood Markets has more than 4 million U.S. consumers using its free stock-trading platform. Now, it’s in talks to offer them other banking services like savings accounts, according to people familiar with the matter.

KeyBank Acquires Digital Lending Platform For Small Businesses Bolstr (Crowdfund Insider) Rated: A

On Wednesday, KeyBank announced it has acquired digital lending platform for small businesses Bolstr. According to Key, the fintech software, which is expected to be implemented later this year, will enable the banking group to provide faster and easier access both to SBA loans and to traditional capital for business owners. The acquisition comes just after the OCC recently called on banks to issue more SME loans. 

Capital One Co-Founder Is Making a Bet on Risky Borrowers (Bloomberg) Rated: A

The co-founder of Capital One Financial Corp. is betting now’s a good time to lend to the riskiest borrowers.

Nigel Morris, Richard Fairbank’s partner in creating the company that became Capital One, is joining the board of LendUp Global Inc. and boosting his investment in the firm, which uses machine learning to look beyond traditional credit scores in the subprime market.

What Financial Services Can Learn from Direct-to-Consumer Companies (Crowdfund Insider) Rated: AAA

2016 Bain study found that nearly a third of customers globally would change their bank if they could do so easily. With dissatisfaction that high, traditional financial institutions should look to emulate the branding strategies of direct-to-consumer retailers, rather than leaning on their well-established names, to engage with millennial and Gen Z consumers.

Research from BCG found that brands that create personalized customer experiences with technology and data can increase revenue by six to ten percent, and direct-to-consumer brands have capitalized on the benefits of personalization.

Many fintech companies’ value proposition is to leverage technology to provide less expensive financial advice, lower interest rates on student loans, or more fair and reflective insurance rates. For example, robo-advisor Betterment charges only 25 basis points for wealth management services and no minimum to enroll, as opposed to traditional financial advisors that charge one to two percent on assets under management and often require high minimum investments to qualify for on-boarding.

A recent PricewaterhouseCoopers study found that 75 percent of bank customers base their purchasing decisions on whether or not they’ve had a positive customer experience at the bank.

Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

Source: Credible
United Kingdom

Scottish fintech Orca Money hopes to double in size (Insider), Rated: AAA

Scottish fintech firm Orca Money hopes to double its staff to ten over the next year following its second funding round.

The Edinburgh-based company raised £280,000 seed capital last January and is now talking to investors about follow-on funding.

P2PFA accused of reducing transparency after loanbook changes (Peer2Peer Finance) Rated: A

THE PEER-TO-PEER Finance Association (P2PFA) has been accused of reducing transparency and hindering efforts to enhance investor protection after changing the rules governing how firms publish their loanbook.

Previously, members of the self-regulated trade body were obliged to publish their full loanbook, showing information about all the loans on their platform.

But at the start of June, the P2PFA announced that members now have the option to “either continue to publish their entire loan book, or provide a detailed breakdown of loans in their overall loan book to enable a consumer to be informed about the nature and number of loans of different descriptions presently originated through the platform according to standards to be approved by the P2PFA board.”

Asset management giant warns on ‘exotic’ peer-to-peer lending pension investing (AltFi News) Rated: A

Pension investors should avoid high yielding assets such as peer-to-peer loans, according to new research by UK-based Royal London Asset Management.

The firm, which manages £114bn of assets, says investors looking generate income in retirement should beware for high risk, higher yielding investments.

How I invest: Ayo Adesina, a software engineer with £32,000 in peer-to-peer (iNews), Rated: A

Ayo Adesina, 34, was lucky enough to come into a £50,000 windfall when he won series two of Channel 4’s TV programme Hunted in 2016.

Mr Adesina, who describes himself as a novice investor, put the majority of the money – £32,000 – into a peer-to-peer property lending platform. He says his investment has grown 7 per cent, or £3,000, since he opened an account a year ago.

Who’s switching jobs at BWB Compliance (City A.M.), Rated: B

BWB Compliance has recruited Dena Chadderton as a senior adviser. With wide-ranging experience both as a regulatory consultant and across the financial services industry, Dena will primarily be advising firms in the fintech and asset management space. In particular, Dena will continue to specialise in the regulation of P2P lending and crowdfunding platforms, a growing part of the current team’s client-base.

China

Online lender seeks small-scale borrowers (The Standard) Rated: AAA

China’s FinUp Finance Technology Group, which operates a technology-enabled finance platform with a focus on marketplace lending, aims to widen its market in the country by going public in Hong Kong.

The fintech firm also provides a variety of other personal credit services including point of sale instalment services to automobile financing services.

Chinese Fintech PINTEC Launches Installment Financing on E-Commerce Platforms (Crowdfund Insider) Rated: A

Chinese fintech Pintec Technology Holdings Limited (PINTEC) announced on Wednesday it has launched installment financing on its e-commerce platforms. This news comes just a couple of weeks after PINTEC secured $103 million through its latest financing round, which as led by Mandra Capital and SINA Corp.

European Union

Monzo partners with TransferWise for international payments (TechCrunch) Rated: AAA

The partnership, which TechCrunch outed nearly three weeks ago, will see TransferWise power international payments for the U.K. challenger bank’s 750,000 customers. It is the second new bank partnership that TransferWise has unveiled this month, after the fintech unicorn announced that it has begun working with France’s second largest bank BPCE Groupe.

Asked why Monzo  has chosen to work with TransferWise, Blomfield reiterates the challenger bank’s goal of becoming a “hub or control centre” for your money. This won’t necessarily all be done by Monzo, he says, “but with partner organisations who plug into this hub”. TransferWise is the first of these.

LINKED FINANCE SECURES €50M FUNDING FOR IRISH SMES FROM BANCO BNI EUROPA (Irish Tech News) Rated: AAA

Linked Finance, Ireland’s leading peer-to-peer (P2P) lending platform, has secured backing from Portugal’s fastest growing digital bank, Banco BNI Europa, who will deploy up to €50m over a 2-year period, to lend to Irish SMEs.

As part of a wider strategy to identify the best P2P lending platforms in key European markets, Banco BNI Europa will deploy its capital alongside Linked Finance’s existing lenders. Linked Finance, connects Irish SMEs who need loans with an online lending community of more than 19,000 users.

HAVE YOUR CAKE AND ‘HODL’ TOO: TAKING OUT A LOAN WITH BITCOIN (Bitcoinist), Rated: A

P2P lending platform InLock wants to change this by enabling cryptocurrency to be used as collateral for a loan in fiat — effectively solving the short-term spendability problem. At the same time, borrowers can remain ‘hodlers‘ with the option to get their cryptocurrency back in full after the loan is paid off, regardless of any changes in price.

Csaba: When we looked at the Bitcoin blockchain, we found that 40% of all bitcoins existing today had not been moved at all in the past year. Looking back at 2017, there were plenty of reasons to move them: hard forks, the mempool crisis, regulation problems, an amazing bull run, followed by a 70% correction.

The FinTech50 2018 (The FinTech 50) Rated: B

Listings include:

  • Monzo
  • N26
  • OakNorth
  • Raisin
  • Revolut
  • Seedrs
  • SolarisBank
  • Starling Bank
International

34 Fintech and Insurtech Unicorns (Inside Bitcoins), Rated: AAA

According to data compiled from CB Insights and Crunchbase, they are currently 34 fintech unicorns, or startups valued at over $1 billion.

32. Funding Circle — $1 billion

Value: $1 billion | Raised: $413 million

Founded: 2009 |  | HQ: London

What it does: Peer-to-peer marketplace for business loans.

Why it’s hot:Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.

31. Kabbage — $1 billion

Value: $1 billion | Raised: $500 million

Founded: 2009 |  | HQ: Atlanta

What it does: Fast online small business loans.

Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.

24. ACORN OakNorth — $1.2 billion

Value: $1.2 billion | Raised: $486 million

Founded: 2015 |  | HQ: London

What it does: A fintech firm focused on unlocking the potential in bespoke SME lending globally using its data and technology platform, ACORN machine.

Why it’s hot: ACORN machine is a fintech platform that helps automate the way banks penetrate this underserved and underestimated market. It does this by leveraging process excellence, machine learning and technology to fuel data-driven decision making across the loan lifecycle.

22. Tuandaiwang — $1.46 billion

Value: $1.46 billion | Raised: $380 million

Founded: 2012 | HQ: Dongguan

What it does: Peer-to-peer lending platform.

Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.

17. NuBank — $2 billion

Value: $2 billion | Raised: $527 million

Founded: 2013 |  | HQ: Sao Paulo

What it does: Brazilian app-only bank.

Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.

16. Affirm — $2 billion

Value: $2 billion | Raised: $720 million

Founded: 2012 |  | HQ: San Francisco

What it does: A hire-purchase provider, letting people buy products and pay them off in installments.

Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.

15. Avant — $2 billion

Value: $2 billion | Raised: $1.8 billion

Founded: 2012 |  | HQ: Chicago

What it does: Online personal loans.

Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.

13. Klarna — $2.5 billion

Value: $2.5 billion | Raised: $636 million

Founded: 2005 |  | HQ: Stockholm

What it does: User-friendly payment systems for mobile and web that lets people buy now and pay later.

Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.

9. GreenSky — $3.6 billion

Value: $3.6 billion | Raised: $350 million

Founded: 2006 |  | HQ: Atlanta

What it does: Provides technology to banks that is used in processing loan applications.

Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”

8. Credit Karma — $3.5 billion

Value: $3.5 billion | Raised: $868 million

Founded: 2007 |  | HQ: SanFrancisco

What it does: Provides free online credit reports, offsetting the cost of paying for them with targeted advertising of financial products.

Why it’s hot: Over 75 million people in the US and Canada have used the service. Google Capital is an investor.

7. SoFi — $4 billion

Value: $4 billion | Raised: $2.1 billion

Founded: 2011 |  | HQ: San Francisco

What it does: Peer-to-peer student loan refinancing, mortgages, and other types of personal loans.

Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.

3. Lu.com — $18.5 billion

Value: $18.5 billion | Raised: $1.7 billion

Founded: 2011 | HQ: Shanghai

What it does: Chinese peer-to-peer loans and financing platform.

Why it’s hot: Lu.com, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.

ETHLend Blockchain Lending Platform Adds MyBit Token (MYB) in Partnership (Bitcoin Exchange Guide) Rated: B

MyBit is an Ethereum-powered ecosystem that aims to connect the global Internet of Things (IoT) industry. ETHLend works with the Ethereum blockchain as well and is a marketplace for peer-to-peer lending services that use smart contracts. The company provides low interest rates and a transparent technology for processing transactions.

Currently, it allows users to lend with Ethereum, but it may be ready to introduce new altcoins at the end of this year, including MYB.

Australia

RateSetter to ‘accelerate’ broker strategy with new appointment (The Adviser) Rated: A

Last week, The Adviser broke the story that Mark Woolnough had left his role at ING after 18 years at the lender to join the fintech RateSetter.

It has now been confirmed by RateSetter that Mr Woolnough has joined its ranks as head of third-party distribution.

India

P2P lending marketplace ‘PaisaDukan’ to open branches in Noida and Bangalore (Knowledge & News Network) Rated: AAA

PaisaDukan, a P2P lending platform fully owned by Mumbai based fintech startup BigWin Infotech, has decided to launch 2 branches in Noida & Bangalore as a part of its PAN India expansion and growth plans by the end of next month.

This will enable the company to have better control over their operations and widen its reach.

Asia

Bills on P2P lending, cryptocurrency pending in National Assembly (The Korea Herald) Rated: AAA

Rep. Min Byung-doo of the ruling Democratic Party and Rep. Kim Su-min of the minor opposition Bareunmirae Party filed two separate bills to regulate P2P lending firms in July last year and in February, respectively.

With the bills still pending in the National Assembly, financial authorities have been struggling to tackle abusive and deceptive P2P lending practices.

Open Banking: no leisurely walk in the DX park (Enterprise Innovation) Rated: A

The 2018 Global Payments Insight Survey: Retail Banking report by ACI Worldwide and OVUM  claimed that 86% of banks in Asia are developing their open banking strategy.

Ovum’s 2017 Payments Insight Survey said 87% of surveyed banks report having a clear strategy for developing open APIs, up from 59% in 2017.

Africa

FINT is changing the narratives in the Nigerian lending space (Nairametrics), Rated: AAA

In a recent report by the International Finance Corporation (IFC) and the Central Bank of Nigeria (CBN), less than a third of MSMEs have successfully obtained loans from financial institutions, and that is not for a lack of trying.

Nigeria currently has over 35 million MSMEs and if approximately only 10 million MSMEs have been able to get loans from financial institutions, hence, a credit gap of about 25 million in the country.

What exactly is FINT?

FINT is an online lending marketplace, basically we connect verifiable income borrowers looking for access to affordable credit with lenders who are looking to fund the loans for attractive returns. We have consumer loans i.e. loans between N60,000 and N2 million at rates as low as 8% for 3 – 12  months, with retail and institutional lenders (banks and asset managers).

For lenders, they can lend in the multiples of N20,000 grows at 26-39% for one-year loan tenures, for 6 months 15-22% for 3 months it is 8-14%.

Authors:

George Popescu
Allen Taylor

Wednesday June 6 2018, Daily News Digest

Marcus future plans

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 […]

Marcus future plans

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United States

United Kingdom

China

European Union

International

Other

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United States

Goldman Sachs backs card issuing, processing startup Marqeta (Reuters) Rated: AAA

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).

Goldman Sachs Shares Their Vision for the Future of the Marcus Platform (Lend Academy) Rated: AAA

Source: Lend Academy

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:

  1. Credit Cards – we have already heard about their deal with Apple but there will likely be a Marcus branded credit card at some point.
  2. 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.
  3. 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.

When disaster strikes, digital banking can become a lifeline (American Banker) Rated: A

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.

Digital Banker of the Year: Fifth Third’s Tim Spence (American Banker) Rated: A

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.

The plumber to US fintechs branches out (Financial Times) Rated: A

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.

The Woz: Blockchain might be a bubble, but it’s on the right track (AltFi News) Rated: A

The ‘Woz’ also offered thoughts on digital banking and artificial intelligence.

He said that online banks ‘just aren’t as secure’ as their incumbent rivals, referencing a time that his own crypto-currency holdings, or a portion of them, were stolen from a digital bank.

Real Estate Startup FlyHomes Raises $ 17m in Series A Funding (Finsmes) Rated: A

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.

IDology Study Reveals Consumer Insights on Digital Identity Fraud (IDology) Rated: B

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.

Despite worries, America’s small business owners bullish on economy (Bankless Times) Rated: A

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 Hires Veteran Banker To Lead SBA Loan Practice (PR Newswire) Rated: B

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.

United Kingdom

TransferWise’s next partnership could be with U.K. challenger bank Monzo (Tech Crunch) Rated: AAA

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.

A partnership with U.K. challenger bank Starling was also announced last year, but integration with the bank’s app never materialised and TechCrunch learned last week that the partnership has now dissolved entirely. That is particularly noteworthy given that Monzo and Starling are direct competitors with an interesting shared history, shall we say.

10x Banking Founder on Why FinTech Is the Future (Bloomberg) Rated: AAA

Sphonic to partner with Paysafe on digital wallet services (Peer2Peer Finance) Rated: A

DATA and risk management specialist Sphonic has been chosen to provide digital wallet services to global payments provider Paysafe Group.

Sphonic, which works with peer-to-peer lenders including Funding Circle and Zopa, supplies data networking services.

These include customer on-boarding, anti-money laundering, know your customer, fraud detection and monitoring as well as authentication.

Automated financial advisor Multiply raises £1.75 million (Finextra) Rated: A

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.

China

Ant Financial is shifting its focus from finance to tech services (CNBC) Rated: AAA

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.

Mao is Laughing: Capitalists Pour Money into Chinese Companies (Nasdaq) Rated: AAA

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.

China’s fintech startup Caogen Touzi secures $ 358m Series D round (Deal Street Asia) Rated: A

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.

Fintech Company Pintec Raises $ 103M in Equity Funding (Finsmes) Rated: A

Pintec, a Beijing, China-baased independent technology platform enabling financial services, raised US$103m in financing.

The round was led by Mandra Capital and SINA Corp., with participation from STI Financial Group, Shunwei Capital Partners and ZHONG Capital Holding Group, among others.

The company intends to use the funds to increase investment in R&D, traffic integration, risk management and operations.

European Union

N26 passes million customer milestone (Finextra) Rated: AAA

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 pushes for open banking with SME financing platform and Yolt expansion (Fintech Futures) Rated: AAA

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.

Fintech Company FinCompare Raises €10M in Series A Funding (Finsmes) Rated: A

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.

Euro MPLs growing, but securitization a ways off (GlobalCapital) Rated: A

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.

International

FusionFabric.cloud platform changes the way software is developed, deployed and consumed in the financial world (Finastra) Rated: A

Finastra announced the availability of the three core components within its FusionFabric.cloud platformfor open innovation:

  • FusionCreator – A rapid development environment for financial applications with low-code capabilities and integrated API management tools
  • FusionOperate – A management system to deploy and operate applications in a secure cloud infrastructure
  • FusionStore – An online marketplace for banks to search, try and buy applications

FusionFabric.cloud already has over 60 Fintechs and providers signed up.

The AI and robo-advice questions you should be asking (Professional Adviser) Rated: A

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.

Australia

Prospa float postponed as ASIC queries small business loan terms (Australian Financial Review) Rated: AAA

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.

New build financing gap boosts Southern Cross (Good Returns) Rated: AAA

Peer to peer lender Southern Cross Partners has seen an increase in investor demand as first time buyers struggle to finance new-build properties.

The lender says it experienced a 10-20% increase in investor demand last year amid a lack of available funding for the construction and sale of new homes.

Mortgage group’s “mortgage hell” billboard above CBA (Australian Broker) Rated: A

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”.

MENA

Israeli fintech co BlueVine Raises $ 60m (Globes) Rated: AAA

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.

Asia

Indonesia’s coming digital disruption (The Business Times) Rated: AAA

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.

Thierry Sanders, CEO Of Mekar (Indonesia Expat) Rated: A

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.

Caribbean

ECCB advises caution regarding non-traditional financial services (St. Lucia Times) Rated: AAA

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).

Authors:

George Popescu
Allen Taylor

Monday May 14 2018, Daily News Digest

Kabbage KABB 2017-1

News Comments Today’s main news: LendingTree to acquire Ovation Credit Services. Revolut to enter America. Flender delays UK launch. UK challenger banks test location-based P2P payments. Ant Financial raises $10B led by Carlyle Group. Today’s main analysis: KABB 2017-1 deep dive. Today’s thought-provoking articles: How the FTC knew LendingClub was allegedly hiding fees. Elevate’s Q2 earnings estimates. UK customers trust banks, […]

Kabbage KABB 2017-1

News Comments

United States

United Kingdom

China

European Union

International

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United States

LendingTree, Inc. Announces Agreement to Acquire Ovation Credit Services (PR Newswire) Rated: AAA

LendingTree, Inc. (NASDAQ:  TREE) announced today that it has entered into a definitive agreement to acquire Ovation Credit Services, Inc., a provider of credit services with a strong customer service reputation. Ovation Credit Services utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit bureaus while educating consumers on credit improvement via ongoing outreach with Ovation case advisors.

Europe’s New Fintech Unicorn, Revolut, Heads to America (Newsday) Rated: AAA

The London-based fintech start-up allows users to buy and trade cryptocurrencies, making it a direct competitor to the U.S.-based Robinhood. Revolut also sees itself as a disruptor of the traditional banking industry, as it offers checking accounts, peer-to-peer payments, and international money transfers, says Chad West, the company’s chief marketing officer.

FTC Doesn’t Hide Action Over LendingClub’s Allegedly Hidden Fees (Lexology) Rated: AAA

The FTC noted that the site did feature a small green dot (known as a tooltip) with a white question mark inside, which appeared next to the term “APR.” If a consumer clicked on the tooltip, a pop-up bubble appeared with a disclosure that read: “APR stands for Annual Percentage Rate and is a measure of the total cost of credit as an annual rate. The APR is comprised of the annual interest you pay at a rate of 6.99%—which is ultimately paid each month to the investors who enable your loan—and a one-time origination fee of 3.5% ($350.00) that is collected out of your loan proceeds.”

The complaint reminds lenders of the continued importance of accuracy and completeness in advertising and other marketing in order to avoid UDAAP claims, including under Section 5 of the FTC Act.

KABB 2017-1 Deep Dive (PeerIQ), Rated: AAA

The battle for transaction fee interchange revenue is heating up. Amazon is now encouraging smaller retailers to use its own payment processing system – Amazon Pay – in lieu of credit cards or PayPal.Amazon is willing to offer the payments at a discounted rate in exchange for growing market share and gain additional data insights from merchants.

FinTech Earnings – LendingClub and OnDeck

The market has responded well to LC’s earnings and the stock price has surged 17% post earnings.

Source: LendingClub

OnDeck’s stock price has enjoyed a 10% rise since earnings.

Source: OnDeck

Deal Deep Dive KABB 2017-1 Additional Notes

Kabbage is issuing $60 Mn in additional notes under the expandable option on its $550 Mn KABB 2017-1 deal. The additional notes classes A to D have balances of $44.4 Mn, $9.5 Mn, $3.2 Mn, and $2.9 Mn respectively. KBRA has rated the tranches A, BBB, BB, and B respectively. Kabbage issued $525 Mn in bonds originally on the KABB 2017-1 deal, and subsequently issued $25 Mn in additional notes.

KABB 2017-1 is passing all its triggers and has a weighted average yield of 42.9% and a 3-month average DQ percentage of 9.7%. The bonds are locked out from receiving principal for 36 months since issuance and the additional cashflow is used to purchase receivables that keep the weighted average receivables yield for the entire pool above 38% and individually yield at least 19%.

Source: PeerIQ, KBRA
Source: PeerIQ, KBRA

Q2 2018 Earnings Estimate for Elevate Credit (NYSE:ELVT) Issued By Jefferies Group (Macon Daily) Rated: AAA

Jefferies Group lifted their Q2 2018 earnings per share estimates for shares of Elevate Credit in a report released on Tuesday, May 1st, according to Zacks Investment Research. Jefferies Group analyst J. Hecht now forecasts that the company will earn $0.19 per share for the quarter, up from their previous estimate of $0.18. Jefferies Group also issued estimates for Elevate Credit’s FY2018 earnings at $0.83 EPS, Q1 2019 earnings at $0.37 EPS and FY2019 earnings at $1.09 EPS.

Source: Macon Daily

Renaud Laplanche: the sailor who revolutionised banking (Money Week) Rated: A

“Soft spoken and unfailingly polite”, as Forbes noted in 2015, Laplanche claimed, with some justification, to be “transforming” the banking industry – bypassing banks to link would-be borrowers with lenders online. He swiftly established his outfit as the market leader, originating some $20bn in loans and winning copious “disruptive innovator” awards. Then came the shipwreck.

He is now focused on “what can I learn from it, what can I do better. Upgrade has been part of that.” Last year, Upgrade raised $60m – “the biggest ever series A funding round for a US fintech start-up”, backed by “many of Lending Club’s original investors”. The market is now more crowded than ever, notes the Lending Times, and “margins have shrunk”. Still, many reckon that if anyone can steer a clear course it’s “the guy credited with creating the industry in the first place”.

 

 

 

PayPal CEO: A Cashless Society Is Possible as Mobile Payments Take Over (The Street) Rated: A

The world is rapidly digitizing. You look at every industry, whether it’s media publishing or entertainment and you are now seeing different value propositions being driven by software and mobile connectivity. Financial services is no different. I think you are going to see more changes in the financial services industry in the next five or 10 years than maybe we have seen in the last 25 or 30 years.

The world is rapidly digitizing. People are writing many less checks than they ever have before. Peer to peer lending, which once involved giving cash to a friend to split a bill at a restaurant, that’s now happening digitally.

The Most Well-Funded Tech Startup In Every US State (CB Insights), Rated: A

In our latest map of the most well-funded American tech startup in each state, some companies with the deepest pockets were found in Florida (Magic Leap, $1.89B), Virginia (OneWeb, $2.2B), Utah (Domo, $698M), and Illinois (Avant, $655M).

Source: CB Insights

Congress Votes to Erase Auto Loan Anti-Discrimination Rule (LendEDU) Rated: A

Under the authority granted by the Congressional Review Act, the House of Representatives passed a measure on May 8 to roll back an Obama-era rule on auto lending practices issued by the Consumer Financial Protection Bureau (CFPB). It should be noted that the rollback pertains to a set of administrative guidelines issued by the CFPB, not a law ratified by Congress.

The House vote was 234-175, reversing a 2013 rule established by the CFPB to stop auto lenders from charging higher fees to borrowers based on their religion, sex, race, or age. The vote follows a Senate vote in April to also repeal this measure. It will now go to President Donald Trump’s desk for his approval.

Virginia Attorney General Files Suit Against Online Lender Alleging Predatory Lending (JD Supra) Rated: B

The complaint alleges that the lender, one of the largest online lenders in Virginia, operated without a Virginia license, and misled borrowers about its licensure status in another state in order to avoid Virginia’s 12% interest rate usury cap.  Virginia Code § 6.2-303.  Specifically, the complaint alleges that the installment loan agreements’ Utah choice-of-law provisions are void, and that Virginia law, including Virginia’s usury cap, applies to the loans.  The VA Attorney General also alleges that the lender attempted to collect on loans from borrowers who were in bankruptcy and entitled to protection from debt collection.

United Kingdom

Ireland’s Flender pushes back UK launch (Peer2Peer Finance) Rated: AAA

IRISH peer-to-peer lending platform Flender has pushed back its UK launch to focus on becoming the “dominant platform” in its home country first.

UK banks are trying out location-based P2P payments (Tearsheet) Rated: AAA

On Friday, Revolut introduced a feature called “Near Me” which lets its customers find other Revolut customers using the same feature and send them money without knowing their contact details. On Monday, Monzo rolled out a capability called “Nearby Friends.”

The use cases for location-based peer-to-peer payments among consumers may not be compelling enough for providers to consider it, said Paygility Advisors partner Deborah Baxley.

Q&A With Simon Taylor, 11:FS Co-Founder (Forbes) Rated: A

However, last month’s announcement that London FinTech Revolut is now a so-called unicorn with a $1.7 billion valuation and TransferWise working with the Bank of England and launching a ‘borderless’ card that drastically slashes transaction costs, the future for the city may be companies such as these.

Another fellow London FinTech 11:FS is also making waves offering a range of FinTech services, not least being able to ‘make a challenger bank in 12 weeks’. Here company Co-Founder Simon Taylor speaks exclusively to Forbes about what these moves and also on Swedish company iZettle’s recent IPO announcement.

 

 

A new study shows UK customers trust banks but don’t engage with them (Business Insider) Rated: AAA

UK banks were trusted by 40% of consumers in 2017, up from 29% in 2015, according to a study from Accenture. This makes banks only 3% less trusted than retailers, and ahead of insurers, independent advisers, and tech companies.

Source: Business Insider

Additionally, customer satisfaction was up 5% from 65% in 2015 to 70% in 2017, suggesting banks have been doing something right in terms of customer experience in the recent years. This also brings banks ahead of life insurers and pension providers, as well as on the same level as motor insurers and home insurers, when it comes to customer satisfaction.

 

P2P lenders benefit as BoE keeps interest rates low (AltFi News) Rated: A

The Bank of England’s decision to keep the interest rates at 0.5 per cent should at least make peer-to-peer lenders smile. People are tempted to look for alternative and riskier ways to increase the value of their savings, as inflation continues to hover above BoE’s target of two per cent and traditional savings accounts offer barely any interest at all.

Mike Allan, the director of operations at LendingCrowd, said that the historically lax monetary policy created an opening for P2P lending to take off.

Why commercial property could be the new buy-to-let and how to invest for better returns (This is Money) Rated: A

Over the past five or six years, investing in property through peer-to-peer and crowdfunding platforms has grown enormously in popularity. There are now lots of platforms to choose from and each offers a slightly different proposition.

Both peer-to-peer and crowdfunding platforms have different approaches, in that some allow you to put money in and spread it across a number of properties, or a portfolio run by them.

 

 

China

Jack Ma’s Ant Snags Carlyle for $ 10 Billion Funding, Sources Say (Bloomberg) Rated: AAA

Ant Financial, the Chinese payments giant controlled by Jack Ma, is expected to close a fundraising of at least $10 billion in the next few days, attracting Carlyle Group and the Canada Pension Plan Investment Board as first-time investors, according to people familiar with the matter.

The Hangzhou-based company is said to be valued at about $150 billion in this round, the people said, requesting not to be named because the matter is private. The funding will be mostly used for overseas expansion, the people said.

PBOC Bans Unauthorized APP to Access Credit Rating System (Crowdfund Insider) Rated: AAA

Recently, the People’s Bank of China (PBOC), China’s central bank, issued a document named, “Notice on Further Strengthening the Management of Credit Information Security” (Yinfa [2018] No. 102) (hereinafter referred to as “Document No. 102”), to further strengthen the management and security of credit information database. According to Document No. 102, credit reporting agencies and access agencies are strictly forbidden to query credit report without authorization, and unauthorized APP accessing to credit reporting systems is strictly prohibited. In addition, it is required to establish a leading group for credit information security work and make clear that the person in charge of the credit management work shall take the primary responsibility for related issue.

China’s online lenders reel from government clampdown (Nikkei Asian Review) Rated: A

Of 66 peer-to-peer lending platforms surveyed by FTCR, 10 said they might close because of difficulties in meeting new compliance standards and in controlling an increase in bad loans. Among the platforms, which match lenders with borrowers online, more than 40% of those in second- and third-tier cities said business had fallen in the first quarter compared with the end of last year.

P2P lending in China had grown rapidly, extending 2.8 trillion yuan ($443.3 billion) in 2017, equivalent to 20.7% of the amount lent by banks.

Antisocial networking (Breaking Views) Rated: A

A Chinese social network is finding new ways to lose friends. Renren has irked investors over plans to sell some of its assets, notably a stake in U.S. online lender SoFi, to a firm partly controlled by its chief executive.

Renren has been irritating shareholders for years. Since its initial public offering in New York in 2011 valuing it at close to $6 billion, the company has failed to live up to the hype of being China’s answer to Facebook. It is now worth just $600 million.

This latest episode also isn’t the first time boss Joe Chen has been accused of trying to enrich himself at the expense of shareholders. A non-binding 2015 bid to take Renren private for $1.4 billion never came to fruition, and the SoFi stake was a topic of dispute then, too.

European Union

Banco BNI Europa invests €15m in auto financing start-up Lendrock (Fintech Futures) Rated: AAA

Portuguese Banco BNI Europa will invest up to €15 million in Spain-based Lendrock’s online financing platform that specialises in near prime consumer auto financing.

The bank says the Iberian partnership begins with the acquisition of part of the existing loan portfolio, offering exposure to Lendrock’s loans and setting the stage for the acquisition of monthly origination volumes.

iZettle: From Swedish Fintech Success To Europe’s Biggest Fintech IPO (Forbes) Rated: AAA

Swedish fintech iZettle announced last week that they intend on selling shares and launching an IPO in order to raise SKr2bn by listing on Nasdaq Stockholm. With plans to increase revenue by 40 per cent a year, iZettle aims to also break even by 2020.

With JPMorgan and Carnegie on their side as joint global co-ordinators, iZettle would like to walk away with at least SKr10bn ($1.1 billion) by the end of this month or June.

 

International

The Top 100 Venture Capitalists (CB Insights), Rated: A

For the third year in a row, CB Insights partnered with The New York Times to provide an algorithmically-driven view into the question of who are the top VCs. Not swayed by narrative or a storied history in venture capital, the NYT-CBI rankings provide a current view into the best venture capitalists in the world at an individual and firm level.

Some of the top movers in 2018 include:

  • Steve Anderson of Baseline Ventures who moved from 10th place to 2nd due in part to a consistent knack for investing early in winners.  His stellar track record saw another success in recently public ecommerce company Stitch Fix.
  • And Rob Hayes of First Round Capital saw the most significant jump going from 85th to 7th for leading investments in Uberand Square.

First-time appearances on the ranking include Shawn Carolan of Menlo Ventures (investor in Roku), Meyer Malka of Ribbit Capital (investor in Credit Karma), and Albert Wenger of Union Square Ventures (investor in MongoDB).

Tech firms will be regulated like banks in future (The Finanser) Rated: A

First, we have become addicted to technology. We live our lives staring at our devices rather than talking to each other or watching where we are going.

Second is privacy. Facebook and other internet giants are abusing our privacy rights in order to generate ad revenues, as demonstrated by Cambridge Analytica, but they’re not the only one.

Third is that the power of these firms is too much. When six firms – Google (Alphabet), Amazon, Facebook, Tencent, Alibaba and Baidu – have almost all the information on all the citizens of the world held digitally, it creates a backlash and a fear.

 

Bitbond’s Loan Transfers Using Bitcoin Are Becoming More Popular (BTC Manager) Rated: A

Global peer to peer marketplace for small loans, Bitbond, allows clients the option to transfer their loans by using bitcoin. The bitcoin startup has seen its popularity grow, with the startup managing around $1 million in loans per month for 100 clients.

The revelation was made in an interview by Reuters TV with Bitbond’s German founder Radoslav Albrecht. He said the rationale behind the move is that it will help reduce the foreign exchange cost for clients.

The Benzinga Global Fintech Award Finalists For The Best Under-Banked Or Emerging Market Solution (Benzinga) Rated: B

The finalists for the Best Under-banked or Emerging Market Solution category are:

Airfox
Braviant Holdings
CreditStacks
Elevate Credit
Experian MicroAnalytics
Finn.ai
Humaniq
ID Finance
LenddoEFL
MoneyLion
Oakam
Self Lender, Inc.
Teller

Australia/New Zealand

Three disruptive forces driving Aussie neobanks like volt, as fintech startups get serious (Australian Financial Review) Rated: AAA

In a significant milestone for the local fintech scene, the Australian Prudential Regulation Authority said last week volt bank would become the first recipient of a “restricted license” under its new regime, created after the federal government indicated it wants to see more competition in banking.

Here come the robots: First digital financial advice gets green light (NZ Herald) Rated: A

Already under pressure from reputational challenges, New Zealand’s human financial advisor workforce will now have to go head to head with computer-generated advice.

KiwiSaver provider Kiwi Wealth has today received the green light to be the first to offer personalised digital financial advice and will launch the service to its KiwiSaver members next month.

Kiwi Wealth, which is owned by the Government, ACC and the New Zealand Superannuation Fund, and is a sister company to Kiwibank, is the first to gain an exemption from the Financial Markets Authority.

India

Deifying big data (Business Line) Rated: A

The fusion of big data with artificial intelligence is creating this beast called ‘data capitalism’

The world is shifting from finance to data-capitalism. The man with data is the king. Data-rich markets will destroy the existing order, money will no longer be in its pre-eminent position, labour markets will be uprooted and millions of jobs endangered, firms thrown out of business, and so on.

From solving habitual tasks to affordable interior designs – your startup fix to start the week (Your Story) Rated: A

The rules of investment have changed over the years, and peer-to-peer lending is being viewed as an investment avenue that is expected to give returns to the tune of 18-22 percent, according to industry estimates. Bengaluru-based Finzy is trying to tap on to just that. Amit More’s background in finance had him excited about the credit opportunity in India. He teamed up with Abhinanadan Sangam, and the duo chose to set shop in the ripe Indian digital lending market. Finzy was incorporated in October 2016 with Bridge FinTech Solutions Pvt Ltd as the parent company.

Asia

Keeping Loan Sharks Away From Indonesia’s Fintech Archipelago (Bloomberg) Rated: AAA

Indonesia is planning to tighten regulation of its vibrant financial technology sector, imposing new rules on companies which it hopes will stand at the forefront of efforts to extend services to more of the country’s 260 million people.

Peer-to-peer lending jumped 38 percent in the first two months of 2018 from a year earlier, hitting 3.5 trillion rupiah, and OJK director Eko Ariantoro said in March that regulators “don’t want these developing fintechs to become loan shark-like businesses.”

Asia news roundup: Didi responds to passenger killing, Flipkart founder exits, and more (Tech In Asia) Rated: B

Julo raises US$5 million in series A (Indonesia). The peer-to-peer lending startup received the funding in a round led by Skystar Capital and East Ventures. Participating investors included Convergence Ventures, Provident Capital, and Central Capital Ventura, among others.

Authors:

George Popescu
Allen Taylor

Thursday April 5 2018, Daily News Digest

Thursday April 5 2018, Daily News Digest

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-2. dv01’s Q1 securitization volume hits $2.58B. Revolut releases open API. RainFin acquires stake in 4AX. Today’s main analysis: International P2P lending volumes for March 2018. Today’s thought-provoking articles: Trends on millennials and money. A tale of two fintech sectors. Amazon could become the third largest […]

Thursday April 5 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-2 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-2 (“SCLP 2018-2”). This is a $544.6 million consumer loan ABS transaction.

This transaction represents SoFi Lending Corp.’s (“SoFi” or the “Company”) 14th rated securitization collateralized by a portfolio of unsecured consumer loans. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-2

Class Preliminary Rating Initial Class Principal
A-1 AA (sf) $277,700,000
A-2 AA (sf) $127,900,000
B A (sf) $75,000,000
C BBB (sf) $64,000,000

DV01’S Q1 SECURITIZATION VOLUME TOPS $ 2.58B, ENCOMPASSING NINE DEALS FROM SIX ORIGINATORS (DV01), Rated: AAA

dv01 closed out Q1 with nine new securitizations, totaling $2.58 billion in total issuance. This represents a 141% increase from last year’s Q1 volume, which totaled $1.07 billion.

Deals were originated by six different lenders, including Prosper, Upgrade, LendingClub, CommmonBond, SoFi, and Marlette. Three of the deals (UPT I 2018-1, UPT I 2018-2, and CLUBC 2018-2) were trust certificates. dv01 was loan data agent on eight of the nine deals; loan level data and reporting tools for all the deals are accessible through dv01’s Securitizations portal.

Millennials and Money: 30+ Trends Financial Marketers Need to Know (The Financial Brand), Rated: AAA

Here are over 30 facts, statistics and insights about Millennials banks and credit unions need to know to serve this essential market segment more effectively.

  •  Millennials want to learn how to feel financially empowered. Nearly three quarters say they feel confident in their ability to make financial decisions, but they still want to learn more. 92% believe that being educated on personal finances is important. (Source: CSpace)
  • Millennials are so serious about their financial health that more than a third (34%) have a written financial plan, much higher than the 21% of Gen X and 18% of Baby Boomers who have done the same. However, 78% rarely or never make spreadsheets for their finances, and 35% say they’d rather vomit than make a spreadsheet to help them manage their finances. (Sources: Schwab, Varo Money)
  • Maybe Millennials don’t need help from real human beings. With 85% saying artificial intelligence could help them better manage their finances, banks and credit unions should use digital tools and AI to deliver the financial insights they crave. Nearly half of Millennials say they want their bank to be able to anticipate their financial needs and offer them timely advice (Sources: Varo Money, Segmint).
  • Millennials’ top savings priorities are emergency funds (64%), retirement (49%), and buying a house (33%). Nearly half already have $15,000 or more in savings, and 16% have a whopping $100,000 or more in savings. (Source: Bank of America)
  • When it comes to saving, Millennials still have significant headwinds: three in four college graduates today will have a heavy student debt load. (Source: ABA)
  • The average graduate from the university class of 2016 has $37,172 in student loan debt, up 6% from the prior year. (Source: Student Loan Hero)
  • Student loan debt is such a burden that 70% of Millennials say that financial circumstances were a key consideration in deciding whether or not to go to college. (Source: Harvard)

Publicly Listed Fintech Companies – a Tale of Two Sectors (Lend Academy), Rated: AAA

(KFTX) is a good place to start.

Since inception in June 2016, the index has returned 46%, outperforming the broad market S&P 500 by a whopping 24%, and even the tech-heavy NASDAQ by a meaningful 9%.

Source: Lend Academy

Amazon could become the third-biggest US bank if it wants to: Bain study (CNBC), Rated: AAA

Amazon could rival the nation’s big banks in as few as five years, capitalizing off its digital prowess and massive consumer base, according to a Bain & Company report.

Pushing customers toward a co-branded banking account also allows Amazon to cut down on transaction costs, Bain said.

Amazon could – according to Bain calculations – avoid more than $250,000,000 in credit card interchange fees every year if finds a bank willing to partner on checking accounts.

Source: Bain & Company

Why Amazon won’t enter the advice market (Investment News), Rated: A

Despite what many see as the inevitability of tech giants entering the financial advice business, the economics of doing so — as well as the intensely regulated nature of the business — make their entry unlikely, according to a new report from Cerulli.

The Boston-based research firm says that “companies like Facebook, Amazon, Apple, Netflix and Google (FAANGs) have the tools and data to excel, but face significant obstacles that will likely preclude their entry,”

One major obstacle, Cerulli says, is the relatively small size of the market. The firm estimates that the “digital advice opportunity segment” represents only about 12% of investors, or a segment “that would be difficult to scale to be of strategic interest to the world’s largest technology providers.”

The Credit Junction Secures $ 150 Million Credit Facility from MidCap Financial (Business Wire), Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $150 million credit facility from MidCap Financial, a leading capital provider to the middle market specialty finance industry. The facility strengthens and expands The Credit Junction’s ability to deliver comprehensive capital solutions to businesses across the United States.

The Credit Junction combines traditional credit metrics with data intelligence and partners with business owners to deliver asset-based financing alternatives unique to the needs of each borrower. Since its launch in May 2015, The Credit Junction has helped businesses across the country achieve their growth objectives while supporting job creation and development in the communities they serve.

Real Estate Investment Platform, Sharestates, Changes the Game with User Experience (UX) (PR Newswire), Rated: A

Sharestates, an online real estate investment platform, announced today the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry.

Sharestates’ unique solution was designed by the company’s development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one stop shop” in real estate financing.

Banking Disruptors: Peer-to-Peer Lending and Payments (The Motley Fool), Rated: A

Peer-to-peer lending platforms such as Prosper and LendingClub (NYSE:LC) have changed the way people can borrow money, and apps such as Venmo and Zelle have made it easier and cheaper to send money.

In this segment from Industry Focus: Financials, analyst Michael Douglass and Motley Fool contributor Matt Frankel talk about the ways that technology is disrupting big banks, and what this trend could mean to the banking industry.

How Affirm Personal Loans Can Help You Finance Smaller Purchases (Student Loan Hero), Rated: A

The average student loan payment is $351. Between such a high monthly payment and rent, finding the money to furnish your home or buy a new computer can seem daunting.

If approved, you can now shop. When you’re ready to make a purchase, you can enter the total from your online shopping cart on Affirm’s site. You then choose an amount between $50 and $10,000. You’ll be provided virtual card information to complete the purchase. With some partner retailers, you might select Affirm at checkout instead.

LendingTree Launches Credit Analyzer, a Free Credit and Debt Analysis Tool (Lending Tree), Rated: A

LendingTree, the nation’s leading online loan marketplace, today announced the launch of its Credit Analyzer, a free credit and debt analyzer tool, which was created to help consumers avoid common credit mistakes, improve debt management skills and find the right financial products for their needs.

Credit Analyzer is a free tool that provides a deeper, instant analysis of consumers’ credit and debt situations and offers personalized recommendations based on individuals’ financial goals. The user experience is designed to make it easier for consumers to understand the most important factors that impact credit scores.

 

What will the financial services industry look like in five years? (Lend Academy), Rated: A

This article briefly touches on many of the themes being explored at our LendIt Fintech USA 2018 conference, which is now just days away:

Audits Will Go the Way of the Dodo Bird

The protocol of trust is here to stay, and it’s going to disrupt everything.

While the blockchain has not rendered audits unnecessary yet, I believe we’ll see it happen within the next five years.

Smart Contracts Are In, Long, Paper-Intensive Financial Processes Are Out

As I write this, Lending Robot is raising a private round of growth capital. The closing process, called “papering” for very obvious reasons, is just as onerous and Microsoft Word-oriented as I remember it back in the early 2000s when I was a young VC.

Fintech is Everywhere

Fintechs are enhancing the customer experience along four axes: choice, price, convenience, and predictability. They are meeting the needs of educated, aware, demanding consumers and they are attacking traditional financial institutions at every angle.

 

Five Things Fintech Startups Must Do In 2018 To Get Noticed, Adopted And Funded (Forbes), Rated: A

Here are five things the winners nailed that newcomers must do to compete:

  1. Build a seamless digital customer experience (CX) customized to each set of eyeballs, across platforms — plus, make financial services ubiquitous, instead of an unfortunate necessity.
  2. Streamline their lead generation and nurturing through automation, machine learning and AI, plus intelligent CRM throughout the customer journey. This powers faster, more accurate processes like loan origination, mortgage underwriting and credit application decisions, among others.
  3. Instead of being scared of increased regulation, embrace it as a driver of innovation.
  4. Upend an established Wall Street business model both by undercutting fees and over-delivering on performance.
  5. Find novel, values-driven ways to increase millennial participation in financial services.

Financing Small Businesses- 6 Tips For Finding An Online Loan (Bizztor), Rated: A

Online business loans are a popular option for financing small businesses. Over the years more small business owners have been turning to online lenders as banks have cut down on loans to smaller businesses.

With the assistance of technology and algorithm, online lenders are able to assess conventional credit standards like cash flow and personal credit score.

DriveWealth Raises $ 21M in Series B Funding (Finsmes), Rated: A

DriveWealth Holdings, Inc., a Chatam, N.J.-based fintech company, closed a $21m Series B funding.

The round was led by Raptor Group Holdings, SBI Holdings, Inc, and Point72 Ventures, LLC, as weel as existing investors Route 66 Ventures.

The company intends to use the funds to develop its technologies and scale its business.

Mosaic Readies New Solar Loan Deal (Global Capital), Rated: A

The San Diego-based company filed documents with the Securities and Exchange Commission on Monday for Mosaic Solar Loans 2018-1. The ABS-15G forms name Deutsche Bank and BNP Paribas as banks on the deal.

The transaction, Mosaic Solar Loans 2017-2, was priced at 185bp over interpolated swaps for the senior class, yielding 3.854%. Energy related ABS such as solar and Property Assessed Clean Energy (Pace) deals were heavily subscribed throughout last year, with strong issuance of residential Pace bonds and the first ever issuance of commercial Pace ABS from Greenworks Lending.

Laurel Road And Darien Rowayton Bank Officially Rebrand Under Integrated Laurel Road Name (PR Newswire), Rated: B

Laurel Road, an online lender and FDIC-insured bank, officially announced today that Darien Rowayton Bank and its national online lending division will rebrand under the integrated national Laurel Road brand. The new, unified Laurel Road brand represents a deep understanding of its customer base, best-in-class technology and industry-leading compliance and risk management.

Bankrupt Payday Lender Can’t Move Pa. AG’s Suit To Texas (Law 360), Rated: B

Think Finance LLC, a financial technology firm that critics say uses Native American tribes to skirt payday lending laws, failed to convince a Pennsylvania federal judge on Tuesday to move an action brought by the state’s attorney general to Texas, where it has filed for bankruptcy.

The company has been hit with lawsuits over its alleged role in several “rent-a-tribe” schemes, where a high-interest lender affiliates itself with a Native American tribe to shield itself from legal challenges.

Sarasota-Manatee ranks last for millennials buying homes (Sarasota Herald-Tribune), Rated: B

Millennials rank as the key target in the economic development world setting sights on future prosperity. A new study casts a pall over efforts to build the Sarasota and Manatee population of this prized demographic. Out of the largest 100 U.S. metropolitan statistical areas in the country, Sarasota-Manatee ranked dead last among cities favored by millennial homebuyers.

The study, conducted by LendingTree, focused on the percentages of all loan requests to the online loan marketplace that came from millennials. That figure for Sarasota fell far from top-ranked Des Moines, Iowa — 17.9 percent versus 42.4 percent. Fort Myers ranked just above Sarasota, with 19.8 percent.

The Online Lending Policy Institute (OLPI) Appoints Deputy Director (Lendit), Rated: B

Robert J. (Bob) Mullenbach, CRCM, Managing Director – Compliance Division Deputy at ProBank Austin – has been appointed as the Online Lending Policy Institute’s (OLPI) new Deputy Director. Mr. Mullenbach brings 25 years of regulatory compliance experience in billion-dollar financial institutions, regional and community banks, fintech’s, and leading consulting firms. In his current position, Bob audits clients on the myriad of regulatory requirements associated with consumer/commercial lending, bank secrecy act/anti-money laundering, privacy, and non-deposit investment products.

Microloans offer needy a better alternative (The Columbus Dispatch), Rated: B

Central Ohio chapters of the St. Vincent dePaul Society, an international charity run by Roman Catholic volunteers, give needy folks a better option through the society’s microloan program. Information is available through the organization’s website at svdpcolumbus.org.

Anyone of any faith who needs up to $500 for car repairs, school, home repairs or medical bills, can apply for a quick loan with a low interest rate and 12 to 15 months to pay it off.

Contrast that with the typical payday-loan operation, which loans a couple-hundred dollars and demands payment in two weeks. Many borrowers who are strapped enough to go to such a lender in the first place can’t pay it back that quickly. This leads to loans on top of loans, with tacked-on fees that can lead to an effective interest rate of nearly 600 percent.

SunTrust teams with fintech to offer loans for HVAC upgrades (American Banker), Rated: B

SunTrust Banks in Atlanta is teaming up with another fintech upstart to expand its reach in consumer lending.

The $202 billion-asset company said Wednesday that it has struck a partnership with the online lender Microf to offer point-of-sale loans to homeowners looking to replace aging residential heating, ventilation and air conditioning systems.

SunTrust will hold the loans on its books and a pay a fee to Microf for the referrals. Microf, based in Albany, Ga., offers the loans through its nationwide network of HVAC contractors.

United Kingdom

Revolut unleashes open API to all customers (Fintech Futures), Rated: AAA

APIs and open banking are hotter than a freshly tarmacked road in summer, and Revolut joins the mad-for-it crowd.

On its blog, the bank, which was launched in mid-2015 and offers a money transfer app, says account owners can generate sandbox and production keys, and set whitelisted IPs as an “extra layer of security”.

Away from these API days, the firm adds that over the last few months it’s been making updates to its business accounts.

New fintech fund could boost P2P sector (Peer2Peer Finance), Rated: A

At a time when investment trusts such as Victory Park Capital Specialty Lending have signalled a shift away from P2P opportunities, Augmentum Fintech’s investment adviser has hinted that P2P lenders could be included in the portfolio.

Augmentum Fintech was launched by Augmentum Capital, a venture capital (VC) firm backed by Lord Rothschild’s RIT Capital Partners, last month. The VC firm already had a 7.4 per cent holding in P2P giant Zopa worth £18.5m that has been transferred into the investment company portfolio and its founder Tim Levene, who is acting as investment adviser to Augmentum Fintech, said that the firm is well geared to the P2P sector.

FCA reveals it intervened in Collateral administration to protect investors (Peer2Peer Finance News) Rated: A

THE FINANCIAL Conduct Authority (FCA) has revealed that it intervened in the administration of Collateral because the peer-to-peer lender failed to seek its approval when it appointed an insolvency practitioner.

Wigan-based Refresh Recovery was selected by Collateral when the company shut down in February but it was revealed on Tuesday that the City watchdog was looking to appoint a different administrator.

“The Collateral companies were required to obtain the approval of the FCA when appointing an administrator,” the FCA said in a statement on Wednesday.

ISA countdown: The latest IFISAs on the market (Peer2Peer Finance News), Rated: A

March saw the introduction of tax wrappers from peer-to-peer property platforms The House Crowd and Safe as Houses, while EasyMoney, part of Sir Stelios Haji-Ioannou’s easy family of brands, launched its second IFISA offering.

Safe as Houses

The Safe As Houses ISA, which invests in loans made to Safe as Houses Group to develop, regenerate and sell on distressed properties, offers investors a return of six per cent.

The IFISA has a five-year term and requires a minimum investment of £5,000.

The House Crowd

The House Crowd’s IFISA invests in secured P2P loans and property development investments and offers a target return of seven per cent.

The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio.

Investors will get a fixed return paid in twice a year in October and April.

EasyMoney

The latest IFISA to hit the market before the deadline came from EasyMoney, offering target returns of 7.28 per cent. This eclipses the 4.03 per cent returns offered by its first product that launched in February.

The P2P lending platform said its new ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, limited to 75 per cent loan-to-value (LTV).

MINOR INVESTOR: An Innovative Finance Isa with a 7% rate is a tempting idea but tread carefully in the investing Wild West (This is Money), Rated: A

Only the peer to peer lending element can be included in an innovative Isa, not the equity version where investors take a stake in a company.

Obviously, innovative Isas don’t qualify for the savings element of the Financial Services Compensation Scheme that protects up to £85,000 per licensed bank.

Crucially, however, neither do they get the FSCS investing element that covers up to £50,000 in case your investing platform goes bust and hasn’t done what it is meant to with your money.

European Union

Robo advisors and the Data Revolution (GDPR) (AltFiNews), Rated: AAA

With just a month to go until the General Data Protection Regulation (GDPR) is implemented throughout Europe in May. We look at how the new regulatory regime will affect the nascent Digital Advice industry. Some of the upcoming regulatory changes issued from the EU and its commissioners should be positive for fintech asset managers.

With a clear focus on transparency, robo-advisors should look forward to the new era of information portability and openness.

The digital advice sector has from inception attempted to gain a competitive edge with clear transparent product engineering and pricing, but it won’t all be plain sailing and there may be headwinds ahead.

BANCO BNI EUROPA grows significantly in 2017 and attracts equity investor (Fintech Finance), Rated: A

2017 was once again characterized by the significant growth of Banco BNI Europa’s activity, increasing 41% in assets (from € 362M in 2016 to € 509M in 2017), 16% in customer deposits (from € 262M in 2016 to € 305M in 2017) and 379% in banking income (€ 2,8M in 2016 to € 13,2M in 2017). 

Net income reached € 2.3M, increasing regulatory capital to € 23.3M and the solvency ratio comfortably above the statutory limit at 13%.

International

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

Milestones achieved this month (overall volume since launch):

  • Landbay reached 100M GBP
  • Estateguru reached 50M EUR
  • Linked Finance reached 50M EUR
Source P2P Banking

Banking at a Tipping Point as Fintech Drives Change (Cash Lady News), Rated: AAA

According to Citigroup consumer banking currently generates around $870bn in revenues across Europe and North America, with digital innovators accounting for just 5% of that total. But if the report’s predictions are correct, by 2023, disruption by fintech companies will account for 17% of a total earnings pot of $1.200bn

Follow the Money

CitiGroup cites figures showing that global investment has risen from around $0.5bn in 2019 to just under $20bn today. And most of that investment – Citigroup puts it at 70% is focused on the key areas of personal and SME banking.

Read the full report here.

ROSCAcoin: A Self-Regulating, Autonomous and Decentralized Financial Platform for the Unbanked (BTC Manager), Rated: A

ROSCAcoin is a new decentralised autonomous and self-regulating platform built on the Ethereum blockchain. The project aims to develop an innovative financial infrastructure that allows creating solutions for people with little or no access to financial services. ROSCAcoin is set upon an ancient model of borrowing very popular in third world countries.

ROSCA, or Rotating and Saving Credit Association, is defined by a method of borrowing where a group of individuals agree to cooperate for saving and borrowing purposes within a pre-established period; is also a form of peer-to-peer banking and peer-to-peer lending. ROSCAcoin strives to introduce this method using the blockchain technology.

The platform is powered by its own currency RCA, which will be the engine of the whole ecosystem. By using smart contracts, ROSCAcoin is trying to build the ultimate financial solution for the unbanked.

“Stars are Aligned” for an Higher US Dollar Against the Swiss Franc (PoundSterling Live), Rated: B

The Dollar has risen 4.4% versus the Swiss Franc since mid-February and could be about to accelarate the move suggest analysts; this despite the sizeable global stock market sell-off which would normally be expected to support the safe-haven Franc.

Safe-haven currencies usually strengthen in times of fear, such as the present, however this does not appear to be the case with USD/CHF which has risen due to the USD outperforming CHF – not the other way round.

White Oak Signs Agreement to Acquire LDF Group (Globe Newswire), Rated: B

White Oak Global Advisors, LLC on behalf of its institutional clients (collectively “White Oak” or the “Company”), announced today that White Oak has agreed to expand its asset-based lending platform to serve clients in the U.K. and Europe through the acquisition of LDF Group (“LDF”), a U.K.-based finance company providing asset finance, business loans, commercial mortgages and education leases to small and middle-market companies.  Established in 1986, LDF is an industry leader and one of the largest independent finance providers for small businesses in the U.K.

India

Faircent brings Shalabh Gupta on-board as national sales head – lending (The Siasat Daily), Rated: A

Leading Peer-to-peer (P2P) lending company Faircent on Thursday announced that the company has hired Shalabh Gupta as national sales head – lending.

As an industry veteran with over 17 years of extensive sales experience with brands like the Times Group, Reliance Capital, HDFC Bank, and ITC Limited, Shalabh will play a crucial role in furthering the company’s impressive growth plans and vision as a part of its leadership team.

Aadhaar-Based EKYC Limitations Cause Trouble For Fintech Startups (Ink 42), Rated: AAA

Since the Supreme Court extended the deadline for linking of Aadhaar to host of services, the fintech segment has been riddled with burdens of limited Aadhaar-based eKYC. The companies have been unable to access Aadhaar database for verification of their customers.

Impact Of Aadhaar KYC On Fintech Startups

According to reports, fintech startups across the insurance, lending and broking sectors are being denied access to authentication agencies for eKYC to verify customer antecedents on the Aadhaar database amidst rising concern over data privacy.

UIDAI revokes e-KYC services for some e-wallets, online lenders (The Times Of India), Rated: A

In a move that seems to have left fintech players scrambling, the Unique Identification Authority of India (UIDAI) revoked on Tuesday their access to a dozen agencies that provide e-KYC verification and authentication services. Some of these agencies – KUAs (e-KYC user agencies) and AUAs (authorised user agencies) – will no longer be able to provide e-KYC verification to onboard new customers or authenticate financial transactions affecting e-wallets, online lenders, NFBCs and smaller fintech players.

Africa

RainFin acquires stake in 4AX (Business Tech), Rated: AAA

Fintech company RainFin has announced the conclusion of a transaction with 4 Africa Exchange Proprietary Limited (4AX), which will see the company sell to 4AX its corporate debt marketplace, in exchange for a strategic shareholding in 4AX.

RainFin’s credit marketplace technology has been utilised by companies to raise debt funding from both tradition and non-traditional sources since its formation in 2002.

Accra, Ghana to Host 2018 Startupbootcamp Africa (Tech in Africa), Rated: B

Accra, Ghana’s capital city will host the forthcoming Startupbootcamp (SBC) Africa Accelerator program. The SBC sponsors include the Old Mutual, BNP Paribas, RCS, PwC, and Nedbank. During the event, startups present to the panelists for about two hours.

Authors:

George Popescu
Allen Taylor

Tuesday March 27 2018, Daily News Digest

bankruptcy

News Comments Today’s main news: Ron Suber joins MoneyLion board. Prosper reports full year results. Orca launches P2P investment platform. Santander, Ripple partner on money transfer app. Cash Suvidha raises $1M. China opens payment market to foreign companies. Today’s main analysis: The cost of bankruptcy. Today’s thought-provoking articles: LendingTree studies the cost of bankruptcy. Liwwa creates big impact in MENA. The lowdown […]

bankruptcy

News Comments

United States

United Kingdom

China

European Union

International

India

Other

News Summary

United States

Ron Suber Joins Board of Fintech MoneyLion (Crowdfund Insider), Rated: AAA

Ron Suber, President Emeritus of Prosper and a prominent Fintech advocate, has joined the board of directors of MoneyLion.

Prosper Reports Full Year Results (Business Wire), Rated: AAA

Prosper today reported full year results for 2017. Loan originations and transaction fee revenue were up 31% and 37% year-over-year to $2.9 billion and $130 million, respectively. Prosper also generated cash from operations for three consecutive quarters, starting in Q2 2017.

Source: Prosper

Summary of Key 2017 Financial Highlights:

  • Surpassed $11 billion in cumulative personal loan originations through the platform since inception
  • Increased loan originations 31% and transaction fee revenue 37% year-over-year
  • Net loss of $115 million included $89 million of non-cash charges related to warrants to purchase preferred stock that were issued to a consortium of investors and a third party in connection with a settlement agreement
  • Adjusted EBITDA(1) of $5 million increased $43 million year-over-year
  • Generated cash from operations for three consecutive quarters, starting in Q2 2017
  • Closed $50 million Series G funding, ending 2017 with approximately $100 million of liquidity

Citigroup to Again Be a Nationwide Bank, but in Digital Form (Wall Street Journal), Rated: AAA

After years of Citigroup Inc. shrinking its U.S. retail banking franchise to focus on affluent customers and a handful of big cities, the global bank is ready to become a national player once again.

This time, however, it doesn’t plan on gobbling up rivals or opening any new branches. Instead, Citigroup says it will use an expanded mobile app to fully serve new customers.

LendingTree Study: The Cost of Bankruptcy (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on the cost of bankruptcy. The findings show that while a prior bankruptcy can make it more expensive to borrow, it’s certainly not impossible to qualify for credit. If borrowers wait to apply for new loans even just a few years after bankruptcy, they may find rates that aren’t too far off from what other borrowers are being offered.

Key findings:

  • Forty-three percent of people with a bankruptcy on their credit file have a credit score of 640 or higher within a year of the bankruptcy. Within two years of bankruptcy, 65 percent have a credit score above 640.
  • A typical $15,000 auto loan incurs an extra $2,171 in borrowing costs for those seeking offers less than a year after bankruptcy, but just $799 for those who wait at least two years after bankruptcy.
  • Borrowers who have a 3-year-old bankruptcy and apply for a mortgage see an offered APR that is 19 basis points higher than those without a bankruptcy. The higher the APR, the higher borrowing costs will be.
  • Mortgage borrowers with scores between 720 and 739 three years after bankruptcy were offered similar APRs to those without bankruptcy, indicating a strong credit score can counteract the effects of a prior bankruptcy.

With Marcus, Goldman Sachs takes on consumer banking (Bankrate), Rated: A

Despite becoming a bank holding company, Goldman’s business remained focused on corporations and the wealthy. That changed a few years ago as it began plotting new strategies, says Omer Ismail, chief commercial officer for Marcus. The Wall Street Journal recently published an in-depth account of the creation of Marcus, including juicy tidbits like conversations over lunch in the Hamptons.

Goldman decided to tackle the unsecured personal loan space first.

Marcus has found its particular angle in making its loans highly customizable. Rather than setting traditional loan terms, like three years or five years, it asks you how much you can afford to pay each month in addition to asking you how much you need to borrow. So, you might end up with a 31-month installment loan, which is not a conventional loan term.

Rod Buscher of Blinker (Lend Academy), Rated: A

In this podcast you will learn:

  • How Rod first made a name for himself in the car business.
  • The idea behind Blinker and why Rod decided to start the company.
  • How the buying and selling process works at Blinker.
  • The patents they have received to help identify any car in the U.S.
  • How they are able to make a safe environment for conducting a car transaction.
  • The percentage of car buyers at Blinker who opt for financing instead of paying cash.
  • How their financing process works.
  • The limits on the kinds of cars they finance.
  • The data they are using to make an underwriting decision.
  • The spectrum of the different credit profiles of their car buyers.
  • How they are getting the word out to find these buyers and sellers.
  • How they are funding their loans today.
  • Their move into auto refinancing and how they have built this business.
  • How they approach licensing in the states they operate.
  • The total number of transactions that have taken place on Blinker to date.
  • The other services they are providing to Blinker customers.
  • Rod’s vision for the future of Blinker.

Synthetic Identity Fraud: The Perfect Crime (Lendit), Rated: AAA

Synthetic identity fraud usually involves creating an entirely new identity composed of information with no ties to a known consumer. This identity is then used to apply for credit and services. Synthetic identities are one of the most difficult fraud threats institutions face today and their prevalence has exploded over the past several years. Synthetic identity fraud is arguably the perfect crime because there is no consumer victim.

Put yourself in the shoes of a fraudster. As you consider your many nefarious options for committing a crime and getting away with it, you decide that the best crime is one where there is no clear victim. Sure, robbing a bank using a synthetic identity victimizes the enterprise, its shareholders, its employees and taxes its customers. However, no one individual is intentionally, directly hurt. Therefore, the non-existent victim does not alert authorities and the fact that a crime has been committed is lost to history. There is a “credit loss” and the debtholder is impossible to locate. The debt is written off, or sold, and the fraud is perpetuated yet again. Like I said, the perfect crime.

Candex Raises $ 3.5M in Seed Funding (Finsmes), Rated: A

Candex, a San Francisco, CA-based fintech startup, raised $3.5m in seed funding.

Backers included Edenred Capital Partners, Partech Ventures, Advisors.Fund, Camp One Ventures, NFX, Tekton Ventures, Big Sur Ventures and fintech angel Mark Goines.

Hawaii is state with highest average debt-to-income ratio, study says (Pacific Business News), Rated: A

The average borrower in Hawaii spends 36.2 percent of their monthly paycheck on credit card, student loan, and housing payments, according to a study by Credible.com, making Hawaii the state with the highest average debt-to-income ratio.

According to the online lender marketplace, the average monthly credit card payment for a Hawaii resident is $238, the average monthly student loan payment is $385, and the average monthly housing payment is $1,091, for a total of $1,714.

With average annual income in Hawaii at $56,889, the state’s average debt-to-income ratio is 43 percent more than residents of Michigan, the state with the lowest debt-to-income ratio.

On average, Michigan residents in the dataset spent 25.3 percent of their monthly income on credit card, student loan and housing payments.

Nationwide, the study found the average American in the dataset paid $207 on credit card debt, $370 on student loans and $906 on housing each month, while taking home an average salary of $60,671.

Transparency Can Help Position a Fund for Growth (Lendit), Rated: A

When fund managers choose  experienced service providers, including custodians, auditors, accountants, attorneys and administrators, they can increase transparency in the fund, which can in turn promote investor confidence. Service providers can be much more than just an added expense;  they can be  valuable partners that can help position the fund for success.

United Kingdom

Orca Launches Investment Platform to Drive Mainstream Adoption of P2P Investing (Crowdfund Insider), Rated: AAA

Orca, an independent data, research and analysis provider targeting the the UK peer-to-peer (P2P) lending market, has launched its premier investment platform. The new platform will allow investors to easily diversify across multiple P2P lending platforms from a single P2P investment portfolio.

Orca seeks to provide their new service to the retail investor market.

Total cumulative lending is £13 billion since the asset class was created in 2005. Orca’s secondary service, Orca Analytics, has 2016 to 2017 growth at 18%, with £4 billion lent in 2017 alone. The estimated customer-base stands at approximately 200,000-250,000 retail investors.

The Orca Investment Platform Features include exposure to both consumer, business and property lenders. Investors may expect a return of 5% net of Orca’s cut which is a 0.65% fee.

UK digital bank that beat peers to an annual profit ‘will go into’ China — eventually (CNBC), Rated: A

OakNorth, a start-up bank based in London, recorded a pre-tax profit of £10.6 million ($15 million) in 2017 and is considered to be the first U.K. digital-orientated bank to reach such a milestone.

Khosla said his firm is already in “open conversations” with multiple countries about its global expansion plans, including the U.S., Canada, Spain, Italy, Germany, Singapore, South Africa and Australia. The company has already established offices in some of those countries, he added.

OakNorth is expanding abroad by licensing its technology platform, ACORN, to banks in other countries. The platform uses big data and machine learning to optimize credit for small-to-medium sized enterprises (SMEs).

OakNorth offers loans between £500 and £30 million to SMEs. It was granted a banking license by U.K. regulators in 2015.

‘No firm views’ on IPO

OakNorth is currently valued at $1.4 billion, which puts it in the ranks of the U.K.’s “unicorn” companies — firms valued at $1 billion or more.

It raised a total of £244 million last year in a combination of investments — the “largest U.K. fintech financing to date,” according CEO Khosla. Singaporean sovereign wealth fund GIC took a 10 percent equity stake in the firm.

Look to the Innovative Finance Isa for market-beating returns on your tax- free savings (City a.m.), Rated: A

IFISAs are also a way for investors to do something interesting with their savings. For example, Oaksmore has recently launched an Isa which allows investors to capitalise on historic renovation.

This particular IFISA, specialising in historical building renovation, offers a tax-free return of up to 7.5 per cent each year.

Another lender trying to do some- thing different is Folk2Folk, a peer-to- peer platform for rural and local businesses. It is offering an IFISA which gives lenders the opportunity to earn 6.5 per cent interest a year, while supporting British businesses within their local area.

China

China opens its payments market to foreign companies (The Paypers), Rated: AAA

China has decided to open up its payments market, allowing companies to apply for a payments license.

The People’s Bank of China said in a statement that foreign players who apply for payment licenses will receive the same treatment as local companies.

Applicants must set up local units, establish payment infrastructure — including disaster recovery systems — and store client information domestically, the central bank added.

European Union

Banco BNI Europa launches online account opening system through videoconference (Fintech Finance), Rated: AAA

Banco BNI Europa launched an online account opening process through videoconference. This new process also introduces an innovative system of documents signature with a qualified digital certificate and is available for Portuguese citizens who want to open an individual current account. The process is simple, fast and intuitive, without the usual bureaucracies associated with account opening.

This product is offered in partnership with DigitalSign, a Portuguese Certifying Entity specialized in the issuance of qualified digital certificates, registered in the National Security Office as an accredited entity. The partnership with Digital Sign allows, in addition to the online account opening, the issue of a digital certificate, with similar strength to a physical signature, which may be used by the client in the context of other contractual relations with the Bank.

International

Santander is set to launch an international money transfer app with Ripple (Business Insider), Rated: AAA

Santander is on track to launch an international money transfer app in partnership with fintech startup Ripple in the next few months, the bank’s UK CEO has confirmed.

Nathan Bostock told the International Fintech conference in London on Thursday: “This spring, if not one beats us to it, we will be the first large retail bank to carry out cross-border payments at scale with blockchain technology.”

 

Peoples Trust Company selects Finastra to fulfill end-to-end lending vision (PR Newswire), Rated: A

Peoples Trust Company of Saint Albans has selected Finastra to provide a single, end-to-end lending solution for commercial and consumer lending. Using Finastra’s Total Lending solution, which packages the power of the Fusion LaserPro, Fusion DecisionPro and Fusion CreditQuest products, the bank will be able to manage its lending process from origination through to booking and thus increase efficiency and customer service.

FintruX raises $ 25 million in their token sale to build P2P lending platform for small businesses and startups (Tech Startups), Rated: A

FintruXNetwork is a global P2P lending blockchain-based ecosystem,  powered by Ethereum. FintruX Network aims to connect borrowers, lenders, and rated service agencies. FintruX facilitates marketplace lending in a true peer-to-peer network to ease the cash-flow issues of small businesses and startups. The startup announced today it has successfully raised over 22,000 ETH  ($25 million) in token sale from contributors around the world. The proceeds of the sale will be used to build an Ethereum-based platform that will fundamentally enhance the P2P loan experience for small businesses and startups.

 

 

 

India

Lending platform Cash Suvidha raises $ 1 million in pre-series A (Financial Express), Rated: AAA

Delhi-based fintech startup, Cash Suvidha, has raised $1 million in its pre-series A round of investment from Initia Holdings Ltd., Vipin Agarwal, Partner in India Industrial Growth Fund and others. The company plans to use the newly secured funds to increase customer base and to further strengthen its technological infrastructure.

The company claims to receive 15,000 loan applications every month and disbursement of loans in another 2 working days. The company has raised a total of $5.2 million and claims to have disbursed over Rs 152 crore.

Further, Cash Suvidha has disbursed loans to over 35,000 borrowers with an average ticket size between Rs 20,000 – Rs 5,00,000.

SBI To Create Blockchain-Based Exchange For Recovering NPA’s (Inc42), Rated: A

Reportedly, India’s largest public sector bank, State Bank of India is looking to create a blockchain-based exchange for Non-Performing Assets (NPA’s).

To be launched in association with 30 banks, this platform will assist the banks in data-driven price discovery.

SBI is said to have assets over $460 Bn and offers services in areas such as retail, corporate banking, financing, and insurance. The Indian banks are said to have to battle with NPA’s worth $210 Bn of which $30 Bn resides with SBI alone.

Digital lending venture success secrets for the new-age CIOs (CIOL), Rated: AAA

Velocity

Broadly, there are three types of software systems that enterprises employ. These include:

a)Systems that help in running a business process

b)Those that help companies to grow their businesses

c)Systems that transform businesses

In the year 2013, China reported an eight-fold rise in the total number of borrowers that touched 1,49,300. The growth continued through 2014, with total borrowers reaching 630,000 by the year’s end.

Quality

Traditionally, lenders considered credit score as the key parameter in defining a borrower’s creditworthiness. In case of digital lending, a borrower’s risk profile is defined based on aspects such as Aadhaar for identification, salary slips for working professionals, and the applicant’s financial behavioral patterns determined based on information curated from online sources such as social media channels.

User Experience

Boston Consulting Group estimates that by 2020, 48% of India’s internet users will be rural and of that, 21% will be women.

Asia

Facing regulatory bar at home, QARASoft robo adviser heads overseas (Korean Herald), Rated: A

QARASoft’s now-defunct platform, called “QARA,” connected individual asset managers with funds pooled — or borrowed — from peer-to-peer investors, in part by making use of the venture firm’s artificial intelligence-powered robo adviser.

The “decentralized” platform collected some 100 retail investor loans in the first two weeks. But they were retrieved after the Financial Supervisory Service banned its operation, despite a patent earned the previous year for the pooling scheme of the fund and the platform’s three-year operation of its beta version.

The service will primarily target retail investors in overseas markets in the United States, the United Kingdom and Singapore, and the English version will be launched prior to a Korean version.

Continuous learning for SME executives (The Star Online), Rated: B

SMALL business executives who took part in the AmBank BizRACE gained a new perspective in managing their operations, allowing them to bring the business further.

The top 15 finalists in the programme recently completed two, out of four, executive development programmes at Menara AmBank.

Peoplender Sdn Bhd chief executive officer Kristine Ng, a participant in the programme, said she was inspired with a new structure for her business after the first day itself. Ng recalled one of the trainers talking about constraints that one would face in growing businesses – if it doesn’t fit the business model, then change must occur.

 

MENA

Creating big impact with a small help (Khaleej Times), Rated: AAA

According to the World Bank, 63 per cent of Mena SMEs do not have access to capital.

In Jordan, SMEs represent 97 per cent of companies and create 70 per cent of new jobs in the kingdom, according to Oxford Business Group, Jordan: Finding Financing for SMEs.

Liwwa is a peer-to-peer lending platform in the Mena region that provides SMEs with trade and asset financing. Liwwa’s target audience is divided into borrowers and investors, also referred to as lenders. To date, liwwa has maintained a solid portfolio and delivered annual returns of 10.6 per cent.

The liwwa index delivered 9.45 per cent over the last 12 months, which is attractive.

Liwwa has raised $5.55 million from investors and $6 million in debt to date. Their investors include Silicon Badia, Bank Al Etihad, DASH Ventures and Mena Venture Investments. Their debt partners include Bank Al Etihad, Capital Bank, Arab Bank and the Dutch Good Growth Fund.

Source Khaleej Times

Authors:

George Popescu
Allen Taylor

Monday February 5 2018, Daily News Digest

Nav financing

News Comments Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital. Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO. Today’s thought-provoking articles: […]

Nav financing

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United States

United Kingdom

China

European Union

International

India

APAC

MENA

Latin America

News Summary

United States

eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA

What the good fintech can giveth, it can taketh away. eBay has given PayPal the boot and turned to Dutch firm Adyen as its primary processing partner.

Looking to sweeten this bitter pill, eBay says PayPal, a “long-time” partner, will be an option at the checkout for its buyers.

PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A

Bank of America Merrill Lynch’s (BofA Merrill) US-based commercial clients can now make payments in local currencies to payees who hold PayPal accounts.

Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA

Janet Yellen chaired her last Fed meeting as the committee kept interest rates on hold in January. Futures are pricing in a 93% probability of a rate hike in March and 3 rate hikes for 2018. The recent sell off on the long end of the curve has seen 10-year treasury yields edge past 2.85%, providing respite to banks who were seeing their loan margins compress as the curve flattened.

In securitization news, Marlette completed its largest securitization to date, with MFT 2018-1 coming in at $464 Mn. The deal was significantly over subscribed and eventually upsized continuing the trend of larger deal size that we pointed out in ourQ4 securitization trackerThe senior tranches were rated AA by Kroll. The collateral pool has 40,303 loans with an average loan balance of $12k, weighted average coupon of 14.3% and a FICO score of 703. All the loans were originated by Cross River Bank.

CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Levi King, Co-founder and CEO of Nav, which is a data aggregation platform and marketplace that bridges the gap between small businesses and financial institutions. In the interview, Levi discusses the motivation behind founding Nav and how the company solves the challenges small businesses face managing their credit and securing financing solutions, among other topics.

Source: FT Partners

Download and read the full report here.

Open banking’s early adopters bet on ‘tremendous gains in value’ (American Banker), Rated: AAA

Only a few banks have embraced open banking and offer APIs to almost anyone. But they are betting on having a head start on competitors, as trends in the industry, such as increased bank-fintech partnership and evolving regulation, will push the banking-as-a-platform movement toward reality.

Operating as BBVA Compass in the U.S. in Birmingham, Ala., in 2016 it named a head of open APIs, and has engaged in several data-sharing agreements with fintechs. It is one of a handful of U.S. banks engaged in open banking — Capital One, Silicon Valley Bank, Citi and CBW Bank in Weir, Kan., also have such programs.

Last May, BBVA opened up its API Marketplace and made commercially available eight APIs so companies, startups and developers would be able to build new products and services by accessing and integrating customer’s banking data — with their permission — into their applications.

Source: American Banker

Fiserv Has Largest U.S. Marketshare of Top Bank Core Processors (Bank Innovation), Rated: A

According to data gathered by FedFis.com, the top processor is Brookfield, Wis.-based Fiserv. With more than 37% of the market share, Fiserv is well ahead of its competitors. The second, Monett, Mo.-based Jack Henry & Associates, has just half Fiserv’s market share with 17.6%. Close behind JHA is Fidelity National Information Services Inc., better known as FIS.

Enova Reports Fourth Quarter and Full Year 2017 Results (PR Newswire), Rated: A

Enova International (NYSE: ENVA), a financial technology company offering consumer and small business loans and financing, today announced financial results for the quarter and year ended December 31, 2017.

Fourth Quarter 2017 Summary

  • Total revenue of $243.7 million in the fourth quarter of 2017 increased 20.4% from $202.4 million in the fourth quarter of 2016.
  • Gross profit margin was 47.7% in the fourth quarter of 2017 compared to 51.8% in the fourth quarter of 2016, driven by growth in the installment loan and receivables purchase agreement segment as well as a higher mix of new customers, which requires higher loan loss provisions.
  • Net income was $6.9 million, or $0.20 per diluted share, in the fourth quarter of 2017 compared to net income of $8.7 million, or $0.26 per diluted share, in the fourth quarter of 2016.
  • Fourth quarter 2017 adjusted EBITDA of $38.1 million, a non-GAAP measure, increased from $35.1 million in the fourth quarter of 2016.
  • Adjusted net income of $8.9 million, or $0.26 per diluted share, a non-GAAP measure, in the fourth quarter of 2017 increased from adjusted net income of $8.5 million, or $0.25 per diluted share, in the fourth quarter of 2016.

Full Year 2017 Summary

  • Total revenue of $843.7 million in 2017 increased 13.2% from $745.6 million in 2016.
  • Gross profit margin was 53.0% in 2017 compared to 56.0% in 2016.
  • Net income was $29.2 million, or $0.86 per diluted share, in 2017 compared to net income of $34.6 million, or $1.03per diluted share, in 2016.
  • Full year 2017 adjusted EBITDA of $157.8 million, a non-GAAP measure, increased from $142.3 million in 2016.
  • Adjusted net income of $46.9 million, or $1.37 per diluted share, a non-GAAP measure, in 2017 increased from adjusted net income of $37.5 million, or $1.12 per diluted share in 2016.

No Credit? No Problem! Microlender for Women Uses Novel Approach (WSJ), Rated: A

Daniela Morales’s lender is demanding. Every Friday morning, at 9:45 sharp, she has to visit a small apartment in Woodside, Queens, to make her weekly payment—currently $293 plus $17 interest on a $6,900 balance.

Ms. Morales’s lender is Grameen America, a nonprofit microlender for women entrepreneurs. To get a Grameen loan, you don’t need any collateral or credit history, just the support of a small group of Grameen loan recipients who can vouch for you. It is, essentially, a reputation-based loan.

There are other nonprofit microlenders operating in the city, including Accion and BOC Capital Corp. But Grameen America, modeled on a Bangladeshi microlender, is unique in its peer support and loan-approval model.

The loans, which start at $500 and command an interest rate of 18% on a declining balance, must be repaid in six months. The interest rate falls as the loan is repaid. Members who establish a good track record qualify for larger sums.

How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A

Morty is an online mortgage broker. Our mission is to empower homebuyers to make smarter home financing decisions. With a modern tech stack and a marketplace of lenders, we offer customers the most options, great rates, and a transparent process.

What surprised you the most in the fintech industry in 2017?

That there wasn’t more innovation in the mortgage space. It’s the only lending vertical that hasn’t moved online- credit cards, student loans, small business loans, personal loans- all have a big online presence. There is still so much to be done in mortgage, it’s exciting.

Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A

In an article penned for JD Supra by law firm Ogletree, Deakins, Nash, Smoak & Stewart, P.C., experts warned of a type of payroll scam that sees fraudsters diverting direct deposits from employee accounts to criminal accounts.

According to the firm, fraudsters use a phishing scam by sending an email from an address similar to a legitimate company account.

Ogletree Deakins warned that not only does this scam result in lost funds, but it is ultimately a data breach, with scammers gaining access to corporate systems and data. The report also noted that scammers are targeting all types of businesses using all types of payroll providers.

Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A

The fintech industry is the powerhouse behind the meteoric rise of the peer-to-peer lending market. After several platforms launched online payments, it was only a matter of time before new ones emerged offering lending services that are offered by and to registered members.

LendingClub Corp (NYSE:LC) has been one of the most notable players in this space and its popularity pushed it public in 2014. However, since then, the company has struggled to live up to expectations, reflecting the actual picture of the status of the peer-to-peer lending.

According to critics, while peer-to-peer lending is an attractive option for borrowers looking for alternative financing solutions, it appears to have growth limitations due to lack of funding for new products. Peer-to-peer lending platforms do not take deposits and this is a limiting factor, but analysts suggest that if they are to grow to the point of rivaling the mainstream lending market, then they may have to start taking customer deposits.

How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A

TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.

The dealmakers financing top adviser technology (InvestmentNews), Rated: A

It’s impossible to look at the landscape of modern adviser technology without seeing Steve Lockshin’s footprints.

As an early investor in Betterment, Mr. Lockshin, 41, was instrumental in encouraging the robo-adviser to pivot from competing against advisers to partnering with them.

Brad Bernstein could see the role of advisers was changing.

What was once an industry of investment managers and salespeople was shifting to financial planning. Driving the change was technology — automating and commoditizing many of the ways advisers traditionally added value for clients. Mr. Bernstein, 51, managing partner at growth equity firm FTV Capital, believed there was a demand for products that helped advisers better articulate their value to clients.

That’s what attracted Brooks Gibbins, 45, to the industry when he founded FinTech Collective with his partner, Gareth Jones, in 2012. The venture capital firm has been one of the most active early-stage fintech investors over the past five years, seeding some of the biggest names on the adviser fintech scene.

Seeing the opportunity for adviser fintech startups to get acquired by, or partner with, financial institutions, Ian Sheridan decided to draw on his more than 25 years of experience in the financial services industry — working in wealth, retirement and investing in startups — to identify which technology would be part of the next wave of innovation.

Fidelity rocked the adviser fintech world in 2015 when it acquired eMoney, one of the most popular financial planning and client portal tools among independent advisers. The reported $250 million price tag proved there was money to be made in adviser fintech.

“Prior to that, there was good technology out there, but there wasn’t this stream of new business models, this new equity flowing in,” said Mike Durbin, 50, the president of Fidelity Institutional who spearheaded the deal. “The pace has clearly quickened.”

After a career that took him from E.F. Hutton to founding the Lockwood family of companies, Len Reinhart turned toward private investing in retirement.

American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A

The Florida legislature kicked off its legislative session by introducing Florida Senate Bill 894 and House Bill 935, legislation that could cover private mortgage lenders. The bills, introduced by Sen. Rene Garcia (R-Miami) and Rep. Jeanette Nunes (R-Miami), would eliminate a longstanding business purpose exemption for loans secured by a Dwelling.

On January 18, the bill passed the House Insurance and Banking Subcommittee with a 13-1 vote. On January 24, the House Commerce Committee passed the bill on a unanimous vote. The Senate similarly passed the bill on a unanimous vote in the Senate Banking and Insurance committee on January 23.

American Association of Private Lenders’ (AAPL) position is that the proposed regulation would harm Florida residents, business and the state’s economic growth by consolidating power to a few licensed parties. Private lenders provide much needed capital to a marketplace which is underserved by large financial institutions. Professional business parties need to be able to work with each other without significant regulatory intervention. The proposed regulation would result in less market competition, translating to higher interest rates, a higher cost of credit and would force business out of Florida and into neighboring states including Alabama, Georgia, Tennessee, North and South Carolina, all of which exempt business purpose loans from licensing requirements.

Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B

dv01, the data management, reporting, and analytics platform that provides institutional investors insight into lending markets, today announced the appointment of Amy Johnson as Chief Operating Officer. Johnson will report to dv01 founder and CEO, Perry Rahbar.

As COO, Johnson will be responsible for dv01’s finance, legal, and sales efforts, including helping execute the company’s vision and scale its operations.

The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B

Reston, Va.-based online lender StreetShares closed $23 million in equity funding on Jan. 24. The lender focuses on veteran-owned small businesses and relies on a peer-to-peer lending model. About $20 million of the new round is from Bethesda, Md.-based firm Rotunda Capital Partners. Previously, StreetShares had raised $8.3 million between three rounds.

United Kingdom

Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA

An Aviva executive has backed the rise of robo-advisers and called for a shake-up of financial advice to help open up the industry to the mass market.

Andy Briggs, chief executive of Aviva UK Insurance, said the current regime is freezing out large swathes of the population because only the upper echelons can afford the hefty fees.

Mr Briggs said robo-advisers could also be more powerful and beneficial to customers if the artificial intelligence did not have to carry out full financial assessments.

Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A

The Treasury committee has launched an inquiry into SME finance to look at the state of the market and the lessons to be learned from RBS’s Global Restructuring Group (GRG).
The Treasury’s inquiry will look at the extent of competition in the market, the various sources of funding available to SMEs – including P2P lending and crowdfunding – and whether the current regulatory framework provides enough protection to SMEs when they borrow money.

The committee will also consider the regulation of SME lending and whether banks should be bound by a broader set of duties when dealing with SMEs.

The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A

6) Innovative Finance ISA

An Innovative Finance ISA (IFISA) is a peer-to-peer lending or crowdfunding product. In some instances, you can generate returns of around 8 – 9% by lending to private borrowers or by taking stakes in ‘crowdfunded’ investments. The IFISA is also subject to the same £20,000 annual ISA allowance so you can split your money between this ISA, as well as cash and stocks and shares.

While this is regulated by the FCA, peer-to-peer lending is not covered by the FSCS meaning your capital is at risk.

Things can only get better, says Christie & Co (The Caterer), Rated: B

Easily available debt from banks, financial institutions, peer-to-peer lending and even crowdfunding, together with forecasts of revpar growth of 2.4% in London and 2.3% in the regions, will help drive investments. Strong leisure business enjoyed by hotels last year – up 20% – is expected to continue to grow, depending on a continued weak pound.

Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B

A UK start-up that is aiming to end the culture of late payment that plagues British business has recruited two FTSE 100 chairmen as investors and advisers.

David Tyler, chairman of supermarket chain J Sainsbury, and John Gildersleeve, chairman of property group British Land, have joined the advisory board of Previse.

The London-based business pays supplier invoices instantly and collects the money from customers later. By analysing years of payment data it uses artificial intelligence to calculate the likelihood it can collect from the big customer. It has pilots running with two large corporations and is in talks with dozens more, Mr Gildersleeve told the Financial Times.

China

Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A

OneConnect is the only one-stop FinTech-empowered solutions provider in China. Financing of the three subsidiaries received positive responses, particularly from international institutional investors, including the SoftBank Vision Fund (which invested in Ping An Good Doctor and Ping An Healthcare Technology), International Digital Group (IDG) and SBI Group etc., proving that the capital market fully recognizes Ping An’s technological innovation, the business model for its technology as well as the growth potential and business value of the Group.

European Union

Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA

Today Banco BNI Europe announced it will start lending on Fellow Finance.

‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.

U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA

U.S. payments firm Stripe said on Monday it would place its first engineering center outside its home market in the Irish capital Dublin, attracted by the city’s growing technology workforce and global outlook.

Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA

Estimates differ, but according to TechFluence, a technology research firm with offices in Frankfurt and London, the European market had assets under management of about $3.5 billion at the end of 2017. That compares with an estimated $200 billion to $250 billion in the U.S., according to Burnmark, a fintech research firm. Estimates of the number of services range from 98 to 126 in Europe, compared with about 200 in the U.S.

The cost of entry is also much lower: generally €5,000 to €10,000 (about $6,200 to $12,400), versus hundreds of thousands at least for a discretionary service through a bank, says Timo Pfeiffer, head of research and business development at Solactive AG, an index provider that has researched the growth of robo advisers in Europe.

Popular with banks

This has led to a number of banking groups preparing robo-adviser offerings, Mr. Mellinghoff says. One example is Comdirect, a subsidiary of Commerzbank , CRZBY -3.17% which launched a robo-advisory platform in May. This service, called Cominvest, had gained assets of more than €200 million as of end of December and is expected to grow rapidly in the coming years, says Sabine Schoon, head of corporate strategy and consulting at Comdirect.

The European market has also attracted interest from major U.S. providers; BlackRock Inc. BLK -2.98% announced in June 2017 that it was taking a minority stake in Scalable Capital, a robo-adviser specialist that operates mainly in the German and British markets.

BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A

Spanish bank BBVA’s dash to get customers to buy products digitally rather than in branches helped it report a 20 per cent rise in underlying full-year profits, with results boosted by lower costs as well as higher revenues.

Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A

Top P2P cryptocurrency startup Etherecash has announced that its ECH token will be listed on popular cryptocurrency exchange QRYPTOS on 6th of February 2018, following a successful crowdsale in which the company raised over 40 million USD. This news comes as The Estonian-based lending startup saw a very successful Q4 to 2017 as it gears up for its token distribution in early 2018.

Crypto-lending ICO Etherecash recorded contributions of over 40 million USD and over 46000 new registrations.

GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B

GN Compass is the first peer-to- peer lending platform for Cryptocurrency-Backed Loans.

All transactions are verified and distributed on the Ethereum Blockchain. GN Compass is joining an expanding group of pioneering projects integrating the Bancor Protocol to maximize the trading liquidity of GN Compass tokens.

Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B

New business inflows almost doubled for Europe’s exchange traded fund industry in 2017, in the run-up to the EU’s introduction of rules designed to improve market transparency and strengthen investor protection.

Net inflows into European-listed ETFs reached a record $108bn last year, up from $55.7bn in 2016, according to ETFGI, a London-based consultancy.

International

Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” studies the disruptive forces shaping the future of equity crowdfunding.

View the infographic here.

Disruptive innovation in digital banking (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in digital banking.

View the infographic here.

IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A

IdentityMind Global, Digital Identities You Can Trust, an SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud, announced the immediate availability of its KYC Plug-in for ICOs which provides a turnkey solution for customer onboarding functionality and user experience to walk ICO participants through the know your customer (KYC) process to meet regulations worldwide.

BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A

Bahrain FinTech Bay (BFB) and the Fintech Consortium (FTC) have announced a strategic partnership with OffrBox, a New York City-based Fintech start-up that has developed an end-to-end real estate transaction platform on which one can buy and sell residential properties online.

India

How early-stage startups raise money (Times of India), Rated: A

The first ’round of funding’ Abhishek Latthe got when he was setting up his wearable device startup SenseGiz in 2013 was from his family and friends. The next year, he set up a crowdfunding page on Kickstarter and raised $47,000. Late in 2014, he took out a bank loan. It was only two years later in 2015, that he could convince Karnataka Semiconductor Venture Capital Fund to back him with Rs 3 crore.

Banks do not back companies without collateral and since the business model is unproven, other investors too hesitate. So, funding options include getting help from friends and family, crowdfunding, or dipping into one’s savings, but how do founders decide on the path to take?

Gadkari says peer-to-peer lending and bridge funding, which fulfil a company’s short-term working capital needs, have also become popular. Choosing the best funding option depends on the company’s need. The next step for an entrepreneur is to negotiate the company’s valuation.

FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A

Lending is one of the oldest professions in the world and is one of the pivotal reasons for the banking system to take shape.

There is evidence of lending activities dating back to 2,000 BC between merchants, farmers and traders.

However, up till now, lending as an activity has been largely limited to financial institutes such as banks and Non-banking Financial Companies (NBFCs).

For instance, lenders on Faircent.com usually avail average gross returns of 18% to 26% per annum. This makes online P2P loans a lucrative alternative investment avenue for them.

What makes online P2P lending even more lucrative as an asset class for potential investors is the fact that it offers lenders the opportunity to diversify their investments across multiple risk buckets and loan requirements.

Source: money control

Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B

Sapan Gupta a Practice-Head at Shardul Amarchand Mangaldas said, “capitalising on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors”.

APAC

After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA

Decentralized p2p lending platform Karma has just announced trading as well as access to its platform and blockchain solutions. The project has now been backed by Danish fintech startup OpenLedger. Karma’s p2p lending platform can be used on the OpenLedger DEX platform and the Korean exchange CoinLink.

Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA

According to a report released earlier this month by EY, 21 percent of people in the world — about 1.6 billion people — are underbanked. More than 200 million micro and SMBs fall into the underbanked category, too, with access to finance the largest hurdle for many of these firms.

EY pinpointed the APAC region as a particularly wide opportunity for financial services players to address this gap: Bank revenue in this market, researchers said, could reach $88 billion by 2020. If traditional banks don’t step in, alternative financial services firms will.

“A lot of smaller, private small businesses are under-funded,” Tran noted. “It’s not like here [in the U.S.], where we have an established financial and banking system. If you implement something like a decentralized blockchain, a P2P lending system, that would enable [SMBs] to get funded a lot easier than going through the normal banking system. With blockchain technology, you can put a platform together that is smart contract-based, allowing individual investors to participate in a growing economy. On the other hand, you allow [SMBs] to get funded very quickly.”

MENA

Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA

1 PayTabs
Online payment processing solutions

2 Souqalmal.com
Financial products comparison site

4 Beehive
SME focused peer2peer lending platform

5 Yallacompare
Financial products comparison site

8 liwwa
Peer-to-peer lending platform

StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A

Innovation platform startAD will host a ten-day entrepreneurship programme, Venture Launchpad, at New York University Abu Dhabi (NYUAD), from February 18-27.

It will see ten fintech startups pitch their business ideas to investors. UAE-based early-stage startups are encouraged to apply by February 12, 2018, the application deadline.

The programme will equip them with the tools and knowledge to develop a scalable and capital efficient scheme. These include insights into crowdfunding, peer-to-peer lending, blockchain, algorithmic trading, credit scoring, cryptocurrency, payments, insurance tech and money transferrals.

Latin America

Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA

Brazilian fintech EBANX announced on Wednesday it has secured a $30 million investment from FTV Capital.

EBANX also processes payments for major merchants from 50 different countries, including the U.S. and China. The company reported that just last year it processed $1.2 billion in cross-border transactions and achieved the milestone of helping more than 30 million users from the region gain full access to major international e-commerce merchants.

Authors:

George Popescu
Allen Taylor