- Today’s main news: Yirendai announces earnings results. LendingCrowd goes over 3M GBP in loan originations in May. Starling seeks 80M GBP in funds. Transferwise partners with first European bank.
- Today’s main analysis: Is Qudian too risky?
- Today’s thought-provoking articles: The most well-funded tech startups in each U.S. state. Alipay isn’t just for the Chinese. International P2P lending volumes for May 2018. How banks can stay relevant.
- The most well-funded tech startups in each state. GreenSky’s recent IPO changed this picture some. The Georgia startup is one of two marketplace lenders to make the map this year. The other one is Avant.
- Citi sets new direction for digital bank.
- How Capital One sees digital identity as a business opportunity. Marketplace lenders should see the same opportunity.
- Hottest alternative lending options for small businesses.
- Startups that help fund home ownership.
- Laurel Road partners with MoviePass.
- How credit card issuers prep for next downturn.
- Viral Shah: Rising star.
- PeerStreet executive named HousingWire 2018 viral star.
- LendingCrowd sets new record for loan originations. Congratulations.
- Starling Bank seeks 80 million GBP in funding.
- Apps aimed at millennials.
- The soarding cost of middle-class borrowing.
- Financial Conduct Authority wants to overhaul high-cost credit.
- When Tandem met Harrods.
- Revolut experiments with Slack.
- Yirendai announces earnings results.
- Is Qudian too risky?
- Easy Transfer raises funds, Hong Kong to license virtual banks, and more.
- P2P volumes for May 2018. RateSetter and Linked Finance both achieved new milestones last month. Proplend and Toborrow both saw big gains vs. the previous month and vs. last year’s month. ThinCats and Rebuilding Society saw big losses in both categories.
- Alipay is not just for the Chinese.
- How banks can stay relevant.
- Are accessible data, artificial intelligence the future of fintech?
- Lending Express gets a big investment.
- Millennials and money.
- United States
- The United States Of Startups: The Most Well-Funded Tech Startup In Every US State (CB Insights) Rated: AAA
- Citi has announced a direction for a new digital bank (Business Insider) Rated: A
- How Capital One sees digital identity as a business opportunity (American Banker) Rated: A
- Hottest Alternative Lending Options Available for Small Businesses (All Business) Rated: A
- Too broke to own a home? These startups will fund your American Dream (Fast Company) Rated: A
- Laurel Road, MoviePass Join Forces (Broadway World) Rated: A
- How credit card issuers are prepping for the next downturn (American Banker) Rated: A
- 2018 Rising Stars: Viral Shah (Housing Wire) Rated: B
- PeerStreet’s Nia Patel Named One of HousingWire’s 2018 Rising Stars (Business Wire) Rated: B
- United Kingdom
- LendingCrowd Milestone: Celebrates Record Month For Loan Origination (Crowdfund Insider) Rated: AAA
- UK challenger bank Starling seeks £80m funding (Fintech Futures) Rated: AAA
- Catch the budgeting bug: apps aimed at millennials (The Sunday Times) Rated: A
- In the red: the soaring cost of middle-class borrowing (The Times) Rated: A
- UK financial watchdog calls for ‘radical overhaul’ of high-cost credit (Financial Times) Rated: A
- When Tandem met Harrods: we had ‘sir’, but we didn’t have ‘dame’ (AltFi News) Rated: A
- Finance companies and retailers are experimenting with Slack (Tear Sheet) Rated: B
- Yirendai Announces Earnings Results (The Ledger Gazette) Rated: AAA
- Qudian: The Risky Chinese Fintech Opportunity (Seeking Alpha) Rated: AAA
- China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A
- European Union
- Transferwise partners with first major European bank BPCE (City A.M.) Rated: AAA
- How European FIs Are Building Delightful Banking Experiences (Medici) Rated: A
- International P2P Lending Volumes May 2018 (P2P Banking) Rated: AAA
- So you think Alipay is just for the Chinese? (Chris Skinners Blog) Rated: AAA
- How Banks Can Stay Relevant in a Changing World (Payments Journal) Rated: AAA
- Accessible Data and Artificial Intelligence: Is this the Future of Fintech? (Payments Journal) Rated: A
- Cyber, battery, sports tech win big investments (Isreal 21c) Rated: B
- Millennials and money (Gulf News) Rated: A
- How this fintech startup chief facilitated $ 50 million in Australian business loans without stepping foot in the country (Smart Company) Rated: AAA
- Upcoming IPOs this week (Motley Fool Australia) Rated: A
- Fintech in Iran: Challenges and opportunities (Tehran Times) Rated: AAA
The United States Of Startups: The Most Well-Funded Tech Startup In Every US State (CB Insights) Rated: AAA
Using the CB Insights database, we identified the most-well funded VC-backed technology startups by state based on disclosed equity funding. We excluded funding from debt as well as lines of credit, and only considered companies that have raised at least $1M of equity funding since 2015 to date (5/23/18).
- The most well-funded US tech startup is California’s Uber with $15.21B in disclosed equity funding (as of 5/23/18). The company is one of 10 unicorns (companies valued at $1B+) to make the map this year. The others include: Vox Media, Magic Leap, GreenSky, Avant, Draft Kings, Duo Security, Infor, AvidXChange, and Domo.
Citi has announced a direction for a new digital bank (Business Insider) Rated: A
A digital-only bank can allow Citi to continue onboarding new account holders despite its shrinking physical presence.
And because Citi already has 10 million active mobile banking customers as of Q1 2018, which represents 25% year-over-year (YoY) growth, it’s likely that consumers with Citi accounts will continue to do their mobile banking through Citi, so it’s a good move for the firm to target another customer base by leveraging its card network and cobrand partnerships.
How Capital One sees digital identity as a business opportunity (American Banker) Rated: A
Capital One has taken a different tack, spending much of the past year building out a digital identity platform that it can potentially position as a service it would sell to businesses.
By buying the startup Confyrm and hiring its founder, consumer identity expert Andrew Nash, the bank is taking another step toward making a business out of addressing the industry’s digital identity needs, industry observers say.
Hottest Alternative Lending Options Available for Small Businesses (All Business) Rated: A
Here are some trending alternative lending options—one of them may be just right for your SME.
Revolving business line of credit-Individuals and corporations are eligible to take out revolving lines of credit; this type of credit line allows entrepreneurs to pay a commitment fee and then utilize funds on an as-needed basis.
Unsecured business loan-Secured business loans require collateral and unsecured business loans do not. If you’re an entrepreneur and would prefer not to borrow money without putting your home, auto, or business inventory (or something else along those lines) up as collateral, then seeking out an unsecured business loan from an alternative lender may be your most practical option.
Crowdfunding-This funding method involves raising capital via individual investors, friends, customers, and family. It’s about tapping into the collective efforts of a big group of people, mostly through crowdfunding platforms and social media networks.
Too broke to own a home? These startups will fund your American Dream (Fast Company) Rated: A
Loftium, a Seattle-based startup, will contribute to a buyer’s down payment in exchange for Airbnb income.
Loftium has so far closed on nearly 50 homes, says Yifan Zhang, cofounder and CEO.
Other startups are taking a similarly innovative approach to the staid, highly regulated housing market. HomeFundMe, for example, helps homeowners crowdsource down payment funds from family members, friends, and employers. Point, based in San Francisco, buys equity from existing homeowners, and then cashes out when they sell–a homeowner-friendly twist on home equity lines of credit (HELOCs).
Laurel Road, MoviePass Join Forces (Broadway World) Rated: A
Laurel Road, an online lender and FDIC-insured bank, has announced an exclusive, first-of-its-kind partnership with MoviePass, the nation’s premier movie theater subscription service, designed to further amplify savings and value for its customers.
As part of the agreement, MoviePass customers who refinance their student loans with Laurel Road will receive a free annual membership to MoviePass.
How credit card issuers are prepping for the next downturn (American Banker) Rated: A
Is the next turn in the credit cycle right around the corner? Or is it still years away?
The answer has big ramifications for the $1 trillion credit card industry, which has enjoyed unusually strong profits in the post-crisis period, but typically suffers during recessions.
At an industry conference in New York, credit card industry executives said Thursday that they still see sunshine on the horizon. But they were also careful to make clear that they are taking steps to prepare for rainy days ahead.
2018 Rising Stars: Viral Shah (Housing Wire) Rated: B
Viral Shah is cofounder and head of capital markets at Better Mortgage, where he oversees financial product innovation, the mortgage marketplace and corporate nance. Shah’s experience includes consumer nance, capital markets, corporate development and strategy.
Shah led the acquisition and integration of the mortgage lender that Better Mortgage purchased in 2015, while concurrently running the $30 million Series A capital raise.
Shah built out the capital markets infrastructure for the company, obtaining multiple warehouse lines and establishing a loan marketplace representing $700 billion of annual demand and 70% of the mortgage market, including some of the largest GSEs, banks, hedge funds, REITS and asset managers.
PeerStreet’s Nia Patel Named One of HousingWire’s 2018 Rising Stars (Business Wire) Rated: B
PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that Nia Patel has been named to HousingWire’s 2018 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2018 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.
LendingCrowd Milestone: Celebrates Record Month For Loan Origination (Crowdfund Insider) Rated: AAA
LendingCrowd, one of the UK’s fastest-growing alternative finance lenders to the SME market, announced on Friday it is on course for continued expansion after completing loan deals totaling to more than £3 million during May, marking the p2p lending platform’s best month ever. The company also reported that despite the month having two bank holidays it also saw its deal volumes reach a fresh record and secured loans for 36 small business covering a wide range of sectors across Britain.
UK challenger bank Starling seeks £80m funding (Fintech Futures) Rated: AAA
Catch the budgeting bug: apps aimed at millennials (The Sunday Times) Rated: A
Chip promises to help you save “without feeling it”. You link the app to your current account (12 providers are signed up); it works out what you can afford and sends this money every few days to a savings account paying 1% interest. It’s free, regulated by the Financial Conduct Authority (FCA) and available for iOS and Android.
Plum uses Facebook Messenger to analyse your cashflow before banking money. You can invest it in peer-to-peer platform RateSetter and earn up to 3% interest (RateSetter is not covered by the Financial Services Compensation Scheme). Plum is free and available for iOS and Android.
If you are self-employed or do freelance work, Coconut allows you to track your income and outgoings and any tax you owe.
In the red: the soaring cost of middle-class borrowing (The Times) Rated: A
This week the city regulator, the Financial Conduct Authority (FCA), said charges for dipping into an unarranged overdraft, something 13 million people do each year, can be ten times higher than the cost of paying off the same amount on a payday loan.
While 19 million people use the planned overdraft that comes with their bank account, most don’t see this as debt and will also probably have paid charges.
UK financial watchdog calls for ‘radical overhaul’ of high-cost credit (Financial Times) Rated: A
The UK financial regulator called for a “radical” overhaul of rules surrounding bank overdrafts and rent-to-own businesses on Thursday, dismissing criticism that it was dragging its heels in its efforts to protect vulnerable customers.
The Financial Conduct Authority said forcing banks to give more transparent information about overdrafts would save customers more than £200m a year. The regulator said it would consider more fundamental changes in future, such as a ban on fixed fees and ending distinctions between unarranged and arranged borrowing costs.
When Tandem met Harrods: we had ‘sir’, but we didn’t have ‘dame’ (AltFi News) Rated: A
When Tandem’s banking plans went up in smoke last year, after a failed fundraise, few could have guessed that it would rise from the ashes on the wings of luxury department store Harrods’ banking arm.
But that is exactly what happened. The digital challenger completed the acquisition of Harrods Bank in January, giving it a banking licence, £80m of equity capital, £400m of deposits and a £375m mortgage loanbook. It has now launched a cashback credit card and fixed savings accounts – not to mention having signed up 100,000 customers.
In announcing that milestone earlier this week, Tandem revealed that its chief executive Ricky Knox (pictured, right-middle) had invited Harrods Bank’s 7,000 global customers to meet face-to-face in his office in the months following the acquisition.
Finance companies and retailers are experimenting with Slack (Tear Sheet) Rated: B
While no major bank has rolled out a Slack bot for customers (though they’ve done so on Facebook messenger or iMessage), challenger bank Revolut is testing its capabilities for business customers.
This week, the bank launched Revolut Connect, a feature that lets business account holders “talk” to companion apps they use frequently for crucial day-to-day functions like payroll and expense management.
Yirendai Announces Earnings Results (The Ledger Gazette) Rated: AAA
Yirendai (NYSE:YRD) issued its quarterly earnings data on Thursday, May 24th. The technology company reported $1.72 EPS for the quarter, beating the consensus estimate of $0.99 by $0.73, Briefing.com reports. The firm had revenue of $253.90 million during the quarter, compared to the consensus estimate of $250.75 million. Yirendai had a net margin of 21.93% and a return on equity of 51.90%. During the same period in the prior year, the firm posted $5.81 earnings per share.
Qudian: The Risky Chinese Fintech Opportunity (Seeking Alpha) Rated: AAA
QD’s average loan size is small. Roughly speaking it ranges from $100-200 per customer. The average cash credit was $136, as listed in its IPO prospectus. QD considers that these small credits pose a favorable risk-reward profile because customers are likely always to pay back their debts. Also, since their credit is short term, its risk is lower compared to longer-term credit products.
China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A
International Tuition Payment Platform Easy Transfer Receives Tens of Million Yuan in Series A Financing
This week, Easy Transfer announced that it has won tens of millions yuan in Series A financing, which was led by Zhen Fund and followed by IDG Capital. It is reported that this round of investment will be mainly used for product development, team-building and marketing.
The Hong Kong Monetary Authority is Expected to License Virtual Banks by the End of this Year
On May 31st, Hong Kong Monetary Authority (HKMA) issued the revised “Virtual Bank Recognition Guidelines”. The president of the HKMA, CHAN Tak-Lam, said that some interested parties have begun to submit applications to the HKMA. HKMA will carefully and quickly assess the applications and is expected to license virtual banks by as early as the end of this year.
Consumer Finance Company Dauron Secures Tens of Million Yuan in Pre-A Round of Financing
Dauron, an online consumer finance company, announced that it had received tens of million yuan in Pre-A round of financing from Jingbei Investment and Wanrui Factoring.
Transferwise partners with first major European bank BPCE (City A.M.) Rated: AAA
Out with the old and in with the new: digital money transfer service Transferwise has partnered with Banques Populaires’ and Caisses d’Espargne (BPCE), France’s second largest bank, to integrate its API directly into BPCE’s banking apps.
Set to go live at the beginning of 2019, the partnership between Groupe BPCE, its international banking arm Natixis Payments and Transferwise will see the fintech’s international payments API power all payments made digitally by the group’s 15.1m retail customers at the mid-market exchange rate.
Transactions will also be set at Transferwise’s low-cost 0.5 per cent fee on most routes, and will serve over 60 international destinations. Currently over 3m people use the platform to transfer more than €2m (£1.75m) every month.
How European FIs Are Building Delightful Banking Experiences (Medici) Rated: A
BBVA was the first financial institution in Spain to launch ‘Online Onboarding’via mobile in 2016, which allows anyone to open an account in just a few minutes and start banking right away. This service uses a procedure that verifies a customer’s identity through a selfie and a video call.
The Estonian eID card system is one of the most advanced in the world and serves as the basis for all of the digital services that are available in the country. The system has been in service for 16 years already and represents a highly sophisticated digital access card for all of Estonia’s secure e-services.
Monzo uses a photo of the customer’s passport or DL for identification and matches it to a video selfie; N26 uses passport/ID proof + video chat-based ID verification (in Germany, specific nationalities are also required to check at the closest post office to show their ID); similar to N26, Fidor asks for passport/ID proof + a video chat for ID verification.
International P2P Lending Volumes May 2018 (P2P Banking) Rated: AAA
So you think Alipay is just for the Chinese? (Chris Skinners Blog) Rated: AAA
It all started with a very good sum-up of Ant Financial’s recent $150 billion by Huy Nguyen Trieu, CEO @ The Disruptive Group. Ant were valued at around $50 billion when I first started to focus upon them two years ago, so a tripling in value in two years is notable, especially as it would make them the tenth largest bank in the world by value.
Second point is that valuation of $150 billion. In another conversation on social media, someone questioned that valuation (coincidentally a former member of Standard Chartered, Axel Winter, Former Global Chief Architect & Technology Strategy Head).
How Banks Can Stay Relevant in a Changing World (Payments Journal) Rated: AAA
The idea that we don’t care about our finances is counterintuitive. Hot new fintech start-ups and challenger banks are racing to develop apps providing evermore detailed analytics. But to make an impact and deliver real value, Brkic argues that banks need to take a step back and get better at delivering simple services that make a big difference.
Take overdraft charges. A service that alerts the consumer when they are about to go overdrawn and comes up with a solution (such as transferring money from a savings account, or temporarily extending a planned overdraft) is useful because it instantly solves a problem before it arises. For those living pay check to pay check, an avoided overdraft charge is more immediately beneficial than knowing that 10% of income is spent on dining out.
Meet the new bank. Same as the old bank
Advanced algorithms that promote generic, impersonal user experiences should be avoided. To immunise against engineers’ disease, Hammersley contends that inherently human interactions, such as customer service chatbots, should not be left solely in the hands of engineers.
Accessible Data and Artificial Intelligence: Is this the Future of Fintech? (Payments Journal) Rated: A
For organizations faced with the rise in product liability and fraud losses, AI is progressively positioned as a key tech to help robotize instant fraud detection and maximize performance in the near future. In addition, overlooked factors that influence the effectiveness of access data will include:
- Geographical variances in data
- Varied risk across products, apps, and channels
- Accuracy of fraud classification
- Relatively occurrence of fraud compared to transactions
With the advancements of AI and Accessible Data, we can add in precious metals, international currencies, peer-to-peer lending, identity protection, e-Wallet security, cloud computing access and more into the global payment experience.
Cyber, battery, sports tech win big investments (Isreal 21c) Rated: B
Lending Express of Tel Aviv, San Francisco and New York City, an AI-powered business loan marketplace with more than 55,000 customers in the US and Australia, secured $2.7 million in seed financing.
Millennials and money (Gulf News) Rated: A
Millennials make up about one-fourth of the global population today and are the inheritors of one of the largest inter-generational wealth transfers seen in human history, holding $17 trillion (Dh62.44 trillion) or about 10 per cent of the world’s private wealth. Banks and financial institutions have the challenge of catering to a newer type of customer in a rapidly changing technological environment, blurring boundaries and creating new business paradigms.
For banks, merely building a digital version of a branch is not the answer if your customers have never been to one. As author and futurist Brett King says, a bank is no longer somewhere you go to, it is something you do. Banks that are able to provide anytime, anywhere banking, combining tech and touch intelligently, stand to win.
How this fintech startup chief facilitated $ 50 million in Australian business loans without stepping foot in the country (Smart Company) Rated: AAA
Business loan marketplace Lending Express launched in Australia in 2016, and since then it’s facilitated $50 million in small business loans. But it was only last month that co-founder and chief executive Eden Amirav first set foot on Australian soil.
Now the Israeli startup has secured $US2.8 million ($3.7 million) in funding, Amirav has plans to further improve the artificial intelligence-enabled platform, and to get his message to even more Aussies.
Using artificial intelligence and machine learning, Lending Express connects small businesses seeking loans with alternative lenders. The business owner fills in an application via the online platform, and Lending Express runs an algorithm, immediately identifying the lenders that would be most likely to approve the loan.
Upcoming IPOs this week (Motley Fool Australia) Rated: A
According to ASX Ltd (ASX: ASX) there is only one IPO this week. That share is:
Prospa Group Limited (ASX: PGL)
Its principal activity is online lending to small businesses.
It’s looking to raise $146.5 million and list on 6 June 2018.
Fintech in Iran: Challenges and opportunities (Tehran Times) Rated: AAA
According to statistics published by International World Stats (IWS) until December 31, 2017, there are 56,700,000 Internet users in Iran, which is 69.1% of the population.
The internet finance in Iran is now mostly PSP-based, which offers shops online services for accepting electronic payments by a variety of payment methods including credit card and bank-based payments.