Friday July 5 2019, Weekly News Digest

Friday July 5 2019, Weekly News Digest

News Comments Today’s main news: Kabbage secures $200M. Funding Circle plummets 20%. Zopa to raise 200M GBP pre-IPO. RateSetter Isa attracts over 250M GBP in subscriptions. OakNorth doubles staff. Funding Societies tied up in SME financing. Today’s main analysis: Recession talk, global easing, and SoFi rated pass-thru innovation. Today’s thought-provoking articles: 10 years of marketplace […]

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Friday July 5 2019, Weekly News Digest

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

Kabbage secures 0M to fuel its AI-based loans platform for small businesses (Tech Crunch) Rated: AAA

Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.

The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.

Recession Talk and Global Easing; SoFi Rated Pass-Thru Innovation (PeerIQ), Rated: AAA

In FinTech financing news, Ocrolus, led by CEO Sam Bobley, successfully raised $24 million in their Series B led by Oak HC/FT.

Source: PeerIQ, Goldman Sachs

SoFi Pass Thru Security

SoFi this week secured a provisional A-rating from DBRS on a $200 MM pass-thru security consisting of student refi loans [ PSR and announcement ]. Notably, the structure is the first CUSIP that does not rely on over-collateralization or subordination to provide credit enhancement for investors. This is a promising innovation from the first FinTech to crack open the securitization market for student refi loans.

Ten Years of Investing in Marketplace Lending (Lending Academy) Rated: AAA

This month marks ten years since I made my first investment in what was then called peer to peer lending.

Ten Ways Marketplace Lending Has Changed Since 2009

  1. Scale
  2. The Rise of Institutional Investors
  3. The Rise of Automation

Home Affordability in the “13 Original Colonies” (DS News) Rated: A

To celebrate the Fourth of July, LendingTree, the nation’s largest online loan marketplace, has taken a look at the states that were present at the birth of the country,” said LendingTree Chief Economist Tendayi Kapfidze.

New Hampshire is the most affordable of the original 13 states, with a median home value of $244,900 and a median salary of $71,305. New Hampshire capital Concord is also the most affordable capital, with a median home value of $212,600, and a median salary of $61,310.

The least affordable state is New York, with a median home value of $293,000, which is less than Massachuset’s median value of $352,600, but New York’s median income is slightly less, at $62,765, plus an affordability surplus of just $292.

Embracing The Digital Lending Revolution (Monja Blog) Rated: A

A recent report by McKinsey & Company pointed out that in the traditional lending process of most banks, the “time to decision” for small business loans is usually from three to five weeks, while the “time to cash” can take up to three months. Personal loans usually have shorter processing times but still, take days or even weeks.

Digital lending helps banks retain individual and business customers by making the process more convenient and faster. According to an extensive survey by the American Bankers Association in 2018, an overwhelming majority of banks agree that some level of digitalization is vital to keeping their loan customers from going elsewhere.

Funds raised for direct lending hit a fresh high this year, raising concerns the market could be running a little hot amid the deluge.

Capital One keeps closing branches, even as rivals open them (American Banker) Rated: A

The McLean, Va., company, with roughly $373 billion of assets, has shuttered more than half of its branches over the past decade, including nearly 50 in the second quarter alone, according to a recent analysis by Sandler O’Neill & Partners. It now has fewer than 500 branches in eight states and the District of Columbia.

Policing The Internet Is Critical To Protecting Online Lending Consumers (Forbes) Rated: A

In May, the United States Federal Reserve issued its “

How Two College Dropouts Made $ 860 Million by the Time They Were 23 (Fortune) Rated: A

They are the founders and top executives of Brex Inc. a fintech startup recently valued at $2.6 billion, with an unlikely origin story.

Brex, which launched its first product last year, has become a fintech darling, catapulting its founders into the ranks of the richest entrepreneurs — on paper at least. Today their stakes in the company are worth an estimated $430 million each, according to an analysis by EquityZen, a marketplace for shares of tech firms that haven’t yet gone public.

A ‘turtle bank’ plays catch-up in small-business lending (American Banker) Rated: B

Provident Financial in Iselin, N.J., has partnered with a fintech to become a stronger small-business lender.

The $9.8 billion-asset company is working with Fundation to offer unsecured small-dollar loans to commercial clients. While available in Provident’s more than 80 branches, applications for loans as big as $250,000 are also being accepted online.

United Kingdom

Funding Circle shocks the City, plummeting 20% after slashing growth forecasts thanks to Brexit (Evening Standard) Rated: AAA

The FTSE 250 company now expects 20% revenue growth this year, half its previous guidance of 40%, amid slumping demand for loans from small businesses.

The latest miserable update sent its shares down 20%, or 34p, to 129.6p and piles more pain on investors after a torrid nine months on the stock market. Since going public the shares have fallen 70% amid wider concerns about the peer-to-peer lending model.

Funding Circle bins the boasts as Brexit bites (Brinkwire) Rated: A

As if to show what’s possible, the online lending platform had itself valued at a remarkable £1.5bn in the flotation last year. Investors were invited to ignore current losses and feel the growth in revenues – up 55% to £142m in 2018, it turned out.

Few businesses, even fintech operators with smart kit and a big marketing budget, can sustain that pace, but Funding Circle still reckoned 40% was on the cards this year.

Companies & Markets show: Fintech’s big bang (Investors Chronicle) Rated: A

Digital editor Graeme Davies in discussion with James Norrington and Alex Newman on the latest problems for Funding Circle, Jupiter’s fund manager departure and the massive opportunities in the fin tech space both now and in the future.

Is Funding Circle the barometer for SME opinions on Brexit? (Daily Fintech) Rated: AAA

Loans under management on the platform are up 37% for the first half of 2019 compared to the same period in 2018, currently sitting at £3.5 billion. Originations are up 14% on the prior corresponding period, at £1.2 billion. All healthy figures in their own right.

separate study by academics at St Andrew’s University found that in 2016, 25% of businesses viewed Brexit as a major obstacle to their success. This number had jumped from 16% in the year prior, when they were surveyed right after the referendum.

Zopa plans £200m fundraise ahead of bank launch and IPO (P2P Finance) Rated: AAA

ZOPA is reportedly looking to raise up to £200m as it gears up for its bank launch and a possible stockmarket flotation.

The peer-to-peer consumer lender is in talks with private equity firms and sovereign wealth funds about the fresh funding, which could be secured in the next few months, chief executive Jaidev Janardana (pictured) told Bloomberg.

RateSetter’s Isa attracts more than £250m in subscriptions (Bridging & Commercial) Rated: AAA

RateSetter has revealed that its Isa has attracted over £250m in subscriptions by the end of June.

The P2P lender’s RateSetter Isa — which was launched in February 2018 — received £50m of Isa inflows in the last three months alone.

More than 600,000 customers have used RateSetter to invest or borrow and it has originated £3.3bn of loans, which has generated over £135m in returns for investors to date.

FINTECH UNICORN OAKNORTH DOUBLES STAFF (Business Cloud) Rated: AAA

Challenger bank OakNorth has doubled its staff after securing more than $1 billion in funding.

The London-based unicorn has also signed a five-year deal to provide its technology platform, OakNorth Analytical Intelligence, to Dutch lender NIBC Bank.

With a valuation of $2.8bn, it has rapidly grown to become one of Europe’s most valuable companies, having raised more than $1bn, a record for a European FinTech, from the likes of Japan’s SoftBank Group.

Moneybox launches ISA partnership with OakNorth Bank (AltFi News) Rated: A

OakNorth’s growing role as the go-to ISA partner to the digital disruptors of UK fintech has been further cemented. The bank, which was briefly Europe’s most valuable fintech earlier this year, has today joined forces with Moneybox to offer the latter’s 200k-strong, and growing, user base a Cash Lifetime ISA.

The Moneybox Cash Lifetime ISA, with an interest rate of 1.4 per cent, is designed to help customers who are saving for their first home with its government-backed 25 per cent bonus up to £1,000 per year. Users can open an account with £1.

Nutmeg is another fintech offering the Lifetime ISA while, Skipton – the UK’s fourth largest building society – says it has had over 130,000 accounts opened to date.

OakNorth also powered tax-wrapped savings accounts for Monzo’s c.2m customers in March, although they were not Lifetime ISAs. OakNorth reported a 220 per cent increase in profits last year to £33.9m.

FIBA to publish default rates of lenders (Bridging & Commercial) Rated: A

Adam Tyler, executive chairman at FIBA, said the move followed concerns about the transparency of default rates in the industry, which was raised by members and lender partners.

Mark Posniak, managing director at Octane Capital, initiated the conversation about default interest last week via LinkedIn.

Growth Street rockets past £500m of matched loans (Business Love London) Rated: A

Growth Street, which is reinventing the business overdraft, has hit a big milestones in June. It has now matched over £500m worth of investor funds on its platform since launch in 2014.

LendingCrowd partners with Brismo for verified returns data (Fintech Finance) Rated: A

LendingCrowd, Scotland’s only fintech lending platform, has today announced that it is the latest leading marketplace to partner with Brismo to provide sophisticated and independently verified performance metrics for investors.

Brismo is a London-based provider of lending performance data that uses detailed loan information to analyse and verify returns, allowing investors to perform like-for-like analysis.

Purplebricks $ 5m US retreat shows startups need to slow down (Sifted) Rated: A

Britain’s online estate agent Purplebricks this week said it would pull out of the US to focus on its hometurf.

The peer-to-peer industry isn’t doing enough to protect investors (City AM) Rated: A

Many peer-to-peer lenders target unsophisticated retail investors, who can invest as little as £100. And yet, there is a relatively high cost to on-board small investors, because platforms have to handle customer calls, and anti-money laundering requirements.

There have been dozens of failures, but the closure of Lendy has shocked the industry. The high-profile peer-to-peer lender accrued more than £160m on its loan book, and by the time the administrators were called, £90m was believed to be in default.

Lendingblock partners with institutional crypto platform Caspian (Institutional Asset Manager), Rated: B

Lendingblock, a regulated, open exchange for institutional borrowing and lending of digital assets, has partnered with Caspian, the institutional crypto trading platform. 

This partnership enables essential market infrastructure for borrowing and lending digital assets to be scaled to institutions globally.

China

Breakneck growth in China’s credit-card debt since 2012 raises worries about a potential bust (South China Morning Post) Rated: AAA

Credit-card debt has grown more than sixfold in China since 2012, mirroring booms in other Asian markets that ended badly and raising concerns about the potential risks to Chinese banks, according to a new report from S&P Global Ratings.

The credit rating agency said that unsecured consumer lending in the mainland is expected to increase at a rate of 20 per cent annually for the next two years, a slight slowdown, but reminiscent of problematic booms in Hong Kong, South Korea and Taiwan.

Source: South China Morning Post

It is rash to expect a rerun of past stock market booms in China (Financial Times) Rated: A

One way to profit from Chinese equities is to play a familiar paradox. Market participants know that when economic growth ebbs significantly, Shanghai share prices tend to rally.

The key to this incongruity might be called the “Communist party put”. In the same way that Alan Greenspan, former chairman of the US Federal Reserve, used to relax US monetary policy when dynamism stalled, a tactic known as the “Greenspan put”, China’s ruling party often steps in when commerce starts to wilt.

Regulators curb market irregularities (Ecna) Rated: A

China has spared no efforts to carry out supply-side reform and fight against financial market irregularities by better regulating high-risk institutions to make overall risk manageable, officials of the China Banking and Insurance Regulatory Commission said on Thursday.

In the past two years, China reduced high-risk assets worth 13.74 trillion yuan ($2 trillion), restraining the flow of resources from the real economy — the part of the economy that produces goods and services — to the virtual economy, said Zhou Liang, vice-chairman of the CBIRC, at a news conference.

European Union

Fintech Lender creditshelf Doubles Loan Volume in First Half of 2019 (Crowdfund Insider) Rated: AAA

creditshelf Aktiengesellschaft, a Germany based online lender, says it lending volume has more than doubled in volume during the first 6 months of 2019. In comparing the first half of 2019 versus the first six months of 2018,  creditshelf reports that the volume of arranged loans was  € 35.8 million or 132 % higher year-on-year (prior at € 15.4 million).

June 2019 was the strongest month in creditshelf’s history with arranged loans of € 12.2 million.

The company says the pipeline for the second half of the year is well filled.

PropertyBridges attracts first tranche of peer-to-peer loans for Limerick housing project in record time (Irish Examiner) Rated: A

A project to develop 16 houses in Pallaskenry, Co Limerick, is well on track to raise the €2.4m in funding that it pitched out to peer-to-peer investors just a few weeks ago, having very quickly raised the first tranche of €665,000.

PropertyBridges.com, who are leading the financial management of the project, will raise the remainder in three further tranches when the development progresses over the next 12 months.

International

International P2P Lending Volumes June 2019 (P2P Banking) Rated: AAA

Arboribus is listed for the last time, as the platform will cease to originate new loans.

Generic Looks to Launch Tokenized Peer to Peer Lending Platform (Crowdfund Insider) Rated: A

Blockchain startup Generic wants to create a tokenized bridge for peer to peer lending/merchant cash advanced credit, according to a note from the company. While not live yet, Generic claims it will “create a direct bridge between users and companies looking for funds, without an intermediary.”

FinTech is ‘new normal’ as majority are regular users (FS Tech) Rated: B

A global survey of 883 consumers from the UK, Europe, Asia, Africa, Latin America and Australasia, by financial advisory company deVere Group found that 55 per cent were using FinTech services online or via mobile on a regular basis to access and manage their money.

Australia

Loans.com.au passes on the full rate cut, now offers mortgage rates as low as 3.03% (Mozo) Rated: AAA

This afternoon, however, loans.com.au will be bucking the trend. The online lender announced it will be passing on the cut in full to its variable home loan customers, effective immediately.

The changes will apply to both new and existing customers, and will see owner occupiers looking at rates as low as 3.03% (3.05% p.a. comparison rate*) – among the more impressive on the market. Below, we’ve compiled some stellar loans.com.au home loans for you to check out.

India

Expectations of the Fintech Industry From the Union Budget of 2019 (Entrepreneur) Rated: AAA

The online lending industry has emerged as a massive relief for both individuals and small businesses that have historically been facing a lack of funds and were rendered underserved by traditional financial institutions. But for the digital model to truly thrive, fintech lenders need to have ready access to the credit guarantee schemes being initiated by the government to build a supportive financial structure. For instance, recent government initiatives like that of SIDBI wherein loans can be provided in under an hour, or its subsidiary MUDRA have only been supporting banks, NBFCs, and micro-finance institutions. But their penetration levels are relatively low, because of which a substantial portion of these funds remain unutilized. Therefore, the fintech industry expects the government to extend credit and allow the players to participate in these recent initiatives and other measures being undertaken.

‘P2P model is a solution for many small businesses’ (Deccan Herald) Rated: A

P2P model is a solution for many small businesses that are struggling for funds. Digital lending has changed the face of many developing countries’ economies because of the transparent environment and paperless approvals.

So, from the perspective of Peer-to-Peer (P2P) industry in India, it has tremendous opportunities because this industry is still at a nascent stage and requires encouragement through tax benefits.

Canada

BMO LAUNCHES DIGITAL-ONLY LINE OF CREDIT SERVICE (Betakit) Rated: AAA

Bank of Montreal is launching a new digital-only lending solution, allowing customers to apply for a personal line of credit directly from their mobile devices.

Through the new solution, BMO said customers can apply for credit by taking a short application, receiving a decision on their loan within minutes. Customers will get a real-time decision on their application, as well as faster access to credit, allowing them to tap into their loans within 48 hours of approval.

Asia

Funding Societies in SME Financing Tie-Up (Finews) Rated: AAA

Funding Societies has entered into a partnership with Lazada Malaysia to offers merchants on the e-commerce marketplace short-term financing, Malaysian newspaper «The Star» reported on Thursday.

As part of the tie-up, the peer-to-peer lending platform will leverage alternative data from Lazada as part of its risk assessment, which will provide more opportunities for online businesses to get tailor-made financing products conveniently, the firm said in a joint press statement.

Helios P2P Sri Lanka’s First Peer-To-Peer Lending Platform Secures Second Round Funding (Daily Mirror) Rated: A

Helios P2P – Sri Lanka’s First Peer-To-Peer Lending Platform secured their second round of funding from John Keells X which is the corporate accelerator of John Keells Holdings PLC. Helios P2P were winners of the 2017 John Keells X accelerator programme and the first startup to receive funding for the second stage of the accelerator.

The peer-to –peer lending industry, valued globally at $64 billion in 2015, is growing at a compound annual growth rate of approximately 50%.

Budget Expectations 2019: P2P lending hopes for these policy changes (Banking & Finance) Rated: A

So what will it be – fiscal consolidation or a focus on growth? Getting the balance right is the key here. The top priority according to Abhishek Gandhi, Co-Founder & CFO, RupeeCircle from this budget is to tackle consumption slowdown and boost it by cutting taxes which will increase the spending power of the people, especially in rural areas and the lower income groups. The subliminal effect of this step will boost investments as well. This will especially be a shot in the arm for the Peer-to-peer (P2P) the lending landscape which has been affected by the sluggish pace of policy changes in the past several months (understandably due to the impending general elections of 2019).

Visa Indonesia opens applications for fintech innovation competition (Jakarta Post) Rated: B

Visa Indonesia, a subsidiary of California-based payment systems provider Visa, opened on Wednesday applications for its Visa Everywhere Initiative competition, which is designed to crowdsource financial inclusion solutions from local financial technology (fintech) start-ups.

Authors:

George Popescu
Allen Taylor

The post Friday July 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 21 2019, Weekly News Digest

household debt

News Comments Today’s main news: SoFi launches SoFi Invest. LendingClub forecasts bigger-than-expected Q1 loss. RateSetter ISA exceeds first-year expectations. Zopa report reveals 1 in 3 brits don’t understand Cash ISA Rate. October surpasses 100M GBP in loan repayments. Today’s main analysis: LendingClub 2018 results and 2019 guidance. Today’s thought-provoking articles: The highest seriously delinquent auto loans ever. Personal loans could […]

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

household debt

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi launches SoFi Invest and eyes additional lending products (Business Insider), Rated: AAA

US-based online personal money management startup Social Finance (SoFi) has launched an investment product, dubbed SoFi Invest, offering both active and automated investing options at no fees, while it plans to offer additional lending products, perBloomberg, citing a company letter to investors.

SoFi Invest is already live, but the company aims to further grow and develop its related offerings this year.

Source: Business Insider Intelligence

SoFi Now Offering No-Fee Brokerage for Stock and ETF Trades (Think Advisor), Rated: A

According to Bloomberg, which obtained a copy of a letter CEO Anthony Noto wrote investors in the fourth quarter, SoFi Invest had “released an alpha version” of its new brokerage platform inviting employees and select members to “buy and sell individual stocks and ETFs with the tap of a button.”  That brokerage platform is now available to anyone using the app, for no fee.

Investors can currently trade only individual stocks and ETFs on the platform; individual bonds and mutual funds are expected to be added in the future.

LendingClub forecasts bigger-than-expected first-quarter loss (WSAU), Rated: AAA

Online lender LendingClub Corp forecast a bigger-than-expected first-quarter loss on Tuesday, and revenue that missed Wall Street estimates, sending its shares down 5 percent in after-market trading.

For the first quarter, the company expects net revenue between $162 million and $172 million, below analysts’ estimates of $181.2 million, according to IBES data from Refinitiv.

LendingClub also forecast a first-quarter loss between $20 million and $15 million, compared to Wall Street estimates of a loss of $5.14 million.

LendingClub Reports 2018 Results and Guidance for 2019 (Lend Academy), Rated: AAA

Earnings season is in full swing and today LendingClub announced their results for the 2018 year. The numbers were quite strong in most areas with the company originating $10.9 billion in new loans in 2018, up 21% year over year and a new high water work in yearly originations. For Q4 loan originations were $2.87 billion down slightly from the previous quarter but up 18% year over year.

Source: LendingClub

They lost $128 million in 2018 with a $13 million loss in Q4.

Source: LendingClub

Brismo partners with LendingClub to create ‘industry standard’ performance metrics (PR Newswire), Rated: A

Brismo, the leading international provider of lending performance data, has today announced that standardized performance metrics are available representing the performance of loans made available through LendingClub*.

Lending Performance Analytics

Brismo’s analysis includes a complete historic track record in a format that is free from distortions relating to inconsistent facilitation growth rates or default profiles.

Functions available include:

  • Gross facilitation, net lending, change in outstanding principal
  • Outbound lending rates and loan term
  • Late payments including transition matrices, defaults, recoveries, recovery performance, and net loss
  • Historic PDs and LGDs
  • Net return, loss coverage and risk adjusted return
  • Cohort analysis including return projections
  • All analysis can be segmented by facilitator, risk band, asset type etc.

Highest Auto Delinquencies (PeerIQ), Rated: AAA

The Fed’s latest report on Household Debt and Credit showed that total household debt increased by $32 Bn (0.2%) to $13.54 Tn in 4Q2018, marking the 18th consecutive quarter of growth. Total debt is now $869 Bn higher than its previous peak, although it remains below its peak on a per-capita basis.

The report also showed that more than 7 Mn auto loans are delinquent for more than 90 days. This is the highest number of seriously delinquent auto loans ever and is driven mainly by subprime borrowers. Over 8% of subprime borrowers are seriously delinquent on their auto loans, but this percentage is still well below its peak of 9.7% seen in 2010.

Source: PeerIQ

In FinTech financing news, Nav a small-business lending marketplace, raised $45 Mn from GS Principal Strategic Investments among others. Nav will use the funds to expand its platform and to support more funding partners.

CommonBond, an online student loan refinancer, has raised a $750 Mn credit line from GS, Citi among others. CommonBond will use this credit facility to expand its lending operations.

Personal Loans May Increase Credit Scores of Most Borrowers (LendingTree), Rated: AAA

Americans are increasingly turning to personal loans as another option for their ongoing debt and credit needs. There are many uses for personal loans, and the most prominent are to consolidate existing debt and pay down credit cards, which often carry higher interest rates.

Key findings

  • About 62% of borrowers see their credit scores go up the month after they take out a personal loan.
  • After 12 months, around 45% of borrowers still have higher scores than they did in the month of loan origination.
  • People with lower scores are more likely to see a credit score bump: 68% of those who started with scores under 620 saw their scores increase in one month, 71% had higher scores after three and six months, and 58% had higher scores after a year.
  • People with scores under 620 saw a 20 point, or 3.4%, boost after one month. They also saw a 10 point, or 1.8%, boost after 12 months, on average.
  • On the other end of the spectrum, borrowers who started with higher scores are less likely to see a credit score bump. 57% of people with scores of 750 or higher see their scores increase after a month, and about 39% have higher scores after a year.

FinTechs Continue to Drive Personal Loan Growth (GlobeNewswire), Rated: AAA

The FinTech revolution has propelled unsecured personal loans to another record-breaking quarter. TransUnion’s (NYSE: TRU) Q4 2018 Industry Insights Reportfound that personal loan balances increased $21 billion in the last year to close 2018 at a record high of $138 billion. Much of this growth was driven by online loans originated by FinTechs.

FinTech loans now comprise 38% of all unsecured personal loan balances, the largest market share compared to banks, credit unions and traditional finance companies. Five years ago, FinTechs accounted for just 5% of outstanding balances. As a result of FinTech entry to the market, bank balance share decreased to 28% from 40% in 2013, while credit union share has declined from 31% to 21% during this time.

TransUnion also found that FinTechs are competitive with banks, with both lenders issuing loans averaging in the $10,000 range, compared to $5,300 for credit unions. Across all risk tiers and lender types, the average unsecured personal loan debt per borrower was $8,402 as of Q4 2018.

Source: TransUnion

Personal loan originations increased 22% during Q3 2018, marking the fourth consecutive quarter of 20%+ annual origination increases. While the subprime risk tier grew the fastest, prime and above originations (those with a VantageScore 3.0 of 661 or higher) represented 36% of all originations. More than 19 million consumers now have a personal loan ­product, an increase of two million from a year earlier in Q4 2017 and the highest level ever observed.

Source: TransUnion

LoanStreet’s New Commercial Lending Solution Combines Automation and Networking for Financial Institutions (PR Newswire), Rated: A

LoanStreet Inc., the first fully integrated platform that streamlines the process of sharing, managing and originating loans, now offers a new, powerful commercial loan origination and administration solution for any size financial institution, loan or deal volume. LoanStreet uniquely combines the power of networking financial institutions together with world-class lending technology that automates administrative tasks to drive growth, diversify risk, and enable lenders to better serve their customers.

Leading Small Business Lending into a Digital and Data Driven Age (LendIt), Rated: A

Small business lending contributed to 24% of the loans originated by US Banks in 2018, accounting for 600 billion last year. Small business lending by large banks remains in legacy mode with deeply entrenched manual processes, a siloed experience and a lack of customization to help meet the unique needs of small business owners.

How a $ 1.3 Billion Institution Launched Its Own Digital Bank (The Financial Brand), Rated: AAA

When IncredibleBank, the online banking division of Wisconsin-based River Valley Bank, made the list of “Top 10 Online Banks”  at GoBankingRates.com, it found itself in good company, right alongside Ally Bank, CIT Bank, Discover Bank, and Synchrony.

While not the only community bank on the list, it’s a significant accomplishment for an institution with only $1.3 billion in assets. And equally noteworthy, IncredibleBank is the only digital-first bank offering loans for luxury RVs. These motor coaches — the ones the size of a tour bus with slide-outs that turn them into 1,200 square foot homes — run upwards of $2 million.

The challenger banks catering to gig-economy workers (American Banker), Rated: AAA

Qwil

Reinsch’s startup, Qwil, focuses on providing working capital for the freelancer who has trouble, like he did, getting paid on time.

Source: American Banker

Qwil’s underwriting technology assesses the payor’s likelihood of paying. It captures information about the approval status of the invoice: Is it definitively approved, is it likely to be approved or is it simply booked and not approved? It conducts identity verification and fraud checks on each freelancer. Qwil charges a flat fee for the advance, such as 1% of the amount. No interest rate or late fees are charged. And it never goes after the freelancer or small- business person to collect.

Oxygen

Online lenders like OnDeck, Kabbage, Fundbox and Bluevine all look at accounting software data and bank account data to analyze the cash flow of and qualify small business applicants. But the freelancer graphic designer working in a Starbucks or contract copy writer can’t get this type of loan, Ahmed said.

Oxygen’s banking and lending services are bundled into a membership with a flat monthly fee of $29.99.

Ahmed wouldn’t say how many users Oxygen has. The company, which started in a Y Combinator incubator, has been in production since September has been growing users at an 80% monthly rate.

Cogni

Cogni will offer a checking account and debit card, as well as up to 12% cash back at restaurants and retailers. It will provide “curated financial and lifestyle services” in an app designed for millennials, freelancers and side hustlers.

Joust

This month, Joust started a partnership with the Freelancers Union, which has 425,000 members. In a survey, the union found that 71% of its members have trouble getting paid. It also announced an Android version of its app (it had only iOS before).

For a 1% fee it offers a guarantee the payment will be made within 30 days. For a 6% fee it will instantly fund the invoice. Users can also take out PayArmour loans when they are out of work. Eventually Joust plans to provide gap financing for those in-between times.

When Considering Banks, New Survey Finds That Millennials Prefer Technology To Human Touch (Marqeta Email), Rated: A

Millennials are unattached to traditional banks, with only 17% of them expressing firm commitment to their current banking provider,  according to new survey data from Marqeta, whose advanced payments infrastructure and open-API platform has pioneered a new standard for modern card issuing. In this research, Millennials (18-34 year olds) were 50% less likely than Baby Boomers (50-65 years old) to say that they couldn’t ever imagine wanting to change their banks.

Marqeta’s research found:

  • Only 1-in-6 Millennials said they couldn’t imagine ever wanting to change from their current bank.
  • 58% of Millennials would consider banking with Amazon, Facebook or Google if these tech giants enter the banking space.
  • 48% of Millennials said they’d consider moving to an independent digital-only bank.

Millennials Are Digital Banking Early Adopters

More than half of Americans aged 18-34 (53%) have used mobile wallets to complete a purchase in-store or on their mobile phone. That’s higher than Americans aged 35-50 (39%) and more than double those aged 51-65 (22%).

It’s also noteworthy that:

  • More than half of Millennials (52%) said they were comfortable using TouchID and FaceID to authorize mobile wallet payments — almost double the number of Baby Boomers (29%) who said the same.
  • More than twice as many Millennials (57%) than Baby Boomers (27%) said that they have used peer-to-peer banking apps like Square Cash or Venmo.
  • Millennials (49%) were twice as likely as Baby Boomers (20%) to pay someone back using a peer-to-peer banking app than a physical currency like cash or check.

Banking Apps Are More Valuable Than Tellers to Millennials

When asked about what the most important service their bank provided was, Millennials reflected much different attitudes than older Americans: Millennials were twice as likely as Baby Boomers to list a mobile app as most important (27% v 14 %), while Baby Boomers were twice as likely to list in person presence (20% v 11%).

Millennials are also abandoning old-fashioned payment methods like checks en masse, with almost half (48%) saying that they couldn’t remember the last time they wrote a check for something other than utilities and rent.

Banks Set To Invest In Legacy Systems To Combat Challenger Bank Threat (Fintech Finance), Rated: A

More than three-quarters (80%) of bankers believe challenger banks are an increased threat to their business, while almost one-third (30%) believe they will be the single most disruptive threat in 2019. The survey, commissioned by fintech provider Fraedom, found that in response the challenger bank threat, bankers expect their organisations to invest heavily in updating legacy systems (44%) and new technology (26%) in 2019.

With investing in new technology high on the agenda for commercial banks, the survey found that over half (53%) of respondents believe AI and Machine Learning will be the technologies to have the biggest impact on commercial banking in 2019.

Atlantic Capital Bank Launches Fintech Partnership with Self Lender (Nasdaq), Rated: A

Atlantic Capital (NASDAQ:ACBI) announces its partnership with Self Lender, a leading Fintech company offering consumers a way to build their credit while saving money. Atlantic Capital provides innovative financial technology companies a banking partner that has significant operational expertise and processing scale to meet the demands of a rapidly growing national client base.  The Self Lender and Atlantic Capital partnership helps efficiently deliver the credit builder account to thousands of consumers across the United States.

Impact of Intelligent Technologies on the Finance Industry (CIO Applications), Rated: A

Source: CIO Applications

Consolidated Analytics Taps Industry Finance Leader Mike Jones as Chief Financial Officer to Facilitate Aggressive Growth and Transformation (PR Newswire), Rated: B

Consolidated Analytics, a one-stop provider of property valuation, asset management, due diligence, fulfillment and advisory services for the real estate finance industry, today announced the appointment of Mike Jones as Chief Financial Officer (CFO). In this role, Jones will be responsible for developing and implementing financial strategies that will support the company’s overarching M&A integration strategy and drive corporate transformation initiatives.

United Kingdom

RateSetter Reported ISA Exceeded Expectation in First Year By Attracting £175 Million of Subscriptions (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender RateSetter recently announced its ISA has exceeded expectations in its first year, having attracted £175 million of subscriptions, and currently accounts for one-fifth of the platform’s £830 million funds under management. RateSetter unveiled its ISA in February 2018. It allows investments in peer-to-peer loans to be included in a tax-free ISA wrapper up to an investor’s £20,000 annual ISA allowance.

Zopa’s Latest Report Reveals 1 in 3 Brits in the Dark on Cash ISA Rate (Crowdfund Insider), Rated: AAA

According to Zopa, the research revealed that 1 in 3 British savers (30%) had no idea what interest they’re earning on their Cash ISA and there is a vast difference of knowledge by age with an alarming 42% of people aged between 25 to 44 being in the dark over the rate of interest they were earning on their Cash ISA, in contrast to 21% of over 55s. The research then noted that Generation Z’s were only slightly more aware than Millennials with 39% not knowing their rate of interest.

Is your money safe in an IFISA? (P2P Finance News), Rated: A

THE INNOVATIVE Finance ISA (IFISA) is starting to take off after a slow start – in the last tax year, subscriptions rose more than 700 per cent – but potential investors may still be unsure about the risks involved.

Money put into peer-to-peer loans – with or without the IFISA wrapper – is not covered by the Financial Services Compensation Scheme (FSCS).

Revolut Launches New Business Mobile App (Crowdfund Insider), Rated: A

Digital bank Revolut announced on Tuesday the launch of its new business mobile app. This news comes nearly one year after Revolut debuted its Revolut for Business. Revolut reported that through the mobile app, users may do the following:

  • Track corporate card spending in real-time
  • View card details and PIN on the go
  • Freeze or unfreeze card if it’s misplaced
  • Receive instant spending notifications after every card payment

Should bank-style stress tests for P2P lenders reassure investors? (P2P Finance News), Rated: A

Trade body the Peer-to-Peer Finance Association (P2PFA) requires its platform members to carry out bank-style stress tests on their loan portfolios, but how much confidence should P2P investors  have in these models if  the cycle turns?

P2PFA member Funding Circle has claimed its loanbook would hold up in a recession, after subjecting itself to the toughest Bank of England stress tests. The P2P business lender has said it could still deliver a three to five per cent return to investors in a downturn.

Leasing Foundation to host asset finance technology debates (Verdict), Rated: B

The newly formed Innovation Initiative from the Leasing Foundation is holding a series of breakfast debates this year to explore the asset finance industry’s relationship to technology.

The first event will feature James Alexander, co-founder of P2P lending company Zopa, as keynote speaker and will take place on 13 March from 8am to 10am at Metro Bank in Holborn, London.

Strabane firm funding 55 new homes with £7m from peer-to-peer lender (Belfast Telegraph), Rated: B

The N&R Devine Group is in the process of building the properties, which will go on the market at prices between £105,000 and £189,000.

Twenty of the homes will be built in Cookstown, 25 in Coalisland and the remainder in Sion Mills.

The Strabane-based builder secured the funding for the developments from peer-to-peer lender Assetz Capital.

China

China’s online P2P lending industry is undergoing a massive shake out (technode), Rated: AAA

China’s peer-to-peer (P2P) lending industry is in turmoil. In recent months, authorities have ramped up regulatory oversight of the world’s largest P2P lending industry. Investors are losing confidence at their stakes and pulling their funds, diminishing operators’ liquidity; many of them are facing insolvency.

This week, Chinese police froze RMB 10 billion worth of assets owned by over 380 lenders in a large-scale investigation spanning 16 countries. Dubbed Operation Fox Hunt, the investigation has led to the arrest of 62 suspects implicated in P2P fraud since last June.

The total value of the loans managed by online crowdlenders has fallen to RMB 1 trillion. Prior to the clampdown, in 2015, the total P2P loan amount was RMB 1.25 trillion, according to Chinese media (in Chinese).

Source: wdzj.com

China’s Recession-Proof Economy Heads to a Stress Test (Bloomberg), Rated: A

The reason for the slowdown isn’t clear. Uncertainty over trade with the U.S. — including tariffs, but also export controls and investment restrictions –— could be a factor, especially as other countries show signs of wariness toward Chinese technology companies. Bad investments in real estate and infrastructure could be coming back to bite. A crash in the peer-to-peer lending industry might be contributing.

Source: Bloomberg
European Union

European Marketplace Lender October Surpasses €100 Million in Loan Repayment (Crowdfund Insider), Rated: AAA

October, the European lending marketplace formerly known as Lendix, announced on Wednesday it has surpassed €100 million in loan repayment.

The online lender reported that since its launch more than €250 million has been lent to European companies and nearly 40% of this amount has already been paid into the accounts of both individual and institutional lenders through monthly repayments. October then revealed that the lenders have already supported 570 projects for an average amount of €460,000.

Machine learning: Part of Europe’s consumer loans business (AltFi), Rated: A

Machine learning technologies are widely used to establish consumer credit scores in Europe, a new report confirmed.

Around 70 per cent of financial institutions across the continent say they already use these data technologies to build consumer score cards, which dictate lending, said a survey called, Credit Risk Management 2019 – How Do You Stack Up?

The average coverage rate of non-performing loans in Europe was 46 per cent in 2018, according to the survey.

5 Fashion E-commerce Trends Helping Retailers Build a Cult Following (Klarna), Rated: A

How can you get consumers as psyched about your brand as you are? Get inspired by these five fashion e-commerce trends that are powering more meaningful engagement.
International

UK-based GBG Acquires IDology in $ 300 Million All-Cash Deal (Finovate), Rated: AAA

Identity verification and fraud prevention specialist IDology has been acquired by U.K.-based identity data intelligence firm, GBG, for $300 million (£233 million) in cash.

The deal will give GBG broader reach into the North American market; in a statement, the company said 99% of IDology’s revenues come from the United States.

Are Peer-to-Peer Loans (P2P Loans) the Best Option for a Small Business? (ForexTV), Rated: A

One of the biggest issues that every entrepreneur will have to face at some point is finding financial backing. Money is going to be essential for your business launch, and there are a variety of methods for obtaining that much-needed financial support. One of the most popular solutions is Peer-to-Peer lending (P2P). This is a useful way of getting the money you need without going through the traditional route of obtaining interest only bank loans. Those banks loans can be slow and expensive, so does P2P offer a viable alternative option? Here’s the rundown of everything you need to know about P2P loans.

Australia

Payday loans increase as households pushed into risky credit from non-bank lenders (ABC.net), Rated: AAA

Debt-stressed home owners and renters are increasingly turning to alternative lenders offering so-called “payday” loans and consumer leases, as falling property prices plunge more households into negative equity and banks crack down on credit.

Asia

5 of Vietnam’s Top Funded Fintechs (Fintech News), Rated: AAA

Fintech development is accelerating in Vietnam with companies in the sector attracting US$117 million last year, the maximum funding in Vietnamese startups in 2018. Fintech surpassed e-commerce at US$104 million and other sectors, according to funding data by local accelerator Topica Founder Institute, showcasing the eagerness of investors to take part in Vietnam’s fintech opportunity.

Source: topicafi via Facebook

Tima – US$3M

Founded in 2015, Tima is a consumer financial marketplace and peer-to-peer (P2P) lending platform. The company has signed partnerships with financial institutions, including VietinBank and Nam A Bank, and claims to have disbursed about US$1.7 billion in loans to 2.8 million borrowers and over 30,000 lenders on its platform.

Tima claims to have raised a US$3 million Series B funding round in October at a near US$20 million valuation and recently began the process of raising a Series C investment round after hiring former LendingClub COO John Donovan to its board of directors.

Short Term Loans: For Your Quick Financial Concerns (US Updates), Rated: A

In such a case, availing instant Short Term loans from an online lender may help you in different ways.

No fear of bad credit scores – These loans are available irrespective of credit score status. The Short Term poor credit loans are in possible reach of the bad credit borrowers. You do not have to face rejections due to bad credits.

Authors:

George Popescu
Allen Taylor

The post Thursday February 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 6 2018, Daily News Digest

Consumer Spending

News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

Consumer Spending

News Comments

United States

United Kingdom

International

Southeast Asia

Other

News Summary

United States

SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

Source: LendingTree
Source: LendingTree

LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

Source: LendingTree

October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

Source: Crowdfund Insider

Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

Source: Business Insider

Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

United Kingdom

P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

Zopa explained it would redefine banking with the following services:

  • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
  • Making sure money management is simple and a real person is available to discuss
  • Going beyond ‘good enough’

Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

Funding the future of the UK PLC (Business Leader), Rated: A

Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

UK housebuilders back new online property listing start-up (Financial Times), Rated: A

Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

China

Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

International

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

Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

I removed Unilend, as the platform has closed and the company has gone into receivership.

Source: P2P Banking

CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

  • Consumers first
  • Rebuilding trust
  • Lack of credibility
  • Partnership instead of competition
  • Improving the quality of lives

Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

Australia

Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

India

India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

Southeast Asia

How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

Canada

How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

Africa

Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

Authors:

George Popescu
Allen Taylor