Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half […]
Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half day event included more than 500 speakers and 15 agenda themes.
Themes included :
Payments and Platforms
Banking and Personal Finance
AI and Deep Learning
Cybersecurity and Fraud
Alt Lending and Credit
Blockchain and Crypto
Digital Identity and Biometrics
And much more
While this is going to serve as a brief overview of the Conference, some of the notables who spoke, and bigger announcements, there will be special interest on Alternative lending and credit. We’ll also look at the all-important payments race.
A lot of the coverage is available on YouTube where Money20/20 has its own channel, so, if you missed the conference, you still have free access to some of the information.
Day One
Apple Co-founder Steve Wozniak is always a good bet to help you get a financial conference rolling. The business legend’s assurances that the claims that artificial intelligence (AI) and robotics, along with other forms of technology, are going to cut into human productivity are unwarranted helped to establish an ongoing theme that tech is necessary for the broader inclusiveness of our collective financial future.
Jennifer Bailey, VP Internet Services for Apple Pay, detailed some of the expansions of the new iPhone X, which include face ID security.
Other notable speakers from the first day of the conference included John Collison of Stripe, Michael Mebach, CPO of Mastercard (who spoke on how to build a seven-trillion-dollar middle class), Anand Sanwal of CB Insights, and Bill Ready of PayPal.
Day Two
Day Two’s lineup of speakers was headed by none other than Virgin’s own Richard Branson, who told a remarkable story about how he created Virgin by renting a plane and selling seats to the other passengers scheduled to be on the American Airlines flight that was delayed. Sallie Krawcheck, Ellevest’s CEO and co-founder, had some valuable remarks on diversity, and Vanessa Colella, head of Citi Ventures and CIO of CitiGroup, shared some keen insights on partnerships.
Possibly the speaker from the conferences second day who made the biggest impression was Nikolay Storonsky, CEO of Revolut. The way money is moved is changing rapidly, but if Storonsky is correct in his predictions, it may change even faster. He predicts that in 10 years, two or three large fintech players will take 95 percent of banks’ business marking an industry overhaul akin to how Amazon bypassed the retail industry and Uber took on taxis.
Day Three
Patrick Gauthier, VP of Amazon Pay, spoke to Tracey Davies’s central theme when he talked about the use of technology to make things simpler and more natural between the merchant and the consumer. Harley Finkelstein, CEO of Shopify, pointed out that middlemen will not be totally going away in the financial realm of the future, but they will have to “provide a disproportionate amount of value for their profit margin in the future.”
Other notable speakers included Asiff Hijri, president and COO of Coinbase, who framed the crypto world well when he spoke of the two base use cases of the space, the store of value of bitcoin and the ability to build apps on top of Ethereum, while noting that we’re still looking for that breakthrough app. His quote “Fintech before crypto, and the promise of a stablecoin…is like mobile before the iPhone came along” might be one of those “remember when” moments.
NBA legend Shaquille O’Neal also spoke on the third day of the conference. Now an advisor and advocate of Steady, the platform which helps Americans find work, says his partnership with these efforts is driven by recollections of a past where the only investments that paid off were those he embarked on in order to help others.
Day Four
Much of what happened on Day Four is listed below, including the Uber/Barclays and the Grab/Mastercard partnerships, but the day also had some other mentionable happenings.
Marisol Menendez, head of open innovation for BBVA, introduced the overall winner of the 10th annual BBVA Open Talent competition, the reward going to Sedicii; founder Rob Leslie accepted the award. Sedicii provides a service that identifies data between two organizations without exposing the underlying data.
Also, adding some hope for the financial sector in general, Ripple’s Co-Founder and Executive Chairman Chris Larson stated that he thinks digital assets can help guard against another financial crisis by solving some of the key problems of global liquidity. He also predicts that a fluid digital asset (he thinks it will be XRP, of course) will make more fluid the trillions of dollars that are tied up due to the “clunkiness” of current systems.
Focus on Alternative Lending and Credit Cards
As instant payments and expanded remittance options gain more prominence in the world of payments and commerce, an app designed to speed up the remittance process, designed via Visa APIs, took top honors at the conference.
American Express and Amazon announced a partnership, which will produce a no-annual-fee business card. Cardholders (Amazon Prime members) will get to choose if they want to receive five percent rewards on any Amazon purchase (Whole Foods included) or 90-day payment terms, a reward that might benefit small businesses with cash flow issues.
Goldman Sachs’s Marcus Platform announced a new wealth management offering designed to make the financial market more inclusive for average Americans. The offering will focus on online savings accounts and personal lending, the end game being to educate customers on some of the ins and outs of the financial sector.
Grab Financial and M and A Mastercard announced a partnership that will make prepaid cards available to underbanked and underserved customers in Southeast Asia in order to bring them into the financial realm and allow them to conduct business globally.
Gregory Wright, CPO and SVP of Experian, touched on a common theme from the conference, that of businesses going forward by putting consumers first. He reinforced the platform’s focus on putting the consumer at the center of the lending decision by giving the consumer more control over his or her data to allow them to make a more informed lending decision. The goal is for lenders to make better decisions at lower risk while giving more consumers access to credit.
David Richter, global head of business and corporate development for Uber, joined with Curt Hess, CEO of BarclayCard US, to announce the unveiling of the Uber Visa card. A native app specifically designed for the Uber platform, the app will make it more engaging and enjoyable for Uber riders and Uber eaters to experience the platform. The card will also offer real-time notifications of rewards and balances, rather than customers having to wait a month for a statement as credit cards traditionally do.
Other Noteworthy Announcements
ViSync took the grand prize in the conference’s hackathon challenge. According to a Visa spokesperson, their entry, an app designed to help send remittance payments overseas, should make it easier for migrant workers to send money back to their home countries.
FICO announced an “Ultra” FICO rating. The new device will consider how people manage their checking accounts and will incorporate things like overdraft history to determine credit scores. The goal is to help younger people and others with little or no credit and people who are rebuilding their credit after a couple of setbacks.
Tracey Davies, president of Money20/20, also announced the Rise Up! program, the pilot of which took place at this event. Rise Up! seeks to increase inclusion into the financial sector on all levels. This pilot program, which will expand to other demographics in the future, focused on gender (women make up 50 percent of the population, but only 20 percent of leadership roles in the financial sector.). Of the 300 women who applied to the program, only 35 were selected. Those who were selected were privy to special seminars and one-on-one access to various leaders from the financial space.
The Payments Race
Knowing how we build points of sale, I wonder if the organizers of the original event knew just how apropos the payments race would be to the overall message of the Money20/20 events. Whether they did or not, the event serves to draw a good picture of how we use and interact with different forms of currency in our daily lives.
Closely resembling the scavenger hunt of the television series The Amazing Race, five participants were given six days to make it to Las Vegas for the opening day of the convention. They drew to see which host city will host most of their scavenging, and then they all have to make it to their city and then to Vegas. Along the way, they got points for things like the number of states they visited and the different modes of transportation they use.
The catch is this: Each participant was only allowed to use one form of payment; the options were
Team Checks
Team Cash
Team Credit Cards
Team Devices (Apple Pay and such)
Team Crypto
The episodes—all of which can be seen on YouTube—show the obstacles in trying to perform these tasks with only the given form of payment.
As you can imagine, Team Checks had a hard time of it, and they had to rely on the goodness of many others to navigate their journey. Team Cash didn’t face as many obstacles, but travel required some finagling as they got deeper into the trip. Team Crypto had some transportation issues early on, but also relied on the kindness of others to make the necessary accommodations.
Team Credit seemed to have the most ease traveling—they just rented an RV and drove—and the representative from Team Devices said after it was all over that using only devices proved to be easier than she thought it was going to be; she did have to go to some pretty significant lengths to rent a car.
In all, the little series of videos showed the importance of various forms of payment and that we still haven’t gotten to the point where we can survive conveniently on one single form of payment; still, everything from the conference seems to speak to the reality that we’ll get there.
And how did the race turn out? Well, I haven’t seen an actual crowning, but Team Crypto was the first to get to the Las Vegas sign, which was basically the finish line—I haven’t seen anything that mentioned how each fared at the number of states visited or modes of transportation used. If Team Crypto did prove the winner, it was their second straight title.
The event will return to Vegas next year, the dates being October 27-30, 2019.
News Comments Today’s main news: Preview of OnDeck’s Q3 earnings. Credit Karma acquires Noddle from TransUnion, expands into UK. Lufax to move P2P lending to the blockchain. WeBank hits $21B valuation. Linked Finance loans up 63%. Nubank now worth $4B. Today’s main analysis: The unbanked approaches banking like everyone else. Today’s thought-provoking articles: HSBC, Barclays bucking the trend. International P2P lending […]
HSBC, Barclays buck the trend. Interestingly, these traditional banks are launching unsecured personal lending products while Marcus and Discover are pulling back.
On Deck CapitalONDK 26.01% releases its next round of earnings this Tuesday, Nov. 6. Get the latest predictions in Benzinga’s essential guide to the company’s Q3 earnings report.
Earnings and Revenue
Based on On Deck Capital management projections, analysts predict EPS of 12 cents on revenue of $97.33 million.
On Deck Capital EPS in the same period a year ago totaled 1 cent. Sales were $83.66 million. Revenue would be up 16.33 percent on a year-over-year basis.
QED Investors has raised its largest fund to-date. QED raised $175 Mn in its fifth fund which is focused on early-stage FinTech. QED also released their first quarterly newsletter. (Subscribe here) Matt Burton, the founder and CEO of the Orchard platform, joined as a partner and will lead QED Belay, the newly formalized founding stage investment platform.
SoFi and Marlette are issuing their fourth Consumer Unsecured deals of 2018. SCLP 2018-4 is a $549 Mn securitization. KBRA has rated the tranches A to D AAA, AA+, A+ and BBB respectively. SCLP 2018-4 is the first consumer unsecured deal to receive a AAA rating. MFT 2018-4 is a $266 Mn securitization. KBRA has rated the tranches A to C AA, A, and BBB- respectively.
HSBC and Barclays Leaning In, Marcus and Discover Pulling Back
HSBC and Barclays are launching new unsecured personal loan products. These products will complement the banks’ existing US credit card offerings while competing head-on with Marcus on its home turf. HSBC and Barclays are looking to capture a piece of the $140 Bn personal loan market, that is growing at an annualized rate of eighteen percent.
Discover and Marcus are cautious about the growth in personal loans and the potential for higher losses. GS will temper Marcus’s origination growth and not “chase volume targets”. We note that GS is the only bank whose provision for loan losses increased in Q3 – GS provisions rose by 172% YoY to $174 Mn, while loans grew by 72% – far outpacing loan growth (and what might be expected from loan seasoning).
When community advocates ask banks to provide accounts for the estimated 63 million people in the U.S. who are unbanked, bankers typically raised two concerns.
Both arguments appear to be shot down by a new trove of data collected from four of the largest banks: Bank of America, JPMorgan Chase, U.S. Bank and Wells Fargo.
Seventy-four percent of the 3 million previously unbanked people who opened accounts at the four banks in the past year are digitally active. In fact, they are heavy users of online and mobile banking. They are statistically no more likely to call or walk into a branch than existing bank customers.
Financial technology startup Credit Karma said on Tuesday it is expanding into insurance through a new service that makes it easier for users to find cheaper auto insurance policies.
The tool generates suggestions by analyzing government information on drivers and vehicles together with data from credit bureaus and public insurance rate filings, bypassing the need for users to manually input information into long forms, the company said.
ForwardLine, a nationwide direct lender providing affordable loans to small businesses, has announced strong results for third quarter 2018, achieving a 350% increase in loan originations over third quarter 2017. The company attributes its growth trajectory to strategic investments in technology, enhanced analytics, and an improved overall customer experience.
In addition, by the year 2025, 57% expect to use robotics, 55% artificial intelligence, 54% virtual reality, 53% big data, 43% augmented reality, 36% blockchain and 36% cryptocurrency.
However, when it comes to financial advice, people still want the human touch, with 71% of people wanting a robo adviser that also gives them access to human advice. Among Millennials, this jumps to 79%. This is true for 73% of Gen Xers and 64% of Baby Boomers.
Forty-six percent of Baby Boomers using a robo adviser say it is perfect for their life stage, and 45% of this demographic group expect to use a robo adviser by 2025.
Online mortgage lending has been a very large part of NBKC Bank’s business model, and remains so.
Now, people in all 50 states can apply online for a mortgage from NBKC. Its originations run between $2.5 and 3 billion annually, and the bank is one of eight mortgage lenders on Costco’s nationwide platform.
AGORA Data, Inc., a secondary loan marketplace based in Arlington, Texas, announced today, the release of the first-ever Loan Validation Report for seasoned loans. AGORA’s proprietary technology enables car dealers and finance companies to avoid compliance issues with the Truth in Lending Act (Regulation Z), by assessing in real-time any issues with the terms of a loan, either at the portfolio or individual loan level. This includes assessment of the loan APR, Finance Charges, Principal Balance, Total of Payments, Unearned Interest and Gross Balance. Violation of Regulation Z can lead to significant penalties and other legal issues.
Roostify, a leading digital lending platform provider, announced today that Courtney Keating Chakarun has joined the company as Chief Marketing Officer. Chakarun comes to Roostify from CoreLogic, where she served as Senior Vice President, Marketing & Innovation.
PeerIQ, the leading provider of risk analytics for consumer credit, today announced that Liberty Lending, a leading online platform that provides innovative borrowing solutions to deserving consumers, has entered into an agreement to license two PeerIQ products: Consumer Credit Suite and Analytics Platform.
Credit Karma, the US startup with 85 million users that offers credit reports and a platform to browse and buy other financial services, has made an acquisition to help it kick-start its first overseas expansion beyond the US and Canada: it has acquired Noddle, a UK-based credit reporting service with 4 million users, from TransUnion.
Financial terms of the deal are not being disclosed, but Valerie Wagoner, Credit Karma’s VP of International (who had previously been at Twitter), said that it will be a full acquisition of tech and employees — 35 in all — and TransUnion is not taking any stake in Credit Karma as part of this deal, although the two will continue to work together with TransUnion providing data to Credit Karma, as it had done before.
As a point of reference — and a sign of the consolidation and competition in the market — earlier this year Experian acquired another credit scoring service in the UK, ClearScore, for the equivalent of $385 million. That service has 6 million users compared to Noddle’s 4 million. Competition authorities are still investigating that deal, and Credit Karma’s will also have to get the pass from regulators before closing.
Experian is launching a new range of services to help lenders evolve their approach to making consumer credit decisions, so businesses can make more informed decisions and deliver fairer, more affordable outcomes for their customers. It’s now possible to take a multi-dimensional view of a borrower’s financial health with Experian Credit 3D.
Knowing a consumer’s credit information at a single point in time only offers a snapshot of their financial behaviour. However, by using innovative trended and alternative data sources via ExperianCredit 3D, businesses can access an unparalleled set of insights, enabling faster decisions based on a more rounded picture of affordability.
REFORMS to the way HMRC is treated as a creditor will make it harder for some peer-to-peer lending platforms to recover bad debts, an insolvency practitioner has warned.
Chancellor Philip Hammond announced in his 2018 Budget last week that HMRC would be given preferred creditor status in business insolvencies to ensure tax is collected.
Simon Bonney, a partner at Quantuma, told Peer2Peer Finance News this would impact any P2P platforms accepting floating charges, such as stock, receivables or cash at the bank, as security on loans.
Lloyds Banking Group is planning a major restructuring of its workforce, adding 2,000 jobs as it refocuses its operations on digital technology.
Britain’s biggest high street lender will cut 6,000 jobs but create another 8,000 as part of a £3bn reorganisation over the course of the next two years.
The job losses will be spread across the group transformation division, corporate banking, retail and community banking, Sky News reported. New roles will be oriented towards digital technology.
UK based flight search site Alternative Airlines, has put the cat amongst the pigeons with an announcement of a new deal with Affirm to roll out what the American company describes as its “fair and honest alternatives” to traditional payment options.
The new partnership will see customers pay for their flights in instalments, instead of one single tranche. Giving them the opportunity to plan ahead and even open up a travellers horizons by giving them a chance to experience more wide-ranging trips, with the US customers able to divide fees over three, six and 12 months instalments.
Lufax is transferring its entire peer-to-peer (P2P) lending portfolio worth “tens of billions US dollars” onto the blockchain platform, according to a post on South China Morning Post.
Tencent-backed online lender WeBank Co. Ltd. has reached a sky-high valuation of 147 billion yuan ($21 billion) after less than four years in operation, becoming one of the world’s largest “unicorn” companies.
The new valuation is based on a legal document attached to an auction notice on Taobao.com, which described the upcoming auction of a minor stake in WeBank.
WeBank’s latest valuation makes it the fifth most valuable privately-held company in the world, based on the CB Insights list.
Of the 29 virtual bank licence applications before the HKMA, submissions have been made by WeLab, HKT, Standard Chartered Bank, as well as an alliance between Australia’s Airwallex, Bank of East Asia (BEA), and mainland firm Sequoia Capital China.
There are 21.43 bank branches and 50.09 ATMs for every 100,000 residents in Hong Kong, higher than the global city average of 12.6 and 47.55 respectively in 2016, according to World Bank data.
Peer-to-peer lending platform Linked Finance has facilitated loans of over €28m in the first nine months of this year, an increase of 63% on the same time last year.
The lender said it was on track for record growth this year.
It also noted that loans in the quieter third quarter covering the summer holiday months were up more than 62% to €9.3m, while average loan size also rose significantly – up 33% to €62,000.
Zopa leads ahead of Mintosand Ratesetter. The total volume for the reported marketplaces in the table adds up to 481 million Euro. This month I added Crowdproperty.
Dofinance crossed 50M EUR total volume lent since launch.
12 QED portfolio companies named to CB Insights’ Fintech 250 list of the most promising financial services start-ups: Shout outs to AvidXchange, blooom, CircleUp, Credit Karma, Creditas, Flywire, Klarna, LendUp, Nubank, Roofstock, Signifyd, and SoFi! (Credit: QED inaugural newsletter)
LendUp’s mission is to provide anyone with a path to better financial health. Through its proprietary software, it designs safe, transparent products that expand access, lower costs, and provide credit building opportunities for the population of Americans who currently have limited options within the traditional banking system because of low credit scores and income volatility.
More than 500 fintech aficionados hit the swanky Peninsula event space in Melbourne’s Docklands last week for the third annual Intersekt festival.
The three-day shindig, organised by FinTech Australia, debated topics such as how start-ups can capitalise on the loss of trust in incumbent institutions (exacerbated by the banking royal commission); and the extraordinary rise of “neobanks” around the world.
Anthony Eisen, co-founder of local payments star Afterpay, and Chad West, the marketing head of globally focused neobank Revolut, explained how they have lured customers by reinventing traditional fee models.
LARGE unexpected expenses are hitting the household budgets of two-thirds of Australians, and many are resorting to dangerously expensive credit cards to get themselves out of a financial jam.
Cars are the biggest cause of unpleasant financial surprises, according to new research by marketplace lender SocietyOne, followed by travel costs and medical bills.
The lender’s When ‘It’ Happens report reveals that 40 per cent of people would cover unexpected costs by borrowing money from family and friends, almost 20 per cent would add the expense to their mortgage, 31 per cent would sell stuff, and 28 per cent would take on extra credit card debt.
Iwan Kurniawan, 28, Indonesia; Reynold Wijaya, 29, Indonesia Co-Founder, Modalku
Together with Kelvin Teo, Iwan Kurniawan and Reynold Wijaya founded Indonesia-based Modalku, called Funding Societies in its sister operations in Singapore and Malaysia, a peer-to-peer (P2P) digital lending platform that connects cash-strapped SMEs with lenders. The startup is backed by Sequoia, Softbank Ventures Korea, and Alpha JWC Ventures, and recently passed the US$110 million mark through more 3,000 loans to businesses in the region.
Rachel De Villa, 25, Philippines Founder and CTO, Cropital
Rachel De Villa is the co-founder and CTO of Cropital, a crowdfunding platform that helps finance local Filipino farmers. Established in 2015, Cropital aims to improve the income and productivity of farmers through crowdfunding, providing scalable and sustainable financing. Through Cropital’s online platform, investors choose a farm or farms to invest in. Cropital manages the fund for the farmer making sure it goes to the right resources, assuring as well that investors will get a return on investment.
Abraham Viktor, 25, Indonesia Co-Founder and CEO, Taralite
Abraham Viktor is the co-founder and CEO of Taralite, a P2P lending platform. Taralite’s loans are issued by financial institutions other than banks, also known as multi-financers, which allows it to reduce the interest rate up to 2% and extend the loan period of up to three years. The platform accepts houses, cars or motorcycles as collateral. Founded in January 2015 as Wedlite, Taralite graduated from startup incubator program Global Entrepreneurship Programme Indonesia (GEPI) in November 2015. Previously, Viktor was an investment banking analyst, first with Boston Consulting Group and later at Nomura investment banking.
Mohamed Abbas, 27, Singapore Co-Founder, Rely
Mohamed Abbas is a tech entrepreneur and the co-founder of Rely, a startup that enables online shoppers to shop and pay for their purchases by splitting their cost into manageable monthly payments, interest-free. Abbas is also the co-founder of Onelyst, an online marketplace that helps users from lower-income brackets compare loan rates across different licensed moneylenders. The website allows users to find loans for different purposes, such as medical or rental expenses, and produces a list of personalized options in minutes.
The federal government announced during the tabling of Budget 2019 on Friday (2 November) that it will introduce a “property crowdfunding” platform by Q1 2019 to help Malaysians buying their first homes, reported Bernama.
On Sunday (4 November), Prime Minister Tun Dr Mahathir Mohamad said the scheme is the first of its kind in the world, and will enable people to buy a home as long as they can a pay the 20 percent down payment, which can be financed via savings, debts or withdrawals from their Employee Provident Fund (EPF) account. The remaining 80 percent will be funded by investors via peer-to-peer lending supervised by the Securities Commission.
Dubbed as FundMyHome.com, the property crowdfunding platform is expected to help the Pakatan Harapan administration fulfil its election promise of one million low-cost housing within 10 years.
CIMB and Maybank are the participating institutions that will contribute towards the externally funded 80-percent portion of the house price, with more expected to sign up in the future.
The site – developed by finance and real estate media platform The Edge – will list about 1,000 homes costing less than US$120,000 during the first phase of its rollout. All properties listed will be completed or near completion, and buyers looking for rental income will be allowed to “buy to rent” through the portal.
News Comments Today’s main news: SoFi CEO explains how market volatility, rising interest rates create opportunities. Amazon debuts no-fee AmEx card for small businesses. Funding Circle broker channel hits 1B GBP lending. China Rapid Finance is expected to break even. Today’s main analysis: Funding Circle’s short-lived rally. Today’s thought-provoking articles: Is student loan debt creating a millennial class […]
Rising interest rates and market volatility, while feared on the Street, create an opportunity for online lending platform SoFi to gain new customers, according to CEO Anthony Noto.
“When the markets pull back, people evaluate: ‘Where am I putting my money from an investment standpoint?'” Noto said on CNBC’s “Closing Bell” on Tuesday.
The two companies unveiled a new co-branded card for small businesses on Tuesday. Cardholders with an Amazon Prime membership will be able to choose between an interest-free loan for 90 days or 5 percent back on purchases made at Amazon.com, Amazon Business, Amazon Web Services and Whole Foods Market, the companies said in a statement. The no-fee metal card will also offer 2 percent back on purchases at U.S. restaurants and gas stations and on mobile-phone services.
MagnifyMoney, an independent service that compares financial products and is affiliated with the loan marketplace LendingTree, recently analyzed 2016 data from the Federal Reserve and estimated the average millennial with student debt had 75 percent less net worth than their debt-free peers. Though many of the stats they calculated might have been skewed by extremes—think people with debt loads of $200,000 and trust-fund kids worth seven figures—they were able to reach some pretty startling conclusions. For instance, the median net bank account balance (checking and savings) of all grads under 35 who had loans, they found, was $5,500, while it was some $10,180 for those who didn’t.
So what’s the most meaningful difference between those with loans and without?
The one that’s really most costly is when you look at the retirement savings. On that side, the average grad under 35 with debt has around $21,000 in retirement savings. Someone who doesn’t have student loans has an average of almost $40,000.
In particular, changes in the credit card market have been heavily influenced by the youngest generations. While TransUnion studies have found that consumers generally have a much higher propensity of opening their next credit product with a lender with whom they already have multiple relationships, this doesn’t appear to hold true for Gen Z. Younger consumers are engaging with new lenders rather than going to existing lenders for new products. In the report, Gen Z respondents indicated that they were the least likely to open a new credit product with a financial institution as a result of an existing relationship with that lender.
While consumers are carrying more credit cards in their wallets today than in 2010, the industry has seen five straight quarters of declining year-over-year origination growth. The study also found that the average duration for which a credit card remains open has shortened across the majority of age groups, which would indicate shifting loyalty.
The financial services industry is being transformed by insurgent startups. From capital markets to insurance and digital banking to wealth management, the Fintech 250 are among the most promising of these companies globally.
CB Insights today named Lendio to the second annual Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology.
“It’s an honor for Lendio to be listed among the innovative companies driving the fintech industry forward,” said Brock Blake, Lendio CEO and founder. “Lendio is doing its part to power the economy by bridging the financing gap for small businesses. We are committed to shaping the future of marketplace lending to help business owners unlock their financial potential.”
Lendio, the nation’s leading marketplace for small business loans, recently announced it has facilitated over $1 billion in financing to more than 51,000 small businesses across the U.S. Through access to this growth capital, Lendio’s small business customers have generated an estimated $3.8 billion in gross economic output and created more than 25,000 jobs nationwide. Lendio’s milestone comes after an 80 percent increase in loans funded through its platform in the last year.
The CEOs of Prosper Marketplace, Lending Club, and Social Finance Inc. all spoke to a common theme – preparing for the coming storm and choosing loans for quality, not quantity. JPMorgan Chase has predicted a 60% chance of recession by 2020, and it’s not clear how traumatic an event it will be.
JPMorgan on Monday signed an agreement with Plaid, a technology company that connects bank accounts with fintech apps like Robinhood, Venmo, and Acorns, that will give its customers better control over their personal data.
Plaid will access JPMorgan’s customer data through a secure application programming interface or API, allowing customers to share their financial information more easily and safely. Banks including JPMorgan have pushed back against so-called screen scraping, another way for fintech apps to companies to access customer data that generally is viewed as less secure.
Goldman Sachs Group is shifting a heavily touted business line into its wealth management unit as the bank eyes expansion through products that can be pitched to the division’s customers.
The firm is handing oversight of the Marcus business — its retail-banking effort, which offers personal loans online — to its $1.5 trillion investment management division, according to a memo seen by Bloomberg. The move is aimed at starting new business offerings under the Marcus brand that can be sold to the unit’s expanding roster of clients.
A spokesman for Goldman Sachs confirmed the contents of the memo.
The number of U.S. households without a bank account fell to 6.5% in 2017, according to a federal government survey, as the improved economy helped bring mainstream banking services to more people.
The Federal Deposit Insurance Corp. said Tuesday the number of ”unbanked” households reached its lowest level last year since the regulator began the biennial survey in 2009. The share of households without an account at a federally insured financial institution was down half a percentage point from 7% in 2015.
Autonomous finance isn’t a well known term within fintech, but it may be the biggest innovation in the consumer finance space in recent years. Ken Lin, the CEO and Co-Founder of Credit Karma talked with us recently on the Lend Academy podcast about this concept of autonomous finance, a concept that is slowly turning into reality.
Credit Karma is in the unique position to capitalize on this idea, particularly when it comes to the lending business, which still relies heavily on credit scores. The company has built a platform in which users can track their credit score over time and get suggestions on products based on their financial life. From my perspective Credit Karma has a monopoly of sorts on this business with no other serious competitors at scale. Due to their sheer size and the engagement with their members, Credit Karma is a significant lead generator for the major online lenders that exist today.
A new credit score that includes a consumer’s cash flow alongside their credit score — dubbed UltraFICO — is winning praise for its potential to help expand access to credit but also stoking concerns about its data privacy implications.
FICO announced this week that it is testing a new credit score with Experian and data aggregator Finicity that draws on several months’ worth of data from consumers’ bank accounts. The idea, according to FICO, is to create a “second chance” score that could allow consumers who’ve been denied credit due to the traditional model another shot at obtaining it.
In recent years, startups from Silicon Valley and beyond have stepped up to offer payday alternatives through the workplace. Some, including Earnin and PayActiv, have put a new twist on the two-week pay cycle to give people access to their wages as soon as they’ve earned them. Others, such as HoneyBee, SalaryFinance and TrueConnect, allow employers to offer low-cost emergency loans as an employee benefit.
Paycheck advances in the modern workplace
What technology companies like Earnin and PayActiv say they offer is a streamlined approach for employees that retains the employer’s traditional two-week pay cycle.
Navient Corp. has been ramping up origination of refinance student loans even as rising interest rates reduce the potential savings for borrowers. Earnest, the online lender it acquired late in 2017, originated $903 million of refinance loans in the third quarter, bringing year-to-date originations $2 billion. But so far, the servicing giant’s ability to expand has been limited because of a non-compete agreement with the largest private student-lender, SLM Corp., better known as Sallie Mae.
Under the terms of their split in 2014, Navient is unable to refinance either private student loans made by Sallie Mae or any federally guaranteed student loans held by Sallie Mae.
The non-compete clause expires in January, and Navient CEO Jack Remondi doesn’t plan to waste any time. On a third quarter conference call Wednesday, Remondi made it clear that he sees plenty of potential to refinance loans made or held by Sallie Mae.
Kabbage is now lending over $10 million per day to small businesses, in congruence with the company’s recent addition of 30,000 customers in 2018. The company reported its first $500 million quarter this year, according to the press release.
The lender serves up to 1,400 businesses daily and has demonstrated a 68 percent increase of working capital accessed by Kabbage on mobile devices, as well as a 283 percent growth in use of the Kabbage Card since 2017.
“It was a great growth quarter for the company, and is a direct result of developing flexible and convenient solutions that simplify accessing capital for small businesses,” Kabbage CFO Scott Rosenberg told Benzinga.
If you’re building a real-estate investment business — or developing real-estate projects — check out the online crowdfunding opportunities on CrowdStreet.
4. FundThatFlip
If your business is remodeling and reselling homes, FundThatFlip offers a place to get quick cash to fix up and resell. Investors put in a minimum of $5,000.
Guaranteed Rate, an industry leader in technological innovation, tops the list of the Best Mortgage Lenders of 2018, according to U.S. News and World Report. The Chicago-based retail mortgage lender was named the Best Lender for Online Service with its groundbreaking advances to make the mortgage experience fast, simple and secure with its digital platform.
US News & World Report recommended the Guaranteed Rate mortgage process as best for borrowers who:
Want to complete most of the mortgage process online
Want help figuring out the right product for their situation
Americans spend a lot of money playing the lottery. Approximately 370 million lottery tickets were sold between Saturday and Tuesday before the Mega Millions drawing, according to a lottery official. The U.S. generated nearly $73 billion in lottery sales in 2016 and CNN reports that in 2017, U.S. residents spent about $73.5 billion on tickets. The average American spends about $223.04 per year on lottery tickets, loan marketplace LendEDU found in a report that calculated its average by dividing the 2016 lottery revenue by the U.S. population (325.7 million).
How much a person earns from the lottery depends on many factors, including the odds of the lottery and the number of tickets they bought. While a $2 lottery ticket could represent the chance for an instantaneous life of luxury, the chances of winning millions in a jackpot are pretty low. In fact, lottery officials in recent years changed the odds to lessen the chance of winning, leading to higher and higher jackpots like this Mega Millions.
LendingTree, the nation’s leading online loan marketplace, today released its study on the best cities to open a restaurant. The study found that while traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow. The restaurant population in cities like Milwaukee, Cincinnati and Minneapolis cities is less dense than in other areas, and labor costs are lower.
LendingTree analyzed the 50 largest U.S. cities to see which offer prospective restaurateurs the best shot at success. Many top spots are in once-overlooked Midwestern cities now experiencing urban renewal. The least promising cities have historically been the restaurant industry’s most competitive.
Today, Nav and Clover, a subsidiary of First Data, formally announced an integrated, multi-year partnership to deliver U.S.-based Clover users access to their free business credit scores, as well as custom-tailored business financing and credit card options.
The Federal Reserve Bank and other surveys consistently report around 70 percent of small business loan applicants are denied by their bank. As credit data is a primary way that banks and other financial institutions evaluate business loan applicants, the integration of business credit scores and insights directly into Clover’s dashboard enables these merchants to manage this important data.
Patients at facilities run by South Florida’s Memorial Healthcare System (MHS), one of the nation’s largest public healthcare systems, can now easily and quickly finance their out-of-pocket medical fees online, thanks to a new program powered by ezCarePoint, a next generation medical financing technology platform created by ezVerify, a Sunrise, Fla. based company and LendingPoint, a Kennesaw, Ga. based company.
RealtyFolio, the online real estate investing platform has updated its interface, including a redesign, rebrand, and upgraded features. The upgrade was meant to “make it even more comfortable for clients to navigate the platform and for clients to be able to invest in real estate projects, quickly and easily,” according to the company’s CEO, Jonathan Klein. He went on to say that they “expect a very big year in 2019, with many projects in the works, and a lot of demand from clients.”
RealtyFolio is ushering in the future of real estate investing by allowing you to build a real estate portfolio online. With over 30 years of real estate investing and management experience on its team and a vast network of strategic partners across the United States, in cities such as New York, Miami and Los Angeles, RealtyFolio gives everyone a chance to swim with the sharks.
After creating a profile and logging into the MHS website experience, patients for the first time will have at their fingertips the ability to understand the financial obligations associated with their medical care through a detailed statement and then apply for a loan to cover the portion of the cost that is their responsibility. Patients will be notified of approvals in a matter of seconds. Funds from the loan automatically pay the entire bill upfront, and the patient repays on the schedule supplied in the offer.
Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has moved to a new headquarters in the North Loop, doubling their space, and added seven new positions over the past three months to meet the growing demand.
With over 25 years of Leasing and Lending experience and an expert in InfoLease®, Tamarack hires on George Burke. Burke adds extensive experience to Tamarack’s back office software engineering team.
White Oak ABL, LLC, an affiliate of White Oak Global Advisors, LLC, announced the appointment of Clark D. Griffith to Managing Director, based in San Francisco. Griffith joins from Encina Business Credit where he held the position of Senior Managing Director in charge of West Coast originations, offering lines of credit and term loans from $5 million to $50 million.
PNC announced that in 2019 it plans to begin offering fully digital business lines of credit, up to$100,000.
PNC will partner withOnDeck and use its Platform-as-a-Service to simplify and accelerate the conventional lending originations processes for PNC Bank’s small and medium-sized business customers.
PNC will combine its expertise with ODX’s online origination technology and professional services to create PNC Small Business Lending.
TickPick, the no-fee ticket marketplace that is transforming the industry, announced today a partnership with Affirm, the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit. This new payment option makes TickPick the first and only secondary marketplace to offer Affirm, which allows customers the ability to spread out the cost of their purchase over time through simple monthly payments.
The UK’s leading tech clusters are competing head to head with European capitals, according to new analysis of company growth, in a sign that the success of the UK tech sector is pushing far beyond its London heartland.
Following the IPOs of Farfetch and Funding Circle, the UK is now home to 15 unicorns and six cities have produced so-called unicorns – $1bn tech companies – according to research prepared for Tech Nation and the Government’s Digital Economy Council by venture capital analytics company Dealroom.co. This latest research is published ahead of the Secretary of State for Digital, Culture, Media and Sport’s first meeting with the Digital Economy Council on 24 October 2018.
Looking at the creation of $1bn tech companies, Oxford and Cambridge combined have produced more fast-growing tech companies than both Paris and Berlin.
China Rapid Finance Limited’s (NYSE:XRF): China Rapid Finance Limited, through its subsidiaries, provides a consumer lending marketplace for lenders and borrowers in the People’s Republic of China. The US$156m market-cap posted a loss in its most recent financial year of -US$122m and a latest trailing-twelve-month loss of -US$49m shrinking the gap between loss and breakeven. As path to profitability is the topic on XRF’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for XRF.
Klarna is launching a new ‘Slice it in 4’ product, allowing users to split up payments. Michael Rouse, chief commercial officer of Klarna, explains how it works.
INDOCHINO shoppers can now Slice it at the checkout by using Klarna’s online consumer financing to easily spread the cost of their purchase over 6-36 months. Slice it has a simple 4-step credit application process, real-time decisioning and is offered within the merchant’s own website – no re-directs – for a frictionless and fast purchase experience.
By taking the premium made-to-measure experience direct to the consumer, INDOCHINO has created a superior alternative to off-the-rack clothing at ready-to-wear prices. Their immersive multi-channel experience enables customers to order their custom garments with ease online or in-person at one of 30+ showrooms across North America
Germany’s fintech darling N26 is potentially vulnerable to money laundering and terrorism financing, according to research by Handelsblatt’s sister magazine WirtschaftsWoche, which exposed a security gap at the online banking startup.
The apple of discord is how easily someone can open an account with a fake ID. A WirtschaftsWoche correspondent saw first hand how a man, Milo T., scanned a friend’s ID, added his own passport photo to the ID, printed it out and stuck it atop of a white plastic card that was the same size as the office ID card in his country. He cut the edges to make them round and voilà: a new identification card.
It took five minutes and the result is so blatantly a forgery that it would fail to convince even the laxest of nightclub doormen. None of the holograms or other security features found on original IDs can be seen on the fake. Regardless, Milo effortlessly used this ID to set up an N26 account, and this wasn’t a one-off occurrence. WirtschaftsWoche documented how several people opened N26 accounts using forged papers.
LATVIAN peer-to-peer payday lender Robo.cash has added a loan originator from Kazakhstan to its platform.
Z-FINANCE provides short-term private lending in Kazakhstan with an average loan size equivalent to €60 (£52).
Investors on the Robo.cash site can now invest in these loans, which have a repayment period up to 30 days and an expected interest rate up to 12 per cent per annum.
Z-FINANCE was launched in July this year and currently lends through a network of 102 sales branches in Kazakhstan.
ID Finance Group has reported 61 per cent revenue growth and revenues of $141.3 million for nine months of 2018 following strong growth in Europe and Latam. The data science, credit scoring and digital finance company issued $215.7m in loans in the first nine months of the year, a 64 per cent increase on the same period last year.
Its European and LatAm operations comprising Spain, Poland, Brazil and Mexico demonstrated exceptional growth experiencing a 197 per cent revenue growth and revenues of $32.6 million for the nine months of 2018. It issued $63.8 million in loans, a 142 per cent increase on the same period last year, and has also grown its customer base to over one million registered users with 20,000 new users joining weekly.The Group has now separated its European and LatAm operations from its CIS businesses (comprising Russia, Kazakhstan and Georgia) and it is functioning as a separate entity under the ID Finance name.
–Moven Enterprise, the smart-banking solutions division of Movencorp, Inc, today announced that it has expanded its footprint globally to help banks deepen their digital customer engagement and drive new revenue streams while significantly reducing attrition and acquisition costs.
After working successfully with TD Bank (TD) in Canada, Westpac in New Zealand, and others, Moven is now bringing its AI-driven digital banking platform to banks across LatAm, APAC, Africa, the Middle East and Europe. The global expansion is well-positioned as Moven Enterprise received investment from SBI Group to enhance Moven’s footprint in Asia earlier this year. This included the formation of a joint venture, SBI Moven Asia. The company’s innovative platform leverages a bank’s data and uses proprietary algorithms to create contextual, individualized smart-banking experiences for consumers; providing them the right advice at the right time with the right offer and helping them move towards a better financial lifestyle.
Private lending has picked up the pace in recent years. This is despite high-interest rates charged by private lenders. Many reasons have pushed lenders into this space including tightened requirements by banks.
In addition, banks tend to shy away from lending money to small businesses and startups. As a result, many borrowers look for other ways of funding, and such opportunities provide opportunities to private lenders.
However, starting out as a private lender is no easy walk in the park. Numerous risks lurk in the business, and you need to tread with caution. In this article, you’ll learn how to become a private lender and some of the pros and cons involved, so if you have an interest in becoming “a bank,” read on.
What makes an investment socially responsible? There are several criteria. For instance, SRI investing avoids tobacco companies as their products cause health problems and death. Typically, a company’s social responsibility rating is based on its performance in three categories: environmental, social and governance (ESG). Positive practices across one or more of these spheres can land a company in the socially responsible category.
At the same time, robo-advisors are digital investment managers designed to grow your wealth through investing with models are based on sophisticated computerized algorithms, including ESG consideration. These fintech darlings have answered the call for socially responsible robo-advisors with a host of diverse options. Of course, you could choose a socially responsible mutual fund or ETF on your own. But, for the busy investor, let one of the many robo-advisors take charge of your investing, in line with your personal values.
In today’s business community, partnership has become one of the most promising tools on the way to new amazing developments and interesting projects that are aimed at offering customers really unique experience and opening new opportunities for them.
News about recently established collaborations regularly appears here and there. This time the headlines are made by Uphold which is a major global digital money platform, that has conducted transactions worth over $4.0 billion across 184 countries, and Cred that is a crypto-backed lending provider with over $250 million in credit facilities.
Joint Projects
Having announced their partnership Uphold and Cred have revealed their plans to launch two cutting edge blockchain-based consumer finance products: Uphold Earn and Uphold Borrow. Both products are aimed at helping customers to earn interest from stablecoin holdings and borrow money against the cryptocurrencies they have.
After the Reserve Bank of India unveiled guidelines last October recognizing the need for peer-to-peer lending platforms as NBFC-P2P in the country, the regulatory authority had issued first license in May 2018 and since then 9 players have been recognized as NBFC-P2P companies. More than 12 companies are in the process of getting approval from the regulatory authority. Some of them are at advance to mid-level stage.
To represent the NBFC-P2P industry at various front as well as to represent country’s P2P lending industry at international forums, most of existing & new players have teamed-up and formed a registered body – Association of NBFC P2P Platforms.
The association has been registered under The Society Registration Act, 1860. Mr. Pramod Akhramka has been elected as President, Mr. Rajiv Ranjan as Secretary and Mr. Mukesh Bubna as Treasurer of the association.
Unexpected expenditures often come knocking on your door when you want them the least. The reasons could range from maintenance for your vehicle to your old washing machine that needs to be replaced. The plus point of such expenses cropping up during the festive season is that you can always get a good bargain online (or at the store nearby). The fact still remains that these are expenses nevertheless. And that too when your festive expenditure is already lined up, leaving no financial bandwidth.
At times like these, loans bring a sigh of relief. But with so many options available in the market, whom should you approach with your loan requirement- banks or digital lending platforms?
Today, Indian consumers are benefitting from a range of financial products and financial institutions (FI) such as banks, non-banking finance companies, online lending platforms, etc, available at their disposal. If you are planning to take a loan or feel like there’s a possibility of availing the same in the near future, you must primarily understand that every lender has its own unique pros and cons. Some are quick in terms of loan approval and disbursal, some are cost-effective, some offer greater flexibility to their customers, while some offer innovative products that are more relevant for an applicant.
News Comments Today’s main news: OnDeck to add PNC to ODX platform. FICO to add alternative data to credit score. PeerStreet named to CB Insights Fintech 250 list of fastest-growing fintech startups. Lendy asks for help. Pintec Technology shoots for $41M IPO. Today’s main analysis: Zelle sees record earnings, FREED 2018-2 and UPGR 2018-1 compared. Today’s thought-provoking articles: Funding […]
It was back in December of 2015 that we first learned about OnDeck’s partnership with JPMorgan Chase. This was the first significant partnership between a large American bank and an online lending platform and it caused a lot of excitement in the industry back then.
A couple of times this year we have heard OnDeck CEO Noah Breslow hint that a second major bank was coming on as a partner soon. Today, we learned who that partner will be: PNC Bank. They are the ninth largest bank in the country, so this gives OnDeck two of the top ten largest banks as clients.
I caught up with Noah and Brian Geary, who heads up OnDeck’s new ODX division (we covered the story of ODX just last week) to talk about this new deal.
Credit scores for decades have been based mostly on borrowers’ payment histories. That is about to change.
Fair Isaac Corp., creator of the widely used FICO credit score, plans to roll out a new scoring system in early 2019 that factors in how consumers manage the cash in their checking, savings and money-market accounts. It is among the biggest shifts for credit reporting and the FICO scoring system, the bedrock of most consumer-lending decisions in the U.S. since the 1990s.
PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that it has been named to the second annual CB Insights Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology. This comes on the eve of PeerStreet’s third anniversary of opening to the public. PeerStreet opened to all accredited investors on October 30th, 2016 at Money 20/20, an annual conference which is happening this week in Las Vegas. Both PeerStreet founders Brew Johnson and Brett Crosby are in attendance.
PeerStreet is being recognized as a leader in real estate investing for the platform’s innovative approach to making real estate debt an accessible asset class for retail investors. The loans offered for investment are vetted by private lenders who know their communities well, and then again by PeerStreet’s own team using big data and market research.
Bank of America – Record Earnings and Results for Zelle
BofA’s earnings were boosted by the highest Net Interest Income since 2011 delivered by its Lending business.
BofA also saw P2P payments rise on its Zelle platform increase 138%. Venmo, over the last year, has been on the defense due to increased consumer fees and leadership changes. SnapChat’s payment service was discontinued. Tech firms such as Google, Facebook, Tencent, and Ant Financial continue to test payments in overseas markets like India (where it is easier for FinTechs to utilize payments rails).
MS remains laser-focused on growing asset management and lending (secured and warehouse lending) and delivered the best stock price performance post earnings. The stock gained 5.7% post-earnings.
Source: Bank Earnings, PeerIQ
Freedom (FREED 2018-2) vs Upgrade (UPGR 2018-1)
Below we compare these deals on their collateral composition, bond characteristics and triggers. We note that each lender has substantially different lending programs, credit risk profiles, and history – and that shows in terms of deal structure and execution.
Collateral Composition
FREED 2018-2’s collateral pool consists of 2 types of loans – 45.5% Freedom Plus (F+) and 54.5% Consolidation Plus (C+).
F+ Loans: F+ loans are unsecured consumer loans to near prime and prime borrowers. F+ collateral has a WA age of 3 months and WA remaining term of 46 months. The WA current FICO score of the pool is 713 and the WA interest rate is 16.2%.
C+ Loans: C+ loans are offered to select qualified debt settlement clients as an option to shorten the duration of their debt settlement program by making funds available immediately to fund settlements reached by Freedom Debt Relief. C+ collateral has a WA age of 8 months and WA remaining term of 45 months. The WA current FICO score of the pool is 562 and the WA interest rate is 22.9%.
UPGR 2018-1’s collateral pool consists of unsecured consumer loans. The collateral has a WA age of 2 months and WA remaining term of 41 months. The WA current FICO score of the pool is 691 and the WA interest rate is 15.9%.
Freedom’s C+ loans have the highest weighted average coupons and original loan terms among all the pools, and Freedom’s F+ borrowers have the highest weighted average credit scores. The higher weighted average coupon on C+ loans helps the deal generate significant excess spread.
Source: Ratings Agencies, PeerIQSource: Ratings agencies and Peer IQ
A partnership between AI-powered identity risk scoring innovator Socure and workflow management specialist Alloy has enabled Radius Bank to decrease online fraud by 50%, increase new account conversions by 30%, and make manual review nearly a process of the past – reducing it by 95%.
The joint solution marries Socure’s predictive analytics with Alloy’s decisioning engine, and adds a variety of on- and offline data sources, predictive fraud tools, and a flexible rules engine to enable real-time decisioning and onboarding for new account openings.
Plaid, a fintech company whose software is used by Silicon Valley heavyweights like Betterment, Coinbase, and Robinhood, is holding talks with potential investors about raising money that could value the firm at more than $2 billion, according to people familiar with the matter.
The fundraise is still in the early stages, the people said, and a formal deal with investors has yet to be finalized.
Today at Money20/20 in Las Vegas, Klarna, a leading global payments provider, introduced their Slice it in 4 payment option, which allows consumers to pay for purchases in installments using their own debit or credit card. In conjunction with the launch, Klarna has signed its first U.S. merchant, Rancourt & Co., premium leather shoe crafters, to use the offering.
In today’s market, 67% of U.S. millenials do not own a credit card. With Klarna’s Slice it in 4, shoppers can increase their purchasing power without the hassle of a credit agreement or long-term commitment. Four equal payments are automatically collected from the consumer’s chosen method of payment – one installment at purchase and three further payments every two weeks. The plan features no upfront costs or interest and is offered online within the merchant’s existing checkout – ensuring the purchase journey is frictionless with no redirects to other sites.
Today, LexisNexis Risk Solutions, a part of RELX Group (NYSE: RELX), released its 2018 True Cost of Fraud study on lending. The 2018 study, which surveyed 186 risk and fraud executives at various lending institutions, including mortgage companies, auto lenders, non-bank personal loan issuers, non-bank credit card issuers and finance companies, highlights the continued rise of fraud costs for U.S. lenders. According to the LexisNexis Fraud Multiplier℠, for every dollar of fraud, lenders incur $3.05 in costs, compared to $2.82 in 2017, an 8.1 percent increase. Larger digital lenders, with at least $50 million in annual revenue, are hit hardest by fraud, incurring $3.37 in costs, which is up from $3.07 in 2017.
Other key findings from the study include:
54 percent of risk and fraud executives at large digital lenders state that verification of customer identity is their largest challenge. This is especially true of verification through the online channel.
Lending firms that use a multi-layered solution approach experience a lower cost of fraud. Those who layer core + advanced identity authentication + advanced transaction / identity verification solutions have lower fraud costs than others, per fraud event ($2.63 for every $1 of fraud versus up to $3.47) and as a percent of annual revenues. They also tend to have a lower volume of false positives.
Large digital lenders with international transactions attribute nearly 40 percent of their fraud losses to their non-domestic business. Fraud that originates in Asia represents 57 percent of the total international fraud expenses for these lenders.
Large digital lenders are more likely to represent “best-in-class” thinking about the adoption of fraud mitigation solutions, as they face attacks that are more significant.
It’s easy to see why entrepreneurs are bonding with alternative lenders. What’s not so easy to see is why they’re leaving bankers out of the loop. However, with renewed trust in each other, both institutions are finding mutual benefits. What’s more — the B and B called “Business and Bankers” is finding a renewed comeback.
Say you’re a small business owner feeling the squeeze. You could turn to a traditional bank that requires loan applicants to go through a rigorous review process for a 20 percent chance of approval. Or you could apply online with a peer-to-peer firm that approves more than 60 percent of applications and receive a decision in minutes.
MoneyLion, the innovative financial platform offering consumers a better way to borrow, save, earn and invest, today officially launched America’s most powerful and rewarding financial membership to help people take control of their finances and achieve their dreams.
In support of the most powerful financial membership, MoneyLion will be launching the Financial Heartbeat as well as a comprehensive suite of premium banking products to help everyday Americans better understand and engage with their finances.
As of 2018, outstanding student loan debt in the U.S. surpassed $1.48 trillion, almost one-and-a-half times what Americans owe on credit cards.
According to a MagnifyMoney analysis of Federal Reserve data, all this debt is hampering millennials’ chances for long-term financial success.
In fact, this study revealed that the average net worth of a millennial with student loans is only 25% of the net worth for a fellow millennial without them. What’s more, the data suggest student loan debt is preventing some millennials from saving for retirement or buying homes.
Key facts
Millennial households with student loan debt have…
An average net worth of $29,087, compared with $114,376 for student loan-free households.
46% less in their savings and checking accounts (median balance of $5,500 vs $10,180 for those without student loans).
$21,160 in retirement savings versus an average of $39,905 for those with no student loan debt.
HSBC is getting back into US consumer lending almost a decade after it was forced to write off $10.6bn for its last foray into that market.
The UK banking giant said on Monday that it is launching a digital lending platform for US customers in the first half of 2019. The platform will be powered by online lender Avant, which has already processed almost $5bn of loans for more than 600,000 customers.
OppLoans CEO Jared Kaplan likes to stress that a company can’t responsibly serve its customers without creating an inclusive atmosphere for its employees first.
That’s why OppLoans promotes from within and supports career development with ongoing education initiatives. We spoke with Kaplan and two other leaders at the company to learn more about what they do to ensure their team feels truly valued.
How would you describe your leadership style?
My leadership style follows a few key principles: rule by motivation, not fear; drive a high-performing culture and reward the top performers; and enable ultimate transparency. If employees are excited to come to work, see clear development paths when they perform and understand the good and bad of the business, I’ve created a great place to work.
We also ensure a workplace where everyone is encouraged to speak their minds when they see opportunities to improve the business.
Hundy Launches Mobile App Turning High Cost Payday Loans Into Low Cost Friends & Family Loans (Hundy Email) Rated: A
Hundy, a peer-to-peer micro-lender that empowers the creditworthy to benefit from their good character, announced today at Money 20/20 that it has released the latest update to its lending platform enabling friend-to-friend lending for a low 1% fee. Now, even borrowers who don’t pass a credit check, will be able to request a loan from a friend or family member utilizing all the tools of the platform including signed loan documents, SMS and email reminders, and automated payment scheduling. Hundy was designed to foster community around a marketplace of borrowers and lenders whose participants benefit from transparent terms, wide availability and low prices.
Investing in real estate has been around for centuries but it is only in the past few years that it has become possible to do this remotely and at scale. While institutional investors have had lots of options individual investors have been limited, for the most part, to buying homes in their local area.
Our next guest on the Lend Academy Podcast is Gary Beasley, the CEO and co-founder of Roofstock. Gary and his team have created the first online platform for investing in single family homes across the US. They help investors select the homes, obtain financing as well as find tenants and property managers.
The OCC is still moving forward with plans to grant Special Purpose National Bank charters to qualifying non-depository financial technology firms, notwithstanding a lawsuit challenging the move from New York state regulators and the threat of additional litigation. In response to a question following her speech at the October 9 Online Lending Policy Institute conference, Grovetta Gardineer, OCC’s senior deputy comptroller for compliance and community affairs, said the OCC will accept applications from fintech companies seeking the SPNB charter and intends to grant charters to applicants meeting the criteria. As reported in the October 8 edition of Bank Regulatory News and Trends, the New York State Department of Financial Services filed suit against the OCC, challenging the federal agency’s authority to grant the charters. The Conference of State Bank Supervisors also signaled its intention to file suit against OCC over the charters.
Princeton Alternative Income Fund’s (PAIF) latest attempt to resolve its bankruptcy dispute by appointing an independent restructuring officer was rejected by Ranger Direct Lending (RDL.L)(RDLZ:LN) last week.
The fund proposed hiring respected former United States Bankruptcy Judge Donald H. Steckroth as an independent officer to oversee the fund’s restructuring to protect all its investors. The executives at Ranger had demanded the appointment of an independent officer earlier in the bankruptcy process only to reject it this week.
CrowdOut Capital LLC, a pioneer in non-bank private lending for growing middle market companies, today announced two new additions to its management team, Christina Gustavson and Darlene Esquivel.
Gustavson will be CrowdOut’s first controller. She brings a strong accounting background having worked as a senior accountant at C3 Entertainment and at RGM Advisors, an Austin-based quantitative trading firm. A licensed CPA, Gustavson earned a Bachelor of Science in Accounting from Texas State University.
Funding Circle Holdings plc (“Funding Circle” or the “Company”), the leading small and medium enterprise (“SME”) loans platform in the UK, US, Germany and the Netherlands, today announces updates to its statistics pages for the three months ending 30 September 2018 (the “Quarter”) and selected highlights from the quarter.
The data by country included in this announcement is also available on the Company’s website at corporate.fundingcircle.com/investors/loan-performance-statistics.
A British peer-to-peer property lender has taken the unusual step of appealing to its regulator for help after one of its biggest borrowers threatened to sue the company and many of its investors.
Retail investors in Lendy are already facing tens of millions of pounds in potential losses after almost two-thirds of borrowers failed to repay their loans on time, according to a Financial Times analysis of its loanbook.
The developments threaten to trigger the first big crisis in Europe’s rapidly expanding peer-to-peer industry, at a time when the sector is fighting to convince regulators it does not need stricter regulation.
P2P lending is becoming a significant alternative source of financing for SMEs in the UK. According to Entrenching Innovation – The 4th UK alternative Finance Industry Report, published in December 2017, P2P business lending grew from £21m in 2011 to £1.23bn in 2016, generating £3.14bn over the six years. The report noted that the annual growth rate in volume from 2015 to 2016 was 40%.
The report cited data from the British Banking Association that revealed P2P business lending equated to 15% of new small businesses loans. More than a fifth of borrowers had a turnover of less than £500,000 and 23% were in the £500,000 to £1m turnover bracket. It also found that lenders were biased towards localised funding. This diversity of lending across the UK suggested that P2P business lending could become “a suitable solution to systemic geographic biases that exist in traditional and bank SME lending”.
London has cemented its standing as the capital of Europe’s billion-dollar technology startups, as surrounding cities help to push the UK forward while its companies expand internationally.
New figures released today show the UK has now created 60 so-called unicorn startups – companies with a valuation of $1bn (£769.6m) or more – since 1990, according to research prepared for Tech Nation and the government’s Digital Economy Council by Dealroom.
London houses 36 of those UK startups, representing more than a fifth of all unicorns in Europe at a total valuation of $132bn. In comparison, Berlin holds the second biggest city spot with just eight unicorn startups, worth $32bn.
Landbay has chosen Oracle NetSuite to create a more accessible buy-to-let mortgage marketplace for investors, borrowers and brokers.
Through NetSuite, Landbay will be able to process loan applications ten times faster than other lenders and enable its staff to make swifter decisions around mortgage applications and investor sign ups.
Founded in 2014, Landbay offers individual investors direct access to the lucrative mortgage lending market and offers landlords competitively priced buy-to-let mortgages, with plans to lend £1 billion to UK landlords by 2020.
OakNorth Holdings Ltd today announces the launch of a new corporate brand identity, logo and website. Its fintech platform, ACORN machine, will now be known as OakNorth Analytical Intelligence (ON AI) and we have a new domain (www.oaknorth.ai).
Rishi Khosla, co-founder of OakNorth Holdings said: “Since our founding, our mission has been to enable small and medium-sized businesses obtain the debt finance they need to grow. Our fintech platform, which we developed to address this problem, is being used by a number of leading banks globally, and by us in the UK.”
Pintec Technology Holdings (PT) intends to raise $41 million in an IPO from the sale of ADSs representing underlying Class A shares, according to an amended registration statement.
The company provides a range of point-of-sale and related financial services and solutions to retailers and their customers.
PT appears to be transitioning its business to more diversified revenue streams, and it faces significant regulatory uncertainties and potentially harmful trade war effects that may not be transitory.
A Ministry of Business, Innovation & Employment assessment that introducing a comprehensive creditor licensing regime as part of the Government’s crackdown on loan sharks would be worse than the status quo doesn’t appear to be based on much evidence.
The recent announcement from Commerce and Consumer Affairs Minister Kris Faafoi included plans to introduce a “fit and proper person” test for lenders.
This means the fit and proper person test was chosen over two other options floated in June’s Ministry of Business, Innovation & Employment (MBIE) discussion paper aimed at increasing lender registration requirements. The other two options were expanded powers to deregister lenders and ban directors from future involvement in the credit industry, and introducing a comprehensive creditor licensing system.
The Financial Services Authority (OJK) said the non-performing loans (NPL) rate among financial technology (fintech) firms that use peer-to-peer lending (P2P) hovered around 1 percent monthly, safely below the 2 percent maximal set by the OJK.
“The NPL rate can go as low as 0.9, then rise as high as 1.3 then go down again,” said OJK fintech licensing and supervision director Hendrikus Passagi on Sunday as reported by kompas.com.
Wealth management startup Cube Wealth announced on Monday that it has raised Rs 14 crore (about $2 million) in equity funding from Singapore-based venture fund Beenext, Japan-based Asuka Holding and 500 Startups.
The company said that it will use these funds for additional asset partners, and to develop a network of premium sales and marketing partners across different countries including Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Chennai, Kolkata and Pune.
Cube Wealth also plans to expand its presence across Europe and Japan, as it is looking to target non-resident Indians from these markets.
If you need a loan for a medical emergency like a surgery, it might help to turn to your peers rather than institution rather than institutions. Peer-to-peer (P2P) lending platforms say they have seen lenders willing to offer interest rates between 8% and 12% for medical emergencies on their platforms. On the contrary, if you try to raise funds as a personal loan from banks, the interest rate is likely to be between 13% and 17%. P2P technology platforms bring borrowers and lenders together, and most offer a variety of of loans, including personal loans, vehicle loans, education loans and — in some cases — even home loans. Most lenders tend to be individuals too.
P2P players like Faircent, LenDenClub, i2iFunding and LoanTap say they also process medical loans faster.
While alternative lending is currently gaining traction among borrowers, it’s also becoming a formidable asset class in its own right, with the U.S. market now accounting for an estimated $50 billion of annual origination.
Born out of peer-to-peer lending, online alternative lending has gone mainstream, presenting new opportunities for small businesses, consumers and investors.
According to Morgan Stanley Investment Management’s study, what began as “peer-to-peer” marketplaces bringing together borrowers and lenders has evolved considerably in recent years.
Alternative-lending platforms now span many categories, including unsecured consumer, small-business and other forms of specialty financing, it said.
Prospa, a mobile savings wallet for low-income earners, and Nisa Finance, an invoice financing platform, are among the eight local fintech start-ups awarded a total of R16 million in funding by AlphaCode.
AlphaCode is an incubation, acceleration and investment vehicle for early-stage financial services businesses, powered by Rand Merchant Investment (RMI).
The AlphaCode Incubate initiative, in partnership with Merrill Lynch SA and Royal Bafokeng Holdings, identifies South African financial services entrepreneurs with extraordinary ideas and businesses that could impact the financial services industry.
More than 200 start-ups applied to participate; of these, 16 made it to the final pitch evening and eight recipients were selected.
News Comments Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise. Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks. […]
SoFi partners withWeWork on student debt. AT: “This initiative is targeted toward WeWork’s employees and members, moving beyond an organization’s payroll to gain access to its wider network. With thousands of organizations all across America, and of course, overseas, SoFi could have hit upon a winning expansion strategy.”
How Noto found room at SoFi. AT: “I don’t think the interesting part here is Noto’s aspirations for chief executive status. Rather, the interesting thing is the Square-Twitter-SoFi competition triad. Noto, caught in the middle of that, had to choose sides. He likely chose the winning side.”
Online lending platform SoFi announced on Monday that it has joined forces with WeWork to help WeWork’s more than 3,000 employees and over 175,000 members take on their student loan debt. The lender revealed that this is its first SoFi At Work partnership to extend beyond a company’s employees to include customer base.
Twitter’s (TWTR) outgoing COO (chief operating officer), Anthony Noto, quietly worked out his exit from the company. When the Wall Street Journal broke the story that he was considering taking up the job of CEO (chief executive officer) at SoFi, both Twitter and SoFi were tight-lipped at the time.
But only a few days later, Twitter confirmed that Noto was departing, and SoFi confirmedthat Noto was joining its team. Who made room for Noto at SoFi, and what might follow after he leaves Twitter?
Given SoFi’s ambitions and the ambitions of Square (SQ), the company run by Twitter CEO Jack Dorsey, Noto and Dorsey appear to be on a competition course. SoFi and Square both have ambitions of becoming full-service banks. And Noto, a former Goldman Sachs (GS) banker, has made it clear that this is a course he would like to pursue once he joins SoFi.
Square, which supplied $303 million in loans to customers in 3Q17 and has supplied over $1.8 billion in loans overall, already faces competitive pressures from Amazon.com (AMZN) and PayPal (PYPL) in the alternative lending market.
Marlette Funding, LLC, the parent company of Best Egg, announced today it closed its fifth proprietary “MFT” securitization. Approximately $495 million of Best Egg loans were financed via $464.3 million of MFT 2018-1 Notes with four classes and one class of Certificates, with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.
This is the first securitization of 2018 bringing the total program issuance to date to $1.7B, with capital provided by a broad set of investors. The transaction was significantly oversubscribed, upsized and successfully priced, reflecting Marlette’s differentiated product offering and superior credit performance. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Citi, Deutsche Bank and Morgan Stanley. The Class A, B, C and D fixed-rate Notes were rated AA (sf), A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).
Year over year, Best Egg has demonstrated impressive scalability – 66% year-over-year growth in originations with only 9% growth in year-over-year fixed operating expenses and 29% reduction in marketing cost per loan.
If free checking accounts aren’t already a thing of the past, perhaps they should be, now that consumers are demonstrating that if something is valuable to them, they’ll pay for it.
About 77 percent of people have a “free checking account” at their bank, according to a studyfrom Cornerstone Advisors’ Ron Shevlin published last week. But nearly every free checking account holder paid at least one fee in the 12 months leading up to the survey. Out of 1,555 surveyed, 26 percent paid a third-party bank ATM fee and 25 percent paid an overdraft fee. They also paid fees to replace lost or misplaced ATM and debit cards, rush fees for those replacements, non-sufficient funds fees, wire transfer fees, international transaction fees, fees for overdraft protection and “extended overdrawn balances,” for stop payments and for statement copies, check copies and check image services.
But banks have been reporting flat fee income for the past six quarters. Service charges on deposit accounts have hardly moved in several years and banks are changing their overdraft programs to improve customer relationships, which eats into that fee income.
Bank of America has one of the most competitive mobile and digital banking offerings and no longer needs to give people an incentive to bank digitally instead of at branches (those were the terms of the account; those who wanted branch banking and paper statements paid an $8.95 monthly fee that was waived for customers who agreed to do all their banking digitally).
Almost 60 percent of people indicated they would consider switching accounts if their primary financial institution offered a hypothetical Amazon-like bundled checking account — which would include basic checking account services plus cell phone damage protection, ID theft protection, roadside assistance, travel insurance and product discounts — for a $5 to $10 monthly fee, Shevlin found.
The expanded product will provide large businesses with greater purchasing power for longer-term investments, and is the largest credit line available from any online lender yet.
A recent survey of 800 small businesses conducted by the platform showed that more than 73 per cent of businesses expect to increase their revenue by more than 20 per cent in 2018.
Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Brian Biglin as Chief Credit Officer, effective immediately. Elevate also said it has granted inducement stock awards as part of Mr. Biglin’s employment.
He served as Chief Credit Officer at Bill Me Later when it was acquired in 2008 by PayPal, and he continued until 2014 as Chief Credit Officer at PayPal, where he helped grow the portfolio from $400 million to $6 billion and managed credit through the Great Recession. Mr. Biglin subsequently was Chief Risk Officer at loanDepot.com and at Intuit. At loanDepot he built a new consumer lending platform and helped create the first personal loan securitizations for the company; at Intuit he reduced fraud losses, improved customer experience, overhauled operations and increased efficiencies.
The Consumer Financial Protection Bureau’s (CFPB) first enforcement action against an online lender has ended with a judicial rebuke nearly as stunning as its case against the Accrediting Council for Independent Colleges and Schools.
Although a California district court ruled in favor of the CFPB in the case, it declined to confirm the CFPB’s request for restitution from the lender defendants, instead cutting the penalty award to a Tier One violation of the Consumer Financial Protection Act.
Only a small handful of companies currently offer mortgages through this method. One of most well-established, SoFi, offers mortgages in 29 states and the District of Columbia through its peer-to-peer lending platform, which is a type of crowdsourcing where individual investors contribute through a lending platform, and in return earn interest on their investment, paid for by the borrower.
Feather the Nest offers a crowdfunding registry, where friends and family can donate toward your real estate goals. Every donation to your registry is charged a percentage of the amount given as a transaction fee.
Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:
• Easy to sign up and started
• Five to Seven percent returns
• Starting investment can be as small as $1,000
The Committee Memorandum states that the hearing “will examine the current regulatory landscape [for fintech], the need to amend or modernize the regulatory landscape or the necessity to amend existing financial laws or develop new legislative proposals that would allow financial services entities to use fintech to deliver new products and services to consumers.”
Identity Assurance as a Service (IDAaaS) innovator Signicat has won phase two funding from Horizon 2020, the EU framework program for research and innovation. The $2 million grant (€1.6 million) will enable Signicat to continue development of its IDAaaS toolbox for use in Europe, and takes the company’s total funding to $3.9 million.
The annual Alternative Finance & Crowdfunding Barometer compiled by KPMG for the French Crowdfunding Association (Financement Participatif France, FPF) shows that in 2017 the French Alternative Finance market grew by 50%, driven by SME lending growth, and came close to the billion euro mark, at €940 million. Crowdfunding, as a subcategory of alternative finance open to retail investors, grew slightly slower at 44%, and equity crowdfunding shrank.
Institutional SME lending grew by 157% to €215 million,
SME crowdlending and crowdinvesting in SME debt grew by 102% to €195 million.
The market is heavily concentrated, with the top 5 platforms, Lendix, Credit.fr, Lendosphère, Unilend and Lendopolis accounting for more than 80% of the loans originated. Credit.fr, which was recently acquired by investment firm Tikehau Capital is growing fastest. Funded for more than 80% by non-retail money, Lendix captures more than half of the market. Most recently, the platform raised €120 million of a new €200 million investment fund designed to finance SME loans from 2018 on.
Source: Crowdfund Insider
Consumer Lending Decelerates
Alternative consumer lending grew only by 17%, from €197 million to €231 million, three times more slowly than in the previous year. The market is dominated by Younited Credit which originated €227 million worth of consumer loans in France, Italy and Spain in 2017. Younited’s growth remained high in terms of number of loans (nearly +50%) but the growth in euros was slower because the company introduced smaller €1,000 to €3,000 loans and stopped promotional campaigns that were waving fees on large loans.
Source: Crowdfund Insider
Equity Crowdfunding Shrinks
French equity crowdfunding raised a mere €58 million, 15% less than in the past year.
Last year, venture investment in European fintech companies more than doubled YoY to €2.8 billion, even though the deal count remained almost flat, per the PitchBook Platform.
The jump in money invested was boosted by some monster deals, including rounds of well over $200 million each into foreign exchange unicorn TransferWise and student loans startup Prodigy Finance.
Two–thirds of consumers between the ages of 18 and 29 have a mobile phone and use mobile banking.
FinTech improves the lending process by reducing the cost of underwriting through automation of the credit application process. That process includes the review of the credit application, credit score monitoring, and the collection of financial documents.
Credit standards and trading limits are monitored more efficiently as Fintech applications can be created that employ customized credit standards per the bank’s risk-management policies
Just as FinTech helps institutions manage their internal credit and trading standards, RegTech enhances their ability to adhere to the government’s regulatory rules set out by various agencies and The Federal Reserve Bank.
Fewer fines and litigation costs are possible with RegTech applications.
Adapting to new regulations faster can be achieved with RegTech as financial institutions can monitor changes in regulations in real-time.
The Economic Survey 2017-18 tabled in the Parliament on Monday delivered an unsurprising, but troubling figure. The amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was pocketed by large enterprises. For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.
RBI data show that NBFCs have increased their lending to the SME sector by giving out about Rs 680 crore to the micro, small and medium enterprises compared to Rs. 480 crore in 2016. These figures do not include the loans extended to SMEs by the P2P industry, which has been recently classified as an NBFC.
In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.
While the Narendra Modi government and the Reserve Bank of India (RBI) have already laid down regulations for certain segments, such as peer-to-peer lending, others like cryptocurrencies and online lending startups are yet to be regulated. Such regulation may mean stricter compliance, but the management at these firms believe it will lend legitimacy to the industry, which is expected to be worth $2.4 billion by 2020. That, in turn, will help them grow faster.
Wimboh Santoso, head of Indonesia’s financial regulator (OJK), said while the trend was still a drop in the ocean of overall lending, more than 250,000 people had taken out loans through fintech. Around 30 P2P firms had extended 2.6 trillion rupiah ($193.8 million) in lending as of January 2018, compared with just 247 billion rupiah of lending in December 2016. Another 36 more firms were waiting to be approved, he added.
Bank loan penetration in Indonesia, where only one in three adults have bank accounts, was around 34 percent of GDP in 2015, among the lowest of Asia Pacific countries. Loan growth has also fallen below 10 percent since the start of 2016, compared with more than 20 percent during the commodity boom years before that.
Speaking on the topic ‘Developing and sustaining unique digital finance solutions for Africa and infrastructure implications’, the Chief Executive Officer, Systemspecs Remita, Mr. John Obaro, said going into the future, there would be more collaboration between FinTechs and other organisations in the financial services sector.
“The problem we want to solve is that we want people in the different nooks and crannies of this country to easily join the financial industry. Banks, by their nature, have been able to accomplish this for us. As of the last count, there were 160 million phones in the country. People want to make payment irrespective of whether banks, telcos or fintechs are behind the initiative,” he added.
In order to replicate the success of M-pesa, a mobile payment system in Kenya, in Nigeria, the CEO, Soft Alliance and Resources Limited, Mr. Tunde Badejo, urged stakeholders to channel their efforts into advocacy and improve the level of awareness of mobile payments systems available in the country.
News Comments Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise. Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks. […]
SoFi partners withWeWork on student debt. AT: “This initiative is targeted toward WeWork’s employees and members, moving beyond an organization’s payroll to gain access to its wider network. With thousands of organizations all across America, and of course, overseas, SoFi could have hit upon a winning expansion strategy.”
How Noto found room at SoFi. AT: “I don’t think the interesting part here is Noto’s aspirations for chief executive status. Rather, the interesting thing is the Square-Twitter-SoFi competition triad. Noto, caught in the middle of that, had to choose sides. He likely chose the winning side.”
Online lending platform SoFi announced on Monday that it has joined forces with WeWork to help WeWork’s more than 3,000 employees and over 175,000 members take on their student loan debt. The lender revealed that this is its first SoFi At Work partnership to extend beyond a company’s employees to include customer base.
Twitter’s (TWTR) outgoing COO (chief operating officer), Anthony Noto, quietly worked out his exit from the company. When the Wall Street Journal broke the story that he was considering taking up the job of CEO (chief executive officer) at SoFi, both Twitter and SoFi were tight-lipped at the time.
But only a few days later, Twitter confirmed that Noto was departing, and SoFi confirmedthat Noto was joining its team. Who made room for Noto at SoFi, and what might follow after he leaves Twitter?
Given SoFi’s ambitions and the ambitions of Square (SQ), the company run by Twitter CEO Jack Dorsey, Noto and Dorsey appear to be on a competition course. SoFi and Square both have ambitions of becoming full-service banks. And Noto, a former Goldman Sachs (GS) banker, has made it clear that this is a course he would like to pursue once he joins SoFi.
Square, which supplied $303 million in loans to customers in 3Q17 and has supplied over $1.8 billion in loans overall, already faces competitive pressures from Amazon.com (AMZN) and PayPal (PYPL) in the alternative lending market.
Marlette Funding, LLC, the parent company of Best Egg, announced today it closed its fifth proprietary “MFT” securitization. Approximately $495 million of Best Egg loans were financed via $464.3 million of MFT 2018-1 Notes with four classes and one class of Certificates, with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.
This is the first securitization of 2018 bringing the total program issuance to date to $1.7B, with capital provided by a broad set of investors. The transaction was significantly oversubscribed, upsized and successfully priced, reflecting Marlette’s differentiated product offering and superior credit performance. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Citi, Deutsche Bank and Morgan Stanley. The Class A, B, C and D fixed-rate Notes were rated AA (sf), A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).
Year over year, Best Egg has demonstrated impressive scalability – 66% year-over-year growth in originations with only 9% growth in year-over-year fixed operating expenses and 29% reduction in marketing cost per loan.
If free checking accounts aren’t already a thing of the past, perhaps they should be, now that consumers are demonstrating that if something is valuable to them, they’ll pay for it.
About 77 percent of people have a “free checking account” at their bank, according to a studyfrom Cornerstone Advisors’ Ron Shevlin published last week. But nearly every free checking account holder paid at least one fee in the 12 months leading up to the survey. Out of 1,555 surveyed, 26 percent paid a third-party bank ATM fee and 25 percent paid an overdraft fee. They also paid fees to replace lost or misplaced ATM and debit cards, rush fees for those replacements, non-sufficient funds fees, wire transfer fees, international transaction fees, fees for overdraft protection and “extended overdrawn balances,” for stop payments and for statement copies, check copies and check image services.
But banks have been reporting flat fee income for the past six quarters. Service charges on deposit accounts have hardly moved in several years and banks are changing their overdraft programs to improve customer relationships, which eats into that fee income.
Bank of America has one of the most competitive mobile and digital banking offerings and no longer needs to give people an incentive to bank digitally instead of at branches (those were the terms of the account; those who wanted branch banking and paper statements paid an $8.95 monthly fee that was waived for customers who agreed to do all their banking digitally).
Almost 60 percent of people indicated they would consider switching accounts if their primary financial institution offered a hypothetical Amazon-like bundled checking account — which would include basic checking account services plus cell phone damage protection, ID theft protection, roadside assistance, travel insurance and product discounts — for a $5 to $10 monthly fee, Shevlin found.
The expanded product will provide large businesses with greater purchasing power for longer-term investments, and is the largest credit line available from any online lender yet.
A recent survey of 800 small businesses conducted by the platform showed that more than 73 per cent of businesses expect to increase their revenue by more than 20 per cent in 2018.
Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Brian Biglin as Chief Credit Officer, effective immediately. Elevate also said it has granted inducement stock awards as part of Mr. Biglin’s employment.
He served as Chief Credit Officer at Bill Me Later when it was acquired in 2008 by PayPal, and he continued until 2014 as Chief Credit Officer at PayPal, where he helped grow the portfolio from $400 million to $6 billion and managed credit through the Great Recession. Mr. Biglin subsequently was Chief Risk Officer at loanDepot.com and at Intuit. At loanDepot he built a new consumer lending platform and helped create the first personal loan securitizations for the company; at Intuit he reduced fraud losses, improved customer experience, overhauled operations and increased efficiencies.
The Consumer Financial Protection Bureau’s (CFPB) first enforcement action against an online lender has ended with a judicial rebuke nearly as stunning as its case against the Accrediting Council for Independent Colleges and Schools.
Although a California district court ruled in favor of the CFPB in the case, it declined to confirm the CFPB’s request for restitution from the lender defendants, instead cutting the penalty award to a Tier One violation of the Consumer Financial Protection Act.
Only a small handful of companies currently offer mortgages through this method. One of most well-established, SoFi, offers mortgages in 29 states and the District of Columbia through its peer-to-peer lending platform, which is a type of crowdsourcing where individual investors contribute through a lending platform, and in return earn interest on their investment, paid for by the borrower.
Feather the Nest offers a crowdfunding registry, where friends and family can donate toward your real estate goals. Every donation to your registry is charged a percentage of the amount given as a transaction fee.
Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:
• Easy to sign up and started
• Five to Seven percent returns
• Starting investment can be as small as $1,000
The Committee Memorandum states that the hearing “will examine the current regulatory landscape [for fintech], the need to amend or modernize the regulatory landscape or the necessity to amend existing financial laws or develop new legislative proposals that would allow financial services entities to use fintech to deliver new products and services to consumers.”
Identity Assurance as a Service (IDAaaS) innovator Signicat has won phase two funding from Horizon 2020, the EU framework program for research and innovation. The $2 million grant (€1.6 million) will enable Signicat to continue development of its IDAaaS toolbox for use in Europe, and takes the company’s total funding to $3.9 million.
The annual Alternative Finance & Crowdfunding Barometer compiled by KPMG for the French Crowdfunding Association (Financement Participatif France, FPF) shows that in 2017 the French Alternative Finance market grew by 50%, driven by SME lending growth, and came close to the billion euro mark, at €940 million. Crowdfunding, as a subcategory of alternative finance open to retail investors, grew slightly slower at 44%, and equity crowdfunding shrank.
Institutional SME lending grew by 157% to €215 million,
SME crowdlending and crowdinvesting in SME debt grew by 102% to €195 million.
The market is heavily concentrated, with the top 5 platforms, Lendix, Credit.fr, Lendosphère, Unilend and Lendopolis accounting for more than 80% of the loans originated. Credit.fr, which was recently acquired by investment firm Tikehau Capital is growing fastest. Funded for more than 80% by non-retail money, Lendix captures more than half of the market. Most recently, the platform raised €120 million of a new €200 million investment fund designed to finance SME loans from 2018 on.
Source: Crowdfund Insider
Consumer Lending Decelerates
Alternative consumer lending grew only by 17%, from €197 million to €231 million, three times more slowly than in the previous year. The market is dominated by Younited Credit which originated €227 million worth of consumer loans in France, Italy and Spain in 2017. Younited’s growth remained high in terms of number of loans (nearly +50%) but the growth in euros was slower because the company introduced smaller €1,000 to €3,000 loans and stopped promotional campaigns that were waving fees on large loans.
Source: Crowdfund Insider
Equity Crowdfunding Shrinks
French equity crowdfunding raised a mere €58 million, 15% less than in the past year.
Last year, venture investment in European fintech companies more than doubled YoY to €2.8 billion, even though the deal count remained almost flat, per the PitchBook Platform.
The jump in money invested was boosted by some monster deals, including rounds of well over $200 million each into foreign exchange unicorn TransferWise and student loans startup Prodigy Finance.
Two–thirds of consumers between the ages of 18 and 29 have a mobile phone and use mobile banking.
FinTech improves the lending process by reducing the cost of underwriting through automation of the credit application process. That process includes the review of the credit application, credit score monitoring, and the collection of financial documents.
Credit standards and trading limits are monitored more efficiently as Fintech applications can be created that employ customized credit standards per the bank’s risk-management policies
Just as FinTech helps institutions manage their internal credit and trading standards, RegTech enhances their ability to adhere to the government’s regulatory rules set out by various agencies and The Federal Reserve Bank.
Fewer fines and litigation costs are possible with RegTech applications.
Adapting to new regulations faster can be achieved with RegTech as financial institutions can monitor changes in regulations in real-time.
The Economic Survey 2017-18 tabled in the Parliament on Monday delivered an unsurprising, but troubling figure. The amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was pocketed by large enterprises. For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.
RBI data show that NBFCs have increased their lending to the SME sector by giving out about Rs 680 crore to the micro, small and medium enterprises compared to Rs. 480 crore in 2016. These figures do not include the loans extended to SMEs by the P2P industry, which has been recently classified as an NBFC.
In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.
While the Narendra Modi government and the Reserve Bank of India (RBI) have already laid down regulations for certain segments, such as peer-to-peer lending, others like cryptocurrencies and online lending startups are yet to be regulated. Such regulation may mean stricter compliance, but the management at these firms believe it will lend legitimacy to the industry, which is expected to be worth $2.4 billion by 2020. That, in turn, will help them grow faster.
Wimboh Santoso, head of Indonesia’s financial regulator (OJK), said while the trend was still a drop in the ocean of overall lending, more than 250,000 people had taken out loans through fintech. Around 30 P2P firms had extended 2.6 trillion rupiah ($193.8 million) in lending as of January 2018, compared with just 247 billion rupiah of lending in December 2016. Another 36 more firms were waiting to be approved, he added.
Bank loan penetration in Indonesia, where only one in three adults have bank accounts, was around 34 percent of GDP in 2015, among the lowest of Asia Pacific countries. Loan growth has also fallen below 10 percent since the start of 2016, compared with more than 20 percent during the commodity boom years before that.
Speaking on the topic ‘Developing and sustaining unique digital finance solutions for Africa and infrastructure implications’, the Chief Executive Officer, Systemspecs Remita, Mr. John Obaro, said going into the future, there would be more collaboration between FinTechs and other organisations in the financial services sector.
“The problem we want to solve is that we want people in the different nooks and crannies of this country to easily join the financial industry. Banks, by their nature, have been able to accomplish this for us. As of the last count, there were 160 million phones in the country. People want to make payment irrespective of whether banks, telcos or fintechs are behind the initiative,” he added.
In order to replicate the success of M-pesa, a mobile payment system in Kenya, in Nigeria, the CEO, Soft Alliance and Resources Limited, Mr. Tunde Badejo, urged stakeholders to channel their efforts into advocacy and improve the level of awareness of mobile payments systems available in the country.
Twenty-two years ago, when Jeff Bezos launched Amazon, no one ever thought the e-commerce startup would transform the retail industry landscape. In June, it made a statement-making purchase by buying Whole Foods for a staggering $13.7 billion. The company took advantage of technology, used an aggressive growth strategy, and disrupted the entire industry. It started […]
Twenty-two years ago, when Jeff Bezos launched Amazon, no one ever thought the e-commerce startup would transform the retail industry landscape. In June, it made a statement-making purchase by buying Whole Foods for a staggering $13.7 billion. The company took advantage of technology, used an aggressive growth strategy, and disrupted the entire industry. It started as an online seller of books and CDs in 1995 and now the “everything store” has sales of more than $400 billion.
Amazon’s Lending Business
The company is virtually omnipresent in all businesses, be it furniture, electronics, food or entertainment. In 2012, it added yet another service to its stable: Small business loans.
Considering Amazon enables millions of small companies to sell their products across the globe, having its own lending arm was a no-brainer. Amazon’s entry into small-business lending could transform the banking industry in the same way it revolutionized retail. Just recently, the Seattle-based e-commerce giant announced that it has made $1 billion in small-business loans to more than 20,000 merchants in the United States, Japan, and the UK during the past 12 months. Since Amazon Lending launched in 2011, it has surpassed $3 billion in loans to small businesses. Further, more than 50 percent of the companies eventually take a second loan from Amazon.
Launching its own lending arm is a stroke of genius by Amazon, the company will earn interest on the loans while retailers (with the aid of the loans) will be able to sell more products on the Amazon website and thus will add to Amazon’s earnings. Its big pockets and negative working capital mean it has lots of cash to lend; a mammoth retailer database means it is fairly easy for Amazon to tap into the lucrative space.
“We created Amazon Lending to make it simple for up-and-coming small businesses to efficiently get a business loan, because we know that an infusion of capital at the right moment can put a small business on the path to even greater success,” said Peeyush Nahar, vice president for Amazon Marketplace, in a company announcement.
How Does Amazon Lending Work?
Amazon’s loan program is by invitation only. It offers short-term business loans ranging from $1,000 to $750,000 for up to 12 months to micro, small, and medium businesses selling on Amazon to help them grow their businesses. Loans are approved within 24 hours and, usually, loan money is used for inventory financing and business expansion.
Unlike traditional lenders, which use lengthy loan applications and require a host of documents, Amazon uses internal algorithms to invite sellers to the program based on the popularity of their products, inventory cycles, and other factors. It does not charge an origination fee or prepayment penalties. Furthermore, after establishing its foothold in SME lending, the company plans to branch out into other markets where there are a lot more opportunities, such as Canada, India, France, and China.
To Be or Not To Be: A Bank
For now, the lending business is relatively a small part of its operations. But considering its vast resources and huge database, it will be interesting to see whether Amazon scales up its credit business and applies for a banking license.
According to a survey of 32,715 people in 18 countries conducted by Accenture, 31% of the respondents would switch to Google, Amazon, or Facebook for banking, if these companies offered financial services. In another report by CB Insights, Amazon has the highest customer satisfaction at 86% compared to Citi (82 percent), Capital One (80 percent), “all banks” (80 percent), TD Bank (79 percent) and Bank of America and Chase (each 75 percent). With more and more millennials opting against traditional banks, becoming a full-fledged financial institution does seem like a viable option. But will Amazon follow that path?
Regulatory Backdrop
Ever since marketplace lenders gained prominence in the financial circle, there has been a debate raging on whether or not to grant technology companies special banking charters that will allow them to compete with banks nationwide. Right now, the situation is vague with regards to regulations for technology companies. Wal-Mart, in 2006, applied for a banking license to establish an industrial loan company (ILC) in Utah. Eventually, lawmakers and banking groups blocked future banking efforts by Wal-Mart and tried to prohibit commercial companies from obtaining new ILC licenses.
Amazon can cause a similar backlash for itself and would rather want to concentrate on other aspects of its business than deal with the headaches of being a bank. Moreover, providing financial services is merely another avenue for plugging companies into the Amazon ecosystem. So the lending arm (as a non-bank) fits nicely into the overall scheme of things.
The Real Threat of Amazon
Amazon really doesn’t want to displace banks as they are one of the main consumers of Amazon Web Services (AWS). Rather, it wants to disrupt banking services. Amazon Web Services is the biggest provider of cloud computing and controls 45 percent of the global cloud infrastructure market. It is used by most of the major businesses and has become an absolute necessity for the financial sector.
“Amazon Web Services (AWS) is forming the backbone of the financial services ecosystem, with a diverse set of firms – from JP Morgan to startups such as Xignite – adopting AWS for data storage and processing,” a consulting report stated.
Apart from this, legacy banks are losing direct interaction with their customers. For example, USAA and Capital One are both experimenting with Amazon’s digital assistant Alexa as a new consumer banking channel. Amazon is not taking any direct market share from banks; rather, it is becoming the customer interface for banks and putting them in the background.
It will be interesting to see how Amazon shapes its lending business with enterprise AWS contributing a sizeable chunk to the bottom line. But with hundreds of millions of customers and merchants on its platform, you can bet it will be at the vanguard of online lending.
Twenty-two years ago, when Jeff Bezos launched Amazon, no one ever thought the e-commerce startup would transform the retail industry landscape. In June, it made a statement-making purchase by buying Whole Foods for a staggering $13.7 billion. The company took advantage of technology, used an aggressive growth strategy, and disrupted the entire industry. It started […]
Twenty-two years ago, when Jeff Bezos launched Amazon, no one ever thought the e-commerce startup would transform the retail industry landscape. In June, it made a statement-making purchase by buying Whole Foods for a staggering $13.7 billion. The company took advantage of technology, used an aggressive growth strategy, and disrupted the entire industry. It started as an online seller of books and CDs in 1995 and now the “everything store” has sales of more than $400 billion.
Amazon’s Lending Business
The company is virtually omnipresent in all businesses, be it furniture, electronics, food or entertainment. In 2012, it added yet another service to its stable: Small business loans.
Considering Amazon enables millions of small companies to sell their products across the globe, having its own lending arm was a no-brainer. Amazon’s entry into small-business lending could transform the banking industry in the same way it revolutionized retail. Just recently, the Seattle-based e-commerce giant announced that it has made $1 billion in small-business loans to more than 20,000 merchants in the United States, Japan, and the UK during the past 12 months. Since Amazon Lending launched in 2011, it has surpassed $3 billion in loans to small businesses. Further, more than 50 percent of the companies eventually take a second loan from Amazon.
Launching its own lending arm is a stroke of genius by Amazon, the company will earn interest on the loans while retailers (with the aid of the loans) will be able to sell more products on the Amazon website and thus will add to Amazon’s earnings. Its big pockets and negative working capital mean it has lots of cash to lend; a mammoth retailer database means it is fairly easy for Amazon to tap into the lucrative space.
“We created Amazon Lending to make it simple for up-and-coming small businesses to efficiently get a business loan, because we know that an infusion of capital at the right moment can put a small business on the path to even greater success,” said Peeyush Nahar, vice president for Amazon Marketplace, in a company announcement.
How Does Amazon Lending Work?
Amazon’s loan program is by invitation only. It offers short-term business loans ranging from $1,000 to $750,000 for up to 12 months to micro, small, and medium businesses selling on Amazon to help them grow their businesses. Loans are approved within 24 hours and, usually, loan money is used for inventory financing and business expansion.
Unlike traditional lenders, which use lengthy loan applications and require a host of documents, Amazon uses internal algorithms to invite sellers to the program based on the popularity of their products, inventory cycles, and other factors. It does not charge an origination fee or prepayment penalties. Furthermore, after establishing its foothold in SME lending, the company plans to branch out into other markets where there are a lot more opportunities, such as Canada, India, France, and China.
To Be or Not To Be: A Bank
For now, the lending business is relatively a small part of its operations. But considering its vast resources and huge database, it will be interesting to see whether Amazon scales up its credit business and applies for a banking license.
According to a survey of 32,715 people in 18 countries conducted by Accenture, 31% of the respondents would switch to Google, Amazon, or Facebook for banking, if these companies offered financial services. In another report by CB Insights, Amazon has the highest customer satisfaction at 86% compared to Citi (82 percent), Capital One (80 percent), “all banks” (80 percent), TD Bank (79 percent) and Bank of America and Chase (each 75 percent). With more and more millennials opting against traditional banks, becoming a full-fledged financial institution does seem like a viable option. But will Amazon follow that path?
Regulatory Backdrop
Ever since marketplace lenders gained prominence in the financial circle, there has been a debate raging on whether or not to grant technology companies special banking charters that will allow them to compete with banks nationwide. Right now, the situation is vague with regards to regulations for technology companies. Wal-Mart, in 2006, applied for a banking license to establish an industrial loan company (ILC) in Utah. Eventually, lawmakers and banking groups blocked future banking efforts by Wal-Mart and tried to prohibit commercial companies from obtaining new ILC licenses.
Amazon can cause a similar backlash for itself and would rather want to concentrate on other aspects of its business than deal with the headaches of being a bank. Moreover, providing financial services is merely another avenue for plugging companies into the Amazon ecosystem. So the lending arm (as a non-bank) fits nicely into the overall scheme of things.
The Real Threat of Amazon
Amazon really doesn’t want to displace banks as they are one of the main consumers of Amazon Web Services (AWS). Rather, it wants to disrupt banking services. Amazon Web Services is the biggest provider of cloud computing and controls 45 percent of the global cloud infrastructure market. It is used by most of the major businesses and has become an absolute necessity for the financial sector.
“Amazon Web Services (AWS) is forming the backbone of the financial services ecosystem, with a diverse set of firms – from JP Morgan to startups such as Xignite – adopting AWS for data storage and processing,” a consulting report stated.
Apart from this, legacy banks are losing direct interaction with their customers. For example, USAA and Capital One are both experimenting with Amazon’s digital assistant Alexa as a new consumer banking channel. Amazon is not taking any direct market share from banks; rather, it is becoming the customer interface for banks and putting them in the background.
It will be interesting to see how Amazon shapes its lending business with enterprise AWS contributing a sizeable chunk to the bottom line. But with hundreds of millions of customers and merchants on its platform, you can bet it will be at the vanguard of online lending.
News Comments Today’s main news: Credible raises $50M in Australian IPO. Kabbage considers IPO. Blockchain project gives New York homeless a digital identity. Funding Circle surpasses $5B global lending, $1B to U.S. businesses. RateSetter publishes 2016-17 accounts. Starling Bank gets full FCA, PRA approval. N26 launches premium debit card, partners with WeWork. Revolut rolls out bitcoin services. Vietnam gets first P2P lending platform. IOU […]
7 fastest-growing personal finance apps of all time. AT: “If you read just one article today, this should be it. CB Insights delves into the fastest-growing personal finance apps including Robinhood, Mint, Check, Level Money, and others and illustrates–better than any case study ever can–how you can grow your own alt lending company. Learn what to do before, during, and after launch by studying these companies.”
Starling Bank gets full FCA, PRA approval. AT: “Huge news. Congratulations. This could be the first step to making digital-only banks legitimate in the UK, and it could be the first step to helping them gain real traction elsewhere in the world–first in Europe, then Asia, and the U.S.”
Credible launches IPO and raises $50M. AT: “This is a huge move, but I wonder why they chose Australia as opposed to the U.S. Ron Suber’s comments provide a clue.”
According to FT Partners, the FinTech market saw a record 412 financial deals during the third quarter of 2017. One of the largest deals in the quarter involved a $250 million investment by Softbank (OTCPK:SFTBY) in billion-dollar unicorn Kabbage (Private:KBGE).
As we near year’s end, we’re excited to announce that LendingClub has closed its third self-sponsored securitization. The $330 million transaction saw immediate traction and has further increased access to consumer credit for the stable and scalable pool of investor capital in the liquid Asset-Backed Securities (ABS) investor market.
Of note, with 48 total securitization investors this year, over two-thirds 34 are new to LendingClub, including insurance companies, hedge funds, a bank and a pension fund.
Ninety-two million millennials will soon be in what Goldman Sachs calls their “prime spending years.” In aggregate, they command $1.3 trillion in annual spending.
(Bankrate found 83% of millennials don’t think they’ll ever retire: they simply “don’t think they’ll have the money” to do so.)
Source: CB Insights
For three of the tools we looked at — Mint, Level Money, and Check — we studied how their product evolved all the way up to their acquisition (by Intuit, Capital One, and Intuit, respectively).
Source: CB Insights
What follows are the results of our analysis — six secrets to success in the world of personal finance management.
1. Use pre-launch marketing to build both trust and hype
Mint had by far the most significant growth in its valuation — from $0 to $170M in just two years.
Source: CB Insights
2. Making the first experience valuable
Keeping users around is hard: according to Localytics, the average mobile app loses 80% of its users within just three days of download.
The best apps retain about 70% of users after three days. The next-best retain about 60%.
A few minutes later, Therrien’s phone buzzed. It was the same guy. He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn’t owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.
Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don’t owe. The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.
The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams.
Three thousand homeless people in New York are about to receive a special holiday gift: a free smartphone that allows them to manage their digital identity, access shelters and food pantries, and make use of financial services.
Life Wireless is distributing the phones, starting in the Bronx. The service groups create the blockchain identities for individuals. Once on the system, they can then open an account, receive money, and track their activity.
Blockchain for Change has raised more than $500,000 in a seed round, but it’s also planning a public initial coin offering where it hopes to raise up to $50 million. It generates revenue by charging fees to users at a rate of $3 per month.
More than Google, Apple, or Facebook, there’s one company that CEOs and public company execs are talking about the most. We analyzed earnings call transcripts to identify the new king of technology.
Amazon has been mentioned nearly 3000 times in the last year. That’s more than Facebook, Apple, and Microsoft combined.
Global Debt Registry (GDR), the asset certainty company, today announced its membership to The Wall Street Blockchain Alliance (WSBA).
WSBA is an industry non-profit trade association created for financial market professionals, by financial market professionals. The alliance engages market participants, regulators, policymakers and technology innovators to advocate the adoption of blockchain’s distributed ledger technology.
Discover has announced that transactions made with Apple’s new Apple Pay Cash card will leverage the Discover Network.
The card is part of the new Apple Pay functionality, which allows U.S. customers to quickly, easily and securely send and receive money among friends and family. When Apple customers receive money on a supported device, the money is added to their new Apple Pay Cash card. They can use the money instantly to pay someone or to make purchases using Apple Pay in stores, apps and on the web.
One of America’s biggest payday lenders is launching on the stock market with a $620m valuation, cashing in on mounting hopes that the Trump administration and Republicans in Congress will ease regulatory restrictions on the sector.
Curo Group, which targets “underbanked” consumers and is behind WageDayAdvance in the UK as well as Speedy Cash in the US, begins trading on the New York Stock Exchange on Thursday.
Shares in the private equity-backed company were priced on Wednesday evening at $14 per share, according to Bloomberg data.
Recently, a Manhattan federal jury convicted Richard Moseley Sr., the head of an online network of payday lenders and loan servicers, on charges of wire fraud, aggravated identity theft, and violating the Racketeer Influenced and Corrupt Organizations Act and Truth in Lending Act, among other counts.
Moseley was convicted due to his leadership role over a vast and complicated system of interrelated companies that collected over $220 million from more than 600,000 borrowers and deceived regulators in the process. Convincing state and federal regulators and even his own lawyers that his companies were based offshore and not bound by U.S. law, Moseley coordinated a network of lenders and loan servicers that routinely misled both consumers and regulators.
Instamotor, the free online used car marketplace, announced today that its customers can now apply for and receive financing for vehicles on its platform.
An estimated 54% of used car buyers need financing according to Experian. By working with leading direct-to-consumer automotive lenders, Instamotor will become one of the few true automotive marketplaces to enable its users to shop for a used car and secure the financing more than half of them will need, all conveniently integrated in one place.
Loans enabled through Instamotor will be available to consumers with FICO scores as low as 500, which are people who commonly have trouble receiving optimal loan terms through traditional financing methods. Also, the application is optimized to be completed entirely in the comfort of one’s home rather than in a dealership office or credit union.
Marketplace lending platform Lendio, recently announced its has opened its new franchise located in Nashville, Tennessee. Lendio revealed that its franchise program makes accessing business loans easy by helping small business owners skip the legwork of looking for a small business loan.
Marqeta, the open API payment card issuing platform, and Progressive Leasing, a virtual lease-to-own company and a division of Aaron’s, Inc., today announced a technology partnership that will enhance the checkout process for Progressive Leasing customers.
As one of the largest players in the lease-to-own industry, Progressive Leasing sought a partner who could support their needs today and provide innovative solutions to help build their future payment checkout roadmap. Through the partnership, Marqeta will enable Progressive Leasing to issue virtual cards at the point of sale and work with them to create additional innovative payment offerings.
With the partnership, Marqeta will enable Progressive Leasing to take advantage of a wide range of modern features, including virtual card issuance, tokenization, and its patent-pending Just-in-Time (JIT) Funding, allowing Progressive Leasing to authorize and reconcile transactions in real time.
To those unfamiliar with real estate crowdfunding, the Fair-Haired Dumbbell development in Portland may be just the kind of wacky, esoteric project one envisions when imagining what happens when strangers pool funds online, crossing Kickstarter with construction. A pair of six-story towers connected by a skybridge, the commercial project does in fact resemble a hand weight, with an ostentatious, colorful Italianate pattern sprawled across the facade for extra impact.
Funded in part by investors who pooled money via the Crowdstreet crowdfunding platform, the building, located in a former industrial neighborhood called Burnside Bridgehead, is also open for business and looking for tenants. It’s the city’s first crowdfunded building, and a sign that the growing world of real estate crowdfunding has developed and matured since a 2012 change in investment regulations made these platforms possible.
While reliable numbers about this growing and fragmented market prove difficult to come by, research firm Massolution estimated the global market for real estate crowdfunding surpassed $3.5 billion in 2016.
More than $3 billion has been raised through so-called initial coin offerings so far in 2017.
That wait-and-see stance looks to evolve into much more action in 2018, suggest those who’ve either spoken with the Securities and Exchange Commission or otherwise have a vested interest in its rulings. (The SEC isn’t commenting publicly on its specific plans.)
Just Friday, a new division of the agency that’s focused on ICOs filed charges against an outfit called PlexCoin that reportedly raised $15 million from thousands of investors by promising a 1,354 percent return in 29 days or less.
A row has erupted over credit scoring after the head of FICO, the company whose metric underpins trillions of dollars in lending decisions in the US, hit out at some lenders for supplying customers with a rival measure he dismissed as “Fako”.
The group that supplies lenders with the rival assessment, VantageScore, hit back, saying Mr Lansing was spreading “misinformation aimed at discrediting FICO’s only real competitor”.
The spat points to the opacity of credit scoring, a crucial part of America’s consumer finance economy that is in the spotlight after the huge data loss at the credit reporting company Equifax.
Tips for Reducing College Costs (Earnest Email), Rated: B
Roostify, a provider of automated mortgage transaction technology, today announced that it has signed an agreement with Black Knight, Inc. (NYSE:BKI) to integrate its platform with Black Knight’s LoanSphere Empower loan origination system (LOS). The integration will enable Empower users to add further efficiency and transparency to the loan origination process – from application to closing.
Envestnet | Yodlee(NYSE: ENV) today announced the members of the newest Envestnet | Yodlee Incubator class.
The members of the 2017–2018 Envestnet | Yodlee Incubator class are:
Amplifunds helps donors find non-profits that match their interests and performance expectations.
Datasine turns transactional data into psychometric insights, allowing banks to better serve their customers.
Golden helps families care for their senior parents’ financial health, wealth and security.
Peanut Butter offers a cloud-based software to help employers attract college-educated talent by managing student loan assistance programs.
Starbutter AI makes text and voice chat Artificial Intelligence (AI) agents that help consumers pick financial products like credit cards and mortgages.
Stessa enables property owners to manage, track, and communicate performance of their real estate assets.
Tangello improves home affordability by bridging the gap between renting and buying and offering a flexible, lower cost, and quicker way to finance homes, directly from mobile devices.
Veryfi provides mobile-first bookkeeping software that empowers business owners by automating the tedious parts of accounting through AI and machine learning.
AutoGravity has announced the appointment of Sheng Wang as Chief Technology Officer (CTO) to drive the company’s global engineering efforts. Wang joins AutoGravity’s executive team with responsibility for leading product and engineering to deliver a trustworthy and innovative car buying experience that empowers the consumer.
Prior to her appointment as CTO, Wang led AutoGravity product development as the company’s first Director of Product, building cross-functional teams to develop and launch the award-winning AutoGravity platform, as well as branded platforms for Volkswagen Credit and Kia Motors Finance. Wang joined AutoGravity with more than fifteen years of leadership experience in the technology industry and an uncompromising dedication to building dynamic teams and high-impact products that people love.
QCash Financial, a Credit Union Service Organization (CUSO) providing automated, cloud-based small-dollar lending technology for financial institutions, announced that it was selected as the winner of Financial Times Future of Fintech Innovation Award.
The FT Future of Fintech awards recognize pioneering companies able to demonstrate innovative ideas capable of creating lasting change in the financial services sector on a global scale. Financial Times offers an Innovation Award for newer Fintech companies that are bringing out novel solutions. QCash Financial was awarded the Innovation Award.
Funding Circle today announced that investors have lent more than $5 billion globally to small businesses through the Funding Circle platform. This has supported a network of 40,000 businesses across the UK, USA, Germany and the Netherlands and helped to create more than 100,000 new jobs.*
Today’s news follows a record November for Funding Circle globally with the business facilitating more than $260 million of lending, including $175 million in the UK (£130m), $70 million in the US and $15 million in Continental Europe (€14.5m). Together this has helped thousands of business owners to access fast, transparent finance to grow their businesses, and will lead to an estimated 7,500 new jobs.
With US businesses now having accessed more than $1 billion in funding through the platform, Funding Circle becomes the first lending platform anywhere in the world to have facilitated more than $1 billion across two markets.
On Wednesday, UK peer-to-peer lending platform RateSetter released its accounts for the year ending on March 31, 2017. The online lender reported that revenues were £23.7m, up 38 percent from 2015-16; loans under management grew by 23 percent, from £581m to £714m; the number of active lenders grew by 36 percent from 31,036 to 42,049; and, over the same period, the number of active borrowers grew 27 percent from 161,000 to 204,000.
RateSetter booked a pre-tax loss of £23.3 million in the year to March 2017, compared to a £5.3 million in the previous year. The company operates a peer-to-peer platform that matches retail investors with individuals looking to borrow money.
Operating losses were £9.2 million last year but the figure was pushed higher by a one-off write-down relating to a loan the platform made to Adpod Limited, an advertising business RateSetter lent £12 million. ‘A resilient business’
RateSetter’s accounts also show that revenue rose by 38% to £23.7 million. Loans under management rose by 23% to £714 million. The number of active lenders on the platform rose by 36% to 42,049 and the number of borrowers rose by 27% to 204,000.
A goodwill impairment pushed pre-tax losses for RateSetter down to £23m in the year ending March 2017, despite revenue growth of 38% to £23.7m.
The company, which launched a consumer vehicle and commercial assets HP offer this year, saw a rise of 36% in the number of lenders and 27% of borrowers. However, operating losses of £9.2m were further weighed down by a £14.1m goodwill impairment on a loan to advertising company Adpop.
In 2015 Vehicle Trading Group, a company operating in motor finance for consumers and dealerships, used a wholesale facility from RateSetter to lend £12m to Adpop. Both Vehicle Trading Group and Adpop subsequently went into financial difficulties, and RateSetter then bought the two companies.
RateSetter thus decided to back Adpop’s repayments of third party loans, preventing its provision fund from absorbing the hit, as it normally would in case a borrower defaults.
Starling Bank has been granted approval by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to offer customers a wide array of financial products by the mobile only bank. Starling Bank received a licence to operate as a bank by the Bank of England in 2016. The digital only challenger bank will now be able to provide; mortgages, consumer loans, ISAs, and other investment products via their App. No bricks and mortar necessary.
P2P Global Investments (P2P), the largest of the listed alternative lending funds, has won the backing of Invesco Perpetual’s Mark Barnett, its largest shareholder, for the turnaround plan it outlined last week.
The financial advisory sector has seen much change in the past few years, much of it driven by new technologies and a wave of new market entrants. While we are seeing consolidation and innovation in response, this is just the start. So if you thought the merry-go-round was slowing down, then grab hold tightly because it is only going to accelerate.
‘Fintegration’ – the integration with fintech services – is emerging as an important factor.
What is common to both groups is their appetite for financial online and digital services – from online banking and mortgage management to peer-to-peer lending platforms. There is no doubt we will shortly see the fully integrated dashboard becoming commonplace.
The 24-year-old secretary is among millions of Chinese who have turned to proliferating online companies that dish out quick loans — and are worrying the country’s leadership.
Jia started accumulating her debt when she was in college, turning to tech titan Alibaba when she could not get a credit card.
The ease of a few taps on her phone and a four minute wait led Jia to borrow and borrow and when she was finally able to take out a card, she used it to repay Alibaba’s affiliate Ant Financial.
But her debt reached roughly US$9,000 this summer, and her monthly interest payments eclipsed her meagre salary.
‘Lending nirvana’
Alternative lending, with loans that can be wired to accounts within minutes, has taken off in China and accounts for 85 percent of the global market, according to a University of Cambridge report.
N26, the European mobile banking service, today announced the launch of N26 Metal, the company’s premium MasterCard-affiliated debit card “tailored to the needs of digital customers” at TechCrunch Disrupt Berlin. N26 Black customers in Germany, France, Italy and Austria will be able to sign up for the new NFC-enabled card, which obviously features a metal core made from tungsten and that makes the card weigh a lot, starting December 14.
It’s also worth noting that this is the first metal card in Europe that supports contactless payments.
What better company to partner with then than co-working and real estate startup WeWork. Using the N26 Metal service, N26 customers will also be able to join the WeWork network and get credits to reserve workspaces and conference rooms.
Revolut, which provides foreign currency services to consumers and small businesses, said that from today its users would be able to buy bitcoin and other “cryptocurrencies” using 25 conventional currencies.
Marking its 15th anniversary year, BFS Capital, a leading small business financing platform, announced it has now extended over $1.7 billion in financing since funding its first deal in 2002. The company also reported that over 75 percent of its originations have occurred in the last five years and more than 25 percent took place in the last 18 months. For full year 2017, BFS Capital expects to generate more than $300 million in originations, a new annual high.
Today, Kabbage announced they had crossed the $4 billion mark. They have now lent to more than 130,000 small businesses which they claim is the largest customer base of any online small business lender.
This week LendingHome announced it had crossed $2 billion in mortgage loans for homeowners and real estate investors.
Funding Circle UK crossed the £3 billion (approx. $4 billion) mark in small business lending for their UK business.
LendingClub quietly announced total small business originations of $500 million since 2014 in a recent blog post.
The Chinese government instituted tough new regulations on online consumer lending platforms, which are made up of payday loans and peer-to-peer lending. Some of them are associated with large holdings in the emerging markets exchange-traded fund like Ant Financial, an Alibaba Group affiliate.
While much of this is a continuation of the Chinese debt bubble, the move suggests that it has gotten out of the regulators’ control.
We see a global trade boom continuing to drive emerging markets as global Purchasing Manager indexes show continued growth in demand for manufactured goods. For example, Korea is already registering signs of slowing Chinese demand but is still showing 9.6 percent year-on-year growth for November exports. However, we continue to watch the tone out of Washington, since a shift toward more protectionism could put a dent in this.
Viola, the Israel-based technology investment group, is launching new independent VC fund targeting fintech startups from anywhere in the world. Dubbed Viola FinTech, the “cross-stage venture fund” has an initial closing of $100 million but will extend that towards $120-150 million. It is backed by global banks, insurance companies and asset managers from North America, Europe, APAC and Israel, including Scotiabank, The Travelers Companies, Inc and Bank Hapoalim.
San Francisco-based financial technology company Credible Labs Inc. is going public, but not on a U.S. exchange.
The startup, a consumer loans marketplace, raised $50 million (A$66 million) in an initial public offering on the Australian Securities Exchange, according to a statement Thursday.
The IPO values Credible at A$300 million, about 50 percent higher than the valuation it got in its last fundraising round, according to people familiar with the matter, who asked not to be identified as the details aren’t public.
Yellow Brick Road has added online lender Prospa to its lending panel. The move was described as an effort to diversify its lending offerings for Australian small business customers. Yellow Brick Road is a full service wealth management company that offers products and services for home loans, financial planning, insurance, superannuation, and investments.
Speaking to Nest Egg, CEO of fully licensed marketplace lender Zagga, Alan Greenstein said that self-directed investing is now a “very, very big part of SMSF investment” and that according to Zagga research, well over 30 per cent of SMSFs at a sophisticated wholesale level are self-directed investors.
Pointing to a recent whitepaper produced by Zagga, Mr Greenstein said SMSFs tend to be invested at either end of the spectrum; very high risk and high yielding opportunities, or very low risk opportunities.
He said that Zagga’s newly launched ZAG Fund offered a middle ground, with a targeted net return of 6.5 per cent.
With loan capital provided by Kiwibank, Ngā Tangata Microfinance (NTM) provides no-interest loans to qualifying clients for family well-being and relief from high-interest debt.
An evaluation conducted by the University of Auckland’s Centre for Applied Research in Economics found NTM’s no-interest loans were crucial in helping low-income clients break the cycle of debt caused by predatory payday and fringe lenders.
Partnering with local budgeting advisors, NTM has now disbursed more than $660,000 in no-interest loans to more than 300 clients, with 70% of the support being for relief from high-interest debt. It is estimated these loans had potentially saved clients a total of more than $1 million in interest and additional costs. Requests for help continued to trend up – 30% more NTM loans were approved in the past 12 months compared to the previous year, amounting to nearly 130 loans worth $275,000.
When you buy a phone, you have the option to pay for it then or pay later. You have this option even when you are buying grocery or paying bills. Credit these days can be available relatively easily, even for amounts as low as Rs1,000. In fact, in a country where you need to have a good credit history and credit score to get loans from banks, you can now get loans on your phone—even if a bank would not lend to you.
According to data from the Centre for Monitoring Indian Economy Pvt. Ltd (CMIE), personal loans (incremental numbers) increased 179% and credit card outstanding rose 34.63% in value during April to October period in FY 2017-18. In comparison, incremental numbers during the same period for housing loans showed negative 32.7%.
Source: livemint
HDFC Bank Ltd saw a 35.75% growth in personal loans and 44.50% growth in credit card business in the second quarter (on a year-on-year basis). ICICI Bank, in its second quarter results this financial year said that its personal loan book saw a 40.1% year-on-year growth and the credit card business grew by 36.5%. And this is true for the non-banking finance companies (NBFCs) as well. Bajaj Finance Ltd saw a 42% growth in consumer lending in the same period.
Vietnam has launched its first peer-to-peer lending service Vay Muon, enabling people to borrow and lend money without having to go through a financial institution.
Matching lenders and borrowers via a smartphone application, the lending platform does not require mortgages and one-on-one meetings, local VTV online newspaper reported on Thursday.
First-time loan requests will be reviewed and disbursed within four hours and subsequent requests will be handled in just half an hour.
Korean startups flock to Silicon Valley hoping to become the next Facebook or Google. However, setting up a business from scratch where thousands of new startups come and go every year, is not easy, and becoming a “unicorn” is near impossible.
One fundamental reason is because they can’t get enough funding, according to Tim Chae, head of the Korean unit of US accelerator 500 Startups.
First of all, a company should either run a business in a certain sector for which Korea is widely famous worldwide, such as beauty and e-sports segments, rather than roll out me-too services and products.
On November 29–30 a large-scale event — Block Show Asia 2017 — was held, and Datarius Cryptobank participated in this event.
Datarius Cryptobank is a unique project. This is a first social cryptobank built on base of the distributed register technologies using neural networks and artificial intelligence. The main attractive features of the project for investors and future customers are the lowest transaction fees, as well as P2P-lending.
IOU Financial Inc. (“IOU” or “the Company”) (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announces today that it has facilitated more than US$500 million in financing to thousands of merchants and small businesses across the United States and Canada since launching its lending platform.
News Comments Today’s main news: Kabbage lends $4B to over 130K small businesses. RateSetter loses 23M GBP in ad investment. RateSetter to launch IFISA in February. Klarna, WorldPay partner on invoice and credit-based payments in Europe. Two new crypto-asset backed fiat loan platforms. Toss to expand into southeast Asia. Today’s main analysis: LendingTree’s monthly mortgage offer report. Today’s thought-provoking articles: […]
Kabbage hits $4B SMB lending milestone. AT: “This is still small compared to the amount of small business lending overall. For instance, the SBA reports that in June 2015 alone, small business loans of $1 million or less totaled $599B. Still, Kabbage leads the alternative lending sector by far. Congratulations.”
Learning all about machine learning. AT: “Not specific to the lending industry, let alone alternative lending, but machine learning is going to be a huge part of the financial services ecosystem going forward. This PYMNTS article has some interesting insight into AI and machine learning all around.”
Banks are getting concerned about doomsday defenses. AT: “The interesting thing here is that banks aren’t relying on the government to bail them out if cybersecurity threats get the best of them. They’ve developed their own defense, but is it strong enough?”
Lloyds, Royal Bank of Scotland are closing branches. AT: “We could see a spiraling effect: As digital banks become more popular more brick-and-mortar bank branches will close and as more traditional branches close the more people will use mobile banking apps.”
Kabbage Delivers $ 4 Billion to More Than 130,000 Small Businesses (Kabbage Email), Rated: AAA
Kabbage, Inc., a global financial services, technology and data platform serving small businesses, has extended over $4 billion to more than 130,000 small businesses, serving the largest customer base than any online small business lender. These landmarks represent an approximate 30-percent increase in total funding and total customers served since the company’s last milestone announcement in April 2017. With over 1.5 million live data connections with its customers, Kabbage’s high growth is attributed to its fully-automated lending technology as it continues to be a trusted lending partner to tens of thousands of small businesses across all industries in all 50 U.S. states.
Robert Sharpe also joined the company as its chief operating officer. Sharpe has more than 20 years of executive leadership in North America, Europe and Asia. He has successfully held various C-level positions, including president, chief executive officer and chief operating officer with multiple global consumer goods companies, each serving tens of thousands of customers and generating billions of dollars in revenue. With an additional ten years of commercial banking and corporate finance experience, Sharpe will be responsible for Kabbage’s continued growth and operational oversight as the company expands internationally and scales its services to serve more and larger small businesses.
During 2017, Kabbage reached major milestones, including:
Raising $250 million, the largest equity raise in the small business lending industry to date
Expanding the industry’s largest international network of global-bank partnerships with launches in France and Italy
LendingTree today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.
Source: PRNewsfoto/LendingTree
November’s best offers for borrowers with the best profiles had an average APR of 3.75% for conforming 30-year fixed purchase loans, unchanged from October. Refinance loan offers were down 1 bps to 3.69%. Mortgage rates vary dependent upon parameters including credit score, loan-to-value, income and property type.
For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 1 bps to 4.30%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was unchanged from October when it reached the highest since July. We prefer to use the APR as lenders often make changes to other fees in response to changing interest rates.
Consumers with the highest credit scores (760+) saw offered APRs of 4.16% in November, vs 4.43% for consumers with scores of 680-719. The APR spread of 27 bps between these score ranges was 5 bps wider than in October and the widest since July 2016. The spread represents nearly $13,400 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $233,127. The additional costs are due to higher interest rates, larger fees or a combination of the two.
Refinance APRs for conforming 30-yr fixed loans were down 2 bps to 4.24%. The credit score bracket spread widened to 19 from 16 bps, amounting to $9,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,973.
Average proposed purchase down payments have been rising for 8 months and reached $62,409.
Certainly, the mountains of data are becoming larger by the day. Seven years ago, the total amount of information produced on a global scale passed one zettabyte. The scale shakes out thusly: If a single cup of coffee holds a gigabyte, then the Great Wall of China stores a zettabyte. In just three years, the tally will be 44 zettabytes, or 44 Great Walls of China, as estimated by global market intelligence firm IDC.
Along with the impressive growth in data created, stored and used on a global scale, so too is AI poised to grow in leaps and bounds. It will create nearly $37 billion in annual revenues for companies of all stripes, sizes and sectors, according to market intelligence firm Tractica.
Within that figure, machine learning is a sector that will see $15.3 billion in revenue in 2019, as noted by BCC Research and cited by business process outsourcing company TeleTech, with an average annual growth rate of 19.7 percent. The savings for U.S. companies could be as high as $60 billion in 2020, Forbes noted. In addition, AI is expected to add $8.3 trillion in economic activity for the U.S. by 2035, according to projections by business management consultancy Accenture.
Consider a financial institution processing credit card information. The transaction data is passed to the machine learning system as soon as it is entered at the terminal or point of sale, and the system then analyzes the transaction against the system on which it has been trained. The historical data offers a way to glean what “normal” behavior of a transaction looks like.
To combat a payments fraud adversary that is evermore fluid with bad actors’ tactics and operates in a card-not-present (CNP) world, the machine deployed by a financial institution must be able to “explain” what it is doing, Feedzai said. The “learning” should result in explaining the reasoning so the logic behind the decisions is transparent and meets compliance needs.
U.S. banks have quietly launched a doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyberattack.
The effort, which went live earlier this year and is dubbed Sheltered Harbor, currently includes banks and credit unions that have roughly 400 million U.S. accounts.
While most people worry about their money being stolen in a hack, banks fear something more sinister: an attacker destroying, or even simply locking, data.
Such moves could cripple a bank, leaving it unable to operate for hours, days, or perhaps much longer.
On Friday of last week, LendingClub announced that it closed a new kind of transaction. It was a whole loan transaction structured as a tradable pass through security called a CLUB Certificate.
This was an initiative that was investor led. Basically, they had a potential investor who did not want to invest in whole loans. They are not for everyone, given they are an illiquid investment that has a duration of several years. What this investor wanted was a security that acted like a whole loan but one that had liquidity.
While LendingClub would not share details of this deal we did learn that these were both three and five year loans of one particular loan grade. They customized this deal to meet the investors exact requirements.
LendingClub claimed that this was a first of its kind deal in marketplace lending but in my research I discovered this piece on Asset-Backed Alert from April 2016 that talked about a similar structure that Prosper was working on last year.
However, when the lending process is digitized the amount of paperwork is reduced dramatically. This is because account activity, credit history, income history as well as tax compliance can be fed into the system with the click of a button. This has made the collection and verification of information quite easy. Besides streamlining the application process, the amount of time it takes to get a loan has also reduced.
In addition, some lenders have developed some innovative mobile solutions that enable customers to submit an application from anywhere. The most outstanding feature about mobile loans is that there is a constant interaction between the lender and the borrowers. This goes a long way in improving service delivery.
Courtesy of technology advancements, now it’s possible to view the status of your loan application as well as your account status with a lender. This helps borrowers to stay updated during the entire online installment loans process. In addition, you can get instant communication about any requests that a lender may have that is critical to the borrowing process.
When bankers complain about the security risks of sharing data with fintechs, they get an eye roll. Such complaints tend to be regarded as a cover for an ulterior motive: unwillingness to give customer details to competitors.
After a number of months of testing and refining an alternative way to bank, Ally Bank launched Ally Skill. “It was ready for prime time,” said Diane Morais, president of consumer and commercial banking at Ally Bank. Since mid-November, a customer can ask Alexa — in their own words — what their balance is, what the price of something costs in hours worked, and notably, to move money.
Since Capital One announced its skill in March of 2016, U.S Bank, American Express and several credit unions announced Alexa skills in addition to Ally. Others have been testing Alexa, including bank innovator USAA. Even smaller banks are readying to launch skills. FIS, one of the biggest bank vendors that has been testing Alexa since 2016, said about a dozen of its thousands of bank customers are on track to roll out a bank skill for Alexa by Christmas. Most recently, Amazon announced Alexa for business, and Capital One is one of its launch partners.
US regulators appear to be paying more attention to the opaque world of initial coin offerings.
The Securities and Exchange Commission announced Monday it halted a fraudulent ICO “falsely promising” over 1,000% returns. The regulator said this was the first case filed by its brand-new cybersecurity unit, aptly named Cyber Unit.
US banks and other financial companies are preparing for a lightening of their compliance burden in areas from payday lending to mortgages as President Donald Trump tightens his grip on a powerful regulator set up to protect consumers.
“Virtually the entire range of regulations previously adopted by the CFPB could be subject to review,” says Quyen Truong, a former senior figure at the agency who is now a partner at law firm Stroock & Stroock & Lavan. “There’s no particular set of rules that would be considered sacrosanct.”
In an early sign of his intent, Mr Mulvaney instituted a 30-day freeze on new initiatives within hours of assuming office.
Reforms that Mr Cordray had yet to introduce that would extend the CFPB’s reach into new areas, including mooted restrictions on small business lending, are now unlikely to see the light of day.
As we noted when we first covered the final draft of the payday lending rule, Congress retains the power to keep the rule from ever making it into the books, so to speak, through the power of the Congressional Review Act. The CRA not only would prevent the payday lending rule from going into effect, but it would also prevent any similar rule changes from being considered for the next five years.
After some dormancy on the issue, the House of Representatives passed a CRA resolution Friday that would effectively kill the payday lending rule in its cradle.
The move comes as a bi-partisan effort – somewhat surprising, given the general tenor of Congress at present, particularly when it comes to consumer protection issues – with three Republican and three Democrat co-sponsors.
Mulvaney has won the first round in court, as a U.S district judge rejected English’s request for a temporary restraining order to prevent Mulvaney from taking over. But English has said she intends to fight on and will seek a preliminary injunction against Mulvaney and the administration.
Congress has only 60 legislative days from the publication of the rule in the federal register to invoke the CRA, and the rule passed on Nov. 17.
I have been, far more often than not, on the same side of policy issues as the leading consumer and civil rights groups. But I disagree here: Maddenis not just legally wrong; it is also bad public policy, because it moves us further away from creating a more effective and inclusive financial system. Bipartisan, bicameral proposals have already been introduced in Congress to fix Madden. Congress should pass them.
LendingTree (NASDAQ: TREE), the online loan marketplace, announced today that it has entered into a multi-year subscription for segmentation analysis and database scoring with Gordian Knot Analytics Group, utilizing their unique segmentation methodologies and proprietary machine learning toolset. Gordian Knot offers proprietary marketing analytics machine learning tools that help LendingTree more effectively target and engage with the right consumers to drive the business forward and maximize value for current and future customers.
Socially responsible online lender OppLoans received top rankings in Glassdoor’s 2018 Best Places to Work award. The start-up was named the sixth-best place to work nationally for small- to medium-sized businesses.
PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that its Co-Founder and CEO, Brew Johnson, has been named to HousingWire’s 2017 list of Vanguard Award winners. HousingWire’s 2017 Vanguard Award recognizes top leaders from all areas of the mortgage industry, including those in lending, real estate and investing.
If Affirm was used to finance a purchase from the Republic Online Store, all carted items, including shipping, must be financed through Affirm. Shipping charges are not refunded by Republic Wireless. This means that you will still be responsible to Affirm for any shipping costs you financed and interest that has accrued.
Ratesetter slumped to a £23 million loss for the year after a disastrous investment in an advertising business.
The loss was due in large part to a £14 million write-off on Adpod Limited, which the lender ended up owning after using its own capital to prevent a huge default on its peer-to-peer loan book from hitting investors.
The loss is sharply higher than the previous year’s figure of £5.3 million.
PEER-TO-PEER investment platform Orca is one of 18 firms that have been accepted into the third phase of the Financial Conduct Authority’s (FCA) regulatory sandbox scheme.
The FCA received 61 submissions for the third phase of the scheme, of which 18 met the eligibility criteria and were accepted to move towards testing.
One of the successful applicants is Orca, which is developing an intelligent peer-to-peer investment platform which lets users diversify across multiple P2P platforms, lending sub-sectors and borrowers.
Squirrel, a personal finance app designed to help users have more control over their money, announced this week that it now processes £1 million a month. The company reported that it processed its 10 million last week.
Squrriel is currently seeking £400,000 through its equity crowdfunding campaign on Crowdcube. Funds from the initiative will be used to continue the expansion of Squirrels platform.
Israeli Shachar Bialick spent the first decade of his working life founding and backing start-ups before he dropped everything to move overseas and take an MBA.
He started Curve, a fintech company, to simplify personal finances with a single bank card for multiple accounts from different providers.
“We have too many cards, too many accounts, and too many products and services we use to manage our money,” he adds. “Curve is my biggest, most ambitious business so far. We are aiming to create an entirely new category in the banking system.”
Curve has raised $12m in venture capital funding and added corporate partnerships to extend the services it offers, such as an expense filing system provided by Xero, the online accountancy service.
Aire partners with retailer N Brown as more retailers become lenders for shopping middle class (Aire Email), Rated: A
Aire, which provides a more accurate way for lenders to understand and score new applicants, today announces a first-of-its-kind partnership with online retailer N Brown, as research data reveals the ‘new norm’ of UK shoppers choosing to spread the cost for their retail purchases over time.
The new agreement will see Aire provide its augmented credit assessment technology to support N Brown, which operates online stores such as JD Williams, in analysing the full picture of online customers and the true benefits and risks that come with them. Aire combines technologies of Artificial Intelligence with data science and deep knowledge of credit, which will enable N Brown to reach a wider group of customers without increasing its risk. After recent announcements about new partnerships in the p2p lending and car finance spaces, Aire’s expansion into the retail sector means that it is adding another new market to its portfolio in under six months.
Key insight:
– New partnership between Aire and online retailer N Brown for customers who choose to open a new credit account
– Aire adds retail finance to its growing portfolio
– New research finds that UK adults pay off on average of £40 per month for retail purchases
– 9% of UK adults increased their monthly commitments in the last two years
The new research by Swedish payments provider Klarna delves into the views of more than 2,000 consumers, and reveals that Brits today are so stressed out in the extended run up to Christmas that they’re overwhelmed when the day itself arrives.
In-store crowds were the number one stress for a quarter of respondents, whilst finding the perfect gift was the biggest source of stress for 20% of those surveyed.
These pressures could have a big impact on the bottom line of merchants if they’re not addressed; more than a third of consumers have previously walked out of a shop in frustration as a result. This is not just a bricks and mortar issue – 1 in 10 respondents have abandoned their online basket in frustration when the process is too complex, suggesting there’s still work to be done to smooth the purchase process online.
Wealth Migrate, (KPMG Global Fintech Top 50), a global online real estate marketplace, today announced the opening of a new office in the U.K. and the appointment of a new country CEO, as the firm continues to build on its global presence as part of a strategy to meet growing demand from investors.
To better serve its community of investors in this region, Wealth Migrate has opened a new office in London.
Adding to the news of this expansion, Wealth Migrate additionally announced the opening of their U.A.E. office and the appointment of a new U.S. based CEO this week.
To head up the new office, Wealth Migrate has appointed Ken Williams as its CEO of Wealth Migrate, U.K.
China’s online lending boom has sent a steady stream of new clients to Guangzhou lawyer Luo Aiping in recent months: the parents and siblings of young men trapped or ruined by usurious debts.
Zeng Hong, from Hunan province, is a typical client. She went to Luo for help because she had been harassed by calls from debt collectors for months after her 27-year-old brother ran away, leaving behind a two-year-old son and more than 300,000 yuan (US$45,400) in debts.
Zeng wanted to help repay her younger brother’s loans, but 300,000 yuan is a big sum for a poor family and her husband strongly opposed her plan. She approached Luo to ask whether the debts and interest her brother had incurred were legal.
You see, in an effort to fuel economic growth over the past few years, China has taken on a lot of debt. Since 2008, China’s debt as a percentage of economic output has increased from around 160 percent to around 280 percent at the end of 2016. (By comparison, the total debt in the U.S. as a percent of economic output is upwards of 300 percent.)
Source: ValueWalk
Why it matters: China is BIG and getting bigger
With a GDP of US$11.2 trillion, China is already the world’s second-largest economy (it will soon be the largest), and it has the second-largest stock market. The country will also soon have the world’s biggest middle class, totalling over 550 million people by 2022. To put this in perspective: That’s 1.7 times the entire population of the U.S.
Consumer loans (such as peer-to-peer (P2P) lending and payday loans) have grown rapidly recently. For example, consumer loans jumped 300 percent compared to last year.
Lufax, the online wealth manager that’s among the world’s biggest startups, has hired five banks to work on a Hong Kong initial public offering of as much as $5 billion, according to IFR.
Lufax is the world’s 10th-largest unicorn, or startup worth at least $1 billion.
Source: Bloomberg
Lufax had a loan balance as of Sept. 28 of more than 158 billion yuan ($24 billion), more than three times the 43 billion yuan held by China’s second-biggest P2P lender, New York-listed Yirendai Ltd., according to wdzj.com, a Chinese website that tracks online financiers.
What happened: The Ping An-backed online wealth management firm Lufax has hired five banks to work on an up to $5 billion Hong Kong IPO.
Why it’s important: A major player in China’s P2P lending market, Lufax will join a number of fintech companies that go public in recent months. It was eyeing an IPO as early as last year but later delayed the process due to market challenges and regulatory uncertainties, the CEO told Bloomberg last year. —Rita Liao
CreditEase, a world-class financial technology conglomerate based in Beijing, China, specializing in inclusive finance and wealth management, announced today that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”) has recently been ranked No. 7 by CB Insights as “Top 10 Most Active VC Investors in Global FinTech Companies” and No. 1 by FT Partners as “Most Active FinTech Investors (Corporate VC)”.
Particularly, Ning Tang, CEO of fintech firm CreditEase, is lending consumers cows in a bid to reach those living in rural areas who might have limited access to credit and financing.
The rural population accounts for 48% of China’s total, with agriculture accounting for about 8.6% of the the nation’s Gross Domestic Production in 2015, according to the World Bank. Income in rural China has also been on the rise, with urban income narrowing to 2.7 times that of rural income from 3.3 times in 2009. And though migration toward the city has been on the rise and the nation’s dependence on farming and livestock is on the slide, rural populations and agriculture are still a significant part of the country’s economy.
iQiyi, which is backed by Chinese internet giant Baidu, adopted the tactic first and developed it into a commercial product when it broadcast the 1930s tomb-raiding adventure tale “The Mystic Nine” last year. The first batch of advertisers ranged from iQianjin, a peer-to-peer lending app, to PepsiCo, which showed characters chowing down on Lay’s and gulping Pepsi.
The other major services, Alibaba Group’s Youku Tudou and Tencent Holdings‘ video platform, have embraced the tactic too. At iQiyi, the cost for embedding one such commercial in an episode ranges from $150,000 to $530,000, depending on projected viewership, Yuan says.
Worldpay, a global leader in payments, has announced that it will partner with Klarna, a leader in invoice and credit based payments, to further enhance its product portfolio. From today, Worldpay customers trading in Austria, Finland, Germany, the Netherlands, Norway, Sweden and the United Kingdom, and wishing to accept payments on invoice or instalments, will be able to use Klarna’s invoice and credit based payments from Worldpay. This will help eCommerce businesses to improve conversion rates by up to 20% and provide a fast and smooth checkout process.
These new payment options will allow consumers to decide when to pay for the items once they have received their goods. Instead of a request for credit or debit card details at the point of checkout, consumers are prompted for their email address and postcode, ensuring a quicker checkout process and leading to lower cart abandonment. The solution allows consumers to manage the terms of their payment, be it 14-day payment by invoice, by fixed or flexible instalments, spreading the cost over several months.
The move into credit and invoicing payments follows demand from customers wanting to expand the breadth of payment methods offered. Worldpay is one of the first payments companies to deploy this new payment integration, providing superior market coverage as well as faster time to market since there is no need for a new plug-in when legacy technology is updated.
Savings specialist Raisin continues to gain momentum. The savings account marketplace now has itself 100,000 customers. The company is also integrated with more than 40 banks, from across 18 European countries, including a number of challenger banks and even an online lender (Younited Credit). SolarisBank is its newest partner.
Lativan p2p lending marketplace Mintos just launched a cashback campaign running for the remainder of December. Investors investing in new loans with a term of at least 24 months on the primary market will receive a cashback of 2% to 5% depending on term length. The cashback will be credited within 6 days says Mintos.
Important: To be eligable an investor needs to enroll once for the campaign by clicking on the promotion banner inside the Mintos dashboard.
Typically, when we think of taking a loan, we think of going to a bank, filling out a ton of paperwork and then getting denied the loan unless a guarantor or cosigner signs as well. However, blockchain banking startups like Salt and Coinloan aim to change this by creating a peer to peer lending platform on the blockchain. These platforms allow users to leverage their bitcoin and other cryptocurrencies as collateral for fiat loans.
Salt hails from the land of the free, a.k.a Denver, Colorado, USA.
On the other hand, Coinloan has Baltic roots and is headquartered in Estonia.
Salt will be starting straight out of Denver, Colorado and is set to launch their blockchain backed lending platform, BTC collateralized loans and loan fund by the end of 2017. In 2018, they will be launching ethereum collateralized loans in Q1, credit cards in Q2 and altcoin collateralized loans in Q3.
By contrast, Coinloan is still currently running their ICO. By 2018, they hope to obtain payment licences in Q2, develop mobile applications for IOS and android by Q3 and enter the Asian market in 2019.
In about 2 weeks, Lendoit will launch its official token Pre-sale, but it can’t wait to reveal the secret that will change the future of decentralized BTC lending, which the company has entered together with the largest and most promising blockchain-based project, The RSK Project.
Right from Argentina is Rootstock or popularly called RSK. This company is well-known for its open-source smart contract stage which has a 2-dimensional peg to Bitcoin. Amazingly, RSK uses merge-mining to reward bitcoin miners and give them the chance to be part of the smart contract ecosystem.
The Goal? To ensure that the highest level of functionality and value is added to the entire bitcoin ecosystem through the use of smart contracts, increased scalability, and near-instant payments.
Lendoit removes all intermediaries in the lending process, creates a trusted and secure platform for participants through the smart contract, and gives users a decentralized, anonymous platform where upscaling, lending, and borrowing are done hassle-free.
PNC, a top-10 US bank by assets, is live on RTP, The Clearing House’s new US real-time payments system, using Finastra’s payment services hub, Fusion Payments.
“The ability to make an immediate payment at any time, on any day of the week, with a real-time confirmation of the payment significantly transforms the way businesses and consumers make payments in the United States. Emerging technologies such as RTP are creating opportunities for banks and clients to re-imagine our business models.”
Trulioo, the global identity verification provider, is delighted to be recognized as the global identity verification leader in a recent comprehensive report published by Let’s Talk Payments (LTP).
Morgan Stanley expects India’s digital payments penetration to increase from 5 percent today to 20 percent, and the e-commerce market to reach $200 billion, with 475 million e-commerce shoppers, adding up to a GDP upwards of $6 trillion — all by 2027.
India now has 800 million mobile phone users with 430 million having internet connectivity. According to Morgan Stanley, the number of internet users is expected to grow to 915 million by 2027.
Source: TechCrunch
In 2016, China’s digital payments were already 50 times America’s. Alibaba and Tencent understand ecosystems better than anyone else in the world, including American companies.
After emerging as one of the top fintech start-ups in Korea, Viva Republica, the company behind Korea’s top peer-to-peer transfer app Toss, is zeroing in on Southeast Asia as its next target market.
“While more than 70 percent of the population is using smartphones, their financial services are equivalent to that of Korea in the 1980’s. Our goal is to bring our story and product to Southeast Asian countries such as the Philippines and Vietnam and to improve the level of financial services in the market.”
As of November this year, the accumulated transactions through Toss reached 10 trillion won ($9.2 billion). In November alone, the platform handled more than one trillion won, a feat that comes just two and half a years since it launched in February 2015. The company said its annual sales will come to 20 billion won by the end of this year and reach the break-even point sometime next year.
Malaysian regulators are looking to clamp down on initial coin offerings or ICOs by expanding the definition of “securities” in existing laws, according to industry sources.
The regulator is also likely to require some form of licensing for cryptocurrency exchanges to operate on Malaysian shores.
Mexico’s Senate on Tuesday approved a bill that would regulate its fast-growing financial technology sector, including crowdfunding and cryptocurrency firms, paving the way for a vote by the lower house.
The bill, which seeks to promote financial stability and defend against money laundering and financing of extremists, is expected to pass in a final lower house vote by Dec. 15, said three sources familiar with the measure.
