Thursday March 28 2019, Weekly News Digest

structured debt

News Comments Today’s main news: Klarna launches open banking platform. SoFi re-engineers home loans. Apple’s new credit card. OakNorth secures guarantee of $133M. Qupital raises $15M to bumrush China. Today’s main analysis: Arbuthnot Banking Group audited final results for 2018. Today’s thought-provoking articles: U.S. yield curve, new fintech products. Cities with most overleveraged mortgage debtors. Household debt. Expanding access to credit […]

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United States

SoFi Refreshes Home Loans, Making Home Buying Painless and Paperless (PR Newswire), Rated: AAA

Today, SoFi announced the refresh of its mortgage offering as SoFi Home Loans, complete with a reengineered process that helps people buy or refinance a home with an online application, no hidden fees, or prepayment penalties.

SoFi Home Loans offer competitive rates including affordable down payments, with as little as 10% down on loans up to $3MM, with no hidden fees or prepayment penalties. SoFi allows applicants to choose between four different loan terms and fixed or adjustable rates. Those interested in refinancing can choose between traditional mortgage refinancing, cash-out refinancing, and student loan cash-out refinancing. If SoFi Home Loans isn’t able to handle a loan request, SoFi provides an easy option to digitally transfer member information to its affiliate partner who may be able to help.

Apple’s new credit card keeps advisors guessing (Financial Planning), Rated: AAA

The Apple credit card is the latest offering by a Silicon Valley tech giant looking for a ready-made avenue into the financial services’ sector. While the new card mostly benefits loyal users of Apple products, it’s also an unwelcome reminder of an ever present question on the minds of wealth managers: Will the FAANG companies like Facebook, Amazon, Apple, Netflix and Alphabet continue their land grab of services historically provided by the financial services industry — and at what cost to traditional RIAs?

Ominously, a majority of investors considering switching financial services providers said they would consider banking with a tech company like Facebook, Google or Amazon if they could, according to a recent survey by Novantis.

US Yield Curve Inverts; New Products from FinTechs (PeerIQ), Rated: AAA

For the first time in 3,000 days, and with much anticipation, the 3-month and 10-year treasury curve inverted. The median time to a recession after this curve inverts is between 1 to 1.5 years. However, unprecedented interventions such as QE (and higher central bank holdings globally) make it difficult to draw hard and fast conclusions. Market participants are pricing in a 41% probability of an interest rate cut in the September meeting.

Source: PeerIQ; Bianco Research

New Products from FinTechs

FinTech innovation continues with new products from PeerStreet and Figure. PeerStreet has launched a 30-year loan to enable private investors to buy rental properties. Residential for Rent loans are targeted towards rental home operators. The rental market in the US has grown exponentially post-crisis people struggle to buy homes. The number of rental homes has grown from 36 Mn in 2006 to 43 Mn in 2017.

Source: FactTank, PeerIQ

2019’s Cities with the Most Overleveraged Mortgage Debtors (WalletHub), Rated: AAA

Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly falling after reaching their latest peak in November 2018, and are close to the lowest they’ve been in the past 3 decades. This makes 2019 a tempting time to buy a home. Some industry experts believe 2019 is friendlier toward buyers than sellers because of the lower rates.

Source: WalletHub

Household Debt – Mixed Signals (DBRS), Rated: AAA

The most recent Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York (the Fed) and Equifax Inc. (Equifax) showed that household debt rose for the 18th consecutive period during Q4 2018 to $13.5 trillion, $869 billion higher than the peak reached in 2008. This represented the third-smallest increase (0.24%) over the 18 consecutive periods of growth, partly because of decreasing mortgage loan debt during Q4 2018 to $9.2 trillion from $9.4 trillion at the end of Q3 2018 and flat levels of auto loan debt at $1.3 trillion for both Q3 and Q4 2018.

Expanding Access to Credit in the Land of New “Halves” (Lend Academy), Rated: AAA

Credit is one of the largest, most powerful, lucrative and important industries in the world. It also is one of the best tools for wealth creation – home ownership, small business ownership and growth, and, leveraged investing.  This is readily accessible for prime consumers with more options now than ever before. But for the other half of the country that is non-prime, options are still limited and in many cases non-existent.

Early pioneers of securitizations like SoFi, the scaling of marketplace lending like Lending ClubProsper and Best Egg, and new distribution models like Greensky and Affirm have contributed towards increasing comfort of these “new asset classes” that were mostly locked up in bank’s balance sheets.

There are a lot of new “halves” in today’s world.

Amount Delivers Seamless Digital and Mobile Lending Platform to TD Bank (PR Newswire), Rated: A

Amount, a technology provider for financial institutions, today announced a strategic partnership with TD Bank. TD Bank, a top ten U.S. bank, is leveraging Amount’s platform to power the bank’s TD Fit Loan, which launched in August 2018. This initial offering allows consumers to consolidate higher-interest debt, while helping TD meet growing consumer demand for a seamless digital and mobile lending experience. Through this partnership, TD and Amount will roll out additional offerings, as well as standalone tools addressing fraud, verifications and decisioning.

5 Freebies With Your Student Loans (NerdWallet), Rated: A

1. Career coaching

Who offers it: SoFi.

SoFi members have received over 15,000 coaching sessions to date.

4. Referral bonuses

Who offers it: Multiple refinance lenders.

  • Education Loan Finance offers $400 for each successful referral, as well as $100 for the loan applicant.
  • Laurel Road lets you split its $400 bonus however you and your referral see fit.
  • Splash Financial provides $250 apiece for both parties.

5. Charitable work

Who offers it: CommonBond.

If you prefer freebies that help others, CommonBond has a one-for-one social impact mission. For each loan the lender issues, it donates an amount based on a formula that funds a child’s education in a developing country through the nonprofit Pencils of Promise. Those donations have totaled over $1 million to date.

CNote Launches Wisdom Fund to Close Lending Gap for Women (PR Newswire), Rated: A

Women are the fastest-growing group of entrepreneurs in the U.S. Yet less than 5 percent of small business lending—only $1 in $23—goes to women. CNote aims to fix this disparity with the Wisdom Fund, a new impact investment opportunity launching today.

Investors in the Wisdom Fund will earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Email wisdomfund@mycnote.com to learn how you can help fund more women-owned businesses today.

Women seeking loans should contact a participating CDFI. Partners in the Wisdom Fund’s first phase include:

  • Carolina Small Business Development Fund, which provides small business loans and financial training to startups, existing businesses and community organizations in North Carolina.
  • LiftFund, a Texas-based organization that empowers underserved entrepreneurs with capital and support services in 13 states.
  • TruFund, a national nonprofit organization that provides affordable capital to small businesses and nonprofits in AlabamaLouisiana and New York.

Study Finds 70% of Americans Would Share More Personal Data for Fairer Credit Decisions (PR Newswire), Rated: A

More than half (54%) of loan applicants don’t even have a clear understanding of why they receive the interest rate they do from a lender, while a majority (70%) say it is difficult finding lenders who will look at them as something other than their credit score.

  • 7 in 10 American adults (71%) wish there was another way to prove themselves to credit lenders outside of the standard credit score.
    • Hispanics (82%) and African Americans (81%) are more likely than Whites (67%) to want lenders to look at additional factors in lending decisions.
  • 77% believe more data is better when evaluating potential borrowers’ credit.
  • 71% would be willing to share more personal data with a lender if it resulted in a fairer credit decision. The motivation is even higher among middle-class earners. 79% of people making $50,000 to $75,000 would share more personal data to prove their creditworthiness, compared to 66% of people making over $100,000.
  • 84% think their bank should use modern technology to assess their creditworthiness.
    • Specifically, about half of loan applicants (53%) would like their ideal lender to use machine learning to make fairer credit decisions.
    • More than 2 in 5 (42%) would like their ideal lender to use machine learning to make the credit for homeownership more accessible to everyone.
    • Surprisingly, older generations want newer technology even more. Baby boomers and seniors (83% and 87%, respectively) wanted their banks to use new technologies to score them, compared to 79% for Millennials and Gen Zers.

Survey: Alternative Data Sharing (Urjanet), Rated: B

Urjanet surveyed more than 300 U.S.-based adults to assess consumer sentiment around alternative data sharing in the lending process. Key findings include:

  • A majority of consumers have multiple alternative sources of payment history
  • Alternative data sharing represents a huge opportunity for lenders to drive financial inclusion
  • Most consumers (59%) are willing to share utility and telecom data to boost chances of approval

SigFig launches platform to help retail banks sell financial products (Investment News), Rated: A

SigFig, the financial technology firm that developed digital advice platforms for several large financial institutions, wants to help banks automate more than investment management.

Technology to Play Crucial Role in Preparing ABS Professionals for Next Economic Cycle (ABL Advisor), Rated: A

An overwhelming majority (90 percent) of asset-backed securities (ABS) professionals feel that adopting new technologies will be important to preparing their businesses for the next economic cycle, according to Capital One’s sixth annual survey at SFIG Vegas 2019.

The survey also revealed that ABS professionals believe the biggest risks to their businesses are uncertainty around regulatory risk and increased credit risk, both at 29 percent. However, despite regulatory risk being a top concern, the industry’s apprehension has nearly cut in half over the last two years. In 2018, 48 percent noted regulations were the biggest risk to their businesses while 58 percent thought so in 2017. Additional top-of-mind concerns for 2019 include increases in interest rates (18 percent) and increased competition (17 percent).

TrustToken’s Stablecoin Now Available On Cred’s Crypto Earning Platform (BlockTribune), Rated: A

Asset tokenization platform TrustToken has announced a strategic partnership with crypto lending platform Cred.

Founded by former PayPal financial technology veterans, Cred is a decentralized global lending and borrowing platform that allows stablecoin issuers, exchanges and wallets to provide valuable earn and lending services worldwide.

Fintech in Brief: Update on Legal Challenges to OCC Fintech Charter (JDSupra), Rated: A

On March 19, 2019, the New York State Department of Financial Services (“NYDFS”) filed a brief in opposition to the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss the NYDFS’ lawsuit challenging the OCC’s statutory authority to grant special purpose national bank charters to Fintechs (the “Fintech Charter”). The brief in opposition signals that the NYDFS will continue its opposition to the Fintech Charter under the leadership of Acting Superintendent Linda Lacewell, who replaced outgoing Superintendent Mari Vullo in February. In opposing the OCC’s motion to dismiss, the NYDFS argued that it has standing to challenge the Fintech Charter, the matter is ripe for judicial review, and its claims are not time-barred. The NYDFS also argued that the OCC’s interpretation of the “business of banking” is not entitled to Chevron deference and “should be invalidated in its entirety.”

Mortech Partners with Roostify for Enhanced Online Mortgage Experience (Business Wire), Rated: A

Today, Mortech, a Zillow Group business providing mortgage technology solutions for mortgage lenders and secondary market teams, announced a new partnership between Mortech’s product and pricing engine (PPE) and Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans. The strategic partnership will integrate two proven mortgage technology solutions to improve the digital mortgage experience for many industry-leading lenders.

Finastra brings community banking services outside the branch with the launch of Fusion Digital Front Office (Finastra), Rated: A

Finastra has launched Fusion Digital Front Office, an innovative tablet-based banking platform that enables community banks and credit unions to take services directly to the consumer, outside of the branch. The solution provides a simple gateway to manage account origination, sales and service, and transaction processing from any remote location.

Huobi’s US Arm Launches Institutional Group for OTC Crypto Trading (CoinDesk), Rated: A

“We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,” such as token lending and over-the-counter (OTC) trading, in the coming months, he added.

Elevate Named as a Finalist for LendIt Fintech 2019’s Financial Inclusion Award (AP News), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2019. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

J.D. Power ranks Regions among top alternative lenders for personal loans (Biz Journals), Rated: B

Birmingham’s largest bank has ranked among the top alternative lenders in the U.S. for providing personal loan satisfaction through digital applications.

United Kingdom

ARBUTHNOT BANKING GROUP (“Arbuthnot”, “the Group” or “ABG”) Audited Final Results for the year to 31 December 2018 (Morningstar), Rated: AAA

FINANCIAL HIGHLIGHTS

·      Profit Before Tax £6.8m (2017: £2.5m)

·      Underlying profit before tax £7.4m (2017: £3.2m)

·      Operating income increased by 24% to £67.9m (2017: £54.6m)

·      Negative earnings per share 134.5p (2017: positive 43.9p)*

·      Continuing earnings per share 38.0p (2017: 14.0p)

·      Underlying earnings per share 40.3p (2017: 17.6p)

·      Final dividend per share 20p (2017: 19p), an increase of 5%

·      Total full year dividend per share 35p (2017: 33p)

·      Bonus share issue to create new class of non-voting shares

·      Net assets £196m (2017: £236m)

·      Net assets per share 1283p (2017: 1547p)

·      Underlying return on deployed equity 5.6% (2017: 4.2%)

Consolidated statement of financial position

 

At 31 December

2018

2017

Note

£000

£000

ASSETS

Cash and balances at central banks

17

405,325

313,101

Loans and advances to banks

18

54,173

70,679

Debt securities at amortised cost / held-to-maturity

19

342,691

227,019

Assets classified as held for sale

20

8,002

2,915

Derivative financial instruments

21

1,846

2,551

Loans and advances to customers

22

1,224,656

1,049,269

Other assets

24

12,716

20,624

Financial investments

25

35,351

2,347

Deferred tax asset

26

1,490

1,527

Interests in associates

27

– 

83,804

Intangible assets

28

16,538

15,995

Property, plant and equipment

30

5,304

3,962

Investment property

31

67,081

59,439

Total assets

2,175,173

1,853,232

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital

37

153

153

Retained earnings

38

209,083

237,171

Other reserves

38

(13,280)

(949)

Total equity

195,956

236,375

LIABILITIES

Deposits from banks

32

232,675

195,097

Derivative financial instruments

21

188

931

Deposits from customers

33

1,714,286

1,390,781

Current tax liability

236

705

Other liabilities

34

18,549

16,239

Debt securities in issue

35

13,283

13,104

Total liabilities

1,979,217

1,616,857

Total equity and liabilities

2,175,173

1,853,232

Read the full report here.

Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort (Forbes), Rated: AAA

Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.

Tech Nation and Dealroom data has also revealed that the U.K. has attracted a whopping $7.9 billion in funding in 2018 and closed the gap for exits of venture-backed companies with the U.S. As well as this U.K. sales, IPOs and mergers were worth $40 billion – ahead of every other European country – which points to the success of the tech sector as a whole in the country.

OAKNORTH ANNOUNCES BRITISH BUSINESS BANK ENABLE GUARANTEE OF £133M (Business Leader), Rated: AAA

OakNorth has today announced its participation in the ENABLE Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank. OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.

The ENABLE Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

Inside OakNorth’s plan to take its lending technology global (Tearsheet), Rated: A

As a challenger bank, OakNorth charts a different course. While Revolut, Monzo, and N26 focus on putting their digital current accounts in the hands of millions, OakNorth doesn’t even offer a current account. While other challengers are racing to acquire banking licenses all over the world, OakNorth is happy with just a UK license.

OakNorth is also posting profits while other challengers aren’t.  The bank announced a £33.9m profit for 2018, up 220 percent from 2017.

OakNorth provides debt financing to entrepreneurs in growing businesses, lending £0.5M to £40M to profitable, scale-up, British businesses. To fund its underwriting, OakNorth offers digital savings accounts. It currently has 40,000 customers with digital savings accounts and has lend £3 billion in under four years.

Successful UK Payday Lender Western Circle Limited Begins Offering Personal Loans Online (Finger Lakes Times), Rated: A

Western Circle Limited has made a name for itself by offering responsible payday loans online. Their decision to branch out into the personal loans market through the new brand PersonalLoansNow.co.uk was well received by their customers.

Five last-minute IFISA ideas (P2P Finance News), Rated: A

THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.

FINTECH LAUNCHES AI LOAN COMPARISON SERVICE (Business Cloud), Rated: A

Loan marketplace Monevo has launched a new platform to give consumers comparisons of pre-approved loans.

Based in Macclesfield, the business is a licensed credit broker for personal and business loans and is Europe’s largest personal loan marketplace.

An Alternative Approach (IFA Magazine), Rated: A

When it comes to asset allocation, advisers constantly face the challenge of finding real diversification in client portfolios. Sue Whitbread met with Matthew Ardron and Benedict Yung of Basset & Gold Group, to talk about their approach of offering fixed rate bonds that invest in alternative lending.

Half of Brits running out of cash before payday – pushing them to rogue lenders (Mirror), Rated: A

Exclusive research for Mirror Money shows by the end of this month, those turning to payday loans will have shelled out more than £214million – that works out at £28 per second

P2P to have strong presence at Innovate Finance Global Summit (P2P Finance News), Rated: B

FOUNDERS of the ‘big three’ peer-to-peer lenders are among the confirmed speakers at Innovate Finance Global Summit (IFGS), which takes place next month at London’s Guildhall.

Giles Andrews of Zopa, Samir Desai of Funding Circle and Rhydian Lewis of RateSetter are all participating in various sessions at the fintech industry trade body’s flagship conference on 29-30 April 2019, which marks the start of UK Fintech Week.

Other confirmed speakers from the P2P world include Zopa chief executive Jaidev Janardana, ArchOver’s Angus Dent, Ali Celiker from British Pearl and Roxana Mohammadian-Molina from Blend Network.

China/Hong Kong

Hong Kong SME financing platform raises $ 15m for China push (Finextra), Rated: AAA

Hong Kong-based online SME trade financing platform Qupital is targeting the mainland after closing a $15 million Series A funding round led by CreditEase FinTech Investment Fund.

Consumers hunger for loans, lenders popping up everywhere (Shine), Rated: AAA

Qin Shuifeng, 30, who lives in the suburban district of Jiading, went to a branch of the Postal Savings Bank of China in 2016 to seek a loan for home improvements.

The lender granted her and her husband a credit line of 1 million yuan (US$148,600), of which they drew 600,000 yuan, with an interest rate 10 percent higher than the benchmark rate.

Competition 

The central government has issued a series of policies favorable to consumer lending since the second half of 2018.

Still, risks remain. To realize sustainable development, players need to build strong operational and risk control capabilities, either by themselves or in partnership with financial technologies firms.

European Union

Klarna Launches Open Banking Platform (PR Newswire), Rated: AAA

Today, Klarna, one of Europe’s leading payment providers and the global market leader in payment initiation services, announces the launch of its own Open Banking Platform. This platform will enable access to more than 4,300 European banks through a single Access to Account (XS2A) API in line with Payment Services Directive (PSD2). Klarna’s XS2A API is the most established and proven solution that has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort.

This platform provides a fully proven and mature infrastructure, superior market coverage and connectivity, with access to 99% of online banking consumers currently across 14 European markets. By opening up its own advanced technology and capabilities, Klarna is simplifying and democratising access to APIs securely. Both established and newer banks and fintechs as well as other licensed businesses, will be able to build smart and personalised offerings that meet the evolving needs of consumers across Europe. Klarna has been one of the leading proponents of the PSD2 legislation and believes high-quality APIs will drive innovation and competition but most importantly will empower consumers across Europe with increased choice, control and clarity on their finances, and ability to access better products.

International

Has Alternative Lending Seen Its VC Peak? (PYMNTS), Rated: AAA

U.S. FinTech funding reached its highest level in five years in 2018, according to CB Insights data published last month, hitting $11.89 billion. Yet at a time when analysts say VCs are focusing more on late-stage investment, alternative lenders are having a tougher time securing funding, particularly market newcomers in a crowded market.

But there is evidence that investors’ appetite for alternative lending startups is on the wane, even as overall FinTech funding continues to climb — and as the success of the alternative lending market grows, too.

eToro buys blockchain company Firmo (Fintech Futures), Rated: A

Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate

Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

Battlestar Capital Earns 30% Returns For Holding Crypto (ChainBits), Rated: B

Battlestar Capital, which is a blockchain staking-as-a-service company, revealed that customers could potentially earn up to 30 percent on a yearly basis when it comes to their idle crypto holdings. Here is everything about the startup’s claims in a nutshell.

In an interview, the company said that it has teamed up with crypto lending startup called Celsius Network in an attempt to launch a large-scale service capable of offering potentially high returns.

Australia

APRA Proposes Stricter Credit Risk Management Standards (Regulation Asia), Rated: AAA

The revised prudential standard enhances board oversight of credit risk and requires more intensive credit checks on borrowers. APRA also highlights the risks of P2P originated loans.

India

New modes of lending, fund raising on cards (The Asian), Rated: AAA

In a bid to change the market dynamics of the banking and financial sectors, the Reserve Bank of India (RBI) will soon come up with alternative models of lending and capital raising for the sectors.

Asia

Bukalapak partners three P2P lenders to provide loans for offline businesses (Tech in Asia), Rated: AAA

Bukalapak is teaming up with Indonesian P2P lending startups Amartha, Modalku, and PohonDana to provide loan facilities in a program called Modal Mitra. The loans are available to offline vendors who are part of the company’s Mitra Bukalapak program.

The financing offered through Modal Mitra ranges between US$70 and US$700 and can be paid back in up to six months, with weekly installments starting from US$6. It can only be used for purchases in the Mitra Bukalapak app.

Eurasia

Russian fintech launches digital bank 131 (Finextra), Rated: AAA

Bank 131, a new digital bank focused on Russian companies and entrepreneurs that work for global internet companies and/or buy from global ecommerce companies with a Russia presence, announced today they have received their banking license from authorities – the first and only new bank to do so in four years.

Canada

Shadow banking has grown, but risks to financial systems are modest (Advisor’s Edge), Rated: AAA

Canada’s shadow banking sector has grown substantially in recent years, but the overall financial system has grown even faster, keeping risks in check, suggests a new report from the Bank of Canada.

In the report, the central bank details the results of its monitoring of so-called “non-bank financial intermediation” (NBFI), also known as shadow banking. Among other things, the report finds the Canadian NBFI sector has grown by 1.7 times since 2006, driven by strong growth in investment funds, securities financing transactions and private lending.

Authors:

George Popescu
Allen Taylor

The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

Thursday February 7 2019, Weekly News Digest

origination costs

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

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

origination costs

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United States

United Kingdom

European Union

International

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United States

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

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

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1

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

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

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

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

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

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

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

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

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

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

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

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

Source: Online Lenders Alliance

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

Read the full Online Lenders Alliance response here.

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

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

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

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

1. BankMobile — Hooked Up With T-Mobile

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

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

2. Chime — Super Slick App

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

3. Finn — Chase Bank’s Millennial Play

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

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

4. Marcus — Sucking Up Your Customers

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

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

5. N26 — Platform Maestro

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

6. Revolut — The Amazon of Banking

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

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

7. SoFi Money — Join The ‘Waitlist’

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

8. Varo Money — Almost OCC Approved

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

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

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

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

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

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

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

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

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

Key Findings

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

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

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

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

United Kingdom

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

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

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

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

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

Source: Business Insider Intelligence

Read the full report here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

European Union

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

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

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

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

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

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

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

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

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

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

International

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

Milestones achieved this month (total volume since launch):

Source: P2P-Banking

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

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

Source: Business Insider Intelligence

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

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

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

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

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

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

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

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

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

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

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

Australia

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

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

APAC

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

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

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

Africa

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

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

Canada

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

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

iBank Products & Services:

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

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

Authors:

George Popescu
Allen Taylor

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

The Rise of Crypto Lending, a Natural Progression of Peer-to-Peer Financing

Nexo

The rise of new technologies often give rise to new business models. The peer-to-peer lending space is just over a decade old and still have much to grow into. However, not long after the first P2P lender–Zopa in 2005–opened its doors, a new technology that promises to challenge traditional ways to deliver financial services emerged. […]

Nexo

The rise of new technologies often give rise to new business models. The peer-to-peer lending space is just over a decade old and still have much to grow into. However, not long after the first P2P lender–Zopa in 2005–opened its doors, a new technology that promises to challenge traditional ways to deliver financial services emerged. That technology was the blockchain, a distributed ledger that underlies the cryptocurrency Bitcoin. Since then, other blockchains have been created along with new business models to suit. As it stands in 2018, crypto lending has not made a big dent in P2P lending services, but the potential is there. This article will highlight some of the more significant blockchain-based P2P lenders, which we hope will inspire a new look at technological innovation in this space.

Think of crypto lending like you would the banking industry: Even if Capital One provided perfect products at every turn, there would still be plenty of room for JPMorgan Chase, Citigroup, and Bank of America. There would still be room for the hundreds of other banks that compete for customers.

The companies listed here are not ranked in any manner. Rather, they=se are just some of the choices available for consumers in the market for cryptocurrency loans.

1. SALT (Secured Automated Lending Technology) Lending

One of the best benefits crypto-based lending has to offer is that a lessened importance on traditional credit scores as a factor for risk assessment. SALT Lending touts blockchain-based assets as “the perfect form of collateral.” The company is using this fact to “dramatically reduce the complexity and cost of the loan process.” SALT operates under Regulation D and, in lieu of credit checks, the company does AML and KYC verifications.

Offering three tiers of product, SALT’s loans start at $5,000 and go as high as $250 million. Loan percentages run between 12 and 22 percent APR, but the borrower retains the value of the collateral currency claiming any gains and losses that happen over the life of the loan. SALT accepts Bitcoin, Ethereum, Litecoin, and Dogecoin as collateral, and funds loans in USD.

One fact that could be a significant factor when deciding to use the SALT Lending platform is that loans are not transferable on the blockchain, but through existing financial channels. Thus, they become securities.

It’s not foolish to base a good bit of faith in a company that has proven players on its team. Founder Erik Voorhees was also involved in founding several other crypto websites prior to starting SALT Lending. Among these include Satoshi Dice, which he later sold, Coinapult, and ShapeShift.

2. ETHlend

Unlike SALT Lending, Estonia-based ETHlend is a fully decentralized P2P platform built on the Ethereum blockchain for lending Ether as tokens for collateral. Some insiders fear that platforms that allow their loans to become securities might run the risk of being swallowed up by banks.

ETHlend lends Ethereum, Bitcoin, their own LEND tokens, and DAI tokens, as well as 180+ other Ethereum-based tokens. The company offers address-to-address loans that are sent within minutes, with no middle men, assuring that no one, not even Ethlend, can stop one’s lending or borrowing. The company plans to expand beyond Ethereum to other distributed ledger platforms in Q3 of 2019.

The company’s interest rates range from .25 to five percent MPR, and all transactions are carried out on digital wallets. Borrowers that transact in the LEND token can get a no-fee loan.

Announced earlier this week, Aave is a tech-based company designed to expand on the offerings of centralized fintech companies like PayPal and Coinbase. Aave Pocket, Aave Gaming, and Aave Lending (SaaS) are among the offerings this expansion adds to the platform.

Unfortunately, the service is not yet available everywhere including a block to U.S. citizens.

3. Nexo

A new kid on this block is Nexo, and being a new kid means that they are doing things in a new manner. Founded in Zug, Switzerland—even more of an “EF Hutton” mention than Estonia—in 2017, Nexo promises the world’s first instant crypto-backed loans. Available worldwide, Nexo loans start at $1,000 and top out at $2 million.

The process is an easy one.

  • Log on to the website.
  • Verify your account
  • Deposit crypto assets into Nexo wallet
  • Withdraw loan to your bank account

There will be brief pauses while the borrower is verified—the company complies with the highest AML and KYC (provided by Onfido) standards—and while your deposit is confirmed on the blockchain. Overall, the Nexo process reads like a rather quick and seamless process.

The platform loans Euros, USD, and Tether while accepting Ether, bitcoin, Bincance coin (BNB), and Nexo as collateral currency. The interest rate is eight percent if the collateral currency is Nexo and 16 percent for all others. Nexo assets are stored in multi-signature wallets, more than one multiple cryptographic keys are necessary to gain access, and cold storage (wallets not connected to the Internet) at BitGo and PrimeTrust.

4. LendingBlock

LendingBlock predicts that, as digital assets grow as an asset class, demand for hedging, swaps, repurchases, and short selling will increase. The currency crypto market has more than $500 billion in assets circulating with less than one percent used as collateral. That leaves lots of room for growth.

Touted as the first cross-chain lending platform for the crypto economy, the company promises a product that will help its customers access secure, transparent, and fair crypto-to-crypto loans. Not a lender itself, LendingBlock provides the platform upon which parties can enter P2P contracts. The company acts as agent for both lender and borrower, as well as security trustee of the collateral. This ensures that the borrower doesn’t face any uncovered credit risk to the lender.

All collateral deposits are held in cold storage. Those who think regulation will be necessary before the crypto market can fully mature can take comfort in the fact that the company is focused on becoming a regulated business. They have submitted the full regulatory application to the country of Gibraltar and await the regulator’s response. They have also begun regulatory processes with the Financial Conduct Authority in the UK, and the Securities and Exchange Commission and Commodities Futures Trading Commission in the United States.

Basing the platform on its own token (LND), which is used to make payments and receive interest on loans, allows the company to reduce the cost of exchange fees and makes it easier to manage interest payments. The use of smart contracts reduces expenses, risks, and complexity, which makes for lower costs for borrowers and higher returns for the lenders.

5. BlockFi

New York-based BlockFi might be the ideal platform for Americans who want to secure USD loans with Bitcoin and Ethereum, provided that said Americans live in any of the 44 states where the company is currently conducting business.

The attractive thing about the BlockFi platform is that it seems easy enough for a lay person to understand without any kind of financial advice. A borrower needs to meet only two requirements to qualify for a loan: They can have no liens or bankruptcies on their record, and they must have at least $15,000 of crypto assets between their Bitcoin and Ethereum portfolios.

If those criteria are met, the customer can borrow up to 35 percent of their crypto asset value, with loans ranging from $2,000 to $10 million. Interest rates go from 12 to 14 percent APR, and there is an added fee of one to four percent of the loan value. Borrowers can take a loan in Bitcoin, Ethereum, or Litecoin.

Unlike other crypto-based lenders on this list, BlockFi does not have its own coin or token.

6. Unchained Capital

Texas-based Unchained Capital could very well be the platform of choice for those who want to liquidate their Bitcoin while maintaining it and seeing it go to work in the world.

Not only is the team at Unchained Capital in the market to make money as a lender, they have an idealistic side as well. Noting that 60 percent of Bitcoin sits around and does nothing, they have a goal to circulate it and use it to strengthen the platform. The company was founded by people who believe cryptocurrencies can change the world only if they’re useful.

The Unchained Capital team has designed its personal loans to be ideal for people who are looking to make large purchases, who hope to avoid tax events, and who want to invest. Their commercial loans are geared to companies that want to free up capital, expand their businesses, buy expensive equipment, and balance their portfolios.

Unchained Capital does not have its own cryptocurrency.

7. Other Companies to Consider

The crypto lending space is expanding. New lenders seem to be popping up quite often, which means that some people in the cryptocurrency space, at least, see a market for crypto-backed lending. Despite the market having taken a downturn in 2018, rebounding from the bull run last year that catapulted Bitcoin to $20,000 in December, this space is expanding. Lately, Bitcoin has been holding around the $6,500 mark. Since the majority altcoins tend to follow Bitcoin’s price, that means the market as  whole is down, yet more crypto lenders are ambling to get in the door.

Some of the other companies in the crypto lending space that might be worth checking out include BitBond, Credible Friends, Bitfinex (a crypto exchange that facilitates crypto financing transactions between parties), Celsius, Poloniex (another cryptocurrency exchange that allows traders to lend to other users), CoinLoan, Nebeus, GetLine, and BTCpop.

Authors:

Written by Paul Keenan and Allen Taylor.

Allen Taylor

Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Thursday May 24 2018, Daily News Digest

Small Dollar SBA Loans

News Comments Today’s main news: PeerStreet funds $1B in loans. Elevate Credit celebrates 2M non-prime customers. Assetz Capital raises rates. Australian government lends $700K to HashChing. Plaid expands into Canada. Today’s main analysis: Fintech gave brick-and-mortar SBA lender an edge. Today’s thought-provoking articles: How much mortgage borrowers can save by shopping around. Competition is pushing banks to change strategies. Millennials dominate […]

Small Dollar SBA Loans

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United States

PeerStreet Funds One Billion in Loans (Business Wire) Rated: AAA

PeerStreet, an award-winning platform for investing in real estate backed loans, today announced that one billion in loans have been funded through its marketplace since launch. This announcement comes after the company announced the close of its $30 million Series B last month.

Elevate Credit Celebrates Its 2 Millionth Non-Prime Customer (Citizens Tribute) Rated: AAA

Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”) today announced it has served more than two million non-prime customers in the US and UK, saving them more than $3 billion versus the cost of payday loans. Elevate’s three products, RISE, Elastic and Sunny, employ advanced data and analytics to provide safe access to small-dollar credit to the two-thirds of Americans who cannot get personal unsecured loans from their banks.

Mortgage Borrowers Could Save the Most Ever by Shopping Around (Lending Tree) Rated: AAA

We calculate the Mortgage Rate Competition Index weekly as the median spread between the lowest and highest APR offered by lenders in our marketplace.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending May 13, 2018, the index was 0.66, up 0.03 from the previous week.
  • How big of a deal is it to get a mortgage rate that’s 0.66% lower than the competition? Over 30 years, that could translate to $30,617 in savings on a $300,000 loan —over 10% of the total loan amount (see Mortgage Savings Tracker graphic below).
Source: Lending Tree

Lenders are ramping up competition as spring season heats up (MPA Magazine) Rated: A

The spread between the lowest median APR offered by mortgage lenders and the highest rate increased last week.

That’s according to the LendingTree Mortgage Rate Competition Index which analyzes rates offered by lenders on its platform. The spread for purchase loans increased from 0.23 a year ago to 0.66 last week and was up 0.03 from a week earlier.

For refinances the spread was 0.71, up from 0.67 a week earlier.

Here’s why GreenSky is one of the year’s most-anticipated fintech IPOs (Proactive Investors) Rated: A

The financial technology company plans to issue more than 34 million shares priced between US$21 and US$23. It’s scheduled to price the shares after the market close Thursday. At the midpoint price, GreenSky may raise as much as US$748mln.

The fintech has received US$560mln in funding from big-name investment firms such as PIMCO, TPG, Iconiq Capital and Fifth Third Bank.

OCC gives banks green light to compete with payday lenders (American Banker) Rated: A

The Office of the Comptroller of the Currency is shaking up the world of short-term lending by encouraging banks to offer high-interest rate loans to subprime borrowers as an alternative to payday lenders.

In a major break from past regulators, Comptroller Joseph Otting said Wednesday that he wants banks to originate loans of $300 to $5,000 to borrowers with FICO scores of 680 or below, with few other parameters beyond “sound underwriting.” The new OCC guidelines could open a $90 billion market to financial institutions.

Pew Commends OCC for Encouraging Banks to Provide Installment Loans (PR Newswire) Rated: A

The Pew Charitable Trusts today praised the Office of the Comptroller of the Currency (OCC) for formally encouraging banks to offer their customers safe, affordable small-dollar installment loans.

Millions of American adults, many of whom are low income and have damaged credit, spend more than $30 billion a year to borrow small amounts of money from payday and other high-cost lenders that operate outside the banking system. Pew research indicates that, given the opportunity, 8 in 10 payday loan borrowers would prefer to get credit from their banks or credit unions.

Americans Are Prioritizing Phone Payments Over Car Loans (Bloomberg) Rated: A

U.S. consumers are more devoted to their mobile phones than their automobiles.

The sea change has taken place over the last few years as mobile devices become an integral tool not just for communication with loved ones or employers, but also everything from banking to dating to watching TV and listening to music. As cars grow relatively less important, borrowers struggling to pay back their loans on time are increasingly prioritizing payments on the latest iPhone instead of making sure they hold on to their pickup or coupe.

Small businesses becoming more satisfied with fintech lenders (American Banker) Rated: A

Small-business owners are becoming increasingly satisfied with online lenders largely because they will often make loans that most banks won’t.

That was a key takeaway from an annual survey of small-business credit trends released Tuesday by the 12 Federal Reserve banks.

While small-business borrowers are generally more satisfied with banks — their rates are substantially lower — the survey found that the gap is narrowing.

Radius Bank Debuts Rewards Program with Enhanced Benefits For Loyal Customers (Crowdfund Insider) Rated: A

Radius Bank, a virtual bank focused on providing clients with banking solutions to better financial health, announced on Tuesday the launch of its new rewards program that offers enhanced benefits, such as increased transaction limits and cash back opportunities, for loyal customers.

According to Radius Bank, the rewards program is tiered into three levels based on criteria such as personal deposit balance and the longevity of the relationship clients have had with the Bank.

Loeb Seeks to Raise $ 400 Million for New Blank-Check Company (Bloomberg) Rated: A

Activist investor Dan Loeb is seeking to raise as much as $400 million to acquire financial technology firms via a so-called blank-check company.

The firm, Far Point Acquisition Corp., will be led by Tom Farley, who stepped down Monday as president of the New York Stock Exchange. Credit Suisse Group AG and Bank of America Corp. are leading the share sale, according to a regulatory filing Tuesday.

Far Point intends to issue 40 million units at $10 apiece under the terms of the offering. Each unit consists of one Class A share and one-third of one redeemable warrant.

How fintech gave this SBA lender an edge (American Banker) Rated: AAA

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

Seacoast, which became a SmartBiz client late last year, booked $700,000 of gains from selling SBA loans in the first quarter, tripling what it reported a quarter earlier and surpassing its total for all of 2017 by 40%.

Kleffel, who said loans generated through SmartBiz hit 127% of targeted volume in the first quarter, predicted that the effort should allow Seacoast to become one of the SBA’s top 100 7(a) lenders for the fiscal year that ends on Sept. 30. To do so, Seacoast would likely have to increase year-over-year 7(a) originations by more than 60%, according to SBA data.

Source: American Banker

CREXi raises $ 11 million to bring commercial real estate out of the Dark Ages (Tech Crunch) Rated: A

CREXi — the CRE stands for “commercial real estate” — has been around since 2015, but recently announced an $11 million Series A as well as some interesting user numbers. Key investors include Jackson Square Ventures, Manifest Investment Partners, Lerer Hippeau, Freestyle Capital, TenOneTen Ventures and Founder Collective. The company has managed more than 100,000 “properties brought to market” on its platform and they have 200,000 users per month. They see more than 6,000 properties listed on the site each month.

 

American banks had their most profitable quarter ever (CNN) Rated: A

Bank profits soared by 28% during the first three months of 2018 to $56 billion, according to statistics published by the FDIC on Tuesday.

The stellar results were released hours before the House of Representatives is expected to pass legislation that would roll back some rules on community banks and regional lenders designed to prevent another financial crisis.

 

NEA Welcomes Jonathan Golden as Partner; Announces Several New Hires (Pilot Online) Rated: B

New Enterprise Associates, Inc. (NEA) today announced that Jonathan Golden has joined the firm as Partner. Golden, an experienced technology investor and the first product manager at Airbnb, will be based in the firm’s Menlo Park, Ca., and San Francisco offices. The firm also named Matthew McAviney, M.D., Tak Cheung, M.D., and Santhosh Palani, Ph.D., as Principals on the healthcare team.

As an active angel investor, Golden has backed numerous early-stage companies including Bowery Farming, Coinbase, Everlane, Funding Circle, and Tile, among others.

Trelix Now Provides End-to-End Mortgage Fulfillment with the Addition of its Closing Services Solution (Altisource) Rated: B

Trelix quality control and other due diligence products and services across the loan origination and securitization lifecycle, today announced the launch of its closing services solution that helps mortgage lenders efficiently and properly execute and settle their loans. With the addition of closing services, Trelix now provides a full suite of end-to-end fulfillment services for its customers.

United Kingdom

Assetz Capital Announces Its First Ever Rate Increase Across Access Accounts (Crowdfund Insider) Rated: AAA

UK-based peer-to-peer lending platform Assetz Capital announced last week its first ever rate rise across its access accounts. The online lender reported that the rate increase, which takes effect from 1st May 2018 until further notice, will take target interest rates for the Quick Access Account and 30-Day Access Account from 3.75% to 4.10% and from 4.25% to 5.10%. Assetz Capital also revealed both new and existing investors will benefit from the target interest rate boost, and it applies to both ISA-wrapped and non-ISA accounts.

New SME funding platform launches (Peer2Peer Finance) Rated: A

A NEW funding platform is aiming to make it easier for small- and medium-sized (SME) businesses to access loans, equity and grants.

The online platform has been created by Swoop, which is a rebrand of BizFly.

The firm says it holds a database of over 400 lenders.

P2P lenders accessible via the platform include Funding Circle, Zopa, Growth Street, RateSetter and MarketInvoice.

“Manchester Can Be A Global Leader In Fintech” Say Policymakers (Business Up North) Rated: B

Further evidence of the optimism and ambition of the event comes from the business deals and opportunities that are created among this group of people. For example, Dan Rajkumar, chief executive of White Label Crowdfunding and Rebuildingsociety, and co-founder of the event, has announced the win of a new customer, AGPeer, which is launching a new peer-to-peer lending platform targeted at the agriculture sector.

 

European Union

Millennials dominate European P2P lending (Peer2Peer Finance) Rated: AAA

MORE THAN half of all European peer-to-peer lenders are millennials, new research has found.

Data from European P2P loans platform Robo.cash has shown that the younger demographic is steadily taking over the leading position from the older generation of investors.

Over the past six months, Robo.cash has noticed that its share of investors aged between 22 and 37 has grown to 53.9 per cent.

A Swedish startup has raised 10 MSEK to help Nordic banks attract millennial house buyers (Business Insider) Rated: A

Headed by Klarna veteran Pär Isaksson, the startup offers established banks – not exactly known for their innovative zeal – a one-stop-shop for streamlining their mortgage lending online, from user interface to operations.

The service is planned for launch in Sweden this fall, to be followed by the rest of the Nordics during 2019. To execute on that, the company is now raising 10 million Swedish krona ($1,2 m) from a number of profiles in Swedish finance, including Swedbank’s former CFO Göran Bronner.

International

Fintech competition is pushing banks to change strategies (Business Insider) Rated: AAA

It has become apparent that the space is evolving in a way that will see new technologies have an outsized impact in the next few years, according to a reportfrom Temenos and The Economist Intelligence Unit. Additionally, the report examined the impact of open banking and how banks are shifting their business models, among other things.

Source: The Economist

Here are some of the key takeaways from the report:

  • Tech and digitization will have a bigger impact than regulation. Forty-eight percent of banking executives think new technologies, such as blockchain and AI, will have the biggest impact on retail banks through 2020, while only 43% are most worried about regulatory fines.
  • Though open banking initiatives are the center of many recent stories, only 13% of respondents think those initiatives will have the biggest impact on retail banks.
  • In terms of evolving their business models, 61% of banks want to develop niche propositions for their own customers, followed by 54% wanting to maintain their own products and become an aggregator of third party-products, and 53% opting to open their services to third-party developers.

Access the report here.

Exclusive Interview with Alex Mashinsky, Celsius CEO and VoIP Innovator (Crypto Globe) Rated: A

During the recent Milken Institute conference debate, Alex Mashinsky really stood out as a harsh critic of the traditional banking system, and a strong believer in the future of cryptocurrency. He recently had the ICO for his crypto lending platform Celsius Network, but his involvement in the tech world dates a few decades back. In the 1990s, when Alex invented VoIP (Voice over Internet Protocol), he strongly believed that internet calls through a decentralized protocol could disrupt the business model of phone companies. It is now used by over a billion peopleacross the globe.

Vlad: About that, just a few weeks ago I was thinking that cryptocurrency could replace all the functions of a bank except for that of lending money to other parties. I guess it’s so much easier to follow tradition and go to the bank to get a loan each time you need a large amount of money. But then I saw you debating at the Milken Institute Conference. I found out about Celsius and was amazed that someone found a solution around it. So can you tell me how these crypto loans work?

Alex Mashinsky: They work exactly the same way as in the case of banks. There’s no magic involved, we’ve implemented a cryptocurrency-driven system which follows the same principles you find in a bank, only that you can deposit or lend funds in ways that are more stimulating from a financial perspective. We are fairer, more transparent, and operate on the blockchain.

International Digital Asset Platform (IDAP Token): Crypto Derivatives? (Bitcoin Coin Exchange) Rated: B

The Idap.io, which is a shorter name for the International Digital Asset Platform, has been planning to transform the cryptocurrency market with its new projects and ideas.

What Is International Digital Asset Platform?

This platform is a derivatives instrument that lets you access assets of the market by clicking. It has many tools that you will help you to find the best investments that you can make in the market and discover why you should make them.

You will be able to access crypto pairs, swaps, ICO venture funds and even P2P lending via this new platform.

Australia

Australian Government Backs Fintech HashChing with $ 700,000 Loan from Jobs NSW (Crowdfund Insider) Rated: AAA

HashChing, a Sydney-based home loan marketplace, has just announced a $700,000 loan from Jobs NSW. Deputy Premier and Minister for Small Business John Barilaro said the NSW Government had backed the Fintech which is expected to create 46 jobs over the next five years.

India

How Zerodha is reinventing the rules of lending with an age-old product (Your Story) Rated: AAA

The country’s third-largest brokerage Zerodha has received a lending licence from the RBI, and is now gearing up to launch operations by June end.

Loan against a security, be it a movable or immovable asset, is an age-old practice. While banks have traditionally occupied the largest piece of the lending pie in this space, there are others like non-banking finance companies that are also establishing themselves.

Loans against shares have been a popular product in the retail category, but of late, these loans seen some degrowth. Clocking a growth rate of 21.5 percent in FY2015, the growth of loans against shares grew by 16.5 percent in FY2017, according to the RBI Bulletin.

Chinese lenders out for a taste of India (The Economic Times) Rated: AAA

Several digital lending startups have been receiving a unique set of visitors in recent months: Chinese lending companies looking to set shop in the country. At least half a dozen Chinese financial-technology companies have held multiple meetings with the founders of digital lending startups in India for investment as well as partnership opportunities, according to domestic entrepreneurs involved in those discussions.

Chinese lenders facing regulatory heat in China due to
1 Restriction in lending rates
2 No fresh licences being given out to lending startups
3 Credit bubble causing ballooning NPAs

Sectors the Chinese could be interested in
1 Consumer lending
2 Instant personal loans
3 Peer-to-peer lending

Late last year, Chinese regulators cracked down on the micro-lending space, tightening lending rates to 36% annualised and withholding new licences for online lending startups.

Asia

P2P lending feared to trigger black credit (News Vietnam Net) Rated: AAA

After registering to borrow money on Tima.vn, a reporter, who acted as a borrower, was told to send some necessary documents via Zalo or Facebook. He was informed that he would have to pay the interest rate of 18 percent per annum to the company, not including the consultancy fee.

The reporter, when contacting vaymuon.vn, was told that he would have to pay the interest rate of 1.5 percent per month, plus the fee of VND2,000 a day for every VND1 million worth of loan, and the interest rate and fee may change at different moments.

The borrower was also warned that if he cannot pay debts, the lenders will be able to take necessary measures to collect debts – making public about the debt, selling the debt to third parties or suing before the civil court.

 

Canada

Dead fintechs don’t wear Plaid (Fintech Futures) Rated: AAA

San Francisco-based fintech app provider Plaid is expanding to Canada as its first international market.

Authors:

George Popescu
Allen Taylor

Tuesday March 13 2018, Daily News Digest

Lending Club Average

News Comments Today’s main news: RateSetter enrolls 5K IFISA accounts in first month. OnDeck makes CFO transition. Augmentum set to IPO. TD Auto Finance, AutoGravity partner. Ranger Direct arbitration proceedings come to a halt. Investly secures 500K GBP through Seedrs. Today’s main analysis: A visualization of America’s personal loans. Today’s thought-provoking articles: UBS banned from sponsoring Hong Kong IPOs. China’s credit […]

Lending Club Average

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United States

OnDeck Announces Chief Financial Officer Transition (PRNewswire), Rated: AAA

OnDeck today announced that the Company will appoint Kenneth (Ken) A. Brause as its Chief Financial Officer effective March 26, 2018, as part of a mutually agreed upon transition process between the Company and current Chief Financial Officer, Howard Katzenberg. Katzenberg will serve as an advisor to OnDeck until April 13, 2018, working closely with Brause to facilitate a smooth transition.

America’s personal loans visualized: income, principal, and credit scores (mediathinknum), Rated: AAA

Consider this: The average personal loan given out by loan giant Lending Club is for $15,000 given to a person with a sub-700 credit score and an income of $6,000 per month.

According to Experian, 73% of Americans die with an average debt balance of $61,554. This – on average – includes mortgage, credit card, auto, personal, and student loans. The average personal loan Americans take to the grave is $14,793.

That data is below and the results are fascinating and even daunting, especially for the apparent 73% of Americans who have a monthly payment to make. Read it and weep. Or make some payments.

Lending Club offers personal loans of up to $40,000. But that doesn’t mean everyone is asking for that much. Not does it mean that Lending Club is offering that much.

Interest rates are largely determined by credit score, but the average rate given out ranges from 12-14% with a peak high point in the 2013-2014 timeframe.

TD Auto Finance Partners with AutoGravity to Provide Enhanced Digital Car Buying and Financing Option (Business Wire), Rated: AAA

TD Auto Finance (TDAF), a subsidiary of TD Bank, America’s Most Convenient Bank, today announced a partnership with AutoGravity, a fintech provider modernizing the way consumers buy and finance automobiles. Through this partnership, indirect financing offers through TDAF will be made available to qualified auto buyers using AutoGravity’s digital platform to search for and finance their next vehicle from the convenience of their desktop or mobile device.

Santander Consumer USA And AutoGravity Work To Transform The Car-Buying And Financing Journey (PRNewswire), Rated: A

Santander Consumer USA Holdings Inc. (NYSE: SC) today announced it has reached an agreement with automotive technology leader AutoGravity to streamline and simplify the car-buying process for consumers. Through this agreement, Santander Consumer USA’s indirect finance offers will be available to AutoGravity customers nationwide through the AutoGravity mobile app.

BBVA Compass Express Personal Loan goes digital, opens to consumers in multiple states (BBVA Compass), Rated: A

BBVA Compass, the U.S. subsidiary of the global financial services group BBVA, now offers near instantaneous decisioning and potential same day funding for both customers and non-customers with the footprint wide1 opening of the fully digital BBVA Compass Express Personal Loan.

With the Express Personal Loan, customers and prospects can consolidate debt or fund large purchases with a low-interest personal loan that provides near instantaneous decisioning. Applicants with a BBVA Compass checking account can get same day funding upon loan approval. The loan, which represents months of effort across the entirety of the bank, underscores BBVA Compass’ drive to digital transformation and achieving excellence in customer experience.

The CIO Of The First Global Fintech Company On The Future Of Finance (Forbes), Rated: A

I recently caught up with the company’s chief information officer Bradley Strock, who has been in his role for three and a half years. We discussed PayPal’s transformation into a more customer-centric company, giving customers more choices of funding vehicles. We also covered how PayPal has successfully navigated the shift to mobile finance, resulting in a 50 percent increase in mobile payment volume in 2017.

In January of this year, Strock joined the ranks of board-level CIOs, as he commenced a directorship with $700 million revenue Elevate Credit, Inc., which provides online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700.

Peter High: Could you provide an overview of your role as CIO of PayPal?

Brad Strock: Most people are probably familiar with PayPal. We operate in over 200 markets around the globe. We are on a mission to democratize money and have had a great deal of success over the last couple of years. 2017 has been a great year in particular.

U.S. Fintech FinFit Announces $ 35 Million Senior Credit Facility With Ares Management (Crowdfund Insider), Rated: A

FinFit, a U.S.-based fintech that provides more than 80,000 American companies with a financial wellness benefit platform, announced on Monday the closing of a $35 million senior credit facility with Ares Management. The company stated it has the ability to increase the senior credit facility to $70 million and this capital raise follows a $16 million investment from Bison Capital Partners. Keefe, Bruyette & Woods was the exclusive financial advisor for the senior credit facility.

Colin Walsh of Varo (Lend Academy), Rated A

In this podcast you will learn:

  • How Colin’s background helped prepare him for his banking startup.
  • The differences he saw between what consumers wanted and what incumbent banks were delivering.
  • Why you need to offer a range of core products to move the needle on financial health.
  • How their banking partnership today enables Varo to offer banking products.
  • What banks are not doing well and how Varo is addressing this.
  • The profile of their typical customer.
  • How they are finding these customers.
  • How they are specifically helping their customers get a better handle on their finances.
  • Why Varo applied for a full national bank charter.
  • Details of the personal loan product they are offering today.
  • The traction that Varo has been getting.
  • Who Colin views as the main competition for Varo.
  • His vision for the future of Varo.

‘Women are not a target market’: Confessions of a former finance marketer (Tearsheet), Rated: A

Retail banks are missing out on $15 billion in global revenue thanks to a gender gap in access to checking and savings accounts.

A BNY Mellon report published last week in collaboration with the UN, cites flaws in design and marketing that make financial products less accessible to women than they are to men.

The report identifies gender gaps on other products; financial institutions are missing out on another $7 billion in credit card revenue, $14 billion in personal loans and $4 billion in housing, the report says.

Cloud Lending Solutions Recognized as Top 10 Best Performing Salesforce Solution Provider (Business Wire), Rated: B

Cloud Lending Solutions was recognized as a “Top 10 Best Performing Salesforce Solution Provider” of 2017 by Insight Success Magazine.

 

Eastern Bank-created fintech Numerated lands two new bank clients (American Banker), Rated: B

Numerated Growth Technologies, the online lending software startup that started life as an incubator within Eastern Bank, announced Monday it has two new clients, Franklin Synergy and MidFirst Bank.

These two additions bring the number of bank clients Numerated Software has landed to seven.

 

 

Fundbox Announces New Credit And Payments Solution To Bring $ 4.5 Trillion SMB2B Transactions Into 21st Century (Fundbox email), Rated: A

Today Fundbox announced the launch of Fundbox Pay, a new payment and credit solution servicing the $4.5 trillion small business-to-business (SMB2B) transactional market in the U.S. By addressing SMB’s lack of credit access and by facilitating credit payments between buyers and sellers, Fundbox Pay provides the 21st-century infrastructure to unlock the trapped value in the SMB2B economy.

Caliber Home Loans Launches Mobile Platform (PRNewswire), Rated: A

Caliber Home Loans, Inc. (“Caliber”) today announced the launch of a new mobile platform. Featuring three mobile phone apps customized for three user groups – borrowers, the Caliber sales force and their business associates – all users receive real-time information and the ability to respond from virtually anywhere. Caliber processes data from all three apps on the back end, which enables efficient and effective communication across the loan process.

 

 

Home Invest: When Did Investing in Rental Property Online Become Cool? (Digital Journal), Rated: B

When Home Invest entered the picture, that’s when. Home Invest allows you to run your next renovation from your laptop only, never having to walk your rental investment property.

United Kingdom

Zopa investor set to enter £94m fintech fund onto London Stock Exchange (Peer2Peer Finance), Rated: AAA

A NEW investment trust dedicated to backing fintech start-ups is set to list on the London Stock Exchange on Tuesday.

Augmentum Fintech has raised £94m through an initial public offering (IPO) alongside a Seedrs crowdfunding round that raised £695,000.

The company’s investment objective is to generate capital growth over the long term through investment in a focused portfolio of fast-growing and/or high potential private financial services technology businesses based predominantly in the UK and wider Europe.

RateSetter sees over 5,000 IFISA accounts opened in first month (Peer2Peer Finance), Rated: AAA

RATESETTER has revealed that over 5,000 Innovative Finance ISA (IFISA) accounts were opened in the first month since the product’s launch.

Ranger Direct Arbitration Proceedings Halted After Bankruptcy Filings (Interactive Investor), Rated: AAA

Ranger Direct Lending Fund PLC said on Monday Princeton Alternative Income Fund LP and Princeton Alternative Funding LLC filed voluntary petitions of bankruptcy last Friday, after arbitration proceedings following a provisional take over of a loan portfolio.

The company said that it was “disappointed” the bankruptcy filing has stopped the first phase of the arbitration, but believes Princeton’s portfolio will be investigated and the investments the fund has made will be compensated.

Starling and TrueLayer integrate for open banking (Finextra), Rated: A

Upstart challengers continue to lead the way in the UK’s open banking space, as API specialist TrueLayer integrates with Starling to enable businesses to access customer account data.

The Starling tie-up means that the bank’s customers can now share their data to use products created by these developers – including income verification tools, lending products and collated financial dashboards. The partners stress that account information will only be accessible when a customer chooses to use a new product and actively agrees to share their information through an explicit consent.

HSBC hopes to launch ‘open banking’ app within months (Financial Times), Rated: B

HSBC will launch a new app that centralises information about customers’ accounts — even those held with rival lenders — as early as next month, becoming the first major UK bank to take advantage of new regulations designed to boost competition and make it easier to switch providers.

The bank has set a target of the first week of May to release the “Connected Money” app, but Stuart Haire, HSBC’s UK head of retail banking and wealth management, told the Financial Times that he was hoping to make it widely available by mid-April.

 

 

 

 

Direct lending fund beats dividend target, launches new fundraise (AltFiNews), Rated: A

The RM Secured Direct Lending fund is looking to raise new capital through the issuance of new C shares and Zero Preference shares, according to regulatory filings.

Launched back in December 2016 raising £50.6m, the fund has raised another £30m through a C share issue in October 2017 but its managers have said on several occasions that the strategy can be scaled up significantly.  The fund has clocked up a 4.2 per cent dividend pay out last year beating its 4 per cent target.

How open APIs are paving the way for PFMs to succeed in Europe (Tearsheet), Rated: A

On Thursday, U.K. personal finance app Emma — which just launched in beta in December — announced a data-sharing agreement with challenger bank Starling Bank. It’s the second such agreement this year after a similar one with challenger bank Monzo in January.

The company’s two key revenue streams are based off interactions with customer data: referral fees from product recommendations and revenue from future financial products it could launch, including premium features within the app, he added.

 

Savers highlight interest and ROI as top priorities (Bridging & Commercial), Rated: A

The Next Gen: Investors and Savers report by P2P lending platform ArchOver has revealed that two-thirds of UK adults (67%) would call themselves ‘savers’ rather than ‘investors’.

The survey of 2,000 UK adults found that the average saver puts aside £191 a month.

Just under two-thirds of savers (66%) maintained a ‘rainy day fund’, while financing a new car or a holiday (29%) or paying for retirement (27%) were the other main reasons for saving.

The majority of savers (83%) used traditional savings accounts to build their nest eggs, followed by Isas (43%) and pension funds (33%).

China

UBS Hit With IPO Ban In Hong Kong (PYMNTS), Rated: AAA

Swiss banking giant UBS is reportedly banned in Hong Kong from sponsoring initial public offerings (IPOs), reports in Financial Times said Friday (March 9).

The publication cited UBS’s annual report, which revealed the 18-month ban from the Hong Kong Securities and Futures Commission. The regulator also fined UBS $119 million following an investigation into its sponsorship of IPOs for companies listing on the Hong Kong Stock Exchange.

According to reports, the ban comes two years after UBS warned it was also facing a suspension of corporate advisory services in Hong Kong. The bank also faced an investigation in Belgium in 2016 for money laundering allegations.

China’s Credit Crunch (The Diplomat), Rated: AAA

China Rapid Finance is one of thousands of private online micro-lending companies in China which, in recent years, have filled a critical gap in the country’s economy by extending credit to members of the lower and lower-middle classes, who traditionally have not had access to borrowing under the state-owned banking system.

Proponents of the payday and peer-to-peer loans offered by these companies assert that they offer borrowers upward financial mobility and the opportunity to achieve the trappings of a middle-class lifestyle. But the rapid proliferation of lending companies in an unregulated market has also led to widespread over-borrowing and a spate of predatory debt collection practices. More and more borrowers began to default on loans, and financial analysts and government regulators both worried that a growing debt bubble at the basement rungs of the Chinese economy might threaten the general stability of the country’s financial system.

 

European Union

Estonian P2P lender Investly Secures £500,000 Through Seedrs Campaign (Crowdfund Insider), Rated: AAA

Estonian peer-to-peer (P2P) lending platform Investly has successfully secured its initial £500,000 funding target through Seedrs. The equity crowdfunding round has so far attracted more than 375 investors.

Sweden’s VIA SMS to offer loans against crypto holdings (Finextra), Rated: A

CryptoLoan is a smart lending product offering Bitcoin-secured online loans that will allow Bitcoin investors to enjoy the value of crypto assets without selling them. The new product initially will be available for Swedish residents only, but the company is planning to open registration for other European countries shortly.

In the first phase of product development, CryptoLoan will offer online loans with Bitcoin collateral only to Swedish residents, but company development plans include expanding to other European markets shortly as well as enriching the list of accepted collateral with adding other cryptocurrencies. Customers from other European countries are welcome to sign up for news and get an exclusive opportunity to be the first to try the product as soon as it is available in the particular country.

BNP Paribas Fortis partners with Swedish fintech Tink for digital banking (AltFiNews), Rated B

Belgian bank BNP Paribas Fortis has announced it will be integrating tech from Swedish firm Tink to power its mobile banking applications.

International

Scoring with big data (The Edge Markets), Rated: AAA

The use of non-traditional data to churn out credit scores is now expanding beyond the underbanked and unbanked to reach even well-banked individuals who already have a credit score. This pool of data, which is used to discover patterns of users’ repayment behaviour based on their mobile phone and social media usage, is playing an increasingly important role in Asia alongside traditional credit scores.

Based on studies that have drawn a correlation between mobile phone usage and repayment rates, algorithms have been created to predict an individual’s potential for defaults. LenddoEFL is one of the pioneers in this field. It started its operations in the Philippines in 2011 before expanding to other countries with large underbanked populations such as Mexico and Colombia.

Mark Mackenzie, managing director for Asia-Pacific at LenddoEFL, says the company will be announcing a partnership in Malaysia in mid-2018, although he is reluctant to disclose more details.

As pointed out by impact investment firm Omidyar Network in its 2016 Big data, small credit report, it is estimated that individual consumer data production will reach 35 billion terabytes by 2020 — some 44 times the data produced in 2009. It also highlighted a few reports that had observed more than 30 companies globally that are already creating credit scorecards using non-traditional data.

Source: The Edge Markets

New Business Models and Emerging Technologies are Enabling Fintech Companies to Improve Financial Inclusion (The Financial), Rated: A

The report, Financial Inclusion in the Digital Age, was launched today during Money20/20 Asia in Singapore.

Over two billion unbanked adults in the world, representing 38 percent of all adults globally, do not have access to basic financial services and another 57 percent have basic accounts, but do not have access to diversified investments, low-cost payments systems, core household and business insurance, or credit. Financial Inclusion in the Digital Age explores some of the central frictions that prevent greater financial inclusion and financial well-being, and associated technological innovations that are fostering creative new approaches to mitigating these frictions for individuals and small businesses globally.

This serial entrepreneur wants to disrupt peer-to-peer lending, using blockchain (The Next Web), Rated: B

Most recently, he founded Celsius, the consumer credit blockchain-based startup.

The Celsius opportunity

Celsius gives its members the opportunity to use the coins they currently hold as collateral. With the Celsius Wallet, users can secure loans in dollars whenever they want by offering up their cryptocurrency as collateral. In the future, consumers will also be able to lend their crypto to others and earn interest in the process.

 

Australia

Fintech vs Banking: Which sector controls the future of money? (Small Caps), Rated: AAA

 

ApplePay is forecast to facilitate US$200 billion in payments by 2021 and already handles US$50 billion annually. Meanwhile, Amazon is preparing to cut the ribbon on its first chequing account feature by partnering with JP Morgan, a leading US bank.

According to the Australian Financial Review, 84% of millennials would consider banking with a tech giant like Google or Apple. This indicates that the average consumer puts more trust in their search engine provider than their internationally-recognised regulated Tier 1 banking institution, which only reaffirms the scale of the problem banks are now facing.

 

Authors:

George Popescu
Allen Taylor

Tuesday February 27 2018, Daily News Digest

LendingClub

News Comments Today’s main news: SoFi’s new CEO wants to get the company ready to go public. Revolut’s transaction volumes increased 700%. China to crackdown on non-bank lending. Blender raises $16M. Today’s main analysis: Stay away from LendingClub’s notes and shares. Today’s thought-provoking articles: Legacy banks, digital startups see opportunity to go beyond storing money. LendingBlock aims to mainstream […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Australia

Other

News Summary

United States

Anthony Noto’s Mission as SoFi CEO: Get the Startup Ready to Go Public (Bloomberg), Rated: AAA

Anthony Noto, the new chief executive officer of Social Finance Inc., is looking to steer the company out of crisis and get it in shape for a potential initial public offering.

The vision for SoFi outlined by Noto didn’t stray far from the one set by his predecessor Mike Cagney, who was ousted after accusations of sexual misconduct inside the company. Noto wants to create a broad online financial-service company, adding checking and savings accounts and wealth management to the main business of refinancing student loans.

SoFi’s new CEO says bank charter remains an option (American Banker), Rated: A

In an interview during his first day on the job, Anthony Noto did not promise any big course changes, though he did leave open the possibility that SoFi will revive its quest to get a banking license.

LendingClub’s Underwriting: Stay Away From The Notes And The Shares (Seeking Alpha), Rated: AAA

I bought my first batch of $25 notes on April 22, 2016. Now, it is important to note that LendingClub is very clear in its advertising that “99% of portfolios with 100+ Notes have seen positive returns.” So I suppose I added a level of risk by not having a portfolio worth at least $2500. But even still, returns can be .1% annualized and count as ‘positive’, but that is not an acceptable return by anyone’s standards given the risks involved in lending to strangers.

My Portfolio

To date, I have received $436 in payments, $96 of which is interest. I have lost $100 on notes that have charged-off, meaning that there is zero expectation of future payment and LendingClub collectors have stopped attempting to reach the borrower. I also have a note that is late, and based on how things have gone so far, I fully expect that to charge-off too and will lose the $11.50 still owed. In short, I have already lost almost 20% of my initial investment, crossing my fingers that none of the 14 notes I still have that are current don’t enter a late status with more than a year to go before the oldest reaches full term. My results have been dismal.

Source: Seeking Alpha

LendingClub’s ratings are A-G, with A being the safest. As you can see, the vast majority of my portfolio sits in A-C, with one E and one G note (LendingClub did away with F and G notes last year).

Source: Seeking Alpha

Legacy Banks and Digital Startups See a Big Opportunity to Move Beyond Simply Storing Money (AdWeek), Rated: AAA

Change can be hard for the financial industry, which is dominated by decades of processes and internal systems. But with a slew of upstarts making their way into the trillion-dollar industry, the old guard is finding innovative ways to beat these challenger brands at their own game.

“A lot of these companies have what we call ‘technical debt’—very expensive mainframe systems that are very difficult to change, run [and are] expensive and obviously that limits their ability to innovate,” said Oliwia Berdak, principal analyst at Forrester Research. “The biggest challenge is often culture … In banks the attitude has always been to perfect [products] before it’s unleashed on customers and [technology] is a big change where you’re working with a certain degree of uncertainty and risk.”

According to data collected by Accenture, 90 percent of banking executives said that their companies needed to “innovate at an increasingly rapid pace just to remain competitive,” but only 47.8 percent say that they are actually “investing comprehensively” in digital.

Another challenge: For all the talk about slick mobile banking apps and services, consumers—gasp—still like going to physical banks to manage financial decisions. Eighty-seven percent of customers enjoy going to a physical bank and prefer to interact with a human while there, per Accenture.

Source: AdWeek

Retail Banks Are Missing Opportunities to Give Digital Financial Advice (Wealth Management), Rated: A

Most customers who received face-to-face financial advice from their retail bank felt their needs were completely met (58 percent), but satisfaction drops when advice is delivered by other means, according to J.D. Power’s 2018 U.S. Retail Banking Sales Practices & Advice Study. Only 45 percent of customers who received digital advice through their bank’s website or mobile app felt their needs were met and only 33 percent felt their needs were met via email.
The majority of customers surveyed for the study (58 percent) said they want to receive advice through their bank’s website and mobile app, but only 12 percent said they received advice in that manner.

Why neobanks need to find a niche offering (Tearsheet), Rated: A

Customers still aren’t excited about digital-only banks. Less than 10 percent of Americans looking to open a checking account would consider doing so at a digital bank, according to a new report by Cornerstone Advisors.

For example, San Francisco-based neobank Chime’s customers are mostly middle-income millennials, with a median age of 29 and incomes between $45,000 to $65,000. Chime says it caters to a gap in the market for younger customers who felt larger institutions weren’t meeting their needs.

Neobanks should focus on a “clear, differentiated value proposition” for the customer, but too many of them are just adding a little technology to a customer experience that’s not terribly different from what the big banks offer, said Satya Patel, a partner at Homebrew, a seed-stage venture capital firm based in San Francisco and an investor in Chime.

How Capital One is rethinking its approach to products (Tearsheet), Rated: A

For the past year, Capital One has been rethinking how it can get out of the too-common approach of “innovating” by layering new technology on top of an old product — it’s realized it needs to entirely reconsider the customer’s interaction with it.

Are banks too blasé about mobile security? (American Banker), Rated: B

About a third of companies have knowingly sacrificed security for expediency or business performance, according to a newly published study, and researchers said that bankers’ responses were consistent with the group as a whole, which included health care and other sectors.

Bringing Credit Invisibles Into Focus with Alternative Financial Data (LendIt), Rated: A

Ten percent of the U.S. adult population do not have a credit score or history with any of the big three credit bureaus.

That’s 1 in 10, or roughly 26 million people who are considered “credit invisible.”

But the financial underserved market spends $173 billion in fees and interest to use $1.94 trillion in financial services, according to the 2017 Center for Financial services Innovation study.

There are four basic categories of people who fall under the credit invisibles umbrella:

  • Millennials: People between 18– 34 and have not yet borrowed money or gotten a credit card.
  • Low-Income: People who don’t make enough money to gain access to credit.
  • Recent immigrants: People who recently moved to the U.S. but haven’t established credit.
  • Mass-affluent: People who earn more than $100,000 per year and pay with cash instead of credit.

Mobile Payments In US To Reach $ 3 Trillion Within Two Years (Payment Week), Rated: A

in 2015, mobile payments in the US represented $550 billion. That’s good by most any standard, but the growth expected is staggering. By 2020, that number is projected to hit $2.8 trillion. That represents a compound annual growth rate (CAGR) of 39.1 percent, which is far beyond most any but the most unlikely investments.

China represents $5.5 trillion in mobile payments use as of right now, a combination of various societal factors like a comparative eschewing of the personal computer in favor of the mobile device, as well as a near-ubiquity of locations that accept the system.

BREAKFORM | RE Closes a Small Lot Subdivision Development in Record Time Via Crowdfunding (PRWeb), Rated: A

BREAKFORM | RE closed its latest small lot subdivision development project in the prime West Hollywood adjacent neighborhood in record time using Equity Multiple, one of the leading real estate crowdfunding platforms. The offering was 145% subscribed in 72 hours.

Credible Appoints Chris Bishko as Chief Financial Officer (BusinessWire), Rated: B

Credible, the consumer finance marketplace that helps consumers save money and make smarter financial decisions, today announced that it has appointed Chris Bishko as chief financial officer. Mr. Bishko will report to Credible’s founder and CEO Stephen Dash.

New York Lawmakers Open to Revisiting the BitLicense (CoinDesk), Rated: B

A bill to reform the regulation could be introduced “very soon,” State Senator David Carlucci told CoinDesk.

But what is likely to remain is the animosity toward the BitLicense, as evidenced by the small but dedicated protest gathering outside just before the roundtable began, not to mention the grievances aired by the two dozen or so attendees.

United Kingdom

Transaction volumes increase 700pc at fintech firm Revolut (Independent.ie), Rated: AAA

Fintech start-up Revolut has seen its monthly transaction volume increase by over 700pc in the last 12 months to $1.5bn (€1.2bn).

Lendingblock Aims to Popularize Crypto Lending in a Secure and Transparent Way (cryptovest), Rated: AAA

Lendingblock aims to become the first to build a marketplace where cryptocurrency lenders meet borrowers, and can exchange their assets across blockchains. The platform aims to bring securities lending to the crypto economy. The current estimates of the market paint a picture of enormous potential for development: in 2017, $2 trillion of assets on loan in traditional securities lending brought approximately $4 billion in revenue. Replicating this in crypto could generate up to $300 million within 3 years as the project notes in its white paper.

 

Britain’s big banks play catch up with fintech with new apps (Reuters), Rated: A

British retail banks are poised to introduce money management apps to compete with those already launched by financial technology start-ups, betting their trusted brands, broad client base and deep pockets will help them make up lost ground.

NatWest sets up network of fintech accelerator hubs (Finextra), Rated: B

The UK’s NatWest is launching four specialist fintech accelerators based in its Bristol, Edinburgh, London and Manchester sites.

China

Screws to tighten further on non-bank lending (The Standard), Rated: AAA

China will tighten its crackdown on illegal fundraising to fend off financial risks, according to an inter-agency meeting.

European Union

European Fintech Alliance raises bank API fears (Finextra), Rated: A

The European Fintech Alliance has fired another broadside in its tussle with the financial services establishment over PSD2, raising fears that banks will develop substandard APIs as a way to fend off competition.

Specifically, the alliance of 74 fintechs, challenger banks and fintech associations is unhappy that the Regulatory Technical Standards on strong customer authentication and common and secure communication under PSD2 allow banks the possibility to be exempted by their National Competent Authority from having to accommodate licensed Third Party Payment Services Providers (TPPs) to access accounts via the so called fallback option in case of malfunction of the API.

International

Marketplace lenders worldwide raised nearly bn last year (P2P Finance News), Rated: AAA

THE GLOBAL marketplace lending sector saw nearly $9bn (£6.45bn) invested across 233 deals last year, marking a new funding record for the industry.

Consultancy firm Fintech Global, who compiled the data, found that equity investment in the sector rebounded to $8.9bn last year after a slowdown in 2016. The total was boosted by the top 10 deals, which raised a combined $4.4bn.

The second half of the year was strongest for funding, with the largest deal of the year closing in the fourth quarter when Shanghai-based peer-to-peer lender Lufax raised $1.2bn.

Online lender ID Finance bolsters security with beahvioural biometrics (Finextra), Rated: A

ID Finance, the emerging markets fintech company, is incorporating behavioural biometrics into its AI-based fraud scoring engine to eliminate fraud, boost loan approvals and reduce the incidence of non-performing loans.

The behavioural biometrics system studies the unique typing and behavioural patterns users display during the loan application process to capture a range of patterns. These include mouse movements, to how fingers interact with a keyboard. The biometrics record patterns such typing speed, typos, flight time between keys, keystroke depressions, as well as the patterns from actual input.

Celsius: Get Dollars When You Need Them or Get Paid to HODL (cryptovest), Rated: A

The global financial system is wobbling. Banks and other traditional financial institutions have so far managed to survive the crisis resulting entirely from their errors, greed, and arrogance. Now, many believe, they won’t live through the crypto revolution unless they embrace it.

Meet the Celsius Wallet – a combination of a digital wallet and a peer-to-peer lending platform where members can earn passive interest on their crypto holdings and use them as collateral to get loans in fiat currencies.

Australia

‘Essential’ brokers advising Xinja on mortgage strategy (TheAdviser), Rated: A

The chief executive of banking disruptor Xinja has revealed that mortgage brokers have been involved in the group’s home loan plans and will be “essential” to its strategy.

The crowdfunded online lender recently received an Australian credit license (ACL) from the Australian Securities and Investments Commission (ASIC) and plans to utilise the broker channel to facilitate its digital home loan approval process.

Mortgage franchise sees decline in loan settlement (AustralianBroker), Rated: A

Mortgage franchise Yellow Brick Road posted a 2% decline to $7.74bn in loan settlement volume in the first half of FY18 over the previous period as it reduced its number of branches.

Overall, the company delivered 85% growth in profitability, with net profit before tax increasing to $0.53m in the first half of FY18 over the same period of FY17. It cited higher revenue – up by 5% – and lower costs – down by 4% – as drivers of its result.

The company also expects the addition of a small business lending product through its partner Prospa to provide additional revenue opportunities for its network and support growth in commercial lending.

India

P2P platforms as NBFCs gaining popularity in small cities, but there’s a catch (Financial Express), Rated: AAA

P Kanwal is from Punjab’s Bhatinda. He has a furniture business which mainly deals in cash, because of which it was difficult for him to get a secured loan from the formal banking system. For him, a Peer-to-peer (P2P) lending platform came as a rescue, which got him an unsecured loan for his kid’s education and expanding his business.

This not just the story of Mr Kanwal, but many more small entrepreneurs who are operating their businesses in Tier-1, Tier-2 cities and far-flung areas, some not even on Google map, who are getting financial support through P2P lending.

The pattern that emerges currently from the P2P lending is that borrowers from tier-2 and tier-3 cities comprised 20% and 17% of the total number of loans disbursed through the platform. The new-to-credit borrowers comprise 35% of fulfilled borrowers, while those with poor credit ratings accounted for 10% of the overall number.

MENA

Peer-to-Peer Lending Startup Blender Raises Million in Debt Financing and Equity (CTech), Rated: AAA

Israel-based peer-to-peer lending startup Blender P2P Israel Ltd. has raised $16 million in equity and debt financing, the company announced Monday.

Latin America

Airfox Launches Mobile App in Brazil, Giving Unbanked Access to Financial Services (PRWeb), Rated: A

Airfox, a mobile financial services company, today launched its free Android app in Brazil, giving millions of people unprecedented access to much-needed financing solutions.

More than 44 percent of Brazil’s population is unbanked, another 30-44 percent lack sufficient access to mainstream financial services, and those with credit cards face interest rates upwards of 200 percent (sources: World Bank, Bloomberg).

Canada

Big banks strive to give better digital financial advice (BNN), Rated: AAA

CTV’s Chief Financial Commentator Pattie Lovett-Reid discusses the Canadian banks’ quest to deliver quality online financial advice in an effort to catch up with the digital age.

Africa

PayJoy Partners With Vodacom & CBA to Bring Smartphone Financing to Tanzania (Crowdfund Insider), Rated: AAA

PayJoy, a San Francisco fintech startup, announced this week it has teamed up with Vodacom and CBA to bring smartphone financing to the country of Tanzania.

PayJoy Teams Up With Allied Mobile to Bring More Smartphones to Africans (Crowdfund Insider), Rated: A

PayJoy, a San Francisco fintech startup, announced on Friday it has teamed up with mobile distributor Allied Mobile to bring affordable smartphone payment plans to markets across the continent of Africa. According to the duo, Allied Mobile will use PayJoy Checkout, an instant paperless finance system for customers without access to formal credit, and the patented PayJoy Lock which enables “pay-as-you-go” access to the phone. 

Authors:

George Popescu
Allen Taylor

6 Blockchain-Based Crypto Lenders Changing P2P Lending

ETHLend

The integration of blockchain technology into multiple facets of our world could greatly streamline many industries that affect our day-to-day lives, and financial lending is the ideal forum. A natural progression of P2P lending, blockchain application can make the entire lending process more seamless and greatly reduce the amount of time the process takes. Here […]

ETHLend

The integration of blockchain technology into multiple facets of our world could greatly streamline many industries that affect our day-to-day lives, and financial lending is the ideal forum. A natural progression of P2P lending, blockchain application can make the entire lending process more seamless and greatly reduce the amount of time the process takes.

Here are a few of the players in the early days of this promising technology.

SALT (Secured Automated Lending Technology)

According to its website, SALT is the only platform built to facilitate loans secured by blockchain assets.

“Distributed ledgers represent a paradigm shift in the storage and transfer of assets and, for the first time in history, there is a perfect form of collateral: blockchain assets,” the website reads.

Basing loans on blockchain assets makes creditworthiness no longer an issue. Writing for Forbes, Roger Aitken reported that SALT asserts that, by focusing on the borrower’s assets instead of their credit score, it is able to “dramatically reduce the complexity and cost of the loan process.” SALT seeks to streamline every step of the loan process, facilitating a new blockchain-backed lending market.

The investor retains the value of their holdings, with any earnings or losses that occur to the wealth during the process reverting completely to the borrower.

Among the potential assets to blockchain-based coin lending are that it is a realm where crypto wealth is recognized. Company CEO Shawn Owen, speaking with Forbes, said “if you’re a holder of blockchain assets, a lot of your financial wealth is not being recognized by lenders.” This technology is poised to open those funds to be leveraged and also break down geographic constraints while bringing the potential for the unbanked and underbanked into the financial world.

SALT offers three value tiers and products.

  1. The basic membership package affords one up to $10k in term financing, paid only in USD; terms go from three to 24 months
  2. The premier package offers up to $100K in term financing with a line of credit. This can be paid in USD, Euro, GBP, JPY, and RMB. Term lengths are anywhere from one hour to 36 months.
  3. The enterprise package provides access to over $1M of term financing and a line of credit to be paid in an ad hoc currency selection, dictated by metered terms. This package offers two benefits that the premier package doesn’t–API integration and cold storage enterprise wallets.

All three packages offer no pre-payment penalties, market data and educational resources, and loan management web portals. The premier package offers access to the SALT hardware wallet, customizable loan terms, and early access to new products. These are not offered with the basic membership package.

All member lenders are Regulation D accredited investors, and while credit checks are not done on borrowers, SALT undertakes full Anti-Money Laundering (AML) and Know Your Customer (KYC) verification checks.

The loans, which sport interest rates in the 10 to 15 percent range, are not transferable via the blockchain, as they become securities and are thus transferable through existing financial channels.

EthLend

EthLend is an Estonian-based fully decentralized P2P lending platform on the Ethereum blockchain for lending Ether as tokens for collateral. The platform uses any ERC20 token. All lending on the platform is facilitated through the use of smart contracts, a feature unique the Ethereum blockchain.

The company’s Twitter feed from January 3 reports that it has reached nearly $600K USD in lending volume. The company offers address-to-address loans that are sent within minutes, with no middle men, assuring that no one, not even EthLend, can stop one’s lending or borrowing.

With a roadmap that goes into Q4 2019, the company seems to have a well-plotted vision. Included in that roadmap are:

  • Q1 2018—Plans for a Decentralized Credit Rating (DCR), which will draw on Credit Tokens (CRE) and previous loans on EthLend to create a decentralized credit rating that can be used for other Decentralized Applications (DAPPs) as well
  • Q2 2018—The addition of bitcoin to the DAPP
  • Q2 2018—CRE from third party services, such as uPort and Civic, which can be used when the borrower doesn’t have enough previous loans
  • Q4 2018—the incorporation of the lending of other altcoins and tokens
  • Q3 2019—expansion beyond Ethereum to other distributed ledger networks

Rating the company, CrushCrypto.com says “use cases may seem limited for now, but we believe as tokenization of real assets becomes more prevalent, EthLend has a good chance to become a market lender in this space.”

A pre-ICO lasting from September 25th to October 25th of last year sold 62.5 million LEND available at a sale price of 1 ETH = 25K LEND. The ICO, which ran from November 25-30, saw the company raise $17.86M USD, essentially 100% of the $17.9M goal.

In Q4 2107, the company opened up to USD-based loans and installments.

The platform is not without some aspects that may cause concern for some industry insiders. Certain functions are only accessible with LEND tokens, such as featured loan listings and email marketing for new loan requests. Also, EthLend is currently only available through the Eidoo ICO search engine.

On the upside, only dealing with crypto-to-crypto borrowing means there will be fewer regulation restrictions when those start to be handed down. Also, some insiders fear that other blockchain lending platforms that deal in fiat currencies might be swallowed by the banks, as they do open their transactions to become securities.

ICO Bench rates EthLend at 4.4 out of 5.

Celsius

Celsius is a New York-based NPO based on the Ethereum blockchain, which extends instant credit through a decentralized P2P network. The network is akin to a membership organization that consists of both lenders and borrowers. Members must complete a Celsius profile to join.

Celsius touts itself as the “first crypto wallet that allows users to earn interest (7%) on their held coins” and allows borrowers to use cryptocurreny as collateral to gain access to USD loans. Using a token called a DEG, Celsius deals in BTC, ETH, and USD and uses smart technology to bind the lender/borrower relationship.

Borrower’s metrics are ascertained by using the Celsius Score, a digital credit score calculated by using various traditional metrics, such as FICO scores and mortgage history, as well as non-traditional ones such as Uber and Amazon histories. Lenders choose their borrowers using this score to determine risk.

An NPO acting in the best interests of its users through lower fees and no hidden fees, Celsius’s ultimate goal is to give credit to large blocks of the public who are underserved by banks.

ICO Bench rates Celsius at 2.8 out of 5. The central reason for the less than stellar mark centers around the company being long on marketing, but less so in technology terms.

Some Other Players

Fusion LenderComm

Seven banks, including BNP Paribas, HSBC, ING, BNY Mellon and State Street, have joined forces with R3 and Finastra to develop a blockchain-powered marketplace for syndicated loans. The first pilots have already been successfully completed.

With the early support of seven global banks (two of which do not yet wish to be named), the platform will cover 10% of the syndicated loan market when live next year.

Inspeer

An expansion under the Russian LightFin.ru brand, Inspeer deals in crypto and fiat. The company serves three million regional customers and processed 200,000 loans in its first year.

LendingBlock

For those who like to be in the know a little earlier, there is LendingBlock, a securities lending platform for crypto and digital assets. Users can lend and borrow cryptocurrencies against collateral of other cryptocurrencies in a completely decentralized and private manner. Watch for a Q1 token presale and a Q3 launch. LendingBlock is not currently working with fiat currencies.

 

Conclusion

The business of cryptocurrency lending is looking like the Wild West. There are some promising players to consider, and more if you look. SALT has Erik Voorhees associated with it, who founded Coinapult and gambling site SatoshiDice. He is a long-time cryptocurrency and blockchain advocate.

Do your own homework to make informed choices, but if crypto lending is in you future, start your research with these platforms.

Author:

Written with Paul Keenan.

Allen Taylor

Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

News Comments

United States

United Kingdom

European Union

International

Australia

India

Asia

Canada

Africa

News Summary

United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

International P2P Lending Volumes December 2017 (P2P-Banking), Rated: AAA

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor

Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

News Comments

United States

United Kingdom

European Union

International

Australia

India

Asia

Canada

Africa

News Summary

United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

International P2P Lending Volumes December 2017 (P2P-Banking), Rated: AAA

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor