- Today’s main news: CommonBond receives AAA securitization rating. Ranger Direct returns suffer. Victory Park Capital posts record returns from balance sheet investments.
- Today’s main analysis: LendingTree mortgage offers report for February 2018.
- Today’s thought-provoking articles: Can big tech stop the compensation bubble? What’s driving venture capitalist’s attention to B2B fintech? The evolution of modern fintech.
- CommonBond receives first AAA securitization rating. AT: Congratulations!
- LendingTree mortgage offers report.
- The mortgage market no one talks about.
- Can big tech stop the comp bubble? AT: An excellent report.
- Millennials seek non-traditional banking.
- Top ex-bankers in fintech and alt lending.
- Points awarded for new ISOs.
- Kabbage CEO speaks on assault-rifle decision.
- How data analytics drives real estate investing.
- World Economic Forum leads creation of cybersecurity consortium.
- What is blockchain technology? AT: An introduction for beginners, but a really good introduction.
- Interview with Angela Galardi of Climb Credit.
- iintoo returns net 15.95% on exited deals.
- Is commercial real estate critical to improving local communities?
- A guide to commercial real estate investing.
- QuantumReverse adds to team.
- Triad among best places for small businesses.
- Inteview with Blend Network CEO.
- Ranger Direct’s returns suffer from Princeton proceedings.
- VPC posts record returns from balance sheet investments.
- iwoca pledges 100M GBP for Northern SMEs by 2020.
- The UK neobank market has reached critical juncture.
- Do SMEs favor equity and alt finance over debt?
- We need an Everything ISA.
- Checkout.com places on Tech City’s Future 50.
- What’s driving VC attention to B2B fintech?
- The evolution of modern fintech. AT: An awesome infographic.
- United States
- Online Lender CommonBond Receives First AAA Rated Securitization (Crowdfund Insider), Rated: AAA
- LendingTree Mortgage Offers Report – February 2018 (LendingTree), Rated: AAA
- The $ 5.7 trillion question: Can big tech stop the comp bubble? (INTL FCStone), Rated: AAA
- Millennials are seeking non-traditional banking (Digital Journal), Rated: A
- 19 of the top ex-bankers in fintech (efinancialcareers), Rated: A
- Points awarded for new ISOs and more; Prizes include a Nintendo Switch (6th Avenue Capital), Rated: A
- Kabbage CEO Rob Frohwein On Their #FinTechForChange Call Against Assault-Style Rifles (Hypepotamus), Rated: A
- How data analytics drives better real estate investing (Housing Wire) Rated: A
- World Economic Forum leads creation of fintech cyber security consortium (The Star), Rated: A
- The mortgage market risk no one’s talking about (BROOKINGS), Rated: A
- What is Blockchain Technology? A Beginner’s Guide (Invest in Blockchain)
- Women in NYC Tech: Angela Galardi Ceresnie of Climb Credit (Alley Watch), Rated: A
- iintoo Returns Net 15.95 Percent on Exited Deals (PR Newswire), Rated: A
- RealtyShares Survey Shows Many Americans Believe Commercial Real Estate is Critical to Improving Local Communities (Business Wire), Rated: A
- A Guide to Commercial Real Estate Crowdfunding (Commercial Property Executive), Rated A
- QuantumReverse Expands Its Team (PR Newswire), Rated: B
- Triad ranks among the best places for new small businesses (Tiad Business Journal), Rated: B
- Interview with Yann Murciano, CEO of Blend Network (P2P-Banking), Rated: A
- United Kingdom
- Ranger Direct’s returns still suffering from Princeton proceedings (Peer2Peer Finance News), Rated: AAA
- VPC posts record returns from balance sheet investments (Peer2Peer Finance News), Rated: AAA
- Fintech lender iwoca pledges £100m for Northern SMEs by 2020 (AltFi), Rated: A
- The UK neobank market has reached a critical juncture (Business Insider), Rated: A
- Do SMEs favour equity and alternative finance over debt? (Specialist Banking), Rated: A
- Forget the Lifetime ISA, we need an ‘Everything ISA’ (City Wire), Rated: A
- Checkout.com Secures a Place on Tech City’s Future Fifty, (PRNEWSWIRE), Rated: B
- Property Tax In China By 2019? (supchina), Rated: A
- European Union
- EU proposes crowdfunding ‘passports’ in boost for fintech (Reuters), Rated: AAA
- What’s Driving VCs’ Attention To B2B FinTech (PYMNTS), Rated: AAA
- Fintech – The Evolution Of Modern Financial Technology In The 21st Century (Valuewalk), Rated: AAA
- Nirav Modi fallout: As banks tighten purse strings, fintech can fill the void (India Times) Rated: AAA
- Digital lenders call for easing of regulations (The Times of India), Rated: A
Online Lender CommonBond Receives First AAA Rated Securitization (Crowdfund Insider), Rated: AAA
CommonBond, an online lending platform servicing the student loan market, has received its first triple A rating for securitization. Moody’s has assigned provisional ratings of (P)Aaa (sf) to Class A-1 and A-2 notes to be issued by CommonBond Student Loan Trust 2018-A-GS (CBSLT 2018-A-GS). DBRS rated the loans AAA as well. The transaction was CommonBond’s sixth securitization at $233.75 million bringing the total to $1.22 billion.
LendingTree Mortgage Offers Report – February 2018 (LendingTree), Rated: AAA
- February’s best offers for borrowers with the best profiles had an average APR of 4.22% for conforming 30-year fixed purchase loans, up from 3.93% in December. Refinance loan offers were up 38 bps to 4.13%.
- For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 25 bps to 4.80%. The loan note rate hit the highest since March 2016 at 4.70% and was also up 25 bps from January. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
- Consumers with the highest credit scores (760+) saw offered APRs of 4.68% in February, vs 4.95% for consumers with scores of 680-719.
The $ 5.7 trillion question: Can big tech stop the comp bubble? (INTL FCStone), Rated: AAA
INTL FCStone Global Macro Strategist Vincent Deluard: “The $5.7 trillion question: Can big tech stop the comp bubble, resist higher yields, and deliver the growth?”
- Compensation, especially stock-based comp, is exploding at large tech companies
- The tech rally rests on a foundation of low interest rates, rising stock prices, and quick revenue growth
- Many big tech companies are becoming too big to grow
- Rising interest rates and, God forbids, lower stock valuations could cause the entire edifice to crumble
Millennials are seeking non-traditional banking (Digital Journal), Rated: A
A wake-up message for banks: if you want to remain competitive you need to embrace digital multi-channels and appeal to tech-savvy millennials.
A generational change is happening, and businesses have to accept that ‘millennials’ are expecting most products and services to be offered digitally. Financial products, including banking, are not immune from this trend. Two separate reports highlight this tendency.
A review by Intelligent Finance has found that the biggest factor that attracts millennials to select one bank over another is an easy-to-use smartphone app, with most wishing to use online banking via a smartphone. In contrast, Baby Boomers stated that face-to-face customer service was the key determinant (with rude service being highlighted as the main reason why this generation might take their money to another bank). In contrast, millennials are most likely to exit from a bank if they did not like the smartphone app or if the bank suffered from a cyber breach.
19 of the top ex-bankers in fintech (efinancialcareers), Rated: A
It’s becoming more common for bankers to quit the traditional financial services in favor of financial technology, either co-founding a startup or landing at an established fintech firm. Some crash and burn and come crawling back to banking with their tail between their legs, but many have found great success in the fintech space.
The following are 19 of the top former bankers working in fintech today (in no particular order).
John Mack, a member of Lending Club’s board of directors
Mack stepped down as chairman/CEO of Morgan Stanley in 2011. Since then, he has invested in various fintech companies, including Lending Club (on whose board he sits), Orchard and Dataminr, which sends social media-based alerts to traders. He also participated in a $10m initial funding round for New England Funding Technologies (NEFT), which created the mPowerCredit credit-rating platform.
Dominic Gamble, founder of Findawealthmanager.com
After starting out as a sales-trader at Credit Agricole, Gamble worked at Credit Suisse for seven years before he moved to Deutsche Bank in 2010. However, a year later Gamble left to set up his website, Findawealthmanager.com, which helps high-net-worth investors to research and evaluate financial advisers.
Points awarded for new ISOs and more; Prizes include a Nintendo Switch (6th Avenue Capital), Rated: A
6th Avenue Capital, LLC (“6th Avenue Capital”), a leading provider of small business financing solutions, announced today the launch of its first “Merchant Madness” promotion. Throughout the month, and coinciding with the annual NCAA Men’s Basketball Tournament, 6th Avenue Capital will award points for all new ISOs, Merchant Cash Advance (MCA) submissions, approvals and funded deals.
- The breakdown of points* awarded per category is as follows:
- New ISOs/ISOs submitting first MCA application – 1 point
- New MCA submissions – 1 point
- Approved submissions – 2 points
- Funded deals – 3 points
- *California submissions excluded.
Points will be awarded from March 1, 2018 to March 30, 2018 and tallied at the end of the month. Prizes will be awarded to the top nine finishers as follows:
- 5th through 8th place – Amazon Echo Dots (4)
- 1st through 4th place – Parrot Mambo Drones (4)
- 1st place – Nintendo Switc and Parrot Mambo Drone
Kabbage CEO Rob Frohwein On Their #FinTechForChange Call Against Assault-Style Rifles (Hypepotamus), Rated: A
How did you decide as a company to take a public stand on this issue?
As a technology leader and financial services company, we believe we have a unique responsibility and opportunity to help prevent future tragedies from occurring. Doing nothing is still a choice. We choose to do something to drive positive change and be an example to others.
How data analytics drives better real estate investing (Housing Wire) Rated: A
For Auction.com, the largest real estate marketplace, innovative technology enables us to provide a superior level of functionality and data analytics on a host of different types of real estate in the 3,000+ counties we serve — helping build stronger relationships with our buyers and sellers, and making us a trusted partner throughout the auction process.
Buyers and sellers demand greater data capabilities
In a world increasingly driven by big data, the real estate professionals who effectively utilize robust data analytics to make more informed decisions typically realize greater levels of success. Just as stock market investors conduct due diligence and use varied data sources prior to purchasing a company’s stock, real estate investors should do the same when buying property. Likewise, sellers come to the marketplace with one goal in mind – selling a property at market-price in the least amount of time. Data analytics serves as a catalyst to ensure that both of these needs are met.
World Economic Forum leads creation of fintech cyber security consortium (The Star), Rated: A
The World Economic Forum has led the creation of an industry consortium focused on improving the cybersecurity of financial technology companies, as collaboration between fintechs and financial institutions grows.
The consortium’s founding members include Citigroup Inc, online lender Kabbage, the Depository Trust & Clearing Corporation, Zurich Insurance Group and Hewlett Packard Enterprise, the companies said on Tuesday.
The mortgage market risk no one’s talking about (BROOKINGS), Rated: A
After the crisis, Congress and financial regulators increased regulation of the credit risk associated with mortgage lending, including the enforcement of stronger underwriting standards. But according to new research published in the Spring 2018 edition of the Brookings Papers on Economic Activity, a boom in nonbank mortgage lending means the mortgage market is still exposed to liquidity risk that very few people are talking about.
What is Blockchain Technology? A Beginner’s Guide (Invest in Blockchain)
The very primitive form of the blockchain was the hash tree, also known as a Merkle tree. This data structure was patented by Ralph Merkle in 1979, and functioned by verifying and handling data between computer systems. In a peer-to-peer network of computers, validating data was important to make sure nothing was altered or changed during transfer. It also helped to ensure that false data was not sent. In essence, it is used to maintain and prove the integrity of data being shared.
Women in NYC Tech: Angela Galardi Ceresnie of Climb Credit (Alley Watch), Rated: A
Today we speak with Angela Galardi Ceresnie, COO of Climb Credit, the smart student-lending platform. After undergrad and roles at Citi and American Express, Angela took her financial acumen to the startup world in 2013 to cofound Orchard Platform, an investment platform for the peer-to-peer and online direct lender, with Matt Burton, Jonathan Kelfer and David Snitkof. During Angela’s time at Orchard, the company had raised over $40M in funding, backed by some notable investors including John Mack, Thrive Capital, and Spark Capital. In 2016, Angela transitioned to Climb Credit to work alongside the founding team to help it scale. Angela is an active member of the NYC tech ecosystem and continues to give back to the community through her involvement.
What are the advantages of being a woman in tech?
We have a unique perspective that we can bring to the table, what has historically been, a primarily male-dominated field, and that allows us to make useful observations and a significant impact as long as we stand behind our ideas. There is also no shortage of support from other women in the industry.
iintoo Returns Net 15.95 Percent on Exited Deals (PR Newswire), Rated: A
Real estate investment management company iintoo investments Ltd. (“iintoo”) announced a 15.95 percent average annual return on investment, net fees, and $3 million in regular distributions to investors since its founding in 2015. The returns are based on iintoo’s six exited investments to date, with a total asset value of $50 million, all of which exited ahead of schedule. With assets totaling $560 million and a global community of 32,000 members, New York-based iintoo opens up access to real estate investments that were once exclusive to professional funders and high net worth individuals.
Unlike a crowdfunding platform, iintoo works directly with project developers to vet and create business plans to maximize the chances for success.
RealtyShares Survey Shows Many Americans Believe Commercial Real Estate is Critical to Improving Local Communities (Business Wire), Rated: A
RealtyShares, a leading online marketplace for real estate investing, today announced the results from its Commercial Real Estate Investing Survey.
The survey found that a quarter of U.S. adults (25%) felt commercial real estate investment has the biggest impact on enhancing the reputation of a community. Roughly 1 in 5 of those who have or are currently investing in commercial real estate have done so for reasons that may support their community, like helping a friend or family member with capital for a commercial real estate investment (20%) or needing a facility for their own business (17%).
While some are already involved, the survey revealed fifty-three percent of Americans would invest in commercial real estate within their communities if given a chance. For those who have never invested in commercial real estate, affordability and access were the major roadblocks. Sixty-one percent believe they lack the necessary funds, while 19 percent don’t know how to invest. This may be creating an investing gap, as nearly 9 out of 10 Americans (89%) have never invested in commercial real estate, according to the report.
A Guide to Commercial Real Estate Crowdfunding (Commercial Property Executive), Rated A
Charles Clinton, co-founder & CEO of investing platform EQUITYMULTIPLE, delves into the mechanism behind commercial real estate crowdfunding and underlines the most important factors an investor must consider for long-term success.
What opportunities does real estate crowdfunding offer investors?
Clinton: By moving real estate syndication online, real estate crowdfunding has begun to change that old paradigm. Individual investors can now invest in private market real estate transactions at low minimums (our investment minimum at is typically $10,000 per offering) and start allocating a portion of their portfolio into real estate without taking on the burdens of direct ownership.
Investors have full transparency into what properties they’re investing in and the low minimums help facilitate diversification. The best platforms also pre-screen the real estate companies and investments that they present, easing the selection burden on investors.
What are the benefits of crowdfunding investment compared to traditional instruments?
Clinton: Strong yield—after years of near-zero interest rates, investors have been forced to look for yield in new places. Less volatility—these investments are illiquid and non-traded, as opposed to public stocks, traded REITs or cryptocurrencies (a topic on everyone’s mind). While illiquidity has its drawback, it also reduces market correlation, making direct real estate investing less subject to market swings and, in aggregate, exhibit less volatility.
Potential for outsized returns—because private real estate markets are inefficient, there is potential for market-beating returns by investing in markets and submarkets that are underserved by traditional sources of capital, and in properties with untapped potential. Downside protection is also an advantage. Real estate—as an irreplaceable resource with tangible value—is also less vulnerable to recessions. The economy will expand and contract cyclically, but a growing number of humans will always need places to live and work.
Then we have tax advantages. Real estate investing platforms allow individual investors to share in the same unique tax advantages as institutional real estate investors—namely write-offs for depreciation, and a new 20 percent deduction for investments made through an LLC, courtesy of the recently-signed tax bill.
QuantumReverse Expands Its Team (PR Newswire), Rated: B
QuantumReverse, the technology company that is building an advanced reverse mortgage LOS, announced the addition of four industry veterans to its team. QuantumReverse’s team now boasts over 50 years of combined experiences in the reverse mortgage technology space.
Triad ranks among the best places for new small businesses (Tiad Business Journal), Rated: B
The Triad area ranks among the 50 best places for new small businesses, according to a new study by online loan marketplace LendingTree.
Interview with Yann Murciano, CEO of Blend Network (P2P-Banking), Rated: A
Blend Network has already lend £1.5 million GBP to 6 project across Northern Ireland, Scotland and Norfolk with an average fixed return of 12.2% p.a.
What are the three main advantages for investors?
- Access to niche markets
- High returns
- Strong due diligence and credit risk assessment
What are the three main advantages for borrowers?
- Access to finance
- We bring knowledge and understanding of developers’ true requirements
- No exit fee for early repayments
Ranger Direct’s returns still suffering from Princeton proceedings (Peer2Peer Finance News), Rated: AAA
RANGER Direct Lending’s (RDL) ongoing legal dispute with its Princeton holding pushed its net asset value (NAV) return down to 0.43 per cent in January, the investment trust has revealed.
RDL has been locked in arbitration proceedings with Princeton since last year over its exposure to bankrupt lender Argon Credit, and without these costs it said its returns would have been 0.68 per cent.
The update shows its NAV is down from 0.48 per cent in December.
VPC posts record returns from balance sheet investments (Peer2Peer Finance News), Rated: AAA
VICTORY Park Capital (VPC) Specialty Lending Investments has reported that gross revenue return from its balance sheet investments hit an all-time high in January.
Its balance sheet loans produced returns of 1.08 per cent in January, compared to its marketplace loans which produced 0.04 per cent.
80 per cent of its portfolio was in balance sheet loans as of 31 January, the company said.
Fintech lender iwoca pledges £100m for Northern SMEs by 2020 (AltFi), Rated: A
European small business lender iwoca has announced today its intention to pledge £100m in lending to micro and small businesses in the UK’s Northern regions by 2020, as it fights to counteract the withdrawal of credit by UK banks.
The UK neobank market has reached a critical juncture (Business Insider), Rated: A
Starling Bank and Monzo became the top two banks in terms of customer satisfaction, according to consumer finance site Smart Money People, knocking incumbent first direct out of the number one spot for the first time. Additionally, the percentage of UK consumers willing to use a digital-only startup bank fell during 2017, from 78% in the first half of the year to 54% by the end of the year, according to a survey by RFi Group.
Do SMEs favour equity and alternative finance over debt? (Specialist Banking), Rated: A
At the beginning of 2017, SMEs in the UK accounted for 99.3% of all private sector businesses and 60% of all private sector employment in the UK.
Last year saw a substantial increase in the value and number of SME equity deals (up 79% and 12% respectively) in the UK, as well as continued growth in the value of SME asset finance deals (up 12%) and P2P lending (up 51%).
This was at the same time that traditional bank net lending declined to £700m – down from £3bn the year before.
Forget the Lifetime ISA, we need an ‘Everything ISA’ (City Wire), Rated: A
A report by the Association of Taxation Technicians (AAT) has criticised the number of ISAs available that brings ‘unnecessary complexity, bureaucracy, and confusion’, said chief executive Mark Farrer.
‘Some ISAs have age limits, some do not, some have a maximum savings limit of £20,000 per annum, one has a £4,128 limit, another £4,000, and the Help to Buy ISA offers a £50 bonus for every £200 saved, up to a maximum of £3,000,’ he said.
Farrar also pointed out the ‘mind-boggling interaction’ between different types of ISAs that means the total saved into a Lifetime ISA (Lisa) – a maximum of £4,000 a year – has to be deducted from the total (currently £20,000) that can be saved into a cash or stocks and shares ISA.
Checkout.com Secures a Place on Tech City’s Future Fifty, (PRNEWSWIRE), Rated: B
Checkout.com, a leading international online payment solutions provider, has been included in Tech City’s renowned Future Fifty programme for 2018.
Property Tax In China By 2019? (supchina), Rated: A
Meanwhile, there is no tax on real estate. If you buy an apartment — even if it sits empty — it does not cost anything. Although there has been talk of a property tax for many years, there has been little action aside from a few experiments in local markets. That might be about to change, judging by this Sohu report (in Chinese):
- At this morning’s press conference at the annual political gathering known as the Two Sessions, Vice Finance Minister Shi Yaobin 史耀斌 told reporters that his ministry and other government departments were “drafting and improving the real estate tax law,” while former Finance Minister Lou Jiwei 楼继伟 said that a draft bill may be reviewed by the legislature this year.
- One important detail that has not yet been worked out: How will the value of property be assessed — based on appraisal, market value, or some other indicator?
- Local governments will collect and have the benefit of property taxes.
- The Party’s biggest worry is, I believe, that a property tax will be an excessive new burden on ordinary households whose only major investments are in real estate.
- A possible solution mentioned in the Sohu article is leaving the first 160 square meters of a person’s property tax-free, but placing a levy on floor space in excess of that and on additional real estate owned by the same person.
- “A property tax is a potential game-changer for a real estate industry sometimes called too big to fail for the Chinese and world economies,” says Bloomberg.
EU proposes crowdfunding ‘passports’ in boost for fintech (Reuters), Rated: AAA
The European Commission has proposed crowdfunding “passports” for the European Union in a draft law that forms part of efforts to boost growth in the financial technology sector.
“An EU crowdfunding license would help crowdfunding platforms scale up in Europe,” the EU’s financial services commissioner Valdis Dombrovskis said in a statement.
What’s Driving VCs’ Attention To B2B FinTech (PYMNTS), Rated: AAA
According to the analysis, which was released last week, an 18 percent increase in FinTech funding in 2017 led the industry to see $27.4 billion worth of investments. FinTech funding spiked 31 percent to $11.3 billion in the U.S. alone, and the U.K. market’s funding deals nearly quadrupled in value to $3.4 billion.
The volume of deals increased, too, with nearly 2,700 investment rounds closing last year.
B2B FinTechs are playing an especially prominent role in this trend, analysts noted. Anecdotally, these firms have been talking for years about the industry’s potential to make significant disruptions in areas like corporate finance, small and medium-sized business (SMB) lending and more.
The alternative finance market saw a sudden boom, and a similarly sudden period of volatility as big industry names like Lending Club, OnDeck and Kabbage struggled to continue growth momentum. Kabbage was hit with a lawsuit last year initiated by an SMB borrower, and Lending Club’s CEO resigned in 2016 following an investigation into improper loan sale practices.
Fintech – The Evolution Of Modern Financial Technology In The 21st Century (Valuewalk), Rated: AAA
Financial procedures have evolved
Nirav Modi fallout: As banks tighten purse strings, fintech can fill the void (India Times) Rated: AAA
As banks scramble to tighten their credit disbursal process, the ones most affected would surely be the small businesses. The now oft quoted figure from the Economic Survey this year has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises. There is, however, now a robust alternate source of finance for small businesses to tap into.
“Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.
Digital lenders call for easing of regulations (The Times of India), Rated: A
The Digital Lenders’ Association of India (DLAI) has presented a set of policy recommendations to the finance ministry, including easing of funding sources for digital lenders, expanding access to the micro and small enterprises (MSMEs), easing paperless transactions, and opening up lending data.