Thursday September 5 2019, Weekly News Digest

neobanks

News Comments Today’s main news: LendingPoint closes $178M personal loans securitization. OnDeck hits $879M in online financing in Texas alone. RateSetter adds three products. Funding Circle lenders face longer cash out waits. Yirendai files Form 6-K. Today’s main analysis: International P2P lending volumes for August 2019. Today’s thought-provoking articles: Silicon Valley is building a social […]

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

neobanks

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

LendingPoint : Closes $ 178 Million Personal Loans Securitization (MarketScreener), Rated: AAA

LendingPoint, the company revolutionizing and democratizing commerce, announced today that it closed its inaugural securitization of consumer loans. LendingPoint Receivables Trust 2019-1 (“LDPT 2019-1”) issued $177.85 million of notes backed by a pool of $187.22 million of direct-to-consumer loans originated on the LendingPoint platform.

The LendingPoint Receivables Trust securitization was rated by Kroll Bond Rating Agency, Inc. and includes $117.76 million of Class A notes rated “A-“, $24.74 million of Class B notes rated “BBB-“, $23.68 million of Class C notes rated “BB-” and $10.67 million of Class D notes rated “B-.” The notes priced at a blended yield of 4.05% per annum and provided for a 95% advance rate. The transaction has a 5% overcollateralization Deposit and a 5% overcollateralization Target. The risk adjusted yield of the receivables securing the notes is expected to be 13.14% per annum.

TyMac Electric Powers Business Success with Online Financing from OnDeck (PR Newswire), Rated: AAA

OnDeck today announced that TyMac Electric of Plano, Texas is its Small Business of the Month for August, 2019.  The 30-person company serves the Dallas-Fort Worth area with high-quality, professionally managed electrical services.

Over the last two years, OnDeck has provided additional financing to TyMac Electric as the business grew to meet demand in the Dallas-Fort Worth commercial marketplace.

Overall, OnDeck has provided more than $879 million in financing online to small business owners in the State of Texas.

2019’s Best & Worst Places to Retire (WalletHub), Rated: AAA

Best Retirement Cities

Overall Rank
(1 = Best)
City Total Score ‘Affordability’ Rank ‘Activities’ Rank ‘Quality of Life’ Rank ‘Health Care’ Rank
1 Orlando, FL 60.87 9 11 68 48
2 Tampa, FL 59.06 10 19 45 95
3 Scottsdale, AZ 58.35 98 22 3 58
4 Charleston, SC 58.30 42 21 56 51
5 Miami, FL 57.21 51 5 105 74
6 Denver, CO 57.08 113 17 43 17
7 Fort Lauderdale, FL 56.58 65 18 82 56
8 Cape Coral, FL 56.50 19 51 15 109
9 Minneapolis, MN 56.46 145 3 58 5
10 Cheyenne, WY 56.06 2 142 50 33

Source: WalletHub

Silicon Valley is building a Chinese-style social credit system (Fast Company), Rated: AAA

Have you heard about China’s social credit system? It’s a technology-enabled, surveillance-based nationwide program designed to nudge citizens toward better behavior. The ultimate goal is to “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step,” according to the Chinese government.

Many Westerners are disturbed by what they read about China’s social credit system. But such systems, it turns out, are not unique to China. A parallel system is developing in the United States, in part as the result of Silicon Valley and technology-industry user policies, and in part by surveillance of social media activity by private companies.

Fundrise Opportunity Zone Fund Has Raised Over $ 22 Million (Crowdfund Insider), Rated: A

Real estate investment platform Fundrise has raised over $22 million for their Opportunity Fund. The information was revealed in a recent Form D 5o6c filing with the Securities and Exchange Commission (SEC).

Kabbage acquires Radius Intelligence, the marketing tech firm with a database of 20M small businesses (TechCrunch), Rated: A

Data is the new oil, as the saying goes, and today Kabbage — a fintech startup backed by SoftBank that has built a business around lending up to $250,000 to small and medium enterprises, using AI-based algorithms to help determine the terms of the loan — is picking up an asset to expand its own data trove as it looks to expand into further SMB financial services. The company has acquired Radius Intelligence, the marketing technology firm that has built a database of information on some 20 million small and medium businesses in the U.S.

Here is a list of the top nonbank and alternative lenders in 2019 (Business Insider), Rated: A

Nonbanks and alternative lenders have garnered attention in the banking industry due to their ability to partner with legacy banks and utilize technology to make financial transactions more efficient and convenient for users.

Source: Business Insider

Chime now has 5 million customers and introduces overdraft alternative (TechCrunch), Rated: A

Challenger bank Chime has reached 5 million customers in the U.S. The San Francisco-based startup is creating an FDIC-insured mobile bank without any physical branch. The company also promises fewer fees.

Back in March, Chime  said it had 3 million customers when it announced its $200 million Series D round. So that’s 2 million additional customers in roughly 5 months.

Zac Prince of BlockFi (Lend Academy), Rated: A

Even Financial raises $ 25 million to connect banks with channel partners (VentureBeat), Rated: A

Even Financial, a four-year-old New York-based provider of APIs for financial services search, acquisition, and monetization, today announced that it’s raised $25 million in a strategic round of investment co-led by Citi Ventures and MassMutual Ventures, with additional participation from LendingClub. Existing backers American Express Ventures, Canaan Partners, F-Prime Capital, GreatPoint Ventures, and Goldman Sachs also participated in the round, which brings the company’s total raised to $50 million.

Credit Sesame, a platform for managing loans and credit scores, picks up $ 43M en route to IPO (TechCrunch), Rated: A

Credit Sesame — which lets consumers check their credit scores and evaluate options to rebalance existing debts and loans to improve that score and thus their overall “financial health,” in the words of CEO and founder Adrian Nazari — has raised $43 million. With the company already profitable and growing revenues 90% each year for the last five, Nazari said that this round is likely to be the last round the company raises before it goes public.

Household debt in the U.S. continues to rise and as of this year now stands at nearly $14 trillion.

Fintech startup CrowdBureau closes $ 1.1 million Series A equity funding with $ 9.7M valuation (Tech Startups), Rated: A

CrowdBureau Corporation, a fintech startup and index provider, has closed $1.1 million Series A equity funding to expand its series of benchmarks and launch a pilot program for its patent-pending regulatory technology product. The round, which values the company at $9.7 million, was led by Clydagh Limited, Estuary Holdings Ltd. and Alpama Limited along with existing investors.

Some Companies Offer a New Benefit: Payroll Advances and Loans (WSJ), Rated: A

A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention.

Employers including Walmart Inc. and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.

Lendingblock Launches Institutional Crypto Lending Platform (Lendingblock), Rated: A

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the launch of its institutional lending platform on September 3, 2019. The lending product, which is a reinvented version of securities lending from traditional capital markets, is the first exchange fully dedicated to pure crypto lending and aims to support the needs of the broader cryptocurrency market by providing a secure and liquid venue for lending and borrowing needs of institutional market participants.

Upon launch, Lendingblock platform users will be able to borrow and lend BTC, ETH, PAX and USDT on a fully collateralized basis, for loan terms of 1, 7, 14 and 30 days, with a minimum trade size of $100,000 equivalent of a specified digital asset.

How American Express uses machine learning to detect fraud (American Banker), Rated: A


A financial planner says there’s a ‘huge opportunity’ to build wealth during a recession (Business Insider), Rated: A

As long as you have a cash safety net to fall back on should you lose your job or face an unexpected expense, there’s little reason to panic, says Lauren Anastasio, a certified financial planner at SoFi, a personal-finance company.

Are P2P Loans A Viable Investment for Your Portfolio? (Yahoo! Finance), Rated: A

Peer to peer (P2P) loans allow you to act as a bank, providing loans directly to other individuals or businesses in exchange for a return on your investment via interest payments. Investing in P2P loans, which are typically smaller than a traditional bank loan, has proven to be reliable no matter the economic climate.

Judge Rejects States’ Fintech Charter Challenge, Again (Bloomberg Law), Rated: A

The Office of the Comptroller of the Currency was able to beat back a challenge by state regulators to its proposed charter for financial technology firms for a second time, but the charter remains in limbo due to other litigation.

White Oak Global Advisors Announces Commercial Property Assessed Clean Energy (PACE) Financing Program (GlobeNewswire), Rated: B

White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the California Statewide Communities Development Authority (“CSCDA”) has named White Oak as a commercial PACE Program Administrator for the CSCDA’s Open PACE Program.  As a Program Administrator, White Oak will provide up to 100% financing for energy efficiency, renewable energy, water conservation, and seismic retrofit projects on commercial real estate.

White Oak is seeking to fund projects ranging in size from $500,000 to $150 million.

United Kingdom

RateSetter revamps investment products (P2P Finance News), Rated: AAA

RATESETTER is rejigging its investment products, to boost liquidity and give the peer-to-peer lender more control over market rates.

The three new products, which will be available on 3 October, will be called Access, Plus and Max. Access will offer three per cent interest and no fees to access money; Plus will offer four per cent interest and cost 30 days’ interest to access money; and Max will offer a five per cent interest rate, with a fee of 90 days’ interest to access money.

Funding Circle Amateur Lenders Facing Longer Waits To Cash Out (Morningstar), Rated: AAA

Amateur lenders on peer-to-peer lending platform Funding Circle Holdings PLC are facing waits of 100 days to cash out of their loans, it has emerged.

Investors who provide funding for small businesses through the platform can list old loans for resale to other investors if they wish to withdraw all their money.

But the PA news agency understands that the amount of time taken to re-sell the loan parts has risen from just a few days in January to up to three months in recent transactions.

Funding Circle reveals inclusion in FTSE4Good Index Series (Funding Circle), Rated: A

Funding Circle today reveals its inclusion in the FTSE4Good Index Series, which recognises companies that demonstrate the highest standards of corporate governance and sustainability.

Woodford trust is on the FTSE 250 casualty list (The Times), Rated: B

The investment trust, which focuses on early-stage companies, was one of six companies to be relegated from the second tier of quoted stocks.

Among them is Funding Circle, the online peer-to-peer lender aimed at small and medium-sized companies, which floated at 440p a year ago. Last night its shares closed at 110¼p.

P2PGI blames writedowns and Funding Circle bad debts for poor July (P2P Finance News), Rated: A

P2P GLOBAL Investments has blamed writedowns in the value of two equity stakes and bad debts from Funding Circle for a “disappointing” performance in July.

The alternative finance-focused investment trust delivered a 0.33 per cent NAV return for the month of July, down from 0.48 per cent the previous month. This brought the trust’s year to date return to 2.88 per cent, and 23.93 per cent since inception.

Investors ‘nearly’ double IFISA holdings (AltFi), Rated: A

Small investors have parked £588m across 40,400 accounts by the end of the second quarter of this year, according to trade body the Peer-to-Peer Finance Association (P2PFA).

The compares with around £300m invested in this product 12 months ago across major platforms such as Funding Circle, Ratesetter, Zopa, said the trade body.

Lending Works targets profitability and £10m turnover in 2019 (P2P Finance News), Rated: A

The peer-to-peer consumer lender reported a loss of just over £2.1m for the year ended 31 December 2018, up from £1.41m the previous year, which chief executive Nick Harding (pictured) attributed to a larger wage bill.

There is no requirement for businesses to report revenues in small company accounts, but Harding revealed that the firm saw revenues rise to £6.2m last year and is targeting £10m this year.

Peer to Peer Lender Folk2Folk Tops £300 Million in Lending (Crowdfund Insider), Rated: A

Folk2Folk, a peer-to-peer lender for local, rural and SME businesses, has now surpassed £300 million in lending, according to a company release. Folk2Folk notes that it is the 3rd largest P2P Lender to UK businesses in terms of money lent.

P2PFA boss Paul Smee: ‘Lendy was an outlier that should not have been authorised’ (AltFi), Rated: A

The collapse of Portsmouth-based property peer-to-peer firm Lendy, with outstanding loans of more than £160m, and some £90m in default, prompted the new rules from the FCA. The watchdog is also carrying out an in-depth report into the firm’s failure, which affected with some 21,500 investors. Critics argue that Lendy under competitive pressure wrote poor quality loans to swell its balance sheet, which then turned bad.

However, the Lendy crash, taken together with the poor float of the sector’s biggest firm Funding Circle last October, which languishes 75 per cent below its 440p float price at around 112p this week, has tarnished the sector.

UK Fintech Curve fastest startup ever to reach £4m Crowdfunding on Crowdcube (Fintech Finance), Rated: B

Last month, Curve announced plans to launch a seven figure crowdfunding campaign for early September, with plans to raise £1million. However, just 42 Minutes after launching to pre-registered customers, Curve had raised four times that figure, breaking records in the process. The current overfunding amount stands at £5million.

China

Form 6-K Yirendai Ltd. For: Sep 30 (Street Insider), Rated: AAA

  • Cumulative number of investors served reached 2,185,513, representing an increase of 1% from 2,159,490 in the first quarter of 2019 and compared to 1,974,984 in the second quarter of 2018.
  • Number of active investors in the second quarter of 2019 was 671,957, representing a decrease of 13% from 768,514 in the first quarter of 2019 and compared to 928,251 in the second quarter of 2018.
  • Total assets under management (“AUM”) for Yiren Wealth was RMB 43,604.2 million (US$ 6,351.7 million) as of June 30, 2019, representing a decrease of 7% from RMB 46,663.1 million as of March 31, 2019. Average AUM per investor reached RMB 149,480 (US$ 21,774) as of June 30, 2019, representing an increase of 7% from RMB 139,473 as of March 31, 2019.
  • AUM of non-P2P products amounted to RMB 354.3 million (US$ 51.6 million) in the second quarter of 2019, representing a decrease of 23% from RMB 457.7 million in the first quarter of 2019 and compared to RMB 951.0 million in the second quarter of 2018. Non-P2P products include money market funds, mutual funds and insurance.

Consumer Credit—Yiren Credit

  • Total loan originations in the second quarter of 2019 reached RMB 9.7 billion (US$1.4 billion), representing a decrease of 12% from RMB 10.9 billion in the first quarter of 2019 and compared to RMB 18.2 billion in the second quarter of 2018.
  • Cumulative number of borrowers served reached 4,491,466, representing an increase of 2% from 4,404,812 in the first quarter of 2019 and compared to 4,027,254 in the second quarter of 2018.
  • Number of borrowers in the second quarter of 2019 was 135,246, representing a decrease of 10% from 149,715 in the first quarter of 2019 and compared to 267,628 in the second quarter of 2018.
  • The percentage of loan volume generated by repeat borrowers was 35.9% in the second quarter of 2019.
  • 52.5% of loan originations were generated online in the second quarter of 2019.
  • Remaining principal of performing loans reached RMB 58,071.3 million (US$8,459.0 million) as of June 30, 2019, representing a decrease of 8% from RMB 63,213.8 million as of March 31, 2019.

Yirendai Ltd. (YRD) Q2 2019 Earnings Call Transcript (The Motley Fool), Rated: AAA

As of September 2019, the line of credit we have obtained from our institutional partners has increased from RMB19 billion in Q1 2019 to close to RMB30 billion. We are now working with approximately 10 partners, including leading joint stock and city commercial banks. We expect loan origination funded by institutional partners to reach approximately 30% by the end of this year.

China Rapid Finance Retains China Merchants Bank New York and Pangaea Finance as Co-Financial Advisors for Recapitalization and Restructuring (Yahoo! Finance), Rated: AAA

China Rapid Finance Limited (XRF) (the “Company”) today announced that its Board of Directors has retained China Merchants Bank Co., Ltd., New York Branch (CMBNY), and Pangaea Finance as separate Co-Financial Advisors, and Pangaea Finance as Structuring Agent, to advise it for strategic alternatives, including but not limited to potential strategic partnerships, recapitalization of certain operating companies, and for a related reconfiguration of the Cayman company as a listed investment vehicle for China credit.

Central bank to include troubled P2P lending industry in credit system (Technode), Rated: A

China’s central bank will include the country’s troubled online peer-to-peer (P2P) lending platforms in its credit reference system as the clampdown on illegal financial services continues, Chinese state-run media reported on Wednesday.

China’s credit system to cover P2P lending in tightening regulation (Xinhua), Rated: A

P2P lending platforms in operation will provide certain information such as online lending interest rates to credit reference agencies such as operators of financial credit information basic databases and Baihang Credit, China’s only licensed and market-oriented personal credit agency, according to an official guideline.

China Central Bank’s Credit System to include P2P Lending Platforms amidst tightening regulations (China Knowledge), Rated: A

Credit information of P2P lending platforms will be collected, regardless of their operational status. New penalties will also be imposed on defaulting borrowers of P2P online lending. Some of the penalties include higher loan interest rates and restriction limits to loan and insurance services.

Chinese entrepreneur among 41 arrested over illegal P2P platform (CGTN), Rated: A

Property mogul and founder of a leading Shanghai contemporary art museum Dai Zhikang has turned himself into police following the collapse of a peer-to-peer lending platform, as China continues to crackdown on illegal online lending.

Shanghai police confirmed Monday that Dai, the founder and head of Zendai Group, was among 41 people being investigated over illegal fundraising through an online P2P platform called Laocaibao.

European Union

Revolut is looking to hire 400 customer support staff following compliance complaints (Business Insider), Rated: AAA

Revolut is looking to hire up to 400 staff at a new base in Portugal, a move that will increase its employee headcount by almost a third.

Source: Business Insider

German online bank N26 expands to Switzerland (Verdict), Rated: A

German online bank N26 has launched its services in Switzerland, as it continues to build up its footprint across the globe.

Binance Crypto Lending Program expansion – a bad idea for traders (FX Street), Rated: A

Binance is one of the latest entries in launching its crypto lending platform on August 28. In the first phase, it began with a short period fixed return on Binance (BNB), USDT (Tether) and Ethereum Classic (ETC). It provides an annual return of 15%, 10%, and 7% respectively, beginning with a 14-Day fixed period. Binance starts with about $30 million in crypto-lending. Moreover, the annual interest offered is higher than the return from banks.

International

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

Milestones in culumulative volume lent crossed this month:

  • Bondora: 250M EUR
  • Fellow Finance: 500M EUR
  • Mintos: 3000M EUR
  • Thincats: 500M GBP

The total volume for the reported marketplaces in the table adds up to 634 million Euro. I track the development of p2p lending volumes for many markets.

Source: P2P-Banking

Fall Conference Season for Fintech Kicks Into Gear This Month (Lend Academy), Rated: AAA

ABS East

When: Sept 22-24, 2019
Where: Miami, FL
Link:  /> Discount code: LEND10

Lend360

When: Sept 25-27, 2019
Where: Dallas, TX
Link: 

LendIt Fintech Europe

When: Sept 26-27, 2019
Where: London, UK
Link: 
/> Discount code: LENDACADEMYVIP

Moneyconf

When: Nov 4-7, 2019
Where: Lisbon, Portugal
Link: 

Money2020 China

When: Dec 4-6, 2019
Where: Hangzhou, China
Link: 

I WISH I’D BOUGHT IT WITH KLARNA (The Drum), Rated: B

The Swedish ‘pay later’ service, Klarna has launched its first international campaign – ‘I wish I’d bought it with Klarna’ – with the internet sensation Celesta Barber as its leading lady.

Australia

Ethereum lossless lottery PoolTogether is still innately flawed despite updates (finder), Rated: A

How do you encourage people to practice responsible saving? Easy. You shake it up with a dose of randomness and call it a lottery instead. This is the basic principle behind Pool Together, a lossless lottery designed in such a way that there are no losers. The idea is that everyone always gets back the price of their ticket, but one lucky person walks away with a lot more than that.

Pool Together is built on Ethereum, and utilises the Dai stablecoin in combination with the Compound crypto lending system.

India

Online lender Namaste Credit launches digital-only bank (Finextra), Rated: AAA

Online lending marketplace Namaste Credit today said that it is launching its Neobanking solutions for MSMEs, becoming a full-fledged “Digital-Only Bank” with a foundational SaaS play.

IndiaMoneyMart opens the first East-India branch for NBFC-P2P Lending (United News of India), Rated: A

Making sense of regulatory sandbox for Fintech startups (Vantage Asia), Rated: A

Over the past few years India has seen rapid development in the financial technology sector and it has the second highest number of Fintech startups in the world. According to certain estimates, India’s Fintech sector added about 1,300 startups from 2015 to 2018. According to the National Association of Software and Services Companies, India’s Fintech market is expected to be worth US$2.4 billion by 2020.

India Government Panel Pushes for Fintech, Regtech Adoption (Regulation Asia), Rated: A

The panel has also proposed the development of a marketplace model for P2P lending, and the introduction of virtual banking in India.

Why fintech panel believes P2P platforms can ease credit supply (India Times), Rated: A

While the importance of P2P lending sector in India is understood by all stakeholders, and a lot has been done over the last few years to encourage the sector, a lot more needs to be done to accelerate its growth.

APAC

Leading Southeast Asian Peer to Peer Lender Funding Societies Revamps with New Executive Team (Crowdfund Insider), Rated: AAA

Funding Societies, one of the largest peer-to-peer (P2P) lending platforms in Southeast Asia, has revamped its executive team with new hires.

Matt Lambie joins as the Chief Technical Officer, Dheeraj Chowdhry as the Chief Executive Officer and Jared Goldberg as the Chief Data Officer.

Top 10 APAC Startups Reigning the Future Finance Industry (Banking CIO Outlook), Rated: A

Africa

AlphaCode of South Africa Invests $ 1.5 Million in Three Domestic Fintech Startups (CryptoNewsZ), Rated: AAA

AlphaCode is the incubation and investment arm of Rand Merchant Investment Holdings, and in a new development, the company has decided to invest a combined $1.5 million in three separate Fintech startups in South Africa. The companies in question are Zande Africa, which is a platform meant for merchant finance, while the others are Bright On Capital, a peer to peer lending firm and Livestock Wealth, an agricultural investment startup. AlphaCode invested $655,000 each on Bright On Capital and Zande Africa, while Livestock Wealth got an injection of $131, 000.

Authors:

George Popescu
Allen Taylor

The post Thursday September 5 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 7 2019, Weekly News Digest

chinese p2p lenders

News Comments Today’s main news: Funding Circle US small biz loan portfolio surpasses $2B. JPMorgan Chase to compete with Affirm, Klarna on POS financing. Funding Circle expands into Canada. Funding Circle financial highlights. Revolut fights new allegations. Dianrong lays off 2,000. Today’s main analysis: U.S. credit card debt hits record $870B IN 2018. International P2P lending volumes for February 2019. Today’s thought-provoking […]

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

chinese p2p lenders

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Funding Circle US Small Business Loan Portfolio Surpasses Most Banks with $ 2 Billion Lent Through Platform (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that investors have lent more than $2 billion through its platform to small businesses in the United States. With this milestone, Funding Circle now has more US small business loans outstanding than almost 98% of FDIC-insured banks1.

Funding Circle now has more than $1 billion of small business loans in its portfolio, which means that if it were a bank it would be among the 50 largest small business commercial & industrial loan portfolios in the United States, according to the latest FDIC data available1. However, unlike a bank, Funding Circle provides a single financial product. Its fully amortizing business loans, powered by sophisticated technology and proprietary credit models, enable business owners to access financing with speed and efficiency, allowing them to devote more time to delivering their product or service to the market and ultimately create more jobs and vitalize their communities.

JPMorgan Chase Enters A Hot Fintech Space: Point-Of-Sale (POS) Financing (Forbes), Rated: AAA

JPMorgan Chase announced that it is moving into the point-of-sale (POS) financing market.

POS financing certainly isn’t new. In 2016, merchants in nine different retail categories saw more than 160 million POS loan applications—only 53% of which were approved, however.

Source: Forbes

Filene Research Institute 

Source: CORNERSTONE ADVISORS

Shopping at Discount Stores Could Help Get You a Loan (WSJ), Rated: A

Discount-store shoppers may soon get an unexpected benefit: better odds when applying for personal loans from Discover Financial Services.

Discover, best known for its credit cards, plans to use artificial intelligence to assess hundreds of unusual characteristics about personal-loan applicants in an attempt to get its rising losses under control.

U.S. Credit Card Debt Closed 2018 at a Record $ 870 Billion (Bloomberg), Rated: AAA

U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.

Source: New York Federal Reserve

Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.

At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.

Source: New York Federal Reserve

LendingTree Compares Renting and Owning a Home in the 50 Largest Metropolitan Areas in the U.S. (LendingTree), Rated: AAA

Louisville, Milwaukee and Oklahoma City are the metros where median rents are cheapest when compared to median mortgages. In these areas, median rent costs are an average of $310 cheaper than median mortgage costs.

Source: LendingTree

Miami and Orlando, Fla.; and Virginia are the metros where rent payments are the most expensive when compared to mortgage payments. Median mortgage payments are an average of $215 cheaper than median rent payments in these metros.

Four of the top 10 metros where monthly rents are higher than monthly mortgage payments are in Florida. According to a recent housing study from Harvard University, low wages and too few rental units are key factors that have caused Florida’s rental affordability crisis to become the worst in the nation.

Source: LendingTree

‘Stop pitting misery against misery’: How TrueAccord is turning debt collections into a financial service (Tearsheet), Rated: AAA

Ohad Samet has spent his career working on lending analytics — first, at a firm called FraudSciences, which got bought by eBay. He ran analytics at Analyzd, which was acquired by Klarna. As the chief risk officer at the pay later lender, he became aware of how antiquated the debt collections industry was. Call centers, dialing for dollars, it just hadn’t kept pace with the front end of the business.

So, in 2013, he left and with two co-founders started TrueAccord, which is essentially a nearly-automated marketing and sales campaign for debt collection. Based on consumer data and data from the lender, it can determine who to call, what time to call, what communications channel — phone, text, email, chat — and what message to use. It purports to be a much better experience for consumers.

KBRA Assigns Preliminary Ratings to Kabbage Asset Securitization LLC, Series 2019-1 (BusinessWire), Rated: A

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the “Notes”) issued by Kabbage Asset Securitization LLC, Series 2019-1 (“Kabbage 2019-1”).

This transaction is Kabbage, Inc.’s (“Kabbage” or the “Company”) third securitization and it is expected that the proceeds of the sale of the Notes will be used to refinance the Company’s existing $610 million outstanding Kabbage Asset Securitization LLC Series 2017-1 Notes and provide extra funding capacity for Kabbage.

Notes Preliminary Rating Initial Principal Balance
Class A AA (sf) $421,221,000
Class B A (sf) $59,715,000
Class C BBB (sf) $69,348,000
Class D BB (sf) $35,316,000
Class E B (sf) $24,400,000

Peer to Peer Lending Platform Beehive Raises $ 4 Million (Crowdfund Insider), Rated: A

Beehive, a peer to peer lending platform servicing SMEs in the MENA region, has closed on $4 million Series B funding round, according to a release from the platform. This most recent funding brings the Fintech’s total raised to $15.5 million since platform launch.

Loan officers cast serious doubt on latest loanDepot, Chase mortgage promises (HousingWire), Rated: A

In recent LendingLife news, loanDepot announced its new digital mortgage, which it says can identify significant time and cost-savings for borrowers in seven minutes.

AI Foundry Unveils Next-Generation Artificial Intelligence Platform and Mortgage Automation Solution (PR Newswire), Rated: A

AI Foundry, an artificial intelligence (AI) platform company, today announced the launch of its next-generation Cognitive Business Automation Platform along with a new Agile Mortgages solution. This patent-pending technology incorporates the latest in AI, machine learning and machine vision to deliver a higher level of problem solving and decision making for enterprises. The new Agile Mortgages solution, which is built on top of the platform, automates manual, labor-intensive mortgage processes, enabling lenders to dramatically accelerate the lending lifecycle.

Could A Selfie Put An End To False Identities? (Forbes), Rated: A

Earlier this year, 

Auto Loan Statistics (LendingTree), Rated: A

Key facts

  • Americans originated a record 2.5 million auto loans in July 2018, the most recent month for which data is available.
  • Americans owed more than $1.14 trillion in auto loans as of September 2018, 23% more than 2013.
  • Outstanding auto loan balances are rising about 3.1% a year in dollar amounts.
  • Auto loans accounted for about 8% of outstanding consumer debt in 2018, including mortgages, about 2 percentage points higher than a decade earlier.
  • Gen Xers carry the highest auto loan balances with a median of $18,741 and are the most likely of other age groups to have a car loan.
  • The average new car loan originated by a finance company is $29,921.27, an increase of more than $5,000 from 10 years earlier.
  • Average monthly payments are rising, too:
    • $530 for new vehicles, up 5% year over year
    • $381 for used vehicles, up 4%
    • $430 for a new vehicle lease, up 4%

For many Americans, car loans are their largest debt burden, a weight which threatens to become overwhelming as they stretch loan terms to buy increasingly expensive vehicles — new and used. To get the full picture of auto loan debt in the U.S., we looked at auto loan originations, prices and term lengths. Here are the numbers.

Online bank Chime now valued at $ 1.5 billion after new funding round (CNBC), Rated: A

Digital bank Chime has tripled its valuation, officially passing the $1 billion-mark this week.

The San Francisco-based company announced a $200 million Series D financing round that brings its new valuation to $1.5 billion. Investors were led by DST Global, which also participated in earlier fundraising rounds, and new investors Coatue, General Atlantic, Iconiq Capital and Dragoneer Investment Group, Chime said Tuesday.

Jason Gross of Petal (Lend Academy), Rated: A

In this podcast you will learn:

  • The personal experience that led to the founding of Petal.
  • Their core product and how it is different to what else is out there.
  • A profile of their typical customer.
  • How they are approaching underwriting.
  • The typical APRs and credit limits they offer on their card.
  • How they are protecting their company against fraud.
  • How Petal is getting the word out about their credit card.
  • The large waiting list they had when they launched last year.
  • The early signals they are seeing with credit performance.
  • How they are generating income.
  • The primary funding sources they use in providing the credit lines.
  • What they mean on their website when they say “a credit card with a conscience”.
  • Their biggest challenge as they grow their company today.
  • The goals the Petal team has for 2019.

FINRA Approves Circle’s Acquisition of SeedInvest, Continues Mission of Tokenization (Crowdfund Insider), Rated: A

FINRA has given their stamp of approval to the acquisition of SeedInvest by Circle. The crypto focused company announced the purchase of SeedInvest in October of 2018.  The acquisition of a regulated securities crowdfunding platform by the blockchain based Circle represented a seminal turning point in the crypto industry.

Virginians say online lender uses tribal immunity to get around state laws (Pilot Online), Rated: A

Virginians are taking a lead attacking what they say is a legal loophole that has left thousands of people stuck with debt they can’t escape.

The case involves loans at interest rates approaching 650 percent from an online lender, Big Picture Loans, associated with a small Indian tribe on Michigan’s Upper Peninsula.

Lula Williams of Richmond, the lead plaintiff in one case, still owes $1,100 on the $1,600 she borrowed from Big Picture Loans — debt that she’s already paid $1,930 to retire. One of her loan documents reports the annual percentage rate for her debt at 649.8 percent, calling for her to pay $6,200 on an $800 debt. Her first three installments on that loan, each for $400, would have yielded Big Picture a 50 percent profit on the loan after just three months, court records suggest.

How to Invest in Real Estate without Buying Property (Realty Biz News), Rated: B

Lastly if you love jumping on the latest trends, then jumping on one of these companies services that how recently cropped up will help you get involved in real estate investing. You are able to invest in commercial and residential real estate investments and receive cash flow distributions in return, and just like the other options on this list, someone else is doing the heavy lifting whilst you reap the rewards.

Whilst there is no one standout company that we can confidently recommend, since they all havent been around long enough for us to make a property judgement, Fundrise returned an average of 11.4% on the invested dollars in 2017 and a further 9.11% in 2019.

The best part is you don’t even need to be an accredited investor to open an account, meaning if you’re new to the market, then this is your chance to get in on something thats shiny and new and that could potentially give you a place to invest your cash and reap the rewards of owning physical property.

Elevate Appoints Kathleen Vanderkolk as Head of Enterprise Risk Management (BusinessWire), Rated: B

Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it has promoted Kathleen Vanderkolk to Chief Risk Officer.

Vemanti Group Engages With Securitize And DSLG To Launch Digital Security Offering For eLoan, JSC (GlobeNewswire), Rated: B

Vemanti Group, Inc. (OTC PINK:VMNT), a technology-driven holding company, today announced that it has engaged with Securitize, Inc. (“Securitize”) and Digital Securities Law Group (“DSLG”) to launch a Digital Security Offering (“DSO”) to fund and propel the business objectives for eLoan, JSC (“eLoan”), its portfolio company. The Company recently announced that it has completed its investment in eLoan, a fintech company based in Vietnam.

The offering will be conducted by the Company on behalf of Fvndit, Inc. (“Fvndit” – formerly Directus Holdings, Inc.), eLoan’s US-based parent company, as the issuer. The issuance will be managed by Securitize’s platform and DS Protocol. Details of the offering will be announced at a later date.

United Kingdom

Funding Circle Announces Expansion to Canada (PR Newswire), Rated: AAA

Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced its plans to enter the Canadian market and expand access to fast, affordable and transparent financing for Canadian small businesses.

Funding Circle will establish operations in Canada in the second half of 2019 with an office located in Toronto. The business will be led by Tom Eilon, who previously led the commercial strategy for Funding Circle in the United Kingdom.

Funding Circle Holdings plc (Funding Circle), Rated: AAA

Financial Highlights:

  • Strong Group performance delivering IPO guidance whilst continuing our strategy of investing for growth
  • Revenue of £141.9 million (2017: £94.5 million). Year-on-year growth of 55%1 (excluding property2) exceeding c.50% guidance stated at IPO
  • Segment adjusted EBITDA3 of £7.0 million (2017 loss: £3.9 million) with margin of 5% (2017: negative 4%)
  • Adjusted EBITDA4 loss of £28.5 million (2017 loss: £25.1 million) with margin improving to negative 20% (2017: negative 27%)
  • Basic loss per share of 18.2 pence (2017 loss: 14.0 pence)
  • Loss before tax £50.7 million (2017 loss: £36.3 million)
  • Free cash outflow5 of £42.0 million (2017 outflow: £35.3 million)
  • Cash of £333.0 million, £244.1 million higher than at the end of 2017 (£88.9 million), including IPO proceeds of £300.0 million, before expenses of £15.0 million

UK Peer to Peer Lending: Loans top £800 Million in Q4 as Industry Matures (Crowdfund Insider), Rated: AAA

The UK Peer-to-Peer Finance Association(P2PFA) has published fourth quarter numbers for member platforms. According to their data, cumulative lending now tops £9.5 billion with over £800 million originated during the period.

The P2PFA states that platforms facilitated loans worth nearly £3 billion during 2018.

In Q4, P2PFA platforms originnated £527 million to businesses and £282 million to almost a quarter-of-a-million consumers. Cumulative lending among P2PFA platforms has now exceeded £5.5 billion for business lending and £4 billion for consumer lending.

Revolut is fighting back after yet more allegations were made against the $ 1.7 billion fintech unicorn after a week from hell (Business Insider), Rated: AAA

The Financial Times on Tuesday alleged that the UK National Fraud Intelligence Bureau (NFIB) is examining a complaint from a customer, adding to Revolut’s issues after a difficult week for the fintech.

However, the allegations were denied by Revolut and the Financial Times article was subsequently taken down.

The FT, citing emails, reported on an incident in which £70,000 was incorrectly paid into a Revolut customer’s account.

Is the Innovative Finance Isa worth it? We look at the pros and cons (City A.M.), Rated: A

At barely three years old, the Innovative Finance Isa still has some proving to do. And for some savers, it’s a product that is deemed too risky. But how risky is it really?

Of course, the IFISA is merely a tax-free wrapper, so the risk actually depends on the underlying investments held within.

And while investments can vary wildly, most IFISAs are invested in the peer-to-peer (P2P) lending market, where lenders are grouped together to invest capital through an online platform which distributes funds to borrowers.

How savers can use an Innovative Finance Isa to reap the rewards from the property market (City A.M.), Rated: A

Investors can open one IFISA per tax year, and have an annual subscription allowance of £20,000, with substantial tax-free returns.

There are also several different opportunities available when it comes to property IFISAs, including buy-to-let and development.

Wealth management firm urges greater awareness in investments (Wealth Adviser), Rated: B

Last year, the National Trust was criticised for investing in a fund with holdings in fossil fuel companies, while the Church of England was shown to have ploughed funds into Wonga, despite having publicly criticised the payday lender.

Provident fights back in bitter £1.3bn bid battle as it accuses former boss of destroying shareholder value and failing to grasp modern technology (This is Money), Rated: B

A war of words has erupted between the doorstep lender Provident Financial and its former boss John van Kuffeler as he mounts a £1.3billion hostile takeover bid.

The Provvy has accused van Kuffeler of destroying shareholder value and failing to grasp modern technology.

China

Dianrong has laid off as many as 2,000 employees amid a regulatory crackdown (Business Insider), Rated: AAA

China-based peer-to-peer (P2P) lender Dianrong has laid off as many as 2,000 employees and will shut down 60 of its 90 brick-and-mortar outlets, which helped verify the identities and qualifications of users, according to Bloomberg, citing people familiar with the matter.

Additionally, the company has been accused of falling behind on wages and severance pay, per a Chinese media outlet cited by TechNode . The company reportedly started shrinking its business around 10 months ago, despite securinga $70 million funding round in January to expand its services, including SMB lending.

Source: Business Insider
European Union

How PSD2 Will Change Lending (PYMNTS), Rated: AAA

Merchants and customers are now transacting under PSD2 and GDPR in the European Union (EU) — regulations that allow a greater window into how customer data is being used. While these regulations are aimed at increasing consumer trust by allowing them more transparency, many consumers in the region are still adjusting.

French regulatory body, the Commission nationale de l’informatique et des libertés (CNIL), has fined Googlethe equivalent of $56 million for noncompliance with GDPR within the region, alleging that the information services company was using EU customer data for advertising purposes without obtaining clear consent from those customers.

For third-party providers, such as P2P lending and investment provider Zopa, PSD2’s data transparency rules provide an opportunity to “level the playing field” when it comes to gaining that consumer trust.

International

10 Fintechs Have Already Raised Monster Rounds in 2019 (Lend Academy), Rated: AAA

We came into 2019 after a strong year of fintech investments with about $40 billion invested globally according to CB Insights.

Acorns

  • $105 million round led by NBCUniversal and venture arm of its parent company Comcast. NBCUniversal is now their largest shareholder.

Better

  • $70 million Series C from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP). The company originated $1.3B in mortgages in 2018.

Figure

  • The $65 million Series B round was led by RPM Ventures as CEO Mike Cagney continues to show his fundraising prowess. Their valuation is said to be $365 million today about double the valuation from last year. Read our coverage here.

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

The total volume for the reported marketplaces in the table adds up to 531 million Euro.

This month I added Bondster (use Bondster Promotion Code 5506 to get 1% cashback).

Source: P2P-Banking

Omidyar Network spins out its fintech investment arm as Flourish, with up to $ 300 million (TechCrunch), Rated: A

After twelve years spent investing in impact-oriented financial services startups around the globe, the Omidyar Network,  which serves as the family investment office for eBay founder Pierre Omidyar, is spinning off its financial inclusion investment arm as Flourish Ventures.

Equipped with up to $300 million in capital for operations and investments, the new Flourish will continue to invest around the Network’s core mission of backing companies with a dual focus on making a social impact and achieving quality financial returns.

List of Multi-Crypto Wallets To Consider For Your Portfolio (Cryptomorrow), Rated: A

Everus

Everus is a multi crypto wallet that allows for payment of bills and for mobile top-ups in multiple crypto and management of multiple crypto. The wallet, which is part of an ecosystem featuring bill payment, marketplace, peer-to-peer lending and micro-finance; allows customers to send, receive, store and withdraw multiple cryptocurrencies (more than 50 currently).

Peer-to-peer lending will allow people to offer and accept microloans affordably, which will be more targeted to the un-banked.

Infinito Wallet

Other features to be added soon include crypto lending where users can lend crypto and earn profits, exchange integration to allow users to exchange crypto from the wallet, fiat gateway to let users purchase crypto with fiat, digital identity and KYC where users can register their digital identity and use it everywhere else without needing to create another one, news portal to furnish users with happenings in the crypto space, and App Square for browsing dApps.

Quppy Wallet

It links to other parts of the company’s product ecosystem including decentralized exchange to allow users to buy and sell crypto, a licensed crypto bank, Prepaid co-brand bank cards, a decentralized peer-to-peer lending for borrowers as well as merchants, individuals, corporate, financial and non-financial institutions as well as crypto-fiat payments for merchants and 100% legal fiat-crypto-fiat transactions regardless of region and legislation.

India

P2P lenders develop new ways to build trust (India Times), Rated: AAA

Monexo ensures less risk for lenders by keeping a lender’s contribution to a loan to only Rs 1,000. So if a Monexo customer lends Rs 1 lakh on the platform, it gets split across 100 loans.

Faircent also has a similar strategy. It does not allow lenders to lend more than 20% of a single borrower’s requirement. So for an average loan of Rs 1 lakh, there will be on average 43 lenders funding that. They also advice lenders not to lend beyond Rs 5,000-7,000 for one loan.

Scaling small businesses with alternative finance (India Times), Rated: A

Lack of access to finance is the most widely cited constraint by SMEs for growth and scaling up business. Generally commercial banks perceive SMEs fall in the category of high default risk due to limited collaterals, smaller in asset size and limited historical track record.

Asia

Tightened supervision needed for P2P lending services: Deputy PM (Nhan Dan), Rated: AAA

Deputy Prime Minister Vuong Dinh Hue has asked competent ministries and sector to enhance inspections, supervision and settlement of violations related to peer-to-peer (P2P) lending model which has been springing up in Vietnam in recent two years.

E-Money, P2P Lending The Hotspots (Fitch Solutions), Rated: A

  • The e-money and payments segment continues to show strong growth, and consolidation within the sector is positive to improve services and ease competitive pressures.
  • P2P lending is emerging as a bright spot, and regulation remains lax enough for lenders to thrive.
  • Cryptocurrencies show little potential for growth as the regulator remains apprehensive towards crypto-based assets.

FINTERRA Calls for All Thought Leaders and Regulators to Envision A Global Waqf Bank (Salaam Gateway), Rated: B

Malaysia has the potential to become the first nation in the world to set up a global “Waqf” bank using blockchain technology, expounded Hamid Rashid, the Founder of FINTERRA.

The platform is a blockchain-based solution to crowdfund Waqf charity, Islamic investments, and peer-to-peer lending.

Canada

Klarna And PayBright Partner To Give More Shoppers The Ability To Pay Over Time (PR Newswire), Rated: A

Today, Klarna, a global payment provider, announces a partnership with Canadian instant financing provider, PayBright. Klarna and PayBright are joining forces to give Klarna’s 100,000 global retailers the ability to turn on a consumer finance solution for their Canadian shoppers quickly and easily.

Authors:

George Popescu
Allen Taylor

The post Thursday March 7 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

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

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.

Wednesday August 8 2018, Daily News Digest

OnDeck KPIs

News Comments Today’s main news: SoFi reports $200M loss in Q2. OnDeck jumps 18%. LendingClub sees record net revenues in Q2. Alipay fined for regulation violations. Dianrong raises $40M. Even Financial raises $18.8M. Today’s main analysis: OnDeck’s Q2 2018 earnings presentation. Today’s thought-provoking articles: GreenSky, OnDeck, LendingClub earnings. Where did it go wrong for Wonga? OnDeck’s Q2 earnings presentation. United States SoFi reports […]

OnDeck KPIs

News Comments

United States

United Kingdom

China

Other

News Summary

United States

SoFi Is Said to Report Second-Quarter Loss of $ 200 Million (Bloomberg), Rated: AAA

Writedowns of underperforming loans drove Social Finance Inc. to a second-quarter adjusted loss of about $200 million, according to people familiar with the matter.

OnDeck jumps 18% after Q2 beat and raise (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) surges 18% in early trading after reporting Q2 adjusted EPS that beat consensus by 8 cents and boosting year adjusted net income guidance to $30M-$36M.

OnDeck Reports Second Quarter 2018 Financial Results (Markets Insider), Rated: AAA

OnDeck today announced second quarter 2018 Net income of $5.8 million, Adjusted Net income of $10.0 million and Gross revenue of $95.6 million.

Source: OnDeck Earnings Presentation

Review of Financial Results for the Second Quarter of 2018

Net income was $5.8 million, or $0.07 per diluted share, improved from the Net loss of $1.5 million, or $0.02 per diluted share, in the year-ago period.

Adjusted Net income was $10.0 million, or $0.13 per diluted share, compared to Adjusted Net income of $4.7 million, or $0.06 per diluted share, in the year-ago period.

Unpaid Principal Balance grew 3% sequentially and 8% from a year ago to $1,027 million. Originations of $587 million were consistent with the prior quarter reflecting an increase in the number of loans funded and decrease in the average loan size.  Originations increased 26% from a year ago with growth in both term loans and lines of credit.

Gross revenue increased to $95.6 million, up 6% from the prior quarter and 10% from the year-ago quarter, driven by higher Interest income. The Effective Interest Yield was 36.1%, up from 35.6% in the prior quarter and 33.5% in the year-ago quarter, primarily reflecting increases in average loan pricing.

Source: OnDeck Earnings Presentation

Guidance for Full Year 2018

OnDeck increased its guidance for the full year ending December 31, 2018:

  • Gross revenue between $380 million and $386 million, up from between $372 million and $382 million,
  • Net income between $10 million and $16 million, up from between $0and $10 million, and
  • Adjusted Net income between $30 million and $36 million, up from between $18 million and $28 million.
Source: OnDeck Earnings Presentation

See OnDeck’s full Q2 2018 earnings presentation here.

Why On Deck Capital Stock Is Soaring Today (The Motley Fool), Rated: A

Shares of On Deck Capital (NYSE:ONDK) were soaring by nearly 25% as of 1 p.m. EDT on Tuesday as the company beat consensus earnings expectations in the second quarter and raised its outlook for the remainder of the year.

Lending Club: bob and weave (Financial Times), Rated: AAA

Now, the top-line numbers are improving. Second-quarter figures released after market close on Tuesday showed record net revenue, up 27 per cent from a year earlier at $177m, from record quarterly loan originations of $2.8bn.

On top of all that, there was a big writedown this quarter of an acquisition made four years ago, during an ill-fated push into supplying loans to medical patients. Over the first six months, total expenses came to $1.28 for every dollar of net revenue.

Roundup of Q2 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA

GreenSky went public just a few months ago on May 24, 2018. Their IPO was significant for a couple of reasons. One was the lack of US based fintech IPOs over the last few years and the second was that GreenSky is a wildly successful business. Last year they reported $139 million in net income on revenues of $326 million.

Source: Lend Academy

OnDeck reported net income of $5.8 million for the quarter with gross revenues of $95.6 million, up 10% year over and 6% from the previous quarter. Originations grew to $587 million, up 26% from the prior year period, but down slightly from the previous quarter. The company’s trend of increasing the number of loans funded and decreasing the average loan size continues.

Source: Lend Academy

CEO Scott Sanborn noted that LendingClub’s core business is firing on all cylinders with record revenue and originations. The company has seen a 50% increase in applications year over year. Originations were $2.8 billion, up 31% year over year and up from $2.3 billion in the previous quarter. For context, the company originated their last high water mark of $2.75 billion in the first quarter of 2016. Revenues came in at $177 million, up 27% year over year.

Source: Lend Academy

Even Financial raises $ 18.8 million from GreatPoint Ventures, Goldman Sachs and others (TechCrunch), Rated: AAA

Even Financial, a fintech startup that connects the disparate entities of the financial services industry, recently raised a $18.8 million Series A round led by GreatPoint Ventures with participation from Goldman Sachs, Canaan Partners, F-Prime Capital, Lerer Hippeau and others.

What’s missing from the OCC’s fintech charter (American Banker), Rated: A

Although the OCC emphasizes that it’s holding these special-purpose charters to standards equivalent to those demanded of national banks, this is only sort of true with regard to the named prudential requirements, and it looks to be completely incorrect on critical restrictions on competitive and financial risk. These omissions have significant consumer protection, safety and soundness and structural impacts. Absent egregious violations, a charter granted cannot be revoked. The OCC should be sure it isn’t a shadow-bank enabler before it hands out these high-powered charters.

Is the backing of the banks enough for Zelle to beat Venmo? (Marketplace.org), Rated: A

Rahul Chadha follows peer to peer mobile banking for the research organization eMarketer. His firm says Zelle will overtake Venmo this year.  Chadha spoke with Marketplace’s Lizzie O’Leary about the two payment systems.

US challenger banks: who’s who and what’s their tech (Banking Tech), Rated: A

BankMobile
A digital bank created by an established US-based financial services player Customers Bancorp. BankMobile opened for business in early 2015.

It caters mainly for students and offers a low-fee checking account with no monthly fees and no overdraft/non-sufficient funds (NSF) fees. It also provides personal loans.

Chime
Founded in 2014, Chime has raised over $100 million funding to date, values the business at around $500 million and has over one million accounts. It employs around 100 people.

Endeavor Bank
Endeavor Bank opened its doors for business in San Diego, California in January 2018, following an initial capital raise of $26.6 million and the backing of over 450 investors/owners. It is a brand new bank, with no merger legacy.

Finn
Finn is a digital bank account for smartphones created by JP Morgan Chase.

GoBank
GoBank was launched in 2013 by Green Dot Corporation, which claims it to be “the first bank account designed from scratch to be opened and used on a mobile device”.

Iam Money
Iam Money has its HQ in Chicago and an office in San Francisco. It also has two offices outside the US, in Dublin and London.

It has secured $3 million of funding, and plans to have $20 million when it launches.

Marathon International Bank
A start-up bank for the Ethiopian American community, based in the Washington DC area. Its founders are Tekalign Gedamu, a retired economist and former MD of the Development Bank of Ethiopia, and Tesfaye Biftu.

Marcus
An online platform launched by Goldman Sachs – named after Marcus Goldman, one of the firm’s founders – offering no-fee personal loans and high-yield savings to consumers.

Moven
Launched in 2011 by Brett King, Moven describes itself as “the world’s first real-time mobile money tool”. It is a digital bank account with a mobile app.

N26
A challenger bank from Germany, now working on its US presence, including obtaining a banking licence. It opened early access to users in the US in October 2017 and has an office in New York with eight staff.

PurePoint Financial
PurePoint Financial was launched in early 2017 by MUFG Union Bank. It is a “hybrid digital bank” offering savings accounts and certificates of deposit (CDs).

Revolut
European banking challenger Revolut opened early access to users in the US in September 2017. It says it aims “to clean up the American banking system”. It provides digital banking services to consumers and businesses.

Simple
Digital banking service Simple was founded in 2009 in Portland, Oregon. It describes itself “a tech company, not a bank”.

In early 2014, it was acquired by BBVA Compass for $117 million.

SoFi

In early 2017, it raised another $500 million, and spent $100 million (in stock) on Zenbanx, a mobile banking start-up. Zenbanx offered a mobile account in the US and Canada that lets people save, send and spend money in multiple currencies. This deal demonstrated SoFi’s interest in branching into other financial services, with a wealth management tool in beta at the time of the acquisition.

Stash

In early 2018, Stash raised $37.5 million in Series D funding for product expansion, and shortly afterwards teamed with Green Dot Corporation and its subsidiary bank, Green Dot Bank, to launch mobile-first banking services (underpinned by Green Dot’s Banking-as-a-Service platform).

Studio Bank
In 2017, Tennessee-based Studio Bank filed an application to become Nashville’s “first newly chartered de novo bank in nearly a decade”.

Varo Money
San Francisco-based mobile banking service Varo Money was founded in 2015. It applied for a national bank charter and federal deposit insurance in mid-2017, to form Varo Bank.

Treasury urges mortgage sector to embrace digital tech (National Mortgage News), Rated: A

The Treasury Department’s recent report on how to regulate nonbanks drew praise not just from tech startups but also from mortgage industry insiders.

In addition to recommendations for a new federal fintech charter and that regulators pull back from payday lending rules, the report contained a section that might be music to a mortgage banker’s ears, including support for the industry’s automation efforts and another call to soften the use of the False Claims Act against lenders.

Blend Launches Insurance Agency (Finovate), Rated: A

Mortgagetech company Blend is venturing into insurance. The San Francisco-based company launched Blend Insurance Agency, an extension of its digital mortgage platform that offers borrowers a range of options for homeowners insurance.

RealtyMogul Sells Four Real Estate Properties on Behalf of Digital Investors (Citizen Tribune), Rated: B

The first property is a 1,242-unit self-storage facility in Fayetteville, NC. It was acquired in December 2013 and sold in January 2018. It was acquired for $6,750,000 and sold for $9,645,000, representing a 43% increase in capital value from acquisition.

The second property is a 40,000-square foot office building in Tamarac, FL. It was acquired in May 2016 and sold in February 2018. It was acquired for $4,150,000 and sold for $4,900,000, representing an 18% increase in capital value from acquisition.

The third property is a 72-unit multifamily apartment building in Ogden, KS. It was acquired in July 2013 and sold in April 2018. It was acquired for $4,000,000 and sold for $4,450,000, representing an 11% increase in capital value from acquisition.

The fourth property is a 208-unit multifamily apartment building in Euless, TX. It was acquired in February 2015 and sold in May 2018. It was acquired for $12,375,000 and sold for $20,900,000 after a value-add renovation program, representing a 69% increase in capital value from acquisition.

Zillow gets into the mortgage business, acquires Mortgage Lenders of America (TechCrunch), Rated: B

Zillow, the publicly traded real estate portal and lead generation service, has acquired Mortgage Lenders of America. This is Zillow’s first move into originating mortgages.

DriveWealth and Bambu Launch Robo Platform for Registered Investment Advisors (BusinessWire), Rated: A

DriveWealth Holdings, Inc. (“DriveWealth”), a fintech company providing brokers, digital advisors and mobile online financial services companies seamless access to the U.S. securities market, and Bambu, a global provider of robo-advisory technology, today announced the launch of a white-label, end-to-end robo-advisory platform solution for the wealth management industry.

Arizona’s Regulatory Sandbox Is Open for Play (The National Law Review), Rated: B

To be considered for admission, applicants must complete the nine-page application and pay a $500 application fee.  Each application must be for an innovative financial product or service as defined by the enabling legislation.

United Kingdom

RateSetter: FCA marketing restrictions are “disproportionate” (P2P Finance News), Rated: AAA

RATESETTER has hit back at proposed marketing restrictions for peer-to-peer lenders, stating that they are “disproportionate” and “clunky”.

Where did it all go wrong for Wonga? (The Guardian), Rated: AAA

Just when things were meant to be getting better for Wonga, it emerged at the weekend that the payday lender’s investors had to rescue it with a £10m capital injection.

The emergency fundraising is the latest episode in Wonga’s rapid rise and fall. Just six years after the company was touted for a flotation that would have valued it at more than $1bn (£770m), it is reported to be worth just $30m.

Regulation didn’t wipe out Wonga – losing its reputation did (City A.M.), Rated: A

WHEN PAYDAY LENDER Wonga launched in 2007, it was tipped to become a £1bn success story. Today, the company is worth just £23m and has only managed to avoid insolvency thanks to a last-minute £10m boost from investors. So what went wrong?

Rothschild’s Augmentum receives £3.5m Zopa boost (Citywire), Rated: A

Augmentum Fintech (AUGM), the venture capital fund spun off from RIT Capital Partners (RCP) earlier this year, has received a £3.5 million boost from the revaluation of peer-to-peer lender Zopa.

LendInvest makes a series of changes to BTL product (Bridging and Commercial), Rated: A

The specialist lender has removed its requirement for a debenture or floating charge on limited company applications.

It has also reduced its ICR assessment rate to 5% across all products with the exception of the five-year fixed interest product, which remains at 4.19%.

Why brokers should be allowed to speak to decision makers (Bridging and Commercial), Rated: A

Roy Armitage, head of credit at LendInvest (pictured above), is clear that, for a specialist lender, a good working dialogue between the underwriters and the brokers placing the business is crucial.

Participate in the Cambridge Centre for Alternative Finance Research Study (Lend Academy), Rated: B

They are winding up their largest survey ever right now. In the past they have produced multiple reports targeting the various regions around the world including: the United Kingdom, Europe, the Americas, Asia and Africa. This year they are combining everything into one big study.

If you have not participated in the survey yet time is running out (while the survey says it closes on July 22nd, they have extended the deadline for another week or so). We need every platform in this country and around the region to participate. To learn more you can read more about this comprehensive piece  in 

China

China’s Central Bank Fines Alipay (PYMNTS), Rated: AAA

Alipay, a payment affiliate of Alibaba, has been hit with a $601,846 fine by the Shanghai head office for the People’s Bank of China.

According to a report in Reuters, citing the central bank, the fine was for payment services regulations violations. The regulator didn’t provide any other details.

Dianrong pockets $ 40 million funding amid mounting P2P defaults in China (Technode), Rated: AAA

Chinese P2P lending platform Dianrong announced that it has raised $40 million of funding from Dalian Financial Investment Group Co. Ltd. The current round will increase the company’s total funds raised to date to over $500 million. Its previous investors include big titles such as Standard Chartered, GIC Private Limited, Singapore’s sovereign wealth fund, CMIG Leasing, Simone Investment Managers, etc.

China’s P2P lending meltdown (CNBC), Rated: A

China’s P2P lending meltdown from CNBC.

International

Prime Trust to Enable Real Estate Syndicators & Securities Issuers to Accept Funds in Bitcoin & Ethereum (Crowdfund Insider), Rated: A

Prime Trust, a blockchain driven trust company, announced on Monday it has launched a new technology that enables real estate syndicators and securities issuers to accept funds from investors in the form of Bitcoin and Ethereum, frictionlessly and with zero crypto-market risks to the syndicator or issuer. According to Prime Trust, the technology enables holders of these virtual currencies to invest in real estate, crowdfunding and other private and public securities offerings without having to go through the cumbersome and often confusing process of liquidating tokens and then wiring funds in USD to an escrow account at Prime Trust.

TransUnion Partners with EXL to Create Turnkey Current Expected Credit Loss (CECL) Solution (MarketWatch), Rated: B

TransUnion TRU, +0.56% announced today it is partnering with global technology and analytics company EXL EXLS, +0.93% to create a seamless technology solution for lenders to comply with the new Current Expected Credit Loss (CECL) accounting rule. Information about the new accounting rule will be highlighted during TransUnion’s webinar, “Major Hurdles to Overcome to be CECL-Ready,” scheduled for 1 p.m. CDT on August 15.

Australia

Financial advice institutions to refund over $ 800 million (Business News Australia), Rated: AAA

As the revelations from the Royal Commission continue to pour in, the Australian Securities and Investment Commission (ASIC) has revealed that, in total, Australian financial advice institutions will refund customers over $800 million in reparations over fees for no service (FFNS) programs.

Australian challenger banks: who’s who (and what’s their tech) (Banking Tech), Rated: A

86 400

Launched in June 2018, the bank is led by former ANZ Japan CEO, Robert Bell, and ex-Cuscal Payments CIO Brian Parker. Joining as incoming chairman is Anthony Thomson, co-founder and former chairman of Atom Bank and Metro Bank.

Judo Capital

For its tech, it uses a variety of different vendors. Unifii’s Business Transformation Platform is used for its technical infrastructure. For its small business lending platform, it will use one from Realtime Computing, based in Perth, Australia.

Pelikin

Digital banking start-up Pelikin aims to reshape the way people save, send and spend their money in Australia and while travelling abroad. The company’s slogan is “spend like a local”. The founder is Sam Brown.

UBank

Unveiled in 2008 and developed and supported by National Australia Bank (NAB). It operates under NAB’s banking licence, and offers home loans, online savings accounts, and term deposit accounts. UBank has more than 400,000 customers.

Volt Bank

Sydney-based Volt Bank was given Australia’s first new restricted banking licence and is now working towards becoming a fully licensed bank.

Xinja

The neobank emerged from the shadows to unveil its plans for a mobile-only digital bank in 2017. It will have no bricks and mortar branches.

MENA

Visa Invests In Israeli Start-up Behalf (RTT News), Rated: AAA

Visa, Inc. (V) on Tuesday announced an investment and partnership with Israeli start-up, Behalf, to support small business growth through easy-to-access capital and financing.

Authors:

George Popescu
Allen Taylor

Tuesday June 5 2018, Daily News Digest

Delinquency and cumulative loss on 60 month loans

News Comments Today’s main news: Revolut to seek U.S. banking license. SoFi former venture head to raise $150M fintech fund. BBVA invests 85.4M GBP in Atom Bank. China Rapid Finance receives SO27001 certification. Lendix raises $37M. Today’s main analysis: U.S. economic outlook, according to TransUnion. Today’s thought-provoking articles: Millennials are set to be next wave of single family rental […]

Delinquency and cumulative loss on 60 month loans

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

British fintech startup Revolut to seek U.S. banking license (Reuters) Rated: AAA

British financial technology startup Revolut plans to apply for a banking license in the United States, Chief Executive Officer Nikolay Storonsky said on Monday.

The company, launched in 2015, could apply by the end of the year in California, Storonsky told Reuters in an interview at the sidelines of a fintech conference in Amsterdam.

Debate on Consumer Credit Health, TransUnion Summit (Peer IQ) Rated: AAA

Source: Peer IQ

US Economic Outlook from TransUnion Financial Services Summit 2018

  1. Short-run GDP growth rate will be around 3%, driven by consumer spending and stimulus from the tax reform act. However, over the long-term, GDP growth will be hampered as the economy’s resources are approaching full employment, low trend productivity growth, and fading (and reversing stimulus) effects of tax reform.
    Source: Peer IQ
  2. Long-range inflation expectation is ~2% which would put a natural ceiling on the neutral Federal Funds Rate and the number of Fed hikes.
  3. As the Fed raises rates and tapers the reinvestment of its balance sheet, the 1-5 year part of the treasury curve will be most affected, as that’s where the majority of the Fed’s holdings lie. This should lead to a flatter yield curve and put pressure on refinancing of corporate debt, most of which is benchmarked to the less than 5-year part of the yield curve. Rising rates will also cause the debt-laden US consumer to slow down spending as a larger portion of income goes towards debt service.
  4. Tight lending standards and economic strength have brought down the delinquency rates in all asset classes except auto loans. Delinquencies in auto loans have picked up recently to 4.3%, with subprime auto doing worse.
    Source: Peer IQ
  5. US GDP growth has been aided by strong tailwinds in the form of stimulus from tax reform, low interest rates, and strong credit growth. As interest rates rise and consumer credit growth slows, investors need to keep an eye on economic fundamentals before making investment decisions.

SoFi’s Ex-Venture Head to Raise $ 150 Million Fintech Fund (Bloomberg) Rated: AAA

Social Finance Inc.’s former head of ventures and corporate development, Logan Allin, is raising a $150 million fund to invest in early stage financial technology firms in the U.S. and abroad, including Asia, Europe and Israel, according to people familiar with the matter.

Fin Venture Capital plans to invest in companies that will spin out of top fintech firms, like SoFi, Affirm Inc. and Stripe Inc. and sectors like real-estate technology, insurance technology and alternative lending. The venture firm will also look for corporate blockchain applications, but not investments in cryptocurrencies, the people said.

How student loan companies pretend to be your friend (The Guardian) Rated: A

This month, banking company Laurel Road announced that if you refinance your student loan with them, they will give you a year’s membership to MoviePass, the movie theater subscription service.

The partnership shines a light on the growing market for private student loans. Private lenders currently hold less than 10% of the $1.4tn in outstanding student loan debt but have been aggressively lobbying for legislation that would loosen the government’s monopoly.

Social Finance Inc (SoFi), one of the most high-profile private financial startups in the US, has led the charge in this regard.

Education Loan Finance Launches $ 50,000 Contest to Pay Off Student Loans (Digital Journal) Rated: A

Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the launch of a video contest where the winner will receive a $50,000 cash prize towards their student loan debt.

According to the Brookings Institute, more than 44 million Americans have student loans that total nearly $1.4 trillion. Student loan debt is now the second-largest source of household debt in the U.S. after home mortgages.

Eloan Personal Loans Review: Fast Loans in As Little As a Day (Student Loan Hero) Rated: A

According to TransUnion, fintechs, or online lenders that use financial technology to streamline the lending process, originated 32% of personal loans in the first six months of 2017.

The rates on your loan will depend on your creditworthiness, as well as your loan amount and repayment terms. Here are the ranges you can expect depending on your credit score:

  • Excellent: 5.49% to 10.49%
  • Very good: 10.49% to 13.49%
  • Good: 13.49% to 16.49%
  • Pretty good: 16.49% to 19.49%
  • Fair: 19.49% to 35.99%

Eloan looks beyond your credit score

Your credit score isn’t the only factor at play when Eloan reviews your application. The lender also looks at your debt-to-income ratio, length of credit, and debt repayment history before making a final decision.

Tom Burnside of LendingPoint (Lend Academy) Rated: A

In this podcast you will learn:

  • Tom’s background building databases and credit systems.
  • The founding story of LendingPoint.
  • The loans terms that LendingPoint offers for their loans.
  • The kinds of data they use for underwriting.
  • How they are using technology to run their underwriting and elsewhere in their business.
  • What was behind their decision to acquire LoanHero, the point of sale platform.
  • How they have integrated LoanHero into their company.
  • How they closed the additional $600m credit facility from Guggenheim.
  • Tom’s thoughts on what we are doing well and what are we doing poorly as an industry.
  • What they are working on at LendingPoint for the future.

Fintech startup SpotOn almost tripling staff this year as it squares off against Square (San Francisco Business Times) Rated: A

SpotOn, which started the year with 150 employees, now has a workforce of about 250 people, working at the company’s Financial District headquarters or in a Chicago office. SpotOn said it expects to have 400 employees by year-end.

SpotOn offers credit card processing services and a range of other services to small and mid-sized merchants, pitting the upstart against Square (NYSE: SQ).

Retail Banking Company Chime Raises $ 70M in Series C Funding (Finsmes) Rated: A

Chime, a San Francisco, CA-based retail banking company, raised $70m in Series C funding.

The round, which has valued the company at about $500m, was led by Menlo Ventures, with participation from Forerunner Ventures, Aspect Ventures, Cathay Innovation, Northwestern Mutual, Crosslink Capital, and Omidyar Network.

Fifth Third adds new fintech partner to enhance service for corporate clients (American Banker) Rated: B

Fifth Third has struck a strategic partnership with Intellect Global Transaction Banking, a unit of Intellect Design Arena that has its U.S. headquarters in New Jersey.

Why Millennials Are Poised To Be The Next Wave Of Single Family Rental Investors (Forbes) Rated: AAA

While it may be a surprise given the stereotypes surrounding the millennial generation, research from the National Association of Realtors found that millennials continue to be the largest group of homebuyers, representing 65% of all first-time homebuyers last year. According to TD Bank, 

TD Ready Challenge launches (Finextra) Rated: B

TD today launched the TD Ready Challenge, an annual North American initiative that has ten $1 million (CDN) grants available to help catalyze innovative solutions for a changing world.

United Kingdom

BBVA Announces Completion of £85.4 Million Investment in UK-Based Atom Bank (Crowdfund Insider) Rated: AAA

On Friday, BBVA announced it has completed the £85.4 million investment into Atom, which was announced in March of this year. According to the firm, With this transaction, it increases its stake in UK’s first bank built exclusively for smartphone or tablet to 39%. Atom also secured capital from some other shareholders, bringing the total capital raised to £149 million.

BBVA added that the new investment will allow Atom to continue its impressive growth, and support the uptake of new clients and build core capabilities.

P2P lenders prepared for new data rules (Peer2Peer Finance) Rated: AAA

PEER-TO-PEER lending platforms have welcomed the new General Data Protection Regulation (GDPR) and confirmed that their processes meet with the new EU standard.

A RateSetter spokesperson told Peer2Peer Finance News that the firm “has implemented a comprehensive cross-departmental project to ensure [we are] compliant with new data protection legislation,” while Landbay chief executive and co-founder John Goodall said that “we view GDPR as an opportunity to further build customer trust and confidence and continue to offer quality information to our customers.”

Light at the end of the tunnel for green energy P2P lenders (Peer2Peer Finance) Rated: A

RENEWABLE energy is in the midst of a “turnaround”, according to Trillion Fund’s chief executive, which could benefit the peer-to-peer lending sector.

Theresa Burton heads up the wound-down green energy P2P platform, which closed to new investment in 2015 after government subsidies for the sector were cut.

P2P lenders show there’s life outside London (Peer2Peer Finance) Rated: A

P2P lenders headquartered around the UK’s regions are demonstrating impressive growth, while helping create employment in other parts of the country.

One example is Manchester-based Assetz Capital, which recently passed the £500m lending milestone.

Meanwhile, Edinburgh-based P2P lender LendingCrowd recorded its best-ever month for completed loan deals in May.

Businesses should mind the scale-up gap (Spear’s) Rated: A

While some £8.27 billion was poured into SMEs last year versus £3.9 billion in 2016, 81 per cent of these deals took place at the seed and start-up stages. Of the 35,210 ‘scale ups’ – defined as companies posting annual growth above 20 per cent (across three years) with turnover between £1-20 million and ten or more employees – a mere 1,505 received investment. Furthermore the number of investment deals has plateaued over the last five years for these firms, at around the 20 per cent of investment.

The report from the Supper Club, an entrepreneurial network and advocacy group, shows that over the last five years the number of SME investment deals has risen from 1,010 in 2013 to 1,500 — a 50 per cent rise. The corresponding increase in the ‘scale up segment, however, was under 20 per cent, with the number of deals going from 260 to 280.

China

China Rapid Finance Receives ISO27001 Certification (PR Newswire) Rated: AAA

 China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE:XRF), operator of one of China’s largest consumer lending marketplaces, today announced that it achieved ISO/IEC 27001:2013 Certification (“ISO 27001”), the international standard that describes best practices for an information security management system (ISMS). Certification to ISO 27001 demonstrates that the company has adopted internationally-recognized standards to ensure borrowers and investors on its marketplace benefit from the highest level of data protection.

China’s debt collectors focus in on $ 200bn P2P debt pile (Financial Times) Rated: A

An estimated Rmb1.3tn in outstanding P2P debt as of May, according to online lending intelligence firm Wdzj.com, and a rising number of defaults have opened the door to a wave of start-ups using new technologies to try to recover tardy loans.

Ziyitong, which has sought to recover Rmb150bn since it was set up in 2016, recently launched an AI platform to help recover delinquent loans for some 600 debt collection agencies, and more than 200 lenders including Alibaba Group and Postal Savings Bank of China, Ms Sheng said.

European Union

Lendix raises $ 37 million for its lending marketplace (Tech Crunch) Rated: AAA

French startup Lendix has raised a new funding round of $37 million (€32 million). With this new influx of cash, the startup has one goal in mind. It wants to become the leading lending marketplace of Continental Europe.

Idinvest and Allianz are leading the round, with CIR SpA (De Benedetti’s holding firm) also participating. Existing investors Partech, CNP Assurances, Decaux Frères Investissements and Matmut are also participating once again.

Next year, Lendix  plans to operate in 7 countries.

BBVA teams up with Fintonic on loan marketplace (Finextra) Rated: A

Today the Spanish Fintech announced at the Money20/20 Europe event that BBVA has signed up to be part of the Fintonic loans platform, that processed the entire loan procedure for amounts of up to 30,000 euros without you having to leave the app, regardless of the institution providing the loan.

In addition to BBVA, other large banks and financial companies such as EVO Finance, Wanna, WiZink or Zaplo have partnered with the Fintonic loan platform. To date, the platform has processed over 7,500 loans for users, with a total volume of over 30 million euros and an average of 3,850 euros per contract.

First nine startups selected for EBAday2018 Fintech Zone (Finextra) Rated: B

Now in its thirteenth year, EBAday, a conference built by bankers for bankers, is expected to attract 1500 banking professionals and 70 exhibitors to the Munich, Germany conference on 12-13 June.

With interest in digital banking and fintech at an all-time high, the EBAday Fintech Zone will provide a dedicated space for innovative startups to network with and demonstrate their products to payment heads from across the European banking industry.

The first nine firms selected for this year’s Fintech Zone touch on many of the critical elements currently driving the digital agenda of banking and payments, from P2P payments to marketplace lending, Open APIs and artificial intelligence.

International

Personetics Accommodates Digital-Only and Challenger Banks (Finovate) Rated: A

Cognitive analytics company Personetics has traditionally served large banks, including six of the top 12 banks in North America and Europe. Today, however, the company launched a new offering that makes its solutions more accessible for smaller digital-only and challenger banks.

  • Pre-built banking content: The offering includes hundreds of pre-built insights, financial tips, and personalized advice that the bank can easily modify and control
  • API-first approach: Personetics uses open APIs to integrate AI functionality into a bank’s digital banking experience and allows banks to create their own brand identity and customer engagement strategy.
  • Editing tools: These tools allow the bank to retain control over the content and develop new capabilities to support its own business goals.
  • Fast time-to-market: Personetics delivers a production-level solution in just three months.
Australia

Online lenders challenging the big banks (Rate City) Rated: AAA

As the RBA leaves the cash rate on hold, new research has revealed the average home loan customer could save $82K by switching from a big four bank, to a low rate online lender.

New calculations show a family with a $350K loan looking for a fully-featured mortgage, could save up to $82,118 over the life of their loan, by going with the lowest comparable online lender, instead of a major bank.

Online lenders facts

  • Around 30% of lenders in the RateCity database are online.
  • Australia’s fifth largest home loan lender is online only (ING).
  • Nine of the 10 lowest rate lenders in our database are online lenders.

5 killer EOFY home loan deals (Mozo) Rated: A

loans.com.au Essentials Variable 80

  • 3.64% variable rate (3.66% comparison rate*)
  • No application or annual fees
  • Free extra repayments and redraw facility

Looking for a no fuss mortgage option offering up superb value? Look no further than the  Essentials Variable home loan from popular Aussie online lender loans.com.au. With a super low rate, no upfront or ongoing fees and the option to choose weekly, fortnightly or monthly repayments, this loan is easy on the hip pocket. You can also opt to split your loan between fixed and variable rates to find the perfect balance between certainty and flexibility.

India

CoinTribe, a MSME Lending Marketplace, Raises $ 10M from Sabre Partners and Existing Investors (Disrupt) Rated: AAA

CoinTribe, Gurugram headquartered credit based lending marketplace for MSMEs, has raised over $10 million equity capital in Series-B round led by Sabre Partners along with participation from existing investor, Puneet Dalmia.

With this round of funding, total equity capital raised by CoinTribe has increased to over $15 million. CoinTribe plans to use this additional capital to further enhance capabilities of its proprietary online credit algorithm, expand to new markets and further develop technology to enable faster and nimble product and credit model innovation.

Asia

How can new crowdfunder GlobalSadaqah improve transparency, impact of Islamic social finance? (Salaam Gateway) Rated: A

Umar and Ethis Ventures are behind Ethis Crowd, the world’s first Islamic real estate crowdfunding platform that raises funds for social housing development projects in Indonesia. These projects are backed by the Indonesian government. Ethis Crowd began with retail crowdfunding and moved into the institutional space when it started working with Islamic banks and large investors.

Ethis is also behind Kapital Boost, which crowdfunds financing for small and medium-sized enterprises.

In Southeast Asia, The Fintech Era Is Just Starting (Thailand Business News) Rated: A

In Indonesia, for example, Go-Pay and a number of other apps target the 51 percent of folks without bank accounts by providing cash transfers. Meanwhile, a bank called Mandiri allows people to avoid having a bank account entirely, instead letting them link their e-wallet to a mobile phone number. The wallet is topped up at kiosks and stores around the country. You can even withdraw money from your e-wallet via a Mandiri ATM.

For Indonesia’s Investree, it works like this: a small business is waiting to be paid by a client, but that won’t happen until the end of the month. So Investree lenders immediately pay the business owner the invoice amount.

Latin America

Brazil online lender Agibank says IPO may raise around 2.5 bln reais -filing (Reuters) Rated: AAA

Brazil’s online lender Banco Agibank SA set on Monday the price range for its initial public offering between 13.87 reais ($3.70) and 16.96 reais per share, according to a securities filing.

Agibank’s shareholders and the bank may raise around 2.5 billion reais in the offering, considering the mid-point of the price range, 15.41 reais. The pricing is scheduled for June 21. ($1 = 3.7447 reais) (Reporting by Carolina Mandl; Editing by David Gregorio)

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

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

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

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

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

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

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Thursday May 17 2018, Daily News Digest

aadhaar

News Comments Today’s main news: Chime surpasses 1M bank accounts. Top MPLs (SoFi, VPC, more) join Marketplace Lending Association. LendingPoint secures up to $600M credit facility. Today’s main analysis: Survey on Aadhaar, data-driven insights. Today’s thought-provoking articles: Why the credit card boom has peaked. Should banks have ‘flanker’ brands? The Baltics are stars in EU P2P lending. Top personal loans […]

aadhaar

News Comments

United States

United Kingdom

India

International

Other

News Summary

United States

Chime Surpasses One Million Bank Accounts (PR Newswire) Rated: AAA

Chime announced it surpassed one million accounts to date last month and has now processed more than $4.5 billion in total transaction volume, solidifying Chime’s position as the clear leader in the U.S. challenger banking segment.

Unlike traditional banks that charged consumers over $34 billion in fees in 2017, Chime is transforming the consumer banking experience. The company’s unique business model, which doesn’t rely on fees, allows Chime to relentlessly focus on its mission of helping members lead healthy financial lives.

 

CreditShop Introduces the Mercury Mastercard for Hardworking Americans (Pr Newswire) Rated: A

CreditShop LLC, a finance company focused on developing, marketing and servicing consumer-friendly credit products, today announced the introduction of the Mercury Mastercard. Mercury cards will provide cardmembers with complementary access to their FICO score, and account performance will be reported to major credit bureaus. The cards will be issued by First Bank & Trust of Brookings, South Dakota.

There are about 75 million Americans in the “middle market” with FICO scores ranging between 575 and 675, and many are charged high fees by sub-prime credit card issuers.

LendingPoint Secures up to $ 600 Million Credit Facility Arranged by Guggenheim Securities (Business Wire) Rated: AAA

LendingPoint today announced it has closed an up to $600 million, committed credit facility arranged by Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners.

With this new deal, LendingPoint has secured up to $1.1 billion of senior credit financing in less than one year. In September 2017, the company announced it had secured an up to $500 million committed credit facility, also arranged by Guggenheim Securities.

What are the Forces Behind the GreenSky IPO? (PYMNTS) Rated: A

Some 58 percent of U.S. homeowners will pay for home improvements this year, roughly the same level of interest in 2017, according to the fifth annual LightStream Home Improvement Survey. LightStream is the national online lending division of SunTrust Banks.

But spending plans tell a different story, one that works in favor of the GreenSky IPO. “The percentage of people intending to use a home improvement loan has grown 29 percent from 2017, with 54 percent more 18- to 34-year-olds planning to fund projects through home improvement financing,” the report said. “While overall, 30 percent of homeowners say they’ll pay for some portion of their 2018 project with a credit card, 16 percent fewer homeowners aged 18 to 34 plan to use them” compared to 2017.

Coinbase just rolled out 4 new crypto trading tools, and they offer a big clue to where the platform might be headed next (Business Insider) Rated: A

On Tuesday, the company announced the launch of four services, all centered on attracting financial institutions to its platform. The new tools include options like Coinbase Custody, a custodian partnership similar to the custodian offerings typically provided by banks to secure customers’ cash, and Coinbase Prime, a platform centered on research and market data geared toward institutional clients.

After collaborating previously at Exeter Finance and AmeriCredit, auto finance industry veterans Mark Floyd and Kenneth Wardle are teaming up again; this time to leverage what’s happening online when consumers search for financing.

According to a news release sent to SubPrime Auto Finance News this week, Floyd and Wardle have acquired an equity stake in Horizon Digital Financial Holdings, an online auto finance technology firm located in the Dallas-Fort Worth Metroplex. The transaction was effective May 1.

Horizon Digital is the parent company for online consumer loan marketplace participant myAutoloan.com.

Floyd will serve as chairman and chief executive officer of Horizon Digital, and Wardle will serve as chief operating officer.

Is Envestnet’s market dominance also its weakness? (Financial Planning) Rated: A

At well over $400 billon, Envestnet has more than six times the assets of its nearest competitor in its core asset management platform business. Tamarac, the firm’s rebalancing, reporting and practice management software powerhouse, has seen revenue grow approximately eight-fold since Envestnet bought the company six years ago.

The always-opportunistic Envestnet insured itself a pole position in data aggregation and analytics, one of the sexiest tech areas in the business, by acquiring the innovative Silicon Valley firm Yodlee three years ago.

After raising $ 110M, Circle raises announces new US dollar-linked cryptocurrency (Silicon Angle) Rated: A

Bitcoin and blockchain startup Circle Internet Financial, Inc. has raised $110 million in new funding as a “strategic investment” while also announcing its intent to launch a new cryptocurrency tied to the U.S. dollar.

The new round announced Tuesday, the first since 2016, was led by Bitmain, with the participation of IDG Capital, Breyer Capital, General Catalyst, Accel, Digital Currency Group, Pantera, Blockchain Capital and Tusk Ventures.

A fintech shifts gears to virtual cards (American Banker) Rated: A

The fintech startup Regalii, which originally built technology to help immigrants pay bills back home, has pivoted. Under a new name, arcus, it is now helping banks reissue credit and debit cards to customers whose cards have been lost, stolen or breached.

What is Elix / Elixir (ELIX)? | Beginner’s Guide (Coin Central) Rated: A

Elix is an Ethereum-based platform for payments, loans, and crowdfunding. The team is uniquely taking a mobile-first approach and focusing on usability to attract as large of a user base as possible from the start.

Elix also includes a platform, Boost, to facilitate decentralized crowdfunding campaigns using smart contracts.

Peer-to-Peer (P2P) Lending

With Elix, though, both the lender and the borrower are incentivized to follow the terms of the loan. When setting up a loan, the participants can opt to include a mining period once the loan is complete to gain additional rewards. If enabled, as a lender, you must hold the ELIX in your wallet for a certain amount of time in a system similar to Proof-of-Stake. When that holding period is complete, Elix hands out the rewards in the form of a new token, Token P. This token will most likely have a different name in the future.

If the borrower pays back the loan on time, the reward is split with the lender receiving 65% and the borrower receiving 35%. If the borrower has late payments, though, the lender receives 100% of the reward.

Why the Credit-Card Boom May Have Just Peaked (Wall Street Journal) Rated: AAA

Following some of their strongest years ever, credit-card issuers are grappling with an uneasy future.

Five of the largest credit-card issuers— American Express Co. AXP 0.87% Capital One Financial Corp. COF 1.15% Citigroup Inc., C -0.20% Discover Financial Services DFS 0.54% and Synchrony Financial SYF 0.90% —generated a median return of 2.1% on their assets for common shareholders in the first quarter, up from 2% a year earlier but down from 2.6% two years prior, according to analysis by Autonomous Research. The recent peak was 3.7% in the second quarter of 2011, according to an industry analysis by Autonomous at the time.

Top 5 Personal Loans With No Origination Fee (Student Loan Hero) Rated: AAA

To help, here’s our list of the top five lenders. Interest rates were current as of May 16, 2018. Some rates include a discount for setting up autopay. LightStream rates can vary by loan amount, repayment period, and the purpose of the debt.

Source Student Loan Hero

7 Alternatives to a Traditional Bank Account (Dough Roller) Rated: A

However, when you invest in P2P lending, you’re only purchasing notes, not entire loans. The notes represent $25 slivers of individual loans. That means that you can invest in 40 different loans with an investment of $1,000. That will help to minimize your risk.

The returns on P2P lending are impressive. Lending Club advertises average returns of about 4% to 6% per year, but many individuals are reporting much higher returns.

Coinbase’s first investment, Compound, earns you interest on crypto (Tech Crunch) Rated: A

Compound wants to let you borrow cryptocurrency, or lend it and earn an interest rate. Most cryptocurrency is shoved in a wallet or metaphorically hidden under a mattress, failing to generate interest the way traditionally banked assets do. But Compound wants to create liquid money markets for cryptocurrency by algorithmically setting interest rates, and letting you gamble by borrowing and then short-selling coins you think will sink. It plans to launch its first five for Ether, a stable coin, and a few others, by October.

Today, Compound is announcing some ridiculously powerful allies for that quest. It’s just become the first-ever investment by crypto exchange juggernaut Coinbase’s  new venture fund. It’s part of an $8.2 million seed round led by top-tier VC Andreessen Horowitz, crypto hedge fund Polychain Capital and Bain Capital Ventures — the startup arm of the big investment firm. [Update: Compound told us it was Coinbase Ventures’ first investment when it closed its round, though Coinbase notes that it’s done 8 rapid-fire investments over the past two months alongside this funding.]

NYU’s Sam Chandan on the Changing Real Estate Capital Markets (Commercial Property Executive) Rated: B

While there is potential for growth and it’s an exciting opportunity, real estate crowdfunding will remain a relatively small share of the overall market. In our view, on the long-term, banks, agency lenders, life insurance companies will remain the dominant sources of financing into the market.

 

Rene van Kesteren joins BlockFi as Chief Risk Officer (BlockFi) Rated: B

Former Managing Director of Equity Markets at BOA Merrill Lynch, Rene van Kesteren, joins BlockFi as Chief Risk Officer. BlockFi, based in New York City, serves crypto investors by offering USD loans collateralized by cryptoassets.

Van Kesteren will be responsible for the company’s risk models and product development in addition to general strategic influence as part of the company’s executive team.

United Kingdom

Is it wrong for banks to launch ‘flanker’ brands? (AltFi News) Rated: AAA

Samir Desai, co-founder and chief executive officer of one of the UK’s biggest fintech firms Funding Circle, once suggested Esme was little more than a ‘massive corporate fudge’.

For the uninitiated, Esme is the online lending platform launched by NatWest. It can advance loans of up to £150,000 to small businesses in less than an hour, utilising a wholly online process that is a great deal swifter and simpler than its progenitor, NatWest, can manage.

NatWest is by no means alone in having launched a separate digital banking or lending brand – often called ‘flanker’ brands by innovation specialists.

Victory Park Capital joins Marketplace Lending Association (Peer2Peer Finance) Rated: B

VICTORY Park Capital (VPC) has joined US industry body the Marketplace Lending Association (MLA).

 

China

China’s tech giants have few worries from smaller rivals (Channel Asia News) Rated: A

Chinese start-ups and other established companies like Didi Chuxing, Xiaomi and Meituan Dianping may command high valuations but they are unlikely to dislodge leaders Alibaba and Tencent, says one observer from the Financial Times.

China’s pre-eminent tech duo of Alibaba and Tencent are approaching their 20th birthdays. Still reasonably youthful but old enough to have spawned an entire new generation of internet wunderkinder.

Peer-to-peer lending, for example, offers a graphic illustration of what can happen when multiple players are unleashed.

European Union

The Baltics, the Shining Stars in the EU P2P Lending landscape (The Baltic Times) Rated: AAA

Finbee (LV) offers average yields as high as 20%, while all of them offering returns between 10-20%.

An explanations of the yield/risk ratio is that they use quality originators, a magic formula for due diligence, using new technologies such as machine learning and artificial intelligence.

One too watch is Peerberry (LV) using outside loan originators and creating a marketplace to trade consumer loans offering a 12.49% on average.

 

International

Marketplace Lending Association Announces Nine New Members (PR Newswire) Rated: AAA

The Marketplace Lending Association (MLA) today announced the addition of nine new companies to the Association. The new members join as the MLA continues to expand its presence and engage with policymakers in Washington and around the country.  The three new lending firms include Social Finance(SoFi), LendingPoint and College Ave.  The six new Associate and Investor Council Members of the MLA include Laurel Road, Education Loan Finance (ELFI), Arcadia Funds, Victory Park Capital, PricewaterhouseCoopers, and First Associates.  The MLA now has 24 active members.

TraXion.tech announces pre-sale, ICO (Inquirer) Rated: B

Ireland-based company Pluma Technologies Ltd together with its Philippine partner Gava Technologies Inc. are raising $4M worth of Ether through a pre-sale for its TraXion tokens.

TraXion.tech Chief Executive Officer Ann Cuisia said that the company’s token sale would pave the way for TraXion to become the go-to crypto-economy for payments, peer-to-peer lending, remittances, savings, insurance, investments, and philanthropy.

The TraXion token pre-sale began last May 1, 2018 and the Initial Coin Offering (ICO) will start on June 1, 2018, respectively. TraXion tokens are currently valued at 0.001 ETH.

India

Largest Independent Survey on Aadhaar, provides Data-Driven Insights (IDinsight Press Office) Rated: AAA

IDinsight, a global development analytics firm, today released its State of Aadhaar Report 2017-18 which provides data-driven insights on Aadhaar, the world’s largest biometric system. The report is based on an independent household survey covering 2947 rural households in 21 districts across three Indian states.  The survey was conducted between November 2017 and February 2018.

The key highlights of the report are:

  • Over 96% of respondents value privacy and thought it is important to know what the government will do with their Aadhaar data. At the same time, 87% of respondents approve of mandatory linking of Aadhaar to public welfare programs.
  • Aadhaar’s coverage is widespread, but the data quality has room for improvement. The report finds a higher uptake of Aadhaar than voter identification cards. In addition, the report finds no evidence of differences in enrollment by gender, caste, religion, or education levels. The report highlights that 8.8% of Aadhaar-holders reported errors on their name, age, address, or other information on their Aadhaar letter. Compared to voter identification cards, the error-rate on Aadhaar was 1.5 times higher.
  • While exclusion from food subsidy welfare-benefits due to Aadhaar-related factors is significant, it is lower than exclusion explained by factors unrelated to Aadhaar. State capacity has a bearing on the functioning of welfare distribution, with wide variation between certain states. Overall monthly exclusion from welfare benefits ranges from 9.9% to 1.1%. Of this, Aadhaar-related factors contribute 2.2% and 0.8% respectively. Despite this, the report finds that a majority of welfare beneficiaries prefer Aadhaar-based benefits delivery in both states, as they perceive biometric authentication prevents identity fraud.
Source: State of Aadhaar Report

Read the full report here.

Peer-to-peer lending expected to see huge traction in India (The Week) Rated: A

Peer-to-peer (P2P) lending, which helps people to borrow and lend money without the help of an official financial set up such as a bank as an intermediary, is expected to see huge traction in the country in the near future. It is estimated that the value of P2P lending to be generated in India over next five years will be around $4 billion (which will be 160 times the current lending size).

However, this is sum is small when compared to China where P2P lending book currently is around $100 billion, indicating the potential for exponential growth opportunity available for P2P in India. India currently has around 30 online P2P lending platforms with a current loan book of $ 25 million.

Indian Govt’s Flagship Startup Scheme Slows Down As DIPP Hits Brakes On Funding (Inc42 Media) Rated: B

The Indian government’s $1.47 Bn (INR10,000 Cr ) Fund-of-Funds for Start-ups (FFS) , a part of the Start-up India Action Plan aimed at helping startups gather funds, isn’t seeing much action and it isn’t because of lack of trying, The Indian Express reported.

Small Industries Development Bank of India (SIDBI), which manages FFS program, has so far committed $189.3 Mn( INR 1,285 Cr) to 27 local venture capital funds under the FFS scheme, of which $20.8 Mn (INR 141 Cr)  —only about 11% — has been disbursed to these funds till April 2018.

Asia

Standard Chartered to use Robo Web’s LnB platform (Taipei Times) Rated: A

Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) yesterday entered into a partnership with peer-to-peer lending operator Robo Web Technology Co (瑞保網路科技) to expand its retail banking clientele from high-net-worth individuals to the general public.

The alliance enables borrowers to open accounts and apply for loans without visiting brick-and-mortar branches and came as competition from non-traditional players gains force.

Standard Chartered would continue to pursue affluent clients, but also aims to take advantage of the fast-growing digital banking business, which was valued at US$64 billion in 2015 and could hit US$1 trillion in 2025, Lin said.

 

How proptech is changing Hong Kong’s property industry (South China Morning Post) Rated: A

Start-ups in Asia-Pacific have received US$4.8b, or over 60pc of the world’s proptech investments, with Hong Kong and China taking US$3b of that amount.

In Hong Kong, some companies working in property have begun adopting proptech, but by and large, the industry and regulators have been slow in tapping into these advances, which analysts attribute to a few factors.

JLL said in a November report that 179 start-ups in Asia-Pacific have received US$4.8 billion, or over 60 per cent of the world’s proptech investments since 2013, with Hong Kong and mainland China taking US$3 billion of that amount.

Hong Kong is also aiming to become a global hub for innovation and technology, earmarking HK$50 billion (US$6.37 billion) this year to boost the tech sector.

 

Authors:

George Popescu
Allen Taylor

Wednesday March 14 2018, Daily News Digest

equity factor returns

News Comments Today’s main news: H&R Block, LendingTree partner on credit score access. KBRA assigns preliminary ratings to LendingClub’s CLUB Credit Trust 2018-NP1. Ant Financial consumer lending hits $95B. Non-Standard Finance buys guarantor loans business. EU rolls out new crowdfunding rules. Today’s main analysis: LendingTree’s mortgage savings tracker, mortgage rate competition index. Does strong economic growth equate to high factor […]

equity factor returns

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

H&R Block, LendingTree partner to empower clients to improve their financial well-being (Nasdaq), Rated: AAA

As part of continued efforts to help clients better understand their financial situation, H&R Block (NYSE:HRB) is partnering with LendingTree (NASDAQ:TREE) to provide clients convenient access to their credit score, LendingTree Academy and more. H&R Block clients can now seamlessly enter LendingTree via their MyBlockaccount, which is a private, secure, online portal clients can use year-round to access and add tax documents and personal information.

LendingTree Introduces New Mortgage Savings Tracker and Mortgage Rate Competition Index (PRNewswire), Rated AAA

LendingTree today announced the release of its Mortgage Savings Tracker and Mortgage Rate Competition Index. The LendingTree Mortgage Rate Competition Index is a new measure of the dispersion in mortgage pricing and will be released weekly. Built on top of the Mortgage Rate Competition Index, the Mortgage Savings Tracker will bring a new transparency to mortgage shopping by highlighting the significant savings that are available to potential borrowers for both purchase mortgages and refinancing.

Source: PRNewsfoto/LendingTree

 

Source: PRNewsfoto/LendingTree

Findings from the inaugural report:

  • Across all purchase loan requests on LendingTree (we looked at refinance loan requests separately) in 2017, we found an average Mortgage Rate Competition Index of 0.46 — this was the average spread between the lowest and highest APR offered by lenders.
  • It may not sound like much, but over 30 years translates to $21,000 in additional costs on a $300,000 loan.
  • The index was wider in the refinance market, averaging 0.55. Potential borrowers there could have saved an average of $26,000 had they shopped around to find the lowest rate.
  • Ringing in the new year, the index widened to 0.59 for potential purchase borrowers, translating to a potential savings of just over $27,000.
  • For potential refinance borrowers, again, the index was even higher at 0.63. That could result in a savings of almost $30,000. The savings increased because lenders are reacting differently to the overall uptick in rates.
  • The most recent data for the week ending 3/11/2018 showed potential savings of $26,780 for purchase and $27,616for refinancing.

See LendingTree white paper on the Mortgage Rate Competition Index here.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 (Business Wire), Rated AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 (“CLUB 2018-NP1”). This is a $301.727 million consumer loan ABS transaction that is expected to close March 21, 2018.

Source Business Wire

LendingClub trims CE on next near-prime consumer loan ABS (Asset Securitization Report) Rated: AAA

As in the past, LendingClub itself contributed only a small portion (7.55%) of the collateral for the Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1 transaction from loans it held on balance sheet, but this time only three unaffiliated parties were invited to contribute the remainder of the collateral.

source American Banker

CLUB 2018-NP1 will issue three classes of notes totaling $301.727 million. Credit enhancement for the senior $180.7 million tranche of Class A notes is 49.5%, down 30 basis points from the senior tranche of the previous transaction, which carried the same A-rating. However, enhancement for the BBB-rated Class B tranche has risen by 5 basis points to 37.4% and enhancement for the BB-rated Class C tranche has risen by 35 basis points to 15.35%, per Kroll.

DOES STRONG ECONOMIC GROWTH EQUATE TO HIGH FACTOR RETURNS? (All About Alpha), Rated: AAA

In this research report we initially focus on the Value, Size and Momentum factors from Fama-French, which are constructed as dollar-neutral long-short portfolios based on the top and bottom 10% of the US stock market. The data includes companies with small market capitalisations, excludes transaction costs and is available since 1926. We expand the factor set by the Low Volatility, Quality, Growth and Dividend Yield factors based on our own data, which is available since 2000. These are created via long-short beta-neutral portfolios and only include stocks with a market capitalisation of larger than $1 billion. Portfolios are rebalanced monthly and each transaction occurs costs of 10 basis points.

EQUITY FACTORS & REAL GDP GROWTH: 1947 – 2017

The chart below shows the returns of the S&P 500 and three factors (long-short) since 1947 sorted by positive and negative quarters of real GDP growth.

It’s worth highlighting that there were only 7 quarters of negative real GDP growth since 2000, so the results have to be taken with caution.

DIVERSIFICATION FOR AN EQUITY-CENTRIC PORTFOLIO

New Media Announces Strategic Alliance with Kabbage (BusinessWire), Rated: B

New Media Investment Group Inc. (“New Media” or the “Company”, NYSE: NEWM), one of the largest publishers of locally based print and online media in the United States as measured by number of publications, announced today that it has entered into an agreement with Kabbage, a pioneering financial services, technology and data platform serving small businesses. This alliance is intended to bring awareness of simple access to working capital through Kabbage’s fully automated online lending platform to more than five million small and medium sized businesses (SMBs) that do business in New Media’s markets.

AI as new tool in banks’ crime-fighting bag? (American Banker), Rated: A

But a funny thing has happened on the way to what should be an AI-led revolution — banks have been worrying what their regulators would say if they filed fewer suspicious activity reports, especially if their rivals continue to submit far more.

source: American Banker

“All the banks are worried that if they use machine learning, the number of SAR filings will go way down and the regulators will say, what happened?” Saleh said. “How come your SAR filings fell by 50%? Maybe there’s money laundering you’re not catching.”

Should Banks Become the New ‘Payday’ Lenders? (LendEDU), Rated: A

In early March, the Florida state legislature approved revamping regulations for payday loans, voting to allow payday lenders to make larger loans for a longer period of time.

The bill aims to allow alternative lenders to make installment-type loans up to $1,000, with a 60- to 90-day repayment period. The current law caps loans at $500 for a period of seven to 31 days.

The Pew Charitable Trusts’ proposal suggested that small banks could instead provide loans with payments capped at 5 percent of a borrower’s paycheck.

According to The Pew Charitable Trusts’ research, the average payday loan customer borrows $375 over five months and pays $520 in fees, while banks and credit unions could profitably offer the same amount over the same period for less than $100.

Bank regulators vow more flexibility in vetting fintech partnerships (American Banker), Rated: B

Senior leaders at the Federal Reserve, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau, who all spoke at a banking conference in Orlando, Fla., said they have been working with examiners to be more understanding of the budding partnerships forming between banks and fintech firms — and how to examine those relationships going forward.

Clinc wants to solve financial institutions’ AI problems (Business Insider), Rated A

Clinc, a US-based provider of conversational AI technology for financial institutions (FIs),announced the launch of a new self-service platform, Spotlight, that enables FIs to train and deploy sophisticated conversational AI software in-house, independently of vendors.

source: Business Insider

Spotlight is available in over 80 languages, and can be integrated into any digital channel, including contact centers, mobile apps, and Alexa, Google, and Facebook Messenger, allowing FIs to create a consistent user experience. Spotlight is already being used by USAA and Isbank, one of Turkey’s largest banks.

MoneyLion Plus Takes An Innovative Approach to Encourage New Investors to Save (Lend Academy), Rated: A

As a nation we are chronically bad at saving and while the savings rate went up for a time after the financial crisis it is back down near 2005 levels now which was the all time low.

MoneyLion is trying to do something about this.

I interviewed CEO Dee Choubey on the Lend Academy Podcast just over a year ago but they have made some great strides since then. I caught up with him again recently to get an update. Today, over 2.2 million people have downloaded the MoneyLion app and 1.3 million people have connected their bank account.

Behavioral biometrics company BioCatch closes $ 30M round (Bankless Times), Rated: A

Behavioral biometrics provider BioCatch today announced it has closed a $30 million financing round led by Maverick Ventures with additional participation from American Express Ventures, NexStar Partners, Kreos Capital, CreditEase, OurCrowd, JANVEST Capital and other existing investors.

What Makes Warren Buffett Such an Influential Leader? (Industry Leaders), Rated: A

A data scientist at Orchard Platform, Michael Toth, who has also worked with BlackRock as portfolio analyst has evaluated Buffett’s shareholder letters annually at Berkshire Hathaway for personal growth as a sole investor. Using statistical computing, Toth quantified and highlighted Buffett’s positivity penchant for many years according to CBNC.
And results from the analysis revealed that Buffett has the ability to balance both realism and optimism. The dataset also taught Toth about the reasons why Buffett is a legendary investor and as well as an influential leader.
Only five of the forty shareholder letters analyzed showed a negative score of sentiment, and most interestingly, they all correspond perfectly to five periods of downturn in the economy.

What’s next for neobank Chime (Bankrate), Rated: B

Since its 2014 launch, the San Francisco-based startup has emerged as one of the leaders in the so-called neobank space. Earlier this year, it announced it has 750,000 accounts opened to date, and is now adding new accounts at a rate of 100,000 a month.

How Fintech Advances Are Creating New Opportunities for Micro-Businesses (NewsTimes), Rated: B

Those solutions benefit business owners, ranging from freelancers, to founders of startups, to leaders of burgeoning small businesses and other enterprises.

Lending is one of the most critical areas where fintech has filled a gap for small businesses. As smaller businesses often don’t need a considerable amount of money when they seek loans, they’ve struggled to get any financial assistance. That’s because banks and other lending institutions often don’t see any profit in providing loans of less than $100,000.

United Kingdom

 

Former RateSetter-backed lender ‘transforms’ new owner’s guarantor loans business (Peer2Peer Finance), Rated: AAA

Non-Standard Finance bought the guarantor loan provider last August for £53.5m, which included a minority stake owned by RateSetter.

The London-listed firm said on Tuesday that the acquisition has “transformed” its guarantor loans business, helping that division’s loan book to grow by 35 per cent. It said the acquisition contributed to the group’s overall operating profit rising 497 per cent to £2.7m in its latest annual results.

Tandem Bank to buy Pariti in UK fintech tie-up (Financial Times), Rated: A

Digital bank Tandem has agreed to buy fellow British fintech group Pariti, as it looks to head off rising competition from established lenders taking advantage of new legislation that gives them greater access to customer data.

New rules that came into force in January allow companies such as Tandem and Pariti to access customer data from other lenders if the individuals give consent.

AltFi London Summit Preps for Event this Month as UK Alternative Finance Continues to Grow (Crowdfund Insider), Rated: A

The 5th Annual London Summit is scheduled to take place on March 26th during a time of significant change in the UK. Brexit jitters along with dramatic regulatory changes such as Open Banking and PSD2 has created a varied and dynamic environment. Yet alternative finance continues to grow with AltFi estimating that UK loan origination volumes increased by 41.9% to £14.1 billion in 2017. During 2018, this number is predicted to jump by £7 billion.

Speakers already confirmed include Samir Desai, CEO and co-founder of Funding Circle, Ricky Knox, CEO and co-founder of Tandem and Anne Boden, CEO and founder of Starling Bank.

 

Eight luxurious Holywood homes get £3m in funding from peer-to-peer lending firm (Belfast Telegraph), Rated: B

Eight luxury homes being built in the hills of Holywood have received £3m in peer-to-peer (P2P) funding.

Cobain Group, which is behind The Twisel Brae development, received the funding from lender Assetz Capital.

The eight detached properties, styled by designer Kris Turnbull, will range from 2,200 to 4,000 sq ft in size, and cost between £575,000 and £800,000.

China

Ant Financial Consumer Lending Reaches $ 95 Billion (Bloomberg), Rated: AAA

From the start of 2017 until this month, Ant’s consumer lending has doubled via its Huabei and Jiebei units even as the government reduces quotas for new asset-backed securities that can underpin such loans, one of the people said, asking not to be named as the matter is private. The loans can incur annual interest rates as high as 15 percent, although they are normally less than that, another person said.

Controlled by Alibaba Chairman Jack Ma, Ant has become a financial giant that was said to be valued at $60 billion and currently has more outstanding consumer loans than China’s second-biggest bank.

China’s Financial Disintermediation And M2 (Trade Captain), Rated: A

The past few weeks have been deluged with important events in Asia, but we don’t want the data to be washed away in the flood. In particular, note that China’s liquidity conditions continue to tighten, pointing to a further slowdown in nominal GDP growth over the next two years. Granted, M2 growth bounced back in February, and should edge higher in coming months, due to favourable base effects. But it remains historically low. Moreover, growth in our broader gauge of liquidity likely will continue to slow.

WeChat: the real Beast from the East (The Finanser), Rated: A

 

Mobile payments is another area where Tencent is thriving. WeChat Pay, a mobile payment system integrated into the app, holds 40% of China’s whopping US$12.77 trillion mobile payment market. Kickstarted by China’s virtual red packets exchange that supplanted the tradition of giving monetary gifts during Chinese New Year, WeChat Pay has seen impressive growth since its launch in 2013. Its monthly offline commercial transactions jumped 280% year over year in 2017 while social payment transactions grew 23%. Along with Alibaba’s Alipay, the service is making cash and plastic obsolete in China.

European Union

New rules put forward to help crowdfunding platforms grow across EU (Bridging & Commercial), Rated: AAA

These proposals – which are part of the European Commission’s fintech action plan – will enable crowdfunding platforms to offer their services EU-wide and improve access to this form of finance for start-ups and SMEs.

At present, it is difficult for many crowdfunding platforms to expand into other EU countries, but once these proposals have been adopted by the European Parliament and the Council, the proposed regulation will allow platforms to apply for an EU label based on a single set of rules.

Future Finance Closes €40 million Investment Round (PR Newswire), Rated: A

  • Future Finance completed €40 million Series C round with existing investors.
  • Investors remain excited about Future Finance’s ability to disrupt the UK student lending market.
  • Equity injected will be used to fund loans and hire top talent in LondonDublin and Chicago.

Start-up to stardom, Bondora turns 10 years old (Bondora) Rated: B

In the height of the global financial crisis, Bondora was officially founded on 11.03.2008. While it may have seemed counter-intuitive to most to create a new financial platform at this time, there was a clear need to serve customers who had been failed by the banks and disrupt the wider financial ecosystem.

International

Higher yields driving marketplace lending uptake among institutions, finds study (AltFiNews), Rated: AAA

According to a new study, marketplace lending is here to stay. That’s among the major findings of the Greenwich Marketplace Lending research study, conducted August to October 2017. It is based on the fact that 52 per cent of institutions currently investing in the asset class believe that marketplace lending will be a significant part of the financial system in the next 10 years.

Greenwich Associates interviewed 74 investors from pension planners to asset managers to compile its results. These investors control more than $3.5 trillion in assets between them. When the research was conducted, 21 of the firms were investors in marketplace loans, while 53 were not.

Of those investing in the asset class, 67 per cent cited higher yield as their primary reason for investing. Diversification and low correlation (48 per cent), access to consumer or small business credit (43 per cent) and low volatility (33 per cent) were also cited as important drivers.

Australia

 

Why Smart Aussies Are Dumping Banks for Online Loans (Mozo), Rated: B

Everything is online these days – including some of the best value home loans around. In fact, Mozo has taken a look at our database, and found that 1 in 2 home loans with a rate under 4% are offered by online lenders.

And when we crunched the numbers, we found that by switching from the average big four bank variable rate to the best deal around from an online lender, a typical borrower with a $300,000 home loan could save as much as $2,596** every year!

Square Peg In $ 200m Round Hole (Channel News), Rated: A

Paul Bassat’s venture capital outfit Square Peg Capital is said to be looking to raise more than $200 million as it seeks to add more investments to its portfolio interests in graphic design group Canva and online lender Prospa. Melbourne-based Square Peg, which was backed in its early days by billionaire James Packer, invests across Australia, Israel and South-East Asia.

India

Faircent.com bolsters its leadership ranks with two key appointments (India Times), Rated: AAA

P2P lending major, Faircent.com on Wednesday said it is strengthening its leadership team with industry veterans Vikas Prasad and Mayank Bishnoi coming on board. Prasad has joined the company as Head – Planning, Processes & Control, while Bishnoi has taken over as Head – Customer Experience.

“As the largest player in the rapidly-growing P2P lending industry, Faircent.com is currently at a critical juncture of its growth journey. More and more Indians from across multiple geographies are associating with our platform, both as lenders and as borrowers,” said Rajat Gandhi, Founder & CEO – Faicent.com in a statement.

Regulations for fintech companies in India: A dire need (Qrius) Rated: A

FinTech small business lending is currently developing with promising potential to complement and emerge as a healthy alternative to brick and mortar banking. The number of small businesses turning to FinTechs or non-traditional lenders has exploded over the past couple of years with many economies reporting a sharp increase in the number of small businesses turning to marketplace lenders in 2017. Marketplace lending accounts for 0.08% of the $96 trillion global corporate and household outstanding debt. Growing at an average 123% a year since 2010, Morgan Stanley forecasts that it will reach $290 billion by 2020.

FinTech lenders are forced to pay a commission to introducers or brokers which goes up to 4% of the loan amount which is normally passed on to clients.

Asia

Grab to offer loans, insurance with new fintech platform Grab Financial (The Straits Times), Rated: AAA

Grab will now offer loans and insurance with its new fintech platform – Grab Financial – the ride-hailing company announced on Tuesday (March 13).

This new platform will encompass all of Grab’s fintech offerings, including payment services, rewards and loyalty services, and financial services, among others.

To provide loans to consumers, micro-entrepreneurs and small businessess across South-east Asia, Grab has embarked on a joint venture (JV) agreement with Credit Saison Co, one of Japan’s largest consumer financing companies.

Initial offerings include accident, hospitalisation and other critical insurance coverage to Grab’s 2.6 million drivers, accessible through the Grab driver app.

FintruX advisor Yash Mody explains the platform’s future plans (Finder), Rated: A

Basically, FintruX is building a truly global peer-to-peer lending platform, and it’s secure, it’s fast, it’s easy. Lenders and borrowers don’t have to worry because the platform does all the work for them. They basically set their criteria and then they don’t have to think about it. They don’t have to auction and they don’t, you know, it’s not a cumbersome process. So that’s why we think it’s a new way of doing business.

And obviously, there’s a lot of regulation in this area. So how scalable is it? Are you going to run into lots of different regulatory issues with, issues lending loans between countries?

Yeah, so we’ve taken great care to make sure that we’re within regulation. We have four lawyers on board and advisers and all that, and we’re very cognisant of what’s required. As a first stage, we’re not going to be doing cross-border lending. So let’s say, for example, we’re going to launch in Singapore and Canada, so it would be a loan that’s in Canada from a lender and a borrower in Canada.

Indonesia eyes fintech regulation to avoid ‘loan shark-like’ practices (Reuters), Rated: A

Indonesia’s financial regulator said it was considering setting a cap on interest rates and the size of loans offered by fintech firms, in a move aimed at minimizing the risk of defaults.

The emergence of these peer-to-peer (P2P) lending platforms, offering loans ranging from as little as a few hundred dollars to several thousands, has so far been welcomed by Indonesia, Southeast Asia’s biggest economy where tens of millions of people have little or no access to bank credit.

More than 300,000 people have borrowed from these firms, with total loan distribution reaching 3 trillion rupiah ($218 million) as of January, versus 247 billion in December 2016, according to data from the Financial Services Authority (OJK).

Venture financing investments in the software segment receiving highest attention in Japanese enterprise market (Global Data) Rated : A

In 2017, venture financing (VF) investments in the software segment constituted 46% of the total deal value in the Japanese enterprise market, according to GlobalData, a leading data and analytics company. On the other hand, 38% of the total number of VF deals in the country was in the software segment.

source Global Data

VF investments in the IT service segment constitute 38% of the total deal value in 2017. The IT service segment investments are primarily focused on consumer facing enterprises, such as online lending, social networking, online media publishing, e-commerce, and online dating, among others. As Japanese technological advancements are on the forefront of global market, VF companies are investing in Japanese technology enterprises in order to expand their operations and achieve business growth.

New Business Models, Emerging Tech Enabling FinTech Companies to Improve Financial Inclusion (PRNewswire), Rated: A

FinTech companies are making significant progress in promoting financial inclusion through innovative business models, products and increased use of emerging technologies such as digital identity, Internet of Things (IoT), Artificial Intelligence (AI) and machine learning, says a new report co-authored by CreditEase, IFC, a sister organization of the World Bank and member of the World Bank Group, and Stanford Graduate School of Business. 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 a full range of services that include diversified savings and investments, low-cost payments systems, insurance, or credit.

Peer to Peer lending increasingly popular in Vietnam (VietNamNet), Rated: A

In 2012, P2P outstanding loans worldwide totalled $1.2 billion, while the figure rose to $64 billion in 2015 and is expected to reach $1 trillion by 2025.

A big advantage of the P2P model is the high information security level based on BigData technology which encrypts, stores and controls customers’ information.

Analysts said with the advantages of the model, plus current conditions in Vietnam, P2P could replace black credit, or lending at very high interest rates, which is illegal in Vietnam.

According to the World Bank, 79 percent of the population in Vietnam cannot access official financial services.

Vietnamese P2P lending startup Tima seeks to close Series B round by June (Deal Street Asia), Rated: B

Tima claims to be the first P2P lending startup in Vietnam. Launched in 2015, the platform has seen cumulative money from its lender partners reach over $900 million. In 2016, Tima closed a seven-digit US dollar Series A funding from an undisclosed Singapore fund to accelerate its growth in the local market.

Authors:

George Popescu
Allen Taylor

Competing With Banks Through a Mobile App

mobile banking

According to the Federal Deposit Insurance Corporation (FDIC), over 7% of Americans are still without banking services. Even more shocking is the number of the underbanked population – a whopping 19.9%. These numbers only go to show that brick-and-mortar banks have left the general American population down. Especially since the financial crisis, people have lost […]

mobile banking

According to the Federal Deposit Insurance Corporation (FDIC), over 7% of Americans are still without banking services. Even more shocking is the number of the underbanked population – a whopping 19.9%. These numbers only go to show that brick-and-mortar banks have left the general American population down. Especially since the financial crisis, people have lost trust in traditional banks, and millennials don’t see the appeal in standing in line for banking services. To fill the void, Varo Money has launched a mobile banking business. The aim is to disrupt how banking is done in the United States. Its goal as to help customers cover their expenses, pay their bills, and build wealth over time.

Varo Money was founded in 2015 by Assaf Guery, Colin Walsh, Mykola (Kolya) Klymenko, and Roger Van Duinen. Its headquarters is located in San Francisco, California. The company has managed to raise over $78 million in various funding rounds with PE giant Warburg Pincus as the lead investor. CEO and Co-Founder Colin Walsh previously served for over 25 years in various reputed financial institutions like Amex in Europe, Lloyd Banking group, and Wells Fargo.

More Than a Bank

Throughout his professional career, Walsh realized a growing need to empower the next generation with tools that will help them improve their overall financial condition. He also realized incumbents were too entrenched in their existing business models to concentrate on developing products for the millennial generation. This became the driving force behind Varo Money. So he built a talented team with deep financial services expertise and a strong consumer technology knowledge. Varo Money is trying to be a one-stop shop for users’ banking needs and wants to inculcate better financial habits among customers by providing them with the right tools and financial guidance.

Last year, Varo Money launched their mobile app and banking products through a partnership with The Bancorp Bank. The partnership helped the platform come to the market with a FDIC-insured product. This helped them compete against incumbent banks and appeal to a larger cross section of the population. But Varo has big ambitions and wants a bigger share of the pie. That’s why the company applied for a national bank charter through the OCC. Even though obtaining this charter will be an uphill task, considering no new charter has been issued in the last decade or so, it’s a courageous move. It puts the spotlight on the young entrant and highlights its intention to be a serious regulated player in the industry.

Varo’s Business Model

The foundation of the Varo Money platform is relationship banking. It offers a basic consumer checking account just like any other bank, but the difference is a customer can perform all the basic functions like deposits and money transfers without having to go visit a bank branch. It even issues a debit card to customers and has started offering savings accounts. A customer can open a savings account on his or her mobile app and Varo offers interest rates up to 50 basis points as compared to 1 or 2 basis points offered by traditional banks.

Apart from the bank account, Varo also offers short- and long-term financing solutions. The short-term line of credit is a flexible line of credit (LOC) and is available to customers unexpected financial challenges. The LOC helps customers manage cash flows while avoiding the need to take a payday loan or cash advance. Also, 3- and 5-year fixed rate installment loans are aavailable for long-term financial needs.

Varo Money’s Technology and Competitive Posture

Varo Money is available as an iOS application with an Android version coming soon. The app is loaded with features like touch ID, a geolocation service to spot nearby ATMs, and the ability to link other accounts through APIs. The app is free and requires no minimum balance to open an account. Also, there are no foreign exchange charges or overdraft fees. Its customer base has access to over 55,000 ATMs worldwide as compared to 18,000 ATMs for Chase and 12,000 for Wells Fargo.

Varo charges a nominal fee for debit card usage. It also sells financial products of its partner bank earning income from that partnership. However, its lending products are a primary income generator. The pricing and structure of LOC products are developed to compete with other alternative lenders in the market.

Varo has a lot of competitors in different niches of banking. Players like Discover, Ally, and Goldman Sachs concentrate on only a few lending segments; these lenders do not follow a complete relationship model, but only offer a specific product. On the other hand, there are neobanks like Chime, Simple, and BankMobile that are single-purpose saving apps. Though they are doing a great job when it comes to user experience, the range of products offered by them is narrow compared to a full suite of products offered by a traditional bank.

This is where Varo Money is different. It is focused on customer relationships and wants the ability to offer the entire gamut of banking services to consumers. This gives it multiple cross-selling opportunities and reduces the cost of client acquisition. Its strategy seems to be paying off. In just 7-8 months, Varo has garnered tens of thousands of customers and over 100k downloads.

Conclusion

Varo Money is focused on replacing traditional banks with its comprehensive suite of online banking services and products. Coupled with its obsession for helping millennials make smarter financial decisions, Varo Money is looking to be an emerging player in the digital bankin sector.

Author:

Written by Heena Dhir.