Loyalty and Fluidity in Alternative Financial Services and Traditional Lending

Growth of Funded Loan Volume Online

Non-prime lending has revolutionized the lending sector. In times where people lack a stable credit history, securing a traditional loan is not easy—and non-prime has become a go-to option in such scenarios. In the past few years, alternative financial services have gained momentum in terms of acceptability and volume. There are various companies in the […]

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Growth of Funded Loan Volume Online

Non-prime lending has revolutionized the lending sector. In times where people lack a stable credit history, securing a traditional loan is not easy—and non-prime has become a go-to option in such scenarios. In the past few years, alternative financial services have gained momentum in terms of acceptability and volume. There are various companies in the market that offer instant loans even to the borrowers who have a weak credit history. But how do we infer how many people have migrated to non-prime online borrowing from the traditional borrowing set up, and how many people have migrated back to the traditional set up?

Experian’s Clarity Services, a credit reporting agency specializing in near prime and subprime consumers, offers credit data to alternative financial service (AFS) providers. This helps lenders gain a wider perspective of non-prime applicants and further enables them to make more informed decisions.

The company furnishes the AFS trends report that specifies the prevailing trends and consumer behavior in the market by studying the underlying factors. In the 2019 AFS Lending Trends Report, Clarity studied a sample of 350 million consumer loan applications and more than 25 million loans to evaluate the market trends for the 2014 to 2018 time period. Clarity also leveraged Experian’s national credit bureau data to analyze consumer behavior.

Alternative Financial Services — What Do the Market Trends Say?

Non-prime consumers include people who may have been irresponsible with credit previously, youngsters with inadequate credit history, people who face sudden and unexpected emergencies, recent immigrants in the US or someone in immediate need of cash. The basis for the report includes factors of loan origination (involves the online and storefront channels) and loan types (includes installment payments and single pay).

In order to study the rise of the online lending market from 2014 to 2018, Clarity studied online installment and single pay loans by the number of loans originated and total dollars funded.

Growth of Funded Loan Volume ($) – Online

 

Growth of Funded Loan Volume ($) – Online Single

The graphs illustrate how online installment loans have been steadily growing from 2014 to 2018. The volume of online installment loans in 2018 was 7.4 times higher than the volume in 2014. Whereas, the volume grew up until 2016 in the case of online single pay loans, plummeted in 2017 and held steady in 2018.

As per the report, more than half of online borrowers are new to the alternative credit space. The table below illustrates the consumers who opened an online loan in 2018, tracking their past behavior from 2014 to 2018.

Clarity also tracked the activity of 2017 alternative financial borrowers in 2018 and if they continued with online platforms. The results showed that 41% of online borrowers again availed an alternative loan, while 24% of the borrowers did not show up in 2018. Also, 35% of the borrowers applied for a loan but did not open one.

Further investigations gave another interesting insight. Around 34% of 2017 borrowers who did not have any applications or loans in 2018 had switched to traditional lenders. This implies that 7% of overall 2017 borrowers migrated to traditional lending in 2018.

As per an examination of the credit classification of consumers who obtained and did not obtain loans from traditional lenders in 2018, 23% of borrowers who switched to traditional lending possessed a near prime credit score, and only 8% of the borrowers continuing in the alternative finance space were classified as near prime.

Factors Influencing Migration from Online Platforms to Traditional

While the migration of borrowers from AFS platforms to traditional ones might not be a shocker, borrowers who had a subprime credit score and were ineligible to apply for traditional loans were mostly the ones who moved to online or the AFS space to get the credit they needed. As and when their credit scores improved, they reverted to the traditional space. While AFS is convenient in terms of credit scores and repayments, there are strong factors that influence the borrowers to move back to traditional methods.

Frauds: With the advent of technology, fraud too has evolved. With data breaches, the fraudsters create a synthetic identity that cannot be easily decoded. This is leveraged by fraudsters to open fake and additional accounts.

Generation Bias: Gen X is more comfortable with online borrowing and less likely to be inclined towards storefront options. Another study under the report implies that the Silent and Boomer generations only account for 25% to 30% of all AFS borrowers.

Income Trends: In the past five years, online installment borrowers reported a higher income (while the values have been steady since 2016) and the reported incomes of storefront installment borrowers have been stagnant since 2014.

Conclusion

Due to the recession in 2008, the majority of borrowers had suffered a hit to their credit worthiness. On the other side, traditional lenders folded due to the toxic asset built up in their balance sheets. This created a vacuum for the AFS players to capture. It was a win-win as they were able to tap into a multi-hundred-billion-dollar market unchallenged, and the affected borrowers got a chance to get the credit they needed desperately.

With record economic growth, the 2019 scenario is different. Borrowers are returning to traditional ways of borrowing. The trends report puts light on the activities of the borrowers and how their needs have changed over time. In the given scenario, Clarity’s alternative credit data is a key asset when studying borrower behavior in the market.

Download the complete 2019 Alternative Financial Services Lending Trends report on Clarity’s website.

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Alternative Lending: Insights from Clarity

online installment loan amounts

With billions of dollars in monthly origination and listed players like Lending Club, alternative lending is now mainstream in the United States. Experian’s Clarity Services, a specialist in alternative financial services data and solutions, has released a report titled Alternative Financial Services Lending Trends. It includes deep insights into the online consumer lending industry and […]

The post Alternative Lending: Insights from Clarity appeared first on Lending Times.

online installment loan amounts

With billions of dollars in monthly origination and listed players like Lending Club, alternative lending is now mainstream in the United States. Experian’s Clarity Services, a specialist in alternative financial services data and solutions, has released a report titled Alternative Financial Services Lending Trends. It includes deep insights into the online consumer lending industry and leverages data points of over 350 million consumer loan applications and 25 million loans.

The report threw a lot of expected statistics and some surprises that should help online lenders pivot to more fertile territory.

Understanding the Channels

Alternative financial services can be obtained from both online and offline platforms. Though online platforms are mushrooming, brick and mortar still remains dominant in the consumer lending industry.

Types of loans

The types of loans in the report are broadly classified in two categories-

  1. Installment loans – Loans repaid in a series of regular payments (months or years) are known as installment loans.
  2. Single pay – Single pay loans are repaid in a single payment (Lump sum) and usually have a shorter tenure (days/weeks).

Market Trends- Product Mix

Everybody is aware of the fact that online lending has grown, but the growth numbers presented by Clarity are staggering. Following are the charts that capture the growth pattern of online installments and online single pay loans in regards to funded loan volume and the number of funded loans from 2014 to 2018.

The online installment loans marked a growth of approximately 643% in 2018 starting from 2014 whereas the single pay loans’ market doubled in four years.

The number of loans analysis threw similar growth numbers as the loan volume analytics.

Data suggests that online installments loans are the most popular choice in the alternative lending space. The number of unique borrowers has increased by 30% for the past three years.

Loan Characteristics

Installment Loans

  • Loan amount Almost 60% of loans fell between the $500 to $2000 range in 2018, rising from 43% of all loans in 2014. Only 15% of the funded loans were under $500 in 2018. Therefore the average loan amount is increasing on a year-on-year basis.
  • Loan Tenure – Maximum loans (over 62%) had a repayment period of over 7 months in 2018 whereas only 9% online installment loans have a payment period of fewer than three months.
  • Scheduled monthly payment amount – The monthly payment amounts have declined over time. Around 34% of monthly repayments were less than $200 in 2018. This number is an increase from 17% in 2015.

Single Pay Loans

  • Loan Amount – Loans above $500 grew from 23% to 28% between 2014 and 2018. The overall trend is towards an increasing loan amount.

Credit Quality

A credit profiles analysis indicates that online lending is finding favor among not only the subprime category but also the prime and near-prime, which are aggressively adopting alternative financing options.  Clarity reports that 29% of consumers with an alternative credit inquiry fell into the prime or near-prime categories in 2018 compared to 21% in 2017.

Consumer Demographics

  • Age – The online installment borrowers were older than the online single pay borrowers whereas the age of installment and single pay loans’ borrowers remains the same in the case of the storefront channel.

  • Income trend – The online borrower reported a higher income as compared to one borrowing through a storefront.

In the online segment, income values tend to be higher for Installment loans than single pay loans.

  • Data Points:

– Forty-five per cent of online installment borrowers reported an annual income over $40,000, while 37% of single pay borrowers reported incomes in this range.

– Conversely, 15% of single pay borrowers reported an income of less than $20,000, as opposed to only 8% of installment borrowers.

Hence consumers falling under the category of online installment loans are likely to have a higher income as compared to other sub-groups.

  • Consumer Choice – Consumers that prefer privacy opted for online lending whereas the consumers that were looking out for a reliable personalized experience went for the storefront option.
  • Location – California and Texas are the obvious leaders due to their size. Ohio is steady at third place for the last 3 years with Illinois at the 8th position.

Takeaway

Clarity’s alternative credit loan data provides key learning points for all in the alternative lending industry.

  • The Online Installment Loan market is growing and the demographics support further growth.
  • The online installment loans are being increasingly characterized by larger loan amounts, longer payment terms, and smaller scheduled payment amounts.
  • There are early signs of deterioration in credit performance.
  • Over half of the online borrowers in 2018 were new to the alternative lending space.
  • Applicants new to the alternative lending space in 2018 have higher credit scores than those previously seen. However, 2017 borrowers who migrated to traditional lending in 2018 also had higher credit scores than those who stayed with alternative financial services.
  • California, Texas, and Ohio continue as the top three states for online lending in number of loans, while the largest growth in borrowers is in the middle states like Nebraska and Kentucky.

Insight: Online Lenders will be well served to identify patterns like an increase in loan amount and loan tenure and the rise of Middle America looking for hassle-free lending options.

The post Alternative Lending: Insights from Clarity appeared first on Lending Times.

Predicting Default Rates for Online Lending

Clarity Services

According to data from Experian’s Clarity Services, online consumer lending has grown over 350 percent from 2013 to 2017. Funded single-pay volume rose 72 percent while installment loan volume went up nearly 500 percent. The single-pay loan volume actually shot up 106 percent through 2016 but fell slightly the following year. Still, these numbers indicate […]

Clarity Services

According to data from Experian’s Clarity Services, online consumer lending has grown over 350 percent from 2013 to 2017. Funded single-pay volume rose 72 percent while installment loan volume went up nearly 500 percent. The single-pay loan volume actually shot up 106 percent through 2016 but fell slightly the following year. Still, these numbers indicate a growth in online alternative finance lending, and with governments around the world cracking down on traditional payday lending, this spells a huge opportunity for further growth in the years to come.

In 2013, the average online installment loan amount was just below $800. In 2017, it was just over $1,400. And the average loan term rose from six months in 2013 to almost 10 months in 2017.

This growth may have something to do with how online installment loan providers are marketing their services. The number of lenders using direct marketing in 2015 was indexed to 100, but in 2018 (through July), that number was 275, representing growth on pace to reach 550 percent by year end. The number of pre-screened mailed names went up from an indexed amount of 100 in 2015 to 988 through July of this year.

Marketing isn’t the only factor affecting growth in this segment of online lending. There is also a growing number of lenders tapping into the market, and the fact that the Consumer Financial Protection Bureau (CFPB), several U.S. states, the United Kingdom, and other government entities are beginning to target traditional brick-and-mortar payday lenders is contributing to the growth of the online installment loan segment.

The growth of this segment highlights the importance of credit risk evaluation. The need for effective credit risk solutions that identify potential defaulters and is capable of separating the good borrowers from the bad is also growing.

The Importance of Predicting Defaults Before Issuing Online Loans

One of the most important tasks for any lender is predicting the likelihood of default. A higher than expected default rate can lead to huge losses. On the other hand, mitigating delinquencies can lead to greater profits and allow the lender to issue more loans. It is particularly important to predict whether a borrower will default on the first payment of an installment loan. After all, defaulting on the first installment means the lender will not recoup any of its investment, and defaulting on the first payment is a clear sign that the borrower should have been flagged as a high credit risk and will likely default on subsequent payments.

Alternative finance lending is inherently risky. Lenders must fight a higher default rate than banks (20 percent vs. 3 percent) right off the bat. That alone makes predictive credit risk modeling a necessity in today’s installment loan market.

In recent years, online lending leaders have seen greater than expected default rates, which means these online providers must be extra diligent about predicting delinquencies in order to watch their bottom lines. For this reason, the tools that lenders use to make such predictions must be carefully chosen so that default rates decline and profits increase over time.

3 Ways to Identify Good Credit Risks Before Issuing a Loan

Some defaults are to be expected. Profitable lenders understand that the interest on the good loans will pay for the losses on the bad loans. Nevertheless, mitigating those losses is paramount to maintaining solvency and being able to service future borrowers. An online installment loan lender can use credit risk scoring to decrease default rates and increase profits simply by identifying the good and bad credit risks. Here are three ways a lender can ensure they are focusing on the good credit risks:

  1. Prescreen your potential borrowers – Credit risk evaluation should begin before you make initial contact with potential borrowers. If you are involved in direct marketing, prescreen potential borrowers before sending them your marketing collateral. Not only can this lower your default rate, but it will also lower your marketing expenses.
  2. Use an effective credit risk scoring solution – Today’s lenders do not just rely on FICO scores and payment histories. They collect alternative data that identifies how potential borrowers spend their money and handle their debts. Much of this data is out of sight from traditional credit scoring agencies, but it is essential to getting a complete picture of the borrower.
  3. Make your offer based on the borrower’s credit risk profile – First, build a credit risk profile on the borrower and use the predictive score to make your loan offer. It is best when lenders are able to structure a loan based on a consumer’s risk level. For example, a higher risk customer might warrant a smaller loan amount to control the lender’s risk.

Assessing Credit Risk: The Perfect Solution for Online Installment Loan Providers

The most important factors in underwriting the subprime consumer involve credit risk assessment and fraud detection. New solutions that combine the largest visibility into the industry’s alternative credit data and traditional bureau data ensure lenders are fully equipped to assess and mitigate risks. These solutions are offered by Experian’s Clarity Services and Experian, and include:

  • Clear Credit Risk
  • Clear Advanced Attributes

These solutions are designed to assess a borrower’s creditworthiness or to determine credit eligibility. Lenders receive an actionable score with adverse action codes to help them determine whether a potential borrower is a solid credit risk and to help determine a reasonable loan structure.

Clear Credit Risk is Clarity’s trademarked credit risk product designed to predict the likelihood of a borrower’s default on the first payment. It includes an effective score and is built on data that has proven most predictive for subprime consumers.

Experian’s Clarity Services is a credit reporting agency founded in 2008 and acquired by Experian in 2017. As the leading alternative credit data provider, the company services a wide variety of alternative finance lenders such as auto finance companies, check cashing services, prepaid credit card issuers, short-term installment lenders, small-dollar credit lenders, telecommunications providers, and more.

Authors:

Allen Taylor

Monday April 16 2018 Daily News Digest

yield curve

News Comments Today’s main news: Goldman buys Clarity Services. Zopa to receive 400M GBP valuation. Lending Works surpasses 100M GBP in online lending. ETHLend expands into fiat lending. Today’s main analysis: PeerIQ’s valuation report. Today’s thought-provoking articles: Why you’re not making much on your bank account. The impact of Brexit. Adjusting to new digital demands. UK venture funding takes a breather. […]

yield curve

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

Goldman Sachs Comes to the App Store (The Wall Street Journal) Rated: AAA

Goldman Sachs Group Inc. bought personal-finance app Clarity Money, acquiring a mobile storefront for its growing consumer bank.

The deal closed on Friday for Clarity Money, whose backers include Soros Capital and Citigroup Inc.’s venture-capital arm. Adam Dell—brother of Michael Dell, the personal-computer pioneer—founded Clarity Money and will join Goldman as a partner, a title rarely given to outsiders.

Strong Bank Earnings, LendIt Update, PeerIQ’s Valuation Report (PeerIQ), Rated: AAA

Wells Fargo’s earnings also beat analyst expectations, but the bank cautioned that these results could change due to the ongoing CFPB investigations. Consumer loans decreased $9.5 Bn QoQ – more than LendingClub or SoFi originate in a year – driven by a $3.8 Bn decline in auto loans, $1.9 Bn seasonal decline in credit card balances, and a $1.8 Bn decline in the junior lien mortgage portfolio.

 

Source: PeerIQ

PeerIQ’s Valuation Report 

Source: PeerIQ
Source: PeerIQ

Why You’re Still Not Making Much on Your Bank Account (The New York Times), Rated: AAA

After a decade of being near zero, short-term interest rates have risen sharply in recent months. Typically, these rates — three-month T-billsLiborcommercial paper — move together because they reflect the same basic economic reality.

Source: The New York Times

Slow but solid growth in the United States since the Great Recession has finally altered the balance between borrowers and lenders. Higher rates mean those with cash to spare now have the upper hand and can demand a higher price to part with it.

That’s how it’s supposed to work. But as any saver can tell you, some short-term rates have barely budged.

Adjusting to new digital demands goes beyond technology (American Banker) Rated: AAA

One of the dominant themes at the recent Oracle Industry Connect conference was that banking customers are not in a state of transition to digital anymore — they are all digital now.

But whether an institution is drawing up plans on how to respond to big tech firms entering the banking market, or engaged in an effort to overhaul legacy systems, Suber said, the guiding emotion shouldn’t be fear. Instead, he said, bankers should embrace a “golden age of fintech.”

Key’s goal is to use digital to enable self-service when appropriate, while gearing the branch towards serving customers with issues best suited for a one-on-one request.

Regions Bank Announces Partnership With Fintech Mortgage & Consumer Digital Lending Tech Platform Lender Price (Crowdfund Insider) Rated: A

Regions Bank announced on Thursday it has invested in and formed a partnership with fintech mortgage and consumer digital lending technology platform provider, Lender Price. According to the bank, the duo will focus on streamlining Regions’ digital process and simplify interaction between banks, borrowers, and bank.

LendingTree considers moving headquarters to Pineville (WBTV Chorlotte) Rated: A

Online loan marketplace LendingTree is considering moving its headquarters from SouthPark in Charlotte to the Cone Mill site in Pineville.

The company released a statement Thursday concerning the possible move.

In the statement the company said that given its considerable growth since the 2016 purchase of two buildings in SouthPark, their headcount projections have expanded significantly, so they are evaluating alternatives, including Pineville.

Wells Fargo could face $ 1 billion penalty for auto and mortgage abuses (CNN) Rated: A

The beleaguered bank warned on Friday that it may revise its first quarter earnings results because of the fine. The bank says that the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency have offered to resolve their investigations for that amount.

Wells Fargo (WFC) apologized last year for charging as many as 570,000 clients for car insurance they didn’t need.

An internal review by Wells Fargo found that about 20,000 of those customers may have defaulted on their car loans and had their vehicles repossessed in part because of those unnecessary insurance costs.

DiversyFund Launches New $ 50 Million Growth Fund for Multifamily and Commercial Real Estate Deals (PR Newswire) Rated: A

DiversyFund, a crowdfunding platform that is revolutionizing real estate investing, has launched its Commercial and Multifamily Real Estate Growth Fund. Investors in this fund will own shares of a variety of real estate investments, with 80% of the fund dedicated to commercial and multifamily properties.

Projected returns are between 15% and 20% per year. The minimum investment is $5,000.

Nonprofit Credit Unions Provide Alternatives to Payday Loans (Nonprofit Quarterly) Rated: A

According to the latest factsheet by the Center For Responsible Lending, over four out of every five payday loans are taken out within the same month of the borrower’s prior loan. In other words, the impetus behind making unaffordable loans is to create demand for additional loans based on deceitful lending practices. As the market for payday lending has grown to $40 billion, the profits from these businesses are directly stripped from low-income consumers with few alternatives. While some legislative efforts have reduced the growth of this market, there are still 12 million US households that use payday loans annually, spending an average of $520 on fees to borrow $375, according to a report from the Pew Charitable Trusts in 2017.

Senate Banking Committee Probes Mulvaney’s Leadership at the CFPB (National Law Review) Rated: A

On April 12, 2018, Mick Mulvaney, the Acting Director of the Consumer Financial Protection Bureau (Bureau) testified before the Senate Committee on Banking, Housing, and Urban Affairs regarding the Bureau’s Semi-Annual Report to Congress.  The Senate Hearing comes the day after Democrats in the House Financial Services Committee questioned Mulvaney about his leadership at the Bureau.  A copy of his written testimony is here.

  • Increased Congressional Oversight. Throughout the hearing, Mulvaney stressed his recommendations for greater oversight to hold the Bureau accountable.
  • Payday Lending. Mulvaney noted, however, that he has the discretion to reach a different conclusion about the payday lending rules than his predecessor, Richard Cordray.
  • Data Security.  While data security was an issue that spanned both sides of the aisle, Republican senators focused on the Bureau’s handling of consumer data while their Democratic colleagues focused on Mulvaney’s position on the Equifax data breach.

As to the Bureau’s handling of data, Mulvaney explained that he has instituted a data freeze and commissioned a report about the Bureau’s data collection and protection.  While the data freeze does not apply to enforcement actions, the Bureau plans “to limit data that we take possession of.  . . . instead of having them send it to us electronically, we are going to look at it.”  Mulvaney acknowledged that “everything that we keep is subject to being lost.”  When Sen. David Perdue (R-GA) asked what data had been lost, Mulvaney declined to publicly comment.

 

Some companies are turning their noses up at Softbank’s huge cash offers (CNBC) Rated: A

SoftBank’s massive Vision Fund said in 2017 that its minimum check size is $100 million. But in the financial-technology market, the number appears to be twice as big.

Executives at a half-dozen fintech companies said the Vision Fund has told them it’s looking to do deals where it can put at least $200 million to work over one or multiple investment rounds. These people asked not to be named because their talks with SoftBank are confidential.

Young Consumers Want Financial Advice (Credit Union Times) Rated: A

Analysts from LIMRA and Life Happens have reported that finding in summaries of results from a joint online survey of 2,082 US. adults

Only 7% of the boomers said they were looking for financial advisors; 41% said they already had advisors and were happy with their advisors.

But 18% of the millennials polled, and 19% of the members of Generation X, said they would like to have advisors and were searching.

Fintechs aiming AI at advisers (Investment News) Rated: B

Dream Forward deploys AI chatbots in its automated 401(k) platform, and is now beta testing a mobile-only version that can answer client questions via text message without requiring customers to log into their accounts.

Laserfiche develops automated workflows for advisers and later this year plans to go one step further with “robotic processes” that will automate even more of advisers’ manual, repetitive front- and back-office tasks.

United Kingdom

Zopa to receive GBP 400mn valuation in new fundraising plans: Sky News (Zephyre) Rated: AAA

UK-based peer-to-peer lender Zopa is in advanced negotiations with potential investors to seek around GBP 50.00 million in funding, helping advance the company to one of the largest financial technology (fintech) businesses in the country, Sky News reported.

Citing sources close to the matter, the broadcaster observed the simple loans and smart investment firm could be valued at GBP 400.00 million as a result of the deal, expected to be led by existing shareholders Wadhawan Global Capital.

In the loop: the continuous woes of traditional retailers (Elite Business) Rated: A

Lender Zopa reportedly targets £400m valuation with new fundraising round

Zopa, the peer-to-peer lender, is planning to raise a £125m round, according to Sky News. This will push the company’s valuation to a soaring £400m and is rumoured to serve as a pre-IPO funding round.

UK VC investment dropped in Q1

Worryingly, it seems as if Brexit has left investors clutching their chequebooks tighter in the first quarter of 2018, according to KPMG Enterprise.

Former P2PFA chair joins Zopa (Bridging & Commercial) Rated: B

Zopa has appointed the former Peer to Peer Finance Association (P2PFA) chair Christine Farnish (pictured above) as chair of its P2P board.

Lending Works Surpasses £100 Million in Online Lending (Crowdfund Insider) Rated: AAA

UK-based peer-to-peer lender Lending Works announced this week it surpassed £100 million in online lending. According to Lending Works, the milestone comes just a little over a year after the platform surpassed £50 million. The lender also reported that 20,000 customers (over 16,000 borrowers and nearly 4,000 lenders) have used its platform.

2018 Venture Capital investment in UK takes a breather after a bumper 2017 (Business East Midlands) Rated: AAA

Following a blockbuster year of over 8 billion USD invested within the UK bolstered significantly by multiple mega-rounds, – 2018 still managed to achieve a healthy start, with one $100 million round pushing the nation’s tally over 1 billion USD. The UK played host to seven of the top 10 European deals in the last quarter of 2017, but managed to scrape just one of the 10 in the first quarter of 2018. Four of the ten biggest European deals done in the first three months of 2018 were located in Germany.

What happens when fintech valuations come back down to Earth? (Financial Times) Rated: A

No tech subsector has reached stratospheric valuations as consistently as financial technology, or fintech. The heady combination of huge markets, a radical platform shift to mobile, and newly vulnerable incumbent dinosaurs (be they banks, wealth managers, or insurers) has attracted over $30bn of annual investment. After a decade of evolution, 2018 looks set to be the first year we’ll see a herd of fintech firms go public. At least ten have filed or talked about an impending listing this year, including TransferWise, Credit Karma, Adyen and Funding Circle.

 

 

‘YOU KICK IT’ AND THE ALTERNATIVE INVESTMENT INDUSTRY (All About Alpha) Rated: AAA

The Alternative Investment Management Association, the London-based organization representing the interests of the world’s alternative investment industry, has issued a new whitepaper about the impact of the exit of the United Kingdom from the European Union.

The United Kingdom has the largest alternative assets industry in Europe, so AIMA is unsurprisingly interested in the consequences of such an exit.

Read the full report here.

Fintech recruits ahead of open banking ‘tsunami’ (Insider) Rated: A

Scottish fintech business The ID Co is on a recruitment drive ahead of an expected ‘tsunami’ with the advent of so-called open banking.

The Edinburgh-based company helps banks make lending decisions by analysing live financial data including online bank statements, cashflow and credit agency records – and was one of the first agitators for open banking.

 

 

 

Time to think outside the bank? (Love Money) Rated: A

Savers subscribed to 8.5 million Cash ISAs in the tax year ending 5 April 2017, down from 10.1 million the previous year, while the total amount saved tumbled by a third to £39.2 billion.

LendingCrowd’s original IFISA product, the Growth ISA, is designed for those who want a quick and simple way of creating a diversified portfolio of secured business loans.

By automatically reinvesting their interest and capital repayments, the Growth ISA has actually delivered an average return for investors of 8.5% – more than three times the rate of inflation – as shown in the chart below.

Source: Love Money

 

China

 

 

Technology and eCommerce Are Now Driving China’s Small Businesses’ to Success (eSeller Cafe) Rated: B

According to the recent survey, Mainland China’s small businesses are the top users of fintech application and in digital payment technologies. More than 84 percent of the survey’s respondents say that at least 10 percent of their overall revenue came via these platforms. Businesses also use fintech to access funds from crowd-sourced funding and peer-to-peer lending.

 

European Union

EU Banks Losing Profits, Lending Ability Because Of Reforms, Report Says (PYMNTS) Rated: A

The Association for Financial Markets (AFME) in Europe wants regulators to curb the development of aggressive bank regulation, according to Reuters reports on Thursday (April 12).

The bank lobby has released a study aimed at reducing regulators’ heavy hand in the financial services market that the group said has made it more difficult for banks in Europe to support the broader economy in the wake of the financial crisis.

The AFME released a report along with PwC which surveyed 13 international banks, accounting for a combined 70 percent of capital market activity around the world, reports said. Analysis found the annual cost of regulation costs $37 billion for 13 banks combined, amounting to 39 percent of total capital markets expenses in 2016.

International

ETHLend Expands to FIAT Lending, Initiating Licensing Process (Finance Magnates) Rated: AAA

ETHLend, a crypto-to-crypto lending platform, has started a process to obtain a license on lending activities in over thirty countries in the European Economic Area (EEA). ETHlend’s initiative will also include other countries as well with its helping expand its current business model (crypto-to-crypto lending) to provide financing in FIAT currencies such as EUR, USD, and GBP against cryptocurrency holdings.

 

Everything You Need To Know About What’s Coming ‘Round The Corner (PYMNTS) Rated: A

In payments and commerce, it’s an eternity. Too long, according to ZestFinance, a company that believes credit needs a machine learning upgrade. Trulioo thinks verification needs to step up so financial institutions can actually “know their customer.” Global cross-border payments between businesses need a major boost to support the trillion dollars worth of transactions they’ve have to support in five years.

Source: PYMNTS

12 Selected Finalists at the 2017 Seedstars World Prize (Tech in Africa) Rated: B

RedCapital from Chile is a crowdfunding P2P lending startup. It offers a platform through which investors get attractive returns at low risk. Furthermore, the SMEs acquire loans at favorable rates. The startup has a risk predictor that allows its investors to realize zero default.

Australia

 

Latitude Financial pledges to grow lending responsibly and profitably (Australia Financial Review) Rated: AAA

Unsecured personal lender and ASX-aspirant Latitude Financial is targeting up to $5 billion of new loans over the next few years as its chief executive Sean Morrissey insists it can grow responsibly amid heightened scrutiny on lending standards.

During a “non-deal roadshow” over the past month, Latitude has met with around 100 fund managers ahead of what is expected to be the biggest ASX initial public offering since Medibank Private in 2014. Latitude’s three shareholders, KKR & Co, Varde Partners and Deutsche Bank, have not yet made a decision on timing for the float, which could value the equity in the group at around $5 billion.

N2N Connect expanding into P2P lending (The Edge Markets) Rated: A

Maintain outperform with an unchanged target price (TP) of RM1.53: N2N announced plans to acquire a 28% interest in Australian-based OurMoneyMarket Holdings Pty Ltd (OMM) through a subscription of new shares for a cash consideration of A$2.8 million (RM8.43 million).

India

Aye Finance receives 30 cr debt funding from Swiss investor (Business Line) Rated: AAA

Online lender from micro businesses Aye Finance said that it has received Rs 30 crore debt funding from from Swiss-based impact investor, BlueOrchard Finance Ltd. The funds would help the MSME lender to further diversify its lending portfolio, reaching out to the long trail of MSMEs in India.

Fintech company Cash Suvidhakeen to enter microfinance biz (Business Line) Rated: A

Cash Suvidha, a start-up fintech company that extends business loans to small and medium enterprises (SMEs) and start-ups, is looking to foray into microfinance business.

According to Rajesh Gupta, founder, Cash Suvidha, the company is exploring the possibility of either acquiring an existing microfinance institution (MFI) or setting up a separate vertical for its MFI business in the next two-to-three years.

“Rural lending is one area which excites me the most,” Gupta told BusinessLine.

Asia

After rounding off 2017 at a remarkable high bolstered by megadeals, Asia continued to see large deals in Q1 2018. These include two US$1 billion+ megadeals which were struck outside China, with Singapore-based Grab’s Series G financing and Go-Jek in Indonesia’s Series E round.

“Singapore saw a record US$2.68 billion of VC investment in Q1 2018, despite a relatively muted level of activity. It is testament to the maturing of Singapore’s ecosystem that a business such as Grab could be built here to tackle the regional market. In addition, the top deals in Singapore also span across diverse sectors, from logistics, internet retail to biotechnology,” said Chia Tek Yew, head of Financial Services Advisory, KPMG in Singapore.

UOB, China fintech Pintec team up to offer credit services in South-east Asia (Straits Times) Rated: A

United Overseas Bank (UOB) has entered into an agreement with Beijing-based financial technology firm Pintec Technology Holdings to set up a joint venture company, Avatec.ai.

UOB will have a 60 per cent stake in the joint venture, the bank said in a regulatory filing on Monday (April 16).

Avatec will have an issued and paid-up capital of up to S$10 million and will be a subsidiary of UOB.

Alternative finance the option for millennials (Financial Standard) Rated: A

Speaking at the AltFi Australasia Summit in Sydney today, OnDeck chief executive Noah Breslow said he can see the Australian alternative finance industry working with $2 billion in new loan volumes by 2020. He expects the industry to oversee about $700 million in new loans this year.

“Compared to five years ago, 70% of small business owners perceive there are more small business lending options today than there were in 2013. It shows how mainstream this type of financing is becoming,” Breslow said.

Equifax group managing director Asia Pacific, Mike Cutter, said 54% of online lending enquiries come from Australians 35-years-old and under. And Queensland is leading the charge, he said.

Singapore Weary Of Forcing Open Banking On FinServ Market (Pymnts) Rated: A

Singapore is ready for open banking, but regulators don’t want to force it on the financial services market, according to reports in Bloomberg.

Bloomberg highlighted how Singapore’s approach differs from open banking initiatives in Europe and Japan, where regulators have imposed requirements for banks and other financial institutions to support the movement of data between their systems and those of third-party financial service providers. Such was the aim of PSD2 in Europe and Open Banking in the U.K.

Singapore fintech startup Silot raises almost US$ 3m in pre-Series A funding (Business Times) Rated: A

SINGAPORE-headquartered fintech company Silot has raised some US$2.87 million from investors Arbor Ventures and Eight Roads Ventures with the completion of its pre-series A funding.

Arbor Ventures is a global early-stage venture capital firm, while Eight Roads Ventures is the proprietary investment arm of Fidelity International.

OJK to relax muscles in next fintech regulation (The Jakarta Post) Rated: B

The Financial Services Authority (OJK) has adopted a more relaxed view toward the financial technology (fintech) industry, believing that rigid policies may only make them obsolete in the face of fast-growing businesses in the digital sector.The financial regulator already has a policy, called OJK Regulation (POJK) No. 77/2016, which governs peer-to-peer (P2P) lending fintech companies.

Flat loan growth positive for banks (The Edge Markets) Rated: A

After missing loan growth targets in 2017, several Malaysian banks have kept expectations more conservative this year, even as Bank Negara Malaysia (BNM) data indicated a moderation in the total outstanding financing growth of 4.1% in 2017 compared with 5.6% in 2016.

 

 

Almost 50 peer-to-peer lending businesses licensed with OJK (The Jakarta Post) Rated: A

OJK deputy commissioner Sukarela Batunanggar said as of April, there were 44 P2P lending businesses that had been granted operational permits by the authority. This figure, he said, was a considerable increase from just 30 P2P lending businesses in January, indicating robust growth in the industry.

Authors:

George Popescu
Allen Taylor

Tuesday November 19 2017, Daily News Digest

Moody's wage growth

News Comments Today’s main news: Clarity Services integrates with Experian. Octopus Choice passes 100M GBP AUM. Funding Circle hits 100M Euro in German lending. Younited Credit tops 100K loans. Square Peg invests $8M in Airwallex. Silver Bullion hits $50M in loans. Today’s main analysis: The deteriorating auto loan quality. Today’s thought-provoking articles: China’s startup investors are a bunch of “cashed-up […]

Moody's wage growth

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United States

Integration of Clarity Services by Experian (Clarity Services Email), Rated: AAA

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Clarity Services

PayPal Co-Founder Max Levchin Gave a Remarkably Honest Response to Accusations About His New Startup (Inc.), Rated: AAA

To its critics, though, Affirm, which recently raised $200 million in a growth round, is engaged in something sinister, luring people into a financial trap by enticing them to buy things they can’t afford. CEO Max Levchindoesn’t agree with that interpretation at all, but he does accept some of the blame for not creating a more accurate perception.

Here’s how Affirm works: You can borrow money to make a purchase at any store that integrates with Affirm (or any store at all if you use the mobile “virtual card”). If Affirm’s proprietary credit model judges that you’ll be able to pay back the sum, then you’re offered a loan. During the next several months — up to a year — you’re expected to make monthly payments, which include interest. The APRs range from 10 to 30 percent.

The key things that differentiate Affirm from other credit options are that you get all of the information up front, stated plainly, and the interest charged by the startup is simple rather than compounding. When you make the initial purchasing decision, you know exactly how much extra you will end up paying to buy the product right now, instead of saving up over several months. There are no additional fees.

Moodys Warns Of Deteriorating Auto Loan Quality (ValueWalk), Rated: AAA

The economy is expected to expand in 2018, with projections for stock market performance clocking in at 8% basis Goldman Sachs. But not all is well –  a Moody’s report notes that specific asset sectors are struggling, particularly when it comes to  car loan quality worsening.

ValueWalk

Moody’s anticipates that US GDP growth will strengthen slightly to 2.3% in 2018 from 2.2% in 2017, with unemployment also continuing to move lower to 4.0% from 4.4%.

Auto loan quality is worst, but pockets of “challenged” loans exist across the board

Auto loan ABS issuers will likely securitize pools with attributes broadly similar overall to those in the pools backing their 2017 securitizations, even as a further decline in US auto sales pressures lenders to loosen underwriting to support volumes. We project sales will slip another 0.6% after an estimated 3.6% drop in 2017, following eight consecutive years of annual increases.

Auto loans appear to be on the front-lines of credit issues. Household debt, for instance, has increased to $13 trillion, with a significant part of that increase in auto loans. Sub-prime auto loans, in particular, are showing signs of weakness.

When looking at investment in asset-backed securities, the originator makes a difference. ABS backed by loans from online lenders such as SoFi, Lending Club Corporation, Prosper Marketplace Inc. and Marlette Funding have correlated with “prime credit quality.” But that is not the case across the board.

Source: ValueWalk

Square to small banks: Don’t lump us in with Amazon and Facebook (American Banker), Rated: A

Square, the Silicon Valley payment processor that is at the center of the fight over the tech industry’s ambitions in banking, is firing back at its small-bank critics, while also taking steps to placate community activists.

Advocacy groups that once expressed concern about the adequacy of Square’s plan to satisfy its obligations to low- and middle-income customers are now sounding more supportive of the fintech’s bid to open a bank.

Levi King of Nav (Lend Academy), Rated: A

In this podcast you will learn:

  • Levi’s background that led to the founding of Nav.
  • The products that Nav offers today.
  • How their business model works.
  • How they get small business owners interested in finance.
  • How Nav saves their customers money.
  • Why Levi thinks that small business owners may not need to be educated on finances in the future.
  • Their approach to producing content on their site.
  • The marketing channels they use to attract small business owners.
  • Levi’s thoughts on the entry on Amazon, PayPal and Square into small business lending.
  • Why proprietary data sets are going to be so important going forward.
  • The story behind the Nav brand and why they rebranded a couple of years ago.
  • The big name equity investors they have and how they closed their funding rounds.
  • What the future holds for Nav.

Traditional FAs Shouldn’t Fear AI (Financial Advisor IQ), Rated: A

Traditional wealth managers are convinced the advent of robo-advisors and artificial intelligence threatens the jobs of financial services professionals, Wendy Spires writes on WealthBriefing. But the reality is that the high-touch business of financial advice stands to benefit from AI, as do its traditional practitioners, she writes.

For example, while 71% of wealth managers believe financial advice clients are prepared to accept advice from robo-advisors, the reality is different, she writes. Self-directed investing, for example, dropped from 45% in 2010 to 38% in 2016 — during a time when the number of robos and the services they offer expanded significantly, according to Spires.

 

Working in America’s gig economy (Multibriefs), Rated: A

“The gig economy … is now estimated to be about 34 percent of the workforce and is expected to be 43 percent by the year 2020,” notes Intuit CEO Brad Smith. “We think this points to a lot of growth as we look ahead.”

Based on the most recent demographic data available from the Bureau of Labor Statistics, it appears the gig workforce is fairly evenly distributed across the age spectrum, but the highest percentages are seen at opposite ends of the scale. Individuals 65 years and older had the highest level of self-employment at 24.1 percent, while those under 35 (the so-called millennial generation) made up 18 percent.

BLS data reveals a few more interesting statistics concerning the gig workforce:

  • Men are almost twice as likely as women to be self-employed.
  • More than 30 percent of gig workers possess professional or advanced degrees.
  • Whites and Asians are marginally more engaged in gig work than are other racial or ethic groups.

In fact, data crunched by online lender Earnest and reported by Priceonomics indicates that about 85 percent of gig workers make less than $500 per month.

Consumer board seeks $ 287 million in restitution over CashCall case (Northern California Record), Rated: A

A Nov. 20 hearing featured the Consumer Financial Protection Bureau calling CashCall a purveyor of “financial snake oil” and arguing the online lender should pay as much as $287 million because they deceived customers.

How To Build The Best B2B Customer Experience (Forbes), Rated: A

In order to build the best B2B customer experience, companies should focus their effort on four principles:

  1. Invest in digital systems. Financial technology start-up Kabbage leverages new technology to approve small business loans in just seven minutes—a huge improvement over the 20 days it takes a typical bank. By simplifying the loan application process for web and mobile, Kabbage allows customers to apply for loans within minutes from anywhere in the world, which relieves a huge pain point for small businesses.
  2. Leverage data.
  3. Customize the experience.
  4. Use omnichannel to see the big picture. In fact, the average B2B customer uses six different channels as they make a decision. Customer experience happens in many places, which means companies need to create a consistent omnichannel experience.

Interesting Investments: Peer-to-Peer Lending (Equities.com), Rated: A

Peer-to-peer (P2P) lending, also known as peer lending, crowdlending, or social lending, is essentially what it says on the tin: lending money to another in an unsecured loan.

Prosper, one of the bigger companies managing P2P lending, has seen a fairly consistent return of about 9 percent through 2014, with a dip to 6.6 percent in 2012. Lending Club has seen a rise from 4.9 percent in 2009 to about 8 percent in 2014. All told, not bad ROIs.

First, you must be at least 18 years old, with a Social Security number, and live in an eligible state to even consider investing. Then, some states require that you have a minimum $70,000 gross income ($85,000 for California), and a minimum net worth of $70,000. You may not be able to invest more than 10 percent of your net worth. However, if your net worth is at least $250,000, there is no minimum income requirement.

Prosper, for example, has an annual default rate 3 to 4 percent higher across all grades. Lending Club has a 6 to 7 percent default rate.

Boston Fintech Company Cayan Is Getting Acquired for $ 1.05B (Bostinno), Rated: B

Cayan, a payment processing company that has been around the Boston fintech scene for the last 19 years, is in the process of getting acquired by Total System Services in an all-cash transaction valued at approximately $1.05 billion. The transaction is expected to close in the first quarter of 2018.

United Kingdom

Octopus Choice passes £100m AUM (AltFi), Rated: AAA

Octopus Choice has passed £100m of assets under management, following on from the launch of its Innovative Finance ISA in the summer.

Assetz Capital Makes Changes to the Great British Business & Green Energy Accounts (Crowdfund Insider), Rated: A

On Monday, online lending platform Assetz Capital announced it is doing away with the Great British Business Account (GBBA) and the Green Energy Account (GEA).

Ranger Direct Lending makes further $ 9.1m provision for Argon Credit (AltFi), Rated: A

The £232m Ranger Direct Lending fund has made a further $9.1m provision against its indirect investment in the collapsed Argon Credit lending platform.

ThinCats Reveals New Branding, Launches Updated Website (Crowdfund Insider), Rated: B

SME peer to peer lender ThinCats has launched a new website and branding designed to position itself for its next phase of growth in 2018.

Goji – Empowering Direct Lending (LinkedIn), Rated: B

Paul McMahon, former group marketing director of Aegon and UK CEO of FNZ, and Vincent Bordes, Founding Partner of Vestigo, the credit risk consultancy, will comprise the advisory board. Elizabeth McCallum joins as Goji’s Head of Marketing,  David Beacham as our Head of Distribution, and Rehan Islam as Head of Investments.

China

China’s Wild Bunch: Startup Investors Are Cashed-Up Cowboys (WSJ), Rated: AAA

In the first 11 months of this year, 3,418 new venture-capital and private-equity funds in China raised 1.6 trillion yuan ($241.76 billion), more than double the amount of 2015 and more than 10 times that of 2006, according to consultancy Zero2IPO Group. It estimates about 12,000 investment firms manage 8.5 trillion yuan in capital, an increase from 8,000 firms managing 5 trillion yuan in 2015.

Out of 221 unicorns in the world, 59 are in China, according to CB Insights. While that may lag behind the 127 from the U.S., it’s ahead of the U.K.’s 12 and India’s nine. Many Chinese investors want to invest in Silicon Valley because they think the valuations there are more reasonable.

Government agencies and local governments have announced 1,040 venture funds since 2015 aiming to raise about 8 trillion yuan, according to Zero2IPO. Much of the money is used to lure businesses to set up local offices, to help boost employment and tax revenues. The Hubei Province’s 200 billion yuan fund is believed to the largest of its kind.

Source: The Wall Street Journal

Borrowing From Multiple Online Lenders Remains Prevalent (Caixin), Rated: AAA

In China, online lenders or peer-to-peer (P2P) platforms that only facilitate lending do not have full access to borrowers’ credit information as there is no such centralized platform that shares the data.

Some borrowers take advantage of this information asymmetry to apply for loans from multiple lenders so they can roll over previous debts elsewhere, or to take out cheaper loans to repay the ones that charge higher interest rates and profit from the difference, or even become lenders on other P2P platforms themselves, according to a study by the Beijing Internet Finance Industry Association.

The association’s recent report found that among the 61 online lenders surveyed, 44% of their customers on average had borrowed from multiple sources.

The survey found that nearly 500,000 borrowers tried to profit from arbitrage by taking advantage of the different interest rates charged by different online lenders. On average, each of them borrowed from 2.36 online lenders, the survey said.

China’s war on risk hands US$ 121b loan market to big firms (The Malay Mail Online), Rated: AAA

China’s whac-a-mole approach to risk — hit it everywhere it pops up — is set to hand control of the surging US$121 billion technology-driven lending market to a small group of leaders such as Lufax Holding and the finance affiliate of Jack Ma’s Alibaba Group Holding Ltd.

Macquarie estimates credit extended by China’s fintech firms will jump more than seven-fold by 2022 to 6.2 trillion yuan (RM3.8 trillion) to pay for things like luxury and household goods or training and education. About half that market is micro-lending — typically small, short-term loans with high interest rates, Macquarie says.

China’s 10 biggest fintech companies account for 36 percent of all loans, said Dexter Hsu, a Taipeh-based Macquarie analyst. Tighter regulation could erode China’s more than 2,000 online micro-lenders and so-called P2P platforms, which directly match borrowers with investors, to less than 200, he said.

Chinese FinTech IPOs Don’t Dazzle Wall Street (PYMNTS), Rated: A

Newly listed Chinese FinTech companies in the U.S. are struggling on Wall Street, leaving investors with unexpected losses and posing as a setback to other Chinese firms hoping to go public.

“The quality of the businesses were either too early [to go public], untested or just poor,” said Anh Lu, an equities portfolio manager at T. Rowe Price in Hong Kong. “And they were asking for very high valuations on top of that.”

European Union

Funding Circle hits €100m lending milestone in Germany (P2P Finance News), Rated: AAA

FUNDING Circle has hit the €100m (£88.2m) loans milestone in Germany just two years after launch in the country.

The business lending platform says 3,000 investors have backed 1,100 German businesses and created more than 2,000 jobs since 2015.

The platform entered the European market following its acquisition of German platform Zencap in 2015. It now has operations in the UK, US, Germany and the Netherlands.

Earlier this month it said it had passed £3bn of lending in the UK and $5bn globally across all its platforms.

C’est Génial! Younited CREDIT Tops 100,000 Loans (Crowdfund Insider), Rated: AAA

Younited Credit has just surpassed 100,000 in loans since platform inception. The Paris based online lender (formerly named Pret d’Union) reported an accelerating rate of loan originations as the number has doubled since September 2016 when total loans stood at 50,000. The platform provides loans from €1000 to € 40,000. To date, Younited Credit has originated over € 650 million in loans.

BorsadelCredito.it Raises €1.6M in Funding (FinsSMEs), Rated: A

BorsadelCredito.it, a Milan, Italy-based fintech startup, raised €1.6m in funding.

The round was led by P101 Ventures, with participation from Azimut Enterprises Holding, GC Holding, Banca Popolare di Fondi and private investors.

DreamQuark wins the 2017 Fintech of the Year (Digital Journal), Rated: B

A startup company called DreamQuark, which produces Artificial Intelligence applications for financial services, has been awarded the Finance Innovation ‘Fintech of the Year’ prize.

National Personal Credit Platform Appoints Chairman (Caixin), Rated: B

The chairman of a wholly-owned central bank subsidiary, Zhu Huanqi, has been appointed chairman of a planned national personal credit-information platform, Caixin has learned from sources familiar with the matter.

International

Online Banking and Payments: Innovative Solutions on the Horizon (FinsSMEs), Rated: AAA

In the near future, online banking and payments will go through some fascinating changes beyond what has already happened over the past several years.

Advanced Mobile Payments

Today, there is increasing demand for biometric authentication apps. To ensure that consumers get what they want, MasterCard is going a step further by developing facial identification, voice recognition, and even cardiac rhythm programs. These innovative solutions will enhance the mobile payment experience for customers and retailers alike.

Growing Opportunities for Mobile Wallets

Back in 2014, Apple was the only real contender for mobile wallets. Within just one year, others followed their lead, including Samsung and Google. Then, in just a short amount of time, more big-name players joined in, such as Chase, Amazon, and Walmart. However, that was not the end. Even social media platforms started offering online payment options. With sites like Facebook that have mobile wallet solutions, people can send money and make payments.

Another prediction is that by 2025, 75 percent of all transactions will be made using mobile wallets rather than actual cash.

Greater Demand for Digital Remittances

For instance, a San Francisco-based company founded in 2001 called Xoom has experienced amazing growth because of digital remittances. In fact, it passed up MoneyGram, which speaks volumes.

Growth Potential with Peer-to-Peer Lending

For instance, having originated loans over $20 million since being founded, Lending Club ranks as one of the fiercest competitors in this arena.

How Banks Are Leveraging Chatbots for Customer Service (Crowdfund Insider), Rated: A

Bank of America: Erica

In October of 2016, Bank of America unveiled Erica, their new AI chatbot. Available in the bank’s mobile app, Erica can work with voice and text commands.

Erica uses machine learning and specially-designed algorithms to provide Bank of America services that were typically reserved for the bank’s top-tier customers. As an example, it could recommend a way to pay down more on your credit card debt to save on interest payments. Or if your checking account is close to being overdrawn, it could contact you to recommend a transfer from your savings account.

Swedbank: Nina

Customers can access Nina from the bank’s website, and it can understand a wide range of text requests using specially designed Natural Language Understanding technology.

In the first three months after Nina’s release, the software was handling an average of 30,000 customer interactions per month.  Of those early interactions, Nina was able to provide a resolution rate of 78%.

Capital One: Eno

Eno from Capital One is a chatbot program that works through SMS messaging.

You can use this AI chatbot to check the balance on your accounts, see your available credit, track recent transactions, pay bills, and more.

Wells Fargo

The Wells Fargo virtual assistant is a chatbot that the bank recently released for use with Facebook Messenger. Once a customer enrolls their account, they can then use Messenger to contact the virtual assistant for basic tasks like tracking recent transactions, balance inquiries, and finding the nearest ATM.

Digital investments: Modern ways to invest in the digital age (Bankless Times), Rated: A

The internet has brought about all kinds of new ways to invest one’s money.

  • Bitcoin
  • Peer-to-peer lending – You’re best off using a well-established site such as Ratesetter.
  • Micro-investment apps – Some apps round up all of your expenses to the nearest dollar and then put the leftover change into an account (for example, if a cup of coffee costs $3.14, this will be rounded up to $4 and the $0.86 extra change will be put into the account).
  • Social media shares
Australia/New Zealand

Australian Fintech Airwallex Secures $ 8 Million Investment From Square Peg (Crowdfund Insider), Rated: AAA

Less than one year after securing $13 million during its Series A funding round, Aussie fintech startup Airwallex announced it has received an $8 million investment from Paul Bassat’s Square Peg.

Testing a chatbot’s home loan advice gives a range of outcomes (Stuff), Rated: A

A mortgage broking firm is offering an AI chatbot to help first-home buyers understand some of the basics – but an experiment shows you shouldn’t put too much faith in any online calculators’ estimates of how much you might be able to borrow.

Squirrel has launched Alan, an online tool that answers questions like “how much deposit do I need”, “what’s an auction” and “how much can I borrow?”

Regulatory Pathway for Challenger Banks Just OK, Could be Improved (Crowdfund Insider), Rated: A

FinTech Australia has provided a comment onthe consultation paper published in August regarding authorising new entrants into the banking industry. The creation of digital challenger banks in Australia is a welcomed move but, according to FinTech Australia, needs some improvement.

India

5 Consumer Lending Trends To Look Forward To In 2018 (Inc42), Rated: AAA

This amendment to the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 is a step towards standardisation and providing a visible digital identity, thereby promoting transparency in financial transactions. Another factor that is pushing financial transparency is the rise of Fintech and the subsequent new-age companies that are offering digital avenues for finance such as payment platforms, blockchain companies, alternative financers like P2P lenders and so on.

Consumer Lending Trends To Look Forward To In 2018

Alternative Lending Boom

New service providers will serve the underserved and unserved, meeting the unmet demand. We will continue to see the rise of direct lending as well as P2P lending, marketplaces, crowdfunding platforms etc.

Ease Of Access To Credit

Credit will continue to grow, thanks to the alternative lending boom. One such burgeoning space is the Line of Credit. It has gained momentum in 2017 with the metros being early adopters and is expected to expand into tier 2 & tier 3 cities in 2018.

The Rise Of InsurTech

Investment In Emerging Technologies

Blockchain will expand in putting together smart contracts, and digital identification. Already, FinTech investments in Asia increased to $5.4 billion in 2016, up 12.5% from $4.8 billion in 2015, driven mainly by China and India.

Government And Regulatory Push For Fintech

Asia

Unique Secured P2P Lender Silver Bullion Reaches $ 50 Million in Loans (Crowdfund Insider), Rated: AAA

Silver Bullion, a peer to peer lending platform based in Singapore, has reached $50 million in loan originations. The unique platform that provides secured lending based off of bullion saw more than double the lending volume in 2017 versus year prior.

Amartha Powers Micro Peer to Peer Lending in Indonesia, Focuses on Women Entrepreneurs (Crowdfund Insider), Rated: A

Amartha Founder & CEO, Garuda Typhoon Andi Putra recently commented;

“Since its establishment, Amartha has been committed to connecting the unbanked micro entrepreneurs, and investors who want to add this asset investment in a sector that is more profitable and socially valuable. The uniqueness lies in the micro-entrepreneurs or Amartha Partners, all of which are women. Today, more than 72,000 women micro entrepreneurs throughout Indonesia have enjoyed our services, with a total fund distributed more than 200 billion rupiah (US $ 15 million). “

Affin Islamic Bank lists latest sponsored venture on IAP (New Straits Times), Rated: A

KUALA LUMPUR: Affin Bank Bhd’s wholly owned subsidiary, Affin Islamic Bank Bhd, has today listed its latest sponsored venture with Segi Seri Sdn Bhd on Investment Account Platform (IAP), a shariah-compliant platform similar to crowdfunding and peer-to-peer lending platforms.

Affin Islamic said the venture plans to raise RM3.3 million on IAP to part-finance contract awarded to them recently, which is related to preparation and serving of dietetic food to an established government hospital in Malaysia for a duration of three years.

 

Canada

Another challenge is the new technology. Instant Financial Inc., a Vancouver-based startup, released an app this year that lets workers paid by the hour get their day’s earnings after a shift. It’s free for employees. Employers pay a fee. The focus so far is the hospitality industry, and includes companies such as McDonald’s and Outback Steakhouse in the United States. Instant has about 175,000 people on the service in the United States and about 5,000 in Canada. Wal-Mart has a similar product, which it sourced from another company.

Africa

A mobile banking service is transforming how the poor transfer money — here’s how it works (Business Insider), Rated: AAA

In 11 countries around the world, some 30 million people use a mobile money service that is transforming how people handle their finances.

It’s called M-Pesa, and it has lifted hundreds of thousands of people out of poverty in Kenya.

Krispo, 40, is enrolled in GiveDirectly’s experiment in basic income, a system of wealth distribution in which people receive a standard salary just for being alive.

The money comes with no strings attached. Krispo and the other villagers have received $22 a month since October 2016, and they’ll continue getting it until October 2028.

Scattered around town are M-Pesa stands, outfitted with live agents who can dispense money — essentially an ATM with a human teller.

There is a small fee for each transaction. For the amount given to GiveDirectly recipients, this fee is 30 shillings. (GiveDirectly actually wires 2,280 shillings each month — 30 shillings above the 2,250 recipients can spend — to cover the cost.)

Authors:

George Popescu
Allen Taylor

Tuesday November 21 2017, Daily News Digest

Purchase APR LendingTree

News Comments Today’s main news: Experian buys, integrates Clarity Services. Think Finance files for bankruptcy. PayPal offers robo-investing. Assetz Capital achieves 1.5M GBP funding through Seedrs. Elevate launches industry research repository. Nav Athwal steps down as CEO of RealtyShares. Ping An Insurance prepares for Lufax IPO. TransferWise doubles revenue. Today’s main analysis: LendingTree releases monthly mortgage offer report. Today’s thought-provoking articles: The […]

Purchase APR LendingTree

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United States

Integration of Clarity Services Inc by Experian (Experian Email), Rated: A

Dear Clarity Services Inc Supplier:

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Experian

Think Finance Files for Chapter 11 (U.S. Bankruptcy Court), Rated: AAA

Read the court brief here.

PayPal in robo-investing venture (The Australian), Rated: AAA

The payments company was connecting its website and smartphone apps with those of Acorns Grow, a five-year-old automated savings and investment service, the two companies said on Monday.

PayPal users would be able to use their accounts to make contributions to Acorns and would be able to monitor and manage their Acorns investments from the PayPal app, said Joanna Lambert, the company’s vice-president of consumer financial services.

PayPal is rolling out the Acorns offerings in phases, with the first batch of users getting access on Monday and all US users by early 2018.

Elevate’s Center for the New Middle Class Launches Industry Research Repository (BusinessWire), Rated: AAA

The Center for the New Middle Class, a research-focused body developed by Elevate to engage and educate the public about the growing needs of individuals who do not have access to traditional credit options, today announced it has launched an industry research repository for researchers, reporters, policy makers and the general public. Known as the Resource Database, it is a curated collection of the best research on non-prime Americans and their challenges, attitudes, and needs.

In addition to containing external research and editorial content from sources such as Pew, the National Bureau of Economic Research and “The Atlantic,” the database will house research and commentary from the Center for the New Middle Class regarding economic conditions that affect America’s New Middle Class.

By visiting the database here users can search for entries, filter the results, and see the full bibliographic reference of information provided.

The Cleveland Fed Retracts Their Report on “P2P Lending” (Lend Academy), Rated: AAA

The shame of all this is that all the sensational headlines have already been written and confirmed in many people’s minds the supposed shady nature of our industry. It would have been far better for everyone if the authors of this report had done their homework and produced a thoroughly researched report in the first place.

As Todd Baker pointed out, “we really should know which online lenders are adding to consumer financial health and which ones are detracting from it.”

Why The Cleveland Fed Pulled Their Online Lending Study (PYMNTS), Rated: AAA

“[These borrowers] are not underbanked, they’re sort of overbanked,” observed Yuliya Demyanyk, a Cleveland Fed economist and co-author of the report. “Defaults on [marketplace] loans have been increasing at an alarming rate, resembling pre-2007 crisis increases in sub-prime mortgage defaults, where loans of each vintage perform worse than those of prior origination years.”

The authors of the Nov. 9 report “have received several questions about the composition of the underlying data set they used in their analysis,” the Cleveland Fed said on its website, and are “revising their paper to further clarify the data sample they used” and will post the new version as soon as it’s ready.

So, what happened?

One theory is that they may have stretched the definition of online lending so far as to make an accurate and credible apples-to-apples comparison implausible.

Karen Webster spoke with Lending Club’s head of government relations, Richard Neiman, to get a better sense of the source of discrepancy, since even Googling the definition of marketplace loan, Webster commented, might have saved the Cleveland Fed economists a lot of grief.

“The industry is so big now,” Neiman said, “that it is not easy for policymakers to fully understand the divergences between different platforms, the different products, the different modeling and the differences in levels of transparency that are now defined as online lending.”

LendingTree Releases Monthly Mortgage Offer Report for October (Business Insider), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today released its first monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network.

  • October’s best loan offers for borrowers with the best profiles had an average APR of 3.75% for purchase and 3.70% for refinance, on conforming 30-year loans.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 3 bps month over month, to 4.31%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was up 7 bps to the highest since July.
  • Consumers with the highest credit scores (760+) saw an average APR offer of 4.18% vs 4.44% for consumers with scores of 680-719. The APR spread of 22 bps between these score ranges was 1 bps lower than in September. The spread represents nearly $12,600 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $228,730. Additional costs are due to higher interest rates, larger fees or a combination of the two.
  • Refinance APRs for conforming 30-yr fixed loans were up 10 bps to 4.26%. The credit score bracket spread widened to 16bps from 15 bps, nearly $7,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,844.
  • The average proposed down payment for purchase mortgages have been rising for 7 months and reached $59,680 in October.
  • Average monthly payments were little changed at just over $1,100 for both purchase and refinance. The credit score bucket spread was $241 for purchase and just $77 for refinance.
Source: Business Insider
Source: Business Insider

Inflation and Counterfeit Credit (GoldSeek), Rated: AAA

Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar.

The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are not lifting yourself up by them in the first place.

We must emphatically state that the government does not print. It borrows. Congress does not have a printing press, to create greenbacks. It has a Treasury that can sell bonds to cover whatever payments the government is obligated to make that it has not got tax revenues for. Over the past year, for example, the government increased its debt by over 630 billion dollars.

Like any bank, the Fed borrows to fund its purchases of interest-paying assets. It earns a spread between what it pays (currently about 1.25%) and what its asset portfolio pays (over 2%). The commercial banks currently deposit over $2.1 trillion in excess reserves, and the Fed’s total liabilities are over $4.4 trillion including Federal Reserve Notes (on which the Fed pays zero). Unlike any commercial bank, there is a law that obligates us to treat the Fed’s liabilities as if they were money.

We are working on the problem that all borrowing and lending uses the dollar. We offer gold financing, simplified and a yield on gold, paid in gold.

Source: GoldSeek

Right now speculative mania is occurring in crypto currencies so that may (but not necessarily, beware correlation!) shunt such capital flows away from gold. As to default risk, there are signs of rising stress in high yield credit markets, but it’s early yet.

Nav Athwal Exits CEO Role at RealtyShares (Crowdfund Insider), Rated: AAA

Nav Athwal, one of the more prominent founders in the real estate crowdfunding space, has announced his decision to step down from the CEO role at RealtyShares, a platform he founded four years ago.

Ed Forst, RealtyShares Board Member and former CEO of Cushman and Wakefield, has been selected as the interim CEO while the company searches for a permanent replacement.

Crowdfund Insider spoke to Athwal regarding his decision to change his leadership role at RealtyShares and he explained he would continue to be engaged with the company;

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors. I asked Ed Forst to take on the role of interim CEO, while we look for a permanent CEO who will fit the culture and profile we’re seeking. I am still very much a part of RealtyShares and will be actively involved in strategic decision-making. I am looking forward to supporting the company in this new capacity and getting back into principal real estate investing and agribusiness. As I begin to work on additional projects, I will be sure to let you know.”

Leading RealtyShares Into Its Next Chapter (RealtyShares), Rated: A

I started RealtyShares four years ago with the idea of creating a company that would make real estate more accessible, efficient, and transparent. RealtyShares has come a long way since those early days in my living room. It is now a 100-person operation and the leading platform for online real estate investing and capital formation.

My primary focus has always been to best position RealtyShares for future success. RealtyShares is now at an inflection point. I will remain on the Board of Directors supporting the company as it continues on its journey to build a global marketplace for real estate investing.

Kabbage Releases Research: On Building Successful Small Businesses (Crowdfund Insider), Rated: A

Kabbage Inc., a global financial services, tech and data platform serving small businesses, released new data reporting on the similarities that connect all small business owners (SBOs), including personal sacrifices, professional challenges and growth expectations. Featuring responses from 400 SBOs, the data shows more than 67 percent expect to increase revenues by the end of 2017, with more than half anticipating an increase of 10 percent or higher.

In partnership with Bredin, a leading small-business market research firm, Kabbage polled small business owners across industries, including retail, education, manufacturing, food and beverage, healthcare, automotive, energy and finance.

RealtyMogul Tops $ 300 Million in Real Estate Funding (Crowdfund Insider), Rated: A

RealtyMogul has topped $300 million in total deal flow.

RealtyMogul has garnered over 140,000 investors, received over $300 million invested into deals presented on its platform and returned $65 million to its investors since its inception in 2012.

RealtyMogul Wins Gold in 2017 Stevie Awards for Women in Business (BusinessWire), Rated: A

RealtyMogul has been awarded the Gold Stevie Award in the Consumer Services category during the 14th annual Stevie Awards for Women in Business.

The Stevie Awards for Women in Business are the world’s top honors for female entrepreneurs, executives, employees and the organizations they run. All individuals and organizations worldwide are eligible to submit nominations – public and private, for-profit and non-profit, large and small. The 2017 awards received entries from 25 nations and territories.

The Postal Banking Solution (Jacobin Magazine), Rated: A

Fewer than two thousand people live in Bluff, but any one of them can walk into the post office and cash a check or apply for a loan.

Meanwhile, the United States is riddled with what are called banking deserts — inhabited areas, many of them urban, where residents have no access to a bank.

One in four US households is unbanked or underbanked, meaning they’re fully or partially boxed out of traditional financial services. Those 68 million people represent a growing market for payday loan sharks, and spend an average of 10 percent of their yearly income on the high interest and fees that go with alternative financial services — roughly the same proportion they spend on food.

But there’s a collective solution to the banking desert: we could set up a public postal banking system like New Zealand’s.

Fighting the fees: robo-advisers win followers, if only for lower costs (Pittsburgh Post-Gazette), Rated: A

But one day last year Mr. Hansen was complaining to his mother, an avid investor, about the high fees he was paying on his investment account. She suggested he look into an online investment company called Betterment that markets itself as a low-fee alternative to traditional financial advisers.

Some of the most popular robo-advisers — such as Betterment, Wealthfront and Charles Schwab’s Intelligent Portfolio — use exchange-traded funds to keep costs low. Betterment charges an annual fee of 0.25 percent of the account value. Wealthfront charges no fee for accounts $10,000 or less. Schwab’s robo-advising platform limits its fees to the operating expenses included in the ETF, which range between 0.07 percent and 0.21 percent of the fund balance.

Citizens Bank, a Providence, R.I.-based bank that claims the third-largest deposit market share in the Pittsburgh region, introduced a new digital investment and advisory platform on its online banking home page in September.

A July report by S&P Global Market Intelligence predicts that digital advice assets will grow from $98 billion at the end of 2016 to $460 billion at the end of 2021.

InterNex Capital Launches “Velocity” (PR Newswire), Rated: A

Digital asset-based lender, InterNex Capital (“InterNex”) is pleased to announce their Velocity platform for small and medium-sized businesses. Velocity provides borrowers on demand liquidity through the InterNex Line of Credit and delivers real-time access for working capital management. Velocity empowers accelerated growth and powerful analytics, traditionally only available to large enterprises.

Wells Fargo adds overdraft protection with Rewind (Bankrate), Rated: B

On Nov, 14th, Wells Fargo announced Overdraft Rewind, a new feature to help customers avoid fees for overdrawing their checking accounts right before payday, when overdrafts most commonly occur.

Going forward, the bank will not charge overdraft or insufficient funds fees if a direct deposit large enough to cover those charges is received by 9 a.m. local time the day after the account goes negative.

You don’t need to opt in; if you have a Wells Fargo account, you’re covered by default.

Fintech seeks to ‘democratize data’ with Nasdaq’s help (American Banker), Rated: A

The fintech startup Intrinio has partnered with Nasdaq to include the exchange’s real-time data feeds in its financial data marketplace.

Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept (Global Debt Registry), Rated: A

Global Debt Registry (GDR), the asset certainty company, today announced it has developed a collateral pledge registry, the first of its kind in the structured credit space, using Hyperledger Fabric, one of the Hyperledger blockchain framework implementations hosted by The Linux Foundation.

Midwest is on the rise in attracting tech investors’ interest (Crain’s Cleveland Business), Rated: A

Among those quoted in the story is Mark Kvamme, a top venture capitalist in Silicon Valley who now heads Columbus-based Drive Capital. The firm has raised $550 million and invested in 26 companies, betting, The Timessays, that “the middle of America amounts to an undervalued asset, rich in markets, new business ideas and budding entrepreneurs.”

Even so, three-quarters of all venture capital invested in America goes to California, New York and Massachusetts, the National Venture Capital Association estimates, and Ohio gets less than 1%.

Getting Help with Credit Card Debt (Business Insider), Rated: A

For the many Americans who face unmanageable credit card debt, it’s time to get their financial lives in order, says Andrew Housser, co-founder and CEO of Freedom Debt Relief– and if they need outside help, time to know how to find the right firm.

People looking for a trustworthy debt relief organization to help win the battle against debt can ask Housser’s seven questions:

  1. Does the company provide actual consultations and free advice to consumers?
  2. Does the company provide educational material, including budgeting and financial advice, free of charge?
  3. What is the background of the firm’s management team?
  4. How long has the company been in business?
  5. Request and review the company’s dropout and completion rates.
  6. What are the fees, and how will the firm assess them?
  7. How will the company help with creditor calls?

Atomist is formally launching with the Developer Automation Platform, an open source client and API. The new Development Automation Platform is designed to bring automation into the development and delivery process so that developers can focus on more important tasks.

Companies such as NVIDIA, Pivotal, Kyyti Group, Marlette Funding and Barclays Africa use Atomist for automation.

Mphasis’ top trends in Cognitive Intelligence in 2018 (CIO), Rated: B

  1. Smart environments with Pervasive Human and Machine Networks
  2. Predictive Analytics driven Customer 360
  3. Artificial Intelligence driven Multi-structured analytics – Cognitive Intelligence can enable insurance companies in analysing contact centre as well as chat data interactions in real time to predict propensity for fraud based on voice, video and text analysis and correlating the same with other similar fraudulent customer behaviors. The long term objective in such scenarios is to build machine learning based intelligent systems which learn on an ongoing basis based on historical pattern based analysis of billions of user and machine data points and predicts events.
  4. Immersive Multi-modal User Experiences
United Kingdom

Assetz Capital Achieves £1.5 Million Through Latest Seedrs Funding Round (Crowdfund Insider), Rated: AAA

Less than a month after launching its latest equity crowdfunding campaign on Seedrs, peer-to-peer lending platform Assetz Capital has successfully secured £1.5 million from more than 700 investors. The online lender took to the funding portal to raise £1 million for expansion.

Banking bots advise NatWest customers on investments (ITPro), Rated: AAA

NatWest has launched a chatbot that allows customers to seek financial advice from the comfort of their sofa.

The bot will determine the best way for customers to invest their money by asking questions such as what they want to achieve from investments, their current financial situation, what they can afford, their debts and other personal information, plus their attitude to risk.

It will then suggest ISA products they could consider for investment, plus how much they should consider investing and the most effective way to use their ISA allowance.

Monzo plans crowdfunding push to deepen ties with customers (Financial Times), Rated: A

Banking app Monzo is planning to launch one of the UK’s largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”.

Tom Blomfield, chief executive, said the start-up, which raised £71m in a private equity fundraising earlier this month, intends to make a further cash call of between £10m and £30m in 2018.

However, the main driver of the crowdfunding push would be “to enable the customer base to own part of the bank”, Mr Blomfield said, adding that crowdfunding created a “genuine sense of ownership”.

Payday loan firm used £1.2m pension liberation scheme to pay debts (Citywire), Rated: A

Three directors of an insolvent payday loan firm which received cash from pension liberation schemes have been disqualified.

Speed-e-Loans.com (SEL), used £1.2 million from private investors via the schemes to meet its existing debts.

Directors Philip Miller, Robert Alan Davies and Daniel Jonathan Miller have been banned from acting as directors for nine, six and five years respectively for breaching fiduciary duties and the duties of care, skill and diligence.

China

Ping An Insurance Preparing For IPO Of Online Financing Platform Lufax (Asian Review), Rated: AAA

Ping An Insurance Group is working towards an initial public offering for its peer-to-peer online financing platform Lufax Holding, the Chinese insurer’s chief operating officer said on Monday.

She didn’t provide a timeline or size for the planned public offering. The company was valued at $18.5 billion after a round of fundraising last year.

Ping An Insurance sells tech, lightens assets to aid returns (Asian Review), Rated: A

Ping An Insurance Group will go light on assets and target technology exports as its next mainstay, China’s leading financial conglomerate said Monday.

European Union

TransferWise reports doubled revenue for last fiscal year (AltFi), Rated: AAA

The London-based firm’s annual revenue has grown by 140 per cent since last year, coming in at £67m this year compared to £28m in 2016. Its audited results show an adjusted operating profit of £2m, and an overall profit for the fiscal year of £7.4m.

As a result, TransferWise’s operating loss has decreased from £17m in 2016 to £56,000 in 2017.

Swiss Platform Launches ICO Engine to Host Start-ups (TheStreet), Rated: A

Switzerland headquartered Eidoo has today officially launched a initial coin offering (ICO)engine that allows companies and startups to host ICOs through the Eidoo mobile app.

According to data provider Coinschedule, $3.3 billion has been raised in more than 200 ICOsover the past 12 months alone and the popularity of this innovative ICO form of crowdfunding shows no signs of relenting.

BNP Paribas buys 10% stake in SME credit specialist Caple (AltFi), Rated: A

Through the alliance and a 10 per cent stake in Caple, BNP Paribas Asset Management (BNPP AM) is establishing a new platform to offer alternative credit to European SMEs.

Australia/New Zealand

CEO Jeff Greenslade details why Heartland Bank is moving aggressively into digital banking (Interest), Rated: AAA

Greenslade also reiterated Heartland’s forecast for June 2018 year net profit after tax of between $65 million and $68 million, an increase of up to 12% from $60.8 million in the June 2017 year.

“While some understandably lament the decline of branch banking, the bricks and mortar approach is not something we can compete in and is showing signs of obsolescence,” said Greenslade.

He pointed to Heartland’s digital services offering livestock finance, personal loans, SME working capital finance and deposits, noting “significant opportunity” to build on these.

Heartland has just six branches in Takapuna on Auckland’s North Shore, Hamilton, Tauranga, Wellington, Riccarton in Christchurch, and Ashburton.

India

Lower interest rates for borrowers in offing? Read where things stand (Financial Express), Rated: A

The Reserve Bank of India’s (RBI) guidelines for peer-to-peer (P2P) lending will attract more people to these platforms and help bring down the interest rates for borrowers, Bhavin Patel, founder and CEO of LenDen Club, told Shritama Bose. Players in the segment have sought the regulator’s clarifications on the permissibility of institutional lenders on P2P platforms, he added.

Will the RBI guidelines have an impact on the lending rates?

In the current scenario, the P2P lending market is a minuscule percentage of the huge lending market in India. But, due to the sentimental impact of the regulation, many more lenders may take to P2P lending, resulting in higher liquidity on such platforms. This will eventually lead to reduction of the interest rates offered to borrowers in this segment.

How Fintech is Shaping Up the Future of Financial Services (Dekh News), Rated: A

Traditional banking institutions have changed very little in the last hundred years. Most offer online banking and mobile apps these days, but behind the scenes, very little has changed.

In total, $49.7 billion was invested in fintech between 2012-16, which indicates just how important fintech is.

Fintech innovators are more cost-effective than traditional lenders. Their technology and business models are low cost. A traditional lender may have operating costs of around 7% compared to an online lender whose operating costs are as low as 2%.

A staggering 38% of customers no longer visit banks. The rise of online banks has proven that traditional bank branches are not essential. Online lenders such as Atom have become firmly embedded in the banking ecosystem.

MENA

A tale of how two cities thrive in FinTech world (Khaleej Times), Rated: A

Two cities thrive in this new world. Singapore and Abu Dhabi. Long before renewable energy was pervasive, Abu Dhabi had established Masdar. It has brought in the magic of the Louvre from Paris. Singapore has consistently been ahead of the curve of change. The world’s largest vertical botanical garden paves the way for urban farming. The Marina Reservoir is a masterpiece of engineering and vision that turned an inlet of the sea into a strategically critical freshwater resource for the “Little Red Dot”.

Recently, the Abu Dhabi Global Market (ADGM) held its inaugural FinTech Abu Dhabi Summit.

Two major announcements were made at the event. The first was the launch of the ADGM FinTech Innovation Centre by the first half of 2018.

The second was about a collaboration. ADGM and Plug and Play, the world’s largest startup accelerator based in Silicon Valley, signed a new partnership to launch a startup acceleration programme in Abu Dhabi, focused on FinTech. The programme, first of its kind in the Mena region, will be housed within the ADGM FinTech Innovation Centre. The partnership was signed by Ahmed Al Sayegh, chairman of ADGM, and Saeed Amidi, CEO, Plug and Play. Some of Plug and Play’s success stories include Google, Paypal, Dropbox and Lending Club.

Authors:

George Popescu
Allen Taylor

How Subprime Lenders Can Leverage Debit Data in Our Cashless Society

How Subprime Lenders Can Leverage Debit Data in Our Cashless Society

For subprime lenders, three macroeconomic trends are affecting credit considerations on an applicant-by-applicant basis. Lenders caught flatfooted in response to these trends risk diminishing their ROI. Despite impressive job and market growth, 56 percent of consumers had subprime credit scores in 2015, according to the Corporation for Enterprise Development (CFED). Cash is no longer king. The average […]

How Subprime Lenders Can Leverage Debit Data in Our Cashless Society

For subprime lenders, three macroeconomic trends are affecting credit considerations on an applicant-by-applicant basis. Lenders caught flatfooted in response to these trends risk diminishing their ROI.

  • Despite impressive job and market growth, 56 percent of consumers had subprime credit scores in 2015, according to the Corporation for Enterprise Development (CFED).
  • Cash is no longer king. The average consumer uses their debit card at least 21 times per month, a 32 percent increase throughout the past decade, according to a 2015 debit issuer study commissioned by PULSE.
  • More lenders are beginning to understand the unreliability of the traditional credit score. Each year, 68 to 82 percent of borrowers are new to the subprime market, according to non-traditional credit reporting bureau Clarity Services. An even higher percentage of borrowers will be new to any given vendor. Almost 10 percent of these are thin- or no-file millennials with very different financial backgrounds than previous generations.

Here’s the good news: With access to targeted data, lenders can find reliable opportunities for growth while minimizing potential risks.

Subprime Credit Consumers: the New Majority

Subprime lenders are used to lower credit scores. Since new circumstances have put more consumers in the recent subprime majority, however, it’s worth exploring the circumstances of this larger share.

The financial crisis of 2008/09 occurred during the same time that millions of millennials came of age. In 2015, CreditCards.com found that a third of those aged 18 to 29 did not have credit cards. In 2009, the CARD Act limited the ability of companies to market credit cards on college campuses, cutting card issuance almost in half. As a result, the credit histories of millions of young adults are even more abbreviated than usual, contributing to the new subprime majority.

Additionally, a 2015 Consumer Financial Protection Bureau (CFPB) report explores the 26 million Americans who are “credit invisible,” and the 19 million considered “unscored” by the traditional credit bureaus. While one in 10 Americans don’t have any credit history, an additional 8 percent have insufficient histories, leaving them under-serviced in the credit industry.

These are the economic currents that have more subprime lenders seeking non-traditional sources for data.

Cash, Dethroned

Once upon a time, cash was how we paid for most things. Times have changed.

Today, cash accounts for about 14 percent of transactions, according to The Federal Reserve System Cash Product Office. The average American spends roughly $100 a day, according to Gallop, but walks around with only $20 cash, according to Bankrate.com.

A majority of younger adults in the developed world would have no problem with a completely cashless society, says data from ING Group/eZonomics. Given the difficulty of accurately determining a credit score for so many in today’s economy, now is a great time to consider additional measures for understanding an applicant’s financial stability.

Why More Data Is Needed for Scores

Before the Great Recession, lenders relied almost exclusively on traditional credit scores. The Big Three credit reporting agencies employ traditional models composed of criteria like bank loans, car loans, credit card bills, student loans, mortgages and various credit data. Unfortunately, for many millions of those in need of credit services, the above criteria simply won’t work.

But with the subprime majority of today, a number of creditors are looking at other factors.

  • Ability to pay: Regardless of income level or percentage of residual income, research shows that as long as an applicant for a subprime loan is earning money and has some residual income, they’re probably a safe bet. Of course, that’s assuming there aren’t any red flags for intent not to pay, such as an inability to prove bank account ownership.
  • Alternative data: Non-traditional credit data and alternative data are not the same. Non-traditional credit data is targeted squarely on credit behavior, whereas the latter often uses more peripheral sources. That can include data from social media to verify a job or location, histories from utility bills and Census data.

Connecting the Dots with Targeted Data

What is meant by “targeted data?” As the largest subprime credit bureau, Clarity Services leverages one of the largest targets available – debit cards. Every five seconds, one new debit card is issued in the United States (PULSE).

In recent years, debit cards accounted for the leading share of payment types. Their usage grew to 69.5 billion in 2015 with a value of $2.56 trillion, up 13 billion or $0.46 trillion since 2012, according to a recent Federal Reserve study. Non-prepaid debit card payments, the type typically connected to checking accounts, grew to 12.4 billion with a value of $0.42 trillion from 2012 to 2015.  This is after an increase of nearly 39 billion debit card payments from 2000 to 2012.

Half the time, Americans pay for groceries with debit cards, which are also used significantly at department stores, restaurants and other retailers, according to a TSYS 2014 consumer payments study.

What Debit Cards Say about Consumers

Why do so many prefer debit cards? The TSYS study shows that 66 percent of users like the ability to have purchases deducted directly from their checking account.

For subprime lenders looking to make better decisions in our cashless society, what could debit information reveal about an applicant’s financial circumstances? At a glance, debit and bank account info could yield immediate details to help confirm a high or low credit risk.

   Confirmation of primary bank account ownership status
            Total number of debit cards
            Number of social security numbers associated with a debit card
            Number of social security numbers associated with a bank account

Lenders may be able to see whether an applicant’s details are false, incorrect or somehow inconsistent by using the granular details offered by reason codes, which can answer the following yes-or-no questions:

  • Is the account in good standing?
  • Is the account associated with a high-risk bank?
  • Is the CVV a match?
  • Is the ZIP code incorrect?
  • Did retail transactions take place in the last 24 hours?

An Old Problem in a New Space

The details above not only yield insight to help manage risk of default, they also speak to another growing problem for lenders in spaces including rent-to-own, online and storefront installment – fraud.

As creative as fraudsters have been for things like payday loans, they are now applying many of the same tactics in the unsuspecting rent-to-own market. Lying on loan applications, account hacking and data leaked from the dark web are just some ways fraudsters are infiltrating the market.

The combined at-a-glance information with the more granular reason codes allow lenders to easily cross-reference data and glean a reliable impression of an applicant.

Adjusting to the New Normal

The “new normal” is an oft-cited term since the last economic crash. As subprime consumers have acclimated to today’s economy, lenders have benefited by adjusting to the market’s needs.

But have lenders fully capitalized on the new aspects today’s normal? For many, the answer is no. It’s worth analyzing the lifecycle of the consumer’s journey to subprime underwriting, and how lenders may simplify the process for the convenience of all parties involved.

Author:

 

Tim Ranney is president and CEO of Clarity Services, Inc., a real-time credit bureau providing credit-related data on subprime consumers. Prior to founding Clarity in 2008, Ranney spent 20 years as a leader in internet security and risk management, serving as COO of an industry leader and senior executive for both Network Solutions and VeriSign.

Wednesday August 30 2017, Daily News Digest

Prosper

News Comments Today’s main news: Prosper performance update for July 2017.Top Mozido executives quietly left company.White House OKs delay of fiduciary rule.Funding Circle kicks off 12M marketing campaign with TV ad.LATTICE80 to open London fintech hub.Klarna profits up 130%+.RateSetter hits 2,000 broker milestone. Today’s main analysis: Millennials prefer auto, personal loans to credit cards. Today’s […]

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United States

Prosper Performance Update: July 2017 (Prosper), Rated: AAA

Today we are sharing performance data from the Prosper portfolio for July 2017.

Our risk team implemented a credit tightening in July aimed at removing certain populations of borrowers from originations on a go-forward basis. As a result of this credit tightening, the overall distribution of the book shifted slightly towards lower risk loans. This slight shift resulted in an overall portfolio coupon decrease of 45bps and an overall return estimate decrease of 26bps.

Additional highlights from the July Update include:

  • Charge-off levels in 2016H2 vintages continue to show meaningful improvement compared to 2016H1 vintages.
  • Periodic delinquencies moved higher for 2016 and 2017 vintages.
Source: Prosper

The Top Executives Of Former Fintech Unicorn Mozido Have Quietly Left The Company (Forbes), Rated: AAA

The top two executives of Mozido, a financial technology company that raised some $300 million to develop a mobile payments business, have quietly left the company.

On its web site, Mozido currently lists Todd Bradley as its CEO, but Bradley said in a brief interview that he left the company in June. Bradley’s departure appears to have left Mozido without a chief executive officer. Bradley has also left Mozido’s board but the company’s web site still lists Bradley as a director.

Scott Ellyson, Mozido’s chief financial officer who is listed on Mozido’s web site as its second-most senior executive, has also left the company, according to Bradley. Ellyson’s LinkedIn page currently does not mention his time at Mozido. He did not respond to a request for comment.

Three weeks ago, Michael Liberty, the founder of Mozido, was sentenced to four months in prison and a $100,000 fine by a federal judge. Liberty pleaded guilty in November 2016 to making illegal campaign contributions.

Digitalization Among Factors Pushing Millennial Credit Preferences Toward Auto and Personal Loans (NASDAQ), Rated: AAA

As the first generation to be fully immersed in mass-market digitalization, Millennials are slowing their credit card usage while increasingly using other credit products such as personal loans. A just-released TransUnion (NYSE:TRUstudy found that Millennials are carrying on average two fewer bankcards and private label cards than Generation X (“Gen X”) consumers at the same respective ages. Conversely, Millennials’ appetite for new auto and personal loans has grown at a faster rate than Gen X borrowers at the same age points.

Credit Cards Out of Fashion; Cars and Personal Loans in Style

The study found that, in addition to carrying fewer credit cards than Gen X consumers, Millennials also are maintaining lower balances on those cards. TransUnion analysts believe that this is partly driven by the CARD Act of 2009, which limited the marketing of credit cards on college campuses. The increased use of debit cards also plays a role in this shift. The study pointed to recent Federal Reserve data, which found that debit card transactions grew from 8 billion in 2000 to 60 billion in 2015. In contrast, credit card transactions only increased from 16 billion to 34 billion in that same timeframe.

Source: TransUnion

Millennials and Mortgages

Among all major credit products, the mortgage market has been the slowest to recover from the Great Recession, with home ownership rates still below levels observed in 2009. Overall, homeownership is down 0.8% since the Recession, but this number grows to -1.6% for 35-44 year olds and -2.1% for those under 35.

As a result of credit access being limited and, per the U.S. Census Bureau, affordability being affected by income gaps between the two generations, TransUnion’s study found the percentage of Millennials opening mortgages between the ages of 21-34 (5%) is nearly half of the Gen X group (10%) when they were that age. TransUnion observed a smaller but still material gap (13% for Millennials vs. 16% for Gen X) within the Super Prime risk tier, suggesting that this dynamic is not driven solely by credit supply.

TransUnion’s study found that access to mortgages has declined dramatically for 21-34 year olds. In 2000, 39% of mortgage originations in this age range were comprised of non-prime borrowers.  In 2016, non-prime borrower originations declined to 20%.

Further impacting mortgage originations to Millennials are lower income levels. Per the U.S. Census Bureau, median household income of consumers ages 25-34 declined from $60k in 2000 to $57k in 2015.  The impact can be seen in the housing status of these consumers: a larger portion of younger adults ages 25-29 are living with their parents, rising from 15% in 2000 to 25% in 2014.

Despite these challenges, a TransUnion survey of 1,340 consumers in July 2017 found that nearly 75% of Millennials ages 23-37 said they plan on purchasing a home in the future.

White House OKs DOL Fiduciary Rule Delay (Financial Advisor IQ), Rated: AAA

The Office of Management & Budget of the White House has approved the Department of Labor’s request to push back the final implementation date of its fiduciary rule — originally scheduled for January — to July 2019, the Wall Street Journal reports.

Banks Send Warning Signs for Economy (WSJ), Rated: A

Being a key transmission mechanism for savings, investment and spending, the banking sector is worth watching as a barometer for the health of the overall economy. Lately it has been acting as one would expect toward the end of an expansion phase.

Most glaringly, after strong lending growth for several years, momentum clearly is slowing. In its quarterly report on the sector, the Federal Deposit Insurance Corp. found that total loans and leases by banks and other insured institutions rose by just 3.7% from a year earlier at the end of June. That is the third consecutive quarterly deceleration and is down from a 6.7% pace of growth a year ago.

After a period of strong lending, it is also typical for defaults to start ticking up as levels of indebtedness rise and bills come due. This is indeed happening, at least among consumers. Credit-card charge-offs soared by 24.5% in the second quarter, according to the FDIC, marking the seventh straight increase. Charge-offs on loans to commercial and industrial borrowers, however, declined by 9.7%, possibly due to a recovering energy sector.

‘Madden fix’ bills are a recipe for predatory lending (American Banker), Rated: A

Currently pending in both houses of Congress are versions of the Protecting Consumers Access to Credit Act of 2017 — bills that would “fix” the 2015 appellate court decision in Madden v. Midland Funding LLC. Unfortunately, these so-called legislative solutions are based on a faulty reading of case law.

The Madden case held that National Bank Act preemption of state usury laws applies only to a national bank, and not to a debt collector assignee of the national bank. The decision has potentially broad implications for all secondary markets in consumer credit in which loan assignments by national banks occur: securitizations, sales of defaulted debt and rent-a-BIN lending.

Unfortunately, the “Madden fix” bills are overly broad and unnecessary and will facilitate predatory lending.

The actual “valid-when-made” doctrine provides that the maker of a note cannot invoke a usury defense based on an unconnected usurious transaction. The basic situation in all of the 19th-century cases establishing the doctrine involves X making a nonusurious note to Y, who then sells the note to Z for a discount. The discounted sale of the note can be seen as a separate and potentially usurious loan from Y to Z, rather than a sale. The valid-when-made doctrine provides that X cannot shelter in Y’s usury defense based on the discounting of the note. Even if the discounting is usurious, it does not affect the validity of X’s obligation on the note. In other words, the validity of the note is a free-standing obligation, not colored by extraneous transactions.

Recovering Non-Performing Loans: Better Options (Lend Academy), Rated: A

A small business lender knows that a certain percentage of loans will become NPLs and typically has parameters the business must stay within to remain profitable. The lender may pursue NPLs on an in-house basis indefinitely past the charge-off date or turn them over to a collections agency at some point. Both options create problems in the fintech business model.

The best recovery option for online small business lenders is to manage NPLs in-house until they become charge-offs, then use the services of a reputable commercial debt buyer. This is how it works.

  • The lender works with the commercial debt buyer on a one-time basis, periodically, or in a forward-flow relationship where NPL information is sent regularly to the buyer.
  • A non-disclosure agreement (NDA) is signed and the lender provides information to the buyer on the pool of non-performing assets. This includes the number of accounts and amount of outstanding balances.
  • Buyer assigns a value to the NPLs and offers a price.
  • Lender signs the purchase agreement. Typically, buyers in forward-flow relationships will send payment within 24 hours.
  • Reputable buyers then work to collect the debts over time, without using the lender’s name and in a sensitive manner, and without reselling the debt.

TEN-X PARTNERS WITH MONEY360 TO OFFER FINANCING SERVICES FOR COMMERCIAL REAL ESTATE TRANSACTION MARKETPLACE (Money360), Rated: A

Ten-X Commercial, the nation’s leading online real estate transaction marketplace, today announced that it has partnered with Money360, a technology-enabled direct lender focused on commercial real estate (CRE), to offer financing for properties available for sale. The partnership will expand the investor pool for commercial properties listed on Ten-X by giving prospective buyers assurance they will be able to procure the necessary financing to fill the deal’s capital stack, while providing sellers and their brokers increased confidence that once terms are agreed upon, buyers will be able source a loan and close the deal.

Under the agreement, Money360 will work with Ten-X to determine which commercial properties listed on the Ten-X platform are appropriate for pre-arranged financing, and will then pre-underwrite bridge and/or permanent loans for qualifying properties. The lender’s offers will be listed on the Ten-X property detail page, informing prospective buyers about the available financing terms. After the property trades, Money360 will work with buyers to underwrite, process and close the loans to facilitate the transaction.

Non-Prime Boomers Struggle Financially, but Less So Than Other Generations (BusinessWire), Rated: A

Despite the widespread perception that Baby Boomers (ages 51-64) are struggling to make ends meet more than any other generation, new research from Elevate’s Center for the New Middle Class has found that Baby Boomers are actually struggling the least. In fact, Baby Boomers are the most likely to have steady employment and run out of money less often, compared to data from previous studies.

“These findings come as a surprise, as they are counter-intuitive to many of the trends we have seen widely covered around Baby Boomers,” said Jonathan Walker, executive director of Elevate’s Center for the New Middle Class. “Recently, it was reported by the Federal Reserve that Baby Boomers are leaving the workforce in such large droves that they are skewing employment numbers, but we’ve found that 60 percent of non-prime Boomers have had no employment change in the last 12 months, compared with 59 percent of Gen-X and 43 percent of Millennials.”

But even though they struggle less than other non-prime generations, they are still facing challenges in the new economy, especially when compared to their prime counterparts. Non-prime Boomers are more likely to hold more than one job and are 10 times more likely to run out of money every month.

Additional key findings include that – compared to their prime cohorts – non-prime Boomers are:

  • 2.2x as likely to say that their finances cause them significant stress
  • 4x as likely to live paycheck to paycheck and 1 in 6 use payday loans
  • 14x as likely to express difficulty predicting monthly income and are 2.5x more likely to overdraft on bank account
  • 3x as likely to take a loan against their 401k
  • 46 percent less likely to go on vacation
  • More likely to be living in households with 3 or more working adults

How Gen Z Will Affect The Future Of The Peer To Peer Economy (Forbes), Rated: A

Born in the mid-1990s to late 2000s, Gen Z accounts for one-quarter of the U.S. population. They are considered the most diverse and most multicultural generation the U.S. has ever seen. The highly influential Gen Zers are the first digital native generation. They are already impacting the current peer-to-peer (P2P) economy and will have an enormous effect on how this economy evolves.

Gallup study found that about 8 in 10 students in grades 5 through 12 reported that they wanted to be their own boss rather than work for someone else.

Additionally, a millennial branding studyreported that 72% of high school students and 64% of college students want to start their own business.

PUBLIC COMPANIES MAKING ICO-RELATED CLAIMS (Investor.gov) Rated: A

The SEC may suspend trading in a stock when the SEC is of the opinion that a suspension is required to protect investors and the public interest.  Circumstances that might lead to a trading suspension include:

  • A lack of current, accurate, or adequate information about the company – for example, when a company has not filed any periodic reports for an extended period;
  • Questions about the accuracy of publicly available information, including in company press releases and reports, about the company’s current operational status and financial condition; or
  • Questions about trading in the stock, including trading by insiders, potential market manipulation, and the ability to clear and settle transactions in the stock.

The SEC recently issued several trading suspensions on the common stock of certain issuers who made claims regarding their investments in ICOs or touted coin/token related news.  The companies affected by trading suspensions include First Bitcoin Capital Corp.CIAO GroupStrategic Global, and Sunshine Capital.

RealtyShares Reports: $ 10.3 Million Raised for Industrial Real Estate Deals in San Francisco and Boston MSA (Crowdfund Insider), Rated: A

Online real estate marketplace RealtyShares announced on Tuesday the closing of two industrial real estate financing transactions in San Francisco and Boston MSA. The amount raised between the deals was $10.3 million.

RealtyShares stated it secured  $8.7 million industrial debt loan for a San Francisco located mixed-use, industrial warehouse and office space in the city’s South of Market (SoMa) neighborhood.

Westlake Financial Services Embraces Clarity Services’ Clear Fraud to Enhance Its Auto Lending Nationwide (BusinessWire), Rated: A

Following impressive results using Clear FraudTM to mitigate losses in targeted auto lending transactions, Westlake Financial Services has expanded its relationship with Clarity Services to strengthen its auto portfolio nationwide.

Westlake, which has a network of more than 50,000 new and used auto and motorcycle dealers throughout the United States, began testing Clear FraudTM a year ago in select markets. The California-based finance company has enhanced its profitability by using Clear FraudTM to provide loan terms that are more attractive to both consumers and dealers.

By incorporating Clarity’s credit data, Westlake is able to more accurately price and structure deals with profitable loan terms, and determine down payment requirements. Westlake’s use of Clear FraudTM helps the lender evaluate subprime applicants with credit scores below 600. Clear FraudTM also makes it easy to integrate scores into Westlake’s existing scorecard.

AirFox Closes $ 6.5 Million AirToken Pre-Sale Weeks Ahead of Schedule (News BTC), Rated: A

AirFox, the company making mobile data and the internet more affordable for millions of people, today announced it closed its $6.5 million ICO pre-sale weeks earlier than scheduled. The ICO will open at 10 a.m. ET on September 19, 2017. AirFox will use the ICO funds raised to further develop and launch its new blockchain consumer platform, AirToken (AIR), in order to tokenize mobile access by unlocking mobile capital from the smartphone for the underserved and underbanked prepaid mobile subscribers in emerging markets.

FinTechs Give Banks A Wake-Up Call With Loan Disbursements (PYMNTS), Rated: A

Not too long ago, when small- to mid-sized business (SMB) Orion First, a business credit ratings firm, needed a loan, its only option was to visit a local bank, fill out myriad application forms and wait several weeks or months to (maybe) get approved. Fast forward to today, and the small business lending process has undergone a significant overhaul.

With a growing number of FinTech players competing in the lending space, small businesses now have improved access to a range of loan options — and, in most cases, funds are disbursed in as little as 24 hours.

New services that can expedite the lending process for companies like Orion First are already gaining popularity with SMBs and consumers who need short-term loans. The Innovative Lending Platform Association (ILPA), a trade organization representing several companies in the space — including prominent players like small business loan provider Kabbage and financial consultant and insights provider PayNet — says its member companies have distributed more than $14 billion in capital loan disbursements to small businesses to date.

The millennial population is estimated at roughly 83 million, and a recent survey found almost half of millennials (49 percent) plan to start their own businesses within the next three years.

recent survey by YouGov found 81 percent of both retail consumers and SMBs who turned to digital lenders said the ease and speed of completing a loan application were the reasons they made the switch. In the same survey, 77 percent of respondents cited the rapid pace of loan decision making as the key appeal for these platforms.

3Q 2017 PitchBook Fintech Analyst Note: Marketplace Lending (PitchBook), Rated: B

Key takeaways & highlights:

  • Online lenders have faced increased competition from other more established fintech companies. Furthermore, banks such as Goldman Sachs have started their own lending arms
  • Publicly traded firms have made great strides in improving financials; the analyst consensus has Lending Club moving into positive GAAP earnings by year end in part driven by securitizations as a lower-cost source of capital
  • SoFi has made strides towards becoming more bank-like after adding mortgage loans, wealth management services and acquiring (and subsequently shuttering) online bank and money transfer service Zenbanx

Online Lenders Gain Traction By Partnering With Incumbents (ValueWalk), Rated: B

As the latest PitchBook fintech analyst note points out, some of the most notable companies are becoming more like banks, with SoFi the most prominent example, as it expands from student loan refinancing into unsecured consumer credit, wealth management and more. Yet as some online lenders establish a foothold, there are still significant hurdles to overcome.

United Kingdom

Funding Circle is kicking off a £12 million marketing bonanza with a Great British Bake Off TV ad (Business Insider), Rated: AAA

Online lender Funding Circle is kicking off a £12 million ($15 million) marketing campaign with a prime-time TV advert during the Great British Bake Off.

A 30-second TV spot of a woman drumming will run during the premiere of the smash hit baking show on Channel 4 on Tuesday evening.

Singapore Fintech Hub LATTICE80 Announces UK Expansion (Crowdfund Insider), Rated: AAA

LATTICE80, a fintech hub owned and operated by Singapore-based private investment firm Marvelstone Group, announced on Monday it is set to open a fintech hub in London as part of its global expansion. The organization revealed that as of August 2017, its UK entity has been registered, but a suitable hub space remains to be found. It is currently in talks with relevant parties in the private and public sectors, with plans to secure and open a hub by 2018.

The evolution of the UK receivables market (AltFi), Rated: A

In particular, the UK market has lots of new entrants (now in excess of 100 providers) but the number of clients seems to be static at about 40,000-45,000. In order to remain competitive, lenders are required to compete on price and terms, which increases their risk and often reduces their return.

Customers also have more choice in the market, in that they have access to working capital both from banks and alternative lenders such as peer-to-peer (P2P) platforms. Consumers are becoming increasingly aware of the non-traditional players in the market that are harnessing technology. The new generation of borrowers is more tech-savvy and more comfortable embracing P2P capabilities, which makes new players more attractive.

The funding pitfalls a small business owner needs to know (RealBusiness), Rated: A

Richard Spielbichler, ABL director North West, Independent Growth Finance

“The main pitfall to consider is whether the business has a USP that will protect their position in the market. Many businesses suffer from ‘me too’ syndrome, where their USP is very similar to an existing organisation.”

Angelika Burawska, COO, Startup Funding Club

“It depends on the type of financing. In the case of loans and various types of trade finance, the main pitfalls lie in payment terms, such as how much and when, late payment fees and what happens if a company fails to pay.

“In the case of equity funding, businesses have to pay attention to the valuation they raise which may be too high or too low; and the control rights they give to investors.”

China

There Is a Major Tech IPO Boom Happening, Just Not in the United States (TheStreet), Rated: AAA

In the first half, a total of 59 Chinese technology, media and telecommunication (TMT) companies sold shares through initial public offerings (IPOs), a surge from 10 a year ago.

In value, the firms raised a combined 25.8 billion yuan (US$3.9 billion) in the first six months, five times the amount a year earlier, said the accounting firm in Shanghai.

The trend is a continuation of a boom that began in the second half of 2016, when there were 58 IPOs of such companies raising a total of 33 billion yuan.

Embracing Auto Finance Wave, Zhushang Financial Raised Tens Million RMB in Series A (Xing Ping She), Rated: A

On 25th August, Zhushang Financial, a P2P lending platform specialize in providing auto financing services, announced the closing of Tens million RMB in series A funding. Toulang Capital led the round, with participation from Cailang Capital. The “Zhushang Financial” brand has been upgraded from the “Zhushang Dai” brand and announced with this round of financing.

Zhushang Financial is based in Chengdu, a developed city in west China, providing P2P auto financing services for small companies and individuals. Currently, it has established branches in many western cities, including Chongqing, Guizhou Province, Kunming, Xi ‘an, Taiyuan and Lanzhou. Also, the company has signed agreements on depository with both Zhejiang Mintai Bank and Hunan Rural Commercial bank (Youxian Branch). Up to now, the total volume of the platform has reached over 500 million RMB.

According to the report of Central Bank, China’s auto financing market reached 700 billion RMB in 2016 and may exceed 1.85 trillion RMB in 2018. Its rapid growth comes not just from the wave of “car service”, but also from the policy support. Actually, according to the policy issued last year, the net loan assets must be small and dispersed, and since then auto finance has become a new hotspot of P2P lending industry.

sources said the SFC on the ICO advice Jianzhao pyramid schemes (Yicai), Rated: A

August 29, the first financial reporter from a block chain technology business executives were informed that the China Securities Regulatory Commission recently to some of the block chain enterprises on the ICO (Initial Coin Offering, virtual currency initial public offering) for advice, the current In the stage of collecting comments and discussions, the SFC expressed particular concern about ICO projects for pyramid schemes in the name of virtual currency.

Net mass transfer will go to the US IPO official response (01Caijing), Rated: B

According to Bloomberg News, Fintech Quantifiers currently selected JP Morgan and Morgan Stanley as US financial adviser to the US IPO, the IPO size of about 200 million US dollars.

European Union

Profits Up More Than 130 percent In Klarna’s Half-Year Report (PYMNTS), Rated: AAA

Klarna, the online payments firm based in Sweden, and one of the unicorns that came of age with a more than $1-billion valuation, posted results Friday detailing growth for the first half of the year.

The company said that net profit came in at 228 million crowns, or about $28.4 million, up 138 percent year over year, on sales of 2.05 billion crowns.  Sales were up 21 percent.

Klarna Celebrates Year-Over-Year Sales, Profit Gains (Finovate), Rated: A

On Friday the company reported sales and profit results for the first half of 2017 that represented gains of 21% and 138%, respectively. The strong financials come amid a series of headlines that show the Swedish payments company making strides on a number of fronts. This includes rumors that Klarna is partnering with Stripe to better access the U.S. market. Such a partnership would make Klarna the only non-credit card option available on the platform, and enable customers to take advantage of Klarna’s signature “pay after delivery” service. A deal between Klarna and Stripe also would provide what an anonymous source quoted in Nordic Business Insider referred to as “potentially an important piece of the puzzle” of Klarna’s plan for expansion in the U.S.

Swedish Tech Bank Klarna Launches ‘Smoooth’ Brand (PR Newswire), Rated: AAA

Last year, Klarna launched the “Smoooth” campaign with a series of award winning and critically praised advertisements showing just how smooth payments should be. Now Klarna takes the next step by fully implementing the concept of “Smoooth” across all aspects of the brand. This includes not only a new logo, graphic identity and checkout touch-points but towards a completely new user experience – transforming rational payment transactions into an emotional shopping experience for consumers.

Ice-cream melting on warm car hoods, shampooed long-haired dogs and pencils being pushed into huge jelly pastries. Klarna`s new identity is definitely not your average bank speaking.

“We are on a journey to transform Klarna from a traditional payment provider to a stronger consumer brand. Our new identity is more modern and expresses our focus on the consumer experience, innovation and simplicity in payments. It’s time for a new kind of bank.” Sebastian Siemiatkowski, CEO of Klarna

This is not only an update of the visual identity of Klarna but also changing the way consumers interact with the company. The concept of “Smoooth” will be evident when watching an ad or pushing a button to pay in the Klarna app. Every Klarna touchpoint has a new unique graphic and will be smarter and more intuitive. That will ensure a better user experience for consumers, but will also support in driving growth, conversion and consumer loyalty for all  Klarna merchants.

There are three intuitive ways to shop with Klarna:

  • Pay now. – Pay directly at checkout. No credit card numbers or passwords to remember.
  • Pay later. – Try first, pay later. Klarna lets you have 14 days or more to decide if you want to keep your goods or not.
  • Slice it. – Get all your payments on one invoice and choose how much to pay each month.

As of today, Klarna has released all touchpoints that can be updated automatically, and over the coming months will continuously roll out “Smoooth” updates to the touchpoints of all merchants.

PitchIt @ LendIt Europe 2017 (LendIt), Rated: B

Submit your application to PitchIt, a competition for fintech startups, taking place at LendIt Europe–one of the largest international lending and fintech conferences in Europe. This exclusive programme will nurture emerging talent throughout the competition, provide selected finalists with unparalleled access to industry expertise as well as invaluable exposure, branding and more at the event.

Deadline for applications is 4 September 2017.

International

NEW REPORT: Faster Disbursement Services From Alt-Lending Players Put Banks On Notice (PYMNTS), Rated: A

The August edition of the PYMNTS.com Disbursements Tracker™, powered by Ingo Money, highlights several notable developments that explain the waning influence of the paper check, and how new disbursement tools could impact the workplace, pension systems and mobile payment options.

The August edition of the PYMNTS.com Disbursements Tracker™, powered by Ingo Money, highlights several notable developments that explain the waning influence of the paper check, and how new disbursement tools could impact the workplace, pension systems and mobile payment options.

Hike recently added a digital payments wallet to its app, allowing money transfers between customers using the country’s United Payments Interface (UPI) service. Skype is another messaging service helping users quickly send money to one another using popular payment option PayPal. The partnership between Skype and PayPal enables users to send money to fellow Skype users in 22 countries, including the U.S., Canada and more than a dozen nations in Europe, through PayPal in the Skype mobile app.

Australia

Australian SMEs are turning to alternative sources of funding (Finder.com.au), Rated: AAA

Australian businesses are turning to crowdfunding, peer-to-peer (P2P) lending and online loans for finance, according to new research from Businessloans.com.au. The Small Business Credit Surveyconducted by ACA Research, found that the most sought-after alternative funding source was equity finance (34%), followed closely by online lenders (30%) and P2P business loans(21%).

However, while small- to medium-sized enterprises (SMEs) are embracing alternative sources of capital, not all of them are receiving the loans they hope for. The survey revealed that while 84.1% of businesses were successful in their applications, less than half of those (38.9%) of those were approved for all of the credit they applied for.

It is interesting to note that the number of businesses which were declined a loan is only 1.6% of respondents. The remaining 14.3% of the “unsuccessful applicant” group was approved for less than half of the loan they had asked for. Over one-third of this group (35%) had applied for more than or equal to $250,000.

The survey found that a rejected application seriously affects a business. Respondents that did not receive the full amount applied for delayed or could not expand their businesses (34%), delayed or were not able to fulfil existing orders or contracts (27%) or did not hire new employees (17%).

 

P2P lender reaches 2,000 brokers (Broker News), Rated: AAA

Peer-to-peer lender RateSetter has accredited 2,000 brokers on its lending platform, amidst a rise in P2P popularity within the general public.

Lending volumes through the broker channel, especially in auto and home improvement loans, are doubling every six months, according to the lender’s most recent settlement figures.

Across the direct and broker channels, RateSetter has also passed $150m in lending facilitated since 2014. In the last five months alone, lending grew 50% across both channels, passing the $100m milestone in March.

Source:: BrokerNews.com
India

‘Future-ready’ Industrial Policy to be out in October (The Hindu), Rated: A

The other “illustrative outcomes” are developing alternatives to banks and improving access to capital for MSMEs through ‘Peer to Peer Lending’ and ‘Crowd funding’, providing a credit rating mechanism for MSMEs to provide them easier access to funds, addressing the problem of inverted-duty structure and also balancing it against obligations under multilateral or bilateral trade agreements, studying the impact of automation on jobs and employment, ensuring minimal/zero waste from industrial activities and targeting certain sectors to radically cut emissions.

Asia

Dianrong and FinEX Asia Launch Asia’s First Fintech Asset Management Platform (PR Newswire), Rated: AAA

Dianrong and FinEX Asia today announced the launch of Asia’s first financial technology (fintech) asset management platform. FinEX Asia was established in 2017 to connect Asian investors with US consumer lending assets, such as credit card loans.

FinEX Asia combines its risk management expertise with Dianrong’s advanced fintech capabilities to give Asian investors access to a diverse and attractive portfolio of U.S. consumer lending assets. FinEX Asia’s fintech solutions offer advanced risk modeling capabilities, blockchain data security, performance monitoring, and secondary marketplace liquidity.

Seminar: Regulating Peer-to-Peer Lending to SMEs (Asian Development Bank), Rated: B

Event | 12 September 2017ADBI, Tokyo, Japan

This seminar looks at the regulation of P2P lending in the US, People’s Republic of China, Japan, and the UK, and discusses how regulators can help develop P2P as a safe and effective source of financing for SMEs.

Register here.

South America

Top VC funds in Fintech in Argentina (TechFoliance), Rated: A

Currently, Argentina has four major investment funds that have Fintech companies within their portfolios.

  1. NXTP
  2. Kaszek – Founded in 2011, it recently announced the release of a third fund of $200 million to be used for young technology throughout the region. To date, Kaszek has invested USD 1.4 billion in 43 companies, including Nubank, Brazil’s largest digital bank.
  3. Wayra
  4. Incutex
Canada

RBC WANTS TO USE AI TO GIVE CUSTOMERS FINANCIAL ADVICE (Betakit), Rated: AAA

Canada’s largest bank has announced that its mobile banking app will soon provide users with “actual insights about our client’s financials and a fully automated savings solution that uses predictive technology to identify money in a client’s cash flow that can be automatically saved.”

Dubbed ‘NOMI Insights’ and ‘NOMI Find and Save,’ the services are currently in a pilot release. A full launch is expected later this fall.

IOU Financial Inc. Releases Financial Results for the Three and Six Month Period Ended June 30, 2017 (Newswire), Rated: A

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV: IOU), a leading online lender to small businesses, announced today its results for the three and six month period ended June 30, 2017.

FINANCIAL HIGHLIGHTS

  • Loan originations for the second quarter ended June 30, 2017 were US$26.2 million versus originations of US$31.8 million for the same period last year. Loan originations decreased by 17.8% due to changes made to the Company’s lending policies in response to increased delinquency levels. We anticipate that these changes will have a positive impact on our loan portfolio over the course of 2017. For the first half of 2017, loan originations amounted to $48.2 million, representing a decrease of 15.7% over the origination of $57.1 million for the same period last year.
  • As of June 30, 2017, IOU’s total loans under management amounted to approximately $65.7 million as compared to $79.6 million in 2016. On June 30, 2017, the principal balance of the loan portfolio amounted to $41.6 million compared to $35.5 million in 2016. The increase is consistent with the Company’s strategy to retain more loans on its balance sheet. The principal balance of IOU’s servicing portfolio (loans being serviced on behalf of third-parties) amounted to approximately $24.1 millioncompared to $44.1 million in 2016.
  • IOU recorded gross revenue during the second quarter of $4.4 millionversus $3.5 million for the same period last year, representing a 24.5% increase. The increase in gross revenues was primarily driven by a 55.3% increase in interest income from $2.4 million in 2016 to $3.7 million in 2017, as a result of an increase in the size of the loan portfolio. For the six-month period ended June 30, 2017, gross revenues improved to $8.7 million compared to $6.8 million for the same period in 2016.
  • Interest expense during the three-month period ended June 30, 2017increased by 44.3% to $1.0 million, up from $0.7 million over the previous year. The increase is attributable to an increase in borrowings under the credit facility partially offset by a reduction in the cost of funds borrowed versus the previous year. For the six-month period ended June 30, 2017, interest expense amounted to $1.9 million compared to $1.3 million in 2016.
  • Provision for loan losses (net of recoveries) increased to $2.4 million for the three-month period ended June 30, 2017, up from $1.2 million for the previous year. The increase is primarily attributable to an increase in defaults by borrowers and partially due to an increase in the size of the loan portfolio. To improve loss performance, IOU Financial has made changes to its lending policies and deployed its next generation proprietary IOU Risk Logic Score. In addition, the Company has implemented certain process changes to improve its servicing and collections which includes an aggressive litigation process against businesses who intentionally default on their loan obligations. For the six-month period ended June 30, 2017, IOU recorded a provision for loan losses of $4.3 million compared to $2.0 million in 2016.
  • Excluding non-recurring costs, operating expenses decreased 18.1% to $2.5 million for the three-month period ended June 30, 2017 as compared to $3.1 million for the previous year. During the quarter ended September 30, 2016, the Company adopted a plan to reduce operating expenses. The Company is on track to achieve its target of quarterly operating costs of $2.0 million to $2.2 million on a normalized basis in the third quarter. In the second quarter, IOU recorded non-recurring costs of $0.5 million related to vendor contract cancellations and impairment of intangible assets. For the six-month period ended June 30, 2017, operating expenses amounted to $4.9 million, excluding non-recurring costs, compared to $6.0 million in 2016.
  • IOU closed its second quarter 2017 with a net loss of $2.1 million, or $0.03per share, compared to a net loss of $1.5 million or $0.02 per share during the same period of 2016. For the six-month period ended June 30, 2017, the net loss amounted to $3.1 million versus $2.8 million in 2016.
  • IOU closed its second quarter 2017 with an adjusted net loss of $1.3 million, which excludes certain non-cash and non-recurring items, compared to an adjusted net loss of $1.1 million in the second quarter of 2016. For the first half of 2017, the adjusted net loss was $1.9 millioncompared to an adjusted net loss of $1.6 million for the same period in 2016. Assuming the cost reduction plan was fully implemented on January 1, 2017, IOU’s pro forma adjusted net loss for the three-month and six-month period ended June 30, 2017 would have been approximately $0.8 million and $1.2 million, respectively.
Africa

Should established banks fight or assimilate to tech? (African Business Magazine), Rated: AAA

The same quandary that now faces established banks stood before landline telecoms operators 15–20 years ago. In terms of fintech, it seems likely that the answer will become clear over the next few years, as different banks adopt different strategies.

Global consultancy Accenture calculates that fintech threatens more than a third of traditional banks’ revenue. Due to the march of technological innovation and the emergence of more attractive investment regimes, the challenge posed by fintech is only likely to grow.

Fintech is not just a threat to established banks but also to other companies in the financial services sector. Visa, for instance, is built on technology developed during a previous financial technology revolution, and should be able to capitalise on the fintech boom.

Other attempts to integrate the two worlds include PayDunya, an online payments system that allows African e-businesses to accept payments from credit and debit cards, as well as mobile money wallets. Similarly, Yoco provides retailers with an integrated card acceptance and point-of-sale solution, incorporating a mobile app, and either wireless or plug-in card reader.

Some established banks have sought to compete by becoming incubators for fintech. Standard Bank and Barclayshave both launched startup support programmes, with the most successful companies taken under their wing at the end of their periods of support.

Authors:

George Popescu
Allen Taylor

Checking the Credit of the Subprime Consumer

Checking the Credit of the Subprime Consumer

In the US, there are tens of millions who do not have a reliable FICO score, either because their credit history is not sufficient or it is non-existent. This becomes a vicious cycle and an important reason why subprime borrowers struggle to obtain credit. Traditional lenders are dependent on FICO, and handicapped as they lack […]

Checking the Credit of the Subprime Consumer

In the US, there are tens of millions who do not have a reliable FICO score, either because their credit history is not sufficient or it is non-existent. This becomes a vicious cycle and an important reason why subprime borrowers struggle to obtain credit. Traditional lenders are dependent on FICO, and handicapped as they lack qualitative information about subprime borrowers who might otherwise be creditworthy. Clarity Credit Bureau was born with the clear goal to collect subprime data and cater to this population, which is not being served properly by the big three credit bureaus.

Over the years, the company has been able to carve its own niche in the subprime market. Now, lenders and financial institutions are using Clarity for subprime borrowers across the entire credit spectrum, and they are using the bureau in conjunction with other credit bureaus in order evaluate credit applications at a more granular level. This layering of Clarity above traditional data has created value for Clarity clients as they are able to offer credit to a wider client base with the assurance that they are creditworthy.

Extensive Database

Around 200-220 million consumers within the age group of 19 to 65 form the largest part of the credit consumer population in America. About one-third of this nearly 70 million person group are subprime borrowers. Sixty million are covered by Clarity, which is nearly 80% of the entire subprime market. This extensive and elaborate data is what makes the company stand out and be the sought after credit rating agency for subprime borrowers. on average, the entertains anywhere between 400,000 to 800,000 report requests every day.

Clarity does not use FICO data. The company has developed over 30 different report products. They also use the same information as traditional bureaus such as credit history, identity verification, etc. The only difference is that Clarity focuses on data collection for a different population set.

Traditional Bureaus as Laggards

Traditional Bureaus lag behind Clarity Credit Bureau due to the paucity of an adequate mechanism to have access to the subprime borrower data. Typically, financial institutions do not provide financial services to subprime customers without FICO data, and they report to credit bureaus.

But, if a lender client of Clarity requests a report on a customer and extends credit to that customer, the financial service provider submits the performance of the credit line to Clarity. It is structured as a “Give and Get” model, similar to other credit bureaus.

Competitive Edge in the Market

According to the Clarity’s founder, Clarity Credit Bureau is the largest bureau in the subprime credit reporting space. Moreover, it has succeeded in carving its niche as the most innovative player in this segment, and its revenues grew by over 70% from 2014 to 2015.

A Solution for Loan Stacking

Loan stacking is a serious threat in the P2P lending space. Borrowers have managed to take advantage of lenders due to the shortcomings of the alternative lending industry. To fend off loan stacking, lenders have been using a consortium approach for 10 years. This involves a group of lenders getting together and sharing every approved application among the consortium. It’s a temporary fix as information sharing is restricted to the consortium, and if the consumer gets a loan from a non-consortium player like a tribal lender or payday lender, the original lender would not be any wiser.

Keeping this in mind, Clarity has developed a real-time solution: Temporary Account Record, a patent-pending solution that will close the reporting gap from hours to minutes, which helps reduce the risk of underwriting unsecured loans. Everyone who is part of the Clarity family and using this technology will be notified when a lender approves a loan.

Real-Time Technology

In today’s world, where technology changes hands in mere weeks, methods used by the three big rating bureaus are quite off the pace. These bureaus use archiving technology for updating their database. Archiving technology will add new data to an existing database randomly from time to time. The resulting report generated might not be up to date or accurate. Clarity, however, uses real-time technology for reporting where the updated information is gathered and stored in the original format along with the date and timestamp.

Clarity Credit Bureau makes use of MySQL, an open source relational database, and the Bongo database system to capture and leverage big data. It uses an on-premise database architecture, instead of operating on the cloud, with multiple data centers complying with industry standard security and encryption certification. Though this is a costly solution, it is necessary as they deal with extremely sensitive public data.

Company History

Clarity Credit Bureau was founded in 2008 and is headquartered in Clearwater, Florida with the aim to provide unprecedented credit risk solutions to lenders and service providers that deal with nonprime consumers. The company also collects and analyzes multiple data points on the behavior of nonprime consumers, and endeavors to provide customized data-driven solutions to clients to meet their specific needs and circumstances.

Clarity Credit Bureau has over 100 employees and around 600 clients.

Founder and Manpower

Tim Ranney, the President and CEO at Clarity Services, has expertise in the IT sector and large database systems. Prior to the inception of Clarity Credit Bureau, he spent nearly 20 years in Internet security and risk management, serving as chief operating officer of an industry leader and senior executive for both Network Solutions and VeriSign.

Author:

Written by Heena Dhir.