Thursday March 8 2018, Daily News Digest

Purchase APR

News Comments Today’s main news: CommonBond receives AAA securitization rating. Ranger Direct returns suffer. Victory Park Capital posts record returns from balance sheet investments. Today’s main analysis: LendingTree mortgage offers report for February 2018. Today’s thought-provoking articles: Can big tech stop the compensation bubble? What’s driving venture capitalist’s attention to B2B fintech? The evolution of modern fintech. United States […]

Purchase APR

News Comments

United States

United Kingdom

China

European Union

International

India

News Summary

United States

Online Lender CommonBond Receives First AAA Rated Securitization (Crowdfund Insider), Rated: AAA

CommonBond, an online lending platform servicing the student loan market, has received its first triple A rating for securitization. Moody’s has assigned provisional ratings of (P)Aaa (sf) to Class A-1 and A-2 notes to be issued by CommonBond Student Loan Trust 2018-A-GS (CBSLT 2018-A-GS). DBRS rated the loans AAA as well. The transaction was CommonBond’s sixth securitization at $233.75 million bringing the total to $1.22 billion.

LendingTree Mortgage Offers Report – February 2018 (LendingTree), Rated: AAA

  • February’s best offers for borrowers with the best profiles had an average APR of 4.22% for conforming 30-year fixed purchase loans, up from 3.93% in December. Refinance loan offers were up 38 bps to 4.13%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 25 bps to 4.80%. The loan note rate hit the highest since March 2016 at 4.70% and was also up 25 bps from January. We prefer to emphasize the APR as lenders often make changes to other fees in response to changing interest rates.
  • Consumers with the highest credit scores (760+) saw offered APRs of 4.68% in February, vs 4.95% for consumers with scores of 680-719.
Source: LendingTree

The $ 5.7 trillion question: Can big tech stop the comp bubble? (INTL FCStone), Rated: AAA

INTL FCStone Global Macro Strategist Vincent Deluard:  “The $5.7 trillion question: Can big tech stop the comp bubble, resist higher yields, and deliver the growth?”  

  • Compensation, especially stock-based comp, is exploding at large tech companies
  • The tech rally rests on a foundation of low interest rates, rising stock prices, and quick revenue growth
  • Many big tech companies are becoming too big to grow
  • Rising interest rates and, God forbids, lower stock valuations could cause the entire edifice to crumble
Source: INTL FCStone

Millennials are seeking non-traditional banking (Digital Journal), Rated: A

A wake-up message for banks: if you want to remain competitive you need to embrace digital multi-channels and appeal to tech-savvy millennials.

A generational change is happening, and businesses have to accept that ‘millennials’ are expecting most products and services to be offered digitally. Financial products, including banking, are not immune from this trend. Two separate reports highlight this tendency.

review by Intelligent Finance has found that the biggest factor that attracts millennials to select one bank over another is an easy-to-use smartphone app, with most wishing to use online banking via a smartphone. In contrast, Baby Boomers stated that face-to-face customer service was the key determinant (with rude service being highlighted as the main reason why this generation might take their money to another bank). In contrast, millennials are most likely to exit from a bank if they did not like the smartphone app or if the bank suffered from a cyber breach.

19 of the top ex-bankers in fintech (efinancialcareers), Rated: A

It’s becoming more common for bankers to quit the traditional financial services in favor of financial technology, either co-founding a startup or landing at an established fintech firm. Some crash and burn and come crawling back to banking with their tail between their legs, but many have found great success in the fintech space.

The following are 19 of the top former bankers working in fintech today (in no particular order).

John Mack, a member of Lending Club’s board of directors

Mack stepped down as chairman/CEO of Morgan Stanley in 2011. Since then, he has invested in various fintech companies, including Lending Club (on whose board he sits), Orchard and Dataminr, which sends social media-based alerts to traders. He also participated in a $10m initial funding round for New England Funding Technologies (NEFT), which created the mPowerCredit credit-rating platform.

Dominic Gamble, founder of Findawealthmanager.com

After starting out as a sales-trader at Credit Agricole, Gamble worked at Credit Suisse for seven years before he moved to Deutsche Bank in 2010. However, a year later Gamble left to set up his website, Findawealthmanager.com, which helps high-net-worth investors to research and evaluate financial advisers.

Points awarded for new ISOs and more; Prizes include a Nintendo Switch (6th Avenue Capital), Rated: A

6th Avenue Capital, LLC (“6th Avenue Capital”), a leading provider of small business financing solutions, announced today the launch of its first “Merchant Madness” promotion. Throughout the month, and coinciding with the annual NCAA Men’s Basketball Tournament, 6th Avenue Capital will award points for all new ISOs, Merchant Cash Advance (MCA) submissions, approvals and funded deals.

  • The breakdown of points* awarded per category is as follows:
  • New ISOs/ISOs submitting first MCA application – 1 point
  • New MCA submissions – 1 point
  • Approved submissions – 2 points
  • Funded deals – 3 points
  • *California submissions excluded.

Points will be awarded from March 1, 2018 to March 30, 2018 and tallied at the end of the month. Prizes will be awarded to the top nine finishers as follows:

  • 5th through 8th place – Amazon Echo Dots (4)
  • 1st through 4th place – Parrot Mambo Drones (4)
  • 1st place – Nintendo Switc and Parrot Mambo Drone

Kabbage CEO Rob Frohwein On Their #FinTechForChange Call Against Assault-Style Rifles (Hypepotamus), Rated: A

How did you decide as a company to take a public stand on this issue?

As a technology leader and financial services company, we believe we have a unique responsibility and opportunity to help prevent future tragedies from occurring. Doing nothing is still a choice. We choose to do something to drive positive change and be an example to others.

How data analytics drives better real estate investing (Housing Wire) Rated: A

For Auction.com, the largest real estate marketplace, innovative technology enables us to provide a superior level of functionality and data analytics on a host of different types of real estate in the 3,000+ counties we serve — helping build stronger relationships with our buyers and sellers, and making us a trusted partner throughout the auction process.

Buyers and sellers demand greater data capabilities

In a world increasingly driven by big data, the real estate professionals who effectively utilize robust data analytics to make more informed decisions typically realize greater levels of success. Just as stock market investors conduct due diligence and use varied data sources prior to purchasing a company’s stock, real estate investors should do the same when buying property. Likewise, sellers come to the marketplace with one goal in mind – selling a property at market-price in the least amount of time. Data analytics serves as a catalyst to ensure that both of these needs are met.

World Economic Forum leads creation of fintech cyber security consortium (The Star), Rated: A

The World Economic Forum has led the creation of an industry consortium focused on improving the cybersecurity of financial technology companies, as collaboration between fintechs and financial institutions grows.

The consortium’s founding members include Citigroup Inc, online lender Kabbage, the Depository Trust & Clearing Corporation, Zurich Insurance Group and Hewlett Packard Enterprise, the companies said on Tuesday.

The mortgage market risk no one’s talking about (BROOKINGS), Rated: A

After the crisis, Congress and financial regulators increased regulation of the credit risk associated with mortgage lending, including the enforcement of stronger underwriting standards. But according to new research published in the Spring 2018 edition of the Brookings Papers on Economic Activity, a boom in nonbank mortgage lending means the mortgage market is still exposed to liquidity risk that very few people are talking about.

What is Blockchain Technology? A Beginner’s Guide (Invest in Blockchain)

The very primitive form of the blockchain was the hash tree, also known as a Merkle tree. This data structure was patented by Ralph Merkle in 1979, and functioned by verifying and handling data between computer systems. In a peer-to-peer network of computers, validating data was important to make sure nothing was altered or changed during transfer. It also helped to ensure that false data was not sent. In essence, it is used to maintain and prove the integrity of data being shared.

Source: Invest in Blockchain

Women in NYC Tech: Angela Galardi Ceresnie of Climb Credit (Alley Watch), Rated: A

Today we speak with Angela Galardi Ceresnie, COO of Climb Credit, the smart student-lending platform. After undergrad and roles at Citi and American Express, Angela took her financial acumen to the startup world in 2013 to cofound Orchard Platform, an investment platform for the peer-to-peer and online direct lender, with Matt Burton, Jonathan Kelfer and David Snitkof. During Angela’s time at Orchard, the company had raised over $40M in funding, backed by some notable investors including John Mack, Thrive Capital, and Spark Capital. In 2016, Angela transitioned to Climb Credit to work alongside the founding team to help it scale. Angela is an active member of the NYC tech ecosystem and continues to give back to the community through her involvement.

 

What are the advantages of being a woman in tech?

We have a unique perspective that we can bring to the table, what has historically been, a primarily male-dominated field, and that allows us to make useful observations and a significant impact as long as we stand behind our ideas. There is also no shortage of support from other women in the industry.

iintoo Returns Net 15.95 Percent on Exited Deals (PR Newswire), Rated: A

Real estate investment management company iintoo investments Ltd. (“iintoo”) announced a 15.95 percent average annual return on investment, net fees, and $3 million in regular distributions to investors since its founding in 2015. The returns are based on iintoo’s six exited investments to date, with a total asset value of $50 million, all of which exited ahead of schedule. With assets totaling $560 million and a global community of 32,000 members, New York-based iintoo opens up access to real estate investments that were once exclusive to professional funders and high net worth individuals.

Unlike a crowdfunding platform, iintoo works directly with project developers to vet and create business plans to maximize the chances for success.

RealtyShares Survey Shows Many Americans Believe Commercial Real Estate is Critical to Improving Local Communities (Business Wire), Rated: A

RealtyShares, a leading online marketplace for real estate investing, today announced the results from its Commercial Real Estate Investing Survey.

The survey found that a quarter of U.S. adults (25%) felt commercial real estate investment has the biggest impact on enhancing the reputation of a community. Roughly 1 in 5 of those who have or are currently investing in commercial real estate have done so for reasons that may support their community, like helping a friend or family member with capital for a commercial real estate investment (20%) or needing a facility for their own business (17%).

While some are already involved, the survey revealed fifty-three percent of Americans would invest in commercial real estate within their communities if given a chance. For those who have never invested in commercial real estate, affordability and access were the major roadblocks. Sixty-one percent believe they lack the necessary funds, while 19 percent don’t know how to invest. This may be creating an investing gap, as nearly 9 out of 10 Americans (89%) have never invested in commercial real estate, according to the report.

A Guide to Commercial Real Estate Crowdfunding (Commercial Property Executive), Rated A

Charles Clinton, co-founder & CEO of investing platform EQUITYMULTIPLE, delves into the mechanism behind commercial real estate crowdfunding and underlines the most important factors an investor must consider for long-term success.

What opportunities does real estate crowdfunding offer investors?

Clinton: By moving real estate syndication online, real estate crowdfunding has begun to change that old paradigm. Individual investors can now invest in private market real estate transactions at low minimums (our investment minimum at is typically $10,000 per offering) and start allocating a portion of their portfolio into real estate without taking on the burdens of direct ownership.

Investors have full transparency into what properties they’re investing in and the low minimums help facilitate diversification. The best platforms also pre-screen the real estate companies and investments that they present, easing the selection burden on investors.

What are the benefits of crowdfunding investment compared to traditional instruments?

Clinton: Strong yield—after years of near-zero interest rates, investors have been forced to look for yield in new places. Less volatility—these investments are illiquid and non-traded, as opposed to public stocks, traded REITs or cryptocurrencies (a topic on everyone’s mind). While illiquidity has its drawback, it also reduces market correlation, making direct real estate investing less subject to market swings and, in aggregate, exhibit less volatility.

Potential for outsized returns—because private real estate markets are inefficient, there is potential for market-beating returns by investing in markets and submarkets that are underserved by traditional sources of capital, and in properties with untapped potential. Downside protection is also an advantage. Real estate—as an irreplaceable resource with tangible value—is also less vulnerable to recessions. The economy will expand and contract cyclically, but a growing number of humans will always need places to live and work.

Then we have tax advantages. Real estate investing platforms allow individual investors to share in the same unique tax advantages as institutional real estate investors—namely write-offs for depreciation, and a new 20 percent deduction for investments made through an LLC, courtesy of the recently-signed tax bill.

QuantumReverse Expands Its Team (PR Newswire), Rated: B

QuantumReverse, the technology company that is building an advanced reverse mortgage LOS, announced the addition of four industry veterans to its team. QuantumReverse’s team now boasts over 50 years of combined experiences in the reverse mortgage technology space.

Triad ranks among the best places for new small businesses (Tiad Business Journal), Rated: B

The Triad area ranks among the 50 best places for new small businesses, according to a new study by online loan marketplace LendingTree.

Interview with Yann Murciano, CEO of Blend Network (P2P-Banking), Rated: A

Blend Network has already lend £1.5 million GBP to 6 project across Northern Ireland, Scotland and Norfolk with an average fixed return of 12.2% p.a.

What are the three main advantages for investors?

  1. Access to niche markets
  2. High returns
  3. Strong due diligence and credit risk assessment

What are the three main advantages for borrowers?

  1. Access to finance
  2. We bring knowledge and understanding of developers’ true requirements
  3. No exit fee for early repayments
United Kingdom

Ranger Direct’s returns still suffering from Princeton proceedings (Peer2Peer Finance News), Rated: AAA

RANGER Direct Lending’s (RDL) ongoing legal dispute with its Princeton holding pushed its net asset value (NAV) return down to 0.43 per cent in January, the investment trust has revealed.

RDL has been locked in arbitration proceedings with Princeton since last year over its exposure to bankrupt lender Argon Credit, and without these costs it said its returns would have been 0.68 per cent.

The update shows its NAV is down from 0.48 per cent in December.

VPC posts record returns from balance sheet investments (Peer2Peer Finance News), Rated: AAA

VICTORY Park Capital (VPC) Specialty Lending Investments has reported that gross revenue return from its balance sheet investments hit an all-time high in January.

Its balance sheet loans produced returns of 1.08 per cent in January, compared to its marketplace loans which produced 0.04 per cent.

80 per cent of its portfolio was in balance sheet loans as of 31 January, the company said.

Fintech lender iwoca pledges £100m for Northern SMEs by 2020 (AltFi), Rated: A

European small business lender iwoca has announced today its intention to pledge £100m in lending to micro and small businesses in the UK’s Northern regions by 2020, as it fights to counteract the withdrawal of credit by UK banks.

The UK neobank market has reached a critical juncture (Business Insider), Rated: A

Starling Bank and Monzo became the top two banks in terms of customer satisfaction, according to consumer finance site Smart Money People, knocking incumbent first direct out of the number one spot for the first time. Additionally, the percentage of UK consumers willing to use a digital-only startup bank fell during 2017, from 78% in the first half of the year to 54% by the end of the year, according to a survey by RFi Group.

Do SMEs favour equity and alternative finance over debt? (Specialist Banking), Rated: A

At the beginning of 2017, SMEs in the UK accounted for 99.3% of all private sector businesses and 60% of all private sector employment in the UK.

Last year saw a substantial increase in the value and number of SME equity deals (up 79% and 12% respectively) in the UK, as well as continued growth in the value of SME asset finance deals (up 12%) and P2P lending (up 51%).

This was at the same time that traditional bank net lending declined to £700m – down from £3bn the year before.

Forget the Lifetime ISA, we need an ‘Everything ISA’ (City Wire),  Rated: A

A report by the Association of Taxation Technicians (AAT) has criticised the number of ISAs available that brings ‘unnecessary complexity, bureaucracy, and confusion’, said chief executive Mark Farrer.

‘Some ISAs have age limits, some do not, some have a maximum savings limit of £20,000 per annum, one has a £4,128 limit, another £4,000, and the Help to Buy ISA offers a £50 bonus for every £200 saved, up to a maximum of £3,000,’ he said.

Farrar also pointed out the ‘mind-boggling interaction’ between different types of ISAs that means the total saved into a Lifetime ISA (Lisa) – a maximum of £4,000 a year – has to be deducted from the total (currently £20,000) that can be saved into a cash or stocks and shares ISA.

Checkout.com Secures a Place on Tech City’s Future Fifty, (PRNEWSWIRE), Rated: B

Checkout.com, a leading international online payment solutions provider, has been included in Tech City’s renowned Future Fifty programme for 2018.

China

Property Tax In China By 2019? (supchina), Rated: A

Meanwhile, there is no tax on real estate. If you buy an apartment — even if it sits empty — it does not cost anything. Although there has been talk of a property tax for many years, there has been little action aside from a few experiments in local markets. That might be about to change, judging by this Sohu report (in Chinese):

  • At this morning’s press conference at the annual political gathering known as the Two Sessions, Vice Finance Minister Shi Yaobin 史耀斌 told reporters that his ministry and other government departments were “drafting and improving the real estate tax law,” while former Finance Minister Lou Jiwei 楼继伟 said that a draft bill may be reviewed by the legislature this year.
  • One important detail that has not yet been worked out: How will the value of property be assessed — based on appraisal, market value, or some other indicator?
  • Local governments will collect and have the benefit of property taxes.
  • The Party’s biggest worry is, I believe, that a property tax will be an excessive new burden on ordinary households whose only major investments are in real estate.
  • A possible solution mentioned in the Sohu article is leaving the first 160 square meters of a person’s property tax-free, but placing a levy on floor space in excess of that and on additional real estate owned by the same person.
  • “A property tax is a potential game-changer for a real estate industry sometimes called too big to fail for the Chinese and world economies,” says Bloomberg.
European Union

EU proposes crowdfunding ‘passports’ in boost for fintech (Reuters), Rated: AAA

The European Commission has proposed crowdfunding “passports” for the European Union in a draft law that forms part of efforts to boost growth in the financial technology sector.

“An EU crowdfunding license would help crowdfunding platforms scale up in Europe,” the EU’s financial services commissioner Valdis Dombrovskis said in a statement.

International

What’s Driving VCs’ Attention To B2B FinTech (PYMNTS), Rated: AAA

According to the analysis, which was released last week, an 18 percent increase in FinTech funding in 2017 led the industry to see $27.4 billion worth of investments. FinTech funding spiked 31 percent to $11.3 billion in the U.S. alone, and the U.K. market’s funding deals nearly quadrupled in value to $3.4 billion.

The volume of deals increased, too, with nearly 2,700 investment rounds closing last year.

B2B FinTechs are playing an especially prominent role in this trend, analysts noted. Anecdotally, these firms have been talking for years about the industry’s potential to make significant disruptions in areas like corporate finance, small and medium-sized business (SMB) lending and more.

The alternative finance market saw a sudden boom, and a similarly sudden period of volatility as big industry names like Lending ClubOnDeck and Kabbage struggled to continue growth momentum. Kabbage was hit with a lawsuit last year initiated by an SMB borrower, and Lending Club’s CEO resigned in 2016 following an investigation into improper loan sale practices.

Fintech – The Evolution Of Modern Financial Technology In The 21st Century (Valuewalk), Rated: AAA

Financial procedures have evolved 

India

Nirav Modi fallout: As banks tighten purse strings, fintech can fill the void (India Times) Rated: AAA

As banks scramble to tighten their credit disbursal process, the ones most affected would surely be the small businesses. The now oft quoted figure from the Economic Survey this year has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises. There is, however, now a robust alternate source of finance for small businesses to tap into.

“Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.

Digital lenders call for easing of regulations (The Times of India), Rated: A

The Digital Lenders’ Association of India (DLAI) has presented a set of policy recommendations to the finance ministry, including easing of funding sources for digital lenders, expanding access to the micro and small enterprises (MSMEs), easing paperless transactions, and opening up lending data.

DLAI, formed in late 2016, comprises of 42 alternative lending startups including CapitalFloat, Lendingkart, Indifi, and KredX. It was formed to develop and promote the needs of these players.

Authors:

George Popescu
Allen Taylor

Friday December 29 2017, Daily News Digest

china mobile payments

News Comments Today’s main news: OnDeck adds BlackRock-managed fund to platform. China imposes order on mobile payments. P2P lending demand booms in Australia. Moneybank launches in Vietnam. Today’s main analysis: India’s startup watchlist for 2018. Today’s thought-provoking articles: 3 trends transforming advisor practices. Is P2P lending in India truly disruptive? 7 fintech predictions for 2018. Canadians’ top priority is paying down […]

china mobile payments

News Comments

United States

China

  • China moves to impose order on mobile payments. AT: “There’s no surprise here. China is all about the regulation right now. While regulations will likely slow the growth of mobile payments in China, the sector will still outpace growth in the U.S.”

International

Australia

India

Asia

MENA

Canada

News Summary

United States

OnDeck Adds a BlackRock-Managed Fund to its Platform of Financing Partners (PR Newswire), Rated: AAA

On December 15, 2017, OnDeck introduced the BlackRock-managed fund as the Class B lender under OnDeck’s existing asset-backed, revolving credit facility with SunTrust Bank. As a result, OnDeck increased the facility’s borrowing capacity to approximately $120 million. SunTrust Bank, the Class A lender under the facility, will act as the administrative agent for both the Class A and Class B lenders.

25 Best Small Business Articles of 2017 (OnDeck), Rated: A

Here are the 25 most read articles from our blog this year. If you missed any of them, now’s your time to catch up.

Which 3 trends are transforming advisor practices? (FinancialPlanning), Rated: AAA

In the face of 2017’s unprecedented opportunities and challenges, advisors have also felt the pressure of three converging forces — and their impact will be heightened in the year ahead.

It starts with the commoditization of financial advice, best exemplified by the growing use of robo advice by both financial advisors and do-it-yourself investors. Second, the downward pressure of fee compression, as consumers demand high-value and low-cost products and services. And third, the continuing consolidation that is reshaping the advisor industry, as firms join forces to achieve greater scale and gain a competitive edge.

In 2018, the impact of commoditization, fee compression and consolidation will lead to a massive shift, shaping the products you use, the portfolios you build, and the very nature of financial advice itself.

CFP Board Revamps Standards, Seeks Comments (Financial Advisor IQ), Rated: A

The CFP Board polled around 1,000 CFP professionals on its initial revision proposal and found that 96% agreed that CFPs should be required to put their clients’ best interest first, according to WealthManagement.com.

The CFP Board is seeking comment on its revised code of ethics and standards of conduct, according to a press release from the board.

5 Trends to Watch in Fintech, Wealthtech and Regtech in 2018 (Think Advisor), Rated: B

  1. Regulation is just beginning.
  2. Technology will continue to converge.
  3. Roles will be blurred.
  4. Enterprise companies will get in the game.
  5. Non-industry brands join in the fun.

Here’s What Over 40% of Millennials Plan to Do With Their Tax Refund (The Motley Fool), Rated: A

Instead, over 40% of millennials have a sensible plan for a windfall that averaged $2,782 across all Americans getting refunds last year. Of course, not every filer will get that much (some even owe) but the 43% of millennials who get a refund will be using it to pay down bills they accrued over the holidays, according to a survey from tax preparation company Jackson Hewitt.

That’s actually a higher rate of using a tax refund to pay down holiday debt than the 31% of the general population polled who gave the same answer to the question “Do you tend to use your tax refund to pay off holiday debt/bills/credit cards?”

In general, you want to keep your credit utilization ratio below 30%. That means you should have more than 70% of your total allotment of credit across all cards available to use.

How Mike Praeger has put AvidXchange — and Charlotte — on fintech map (Biz Journals), Rated: A

When it comes to Charlotte’s business aspirations, homegrown automated payment company AvidXchange hits all the right notes.

SoFi Landing Page (dribbble), Rated: B

China

China moves to impose order on mobile payments boom (Financial Times), Rated: AAA

China’s central bank has tightened rules on mobile payments made by scanning a barcode, imposing restrictions that could slow the explosive growth for Alibaba’s financial services affiliate and that of its main rival, Tencent.

The regulations set daily limits on the amount consumers can spend each day using barcode-based payments. They also forbid “burning money” via subsidies to merchants, which are designed to capture market share from competitors.

China leads the world in mobile payments, most of which are executed by scanning a QR code. While some scans use a specialised point-of-sale (POS) terminal, others occur between mobile phones or when the consumer scans a decal posted near the checkout area.

Source: Financial Times
International

Fintech predictions BI Intelligence got right in 2017 (Business Insider), Rated: A

As 2016 drew to a close, BI Intelligence collated its top five fintech predictions for 2017. As we enter the new year, we’re revisiting them to see how they stood the test of time. Here is what we got right about 2017:

  • Insurtech will continue to ascend.
  • Alternative lending will consolidate around a few big players. Just two of the UK’s largest consumer marketplace lenders, Zopa and RateSetter, 
    Source: Business Insider
    Australia

    Demand for peer-to-peer lending booms (AustralianBroker), Rated: AAA

    Australia’s peer-to-peer lending industry nearly doubled its loan originations this past financial year writing $300m in loans, according to a recent ASIC report.

    More than 18,500 consumers and 201 businesses borrowed $300m in the 2016-17 FY, compared with $156m in 2015-16. More than 7,760 investors provided financing to the platforms.

    The average interest rate charged for these loans was 10.5%. The majority of businesses (77%) were charged an interest rate of between 12-15.99% and the majority of consumers (55%) were charged between 8-11.99%.

    India

    P2P lending in India: Is it truly delivering a disruptive new asset-class? (Economic Times), Rated: AAA

    When we started the P2P business, it was all about reaching out to borrowers who have been untapped by the formal sources of finance. I will get to that in my next point, but during our journey we have realized it was not only about the borrowers, but also about lenders. It was not easy to draw lenders to the model, but once they realized the potential, it was clear to them that P2P was a good alternate source of investment.

    The P2P industry and us included have painstakingly worked to safeguard the lender’s interest, use technology to help lenders take the most informed lending decision and strengthen every process of the P2P value chain. From having bank-grade security to having the best credit verification technologies, P2P in the country has relentlessly worked to make the sector better.

    Borrowers
    When it comes to borrowers, the impact has been more straightforward. P2P has enabled a whole new section of individuals to seek credit. What is interesting is that a large percentage of our loans today, more than 50% is business loans for small and medium businesses.

    Top 7 Fintech Predictions for 2018 (Economic Times), Rated: AAA

    UPI 2.0 – UPI has grown 400X in volume since November last year, proving to be a huge success in terms of consumer adoption. Several entities like banks, fintech players have built their own UPI solutions, contributing to this tremendous growth.

    UPI 2.0 with its two features – biometric authentication and E-mandates aim to transform the way payments are made today.

    E-Mandates – E-Mandates replace the physical mandate system of ECS (Electronic Clearing System), transforming the entire system of direct debit payments. Setting up and managing e-Mandates is fast, convenient and completely digital, reducing the payment processing time by nearly 80%.

    BharatQR – BharatQR can prove to be a boon for offline businesses and small merchants, especially in tier 2 and tier 3 cities to adopt digital payments easily.

    Peer-To-Peer (P2P) Lending

    Artificial Intelligence & Machine Learning in Payments – The trend to use artificial intelligence and machine learning in payments is fast growing. Some of the application areas of these technologies we can envisage in the near future are chatbots, voice-based payments and advanced fraud detection mechanisms.

    Blockchain – The technology can be used across several areas like digital currency exchange, cross-border payments, money transfers and smart contracts among many others.

    Startup Watchlist: 9 Fintech Startups To Watch Out For In 2018 (Inc42), Rated: AAA

    In India, the need for technological disruption in the banking sector is all the more acute, given that over 19% of the country’s population still remains unbanked.

    Forecasted to cross $2.4 Bn by 2020, as per a report by KPMG India and NASSCOM, India is currently home to more than 500 fintech startups, whose collective aim is to attain financial inclusion.

    The Explosive Growth Of Indian Fintech Sector

    Home to more than 462 Mn Internet users, the number of mobile users in India is expected to reach 1 Bn by the year 2020. In fact, it has the greatest market potential in the entire world, as determined by the Harvard Business Review (HBR) in its latest edition of Digital Evolution Index 2017.

    Post the ban on INR 500 and INR 1,000 notes, India witnessed an acute dearth of cash, which in turn caused Internet-enabled cashless transactions to sky-rocket. As reported by Inc42, digital transactions increased 22% almost immediately after the ban came into effect.

    In less than 24 hours after the embargo was announced by PM Narendra Modi-led government, Paytm saw an overwhelming 435% increase in overall traffic. Other digital wallets like PayU India witnessed a staggering 80% jump in transactions, while FreeCharge claimed that the average wallet balance on its platform increased 12 times. MobiKwik meanwhile reported an over 40% increase in app downloads within less than 18 hours of the announcement.

    Faircent

    Till date, lenders on the platform have committed to lend over $4.8 Mn (INR 31 Cr), while borrowers have sought up to $3.5 Mn (INR 23 Cr) in loans. At present, Faircent claims to receive over 225K loan requests per month, with most of them being used for funding businesses, family events, appliance purchases, debt consolidation, among others.

    Kissht

    Conceived in 2015, Mumbai-based Kissht is a fintech startup that provides instant credit to consumers for making purchases at digital points of sale (both offline and online). Through its app, users can buy various items including mobiles, laptops, jewellery, and electronics by opting for flexible EMIs even without a credit card.

    Last month, Kissht raised $10 Mn (INR 67 Cr) in a round led by Chinese investment conglomerate, Fosun International.

    Simpl

    Launched in 2015, Simpl is an online payment instrument that allows customers to make purchases and settle payments online.

    As claimed by the company’s spokesperson, Simpl boasts a customer retention of around 85% overall, which is growing at 50% monthly.

    Here’s how 2017 has been a roller coaster ride for Indian startups (Economic Times), Rated: A

    SoftBank to invest in India through its mega, technology focused $100 billion Vision Fund

    Around 50 employees of Paytm sold shares worth about Rs 100 crore to both internal and external buyers

    Flipkart raises $1.4 billion in funding from Tencent, Ebay and Microsoft

    Paytm raises $1.4 billion from SoftBank; Sees valuation jump to $8 billion

    Snapdeal sells its digital payments platform to Axis Bank, the country’s third-largest private sector lender, for Rs 390 crore.

    SoftBank pumps $2.5 billion into Flipkart, making it the biggest private investment in the country’s consumer technology sector.

    The RBI identifi es peer to peer lending startups under a separate category of non banking fi nance companies and frames rules of operation. Also opens window for applications under NBFC-P2P category

    6 amazing ways personal finance changed in 2017 (Financial Express), Rated: A

    1. Social credit scores
    2. Digital Payments
    3. eKYC and Aadhaar
    4. P2P lending
    5. Algorithmic-driven personal finance management
    6. Bitcoin and Blockchain

    How to get paperless personal loans? (SRJ News), Rated: B

    Among several other activities and banking transactions, personal loans too can be availed online. From applying for a loan to getting it sanctioned, the entire process can be carried out from the comfort of your laptop or desktop. Gone are the days of running around for paperwork and visiting bank branches. The whole process is completely digital;thus, paperless online personal loans are nothing but everyone’s saviour.

    Benefits of online personal loans

    • No physical documents are required
    You just need to upload all the identity proofs along with your bank statement online, to get your loan approved.
    • Quick disbursement route
    If you submit all the required details, along with the application and other statements, your loan can be disbursed as quickly as within 24 hours.
    • A complete online process
    You don’t need to constantly visit banks and wait for days to get your loan approved.
    • No collateral required
    You only need to share your information and documents to get the loan approved, for anonline personal loan these days no security or collateral is required.
    • Flexible tenure options
    You get comfortable EMI option on your loan tenure, starting from 12 to 36 months.

    Asia

    The future of commercial real estate investing: How the investment ecosystem is being disrupted (Moneybank Email), Rated: AAA

    Singapore based consumer finance group Silkway Ventures has expanded its operations to Southeast Asian region by opening a subsidiary in Vietnam. The group announced today that it has launched its online peer-to-peer lending platform Moneybank.vn. Over the next five years the company plans to expand its footprint to other neighboring Asian markets to tap into a potential underbanked consumer base, estimated to be 500 million people.

    Vietnam is the first international foray in the digital consumer lending space for Silkway Ventures. The country has a population of over 90 million people, where demand for consumer finance services is rising rapidly and a large percentage of the population is virtually unbanked. At the same time the rate of Internet and smartphone penetration is already significant. The digital consumer finance model offers greater customer coverage at a significantly lower cost compared to traditional banking channels. The move by Silkway Ventures into the Vietnam consumer finance market offers a welcoming Segway for fintech companies to access the market and drive further development in this sector.

    MENA

    Largest fintech hub to open in Bahrain (Zawya), Rated: A

    A facility opening in Bahrain next February will be the largest dedicated fintech hub in the Middle East and Africa, according to its developer and manager.

    Bahrain FinTech Bay, operated by Singapore-based fintech incubator Fintech Consortium, will be a 10,000 sqft facility which will include a variety of shared infrastructure, such as co-working spaces, the consortium’s Bahrain chairman Missan Al Maskati told the GDN in an exclusive interview.

    Canada

    CIBC poll shows that Canadians’ top financial priority is paying down debt (The Georgia Straight), Rated: AAA

    Once again, a large number of debt-soaked Canadians have told a pollster that they’re going to put repaying creditors at the top of their financial to-do list in the coming year.

    It’s the eighth consecutive year that this has been the Number 1 financial priority of those surveyed for CIBC by the Angus Reid Institute.

    Canada’s household debt to disposable income reached a record of 171.1 percent in the third quarter of this year.

    Authors:

    George Popescu
    Allen Taylor

Wednesday November 8 2017, Daily News Digest

Lending Club originations

News Comments Today’s main news: LendingClub’s Q3 results, rise in originations of 34%. Lending Club achieves highest revenues in company history. November review of Funding Circle. JD Finance intros Fintech-as-a-Service. Revolut seeking EU banking license. ID Finance sees 50% loan approval rate after AI fraud scoring tech rollout. Today’s main analysis: Lending Club’s Q3 earnings. Today’s thought-provoking articles: Due diligence […]

Lending Club originations

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

News Summary

United States

LendingClub originations rose 34% in Q3 (American Banker), Rated: AAA

Loan originations continued to climb for LendingClub in the third quarter, yet profitability remained out of reach even as the lender continued to recover from the scandal that forced out its former CEO.

LendingClub Q3 Results: Highest Revenue in the Company’s History of $ 154.0 million (Crowdfund Insider), Rated: AAA

LendingClub (NYSE:LC), the largest marketplace lending platform in the United States, has published Q3 2017 financial results. The company delivered the best revenue in LendingClub’s history generating $154 million in top line revenue, an increase of 34% versus year prior and 10% over Q2 2017.

LendingClub Q3 2017 Earnings – Close to a Return to Profitability (Lend Academy), Rated: AAA

Last quarter we reported that LendingClub had returned to origination growth. It was a relatively small amount, compared to historical growth, at just 10%, but it was a noticeable change from the several quarters of flat originations. Today, LendingClub announced their third quarter financial results which included $2.44 billion in originations, an increase of 14% from the prior quarter ($2.15 billion).

Source: Lend Academy

The company also delivered their highest revenue to date at $154 million, up 34% year-over-year. This was on the low range of guidance for the quarter ($154 – $159 million). The company had a GAAP net loss of $6.7 million, which was better than their third quarter guidance of losses between $12 million and $8 million. Adjusted EBITDA came in at $20.9 million which was in the middle of guidance between $18 and $22 million.

Source: Lend Academy

LendingClub forecasts fourth-quarter loss, shares plummet (Reuters), Rated: A

Online lender LendingClub Corp (LC.N) forecast a fourth-quarter loss and revenue below expectations, sending its shares down sharply after the bell on Tuesday.

For the fourth quarter, the company expects net loss of $3 million-$7 million and revenue in the range of $158 million-$163 million.

LendingClub comes up short as it cuts back full-year guidance (Financial Times), Rated: A

Shares in Lending Club crashed in after-hours trading on Tuesday, as the company pared its revenue and profit guidance for the full year.

The company’s stock fell as much as 22 per cent after the closing bell, having lost about 6.6 per cent during the day.

DUE DILIGENCE REQUIRES DEEP DIVES INTO DATA (All About Alpha), Rated: AAA

The data and analysis provider eVestment has issued a new white paper on “enhancing private equity manager selection with deeper data.”

The authors of this study cite a recent paper by Daniel R. Cavagnaro, Bart Sensoy, Yingdi Wang, and Michael Weisbach.  Cavagnaro et al found (in the eVestment paraphrase) that “an investor’s skill level in fund selection is a more important driver of their returns, than luck or access to managers,” and that indeed an increase in skill of one standard deviation accounts for a 3% increase in the annual IRR.

With reference specifically to buy-out funds, eVestment says that only 19% of the funds that (a) have raised money subsequent to 2001, and (b) were a successor to a top quartile performer (by the same GP) have then repeated that top quartile performance.

The numbers for these four periods are: 33%, 33%, 25%, and 22%.

Focusing more specifically on persistence within the top quartile, the numbers drop more dramatically. They are then: 31%, 28%, 13%, and 12%.

Download and read the eVestment white paper here.

Medical residency refis may be just what the doctor ordered (Asset Securitization Report), Rated: A

When the online lender Social Finance recently unveiled its latest refinancing product, it put a spotlight on a perhaps overlooked corner of the student loan market: medical residents.

SoFi launched an offering in October designed specifically for medical school graduates who practice in a residency program at a hospital or clinic. The company is following in the footsteps of established players like Darien Rowayton Bank and several upstarts.

SoFi Launches “Refi and Relax,” Aimed at Combating Widespread Student Loan Anxiety (PR Newswire), Rated: A

On the heels of the end of most new college graduates’ student loan repayment grace period, SoFi today announced its first-ever Refi and Relax campaign, which aims to educate graduates on their refinancing options as a way to relieve the overwhelming stress that comes with carrying student debt.

Student loan debt is a large source of anxiety and stress for many young Americans. According to a recent SoFi member survey of over 1,200 respondents, eighty three percent shared that they’ve felt like they couldn’t relax due to the burden of the debt. Fifty percent of people dealing with student loan debt reported feeling anxious and/or depressed, and fifteen percent of respondents went so far as to talk with a mental health professional about the stress of their student debt.

Over a third of respondents have reported losing sleep due to student loan debt. Seventy five percent of respondents shared that they would give up social media if it meant their student loans would disappear. Forty percent of respondents said they would stay at a job that they hate because of student loan debt. Another twenty percent are willing to take even more dramatic measures by sacrificing a finger or toe in exchange for erasing their student loans.

Americans currently owe over $1.34 trillion in student loan debt, about $319 billion more than total credit card debt, according to the Federal Reserve Bank of New York’s August 2017 report.

Refi and Relax will comprise of a robust social media advertising campaign (#RefiandRelax), in addition to a members-only launch party in New York exclusively for those who recently refinanced their loans. On November 7, to give SoFi members a night off to unwind, the event will be dedicated to utmost relaxation, with manicures from GlamSquad, playtime with Socials Tees puppies, premium giveaways, and more.

There’s a gender gap in college savings, too (Mashable), Rated: A

Two studies recently found that parents save less for their daughters’ college educations than they do for their sons’. As highlighted in a Wall Street Journal story, a study by T. Rowe Price examined families who had all boys and families who had all girls.

The families who only had boys saved more for college than the families who only had girls. Fifty percent of households with boys saved money for college, compared to only 39 percent of households with girls. And 83 percent of families with boys contributed to college savings monthly, while only 70 percent of families with girls did. This all stood up no matter how many children the families had.

LendKey Forms Partnership with Allied Solutions to Offer Digital Lending & Loan Participation Solutions for Financial Institutions (Crowdfund Insider), Rated: A

LendKey, a lending-as-a-service solution for banks and credit unions, announced on Monday it has formed a partnership with Allied Solutions to offer its digital lending solutions, including unique and innovative loan participation programs, to Allied’s more than 4,000 clients.

Catching Up With LendingPoint (deBanked), Rated: A

At Money2020, we sat down with Chief Executive Officer Tom Burnside and Chief Strategy Officer Juan Tavares, both of LendingPoint, an online consumer lender we examined in the July/August magazine issue.

An interesting initiative that they’re now just ramping up, Tavares says, is partnerships with hospitals that allow patients to determine their deductible expenses and obtain credit on the spot to pay for it.

Accounting software giant Intuit launches direct business loans (CNBC), Rated: A

Financial software firm Intuit is offering loans directly to businesses with a lending product called QuickBooks Capital.

The company, which makes tax-preparation and accounting software, said Tuesday it would enable firms to use its bookkeeping software to access up to $35,000 in credit, with a term between three and six months.

QuickBooks Capital uses machine learning to help small businesses demonstrate credit-worthiness.

According to a study by the Federal Reserve earlier this year, only 23 percent of businesses younger than five years get access to credit.

How banks can beat digital lenders at their own game (American Banker), Rated: A

Perhaps it’s time to start acknowledging that banks are no longer taking a back seat to pioneering online lending startups.

Many depositories have learned that if they fail to modernize their lending processes, they risk being left behind. At the same time, many startups have been stymied by certain intractable advantages held by the banking sector, the most notable being significantly lower funding costs.

Bank of America Merrill Lynch has signed on with a quant firm — and it shows where Wall Street is headed (Business Insider), Rated: A

Manoj Narang, founder of quant hedge fund MANA Partners, has launched a trading subsidiary that is developing market-testing products. One of his first clients: Bank of America Merrill Lynch.

MANA Tech is also marketing a product using similar data that allows investors to measure how much money their algorithmic strategies would have performed in past market conditions, and identifies how they could become more profitable.

“It’s much more beneficial to be a quant trading firm where technology is a profit center and not a cost center. It allows you to spend much more on your technology than you can with the traditional setup where technology is a tax on trading profits,” Narang added.

Can Cryptocurrencies Solve What Traditional Lenders Cannot? (TheStreet), Rated: A

Beyond general economic anxiety in a post-2008 world, numerous other factors contribute to small businesses’ difficulties securing credit. New companies don’t have track records showing years of rising revenue and profit. Some of the world’s most promising theaters for business growth, like Asia Pacific, are regions where many individuals typically don’t have access to banks. Women-owned businesses may be at a particular disadvantage, since women have been starting businesses at a high rate over the past decade, and therefore tend to constitute a higher proportion of young businesses.

Alternative Lenders

Immediately after 2008, most banks had their hands tied when it came to providing loans to small businesses-providing a window for alternative lenders, predominantly peer-to-peer lenders, to grow. P2P lending is still very much a nascent and emerging area – according to a recent Fundera survey, small businesses continue to look mainly to brick-and-mortar banks for financing, with only 11% of respondents opting to work through alternative lenders.
When a small business needs a loan, it shares its real transaction history from a POS terminal with the flip of a switch on WishFinance’s app.
The company’s cryptocurrency, WISH, offers an Ethereum-based tokens that investors need to build and manage loan portfolios on the platform. One token–at a cost of $1–manages one active loan, meaning a lender with 1,000 active loans would deposit 1,000 WISH tokens using one of the available cryptocurrency exchanges. Lenders can also “borrow” tokens from other lenders, sharing gains with the primary token owners. In theory, the platform takes a good first stab at making SME lending more profitable and less uncertain. If more lenders entertain using the blockchain to manage risk, we’ll see higher volumes of loans and, in turn, higher demand for tokens to manage them.

The financial services industry typically evolves at a glacial pace. The three trends outlined above – the rise in alternative lenders, crowdfunding and cryptocurrencies – represent evolution, not necessarily disruption.

CrowdStreet Gains Momentum as it Delivers on Vision of Expanding Access to Commercial Real Estate Investing (Marketwired), Rated: A

With its innovative integrated online investor marketplace and software as a service (SaaS)-based investment lifecycle management solution, CrowdStreet has increased investment dollars managed on its platform by 4x, reaching $4.2 billion in 2017, and doubled the number of investors year-over-year to more than 61,000. These results signify a major shift in confidence in online commercial real estate investing as this infographic illustrates.

In 2017, CrowdStreet’s technology platform has seen more than $745 million distributed back to investors, a 3x increase from $245 million last year. The marketplace investment run rate also grew by over 3x reaching $250 million of equity raised this year, compared to $76 million in 2016.

CrowdStreet Announces Leadership Team Expansion & Advisory Board Formation (Crowdfund Insider), Rated: B

The funding portal revealed Molly Moore, was appointed as its new Chief Marketing Officer while Rohit Colaco was named Vice President of Engineering. CrowdStreet appointed Thomas Byrne (CEO of Property Capsule Inc), Lewis G. Feldman ( CEO and Founder of Heritage Capital Ventures LLC), Christopher Keber (Currently Head of Investments and Strategy at McCourt Global), and John Witchel (President and COO of GitPrime) to its advisory board.

CrowdSeekr Takes Top Spot Among Real Estate Crowdfunding Resources (PR.com), Rated: A

CrowdSeekr is proud to announce that it is now the top data resource for real estate crowdfunding based on the number of investment opportunities in its database. CrowdSeekr is an aggregator and search engine for the real estate crowdfunding industry. The company was founded in 2015 and now features nearly 300 available real estate crowdfunding investments from dozens of platforms.

CrowdSeekr.com is a leading aggregator and search engine for real estate crowdfunding investment opportunities. It was founded in 2015 by e-commerce attorney Ashley Smith and commercial real estate professionals Tim Strange and Marylee Strange. CrowdSeekr currently lists offerings from over 30 real estate crowdfunding platforms. Over 7 billion dollars has been raised for real estate projects using crowdfunding since 2013.

The Next Frontier Of Real Estate Investor And Property Manager Technology (Forbes), Rated: A

Quietly working and collecting rent used to be the DIY real estate investor commonly known as the landlord. Then real estate investing boomed, and property management became a reported $77 billion business as real estate investors grew to an estimated 7 million people. Single and two- to four-unit buildings currently comprise an estimated 54% of the rental units available today — a market share that has turned the heads of software developers looking to service the independent DIY real estate investor market.

Over the last five to seven years, hoards of real estate investors embraced the efficiencies technology brought to the industry and to their bottom line. Owners accumulating between two and 500 units have started to look at technology solutions as a platform for controlling costs.

Most landlords are now set up in a software solution and can fill a calendar with the dates of the cycle specific to just the payment processing phase. We watched the benefits of the speed of the automatic payment options processed through electronic ACH banking unfold.

A New Horizon For Real Estate Tech

The next step is to use the information available from machine learning and AI to help landlords better manage the asset and identify consumer behavior while anticipating needs.

U.S. Fintech Investments Double (WealthManagement.com), Rated: A

Investments in U.S. fintech companies nearly doubled during the third quarter to $5 billion, up from $2.6 billion in the second quarter, according to KPMG’s recent Pulse of Fintech report. There were a total of 142 deals during the quarter, up from 125 deals in the prior year quarter and 147 deals last quarter. The automated advice platform technology was a big bet during the quarter, with hybrid models—those using a combination of humans and technology—gaining more traction over pure robo advisors, the report said.

One year after President Donald Trump defeated Hillary Clinton to become President of the United States, the stock market has risen 21.2 percent.

Source: WealthManagement.com

InvestCloud and Willis Towers Watson are partnering. The cloud-based financial services platform was selected to build a bespoke solution for the WTW Asset Management Exchange that will enable clients to better access and monitor roughly $2 billion, according to a statement.

Goldman Sachs Shuffles Leadership in Slumping Fixed-Income Unit (Bloomberg), Rated: A

Goldman Sachs Group Inc. has shaken up the leadership of its vaunted fixed income, currencies and commodities business after stumbles this year called its strategy into question.

The firm named Jim Esposito and Justin Gmelich, both 49, to newly created roles as co-chief operating officers of FICC, according to a memo Tuesday from securities division co-heads Isabelle Ealet, Pablo Salame and Ashok Varadhan. Gmelich gives up his title as global head of credit and mortgage trading, while Esposito relinquishes his role helping to run fixed-income sales, leaving John Willian with sole responsibility.

U.S. Consumer Financial Protection Bureau Sets Out Principles for Consumer-Authorized Data Sharing and Aggregation (Lexology), Rated: AAA

On October 18th, 2017 the U.S. Consumer Financial Protection Bureau (“CFPB”) outlined the principles to be followed (“Principles”) when consumers authorize third party companies to access their financial data to provide certain financial products and services.

The Principles line up quite closely with the ten Fair Information Principles that underlie Canadian federal privacy legislation (PIPEDA). Absent (or diluted) from the CFPB Principles are the Fair Informaiton Principles regarding “Limiting Use, Disclosure and Retention”, “Limiting Collection” and “Identifying Purpose”. The CFPB Principles also attempt to address many of the same issues that arise in the mandatory “Open Banking” regime in the EU and the UK, but in a much less fulsome manner.

The CFPB’s interest in consumer data (and specifically Open Banking) was telegraphed by the Director of the CFPB his remarks at the 2016 Money 20/20 conference when he stated that the CFPB was “gravely concerned” that financial institutions were limiting or shutting off access to financial data, rather than “exploring ways to make sure that such access…is safe and secure.”

The CFPB has now released its set of Consumer Protection Principles intended to reiterate the importance of consumer interests. They are, however, non-binding and not intended to alter, interpret, or otherwise provide guidance on existing statutes and regulations that apply.

  1. 1) Access
  2. 2) Data Scope and Usability
  3. 3) Control and Informed Consent
  4. 4) Authorizing Payments
  5. 5) Security
  6. 6) Access Transparency
  7. 7) Accuracy
  8. 8) Ability to Dispute and Resolve Unauthorized Access
  9. 9) Efficient and Effective Accountability Mechanisms

USATech buys Cantaloupe Systems for $ 85M (Philly.com), Rated: B

Shares of USA Technologies Inc., Malvern, hit a 10-year high of $6.75 in early trading Tuesday after the mobile- and cashless-payments company said it agreed to pay $85 million ($65 million cash, the rest in USAT shares) for a competitor, San Francisco-based Cantaloupe Systems Inc.

The 11 Most Valuable VC-Backed Fintech Companies In The US (Fintech News), Rated: B

United Kingdom

Your November Review – Insight and Analysis (Funding Circle), Rated: AAA

Last month was a global record month here at Funding Circle. In the UK alone, over £120 million was lent to businesses thanks to your continued support.

Source: Funding Circle

You’ve helped more than 8,900 small businesses access finance in the last 6 months…

Source: Funding Circle

Totalling over £630 million lent.

Assetz appoints LendInvest’s Damien Druce for intermediary expansion (P2P Finance News), Rated: A

ASSETZ Capital is looking to bolster its presence in the intermediary space as part of the next stage of its expansion.

The peer-to-peer business lender has appointed Damien Druce (pictured) to lead the move as head of intermediary sales.

He joins from LendInvest where he was northern business development manager, and has previously worked for Castle Trust and Crystal Specialist Finance.

China

JD Finance Announces JD Financial Cloud“Fintech as a Service” (Business Insider), Rated: AAA

JD Finance today announced the launch of JD Financial Cloud. The new platform uniquely combines advanced technology and big data to offer “Fintech as a Service,” a new approach that will help financial institutions solve problems and reduce costs while boosting their productivity and competitiveness.

Where precision marketing is concerned, JD Finance’s “Jingdong Laike,” analyzes a massive base of user tags based on online shopping and mobile usage patterns as well as payment history and credit risk to offer insights that can boost response rates by 25 percent while reducing customer acquisition costs by 20 percent.

Furthermore, leveraging AI and big data to recognize and analyze patterns in JD Finance’s comprehensive dataset that includes 30,000+ risk control variables, 300m+ user credit evaluations, 500+ models and 5,000 risk strategies can help institutions better evaluate credit risk.

China’s Raging Fintech Boom on Verge of Minting Two Billionaires (Bloomberg), Rated: AAA

Online consumer finance platform PPDAI Group Inc. is planning an initial public offering in the U.S. this month, giving co-founder Shaofeng Gu, who owns more than 25 percent of the business, a net worth of at least $1.3 billion, according to the Bloomberg Billionaires Index. Ning Tang owns 36 percent of U.S. listed peer-to-peer lending platform Yirendai Ltd., giving the founder and chief executive officer a net worth of about $930 million.

“In China, one billionaire is created every three weeks,” Qiong Zhang, head of wealth management for UBS Securities in China, said in an interview.

Source: Bloomberg

P2P platforms turn to US markets for funds (China.org.cn), Rated: A

Hexindai Inc became the first Chinese financial technology (fintech) company to list on the Nasdaq stock market last Friday. Priced at $10 per share, the IPO aims to raise $50 million. It was also the third Chinese fintech company that went public in the US this year.

According to the global consulting firm Oliver Wyman, the market size for consumer lending will expand to $620 billion by 2020 with a compound annual growth rate of 49 percent.

With such a rapid growth in demand, P2P lending platforms such as Hexindai have seized the growth opportunities. Credit loans accounted for 99 percent of its total loans in the second quarter of 2017, with Q2 profit soaring to 60 million yuan, far ahead of its annual profit in 2016.

According to the US Securities and Exchange Commission, Rong360 Inc, another online financial service provider, plans to raise $270 million through an initial public offering in New York.

Auto Financier Yixin Launches $ 900 Million IPO (Caixin), Rated: A

Yixin Group Ltd., an online car financing company backed by three of China’s top internet companies, is hurtling ahead with a Hong Kong IPO to raise up to nearly $900 million, as enthusiasm on a new generation of financial technology (fintech) companies starts to stall.

The company has set a price range of HK$6.60 ($0.85) to HK$7.60, with plans to issue nearly 880 million shares in Hong Kong, according to a source with direct knowledge of the deal, speaking on condition of anonymity because the matter is private. At that price range, the company would generate between $740 million and $870 million in proceeds.

Marketplace lending: where everybody wins (Enterprise Innovation), Rated: A

European Union

Revolut becomes latest UK fintech firm to seek banking license (Reuters), Rated: AAA

British financial technology firm Revolut said on Wednesday it has applied for a European banking license, as it bids to join a growing number of digital-only banks looking to win away customers from larger, traditional lenders.

Current accounts and credit will initially be available to users in Lithuania, before being rolled out to Estonia and Latvia and, as soon as possible, Britain. Next in line are France, Germany and Italy and eventually the rest of the European Union, the firm said.

Revolut to bring processing in-house (Banking Technology), Rated: A

Revolut is building its own in-house processor, following a string of outages caused by its current third party provider.

The latest issues were flagged on social media by Revolut’s users from around the world on 3 November, with their cards being declined and payments rejected.

International

AI-based fraud scoring boosts loan approval rate by 50 per cent for ID Finance (ID Finance Email), Rated: AAA

Reshaping Peer-to-peer Lending with Crypto Assets (Coinidol), Rated: A

The Bitbond, BTC Jam, and BTC POP platforms were pioneers in the market of crypto lending. From that time forward, it can be clearly seen that blockchain and crypto assets usage in p2p lending is stepping up. The congruence of the proven peer-to-peer lending business model and possibilities of blockchain seems to be a solid base for advanced financial services. What does it mean for investors and borrowers, how does it affect global economy, and how can crypto assets possibly reshape the existing peer-to-peer lending market?

Financial Inclusion

According to McKinsey research, there are still about 2 billion unbanked and underbanked people in the worldwide adult population. Blockchain-based lending services can offer microloans to a customer who has no previous credit history. While some banks in Asian countries require enormous amounts of paperwork to be done before approving a loan, cross-border lending platforms have unified rules for everyone. Not mentioning the fact that bank account penetration in developing countries hardly reaches 30%.

Globalization means equality 

It’s no secret that interest rates set by traditional banks may significantly vary by country. While the difference can be about 0.1% between loan interests in Germany and UK, interest rates in Thailand, Turkey or Latviamay be 10 times higher. Global platforms offer the same terms regardless of citizenship.

  • Lendoit is a decentralized P2P lending platform.
  • CoinLoan is a platform for lending secured with crypto-assets (cryptocurrency, tokens).
  • ETHLend offers fully decentralized P2P lending.
  • Inspeer is a P2P lending service that works with cryptocurrency and fiat.

Fintech funding round-up: 7 November 2017 (Banking Tech), Rated: A

Banking (not baking) challenger Douugh has partnered with community bank Choice Financial to launch an integrated checking account and debit card. Choice has also made an investment to “support Douugh’s roadmap”, bringing the company’s total seed funding to $2.5 million.

Mobile-only challenger bank Monzo has closed its latest fundraising round, raising £71 million from Goodwater Capital, Stripe and Michael Moritz.

Smartkarma, a provider of investment research, has closed a Series B round of financing led by Sequoia India, which brings the company’s total funding to $21 million.

9 Firms To IPO This Week (Benzinga), Rated: B

CBTX, Inc. (CBTX) will issue 2.4 million shares between $24 and $26 Wednesday on the Nasdaq. The Community Bank of Texas maintains nearly $2.94 billion in assets in 34 state branches, according to the Federal Deposit Insurance Corporation.

PPDAI Group Inc. (PPDF) will issue 17 million shares between $16 and $19 Friday on the New York Stock Exchange. The 10-year-old Shanghai company facilitates online peer-to-peer lending and reported $381 million in sales in the 12 months ending June 30.

India

The digital register is ringing loud and clear (The Hindu Business Line), Rated: AAA

According to government sources, digital transactions since demonetisation have grown manifold on a month-on-month basis. For instance, volume wise, transactions via NACH, IMPS, UPI+BHIM and Rupay have grown to ₹1,47,624 crore in September 2017, against ₹1,07,987 crore in October 2016. Similarly, transactions through debit cards, credit cards, NEFT, RTGS and mobile wallets have grown from ₹1,07,59,649 crore in October 2016 to ₹1,23,28,369 crore as of July this year.

Prime Minister Narendra Modi’s actions to digitise India has brought a momentum to the entire payment ecosystem and helped build a new framework for the digital economy.

As per reports, deposits up to ₹80 lakh were made in 10.9 million accounts in November-December last year, and over 1.48 lakh account holders deposited an average ₹3.3 lakh in their banks. The impact is seen in the number of tax filings for the period April-May 2017, which went up by 17 per cent to 27.5 lakh returns from a level of 23.5 lakh in the same period last year.

Asia

Kosdaq-listed SFC buys full stake in Korean P2P lending startup Villy (Pulse News), Rated: A

South Korea’s peer-to-peer (P2P) lending service startup Villy was acquired by Kosdaq-listed solar backsheet manufacturer SFC Co. for 11 billion won ($9.8 million), the company said Monday. It is the country’s first merger and acquisition (M&A) case for a P2P lending startup.

Founded in April 2015, Villy boasts 80.5 billion won worth cumulative loan, 36,000 cases of investment and 5,460 investors, 55.4 percent of whom are people in their 20s to 30s. Its reinvestment rate reaches 74.7 percent. Following the acquisition, Villy will be a subsidiary of SFC with its 100 percent stake owned by the latter.

Authors:

George Popescu
Allen Taylor