Thursday February 1 2018, Daily News Digest

software hacks

News Comments Today’s main news: SoFi lays off 5% of workforce. BlueVine doubles invoice financing credit lines. Chime reaches 750K bank accounts, $2.5B transaction volume. SoftBank injects funding into Moven, who could be buying a bank. Zopa hits 3B GBP in lending. Crowd Genie kicks off ICO. Today’s main analysis: Coincheck’s recent hack could mean big changes in crypto lending, […]

software hacks

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Bermuda

News Summary

United States

SoFi Lays Off 5% of Staff (WSJ), Rated: AAA

The San Francisco-based financial-technology company told staffers on Tuesday it is cutting around 65 jobs, roughly 5% of its 1,300-person workforce, the people said. The layoffs are centered in SoFi’s mortgage-operations centers in Healdsburg, Calif., and Cottonwood Heights, Utah.

He added that SoFi is currently looking to fill more than 175 open jobs.

‘A 401(k) of the future’: How SoFi wants to grow student loan refinancing with WeWork (Tearsheet), Rated: A

SoFi wants to sell its loan refinancing products to WeWork and its member companies by offering them an additional 0.125 percent discount.

growing number of companies have been adding student loan repayment as a workplace benefit. With $1.4 trillion in outstanding federal and private student loans, it’s a huge market.

SoFi’s Top 20 Law Schools Producing the Highest Salary Averages (JDJournal), Rated: A

SoFi examined the salary earned upon graduation from different law schools compared to the cost of the education. They looked at 60,000 student loan refinancing applications that had been submitted to them between January 2014 and December 2016. They took that data and formed SoFi’s Return on Education (ROED) Law School Rankings. The ranking uses the average salary and student debt load of the graduates three years out of law school that is reported to them by graduates looking to refinance their loans.

The top 20 law schools with the highest average salaries are:

  1. Cornell University – $183,377
  2. Columbia University – $177,962
  3. New York University – $177,203
  4. University of Chicago – $174,238
  5. Harvard University – $173,578
  6. Georgetown University – $173,464
  7. Northwestern University – $173,204
  8. Yale University – $171,779
  9. University of Pennsylvania – $170,954
  10. Duke University – $169,096
  11. University of Virginia – $166,396
  12. University of Michigan Ann Arbor – $164,713
  13. University of California Berkeley – $163,940
  14. University of Southern California – $161,823
  15. Fordham University – $160,590
  16. Stanford University – $158,088
  17. George Washington University – $153,302
  18. University of California Los Angeles – $152,469
  19. Vanderbilt University – $149,475
  20. University of Texas at Austin – $147,444

BlueVine doubles invoice financing credit lines to up to $ 5 million (Finextra), Rated: AAA

BlueVine has doubled the credit line size for its invoice factoring product to up to $5 million, underscoring the online business lender’s push to offer fast and flexible working capital financing to small and medium-sized businesses.

BlueVine also increased the limit for its business line of credit product to $200,000 from $150,000, making its Flex Credit product an even more attractive financing option for larger or fast-growing companies.

Court upholds constitutionality of Consumer Financial Protection Bureau (Politico), Rated: A

A federal appeals court has upheld the constitutionality of the Consumer Financial Protection Bureau’s structure, a decision that preserves the agency’s independence in the face of challenges from business interests and conservatives.

The D.C. Circuit Court of Appeals ruled 7-3 on Wednesday that a provision in the 2010 Dodd-Frank law that limits the president’s ability to remove the CFPB director during his or her five-year term does not violate the president’s authority to appoint and remove executive branch officers.

Chime Reaches 750,000 Bank Accounts, $ 2.5 Billion Transaction Volume (Business Insider), Rated: AAA

Chime is on track to open more than 100,000 bank accounts per month and expects to reach 1 million total this quarter. With more than 750,000 bank accounts opened to date and over $2.5 billion in total transaction volume, Chime has emerged as the clear leader in the challenger banking segment.

While most Americans pay more than $27 a month on average in bank fees, Chime doesn’t charge overdraft fees, monthly fees or foreign transaction fees. With its award-winning mobile banking app, Chime members avoided more than $225 million in potential overdraft fees from traditional banks in 2017 alone, while putting over $72 million into savings accounts with help from Chime’s automated savings tools.

Moven to receive funding from SoftBank, plans to buy bank (American Banker), Rated: AAA

Moven, the mobile-first “neobank” founded by Brett King in 2011, is getting a multi-million dollar infusion from the Japanese company SBI Group, owner of SoftBank. At the same time, Moven says it is pursuing the acquisition of a bank.

SBI Group will hold one of the six seats on Moven’s board, and the two companies will set up a joint venture in Japan.

At the same time, Moven is making major changes to its overall business, including splitting the company in two.

On one side will be the software provider that already develops digital banking software for TD Bank in Canada and Westpac in New Zealand.

On the other side will be the neobank, which will be called MovenBank.

Is Marcus Going to Launch a Credit Card? (Lend Academy), Rated: A

Ainsley Harris reported in Fast Company today that Goldman Sachs is acquiring the employees who built Final, a credit card startup based in Oakland. Final offered a unique kind of credit card, one that would create a different virtual card number for every merchant, thereby reducing the risk of credit card fraud.

It has been a busy couple of years for Goldman Sachs when it comes to their consumer facing business. This latest deal follows a long list of acquisitions for Goldman recently:

  1. Acquisition of GE Capital Bank – this jumpstarted GS Bank giving it a huge deposit base.
  2. Acquisition of Honest Dollar – the digital retirement savings app was acquired in March 2016.
  3. Launch of Marcus with debt consolidation loans.
  4. Acquisition of Genesis Capital – not really consumer facing but could add a real estate development arm to the bank.
  5. Bond Street – employees of the online small business lender moved to Goldman Sachs.
  6. Addition of home improvement loans to the Marcus offerings.

Why big financial firms are building robos instead of white labeling (Tearsheet), Rated: A

In November, Wells Fargo launched Intuitive Investor, its digital-human hybrid offering from Wells Fargo Advisors. The following month Morgan Stanley launched Access Investing and JPMorgan Chase launched JPMorgan Digital Investing. Goldman Sachs, Raymond James, YF Financial and ICBC are all currently developing their own.

The start of the robo phenomenon was meant to address small, do-it-yourself investors, said Tom Streiff, special consultant to HBW Partners.

“A lot of these big firms have a lot more small accounts than they’re willing to admit,” he said. “Robos were one answer to that. Now they want to have something that has more of their own mark on it … not just to get the technology but to get the smart people inside.”

Typically, the white label provider will take 15 basis points of the total and leave the rest to the bank for distribution, Saxena said. Pricing from independent players, like Betterment or Wealthfront, is competitive.

SmartBiz Loans Launches AI-powered Digital Advisor Tool for Small Business Owners (Digital Journal), Rated: A

SmartBiz Loans, the SBA loan marketplace and bank-enabling technology platform, today announced the launch of SmartBiz Advisor, the first, AI-driven, online education tool that makes the financial insights and analysis provided by a typical CFO available to small businesses at no cost.

SmartBiz Advisor is an intelligent online platform that allows small business owners to easily and quickly learn how banks typically evaluate their business on key criteria before applying for a loan.

The Future of Real Estate, Part 2: A Crowdfunding Revolution? (GuruFocus), Rated: A

A well-managed crowdfunding platform should provide a range of deals, after having done sufficient due diligence itself so as to not place potential investors in financial jeopardy, and itself in legal jeopardy. When dealing in investment assets, whether equity or real estate, investors are still expected to be sophisticated and have the means to weather losses that are part and parcel with any private investment deal.

A growing cast of players

Interestingly, even as equity crowdfunding in startup companies has been slow to take off (Indiegogo’s platform raised just $7.53 million in equity investments during its first year of operation), real estate crowdfunding platforms have been popping up like weeds. RealtyMogul.com, for example, has an investor community of 150,000 people that have invested $318 million through its platform since it went live in 2012. The crowdfunder claims to have returned $70 million to investors thus far. RealtyShares, founded in 2013, has also posted big numbers, with platform users reportedly investing $700 million across more than a thousand deals.

A new breed of of private REIT

Private REITs are obviously opaque and potentially dangerous, but the crowdfunding platform has forged ahead all the same. Perhaps, with their interactive dashboards and high levels of investor transparency, these crowdfunded REITs will be able to correct some of the ills of their less technologically sophisticated forebears.

This College Grad Found an Affordable Way to Start Investing in Real Estate (The Penny Hoarder), Rated: A

The Fundrise Starter Portfolio would invest her money into two portfolios that support private real estate around the United States. It would do all the heavy lifting for her — and play landlord on her behalf.

She didn’t need to have hundreds of thousands of dollars stashed away, either. She could get started with a minimum investment of just $500.

Fundrise lists an average annualized return of 11.44% in 2017. Investors pay 1% in annual fees — a 0.85% asset-management fee and a 0.15% investment advisory fee.

Breaking down the barriers of real estate investment: A Q&A with Peter Vekselman from WeLend (AtlantaAgent), Rated: A

Q: What sort of problems were you experiencing when it came to financing real estate projects?

The problem is that behind the scenes the money is handled by hedge funds. All of the hedge funds on Wall Street do their own thing and no one knows who they are. So what happens is you have a potential investor and the first problem for them is finding the financing.

Q: How exactly does We Lend work, and how does it help solve some of the problems previously mentioned?

I’ve consolidated and cut deals to put all the hedge funds under one roof, so now investors don’t have to go through this huge undertaking to find the funds. They can came to us, and we can underwrite them and then figure out on the back end the best match.

It’s like LendingTree for the investor world.

Q: What types of projects and people does We Lend work with?

We work with small developers or a mom-and-pop builder that does five properties a year. And we mainly work with residential properties only because there are more residential opportunities than anything else.

In terms of price points, we try to stay as low as $50,000 per project.

On Deck Welcomes Paul Rosen & James Hobson As Two New Senior Vice Presidents (OnDeck), Rated: A

Today, On Deck announced the appointments of Paul Rosen as Senior Vice President of Sales and James Hobson as Senior Vice President of Strategic Partnerships and Platform Solutions.

Santander Consumer USA And AutoFi Team Up To Provide Car Buyers And Dealers With Fast And Easy Online Sales And Financing (PR Newswire), Rated: A

Santander Consumer USA Holdings Inc. (NYSE: SC, or the Company) today announced that it will work with automotive technology leader AutoFi to streamline and simplify the car-buying process for consumers, while giving dealers a robust digital sales channel.

Climb Credit Reveals A Solution To Student Lending Crisis (Climb Credit Email), Rated: A

A few key findings include:

  • The median student saw a 66.7% salary increase
  • For Climb students who have held two different jobs since attending their program, there is a median pay increase of 38.9% from the first to the second job
  • Nearly three out of four students surveyed said they would not have been able to attend their education program if they didn’t have Climb Credit as a financing option

House Approves New Payday Loan With 200 Percent Interest Rate (Indiana Public Media), Rated B

The Indiana House approved legislation Wednesday to create a new type of payday loan – with interest rates of up to 200 percent – that opponents argue amounts to predatory lending.

The legislation creates a loan of between about $600 and $1,500, with a term of up to 12 months.

Consumers warned not to borrow from unlicensed online lenders (International Falls Journal), Rated: B

The Minnesota Commerce Department warns Minnesota consumers not to borrow money from unlicensed lenders that advertise and offer short-term, payday or installment loans through the internet.

United Kingdom

Zopa hits £3bn lending landmark (P2P Finance News), Rated: AAA

ZOPA said that it now has more than 60,000 active investors and more than 300,000 borrowers.

It has now lent out more than £3bn since inception, Zopa said on its website on Wednesday, having lent more than £985m in the past 12 months.

Investors are lending on average £13,000 while the average loan amount is £6,000.

China

Chinese internet users grow to 772 million (Technode), Rated: AAA

China now has 772 million internet users according to a report published by the China Internet Network Information Center (CNNIC) today (in Chinese).

Growth rates of internet users have remained steady. During 2017, a total of 40.74 million new netizens were added with a growth rate of 5.6%. Internet penetration rates have reached 55.8% in China, more than the global average (51.7%) and the average rates for Asia (46.7%).

The number of mobile phone users in China has reached an impressive 753 million. The proportion of internet users using mobile phones rose from 95.1% in 2016 to 97.5% in 2017.

Since the end of 2016, the proportion of internet users that pay with their phones rose from 50.3% to 65.5%.

There was another number that went up at an impressive rate. The number of internet users buying internet financial products in China has reached 129 million, up 30.2% from the same period last year.

Alibaba-backed online lender MYbank owes cost-savings to home-made tech (Reuters), Rated: A

MYbank expects double-digit increases in all growth measures in 2017 due to lower costs enabled by technology, the bank’s president, Huang Hao, said in an interview at his office in Hangzhou, in the eastern province of Zhejiang.

As a result, the cost of approving a small business loan can be as little as 2 yuan, compared to at least 2,000 yuan ($317.97) at a traditional bank, according to data provided by the bank.

European Union

Remarks by Vice-President Dombrovskis at the European Financial Forum 2018 in Dublin (Europa.eu), Rated: AAA

 

Our immediate priority is to complete the Banking Union. For this, we should move in parallel on risk reduction and risk sharing. All elements are on the table. On risk reduction, this includes our November 2016 bank reform package and our ongoing work to reduce Non-Performing Loans. On the risk sharing side, we recently came with ideas on how to unblock negotiations on the European Deposit Insurance Scheme. And we have broad support to finalise the work on the backstop for the Single Resolution Fund. So the time is ripe to move at political level on completing the Banking Union.

The second immediate priority for deepening the EMU is setting up the Capital Markets Union. Deeper capital markets across Europe will increase risk-sharing among private investors and improve the shock-absorption capacity of the economy. In the past three years, we have taken fundamental steps towards deeper and more integrated EU capital markets. Of the 33 actions we announced in 2015, 25 have now been completed.

One strength of Ireland’s financial sector is asset management. As of September last year, Irish fund managers had more than €4.2 trillion assets under management. A true Capital Markets Union would enable Irish fund managers to further benefit from the full scale of the single market. In March of this year, revised rules for the EU venture capital label – EuVECA – will enter into application. Large managers can then run EuVECA funds, providing economies of scale and trusted brands. We have also expanded the range of eligible assets, and decreased the costs associated with cross-border marketing.

We are also looking more broadly at the rules for offering funds across the EU. This market is still predominantly organised along national lines. For example, 70% of the assets under management are held by funds available for sale in only one EU country. The share of alternative investment funds that is marketed in more than three countries is very low – only 3%.

Europe has what it takes to develop a globally competitive Fintech sector. We can rely on our strengths in research and engineering. For example, we have 32 artificial intelligence research institutions in the world top 100, which is more than the US or China. I also see great Fintech potential here in Ireland, with its strong information technology culture.

We will also present a legislative proposal to enable EU-wide crowdfunding and peer-to-peer lending.

The future of finance will not only be digital, it will also have to be green.

• Third, we could boost green investments and loans by introducing a so-called green supporting factor. This could be done at first stage by lowering capital requirements for certain climate-friendly investments, such as energy-efficient mortgages or low-carbon cars. However, this exercise would be delicate. Green does not mean risk-free. Any measures would have to be carefully calibrated, and based on a clear EU classification.

CreditEase Founder, CEO Ning Tang Spoke at the World Economic Forum Annual Meeting 2018 (PR Newswire), Rated: B

CreditEase, a Beijing-based leading financial technology conglomerate specializing in inclusive finance and wealth management, announced that its Founder and CEO, Mr Ning Tang, participated and spoke at the World Economic Forum Annual Meeting 2018 in Davos-Klosters, Switzerland.

Under the central theme of “Creating a Shared Future in a Fractured World”, this year’s meeting has drawn an estimated 2,500 participants, including a record number of heads of state and leaders from politics, business, academia, and civil society.

“Technology has greatly improved access to financial services for Chinese consumers and small businesses in the past decade, and we expect more progress to be made in the SME lending space with the help of FinTech in coming years,” said Mr Tang. “Financial services like angel investing and VC/PE, powered by technology, will bring more high-quality growth to the Chinese economy.”

International

IOU Financial partners with CDE solutions in funding CDE’S network of 26,000 convenience store owners (PR Newswire), Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV: IOU), an online lender to small businesses (IOUFinancial.com), is pleased to announce a strategic partnership with Marietta, GA-based POS solutions provider CDE (CDEsolutions.com).  Through this strategic partnership, CDE’s network of 26,000 convenience store owners nationwide will be able to access IOU’s fast, convenient, non-collateral funding solutions.

Crebit: Blockchain DLT in wave of transforming P2P financing (NewsBTC), Rated: A

Adopting Blockchain and DLT for P2P lending system can facilitate capital mobilization within the financial system through flat-out transfer of monetary values from parties unrestricted by barriers-to-entry. Thus, the potential for P2P lending in support of free international financial flows remains vastly untapped.

Ipsos MORI veracity Index shows 75% of investors complain about banks data provision, but rather P2P investment groups maintain a credible and transparent operation.

Crebit is a blockchain-empowered network provider that offers global microfinance lending collateralized by crypto assets, based on the artificial intelligence credit scoring system. This microfinancing solution leverages blockchain technology to finance through top cryptocurrencies such as Bitcoin, Ethereum and Ripple against up to 80% of investors collateralized crypto assets value. Crebit leads the way into crypto financing by building P2P lending agreements on smart contracts in the secured and decentralized Ethereum blockchain. The platform matches funding gaps for crypto holders, traders as well as multiple exchanges and transaction solutions. Crebit aims to provide businesses and individuals a decentralized credit scoring database for innovative and trustless transaction solutions unrestricted by geographical boundaries.

Australia

Trial by fire in an untested market (CMO.com.au), Rated: AAA

But this is precisely why Rebecca James, Prospa’s new chief marketing and enterprise officer, took the job almost five months ago.

“In just five years, the team has lent over $500m. But there are 2.1 million small businesses in Australia, and over half need cashflow support to take advantage of opportunities, to grow, or to cover an unexpected cost. My hope is to take the Prospa proposition and meet the growing needs of this audience. We’re just getting started.”

Launched six years ago, Prospa is now Australia’s number one online lender for small business, providing loans to more than 12,000 small businesses across the country. In November, it placed second in the AFRFast 100 for 2017 thanks to a 239 per cent average revenue growth since 2013-14. Last year, Prospa secured over $50m in equity and debt funding, and doubled the size of its loan book.

Online Cash Flow Loans Australia Announces Unsecured Cash Flows Loans Up To $ 500k (PRWire), Rated: A

Online Cash Flow Loans is a fast emerging player in the online cash flow loans marketplace. The organization is an arm of Magnolia Finance that specializes in offering low cost business loans to small businesses in Australia.

These cash flow loans are tailored to meet the growing business finance needs of businesses operating in the hospitality, retail, construction, medical and agribusiness. Basically any small business operating in Australian and in need of unsecured business loans can apply for business loan online on the company website.

Loan terms from 3 to 24 months
Same day funding
Flexible repayment options
Redraw facility available
India

Budget Reaction Rajat Gandhi, Founder & CEO, Faircent. com (Faircent Email), Rated: AAA

Hon. Finance minister budget speech reflects the government’s intent to increase the credit access for the MSME sector and women entrepreneurs under MUDRA scheme. P2P lending is using technology and new-age data and diligently working towards taking organised credit to the non and under-banked segments of the Indian economy. This is an opportunity for the government to directly invest or co-fund through registered P2P Lending Platforms and ensure credit access for MSMEs, New-To-Credit as well as female entrepreneurs. P2P lending is an asset class ensuring flow of investments from those with surplus to those in need. Hence it’s important that the lenders are supported through tax incentives. We look forward to working with the govt towards common goal of financial inclusion.

The popular FinTech platforms serving MSMEs in India (KNN India), Rated: A

Keeping in view the credit crunch faced by the micro, small and medium enterprises (MSME) sector in India due to various reasons, new FinTech platforms are coming up to improve loan disbursal to the sector.

According to a media report, there are four popular FinTech platforms that are helping in robust loan disbursal – CreditMantri, Aye Finance, CoinTribe and Faircent.

P2P Lending Set to Explode in 2018 And Beyond (CXO Today), Rated: B

RBI’s much awaited official guidelines for Peer to Peer (P2P) lending platforms to bring them into the ambit of non-banking financial companies (NBFCs) is set to boost online lending. It is fast emerging as an investment option for retail lenders.

Asia

MAS Regulated Peer to Peer Lender Crowd Genie Announces Initial Coin Offering (Crowdfund Insider), Rated: AAA

Crowd Genie Financial Services Pte Ltd, regulated by the Monetary Authority of Singapore (MAS), has announced an initial coin offering (ICO) via their related entity CGSPV Pte. Ltd. The peer to peer lender states that it intends on issuing 60 million Crowd Genie Coins, or CGCoins, for a soft cap of USD $5 million. The public sale commences today and 400 CGCoins may be purchased for a single ETH. Bonus CGCOINs, between an additional 5% and 25%, will be given to early buyers as an incentive.

Coincheck’s recent hack could mean big changes in the crypto space (Business Insider), Rated: AAA

Japanese cryptocurrency exchange Coincheck revealed on Friday that its 

Source: Business Insider

Online lenders join gold rush into SE Asia (Ecns.cn), Rated: A

Chinese online peer-to-peer (P2P) lending companies have been rushing into Southeast Asian countries in recent months to cash in on untapped and lightly regulated markets that feature huge potential, as growth in the domestic market slows amid tightening regulations.

While much of Southeast Asia offers a promising future for these lenders given its huge population and underdeveloped financial services industry, most of the Chinese companies are betting on short-term gains rather than long-term growth, an industry expert noted on Wednesday.

Over 50 Chinese online lenders have launched overseas operations, with Southeast Asian countries such as Indonesia and Cambodia being the top destinations, the 21st Century Business Herald reported on Wednesday.

In Indonesia alone, there are more than 50 Chinese consumer lending apps at the moment, up from 30 just a month ago, the report said.

Here are the new services launched by startups in Indonesia this week (e27), Rated: A

Peer-to-peer (P2P) lending platform Investree on Tuesday officially launched a sharia-based P2P lending programme.

The programme has been tested since November 2017. The startup claied that by January it has managed to channel IDR2.7 billion (US$200,000) worth of loan from 1,340 lenders to 313 borrowers.

Bermuda

Peer-to-Peer Lending & Equity Crowdfunding (Bernews), Rated: AAA

A Bermudian expert on information technology, asset and risk management tools is today celebrating the global launch of her book on peer-to-peer lending and the securities crowd funding industry.

“The book, entitled ‘Peer-to-Peer Lending and Equity Crowdfunding: A Guide to the New Capital Markets for Job Creators, Investors and Entrepreneurs,’ highlights the inequality gap is widening and persists worldwide,” a spokesperson said.

“The book not only describes how debt and equity crowdfunding works but also explains investment approaches, secondary markets, governance and compliance, transparency, and risk models that are necessary for investors to make informed decisions.

The book is available here.

 

Authors:

George Popescu
Allen Taylor