Friday April 20 2018, Daily News Digest

Marketplace Lending Securitization League Table

News Comments Today’s main news: OnDeck closes $100M credit facility. LendingClub expected to announce quarterly sales of $152.18M. Affirm expands to cover smaller purchases. Funding Circle lends 80M GBP through IFISA. China Construction Bank opens robot-only branch. Today’s main analysis: Originator league table. UK P2P lending nears 9B GBP. Today’s thought-provoking articles: Top fintech investors by stage. Interview with […]

Marketplace Lending Securitization League Table

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United States

United Kingdom

China

Australia

Other

News Summary

United States

OnDeck Announces New 0 Million Revolving Credit Facility (PR Newswire) Rated: AAA

OnDeck announced today the closing of a $100 million asset-backed revolving credit facility with Pioneers Gate LLC, a lending vehicle of a leading life insurance company managed by 20 Gates Management. The new facility provides the longest revolving funding period of any of OnDeck’s funding sources, and the lowest interest margin of any of OnDeck’s variable-rate funding facilities to date.

Lending Club (LC) Expected to Announce Quarterly Sales of 2.18 Million (The Lincolnian Online) Rated: AAA

Wall Street brokerages expect that Lending Club (NYSE:LC) will announce sales of $152.18 million for the current fiscal quarter, according to Zacks. Three analysts have provided estimates for Lending Club’s earnings. The lowest sales estimate is $150.00 million and the highest is $154.53 million. Lending Club posted sales of $124.48 million during the same quarter last year, which suggests a positive year-over-year growth rate of 22.3%. The firm is scheduled to announce its next earnings results after the market closes on Tuesday, May 8th.

On average, analysts expect that Lending Club will report full-year sales of $688.45 million for the current financial year, with estimates ranging from $680.00 million to $693.30 million. For the next fiscal year, analysts expect that the company will post sales of $803.61 million per share, with estimates ranging from $773.00 million to $858.31 million. Zacks Investment Research’s sales averages are an average based on a survey of sell-side research analysts that cover Lending Club.

Affirm Expands Offering to Cover Smaller Purchases with Simple, Transparent Payments (The Virginian Pilot) Rated: AAA

Affirm, Inc., the company founded by entrepreneur Max Levchin to provide fair and honest financial products, today announced Affirm will partner with brands and retailers to offer shoppers a simple, no-interest payment option on purchases of any size via three easy, monthly payments. Now, Affirm’s financial products are available for purchases of any size, marking an expansion for the company. Affirm will continue to offer shoppers the option to buy now and make simple, transparent payments over time for purchases up to thousands of dollars, with terms ranging from 3 to 36 months.

The expansion of Affirm’s capabilities will be especially valuable to fashion and apparel brands and retailers that want to offer a quick and convenient payment method that better aligns with shoppers’ cash flows and are more transparent than traditional credit.

PeerIQ Releases Their Marketplace Lending Securitization Tracker For Q1 2018 (Lend Academy) Rated: AAA

We see another robust quarter for marketplace lending securitizations with $4.3 billion in new deals.

SoFi lead the way again with $2.6 billion or around 60% of the market with two huge student loan deals and a consumer loan deal.

Online Lending in Risk On Mode: Unprecedented 21 Months of Non Stop Securitization Issuance (Crowdfubd Insider) Rated: A

The most recent report stated that PeerIQ has observed an “unprecedented 21 months of non-stop issuance. Markets remain in a “risk-on” mode and MPL investor appetite continues to grow. This is a very bullish statement for online lenders coming at a time when interest rates are rising as is competition in the sector is increasing.

Top Seed-Stage FinTech Investors (Crunchbase News) Rated: AAA

Crunchbase News recently took a deep dive into the U.S. FinTech industry’s Q1 2018 venture activity. We found that deal volume in 2017 amounted to more than $7 billion in venture funding for seed, early, and late-stage startups. As 2018 came to a head, the number of deals in the space declined slightly, while venture capital dollars increased by 37 percent quarter over quarter.

The firm has made more than 690 investments in technology companies, with lead investments in 24 startups. Plug and Play also made an early bet on PayPal, now a public company with a market cap over $90 billion. California-based Hippo Insurance picked up an investment by Plug and Play in its $25 million Series B in January 2018. Hippo Insurance was coincidentally also mentioned in our Crunchbase News analysis of startups that have weird names.

Source: Crunchbase News

Defi Solutions, a SaaS platform for lenders, was the latest growth-stage FinTech company to score an investment by the firm. Bain Capital Ventures was the sole investor in the startup’s $55 million Series C in January 2018.

Source: Crunchbase News

RealtyMogul’s MogulREIT I Closes Senior Debt Investment in San Francisco (The Virginian Pilot) Rated: A

MogulREIT I today announced that it has completed an investment in a $6.69 million mixed use building in San Francisco, California, its 15 th acquisition since inception. MogulREIT I was designed to offer investors potential cash flow through managing a diversified portfolio of commercial real estate investments, including, but not limited to medical office buildings, multifamily apartment complexes, office spaces and retail shopping centers.

Ascentium Capital Surpasses $ 4 Billion in Originations (deBanked) Rated: A

Texas-based lender Ascentium Capital announced last week that it had surpassed $4 billion in origination volume since the company was founded in 2011.

The other business channel is a direct channel where Ascentium makes direct loans to small and medium sized businesses of up to $250,000. Depping told deBanked that the company’s direct channel makes up about 30 to 40 percent of its business.

Q&A: Renaud Laplanche on Starting Upgrade and Offering New Credit Products to Consumers (LendEDU) Rated: AAA

Q: It looks like you co-founded Upgrade with a total of 6 co-founders. How has starting Upgrade been unique from a team building perspective?

A: Over the last year we’ve on-boarded more than 250 team members across our three offices – San Francisco, California headquarters, Phoenix, Arizona operations center and Montreal, Quebec, Canada development center. It has been an incredible year, especially looking back at the team we’ve formed.

Q: How did the challenges of starting LendingClub compare to the unique challenges of starting Upgrade?

A: The challenges are quite different because the launch of each company stands about decade apart, so the landscape is very different.

Q: Beyond credit monitoring, how is Upgrade helping to educate consumers about their finances?

A: We believe helping people get smarter about credit can enable them to access more affordable credit in the future, and that’s why we launched Credit Health. Credit Health comprises of a range of tools that we think can help people understand their credit profile and what they can do to improve it. In addition to credit monitoring and alerts we offer Credit Health Insights – a library of educational articles and videos. Credit Health also features a credit simulator that gives you customized advice and tips tailored to your unique credit history. We haven’t seen other credit monitoring platforms offer this the same way we do.

Blockchain Startup Backed By Billionaire Bitcoin Bull Peter Thiel Gets $ 28 Million Investment (BTC Manager) Rated: A

Harbor, a blockchain startup backed by billionaire bitcoin bull Peter Thiel, has received an additional $28 million investment that it hopes will make blockchain real-estate investing a reality.

This latest cash infusion was led by Thiel’s Founders Fund, venture-capital fund Andreessen Horowitz, and cryptocurrency investment firms Pantera Capital and Craft Ventures. The San Francisco-based Harbor secured $10 million in Series A financing in February 2018, raising its total investments to $40 million.

LendingClub vs. Prosper Review: Here’s What You Need to Know (Student Loan Hero) Rated: A

In recent years, there’s been rising interest in peer-to-peer (P2P) lending. A report from Research and Markets estimates that P2P lending could grow by 53.06% between 2016 and 2020, while Transparency Market Research projects that the global P2P market will be worth $897.85 billion by 2024.

Source: Student Loan Hero

Need an Alternative to a Capital One Personal Loan? Here’s Where to Look (Student Loan Hero) Rated: B

For example, if you’re looking for a small loan — say, around $500 — you should skip online lenders. Most don’t provide loans for less than $1,000 or $2,000. Also remember that your credit score is vital to the approval process, so if you can’t get one on your own, consider getting a cosigner.

Source: Student Loan Hero

Why digital banks are welcoming CRA revamp (American Banker) Rated: A

To get a sense of why Ally Bank wants the Community Reinvestment Act rewritten, look at its situation in Utah.

Since it has no retail branches, the $137 billion-asset Ally is assessed for CRA compliance for its lending in Salt Lake City, where its bank is headquartered. But Ally gets no CRA credit for lending in Detroit, where its holding company is based and where nearly four in 10 households are living in poverty.

Quarles suggests new Fed approach to ILCs (American Banker) Rated: B

The Federal Reserve Board’s chief regulator suggested he was open to companies receiving industrial loan company charters, a sign that the central bank’s view on ILCs may be evolving.

“I don’t think of [ILCs] as a particularly special, excessively problematic case,” said Federal Reserve Vice Chairman for Supervision Randal Quarles at an International Monetary Fund forum Wednesday.

Education Loan Finance Receives AAA Ratings on Inaugural Securitization Deal (Business Wire) Rated: A

Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the close of its inaugural securitization of refinanced student loans. Education Loan Finance is the first student loan refinancing lender to receive the AAA rating from both Standard & Poor’s and DBRS on its senior notes in its first securitization transaction comprised of this type of education loan product.

The $200 million transaction was comprised of $24.784 million of variable rate Class A-1 Notes, $158.65 million of fixed rate Class A-2 Notes, and $16.566 million of Class B Notes. The Class B Notes are rated A by DBRS. Citi and Credit Suisse served as joint lead managers on the transaction.

The process of elimination in multiple-offer scenarios (The Ledger) Rated: A

If a house is listed for $400,000 and someone presents a cash offer for $380,000, that will not be favored over an offer for $400,000 from a person getting an 80 percent loan.

For example, a 75 percent loan from an online lender with no ties to the Nashville area could be trumped by a 100 percent loan from a local, well-known lender that provides physician loans.

Boulder solar power finance firm lands big bucks (like $ 112M of them) (Denver Business Journal) Rated: A

Boulder-based Wunder Capital, which lends money for commercial-scale solar power projects, said Wednesday it’s raised $112 million in equity and debt financing to grow the company.

The Series B financing round was led by New York City investment firm Cyrus Capital Partners, which manages $4 billion in investments. Existing investors also were involved in the round, including Techstars Ventures which led the company’s Series A round of funding in March 2016.

United Kingdom

£80m lent through Funding Circle Isa (Bridging & Commercial) Rated: AAA

Funding Circle has announced that approximately £80m has already been lent to thousands of businesses through its Innovative Finance Isa (IFIsa).

The Isa offers an estimated tax-free projected return of 7.2% and is a flexi Isa which allows investors to take money out of their account and put it back later in the tax year without losing their tax-free entitlement.

There is an initial minimum investment of £1,000 and investors will be able to transfer exiting Isas into the Funding Circle Isa later this year.

 

 

P2PFA: UK Peer to Peer Lending Industry Nears £9 Billion in Total Lending (Crowdfund Insider) Rated: AAA

The UK Peer to Peer Finance Association (P2PFA) has released Q1 data for its member platforms. According to the industry association, P2P lending is nearing £9 billion in loan originations having provided finance for approximately 50,000 business and 221,000 individuals. Total investors stand at around 150,000.

 

Source: Crowdfund Insider

How Starling Bank is taking cues from Amazon (Tearsheet) Rated: AAA

And digital-only banks with a license, like Monzo, Starling, Tandem and OakNorth, are growing market share.

What are the biggest problems with banking today?
Banking as it is today sucks — it’s hard to easily manage account openings, and [until recently] to send payments to friends. That’s why Venmo has been so successful, but this should be a thing banks do.  You shouldn’t have to read an FAQ to use the mobile app or set up a bill pay.

LendInvest Calls Upon UK Government to Improve Finance Access for Property SMEs (Crowdfund Insider) Rated: A

LendInvest reported that in a new report entitled Putting Finance First: the alternative route to funding Britain’s SME housebuilders, the online lender recognizes that while the government is trying to help improve the outlook for property SMEs, but then argues that not enough is being done to put rhetoric into action. The report focuses on three proposed initiatives that combine existing government-backed funding mechanisms with the experience and expertise of alternative lenders, like LendInvest, to speed up and increase the supply of finance to property SME businesses:

  • Homes England: Should deploy its £2.5 billion Home Building Fund through funding lines agreed with alternative lenders.
  • Local authorities: Should co-invest with alternative lenders in local developments, utilizing the Public Works Loan Board mechanism to provide discounted capital for SMEs.
  • The British Business Bank: Should appoint more alternative lenders to use the ENABLE Guarantee programme to underwrite property investment and development loans.

Malta-Based Decentralized Ventures to Spearhead Crypto Island’s Blockchain Services Provision (Blockchain News) Rated: B

Blockchain services provider Decentralized Ventures on Tuesday announced its official launch, with the objective of bolstering Malta’s crypto communities.

A partnership between initial coin offering (ICO) specialist TokenKey and token research and Blockchain consultancy Strategic Coin Inc., Decentralised Ventures is designed to support the Maltese government’s plans to create the world’s first fully regulated market for ICOs, DLT and virtual currencies, a statement said.

 

JustUs launches IFIsa to support ethical housing scheme (Bridging & Commercial) Rated: B

The IFIsa aims to raise £367,500 and will offer a return of up to 6.5% to investors.

JustUs will provide a bridging loan to Mersten for up to 50% of the property’s value to fund the renovation.

China

 

China Construction Bank opens robot-run branch (Fintech Futures) Rated: AAA

China Construction Bank (CCB) has opened a branch in Shanghai run solely on the power of pure technology.

According to the South China Morning Post (SCMP), the branch has no human staff and instead uses facial recognition, artificial intelligence (AI) and virtual reality (VR) to provide the bank services.

SCMP says it is hyped as a first for the Chinese banking industry, and the Beijing-based bank says it has installed 1,600 smart machines at its 360 branches in the city to ramp up its appeal to tech-savvy customers and trim staff costs.

CreditEase’s Hou outlines allocation outlook (Asian Investor) Rated: A

Beijing-based CreditEase, a peer-to-peer P2P lending platform and wealth management platform, has been busy building its roster of mutual fund, trust and insurance products.

European Union

iZettle squares up to Square with e-commerce platform launch (Fintech Futures) Rated: A

Swedish mobile payments firm iZettle is taking on Square with the launch of its new e-commerce platform that will allow merchants to sell in-store and online.

Called iZettle E-commerce, it lets small business owners set up and customise a new webshop or start selling across channels online, including social media, blogs and existing websites.

International

Digital banking’s key trends: Demand, competition, mobile on the rise (American Banker) Rated: AAA

Two global studies — a study of 150,000 consumers polled by Gallup for the World Bank for its Global Findex Database, and a survey of 5,200 consumers by the tech giant Oracle — found complementary trends in the use and adoption of digital banking.

For example, 60% of customers globally want to open a bank account online, according to Oracle’s survey.

Many are already there: Sixty-seven percent of customers globally are on digital banking platforms now, according to Oracle; the World Bank reports that 515 million customers worldwide opened a banking account through a mobile money provider in the last three years.

 

More Than Half Of Cards Issued Globally Were EMV-Enabled (PYMNTS) Rated: A

Data from EMVCo shows that 54.6 percent of all cards issued globally by the end of 2017 were EMV-enabled.

In addition, the number of EMV payment cards in circulation around the world increased by 1 billion over the previous 12 months — to a total of 7.1 billion.

“Both EMV chip card issuance and EMV chip transactions surpassing 50 percent globally is testament to the increasing maturity of the worldwide infrastructure, and [is] a significant milestone for the payments community,” EMVCo Executive Committee Chair Jack Pan commented.

 

Australia

Australia’s top bank says it charged dead clients for advice (CNN) Rated: AAA

Australia’s top bank has admitted to charging fees to clients it knew had died years previously.

Commonwealth Bank of Australia (CBAUF) told a government inquiry Thursday that the practice of billing deceased customers for financial advice stretched back years. In one instance, an adviser at the bank’s financial planning business was collecting fees from a client more than a decade after they had died.

The revelations emerged as part of a Royal Commission, or public inquiry, into malpractice in Australia’s financial services industry.

One winner from the banking royal commission (The Australian) Rated: B

The peer-to-peer lending space may be a major beneficiary of the poor practice scandals coming out of the Royal Commission, according to one non-bank lender.

ME hikes home loan interest rates: does this mark the end of super low rates? (MOZO) Rated: A

Online lender ME has announced it is increasing home loan interest rates across its variable mortgage range effective today, citing increased funding costs as the reason – and it’s not the first to do so.

ME hiked its standard variable rate for existing owner-occupier principal-and-interest borrowers with an 80% LVR by 6 basis points, bringing it to 5.09% p.a. (5.11% comparison rate).

Existing investor principal-and-interest borrowers were hit with a bigger increase of 11 basis points, while interest-only borrowers saw the biggest increase of 16 basis points.

Source: MOZO
Asia

 

High investor FOMO about P2P lending in SE Asia: Funding Societies co-founder Kelvin Teo (Deal Street Asia) Rated: AAA

Your Series B round is likely the largest for a P2P lender in the region. Is that a measure of how strong the investor interest in this space and the potential for the sector in Southeast Asia?

P2P lending is a promising sector in Southeast Asia. We see strong investor interest, but perhaps too much, especially for emerging markets like Indonesia where the fear-of-missing-out (FOMO) is high. SME lending is a technical and a very localized business, and Southeast Asia apparently is not easily understood. We did not realize the significance of them until we started speaking to investors for Series B. In all candour, it was slightly painful to interact with investors who do not know Southeast Asia and/ or lending business.

Is $25 million the amount that you were looking to raise? 

We have a trust-based relationship with our shareholders. Our early discussion with our Series A lead investor Sequoia was to raise US$ 10M – 15M.

Alternative investment opportunities in Việt Nam (Viet Nam News) Rated: A

Access to and use of formal financial services is low in Việt Nam compared with other countries in the region, with only 31 per cent of all adults having formal bank accounts in 2016, according to the World Bank.

In 2016, 14.6 per cent of Vietnamese had saved money with a formal financial institution, 18.4 per cent had a loan with a formal financial institution, and only 26.5 per cent had access to a debit card. Interestingly, about 30 per cent of adults borrowed from friends or family in 2016 in Việt Nam, against 18.4 per cent who have borrowed from a financial institution.

Latin America

Creditas investment a Brazilian first for Santander InnoVentures (Bankless Times) Rated: AAA

Santander InnoVentures, the fintech venture capital fund of Santander Group, announced today an investment in the startup Creditas, a Brazilian secured lending platform. This is Santander InnoVentures’ first investment in Brazil and second in Latin America.

Creditas also announced today an increase of its Series-C funding round to $55 million with the addition of Santander InnoVentures and Amadeus Capital Partners. The round was led by Vostok Emerging Finance (VEF), a company focused on early and growth stage fintech companies across emerging and frontier markets, based in Sweden. Current investors also participated in the round, including Kaszek Ventures, Quona Capital, QED Investors, International Finance Corporation and Naspers Fintech.

Authors:

George Popescu
Allen Taylor

Tuesday April 10 2018, Daily News Digest

Tuesday April 10 2018, Daily News Digest

News Comments Today’s main news: Prime Meridian announces new opportunities fund. TransUnion launches startup credit kit. SoFi hires Goldman head of mortgage securitization as CFO. Upgrade intros new personal credit line. The Axiom Group ready to invest $50M into charge-off portfolios. S. Korean P2P loans increase 10.3% in March. Today’s main analysis: The highs and lows of Bank Negara’s 2017 […]

Tuesday April 10 2018, Daily News Digest

News Comments

United States

United Kingdom

International

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News Summary

United States

Prime Meridian Capital Management Announces New Fund Launch: The Prime Meridian Special Opportunities Fund (Benzinga), Rated: AAA

Prime Meridian Capital Management (PMCM) a Registered Investment Advisor (RIA) specializing in marketplace lending strategies across three alternative credit verticals in four funds, today introduced the Special Opportunities Fund.

The new fund, due to launch in the second quarter 2018, will invest in multiple high yielding alternative credit verticals including litigation finance, life settlements, targeted high yielding, niche real estate, small business, and consumer loans.

TransUnion Boosts Entrepreneurial Innovation with New Startup Credit Kit (Investors Hub), Rated: AAA

To meet the needs of startups and their investors, TransUnion (NYSE:TRU) today launched the Startup Credit Kit at LendIt Fintech USA 2018, giving new companies faster access to cutting-edge alternative and trended credit and fraud prevention data.

With TransUnion’s Startup Credit Kit, new businesses can more quickly gain access to depersonalized consumer credit data to better explore the market for untapped opportunities. It also helps new businesses determine the viability of their products by analyzing real-world depersonalized consumer credit data. This allows startups to focus their resources on high-potential market segments and product opportunities while allowing them to prove their concept to raise funding in the early stages of the startup lifecycle.

SoFi hires former Goldman Sachs head of mortgage securitization as new CFO (Housing Wire), Rated: AAA

Now, it looks like SoFi may be making a bigger move into securitizations by hiring the former head of mortgage securitization at Goldman Sachs as its new chief financial officer.

SoFi announced Monday that it named Michelle Gill as the company’s new CFO.

Gill comes to SoFi from TPG Sixth Street Partners, a credit firm. Gill joined TPG last yearafter a lengthy term at Goldman Sachs.

Gill spent 14 years at Goldman Sachs, eventually serving as a partner and co-heading the firm’s structured finance business.

Lending Club Ex-CEO Is Staging A Comeback With New Fintech Startup (Forbes), Rated: AAA

Online lending startup Upgrade, led by cofounder and CEO Renaud Laplanche, announced that it’s now initiating $100 million in personal loans a month, with an average loan size of about $10,000. The one-year-old company has reached $60 million in annualized revenue, Laplanche says, and by the end of 2018, he expects to hit a $100 million revenue run-rate and become profitable.

Upgrade also announced a new product called Personal Credit Line, a hybrid of a personal loan and credit card. Consumers can get approved for up to $50,000 in credit, and they can draw down on the line as needed, paying interest only on what they’ve borrowed. The credit line has a fixed length of 12 to 60 months and a fixed interest rate, and it forces consumers to pay part of the loan principal every month.

Online lender touts new personal credit line as HELOC alternative (American Banker), Rated: A

The first online lending firm Renaud Laplanche founded, LendingClub, targeted consumers with hefty credit card balances, offering them the opportunity to refinance at a lower interest rate.

In his latest venture, Laplanche hopes to lure customers before they rack up big credit card bills. Upgrade, the San Francisco-based online lender that he founded in August 2016, is rolling out a new product that is designed for folks who are anticipating big expenses but are not sure exactly how much they will need to spend or when.

THE AXIOM GROUP ANNOUNCES $ 50M IN FUNDING AVAILABLE TO PURCHASE CHARGE OFF PORTFOLIOS (Lendit), Rated: AAA

The Axiom Group announced today at LendIt Fintech USA that it has obtained $50M in capital to finance the purchase of charge off portfolios with a focus on consumer loans and credit cards, specifically in the FinTech lending space.

This increase in capital will allow The Axiom Group to pursue large portfolios and monetize those portfolios immediately for the lender/seller partners. By selling bad debt portfolios, FinTech companies can utilize the income for further lending, as well as reduce their risk associated with the challenges of collecting on charged off accounts.

Fintech lenders will struggle to regain mojo alone (Nasdaq), Rated: A

Some 13 months later LendingClub, which Sanborn has run since a mis-selling scandal cost predecessor Renaud Laplanche his job in 2016, remains just a lender. Its stock has lost around a third of its value in the past year.

On Deck’s shares are effectively flat over the same period. But boss Noah Breslow had to slash costs last year after credit losses. He now plans to boost revenue by expanding into portfolio management and loss mitigation, and finding more bank partnerships.

Privately held Social Finance has done the most to diversify, adding consumer and mortgage loans as well wealth management to student-loan refinancing.

SoFi is now the biggest player. It extended $12 billion of new loans last year, 50 percent more than erstwhile leader LendingClub, and its adjusted EBITDA is two-thirds higher at $126 million, according to the Wall Street Journal. Yet each pales in comparison to JPMorgan’s retail unit, which lends around 10 times as much and enjoys lower funding costs thanks to customer deposits.

Consumer Lending Platform Best Egg Exceeds $ 5 billion & Celebrates Fourth Birthday (Crowdfund Insider), Rated: A

Marlette Funding, LLC, the owner of consumer lending platform Best Egg, announced on Monday the year-end results and key accomplishments for first quarter 2017. According to Marlette Funding, during the past year, Best Egg experienced origination growth of 66%, significantly reduced its customer acquisition costs, and ended 2017 with three straight quarters of net income positive on a GAAP basis. Best Egg has reportedly exceeded $5 billion of prime loans and celebrated its fourth birthday. 

Launched in 2014, Marlette Funding, through its consumer brand Best Egg, describes itself as a financial technology provider on a mission to find better ways to make money accessible to allow people to “enjoy life.”

Elevate to Release First Quarter 2018 Earnings on Monday, April 30, 2018 (Business Wire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it will release its first quarter 2018 financial results after the market closes on Monday, April 30, 2018. Ken Rees, Chief Executive Officer, and Chris Lutes, Chief Financial Officer, will also host a conference call on the day of the release (April 30, 2018) at 5:00 pm ET to discuss Elevate’s financial results.

 

How Blockchain is Changing the Mortgage Game (Investopedia), Rated: A

While blockchain doesn’t offer a perfect remedy to the problems afflicting the industry, it does provide a model that minimizes some of them. The first major improvement the technology brings is transparency. Blockchain’s distributed ledger technology (DLT) provides two major upgrades to the current model—it decentralizes the storage of information, and it makes all transactions immediately available across all nodes of the chain. The first upgrade means that companies and lenders can no longer manipulate information or engage in shadowy practices with data, as it is shared across an entire network and not under their exclusive supervision.

Nav Launches First-of-Its-Kind Cash Flow Analysis Tool for Small Business Owners (Lendit), Rated: A

Nav, a free platform that helps small business owners build, protect and leverage their financial data, announced the launch of Business Banking Health Check, a feature to help small business owners make more informed decisions on their cash flow. Nav is the only place entrepreneurs can access their personal and business credit scores, along with cash flow insights to provide greater transparency into how lenders view their
creditworthiness and enable greater access to capital.

According to Pepperdine’s Capital Markets Report, insufficient credit profiles and cash flow are two of the primary reasons banks reject business loan applications. Nav’s platform uses these data sets to help business owners manage their fundability, while also doing legwork for lenders by matching its small business customers to their most-qualified funding options.

LENDIO ANNOUNCES LENDER TURNDOWN PROGRAM (Lendit), Rated: A

Lendio announced today at LendIt Fintech USA that it has facilitated nearly $60 million in loans through its lender turndown program.

Lendio’s lender turndown program allows lending partners to offer a marketplace of loan options to customers that do not fit the lender’s credit box; this allows lenders to turn a decline response into a potential loan offer for the small business owner.

LENDR ANNOUNCES THE LAUNCH OF ITS BUSINESS DEBIT CARD (Lendit), Rated: A

Lendr Online, LLC. announced today at LendIt Fintech USA that it is has launched a new business debit card product to service its growing client base. The ability to fund business owners in real-time via an instant access virtual Mastercard followed up with a traditional plastic card utilizing the latest in EMV chip security, will further enhance its brand and solidify Lendr’s position as a premier financial services firm.

Ocrolus Secures $ 4M in Series A Funding (Finsmes), Rated: A

Ocrolus, a New York City-based provider of solutions to analyze financial documents, raised $4m in Series A funding.

The round was led by Bullpen Capital with participation from QED Investors, Laconia Capital Group, ValueStream Ventures, RiverPark Ventures, Sam Hodges (co-founder, Funding Circle), Vince Passione (CEO, LendKey), Ram Ahluwalia (CEO, PeerIQ), Bill King (former head of securitization, JP Morgan), Hugh Nguyen (CEO, ClearServe) and Tanya Barnes (managing director, Golden Seeds), among others. In conjunction with the funding, David Arcara of Laconia Capital Group and Nick Adams of Differential Ventures will be joining Ocrolus as board members. Paul Martino of Bullpen Capital, Amias Gerety of QED Investors and Karl Antle of ValueStream Ventures will be board observers.

 

THINK WALLET REVEALS SCALABLE SOLUTION TO REDUCE FUNDING COST OF PERSONAL LOANS (Lendit), Rated: A

ThinkWallet.com announced today at LendIt Fintech USA that it has solved the problem many lenders currently face: Overspending to attract leads that can’t qualify for their personal loan products.

Nelnet Expands Loan Servicing Offerings To Meet Demands Of Fintech Lenders (PR Newswire), Rated: A

Nelnet (NYSE: NNI) is bringing a new servicing option to Fintech lending platforms. Nelnet Loan Servicing will leverage the experience, scale, and personnel of its existing servicing business with technology enhancements to meet the unique needs of Fintech companies with primary and backup servicing.

 

General Atlantic in talks on a deal with Brazil’s online lender Geru (Reuters), Rated: B

U.S. investment firm General Atlantic is in talks to buy a minority stake in closely held Brazilian online lending startup Geru Tecnologia e Serviços SA, according to two sources with knowledge of the matter.

Other investors may join General Atlantic, the sources said, adding that Geru’s partners have spent the last few weeks visiting funds in San Francisco and New York to raise about $50 million.

 

 

 

 

IDVALIDATION SHOWCASES GOVERNMENTAL VERIFICATION SOLUTIONS FOR LENDERS AT LENDIT FINTECH USA – 2018 (Lendit), Rated: B

IDValidation will be showcasing their governmental verification solutions to the lending community and Stops 100% of Synthetic Identity Theft.

IDValidation’s Consent Based SSN Verification Allows Financial Institutions Direct Access to the Main Frame Database of the Social Security Administration to Accurately Verify the Validity of a Social Security Number and Stop Synthetic Identity Theft. Toyota Financial Services has conducted a successful pilot. IDValidation has become the forerunner in providing this vital tool to the Financial World helping mitigate
Fraud & ID Theft.

 

 

 

LendingPoint To Accept Loan Payments and Disburse Loans via Debit Cards (Business Wire), Rated: A

Bringing a new layer of convenience to financial transactions with its customers, LendingPoint, the company working to revolutionize access to consumer credit, announced today it has entered into an agreement with TabaPay that will integrate debit cards into LendingPoint’s financing platform.

Beginning immediately, LendingPoint will allow borrowers to use debit cards for loan payments they make online or over the phone. LendingPoint will be able to verify account ownership and balance of its applicants through the TabaPay platform. Then later this year, LendingPoint will also be able to instantly disburse loans to approved borrower accounts through their debit cards, 24/7/365, or credit card payoffs. Those inbound and outbound debit-card disbursements and collections will happen instantaneously and are free for the borrower.

HARVESTING INC LAUNCHES AI BACKED CREDIT RISK SYSTEM FOR AGRICULTURE LENDERS (Lendit), Rated: A

Silicon Valley-based FinTech Social Enterprise Harvesting Inc, launches its innovative credit scoring system for financial institutions to assess farmers creditworthiness and facilitate agriculture financing .

Harvesting’s Credit Risk System is an Artificial Intelligence (AI) powered platform which leverages on traditional & alternative data sets and allows financial institutions to build, deploy and monitor credit business in the cloud, within a fraction of time & resources it takes today. It’s easy to use interface with advanced feature engineering flexibility allows credit risk manager to create best of the breed custom credit risk model for the organization on a cloud infrastructure. It allows credit risk manager of any size of financial institutions to leverage the power of AI and increase acceptance rate and reduce defaults.

FUTUREBANK DIGITAL AND API BANKING PLATFORM INTEGRATES ENTERSEKT’S SECURE CONNEKT PAYMENT FUNCTIONALITY (Lendit), Rated: B

Global Kinetic announced today at LendIt Fintech USA, that it will be integrating Entersekt’s Connekt functionality into the FutureBank platform. FutureBank’s unique ability to abstract the complexities in legacy core banking systems and customize digital channels through its technology platform helps banks and disruptive FinTech companies work together more efficiently. The growing digital banking market in the US has become vulnerable as consumers are frustrated by poorly designed mobile apps that often have weak security implementations and limited payment functionality. The FutureBank platform can now offer converged payment acceptance through Connekt.

PENSCO Launches Custodian Connect (Lendit), Rated: B

PENSCO Trust Company (“PENSCO”) announced today at LendIt Fintech USA, the launch of Custodian Connect, an API-driven capability that seamlessly connects investment platforms to PENSCO enabling uninterrupted opening and funding of an IRA from within the platform.

 

Spring Labs Announces World Class Industry Advisory Board to Help Build Decentralized Credit and Identity Validation Network (Lendit), Rated: B

Spring Labs, which is building the Spring Network, a blockchain-based network being designed to allow lenders, banks, and data providers to securely and efficiently exchange data with one another, today announced its founding industry advisory board. The industry advisory board comprises a group of industry leaders in finance, credit, and compliance, with members including Sheila Bair, the former Chair of the U.S. Federal Deposit Insurance Corporation (FDIC); and Nigel Morris, Co-Founder and former long-time President of Capital One, and co-founder of QED Investors, a leading investor in global financial technology companies.

This news of the industry advisory board comes on the heels of Spring Labs announcing a $14.75 million seed fundraising round, one of the largest initial venture rounds to-date for a blockchain startup.

CoinVantage Announces Release of Flagship Portfolio Accounting & Reporting System for Digital Assets (Lendit), Rated: B

Alternative Investment fund administrator MG Stover & Co. (MG Stover) announced today a partnership with software technology firm CoinVantage as part of its strategy to grow its digital asset fund administration business and deliver world class solutions to its clients.

Cross River Bank Demonstrates Key Growth, Makes Significant Personnel Hires (Lendit), Rated: B

As Cross River Bank approaches its 10th anniversary, the leader in the emerging FinTech market is demonstrating a surge in growth and surpassing significant milestones as it grows its customer base, offerings and strategic partnerships designed to revolutionize the banking infrastructure.

 

United Kingdom

VPC’s revenue dips in February after record January performance (Peer2Peer Finance News), Rated: AAA

VICTORY Park Capital (VPC) Specialty Lending Investments saw its total net revenue return dip to 0.81 per cent in the month of February, after reporting a record return of 1.08 per cent in January.

In its monthly market commentary, VPC said that the fall in revenue was due to a combination of factors including a “one-time fee earned in January and a shorter day count”. Capital losses were attributed to VPC’s exposure to Elevate Credit – a US-based provider of short-term loans, and securitisation residuals.

 

International

The P2P Lending Alternative – Crowdvouching – Will Now Run in Test Mode (Coin Telegraph), Rated: AAA

In 2017, Suretly token-holders were inspired by the idea of a crowdvouching platform – an international exchange for micro-guarantees, where people can make money by helping others borrow. In the beginning of 2018, the project made something that many other ICOs were not able to deliver: the demo version of its product. To become a guarantor (or a ‘voucher’, in the crowdvouching terminology), an individual needs to download the Suretly mobile application, where he can find borrowers’ loan orders, vouch, and get receive a sum of money in return (a fee).

On April 9, Suretly releases the first version of the new app, available to all users registered for its testing period. The borrowers’ behavior is based on the real data of past periods, and, therefore, users can learn different vouching strategies and practice them in future.

Unlike p2p lending, Suretly does not lend money directly, but rather serves as an intermediary between financial institutions, borrowers, and co-signers. Suretly users vouch for a small part of a loan sum and guarantee that the loan will be repaid in the case of a borrower’s default. Liability for each loan is divided among all vouchers and each voucher’s approval serves as an insurance of the loan. In order for the loan to be approved, the entire amount must be guaranteed by the vouchers.

RCN AT LENDIT FINTECH USA 2018 (Lendit), Rated: B

RCN announced today at LendIt Fintech USA that it will showcase how global lending through peer-to-peer technology is possible using blockchain technology and cosigned smart contracts.

With billions of people all over the world excluded from traditional banking & financial services, Sebastian Serrano (CEO), will explain the company’s successful history in Latin America since it was funded and how RCN can contribute to the world’s economy by providing credit and financial inclusion through blockchain technology and cosigned smart contracts.

Scienaptic releases significant product enhancements to its credit underwriting product ‘Ether Underwrite’ (Lendit), Rated: B

Scienaptic Systems Inc. announced today at LendIt Fintech USA that it has released an advanced version of its Credit Underwriting product, Ether Underwrite.

European Union

Can Europe cash in on the fintech revolution? (Silicon Republic), Rated: AAA

Technologies such as blockchain underpin the fintech revolution, paving the way for a whole groundswell of new start-ups that have targeted markets underserved by banks through better user interfaces and user experience (UX) as well as through digital marketing and branding.

A case in point is Revolut, a London-headquartered start-up with offices in Dublin. It turns out that cash-savvy young workers have no time for bank fees and are less forgiving of banks than older generations, and are flocking to these challenger banks.

Examples include: Zurich’s Advanon, an online platform for invoice financing for SMEs; Dublin’s CurrencyFair, which allows individuals and businesses to send funds to bank accounts worldwide; Stockholm’s Klarna, which provides online payments for e-commerce sites; and London’s Monzo, a start-up bank that has amassed more than 20,000 current-account holders and more than 500,000 people using its distinctive ‘hot coral’ cards.

Latin America

Creditas publishes report on the Brazilian lending market (Lendit), Rated: B

Creditas, the leading digital lending platform for secured loans in Latin America, has published the updated report “The disruptors paradise: Understanding the Brazilian lending space” at the Lendit USA 2018 conference.

With roughly US$ 150 billion in net interest margin, Brazilian consumer debt represents a unique opportunity to significantly increase debt availability and reduce the 30%+ banking spread. The report summarizes the reasons behind the high spread of the Brazilian ecosystem and the evolution during the last decade.

Canada

Nova Credit Partners with Transunion Canada to Expand Immigrant Financial Access across North America (Lendit), Rated: AAA

Nova Credit announced today at LendIt Fintech USA that it partnered with Transunion to serve creditworthy newcomers to Canada who may otherwise miss out on credit opportunities due to a lack of Canadian credit history.

The new product—TransUnion Global Credit Connect powered by Nova Credit—provides newcomers to Canada with a platform to import their historical credit information and have their international credit reports delivered to end-users such as banks, in a streamlined, standardized format. The foreign credit score is mapped to a Canadian equivalent score so that it can be consistently applied.

MENA

Dubai SME Expands Agreement With Finance Solutions Provider ‘Beehive’ (Albawaba Business), Rated: A

The Mohammed bin Rashid Fund (MBRF) for SME – the financial arm of Dubai SME, itself an affiliate of Dubai’s Department of Economic Development (DED) – has expanded the partnership agreement with Beehive, the MENA region’s first regulated peer-to-peer lending platform, which will cross the $50 million mark of total funding for SMEs across the platform this month.

Following a successful initial launch, MBRF and Beehive have broadened the scope of the agreement to increase the credit guarantee to AED750k and also offer Sharia Compliant Invoice Finance, a short-term finance option for businesses wishing to improve cash flow.

Asia

South Korea’s P2P loans jump 10.3% on month in March (Pulse News), Rated: AAA

The combined loans of peer-to-peer (P2P) lenders in South Korea reached almost 2.3 trillion won ($2.1 billion) last month amid burgeoning demand for the debt financing service that allows individuals to borrow or lend money online without going through an official financial institution.

According to Korea P2P Finance Association on Monday, the accumulated loans of its 65 members reached 2.296 trillion won as of end of March, up 213.6 billion won or 10.26 percent from a month ago. By sector, total loans on real estate project financing reached 768.5 billion won, real estate mortgage 611.5 billion won, and other mortgages 472.4 billion won, and credit loans 443.2 billion won. The members’ average loan interest rate was 14.32 percent.

The State Of The Nation: The highs and lows in Bank Negara’s 2017 annual report (The Edge Markets), Rated: AAA

Source: The Edge Markets

THERE is a chance the economy will grow as much as 6% this year, according to Bank Negara Malaysia’s 2017 annual report, which was released on March 28. Not only is that ahead of 2017’s stronger-than-expected 5.9% gross domestic product growth, the central bank’s baseline projection of 5.5% growth for this year is at the higher end of the official 5% to 5.5% projected in the Economic Report 2017/2018, which was released just five months ago.

In fact, working numbers in the annual report indicate 5.67% growth for 2018 — exceeding the government’s projection last October, although just short of 2017’s spectacular 5.9% reading.
Source: the Edge Markets

While last year’s growth beat everyone’s expectations (including the central bank’s working number of 4.57%), it is worth noting that 2016’s actual GDP growth of 4.2% was very close to the central bank’s working number of 4.1% when official projections were between 4% and 5%.

 

Authors:

George Popescu
Allen Taylor

The Latin American Alternative Lending Landscape

Latin American alternative lending

The alternative lending juggernaut shows no sign of slowing down and is enjoying remarkable growth all around the world. The Latin American & Caribbean (LAC) industry is also enjoying the wave; the 2017 Americas Alternative Finance Industry Report highlighted the region as a hot spot of lending growth with volumes jumping by over 200% in […]

Latin American alternative lending

The alternative lending juggernaut shows no sign of slowing down and is enjoying remarkable growth all around the world. The Latin American & Caribbean (LAC) industry is also enjoying the wave; the 2017 Americas Alternative Finance Industry Report highlighted the region as a hot spot of lending growth with volumes jumping by over 200% in the completed year 2016. The industry grew from $110 million to an estimated $342 million with business lending accounting for 57% of the total pie.

Source: 2017 Americas Altenative Finance Industry Report

Brazil: A Gold Mine for Alternative Lenders

The so-called Big 5 economies of the region are Brazil, Mexico, Argentina, Chile, and Venezuela. In total, there are 25 countries across Central America, South America, and the Caribbean. The South American market (i.e. basically ex-Mexico) in general, and specifically Brazil, has always been hampered by a lack of banking services, which has opened the floodgate for fintech startups to tap this $6.5 trillion economy. Brazil is an extreme case in point on how lucrative the market can be. 160 million adults are using some kind of banking service, but only 55 million are borrowers, as per Brazil’s central bank. Add to that almost 20 million unbanked people, and you can see the size of the opportunity for a lending startup. Moreover, 85 percent of Brazilians now live in cities; but, 40 percent are excluded from the traditional banking system as per São Paulo-based Itaú Unibanco, the largest private bank in South America.

Yet, the Brazilian population is heavily smartphone-dependent, and fintech lenders have leveraged this to offer differentiated banking and credit services. This gap seems to have been identified by leading US VCs as well. Nubank, a digital finance company that launched a no-fees credit card in Brazil, became the first investment in South America for Sequoia, DST Global, Founders Fund, and QED. It has now raised a cumulative equity and debt funding of over $377 million.

Source:

An underlying reason behind the unprecedented adoption of alternative lending has been the severe banking crisis that hindered the region for more than a decade. With the economy gaining momentum, there is huge latent credit demand, both from individuals as well as SMEs. For instance, Brazilian consumers pay an average of 190 percent a year for unsecured overdraft, credit cards, and consumer loans from banks. The Brazilian government is firmly behind these fintech startups as they look to democratize lending, and more importantly, lower borrowing costs for their voters.

ance/homebox/brazils-fintech-is-a-carnival-of-innovation-in-latin-america/

Leading Players in Brazil Fintech Lending

  • Creditas – Creditas was founded in 2012 by Sergio Furio and has a headquarters in São Paulo, Brazil. It has raised over $77 million in various rounds of funding. Formerly BankFacil, Creditas is a digital lending platform focused on secured lending. The firm funds its customer loans both through investors and financial institutions. Core products include a version of home equity and auto loans in which borrowers offer their residences or vehicles as collateral.
  • Geru – Launched in 2013, Geru is headquartered in São Paulo. A simple, fast, fair, and cost-effective online loan platform, Geru was inspired by the international model of marketplace lending and provides registration and credit rating services for people who wish to obtain a loan. It offers loans up to $10,000 with an interest rate ranging from 1.88%-5.02% per month, and terms ranging from 12 to 36 months.
  • GuiaBolso – Brazil’s leading personal finance platform, GuiaBolso has millions of users who have downloaded its finance app and consumer credit marketplace. It has raised over $60 million in funding.

Apart from the above, there are many Brazilian fintech lending startups like Simplic, Biva, and Noverde that are charting their own path in the Brazilian lending market.

Non-Brazilian Alternative Lenders

  • Credivalores-Crediservicios – Launched in 2003, Credivalores-Crediservicios is headquartered in Bogotá, Colombia. It has raised $34 million from various rounds of funding. It is a non-banking financial company that provides consumer loans for individuals and small companies. The firm also focuses on payroll-deduction loans and consumer lending collected through public utility bills as well as discounting checks and insurance policy financing to low and middle-income individuals.
  • Sempli – Sempli was started in 2016 by Esteban Velasco and Felipe Llano. Its headquarters is in Colombia. An online lending platform for small and medium enterprises in Colombia, the firm has raised $3.6 million from various rounds of funding. It offers loans ranging from $10k-$100k for working capital and/or business expansion.
  • Afluenta – Started in 2010 by Alejandro Cosentino, Afluenta is headquartered in Buenos Aires, Distrito Federal, Argentina. It has raised over $13 million in various rounds of funding. Afluenta is the first and only marketplace lending company for consumer and SME loans operating in more than one country in Latin America. Afluenta successfully launched its services in Argentina where their lender base achieved net USD yields of +20% in the last three years. It currently operates in Argentina, Mexico, and Peru with plans to expand to Colombia & Brazil. It has lent over $460 million and has granted 11,403 loans so far.

Future Outlook

Even though the region has been engulfed by a recession for the last decade, the World Bank still expected the Latin American economy to grow by 1.8 percent in 2017 and 2.1 percent in 2018. The UK and US have matured as markets with leaders in almost every emerging niche. South America provides an untouched hunting ground for fintech lending expansion. The light-touch regulatory rule and implicit government banking to expand credit services should see the region emerging as a hot bed for alternative lending innovation.

Author:

Written by Heena Dhir

Wednesday December 13 2017, Daily News Digest

Wednesday December 13 2017, Daily News Digest

News Comments Today’s main news: Court dismisses case against OCC Fintech Charter. Affirm’s valuation confirmed at $1.75B. RateSetter Australia reaches $200M milestone. SoftBank invests $450M into Compass. Starling Bank expected to profit in 2019. Linked Finance launches P2P lending pension accounts. ID Finance raises $85M through ETF bonds. Today’s main analysis: TransUnion reports on consumer credit markets. Today’s thought-provoking articles: What […]

Wednesday December 13 2017, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

MENA

Israel

South America

News Summary

United States

Court throws out New York regulator’s suit against OCC fintech charter (American Banker), Rated: AAA

A New York District Court judge threw out a lawsuit by the New York Department of Financial Services that sought to block the Office of the Comptroller of the Currency’s attempted fintech charter, saying the charter doesn’t exist yet so the suit is premature.

Lending startup Affirm valued at $ 1.8 bln in latest financing round (Business Insider), Rated: AAA

Silicon Valley lending startup Affirm said on Monday it has raised $200 million in a fresh round of funding, boosting prospects as the firm aims to go after the market for millennial shoppers needing loans.

The new financing put Affirm’s total fundraising to date at about $450 million, and increases its valuation to $1.75 billion, according to a source with knowledge of the matter.

Max Levchin On What Comes After $ 200M Worth Of Capital Affirmation (PYMNTS), Rated: AAA

The CEO with the measured response is PayPal co-founder Max Levchin, who told Karen Webster that with any capital raise of size, the temptation is to believe that “it is a big victory and it is validation … but all it really is, is a temporary tally of how far you have gone.”

He noted that with big investments come big responsibility (and Affirm has raised roughly $450 million to date), as he remarked that there is the implicit end goal of taking the money and parlaying vision and strategy into strong returns on that cash.

Affirm says that its retailers report that consumers who use Affirm leave with a basket size 75 percent greater than those who don’t use Affirm to pay for their purchases, and enjoy site-wide conversion rates as much as 20 percent higher, with revenue per visitor lifts of more than 10 percent.

Doing customers wrong allows your competitor to make things right (American Banker), Rated: A

Consider Affirm, a startup that offers consumers installment loans for individual purchases and markets the loans as a simpler and more honest financing alternative — a message that is clearly targeted at consumers who are frustrated by a perceived lack of transparency in the costs associated with using credit cards. This message appears to be resonating in the market; Affirm is processing relationships with more than 1,000 internet retailers and is reportedly working with Walmart on a pilot project.

In an interview with American Banker, Douugh founder and CEO Andy Taylor said: “When we dug deeper, we realized the consumer debt levels are out of control. Big banks are running off legacy business models that are driven to keep customers within these debt cycles. They’re not properly incentivized to foster financial wellness.”

Affirm, Marcus and Douugh are all basing their strategic direction on a simple but powerful insight: There is a difference between the way many consumers use credit cards and the way that those consumers should use their credit cards in order to maximize their financial wellness.

Retailers now offers Instaloans to pay for purchases (ABC30.com), Rated: A

A growing number of major retailers offer shoppers instant loans to pay for your purchases.

But how do they work? And are they better than credit cards?

Each lender may be slightly different, but typically: you give basic information, decide the length of the loan -usually anywhere from three to twenty-four months and in less than a minute you’ll know if you’re approved.

Prosper Appoints Former J.P. Morgan Chase CMO Claire Huang to Board of Directors (Crowfund Insider), Rated: AAA

Peer-to-peer lending platform Prosper announced on Tuesday it has appointed former Chief Marketing Officer of J.P. Morgan, Claire Huang to its board of directors. According to Prosper, Huang has held senior leadership positions at various well-known financial services companies, which includes Bank of America, Fidelity Investments, and American Express.

OnDeck Adds Former GE Capital and SunTrust Executives to Finance Team (PR Newswire), Rated: AAA

OnDeck (NYSE: ONDK), the leading online lender to small business, today announced the hiring of two senior financial services executives to join its management team. Kelly Merrill and Erich Wust will assume new leadership roles that directly support OnDeck’s mission of empowering small business owners with the fastest and most flexible credit solutions.

Kelly Merrill joins OnDeck as the Senior Vice President for Finance, where she will help lead the company’s short-term and long-term financial planning initiatives. Merrill brings over a decade of finance experience to OnDeck from GE Capital, where she played a leading role in developing and executing the disposition strategy for GE Capitals’s $200 billion balance sheet.  Previously, Merrill was the Chief Financial Officer (CFO) of GE Capital Real Estate, where she led a team of more than 50 employees.

Erich Wust has been appointed as the Senior Vice President for Portfolio Management at OnDeck. He will be responsible for managing portfolio credit strategies, balance sheet optimization and other components of the company’s loan portfolio. Wust joins OnDeck after more than a decade in credit and risk leadership roles at SunTrust Bank.

Compass gets $ 450M from SoftBank; real estate portal now valued at .2B (TechCrunch), Rated: AAA

Less than a month after raising $100 million led by Fidelity, real-estate startup Compass is striking while the iron is hot. The company has now picked up an even bigger investment of $450 million, this time from the SoftBank Vision Fund, plus another $50M in secondary deals, to fill out a vision of its own: taking its real estate rental and sales platform global.

New York-based Compass is now valued at $2.2 billion post-money, up from $1.8 billion just four weeks ago, with $775 million raised to date.

Consumer Credit Market Expected to Remain Strong in 2018 Even in a Rising Rate Environment (NASDAQ), Rated: AAA

In spite of rising interest rates, the U.S. consumer credit market is poised to perform well in 2018, with well-managed delinquencies and continued wide access to credit across all products. TransUnion’s (NYSE:TRU2018 consumer credit forecast found that expected increases to GDP, personal income, total employment and the Housing Price Index, among other factors, will outweigh potential negatives such as increasing interest rates and slowing vehicle sales.

5-Year Trends: Serious Borrower-Level Delinquency Rates for Key Credit Products**
Credit Product Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018* PCT Change in Last 5 Years (2013-2018)
Auto Loans  

1.23

%  

1.19

%  

1.27

%  

1.44

%  

1.43

%  

1.46

%  

+18.7 %

Credit Cards 1.60 % 1.48 % 1.59 % 1.79 % 1.86 % 1.96 % +22.50 %
Mortgage Loans 4.31 % 3.40 % 2.46 % 2.28 % 1.83 % 1.65 % (-61.7%)
Unsecured Personal Loans 4.01 % 3.73 % 3.62 % 3.83 % 3.37 % 3.36 % (-16.21%)
*Projections; **Serious mortgage, auto loan and personal loan delinquencies are defined here as those with payments 60 or more days past due. Serious credit card delinquencies are defined as those with payments 90 or more days past due. 

Inside the Mortgage Forecast

60-Day+ Mortgage Delinquency Rate and Average Mortgage Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
7.16% 6.65% 6.15% 5.38% 4.31% 3.40% 2.46% 2.28% 1.83% 1.65%
$190,324 $186,488 $185,594 $184,753 $187,228 $187,311 $189,914 $194,415 $200,935 $205,534
*Q4 2017 and Q4 2018 include projections

Inside the Credit Card Forecast

90-Day+ Credit Card Loan Delinquency Rate and Average Credit Card Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
2.97% 2.17% 1.90% 1.75% 1.60% 1.48% 1.59% 1.79% 1.86% 1.96%
$6,043 $5,609 $5,485 $5,371 $5,324 $5,329 $5,337 $5,486 $5,626 $5,675
*Q4 2017 and Q4 2018 include projections

Inside the Auto Finance Forecast

60-Day+ Auto Loan Delinquency Rate and Average Auto Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
1.59% 1.27% 1.11% 1.15% 1.23% 1.19% 1.27% 1.44% 1.43% 1.46%
$14,922 $15,031 $15,377 $16,061 $16,781 $17,456 $18,004 $18,391 $18,588 $18,694
*Q4 2017 and Q4 2018 include projections

Inside the Personal Loan Forecast

60-Day+ Personal Loan Delinquency Rate and Average Personal Loan Debt per Borrower
Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017* Q4 2018*
4.98% 4.78% 4.20% 3.93% 4.01% 3.73% 3.62% 3.83% 3.37% 3.36%
$6,650 $6,138 $5,895 $5,904 $6,247 $6,741 $7,360 $7,640 $8,066 $8,461
*Q4 2017 and Q4 2018 include projections

Why JPMorgan, Amex, HSBC are backing ‘isolation’ web browsing (American Banker), Rated: AAA

Often users are tricked by phishing emails that mimic a legitimate note from the boss or a senior corporate leader. And the links and sites can look secure. According to PhishLabs, nearly 25% of all phishing sites in the third quarter were hosted on HTTPS domains — almost double the rate of the previous quarter.

As part of their effort to deflect these attacks, some banks are turning to isolated browsing, or remote browsing, technology. Such systems force all internet activity to happen in a protected space on the cloud, preventing malicious code from reaching a company’s network. The technology is not brand new, but it is starting to gain traction as some large banks have finished their testing of it and are going public with their use of it.

JPMorgan Chase, American Express and HSBC announced Monday that they are leading a $40 million round of funding in the isolation-tech provider Menlo Security, bringing its total funding to $85 million.

Source: American Banker

 

Niche lending and fintech cross paths in Silicon Slopes (Utah Business), Rated: A

There are, however, entire demographics not serviced by tried-and-true lending institutions. Often, these folks’ credit score fails to meet a bank’s minimum standards. Or they need unconventional terms on an equipment or business loan. Whatever the reason, these transactionally marginalized sectors find themselves at the mercy of high-interest lenders. Or with no access to capital at all.

“There is a significant population of U.S. consumers who can’t get a loan,” notes Nate Heward, CFO at Acima Credit, a company that provides a point-of-sale credit platform.

Capitalism abhors a void

From the ubiquitous strip mall payday lender to the world of microfinance, a plethora of entrepreneurial solutions has emerged to get cash in the hands of would-be borrowers cut off from other avenues. These alternative lending practices have various degrees of reputability; a wide spectrum exists between the purely predatory lending shop, on the one hand, and the creative value-adding venture, on the other.

Scratching the consumer itch

In practical terms, Acima asks four simple questions of the would-be borrower:

  1. Do you have a three-month history with your current employer or source of income?
  2. Do you deposit $1,000 or more into your checking account each month?
  3. Have you had a checking account for at least 90 days?
  4. Is your checking account free from NSFs, excessive overdrafts and negative balances?

It’s all fintech

The companies profiled in this article may not be considered fintech firms per se; they’re not using technology to create a new financial paradigm a la Paypal, Indiegogo or Coinbase. They’re merely offering tried-and-true solutions to untapped consumer markets. Viewed from another angle, however, they’re fintech companies through and through. Acima, Progressive, et al are racing to deliver the most convenient financial solutions to the most people in their target customer base. And to do so, they’re relying on technology all the way.

Finance teams are ‘bottlenecking’ banks’ digital transformations (Tearsheet), Rated: A

Banks are working hard to beef up their technology and innovation teamsembrace agile developmentand move to acting like digital companies, but bank finance departments still do a lot of manual work and will start to hold their companies back from becoming digital entities. Finance teams are the control functions and scorekeepers of an organization, but if they can’t process data at the same speed as the rest of the organization they could slow down the speed of company mergers or product rollouts when competing transactions are already taking place.

Royal Business Bank Invests $ 500K in Lendistry Loan Fund, Providing Opportunity for Small Businesses in Underserved Communities (Digital Journal), Rated: A

Royal Business Bank, a wholly-owned subsidiary of RBB Bancorp, has made a $500K commitment to the Lendistry CRA Loan Fund I. Launched at a time when most banks were struggling, Royal Business Bank has been successfully serving the Asian-American community since 2008. While specializing in businesses engaging in trade with Pacific Rim countries, the bank also offers small business loans and residential mortgages.

First financial industry brief filed in CFPB English v. Trump case (Ballard Spahr Email), Rated: A

This afternoon (LT Editor: December 12,2017) the Credit Union National Association (CUNA), represented by Ballard Spahr’s Alan Kaplinsky, filed the first amicus brief from the financial industry in the English v. Trump litigation over who will succeed Richard Cordray as the head of the Consumer Financial Protection Bureau. CUNA supports the President’s authority to appoint an acting director.

Lawsuit: Trump appointee Mick Mulvaney has ‘no more right’ to lead CFPB ‘than Santa’ (Washington Examiner), Rated: A

A new federal lawsuit says President Trump’s “plainly illegal” appointment of Mick Mulvaney to be acting director of the Consumer Financial Protection Bureau must be reversed in favor of Leandra English, who also claims the title.

Ilann Maazel, an attorney for the Lower East Side People’s Federal Credit Union, told the Washington Examiner that the credit union is suing because of the feared effect of Mulvaney policies.

The legal dispute centers on whether the 2010 Dodd-Frank financial reform, which set up the CFPB, makes the deputy director the acting director if there’s a vacancy, or whether the older Federal Vacancies Reform Act gives the president that power.

US Bank sees success with Zelle (Business Insider), Rated: A

US Bank integrated Zelle — which has over 30 other banking partners like Bank of America (BofA), JPMorgan Chase, and Citi — last year. The bank saw a 104% increase in Zelle transactions in the past four months, and a 50% increase in customer enrollment in the P2P offering during that time.

Source: Business Insider

To compete with big tech firms, banks need big-tech talent (American Banker), Rated: A

Nine years ago, D.J. Patil and Jeff Hammerbacher coined the term “data scientist.” Four years later, Patil and Thomas Davenport deemed the profession “the sexiest job of the 21st century” in the pages of Harvard Business Review.

For banks, this imbalance is particularly challenging at a time when the industry is increasingly vying for the same talent the tech giants are aggressively courting. To stay competitive, the financial services industry must defend against a new cast of competitors by changing how it attracts, hires and develops data science talent.

 

BitGo Raises $ 42.5M in Series B Funding (Finsmes), Rated: A

BitGo, a Palo Alto, CA-based company which makes digital currencies usable for businesses in a regulated economy, raised $42.5m in Series B financing.

The company intends to use the funds to accelerate enabling businesses to integrate digital currencies into their existing financial systems.

AI 100: The Artificial Intelligence Startups Redefining Industries (CB Insights), Rated: A

Source: CB Insights

5 Promising Early-Stage Startups to Watch (Tech Startups), Rated: B

Throtle is a 2nd generation data onboarding company focused on deterministic matching, identity resolution and closed loop enablement, powering brands and companies with their omnichannel marketing efforts.

Affirm is a San Francisco-based financial service startup that offers installment loans to consumers at the point of sale. Its aim is to improve the banking industry to be more accountable and accessible to consumers.

Homebuying With Alternative Credit (Microbilt), Rated: B

Source: Microbilt
United Kingdom

Digital challenger Starling to hit profit in 2019 says founder Anne Boden as European expansion takes crucial step (City A.M.), Rated: AAA

Digital-only challenger bank Starling will “definitely” be in profit by the end of 2019, its chief executive told City A.M., as it announced a major step in its plans for European expansion.

The bank will today announce it has become a direct member of the single euro payments area (Sepa), which allows credit transfers, direct debit and card payments in euros across the whole of the EU.

Crowdfunding a mission to save capitalism from itself (Financial Times), Rated: AAA

Jeff Lynn is on a mission to save capitalism from itself at a time when millions feel locked out, and unable to foresee themselves better off than their parents. His answer: to democratise capital.

That is one reason he founded Seedrs, an online platform through which individual investors can buy shares in high-growth companies at an early stage — a privilege once reserved for institutions and private equity funds. The other reason was to make money.

Seedrs, which along with Crowdcube dominates the UK market, has funded more than 540 deals, representing £280m of investment. Some were follow-on rounds, and in total about 400 companies have been funded. About 20-30 companies are live on the site at any time.

Crowdfunding by numbers

Critics say a big difference between crowdfunding and the stock market is liquidity — you cannot just sell your stake. But Seedrs has begun a secondary market and says it has had several exits already.

Free Agent, a Scottish maker of accounting software, floated in November 2016 at 87p. Its shares remain below the 100p Seedrs investors paid, though some sold when it hit 140p this year. Chapel Down, a vineyard, was already quoted on the Nex exchange (formerly ISDX) when it raised money at 28p a share in October 2014. It has been trading around three times that level.

China

SenseTime Raises US$ 410M Series B Financing (Finsmes), Rated: A

SenseTime, a Chinese artificial intelligence company focused on computer vision and deep learning technologies, raised US$410m series B1 B round of financing.

SenseTime has powered many industries such as finance, security, smart phone, mobile Internet, robotics, and automobile with core computer vision technologies including face recognition, video analysis, character recognition, and autonomous driving.

European Union

Linked Finance Launches New P2P Lending Pension Accounts (Better Business), Rated: AAA

Irish peer-to-peer lending company Linked Finance has launched a new type of account that allows holders of self-administered pensions to make P2P lending to Irish SMEs part of their pension investment portfolio.

With net returns of between 7 and 8.5 per cent, 24/7 online account access, complete control of lending activity, and monthly repayments of principal & interest, P2P lending is becoming an attractive asset class for a growing number of investors.

Mobile bank N26 partners with crowd-lending platform Younited Credit in France (Telecompaper), Rated: A

European start-up N26 has expanded the range of its banking services on offer in the French market via a partnership with Younited Credit, a fintech start-up specialising in short-term loans and crowd-lending.

The Advantages of #Peer-to-Peer Lending (EU Reporter), Rated: A

For many years, if someone wanted a loan, they would have to apply for one through a bank. Before they received that loan, the bank investigated their credit and decided what the rate of interest would be applicable.

However, there is another way to get a loan without worrying about a low credit score or high interest rates. This is peer-to-peer lending or P2P. Through peer-to-peer lending platforms, individuals can invest their money in other individuals, with an interest rate that the two groups have agreed is fair.

Hungarian fintech secures EUR 6 mln in Czech funding (Portfolio.hu), Rated: A

The investor will first acquire a 20% stake in Barion, which is active in online and mobile payments, for EUR 2 mln.

Finnish Crowdfunding & P2P Lending Platform Fellow Finance Receives Payment Institution Authorization (Crowdfund Insider), Rated: B

Finnish crowdfunding and peer-to-peer lending platform Fellow Finance announced on Tuesday it received payment institution authorization from the Financial Supervisory Authority of Finland. The online lender claims it is the first funding platform to receive this type of authorization, which will notably enable Fellow Finance to provide new services to its consumer and corporate customers, to expand its services further in Europe and to utilize the new payment service directive (PSD2) in the development of Fellow Finance service.

With Norrsken House, ex-Klarna executive envisions a global network of co-working spaces focused on impact (TechCrunch), Rated: A

He launched the Norrsken Foundation later that year with about $20 million of his own money. By early 2017, the first fruits of that funding took shape with the opening of Norrsken House, a co-working space in Adalberth’s hometown of Stockholm dedicated to companies that are developing technologies that have a social impact.

Now, Adalberth has committed an additional $62 million of his own money to expand that vision. The goal, he said, is to eventually create a network of 25 impact-focused co-working spaces and foundation hubs around the globe in the next 10 years. The first Norrsken House has 112 companies in it and seven have received direct investment from the Norrsken Foundation’s fund (more on that in a bit).

International

ID Finance raises $ 8.5m via exchange-traded bonds to support growth (Finextra), Rated: AAA

ID Finance, the emerging markets fintech company, today announced successful completion of its first issuance of exchange-traded bonds.

The company raised $8.5m from the bond registered in Russia and listed on the Moscow Exchange. It was the first tranche of a $170m bond issuance programme that the company plans to support global expansion.
The bond, which was oversubscribed, has a maturity period of three years and a quarterly coupon payment frequency.

Banks, fintechs and a Brit royal to build green-lending blockchain (American Banker), Rated: A

Could fintech help the planet cope with climate change?

Some major players — Prince Charles; bankers from Barclays, Standard Chartered, and BNP Paribas; three fintechs; and professors from the University of Cambridge — all hope the answer is yes.

On Tuesday at the One Planet Summit in Paris, they are expected to announce they are developing blockchain technology that lets banks see which potential borrowers use environmentally sustainable practices and therefore are worthy of preferential lending terms. Such disclosures presumably would put pressure on companies to pollute less.

Australia

RateSetter’s Australian business hits $ 200m milestone (AltFi), Rated: AAA

RateSetter Australia has hit the AUD$200m mark in lending a little over three years removed from launching down under. The platform, which lends to both businesses and individuals, has doubled its lending volumes over the past six months.

Interestingly, 56 per cent of its investors withdrew money from bank savings accounts in order to divert them into the platform, while a further 17 per cent reallocated money from bank term deposits. The greatest proportion of the platform’s investors are millennials, at 58 per cent, although they invest the least amount of money on average of any age group at $9,454. Retirees (aged 65 and over) by contrast invest an average of $66,118.

India

Understanding the Data Protection White Paper Part XI: Establishing proper deterrent consequences for privacy violations (Tech 2), Rated: AAA

This article is Part 11 of a multi-part series explaining the recently issued white paper on data protection in India. You can read Part 1Part 2, Part 3Part 4Part 5Part 6Part 7Part 8Part 9 and Part 10.

Consider also the case of Sitesearch in the US, where the company bought payday loan applications and sold them to third parties, which included fraudsters, who used the data to steal more than $25 million from user accounts. Such careless buying and selling off of data should not be justifiable in the name of consent. While safeguards such as requiring that companies transfer data to only to companies with a comparable level of privacy provisions help, these must be backed up by huge penalties for violations.

For example, consider the Equifax data breach, the breach of a credit information company, leading to the loss of crucial data of over 143 million Americans. This breach was the result of a vulnerability in their web application software, a vulnerability that was discovered and for which a patch had been issued at least 2 months before the actual hack. The breach of this crucial data was thus the result of negligent, or non-implementation of the patch.

A landmark privacy judgment in India is the Canara Bank case, which struck down a provision in a law, which allowed the authorisation of ‘anyone’ to conduct investigations and demand the production and seizure of documents, including bank documents. Such a wide delegation of powers can allow any and everyone, even unscrupulous actors, permission to gain access to confidential data, which should not be allowed.

This case draws attention to an important aspect of data protection — it must be ensured that investigations, at all times, must be authorised, and by authorised personnel only. Any violations, or even exceeding of powers must be punishable.

Asia

8Percent leverages power of platform (Korea Herald), Rated: A

Companies that have used the 8Percent platform include Korea’s leading vehicle-sharing app operator Socar, solar energy firm S-Power and restaurant chains Power Plant and The Booth.

For example, a P2P investor into Socar was given a 1-hour free-driving offer each month for a year, until the loan matured. The offer was part of a return to about 600 retail investors, who lent a combined 1.3 billion won ($1.19 million) to the car-sharing firm in July 2015.

Vouchers for restaurants, such as Power Plant and The Booth, were given as rewards to investors.

According to a December estimate by 8Percent, three-fourths of investors, who offered an accumulated 97.7 billion won in loans, were from metropolitan areas — either Seoul or Gyeonggi Province — while those in their 20s or 30s accounted for over three-fourths of investors. The investors, without tax being deducted, are offered on average 9.78 percent interest for investments.

Some 65 percent of its borrowers — about 5,000 – had a credit rating between 4 and 6 on the scale of 1 to 10.

MENA

Crowdfunding real estate: a new reality booming? (Gulf News), Rated: AAA

Similarly, online REITs use online platforms and digital technology to enable wider access to REITs and quicker dissemination of REIT information. This allows mass participation and broader wealth distribution.

The ticket size to crowdfund a $1-billion airport is not exactly for everyone. However, a three-bedroom apartment in Mumbai, Manchester or Dubai Marina jointly owned by a hundred individuals sounds realistic. It also helps diversify risks for investors.

Smart Crowd is a crowdfunding platform, very different from an online REIT. The company believes it can enable anyone with Dh5,000 in savings to enter the Dubai property ladder. Its platform is awaiting final regulatory approval from the Dubai Financial Services.

Israel

MK Rachel Azaria threatens banks with P2P legislation (Globes.co.il), Rated: AAA

MK Rachel Azaria, chair of the Knesset Reforms Committee (officially known as the Special Committee on the Planning and Building Bill and the Maternity Leave and Parenting Bill) did not like the draft circular released by the Bank of Israel on regulating the relationship between the banks and the digital peer-to-peer (P2P) lending platforms on Sunday.

Azaria is now threatening to promote legislation that will regulate relations between the banks and the platforms, but this appears to be designed to pressure the Bank of Israel to publish new, more focused guidelines .

South America

Creditas Raises $ 50M in Series C Funding (Finsmes), Rated: A

Creditas, a Sao Paulo, Brazil-based digital secured loan platform provider, raised $50m in Series C funding.

Authors:

George Popescu
Allen Taylor

Friday October 13 2017, Daily News Digest

China P2P

News Comments Today’s main news: Ron Suber delivers last keynote at Lend360. Kroll assigns preliminary ratings to Marlette Funding Trust 2017-3. Judge says he is likely to certify LendingClub lawsuit as class action. Lemonade rolls out open API. Zopa CEO struggles with perception that P2P lender is struggling. Reserve Bank of India issues KYC guidelines for prepaid payment instruments. State Bank of Mauritius, […]

China P2P

News Comments

United States

United Kingdom

China

European Union

International

India

Africa

South America

 

News Summary

United States

The “Godfather of Fintech’s” Last US Keynote (FintechSauce), Rated: AAA

Ron Suber walked onto the LEND360 main stage to the theme song of Francis Ford Coppola’s The Godfather.

This was Ron’s last keynote in the US (until he makes a Jordan-like comeback, perhaps?), which attracted a standing room only crowd. His talk started off with the theme of consolidation, comparing FinTech to previous life-changing industries such as radio, tv and mobile phones.

Ron also shared his top tips for entrepreneurs and platforms:

  1. He suggested that the platforms know what makes them unique and to be able to pitch your company in two sentences or less.
  2. He also said that there is no “single solution.” There will always be ways to do things.
  3. Also, listen to consumers–they’re the ones that drive innovation.
  4. Focus. The need to focus as an entrepreneur is key to success.

KBRA Assigns Preliminary Ratings to Marlette Funding Trust 2017-3 (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by Marlette Funding Trust 2017-3 (MFT 2017-3). This is a $297.8 million consumer loan ABS transaction that is expected to close on October 26, 2017. This transaction represents the fifth securitization collateralized by unsecured consumer loans originated by Cross River Bank, under the Marlette Best Egg Platform and sold to Marlette Funding, LLC (“Marlette”) or its affiliate.

The transaction has initial credit enhancement levels of 37.70% for the Class A Notes, 24.90% for the Class B Notes, 14.90% for the Class C Notes and 7.00% for the Class D Notes. Credit enhancement consists of overcollateralization, subordination (in the case of the Class A, Class B and Class C Notes) and a reserve account funded at closing.

LendingClub Investors Poised To Win Cert. Over Objections (Law360), Rated: AAA

A California federal judge Thursday said he will likely certify a class of LendingClub Corp. investors who allege the peer-to-peer lending company hid defects in its internal controls before and after its $1 billion initial public offering, over objections from both the company and investors pursuing separate state law claims.

U.S. District Judge William Alsup indicated he was “inclined to certify everything,” but seemed likely to trim the terms, telling LendingClub attorney Victoria Parker of Quinn Emanuel Urquhart Sullivan LLP she’d “raised some good points” about….

Online Lending 2.0 by Renaud Laplanche (Field Services on Demand), Rated: AAA

Lemonade platform now “open to the world” with API (Banking Technology), Rated: AAA

“We’re opening up the Lemonade platform to the world!” says Shai Wininger, co-founder of Lemonade, a US-based insurtech firm.

The new Lemonade API supports quoting, policy creation and payment for homeowners, condo, and renters insurance policies in the company’s active markets  of New York, California, Texas, Illinois, New Jersey and Rhode Island. More regions will be added “in the near future”.

Lending Disrupted? Not Yet, Says Renaud Laplanche (Crowdfund Insider), Rated: A

Renaud Laplanche, co-founder and CEO of Upgrade, and former co-founder and CEO of Lending Club tried to reignite the flame of the consumer lending sector by forecasting not only its continuing success, but further the emergence of major innovations.

The growth of online lending will re-accelerate in the next 15 months.

Credit card debt is currently growing at a 5% rate and represents $1.021 trillion. The total debt balance of US households totals $12.73 trillion.

The US is experiencing one of the longest economic growth run, yet still 20 months shorter than the growth run which preceded the great depression. Observers estimate at less than 30% the risk of recession.

When I asked Renaud Laplanche about his personal vision of the ideal product – the product he would like his company to deliver if there were no technological or other barrier, he said: “one click responsible credit.”

Goldman wants to help flip that house (CNBC), Rated: A

Now Goldman is getting into lending for real estate pros through its acquisition of Genesis Capital.

The deal, for undisclosed terms, gives Goldman a business that makes loans of $100,000 to $10 million at rates of 7 percent to 12 percent. It won’t lend to occupants, so that leaves real estate professionals who are renovating and looking to sell fairly quickly. Genesis made $1 billion of loans last year.

Affirm’s Plan To “AMP” Retailer Margins And Conversions (PYMNTS), Rated: A

You’ve heard the old story: If brick-and-mortar merchants watched 75 percent of their customers walk in their stores and then walk out without having purchased a single thing, sirens would be screaming. But that’s precisely the situation with online commerce – three out of every four consumers who load their cart, don’t buy what’s in that cart.

AMP is integrated with seven of the top email service providers that online merchants use to market to consumers. Thee integrations give online merchants a new way to nudge a consumer into making that purchase by offering the ability to pay in installments, using Affirm. Retailers using any of those email providers are able to drag and drop the Affirm “as low as” pricing offer into any of their email templates, and then use it as a mechanism to convert abandoned carts.

“We want to give retailers a new way to follow up,” Overstreet said. “Instead of just showing their consumer the same $400 loveseat that they decided not to buy a day or a week ago, the consumer gets a prompt letting them know they can buy that $400 loveseat for little as $35 a month.”

Should you add a loan to your shopping cart? (San Francisco Chronicle), Rated: A

Got your eye on a new living room set at Wayfair? Or maybe you’re booking your honeymoon on Expedia. Increasingly, shoppers at these sites and others are encountering payment options from third-party lending companies like Affirm, Bread, Klarna and Acima Credit.

Lyst, an online clothing store carrying brands such as Burberry, Marc Jacobs and J. Crew, offers loans through Klarna. And Walmart is considering checkout loans from Affirm for items above $200, according to a report by the Wall Street Journal.

While some retailers may offer zero-interest promotional rates, annual percentage rates from Affirm and Bread, for example, can be as high as 30%. A $345 handbag at Rebecca Minkoff will wind up costing you $385 if you pay for it with a 12-month loan from Affirm at an APR of 21% — the average rate for its borrowers, Affirm says.

HOW SHOPPING LOANS WORK

The process is similar to selecting a store credit card at checkout. The loan option might appear next to the purchase price or in your shopping cart. In the online experience, selecting the loan option will direct you to the lender’s website or a smartphone app. You enter a few pieces of personal information — typically your name, date of birth and last four digits of your Social Security Number, or in some cases, just your phone number.

If you’re approved, the lender displays multiple loans with varying interest rates, monthly payment amounts and terms. You pick a loan, sign the agreement and finish checking out. Just like using a store credit card, the whole process takes anywhere from a few seconds to a few minutes.

From Weeks to Minutes: How Fintech Is Changing the Speed of Lending (Wharton), Rated: A

In this Knowledge@Wharton interview, Spencer Robinson, head of strategy for the company, explains what Kabbage has discovered that allows it to approve loans in minutes, versus what he says can often be a multi-week slog with traditional banks. 

Knowledge@Wharton: Your website notes that you’ve provided $3.5 billion in financing to some 100,000 businesses online, and you’re still not a household word, which, with those kinds of numbers, surprises me.

Spencer Robinson: Capital One really changed the way people looked at consumer credit finance. And that sort of mindset really helps lay the foundation for the types of things that we do.

Knowledge@Wharton: It’s interesting, the difference between you and a traditional lender. I’ve seen stories about Kabbage. One is about a small business owner who wanted to borrow $50,000 and they took their loan request to a bank. It took three weeks and the answer was “no.” And then they went to you and they got their $50,000 in six minutes. Why can’t banks do that? Why is it that you can do that?

Robinson: I would say banks can. A lot of times it’s a matter of getting out of your own way.

Robinson: Our APR average is right at about 39% to 40%.

Knowledge@Wharton: What is the highest amount that you lend?

Robinson: We’re at $150,000 now.

Listen to the podcast interview here.

If the rules are right, digital microlending could play role in subprime market (R Street), Rated: A

Credit unions frequently are the best available choice for those who have difficulty obtaining credit through traditional banks. But for some, digitally coordinated peer-to-peer lending agreements—inspired by microfinance arrangements for economically fragile communities internationally—also are proving to be an emerging option.

Peer-to-peer digital microlending has the potential to fill a portion of the gap by providing this cohort with small, short-term loans that typically range from $100 to $500.

One of the largest such peer-to-peer digital microlending platforms is the “R/ Borrow” section of reddit.com. This subreddit uses the reputational ecosystem within reddit to identify worthy borrowers, banning users who default or violate the terms of use. The subreddit facilitates the microloans and acts as a central database of transactions, coordinating more than $780,000 in loans in 2015.

If it can be properly scaled, peer-to-peer digital microlending could be a worthy option over payday loans for subprime borrowers.

More than 100 financial firms using Ripple blockchain software (American Banker), Rated: A

Ripple’s campaign to beat Swift at cross-border payments just got some new recruits.

The San Francisco startup announced several new customers of its enterprise blockchain software on Tuesday, bringing the total number of financial ….

ValueInsured Closes Financing Led by Global Reinsurer (PR Newswire), Rated: A

ValueInsured, the only provider of down payment protection, today announced the closing of $6.5M of funding led by an affiliate of Everest Re Group Ltd. and also Houston International Insurance Group (HIIG). The latest round of funding from Everest Re and HIIG builds on their existing partnerships with ValueInsured, which began in 2014 with an initial $6M seed round. This additional investment provides ValueInsured with the growth capital to continue its aggressive distribution partnership strategy, expanding channel presence and enhancing the features of the +Plus SM down payment protection program.

An API-Based Cure For Post-Purchase Blues? (PYMNTS), Rated: A

But many consumers could soon find an easier process for obtaining savings on such purchases, thanks to an API-based solution: Earny, an app-based bot born from a Mastercard API. Earny launched last year with the promise of offering consumers a more frictionless price protection process.

According to Vakrat, Earny’s inspiration started with a blazer purchased for $129 by co-founder Dori Yona. A few weeks later, Yona came down with a sudden case of sticker shock after shopping online and finding the same blazer available for roughly half the price.

Vakrat said he and Yona contacted the credit card company to see if Yona could receive a refund on the difference. The credit card company offered price protection, but Vakrat politely described the process of getting reimbursed for the difference as “inefficient.” While ultimately successful, it took two weeks for Yona to complete the process and receive his $65.

To develop a more efficient post-purchase refund process, the two co-founders entered Mastercard’s Masters of Code Hackathon. The result was the Earny app, which taps into Mastercard’s Simplify Commerce API. Earny uses APIs to authenticate users through their Gmail, Yahoo or Microsoft email providers, then scans their inboxes for eCommerce receipts and compares them to prices from approximately three dozen retailers – including Target, Costco and Overstock.com – checking for price drops. The service works by automating the price protection process, automatically refunding consumers for any detected price differences.

According to Mastercard’s research, U.S. consumers walk away from more than $50 billion in price drops every year because they were either unaware of better offers or because the refund process can be lengthy and require tedious paperwork.

Fed’s Bullard warns bank regulators are ‘complacent’ over fintech risks (Kitco), Rated: A

U.S. banking regulators must accelerate efforts to address the risks posed by fintech companies to the banking sector which could be “eviscerated” by these innovative new players, St. Louis Fed President James Bullard said on Thursday.

In the lending sector alone, Goldman Sachs estimates that $11 billion of annual profit is at risk of leaving the banking system, according to research cited by the Fed.

Fintech’s Got 99 Problems And Diversity Is Definitely One (Forbes), Rated: A

Marketplace lending platform P2Binvestor announced today the launch of a first-of-its-kind bank partnership program with New Resource Bank in order to provide crowdsourced lines of credit to growing, mission-aligned businesses with a hunger for innovation.

Alongside transforming the lending structure for fintech companies, P2Binvestor’s attitude towards diversity in the workplace and moving away from traditional, yet stereotypical roles is second to none, headed up by CEO Krista Morgan.

Five Ways To Bounce Back From A Culture Catastrophe (Forbes), Rated: A

Corporate culture is a growing concern for boards and stockholders. One study shows that 92% of executives believe improving corporate culture would increase their firm’s value. That is an overwhelming majority, and yet so many companies with seemingly unlimited resources keep falling into the trap of poor culture.

A recent victim is SoFi, a privately held online lender. SoFi lost its CEO amid a storm of accusations including sexual harassment, verbal harassment and a culture of fear.

The CFPB’s Payday Lending Rule: An Opportunity in Disguise? (JD Supra), Rated: A

Editorial: Payday loan rules make sense (LJWorld), Rated: B

Kansas legislators should take steps to rein in the predatory lending practices some in the payday lending industry employ.

According to the state bank commissioner, payday loans in Kansas totaled more than $300 million in 2016. Interest rates and fees average an astounding 391 percent per year.

Under UCCC rules, payday loans are limited to $500 on loans that last seven to 30 days, and lenders cannot charge more than 15 percent of the amount borrowed. However, they can charge an additional 3 percent per month for loans that go past their maturity date. Lenders cannot make more than two loans to the same person at any one time, and they cannot make more than three loans to the same person within a 30-day period.

Editorial: Payday lending should be restricted (CJOnline), Rated: B

The average federal student loan carries an interest rate of around 5 percent. When you take out a loan for a car, you can expect to pay between 3 percent and 10 percent. The average interest rate for a credit card is a little more than 15 percent. But if you get a payday loan in Kansas, you’ll be slapped with an interest rate of 391 percent.

According to the Pew Charitable Trusts, payday borrowers are disproportionately likely to be low-income African Americans with lower average levels of education. Borrowers are 62 percent more likely to earn less than $40,000 per year, 82 percent more likely to have lower than a four-year degree and 105 percent more likely to be African American.

LendingClub Schedules Third Quarter 2017 Earnings Release and Conference Call (Business Insider), Rated: B

LendingClub (NYSE: LC), America’s largest online marketplace connecting borrowers and investors, announced that it will report earnings for the third quarter of 2017 on Tuesday, November 7, 2017, after market hours. LendingClub will host a conference call to discuss the third quarter financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.

A live webcast of the call will be available at  under the Events & Presentations menu. To access the call please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061 with conference ID 7584209 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).

United Kingdom

Zopa CEO on lender freeze: Popular restaurants don’t ‘put on more tables, they take reservations’ (Business Insider), Rated: AAA

The CEO of peer-to-peer lending business Zopa has rejected claims the business is struggling to attract borrowers, saying the platform is still growing lending volumes by as much as 50%.

CEO Jaidev Janardana told Business Insider: “I do struggle a little bit with this thing that we’re struggling with borrowers. We have been growing [lending] by 45-50%. I don’t think there are other businesses that are growing at 50% year-on-year that would be looked at as struggling.”

Zopa has built up a waiting list of 15,000 people who want to lend over the platform. The company hopes to let some of them onto the platform towards the end of the year.

‘Consumer lending is always a cyclical business’

The Bank of England has been sounding the alarm on rising consumer credit levels and warned lenders in July not to “return to the punch bowl,” saying it is worried that lenders relaxing their lending criteria could lead to repeats of mistakes made during the financial crisis.

Orca’s New P2P Lending Investor Guide Makes a Splash: UK Surpasses £11B Cumulative Lending Mark (Crowdfund Insider), Rated: AAA

Orca’s analytic service recorded a new milestone for the asset class this month – £11bn cumulatively lent, all-time in the UK. With over 200,000 active investors and 30% of market share attributed to institutional investment, UK P2P lending is maintaining its growth trajectory, set for a market value of £15bn by 2020. In 2017 year-to-date, £3.4bn has been invested across P2P lending platforms, which is over £100m more than the 2016 total lent figure, according to the Guide.

Source: Orca

Download the guide here.

Legal 500 2017: The region’s top performers in banking and finance (Manchester Evening News), Rated: A

Law firms across Greater Manchester continue to act for a host of well-known lenders and borrowers on a wide range of leveraged, real estate and corporate and asset finance transactions.

While this year’s tiers one and two remain the same as last time, Eversheds Sutherland (International) LLP has moved up from tier four to tier three and gunnercooke LLP has moved from tier five to tier four.

TIER TWO – DWF has a ‘strong’ borrower practice whose experience spans corporate banking, acquisition finance, public sector finance, and peer-to-peer lending.

LendInvest Teams Up With UKPA to Launch Second Annual PropTech Influence List (Crowdfund Insider), Rated: A

On Thursday, UK-based p2p lending platform LendInvest announced it has teamed up with the UK PropTech Association (UKPA) to release the second annual PropTech Influence List.

The deadline to vote is November 3rd. The list will be announced at 

Search is on for PropTech Influencers of the Year (Estate Agent Today), Rated: B

The LendInvest PropTech Influencer List  recognises the 25 people doing the most to develop the understanding, reach and benefit of PropTech in the property market.

Nominations are open to anyone working in or contributing to PropTech in the UK and overseas.

Last year’s winner was Estate Agent Today contributor James Dearsley, who this year becomes one of the judges in the competition.

IT portfolio – debt/alternatives to gilts (Citywire Money Forums), Rated: A

In terms of alternative uncorrelated debt what are the alternatives? I hold Investec local currency EM debt, Carador income and Funding Circle IT.

Can the gilt portion be modified to other sources of debt? I have considered SQN Asset, and P2P global (recent weaknesses) as a top up. Will these forms of debt hold up in a downturn? I’m not so sure against gilts/treasuries which are overvalued but possibly the only real diversifier (I also hold 7% in gold).

SONECT wins LendIt Europe PitchIt startup competition (Bankless Times), Rated: B

SONECT, a platform that can convert anyone or any shop into a virtual ATM, is the PitchIt winner at LendIt Europe.

China

China’s Online Lending  Consolidates As Market Grows (PIIE.com), Rated: AAA

China’s online peer-to-peer (P2P) lending industry is going through a welcome consolidation. Weak, noncompliant platforms are failing, but long overdue regulatory tightening and still excessive competition is likely to further winnow down the 2,000 platforms online today to a few hundred in the coming years. However, those that survive will compete in a much larger market that has grown quickly despite a minefield of new regulations and frequent failures.

This post expands and updates two earlier installments in this series: an introduction to Chinese P2P in part 1, including its earlier growing pains and the regulatory loopholes they used to grow. Part 2describes regulatory measures taken up to July 2016, especially the difficulties involved with regulation through local officials.

Source: PIIE

P2P loans outstanding in China at the end of September are up 63 percent from a year ago, to RMB 1.15 trillion (around $173 billion).

Source: PIIE
European Union

Linked Finance aims to increase level of peer-to-peer lending (RTE), Rated: AAA

Linked Finance has raised €2 million in equity as part of plans to expand its business.

Since launching in 2013, Linked Finance has lent €34.5m to Irish SMEs, more than a third of which has already been repaid, and agreed its 1,000th loan in September.

Source: RTE

RTÉ’s Business News Weekly Podcast – October 13 (RTE), Rated: A

On this week’s podcast: Peer-to-peer lending platform Linked Finance raises €2m to fund its expansion and why small and medium sized Irish companies stand to benefit from more favourable tax treatment for employee share incentive schemes announced in Tuesday’s budget.

Listen to the podcast here.

Big banks discuss how to adjust to a digital economy (Business Insider), Rated: A

During a panel discussion at 

Source: Business Insider

 

Zinbaustein “Wohnen Im Village 11” Hits €625K Goal, Starts Investor Waitlist (Crowdfund Insider), Rated: A

Private investors may now participate in a new equity crowdfunding real estate round for a mortgage of residential buildings in Darmstadt / Frankfurt area of Germany.  “Wohnen Im Village 11” on zinsbaustein.de features ten semi-detached houses and one detached house.  Private investors can participate in the form of a subordinated loan from 500 euros to 10,000 euros with a maturity of approximately 18 months and receive an interest rate of 5.25 percent per year. There is a repayment option after 12 months, when construction and sales run according to schedule. To date, 625,000 euros have been raised from the crowd for the project; a waitlist has been started.

French fintech startup Manager.one raises €2 million (Tech.eu), Rated: B

Manager.one, a fintech startup based in Paris, has raised €2 million from angel investors for its online banking platform for entrepreneurs.

International

Finastra delivers next-generation payments technology on Microsoft Azure (Realwire), Rated: A

Finastra is bringing its next-generation payments solutions to the cloud via Microsoft Azure, Microsoft’s enterprise-ready trusted cloud platform. Banks will benefit from streamlined onboarding, as well as faster access to new products and upgrades. This alliance is an extension of Finastra’s cloud-based lending oversight solution that was previously launched on Azure in the US and Canadian markets in 2016. Since then, Finastra has broadened its relationship with Microsoft and is migrating its payments capabilities to Azure.

Worldcore: Bringing Banking to the Blockchain (BTCManager), Rated: A

Worldcore is an established online money transfer service, which has recently announced plans to expand its operation to create an online, blockchain-powered peer-to-peer lending platform. To this end, they have announced an ICO, which is currently scheduled to begin on October 14, 2017.

Jeff Woodward Joins Brickblock as CIO (BlockTribune), Rated: B

Brickblock, the investment platform connecting real-world assets and cryptocurrencies, has added experienced property investor and developer Jeff Woodward to its team as Chief Investment Officer (CIO).

In December, Brickblock will complete a world-first by selling an entire apartment building on the blockchain.

India

RBI announces strict KYC guidelines for prepaid payment (Jagran Josh), Rated: AAA

Africa

The SBM Group and SALT Technology Enter Exploratory Partnership to Collateralize Blockchain Assets (BlockchainNews), Rated: AAA

The State Bank of Mauritius, SBM Group and FinTech service provider SALT,  creators of the first Blockchain-backed loan platform, today announced that they have entered into an exploratory relationship to become the first to use Blockchain assets as collateral for lending services.

South America

Ripio Raises $ 31 Million in ICO Pre-sale (BlockTribune), Rated: AAA

Buenos Aires micro-lending startup Ripio has raised $31 million as part of an initial coin offering (ICO) pre-sale ahead of a new credit network launch. The public ICO will begin on October 24.

Investors in the pre-sale included Blacktower Capital, Blockchain Investors Consortium, and FBG Capital. According to the startup, participants were drawn from various parts of the world like Russia, South Korea and Canada.

Two FinTech Startups That Want to Reach Customers ‘Door-to-Door’ (Let’s Talk Payments), Rated: A

This year, the two largest contributions were made to Creditas, which received ~$18.87 million, mostly from IFC (the World Bank’s investment arm), and Avante – with ~$12.14 million received mostly of Fiinlab, innovation laboratory of the Mexican group Gentera, and the Vox Capital impact fund.

Avante, a FinTech startup that provides micro-loans, has already lent more than ~$31.45 million to 44,000 microentrepreneurs.

Creditas, an online lending platform that offers secured consumer loans to individuals with home and automobile as collateral, offers credit at lower rates using technology and data intelligence for efficiency. The startup is the second-largest Brazilian in funding, with a total of ~$28.3 million – only behind Nubank.

Authors:

George Popescu
Allen Taylor

Monday March 20 2017, Daily News Digest

lending club delinquency rates

News Comments Today’s main news: Experian, Finicity collaborate on MPL digitalization. RateSetter, Zopa among P2P lenders signed up on Bud. Lending Works launches 3-minute loan app. Creditas taps asset-backed market to fund auto loans. Today’s main analysis: PeerIQ performance monitor. OCC FinTech Charter: A new model for tech-enabled financial services? Today’s thought-provoking articles: Why CommonBond’s CEO says OCC charter […]

lending club delinquency rates

News Comments

United States

United Kingdom

Australia

China

India

South America

Asia

News Summary

United States

Experian and Finicity collaborate to digitize marketplace with less tedious experience for consumers and lenders (Yahoo! Finance), Rated: AAA

Experian®and Finicity have joined together to make it easier for consumers to apply for a loan, accelerating loan underwriting and broadening loan availability. The new technology also improves accuracy and reduces fraud risk for lenders. Experian’s new Digital Verification Solutions will deliver verification of assets and verification of income leveraging Finicity’s data aggregation and insight platform. Experian is the first credit bureau to implement this technology, which will give consumers the opportunity to secure mortgages as well as other types of loans with less paperwork and hassle by connecting with financial institutions digitally.

By digitizing the end-to-end mortgage process, loan approvals that take as long as 70 days, may be approved in as little as 10 days. With Experian’s industry-leading credit decisioning and Finicity’s account insights technology, consumers can rapidly complete the income and assets verification process through a simple digital experience.  Consumers will then permit delivery of appropriate account data, which is pushed to Experian’s Decisioning as a ServiceSM hosted platform. This will give lenders the ability to integrate consumers’ account data into their credit decisioning processes. As a result, lenders and other service providers will assess a consumer’s ability to pay and verify borrower income and assets in a manner compliant with the Fair Credit Reporting Act (FCRA).

Experian and Finicity’s partnership also will benefit the approximately 25 percent of the U.S. population with limited or no credit history, including millennials, who are the largest segment of the workforce and are increasingly applying for loans. While these consumers may have a limited credit history, most consumers have a checking and savings account, as well as other payment obligations such as rent, and utility and phone bills, which can demonstrate they are capable of repaying a loan.

PeerIQ Performance Monitor (PeerIQ), Rated: AAA

  • Lending Club targeted the most significant increases in borrowing rate to riskier borrowers in E, F, and G-grades. Prosper’s recent borrowing rate increases are mild comparing to Lending Club’s rate actions. We expect that the overall borrowing interest rates will continue to increase in response to hikes in Federal Funds rates
  • For Lending Club’s 36-mo and 60-mo products, delinquency rates continue to trend higher for 2016 vintage. We expect loans to approach peak delinquency after ~13 months of seasoning; for Prosper, we expect the 36-mo product to hit peak delinquency about 9 months of seasoning and 13 months for the 60-mo term product.
  • For both Lending Club and Prosper, charge-off rates continue to be elevated for loans in 2016 vintages. The spikes in charge off rates agree with delinquent loan pipelines as loans transition from delinquency to charge-off states. (We note that recent credit buy box tightening will not show up in the 2016 vintage).
  • We expect that originators continue to adjust pricing and credit modeling based on forward-looking credit market, Fed Funds rate expectations, the credit environment andthe competitive landscape in consumer unsecured lending.

See the full report here.

Why CommonBond’s CEO says fintech charter could be a game changer (American Banker), Rated: AAA

For the founder of an online lending startup, David Klein, CEO of CommonBond, talks like a sage.

The bearded entrepreneur notes approvingly that the conversations in his industry are becoming “more grounded and mature, rather than all about going to chase the shiny object,” and that company valuations are “catching up to reality.”

What’s new at CommonBond?

DAVID KLEIN: One of the things we are most excited about is what we call the 401(k) for student loans. This is SaaS-based technology that enables employers to contribute to their employees’ student loan repayment every month.

It is very early days, so only about 4% of companies have a student-loan-related benefit. That number is expected to be over 20% in two years.

Over 70% of millennials have student loan debt. Over 50% are thinking about student loans are thinking about them more than retirement and about 80% of them would choose a company to work for if they had this benefit.

In some of your talks over the last year or so, you’ve hypothesized that the number of marketplace lenders would soon shrink. Has it happened the way you thought it would? Have many hung on longer than you thought?

For online lending, 2016 was a year where the strong got stronger and the weak got weaker. There were a few shops that closed up and there were some players that became better known and entered 2017 stronger than ever. I think that continues in 2017 and 2018, regardless of geopolitical or macroeconomic picture, because if you study the emergence of industry, that’s what tends to happen.

What’s the key to that default rate? Are you chasing only the HENRYs?
We look at past credit and future prospects. We look at credit reports and FICO scores, but we look at cash flow, employment, industry of employment. We are looking at a host of factors.

What are your thoughts on the OCC’s proposed fintech charter?

The OCC charter would allow us to comply with regulation in one jurisdiction, instead of 51 jurisdictions including D.C. To the extent that we can save on costs, we could pass that along to customers.

It would affect capital costs. We might get access to low-cost deposits like banks do, we might get access to the Fed discount window to get close-to-free money and we might get access to better pricing in the capital markets by being a chartered institution. We’d be poised to significantly lower our cost of capital long term.

The OCC FinTech Charter: A New Model For Tech-Enabled Financial Services? (Payment Law Advisor), Rated: AAA

On February 21, DWT Payments team members Andy Lorentz and Tom Scanlon took part in a discussion organized by NYPAY that focused on the prospects of the OCC special purpose fintech charter.

View the presentation here.

The 5 Best ‘Alternative Investments’ to Consider (Newsmax), Rated: A

Private equityThese investments aren’t publicly traded or listed on the stock market. Private equity or venture capital firms invest in venture capital, start-ups, company growth, or restructuring of a company.

Real estate — Investing in property may include housing, apartment complexes, and commercial real estate. The Wall Street Journal explained that some self-directed individual retirement accounts allow people to diversify their investments into real estate, among other options, but there are many rules and risks. You also can invest in property indirectly through real estate investment trust (REIT) funds, which are available on public exchanges.

NEW REPORT: What’s The Ticket To Platform Payments Success? (PYMNTS.com), Rated: A

Radial, for example, an omnichannel technology and sales platform provider, recently debuted a new deferred payment option called Buy Now, Pay Later. The new payment feature, the result of a collaboration with European solution provider Klarna, allows customers to spread payments out over the course of six to 36 months. Similarly, fundraising platform Virgin Money Giving and payment processors Worldpay recently collaborated on a new payments system designed to handle the high number of donations that are made in the days and hours leading up to major events such as the London Marathon.

Meanwhile, PayPal looked to improve its platform with a new acquisition. The company announced plans to acquire multichannel bill payment processing and receivables company TIO Networks for a total of $233 million, according to reports.

Financial Poise™ Announces “EQUITY CROWDFUNDING,” a Four-Part Webinar Series, Available On-Demand Now through West LegalEdcenter (Benzinga), Rated: B

Financial Poise™ Webinars and West LegalEdcenter are pleased to announce the on-demand premiere of a new webinar series “EQUITY CROWDFUNDING 2017,” designed to introduce attorneys and business owners to the basics of investing in private companies through crowdfunding. Moderator Chris Cahill of Lowis & Gellen joins panelists from firms including Crowdcheck, CFX Markets, Crowdfunding Lawyers.net and Riggs Davie in Episode #1, Title III, Regulation A+, and State Crowdfunding Regimes.

Nasdaq Announces Development Role In Shaping Ad Contracts Blockchain (Yahoo! Sports), Rated: B

Securities exchange operator Nasdaq has announced it is helping to compile a blockchain for ad contracts, in partnership with the New York Interactive Advertising Exchange.

The blockchain is billed as being a transparent market mechanism for advertisers and publishers to set up ad contracts, creating a more fluid, price-driven environment for digital advertising.
It is hoped that the new system will provide a more efficient basis for the wider digital advertising industry, said to be worth in excess of $32 billion per year.
Nasdaq has already filed patents for its technology, in addition to launching its own private market Linq, powered by the same infrastructure, back in 2015.
United Kingdom

RateSetter and Zopa among P2P lenders signed up to money platform Bud (P2P Finance News), Rated: AAA

SIX PEER-TO-PEER lenders including RateSetter and Zopa have partnered with Bud, a new online platform and app that enables consumers to manage their finances on a single dashboard.

Zopa, Landbay and Assetz Capital have all got live pages on the platform, meaning that Bud’s customers will be able to manage their P2P loans alongside their bank accounts, pensions, mortgages and other investments.

LendingWell, Lending Works and RateSetter have also signed up to Bud, although their pages have not gone live yet.

Bud currently has 18 partners operational on the site, with another 20 signed up.

Walsh said that Bud is currently in talks with other P2P platforms.

It has been in its ‘beta’ testing phase since November and currently has around 4,000 customers signed up.

P2P lender launches three-minute loans through app (Bridging&Commercial), Rated: AAA

A fintech app has partnered with peer-to-peer (P2P) platform Lending Works to offer loans in just three minutes.

Revolut customers will now be able to apply for between £500-5,000 in credit in two minutes and receive funds on their contactless card almost instantly.

The London-based company also plans to enable a P2P lending marketplace among its own user base of 530,000 Europeans, ultimately allowing customers to lend and borrow money across borders.

RateSetter funds SME acquisition in the South East (P2P Finance News), Rated: AAA

RATESETTER has channelled £140,000 to fund a small- and medium-sized enterprise (SME) acquisition in the South East, as part of its focus on business lending in the region.

The peer-to-peer finance platform has arranged two loans to enable Thame-headquartered digital marketing agency Purple Frog acquire Oxfordshire neighbour OXLink, an IT specialist that will help it scale up its operations.

Zopa Celebrates Plus Products 1st Birthday (Crowdfund Insider), Rated: AAA

On Friday, peer-to-peer lender Zopa celebrated the one year birthday of its product, Zopa Plus, by taking a look back at its progress over the past twelve months.

While revealing how Zopa Plus has performed to date, the Zopa team explained that the product is performing in line with expectations. Although each individual investor has different Plus experiences, 73% of investors have notably invested for an average of at least six months, with no loan sales, have achieved actual returns of at least 6%.

Fintech Startup CurrencyCloud Raises m in Series D Funding Round (Finance Magnates), Rated: A

UK-based fintech company CurrencyCloud, a cross border payment-as-a-service provider, announced the raising of £20 million (US $25M) in Series D funding round. The company has raised from backers a total of £44 million ($61 million) in venture funding to date.

The firm has amassed an impressive roster of investors which this time included Alphabet’s venture arm GV, formerly Google Ventures, in addition to existing investors Notion Capital, Sapphire Ventures, Rakuten FinTech Fund, and Anthemis.

MarketInvoice names Zopa’s Giles Andrews as chairman (P2P Finance News), Rated: A

ZOPA co-founder Giles Andrews OBE has been appointed chairman of MarketInvoice, to help support the peer-to-peer invoice finance platform’s plans for growth this year.

Andrews will work directly with MarketInvoice’s co-founders Anil Stocker and Ilya Kondrashov to drive scale in the business, as well as chairing and managing the board of directors, the company said.

The high-profile appointment comes at a pivotal time for MarketInvoice, as it is looking to double its lending to £2bn this year.

 

Merseyside Pension Fund finances Canary Wharf development (IPE), Rated: A

The Merseyside Pension Fund has backed a £12m (€13.8m) loan secured against a development in Canary Wharf.

The £6.8bn public sector scheme has partnered with LendInvest on the deal.

The loan will help finance a planned development in London’s Docklands, which will include a 320-bedroom hotel and 199 residential units.

Digital Disruption Has Arrived In FinTech (Forbes), Rated: A

ClearBank, the first new clearing bank to be authorized in the UK in over 250 years launched on February 28th.

It is the only UK clearing bank that does not offer services direct to the consumer – a neutral and independent platform service that does not compete with its own customers.

There are big incentives for FinTechs and incumbents to use ClearBank. Put simply, they will be able to process payments and offer new competitive transactional banking services more cost effectively, efficiently and faster than has ever been possible.

I suspect ClearBank will be on the radar of everyone in the global FinTech ecosystem.

Blockchain, Distributed Ledger, Artificial Intelligence, and Identity technologies all promise to deliver technology enabled disruption, but appear to be slow out of the starting blocks with adoptable and scalable use cases. ed on February 28th.

Crowdfunding platform becomes Sharia-certified (Bridging&Commercial), Rated: A

Crowdfunding property investment platform Yielders has secured full Sharia certification from the UK Islamic Finance Council (UKIFC).

Launched in April 2016, Yielders specialises in pre-funded investment opportunities with pre-defined rental incomes, enabling investors the chance to start earning returns almost immediately.

How to find your way through the Isa maze (This is Money), Rated: B

Over the years, Individual Savings Accounts – Isas for short – have helped millions of people build long-term wealth they can access tax-free and at any time (unlike a pension).

But the Isa is about to get a major facelift which will make it a more exciting proposition than ever before.

From the beginning of the new tax year on April 6, a family of four – with two children under the age of 18 – will between them be able to squirrel away a maximum £48,256 in Isas over the course of 12 months.

Australia

AI automation FinTech startup Presagen secures competitive commercialization funding (Newsmaker), Rated: A

AI automation FinTech startup Presagen has secured its first round of funding as part of the South Australian Early Commercialization Fund  (SAECF), which is administered by TechInSA. SAECF is a new government grant funding scheme for companies with innovative technologies that have potential for global markets and large revenues. Presagen has been awarded the first of three possible phases of funding. Companies that are awarded all three phases can receive up to $500,000 in funding to support global commercialization initiatives. Presagen will use the funding to bolster its growing technical team.

Presagen uses a unique behavioral AI technique which emerged from the defense industry to automate complex human-centric tasks using software.

China

China, Blockchain & The Holy Grail of Marketplace Lending (CoinDesk), Rated: AAA

When one of the world’s largest corporations gets together with one of its largest peer-to-peer (P2P) lenders, you can almost hear the market sit up.

That’s what happened last week, when Chinese conglomerate Foxconn joined forces with P2P lender Dianrong to launch a blockchain platform for working capital. The benefits to supply chains are clear: smoother cash flows for suppliers will strengthen their liquidity, lower their costs and avoid delays in delivery due to lack of funding.

Should this change occur as projected, investment is likely to migrate to the stronger P2P lenders, shrinking the pool of potential borrowers.

The opportunity to lend to entities with a better-than-average risk profile at a reasonable return is the ‘holy grail’ of marketplace lending.

Peak Establishes New Fintech Subsidiary in China (Military-Technologies), Rated: B

Peak Positioning Technologies Inc. (CSE: PKK) (OTC PINK: PKKFF) („Peak” or the „Company”) today announced that the Company has established a new fintech subsidiary in Shanghai.

India

RBI likely to add tough riders to regulate P2P growth (India Times), Rated: AAA

The Reserve Bank of India (RBI) is expected to introduce strong riders to prevent the nimble peer-to-peer (P2P) lending industry from growing rapidly and suffering the same fate it did in many countries where P2P almost ended up looking like a ponzi scheme.

The RBI, which is expected to release the guidelines on the industry soon, believes that while the sector is yet to show much scale and traction, there should be a strict vigil on its functioning.

The regulator is worried about some cash-based unscrupulous lenders joining these platforms and lending at high interest rates, and would prefer institutional lenders to enter the space and perhaps reduce rates.

Credy looks to digitize personal lending in India  (TechCrunch), Rated: B

Lending platform Credy is looking to change the way people gain access to personal loans in India. The company, which is currently a part of Y Combinator’s Winter 2017 batch, is digitizing the process and improving access to capital for residents by opening up peer-to-peer loans to a wider group of borrowers and lenders.

With all that in mind, Credy has emerged to improve personal lending in a market that is worth $50 billion and is growing at a 30 percent rate.

South America

Brazil’s Creditas taps asset-backed debt market to fund auto loans (Reuters), Rated: AAA

Brazilian financial technology company Creditas Soluções Financeiras Ltda tapped the asset-backed debt market to raise 50 million reais (US$16 million) for auto loan refinancing, its chief executive said, an area shunned by traditional lenders after soaring delinquencies.

Sergio Furio said the transaction in February was the first in which Creditas fully decided collection and credit scoring procedures. Proceeds will go to refinance borrowers at a fraction of the cost of auto loans from banks.

Consumers in Latin America’s biggest country pay an average 190 percent a year for unsecured overdraft, credit card and consumer loans with banks.

Secured personal credit accounts for 1 percent of Brazil’s outstanding lending, a sign large banks have overlooked a segment that could thrive as benchmark domestic interest rates approach single-digits.

Asia

Our fintech future (Bangkok Post), Rated: A

In a digital world where the exchange of money is being revolutionised, banks are stepping up their collaboration with financial technology specialists to shape the future of financial institutions along with their security and data collecting systems.

While the internet has made banking much easier for consumers, it can also be a gold mine for hackers. In the old days they were simply called thieves, and they are breathing down the necks of banks, which are racing to find ways to make security cheaper and more effective. This is where fintech comes in.

In addition to working with fintech innovators on security systems and on ways to make customers’ banking experience better and faster. Mobile applications and various other electronic payment systems besides the ATM are the top examples that come to mind.

The Malaysia-based bank is broadening its fintech reach by joining with the likes of Samsung Pay and Go-Jek, a transport, logistics and payments startup in Indonesia, to provide more payment channels. It is also collaborating with the Thai mobile market leader Advanced Info Service for a mobile point of sale application, an e-wallet system for mobile money transfers, as well as Touch N’ Go, whose customers include Malaysian tollway operators, and the shopping portal Lazada for e-commerce payments.

US-based IDC provides market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets.

Artificial intelligence (AI) applications used to collect and analyse this personal information are getting smarter every day, opening more opportunities.

Mobile banking applications can be about providing services such as information about exchange rates or locations of businesses since it is not always about money transactions.

Authors:

George Popescu
Allen Taylor