Thursday October 3 2019, Weekly News Digest

banks mortgage

News Comments Today’s main news: Morningstar to rate blockchain securities. nCino raises $80M. RateSetter rolls out Access, Plus, Max. Revolut losses double. Today’s main analysis: Race and homeownership. Today’s thought-provoking articles: Big banks are losing mortgage share. Race and homeownership. LendIt Fintech Europe highlights. International P2P lending volumes for September 2019. United States Morningstar to offer […]

The post Thursday October 3 2019, Weekly News Digest appeared first on Lending Times.

banks mortgage

News Comments

United States

United Kingdom

International

European Union

Other

News Summary

United States

Morningstar Inc. will offer ratings to blockchain based securities (Ripple Coin News), Rated: AAA

Chicago-based financial service provider, Morningstar Credit Ratings announced plans to diversify its business operation by providing ratings for debt securities issued on public blockchains, also known as crypto-assets. Morningstar Inc, the parent company of the rating agency is valued at $6.4 billion. Last year it generated $1.7 billion in revenue. The company is well known for rating mutual funds from giants of the financial world like Prudential and  Morgan Stanley among others.

North Carolina-based Fintech Startup nCino Raises $ 80M (Crunchbase), Rated: AAA

North Carolina-based nCino, which has developed a cloud-based operating system for financial institutions, has raised $80 million in a round of funding led by T. Rowe Price Associates Inc.

Bank Wars; ABS East + Blockchain; Housing (PeerIQ), Rated: AAA

In U.S Housing, borrower home equity is hitting all time highs. Homeowners with a mortgage saw equity increase by 4.8% since 2Q2018. This equates to $4,900 gained per American homeowner and a strengthening of the US consumer balance sheet.

Over the past ten years, the largest American banks – Wells Fargo, JPMorgan, and Bank of America – have seem their share of home loan originations fall 30% as digital customer friendly non-banks such as Quicken Loans take share.

Source: PeerIQ, Financial Times

White Americans Have the Highest Homeownership Rates but There Are Large Differences Among Cities (LendingTree), Rated: AAA

Americans who identify as white own a disproportionately large percentage of homes in all of the nation’s 50 largest metros. White Americans make up an average of 59% of people in the metros featured in our study, but they own around 73% of owner-occupied homes.

Where white Americans own the most homes relative to their overall population

New York

% of the population – White alone: 46.99%
Median household income – White alone: $91,806
% of owner-occupied homes – White alone: 68.65%
Difference between % of owner-occupied homes and % of population: 21.66%

San Diego

% of the population – White alone: 46.20%
Median household income – White alone: $80,276
% of owner-occupied homes – White alone: 65.37%
Difference between % of owner-occupied homes and % of population: 19.17%

Phoenix

% of the population – White alone: 56.41%
Median household income – White alone: $64,423
% of owner-occupied homes – White alone: 75.17%
Difference between % of owner-occupied homes and % of population: 18.76%

Source: LendingTree

Where white Americans own the least homes relative to their overall population

Pittsburgh

% of the population – White alone: 85.82%
Median household income – White alone: $59,089
% of owner-occupied homes – White alone: 93.29%
Difference between % of owner-occupied homes and % of population: 7.47%

Source: LendingTree

BFS Capital Eliminates Upfront Fees to Simplify Financing for Small Business Owners (Yahoo! Finance), Rated: A

BFS Capital today announced it has eliminated all upfront fees on its financing solutions, including loans and business advances, as it simplifies pricing for small business owners.

BFS Capital customers can now apply for and receive up to $500,000 in financing with no origination fees, no processing fees and no upfront costs.

Self Announces The Self Visa Credit Card, A First-Of-Its-Kind Secured Credit Card That Does Not Require A Credit Check (Globe Newswire), Rated: A

Self, a leading fintech startup offering people a way to build their credit while also saving money, today announced the release of the Self Visa® Credit Card. This first-of-its-kind secured card uses a unique funding model to provide customers with a line of credit without the need for a significant upfront investment or a credit check – two areas that perennially sideline subprime consumers who are looking to build their credit scores.

The Crowdfunding Revolution Might Never Come To CRE (Bisnow), Rated: A

Crowdfunding has not coalesced into the influential force in commercial real estate some may have expected, and is at risk of being decimated by the next economic downturn.

RiverNorth Marketplace Lending Announces Monthly Distribution of

RiverNorth Marketplace Lending Announces Monthly Distribution of $0.18 Per Share (Crowdfund Insider), Rated: A

.18 Per Share (Crowdfund Insider), Rated: A

RiverNorth Marketplace Lending Corporation, an established and currently operating as a closed-end interval fund dedicated to the marketplace lending asset class, announced on Tuesday its monthly distribution of $0.18 per common share for the months of October, November, and December 2019.

The Robot Revolution Will Wipe Out 200,000 U.S. Banking Jobs in the Next Decade (Fortune), Rated: A

Technological efficiencies will result in the biggest reduction in headcount across the U.S. banking industry in its history, with an estimated 200,000 job cuts over the next decade, Wells Fargo & Co. said in a report.

The $150 billion annually that the country’s finance firms are spending on tech — more than any other industry — will lead to lower costs, with employee compensation accounting for half of all bank expenses, said Mike Mayo, a senior analyst at Wells Fargo Securities LLC.

Goldman Sachs Tries Banking for the Masses. It’s Been a Struggle. (WSJ), Rated: A

Two dozen of Goldman Sachs Group Inc.’s most profitable traders were kicked off their desk last year to make room for the swelling ranks of the firm’s Main Street lending arm.

Small bank’s big digital goal: Launch 3 niche banks (American Banker), Rated: A

The first one, introduced this summer, is called “booyah” and is aimed at college students and young graduates. The $122 million-asset bank sees it as a way to target a specific audience outside the central Florida area and boost deposits in order to ward off competitive threats from fintechs.

The Seven-Year Auto Loan: America’s Middle Class Can’t Afford Its Cars (WSJ), Rated: A

Walk into an auto dealership these days and you might walk out with a seven-year car loan.

That means monthly payments that last well past when the brake pads give out and potentially beyond when the car gets traded in for a new one. About a third of auto loans for new vehicles taken in the first half of 2019 had terms of longer than six years, according to credit-reporting firm Experian PLC. A decade ago, that number was less than 10%.

Naborly Raises $ 7.5M in Seed Funding (FINSMES), Rated: A

Naborly, a San Francisco, CA-based credit bureau for the rental industry, closed its $7.5m seed funding round.

How Much Money Can I Get From a Business Loan? (All Business), Rated: A

It’s rare for two loan offers from two lenders to come out to exactly the same number. Different lenders (traditional banks, online lenders, alternative lenders) evaluate a variety of factors, have different algorithms, and may place more emphasis on different aspects of your business history.

Coinbase Announces 1.25% APY on USDC Holdings (DeFi Rate), Rated: A

Today, Coinbase announced the launch of USDC rewards. US Coinbase customers are now eligible to earn 1.25% APY rewards on all USD Coin ($USDC) held on Coinbase.

This announcement comes amid the DeFi boom in 2019. While 1.25% APY is substantially higher than traditional savings rates at banks, it’s still lagging behind the broader DeFi lending market. As of writing, Compound currently offers 5.34% APY on USDC holdings while dYdX offers 3.85% APY – View current USDC lending rates. This doesn’t account for other stablecoins, such as Dai, where holders can earn upwards of 8%.

Investors Say Curo’s Bid To Nix Their Suit Misses The Point (Law360), Rated: A

Investors on Tuesday said their stock-drop suit against online lender Curo is
about misrepresentations regarding transition away from its most profitable product, not simple failure to meet financial goals, as the company suggests. The online lender said in an August dismissal bid that investors were trying to plead “fraud by hindsight” case in alleging Curo misled them about transition away from offering lucrative single-pay loans in Canada, which had drawn the scrutiny of regulators there, and into longer-term open-end loans. 

eOriginal Chief Product Officer Honored as a 2019 HousingWire Tech Trendsetter (PR Web), Rated: B

eOriginal, a digital lending technology pioneer, is proud to announce that Simon Moir, Chief Product Officer, has been named to HousingWire’s Tech Trendsetters list for 2019. HousingWire’s inaugural award recognizes the impactful and innovative technology leaders serving the housing and mortgage finance industry. This is on the heels of eOriginal’s second consecutive listing as one of HousingWire’s HW Tech 100TM in April 2019.

OYO Announces Partnership With Biz2Credit to Provide Small Business Financing Options to Hotel Owners (Globe Newswire), Rated: B

OYO, the world’s third-largest and fastest-growing chain of hotels, homes and spaces*, has partnered with Biz2Credit to provide working capital and commercial real estate loans to existing and potential hotel partners across the United States.

Finastra Launches Fusion Mortgagebot Data Insights to Help Financial Institutions Optimize their Mortgage Business (Financial Content), Rated: B

Finastra has launched Fusion Mortgagebot Data Insights – a powerful new tool that benchmarks mortgage borrower behavior and demographics for banks and credit unions against that of more than 1,400 other Fusion MortgagebotPOS users. The solution leveraged Big Data and machine learning to provide users with new insights into consumer behavior to drive a better borrower experience.

Seattle Bank expands relationship with Finastra to drive innovation (Finastra), Rated: B

Seattle Bank, a single branch boutique bank with $650 million in assets, has selected Fusion Phoenix from Finastra to be the open, modern core to run its banking operations, enabling the bank to better serve clients. The core banking system will be integrated with additional Finastra solutions, including Fusion Mortgagebot, Fusion Card Payments, Fusion Analytics, Fusion Item Processing Services, Fusion LaserPro, and Fusion Digital Banking.

United Kingdom

Welcome to Access, Plus and Max! (RateSetter), Rated: AAA

I am delighted to say that our three new investment products – Access, Plus and Max – launched today and are ready for you to enjoy.

Fintech unicorn Revolut’s losses double as it pushes for global expansion (CNBC), Rated: AAA

British financial technology start-up Revolut’s losses doubled in 2018, the firm said Tuesday, as the company embarks on an aggressive global expansion.

The London-headquartered firm recorded a £32.8 million ($40.3 million) net loss on revenues of £58.2 million for 2018. That was more than double the £14.8 million loss it posted a year earlier, while revenue climbed 354%.

Visa Expands Alliance with Revolut to Grow in Fintech Space (Zacks), Rated: A

Visa Inc. (V – Free Report) has expanded its partnership with fintech company Revolut. This London based company will be assisted by Visa to expand its business globally.

LandlordInvest staff asked to avoid EU travel as P2P lenders prepare for Brexit deadline (P2P Finance News), Rated: A

LANDLORDINVEST has asked staff to avoid travelling outside the UK after 31 October as peer-to-peer lending platforms prepare for the latest Brexit deadline.

Small business owners should beware when backing their business debt (Money Week), Rated: A

After all, one argument for setting up a business as a limited company, rather than operating as a sole trader, is that you separate your affairs from the company’s.

However, while this is true in theory, it may not pan out in practice. If your business needs to borrow, lenders often expect owners to stand behind the loan. They ask for a personal guarantee that the debt will be repaid. These guarantees aren’t secured – they’re not tied to a particular asset, such as your home – but they do give lenders a legal right to come after your personal wealth in the event your business defaults.

The future of finance is fintech (Raconteur), Rated: A

When Innovate Finance was formed five years ago, with a mandate to represent an emerging UK fintech community, the picture was different to today. The focus was on models challenging traditional approaches to banking, disrupting the incumbents’ model that had stood for decades.

In the years since, peer-to-peer lending became simpler, management of personal finances became more accessible, and remittance processes became faster and more affordable.

Brokers should be Open Banking advocates (Bridging and Commercial), Rated: A

It’s now more than a year and a half since the introduction of Open Banking, which allows people to securely share data about how they spend their money with other parties.

Drapers and Klarna launch Next Generation Entrepreneurs (Drapers), Rated: A

Drapers’ Next Generation Entrepreneurs are the founders and chief executives that we think are changing fashion. The list shines a light on the new wave of game-changers, innovators and boundary-breakers that are making their mark on the UK fashion industry, as well as emerging businesses that exhibit innovative, entrepreneurial spirit.

Dutch app-only bank Bunq to launch in UK this week (AltFi), Rated: A

The Dutch app-only bank bunq is to launch in the UK this week, saying there are “too many traditional banks” in the UK.

10 Respected Entrepreneurs Reveal How Failures and Triumphs Shaped Who They Are Today (Digital Journal), Rated: A

– Courtney Nichols Gould, Founder& co-CEO, SmartyPants Vitamins
– Annie Jackson, co-founder & COO, Credo Beauty
– Sarah Kauss, Founder & CEO, S’well
– Stephen Kuhl, co-founder & CEO, Burrow
– Renaud LaPlanche, co-founder & CEO, Upgrade, Founder of Lending Club (NYSE: LC)
– Jody Levy, Founder, CEO & Creative Director, World Waters (Maker of WTRMLN WTR)
– Betty Liu, Founder of Radiate, Executive Vice Chairman of The New York Stock Exchange (NYSE)
– Ben McKean, Founder, Hungry Root
– Sasha Plavsic, Founder & CCO, ILIA Beauty
– Nat Turner, co-founder & CEO, Flatiron Health

Ex-City minister shines spotlight on P2P lending secondary markets (P2P Finance News), Rated: B

The former City minister, who has already tabled several parliamentary questions regarding the role of the Financial Conduct Authority (FCA) in the collapse of Lendy and Collateral, has widened the scope of his P2P queries.

He has tabled two parliamentary written questions in the past week.

European Union

How Linked Finance is Linking Irish SMEs With Quick Loans (deBanked), Rated: AAA

The nation’s Central Statistics Office puts the number of active enterprises in the private business economy at over 250,000. As of June, Linked Finance had made more than 2,100 loans for a grand total of more than €100 million.

LendIt Fintech Europe 2019 Conference Highlights (Lend Academy), Rated: AAA

We have just wrapped up what I think has been the most successful European conference LendIt has ever had.

We kicked off the show with Rishi Khosla, CEO and Co-Founder of OakNorth. Their approach to underwriting is super interesting. While they have very much a digital approach, they are originating loans typically for £5 million to £10 million to fast growth companies.

Bnext raises $ 25 million for its mobile banking alternative (TechCrunch), Rated: A

Fintech startup Bnext has raised a $25 million funding round. The Spanish company is building a banking product and has managed to attract 300,000 active users.

You can lend money to small and medium businesses and earn interest through October, you can save money using Raisin, you can get a loan, a mortgage, an insurance product, etc. Bnext generates revenue from those partnerships.

International

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

Mintos leads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 639 million Euro.

Milestones in culumulative volume lent crossed this month:

Source: P2P-Banking
Australia

P2P lender partners with aggregator (Broker News), Rated: AAA

Peer-to-peer lender RateSetter has announced a partnership with PLAN Australia that will make its unsecured personal loan and car loan products available to the group’s 1,700 brokers and their clients.

National Australia Bank to provide $ 57m warehouse funding facility to Symple Loans (AltFi), Rated: A

Australia’s biggest business bank is furnishing a $57m (£46m) warehouse funding facility to personal lender Symple Loans, as part of its $2bn (£1.63bn) commitment to fund technology startups.

Which banks have cut home loan rates already? (mozo), Rated: A

It’s been two days since the Reserve Bank board made the call to lower the official cash rate from 1.00% to 0.75% – an historically low rate in Australia.

Athena and Homestar raced out of the blocks following Tuesday’s RBA announcement – both delivering full 0.25% cuts to their respective variable rate home loans before the ink on RBA Governor Philip Lowe’s monetary policy statement was dry.

Fellow online lender UBank wasn’t far behind after announcing a 0.25% rate cut of its own across a number of variable rate offers.

Asia

Indonesia’s State-Owned Pawnshop PT Pegadaian to Invest $ 35 Million in Local Fintech Firms (Crowdfund Insider), Rated: AAA

The state-owned pawnshop PT Pegadaian in Indonesia is reportedly planning to invest Rp 500 billion (appr. $35.26 million) in several local Fintech firms this year.

Another Milestone Comes True: INLOCK Is Listed on One of the Largest Crypto Exchanges (NewsBTC), Rated: A

On September 30, 2019, after nearly six months of preparation, the INLOCK project, a peer-to-peer lending solution, was listed on the Liquid by Quoine exchange, one of the largest Japanese crypto exchanges in the Asian region, with a daily turnover of $150-200 million.

INLOCK is a peer-to-peer lending platform; its customers can lend or borrow using their cryptocurrencies as a collateral.

40 Innovative Solutions Shortlisted for 2019 FinTech Awards (MAS), Rated: A

The Monetary Authority of Singapore (MAS) and The Association of Banks in Singapore (ABS) announced today that 40 finalists have been shortlisted for the FinTech Awards  to be presented at this year’s Singapore FinTech Festival x Singapore Week of Innovation and Technology (SFF x SWITCH).

Africa

CredoLab set to drive financial inclusion in South Africa (Next Billion), Rated: AAA

Credit scoring fintech company, CredoLab announced on Tuesday, 1 October 2019, that it has officially launched in Africa. Starting in South Africa, CredoLab is aiming to drive financial inclusion in emerging economies on the continent by credit scoring more people, especially those who are new to banking or credit.

Canada

Stability’s important, but Canada needs to take more chances with fintech (Financial Post), Rated: A

According to Ernst & Young’s 2019 Global Fintech Adoption Index, Canada is 14 points, and the U.S. 18 points, behind the global average of 64 per cent consumer fintech adoption, and we trail world leaders like China, India and Russia by even more. The two countries’ approaches to regulating fintech, which in many ways reflect enduring national stereotypes, almost certainly have contributed to our continent’s fintech lag.

Authors:

George Popescu
Allen Taylor

The post Thursday October 3 2019, Weekly News Digest appeared first on Lending Times.

Monday May 7 2018, Daily News Digest

Morgan Stanley collateral comparison

News Comments Today’s main news: Square funded $339M to SMBs in Q1. RateSetter joins Finsure, LoanKit panels. WeLab to become licensed virtual bank. CredoLab nabs $1M investment. Today’s main analysis: MSRP 2018-SC1 resecuritization deep dive. Today’s thought-provoking articles: CommonBond highlights desire for student loan help from employers. Contrasting OnDeck with peers. Financial inclusion in the rich world. P2P lending, MPL unicorns […]

Morgan Stanley collateral comparison

News Comments

United States

United Kingdom

China

International

Asia

Other

News Summary

United States

Square Funded $ 339M to SMBs in Q1 (deBanked) Ranked: AAA

Square’s small business funding arm, Square Capital, made over 50,000 business loans for a total of $339 million in Q1, according to the company’s latest earnings report. That figure is a 35% increase year-over-year and puts them on pace to break last year’s $1.177B total. OnDeck, by comparison, who is arguably their top rival, made $2.11B in business loans last year.

MSRP 2018-SC1 Resecuritization Deep Dive (PeerIQ), Rated: AAA

A recent Bloomberg article discussed ratings on and the performance of MPL ABS. According to the article, ratings agencies that provide lower loss estimates on ABS transactions tend to do the most business, in part due to the “issuer paid” model. While there is no way to verify “ratings shopping” behavior, we do believe there are a few observations to share to balance the discussion.

Overall loss estimates have tended to lower with successive deals as ratings agencies gain access to longer performance histories. The securitization structures have also been extremely robust – we have seen about 10% of outstanding balance breaching triggers so far.

Deal Deep Dive MSRP 2018-SC1

Morgan Stanley is resecuritizing a portion of the residual tranche of SCLP 2015-1 (SoFi’s first consumer loan ABS) via MSRP 2018-SC1. SCLP 2015-1 had an original collateral pool of $252 Mn and issued $189 Mn in Class A notes. Today $96 Mn of that pool and $51 Mn of the A notes are outstanding. MS is issuing $37 Mn in a Class B bond with an initial CE of 11.2% that is rated BBB by Kroll.

Realized losses on SCLP 2015-1 are at 5.31%, 1.26% below KBRA’s initial estimates. KBRA is also lowering its total cumulative loss estimate on SCLP 2015-1 from 8.5% to 8.0%.

Source: PeerIQ, KBRA
Source: PeerIQ, KBRA

New Study From CommonBond Highlights Desire for Help with Student Loans from Employers (Lend Academy) Rated: AAA

The market for student loans has continued to climb. According to data from CommonBond, 44 million Americans currently owe $1.4 trillion in student debt with the average student loan debt in 2016 coming in at $37,172.

Source: Lend Academy; Commonbond

CommonBond’s study included 1,500 workers and 500 human resource executives. Their key findings as provided in their press release are copied below

  • Almost 75 percent of all workers have taken out loans to fund their own education, while 21 percent of workers expect to take out a loan for a child or other family member’s education in the next five years.
  • For employees with student debt, student loan repayment is the most-requested financial wellness benefit; however, human resources teams rank student loan repayment as their third priority.
  • Seventy-one percent of human resources executives see their benefits offering as innovative, compared with 50 percent of employees.
  • Seventy-eight percent of employees with current or future student loan debt want their employer to offer this benefit, and 65 percent of employees over age 55 in these categories want the same.
Source: Lend Academy; Commonbond

 

Contrasting OnDeck Capital (NYSE:ONDK) & Its Peers (Macon Daily) Rated: AAA

OnDeck Capital (NYSE: ONDK) is one of 29 public companies in the “Nondepository credit institutions” industry, but how does it contrast to its competitors? We will compare OnDeck Capital to related companies based on the strength of its valuation, risk, analyst recommendations, dividends, institutional ownership, profitability and earnings.

OnDeck Capital’s competitors have higher revenue and earnings than OnDeck Capital. OnDeck Capital is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Lending Club (LC) Set to Announce Quarterly Earnings on Tuesday (The Lincolnian Online) Rated: B

Lending Club (NYSE:LC) will be issuing its quarterly earnings data after the market closes on Tuesday, May 8th. Analysts expect the company to announce earnings of ($0.01) per share for the quarter.

Elevate: Providing Responsible Credit to Non Prime Lenders (Crowdfund Insider) Rated: A

While interest rates may be high, this is necessary to manage the overall portfolio risk. Elevate’s default rate is pegged at around 23% – which is quite a bit higher than a prime credit provider. The online lender recently announced their Q1 results and there services are booming. Elevate more than quadrupled year-over-year net income with 24% revenue growth and new customer growth of 32%. So they must be doing something right.

Better Mortgage Hires Former OnDeck Chief Financial Officer (BusinessWire), Rated: A

Better Mortgage, a digital mortgage company working to improve access to home financing through transparency, honest guidance and zero commissions, today announced that it has hired Howard Katzenberg as Chief Financial Officer.

Student Loan Genius Raises $ 4.7 Million in New Funding (Finovate) Rated: A

Xconomy is reporting that Austin, Texas-based Student Loan Genius has raised $4.7 million in funding. The news was seconded by Austin Business Journal, which added that 11 investors have participated in the round. Both reports – as well as a third from AmericanInno, are based at least in part on a SEC Form D filing, which suggests that the $4.7 million was part of a larger $5.8 million fundraising initiative. As reported, the new capital more than doubles Student Loan Genius’ total equity funding to more than $7 million.

Federal Court Dismisses “Speculative” And “Attenuated” Lawsuit By The Conference Of State Bank Supervisors Over Proposed OCC Fintech Charter (Mondaq) Rated: A

On Monday, a federal district court judge in the District of Columbia issued an order dismissing a lawsuit brought by the Conference of State Bank Supervisors (CSBS) regarding a proposal of the Office of the Comptroller of the Currency (OCC) to issue federal charters to certain Fintech firms. In dismissing the case, US District Court Judge Dabney L. Friedrich held the CSBS did not have standing to sue because the OCC had not yet officially decided to issue charters to Fintech companies. Judge Friedrich explained that the CSBS lacks standing to bring the suit because the harms it alleges are “contingent on whether the OCC charters” a Fintech company, and “[s]everal contingent and speculative events must occur before the OCC” issues such a charter.

Banks are using open source to collaborate, not compete (Tear Sheet) Rated: A

On the consumer side, product and marketing teams in banks in the Zelle network currently face new challenges as their partnership is crucial to their success. And on the backend, when banks began paying attention to blockchain technology (the original bitcoin blockchain was a breakthrough of open-source development), the largest companies including JPMorgan Chase and Wells Fargo joined industry consortia working on open-source blockchains.

Commercial loan slump chips away at bankers’ reluctance to automate (American Banker) Rated: A

Loan executives at the $5.1 billion-asset bank wanted commercial clients’ information in one place, where anyone within the organization could access it — especially from the road on their mobile phones.

In a report aptly titled “The Productivity Crisis in Commercial Lending,” David O’Connell, a senior analyst at Aite Group, found that at 78% of the banks he surveyed, lenders spent at least 30% of their time on noncore job responsibilities. At 46% of those institutions, lenders spent at least 40% of their time on those noncore functions.

 

Banks say they aren’t profitable enough for tech giants to bother with their business (Quartz) Rated: A

We’re-not-profitable-enough-to-bother-with is an unusual defense, which is why it caught my attention amid the usual distractions at these sorts of conferences (texts, emails, the snack table). The banker cited return on equity, which is a measure of profitability, as proof. FactSet calculates this measure by dividing net income by a trailing two fiscal-period average of total shareholder equity:

Source: Quartz

Granted, tax cuts and deregulation in the US will make banks there more profitable than before. But Amazon is making so much money selling cloud computing to the financial industry (charging them by the second) that taking deposits or writing mortgages wouldn’t seem worth the hassle by comparison.

United Kingdom

P2P lender joins Finsure and LoanKit panels (The Adviser) Rated: AAA

Peer-to-peer lender RateSetter has joined the panel of Finsure and LoanKit, giving accredited brokers access to its personal and green loan solutions.

As of this month (1 May), more than 1,400 brokers accredited with aggregators Finsure and LoanKit will be able to offer their clients personal loans and green loan products from the growing retail lender.

Financial inclusion in the rich world (The Enconomist) Rated: AAA

A report published in March 2017 by a House of Lords committee estimated that 1.7m adult British residents have no bank account; 40% of the working-age population have less than £100 ($140) in cash savings; and 31% show signs of financial distress.

In Britain such lenders include pawnbrokers, offering an APR of between 25% and 101% for a secured loan; doorstep lenders such as Provident, the biggest, which will charge an APR of 1,558% for a 13-week loan; “payday lenders” such as Wonga, which offer similar rates for a loan to be repaid after 1-35 days in one lump sum; and “rent-to-own” lenders, such as BrightHouse, which offer finance for purchases to be repaid in installments.

Are we seeing the beginning of the end for retail banking? (CL News) Rated: A

At the beginning of this week, the first waves splashed up on the shore as the Royal Bank of Scotland announced the closure of 162 branches throughout the UK, with the loss of 800 jobs. The full list is here if you would like to see if your town is affected.

The robot revolution gathers pace (Money Week) Rated: B

The first wave started a decade ago with the rise of online stockbroking platforms, which brought down dealing costs and sparked a wave of DIY investing. Then came the rise of robo-advisers – a rather daft term to describe what are in effect online wealth managers or advisers.

Now a second wave of new entrants has hit the market. Some big players have launched their own robo products, chief among them being private banks such as UBS and Investec – trusted brands with a great investment pedigree. They tend to focus on wealthier clients, however. Investec has a minimum investment of £10,000, while for UBS it’s £15,000. Another big player is IG and its Smart Portfolio, which has lower fees and a minimum investment of £500 per portfolio. Alongside these sit smaller companies such as Moneybox, Wealthify and Moola. The latest platform, Exo, launched just this week.

China

WeLab joins fintech race to become Hong Kong’s first licensed virtual bank (South China Morning Post) Rated: AAA

WeLab, Hong Kong’s home-grown fintech unicorn, is poised to be among the first batch of companies to apply for a virtual banking license from the Hong Kong Monetary Authority, according to its co-founders.

In the coming weeks, the HKMA is due to issue guidelines for virtual banking regulation based on a consultation in February.

CreditEase becomes Milken Institute’s first Asian Strategic Partner (PR Newswire) Rated: A

Tang Ning, founder and CEO of CreditEase, attended the 21st Milken Institute Global Conference in Los Angeles as both a strategic partner and a speaker, and said on the global capital market panel that driven by technology, the middle class and the high-net-worth individuals, a strong new economic growth can be seen in China these years, adding that China is now entering a new era.

European Union

Taaleri to buy Finnish robo-advisor wealth management firm Evervest (Banking Business Review) Rated: A

Taaleri Wealth Management has agreed to acquire Finnish robo-advisor wealth management firm, Evervest, for an undisclosed sum.

 

The acquisition will add Taaleri with functioning digital platform, which will help to extend service offering for customers.

Subject to approval by the Finnish Financial Supervisory Authority, the deal is expected to complete in the first half of this year.

Will ‘buy now, pay later’ change the in-store customer experience? (Econsultancy) Rated: A

I’m going to preface this by saying that this is something we as a business are working on at the moment at Klarna, so I may be biased. But we’re not the only ones experimenting with new bricks-and-mortar payment solutions – the industry is striving to align in-store with online.

International

The 27 fintech unicorns from around the world (Business Insider) Rated: AAA

CB Insights, which tracks the venture capital industry, recently provided a list of what it believes are all the fintech unicorns in the world — venture capital-backed, private businesses worth over $1 billion.

27. Funding Circle — $1 billion

Why it’s hot: Over £3 billion has been lent across the platform and the company is tipped for a blockbuster European float later this year.

27. Kabbage — $1 billion

Why it’s hot: The company has written over $4 billion-worth of loans and has partnered with Spanish bank Santander.

27. 51 Credit — $1 billion

Why it’s hot: 51 Credit provides risk management and credit advisory services to over 20 major banks working in China, including Citibank and Standard Chartered.

17. Tuandaiwang — $1.4 billion

Why it’s hot: The company has helped individuals and companies borrow $11.4 billion and helped lenders make $335 million in returns.

HQ: Dongguan.

14. Affirm — $1.8 billion

Why it’s hot: The company works with over 1,200 retailers in the US and its technology helps retailers increase average order sizes by 51%. Morgan Stanley and Singapore’s GIC are both investors.

13. NuBank — $1-2 billion

Why it’s hot: The bank has 3 million customers and has raised money from Sequoia Capital, Goldman Sachs, Tiger Global, and more.

HQ: Sao Paulo.

11. Avant — $1.9 billion

Why it’s hot: The company has lent over $1 billion and is backed by the likes of Tiger Global, KKR, and Jefferies.

8. Klarna — $2.5 billion

Why it’s hot: The company processes 800,000 transactions a day and has been used by 60 million people globally. Sequoia Capital, the Silicon Valley fund that backed PayPal, is an investor.

6. GreenSky — $3.6 billion

Why it’s hot: Steven McLaughlin, a former Goldman Sachs banker whose firm advised GreenSky on a funding deal, told Bloomberg in 2016 that GreenSky “is the single best fintech company created in the last 10 years, by far.”

4. SoFi — $4.5 billion

Why it’s hot: Like Zenefits, SoFi struggled with a slew of setbacks in 2017. Allegations of sexual misconduct and loan misstatements forced out founder Mike Cagney. Former Twitter CFO and ex-Goldman banker Anthony Noto is now leading a turnaround of the business.

1. Lu.com — $18.5 billion

Why it’s hot: Lu.com, also known as Lufax, is one of China’s largest online lenders and is tipped for an IPO this year.

WhizCoin ICO (WZC Token): Legit Crypto Lending Rewards? (Bitcoin Exchange Guide) Rated: A

Whizcoin is the latest entrant to the world of digital currencies. The project aims to create the biggest lending program in the world which offers exclusive bonuses as well as passive income on a daily basis for its holders. To realize this goal, Whizcoin has already established a token buyback mechanism that runs on a transparent profit distribution model, and thus enables members to increase the value of their digital coins. All transactions are secured by cryptographic encryption, a feature that also regulates the mining of new Whizcoin.

Unlike other digital currencies, Whizcoin does not require exceptional tech savvy from its users. To trade in Whizcoin, all an investor needs is a mobile or computer with a dependable internet connection.

 

 

 

Australia

Winners from banking Royal Commission (The Bull) Rated: A

The Royal Commission will surely slow the big banks down by adding extra compliance and costs, at a time when they need to be more nimble and aggressive to combat the fintech threat (and benefit from financial technology).
Peer-to-peer lending stocks could benefit if more borrowers look to bypass the banks, but most on ASX are too small and speculative for portfolio investors. Big fintech payment providers, such as Afterpay Touch Group, are a better bet but look fully valued after recent price gains.

Australian Banks Expected To Start Hiking Mortgage Lending Rates (Compare Dinkum) Rated: A

ME, the online lender has decided to raise the interest rate on its variable rate mortgages because it says funding costs have risen. ME is not the first bank to do this, nevertheless the lender hiked its standard variable rate for owner-occupier, principal and interest borrowers. Jamie McPhee CEO of the online lender said higher funding costs and increased regulatory compliance were the main reasons behind its decision to hike rates.

Funding costs are rising

Mr MchPee says over the last few months the bank has seen funding costs steadily rise in response to US interest rates that have been passed on to short term Australian interest rates. Simultaneously, regulatory requirements and industry reforms means that compliance costs are rising as well. ME’s decision follows on the heels of Suncorp which raised its rates in March and also cited higher funding costs as the reason behind its decision.

India

Money lending made easy (News Today) Rated: A

The online trading market has been booming at the moment and money lending has taken various forms. Monexo Fintech Pvt Ltd is one such online peer-to-peer lending company and News Today met up with its founder-CEO, Mukesh Bubna here for an exclusive chat.

Q) Being an online firm, technology must play a big part in your business. Do explain. 
A) Our system is 100 per cent online. A typical transaction has many stages. The normal way is cumbersome. There is the problem of being unserviced and second, you do not know how they will use your document. In our platform, your documents come from you to our system directly. There are no print-outs taken and even in our office, there is no printer. Everything is done instantly. With technology, privacy has gone up, speed will go up too.

Asia

Singapore Fintech CredoLab Secures $ 1 Million Investment from Global Venture Firm Walden International (Crowdfund Insider) Rated: AAA

CredoLab, a Singapore-based fintech provider of mobile-based alternative credit scoring solutions for banks, consumer finance companies, and retailers, announced on Thursday it secured a $1 million investment from established global venture capital firm Walden International. Established in 2016, CredoLab is headquartered in Singapore was previously backed by regional fintech venture capital firm Fintonia Group, and FORUM.

Beenext-backed Indonesian P2P lender Amartha targets to raise Series B round by June (Deal Street Asia) Rated: A

Indonesian peer-to-peer lending platform Amartha has revealed that it is currently in talks with investors to raise a series B round of funding which is expected to be closed in the second quarter of this year.

 

OJK Urges Sharia Finance to Optimize Fintech (Tempo) Rated: B

The Financial Service Authority (OJK) chief Wimboh Santoso encourages the sharia finance industry to continue expanding businesses using the latest technology. One way is by optimizing the utilization of financial technology or fintech.

Africa

Crypto-to-Cash Lending is Growing Quite Popular These Days (Nigeria Today) Rated: AAA

A new business model has formed recently called crypto-to-cash lending and this new financial sector is growing exponentially. The phenomenon follows the modern rise in recent years of peer-to-peer lending offered by financial giants like the Lending Club. Right now there are a few operations that are attempting to break the mold when it comes to this type of lending with projects such as Unchained Capital and Salt Lending taking the lead.

Then there is a new startup called Nexo that plans to provide crypto-infused instant credit to borrowers without the need for credit checks. VCs like the Techcrunch founder Michael Arrington, and others recently pumped $50Mn into Nexo and the company has a security partnership with Bitgo. Nexo believes it will be the first firm to provide instant crypto-backed loans as it states on its website.

Authors:

George Popescu
Allen Taylor