Thursday December 28 2017, Daily News Digest

china IPO

News Comments Today’s main news: VPC Specialty Lending Drops Prosper Loans.Best Egg to broaden services in 2018.Faircent raises $4M.RoboCash updates loan origination process.Tyro to launch new SME solutions. Today’s main analysis: China leads Asia’s IPO boom. Today’s thought-provoking articles: Can Lending Club grow by 20% in 2018?Blockchain could transform these major industries.APAC online lending is […]

china IPO

News Comments

United States

United Kingdom

China

  • China leads Asia in IPO boom. AT: Not really news, but it’s interesting to see where Chinese companies are going public. The big winner is the New York Stock Exchange. But Shanghai and NASDAQ are also looking good with Hong Kong hanging in there.”

European Union

International

Australia/New Zealand

India

Asia

Africa

News Summary

United States

Reversal of fortune (Breaking Views), Rated: AAA

Most new entrants have also found it hard to build scale. Lending Club’s top line may grow by 20 percent in 2018, according to Reuters data, but that will take it only to $800 million. Even online student lender Earnest, which largely avoided industry potholes, has struggled. In October it sold itself to old-school servicer Navient for $155 million – less than half its value in a 2015 funding round.

Best Egg Will Broaden to Financing Purchases in 2018 (Banking Innovation), Rated: AAA

Marketplace lender Best Egg will move towards financing consumer purchases, including homes, as it looks to expand in 2018, the company told Bank Innovation.

If I can know my monthly cost for Amazon Prime before I sign a contract, why can’t I know my monthly cost for a car payment before going to the dealership? If I can see movie options before I go to the theater, why can’t I see my financing options before I sign a 5-year loan contract? Being empowered with concrete choices would make both budgeting and buying a car that much easier and help to save hours on the financing process. So, using my personal experiences from childhood to fuel my passion, I co-founded AutoGravity in October of 2015.

Our goal at AutoGravity was to make car financing as easy as watching a movie on Netflix, streaming an album off Spotify or buying a book from Amazon. So, we demystified the process by making it accessible to everyone – empowering them through our app on their smartphone.

Tax cuts, softened regulatory tone likely to help banks in 2018 (Central Penn Business Journal), Rated: A

Financial institutions also could face challenges in the near future as a result of technology-driven competition and long-term impacts from the recently approved tax reforms.

Marsico expects banks to increase automation of certain support-center processes over the next year. Artificial intelligence, for example, could handle some of the work that goes into processing loans, as well as tasks like verifying the authenticity of checks submitted through mobile deposit apps.

One study predicts banks throughout the world will increase their tech budgets by 4.1 percent in 2018.

Consumers still not benefiting from bank overdraft programs (Consumer Affairs), Rated: A

Most consumers still don’t know they are not required to accept their bank’s overdraft protection service, according to the Pew Charitable Trusts’ latest consumer finance project.

Before the law was changed in 2010, banks automatically enrolled consumers in overdraft protection. If consumers made purchases that overdrew their accounts, the banks covered the expense and then assessed an overdraft fee, which often cost as much as $35.

Since the law changed, consumers must opt-in to this coverage — banks cannot automatically enroll them. Thaddeus King, officer of The Pew Charitable Trusts’ consumer finance project, says it’s clear consumers don’t understand that overdraft protection is not only costly, but unnecessary.

In September a survey found that an estimated eight million consumers have opted-in, primarily because they thought they had to. Two-thirds of consumers who agreed to pay the overdraft fees were unaware it was optional.

Banks actively headhunting, but they want specific skill (CNBC), Rated: B

The rising influence of digital and banking-specific technology — so-called fintech — is “really changing how banks themselves will organize their own recruitment functions,” O’Sullivan told CNBC.

United Kingdom

VPC Specialty Lending Sells Prosper Marketplace Loans (London South East), Rated: AAA

VPC Specialty Lending Investments PLC on Wednesday said it sold its Prosper marketplace loans and was able to immediately reinvest substantially all of the proceeds into new investments.

The loans sold represented around 4.1% of VPC’s net asset value as at the end of October, and it expects the hit to net asset value from the sale to be around 0.56%.

China

China bourses behind Asia’s lead in global IPO boom (Nikkei Asian Review), Rated: AAA

Asian companies raised $79.14 billion through initial public offerings as of Dec. 18, up 10% from 2016, data from Dealogic shows. The sum represents 42% of the global tally, which surged 41% on the year to $194.8 billion.

Shanghai, the world’s second largest economy saw a total of 409 companies tapping $31.61 billion from the market, up 30% compared with last year. Of the country’s total funds raised, 56% was from Shanghai, making it Asia’s top IPO destination.

Source: Nikkei Asian Review

Hong Kong saw total funds raised fall 34% to $14.08 billion this year, despite a 24% jump in volume.

Alibaba-backed online lender Qudian, for instance, saw its New York-listed shares tumble 55% after it debuted in October. Its peer LexinFintech Holdings, backed by JD.com, on Dec. 14 slashed its fundraising target by 76% to $120 million.

European Union

P2P Lender RoboCash Updates on 2017 Progress (Crowdfund Insider), Rated: AAA

Latvia-based European peer to peer lender Robo.Cash, a young platform that is less than a year old, has provided an update on loan origination progress.  According to the P2P lender, RoboCash attracted € 2.5 million of investments in pay day lending (PDL) loans in 2017. Robo.Cash launched its platform in Latvia in February 2017.

Robo.cash said the current average sum of investments is € 2.900 per investor with over 1,500 investors from 28 EU-countries have joined Robo.cash in 10 months. The site says investors may be separated as follows:Germany (50,5%), Spain (7,2%), the Czech Republic (6,1%), Austria (4,6%), Latvia (3,9%), Portugal (3,6%), the United Kingdom (3,3%), Netherlands (2,7%), Lithuania (2,3%), Estonia (1,6%).

More retailers’ customers using Klarna’s buy-now, pay-later plan (The Columbus Dispatch), Rated: AAA

The Swedish e-commerce company signed 500 online retailers for its new service, which allows consumers to buy products now and pay for them later.

And the company’s North American operations signed on a new CEO, Jim Lofgren, replacing central Ohio native Brian Billingsley, who recently was named chief revenue officer for Dallas-based payment-service company Modo.

“We serve more than 70,000 merchants over 18 markets, and our data in the U.S. market is really very similar to other markets,” Lofgren said recently. “We’re making a very significant impact for our merchants.”

Brussels moves to boost Europe’s fintech sector (Financial Times), Rated: A

The European Commission is to present draft legislation early next year to remove administrative hurdles to the cross-border operation of crowdfunding sites and online peer-to-peer lending services. It says the initiative will ensure that EU companies can grow and compete.

European fintech successes include TransferWise, the Estonian-developed foreign exchange company, and France’s PayPlug, which makes it easier for sole traders to accept credit card payments.

LoanBook Shares Latest Milestone (Crowdfund Insider), Rated: A

LoanBook, a Spanish marketplace lending platform, having easily surpassed its initial £650,000 last week is, is heading toward the home stretch having raised over £721,200 for 6.40% equity with the help of more than 253 Crowdcubeinvestors. £340,000 of this investment sum comes from current shareholders, local Business Angels and Family Offices. Funding will be used to continue LoanBook’s platform growth and development.

Crowdfunding saves tumbling down French chateau (The Business Times), Rated: B

It’s a modern story of an ancient fairytale castle: a crowdfunding effort online has raised 1.6 million euros (S$2.55 million) to restore a chateau in western France.

Around 25,000 people from 115 countries have become shareholders in the chateau de La Mothe-Chandeniers which has turrets, a moat and an elderly owner who had not maintained it.

International

30 Big Industries Blockchain Could Transform (CB Insights), Rated: AAA

1. BANKING

Swiss bank UBS and UK-based Barclays are both experimenting with blockchain as a way to expedite back office functions and settlement, which some in the banking industry say could cut up to $20B in middleman costs.

2. PAYMENTS AND MONEY TRANSFERS

Abra, another blockchain-enabled mobile wallet and payments startup, was recently integrated into the payments ecosystem of American Express: through a new feature, customers will be able to fund their Abra wallets using an eligible American Express Card.

3. CYBERSECURITY

Other potential applications include using blockchain to provide massive scale data authentication: for example, using its blockchain-enabled KSI (Keyless Signature Infrastructure), cybersecurity startup Guardtime tags and verifies data transactions for cryptographic assurance of their integrity and authenticity.

11. STOCK TRADING

Partnerships with existing trading networks and exchanges will help blockchain take off in the space. Blockchain startup Chain (which is also mentioned below) is a leader on that front: the company helped orchestrate a live blockchain integration that successfully connected Nasdaq’s stock exchange and Citi’s banking infrastructure.

12. REAL ESTATE

Tech startup Ubitquity offers a Software-as-a-Service (SaaS) blockchain platform for financial, title, and mortgage companies. The company is currently working with Land Records Bureau in Brazil, among other stealth clients, to input property information and record documents through the blockchain.

13. INSURANCE 

LenderBot is a micro-insurance proof of concept for the sharing economy that demonstrates the potential for blockchain applications and services in the industry. LenderBot, which allows people to enroll in customized micro-insurance by chatting through Facebook Messenger, enables blockchain to serve as the third-party in the contract between individuals as they exchange high-value items through the sharing economy.

28. CREDIT HISTORIES

Lenders minimize the risk posed by loans or lines of credit to small businesses by evaluating their histories using business credit reports. These third-party reports — issued companies such as Dun & Bradstreet — are inaccessible to the small business owners (beyond the basic profile information they provide to the credit bureau). This can make business owners feel like credit bureaus have all the power over loan terms, even though the credit bureau may be assessing outdated or inaccurate information to determine their reports.

Lumeno.us is one startup using blockchain technology to make business credit reports more accurate, transparent, and shareable. Lumeno.us normalizes semi-structured financial data using a proprietary application of collaborative tagging and advanced analytics. From there, it provides business owners the tools to share their data in order to get a loan, find trusted partners, or manage a portfolio or network.

30. CROWDFUNDING

Initial Coin Offerings (ICOs), in which companies sell cryptocurrency-backed tokens in their companies in the same manner as a publicly-traded company sells stock, are another example of blockchain-powered crowdfunding — startups such as OpenLedgermake that possible. Individuals may soon invest in real estate using “crypto crowdfunding,” as well: Singapore-based Real Estate Asset Ledger (REAL) intends to use blockchain technology to inject greater liquidity and transparency into real estate investing.

How telepresence can revolutionize financial services industry (Born2Invest), Rated: A

Imagine, you are trying to make an investment somewhere in the World and you want to be face to face with your investment advisor without leaving your own office or room?

What is different about telepresence is that you can be telepresent through someone else instead of being even present through video conferencing or other methods.

I the financial sector, companies are using telepresence to connect their customers with their loan officers, investment advisors, and other employees to discuss all the requirements and provide solutions without actually the presence of the customer as well as the financial organization at the same place.

Australia/New Zealand

Challenger Bank Tyro to Launch New Financial Solutions for SME (Crowdfund Insider), Rated: AAA

Australian fintech and challenger bank Tyro is set to launch a new set of financial solutions for small to medium enterprises (SMEs). Founded in 2001, Tyro describes itself as Australia’s largest independent EFTPOS provider, focusing on smaller to medium enterprises. The company states it is now has a license from APRA to offer banking products and deposits with its platform are government guaranteed. The company currently has 20,000 customers and has $42.2 billion in transaction.

Online Financing Down Under: A Rapidly Evolving Market (TG Daily), Rated: AAA

The research paints a clear picture of trends currently taking place in Australia and New Zealand, where $348.37 million and $267.77 million respectively has been issued through online financing options (through 2015). These statistics are notable since 2012, with a growth rate of 653% between 2013 – 2015.

Various small business loans lenders currently offer funding to Australian clients from $5,000-$400,000 (depending on the industry lender). Australian small business loans lenders such as prospa, Capify, Sail, and Spotcap dominate the market.

India

Online Peer-To-Peer Lending Startup Faircent Raises $ 4 Million (Bloomberg), Rated: AAA

Faircent raised $4 million (Rs 25 crore) in early-stage funding led a Belgium-based impact investor Incofin Investment Management, Rajat Gandhi, co-founder of Faircent, told BloombergQuint over the phone.

P2P lending marketplace platform launched (The Hindu Business Line), Rated: AAA

Rajiv Ranjan, a former Infoscion along with Ambar Kasliwal, a Mumbai-based Chartered Accountant, has launched a fully-owned P2P lending marketplace platform.

Called PaisaDukan.com, it is a part of BigWin Infotech, a government recognised start-up and it aims to start operations from January 2018, company officials said. The startup is among a few who have applied for an NBFC ((non-banking financial company)-peer-to-peer (P2P) licence after RBI’s revised guidelines.

Fin-tech gains from innovations, digital push (VC Circle), Rated: AAA

Private equity and venture capital firms, which sat on huge money piles and waited on the side lines looking for the right opportunities, caught on to the excitement and loosened their purse strings to record a four-fold jump in investments to $1.84 billion in 2017 from $447 million, showed provisional data from VCCEdge, the data and analysis platform of News Corp VCCircle.

While seed and angel investments accounted for 43% of the total number of deals at 32, growth- and late-stage deals, besides private transactions and venture debt accounted for the rest.

Besides, Paytm’s $1.4 billion infusion from Softbank, Policybazaar’s $77-million Series-E round, SME Lending platform Capital Float’s $45 million Series-C funding, MSwipe’s $41 million funding from UC-RNTand Eduardo Saverin’s B Capital, and Mobikwik’s $35 million round from Bajaj Finance also made the headlines during the year.

Source: VC Circle

RBL Bank to go stronger on fintech partnerships (Economic Times), Rated: A

While banks are fighting a bitter turf war with fintech startups to retain their share of business, private sector lender RBL Bank has seen value in strategic partnerships. The bank is growing its advances book by almost half annually, driven largely by partnerships with non-banking finance companies (NBFC) and tech startups.

While startups such as MoneyTap, BookMyShow are helping the bank acquire customers for its credit products, even its tie-up with one of the most prominent NBFCs Bajaj FinservBSE -0.14 % is helping the bank get customers who were never eligible for a credit card previously.

Rein in your exuberance as you step into 2018 (Business Standard), Rated: A

Investors need to position their personal finances in a manner that will enable them to gain from developments in the future.  Book profits in the mid- and small-cap space: Mid- and small-cap funds’ strong performance streak continued in 2017 (category average return: 47.19 per cent year-to-date). As valuations of growth stocks shot up, investors turned to value picks. …

Asia

Robo-advisory and its role in capital management (Fintech Innovation), Rated: AAA

Africa

Robots versus financial advisors (Moneyweb), Rated: A

With the advent of robo-advisors, where advice is provided at low- or no cost over the internet, questions are being raised as to the future of qualified financial advisors. Is my job becoming obsolete?

A qualified and trusted advisor is able to spot potentially poor financial decisions and gently advise against this course of action. A robo-advisor could never be such a friend in need.

Authors:

George Popescu
Allen Taylor

Introduction to DropDeck.io

number of platforms

Welcome to DropDeck DropDeck will revolutionize the way businesses are funded because there are so many people who are interested in becoming more involved by funding promising companies. The task becomes daunting when information about startups is abundant, but reliable information is scarce, and this situation worsens when one makes the attempt at researching companies while […]

number of platforms

Welcome to DropDeck

DropDeck will revolutionize the way businesses are funded because there are so many people who are interested in becoming more involved by funding promising companies. The task becomes daunting when information about startups is abundant, but reliable information is scarce, and this situation worsens when one makes the attempt at researching companies while they try to figure out how to integrate several independent platforms to take care of their investing needs.

From A.I. deep learning algorithms churning masses of data to the blockchain providing consistency, speed, and security, DropDeck provides the all-inclusive platform to service companies with loans and cryptocurrency funding — all securely developed with smart contracts to ensure that all funds are repaid. All of this is tied together by using a cryptocurrency, the Decentralized DropDeck (DDD) Token. The DDD Token provides a mechanism by which all of the users agree upon its value commit to a one-time action (like contributing a fund to a company) according to terms via the same smart contracts. When all parsed in a way to develop a feedback loop which rewards users for successful participation, DropDeck provides a token with growing value in a space that desperately needs consolidation.

So what is our competition providing?

While we have already discussed some of the details in terms of the specific services that our competition provides (titled “Shortfalls in investing and lending platforms”), we can outline some main points from our analysis. Approximately one-third of the available platforms provide any forms of data access about the companies therefore it is likely that a user will have to have. To lend an example, here is a breakdown in the category of investing platforms.

In the space of investing platforms we can note some disparities among the services provided between some of our competitors and to get an all around experience that one can use in their investing practices one will currently need to subscribe to several platforms. Management between multiple apps in modern times, while it is becoming second-nature, can be a real hassle when the information is about vital decisions and there’s simply no agreement among the different services offered which service to use in which circumstance. There is also no validation service (for the most part; only 4 companies offer credit scoring), which is unfortunate because this could be a way to provide a transparent relationship between all the parties involved.

DropDeck’s overview of lending platforms:

In this diagram, there is more overlap between the services, but particularly one disparity of which should be alarming to certain companies. Only one offers full support with cryptocurrency lending therefore an integration in this space would be a massive lifesaver.

DropDeck as a unifying force and unification of platform functionality

The DropDeck Platform is a unifying force in terms that it fills all the gaps left by existing lending and investing platforms as we discuss in length in our previous article. DropDeck aspires to be your ideal, all-in-one funding experience from a company first getting listed in the sea of competition and all the way down the chain to evaluations, appraisals, legal officiating by delegators, smart contract development, to funding, growing and receiving your funds and scheduled returns. The blockchain framework for DropDeck really provides an advantage in that its abilities to flawlessly integrate seemingly independent functions so that an otherwise complicated process for an end-user (using multiple clunky platforms) can be streamlined in one smooth control panel.

The fusion of investing and trust

Some companies out there charge a premium by providing evaluations but it is hard to get specifics on whether or not the evaluations have solid metrics supporting them, therefore we need a smart-system that can machine learn to provide transparent metrics based on actual human behaviors and real life outcomes, not on the intention of claims — at least not by untrusted participants. By using the DDD Token, being based in an ecosystem that will continuously grow with its users, it DropDeck provides the safest environment possible for companies and individuals of all sizes to flourish.

Integrating blockchain technology and A.I.

In the second part of our article “The Three Innovations of Drop Deck”, we explain how integrating blockchain technology with in A.I. applications equipped with machine learning abilities will drive forward better and more consistent trust scores along with fewer sunk opportunity costs. Since this wasted potential can quickly be converted to gains that grow, the market possibilities for providing funders, backers, contributors, companies, hunters, evaluators, delegators, insurers, and the many other users who may benefit from our platform is seemingly endless, the DDD Token will have yet another driver influencing its own growth. These two technologies, when properly fused, provide security and stability with a system that causes users believe in operating from the best intentions while having trust in the community at large as well as their trust in the information they’re presented.

The DDD Token is the glue that holds it all together

DropDeck’s transparency and DDD Token are continuously growing in value, and that provides a landscape for people to spend more time on the tasks they prefer over the tasks they feel pressured to complete. This focalization of work will provide a feedback process in itself for users to get better at providing the functions that they provide so that the rate at which the token’s value increases should increase as well.

If time is money: DropDeck saves both while it grows

Getting trustworthy, coherent information from solid sources that can be relied upon time after time is exceedingly rare. If DropDeck can provide the trust, then the trust causes the first amount of pressure for its growth, while other aspects of the DDD Token all feed into this big feedback loop designed to increase in value from several major avenues.

It was shown in our whitepaper that the entire market size for startups seeking funding in the landscape of lending and investing is approximately 33.3 billion USD. Out of that sum of money, let us examine a breakdown in terms of how that money ends up being allocated.

A generic breakdown suggests simply in terms of the amount of money in time spent, funders and lending companies could save up to $10 billion dollars by having all the investment information in one location on a single user interface. Narrowing down from a list of 10,000 companies to 10 companies with a few clicks using our trustworthy platform will do exactly that if the contributors and companies that participate have the capacity to spend more time acting according to their specialty.

Obviously the bulk of the lost money through investments are not due to the logistics of evaluation and convenience of information access, but can be attributed to the sunk costs into failed companies, and that can be at least partially attributed to the lack of reliable information access. If a small percentage of these companies became successes instead of failures, the market cap of saving the market $33.3 billion dollars grows substantially because, across the board the distribution of growth is spread across every participant.

Decentralized DropDeck (DDD) Token sales

Our token will open for sales and this event will take place on November 21st, 2017. The token will be made available at the best, promotional price during the first hour of the sale event. After the crowd sale of the DDD Token ends, we will have a market cap and thus eligible for a small exchange. As DropDeck users contributor, the DropDeck Token will increase in value thus growing with respect to its market cap at an accelerating rate because as the tokens value increases, more tokens will be redistributed to the DropDeck community as an incentive for their participation.

Originally published at Medium.

Monday June 19 2017, Daily News Digest

Lending Club default rates

News Comments Today’s main news: Finastra inks agreement with IBM. One number Elevate Credit shareholders are worried about. Zopa makes IFISA available to existing customers. Yirendai ready to include wealth management. Klarna wins Europe’s biggest fintech banking license. Today’s main analysis: Online lenders do a good job of identifying fraud. Today’s thought-provoking articles: Bloomberg report is critical of online […]

Lending Club default rates

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Africa

News Summary

United States

One Number Elevate Credit Shareholders Are Worried About (The Motley Fool), Rated: AAA

Elevate Credit, Inc. (NYSE:ELVT) the newly public subprime fintech lender, delivered its first quarterly earnings report as a public company on May 8, and the results were impressive. Loan originations grew almost 40%, while revenue grew by a smaller 20%, due to the lowering of interest rates on Elevate’s high-rate loan products. Elevate’s IPO was unusual — most tech IPOs sport high growth rates but negative earnings. In the first quarter, Elevate actually delivered a net profit of $1.7 million. Adjusted EBITDA margin expanded to 16%, above the 10% margin posted in 2016 and the 4% in 2015.

The big blemish on the quarter was a high net charge-off rate  as a percentage of revenues. Net charge-offs measure the amount of principal and interest more than 60 days past due, minus recoveries from prior periods. That number shot up to 59% in the quarter, above the company’s target range of 45-55%,  and up 600 basis points year over year. While the company was still profitable, the $1.7 million in net earnings was down from $6 million in the year-ago quarter.

Management explained that the rise in loan loss provisions was partially related to a new credit score the company tested on lots of new customers at the end of 2016. As is the case with many financial companies, when new customers increase, there is often an initial uptick in defaults or loss ratios.

Bloomberg Report is Critical of Online Lenders (Crowdfund Insider), Rated: AAA

A report from Bloomberg this week takes certain online lending platforms to task regarding the fact that some online lenders are not verifying income status.  The report also says that even if there are errors in loan applications the loan may still be approved. More specifically, apparently Prosper does not verify income and employment in about a quarter of the loans. Lending Club is said to verify income in about one third of the loans.

Risk is always part of the investment equation and Orchard Platform perhaps provides the best perspective into affiliated risk of investing in loans originated online.

Online Lenders are doing a good job of identifying the frauds (even without hard income verification) (Croudify), Rated: AAA

Recently there was an article in Bloomberg (Article Link) that talked about how online lenders are not always verifying the basic borrower information like Income.

We at Croudify have been analyzing the loan data for more than 2 years and wanted to shed some light on the article and show that while the headline is true the devil is in the details and actually the platforms have been doing a very good job in identifying the fraud.

Once we had concluded that the non-verified loans are not growing as percent of population the logical next step was to check if these loans are performing worse than before. Is there a possibility that the loans without income verification have deteriorated over time and hence the red flag.

This points to a very important finding that the preliminary indicators that Lending Club is using in identifying the fraudulent behavior is not only working it is working great and is providing a performance lift to loans.

Pricey ‘fintech’ lenders put the squeeze on cash-strapped small businesses (L.A. Times), Rated: A

So Newman, 61, turned instead to an online lending company called OnDeck. After submitting a handful of bank statements, he was quickly approved for a $65,000 loan, which allowed Newman to cover his wine shipments and keep his business running.

“These loans are predatory by nature,” he told me. Think payday loans for small businesses, he said, with interest rates well over 30%.

And there’s something to that. Loans with a higher degree of risk would naturally come with higher interest rates. The question is whether such loans are being marketed honestly and fairly, and whether customers are able to make informed decisions about financial obligations.

Fairness in lending means clear and straightforward disclosure of terms and conditions. On that score, OnDeck seems to come up short.

For example, the company’s website boasts that term loans of up to $500,000 can be obtained with annual interest rates as low as 5.99%. Newman said that when he contacted OnDeck, he was hoping to get a loan at such a rate. But it didn’t work out that way.

What he got was a 12-month, $65,000 loan, plus nearly $17,500 in interest and an origination fee of $1,625. That translated to an annual percentage rate of 55%.

In fact, OnDeck told me its average annual interest rate for term loans, excluding fees, is 38%. If that’s the case, I asked why the rate most prominently displayed on their website is 5.99%.

China Merchants Bank is considered the largest industry player currently, but still its assets under management in its private banking division are worth just 1.66 trillion yuan.

Assessing the future of the financial advice industry (InvestmentNews), Rated: A

First: There will be fewer advisers, possibly many fewer. The trend line points down, and there’s nothing in the three- to five-year outlook to change that.

The future leaders of this profession see advisers serving far more clients with a greater assist from technology, as well as more reliance on outsourcing.

But those requiring expert financial advice will undoubtedly seek a more complete look at all areas where money touches their lives — and how those areas intersect. Who will need it most? A large population that isn’t necessarily today’s prime prospect pool, at least for advisers paid based on a percentage of assets: the HENRYs (high-earner, not rich yet). As investment advisers move beyond mere investments, and the field becomes a profession, compensation surely will evolve to ensure those who most need advice can get it and those giving advice can still run a profitable business.

In financial advice this will take the form of a planning quarterback who strategizes the entire financial game plan and keeps clients on track largely through automated accountability programs.

If you find this hard to believe, just wait until Google or Amazon moves full throttle into the asset management business.

Offer B2B Fintech Solutions To Help Clients Grow Their Sales (Forbes), Rated: A

In April, 2017, Pew Charitable Trusts published the results of a national survey of payday loan borrowers. The top three responses to what is most important to these borrowers in choosing where to get a payday loan were:

  • 76% – How quickly they can get the money
  • 74% – The fee charged
  • 73% – The certainty that they would be approved for the loan

The survey reveals other important consumer attitudes about payday loans. Most respondents believe that there should be more regulation of lenders, and lower interest charges. They would also prefer almost any other borrowing option or loan type to the payday solution.

Chuck Wait Tire, located in the small rural community of Mowrystown, Ohio, had never cleared more than $100,000 in monthly revenue, until they implemented Acima. The next month, they not only beat the $100,000 threshold, they killed it with a 33% monthly increase in sales from $90,000 to $120,000.

Podcast 105: Robert Morgan of the American Bankers Association (Lend Academy), Rated: A

In this podcast you will learn:

  • The core purpose of the ABA.
  • What is in the ABA Fintech Playbook and why they published it.
  • How the bank of  the future will be different to today.
  • How the ABA select their Endorsed Solutions providers.
  • The attitude of banks today regarding partnering with fintech platforms.
  • How large banks differ to small banks when it comes to partnering.
  • The needs of banks today when it comes to new technologies.
  • The official stance of the ABA on the OCC Fintech Charter.
  • The ABA’s view on the data sharing initiatives taking hold in Europe.
  • How banks, data aggregators and fintech companies are working together on data sharing.
  • How open banking could work in a similar way to Facebook logins.
  • Some of the other new technologies that are on Rob’s radar.
  • How banks of the future will be similar to banks of today.

ArborCrowd Now Offering $ 69.7 Million Commercial Real Estate Deal to Investors in Miami (Crowdfund Insider), Rated: B

Online commercial real estate company ArborCrowd announced on Thursday it is now offering a new $69.7 million commercial real estate deal to investors. The Lago Paradiso property is described as a multifamily complex located in Miami, Florida. 

According to ArborCrowd, investors now have the opportunity to own a piece of a $4 million stake in Lago Paradiso. The property now has a targeted 13 percent to 17 percent Internal Rate of Return (IRR) and a projected hold period of four to seven years.

United Kingdom

Zopa Announcement: IFISA Is Now Available to Existing Customers (Crowdfund Insider), Rated: AAA

Zopa announced on Thursday its IFISA is now available for all existing Zopa customers. Along with the IFISA, the online lender unveiled its latest peer-to-peer investment product, Zopa Core.

Zopa then explained that the Zopa Core product has a target return of 3.9% and by December will replace its products, Access and Classic, without Safeguard coverage. IFISA and Zopa Core features include:

Funding Circle SME Income fund holds steady on dividend (AltFi), Rated: AAA

The £406m Funding Circle SME Income fund has paid out its fifth dividend, the fourth consecutive quarter at the same 1.625p level, holding pay-outs in line with targets.

OFF3R Wants to Become “Money Supermarket” (Crowdfund Insider), Rated: A

At last count OFF3R hosts offers from 36 different UK platforms. Today in a report on P2PFinanceNews, OFF3R is revealing it is raising £5 million to become the “Money Supermarket” for investments. Essentially OFF3R wants to integrate today’s alternative investments with yesterday’s more traditional types.

Fiserv to buy UK mobile payments pioneer Monitise for 70 million pounds (Reuters), Rated: A

U.S. financial technology provider Fiserv said on Tuesday it had agreed to buy British financial services technology firm Monitise Plc for about 70 million pounds ($88.72 million).

AIM-listed Monetise, worth about 2 billion pounds at its peak in early 2014, blazed a trail by linking banks and mobile operators to build a business capable of handling billions of dollars in mobile payments, purchases and money transfers.

The SME’s guide to P2P (P2P Finance News), Rated: A

“The key thing is making sure that you’re looking for the right type of finance,” explains Paul Marston, managing director of commercial finance at peer-to-peer lending platform RateSetter.

A survey by the British Business Bank for 2015/16 found that 100,00 small businesses were rejected for loans by mainstream lenders – equating to £4bn of potential finance.

“If you’re an SME and go to the bank for an unsecured loan, there’s a cap of around £50,000, whereas Funding Circle will offer up to £350,000.

Funding Circle explains that it offers four key benefits for SME borrowers: speed, flexibility, efficiency and transparency.

As P2P platforms are purely online, busy business owners can apply for finance outside of working hours. “More than 50 per cent of loan applications are made outside of working hours, when a bank branch would be closed,” says Funding Circle.

While criteria varies from platform to platform, P2P loans are often more suitable for businesses that are slightly more established. For example, RateSetter offers loans to businesses that have been trading for at least three years and has at least two years of either audited accounts or formally prepared management accounts. And Funding Circle only lends to businesses that have been trading for more than two years, have a turnover of more than £50,000 and are a UK limited company.

However, there are still options for start-ups. Crowd2Fund has recently launched a ‘venture debt’ product which enables early-stage companies that are not cash-flow positive to access debt finance. Crowd2Fund argues that this can be simpler than raising equity and enables founders to keep control of their company.

Funding Xchange claims that a business using its platform can expect an average saving of £2,000 by comparing pricing from multiple providers – representing 10 per cent of the value of the average loan.

LendInvest hires second Northern BDM (Financial Reporter), Rated: B

LendInvest has appointed its second BDM for Northern England to satisfy growing demand in the region.

Sophie Mitchell-Charman joins the team from Mint where she worked as a Bridging BDM. Based in York, she will travel extensively throughout northern England, with a particular focus on deals in the North East.

China

P2P platform Yirendai ready to move up a financial league or two, including into wealth management (SCMP), Rated: AAA

Yirendai, China’s largest peer-to-peer lending platform, is looking to raise its profile even higher, with an expanded product offering, the company’s chief executive Fang Yihan has told the South China Morning Post, shrugging off any worries about a regulation-induced slowdown in the industry.

New rules governing the industry will come into force in August, and according to available drafts, these will impose a limit of 200 000 yuan (US$29,400) on lending to individual borrowers, require the lenders to carry out stricter background checks on all clients, and establish strong contractual relations with custodian banks.

Double digit returns for investors were commonplace last year, but will become harder to find.

But with its scale, larger players such as Yirendai that will be the most likely to gain a competitive advantage from the tighter rules.

China’s retail wealth management market was worth 120 trillion yuan last year, according to a report by Boston Consulting Group, which expects growth of 12 per cent annually for the next five years.

China Merchants Bank is considered the largest industry player currently, but still its assets under management in its private banking division are worth just 1.66 trillion yuan.

Yirendai is also experimenting with allowing partners to sell services other lending services via its platforms.

Yirendai Recognized as Best P2P Lending Platform in China at the Future of Finance Summit (IT Business Net), Rated: A

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced that it was awarded the Best P2P Lending Platform in China Award at The Future of Finance Summit (the “Summit”) held in Singapore on June 8-9, 2017. Yirendai is the first FinTech company in China to receive this prestigious reward.

China’s P2P Lending business volume of May reached to $ 53billion, keeping another new record. (Xing Ping She Email), Rated: A

According to a latest monthly report issued by P2P001.com, the total volume of P2P lending in China hit a new record to $53billion on May, with the month-on-month growth of 11.32%.

On May, the average annual interest rate for P2P loans was 8.34%, which has been slowly rising for three months in a row. However, the financial “deleveraging” and tighter monetary policy are still undergoing, it is unlikely that P2P lending rates will continue to rise.

By the end of May, the accumulated P2P loan balance in China has reached to $213billion, with the month-on-month growth of 6.72%. Among them, the loans outstanding on P2P loans of more than $29,850 reached to $152 billion, accounting for 71.46% of the total; the loans outstanding on P2P loans of more than $149,253 reached to $101billion, accounting for 47.43%.

In addition, there are 672 P2P lending institutions assigned depository agreement with banks up to the late May, involving 59 banks and 28 provincial and municipal lending platforms, and 286 of them have been already launched online.

China Banking Regulatory Commission issued a standard campus loan requirements (01Caijing), Rated: A

Recently, the China Banking Regulatory Commission, the Ministry of Education, Ministry of Human Resources and Social Security issued the Notice on Further Strengthening the Management of Campus Credit.

It is pointed out that commercial banks and policy banks should provide customized products for college students, training, consumption and entrepreneurship under the premise of risk control while strengthening the rectification of campus loan problems. And the standardization of financial services, together set the credit line and interest rates.

Beijing and Shenzhen drive Chinese fintech (Deal Street Asia), Rated: A

Ning Tang, CEO and founder of Chinese fintech major Creditease, believes that the current landscape will require players in the finance sector to evolve their approach amid a highly disruptive technology landscape with substantial opportunity.

What’re the assets under management and the role of the Singapore office?

Every year we help clients deploy over $100 billion of capital and the idea of coming to Singapore in 2014 was that this city was one of the bases for our internationalisation strategy.

You’ve got different entrepreneurial hubs in China – Hangzhou, Shanghai, Hong Kong, Beijing – which is the fintech capital of China? 

I’d like to say Beijing because that’s Creditease’s base. But in terms of technology innovation, not just in financial services, I think Beijing and Shenzhen are the leading cities, while some say Hangzhou as well.

Why do so many Chinese firms want to list in New York when Chinese entrepreneurs have access to very liquid stock markets in cities like Shanghai, Shenzhen and Hong Kong? 

In our experience, the US capital markets are more advanced in terms of welcoming innovative business models and companies at the growth stage despite being a pre-profit stock.

Recently, Beijing has been implementing capital controls and kerbing capital outflows from China. How has this affected Creditease’s business?  

We’re largely unaffected by these controls, as many of our wealth management clients have assets outside of China, and we help them manage those. However, with our Creditease Fintech Investment Fund,  we had some of our partners who were able to invest overseas.

There’s been a lot of movement in the Bitcoin and Ethereum markets. What’s the view of Creditease on digital currencies as an asset class and its use in marketplace lending? 

We remain interested but it’s too early at this stage. The regulatory framework and security issues around such models…I think we’d like to see more things get worked out before this asset class becomes appealing to our investor base. We help our investors do asset allocation and any asset class going into the portfolio should be a major asset class. Otherwise, it’s quite speculative and not helpful to our investors

Looking at the future of fintech in China, you have Beijing where the regulators are based. With all these centres like Shenzhen, Hangzhou, Beijing, Shanghai and Hong Kong, what is the future of all these different ecosystems? 

Quite interestingly, you’re talking about cities. I’m thinking about nations.

So different cities and nations have to assess the unique attributes they work and work on refining and enhancing those. I’m quite hopeful that Beijing will continue to be the fintech hub and with Creditease, we’ve got a presence in various places like Israel, Singapore, New York and Hong Kong, so we can access this innovation everywhere!

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: B

As the plan summaries, from 2011 to 2015, over 96 regulations and guidelines for the financial sector have been issued. In the next five years, another 110 regulatory updates or new regulations or guidelines will be released.

Alibaba Group Holding Limited hosted an Investor Day on June 8-9 at Alibaba Xixi Headquarters. Speakers included Jack Ma (Executive Chairman), Daniel Zhang (CEO) and other members of the senior management team.

To safeguard the interests and property rights of college students and maintain financial stability for P2P online lending market, China Banking Regulatory Commission (CBRC), Ministry of Education and Ministry of Human Resources and Social Security have jointly issued a paper to regulate the student loans market. The paper encourages commercial banks and policy banks to develop student loans business and provide standardized financial services to college students.

Ant Financial’s virtual credit card service Ant Check Later (also known as “Huabei” in Mandarin) is eyeing to link up to 4 million online and offline merchants to help them grow businesses and attract consumers who have little access to physical credit cards.

At present, third party payment service license has become an essential equipment for any Chinese company who wants to expand into financial services. On June 7, GOME Finance announced to acquire a payment service company Easy Bonus Card. GOME Finance paid up to CNY 720 million, mainly for the license, which could make the company complement the payment capabilities and accelerate the process of technological innovation.

European Union

Sweden’s Klarna wins Europe’s biggest fintech banking licence (Financial Times), Rated: AAA

Klarna has become the largest European fintech company to get a banking licence, with the Swedish group saying it wants to become the Ryanair of the sector, attacking lenders across the continent.

Valued at more than $2bn, Klarna has already captured much of the market for online payments in the Nordics and Germany, and on Monday received a banking licence from the Swedish Financial Supervisory Authority 20 months after filing for one.

The Swedish group – which had revenues of SKr3.6bn last year and was valued at $2.25bn in a fundraising in 2015 – is looking at offering customers across Europe services such as bank cards and salary accounts as well as eyeing the US for future expansion.

Crowdfunding Platform BrickVest Makes First Exit At 31% Return (Bisnow), Rated: A

BrickVest, the real estate investment crowdfunding platform, has announced that some of its investors have exited an investment for the first time, at a sizzling return.

BrickVest, the real estate investment crowdfunding platform, has announced that some of its investors have exited an investment for the first time, at a sizzling return.

The BrickVest fund invested in a portfolio of 23 retail assets in a joint venture alongside Corestate Capital.

Russian Fintech And Their Fight Against Geopolitics (Forbes), Rated: A

According to EY’s Fintech Adoption Index report last year, although Russian online adoption is lower in comparison to major financial centers like London, New York or Hong Kong, the market in this area is growing at a rapid rate. Online payments and money transfers are booming Russia, as are Moscow and St Petersburg are becoming hubs for this form of technology.

David Waroquier, Partner at Mangrove Capital Partners also highlighted that access to funding in Russia is more limited. ‘This means Russian fintech companies must have a tighter control on costs and be very efficient operationally.’

As said before, one of the trends that has exploded in Russia is mobile payments, as the EY report states that 57.6% of Russians used this service in comparison to the 17.6% globally. There are currently 56 million online mobile users over 16 in the country and according to Gfk, 53% of online users in Russia made at least one mobile payment in the last 6 months, as Dunaev said.

European Crowdfunding Network Launches Survey on Cross-border Crowdfunding & Online Lending (Crowdfund Insider), Rated: A

The European Crowdfunding Network (ECN) has launched a survey dedicated to addressing the challenges of cross border transactions in the investment space. More specifically, the ECN is seeking input on cross border crowdfunding and online lending, including peer to peer / marketplace lending.

The ECN explains:

We will focus solely on crowdfunding models that entail a financial return, notably:

  • Investment-based crowdfunding (where companies issue equity or debt instruments to crowd-investors through a platform) and
  • Lending-based crowdfunding (where companies or individuals seek to obtain funds from the public through platforms in the form of a loan agreement)

The survey is available here. 

International

Newly Formed Finastra Signs Agreement with IBM on Banking Technology, Fintech (Crowdfund Insider), Rated: AAA

Finastra, created by the merging of Misys and D+H, and IBM (NYSE: IBM) have reached an agreement to explore how Finastra can transform their banking operations with IBM Cloud and Cognitive technologies. The two companies plan to bring IBM technology into the Finastra open architecture to enrich the digital retail banking experience and bring new innovations to market.

WorldRemit adds Android Pay as secure option for migrant remittances (Reuters), Rated: A

Cross-border money transfer service WorldRemit is enabling its immigrant customer base to send money home using Android Pay, making it the first international remittance firm to run on the Google payments system, the company said on Tuesday.

Connecting with Android Pay will enable WorldRemit customers in developed markets like Europe or North America to make instant international money transfers to reach the 112 million accounts available via WorldRemit’s network of payment channels.

London-based WorldRemit says it handles about three-quarters of mobile phone-based international money transfers, a small but fast-growing segment of the global $575 billion worldwide remittance market. Recipients using WorldRemit can up pick cash or deposit money in banks or mobile money accounts or top up mobile accounts.

Traydstream launches fintech solution for paperless trade (Global Trade Review), Rated: B

New fintech player, Traydstream, has launched a solution to digitalise trade documents and automate regulatory compliance screening using artificial intelligence.

In short, Traydstream’s new solution digitalises the whole trade transaction – from invoice to Swift – and is targeted at banks as well as corporates.

Australia

Big banks and fintech start-ups face up to Jack Ma’s mobile payments juggernaut Ant Financial (abc.net.au), Rated: A

While Ant Financial says it wants to work with our banks, not against them, some are warning disruption from a global digital giant is inevitable, even if it doesn’t come from China.

Former Challenger exec Paul Rogan makes robo-advice play (Australian Financial Review), Rated: A

Paul Rogan, the former chief executive of distribution, marketing and research who stepped out of the role in February after 12 years at Australia’s largest annuities providers, is now readying to launch Retirement Essentials, an online platform that educates and assists those who are already in retirement on how to manage their money.

Mr Rogan has invested an undisclosed sum in SuperEd, the the robo-adviser co-founded in 2012 by Vanguard Australia founder Jeremy Duffield and Westpac executive and technology entrepreneur Hugh Morrow.

India

Wadhawans opens UK unit, buys stake in Zopa (India Times), Rated: AAA

Wadhawan Global Capital (WGC), which owns 38% of DHFL and is the controlling lever for the group’s financial businesses, has set up a London unit that opened its account through undisclosed -but sizeable-investments in 12-year-old Zopa.

What the future holds for the P2P lending market in India and the world (My Big Plunge), Rated: A

While the overall internet-based alternative finance industry registered transactions worth more than $57 million between 2013 and 2015, online peer-to-peer or marketplace lending saw loans with a cumulative value of over $2 million disbursed during the same period. The total loan value in the corresponding two years has grown by around $2 million, with an estimated $4.5 million worth of loans disbursed through online peer-to-peer lending platforms by the end of 2016.

But even as industry projections predict the market for peer-to-peer loans to be worth $4-5 billion by the end of 2023, this promising segment is still a long way off from achieving its true potential as a highly viable alternative investment class.

The launch of India’s Digital Stack that includes Aadhar, eKYC and digital payments is paving the way for the country’s shift towards a cashless economy.

The year 2017 is expected to be the year of financial technology, with alternative lending and investment products like peer-to-peer lending set to be driving forces for the latest iteration of the fintech revolution in India.

Faircent.com, for example, has consistently delivered net returns upwards of 18% per annum to its majority of lenders.

Asia

InvestaCrowd Updates on Real Estate Crowdfunding in Asia (Crowdfund Insider), Rated: A

About a year ago, Crowdfund Insider connected with Julian Kwan, CEO and co-founder of Investacrowd, a real estate crowdfunding platform that was established in Singapore. Kwan was born in Australia but has spent the last 17 years in Asia – most recently Singapore. Having founded multiple companies, Kwan is a longtime real estate investor, developer, and manager.  InvestaCrowd was envisioned as a vehicle to provide access to real estate investments in select markets like New York City, Sydney or London.  As with many real estate platforms, by using technology much of the process may be completed online.

A report by Cushman & Wakefield from earlier this year highlighted this fact. In a publication, Cushman & Wakefield explained;

“Compared to other countries, China ranked No. 1 among foreign investors in commercial real estate within the U.S. in 2016. China inbound investment deal volumes have grown rapidly, reaching $19.2 billion USD in 2016, a record high. Sixty-two percent of the investments, which equated to $11.9 billion USD, were deals over $1 billion USD. The five largest Chinese investment transactions were among the top ten largest transactions in the U.S. in 2016.”

Kwan told us InvestaCrowd was in the process of obtaining a capital markets license from the Monetary Authority of Singapore (MAS) – now a requirement.

But current investors are turning into repeat investors. InvestaCrowd does not focus on Southeast Asian real estate which brings better quality deals but adds a different challenge to the mix. While he likes the Singapore market it is in a bit of a pause. On the other side, he is very cautious on deals in countries like Vietnam, Indonesia or China – a country where he spent many years in the real estate sector.

Kwan said they are looking to set up a line of credit too, so as to be able to pre-fund deals.

Meet Anna Haotanto, The Fintech Queen of Singapore (IB Times), Rated: A

Singapore is one of the leading hotspots for financial tech thanks to flexible regulation plus national initiatives to fund startups and integrate blockchain innovation into the local economy. American venture capitalists at the Ethereal Summit in New York praised Singapore as a ripe market, teeming with collaboration between entrepreneurs, regulators, banks and investors. The small island nation wants more than a high-tech economy: Singapore aims to become a global fintech hub.

Haotanto is a self-made millionaire determined to make fintech more accessible for Asian women. Her online media startup, the New Savvy, targets women investors by providing 30,000 Asian subscribers with finance and career guidance. This is no ordinary women’s publication. Forbes reported her team partners with the Monetary Authority of Singapore, the Singapore Exchange (SGX) and Far East Organization to produce pragmatic content.

So her company organized the Future Is Female conference in April, along with SGX, attended by 250 women.

Africa

P2P Cash Launches Money Transfer Service to Nigeria With No Transfer Fees (Press Release Rocket), Rated: A

P2P Cash, a Georgia-based digital financial services company, has opened a new money transfer service from the US states of Georgia and South Carolina to Nigeria. P2P Cash now offers cross-border money transfers at competitive exchange rates without any transfer fees. Nigerians and Nigerian-Americans in Georgia and South Carolina can find this new service at . Customers may also download the mobile app from the Google Play or Apple Stores.

P2P Cash’s aggressive no-fee pricing position is possible because of its proprietary Smart Token technology and global disbursement network.

Authors:

George Popescu
Allen Taylor