In the June 1 issue of Lending-Times, we highlighted a TransUnion report on how to identify and fight online fraud. A typo suggested we didn’t recommend report, however, we highly recommend it and you can download it here.
- Today’s main news: After buying George Banco RateSetter will not lend to its customers. Amartha receives regulatory approval from Indonesian Financial Services Authority.
- Today’s main analysis: Common Bond’s securitization of student loans.
- Today’s thought-provoking articles: Impact of the latest adjustments to P2P/MPL. WeiyangX Fintech review. Three reasons for the boosting Cash Loan in China.
- Latest PeerIQ Loan Performance Monitor. GP:” Common Bond’s student loan securitzation. And very interesting data on Lending Club’s delinquency. “
- Global Debt Registry appoints Charlie Moore as president. GP :”Congratulations!”. AT: “Congratulations.”
- Investing in real estate: Single-family or multi-family homes? AT: “A good case for investing in multi-family through crowdfunding platforms.”
- GTCR acquires Sage Payment Solutions.
- Where incumbents are making investments in wealth tech. GP:” For instance, Goldman Sachs and JP Morgan Chase are co-investors in Motif, Northwestern Mutual and Citi Ventures are co-invested in Betterment, and UBS and Santander InnoVentures are co-investors in SigFig.”. “AT: “Some of the world’s largest financial institutions invest in wealth tech startups and robo-advisors.”
- AutoGravity car financing app now available across New Jersey. GP:”Car choosing and financing, all via a mobile app. Maybe we can apply this model to other markets.”
- Fed Governor: Data aggregators impact bank safety, soundness as part of fintech stack.
- PeerStreet’s Jessica Murray named HousingWire rising star.
- Roostify names Sandeep Aji VP of products.
- How to get a second chance with your bank.
- RateSetter not to lend to George Banco’s customers. GP:”Rate Setter bought the former wholesale lenders and decided not to lend to its customers anymore. Strange. We wonder what happened there. “.AT: “This is a reversal of their original intent.”
- P2P platforms facing hybrid dilemma. GP:”THE PEER-TO-PEER finance industry could be on its way to becoming a polarised market, where the biggest firms stick to their core P2P lending activities and the rest are forced to evolve into hybrid models.”
- Safety in banking.
- Peer-to-peer lending promised 6%, but this man is red-faced and in the red. GP:”Diversificaiton is key, and Lending Club recommends at least 300 different notes per lender.”
- Assetz Capital Review.
- Assetz Capital adds ex-bank specialist to regional director team.
- From beach to boardroom.
- MPL News Roundup from Lend Academy. AT: “A mix of new news and some already reported.”
- The impact of the latest adjustments in peer-to-peer/MPL. AT: “An excellent read.”
- Crowdfunding, millennial buyers and higher mortgage rule real estate in 2017.
- Crowdsurfer adds Zopa data.
- How robo-advice fees compare to multi-asset funds.
- Trov connects with AXA Insurance & celebrates UK launch.
- Amartha receives regulatory approval in Indonesia.
- Why your financial planner should be a robot.
- In Singapore, fintech boom missing the tech.
- United States
- Latest PeerIQ Loan Performance Monitor (PeerIQ), Rated: AAA
- Global Debt Registry Appoints Charlie Moore as President (PR.com), Rated: A
- Investing in Real Estate: Single Family Homes or Multi-Family? (Crowdfund Insider), Rated: A
- GTCR Announces Acquisition of Sage Payment Solutions (Guru Focus), Rated: A
- Where Incumbents Are Making Investments In Wealth Tech (CB Insights), Rated: A
- AUTOGRAVITY CAR FINANCING APP NOW AVAILABLE ACROSS NEW JERSEY (AutoGravity), Rated: A
- FRB Governor: Data Aggregators Impact Bank Safety, Soundness as Part of the “Fintech Stack” (JD Supra), Rated: A
- PeerStreet’s Jessica Murray Named One of HousingWire’s 2017 Rising Stars (BusinessWire), Rated: B
- Roostify Names Sandeep Aji as Vice President of Products (BusinessWire), Rated: B
- How To Get A Second Chance With Your Bank (NASDAQ), Rated: B
- United Kingdom
- RateSetter decides not to lend to George Banco’s customers (P2P Finance News), Rated: AAA
- P2P platforms facing hybrid dilemma (P2P Finance News), Rated: A
- Safety in banking (SilverSeek), Rated: A
- Peer-to-peer lending promised 6%, but I’ve been left red-faced and in the red (The Guardian), Rated: A
- Assetz Capital Review – 30 Days Access Account with 4.75% Target Rate (P2P-Banking), Rated: A
- Assetz Capital adds ex-bank specialist to regional director team (P2P Finance News), Rated: B
- From beach to boardroom: Iced coffee king surfing to success (London Loves Business), Rated: B
- WeiyangX Fintech Review (Crowdfund Insider), Rated: AAA
- Three primary reasons for the boosting Cash Loan in China (Xing Ping She Email), Rated: AAA
- European Union
- Fintech is King of Lithuania’s Tech Revolution (Red Herring), Rated: A
- Marketplace Lending News Roundup – June 3 (Lend Academy), Rated: AAA
- The impact of the latest adjustments in peer-to-peer/marketplace lending (AltFi), Rated: AAA
- Crowdfunding, millennial buyers and higher mortgage rule real estate in 2017 (International Business Times), Rated: A
- Crowdsurfer adds Zopa data (Finextra), Rated: A
- How robo advice fees compare to multi-asset funds (AltFi), Rated: A
- Insurtech App Trov Connects with AXA Insurance & Celebrates UK Launch (Crowdfund Insider), Rated: A
- FinTech Australia Announces New Board of Directors (Crowdfund Insider), Rated: A
- Monexo: Trying to fill the void (Free Press Journal), Rated: A
- Fintech Firm Pinjam Gears Up for Growth Spurt This Year (Jakarta Globe), Rated: A
- P2P Lender Amartha Receives Regulatory Approval from Indonesian Financial Services Authority (Crowdfund Insider), Rated: AAA
- Why Your Financial Planner Should Be a Robot (Knowledge.insead.edu), Rated: A
- In Singapore, fintech boom is missing the ‘tech’ (Southeast Asia Globe), Rated: B
- Some options if you want advice from a robot (IOL), Rated: A
Latest PeerIQ Loan Performance Monitor (PeerIQ), Rated: AAA
The US economy generated a seasonally adjusted 138 K jobs last month (vs. expectation of 185K) bringing the jobless rate to 4.2% and another step closer to full employment. As inflation risks emerge, the Fed is widely expected to increase rates another 25 bps at the upcoming FOMC meeting on June 14th.
On the regulatory front, the US House will vote on a bill sponsored by Jeb Hensarling (R-TX) to reform and repeal portions of the landmark Dodd-Frank financial reform bill.
On the securitization front, student lending originator CommonBond priced its $232 Mn private student loan ABS. Goldman Sachs was the structuring lead, and co-leads include Barclays and Citi. Also, AB Alert reports that Lending Club is preparing a multi-seller deal which includes collateral from multiple originators including potentially loans from Lending Club’s own balance sheet. As PeerIQ noted in the summer of last year, we believe marketplace lenders that can offer whole loan investors a reliable path to liquidity and low-cost permanent financing can generate a competitive advantage.
PeerIQ is pleased to present the PeerIQ Loan Performance Monitor. The monitor tracks interest rates, delinquency, and charge-off rates for both platforms across vintages and grades.
Global Debt Registry Appoints Charlie Moore as President (PR.com), Rated: A
Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced Charlie Moore, the firm’s Chief Commercial Officer, has been named President as former Chairman and CEO Mark Parsells returns to his FinTech consultancy practice.
As President, Moore will be focused on the continued delivery of loan level diligence services to the investment community, leading the daily operations of the company. Moore previously led the firm’s commercial operations including business development, partnerships and marketing and has over 20 years of experience building financial services technology businesses in the U.S. and Europe.
Investing in Real Estate: Single Family Homes or Multi-Family? (Crowdfund Insider), Rated: A
“Institutional multifamily” typically means dozens, if not hundreds, of distinct units within a single property, managed by a seasoned professional management firm. These properties have many different tenants, with a diversity of employment situations and lease structures. If one tenant leaves abruptly, many others will remain in place, and overall rental income will suffer only marginally. Multifamily managers can further mitigate vacancy risk by structuring leases to end on a rolling basis. Single family investments don’t carry the same benefit – a tenant living in a single-family home constitutes 100% economic loss for as long as the property remains vacant.
Investing through online crowdfunding platforms gives individual investors the opportunity to invest in a small piece of large multifamily projects that are institutional grade and have passed the underwriting of well-established lenders and co-investors who often have decades and billions of dollars of investing under their belt. The same can’t be said of most single-family investments.
While these benefits are most apparent for direct owners of (investors in) property, this benefit of multifamily investing should be passed along to individuals who co-invest via an online (crowdfunding) platform.
GTCR Announces Acquisition of Sage Payment Solutions (Guru Focus), Rated: A
GTCR, a leading private equity firm, announced today that it has entered into a definitive agreement to acquire Sage Payment Solutions, Inc. (“SPS” or the “Company”) for $260 million. SPS, headquartered in Reston, Virginia, is a leading provider of payment processing and merchant acquiring solutions in North America. GTCR is acquiring SPS from The Sage Group plc (LSE: SGE) (“Sage”), a global provider of integrated accounting, payroll and payment solutions headquartered in the UK. GTCR is partnering with SPS management to pursue organic growth initiatives and fund future acquisitions in the payment processing industry. To support this strategy, GTCR has committed up to $350 million of equity capital to the platform. The transaction is expected to close in the third quarter following receipt of regulatory approvals and other consents.
SPS provides credit card, ACH, check, gift and loyalty card processing services to small and medium-sized businesses (“SMBs”) in the United States and Canada.
Where Incumbents Are Making Investments In Wealth Tech (CB Insights), Rated: A
Deals to wealth tech startups hit a record of 30 investments in Q1’17 amid a number of new early-stage entrants globally. In particular, robo-advisors have been gaining prominence and taking on incumbents in nearly 20 countries around the world.
- Since 2012, several banks and wealth management firms have made co-invests in wealth tech. For instance, Goldman Sachs and JP Morgan Chase are co-investors in Motif, Northwestern Mutual and Citi Ventures are co-invested in Betterment, and UBS and Santander InnoVentures are co-investors in SigFig.
- Incumbents have made the most investments to companies that fall into our robo-advisors category, including Betterment, Motif, Personal Capital, WealthNavi, Folio, ForwardLane, and SigFig
- Blackrock invested in Personal Capital, the second most well-funded wealth tech company with approximately $207M in funding.
- LearnVest is the only featured company on our map to have exited.
AUTOGRAVITY CAR FINANCING APP NOW AVAILABLE ACROSS NEW JERSEY (AutoGravity), Rated: A
AutoGravity, a FinTech pioneer revolutionizing car shopping and financing with the power of the smartphone, has unveiled an innovative mobile application to help car buyers in the Garden State finance any new or used car in minutes in just four easy steps.
With its unique platform, the AutoGravity app guides car buyers through an intuitive four-step process:
- Choose a car – Select any make, model and trim of any new or used car.
- Find a dealer – Choose from AutoGravity’s proprietary national dealership database; geolocation helps quickly identify nearby dealers that sell the car the selected.
- Search for financing – Car buyers can scan their driver’s license and connect to social media to quickly pre-fill the finance application.
- Select a lender – Receive up to four binding finance offers in minutes, then select a loan or lease offer and head to the dealership to complete the purchase.
FRB Governor: Data Aggregators Impact Bank Safety, Soundness as Part of the “Fintech Stack” (JD Supra), Rated: A
In a recent speech at the Northwestern Kellogg Public-Private Interface Conference, Federal Reserve Board Governor Lael Brainard indicated that the relationships between banks and data aggregators within the “fintech stack” may present safety and soundness concerns that warrant oversight by the FRB (and perhaps other prudential regulators).
Governor Brainard indicated that banks will need to apply significant resources to update their data infrastructure to allow access to real-time data for third-party developers.
Governor Brainard explained that because banks are more tightly regulated than the average fintech company, consumer protection and safety and soundness considerations should supersede experimental innovation.
While some banks may elect to give access to data aggregators, Governor Brainard observed that other banks may be unwilling or unable to provide permissioned access to third parties due to fears about compliance with laws and regulations and the ability to monitor and control the use and access to data. She then noted that the Fed’s supervisory role should focus on ensuring that financial institutions subject to its supervision operate safely and follow applicable law. At the same time, she stated that the Fed has “a strong interest in permitting socially beneficial innovations to flourish, while ensuring the risks that they may present are appropriately managed, consistent with the legal requirements.”
PeerStreet’s Jessica Murray Named One of HousingWire’s 2017 Rising Stars (BusinessWire), Rated: B
PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that its VP of Strategy, Jessica Murray, has been named to HousingWire’s 2017 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2017 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.
In her time at PeerStreet, Murray established the company voice through social media, content marketing, customer communications and placed media while serving as the Head of Communications. In her current role, Murray maintains many strategic and operational responsibilities, which also include managing PeerStreet’s capital markets and hiring.
Roostify Names Sandeep Aji as Vice President of Products (BusinessWire), Rated: B
Roostify, a provider of automated mortgage transaction technology, today announced it has named Sandeep Aji as Vice President of Products. Aji will be responsible for overseeing the continued development of Roostify’s mortgage technology platform – from enabling more API-driven capabilities to improving user experience for lenders and consumers.
Prior to Roostify, Aji was Co-Founder and CEO of Impartus, a cloud-based, SaaS platform for higher education.
How To Get A Second Chance With Your Bank (NASDAQ), Rated: B
Despite a higher cost of capital, an online loan may be necessary for a small business. The reason: There has been a continued downtrend in lending from banks to small businesses. “Together, 10 of the largest banks issuing small loans to business lent $44.7 billion in 2014, down 38% from a peak of $72.5 billion in 2006,” reports The Wall Street Journal. Meanwhile, nonbank lenders have seized the opportunity and captured 26% market share up from 10%.
RateSetter decides not to lend to George Banco’s customers (P2P Finance News), Rated: AAA
RATESETTER has announced that it has decided not to lend directly to George Banco’s customers as there are “better uses of our development resources”.
The ‘big three’ peer-to-peer lender bought a stake in the guarantor loan provider, which was a former wholesale lending partner, last month. It had also agreed to lend directly to its 10,000 customers, with George Banco acting as introducer.
The business and consumer lender will keep its equity stake in the firm and its co-founder Peter Behrens will remain as a non-executive director on George Banco’s board.
P2P platforms facing hybrid dilemma (P2P Finance News), Rated: A
THE PEER-TO-PEER finance industry could be on its way to becoming a polarised market, where the biggest firms stick to their core P2P lending activities and the rest are forced to evolve into hybrid models.
A wide range of industry onlookers have told Peer2Peer Finance News that it will be impossible for smaller firms to achieve profitability without either expanding into balance sheet lending, merging with direct lenders or morphing into a business model closer to that of a collective investment scheme.
“It’s incredibly difficult to build a straightforward P2P business to the size where it becomes profitable,” said Andy Davis, author of a report that pointed to hybrid models as an inevitable evolution in the sector.
“It’s intrinsically more profitable to arrange and lend rather than only arrange. We’re going to start seeing hybrid loans emerge.”
P2P is ultimately just a subset of direct non-bank lending, he argued, but with different technology in place and different market access. When a direct lender sets up a P2P platform, its return on capital goes up exponentially and it can immediately recycle those returns to originate more lending.
“Hybrid lending from some providers will increasingly be the chosen solution. This is not an issue or a problem for investors in and of itself, ” added 4th Way analyst Neil Faulkner.
Safety in banking (SilverSeek), Rated: A
It was probably with sound money and sound banking in mind that Goldmoney recently announced a tie-up with a British-based and regulated peer-to-peer lender, which enables owners of gold and silver bullion to use it as collateral to raise funds.ii The purpose of this article is to explain how honest banking worked before fractional reserve banking was devised. This is the logic behind the recently announced collaboration between Goldmoney and Lend & Borrow Trust Company Ltd.
On 23rd May, Goldmoney announced an investment and collaboration in and with the UK-based peer-to-peer lending platform, Lend & Borrow Trust Company Ltd. LBT is unique, being the only peer-to-peer facility in Western financial markets that allows businesses and individuals to use their investment-grade physical bullion as collateral against loans, without the loan obligations and collateral being comingled with other customer business.
At no time is LBT a principal in the transaction, so lenders and borrowers can agree an interest rate without having to take LBT’s creditworthiness into account, based solely on physical gold or silver as collateral.
The logic of a collaboration between Goldmoney and LBT is obvious, in that it enables customers to raise finance using bullion. But there is an underlying sound-money logic as well. Between them, Goldmoney and LBT are the template for sound-money banking as it existed before fractional reserve banking became the standard banking model, after Britain’s Bank Charter Act of 1844.
Peer-to-peer lending promised 6%, but I’ve been left red-faced and in the red (The Guardian), Rated: A
When James Patterson invested £1,000 in the peer-to-peer (P2P) lender Funding Circle back in 2015, his hope was that his money would grow a bit faster than the pitiful rates of interest offered by his bank. At the time, the relatively new lender was promising returns of 5-6% a year – 10 times more than his bank.
However, almost a year and a half on, his investment is now worth just £988 – a loss of £12. It’s because one of the firms that 10% of his money was lent to defaulted, leaving his account £128 in the red – a sum that his other investments at the platform have struggled to make up.
It has delivered some impressive returns to savers in recent years but, Patterson says, after his experience, he will not be investing anymore.
James Meekings, co-founder and managing director of Funding Circle, says Patterson will be back in the black in the next couple of months as the firm expects to recover some of his losses which, in turn, will be passed on to him.
Assetz Capital Review – 30 Days Access Account with 4.75% Target Rate (P2P-Banking), Rated: A
Recently I opened an account at p2p lending marketplace Assetz Capital to gain some first hand experiences. Assetz Capital offers secured business loans to small and medium British SMEs. I decided to start with the 30 days access account as it is mostly hands off and deposited a tiny amount, which was credited within an hour.
Assetz Capital has a minimum investment amount of 1 GBP. Assetz is open to international investors, but a UK bank account is required.
Assetz also offers a quick access account with 3.75% target rate, designed to provide immediate access to cash, in normal market conditions, for investors. Currently 19 million GBP are invested in this account. Further account types are the ‘Great British Business Account’ (GBBA) with 7% target rate, the ‘Green Energy Income Account’ (GEIA) with 7% target rate and the ‘Manual Loan Investment Account’ (MLIA) with 5.5% to 18% gross rate. See comparison of Assetz accounts. Assetz also features a secondary market without fees providing liquidity.
Assetz Capital adds ex-bank specialist to regional director team (P2P Finance News), Rated: B
ASSETZ CAPITAL has hired former bank finance specialist Samantha Williamson to boost its team of regional relationship directors.
Williamson will supervise the peer-to-peer lending platform’s activities in the South Manchester region.
She previously worked as business development manager at financial independent broker Positive Commercial Finance, helping firms grow through non-traditional finance avenues.
Prior to that, she served as senior real estate manager at Barclays and commercial lending manager at Santander, both posts located in the Manchester area.
From beach to boardroom: Iced coffee king surfing to success (London Loves Business), Rated: B
Who’s bankrolling you?
We are. And so is Funding Circle. The banks have been completely useless.
What advice would you give other entrepreneurs trying to secure that kind of finance?
It depends on how much you’re looking for and how long you’ve been trading, but if you need money, I’d go crowd funding, 100 per cent. If you are well under the table with trading, I’d take a look at funding circle.
WeiyangX Fintech Review (Crowdfund Insider), Rated: AAA
Search engine giant Baidu Inc. is to quit crowdfunding market and pay more attention on artificial intelligence”]. Users will not see the “Baidu Crowdfunding” channel when they log in their Baidu Finance account, but will still be able to check the crowdfunding history.
On May 25, China Rapid Finance Limited, a leading online consumer lending marketplace in China, reported its unaudited financial results for the quarter ended March 31, 2017.
Transaction and service fees
- Number of new borrowers added in the first quarter of 2017 was approximately 545,000. As of March 31, 2017, the Company had reached approximately 2 million unique borrowers on its marketplace since inception, and the total number of loans facilitated on the Company’s platform grew to approximately 15 million.
- Total loan volume facilitated on the Company’s marketplace in the first quarter of 2017 increased to USD485 million, primarily driven by the rapid expansion of consumption loans, which accounted for USD405 million of the total loan volume.
- Total number of consumption loans facilitated in the first quarter of 2017 was 4 million, while total number of maintenance loans facilitated was 6,000.
Ant Financial, the financial arm of Chinese e-commerce giant Alibaba, became the latest player in Hong Kong’s competitive mobile payments market after it announced the launch of its mobile wallet for Hong Kong users on May 24.
On May 25, Ant Financial announced to launch the car insurance rating mechanism for the insurance industry to improve the risk management capability.
Three primary reasons for the boosting Cash Loan in China (Xing Ping She Email), Rated: AAA
By Dr. Yang Li
From 2017, the number of cash loan companies have increased tremendously in China. Various kinds of cash loan firms have mushroomed, including CashBus, MagicCash, GoldBar of JingDong, Ants Borrow of Alibaba, WeiliDai of Tencent, etc. So far, there are already thousands of small cash loan platforms exists in China, and many of them have received fund financing from top VC investors such as Sequoia Capital, Innovation Works, and ZhenFund.
Why cash loan growth explosively in a short period? The following three reasons may explain.
Reason 1: The lower threshold of credit system by Big data method.
In the past, credit system was mainly referred to Central bank credit system, however, it could not cover most people. The information of vast majority of low-income, unregistered social groups have not been collected in the credit system, but they have extensive borrowing needs.
As big data technology developing fast these years, many data companies are growing rapidly, and they acquired data for business use. Owing to the big data credit system, cash loan platforms are able to evaluate the borrower’s credit situation from multi-dimensions: traits of character, consumption habits, loan demand, repayment willingness, etc. In this way, the problem of information asymmetry between the investors and borrowers is eliminated, making the cash loan business prosper in the broadest social group.
Reason 2: Vertical specialization of cash loan industry provides more business opportunities
The division of the cash loan industry is now divided into receipt, audit, lending and collection, each process are served by independent and professional companies or teams. With the booming of cash loans, an ecological chain around the industry has been derived, including data processing companies, business consulting companies, law office specialized in collection, etc.
The vertical specialization of the industry made cash loan platforms extremely convenient in obtaining customers, audit management and collection, so that the platforms can save more costs and gain more business opportunities.
Reason 3: Changing of the public consumption concept stimulated loan demands
With the improvement of people’s living standards and the popularization of deficit spending concept, the public consumption concept has been changing a lot.
Consumer demand is beginning to diversify. There are not only the need for food and clothing, but also spiritual needs of learning, fitness and travel, etc. And the consumers’ attitudes are gradually transforming from rational consumption to perceptual advanced consumption. Spending “future money” at “the present” is becoming a common social spending habit, for example, more and more people choose to purchase cars, houses and 3C electronic products on installment. The growing advanced consumption has stimulated the loan demand across society.
Fintech is King of Lithuania’s Tech Revolution (Red Herring), Rated: A
Under Soviet rule Lithuania became known as a center for laser technology and bioscience, the latter of which now accounts for 1% of GDP and is growing at almost 25% annually. Last year businessmen, scientists and the government signed an agreement to make Lithuania the European hub for health and biotech innovation by 2020.
But it is fintech that has taken the strongest grip on the country’s tech scene. TransferGo, WoraPay, Blender, Simplex and IBS are just a few of a small but growing clique of firms taking advantage of strong local talent, low wages and public pledges.
Lithuania is the only jurisdiction in the EU to have a special-purpose banking license, allowing the foundation of a bank with registered capital of just €1m ($1.1m).
Vaidas Adomauskas first imagined WoraPay, a payment platform, while waiting to pay for food at a restaurant. Now it is backed with almost $1m in funding and is headquartered in London–which many believe to be Europe’s fintech capital.
Capitalizing on the Lithuanian fintech craze, Rise, the Barclays-backed Rise coworking franchise, opened a location in capital city Vilnius last year. It has 50 working spaces, an auditorium and conferencing facilities for entrepreneurs trying to get a foothold in financial tech.
Marketplace Lending News Roundup – June 3 (Lend Academy), Rated: AAA
Behind the Scenes at Orchard Platform, a Struggle to Innovate from The New York Times – The long and winding road of Orchard’s plans for a secondary loan market.
Peer-to-peer lender RateSetter raises £13m, Woodford and Artemis lead from AltFi – In the UK RateSetter has closed another £13M equity round as they get closer to full FCA approval.
SoFi and JetBlue Help Customers Managing Student Loans Earn Reward Travel from PR Newswire – This week SoFi announced that you can earn up to 50,000 JetBlue reward points by refinancing a student loan.
Did someone cancel the fintech revolution? from Finextra – The promise of fintech has not yet been released says Accenture in a new report.
Kind of Blue from FinTech Junkie – The latest from Frank Rotman comparing startups to jazz and what to do when you hit a wrong note.
Are Small Business Borrowers Bank-Loyal to a Fault? from deBanked – Despite low approval rates banks are still the top choice for entrepreneurs looking for a loan.
The impact of the latest adjustments in peer-to-peer/marketplace lending from AltFi – Good summary of the latest developments at the big four marketplace lenders in the UK.
The impact of the latest adjustments in peer-to-peer/marketplace lending (AltFi), Rated: AAA
Funding Circle ditches property
AltFi Data’s analytics engine shows that only one quarterly cohort of Funding Circle’s property-backed lending resulted in any bad debt. This came in the third quarter of 2015. Bad debts for this cohort have reached 4.67 per cent – but it’s important to note that recoveries may still be made, and that this is just one of 17 quarterly cohorts. The size of this cohort is about £34m.
RateSetter stops wholesale lending
The firm has now lent a little over £1.9bn in loans, of which 15.4 per cent are wholesale. As can be seen in the chart below, the overall trend is down.
More capacity at MarketInvoice?
Well, since unveiling the new product in February, MarketInvoice has posted back-to-back monthly origination records (versus all previous months in its existence), with £42m in March and £35m in April.
But this isn’t yet feeding through in terms of outstanding principal per month, which is hovering at around £25m per month, versus an all-time high of £35m.
Investors are falling over themselves for Zopa loans, but should they be?
The net returns delivered to Zopa investors has been fairly consistent at between 4.5 and 5.0 per cent for the past two and a half years. But the rate being paid by its borrowers is climbing.
Zopa’s average gross interest rate has steadily increased from 5.3 per cent at the outset of 2015 to 8.4 per cent in April 2017. The reason for this is simply that a higher proportion of Zopa’s loans are now being made to “riskier” borrowers. But the returns being offered by the platform haven’t yet adjusted to reflect this.
Crowdfunding, millennial buyers and higher mortgage rule real estate in 2017 (International Business Times), Rated: A
Interestingly, real estate crowdfunding is not limited to the US market. It is actually one of the hottest trends in the overall global realty market today. Realty crowdfunding platforms are continuously being launched in the UAE, Asia and even Egypt. In fact, a leading Singapore-based realty crowdfunding platform recently raised around S$1 million (AU$0.98 million) in the first funding round for a company.
If crowdfunding is the signature trend of real estate in 2017, the rise of millennial home buyers is a close second. The oldest millennials are now in their mid-30s and are planning to have their own houses. Marriage is on the cards for most of them, further creating the urgency for a new home. Most jobs have been designed for the 25 to 34 age bracket, with wages happily rising. Overall, it is a highly favourable situation for millennials to think of a new house this year.
On the other hand, the recent Brexit fallout has had a major impact in the contemporary real estate scene. With UK realty currently going through an uncertain phase, the US real estate scene is fast hogging the limelight in the global property market. The Chinese market, too, is currently moving along a slow tide, which presents an advantage for US developers. The American commercial real estate is to benefit in particular, and speculations are on the rise about steady foreign investments in the country.
Crowdsurfer adds Zopa data (Finextra), Rated: A
Zopa, the world’s first and one of the largest peer-to-peer (P2P) lenders, has lent in excess of £2.3 billion to customers in the UK, and the addition of its data set will deepen Crowdsurfer’s insight into the global alternative finance market.
Cambridge-based Crowdsurfer analyses data from more than 900 different alternative finance platforms, including equity, bonds, SME debt, P2P and more, and has mapped more than ten million transactions to provide the most in-depth take on global trends and patterns in alternative finance.
How robo advice fees compare to multi-asset funds (AltFi), Rated: A
Will robo advice spark a price war? We crunched the numbers looking at how much platforms charge compared to a typical multi asset fund.
Vanguard, a U.S. based passive fund manager, is planning to sell its index funds directly to UK consumers, charging just 0.23 per cent annually. Previously, individuals had to invest in funds through an intermediary or, more recently, via robo advisor to get access to the company’s funds.
Taking a look at the top UK robo advice platforms, we found that an investment of £10,000 would cost an average of £6.79 a month in both management, platform, and fund fees.
A £10,000 investment in 2015 held in the average fund in the IA’s 20-60% Shares sector would have cost an average £9.83 per month for a mixed fund, while the average fund in the IA’s 40-85% Shares sector would cost £10.25, according to data on the average ongoing charges figure from the Investment Association.
Putting this all together, for the average robo advice platform a £10,000 portfolio amounts to approximately 0.81 per cent fees, or £81 over a year. In comparison, the average multi-asset fund charges between 1.18 per cent and 1.23 per cent over the course of the year, with IA’s 40-85% Shares sector the higher of the two. This amounts to £118-£123 on £10,000, or approximately £40 more than the average robo advice portfolio.
Pre-RDR fees would have cost £15.42 and £14.92 on a £10,000 investment.
Moneyfarm, a robo advisor based in the UK and Italy, stands out because it doesn’t charge a management fee for any investments under £10,000, just the fund fee. Investments over £10,000 are charged 0.6 per cent.
Insurtech App Trov Connects with AXA Insurance & Celebrates UK Launch (Crowdfund Insider), Rated: A
Trov has launched its on-demand insurance platform in the UK, in partnership with AXA Insurance. Users are provided with a personalized quote and can quickly turn insurance on (or off) for an item without the need for any interaction with a traditional insurance agent.
FinTech Australia Announces New Board of Directors (Crowdfund Insider), Rated: A
FinTech Australia has announced the election of its new Board of Directors. The new Board is said to align with constitutional changes regarding gender diversity and representation from a broad number of states.
The new board members are:
- David Ball – CEO and co-founder of HyperBank (Queensland representative)
- Natalie Dinsdale – Director of Marketing at Tyro (NSW representative)
- Luke Howes – Co-founder and CEO of Proviso (South Australian representative)
- Lucy Liu – Chief Operating Officer of Airwallex (Victorian representative)
- Alan Tsen – CEO of The Week in Bitcoin (Victorian representative)
- Emma Weston – Co-founder and CEO of AgriDigital (NSW representative)
Monexo: Trying to fill the void (Free Press Journal), Rated: A
Our business structure focuses on P2P lending to three segments of borrowers – salaried individuals, practising professionals, and small and medium enterprise (SME). Right now, however, we focus only on the salaried individual segment.
Our typical borrower profile is salaried, aged 25-30 years, with an average salary of Rs 25, 000 for which the average borrowing works out upto Rs 1.50 lakh. Such a working population today is much more independent and amenable to migration. This in turn brings a lot of minor expenses and there such loans are very useful. Such borrowers are often under the under the banks’ lending radar who offer them Rs 8-10 lakh loans to start with but we create options for them (based on the amount requirement). The borrowers that we target are usually digitally savvy and appreciates the benefits that we bring to the table.
What are the benefits offered to borrowers?
First and foremost is time-saving. The borrower is made known in a minute if the loan is available or not.
Another benefit of Monexo is that it is active in the entire activity chain of P2P lending – origination, screening, profile-grading, pricing of each application, disbursement, client servicing and lastly debt collection. This is right now a key differentiator among our contemporaries.
Describe the business structure and how it would attract lenders?
Our fees are taken out of repayments made to lender (2.5 per cent) based on their actual EMI receipts.
Borrowers are graded in categories from M1 down to M8. They get an automatic upgrade when they create a repayment track record. One key criteria is that debt should not be more than 60 per cent of the borrowers’ income.
Our typical business process is approval of only 25 per cent of the applications submitted. This is because most of the 75 per cent are already defaulters somewhere.
Fintech Firm Pinjam Gears Up for Growth Spurt This Year (Jakarta Globe), Rated: A
Fintech company Gadai Pinjam Indonesia is gearing up for a growth spurt this year in a mission to expand the reach of financial services to unbanked small and medium enterprises.
The company, which provides pawnshop services and micro-loans through its online platform Pinjam.co.id, eyes to disburse between Rp 100 billion ($7.52 million) and Rp 200 billion this year, increasing up to 10 times its loan outstanding.
Pinjam will cooperate with state-owned post Pos Indonesia as well as some gold shops, to increase the number of outlets where their customers can pawn their goods. It plans to have more than 100 points in Jakarta by the end of this year.
P2P Lender Amartha Receives Regulatory Approval from Indonesian Financial Services Authority (Crowdfund Insider), Rated: AAA
Jakarta based Amartha (PT Amartha Micro Fintek) a peer to peer lending platform launched in 2010, is now officially registered with the Directorate of Institutional and Product IKNB (Financial Industry Non Bank) Financial Services Authority ( FSA).
Amartha said the approval by the financial regulators will boost public confidence in the platform and investing. Currently Amartha claims to have successfully financed over 34,000 micro businesses in parts of Indonesia to more than 10,000 registered investors, with total funds distributed to 87 billion rupiah (USD $6.5M).
Why Your Financial Planner Should Be a Robot (Knowledge.insead.edu), Rated: A
In 2015 the Singapore-based bank, DBS, surveyed 600 local mothers in their 30s about retirement. The results were revealing. Three-quarters had not started planning for their retirement. Only 25 percent thought they would have sufficient funds to retire on. The average Singaporean household, headed by a 45-year-old, spends US$3,800 per month. However, 69 per cent believe they would be able to retire on less than US$2,200 a month, while 38 per cent believe it would be less than US$1,500.
According to a 2015 Nielsen survey, six out of 10 Singaporeans only start saving for their retirement once they reach 45. They believe they will just need to double their current savings to retire comfortably with peace of mind.
In China, the social pension is the primary source of retirement income. However, 43 percent of respondents in a survey conducted by the Society of Actuaries in 2016 believe the government or their company will cut their benefits in the future. With an estimated 329 million Chinese turning 65 by 2050, it is projected there will be a US$118 trillion pension deficit.
At 55, the average male has US$98,000 and female has US$85,000, bringing the total household retirement assets at around US$183,000. However the couple now has only 12 years until retirement.
In Singapore, fintech boom is missing the ‘tech’ (Southeast Asia Globe), Rated: B
Big banks are putting a lot of effort in to improve their customer experience. WeChat Pay might not be big right now, but Alibaba bought Lazada, so Alipay’s coming. That’s going to change a lot of things. Banks are trying hard to capture their customers’ attention and build strong ties. Small-to-medium enterprise lending and security is big, particularly in Singapore. How do you protect your data? Singapore is a very strong private banking hub: a lot of money is parked here from very strange people. You don’t want to have this information leaked, so the regulation techspace is being upgraded.
Some options if you want advice from a robot (IOL), Rated: A
Jaco van Tonder, the director of advisory services at Investec Asset Management, says robo-advisers are useful to clients who cannot afford to pay for face-to-face professional financial advice.
Personal Finance looks at three offerings in the South African market:
1. Sygnia RoboAdvisor. The service was launched last year by listed asset manager Sygnia. Depending on your investment requirement and risk appetite, RoboAdvisor will expose you to unit trusts, exchange traded funds (ETFs), money market funds or cash.
• Minimum investment amounts: lump sum of R10 000 or a monthly debit order of R500.
• Management fees: 0.5% a year including VAT.
2. iTransactGo. This service is operated by Johannesburg-based exchange traded product investment platform iTransact. The company was established in 2010, and it launched its robo-adviser service last month. • Minimum investment: lump sum of R5 000 or a minimum monthly contribution of R300. • Investment term: there is a minimum term of one year. • Management fees: not more than 1.14% a year including VAT, depending on the size of the investment. 3. Bizank. The company is independently owned and has appointed Anchor Capital as the asset manager of its robo-adviser. The robo-adviser, which was launched last year, creates a portfolio to meet your investment goal (for example, retirement or buying a house) based on your responses to its questions. • Minimum investment: a lump sum of R10 000 or a monthly debit order of R1 000. • Management fees: between 1% and 1.5% excluding VAT. •
2. iTransactGo. This service is operated by Johannesburg-based exchange traded product investment platform iTransact. The company was established in 2010, and it launched its robo-adviser service last month.
• Minimum investment: lump sum of R5 000 or a minimum monthly contribution of R300.
• Investment term: there is a minimum term of one year.
• Management fees: not more than 1.14% a year including VAT, depending on the size of the investment.
3. Bizank. The company is independently owned and has appointed Anchor Capital as the asset manager of its robo-adviser. The robo-adviser, which was launched last year, creates a portfolio to meet your investment goal (for example, retirement or buying a house) based on your responses to its questions.
• Minimum investment: a lump sum of R10 000 or a monthly debit order of R1 000.
• Management fees: between 1% and 1.5% excluding VAT.