- Today’s main news: Orchard connects institutional buyers, loan originators with new Deals platform. Funding Circle lends 91M GBP to UK businesses in August. RateSetter recovering from bad loan. Keynote speakers for LendIt Europe. India’s P2p lending rules have been finalized. Juvo takes financial inclusion to Malaysia with Tune Talk.
- Today’s main analysis: What Orchard’s Deals platform does, and for whom.
- Today’s thought-provoking articles: Mike Cagney’s fall could delay SoFi’s progress. China’s ICO ban makes sense in light of P2P lending troubles.
- Orchard unveils new Deals platform. AT: “Although Lend Academy says this isn’t just a secondary market for loans, it will be interesting to see how many investors use it that way. But there are other great features, as well. This not only looks like another step in Orchard’s evolution, but in alt lending’s evolution.”
- What Orchard’s new platform means. AT: “Lend Academy talks about what the new Orchard platform can do.”
- CEO’s fall clouds SoFi’s prospects for growth. AT: “There are some very prescient insights here. The big takeaway is this could delay SoFi’s application for an ILC as well as its plans for an IPO. Evidently, the idea to step aside was Mike Cagney’s own idea. But if Renaud Laplanche can make a comeback, so too can Cagney. It will take some time.”
- Cagney has already been replaced as chairman of the board. AT: “This change was immediate.”
- More negative sentiment of the industry on the way. AT: “No doubt, SoFi’s scandal will put a blight on the entire industry. Just when we thought we were pulling out of the hole created by the Lending Club scandal, here comes another one. But I’m still optimistic in the long-term.”
- MoneyLion experimenting with augmented reality.
- Upstart making smarter loans.
- Amped advice for the new retired class.
- Woman charged with attempting to steal from online lender.
- Fintech is the fastest growing industry in the U.S.
- Plaid moves to larger headquarters.
- Kabbage head of business development to join A-list speaker lineup at small business summit.
- Funding Circle lends 91M GBP to UK businesses in August.
- RateSetter recovering from bad loan discovery.
- Orca CEO shares UK P2P lending market update.
- Goldman Sachs to make consumer lending push. AT: “Already reported, but this offers some additional insight on how it will affect P2p lending in the UK as a whole.”
- How P2P firms can help consumers beat inflation.
- Starling Banks platform Marketplace integrates with Flux.
- How to tell the difference between robo-advisors.
- The Goldman Sachs banker who left the firm to found Neyber.
- P2P leaders talk about the big stories of the past year.
- Britain’s leading fintechs band together on Brexit strategy.
- China’s ICO ban makes sense in light of P2P lending troubles. AT: “An excellent breakdown of the forces at work inside China that are affecting P2P lending and digital currencies.”
- Ping An Technology ranked in top 50 firms.
- LendIt Europe releases keynote speaker list.
- EstateGuru surpasses 30M Euro loan volume. AT: “Congratulations.”
- Groupe Societe Generale says clients will receive financial advice from chatbot soon.
- Central bank to release P2P lending norms soon.
- Finova raises Series A funds from Sequoia Capital.
- Wait for P2P lending to evolve before investing.
- Juvo takes financial inclusion into Malaysia with Tune Talk partnership. “Juvo is also the subject of today’s featured analysis.”
- United States
- Orchard Unveils Global Network Connecting Institutional Buyers and Loan Originators with New Opportunities in Private Credit (PR Newswire), Rated: AAA
- Orchard Launches New “Deals” Platform Connecting Institutional Investors and Originators (Lend Academy), Rated: AAA
- CEO’s Fall Clouds Prospects for Fintech Firm SoFi (WSJ), Rated: AAA
- SoFi CEO to step down after claims of managers’ sexual harassment (USA Today), Rated: A
- SoFi Co-Founder and CEO Mike Cagney to Step Down by Year End (Lend Academy), Rated: A
- Personal finance app MoneyLion is experimenting with augmented reality (Tearsheet), Rated: A
- Upstart, The Brainchild Of Google Execs, Is Using Fintech To Make Smarter Loans (Benzinga), Rated: A
- Amped advice for the new retired class (Financial-Planning), Rated: A
- Scotch Plains Woman Charged With Attempting to Steal $ 241,000 from Online Lender (Tapinto.net), Rated: A
- Fintech: The Fastest Growing Industry in the U.S. (Them Report), Rated: A
- S.F. fintech Plaid moves to larger HQ amid explosive growth (Biz Journals), Rated: B
- Kabbage, Indeed, Microsoft Join A-List Speaker Lineup at the National B2SMB Summit (Benzinga), Rated: B
- United Kingdom
- Funding Circle lends £91m to UK businesses in August (Bridging&Commercial), Rated: AAA
- Britain’s RateSetter recovering after ‘asteroid strike’ bad loan discovery (Daily Mail), Rated: AAA
- Orca Co-Founder & CEO Iain Niblock Shares UK P2P Lending Market Update (Crowdfund Insider), Rated: A
- Goldman Sachs plans consumer lending UK push (Business Insider), Rated: A
- A year in numbers! How P2P firms can help consumers beat inflation (P2P Finance News), Rated: A
- Starling Bank’s New Platform MarketPlace Integrates with Fintech Flux (Bank Innovation), Rated: A
- How to tell the difference between robo-advisers (City A.M.), Rated: A
- This 35-year-old banker left Goldman Sachs to start a fintech inspired by his mother (Business Insider), Rated: A
- From ISAs to authorisations: the big stories of the past year (P2P Finance News), Rated: B
- Britain’s leading fintechs are banding together to work out a Brexit strategy (Business Insider), Rated: B
- China’s ICO ban makes more sense in light of its history with fintech (TechCrunch), Rated: AAA
- Ping An Technology is the Sole Chinese Firm to Rank Among the Top 50 Firms (PR Newswire), Rated: B
- European Union
- LendIt Europe Announces Keynote Speakers for 2017 Event (Crowdfund Insider), Rated: AAA
- EstateGuru’s loan volume surpassed €30 million! (EstateGuru Email), Rated: A
- Very soon, our clients will receive financial advice from a chatbot (Business-Review), Rated: A
- Peer-to-peer lending final norms to be out soon: RBI (Moneycontrol), Rated: AAA
- Jaipur-based Finova raises Series A funding from Sequoia Capital (VC Circle), Rated: A
- Wait for P2P lending to evolve before investing (livemint), Rated: A
- Juvo Partners With Tune Talk To Drive Financial Inclusion In Malaysia (Realwire), Rated: AAA
Orchard Unveils Global Network Connecting Institutional Buyers and Loan Originators with New Opportunities in Private Credit (PR Newswire), Rated: AAA
Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. Deals is a global network where loan originators searching for new sources of financing, and institutional investors with capital to deploy, can connect, evaluate opportunities, and move forward with multiple types of transactions.
Deals is operated by Orchard Platform Markets, LLC, a wholly-owned subsidiary, SEC-registered broker-dealer, and member of FINRA and SIPC. With Deals, qualified investors gain access to a broad range of new investment opportunities, including pools of seasoned loans, forward flow agreements, and credit facilities—along with all underlying deal data and an enterprise suite of credit analytics solutions to evaluate each prospective transaction. Originators with pools of loans to sell can list deals and seamlessly share data within this global network, while working with investors who express interest in a deal to conduct due diligence and analysis, and finalize the transaction’s structure and terms.
Orchard Platform’s new features include:
- Deals: Global network where pre-qualified loan originators and investors can browse a broad listing of investment opportunities and corresponding data, and utilize Orchard’s enterprise technology to seamlessly exchange information, assess potential transactions, and take the next steps more efficiently.
- Capital Management: Allocation optimization, facility monitoring, and automated borrowing-base reporting offerings to help originators better monitor utilization across multiple capital sources—and manage them with greater precision and insight.
- News & Insights: The most recent industry news, economic data, and Orchard research and commentary to keep originators and investors up-to-date on the latest industry trends and thinking. Although Deals information is only available to pre-qualified institutional investors, Orchard also provides free access to anonymized, aggregated industry data to parties seeking to learn more about the industry, including journalists, researchers, and investors.
- Advanced Analytics: Originators can benchmark origination and performance data against an aggregated and anonymized peer group, and quickly analyze any data set under multiple scenarios, to gain deeper insights into their loan books and funding channels. Investors can also take advantage of scenario testing, data visualization, and benchmarking tools to gain actionable portfolio and market intelligence.
- High-Quality Data Services: Data integrations with Orchard help originators improve the quality of their data, and streamline the process for client reporting.
Orchard Launches New “Deals” Platform Connecting Institutional Investors and Originators (Lend Academy), Rated: AAA
The key piece that I was interested in was the new Orchard Deals platform. The old Orchard Platform provided technology solutions for both originators and institutional investors but Deals is the piece that finally connects the dots. The platform connects institutional investors with origination platforms that have listed specific investment opportunities. Orchard has 55 institutional investors registered on their platform and 25 originators (with several more in the queue). Originators cover the gamut of consumer, small business and real estate lending.
At launch time they had an initial $500 million in active deals from 10 originators listed on the platform. These are both primary and secondary deals.
To be clear, Orchard’s new platform is far more than just a secondary market. It has several new features:
- Deals – Pre-qualified investors can browse listings of a range of different investment opportunities offered by originators.
- Capital Management – For originators to help monitor and optimize capital utilization across multiple funding sources.
- Advanced Analytics – Benchmarking of performance data against an anonymized peer group.
- Data Services – Helping originators improve the quality of their data and client reporting.
- News & Insights – Industry news and economic data as well as Orchard’s own research and commentary.
Source: Lend Academy
CEO’s Fall Clouds Prospects for Fintech Firm SoFi (WSJ), Rated: AAA
Mike Cagney’s decision to resign as CEO of online lender Social Finance Inc. casts uncertainty over the financial-technology upstart’s business prospects, its attempt to open a bank in Utah and plans for an eventual public offering.
The company has been valued at more than $4 billion by shareholders including private-equity firm Silver Lake and Japanese conglomerate SoftBank Group Corp.
In recent weeks, however, Mr. Cagney was spending less time on business issues and more on personnel and legal matters.
When the SoFi board met by telephone on Saturday, those issues occupied much of the conversation, according to people familiar with the matter. When the board meeting reconvened on Sunday, Mr. Cagney raised the idea of moving aside, arguing that his presence risked being a burden on the company’s progress. The executive told directors it would be better for SoFi if he resigned, the people said.
How Mr. Cagney’s departure will affect SoFi’s growth plans is unclear. Its management team was thinned following the departure of Chief Financial Officer Nino Fanlo, Chief Revenue Officer Michael Tannenbaum and co-founder Dan Macklin over the past few months.
Regulators require firms that are requesting banking licenses to maintain consistency in their management teams, which will likely delay SoFi’s application, according to a person familiar with the matter. The company has also been looking to hire a new finance chief to replace Mr. Fanlo who could guide it to an initial public offering. That search is now on hold until Mr. Cagney’s successor is named.
SoFi CEO to step down after claims of managers’ sexual harassment (USA Today), Rated: A
Cagney, who’s also co-founder, plans to remain in the role until the board names his successor, likely by the end of the year. He was replaced immediately as board chairman by venture capitalist Tom Hutton, who has been a board member since 2012.
SoFi, based in San Francisco, is one of the hottest startups in the personal finance sector, with revenue rising 67% year-over-year to $134 million in the second quarter. It also funded $3.1 billion in loans during the quarter.
SoFi Co-Founder and CEO Mike Cagney to Step Down by Year End (Lend Academy), Rated: A
Back in August there was the news of a sexual harassment lawsuit from a former employee. Before that there had been several senior executive departures, we have had a class action lawsuit and one of Silicon Valley’s most valuable and revered fintech companies was starting to lose some of its luster.
The New York Times is also reporting that “Mr. Cagney may have been overaggressive in expanding SoFi’s business, skirting risk and compliance controls.” That is the first I have heard about any compliance issues and if it is true then this could be a much bigger issue for SoFi.
Regardless of the what the real story this is not good for the industry whatsoever. Just when it felt like we had some momentum and the industry was starting to thrive again this is definitely a setback. The press is going to bring up the issues with Lending Club last year and we will have to deal with more negative sentiment.
Personal finance app MoneyLion is experimenting with augmented reality (Tearsheet), Rated: A
MoneyLion is timing its launch of an AR tool to coincide with Apple’s iOS 11 release, which is rumored to be this week. MoneyLion’s feature, called Grow Your Stack, will let customers get a visual representation of their account balance as stacks of cash projected over the customer’s view of the real world. It will use iOS 11’s ARKit technology.
MoneyLion joins a league of banks experimenting with VR and AR technology, advancements that have the potential to transform branch banking. As Tearsheet reported in June, BNP Paribas recently introduced a VR-based app for retail banking that allows users to virtually access their account activity and transaction records. Citi and Wells Fargo are also dabbling in VR technology, while in the PFM space, Intuit has experimented with visualizing one’s financial health as a forest.
Upstart, The Brainchild Of Google Execs, Is Using Fintech To Make Smarter Loans (Benzinga), Rated: A
About 40 to 50 percent of Americans have access to prime credit, yet 83 percent of people who have taken out a loan have never defaulted, said Girouard, the CEO of the San Franciscolending firm Upstart.
The groups who are often denied by traditional credit models — but aren’t necessarily risky — include millennials with a “thin” credit file, recent immigrants and self-employed people, Girouard said.
The average size of a loan from Upstart is between $11,000 and $12,000, and the average age of the company’s borrowers is 28, the CEO said.
Loans range between $1,000 and $50,000, with APRs from 7.39 percent to 29.99 percent and three- and five-year terms.
Upstart borrowers must be U.S. citizens or permanent residents and have a FICO score above 620.
Amped advice for the new retired class (Financial-Planning), Rated: A
The financial advice industry exhorts retirement preparedness but provides scant guidance for retirees after they reach that milestone, according to Matt Fellowes, well-known fintech entrepreneur who is launching a new digital advice platform.
Fellowes founded HelloWallet, a software company that Morningstar acquired in 2014 for $52.5 million. After a stint as chief innovation office at Morningstar, Fellowes left to launch United Income, which aims to serve a generation of retirees dealing with very complicated lives after work.
Fellowes finds fault in how the industry approaches its deaccumulation models, claiming its methods and assumptions are outdated. Key considerations for retirees managing their finances, he says — when will they die and how much will they spend before passing — are “two of the least studied questions in asset management today.”
The platform offers different tiers of service, from a digital-only option with a $10,000 account minimum and a 50 basis point annual fee, to advisor-assisted service, with either a maximum 60 basis point fee for a $100,000 account minimum, or a maximum 80 basis points for a minimum $300,000 account, which is advertised as “full service.”
United Income had a goal of reaching $38 million in assets by the end of the year. It has already passed $210 million, Fellowes says.
Scotch Plains Woman Charged With Attempting to Steal $ 241,000 from Online Lender (Tapinto.net), Rated: A
A Scotch Plains woman indicted last year as a leader in an auto-theft trafficking network has been charged in a separate scheme to steal $241,000 from an online lending company.
Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced that Tyisha Brantley, 37, was charged with computer criminal activity, attempted theft by deception and falsifying records for allegedly used her work computer at Pfizer Inc. to create and send phony bank statements to iLoan Residential Mortgage lending in an attempt to obtain a $241,000 mortgage to purchase a home in Newark.
Brantley allegedly used computer software to alter two statements from her boyfriend’s bank account; adding her name as an account holder and changing the account balance from $-525.05 to $15,933. She then allegedly used the computer to email, from her work account, the fraudulent statements to the lending company, which ultimately did not approve the loan.
Fintech: The Fastest Growing Industry in the U.S. (Them Report), Rated: A
Fintech, or financial technology, had close to $13 billion invested in it in 2016 from U.S. based companies alone.
Fintech allows digital lenders to offer competitive rates due to automation and lack of physical offices. Turner and S&P Global Market Intelligence’s estimates show that 13 of the largest digital lenders in the U.S. originated $28.39 billion in loans last year and a cumulative $68.75 billion since their respective inceptions.
S.F. fintech Plaid moves to larger HQ amid explosive growth (Biz Journals), Rated: B
San Francisco-based Plaid, which connects some of the hottest fintech apps to their users’ bank accounts, has moved to a new headquarters that’s more than double the startup’s previous home base.
Kabbage, Indeed, Microsoft Join A-List Speaker Lineup at the National B2SMB Summit (Benzinga), Rated: B
The national event takes place Oct. 3-4 and is spread over two locations in Chicago’s dynamic West Loop district: 1871 at the Merchandise Mart on Day 1, and the Revel Fulton Market on Day 2.
Other recent additions to the speaker roster include:
- Pete Steger, Head of Business Development, Kabbage
Funding Circle lends £91m to UK businesses in August (Bridging&Commercial), Rated: AAA
The peer-to-peer platform provided finance to 1,309 UK businesses during the month and reported that investors are set for a current estimated return of 6.7% per year.
Funding Circle reported that of its total lending, 24.7% was provided to businesses based in the South East.
Britain’s RateSetter recovering after ‘asteroid strike’ bad loan discovery (Daily Mail), Rated: AAA
Britain’s peer-to-peer lending platform RateSetter has managed to retain most of its customers despite leaving the industry’s trade body last month after breaching its transparency rules, its Chief Executive Rhydian Lewis told Reuters in an interview.
Peer-to-peer platforms, which bring together individual borrowers and lenders without a bank being involved, have grown rapidly in Britain since 2015 but are starting to come under regulatory scrutiny.
Lewis said that while the platform has lost some business, it has retained 95 percent of its customers despite offering them the chance to sell out at no cost between July 18 and Aug. 31.
Orca Co-Founder & CEO Iain Niblock Shares UK P2P Lending Market Update (Crowdfund Insider), Rated: A
Orca, an independent data, research, and analysis provider in the UK P2P lending market, recently shared an exclusive update via email: the UK P2P lending market outlook is bright.
“We are still seeing very strong growth across the UK peer to peer lending market with cumulative lending surpassing £10 billion at the very start of Q3 2017. In particular business lending has grown by 84.19% when comparing to the same period of 2016,” observed Orca Co-Founder & CEO Iain Niblock.
Goldman Sachs plans consumer lending UK push (Business Insider), Rated: A
The first phase of this expansion will see Goldman Sachs launch online deposit accounts, and the second will see the bank roll out a consumer lending offering.
Besides Goldman Sachs’ obvious clout, there are two reasons UK alt lenders should be worried:
- The bank has already proven itself adept at dramatic pivots. Goldman Sachs originally operated as a wealth management and investment bank, and only began serving the mass market in 2016, when it eight months later, it had
A year in numbers! How P2P firms can help consumers beat inflation (P2P Finance News), Rated: A
Consumer price inflation when we started in September 2016 was at one per cent. Since then, it has almost tripled to 2.9 per cent today.
The household savings rate – the percentage of disposable income being saved – was at 5.3 per cent at the end of September 2016, but hit record lows of 1.7 per cent in the first quarter of 2017, the lowest level since records began in the first quarter of 1963.
Savings rates have actually increased slightly. The best buy easy access rate this time last year was one per cent from RCI Bank. The same provider now offers 1.2 per cent.
Starling Bank’s New Platform MarketPlace Integrates with Fintech Flux (Bank Innovation), Rated: A
U.K.’s Starling Bank is embracing the PSD2 changes in finance with the launch of its Marketplace platform.
Rewards and receipt provider Flux will be the first company to be integrated onto this platform.
How to tell the difference between robo-advisers (City A.M.), Rated: A
Recent research from international banking group ING highlights how cautious consumers feel about using robo-advisers.
The report found that 29 per cent of consumers want more than just a simple online investment service – they want financial advice to guide their investment journey.
Interestingly, the study also found that, rather than having a computer manage their money, most consumers would prefer to personally manage their investments, even if it resulted in lower expected returns.
This 35-year-old banker left Goldman Sachs to start a fintech inspired by his mother (Business Insider), Rated: A
Goldman Sachs has invested £100 million in a fintech startup founded by two of its former bankers that lets people borrow money and repay through their salaries.
Neyber, founded in 2014 and launched in 2015, partners with employers to let their staff borrow money at attractive rates.
Repayments are then deducted from future salaries, lowering the risk for the lender and hopefully helping staff manage money better.
The startup was founded by three former investment bankers, including two Goldman alums. CEO Martin Ijaha, 35, left Goldman in 2012 and came up with the idea for the business when thinking about the experience of his family as a child.
From ISAs to authorisations: the big stories of the past year (P2P Finance News), Rated: B
Nick Harding, chief executive of Lending Works, argued that the arrival of the Innovative Finance ISA (IFISA) was “far and away the most significant event” for the sector over the past year.
John Goodall, chief executive and co-founder of Landbay, suggested that the number of Financial Conduct Authority approvals seen in the last year marked a “significant milestone” for the sector.
Britain’s leading fintechs are banding together to work out a Brexit strategy (Business Insider), Rated: B
Entrepreneurs from TransferWise, Funding Circle, Onfido, Monzo, FreeAgent, MarketInvoice, and Starling Bank have all joined the Fintech Delivery Panel (FDP), a new industry group that aims to “produce an ambitious post-Brexit vision for the UK’s fintech sector.”
The panel also includes representatives from big banks such as Barclays, HSBC, RBS and Santander.