Tuesday November 27 2018, Daily News Digest

Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

News Comments Today’s main news: LendingClub hits $1B in CLUB certificate issuance. Zopa boosts Augmentum Fintech fund returns. Monzo breaks record on crowdfunding round. Yirendai’s critical stage to regain growth. Judo gets $350M in funding. Today’s main analysis: How late-cycle expansions turn into recessions. Today’s thought-provoking articles: LendingClub does more lending during holidays. Turning LendingClub into a financial health club. Why […]

Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

News Comments

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News Summary

United States

LendingClub Reaches $ 1bn in CLUB Certificate Issuance (Lend Academy) Rated: AAA

LendingClub has seen issuance of their new CLUB Certificate reach $1bn in less than a year after first announcing the pass-through security product last December at their investor day. The CLUB Certificate was created to make it easier for institutions to invest in LendingClub originated loans.

Loan for the holidays: Lending Club loans out more during holiday shopping months (Thinknum Media) Rated: AAA

This year was a record-breaking season for holiday shopping, as online spending surged 23.6% according to Adobe Analytics.

But where is all that money coming from? While some consumers saved up for the season, others might have turned to loans, such as ones offered at Lending Club ($NYSE:LC), to pay down huge gifts or refinance debt from credit card spending.

Outside of March 2016 — a month during an unusual stretch of time right before its chief executive Renaud Laplanche stepped down and a federal subpoena came in — Lending Club typically has the most loans issued by dollar amount in the months before the holiday season, according to data tracked since 2013.

Source: Thinknum

LendingClub CEO Working to Turn It Into a Financial Health Club (Web Pro News) Rated: AAA

The CEO of LendingClub, Scott Sanborn, says that they are really looking to make membership in the club mean something and are working to take Lending Club and turn it into a ‘financial health club’ that will help people successfully manage expenses. He says that LendingClub helps by shining a spotlight on credit card debt which is the first step to doing something about it.

A Looming Crisis in People’s Overall Financial Health

We are seeing really an epidemic happening which is incomes have been stagnant for more than 20 years. All of people’s major expenses, healthcare, college, housing, is going up and it’s creating a real looming crisis in people’s overall financial health and it’s something that people just aren’t talking about. Close to half of Americans have credit card debts and they are more than twice as likely to talk about spousal infidelity than they are about the fact that they have credit card debt that they need to manage. We believe that by shining a spotlight on the problem it’s the first step to helping people do something about it.

Top fintech VCs explain how PayPal missed a golden opportunity and why they wouldn’t invest in LendingClub today (Business Insider) Rated: AAA

PayPal is arguably one of the biggest success stories to come out of Silicon Valley in the last 20 years. It launched the careers of Peter Thiel, Elon Musk, and Max Levchin and paved the way for other members of the “PayPal mafia” to make seed investments in a next generation of startups.

“OnDeck and LendingClub have scaled, strong businesses now, but you’d never invest in those companies as startups today,” Harris said. “I don’t think you would look at unsecured personal lending or small-business lending, where you have to go out and acquire customers in the wild, with no special sauce. That’s 10-year-old thinking.”

The current model many VCs advocate is for companies to find ways to offer additional services, like loans, to existing customers. Acquiring new customers can be expensive, and there’s a competitive advantage when you underwrite or target new services to existing customers, because they know more about them.

PeerIQ’s Lender Earnings Webinar; Bank Exec Comments on the Credit Cycle (Peer IQ) Rated: AAA

One of the main themes that we explored in the LEI was how late we are in the credit cycle. Most C-level executives were extremely are sanguine on the economy but are nonetheless taking precautions. PeerIQ’s view is “The good news — and the bad news — is that conditions don’t get better than they are now.” We recommend reviewing Bloomberg Julie Verhage’s “US Banks See Good Times Ahead Even as Many Prep for Downturn” for more.

Source: Peer IQ

How Late-Cycle Expansions Turn into Recessions

The current US expansion that started in June 2009 is the longest on record at over 113 months. Late expansions are characterized by low unemployment, high consumer confidence, high asset values. We currently observe a near 50-year low unemployment rate, near record high consumer confidence, and the highest level of consumer credit outstanding (although well below peak per-capita debt levels).

Ironically, it is these solid economic indicators that are responsible for the party coming to an end. In a simplified model, credit availability expands to the marginal borrower (e.g., new entrants, cov-lite corporate loans, thin-file credits, etc.) just until the marginal consumer or corporate loans creates more losses than expected. Lenders feel the pinch on credit performance and on funding due to rising rates. Lenders individually tighten lending leading to a reduction in the supply of credit on an aggregate basis.

PeerIQ’s Q4 2018 Lending Earnings Insights Report (Lend Academy) Rated: A

PeerIQ released their Q4 2018 Lending Earnings Insights Report which points to a number of themes showing the economy is strong but CEOs are striking a cautious tone. Delinquencies and defaults continue to be low as consumers have seen their wages rise and taxes drop. Lenders are increasing reserves as they anticipate credit to renormalize in the near future, saying the economy right now was too good to be true.

Read the Full Report here.

Excerpts:

Regulators are increasingly focusing on the greater role of non-banks in consumer lending.Large money center banks continue to pull-back from riskier loans such as small business and consumer lending. Large banks instead have increased their credit facility volume 6x since 2010. FDIC Chair Jelena McWilliams cites the significant role of non-banks in origination as potential for systemic risk. The FDIC is contemplating granting ILC charters to non-banks – a major shift.

Delinquencies and charge-offs in FinTech asset classes are near all-time lows, although charge-offs on prime credit are increasing. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. The change in LendingClub’s charge-off estimates across loan grades was mixed. Charge-offs on grades B and C are estimated to be higher by 28 bps and 16 bps respectively QoQ.

Small Businesses Are Poised for Growth, but Are Lenders Ready? (Business Wire) Rated: AAA

Source Business Wire

Betterment, Merrill Edge, Fidelity’s Go Lead the Pack in Digital Advice Branding, Claims Cerulli (Financial Advisor IQ) Rated: A

Robo-advice pioneer Betterment is the pack leader in digital platform awareness among investors, a new Cerulli Associates study reveals. But Merrill Lynch and Fidelity aren’t far behind, the study shows.

Among the more than 5,500 people polled, the Betterment brand was known by 15% of respondents, Merrill Lynch’s Merrill EDGE by 13%, and Fidelity’s Go by 12%. Trailing the three frontrunners was Charles Schwab’s Intelligent Portfolios and Vanguard’s Personal Advisor Services, which were each recognized by 10% of respondents, the study reveals.

For its digital platform marketing awareness study, Cerulli polled investors under the age of 45 earning more than $125,000 annually and with more than $250,000 in investable assets.

5 Business Loans You Can Get Without Being Profitable (NAV) Rated: A

With the Bureau of Labor Statistics reporting over 415,226 startup firms less than 1 year old in 2017, it’s apparent that this category of business will need funding like never before. However, business loans are tricky. On hand, they tend to offer a larger line of credit to companies than personal loans or lines of credit. On the other hand, qualifying can be difficult and often requires you to provide at least two years of documentation that you are profitable.

For the brand new business that hasn’t managed to turn a profit (yet), what is left? How can you get a cash infusion into your business in time to expand, add employees, support a product launch, or refinance existing debt? The following loans are a bit non-traditional, but just might be exactly what you are looking for in your quest for funding during your startup years.

TD Bank Launches New Digital Mortgage Experience Powered by Roostify (Business Wire) Rated: A

Roostify, a digital lending platform provider, announced that TD Bank, America’s Most Convenient Bank®, has leveraged Roostify’s technology to provide customers with a digital mortgage offering. This digital experience combines the latest in lending technology with a human-centric approach that gives TD Bank’s customers an accelerated, low-stress path to home ownership.

The deployment now provides prospective homebuyers with useful tools to assist them in finding a loan that fits their needs and budget. Leveraging Roostify’s proprietary DecisionBuilder lead tool, TD Bank’s Digital Mortgage allows consumers to explore which loan products they qualify for, right from a simple-to-use web page. Consumers can then move on to apply for their chosen loan in minutes, and follow a streamlined, all-digital process for moving their loan through closing. With easy access to TD Bank’s expert loan team, homebuyers can enjoy both the convenience of a digital solution and reassurance of expert guidance as they navigate one of the most significant transactions of their lives.

The Lending Alternatives Hopeful Investors Should Know Inside And Out (Forbes) Rated: A

People buy real estate for many reasons — generating cash flow, a tax write-off, appreciation value. Some of the greatest profits are made when buying real estate in a down market. Seasoned investors and fortunate newcomers who purchased coastal residential property from 2012-2017 are sitting on healthy equity appreciation as well as competitive interest rates in the 3.5-5% range.

The traditional path to buy a property is to obtain financing through banks, credit unions or a mortgage company. Following the 2008 housing crisis, traditional lenders implemented more strict guidelines: Stellar credit scores from 740 and above, stable employment, a low debt-to-income ratio, six months or more of liquid reserves.

For hopeful investors unable to meet these demands, alternatives are to pay all cash or to finance the purchase using hard money financing or a private lender. By utilizing one of these two methods, buyers also do not have to be concerned with the mounds of paperwork lenders requested. There are some advantages and disadvantages by using either type of alternative financing.

How Marcus by Goldman Sachs took to the streets of New York to market its high yield savings account (Tearsheet) Rated: A

Marcus, the online consumer bank by Goldman Sachs, has been running a man-on-the-street ad campaign about recent research the company conducted. According to the survey, 60 percent of Americans with savings accounts don’t know the interest rate on their savings account, and *more than half* of Americans with savings accounts (56 percent) opened theirs without exploring other options.

Dustin Cohn, head of brand and marketing communications at Marcus, joins the podcast to talk about the survey and why Marcus chose interest rates as a differentiator. We unpack the recent advertising campaign and explore the recent acquisition and integration of personal finance app, Clarity Money.

Ross: Easy money and the rise of ‘neo banking’ (My NorthWest) Rated: A

Banks are entering a whole new era. It’s called neo banking. Because it’s so “neo.”

You just sign over your paycheck, and suddenly you can buy things with a wave of the phone. As far as I can tell, you just look romantically at what you want to buy – and it’s yours!

You can even get loans. But it’s friendlier because neo banks don’t have loan officers who look at your income statement and say “Ha ha ha, you’re kidding!”

United Kingdom

Zopa helps boost Augmentum Fintech fund returns (Peer2Peer Finance) Rated: AAA

ZOPA’S latest funding round has boosted the value of Augmentum Fintech’s portfolio, helping the fintech investment fund report net asset value growth of 5.1 per cent in its maiden financial results.

UK-listed Augmentum Fintech unveiled its first financial results on Monday since launching in December 2017. It reported that a recent £60m private fundraise by Zopa had boosted the value of its stake in the lender by £3.5m to £22m.

Augmentum Fintech Sees Portfolio Rise In First Interims Since IPO (Morning Star) Rated: A

Augmentum Fintech PLC reported its first interim results Monday since listing on the London Main Market in March.

In the period from incorporation on December 19 last year to September 30, the fintech venture capital investor had a net asset value total return of 5.1%.

At September 30, Augmentum Fintech’s NAV per share was 104p. The company’s net assets at September 30 totalled GBP97.8 million.

The company’s portfolio fair value increased 62% since the company listed in March to GBP53.9 million on September 30 from GBP33.3 million on March 13.

Monzo confirms record-breaking UK fintech crowdfunding round (City AM) Rated: AAA

Digital bank Monzo has today announced it will be heading back to the crowd for the last chunk of its series E fundraising round, with a target of up to £20m.

The raise, first reported exclusively by City A.M. in August, will be the largest fintech crowdfunding round in the UK to date.

Going live on Exeter-based platform Crowdcube, existing Monzo investors will get early access to the round from 3 December. The round will then be opened up to other Monzo customers, who can invest up to £2,000.

Banking app Monzo explores expansion into high-cost loan products (The Telegraph) Rated: A

Monzo, the financial technology start-up,  is considering launching loans aimed at “the Wonga segment” of the market, its chief executive Tom Blomfield said.

Mr Blomfield said he hopes in future to offer loans to people with poor credit scores who may not be able to access more traditional loan products.

UK Competition and Markets Authority Questions PayPal Acquisition of iZettle (Crowdfund Insider) Rated: A

The UK Competition and Markets Authority (CMA) has issued a statement on the PayPal acquisition of iZettle – an event that was announced in early 2018 and closed in September. PayPal purchased Sweden based iZettle for $2.2 billion as the company seeks to gain access to iZettle’s point of purchase credit platform.

The CMA stated:

“… the CMA has found that PayPal could face insufficient competition in the UK after acquiring its market-leading rival. The finding raises concerns that the merger could result in customers, which include small and medium-sized businesses, paying higher prices or receiving a lower quality service.”

The CMA added that iZettle could have provided strong competition for PayPal if the company had not moved to take over the Fintech.

NatWest digital loan ceiling lifted to £700K (FinExtra) Rated: A

NatWest has today announced the launch of a new digital platform which will be available to all NatWest business and commercial customers allowing them to apply online for secured and unsecured loans of up to £750,000 – the largest digitally available loans in the industry.

The new platform, available to all business and commercial banking customers who use online banking, will allow applicants to complete the process in a matter of minutes, with a decision being communicated to customers usually within 24 hours, sometimes immediately. This fully digitised application process streamlines the customer experience and reinforces NatWest’s position as the UK’s leading commercial lender.

NatWest’s development underlines the bank’s commitment to further improving its digital offering and builds on the success of its ESME Loans platform, which provides loans of up to £150,000, Mettle – the standalone digital business current account, and LenderComm, the first production use of blockchain in the syndicated loan marketplace.

Arbuthnot Commercial Asset Based Lending supports acquisition of Euxton Tile Supplies Ltd (Bridging Loan Directory) Rated: B

Arbuthnot Commercial Asset Based Lending (ABL) has supported the acquisition of Euxton Tile Supplies Ltd (Euxton) by Earle Group with a £2m asset based lending facility, comprising a £1,250,000 confidential invoice discounting line and a £750,000 cash flow strip to provide the desired level of headroom in the transaction.

Wonga to automate compensation claims (TNT Magazine) Rated: A

Wonga, the payday lender that went into administration this August, plans to automate its compensation claims process – sparking fears that customers will lose out. Accounting firm Grant Thornton is in the process of winding up Wonga and is legally obliged to assess the claims of all customers who believe that they have been mis-sold loans.

The Guardian reports that in a bid to cut costs the administrators are creating an automated ‘adjudication tool’ that will decide which claims to pay out on, rather than processing each claim manually.

In its October letter to creditors, Wonga said that it had been receiving roughly 200 to 500 compensation claims every day after it went into administration on 30 August. Before that date the company had received 24,000 complaints from customers and a further 9,500 had been escalated to the Financial Ombudsman Service.

Proplend Milestone: Surpasses £50 Million in Online Lending (Crowdfund Insider) Rated: A

Less than six months after surpassing £40 million in online lending, UK based peer to peer lender in the property space, Proplend, announced on Monday it has now reached £50 million in online lending. According to the lender, all loans are commercial property backed, comprising a mix of bridging and mortgage lending risk-adjusted returns, which were funded by the lending platform’s growing band of Classic account, Pension account, and ISA “Lenders.” Proplend also revealed:

“By circumventing the traditional banking system, our Lenders have access to secured, inflation-beating fixed income returns whilst providing creditworthy commercial borrowers with an invaluable source of fast, flexible, interest only alternative funding. Having facilitated its first loan in 2014, Proplend has since accommodated over 50 commercial facilities, each loan typically funded within 24 hours by more than 100 participating Lenders. With a maximum loan term of 5 years, 20 loans have fully repaid to date with more than £15m capital returned and over £4m interest earned across the book – much of it tax-free.”

China

Yirendai Is At A Critical Stage To Regain Growth (Seeking Alpha) Rated: AAA

Yirendai Ltd (NYSE: YRD) released the third quarter 2018 earnings on November 12, with diluted Earnings per ADS of RMB2.43 (USD$0.35), decreased from USD 0.5 from second quarter. Considering the application of ASC 606, the adjusted earnings per ADS (if ASC were not adopted) is RMB 5.89 (USD 0.86), increased from RMB 4.91 in the same period from last year.

  1. The volume of newly originated loans has been decreasing, more than the loan volume decrease of the industry. We can compare YRD’s loan volume with the industry, as well as some competitors, as below.
    Source: Seeking Alpha

WeiyangX Fintech Review (Crowdfund Insider) Rated: A

Ping An Invests $47 million in Berlin-based Fintech Startup Finleap

The Ping An Insurance Group’s Global Voyager Investment Fund led a €41.5 million ($47 million) investment towards Berlin-based Fintech company Finleap.

Internet Finance Association of Jiangxi Province Issues P2P Exit Guidelines

On November 16, the Internet Finance Association of Jiangxi Province issued the “Guidelines for the Exit of Online Lending Intermediary Organizations in Jiangxi Province (Trial)”, stating that online lending institutions should put the rights of protecting lenders at the top of their exit work and minimize the loss of lenders. The guidelines specifically mention that when a P2P institution exit, it needs to take eight steps, namely:

(1) to file an application for withdrawal;

(2) to set up an exit work leading group;

(3) to issue an exit notice and close some platform functions;

(4) to prepare a business list of circumstances and formulate an exit plan;

(5) submit an exit plan and other related materials;

(6) publish relevant information such as the exit plan;

(7) implement the lender’s funds as planned, and steadily settle the stock items;

(8) completion of the exit.

European Union

Lendingblock Receives In-Principle Licence as DLT Provider in Gibraltar (Crowdfun Insider) Rated: AAA

Securities lending platform for digital assets Lendingblock has issued a statement indicating that the Gibraltar Financial Services Commission (GFSC) has made an in-principle decision to grant the firm authorization as a Distributed Ledger Technology (DLT) provider. Lendingblock adds that it continues to work closely with the GFSC as it seeks the full DLT licence.

Lendingblock says that following this decision, and the successful testing period, the Lendingblock platform is open for institutional onboarding in preparation for launch.

Market participants are now able to sign up for access and will be able to commence borrowing and lending  BTC, ETC, BCH, and LTC beginning early next year.

Digital lenders ‘must keep investing to grow’ (IBS Intelligence) Rated: A

Research from digital ID specialist Mitek has concluded that there is a huge opportunity for digital lenders to grow, if they continue to invest in digitisation.

The findings have been published as a whitepaper, authored by fintech research practice Autonomous NEXT. Titled European Digital Lenders, it looks into the state of the digital lending market in Europe.

He said the report found that venture capital investment is still flowing into the space and is set to hit $800m in Europe: “The UK alone has originations of over $6bn, and Europe-wide, the addressable market is $150bn – with current digital lender revenues estimated at $400m,” he added. “Moreover, the market shows impressive originations growth, with a 60% CAGR since 2013.”

Australia/New Zealand

Australian challenger bank Judo gets $ 350m funding boost (Fintech Futures) Rated: A

Melbourne-based challenger bank Judo Capital is edging towards a bank licence with a $350 million debt facility agreement with firm Credit Suisse.

The bank shared the news with Business Insider. David Hornery, co-founder and co-CEO of Judo, says the facility will provide further depth to Judo’s funding for Australian SMEs.

Short-term loan, long-term debt: Superloans under investigation after slew of complaints (Stuff) Rated: A

Short-term money lender Superloans has come under attack from people who say they target poor and vulnerable consumers, charge extremely high interest rates, and resort to illegal means for recouping their money.

The Commerce Commission has launched an investigation into Superloans after it received more than 20 complaints against the company since 2013 – several from financial advisors.

Copies of the complaints, obtained under the Official Information Act, reveal one complainant alleged Superloans threatened to take repayments out of a person’s pay cheque, illegally.

Another woman complained that a Superloans’ employee only looked at her bank statements before approving her loan application, and did not check her credit.

India

IvyCap Ventures makes first investment in P2P lending through Lendbox (The Ecomonic Times) Rated: AAA

Credit marketplace LendBox has secured the first investment by a large institutional investor in India’s peer-to-peer lending space, raising Rs 6 crore in a pre-series A financing round.

Major Trends Witnessed this year in Fintech (Entrepreneur) Rated: A

Online lending platforms have been quite phenomenal in filling in the credit void within our country. But how accomplished are they in doing so? MSME loans are considered as the trickiest element of lending given the sheer opacity that exists within the sector. This opacity has decreased the share of scheduled commercial banks in MSME credit from 95% to 90% between December 2015 and March 2018. The credit growth turned negative post-demonetization. During the same period, the share of loans by NBFCs (which are essentially used by online lending platforms) nearly doubled growing with an annual average of 35 per cent, largely because of cutting-edge technologies such as Artificial Intelligence and Big Data.

5 ways to reduce risk in P2P lending (The Economic Times) Rated: A

Lending money is a risky affair. However, there are ways to minimize the risk. Since peer-to-peer (P2P) lending is a relatively new concept and the RBI regulations for the P2P sector are barely about a year old, here are five effective ways in which you can reduce the risk to ensure getting your money back. Of course, with interest.

Understand the platform
You should try to understand how the online P2P model works before lending money on it. An investor should be aware how the money is lent on the platform and what are the risks involved in lending money on the platform.

Do not hesitate to ask the P2P player about the overall volume, defaults, recovery process and likely returns. You can do your own research or simply contact the P2P company through emails, chats or phone calls.

Do not go overboard
Sure, P2P platforms can offer your higher double-digit returns. But that doesn’t mean you should lend your entire in P2P lending. Choose the amount you wish to invest and then diversify,” says Raghavendra Pratap Singh, Co-Founder, i2ifunding.

Ex-Infosys CFO & Director V. Balakrishnan Joins Association of NBFC P2P Platforms as Patron Member (Indian Web) Rated: B

Within a month after the formation of NBFC-P2P industry bodyAssociation of NBFC P2P Platforms, the association today announced the joining of finance industry veteran & Former Infosys Chief Financial Officer V Balakrishnan as Patron Member.

P2P lending industry players have formed association to represent the Indian NBFC-P2P industry at various national as well as at international forums. The P2P operators participating in the operations are OML P2P, Monexo, PaisaDukan, Finzy, Cashkumar, Liquiloans, Micrograam, Lendsmartp2p, Peerlend and Indiamoneymart. The association aims to establish formal lines of communication between various government and regulatory authorities on matter of compliance and to create awareness about the industry and to work towards enhancement of public trust in this sector.

Asia

HonestFund Raises $ 12.2 million (USD) in our Series B round (Honestfund Email) Rated: AAA

HonestFund is one of the largest peer-to-peer lending players in South Korea. We were founded in 2015 and currently have about USD 300 million in cumulative originated loans. We have recently raised USD 12.2 million in our Series B round from the top VC firms, IT giants, and the largest financial institutions (i.e. Shinhan Bank and Hanwha Life Insurance) in South Korea.

Canada

Unlicensed online payday lenders are operating in New Brunswick (Global Newswire) Rated: A

Unlicensed online payday lenders are targeting New Brunswickers, warns the Financial and Consumer Services Commission.

FCNB has been receiving complaints from consumers about inappropriate collection practices by payday lending businesses not licensed to operate in the province.

“We are hearing that these businesses are contacting consumers who have fallen behind in their payments at their place of employment and in some cases, threatening to seek repayment from their employer. Sometimes they are contacting them up to 50 times a day,” said Alaina Nicholson, director of Consumer Affairs at FCNB. “It is against the law for a payday lender in the province to contact you at your place of work, or to contact your employers or coworkers to collect a payday loan that is late.”

Subscribe Technologies Upgrading Lendertech With Peer To Peer Lending Service And Integrating Platform Into Gingerly Marketplace (Stockhouse) Rated: A

Subscribe Technologies Inc. is pleased to announce it is upgrading the Company’s Lendertech financial technology platform with financial service auction and matchmaking features and has begun the initial phase of integrating the technology with the Company’s flagship Gingerly small business software application marketplace.

LenderTech facilitates greater and broader access to capital for those in need, including across a number of traditional and emerging areas such as mortgages, commercial lending, auto loans, student loans, and small business loans, among others.

As intended, our development team is now integrating this money lending service into the Gingerly software application marketplace and dashboard, with the addition of new Peer-to-Peer matchmaking features, designed for SMEs to have greater and faster access to lenders in one clean and simple to use interface.

IOU Financial Inc. Joins the FINSYNC Lending Network  (PR Newswire) Rated: B

 IOU FINANCIAL INC., a leading online lender to small businesses (IOUFinancial.com), is pleased to announce its strategic partnership with FINSYNC, Inc. (“FINSYNC”).

Small businesses of all types rely on FINSYNC to visualize, manage and project cash flow and analyze loan options.  IOU’s non-collateralized financing product has been assimilated by FINSYNC, enabling users who apply for financing through FINSYNC to quickly access IOU’s affordable, flexible financing for working capital and expansion.

Africa

Nigeria’s mixed signals on fintech (Euromoney) Rated: AAA

Earlier this year, the country’s central bank and the Nigeria Inter-Bank Settlement System opened a regulatory sandbox to enable budding fintech companies to develop new products freely and securely, becoming one of the first African countries to do so.

Even before that launch, Nigeria was frequently touted as the continent’s next big fintech hub, set to compete with South Africa and Kenya.

Bitcoin exchange NairaEx, online lender KiaKia and invoicing platform Payant are just three of the firms that have made a name for themselves in short order.

Authors:

George Popescu
Allen Taylor

Revolutionizing the UK Digital Mortgage Market

uk digital mortgage marketplace

There are multiple fintech lenders and marketplaces in the UK dealing in mortgages and other financial products. What sets Nuvo apart is it’s claim to be the first artificial intelligence (AI)-powered digital broker. Launched by Nick Sherratt (heads oversees operations and finance) and Richard Hayes (CEO) 18 months ago, Nuvo fills the gap between traditional […]

uk digital mortgage marketplace

There are multiple fintech lenders and marketplaces in the UK dealing in mortgages and other financial products. What sets Nuvo apart is it’s claim to be the first artificial intelligence (AI)-powered digital broker.

Launched by Nick Sherratt (heads oversees operations and finance) and Richard Hayes (CEO) 18 months ago, Nuvo fills the gap between traditional brokers and established price comparison websites. They had been running their own mortgage brokerage in Macclesfield, Cheshire for a decade, also selling life insurance and income protection. Their experience as a traditional broker helped them understand what was missing in the market. As a result, they’ve made it easier for customers to access the best mortgage offers in less than a minute, once they’ve gained some basic information from the user.

Now Nuvo Works

The focus was on user accessibility and speed of providing quotes. But the platform’s USP is its AI-powered chatbot technology, which helps users chat in real time and suggests the best mortgage products suited to their finances. The platform was established with 1 million GBP in a seed round, and it recently raised 1 million GBP in a second round of funding.

Historically, if a customer wanted advice on mortgages, he would rush toward a broker or any other independent financial advisor and, in turn, the advisor charged a fees for their advice. However, recent research conducted by Nuvo revealed that nearly 40% of Britons rely on their own research once they get a list of prices from comparison websites. But the problem is most comparison sites don’t give the full picture and can’t answer queries accurately. This passive information overload did not really solve the user problem. Thus, Nuvo was born of the need to marry the traditional mortgage broker experience with the convenient of free comparison websites.

Nuvo has digitalized large parts of the mortgage application process through incorporating real-time sourcing. With an emphasis on transparency, customers can put their queries online with the help of a laptop or other mobile device and get an instant response. Instead of collecting data from the customer through a lengthy form, Nuvo provides a platform that allows the customer to provide details to a chatbot. Customers can also opt to chat with a qualified human financial advisor via the website or by booking a telephonic interview. It means the process is a two-way process, so the customer can ask specific questions at any point if there is something they do not understand.

What Artificial Intelligence Brings to the Table

Artificial intelligence and machine learning add substantial value by bridging the data, information, and context gap so that the virtual assistant and its human counterparts can deliver a seamless customer experience. If the platform lacks data, or the customer provides insufficient data, then it implements sentiment analysis to ascertain intent. Sentiment analysis identifies the customer attitude, emotions, and opinions. If the platform feels like customers are unhappy and/or confused, they can quickly add it to their processing and allow the virtual assistant to interact without sacrificing user experience. There is no need on the part of the customer to wait for a response if the virtual assistant is unable to answer a complex question. Nuvo removes the uncertainty and interjects with a human being.

The first version of the product launched was a Facebook chatbot with some basic functionality that helped people find the best deals on mortgages. Soon, Nuvo will launch the new version integrated on their site with a state-of-the-art user interface, better communication technology, and a next-gen interaction process. Nuvo utilizes its access to endpoints for a better user experience. It also ensures that APIs match the products the platform is offering to users.

The platform launched after the review by UK’s regulator, The Competition and Market Authority (CMA), which recommended that customers use a variety of sites for comparing the best deals. But there are no other companies giving real insight into the market and products.

The UK Mortgage Market Has Not Caught Up With Technology

Most digital brokers are startups and not evolved from traditional brokers. Products and prices are changing constantly. Nuvo allows customer to find the most suitable offer by updating information on a daily basis. Customers can see and compare all the options to make sure they are getting the best deal, eliminating the need for a traditional broker. Also, the founders’ traditional brokers’ practice became a competitive advantage for Nuvo as it enables the company to combine domain expertise and knowledge in their aim to better serve customers.

The UK is one of the largest marketplaces for mortgage deals. Habito and Trussle are other startups aiming for a slice of UK’s lucrative mortgage market. But Nuvo is in for the long haul and believes it can achieve a market share of 5%-10% of the online mortgage market in the next five years.

According to Nuvo founders, they have 10,000 more deals on their platform than Habito at this moment. There is an in-house team of financial experts that assist the customer in solving complicated financial decisions at zero cost. Nuvo does not charge fees to customers like traditional brokers. Instead, they get a commission from the insurer or the mortgage provider.

Founder Richard Hayes said, “Millennials are now willing to transact digitally, so we have an opportunity to resonate with anyone who is willing to engage digitally.”

So far, the mortgage sector has not been able to innovate to meet the demands of customers, but Nuvo, with its AI-powered chatbot, is attempting to simplify the on-boarding process. They are also focused on first-time buyers to build trust and confidence in the mortgage ecosystem.

A major tailwind for digital brokers is the slow but steady death of brick-and-mortar mortgage advisors. In 1985, there were over 120k independent financial advisors in the mortgage space, but now it’s under 20k. Correspondingly, there has been a massive increase in people seeking mortgages. This suggests that the market is consolidating and scale will be an important element in winning the sweepstakes.

How Nuvo is Capturing the Future Digital Mortgage Market

“2018 will see a full mortgage journey on our platform,” Hayes said. Nuvo is incorporating new features to speed up the application process and using APIs to enhance the customer experience at large. “We all know that buying a house is a costly and long process.” Thus, the platform assimilates all the information about property such as value, construction details, and more, from different sources to help the customer get the best mortgage deal and insights about the property itself.

The platform is focused on its journey to help borrowers find the best mortgage and other financial products. It is looking to raise further funding to grow aggressively in this massive market space with its proprietary AI technology.

Author:

Written by Heena Dhir.

Friday January 5 2018, Daily News Digest

small business lending

News Comments Today’s main news: Wealthfront gets backing from Tiger Global. Funding Circle partners with Kansas bank. Elevate customers see rise in credit scores. NextCapital raises $30M for digital advice platform. London tops tech funding. HMT Treasury says P2P lending not deposit-taking. Yields lower in Euro zone as MiFID II begins. Today’s main analysis: FT Partners’ CEO monthly alt lending market […]

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An investing startup that grew by $ 100 million in a single day just got some big name backing (Business Insider), Rated: AAA

Wealthfront, a robo-adviser with more than $9 billion under its management, announced Thursday that Tiger Global, the New York investment firm, would lead a $75 million fundraising round.

Wealthfront plans to use the new capital to enhance its Path platform, which allows users to view all of their financial accounts.

“Path’s appeal to young people propelled our growth such that people under 45 now represent 85% of our clients,” Wealthfront cofounder Andy Rachleff said in a statement.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

As FT Partners wraps up 2017 and looks forward to 2018, we are extremely proud of our accomplishments. Celebrating over 16 years in business, we executed a record number of deals, significantly expanded our team, continued our global expansion and won a number of industry awards during the past twelve months. We are confident that 2018 will be another successful year for the Firm and we are incredibly thankful to our clients and friends across the industry.

In case you missed it, we recently published our latest in-depth, 200+ page industry report: “

Source: FT Partners

Read the full report here.

Business-Loan Growth Fell Off a Cliff in 2017 and No One Can Figure Out Why (WSJ), Rated: AAA

Business-loan growth fell to its lowest levels since the aftermath of the financial crisis in the final weeks of 2017, a puzzling development that could weigh on bank earnings later this month.

Bank loans to companies grew 1.1% from a year earlier as of Dec. 20, up slightly from a 0.8% rate the prior week, according to Federal Reserve data. That Dec. 13 level was the lowest since spring 2011, when banks were just starting to lend to companies again after the financial crisis.

The readings likely cement 2017 as the worst year for this type of lending in recent history. The average weekly rate of business-loan growth was 2.7% for 2017 through Dec. 20, compared with 9.3% in 2016 and double-digit growth in the two years before that.

Looking at 2018: A Discussion with Ron Suber (Crowdfund Insider), Rated: AAA

“[People] from the banking industry from the tech industry. We have grown up,” said Suber. “We had some people that were great from the early days but were not good for long term growth. There has bee a major turnover in the leadership at many of these companies. My call is that companies are focusing on cash flow, profitability and EBITDA for the first time. Earnings on GAAP basis … I think that is great for the industry. You are seeing companies generate cash. [In the past] Prosper did $400 million in month and it lost money. Now it is doing, say $200 million a month and it is making money. They are being run to be profitable businesses. That is the takeaway from 2017.”

Suber says that today, Prosper makes money every quarter. They have $100 million on the balance sheet and it gets higher every month.

“We are seeing lots of money coming in from Asia to buy loans now. More than ever,” added Suber.

LendingClub, a reporting company, has had a tough two years as its stock has tanked while Wall Street looked elsewhere for growth.

ELEVATE ANNOUNCES BOOST IN CUSTOMER FINANCIAL HEALTH (BusinessWire), Rated: AAA

More than 140,000 customers of Elevate’s RISE product have seen an improvement in their credit scores. Additionally, more than 35,000 RISE customers are now eligible to receive at least a 50 percent reduction in their APR and more than 13,000 customers are eligible to receive RISE’s lowest rate.

More than 160 million Americans are either non-prime or “credit invisibles,” without any credit score. These customers account for almost two-thirds of the U.S. population, yet are significantly underserved by the traditional financial industry.

RISE loans are originally priced to risk. Customers are eligible to receive 50 percent off of their rate on subsequent loans after 24 months of payments, eventually achieving a further reduction to 36 percent. Today, more than 35,000 customers have received or are eligible to receive a 50 percent rate reduction and more than 13,000 customers are eligible for an APR of 36 percent.

About the Data

Elevate worked with a major credit bureau to which it reports, gathering anonymized data on RISE customers. Elevate reviewed credit scores of customers from the customer acquisition point up to two quarters after loan completion.

The number of customers who have reached the necessary number of payments to receive a rate reduction was calculated by tabulating the number of accounts at the number of payments necessary.

  • 24 months of payments are required to receive 50 percent off of the customer’s original APR
  • 36 months of payments are required to reach 36 percent

NextCapital Raises $ 30M for its Digital Financial Advice Platform (ChicagoINNO), Rated: AAA

NextCapital officially announced Thursday that it has raised $30 million in new funding to grow its enterprise digital advice platform.

The Series C round brings the company’s total funding to more than $52 million. The round was led by Oak HC/FT, and included additional investments by Manulife Financial, Transamerica Ventures, Vermont Seed Capital Fund and Route 66 Ventures.

FSOC Annual Report on Financial Stability Highlights Marketplace Lending (Lend Academy), Rated: A

Last month the Financial Stability Oversight Council (FSOC) released their annual report. This 165-page report highlights potential risks to our financial system by looking at new developments and providing recommendations to improve financial stability.

Section 4.14 of this year’s report deals with new financial products and there is an entire section on marketplace lending. Here is their conclusion about our space:

Although marketplace lending has the potential to reduce costs and expand access to credit, the extent to which these benefits have been realized thus far is unclear. Furthermore, the marketplace lending model has not been tested through a full credit cycle. There are risks that misalignment of incentives could exist on these platforms.

Can blockchain technology revive peer-to-peer lending? (American Banker), Rated: A

The original premise of online peer-to-peer lending platforms was simple and democratic: A single mom from Kalamazoo, Mich., could post her story explaining why she needed $5,000 to pay off her credit card, and a retired electrician in Illinois could read it, decide to fund her loan and receive interest far exceeding what he could get on his savings account.

LendingClub and others that proffered this people-helping-people model quickly found they needed to make changes.

 

Unbanked vs. Underbanked: Who they are and how they differ (MicroBilt), Rated: A

Slightly more than two-thirds of households in America frequently make use of traditional banking services, according to the Federal Deposit Insurance Corporation. But that leaves 33 percent of people in the U.S. who don’t, a significant percentage by any measure.

Unbanked

As the title implies, unbanked Americans are those who don’t make use of any banking services whatsoever. This includes debit cards and checking accounts, as well as savings accounts. In 2015 – the most recent year for which data is available – the unbanked represented 7 percent of U.S. households, translating to approximately 23 million individuals, including children, the FDIC reported. The percentage of unbanked households in the U.S. is down slightly from 2013, when it was 7.7 percent.

Families have a plethora of rationales for why they opt to go without banking services, but it’s usually due to what they do not have in terms of savings. Nearly 57 percent of unbanked households cite this as their prime reason, according to the FDIC report.

Underbanked

Around 20 percent of Americans are underbanked, according to the FDIC, which means they have either a checking or savings account, though rarely both. Households are also usually given the underbanked distinction if they’ve used alternative financing options during the previous year, such as money orders or rent-to-own services. Around 67 million Americans are underbanked, or the equivalent of 24.5 million households, based on 2015 figures from the most up to date FDIC survey.

As far as demographics are concerned, millennials are among the most likely to be underbanked, with 31 percent of them under the age of 24, according to federal figures.

‘We don’t need to stay in the student market’: How BankMobile wants to grow its offering and replicate its model (Tearsheet), Rated: A

BankMobile, the digital-only bank that offers checking accounts to students, wants to start offering them credit.

The three-year-old Customers Bank subsidiary launched a personal loan product for its customers at the end of December, but that was just the first of a suite of credit products the bank plans to roll out this year as part of its “customer-for-life” strategy, according to Luvleen Sidhu, president and chief strategy officer.

BankMobile has 1.8 million customers to date and has opened about 300,000 new accounts each year in the student demographic through its university partnerships.

Why are you expanding into credit now?
We’re just looking at our demographic. Many in our current customer base are living paycheck to paycheck — that’s why personal loans make sense.

How do you plan to expand your products after the personal loan?
We have a lot of products to introduce on the credit side: credit cards in the second quarter, student refinancing in the second quarter, auto loans and home equity by the second half of next year.

You’re partnering with Upstart on credit products. What are the advantages of that approach?
In the longterm you could say it’s more expensive to partner but those costs outweigh the fact that we get to market much faster.

How has competition changed since BankMobile launched?
It’s accelerated. Challenger banks and Neobanks like Moven, GoBank, Simple and Varo continue to flourish and grow. Digital banks like Ally, USAA and Captial One 360 have really done a push in 2017 attracting millennials, tweaking their product, tone, messaging, branding to make sure they start penetrating that segment. Traditional banks are finally realizing the branch based customer acquisition model is not sufficient.

Banks compete for tech talent by helping on student loans (American Banker), Rated: A

Banks spend not only a lot of time thinking about how to attract millennial customers, but also how to get millennials to work for them.

Though banks might be hard-pressed to offer similar wages — average starting salaries at Uber, Pinterest, and Airbnb are all over $220,000, according to Paysa — they can offer something most tech companies don’t: a student loan repayment benefit plan.

Inside Citizens Bank’s branch redesign strategy (Tearsheet), Rated: A

Banking giants like Citi and Capital One with much more money and resources at hand have been making branches look more like lounges, coffee shops or museums as they figure out what to do with them with less foot traffic, but in 2018, smaller institutions could start to make a move on their plans.

The Providence, Rhode Island bank is transforming its branches into digitally-connected community centers, Johnson said.

Citizens currently has 1,200 branches, and the bank is in the second year of a 10-year plan to reduce its branch footprint as lease expiries take effect. It’s replacing paper pamphlets with digital tools, like a digital retirement checkup platform customers can use while meeting with bankers. The bank can also project digital content onto the walls of a meeting room — a nod to the digital-first habits of some younger customers. Citizens is on an ambitious track to reduce its retail footprint by as much as 50 percent — a “do more with less” approach that over the long term that will save occupancy costs, CEO Bruce Van Saun said in an earnings call last year.

How banks use behavioral economics to win over customers (American Banker), Rated: A

When a major international bank was looking to improve the response rates for its credit card mailers in 2017, rather than changing the graphics or upgrading the paper stock, it turned to a firm that could offer guidance on how consumers make decisions.

It was trying to tap into the insights of behavioral economics, a discipline that uses psychological observations about human behavior to analyze and predict how people will act.

A Fight Over the Credit Score Lenders Use for Your Mortgage (WWJ), Rated: A

Banks and rival lenders are butting heads over the credit scores used to decide millions of mortgage requests by U.S. home buyers.

Now, a federal agency is weighing whether to step into the fight, which revolves around a longtime requirement for lenders who sell mortgages to Fannie Mae FNMA -3.17% and Freddie Mac FMCC -3.31%to gauge most borrowers using FICO scores. The Federal Housing Finance Agency’s ultimate decision could have wide-reaching ramifications for the mortgage market and home buyers across the U.S.

Many nonbank lenders, which in some recent quarters have accounted for more than half of the mortgage dollars issued in the U.S., want the ability to use a credit score provided by a company owned by credit-reporting firms Equifax Inc., EFX +0.00% Experian EXPGY 0.23% PLC and TransUnion . TRU 0.80% These lenders argue the alternative score would open the mortgage market to a greater number of people and lead to more mortgage approvals, helping to boost home sales and the economy.

That is where VantageScore Solutions LLC, the scoring firm that Experian, Equifax and TransUnion launched in 2006, says it can step in.

The company says it can assign a credit score to about 30 million more consumers than FICO. Roughly 7.6 million of those consumers would potentially be eligible for a Fannie or Freddie mortgage, VantageScore says.

Envestnet Finalizes Acquisition of FolioDynamix for $ 195 Million (Finovate), Rated: A

Wealth management intelligence solutions company Envestnet has finalized its acquisition of Actua Corp’s FolioDynamix, a wealth tech solutions company, this week.

PropertyMetrics helps real estate investors create more accurate proformas (Realty Biz), Rated: A

With that in mind, a company called PropertyMetrics has built a web based platform that’s designed to help investors come up with a proforma that includes evaluation and analysis. With PropertyMetric’s software it’s possible to analyze any property in minutes, from any device. This means investors can quickly generate a quick cash flow proforma, perform a cash flow analysis and generate PDF reports from anywhere, in a matter of minutes.

10 favorite stocks for 2018 from top-ranked stock newsletter writers (MarketWatch), Rated: A

Michael Brush, Brush Up on Stocks

I also recently suggested Lending Club Corp. LC, +0.98% in part because of the huge buying by Chinese technology and internet expert Tianqiao Chen, who founded the online gaming company Shanda Interactive Entertainment years ago while he was in his 20s.

He owns around 20% of Lending Club, an online peer-to-peer lending platform. LendingClub recently tightened its lending standards, which hurt loan growth, so the company missed earnings estimates and guided down. But it still expects 15%-20% annual revenue growth over the next few years. This seems plausible given how many people with OK credit would like to refinance their credit card debt with loans. Lending Club estimates $300 billion to $350 billion in credit card debt could potentially be refinanced in this way.

An Online Lending Task Force is Coming to New York (deBanked), Rated: A

An online lending task force DFS study will be coming soon to New York, according to legislative records.

Chippewa Cree Tribe Settles BEH Gaming Ltd Lawsuit (PRWeb), Rated: B

Plain Green, LLC, the online resource for the short-term financial needs of underbanked and subprime consumers, today announces a successful settlement with BEH Gaming Ltd related to loans to the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation. Plain Green’s settlement and payment of the debt to BEH releases the Chippewa Cree Tribe and Chippewa Cree Tribe Development Corporation from all liability. The settlement amount is under seal of court order.

The agreement settles a lawsuit filed by Florida-based BEH Gaming Ltd in 2014 (Case # DV-14-142 in the 12th Judicial District Court in Hill County, Montana) to repay loans to expand Northern Winz Hotel and Casino.

Portland ad agency lands $ 126M LendingTree account (Biz Journals), Rated: B

Advertising agency R2C inked a deal late last month to become the new media partner for LendingTree Inc.

LendingTree is an online loan marketplace for financial needs like auto loans, small business loans and credit cards headquartered in Charlotte, N.C. AdWeek reports that the company had a media budget of $126.5 million in 2016, and spent nearly $61 million during the first half of 2017, though R2C won’t manage LendingTree’s entire media budget.

Growing your business? These 3 financing mistakes can cost you big (News-Journal), Rated: B

1. Not understanding the true cost of your loan

When shopping for a business loan, it’s easy to become overwhelmed by fast-talking salespeople, endless strings of acronyms and confusing terms. If it’s unclear how much you’ll really pay for financing, that’s a good sign you should walk away, Hodges cautions.

2. Getting trapped in daily or weekly repayment cycles

Term loans are often the better option, Hodges says. They allow businesses to borrow a set amount of money for a specific purpose, like hiring new staff or stocking up on inventory. The funds are then paid back over a set amount of time, with consistent monthly payments and no surprise fees.

3. Not knowing what you deserve

After seeing countless small businesses get stuck with credit products they couldn’t afford or understand, a coalition of small business advocates, lenders and online credit marketplaces came together to launch the Small Business Borrowers’ Bill of Rights. As the first-ever gold standard for responsible business lending, the Bill of Rights outlines the rights and safeguards that small businesses should expect from finance providers.

3 Behaviors To Keep Credit in Good Standing (MicroBilt), Rated: B

Source: MicroBilt
United Kingdom

London was top destination for tech funding in 2017 (Reuters), Rated: AAA

London was the top city in Europe for technology investment last year, with more funding going into companies in the British capital than into firms based in Paris, Berlin and the next seven cities combined, data showed on Friday.

Tech firms in London attracted 2.45 billion pounds ($3.3 billion) in venture capital funding in 2017, about 80 percent of the 2.99 billion pounds invested in Britain as a whole, according to data compiled by funding database PitchBook for London & Partners.

Fintech, or financial technology, was the most popular segment for investors, attracting a record 1.34 billion pounds in venture capital, the data showed, led by major rounds for TransferWise, Funding Circle and Monzo.

London’s tech scene pulls in record £2.5bn in 2017 venture capital bonanza (City A.M.), Rated: AAA

London’s tech venture capital investment reached another all-time high in 2017 as firms raked in four times more cash than Paris, the nearest European rival.

Softbank’s $502m (£392m) investment in game development platform Improbable was the biggest single investment during the year, but it was London’s burgeoning fintech firms which led the way with a record haul of investments.

European cityLondon Total funding raised (£)

2.45bn

European cityParis Total funding raised (£)

564.97m

European cityBerlin Total funding raised (£)

456m

European cityStockholm Total funding raised (£)

360.27m

European cityMadrid Total funding raised (£)

65.38m

European cityAmsterdam Total funding raised (£)

212.18m

European cityDublin Total funding raised (£)

117.45m

European cityHelsinki Total funding raised (£)

56.98m

European cityCopenhagen Total funding raised (£)

40.23m

European cityLisbon Total funding raised (£)

2.43m

Treasury clarifies whether P2P lending constitutes deposit-taking (AltFi), Rated: AAA

HMT Treasury has passed an order confirming that straight-forward peer-to-peer lending does not constitute deposit-taking.

The order relates to the now-infamous “Dear CEO” letter, sent in March 2017, in which the FCA effectively ordered P2P platforms to cease and desist with all wholesale lending activities. The rationale was that a business borrowing money in order to lend that money on constitutes a form of deposit-taking. This was deemed illegal, per article 5, paragraph 1 of the regulated activities order.

How angel investors support UK start-ups (Growth Business), Rated: A

Investing in start-ups is becoming increasingly popular and accessible in the UK. The attractiveness of that market has come from two main factors: the success of a number UK start-ups built over the past two decades (ASOS, Just Eat, Zoopla, Funding Circle) which are showing the way for many more to come and the supportive policies implemented by the various governments over the same period to encourage investment in ventures.

These schemes have proven to be extremely popular with private investors who every year invest over £1.5 billion into high growth ventures under SEIS and EIS.

So how do you get started with investing in start-ups if you are new to this market?

Your first option is to invest through online equity crowdfunding platforms (ECF) such as Seedrs, Crowdcube and Syndicate Room, which showcase dozens of investment opportunities from start-ups looking to raise equity funding from the public. The advantage of ECF websites is that they are convenient and accessible to anyone with investment tickets starting at £10.

If you consider yourself to be a more sophisticated type of investor looking to build a portfolio of investments with tickets of more than £5,000 per company, then you should probably think about joining an angel syndicate.

A third option to get started is to invest through a start-up fund.

High numbers using expensive credit to buy basic household appliances (Ekklesia), Rated: A

Research found almost 60 per cent of people on a low income turn to more expensive forms of credit to purchase home appliances because they do not have the means to pay up front or access to affordable credit. Seventeen per cent say they used a credit card to make the purchase, 10 per cent used an overdraft and 10 per cent used a store card. More worryingly, significant numbers said that they used high cost credit to buy home appliances, with 13 per cent relying on hire-purchase and eight per cent saying that they used a payday loan.

Blockchain-based banking startup Babb names Paul Johnson as CIO (Finextra), Rated: B

Blockchain-based banking startup BABB (Bank Account Based Blockchain) has appointed banking technology veteran, Paul Johnson who previously lead one of the UK’s leading challenger banks, Aldermore, as CIO to spearhead the development of the world’s first decentralised bank.

European Union

Euro zone yields edge lower as MiFID II kicks in (Reuters), Rated: AAA

Germany’s 10-year government bond yield fell 2 basis points to 0.44 percent DE10YT=TWEB, off two-month highs hit on Tuesday after weekend comments from the European Central Bank’s Benoit Coeure that there was a “reasonable chance” ECB stimulus will not be extended this year.

Most core euro zone bond yields were down 1-4 bps on the day, with the gap between Italian and German 10-year bonds yields tightened to 160 basis points as Italian yields dropped as much as 6 bps to 2.03 percent. IT10YT=TWEB

Ireland meanwhile kicked off its annual funding drive by raising 4 billion euros with a syndicated 10-year bond, covering around a quarter of its issuance target just three days into the year.

P2P platform bosses offer cautious support for pan-EU licences (AltFi), Rated: A

“Opt-in passports” are the way forward, says Lendix co-founder Patrick de Nonneville.

The EU Commission is laying the groundwork for a licence that will allow European crowdfunding and peer-to-peer lending platforms to operate across the bloc.

“We think it’s a great development that will be useful for us,” said Patrick de Nonneville, chief operating officer at French marketplace lender Lendix.

Raffael Johnen, CEO and co-founder of leading German marketplace lender auxmoney, offered his thoughts.

“Getting closer to a single digital market will further boost the creation of true European fintech champions.”

International

Online lender Funding Circle inks partnership with Kansas bank (American Banker), Rated: AAA

Funding Circle, an online lender that operates in four countries, is partnering for the first time with a U.S. bank.

On Thursday, the 7-year-old company announced a deal with Intrust Bank in Wichita, Kan., under which it will sell $20 million worth of its small-business loans to the $5 billion-asset institution.

This Cryptocurrency Inventor Has Suddenly Become One of the World’s Richest Men (Money), Rated: A

Cryptocurrency has a new king. His name is Chris Larsen, and he’s the co-founder and former CEO of Ripple, which created the digital token known as XRP. He’s now one of the world’s richest billionaires, thanks to XRP’s incredible hot streak.

XRP, a cryptocurrency intended for international transactions, has had a meteoric rise this winter. Its value went from $0.25 a coin in mid-December to $3.16 as of Wednesday, according to Coinmarketcap. It’s currently the second biggest cryptocurrency behind Bitcoin.

Forbes reports that, as a result, Larsen almost instantly became worth $37.3 billion (based on XRP’s Monday exchange rate).

India

BCCL invests in fintech company FinREQ in an ads-for-equity deal (Medianama), Rated: AAA

Bennett, Coleman & Co Limited (BCCL), the publisher of the Times Of India and the parent of Times Internet, has acquired an undisclosed stake in online loan company FinREQ.

As such, it looks like the investment in FinREQ is an ads-for-equity deal.

FinREQ was founded in 2011 and has tie-ups tie-ups with nationalized, co-operative, foreign, private banks, NBFCs and Housing Finance Companies. The company provides a variety of loans ranging from overdrafts, import & export finance, supply chain financing, loans against property (LAP), loans against share, lease rental discounts and others.

Online lending platform EarlySalary raises $ 15.7 mn in Series B round (VC Circle), Rated: A

Pune-based Social Worth Technologies Pvt. Ltd, which runs online lending platform EarlySalary, has raised Rs 100 crore ($15.7 million) in a Series B funding round led by Eight Roads Ventures India, a company statement said.

Invest smart with these asset class investment options (ANI), Rated: B

Fixed Depositsinvestment in goldReal Estate and many other traditional options are losing grounds when trying to woo the new age investors.

A research from the Transamerica Center for Retirement Studies indicated that nearly three-quarters of millennials are saving for retirement and that we started doing so at an earlier age than previous generations.

Peer-to-peer (P2P) lending in India currently gives a net return of 18-22 percent to lenders.

Asia

Commencement of Online Lending Service for Small Businesses That Leverages Accounting Big Data and AI Technology (Orix), Rated: A

ORIX Corporation (“ORIX”) and Yayoi Co., Ltd. (“Yayoi”) announced today that the ALTOA Online Lending Service, which leverages accounting big data and AI technology, will commence its operation through the jointly established entity, ALTOA, Inc. (“ALTOA”).

The ALTOA Online Lending Service is an online lending service that provides small amount, short-term loans for small businesses through a new credit model that leverages the credit know-how of ORIX, the accounting big data of Yayoi, and the AI technology of d.a.t. Inc., who is a partner in this venture.

Authors:

George Popescu
Allen Taylor

Friday August 25 2017, Daily News Digest

alternative investing

News Comments Today’s main news: Ellevest raises $32M to target women investors. eOriginal, Notarize close first digital mortgage closing. OFF3R launches SIPPS portal. Zopa reduces higher-risk lending. China issues draft rules on illegal fundraising. TWINO adds second Russian originator. African university to offer fintech degree. Today’s main analysis: Should P2P lending investors worry about default rates?Early-stage fintech investment in UK, Germany. Today’s […]

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Wall Street alum Sallie Krawcheck just raised $ 32 million for her investing platform (Business Insider), Rated: AAA

But the uncertainty and risk that comes with the markets is very often a major deterrent, especially for women, who invest at a much lower rate than men in the US.

To combat this, former Wall Street executive Sallie Krawcheck launched Ellevest in 2016, a digital investing platform that puts female investors’ money in low-cost ETFs based on a pick-and-choose set of goals, like starting a business, buying a home, having children, and retiring comfortably.

This week, the startup raised $32.5 million in its latest round of funding, according to CNBC. Tennis superstar Venus Williams, who is a champion of equal pay and opportunity for women both on and off the court, was among Ellevest’s first investors.

Just 28% of women are willing to take on high risk to get a good return on their investment, compared to 45% of men, according to a 2015 report by BlackRock.

Man finds it can be hard to return $ 6,000 (WoodTV), Rated: AAA

When 53-year-old Wyoming resident Duane La Varier found $6,180 had mysteriously appeared in his bank account, he never dreamed how hard it could be just trying to give money away.

He said he and his wife never filled out any applications and never sought any kind of loan.

The deposit a week ago had come from a company called LendingClub.

“I said, ‘I did not apply for this loan. Just take it back, just take it all out of my account.’ They said no.”

LendingClub is not the actual lender — it represents lenders — but Dudum said the company will take the hit for the $6,000 loan and its fees.

eOriginal and Notarize Make Digital Mortgage the New Reality (Broadway World), Rated: AAA

With its launch of Notarize for Mortgage, the company’s proprietary signing and remote notarization platform, Notarize recently completed the first-ever online mortgage closing. By integrating directly with eOriginal’s electronic vault, they enable lenders to leverage a joint solution that takes only a few short days to set up and launch before borrowers can start closing loans online. Together, Notarize and eOriginal allow lenders to quickly provide a seamless digital experience spanning the entire closing process all the way through registration with MERS (Mortgage Electronic Registration System, Inc.) and sale into the secondary market.

Connecting lenders, title agents, borrowers and notaries online 24 x 7 to digitize the closing process, the Notarize for Mortgage platform is approved by both Fannie Mae and Freddie Mac, underwritten by national title underwriters, and was launched with five lender customers and numerous warehouse lender and mortgage servicer partners. The platform is available to lenders online or via modern APIs that allow them to integrate an online closing process directly into their existing tools, automating their closing operations entirely.

eOriginal’s platform of integrated solutions delivers a fully digital mortgage and supports every type of digital closing strategy.

TRANSPARENCY IN ALTERNATIVE INVESTING (All About Alpha), Rated: AAA

In February of this year, the Economist Intelligence Unit surveyed 200 senior asset managers and institutional investor executives to learn what factors are most important in the way they make their decisions. Several different types of institution were involved, including hedge funds, private equity firms, insurance companies, and nonprofits.

New Business Models – and Transparency

The 2008 global financial crisis of course had a negative impact on the alternative investments industry.

New business models have arisen to supply demand across the spectrum of investors, including those investors eligible for and interested in alternatives. Publicly traded limited partners are one important example.

Who will win the robo advisor IPO race? (Financial-Planning), Rated: AAA

It’s been a decade since the launch of the industry’s leading independent digital advice platforms — Betterment, Wealthfront and Personal Capital.

The question that now remains for all three: who will cross the IPO finish line first?

In terms of assets, the trio has kept their positions in the market respectively, with Betterment leading all independents with over $10 billion in AUM, followed by Wealthfront’s $7.4 billion and Personal Capital’s $4.9 billion.

Collectively, the three count just over 420,000 clients and over 548,000 accounts, according to SEC filings and company statements.

Personal Capital, which always tailored its services for HNW clients before lowering its account minimums (and then raising them up again) claims its average client account size is roughly $380,000; users with more than $1 million in investable assets, the company says, comprise about 40% of its AUM.

Source: Financial-Planning.com

Online Lenders Featured in the Inc. 5000 (Lend Academy), Rated: A

Every year Inc. pulls together a list of the top 5000 fastest growing private companies in the United States. This year there were around 250 companies that made it in the financial services category and there are several familiar names on the list.

Other lenders readers may recognize are Lighter Capital (634), FastPay (1653), National Funding (2030), and ZestFinance (2202).

How Debit Activity Can Benefit Lenders in a Cashless Society (Clarity Services), Rated: A

With nearly half the American population carrying a subprime credit score, rent-to-own companies, online installment, storefronts and others are embracing new tools to intelligently navigate a market that has been largely overlooked.

  • Cash is only 14 percent of the share of transactions by value of payments (The Federal Reserve System Cash Product Office).
  • While the average American spends roughly $100 per day – not counting the purchase of a home, motor vehicle or normal household bills (Gallop), half of us are walking around with less than $20 cash (Bankrate.com).
  • If given the choice between a cashless and cash-only shop, most consumers in the wealthiest countries prefer the cashless option (ING Group/eZonomics).
  • Nearly 40 percent of Americans said that they would be happy to go completely without cash. (ING Group/eZonomics).

The top 7 startups from Y Combinator S’17 Demo Day 2 (TechCrunch), Rated: A

Standard Cognition is using machine vision to build the checkout of the future. Called autonomous checkout, the technology will allow shoppers to grab what they want and walk out of a store without having to go to a cashier. Standard Cognition believes it tech will enable those companies to save money and reduce theft.

Dharma Labs is building what it calls the first “protocol for debt on blockchains.” Citing the popularity of ICOs, the startup believes there’s a “proven demand for cryptoassets that look and act much like equity.” So Dharma has built a mechanism for decentralized peer-to-peer lending. “Anyone in the world can borrow and anyone in the world can lend.”

Emailage Raises $ 10m in Growth Equity Funding (Finsmes), Rated: A

Emailage, a Chandler, AZ-based provider of global fraud prevention and identity verification using email address scoring, raised $10m in growth equity funding.

The round was led by Anthos Capital, with participation from Radian Capital, Wipro Ventures, Mucker Capital and Tallwave Capital.

The company intends to use the funds to expand existing partnerships, further advance its email address-based predictive scoring system, and accelerate growth in North America, EMEA, LATAM and other key markets.

How to Expand Your Business Online by Offering More Products or Services (Kabbage), Rated: A

Hopefully, increased revenues will help ease cash flow problems and in the end, improve profits. Other advantages of growing business may include the chance to bring in more qualified employees, acquiring more customers and improving credit scores.

Expand service areas

Companies that provide services to homes or other businesses may find that their hometown or neighborhood has a limited customer base.

Expanding to nearby locations is one of the most common ways that local businesses grow into regional businesses. This also allows the company to add some more geographic areas to a business website, directories, and social pages to show up in more local searches.

Expand services

Most small business owners have to work to manage cash flow, and this task is much tougher when revenues are only high for a few months but operational costs last all year.

These are some ways to expand services both offline and online:

  • One good way to promote this kind of service online could be through holding webinars with tax tips for small businesses or even individuals. Some tax preparers might also produce books or videos for sale to help startups and small businesses manage tax planning better.
  • Some of these plucky entrepreneurs have learned to keep business flowing by offering holiday specials for getaways. Others have opened their facilities up to host seminars or workshops for organizations.
  • He kept his local business website to attract repair customers, but he also added an online store to sell products to the DIY crowd all over the country. He promoted this online store by creating some how-to videos.

This credit card alternative could be bad for your wallet (WSBTV.com), Rated: B

The problem is that these instant loans encourage impulse spending — and it doesn’t have to be a pricey vacation! Affirm will spread payments over a period of 12 months for loans of $100 or more.

To put that in perspective, you could easily pay more than $15 in interest on just a $100 loan!

LENDINGCLUB INVESTOR REVIEW: THE BEST PEER TO PEER LENDING SOLUTION (The College Investor), Rated: B

Over the last 8 years, 150,000 investors have lent over $26 Billion in personal loans through the peer to peer LendingClub platfrom. On average, investors in the top grade loans earned 5-7% annualized with strong cash flow.

As an added bonus, LendingClub allows you to invest as little as $25 per note. That means it’s easy to spread your risk across dozens or even hundreds of loans.

First, you need to meet some strict investor requirements.

  •  Income requirements: Must earn $70,000 annually ($85,000 in California)
  • Net Worth Requirements: Must have a net worth (exclusive of your home value) of $70,000 ($85,000 in California). People with a $250,000 net worth do not have to abide by the income requirements ($200,000 in California).
  •  Kentucky residents must be accredited investors (earn $200,000 annually or have a net worth of $1 million)
  •  Residents of Alaska, New Mexico, North Carolina, Ohio, Pennsylvania cannot invest in LendingClub
  •  No more than 10% of your net worth can be investing in lending club notes
  •  $1,000 minimum investment

LendingClub charges $100 per year for their self directed IRA accounts, but they waive that if you maintain $5,000 of investments in your first year or $10,000 in subsequent years.

Once you select your loans, LendingClub will help you evaluate the risk on your portfolio of loans. They will even provide a projected rate of returns based off of history.

Source: The College Investor

TD Auto Monitors Fintech Startups (Auto Finance News), Rated: B

TD Auto Finance is keeping a close eye on fintech startups as it evaluates “opportunities that might exist” for auto refinance and private-party transactions, President and Chief Executive Andrew Stuart told Auto Finance News.

TD Auto is already “in discussions” with several fintech players to evaluate “where that might go,” Stuart said.

5 Things To Know Before Taking A Loan Online (ValueWalk), Rated: B

If you’ve considered taking a personal loan online here’s what you need to know:

  1. More accessible – Smaller, newer financial firms have stepped in to fill the gaps left behind by traditional banks since the crisis.
  2. Tailored products – You can tailor the specifics of the loan, such as the timeline for payback and the purpose of the loan. Businesses can use everything from inventory to invoices without the need for a personal guarantee.
  3. Pricing Variety – Whether the payments are amortized monthly or weekly. Whether the effective annual rate is as attractive as you expected.
  4. Less Regulation – Alternative lenders and online loan providers are not regulated by the FDIC the same way as traditional banks.
  5. More awareness – The lack of regulation means alternative online lenders have more flexibility to provide custom lending solutions. They can be as innovative as they want with these financial products. However, you need to be more careful when dealing with an online lender. Look into their history, get assurances from the company, and do your best to educate yourself about their business.
United Kingdom

OFF3R launches new SIPPS portal (P2P Finance News), Rated: AAA

OFF3R has launched a new channel dedicated to Self Invested Personal Pensions (SIPPs), the tax-free vehicle for pension savings.

The investment aggregator’s SIPPs portal launched on Tuesday 22 August with an initial list of three pension providers: Hargreaves Lansdown, IG, and True Potential Investor. It details the various fees and investment thresholds of each platform, as well as information on the different management styles.

Zopa reduces higher-risk lending (Bridging and Commercial), Rated: AAA

Zopa has revealed it is taking steps to attract more lower-risk customers as it continues its reduction in higher-risk lending.

Zopa has reduced the amount of lending in its higher return D-E markets, which are included in its Plus product.

The Plus product was designed for investors who were willing to accept more risk for higher returns, with rates of between 6-7%.

Zopa expects that the lower-risk approach will mean the targeted returns for new investments in the Plus product will be 4.5%.

“For example, the proportion of D and E loans in the Plus product would go from 30% until now, to 10-15% in the future.”

Peer-to-peer lending: should you worry about default rates? (Your Money), Rated: AAA

Neil Faulkner, managing director of peer-to-peer research and ratings agency 4thWay, explains that investors should pay close attention to published bad-debt figures (which cover loan write-offs as well as simple defaults) of the different platforms.

Zopa

When a loan is approved, Zopa makes an assumption about its likelihood of falling into default over the lifetime of the loan, and then revises this default expectation over the lifetime of the loan.

Source: YourMoney.com

Zopa divides up investor money between many borrowers matching the risk profile specified at the outset by the investor, to spread the risk. If a borrower misses four months of repayments, then a recovery process begins.

RateSetter

The headline rate to note is that over its lifetime, 98.31% of loans are up-to-date – in order words, around 1.7% are in some form of arrears.

Funding Circle

Funding Circle is a little different in that you are lending to businesses rather than people. Over the lifetime of the site, it says that around 2% of loans have turned bad.

Lending Works

To date, Lending Works has an actual bad debt rate of 1.1%.

Assetz Capital Update: Investors Have Earned £25 Million to Date (Crowdfund Insider), Rated: A

Assetz Capital has shared that investors in aggregate have earned gross returns of more than £25 million on their investments in approximately four years. Assetz Capital says lenders earned an average of 8% gross interest across all Assetz Capital loans since platform launch, before allowances for tax or any losses not covered by a provision fund.

Currently, Assetz Capital has about 20,000 registered and active investors. The returns since the launch of the platform were generated from over £309 million lent to UK businesses from a range of industries looking to raise funds, including SME, bridging and development sectors.

ThinCats plans staggered IFISA roll-out before end of 2017 (P2P Finance News), Rated: A

Earlier this month, ThinCats received full authorisation from the Financial Conduct Authority (FCA), which allowed the firm to apply for ISA manager status from the HMRC. While a launch date has not been officially set, Stewart Cazier, head of retail, told Peer2Peer Finance News: “I’m definitely thinking 2017. I’d be very disappointed if it didn’t happen this year.”

Innovate Finance CEO steps down (AltFi), Rated: B

After two and half years at the helm of the fintech member association, Innovate Finance, Lawrence Wintermeyer has stepped down.

Wintermeyer is leaving to pursue other opportunities, he said.

China

China issues draft rules in crackdown on illegal fundraising (Reuters), Rated: AAA

China issued draft rules targeting illegal fundraising on Thursday, as the authorities step up a campaign to crack down on risky and illicit behavior in the country’s financial sector.

The draft rules, issued by the law office of China’s State Council, call for participants engaged in illegal fundraising to cover the losses stemming from those activities.

Regulators will guide financial institutions and non-bank payment service providers on tightening up their supervision of suspicious fund flows, the draft rules said.

Financial institutions and non-bank payment service providers, if found to be negligent, will be subject to having their illegal income forfeited. They will also be subject to a fine of more than 1 time but less than five times of the illegal income, the draft rules said.

The executives responsible for the illegal activity will be removed and banned from entering the financial industry for a certain period of time and could be subject to fines of between 50,000 yuan and 500,000 yuan each ($7,507-$75,072), the rules said.

China Rapid Finance Posted a $ 13.5M Net Loss in Q2, but Very Close to Profitability (Xing Ping She), Rated: A

Recently, China Rapid Finance (NYSE:XRF) released an unaudited financial report for the second quarter of 2017. In the second quarter, the company reported a gross income of $24.5 million, up 59% from a year earlier, and their net income was $15.2 million, up 9 percent year on year. The company posted a net loss of $13.5 million in the second quarter, compared with $5.9 million in the same period last year, as the cost of including customer incentives increased.

However, the company still held the “Low and Grow” business strategy. Compared to the profitability, there are more concerned about gross income. Through analysis of the company’s financial and business data, we can find that some business data is changing and the potential for profit is increasing.

Better Buy: SINA vs. Weibo (The Motley Fool), Rated: A

Chinese internet companies SINA (NASDAQ:SINA) and Weibo(NASDAQ:WB) are closely tied to each other. SINA holds a 46% stake in Weibo, deriving 72% of its top line from the Chinese Twitter clone (as Weibo is referred to by some).

Weibo’s greater gains have made it more expensive with a trailing price-to-earnings (P/E) ratio of 132 as compared to SINA’s 30.

SINA relies on Weibo for 70% of its revenue, which means that investors can still enjoy the latter’s rapid growth via a stock with a lower valuation. Additionally, SINA’s non-Weibo business has started gaining some traction of late, with the company witnessing 8% year-over-year growth from this segment in the latest quarter.

While there is no denying that Weibo’s growth is still impressive — as the 28% year-over-year jump in its monthly active users boosted its advertising revenue by 72% last quarter — at the same time, there will be a limit to the company’s growth given its negligible presence outside China and the competition from the likes of Tencent‘s (NASDAQOTH:TCEHY) WeChat.

Fluid Wins LendIt Choice Award – Aug 2017 (FluidFi), Rated: B

Fluid, a California based FinTech & AdTech startup announces today that it received LendIt LangDi Fintech Choice Award from LendIt Conference in Shanghai, China.

European Union

Latvian P2P Lender TWINO Adds Second Russian Originator (Crowdfund Insider), Rated: AAA

Latvian peer-to-peer lending platform TWINO has reportedly added a second Russian originator to its platform since its December 2016 launch.

According to P2P Finance News, over 40% of TWINO’s investors have funded Russian loans.

Early-Stage Fintech Investment In The UK & Germany Goes To Insurtech, Banking (CB Insights), Rated: AAA

Year-to-date, European fintech companies have raised close to $2.6B across 295 deals, meaning that at the current run rate 2017 could see 500 deals and $4.5B in total funding by year end. For perspective, funding to European fintech companies is already 30% higher in 2017 YTD than the 2016 total.

 

UNITED KINGDOM

UK early-stage fintech financing has remained above 15 deals quarterly since Q2’14. Total disclosed funding has been a bit choppier: at $27M, Q4’16 was the lowest quarter since Q2’14, while the following quarter (Q1’17) saw the third-highest total funding at $81M and the largest number of deals at 33. Most recently, Q2’17 figures fell to $41M across 16 deals.

For example, Monese, which provides banking services for immigrants and expats, raised a $10M Series A in Q1’17, while Wirex, which allows for the holding of fiat currencies and cryptocurrencies in a single account on its personal banking platform, raised a $3M Series A in the same quarter.

Insurance is trending up across Europe at large, with more than 20 early-stage deals closing for approximately $50M year-to-date.

GERMANY

Funding hit its peak in 2016 as well, at $135M, well above the previous high-water mark of $46M in 2013 and more than 4X the $31M total for 2015. 2017 is on pace to surpass 2016 early-stage fintech financing figures, with 22 deals and $83M year-to-date.

Germany has also seen an increase in early-stage deals to small business banking and API-focused mobile banking platforms. Financing rounds to this group have increased steadily since 2015, which saw 5 deals close for $17M and was followed by 7 deals in 2016 (for a much smaller $6M).

Klarna (Hortonworks), Rated: A

Klarna uses Hortonworks Data Platform (HDP) and Hortonworks DataFlow (HDF) to help drive its deep data mining and AI, and to thus mitigate risk for buyers and sellers.

International

San Francisco and Berlin have new competition for the capital of ‘fintech’ (CNBC), Rated: AAA

Dubai has seen a surge of interest from fintech startups and banking assets over the last three years, according to the emirate’s financial center’s management body.

It’s fast becoming a destination for financial technology startups because of its location, private investment and innovation.

He told CNBC that the financial services industry contributes about 12 percent to Dubai’s total gross domestic product and it is expected to increase to 18 percent by 2024.

Increased appetite for fintech investment in Dubai from CNBC.

AXIS Capital Partners with Plug and Play Tech Center (BusinessWire), Rated: A

AXIS Capital Holdings Limited and its operating subsidiaries (“AXIS Capital”) (NYSE:AXS) today announced it has partnered with Plug and Play, a global digital startup innovation platform headquartered in Silicon Valley. By joining Plug and Play’s InsurTech platform, AXIS will gain access to world-class digital insurance startups and will provide mentorship and technical support, along with underwriting and actuarial expertise, to help turn their ideas into products or services.

To help address the rapid and transformative changes underway within the (re)insurance industry, AXIS will work with property and casualty, life/health and general InsurTech startups that have been accepted to Plug and Play’s InsurTech program. This 12-week program attracts applications from hundreds of startups from around the world that utilize technology, data and analytics to develop innovative new business models, products and services.

AXIS will focus on the areas of Insurance, Reinsurance, Health, IoT (Internet of Things), FinTech and Mobility, with leaders from different business areas serving as program mentors and technical advisors.

Australia

Digital advice embraced by all ages (Financial Standard), Rated: AAA

Superannuation fund member engagement via Decimal’s digital financial advice software increased 37% in the past year, latest quarterly statistics show.

Decimal’s digital insights report for the June quarter shows 2366 members in its superannuation client base decided to engage with super via the digital advice channel over a 12 month period, up from 1731 the year prior.

Total funds under advice increased to $8.4 billion, up 72% year-on-year, and Decimal Software chief executive Nick Pollock said compound growth is stimulating for the super sector.

“The insights show that 43% of all logins were by women, 28% of logins took place outside of business hours, with 31% of those logins happening between 10pm and 6am,” Pollock said.

Australian fintech launches industry census (AltFi), Rated: A

Australian fintech has launched an expanded industry census, which will seek to unpack key issues like how to expand overseas and gender diversity and help set lobbying and policy priorities.

Working on the census, consultancy firm EY, and industry group FinTech Australia, have asked Aussie fintechs to complete it by 3 September.

FinTech Australia Reveals Initial Speaker Line Up for Inaugural Fintech Fest (Crowdfund Insider), Rated: B

FinTech Australia and Next Money, along with the State Government of Victoria, a gearing up for their inaugural week long Fintech event –  Intersekt. The Fintech festival will be taking place in Melbourne, Australia from October 27 to November 3rd if you happen to be in Australia.

Confirmed speakers for Intersekt so far include:

  • Anthony Thomson, founder of the UK’s Metro and Atom Banks (and the current chairman of Atom Bank). Atom Bank is one of the leading UK Challenger banks.
  • Ron Suber, called the “godfather of Fintech” due to his globe-trotting reputation for promoting online lending and all things Fintech. Suber recently joined the leadership team at Credible, the multi-lender marketplace for student loans. Suber is also President Emeritus of Prosper Marketplace and holds a broad portfolio of Fintech investments.
  • Megan Caywood, chief platform officer for the UK’s mobile only Starling Bank, who has delivered a range of major customer experience improvements.
  • David Birch, an international thought leader in digital identity and digital money and author of “Before Babylon, Beyond Bitcoin”
  • Van Le, who is the co-founder of Xinja, which is on track to be Australia’s first independent, 100% digital bank made for mobile.
    Lucy Liu, co-founder and chief operating officer of Melbourne-based payments company Airwallex who was this year named as one of Forbes’ 30 Under 30
  • Emma Weston, CEO and co-founder of AgriDigital, which provides a blockchain-enabled, integrated commodity management solution for the global grains industry
India

Over 40% Indians act on financial advice given by spouse, RBI report shows (Zeebiz), Rated: AAA

Key Highlights:

  • Over 50% Indians think that their children will take care of them financially after retirement
  • 44% Indians do not think they will ever retire from work 
  • An average of 66% of randomly selected adult household members have a bank account.
Source: Zeebiz

The report found that the average Indian household holds 84% of its wealth in real estate and other physical goods, 11% in gold and the residual 5% in financial assets.

Source: Zeebiz

The report said that 44% Indians have not thought of retirement as “people like me cannot retire from work,” they said.

Only 13% people surveyed were actively saving for their retirement while 33% had absolutely no planning for retirement.

Only around 5% people had money invested in financial assets for their retirement planning while gold formed nearly 10% of this fund.

India’s Domestic Workers Have A New Ally In This Innovative FinTech Startup (Forbes), Rated: A

The team at SERV’D has a simple but ambitious goal: to organize India’s unorganized domestic workforce. That means bringing financial inclusion to millions of unregistered workers via a mobile contract and payment app.

The lack of written contracts also makes it difficult for low-income domestic workers to build a financial history. Without that, they struggle to save money or obtain insurance, which all but guarantees they will remain in poverty. Exclusion from formal financial services bars people from accessing health insurance, bank accounts, and can even inhibit them from finding affordable housing.

SERV’D seeks to replace the verbal work agreements made between customers and their hired help. Instead of tenuous oral contracts, the fintech startup wants employers and employees to create digital agreements on the SERV’D app. The platform also allows them to make digital payment transfers so neither party has to worry about dealing with cash.

Most importantly, the online payment trail creates traceable income records for poor, unbanked workers. With enough proof of income built up, they will eventually be able to open bank accounts and access financial products that are currently beyond reach.

Ezetap’s fresh funds are the latest VC dollars flowing to Indian fintech (PitchBook), Rated: A

Mobile payments startup Ezetap is the latest Indian fintech company to pull in new equity financing. The company has raised $16 million from investors including JS Capital Management, Social Capital and Horizons Ventures.

Fintech NBFC “Prest Loans” Forays Its Operations In Rajasthan (BusinessWorld), Rated: B

Prest Loans the new age FinTech NBFC, providing online loans to small businesses and MSME segment has expanded its operations by opening new office in Rajasthan.

Asia

LATTICE80 & FINOLAB Sign MOU on Fintech (Crowdfund Insider), Rated: AAA

LATTICE80, a Singapore based non profit Fintech hub backed by Marvelstone Group, has signed a Memorandum of Understanding (MOU) with FINOLAB in Japan to mutually boost their Fintech ecosystems and global networks. Marvelstone is a global VC group based in Singapore.

This Fintech bridge will seek to create a passporting system for Fintech’s in each country to expand into new markets.

PH startups urged: Aspire to be unicorns (Cebu Daily News), Rated: AAA

Aldo Carrascoso, founder and chief executive officer of GlycoProX Biosciences, Veem, and Jukin Media & Verego, said that focusing on becoming “unicorns” detracts the purpose of why people launch startups in the first place.

Lee argued that the first unicorns were founded in the 1990s, Google Inc. being the clear “super unicorn” of the group with a valuation of more than $100 billion. Many unicorns were also born in the 2000s, although Facebook Inc. is the decade’s only super unicorn.

Other prominent unicorns today include Uber, Airbnb, Dropbox, Spotify, Pinterest, and Lazada, to name a few.

Treading the path toward that level takes mindfulness of revenue, a good business model, addressable market, and a product-market fit, said Carrascoso.

Benjamin cited Xoom, a San Francisco-based digital money transfer or remittance provider, which traces its foundations to serving clients between the Philippines and the US.

Since then the company has expanded to India and Mexico, among others, and was bought by PayPal for $890 million. Today, they do $9.1 billion in money transmissions and are operating in 18 countries with a demand for money remittance services.

The search for a unicorn is on (Sunstar), Rated: A

THE Philippines may have its own “tech unicorns” or technology businesses valued at $1 billion in the future. But experts says more work and collaboration is needed to achieve this dream.

To date, no Philippine tech startup has managed to meet the goal of being a billion-dollar company.

Globally, the US and China lead in numbers, having produced the most number of unicorns like Facebook, Uber, Airbnb as well as Xiaomi and Alibaba. Meanwhile, Malaysia in Southeast Asia has produced two unicorns in Grab and the Lazada Group.

First, he said Philippine startups need to know how to be fundable. Instead of aiming to be a unicorn, he advised local startups to become a “cockroach” instead, one that characterizes strong survival skills, or a rhino, “big and realistic.”

Getting payments to pay off (The Edge Markets), Rated: A

“A key advantage of e-wallets is the low cost. You can make payments and transfer money at much cheaper rates than in conventional payment systems,” explains Gunther Zhen, the founder and CEO of iPayLinks Financial Information Service (Shanghai) Co Ltd.

For China, this is certainly the case. While incumbent payment systems that rely on Visa, Mastercard and UnionPay charge merchants an estimated 2.5% to 3% MDR (merchant discount rate), new rivals like Alipay charge between 0.7% and 1.2%.

In Malaysia, however, the landscape could be different as the current MDRs are already quite low. Bank Negara Malaysia’s Payment Card Reform Framework has slashed the MDR on debit and credit cards since July 2015 when it took effect.

Today, domestic debit cards have an MDR of only 0.56% while for international debit cards, it is 0.96%. Credit cards are still relatively expensive with an MDR of 1.35%, but that is expected to drop drastically by 2021 when Bank Negara will cap interchange fees (the largest component of MDR) at 0.48% — less than half the 1.1% ceiling imposed today.

Just look at Touch ’n Go Sdn Bhd, which booked RM15.3 million of interest income in 2015 on RM429.3 million worth of deposits in card balances. And this is merely from the relatively small balance in each card.

Alipay creation, Yu’E Bao, is one of China’s most popular internet-based funds. It had amassed RMB1.43 trillion as at end-June. By comparison, Bank of China, one of the four major commercial banks in the country, had total deposits of RMB1.6 trillion as at end-2016.

Pundi-Pundi Raises $ 4M in Pre-A Funding (Finsmes), Rated: A

Pundi-Pundi, a Jakarta, Indonesia-based mobile payments and micro-loan startup aiming to create a cashless environment in South East Asia, closed a $4M pre-A round of funding.

Africa

UCT to offer fintech-focused degree from 2018 (BusinessDay), Rated: AAA

The University of Cape Town (UCT) has become one of the first tertiary institutions in Africa to offer a degree specifically designed to equip students with the critical skills and knowledge to embrace the technological revolution in the financial services sector.

One of its key focus areas will be blockchain technology, or the distributed ledger system, that has given rise to new crypto-currencies such as bitcoin and ether.

The crypto-currency market is reportedly now worth more than $50bn and the use of virtual currencies is gaining traction in SA.

UCT has sought to tackle this problem by offering a new master’s degree in data science with a specialisation in financial technology, said Georg, who is also the course convener. The programme is due to commence in 2018.

Authors:

George Popescu
Allen Taylor