Thursday March 15 2018, Daily News Digest

Thursday March 15 2018, Daily News Digest

News Comments Today’s main news: Yirendai releases Q4 & FY 2017 results. LendInvest intros fixed rate notes. Virgin Money launches financial well being portal for employees. LHV to open bank in UK to serve fintechs. Today’s main analysis: A European manifesto for an age of irrelevance. Today’s thought-provoking articles: GM launching P2P car renting service. A European manifesto for […]

Thursday March 15 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

News Summary

United States

GM Launching Peer-To-Peer Car Sharing (PYMNTS), Rated: AAA

According to Fortune, the peer-to-peer car share service will allow car owners to rent out their vehicles when they aren’t using them.

Sources said the program will begin this summer through the automaker’s Maven car-sharing unit, which allows owners to put their vehicles on the platform for rent and share their profits with GM.

The service could become a full-scale business if the pilot proves to be a success. A spokesman for GM declined to comment.

Ameritech Financial: FinTech Leader in Student Loan Document Preparation Industry (PRNewswire), Rated: A

FinTech companies are focusing on using technology to drive their services and offerings and support their clients. Commonly, this means financial institutions are operating online. For Ameritech Financial, a document preparation company focusing on helping federal student loan borrowers apply for existing federal repayment plans, the private company uses technology in every part of its business to support clients in their search for relief from high student loan payments.

Growing Fintech Companies Partner to Revolutionize Digital Mortgage Technology to Make Buying a Home Easier (Benzinga), Rated: A

WebMax, a digital mortgage solution provider, and FinLocker, a financial data and analytics platform, announced today that they finalized a partnership as a result of successful execution on their five joint customers. The partnership aims to build on 17 months of collaborative efforts to further propel lenders into the digital mortgage revolution.

According to the Mortgage Bankers Association, between 2010 and 2017, mortgages took 70 percent longer to close and origination costs skyrocketed 80 percent as the burden of regulatory compliance grew.

 

Fintech Mobile App Pockitapp Announces Partnership With Dwolla (Crowdfund Insider), Rated: B

On Tuesday, fintech mobile app Pockitapp announced it has teamed up with Dwolla to deliver back-end banking integration services. According to Pockitapp, Dwolla provides a secure online payment system and mobile payment network to enable auto clearing house (ACH) transfers, including vendor payments. Pockitapp reported that working with Dwolla allows the fintech startup to offer access to all financial institutions rather than just one.

United Kingdom

LendInvest Returns to Retail Bond Market with Fixed Rate Notes (Crowdfund Insider), Rated: AAA

LendInvest, a UK based online marketplace platform for property finance, has announced a proposed issuance of  5.375% fixed rate bonds due October 2023 by its wholly-owned subsidiary, LendInvest Secured Income plc.

LendInvest’s first bond issuance is trading on the LSE (LIV1) and was issued in August 2017 after raising £50 million from both retail and institutional investors. This new issuance is expected to trade on the LSE as well.

Virgin Money introduces financial wellbeing portal for employees (Pensions Expert), Rated: AAA

In March 2017, the Financial Advice Working Group produced a report for HM Treasury and the Financial Conduct Authority on financial wellbeing in the workplace.

The report said: “Many employees are struggling with their finances: they face increasing personal debt, demanding financial commitments, and a limited ability to save for the future.”

It features guidance on common money issues, such as improving credit scores and dealing with debt. The site also provides tips and guidance with links to the company’s benefits.

Estonia’s LHV to open UK bank to serve fintech industry (Finextra), Rated: AAA

Estonia’s LHV Bank is swimming against the Brexit tide by setting up shop in the UK to service the country’s thriving fintech market.

LHV UK is currently recruiting and intends to be in a position to start servicing new financial intermediaries by H2 2018. Banking services on offer will include real-time payments, overdraft facilities, and forex.

Industry reacts to Spring Statement 2018 (Bridging & Commercial), Rated: B

The chancellor addressed the House of Commons earlier today to provide an update on the overall health of the UK economy.

Mr Hammond also revealed the government’s progress since the Autumn Budget 2017 and discussed new measures to help achieve policies introduced last year.

Mr Hammond announced that the government was working with 44 areas on their bids for the £4.1bn housing infrastructure fund.

He also announced that London would be receiving £1.67bn of funding to support the development of a further 27,000 affordable homes by the end of 2021/22.

Small businesses need to explore finance options available to them (London School of Business & Finance), Rated: A

The study found that start-ups are nearly twice as likely to use personal savings as those that have been in business for a decade or more, suggesting that small businesses in the UK are not seeking support from high street lenders.

The study also showed that small businesses are more ambitious than older companies when it comes to their growth plans, with 14% predicting business growth in the next three months compared to 3% of businesses that have been trading for longer.

The top forms of finance for small businesses over the past 12 months were revealed in the research, with more than 35% of start-ups using personal finances and 15% relying on money from family members.

 

Why brexit could be a good thing for the UK’s Fintech industry (Computer Business Review), Rated: A

The UK fintech scene has the world’s biggest financial centre at its disposal. UK fintech’s will enjoy privileged access, in geographical and regulatory terms, to the enormous B2B market that the City of London gives them access to.

They will also have privileged access to the UK’s highly competitive retail finance market, worth £58 – £67 billion a year. There are also signs that leaving the EU could help invigorate at least some segments of that market. A recent article in the FT — not by any means a Brexitcheerleader — reported that small-to-medium UK providers of retail banking services are actively looking forward to Brexit in the hope that it will free them from onerous EU regulations designed for huge ‘too large to fail’ banks but now applied to all financial institutions, even smaller ones.

China

Chinese Fintech Yirendai Unveils Fourth Quarter & Full Year 2017 Financial Results (Crowdfund Insider), Rated: AAA

The company reported that in the fourth quarter of 2017, it facilitated RMB 13,438.5 million (US$2,065.5 million) of loans to 202,370 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 95%; 74.6% of the borrowers were acquired from online channels; nearly 100% of the loan volume originated from online channels was facilitated through mobile.

During that quarter, Yirendai facilitated 233,374 investors with total investment amount of RMB 15,967.4 million(US$2,454.2 million), 100% of which was facilitated through its online platform and 92% of which was facilitated through its mobile application. Also in the fourth quarter, total net revenue was RMB 1,824.8 million (US$280.5 million), an increase of 21% from the previous quarter and 70% year-over-year; net income was RMB 448.8 million (US$69.0 million), an increase of 48% from the previous quarter and 18% year-over-year.

Yirendai also noted that in the full year of 2017 it facilitated RMB 41,406.1 million (US$6,364.0 million) of loans to 649,154 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 102%; 72.9% of the borrowers were acquired from online channels; nearly 100% of the loan volume originated from online channels was facilitated through mobile.

China’s $ 814 Billion Fund Will Cut Exposure to Volatile Markets (Bloomberg), Rated: A

China Investment Corp., which recently sold its shares of Blackstone Group LP, is seeking to boost alternative and direct investments to 45 percent or more of its overseas portfolio in the next three years, from about 38 percent at the end of last year, President Tu Guangshao said in an interview in Beijing.

The divestment of the Blackstone stake, one of the first investments for the wealth fund that was started in 2007 with an initial $200 billion, may signal CIC’s pursuit of steadier returns. It ends a wild ride for CIC — Blackstone shares plunged 89 percent from the U.S. firm’s IPO to a February 2009 trough, but have since surged almost nine-fold.

European Union

Sit Back, Relax, and Pray for the Best: A European Manifesto for the Age of Irrelevance (INTL FCStone  Email), Rated: AAA

About a year ago, European indices were outperforming, pundits were certain that the Euro would fall to parity with the dollar, and the biggest political risk was France. A year later, the Eurostoxx 50 Index has underperformed almost every major global index (in local currency at least), M. Draghi spends his press conferences talking down the Euro, and France has become the continent’s anchor of stability.

Source: INTL FCStone
Source: INTL FCStone

The Eurozone manufacturing PMI fell to 58 last month, the European Commission Economic Sentiment Indicator fell in the past two months, and, most worryingly for the European Central Bank and the normalization of monetary policy, headline inflation fell to 1.2% last month, against 1.9% a year ago. To add insult to injury, this European soft patch is taking place just as U.S. growth accelerates: the Citigroup Economic Surprise Index for the U.S. has jumped to 45, against minus 22 for the Eurozone.

Bottom Line:
1 – European indices have underperformed since May and recent economic data has disappointed
2 – The European economy is not rolling over: it is settling at a sustainable growth rate
3 – M. Draghi turned a treacherous press conference into a success
4 – Greek bonds could benefit from the normalization of European monetary policy
5 – The European discount reflects the continent’s irrelevance. That may not be such a bad thing.

See the full report here.

LENDO DAZZLES AT 2018 GIBRALTAR INTERNATIONAL FINTECH FORUM (Olive Press News), Rated: B

Lendo’s CEO, David Honeyman, joined a panel of experts including the managing director of the Gibraltar Stock Exchange Nick Cowan to discuss the crypto industry.

International

How Peer-to-Peer Lending Companies Could Benefit From Blockchain (guruFocus), Rated: AAA

Some of the blockchain’s strongest marketing points include its ability to democratize markets and, given the way peer-to-peer lending platforms operate, they could do a lot better if they adopted the use of blockchain. This could result in companies like LendingClub Corp. (NYSE:LC) and Hexindai Inc. (NASDAQ:HX), which have experienced mixed performances since going public, expand their addressable market by targeting customers that hold crypto assets of some form.

With blockchain technology, however, borrowers can tokenize the assets they own and add them to the distributed ledger infrastructure to sell, trade or use as collateral for loans. Some of these assets may not qualify as collateral in the mainstream lending market, but with blockchain technology and through tokenization, assets such as patents, intellectual property or even branding can be tokenized and used as collateral for hard money loans.

There are companies that have already launched this type of service. SALT Lending, which allows cryptocurrency traders to use their investments in the market as collateral for loans, is a perfect example. However, analysts suggest peer-to-peer lending platforms that are already established could do even better since their profiles are already proven as good alternatives for sources of loans in the credit market.

Understanding the global growth in direct lending (TMF Group), Rated: A

It’s a maturing market that’s here to stay. European direct lending has grown from a relatively unknown asset class to raising around US$22bn in 2017 alone. According to research by the Alternative Credit Council (ACC), the global direct lending market is expected to break the US$1tn mark by 2020. That’s quite a trajectory.

P2P platforms and crowdfunding sites also have an important role to play. We’re seeing them dominate the €50,000 – €1m loan range . Larger deals are more appropriate for asset managers, who have the necessary scale and risk analysis expertise.

India

Fintech startup Avail Finance raises $ 17.2 million from Matrix Partners, Ola founders, and others (The Financial Express), Rated: A

Fintech startup, Avail Finance, has raised 17.2 million in an investment round led by Matrix Partners india. The round also saw participation from Ola’s co-founders – Ankit Bhati and Bhavish Aggarwal, Co-Founder and CEO of Flipkart – Binny Bansal, Freecharge founder – Kunal Shah and founder of Mswipe – Manish Patel. The funds raised include debt and credit lines from multiple NBFCs.

 

Asia

Open banking eases regulatory hurdles in fintech (The Korea Herald), Rated: A

One of the key topics at this week’s Money 20/20 Asia fintech trade show is also the so-called open banking that allows more flexibility when these small players in the market launch their own financial services.

It is long since an established bank has shared its license and regulatory expertise through an open platform based on application programming interface, or API, but related technologies are thriving recently along with the fever for fintech across industries.

5 notable startup trends seen at Top100 Indonesia Qualifier Roadshow (E27), Rated: B

The roadshow yesterday also saw a presentation by TaniJoy, which aims to help vegetable farmers get capital through a P2P lending platform.

Authors:

George Popescu
Allen Taylor

Wednesday February 14 2018, Daily News Digest

OnDeck gross revenue

News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]

OnDeck gross revenue

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United States

United Kingdom

China

European Union

International

Australia

India

Asia

News Summary

United States

OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA

The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.

OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.

Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA

In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.

Source: Lend Academy

Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.

Source: Lend Academy
Source: Lend Academy

Full Year 2018

  • Gross revenue between $370 million and $382 million.
  • GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
  • Adjusted Net income between $16 million and $28 million.

First Quarter 2018

  • Gross revenue between $86 million and $90 million.
  • GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
  • Adjusted Net income between $1 million and $5 million.

OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A

Originations were up 3 percent over the previous quarter to $546 million.

Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.

Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.

The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.

Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B

Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.

NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA

Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.

NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.

NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.

LendingClub at the Watermark Conference for Women (LendingClub), Rated: A

LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.

Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA

Affirm, San Francisco

Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.

Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.

Better Mortgage

Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.

Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.

Blend

Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.

Bona fides: Wells Fargo and U.S. Bancorp are already onboard

CommonBond

Online lender refinances and finances undergraduate and graduate student loans.

Bona fidesCommonBond has made $1.5 billion in loans, but says just two have gone into default.

GreenSky

Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.

Bona fides: Has facilitated over $10 billion in loans

Kabbage

Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.

Bona fides: Over $4 billion in originations to 130,000 small businesses

LendingHome

Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.

Bona fides: $2 billion in loans made; 10,000 homes financed

Tala

Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.

Bona fidesHas made more than 4.5 million loans, with a repayment rate above 90%.

Upstart, San Carlos, CA

Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.

Bona fides: $1.5 billion in loans originated to 120,000 borrowers

MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA

MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.

The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:

  • The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
  • Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.

Student lending platform on review for ratings boost (AltFi), Rated: AAA

Moody’s puts six tranches issued by CommonBond on review for upgrade.

Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.

Dwolla Lands $ 12 Million (Finovate), Rated: A

In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.

Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A

But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.

In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.

Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A

BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi,  Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.

Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A

Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.

Data-sharing spec revised to encourage open banking (American Banker), Rated: A

The Financial Services Information Sharing and Analysis Center announced Tuesday an attempt to move the ball forward on data sharing and open banking in the U.S.

The FS-ISAC on Tuesday released a new version of its technical recommendations for data sharing, the Durable Data API specification. This could become the standard banks and third parties adopt for PSD2-style data sharing and open banking. In fact, the new standard meets all of PSD2’s requirements, according to the security data-sharing organization. (However, PSD2 also requires third parties to register and agree to be overseen by a regulator, something unlikely to happen here.)

What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A

As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.

To that end, USAA has sought to bring a natural cadence and flow to the conversation, one that builds, and built, on its experience in the PYMNTS Voice Challenge last year.

In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B

The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.

Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A

How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.

The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.

At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.

Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A

US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.

My Financial Advisor is a Robot (Direct Industry), Rated: A

Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest. 

DirectIndustry e-magazine: What is the technology behind it?

Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.

LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A

Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.

Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A

A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.

Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”

Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B

Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.

Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B

MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.

One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.

You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit UnionDigital Federal Credit Union, and First Tech Federal Credit Union.

United Kingdom

New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA

With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.

RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.

It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.

Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.

The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.

Money goes to… Minimum investment Projected rate
Abundance Green energy projects £5 6-9% over lifetime of investment (3-5 years)
Advancr Public and private businesses £1,000 5-6% depending on length of bond
Basset & Gold Fixed income bonds £1,000 3-7% depending on product
CapitalRise Property development projects £1,000 10% or more depending on the project
Crowd2Fund Businesses £10 9%
Crowd for Angels Crowd bonds funding small businesses £25, but companies can increase that 12%
Crowdstacker Businesses £500, but set by borrowers 5-7%
Downing Crowd Fixed-term bonds for small businesses £100 4-7%
Folk2Folk Asset-backed loans to small, mostly rural businesses £20,000 5.5-6.5% depending on product
Funding Circle* Businesses £1,000 4.8-7.5% depending on selected risk level
FundingSecure Asset-backed sub-prime loans to individuals £25 Up to 16%
Goji P2P Consumer, business and property loans £5,000 5%
HNW Lending Asset-backed loans to individuals and businesses £10,000 6-15% depending on term and risk
Kuflink Property loans £100 5%
LandlordInvest Asset-backed loans to landlords £100 5-12%
Landbay Buy-to-let mortgages £5,000 4%
LendingCrowd Business loans £1,000 6%
Lending Works Individuals £10 3-5% depending on term
Money&Co. Businesses £100 8%
Mongoose Crowd Community energy projects £100-200, but can vary by project 4-7%
Property Crowd Commercial and residential developments £5,000 10%
Proplend Property of varying types £1,000 5-12%
Ratesetter Businesses, individuals and property developers £10 3-6% depending on product
Rebuildingsociety Small and medium-sized businesses £10 9.7%
Relendex Commercial and residential property loans £500 10%
UK Bond Network Businesses £5,000 11%
Zopa** Individuals £1,000 4-4.6% dep

Fintech group TruFin raises £70m (Finextra), Rated: A

TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.

LendInvest unveils product transition process (BestAdvice), Rated: A

The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.

Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A

Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.

Lendy appoints new head of finance (Bridging&Commercial), Rated: B

Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.

China

Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA

DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.

Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.

European Union

Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA

Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.

Banco BNI Europa to invest with CrossLend (Finextra), Rated: A

Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.

International

Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A

Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.


 

Australia

DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA

Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.

According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.

India

Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA

Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional  rent-to-own model. 

PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA

ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.

The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”

In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.

The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate?  US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.

MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A

Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.

Asia

Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA

Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.

The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.

The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.

Authors:

George Popescu
Allen Tayl

APIs That Facilitate the Money Transfers of Online Lenders

Dwolla money transfers

College dropouts either make it in life or end up under a bridge while the MBAs rule the world. Ben Milne has made it, and what’s more, he created a company that has made a spectacular splash in the fintech pool. Dwolla. Once an early money transfer tool, Dwolla has transformed into a SaaS product its […]

Dwolla money transfers

College dropouts either make it in life or end up under a bridge while the MBAs rule the world. Ben Milne has made it, and what’s more, he created a company that has made a spectacular splash in the fintech pool. Dwolla.

Once an early money transfer tool, Dwolla has transformed into a SaaS product its creator could only have dreamed of. Here’s the story from start to finish.

Dwolla as a Consumer-Facing Mobile App

Milne owned a manufacturing company while working his way through college. In 2010, he came upon the concept of Dwolla, a consumer-facing mobile app that allowed users to quickly and easily send and receive money without exchange fees. He built the app himself as far as he could then hired a development team to take it the rest of the way. He figured he could monetize it later. Eighteen months in, however, and he began getting requests from customers to take the Dwolla name off of the product. That’s when he came upon the idea of white labeling the app to meet customer demand.

Banks are the primary target. They access Dwolla through an API that connects to the customer software solution.

“We found that companies were facilitating B2B transactions through the app, making disbursements, and making other transfers,” Milne said. “They wanted their name on it instead of Dwolla’s. So we changed the technology to allow software developers to build into the application.”

To get off the ground, Milne raised $40 million of venture capital funding from top investors such as Union Square Ventures, Founders Group, and Andreessen Horowitz.

How Businesses Use Dwolla to Move Money

One of Dwolla’s top customers is real estate marketplace lender Patch of Land. Real estate project managers, investors, and other professionals use the platform to borrow money from lenders who provide the funding for their deals. Because Patch of Land funds millions of dollars worth of deals each year, they needed a way to move that money from the lender through the platform to the borrower and move returns back to the various investors. Patch of Land uses Dwolla’s APIs to make those money transfers.

“Some customers can use the APIs to authorize automated payments,” Milne said. “There is a range of money being transferred during a certain period of time.”

With a product like Dwolla, companies don’t have to build out their own money transfer platforms, which saves them in development costs. Some of Dwolla’s customers build their own admin panels into the system. Dwolla provides the integration support for those companies. Others want real-time chat rooms. Dwolla can make that happen, too. Through Dwolla’s analytical interface, companies can see how much money is going through their software, how many customers are transferring money, and what’s trending.

Companies using ACH have to negotiate their terms. If you want same day transfers, you’ll pay more. With Dwolla, you get a little piece of text, Milne said, that allows you to designate same-day transfer, same window, and other parameters. The time to market is much faster for the money movement.

So what kind of business can benefit from Dwolla’s transfer access APIs? Virtually any kind of business that makes transfers. That can include backend treasury systems, mobile app developers, governments, big businesses, banks, and more. Even online lenders.

How Dwolla Maintains a Competitive Edge

Dwolla was a pioneer in money transfers. That gives them an edge over most of the competition. Milne said it’s not the cheapest solution on the market, but he’s accustomed to working with well-funded companies trying to improve on execution. At that stage of development, they’re wondering if they should build it themselves, partner with a bank, or work with stand-up technology infrastructure like Dwolla. He’s hoping many of them will choose the latter.

“If you do it yourself,” he said, “you’re looking at a six to 12 month commitment. If you work with us, it’s a couple of weeks. It’s much cheaper in the short-term.”

That’s good news for companies that need to watch their cash flow.

Another selling point for Milne is the track record his company brings to the table. He believes his company can teach businesses the best practices of money transfers based on his seven-year history of doing it. That too can save companies a lot of money in trial-and-error expenses.
Dwolla has a dedicated account management protocol as well as dedicated software support. And they have a financial crime unit that combats fraud and other cybercrimes. Customers are given options in how to manage fraud if it’s found, which can then be extended into their own applications. Dwolla also has a variety of specialty teams to service its customers, which include FIU, BSA, in-house legal, information security, marketing, sales, and more.

Dwolla’s Growth and Expectations

Dwolla’s revenue has grown substantially over time. They have a few more than 100 customers currently using their access APIs while Milne and his team focus on onboarding the next 100. They’ve got billions of dollars flowing through their platform with no charges. Milne said that’s proof his technology works and will continue to work.

Service fees fees begin at $1,500 and go up from there. Rather than charge per transaction, they opted for the flat fee model and offer instant account verification as well as three different account types. Customers choose the features they want and Dwolla negotiates the final price for the customized package.

“This approach allows us to get engineering support if necessary,” Milne said. “We ask if the client wants to build their own or have us help. We want to make sure we approach the problem the right way for every customer.”

When Dwolla was an upstart money transfer app, they were infused with 50,000 small businesses signing on to send money. Many of those are still using the product in some capacity, Milne said. That’s a testament to the company’s staying power.

Where Do We Go From Here?

The Fed is making a lot of functional improvements to payment systems, Milne said. Along with that, ACH is doing a lot to keep the economy going. But new payment systems are coming along and making things faster. Technically, Dwolla looks like a private ACH system.

“Functionally, the idea of sending money to a private company instead of the Fed is a big deal.” He sees technology moving into the future having a compound effect, but he’s not sure how to measure it.

One thing Milne has noticed is that companies want to grow their businesses. Many of them want to move beyond their core competencies. Dwolla wants to be there to grow with them. To do that, Milne and his team need to focus on their core competency—moving money.

“There’s no silver bullet,” he said. “We can’t get distracted. It’s time to execute our mission rigorously.”

Authors:

Allen Taylor