- Today’s main news: Affirm debuts shopping app. Zopa profits tick upward. RateSetter recovering from loan scandal. PPDAI stock rises 7% with lift in institutional-funded loans. Oportun ends Nasdaq debut with 8% gain. Australia: RBA cuts interest rates, online lenders follow.
- Today’s main analysis: The Future of Finance: Marcus, Neobank, and fintech. (A MUST-READ)
- Today’s thought-provoking articles: Peter Renton’s quarterly marketplace lending results. Loans for sneakers. Lessons learned from LendIt Fintech Europe. What’s happening in fintech worldwide.
- Affirm debuts new app for shoppers. The app allows consumers to shop and check out with “virtually any retailer.” This Business Insider article highlights Affirm’s need to step up its game in order to compete with Amazon, 66 percent of whose customers begin their search for new product at Amazon. Affirm will have to offer better deals for consumers and make it easy to purchase things. With Affirm’s relationship with Walmart, that shouldn’t be too much of a challenge. However, it will be a challenge.
- Affirm app allows for bill splitting.
- Interview with Max Levchin, founder and CEO of Affirm.
- OnDeck survey indicates small businesses are concerned about economy. Old news, still interesting.
- Marcus, jobs, the economy, housing prices, and Oportun. From PeerIQ, well worth the read.
- Peter Renton’s quarterly MPL results. For Q2 2019. Always interesting to read how Renton’s investments have been doing. With lots of charts.
- The rose of “loans for sneakers” as a business. The focus is on Afterpay, an Affirm competitor, but this is a good read because it tackles POS lending from a consumer’s perspective. Insightful and interesting.
- What happened to Borro?
- Auto, home equity are soft spots in consumer lending.
- Maker offers multi-collateral DAI lending.
- A $40 billion pile of leveraged loans battered by huge losses.
- CFPB ruling shorts debt collectors.
- The SEC is hiring a data chief.
- Voyager selects Celsius Network for asset management.
- Zopa’s profits tick upward.
- Zopa says 9 out of 10 shoppers are confused by car finance options.
- RateSetter recovering from loan scandal.
- Wonga customers average 118 GBP payout.
- Savvy secures 20 million GBP funding facility.
- Interview with founder of Blend Network.
- Crowdfunding options for startups explained.
- Lessons learned from LendIt Fintech Europe.
- Linked Finance launches ‘Beyond Brexit’ business loans.
- ID Finance to double revenues within two years.
- Binance launches next phase of crypto lending program.
- What’s happening in the fintech revolution worldwide. A great read with interesting charts.
- Marcus, Neobank, and fintech developments. This is today’s must-read. Very detailed with lots of charts, but the focus is mostly on digital banking. Still, a very good read.
- Blockchain: The future of finance.
- China: PPDAI stock soars 7% on institutional-funding lending increase.
- Australia: RBA cuts rates. Online lenders do too.
- Australia: loans.com.au cuts rates.
- Bahrain: Beehive funds first SME.
- Malaysia: The risks and rewards of SPV 2030.
- Australia: OnDeck appoints national broker chief.
- Canada: BFS Capital opens data science and engineering hub in Toronto.
- United States
- OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA
- Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA
- Affirm ships new shopping and bill splitting app (Finextra), Rated: A
- Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A
- Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA
- My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA
- The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA
- What Happened to Borro? (deBanked), Rated: A
- Auto, home equity are soft spots in consumer lending (American Banker), Rated: A
- Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A
- A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A
- Ruling cuts short debt collectors’ victory lap over CFPB proposal (American Banker), Rated: B
- The SEC is hiring a chief data officer (Business Insider), Rated: B
- Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B
- United Kingdom
- Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA
- Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A
- Ratesetter recovering from loan scandal (The Times), Rated: AAA
- Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A
- Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A
- MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A
- Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A
- Landlords wary of tax changes (Money International), Rated: A
- PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA
- European Union
- What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA
- Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A
- ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A
- Binance Launches New Lending Program Phase (CoinCodex), Rated: A
- A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA
- Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA
- Blockchain: the future of finance (Financier Worldwide), Rated: A
- Hot home loan rates starting with a 2 (mozo), Rated: AAA
- loans.com.au jumps on October RBA home loan rate cut party (mozo), Rated: AAA
- OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B
- SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A
- Beehive funds first SME in Bahrain (Arabian Business), Rated: AAA
- BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B
OnDeck Survey: Economy is Top Concern for Small Businesses Ahead of 2020 Election (New Kerala), Rated: AAA
OnDeck today announced the results of a national survey of U.S. small business owners that finds economic issues are the most important factors in determining their choice for president in 2020.
- Economic concerns arise in several dimensions, including tax policy, job growth, support for small businesses, government spending and the overall economic climate. These issues were cited as the top concerns of more than 33% of those surveyed;
- Immigration was an issue of interest for 11.3% of small business owners surveyed, ranking second behind the economy as a concern.
- 57% of small businesses surveyed said they were either Very Optimistic or Somewhat Optimistic about the economic outlook for their businesses;
- 93% of those surveyed said they plan to vote in the 2020 election.
- 60% of small business owners surveyed said they already know who they plan to vote for in the 2020 presidential election.
Affirm debuted a new app encouraging customers to start their shopping journeys with it (Business Insider), Rated: AAA
The point-of-sale (POS) financing provider
Affirm ships new shopping and bill splitting app (Finextra), Rated: A
Affirm’s app also allows consumers to pay at any brick-and-mortar store that accepts Apple Pay or Google Pay, which is increasingly important as 24% of consumers want the flexibility to look online and shop in-store.
Those with Apple Pay or Google Pay enabled have also seen up to 14% of transactions driven in-store, making the Affirm app a rare omnichannel solution for customer acquisition.
Max Levchin On The Future-Present Of Everywhere POS Lending (PYMNTS), Rated: A
Since Affirm’s launch, the landscape in the POS space is radically different than it was when Affirm entered. It is, first and foremost, a much bigger and more populated space than it once was. Other startups have come to the field — Afterpay, Uplift and Sezzle for example — but also bigger and more established names in financial services. In the last 12 months alone Square, Mastercard, PayPal and Chase have all rolled out POS installment lending products or enhancements as the market continues to pick up popularity among consumers, particularly younger ones.
Latest Macro; latest from Marcus; Oportun goes IPO (PeerIQ), Rated: AAA
Q4 is off to a brisk start. The jobs report released this past Friday shows 114K in net new jobs (vs expectations of 120K), generally flat wages, and a drop in the unemployment rate to 3.5%.
On the one hand, the US economy is near ‘stall speed’ – around 1 to 1.5% growth rate.
House prices are expected to rise 5.8% over the next year due to low mortgage rates.
Two major financing announcements this week. FinTech lender, Oportun, led by CEO Raul Vazquez, ends its Nasdaq debut with an 8% gain. The debut is notable as it represents a positive shift in the sentiment to the reception of lenders to the IPO market.
My Quarterly Marketplace Lending Results – Q2 2019 (Lend Academy), Rated: AAA
The upward trend in my returns continued in Q2, making it the fifth quarter in a row with increasing returns. My preliminary return for the 12 months ending June 30, 2019 is 6.20% (one investment is still not final), the best I have achieved since Q3 2017.
The Maybe-Dubious Rise of the Loans-for-Sneaker Business (GQ), Rated: AAA
Afterpay is one of a number of platforms that have sprouted up over the past couple years that are willing to float customers a couple hundred or thousand dollars to shop. In addition to it, there are Affirm, Sezzle, Klarna, and Quadpay. They are positioned as a more consumer-friendly option than credit cards, a whole host of services bent on—because this is 2019—disrupting the powers that be.
Globally, Afterpay, which launched in Australia, has over 4.6 million customers and 35,000 retail partners. In the U.S., where Afterpay only launched in May of last year, it has two million customers and is available at 6,500 retailers. Over three million people use Affirm, while another 500,000 have shopped with Sezzle.
Silicon Valley promises aside, Afterpay is, at best, a platform that allows you to take out what amounts to a small loan on an item. After an approval process—Afterpay does not check a credit score; others like Affirm do—the customer pays a fourth of the price upfront and the rest is paid off in three equal installments every two weeks.
Also new is the $1,500 limit, up from $500, that Afterpay raised after Hyde-McCormick proved himself a responsible shopper and the $87.50 payments currently due every two weeks.
What Happened to Borro? (deBanked), Rated: A
In 2013, Borro, an innovative online lending company that was poised to disrupt pawn shop lending forever, invited me to their stylish offices at 767 Third Avenue in Manhattan.
Borro made $50 million worth of such loans in 2013 and doubled that number in 2014.
Auto, home equity are soft spots in consumer lending (American Banker), Rated: A
In its quarterly report that tracks consumer delinquency trends, the American Bankers Association said that 30-day past-due rates ticked up in eight of 11 categories in the second quarter when compared with the first quarter, but stressed that delinquencies remain well below historic norms.
Finally! Maker Offers Multi-Collateral DAI Lending (Cryptovest), Rated: A
Maker DAO, the most active decentralized finance app on the Ethereum network, has announced a date for its long-awaited multi-collateral DAI generation. According to observers, November 18 may be the date MKR starts accepting other assets as collateral.
Multi-collateral DAI creation has the potential to be riskier in comparison to ETH-based models. Currently, Maker is deliberately over-collateralized at above 300%, with the minimum at 150%, due to the high volatility of crypto assets.
A $ 40 Billion Pile of Leveraged Loans Is Battered by Big Losses (Bloomberg), Rated: A
Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.
Energy is the hardest-hit sector on the list, with more than $12 billion of loans falling more than 10 cents on the dollar. Consumer and health care follow, comprising around $8 billion and $5 billion of loans outstanding, respectively.
The SEC is hiring a chief data officer (Business Insider), Rated: B
The Securities and Exchange Commission is hiring its first chief data officer, according to a job posting for the role.
Voyager Selects Celsius Network to Manage Certain Assets (AP News), Rated: B
Voyager Digital, LLC, a subsidiary of publicly-traded Voyager Digital (Canada) Ltd (Ticker VYGR.CN), an industry-leading best execution crypto asset broker, today announced a partnership with Celsius Network, in which Celsius will manage a portion of Voyager’s digital assets.
Zopa’s P2P profits tick up but group losses widen due to heavy investment in bank (P2P Finance News), Rated: AAA
Zopa Group – which incorporates the P2P platform and upcoming digital bank – reported a pre-tax loss of £18.295m for the year ended 31 December 2018, compared to a pre-tax loss of £5.536m the previous year.
Zopa: nine in 10 shoppers confused by car finance options (Verdict), Rated: A
In a survey of 2,000 consumers, 47% of people who had recently bought a car with finance are unable to identify which type of finance deal they signed up for. Zopa estimates that the average car buyer could save up to £11,000 over the course of their lifetime by working out the best finance deal available.
Wonga customers’ average compensation payout may be just £118 (The Guardian), Rated: A
Customers who were mis-sold loans by the collapsed payday lender Wonga are expected to receive less than 10% of what they are owed in compensation after administrators revealed that only £41m will be put aside for claimants.
Payday loan alternative Savvy secures £20 million funding facility (Finextra), Rated: A
Stockport and Wilmslow based fintech company Savvy.co.uk is to create 25 jobs after securing a £20 million investment.
MEET THE FRENCHMAN WHO WANTS TO SOLVE THE UK’S HOUSING CRISIS (Business Leader), Rated: A
WHY DID YOU START BLEND NETWORK?
I started working in the financial industry as an FX trader before moving to trading gold and copper, both much more inefficient markets than FX. I realised that the UK property market was a hugely inefficient market in the sense that lenders and borrowers are not meeting. On the one hand, you have very experienced property developers across the country who are trying to access funds to build homes but traditional lenders are no longer active in providing development finance.
Instead, we lend in places such as Coventry, East Anglia, Doncaster, Northern Ireland. Northern Ireland is a very good example of our strategic approach to lending. Last year, we did around 80-85% of our business in Northern Ireland.
Crowdfunding a start up options explained for businesses and investors (What Investment), Rated: A
Crowdfunding a start up brings to mind the statement ‘Nothing worth having comes easy’, never truer than in the case of launching a start-up. Getting a new business off the ground will often require capital. Something which a lot of people don’t know how to go about getting.
- Reward based crowdfunding;
- Equity based crowdfunding;
- Debt based crowdfunding, and
- Donation based crowdfunding.
Landlords wary of tax changes (Money International), Rated: A
Half of the 200 landlords approached agreed tax changes and tougher mortgage borrowing criteria have thwarted their plans to buy more properties, while 15% admitted they had been put off buying homes to rent.
A third who still wanted to invest are considering a switch from buy to let to peer-to-peer lending secured against property, while 8% have already done so.
PPDAI Stock Soars 7% on Increase in Institutionally-Funded Loans (Capital Watch), Rated: AAA
The stock in PPDAI Group Inc (NYSE: PPDF) closed 7% higher on Wednesday, at $2.83 per American depositary share, after it announced a positive trend in funding of loans by its institutional partners and increased loan origination volume.
For the third quarter, the Shanghai-based company, which operates an online consumer finance marketplace, said in a statement on Wednesday that the volume of loans facilitated by its institutional funding partners jumped to $2.64 billion, up 91% from the second quarter. Total loan origination volume was above PPDAI’s guidance, it said, as it reached $3.51 billion, up 14% from the previous quarter.
What we learned at this year’s LendIt Fintech Europe (Business Insider), Rated: AAA
At the conference, Business Insider Intelligence identified four emerging themes that we expect to set the tone for the space for the next year: further proliferation of partnerships between banks and fintechs, increased focus on digital banks’ sustainability, accelerated innovation and disruption from small- and medium-sized business (SMB) lenders, and more challenges ahead for the UK’s P2P lenders.
- CYBG bank and price comparison site GoCompare recently partnered to offer an energy compare and switch service for all of CYBG’s B customers.
- Barclays bank partnered with SMB finance fintech MarketInvoice last year to give Barclays’ SMB clients access to MarkeInvoice’s solutions.
- French Banking-as-a-Service platform Treezor was acquired by Société Générale last year, as the bank looked to enhance its ability to innovate and decrease time to market.
Linked Finance launches ‘Beyond Brexit’ business loans (Bridging and Commercial), Rated: A
The new 18-month loan period will allow borrowers to access working capital facilities of up to €300,000 (approximately £265,194) in just 24 hours.
ID on track to double revenues as it eyes €300m+ of revenue within 2 years (Fintech Finance), Rated: A
ID Finance, the fintech operating in Europe and Latin America, saw revenue growth of over 100% in the first 9 months of 2019 and is on track to double its revenues to €90m revenue this year. The data science, credit scoring and digital finance company is now planning its first equity crowdfunding round via Crowdcube as it targets €300m+ of revenue within 2 years.
Binance Launches New Lending Program Phase (CoinCodex), Rated: A
The Binance cryptocurrency exchange has launched the latest phase of its relatively new lending program. For the program’s eighth installment, Binance is sticking with the model of short-term loans, as users only have to commit their crypto for 14 days.
A Guide to What’s Happening in the Fintech Revolution (Bloomberg), Rated: AAA
These underbanked markets, led by countries in Asia and Africa, have inspired fintech innovation that’s leapfrogging the technology available in the developed world. Ant Financial Services Group’s Alipay and Tencent Holdings’ WeChat Pay in China, Paytm in India, and Safaricom’s M-Pesa in Kenya are some well-known examples.
Take Facebook Inc.’s plan to launch a digital currency called Libra in 2020. The social network’s gigantic reach—more than 2.4 billion active monthly users—could draw a much wider audience to Libra than has used previous cryptocurrencies. For instance, global remittances by migrants reached a record $689 billion last year, according to the World Bank.
San Francisco-based 500 Startups staked 43 such companies in the 12 months ended June 30.
Goldman’s $ 1.3B Marcus burn, Neobank £200MM loss; plus 14 short takes on top developments (Lex), Rated: AAA
Goldman is losing $1.3 billion on Marcus, trying to build a Fintech leader. Etrade is going to lose $75 million from cutting trading fees to $0 to keep up with Robinhood. Revolut is losing £35 million on £60 million in revenue, with another £140 million burned by Atom, Monzo, Tandem, and the rest.
Generally speaking, from a deposit point of view, these are still all small businesses at £1 billion in assets (e.g., Betterment manages $20 billion).
The first is that the Robinhoods and Monzos of the world are 10x overpriced relative to the payments apps. I can sort of buy this — though money in motion is way easier to capture than money at rest. The second is that venture investors think a finance user is worth $1,500 in a digital bank.
Blockchain: the future of finance (Financier Worldwide), Rated: A
Recent examples of blockchain’s impact on financial markets go well beyond these initial applications or P2P lending or crowdfunding.
The first wave of applications in finance and banking is being driven by easily achievable gains in actively traded assets.
MasterCard incorporated a blockchain payment system providing vendors real time, lower cost settlements on cross-border transactions. Representing a consortium of more than 40 of the world’s largest banks, fintech firm R3 launched a payment system built on DLT platform Corda, to expedite intra-bank transfers.
St. Regis Aspen, a Colorado resort, is a partnership formed with a crowdfunding site, Indiegogo, that in lieu of a traditional IPO completed a private placement via DLT financing real estate. This sale of ‘tokens’ – fractional interests in the underlying property – raised $18m, compliant with securities laws.
Hot home loan rates starting with a 2 (mozo), Rated: AAA
The RBA has cut official interest rates for the third time this year, and already a handful of lenders have responded by slashing rates across their range of variable rate home loans. Right now, if your home loan doesn’t have a ‘2’ in front of it, you’re missing out.
OnDeck appoints Robbie Fidler as new national broker chief (IT Wire), Rated: B
Online SME lender OnDeck Australia has appointed experienced commercial lending operator Robbie Fidler as its national broker channel manager.
SPV 2030: Sharing of risks and reward (The Malaysian Reserve), Rated: A
BFS Capital Opens New Data Science and Engineering Hub in Toronto (Financial Post), Rated: B
BFS Capital, a leader in small business lending, has officially launched a data science and engineering hub in Toronto as the company accelerates its plans to develop best-in-class digital financial products for small businesses across the globe.
News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]
- Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018.
- Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019.
- Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest month for Reg CF since May 2016. Installment loans explode online. How Zopa will redefine banking. International P2P lending volumes. India lining up with China on fintech adoption rate. Can P2P lending plug southeast Asia’s business financing gap?
- SoFi cuts mortgage business jobs. The number is 7%, a small cut. The significance is SoFi is changing how they underwrite morgtgages.
- KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. LendingClub’s eighth rated sponsored securitization.
- Money360 surpasses $1 billion in loan originations and closings. Congratulations. Huge achievement.
- Rate hikes pause in 2019. Lower consumer spending in Q3, but now that Christmas is here, how much will it increase?
- LendingTree Debt Report November 2018. Non-mortgage consumer debt will exceed $4 trillion by the end of 2018. That represents a $1 trillion debt increase in five years.
- October was biggest month for Reg CF since May 2016. $10.9 million raised. This shows that Reg CF is going strong.
- Installment loans take off online. I look for online installment loans to increase in the next 2 to 5 years.
- 43.5% of purchase borrowers received mortgage rates under 5% last week.
- Americans are moving south–to Florida and Texas.
- Citibank leads major financial institutions on mobile banking.
- Why Wealthfront is offering free financial planning.
- How Credit Karma has built a billion dollar brand.
- Betterment launches tool to optimize cash savings.
- CommonBond acquires NextGenVest.
- Glassdoor names OppLoans a Best Workplace–again.
- CapWay expands digital banking options.
- Finicity partners with Princeton Mortgage.
- Onward Financial wins $1 million.
- Zopa granted a banking license. Zopa kicked off the P2P lending craze. Now it has a banking license, which makes it the first company to combine P2P lending and digital banking. Awesome move.
- How Zopa will redefine banking.
- Zopa says bank launch won’t affect P2P lending rates.
- Funding Circle expected to make FTSE 250 index.
- Funding the future of the UK PLC.
- Tandem Bank wants to improve consumers’ credit ratings with Journey Card.
- CrowdProperty uses Brismo to provide lending performance metrics.
- Arbuthnot backs MBI team.
- Kambo rolls out two mobile apps for crypto lending.
- LendInvest joins Ingard’s buy-to-let panel.
- International P2P lending volumes for November 2018. Mintos leads with 135.9 million euro in new loans. Ablrate fell down 100%.
- CoreLogic launches automated valuation solution.
- 5 customized digital lender strategies that work.
- Nasdaq buys Quandl.
- How SoftBank became the big startup story of the year. SoftBank’s Vision Fund funds some of the best startups, including fintech success stories.
- Can P2P lending plug southeast Asia’s business finance gap? An excellent read.
- Malaysia may issue more equity crowdfunding, P2P lending licenses in 2019.
- Milieu Insight raises $730,000.
- HonestFund raises $12 million.
- India catches up with China on fintech adoption.
- Canada: How experimental technology helps TD Bank on mobile.
- Australia: Helio Lending launches for crypto lending.
- Canada: OnDeck merges with Evolocity Financial Group.
- Australia: Lakeba invests in Lodex.
- Ghana: P2P lending as a means of propelling startup growth.
- China: Ping An wins global machine learning competition.
- United States
- SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA
- KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA
- Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA
- Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA
- LendingTree Debt Report November 2018 (LendingTree), Rated: AAA
- 43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A
- LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A
- October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA
- Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA
- How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A
- Why Wealthfront is offering free financial planning (Financial Planning), Rated: A
- Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A
- Betterment launches tool to optimize cash savings (Tearsheet), Rated: A
- CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A
- OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A
- Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A
- Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B
- NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B
- United Kingdom
- P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA
- Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA
- Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A
- Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A
- Funding the future of the UK PLC (Business Leader), Rated: A
- Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A
- CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A
- ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A
- KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A
- LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B
- Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA
- International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA
- CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A
- Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A
- Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B
- Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA
- Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A
- India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA
- Southeast Asia
- How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA
- P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA
- Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA
- Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A
- Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A
- How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA
- OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A
- Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA
SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA
Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.
KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.
The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.
This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.
Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA
Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.
Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA
US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:
LendingTree Debt Report November 2018 (LendingTree), Rated: AAA
Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.
In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.
43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A
For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.
LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A
LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.
Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.
Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.
October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA
October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.
According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.
Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA
Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.
And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.
QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan. To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.
How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A
In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.
Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A
Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.
Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.
Betterment launches tool to optimize cash savings (Tearsheet), Rated: A
Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.
What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.
CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A
CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.
OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A
Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.
Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A
According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.
Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.
In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.
Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B
Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.
P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA
Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.
Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA
Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.
Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.
Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.
Zopa explained it would redefine banking with the following services:
- Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
- Making sure money management is simple and a real person is available to discuss
- Going beyond ‘good enough’
Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A
ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.
It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.
Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A
Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.
Funding the future of the UK PLC (Business Leader), Rated: A
Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.
Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A
Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.
Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.
Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.
CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A
Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.
UK housebuilders back new online property listing start-up (Financial Times), Rated: A
Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.
Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.
ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A
Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.
KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A
KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.
LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B
Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal.
Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA
Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.
Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.
International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA
I removed Unilend, as the platform has closed and the company has gone into receivership.
CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A
CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.
The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.
Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A
According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?
- Consumers first
- Rebuilding trust
- Lack of credibility
- Partnership instead of competition
- Improving the quality of lives
Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B
Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.
Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA
Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.
The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.
Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A
Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.
India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA
India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.
How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA
Uber. WeWork. Saudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.
The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.
P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA
Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.
Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.
Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA
Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.
Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.
Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A
HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.
Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.
News Comments Today’s main news: OnDeck tops $10B in small business lending. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2018-P2. Robinhood looking to IPO. Faircent approved by Reserve Bank of India. Today’s main analysis: A credit card debt study from Wallet Hub. Today’s thought-provoking articles: Should the next billion dollar financial platform be for […]
- Today’s main news: OnDeck tops $10B in small business lending. KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2018-P2. Robinhood looking to IPO. Faircent approved by Reserve Bank of India.
- Today’s main analysis: A credit card debt study from Wallet Hub.
- Today’s thought-provoking articles: Should the next billion dollar financial platform be for Baby Boomers? Stress testing at Funding Circle. China’s tech is addicted to debt.
- OnDeck tops $10 billion for small business lending. Congratulations! That’s a great milestone.
- KBRA assigns preliminary ratings to Consumer Loan Underlying Bond Credit Trust 2018-P2.
- Robinhood is targeting an IPO. This should be an interesting ride for Robinhood. The company is firmly entrenched in millennial culture, but can it move beyond that? Can it make a successful foray into crypto without sacrificing its core offering?
- The next billion dollar financial platform. There hasn’t been a major financial platform for Baby Boomers yet. This article gives several reasons why there should be. But the question that any would-be takers has to ask is, would they use it? Is there any evidence that enough Boomers would use a financial services platform to justify the expense in building one?
- Credit card debt study. Some interesting insights into recent credit card trends. I think the data still shows that Americans are addicted to debt. Charge offs increase immediately following more credit card usage. Perhaps that is telling us something.
- College Ave completes second securitization.
- White Oak Global Advisors raises $2.1 billion.
- No one has applied for an OCC fintech charter yet. Maybe it’s wait-and-see season.
- State regulators try again to block OCC fintech charter.
- 2018 Fed Rate Hike survey.
- Opendoor buys Open Listings.
- Millennials in San Antonio, Texas carry the most debt.
- Funding Circle’s stress testing experiment. Get it straight from the horse’s mouth. This Funding Circle blog post tells how and what was learned.
- Buying into the Funding Circle IPO? Read this first.
- Barclays opens mobile banking app to rival accounts.
- Monzo: When a bank is not a bank.
- iwoca is fastest growing SME finance provider in UK.
- Unmortgage raises 10 million GBP.
- Beyond equity crowdfunding.
- P2PFN celebrates second birthday.
- Faircent gets Reserve Bank of India approval.
- Upwards raises $5 million.
- Lessons for P2P lending.
- Chinese fallout puts P2P lending focus on India.
- China: Tech sector is addicted to debt.
- Europe: Spotcap issues quarter of a billion in business credit lines.
- Australia: Prospa ranks 6th on LinkedIn top startup list.
- Indonesia: MOKA raises $24 million.
- Singapore: Helicap banks another $5 million.
- International: Ribbit Capital aims for $420 million with new fund.
- Australia: Small business lenders pledge to be fair.
- Indonesia: EDBI joins MOKA raise.
- United States
- OnDeck Small Business Online Lending Tops $ 10 Billion (PR Newswire) Rated:AAA
- KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (Business Wire) Rated: AAA
- Robinhood is targeting an IPO (Business Insider) Rated: AAA
- The Next Billion Dollar Financial Platform – Baby Boomers (The Sociable) Rated: AAA
- Credit Card Debt Study: Trends & Insights (Wallet Hub) Rated: AAA
- College Ave Student Loans Announces Completion of Second Successful Securitization (Crowdfund Insider) Rated: A
- White Oak Global Advisors raises $ 2.1 billion for its Direct Lending Strategy (Globe Newswire) Rated: A
- ‘Fintech Charter’ Has No Early Takers as Lawsuit Looms (Wall Street Journal) Rated: A
- 2018 Fed Rate Hike Survey (Wallet Hub) Rated: A
- Opendoor Buys Open Listing To Create End-to-End Marketplace (PYMNTS) Rated: A
- Fintech out to start national bank clears one hurdle but faces more (American Banker) Rated: A
- State regulators renew push to block OCC’s fintech charter (American Banker) Rated: A
- Millennials in this American city are carrying the most debt (Ladders) Rated: B
- United Kingdom
- Stress testing at Funding Circle (Funding Circle) Rated: AAA
- Thinking of buying into the Funding Circle IPO? Read this first (AOL) Rated: A
- Barclays opens up mobile banking app to rival accounts (Fintech Futures) Rated: A
- Monzo: When is a bank not a bank? (FT Alphaville) Rated: A
- iwoca: We are the UK’s Fastest Growing SME Finance Provider (Crowdfund Insider) Rated: A
- Proptech Startup Unmortgage Raises £10M in Seed (FinSMEs) Rated: A
- Crowdfunding – looking beyond equity investment (What Investment) Rated: A
- P2PFN celebrates its second birthday (Peer2Peer Finance) Rated: B
- China’s tech is addicted to debt (Technode) Rated: AAA
- European Union
- Spotcap Issues Quarter of a Billion in Credit Lines to Businesses (Spotcap) Rated: AAA
- Fintech investment powerhouse Ribbit Capital aims for $ 420 million with its latest fund (Tech Crunch) Rated: A
- Fintech Prospa Ranks 6th in LinkedIn Top Startups List (Crowdfund Insider) Rated: AAA
- Small business lenders pledge fairness under ASIC’s gaze (The Sidney Morning Herald) Rated: A
- P2P Lending Platform Faircent Receives RBI Nod (The Tech Panda) Rated: AAA
- Microlender Upwards raises about $ 5M from Shunwei Capital, Mayfield & India Quotient (ET Tech) Rated: A
- Lessons for P2P lending in India (Livemint) Rated: A
- Fallout in China puts focus on P2P lending in India (CNBCTV18) Rated: A
- Indonesia’s MOKA raises US$ 24M Series B, launches SME financing scheme (Yahoo News) Rated: AAA
- EDBI joins US$ 24m Series B funding round for Indonesian POS startup Moka (Business Times) Rated: B
- Alternative lender Helicap banks another $ 5m, just 4 months after seed round (Tech In Asia) Rated: A
OnDeck Small Business Online Lending Tops $ 10 Billion (PR Newswire) Rated:AAA
OnDeck has achieved a milestone in the Financial Technology (FinTech) industry, becoming the first non-bank online lender to surpass $10 billion in total loans originated to small businesses. OnDeck, with operations in the United States, Canada and Australia, is the world’s largest non-bank online lender to small business by total loan volume.
The achievement by OnDeck, a pioneer of the FinTech lending industry, is the latest indication that small businesses increasingly prefer to seek financing online. According to the Small Business Credit Survey from the Federal Reserve, small business owners are turning to online lenders in record numbers. In 2017, 24 percent of small businesses seeking credit applied online, up from 21 percent the previous year.
KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (Business Wire) Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P2 (“CLUB 2018-P2”). This is a $270.30 million consumer loan ABS transaction that is expected to close September 27, 2018.
Robinhood is targeting an IPO (Business Insider) Rated: AAA
Fintech unicorn Robinhood, which offers zero-fee stock, option, and crypto trading, has begun preparations to go public, Baiju Bhatt, the company’s chief executive, revealed at TechCrunch Disrupt SF last week. The US-based firm has raised $539 million in funding, and it’s currently valued at $5.6 billion.
In preparation for the initial public offering (IPO), the five-year-old company is in the process of hiring a chief financial officer (CFO), as well as undertaking audits from the Securities and Exchange Commission (SEC) and FINRA, a US securities markets watchdog.
The Next Billion Dollar Financial Platform – Baby Boomers (The Sociable) Rated: AAA
If you’ve immersed yourself in the world of Silicon Valley and you keep up with current trends, then it comes as no surprise that ageism in the U.S. tech world is an ongoing debate. The job search engine Indeed reports that 43% of workers in the tech industry worry about losing their jobs due to their age. While the general population is aware of the issue, its resolution is slow-moving.
The characteristics of Generation Z – those born after 1996 – are still being discovered. We don’t know enough about them yet to understand what kind of impact they will have. The Millennial Generation and Gen X have arguably been the main sales focus during the rise of Silicon Valley. Millennials in particular have overtaken the market, with 83% of today’s managers belonging to that generation. Finally, we have the Baby Boomers. Whether it’s because Millennials believe that older generations can’t use new tech – or that they inherently cater to people their own age by nature – Boomers are falling by the wayside.
People aged 50+ are the largest demographic in the United States, encompassing one third of the total population at 110 million. This age group is responsible for spending 50% of the total disposable income in the country.
Credit Card Debt Study: Trends & Insights (Wallet Hub) Rated: AAA
Americans repaid $40.6 billion in credit card debt during Q1 2018 – the second-largest quarterly payoff ever. But we added almost $30 billion back to our tab in Q2 2018. We also began the year owing more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record of $91.8 billion to our tab in 2017.
Only four times in the past three decades have we overspent so much in a year. And in each case, the charge-off rate – currently near historical lows – rose the following year. That’s true so far, as charge-offs are up nearly 3% from Q4 2017 to Q2 2018.
College Ave Student Loans Announces Completion of Second Successful Securitization (Crowdfund Insider) Rated: A
Student loan marketplace, College Ave Student Loans, announced on Tuesday it has completed a $199 million securitization of private student loans, its second successful securitization. According to the platform, the CASL 2018-A transaction completed over the summer, achieved higher ratings than College Ave’s inaugural securitization, receiving an ‘AA’ rating from DBRS and an ‘A’ rating from S&P for its senior notes.
According to College Ave, the transaction was heavily oversubscribed attracting a broad and diverse group of repeat investors and nine new participants. Barclays and Credit Suisse were joint lead underwriters on the transaction with Barclays serving as structuring agent and sole bookrunner.
White Oak Global Advisors raises $ 2.1 billion for its Direct Lending Strategy (Globe Newswire) Rated: A
White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the close of the White Oak Yield Spectrum Fund (the “Fund”) to outside investors. The Fund and other associated vehicles raised concurrently approximately $2.1 billion of total commitments, exceeding the $1.75 billion fundraising target. White Oak’s previous flagship fund, the White Oak Summit Fund, closed with approximately $1.3 billion of commitments in March 2016.
The capital for the White Oak Yield Spectrum Fund was raised from a diversified group of institutional investors worldwide. In particular, the Fund attracted very strong support from public and private pension funds, insurance companies and global family offices. White Oak currently manages over $5.6 billion of committed assets.
The Fund will primarily invest in first-lien, directly originated lending strategies, including term loans, asset-based loans, and equipment financing.
‘Fintech Charter’ Has No Early Takers as Lawsuit Looms (Wall Street Journal) Rated: A
A national banking regulator is offering cutting-edge financial firms a new pathway into the traditional banking system. So far, few of them are biting.
The lack of immediate interest from the likes of LendingClub Corp. LC +0.00% , Square Inc., and others comes in large part from uncertainty about what activities the Office of the Comptroller of the Currency’s so-called fintech charter will allow, what regulatory requirements it will carry, and whether it will hold up in court.
That uncertainty grew Wednesday when the Conference of State Bank Supervisors, a group of state regulators, said it intends to file a lawsuit challenging the OCC’s authority, renewing a previously unsuccessfully legal challenge.
2018 Fed Rate Hike Survey (Wallet Hub) Rated: A
Opendoor Buys Open Listing To Create End-to-End Marketplace (PYMNTS) Rated: A
In a press release, Opendoor said the acquisition of Open Listings, which operates a platform that aims to make it easier and lower-cost to find, tour and buy any home on the market, will enable it to create an end-to-end marketplace for the buying, selling and trading of homes. According to the company, 71 percent of home sellers are also looking to purchase a home.
With the acquisition, Opendoor customers will be able to line up a purchase of any home on the market via a trade-in transaction. Buyers who use Open Listings will get a discount on the home purchased through a commission rebate of up to 50 percent, the company said in the press release.
Via mobile phone or computer, customers can tour and submit an offer on any home on the market, get an offer on their existing home and align the timing of both transactions. By integrating Open Listings with Opendoor‘s mortgage, title and homes services, the company said conducting a real estate transaction will be as easy as booking a flight or making an online purchase.
Fintech out to start national bank clears one hurdle but faces more (American Banker) Rated: A
Varo Money in Salt Lake City is one step closer to becoming a national bank.
The fintech firm, which aims to lower the cost of banking through a mobile-only platform, recently received preliminary and conditional approval from the Office of the Comptroller of the Currency. Varo still needs to apply and receive approval from the Federal Deposit Insurance Corp. and the Federal Reserve.
Colin Walsh, Varo’s co-founder and CEO, is optimistic that the company will be operating as a bank within a year. He characterized the OCC’s decision as a pivotal moment for banking — one that shows regulators are more willing to consider nontraditional models.
State regulators renew push to block OCC’s fintech charter (American Banker) Rated: A
State regulators said Wednesday they intend to refile a lawsuit against the Office of the Comptroller of the Currency in an effort to block it from offering a new federal bank charter for fintech firms.
The Conference of State Bank Supervisors said its board recently decided to proceed with another round of litigation against the national bank regulator now that the agency said July 31 it would offer a so-called special-purpose national bank charter to fintech firms.
This will be the state regulators’ second attempt at blocking the OCC in court.
Millennials in this American city are carrying the most debt (Ladders) Rated: B
New data from online loan marketplace LendingTree shows that San Antonio is the American city where Millennials have “the most debt,” with a median debt balance of $27,122 — not including mortgages.
Researchers took a look at “anonymized credit report data of My LendingTree users who live in the 50 biggest metro areas in the U.S.” to compile the data. They were born anywhere between the years 1981 and 1996.
The 10 cities where Millennials have the most debt
Here they are, plus the average percentages of what highly contributes to Millennials’ “total debt balances.” Again, these don’t include mortgages:
- San Antonio: median balance of $27,122, with car loans making up 43.2% of “total debt balances”
- Pittsburgh: median balance of $26,403, with student debt being 45.7% of all debt
- Austin: median balance of $26,164, with 18.1% of all debt being from credit cards and 37.1% being from car loans
Stress testing at Funding Circle (Funding Circle) Rated: AAA
This means building a sustainable platform that allows investors to earn attractive and stable returns by lending to creditworthy businesses, during every stage of an economic cycle. Since 2010, globally we’ve improved access to affordable capital for more than 50,000 businesses, and opened up a new asset class for over 80,000 investors.
Fed stress parameters included:
|Adverse Scenario||Severely Adverse Scenario|
|GDP||Falls 2 ¼ percent below Q4 2017||Falls 7 ½ percent below Q4 2017|
|Unemployment||Rises to 7%||Rises to 10%|
|Home Prices||Falls 12%||Falls 30-40%|
Peer-to-peer lender Funding Circle fired the starting gun on its much-anticipated plans to go public earlier this month. The company, which is only eight years old, is looking to attract a value of £1.7bn and raise £300m in the process.
Since its founding, Funding Circle has transformed the market for business financing, matching everyday investors who have money to spare with businesses looking for funding to expand. In total, the company has put together £5bn in loans for small businesses since 2010.
However, if you’re thinking of buying into the IPO, there are several issues you need to consider first.
Barclays opens up mobile banking app to rival accounts (Fintech Futures) Rated: A
Barclays has become the “first” UK bank to allow customers to bring their other current accounts into its mobile banking app.
Barclays says this new feature gives customers a way to get a clearer picture of their day-to-day finances within its app. It uses API technology – all powered by open banking.With competition in UK banking tougher than an East End gangster, banks are trying to stand out and play a game of constant one-upmanship.
It’s also a riposte to the many fintech start-ups offering a similar service. For example, last month London-based personal finance app Bippit launched with the offer of an account connecting and savings service.
Monzo: When is a bank not a bank? (FT Alphaville) Rated: A
Monzo is frequently hailed as one of the most exciting challenges the tech industry poses to high street banks.
Wikipedia calls it a “digital, mobile-only bank”. Mashable summed it up as the “bank that’s apparently so cool it’s become a chat up line in London’s bars”. Its own stated ambition is to “build a better bank”. In April 2017, it acquired a banking licence.
But does Monzo actually behave like a bank?
Banks, under one interpretation, are economic inventions which create liquidity from an array of otherwise illiquid assets. Douglas Diamond, the US economist, describes a bank as “a lender financed with demand deposits”. Depositors sacrifice higher returns for the privilege of immediately being able to withdraw their capital whenever they want.
iwoca: We are the UK’s Fastest Growing SME Finance Provider (Crowdfund Insider) Rated: A
The Sunday Times Hiscox Tech Track 100, published last Sunday, 9th September 2018. Ranked No. 30 on the ilst – which ranks Britain’s tech firms in regards to the fastest-growing sales. iwoca joins a group of prominent UK Fintechs recognized by the Times.
Proptech Startup Unmortgage Raises £10M in Seed (FinSMEs) Rated: A
Unmortgage, a London, UK-based proptech startup, raised £10m in funding.
Backers included Anthemis Exponential Ventures, and Augmentum Fintech plc.
The company intends to use the funds to expand operations and finance the part of the homes it purchases.
Crowdfunding – looking beyond equity investment (What Investment) Rated: A
At a time when banks were increasingly adopting the ‘computer says no’ approach, entrepreneurs and those involved with company start ups sought different ways of financing their ambitions.
Crowdfunding platforms including CrowdCube and Seedrs emerged, using technology to bring investors and companies thirsty for cash together.
Ten years later there are more crowdfunding platforms than ever, the top 10 crowdfunding platforms in 2018 as listed by What Investment.co.uk’s sister website Growth Businessinclude names such as Seedrs, CrowdCube plus RateSetter, Trillon Fund and Funding Circle.
P2PFN celebrates its second birthday (Peer2Peer Finance) Rated: B
PEER2PEER Finance News launched two years ago today!
The progress that has been made in two years is staggering. Most P2P platforms have become fully FCA authorised and many of them have launched IFISAs – which attracted £290m in the last tax year.
The UK’s largest P2P firms have cumulatively lent out more than £11bn, Zopa is getting closer to its bank launch and Funding Circle is floating on the main market of the London Stock Exchange next month.
China’s tech is addicted to debt (Technode) Rated: AAA
China has become addicted to debt. Now, its tech industry is hooked too.
It started innocently enough. Back in 2008, when the fallout of America’s own debt binge was giving the whole world a hangover, China engaged in a decisive and robust economic stimulus, injecting RMB 4 trillion into key sectors of its economy. Banks, mostly state-owned in China, were directed to lend more, particularly to other state-owned firms. As a result, China recovered quickly from the global financial crisis, even as the US and Europe struggled to get back on their feet.
However, even as the Chinese economy recovered, the banks continued to lend, and Chinese companies continued to invest, most notably in infrastructure projects. Not only did they invest, they invested A LOT.
Spotcap Issues Quarter of a Billion in Credit Lines to Businesses (Spotcap) Rated: AAA
Global fintech lender Spotcap has issued more than EUR 250 million in credit lines since its launch in 2014.
The company combines robust credit assessment principles with innovative technology to offer a smooth and straightforward loan experience. The fintech undertakes cash flow based, rather than credit-score based underwriting, resulting in a fair assessment of the real-time performance of a business.
In the last 12 months, Spotcap experienced more than 100 percent year-on-year growth in the volume of credit lines it provided, growing at a faster pace than the alternative finance industry, which recently experienced 41 percent year-on-year growth in Europe.
Fintech investment powerhouse Ribbit Capital aims for $ 420 million with its latest fund (Tech Crunch) Rated: A
Ribbit Capital, the financial technology investment firm whose portfolio includes hits like the no-fee mobile investment platform Robinhood; cryptocurrency wallet and marketplace provider Coinbase; and Root Insurance, the automotive insurance platform that just joined the billion-dollar startup club; is raising $420 million for its latest fund, according to a filing with the Securities and Exchange Commission.
The fund would be Ribbit’s fifth foray out with limited partners and its $420 million target is only a nominal increase from the $300 million it had set out to raise for its fourth fund last year.
Coinbase alone is now worth at least $8 billion on paper, and no one laughs when chief executive Brian Armstrong says that his company’s goal is to become the New York Stock Exchange of crypto securities.
Robinhood, another one of Ribbit’s portfolio darlings, is flirting with a $6 billion valuation after its latest funding round earlier this year — and has become synonymous with stock trading for a new generation of investors (despite some criticism about its business model).
Fintech Prospa Ranks 6th in LinkedIn Top Startups List (Crowdfund Insider) Rated: AAA
Prospa says it has been named 6th on the 2018 LinkedIn Top Startups List. The list marks the 25 best startups to work for in Australia. Prospa adds that it is the top Fintech on the list as well.
Prospa is an online lender catering to small business. Prospa allows SMEs access to loans between $5,000 and $250,000, with approval and funding within as little as 24 hours.
Now in its sixth year, Prospa has established itself as delivering consistent high growth with a solid customer satisfaction NPS score averaging 77 and customer repeat rates of 69%.
Small business lenders pledge fairness under ASIC’s gaze (The Sidney Morning Herald) Rated: A
Fintech lenders say they’re moving quickly to review and amend any unfair contract terms before the watchdog comes knocking, but there are still questions about best lending practice.
Last week, alternative lender Prospa confirmed it had changed a number of contract clauses after receiving a query letter from the Australian Securities and Investments Commission (ASIC) back in June that arrived just days before the startup put the brakes on its planned ASX listing.
P2P Lending Platform Faircent Receives RBI Nod (The Tech Panda) Rated: AAA
After Peer-to-Peer (P2P) lending platform, Faircent, India’s second largest P2P Lending platform, i2ifunding.com also announced that they have received their Certificate of Registration (CoR) as NBFC-Peer to Peer Lending Platform (NBFC-P2P) from Reserve Bank of India (RBI).
According to RBI’s Master Directions issued in 2017, each player in P2P lending platforms are required to register as a Non-Banking Financial Company (NBFC-P2P). Backed by SucSEED Venture Partners and angel investors comprising industry veterans, i2iFunding is one of the top players in the P2P lending market sector with more than 80,000 registered users.
Microlender Upwards raises about $ 5M from Shunwei Capital, Mayfield & India Quotient (ET Tech) Rated: A
Micro-lending fintech firm Upwards has raised about Rs 32 crore (about $5 million) in funding led by Chinese venture capital firm Shunwei Capital. The series A investment also saw participation from Upwards’ existing investors Mayfield and India Quotient.
The company will use a large part of the capital raised on strengthening its technology and data science capabilities to help underwrite loans for a larger user base as it looks to significantly scale up its loan book over the next year. Upwards is targetting a monthly loan disbursal run rate of Rs 25-30 crore and looking to widen its net outstanding loan book to Rs 100-120 crore over the next year.
Lessons for P2P lending in India (Livemint) Rated: A
Peer-to-peer (P2P) lending platforms in China are shutting shop at a rapid pace. A P2P lending platform is a virtual marketplace where actual lenders meet actual borrowers. A Bloomberg report from July states that 4,500 P2P lending platforms in China have closed shop since 2013. The P2P lending industry in China has 50 million registered users and $192 billion of outstanding loans, according to the Bloomberg report. Other estimates put the size of outstanding loans through P2P lending platforms in China at $430 billion.
The crisis in China’s P2P lending market was a fallout of regulatory attempts to clean up the lending space of problems like high interest rates, misuse of funds and exaggerated return figures. Instead of complying with stricter regulations, some platforms chose to shut operations, which led to panic among investors who started placing withdrawal requests on other P2P lending platforms too, leading to further confusion.
Fallout in China puts focus on P2P lending in India (CNBCTV18) Rated: A
While the P2P sector is still in its early stages in the country, regulatory bodies have started taking measures to put a proper check on them. The Reserve Bank of India (RBI) has made it clear that these platforms will be registered as non-banking financial companies (NBFCs) and provided guidelines for them.
Though currently only a handful of platforms are registered as P2P platforms under RBI, the emergence of several sites with the claim of being P2P platforms makes it necessary to put further control on them.
Indonesia’s MOKA raises US$ 24M Series B, launches SME financing scheme (Yahoo News) Rated: AAA
Indonesian end-to-end retail operations platform MOKA announced that it has raised US$24 million in Series B funding round led by Sequoia Capital India.
SoftBank Korea, EDBI, EV Growth, as well as existing investors Mandiri Capital, Convergence Ventures, and Fenox VC, also participated in the funding round.
In a press statement, MOKA said that the funding will be used to accelerate product development.
EDBI joins US$ 24m Series B funding round for Indonesian POS startup Moka (Business Times) Rated: B
INDONESIAN cloud-based point-of-sale (POS) system startup Moka has raised US$24 million in a Series B funding round with EDBI, the investment arm of the Economic Development Board, among the investors.
The investment round, which was led by Sequoia India, also included SoftBank Ventures Korea, EV Growth, Mandiri Capital, Convergence, and Fenox.
Alternative lender Helicap banks another $ 5m, just 4 months after seed round (Tech In Asia) Rated: A
Singapore-based alternative lending startup Helicap has raised US$5 million in a pre-series A round led by East Ventures and property firm Soilbuild Group Holdings.
The fresh funding comes just four months after the company closed a US$1.5 million seed round led by Singapore member of parliament and former manpower minister Teo Ser Luck.
Helicap said it will use the investment to hire tech and data talent and expand its presence in Indonesia, Vietnam, and the Philippines. Some of the capital will also go towards boosting its risk management abilities through improved credit scoring and due diligence tools.
News Comments Today’s main news: Barclays buys stake in MarketInvoice. N26, Revolut are coming to America. Zopa raises 44M GBP for new bank. China private equity funds suffer. Linked Finance ink 10M Euro in loans in Q2. Today’s main analysis: The states where payday lending charges almost 700 percent interest. Today’s thought-provoking articles: PeerIQ’s MPL Securitization Tracker. Debut of the […]
- Today’s main news: Barclays buys stake in MarketInvoice. N26, Revolut are coming to America. Zopa raises 44M GBP for new bank. China private equity funds suffer. Linked Finance ink 10M Euro in loans in Q2.
- Today’s main analysis: The states where payday lending charges almost 700 percent interest.
- Today’s thought-provoking articles: PeerIQ’s MPL Securitization Tracker. Debut of the OCC Fintech Charter. LendingTree’s rebrand. How Fintex Capital enabled Banco BNI Europa to invest in Upgrade Loans.
- Can N26, Revolut conquer America? The presence of N26 and Revolut in the U.S. would up the competitive game. They’ve proven themselves in Europe, but the U.S. market for digital banking hasn’t taken off. Can the European challenger banks entice Americans to get on board? It will be interesting to watch.
- PeerIQ’s MPL Securitization Tracker for Q2. Q2 2018 was a record quarter for marketplace lending securitizations. My guess is, Q3 will top that. This will be the year for securitizations.
- Debut of the Office of the Comptroller of the Currency’s (OCC) Fintech Charter. This isn’t exactly breaking news (it happened last week), but everybody’s talking about it.
- Less is more for OCC’s financial inclusion plans.
- Be wary of innovating another financial crisis.
- Will fintech companies enter the OCC door?
- Does a bank charter still make sense for Square?
- The map that shows which states charge 700% interest on payday loans. Payday loans are still popular in many states, and several states are waging war on the practice. If online lenders can present a reasonable alternative, they can help people applying for these loans and make legislation unnecessary.
- LendingTree’s rebrand is not barking up the wrong tree. A rebrand can often pump new juice into a business.
- Elevate Credit expected to register $203.49 million in sales this quarter.
- Proposed payday alternative loans are unattractive to credit unions.
- Why real estate deals are the big success story in equity crowdfunding.
- A moratorium on industrial loan charter applications?
- Lenders One names new CEO.
- Barclays buys minority stake in MarketInvoice.
- Zopa raises 44 million GBP for new bank.
- Wonga investors sink 10 million GBP into payday lender.
- Can new breed of robo-advisors get your money?
- Private equity funds suffer wae of closures.
- P2P CEO hits Forbes high achievers list while under criminal investigation.
- Qudian distances itself from other P2P lenders.
- China lends trillions to SMEs, farmers.
- Linked Finance logs 10 million euros in loans in Q2. Congratulations. Great achievement.
- Banco BNI Europa launches Spanish equity release with Optima Mayores.
- Altisource names new COO of origination solutions.
- International: How Fintex Capital enabled Banco BNI Europa to invest in Upgrade Loans.
- India: Regulations shrink P2P lending industry.
- India: Cashkumar sees huge potential in online lending for short-term credit.
- Japan: Samurai Asset Finance offers loans collateralized by digital assets.
- Singapore: Real estate crowdfunding with cryptocurrencies.
- IMDEX ICO: Decentralized crypto exchange and banking (including lending).
- United States
- Will Europe’s fintech banks conquer North America? (AltFi), Rated: AAA
- PeerIQ’s MPL Securitization Tracker for 2Q2018 (PeerIQ), Rated: AAA
- Debut of the OCC’s FinTech Charter + Supervisory Standards (PeerIQ), Rated: AAA
- Less is more for OCC’s fintech financial inclusion plans (American Banker), Rated: A
- Fintech charter: Be wary of innovating into another crisis (The Hill), Rated: A
- With OCC’s door officially open, will fintechs enter? (American Banker), Rated: A
- Does a Bank Charter for Square Still Make Sense? CEO Jack Dorsey Thinks So (Bank Innovation), Rated: A
- This map shows the states where payday loans charge nearly 700 percent interest (CNBC), Rated: AAA
- This Rebrand Is Not Barking Up The Wrong Tree (Forbes), Rated: AAA
- $ 203.49 Million in Sales Expected for Elevate Credit Inc (ELVT) This Quarter (Fairfield Current), Rated: A
- NCUA’s Proposed Payday Alternative Loans Unattractive to CUs: Trades (CU Times), Rated: A
- Why Real Estate Deals, Not Startups are the Big Success Story of Equity Crowdfunding (Crowdfund Insider), Rated: A
- ICBA calls for a new FDIC moratorium on industrial loan charter applications (American Banker), Rated: A
- Lenders One Names Michael Kuentz as Chief Executive Officer (Altisource), Rated: A
- United Kingdom
- Barclays takes stake in SME lender MarketInvoice (Banking Tech), Rated: AAA
- P2P lender Zopa raises £44m to fund new bank (Financial Times), Rated: AAA
- Wonga investors inject £10M so cash-strapped payday lender can fund claims (TechCrunch), Rated: A
- Can this new breed of robo-advisers help you take control of your money? (The Telegraph), Rated: A
- China private equity funds suffer wave of closures (Financial Times), Rated: AAA
- Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation (SCMP), Rated: A
- Qudian Tries to Distance Itself from Other P2P Lenders (Capital Watch), Rated: A
- China lends trillions to SMEs, farmers as part of inclusive finance push (Global Times), Rated: A
- European Union
- €10m loans mark record quarter for Linked Finance (Independent), Rated: AAA
- BANCO BNI EUROPA LAUNCHES EQUITY RELEASE IN SPAIN WITH ÓPTIMA MAYORES (Fintech.Finance), Rated: A
- Altisource Names Justin Vedder as Chief Operating Officer of Origination Solutions (Altisource), Rated: B
- How Fintex Capital Enabled the $ 30M Banco BNI Europa Investment in Upgrade Loans (Lend Academy), Rated: AAA
- Regulations Shrink India’s Peer-To-Peer Lending Industry (Bloomberg Quint), Rated: AAA
- Cashkumar foresees huge potential in online lending for short-term credit (The Hindu Business Line), Rated: A
- Japan’s Samurai Asset Finance Offers Loans Collateralized by Digital Assets (Bitcoin Exchange Guide), Rated: A
- Crypto for real estate (Business Times), Rated: A
- IMDEX ICO (IMDX Token): Decentralized Exchange & Crypto Banking Platform? (Bitcoin Exchange Guide), Rated: B
Will Europe’s fintech banks conquer North America? (AltFi), Rated: AAA
Revolut and N26 will be launching in the US soon, but what sort of market will they be entering? How are local banks adapting their offerings to suit younger users? And what will be the impact of the newly-announced bank charters for fintechs?
PeerIQ’s MPL Securitization Tracker for 2Q2018 (PeerIQ), Rated: AAA
- Twelve marketplace lending securitizations priced this quarter totaling $5.0 Bn, the highest level of quarterly issuance, representing 36% growth YoY. To date, cumulative issuance equals $38.4 Bn across 126 deals.
- We observed spreads widening and yields rising on new issuance. Weighted average all-in yields on consumer deals increased from 2.9% to 4.2% QoQ, and on student deals from 3.0% to 4.5% QoQ.
- All deals issued this quarter except SoFi’s student loan passthrough securitizations were rated.
- Tranches continue to get upgraded. So far, ratings’ agencies have upgraded 51 consumer MPL tranches and 67 student MPL tranches that are outstanding.
- Citigroup, Deutsche Bank, and Credit Suisse continue to top the issuance league tables with 54% of MPL ABS transaction volume.
- Freedom Financial issued its inaugural deal and OnDeck returned to the market. SoFi issued over $2 Bn in student loan passthrough securitizations.
Debut of the OCC’s FinTech Charter + Supervisory Standards (PeerIQ), Rated: AAA
The US economy added 157k jobs in July and the unemployment rate dropped to 3.9%. Wage growth came in strong at 2.7%, potentially fueling inflation down the road and keeping the Fed on its stated rate hike path.
OCC Asserts its Authority and is Open to Accepting SPNB Charters
Immediately following the report, Joseph Otting, Comptroller of the Currency, announced that the OCC would start accepting applications from “fintech companies that are engaged in the business of banking but do not take deposits.”
An SPNB can engage in a limited range of banking or fiduciary activities like credit card operations, taking deposits, paying checks, lending money, community development, or cash management activities. The policy is a significant development as companies with the Fintech charter would be able to perform banking activities like lending and payment processing nationally.
Who are the Likely Winners and Losers?
The long-term winner of the charter is the US consumer who will benefit from greater competition, innovation, and access to credit. Payments companies that seek to compete with Visa/Mastercard also stand to benefit. Lenders that qualify for the charter may also have a competitive advantage. Payments arms of firms like Google, Apple, Amazon and PayPal would fit the profile, as well as large non-bank lenders that can demonstrate sustainable profitability de-risked their business models. Fintechs that have liquidity, funding, or going-concern risks will struggle to obtain charters.
Less is more for OCC’s fintech financial inclusion plans (American Banker), Rated: A
The Office of the Comptroller of the Currency is threading a tricky needle.
It has affirmed that it plans to evaluate fintech charter applicants based on their fair lending efforts, but it’s pulled back on specifics for how that process might work. That has made some consumer groups nervous.
The OCC published an updated version of its licensing manual supplement for fintechs on July 31, in connection with an announcement that it’s begun accepting applications for fintech charters.
Fintech charter: Be wary of innovating into another crisis (The Hill), Rated: A
But before we allow fintech firms to bound over the regulatory mound, it’s important to take a hard look at why we regulate the financial services sector so thoroughly to begin with.
Many also claim that fintech will bank the unbanked and lead to financial inclusion. The only thing standing in the way of all of this change and disruption, many claim, is overbearing government regulation.
With OCC’s door officially open, will fintechs enter? (American Banker), Rated: A
Fintech companies now have the federal option they have long sought after the Office of the Comptroller of the Currency green-lighted firms to apply for a special-purpose bank charter. But winning OCC approval on charter bids will not be a walk in the park.
One day after the OCC announcement, some fintech firms signaled clear interest in the charter. But the agency’s decision also prompted a slew of additional questions, including whether firms would be able to meet the regulator’s tough criteria, and whether state regulators would continue to fight
Does a Bank Charter for Square Still Make Sense? CEO Jack Dorsey Thinks So (Bank Innovation), Rated: A
POS payments provider Square is still interested in pursuing a bank charter, but how? It may be more challenging given that the company will be paying more attention to its customer-facing prepaid products like Square Cash and its Cash Card, according to CEO Jack Dorsey in the company’s earnings call yesterday.
Some short-term loans cost over 20 times more in interest than the average credit card. And yet one in 10 Americans have used them.
In the U.S. today, these loans are a $9 billion business. In the past two years, 11 percent of U.S. adults say they’ve taken out a payday loan, according to a recent survey of approximately 3,700 Americans that CNBC Make Itperformed in conjunction with Morning Consult.
This Rebrand Is Not Barking Up The Wrong Tree (Forbes), Rated: AAA
$ 203.49 Million in Sales Expected for Elevate Credit Inc (ELVT) This Quarter (Fairfield Current), Rated: A
Equities analysts expect Elevate Credit Inc (NYSE:ELVT) to announce sales of $203.49 million for the current fiscal quarter, according to Zacks. Two analysts have made estimates for Elevate Credit’s earnings, with the lowest sales estimate coming in at $201.00 million and the highest estimate coming in at $205.97 million. Elevate Credit reported sales of $172.85 million in the same quarter last year, which indicates a positive year-over-year growth rate of 17.7%. The business is scheduled to announce its next earnings report on Monday, October 29th.
NCUA’s Proposed Payday Alternative Loans Unattractive to CUs: Trades (CU Times), Rated: A
A new payday alternative program proposed by the NCUA is unlikely to convince many more credit unions to offer short-term loans because the loan terms are too prescriptive, credit union trade groups said.
Why Real Estate Deals, Not Startups are the Big Success Story of Equity Crowdfunding (Crowdfund Insider), Rated: A
In the year after Title III went into effect, startups received only $38 million in equity crowdfunding, according to Bloomberg—an amount that amounted to “a rounding error” in the larger system.
Before the JOBS Act, there were three formidable barriers to widespread individual investment in commercial real estate.
- Limited access to deal flow
- High minimums
Online crowdfunding has eliminated all three barriers
To begin with, the process is far more transparent and accessible, with minimum investments dropping to as low as $10,000.
ICBA calls for a new FDIC moratorium on industrial loan charter applications (American Banker), Rated: A
Renewing longstanding opposition to industrial loan charters, the Independent Community Bankers of America urged the Federal Deposit Insurance Corp. to impose a two-year moratorium on such applications.
The trade group also pressed the FDIC to reject an application from the student loan servicer Nelnet for an industrial loan charter.
Lenders One Names Michael Kuentz as Chief Executive Officer (Altisource), Rated: A
Lenders One Cooperative, a national alliance of independent mortgage bankers, announced that Michael Kuentz has been promoted to the role of Chief Executive Officer of Lenders One by its Board of Directors. Mr. Kuentz previously held the title of President. In his new role, he will assume responsibility for Lenders One’s day-to-day operations and strategic execution as well as continue to lead and manage the cooperative’s sales effort.
Barclays takes stake in SME lender MarketInvoice (Banking Tech), Rated: AAA
Details were not disclosed, because we live in the age of secrecy, but the bank says the deal is a key part of its plans to invest in new business models for growth, and MarketInvoice’s ambition to broaden its reach across the UK.
P2P lender Zopa raises £44m to fund new bank (Financial Times), Rated: AAA
Zopa has raised £44m in a new funding round to aid its expansion into traditional banking as its traditional peer to peer business comes under pressure from regulators.
Wonga investors inject £10M so cash-strapped payday lender can fund claims (TechCrunch), Rated: A
Yesterday Sky News reported that those same two, Accel Partners and Balderton Capital, are among a group of Wonga investors that have agreed to inject a further £10M (~$13M) into the business to help fund compensation claims related to its past censured practices.
Can this new breed of robo-advisers help you take control of your money? (The Telegraph), Rated: A
Savers have historically been forced to choose between picking and managing their own investments, paying for financial advice, or, recently, handing their money over to a “robo adviser” to do it for them.
China private equity funds suffer wave of closures (Financial Times), Rated: AAA
Chinese alternative asset managers have become the latest casualty of the country’s crackdown on debt and financial risk, with a record number of private equity and hedge funds dissolving in recent months as new regulations limit their fundraising.
In the first six months of this year, the Asset Management Association of China (Amac) — a government-controlled industry body — “lost contact” with 163 private fund institutions, more than 70 per cent of the total for which contact was lost for 2017.
Chinese P2P chief Yao Kunjie makes the Forbes high achievers list while under investigation (SCMP), Rated: A
Yao Kunjie, 28, is the CEO of peer-to-peer lending platform Beimi Wallet and was named on the financial sector list on Thursday.
Forbes magazine puts out regional lists of high achievers born after January 1, 1988, in 20 sectors every year.
The announcement came just a week after Shanghai police said Yao had been detained on July 13 on suspicion of “illegally absorbing public funds”, without elaborating, in a statement last Saturday.
Qudian Tries to Distance Itself from Other P2P Lenders (Capital Watch), Rated: A
Qudian Inc. (NYSE: QD) defended its business model Friday, saying that it is not undergoing the same “[volatility] and uncertainty” suffered by China’s broader peer-to-peer industry.
The announcement sent the company’s stock up nearly 5 percent mid-afternoon to $7.59 per American depositary share.
China lends trillions to SMEs, farmers as part of inclusive finance push (Global Times), Rated: A
For example, banks’ balance of loans to farmers stood at 30.95 trillion yuan ($4.53 trillion) as of the end of 2017, up 48.2 percent from 2013. The balance of lending to small and micro-sized businesses stood at 34.74 trillion yuan in 2017, up 73.1 percent from 2013, according to Feng.
€10m loans mark record quarter for Linked Finance (Independent), Rated: AAA
Linked Finance, an Irish peer-to-peer (P2P) lending platform, recorded its strongest quarter to date in the three months to the end of June, facilitating over €10.1m to Irish SMEs.
This followed on from a strong start to 2018, with total lending for the year now more than €18.7m, up 65pc on the same period in the previous year.
The increase in lending is down to both the volume and size of loans. The number of loans that went live on the platform rose by 39pc in the period to 335, with average loan size up 19pc to almost €56,000.
BANCO BNI EUROPA LAUNCHES EQUITY RELEASE IN SPAIN WITH ÓPTIMA MAYORES (Fintech.Finance), Rated: A
Banco BNI Europa launches equity release in Spain in partnership with Óptima Mayores, the Spain’s leading financial advisor specialized in this segment.
Altisource Names Justin Vedder as Chief Operating Officer of Origination Solutions (Altisource), Rated: B
Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a leading provider of services and technologies to the mortgage and real estate industries, today announced the appointment of Justin Vedder as Chief Operating Officer, Origination Solutions.
How Fintex Capital Enabled the $ 30M Banco BNI Europa Investment in Upgrade Loans (Lend Academy), Rated: AAA
In reality BNI Europa did not actually purchase Upgrade loans, they invested in a privately placed bond that was backed by Upgrade loans. This bond was issued by Fintex Capital.
Regulations Shrink India’s Peer-To-Peer Lending Industry (Bloomberg Quint), Rated: AAA
When the Reserve Bank of India first brought out a discussion paper on peer-to-peer lending in April 2016, it said that there were 30 such start-ups in the country. It then proceeded to fashion a set of rules for the nascent but fast growing sector and came out with regulations in October 2017. Key among them was a requirement that peer-to-peer lenders register with the RBI.
Nine months since, only five of these lenders are registered in the ‘NBFC-P2P’ category, according to RBI data available until June 30, 2018.
- Fairassets Technologies India Pvt. Ltd.
- Fincquare Fintech Pvt. Ltd.
- Bridge Fintech Solutions Pvt. Ltd.
- Bigwin Infotech Pvt. Ltd.
- OHMY Technologies Pvt. Ltd.
Cashkumar foresees huge potential in online lending for short-term credit (The Hindu Business Line), Rated: A
Peer-to-peer (P2P) lending company Cashkumar, which offers short-term credit to borrowers, foresees huge potential to lend in the online space.
At present, the company services around 200 loans a month . It is targeting to service about 80 loans a day in the next six months, besides expanding operations to 20 cities by next year.
Japan’s Samurai Asset Finance Offers Loans Collateralized by Digital Assets (Bitcoin Exchange Guide), Rated: A
A Japanese firm listed on the Tokyo Stock Exchange recently unveiled loans that can be collateralized by three digital assets, namely Bitcoin, Bitcoin Cash and Ethereum. As of now, the maximum amount borrowable is capped at 300 million yen (approximately $2.7 million).
Currently, the loan limits range from a minimum of 20 million yen ($180,000) to a maximum of 300 million yen ($2.7 million). The default repayment period is twelve months, although there are provision for extensions. The interest rates for these loans start from 7% to 155 annually, inclusive of commissions and extensions charges. If a lender fails to repay the loan in time, they will liable to a delinquency charge of 20% per year.
Crypto for real estate (Business Times), Rated: A
WE believe, in time, all real estate assets will reside on the blockchain – this is the grand vision of real estate entrepreneurs Julian Kwan and Alice Chen. The married couple – who co-founded Singapore-based real estate crowdfunding platform InvestaCrowd – has created a new product: RealFuel,
IMDEX ICO (IMDX Token): Decentralized Exchange & Crypto Banking Platform? (Bitcoin Exchange Guide), Rated: B
It’s difficult to ascertain much information about the people behind IMDEX. The company appears to have some connection to a Korean company called Techton Soft that was established in 2016. The Techton Soft website indicates that the company specializes in investment trading solutions, peer-to-peer lending, artificial intelligence, and cryptocurrency exchange. The Techton site states that the company has 10 employees, making it a rather small operation, and lists a man named SangHyun Kim as the CEO.
News Comments Today’s main news: What SoFi pays for prime customer acquisition. Funding Circle investors lent over 113M GBP in February. Landbay hit 100M GBP lending milestone. Atom Bank secures 149M GBP, BBVA ups stakes. Today’s main analysis: LendingTree personal loan offers report – February 2018. Americans owe more than $1T in credit card debt. Today’s thought-provoking articles: Americans […]
- Today’s main news: What SoFi pays for prime customer acquisition. Funding Circle investors lent over 113M GBP in February. Landbay hit 100M GBP lending milestone. Atom Bank secures 149M GBP, BBVA ups stakes.
- Today’s main analysis: LendingTree personal loan offers report – February 2018. Americans owe more than $1T in credit card debt.
- Today’s thought-provoking articles: Americans owe more than $1T in credit card debt. Is the credit market developing a new and better culture? Africa’s banks lag behind on financial services innovation.
- SoFi pays tops dollar for prime customer acquisition. AT: “It’s amazing they turned a profit last year considering the scandal that arose at the end of the year and the amount of money they spent on acquiring new prime customers. It will be interesting to see what this year looks like.”
- Judge shocked by LendingClub’s attorney expenses.
- LendingTree personal loan offers report for February 2018. AT: “The reasons consumers are seeking personal loans still continues to be debt consolidation and credit card refinancing. Once all of this debt is refinanced, where will the personal loan origination numbers shift to then?”
- Credit card debt study. AT: “Americans owe more credit card debt than ever before. I would suspect that this number should start declining within the next 10 years since millennials aren’t too keen on credit cards.”
- What alt lenders, digital bankers say about Amazon being a bank. AT: “There’s no reason to fear Amazon, or any other big tech company, becoming a bank or offering banking services. Many of the neobanks and alt lending companies servicing customers are aiming at a different market than Amazon would aim for.”
- Small-bank contract negotiators expand from core systems to fintech.
- Catholic church offers payday loan alternatives.
- Will this be the year the mortgage industry crosses the digital divide?
- HomeUnion launches tool to determine home values as investment properties. AT: “A great idea.”
- Qualia raises $33M.
- BBX Capital reports 2017 results.
- Three equity crowdfunding platforms to try.
- Lendio opens franchise in Gainseville-Ocala area.
- Job benefits to cover student loans are important, says LendEDU study.
- EnTrustPermal launches private debt investment platform.
- PeerStreet hires commercial real estate team leader.
- Elevate named LendIt Fintech Financial Inclusion Award finalist.
- Landbay lends 100M GBP. AT: “Congratulations.”
- Funding Circle investors lent over 113M GBP in February. AT: “Another great achievement. Congratulations.”
- Atom Bank secures 149M GBP fund raise. AT: “Congrats.”
- Augmentum exceeds crowdfunding target.
- LendInvest funds 5.5M GBP development in Glaswegian.
- Albrate looking at buying Collateral loan book. AT: “Somebody’s going to end up acquiring this.”
- LATTICE80 opens global HQ in London.
- Business borrowers should think outside the bank.
- Housers partners wtih Redpiso.
- EU’s action plan on fintech and crowdfunding.
- Is the credit market developing new and better culture?
- Digital consumer lending strategies, tech for innovation.
- Finastra partners with Microsoft on financial services software.
- United States
- SoFi Is Paying Top Dollar To Acquire Its Prime Customers (Fast Company), Rated: AAA
- Judge ‘Shocked’ By $ 16M Atty Fee Bid In LendingClub Deal, (Law 360), Rated: A
- LendingTree Personal Loan Offers Report – February 2018 (LendingTree), Rated: AAA
- Credit Card Debt Study: Trends & Insights (WalletHub), Rated: AAA
- Fintechs on Bank of Amazon: It’d be a net plus (American Banker), Rated: A
- Small-bank contract negotiators expand from core systems to fintech (American Banker), Rated: B
- St. Vincent de Paul Society’s alternative to payday loans (The Arlington Catholic Herald), Rated: A
- Will 2018 Be the Year the Mortgage Industry Finally Bridges the Digital Divide? (JD Power Email), Rated: A
- HomeUnion Launches Investimate to Determine a Home’s Value as an Investment Property (Business Wire), Rated: A
- Real estate tech company Qualia closes $ 33M Series B (Bankless Times), Rated: A
- BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2017 (MarketWired), Rated: A
- Three equity crowdfunding platforms you should consider (Born2Invest), Rated: A
- Lendio adds Gainesville-Ocala franchise (Bankless Times), Rated: B
- HR Buzz: March Madness, Taxes and Mobility, Disappointing HiPos (Bloomberg), Rated: B
- EnTrustPermal Expands Alternative Investment Capabilities With Dedicated Aviation Financing Team (PRNewswire), Rated: B
- Commercial Real Estate Veteran Joins PeerStreet to Lead Commercial Real Estate Team (BusinessWire), Rated: B
- Elevate Named as Finalist for LendIt Fintech 2018’s Financial Inclusion Award (Business Wire), Rated: B
- United Kingdom
- Landbay Milestone: Hits £100 Million in Lending (Crowd Fund Insider), Rated: AAA
- Funding Circle Investors Lent More Than £113 Million to Over 1,700 UK Businesses in February 2018 (Crowdfund Insider), Rated: AAA
- Woodford-backed Atom Bank grabs £149m as Spanish bank BBVA ups its stake (City A.M.), Rated: AAA
- Augmentum’s fintech fund exceeds crowdfunding target to raise £695,000 (Peer2Peer Finance News). Rated: A
- LendInvest Funds £5.5 million Development Deal on Historical Glaswegian Location (CrowdFund Insider), Rated: A
- Ablrate considers buying Collateral’s loan book (Peer2Peer Finance News), Rated: A
- LATTICE80 opens New Global Headquarters in London (LATTICE80), Rated: B
- European Union
- Business Borrowers Should Think Outside the Bank (Payments Journal), Rated: A
- Real estate crowdfunding company Housers teams up with Redpiso (PropertyPortalWatch), Rated A
- Capital Markets Union (European Commission), Rated: B
- Is a new and better culture evolving in the credit market? (AltFi), Rated: AAA
- Meeting the Fintech Challenge in Digital Consumer Lending: Strategies and Technologies for Innovation (Celent), Rated: A
- Finastra, Microsoft form strategic alliance to shape future of financial services software (RealWire), Rated: A
- This husband-wife duo makes AnyTimeLoan a reality (Your Story), Rated: AAA
- Africa’s banks lag behind on innovation in financial services (Financial Times), Rated: AAA
SoFi Is Paying Top Dollar To Acquire Its Prime Customers (Fast Company), Rated: AAA
Last year, even as a sex scandal engulfed the six-year-old company, SoFi originated $12.9 billion in loans, added 225,000 customers, and turned a profit.
All told, SoFi spent $170 million on marketing in 2017, or $756 to acquire each new customer, according to data obtained by Fast Company and confirmed by the company. This year, SoFi plans to spend $200 million.
Other online lenders targeting prime borrowers, like Lending Club and Prosper, typically spend $350-$450 to acquire each customer, industry experts say.
Judge ‘Shocked’ By $ 16M Atty Fee Bid In LendingClub Deal, (Law 360), Rated: A
A California federal judge said he was “shocked” attorneys want $16 million for representing LendingClub Corp. investors in two securities class actions against the peer-to-peer lending company, telling the plaintiffs’ lawyers at a hearing Thursday they “may be being greedy” by asking for that much of the $125 million settlement.
LendingTree Personal Loan Offers Report – February 2018 (LendingTree), Rated: AAA
Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.44% in February.
- The average best APR offered to all borrowers with credit scores of 760 or above was 7.44%, an increase of 3 basis points from the prior month, but down 19 basis points from the same period one year ago.
- At $23,689, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above was down 2.23% ($528) from January, but up over 21.44% ($5,078) from the same period one year ago.
- The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 4.97% on average, and loan amounts of $33,050. A borrower with this APR and loan amount would save $2,748 by consolidating debt with a 10% APR over a three-year term.
Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.69% in February.
- The average best APR for all borrowers with credit scores of 680 – 719 was 15.69%, down 10 basis points from last month, but up almost 126 basis points from a year earlier.
- At $16,272, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by almost 4% ($644) in the last month and by almost 5% ($795) from February 2017.
- The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 6.75%, offered with an average loan amount of $24,484. A borrower with this APR and loan amount would save $3,440 by consolidating debt from a 15% APR over a three-year term.
Credit Card Debt Study: Trends & Insights (WalletHub), Rated: AAA
Americans now owe more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record $92.2 billion to our tab in 2017. Only four times in the past 30 years have we spent so much in a year. And in each of those prior cases, the charge-off rate – currently hovering near historical lows – rose the following year.
The $67.6 billion in credit card debt that we added in Q4 2017 is the highest quarterly accumulation in the last 30 years – 68% higher than the post-Great Recession average.
Fintechs on Bank of Amazon: It’d be a net plus (American Banker), Rated: A
When Chris Britt, founder and CEO of the challenger bank Chime, heard that
Brett King — founder of Moven, which is on its way to becoming a U.S. challenger bank — had a similar reaction.
“I’m frankly surprised it took them this long, given Alibaba’s massive success with Yue Bao,” he said, referring to the money market fund the online retailer formed that now has more than 370 million investors.
Kathryn Petralia, co-founder and president of the small-business lending fintech Kabbage, also liked the idea of Amazon offering checking with a large bank partner.
“It made perfect sense to me,” she said. “It seems like Amazon is doing this to enhance the customer experience, and they have a really strong focus on customer experience and customer service.”
Kabbage already competes with Amazon for small-business loans. Amazon began making loans of $1,000 to $750,000 in 2011. Last June, the company said it had issued more than $1 billion in loans during the previous 12 months and $1.5 billion in loans in the four years prior. Kabbage has made $4 billion in loans since it started in 2009.
Small-bank contract negotiators expand from core systems to fintech (American Banker), Rated: B
The consulting firm Paladin fs announced on Tuesday that Alex Lopatine, who founded the cloud-based core systems provider Nymbus, will be the managing director of its new “FinTech Advantage,” a unit dedicated to helping banks buy financial technology “needed to remain competitive and successful in the fast-evolving industry,” according to a press release.
St. Vincent de Paul Society’s alternative to payday loans (The Arlington Catholic Herald), Rated: A
In 2014, the Arlington District Council of St. Vincent de Paul Society began looking into the issue. In February, the group launched the Alternative Loan Program. People who qualify will be eligible for a loan of up to $1,000 to escape debt due to a payday loan. For people who need help with housing utilities, or medical bills, “we’ll still administer our assistance program,” said George Degnon, chairman of the loan committee.
To help run the program, the council partnered with Apple Federal Credit Union, which has several branches around Northern Virginia. “(The society) will maintain deposits at Apple Federal to serve as security for loans to borrowers whom the society recommends,” the group said in a press release. An interest rate of 3.1 percent will be retained by Apple Federal to cover administrative costs of the program.
Borrowers are required to take a budgeting class before qualifying for a loan, and can repay at a rate of just $25 a month, said Degnon.
Will 2018 Be the Year the Mortgage Industry Finally Bridges the Digital Divide? (JD Power Email), Rated: A
It should come as little surprise to those familiar with the mortgage industry that attendees at the recent Mortgage Bankers Association Annual Servicing Conference overwhelmingly selected Technology & Innovation when asked what their priorities were for 2018.
Digital Interaction Improves Mortgage Customer Satisfaction
For the first time, the 2017 J.D. Power U.S. Primary Mortgage Origination StudySM found both refinance and purchase customers cite online/website as the most frequent method of submitting a mortgage application. A total of 43% of mortgage customers report applying digitally in 2017, up from just 28% in 2016. Customers applying digitally also report substantially higher overall satisfaction with the mortgage origination process.
Still Need a Human Touch – Balancing Self-Service with Live Support Presents Challenges
The J.D. Power 2017 U.S. Retail Banking Satisfaction Study was the first to introduce
the idea of the “rise of the retail banking omnivore,” a financial services consumer that flips seamlessly through multiple interaction channels. Specifically, the study found that more customers than ever are using mobile banking (49% of Millennials, 31% of Gen X and 16% of Boomers). Despite this widespread adoption of the digital channel, 71% of all bank customers visited the branch an average of 14 times over the past year. Among Millennials, 71% used the branch, averaging 11 visits in the past year.
View the full report here.
HomeUnion Launches Investimate to Determine a Home’s Value as an Investment Property (Business Wire), Rated: A
HomeUnion, the leader in online residential real estate investing, has launched Investimate, a tool that enables consumers to see the potential value of a house as an investment using AI and machine learning. Investimate predicts a property’s investment value by estimating three factors: its price, rent, and operating expenses. Investimate is powered by big data on 110 million homes, institutional-quality research and on-the-ground experts with deep insight into local real estate market conditions.
With the launch of Investimate, HomeUnion is the only website that forecasts the performance of residential properties over a period of 15 years. After entering the address of a house, a consumer views comprehensive information on that property, including yields, appreciation and total returns. HomeUnion’s Investimate also displays in-depth information about the physical characteristics of each property, surrounding neighborhoods, historic price and rent trends, sales comps and other detailed information.
Real estate tech company Qualia closes $ 33M Series B (Bankless Times), Rated: A
Qualia, a real estate technology company streamlining the home closing process, today announced the closing of a $33M Series B led by Menlo Ventures with participation from 8VC, Bienville Capital, and Barry Sternlicht. With this new capital, Qualia will expand its engineering and product teams and accelerate their growth into additional markets across the U.S.
BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2017 (MarketWired), Rated: A
Fourth Quarter 2017 Compared to Fourth Quarter 2016:
- Total consolidated revenues of $214.7 million vs. $198.5 million, an increase of 8.2%
- Net income attributable to shareholders of $44.0 million vs. $4.9 million
- Diluted earnings per share of $0.43 vs. $0.05
- Benefit for income taxes of $37.3 million vs. a provision for income taxes of $12.5 million due to a decrease in net deferred tax liabilities as a result of the enactment of the Tax Cuts and Jobs Act (2)
- Free cash flow of $19.6 million vs. $16.0 million (1)
Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016:
- Total consolidated revenues of $815.8 million vs. $767.3 million, an increase of 6.3%
- Net income attributable to shareholders of $82.2 million vs. $28.4 million
- Diluted earnings per share of $0.79 vs. $0.32
- Benefit for income taxes of $7.2 million vs. a provision for income taxes of $36.4 million primarily due to a decrease in net deferred tax liabilities (2)
- Free cash flow of $43.6 million vs. $68.2 million (1)
Balance Sheet as of December 31, 2017 Compared to December 31, 2016:
- Total consolidated assets of $1.6 billion vs. $1.4 billion
- Total shareholders’ equity of $573.2 million vs. $454.6 million
- Fully diluted book value per share of $5.52 vs. $4.22
Three equity crowdfunding platforms you should consider (Born2Invest), Rated: A
Founded in 2007, Indiegogo remains to be one of the most popular and easy-to-access crowdfunding platforms to date. The website is home to countless crowdfunding projects, most of which are gadgets and technological innovations. Some of the successful campaigns out of Indiegogo are the ONAGOfly smart drone, Sondors THIN electric bike, and popSLATE2, which serves as a second screen for iPhones.
Other than a huge selection of startups to invest on, Indiegogo is also one of the few crowdfunding platforms that provide initial coin offerings (ICO) for new cryptocurrencies, according to Black Enterprise.
The minimum investment to be made at SeedInvest is $500. Also, since the projects on the website are highly vetted and promising, chances of success are bigger. The platform offers a customizable auto invest program that allows people to diversify their investments in up to 25 startups as well.
For New Yorkers, StraightUp is going to be of great help. Coming straight out of the incubation of HAP Ventures, the company carries a deep knowledge of property crowdfunding and The Big Apple’s real estate market.
What StraightUp does differently from other competitors in its field is that it invests along with its clients. Whatever project their client finds interesting, StraightUp also supports by being a part of its crowdfunding. In doing so, the interest between StraightUp and its clients are in line with each other.
Lendio adds Gainesville-Ocala franchise (Bankless Times), Rated: B
Small business loan marketplace Lendio today announced the opening of a new Lendio franchise in the Gainesville-Ocala, Florida region. Through the Lendio franchise program, Luis Salazar will help local businesses in the community apply for loans, review their options and secure funding, easing the financial hurdles for small business owners.
Lendio is an online service helping business owners find the working capital they need to grow their business through the company’s network of more than 75 lenders. Funding options include SBA loans, startup loans, equipment loans, and commercial real estate loans. In the last fiscal year alone, Lendio facilitated more than $300 million in funding.
HR Buzz: March Madness, Taxes and Mobility, Disappointing HiPos (Bloomberg), Rated: B
More than seven in 10 (71.4 percent) student debtors consider benefits covering their loans to be an important or very important factor when pondering job offers, a survey commissioned by student loan consolidation and refinancing service LendEDU and online lender Laurel Road found.
More than half (53.1 percent) would stay in a job they disliked if it was helping them pay off their student debt, and 58.4 percent would take a loan repayment benefit instead of additional vacation days. The survey was done Feb. 8-9 among 1,000 student borrowers who graduated between 2012 and 2017.
EnTrustPermal Expands Alternative Investment Capabilities With Dedicated Aviation Financing Team (PRNewswire), Rated: B
EnTrustPermal, a global alternative asset manager, today announced the expansion of its private debt opportunities investment platform with the addition of John Morabito, a veteran aviation investor from the CIT Group. EnTrustPermal’s private debt opportunities capabilities now include direct leasing and financing vehicles in the maritime and aviation industries.
Commercial Real Estate Veteran Joins PeerStreet to Lead Commercial Real Estate Team (BusinessWire), Rated: B
PeerStreet is excited to announce the appointment of Greg Galusha as Head of Commercial Real Estate. He will be based in the firm’s headquarters in Los Angeles, California.
Galusha is responsible for leading PeerStreet’s growing commercial real estate division, which will help PeerStreet expand and enhance the current spectrum of commercial real estate investments offered through its marketplace.
Elevate Named as Finalist for LendIt Fintech 2018’s Financial Inclusion Award (Business Wire), Rated: B
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2018. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.
Landbay Milestone: Hits £100 Million in Lending (Crowd Fund Insider), Rated: AAA
UK-based peer-to-peer lender Landbay announced this week it has hit its £100 million in lending milestone. The online lending platform achieved its half-way point in lending this past September and revealed that since then momentum has accelerated to result in near-on double of lending volumes in just six months. The lender also noted that the amount to more than £4 million in interest was earned by its investors from loans originated by its platform.
Landbay also confirmed that while lending volumes are always increasing, its focus remains on ensuring that all the lending it does is responsible and it is proud to affirm that its track-record of zero defaults or arrears is still intact.
Founded in 2013, Landbay describes itself as a fast-growing UK peer-to-peer lending platform that enables retail investors, institutions, and local governments to invest in UK’s private rented sector through the funding of residential buy-to-let mortgages.
Landbay is fully authorized and regulated by the FCA, but peer-to-peer lending platforms are not covered by the FSCS. Since its founding, Landbay has launched six other Seedrs campaigns, with the previous initiative attracting more than £1.6 million, which includes an investment from tennis star, Andy Murray.
Funding Circle Investors Lent More Than £113 Million to Over 1,700 UK Businesses in February 2018 (Crowdfund Insider), Rated: AAA
On Wednesday, online lender Funding Circle announced investors lent more than £113 million to over 1,700 UK businesses throughout the month of February. Funding Circle also reported that over the last six months investors have helped more than 10,200 small businesses be able to gain access to financing. More than 678 million has been lent through its platform from August 2017 to February 2018. Breakdowns of February 2018 included the following:
Woodford-backed Atom Bank grabs £149m as Spanish bank BBVA ups its stake (City A.M.), Rated: AAA
Challenger bank Atom, which counts rapper Will.i.am as a board adviser, has today grabbed £149m in its latest capital raising.
BBVA, which invested £85.4m and has ploughed in a total of £167m so far, upped its stake to 39 per cent and said the new investment signalled its “confidence in both the business strategy and management team”.
Augmentum’s fintech fund exceeds crowdfunding target to raise £695,000 (Peer2Peer Finance News). Rated: A
A VENTURE capital firm that has a stake in Zopa has breezed through its crowdfunding target to hit £695,000 before closing to new investments, and now looks set to raise £100m from a London flotation.
The initial £500,000 crowdfunding target was hit within 24 hours.
LendInvest Funds £5.5 million Development Deal on Historical Glaswegian Location (CrowdFund Insider), Rated: A
Ablrate considers buying Collateral’s loan book (Peer2Peer Finance News), Rated: A
BUSINESS lender Ablrate is considering buying the loan book of Collateral, the peer-to-peer lending platform that recently went into administration.
Ablrate’s chief executive David Bradley-Ward said he has contacted Collateral’s administrators to find out how it can help.
LATTICE80 opens New Global Headquarters in London (LATTICE80), Rated: B
Global Fintech Hub LATTICE80 strategically relocates its global headquarters from Singapore to London.
LATTICE80 announced its plan to expand into several cities globally including London, New York and Seoul. By relocating its global hub to London, it can better support its global expansion plans in Europe, Asia and US this year. LATTICE80 will still keep the operations in Singapore to cover Southeast Asia.
Business Borrowers Should Think Outside the Bank (Payments Journal), Rated: A
Peer-to-Peer lending for small businesses is not new, as those of us on this side of the pond can recall from Lending Club and Prosper, and surely not without lender risk. One of the points made in this piece is that SMEs in Scotland account for ‘more than half’ of all private sector employment. This is not dissimilar to the world in general, although SME definitions vary widely. In the U.S. for example, there are about 102 million people employed and we would estimate that roughly 60% work for businesses with less than 100 employees. Among these are about 24 million businesses with no employees (sole-proprietors).
They key to this business space however is to help fill a liquidity gap in the market that banks are either unwilling or unable to accommodate, given capital regulations, asset risk ratings, liquidity ratios and so forth.
Real estate crowdfunding company Housers teams up with Redpiso (PropertyPortalWatch), Rated A
Capital Markets Union (European Commission), Rated: B
Commission presents Action Plans on sustainable finance and financial technology and adopts legislative proposal on crowdfunding
Action Plan on Financial Technology
The Action Plan sets out 23 steps to enable innovative business models to scale up, support the uptake of new technologies, increase cybersecurity and the integrity of the financial system.
Legislative proposal on crowdfunding
The Commission also put forward new rules that will help crowdfunding platforms to grow across the EU’s single market.
Is a new and better culture evolving in the credit market? (AltFi), Rated: AAA
The promise of direct lending 2.0
The fastest-growing and potentially huge segment of private credit is being brought about by tech and data powered lending platforms – Direct Lending 2.0. These groups have evolved from their P2P roots. Business models are being re-examined, which is healthy. Several, such as Auxmoney, Funding Circle and Lending Club are now large originators and servicers of SME and consumer credits direct for institutional investors. Just one UK-based platform lender originating SME credits of around 100,000 Euros per clip made more loans of that size to UK companies than the entire UK banking system managed in Q4. This potentially vast capital market has the potential to be a sustainable alternative to the banking system.
The arrival of credit culture 2.0?
In this context it was interesting to see Patty McCord, world-beating Netflix’s ‘Chief Talent Officer’ (we don’t see many of those in the credit market) recently join Lending Club.
Meeting the Fintech Challenge in Digital Consumer Lending: Strategies and Technologies for Innovation (Celent), Rated: A
Digital lending is not limited to fintechs; banks and credit unions have many strengths which, when combined with digital technology, will enable them to thrive long after the Fintech Era ends.
Finastra, Microsoft form strategic alliance to shape future of financial services software (RealWire), Rated: A
Finastra and Microsoft have formed a strategic alliance to deliver secure, flexible and cost effective financial services cloud solutions. As part of the alliance, Microsoft Azure, Microsoft’s enterprise-ready trusted cloud platform, will underpin FusionFabric.cloud as Finastra’s strategic cloud platform. In addition, Finastra will launch a selection of its global payments and retail banking products on Azure over the course of this year.
This husband-wife duo makes AnyTimeLoan a reality (Your Story), Rated: AAA
Keerthi is an engineering graduate and an alumnus of IIM and ISB with over 14 years of experience across financial service and infrastructure sectors. He co-founded the AnyTimeLoan along with his wife Neha Jain, 32, who is a Chartered Accountant by profession and has over nine years of experience in taxation, compliance, and audit. She was associated as Partner in a CA firm before she took over ATL as co-founder wherein she handles entire finance, compliance, etc.
ATL has also applied to the RBI and is in the process of seeking NBFC P2P license.
For the financial year 2017-18, it is clocking revenues worth Rs 300 lakh, with total loans disbursed around Rs 39.8 crores. It also claims to have a default rate of less than 0.23 percent.
Africa’s banks lag behind on innovation in financial services (Financial Times), Rated: AAA
African central banks are stifling development by failing to keep up with financial services innovation, according to the head of a UN economic agency and industry executives.
Penetration of mobile money is more than 90 per cent in countries such as Kenya, where Safaricom, a telecoms provider, developed the Mpesa platform in 2007. But it is only 1 per cent in Nigeria.
Meanwhile, some central banks, such as in Tanzania, allowed innovations such as payments between different telecoms operators three years ago while others still ban them.
Many financial services companies, such as mobile-based micro-loan companies, have escaped formal regulation in most African countries as central banks and telecoms regulators struggle to categorise them.
News Comments Today’s main news: Virgin Money to launch a challenger bank. Equifax partners with Entersekt on digital ID authentication. 1st loan originator in UK joins Mintos. Citi drops $75M into Pagaya. IOU Financial extends Midcap credit facility. Today’s main analysis: Global fintech VC investment sets new record. Global marketplace lending investment in 2017. Today’s thought-provoking articles: Goldman Sachs’ plan […]
- Today’s main news: Virgin Money to launch a challenger bank. Equifax partners with Entersekt on digital ID authentication. 1st loan originator in UK joins Mintos. Citi drops $75M into Pagaya. IOU Financial extends Midcap credit facility.
- Today’s main analysis: Global fintech VC investment sets new record. Global marketplace lending investment in 2017.
- Today’s thought-provoking articles: Goldman Sachs’ plan to become a local bank. Digital experiences factor into life’s most important financial decisions.
- How Goldman Sachs plans to become a local bank. AT: “Goldman has made no secret of its plans. Ever since rolling out Marcus, the elite financial advisor has moved closer to Main Street, and it is only getting closer.”
- The best place to open a small business.
- Digital experiences factor into important financial decisions. AT: “This trend is growing. Digital experiences will likely some day factor into all of life’s most important decisions.”
- Banks are striving to strengthen fintech partnerships.
- Alt lenders need bank partnerships to thrive.
- Varo Money discusses bank fees in marketing.
- Predictive analytics coming to banking apps.
- Bank of America getting aggressive with branch expansion. AT: “I’m sure this is based on recent surveys that indicate consumers still want to speak to a person and visit a bank branch. What will happen if consumer sentiment changes to indicate they don’t want to visit a branch?”
- Don’t write off bank branches yet.
- Fintech charter hopes rest with new FDIC board.
- Can mortgage crowdfunding make homes more affordable?
- How real estate crowdfunding impacts taxes. AT: “Very basic.”
- PeerStreet named a finalist in LendIt Fintech awards.
- PawnGuru raises $2.5M.
- 5 financial mistakes startups make.
- The international student lending ecosystem in the U.S.
- A new student loan calculator.
- Virgin Money to launch a challenger bank. AT: “I suspect we’ll see more challenger banks, and at some point, it will no longer be news. I’d like see more challenger bank launches in the U.S.”
- Amigo Loans hires JP Morgan, RBC Capital Markets to prepare IPO.
- 1PM joins Mintos.
- Banks ordered to help people pay off credit card debt.
- Equifax partners with South African digital ID verifier.
- Citi injects $75M debt financing into Pagaya.
- Global fintech VC investment sets new record.
- Marketplace lending equity investments look good in 2017.
- Creditcoin turns digital wallets into investment market.
- Allianz co-leads funding round for C2FO.
- United States
- Goldman Sachs, Adviser to the Elite, Wants to Be Your Local Bank (WSJ), Rated: AAA
- Where’s the best place to open a small business? (The Sacramento Bee), Rated: A
- Fiserv Consumer Survey Finds Digital Experiences Factor in Life’s Most Important Financial Decisions (BusinessWire), Rated: AAA
- As online lending grows up, banks work to strengthen partnerships (Tearsheet), Rated: A
- Fintech Startups Need Industry Partners to Thrive, Report Says (Bloomberg), Rated: B
- Varo Money is bringing bank fees and financial health into its marketing (Tearsheet), Rated: A
- Coming to your banking app soon: Predictive analytics (Bankrate), Rated: A
- B of A is latest big bank to announce aggressive branch expansion (American Banker), Rated: A
- Don’t write off branch banking yet, says KeyBank Colorado exec (Denver Business Journal), Rated: B
- Fintechs’ charter hopes may lie with new FDIC board (American Banker), Rated: A
- Can Crowdfunding Mortgage Down Payments Make Homes Affordable? (SavingAdvice), Rated: A
- HOW INVESTING IN CROWDFUNDED REAL ESTATE IMPACTS YOUR TAXES (The College Investor), Rated: A
- PeerStreet Named a Finalist in Top Real Estate Platform Category in the Second Annual LendIt Fintech Industry Awards Competition (BusinessWire), Rated: B
- PawnGuru pulls in $ 2.5 mln Series A (PE Hub), Rated: A
- 5 Financial Mistakes That Push Striving Startups Into Bankruptcy (Newsmax), Rated: A
- Understanding the International Student Lending Ecosystem in the U.S. (Lend Academy), Rated: A
- Navigate your student-loan maze with this Philly-made calculator (Technical.ly), Rated: B
- United Kingdom
- U.K.’s Virgin Money to Launch Digital Challenger Bank (Bank Innovation), Rated: AAA
- Amigo Loans hires JP Morgan and RBC to prepare 500 million pound London IPO (Reuters), Rate: AAA
- 1PM Joins Online Business Loan Marketplace For Retail Investors Mintos (London South East), Rated: AAA
- British banks ordered to help people pay off credit card debts (Reuters), Rated: A
- European Union
- MIFID II aids RoboAdvice (AltFi), Rated: A
- Equifax is partnering with a digital ID verification company (Business Insider), Rated: AAA
- Fintech Pagaya Receives $ 75 Million in Debt Financing from Citi (Crowdfund Insider), Rated: AAA
- Global Venture Capital Investment in Fintech Industry Set Record in 2017, Accenture Analysis Finds (BusinessWire), Rated: AAA
- P2P and marketplace lending equity investments recover in 2017 to set new record (AltFi), Rated: AAA
- Creditcoin Turns Digital Wallets into an Investment Market (Coinspeaker), Rated: A
- Allianz Investment Arm Co-Leads Funding Round in Fintech C2FO (Bloomberg), Rated: B
- MSTS Taps World Fuel VP As Head Of Business Development For APAC (Payment Week), Rated: B
- Fintech business lenders to self-regulate (Financial Review), Rated: AAA
- Extending access to credit: Are alternate finance platforms creating tangible impact? (ET Rise), Rated: A
- Equity crowdfunding in Japan poised to grow fivefold this year (Asian Review), Rated: AAA
- Indonesia’s P2P firm UangTeman likely to raise up to $20m Series B (Deal Street Asia), Rated: A
- IOU Financial Extends Credit Facility with Midcap Financial (Cision), Rated: AAA
Goldman Sachs, Adviser to the Elite, Wants to Be Your Local Bank (WSJ), Rated: AAA
In a glass-walled tower in Utah’s capital, hundreds of Goldman employees are building what amounts to one of the world’s most ambitious consumer-finance startups.
Their address, 111 Main St., stands as a symbol of the changes afoot inside the firm, better known as an elite adviser to big companies and billionaires. Struggling to make money in the postcrisis world, Goldman is pushing into businesses it once dismissed as pedestrian and gimmicky, assembling a suite of banking products for the middle class it hopes will power growth.
Goldman 18 months ago began making online loans of a few thousand dollars under the brand Marcus, named after founder Marcus Goldman. Individuals once needed $10 million to get the attention of Goldman’s elite private bankers. Today, customers can open a Marcus savings account with as little as $1.
Where’s the best place to open a small business? (The Sacramento Bee), Rated: A
LendingTree said Sacramento ascended to the top of the list in a study that included data from more 80,000 queries submitted by new small business owners seeking loan offers through LendingTree’s small business loan marketplace to determine where businesses tend to do the best.
Sacramento was one of three California cities on the 10-best list, joining Fresno at ninth and Los Angeles at 10th. Following Sacramento on the list were Grand Rapids, Mich; Portland, Ore.; Knoxville, Tenn.; Denver; Seattle; Tulsa, Okla; Albuquerque, N.M.; Fresno; Los Angeles; and Oklahoma City, respectively. Los Angeles and Oklahoma City tied for 10th.
Cincinnati topped the list of the 10 worst cities to start a new small business. No California cities were on the 10-worst list.
Fiserv Consumer Survey Finds Digital Experiences Factor in Life’s Most Important Financial Decisions (BusinessWire), Rated: AAA
For instance, four of the top five loan payment methods are now electronic, and 21 percent of millennial investors use a robo-advisor service to make investments.
Affluent Consumers and Financial Advice
Human interactions remain an important part of financial advice, especially for the 34 percent of consumers with at least $100,000 in household investable assets. Fifty-eight percent of these affluent consumers work with a financial advisor. Among those without an advisor, only 11 percent report high interest (8-10 on a scale of 0-10) in using one. At the same time, 32 percent of affluent consumers who invest their own money grade their knowledge and expertise as a “C” or lower, suggesting an opportunity to bridge the gap with a hybrid of human and digital advice.
Among all consumers who invest on their own, only 8 percent use a robo-advisor service. However, use of such a service is much more likely among millennials (21 percent) and urban consumers (18 percent).
Rates, Fees and Service Prevail
Topping the list of selection factors among those with at least one loan are interest rates (83 percent) and low fees/service charges (83 percent), followed by customer service (75 percent), company reputation (70 percent), and knowledge of staff (65 percent). Sixty-five percent of consumers say prior experience with a lender is important.
Many consumers expressed willingness to try new ways of interacting with their lender, if there’s a benefit. For instance, if it makes the loan process faster, more than half of consumers would be willing to use a mobile device to e-sign loan documents (56 percent), take and upload photos of loan documents (54 percent), and verify their identity with a photo (51 percent). Forty-two percent of consumers indicate they would be willing to provide access to their financial information by providing their credentials to other online banking applications, up from 32 percent in 2016.
Digital channels, especially mobile, are now leading ways of communicating with a lender, although context matters based on the interaction. A lender’s mobile app is the preferred way to check when a next loan payment is due (21 percent), check the balance term (20 percent) and request a payoff (17 percent), among consumers who have conducted each of these activities in the past six months. For account questions, consumers significantly favor speaking live with a representative via phone (21 percent) over using an automated voice response system (12 percent), e-chat (11 percent) or the mobile app (11 percent).
As online lending grows up, banks work to strengthen partnerships (Tearsheet), Rated: A
Marketplace lending as an industry is hitting its stride. Some platforms are becoming profitable, some are diversifying, new players are entering the market with new business models and the competition is heating up. But that means banks need to start strengthening ties with their online lending partners.
As more consumer-facing fintech companies are learning, that’s best done by building products that make people’s lives easier.
Fintech Startups Need Industry Partners to Thrive, Report Says (Bloomberg), Rated: B
More than 75 percent of fintech executives surveyed in a new report said their primary business objective is to collaborate with traditional firms, such as banks and insurance companies. Only 18 percent said the main goal was to compete with the established players.
According to the World FinTech Report 2018 from consulting firm Capgemini and corporate networking website LinkedIn Corp., most of the startups are likely to fail if they don’t build partnerships, despite raising more than $110 billion since 2009. The survey, published Tuesday, was based on the responses of 110 global financial technology firms.
Varo Money is bringing bank fees and financial health into its marketing (Tearsheet), Rated: A
Varo Money has been targeting customers of big banks whose fees they’re tired of having to understand and pay. Despite its appeal to potential customers to switch to Varo, its ads don’t call out specific companies, as some of its peers do.
Coming to your banking app soon: Predictive analytics (Bankrate), Rated: A
Bank of America will let mobile banking customers use its new digital assistant, Erica, in March. Besides helping consumers complete routine tasks like transferring funds, Erica will offer financial advice tailored for each user.
If you have a low balance and you’ve spent a lot of money, Erica might warn that you are in danger of overdrawing your checking account. Or she could share opportunities to save additional money.
Wells Fargo has made providing customers with advanced digital tools a top priority. In February, its 17 million mobile users with consumer deposit accounts found themselves with a new predictive banking feature.
Wells Fargo confirmed that these new mobile capabilities are powered by Personetics, a company providing banking solutions that anticipate what consumers might need in the future. Personetics also powers Royal Bank of Canada’s free automated savings tool, NOMI Find & Save, which gives mobile banking customers customized tips and alerts.
Companies like Saylent are trying to help banks make sense of their data resources by identifying the customers they should focus on. Saylent gives customers tools to target people that are shopping for a car loan or a mortgage. The platform will be used by institutions like BankFirst Financial Services, a community-based institution headquartered in Mississippi.
B of A is latest big bank to announce aggressive branch expansion (American Banker), Rated: A
Bank of America plans to open more than 500 branches over the next four years as part of a large-scale investment in retail banking.
The $2.28 trillion-asset company said in a press release Monday that it will hire more than 5,400 employees as part of the expansion. The Charlotte, N.C., company did not specify where the new branches will be located, nor did it say how much the proposed brick-and-mortar expansion plan would cost.
Don’t write off branch banking yet, says KeyBank Colorado exec (Denver Business Journal), Rated: B
Customers “want to talk to people. They want to be guided,” says Michael Walters.
Fintechs’ charter hopes may lie with new FDIC board (American Banker), Rated: A
Among federal bank regulators, the Office of the Comptroller of the Currency has been the most active on fintech chartering options. But another agency, the Federal Deposit Insurance Corp., may provide crucial guidance for fintechs in the shorter term.
The FDIC still has pending an application by Square for an industrial loan company, a limited-purpose bank typically chartered in Utah that receives deposit insurance.
Can Crowdfunding Mortgage Down Payments Make Homes Affordable? (SavingAdvice), Rated: A
A lot what’s being called crowdfunding is actually more like matching funds or subsidies for down payments. The growth of these options seems to be a sign of the times — so few people can afford to buy homes nowadays that the industry has gotten creative.
Unison Financial (formerly known as Rex Home Buyer) offers down payment subsidies in exchange for equity stakes in the home. The program requires that the home buyer put up a down payment of at least 10%.
HomeFundMe provides incentives for individuals to seek out grants that are actually matching funds on down payments. Although the match ratio is impressive, two-to-one, the total grant limited to $2,500 — do the math and you see that the buyer would need to come up with another $5,000 at that maximum amount.
With most residential mortgage lenders requiring minimum down payments of at least 5%, that limits the buyer to homes worth no more than $150,000. That’s well below the average home price in the U.S. — and even beneath affordable housing program prices in many cities.
HOW INVESTING IN CROWDFUNDED REAL ESTATE IMPACTS YOUR TAXES (The College Investor), Rated: A
There are two types of investors in a crowdfunded real estate investment: Accredited and non accredited.
An accredited investor has more opportunities to invest than a non accredited investor but they also bear more risks. SEC Rule 501 of Regulation D defines accredited investor.
These investors have an annual income of least $200,000 for the previous two years and a net worth of more than $1 million.
Non accredited investors buying shares of a fund have the simplest tax impacts.
They receive a 1099-INT from the crowdfunding real estate company they are investing with and are taxed at their ordinary income tax rate.
If the investor is invested in multiple funds, their investments can be aggregated into one 1099-INT rather than receiving an individual 1099-INT for each fund.
For investors who are investing in equity investments, things get more complicated. These investors will receive a K1 tax form. A K1 is for income through business partnerships.
PeerStreet Named a Finalist in Top Real Estate Platform Category in the Second Annual LendIt Fintech Industry Awards Competition (BusinessWire), Rated: B
LendIt Fintech recently announced that they have selected PeerStreet as a finalist in the Top Real Estate Platform category for the LendIt Fintech Industry Awards.
PawnGuru pulls in $ 2.5 mln Series A (PE Hub), Rated: A
PawnGuru, an online marketplace connecting pawn shops and consumers, today announces the close of a $2.5 million Series A. With this funding, PawnGuru intends to expand its network of shops within the US, as well as to international markets, giving consumers worldwide the power to buy directly from local pawn shops online.
5 Financial Mistakes That Push Striving Startups Into Bankruptcy (Newsmax), Rated: A
- Think Big/Start Big Syndrome – You are permitted to think big but start small to have adequate fund to invest in other areas of the business. When you don’t properly handle these areas, your business might join the 90% businesses that never survived after 5 years.
- Lack of Financial Mentorship
- Inability to Utilize Viable Loan Options – Bank loans, equipment loans, invoices financing, car title loans, peer-to-peer lending networks and more, are avenues small business owners can obtain loans. It’s however pertinent to get information and evaluate the cost implications of taking a loan to finance your business.
- Under-utilization of Digital Technology – In terms of advertising, marketing, automation, time management, human resource functions, cloud computing, data management, blockchain technology etc. digital technology has infused speed and efficiency which has resulted in reduced cost to carryout daily business operations.
- Poor Recording of Cash Flow
Understanding the International Student Lending Ecosystem in the U.S. (Lend Academy), Rated: A
There are almost 1.2 million international students currently studying in the United States. They hail from countries all over the world with almost a third – more than 360,000 – coming from China and just over 205,000 coming from India. South Korea and Saudi Arabia follow behind dropping down to just over 70,000 and 55,000, respectively. With education costs often approaching six figures and beyond, an international student loan ecosystem has emerged both in the U.S. and abroad to serve the educational funding needs of this demographic.
Navigate your student-loan maze with this Philly-made calculator (Technical.ly), Rated: B
From his home office in Fishtown, Temple University grad Mason Gallik, 23, is hoping his college debt calculator can help others from making bad choices.
“It’s about being realistic about your decisions,” said Gallik, the founder of LoanMajor. “Sometimes it’s smart to look at college from a financial side and not just an emotional one.”
Currently, the company’s source of income is through affiliate links with loan marketplace Credible. For every visitor that LoanMajor leads to Credible, they get a fee. Another source of revenue Gallik hopes to set up is through affiliate links to credit card companies and banks.
U.K.’s Virgin Money to Launch Digital Challenger Bank (Bank Innovation), Rated: AAA
U.K.-based lender Virgin Money said it will offer current accounts and savings products.
In its earnings call today, Virgin Money said it will begin testing these products later in the year and has already spent £38.3 million ($53.3 million) over the past year developing this digital bank.
Amigo Loans hires JP Morgan and RBC to prepare 500 million pound London IPO (Reuters), Rate: AAA
British subprime lender Amigo Loans is preparing for a stock market float in London that could value the consumer credit firm at more than $700 million.
1PM Joins Online Business Loan Marketplace For Retail Investors Mintos (London South East), Rated: AAA
1pm PLC said Tuesday that it has entered into a cooperation agreement with AS Mintos Marketplace to be a loan originator on its online loan marketplace.
The AIM-listed financial services provider to UK businesses said that it is the first loan originator from the UK to join the Mintos marketplace, which already has about 30 other loan originators globally.
British banks ordered to help people pay off credit card debts (Reuters), Rated: A
Britain’s Financial Conduct Authority ordered banks on Tuesday to take steps to help people with persistent credit card debt to keep up with repayments.
The FCA’s new rules will, however, will still allow banks to ultimately suspend a credit card if a customer fails to make any progress in repaying debts.
MIFID II aids RoboAdvice (AltFi), Rated: A
Unfortunately, in the current marketplace many opaque structures lead to charges that even a Finance degree can’t help unravel. But technology is here to help and most of the new Robo-Advisors have simple and transparent fee structures enabling savers to compare different product offerings quickly and easily.
Whilst many in Financial Services have been critical of the growing ‘regulatory burden’ the changes MiFiD II will bring should be net positive for end users and ultimately society. Although legacy providers are likely to see revenues and margins shrink.
Equifax is partnering with a digital ID verification company (Business Insider), Rated: AAA
US credit bureau Equifax has formed a partnershipwith South Africa-based Entersekt, a company specializing in customer authentication and device security.
Fintech Pagaya Receives $ 75 Million in Debt Financing from Citi (Crowdfund Insider), Rated: AAA
Pagaya Investments, a Fintech company in the asset management space, has received $75 million in debt financing from Citi. Simultaneously, Pagaya announced the creation of the “Opportunity Fund” to meet growing institutional interest in consumer credit as an asset class.
Global Venture Capital Investment in Fintech Industry Set Record in 2017, Accenture Analysis Finds (BusinessWire), Rated: AAA
Fintech financing rose 18 percent in 2017, to US$27.4 billion, with the value of deals in the U.S. jumping 31 percent, to $11.3 billion. Deal values almost quadrupled in the U.K., to US$3.4 billion, and soared nearly fivefold in India, to US$2.4 billion. The number of fintech deals also rose sharply, from just over 1,800 in 2016 to nearly 2,700 in 2017, underscoring continued appetite from investors scouring the globe for innovation in insurance, banking and capital markets startups.
“Much of the growth, particularly in the U.S. and UK, has been driven by big new investment flows from China, Russia, the Middle East and other emerging economies,” said Julian Skan, senior managing director in Accenture’s Financial Services practice.
“Much of the growth, particularly in the U.S. and UK, has been driven by big new investment flows from China, Russia, the Middle East and other emerging economies,” said Julian Skan, senior managing director in Accenture’s Financial Services practice.
India, US, UK drove global growth
Kabbage Inc, a U.S. online lender for small businesses, alone raised US$900 million in three separate rounds in 2017. Online lender Social Finance Inc, also known as SoFi, raised US$500 million in February, and LendingPoint raised US$500 million from a credit transaction in September. As startups grow and their businesses mature, funding rounds have increased in size, while some companies have opted to use credit facilities to speed up their expansion.
In the U.K., digital insurance distributor BGL Group raised US$900 million, pushing overall fintech investments in the country to an all-time high of US$3.4 billion. Payments venture TransferWise had the second-largest fundraising in the U.K., raising US$280 million.
India’s digital payments startup Paytm received US$1.4 billion in venture capital, helping drive fintech fundraising activity in the country to nearly five times the 2016 levels. The number of fintech deals in India increased 65 percent over 2016.
More deals in China, fewer megadeals
Mega fintech deals that had catapulted China to the top destination in the world for venture capital money in 2016 fell in 2017, as investors pulled back after pouring billions of dollars into giant-sized transactions. Fintech funding in the country declined 72 percent in 2017, to US$2.8 billion, from a record US$10 billion in 2016, when several companies – including Ant Financial and wealth management platform Lufax – had multi-billion-dollar financing rounds. The average deal size in China in 2017 was US$19 million, down from US$186 million in 2016, though the country still had large transactions, such as the US$440 million that real estate broker Homelink raised in April and the US$290 million that online finance firm Tuandai raised in June.
P2P and marketplace lending equity investments recover in 2017 to set new record (AltFi), Rated: AAA
Deals in the sector slowed down in 2016 with a year on year decrease of 12.8 per cent, possibly as a result of Lending Club’s annus horribilis. Total amount invested fell from $8.6bn in 2015 to $7.5bn the next year.
However, investment rebounded in 2017 to reach $8.9bn, a year on year increase of 18.6 per cent. The top ten P2P and marketplace Lending deals in 2017 raised half of the total funding for the year, raising a combined total of $4.4bn. The largest deal in 2017 was the previously mentioned $1.2bn Series B round to Lufax, led by COFCO with co-investment from China Minsheng Bank and Guotai Junan Securities.
Creditcoin Turns Digital Wallets into an Investment Market (Coinspeaker), Rated: A
In response to this, two reputed fintech innovators, Gluwa and Aella Credita have joined forces to launch Creditcoin, an inter-blockchain P2P lending market that operates across distributed ledgers ensuring permanent record of transactions that cannot be alter or tampered with.
Allianz Investment Arm Co-Leads Funding Round in Fintech C2FO (Bloomberg), Rated: B
Financial technology startup C2FO raised $100 million in funding in a new round led by the investing arm of global insurance and asset management giant Allianz SE as well as Abu Dhabi’s Mubadala Investment Co.
MSTS Taps World Fuel VP As Head Of Business Development For APAC (Payment Week), Rated: B
Extending access to credit: Are alternate finance platforms creating tangible impact? (ET Rise), Rated: A
Equity crowdfunding in Japan poised to grow fivefold this year (Asian Review), Rated: AAA
Crowdfunding campaigns that offer stock in exchange for capital are set to swell this year in Japan as the prospect of high returns draws investors to a relatively new channel for fledgling companies.
Indonesia’s P2P firm UangTeman likely to raise up to m Series B (Deal Street Asia), Rated: A
Indonesian peer-to-peer lending platform UangTeman said it is set to raise a Series B financing round by mid-2018, claiming it would be one of the largest such rounds for a fintech firm in Southeast Asia.
IOU Financial Extends Credit Facility with Midcap Financial (Cision), Rated: AAA
IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV: IOU), online lender to small businesses (IOUFinancial.com), announced today that it has modified and extended its secured credit facility (the “Credit Facility”) with MidCap Financial, (“Midcap”) until December 31, 2020. The amount of the Credit Facility is USD $20 million, with a term portion equal to USD $15 million and a revolver amount of USD $5 million.
IOU and Midcap have further agreed to allocate USD $1 million from the Credit Facility amount of USD $20 million, to support Canadian loan originations. This will be formalized in a separate amendment to this facility.
News Comments Today’s main news: Lending Club losses extend to Q4 2017. LendingClub to settle lawsuit for $125M. Groundfloor launches online public offering. Even Financial gets backing from American Express. LendInvest launches buy-to-let calculator online. Today’s main analysis: Lend Academy reviews LendingClub’s Q4 2017 results. Today’s thought-provoking articles: Equity sharing and home ownership. How millennials move emerging markets. Why Australia needs […]
- Today’s main news: Lending Club losses extend to Q4 2017. LendingClub to settle lawsuit for $125M. Groundfloor launches online public offering. Even Financial gets backing from American Express. LendInvest launches buy-to-let calculator online.
- Today’s main analysis: Lend Academy reviews LendingClub’s Q4 2017 results.
- Today’s thought-provoking articles: Equity sharing and home ownership. How millennials move emerging markets. Why Australia needs a better credit scoring system.
- LendingClub’s losses extend into Q4 2017. AT: “This is an example of how litigation can eat into profits and impact growth. Nevertheless, despite continued losses and expected pending losses, LendingClub is looking good with increased originations. But it’s not out of the water yet.”
- LendingClub to settle shareholder litigation. AT: “It could have been worse. Insurance will cover some of this.”
- LendingClub shares sink.
- LendingClub’s earnings results. AT: “Also includes some projections for 2018.”
- Stocks making the biggest moves after hours. AT: “Hint: LendingClub is among them.”
- Groundfloor launches online public offering. AT: “This is significant because Groundfloor offers the first SEC-authorized opportunity in payment-dependent notes for non-accredited real estate crowdfunding investors. For $10 per share, anyone–literally–can invest in Groundfloor. While I applaud this opportunity for opening doors to virtually everyone, a part of me wonders if Groundfloor can raise enough operating capital by selling common stock for $10 per share. How long will it be before they are profitable? Is this a good ground floor price?”
- Equity crowdfunding in real estate.
- RealtyInvest allows beginning investors to get in on commercial real estate opportunities.
- Home equity sharing, a good idea?
- Even Financial secures $3M raise led by American Express.
- Fundrise reports 11.44% return for 2017. AT: “Congratulations.
- Yalber closes $20M senior credit facility.
- Blinker, Ally partner on P2P auto financing and sales.
- Zelle users discover lack of fraud protection.
- Cyberattacks extracted $56B from U.S. economy in 2016.
- BlockFi raises $1.55M.
- The most innovative companies in 2018.
- Elevate Credit to increase Pinterest use.
- OpenClose adds to support, integration teams.
- 3 loans students should avoid.
- Funding Circle planning two mobile app launches this year.
- LendInvest launches online buy-to-let calculator.
- P2P business lending up 51%.
- Online lenders, bank could operate as joint ventures.
- Crowdfunding sites not explaining the dangers.
- Lendingblock close to launch.
- Farming building conversions fell 20% in one year.
- Finnest expands financing to larger corporations, adds institutional investors.
- Why it’s okay that consumers don’t know about open banking.
- How millennials move emerging markets.
- ICO update on Valorem.
- Wealth managers must go digital.
- An interview with Finom CEO, TabTrader founder.
- United States
- Lending Club extends losses for fourth straight year (Financial Times), Rated: AAA
- LendingClub agrees to settle shareholder litigation for $125M (American Banker), Rated: AAA
- LendingClub Corp (LC) Shares Sink on Q4 Earnings Miss (InvestorPlace), Rated: A
- LendingClub Q4 2017 Earnings Results Review (Lend Academy), Rated: AAA
- Stocks making the biggest moves after hours (CNBC), Rated: B
- Groundfloor Launches Online Public Offering Amidst Increased Stock Market Volatility (PR Newswire), Rated: AAA
- Real Estate Equity Crowdfunding: A New Investment Opportunity for the Investors (EIN News), Rated: A
- RealyInvest App Empowers Beginners to Invest in Commercial Real Estate (PR Newswire), Rated: A
- Silicon Valley Explores a New Investment: Your Home (WSJ), Rated: AAA
- Even Financial inks $ 3 mln (PE Hub Network), Rated: AAA
- Fundrise Reports 2017 Performance. Total Return for the Year Stands at 11.44% (Crowdfund Insider), Rated: A
- Online SMB lending platform Yalber closes $ 20M senior credit facility (Bankless Times), Rated: A
- Blinker Joins With Ally To Enhance The Auto Industry’s Only Peer-To-Peer E-Commerce Platform (PR Newswire), Rated: A
- Zelle users are finding out the hard way there’s no fraud protection (TechCrunch), Rated: A
- Cyberattacks took $ 56B from U.S. economy in ’16 (American Banker), Rated: A
- BlockFi Raises 1.55M in Seed Funding (Finsmes), Rated: A
- The 2018 World’s Most Innovative Companies (Fast Company), Rated: A
- ‘Pinterest will get even bigger for us’ says fintech lender Elevate Credit (The Drum), Rated: A
- OpenClose Bolsters Software Integration and Support Teams (Send2Press), Rated: B
- 3 Loans for Students You Should Avoid Like the Plague (Student Loan Hero), Rated: B
- United Kingdom
- Funding Circle to launch two new mobile apps this year (P2P Finance News), Rated: AAA
- LendInvest Announces Launch of Buy-to-Let Online Calculator for Intermediaries (Crowdfund Insider), Rated: AAA
- P2P business lending up 51% (Bridging&Commercial), Rated: A
- Online lenders and banks may operate as ‘joint ventures’ (P2P Finance News), Rated: A
- Crowdfund sites ‘are not explaining the dangers’ (The Times), Rated: A
- Crypto lending platform nears launch (AltFi), Rated: A
- Number of farming building conversions falls 20 percent in a year (FarmingUK), Rated: B
- The New Year to Bring a New Flood of IPOs (CapitalWatch), Rated: A
- European Union
- Finnest Expands Online Financing to Larger Corporations, Adds Institutional Investors (Crowdfund Insider), Rated: AAA
- Why it’s OK that the majority of consumers don’t know about Open Banking – for now (AltFi), Rated: A
- How Millennials are Moving Emerging Markets (Morningstar), Rated: AAA
- Latest ICO Updates on VLR Token – Valorem Foundation ICO is LIVE! (TechBullion), Rated: A
- Wealth managers must go digital (Raconteur), Rated: B
- An Interview with Kirill Suslov – The CEO at Finom and TabTrader Founder (NewsBTC), Rated: B
- Peer To Peer Lending Increasingly Popular In Australia (compare dinkum), Rated: AAA
- Why Australia needs a better system for credit scores (The Converstion), Rated: AAA
- Refer to these fintech startups for range of medical loans (Business Standard), Rated: A
- They couldn’t get loans from their banks so turned to a legitimate-looking lender online (The Star), Rated: AAA
- Blackchain Announces Private Placement (Stockhouse), Rated: A
Lending Club extends losses for fourth straight year (Financial Times), Rated: AAA
Lending Club lost money for a fourth year in a row last year, as it wrote a big cheque to settle class-action lawsuits connected to its governance glitches of 2016.
The San Francisco-based company, the biggest listed online lender in America, said on Tuesday that net losses for the fourth quarter almost tripled from a year earlier, to $92m, as it agreed a $125m settlement to resolve civil suits stemming from the loan-mis-selling scandal that blew up almost two years ago. About $48m of the sum would be covered by insurance, the company said, with the remainder to be paid from liquid assets of about $650m.
The loss for the full year came to $154m, wider than the previous year’s $146m.
LendingClub agrees to settle shareholder litigation for 5M (American Banker), Rated: AAA
Under the agreement, which was announced Tuesday, the San Francisco-based online lender expects to pay $77.25 million. An additional $47.75 million is expected to be covered by LendingClub’s insurance, bringing the total payout to $125 million. The deal is subject to court approval.
LendingClub Corp (LC) Shares Sink on Q4 Earnings Miss (InvestorPlace), Rated: A
Lending Club also underwhelmed in its revenue as the company raked in $156.5 million during its fourth quarter, below Wall Street’s consensus estimate of $157.6 million, according to FactSet. The figure did increase 20% compared to the year-ago quarter.
On an adjusted basis, the company posted earnings of a penny per share, compared to a loss of 2 cents in the year-ago quarter.
The company also experienced a 23% annual growth in originations, which reached over $2.4 billion.
LendingClub Q4 2017 Earnings Results Review (Lend Academy), Rated: AAA
LendingClub delivered another record quarter of $156.5 million in revenue up slightly from their previous quarter. Originations were slightly down from the third quarter at $2.436 billion. They reported a GAAP net loss of $92.1 million in the fourth quarter which was affected by the class action litigation settlement expense.
LendingClub provided the below guidance for Q1 2018 and reaffirmed their guidance for 2018:
First Quarter 2018
- Total Net Revenue in the range of $145 million to $155 million
- Net Income (Loss) in the range of $(25) million to $(20) million
- Adjusted EBITDA in the range of $5 million to $10 million
- Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $19 million, and depreciation and amortization and other net adjustments of approximately $11 million
Full Year 2018
- Total Net Revenue in the range of $680 million to $705 million
- Net Income (Loss) in the range of $(53) million to $(38) million
- Adjusted EBITDA in the range of $75 million to $90 million
- Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock-based compensation of approximately $77 million, and depreciation and amortization and other net adjustments of approximately $51 million
Stocks making the biggest moves after hours (CNBC), Rated: B
LendingClub stock plunged 10 percent after the bell. The peer-to-peer lending company reported earnings and revenues that missed Wall Street estimates.
Groundfloor Launches Online Public Offering Amidst Increased Stock Market Volatility (PR Newswire), Rated: AAA
Groundfloor, the first issuer qualified by the U.S. Securities & Exchange Commission to offer real estate based payment dependent notes that are available to non-accredited investors, today announced that it has raised a total of $4.3 million from 687 participating investors in a combination of two recent financings, a private online bridge note closed late last year and an initial closing of its online public offering of equity. In each case, the company kicked off the invitation-only raises to customers and friends of the company with a $1M target, surpassing that in under 48 hours. Due to increased growth opportunities and strong demand, the company has today expanded the equity raise to the public.
Groundfloor is offering a total of up to 530,000 shares of Common Stock at $10 per share in its online public offering. Investor benefits include: no investor fees for life2; access to regular shareholder-only loan offerings; and invitations to attend annual Groundfloor shareholder events.
Recently increased expectations that the Fed may raise interest rates in the future has investors rebalancing their portfolios, with a shift out of equity into debt, as bond yields are expected to increase. Twelve-month bond yields have recently inched up to 1.97 percent.
By comparison, Groundfloor investors have earned an average of 13.6 percent per year over the past three years, which represents over 6x the yield of a current one year Treasury note, and over 1,000 percent more than they would have made if their money had been in a CD or savings account over this period.1 Groundfloor’s retail investors create their own portfolios of real estate debt investments in the fix and flip residential housing market, and the loans on which the investments are based are secured by a first lien position against the underlying real asset.
Real Estate Equity Crowdfunding: A New Investment Opportunity for the Investors (EIN News), Rated: A
Talking in context of real estate, there are 3 ways to invest in a crowdfunded real-estate property:
• Equity crowdfunding
• Syndicated debt crowdfunding
• Platform-issued (‘pre-filled’) debt crowdfunding
Following are the pros and cons of going for equity crowdfunding in real estate:
• High yield potential
• Lower barrier to entry: Even if you have a very less amount of money, you can still invest even in large commercial real estate projects through equity crowdfunding and enjoy the benefits of the real estate i.e., strong returns and lower volatility.
• No self-employment taxes
• Higher returns
• The risks. An investor should know how to evaluate the risk factors like local economy volatility and chances of higher than expected construction costs. Due diligence is what is required.
• Liquidity constraint: These investments need to be held up for a period of five years or so, and hence one should go for this option if this much bandwidth is available, lack of liquidity is not there, and an investor is comfortable with the invested amount to be tied up for several years.
• It’s still an early option: It is still an early option to be considered as the performance track record and validation is still not complete and individual investors are still trying to figure it out.
• Lack of control: Since it is a passive investment, the investors are not involved in the day to day activities and therefore have limited ability and control over the operations required.
RealyInvest App Empowers Beginners to Invest in Commercial Real Estate (PR Newswire), Rated: A
In a rising tide of fintech apps, RealyInvest is emerging as a new way for beginning investors to access the high-priced world of premier commercial real estate right from their smartphones.
RealyInvestors can purchase fractional shares of REITs (Real Estate Investment Trusts) for as little as $5. Investors can also own shares of commercial real estate NNN Assets, such as a building long-term leased to Starbucks, for as little as $20.
Silicon Valley Explores a New Investment: Your Home (WSJ), Rated: AAA
A handful of companies, including those backed by marquee Silicon Valley names such as Andreessen Horowitz and Mark Zuckerberg’s philanthropic organization, are experimenting with a product that essentially lets them take an ownership position in a house along with the homeowner. The agreements, called shared-equity contracts, provide a new way for investors to get exposure to rising home prices across the U.S.
Shared-equity products are aimed at new buyers who need help with a down payment, or current homeowners looking for an alternative to a cash-out mortgage refinancing or a home-equity loan. The first use has caught the attention of mortgage-finance giant Freddie Mac ,which recently agreed to buy loans on properties where one firm,Unison Agreement Corp. , contributes to the down payment.
Landed Inc. offers these down-payment contracts to teachers and other educators. Last year, the Chan Zuckerberg Initiative , a philanthropy co-founded by Facebook Inc.’s chief executive, gave Landed $5 million to start a new fund.
The length of the contracts can vary from a few years to 30. Homeowners can repay early, including if they sell their house before the term ends. How much they end up owing depends on how the value of their home changes. Because the funds are equity, not a borrowing, they don’t require monthly payments.
Even Financial inks $ 3 mln (PE Hub Network), Rated: AAA
Even Financial, the technology platform powering financial services online, has secured a strategic investment round totaling $3 million. The round includes an investment from American Express Ventures, the strategic investment unit of American Express, as well as Plug & Play and Arab Angels.
With this investment, Even Financial will expand its team and advance its proprietary technology, which allows financial institutions and other partners to scale customer acquisition and remain competitive in the growing online financial services industry.
Fundrise Reports 2017 Performance. Total Return for the Year Stands at 11.44% (Crowdfund Insider), Rated: A
In brief, this is what Fundrise reported;
“In 2017, Fundrise investments earned an 11.44%* total return on investment, including over $16 million in dividends paid out to investors. Delivering attractive, consistent cash flow is a core part of our mission to offer you a better way to invest.”
Online SMB lending platform Yalber closes $ 20M senior credit facility (Bankless Times), Rated: A
SMB lending platform Yalber closed a $20 million senior credit facility this week, the company announced today.
Blinker Joins With Ally To Enhance The Auto Industry’s Only Peer-To-Peer E-Commerce Platform (PR Newswire), Rated: A
South by Southwest Interactive Innovation Award winner and 2018 LendIt Fintech Industry Award finalist Blinker, the only peer-to-peer e-commerce platform that provides an end-to-end solution for anyone buying, selling or financing cars, announced two major milestones for its business today:
- Blinker is now available in the largest car markets in the US – Beginning today, Blinker is expanding its proprietary e-commerce and loan origination platform from Texas and Colorado to California and Florida, allowing millions of customers to buy, sell and finance vehicles easier, quicker and safer with other people. Thirty percent of vehicle sales across the US every year are between people, yet private-party marketplaces including Craigslist, Letgo, Autotrader, Cars.com and Facebook Marketplace don’t have services such as integrated financing or lien payoff support. Leveraging artificial intelligence and machine learning, Blinker customers get guidance and tools to complete the entire purchase process themselves, from instant vehicle valuation to real-time auto loan approval to e-signing documents to secure funds transfer, all for free within Blinker’s mobile app.
- Blinker joins with Ally to offer best-in-class auto protection products – Blinker will now give customers the option to add Ally’s vehicle protection coverage, including Ally Guaranteed Asset Protection (GAP) and Ally Premier Protection vehicle service contracts, for their vehicle purchases in the app. GAP covers the difference between the cash value of a vehicle and what Blinker customers still owe on their loan if the vehicle is totaled or stolen. Ally vehicle service contracts cover the repair cost for over 7,400 mechanical, electrical, safety or digital components, as well as some related expenses like trip interruption, rental car coverage, towing and 24/7 roadside assistance.
Zelle users are finding out the hard way there’s no fraud protection (TechCrunch), Rated: A
Scammers have taken to Zelle, the Venmo alternative backed by U.S. banks, to defraud consumers who believe the service includes the same protections they’ve come to expect from PayPal. A number of customers report having lost hundreds, or even thousands of dollars, over Zelle, when they used it for transactions with people they didn’t know – like tickets bought off a Craigslist posting, for example.
Cyberattacks took $ 56B from U.S. economy in ’16 (American Banker), Rated: A
Malicious cyber activity cost the U.S. economy between $57 billion and $109 billion in 2016, the White House said Friday.
The estimate comes in a Council of Economic Advisers report on the impact of cyberattacks on U.S. government and industry. The report details the range of threats that U.S. entities face from actors including corporations and countries such as Russia, China, Iran and North Korea.
The council’s estimate represents between 0.31% and 0.58% of the 2016 U.S. gross domestic product. For comparison, the report cites a Center for Strategic and International Studies report that estimated the cost of malicious cyber activities against U.S. entities at $107 billion in 2013, 0.64% of GDP that year.
BlockFi Raises 1.55M in Seed Funding (Finsmes), Rated: A
BlockFi, a New York-based fintech company whose first product is a loan for cryptoasset owners, raised $1.55m in seed funding.
Backers included ConsenSys Ventures, Kenetic Capital, PJC, SoFi, Purple Arch Ventures and Lumenary.
The 2018 World’s Most Innovative Companies (Fast Company), Rated: A
For extending the benefits of banking
19 Social Capital
For putting values into its ventures
‘Pinterest will get even bigger for us’ says fintech lender Elevate Credit (The Drum), Rated: A
Speaking to The Drum in the final instalment of a four-part video series with Falcon.io exploring social media strategies, she admitted that while it can be a challenge, using data to understand her audience’s wants and needs has helped her shape content which is likely to resonate.
Fox says she has been finding success on the unlikeliest of social media platforms – Pinterest.
“All our content is more lifestyle focused than finance focused,” she explained.
OpenClose Bolsters Software Integration and Support Teams (Send2Press), Rated: B
OpenClose, an industry-leading multi-channel loan origination system (LOS) and mortgage fintech provider, announced that it has added staff to its integration and customer support departments. The new hires will help enhance OpenClose’s existing software products, facilitate digital mortgage processes, produce fintech-level innovation and provide excellence in customer support. The company also recently added three senior software engineers to its development team.
3 Loans for Students You Should Avoid Like the Plague (Student Loan Hero), Rated: B
1. Payday loans
You usually have only a couple of weeks to repay the loan, and the typical APR is almost 400.00%, according to the Consumer Financial Protection Bureau. If you can’t pay it back and have to take out a new payday loan to pay off the first, you could end up stuck in a vicious cycle of predatory debt.
What you should try instead: A payday alternative loan (PAL).
2. Auto title loans
The reality is these short-term loans also have three-digit APRs, and you typically have between 15 and 30 days to repay the loan.
What you should try instead: A short-term campus loan.
$20 / $2,000 = 1%
1% x 365 days = 3.65
3.65 / 60 = 6.08% APR
3. Cash advances
This type of loan isn’t as costly as a payday loan or an auto title loan, but it’s not ideal for two reasons:
- Credit cards charge a fee, typically 5% of the advance amount. So, if you withdraw $500, you’ll have to pay $25 upfront.
- There’s no grace period with cash advances, so interest starts accruing immediately.
What you should try instead: A 0% APR promotion. Some credit cards offer a 0% APR promotion on new purchases for a period.
Funding Circle to launch two new mobile apps this year (P2P Finance News), Rated: AAA
The business lender, which currently only has an iPhone app for investors to access, monitor and manage their accounts, is now advertising for a global mobile apps product manager and for an Android developer.
Both positions are based in the UK.
“We have an ambitious roadmap for this year and want to launch two new apps (Android and iOS) for our investors,” the job advert on the Funding Circle website said.
LendInvest Announces Launch of Buy-to-Let Online Calculator for Intermediaries (Crowdfund Insider), Rated: AAA
On Tuesday, LendInvest announced the launch of its new buy-to-let (BTL) online calculator for intermediaries.
P2P business lending up 51% (Bridging&Commercial), Rated: A
The report also found that the value of SME asset finance deals was up 12%.
Although net bank lending volumes remained positive (£700m in 2017), it was weaker than in both 2016 (£3bn) and 2015 (£2bn).
The BBB found that there had been a significant increase in both the value and number of SME equity deals, up 79% and 12% respectively.
Online lenders and banks may operate as ‘joint ventures’ (P2P Finance News), Rated: A
ONLINE lending platforms may partner with banks to fund and market credit products in the future, even sharing the approval process and compliance, in one scenario outlined by global banking regulators.
A number of peer-to-peer lenders have already partnered with banks on a smaller scale. For example, Metro Bank has lent through Zopa’s platform and Santander has referred borrowers to Funding Circle. However, these tie-ups have not gone as far as the report’s scenario suggests in terms of becoming a joint venture.
Crowdfund sites ‘are not explaining the dangers’ (The Times), Rated: A
Square Pie, which started life as a stall in London’s Old Spitalfields Market, expanded with the help of a “pie bond” that promised 8% annual interest over four years. The bond was offered through one of Britain’s biggest crowdfunding platforms, Crowdcube.
A total of 324 investors signed up, lending more than £650,000 to fund Square Pie restaurants and its efforts to improve supermarket sales. Square Pie has gone into administration — the first failure of a business that issued a mini bond on a crowdfunding site.…
Crypto lending platform nears launch (AltFi), Rated: A
Lendingblock is one such business. The soon-to-launch platform is, in its founder Steve Swain’s words, “an open exchange for cryptocurrency loans”.
Lendingblock is in the middle of a three-stage Initial Coin Offering that will conclude in March. The first phase has already been completed, raising the equivalent of $500,000. The offering has a hard cap of $10m.
Number of farming building conversions falls 20 percent in a year (FarmingUK), Rated: B
The number of conversions of farm buildings into new homes dropped 20% in the last year, denting hopes that these conversions could help solve the rural housing crisis.
According to Lendy, one of Europe’s largest peer-to-peer lending platforms, only 1,511 agricultural-to-residential conversion applications were approved in 2016/17.
The New Year to Bring a New Flood of IPOs (CapitalWatch), Rated: A
Finnest Expands Online Financing to Larger Corporations, Adds Institutional Investors (Crowdfund Insider), Rated: AAA
Finnest is an interesting online lender operating in the DACH countries. The peer to peer platform was launched to provide SME funding supported by individual investors but the company is now expanding by providing loans of €10 million and higher. Institutional investors such as insurance companies, funds, family offices and banks will now be able to invest in large SMEs on “FinnestPro.”
Why it’s OK that the majority of consumers don’t know about Open Banking – for now (AltFi), Rated: A
The new EU legislation on payment services – PSD2 – and the introduction of Open Banking in the UK seem to have passed the vast majority of people in the country by, according to an AltFi News article last month.
This referred to a report by Which saying that 92 per cent of consumers hadn’t even heard of Open Banking.
How Millennials are Moving Emerging Markets (Morningstar), Rated: AAA
Millennials in advanced economies have come under pressure in recent years, thanks to stagnating wages, rising house prices and escalating student debt. But an altogether different trend is taking place in many emerging markets where millennials are seeing their prospects rapidly improve. This in turn is creating an investment opportunity, as millennials in these countries are becoming hugely influential on the prospects for emerging market equities.
Millennials will account for half of the global workforce by 2020, meaning they will be one of the most influential groups in shaping the economy and society, including consumption habits, policy and how companies may want to market and brand themselves. They are disrupting traditional industries and companies are having to adapt. This presents investment opportunities, but it also presents new investment risks.
Latest ICO Updates on VLR Token – Valorem Foundation ICO is LIVE! (TechBullion), Rated: A
Based on ERC-20, the multilayered cryptocurrency platform will host a marketplace that allows developmental phases. The first phase focuses on micro loans (small loans), rent payments, student loans and peer-to-peer payment processing.
As trust grows on the platform, phase 2 will be implemented to cater to sales distribution, global small business investing and global commercial and residential real estate crowdfunding while the third stage will serve charity and insurance. The final phase will be dedicated to maintenance and future developments that may include additional currency adoption, feature adding etc.
Valorem (VLR) is the token offered. The exchange rate stands at 1 ETH= 1000 VLR. There is a total supply of 200 million tokens of which 150 million are available during the ICO and 50 million will be kept in reserve. Valorem will not be mined.
Wealth managers must go digital (Raconteur), Rated: B
People born between roughly 1982 and 2002 are set to receive the biggest inheritance boom of any post-war generation. The Royal Bank of Canada (RBC) estimated the figure will be around $4 trillion in the UK, Canada and United States.
An Interview with Kirill Suslov – The CEO at Finom and TabTrader Founder (NewsBTC), Rated: B
NewsBTC: Now it seems that you have no experience with banking services yet. How do you plan to cover this area?
Now I can say we understand confidently how banking works and how it should work in the crypto industry. By 2020, we’re going to have a licensed bank and transform it into a crypto one with a network of crypto terminals.
A bit sooner, in 2018, we plan to release crypto e-wallets with linked debit cards. Miners will be able to use recently mined coins right away, transferring them to their wallets immediately. We’re also designing a platform for peer-to-peer lending.
Peer To Peer Lending Increasingly Popular In Australia (compare dinkum), Rated: AAA
Australian investors and borrowers are increasingly adopting peer to peer lending platforms according to the results of survey undertaken by ASIC. The results of the survey suggest that as much as $300 million of personal and business loans were underwritten by peer to peer lenders over the course of the last fiscal year. That represents a doubling in the amount that was lent on such platforms during the 2015/2016 financial year.
Why Australia needs a better system for credit scores (The Converstion), Rated: AAA
Australia’s credit rating system is failing both borrowers and lenders. Many borrowers are unaware of their own credit scores and our research shows they have trouble applying for suitable loans. Lenders are also struggling with too little information, causing them to extend loans to those they shouldn’t and restrict loans to worthy borrowers.
Upcoming changes to Australia’s credit reporting system could remedy these issues.
Under the new credit reporting regime, both lenders and borrowers will have access to more data, such as monthly payment histories on loans and credit cards.
More innovation ahead in mortgage lending
For higher-risk borrowers, novel techniques to assess credit risk (such as analysis of social media accounts) may be the answer to distinguish good borrowers from bad.
But prior experience from an over-reliance on credit scores in the United States shows that careful assessment of borrowers remains vital.
Refer to these fintech startups for range of medical loans (Business Standard), Rated: A
Among all the personal loans the medical loan is the most crucial one which is often required on an urgent basis by the applicants.
They couldn’t get loans from their banks so turned to a legitimate-looking lender online (The Star), Rated: AAA
Unable to qualify for a loan from her bank, Johnston searched online for private lenders and found a website for what appeared to be a legitimate company calling itself North Clear Credit.
Everything about it — the variety of loans offered, the glowing testimonials, the company description — seemed professional. In fact, a customer who later reported North Clear Credit to police says an officer told her the website looked legitimate.
For Johnston and Mood, the terms were appealing. The money could be paid back monthly over five years at an interest rate substantially lower than what they would be charged elsewhere.
Johnston completed an online application and was approved for a $20,000 loan.
Within a few days, Johnston and Mood had lost $3,500, and two North Clear Credit “representatives” with whom Johnston had been corresponding had disappeared.
Blackchain Announces Private Placement (Stockhouse), Rated: A
Blackchain Solutions Inc. (the “Company” or “Blackchain”) (CSE: BIS), announces a private placement of up to 3,400,000 units at a price of $0.18 per unit, for gross proceeds of $612,000. Each unit consists of one common share and one share purchase warrant. Each warrant is exercisable at a price of $0.22 per share for a term of two years.
Proceeds generated from this financing will be used to initiate and support the filing of multiple patents and trademarks related to the Blackchain Crypto Credit Rating API and P2P Lending Platform.
News Comments Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital. Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO. Today’s thought-provoking articles: […]
- Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital.
- Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO.
- Today’s thought-provoking articles: PeerIQ reviews last week’s news. Open banking’s early adopters. Robo-advisors gaining speed in Europe. Disruptive innovation in equity crowdfunding. Disruptive innovation in digital banking.
- eBay ditches PayPal for Adyen. AT: “This is an interesting trade-off, and I wonder what the benefits are to eBay’s users.”
- Bank of America Merrill uses PayPal for digital payments.
- PeerIQ’s review of last week’s news. AT: “Yellen chaired her last Fed meeting, plus other news Lending Times covered last week.”
- FT Partners CEO’s alternative lending market analysis. AT: “If you read this for any reason, check out the exclusive interview with Nav CEO and founder Levi King.”
- Open banking’s early adopters. AT: “BBVA Compass is one of only about five banks in the U.S. to adopt open banking so far. It will be interesting to see how it works for these banks as the rest of the industry will be watching.”
- Fiserv has the largest U.S. marketshare of top bank core processors.
- Enova announces Q4 and 2017 full year results.
- Grameen America has a unique approach to microlending. AT: “An interesting story about a microlender in the U.S. whose target market is women.”
- Morty is an online mortgage broker targeting women.
- Hackers target payroll direct deposit through email phishing scams.
- Will marketplace lending live up to expectations?
- Beating the robots on financial advice.
- Dealmakers embrace financial advice tech.
- American Association of Private Lenders opposes Floria legislation.
- dv01 names new COO.
- DC startups that raised capital last month. AT: “Congratulations to StreetShares.”
- Aviva executive backs robo-advisors.
- Treasury starts SME finance inquiry.
- Pros and cons of IFISAs.
- Things can only get better with P2P lending.
- Previse gets two new board members.
- Banco BNI Europe lends on Fellow Finance. AT: “The bank is making a huge push into marketplace lending.”
- Stripe opens engineering hub in Dublin. AT: “The most interesting news today is taking place in Europe.”
- Robo-advisors taking hold in Europe. AT: “No big surprise. It’s catching on everywhere.”
- BBVA’s digital push drives up profits.
- Etherecash lists on QRYPTOS.
- GN Compass creates more liquidity for token.
- Mifid tips balance in favor of ETFs.
- Deloitte: Disruptive innovation in equity crowdfunding.
- Deloitte: Disruptive innovation in digital banking.
- IdentityMind Global intros KYC, AML plugin for ICOs.
- Bahrain FinTech Bay, OffrBox partner.
- How early-stage startups raise money.
- Faircent CEO says fintech will revolutionize lending.
- Everything you need to know about cryptocurrencies.
- United States
- eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA
- PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A
- Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA
- CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA
- Open banking’s early adopters bet on ‘tremendous gains in value’ (American Banker), Rated: AAA
- Fiserv Has Largest U.S. Marketshare of Top Bank Core Processors (Bank Innovation), Rated: A
- Enova Reports Fourth Quarter and Full Year 2017 Results (PR Newswire), Rated: A
- No Credit? No Problem! Microlender for Women Uses Novel Approach (WSJ), Rated: A
- How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A
- Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A
- Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A
- How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A
- The dealmakers financing top adviser technology (InvestmentNews), Rated: A
- American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A
- Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B
- The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B
- United Kingdom
- Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA
- Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A
- The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A
- Things can only get better, says Christie & Co (The Caterer), Rated: B
- Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B
- Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A
- European Union
- Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA
- U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA
- Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA
- BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A
- Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A
- GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B
- Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B
- Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA
- Disruptive innovation in digital banking (Deloitte), Rated: AAA
- IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A
- BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A
- How early-stage startups raise money (Times of India), Rated: A
- FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A
- Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B
- After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA
- Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA
- Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA
- StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A
- Latin America
- Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA
eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA
Looking to sweeten this bitter pill, eBay says PayPal, a “long-time” partner, will be an option at the checkout for its buyers.
PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A
Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA
Janet Yellen chaired her last Fed meeting as the committee kept interest rates on hold in January. Futures are pricing in a 93% probability of a rate hike in March and 3 rate hikes for 2018. The recent sell off on the long end of the curve has seen 10-year treasury yields edge past 2.85%, providing respite to banks who were seeing their loan margins compress as the curve flattened.
In securitization news, Marlette completed its largest securitization to date, with MFT 2018-1 coming in at $464 Mn. The deal was significantly over subscribed and eventually upsized continuing the trend of larger deal size that we pointed out in ourQ4 securitization tracker. The senior tranches were rated AA by Kroll. The collateral pool has 40,303 loans with an average loan balance of $12k, weighted average coupon of 14.3% and a FICO score of 703. All the loans were originated by Cross River Bank.
CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA
This month’s report features an exclusive interview with Levi King, Co-founder and CEO of Nav, which is a data aggregation platform and marketplace that bridges the gap between small businesses and financial institutions. In the interview, Levi discusses the motivation behind founding Nav and how the company solves the challenges small businesses face managing their credit and securing financing solutions, among other topics.
Download and read the full report here.
How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A
Morty is an online mortgage broker. Our mission is to empower homebuyers to make smarter home financing decisions. With a modern tech stack and a marketplace of lenders, we offer customers the most options, great rates, and a transparent process.
What surprised you the most in the fintech industry in 2017?
That there wasn’t more innovation in the mortgage space. It’s the only lending vertical that hasn’t moved online- credit cards, student loans, small business loans, personal loans- all have a big online presence. There is still so much to be done in mortgage, it’s exciting.
Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A
In an article penned for JD Supra by law firm Ogletree, Deakins, Nash, Smoak & Stewart, P.C., experts warned of a type of payroll scam that sees fraudsters diverting direct deposits from employee accounts to criminal accounts.
According to the firm, fraudsters use a phishing scam by sending an email from an address similar to a legitimate company account.
Ogletree Deakins warned that not only does this scam result in lost funds, but it is ultimately a data breach, with scammers gaining access to corporate systems and data. The report also noted that scammers are targeting all types of businesses using all types of payroll providers.
Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A
The fintech industry is the powerhouse behind the meteoric rise of the peer-to-peer lending market. After several platforms launched online payments, it was only a matter of time before new ones emerged offering lending services that are offered by and to registered members.
LendingClub Corp (NYSE:LC) has been one of the most notable players in this space and its popularity pushed it public in 2014. However, since then, the company has struggled to live up to expectations, reflecting the actual picture of the status of the peer-to-peer lending.
According to critics, while peer-to-peer lending is an attractive option for borrowers looking for alternative financing solutions, it appears to have growth limitations due to lack of funding for new products. Peer-to-peer lending platforms do not take deposits and this is a limiting factor, but analysts suggest that if they are to grow to the point of rivaling the mainstream lending market, then they may have to start taking customer deposits.
How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A
TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.
The dealmakers financing top adviser technology (InvestmentNews), Rated: A
It’s impossible to look at the landscape of modern adviser technology without seeing Steve Lockshin’s footprints.
As an early investor in Betterment, Mr. Lockshin, 41, was instrumental in encouraging the robo-adviser to pivot from competing against advisers to partnering with them.
Brad Bernstein could see the role of advisers was changing.
What was once an industry of investment managers and salespeople was shifting to financial planning. Driving the change was technology — automating and commoditizing many of the ways advisers traditionally added value for clients. Mr. Bernstein, 51, managing partner at growth equity firm FTV Capital, believed there was a demand for products that helped advisers better articulate their value to clients.
That’s what attracted Brooks Gibbins, 45, to the industry when he founded FinTech Collective with his partner, Gareth Jones, in 2012. The venture capital firm has been one of the most active early-stage fintech investors over the past five years, seeding some of the biggest names on the adviser fintech scene.
Seeing the opportunity for adviser fintech startups to get acquired by, or partner with, financial institutions, Ian Sheridan decided to draw on his more than 25 years of experience in the financial services industry — working in wealth, retirement and investing in startups — to identify which technology would be part of the next wave of innovation.
Fidelity rocked the adviser fintech world in 2015 when it acquired eMoney, one of the most popular financial planning and client portal tools among independent advisers. The reported $250 million price tag proved there was money to be made in adviser fintech.
“Prior to that, there was good technology out there, but there wasn’t this stream of new business models, this new equity flowing in,” said Mike Durbin, 50, the president of Fidelity Institutional who spearheaded the deal. “The pace has clearly quickened.”
After a career that took him from E.F. Hutton to founding the Lockwood family of companies, Len Reinhart turned toward private investing in retirement.
American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A
The Florida legislature kicked off its legislative session by introducing Florida Senate Bill 894 and House Bill 935, legislation that could cover private mortgage lenders. The bills, introduced by Sen. Rene Garcia (R-Miami) and Rep. Jeanette Nunes (R-Miami), would eliminate a longstanding business purpose exemption for loans secured by a Dwelling.
On January 18, the bill passed the House Insurance and Banking Subcommittee with a 13-1 vote. On January 24, the House Commerce Committee passed the bill on a unanimous vote. The Senate similarly passed the bill on a unanimous vote in the Senate Banking and Insurance committee on January 23.
American Association of Private Lenders’ (AAPL) position is that the proposed regulation would harm Florida residents, business and the state’s economic growth by consolidating power to a few licensed parties. Private lenders provide much needed capital to a marketplace which is underserved by large financial institutions. Professional business parties need to be able to work with each other without significant regulatory intervention. The proposed regulation would result in less market competition, translating to higher interest rates, a higher cost of credit and would force business out of Florida and into neighboring states including Alabama, Georgia, Tennessee, North and South Carolina, all of which exempt business purpose loans from licensing requirements.
Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B
dv01, the data management, reporting, and analytics platform that provides institutional investors insight into lending markets, today announced the appointment of Amy Johnson as Chief Operating Officer. Johnson will report to dv01 founder and CEO, Perry Rahbar.
As COO, Johnson will be responsible for dv01’s finance, legal, and sales efforts, including helping execute the company’s vision and scale its operations.
The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B
Reston, Va.-based online lender StreetShares closed $23 million in equity funding on Jan. 24. The lender focuses on veteran-owned small businesses and relies on a peer-to-peer lending model. About $20 million of the new round is from Bethesda, Md.-based firm Rotunda Capital Partners. Previously, StreetShares had raised $8.3 million between three rounds.
Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA
An Aviva executive has backed the rise of robo-advisers and called for a shake-up of financial advice to help open up the industry to the mass market.
Andy Briggs, chief executive of Aviva UK Insurance, said the current regime is freezing out large swathes of the population because only the upper echelons can afford the hefty fees.
Mr Briggs said robo-advisers could also be more powerful and beneficial to customers if the artificial intelligence did not have to carry out full financial assessments.
Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A
The committee will also consider the regulation of SME lending and whether banks should be bound by a broader set of duties when dealing with SMEs.
The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A
6) Innovative Finance ISA
An Innovative Finance ISA (IFISA) is a peer-to-peer lending or crowdfunding product. In some instances, you can generate returns of around 8 – 9% by lending to private borrowers or by taking stakes in ‘crowdfunded’ investments. The IFISA is also subject to the same £20,000 annual ISA allowance so you can split your money between this ISA, as well as cash and stocks and shares.
While this is regulated by the FCA, peer-to-peer lending is not covered by the FSCS meaning your capital is at risk.
Things can only get better, says Christie & Co (The Caterer), Rated: B
Easily available debt from banks, financial institutions, peer-to-peer lending and even crowdfunding, together with forecasts of revpar growth of 2.4% in London and 2.3% in the regions, will help drive investments. Strong leisure business enjoyed by hotels last year – up 20% – is expected to continue to grow, depending on a continued weak pound.
Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B
A UK start-up that is aiming to end the culture of late payment that plagues British business has recruited two FTSE 100 chairmen as investors and advisers.
David Tyler, chairman of supermarket chain J Sainsbury, and John Gildersleeve, chairman of property group British Land, have joined the advisory board of Previse.
The London-based business pays supplier invoices instantly and collects the money from customers later. By analysing years of payment data it uses artificial intelligence to calculate the likelihood it can collect from the big customer. It has pilots running with two large corporations and is in talks with dozens more, Mr Gildersleeve told the Financial Times.
Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A
OneConnect is the only one-stop FinTech-empowered solutions provider in China. Financing of the three subsidiaries received positive responses, particularly from international institutional investors, including the SoftBank Vision Fund (which invested in Ping An Good Doctor and Ping An Healthcare Technology), International Digital Group (IDG) and SBI Group etc., proving that the capital market fully recognizes Ping An’s technological innovation, the business model for its technology as well as the growth potential and business value of the Group.
Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA
Today Banco BNI Europe announced it will start lending on Fellow Finance.
‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.
U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA
U.S. payments firm Stripe said on Monday it would place its first engineering center outside its home market in the Irish capital Dublin, attracted by the city’s growing technology workforce and global outlook.
Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA
Estimates differ, but according to TechFluence, a technology research firm with offices in Frankfurt and London, the European market had assets under management of about $3.5 billion at the end of 2017. That compares with an estimated $200 billion to $250 billion in the U.S., according to Burnmark, a fintech research firm. Estimates of the number of services range from 98 to 126 in Europe, compared with about 200 in the U.S.
The cost of entry is also much lower: generally €5,000 to €10,000 (about $6,200 to $12,400), versus hundreds of thousands at least for a discretionary service through a bank, says Timo Pfeiffer, head of research and business development at Solactive AG, an index provider that has researched the growth of robo advisers in Europe.
Popular with banks
This has led to a number of banking groups preparing robo-adviser offerings, Mr. Mellinghoff says. One example is Comdirect, a subsidiary of Commerzbank , CRZBY -3.17% which launched a robo-advisory platform in May. This service, called Cominvest, had gained assets of more than €200 million as of end of December and is expected to grow rapidly in the coming years, says Sabine Schoon, head of corporate strategy and consulting at Comdirect.
The European market has also attracted interest from major U.S. providers; BlackRock Inc. BLK -2.98% announced in June 2017 that it was taking a minority stake in Scalable Capital, a robo-adviser specialist that operates mainly in the German and British markets.
BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A
Spanish bank BBVA’s dash to get customers to buy products digitally rather than in branches helped it report a 20 per cent rise in underlying full-year profits, with results boosted by lower costs as well as higher revenues.
Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A
Top P2P cryptocurrency startup Etherecash has announced that its ECH token will be listed on popular cryptocurrency exchange QRYPTOS on 6th of February 2018, following a successful crowdsale in which the company raised over 40 million USD. This news comes as The Estonian-based lending startup saw a very successful Q4 to 2017 as it gears up for its token distribution in early 2018.
Crypto-lending ICO Etherecash recorded contributions of over 40 million USD and over 46000 new registrations.
GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B
GN Compass is the first peer-to- peer lending platform for Cryptocurrency-Backed Loans.
All transactions are verified and distributed on the Ethereum Blockchain. GN Compass is joining an expanding group of pioneering projects integrating the Bancor Protocol to maximize the trading liquidity of GN Compass tokens.
Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B
New business inflows almost doubled for Europe’s exchange traded fund industry in 2017, in the run-up to the EU’s introduction of rules designed to improve market transparency and strengthen investor protection.
Net inflows into European-listed ETFs reached a record $108bn last year, up from $55.7bn in 2016, according to ETFGI, a London-based consultancy.
Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA
A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” studies the disruptive forces shaping the future of equity crowdfunding.
View the infographic here.
Disruptive innovation in digital banking (Deloitte), Rated: AAA
A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in digital banking.
View the infographic here.
IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A
IdentityMind Global, Digital Identities You Can Trust, an SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud, announced the immediate availability of its KYC Plug-in for ICOs which provides a turnkey solution for customer onboarding functionality and user experience to walk ICO participants through the know your customer (KYC) process to meet regulations worldwide.
BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A
Bahrain FinTech Bay (BFB) and the Fintech Consortium (FTC) have announced a strategic partnership with OffrBox, a New York City-based Fintech start-up that has developed an end-to-end real estate transaction platform on which one can buy and sell residential properties online.
How early-stage startups raise money (Times of India), Rated: A
The first ’round of funding’ Abhishek Latthe got when he was setting up his wearable device startup SenseGiz in 2013 was from his family and friends. The next year, he set up a crowdfunding page on Kickstarter and raised $47,000. Late in 2014, he took out a bank loan. It was only two years later in 2015, that he could convince Karnataka Semiconductor Venture Capital Fund to back him with Rs 3 crore.
Banks do not back companies without collateral and since the business model is unproven, other investors too hesitate. So, funding options include getting help from friends and family, crowdfunding, or dipping into one’s savings, but how do founders decide on the path to take?
Gadkari says peer-to-peer lending and bridge funding, which fulfil a company’s short-term working capital needs, have also become popular. Choosing the best funding option depends on the company’s need. The next step for an entrepreneur is to negotiate the company’s valuation.
FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A
Lending is one of the oldest professions in the world and is one of the pivotal reasons for the banking system to take shape.
There is evidence of lending activities dating back to 2,000 BC between merchants, farmers and traders.
However, up till now, lending as an activity has been largely limited to financial institutes such as banks and Non-banking Financial Companies (NBFCs).
For instance, lenders on Faircent.com usually avail average gross returns of 18% to 26% per annum. This makes online P2P loans a lucrative alternative investment avenue for them.
What makes online P2P lending even more lucrative as an asset class for potential investors is the fact that it offers lenders the opportunity to diversify their investments across multiple risk buckets and loan requirements.
Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B
Sapan Gupta a Practice-Head at Shardul Amarchand Mangaldas said, “capitalising on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors”.
After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA
Decentralized p2p lending platform Karma has just announced trading as well as access to its platform and blockchain solutions. The project has now been backed by Danish fintech startup OpenLedger. Karma’s p2p lending platform can be used on the OpenLedger DEX platform and the Korean exchange CoinLink.
Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA
According to a report released earlier this month by EY, 21 percent of people in the world — about 1.6 billion people — are underbanked. More than 200 million micro and SMBs fall into the underbanked category, too, with access to finance the largest hurdle for many of these firms.
EY pinpointed the APAC region as a particularly wide opportunity for financial services players to address this gap: Bank revenue in this market, researchers said, could reach $88 billion by 2020. If traditional banks don’t step in, alternative financial services firms will.
“A lot of smaller, private small businesses are under-funded,” Tran noted. “It’s not like here [in the U.S.], where we have an established financial and banking system. If you implement something like a decentralized blockchain, a P2P lending system, that would enable [SMBs] to get funded a lot easier than going through the normal banking system. With blockchain technology, you can put a platform together that is smart contract-based, allowing individual investors to participate in a growing economy. On the other hand, you allow [SMBs] to get funded very quickly.”
Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA
Online payment processing solutions
Financial products comparison site
SME focused peer2peer lending platform
Financial products comparison site
Peer-to-peer lending platform
StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A
Innovation platform startAD will host a ten-day entrepreneurship programme, Venture Launchpad, at New York University Abu Dhabi (NYUAD), from February 18-27.
It will see ten fintech startups pitch their business ideas to investors. UAE-based early-stage startups are encouraged to apply by February 12, 2018, the application deadline.
The programme will equip them with the tools and knowledge to develop a scalable and capital efficient scheme. These include insights into crowdfunding, peer-to-peer lending, blockchain, algorithmic trading, credit scoring, cryptocurrency, payments, insurance tech and money transferrals.
Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA
Brazilian fintech EBANX announced on Wednesday it has secured a $30 million investment from FTV Capital.
EBANX also processes payments for major merchants from 50 different countries, including the U.S. and China. The company reported that just last year it processed $1.2 billion in cross-border transactions and achieved the milestone of helping more than 30 million users from the region gain full access to major international e-commerce merchants.
News Comments Today’s main news: Alibaba acquires 33% stake in Ant Financial. MPL issuance grew by 100% year-over-year in Q4 2017. RateSetter prepares investors for IFISA launch. Bitbond launches alt investment fund with 1741 Fund Management. Today’s main analysis: An empirical analysis of Groundfloor’s loan vintages. International P2P lending volumes for January 2018. Today’s thought-provoking articles: The effect of […]
- Today’s main news: Alibaba acquires 33% stake in Ant Financial. MPL issuance grew by 100% year-over-year in Q4 2017. RateSetter prepares investors for IFISA launch. Bitbond launches alt investment fund with 1741 Fund Management.
- Today’s main analysis: An empirical analysis of Groundfloor’s loan vintages. International P2P lending volumes for January 2018.
- Today’s thought-provoking articles: The effect of Groundfloor’s origination growth on quality. European alternative finance expanded by 41% in 2016. India’s road to SME financing. Indonesia’s fatwa on sharia-based lending.
- Marketplace lending grew by 100% Y-o-Y in Q4 2017. AT: “According to PeerIQ’s securitization tracker.”
- Groundfloor analyzes its own origination growth effects on quality. AT: “A very interesting analysis, but I’d be interested in what third parties say.”
- Juniper Square raises $6M.
- Overstock intros robo-advice platform tZERO Advisors. AT: “TZERO is a blockchain-based platform. Are there any blockchain-based robos yet?”
- States pick up on payday lending rules where CFPB loses ground.
- PayPal CIO joins Elevate’s BOD.
- Chase targets millennials for Zelle with social media.
- What House subcommittee says about fintech and lending.
- EquityBuild launches hybrid capital fund website.
- An easy way to boost your monthly income.
- Square allows bitcoin trading.
- LendingPoint names new CFO.
- RateSetter prepares investors for IFISA launch.
- Innovative Isas take off.
- Folk2Folk launches local lending movement.
- Novae GC joins Wonga.
- Goji celebrates first year of lending bond.
- The Business Funding Show.
- Alibaba buys 33% stake in Ant Financial. AT: “Already one of the big players in the global lending scene, I wonder what this will do to boost Ant Financial’s prowess internationally.”
- MYbank uses its own technology.
- Bitbond, with 1741 Fund Management, launches alternative investment fund.
- European alt finance expanded by 41% in 2016.
- Bob Diamond joins Corrado Passera acquisition vehicle board.
- SPAXS looking at 5 banks to buy.
- Ireland hosts tech startups of former Googlers, Facebook peeps.
- January P2P lending volumes. AT: “Big gains from Bitbond, Lending Works, and Lenndy, big declines at Ablrate, Proplend, and ThinCats.”
- SoftBank to get a seat on Moven’s board as JV targets Asian banks.
- nCino gets injection fro Salesforce.
- Several unnamed countries investigate Coincheck.
- India’s SME financing road.
- A push for blockchain, cyber technology.
- What Faircent, MobiKwik think about the budget.
- P2P lending players to benefit from 10% long-term capital gains tax.
- United States
- PeerIQ 4Q17 securitization tracker shows growth of marketplace lending industry (Bankless Times), Rated: AAA
- THE EFFECT OF ORIGINATION GROWTH ON QUALITY: AN EMPIRICAL ANALYSIS OF LOAN VINTAGES (Groundfloor), Rated: AAA
- Juniper Square raises $ 6M for its real estate investment platform (TechCrunch), Rated: A
- Overstock Introduces Robo-Advising Investment Platform tZERO Advisors (Crowdfund Insider), Rated: A
- States mull loosening of laws in response to CFPB payday rule (American Banker), Rated: A
- Bradley Strock, PayPal CIO, Joins Elevate’s Board of Directors (BusinessWire), Rated: A
- Chase is using memes and GIFs to bring millennials to QuickPay (Tearsheet), Rated: A
- Subcommittee hearing looks at challenges, opportunities with fintech (Financial Regulation News), Rated: A
- EquityBuild Launches New Website Showcasing Their New Revolutionary Hybrid Capital Fund (PR Web), Rated: A
- How to boost your monthly income: The easy way (Augusta Free Press), Rated: A
- Square shares climb after the payments company launches bitcoin trading for most users (CNBC), Rated: B
- LendingPoint Names Antonio Martino as New Chief Financial Officer (BusinessWire), Rated: B
- United Kingdom
- RateSetter starts preparing investors for IFISA launch (P2P Finance News), Rated: AAA
- Innovative Isas finally take off (MoneyWeek), Rated: A
- Folk2Folk launches local lending movement (Bridging&Commercial), Rated: A
- Novae GC joins payday lender Wonga after company takeover (The Lawyer), Rated: A
- Goji celebrates first year of investment bond (Bridging&Commercial), Rated: B
- The Business Funding Show closes the funding knowledge gap (KCW Today), Rated: B
- Alibaba nabs 33% stake in Alipay operator A (IT Brief), Rated: AAA
- Alibaba-backed online lender MYbank owes cost-savings to home-made tech (The Star), Rated: A
- European Union
- Bitbond Launches Alternative Investment Fund in Partnership with 1741 Fund Management (Finovate), Rated: AAA
- European Alternative Finance Market Expanded by 41% in 2016, P2P Consumer Lending Leads (Crowdfund Insider), Rated: AAA
- Bob Diamond to join board of Corrado Passera acquisition vehicle (Financial Times), Rated: A
- Italy’s SPAXS shortlists five banks in acquisition hunt (Reuters), Rated: A
- Google and Facebook set off a second wave of fintech talent (Financial Times), Rated: A
- International P2P Lending Volumes January 2018 (P2P-Banking), Rated: AAA
- Moven To Buy US Bank, Create Joint Venture In Japan With SBI (PYMNTS), Rated: A
- Salesforce boosts nCino global expansion plans (American Banker), Rated: A
- Several countries investigating Japanese virtual coin heist (e27), Rated: B
- Jaitley extends avenue for SME financing, bad loans in the sector now on radar (Economic Times), Rated: AAA
- Indian Budget 2018: A Push for Blockchin and Cyber Tech (Bank Info Security), Rated: A
- What do Ola, ShopClues, Practo, and Paytm feel about the budget? (Yourstory), Rated: A
- Budget 2018: 10% Long Term Capital Gain tax to benefit P2P lending players (moneycontrol), Rated: B
- Ulema council, OJK to issue fatwa on sharia-based fintech lenders (The Jakarta Post), Rated: AAA
- Five ways to finance your dream (Standard Digital), Rated: AAA
PeerIQ 4Q17 securitization tracker shows growth of marketplace lending industry (Bankless Times), Rated: AAA
Ten marketplace lending securitizations priced this quarter totaled $4.4 billion, a record for quarterly issuance, head of research Ashish Dole said. That is 100 per cent growth in issuance over the same quarter in 2016. Cumulative issuance is now $28.2 billion from 106 deals.
THE EFFECT OF ORIGINATION GROWTH ON QUALITY: AN EMPIRICAL ANALYSIS OF LOAN VINTAGES (Groundfloor), Rated: AAA
As we addressed those limitations by qualifying our offering with the SEC and raising our first round of venture capital funding in 2015, new critics emerged to say that while we might be able to lend in a local market at a small scale, we could never lend nationwide in very large numbers without compromising loan quality. In 2016, we set out to build a lending operations team (including risk management, underwriting, and asset management) with the professional expertise, policies, tools and processes to do just that. Our aim was to improve loan quality and volume simultaneously, well beyond our home market.
How have we done?
Vintage A is composed of 88 relatively small, mostly local Atlanta-area loans originated during Groundfloor’s formative years, a period of 30 months (2.5 years).
Vintage B, by contrast, is composed of 222 loans that were originated following our addition and application of greater lending expertise. This vintage is more than 2.5X larger, and was originated over the course of 24 months (two years, a 20% shorter period of time).
Performance Measure #2: Timeliness of Repayment
For each vintage, we analyzed when loans repaid in relation to their maturity dates. Here is a comparison of the timeliness of repayment for Vintage A and Vintage B, with percentages provided to break down the share of repaid loans.
Here is a snapshot of the situation as of December 31, 2017:
Juniper Square raises $ 6M for its real estate investment platform (TechCrunch), Rated: A
Today’s funding round brings the company’s total funding to date to $8 million; the company plans to use the new influx of capital to accelerate its product development and grow its team to better service its user base.
Overstock Introduces Robo-Advising Investment Platform tZERO Advisors (Crowdfund Insider), Rated: A
Overstock.com, Inc. (NASDAQ:OSTK) has introduced a digitally-driven investment platform (aka robo-advising), presented by tZERO Advisors. The service is accessible to investors through the online retailer’s FinanceHub. For a monthly fee of $9.95, investors can either select from a group of pre-established Adaptive Dynamic Portfolios matched to their investment profiles, or create a customized blend of these portfolios.
States mull loosening of laws in response to CFPB payday rule (American Banker), Rated: A
The Consumer Financial Protection Bureau’s payday loan rule was supposed to reduce the number of Americans who get mired in debt they can’t afford.
But in an ironic twist, the 4-month-old rule is being used in state legislatures to justify the creation of a new category of loans that would be even costlier for many borrowers.
One such bill in Florida has zipped through three legislative committees in recent weeks. The Indiana House of Representatives voted to pass a similar measure Wednesday.
Bradley Strock, PayPal CIO, Joins Elevate’s Board of Directors (BusinessWire), Rated: A
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that Bradley Strock has joined its Board of Directors, effective immediately.
Mr. Strock joined PayPal in 2011 and since 2014 has been its Chief Information Officer.
Chase is using memes and GIFs to bring millennials to QuickPay (Tearsheet), Rated: A
JPMorgan is focusing its Zelle efforts on millennials, despite the platform outwardly claiming it’s not targeting that age group.
Chase will soon roll out an animated GIF campaign on social media as the second part of its Quick Pay with Zelle campaign.
With Chase QuickPay with Zelle, they can set recurring payments so you never wait for rent again. The best part? It’s already in your Chase Mobile app. href="https://t.co/tQyDUm75Hf">pic.twitter.com/tQyDUm75Hf
In 2017 Chase saw a nearly 50 percent increase in p-to-p transactions — which includes all transactions before and after it joined the Zelle network — and a 15 percent increase in enrollments.
On Monday Zelle reported it transacted $75 billion across its member banks in 2017. Venmo processed $30 billion in the same period.
Subcommittee hearing looks at challenges, opportunities with fintech (Financial Regulation News), Rated: A
The House Subcommittee on Financial Institutions and Consumer Credit convened this week to discuss opportunities and challenges in the financial technology, or fintech, market.
“Fintech lenders present an opportunity to expand credit access and quality. Although such lenders should be subject to appropriate regulation, the regulation must work with the fundamental economic reality of the market,” said Brian Knight, director of the program on financial regulation and senior research fellow at Mercatus Center, George Mason University. “Ensuring that regulations do not burden fintech lenders more heavily than their bank competitors are burdened and that the validity of their loans is not in doubt are important steps toward helping realize the promises of innovation.”
EquityBuild Launches New Website Showcasing Their New Revolutionary Hybrid Capital Fund (PR Web), Rated: A
EquityBuild announces the launch of their completely new website and newest investment product EquityBuild Fund.This site is dedicated to the company’s new revolutionary hybrid capital fund only available on their platform.
How to boost your monthly income: The easy way (Augusta Free Press), Rated: A
Safe investments are a real thing, and there cannot be a more secure way of investing in interest rates at a lending club. However, the alternative for which you must search is a peer-to-peer lending platform, where investors finance loans and then get interest rates as high as 10% on a yearly basis. For instance, you could start with an initial deposit of $2,500, as the starting investment rate is 25%.
Cryptocurrency passive income is a thing – And you should try it
- Decred – Decred is a self-funded crypto platform, where investors have a share of the platform’s currency even at the very beginning.
- AKR – is a mining platform which offers each investor, even at the beginning of their journey a “delegated proof of work”. It works literally all around the clock and you virtually have to put NO EFFORTS.
- NEO – another passive crypto income for those searching to round a bit their monthly income. The network works on “Gas” – this is the name of this small cryptocurrency.
LendingPoint Names Antonio Martino as New Chief Financial Officer (BusinessWire), Rated: B
LendingPoint, the online balance sheet lender and provider of the LoanHero point of sale financing platform, today announced that Antonio Martino has joined the company as its Chief Financial Officer (CFO).
Martino is a financial industry leader with more than 25 years of experience spanning 10 countries. Most recently he was Director, Citi Corporate Treasury, where he had global oversight roles within the asset liability management and balance sheet management processes for Citibank, N.A. Previously, Martino served as CFO of Citibank in Turkey and across Central Europe, with roles in Istanbul and Budapest, Hungary. In addition, Martino was Finance Director of Citibank Poland’s consumer banking division in Poland and Vice President of Finance within Citibank credit card business in Canada. Martino started his career in public accounting with Ernst & Young.
RateSetter starts preparing investors for IFISA launch (P2P Finance News), Rated: AAA
RATESETTER has begun emailing existing investors to get them ready for the launch of its Innovative Finance ISA (IFISA) this month.
The peer-to-peer lender sent messages to its customers on Thursday revealing that the IFISA would be made available to investors in the order they opened accounts.
Folk2Folk launches local lending movement (Bridging&Commercial), Rated: A
The local lending movement has been created by the peer-to-peer lending platform to build and sustain socially and financially successful rural communities.
Folk2Folk intends to incorporate this ethos into its behaviour and activity.
The movement involves the participation and support of the platform’s lenders and borrowers, legal and accountancy partners, local authorities, MPs, chambers of commerce, local enterprise partnerships, surveyors, land agents, local cooperatives, leisure and tourism platforms, interest groups, community associations, charities, business groups and banks.
Novae GC joins payday lender Wonga after company takeover (The Lawyer), Rated: A
Payday loan company Wonga has hired a new general counsel following the departure of Bill Flynn after nearly three years.
Goji celebrates first year of investment bond (Bridging&Commercial), Rated: B
The Business Funding Show closes the funding knowledge gap (KCW Today), Rated: B
The only funding exhibition in the UK and EU is returning to London for its third year. The Business Funding Show will be held on 22nd February 2018 at East Wintergarden and will connect entrepreneurs to top funders and service providers through conference talks, an exhibitor showcase, and one-to-one investment clinics.
BFS aims to bring awareness to entrepreneurs about alternative funding options, from crowdfunding and peer-to-peer lending to business angels and venture capital. The event saw a 33% increase in attendance in 2017, a figure the organisers aim to surpass this year.
Alibaba nabs 33% stake in Alipay operator A (IT Brief), Rated: AAA
With Alipay and Alipay Wallet under its umbrella, the company also runs 4 other major businesses: Yu’e Bao, Zhao Cai Bao, Ant Credit, and MYbank, a cloud based online lender the company was in the middle of establishing at the time of the name change.
Now, Alibaba Group Holdings has announced it will strengthen its strategic relationship with Ant Financial by acquiring a 33% equity stake in the company. The parties have agreed to certain amendments to their 2014 transaction agreements to facilitate the transaction.
Under the terms of the amended agreements, Alibaba will acquire newly-issued equity from Ant Financial in exchange for certain intellectual property rights owned by Alibaba exclusively related to Ant Financial.
Alibaba-backed online lender MYbank owes cost-savings to home-made tech (The Star), Rated: A
MYbank, a Chinese online lender that is an offshoot of Alibaba Group Holding Ltd, has built its business on doing things cheaply.
The bank says it can deliver loans to borrowers across China at lightning speeds for up to 1,000 times less than it would cost brick-and-mortar banks to do so.
MYbank employs about 300 people, half of whom are technicians.
As a result, the cost of approving a small business loan can be as little as 2 yuan (RM1.24), compared to at least 2,000 yuan (RM1,239) at a traditional bank, according to data provided by the bank. MYbank has built its technological infrastructure with Chinese-made technology, avoiding more expensive products from companies like IBM Corp, Oracle Corp and Dell EMC, which form the network backbone for much of China’s finance sector, Huang said.
MYbank is one of a handful of Chinese lenders – along with Tencent Holdings Ltd’s WeBank – that are founded completely with private investment. Since mid-2015, MYbank has served more than 7 million small business owners, Huang said. The bank is seeking to expand its network to include China’s 70 million to 100 million small businesses under-served by traditional financial institutions.
The bank’s net interest margin – around 3% to 5% – is higher than those for China’s major banks, which target large state companies, Huang said.
Bitbond Launches Alternative Investment Fund in Partnership with 1741 Fund Management (Finovate), Rated: AAA
Peer-to-peer small business financing platform Bitbond has entered into a partnership with 1741 Fund Management to launch an alternative investment fund.
European Alternative Finance Market Expanded by 41% in 2016, P2P Consumer Lending Leads (Crowdfund Insider), Rated: AAA
The European online alternative finance market grew by 41 per cent to 7.7 billion euros in 2016, according to the 3rd annual European Alternative Finance Industry Benchmarking Report by the Cambridge Centre for Alternative Finance. The report entitled “Expanding Horizons” indicates that online alternative finance showed growth in new areas across Europe.
For country-specific numbers, click here.
Among other findings of the report:
• Institutionalization grew considerably from 2015 to 2016, with 45 per cent of peer-to-peer consumer lending and 29 per cent of peer-to-peer business lending funded by institutions such as banks, pension funds and asset management firms.
• Online alternative finance for business continued to grow, providing 1.14 billion euros to more than 14,000 businesses throughout Europe. Debt models including peer-to-peer business lending accounted for 67 per cent of business finance, while equity models accounted for 27 per cent.
• Estonia ranked first for alternative finance volume per capita for the second year in a row, at 63 euros, followed by Monaco (51 euros) and Georgia (28 euros).
• Countries in which platforms believe that existing regulations are adequate are more likely to show higher levels of alternative finance per capita and a larger share of business funding.
• While overall perceptions of regulatory adequacy are divided, the greatest discontent concerns laws governing equity-based crowdfunding
• Two types of risk are of greatest concern to European alternative finance platforms: a potential collapse of a well-known platform due to malpractice, and fraud involving one or more high-profile transactions.
Bob Diamond to join board of Corrado Passera acquisition vehicle (Financial Times), Rated: A
Bob Diamond plans to join the board of a €600m acquisition vehicle chaired by Corrado Passera, which listed on Thursday, bringing together two of Europe’s best known ex-bankers to buy an Italian lender to small businesses.
After the cash shell’s initial public offering on Thursday, Mr Passera told reporters in Milan that it had shortlisted five small Italian lenders and would complete the acquisition of one of them for up to €60m — allowing it to become a bank.
The plan is to turn the small bank into an online lender to small businesses and a merchant bank, which will buy non-performing loans from other banks and parcel them up before selling them on to institutional investors.
Italy’s SPAXS shortlists five banks in acquisition hunt (Reuters), Rated: A
Saddled with one quarter of Europe’s nearly $1 trillion debt pile, which has rattled investor confidence in them, Italian banks have become more selective in their lending and compete to lend to low-risk firms, squeezing profit margins, while many small businesses find it hard to access funds.
Shares in SPAXS, which will use up to 10 percent of the amount raised in the IPO for the acquisition, were 4.04 percent higher at 1038 GMT on their market debut on the alternative investment segment of the Milan bourse.
Google and Facebook set off a second wave of fintech talent (Financial Times), Rated: A
One cloud on the horizon, however, is Brexit. The UK’s departure from the EU could make it harder for Irish fintechs to scale up quickly through expansion into the neighbouring British market, which many of them use as an early testing ground.
A good example of this is Plynk, a payment and messaging app aimed at young people, which was co-founded by Charles Dowd and Clive Foley in 2015, a year after Mr Dowd left Facebook. Based in the Camden Street area, Plynk last year raised €25m from investors led by Swiss Privée.
Another start-up that aims to build a global presence from its Irish base is TransferMate, which has handled more than $10bn of cross-border payments for businesses since it set up in 2010. Last year it raised €30m from Allied Irish Banks, with plans to offer the fintech’s software to all the bank’s clients.
By the end of this year, TransferMate expects to derive as much as half its revenue coming from clients in the US, where it has been approved by all 50 states. A third of its revenue is expected to come from European clients and a fifth from the rest of the world.
The most successful product of Ireland’s fintech scene is actually based in San Francisco. Stripe, which provides payment services to businesses, was founded by Irish brothers Patrick and John Collison, who have become paper billionaires thanks to its rapid growth.
Stripe has its European headquarters in Ireland, where it employs about 10 per cent of its 1,000 global staff. Iain McDougall, the company’s head of UK and Ireland, says the country’s fintech growth is being driven by “a second wave of talent in Ireland, spawned by the massive investment of Google, Apple, Facebook and Amazon in Silicon Docks”. A former Google employee himself, Mr McDougall says: “We’re starting to see some of that talent come through, not just college graduates with a couple of years experience . . . there’s now significant depth to it.”
International P2P Lending Volumes January 2018 (P2P-Banking), Rated: AAA
This month I added Linked Finance.
Zopa crossed the milestone of 3 billion GBP originated since launch.
Moven To Buy US Bank, Create Joint Venture In Japan With SBI (PYMNTS), Rated: A
According to a report in the American Banker, SBI will receive one seat on Moven’s six-member board and the companies will create a joint venture in Japan.
Of the funding the company will receive from SBI Group, some will go toward the joint venture to sell customized Moven software for Asian banks.
Salesforce boosts nCino global expansion plans (American Banker), Rated: A
NCino, a vendor of cloud-based banking technology, announced a new round of funding led by Salesforce Ventures to help fund its global expansion strategy.
The funding round led by Salesforce Ventures, the corporate investment group of Salesforce, also featured participation from another existing nCino shareholder. The amount of investment was not disclosed.
Several countries investigating Japanese virtual coin heist (e27), Rated: B
Takao Asayama, who is a member of the Singapore-based NEM Foundation that is behind the cryptocurrency, told reporters in Tokyo that it is working with exchanges to block the hackers from cashing out the stolen cryptocurrency. He did not name the countries involved in investigations.
Jaitley extends avenue for SME financing, bad loans in the sector now on radar (Economic Times), Rated: AAA
As bank credit to micro, small and medium enterprises shrink, the government has decided to get innovative by getting Non-Bank Finance Companies (NBFCs) and the burgeoning fintech industry to play a larger role in financing. However, NPAs in the MSME sector would also now undergo greater scrutiny.
“Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be a very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs,” said Finance Minister Arun Jaitley while presenting the Union Budget for 2018-19.
If we look at the NBFC segment first, it specialises in catering to sector specific financial needs covering retail; consumer and vehicle loans; micro, small and medium enterprises (MSMEs) and micro finance among others.
Jaitly also laid out a roadmap to use data generated by the Goods and Services Tax (GST) to enhance credit availability to the SME sector.
At end-March 2017, there were 11,522 NBFCs registered with the Reserve Bank, a number that is only bound to increase with fintech sectors like P2P being clubbed in the segment. The Economic Survey has revealed that the amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was cornered by large enterprises.
For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.
Indian Budget 2018: A Push for Blockchin and Cyber Tech (Bank Info Security), Rated: A
In a move to push adoption and development of new technologies, such as machine learning, artificial intelligence and the internet of things, the finance minister announced allocation of Rs 3,073 crore for the Department of Science and Technology.
Meanwhile, the finance minister’ pledge to encourage use of blockchain, the distributed ledger technology that supports cryptocurrencies, in payment systems has earned him accolades from some security practitioners.
“Blockchain can be effectively used to process banking transactions. I see blockchain-enabled wallets and blockchain-enabled cards as next big thing in the payment systems,” Jyoti says. “Blockchain can provide an extra layer of cybersecurity to the payment systems, which could have led to this decision.”
Blockchain has been popular among the banking industry in India. In fact, banks in India have formed a “bank chain,” an association of more than 20 banks where they discuss some typical use cases of blockchain.
Sapan Gupta, national practice head – banking and finance, at the law firm Shardul Amarchand Mangaldas, notes: “Capitalizing on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors. Segregating the use of blockchain from crypto-currencies reflects the government’s intention to use the technology in a gradual and safe manner.”
What do Ola, ShopClues, Practo, and Paytm feel about the budget? (Yourstory), Rated: A
Rajat Gandhi, Founder & CEO, Faircent.com
“The finance minister’s budget speech reflects the government’s intent to increase the credit access for the MSME sector and women entrepreneurs under MUDRA scheme. P2P lending is using technology and new-age data, and diligently working towards taking organised credit to the non and under-banked segments of the Indian economy. This is an opportunity for the government to directly invest or co-fund through registered P2P Lending Platforms and ensure credit access for MSMEs, New-To-Credit as well as female entrepreneurs. P2P lending is an asset class ensuring flow of investments from those with surplus to those in need. Hence it’s important that the lenders are supported through tax incentives. We look forward to working with the government towards the common goal of financial inclusion.”
Bipin Preet Singh, Co-founder, MobiKwik
“A reformist budget for startups and digital India. The government’s impetus on digitising the rural hinterlands, focus on smart cities, and commitment to blockchain technology will encourage the promotion of digital payments across the country, thereby making India truly digital. Further, disallowing cash payments beyond Rs 10,000 by trusts and institutions will boost digital payments. I commend the government’s decision to reduce corporate tax to 25 percent and improve the ease of doing business by providing a unique ID for every company on lines of Aadhaar. These initiatives will benefit startups and MSMEs immensely and lay a strong foundation for a progressive India. However, the government should consider regulating cryptocurrencies than curbing their use entirely.”
Budget 2018: 10% Long Term Capital Gain tax to benefit P2P lending players (moneycontrol), Rated: B
Imposing 10% long-term capital gain tax on equity investments may create some level playing field for the P2P lending industry. So far, the favourable tax treatment on long-term gains on equity investments made them a preferred choice for the investors. Now, those who are ready to take higher risk for earning better returns may also think of investing in P2P lending projects which have a better risk profile as compared to equity-oriented investments.
Ulema council, OJK to issue fatwa on sharia-based fintech lenders (The Jakarta Post), Rated: AAA
The Indonesia Ulema Council’s (MUI) sharia division and the Financial Services Authority (OJK) are preparing a fatwa to serve as a legal basis for the operation of sharia-based financial technology (fintech) lending institutions.
“Many non-Muslims are also interested in sharia-based fintech financing. So it has a very large potential market,” Adiwarman said as reported by kontan.co.id.
Since a trial run in November 2017, Investree has disbursed Rp 2.7 billion (US$189,000) in sharia-based financing.
Five ways to finance your dream (Standard Digital), Rated: AAA
It found that in 2015, Kenya and South Africa raised $16.7 million (Sh1.7 billion) and $15 million (Sh1.5 billion), respectively, in financing from various online channels. However, unlike in South Africa, most of the money raised using these alternative financing platforms in Kenya came from foreigners.
Overall, a total of $62.2 million (Sh6.4 billion) was raised across Africa, with more than 75 per cent of this money going towards funding start-ups and SMEs.
- Equity-based crowdfunding
- Peer-to-peer business lending
- Debt-based securities
- Donation-based crowdfunding
- Reward-based crowdfunding
News Comments Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise. Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks. […]
- Today’s main news: WeWork, SoFi partner on student debt. Marlette Funding closes largest securitization in company history. Kabbage targets larger businesses with expanded credit lines. LendInvest adds 200 brokers to buy-to-let panel. Signicat builds out identity assurance as a service with $2M fundraise.
- Today’s main analysis: France’s alternative finance sector grows by 50% while equity crowdfunding shrinks.
- Today’s thought-provoking articles: How Noto found room at SoFi. Why banks should rethink fees. Why P2P lending should fill the void in SME financing in India. Indonesia’s fintech lending boom exploits bank loans shortfall.
- SoFi partners withWeWork on student debt. AT: “This initiative is targeted toward WeWork’s employees and members, moving beyond an organization’s payroll to gain access to its wider network. With thousands of organizations all across America, and of course, overseas, SoFi could have hit upon a winning expansion strategy.”
- How Noto found room at SoFi. AT: “I don’t think the interesting part here is Noto’s aspirations for chief executive status. Rather, the interesting thing is the Square-Twitter-SoFi competition triad. Noto, caught in the middle of that, had to choose sides. He likely chose the winning side.”
- Marlette Funding closes largest securitization transaction in company history. AT: “Congratulations. Huge milestone.”
- Why banks should rethink fee models. AT: “They should rethink business models.”
- Kabbage expands credit line. AT: “The claim is that this is the largest credit line for any online lender yet. This takes Kabbage to a new level.”
- An interview with Kabbage’s CEO.
- Elevate appoints former PayPal executive as chief credit officer.
- Judge rebukes Consumer Financial Protection Bureau.
- Should you buy a home with crowdfunding?
- Best investment funds of 2018.
- House committee on financial services to hold fintech marketplace hearing.
- LendInvest enrolls over 200 brokers to buy-to-let panel.
- Ranger Direct Lending expects arbitration decision by mid-April.
- Significat to build out identity assurance as a service after $2M fundraise.
- France’s alternative finance sector grows 50%.
- 3 things that could drive fintech investment through the roof.
- Investly seeks 500K GBP through Seedrs.
- CB Insights, The New York Times partner on best venture capitalists list. AT: “Includes a link to the Times’ list of top 20 VCs.”
- FinTech, RegTech, SupTech. AT: “I still don’t know what SupTech is.”
- United States
- WeWork Joins Forces With SoFi to Help Employees & Members to Tackle Student Debit (Crowdfund Insider), Rated: AAA
- How Twitter’s Noto Found Room at SoFi (Market Realist), Rated: AAA
- Marlette Funding Closes Largest Securitization Transaction in Company History (BusinessWire), Rated: AAA
- Why banks should rethink their fee models (Tearsheet), Rated: AAA
- Kabbage expands credit line, targeting larger businesses (AltFi), Rated: AAA
- The Tao of Rob Frohwein (LinkedIn), Rated: A
- Elevate Appoints Former PayPal, loanDepot Executive Brian Biglin as Chief Credit Officer (BusinessWire), Rated: A
- California judge issues stunning rebuke to CFPB (RESPA News), Rated: A
- Should you crowdsource to buy a home? (Bankrate), Rated: B
- Best Investment Funds Options For 2018 (FX Daily Report), Rated: B
- House Financial Services Committee to hold Jan. 30 hearing on fintech marketplace (The National Law Review), Rated: B
- United Kingdom
- Over 200 brokers join LendInvest BTL panel (Bridging&Commercial), Rated: AAA
- Ranger Direct Lending Expects Princeton Arbitration Decision Soon (London South East), Rated: B
- European Union
- Signicat Raises $ 2 Million to Build Out its Identity Assurance as a Service Technology (Finovate), Rated: AAA
- France’s Alternative Finance Grows by 50% – Equity Crowdfunding Shrinks (Crowdfund Insider), Rated: AAA
- 3 things that could drive fintech investment in Europe through the roof (again) (PitchBook), Rated: A
- Pan-European Marketplace Investly Now Seeking £500,000 on Seedrs (Crowdfund Insider), Rated: A
- CB Insights is working with The New York Times to identify the best VC professionals. (CB Insights), Rated: AAA
- FinTech, RegTech and SupTech (Finextra), Rated: A
- IFM Investors ups stake in digital provider Decimal (Private Banker International), Rated: A
- Why P2P should be empowered to fill the void in SME financing (ET Rise), Rated: AAA
- India’s flourishing fintech sector is craving the finance minister’s attention (Quartz), Rated: A
- Indonesia’s fintech lending boom exploits shortfall in bank loans (Reuters), Rated: AAA
- Bank, fintech, telco partnership’ll drive financial inclusion (Punch), Rated: A
WeWork Joins Forces With SoFi to Help Employees & Members to Tackle Student Debit (Crowdfund Insider), Rated: AAA
Online lending platform SoFi announced on Monday that it has joined forces with WeWork to help WeWork’s more than 3,000 employees and over 175,000 members take on their student loan debt. The lender revealed that this is its first SoFi At Work partnership to extend beyond a company’s employees to include customer base.
How Twitter’s Noto Found Room at SoFi (Market Realist), Rated: AAA
Given SoFi’s ambitions and the ambitions of Square (SQ), the company run by Twitter CEO Jack Dorsey, Noto and Dorsey appear to be on a competition course. SoFi and Square both have ambitions of becoming full-service banks. And Noto, a former Goldman Sachs (GS) banker, has made it clear that this is a course he would like to pursue once he joins SoFi.
Square, which supplied $303 million in loans to customers in 3Q17 and has supplied over $1.8 billion in loans overall, already faces competitive pressures from Amazon.com (AMZN) and PayPal (PYPL) in the alternative lending market.
Marlette Funding Closes Largest Securitization Transaction in Company History (BusinessWire), Rated: AAA
Marlette Funding, LLC, the parent company of Best Egg, announced today it closed its fifth proprietary “MFT” securitization. Approximately $495 million of Best Egg loans were financed via $464.3 million of MFT 2018-1 Notes with four classes and one class of Certificates, with certain loan sellers retaining risk on a portion of the Notes and/or Certificates.
This is the first securitization of 2018 bringing the total program issuance to date to $1.7B, with capital provided by a broad set of investors. The transaction was significantly oversubscribed, upsized and successfully priced, reflecting Marlette’s differentiated product offering and superior credit performance. Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Citi, Deutsche Bank and Morgan Stanley. The Class A, B, C and D fixed-rate Notes were rated AA (sf), A (sf), BBB (sf) and BB (sf), respectively, by Kroll Bond Rating Agency (KBRA).
Year over year, Best Egg has demonstrated impressive scalability – 66% year-over-year growth in originations with only 9% growth in year-over-year fixed operating expenses and 29% reduction in marketing cost per loan.
Why banks should rethink their fee models (Tearsheet), Rated: AAA
If free checking accounts aren’t already a thing of the past, perhaps they should be, now that consumers are demonstrating that if something is valuable to them, they’ll pay for it.
About 77 percent of people have a “free checking account” at their bank, according to a studyfrom Cornerstone Advisors’ Ron Shevlin published last week. But nearly every free checking account holder paid at least one fee in the 12 months leading up to the survey. Out of 1,555 surveyed, 26 percent paid a third-party bank ATM fee and 25 percent paid an overdraft fee. They also paid fees to replace lost or misplaced ATM and debit cards, rush fees for those replacements, non-sufficient funds fees, wire transfer fees, international transaction fees, fees for overdraft protection and “extended overdrawn balances,” for stop payments and for statement copies, check copies and check image services.
But banks have been reporting flat fee income for the past six quarters. Service charges on deposit accounts have hardly moved in several years and banks are changing their overdraft programs to improve customer relationships, which eats into that fee income.
Bank of America has one of the most competitive mobile and digital banking offerings and no longer needs to give people an incentive to bank digitally instead of at branches (those were the terms of the account; those who wanted branch banking and paper statements paid an $8.95 monthly fee that was waived for customers who agreed to do all their banking digitally).
Almost 60 percent of people indicated they would consider switching accounts if their primary financial institution offered a hypothetical Amazon-like bundled checking account — which would include basic checking account services plus cell phone damage protection, ID theft protection, roadside assistance, travel insurance and product discounts — for a $5 to $10 monthly fee, Shevlin found.
Kabbage expands credit line, targeting larger businesses (AltFi), Rated: AAA
After previously securing a $200m asset-backed revolving credit facility from Credit Suisse in 2017, Kabbage has announced it will be offering lines of credit of up to $250k in an effort to attract larger businesses.
The expanded product will provide large businesses with greater purchasing power for longer-term investments, and is the largest credit line available from any online lender yet.
A recent survey of 800 small businesses conducted by the platform showed that more than 73 per cent of businesses expect to increase their revenue by more than 20 per cent in 2018.
The Tao of Rob Frohwein (LinkedIn), Rated: A
“Getting easy access to your data allows you to see your data and know if someone has compromised it.”
“One of our goals is to make it more advantageous to be a small business than a large business.”
Elevate Appoints Former PayPal, loanDepot Executive Brian Biglin as Chief Credit Officer (BusinessWire), Rated: A
Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Brian Biglin as Chief Credit Officer, effective immediately. Elevate also said it has granted inducement stock awards as part of Mr. Biglin’s employment.
He served as Chief Credit Officer at Bill Me Later when it was acquired in 2008 by PayPal, and he continued until 2014 as Chief Credit Officer at PayPal, where he helped grow the portfolio from $400 million to $6 billion and managed credit through the Great Recession. Mr. Biglin subsequently was Chief Risk Officer at loanDepot.com and at Intuit. At loanDepot he built a new consumer lending platform and helped create the first personal loan securitizations for the company; at Intuit he reduced fraud losses, improved customer experience, overhauled operations and increased efficiencies.
California judge issues stunning rebuke to CFPB (RESPA News), Rated: A
The Consumer Financial Protection Bureau’s (CFPB) first enforcement action against an online lender has ended with a judicial rebuke nearly as stunning as its case against the Accrediting Council for Independent Colleges and Schools.
Although a California district court ruled in favor of the CFPB in the case, it declined to confirm the CFPB’s request for restitution from the lender defendants, instead cutting the penalty award to a Tier One violation of the Consumer Financial Protection Act.
Should you crowdsource to buy a home? (Bankrate), Rated: B
Only a small handful of companies currently offer mortgages through this method. One of most well-established, SoFi, offers mortgages in 29 states and the District of Columbia through its peer-to-peer lending platform, which is a type of crowdsourcing where individual investors contribute through a lending platform, and in return earn interest on their investment, paid for by the borrower.
Feather the Nest offers a crowdfunding registry, where friends and family can donate toward your real estate goals. Every donation to your registry is charged a percentage of the amount given as a transaction fee.
Best Investment Funds Options For 2018 (FX Daily Report), Rated: B
#8: Peer to Peer Lending
Peer-to-peer lending platforms such as the Lending Club allow you to loan small amounts of money to individuals and earn a decent return of 6 percent or more. As a peer-to-peer lending investor, you are helping other people reach their goals. The good thing about this is that you are not giving large amounts of money to people who you do not know at all. According to experts, the benefits of investing in peer-to-peer lending platforms include the following:
• Easy to sign up and started
• Five to Seven percent returns
• Starting investment can be as small as $1,000
House Financial Services Committee to hold Jan. 30 hearing on fintech marketplace (The National Law Review), Rated: B
On January 30, 2018 at 10 a.m., the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee will hold a hearing, “Examining Opportunities and Challenges in the Financial Technology (“Fintech”) Marketplace.”
The Committee Memorandum states that the hearing “will examine the current regulatory landscape [for fintech], the need to amend or modernize the regulatory landscape or the necessity to amend existing financial laws or develop new legislative proposals that would allow financial services entities to use fintech to deliver new products and services to consumers.”
Over 200 brokers join LendInvest BTL panel (Bridging&Commercial), Rated: AAA
The lender launched the BTL product – which is only available via intermediaries – in late November.
LendInvest believes that assembling a panel of this size in just 10 weeks demonstrates the appetite brokers have to get behind the product.
Ranger Direct Lending Expects Princeton Arbitration Decision Soon (London South East), Rated: B
Ranger Direct Lending Fund PLC said on Monday it expects arbitration against Princeton Master Fund to conclude by mid-April.
Signicat Raises $ 2 Million to Build Out its Identity Assurance as a Service Technology (Finovate), Rated: AAA
Identity Assurance as a Service (IDAaaS) innovator Signicat has won phase two funding from Horizon 2020, the EU framework program for research and innovation. The $2 million grant (€1.6 million) will enable Signicat to continue development of its IDAaaS toolbox for use in Europe, and takes the company’s total funding to $3.9 million.
France’s Alternative Finance Grows by 50% – Equity Crowdfunding Shrinks (Crowdfund Insider), Rated: AAA
The annual Alternative Finance & Crowdfunding Barometer compiled by KPMG for the French Crowdfunding Association (Financement Participatif France, FPF) shows that in 2017 the French Alternative Finance market grew by 50%, driven by SME lending growth, and came close to the billion euro mark, at €940 million. Crowdfunding, as a subcategory of alternative finance open to retail investors, grew slightly slower at 44%, and equity crowdfunding shrank.
- Institutional SME lending grew by 157% to €215 million,
- SME crowdlending and crowdinvesting in SME debt grew by 102% to €195 million.
The market is heavily concentrated, with the top 5 platforms, Lendix, Credit.fr, Lendosphère, Unilend and Lendopolis accounting for more than 80% of the loans originated. Credit.fr, which was recently acquired by investment firm Tikehau Capital is growing fastest. Funded for more than 80% by non-retail money, Lendix captures more than half of the market. Most recently, the platform raised €120 million of a new €200 million investment fund designed to finance SME loans from 2018 on.
Consumer Lending Decelerates
Alternative consumer lending grew only by 17%, from €197 million to €231 million, three times more slowly than in the previous year. The market is dominated by Younited Credit which originated €227 million worth of consumer loans in France, Italy and Spain in 2017. Younited’s growth remained high in terms of number of loans (nearly +50%) but the growth in euros was slower because the company introduced smaller €1,000 to €3,000 loans and stopped promotional campaigns that were waving fees on large loans.
Equity Crowdfunding Shrinks
French equity crowdfunding raised a mere €58 million, 15% less than in the past year.
Read the full report here.
3 things that could drive fintech investment in Europe through the roof (again) (PitchBook), Rated: A
Last year, venture investment in European fintech companies more than doubled YoY to €2.8 billion, even though the deal count remained almost flat, per the PitchBook Platform.
The jump in money invested was boosted by some monster deals, including rounds of well over $200 million each into foreign exchange unicorn TransferWise and student loans startup Prodigy Finance.
Pan-European Marketplace Investly Now Seeking £500,000 on Seedrs (Crowdfund Insider), Rated: A
CB Insights is working with The New York Times to identify the best VC professionals. (CB Insights), Rated: AAA
We’re exploring additional rankings for other types of investors:
- Top Corporate VCs
- Top Seed-Stage VCs Brand
- Top VCs by Region (Asia & Europe)
Ranking Algorithm Factors:
- Performance Persistence
- Network Centrality
- Investment Discipline
- Illiquid Portfolio Strength
The Top 20 Venture Capitalists Worldwide (The New York Times)
FinTech, RegTech and SupTech (Finextra), Rated: A
Two–thirds of consumers between the ages of 18 and 29 have a mobile phone and use mobile banking.
FinTech improves the lending process by reducing the cost of underwriting through automation of the credit application process. That process includes the review of the credit application, credit score monitoring, and the collection of financial documents.
Credit standards and trading limits are monitored more efficiently as Fintech applications can be created that employ customized credit standards per the bank’s risk-management policies
Just as FinTech helps institutions manage their internal credit and trading standards, RegTech enhances their ability to adhere to the government’s regulatory rules set out by various agencies and The Federal Reserve Bank.
Fewer fines and litigation costs are possible with RegTech applications.
Adapting to new regulations faster can be achieved with RegTech as financial institutions can monitor changes in regulations in real-time.
Regulatory reporting times improve with RegTech.
IFM Investors ups stake in digital provider Decimal (Private Banker International), Rated: A
IFM Investors, an Australian fund manager, has increased its stake in local digital advice provider Decimal to 15%.
IFM acquired the additional stake through the placement of 28,900,000 ordinary shares at $0.03 per share.
Why P2P should be empowered to fill the void in SME financing (ET Rise), Rated: AAA
The Economic Survey 2017-18 tabled in the Parliament on Monday delivered an unsurprising, but troubling figure. The amount of credit or loans disbursed by banks amounted to Rs 26,041 billion as on November 2017, but 82.6% of this was pocketed by large enterprises. For millions of SMEs in the country, banks only lent out 17.4 % of the total credit.
RBI data show that NBFCs have increased their lending to the SME sector by giving out about Rs 680 crore to the micro, small and medium enterprises compared to Rs. 480 crore in 2016. These figures do not include the loans extended to SMEs by the P2P industry, which has been recently classified as an NBFC.
In 2015-16 more than 10,000 businesses across UK benefitted and an estimated 30,000 new jobs were created due to UK government’s favorable policies for the P2P lending sector.
Indonesia’s fintech lending boom exploits shortfall in bank loans (Reuters), Rated: AAA
Wimboh Santoso, head of Indonesia’s financial regulator (OJK), said while the trend was still a drop in the ocean of overall lending, more than 250,000 people had taken out loans through fintech. Around 30 P2P firms had extended 2.6 trillion rupiah ($193.8 million) in lending as of January 2018, compared with just 247 billion rupiah of lending in December 2016. Another 36 more firms were waiting to be approved, he added.