Thursday September 26 2019, Weekly News Digest

LendingClub eligibility

News Comments Today’s main news: SoFi intros crypto trading. Investors locked out of LendingClub in 4 states. Funding Circle asks US regulators to folow UK’s model. Fundbox raises $176M. Klarna surpasses 12M transactions per year. Today’s main analysis: U.S. subprime auto loan ABS recession scenarios (A MUST-READ). Today’s thought-provoking articles: Recession talk cooling. Consumers with […]

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

LendingClub eligibility

News Comments

United States

United Kingdom

European Union

International

Other

News Summary

United States

SoFi Introduces Crypto Trading With SoFi Invest (PR Newswire), Rated: AAA

SoFi announced today that it has added crypto trading to its fast-growing SoFi Invest platform, as a response to demand from its over 800,000 members. SoFi Invest is now the first platform to offer automated and active investing with stocks, ETFs, and crypto through a single app.

SoFi Adds Bitcoin, Litecoin, and Ethereum to Invest Platform (Cheddar), Rated: A

SoFi goes live with crypto trading service for its over 800K users (The Block), Rated: B

SoFi users can initially buy and sell three cryptocurrencies – bitcoin (BTC), ether (ETH) and litecoin (LTC). The Block first reported the story last week, saying that the firm is beta testing the service in partnership with Coinbase.

SoFi CEO on what’s next for the company (Yahoo! Finance), Rated: A

Sofi CEO Anthony Noto joins The First Trade to discuss what’s next for the company.

Watch the video here.

Charlie Lee {LTC} praises SoFi as crypto-investing with Litecoin kicks-off (Our Bitcoin News), Rated: A

Litecoin is ranked at #6 underneath Tether, as well as Bitcoin Cash, in the market. The price jumped up at a rate of 0.60% in the course of the past 24-hours. This led to LTC scaling all the way up to $57.03 where it presently rests. The trading volume recorded stands at roughly $2.957 billion, whereas the supply has 63,337,479 LTC coins included as part of circulation. The total market cap of Litecoin amounts to $3.612 billion which depicts a massive decline compared to the value attained a week back.

SoFi CEO: Start investing in your 20s (Yahoo! Finance), Rated: A

SoFi CEO Anthony Noto discusses how his company’s consumers can now buy and sell Bitcoin, Ethereum and Litecoin.

SoFi Refunds Investors Hit By Capital Gains from Proprietary ETFs (ETF Trends), Rated: A

Financial technology company SoFi is offering refunds to investors hit by capital gains taxes following the change of replacing Vanguard funds with their proprietary ETFs in certain portfolios managed by their robo-adviser.

Some Investors Locked Out of Investing in LendingClub Loans (Lend Academy), Rated: AAA

Over the last 24 hours we’ve received several messages from Lend Academy readers alerting us that they have received information that they are no longer able to invest in LendingClub notes. There is is also an active discussion on the Lend Academy forum.

LendingClub state eligibility as of 9/24/2019. Source: Lend Academy

Funding Circle urges US regulators to follow UK model (P2p Financ News), Rated: AAA

FUNDING Circle’s US division is urging the Securities and Exchange Commission (SEC) to amend its restrictions on peer-to-peer retail investment.

The US financial regulator limits annual investment to five per cent of an investor’s annual income if their yearly income or net worth is under $107,000 (£86,075), rising to 10 per cent if the investor earns more than that.

Two Franchise Trends Aspiring Franchisees Should Look Out For (Forbes), Rated: A

Over the past 14 years, I’ve coached more than 1,500 people who were searching for the best franchise for their situation. I recently read the 2019 Small Business Trends 

Fintech Fundbox raises $ 176M to lend to business using AI (Information Management), Rated: AAA

Fintech Fundbox Inc. has raised $176 million in a new funding round from investors including Allianz SE and General Catalyst. The company planned to announce the funding along with a new $150 million credit facility.

A Fundbox spokesman said the new round valued the company at between $500 million and $1 billion, but would not disclose the exact valuation.

U.S. Subprime Auto Loan ABS: Evaluating Recession Scenarios (DBRS), Rated: AAA

Summary Highlights

  • Under the hypothetical Recession Scenarios, DBRS found that credit enhancement (excluding excess spread) coverage of remaining expected losses, as determined by a multiple calculation, decreased at the inception of the hypothetical recession for all of the Sample Transactions. The senior debt tranches experienced a swift deleveraging whereas some of the subordinated debt tranches could be at risk for a potential downgrade during the hypothetical Recession Scenarios.
  • After the initial decline in the multiple calculations at inception of the hypothetical Recession Scenarios, the deleveraging nature of the sequential pay structures of the transactions resulted in the calculated multiples for the analyzed debt tranches to move into the multiple range corresponding to the original rating of the debt tranche over varying lengths of time. The multiples for some of the debt tranches originally rated BB were weaker and moved into the BB range at a slower pace. As a result, those tranches would be more likely to be considered for a potential downgrade as compared to the more senior debt tranches where the structures delevered more quickly and the multiples reached the range corresponding to the original rating over a generally shorter period.
  • Over the life of the Sample Transactions, the credit enhancement multiples for all of the debt tranches analyzed, some on a delayed basis, ultimately moved into the AAA rating multiple range.
  • In each of the Recession Scenarios, the structure of each of the transactions provided sufficient credit enhancement for timely payment of interest and ultimate payment of principal of all debt tranches.
Source: DBRS

Read the full report here.

A Cooling in Recession Talk, Heat Up in Housing (PeerIQ), Rated: AAA

Lower rates, improved credit scores, and tighter housing inventory are improving the outlook for housing. Housing market achieved an 18-month high in housing starts and a record high in FICO scores.

The Citigroup Economic Surprise Index – a measure of actuals vs economist’s expectations – has also registered readings above the neutral baseline suggesting slowdown fears may be exaggerated.

Source: PeerIQ, CitiGroup

Consumers with Significant Liquidity Needs Often Access Alternative and Traditional Credit Markets Concurrently (GlobeNewswire), Rated: AAA

Many lenders believe that consumers who turn to the alternative credit market for liquidity do so because they have no other options. However, a TransUnion study presented today at the Lend360 conference found that these borrowers are frequently applying for and receiving traditional credit at the same time. While traditional subprime installment lenders and alternative lenders are competing over the same consumers, the study finds that the liquidity need is often not fully met in either market.

Source: TransUnion

Risk Levels Higher for Traditional and Alternative Loan Borrowers

Controlling for risk score, 8.5% of the alternative credit-active consumers had a serious delinquency in the first 12 months, vs. just over 2% for the control group. Bankcard performance was also worse. While these borrowers exhibited a preference for unsecured personal loans under $1,500 within 12 months of the alternative credit origination, they also originated auto and bankcard credit during that time.

Read the full report here.

Lendio to Double Sales Force, Expand Loan Product Offerings (Benzinga), Rated: A

Lendio today announced plans to double the sales force at its Lehi, Utah, and Woodbury, New York, offices. The company has hired 80 employees in 2019, and intends to add another 40 sales representatives by the end of the year, with plans to bring on another 40 in the first quarter of 2020. In addition to the expanding workforce, Lendio plans to bolster its selection of loan products for small businesses, with a 10% increase in the number of product offerings in the coming year.

Fintech lenders taking more market share from banks, survey finds (American Banker), Rated: A

Fintechs are continuing to siphon away customers for unsecured personal loans from traditional lenders, according to a study released Wednesday by Experian.

The study found that digital lenders more than doubled their market share in the past four years, with consumers across the credit spectrum increasingly turning to fintechs like Lending Club and Social Finance.

Fintechs now provide 49.4% of unsecured personal loans as of March compared to 22.4% in 2015, according to Experian.

Fintech Lenders Could Hold the Keys to Recession Recovery (Salon), Rated: A

Born out of the last recession, young fintech lenders have not yet been tested by a significant economic storm, and many in the industry are wrapped up in a dialogue of speculation about the industry’s ability to ride out an impending recession. It’s time to turn the conversation instead to focus on how fintech lenders can position themselves to play a critical role in recovery from the next downturn, whenever it may happen.

WeWork should ask SoFi CEO for advice on how to save the company (Yahoo! Finance), Rated: A

The two new guys running the slowly sinking ship known as once hot tech startup WeWork should give SoFi CEO Anthony Noto a holla on his Apple iPhone. Trust me, Noto has some good, timely advice for Artie Minson and Sebastian Gunningham.

Because the former Goldman Sachs banker and Twitter chief financial officer, now SoFi chief clearly gets how to rebuild a promising tech startup after a high-profile challenge or two. And then possibly, take it down the path of a successful initial public offering.

Generation Z’ers want more financial education – and innovative tools to help them learn (PR Newswire), Rated: A

As high school students return to school, they may see the benefits of new state laws across the country that require curriculums to offer a class about personal finance. This is great news for young adults as 76% of recent high school graduates agree it should be required, according to a national survey by Experian.

Many Gen Z’ers surveyed say innovative tools are the way to go when it comes to learning about credit (45%) and almost half (48%) would prefer to use tech-driven tools versus textbooks to learn more.

Survey respondents also say they are currently learning about finances mostly through their friends (28%), YouTube (27%) and some form of social media (24%).

D.C. Court Dismisses Challenge to OCC’s Fintech Charter (Manatt), Rated: A

In the latest battle over the Office of the Comptroller of the Currency’s (OCC’s) plan to issue special purpose national bank (SPNB) charters, a D.C. federal judge has for a second time dismissed a lawsuit brought by the Conference of State Bank Supervisors (CSBS).

The decision creates the potential for circuit split, as a New York federal court reached the opposite conclusion in a nearly identical action filed by the state’s Department of Financial Services (DFS).

9 Ways To Build an Empire Without Lifting a Finger (Yahoo! Finance), Rated: A

Another way to build your real estate empire is through real estate crowdfunding. As with investing in a REIT, real estate crowdfunding allows you to pool your money with other investors to invest in real estate. This could include multifamily units, commercial properties and bundles of single-family homes.

According to U.S. News & World Report, the top real estate crowdfunding platforms are ArborCrowd, RealCrowd, Groundfloor, CrowdStreet, PeerStreet, Small Change and RealtyMogul.

If you can afford the minimum investment — which is usually $25,000 — you can make big returns. Groundfloor boasts 10% returns for individual investors and CrowdStreet’s is even higher with 25.5% total average annual returns across all fully realized deals.

RealCrowd offers a breakdown of average annual income on a $1 million investment based on the property type: $78,000 for a suburban office, $72,000 for a retail space, $59,000 for a downtown office and $58,000 for a multifamily unit.

The Best And Worst MA Towns For Young Families (Patch), Rated: A

The online mortgage broker Lending Tree has tried to take some of the guess work out of that decision by ranking every community in Massachusetts with 5,000 or more residents based on their appeal to families with school-age children.

Hingham, under Lending Tree’s methodology, received a score of 72.5. Last-place Webster’s score was 31.9. Other towns in the top 10 included Winchester, Needham, Milton, Longmeadow, Wellesley, Cochituate, Pinehurst, Lexington and Nantucket.

JPMorgan donates $ 25M to get fintech in hands of underbanked (American Banker), Rated: A

JPMorgan Chase announced Tuesday a $25 million commitment to the Financial Health Network’s Financial Solutions Lab, a program meant to focus on the creation of fintech tools to help consumers better manage their finances.

The Financial Health Network (formerly The Center for Financial Services Innovation) previously received a $30 million philanthropic donation from the bank that spanned the last five years.

Bitcoin and Ethereum dive deep, is Bakkt to blame? (Mashable), Rated: A

“The disappointing BAKKT opening signals to the crypto community that institutions are less ready to invest in BTC at scale than was supposed, which means the price was probably too high and due for a correction. What we’ve just seen is short sellers and momentum traders piling on to make things worse, and now here we are back at support,” Alex Mashinsky, CEO at crypto lending and depository company Celsius Network, told Mashable in an emailed statement.

STRATA Trust Company Reaches $ 2 Billion AUC Milestone (PR Newswire), Rated: A

STRATA Trust Company (“STRATA”), a custodian dedicated to the complexity of holding alternative investments in tax-advantaged, self-directed retirement accounts, announced today that the firm has surpassed $2 billion in assets under custody. STRATA offers access to a range of asset classes that include private equity, private debt, real estate, crowdfunding, structured settlements and more. Since 2008, STRATA has been committed to empowering investors and the investment community with wider diversification and alternative asset custody solutions in retirement portfolios by delivering industry-leading service, education and support.

Online Pawn Lending Goes Back Offline (Business Wire), Rated: A

Prominent online lender Borro Private Finance unexpectedly ceased its collateral-based lending program this summer after nearly ten years of business. The UK-US-based establishment specialized in online pawn loans against valuable assets, including fine art, jewelry, and watches. Borro’s discontinuation of its operations comes nearly two years after the company’s withdrawal from the bridge loan market in July 2017.

Eleventh Circuit Tosses Online Lender’s Forum Selection, Class Waiver Clauses (Lexology), Rated: A

Siding with six consumers who filed suit asserting violations of state usury laws against online lenders, the U.S. Court of Appeals for the Eleventh…

Marqeta Hires Vidya Peters As First Chief Marketing Officer, as Company Continues to Build Out Expansive Global Vision (Business Wire), Rated: B

Marqeta, the first global modern card issuing platform, today announced the addition of Chief Marketing Officer Vidya Peters to its executive team.

White Oak Commercial Finance Acquires Veritas Financial Partners’ Asset-Based Loan Portfolio (ABL Advisor), Rated: A

White Oak Commercial Finance (“White Oak”), an affiliate of White Oak Global Advisors, announced today it has purchased a portfolio of asset-based loans from Veritas Financial Partners, a Boca Raton, FL based specialty finance company.

Alchemy Technology And Equifax Partner To Drive FinTech Innovation (PR Newswire), Rated: B

Alchemy Technology Inc. and  Equifax Inc. (NYSE: EFX) today announced a new partnership to drive FinTech innovation. The relationship is designed to help banks, specialty financing firms and FinTech startups accelerate their time to market with easily deployable white labeled lending solutions. The two companies will make the “tech” in FinTech available to organizations of all sizes with a powerful combination of the Alchemy Lending Operating System and Equifax data analytics, credit, identity and income verification solutions.

Ex-Goldman Sachs Managing Director Joins Lendingblock as Strategic Advisor (Lendingblock), Rated: B

Lendingblock, the regulated, open exchange for institutional borrowing and lending of digital assets, today announces the appointment of John Macpherson as a strategic advisor.

CoreLogic Credco Integrates its Three-Bureau PreQual Solution with eLEND Solutions (CoreLogic), Rated: B

CoreLogic, a global provider of property information, insight, analytics and data-enabled solutions, today announced that CoreLogic Credco integrated its Three-Bureau PreQual credit report and score solution on eLEND Solutions, an automotive technology company specializing in online and in-store credit and finance solutions. The integration of the prequalification solution gives CoreLogic Credco customers who use eLEND instant, single-source access to a consumer’s credit report and FICO score from all three national credit bureaus – Experian, TransUnion or Equifax.

Tavant Named to 2019 IDC FinTech Rankings (Business Wire), Rated: B

Tavant, a Silicon Valley-based provider of AI-powered digital lending technologies, announced today it has been named to the 2019 IDC FinTech Rankings, the most comprehensive vendor ranking within the financial services industry.

United Kingdom

Klarna Surpasses 12M Transactions This Year (PYMNTS), Rated: AAA

FinTech payments disruptor Klarna has announced the start of its “No drama, just Klarna” retail campaign in partnership with 13 brands in the U.K., the company said in a press release on Wednesday (Sept. 25).

Klarna offers “pay later” payment options and attracts 50,000 new users each week. The startup said that in the past year, it has processed 12 million transactions. In August, more than 100,000 U.K. shoppers downloaded the Klarna app.

Klarna reports surge in payments, merchant growth during first half of 2019 (Mobile Payments Today), Rated: A

Klarna, a London based installment financing provider and challenger bank, said it surpassed 3 million active users in the U.K. and 170,000 retail merchants worldwide.

Brits hit financial maturity at 31 (P2P Finance News), Rated: A

THE age at which UK men and women finally feel secure in their finances is 31, according to Zopa.

The survey showed a clear split between age groups, with 21 to 25 year-olds believing 32 would be the age when they finally felt good about their finances, while those age 26 to 30 were less optimistic about the future, saying they would reach money maturity at 38.

OakNorth Bank completes £20m loan to specialist lending fund (London Loves Property), Rated: A

OakNorth Bank, the UK bank powered by OakNorth, has provided a £20m loan to the RAW Mortgage Fund, a specialist fund providing buy-to-let property loans against residential real estate in the UK.

Wonga borrowers have less than a week to submit payday loan reclaims (The Sun), Rated: A

Anyone who believes they have been mis-sold a Wonga loan is allowed to apply for compensation, but its administrators set a deadline of 11.59pm on September 30.

If you miss the deadline, you won’t be able to apply anymore and you won’t get any compensation for mis-selling.

Nexo Now Accepts Tokenized Gold for Instant Credit Lines and Will Offer Interest-Bearing Accounts on Gold (Covington Journal), Rated: A

Nexo is adding the NYDFS-regulated PAX Gold as a collateral option for its signature , bringing gold-backed lending to the blockchain.

With PAX Gold, now offers gold investors instant access to their gold wealth in over 45 fiat currencies via same/next day transfers and across 200+ jurisdictions.

European Union

Kreditech Eyes Expansion After Securing EUR 20 Million in Equity Financing (Yahoo! Finance), Rated: AAA

Kreditech is ready to scale globally in the near-prime customer segment – declares David Chan, Kreditech CEO. The Germany-based online direct lender and Point-of-Sale (POS) financing provider estimates its global target market at ca. EUR 300 bn in consumer credit issuance. It aims to reach EUR 1 bn in revenue by 2025, which will be driven by growth in existing markets where Kreditech is present, as well as expansion into new geographies. Kreditech currently operates in IndiaPolandRussia and Spain, and serves over one million customers. The company has raised EUR 20 million in its latest equity financing round.

You’ve heard of challenger banks, now meet the challenger lenders (sifted), Rated: AAA

For better or worse, it was Wonga that first put “challenger lenders” on the map. The UK payday lender’s meteoric rise saw it become a household name before its collapse last year after a string of irresponsible, inflated loans.

This month alone, large funding rounds were announced by Sweden’s Capcito and Lendify, as well as by UK’s Sonovate, an invoice lender for SMEs with over 750 active clients. Banks are also watching closely, with Goldman Sach’s equity arm being a notable funder in Lendable, recently ranked the UK’s sixth fastest-growing private tech company.

In the UK, the challenger-lender industry grew to £6.1 billion in 2017, according to a study by the Cambridge Centre for Alternative Finance (CCAF). The CCAF also estimated that 29% of all new loans issued to SMEs came from challenger lenders in 2017. PwC predicts that figure will rise to nearly 40% in the next decade.

Source: Financial Times
International

Marketplace Lenders Navigate The Choppy Waters Of Compliance (PYMNTS), Rated: AAA

Regulators the world over are beginning to take a closer look at the alternative and marketplace lending business model.

In June, the U.K.’s Financial Conduct Authority announced plans to impose stricter restrictions on marketplace and peer-to-peer (P2P) lenders beginning this December following the watchdog’s decision to place P2P lending platform Lendy into administration — a result, the FCA said, of the industry’s lenient requirements to disclose governance arrangements and controls.

Also, in China, analysts at Yingcan Group pointed to the government’s P2P and marketplace lending crackdown as being likely to shrink the industry by as much as 70 percent this year.

This Fintech Safari Could Be a Wild Ride (The Washington Post), Rated: AAA

From ATMs to credit cards and PayPal, the West’s dominance of innovation in consumer finance appears to have exhausted itself.

At the top of the emergent new order is the fintech duo from China — Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Next in line are Alphabet Inc. and Walmart Inc., whose highly localized smartphone payment rivalry is playing out between Google Pay and PhonePe in India. In Southeast Asia, two homegrown ride-hailing giants are aspiring to dominate commerce.

The rise of African mobile money is associated with M-Pesa, Kenya’s digital-wallet revolution. Now traditional lenders like Standard Chartered Plc, with a presence on the continent going back more than a century, are discovering that online banking can help them mobilize low-cost current and savings accounts more profitably than acquiring customers via physical branches.

Australia/New Zealand

Harmoney says the P2P lender has been ‘slowly moving to lending our own money’ since 2015 (interest), Rated: AAA

The founder of Harmoney, New Zealand’s biggest licensed peer-to-peer (P2P) lender, says he can’t see a viable P2P lending model in New Zealand which is why Harmoney has started lending its own money.

Neil Roberts and David Stevens of Harmoney (Lend Academy), Rated: A

Harmoney, the first peer to peer lender to be licensed in New Zealand, has originated more than NZ$1 billion in loans since launching five years ago.


Read the PDF transcript here.

India

Kreditech targets India after EUR20m funding boost (Finextra), Rated: AAA

Kreditech, a German-based online lender and POS financing provider focused on “near prime” borrowers, is looking to the Indian market after raising EUR20 million in funding.

The round was co-led by Runa Capital and unnamed German private investors, with participation from existing shareholders HPE Growth and Amadeus Capital Partners.
Southeast Asia

Accumulated P2P lending exceeds W6tr (The Investor), Rated: AAA

Accumulated peer-to-peer loans in South Korea have surpassed 6 trillion won ($5 billion), data showed on Sept. 26.

Outstanding P2P loans extended by 220 companies stood at 6.2 trillion won in June, compared with 4.7 trillion won at the end of last year, according to the data compiled by the Financial Supervisory Service.

Indonesia’s Investree in talks to raise series C funding for regional expansion (Tech in Asia), Rated: A

Indonesia’s fintech peer-to-peer lending startup PT Investree Radhika Jaya is in talks with several investors to raise a series C funding as the firm looks to boost its expansion in Southeast Asia.

The Securities Commission Malaysia Approves EdgeProp as First Property Crowdfunding Platform in Malaysia (Crowdfund Insider), Rated: A

The Securities Commission Malaysia (SC) has registered EdgeProp Sdn Bhd as the first “Recognised Market Operator” to establish and operate a property crowdfunding platform in Malaysia. EdgeProp was granted an approval in principle in September 2019.

FINTECH COMPANIES FACE TALENT SHORTAGE (StaffingIndustry.com), Rated: A

The majority, or 94%, of fintech companies in Singapore, say the country requires fintech talent, according to survey data from Michael Page Singapore.

The number of Singapore consumers adopting fintech products and services has drastically risen in the last two years, tripling from 23% in 2017 to 67% in 2019, according to Michael Page.

Bitcoin Daily (PYMNTS), Rated: B

And Singapore-based exchange Bitrue has announced the launch of a low-interest crypto lending platform, which goes live on September 30.

MENA

Qatar Boosts FinTech Focus (PYMNTS), Rated: A

As reported by Crowdfund Insider, the Qatar Financial Centre (QFC) has expanded the number FinTech-related activities that will be awarded licenses. The additional support will come from the QFC platform.

The seven firms include DecisionLogic, which focuses on advanced bank verification that lets lenders qualify borrowers.

Africa

Proven ways you can make money in real estate (Daily Monitor), Rated: A

You can utilise a variety of methods that includes any of the following:
•Seller financing through lease options
•Trading fixed assets such as cars, jewellery and more
•Taking over someone else’s mortgage payments who might be in a distressed situation
•Bringing in an investment partner with cash
•Borrowing from a bank or getting a hard money loan
•Taking out a home equity line of credit
•Utilising a peer-to-peer lending network

Caribbean

Victoria Mutual acquires shares in Barbados-based FinTech Carilend (Jamaica Observer), Rated: AAA

Victoria Mutual Investment Limited (VMIL) has acquired a 30 per cent stake in Carilend, a Barbados-based financial technologies (FinTech) company, that is said to have revolutionised borrowing and lending in the Caribbean.

Authors:

George Popescu
Allen Taylor

The post Thursday September 26 2019, Weekly News Digest appeared first on Lending Times.

Thursday May 9 2019, Weekly News Digest

leveraged loans

News Comments Today’s main news: SoFi launches ETF for gig market. LendingClub’s higher fees lead to earnings win. CrowdStreet hits $500M in real estate investments. Funding Circle offers manual lending in foreign markets. Marcus delays German launch. Today’s main analysis: LendingClub, GreenSky, and OnDeck earnings. Today’s thought-provoking articles: GDP growth continues. The pros and cons […]

The post Thursday May 9 2019, Weekly News Digest appeared first on Lending Times.

leveraged loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi launches gig-focused ETF (TechCrunch), Rated: AAA

Today, the company announced a new exchange-traded fund (ETF) product focused on the gig economy. GIGE, which trades on Nasdaq, is an actively managed fund advised by Toroso Investments that allows investors to capitalize on this hot sector of the economy. Toroso offers a range of services around creating and managing ETFs.

The company also announced the creation of an ETF focused on high-growth stocks. That ETF, which trades as SFYF on the NYSE, is designed to identify and capture the growth of the top 50 of the 1,000 largest publicly traded issues.

LendingClub Records Higher Transaction Fees on the Way to Earnings Beat (TheStreet), Rated: AAA

Online-loan marketplace LendingClub (LC – Get Report) was rising more than 14% Wednesday to $3.70 after reporting a surprise profit in the first quarter, though the company’s guidance was short of expectations.

LendingClub reported a 22% increase in transaction fees that led to a 15% increase in revenue to $174.4 million and adjusted earnings of 2 cents per share. Wall Street was expecting the company to report revenue of $169.4 million and a loss of 3 cents per share.

Higher Fees Drive LendingClub’s Earnings Beat (PYMNTS), Rated: A

The marketplace lending platform reported adjusted net loss of $11.25 million, or 3 cents a share — red ink, but less than the 4 cents per share loss analysts were forecasting.

That stronger-than-expected revenue outcome was driven by stronger-than-expected loan originations during the first quarter, which rose 18 percent year-on-year to $2.73 billion. That increase in originations drove an increase in transaction fees, which were up 22 percent to $135.4 million.

For the second quarter, the company expects net revenue between $185 million and $195 million, with the high end slightly below the average analyst estimate of $196.7 million.

Why LendingClub Stock Leapt 12.4% Today (The Motley Fool), Rated: B

Wedbush believes LendingClub’s improving operating efficiency will help it produce an adjusted EBITDA margin of 20% by the end of 2019. The firm also expects LendingClub to grow revenue by 12%-15% annually in the coming years.

LendingClub, GreenSky and OnDeck Q1 2019 Earnings Results (Lend Academy), Rated: AAA

LendingClub

LendingClub rounded out 2018 originating the most loans in the company’s history at $10.9 billion. With their Q1 2019 results, the company is off to a great start in 2019. Originations were $2.7 billion, up 18% year over year. The company reported that application growth was 31% over the same period.

Source: Lend Academy

Net revenues came in above high end guidance of $172 million at $174.4 million for the quarter, up 15% year over year. GAAP Consolidated Net Loss was $(19.9) million, compared to $(31.2) million in Q1 2018. Finally, the company delivered adjusted EBITDA of $22.6, up 47% year over year and well above their projections of $13-$18 million. LendingClub is on track to become adjusted net income profitable over the second half of 2019.

GreenSky Q1 2019 Earnings

In Q1 2019 GreenSky increased transaction volume on the platform 20% to $1.2 billion. They also grew revenue 22% to $103.7 million form the prior year period. GAAP Net Income in Q1 2019 was $7.4 million. The company had aggregate commitments of $11.8 billion from nine bank partners of which $4.5 billion remain unused. The company ended the quarter with $268 million in cash.

Source: Lend Academy

OnDeck Q1 2019 Earnings

Originations fell for the quarter to $636 million compared to $658 million for the previous quarter. This was attributed to OnDeck tightening their credit box during the quarter. The company shared that their line of credit product reached an all time high of $150 million for the quarter.

Strong GDP Growth Continues (PeerIQ Email), Rated: AAA

Unemployment fell to 3.6% – the lowest level since 1969. The last time unemployment levels were this low, the first humans landed on the moon. The inflation rate was 5.5% The DJIA was 800. The average cost of a new home was $15K, and the average salary was $9K. A gallon of gas cost a scorching thirty-five cents.

Source: PeerIQ

On the regulatory front, Senator Durbin introduces a bill to create a 36% APR Cap on Consumer Loans. The 36% cap matches a similar rate for loans offered to service members and is superseded by strict state-level caps, and offers no preemption of the patchwork of state laws for digital models.

Online marketplace reaches $ 500M in online real estate investments (Real Estate Weekly), Rated: AAA

CrowdStreet, Inc., a technology provider with an online marketplace for direct equity investment in commercial real estate (CRE), announced that in March it crossed the $500 million threshold in total online investments with a record number of new individual investors.

The news accompanies a record quarter with over $75 million invested.

The Pros And Cons Of Leveraged Loans (Seeking Alpha), Rated: AAA

Corporate America has taken on substantially more debt in the aftermath of the Great Recession. Today, the underlying structure of that leverage looks different. Fewer bonds are being issued. Bank loans to indebted companies now match junk bonds in total issue. This article will review the market for leveraged loans – a marketplace that has grown tenfold in the new millennium and has passed the $1 trillion threshold.

In 2017, nearly 70% of levered loans were refinanced at lower interest rates. That creates a lot of turnover.

BlackRock is building a team of 30 data scientists to create a next-generation stock-lending platform (Business Insider), Rated: A

BlackRock founded a Palo Alto, California-based group called AI Labs last year, directed by the Stanford professor Stephen Boyd. Now, according to job postings reviewed by Business Insider, the 30-member team is tackling projects ranging from next-generation lending platforms to automating human tasks.

ONLINE LENDER SETTLES WITH FTC FOR .85 MILLION (Lawyers and Settlements), Rated: A

Avant LLC, the online lending phenomenon which had previously been hailed as a “breakout financial success story,” has agreed to settle a lawsuit brought by the Federal Trade Commission (FTC) for $3.85 million. Although the lawsuit largely relied on a different federal statute, it shares much of the consumer financial protection zeal of the excessive overdraft fee lawsuits recently leveled against credit unions, banks and payday lenders. But it also reveals shortcomings in federal consumer protection laws.

Providing Additional Liquidity to Some Delinquent Borrowers Can Actually be a Win-Win (Yahoo! Finance), Rated: A

Consumers who fall behind on credit payments may find an unexpected lifeline—another loan from their lender. A new TransUnion (TRU) study found that, in some instances, both lenders and consumers can benefit when additional loans are extended to customers during difficult times. The findings were released today during the 2019 TransUnion Financial Services Summit, attended by more than 300 executives from across the globe.

In the study, 31% of delinquent borrowers experienced improvement on one or more of their delinquent debts when securing a new personal loan. In addition, 24% of borrowers also performed well on the new loan.

Monzo plots US launch as soon as this summer (The Telegraph), Rated: A

Monzo, the mobile banking app known for its coral coloured debit cards, is planning to launch in America as soon as this summer, The Daily Telegraph has learnt.

The £1bn start-up challenger bank is in the process of hiring executives to lead its product and marketing arms in the US. It is expected that the company will choose Los Angeles as its base.

Affirm, Kabbage, Tala — The Big Three of Online Loans (Bitnews Today), Rated: AAA

Affirm is a company that provides payday loans online and at points of sale. To receive an approval decision, a potential Affirm client does not have to wait long — the company’s scoring system processes its questionnaire, profiles in social networks and other documents very fast.

Source: Bitnews Today

KABBAGE

Kabbage also provides loans online using an automated system. However, the clients of this company are not ordinary consumers, but owners of SMEs. When the founders of Kabbage decided to launch a new project in 2009, there was a gap between personal loans for consumers and credit lines allocated to small businesses in the lending system.

Source: Bitnews Today

TALA

  • the initial idea of the company’s founder Shivani SIROYA to start her own business was that “the existing credit system works very poorly”;
  • to assess the creditworthiness, Tala uses its own scoring system, which examines a set of data about the potential borrower, using machine learning technology and big data;
  • the intellectual service works in automatic mode: it investigates, makes a decision, issues loans.
Source: Bitnews Today

Resolve launches as a B2B online financing service (Digital Commerce 360), Rated: A

Financial technology company Affirm is betting that what works for online retailers will also work for B2B merchants who want to offer online financing to customers.

Affirm has launched Resolve as a B2B version of an online financing service that Affirm provides to retailers.

Kabbage Teams with BTEA to Fuel Access to Funding for Women- and Minority-Owned Businesses (Finanzen), Rated: B

Kabbage, Inc., a cash flow technology and automated lending platform for small businesses, has formed a strategic alliance with New York’s largest contractor association, the Building Trades Employers’ Association (BTEA), to provide access to fast and flexible small business funding for BTEA members through the Kabbage platform. The alliance will support women and minority-owned business enterprise (WMBE) contractors who often have difficulty accessing the funding required to procure contracts for New York’s largest construction projects.

The alliance between BTEA and Kabbage provides BTEA’s 1,300 contractor companies, including more than 100 MWBE contractor members, the opportunity to access lines of credit as high as $250,000 and attain greater financial capacity.

In The Face Of Growing Fraud Threats, Finance Firms Should Look At Managed Security (Forbes), Rated: AAA

Financial institutions face a complex array of threats — from the immediate such as synthetic identities which have been used to defraud individual firms multiple times.

In 2018, more than 43,000 breaches across all industries involved the use of customer credentials stolen from botnet-infected clients, the Accenture report said.

Read the full report here.

Fig Loans Becomes First-Ever FinTech to Receive CDFI Certification (Yahoo! Finance), Rated: A

Fig, a mission-driven FinTech company that offers credit building alternatives to predatory loans for low-income borrowers, has become the first-ever FinTech company to become both a Certified B Corporation and federally certified Community Development Institution (CDFI). VilCap Investments and Techstars are early Fig Loans investors.

CFPB plan a mixed bag for debt collectors (American Banker), Rated: A

The Consumer Financial Protection Bureau released a plan Tuesday to restrict how often debt collectors can call borrowers about unpaid credit and to allow consumers to opt out of other types of communications.

The proposal to overhaul the debt collection industry would limit phone-based collection attempts for the same consumer to seven calls per week. Debtors could also opt out of allowing collectors to contact them via voice mail, email and text messages.

Read the full text of the proposed rule here.

Behind The Scoop: An inside look at Genesis’ lending business (The Block Crypto), Rated: A

  • $250m worth of outstanding loans gives it an estimated 2/3 share of the total outstanding crypto loan pie
  • Genesis has seen its total USD value of borrows increase 35% QoQ in 1Q19, vs. lending protocols which saw a ~20% decline; Genesis total borrow volumes were almost an order of magnitude greater than all of borrows on lending protocols in 1Q19

Ocrolus, inFactor Partner on End-to-End Automation for Merchant Cash Advance Lenders (Ocrolus), Rated: B

Ocrolus today announced a partnership with inFactor, the financing platform that brings clarity and security to small business financing. This partnership combines two powerful technology solutions to drive end-to-end underwriting automation for Merchant Cash Advance (MCA) lenders

United Kingdom

Funding Circle still offers manual lending in other markets (P2P Finance News), Rated: AAA

FUNDING Circle is still offering investors the option to self-select their loans in its three overseas markets, its annual report revealed last month.

The peer-to-peer business lender scrapped its manual lending option in the UK in 2017, saying that its auto-invest product ensures better diversification.

Digital Lending Platform Esme Loans Hits £50 Million of Lending to UK Businesses (Crowdfund Insider), Rated: A

Esme Loans, the NatWest backed standalone digital lending platform for SMEs, announced last week it has hit £50 million of lending to UK businesses. The online lender reported that it has seen a continued period of strong growth, following an uplift in lending of 337% between 2017 and 2018.

Goldman Sachs’ digital savings account Marcus just reached a UK milestone (AltFi), Rated: A

Just eight months since launching in the UK, Goldman Sachs’ digital savings account has attracted a quarter of a million customers.

Investors are getting more comfortable with the P2P ISA (AltFi), Rated: A

In the 2016/17 tax year just 5,000 customers opened IFISAs with a total £36m subscriptions (these figures were disputed by some platforms as being too low). In the following 2017/18 tax year this shot up 31,000 investors backing the IFISA with £290m subscribed in the tax year and a total of £366m in outstanding balances in IFISAs at 5 April 2018.

What is the best provision fund structure? (P2P Finance News), Rated: A

PROVISION FUNDS are designed to cover peer-to-peer investors in the event that a borrower defaults on their loan, but the way they are funded and operated varies widely across platforms. So what should investors be looking for and is there an optimal structure to reduce their chances of losses?

One key difference is whether pay-outs from reserve or provision funds are automatic or discretionary.

RateSetter is credited with the invention of the provision fund concept, which has been part of its business model since it launched in 2010. It is funded by borrowers’ repayments and money is automatically reimbursed to investors if loans go into arrears.

Tandem Recognized as Best New Digital Bank (Crowdfund Insider), Rated: B

Challenger bank Tandem has been recognized by CFI.co (Capital Finance International) as the “Best Neo Bank UK 2019.”

OakNorth launches mortgages for HNWIs, SMEs, and clients with atypical income streams (Fintech Finance), Rated: B

OakNorth – the bank for entrepreneurs, by entrepreneurs – has today announced it is entering the retail mortgage market with lifetime tracker rate products, aimed at affluent individuals with atypical sources of income.

The six largest banks in the UK dominate 77 percent of the mortgage market, but often find it commercially unviable to create bespoke mortgages for these individuals as they lack the appropriate cost base and expertise to cater to them. These individuals therefore require more bespoke lending solutions, and as a lender that has provided over £3bn in bespoke loans to UK entrepreneurs since its launch, OakNorth has the necessary expertise and tailored credit analysis models to cater to this unique market niche.

China

Jiayin Group Readies $ 40 Million U.S. IPO (Seeking Alpha), Rated: AAA

Jiayin Group (JFIN) has filed to raise $40 million in an IPO of ADSs representing underlying Class A shares, per an amended registration statement.

According to a 2017 Oliver Wyman report on Chinese FinTech firms, outstanding loan balances for online peer-to-peer lending platforms have exploded in recent years, from RMB 31 billion ($467 million) in January 2014 to RMB 856 billion ($129 billion) by January 2017.

P2P lending in crisis as regulatory bubble pops (Technode), Rated: A

Chinese peer-to-peer (P2P) lender Dianrong, once hailed as the “LendingClub of China,” appears to be in crisis following an announcement that it is closing around two-thirds of its offline branches and laying off as many as 2,000 employees. At around the same time, it was accused of falling behind on wages and severance payment. In mid-April, the company reportedly sought $100 million in investment to meet new capital requirements.

European Union

Goldman Delays Marcus’ Germany Launch (PYMNTS), Rated: AAA

Goldman Sachs has decided to delay the German launch of its consumer bank Marcus until 2020.

International

International P2P Lending Volumes April 2019 (P2P-Banking), Rated: AAA

The total volume for the reported marketplaces in the table adds up to 571 million Euro.

Milestones achieved this month (total volume since launch):

  • Mintos crossed 2 billion EUR
Source: P2P-Banking

This credit card won’t let you buy anything else after you’ve hit your annual carbon limit (Fast Company), Rated: A

Doconomy is launching two versions of the card later this year. One just tracks your carbon footprint as you spend, and the other, called Do Black, takes the additional step of setting a hard limit on your footprint for the year. Initially, the data used to calculate the impact of each purchase will be imprecise—the system pulls the category code of a merchant that classifies it as a particular kind of store, then makes a calculation based on the general carbon footprint of the industry, whether you’re buying something from a fast-food joint, a clothing store, or an airline. The limit is based on a country-specific calculation of how much carbon each citizen can emit to stay on track with the 2030 goal to cut emissions in half.

Others are working on similar solutions; a startup nonprofit called Poseidon Foundation is beginning to work with retailers to track the impact of specific purchases and let customers instantly buy a carbon offset equal to their emissions. Ben and Jerry’s tested the concept at an ice cream shop in London last year.

Over 50 Banks, Firms Trial Trade Finance App Built With R3’s Corda Blockchain (CoinDesk), Rated: A

ABN Amro, Standard Chartered, ING and around 50 other banks and companies have participated in tests of a trade finance application called Voltron.

The tests saw firms across 27 countries use Voltron, which was developed by R3 using its Corda platform, to make simulated letter of credit transactions.

Real Estate Tokens: What They Are and How to Invest (Bitcoin Market Journal), Rated: A

Put simply, a real estate token is a virtual asset used to represent ownership of land, apartments, homes, and various other real properties. The intent is to eliminate antiquated and outdated methods of dealing with real estate. Instead, buyers and sellers complete transactions with digital tokens.

Currently, it can be a challenge to find the right place to invest in real estate tokens; however, there are a few platforms that can get you started.

Harbor

The Harbor platform provides users with a way to trade real estate on a blockchain network. Assets available on Harbor include private REITs, real estate funds, building ownership, and land. Using blockchain technology means Harbor provides transparency, efficiency, fractional ownership, and, of course, liquidity.

Slice

Additionally, Slice gives users the ability to hold, trade, or liquidate their tokens with its built-in security exchange platforms. The platform is available to anyone who has $10,000 he or she is willing to invest.

Meridio

Meridio is a platform that gives its users the ability to invest in shares of real estate on the blockchain. Through Meridio, properties are split into digital shares, which gives investors and owners a way to interact with one another seamlessly.

Bitfinex Releases Whitepaper to Confirm $ 1 Billion Initial Exchange Offering (CryptoGlobe), Rated: A

Cryptoasset exchange Bitfinex has confirmed that it is planning to raise $1 billion through an initial exchange offering (IEO).

Dong has also been accepting pre-orders for Bitfinex’s upcoming token sale through his crypto-lending application Renrenbit. The well-known investor had reportedly taken pre-orders from users who wanted to participate in the public phase of Bitfinex’s upcoming $1 billion token sale, even before IFinex published an official whitepaper for it.

Cred Partners with Tron and Bitcoin.com to Provide Crypto Lending and Borrowing Services (Bitcoin Exchange Guide), Rated: A

Bitcoin.com has announced a partnership with Cred in which Bitcoin.com users will earn interests of up to 10% on their crypto holdings. Cred is a crypto borrowing and lending company whereas Bitcoin.com is an information portal that has over 4 million Bitcoin wallets.

Fvndit Launches $ 10M Equity-Back Digital Security Offering (Financial Buzz), Rated: A

Fvndit, Inc. (“Fvndit”), a California- and Vietnam-based fintech company, today announced the launch of a $10M digital security offering. Proceeds from the raise will be used to further propel Fvndit’s business objectives as the market leading SME-focused crowd-based funding platform in Vietnam.

Its wholly-owned subsidiary, eLoan, JSC (“eLoan”), operates an online Peer-to-Peer (P2P) funding and investing marketplace in Vietnam, its current local market. Today, SMEs account for more than 41% of Vietnam’s GDP (of $241B USD) and 97% of all enterprises but still remain largely neglected by traditional banks with 70% of them do not have access or have difficulty in accessing credit. eLoan was launched in late 2017 with a clear mission – to make credit more simple and investing more rewarding.

TomoChain teams up with Constant to bring first stablecoin to its platform (Cryptoninjas), Rated: B

Creci Wins its Category at the Innovate Finance Global Summit (PR Web), Rated: B

Creci, an early stage start-up, with headquarters in Hollywood, Florida and offices in Medellin and Bogota, was selected on April 30, 2019, as the category winner for Peer-to-Peer Lending, Alternative Funding, and SME Lending at the Innovate Finance Global Summit in London.

Australia

YOZO a quick and open answer to business lending maze (Mirage News), Rated: A

YOZO is redefining lending for small business by offering a transparent and seamless experience for their borrowing needs. Firstly, by taking the guessing game out of an increasingly frustrating question, “how much can my business borrow?”. YOZO helps small business gauge their borrowing capacity in under a minute. Secondly, by providing an intuitive online experience to apply and receive funds in 48 hours for approved customers.

Southeast Asia

Brankas wants to bring Southeast Asia’s banks and e-commerce into the digital era (TechCrunch), Rated: AAA

Fintech continues to be among the biggest topics driving startups and investment in Southeast Asia. The region’s “internet economy” is forecast to grow massively as its 600 million people increasingly come online — already Southeast Asia has more internet users (350 million) than the U.S. has people, but developing a robust payment landscape underpins those heady growth forecasts.

Brankas,  an Indonesia-based startup that operates regionally, is one such young company — it operates a platform that gives banks and financial companies the tech to roll out digital products and embrace online services.

Singapore Fintech Firm Heading into Indonesia (Retail News), Rated: A

Following a successful Series B funding round, SME lending platform Validus Capital is launching in Indonesia. SME lending platform Validus Capital has launched in Indonesia, its first Southeast Asian market outside its home country of Singapore, the firm announced in a media release on Thursday.

Latin America

Brazil fintech Nubank opens Mexico office as it seeks Latam expansion (Reuters), Rated: AAA

Brazilian fintech firm Nubank will open an office in Mexico on Tuesday, an initial step in a potential expansion into other Latin American countries, a company executive said.

Nubank, a six-year-old startup that has raised $400 million from investors such as China’s Tencent Holdings Ltd, Sequoia Capital, Tiger Global Management and Kaszek Ventures, will start Mexican operations with 20 employees, Nubank executive and co-founder Cristina Junqueira said in an interview.

Authors:

George Popescu
Allen Taylor

The post Thursday May 9 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 21 2019, Weekly News Digest

fintechs and personal loans

News Comments Today’s main news: BlockFi hits $25M in deposits in 2 weeks. Cash-back ETF injects trouble into ETF market. PeerStreet expands product line. Funding Circle fund higher impairments drag returns. Dianrong blames Chinese regime for troubles. Today’s main analysis: New home equity loans do not significantly alter credit scores. Today’s thought-provoking articles: SoFi Money review. Can Citi, JPMorgan beat […]

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

fintechs and personal loans

News Comments

United States

United Kingdom

China/Hong Kong

Other

News Summary

United States

BlockFi Receives $ 25 Million in Crypto Deposits in Just 2 Weeks After Launching Lending Products (CryptoGlobe), Rated: AAA

BlockFi Lending LLC, a New York-based “secured non-bank lender” that provides cryptocurrency-backed loans in USD to digital asset investors, has revealed that its interest-generating deposit accounts have received over $25 million in cryptocurrency.

SoFi Money Review: Online Checking (Nerdwallet), Rated: AAA

SoFi Money is an online checking account by SoFi, a company best known for its student loan refinance loans. SoFi’s account has a top-of-the-line interest rate and no monthly or overdraft fees. There’s no free ATM network, but SoFi reimburses many third-party ATM fees and doesn’t charge its own. SoFi also boasts unique perks: free career counseling and financial planning sessions.

Can Citi and JPM beat FinTech Personal Loans? (PeerIQ Email), Rated: AAA

The personal loan market has grown rapidly since 2010 and the growth has been driven by FinTechs. 

Source: TransUnion, PeerIQ

“My Chase Plan” and “My Chase Loans” – a point-of-sale financing alternative and a personal loan product respectively – that will be offered to its existing credit card customers.

LendingTree Study Finds New Home Equity Loans Do Not Significantly Alter Credit Scores (LendingTree), Rated: AAA

Home prices in the United States have rebounded to new highs since the financial crisis. As a result, American homeowners are sitting on the largest amount of home equity in history — at just over $15 trillion dollars, according to the Federal Reserve.

  • The decline in scores averaged just 13 points. At the high end, scores declined by 24 in San Jose,Calif. The smallest decline was 5 points in San Diego. Borrowers had an average score of 735 to start, so the declines are quite negligible in terms of access to credit and may have marginal impacts on the cost of credit. The highest starting credit score was 752 in San Francisco, while the lowest was 712 in Indianapolis.
  • The decline took an average of 158 days to reach bottom, which is just over five months. St. Louis homeowners saw their credit scores reach their lowest points in an average time of 101 days (3 months), while the longest decline was for homeowners in Dallas at 211 days (7 months). Loans do not appear on credit reports immediately after closing. Typically, the lender starts reporting to the credit bureaus after your first payment, depending on the lender’s reporting cycle. Thus it may take about 60 days after closing or even longer for it show up and start affecting a score.
  • Scores recovered over an average of 163 days. This is also just over five months, so the time to fall and recover are about equal. The quickest time to recover was 102 days, or slightly over 3 months, in Cincinnati. Borrowers in Chicago had the longest recovery time of 243 days, just over 8 months.
  • Scores recover within a year and begin to move higher. The complete cycle to return to the credit score prior to the home equity loan takes 321 days, less than 11 months. The shortest cycle was in St. Louis at 211 days and the longest in Chicago at 443 days, about 15 months.

As Cash-Back ETF Hits Market, Signs of Trouble Start to Mount (Bloomberg), Rated: AAA

Last week, one ETF upstart created a minor splash by doing what was once unthinkable — offering to pay investors to buy into its exchange-traded fund. That comes on the heels of eight fund providers — including JPMorgan Chase, Vanguard and BlackRock to name a few — all slashing fees in one of the industry’s most aggressive rounds of price cuts to date.

The sub-zero fee giveaway by Salt Financial, which previously ran a single $11 million ETF, is widely seen as a marketing gimmick to drum up a little PR, get customers in the door and increase its assets under management. During the first year, investors will receive 50 cents for every $1,000 in a new low-volatility stock ETF — until it grows to $100 million. After a year, a management fee of 0.29 percent, or $2.90 per $1,000, could kick in.

The race to zero, however, is very real. Fidelity Investments jump-started the no-fee push in August by offering index funds for free. In February, SoFi said it would waive charges on two planned ETFs for the first year. Last week, JPMorgan started selling America’s cheapest-ever ETF for the princely sum of 20 cents for every $1,000 invested. And BlackRock unveiled plans Wednesday to cut fees for large clients in one of its S&P 500 indexed mutual funds.

PeerStreet Expands Product Line with Residential for Rent Loans (BusinessWire), Rated: AAA

PeerStreet, a platform for investing in real estate backed loans, today announced the launch of a new loan product for private lenders: Residential for Rent loans. Residential for Rent loans have a 30-year term so borrowers can secure long-term financing for residential rental properties. This launch is in response to key market conditions: as more people struggle to finance buying a home, the rental market has continued to grow.

3 Big Reasons To Fill Out The FAFSA (Even If You Think You Earn Too Much) (Huffington Post), Rated: A

One-quarter of families don’t complete the FAFSA, according to Sallie Mae’s 2018 How America Pays for College survey. Of those that don’t fill it out, 48 percent say it’s because they don’t believe they’ll qualify for financial aid.

But they’re often wrong: An analysis by NerdWallet found that in 2017, students left an estimated $2.3 billion in federal financial aid on the table by not filling out the FAFSA.

According to Elaine Rubin, senior contributor and communications specialist at private student loan marketplace Edvisors, most Americans are eligible for some type of federal aid. In fact, it’s available to anyone with a household income below $250,000 per year, CNBC reported.

Madden lawsuit nears end, but online lenders still seek fix from regulators (American Banker), Rated: A

An 8-year-old class action that wreaked havoc on the online lending industry is finally winding down, but the lobbying push in Washington to undo its impact shows no signs of abating.

Lawyers in the case have filed a proposed settlement that would provide $9.8 million in cash and debt relief to as many as 58,000 consumers, setting up the final chapter in a lawsuit that is likely to be remembered best for the legal precedent it established.

The State of Digital Engagement for Online Lending (LendIt), Rated: A

A recent trend report by Clarity Services, a credit reporting provider, showed that online funded loan volumes grew by almost 500% between 2013 and 2017.

How Far are Most in their Digital Transformation Strategy?

  • 54% of financial institutions have developed a digital strategy, but have not yet implemented it
  • 29% of financial institutions are currently developing a digital transformation strategy
  • Only 14% of financial institutions are in the process of implementing a digital transformation strategy

How Much Will They Be Investing In Digital Transformation in the Next 12-18 Months?:

  • 65% are planning to increase spending by 10%
  • 26% are planning to increase spending by 1-9%
  • 6% have no plans to change spending

What will They be investing in over the next 12-18 Months?

  • Replace or upgrade legacy IT systems — 88%
  • Reduce operational inefficiency — 76%
  • Improve customer experience — 74%

X Financial’s Fourth Quarter Results Take Stock 5% Higher (Capital Watch), Rated: A

The stock of X Financial (NYSE: XYF) jumped more than 5 percent Tuesday morning, to $6.55 per American depositary share, after the peer-to-peer lending marketplace announced improved revenue and profit for the fourth quarter, as well as a dividend for 2018.

The Shenzhen-based company, which connects borrowers and investors on its platform, reported in a statement Monday evening that its revenue grew 18 percent year-over-year to $125.5 million during the three months through December.

Its net income, X Financial said, was $35.2 million, or 22 cents per share, at a 53 percent increase from the same period of 2017.

Why Corporates Cant Fund Early Pay Programs (Dynamic Discounting + SCF) (Spend Matters), Rated: A

If you look at the graph below, 5% of S&P 500 companies hold more than half the overall cash; the other 95% of corporations have cash-to-debt levels that are the lowest in data going back to 2004, according to Wells Fargo research. We know who those 5% are — they are the GAFA companies: Google, Amazon, Facebook and Apple.

Source:

ZestFinance Using AI To Bring Fairness To Mortgage Lending (Forbes), Rated: A

Discrimination in lending has long been a problem, shutting minority groups out of the home buying process.

ZestFinance, the artificial intelligence software company focused on the credit market is trying to change that with ZAML Fair, a new software tool that aims to reduce the instances of biases and discrimination in lending.

CoreLogic Launches PanoramIQ to Provide More Accurate and Complete Property Insights (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today announced PanoramIQ, an intelligent property solution that delivers a more complete view of property data with more current and reliable sources than public-record data alone. Utilizing a combination of public and proprietary property datasets, a unique property ID, machine learning and advanced analytics, PanoramIQ provides lenders, mortgage industry professionals and government entities with deeper, more accurate and complete property insights, allowing clients to make better decisions in a timely and efficient manner.

White Oak Healthcare Finance Launches Real Estate Investment Vehicle with New Hires (ABL Advisor), Rated: A

White Oak Healthcare Finance, LLC announced it will broaden its product offering and enter the healthcare real estate investment market.  White Oak hired Jeff Erhardt, Paul Nevala, Mike Treiber and John Brussard to build out the vehicle, which will initially invest up to $500MM and will focus on investments in seniors housing and skilled nursing properties using triple net leases and joint-venture RIDEA structures.

Banks seek Congress’ help to block fintech path to ‘industrial’ charters  (Roll Call), Rated: A

A bank industry group is lobbying Congress to block financial technology firms, such as online lender Social Finance Inc. and payment processor Square Inc., from obtaining an obscure form of a state bank charter that would let them operate nationally with little federal supervision.

The Independent Community Bankers of America last week distributed a policy paper around Washington calling for an immediate moratorium on providing federal deposit insurance to industrial loan companies, or ILCs, which are chartered by only a few states — most notably Utah.

Form S-3 Senmiao Technology Ltd (Street Insider), Rated: A

Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.

Debt Securities. We may offer debt securities, which may be secured or unsecured, senior, senior subordinated or subordinated, may be guaranteed by our subsidiaries, and may be convertible into shares of our common stock. We may issue debt securities separately or together with, upon conversion of or in exchange for other securities. It is likely that any debt securities issued will not be issued under an indenture.

Figure Technologies, Inc. Expands Leadership Team as It Builds Out Financial Empowerment and Wealth Offerings (PR Newswire), Rated: B

Figure Technologies, Inc., a fintech company in both the home equity and blockchain space, announces that John Sweeney has joined the company as the head of Wealth and Asset Management, along with Dr. Michael Dooley, who joined as chief economist. These hires reflect Figure’s commitment to empowering consumers and building out products to improve their financial well-being.

LendPro Hires Belinda Kelton as Vice President of Sales (LendPro Email), Rated: B

LendPro LLC, a provider of Lending-as-a-Service (LaaS) products and platforms for retailers, has hired retail industry veteran Belinda Kelton as its Vice President of Sales, the company announced today. Kelton is the latest of many new hires for the fast-growing fintech company, which recently moved to a new location to accommodate new staff members and provide the best service possible to customers.

Corporate Counsel, Commercial (Go In House), Rated: B

Affirm is looking for a business-minded Corporate Counsel, Commercial with broad expertise in complex commercial transactions. This role will report to Affirm’s Associate General Counsel.
United Kingdom

Funding Circle fund sees higher impairments continue to drag returns (AltFi), Rated: AAA

The Funding Circle SME Income fund saw just a marginally positive performance in February with Net Asset Value growth of just 0.05 per cent as impairments continued to hurt performance.

Impairments reduced NAV returns by 0.7 per cent in February, said analysts at Liberum, in line with the average monthly impairment rate of recent months.

Revolut Is Testing the Limits of Finance (Bloomberg), Rated: AAA

Storonsky is getting a taste of the scrutiny that lies ahead as he tries to upend the world of banking with Revolut, his 3-1/2 year-old startup. The U.K.’s financial regulator is examining why the digital bank last summer temporarily turned off a system designed to automatically block suspicious transactions.

It was valued at $1.7 billion at its last fundraising and now has over 4 million customers after new accounts tripled in 2018. That’s about three times more than the two lenders combined and the same number of customers as foreign-exchange business TransferWise, which is four years older.

Source: Innovate Finance

CrowdProperty launches equity sale after increasing loan book by £100m (PlaceTech), Rated: AAA

The specialist peer-to-peer lender has secured £100m of loan capital as it launches a public crowdfunding campaign, already oversubscribed, that values the business at more than £15m.

Having raised £100m from an unnamed “major institution”, CrowdProperty will use the funds to expand the number of property projects it backs over the next 12-24 months.

OakNorth reports £33.9m profit for 2018 and commits to donating 1% of all future net profit to charitable causes and social entrepreneurship (OakNorth Email), Rated: A

IFISA Guide: SME loans (P2P Finance News), Rated: A

Ablrate’s IFISA offers returns ranging between 10 and 15 per cent, enabling investors to fund asset-backed loans to UK businesses.

ArchOver’s IFISA enables investors to fund secured business loans and enjoy tax-free returns of up to 10 per cent per year.

MoneyThing’s IFISA is one of the highest-paying tax wrappers that invests in secured business loans, offering annual returns of up to  13 per cent.

Assetz Capital

Returns vary depending on the account, going from 4.1 per cent to 6.25 per cent on its auto-invest products, and up to 15.5 per cent with its manual lending option.

Funding Circle

The minimum investment in this flexible IFISA is £1,000.

LendingCrowd

The Growth and Income ISAs automatically spread investors’ money across a range of loans and have variable target rates of six per cent and 5.6 per cent, respectively.

Specialist lender funding will be the key issue for 2019 – LendInvest (Mortgage Solutions), Rated: A

The situation is a big reminder to lenders that it is crucial to concentrate on building a diverse range of funding sources, rather than just one single route.

It’s something that we have put a lot of work into at LendInvest, as it allows us to lend with confidence, knowing that the funds we have promised to a borrower will be there.

The firm sent out an email on 24 January 2019 suggesting that recipients should have a “stockpile ready” as some believe Brexit “could affect the amount of food available,” while offering a £5 promotional discount on a loan.

Why investors are fleeing the ‘fear and greed’ of stock markets for peer-to-peer loans (The Telegraph), Rated: A

Investors are ditching the stock market in favour of bundled loans sold by fledgling platforms that are yet to be tested by a financial crisis.

The top 20 UK places for high net worth earners (Citywire), Rated: B

Nearly two fifths of the UK’s top earners now live in London, according to research from peer to peer lending platform easyMoney.

China/Hong Kong

China’s Online Lender Dianrong Blames Chinese Regime for its Woes (NTD), Rated: AAA

Dianrong, one of China’s biggest peer-to-peer (P2P) lenders, is laying off staff and shutting stores. The company blamed the Chinese regime for its troubles and said the absence of clear-cut policies was proving to be a heavy burden.

Dianrong shut down 60 of its 90 offline stores and laid off an estimated 2,000 employees, Reuters reported in early March.

Pintec’s Stock Rises on Steady Results During Quarter of IPO (Capital Watch), Rated: A

Pintec Technology Holdings Ltd. (Nasdaq: PT) gained 15 cents in trading by midday after reporting a slight increase in revenue and narrowed losses for the fourth quarter.

The Beijing-based tech platform facilitating financial services said on Wednesday that its revenue in the three months through December was $32.9 million, 2 percent higher year-over-year. Its net loss was $1.2 million, a 10 percent decrease from the same period of 2017. Loss per share was 1 cent.

For the full year, Pintec reported revenue of $153.1 million, 85 percent higher from the preceding 12 months, and profit of $1.1 million in contrast to a loss in 2017.

KKR Raising First Asia Real Estate Fund, Targeting $ 1.5 Billion (U.S. News), Rated: A

Global investment powerhouse KKR & Co Inc is raising its first Asia-focused real estate fund, targeting $1.5 billion as it looks to deepen its real estate portfolio in the region, said people with knowledge of the matter.

Investment firms raised $18.6 billion in 26 Asia-focused real estate funds last year, the highest since 2008, according to data provider Preqin. KKR’s U.S.-based rival Blackstone Group raised the region’s biggest real estate fund last year at $7.1 billion.

China and distressed debt top DB’s hedge funds tastes test (City Wire Selector), Rated: A

Alternative investors are increasingly drawn to Asian hedge funds and distressed strategies, according to the latest Alternative Investment Survey from Deutsche Bank.

The 2019 survey canvassed the views of 425 asset allocators running $1.7 trillion of hedge fund assets in 28 countries.

European Union

Finnest and Invesdor Merge to Combine Debt and Equity Operations in Europe (Crowdfund Insider), Rated: AAA

Finnest, an Austria based Fintech that provides debt capital to small and medium-sized firms, has announced a planned merger with Finland based Invesdor Oy. The newly formed company will see the combination of a leading Nordic equity crowdfunding platform and a top online lender serving the DACH region (Deutschland, Austria, Switzerland). The two companies will now be able to offer a full stack of debt and equity services and investments across Northern Europe as well as more numerous options for investors.

Invesdor claims over 50,000 registered users as well as a MiFID II license for 28 European countries – the first crowdfunding platform to receive approval. Invesdor reports investors, both institutional and individual, from over 150 different countries. Invesdor currently offers a unique financing portfolio in the market, from equity to loans and bonds to IPOs.

Bitbond to Work with BitGo for Germany’s First Security Token Offering (Bitbond), Rated: A

Bitbond has launched Germany’s first Security Token Offering with a BaFin approved Prospectus and will be using  BitGo’s Business Wallet. The STO has a hard cap of EUR 100 million (~USD 113 million) and will conclude in May. Thousands of investors have already joined to take advantage of early bird discounts.

The STO marks a significant milestone for the crypto asset industry, not only because it has an approved prospectus, but also because it offers tokenized debt with a predetermined maturity. Bitbond Token (BB1) holders will receive quarterly and annual payments for 10 years, after which Bitbond will buy back the token at its original value of EUR 1 per token.

India

Top 5 sectors that need upskilling: How to stay relevant in age of disruption? (Indian Express), Rated: A

The banking sector is witnessing a massive growth owing to the launch of connected products and services, business innovation and the rise of the middle class along with the emergence of new fintech areas of mobile payments, digital wallets and P2P lending. Technologies such as chatbots, blockchains and automation through robotics powered by AI are transforming the sector.

CRYPTO EXCHANGE COINDCX RAISES SEED FUNDING FROM BAIN CAPITAL VENTURES (Coin News Span), Rated: B

Bengaluru-based client leasing startup RentoMojo has raised $10 Mn serial B funding from Bain Capital Ventures and Renaud Laplanche.

Asia

Look out for 2019’s top 7 lending startups (e27), Rated: AAA

As of 2019, there are still 2.45 billion underbanked and unbanked people in the world. The more innovative lending companies there are, the faster this market will be covered and served.

October.eu (formerly Lendix) is an innovative, easy-to-use, and intuitive peer-to-peer platform for lending and investing.

The Dharma team works on a platform that lets businesses build lending products on the Ethereum blockchain.

The governing idea of Kabbage is that funding shouldn’t be complicated for businesses. So, the company makes an effort to provide entrepreneurs with up to US$250,000 in loans for which you can allegedly qualify for in just 10 minutes or at most, a day.

Founded in 2014, TurnKey Lender has already become the market’s leading intelligent all-in-one lending automation platform.

The name SoFi comes from social finance and it’s another great example of a successful peer-to-peer lending operation. Founded in 2011, the company is already a huge market player with US$30 billion worth of funded loans and 600 thousand members.

Affirm goes a different route than most alternative lenders. The idea behind it is enabling in-house financing for retail businesses. So, the store’s customers get an instant loan with zero to 30 per cent interest rates.

With quite a unique approach, Lendio offers small business an opportunity to get services and credit products from lenders with the best conditions. It’s a marketplace with more than 75 lenders on board.

Vietnam is the region’s fintech hub (The ASEAN Post), Rated: AAA

Vietnam’s strong economic growth in recent years has led to the flourishing of the nation’s digital economy. The country’s economy in 2017 was deemed to be one of the best performing in the region. Its economy saw a 6.8 percent increase in gross domestic product (GDP) – higher than the government’s initial target of 6.7 percent – making it one of the fastest growing economies in Southeast Asia.

Vietnam currently has 54 percent of its population on the internet and the number is expected to grow further in the coming years.

Data from Vietnam Briefing shows that 39,580 start-ups entered the Vietnamese market in just the first four months of 2017, a 14 percent increase from the first quarter of 2016. Within the start-up scene, the fintech sector has become the most attractive for investments, receiving US$129 million in 2016.

Travelstop Targets Fintech SMEs with Business Travel Management Platform (Fintech News), Rated: A

Co-founded by former Expedia employees, Singapore-based Travelstop is a modern, artificial intelligence (AI) powered SaaS platform that simplifies business travel, automates expense reporting for businesses in Asia, and offers insights to business owners.

The platform is quickly gaining traction from the region’s startups and fintech community, helping small and medium-sized enterprises (SMEs) and high-growth organizations including Funding Societies, Fintech News Network, RedDoorz, S P Jain School of Global Management and Dot Property better to manage their business travels.

Asia has the largest share of mobile internet traffic, with 61% of its population using mobile devices to go online.

How Ovo Has Grown to be Indonesia’s Largest Digital Payments Platform (Entrepreneur), Rated: A

After online stores, Indonesia’s leading digital payments platform Ovo has been making strides into offline stores, increasing the number of merchants that accept the payment method.

OVO has reportedly acquired local peer-to-peer lending company Taralite, a move that will pave the way for OVO to branch out into the lending business which is seen to be a potential profit-generator for the company.

TurnKey Lender Opens a New Office in Kuala Lumpur (Digital Journal), Rated: A

TurnKey Lender, a provider of intelligent lending automation, decision management, and risk mitigation solutions, announces the opening of a new office in the capital of Malaysia, Kuala Lumpur. Its main goal will be to physically represent TurnKey Lender and support the company’s operations in Asia.

With internet penetration at 85.7% in 2018, the country is perfectly positioned for the rapid growth of alternative lending initiatives in areas like peer-to-peer lending and in-house financing.

Golden Gate Ventures ties up with Hanwha to invest in Asian startups (SDF-KH), Rated: B

Golden Gate and Hanwha will focus on startups that are raising fund for ‘Series B’ stage.

Singapore-based Golden Gate Ventures confirmed on Tuesday that it has teamed up with South Korea-based Hanwha Asset Management to invest in Southeast Asian technology startups.

Authors:

George Popescu
Allen Taylor

The post Thursday March 21 2019, Weekly News Digest appeared first on Lending Times.

Thursday March 14 2019, Weekly News Digest

GreenSky

News Comments Today’s main news: FTC makes final decision on SoFi. OnDeck extends two revolving credit facilities. LendingPoint sees drop in debt management loans, increase for new purchases. LendInvest to float 500M GBP. Lufax hits $39.4B valuation. Klarna adds GooglePay as payment option. Today’s main analysis: Unemployment rate and GreenSky’s earnings. Today’s thought-provoking articles: Earnest vs. SoFi for student loan […]

The post Thursday March 14 2019, Weekly News Digest appeared first on Lending Times.

GreenSky

News Comments

United States

United Kingdom

European Union

Australia/New Zealand

Other

News Summary

United States

Deal Final in FTC’s Action Against Online Lender (Manatt), Rated: AAA

The Federal Trade Commission (FTC) has finalized its deal with SoFi, an online lender that the agency had accused of making false statements about student loan refinancing.

According to the FTC, the California-based personal finance company misrepresented how much money student loan borrowers have saved or could save by refinancing.

Read the FTC complaint here.

Read the FTC decision and order here.

OnDeck Announces Extension of Two Revolving Credit Facilities With Credit Suisse & Deutsche Bank (Crowdfund Insider), Rated: AAA

OnDeck, a small business online lending platform, announced on Wednesday extensions to its existing credit facilities with Credit Suisse and Deutsche Bank on improved terms.  According to OnDeck, the amended facilities provide an aggregate of $360 million of committed funding capacity and are available to finance OnDeck’s term loans and revolving lines of credit. The scheduled maturity dates for the facilities were extended three years to March 2022.

Unemployment Rate Drops to 3.8%; GreenSky’s Strong Earnings (PeerIQ), Rated: AAA

The unemployment rate dropped to a near five decades low of 3.8% even as nonfarm payrolls only rose by 20K. Average hourly earnings rose by 3.4%, above economists’ expectations.

Source: WSJ
Source: Deutsche Bank Research, WSJ

GreenSky’s Strong 4Q2018 Earnings

GreenSky’s 4Q revenue grew by 22% YoY to $109 Mn, although net income fell by nearly 43% YoY to $23 Mn. The stock rose by ~6% post earnings.

  • Transaction volume increased by 23% YoY to $1.3 Bn.
  • Loan servicing portfolio increased by 36% YoY to $7.3 Bn.
  • GSKY had aggregate commitments of $11.8 Bn from its nine bank partners, of which $4.8 Bn were unused.
  • 30+ DQ rates rose slightly YoY from 145 bps to 148 bps.
  • GreenSky now has nearly 12 k home improvement merchant partners and nearly 3 k elective healthcare partners.
Source: GreenSky, PeerIQ

How to Decide Between Earnest and SoFi for Student Loan Refinancing (Credible), Rated: AAA

Earnest and SoFi are two of the best student loan refinancing companiesout there. They both offer fixed as well as variable rate loans, a 0.25% autopay rate discount, and certain unemployment protections to help in the event of involuntary job loss, but they also have their differences.

Here’s a side-by-side comparison of both lenders to help you make an informed decision.

Source: Credible

The rate of borrowers using loans for debt management drops; growing proportion of borrowers use loans for new purchases (LendingPoint), Rated: AAA

It turns out that, over the past two years, the proportion of our borrowers who say they are earmarking their loans for debt consolidation has decreased markedly, from about 60% in 2017 to about 54% in 2018. The percent using loans to pay for new merchandise or services has grown during those two years. Home improvement jumped from 6% to 8%; loans for medical expenses rose from 2% to 7%.

In 2017, the percent of millennial consolidators was about 61%. In 2018, that dropped a full 10%, down to 51%, a bigger decrease than any other age cohort.

Source: LeningPoint

What Do Millennials Want From Banks? Non-Financial Products (Forbes), Rated: AAA

If they haven’t, then why are 56% of Millennials giving megabanks (the four largest US banks) their 

Source: Cornerstone Advisors

The “Millennials hate banks” meme is a myth.

Millennials’ Access to Subscription Services
Percentage of Millennials that…
Don’t have the service but would like to Have the service, and pay for it directly Have the service, but don’t pay for it directly Don’t have or want the service
Identity theft protection 31% 20% 29% 21%
Personal/family data storage 29% 20% 19% 31%
Child identity theft protection 27% 15% 16% 42%
Rx, vision, hearing discounts 26% 31% 25% 18%
Travel/trip insurance 26% 18% 19% 37%
Roadside assistance 19% 40% 26% 15%
Cell phone damage protection 18% 42% 20% 19%
Source: Cornerstone Advisors

Green Dot targets social media influencers in banking-as-service push (American Banker), Rated: A

A new affinity banking service developed by Green Dot proposes to tap one of the most potent — and controversial — sources of distribution in the digital economy: social media influencers.

The digital banking and payments provider is developing what it calls Bank OS, a simpler version of its enterprise banking-as-a-service platform already used by the likes of Intuit, Stash, Uber and Walmart. It would enable partners to develop their own financial products just as those brands do, including offering credit cards, debit cards with loyalty programs or even a mobile app.

How online lenders attract and service the evolving SMB borrower (Tearsheet), Rated: A

But while small businesses still struggle with cash flow, how they shop for loans and their level of financial education about their options are changing. On Tearsheet’s recent webinar with leaders at Kabbage, BlueVine, and Intuit’s QuickBooks Capital, we discussed the changing nature of the SMB borrower and how their firms have evolved to keep up.

Pay Yourself First? Last Is How Small Biz Often Works (Newsmax), Rated: A

Everyone knows the Golden Rule of business is to pay yourself first. But more than half of small business owners are going months without pay – if they are taking any at all.

About a quarter of these entrepreneurs go two to six months without pay, and another quarter have gone more than six months without salary, according to a recent survey from Kabbage (), a cash flow optimization platform.

PAYNET STRATEGIC INSIGHTS MARCH 2019 (PayNet), Rated: A

The PayNet Small Business Lending Index (SBLI) rebounded with a 17.2 point jump to 150.7 in January, climbing to its second-highest level ever. On an annual basis, the SBLI increased 4.9%. The SBLI 3-month moving average also rose in January and currently stands 1.5% above its year-ago level.

Source: PayNet

The PayNet Small Business Delinquency Index (SBDI) 31–90 Days Past Due edged up one basis point to 1.45% in January, and is up six basis points on an annual basis — its 33rd consecutive year-over-year increase. The SBDI 91–180 Days Past Due was unchanged at 0.38% but is three basis points above its year-ago level.

Less Than Zero? This Proposed ETF Would Pay Investors, But There’s A Catch (Benzinga), Rated: A

Salt Financial, which currently offers one ETF, has filed plans with regulators to launch a low volatility that would pay investors, but there’s a catch.

Equifax Deleted Key Data Breach-Related Docs, Senators Say (Law360), Rated: A

Equifax Inc. failed to preserve key internal discussions over its massive 2017 data breach, U.S. senators said Thursday at a hearing where elected officials grilled the credit reporting giant’s CEO and the…

Home Equity Line of Credit Providers Face Growing Threat from Alternative Lenders, J.D. Power Finds (JD Power), Rated: A

Despite record-high levels,[1]new home equity line of credit (HELOC) originations have been steadily declining[2] as a perfect storm of rising interest rates, new tax laws and growing competition from alternative lenders has crimped traditional HELOC growth. According to the J.D. Power 2019 U.S. Home Equity Line of Credit Satisfaction Study, released today, HELOC customers are more likely than ever to shop for alternative sources of funding and HELOC providers are falling short on digital offerings.

This week in Chicagoland real estate: One Chicago Square, Woodlawn and more (Chicago Agent Magazine), Rated: A

New York-based DDG, Chicago-based Marc Realty and Ruttenberg Gordon announced plans for a 13-story hotelwith 250 rooms in Fulton Market. The developers are raising $55 million to fund the project through Prodigy Network, a New York-based real estate crowdfunding platform. The hotel will be located at 1234 West Randolph Street and will be operated by New York-based Standard Hotels. It’s set to be completed within two years.

PeerStreet Expands Executive Leadership with Two Senior Hires in Finance Team (BusinessWire), Rated: B

PeerStreet has announced the hiring of two executives with extensive experience in the financial services and real estate sectors: Ellen Coleman and Bob Brown. Ms. Coleman joins as Executive Vice President of Finance, and Mr. Brown joins as Executive Vice President of Finance & Corporate Development.

CoreLogic : Introduces Verification of Employment and Income Solution to Expedite Borrower Verification Process (MarketScreener), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, today released an enhanced Verification of Employment and Income(VOE/I) product. The comprehensive new VOE/I product takes time, touch and cost out of traditional employment and income verification through a three-step ‘waterfall workflow’ process, ensuring that every mortgage applicant can be verified.

The enhanced VOE/I product features a three-step ‘waterfall workflow’ that ensures each borrower’s employment and income is verified as efficiently as possible.

  • Step One: Instant verification via a direct integration to The Work Number (TWN)
  • Step Two: Automated verification leveraging dozens of third-party data sources
  • Step Three: Manual verification by a team of dedicated CoreLogic verification experts

CORELOGIC INTEGRATES CONDOSAFE WITH THE ELLIE MAE ENCOMPASS ALL-IN-ONE MORTGAGE MANAGEMENT SOLUTION (CoreLogic), Rated: B

CoreLogic today announced the integration of its CondoSafe product with the Ellie Mae Encompass® all-in-one mortgage management solution. CondoSafeis a one-stop condo project review tool that enables lenders to have a single, consistent, standardized review process, allowing them to determine eligibility earlier in the process, resulting in quicker approvals.

ArborCrowd Announces New Equity Offering in 707-Unit Multifamily Portfolio (AP News), Rated: B

ArborCrowd, the first crowdfunding platform launched by a real estate institution, today announced a new offering that allows investors to acquire equity interests in the Sioux Falls Multifamily Portfolio, a collection of class-B apartment communities located in Sioux Falls, S.D. The properties exhibit strong upside potential due to Sioux Falls’ sound multifamily real estate fundamentals and notable lack of professionally managed workforce housing product.

The investment has a targeted internal rate of return (IRR) of 12 to 14 percent over a three- to five-year hold period. Tzadik has budgeted $5.2 million to perform a comprehensive capital improvement plan that will include upgrades to all renovated units, common areas and public spaces.

LendPro’s Female Leaders Celebrated on International Women’s Day (LendPro Email), Rated: B

As the financial technology (fintech) industry continues to grow, innovators are increasingly looking for leadership and expertise to grow their companies and stand out from competitors. LendPro, a Lending-As-A-Service (LaaS) fintech company, prides itself in hiring strong talent.  Women make up 50% of staffing at LendPro’s Charlottesville corporate office, versus 37% female staffing at most fintech companies.

United Kingdom

Property finance hub Lendinvest plots £500m London float (Sky.com), Rated: AAA

The online property finance hub Lendinvest is plotting a £500m stock market flotation that will provide a fresh test of investors’ faith in a fast-growing but volatile area of the non-bank lending market.

Sky News has learnt that Lendinvest, which was set up in 2008 and has so far lent roughly £2bn to help buy, build or renovate British homes, has appointed Lazard, the investment bank, to advise on its strategic options.

Lending revolution: fintechs vs banks (Raconteur), Rated: AAA

Eight out of ten SME loan applications were approved by banks in the third quarter of 2018, according to the latest figures from trade association UK Finance. While this is a far cry from the days of the global financial crisis, when SME lending all but dried up in part due to regulatory pressures to shore up capital, smaller companies are still citing challenges in securing funding from traditional players, according to Stuart Chalmers, commercial banking lead for Accenture UK.

Alternative lenders understand the hunger for a seamless customer experience and have built credit journeys that align to business expectations

Almost 30,000 companies used non-traditional channels over the year, with peer-to-peer lending and equity-based crowdfunding now established investment vehicles for seed, startup, early-stage and fast-growth companies seeking capital. In fact, CCAF estimates that 29 per cent of all new loans issued in 2017 to small businesses with annual turnovers less than £2 million came from alternative finance.

Source: Raconteur

Burnham residents are the most thrill-seeking in the UK according to new study (Windsor Observer), Rated: A

It may come as somewhat of a surprise, but according to research from Zopa, Burnham has been revealed to be the most thrill-seeking town.

Peer-to-peer firms told to improve wind-down arrangements (Out-Law), Rated: A

In a letter to chief executives (4 page / 352KB PDF) sent last week, the FCA said a recent supervisory review of firms’ current arrangements against current requirements “strongly suggests” some P2P firms were falling short of the standards required by its rules.

Augmentum Capital signs up to Innovate Finance (P2P Finance News), Rated: A

AUGMENTUM Capital has joined Innovate Finance as its first investor member.

It is currently planning to issue extra ordinary shares in its investment trust as it looks to fund around £300m of potential opportunities in the sector.

PEER TO PEER LENDER RELAUNCHES PRODUCTS (Insider Media), Rated: A

A South West-based peer to peer lender is to re-launch its lending products aimed at individuals and businesses.

Folk2Folk is to offers 9 per cent interest rates for investors with a loan to value ratio of up to 60 per cent.

The business has so far brought £275m into rural businesses in Britain over the past six years.

Wonga compensation claims four times higher than expected (TechRound), Rated: A

It has been recently revealed that the number of compensation claims made against the failed payday lender Wonga, which filed for administration in August 2018, has ended up increasing four-fold. The initial figure given by the Financial Ombudsman Service in a Treasury Committee in January this year suggested that there were around 10,500 customers who had open complaints with the short-term credit, high-interest company.

Now, it turns out that the number of redress claims that have been made against Wonga is considerably higher, totalling over 40,000. It is potentially the case that these people will not end up getting their money back after having been mis-sold loans.

The IFISAs you can open for £100 or less (P2P Finance News), Rated: A

According to the most recent HMRC statistics, overall ISA savings fell from £79.8bn in 2015/16 to £61.5bn in 2016/17. Meanwhile, Bank of England statistics found that the amount of money that Brits were saving (both within and outside of the ISA wrapper) fell by £7bn in 2018 alone.

  • Abundance

Minimum investment: £5

  • Assetz Capital

Minimum investment: £1

  • Crowd2Fund

Minimum investment: £10

  • RateSetter

Minimum investment: £10

  • Octopus Choice

Minimum investment: £10

Environmental benefits of ISA investment (The Ecologist), Rated: A

Crowdfunding and peer to peer lending grew out of the banking crisis of 2008. According to the European Central Bank, the availability of bank loans to SMEs declined 23 percent immediately following the crash, causing a devastating impact on the economy.

Over 100 Finastra customers upgraded trade software in time to meet new SWIFT standards (RealWire), Rated: B

Over 100 Finastra customers were upgraded to the latest compliant versions of its transaction banking software, Fusion Trade Innovation, ahead of the new SWIFT standards deadline of 17 November 2018. The new ‘Standards MT Release’ included significant changes to category 7 messaging standards used in trade finance – the most significant set of changes to the SWIFT trade finance messaging interface in over 30 years.

China

China’s Lufax hits huge $ 39.4bn vaulation thanks to Primavera Capital-led Series C (Alt Assets), Rated: AAA

Chinese peer-to-peer lending business Lufax has confirmed it has reached an enormous $39.4bn valuation thanks to a Series C round led by private equity house Primavera Capital.

Chinese fintech unicorn Lufax in no rush to IPO (Technode), Rated: A

Chinese peer-to-peer (P2P) lender Lufax is not in a hurry to list on the stock markets, said an executive of its biggest shareholder, Ping An Insurance, during its earnings call, Chinese media reported (in Chinese) on Wednesday.

Ping An Insurance Group deputy CEO Jessica Tan said after Lufax’s latest round of funding, Ping An still holds approximately 41% of its shares.

European Union

Google Pay Added to Klarna’s Bank of Payment Options (WWD), Rated: AAA

Today, Klarna, the global payments provider “smoothing” out kinks in the checkout process for retailers, announced a partnership with GooglePay. Available for Klarna customers in Sweden, the intention is to make mobile payments “even easier and more secure.”

CreditEase Invests in wefox Group, the European Largest Insurtech Platform (PR Newswire), Rated: AAA

CreditEase, a Beijing-based leading FinTech conglomerate in China, announced today that its direct investment arm, CreditEase FinTech Investment Fund (CEFIF), participated in wefox Group’s $125 million USD Series B, a fast-growing Berlin-based insurtech firm together with Mubadala’s newly created European Ventures Fund. The investment is the largest Series B round for a European insurtech and Goldman Sachs International is acting as the private placement adviser to wefox Group in connection with the transaction.

The investment will help spearhead the company’s expansion into the European broker market. It also paves the way for wefox Group to accelerate growth and create the world’s most innovative product and engineering team applying advanced data analytics to create an all-in-one insurance platform in which all interactions are personalized. The company, which was founded in 2014, has grown its revenue to around $40 million USD, while serving more than 1500 brokers and over 400,000 customers, making it Europe’s number one insurtech platform.

Luna Connect: A new digital disrupter in the lending landscape (Irish Times), Rated: A

Luna Connect is a new digital lending platform primarily aimed at those lending to SMEs. It is designed to fit into the rapidly evolving financial services ecosystem and its founder, Brian D’Arcy, drew the inspiration for his business from the disruption currently underway in the financial services sector.

The company’s target market are lenders offering loans of under €200,000, whose borrowers typically require a fast decision on their application and want a more transparent lending process. The initial focus will be on Ireland and the UK with Europe and the US to follow. Investment in the project to date has been around €120,000 which was self-funded with support from the NDRC and Enterprise Ireland through the competitive start fund.

Australia/New Zealand

New US ambassador warns of China’s ‘payday loan diplomacy’ (The Washington Post), Rated: AAA

The new U.S. ambassador to Australia said Wednesday that he’s concerned about the way China lends money to developing Pacific nations in what he describes as “payday loan diplomacy.”

China categorically rejects accusations that it uses loans, grants and other financial inducements to extend its diplomatic and political reach, saying it is merely acting in the best interests of both sides in such transactions.

New way to borrow takes Australia by storm (Mozo), Rated: A

As distrust of the nation’s big banks and mortgage brokers swells amongst the wreckage of the banking royal commission, online lenders are emerging as real challengers in the home loan, business loan and personal lending markets.

NAB’s UBank launches ‘green’ deposits to chase Millennials’ savings (Financial Review), Rated: A

The CEO of National Australia Bank subsidiary UBank, Lee Hatton, says future retail depositors will want more control over where banks lend their money, prompting it to launch a “green” term deposit targeting environmentally concerned Millennial customers.

How marketplace lending meets investor needs (Cuffelinks), Rated: A

However, it’s also true that today’s investors face a risk environment of unprecedented complexity. In 2018, the S&P/ASX200 declined by 6.8%. Residential property values are falling and bank deposit rates fail to match inflation. In the last year, the Australian media landscape was dominated by the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, with its revelations of duplicitous lending practices, improper fees, and general misconduct that, by the banks’ own admission, fell far short of community expectations.

Financial Markets Authority executive steps down over employment matter (NZ Herald), Rated: B

Financial Markets Authority (FMA) executive Garth Stanish left the investment watchdog at the end of last month over an internal employment matter, a spokesman for the authority said.

Stanish was also a director of markets oversight, a group that includes oversight of NZX, crowd-funding/P2P lending platforms and frontline supervisors.

India

P2P startup PaisaDukan raises 1st round of investment from JITO (UNI India), Rated: AAA

Vivriti Capital raises second round of funding of Rs 110 Cr from Creation Investments (YourStory), Rated: A

Vivriti Capital, a Chennai-based lending platform for corporate entities, secured Rs 110 crore worth of equityin an additional round of funding from its existing investor Creation Investments.

This comes just within two months of the Series A funding closure in December 2018, in which the company raised Rs 200 crore from Creation Investments. With the current equity infusion, Vivriti’s overall capital stands at approximately Rs 320 crore.

MSME Lending fuelled by Digitisation (Free Press Journal), Rated: A

MSMEs play a major role in Economic development of India. There are around 63.4 million units and they contribute to 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities and 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India. The sector grows at a rate faster than the large ones at more than 10% pa.

About 20% of the MSMEs are based out of rural areas.They provide employment to more than 130 million people and contribute to 45% of exports. MSMEs are also the largest employment generator every year. As of Sep18, the total credit in India was Rs 105.5 Lakh crores and MSMEs had borrowed Rs 24.7 cr. Large and Mid Caps borrowed Rs 44.4 cr. Year on Year the growth of overall commercial credit was at 13.5%.

Micro loans which are less than Rs1 cr grew 22.2% year on year and SME loans between Rs1 cr – Rs 2.5 cr grew at 18.3%.The growth was faster than the overall growth. Share of NBFCs in SME credit increased from 13% in Sep 15 to 17% in Sep 18. The number of NBFCs lending more than Rs 100 cr to MSMEs stood at 77 at the end of Sep 18.

Asia

Investment Task Force suspend operation of 168 illegal fintech firms (Antara News), Rated: AAA

The Investment Alert Task Force has suspended the operation of 168 entities allegedly running peer-to-peer lending services without a legal business license from the Financial Service Authority (OJK).
The task force has also suspended the operation of 47 illegal investment entities which has the potential to harm the public.
“Based on the monitoring on website and application in Google Playstore, the Investment Alert Task Force has stopped the operation of 168 entities that have violated OJK regulation no. 77/POJK.01/2016 on fintech peer-to-peer lending services, which has the potential to harm the public,” head of the task force Tongam L Tobing said in a statement here on Wednesday.

Fintech group to help develop P2P lending (The Jakarta Post), Rated: A

A group of financial technology (fintech) lenders wants to help develop a healthier lending industry and protect consumers by setting out a strict code of conduct for its members.The Indonesian Fintech Lenders Association (AFPI) will help stimulate the industry, which only gained government recognition three years ago, by providing risk management certification, public education campaigns and a compulsory code of conduct, which should be uploaded to the AFPI website soon.AFPI chairman Adrian Gunadi said the association had been established to ease the Indonesian Fintech Association’s (AFTECH) workload in dealing with fintech companies that provide lending services, including peer-to-peer (P2P) lending, crowdsourcing and digital credit cards.Such lenders account for 30 percent of all licensed fintech companies, whereas the remaining 70 percent are companies engaged in, among other thing…

Government moves to legalise P2P lending (Vietnam Vet), Rated: A

During a recent meeting with relevant ministries and agencies to discuss P2P lending, Hue instructed that during the pilot operation, P2P lending would be restricted to connecting lenders and borrowers as currently being run by most P2P lending companies in Viet Nam. P2P lending companies would not be allowed to mobilise capital, but act as intermediaries to connect lenders (investors) and borrowers.

The development of P2P lending will also create a new capital supply channel. Research conducted by Transparency Market Research showed that P2P lending would surge by 48.2 per cent annually in the 2016-24 period, while Morgan Stanley forecast the business model would reach a growth rate of 53.5 per cent globally by 2020.

Authors:

George Popescu
Allen Taylor

The post Thursday March 14 2019, Weekly News Digest appeared first on Lending Times.

Monday February 5 2018, Daily News Digest

Nav financing

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: […]

Nav financing

News Comments

United States

United Kingdom

China

European Union

International

India

APAC

MENA

Latin America

News Summary

United States

eBay ditches PayPal for Adyen (Fintech Futures), Rated: AAA

What the good fintech can giveth, it can taketh away. eBay has given PayPal the boot and turned to Dutch firm Adyen as its primary processing partner.

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

Bank of America Merrill Lynch’s (BofA Merrill) US-based commercial clients can now make payments in local currencies to payees who hold PayPal accounts.

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 trackerThe 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.

Source: FT Partners

Download and read the full report here.

Open banking’s early adopters bet on ‘tremendous gains in value’ (American Banker), Rated: AAA

Only a few banks have embraced open banking and offer APIs to almost anyone. But they are betting on having a head start on competitors, as trends in the industry, such as increased bank-fintech partnership and evolving regulation, will push the banking-as-a-platform movement toward reality.

Operating as BBVA Compass in the U.S. in Birmingham, Ala., in 2016 it named a head of open APIs, and has engaged in several data-sharing agreements with fintechs. It is one of a handful of U.S. banks engaged in open banking — Capital One, Silicon Valley Bank, Citi and CBW Bank in Weir, Kan., also have such programs.

Last May, BBVA opened up its API Marketplace and made commercially available eight APIs so companies, startups and developers would be able to build new products and services by accessing and integrating customer’s banking data — with their permission — into their applications.

Source: American Banker

Fiserv Has Largest U.S. Marketshare of Top Bank Core Processors (Bank Innovation), Rated: A

According to data gathered by FedFis.com, the top processor is Brookfield, Wis.-based Fiserv. With more than 37% of the market share, Fiserv is well ahead of its competitors. The second, Monett, Mo.-based Jack Henry & Associates, has just half Fiserv’s market share with 17.6%. Close behind JHA is Fidelity National Information Services Inc., better known as FIS.

Enova Reports Fourth Quarter and Full Year 2017 Results (PR Newswire), Rated: A

Enova International (NYSE: ENVA), a financial technology company offering consumer and small business loans and financing, today announced financial results for the quarter and year ended December 31, 2017.

Fourth Quarter 2017 Summary

  • Total revenue of $243.7 million in the fourth quarter of 2017 increased 20.4% from $202.4 million in the fourth quarter of 2016.
  • Gross profit margin was 47.7% in the fourth quarter of 2017 compared to 51.8% in the fourth quarter of 2016, driven by growth in the installment loan and receivables purchase agreement segment as well as a higher mix of new customers, which requires higher loan loss provisions.
  • Net income was $6.9 million, or $0.20 per diluted share, in the fourth quarter of 2017 compared to net income of $8.7 million, or $0.26 per diluted share, in the fourth quarter of 2016.
  • Fourth quarter 2017 adjusted EBITDA of $38.1 million, a non-GAAP measure, increased from $35.1 million in the fourth quarter of 2016.
  • Adjusted net income of $8.9 million, or $0.26 per diluted share, a non-GAAP measure, in the fourth quarter of 2017 increased from adjusted net income of $8.5 million, or $0.25 per diluted share, in the fourth quarter of 2016.

Full Year 2017 Summary

  • Total revenue of $843.7 million in 2017 increased 13.2% from $745.6 million in 2016.
  • Gross profit margin was 53.0% in 2017 compared to 56.0% in 2016.
  • Net income was $29.2 million, or $0.86 per diluted share, in 2017 compared to net income of $34.6 million, or $1.03per diluted share, in 2016.
  • Full year 2017 adjusted EBITDA of $157.8 million, a non-GAAP measure, increased from $142.3 million in 2016.
  • Adjusted net income of $46.9 million, or $1.37 per diluted share, a non-GAAP measure, in 2017 increased from adjusted net income of $37.5 million, or $1.12 per diluted share in 2016.

No Credit? No Problem! Microlender for Women Uses Novel Approach (WSJ), Rated: A

Daniela Morales’s lender is demanding. Every Friday morning, at 9:45 sharp, she has to visit a small apartment in Woodside, Queens, to make her weekly payment—currently $293 plus $17 interest on a $6,900 balance.

Ms. Morales’s lender is Grameen America, a nonprofit microlender for women entrepreneurs. To get a Grameen loan, you don’t need any collateral or credit history, just the support of a small group of Grameen loan recipients who can vouch for you. It is, essentially, a reputation-based loan.

There are other nonprofit microlenders operating in the city, including Accion and BOC Capital Corp. But Grameen America, modeled on a Bangladeshi microlender, is unique in its peer support and loan-approval model.

The loans, which start at $500 and command an interest rate of 18% on a declining balance, must be repaid in six months. The interest rate falls as the loan is repaid. Members who establish a good track record qualify for larger sums.

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.

United Kingdom

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 Treasury committee has launched an inquiry into SME finance to look at the state of the market and the lessons to be learned from RBS’s Global Restructuring Group (GRG).
The Treasury’s inquiry will look at the extent of competition in the market, the various sources of funding available to SMEs – including P2P lending and crowdfunding – and whether the current regulatory framework provides enough protection to SMEs when they borrow money.

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.

China

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.

European Union

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.

International

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.

India

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.

Source: money control

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”.

APAC

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.”

MENA

Top 20 Fintech Startups In The Middle East (Forbes), Rated: AAA

1 PayTabs
Online payment processing solutions

2 Souqalmal.com
Financial products comparison site

4 Beehive
SME focused peer2peer lending platform

5 Yallacompare
Financial products comparison site

8 liwwa
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.

Latin America

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.

Authors:

George Popescu
Allen Taylor

Monday January 29 2018, Daily News Digest

financial advice market

News Comments Today’s main news: SoFi buys Clara Lending product, engineering teams. LendingClub files 8K on $200 warehouse agreement. Raisin surpasses 5B Euro. Columbian lender LoanPie goes online. Today’s main analysis: UK P2P lending hits 3.1B GBP, borrowers shift to online lending. Today’s thought-provoking articles: PeerIQ evaluates letter from Consumer Financial Protection Bureau (CFPB) Director Mulvaney. Funding Circle in no […]

financial advice market

News Comments

United States

United Kingdom

China

European Union

International

India

South America

News Summary

United States

SoFi Buys Teams From Mortgage Startup Clara to Boost Offerings (Bloomberg), Rated: AAA

Social Finance Inc. has acquired the engineering and product teams of mortgage startup Clara Lending, bolstering the financial technology company’s offerings beyond student-loan refinancing, according to people familiar with the matter.

SoFi confirmed the acquisition on Friday and said taking on the Clara teams allows it to “immediately ramp up our technical capabilities.”

San Francisco-based SoFi has plans to hire about 100 engineers, one of the people familiar with the matter said, and Clara filled about 20 of those spots.

How Credible.com Makes Refinancing Student Loans Easy (Pop Dust), Rated: A

While refinancing my own loans, it was a stressful situation to navigate, even with the help of my parents. Coming out of school with a $200,000 degree but only a $40,000 annual salary was a tough pill to swallow, and I wasn’t alone – several of my friends found themselves in a similar situation.

Credible is working to change all of that by simplifying the refinancing process. Instead of hopping from lender to lender and form to form looking for a good rate, Credible provides a one-stop shop where you can connect with a variety of vetted lenders and get real rates in about two minutes, without affecting your credit score.

LendingClub Files 8K on $ 200 Million Warehouse Agreement (Crowdfund Insider), Rated: AAA

LendingClub (NYSE:LC), the largest marketplace lending platform in the US, has just posted an 8K regarding a warehouse funding agreement with certain lenders. LendingClub has enlisted the assistance of JPMorgan Chase Bank, N.A. as administrative agent, and Wilmington Trust, National Association as collateral trustee. The warehouse is to provide a $200 million secured revolving credit facility.

LendingClub’s 8K filing.

Strong GDP growth, Mulvaney’s New Director for CFPB, SoFi’s New CEO (PeerIQ), Rated: AAA

In this week’s newsletter, we interpret key points of Mulvaney’s letter and how they may affect the lending industry.

Source: PeerIQ

The US economy grew by 2.6% in the 4th quarter, continuing the pattern of strong trend growth in 2017. Global economies continue to enjoy an unusual period of synchronized growth, a constructive pattern last seen in the mid-2000s. US growth was primarily driven by consumer spending of 3.8%. US consumer spending is supported by US consumer credit outstanding which grew at an annualized rate of 8.8% – well ahead of GDP growth.

Bank earnings continued to roll in this week. Retail banks reported that credit card losses rose 20% year-over-year to $12.5 Bn.  Credit card losses as a percentage of outstanding receivables have increased to 4.5% from 2.9% in 2015 as credit normalization trends continue. The combination of high consumer credit growth relative to GDP, full employment levels, and low productivity growth is casting doubts on whether 3%+ GDP prints are sustainable.

Earnest Co-Founder Steps Down a Few Months After Selling Startup (Bloomberg), Rated: A

Louis Beryl, co-founder and chief executive officer of Earnest Inc., left the online lender this week after selling his company in October.

The San Francisco-based startup was acquired by student loan provider Navient Corp. for $155 million after a lengthy search for a buyer. Beryl and his co-founder, Ben Hutchinson, were supposed to remain at the firm and continue running Earnest as a separate unit within the company. Hutchinson remains there as chief operating officer, Navient said.

Don Davis of Prime Meridian (Lend Academy), Rated: A

In this podcast you will learn:

  • When marketplace lending first got on Don’s radar.
  • Why he decided to start Prime Meridian.
  • How his offerings have expanded from one product to four.
  • The total AUM they are at today.
  • Who their typical investor is today and how that has changed over the years.
  • How his conversations with investors have changed.
  • What investors misunderstand about the space today.
  • What platforms his company is investing on today.
  • How they conduct due diligence on new platforms.
  • Don’s views on why some of platforms have failed.
  • How the investor pullback of 2016 affected Prime Meridian.
  • The state of the marketplace lending industry today.
  • What areas Don likes most and what he likes least.
  • The only two things that matter for marketplace lending platforms.
  • How he has been able to grow his company so quickly.
  • What’s next for Prime Meridian.

A bank’s unfolding plan to enter online consumer lending (American Banker), Rated: A

Meta Financial Group in Sioux Falls, S.D., has struck a deal to provide personal loans to customers of Liberty Lending, an online lender based in New York.

The $5.2 billion-asset Meta said it expects to originate $500 million to $1 billion in personal loans during the three-year partnership. The program marks Meta’s first foray into the direct-to-consumer credit business.

Discover CEO bashes online lenders (American Banker), Rated: A

Discover Financial Services CEO David Nelms said this week that many of the online lenders that have emerged in recent years do not understand how to underwrite the loans properly over the long run. He also jabbed at the technology-focused firms for their failure to achieve profitability.

JP Morgan Chase invests $ 20bn for new branches and jobs (Fintech Futures), Rated: A

JP Morgan Chase has unleashed a five-year $20 billion investment plan that includes 400 new branches, 4,000 jobs and an increase in staff wages across the US.

It is also a stark contrast to yesterday’s report concerning branches in 2017. Last year, US banks accelerated their pace of branch closures, shutting down 2,069 locations (an 18% increase compared to 2016).

According to JP Morgan Chase, these new branches and bankers will help the firm increase small business lending nearly 20%, or $4 billion, over three years.

7 failed fintech ideas that might succeed today (PaymentsSource), Rated: A

Blippy’s card-sharing social network

Contactless payment cards

Opendoor Raises $ 135M in Funding (Finsmes), Rated: A

Opendoor, a San Francisco, CA-based online home-selling service, raised $135m in funding.

The round was led by Fifth Wall Ventures and Lennar with participation from Rialto Capital Management.

Technology will have a massive impact on your financial future: here’s why (The Next Web), Rated: A

For consumers, that’s mostly good news; it means you have access to more services in a digital format, and at a much less expensive rate. For the finance industry, this is coming with big changes; as banks digitize more, Citigroup estimates that the industry will lose 1.7 million jobs or more to automation and digital environments.

On a level that’s probably more familiar with mainstream consumers, we can look to the emergence of money savings appsstock exchange appsbudgeting apps, and other tools designed to make financial management easier for the average customer.

As many as 45 percent of financial intermediary services are victims of economic crime every year, which makes security and privacy top concerns for the finance industry.

 

Ladenburg Thalmann Launches Tech Innovation Platform (Financial Advisor), Rated: B

Brokerage and advisory firm Ladenburg Thalmann Financial Services has announced the launch of its Enterprise Innovation initiative and Innovation Lab. The company said innovation strategist Dan Sachar has been named as the vice president of enterprise innovation.

United Kingdom

P2P Lending Tops £3.1 Billion in 2017, Q4 Sees Borrowers Shift to Online Lending (Crowdfund Insider), Rated: AAA

The UK Peer to Peer Finance Association (P2PFA) has published aggregate fourth quarter data for of 2017 for its member platforms. The P2PFA shows that during 2017 £3,145,098,842 in peer to peer loans were facilitated. Cumulative lending transacted through P2PFA member platforms exceeded £8 billion.

Funding Circle heads for market (The Times), Rated: AAA

Sources close to the lender said it was in “no hurry” to do an initial public offering but, if markets remain favourable, the float could go ahead in the second half of this year.

Atom Bank chairman to step down (AltFi), Rated: A

Anthony Thomson, the founder of UK challenger bank Atom Bank, is planning to step down from his role as chairman after it completes its latest £150m fundraise.

Existing non-executive director, Bridget Rosewell, will be taking over the helm of the Durham-based lender, subject to regulatory approval.

Best buy-to-let areas in the UK for 2018 (Simply Business), Rated: AAA

LendInvest’s latest buy-to-let index is out, and it makes great reading for landlords looking for the best buy-to-let areas.

  • Manchester is currently the best place to buy-to-let in England and Wales. It ranked highest for rental yields (5.55 per cent) and rental price growth (5.76 per cent). Manchester took the top spot after a steady climb up LendInvest’s rankings throughout 2017.
  • Colchester in Essex and Luton in Bedfordshire are in second and third position, with rental yields of over 3.78 per cent. Colchester has the strongest capital gains of all postcode areas over the last 12 months, while Luton remains a popular commuter town within easy reach of London.
  • The Midlands is still the buy-to-let location to watch, though – Leicester rose an incredible 17 places to reach ninth place in December’s index, while Birmingham narrowly missed out on the top 10, coming in at 11th.

According to the research, here are the 10 best buy-to-let areas 2018:

  1. Manchester
  2. Colchester
  3. Luton
  4. Rochester
  5. Southend-on-sea
  6. Hull
  7. Romford
  8. Norwich
  9. Leicester
  10. Ipswich

Top 10 areas for capital gains in the UK

Area Capital gains
Colchester 11.96%
Southall 11.09%
Hemel Hempstead 10.27%
Slough 10.19%
Harrow 9.89%
Ipswich 9.44%
Luton 9.16%
Southend-on-sea 9.12%
Ilford 8.82%
Hull 8.46%
Source: LendInvest

FCA reports increase in advice firm numbers (Money Marketing), Rated: A

Figures drawn from regulatory returns show 5,270 financial advice firms had at least one staff member advising on retail investments, with a total of 25,951 advisers recorded as at the end of November 2017.

The number of advisers at banks and building societies continued to decrease, however, from 3,525 to 3,374. 34 banks had at least one adviser as at the end of November last year, compared to 38 the December before.

Expert Tips to Keep a Close Eye on your Cash Flow this Year (NewBusiness), Rated: B

Find the right finance for you

Here are some examples of the various types of external finance that may be available if you need a helping hand:

Bank loan – one of the most commonly chosen finance options. The loan will be fixed over an agreed period, with a fixed rate and monthly repayments.  Eligibility for this can be dependent on how long you have been trading for.

Peer-to-peer lending – this is a form of borrowing without using a traditional financial institution such as a bank or building society. The lending involves individuals or ‘peers’ where you are matched up to people willing to invest in, and lend money to, your business.

Merchant cash advance – an alternative financial solution if you have strong sales and good volume of card transactions every month. You receive a lump-sum payment to be repaid via an agreed percentage of your future credit and debit card transactions.

Business credit card – stay in control of your business expenses and keep your cash flow moving. A business credit card is a short-term flexible way to manage expenses.

London fintech start-up Duco raises £20m (The Times), Rated: B

Duco, which was founded eight years ago by a computer science postgraduate from University College London, allows financial institutions to manipulate enormous amounts of data through remote internet servers, popularly known as the cloud. It is understood the funding round values the company at about $100m.

China

Future FinTech Announces Digital Assets Transfer Agreement (PR Newswire), Rated: A

Future FinTech Group Inc. (NASDAQ: FTFT) (“Future FinTech”“FTFT” or “the Company”), a financial technology company and integrated producer of fruit-related products, today announced that on January 23, 2018, one of its wholly owned subsidiaries, DigiPay FinTech Limited (“DigiPay”), entered into an agreement to acquire 60% of the digital assets associated with DCON, a blockchain development project that has developed 100 communities utilizing blockchain technology and which intends to conduct a variety of financial businesses to provide users with a diversified blockchain experience.

European Union

Deposit marketplace Raisin surpasses €5bn after record year (AltFi), Rated: AAA

Since its founding four years ago, Raisin has returned its first cash flow positive month after passing €5bn in brokered savings deposits.

The European marketplace for savings and investment products increased its total customer deposits by over €3bn in 2017, after its international expansion efforts bolstered growth. The company now serves over 30 European markets, with around 20 per cent of all new customer acquisitions coming from abroad.

Europe’s Alternative Finance Sector Accelerates (Forbes), Rated: AAA

Europe’s online alternative finance market continues to grow, but remains dominated by the UK, new research shows. The Cambridge Centre for Alternative Finance says the market was worth €7.7bn by the end of 2016, the most recent period for which data is available, with €5.6bn of that total accounted for by the UK.

The data means the alternative finance market across Europe grew by 41 per cent during 2016, providing a range of valuable funding for entrepreneurs and small and medium-sized enterprises that was not available from traditional funding sources. Stripping out the UK, however, the market was up by 101 per cent, with the less mature alternative finance industries of continental Europe now growing very rapidly.
The UK’s share of the European alternative finance market fell to 73 per cent in 2016 from 81 per cent a year earlier as other markets grew faster. France, Germany and the Netherlands are now the three largest alternative finance markets outside the UK, followed by Finland, Spain, Italy and Georgia.
Consumer lending remains the single biggest sub-sector of the alternative finance industry, with peer-to-peer lending sites accounting for 34 per cent of the marketplace. However, SME funding is significant, with peer-to-peer business lending, invoice trading and equity-based crowdfunding together accounting for 40 per cent of the market.
International

FintruX – Disrupting P2P Lending and Unsecured Loans on the Blockchain (ChipIn), Rated: A

Peer-to-peer lending platforms are also still on a global uptick. In just one country where this new kind of access to capital is having a major impact, the UK, over $3.3 billion in P2P loans were facilitated in 2017. That number is expected to continue to rise globally this year, and blockchain is likely to be right in the middle of it.

The FinTruX Network is one of the world’s first blockchain-based online marketplaces for unsecured lending that connects the dots in an environment augmented by specialized servicing agents who can configure and construct each borrower’s (smart) contract in real time.

Cascading levels of credit enhancement help borrowers improve creditworthiness. Lenders are provided with several forms of reassurances that their money will be repaid. Loans are over-collateralized. Local third-party guarantors and cross-collateralization act as an additional kind of insurance.

And here is the best part: All of this is enabled by a system token which creates not only a fee structure but a tracking device, authenticator, and payment system, all in one place.

Robo Advice: Are ETFs the Solution? (CFA Institute), Rated: A

RiskSave and True Link are examples of such emerging technology. The portfolios generated from a broader spectrum of assets improve on the current robo model, offering more efficiency and superior risk-return characteristics.

Robo advice and digital asset management will open up financial advice to a much wider market. People who previously were priced out of financial advice will now be able to afford it. The reduced costs of robo advice in the United Kingdom could give as many as 16 million more people access to financial advice, according to estimates from the Financial Conduct Authority (FCA).

Are ETFs the correct solution?

Much of the financial management industry has concluded that ETFs are the future of automated advice. That is naive.

Tradeshift explores new Frontiers with innovation lab launch (Fintech Futures), Rated: B

Business commerce platform Tradeshift has unveiled Tradeshift Frontiers, an innovation lab and incubator designed to apply emerging technologies like artificial intelligence (AI), distributed ledgers, and internet of things (IoT) to business networks, supply chains, and global trade, reports David Penn at Finovate (FinTech Futures’ sister company).

India

FinTech platforms providing robust loan disbursal to MSMEs (Outlook), Rated: A

CreditMantri helps small business connect with NBFCs and banks on its platforms and avail financial assistance. The easy and hassle-free digital procedure makes it easy for a business to avail a loan in lesser time.

Aye Finance, along with its commercial operations, also funds its non-profit initiative to coach MSMEs on market knowledge, business book-keeping and advising on operations techniques. These, in turn, help sustain employment at the bottom of the pyramid. Aye Finance has already impacted an ecosystem of over 40,000 MSMEs through its business enterprise loans.

CoinTribe is confident about the adoption of digital in the SME segment especially as younger generations enter the domain. With increasing digital adoption in the country and expansion of the MSME sector, CoinTribe aims to facilitate USD 5 billion of loans through its platform over a period of 5 years and is rapidly scaling up its marketplace operations.

Faircent’s P2P model serving business loan requirements is an example of how far lending industry has come to serve MSMEs. The platform has over two lakh registered borrowers and 18,000 registered lenders.

South America

Columbia business launches $ 1.8M investment website (Columbia Daily Tribune), Rated: AAA

LoanPie, an online local marketplace based out of Columbia for residential and commercial real estate investing, last week launched its website with over $1.8 million in investments available.

The company seeks to introduce more accredited investors to the secondary mortgage market using a web-based platform. LoanPie’s goal is to create return on investment for 25,000 subscribers by the end of this year.

Authors:

George Popescu
Allen Taylor

Friday January 19 2018, Daily News Digest

data breaches

News Comments Today’s main news: SoFi Professional Loan Program hits $720M on first offering. Roofstock reaches $1B in transactions. When Zopa will open to new investors. PPDai to invest in research. Linked Finance sees profitability. Revolut launches geolocation-powered travel insurance. Harmoney partners with DataRobot. Today’s main analysis: The most and least competitive homebuyer markets. Fundrise or Vanguard: Which is the better investment? […]

data breaches

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

News Summary

United States

SoFi’s Professional Loan Program at $ 720 Million for First Offering (LendEDU), Rated: AAA

Social Finance’s Professional Loan Program 2018-A has reached $720.1 million, which is just a bit lower than the final deal it had in 2017.

In this latest program, three portions of senior Class A notes worth $677.3 million will be issued. Of that figure, one $55 million Class A-1 portion is mostly secured by floating-rate loans, and it has a variable-rate interest rate, which will be calculated based on one-month Intercontinental Exchange London Interbank Offered Rate (LIBOR).

Fixed-rate student loans will mostly back the $358.5 million in Class A-2A notes, as well as the $236.8 million in Class A-2 notes.

Why open banking and cybersecurity need each other (Tearsheet), Rated: AAA

The industry’s desire for greater security and protection of customer data seems at odds with its desire for more open banking; by definition, open banking requires banks to share data with third party service providers.

In the U.S. banks are striving to get ahead of their own regulators by creating data exchange standards. API-based data sharing agreements like the deals Fincity signed with Wells Fargo and Chase last year are evidence of those efforts. But banks need to move beyond those one-on-one agreements if they’re going to create a full suite of financial services to offer customers through a true open banking platform.

Source: Tearsheet

PeerIQ CEO Ram Ahluwalia: 2017 Saw a Resurgence of Growth in Online Lending (Crowdfund Insider), Rated: AAA

Ahluwalia told me;

“2017 has seen a resurgence in investor growth and confidence in online lending. ABS issuance is up about 83%.  Execution spreads have tightened substantially. This performance is all on the ABS loan side but has not translated yet into the equity valuations. “

He added that he expects to see continued attention on credit performance in 2018 as they are still seeing normalization of credit performance.

He expects 30% growth in ABS issuance for next year while adding that PeerIQ underestimated the growth for 2017.

LendingTree Ranks Most Competitive Homebuyer Markets (PR Newswire), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, has released the findings of its study on where homebuyers will face the fiercest competition to achieve their dream of homeownership in 2018.

LendingTree looked at 1.5 million purchase mortgage loan requests that came through the LendingTree marketplace in the 100 largest cities in 2017. The study ranks cities using three criteria:

  • The share of buyers shopping for a mortgage before identifying the house they want. Buyers with financing in place are more appealing to sellers and can compete with cash buyers.
  • Average down payment percentage. Having a higher amount of money saved for a down payment can enable you to borrow more money or be offered a lower interest rate, allowing you to make a stronger offer.
  • Percentage of buyers who have prime credit (above 680). Borrowers with higher scores have more financing options to make more competitive offers. The cities/markets below are ranked for 2018 using the criteria noted above, including the relative data used to determine the ranking along with the market’s overall rank from the prior year.

California markets dominate the top 10.

Six of the top 10 most competitive housing markets are in CaliforniaSan Francisco and San Jose lead the rankings in 2018, with a vast number of credit-worthy and well-heeled borrowers making it one of the most challenging markets for prospective home shoppers.

Real Estate Marketplace Roofstock Hits $ 1 Billion in Transactions (Crowdfund Insider), Rated: AAA

On Thursday, real estate marketplace Roofstock announced it has surpassed $1 billion in property transactions since the launching of its marketplace in 2016.

Roofstock Announces $ 7 Million In Additional Funding (Benzinga), Rated: A

Roofstock announced Thursday that the venture capital arm of Silicon Valley Bank had joined its latest funding round, bringing the property investing startup’s funding total to $42 million.

Gary Beasley, CEO: Roofstock is the first online marketplace created exclusively for buyers and sellers of cash-flowing, single-family rental homes that already have tenants.

Who are your investors, if any?

Roofstock has raised $68,250,000 to date, with a recent $35M Series C investment led by Canvas Ventures in October 2017. Other investors since Roofstock’s launch include Lightspeed Ventures, Bain Capital Ventures, Khosla Ventures, Hone Capital, QED Investors, Nyca Partners, and several angel investors.

Vanguard vs. Fundrise: Which is the Better Investment Option? (Fundrise), Rated: AAA

We often get the question, “What makes a Fundrise eREIT worth investing in over the Vanguard REIT ETF?” It’s a fair question that we expected when we created the eREIT. The short answer is that Fundrise eREIT investments are lower in cost for investors than those of the Vanguard REIT ETF and also come with the potential for better returns — how our costs are lower than Vanguard requires a longer answer.

Source: Fundrise

Some of the largest REITs in which the Vanguard REIT ETF owns shares are Simon Property Group(shopping malls, worth approximately $50 billion), Equinix (office buildings, worth approximately $34 billion), and AvalonBay Communities (apartment buildings, worth $25 billion).

Vanguard charges no brokerage commissions and carries only a low investment advisory fee of 0.30%, which it reports to be lower than the industry standard of 1.02%. In addition to the advisory fee, Vanguard charges its REIT ETF investors an asset management fee of 0.11% as well as reimbursement of “expenses.”

The Fundrise Approach

Where public market investments rely on several financial organizations to perform various services from acquisition and development to offering diversified portfolios of REITs, Fundrise uses technology to consolidate these functions and reduce the number of intermediaries in the value chain.

Source: Fundrise

The real estate investment trust designation of the eREIT does not equate the services or value creation offered by the eREIT with that of a public REIT — it simply allows Fundrise to pass at least 90% of the eREIT’s earned income to investors without paying taxes at the corporate level.

Fundrise investors can invest directly into an eREIT and only pay an 0.85% asset management fee at the eREIT level. Investors who want to diversify across multiple Fundrise investments, including eFunds, can do so through one of the investment portfolios. For example, rather than choosing one eREIT or more, investors can invest in the Starter Portfolio with a minimum investment of $500. For this service, investors are charged an investment advisory fee.

Chase joins AutoFi platform (Asset Finance International), Rated: A

Chase, the US consumer and commercial banking business of JPMorgan Chase & Co, has become the first US national bank to partner with fintech company AutoFi to help customers select and finance vehicles through dealers’ websites.

The move comes after the bank’s research showed that nearly half of consumers would purchase and finance vehicles online if they had the opportunity.

ForUsAll Reaches $ 500m in Assets and Raises $ 21m in Venture Capital (Business Insider), Rated: A

ForUsAll, the technology-driven 401(k) advisor to small and mid-sized businesses, today announced it has reached $500m in retirement assets under management and secured $21 million in second round financing led by Ribbit Capital, a leading global investor in financial technology. Existing investor Foundation Capital joined the round, bringing the company’s total funding to $34 million. ForUsAll will use the funds to grow the company’s customer base, accelerate technology development and hire additional staff.

CFPB Signals Shift by Dropping Payday Lender Lawsuit (Bloomberg), Rated: A

The Consumer Financial Protection Bureau is dropping a lawsuit against a group of payday lenders associated with an American Indian tribe in a sign the regulator is changing direction under Mick Mulvaney, the acting director appointed by the Trump administration.

The agency had accused the lenders of deceiving consumers and failing to disclose the true cost of the loans, which carried interest rates as high as 950 percent a year. The agency asked for the case in federal court in Kansas to be dismissed in a court filing on Thursday, giving no details about its reasoning.

The CFPB lawsuit had targeted four companies owned by the Habematolel Pomo of Upper Lake tribe.

Foreign and Domestic Condo Buyers Tap $ 300 Million Fund To Close On New Condo Purchases (PRWeb), Rated: A

Three leading South Florida real estate-related companies with robust real estate experience, deep capital markets relationships, and a proven track record of originating and servicing end-user loans have joined forces to provide senior mortgage loans to non-traditional real estate buyers. The joint venture, named Pebb Yale Truss Lending, (“PYT Lending”) is comprised of Pebb Capital, GPC Truss, and Yale Mortgage. Already the enterprise has commenced loan closings for approximately 20% of the units at Echo Brickell, a luxury condominium development by Property Markets Group (“PMG”) in Miami, FL.

The First Blockchain ETFs Launched on Nasdaq, NYSE Today (coindesk), Rated: A

Reality Shares Advisors and Amplify Trust ETF launched the first blockchain-based exchange-traded funds (ETFs) on Nasdaq and the New York Stock Exchange Arca today.

Both funds went live on their respective exchanges at 9:30 a.m. EST. Reality Shares’ Nasdaq NextGen Economy ETF (BLCN) opened at $24.20, while Amplify’s Transformational Data Sharing ETF (BLOK) started closer to $20.

What are some of the crowdfunding basics you need to know about? (Born2Invest), Rated: A

Crowdfunding is the opposite approach to business finance.

Crowdfunding is defined as a way of raising capital with the collective effort of friends, family, customers, and individual investors.

While crowdfunding is the umbrella term for this new way of investing and doing business, there are several types of crowdfunding.

  • Reward-based crowdfunding
  • Peer-to-peer lending – People who are risking to lend out money to strangers can create loan portfolios.
  • Donation-based crowdfunding
  • Equity crowdfunding – Equity crowdfunding has the most room for change in terms of how people invest their money.
  • Real estate crowdfunding
  • Human capital – If investors want to put in money on top athletes, there are crowdfunding available for this purpose. For instance, Fantex said it would offer an IPO on investments that track the brand value of top sports stars. Another crowdfunding site named Upstart provides money for college without piling on debt.

AI, blockchain, enhanced encryption: The fintech trends Chicago’s top techies are watching (Built in Chicago), Rated: A

Here’s what Chicago’s fintech leaders are watching in 2018.

Morningstar

Which emerging technologies will have the biggest impact on the industry in 2018?

Security technologies around encryption and voice will start to take shape. Investor and consumer trust in the markets, credit and technology suggest people aren’t satisfied with the norm. There aren’t enough heuristics used to encrypt data at rest and in transit, and the emergence of unique voice pattern activation — led by Amazon and Google — will start to drive changes in the industry.

Enova

Which emerging technologies will have the biggest impact on the industry in 2018?

AI and machine learning continue to grab headlines, and for good reason: they have the potential to improve every aspect of business.

PEAK6 Investments

Which emerging technologies will have the biggest impact on the industry in 2018?

Luke Peeler, software engineer: Blockchain technology.

The Future of Financial Services for the Underbanked: Tradition, Innovation, Regulation (LendIt), Rated: B

Traditional services used by the underbanked include check cashing, cash advance loans, and money transfers. Many view these services as overly expensive and behind the times, and an emerging ecosystem is leveraging fintech innovation to provide improved offerings. However, there’s a strong case made by industry researchers that the traditional, non-bank financial providers remain attractive to their customers, especially compared to the costs of a using a bank account.

  • Joe Coleman, CEO of RiteCheck
  • Rishi Kumar, Founder of Kashable
  • Cathy Mahon, President & CEO of the National Federation of Community Development Credit Unions
  • Lisa Servon, Professor of City Planning at the University of Pennsylvania

Guidewire Partners With Plug and Play to Foster Innovation in P&C Insurance (Business Insider), Rated: B

Guidewire Software, Inc. (NYSE: GWRE), a provider of software products to Property and Casualty (P&C) insurers, today announced it has joined Plug and Play’s ecosystem to advance P&C insurance innovation and collaboration. Plug and Play is a global startup ecosystem and venture fund specializing in the development of early-to-growth stage technology startups in 12 verticals. Guidewire joins as a Corporate Partner focused on the Insurance vertical.

VPC recruits Kushman as principal and capital markets head (PE Hub Network), Rated: B

Victory Park Capital (VPC), an investment firm focused on middle-market debt and equity investments, announced today that Todd Kushman joins as a principal and head of capital markets. Kushman is based in New York.

Kushman will lead the firm’s capital markets initiatives, which includes optimizing and identifying new alternative investment product offerings.

BB&T creates $ 50m fintech investment fund (Retail Banker), Rated: B

BB&T, a US-based bank holding company, has decided to set aside $50m to invest in or buy emerging digital technology firms as part of its strategy to boost its competitive profile and trim operational expenses.

United Kingdom

ZOPA LENDING QUEUE: WHEN WILL ZOPA RE-OPEN TO NEW INVESTORS? (Orca), Rated: AAA

There was extensive media coverage in October of last year surrounding Zopa, the largest consumer-focused peer to peer lender in the UK, and when it will re-open its doors to new investors who have been waiting in the Zopa lending queue – some since early 2017. It’s the turn of 2018, and some members in the queue may be seeing signs of promise.

There are 26,000 people in the Zopa “wait list” (as of 9th January). With approximately 60,000 active customers, this influx will represent a 43% increase in lenders at the platform; impressive, given the time it’s taken the platform which was founded in 2005 to acquire its existing customer-base.

U.K. Fintech Nuvo Launches Facebook Chatbot For Financial Advice on Mortgages (Bank Innovation), Rated: A

AI-powered fintech Nuvo today launched a Facebook chatbot that helps people find the best mortgage deal.

Network ROI completes employee buy-out thanks to ThinCats £1m funding (Insider.co.uk), Rated: A

A Midlothian-based IT firm has completed an employee buy-out after receiving £1m in funding from alternative finance specialist ThinCats.

Founded in 2003 by Sean Elliot, Network ROI employs 32 people providing managed IT and connectivity services to organisations throughout the UK.

Fintech to help first-time buyers with Rent Recognition Challenge for startups (City A.M.), Rated: A

A new competition has been launched to get innovative startups using technology to help renters use this payments history as a record of credit worthiness. The idea is that a tool or service can be used by lenders and credit reference agencies as part of an assessment for a mortgage.

First announced in the Autumn Budget, the Rent Recognition Challenge is now open for entries, with a potential prize of £2m for fintechs working on this idea.

Six proposals will get £100,000 each to get started on a prototype between March and October, after which that will be narrowed down to three by a panel of judges with more cash up for grabs.

 

IFA launches investment service for dormant clients (FT Adviser), Rated: A

IFA firm Symphony is offering a white-label version of provider FinchTech’s non-advised robo-service to allow its clients to invest through its website without having to pay for advice.

For a platform fee of 0.25 per cent, investors are given access to four mainstream investment portfolios and four socially responsible investment portfolios via FinchTech, with equity/non-equity weightings ranging from a ‘cautious’ 35/65 split to the ‘adventurous’ 85/15.

BUSINESS SHOWCASE : IGNITION WEALTH IRELAND (Irish Tech News), Rated: B

Ignition Wealth Ireland is the European subsidiary of Australia’s leading digital financial advice provider Ignition Wealth. We assist large financial institutions integrating new technology into their current processes and systems  and we help them to reimagine how their customers navigate the financial advice experience.

China

PPDai to invest in research institute (Shanghai Daily), Rated: AAA

PPDai, China’s first online P2P (peer-to-peer) lending platform listed in the US market, said yesterday that it will invest 1 billion yuan (US$156 million) within three years to set up a new research institute.

The money invested in the new PPDai Smart Finance Institute will be used to fund artificial intelligence, blockchain, finance cloud and Big Data sectors, said Zhang Jun, co-founder and chief executive of Shanghai-based PPDai.

European Union

Linked Finance eyes profitability as revenue and lending levels jump (The Irish Times), Rated: AAA

Linked Finance, the peer-to-peer (P2P) lending platform which has signed over 1,200 loans for Irish businesses, has said it is on track to be profitable this year.

The company, which is seeking to become the biggest non-bank lender to SMEs in Ireland, recorded a €1.1 million net loss in the 12 months to the end of April 2017, compared to a €1.2 million loss in the previous year.

Shareholders’ deficit amounted to €2.7 million at the end of the reporting period, as against €1.7 million a year earlier as accumulated losses increased from €2.2 million to €3.3 million.

FinTech, Robo Advisers, and the Soul of Swiss Banking (Mises Institute), Rated: AAA

As one Swiss economics journal put it, the most contentious conflicts (and partnerships) will be between “startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations and total disruption of established technology & processes”. That is to say:

  • Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks will always retain the cachet of security and stability. Online-only banks, however, are asserting themselves more aggressively in claiming to offer the same services with higher rates and lower fees.
  • Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful
  • Traditional Asset Managers vs. Robo-Advisors: Companies like Betterment feature robo-advisors offer lower fees and lower minimums; meanwhile, the larger traditional asset managers are creating their own robo-products while providing the kind of personalized attention for which high net worth clients are willing to pay quite generously.
  • Traditional Wealth Management vs. Automated Advice: a plethora of new software platforms and apps feature digital options, including mobile telephone payment services, automated wealth management advice, price comparison apps, tailored social media groups and crowdfunding systems. On the other side, the exclusivity of one-on-one attention is forever and very possibly will take on even more cachet as the somewhat sterile egalitarianism of digital banking erodes the cultural hierarchy of status.
  • Traditional Clearing Systems vs. Blockchain. This latter can store and distribute crypto-currencies (such as Bitcoin) and digital contracts (such as land deeds) without the need for banks or formal clearing systems. Proponents of Blockchain maintain that it promises “to reduce fees, improve security and bypass the volatility of central bank controlled fiat currencies”. Major technology firms such as Google, Amazon and Alibaba are also joining this trend.

CoinLoan ICO Reaches Major Milestones as it Launches MVP and Enables Direct Fiat Investment (Coin Telegraph), Rated: A

Peer to peer fintech startup, CoinLoan, recently rolled out the first version of their peer-to-peer lending platform. Investors were thrilled with the results (try it for yourself here, and are eagerly awaiting the end of the ICO and listing on exchanges soon after.

CoinLoan has also recently enabled direct fiat investment in their ICO. This unique option enables investments of $5,000 or more in USD or EUR in exchange for CLT tokens.

CoinLoan has created a system of secured peer-to-peer lending, where borrowers deposit various crypto assets for a loan in their preferred fiat currency.

International

Revolut launches geolocation-powered travel insurance (TechCrunch), Rated: AAA

Fintech startup Revolut is launching international medical and dental insurance. You can subscribe using the company’s app for £1 per day or more depending on the options.

By default, insurance coverage costs £1 per day for medical and dental insurance. You can add an option for winter sports and you can also cover your friends and family.

Australia/New Zealand

AI helps Harmoney improve ability to assess credit risk (CIO), Rated: AAA

Harmoney is working with DataRobot to improve the performance of its credit risk assessment process.

“With our deployment of DataRobot, we’re now using artificial intelligence to reduce risk for our lenders,” says Brad Hagstrom, joint-CEO of Harmoney.

Nine launches financial advice website 9Saver.com.au (Mumbrella), Rated: A

9Saver.com.au will aggregate the cost of living and shopping segments run across Nine News, Today, Today Extra, A Current Affair and 60 Minutes every week.

India

Startup eco-system looks forward to the budget for addressing tax dilemma (ET Rise), Rated: A

The Indian startup eco-system is looking forward to the union budget eagerly for addressing the tax dilemma. With high-quality entrepreneurs, good ideas and the very important funding ecosystem, startups have become an integral part of the India’s economic growth and job creation.

Asia

Banks, regulators lack skills to cope with pace of fintech innovation (Nikkei Asian Review), Rated: AAA

Both regulators and industry officials lack the right analytical and data skills to cope with the wave of disruption washing over the financial industry, according to the technology officers at leading financial companies at Thursday’s Nikkei Asia300 Summit in Singapore.

Jonathan Larsen, chief innovation officer of Ping An Insurance (Group) Company of China, said there are “definitely no” people with up-to-date skills among the regulators, which is slowing down the pace of change for traditional institutions.

Authors:

George Popescu
Allen Taylor

Thursday January 11 2018, Daily News Digest

consumer loan mpl abs

News Comments Today’s main news: Vanguard’s robo-advisor passes $100B AUM. YieldStreet raises $113M. RateSetter, Funding Circle join FSB funding platform. Funding Circle looks at Autumn for flotation. ETHLend launches secondary blockchain partnership. Modalku hits $7.4M in total crowdfunding. Today’s main analysis: KBRA 2017 consumer loan marketplace lending year in review and 2018 outlook. Today’s thought-provoking articles: LendingTree survey: Survey takers […]

consumer loan mpl abs

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

APAC

Canada

 

News Summary

United States

Vanguard’s Digital Advice Platform Is First to Pass $ 100B in AUM (Investopedia), Rated: AAA

Vanguard reached another milestone that should keep competing robo-advisors on their toes: it is the first firm to have a digital advice platform to surpass the $100 billion mark in terms of assets under management. And that comes with Vanguard having launched the service in 2015, just three years ago.

According to Stokes, 90% of the platform’s $101 billion in assets under management as of the end of 2017 are from existing clients. Vanguard’s assets under management beat those of Charles Schwab, which has $25 billion in assets under management for its Intelligent Portfolios, Institutional Intelligent Portfolios and Intelligent Advisory services, as well as Betterment’s $10 billion in assets, noted FinancialPlanning.

KBRA Releases 2017 Consumer Loan Marketplace Lending Year in Review and 2018 Outlook (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) released its 2017 Consumer Loan Marketplace Lending Year in Review and 2018 Outlook. The accompanying research report highlights the fact that 2017 was a notable year in the consumer loan marketplace lending (MPL) space in many respects. Total ABS issuance topped $7.8 billion in 2017, up from $4.6 billion in 2016, a year-over-year increase of 71%. SoFi led the way in 2017 in terms of number of ABS deals and total securitization volume, having completed six securitizations for $3.2 billion in total notes. Prosper completed three securitizations totaling $1.5 billion under their PMIT program followed by four deals from LendingClub’s prime and near prime shelves totaling $1.2 billion and three from Marlette’s MFT shelf totaling $919 million. Avant completed two securitizations totaling $480 million while Upstart issued its inaugural securitization in June 2017 followed by a subsequent deal in November. Investor demand strengthened with orders exceeded total deal size and a larger number of investors participated in the deals.

KBRA’s 2017 year in review and 2018 outlook provides:

  • KBRA’s outlook for 2018
  • Information behind the growth in the consumer MPL market
  • Detailed loan origination and ABS issuance volume by platform
  • Securitization performance and rating trends
  • Comparison of collateral characteristics, lending license arrangements platform servicing strategies and funding sources
  • Synopsis of legal and regulatory developments affecting the sector
  • Summary of significant equity raised by fintech companies

Read the full report here.

LendingTree Survey Reveals Optimistic Outlook for Personal Finances in 2018 (PR Newswire), Rated: AAA

LendingTree recently conducted an online survey among 1,025 Americans to gauge financial expectations, concerns and overall sentiment regarding personal finances for 2018. According to the results, two out of three Americans have an optimistic outlook for the year ahead, with millennials being even more optimistic.

According to the survey, almost half of Americans (45%) feel that 2017 was at least somewhat better than 2016 in terms of personal finances. Approximately one third (34%) earned more in 2017 than they did in 2016, 24 percent put more into savings in 2017 compared to 2016, and 21 percent improved their score over the past 12 months. However, only 16 percent reduced their total credit card debt, making debt reduction a priority in the year ahead.

Additional positive expectations for 2018 include:

  • 46% expect income to increase
  • 28% expect to pay off credit card debt
  • 35% plan to make and/or stick to a budget in 2018
  • 35% also expect to improve their credit score
  • 18% expect to save for a down payment on a house
  • 27% plan to build an emergency fund
  • 26% expect to save for a savings/purchase goal

To view the rest of the survey results, visit 

Spike in delinquency rate mars outlook for personal loans (American Banker), Rated: A

U.S. consumers are falling further behind on loans commonly used to consolidate debt, the latest sign that monthly payment burdens have become unsustainable for more households.

In the third quarter of 2017, 1.9% of all bank-issued personal loans were at least 30 days delinquent, according to data released Tuesday by the American Bankers Association. That was a notable jump from the second quarter, when the delinquency rate was 1.52%.

YieldStreet Raises $ 113 Million Financing Round to Disrupt Alternative Investing (BusinessWire), Rated: AAA

YieldStreet, the alternative investment platform working to change the way wealth is created, today announced that it has closed a $113 million financing round. The round includes $12.8 million of Series A equity financing co-led by Greycroft and Raine Ventures, as well as a revolving credit facility of $100 million from a New York based family office (the “Family Office”). Additional equity investors include Saturn Ventures, Expansion Venture Capital, the Family Office and FJ Labs.

The equity capital will help enable YieldStreet to accelerate the transformation of wealth creation by investing in further product innovation and growing its loyal community of investors. The raise comes as YieldStreet reached a tipping point in 2017, almost tripling prior year originations and surpassing $250 million raised by retail investors at the end of the year.

Alan Patricof, co-founder of Greycroft and one of the pioneers of modern private equity as the founder of Apax Partners, will join the YieldStreet advisory board. Ian Sigalow of Greycroft, Gordon Rubenstein of Raine Ventures and a representative from the Family Office will join YieldStreet’s board.

It’s Time to Talk About Alternative Assets (ThinkAdvisor), Rated: A

While many high-net-worth investors get advice from friends, family and sources on the internet, the majority — 72% — rely on financial professionals such as their advisors for investment information, according to research by Millennium Trust. In fact, financial professionals are over three times more relied on and trusted than the next trusted investment source: 51% of HNW investors trust financial professionals more than competing sources, including family, which is the most trusted source for only 13% of investors.

When advisors discuss potential investments with clients, they often focus on traditional options like stocks, bonds and mutual funds. As our research shows, however, many HNW investors are interested in alternative investments, such as hedge funds, private equity, real estate, commodities, marketplace lending and crowdfunding.

For example, 63% are moderately or extremely interested in investing in real estate and 46% report the same level of interest in private equity. But when it comes to discussing those investments with their broker or advisor, the numbers are significantly lower: Just 25% have discussed residential rental properties, 20% commercial rental properties, 23% real estate investment trusts, and 27% real estate limited partnerships, whereas 38% have discussed private equity.

Ryan Feit, CEO of SeedInvest, Updates on 2017 Progress & Crowdcube Partnership (Crowdfund Insider), Rated: A

SeedInvest is one of the most selective investment crowdfunding platforms in the US.

Today, SeedInvest is a full stack platform allowing companies the ability to sell securities under each of these exemptions.

How were your numbers for 2017? Can you share some top line detail?

Ryan Feit: We had another record year at SeedInvest.  We invested around $50 million into startups during 2017 (more than in our prior four years combined).  By our calculations we did at least twice as much investment volume as the next largest US-based equity crowdfunding platform that is open to all investors.

During 2017, what were some of the highlights for SeedInvest?

Ryan Feit: Here are a few additional highlights for 2017:

  • HelloMD completed the largest Regulation CF Side-by-Side round fundraise in history, raising $3 million.
  • Knightscope completed the largest pure Equity Crowdfunding round in history, raising $20 million.
  • We launched Auto Invest to help investors easily diversify in up to 25 startups and so far, 470 investors have made 3,300 auto investments into startups.
  • We launched LIVE Fundraising at events around the world and through our partnerships with LAUNCH Festival/Scale and
  • TechCrunch Disrupt, $10 million was raised from 5,800 people on SeedInvest.
  • SeedInvest had 14,000 startups apply to raise capital (vs. 1,500 in 2015).
  • SeedInvest had 2.5 million site visitors (vs. 400k in 2015).
  • SeedInvest processed 20,000 investments (vs. just 275 in 2015!).

Petal Card Raises $ 13M Led by Thiel’s VC Firm (Bank Innovation), Rated: A

Petal, the card designed to serve the credit invisible, has raised $13 million in funding that it will use to double its employees as the young startup tries to meet the demand of its growing user-base.

The Series A funding round was led by Peter Thiel’s VC firm, Valar Ventures.

U.S. News & World Report Names LendingPoint One of 2017’s Best Personal Loan Companies (BusinessWire), Rated: A

LendingPoint, the company working to revolutionize access to consumer credit, was named one of nation’s six best personal loan companies by U.S. News & World Report.

The media company evaluated personal loan companies in five key areas, reviewing data on eligibility, loan terms, fees, repayment methods and additional features. LendingPoint was cited as 2017’s top lender for people with fair to good credit, who have merit-based qualifications beyond FICO scores that make them worthy loan candidates.

Alkami raises $ 70 million for mobile banking software (TechCrunch), Rated: A

Plano-based Alkami has developed a white label service that credit unions and banks use across digital platforms.

And Alkami’s 4.5 million users have generated enough revenue for the company to justify a $70 million Series D round, led by General Atlantic, with participation from MissionOG. Existing investors include S3 Ventures and Argonaut Private Equity.

Chase Partners with AutoFi to Deliver Digital Car-Buying for Dealerships across the Country (BusinessWire), Rated: A

Chase announced today a partnership with AutoFi, a financial technology company that helps customers select and finance vehicles through their automotive dealers’ website and reduce the time it takes to complete the sale. Chase is the first national bank on the AutoFi platform.

The AutoFi digital retailing platform connects dealers with buyers and lenders. Chase will deliver financing terms online through the AutoFi platform, often within seconds.

Nearly half of consumers want to purchase and finance vehicles online, Chase’s research has found.

CECL compliance dragging small banks toward automation (American Banker), Rated: A

Like many small-to-midsize banks, Bank Independent in Sheffield, Ala., calculated its monthly allowance for loan and lease losses the hard way: setting aside a week every month to complete a largely manual, Excel-based model.

Download Your Guide to LendItFintech USA (LendIt), Rated: B

Discover who attends, why you should attend, andmore.

Ascentium Capital Exceeds $ 1 Billion in Funded Volume During Fiscal Year 2017 (Ascentium Capital), Rated: B

Ascentium Capital LLC, the nation’s largest private-independent finance company, announced it surpassed $1 billion in annual funded volume for the first time in the organization’s history.

 

Real estate investing startup Cadre partners with Goldman Sachs (Reuters), Rated: A

New York-based real estate investment company Cadre has partnered with Goldman Sachs Group Inc (GS.N) to allow the bank’s private wealth management clients to invest through the startup’s platform.

Goldman Sachs clients have committed to investing $250 million in properties through Cadre’s platform so far, the companies said on Wednesday.

Better Saves Homeowners $ 2.7 Million in Mortgage Refinancing Costs in 2017 (Better Email), Rated: A

PeerStreet: A Group Of Surfers Out To Revolutionize Real Estate Investing (Benzinga), Rated: A

PeerStreet is an investment platform that enables accredited investors to easily invest in high-yield, short term, real estate backed loans. PeerStreet sources its loans from non-bank lenders across the nation. They underwrite both the lenders and the loans using advanced algorithms, big-data analytics, manual processes and on-the-ground due diligence to filter and select high quality loans.

Who are your investors, if any?

Our investors include: Andreessen Horowitz, Felicis Ventures, Rembrandt Venture Partners, Montage Ventures, ThomVest, The Kaiser Family Foundation, Colchis Capital, Toba Capital, Le Frak, and many notable individual investors including Dr. Michael Burry, Adam Nash, Ron Suber, D. A. Wallach, etc.

Is there anything else Benzinga should know about your company?

PeerStreet is entrenched in the financial technology and lending industries at large. PeerStreet has been named by American Banker as one of the “Best Places to Work in Financial Technology” in 2018 and one of the “10 Best Startups in Los Angeles” in 2017 by Zippia. PeerStreet is a member of the Marketplace Lending Association and has partnerships with over 150 private residential real estate lenders in over 30 states.

Q&A With Chief Investment Officer Chris Fraley (RealtyMogul), Rated: A

Q: How do you intend to translate your experience from Rockwood Capital to your role at RealtyMogul?

In 2018, I see RealtyMogul expanding the size of its investment transactions, something I have direct experience in managing and find very exciting. I believe RealtyMogul is entering its third phase of growth as a business, evidenced by its recent acquisition of Serendipity Apartments this past September. Due to the ability to invest larger amounts of equity, we were able to maintain a majority, controlling interest in a $24M apartment community. While providing opportunities in preferred equity, mezzanine debt and smaller, passive limited partner interests will still be a critical aspect of our business, I’m hopeful that our real estate team’s substantial institutional background will help us acquire and successfully manage properties with larger transaction values.

Q: Do you think RealtyMogul will impact the traditional institutional investing model?

Absolutely. The institutional world is already starting to sign on to the concept of direct investing because the typical closed end fund model is broken, inefficient and fraught with possibility of misalignment of interests.

Surprisingly, most institutional investors do not want to invest in value add real estate investments in the bottom of a cycle until there is clear evidence of a market recovery. This was evident in the last downturn by the paucity of institutional allocations to value add strategies in the 2008-2012 timeframe. When the market starts to recover, institutional investors should start to make allocations. This may take a year or two. They lock up allocations with 3-4 year investment periods, oftentimes at the peak of cycle. Now is a perfect example of this disconnect.

Direct investment platforms allow investors to move in and out of market more efficiently and avoid an extra layer of fees to the investor. I believe this is the future of our industry and RealtyMogul is poised to lead.

RealtyMogul Hires New Chief People Officer (RealtyMogul), Rated: B

RealtyMogul, a unique commercial real estate private markets investing platform, today announced the addition of Soley Van Lokeren as Chief People Officer.

Stressing About When And How To Pay Your Debts? Pefin’s AI Assistant Is Here To Help (Benzinga), Rated: A

Pefin is the world’s first Artificial Intelligence (AI) financial advisor. The platform provides intelligent, unbiased and personalized financial planning and advice. Pefin’s mission is to look after the financial best interests of users in a way that embraces the unique individuality of their lives.

The platform offers:

  • 1. Long-term Financial Planning services, including a complete Financial Plan
  • 2. Financial Advice, including savings and debt management strategies
  • 3. Investment Advice and Portfolio Management Services
  • 4. Real-time monitoring, updates, and curated financial literacy content for each user

Tech advances force advisers to adjust — or else (ROI-NJ), Rated: A

There’s a machine-versus-human calculus that’s going on in the world of money management.

It may not yet be that more financial advice is provided by machines than humans, but to say the industry is on that path isn’t hyperbole. Investors themselves — particularly those of a younger demographic — have shown they are willing to trust a robot for advice.

John Babcock, president of Peapack-Gladstone Bank’s private wealth management division, sides with the humans, but understands automation is quickly changing the face of his business.

ProShares and VanEck are withdrawing their requests for bitcoin ETFs (Business Insider), Rated: A

Two financial services giants — ProShares and VanEck — are withdrawing requests to the Securities and Exchange Commission to list bitcoin ETFs.

 

US Banks Rely on Fintech Firms to Overcome Legacy Systems (Payments Journal), Rated: A

Legacy systems are preventing nearly two thirds (64%) of US commercial banks from developing Fintech applications, research commissioned by Fintech provider Fraedom has revealed.

Interestingly, 82% of the respondents that highlighted this concern were shareholders. Over half of those polled also noted a lack of expertise within banks as an important concern (56%), just ahead of limited resources (53%).

Commercial banks outsourcing services to a Fintech provider is clearly a trend on the rise, with only 22% of US banks revealing that they do not outsource any payment services compared to 30% of their UK counterparts.

How a Fintech Startup Aims to Take the Fear Out of Investing (Wharton), Rated: A

Riskalyze CEO Aaron Klein talks to former Wharton visiting professor Vinay Nair about his startup’s business model and path to growth.

Nair: Can you give us a sense of what your Risk Number model is and why advisors are attracted to it?

Klein: We built the technology on top of the academic framework that won the Nobel Prize for economics in 2002 — Daniel Kahneman and Amos Tversky’s work on prospect theory. We had a team of academics do a deep dive into the methodology and they said, ‘On the one hand, there are a lot of novel things in what you’ve done. On the other hand, a lot of what you’ve done is taken stuff that we’ve been working on in the labs for 15 years to 20 years and figured out a way to make it commercially viable and understandable by the average human.’

Listen to the podcast here.

Can taking out a loan be a good experience? (WGN Radio), Rated: A

Kabbage has enough experience with small businesses to say providing loans to small businesses can make for a good experience. John Parise is the Head of Customer and Partner Marketing and has been following company journeys for years now. His way of making loans a positive experience is by offering flexibility.

Listen to the podcast.

Fintech Startup Apruve Partners With MSTS For Credit Card Alternative (Benzinga), Rated: B

B2B fintech companies MSTS and Apruve announced Wednesday a payment process obviating the need to leverage capital and resources to provide credit and payment terms.

The new service enables automated instant credit approval, buyer onboarding, billing, customer service and collections services while allowing business clients to eschew the high transaction fees of credit cards.

4 of the 5 Biggest IPOs in 2017 Bombed. Here’s Who Won (Madison), Rated: B

The number of companies going public in 2017 surged 52% over the year ago period, hitting 160 deals, with the proceeds from the IPOs reaching $35.6 billion, double the amount in 2016, according to an analysis by Renaissance Capital.

5. Qudian (down 47.8%)

United Kingdom

RateSetter and Funding Circle added to FSB Funding Platform (P2P Finance News), Rated: AAA

RATESETTER, Funding Circle and Assetz Capital are some of the peer-to-peer lenders that have been included on the Federation of Small Businesses’ (FSB) new business funding platform.

The FSB Funding Platform, developed by Finpoint, matches potential borrowers with more than 100 lenders through the use of Artificial Intelligence (AI).

FSB launches AI-led business finance aggregator (P2P Finance News), Rated: A

THE FEDERATION of Small Businesses (FSB) has launched a new business finance aggregator that uses Artificial Intelligence (AI) to match potential borrowers with more than 100 lenders.

The trade body unveiled the FSB Funding Platform on Wednesday, after it was trialled on FSB members in three UK regions.

The new platform has been developed for the FSB by Finpoint and is regulated by the Financial Conduct Authority.

Funding Circle eyes autumn flotation, report claims (The Digital Banking Club), Rated: AAA

UK peer-to-peer lender Funding Circle is set to hire investment advisers as part of preparations to float on the London Stock Exchange.

UK Businesses Enter 2018 Vulnerable to Economic Shocks (CL News), Rated: A

These are unpredictable times for the UK economy. The great financial crisis remains fresh in the memory of business owners and its effects are still being seen in the form of relatively low wages growth and lagging productivity. Meanwhile, the ongoing talks on Britain’s future relationship with the European Union are a reminder that the future too is uncertain. Against this backdrop, a significant number of Britain’s SMEs are acutely vulnerable to any downturn in trade, according to a survey by the business lender, Nucleus Commercial Finance.

Small business owners were more or less evenly split on the question of whether the UK should remain in Europe, but as the survey indicates, the possibility that current trade talks will lead to a poor outcome is now a major concern,  trumping both the possibility of another major financial crash or the threat of digital attack by hackers.

And almost half of the businesses taking part in the survey said they are financially exposed to any event that impacts on trade, with 47% admitting they wouldn’t last a month on the basis of their current cash reserves. 30% said they wouldn’t last two weeks.

After 2017’s European Brexodus companies want to know the UK is open for business (Verdict), Rated: A

The first Morgan McKinley London employment monitor of the new year has revealed a 37 percent decrease in jobs available year-on-year while there are 30 percent fewer people seeking jobs in the capital.

Month-on-month there was a 52 percent decrease in jobs available, while the number of people seeking jobs in London fell by 40 percent.

China

WeChat shows messaging is the future of financial services ‘platforms’ (Tearsheet), Rated: AAA

WeChat could be the next big broker-dealer among high-net-worth Chinese investors.

Its parent company, Tencent, now has a license that allows it to sell mutual funds on WeChat and give the popular messaging app’s 980 million users more options to help boost funds sold on the platform. It also gives Tencent more sway in deciding which financial products third-party companies can sell on its different platforms.

WeChat is showing that messaging channels, at least in China, are where people like making financial transactions.

European Union

Berlin-based FinTech startup Penta accuses TransferWise to have stolen its debit card branding (EU Startups), Rated: A

The London-based FinTech giant TransferWise just announced its borderless current account, which enables users to spend money in a choice of up to 28 foreign currrencies with a debit card. Tranferwise’s choice of a neon green colour for its first debit card was met with anger by Berlin-based SME challenger bank Penta, which turned to Twitter to express its anger at the striking resemblance to its own neon green card.

Looking at the two card designs, you’ll notice that it’s really just about the colour, and chances are high, that TransferWise picked the similar colour “by accident”.

International

Crypto P2P lender ETHLend launches secondary blockchain partnership (P2P Finance News), Rated: AAA

CRYPTO-BACKED peer-to-peer lending platform ETHLend has partnered with a technology provider to help record and store transactions more securely.

ETHLend, founded by Finland-based Stani Kulechov, is a P2P lending platform funding business and personal loans in the Ethereum digital currency.

Central banks are experimenting with blockchain technology — here’s why (Business Insider), Rated: A

So, blockchain can be quite resilient, it can also be a way to create greater transparency into central banking, more credibility because of the rules a blockchain-based system enforces.

Blockchain based BABB Kicks Off Initial Coin Offering to Create the “World Bank for the Micro Economy” (Crowdfund Insider), Rated: A

BABB, a banking platform based on Blockchain based in London, is launching its initial coin offering (ICO) on January 15th with a pre-sale. The general token sale of BAX will commence immediately following the pre-sale seeking to raise a hard cap of USD $20 million. Once their app is live, BAX will be used to pay for services, fees and licensing costs; so if an individual or business wants to use a BABB account, they will use BAX to pay for it. BAX tokens can also be used for other services.

The money raised by the ICO will be used for BABB to deliver: a smartphone app with bank account capability and international money transfer functionality; a European banking license in the appropriate jurisdiction for their go-to market strategy; and a partnership with a leading retail or central bank in an emerging market, to open corridors for international transactions.

Finova’s FNVA to Become the First Equity-linked Token (BTCManager), Rated: A

Finova Financial is growing as a trusted online lender enabling people to access affordable loans quickly. The platform is recognized as part of the “Fintech 100 list of the world’s leading financial technology innovators for 2016.”

Finova’s FNVA tokens are unique because these tokens are linked with a share of equity in Finova Financial itself. Also, it utilizes the ERC-20 Ethereum token standard that will be traded on cryptocurrency exchanges that are SEC approved and has the backing of assets of a US corporation. Therefore, the token sale is like a hybrid between an ICO and IPO.

These tokens will soon be available through FrontFundr investment platform.

The token price structure of the sale is displayed below, where the price will increase over time. A total of $18.5 million worth of tokens will be sold, on a sliding scale between $0.75 and $1.56 as the supply of FNVA increases.

 

Source: BTCManager
Australia/New Zealand

Auswide Bank sells stake in MoneyPlace, only two years after investing in online lender (The Courier Mail), Rated: AAA

BUNDABERG-based bank Auswide is offloading its 62 per cent stake in online lender MoneyPlace only two years after making an investment to “take a position” in the hi-tech sector.

Mom and pop investors fleeing property rental business (Scoop), Rated: A

Increasing numbers of mom and pop landlords are contemplating giving up on property investment and exploring alternative investments due to reasons such as the increasing pressure they feel from what can be a capital-intensive investment, changes to the legal environment (such as the Healthy Homes Guarantee Act 2017) and fears of how methamphetamine contamination could ruin their retirement planning.

CEO of New Zealand’s largest peer-to-peer mortgage lender Southern Cross Partners, Luke Jackson, says a string of inquiries about alternative investment options that don’t stray too far from property have been received by his team in recent weeks.

India

Existing NBFC cannot operate as peer-to-peer lender (IIFL), Rated: AAA

The Reserve Bank of India (RBI) notified that existing non-banking financial companies cannot operate as peer-to-peer lenders. Further, new applicants for peer-to-peer lending license will need to provide the list of promoters and the source of funds for the minimum capital requirement of Rs20mn, the regulator said.

RBI further clarified that electronic platforms that assist only banks, non-banking financial companies and other regulated financial institutions to identify borrowers for lending will not be classified as peer-to-peer lending platforms. Only electronic platforms that also cater to retail lenders can register separately as such platforms, the central bank said.

The future of online financial advice and mutual funds (hubbis), Rated: A

Kunal Bajaj points out India is a large country without sufficient financial advisors to serve the population’s needs. With most people simply finding a financial advisor close to their home or place of employment, financial advice in India is primarily limited by geography which is not an ideal situation. As an added problem, many people find that their advisor has persuaded them into choosing a product which did not meet their needs. “Clearfunds eliminates this issue by delivering a bespoke solution for each customer which uses our internet platform.” Bajaj explains.

Traditional financial advisors try to channel every client into one of 21 possible portfolios (0-100 Debt-Equity or 100-0 Equity-Debt, in five-percent steps) or outcomes, often through first impressions or physical factors. With an online financial advisor, this is not possible, and therefore more work is put into finding out more about the person themselves and their individual requirements by asking periodic psychometric questions about the stability of their employment and income stream.

Bajaj has seen Clearfunds go from strength to strength in the 12 months since the platform has been online. “We have customers across 400 cities and around $10 million in assets under management.” He says. “Betterment and WealthFront took over a year to gather their first $10 million in the USA but now they both have billions in assets. Nutmeg has been in business for 7 years and has around 40,000 accounts and a billion dollars of assets under management.”

APAC

Indonesia P2P Startup Modalku Milestone: Hits $ 74 Million in Total Crowdfunded MSME Loans (Crowdfund Insider), Rated: AAA

Modalku, an Indonesia-based peer-to-peer lending fintech startup, successfully surpassed $74 million (Rp 1 trillion) in total crowdfunded MSME loans.

Canada

Mike Novogratz is planning a crypto version of Goldman Sachs (Business Insider), Rated: A

In a statement out Tuesday, Novogratz said he is looking to raise $200 million for Galaxy Digital LP, a “best-in-class, full service, institutional quality merchant banking business” for the crypto market. Novogratz also plans to list the company on TSX Venture Exchange, a Canada-based exchange for small cap companies.

The new bank will be born out of Canadian-based First Coin Capital, which Novogratz plans to buy and then merge with Bradmer Pharmaceuticals. Its main businesses will include trading, advisory services, asset management, and private equity-like investing.

Authors:

George Popescu
Allen Taylor

Wednesday January 3 2018, Daily News Digest

ETFs Europe

News Comments Today’s main news: GreenSky raises $4.5B in equity, becomes most valuable online lender. Funding Circle has eye on IPO at 2B GBP valuation. P2P lenders in India blame lending limit on rising costs. GN Compass wants to disrupt lending liquidity in Canada. Today’s main analysis: Can Mifid II spur growth in European ETF market? Today’s thought-provoking […]

ETFs Europe

News Comments

United States

United Kingdom

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Who’s the Most Valuable Online Lender? After This Deal, It’s GreenSky (WSJ), Rated: AAA

Financial-technology firm GreenSky LLC raised new equity from Pacific Investment Management Co. in a deal that valued the digital lender at nearly $4.5 billion, said a person familiar with the matter.

It vaults GreenSky over Social Finance Inc. to become the most highly-valued online lender in the U.S. It also makes the Atlanta company the second most valuable privately held U.S. fintech company behind Stripe Inc., which processes payments for Internet businesses.

Pimco, the Newport Beach, Calif., money manager, invested at a valuation roughly 25% above the $3.6 billion GreenSky fetched in 2016.

What 2018 Will Mean For Marketplace Lenders (PYMNTS), Rated: AAA

2017 was a tough year for some of the biggest names in alternative financial services in the U.S. – Prosper, OnDeck and LendingClub, in particular.

Breslow is hyping OnDeck’s future of partnerships with mainstream baking players – in particular, calling out a renewed partnership with JPMorgan Chase in August to expand the banks’ SMB lending reach.

Prosper, perhaps unsurprisingly, is focused on remaining prosperous, as measured by profitability and further developing its new securitization platform.

LendingClub finally got investors to show them some love – and after its record low following its analyst day earnings accounting, stock jumped 15 percent in mid-December and has managed to hold relatively stable.

Marketplace Lending Predictions for 2018 (Lend Academy), Rated: AAA

First, let’s review my predictions I made exactly one year ago.

  1. 2017 will be the year of the bank partnership
    I would say I was partially right on this one.
  2. The OCC Fintech Charter will receive a positive reception
    So, while many of the fintech platforms supported the charter there was no real positive movement this year.
  3. Lending platforms will offer banking products
    While we had a couple of platforms offering credit cards for the most part this prediction failed to materialize.
  4. One large platform will be acquired
    Student lender Earnest was acquired by Navient in a deal announced in early October.
  5. There will be no new IPOs this year
    I was almost right on this one but one US lending platform did have an IPO in 2017.
  6. China will become an important source of capital outside the USA
    I got this one right.
  7. Artificial intelligence will take center stage
    I think I read more articles about AI this year than in the previous five years combined.

My 2018 Marketplace Lending Predictions

  1. Five top 25 banks will launch their own online lending platforms
    Banks have realized that if you want to provide successful loan products today you need to have an online presence.
  2. Two new pieces of legislation will be passed that will benefit the industry
  3. One of the top five (non-bank) online lending platforms will be acquired
  4. A major lending platform will get hit with a cyber attack
    Here is the one prediction where I really hope I am wrong.
  5. The tech giants consolidate their positions in online lending
    Amazon, PayPal and Square have all started to roll out various online lending offerings to their huge customer bases.
  6. 2018 is the year of product line expansion
  7. Messaging apps start to get integrated into online lending

The Top 10 Most Important Marketplace Lending Stories of 2017 (Lend Academy), Rated: A

  1. Mike Cagney is Gone as CEO of SoFi Effective Immediately
  2. The Cleveland Fed Retracts Their Report on “P2P Lending”
  3. Prosper Finally Closes Their Big $5 Billion Deal
  4. Renaud Laplanche is Back with a New Consumer Lending Platform Called Upgrade 
  5. The New Breed of Small Business Lenders: Amazon, Paypal and Square
  6. The Fastest Consumer Lenders to $1 Billion in Originations
  7. CFPB Announces No-Action Letter to Upstart
  8. The OCC Publishes Details on the Fintech Charter
  9. Bills Being Introduced to “Fix” Decision in Madden v. Midland
  10. Takeaways From LendingClub’s First Ever Investor Day

Ex-Netflix Exec Thinks This Fintech Company Has Netflix-Like Potential (The Motley Fool), Rated: AAA

Netflix has completely disrupted the entertainment industry, sending large incumbents scrambling to compete with its vast global scale.

How did Netflix pull this off? Several reasons, but one is certainly Netflix’s unique culture, outlined in its now-famous Culture Deck.

That deck was constructed by Patty McCord, who spent 14 years as Netflix’s chief talent officer.

The company McCord joined is Lending Club (NYSE:LC).

In the press release, McCord stated:

I see a lot of parallels between where Netflix was as a company 10 years ago, where LendingClub is today, and where it can go in the next 10 years. I’m attracted to LendingClub for the stellar people and the way it exemplifies the concepts of freedom and responsibility. Culture can help drive innovation in companies that are paving new ground and transforming legacy industries, like Netflix did and like LendingClub is doing today. … In our innovative world, I see marketplaces like LendingClub as the future.

Ousted SoFi CEO is back with a new startup (Axios), Rated: A

Why it matters: If 2017 was the year in which VCs began to fire controversial execs, 2018 may be the year in which they’re forced to decide on quick-turn second acts.

Affirm’s big business for 2018 is marketing (Tearsheet), Rated: A

  • Affirm isn’t just a payment method or a personal loan anymore — it’s a marketing lever for merchants

  • Affirm sees every transaction at the point of sale — who is buying, what they’re buying and where; it’s a departure from the way credit is underwritten today, where lenders have no idea why borrowers need the money or how they’ll use it

Where Does Alternative Lending Go in 2018? (Hackernoon), Rated: A

When most people think of alternative lending, they immediately think of payday loans and other abusive loan products. In the tech world, the first thing that comes to mind are online lenders: those who take loans traditionally originated in person and move them online. That was the first wave of alternative lenders — think LendingClub, Prosper, OnDeck, to name a few.

Alt investments on the rise among RIAs (InvestmentNews), Rated: A

Based on the success of the RIA industry, the trend of breakaway advisers interested in exploring the independent channel continues to gain momentum.

Propagated by wirehouse branch management to keep their top producers in their seats, this false campaign is now being revealed as its exact opposite; there are more customizable solutions for RIAs to access and deploy alternative investments for their high net worth clients than ever before.

For example, to access alternatives on their own, RIAs in the past typically would be looking at $25 million AUM minimums just to reach cost-effective scale, and many alternative managers have $10 million individual minimums themselves.

5 fintech charts that surprised us this year (Tearsheet), Rated: A

Loyalty and rewards incentives may not be enough to make consumers like mobile payments, and it could be on retailers to find what would keep people coming back to their mobile wallets. Mobile payment adoption among Apple, Android and Samsung Pay today is low. Paying with cash or card works just fine for them, customers say.

Transparency is the big sticking point when it comes to why small businesses still prefer banks to online lenders.

What Silicon Valley Misunderstands About Banking & Fintech (The Financial Brand), Rated: A

There are some relevant lessons learned about behavioral finance and digital adoption discussed in the book “FinTech Innovation.” One of the most important lessons is the distinction between digital banking winners and laggards over time.

  • Disruptive innovation is ultimately less important than sustaining innovation.
  • Digital is a ‘pull’ technology, while much of financial serves are ‘push’ market places.
  • Platforms win on digital: bundling is more important than unbundling.

The Distinction Between ‘Push’ and ‘Pull’ Marketplaces

Digital brings many benefits to streamline the processes in financial services, but front office disintermediation could easily create financial exclusion in the Western world because many households operate in a ‘push’ modality. Only the few self-directed consumers are comfortable enough to ‘pull’ financial products.

This is the reason why the growth of first mover Robo-Advisor solutions were initially very promising but then faltered, while firms like Vanguard and Charles Schwab can still grow fast on digital.

Being a ‘pull’ marketplace means using digital with a purpose, like looking for a specific product on Amazon. However, very few households would google for the next investment fund or business loan. Instead, the majority would ask a friend, a banking organization or an advisor about their recommendations.

Will tomorrow’s core banking systems run on open-source software? (American Banker), Rated: A

Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.

Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.

For fintech owned by a CUSO, will banks buy? (Banking Exchange), Rated: A

Morales, CEO of QCash Financial, a credit union service organization (CUSO) owned by WSECU (formerly Washington State Employee Credit Union), says that constraint may be lessening based on the final ruling on payday lending issued by the Consumer Financial Protection Bureau in October.

Credit unions, however, are interested in the QCash small-dollar lending platform. Morales says that nine credit unions have signed up for the product and five are currently live with it.

Fintech Predictions For 2018 (Financial Advisor), Rated: B

Identity verification will be a priority in 2018, with 60 percent of online marketplaces and other websites adopting technologies and techniques for verifying new users’ identities, the company predicts.

Bankers anxious as Trump mulls credit union regulator for CFPB (American Banker), Rated: B

The Trump administration’s consideration of J. Mark McWatters to lead the Consumer Financial Protection Bureau is stoking fears among bankers that he will show favor to credit unions once in office.

United Kingdom

UK’s Largest P2P Lender Funding Circle Said to be Planning IPO at £2 Billion Valuation (Crowdfund Insider), Rated: AAA

Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.

Urban Jungle Raises £1M in Seed Funding (FinSMEs), Rated: A

Urban Jungle, a London, UK-based insurtech startup, completed a £1m seed funding round.

Moneywise reveals top 2018 financial resolutions for UK adults (London School of Business & Finance), Rated: A

Research from financial advice website Moneywise has revealed the top financial goals of its users for 2018.

Moneywise found that cutting down on unnecessary spending was the top financial resolution for 2018, with 18 per cent citing this as their main priority.

Starting or boosting cash savings was voted the second most popular financial resolution for 2018, with this goal being set by 11 per cent of Moneywise users, whilst 10 per cent plan to start investing for the first time or boosting investments in a Stocks and Shares Isa.

When IFAs fight back against digital investment management (WhatInvestment.co.uk), Rated: A

More robo-advice platforms are on the market than ever before, and the number will grow rapidly during 2018. A joint report from the FCA and the Treasury, published last June, found that 100 robo firms are either on the market already or in active development.

IFAs may well find this frustrating – even with professional credentials and years of experience, they are subject to more distrust and scrutiny than a number of untested algorithms. Worse, these algorithms may come to represent their primary competition: they offer lower prices, they open up access to financial advice, and there is a range of options available for customers minded to use them, with more to come.

Proplend Looks Back on 2017 P2P Successes & Announces 2018 Plans (Crowdfund Insider), Rated: A

On Tuesday, online platform Proplend gave its 2017 peer-to-peer lending year in review.

  • The majority of platforms gained full Financial Conduct Authority (FCA) authorization
  • Many platforms sought ISA Manager Status to launch Innovative Finance ISA (IFISA) – with Proplend being among the early adopters.
  • LendInvest withdrew FCA approval application and stepped down from the Peer to Peer Finance Association as it moved from all P2P activity
  • RateSetter’s wholesale lending practices notably proved costly. The lender eventually withdrew from the P2PFA after breathing the association’s operating principles

The lender went on to note its plans for 2018:

  • The redesign of Lender Dashboards, Proplend.com website and the launch of our Auto-Invest product
  • Initially Proplend Auto-Invest will be a low-risk (Tranche A), three-year, Innovative Finance ISA product targeting returns of c.5% each year
  • The lender has built a “healthy” loan pipeline which will be available on the platform from early 2018, subject to due diligence, valuations, and legals.

5 alternative investments to the stock market (BM Magazine), Rated: B

  1. Real Estate
  2. Gold and other Precious Metals
  3. Backing and Staking in Poker
  4. Peer-to-Peer Lending
  5. Equity Crowdfunding

Could 2018 be a bumper year for tech IPOs? (Computer Business Review), Rated: B

After a couple of quiet years on the IPO front, the market could be ready to bounce back with Funding Circle said to be the first targeting flotation.

In January 2017 the P2P site surpassed a £1bn valuation thanks to an £82m funding round, led by the likes of Accel.

With distribution deals with the likes of the Royal Bank of Scotland and Santander, Funding Circle lent more than £1.7bn in 2017.

The London Stock Exchange revealed that 106 companies floated on its markets in 2017, raising £15bn, up 63% by number and 164% by value on 2016. These numbers mean that the LSE surpassed all European exchanges in the year by both IPO number and by money raised.

European Union

ETF providers hope Mifid II will spur European growth (Financial Times), Rated: AAA

ETF trading has since spread to 25 exchanges across Europe, but no accurate record of activity has been required by regulators. About 70 per cent of ETF trading in Europe goes unreported because it occurs via private bilateral over-the-counter transactions.

This should begin to end from Wednesday with the introduction of sweeping European rules designed to strengthen protection for investors and improve transparency across the continent’s financial markets. The package of regulations, known as Mifid II, requires comprehensive, detailed reporting of ETF trades.

Source: Financial Times

The passive investment industry, which is dominated by BlackRock, State Street and Vanguard, are betting Mifid II will set their European businesses on a growth path akin to the US, where usage has spread far more widely and deeply. Assets held in US-listed ETFs stood at $3.5tn at the end of November, compared with just $790bn across all European-listed ETFs, according to ETFGI.

Source: Financial Times
International

The FinTech outlook for 2018 (The Finanser), Rated: AAA

There are four big things for 2018 from a FinTech viewpoint that are obvious to me however, which are:

  1. Getting down to business with Artificial Intelligence (AI)
  2. Rationalising and cleansing core data structures
  3. Continuing the digital drive
  4. Distributed Ledger Technology (DLT) continues to rise

Therefore, rather than me making predictions, I thought it interesting to review the views of other commentators.

Jim also wrote another piece that nicely summarises Forrester’s predictions for 2018 which include:

  1. Banks not embracing Open Banking, but increasing partnerships with start-ups;
  2. Faster moves to embrace Digital Banking whilst losing focus on face-to-face communications; and
  3. Focus on back office transformation.

 

Saxo Bank’s Payments business sent me a press release with their top three predictions, which are:

  • The demise of traditional, slow, expensive cross border payments
  • Payment Service Providers (PSPs) will help merchants to expand internationally
  • Tech giants move into banking

Top 10 Companies of the Blockchain Industry in 2017 (Coin Telegraph), Rated: A

The total market capitalization of all the cryptocurrencies hit the $600 bln mark in December.

Source: Coin Telegraph

Coinbase is one of the top digital currency wallet and platform for exchange. Market capitalization: $2 bln (GDAX)

Ripple is a real-time gross settlement and currency exchange. Its main goal is to make an entire system devoted to money transferring. Market capitalization: $30 bln

India

P2P players blame lending limit for rising costs (Business Standard), Rated: AAA

Peer-to-peer lending (P2P) platforms have seen a rise in traffic as well as investor interest after registering themselves with the  But they argue the Rs 1-million limit placed on across all platforms is restrictive.

“With time, these limits are going to be relaxed by the  These have been imposed in order to avoid rapid growth that could lead to systemic risk,” said Ekmeet Singh, CEO, Lendbox.

Industry players want the to raise the limit for individual borrowers and remove the limit for institutional 

P2P lender AnyTimeLoan, prop-tech startup Foyr, tech firm Imanis raise funds (Deal Street Asia), Rated: A

While Spice Digital is investing up to $3.9 million in AnyTimeLoan, prop-tech startup Foyr has raised $3.8 million from JLL and others. Also, Wipro has put in an additional $2 million in US-based tech firm Imanis.

Asia

Crowdo Recaps 2017 Milestones: 3,500+ Projects Funded (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding, posted an infographic citing its 2017 milestones.

Canada

Meet GN Compass: The ICO Attempting to Disrupt Liquidity In The Lending Market (Equities.com), Rated: AAA

Collins: I left the railway, cashed out my pension and started my own lending company; Great North Capital Inc. We have successfully funded approximately 100 loans; primarily focusing on high risk clients. Based on my accumulative knowledge and experience in both banking and running Great North Capital, I started to develop the idea for a peer-to-peer lending solution where there is very limited risk to the investors (lenders) while making loans liquid. Also by having our own credit system for borrowers, they have the opportunity to improve their credit rating on the platform by making timely payments and having no delinquencies. At the same time, I was learning more about cryptocurrencies and blockchain technology. I quickly realized the huge potential of the blockchain and how it can solve the liquidity problem as well as securing an investor’s principal capital; which are the main issues of current peer-to-peer lending platforms. I got in touch with Jean Pierre Rukebesha who immediately liked the idea and decided to come on board as co-founder and CFO. Hence GN Compass (Great North Compass) was born.

Older Canadians still leery of fintech despite flood of services, RateHub finds (IT Business), Rated: A

Between last year’s official release of Android Pay, the increasing ubiquity of artificial intelligence (AI)-powered support platforms such as Sun Life’s Ella, and the ongoing digital transformation of Canada’s banks, Canadians have more opportunities than ever to integrate fintech into their lives – but according to financial comparison platform developer Ratehub.ca, the eldest among us aren’t taking advantage.

According to the company’s 2017 Digital Money Trends Report, released last month, fewer than half of baby boomers reported trusting robo-advisors, mobile payments, marketplace and peer-to-peer lenders, and rate comparison website, while in many cases millennials and generation X-ers were nearly twice as likely to do so.

Other findings from the report include:

  • Nearly twice as many millennials (44 per cent) and generation X-ers (42 per cent) reported trusting robo-advisors compared to boomers (23 per cent).
  • Nearly twice as many millennials (71 per cent) said they trust mobile payments compared to boomers (38 per cent). (62 per cent of generation X-ers said they trust mobile payments.)
  • Twice as many millennials (47 per cent) and generation X-ers (48 per cent) trust marketplace lenders compared to boomers (23 per cent).
  • 58 per cent of millennials and 53 per cent of generation X-ers trust peer-to-peer lenders, versus only 32 per cent of boomers.
  • 63 per cent of millennials and 60 per cent of generation X-ers trust rate comparison websites, versus 42 per cent of boomers.
Africa

Internet firm Opera bets on Kenyan to steer Africa Fintech (Business Daily), Rated: A

Internet browser company Opera has picked Eddie Ndichu to drive its Fintech strategy in Africa even as it prepares to set up an office in Nairobi.

Opera has said that it is investing Sh10.3 billion ($100 million) in Africa’s digital economy over the next two years and OPay is part of those investments.

In a statement Tuesday, Opera said that it had appointed Mr Ndichu as the managing director and vice president for Fintech in Africa.

Authors:

George Popescu
Allen Taylor

Wednesday January 3 2018, Daily News Digest

ETFs Europe

News Comments Today’s main news: GreenSky raises $4.5B in equity, becomes most valuable online lender. Funding Circle has eye on IPO at 2B GBP valuation. P2P lenders in India blame lending limit on rising costs. GN Compass wants to disrupt lending liquidity in Canada. Today’s main analysis: Can Mifid II spur growth in European ETF market? Today’s thought-provoking […]

ETFs Europe

News Comments

United States

United Kingdom

European Union

International

India

Asia

Canada

Africa

News Summary

United States

Who’s the Most Valuable Online Lender? After This Deal, It’s GreenSky (WSJ), Rated: AAA

Financial-technology firm GreenSky LLC raised new equity from Pacific Investment Management Co. in a deal that valued the digital lender at nearly $4.5 billion, said a person familiar with the matter.

It vaults GreenSky over Social Finance Inc. to become the most highly-valued online lender in the U.S. It also makes the Atlanta company the second most valuable privately held U.S. fintech company behind Stripe Inc., which processes payments for Internet businesses.

Pimco, the Newport Beach, Calif., money manager, invested at a valuation roughly 25% above the $3.6 billion GreenSky fetched in 2016.

What 2018 Will Mean For Marketplace Lenders (PYMNTS), Rated: AAA

2017 was a tough year for some of the biggest names in alternative financial services in the U.S. – Prosper, OnDeck and LendingClub, in particular.

Breslow is hyping OnDeck’s future of partnerships with mainstream baking players – in particular, calling out a renewed partnership with JPMorgan Chase in August to expand the banks’ SMB lending reach.

Prosper, perhaps unsurprisingly, is focused on remaining prosperous, as measured by profitability and further developing its new securitization platform.

LendingClub finally got investors to show them some love – and after its record low following its analyst day earnings accounting, stock jumped 15 percent in mid-December and has managed to hold relatively stable.

Marketplace Lending Predictions for 2018 (Lend Academy), Rated: AAA

First, let’s review my predictions I made exactly one year ago.

  1. 2017 will be the year of the bank partnership
    I would say I was partially right on this one.
  2. The OCC Fintech Charter will receive a positive reception
    So, while many of the fintech platforms supported the charter there was no real positive movement this year.
  3. Lending platforms will offer banking products
    While we had a couple of platforms offering credit cards for the most part this prediction failed to materialize.
  4. One large platform will be acquired
    Student lender Earnest was acquired by Navient in a deal announced in early October.
  5. There will be no new IPOs this year
    I was almost right on this one but one US lending platform did have an IPO in 2017.
  6. China will become an important source of capital outside the USA
    I got this one right.
  7. Artificial intelligence will take center stage
    I think I read more articles about AI this year than in the previous five years combined.

My 2018 Marketplace Lending Predictions

  1. Five top 25 banks will launch their own online lending platforms
    Banks have realized that if you want to provide successful loan products today you need to have an online presence.
  2. Two new pieces of legislation will be passed that will benefit the industry
  3. One of the top five (non-bank) online lending platforms will be acquired
  4. A major lending platform will get hit with a cyber attack
    Here is the one prediction where I really hope I am wrong.
  5. The tech giants consolidate their positions in online lending
    Amazon, PayPal and Square have all started to roll out various online lending offerings to their huge customer bases.
  6. 2018 is the year of product line expansion
  7. Messaging apps start to get integrated into online lending

The Top 10 Most Important Marketplace Lending Stories of 2017 (Lend Academy), Rated: A

  1. Mike Cagney is Gone as CEO of SoFi Effective Immediately
  2. The Cleveland Fed Retracts Their Report on “P2P Lending”
  3. Prosper Finally Closes Their Big $5 Billion Deal
  4. Renaud Laplanche is Back with a New Consumer Lending Platform Called Upgrade 
  5. The New Breed of Small Business Lenders: Amazon, Paypal and Square
  6. The Fastest Consumer Lenders to $1 Billion in Originations
  7. CFPB Announces No-Action Letter to Upstart
  8. The OCC Publishes Details on the Fintech Charter
  9. Bills Being Introduced to “Fix” Decision in Madden v. Midland
  10. Takeaways From LendingClub’s First Ever Investor Day

Ex-Netflix Exec Thinks This Fintech Company Has Netflix-Like Potential (The Motley Fool), Rated: AAA

Netflix has completely disrupted the entertainment industry, sending large incumbents scrambling to compete with its vast global scale.

How did Netflix pull this off? Several reasons, but one is certainly Netflix’s unique culture, outlined in its now-famous Culture Deck.

That deck was constructed by Patty McCord, who spent 14 years as Netflix’s chief talent officer.

The company McCord joined is Lending Club (NYSE:LC).

In the press release, McCord stated:

I see a lot of parallels between where Netflix was as a company 10 years ago, where LendingClub is today, and where it can go in the next 10 years. I’m attracted to LendingClub for the stellar people and the way it exemplifies the concepts of freedom and responsibility. Culture can help drive innovation in companies that are paving new ground and transforming legacy industries, like Netflix did and like LendingClub is doing today. … In our innovative world, I see marketplaces like LendingClub as the future.

Ousted SoFi CEO is back with a new startup (Axios), Rated: A

Why it matters: If 2017 was the year in which VCs began to fire controversial execs, 2018 may be the year in which they’re forced to decide on quick-turn second acts.

Affirm’s big business for 2018 is marketing (Tearsheet), Rated: A

  • Affirm isn’t just a payment method or a personal loan anymore — it’s a marketing lever for merchants

  • Affirm sees every transaction at the point of sale — who is buying, what they’re buying and where; it’s a departure from the way credit is underwritten today, where lenders have no idea why borrowers need the money or how they’ll use it

Where Does Alternative Lending Go in 2018? (Hackernoon), Rated: A

When most people think of alternative lending, they immediately think of payday loans and other abusive loan products. In the tech world, the first thing that comes to mind are online lenders: those who take loans traditionally originated in person and move them online. That was the first wave of alternative lenders — think LendingClub, Prosper, OnDeck, to name a few.

Alt investments on the rise among RIAs (InvestmentNews), Rated: A

Based on the success of the RIA industry, the trend of breakaway advisers interested in exploring the independent channel continues to gain momentum.

Propagated by wirehouse branch management to keep their top producers in their seats, this false campaign is now being revealed as its exact opposite; there are more customizable solutions for RIAs to access and deploy alternative investments for their high net worth clients than ever before.

For example, to access alternatives on their own, RIAs in the past typically would be looking at $25 million AUM minimums just to reach cost-effective scale, and many alternative managers have $10 million individual minimums themselves.

5 fintech charts that surprised us this year (Tearsheet), Rated: A

Loyalty and rewards incentives may not be enough to make consumers like mobile payments, and it could be on retailers to find what would keep people coming back to their mobile wallets. Mobile payment adoption among Apple, Android and Samsung Pay today is low. Paying with cash or card works just fine for them, customers say.

Transparency is the big sticking point when it comes to why small businesses still prefer banks to online lenders.

What Silicon Valley Misunderstands About Banking & Fintech (The Financial Brand), Rated: A

There are some relevant lessons learned about behavioral finance and digital adoption discussed in the book “FinTech Innovation.” One of the most important lessons is the distinction between digital banking winners and laggards over time.

  • Disruptive innovation is ultimately less important than sustaining innovation.
  • Digital is a ‘pull’ technology, while much of financial serves are ‘push’ market places.
  • Platforms win on digital: bundling is more important than unbundling.

The Distinction Between ‘Push’ and ‘Pull’ Marketplaces

Digital brings many benefits to streamline the processes in financial services, but front office disintermediation could easily create financial exclusion in the Western world because many households operate in a ‘push’ modality. Only the few self-directed consumers are comfortable enough to ‘pull’ financial products.

This is the reason why the growth of first mover Robo-Advisor solutions were initially very promising but then faltered, while firms like Vanguard and Charles Schwab can still grow fast on digital.

Being a ‘pull’ marketplace means using digital with a purpose, like looking for a specific product on Amazon. However, very few households would google for the next investment fund or business loan. Instead, the majority would ask a friend, a banking organization or an advisor about their recommendations.

Will tomorrow’s core banking systems run on open-source software? (American Banker), Rated: A

Banks, long committed to keeping customer data private and their own code proprietary, are now opening up to fintechs and third-party developers in new ways.

Open-source projects are underway at Deutsche Bank, which made code from its Autobahn commercial banking software publicly available this fall, and at JPMorgan Chase, whose Quorum blockchain software is available in the open-source software repository GitHub.

For fintech owned by a CUSO, will banks buy? (Banking Exchange), Rated: A

Morales, CEO of QCash Financial, a credit union service organization (CUSO) owned by WSECU (formerly Washington State Employee Credit Union), says that constraint may be lessening based on the final ruling on payday lending issued by the Consumer Financial Protection Bureau in October.

Credit unions, however, are interested in the QCash small-dollar lending platform. Morales says that nine credit unions have signed up for the product and five are currently live with it.

Fintech Predictions For 2018 (Financial Advisor), Rated: B

Identity verification will be a priority in 2018, with 60 percent of online marketplaces and other websites adopting technologies and techniques for verifying new users’ identities, the company predicts.

Bankers anxious as Trump mulls credit union regulator for CFPB (American Banker), Rated: B

The Trump administration’s consideration of J. Mark McWatters to lead the Consumer Financial Protection Bureau is stoking fears among bankers that he will show favor to credit unions once in office.

United Kingdom

UK’s Largest P2P Lender Funding Circle Said to be Planning IPO at £2 Billion Valuation (Crowdfund Insider), Rated: AAA

Funding Circle, a UK based peer to peer lender, is reportedly planning an initial public offering (IPO) for 2018. The news of the new listing is courtesy of SkyNews that reports Funding Circle will begin meeting with investment banks during Q1 of 2018 as they sign up underwriters for the deal. Shares are expected to list at some point in late 2018. If Funding Circle trades on an exchange it will become the first UK P2P lender to do so thus representing a seminal event in the online lending industry.

Urban Jungle Raises £1M in Seed Funding (FinSMEs), Rated: A

Urban Jungle, a London, UK-based insurtech startup, completed a £1m seed funding round.

Moneywise reveals top 2018 financial resolutions for UK adults (London School of Business & Finance), Rated: A

Research from financial advice website Moneywise has revealed the top financial goals of its users for 2018.

Moneywise found that cutting down on unnecessary spending was the top financial resolution for 2018, with 18 per cent citing this as their main priority.

Starting or boosting cash savings was voted the second most popular financial resolution for 2018, with this goal being set by 11 per cent of Moneywise users, whilst 10 per cent plan to start investing for the first time or boosting investments in a Stocks and Shares Isa.

When IFAs fight back against digital investment management (WhatInvestment.co.uk), Rated: A

More robo-advice platforms are on the market than ever before, and the number will grow rapidly during 2018. A joint report from the FCA and the Treasury, published last June, found that 100 robo firms are either on the market already or in active development.

IFAs may well find this frustrating – even with professional credentials and years of experience, they are subject to more distrust and scrutiny than a number of untested algorithms. Worse, these algorithms may come to represent their primary competition: they offer lower prices, they open up access to financial advice, and there is a range of options available for customers minded to use them, with more to come.

Proplend Looks Back on 2017 P2P Successes & Announces 2018 Plans (Crowdfund Insider), Rated: A

On Tuesday, online platform Proplend gave its 2017 peer-to-peer lending year in review.

  • The majority of platforms gained full Financial Conduct Authority (FCA) authorization
  • Many platforms sought ISA Manager Status to launch Innovative Finance ISA (IFISA) – with Proplend being among the early adopters.
  • LendInvest withdrew FCA approval application and stepped down from the Peer to Peer Finance Association as it moved from all P2P activity
  • RateSetter’s wholesale lending practices notably proved costly. The lender eventually withdrew from the P2PFA after breathing the association’s operating principles

The lender went on to note its plans for 2018:

  • The redesign of Lender Dashboards, Proplend.com website and the launch of our Auto-Invest product
  • Initially Proplend Auto-Invest will be a low-risk (Tranche A), three-year, Innovative Finance ISA product targeting returns of c.5% each year
  • The lender has built a “healthy” loan pipeline which will be available on the platform from early 2018, subject to due diligence, valuations, and legals.

5 alternative investments to the stock market (BM Magazine), Rated: B

  1. Real Estate
  2. Gold and other Precious Metals
  3. Backing and Staking in Poker
  4. Peer-to-Peer Lending
  5. Equity Crowdfunding

Could 2018 be a bumper year for tech IPOs? (Computer Business Review), Rated: B

After a couple of quiet years on the IPO front, the market could be ready to bounce back with Funding Circle said to be the first targeting flotation.

In January 2017 the P2P site surpassed a £1bn valuation thanks to an £82m funding round, led by the likes of Accel.

With distribution deals with the likes of the Royal Bank of Scotland and Santander, Funding Circle lent more than £1.7bn in 2017.

The London Stock Exchange revealed that 106 companies floated on its markets in 2017, raising £15bn, up 63% by number and 164% by value on 2016. These numbers mean that the LSE surpassed all European exchanges in the year by both IPO number and by money raised.

European Union

ETF providers hope Mifid II will spur European growth (Financial Times), Rated: AAA

ETF trading has since spread to 25 exchanges across Europe, but no accurate record of activity has been required by regulators. About 70 per cent of ETF trading in Europe goes unreported because it occurs via private bilateral over-the-counter transactions.

This should begin to end from Wednesday with the introduction of sweeping European rules designed to strengthen protection for investors and improve transparency across the continent’s financial markets. The package of regulations, known as Mifid II, requires comprehensive, detailed reporting of ETF trades.

Source: Financial Times

The passive investment industry, which is dominated by BlackRock, State Street and Vanguard, are betting Mifid II will set their European businesses on a growth path akin to the US, where usage has spread far more widely and deeply. Assets held in US-listed ETFs stood at $3.5tn at the end of November, compared with just $790bn across all European-listed ETFs, according to ETFGI.

Source: Financial Times
International

The FinTech outlook for 2018 (The Finanser), Rated: AAA

There are four big things for 2018 from a FinTech viewpoint that are obvious to me however, which are:

  1. Getting down to business with Artificial Intelligence (AI)
  2. Rationalising and cleansing core data structures
  3. Continuing the digital drive
  4. Distributed Ledger Technology (DLT) continues to rise

Therefore, rather than me making predictions, I thought it interesting to review the views of other commentators.

Jim also wrote another piece that nicely summarises Forrester’s predictions for 2018 which include:

  1. Banks not embracing Open Banking, but increasing partnerships with start-ups;
  2. Faster moves to embrace Digital Banking whilst losing focus on face-to-face communications; and
  3. Focus on back office transformation.

 

Saxo Bank’s Payments business sent me a press release with their top three predictions, which are:

  • The demise of traditional, slow, expensive cross border payments
  • Payment Service Providers (PSPs) will help merchants to expand internationally
  • Tech giants move into banking

Top 10 Companies of the Blockchain Industry in 2017 (Coin Telegraph), Rated: A

The total market capitalization of all the cryptocurrencies hit the $600 bln mark in December.

Source: Coin Telegraph

Coinbase is one of the top digital currency wallet and platform for exchange. Market capitalization: $2 bln (GDAX)

Ripple is a real-time gross settlement and currency exchange. Its main goal is to make an entire system devoted to money transferring. Market capitalization: $30 bln

India

P2P players blame lending limit for rising costs (Business Standard), Rated: AAA

Peer-to-peer lending (P2P) platforms have seen a rise in traffic as well as investor interest after registering themselves with the  But they argue the Rs 1-million limit placed on across all platforms is restrictive.

“With time, these limits are going to be relaxed by the  These have been imposed in order to avoid rapid growth that could lead to systemic risk,” said Ekmeet Singh, CEO, Lendbox.

Industry players want the to raise the limit for individual borrowers and remove the limit for institutional 

P2P lender AnyTimeLoan, prop-tech startup Foyr, tech firm Imanis raise funds (Deal Street Asia), Rated: A

While Spice Digital is investing up to $3.9 million in AnyTimeLoan, prop-tech startup Foyr has raised $3.8 million from JLL and others. Also, Wipro has put in an additional $2 million in US-based tech firm Imanis.

Asia

Crowdo Recaps 2017 Milestones: 3,500+ Projects Funded (Crowdfund Insider), Rated: A

Crowdo, a South East Asian online marketplace for P2P lending and crowdfunding, posted an infographic citing its 2017 milestones.

Canada

Meet GN Compass: The ICO Attempting to Disrupt Liquidity In The Lending Market (Equities.com), Rated: AAA

Collins: I left the railway, cashed out my pension and started my own lending company; Great North Capital Inc. We have successfully funded approximately 100 loans; primarily focusing on high risk clients. Based on my accumulative knowledge and experience in both banking and running Great North Capital, I started to develop the idea for a peer-to-peer lending solution where there is very limited risk to the investors (lenders) while making loans liquid. Also by having our own credit system for borrowers, they have the opportunity to improve their credit rating on the platform by making timely payments and having no delinquencies. At the same time, I was learning more about cryptocurrencies and blockchain technology. I quickly realized the huge potential of the blockchain and how it can solve the liquidity problem as well as securing an investor’s principal capital; which are the main issues of current peer-to-peer lending platforms. I got in touch with Jean Pierre Rukebesha who immediately liked the idea and decided to come on board as co-founder and CFO. Hence GN Compass (Great North Compass) was born.

Older Canadians still leery of fintech despite flood of services, RateHub finds (IT Business), Rated: A

Between last year’s official release of Android Pay, the increasing ubiquity of artificial intelligence (AI)-powered support platforms such as Sun Life’s Ella, and the ongoing digital transformation of Canada’s banks, Canadians have more opportunities than ever to integrate fintech into their lives – but according to financial comparison platform developer Ratehub.ca, the eldest among us aren’t taking advantage.

According to the company’s 2017 Digital Money Trends Report, released last month, fewer than half of baby boomers reported trusting robo-advisors, mobile payments, marketplace and peer-to-peer lenders, and rate comparison website, while in many cases millennials and generation X-ers were nearly twice as likely to do so.

Other findings from the report include:

  • Nearly twice as many millennials (44 per cent) and generation X-ers (42 per cent) reported trusting robo-advisors compared to boomers (23 per cent).
  • Nearly twice as many millennials (71 per cent) said they trust mobile payments compared to boomers (38 per cent). (62 per cent of generation X-ers said they trust mobile payments.)
  • Twice as many millennials (47 per cent) and generation X-ers (48 per cent) trust marketplace lenders compared to boomers (23 per cent).
  • 58 per cent of millennials and 53 per cent of generation X-ers trust peer-to-peer lenders, versus only 32 per cent of boomers.
  • 63 per cent of millennials and 60 per cent of generation X-ers trust rate comparison websites, versus 42 per cent of boomers.
Africa

Internet firm Opera bets on Kenyan to steer Africa Fintech (Business Daily), Rated: A

Internet browser company Opera has picked Eddie Ndichu to drive its Fintech strategy in Africa even as it prepares to set up an office in Nairobi.

Opera has said that it is investing Sh10.3 billion ($100 million) in Africa’s digital economy over the next two years and OPay is part of those investments.

In a statement Tuesday, Opera said that it had appointed Mr Ndichu as the managing director and vice president for Fintech in Africa.

Authors:

George Popescu
Allen Taylor