- Today’s main news: Samsung to power Bank of America’s biometrics authentication pilot. FCA to overhaul mortgage applications. Aegon partners with Funding Circle. Yu’E Bao reduces upper limit. Klarna rebrands. Australian FinTech intros fintech jobs platform.
- Today’s main analysis: Business lending dynamics in the U.S.
- Today’s thought-provoking articles: SoFi Mortgage review. NAFTA talks may include discussion on fintech. Alibaba cashing in on Japan’s e-payments market.
- Samsung to power BofA’s pilot on biometrics. AT: “It’s interesting that iris identification is more secure than fingerprint identification. I wonder why.”
- Business lending dynamics in the U.S. AT: “A very interesting analysis from Orchard on the types of commercial lending and where they dominate by region. A must-read.”
- SoFi Mortgage review. AT: “Take this with a grain of salt, it’s one person’s opinion, but I find it interesting that the technology provides results lightning fast, but as soon as a human gets involved, the process slows down–considerably.”
- Ting reduces customer churn with Affirm. AT: “Ironic, customers can buy a new smartphone on credit. Presumably, they’ll do this on their current smartphone. On another note, POS financing is heating up and I expect a huge competitive war for business among the players, which currently includes Affirm, Klarna, Amazon, Apple, and a few others jumping into the mix.”
- Fifth Third Bank enhances partnership with ApplePie Capital.
- States developing single regulatory structure for fintech.
- OppLoans rises to #219 on Inc. Magazine’s list of 500 fastest-growing companies.
- Alternative ways to get a down payment for a house.
- Former PayPal COO says cryptocurrency does what PayPal tried to do.
- Minnesota sues online lenders.
- Finance apps appealing to millennials.
- PeerStreet review.
- CB Insights interns predict the future on tech trends.
- FCA talking about overhauling mortgage applications.
- Aegon partners with Will regulation drive fintech M&AsFunding Circle.
- Nesta wants a cross-border equity crowdfunding alliance with China.
- Top 3 disruptive fintech technologies.
- Sunny wins fair customer treatment award.
- Will regulation drive fintech M&As?
- NAFTA discussion should include fintech.
- Euler Hermes Americas launches Surety in U.S., Canada, Brazil.
- The race to disrupt traditional banking.
- United States
- Samsung to Power Biometric Authentication Pilot for Bank of America (Finovate), Rated: AAA
- Business Lending Dynamics Across the United States (Orchard Platform), Rated: AAA
- SOFI MORTGAGE REVIEW: ONLINE PRE-QUALIFICATION, TRADITIONAL LENDING (The College Investor), Rated: AAA
- Ting Reduces Customer Churn with Payment Plans (DMN News), Rated: A
- Fifth Third Bank Enhances Its Partnership with ApplePie Capital (BusinessWire), Rated: A
- States developing single regulatory structure for fintech firms (American Banker), Rated: A
- FinTech Firm OppLoans Advances to #219 on Inc. Magazine’s 2017 List of 500 Fastest-Growing Companies (PR Newswire), Rated: A
- How to get down payment help if you don’t have rich parents (San Francisco Chronicle), Rated: A
- David Sacks: Cryptocurrency fulfills the ‘original vision’ we tried to build at PayPal (CNBC), Rated: A
- Minnesota Sues Online Lenders For Targeting Vulnerable Pensioners (CBS Local), Rated: A
- Finance Apps Have A Millennial Mobile Moment (Forbes), Rated: A
- PEERSTREET REVIEW: REAL ESTATE CROWDFUNDING VIA LOANS (The College Investor), Rated: A
- What College Students Taught Us About Predicting Future Tech Trends (CB Insights), Rated: A
- United Kingdom
- FCA in talks to overhaul mortgage applications (FT Adviser), Rated: AAA
- Aegon gives leg up to UK small businesses through online lending platform (Aegon), Rated: AAA
- Nesta Promotes Cross Border Equity Crowdfunding Alliance with China (Crowdfund Insider), Rated: A
- Juniper Research: Top 10 Disruptive Technologies in Fintech 2017 (BusinessWire), Rated: A
- Elevate’s UK Loan Product Sunny Named 2017 ‘Treating Customers Fairly Champion’ (BusinessWire), Rated: A
- Will new regulation drive fintech M&As? (Insurance Business Mag), Rated: A
- The upper limit on Yu’E Bao account exists in name only ! (Xing Ping She), Rated: AAA
- China’s global distribution of financial technology and then upgrade: Jiu Fu Group released international strategy (GMW.cn), Rated: A
- European Union
- Klarna just unveiled a quirky new look and logo – designed to catch millennials’ attention (Business Insider), Rated: AAA
- NAFTA talks must include discussion on fintech: Mexican negotiator (Reuters), Rated: AAA
- Euler Hermes Americas launches Surety in the U.S., Canada, Brazil (4-traders), Rated: A
- The Race Is On To Disrupt Traditional Banking (Forbes), Rated: A
- Australia/New Zealand
- Australian FinTech opens fintech jobs platform (Finextra), Rated: AAA
- Aussie small business lending platform secures AU$ 5million in Series-A funding (BizEdge), Rated: A
- Alibaba to cash in on Japan’s nascent e-payment market (Asian Review), Rated: AAA
- CIBC Scraps President’s Choice Partnership in Online Shift (Bloomberg), Rated: AAA
- SelectCore Signs Licensing Agreement For Peer to Peer Lending With the Option to Purchase Source Code (GlobeNewswire), Rated: A
Samsung to Power Biometric Authentication Pilot for Bank of America (Finovate), Rated: AAA
Enterprise mobility and information technology company Samsung will launch a pilot program that enables Bank of America customers to log into their mobile banking app by taking a picture of their eye.
According to a report from American Banker’s Penny Crosman, half of BofA’s customers are using fingerprint authentication to log into their app, a feature the bank began offering in 2015. The other half of users login using their ID and password because they are either traditionalists, or hesitant to try the new login method for fear of a security breach.
Samsung debuted the iris recognition technology in March during its Unpackedevent. The company asserts that the technology is more secure than fingerprint scanning.
Business Lending Dynamics Across the United States (Orchard Platform), Rated: AAA
While consumer lenders still get the lion’s share of attention in the online lending universe, the reality is that there exists a great variety of non-bank fintech lenders and specialty finance companies who extend credit to businesses, and we are fortunate to work with so many of them.
As we can see in the graph above, our dataset contains the most data on business in Retail, Construction, and Health Care. Next, let’s see how our data are distributed geographically. As we can see, our dominant states are California, Florida, Texas, and New York.
As we can see, construction lending seems to have the highest indexed concentration in places such as Florida, Texas, and Colorado. Lending to retailers seems to dominate the Northeast. Healthcare lending is concentrated most highly in Florida.
SOFI MORTGAGE REVIEW: ONLINE PRE-QUALIFICATION, TRADITIONAL LENDING (The College Investor), Rated: AAA
Here’s my review of SoFi Mortgage, and how they handled the process of getting pre-approved and starting the lending process. I strongly recommend everyone shopping for a mortgage compare multiple lenders. Using a service like LendingTree can make that really easy.
SoFi Mortgage makes the process of applying for a mortgage online really easy.
After filling out the online application, we received our pre-qualification letter via email in minutes.
The Rest Of The Process Was Not As Smooth
Sadly, we had to wait too long to get into contact with a loan officer from SoFi to proceed with them. After we submitted our information, and I uploaded all the documents, it took about 3 days before someone from SoFi reached out to even work on the pre-approval.
Ting Reduces Customer Churn with Payment Plans (DMN News), Rated: A
Seventy-seven percent of Americans have a smartphone, according to Pew Research Center’s November 2016 data, and this figure has more than doubled since 2011.
As a result, many carriers and smartphone brands have started offering customers monthly payment options. After listening to its own customers, Ting – a mobile network and service provider with a quarter of million U.S. customers – decided to do the same and implemented financing solution Affirm.
Customers can visit Ting.com and shop for a new smartphone. Once they select their device, they’ll be asked to either sign into their existing Ting account or create a new account if they’re a new customer. The new account form asks customers to provide their name, email address, and phone number and invites them to opt in for Ting’s email and mobile notifications. They’ll also be asked to provide their address, so that Ting can verify if the brand services that area. When it comes to purchasing the device, new and existing customers can pay for the phone in full upfront via a credit card or Amazon Pay, or they can apply to pay monthly payments via Affirm. Then, customers will enter their shipping information, confirm their order, and complete the Ting portion of the checkout process.
Fifth Third Bank Enhances Its Partnership with ApplePie Capital (BusinessWire), Rated: A
The agreement enables Fifth Third to purchase loans originated through ApplePie Capital’s franchise loan marketplace, which provides franchise brands and their franchisees with a diverse range of financing options to efficiently grow their respective businesses. In addition, Fifth Third has also joined ApplePie Capital’s growing SBA lender network, and will receive referrals to SBA loan opportunities.
States developing single regulatory structure for fintech firms (American Banker), Rated: A
Faced with the prospect of a new federal fintech charter, state agencies are considering drastic new steps to streamline regulation across state lines.
FinTech Firm OppLoans Advances to #219 on Inc. Magazine’s 2017 List of 500 Fastest-Growing Companies (PR Newswire), Rated: A
OppLoans, the country’s leading socially responsible online lender, has achieved the rank of #219 on Inc. Magazine’s 2017 list of the 500 fastest-growing privately owned companies.
In the past year, OppLoans has launched major subprime borrower advocacy initiatives like OppU, a free online personal finance curriculum. The firm has also made enterprise-level technology improvements that help provide the fastest possible application and funding process for customers. Additionally, OppLoans has expanded their C-Suite with deeply experienced, innovative and highly respected industry professionals in the roles of COO, CFO, and VP of Business Development and Partnerships.
Currently rated 4.8 out of 5 stars on Google and LendingTree, OppLoans provides financial opportunity to the underbanked population, through socially responsible products and an unwavering commitment to customer service.
How to get down payment help if you don’t have rich parents (San Francisco Chronicle), Rated: A
Wannabe buyers who don’t have parents to help out have several options. They can borrow more than 80 percent of the purchase price with a first mortgage and pay private mortgage insurance. They can borrow some of the down payment with a home equity loan or line of credit.
Or they can go with a lesser-known option: giving up part of their future appreciation in exchange for down payment help from a government or private-sector program.
San Francisco’s Down Payment Assistance Program for market-rate homes is an example of government aid. First-time buyers can get up to $375,000 toward a home or condo in the city, but funds are limited and there are income restrictions. The application deadline this year is Aug. 21.
Unison, formerly known as First Rex, offers a private-sector alternative. There are no income restrictions and buyers don’t have to be first-timers, but they must live in the home, qualify for a loan and be in one of the 12 states (including California) where Unison operates.
In a typical Unison HomeBuyer deal, the buyer puts down 10 percent of the purchase price, gets 10 percent down from Unison and borrows 80 percent with a first mortgage, thereby avoiding private mortgage insurance. In exchange, Unison shares in 35 percent of any future appreciation or depreciation.
David Sacks: Cryptocurrency fulfills the ‘original vision’ we tried to build at PayPal (CNBC), Rated: A
David Sacks: After PayPal I never thought I would get interested in payments again. But bitcoin is fulfilling PayPal’s original vision to create “the new world currency.”
A payment is just a credit to one account and a debit to another. That’s a database entry. We believed that, if we could get enough people to participate, money would never need to leave the system. PayPal could become the database of money.
But cryptocurrencies like bitcoin are now fulfilling that original vision. They are doing it in a decentralized way (with a decentralized database called the blockchain) whereas PayPal tried to do it in a centralized way.
Minnesota Sues Online Lenders For Targeting Vulnerable Pensioners (CBS Local), Rated: A
Looking back in disgust, Schmelz now refers to the company as “snakes in the grass.” He’d soon learn he was charged 200 percent interest, and owed $27,000 for the full repayment, or 10 times his original principal.
He wasn’t alone. It is estimated that at least 120 Minnesota seniors and veterans have signed on with FIP and another lender: Future Income Payments, LLC, out of Delaware.
On Wednesday, Swanson held a news conference to announce that the state has filed suit against the two companies in Hennepin County District Court. The state’s lawsuit alleges that neither company is registered to do business in Minnesota, or licensed to make loans.
Finance Apps Have A Millennial Mobile Moment (Forbes), Rated: A
Last week’s tie-up between Acorns – the fastest-growing micro-investing app in the U.S. with over 2 million investment accounts – and Clarity Money, the rapidly growing personal finance app with 450,000 users founded by Adam Dell, brother of Dell Technologies CEO Michael Dell, is the latest in a raft of announcements by fintech startups determined to redefine personal finance.
Revolut, the app-based digital only bank, announced a partnership with pension manager PensionBee, allowing Millennials to combine their pensions in one plan, adding more pensions as they switch jobs. Starling Bank in the U.K. became the first in the country to partner with Transferwise, giving Starling customers direct, in-app access to TransferWise’s money transfer services. Stock trading app Robinhood, which already teamed up with StockTwits’ real-time social network for the financial and investing community, added TradeIt to its roster of partners, ensuring users can view brokerage accounts, place trades, and fund their account without exiting the experience, no matter which broker they use.
PEERSTREET REVIEW: REAL ESTATE CROWDFUNDING VIA LOANS (The College Investor), Rated: A
Even today, hard money lending is a fractured and inefficient market. PeerStreet aims to change that. PeerStreet is the first online platform that helps investors to invest in hard money loans.
A typical loan on PeerStreet has a maturity around one year. Over the course of the last several years, PeerStreet’s entire portfolio of loans has earned 7-12% annually after the investment fees (of up to 1%).
PeerStreet also encourages investors to maintain a diverse portfolio of loans. With a $1,000 per loan minimum, most investors can diversify into a nationwide marketplace without too much difficulty. In fact, PeerStreet even makes it easy to invest automatically. Investors just input investment settings, and PeerStreet matches them with loan investment opportunities.
Finally, all loans on PeerStreet are backed by a hard asset (real estate), and the loans typically have a great loan-to-value ratio. In general, investors will find LTVs between 60-70% of the property’s value. The max LTV on the PeerStreet platform is 75%. Most people would call this a low risk loan.
Worst Parts Of PeerStreet
First, to invest on PeerStreet, you need to be an accredited investor.
Another drawback to PeerStreet is that it’s hard for an outsider to estimate risk. Real estate is highly cyclical. We’re in an expansionary real estate market. That means that default risk on real estate loans is low right now. However, at some point in the future, borrowers will start to default on the PeerStreet loans. Investors have no expectations for how much they can recoup when a deal goes belly-up.
It’s my opinion that PeerStreet oversells the safety of their investments.
Finally, PeerStreet is an expensive platform. PeerStreet charges a servicing fee of 0.25-1% on every loan that you invest in. That means that if your loan yields 10%, you’ll receive a 9% interest rate.
What College Students Taught Us About Predicting Future Tech Trends (CB Insights), Rated: A
The CB Insights research team welcomed three interns this summer – Kristen Tilley, Jimmy Xue, and Alyce Ge – who used the CB Insights platform to uncover and analyze early-stage trends in hot sectors.
Emerging Technology Trends: 2017 Intern Presentation from CB Insights
FCA in talks to overhaul mortgage applications (FT Adviser), Rated: AAA
The founder of online mortgage broker Trussle is in talks with the regulator about creating an industry standard for mortgage documents.
Ishaan Mahli, who founded the online broker in 2015, believes standardisation would lead to greater efficiency during the application process and better outcomes for the borrower, while eliminating biases towards lenders with a more simple process.
The plan would involve standardising the amount of time for which documents are required for certain cases – for example, three months’ payslips – as well as the document format.
It could also involve harnessing Open Banking technology – an online communication standard that will enable the secure sharing of customer information with third parties such as lenders.
Aegon gives leg up to UK small businesses through online lending platform (Aegon), Rated: AAA
Aegon has entered a strategic partnership with online lending platform, Funding Circle. In the first year, the move will provide a cash boost for 2,600 small- and medium-sized companies, and create a potential 6,400 UK jobs.
The four-year strategic cooperation between Aegon and Funding Circle(external link) marks the first time that a Dutch financial service provider of its scale will provide direct loans to small businesses online.
Nesta Promotes Cross Border Equity Crowdfunding Alliance with China (Crowdfund Insider), Rated: A
China is the largest internet finance market in the world estimated at over $100 billion for 2015. Their peer to peer lending sector is absolutely enormous while equity crowdfunding is relatively small at around $829 million in 2015.
Nesta, the UK based non-profit foundation that focuses on innovation, believes the UK should work towards creating a cross border equity crowdfunding alliance with China.
Nesta outlines recommendations for the two countries to cooperate more closely when it comes to crowdfunding:
- Create a China-UK equity crowdfunding alliance – Boost communication between the two countries to compare best practices. Perhaps the UK Crowdfunding Association and the National Internet Finance Association could become the first bridge.
- Regulatory Knowledge Sharing – Some of this has already occurred but knowledge sharing between the two countries when it comes to rules guiding internet finance is mutually beneficial.
- Foster a data framework and establish standards – Having good data is a catalyst for transparency. Nesta believes this could be a first step in a global initiative.
- Government Backed Pilot programs – Have UK issuers raise money in the UK and vice versa. Why not? As long as the diligence is there and the structure is approved Nesta sees this as part of a “China-UK Fintech Bridge.”
Juniper Research: Top 10 Disruptive Technologies in Fintech 2017 (BusinessWire), Rated: A
- PSD2 (Payment Services Directive 2) & Open APIs (Application Programming Interfaces)
Elevate’s UK Loan Product Sunny Named 2017 ‘Treating Customers Fairly Champion’ (BusinessWire), Rated: A
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced its UK loan product, Sunny was recently crowned the “Treating Customers Fairly Champion 2017” at the 2017 Consumer Credit Awards in Mayfair, London.
Run by Smart Money People, the Consumer Credit Awards are the largest consumer-voted awards program in the UK consumer credit industry. More than 1,400 Sunny customers showed their appreciation of Sunny’s customer-centric approach by voting.
Will new regulation drive fintech M&As? (Insurance Business Mag), Rated: A
Earlier this month we told you how much is being invested in financial technology in the UK. Now a new report says big names in technology could be snatching up fintech start-ups in a possible buying binge during 2018.
A report by CNBC cited Daniel Döderlein, chief executive of Norwegian fintech start-up Auka, who believes the likes of IBM and Capgemini would likely be interested in mergers and acquisitions amid a surge in fintechs.
The upper limit on Yu’E Bao account exists in name only ! (Xing Ping She), Rated: AAA
On 14th August, the capital limit on Yu’E Bao individual account was reduced from $37,450 to $14,980. However, the limitation was found useless！There are two methods to bypass the capital limitation.
Firstly, you can buy monetary funds in the ant wealth, choosing the payment of bank cards. The money will automatically return to the Yu’E Bao account after redemption, no matter if the limitation has been reached or not.
Secondly, you can immediately cancel the transaction after buying a product such as a money fund. In this case, the money would not return to the bank card, but going to the Yu’E Bao account.
China’s global distribution of financial technology and then upgrade: Jiu Fu Group released international strategy (GMW.cn), Rated: A
August 16, “Jiu from this rich global” Jiufu international strategy release and Jiufu Ben Ben APP conference held in Shenzhen, in addition to the official release of Hong Kong, US stocks and other global market intelligence investment APP Jiufu Ben Ben, the conference also announced The future of Jiufu international strategy: Jiu Fu in the United States Silicon Valley investment in the chain chain company Wyre, and will set up AI laboratories; Southeast Asia, has conducted a thorough investigation, will be set up in Singapore, Southeast Asia headquarters. Combined with Hong Kong more than 30 years of Jiufu Securities, in order to form the United States Silicon Valley, Southeast Asia, Hong Kong “Trinity” overseas financial services system.
Klarna just unveiled a quirky new look and logo – designed to catch millennials’ attention (Business Insider), Rated: AAA
Now the company has unveiled an entirely new look to go along with the pivot towards B2C customers – complete with jelly cakes, afghan dogs and smashed ice cream cones.
The new look aims to convey the feeling of ‘smoooth’ payments (worthy of three o’s).
NAFTA talks must include discussion on fintech: Mexican negotiator (Reuters), Rated: AAA
Talks to renegotiate the North American Free Trade Agreement (NAFTA) must include a discussion of new financial services, a Mexican negotiator said on Wednesday, singling out so-called fintech companies rapidly gaining ground in the region.
Talks to renegotiate the North American Free Trade Agreement (NAFTA) must include a discussion of new financial services, a Mexican negotiator said on Wednesday, singling out so-called fintech companies rapidly gaining ground in the region.
Euler Hermes Americas launches Surety in the U.S., Canada, Brazil (4-traders), Rated: A
Locally in the U.S., Canada and Brazil, Euler Hermes will partner with specialized surety agents and brokers and will focus on contract and commercial surety. Contract surety bonds are a common requirement in the construction industry, where Euler Hermes offers bid, payment, performance, supply and maintenance bonds for mid to large contractors, while commercial surety bonds may be required by local and state law to comply with state or federal regulations.
The Race Is On To Disrupt Traditional Banking (Forbes), Rated: A
Global fintech adoption has risen on average from 16% in 2015 to 33% in 2017.
Credit Suisse, for example, is well respected within the IT sector for being ahead of the curve in implementing digital transformation. The bank had started its revamp process out of Asia Pacific. According to Marco Abele, Credit Suisse’s digital transformation expert, the bank converted an old data center in Singapore into an innovation hub.
Citigroup, Banco Santander, and Goldman Sachs have completed some deals into fintech start-ups over the last five quarters. Another example would be BNP Paribas. The bank is planning to double the investment in technology over the next three years to adapt to changing consumer behavior and cut costs.
According to PWC almost 50% of financial services firms around the world plan to acquire fintech start-ups in the three to five years. BNP Paribas recently agreed to buy French digital bank Compte-Nickel for 200 million euros ($213 million), which was the biggest fintech acquisition ever in France according to a Bloomberg news report.
Australian FinTech opens fintech jobs platform (Finextra), Rated: AAA
The team behind the highly successful Australian FinTech website have soft-launched their FinTech employment marketplace platform, Australian FinTech Jobs.
AustralianFinTechJobs.com.au is Australia’s only dedicated platform for FinTech companies and Recruiters to promote FinTech, financial technology, financial services, banking, legal and IT employment opportunities in Australia.
Aussie small business lending platform secures AU$ 5million in Series-A funding (BizEdge), Rated: A
TruePillars, an online marketplace lender allowing everyday Australians to fund loans to small businesses, today announced it has raised a total of AU$5 million in a Series-A funding round.
The funding round was led by a long-term Melbourne-based private investor and includes both equity and commitments by shareholders to fund loans to Australian businesses on the TruePillars platform.
Alibaba to cash in on Japan’s nascent e-payment market (Asian Review), Rated: AAA
China’s e-commerce leader Alibaba Group Holding will bring a version of its hit smartphone-based payment platform to Japan as early as next spring, hoping the simple technology will convince many cash-reliant shoppers here to go digital.
The Japanese unit of Ant Financial Services Group, the internet giant’s financial arm, will offer a version of the Alipay digital payment system tailored for the Japanese market under a new brand. Shoppers will be able to load money into or link a bank account with a dedicated app on their smartphone, and scan QR codes issued by merchants to make a payment. Merchants can also scan codes displayed on a user’s phone to the same effect.
CIBC Scraps President’s Choice Partnership in Online Shift (Bloomberg), Rated: AAA
Simplii Financial will offer no-fee banking, mortgages and loans online and by phone, according to Mike Boluch, CIBC’s executive vice president of direct banking, innovation and payments. CIBC expects to take C$100 million ($78.4 million) of fees and charges before tax in the quarter ending Oct. 31 related to the transaction, the Toronto-based bank said Wednesday in a statement.
SelectCore Signs Licensing Agreement For Peer to Peer Lending With the Option to Purchase Source Code (GlobeNewswire), Rated: A
SelectCore will be rebranded as Fintech Select in an effort to continue expanding its financial payment services to its customers. The Company is pleased to confirm that it has signed an Agreement to license software as a service (SAAS) to enable peer-to-peer lending, including the option to outright purchase the source code.
Besides micro loans, the Company is also exploring other loan offerings that can be interconnected into the P2P platform from institutional entities and or private individuals. Our pre-paid card program will play a critical role within this new P2P platform, as it will allow borrowers to receive funds directly to their cards and/or mobile wallets.