Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

News Comments

United States

United Kingdom

European Union

International

Australia

India

Asia

Canada

Africa

News Summary

United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

International P2P Lending Volumes December 2017 (P2P-Banking), Rated: AAA

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor

Thursday January 4 2018 Daily News Digest

most funded fintech segments

News Comments Today’s main news: U.S. blocks Ant Financial from buying MoneyGram. Victory Park exits Prosper. Money360 closes $500M in CRE loans. Prosper appoints new marketing chief. Indian startup funding at 3-month low. LaLa World Global to launch token sale. Today’s main analysis: International P2P lending volumes for December 2017. Today’s thought-provoking articles: LendingClub to turn around in 2018. Top hedge […]

most funded fintech segments

News Comments

United States

United Kingdom

European Union

International

Australia

India

Asia

Canada

Africa

News Summary

United States

The U.S. Is Blocking a Chinese Fintech Giant from Buying MoneyGram (Technology Review), Rated: AAA

American authorities have decided that Alibaba’s digital payment firm, Ant Financial, won’t be allowed to acquire the cash transfer company Moneygram.

Money360 Passes $ 500 Million in Commercial Real Estate Loans Closed (GlobeNewswire), Rated: AAA

Money360, a technology-enabled direct lender specializing in commercial real estate (CRE) loans, today announced it has surpassed half a billion dollars in loans closed since inception. This includes $357 million in loans closed for the year 2017.  The milestone comes on the heels of other recent successes for Money360, including the initiation of a partnership with Ten-X, the nation’s leading online real estate transaction marketplace, in which Money360 works to accelerate commercial real estate transactions for buyers, sellers and brokers by offering pre-approved financing for qualified properties and buyers.

Money360 specializes in bridge and permanent loans of $1 million to $20 million. Recent loans closed during the period include:

  • A $7.8 million bridge loan for an office property in Evansville, Indiana, brought to Money360 by Benjamin Kadish at Maverick Capital
  • A $7.5 million bridge loan for a full-service hotel in Cromwell, Connecticut, brought to Money360 by Rushi Shah at Conlon Capital
  • A $6.8 million bridge loan for a nationwide portfolio of Pier 1 retail properties, brought to Money360 by Al Dannatt at Commercial Resource Capital
  • A $6.8 million bridge loan for a mixed-use center in Charleston, South Carolina, brought to Money360 by Dominick Scorzo at Ivenhoe Capital Advisors
  • A $4.4 million permanent loan for a retail center in Mount Olive, New Jersey, brought to Money360 through our partnership with Ten-X
  • A $4 million bridge loan for an office building in Amarillo, Texas, brought to Money360 by Steve States at States Mortgage
  • A $3.2 million bridge loan for a retail center in Santa Fe, New Mexico, brought to Money360 by Martin Chera at Express Mortgage

In addition to record loan generation activity and new partnerships, Money360 has taken a number of notable steps in 2017 to further position the company as a leader in commercial real estate and alternative investing, including:

  • Hired new top talent to support company growth.
  • Named a top five company in the real estate fintech industry by Deloitte based on total investment dollars received.
  • Gained backing and support from Ron Suber. Mr. Suber not only invested in Money360, but also joined the firm as a strategic advisor.

M360 Advisors surpasses $300M in Assets Under Management

Finally, Money360 announced that its affiliate, M360 Advisors (“M360”), surpassed $300 million in assets under management.

3 Turnaround Stocks to Consider in 2018 (The Motley Fool), Rated: AAA

One name that has been sold off very recently is Lending Club (NYSE:LC), the leader in the relatively new industry of FinTech personal lending.

Lending Club’s fee-based model depends on increasing volumes, so growth-oriented investors were likely scared off by the reduced targets.

However, I think the hate has gone too far. Lending Club is the largest and only publicly traded loan marketplace, which has made it the go-to for institutional investors looking for exposure to consumer loans. By tightening credit, Lending Club has demonstrated a long-term commitment to sound underwriting, which should deepen its relationships with these important investors.

And while Lending Club did reduce its near-term guidance, it still guided for roughly 20% revenue growth and increasing profitability next year, which isn’t too shabby. The market opportunity in U.S. credit card consolidation — Lending Club’s core business (though not its the only one) — is still large, at $300-$350 billion, which means Lending Club’s current $11.5 billion loans outstanding only amounts to about 3-4% of this market.

TOP HEDGE FUND INDUSTRY TRENDS FOR 2018 (All About Alpha), Rated: AAA

Despite the plethora of negative articles about the hedge fund industry, hedge fund assets have reached an all-time high 5 quarters in a row. Across the hedge fund investor landscape, we see a significant improvement in sentiment towards the industry. We forecast that industry assets will grow by 5.5% over the next 12 months.

Strategies that will gain assets include:

  • Quant
  • Asia long/short equity  – The IMF predicts that 2/3 of world growth will come from Asia over the next 5 years. Less than 5% of Hedge Fund industry assets are invested with Asia based managers.
  • Reinsurance
  • Higher turnover fixed income
  • Strategies that blur the lines between private equity and hedge funds – Most of these are private lending/specialty financing.

Strategies that will lose assets include:

  • Traditional long/short equity focusing on the developed markets.
  • High beta fixed income managers.

Arms race for Alpha

The industry is experiencing an information arms race with respect to how much information can be gathered and how quickly it can be processed.  Information advantages are often short-lived, and many managers are investing in a host of new technologies such as quantitative analytics, alternative data sources and Artificial Intelligence in an attempt to enhance their decision making and improve traditional investment processes. Information and technology are being used to increase efficiency and accuracy in sourcing information, researching ideas and executing investments.

Increase in hedge funds shutting down

The hedge fund industry remains over saturated with an estimated 15,000 funds. We believe approximately 90% of all hedge funds do not justify their fees, as evidenced by the mediocre returns of hedge fund indices. Fed-up with poor performance, investors are increasingly more likely to redeem from underperforming managers leading to an increase in fund closures.

Bullish on Cryptocurrency industry despite potentially one of the largest bubbles in capital markets history

Cryptocurrency is in its infancy stage and will continue to experience tremendous innovation, evolution and exponential growth over the next decade. There are already more than 120 hedge funds focused on cryptocurrencies and block chain technology. We expect this number to increase 2 to 3 times in 2018.

Prosper Marketplace Appoints Former Bank of America Executive Justine Metz Head of Marketing (BusinessWire), Rated: AAA

Prosper Marketplace today announced it has appointed Justine Metz as Executive Vice President of Marketing.

Metz brings more than 25 years of marketing experience and joins Prosper from SRS Acquiom, a financial firm that specializes with M&A transactions. Prior to that, Justine served as Head of Global Wealth and Investment Management Marketing and Sales Support at Bank of America, where she was responsible for driving growth, profitability and loyalty for Bank of America’s Wealth Management business, Merrill Lynch and US Trust. She has also held senior positions at Fidelity Investments, Morgan Stanley and GE Capital (GEFA).

MoneyLion Secures $ 42 Million Investment to Accelerate Growth (BusinessWire), Rated: A

MoneyLion, the digital personal finance platform for the financial middle class, announced today it has secured a $42 million Series B funding, led by Edison Partners. Existing investors FinTech Collective and Grupo SURA, as well as new investors Greenspring Associates and Danhua Capital also participated in the round. All told, MoneyLion has now raised $67 million in equity financing.

The latest investment follows rapid growth of the MoneyLion platform, which has surpassed 1.5 million users and has experienced 178% compounded growth in revenue since 2015. The company, which is cash flow positive, plans on using the growth capital to increase investment in technology and continue to expand its product line.

How Tech Sends Clients Running Back to Human FAs (Financial Advisor IQ), Rated: A

While investors have been using digital tools as an entry into financial planning, they’re simply inundated by too much data and eventually turn to human advisors for help, Cerulli Associates says, according to the publication.

Nonetheless, investors’ appetite for digital advice isn’t subsiding: digital platforms were expected to reach $220 billion in client assets by the end 2017 and more than $600 billion by the end of 2022, according to the report cited by FA magazine.

 

Celsius to replace traditional future exchanges like CME and CBOT with crypto lenders (LeapRate), Rated: A

Celsius, a blockchain powered lending and borrowing platform, just announced that it aims to replace big banks and futures exchanges, like the CME and CBOT, with crypto coin holders who will earn returns through lending. Using its platform, which will launch in Q1 2018, Celsius members can easily borrow coins at significantly reduced rates compared to traditional financial institutions, while lenders can earn automatic interest by holding coins in the Celsius Wallet.

Dubbed as “The Wallet That Pays Back”, registrants who deposit coins into the Celsius Wallet will receive up to 7% per year on loaned coins.

Celsius plans to offer a variety of powerful financial tools for crypto asset holders, including:

  • Peer-to-Peer Lending 
  • Peer-to-Peer Borrowing 
  • Crypto Shorting: Network members will be able to short crypto assets by borrowing coins from lenders almost instantaneously.
  • Global Credit 
  • Capital Protection: Celsius will provide protection for all coins, by collecting a portion of the principal interest amount from borrowers.

Crypto P2P lender Celsius readies for launch (P2P Finance News), Rated: B

CELSIUS, an Ethereum-based peer-to-peer lending platform, is set to launch during this quarter.

Lenders will receive up to seven per cent year by depositing coins into the Celsius Wallet that are lent out to the platform’s network of members, according to LeapRate.com.

2018’s Best Credit Cards & $ 7.4B in Extra Interest Following Fed Hikes (WalletHub Email), Rated: A

With millions of people making a financially themed resolution for 2018 and recent Fed rate hikes expected to cost credit card users an extra  Best For… Card Name Travel Rewards

The Mastermind Behind Chase’s Industry-Changing Sapphire Reserve Card Sets Her Sights on Banking (Bloomberg), Rated: A

Pam Codispoti had a dilemma. She’d been brought on by JPMorgan Chase & Co.to develop a credit card for affluent millennials in 2014—a time when no one thought the group wanted credit cards.

Chase’s response was the Sapphire Reserve. The $450-a-year card came with a sign-up bonus of 100,000 reward points and allowed holders to use them at a wide variety of hotels, airlines, restaurants, and more. Holders were also rewarded extra for spending in those categories, and even given a $300 annual travel credit.

CFPB 2018 outlook: More deregulation, more upheaval (American Banker), Rated: A

The first 11 months alone under former CFPB Director Richard Cordray saw a steady stream of enforcement actions and regulatory policies that by itself would make the bureau’s year more eventful than that of other agencies. That span also saw the Trump administration’s challenges to Cordray’s leadership, and the congressional repeal of the CFPB arbitration rule.

Indiana lawmaker files bill to cap payday loan interest rates at 36 percent (rtv6), Rated: A

State Sen. Greg Walker (R-Columbus) filed on Tuesday the first of its kind legislation that would cap small loan finance charges at 36 percent.

Currently, the cap for payday loans in Indiana is 391 percent, according to Walker.

Indiana ranks 44th, among the worst in the nation, when it comes to bankruptcy and Hoosiers and their communities lose about $70 million a year in payday loan fees, according to the Indiana Institute for Working Families.

If in case you have debt, keep away from this massive mistake many debtors make (Kaplan Herald), Rated: B

In June, cumulative U.S. household debt reached $12.84 trillion, a $114 billion increase from the first quarter.

Four 4 in 5 Americans are in the red, according to data from a provided exclusively to CNBC.

United Kingdom

Victory Park Capital fund exits Prosper loans (AltFi), Rated: AAA

The £336.8m VPC Specialty Lending fund has sold its total holding in Prosper marketplace loans, representing 4.1 per cent of the Company’s net asset value [NAV].

Valuing Funding Circle (Financial Times), Rated: AAA

Back in 2014, Lending Club and OnDeck were riding high. The American startups led a pack of online lending companies “disrupting” consumer and business loans respectively.

The hype reached fever-pitched as they floated within weeks of each other. Lending Club was valued at $5.4bn. OnDeck at $1.3bn.

So, hats off to Funding Circle, the British online lender that is preparing to follow in the footsteps of its struggling peers across the Atlantic.

Making the most of your money (P2P Finance News), Rated: AAA

AS INFLATION grows ahead of expectations, far too many savers are seeing the value of their hard-earned cash decline.

Recent research from the Financial Conduct Authority (FCA) found that just under a third (30 per cent) of UK adults would not be able to cope if their mortgage repayments increased by £50 a month.

With the recent 0.25 per cent rate rise, it won’t be long before these households feel the squeeze.

The rise of P2P

UK savers and investors are also willing to back British businesses. Six in 10 (63 per cent) would be willing to lend to a business. Over a quarter (26 per cent) would lend to a business that could use their assets as security. A quarter (25 per cent) would lend to an established business that has been operating for a few years and 11 per cent would lend to a start-up business.

Click here for more information on ArchOver.

Folk2Folk Announces New CEO as Giles Cross Takes Over Leadership Role P2P Lending Platform (Crowdfund Insider), Rated: A

Folk2Folk, a unique peer to peer lending platform that combines physical locations with an online platform matching investors with small business loans, has announced the appointment of Giles Cross  Chief Executive Officer (CEO).

Cross joined Folk2Folk as Chief Marketing Officer in June 2017.

 

Property Lender Financed Around 1,800 UK Homes in 2017 (Landlord News), Rated: A

LendInvest, a leading specialist property lender, lent £500m to help professional property investors, developers and landlords buy, build or renovate around 1,800 UK homes during 2017.

This marks a 33% increase on the previous year’s £375m lending record.

LendInvest has now lent a total of over £1.2 billion to property investors and developers.

High touch meets high tech (P2P Finance News), Rated: A

FAIRNESS IS pivotal to Newable Lending’s ethos when it comes to lending – and it’s not afraid to nail its colours to the mast. The peer-to-peer business lender is a member of Responsible Finance, a trade body working to increase access to fair finance.

FCA financial advice director steps down (Mortgage Strategy), Rated: B

FCA director of life insurance and financial advice Linda Woodall has stepped down from the regulator.

The regulator understands she intends to retire. A replacement has yet to be appointed.

European Union

New EU financial market rules off to smooth start: Watchdog (Khaleej Times), Rated: AAA

The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

Rocky start for Europe’s financial market revamp (Handelsblatt Global), Rated: A

Even after a year-long delay, precious few experts fully understand the Markets in Financial Instruments Directive II, Europe’s biggest financial markets reform in almost a decade.

Among other key changes, and in a belated nod to technological progress, telephone-based trading will be replaced with electronic platforms in bonds and off-exchange derivatives. And consumers should immediately see financial advice standards rise.

Analysts estimate that MiFid II will cost $6 billion (€5 billion) to implement in the first five years.

Exclusive Interview with Fast Invest CEO Simona Vaitkune (ChipIn), Rated: A

We recently sat down with the CEO of Fast Invest, Simona Vaitkune to have a chat with her about the project as well as finding out her thoughts and insights.

Tell us about how you came up with the idea of Fast Invest. Did you face a problem within the industry or do you think there is a gap in the market for Fast Invest to fill?

Everything started when I wanted not only to save money but to earn from my savings, to get passive income. I began to search for a platform which would fit me, but I could not find anything because I wanted to do it easily and safely without investing a lot of money.

What do you think is the biggest problem Fast Invest will solve and why is the problem important to solve?

Fast Invest is solving a problem that I mentioned before – complexity and large entry point of investment platforms. With Fast Invest, you can start investing from 1 Euro, Zloty or Pound. On top of that, you do not need to worry about your money, because we offer BuyBack and default guarantees.

International

International P2P Lending Volumes December 2017 (P2P-Banking), Rated: AAA

Mintos finished a remarkable month fueled by the cashback promotion. The total volume for the reported marketplaces adds up to 582 million Euro.

This month I added PeerBerryLook&Fin and MyTripleA.

Source: P2P-Banking

Setting the Tone for 2018 in the Most Important Charts of 2017 (Let’s Talk Payments), Rated: AAA

In 2017, lending startups around the world scored almost $4 billion in total funding, followed by $3.55 billion gathered by InsurTech startups, $3.24 billion invested in payments, and, of course, $850 million pocketed by startups building blockchain-based solutions.

Keep shoppers, the planet, and your profits happy by allowing in-store returns (Biz Report), Rated: A

Reverse-logistics firm Optoro found that nearly half (45%) of people will begin sending back unwanted items no sooner than the ripped up wrapping paper has been balled and binned. UPS recently forecast that returns would peak at 1.4 million packages on Wednesday 3 January, 2018, up 8% on last year and the fourth consecutive yearly increase. UPS said consumers returned more than 1 million packages a day to retailers last month.

According to Optoro’s report, the majority of returns (91%) will take place in-store. While total returns account for more than $351 billion in lost sales for U.S. retailers (Appriss Retail) the fact that most of those returns are happening in store is good news. More than half (57%) of shoppers who return items to a physical store make additional purchases during the process.

Could blockchains replace banks in real estate lending? (American Banker), Rated: A

The startup Propy recently sold an apartment in the Ukraine through its blockchain, and in the last week of December it began letting Californians buy and sell properties on its blockchain using bitcoin. They will be able to use U.S. dollars next year.

ShelterZoom has built an Ethereum-based platform that went live Dec. 14. RealBlocks lets people invest in housing on its blockchain with fiat or digital currency (and starting in February 2018, its own tokens). It has completed seven deals so far.

RealBlocks lets people invest in rental properties like Section 8 housing over a blockchain.

It has also partnered with SALT Lending so that after February, participants will be able to take out a loan or line of credit using the tokens they buy from RealBlocks as collateral.

A blockchain could also facilitate crowdsourced mortgages. Instead of taking out a $200,000 loan from one lender, a borrower could get $2,000 each from 1,000 investors.

18 Blockchain Predictions for 2018 (Consensy), Rated: A

Bitcoin as a digital store of value is the least interesting use of blockchain … There, I said it.

A Loan

Source: Consensys

An Initial Public Offering or Crowdfunding

Source: Consensys

10. People will take control of their online identities

We will continue to see the growing trend wherein people, companies, and machines manage their identity self-sovereignly rather then by a third party service provider like a bank, Facebook, or another internet service provider.

Interestingly, governments will increasingly find themselves as attestors to these self-sovereign identities, similar to how Zug, Switzerland is attesting to citizens identity usage with uPort, Ethereum leading self-sovereign identity solution.

11. In 2018, governments and regulatory bodies will mandate the use of blockchain to track and trace high value assets.

Major Fortune 50 companies are already demanding public chain track and trace use cases for which they are using the Viant platform to build their solutions.

18. The total market cap of blockchain-based digital assets will exceed $2 trillion U.S. dollars by January 1, 2019.

The price of ether will exceed $2,000 in 2018. Ether will continue to outperform bitcoin, and the total market cap of ether will exceed that of bitcoin in 2018.

8 fintech trends on our radar for 2018 (O’Reilly Media), Rated: B

  1. AI will be implemented across the stack
  2. New products will make advanced analytics easier
  3. Blockchain technologies will be used in financial services products
  4. Data partnerships will increase
  5. We’ll see even greater regionalization and regulation in payments – This is an area where both startups and global companies are flourishing. The technologies, protocols, and players vary by region. I’m amazed by how widely used QR codes are in China (WeChat and Alipay) and the rest of the world (GoPay in Southeast Asia, Paytm in India). For companies operating in the EU, PSD2 is a new 2018 regulation aimed at fostering innovation and competition in the payments industry.
  6. Customer experience will be increasingly mobile
  7. There will be increased pressure around privacy and security
  8. More quants will be analyzing or trading cryptocurrencies
Australia

Can a fintech lending firm disrupt the big four? (Asiamoney), Rated: AAA

As CVs for Australian bankers go, Jason Yetton’s background doesn’t quite scream ‘disruptor’. High-flyer perhaps, certainly ambitious and across trends. But helming a startup?

Two years on from Westpac and now running SocietyOne, the Sydney-based loans fintech that is one of Australia’s more prominent financial startups, the mid-career Yetton seems to bite with near evangelistic fervour the very hand of establishment banking that once nourished him.

Australian banking is backward in many critical areas, Yetton tells Asiamoney. He wants to see a tech-led democratization that would revolutionize payments and settlement, as well as lending, data and information infrastructure, while allowing customers to switch banks without penalty.

The current system preserves the status quo, Yetton says, in which the formidable foursome control 80% to 85% of Australia’s banking market and from which they earned a collective A$32 billion ($24 billion) in the 2017 financial year.

India

Funds Raised By Indian Startups Hit Three-Month Low (Bloomberg), Rated: AAA

Funds raised by Indian startups hit a three-month low, as four startups together managed to raise just around $10 million last week. That compares with $36 million raised by 10 startups the week before in angel, seed or venture capital funding.

Online lending firm Lendingkart Finance Ltd. raised around $3.7 million (Rs 25 crore) from the country’s largest public sector bank State Bank of India to grow its loan books, the company said in a statement.

Indian start-up ecosystem on a growth path in 2018 (Outlook), Rated: A

India’s start-up eco-system has been growing at a rapid pace and has all the right ingredients to support the fast paced economic growth of the country. With an addition of 1000 start-ups in the year 2017, the start-ups have played a big role in the growth of the Indian economy, making it a major source of employment, innovation and industrialisation.

i2ifunding, India’s second largest P2P lending platform plans to expand its business across the country, instead of focussing on metro cities.

Asia

LaLa World Global to Launch $ 10M Public Token Sale Jan. 5 (BusinessWire), Rated: AAA

Blockchain startup LaLa World is pleased to announce the long anticipated launch of the Lala Token sale to commence on January 5, 2018 and to run through February 5, 2018. A total of 150 Million LALA Tokens will be released in an initial coin sale (ICO) starting this Friday.

LALA World Products from their Financial Ecosystem Include:

  1. LALA Transfer – A Peer-to-Peer local and global remittance backed by crypto as well as fiat.
  2. LALA Bill Pay – Local and International bill payments for you and your family.
  3. LALA Lends – Domestic and International peer-to-peer lending via crypto and fiat, individual and small businesses.
  4. LALA Card – Crypto and Fiat card synced to your Wallet and usable at millions of PoS globally.
  5. LALA Kit – Contains a mobile phone with pre-loaded LALA Wallet, LALA Insurance, LALA Card, partners’ products, etc.

LaLa World is a wholesome financial ecosystem for the unbanked, starting with migrants and their families back home. Investors can purchase LaLa Tokens here: 

8 promising Fintech Startups in Singapore to Watch in 2018 (Fintech News), Rated: A

  1. MyCash Online is an online marketplace designed for migrant workers in Malaysia and Singapore.
  2. Instarem is a remittance startup that aims to offer fast, safe and cost effective cross border money transfer services for individuals and businesses from countries including Hong Kong, Australia and Singapore to more than 25 countries.
  3. Singapore Life is a new life insurance firm which commenced its operations in 2017 by providing insurance solutions via its online platform.
  4. soCash has developed a solution that allows people to withdraw cash at small businesses part of its “Cashpoints” network. The solution plugs into the mobile apps of banks.
  5. Bluzelle Networks is a blockchain startup that’s building a decentralized, on-demand, scalable database for decentralized applications.
  6. TenX is a cryptocurrency payment platform that consists of a wallet, physical debit card, bank account, ATM access and more.
  7. AGDelta is a Singapore headquartered fintech software company specialized in digital wealth management.
  8. Flywire, formerly peerTransfer, is a provider of international payment solutions headquartered in Boston with operations in Singapore, China, Australia, Spain and the UK.
Canada

New payday loan rules still too soft, says group (CBC.ca), Rated: A

On Monday, New Brunswick became the eighth Canadian province to introduce regulations governing the payday loan industry.

Earlier this week, the Financial and Consumer Services Commission announced a new set of regulations, including mandatory licensing for payday lenders, requiring then to display posters showing their rates, and making insurance on loans optional.

Lenders are also prohibited from issuing more than one loan at a time to the same consumer, or lending more than 30 per cent of the consumer’s net pay.

Under the new rules, the commission is able to take action against unlicensed lenders and those that fail to comply with legislation.

Africa

Kenya most lucrative market for fintech top staff in Africa (Business Daily), Rated: AAA

Kenya is the most attractive market in Africa for workers in the fintech industry with new data showing that companies pay the highest salaries in comparison to their peers on the continent.

In a recent survey, the Digital Frontiers Institute (DFI) found that executives and senior managers working for Kenyan fintech companies earn each a base monthly salary of Sh2 million (Sh24.6 million or $238,509 annually) and Sh1.2 million (Sh14.2 million or $137,303 annually), respectively.

Authors:

George Popescu
Allen Taylor

Wednesday December 27 2017, Daily News Digest

blockchain artificial intelligence

News Comments Today’s main news: Impact investment performance. The UK home lending market had a watershed year. Opus, Statista predict digital payments to rise in 2018. Crowd Genie opens up blockchain-based lending to Singapore. Fast Invest offers crypto-enabled loan investments across Europe. Today’s main analysis: Where financial institutions will spend money on fintech in 2018. Today’s thought-provoking articles: The […]

blockchain artificial intelligence

News Comments

United States

  • Where money will be spent on fintech in 2018. AT: “American Banker predicts where banks and other financial institutions will put their investments in 2018. A good read with some solid predictive analysis, and good reporting. Top of the list: Blockchain & AI. Big surprise: Bank will get more aggressive with student lending and mortgages.”
  • Performance of impact investing. AT: “Regardless of what you call it, impact investing allows investors to grow portfolios while performing a social good, but how do these investments do over time? Not bad.”
  • The future of financing. AT: “Hint: It’s all about digital currency, or is it?”
  • Why people make bad financial decisions.

United Kingdom

China

European Union

International

India

Asia

United States

Where fintech dollars will go in 2018 (American Banker), Rated: AAA

A study released in December found that 82% of U.S. commercial banks plan to increase fintech investment over the next three years; 86% of bank senior managers surveyed said they intend to boost fintech funding imminently. The research was commissioned by the global fintech provider Fraedom.

Here are the fintech markets likely to get some love in the coming year:

Blockchain

Up till now, many blockchain pilots have been about gaining back-office efficiencies, such as in clearing securities, Canaday noted. She said she expects the use of blockchain to shift to ways to make money.

Artificial intelligence

“There was a study done about last quarter’s conference calls where the count of the number of times companies said ‘artificial intelligence’ in their calls was 800, up 25% quarter over quarter,” Steinberg said. “When you’re competing with 800 companies, it’s probably a difficult experience.”

B-to-B payments

While many fintechs focus on serving consumers, “toward the end of this year we started to see more of a shift in investment toward the B-to-B side,” said Grewal. “There’s big money being thrown into the B-to-B space. We’re seeing a lot of new company formation around the B-to-B payment space in a way we haven’t seen before. That’s one trend we’ll see a lot more of next year.”

Banks could “unlock” $11 billion in new revenue streams from small and midsize businesses by 2020, according to an Accenture report.

Consumer apps

Better experiences from fintech apps like Digit and Acorns are turning financial services firms into “ingredients” rather than “destinations,” according to Schwark Satyavolu, general partner at Trinity Ventures.

Grewal also sees a lot of interest in the cross-border commerce space — consumers from China wanting to make purchases in the U.S. and the U.K. and vice versa.

Banktech

Now that the Consumer Financial Protection Bureau has been defanged, so to speak, banks can get back into student lending and mortgages without fear of reprisal, he said.

THE PERFORMANCE OF IMPACT INVESTMENTS (All About Alpha), Rated: AAA

The Global Impact Investing Network has offered its own take on a much discussed question: do “impact investing” and its variants under various names – sustainable investing, socially conscious investing, ESG investing, etc. – work? And, if so, how well? It looks at this question in a very granular way, focusing especially on II through private equity and private debt. Given this focus it engages in a meta-study, or literature review.

The GIIN begins with the observation that private equity is the most commonly employed vehicle for impact investing. It is used by more than 75% of the impact investors.

How did they do? That 2015 study made the following points:

  • Since inception the 71 funds have generated aggregate net returns of 5.8% on average, with 4.6% showing up as the median.
  • The fund level internal rate of return can vary a good deal. The top 5% of funds get 22.1% or higher and the bottom 5% lose 15.4% or more.
  • That range itself is “similar to what is seen in conventional investing and illustrates that fund manager selection is key to strong performance.”

The Future of Financing (Avertising Specialty Institute), Rated: A

According to government statistics, 28.8 million small businesses currently operate in the U.S., employing 57 million people. A study by U.S. Bank notes the major reason these businesses fail is due to cash flow problems. Eighty-two percent of those businesses, in fact, are tanking because of lack of cash.

“You have this compression happening across every stage along the way,” Graham says. “For example, 24-hour turn with orders, better systems allowing a distributor to invoice faster, and easier ways to accept payment up front. It’s enabling everything to move faster. The need for financing is not as great as it used to be as a result of the options available now to be able to turn everything faster.”

There’s also big growth in the online lending space, Graham says, allowing for a lot of flexibility and options to get bank-like financing for business needs. But she thinks the next huge financing shift will surround something completely different.

“I think a lot of the real changes are going to happen around digital currency,” she says.

Lending Requirements

“Document requirements won’t change,” Seagraves says. “To get a loan today, you need to have some vehicle to communicate your plan, and that vehicle should include a set of business projections, like an Excel spreadsheet that talks about your financial requirements for the short term and how long it’ll take to become cash flow-positive. Then the lender is going to want to know your financial position as an individual and if any of your assets can be leveraged to secure a loan. These are all very traditional requirements, and I don’t see them changing any time soon.”

Why do people make bad money decisions (IOL.co.za), Rated: B

Eight out of ten American adults feel anxious about the state of affairs of their personal finance.

In addition to this, neural activity associated with “stressful information processing” was 20% higher among people who made their own money decisions compared to someone who received financial advice.

United Kingdom

Watershed year for equity release in the UK home lending market (Propertywire), Rated: AAA

The membership of the Equity Release Council in the UK has increased annually by 23%, rising to 219 from 178 at the same time last year, boosted by new entrants to the market, the latest official figures show.

Lending in the third quarter of 2017 surpassed £800 million for the first time in any single quarter, with the sector also on course to reach a record-breaking £3 billion in lending for the first time in a single year.

China

THE EASIEST WAY TO LOSE YOUR LIFE SAVINGS IN CHINA (SCMP), Rated: AAA

By any measure, 62-year-old Shan Juzhen was an easy mark. After the shortest of conversations with other investors, Shan put more than US$15,000 – or nearly a year of her pension – into a lending club she had never heard of.

She felt it unnecessary to check the qualifications of the lending club, which serves as an alternative for borrowers who cannot get a loan from a big bank. She also did not ask questions about how her money would be lent. The only thing Shan wanted to know was would the platform give her a high return on her investment.

A report published in December by Chaoyang Court in Beijing found that the number of Chinese senior citizens involved with lending-related disputes surged to more than 4,400 in 2016, a nearly sevenfold increase from a year earlier. And among all lending-related disputes the court handled last year, about 45 per cent involved elderly Chinese.

P2P online lending has now reached US$908 billion in transactions, according to Internet Loan House, a website that tracks the industry.

European Union

Joint Discussion Paper on automation in financial advice (EIPOA), Rated: AAA

Given this assessment, the ESAs are of the view that, even though automation in financial advice is not presently observed equally across all financial sectors and/or EU Member States, the phenomenon has the potential to continue to grow. The ESAs will assess the feedback to this Discussion Paper in order to better understand the phenomenon and to decide which, if any,
regulatory and/or supervisory action is required.

In considering the topic of automation in financial advice, the ESAs have observed the following across the banking, securities and insurance and pensions sectors :

  • In the banking sector:

i. Automation specifically in relation to financial advice does not seem to be very widespread. However, human contact is supported more and more by the use of various automated tools. These include comparison websites that can compare products offered by various financial institutions, and websites providing information on specific products and helping consumers to select between products by using simulators and calculators.

ii. New business models that are based in providing advice through automated advisory tools have nonetheless emerged (e.g. automated tools where the consumer fills in all relevant information and receives an advice on which mortgage to get as a result).

  • In the securities sector:

i. Automation in relation to financial advice is a more mature phenomenon, although the provision of advice that is completely automated appears to feature only in a few EU Member States. In this business model, automated tools are used as a type of financial adviser, often referred to as a ‘robo-adviser’: the automated tool asks prospective investors for information about their specific circumstances and, based on the answers provided, an algorithm is used to recommend transactions in financial instruments that match the customer’s profile.

ii. Different automated tools may be used to support different parts of the advice process, for example the collection of information, risk profiling, portfolio analysis, and order processing or trading.

iii. Some advice services are entirely automated, whereas other services foresee human interaction between the consumer and the advice provider at some stage.

iv. In a greater number of European jurisdictions, other automated tools exist that offer various online functionality to consumers. Such offerings include (but are not limited to): the possibility to open and manage online trading accounts that allow the consumer to trade financial instruments on an execution-only basis; automated portfolio management services; and automated tools that compare the prices of transacting in different financial instruments.

Read the full report here.

Fast Invest – Crypto-enabled Loan Investments Across Europe (ChipIn), Rated: AAA

Peer-to-peer (P2P) lending platforms have disrupted American financing. That is old news. What is more interesting is the impact of such platforms in Europe where big banks have long dominated the entire loan-initiation process as well as the investment chain.

European P2P initiatives grew 92% in 2015 to 5.4 billion euros. P2P consumer lending is, so far, the biggest and fastest growing market segment, although far from the only one.

Brexit will mean that British banks will lose what is called “passport rights” that enable them to have access to European markets. And P2P lenders are already jumping into the void this is creating, as well as allowing new kinds of services and income investment opportunities.

Introducing Fast Invest

Fast Invest’s mission is to create a cross-European platform where investors can earn returns for investing in loans. At present, the platform offers an 8-15% return based on past performance for short-term investments of as low as 1 euro, US dollar, pound or Polish zloty after ten months.

Today, before the crowdfunding, the company has 8,500 plus daily customers across Europe, 21 certified lenders, 36 client origin countries and over 50 employees on staff.

Investors will be able to choose between investing in cryptocurrency or a crypto-proved loan investment. This will significantly increase yield over regular bank returns which are about 1.25% API at present. These investments include traditional and alternative investments including issued loans, real estate, private equity and other structured finance products.

Investors can invest as little as 1 euro and get that back within one day with the Fast Invest buyback guarantee.

FIT tokens allow investors to participate in a growing P2P market opportunities across Europe and the US.

Cork investors most likely in Ireland to back local firms (Independent.ie), Rated: B

Cork-based loan investors are the most likely to back local firms, according to data from peer-to-peer lending platform Linked Finance.

The numbers are based on business loans made over the Linked Finance platform, which matches investors to their choice of borrowers using the so called peer-to-peer lending model that cuts out banks.

Analysis of the investors using the platform found that just over one in three (34pc) of lenders have incomes in excess of €100,000, 39pc own their homes outright and 40pc are homeowners with a mortgage.

International

Fintech Outlook 2018: Digital Payments to Rise (Investing News), Rated: AAA

2017 was a significant year of growth for digital payments, according to an Opus Consulting report, together with the emergence of alternative payments. Peer-to-peer, wallets and mobile payments reached “high adoption levels” in the mainstream, reaching $3.6 trillion in terms of transactions during 2016-2017. According to the report, that amounted to a 20 percent year-on-year growth–a number that will only continue increasing from here.

In terms of global mobile payment revenue, the report states the number is estimated to reach $930 billion in 2018, representing a 19 percent growth from 2017 with China leading the way in the mobile payments market. Global payments revenue as a whole is poised to reach $2.3 trillion, with 43 percent of that representing banking revenues.

Similarly, data from Statista indicates that transaction values are expected to grow at a compound annual growth rate of 41.9 percent over the next five years to 1.32 trillion, while the number of users in the mobile point of service payments will reach 977 million by 2022.

Fintech outlook 2018: Companies to watch

Glance Technologies, whose flagship product is its mobile app, Glance Pay, decided in 2017 that it would create its own cryptocurrency built on the ethereum platform to use smart contracts to provide rewards, which Green says will be purchases in conjunction with its mobile payment app.

Biometrics as the Catalyst: FinTech Pulls Away From Banks (Let’s Talk Payments), Rated: A

The development of biometrics on mobile devices is set to have an outsized impact on mobile wallets and international money transfer. Advances such as fingerprint login, retinal scan, and facial recognition offer a rare opportunity for remittance companies to both combat fraud and improve the user experience.

Mobile wallet transactions alone are expected to reach nearly $1.4 trillionin 2017, growing 32% compared to 2016, and the number of mobile phone users will top 5 billion.

Biometrics improves the user experience by reducing form fields, eliminating the need to upload a picture of a physical ID, and fully automating the know-your-customer (KYC)/anti-fraud process. Moreover, for the first time, digitally funded transfers will offer better KYC and fraud checks than banks or brick-and-mortar competitors.

With hacked or compromised credentials, attackers can wreak havoc by posing as legitimate users and moving or stealing unauthorized funds. Not only is there a risk of theft, but fraudsters also exploit peer-to-peer (P2P) money transfer services for money laundering and terrorism financing. Considering the fact that P2P payments are expected to be used by nearly129 million adults in the US by 2021, the threat isn’t going away anytime soon.

The number of people living outside of the country in which they were born has surpassed 244 million, representing a 41% increase between 2000 and 2015. Many of these people come from places where the identity infrastructure is weak and disconnected from developed systems in the US and Europe.

About 93% of consumers would rather use biometrics than passwords.

India

The McKinsey Paper on India (All About Alpha), Rated: AAA

Earlier this year, McKinsey & Co. published a paper on impact investing in India. The data base for that study consisted of 48 PE and VC transactions, of which 31 targeted the “financial inclusion” sector: that is, enterprises designed to bring banking and bank-like services to the unbanked.

In this case they varied from a loss of 46% to a gain of 153% with a median gross IRR of 10% and a weighted average of 11%.

 

2017: The year of the customer (livemint), Rated: AAA

Investments in the fintech space in India also witnessed frenzied activity this year, with total value of investments jumping by 388% from $383 million in 2016 to $1,868 million in the first three quarters of 2017, according to industry database CB Insights.

With over 1 billion mobile phones, 325 million broadband connections and 306 million new bank accounts, India became a case study in digital financial inclusion, driven by the Jan Dhan Yojana, Aadhaar and mobile (JAM), as reported by the communications ministry.

More than 225 alternative lending companies were founded in India in 2017 and the segment was the second most funded in India’s fintech space, as per data from an industry database Tracxn.

According to the National Payments Corporation of India (NPCI), eKYC verifications have jumped almost 77% to 84 million in FY18 over FY17, speeding up the on-boarding process and reducing costs significantly.

In 2017, almost 46 strategic partnerships and deals took place between lenders, payments companies and fintech innovators. Some of these were the tie-ups between Paytm and ICICI Bank for short-term interest-free credit lines; Amazon India and Bank of Baroda for unsecured micro loans; Mobikwik and Bajaj FinServ for offering all features and benefits of Bajaj Finserv EMI cards over a digital payments wallet; Fisdom and Lakshmi Vilas Bank for a robo-advisory platform; and between Senseforth and HDFC Bank for chatbots.

Reviewing the 2017 fintech ecosystem and what its startups are looking forward to in 2018 (Plunge Daily), Rated: A

RBI’s recognition of P2P lendingstartups as a new category of non-banking financial companies (NBFCs), was celebrated all-round by the sector.

One of the most celebrated advantages of the fintech boom is that of ‘financial inclusion’ and the potential to service the underserved. However, the sector is hoping that the guidelines placed will initiate control and check on the unorganised side of money lending and the digital push will bring about competitive rates and transparency.

Another announcement the RBI made in October was the introduction of guidelines for digital wallet companies. There were mandates on higher capital requirements for license holders of prepaid payment instruments or digital wallets, KYC or know-your-customer norms and the initiation of interoperability of various digital wallets.

Rohit Lohia, CO-Founder and COO of Cointribe believes 2018 will see scaling up of players in the lending space especially in small business lending.

Experts’ views on what changed in the banking and fintech sector in 2017 (livemint), Rated: A

Upasana Taku, co-founder, MobiKwik

The government’s decision to bear the merchant discount rate (MDR) on digital payments of up to Rs2,000 will bring greater level of acceptability for digital payment systems. Digital payments will become a way of life both for consumers and merchants and bring a cultural shift in digital payments.

Renu Satti, MD and CEO, Paytm Payments Bank

India is currently at the center of the banking world, and is set to emerge as a benchmark in digital and financial inclusion.

Living the sharing economy in the cryptocurrency way (YourStory), Rated: A

The global economic meltdown of 2008 was the catalyst to get people to shift gears, and supplement their income by sharing assets that they owned. Added to this, the increasing internet penetration and the evolving economic system helped companies such as Airbnb and Uber popularise the concept of shared economy, and successfully pave the path for other industries.

However, while these platforms helped millions of people find alternative sources of income, they suffered elementary setbacks. To begin with, the companies have significant amount of transactional overhead, be it monetary or operational. Second, international boundaries restrict cross-border economic sharing. Thus, the peer-to-peer markets are unable to foster collaborative ownership which is crucial to enable true sharing of resources.

Blockchain — the key to global sharing

The peer-to-peer network in the sharing economy, allows individuals to organise themselves without the involvement of any third party. As the intermediaries are based on the algorithms, the technology builds trust, making it a versatile technology that can be match specific user requirements.

According to a PwC report, the peer-to-peer-lending global market is pegged to touch $335 billion by 2025. As the sharing economy continues to grow, the idea of private ownership is being replaced by the revival of collaborative and shared consumption and adoption of blockchain can guarantee safe and secure transactions.

Asia

Exclusive Interview with Crowd Genie CEO Akshay Mehra (ChipIn), Rated: AAA

Crowd Genie is a peer-to-peer lending platform based in Singapore. It connects small to medium businesses seeking loans with capital via a blockchain-based cryptocurrency system.

Lenders can expect to make at least 14% return with all funds held in escrow. This peer to peer lending activities will be tokenized using smart contracts to enable lending without borders more efficient, cheaper and safer. Ultimately, the team has a vision to build an Asset Trading Exchange on Blockchain that will democratize trading and allow investment in infrastructure, stocks, cryptocurrency, and bonds across Asia, which would be prohibitively expensive, and potentially unfeasible due to issues of transparency and trust without Blockchain.

Hi, Akshay. Thanks for joining us today. Can you tell us more about yourself and Crowd Genie?

Crowdfunding is popular in the West, but the idea is relatively new in Singapore and other Asia countries. Observing how lenders getting low returns from the banks because of the overhead costs and how established SMEs unable to receive full funding desired and become under-banked, I would like to match this two parties together to solve the problem and that’s what Crowd Genie has been doing.

Why did you decide to use blockchain in building Crowd Genie?

Although our existing P2P digital loan business is incredibly innovative in the Singapore financial sector, it would have been impossible to scale to enable lending without borders and offer Asia-wide asset trading before blockchain technology was introduced.

To build and scale an asset exchange with pre-blockchain technologies would be prohibitively expensive, and potentially unfeasible due to issues of transparency and trust.

In the whitepaper, you talk about creating “Asian Passport” rights or identities. Tell us how you came up with the idea and how you think you will implement this regionally. Is this based on the idea of European passport banking rights?

To build an end-to-end Asset Exchange, a Digital Passport is essential for us to identify who are the lenders and borrowers, are they associated with negative news, illegal activities or politically exposed. We will continue with our existing due diligence process where we ask for proof of identity and bank statement and check it against a world-wide recognized database. Thereafter we set up a digital passport and store in on blockchain.

Please explain the notion of “fractionalized assets,” and how it is redefining how P2P lending is occurring.

P2P lending is an illiquid investment. Imagine that you have invested in a 12 months tenure loan, but would like to get some money back before it matures, say 2 months later. You can do so by selling it on Crowd Genie Asset Exchange by indicating the fraction of your assets that you would like to sell.

 

Authors:

George Popescu
Allen Taylor