Thursday May 31 2018, Daily News Digest

places that owe the most in student debt

News Comments Today’s main news: Online lenders tighten rules against default wave. UK P2P lenders join effort to overturn Brexit. Consumer credit sees the most financial complaints in UK. Today’s main analysis: Where is the most student debt? Today’s thought-provoking articles: How regulations will impact Ant Financial. The 7 most innovative fintech companies. Where is the fintech innovation right […]

places that owe the most in student debt

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United States

United Kingdom

China

International

Other

News Summary

United States

Online lenders tighten rules as default wave rattles investors (American Banker) Rated: AAA

It’s gotten a lot harder to borrow money from the raft of fintech firms looking to bring online lending into the mainstream.

Besieged by a wave of defaults after several years of rapid growth, the biggest online lenders have been forced by bond investors to tighten underwriting standards. Social Finance, Prosper, LendingClub and Avant now demand higher average credit scores and offer shorter maturities to boost the quality of loans they repackage into asset-backed securities.

The shift in the $30 billion market comes after a swarm of borrower defaults in the past three years rattled ABS investors. It also marks a coming of age of sorts for the fintech startups that offered cut-rate loans to build a customer base. Now, with rates rising and a potential economic slowdown looming, the move toward higher-quality from the push for quantity has taken on added urgency.

According to Kroll, the weighted average of FICO credit scores of Prosper’s loans packaged in ABS increased to 717 in a March 2018 deal from 704 in a sale two years earlier.

LendingTree Study: Which Places Have the Most Student Debt? (PR Newswire) Rated: AAA

LendingTree today released its study on the places with the most student debt. To determine whether there are geographic variations in student debt, LendingTree analysts looked at a sample of anonymized users who logged into My LendingTree in the first quarter of 2018 and calculated how many had student loans, as well as the other reported statistics related to their balances.

Source: Lending Tree

Wells Fargo Plans to Expand Auto Lending Again (Lend EDU) Rated: A

Wells Fargo & Co. expects to increase its auto lending again. In mid-2017, Wells Fargo decided to reduce car financing and tighten its underwriting standards. In February 2018, the firm said it intended to finish consolidating its regional car loan centers by April, and that lending would expand within two quarters, reported Bloomberg.

For lenders in a $1.2 trillion U.S. auto loan market, they face a landscape with falling vehicle resale prices, making it difficult for them to soften losses from repossessing cars when borrowers default.

Principal Financial acquires digital advice startup RobustWealth (Investment News) Rated: A

Principal Financial Group is acquiring financial technology startup RobustWealth to improve its own technology offering and expand distribution capabilities among the banking, broker-dealer and registered investment adviser channels.

Principal also sees the RobustWealth’s platform — which includes digital advice, goal-based investment tools and client onboarding — as providing the foundation for a direct-to-consumer robo-adviser in the future.

What to Do When You Lend Family Money But They Can’t Pay You Back (Entrepreneur) Rated: A

Like many people, Entrepreneur Network partner Jeff Rose once has convinced himself it was a good idea to loan money to a family member. In reality, the situation can get messy when this close personal connection cannot return the investment. This does not mean Rose has given up on peer-to-peer lending, which is a helpful tool that can streamline the loan process.

OppLoans Named One of the Country’s Best Workplaces by Inc. Magazine (Markets Insider) Rated: A

Online lender and service provider OppLoans has been listed as one of the country’s 2018 Best Workplaces by Inc. Magazine. The award determination was based on employee survey results in areas like benefits, perks, executive leadership and opportunities for career development.

OppLoans enjoys a rating of 4.9 out of 5 stars on Glassdoor as well as a 98 percent retention rate and 99 percent approval rating for CEO Jared Kaplan. Last December, Glassdoor rated the Chicago-based startup as the sixth-best place to work nationally for small-to medium-sized businesses. The firm was named #219 on the 2017 Inc. 500 list of fastest-growing companies and the third-fastest growing technology company in Chicago by Built in Chicago.

Autoloans Company Lendbuzz Secures $ 30 Million in Funding (CTech) Rated: A

Boston-headquartered car financing service Lendbuzz Funding LLC has raised $30 million in financing, the company announced Tuesday. The round was led by BHI, the U.S. division of Israel-based Bank Hapoalim, by Viola credit, the growth and venture lending arm of Israel-based Viola Group, and by U.S.-based ConnectOne Bank.

The company, which currently offers its services in most U.S. states, says it reviews loan requests within 24 hours and transfers money immediately upon approval. Since its establishment, the company raised $43 million in both debt and equity funding.

Fifth Third Bank eBus offers free financial advice (The Blade) Rated: B

For the next week, a large bus operated by Fifth Third Bank will travel throughout Toledo, offering residents free money management advice and job-searching services.

The bus, called the Fifth Third Bank Financial Empowerment Mobile, or eBus, was located at the Lucas Metropolitan Housing Authority on Wednesday, and though it’s operated by Fifth Third, its services can be used by any residents no matter which bank they use, said Loretta Humphrey-Cruz, community development relationship manager.

PLI 23rd Annual Consumer Financial Services Institute (JD Supra) Rated: B

The third location of PLI’s 23rd Annual Consumer Financial Services Institute will take place in PLI’s San Francisco Conference facility and via concurrent live Webcast on June 25-26, 2018.  This will be the first time in many years that the Institute will take place in San Francisco.  Since the first location of this event in NYC on March 26-27 was well-attended, and the second location in Chicago on May 7-8 was sold-out, anyone interested in attending the program in San Francisco is encouraged to act quickly to register.

United Kingdom

Tech Entrepreneurs Launch Campaign to Reverse Brexit Vote (Forbes) Rated: AAA

Could Britain’s leading technology entrepreneurs derail Brexit? More than 80 innovators and investors from across the UK’s tech sector have launched a new group, Tech for UK, which will campaign for a meaningful vote on the final terms of the Brexit agreement that the British Government is currently negotiating with the European Union. Such a vote should give Britons the option to vote for the UK to remain in the EU, Tech for UK argues.

The group boasts a string of high-profile business leaders from the tech sector, including Martha Lane-Fox, best-known as the co-founder of Lastminute.com, Giles Andrews, one of the founders of peer-to-peer lending pioneer Zopa, and George Bevis, the CEO of Tide Bank. It also features leading venture capital and private equity investors, such as Simon Murdoch, the managing partner of Episode 1 Ventures.

Consumer credit made up the bulk of financial complaints last year (Peer2Peer Finance) Rated: AAA

The FOS annual report for 2017/2018 found consumer credit products, which includes some peer-to-peer lending as well as payment protection insurance, accounted for the most complaints at 36,349 last year, up 40 per cent.

The Ombudsman upheld 47 per cent of complaints, up from 45 per cent a year before.

There was also an eight per cent increase in complaints about unsecured loans to 6,909, while credit card complaints were up 15 per cent to 11,073.

How to invest in property without buying a home (City A.M.) Rated: A

Over the past few years, property-oriented investment companies have been coming in thick and fast, bolstered partly by the launch of the Innovative Finance Isa (IFISA).

The minimum investment can be as little as £10, which isn’t a patch on the huge deposits needed to buy a house (the average deposit in London is more than £90,000).

Robo-rumble: Will FCA scrutiny stop digital services moving further towards advice? (Money Marketing) Rated: A

The FCA reviewed seven firms offering online discretionary investment management services and three firms giving automated advice.

It found service and fee-related disclosures at most online discretionary investment management firms in its sample were unclear.

Some firms did not make clear whether their service was advised, non-advised, discretionary or non-discretionary. Others also compared their fee levels with their peers in a “potentially misleading way”. For example, they compared a non-advised, non-discretionary service with a discretionary service solely on a cost basis without explaining the difference in the nature of the service.

FIVE SPEAKERS JOIN ‘FUTURE OF FINTECH’ EVENT LINE-UP (Business Cloud) Rated: B

Five speakers from the world of FinTech have been confirmed for BusinessCloud’s The Future of FinTech event in London on 12 July.

Nicola Horlick, a former investment banker turned high-profile player in the peer-to-peer (P2P) lending market, is the headline speaker for the breakfast event.

China

How Will Ant Financial, China’s Fintech Giant, Be Impacted By New Regulations? (Forbes) Rated: AAA

Regulations are expected to be implemented on money market funds. Ant Financial’s main money market fund, Yu’e Bao, has been rated as much weaker than its 

GXChain (GXS) Review – A Blockchain-based Commercialized Data Marketplace (Chain Bits) Rated: A

With the proliferation of data on the internet, there are many pain points for individuals. Since you do not own your data, someone can sell you information and personal data without sharing profits. In addition, data is often scattered among multiple platforms, making it difficult to manage. Finally, data is difficult, if not impossible, for individuals seeks to monetize and earn from it. They don’t know how the blockchain could be applied in this scenario to better their lives.

GXChain solves these pain points by obtaining user consent before collecting and storing user data on a blockchain.

GXChain wants to be the data trading network that protects user privacy and offers copyright protection and usability at the same time. It has real-world applications in insurance, online lending, consumer loans and banks.

International

7 most innovative Fintech companies right now (Forex News Now) Rated: AAA

Stripe-is one of the most valuable Fintech startups. It was worth over $9 billion in 2016.

Ant Financial-has a market capitalization of $60 billion, which makes it the most valuable Fintech company in the world.

Atom Bank-has raised over $290 million in financing.

Robinhood-Valued at $5.6 billion, offers its customers a mobile wallet that allows trading shares and exchange-traded funds without paying commissions.

Lufax-is an online peer-to-peer lending platform. It matches borrowers with investors for a fee of 4% and is valued at over $18.5 million.

SoFi-is valued at over $4.4 billion.

Coinbase-has over 13 million users and makes more than $1 billion in revenue a year.

Where In the World Is Fintech Innovation? (Bank Innovations) Rated: AAA

China is also at the forefront of innovation. The government is actively cultivating fintech there.

Fintech companies like Qudian, LuFax, and ZhongAn (owned by Ant Financial), China’s first online-only insurer, are now emerging. Investment bank CLSA ranks ZhongAn as the sixth most valuable e-finance company in the world. The Chinese government has also designated development zones, such as Zhongguancun and Shenzhen, for innovation industries.

Source: Bank Innovation
Australia

Banks’ $ 220m bill for dudding customers to rise ‘significantly’ (The Canberra Times) Rated: A

Banks are set to refund “significantly” more than the $220 million already set aside for financial advice clients who were charged for services that were never provided, as institutions search their files for customers who were ripped off.

What you should look for when buying a partially renovated house (Domain) Rated: A

A recent survey by online lender State Custodians found 52 per cent of people would be open to a renovation project for their next purchase but only 19 per cent of people would be keen on tackling a full fixer-upper.

On the other hand, a quarter of respondents would prefer taking on a partially renovated home as a project, with Millennials in particular more open to the idea of buying a half-renovated house.

India

ICICI Bank also wants to be a fintech (The Ken) Rated: A

In mid-2017, B Madhivanan, the chief technology and digital officer of ICICI Bank, met Rohan Angrish, the chief technology officer of online lender Capital Float. Madhivanan had questions about online lenders’ small-ticket loans. Fintechs like Capital Float lend to underserved segments like kirana stores that banks don’t normally touch.

Asia

Funding Societies partners with UOB Malaysia to accelerate small business growth (Deal Street Asia) Rated: AAA

United Overseas Bank (Malaysia) Bhd has partnered with regional peer-to-peer financing platform Modalku Ventures Sdn Bhd (Funding Societies) to connect startups and small businesses with alternative financing solutions.

Through the partnership, startups and UOB Malaysia’s small business customers will be able to raise up to RM500,000 directly from individual and institutional investors using Funding Societies’ platform without the need to pledge collateral.

Fintech firms need support from banks: SBV (Vietnam News) Rated: A

The fintech (financial technology) sector is facing difficulties of capital mobilisation shortage, inadequate legal framework and banks’ hesitance in co-operation, said Lê Minh Hưng, Governor of State Bank of Việt Nam (SBV).

Hưng told the Việt Nam fintech forum 2018 held in Hà Nội on Wednesday that fintech and banks could contribute to expand financial universalisation, and promoting hunger eradication and poverty reduction while enhancing social equality and sustainable economic development.

Japan’s Gumi Games Founder Launches $ 30M Crypto Fund (Blockchain News) Rated: A

Japanese mobile games publisher gumi today launches a fund to invest in promising global cryptocurrency companies. With USD 30 million in initial investment secured, the venture capital fund is moving to open up the Japanese crypto startup market to international investors, honing in on a target that has, up to now, been a struggle to access and understand.

While the Japanese yen accounts for over 56 percent of Bitcoin volume, gumi believes that there is lack of understanding of Japan’s crypto market and the project’s leaders are keen to fill a void in the country that was also the first to legalize bitcoin.

He has helped to raise over USD 250 million to date for companies such as Bee Token, the Decentralized AirBnB and crypto lending platform Celsius Network.

Africa

Fintech in Africa: what investors are looking for (Fin24) Rated: AAA

According to EcoBank, more than 57% of all mobile money accounts globally can be found in sub-Saharan Africa, with the African fintech market set to grow from $200m currently to $3bn by 2020.

A recent study by McKinsey found room for growth in meeting unmet banking needs in Africa. These include borrowing, saving, and investing across the continent. South Africa alone is set to see an increase in banking revenues of $4bn over the next five years.

Kenya calls for regulation of fintech lenders (IT Web) Rated: A

A boom in  by fintech firms in Kenya has led to an increase in predatory lending practices, the country’s central bank governor said yesterday, calling for the sector to be regulated.

Kenya built a reputation as a pioneer of financial inclusion through its early adoption of a mobile money system that enables people to transfer cash and make payments on cellphones without a bank account.

Canada

One set of borrowers at greater risk are Canada’s 1.14 million small businesses, defined as companies that employ up to 99 workers. Statistics Canada reports that small businesses represented 98 per cent of all businesses, employed 70 per cent of workers, and generated 30 per cent of each province’s GDP on average. This category includes startups and high-growth firms, which represent Canada’s best hope for job creation and economic growth.

Fortunately, small businesses now have an alternative source for loans called peer-to-peer (P2P) lending. These online platforms match borrowers and investors directly and can provide loans cheaper and faster than traditional sources. How can that be? The answer is technology.

Fintech Select Records a Net Profit of $ 986k for Q1 Ending March 31 2018  (GlobeNewswire) Rated: A

Fintech Select Ltd. is pleased to announce that its financial statements for the Q1 ending March 31 2018 have resulted in a net profit of $986k. Q1 2018 Financial Statements and Management Discussion & Analysis (“MD&A”) have been filed on SEDAR.

Authors:

George Popescu
Allen Taylor

Digital Banking 2018

Digital Banking 2018

Date: June 6-8, 2018 Location: The Neal Kocurek Memorial Austin Convention Center 500 E Cesar Chavez Street, Austin, TX 78701 Digital Banking is the leading and largest digital banking event in the industry, covering innovation in financial services for consumer and commercial customers around mobile, digital, AI, payments, RegTech, data, blockchain, API, channel and technology strategies. […]

Digital Banking 2018

Date: June 6-8, 2018

Location: The Neal Kocurek Memorial Austin Convention Center
500 E Cesar Chavez Street, Austin, TX 78701

Digital Banking is the leading and largest digital banking event in the industry, covering innovation in financial services for consumer and commercial customers around mobile, digital, AI, payments, RegTech, data, blockchain, API, channel and technology strategies.

Featured Speakers include:

  • Lisa Adams, Product Marketing Manager, Avoka
  • Duangporn Aphiraksatyakul. VP of Enterprise Risk Analytics, Bank of America
  • Dan Armstrong, Chief Digital Officer, BankMobile
  • Amir Ben-Efraim, Co-Founder and CEO, Menlo Security
  • Lisa Cook, Product Manager for the Digital Banking channel, FirstBank
  • Keith Costello, CFA, President and CEO, First GREEN Bank
  • Parker Crockford, Commercial Director US, Onfido
  • Jennifer Daugherty, Senior Vice President and Director, Omnichannel Strategy, Fifth Third Bank
  • And many more

Register here.

Thursday Auguest 17 2017, Daily News Digest

commercial loans

News Comments 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 […]

commercial loans

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

Asia

Canada

News Summary

United States

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.

Source: Orchard Platform

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.

Source: Orchard Platform

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.

Source: The College Investor

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.

Source: The College Investor

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

United Kingdom

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

Juniper’s Top 3 Disruptive Technologies:

  1. PSD2 (Payment Services Directive 2) & Open APIs (Application Programming Interfaces)
  2. Regtech
  3. Chatbots

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.

China

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.

European Union

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).

Klarna’s new logo.
International

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.

Australia/New Zealand

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.

Asia

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.

Canada

CIBC Scraps President’s Choice Partnership in Online Shift (Bloomberg), Rated: AAA

Canadian Imperial Bank of Commerce and grocery chain Loblaw Cos. are ending their 19-year President’s Choice Financial partnership as the country’s fifth-largest lender starts its own digital bank.

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.

Authors:

George Popescu
Allen Taylor

The QED Matrix Helps Leaves and Mountains Become Trees

QED Matrix

Nigel Morris is a co-founder of Capital One and has led it to emerge as a multi-billion dollar behemoth. During his time at Capital One, he noticed there is a gap between banks and the fintech industry. To bridge this void, his team rolled out QED Investors in 2007 and was able to bring on board […]

QED Matrix

Nigel Morris is a co-founder of Capital One and has led it to emerge as a multi-billion dollar behemoth. During his time at Capital One, he noticed there is a gap between banks and the fintech industry. To bridge this void, his team rolled out QED Investors in 2007 and was able to bring on board some ex-colleagues from Capital One to build QED; this helped him to ensure the team hit the ground running. QED has invested in multiple startups that have not only become unicorns, but have changed the entire landscape of the financial ecosystem in which they operate. Most notable are Credit Karma, SoFi, Prosper, GreenSky, BrainTree, and ApplePie.

Fintech Opportunities and Hindrances

Morris has seen the best and worst of big banking and fintech startups. He has seen that banks have some really important assets that fintech companies lack: low-cost deposits, regulatory access, top-notch compliance, huge customer base, and high profitability. But they are trying to be everything to everyone and this is where fintech companies are gaining ground. Fintech companies, rather than offering everything, offer a specific product or service that banks haven’t developed or cannot develop because that is just not part of their DNA.

On the other hand, Fintechs have been extremely nimble and have evolved into dominating spaces that have been vacated or neglected by banks, online consumer lending and small business lending being prime examples. However, banks have accepted the hard truth and have started striking partnerships with fintech lenders.

Morris is of the opinion that both sectors had been operating in silos. Though both have “complementary sets of skills,” they have only now really started communicating and exploring opportunities together. This lack of being able to meet on common ground was more of a cultural issue than anything. Startups do not understand or appreciate the hierarchy and sometimes bureaucratic structural setup of banks, and banks obviously are extremely wary of aligning themselves with unwieldy trigger-happy startups that can land them in a regulatory mess. So this communication gap is the biggest hindrance that both sides need to overcome to make this partnership work.

Bridging the Bank-Fintech Gap

In their endeavor to bridge the gap, QED has taken massive strides in the last six months by striking groundbreaking partnerships–one with Fifth Third in Cincinnati and another with Scotia Bank in Toronto. This partnership is beneficial for all three parties involved: Banks, Fintech companies, and QED.

Fifth Third has invested heavily in QED portfolio companies like GreenSky, ApplePie Capital, and AvidXchange. The focus of the Scotia relationship is in Latin America as they have a tremendous presence in LatAm and Central American countries outside of Brazil. They are exploring multiple opportunities together in those markets and should be able to announce a groundbreaking deal soon.

The QED Matrix

Nigel Morris believes that differentiating between fintechs and banks on a single perimeter is not feasible or sufficient. That’s why he came up with the QED Matrix.

The matrix has been developed on the lines of the BCG matrix (which is used for analyzing business units). The QED Matrix is used to show the trade-offs in the business model structure of the financial service institutions. The gist of is that each quadrant has its strengths and weaknesses, so entities moving towards the center are in the best shape.

The Matrix is based on two spectrums:

  • Resilience is a function of factors like brand capitalization and product suite diversification;
  • Flexibility concerns both infrastructure and decision making, and also includes organizational design, technology, culture, talent, and much more.

Classifications of each quadrant:

  • Mountains – Firms listed as mountains are high in resilience and low in flexibility. They have resilience because businesses have product diversity, brand, capital reserves, distribution networks, and low cost of capital. But low in flexibility due to institutional inertia, low growth, technical debt, and focus on regulation and cost reduction.

Examples: Citibank, Fifth Third Bank, Suntrust etc.

  • Boulders – Firms under this quadrant represents low resilience and low flexibility. Low resilience due to lack of capital reserves or product diversification of larger banks. They also lack in flexibility due to legacy infrastructure, weak talent pipeline etc.

Examples: Regional banks, Credit unions, Community banks.

  • Trees – Trees represent high resilience and high flexibility. High resilience due to factors like product diversification and loyal customer base and high flexibility due to clutter-free organizational structure, less technical debt, and open access to talent.

Examples: SoFi

  • Leaves – Firms under this quadrant represents low resilience and high flexibility. Low resilience due to product concentration and lack of stable low-cost capital. High in flexibility due to simple organizational structure, technology infrastructure, etc.

Examples: GreenSky, Avant

Analysis

Obviously, Trees represent the best of both worlds. But the thought process behind the QED Matrix is for banks and fintechs to realize where they are in the matrix and what type of partnerships should they pursue to ensure they remain relevant in the twenty-first century. So a boulder should look to partner with leaves so that its customer base can be monetized properly. Leaves should look to partner with mountains so that they have access to cheaper capital and a diversified offering and customer base. Whatever the situation, QED is sitting in the middle of the matrix. It is not only a capital provider to fintechs, but also the creator of a platform for dialogue with banks; this should help it become the first choice for entrepreneurs looking to build a sustainable fintech business.

Read about Nigel Morris’s LendIt USA 2017 keynote titled “If I Were to Start a Bank Today, This is What It Would Look Like.”

Author:

Written by Heena Dhir.

Tuesday April 18 2017, Daily News Digest

funding mix non-bank lenders

News Comments Today’s main news: A comparison of funding & liquidity sources with lender maturity by PeerIQ. China Rapid Finance sets terms for U.S. IPO. China bank lending falls in March. Perfios raise $6.1M in Series A round. Abu Dhabi ranks as top fintech hub for MENA region. Today’s main analysis: Lenders test personalities to determine loan eligibility. Today’s […]

funding mix non-bank lenders

News Comments

United States

United Kingdom

  • Blockchain can save banks tens of billions of dollars per year. GP:”There is a lot of speculatio and the technology is not mature enough yet. There are also still unclear business cases. In the US about 40% of professionals in finance are very familiar with blockchain according to latest surveys so it is not a familiarity problem. On the other side regulation is not there yet and is in fact the largest obstacle to blockchain adoption.” AT: “Blockchain is a technology is a lot of underused potential. It could make the banks competitive again, but it would take years to implement on a global scale to the point where it would be useful and effective in making the financial system of the world transparent, trustworthy, and effective. Getting every bank to adopt it would be a massive undertaking. All it’s going to take is one major bank using it and proving how it can improve banking services to include regaining customer trust. If bank services customers get behind it, the banks will have to.”
  • Pariti shows you your debts, offers to save money via P2P lending. AT: “This is a cool, and useful, development.”
  • Ex-Barclays CEO says Uber moments are happening in finance.

International

China

India

Asia

MENA

Africa

News Summary

United States

A Comparison of Funding & Liquidity Sources (PeerIQ), Rated: AAA

The US Fed released their quarterly report covering “Quarterly Trends for Consolidated U.S. Banking Organizations”. The report shows that the ROE for the banking sector remains mired in the 7 to 9% range, below pre-crisis levels and the theoretical cost-of-capital for many banks.

Earnings season kicked off last week, with J.P. Morgan leading the trio of banks who released their first quarter earnings. In a positive sign, JPM booked lower loan loss provisions ($1.32 Bn) vs. prior year ($1.82 Bn) for the same quarter. Higher rates improved net interest margin by 11 bps to 2.33%.

Analysis of Funding Mix Across Leading Non-Bank Lenders

Soruce: PeerIQ
Source: PeerIQ
Although the funding mix might indicate that OneMain does not rely on warehouse finance, quite the opposite is true. OneMain also has eleven revolving conduit facilities with a maximum balance of $4.8 Bn in additional liquidity. The facilities represent a substantial liquidity backstop (from diverse counterparties with staggered maturities) should term ABS markets seize for a prolonged portion of time.
OneMain does not appear to be optimizing for a singular goal such as low-cost funding or maximizing ROE. All together, it appears that OneMain has implemented a financing strategy to deliver an attractive ROE (potentially high-teens or low twenties) while ensuring sufficient liquidity ballast to guard against disruptions in capital markets. For example, OneMain is also funding via $1 Bn of 8.25% senior notes issued in April last year rather than drawing on lower-cost liquidity available via warehouse finance.  OneMain is willing to take on somewhat higher financing costs in exchange for access to diverse and longer-term funding sources.
OnDeck
OnDeck’s financing strategy varies significantly from OneMain. OnDeck is unique in the peer group from their utilization of whole loan marketplace sales. We note that the usage of this liquidity channel continues to decline over time as gains-on-sales from whole loans decrease, and as investors demand more ‘skin-in-the-game.’
OnDeck also utilizes both securitization and credit facilities for their funding. Securitization makes up 24% of their loan funding, while their utilized credit facilities comprise 50% (although ONDK still has $287 MM undrawn).
OnDeck has the highest loan generation per unit of capital in the cohort. OnDeck is funding through the heavy usage of low-cost securitization and warehouse finance channels, and accordingly has the lowest funding cost in the peer group. However, we note OnDeck has more concentrated sources of funding channels that in turn rely on reliable execution and smooth functioning capital markets.
Enova
Enova employs all three debt financing tools—ABS, warehouse finance, and corporate debt—to fund origination. Enova had no facility borrowing amount reported as outstanding at the end of 2016.
Elevate
Elevate, as a young online lender measured by receivable and inception, does not have any securitization programs to date and limited diversity in warehouse finance. Elevate’s primary source of financing consists of credit facilities provided by Victory Park Capital. Of the four platforms, Elevate has the least diversity in funding sources. The peer analysis suggests that diversification into securitization channels could potentially lower cost of funds for Elevate.
Funding Cost by Financing Channel
As observed in Exhibit 3, securitizations can partially replace secured and unsecured debt in the capital structure with more favorable non­recourse funding. The overall funding costs are positively impacted by the increased usage of securitizations and credit facilities, as the deals are executed at interest rates significantly below the coupon associated with the unsecured debt.

Source: PeerIQ

Issuers that that take the long-view and develop a competitive advantage in financing & liquidity stand to slingshot past their competitors when the cycle turns.

P2P Lender China Rapid Finance Sets Terms for US IPO (Crowdfund Insider), Rated: AAA

China Rapid Finance, a peer-to-peer (P2P) lender based in Shanghai, China, announced that it has set the terms for its upcoming US IPO. The company plans to raise $105 million through the offering of 10 million shares priced between $9.50 to $11.50 a share. At $10.50 a share, China Rapid Finance would have a fully diluted market value of $586 million.

Founded in 2001, China Rapid Finance is a consumer lending marketplace that aims to serve China’s emerging middle class. Their target demographic are employed and well-educated Chinese individuals between the ages of 18 and 29, who live in urban cities, and who are avid mobile users. This demographic, known as EMMA (Emerging Middle class Mobile Active), is estimated to include over 500 million individuals.

Are you too neurotic? Lenders test personalities to determine loan eligibility (Tearsheet), Rated: AAA

When no credit history is available, lenders in emerging markets are increasingly looking to personality tests to fill the gap. Psychometric data, or data acquired through personality tests, is now being used to determine if customers qualify for credit in countries like Turkey, Russia, Mexico and India. Some assessors look at traits like conscientiousness, extroversion, agreeableness and neuroticism. For example, if someone ranks high on conscientiousness, they’re likelier to be better at saving, thus more secure financially.

The method has yet to go mainstream in the U.S. in part due to culture, regulations and the range of data already available to American lenders.

Still, psychometric data offers another option to assess consumers for whom insufficient data is available to generate a credit score. It’s a section of the population that’s gained more attention in the U.S., where over 25 million people are considered unscoreable by the Consumer Financial Protection Bureau.

Over 700 characteristics are organized; results are crunched along with repayment data into a number that represents a credit score.

The global unscoreable population is huge, including in India where over 70 percent of the 1.2 billion-strong population fall into this category, McCaffery said.

For the past few months, FICO, working with the Entrepreneurial Finance Lab, has been testing psychometric testing in Turkey, Russia and Mexico. While it’s too early to offer definitive assessments, FICO is optimistic about the model’s ability to deliver results.

Before launching psychometric data in the U.S., Taylor-Shoff said lenders would need to ensure compliance with regulations including those on consumer disclosure (e.g. being able to explain to someone why they were denied credit); fair lending (making sure the method doesn’t disadvantage a particular type of customer) and safety and soundness of the data. Operational considerations, including how lenders would use this method alongside traditional methods , would still need to be resolved too.

“U.S. consumers are not going to submit to a psychometric analysis by their lender,” said Zeydoon Munir, founder and CEO of RevolutionCredit, a startup that uses behavioral data garnered from quizzes and games, in addition to traditional data, to determine if customers qualify for certain credit products. “Who would do that?”

Fifth Third Bank Expands Partnership With Accion U.S. Network (Crowdfund Insider), Rated: A

Fifth Third Bank announced on Thursday an investment and expanded partnership with nonprofit small business lender network, Accion U.S. Network, to support lending to underserved small businesses in Florida, Indiana, Illinois, Michigan, and Ohio.

This builds upon the bank’s five-year, $30 billion Community Commitment, which includes $10 billion for small business lending, product innovation and enhanced underwriting and fulfillment. Additionally, the Fifth Third Bank’s  commitment includes expanding technical assistance and support for alternative lending channels.

Fintech Report Card: March 2017 (Riskalyze), Rated: A

What happened: eMoney Advisor announced on March 23 the launch of eMoney for Enterprise, a division that will support users in the home offices of banks, large registered investment advisors, broker/dealers, insurance companies and other financial institutions.

What happened: The new product is likely to target individuals with less than $1 million to invest, a significantly larger market than Goldman Sachs’ current private wealth management service that caters to clients with at least $50 million. Their acquisition of Honest Dollar and the launch of a loan platform called Marcus suggest that this robo venture is part of a larger diversification strategy.

What happened: The Office of the Comptroller of the Currency pressed ahead with its plan to offer a specialty license to fintech firms, a move that would allow the industry to enter the federal banking system. Currently, fintech firms must apply for licenses in each state to do business, which can be a costly process. The new federal banking license would allow for one set of rules nationwide.

Why it matters: Thumbs up for allowing fintech firms to focus on innovation rather than paperwork. Removing the handcuffs of redundant licenses will surface relevant technology even faster, and I think we’ll see advisor confidence in fintech platforms continue to rise.

What happened: Morgan Stanley is continuing its technology surge after hiring Charles Schwab’s Naureen Hassan as Chief Digital Officer and appointing Jim Rosenthal to lead the development of the company’s digital services, which includes tentative plans for a self-directed robo platform.

What happened: Merrill Lynch is introducing new features to its website, such as a dashboard to track investments, real-time maps of the markets and interactive charts.

What happened: MIT and TD Bank hosted their first fintech hackathon, an event challenging 26 student teams to develop a fintech platform in under 36 hours. A team from Cornell University and their product called Switch, which they describe as a micro-loan and insurance broker, took home the $5,000 prize.

US robos move to ‘hybrid’ automated advice models (IFA), Rated: A

Adviser Intelligence founder and chief executive Jacqui Henderson said in a blog that some of the biggest US robo advisers are now adding humans to their advice services.

“Last month, the second largest robo in the US, Schwab, also combined its automated investment management technology with human advisers for its clients with at least $25,000 to invest.

“These moves by the biggest robos in the world are a sure admission that we are a long way off from a fully automated model becoming a reality.”

Oracle Powers DecisivEdge’s Lending/Leasing as a Service Product (Monitor Daily), Rated: B

DecisivEdge, a business consulting and technology services company, launched its lending and leasing as a service (LLaaS) product, powered by Oracle.

LLaaS is a simple, flexible, securely featured and cost-effective way for small and medium sized lenders to the leverage the capabilities of a solution.

Oracle Financial Services Lending and Leasing is at the core of DecisivEdge’s offering. It is hosted in a securely featured cloud and bundled with 24/7 monitoring, support and other value added services.

HEALTHCARE LENDER HCS RECEIVES FUNDS FROM ARES MANAGEMENT (Health Credit Services), Rated: B

Health Credit Services (HCS), a healthcare funding company created to bring quality-of-life care to more individuals, announces a new financing relationship with Ares Management, a leading global alternative asset manager.

The HCS team will leverage the Ares Management-provided financing to increase patient access to quality-of-life medical care nationwide. With loan approvals in seconds, budget-friendly installment loans ranging from 12 to 84 months and simple loan management, HCS solutions make healthcare financing easy and affordable.

Due to rising insurance deductibles and premiums, the typical American spends nearly 10 percent of their income on out-of-pocket healthcare expenses.

United Kingdom

Blockchain Can Save Banks Tens of Billions of Dollars a Year (Coin Telegraph), Rated: AAA

The Bank of England (BoE), one of the first central banks to form a research group dedicated to the development of Blockchain technology, still believes the Blockchain has the potential to save banks tens of billions of dollars in operating costs.

Researchers at BoE perceive the Blockchain as an immutable, transparent and secure technology which banks and financial institutions can utilize to handle operations in an autonomous ecosystem.

BoE along with other banks including the Reserve Bank of Australia and Bank of Korea envision a Blockchain-based platform wherein many banks can participate as members of the network and settle transactions and assets in a transparent ecosystem. By relying on a shared ledger, banks can easily eliminate any additional intermediaries that are contracted to process complex settlements.

Apart from collaborative projects, BoE recently showcased a proof of concept Blockchain platform with PwC, with the intent of demonstrating the potential and applicability of Blockchain technology in the finance industry.

Pariti app shows you your debts, offers to save you money via peer-to-peer lending (9to5Mac), Rated: A

Link Pariti to your bank accounts and credit cards, and it will show you the total costs of your debts. If peer-to-peer lending would offer a better deal, it then offers you the option of consolidating everything into a single loan at a lower rate. The company says that while credit cards typically charge interest rates in the 16-25% range, it can get the APR down to single digits.

Ex-Barclays CEO Antony Jenkins: We’re ‘beginning to see some Uber moments’ in finance (Business Insider), Rated: A

Former Barclays CEO Antony Jenkins believes the global financial system is beginning to undergo the “Uber moments” he predicted in the sector a year and a half ago.

Jenkins, who was CEO of Barclays from 2012 to 2015, forecast a series of Uber-style disruptions in the banking industry in late 2015. He said that advances in technology could shrink headcount at traditional big banks by as much as 50%, while profitability in some areas could collapse by over 60%.

Since being ousted at Barclays, Jenkins has set up his own fintech business: 10X Future Technologies. The startup has developed a new core banking platform, effectively a new operating system for banking to build products and services on top off. It aims to help banks cope with the “Uber” disruption by giving them a modern canvas to build upon.

International

Over 200 Fintech Startup Finalists to Celebrate Worldwide Fintech Innovation at the Benzinga Global Fintech Awards (Yahoo! Finance), Rated: AAA

Benzinga, a leading online financial media publication and data provider, announced today the finalists for the 2017 Benzinga Global Fintech Awards.

The Benzinga Global Fintech Awards is the largest fintech event focusing on the capital markets. In its third year, Benzinga has expanded the event’s purview to the global stage, bringing over 200 companies to New York City from countries including India, Israel, Poland, and Singapore.

The Benzinga Global Fintech Awards finalists, by category:

Best Use of Alternative Investments Platform, Tool, or App

  • BankerBay
  • CFX Markets
  • ClearVest Advisers, LLC
  • CoolMellon
  • Entrex
  • Equitise
  • Frictionless Healthcare Finance
  • Income&
  • Kettera Strategies
  • Mercury Capital Advisors
  • SAF Platform
  • Seedrs
  • Swaper
  • YieldStreet

Best Analysis Platform, Tool, or App

  • Alpha Hat
  • Artivest
  • BondCliQ
  • ChartYourTrade
  • F.A.S.T. Graphs
  • NewsHedge
  • Novus
  • Orchard Platform
  • Polly Portfolio
  • TradingView
  • Web Financial Group
  • Ycharts

Best Digital Mortgage or Real Estate Platform, Tool, or App

  • Brickvest
  • BRICKX
  • BuildFax
  • Cadre
  • Morty
  • Neat Capital
  • Neighborhood Pay Services
  • PeerStreet
  • Quicken Loans / Rocket Mortgage
  • RealtyMogul
  • RealtyShares
  • Unison Home Ownership Investors

Best Education & Personal Finance Platform, Tool, or App

  • BillGO
  • Clarity Money
  • Copper Street
  • Dream Forward 401(k)
  • FinTech Business School
  • MoneyLion
  • Shift
  • SmartAsset
  • TradeBench

Best Financial Advisor or Wealth Management Platform, Tool, or App

  • Advisor Engine
  • ALBRIDGE
  • Backstop Solutions Group
  • BaseVenture
  • CBOE Vest
  • FUNDBASE
  • LendingCalc
  • Mil Advisor
  • MyVest
  • ORION
  • RobustWealth
  • STRATIFI
  • Truelytics

Best Forex Platform, Tool, or App

  • Fortex
  • FXPRIMUS
  • FXStreet
  • Markets.com
  • MarketsFactory.com
  • MobyTrader
  • Remitly
  • TF Global Markets
  • uChange

Best InsurTech Platform, Tool, or App

  • Aclaimant
  • Bought By Many
  • Coverfy
  • CoverWallet
  • Embroker
  • FitSense
  • Insureon
  • League
  • Life.io
  • Neuroprofiler
  • Senteri
  • UnBrokerage
  • WeSavvy

Best Lending Platform, Tool, or App

  • Bizfi
  • Datanomers
  • Global Debt Registry
  • IdFinance
  • InterNex Capital
  • MYJAR
  • P2Binvestor
  • PayMe
  • Rubique
  • Stilt
  • Suretly
  • Think Money
  • TWINO

Best Proprietary Technology or APIs

  • Alpha Exchange
  • Connamara Systems
  • Dataminr
  • Finicity
  • Nomad COnnection
  • OpenFin
  • OptionsCity
  • Overbond
  • Push Payments
  • Quovo
  • Redtail Technology
  • Tradier
  • Xignite

Best RegTech Platform, Tool, or App

  • AQMetrics
  • AU10TIX
  • ComplyAdvantage
  • ComplySci
  • Neurensic
  • Qumram
  • Rippleshot
  • ThetaRay
  • Trulioo
  • Trunomi
  • Uniken

Best Research Platform, Tool, or App

  • AlphaSense
  • FinanceBoards
  • MackeyRMS
  • OptionMetrics
  • PitchBook
  • Slingshot Insights
  • Sqoop
  • Street Diligence
  • Virtual Cove

Best Robo Advisor

  • Betterment
  • Clinc
  • Exeria
  • Gravity Investments
  • Polaris Portfolios
  • Scalable Capital
  • Unicorn Bay
  • Vestwell
  • Ways2Wealth
  • Wealthfront
  • Wealthsimple
  • WiseBanyan

Best Trading Execution or Brokerage Platform

  • DriveWealth
  • Fidelity
  • FINVASIA
  • Lime Brokerage (Wedbush)
  • m1 Finance
  • OptionsHouse
  • SelfWealth
  • Sterling Trading Tech
  • StocksToTrade
  • T3 Live
  • TD Ameritrade (AMTD)

Best Trading Idea Platform, Tool, or App

  • ADVFN
  • Alpaca
  • BullBoard
  • Chaikin Analytics
  • Equities.com
  • iStockPicker
  • SharingAlpha
  • Stocks For The Week
  • TalkMarkets
  • Ticker.tv
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  • Trade Ideas
  • Tradespoon
  • Trumid Financial
  • Vest Cycle
  • Vetr

Best Under-banked or Emerging Market Solution

  • Amplify
  • Billmo, LLC
  • Eastpesa Limited
  • Elevate
  • FarmDrive
  • Ovamba
  • PayActiv
  • Ping Express
  • WorldRemit

Best Use of Blockchain or Bitcoins

  • AlphaPoint
  • Blockchain
  • Brave New Coin
  • I/O Digital
  • Melonport
  • Netcoins
  • Paxos
  • Purse
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Finding Alpha

  • AlphaStreet
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Institutional Innovators

  • Bond Price Validation
  • Bridge Financial Technology
  • ChartIQ
  • Cloud9 Technologies
  • Intro-act
  • Marstone, Inc.
  • Opportunity Network
  • Veriday

Investing In Millennials

  • Aspiration
  • EZMCOM Inc
  • GRAIN
  • Lean Financial
  • MATADOR
  • Payscape
  • SprinkleBit
  • STASH

Leveling the Playing Field

  • CALL LEVELS
  • Capitali.se
  • Click IPO Securities
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  • finbox.io
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Solving Problems Through Payments

  • Alipay
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  • PayKey
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  • RenovITe Technologies Inc
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  • Spendesk
  • SWITCH Inc
  • Zebit
  • ZOOZ
China

China bank lending falls in March; other credit up (Marketwatch), Rated: AAA

Chinese banks scaled bank lending last month, though other forms of credit outside the traditional banking system rose sharply, official data showed.

Chinese financial institutions issued 1.02 trillion yuan ($148 billion) of new yuan loans in March, down from CNY1.17 trillion yuan in February, the People’s Bank of China said Friday.

Total social financing, a measure that includes nonbank credit such as trust products, stood at CNY2.12 trillion in March, up sharply from CNY1.15 trillion in February

Hong Kong’s Central Bank is Trialing a Digital Currency (CoinDesk), Rated: A

Hong Kong’s de facto central bank is developing a prototype digital currency.

The disclosure came in a Hong Kong legislative document published by the Legislative Council Panel on Financial Affair this week and dated 18th April.

India

Indian Fintech Startup Perfios Raises $ 6.1M in Series A (Crowdfund Insider), Rated: AAA

Last week, Perfios, a fintech startup based in Bangalore (Bengaluru), India, announced it had raised approximately US $6.2 Million (400 Million INR) in its Series A round of funding. The funding is a sign of how much the fintech market has been steadily growing in India the last few years.

The report estimates that the fintech market in India will rise to over USD 2.4 billion by 2020.

The Series A was funded by Bessemer Venture Partners, a venture capital firmed based in New York.

Asia

P2P financing kicks off in Malaysia (The Edge Markets), Rated: AAA

The peer-to-peer (P2P) lending industry is off to an encouraging start. Funding Societies Malaysia, the first platform to launch, successfully raised RM320,000 for two term loan financing programmes within three weeks in March.

The loans will be used to fund the working capital of two companies – an electronics business and an automobile parts distribution business. Meanwhile, the platform aims to provide investors with an effective return of 22% and 24.91% respectively over a year.

Wong says the platform aims to seal another 80 to 100 deals in the next 12 months and raise RM10 million to RM20 million. This means investors can expect more deal flows, which will allow them to invest in a variety of companies.

Small countries like Singapore, Switzerland must cooperate in fintech: Swiss Finance Minister (Channel News Asia), Rated: A

Singapore and Switzerland are not competitors when it comes to the development of financial technology (fintech) and with both countries being small financial hubs, it is important to cooperate, said Swiss Finance Minister Ueli Maurer.

The minister also noted that Singapore’s fintech sector benefits from its close proximity to a big Asian market, and can act as a stepping stone into Asia for Swiss fintech start-ups. For Singapore firms looking to expand into Europe, Switzerland can similarly do the same.

Lattice80 is one of the organisations that the Swiss delegation is visiting during their time in Singapore. Launched in November 2016, more than 80 foreign and local fintech firms have taken up spaces at Lattice80, which is dubbed the world’s largest fintech hub by Singapore-based private investment group Marvelstone.

Bank Negara Malaysia’s FTEG calls participants for ‘Fintech Hacks’ initiative (EconoTimes), Rated: A

The Financial Technology Enabler Group (FTEG) that was established by Bank Negara Malaysia in June 2016, has launched an initiative ‘Fintech Hacks’ that identifies pain points in the delivery as well as consumption of financial services.

The Malaysian central bank has sought ideas from the public regarding the improvements to financial services sector by adopting innovation and technology.

MENA

Abu Dhabi ranks as the Top FinTech Hub for MENA Region (Emirates 24/7), Rated: AAA

Abu Dhabi with the Abu Dhabi Global Market, ADGM, has been ranked as the top FinTech Hub for the MENA region in the latest Global FinTech Hubs Review, “A Tale of 44 Cities”, by Deloitte in partnership with the Global FinTech Hubs Federation.

From the 44 cities, Abu Dhabi is ranked top FinTech hub in the MENA region. The Deloitte report reiterated that the launch of ADGM’s Regulatory Laboratory, RegLab, for FinTech startups, the only “live” Fintech regulatory regime in the MENA region with 11 Fintech players in its first batch of applications, as a “milestone success for Abu Dhabi and marked the openness and support by regulators and government towards innovation.”

Africa

Boost for crowdfunded businesses in South Africa (Times Live), Rated: AAA

In an alternative funding benchmarking report by the Cambridge Centre for Alternative Finance‚ published last month‚ South Africa was identified as the potential leader in the growth of online and peer-to-peer lending models in Africa.

In 2015 South Africa represented 18% of the total African online alternative finance market‚ raising over $15-million. Kenya was the only African country ahead of it with $16.7-million raised.

The report also found that in Africa 90% of online alternative finance was originated from platforms headquartered outside of the continent.

Authors:
George Popescu
Allen Taylor