This past year, significant efforts have been made by the SEC, FINRA, state regulators and CSBS to streamline regulations and processes for all fintech companies. These ongoing changes have presented opportunities and challenges that impact the fintech community around the globe. Please join us for a 60-minute webinar, moderated by Manatt’s fintech leader Brian Korn, […]
This past year, significant efforts have been made by the SEC, FINRA, state regulators and CSBS to streamline regulations and processes for all fintech companies. These ongoing changes have presented opportunities and challenges that impact the fintech community around the globe. Please join us for a 60-minute webinar, moderated by Manatt’s fintech leader Brian Korn, to gain insight to the following key topics:
Updates on the bank partnership model
The latest on charter options, including the OCC fintech charter and ILCs
The state and federal enforcement agenda, including rapidly growing FTC activity
SEC/FINRA Joint Statement on Custody and Customer Protection Rules for cryptocurrency and digital investments: Paradigm shift or more of the same?
State fintech regulatory sandboxes: What are they exactly, and will more states continue to opt in?
Deal terms: How the regulatory environment is driving investor and lender behavior for originators
If you can’t make our live program on September 19, click here.
News Comments Today’s main news: Funding Circle US small biz loan portfolio surpasses $2B. JPMorgan Chase to compete with Affirm, Klarna on POS financing. Funding Circle expands into Canada. Funding Circle financial highlights. Revolut fights new allegations. Dianrong lays off 2,000. Today’s main analysis: U.S. credit card debt hits record $870B IN 2018. International P2P lending volumes for February 2019. Today’s thought-provoking […]
JPMorgan Chase enters POS financing. Point-of-sale financing is going to be the largest credit category some day. It may be sooner than we all think. Walmart has already signed on with Affirm. With JPMorgan Chase getting in on the game, there is going to be a race to see who dominates this market. There is potential for this segment of lending to make credit cards obsolete.
Funding Circle, the global small business loans platform, today announced that investors have lent more than $2 billion through its platform to small businesses in the United States. With this milestone, Funding Circle now has more US small business loans outstanding than almost 98% of FDIC-insured banks1.
Funding Circle now has more than $1 billion of small business loans in its portfolio, which means that if it were a bank it would be among the 50 largest small business commercial & industrial loan portfolios in the United States, according to the latest FDIC data available1. However, unlike a bank, Funding Circle provides a single financial product. Its fully amortizing business loans, powered by sophisticated technology and proprietary credit models, enable business owners to access financing with speed and efficiency, allowing them to devote more time to delivering their product or service to the market and ultimately create more jobs and vitalize their communities.
Discount-store shoppers may soon get an unexpected benefit: better odds when applying for personal loans from Discover Financial Services.
Discover, best known for its credit cards, plans to use artificial intelligence to assess hundreds of unusual characteristics about personal-loan applicants in an attempt to get its rising losses under control.
U.S. credit card debt hit $870 billion — the largest amount ever — as of December 2018, according to the data from the Federal Reserve. Credit card balances rose by $26 billion from the prior quarter.
Nearly 480 million credit cards are now in circulation — up by more than 100 million since hitting bottom after the recession a decade ago.
At the end of last year, credit cards were the fourth-largest portion of consumer debt in the U.S. after mortgage, student loan and auto debt. But the quarterly increase in credit card debt was faster than the other categories. Overall debt reached a record $13.5 trillion.
Louisville, Milwaukee and Oklahoma City are the metros where median rents are cheapest when compared to median mortgages. In these areas, median rent costs are an average of $310 cheaper than median mortgage costs.
Miami and Orlando, Fla.; and Virginia are the metros where rent payments are the most expensive when compared to mortgage payments. Median mortgage payments are an average of $215 cheaper than median rent payments in these metros.
Four of the top 10 metros where monthly rents are higher than monthly mortgage payments are in Florida. According to a recent housing study from Harvard University, low wages and too few rental units are key factors that have caused Florida’s rental affordability crisis to become the worst in the nation.
Ohad Samet has spent his career working on lending analytics — first, at a firm called FraudSciences, which got bought by eBay. He ran analytics at Analyzd, which was acquired by Klarna. As the chief risk officer at the pay later lender, he became aware of how antiquated the debt collections industry was. Call centers, dialing for dollars, it just hadn’t kept pace with the front end of the business.
So, in 2013, he left and with two co-founders started TrueAccord, which is essentially a nearly-automated marketing and sales campaign for debt collection. Based on consumer data and data from the lender, it can determine who to call, what time to call, what communications channel — phone, text, email, chat — and what message to use. It purports to be a much better experience for consumers.
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to five classes of notes (the “Notes”) issued by Kabbage Asset Securitization LLC, Series 2019-1 (“Kabbage 2019-1”).
This transaction is Kabbage, Inc.’s (“Kabbage” or the “Company”) third securitization and it is expected that the proceeds of the sale of the Notes will be used to refinance the Company’s existing $610 million outstanding Kabbage Asset Securitization LLC Series 2017-1 Notes and provide extra funding capacity for Kabbage.
Beehive, a peer to peer lending platform servicing SMEs in the MENA region, has closed on $4 million Series B funding round, according to a release from the platform. This most recent funding brings the Fintech’s total raised to $15.5 million since platform launch.
In recent LendingLife news, loanDepot announced its new digital mortgage, which it says can identify significant time and cost-savings for borrowers in seven minutes.
The lender claims its digital mortgage, mello smartloan, can now close a loan in just eight days. And, loanDepot is not alone in launching a new lending product promising big results. Chase Home Lending now claims it can close on a borrower’s mortgage in as little as three weeks.
Small business financial services platform Company.com is integrating a solution into its offering through which small firms can access external financing.
Company.com said in a press release this week that it is rolling out its Business Funding Marketplace, which will integrate into its STAC Platform, to help small and medium-size businesses (SMBs) with their unique financing needs and match them with an appropriate financing offering.
AI Foundry, an artificial intelligence (AI) platform company, today announced the launch of its next-generation Cognitive Business Automation Platform along with a new Agile Mortgages solution. This patent-pending technology incorporates the latest in AI, machine learning and machine vision to deliver a higher level of problem solving and decision making for enterprises. The new Agile Mortgages solution, which is built on top of the platform, automates manual, labor-intensive mortgage processes, enabling lenders to dramatically accelerate the lending lifecycle.
Americans originated a record 2.5 million auto loans in July 2018, the most recent month for which data is available.
Americans owed more than $1.14 trillion in auto loans as of September 2018, 23% more than 2013.
Outstanding auto loan balances are rising about 3.1% a year in dollar amounts.
Auto loans accounted for about 8% of outstanding consumer debt in 2018, including mortgages, about 2 percentage points higher than a decade earlier.
Gen Xers carry the highest auto loan balances with a median of $18,741 and are the most likely of other age groups to have a car loan.
The average new car loan originated by a finance company is $29,921.27, an increase of more than $5,000 from 10 years earlier.
Average monthly payments are rising, too:
$530 for new vehicles, up 5% year over year
$381 for used vehicles, up 4%
$430 for a new vehicle lease, up 4%
For many Americans, car loans are their largest debt burden, a weight which threatens to become overwhelming as they stretch loan terms to buy increasingly expensive vehicles — new and used. To get the full picture of auto loan debt in the U.S., we looked at auto loan originations, prices and term lengths. Here are the numbers.
Digital bank Chime has tripled its valuation, officially passing the $1 billion-mark this week.
The San Francisco-based company announced a $200 million Series D financing round that brings its new valuation to $1.5 billion. Investors were led by DST Global, which also participated in earlier fundraising rounds, and new investors Coatue, General Atlantic, Iconiq Capital and Dragoneer Investment Group, Chime said Tuesday.
FINRA has given their stamp of approval to the acquisition of SeedInvest by Circle. The crypto focused company announced the purchase of SeedInvest in October of 2018. The acquisition of a regulated securities crowdfunding platform by the blockchain based Circle represented a seminal turning point in the crypto industry.
Virginians are taking a lead attacking what they say is a legal loophole that has left thousands of people stuck with debt they can’t escape.
The case involves loans at interest rates approaching 650 percent from an online lender, Big Picture Loans, associated with a small Indian tribe on Michigan’s Upper Peninsula.
Lula Williams of Richmond, the lead plaintiff in one case, still owes $1,100 on the $1,600 she borrowed from Big Picture Loans — debt that she’s already paid $1,930 to retire. One of her loan documents reports the annual percentage rate for her debt at 649.8 percent, calling for her to pay $6,200 on an $800 debt. Her first three installments on that loan, each for $400, would have yielded Big Picture a 50 percent profit on the loan after just three months, court records suggest.
Lastly if you love jumping on the latest trends, then jumping on one of these companies services that how recently cropped up will help you get involved in real estate investing. You are able to invest in commercial and residential real estate investments and receive cash flow distributions in return, and just like the other options on this list, someone else is doing the heavy lifting whilst you reap the rewards.
Whilst there is no one standout company that we can confidently recommend, since they all havent been around long enough for us to make a property judgement, Fundrise returned an average of 11.4% on the invested dollars in 2017 and a further 9.11% in 2019.
The best part is you don’t even need to be an accredited investor to open an account, meaning if you’re new to the market, then this is your chance to get in on something thats shiny and new and that could potentially give you a place to invest your cash and reap the rewards of owning physical property.
Elevate Credit, Inc. (NYSE: ELVT) (“Elevate” or the “Company”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced that it has promoted Kathleen Vanderkolk to Chief Risk Officer.
Vemanti Group, Inc. (OTC PINK:VMNT), a technology-driven holding company, today announced that it has engaged with Securitize, Inc. (“Securitize”) and Digital Securities Law Group (“DSLG”) to launch a Digital Security Offering (“DSO”) to fund and propel the business objectives for eLoan, JSC (“eLoan”), its portfolio company. The Company recently announced that it has completed its investment in eLoan, a fintech company based in Vietnam.
The offering will be conducted by the Company on behalf of Fvndit, Inc. (“Fvndit” – formerly Directus Holdings, Inc.), eLoan’s US-based parent company, as the issuer. The issuance will be managed by Securitize’s platform and DS Protocol. Details of the offering will be announced at a later date.
Funding Circle, the leading small business loans platform in the UK, US, Germany and the Netherlands, today announced its plans to enter the Canadian market and expand access to fast, affordable and transparent financing for Canadian small businesses.
Funding Circle will establish operations in Canada in the second half of 2019 with an office located in Toronto. The business will be led by Tom Eilon, who previously led the commercial strategy for Funding Circle in the United Kingdom.
The UK Peer-to-Peer Finance Association(P2PFA) has published fourth quarter numbers for member platforms. According to their data, cumulative lending now tops £9.5 billion with over £800 million originated during the period.
The P2PFA states that platforms facilitated loans worth nearly £3 billion during 2018.
In Q4, P2PFA platforms originnated £527 million to businesses and £282 million to almost a quarter-of-a-million consumers. Cumulative lending among P2PFA platforms has now exceeded £5.5 billion for business lending and £4 billion for consumer lending.
The Financial Times on Tuesday alleged that the UK National Fraud Intelligence Bureau (NFIB) is examining a complaint from a customer, adding to Revolut’s issues after a difficult week for the fintech.
However, the allegations were denied by Revolut and the Financial Times article was subsequently taken down.
The FT, citing emails, reported on an incident in which £70,000 was incorrectly paid into a Revolut customer’s account.
At barely three years old, the Innovative Finance Isa still has some proving to do. And for some savers, it’s a product that is deemed too risky. But how risky is it really?
Of course, the IFISA is merely a tax-free wrapper, so the risk actually depends on the underlying investments held within.
And while investments can vary wildly, most IFISAs are invested in the peer-to-peer (P2P) lending market, where lenders are grouped together to invest capital through an online platform which distributes funds to borrowers.
Last year, the National Trust was criticised for investing in a fund with holdings in fossil fuel companies, while the Church of England was shown to have ploughed funds into Wonga, despite having publicly criticised the payday lender.
China-based peer-to-peer (P2P) lender Dianrong has laid off as many as 2,000 employees and will shut down 60 of its 90 brick-and-mortar outlets, which helped verify the identities and qualifications of users, according to Bloomberg, citing people familiar with the matter.
Additionally, the company has been accused of falling behind on wages and severance pay, per a Chinese media outlet cited by TechNode . The company reportedly started shrinking its business around 10 months ago, despite securinga $70 million funding round in January to expand its services, including SMB lending.
Merchants and customers are now transacting under PSD2 and GDPR in the European Union (EU) — regulations that allow a greater window into how customer data is being used. While these regulations are aimed at increasing consumer trust by allowing them more transparency, many consumers in the region are still adjusting.
French regulatory body, the Commission nationale de l’informatique et des libertés (CNIL), has fined Googlethe equivalent of $56 million for noncompliance with GDPR within the region, alleging that the information services company was using EU customer data for advertising purposes without obtaining clear consent from those customers.
For third-party providers, such as P2P lending and investment provider Zopa, PSD2’s data transparency rules provide an opportunity to “level the playing field” when it comes to gaining that consumer trust.
$105 million round led by NBCUniversal and venture arm of its parent company Comcast. NBCUniversal is now their largest shareholder.
$70 million Series C from American Express Ventures and the Healthcare of Ontario Pension Plan (HOOPP). The company originated $1.3B in mortgages in 2018.
The $65 million Series B round was led by RPM Ventures as CEO Mike Cagney continues to show his fundraising prowess. Their valuation is said to be $365 million today about double the valuation from last year. Read our coverage here.
After twelve years spent investing in impact-oriented financial services startups around the globe, the Omidyar Network, which serves as the family investment office for eBay founder Pierre Omidyar, is spinning off its financial inclusion investment arm as Flourish Ventures.
Equipped with up to $300 million in capital for operations and investments, the new Flourish will continue to invest around the Network’s core mission of backing companies with a dual focus on making a social impact and achieving quality financial returns.
Everus is a multi crypto wallet that allows for payment of bills and for mobile top-ups in multiple crypto and management of multiple crypto. The wallet, which is part of an ecosystem featuring bill payment, marketplace, peer-to-peer lending and micro-finance; allows customers to send, receive, store and withdraw multiple cryptocurrencies (more than 50 currently).
Peer-to-peer lending will allow people to offer and accept microloans affordably, which will be more targeted to the un-banked.
Other features to be added soon include crypto lending where users can lend crypto and earn profits, exchange integration to allow users to exchange crypto from the wallet, fiat gateway to let users purchase crypto with fiat, digital identity and KYC where users can register their digital identity and use it everywhere else without needing to create another one, news portal to furnish users with happenings in the crypto space, and App Square for browsing dApps.
It links to other parts of the company’s product ecosystem including decentralized exchange to allow users to buy and sell crypto, a licensed crypto bank, Prepaid co-brand bank cards, a decentralized peer-to-peer lending for borrowers as well as merchants, individuals, corporate, financial and non-financial institutions as well as crypto-fiat payments for merchants and 100% legal fiat-crypto-fiat transactions regardless of region and legislation.
Monexo ensures less risk for lenders by keeping a lender’s contribution to a loan to only Rs 1,000. So if a Monexo customer lends Rs 1 lakh on the platform, it gets split across 100 loans.
Faircent also has a similar strategy. It does not allow lenders to lend more than 20% of a single borrower’s requirement. So for an average loan of Rs 1 lakh, there will be on average 43 lenders funding that. They also advice lenders not to lend beyond Rs 5,000-7,000 for one loan.
Lack of access to finance is the most widely cited constraint by SMEs for growth and scaling up business. Generally commercial banks perceive SMEs fall in the category of high default risk due to limited collaterals, smaller in asset size and limited historical track record.
Deputy Prime Minister Vuong Dinh Hue has asked competent ministries and sector to enhance inspections, supervision and settlement of violations related to peer-to-peer (P2P) lending model which has been springing up in Vietnam in recent two years.
Today, Klarna, a global payment provider, announces a partnership with Canadian instant financing provider, PayBright. Klarna and PayBright are joining forces to give Klarna’s 100,000 global retailers the ability to turn on a consumer finance solution for their Canadian shoppers quickly and easily.
News Comments Today’s main news: 3 Reg CF portals no longer FINRA-approved. Zopa launching a bank. LexinFintech completes $108M IPO. European banks prep for PSD2. Australia releases second MPL survey. Today’s main analysis: PeerIQ’s MPL Loan Performance Monitor. Today’s thought-provoking articles: 2017 was a wild ride for alternative lending. Is Congress expanding credit for the poor or enabling high-interest rates? Megatrends […]
Banks get ready for overhaul through PSD2. AT: “The big question on the table is whether open banking in Europe will filter over into the U.S. I think it will, but it will take some time. Americans don’t like changes that place quickly.”
But as 2017 pulled into the station, it became clear that a decade-long era in financial services was officially drawing to a close, other than this transitional year between what was and what’s next.
It became clear that Act I of digital era financial services was drawing to a close – and that Act II is getting warmed up backstage.
The CFPB has spent a year generating surprising questions – with even more surprising answers.
Moreover, there was some thought that the federal courts might render much of the discussion moot, by ruling the CFPB’s independent structure rendered it unconstitutional in the CFPB v. PHH case.
That ruling was thrown out by a three-judge panel of the D.C. Circuit court of appeals, and a final ruling is still awaited.
The Congressional Review Act (And The Fate Of The Old Rules)
The 20-year-old law, which had only been used once before 2017, has been used 15 times since January of last year to undo Obama-era rules.
The law was effectively used to bounce the CFPB’s arbitration rule from going into effect. That rule would have made it illegal for financial services companies to insert mandatory arbitration clauses into consumer contracts, thus forcing consumers to surrender their right to form class-action lawsuits.
A similar maneuver was attempted to block controversial rules the CFPB passed regarding the regulation of prepaid cards. The House approved the CRA resolution, but the bill was unable to garner majority support in the Senate. That means going forward, prepaid cards that offer overdraft protection will be regulated as though they are credit cards, as opposed to debit cards.
The Future Of Innovation Instead Of Regulation
Affirm, founded by PayPal’s Max Levchin, built a POS financing product dedicated to offering consumers an honest, transparent way to pay for items on installment.
Affirm’s mission to expand consumer access to honest financing will rev into high gear next year, on the heels of a $200 million capital raise on an estimated $1.6 billion valuation, and now with the ability for any consumer to take advantage of its credit option at any merchant.
LendUp wants to calibrate financial services to what it calls “the new average consumer” or the “emerging middle class.”
EVEN’s new partnership with Walmart is a new tool to help smooth the income volatility for its workers by allowing them to be paid in real time for the hours they have already worked, instead of having to wait for the traditional payday.
“This isn’t that people just don’t have the money to pay their bills in general, but that they are forced to make bad decisions because the money they have already earned by working is not available to them at the right time,” EVEN CEO Jon Schlossberg told Karen Webster. “That adds up to a $100 billion industry a year in payday loans and late fees. That’s crazy; we can fix that and we should fix that.”
So EVEN – now with Walmart as a partner – is fixing it, both by giving customers access to their funds early, but also by providing access to financial management software so they can better control their money.
This week, we introduce our redesigned MPL Loan Performance Monitor where we track the delinquency rates, cumulative losses, and transition matrices on public marketplace lending data that is comprised of loans originated by LendingClub and Prosper.
Ken Rees has made a fortune selling loans with triple-digit interest rates to borrowers with poor credit history or no credit history.
But in 2008, federal regulators ordered First Delaware to stop working with payday lenders — including ThinkCash — so Rees changed his company’s name to Think Finance and started striking deals with Native American tribes, which, as sovereign entities, are also exempt from state usury laws. Think Finance filed a still-pending lawsuit claiming Think Finance used the tribes as a front to make deceptive loans. Think Finance denies the charges and Rees started a new company, Elevate Credit, which operates from the same building in Fort Worth, Texas. Elevate deals in online installment loans, a cousin to payday loans, and partners with a Kentucky-based bank to offer lines of credit with effective annual interest rates much higher than would otherwise be allowed in some states.
Sponsors say the Protecting Consumers Access to Credit Act facilitates bank partnerships by ensuring third parties like debt buyers and rapidly growing financial technology firms can buy, and collect on, loans originated by federally regulated banks regardless of state laws governing interest rates. These partnerships can help make credit available to those left out of the traditional banking system, primarily low-income individuals, backers say.
“The bill covers every flavor of online lending,” said Adam Levitin, a consumer law professor at Georgetown University. “Some members of Congress have gotten snookered that they are fostering innovation, but a loan is just a loan whether you do it online or not.”
But now more payday-style lenders are moving online and donning the friendly face of a tech startup. Some, like LendUp, a lender charging more than 200 percent on some loans and counting Google Ventures among its investors, have attracted mainstream support. Like many high-interest online lenders, LendUp says it is “a better alternative to payday loans” because they use alternative data sources to determine interest rates but consumer advocates say the product, a high-interest loan that can quickly lead to a cycle of debt, is essentially the same thing.
Elevate said in an email it is committed to lowering rates further, and said its loan terms are more transparent and it doesn’t charge expensive fees associated with payday lenders.
Elevate’s installment loan called RISE is licensed in 17 states that don’t impose interest-rate caps and charges annual interest rates as high as 299 percent. Elevate says repeat borrowers can eventually qualify for interest rates as low as 36 percent on subsequent loans.
Ufunding was the first to depart FINRAs list of approved platforms. In hindsight it is a wonder the platform was ever approved. The action by FINRA took place a little over a year ago as “potential for fraud” was evident on Ufunding as was “an almost complete failure to follow disclosure and filing requirements.”
DreamFunded Marketplace has hit the exit. We are not certain exactly why DreamFunded left but, if one speculates, it is most likely due to the fact real estate investing is better suited for Reg A+ and Reg D crowdfunding rules which allow issuers to raise more money.
The other former CF platform is Crowdboarders out of Texas. Crowdboarders appears to have pivoted to more of a promotional platform.
Not long ago, Indiana’s Peoples Bank SB had a business prospect come in who had a loan with Kabbage, the online lender, at 20%. “We reviewed their credit, and we got them into the bank at close to 5%,” says Benjamin Bochnowski, president and CEO at the $914.2 million-assets bank.
With credit that was worthy of a rate like that, the bank asked the customer why it had gone to Kabbage in the first place—and been willing to pay nearly 15 percentage points more for credit. Simple, the new customer responded. Kabbage was easy to use and delivered the proceeds of the loan quickly.
P2Binvestor CEO Krista Morgan founded P2Binvestor in 2012 with a mission to help growing businesses succeed. Morgan is not only CEO of a fast growing Fintech, she is also the cohost of the podcast “Women Who Startup Radio”, an ardent mentor to other women entrepreneurs who speaks regularly on business finance, fundraising, and scaling a startup.
I recently connected with Morgan via email to learn her 2018 predictions for the Marketplace Lending sector and more specifically, her predictions for P2Binvestor. Her observations follow:
More focus will be placed on business models and profitability
Platform mergers and shut downs will occur as equity investors remain on the sidelines
Capital will start to look for shorter duration assets
The conversation about diversity will continue
When asked what PB2i has in store for 2018, Morgan targeted the platform’s growth in four areas:
Bruce Parker, Modo CEO: Modo creates interoperability in the payments industry by conducting the exchange of data between systems via our translation utility service. Modo allows clients to bring together capabilities from around the payments and commerce industry by directly solving for interoperability between different payment systems.
We’re doing this for some of the biggest names in the payments game: Bank of America CorpBAC, VeriFone Systems IncPAY, FIS, Klarna, and Alliance Data Systems CorporationADS, and are proud to say that list is growing.
Who are your customers?
Banks, networks, payments providers and their partners.
Other topics touched on during the interview with Mr. Brummer included how fintech can and should improve financial inclusion—and the continued need to eradicate banking deserts—as well as the necessity to better coordinate and launch public-private partnerships. Despite PayPal’s notable profile and 210 million users, it operates in a $100 trillion industry with approximately 1% market share—and there are still nearly 2 billion people around the world who live outside financial mainstream.
The CARD Act of 2009 disrupted student credit card marketing with a means test and parental approval for certain types of accounts. The market, which used capture about 12% of total card consumer spend now only contributes a fraction.
The American Banker covered an interesting story about how BankMobile, a digitial only bank with 800 university partners, is attempting to build a model based on academic history and how they maintained their student bank accounts.
In 2016, the real estate crowdfunding industry produced 3.5 billion dollars in a market that has largely gone unnoticed. It’s anticipated by 2025 that the industry is going to be valued at more than 300 billion. Three trends emerged in 2017 that can help the informed investor understand the best approach to this dynamic and explosive industry.
Investors Move Toward Institutional Capital
Non-Accredited Investors Gain Steam
Consolidation allows for the emergence of new players
In addition to commercial space and two market-rate residential lofts, the two-story Jolene’s complex will also contain an 11-room SRO, or single-room occupancy, a dorm-like living arrangement where each resident gets their own 100-square-foot bedroom and access to shared common space. Six of the room will be given to working homeless Portlanders, as part of a partnership with the Street Roots non-profit, while the other five will be rented out to the general population for $425 a month.
After seeing that 90 percent of the participants in Fair-Haired Dumbbell were from Portland, they experimented with a slightly different form of crowdfunding that allowed anybody in Oregon making $70,000 a year or more to invest $3,000 or more in the project (technically, it’s taking advantage of Rule 504 of Regulation D, qualified by the SEC and the Oregon Secretary of State).
What does your company do? What unique problem does it solve?
Karl Swierenga, founder: EquityStat is an online investment portfolio manager. It allows investors to track and manage their stocks, mutual funds and ETFs, online in the cloud. Many investors own a combination of stocks, bonds, mutual funds and ETFs.
Who are your customers?
Our customers are individual investors who own mutual funds, stocks, bonds and ETFs.
FindBob () announced today that its seed round is closed at over $1.25 million USD. Grinnell Mutual led the investment.
The capital will allow FindBob to grow its sales and marketing teams, expand into additional U.S. markets and execute on its multi-generational product roadmap.
FindBob champions better transition behavior among financial professionals and their firms in order to perpetuate and protect their most precious asset: their book of business. By allowing company principals to take control of their futures on a secure digital channel, FindBob helps them safely discover opportunities to buy, sell, merge, partner or address succession and to be confident in their plan for the business they worked so hard for.
On December 19, 2017, our Board of Directors and Nikul Patel mutually agreed to change Mr. Patel’s position to Chief Strategy Officer, effective January 1, 2018. He currently serves as Chief Product and Strategy Officer, a position he held since November 2016.
Leading comparison websites have removed potentially misleading information from their sites after a Moneywise investigation found peer-to-peer (P2P) investment products included in the same best buy tables as high street savings products.
Moneywise looked at the UK’s leading product comparison websites and found issues with the four sites which offer P2P comparisons – Go Compare, Love Money, Money.co.uk and MoneySuperMarket.
A decade after the credit crunch, too many small and medium-sized enterprises (SMEs) in the UK still feel their potential is being hampered by a lack of access to appropriate financing. The government’s Industrial Strategy report, published at the end of November, identified financing issues as a clear problem for SMEs that are looking to grow; surveys of sentiment continue to reveal frustration.
Research from Hitachi Capital Business Finance shows that two-thirds of SMEs with growth plans for the year ahead fear that their expansion plans could be derailed if they cannot secure appropriate finance. A third of SMEs applying for finance aren’t securing enough funding to underpin their investment plans, according to similar research from Close Brothers Group; a quarter of SMEs think funding is still too dear.
In an announcement titled ‘protecting the future of P2P lending’, the Treasury said that no P2P business borrower needs to be regulated as a ‘deposit taker’ – often referred to as a ‘banking licence’ – unless that is their core business.
This clarification will be added to the Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001.
“I think we will see a strong increase in the number of Scottish businesses sourcing peer to peer lending, which matches borrowers directly with lenders, in 2018,” Hardie said. “Companies such as the Lending Crowd are currently the business world’s best kept secret, but their ability to deliver speedy transactions with attractive terms are firmly establishing them as strong alternatives to the banks.”
“A European directive being implemented in January 2018 will ban businesses from charging customers extra for making payments using a debit or credit card in the EU,” said Lynne Walker, head of business advisory at Johnston Carmichael.
LexinFintech Holdings Ltd. (NASDAQ:LX), a Chinese online lender previously known as Fenqile backed by investors including Matrix Partners and JD.com Inc., has completed a listing on the NASDAQ to raise US$108 million.
Chinese online lender LexinFintech Holdings Ltd’s shares surged in their US market debut on Thursday, as investors brushed aside worries about Beijing’s recent crackdown on China’s booming microlending industry.
LexinFintech’s shares jumped 53% from its IPO price, which valued the Shenzhen-based company at $4.5 billion, to reach a high of $14.88.
The 16 Chinese companies in 2017 raised $3.7 billion or about 8 percent of the total $35.6 billion raised by 160 IPOs.
Chinese tech titans Tencent and Alibaba are behind some of this pick-up, as they backed recent new listers including Chinese search engine Sogou, e-book company China Literature, microlender Qudian and logistics company Best.
Squeezing in its IPO before the year, Chinese online lender LexinFintech Holdings listed on Nasdaq on Dec. 21, raising $120 million and trading upward on its opening day by 19.4 percent.
China’s booming fintech sector will see growth come from small business loans, wealth management tools for the “affluent masses,” and technology that helps you sift through thousands of insurance products in minutes, according to Tang Ning, founder and CEO of financial conglomerate CreditEase.
As of September, the company’s wealth management business oversaw assets worth $20 billion for nearly 50,000 high net-worth customers in China. It also manages $1 billion through a venture fund, which is among the ten most active venture capital investors in global fintech companies, according to data provider CB Insights.
Caixin: What are the most promising fintech trends over the next decade?
Tang Ning: We see small business lending being a key area of growth. In the past 10 years, creative lending models have done a good job at serving individuals, but there is much more to be done for small businesses.
We also see the emergence of insurance tech.
How are Chinese investors’ needs changing?
We are seeing the Chinese wealth management industry go through profound changes. It is moving from fixed-income investments to equity investment, from short-term speculation to long-term investment, from China-focused investment to global opportunities, from investing into single products, single opportunity to comprehensive risk management and comprehensive asset allocation, from managing this generation’s wealth to thinking about succession planning and inheritance.
The Shanghai, China-based company plans to raise $9 million by offering 2 million shares at a price range of $4.00 to $4.50. At the midpoint of the proposed range, Golden Bull would command a market value of $64 million.
Several small lenders set up with the aim of competing with larger institutions are hoping to take advantage of the move toward a more open data infrastructure. U.K. firms Starling and Monzo, for instance, are want to make banking more like a “marketplace,” by connecting consumers with a number of products and services — including those from other providers — within their apps.
Today, banks sell few unsecured personal loans to new customers – of seven of the UKs tier one banks only two offer personal loans to new customers – instead focusing on the needs and data of their own clients. The establishing credit risk and difficulties of pricing accurately has simply made it too complex to be competitive.
Also, although many peer-to-peer lending sites now have better protection for consumers as the industry became regulated by the FCA in April 2014, it can be argued this protection is greater for savers and lenders than it is for those borrowing and that the industry is still high-risk when compared with traditional routes.
This could all be about to change with the introduction of the intertwined The Second Payment Services Directive (PSD2) and open banking regulation.
First, XS2A will significantly improve the customer experience for loan applicants.
The updated code of practice brings a number of changes. Most are simple consumer protections. Making it easier to cancel credit cards online, for example, and preventing banks from soliciting customers for credit limit increases.
It was a great year for digitalisation and digital payments in the country.
Besides reducing the merchant discount rate for debit card transactions, the Centre announced a subsidy on transactions up to ₹2,000 via debit cards to expand the digital payment ecosystem.
P2P lending boost
Also, 2017 was a milestone year for the peer-to-peer (P2P) lending industry, as the RBI issued some guidelines in October.
Other defining changes
In April 2017, five associate banks of State Bank of India and Bharatiya Mahila Bank were merged into SBI, catapulting the latter into the league of top 50 global banks.
In May, the much talked about NPA ordinance giving greater power to the RBI to handle the bad loan crisis came about.
The other key decision of the RBI this year to improve transparency in the system was the move to make it mandatory for the banks to disclose in their balance sheets the extent of divergences between the gross NPAs in their book and those determined in RBI inspection. Private sector lenders such as Axis Bank, YES Bank and ICICI Bank were found to have under-reported their bad loan assets in recent years, prompting the central bank to take this decision.
Major factors like steady decline in lending rates, strong focus and performance on growth and credit metrics in retail lending, investor interest in the segment, P2P regulation formalising the new category, increased focus on digitisation and path-breaking initiatives towards affordable housing are helping set a strong base for retail lending. Some of the big trends I see in the New Year are:
Contrary to the slowdown in credit offtake by the corporate sector, retail credit segment has registered a strong growth of around 20% this calendar year.
Mobile: India today has more than 300 million smartphone users, removing geographical constraints of access to financial products. New venture investments will drive experiments in alternate lending.
Growth in MSME lending
With around 55 million MSME units employing over 80 million people, this sector contributes about 8% to the national GDP. Around 90% of these units are classified as micro businesses.
Growth in affordable housing segment
With home loan to GDP ratio of just 9%, the Indian housing finance sector remains relatively under-penetrated when compared to its Asian peers like China (20%), Thailand (17%), and Malaysia (34%).
With the much-awaited legitimacy, the sector is only at growth radar and trust in the segment is developing at a much faster pace. With more and more people moving towards online payments and transactions, the P2P lending space will witness a remarkable rise in the number of borrowers as well as investors. The growth will not only arrive from the urban India but also from Tier II and Tier III cities, leading the country towards the national goal of financial inclusion.
As predicted by NASSCOM, the Indian fintech space is expected to reach $2.4 billion by 2020, 2018 will act as a major contributor towards this direction.
There are more than 5 crore MSMEs in India and their contribution to the Indian economy is quite significant. The Micro, Small and Medium Enterprises are creating massive employability i.e. up to 12 crore people which is close to 33% of Indias manufacturing output. But still MSMEs suffer from an incredible capital shortage that amounts to Rs. 32 trillion as per the International Finance Corporation.
Paynear, a fintech start-up, has more users in small towns than in the metros. The Hyderabad-based firm, which provides a platform to traders for accepting digital payments, has seen a surge in growth from small towns. Of its 50,000 merchants, two-thirds are in small towns.
Aside from offering new innovative financial services to their existing customers, the use of Fintech also allows banks to serve potential |customers – those considered “underbanked” and “unbanked” – who in the past did not have access to financial services due to costs, lack of credit or access. The ability for the banks to serve everyone is known as “financial inclusion.” According to the World Bank, around 2 billion people don’t use |formal financial services and over 50 per cent of adults in the poorest households are unbanked.
A report from Thailand’s Ministry of Finance in 2016 shows that 56 per cent of Thais received micro finance from special financial institutions and less than 9 per cent from commercial banks. Clearly, most Thais often turn to non-bank providers for small sums of money.
The K Plus Shop is an example of fintech for financial inclusion from KBank. It is a mobile application designed to be a one-stop solution for micro businesses such as small shops and street vendors. The app is a point of sale, sales tracking, sales reports and PR tool combined into one app that anyone can download and use free of charge on any smartphone – iOS or Android. With K Plus Shop, the vendor can receive QR payment from any customer using K Plus, other mobile banking or e-Wallet applications via the standard QR for PromptPay, as well as from WeChat Pay and Alipay.
News Comments Today’s main news: SoFi withdraws banking application. SoFi completes largest loan securitization to date. Retailer sues Kabbage. New UK marketplace loan deal mandated. OakNorth achieves unicorn status with 154M GBP raise. PPdai plans $350M U.S. IPO. Linked Finance gets 2M Euro equity investment. Today’s main analysis: Q3 2017 FinTech Insights Report (must-read). New generation of high net worth individuals spur […]
SoFi withdraws banking application. AT: “There has been growing speculation about SoFi’s chances of obtaining a banking license following the exit of CEO Mike Cagney, but did anyone expect the company to withdraw its application? It does make sense. The company needs to re-establish its footing and focus on finding new leadership and decide upon its direction from that. However, this positions Square to potentially be the first alternative lender to be approved to start a bank.”
Student online lender Social Finance Inc said on Friday that it is withdrawing its application for a bank license in the wake of the departure of a number of senior executives, including co-founder and former Chief Executive Mike Cagney.
SoFi announced today the closing of a $776.7 million offering of SoFi Professional Loan Program 2017-E notes.
SoFi 2017-E marks the company’s largest asset-backed securities issue to date and its 10th ABS transaction this year, bringing SoFi’s total issuance for 2017 to $5.375 billion. Since inception, SoFi has closed 30 transactions totaling $12.4 billion in issuance. With the closing of SoFi 2017-E, SoFi maintains its position as a top ten ABS sponsor. The recent transaction was heavily subscribed with orders totaling $2.3 billion.
Q3 2017 financing volume of $5.1 bn was lower than in Q2 2017 ($8.8 bn), but higher than in Q1 2017 ($4.3 bn). This quarter saw the second highest financing deal count ever at 412 transactions, only behind Q1 2016, which had 438.
Financing volume year-to-date is tracking just below 2016’s record level and is on pace for the second strongest year ever. This is even more impressive considering that 2016 was skewed by a handful of megadeals in China.
The Banking sector continues to be the most active sector this year in both the number of transactions (356 year-to-date) and financing volume ($6.3 bn year-to-date).
2017 FinTech financing volume in Europe ($5.3 bn) is already more than 2x the financing volume of 2016 for the region ($2.6 bn).
Q3 2017 M&A volume ($32.9 bn) was the highest since Q4 2015 ($50.5 bn), which included Visa’s $23.4 bn acquisition of Visa Europe. This quarter had eight $1 billion+ M&A deals, which is the most since Q4 2015 (which also had eight).
So far this year, 57% of the total global M&A dollar volume is comprised of international targets, although only 38% of the number of transactions represents international targets.
A Massachusetts clothing and sports retailer filed suit in federal court Thursday alleging that financial technology company Kabbage Inc. evaded state law by offering high-interest loans through an industrial bank based in Utah, which places no ceiling on interest rates for commercial loans, all the while serving as the true lender.
NRO Boston LLC and owner Alice Indelicato accuse Kabbage and Celtic Bank Corp. of devastating the retailer with their “rent-a-bank” scheme, whereby the bank was listed as the lender for loans in order to get….
Renaud Laplanche tries to “keep a positive attitude rather than focus on my frustration” when it comes to Lending Club.
“It was very, very frustrating. I’m not commenting on the story, but the best way to actually understand what really happened is to read the filings. I think the press made it sound a lot worse, a lot more sensational, than it really was.”
Upgrade raised $60 million (£45.7 million) in April, the biggest ever Series A funding round for a US fintech startup. Many of Lending Club’s original investors have backed the business and Jefferies, an investment bank burned by Lending Club’s loan term scandal, has signed up to buy loans from Upgrade — a vindication for Laplanche.
Now he is focused on “what can I learn from it, what can I do better. Upgrade has been part of that.”
Global Debt Registry (GDR), the asset certainty company known for its loan validation expertise, today announced it has exceeded a $1.5 Billion of loans issued by digital lending platforms and verified by the Company’s suite of due diligence solutions. On the heels of the GDR’s announcement of its successful SOC 1 Type 2 and SOC 2 Type 2 attestations last week, this achievement confirms the Company’s role as a leader in online lending’s ongoing expansion, driving capital growth in the sector by providing certainty and transparency around investors’ online lending portfolios and protection against risks surrounding the loan data integrity.
In the digital age, a lot has changed about how businesses operate — and a lot of new data is being generated in the process.
This creates new possibilities for judging a consumer or merchant’s creditworthiness. Square and PayPal have been taking advantage of this for years with models that rely on a merchant’s sales history to determine their likelihood to repay a loan, and American Express is ready to compete.
Redpoint Capital Group, LLC (“Redpoint”), an alternative investment company focused on providing financing across an array of asset-based strategies, announced it has entered into two additional Credit Agreements with two separate wholly owned subsidiaries of Elevate Credit, Inc.
Rise Credit Service of Ohio, LLC entered into a Credit Services Agreement with Redpoint Asset Funding Ohio, LLC (“Redpoint Ohio”) whereby Rise Credit Service of Ohio, LLC acts as a credit service organization on behalf of consumers for certain loans originated, funded and collected by Redpoint Ohio.
Furthermore, Rise Credit Services of Texas, LLC, a wholly owned subsidiary of the Company, entered into a Credit Services Agreement with Redpoint Capital Asset Funding, LLC (“Redpoint”) whereby Rise Credit Services of Texas, LLC acts as a credit access business on behalf of consumers for certain loans originated, funded and collected by Redpoint.
In addition to the agreements with Redpoint and Redpoint Ohio described above, Rise Credit Services of Texas, LLC, Rise Credit, LLC and the Company also entered into new guarantees of certain receivables of the Company and its subsidiaries held by Redpoint and Redpoint Ohio.
True Link Financial, the financial services provider for seniors, announced today that it has raised $8 million in a Series A funding round led by QED Investors, with additional investment from Radicle Impact and Initialized Capital. In conjunction with the investment, QED’s Founding Partner Frank Rotman will join True Link’s Board of Directors. With this latest round True Link has raised $15.8 million since the company’s founding in 2012.
The 45 million seniors in America – the largest and fastest-growing segment of the population – are facing new challenges. Average lifespans increased by more than thirty years over the 20th Century, stretching savings further and layering in new medical costs. Since the time today’s retirees entered the workforce, the percentage of workers with a pension has dropped by more than half. 5.5 million Americans have Alzheimer’s today, and more than 16 million will have the disease by 2050. And according to True Link’s groundbreaking 2015 study, financial fraud costs the aging a whopping $36 billion a year. In short, people are living longer with fewer resources and more risks.
The company’s customer base has grown twentyfold in the last three years. Its cards division is the first Silicon Valley startup debit card issuer to turn a profit, and its robo-advisor is Silicon Valley’s first robo-advisor to turn a profit.
When banks resisted expanding credit in the years following the financial crisis and passage of the Dodd-Frank Act, online marketplace lending seized on what seemed like a niche opportunity: targeting the credit markets deserted by banks.
But with issuance of marketplace securitizations now exploding — rising 300% cumulatively in the past two years — the idea of online lending as a niche is quickly deteriorating.
The U.S. Small Business Administration today announced fiscal year 2017 lending numbers showing increasing loan levels in small business lending through the 7(a) and 504 loan programs, as well as increases in lending to women, veterans and emerging communities.
SBA approved over 68,000 loans in the 7(a) and 504 loan programs in FY17. These programs provided over $30 billion to small businesses.
In FY17, the 7(a) program supported a consistent number of loans — more than $25.44 billion combined across 62,430 loans. The SBA continues to streamline and improve access to its loan program for small loans and emerging communities, delivering more than $5 billion in smaller loans of $350,000 or less in FY17.
7(a) lending to women-owned businesses (both majority and minority owned) grew in total dollar and volume. FY17 lending exceeded $7.5 billion, an increase of $298 million from FY16.
FY17 504 lending to women-owned businesses reached $955.2 million, a $277 million increase over the previous fiscal year. Loans to veterans totaled $1.15 billion for 7(a) and 504 lending.
P2B Investor has launched an interesting partnership program that is good for banks, good for borrowers and good for P2Bi. Banks, typically smaller banks, would like to lend more to SMEs but are risk averse due to multiple reasons. P2B Investor’s new program allows the bank to buy the first half of the loan with their low cost of capital, and P2Bi marketplace buys the second half. Thus the SME has a hybrid line of credit to finance its cash needs.
Consumers who are caught in a financial squeeze might one day be able to skip the payday loan store and turn to banks and credit unions for lower-cost, quick-fix loans.
Congress could move to overturn the rule — but some say that’s unlikely.
What could change: Lenders eventually would be required to research upfront whether borrowers could afford to repay all or most of their short-term loans at once — including payday loans and auto title loans — and longer-term loans with “balloon” payments.
What won’t change: People who are cash-strapped still will be looking for ways to cover their bills.
AutoGravity, a fintech platform for car shopping, has been nationally available for less than a year. The app’s been downloaded more than 750,000 times and processed more than $1 billion in financing requests.
Of the 20 largest automotive lenders, AutoGravity has some form of an agreement with 19, said chief marketing officer Serge Vartanov.
The app’s momentum is building: 100,000 of its downloads came in the month of August alone.
AutoGravity is now available in 49 states after kicking off with a soft launch in California.
While AutoGravity doesn’t disclose its overall lender portfolio, it has previously announced partnerships with Mercedes-Benz Financial Services and Hyundai Capital and a $30 million investment from Volkswagen and Daimler Financial Services.
The challenge is that regulatory bureaucracies in Washington, including the Federal Reserve, may be too slow to react to new technology — from cryptocurrencies and blockchain to crowdfunding — in the same way policymakers missed the risks embedded in the “innovations” in mortgage finance that ultimately fueled the worst housing bust and financial crisis in modern history.
“We’re not going to call it banking — we’re going to call it something else,” Bullard said.
Add in the number of people suffering because of the poor economy, especially millennials in the Gig Economy, living from paycheck to paycheck, unable to accumulate enough money for emergency savings, and Americans’ use of businesses such as check cashing companies or payday lenders or other alternate lenders, is entirely rational, in her portrayal, and it’s wrong for policymakers to act as if all Americans need to do is to be told they should get a bank account and that’s that.
Servon’s research for the book consisted, in part, of actually working at a check cashing service and a payday lender.
She then concludes the book by talking about “innovators.” She profiles a start-up that intends to provide an alternate credit-scoring model that takes into account other types of financial behavior that’s not typically incorporated into the mainstream credit bureaus’ credit scores, and a start-up that intends to make it cheaper to transfer money from one person to another, and a bank, KeyBank, that is more mission-oriented than the usual faceless big corporate bank.
One thing she entirely fails to mention is the fact that interest rates have dropped so dramatically.
A second development in the banking world that she neglects to mention is the rise in prepaid debit cards.
And the third missing item is that of competition.
But regardless of what happens to Cordray, the way the CFPB handles enforcement could be changing as we speak, because the CFPB’s enforcement director is apparently leaving the bureau.
Anthony Alexis, the Consumer Financial Protection Bureau’s enforcement chief, is stepping down after more than two years overseeing the agency’s efforts to combat abuses by the financial industry, a departure certain to fuel speculation that Director Richard Cordray will leave soon to pursue the Ohio governorship.
Alexis, a former Mayer Brown partner who was named enforcement director in 2015 after holding the role in an interim capacity, announced his departure plans to CFPB staff Thursday afternoon, according to a former CFPB attorney who is familiar with the matter.
A Manhattan jury on Friday found auto racer Scott Tucker and his attorney Timothy Muir guilty of operating a $2 billion criminal payday loan empire that preyed on millions of vulnerable borrowers and entered into sham deals with Native American tribes.
FINRA was looking to ratchet up engagement with industry players, he said.
To that end, the regulator has hosted roundtable discussions around the country with fintech firms, robos, vendors, and traditional broker-dealers’ technology departments to get a better handle on how the business is changing, Cook said. Later this month, FINRA will convene a new fintech advisory committee.
The transaction, MOCA 2017-1, will be offered in three tranches and is backed by 31,153 Zopa loans with a total outstanding balance of £208.96m. The loans have an average current balance of £6,708 and a weighted average seasoning of 4.5 months. The average interest rate is 7.2%.
OakNorth, a challenger bank focussed on lending to high growth businesses and property developers, has raised £154m in equity money in a round that values the company at £934m (approximately $1.3bn). The fundraise pushes the firm into “unicorn” territory – a term reserved for private tech firms with a valuation north of a billion dollars.
The money comes from The Clermont Group, Toscafund and Coltrane, which together have purchased a 16 per cent stake in the challenger bank. OakNorth says the money will be used to boost its lending by an additional £1.5bn.
Every year, tens of thousands of small businesses see their loan applications refused by the big banks.
In fact, figures from the British Business Bank (BBB) indicate that this amounts to around £4bn in loans annually – a staggering figure when you consider that this is preventing businesses from being able to reach their full potential.
SMEs are expected to contribute £241bn to the British economy by 2025, up 19 per cent from last year’s figure of £202bn, according to research from challenger bank Hampshire Trust Bank and the Centre for Economics and Business Research.
“As for Cost of Capital. Marketplace lending has access to a very wide range of cost of capital. A lot of platforms sell loans to banks. You have Credit Unions buying loans. Credit Unions have a return target of 2 to 3%. Lower than Goldman Sachs. Marketplace Lenders have access to similar cost of capital.”
“The biggest myth of all is that Banks and other financial services are advantaged at this.They have all the data. The truth is the data is fragmented across all different tech stacks and it is difficult to utilize. Very expensive and slow. The data is in the wrong place.”
Antony Jenkins, CEO and founder of 10X Future Technologies
Blockchain platform BitRent announced a revolutionary solution in the area of new-built property: commercial and residential property shared investing at an early stage of construction and total control over construction process in real time by means of modules and structures chipping. The company operates on blockchain technology and smart-contracts protocol. BitRent platform’s mission is to make real estate investing easy, transparent and profitable all over the world.
There are changes ahead for the Peer-to-Peer Finance Association (P2PFA). The self-regulated trade body has been shaping industry standards for six years, but as alternative lending enters the mainstream, even the P2PFA has to be willing to evolve.
However, the next board meeting – set to be held in November – is expected to focus on an update to the P2PFA rules, membership criteria, and the association’s role in the wider regulatory community.
The departure of RateSetter and LendInvest (which no longer defines itself as a P2P lender) has brought the P2PFA’s market share down to around 50 per cent of the UK’s P2P sector. Current members include Funding Circle, Zopa, MarketInvoice, Landbay, ThinCats, Lending Works and newest member Folk2Folk but no new members have joined since February of this year. However, Farnish rejected rumours that the association is “a closed shop”.
For now, the P2PFA is focused on reviewing its own rules and Farnish confirmed that a revised version of these rules will be published before the end of the year.
The asset management industry is currently in a state of flux, and the manner in which individuals and institutions interact with their wealth managers is on the cusp of dramatic change. Digitisation and increased use of technology should mean that we are at the point of a low-cost revolution.
Robo-advice in ten points:
Robo-advice is online
The key is probably cost: Robo-advisors can be 60-70 per cent cheaper than traditional solutions and can provide savings of 1 percentage point per year of assets. Over a lifetime of investing, this would make £100,000s of difference to millions of investors in the UK alone.
Growth is strong: Whilst still only a fraction of the market, the assets under management of major players are growing between 50 and 100 per cent per year, and new entrants and concepts are developing all the time. There are currently over 100 robo-advisors in Europe with most based in either Germany or the UK.
There is a long way to go: Nutmeg, the UKs’ largest robo, has $1bn in assets, but Legal and General, the UK’s largest traditional asset manager, has over $1 trillion – a thousand times larger. Data in the US is similar, with BlackRock having $6 trillion under management and Betterment, the largest US robo, having a fraction of this.
On-boarding is a noted differentiator, but also a concern: The faster process and fact finding may not always be up to date with regulations or as rigorous as it should be.
Millennials are less important than predicted: Most of the original players in this nascent market targeted millennials. But older, wealthier and still tech-savvy baby boomers have become core clients.
Robo-advisors mainly use ETFs
Future robo-advisors will be more sophisticated
Robo-advice aids financial inclusion: Both the regulator and the industry are hoping that robo-advice will improve participation and access to the investment process.
Robo-advisors typically use Modern Portfolio Theory: Robo-advisors typically use mean-variance optimisation for asset selection, but future solutions are likely to use Liability Driven Investment (LDI) frameworks for portfolio construction.
Financial services firms could be missing a £130bn opportunity by not winning over women, according to a new report.
UK financial institutions are failing to connect with female customers at every stage of the buying journey, from advertising to offerings and funds, finds Kantar’s latest research. It shows financial advertising and marketing strategies fail to communicate trustworthiness, dependability or understanding – particularly to women, 65 per cent of whom report low confidence in their financial institutions, compared to 55 per cent of men.
Only 38 per cent of women claim to feel ‘in control of their financial future’ compared to 51 per cent of men.
Chinese peer-to-peer lending platform PPdai.com will seek an initial public offering on the New York Stock Exchange, the company said in a filing, marking the latest Chinese financial technology company to go public. PPdai.com is currently values as a unicorn on China Money Network’s China Unicorn List with a US$2 billion valuation.
This week, China Insurance Regulatory Commission (CIRC) announced that it had grant an operation license to Shenzhen Wei Min Insurance Agency Co. Ltd. Tencent owns a majority stake (57.8%) of this new insurer.
On October 10th, Alipay announced to introduce house rental service in eight cities (Shanghai, Beijing, Shenzhen, Hangzhou, Nanjing, Chengdu, Xi’an and Zhengzhou). Users can enter the credit renting platform by searching “rent” in Alipay. If users’ Sesame Credit is above 650, they can enjoy deposit exemption and pay rent monthly.
Hexindai, a less well-known online consumer finance platform, is going to be listed in the US. Hexindai plans to raise $80 million in this IPO.
October 10th marked the 92th birthday of the world-renowned Palace Museum. It was on the same day that the museum started to embrace a brand new era of digital payment.
The Chinese micro-lending specialist is about to hit the U.S. stock market following an IPO early next week. Millions of Chinese consumers and businesses tap Qudian for credit, but does this make the stock a potential buy?
Qudian’s sweet spot is consumer loans. According to a study from Oliver Wyman commissioned by the company, it was the top small lender in the country in terms of number of active borrowers and volume of transactions as of June 30.
These loans are fairly small, even by local standards, and typically have short durations. There sure are a lot of them, though — in the first six months of this year, the company dispensed a total of around 38.2 billion yuan ($5.8 billion).
Recently, the PINTEC Group has announced a joint venture in Singapore to enter the Southeast Asian market with robo-adviser as its entry point. So far, there are more than 10 Chinese Internet finance companies layout in the Southeast Asian market，including Lufax, Dianrong.com, etc.
Yu-Hang Guo, the co-founder& co-chief executive of Dianrong.com, said that China’s internet finance companies have concentrated on the southeast Asian market, there are active plans as well as passive responses. With Chinese regulations tightening, many of them are looking abroad for growth. It is reported that cash loans, P2P and third-party data services have become the three most promising businesses in the Southeast Asian market.
Actually, before the small and medium-sized internet finance platforms have been set foot, industry faucets such as Ant Financial have already started to move and accelerate into the digital payment market in Southeast Asian.
Ireland-based peer-to-peer lending company Linked Finance announced on Thursday it secured €2m in equity funding to support its plans for expansion. The funding round was led by the company’s original venture capital backers, Frontline Ventures. The platform has now lent over €34.5 million to Irish SMEs since its launch in 2013, with more than €16.9 million already repaid to its lenders.
So far this year, Revolut, which started as a foreign exchange card linked to an app, has launched business accounts, loans, loyalty offers, mobile phone insurance, a bill splitting feature, a subscription “Premium” account, a chatbot, and more. Oh, and raised $66 million.
“The vision is very simple,” Storonsky said. “At the moment in the world, all banks are very local. As a result, you always struggle with international activity. That means you always need to open new bank accounts, issue new cards, set up a new credit profile.
“Nowadays people are all international. Banks are not providing this service. The vision for us is alternative global banking. Anyone in the world can just download the Revolut app and set up a local bank account to access any services they need.”
‘A lot of people work on weekends’
It’s a bold ambition. But can the business sustain this pace? I had heard from people in the industry — startup founders, PRs, former staff — that Revolut’s working culture can be tough: long hours, aggressive targets, burn out.
“We are not about long hours — we are about getting shit done,” Storonsky said. “If people have this mentality, they work long hours because they want it.”
It should be said that all the company’s Glassdoor reviews are five-star reviews, even those that mention the hours. “This company is highly addictive,” one reads.
A credit brokerage platform by the name of Compeon has raised €12m in a series B fundraising round. The round was led by existing investor Tengelmann Ventures, with btov Partners and Dieter von Holtzbrinck Ventures also participating.
Compeon processed a total of €2.5bn in loan requests in 2016, with an average loan request of €700,000.
Lendoit, a new decentralized P2P lending platform, has announced that it has partnered with one of Israel’s biggest institutional investment firms, Migdal Investment Banking. Established in 1965 and part of Migdal Capital Markets Group, it currently manages assets valued at $9 billion for thousands of clients in the Israeli private, business and public sectors.
The Alternative Credit Council, an affiliate of the Alternative Investment Management Association, has put out a paper on the present state of the private credit industry, considering both the demand (from borrowers) for its services and the supply (from investors) of capital to lend.
In preparing this paper, the ACC has partnered with Dechert LLP, an international law firm that specializes in financial and regulatory intricacies, to research and present a discussion of how private credit has managed to “cement its place in the lending landscape globally.”
One of the points of the paper is that private credit so understood is no longer stuck in the midmarket. It is moving outward in both directions.
On the other side of the market, there continue to be a number of borrowers who are good risks yet whose needs are not being met by the banking system, which is undergoing its own uneasy transformation in the face of regulatory pressure.
The top three characteristics of private credit that borrowers value most are: the speed of decision making, the ability to develop complex structures, and the flexibility of terms.
IBM has partnered with a Polynesian payments system provider and an open-source FinTech payment network to implement a new international exchange based on a blockchain electronic ledger.
The new payment network uses IBM’s Blockchain Platform, a cloud service, to enable the electronic exchange of 12 different currencies across Pacific Islands as well as Australia, New Zealand and the United Kingdom.
KlickEx Group, a United Nations-funded, Pacific-region financial services company, and Stellar.org, a nonprofit organization that supports an open-source blockchain network for financial services, are backing the new cross-border payments service.
If your bank does not agree to your request, start exploring alternative lenders. Do not limit your options to institutions. Your friends or family members can lend you the cash you need to handle an emergency. Peer to peer lending is a great alternative to banks, which allows you to borrow from individuals instead of institutions.
You can easily access a quick loan with bad credit online if you have a stable and verifiable source of income. Online lenders run your credit history but will approve your loan request with proof that you can repay in time. In most cases, the lenders offer payday loans that fall due on your next payday. You must be careful when applying for a personal loan online. Most of the search results you will get are from marketing companies and not direct lenders.
TSYS’ merchant services company ProPay is expanding into new territory.
The company announced in a press release this week that ProPay has launched in Australia, bringing small- and medium-sized businesses (SMBs) there to its merchant acquiring payment network and enabling them to efficiently accept card payments. The solution is built for direct-selling companies, micro merchants, distributors and payment facilitators.
Australian government agencies are reportedly plagued by company card fraud and misuse, according to new analysis from media company Fairfax Media. By certain accounts, some agencies are seeing more than $100,000 in misspend.
Fairfax analysts found an array of instances in which government purchasing cards were used for personal use, including one that attempted to use a Weather Bureau card for a transaction surpassing $1,000, an Able Seaman who repaid nearly $2,350 after misusing a card and one employee at the Foreign Affairs department who was fired after spending more than $7,000 on the department’s credit card, The Sydney Morning Herald reported.
The ABS had 156 cases of inappropriate spend on its cards, Fairfax found, valuing more than $43,000 in misspend.
Peer-to-peer lending (P2P) platforms in India have requested the Reserve Bank of India (RBI) to allow non-bank trust companies to act as trustees for fund transfers between the participants—investors and borrowers—on their platforms.
“It took us six months to get a trustee. Most of the bank promoted trustees were unwilling to come on board as the industry is nascent,” said Mukesh Bubna, founder and chief executive at Monexo Innovations Ltd, a Mumbai-based P2P platform.
“This creates a monopoly. A limited number of trustees managing transactions for multiple P2P firms may lead to conflict of interest and also a higher fee being charged by the trustees for managing the escrow accounts,” said Raghavendra Pratap Singh, co-founder at i2iFunding.com, a Noida-based P2P platform.
So far, the firms have informally reached out to the regulator, said two people close to the development. They requested anonymity. They are expected to send formal feedback to the regulator soon.
Six months after he founded payment gateway company Razorpay in 2013, Harshil Mathur was looking to shift his headquarters from Jaipur. Of his three options — Delhi, Mumbai or Bengaluru, Mathur chose the tech hub of Bengaluru over the financial capital, Mumbai.
With the rise of tech startups that focus on financial services, the traditional banking landscape is transforming — and Mumbai, Delhi-NCR and Bengaluru are competing to become the country’s fintech capital. Mumbai is still the financial capital as it is home to major banks and financial institutions, but it is technology that is becoming integral to finance.
A marketplace lending platform in India, Rubique empowers individuals and SMBs with an easy and smoother access to finance across a wide range of loan, credit card, and insurance products.
LoanTap is a fintech platform delivering flexible EMI free loan products to salaried professionals.
India’s largest peer to peer lending website, Faircent is a platform where people who have spare money, use the means of lending it directly as a form of loan, thereby eliminating intermediaries and their margins.
Having started as an online mobile recharge and bill payments app. Paytm in a short span of time has scaled to over 250 million registered users.
CreditMantri is a multi-services platform that helps borrowers secure loans from its partner financiers.
HNWIs’ wealth growth remains led by Asia, with ongoing gains from an increasingly affluent middle class, enhanced productivity, and property price gains.
As the largest HNWI market, the US has been the beneficiary of a sustained rally in the equities market, driven by capital inflow and currency appreciation. The recent resurgence in mergers and acquisitions and initial public offerings is also driving wealth growth.
By comparison, Europe remains beset by low yields and flagging economic growth, characterised predominantly by inherited wealth and ‘old money’.
Research from around 940 Asian shows a clear shift towards engagement of financial investment professionals over self-management.
Also notable is the shift in allocation from domestic to international equities. In 2013, there was a 60:40 split favouring domestic equities, but this has reversed to favour international stocks through to 2017.
HSBC, with US$112 billion of private bank client assets under management (AUM) in its core Hong Kong and Singapore markets, is building upon its existing investment platform and network as a new entrant to the Australian market as of November 2016.
Fintech start-up fidentiaX is in the developmental phase of creating the world’s first marketplace for tradable insurance policies by disrupting the status quo by empowering policyholders to monetise policies on the blockchain. fidentiaX will also be setting up fidentiaX Open Source Foundation (fSOF) to proliferate the embracing of blockchain technology for the insurance industry.
In 2016 alone, the total market size for insurance premiums in the 40 OECD reporting countries was estimated to be in the north of $3.86 trillion dollars and Asia is projected to the be fastest-growing market for life insurance with an estimated real annual compounded growth rate of 10.2%.
fidentiaX’s marketplace will be a membership-based ecosystem focusing on the key stakeholders and providing the following services:
Policy ledger – Break traditional reliance on intermediaries by creating a digital ledger for policyholders.
Trustless Marketplace – Provides a platform for buyers and sellers to connect and trade policies via the blockchain.
Ajar Online, a fintech startup based in Kuwait, closed a second investment in a round led by Dubai-based venture firm BECO Capital, followed by an investment from Sharq Ventures, since late 2016.
The service allows tenants to pay their rent online, at anytime and anywhere via SMS and email in less than 60 seconds. Simplifying the rent collection process for landlords and providing efficient property management tools to save time, reduce cost and take the right decisions.
News Comments Today’s main news: Orchard Platform, Experian partner on big data. Marlette closes $369 ABS transaction. OCC seeks to make banks fintech enforcers. MarketInvoice Q2 results. Dashu Finance raises $117M. BNI Europa enters Portuguese market with Puzzle. TWINO expands into central Asia. Today’s main analysis: The state of consumers and technology (a must-read report). International P2P volumes. Today’s thought-provoking articles: High-tech, low-effort loans […]
Orchard Platform, Experian collaborate on big data challenges. GP:”This is a great move. All loans are underwriten at emission. Credit lines require ongoing underwriting which is already challenging. But as an investor in loans being able to independently check the borrower’s data before you purchase a note is an amazing method to pick and chose what to buy. And on the other side if you do have a portofolio of notes, being able to monitor the borrower’s profiles would allow you to sell notes before they get into default. However the consequence of this system is that it will split the notes into good-to-buy and not-good-to-buy much faster and much more clearly. And once some note investors have the capacity to evaluate the borrower behind the note it will become a must have for all other investors who don’t want to be left holding the worthless notes only. “AT: “This is a smart partnership. I’m glad to see traditional credit bureaus seeing the opportunity in alternative lending.”
The state of consumers and technology. AT: “It isn’t young millennials leading the way on innovation adoption as one might expect. Rather, it’s the 30-39 age group. However, it is the 18-29 age group that is the most technologically savvy. This is a must-read report.”
Goldman Sachs is creating an iPhone app for everyone. GP:”It seems that Goldman Sachs is going towards being a commercial retail bank. They probably realized that it is much cheaper, faster and easier to sell 10 million people on putting their $10k savings accounts with Goldman Sachs Retail Bank then selling 100 hedge fund managers to put $1bil with Goldman Sachs Investment Bank”.
Betterment CEO says they could become the Amazon of financial services. GP:”I’ve known John Stein since 2003. I certainly believe in him and his innovation capabilities. I would want to see Betterment apply the same approach they did to the advisory market to a next market now. Maybe the insurance buying market? “AT: “Betterment is a long way from being Amazon. SoFi is much closer.”
OCC seeks to make banks fintech enforcers. GP:”This is a great approach. It’s like relying on local upraisers and brokers in real estate. This will allow innovation, but also will mean that the rules are applied locally on a case by case basis in a smart way. The OCC continues to support the fintech world. I am very impressed.”
Experian® and Orchard Platform, the provider of data, technology and software to the online lending industry, have joined together to announce a strategic collaboration that will give institutional investors access to Experian’s depersonalized consumer credit data. Orchard’s institutional clients can use depersonalized credit data for ongoing monitoring of borrower creditworthiness for loans in existing portfolios. Experian also will provide access to anonymized historical data sets for enhanced credit modeling, analytics and reporting.
Delivering greater transparency, high-quality data and analytical tools to the market is central to the mission of both companies. Orchard’s institutional clients should benefit from the use of Experian data to not only make more informed investment decisions through refined credit modeling but also through the ability to manage risks more effectively with more current loan data. Experian has been harnessing the power of data for many years to help consumers, financial institutions and governmental organizations make more informed and effective decisions. Raw data without the right level of interpretation is nothing more than untapped potential.
Marlette Funding, LLC, a leading provider of online consumer lending platforms and services, announced it has closed its third securitization from its proprietary “MFT” shelf. Approximately $369 million of Best Egg unsecured personal loan collateral was financed via three classes of Notes and one class of Certificates with certain loan sellers retaining risk on a portion of the Certificates.
The transaction was significantly oversubscribed and successfully priced well inside the two previous Marlette sponsored offerings. In this transaction ratings for each of the offered Notes attained one higher category to AA (sf), A (sf) and BBB (sf), respectively, by Kroll Bond Rating Agency (KBRA). Underwriting the transaction were Goldman Sachs, who served as the structuring agent, Deutsche Bank and Citi.
This transaction, in similar vein to MFT 2017-1, involved the sale of loans by Marlette and four other whole loan buyers who accessed the securitization markets via the MFT shelf.
The US market is fueled by empowered customers, who experiment with and rely on technology. In 2017, for example, 14% of US online adults use a fitness tracker, 8% use a smart speaker with a personal assistant, and 7% use Apple Pay.1 Forrester’s Empowered Customer Segmentation shows that about a quarter of US online adults are Progressive Pioneers, the most empowered consumers who lead the demand for product and experience innovation. Smartphone and tablet usage is now common among mainstream US consumers: Three-quarters use a smartphone, and half use a tablet.
In a study of more than 2,000 consumers conducted by Researchscape and sponsored by Klarna North America, 47% said that when shopping online, they would like to be presented with the option of instant financing.
The customer types in very little information — in some cases, nothing more than a name and email address. No effort is required.
Behind the scenes, Klarna’s underwriting software takes in data from more than 100 sources and uses artificial intelligence to make a credit decision in less than a tenth of a second.
Jim Lofgren, Klarna’s CEO for North America, theorizes that instant loans have become popular as a reaction against widely publicized card fraud and data breaches. Essentially, people are drawn to not having to surrender a bunch of information.
“The phone is only this big and you don’t like the inconvenience of having to pull up the card and keypunch all those numbers in and verify everything every time you want to make a purchase,” Lofgren said. “Instant financing lends itself well to the smartphone environment.”
Aaron Allred, CEO of Acima Credit, a provider of instant leases at the point of sale, gives a lot of credit for the growing U.S. market in the U.S. to Affirm, a startup based here.
Lofgren calls Klarna’s credit issuing platform the “secret sauce of what we do.”
It takes into account more than 180 creditworthiness variables.
Goldman Sachs, which has been expanding its offerings to retail consumers in recent years, is building an iOS app for its growing crop of digital retail banking services, according to a job listing on the company website.
Here’s the job posting (emphasis added):
“We are looking for an expert iOS developer to work on a greenfield enterprise-grade project delivered on iOS platforms. Our goal in engineering is to facilitate the creative, iterative, and data driven creation of our all digital retail bank. As a Mobile Developer you will be working closely with our marketing team and UX designers to build mobile user experiences which will be A/B tested for effectiveness and impact to our clients. The code you write will reach millions and help redefine the firm.”
Betterment, the largest independent roboadviser in the world, with $9 billion under management and 270,000 customers, thinks it might be able to do the same in finance.
Chaparro: Incumbents have had their own robo offerings for years, and they have their big brand and infrastructure to back them up. What makes you so certain Betterment can survive up against such competition?
Stein: For the same reason why we often see those few innovators break out.
You could also ask “Why did Amazon break out and become the dominant online retailer?” — some would say dominant retailer period. And why wasn’t it Barnes and Nobles, Target, or Walmart, or anybody else? It is because Amazon has a specific focus. They didn’t have conflicts with a set of existing infrastructure and systems and people who were built around doing things the old way.
“So, many of these lenders have been wrestling with this problem for a long time,” said Edwards. “The number one complaint they get after a loan is approved is, ‘Why do I have to wait on my money?’”
That speed factor is why some online lenders may lose market share to competition. If a borrower’s car breaks down and he needs the vehicle to get to work, an online loan that takes a week for funds to transfer to his account won’t be much help. Instead, Edwards said, those borrowers are going to go to someone who can provide cash immediately.
The emergence of push payments and instant funding perfectly addresses this need for lenders. Push payments use the same mechanism as pull payments — only in reverse, moving funds from a business to a consumer. They deploy existing rails to do this, instantly transferring funds to credit and debit cards or a PayPal account.
For Ingo Money, API technology has been critical to making it easy for lenders and other companies to deploy push payment capabilities.
You may have heard of a number of successful “big tech” execs leaving behind great jobs at companies like Apple and Google to develop a new passion project in fintech. The trajectory from big tech to fintech is becoming increasingly common. What makes for a successful transition and what can big tech folks take with them in their new ventures?
This is a lesson I learned repeatedly at Google. What you are trying to do as a company, and often as a team within a company, matters. It’s not simply having a mission, but having a mission that galvanizes others to action.
Leverage the “tech method.”
A huge lesson I learned from my career is the benefit of building a platform that empowers an ecosystem. Think about Android, AirBnB or Amazon. If your business model is designed to benefit other participants in the ecosystem, rather than competing with them, it can have far-reaching impacts that turn an industry in your favor. If you can create a system that connects buyers, sellers, service-providers, etc., you have the ability to change how that industry functions.
Use your network.
Leverage your network in a way that also allows them to participate in your cause. The successful big tech to fintech pioneers do not view the companies they have left as something in the past, but rather an ongoing support group.
We do lots of things, but one amusing yet somehow successful example is taking pictures of people wearing our PeerStreet hats.
The industry’s self-regulator imposed 624 monetary sanctions in 2016 – a 10% drop from the 691 it doled out the year prior, according to the report. But revenues from fines grew to $173.8 million in 2016 from $80 million in 2015, according to the regulator.
Finra also ordered firms to pay back $27.9 million in restitution to investors last year, according to the report. The fines helped the regulator post net income of $57.7 million in 2016, compared to a net loss of $39.5 million the year prior, Finra says.
In addition to a boost from fines, the regulator’s portfolio returns grew $70.9 million year-on-year, according to the report.
First, the nation’s three major credit rating agencies, Equifax, TransUnion and Experian, will drop tax liens and civil judgments from some consumers’ profiles if the information isn’t complete. Specifically, the data must include the person’s name, address, and either date of birth or Social Security number.
Of about 220 million Americans with a credit profile, approximately 7 percent have liens or civil judgments against them. With these hits to their credit removed, their scores could go up by as much as 20 points, according to a study by credit rating firm Fair Isaac Corp. (FICO).
In addition to the FICO changes, mortgage giants Fannie Mae and Freddie Mac are allowing borrowers to have higher levels of debt and still qualify for a home loan. The two are raising their debt-to-income ratio limit to 50 percent of pretax income from 45 percent.
With this in mind, I recently set out to create examples of utilizing the Qlik platform in the Fintech space.
Ripple distributed financial ledger:
Working with our Qlik partner (Pomerol Partners) we utilized the Restful API’s provided by Ripple to access all 8.7 million payments transacted on the Ripple platform.
Lending Club peer-to-peer lending and alternative investing:
Whether it is Fintech, Insurtech, Regtech or any other new & exciting technology, there is one certainty…the data from these systems will need to be combined with other information to get a complete picture of the customer relationship, profitability and risk profile of the business.
But, even amidst serious uncertainty with regard to the future of a federal charter for certain fintech firms, the OCC continues to demonstrate that it has every intention of continuing to expand its jurisdiction over the fintech market. Earlier this week, the agency released supplementary guidance to its risk management bulletin on third-party relationships for federally regulated banks. The new guidance very broadly defines third-party relationships as “any business arrangement between the bank and another entity, by contract or otherwise.” The guidance further notes that “If a fintech company performs services or delivers products on behalf of a bank or banks, the relationship meets the definition of a third-party relationship,” and the OCC would require that the bank include that fintech firm as part of its OCC-supervised third-party risk management process.
The company, with four subsidiary banks in New York and Pennsylvania, continues to do a traditional community banking business. Yet, just as every local retailer is potentially competing with Amazon and Walmart.com, Tompkins and other commercial lenders face competition from the likes of Kabbage and other business-oriented online lenders that promise fast online service with minimal hassle.
A year and a half ago, the parent company began evaluating web-based services from outside vendors that could help its subsidiary banks deliver what customers desired. What they found was a service that could integrate with their existing systems and credit standards—as a pure technology play, not a substitute for the bank’s own lending.
In January the company began rolling out Lightning Loans, beginning with the Tompkins VIST affiliate.
As lenders grow, they’re turning to the ABS market for funding as a natural step of diversifying. Securitisation trades began in 2014 and are slowly gaining traction around the world. Last year, P2P Global Investments Plc and Zopa Ltd. produced Europe’s first securitization of unsecured consumer loans originated online. The $179 million transaction was backed by 27,137 lines from individuals. This deal followed Funding Circle’s first securitization of peer-to-peer loans, comprising small-business debt — another first for Europe.
And as the pace of securitization picks up for peer-to-peer, other short-term non-traditional lenders are looking to get into the market. According to the June 30 issue of the Asset-Backed Alert, payday lender DFC Global is eyeing securitization as a funding source.
At least one other payday lender, Check ‘n Go, is known to be looking at the asset-backed bond market as a funding source.
Legislative Update 160 (Experian Email), Rated: A
The CFPB estimated in its May 2015 study “Data Point: Credit Invisibles” that more than 45 million American consumers are credit invisible, meaning they either have a thin credit file that cannot be scored or no credit history at all.
On June 8, the US House of Representatives passed the Financial CHOICE Act on a strictly partisan vote with Republicans supporting the bill and Democrats opposing it. In addition to making broad changes to the Dodd-Frank Act, the bill would substantially transform the CFPB into an enforcement agency by repealing the Bureau’s supervision authority, abolishing the UDAAP provision
and prohibiting the public disclosure of complaint data.
On June 12, the US Treasury Department released a report on the Administration’s priorities for financial regulatory reform. The report was requested as part of the President’s February Executive Order on Dodd-Frank Reform.
Massachusetts H.B. 157 stipulates that no person or company engaged in trade or commerce shall have a right to obtain, possess, sell, lend, distribute, disseminate or use any person’s account number without his/her prior written permission. Account number is defined to include each person’s social security number, driver’s license number, license plate number, bank account number, credit card number, account number at a retail store which sells goods or services, account number at a business which sells goods or services on-line, telephone number and all other account numbers of all kinds and varieties.
The allocation to alternative investments more than doubled from 9% to 24% during 2005 to 2015, according to data by the Public Plans Database (PPD), which accounts for more than 95% of pension assets. Between 2010 and 2016, traditional equity returned about 14% compared to private equity at 25% minus fees.
In 2005, for example, the maximum share held in alternatives by any plan was less than 30% and half of plans held less than 10%. As of 2015, however, the maximum allocation among plans was more than 50%, and only 9% of plans held less than 10% in alternatives.
Another unique service that New Teeth Dental Solutions offers is their financing options. Dental service is considered a compulsory service to all people, and at a patient’s convenience, the clinic provides a choice between dental loans (CareCredit, Healthcare lending) and patient financing plans (Lending Club) that allow a low monthly payment with no down payment for at least three to seven weeks.
Federal law already allows borrowers to apply for loan forgiveness if they attend a school that deployed fraudulent advertising or violated state consumer-protection laws. But the process for securing such forgiveness can be cumbersome. And some schools limit their students’ capacity to win settlements in fraud cases, by forcing them to pursue justice through arbitration instead of the court system.
These defects became conspicuous during the Obama administration’s final years, as hundreds of for-profit colleges collapsed amid accusations of widespread fraud. The demise of the mega-chain Corinthian Colleges, alone, led to more than 15,000 loan discharges, totaling $247 million.
Eighteen states and the District of Columbia reject that rationale. On Thursday, 19 Democratic attorneys general, led by Massachusetts’s Maura Healey, filed a lawsuit against the Trump administration in federal court, accusing DeVos of refusing to enforce duly enacted regulations in violation of the Administrative Procedures Act. They are hoping to convince a federal judge to order the administration to implement the new rules.
The recently launched peer-to-peer lending platform, Flender, announced on Thursday it is celebrating the successful funding of its first batch of SME loans. According to the online lender, companies that received their requested funding include one of Europe’s fastest growing lingerie retailers, a café, and coffee roasting chain, a further education provider and developers of non-toxic disinfectant technology.
The growth builds on its previous record set in Q1 2017, with the firm funded invoices worth £161.9m in Q2 2017 providing UK business with critical working capital.
June 2017 was the company’s busiest ever month funding invoices worth £64.2m. The value of invoices funded is up 57.2 per cent from £103m (Q2 2016) to £161.9m (Q2 2017), and the current cumulative value of invoices funded stands at £1.34bn.
The £350m VPC Speciality Lending fund saw a fall in its net asset value [NAV] of 0.68 per cent in May after a 0.62 per cent income return but a -1.3 per cent capital loss. It’s income return was the fifth consecutive payout increase.
Earlier this week, asset finance lender Borro announced it was leaving the bridging sector with new chief executive officer John Allbrook citing overcrowding in the market as the reason for the decision.
“However, if you are well funded and provide a first-class service there is plenty of business. I suspect the cost of funding was prohibitive for Borro which was only a small player. Potentially others will exit this market, such as the ‘dabblers’ who may excel elsewhere but have been drawn into the property market seeing the potential returns while not realising what is involved and how competitive it is.”
Rather than the modest 0.1% or 0.5% offered by most banks, the alternative saving and investment sectors have seen significant growth, offering rates of up to 15% per annum.
This is currently one of the most popular ways to obtain a higher interest rate, with the peer-to-peer (P2P) lending industry estimated to reach £7bn in 2017.
This allows you to pitch to purchase a stake in a small business or start-up. Usually through a platform like Crowdcube, the business states how much of a stake they are willing to give up based on their valuation e.g. 7% or 15%.
Asian alternative investment management firm PAG and China-focused private equity firm Primavera Capital Group have led a RMB800 million (US$117 million) series C round in Dashu Finance, a Shenzhen-based online lender of unsecured loans to small and micro enterprises that traditionally could not secure funding from banks.
Dashu specializes in credit analysis based on big data, a method traditionally applied only to credit card loans and micro loans. It has issued over RMB200 billion in accumulated unsecured loans to individuals over the past several years, it said in an announcement.
In addition, Dashu offers its credit analysis tools to traditional financial institutions such as banks. To date, it has helped commercial banks issue micro loans worth roughly RMB10 billion. The cumulative non-performing loan ratio of these loans is around 2.3%, it says.
ONLINE finance firm Jusheng Assets announced yesterday in Shanghai to finish a new round of finance, which made its registered capital hit 300 million yuan (US$43.5 million) and triple the previous level.
The new investor Zhejiang Fengzhou has core business in tourism, hotel and construction materials, which will help the platform find projects related to consumption upgrade as the national strategy, said Yang Dengpeng, chairman of Jusheng.
PayFit, which simplifies payroll management and core HR processes for SMBs, announces that it has closed a €14 million Series B investment led by global venture capital firm Accel, with participation from Xavier Niel and Otium Venture.
Founded just one year ago, the startup has grown to have more than 600 clients and a team of more than 40 employees. This round will enable PayFit to continue to expand its suite of digital HR processes, kickstart its international expansion, with an initial focus on Europe, and double its workforce by 2018.
PayFit’s ambition: become the go-to solution to manage core HR and payroll processes for SMBs in Europe
PayFit drastically simplifies payroll management, which can be complex, expensive and time consuming for businesses of all sizes, particularly SMBs in countries with complicated labor laws. PayFit’s Software-as-a-Service solution is fast, intelligent, intuitive and automated. It allows employers to easily manage payroll on their own, saving time and money, and comply with local labor laws without having to be a payroll expert.
Accelerating internationalization – first step: Europe
The startup is planning to launch internationally with an initial focus on Europe. Rollout will begin with Spain, Italy, Germany and the United Kingdom. Markets with labor laws that can be as complex as those in France are a particular focus, as PayFit can bring significant core HR and payroll improvements to local businesses. In each market, PayFit will launch a fully localised version of its solution, covering all relevant regulations.
Volume migration to pure digital players remains in the low single digits in the US, multiple challenger banks in the UK are facing funding and regulatory issues before they are even out of the gate, and many of the more successful fintech insurgents have been bought by incumbent banks just as they matured into legitimate competitors. Disruption of the banking industry hasn’t turned out to be a dramatic big bang; instead, the erosion of bank profitability by low interest rates and increased regulatory costs has triggered an industry-level response in which banks are using technology to improve efficiency and the customer experience. Instead of going extinct, the dinosaurs have been evolving.
London-based TransferWise, which allows consumers to transfer money internationally at a fraction of the traditional cost, is actually disruptive because it lowers fees by smart trade matching between buyers and sellers.
But TransferWise is an exception. Most fintechs have struggled to create sustained competitive differentiation.
This doesn’t mean that banks can be complacent. The asteroid strike on the banking industry is still possible, but is far more likely to come from existing tech giants than small startups. Amazon is now lending a billion dollars a year to merchants on its platform, a drop in the ocean for the largest commercial banks, but a statement of intent. While it hasn’t happened yet, Accenture research suggests that the combined disruption from fintech startups and Google, Apple, Facebook and Amazon could cause full-service banks in developed markets to lose about 35% of their market share over the next five years.
An online survey of consumers in France, Germany, Israel, the U.K. and the U.S. poll revealed that fintech does appear to be gaining traction, with Israel emerging as a leader in early-adoption, according to a press release.
Nevertheless, cash remains king in most of these countries. For instance, in Germany, 75 percent of adults still use paper currency and coins to make purchases at least once a week.
What is more, nearly 1 in 10 Israeli adults say they have used alternative financing or lending services within the last 12 months.
U.S. private equity giant KKR & Co LP moved to bolster its presence in Australia’s lucrative mortgage market on Wednesday, joining a rush of players hungry for a slice of a property boom even as the sector shows early signs of slowing.
KKR Credit Advisors LLC made a $500 million bid for non-bank lender Pepper Group Ltd at an indicative price of A$3.60 per share, a 4 percent discount to Tuesday’s close. Pepper shares sank 7.2 percent to A$3.48 on Wednesday.
People like Desai form the key clientele for financial-technology startup MoneyTap, which has developed a lending product called Credit Line—essentially, it assigns Rs 25,000 to Rs 5 lakh to a borrower deemed eligible for a loan.
The startup has nearly 300,000 registered users in about six months of launch. Like MoneyTap, which recently raised about $9 million from Sequoia India and others, a dozen-odd startups have attracted a string of investors to back them in the past few months.
EarlySalary secured $4 million from IDG Ventures and Diwan Housing Finance, and PaySense recently raised $5.3 million from Jungle Ventures.
The lending models are diverse—to allow customers to buy online; to buy consumer durables from regular stores; providing salary advances; or helping cover unplanned requirements such as medical bills.
Yes Bank has partnered with fintech startups like Redcarpetup, Anytime Loans and FRS Labs among few others to adopt innovative technology based solutions for various businesses, such as lending, anti-fraud detection and easier customer onboarding processes.
Redcarpetup will allow the bank to lend to students, which is something banks have never done before. The technology company has identified about 100 colleges in the National Capital Region and underwrites applicants on the basis of the college, the type of course, their education background and their social circle.
Anytime Loans is an automated P2P lending platform that uses artificial intelligence to read facial features and feed it into a predictive model that determines the borrower’s propensity to default. The company has disbursed Rs 68 crore over the last 30 months to 38,700 entities for personal loans, business loans and education loans. Its gross defaults are at a low 0.6 per cent.
Bengaluru-based Atyati Technologies Pvt. Ltd, is a technology platform provider for the rural banking sector in India.
The company’s long-term vision is to have more services and products—custom lending products, insurance, e-tailing, etc.—across more geographies and more points of service, besides achieving quality-of-service levels in remote areas that are on a par with those in the metros.
FinBox: Banking on apps
This fintech aims to increase the revenue of lenders by increasing the number of customers on their books by reducing the cost of acquiring and servicing the loan—which it essentially does by building software tools such as application programming interfaces (APIs) and software development kits (SDKs).
The goal of FlexiLoans, the fintech platform run by Mumbai-based FlexiLoans Technologies Pvt. Ltd, is to provide working capital financing to small- and medium-sized businesses in India that are currently underserved by traditional institutional channels due to lack of collateral or inadequate credit history.
FundExpert: Robo adviser
Gumption Labs Software Solutions Pvt. Ltd, which launched FundExpert’s automated investing platform in 2016, wants to make monitoring investments “super-easy, using algorithms”.
IndianMoney.com: Financial guidance
Today, IndianMoney.com boasts of being “India’s largest financial education company”, with over 200 employees, serving 80,000 financial intermediaries and 3 million consumers.
KrypC: Blockchain riders
This fintech provides blockchain technology solutions to various organizations to enable them “to utilize blockchain features such as privacy, security and trust”, among others.
Turtlemint: Insuring its future
Touted as India’s first online-offline insurance platform, Turtlemint is building a pan-India network of offline partners and, according to co-founder and CEO Dhirendra Mahyavanshi, has been “a pioneer” in the online insurance aggregation domain with offerings like ‘match score’, ‘policy recommender’, ‘renew in a snap’, etc.
“This industry is definitely a force to reckon with,” Punater added, pointing out that the global annual growth of the fintech sector at 55% is not led by volume expansion but by investment, which shows investor confidence in the space. “Compared to about 12,000 global start-ups, there are about 900 Indian fintech firms—and over 120 of them were started in 2016 alone. An investment of $2.25 billion has been infused into Indian fintechs from 2010 to 2016,” she added.
The Indian fintech market, according to her, typically mirrors global trends. “Payments-related companies have the highest market share at 25% in India and in the world. Payments, lending and wealth management are growing, while P2P (peer-to-peer) lending, blockchains and payment banks are still nascent. Many payments-related activities are still in the business-to-consumer space but we haven’t seen much happening on the business-to-business side,” she added.
According to Punater, wealth tech is the third-largest sector in the fintech space and is still relatively small.
The Korea P2P Finance Association said that accumulated loans of its 56 members reached 1.2 trillion won in June, up 665.1% from a year ago when the total reached 152.6 billion won. Month-on-month, total loans rose 17.5%.
“It is very convenient. Borrowers can get short-term loans quickly while investors enjoy higher profitability,” said Kim Soo-hyun, an analyst at Shinhan Finance Investment. “They may threaten banks’ business in the long term, if they become equipped with more advanced technology infrastructure.”
Lenders focusing on real estate projects are leading the market, with the biggest lender, Tera Fintech, accounting for 147.5 billion won of total loans in June, followed by Roof Funding with accumulated loans of 114.3 billion won.
In a room of over 200 senior level bankers, Deputy Finance Minister I, YB Dato’ Wira Othman Aziz made a call to Malaysian banks during his opening speech at the 9th BankTech Asia Conference & Exhibition, an event co-organized by Knowledge Group of Companies, to disrupt themselves before others do it for them.
Quoting recent studies from Gallup which states that more than half of Malaysian banking consumers are indifferent towards their primary banks, YB Dato’ Wira Othmanbrought attention to this point to illustrate the industry’s need for an overhaul to remain relevant.
News Comments Today’s main news: Misys, D+H team up to launch Finastra. Fundrise intros first real estate robo-advisor. UK businesses find it harder to get a loan. Singapore Life gets insurance license. Faircent offers online lenders ‘What-If’ scenario simulations. Today’s main analysis: Does anyone remember how to make a subprime mortgage? The most up-to-date numbers for Prosper, RateSetter. Today’s thought-provoking […]
Finastra launch. GP:”I would like to see more information on how Finastra is going to stay ahead through innovation. The bigger the company the harder it is especially when it will have to spend a lot of ressources and attention merging. For the best environment it is better to have numerous smaller companies then 1 large one as over time the incentive to keep innovating is low and eventually the large company falls behind. “AT: “48 of the top 50 banks worldwide are customers. Finastra exits the gate the third largest fintech company in the world, which puts it in a great position globally and could very well rise to be the largest fintech worldwide with the right management.”
Bank branches are closing in droves. AT: “Is it a matter of time before one of these banks closes its doors for good? Remember when Blockbuster said Netflix hasn’t impacted their business at all. Then, bam! No more Blockbuster. The same thing happened with Border Books. Thanks Amazon. I think we’ll someday read the headline – ‘National Bank Chain Goes Out of Business, Can’t Compete With Online Banks’. It could be within a decade.”
Fundrise revamps service with real estate robo-advisor. AT: “No one should be surprised by this. First, it’s Fundrise, the company that introduced the first eREIT. Secondly, it was just a matter of time before somebody introduced the first real estate robo-advisor, so why not Fundrise? Disclosure: I have in the past written for Fundrise.”
Today Misys and D+H have joined forces to create a diversified global financial software provider, unmatched in terms of depth and breadth of solutions. Operating under the new company name Finastra (www.finastra.com), the combination will create the third largest financial services technology company in the world. The company has approximately 10,000 employees and over 9,000 customers across 130 countries, including 48 of the top 50 banks globally. This follows the acquisition of D+H by Vista Equity Partners, which already owns Misys, creating a merger of two highly complementary financial technology providers.
Finastra will be led by Nadeem Syed in the role of Chief Executive Officer. Mr. Syed was previously CEO of Misys and has over 27 years of experience leading global technology companies through transformation and growth. The company has U.S. $2.1 billion* in revenues and has offices in 42 countries around the world. It will be headquartered in London, UK, maintaining North American headquarters in Toronto, Canada.
Finastra offers the broadest set of retail banking, transaction banking, lending, and treasury and capital markets software capabilities available in the world. The company’s open architecture and approach enable financial institutions to harness the power of software ecosystems and will be delivered on premises, hosted or via the cloud. With the increased scale and geographic reach, Finastra will be able to serve customers better, regardless of their size or geographic location – from global banks, to community banks, credit unions, and corporations. Using the company’s secure and reliable solutions, customers will be empowered to accelerate growth, optimize cost, mitigate risk and continually evolve to deliver a superior customer experience, both now and in the future.
Having long pursued a progressive vision of innovation within both businesses, Finastra will strive to further unlock the potential of people and businesses by executing the product strategy of ‘Protect, Extend and Innovate’. This includes protecting our customers’ investments in all of our solutions; extending the value of our solutions by integrating new products and services; and innovating to create the best-in-class solutions. Finastra will work in partnership to help customers transform their business, and become more agile, innovative, and resilient to better meet their evolving needs.
There may be no physical institution as historically revered as a bank.
Nice try. Banks these days are hardly elegant or imposing. Most have shrunk in size thanks to rising costs of real estate, and many have disappeared entirely, according to data from the Federal Deposit Insurance Corporation. Chase reduced its branch presence by 190 locations, a 3.4 percent decline, from 2012 to 2016. Wells Fargo closed 98 branches, a 1.6 percent decline in the same period. Its peers are even more aggressive. Bank of America closed 243 branches (16 percent) in that period and Citi closed 302 (28.5 percent).
Branches are consolidating locations with lower servicing volume, opening in higher growth areas and renovating existing branches and ATMs. More importantly, they’re evolving into more compact, digitally oriented spaces that incorporate new technology and help branch employees focus on improving the customer experience.
While those in the banking industry feel there will always be brick-and-mortar branches, in large part because the business of banking is grounded in trust, and in knowing the person with whom you’re working, the move to digital technologies is expected to grow exponentially.
Fundrise, one of the leading online investment platforms for real estate, has launched the “2.0” version of their platform. Fundrise has created a Robo-Advisor focused on real estate thus providing an investing tool to match individual investor needs.
The Fundrise Robo-advisor enables individual investors to create a highly diversified real estate portfolio accessing Fundrise’s growing number of eREIT’s. The service provides an estimate based on submitted variables to extrapolate potential returns. Fundrise estimates users will save up to 40% on fees versus traditional services.
Brokers willing to learn the lost art of making risky mortgages are in demand again.
Mr. Boyd, a 25-year-old account executive at FundLoans in a beach town outside of San Diego, is at the cusp of efforts to bring back an army of salespeople who once powered the mortgage industry and, some say, contributed to the housing crisis.
Brokers are a key part of a mortgage chain that starts with a borrower going to a broker for a loan. The broker surveys lenders for the best loan to fit the customer. The lender then funds the borrower’s loan.
While brokers before the crisis served banks and independent lenders, today they are working largely for nonbank lenders who make up a critical part of the mortgage market.
In the first quarter, nonbank lenders accounted for about half the mortgages originated in the U.S., according to industry publication Inside Mortgage Finance.
In the first quarter, nearly a decade after the start of the housing crisis, lenders originated just $6 billion in loans to borrowers with less than stellar credit scores or who are using alternative documentation to prove income, a category now known as “nonprime,” according to Inside Mortgage Finance.
In all of 2016, they originated $22 billion in loans, according to Inside Mortgage Finance. Back in 2005, at the peak for such loans, lenders made about $1 trillion of these mortgages.
Meanwhile, the volume of loans produced by mortgage brokers dropped to $37 billion in this year’s first quarter, down about 34% from the last three months of 2016. Loans from brokers peaked at around $1.1 trillion in 2003.
All your life, you’re told that an education will set you up to fulfill the American dream. But once you graduate, you’re faced with onerous payments that seem to hardly dent the principal. You need a steady job, stat. It’s terrifying to forgo a salary to start something new, let alone invest your assets, when you’re obligated to make monthly payments that can reach thousands of dollars.
One startup is helping its users get ahead of their debt and start the new ventures that our economy needs to thrive. SoFi (short for Social Finance) is largely known as the startup that will refinance your student loans, though it aspires to encompass its members’ entire financial lives.
Nevertheless, student loans are SoFi’s bread and butter, a reflection of the generation of Millennials saddled with insurmountable-feeling debt. That’s why, in addition to its unemployment support and career coaching, SoFi has an entrepreneurship program. The benefits include six months of loan deferment, mentorship resources such as connections to investors, and networking with other entrepreneur members.
Of course, SoFi can’t single-handedly revive American entrepreneurship, not least because the cohorts of accepted entrepreneurs are limited, and the types of businesses that SoFi favors skew toward scalable tech startups rather than conventional small businesses. But student loan relief has a definite impact on the participating SoFi members’ ability to launch companies.
We are offering up to 5,000,000 shares of our Class B Common Stock to the public at $5.00 per share. This offering commenced on February 1, 2017 and as of May 30, 2017, we had settled approximately 2,884,129 shares of our Class B Common Stock of the 3,000,000 shares that we had previously qualified for sale. We are including in the offering an additional 2,000,000 shares of our Class B Common Stock to be sold pursuant to this offering circular.
Square(NYSE:SQ) has disrupted the mobile payment market, and could still be in its early innings of growth. Over the past year, Square’s stock has more than doubled, thanks to its impressive and better-than-expected growth and optimistic forecast.
Over the past year alone, Square’s payment volume increased by 33% to over $13.6 billion, and the company is on the verge of becoming profitable. Plus, Square’s services and subscription revenue more than doubled year-over-year, and has tremendous long-term growth potential.
P2P lenders aren’t the only players in the unsecured lending space anymore — some of the biggest names in the industry are getting involved, which could certainly shake things up in the years to come.
One in particular I have my eye on is Goldman Sachs(NYSE:GS).
Goldman first announced its intention to get into the consumer lending business in 2015, and after a couple of years of development, the company recently launched Marcus (named for Marcus Goldman, one of the bank’s founders), its new lending platform that offers personal loans of up to $30,000.
According to a report by TransUnion, nearly 16 million people took out an unsecured loan in 2016, the highest on record. With an average balance of $7,640 and average interest rate of 12%, this translates into a billion-dollar revenue stream if Goldman can build its market share to just 7%.
Cadre, an online investment marketplace providing access and insight into institutional quality alternative assets, today announced a $65mm Series C financing round led by Andreessen Horowitz, with additional participation from Jim Breyer of Breyer Capital, Ford Foundation, General Catalyst, Goldman Sachs, Khosla Ventures, and Thrive Capital. Cadre’s existing investors include DST, Founders Fund, SL Green, and others.
Envestnet | Yodlee (NYSE: ENV), a data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services, today announced the launch of its Personal Financial Wellness Solution at the Digital Banking Summit. The Envestnet | Yodlee Personal Financial Wellness Solution is a suite of applications and APIs that leverages enriched data and artificial intelligence to move beyond organizing historical financial data, helping financial institutions and fintech developers provide actionable, financial guidance to their customers across a spectrum of devices, user interfaces and platforms.
The Envestnet | Yodlee Personal Financial Wellness Solution enables financial institutions and fintech developers to provide actionable tools to help consumers identify their projected OK to Spend balance and easily Save for a Goal. By applying Envestnet | Yodlee’s advanced data intelligence to its enriched transaction data of over 15,000 data sources, financial service providers can derive actionable information from consumers’ financial data in order to measure, guide and improve consumers’ financial health.
OK to Spend
Core to the Personal Financial Wellness Solution is OK to Spend, which synergizes predictive analytics and user feedback to deliver smart financial forecasting. OK to Spend can be consumed as a financial application or a fully RESTful API framework that enables financial service providers to create forward-looking forecasts that organize and predict recurring income and financial obligations along with personalized notifications for financial events and projected balances. OK to Spend analytics is run across the consumers’ primary spending accounts (cash and credit card) regardless of which financial institution they primarily bank with, in order to provide a holistic view of their finances.
Patent-protected machine learning and data analytics enable the OK to Spend algorithms to identify sources of recurring income and accurately predicts future income, accounting for anomalies. Similarly, OK to Spend identifies recurring and forecasted financial obligations, while accounting for fluctuations determined from historic data.
Save for a Goal
The Save for a Goal application allows consumers to easily set and track savings goals. The application facilitates money movement across different accounts at a specific time frequency and allows customers to better track their goals by allowing consumers to allocate multiple goals to a single account, or spread a single goal across multiple cash and investment accounts. Save for a Goal provides visual data and notifications such as progress bars, charts, graphs and alerts, engaging customers with the option to flex and prioritize between goals.
The role of the individual and institutional single-family residential investor is highly undervalued and tremendously under-appreciated. About 10 million individuals, businesses and institutions provide secure housing and jobs for millions of average Americans. 67 million souls live in single-family rentals, a million more properties are added each year employing millions of individuals, to buy, renovate, lease and maintain as safe housing for tenants in affordable to luxury markets. Single-family rentals have been discovered as a low-risk passive income revenue source and a growth asset in a balanced portfolio or personal retirement plan.
Using Harris Poll, single-family real estate investors were surveyed nationwide to understand why, where, what and how they invest and manage these properties to provide stable housing and realistic returns on their personal and company investments.
The report touches several other critical components that shape this market. Key among these are how the single-family real estate investor effects the economy, how investors view their properties (as added rental income or as an intentional business goal), investor decision points, and the investor as a customer,” says Steve Murray, Founder & CEO Real Trends.
To download your free copy of the Iceberg Report Executive summary, please go to
These days, there are few “typical” CPA firms left. As they seek to diversify, differentiate and grow by offering their clients value added services, firms are engaging in a much wider range of activities.
With the rise of a new generation of B2B financial technology companies, or Fintechs, the opportunities for CPA firms to offer new services have never been better.
Fintechs are infiltrating every aspect of B2B financial services, and venture investment continues to pour in. Where people used to look to QuickBooks, Oracle and SAP, now there are cloud-based accounting and ERP options like Xero and Freshbooks and NetSuite and Workday. But you probably know about those.
What you might not know is that Fintechs are moving into e-invoicing, expense reporting, data sharing and protection, compliance, tax management and fraud control. They’re executing specific parts of the banking value chain better, cheaper and faster, including lending, trade finance, and payments. Some are even considering becoming banks themselves.
Fintech solutions solve the whole thing– all types of payments and all the work that goes along with the payments. Companies can make 80 percent or more of their payments electronically, and that saves a lot of resources, especially if you’re a BPO writing hundreds of thousands of checks on behalf of your clients. You could be helping them get a lot more card rebates instead.
But what visibility really does is open up more opportunities for CPA or audit or BPO firms down the road. If you’re a BPO, visibility into payments could potentially help you work better with vendors.
The more you can help clients automate, the more nimble they are and the more nimble you are.
So, I did a bit of research on what Goldman Sachs Bank is offering compared to others in the market. I looked at Bankrate and Nerdwallet to see who were the top offerings for savings accounts and CDs of various duration. What was interesting to me is that Goldman Sachs was at or near the top in every category.
For savings accounts there were a couple of small regional or local banks that had slightly higher rates but no major national banks were higher. If you look at 3-year CDs with a minimum investment of $500 (the Goldman Sachs minimum) I could not find an offering anywhere in the country that came close to matching Goldman’s 1.90% rate. In fact, the second highest rate available anywhere for a $500 3-year CD was 1.65% from Barclays.
All sorts of interest groups are flying in this week to nab some time with lawmakers before the July 4 recess.
The Marketplace Lending Association, a trade group that represents digital financial and lending startups, is in town this week for its first-ever fly-in, meeting with lawmakers and regulators. “The goal is to bring Washington up to speed on the growth of the sector, as well as the emerging partnerships between the fintech member firms and banks,” according to the group. Its member companies include Lending Club, Prosper, Funding Circle, Avant, Marlette Funding and Affirm.
On June 13, 2017, The Financial Industry Regulatory Authority (FINRA) declared the establishment of the Innovation Outreach Initiative, in order to properly assess FinTech‘s industry impact.
FINRA’s Innovation Outreach Initiative comes after the launch of its FinTech site that’s dedicated to emergent topics in the field, and literature on blockchain technology and digital investing.
The initiative will consist of program elements, such as enhancing FINRA’s processes, timely publication of regulatory technology applications, regional outreach roundtable discussions (comprised of FINRA members and nonmembers), and the creation of a FinTech Industry Committee. The committee will help to assist with ongoing discussions about how FINRA’s programs and rules will intersect with FinTech innovations.
Online Lending Policy Institute Names Board of Governors (OLPI Email), Rated: B
The Online Lending Policy Institute (OLPI), a voice for policy analysis, in-depth research, and education for the online lending industry, today announced its Board of Governors, a group of industry experts ranging from academics to lawyers to executives from twelve leading organizations. This newly elected group joins founding members of OLPI: Cross River Bank, Boston University’s Center for Finance, Law & Policy, and RocketLoans.
The Board of Governors are:
Frank Borchert, General Counsel, Marlette Funding/ Best Egg
Colin Darke, General Counsel/Chief Compliance Officer, RocketLoans
Dr. Michael Dooley, Chief Economist, SoFi; professor of economics UC Santa Cruz
Marc Franson, Managing Partner, Chapman and Cutler LLP
Michael Freedman, General Counsel, BorrowersFirst, Inc.
Gilles Gade, CEO, Cross River Bank
Adam Goller, Chief Credit Officer, Cross River Bank
Cornelius Hurley, Director, OLPI; professor Boston University
John Kromer, Partner, Buckley Sandler LLP
Robert Linderman, General Counsel, Freedom Financial Network, LLC
Tim Li, CEO, Kuber Inc.; professor Fintech School
Marshall Lux, Senior Fellow, Harvard Kennedy School
Marty Mitchell, Managing Director, ProBank Austin (formerly Professional Bank Services)
DiversyFund, Inc., a fast-growing full-service online real estate investment platform, announced the next ground-breaking real estate investment project that their partnership with Roman James Design Build will undertake. DiversyFund and Roman James will be building a new ultra-luxury in Hollywood Hills, one of the most exclusive neighborhoods in Los Angeles.
This investment opportunity is located at the end of Granito Drive in the prestigious Hollywood Hills community of Los Angeles, California, home to Hollywood celebrities, professional athletes and Fortune 500 CEOs.
Van Valkenburg called on Congress to “rationalize the chaos of financial regulation,” pointing to the horrifying reality there exists a byzantine environment of state and federal regulators that, well simply put, doesn’t make sense.
London-based fintech companies attracted more than three times as much capital in the first quarter as Berlin – Europe’s second largest fintech investment hub – and maintained its market share despite moves by other cities in the region to gain from the UK’s departure from the EU.
New research from data provider FinTech Global found six cities that stand out in Europe’s fintech arms race, with companies based in London, Berlin, Stockholm, Paris, Barcelona and Amsterdam raising $823m in the first three months of 2017.
Overall European investment stood at $1.2bn, with London claiming a 36% share at $421m — more than treble the $140m investment in Berlin-based companies, according to the research.
Over the previous three years, London accounted for 39% of European investment, suggesting that the impact of last year’s Brexit vote has been slight.
With the UK in the early stages of Brexit and now facing a General Election, new research conducted by RateSetter Business Finance reveals how credit conditions look to be tightening again, with over 400,000 small businesses now interested in finding an alternative to the banks for a loan.
When asked, 32 per cent of SMEs that had considered raising finance said that it was now harder than six months ago.
As banks are progressively closing their branches and cutting back on front-line staff, businesses now need to go elsewhere to benefit from face-to-face contact before borrowing money. With over a third of small businesses preferring to seek advice in person, the move to online-only offerings and the closure of physical branches is a concern.
Hive claims it will be the first crypto currency invoice financing platform for SMEs, with its ICO opening in 4 days and closing at the end of July.
From what I can gather – and I’d say you’re best to verify this yourself – Hive tokens give holders the right to participate in the network and generate a return by funding invoices. The carrot for small business owners is the speed of execution of the financing element.
And while I was lucky enough to get a master class in person, if you haven’t yet got your head around tokens and ICO, these articles are worth a read:
This announcement is made by Credit China FinTech Holdings Limited (“Company”) on a voluntary basis.
Reference is made to the announcement of the Company dated 26 April 2017 in relation to the Investment in Singapore Life (the “Announcement”). Unless otherwise defined, the capitalised terms used herein shall have the same meaning as those defined in the Announcement.
The board of directors of the Company is pleased to announce that Singapore Life has been approved as a fully licensed direct life insurer by the Monetary Authority of Singapore.
Singapore Life will also soon offer life insurance solutions to customers through its online platform www.singlife.com and financial advisers.
On the other hand, as Grossman points out, ‘since Macron has publicly stated that innovation and disruption is key for France’s growth potential, his intention for closer integration with Europe has been broadly welcomed by the fintech industry.’ Macron seems to be pro-PSD and has invited those affected by Brexit to work in the technology sector in France, all are welcome under En Marche. The French president is also very supportive of SME growth and is interested in helping French Tech.
Macron’s initiatives so far are clearly in favour of the development of fintech in France and with billions promised for innovation, the president is returning to supporting this space, as he did with The Family in Paris, as Grossman points out.
Prosper is currently lending significantly more than it is being repaid for the first time in roughly a year.
In March, the platform posted its first positive monthly net lending figure ($200k) since May of last year. April saw net lending growth to c. $15m.
RateSetter has posted back-to-back months of negative net lending in April and May (roughly £-700k and £-4m respectively). There are no other negative net lending months in the platform’s 6-7 year history.
Gargantuan sovereign wealth portfolios are increasingly turning to private debt exposure with almost two-fifths of portfolios now actively investing in the asset class due to its potential for stable risk-adjusted returns and portfolio diversification benefit.
The report found that 39 per cent of sovereign wealth funds now invest in the asset class, an increase of five percentage points over the past 12 months. The majority of sovereign wealth funds with over $10bn in assets now allocate to the asset class, including two-thirds of those managing $250bn or more, and all of those managing $100-249bn.
Libyan Investment Authority is one such investor in private debt that allocates to the asset class as part of its private equity portfolio. The fund targets distressed debt and mezzanine funds in Europe, North America and MENA.
Mezzanine investments are the private debt fund type most appealing to sovereign wealth funds, with 70 per cent targeting the strategy over the next 12 month and direct lending is sought by 53 per cent.
The Australian Securities and Investment Commission (ASIC) has signed an agreement with the Hong Kong Securities and Futures Commission (SFC) to provide mutual support to fintech businesses from Australia and Hong Kong seeking to operate in each other’s markets.
Under the agreement, ASIC and SFC will refer fintech businesses to each other for advice and support via ASIC’s Innovation Hub — aimed at helping fintech businesses navigate Australia’s regulatory framework without compromising investor and financial consumer trust — and its Hong Kong-based equivalent, SFC’s Fintech Contact Point.
India based Peer-to-Peer lending website, Faircent, has announced the launch of what it claims to be a first-of-its-kind Portfolio What-if Analysis (PWA) tool on its platform. According to the company the tool will allow lenders to simulate different loan scenarios and understand how multi-loan portfolios in peer-to-peer lending operate through a ‘What-if’ analysis.
Using the tool lenders can create a test portfolio and specify the amount they would like to invest, along with the duration, interest rates, and tenure. The Portfolio Simulator will then perform advanced algorithm-based calculations based on the input, generating projected portfolio returns by following a standardized method using the concept of Net Annualized Return (NAR).
Rupaiya Exchange received the award for Best Peer-to-Peer Lending Platform in India in The Asian Banker Financial Peer-to-Peer Audit Awards Programme 2017. The awards ceremony was held in conjunction with the prestigious Asian Banker Future of Finance Summit 2017, the foremost annual meeting for decision makers in the financial services industry in the Asia Pacific region, held at the Asian Civilisations Museum, Singapore.
The awards evaluation criteria were based on multiple dimensions including financial performance, risk management processes, technology, innovation and strategy.
Facilitating simple, fast, and tech-enabled banking services, the emergence of fintech is forcing banks to rethink old business models and delivery mechanisms to adopt a more technology-driven and consumer-centric approach to retail banking.
Leading this ‘uberisation’ of financial services is the online P2P (peer-to-peer) lending sector, which is driving disruption in the institutional lending space through its simplified, tech-enabled approach. What this also means is that online P2P lending will play a significant role in driving the Indian economy.
The adoption of technology means that loan approvals and disbursals can be facilitated in as little as 24 hours from the request origination, whilst digitised operations and processes allow for minimisation of overhead costs. This translates to greater benefits for all stakeholders; while borrowers pay lower interest rates and processing fees, lenders earn higher margins and returns on their investments.
Dubai SME’s financial arm and peer-to-peer lending platform Beehive had signed a memorandum of understanding (MoU) to aid financing for small and medium enterprises (SMEs).
The MoU between Beehive and the Mohammad Bin Rashid Fund (MBRF) will make it easier for SME owners in Dubai to obtain loans for development and expansion at competitive rates through the Beehive Group Finance Platform.
Under the deal, MBRF would act as a guarantor for credit of up to Dh500,000 on SME financing for a period up to 36 months.
LendingArch, a Calgary-based online and point-of-sale lending platform, announced its expansion to Quebec. LendingArch has partnered with medical clinics and home improvement contractors in Quebec to offer POS financing options, enabling LendingArch to become a fourth in-store payment method by applying online to finance products or services for up to 36 months.
News Comments Today’s main news: Earnest is looking for a buyer. SoFi gets into wealth management. DBRS assigns provisional ratings to SoFi Professional Loan Program 2017-C LLC. Prosper issues new securitization backed by George Soros. Lending Club hires PayPal exec as new president. TransferWise reaches profitability. Renren announces 2016 results, unaudited. Today’s main analysis: Capital One forays into digital ID. Today’s […]
SoFi gets into wealth management. GP:”Offering multiple financial products will help with branding and with creating a customer reflex to contact SoFi for all their financial needs.” AT: “SoFi is getting into more and more areas of financial services. A part of me applauds all of the efforts, but there is a part of me that wonders if expansion is happening too rapidly. One thing is for sure, they know how to earn media attention.”
Capital One forays into digital ID. AT: “Capital One has long been a leader in banking services. Banks in general are way behind on digital services. I’m glad to see a big national bank approaching this.”
Lending Club hires PayPal global credit head as new president. GP:”Very impressive hire from Scott Sanborn to continue building up the team. Credibility continues to improve. If only origination was closer to $3bil /quarter, I think all indicators would be in the green. “AT: “When startups snag top talent from established companies, it’s time to stop calling them startups. This is a great talent acquisition for Lending Club.”
Earnest is looking for a buyer. GP:”This is going to be a hard sale. We have published a few articles (here is one from Frank Rotman) trying to understand the value of an online lender to banks or potential purchasers and it is not clear. “AT: “This is interesting. Last November, Earnest announced helping to refinance $1 billion in student loans. This would be a good buy for an online lender, or a bank, that wants to tap into this market. It could be one way for a legacy bank to get into online lending without building its own platform.”
TransferWise reaches profitability, planning new financial services. GP:”Profitability is over rated in the UK and underrated in the US. This is a great milestone at a good time in the company life. Well done. IPO next? “AT: “Congratulations. This is a boon to online lending in general and UK P2P lending in particular. The more firms that achieve profitability, the better it is for all.”
SoFi wants to be at the center of its members’ financial lives, and believes the best way to do so is to provide new products that complement its existing portfolio of student loan, mortgage and other loans. Today the company is announcing the launch of SoFi Wealth, a product it believes will compete with Wealthfront, Betterment and other low-cost wealth management platforms.
But the company is looking to go a step further than just creating yet another roboadvisor. SoFi Wealth will offer access to non-commissioned, licensed financial advisors that members can reach by phone or by chat to answer investment questions or just help them improve their overall financial health.
Wealth management customers will get the same benefits as other members, including access to community events, career coaching and discounts on other SoFi products. Management fees will be waived for SoFi loan borrowers, but otherwise are just 0.25 percent and will be waived for the first $10,000 invested.
People interested can sign up with as little as a $500 initial investment or monthly recurring deposit of $100 for access to any of its low-cost ETFs.
Capital One Financial is trying to turn the expense of thoroughly vetting bank customers into a moneymaker with new digital identity products.
In so doing, Capital One is one of the first in the U.S. to test if businesses will pay banks to check users’ identities, and if consumers will sign into websites through their banks the way they use social media accounts. Since banks already have to collect and verify sensitive information, to comply with know-your-customer regulations and to prevent fraud, they theoretically could leverage this work and expertise for other businesses. Consumers, in turn, would have fewer passwords and usernames to remember and would not have to give out sensitive information such as Social Security numbers quite as often. Banks in Europe and Canada have begun to offer such services.
DBRS, Inc. (DBRS) has today assigned provisional ratings to the following classes of Post-Graduate Loan Asset-Backed Notes (the Notes) issued by SoFi Professional Loan Program 2017-C LLC (SoFi 2017-C):
— $96,069,000 Class A-1 rated AAA (sf)
— $230,156,000 Class A-2A rated AAA (sf)
— $175,653,000 Class A-2B rated AAA (sf)
— $41,000,000 Class B rated AA (sf)
— $18,000,000 Class C rated A (sf)
Lending Club has hired the head of Paypal’s global credit business as its new president, amid efforts to get on the front foot after last year’s loan mis-selling scandal.
Steve Allocca, PayPal’s vice-president of global credit, will start work at Lending Club next week, the company said in a statement on Tuesday, reporting to Scott Sanborn, chief executive. He will lead Lending Club’s efforts to deliver credit to more people across an expanding range of product categories, the company said.
PayPal Credit is the successor to BillMeLater, which PayPal’s then-parent, eBay, bought in 2008. The idea was to expand the company’s financial offerings, help merchants get more business and beef up its fraud detection tools.
Before joining PayPal in 2013, Mr Allocca had various consumer-facing roles at Wells Fargo after training as a banker at First Chicago, a bank bought by Bank One and then JPMorgan Chase.
According to a report by Bloomberg, Earnest is up for sale. The San Francisco based online lender is said to have an asking price of $100 million. Founded in 2013, Crunchbase reports Earnest has raised over $99 million not including an undisclosed sum in a VC round in January 2016 and $200 million of debt financing.
DBRS, Inc. (DBRS) has today conducted a review of the outstanding public ratings of five securities from three structured finance asset-backed securities transactions: OnDeck Asset Securitization Trust II LLC, Series 2016-1; OnDeck Account Receivables Trust 2013-1 LLC; and Prime OnDeck Receivables Trust II, LLC. Of the five ratings reviewed, all were confirmed at their current rating levels.
SoFi was founded on the business of helping high-earning graduates refinance their student loans. But perhaps ironically, CEO Michael Cagney thinks today’s record amount of student loan debt is a bad thing.
“When you go to a school and take a loan out, no one explains what you can afford, how much money you’re going to make when you graduate and how much you’re able to pay back,” he explained.
Meanwhile, universities aren’t incentivized to provide that education because it’s in their interest to have students matriculate, and there’s no downside to the college when a graduate is unable to pay back their loans.
Money360, a commercial real estate marketplace lending platform, closed more than $45 million in loans in April, the company announced today. This brings the company’s total production to over $250 million in closed loans, with an expected $500 million in transactions by year-end. Money360’s recent loan closings span properties nationwide and provide a variety of borrowers with quick funding to purchase or refinance income-producing properties.
The more than $45 million in loan closings, all of which have loan-to-value ratios of not more than 75 percent, include:
A $9.70 million bridge loan for a two-story, 198-room hotel property in Fayetteville, North Carolina. The 131,000 square foot property was built in 1983 and renovated in 2011.
A $7.70 million bridge loan for a multi-tenant, medical office building in San Jose, California containing 20,341 square feet of rentable space.
An $8.50 million bridge loan for a five-story, multi-tenant office property in Orange County, California containing 58,755 square feet of rentable space.
A $4.90 million bridge loan for a two-tenant, 19,107 square-foot anchored retail property in Ocean County, New Jersey.
A $6.00 million permanent loan for a one-story, 10-tenant retail property in Johnson County, Kansas containing 39,483 square feet of rentable space.
A $3.48 million permanent loan for a one-story, four-tenant retail property in Johnson County, Kansas containing 21,450 square feet of rentable space.
A $5.00 million permanent loan for an anchored retail center containing 202,219 square feet of rentable space, located in San Bernardino County, California.
Financial advisors may want to pay closer attention to automation in retirement savings accounts. Auto-escalation and auto-enrollment played major roles in how Fidelity retirement savings accounts reached new highs this year, Bloomberg writes.
Among the 27% of employees who raised their contribution, 50% did so in such auto-escalation accounts, Jeanne Thompson, a senior vice president at Fidelity, tells the news service. And for workers under 30, automated increases accounted for a whopping 68% of the rise in savings rates, according to Fidelity’s analysis.
CBC National Bank, headquartered in Fernandina Beach and with branches in Fernandina Beach, Ocala and The Villages, Fla., and Beaufort and Port Royal, S.C., today announced that it has been named by LendingTree as the 3rd highest customer-rated mortgage lender in the first quarter of 2017.
Online loan marketplace LendingTree said its rankings feature top lenders in multiple loan product categories, including mortgages, personal loans, business loans, and auto loans. CBC National Bank earned the 3rd highest ranking in the mortgage category.
Last year, the Office of the Comptroller of the Currency (OCC) set a course for the future of financial services. Now it appears that the agency is adrift without a captain, and a storm is upon it.
The fintech charter proposal may not survive legal challenge. The OCC has said that it has authority to issue fintech charters to non-depository companies if they engage in other “core banking activities,” such as paying checks or lending money. But that position is based only on the OCC’s own 2003 regulation, which the state regulators are also challenging. And, as Sens. Merkley and Brown noted, other SPNBs that do not accept deposits (bankers’ banks, credit card banks, and trust banks) are specifically authorized by Congress under the National Bank Act.
Congressional Republicans and Democrats have both recognized the importance of the issue, and Congress is the right institution to explore the implications for the burgeoning fintech industry and the federal-state banking system. And unlike the highly partisan warfare over the Dodd-Frank Act, the SPNB charter provides a rare opportunity for members of both parties to work together to fully examine the risks and benefits of providing a national bank charter to fintech companies.
Finra chairman John J. Brennan said on Tuesday that even if the Labor Department’s fiduciary rule is repealed, it has elevated and put into plain language the idea of providing investment advice that’s better for clients’ returns than for financial advisers’ revenue.
The DOL regulation, which would require financial advisers to act in the best interests of their clients in retirement accounts, was supposed to be implemented on April 10. That date was pushed back to June 9 so that the agency can reassess the measure under a directive from President Donald J. Trump that could lead to its modification or repeal.
If the DOL rule meets its demise, the concept will live on at the Securities and Exchange Commission and at Finra, the broker-dealer self-regulator, Mr. Brennan said.
Finra president and CEO Robert Cook said he supports the concept of raising advice requirements for brokers.
The SEC’s new chief is likely to focus on well-functioning capital markets and capital formation rather than enforcement, Todd Cipperman writes in the Hill.
But Clayton’s “Wall Street pedigree” and his opening statement to the Senate Banking Committee suggests that he will not spearhead enforcement to the same extent as his predecessor, Mary Jo White, Cipperman writes.
As a securities lawyer to Wall Street firms, Clayton will likely focus on broader policy goals and regulations vetted by the financial industry, in part by putting more emphasis on the Division of Investment Management and the Division of Trading and Markets rather than enforcement, according to Cipperman.
But Clayton’s reign isn’t likely to result in unregulated markets. Clayton cites as role models former SEC chairmen Arthur Levitt and William Donaldson, both of whom were tough on the industry despite being insiders, according to Cipperman. Because of that — and because regulatory change occurs slowly — advice firms should stay focused on compliance, he writes.
A local startup that uses crowdfunding to invest in residential real estate is starting to make bigger acquisitions by progressing from rental homes to apartment complexes.
Jacob Blackett and Sterling White launched Holdfolio in October 2014 by attracting investors to collectively purchase run-down rental houses that the company could renovate with hopes of turning a profit.
Now the company has acquired its first apartment property, in the Garfield Park neighborhood on the city’s near-south side, and has another under contract in Beech Grove.
Holdfolio buys properties and bundles them into a portfolio. The residential properties are renovated, and outside investors can buy equity stakes in the properties via an online platform. They receive returns from rents paid for the properties.
The company so far has drawn about 100 investors who have forked over a minimum of $10,000 each. Holdfolio says they have reaped an 8 percent average annual return on their contributions.
The company targets properties that are considered distressed and in areas of the city that can benefit from the company’s investment. Holdfolio typically purchases the homes it targets for roughly $25,000.
Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the appointment of Denise Russell as Chief Risk Officer, effective immediately.
As Chief Risk Officer, Russell will oversee internal audit, regulatory compliance and enterprise risk management operations including risk identification and mitigation activities. She will work closely with the Elevate executive and legal teams to identify opportunities for enterprise risk reduction in support of the company’s strategic plan. Russell will lead a team of more than 15 compliance, audit and risk management professionals.
Six years after launch, TransferWise, the London-headquartered international money transfer startup, which was most recently valued at a reported $1.1 billion, has announced that it has finally reached profitability this calendar year and is “cash-generating”.
Breaking this down a little, the company says it’s currently seeing £8 million per month in revenue, which extrapolates to a £100 million revenue run-rate, and is growing 150 per cent year-on-year and expecting to do the same this year. It also says over £1 billion is being moved every month, saving its customers what it claims to be over £1.5 million per day in foreign exchange fees.
With that said, let me speculate on what products I think the company could quite easily move into, should it choose to do so. Friend-to-friend or P2P payments within the same country, along the lines of Paypal’s Venmo or Barclays Pingit, doesn’t seem a stretch, given that TransferWise already has much of that infrastructure already in place. It also seems odd that the company doesn’t offer its own debit card with low cost currency exchange when spending abroad, for example.
Were TransferWise to do the latter, that would see it go up against Revolut, and a ton of other much more recent fintech startups that utilise MasterCard’s low exchange rate, including all-your-cards-in-one app Curve, of which Hinrikus himself is an investor.
Peer to peer property lender Lendy has surpassed £310 million in originations with £50 million coming in last 100 days. The P2P lender states that investors and developers are responding to post-Brexit slowdown in bank lending. Lendy adds that quick turnaround, security and low Loan to Value (LTVs) are key to their growth. Lendy says there are over 16,000 registered users on their site.
Lendy highlighted several UK property investments recently listed on their platform:
£7.5 million for the purchase and redevelopment of a commercial building in Marylebone, central London
£5.7 million for the development of a major residential building at Liverpool waterfront
£2.4 million for the development of a major student accommodation complex in Huddersfield
CreditEase announces today that its founder and CEO Ning Tang has been appointed to the University of Oxford’s Said Business School’s (“Oxford Said”) new Global Leadership Council. This council of senior global leaders will provide independent advice and guidance to the school.
Said Business School is a vibrant and innovative business school embedded in the historic and prestigious University of Oxford. The school offers programs and research opportunities that have global impact and help individuals and organizations find ideas and valuable network to tackle world-wide problems. As one of the fastest growing business schools in the world, the school is ranked 1st in the UK in the FT’s ranking of open enrollment programs in 2016, and 2nd globally for aims achieved in the FT ranking of MBA programs in 2017.
PEER-TO-PEER investment manager BondMason is increasing its exposure to non-P2P lenders to broaden its offering.
The firm aims to get its clients a seven per cent return by selecting P2P loans across approved platforms on their behalf, but chief executive Stephen Findlay says he is now looking outside the industry to provide more diversification for investors.
BondMason is also working to increase awareness among financial advisers and recently partnered with professional body the Chartered Institute of Securities and Investment (CISI) to compile a report on the P2P sector.
Revolut has quietly allowed users to make international money transfers in roughly 3-5 days for some time. These transfers are free for amounts of up to £5,000, with a 0.5 per cent charge applying for larger amounts.
Now there is a new Turbo option, which will see international transfers delivered in 1-2 business days, for a flat rate fee of £5 for amounts of up to £5,000, again with a 0.5 per cent fee applied for larger sums.
China Development Bank Capital, an investment unit under China Development Bank, has led a US$42 million strategic investment in Chinese financial technology firm Wacai.
Chinese investment firms CBC Capital, New Horizon Capital, Qiming Venture Partners and Ally Bridge Group also participated in the financing round, the company announced today. Today’s investment brings the company’s total fundraising to over US$200 million cumulatively.
The company has cumulative users of 160 million and has facilitated wealth management product transactions in the range of RMB100 billion (US$14.5 billion) annually, it says.
TWINO, Europe’s fastest growing peer-to-peer (P2P) lending platform, has today released the first ever Alternative Lending Index (ALI) in conjunction with KPMG.
The report compares lending environments across Europe over the period 2010- 2016.
· Highest ranked countries for alternative lending in Europe are: Hungary, Slovenia, Latvia, Poland, Romania, Greece and Ireland
· Countries with largest potential in terms of overall lending market size and alternative lending environment are: Poland, Greece and Ireland
· In 2010-2016 total density of credit institutions per 1 million inhabitants decreased from 19 to 15
· Aggregate European credit gap has increased from close to breakeven in 2010 to 12 percentage points of GDP
· Significant differences in availability of financing for household and corporate borrowers across countries:
· UK significantly higher for corporate borrowers than for households
· Credit gap for the UK and France is negative, indicating lending demand is met with a surplus
· Germany is lending market leader – total outstanding loans reach EUR 2.5 trillion, followed by France, where outstanding loans are EUR 2.1 trillion
· Ireland top country by number of credit institutions per 1 million inhabitants, followed by Austria and Finland
Currently the countries ranked as the most favourable for the expansion of alternative lending are Hungary, Slovenia, Latvia, Poland, Romania, Greece and Ireland whilst France, Germany, Netherlands, Austria, Finland and Sweden show highly efficient lending markets and therefore the lowest ALI.
Potential investment risks for investors are well-balanced and brought to minimum: all loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away;
You have access to your money at any time – if you decide to withdraw invested money before the due date, you can receive your money starting from 14 to 28 days after your request with (or without) accumulated interest, depending on your chosen investment plan and preferred withdrawal term;
Your money never sits still; it is always earning. Auto Invest program on DoFinance reinvests funds the moment the borrower returns the loan and the investor’s money becomes available.
According to the press release Alfa Finance Group has invested 2 million Euro in launching DoFinance. Can you please describe what the money was used for?
The money was invested in technologies to create the platform and in building our loan portfolio.
What was the greatest challenge so far in the course of launching DoFinance?
The greatest challenge was to develop a risk assessment tool that would minimize the risk of failure to repay the loan, be effective and secure. Risk assessment and management is our strength, and all our loans are secured with a BuyBack guarantee. If the borrower doesn’t pay back the loan, you don’t have to wait for an extra 30 days (after the investment due date) to get your funds back – your money is available right away.
Another challenge was becoming available also to Asian investors. DoFinance is the first European-based P2P lending platform to open customer center in Indonesia, bringing together European customer centered approach and Asian investors. We are happy to be the first ones to offer such individual approach to all our customers and give the chance to Asian investors to invest in Europe.
Is DoFinance open to international investors?
Yes, DoFinance is available to private individuals holding a bank account in EU, EEA countries as well as Asian countries which are not included in the lists of high-risk and non-cooperative jurisdictions and international sanctions (Indonesia, Singapore, Vietnam etc.).
What is your opinion on the planned upcoming regulation in Latvia for p2p lending?
Fintech industry has a potential to become Latvia’s success story which would contribute to both image and prosperity of the country, thus there must be healthy balance between industry regulation and its self-regulation. The entire financial industry and eventually the consumer will benefit from the development of FinTech as banks and FinTech companies will start cooperating when it comes down to providing financial services, customer service etc. Therefore, it is the state’s responsibility to create environment where these companies will stand and where intellectual capacity of labor will increase and taxes will be paid. At the same time, the regulation must ensure transparency and monitoring – simply because then dishonest entrepreneurs wouldn’t be able to harm investors.
U.S. stocks are strong; developed world stocks are rallying, but still uncertain; and despite some investors’ fears, emerging markets are still appealing. Here’s what’s been happening in the market over the past few weeks.
U.S. equities remain strong
United States equities are continuing to look very attractive after a positive jobs report and an impressive earnings season. The hiring report in early May was more positive than expected with 211,000 jobs added in April, bringing unemployment to a 10-year low. There was also continued wage growth, meaning that, on average, households were getting a bump in income. This increased spending power in the economy bodes well for U.S. equities (stocks).
Earnings season has also revealed impressive corporate earnings growth. While it’s relatively easy to have nowhere to go but up after negative earnings growth in the first two quarters of last year, it’s still reassuring to see higher company earnings and sales growth pushing stock prices up.
Developed world equities still uncertain despite rally
Over the past two weeks, stocks of companies in the developed world outside the U.S. are catching up after lagging behind for much of the post-U.S. election rally. This is largely because European equities were held back due to uncertainty about which way the French election would go. With Macron’s victory and a smooth election in the Netherlands back in March, developed world (excluding U.S.) equities have begun to close the gap.
In Japan, equities remain reliant on Japanese policy makers to lead the country out of its current disinflationary state, but current efforts inspire little confidence based on the failure of similar policies in the past.
Emerging markets hold potential
The cyclical recovery story in emerging markets is still holding our attention. After years of lagging behind the developed world with recessions in Brazil and Russia, we are finally seeing growth at a faster pace. Global trade is accelerating once more, and the positive growth in the U.S. and E.U. is expected to further boost emerging market economies as demand for exports increases.
There have been some recent signs of slowed growth in China. This is mostly due to the fact that China recently raised interest rates in order to curb property price inflation.
European and U.S.-based tech ‘scale-ups’ with Asia ambitions, rejoice. Outing today is a new $500 million VC fund from Silk Ventures, and backed in part by the Chinese government.
It plans to invest across all stages from Series-A upwards, and says that, although it will remain open to tech startups from any sector, a key focus will be “deep tech and science, industry 4.0 technologies, such as Internet of Things and robotics, fintech and medtech companies”. I’m told that the first investments from the fund will be announced in July.
Headquartered in London but with offices in Menlo Park, Beijing and Shenzhen, too, Silk Ventures took its tentative first steps as what it describes as a “digital accelerator,” consisting of an online platform connecting startups to corporates, thus facilitating links to Asia.
Meanwhile, the new $500 million fund is backed 50 per cent by the Chinese state-owned Assets Supervision and Administration Commission (SASAC) Shenzhen, who is acting as both an LP and Strategic Partner.
Ever ubiquitous, in 2016 the term ‘fintech’ appeared in the global print media 90,000 times and multiple times that in social media. In a study conducted by Citigroup in 2015, they found that fintech investments topped $19 billion, which represents a tenfold increase from 2010.
The argument towards fintech being perceived as a disruptor is largely due to the fact that fintech start-ups have the freedom to be a lot more nimble. They are not burdened down with legacy technology systems and restrictive regulations.
For example mobile-based banks have emerged in the past year, such as Monzo, Starling, Tandem and Atom, all of which offer accounts that allow customers to manage their money and lifestyle.
Yet, there are many who are of the contrasting opinion that fintech developments are set to be an enabler for established financial service companies. In possession of enormous capital, they are in a position to invest in these technologies and take a more innovative approach towards attracting new customers, cut costs and boost profits.
The emergence of fintech has motivated banks to consider their pain points, in ways which may be solved through technological innovation.
Additionally, banks can look to fintech as a means to enable their revenue growth with higher margin and through less capital-intensive programs, such as insurance or wealth management. By incorporating fintech applications such as robo-advisers and automation into their operational model, they then have the means to scale their business more rapidly to provide services to clients that beforehand were not profitable or were too taxing on their customer service systems.
The campaign, which is already running on radio in Sydney, Melbourne and Brisbane, is scheduled to run across outdoor, social (LinkedIn and Facebook) and digital media to encapsulate an integrated multi-channel outreach.
With the #turnthatNOaround campaign, OnDeck aims to reach small business owners who have experienced a “no” from their banks, giving them an opportunity to secure a loan that is much faster than the banks – taking just one business day.
The founder of an Australia’s robo-advice business says a law change may not be enough to allow such companies to operate in New Zealand.
Under the current law only “natural persons” may give financial advice in New Zealand but a change to the Financial Advisers Act is expected to make robo-advice legal here by 2019.
In New Zealand there are growing concerns about an advice gap after research by the Financial Markets Authority found most people who got professional financial advice had assets of more than $200k, leaving question marks over how people with less money, including those with savings in KiwiSaver, get advice.
Chris Brycki, who founded robo-advice business Stockspot in 2014 and now has several thousand customers, said he was keen to enter the New Zealand market but could not do so because the company could not find a suitable banking partner.
A Singapore central bank-backed fintech firm, CCRManager Pte Ltd, on Tuesday launched what it says is the first digital platform for the distribution of international trade financing, transactions now handled mainly by phone and email. CCRManager Pte Ltd, which received a grant from the Monetary Authority of Singapore’s Financial Sector Development Fund, is supported by 16 financial institutions, including Bank of China, DBS Bank, Standard Chartered Bank, Mitsubishi UFJ Financial Group, Spain’s BBVA and the commercial insurance arm of Swiss Re.
CCRManager charges a transaction fee on every successful deal. The Singapore-based company said its users will be able to list assets for distribution, negotiate deals, and manage supporting documentation in a secure environment. The web-based platform will enable members to manage the entire process of distributing trade finance internationally to other banks, credit insurers, and fund managers.
The Central Bank of Brazil is eyeing regulations for the FinTech sector this year to help industry startups and companies to enter and expand in the country currently reeling from a recession.
According to a Reuters report today, the Banco Central do Brasil (BCB) – the country’s monetary authority- is looking at implementing these regulations within this year to fuel the growth of FinTech firms and services in Latin America’s biggest economy.
As of March 2017, Brazil’s economy was 8% smaller than it was in December 2014.
While details are scarce, some of the new regulations will help financial technology companies and startups in areas including:
Financing via peer-to-peer lending platforms connecting borrowers directly with individual investors
A wider playground, by facilitating foreign banks to enter Brazilian shores without the need for a presidential decree
Diversification, by helping financial technology companies team up with banks to offer loans or ‘securitized credit from institutional investors.’
News Comments Dear Readers, As you are probably aware Lending Times is organizing an event in New York on Monday August 15th titled “The future of Market Place Lending – Madden and beyond”. We would like to welcome our interested readers to participate in the panel. We have 1 seat available at this time. Please […]
As you are probably aware Lending Times is organizing an event in New York on Monday August 15th titled “The future of Market Place Lending – Madden and beyond”. We would like to welcome our interested readers to participate in the panel. We have 1 seat available at this time. Please contact us if you are interested in participating in the panel.
A report from Zephyr shows a reduction by 40% in M&A volume from H2 2015 except in Middle East and Africa. Global PE and VC volumes followed the same patterns in H1 2016 declining 20% in volume over Q1 2016 and 47% over H2 2015.
8 out of 86 p2p platforms that applied with FCA have been authorized. However, the p2p finance association believes delays are not such a big deal. The main issue is that P2p platforms can not offer ISAs until they are FCA approved. The delay is not a big deal because ISAs are long-term savings products and investors can put money in at any point.
Lending Crowd, the 4th licensed p2p lender in NZ, is seeking up to $5 million from financial services sector investors to help the peer-to-peer (P2P) lender build scale and grow loan volumes. To date, Croad said Lending Crowd has received $22 million worth of loan applications and written $2.5 million worth of loans with 60% of this total comprising personal and motor vehicle loans, and 40% business loans.
In Bankrate’s national survey of interest rates from banks and thrifts for July 13, 2016, the rate on personal loans remained unchanged for the 4th consecutive week at 10.94%. This week’s average rate is down four-tenths of a percentage point from its 2016 high. A year ago, interest on the average personal loan was 11.12%.
There are 3 types of places where you can look for a personal loan:
Finance companies (including online lenders)
As recently as a few years ago, banks dominated this space, accounting for 40% of all personal loan originations, according to the credit bureau TransUnion.
“Even though Prosper and Avant and Lending Club to a certain extent have pulled back, there are other lenders that are filling the void,” Tarkan says. “So I don’t know if there’s going to be this massive decline in availability of credit because the marketplace lending sector is contracting.”
John Ulzheimer, a credit expert who formerly worked for FICO and Equifax, says “every mainstream lender” now issues personal loans, and there are many good options, particularly for people with good credit.
To give some examples, Wells Fargo branches throughout the country offer personal loans. In Los Angeles, the nation’s second-largest bank offers personal loans for as little as 9.25%, while Houston-based Integrity Bank — with 3 southeast Texas branches — charges 9%, according to the Bankrate survey.
Both the volume and value of global mergers and acquisitions dropped significantly over the opening half of 2016, according to information collected by Zephyr, the leading global M&A database. Over the first six months this year, only 43,352 deals were announced for a combined $1.94 trillion. This is down nearly 20% in volume and over 40% in value compared to the 53,287 deals worth $3.27 trillion in the last half of 2015, and 52,637 deals worth $2.94 trillion in the first half of 2016.
The one exception was the Middle East and North Africa, where value climbed 23% to $15.7 billion over the six-month span, despite a small dip in volume. All other regions declined over the same time frame, with the steepest drop reserved for Central and Eastern Europe, which slipped 52% from $88.45 billion in H2 2015 to $42.58 billion this year. The top-performing countries by value for H1 2016 were the US, China, the UK, Switzerland, and Canada.
The Zephyr database also showed both the volume and value of global private equity and venture capital investment followed the same pattern as M&A in H1 2016, declining in the preceding six months and year-on-year. In all, there totaled 2,651 deals worth a combined $196 billion during H1 2016, a 20% decline in volume and 47% fall in value from the final six months of 2015.
Comment: a more detailed article on the hearing from July 12th, 2 days ago.
The meeting saw the participation of several industry executives including representatives from Prosper, CAN Capital, the American Bankers Association, the law firm of O’Melveny & Myer and the National Community Reinvestment Coalition. The meeting was timely as multiple regulatory agencies are moving towards applying additional regulations on online lenders – an act that may place financial innovation at risk.
The “key takeaway” offered by the Committee was that online lending may deliver access to credit to underserved or underbanked communities. For both consumers and SMEs alike. Of course, advancement by online lenders may put traditional banks under additional pressure – something the ABA representative expressed by saying regulation should be based Rob Nichols ABAon activities – in other words, banks want similar rules to apply to online lenders.
Parris Sanz from CAN Capital struggled to explain away their avoidance of using an APR and what approximately CAN Capital was charging borrowers (Ms. Levi clarified it as 36% to 60%).
18% spend more than they household income, 38% spend all their household income. ( in 2009 20% spent more than their household income)
21% of households have medical debt vs 26% in 2012
50% of households have no rainy-day fund , also a diminishing %
26% of households have used non-bank borrowing vs 28% in 2012
32% of households only pay the minimum payments on their credit cards vs 40$ in 2009
9% are underwater in their home equity vs 14% in 2012
Study participants were asked five questions covering aspects of economics and finance encountered in everyday life, such as compound interest, inflation, principles relating to risk and diversification, the relationship between bond prices and interest rates, and the impact that a shorter term can have on total interest payments over the life of a mortgage.
63% of individuals got 3 of fewer basic questions correct in 2015 vs 58% in 2009
Most Americans do not compare offers or collect information from more than one company when shopping for credit cards. This practice suggests a gap in applying financial decision-making skills to real life situations.
58% of Americans do NOT compare credit card offers before choosing a credit card to use.
Lendio Announces Support for SMART Box Initiative Focused on Enhancing Online Lending Disclosures, (Press Release), Rated: A
Lendio (www.lendio.com), a marketplace for small business loans, announced today that it will join industry leaders as an early engagement participant in supporting the model small business lending disclosure called the SMART (Straightforward Metrics Around Rate and Total cost) Box, developed by members of the Innovative Lending Platform Association (ILPA).
The SMART Box is a voluntary initiative to promote transparency through standardized pricing comparison tools and explanations, including both various total dollar cost and annual percentage rate (APR) metrics to further empower a small business to assess and compare financing options.
JPM had a particularly strong quarter was fixed income, currencies, and commodities, or FICC, trading, which produced revenues of $3.96 billion — up 385% from the same quarter last year. Analysts had forecast FICC revenues of $3.57 billion, according to Bloomberg estimates. Those are the highest quarterly FICC revenues for the firm since Q1 2015 ($4.1 billion). You’d have to go back to Q1 2013 to find significantly better results ($4.8 billion).
Many firms have been cutting FICC headcount, including Deutsche Bank, Credit Suisse, Goldman Sachs, and Morgan Stanley, which cut 25% of the division last year.
“We’re investing in it,” CEO Jamie Dimon said at the bank’s investor day in February. “We’re investing in it more on the technology side.”
Now the question is whether JPMorgan was the sole firm to smash expectations or whether we’ll see comparable results across the Street in the coming days.
If you use an independent financial adviser or wealth manager, they’ve probably never mentioned P2P lending.
This might seem strange: there’s been a lot of talk of how the peer-to-peer industry is “moving mainstream”, and volumes reflect that. In 2015, the online alternative finance industry in the UK grew to £3.2bn – an 84 per cent increase from 2014 – and alternative finance lending accounted for around 14 per cent of new loans to small firms.
And at the same time, institutional money has flowed readily into the sector. In the last six months, according to AltFi Data, it accounted for 40 per cent of involvement in the UK market – from almost nothing prior to 2014. But most of this money comes from specialist funds, and institutional money is notoriously fickle.
Financial advisers, however, still seem reticent. “They have always been very interested, but what’s needed is conversations. When we get them in a room and speak to them – show them our processes and due diligence – they become more positive on the space. That can give them the confidence to promote P2P lending to consumers,” says James Meekings, co-founder of Funding Circle.
Most advisers will say that, while they’re not against P2P in principle – often far from it – they want to see the sector go through a cycle before seriously considering it. As wealth management veteran John Spiers says (see below), while Zopa was around during the crisis, other major players weren’t – and 2007 and 2009 were unusual anyway because the level of bankruptcies was so low, owing to interest rates being slashed so fast.
As Spiers also points out, plenty of IFAs have been burnt in the past. Now, they have to demonstrate that they’ve done a certain amount of due diligence on each product they’re recommending and, as has always been the case, they want a fee for those recommendations. As one industry analyst bluntly puts it: “if the IFA hasn’t got a product to sell, he’s not going to recommend P2P. It comes down to whether something has a metric next to it that he can understand, then he can sell it.”
For advisers “funds are the way forward,” says Meekings. They can buy stocks, shares, and funds and manage money on behalf of clients, and their existing tools mean they can buy a fund today. “It gives them diversification and global exposure – which is important, because diversifying across platforms [which can focus on just one area, like consumer credit], rather than assets, won’t necessarily do that,” he adds.
“The industry is working to create a scoring system for returns. This should be a function of the return and the shape, i.e. volatility, of that return. If advisers can study lending performance, based on meaningful and detailed data, they can begin to perform satisfactory due diligence,” says Rupert Taylor, co-founder of AltFi Data.
The Innovative Finance Isa is already giving retail investors the opportunity to hold P2P investments in the recognizable wrapper. While many investors wait for the largest platforms to get approval from the Financial Conduct Authority (currently, only three smaller platforms have been given the okay), it has enticed big players like Hargreaves Lansdown into the ring. And it’s worth noting that investors can, even without the dedicated vehicle, populate a stocks and shares Isa or a Sipp with P2P investments.
Moreover, alternative investments heavyweight Octopus Investments launched P2P product Octopus Choice in April, enabling customers to target higher interest rates than deposit accounts, but with less risk than stocks and shares.
Head of Octopus Choice Richard Wazz says that the reception from the hundreds of financial advisers introduced to the product has been “incredibly positive. Advisers are proving themselves to be not only comfortable but excited to recommend it to large numbers of their clients – seeing it as a new and welcome way of diversifying their portfolios.”
By the time the new Isa had launched in April, just eight out of 86 peer-to-peer lending platforms had been granted the necessary permissions to offer the savings vehicle, according to the industry body. Kevin Caley, managing director of ThinCats, said he does not expect approval to happen before the end of August, adding he guessed it “may well take quite a bit longer”.
But speaking to FTAdviser, the P2P Finance Association’s chair Christine Farnish said the delays were not such a big deal because investors’ money can be put into the Isa at any point.
“It’s just a question of a small amount of time in the overall scheme of things,” she said, adding Isas are designed to be a long-term savings product.
The delays were partly a result of the FCA being made responsible for 30,000 consumer credit firms in 2014, and Ms. Farnish said the peer-to-peer sector got “put to the back of the queue”.
Founded in 2010 by entrepreneurs, Tom Carr and Richard Pearce, Verto Homes stated it designs, builds, and sells intelligent, sustainable homes that produce and store clean energy from the sun. The company noted that none of their homes burn fossil fuels for lighting or heat and each is featured automation technology and is controlled by a smartphone app, called Vesta, which was launched on iTunes in 2015.The homes are available starting at £190,000.
Verto Homes, a London-based builder that creates sustainable homes, launched an equity crowdfunding campaign on Crowdcube to raise £1 million. Within just a few hours, the initiative successfully secured 41% of its targetted goal (£415,000) from 14 investors.
Germany’s leading lending marketplace AuxMoney reports continued strong growth. Loan volume increased from €39.3 million in the first half of last year to €79.5 million in the first half of 2016 ‒ an increase of more than 100%.
Founded in 2007, by Raffael Johnen, Philip Kamp, and Philipp Kriependorf, Auxmoney is Germany’s largest crowdfunding platform and Continental Europe’s second largest P2P lender after French Younited Credit – with whom it is now competing neck and neck. According to research institute GfK, Auxmoney is also the most famous FinTech firm in Germany, which does not come as a surprise given its 1.5 million registered members.
In 2015, Auxmoney’s growth was fueled by a spectacular commitment by Dutch insurance company Aegon, as an Institutional Investor, to lend €150 million through the platform. As for its own capital needs, Auxmoney is backed by top venture-capital firms such as Seven Ventures, Index Ventures, Union Square, Foundation Capital and Partech.
Since its beginnings, Auxmoney has originated €268 million worth of loans, out of which nearly two-thirds were originated in the past 18 months alone. Both the number and the size of loans are increasing: the number of loans originated increased by 69% from 6,337 in the first half of 2015 to 10,688 loans in the first half of 2016; at the same time the average loan size increased from €6,196 to €7,439, a 20% increase.
During the first six months of 2016, at least 264 peer to peer lending platforms were shut down in China. This is a direct reaction to the tightening grip of Chinese regulators. The report published in ECNS, states that even tougher oversight is in store for the P2P lending industry as authorities become more vigilant in uncovering fraud and shutting down platforms that do not qualify under Chinese rules.
China published draft rules in 2015 but like many other government initiatives it was not completely clear as to how enforcement would proceed. There have been multiple high-profile P2P platforms that have collapsed. The best known is Ezubao that was described as a Ponzi-scheme months before regulators showed up to shutter the doors. Ezubao apparently fleeced investors of over $7 billion – an incredible amount. Allegedly over 95% of the projects listed in Ezubao were faked.
As of June, there were an estimated 2,349 P2P platforms in operation in China. Chinese is the largest P2P market in the world.
Lending Crowd is seeking up to $5 million from financial services sector investors to help the peer-to-peer (P2P) lender build scale and grow loan volumes. Co-founder Wayne Croad, who majority owns Lending Crowd’s major shareholder Finance Direct, told interest.co.nz the P2P lender has hired Greg Anderson of Northington Partners to raise up to $5 million dollars through a capital raise.
Funds raised will be used to “assist with growing loan volume by extending marketing and product development initiatives.”
Lending Crowd became New Zealand’s fourth licensed P2P lender last year, receiving its license from the Financial Markets Authority. At the time Croad said Lending Crowd would facilitate secured loans of between $2,000 and $200,000 through its website for small and medium sized businesses, vehicles and personal loans for three and five-year terms.
To date, Croad said Lending Crowd has received $22 million worth of loan applications and written $2.5 million worth of loans with 60% of this total comprising personal and motor vehicle loans, and 40% business loans. He said registered non-bank deposit taker Finance Direct has participated in $900,000 of the loans on the Lending Crowd platform on equal terms with retail investors. There are 220 registered retail investors, and 165 active investors. In terms of loan security, Croad said 30% of loans are secured by cars plus a property, 50% are secured by vehicles, and 20% are secured by property only.
“The average weighted return for investors to date has been 12.50% after fees,” Croad said.