Thursday January 17 2019, Weekly News Digest

marketplace securitizations

News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

marketplace securitizations

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA

Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:

  • No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
  • Higher interest rates, a “whopping” 2.25% APY on your money.
  • Free ATM usage as SoFi will reimburse the fees.
  • Mobile first as your phone is your [bank] branch.
  • Secure – Accounts are FDIC insured up to $1.5 million.³

More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A

Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.

Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.

LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA

LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.

Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA

Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.

Source: Bloomberg, PeerIQ

We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.

Source: Lend Academy

Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA

Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.

Source: Federal Reserve, PeerIQ

Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA

According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.

What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.

Source: PRNewsfoto/S&P Dow Jones Indices

Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A

A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.

LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA

Key Findings:

Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.

Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.

Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A

Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.

Joust launches a digital bank for gig-economy workers (American Banker), Rated: A

The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.

The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.

Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A

Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.

Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.

2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A

1. Consumers demand data control:  a Deloitte report shows 71% of purchased data is … inaccurate.

2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.

6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A

Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.

  1. Freedom Plus
  2. Laurel Road
  3. Lending Club
  4. Lightstream
  5. OneMain Financial

What happens to robos in a downturn? (Financial Planning), Rated: A

As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.

“It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.

SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A

Key findings address:
  • How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
  • Who are emerging SMB-focused fintech companies and partnerships to watch
  • What banking functions and features are most sought after by SMBs
  • How mobile apps are being designed specifically with SMB customers in mind
  • Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
White Oak Healthcare Finance, LLC (“White Oak”) today announced it acted as sole lender and administrative agent on the funding of a senior credit facility for GMF Capital (“GMF”) and Meridian Senior Living (“Meridian”). The funds were used to acquire assisted living/skilled nursing facilities located near Providence, Rhode Island.

FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B

FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.

Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B

Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.

Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.

United Kingdom

RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.

RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.

Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA

PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.

It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.

Boxing icon Frank Bruno will also be on the hotline.

UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A

UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.

In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.

Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B

Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.

Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. 

A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A

Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.

Source: Business Insider

ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.

BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B

BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.

Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.

Accountants Look Out (Fintech Finance), Rated: B

Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).

China

HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA

The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.

On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.

HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A

  • Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
  • Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
  • The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
European Union

Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA

LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.

The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.

Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A

Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.

The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.

In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.

Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A

On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.

While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.

Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.

International

Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA

Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.

Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.

White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A

White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.

Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B

Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.

India

Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA

Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.

A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.

Authors:

George Popescu
Allen Taylor

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

Monday February 5 2018, Daily News Digest

Nav financing

News Comments Today’s main news: Banco BNI starts lending through Fellow Finance. eBay drops PayPal for Adyen. Aviva exec backs robos. OneConnect secures $650M funding. Stripe sets up engineering hub in Dublin. EBANX gets $30M in funding from FTV Capital. Today’s main analysis: FT Partners’ Alternative Lending Market Analysis for January, and an interview with Nav CEO. Today’s thought-provoking articles: […]

Nav financing

News Comments

United States

United Kingdom

China

European Union

International

India

APAC

MENA

Latin America

News Summary

United States

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

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

Looking to sweeten this bitter pill, eBay says PayPal, a “long-time” partner, will be an option at the checkout for its buyers.

PayPal powers BofA Merrill digital payments (Fintech Futures), Rated: A

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

Strong Job Gains, Marcus Acquihires, MLA Testimony (PeerIQ), Rated: AAA

Janet Yellen chaired her last Fed meeting as the committee kept interest rates on hold in January. Futures are pricing in a 93% probability of a rate hike in March and 3 rate hikes for 2018. The recent sell off on the long end of the curve has seen 10-year treasury yields edge past 2.85%, providing respite to banks who were seeing their loan margins compress as the curve flattened.

In securitization news, Marlette completed its largest securitization to date, with MFT 2018-1 coming in at $464 Mn. The deal was significantly over subscribed and eventually upsized continuing the trend of larger deal size that we pointed out in ourQ4 securitization trackerThe senior tranches were rated AA by Kroll. The collateral pool has 40,303 loans with an average loan balance of $12k, weighted average coupon of 14.3% and a FICO score of 703. All the loans were originated by Cross River Bank.

CEO Monthly Alternative Lending Market Analysis (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Levi King, Co-founder and CEO of Nav, which is a data aggregation platform and marketplace that bridges the gap between small businesses and financial institutions. In the interview, Levi discusses the motivation behind founding Nav and how the company solves the challenges small businesses face managing their credit and securing financing solutions, among other topics.

Source: FT Partners

Download and read the full report here.

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

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

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

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

Source: American Banker

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

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

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

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

Fourth Quarter 2017 Summary

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

Full Year 2017 Summary

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

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

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

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

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

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

How This Founder Is Using Fintech To Give Women More Financial Control (Benzinga), Rated: A

Morty is an online mortgage broker. Our mission is to empower homebuyers to make smarter home financing decisions. With a modern tech stack and a marketplace of lenders, we offer customers the most options, great rates, and a transparent process.

What surprised you the most in the fintech industry in 2017?

That there wasn’t more innovation in the mortgage space. It’s the only lending vertical that hasn’t moved online- credit cards, student loans, small business loans, personal loans- all have a big online presence. There is still so much to be done in mortgage, it’s exciting.

Hackers Targeting Payroll Direct Deposit (PYMNTS), Rated: A

In an article penned for JD Supra by law firm Ogletree, Deakins, Nash, Smoak & Stewart, P.C., experts warned of a type of payroll scam that sees fraudsters diverting direct deposits from employee accounts to criminal accounts.

According to the firm, fraudsters use a phishing scam by sending an email from an address similar to a legitimate company account.

Ogletree Deakins warned that not only does this scam result in lost funds, but it is ultimately a data breach, with scammers gaining access to corporate systems and data. The report also noted that scammers are targeting all types of businesses using all types of payroll providers.

Will Markets Ever Live Up to Our Expectations (Guru Focus), Rated: A

The fintech industry is the powerhouse behind the meteoric rise of the peer-to-peer lending market. After several platforms launched online payments, it was only a matter of time before new ones emerged offering lending services that are offered by and to registered members.

LendingClub Corp (NYSE:LC) has been one of the most notable players in this space and its popularity pushed it public in 2014. However, since then, the company has struggled to live up to expectations, reflecting the actual picture of the status of the peer-to-peer lending.

According to critics, while peer-to-peer lending is an attractive option for borrowers looking for alternative financing solutions, it appears to have growth limitations due to lack of funding for new products. Peer-to-peer lending platforms do not take deposits and this is a limiting factor, but analysts suggest that if they are to grow to the point of rivaling the mainstream lending market, then they may have to start taking customer deposits.

How to Win Man vs. Machine Advice Game (ThinkAdvisor), Rated: A

TD Ameritrade put the competitive pressures tied to robo-advisors and other technology left, right and center at its LINC 2018 RIA conference this week in Orlando. Industry leaders highlighted the power and threat of technology and how to address these trends in the advice business.

The dealmakers financing top adviser technology (InvestmentNews), Rated: A

It’s impossible to look at the landscape of modern adviser technology without seeing Steve Lockshin’s footprints.

As an early investor in Betterment, Mr. Lockshin, 41, was instrumental in encouraging the robo-adviser to pivot from competing against advisers to partnering with them.

Brad Bernstein could see the role of advisers was changing.

What was once an industry of investment managers and salespeople was shifting to financial planning. Driving the change was technology — automating and commoditizing many of the ways advisers traditionally added value for clients. Mr. Bernstein, 51, managing partner at growth equity firm FTV Capital, believed there was a demand for products that helped advisers better articulate their value to clients.

That’s what attracted Brooks Gibbins, 45, to the industry when he founded FinTech Collective with his partner, Gareth Jones, in 2012. The venture capital firm has been one of the most active early-stage fintech investors over the past five years, seeding some of the biggest names on the adviser fintech scene.

Seeing the opportunity for adviser fintech startups to get acquired by, or partner with, financial institutions, Ian Sheridan decided to draw on his more than 25 years of experience in the financial services industry — working in wealth, retirement and investing in startups — to identify which technology would be part of the next wave of innovation.

Fidelity rocked the adviser fintech world in 2015 when it acquired eMoney, one of the most popular financial planning and client portal tools among independent advisers. The reported $250 million price tag proved there was money to be made in adviser fintech.

“Prior to that, there was good technology out there, but there wasn’t this stream of new business models, this new equity flowing in,” said Mike Durbin, 50, the president of Fidelity Institutional who spearheaded the deal. “The pace has clearly quickened.”

After a career that took him from E.F. Hutton to founding the Lockwood family of companies, Len Reinhart turned toward private investing in retirement.

American Association of Private Lenders Opposes Florida Mortgage Licensing Bills (PR Newswire), Rated: A

The Florida legislature kicked off its legislative session by introducing Florida Senate Bill 894 and House Bill 935, legislation that could cover private mortgage lenders. The bills, introduced by Sen. Rene Garcia (R-Miami) and Rep. Jeanette Nunes (R-Miami), would eliminate a longstanding business purpose exemption for loans secured by a Dwelling.

On January 18, the bill passed the House Insurance and Banking Subcommittee with a 13-1 vote. On January 24, the House Commerce Committee passed the bill on a unanimous vote. The Senate similarly passed the bill on a unanimous vote in the Senate Banking and Insurance committee on January 23.

American Association of Private Lenders’ (AAPL) position is that the proposed regulation would harm Florida residents, business and the state’s economic growth by consolidating power to a few licensed parties. Private lenders provide much needed capital to a marketplace which is underserved by large financial institutions. Professional business parties need to be able to work with each other without significant regulatory intervention. The proposed regulation would result in less market competition, translating to higher interest rates, a higher cost of credit and would force business out of Florida and into neighboring states including Alabama, Georgia, Tennessee, North and South Carolina, all of which exempt business purpose loans from licensing requirements.

Amy Johnson Named as Chief Operating Officer at dv01 (PR Newswire), Rated: B

dv01, the data management, reporting, and analytics platform that provides institutional investors insight into lending markets, today announced the appointment of Amy Johnson as Chief Operating Officer. Johnson will report to dv01 founder and CEO, Perry Rahbar.

As COO, Johnson will be responsible for dv01’s finance, legal, and sales efforts, including helping execute the company’s vision and scale its operations.

The 10 D.C. Area Startups That Raised Capital in January (DC Inno), Rated: B

Reston, Va.-based online lender StreetShares closed $23 million in equity funding on Jan. 24. The lender focuses on veteran-owned small businesses and relies on a peer-to-peer lending model. About $20 million of the new round is from Bethesda, Md.-based firm Rotunda Capital Partners. Previously, StreetShares had raised $8.3 million between three rounds.

United Kingdom

Aviva executive backs robo-advisers in call for financial advice shake-up (New World News), Rated: AAA

An Aviva executive has backed the rise of robo-advisers and called for a shake-up of financial advice to help open up the industry to the mass market.

Andy Briggs, chief executive of Aviva UK Insurance, said the current regime is freezing out large swathes of the population because only the upper echelons can afford the hefty fees.

Mr Briggs said robo-advisers could also be more powerful and beneficial to customers if the artificial intelligence did not have to carry out full financial assessments.

Treasury begins SME finance inquiry (Bridging&Commercial), Rated: A

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

The committee will also consider the regulation of SME lending and whether banks should be bound by a broader set of duties when dealing with SMEs.

The pros and cons of each of the six types of ISA on the market (Your Money), Rated: A

6) Innovative Finance ISA

An Innovative Finance ISA (IFISA) is a peer-to-peer lending or crowdfunding product. In some instances, you can generate returns of around 8 – 9% by lending to private borrowers or by taking stakes in ‘crowdfunded’ investments. The IFISA is also subject to the same £20,000 annual ISA allowance so you can split your money between this ISA, as well as cash and stocks and shares.

While this is regulated by the FCA, peer-to-peer lending is not covered by the FSCS meaning your capital is at risk.

Things can only get better, says Christie & Co (The Caterer), Rated: B

Easily available debt from banks, financial institutions, peer-to-peer lending and even crowdfunding, together with forecasts of revpar growth of 2.4% in London and 2.3% in the regions, will help drive investments. Strong leisure business enjoyed by hotels last year – up 20% – is expected to continue to grow, depending on a continued weak pound.

Sainsbury’s and British Land chairmen join late payments start-up (Financial Times), Rated: B

A UK start-up that is aiming to end the culture of late payment that plagues British business has recruited two FTSE 100 chairmen as investors and advisers.

David Tyler, chairman of supermarket chain J Sainsbury, and John Gildersleeve, chairman of property group British Land, have joined the advisory board of Previse.

The London-based business pays supplier invoices instantly and collects the money from customers later. By analysing years of payment data it uses artificial intelligence to calculate the likelihood it can collect from the big customer. It has pilots running with two large corporations and is in talks with dozens more, Mr Gildersleeve told the Financial Times.

China

Ping An OneConnect fintech subsidiary raises $ 650 million in financing (Finextra), Rated: A

OneConnect is the only one-stop FinTech-empowered solutions provider in China. Financing of the three subsidiaries received positive responses, particularly from international institutional investors, including the SoftBank Vision Fund (which invested in Ping An Good Doctor and Ping An Healthcare Technology), International Digital Group (IDG) and SBI Group etc., proving that the capital market fully recognizes Ping An’s technological innovation, the business model for its technology as well as the growth potential and business value of the Group.

European Union

Banco BNI Europe Starts to Lend on Multiple P2P Lending Platforms (P2P-Banking), Rated: AAA

Today Banco BNI Europe announced it will start lending on Fellow Finance.

‘Investing via Fellow Finance in consumer and SME loans offers us a great opportunity to easily expand our operations and we are very satisfied with the analytical and professional approach of Fellow Finance in credit intermediation’ echoes Pedro Pinto Coelho, Executive Chairman of Banco BNI Europa.

U.S. Fintech Stripe Picks Dublin for New Engineering Hub (U.S. News), Rated: AAA

U.S. payments firm Stripe said on Monday it would place its first engineering center outside its home market in the Irish capital Dublin, attracted by the city’s growing technology workforce and global outlook.

Robo Advisers Start to Take Hold in Europe (WSJ), Rated: AAA

Estimates differ, but according to TechFluence, a technology research firm with offices in Frankfurt and London, the European market had assets under management of about $3.5 billion at the end of 2017. That compares with an estimated $200 billion to $250 billion in the U.S., according to Burnmark, a fintech research firm. Estimates of the number of services range from 98 to 126 in Europe, compared with about 200 in the U.S.

The cost of entry is also much lower: generally €5,000 to €10,000 (about $6,200 to $12,400), versus hundreds of thousands at least for a discretionary service through a bank, says Timo Pfeiffer, head of research and business development at Solactive AG, an index provider that has researched the growth of robo advisers in Europe.

Popular with banks

This has led to a number of banking groups preparing robo-adviser offerings, Mr. Mellinghoff says. One example is Comdirect, a subsidiary of Commerzbank , CRZBY -3.17% which launched a robo-advisory platform in May. This service, called Cominvest, had gained assets of more than €200 million as of end of December and is expected to grow rapidly in the coming years, says Sabine Schoon, head of corporate strategy and consulting at Comdirect.

The European market has also attracted interest from major U.S. providers; BlackRock Inc. BLK -2.98% announced in June 2017 that it was taking a minority stake in Scalable Capital, a robo-adviser specialist that operates mainly in the German and British markets.

BBVA’s digital push helps drive 20% profit rise (Financial Times), Rated: A

Spanish bank BBVA’s dash to get customers to buy products digitally rather than in branches helped it report a 20 per cent rise in underlying full-year profits, with results boosted by lower costs as well as higher revenues.

Top P2P Cryptocurrency Token Etherecash Gets Listed on QRYPTOS, Following Successful Crowdsale (The Daily Telescope), Rated: A

Top P2P cryptocurrency startup Etherecash has announced that its ECH token will be listed on popular cryptocurrency exchange QRYPTOS on 6th of February 2018, following a successful crowdsale in which the company raised over 40 million USD. This news comes as The Estonian-based lending startup saw a very successful Q4 to 2017 as it gears up for its token distribution in early 2018.

Crypto-lending ICO Etherecash recorded contributions of over 40 million USD and over 46000 new registrations.

GN Compass Creating More Liquidity for its Token, GNCT (PR Web), Rated: B

GN Compass is the first peer-to- peer lending platform for Cryptocurrency-Backed Loans.

All transactions are verified and distributed on the Ethereum Blockchain. GN Compass is joining an expanding group of pioneering projects integrating the Bancor Protocol to maximize the trading liquidity of GN Compass tokens.

Mifid tips balance against active funds in favour of ETFs (Financial Times), Rated: B

New business inflows almost doubled for Europe’s exchange traded fund industry in 2017, in the run-up to the EU’s introduction of rules designed to improve market transparency and strengthen investor protection.

Net inflows into European-listed ETFs reached a record $108bn last year, up from $55.7bn in 2016, according to ETFGI, a London-based consultancy.

International

Disruptive innovation in equity crowdfunding (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” studies the disruptive forces shaping the future of equity crowdfunding.

View the infographic here.

Disruptive innovation in digital banking (Deloitte), Rated: AAA

A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive potential in financial services,” examines disruptive innovation in digital banking.

View the infographic here.

IdentityMind Global Introduces KYC and Anti-Money Laundering Plug-in for ICOs (Crowdfund Insider), Rated: A

IdentityMind Global, Digital Identities You Can Trust, an SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud, announced the immediate availability of its KYC Plug-in for ICOs which provides a turnkey solution for customer onboarding functionality and user experience to walk ICO participants through the know your customer (KYC) process to meet regulations worldwide.

BFB partners with US real estate fintech start-up (Trade Arabia), Rate: A

Bahrain FinTech Bay (BFB) and the Fintech Consortium (FTC) have announced a strategic partnership with OffrBox, a New York City-based Fintech start-up that has developed an end-to-end real estate transaction platform on which one can buy and sell residential properties online.

India

How early-stage startups raise money (Times of India), Rated: A

The first ’round of funding’ Abhishek Latthe got when he was setting up his wearable device startup SenseGiz in 2013 was from his family and friends. The next year, he set up a crowdfunding page on Kickstarter and raised $47,000. Late in 2014, he took out a bank loan. It was only two years later in 2015, that he could convince Karnataka Semiconductor Venture Capital Fund to back him with Rs 3 crore.

Banks do not back companies without collateral and since the business model is unproven, other investors too hesitate. So, funding options include getting help from friends and family, crowdfunding, or dipping into one’s savings, but how do founders decide on the path to take?

Gadkari says peer-to-peer lending and bridge funding, which fulfil a company’s short-term working capital needs, have also become popular. Choosing the best funding option depends on the company’s need. The next step for an entrepreneur is to negotiate the company’s valuation.

FinTech will revolutionise lending in India, says Faircent CEO (money control), Rated: A

Lending is one of the oldest professions in the world and is one of the pivotal reasons for the banking system to take shape.

There is evidence of lending activities dating back to 2,000 BC between merchants, farmers and traders.

However, up till now, lending as an activity has been largely limited to financial institutes such as banks and Non-banking Financial Companies (NBFCs).

For instance, lenders on Faircent.com usually avail average gross returns of 18% to 26% per annum. This makes online P2P loans a lucrative alternative investment avenue for them.

What makes online P2P lending even more lucrative as an asset class for potential investors is the fact that it offers lenders the opportunity to diversify their investments across multiple risk buckets and loan requirements.

Source: money control

Everything you need to know as pressure mounts on cryptocurrencies (GK Men), Rated: B

Sapan Gupta a Practice-Head at Shardul Amarchand Mangaldas said, “capitalising on the blockchain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors”.

APAC

After a Successful Crowdsale Campaign, Karma (KRM) Begins Trading With Blockchain (Coin Idol), Rated: AAA

Decentralized p2p lending platform Karma has just announced trading as well as access to its platform and blockchain solutions. The project has now been backed by Danish fintech startup OpenLedger. Karma’s p2p lending platform can be used on the OpenLedger DEX platform and the Korean exchange CoinLink.

Why Blockchain’s Growing Pains Could Benefit Underbanked SMBs (PYMNTS), Rated: AAA

According to a report released earlier this month by EY, 21 percent of people in the world — about 1.6 billion people — are underbanked. More than 200 million micro and SMBs fall into the underbanked category, too, with access to finance the largest hurdle for many of these firms.

EY pinpointed the APAC region as a particularly wide opportunity for financial services players to address this gap: Bank revenue in this market, researchers said, could reach $88 billion by 2020. If traditional banks don’t step in, alternative financial services firms will.

“A lot of smaller, private small businesses are under-funded,” Tran noted. “It’s not like here [in the U.S.], where we have an established financial and banking system. If you implement something like a decentralized blockchain, a P2P lending system, that would enable [SMBs] to get funded a lot easier than going through the normal banking system. With blockchain technology, you can put a platform together that is smart contract-based, allowing individual investors to participate in a growing economy. On the other hand, you allow [SMBs] to get funded very quickly.”

MENA

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

1 PayTabs
Online payment processing solutions

2 Souqalmal.com
Financial products comparison site

4 Beehive
SME focused peer2peer lending platform

5 Yallacompare
Financial products comparison site

8 liwwa
Peer-to-peer lending platform

StartAD launches on February 18 for fintech startups (Arabian Business), Rated: A

Innovation platform startAD will host a ten-day entrepreneurship programme, Venture Launchpad, at New York University Abu Dhabi (NYUAD), from February 18-27.

It will see ten fintech startups pitch their business ideas to investors. UAE-based early-stage startups are encouraged to apply by February 12, 2018, the application deadline.

The programme will equip them with the tools and knowledge to develop a scalable and capital efficient scheme. These include insights into crowdfunding, peer-to-peer lending, blockchain, algorithmic trading, credit scoring, cryptocurrency, payments, insurance tech and money transferrals.

Latin America

Brazilian Fintech EBANX Secures $ 30 Million Investment From FTV Capital (Crowdfund Insider), Rated: AAA

Brazilian fintech EBANX announced on Wednesday it has secured a $30 million investment from FTV Capital.

EBANX also processes payments for major merchants from 50 different countries, including the U.S. and China. The company reported that just last year it processed $1.2 billion in cross-border transactions and achieved the milestone of helping more than 30 million users from the region gain full access to major international e-commerce merchants.

Authors:

George Popescu
Allen Taylor

Wednesday November 20 2017, Daily News Digest

credible

News Comments Today’s main news: SoFi offers 6-month grace period for SoFi ReFi. Zopa to build Open Banking infrastructure. Faircent secures $4M funding round. Assetz Capital launches IFISA. Ping An make big bet on technology. Ant Financial partners with Standard Chartered. Today’s main analysis: Student loan borrowers prefer payments over iPhone X or bitcoin. Who are LendingClub borrowers? (A must-read market […]

credible

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Canada

News Summary

United States

Behind the Investment Platform: The LendingClub Borrower (LendingClub), Rated: AAA

From 2007 through 2017, LendingClub has matched $31 billion investor dollars with 2 million borrowers’ loans.

Source: LendingClub

Today, outstanding credit card and personal loan balances in the U.S. are approximately $960 billion. Of that, two-thirds, or roughly $600 billion, represents interest-earning balances carried month-to-month —the overall addressable population. About half of the addressable population (more than $300 billion) currently meets LendingClub’s target credit profile—a market that we have only just begun to penetrate.

Read LendingClub’s Marketplace Insights report in full here.

Holiday Finance with Lending Club (ABC News), Rated: A

LendingClub Appoints Former Netflix Chief Talent Officer Patty McCord As New Board of Directors Member (Crowdfund Insider), Rated: B

Online credit marketplace LendingClub Corporation (NYSE: LC), announced on Tuesday it has appointed Patty McCord as the newest member of its Board of Directors, effective December 13, 2017.

McCord spent 14 years creating the unique and high-performing culture at Netflix and as the video streaming giant’s Chief Talent Officer, she helped create the Netflix Culture deck and experimented and cultivated new ways to work.

SoFi Now Offering Six-Month Grace Period for Graduates Using SoFi ReFi (Crowdfund Insider), Rated: AAA

On Tuesday, online lending platform SoFi announced it is now offering a six-month grace period for graduates using its newly launched SoFi ReFi program.

ABS investors could pull back from MPLs in 2018 as cycle set to turn (GlobalCapital), Rated: AAA

Interest in marketplace loan ABS from the buyside picked up in 2017, but some investors are now saying that they could sit things out in 2018 as credit concerns grow and a lack of data presents problems in the late stages of the credit cycle.

ABS volumes doubled from $3.4bn in 2016 to $7bn in 2017, with SoFi issuing more than $3bn in deals this year, according to data from JP Morgan. The introduction of multi-seller platforms from SoFi, Lending Club, Marlette Funding, Prosper Marketplace also drove liquidity for the sector, while new …

Fiserv teams with TransUnion for loan origination system (Banking Technology), Rated: A

Financial services company Fiserv and credit reporting agency and risk information provider TransUnion have joined forces, reports Julie Muhn at Finovate (Banking Technology‘s sister company).

Under the agreement, Fiserv will integrate TransUnion’s CreditVision Link to increase precision of scoring and risk modeling in its Automotive Loan Origination System.

Over 65% of students prefer student loan payments over iPhone X or Bitcoin for holidays (TechRepublic), Rated: AAA

LendEDU asked 1,000 people repaying student loans if they would prefer a popular holiday gift or a loan payment of equal value. And, despite the hype surrounding tech trends, they wanted loan payments more.

Source: LendEDU

Voice assistants like Google Home and Amazon Echo won’t change banking in 2018 (Tearsheet), Rated: A

Bankers agree voice will be the biggest and most important channel to their business after mobile, only this time, it won’t sneak up on them like mobile did. They’re looking at 2018 as a year to get their companies more involved with voice by adding features to their Alexa skills, creating an Alexa skill if they haven’t done so already or expanding Alexa capabilities to other parts of the organization. But for the most part, they’re looking for a clearer sense of how people even use Alexa.

In 2017, USAA, Ally Bank and U.S. Bank launched Alexa skills. Before this year, Capital One was the only bank with the feature, which it launched in 2016.

Upstart’s First SaaS Partner (LinkedIn), Rated: A

Earlier this year, we announced an initiative to bring the industry’s first Software as a Service (SaaS) lending platform to market, which we call “Powered by Upstart”. Now we’re excited to announce that BankMobile is the first bank to launch their personal loan program on the Upstart platform. Beginning today, BankMobile offers consumers in 43 states personal loans from $5,000 to $30,000, with no origination fees and interest rates starting at 5.99%.

Overcoming the Hurdles of Big Data Start-ups (Big Data), Rated: A

We are an early investor in the company ‘Kabbage” and Kabbage to me is a major disruption in the fund-lending and risk-analysis market. Established in 2009, Kabbage supported the emerging companies that were suffering the blow of a financial crisis. Banks were declining to lend money to small businesses and entrepreneurs had no access to capital to support their businesses. What aggravated the problem is that even if they did get access to money, the procedure for evaluating the risks of money lending were strictly based on scrutinizing the company’s financial background and fico scores instead of probing into the business. Deviating from the established model of risk analysis, Kabbage stepped into the market at a time of financial distress and operated on a completely different strategy. They would evaluate your UPA shipping data, ebay seller reviews, and other bits of information that are generated on different platforms and then assess credit card risks based on these factors and not just credit card fico scores. Kabbage started off by accumulating a ton of third party data which they ingested, analyzed and then created a solution. Over time, the company has gathered a substantial amount of primary data that they can use to tweak and refine their risk-analysis model. The company efficiently leveraged big data to provide an entire new service in the risk-analysis industry.

Anthemis Group’s Jillian Williams on tough times for personal finance apps (Tearsheet), Rated: A

It’s a space that started out with Mint ten years ago, with a new way to look at all of one’s finances in one place. The field has now grown to accommodate an ever-expanding number of direct-to-consumer PFM apps, including apps like Digit, Clarity Money, Penny and Qapital, and banks are now folding PFM capabilities into their mobile apps.

Banks have been folding in PFM features and competing apps are having trouble differentiating. Where do you see the PFM market right now?
A lot of PFM will continue to move to a business-to-business, or business-to-business-to-consumer model. Things [business-to-consumer PFMs] struggle with are being able to monetize and with customer acquisition.

What’s the problem with business-to-consumer PFM?
The market is really crowded and it’s hard to provide that extra value to really distinguish themselves from other platforms in the space.

Instant Loans at Checkout: helpful or hurtful? (MSN News Now), Rated: A

An $800 mattress for your bed. A $600 sofa for your living room. A vintage designer bag as a Christmas gift for your best friend.  They’re all pretty big purchases to buy online, but now you can get an instant loan for any of them right at checkout.

Ingle says the payment plans are different than credit card options. Companies like Affirm partner with certain retailers to offer the loans, which are installment loans with interest rates, and set payments are made over time.

India

Peer-to-peer lending platform Faircent gets $ 4m in Series B (Economic Times), Rated: AAA

Peer-to-peer lending platform Faircent has raised $4 million in a Series-B round led by Belgian impact investment fund Incofin and Muthoot Fincorp.

P2P platform Faircent raises Series B from Muthoot Fincorp, Incofin, others (Economic Times), Rated: A

In a statement Faircent said it will utilise the newly acquired funds towards strengthening the platform’s technology and creating greater awareness about P2P lending’s significance as a new and highly rewarding asset class.

Fintech Startups Seek to Shake Up Money Transfer Industry (WSJ), Rated: AAA

The race is on to become the top global app for international money transfers.

Fintech startups including WorldRemit Ltd., TransferWise Ltd. and Remitly Inc. are pulling ahead of the pack of the dozens of companies trying to disrupt the remittance industry, using the latest technology to send money internationally.

More than $600 billion is remitted world-wide every year, mostly by migrant workers from places like India, Mexico and the Philippines, who have traditionally had to deal with long lines and high fees to send money home.

Source: The Wall Street Journal

Finvasia gets licence to operate as NBFC (The Tribune), Rated: A

Chandigarh-based Finvasia, a fintech company offering zero brokerage, has received the Certificate of Registration (CoR) from RBI to operate as a non-banking financial corporation (NBFC). This extension will allow the company to offer loan-based products to retail and corporates alike. The company plans to develop block chain technology based P2P (peer-to-peer) lending platform.

Canada

Fintech Select Announces Launch of Physical Bitcoins (GlobeNewswire), Rated: A

Fintech Select Ltd. (“Fintech Select” or the “Company”) (TSX-V:FTEC) is pleased to announce that it will be launching its physical Bitcoin product alongside its Selectcoin closed loop swipe card.

Authors:

George Popescu
Allen Taylor

Wednesday August 23 2017, Daily News Digest

Delinquency rates

News Comments Today’s main news: Walmart, Affirm discussing loan offerings to retail customers. Funding Circle has created 80K new jobs. Zopa’s revenue jumped 60% last year. Indonesia fintech investment to hit record high. Today’s main analysis: Consumer debt’s new peak. 3 investments to make before the market collapses. Today’s thought-provoking articles: The rumors of P2P’s demise are greatly exaggerated. Why China […]

Delinquency rates

News Comments

United States

United Kingdom

China

International

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Asia

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News Summary

United States

Walmart in Talks With Finance Startup Affirm to Offer Loans to Customers (TheStreet), Rated: AAA

Walmart Stores Inc (WMT) is in talks with financing startup Affirm Inc to use its services to offer installment loans to customers with limited credit histories, the Wall Street Journal reported.

The upstart is reportedly nearing a deal with Walmart that could have it offering installment loans to Walmart shoppers as early as this fall. The loans would be focused on costlier items such as tires and other purchases over $200, insiders said.

Consumer Debt Reaches New Peak: Will Losses Follow? (Forbes), Rated: AAA

This week, the Federal Reserve Bank of New York released its quarterly Household Debt and Credit Report.

  • Total consumer debt reached a record $12.8 trillion. The prior peak was $12.7 trillion in 2008.
  • Since the financial crisis, auto loans and student loans have soared. Auto loans are now at $1.2 trillion, up 70% since the depths of the recession in 2010. Student loans have reached an incredible $1.3 trillion.
  • Total credit card debt has reached $784 billion, the highest level since the fourth quarter of 2009. Credit card delinquencies have also started increasing from historic lows.
  • Mortgage debt is growing again, having reached $8.7 trillion. However, it remains below the 2008 peak of $9.3 trillion.
Source: Federal Reserve Bank of New York

Student and auto loan data is worrying. The growth rate of both products has been extraordinary. Credit card growth looks nominal (despite the recent press) compared to the continued surge in student and auto loans.

Source: Federal Reserve

These loss rates are driven by poor underwriting in both the student loan and subprime auto markets. But while interest rates on auto loans (especially subprime) are high (and priced for risk), student loan interest rates are typically in the low single digits – not enough to cover the implied loss rate.

Federal Reserve Bank of New York

Tech giants like Amazon and Facebook more disruptive to banks than fintech start-ups (CNBC), Rated: A

Banks are faced with more competitive disruption from tech behemoths than financial technology (fintech) start-ups, according to a report by the World Economic Forum (WEF).

Drawing on interviews with finance and tech industry experts, the report found that banks were significantly lagging behind tech giants in the development of technologies like cloud computing, artificial intelligence and big data analytics.

Lenders have instead been turning to tech corporations to provide these functions, the report said. It singled out AmazonGoogle and Facebook as three companies dominating the market in these areas of innovation.

One example the report referred to was Amazon Web Services, which has lured several financial institutions including Aon, Capital One and Nasdaq to Amazon’s cloud computing business.

WSJ’s Greg Ip: US needs more Amazon disruption from CNBC.

RiverNorth: Executing on Providing Income for Investors in Marketplace Lending Loans (Crowdfund Insider), Rated: A

RiverNorth is out with an encouraging note on its fund that invests in marketplace lending platform loans. As of the end of July 2017, RiverNorth’s portfolio consisted of 10,173 loans, with an average loan size of $10,176. The RiverNorth Marketplace Lending (NASDAQ:RMPLX) is designed to provide a high degree of granularity and diversification, and holds a duration of 1.5 with a weighted average FICO score of 708 on the consumer portion of the portfolio. Consumer loans represent a 76% allocation as of July. The Fund’s “subsidized and unsubsidized SEC” net yield currently stands at 11.02% and 9.27%, respectively.

Cloud Lending Solutions Releases Software for Leasing and Asset Finance (BusinessWire), Rated: A

Cloud Lending Solutions, a leader in cloud-based leasing software, announced major advancements to its end-to-end leasing solution, CL Lease™ for Self-Financed Lessors, Externally Funded Leases and Captives. CL Lease™ is designed as a customer-centric, cloud-based lease servicing application enabling lessors to efficiently service equipment leases.

By automating operations, CL Lease effectively manages and tracks multiple assets in a schedule, and can manage your asset disposition process (repossessions, and returns). Its fully extendible integration platform works with collection agents, repossession agents, equipment resellers, and dealers. CL Lease can automatically apply fees, calculate taxes, and collect payments through ACH and credit cards.

Recent economic research into the Equipment Lease and Financing industry indicate that equipment and lease software investment is projected to grow by 3.6% in 2017. The investment outlook for most equipment verticals continues to improve with 2017 seeing long-term leasing volume increasing in 10 of 12 leasing verticals, and recent momentum in first-half 2017 has accelerated in 8 of 12 verticals.

A short list of advancements are:

  • Criteria Based Scorecards – Scorecard evaluations consisting of multiple parties with different legal entity types. Lessors will be able to assign different scorecards to different Legal Entity Type values and evaluate different scorecards for business versus individuals. Scorecard evaluations consisting of multiple parties with different collateral types. In this scenario, financial institutions will be able to assign different scorecards to different collateral type values.
  • Financial Statement Analysis – Enable lessors to be able to spread financials and store electronically, this includes balance sheets, income statements, and cash flow statements, as well as configure calculations and financial ratios to support financial analysis. CL Lease will enable financial institutions to customize financial statements with custom fields and generate financial statement information, such as cash flow, from configurable statement calculations and allow users to input, generate and analyze financial statements spanning multiple reporting periods.
  • Multi Company, Multi Currency – Support for being able to manage multiple companies in the same CL Lease implementation. Highly useful for companies operating in multiple countries or jurisdictions, CL Lease can support local regional specifications and manage leases across geographical country lines.
  • Credit Exposure Support – Enhanced to enable lessors to calculate direct exposure, direct proposed exposure, indirect exposure and indirect proposed exposure calculations for borrowing relationships, as well as get updates on the exposure for all borrowing relationships on a daily basis. CL Lease will also enable users to update exposure calculations on-demand.
  • Feature Updates – Additional updates include: Contract Restructuring, Debt Schedules, Delinquency Management, Asset Tracking, Financing of multiple equipment, Cash Management, Reporting and Dashboards.

Cloud Lending Solutions Releases Software for Commercial Bank Lenders (BusinessWire), Rated: A

Cloud Lending Solutions, a leader in cloud-based commercial lending and leasing software, announced upgrades to its end-to-end suite of products for its commercial lending clients using: CL Loan™, CL Lease™, CL Originate™, CL Collections™, and/or CL Marketplace ™ and released a new product in CL Portal™. These advancements to the Cloud Lending solution suite are designed to address fundamental challenges found across Global Banking, Community Banks, Credit Unions, Lending Societies, and Global Financial Institutions.

A partial listing of feature advancements:

  • Underwriting Scorecards: Enables FIs to define rate cards consisting of configurable pricing and terms and assign them to configurable risk ratings. They can also define their scorecards, consisting of evaluation criteria, scores, and weights, which can be executed for a specific loan opportunity based on configurable criteria. Results of the scorecard evaluation, pricing, and terms can then be automatically applied to the loan or presented to the user for selection.
  • Financial Statement Analysis/Financial Spreading: Enables FIs to configure and generate financial statements, financial ratios for business and individual borrowing entities associated with a loan opportunity. Further, lenders can leverage the resulting financial statement data and analysis during the loan underwriting process and configure the layout and format of each financial statement, as well as the calculations and formulas that derive the financial statement values and the resulting financial ratios.
  • Risk Assessment and Exposure Lenders can configure risk assessment templates, generate risk scores/grades for borrowing relationships, define risk assessment criteria in scorecards and the risk rating thresholds, and evaluate risk assessments for borrowing relationships automatically or on-demand.
  • CL Portal™ A configurable front-end portal that provides a differentiated borrowing experience for consumer, commercial and small business loans for borrowers, investors and stakeholders; integrates product workflows and document management to create a personalized and unique experience for loans ranging from fully automated consumer loans to multi-entity, collaborative commercial loans.
  • Loan Committee and Communications: Providing a completely virtual committee experience where members can view, discuss, and vote on loan opportunities via their computer and communicate lending communications between team members online with an audit trail. Improves meeting efficiency by automatically capturing meeting minutes and enforcing loan presentation time limits.
  • Advanced Loan Origination provides FIs an ability define each of the stages of their loan origination process for each loan product and each mandatory task(s) required at each stage. Easily define loan origination tasks driven by additional criteria such as risk rating or loan amount and automatically assign each task to loan team members based on their role. This ensures an efficient process by enforcing due dates for tasks and ensuring policy compliance by enforcing task completion at the applicable stage of the loan origination process.
  • Relationship Dashboard Provides a 360-degree view of the customer relationship allowing financial institutions to obtain a comprehensive view of the entire borrowing relationship. Users get a real-time view into relationship documents and document exceptions; monitor, and evaluate relationship covenants, view financial accounts and loan opportunities in progress, and assess relationship risk using risk assessment templates and credit exposure calculations. This is provided in addition to customer relationship management functionality provided by Salesforce.

Importance of digitally transforming credit risk management (Digital Journal), Rated: A

The analysis suggests that banks urgently need to digitize their credit processes. This comes down to economics since lending continues to be a major source of bank revenue, especially with retail banking. It is the retail banking sector that is facing the greatest threat from new digital services, such as credit lenders. An example of such a lender is Kuliza, which is on-line only and deploys artificial intelligence to assess customer loan requests. A different approach is provided by Fusion Bank which uses ‘crowdlending’ to secure loans. A crowdlending platform brings investors (the crowd) together with borrowers and allows the investors (or lenders) to lend small sums of money directly to hundreds or thousands or borrowers, in anticipated of a return on the loan.

An example of how a major bank can embrace what is happening in the market is provided by Premium Credit, which is a wholly owned subsidiary of Bank of America. To take on the challenge, Premium Credit worked with specialist technology company Arrk Group to create a digital customer acquisition platform. The success of this, for both bank and customer, was to reduce the time taken to process a loan from weeks to a matter of just minutes.

Federal Arbitration Rule Will Harm ‘Little Guys’ (CEI.org), Rated: A

Once again, the Consumer Financial Protection Bureau (CFPB) is putting forth a rule it presents as going after big banks, but will likely have its most devastating effects on small and startup financial institutions.

Other victims of the rule are likely to be credit unions, community banks, and sharing-economy innovations such as peer-to-peer lending.

As online commercial lending grows, some banks still prefer face-to-face meetings (Biz Journals), Rated: A

Many local banks that don’t already offer online commercial loan applications acknowledge that time may come, but for now in-face meetings still offer a lot advantages to potential borrowers.

Here’s a way for you to get a better handle on debt (MarketWatch), Rated: A

People tend to consider using borrowed funds in two contexts and depending on which context they’re in, people’s attitudes about what purchases they’re willing to borrow for drastically change.

Context 1: ‘How to pay’ decisions

One reason people might incur debt is to take advantage of attractive financing.

Context 2: ‘Whether to buy’ decisions

Another far more common reason people may use debt is because they cannot pay for their purchases with other means. Perhaps they are waiting for their next paycheck, or they have designated their savings to other things (expenses, other purchases, investments).

In a dataset from the Bureau of Labor Statistics that includes spending behavior from 30,242 households, we found that people who spent more on experiencesrather than material goods were also more likely to have greater credit card debt and to have paid more in credit card financing charges. We also saw this pattern in people’s likelihood of taking on a peer-to-peer loan. Using a large dataset from one of the biggest U.S. peer-to-peer lending companies, we found that people were more likely to have peer-to-peer loans for experiential purchases (for example, weddings or vacations) as compared to material purchases (such as swimming pools or motorcycles).

The average American household spends $12,800 annually on discretionary purchases and has $7,200 in credit-card debt. Indeed, a recent surveyfound that 74% of Americans have borrowed to pay for a vacation.

American Dream Leadership Series #2: Eric Sager of Online SMB Lender BlueVine (Forbes), Rated: B

What leader in business do you most admire and try to emulate?

I’ll focus on folks I’ve actually worked with. Francoise Brougher, Sarah Friar and Gokul Rajaram at Square are three people I learned a lot from, and there are certain things I try hard to emulate from each of them. Then of course there is Jack Dorsey, cofounder of Twitter and Square, who always impressed me with how thoroughly committed he was to the mission of helping small businesses succeed, and how that commitment influenced every decision I saw him make.

What’s a piece of advice that turned out NOT to be helpful?

To eliminate weaknesses or development opportunities. The truth, which I learned from both sports and business, is that my value to the team is way more about making the most of my strengths, and that any weaknesses, assuming I’m aware of them, can generally be covered very successfully by others on the team.

United Kingdom

Funding Circle has Supported the Creation of 80,000 New Jobs (Crowdfund Insider), Rated: AAA

Last week, Funding Circle celebrated seven years of operation.

Today, Funding Circle has helped to provide financing for more than 32,000 small businesses based in the UK, Germany, the Netherlands and the US. Funding Circle reports that 69,000 individuals and institutions are now lending on their platform. The company estimates that their lending service has supported the creation of around 80,000 new jobs (globally).

Funding Circle is boxing its investors in (The Memo), Rated: A

The vision was that ordinary people could loan their hard-earned cash directly to others, who could borrow at far cheaper rates than from the bank.

But today Funding Circle joined Zopa and Ratesetter in abandoning that vision, instead announcing it will stop people from picking and choosing who to lend their money to, instead automatically pooling these investments across borrowers on the platform.

Some have pointed out that these behaviours and changes now mean that these peer-to-peer platforms are now acting much more like a bank or a fund, becoming middle-men managing the investments they’re facilitating.

Online lender Zopa’s revenue jumped 60% last year (Business Insider), Rated: AAA

Peer-to-peer lender Zopa saw revenues leap 60% higher last year as losses narrowed.

The online lender’s revenue rose from £20.6 million in 2015 to £33.2 million last year, accounts filed with Companies House this week show. At the same time, losses narrowed from £8.8 million to £5.8 million.

Why Rumours of P2P’s Demise Have Been Exaggerated (Forbes), Rated: AAA

Are we really saying that an industry that didn’t exist a decade ago is failing because only one in 20 or so Britons have used it over the past 12 months? In fact, that seems like a pretty impressive adoption rate, particularly in an industry such as financial services, where start-ups face all sorts of issues around trust and credibility.

AltFi Data, one of the most trusted sources of analysis on the alternative finance sector, reckons peer-to-peer lenders have so far made advances of £1bn in the UK this year alone, taking their all-time advances close to £5bn. And those statistics are only for consumer loans; add in business finance and the figures are more like £3bn and £5bn respectively.

Brexit claims another victim: Britain’s venture capitalists (Politico), Rated: A

Since the country gave notice it was leaving the European Union in March, a growing list of British venture capital funds has been told they will not receive financial support from the European Investment Fund, an EU agency that provides almost half of the money for the region’s venture capital industry, according to several fund managers who held discussions with the body.

While little-known outside tech circles, the Luxembourg-based fund remains the largest backer of European venture capital, often providing up to 40 percent of funds’ total investments, equal to billions of euros each year.

In Britain, for instance, the European Investment Fund forked out €2.3 billion between 2011 and 2015 to support 144 local venture and private equity funds, or roughly one-third of overall investment for the sector, according to the latest figures available from the agency.

Zopa scales back higher-risk lending due to UK consumer credit outlook (P2P Finance News), Rated: A

ZOPA has reduced its exposure to higher-risk loans due to the UK’s worsening consumer credit outlook, which has led it to lower its projected returns on some investments.

The peer-to-peer lender also said that it is expecting slightly higher losses on its existing loans and an increase in early repayments from borrowers.

Subprime lender Provident Financial is in crisis (Business Insider), Rated: A

Shares in Provident Financial, a UK-based door-to-door lender, lost more than 74% of their value on Tuesday after the company cut its dividend, issued a profit warning, announced the resignation of its CEO, and announced the regulator is investigating part of its business.

Bradford-based subprime lender Provident warned investors it expects to make a loss of between £80 million and £120 million. Provident told investors in June to expect a reduction in profit of £60 million — but still a profit.

Debt collection rates plummeted from 90% in 2016 to 57% after the company changed from using self-employed agents to full-time “customer experience managers.” Customers are also borrowing £9 million a week less.

Interview with Terry Fisher, Founder at Huddle Capital (P2P-Banking), Rated: A

In an already crowded space, Huddle is differentiating itself by it high quality origination and a focus on educating its lenders to help them make better decisions.

What are the three main advantages for investors?

The main advantage for lenders on Huddle is that we are owned and managed by Access Commercial Finance which is an FCA regulated, balance sheet lender. Our belief is that most fintech businesses in the marketplace are too much ‘tech’ and not enough ‘fin’ so we are looking to correct that balance on Huddle.

What are the three main advantages for borrowers?

The main advantage to borrowers is getting speedy access to funding for strong business cases that have been unable to achieve satisfactory funding elsewhere.

What ROI can investors expect?

Currently we have loans that pay lenders from 8% to 16% per annum, depending on their risk appetite.

What were the main challenges launching your platform in a competitive (crowded?) market?

Once your tech works there are only 2 real challenges in this business – attracting lenders and finding borrowers. Fortunately we have got plenty of borrowers both existing and in the pipeline – so our challenge is getting out there in front of more lenders so they can learn about our platform and the benefits of lending through Huddle.

Which marketing channels do you use to attract investors and borrowers?

We are marketing to investors through the usual channels of PPC & SEO, but the primary channel we use is content led marketing, providing educational led content, empowering potential lenders to understand the lending business better and be in a position to make informed lending decision.

Peer-to-peer lending websites struggle (to attract borrowers (Financial Times), Rated: A

Peer-to-peer lending websites are struggling to attract UK customers who want to borrow money, despite hundreds of millions of pounds of investment in the sector.

Just 7 per cent of 1,100 people said they had used this sort of service to borrow in 2017, according to a survey by consultancy EY. Separate research from Blumberg Capital, a venture capital group, reported only 4 per cent of 1,050 British adults had used alternative lending services in the past 12 months.

How banks could look into YOUR account to decide if they will give you a mortgage (Express.co.uk), Rated: A

MORTGAGE loans and another types of lending are set to get tougher than ever thanks to a new way banks will measure who is a good candidate – by looking directly into into a bank account to check up on spending.

Alastair Douglas, CEO of TotallyMoney.com, told Express.co.uk he expected the development to become the norm “within one or two years”.

Fintech trade body chief steps down (Financial News), Rated: B

The chief executive of the UK’s fintech trade body is stepping down next week after two and a half years in the role, with a former senior Nasdaq executive standing in until a permanent successor is found.

Innovate Finance, a not-for-profit association founded in 2014 to represent the UK’s global fintech community, said in a statement today that Lawrence Wintermeyer will step down at the end of the month.

Former Lloyds boss Eric Daniels sues to claim unpaid bonuses (Financial Times), Rated: B

Eric Daniels, who ran Lloyds Banking Group when it was rescued by UK taxpayers, is suing the lender with a former colleague to claim £1m of unpaid bonuses linked to its HBOS acquisition, according to a person briefed on the lawsuit.

The former Lloyds chief executive, who left in 2011, filed a claim this month with London’s High Court along with a separate claim filed by Truett Tate, the lender’s former head of wholesale banking.

China

China: Number One Fintech Country In The World? (Coin Telegraph), Rated: AAA

China has not only caught up, but rather leapfrogged major cities such as New York, Silicon Valley and London. Many people are even claimingthat clusters of cities such as the Pearl River Delta in China are becoming the “new Silicon Valley.”

Due to China’s relatively new capital market structure, a lot of legacy systems in place in Western countries just aren’t present yet in China.  On top of that, the major Chinese banks are all state-owned (ICBC, ABC, CCB and BOC). They’ve made a living off lending to other large state owned enterprises (SOEs), which has left a large section of the population, in particular small and medium sized enterprises (SMEs) without the proper access to loans and credit.

Source: Coin Telegraph

China has well over 700 mln Internet users, or more than double the entire population of the US.  Combined with a propensity to use smartphones and mobile payments thanks to WeChat and Alipay, Chinese consumers have spectacular adoption rates of Fintech applications in comparison to other nations. For example, 40 percent of consumers in China use non-traditional payment methods such as Alipay, compared to just four percent in Singapore.

Source: Coin Telegraph

With major e-commerce platforms such as Alibaba’s Taoball and Tmall, and JD.com, there has been a need for quick and easy e-payments, which can be done using Fintech applications such as Alipay. Not only has this created opportunities within the payments vertical of Fintech, but also within lending, insurance, investment and wealth management.

Nation sees highest uptake of fintech (China Daily), Rated: A

China ranks top among 20 world markets in terms of fintech adoption, with 69 percent of surveyed consumer respondents saying they are actively using fintech services, 33 percentage points higher than the global average.

China ranks top among 20 world markets in terms of fintech adoption, with 69 percent of surveyed consumer respondents saying they are actively using fintech services, 33 percentage points higher than the global average.

Around 64 percent of fintech users said they prefer using digital channels to manage “all aspects of their life”. And 13 percent of polled consumers said they are regular users of five or even more fintech services, which include money transfer and fintech, wealth planning, deposit and investment, borrowing and insurance.

China’s first independent network bank gets authorized from CBRC (Xing Ping She), Rated: A

On 21st August, Baixin Bank, the first independent network bank in China, announced that they had been authorized by CBRC (China Banking Regulatory Commission).

According to public information, BaIxin Bank was jointly incorporated by China Citic Bank (shareholding ratio: 70%) and Fujian Baidu Borui Network Technology co. LTD (shareholding ratio: 30%). It takes more than one year for Baixin Bank to get the opening approval since Citic Bank’s Board Meeting passed the Bill on Establishment of a Pure Network Banking Company on November 17, 2015.

Li Qingping, the President of Citic Bank, previously said that the two parent companies would not interfere the marketing operation of Baixin Bank. It will provide a platform of banking for common people, enable them to conveniently enjoy finance service. Meanwhile, the bank will take advantages of both Citi Bank’s risk control capacity and Baidu’s innovative technologies like AI, big data and cloud computing, so as to meet the personalized financial needs of customers.

Credit Quality of Internet Companies Susceptible to Finance Business Actions (Financail Buzz), Rated: A

Moody’s Investor Services has opined that the credit quality of Internet companies could be weakened by Chinese technology companies pushing their way into orthodox businesses like finance and banking.

Lina Choi, senior credit officer, and the vice-president of Moody’s said that Internet companies can suffer from potential capital calls and contingent liabilities as a result of loans made to merchants and consumers. The scenario is also affected by wealth management distribution. Incidentally, these are the two main services offered by these online companies.

The first shareholders meeting held today: 13 directors 7 supervisors list of candidates surfaced (EEO.com.cn), Rated: B

Economic Observer learned that on August 22, the first shareholders meeting of Internet Clearing Co., Ltd. will be held in Beijing, after the meeting, the list of directors and supervisors will be officially released.

Compared to the financier, Jingdong Finance, quick money, one wallet of several directors of the rise, the Alipay director of the candidate Wang Zuojiang for the director level.

Tencent nominated director of the candidates Lai Zhiming in the technical and financial aspects have a very strong background.

Ping An paid the nomination of directors Candidate Zhu Yinjia is the only product of all the nominated directors of the professional background of professional payment.

International

3 Investments You Must Make Before Market Collapses (Newsmax), Rated: AAA

Exactly a year ago, in the wake of Brexit, the US 10-Year Treasury rate fell to an all-time low of 1.36%. At that point, bond yields—which move inversely to their price—had been declining for eight years with no end in sight.

Then Trump won the US election; another unexpected twist. An uptick in inflation and a series of rate hikes followed shortly afterward, and the 10-year yield has risen 67% from its lows.

  • Europe

Just a year ago, Europe looked like the last place you’d want to put your money in.

While everyone was applauding the uptick in US growth after the election, Europe recorded higher growth in 2016.

Despite improving fundamentals and strong performance, EU stocks remain relatively undervalued. For example, the Shiller P/E ratio is 55% lower for EU stocks than for their US counterparts.

Source: Newsmax
  • Peer-to-Peer Lending

P2P investors are currently averaging 7.3% returns on 36-month loans. Even those who took the most conservative approach saw returns of 5%.

The likes of Goldman Sachs and Morgan Stanley now account for over 70% of new capital.

Source: Newsmax

Fiserv Acquires Dovetail Group To Reinvent Payments Infrastructure Worldwide (PYMNTS), Rated: B

Fiserv, a financial services technology solutions provider, announced the acquisition of Dovetail Group Limited to further enable it to help financial institutions around the world transform their payments infrastructure. The new capabilities would be used to meet the evolving needs of wholesale, commercial and retail customers.

Australia

Amazon a bigger threat to banks than fintech: World Economic Forum (Financial Review), Rated: A

The combination of “open banking” regimes and data migrating to the computer cloud will lure global technology giants to create platforms for distributing financial services, a move that will force incumbent banks to compete head-on to control customer relationships or risk becoming mere suppliers of commoditised financial products.

That’s a view of the future set out by the World Economic Forum in a 194-page report on fintech disruption, released in New York on Tuesday, that warns traditional bank distribution models and economics “are at risk of being deeply disrupted by the drive towards platform models of banking”.

It calls out the arrival of internet behemoth Amazon into financial services. Amazon Lending, quietly launched six years ago, offers credit to merchants selling on its platform and uses their sales data to measure risk. It has made loans worth over $US3 billion and is expanding in the US, Britain and Japan, according to a recent report in the Financial Times.

It also points to Chinese tech giant Tencent’s Webank platform, which allows retail customers to purchase products from multiple competing credit and asset management providers, as a plausible model for financial services distribution in the future.

Asia

Indonesia’s fintech investments set to touch record high in 2017 (Deal Street Asia), Rated: AAA

Investments into Indonesian fintech startups are set to hit a record high in 2017 at the current run rate, according to an analysis by venture intelligence platform CB Insights. It is estimated that there will be a total of about 50 deals this year alone.

A recent study revealed that 80 per cent of the Indonesian population does not have a formal bank account, with 203 million Indonesians earning less than $4.50 a day.

In January this year, private lender Bank Central Asia (BCA) launched its VC arm, Central Capital Ventura, committing Rp 200 billion ($15 million) in investments so far.

In P2P lending, notable deals include Amartha raising $30 million in a round led by MCI in March this year. More recently, UangTeman announced a $12 million Series A round led by K2 Venture Capital with participation from Hong Kong-based STI Financial Group and American firm Draper Associates.

Moka is one of the best funded merchant payment startups in Indonesia, counting Convergence Ventures, East Ventures, Fenox VC, and Wavemaker Partners among its investors. Other active firms in this area are Pawoon, backed by Ideabox and Kejora Ventures, and Cashlez, backed by MCI and Gan Capital.

Middle East

UAE-Based Fintech Start-Up Secures $ 700K Investment to Advance Financial Services Access for Underserved Migrant Workers (Fox34), Rated: AAA

NOW Money has secured an investment of $700,000 from two U.S.-based venture capital investors – Accion Venture Lab, the seed-stage investment initiative of financial inclusion leader Accion, and Newid Capital.

The investment comes a year after NOW Money’s initial seed funding, which allowed the company to expand the team and develop the technology and brand. With the latest investment, also a part of its seed round, the team plans to launch the service across the United Arab Emirates and expand into the other Gulf Cooperation Council (GCC) countries.

Funding squeeze lifts ME non-bank lending (Oman Trubune), Rated: A

Middle East investment companies are ramping up their lending to businesses, providing a lifeline for small and medium-sized firms struggling to secure finance from banks that tightened credit after a suffering rise in bad loans.

Industry participants estimate non-bank lenders in the region could provide around $1 billion over the next three to five years, including secured loans, mezzanine debt, preferred shares and convertible loans and bonds.

Authors:

George Popescu
Allen Taylor

Tuesday August 8 2017, Daily News Digest

LendingClub

News Comments Today’s main news: OnDeck posts quarterly adjusted profit. OnDeck expands partnership with JPMorgan Chase. More than half Wellesley borrowers are in default or behind on payments. Tencent tests credit scoring. Westpac Banking invests in zipMoney. SoftBank says Q1 profit jumped 50.1% after adding Vision Fund. Fintech investments tripled in Singapore. Today’s main analysis: LendingClub Q2 earnings. Today’s thought-provoking articles: […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Middle East

Latin America

Africa

News Summary

United States

Online lender OnDeck posts surprise quarterly adjusted profit (NASDAQ), Rated: AAA

Online lender OnDeck Capital <ONDK.N> posted a surprise quarterly adjusted profit on Monday, driven by lower costs and higher interest income.

Excluding items, OnDeck earned 2 cents per share in the second quarter ended June 30, compared with the average analyst estimate of loss of 1 cent, according to Thomson Reuters I/B/E/S.

Net loss attributable to common shareholders narrowed to $1.49 million, or 2 cents per share, in the quarter, from a loss of $17.9 million, or 25 cents per share, a year earlier.

Originations fell 21.3 percent to $464.4 million.

Operating expenses fell about 6.3 percent to $44.6 million.

OnDeck Will Focus on Better Borrowers, Expanded Partnerships to Grow Originations (Bank Innovation), Rated: AAA

The online lender will continue this focus on higher quality borrowers going into the remainder of 2017, and will also be expanding several of its loan features, including prepaid benefits for term loans and a “more tailored” underwriting experience for businesses, said Breslow.

OnDeck Capital up more than 6% after earnings beat (Seeking Alpha), Rated: AAA

  • Adjusted EBITDA of $3.3M vs. a negative $12.4M a year earlier.
  • Full-year guidance is reiterated: Revenue of $342M-$352M, and adjusted EBITDA of $5M-$15M. Q3 revenue is seen at $82M-$86M, with adjusted EBITDA of $1M-$5M.

OnDeck announces expanded partnership with JPMorgan Chase (MarketWatch), Rated: AAA

OnDeck Capital, Inc. ONDK, +18.48% on Monday announced it had expanded a collaboration with JPMorgan Chase, JPM, -0.02% which is providing technology that runs the online lending platform.

Chase extends relationship with OnDeck (Finextra), Rated: A

JPMorgan Chase (NYSE: JPM) and OnDeck (NYSE: ONDK) today announced a contract extension to continue their collaboration on the bank’s digital small business lending product, Chase Business Quick Capital, for up to four years.

Why On Deck Capital Stock Jumped More Than 20% on Monday (The Motley Fool), Rated: A

Shares of On Deck Capital (NYSE:ONDK) were up more than 21% as of 3:15 p.m. EDT, after the company announced a smaller net loss during the second quarter and a promising expansion in its partnership with JPMorgan Chase (NYSE:JPM). Shares of LendingClub(NYSE:LC), its primary rival in the world of online lending, rose 7%, as investors see On Deck’s recent performance as a good omen for the industry as a whole.

A focus on higher-quality borrowers seems to have relaxed investors’ worries about the company’s loan quality, a perennial concern given that the average On Deck loan carries an APR in excess of 40% per year.

Lending Club Q2 2017 Earnings – Back to Growth (Lend Academy), Rated: AAA

Lending Club’s second quarter earnings marked an important milestone for the company – a return to growth. Originations have been hovering around $1.9 billion since Q2 of last year. This quarter Lending Club announced originations of $2.15 billion for the quarter, up 10% from the prior quarter of $1.96 billion. While this is still down from their previous highs, it shows that the company is back on a growth trajectory.

Source: Lend Academy

Last quarter the company announced banks were funding 40% of loans, but that reached higher in the second quarter to 44%.

Source: Lend Academy

Borrowers

  • Achieved 10% sequential growth to over $2.1 billion in originations, driven by strong borrower demand
  • Successfully launched multiple conversion initiatives, including pricing optimization and a redesigned website
  • Improved sales and marketing efficiency by over 7% sequentially
  • Credit continues to perform in line with expectations as observed in both vintage and portfolio trendsInvestors
  • Successfully executed the first self-sponsored securitization thereby opening a new funding source, expanding the investor base with 20 new investors, and generating a new repeatable revenue stream
  • Record number of managed accounts and institutional investors participating on the platform in the quarter
  • Successfully launched new iOS mobile application for retail investors

LendingClub Shares Soar 13% on Smaller Loss (Fortune), Rated: A

Online lending platform operator LendingClub reported a smaller loss on Monday, helped by higher net interest income and a drop in expenses.

Shares of the company (LC, +12.86%) were up 13.2% at $5.90 in after-hours trading.

LendingClub shares rise 8 percent on positive outlook, higher revenue (Reuters), Rated: A

Online lender LendingClub Corp (LC.N) raised its earnings outlook on Monday after reporting the second-highest quarterly revenue in its history and a drop in costs, sending shares up nearly 8 percent.

LendingClub now expects full-year total net revenue to be in the range of $585 million to $600 million, compared with its earlier forecast of $575 million to $595 million.

Shares of the company, which connects consumers looking for loans with individual or institutional investors such as banks through its website, were up 7.8 percent at $5.46 in after-hours trading.

Online lenders upbeat about turnaround progress, but worries linger (Today Online), Rated: A

LendingClub Corp <LC.N> and OnDeck Capital Inc <ONDK.N> surprised investors on Monday with strong growth forecasts that sent the online lenders’ stocks soaring, but analysts said the sector’s health was still a concern.

OnDeck shares closed 18.5 percent higher at $5, and LendingClub ended up 4.8 percent $5.46. The stocks rose in after-hours trading but remain far below their initial public offering prices of $20 and $15, respectively.

Executives of both companies were upbeat about the progress in their turnaround plans after they reported second-quarter results.

Earnest Corp is looking to sell itself for $200 million, Bloomberg News reported on Friday, far less than the $300 million it has raised from investors.

Online Lenders Clear a Low Bar—Higher Ones Lie Ahead (WSJ), Rated: AAA

The online lending industry regained its footing in the second quarter, more than a year after it was knocked off-balance by severe disruptions in the loan marketplace. But investors’ sky-high hopes for the sector may have been lowered permanently.

Investors also were relieved that On Deck reiterated it would turn profitable later this year. Shares rose a sharp 18.5% Monday, but they fetch only about a fourth of their December 2014 IPO price, a sign of just how much the hype around these lenders has deflated.

Crucially, On Deck has moved on from funding loans through an online marketplace, the aspect of its business model that was truly disruptive. It now funds the vast majority through its own balance sheet, making On Deck more like an ordinary bank.

Both companies have to worry about rising competition. Innovative payment companies like Square and PayPal are extending more microloans to their merchant customers. Meanwhile, giants of finance like Goldman Sachs are extending more unsecured personal loans, which is LendingClub’s sweet spot.

Fintech Firm Fiserv Raises Offer for Monitise to $ 98 Million (The New York Times), Rated: A

U.S. financial technology provider Fiserv made an improved offer for Monitise worth about 75 million pounds ($98 million) on Monday, hoping to secure backing from the British financial services technology group’s investors.

Fiserv’s earlier offer, which valued the group at about 70 million pounds, drew criticism from Monitise’s investors led by Cavendish Asset Management, for being too low, given that the British group was worth over 1 billion pounds three year ago.

Fiserv’s final offer of 3.1 pence in cash per share represents a premium of 34.8 percent over Monitise’s closing price on June 12, the last before the initial offer was made.

Banco Santander, Monitise’s top shareholder with a 4.67 percent stake, had submitted a letter of intent to back the deal, as had Visa Inc, a large customer and investor with a 2.41 percent stake.

LendingRobot Series Second Quarter Report (LendingRobot), Rated: A

LendingRobot Series finished the second quarter with a healthy YTD aggregated return of 2.7%. Each Series’ return and portfolio health is in line with projections. Since April 1st, LendingRobot Series has added over 2,800 loans to its portfolio, more than doubling the number of loans held in each series.

Source: LendingRobot

 

Legislative Update 161 (Experian Email), Rated: A

Highlights this issue:

  • On July 10, the CFPB published a final rule prohibiting the use of mandatory predispute arbitration clauses that prevent class action lawsuits in consumer contracts for a wide array of financial products. The final rule was published in the Federal Register on July 19, and will become effective 60 days after that date, or September 18. All consumer contracts with arbitration clauses will need to comply with the rule within 180 days of the effective date, which will be March 19, 2018.
  • The House of Representatives is working to pass 12 appropriations bills by September 30 to fund federal agencies for the Fiscal Year 2018. The House Appropriations Committee passed the spending bill for financial regulatory agencies on July 13. The measure included several provisions important to Experian and our clients.
  • On July 19, Representatives Patrick McHenry (R-N.C.) and Gregory Meeks (DNY) introduced the Protecting Consumers Access to Credit Act. The bill would codify the legal precedent under federal banking laws that preempts a loan’s interest as valid when made.
  • Legislators in California continue to debate legislation that would enact a broadband privacy law in the state, similar to the rule issued by the FCC and then overturned by Congress. A.B. 375 would prohibit an internet service provider from using, disclosing, selling or permitting access to customer personal information.

Read the full update here.

4 Reasons Online Lenders Are Innovating With Purchasing Cards (Entrepreneur), Rated: A

In recent years, Kabbage and others have stepped up to introduce a purchasing card product to their borrowers, and with their early success, many lenders are now following suit for the following four reasons:

  1. Staying on top of the customer’s mind
  2. Speaking the language of large corporate partner targets
  3. Underwriting use of funds
  4. Revenue sharing

New Financial Technology Upgrades Bank’s Credit Review Process (PayNet Email), Rated: A

Enables Banks To Review All Credits and Focus on the Highest Risks

The real challenge is convincing bank management that they do not have to apply the same credit review process to the entire portfolio.  Adopting different processes based upon exposure size and measured risk (APD for example) should be the goal of every bank.  In other words, focus credit review efforts to those accounts that represent the greatest risk to the bank – and that is what you are hoping to do with your credit review process.

Conducting credit reviews are a “waste of time” in most cases because nothing has changed. What form that documentation takes is where PayNet can be most helpful to the prospect.

PayNet is introducing PayNet Credit Review Express, a risk management tool which streamlines the credit review process making credit review easier and less costly.

Credit Review Express assesses the credit risk of each C&I borrower each month. Banks can assign their definition of risk from delinquency to probability of default to assign high, medium or low risk to each borrower. Currently, PayNet sees less than 2% of C&I borrowers as high risk credits. Other features include automated action steps (such as Watch, Restructure, Work-out) and a customized dashboard to monitor and track activity.

FDIC defends right to charter new banks against OCC criticism (American Banker), Rated: A

The Federal Deposit Insurance Corp. defended its authority to approve prospective new banks in response to suggestions by acting Comptroller of the Currency Keith Noreika that his agency should be able to approve applications on its own.

Rumour mill churns in US online lending sector (AltFi), Rated: A

Whispers abound of a major financing round, an acquisition and an IPO within the US online lending space.

Perhaps chief among the rumours was the suggestion that SoFi may at last be on the brink of an IPO that was first mooted by CEO Mike Cagney in 2014.

Meanwhile, SoftBank continued to build on its portfolio-for-the-future with a $250m equity investment in small business lending fintech Kabbage.

Cities where student loan borrowers struggle with debt the most (Credible), Rated: A

So it’s important for borrowers, especially recent grads, to think about the best places to live — the cities in which they’re not only likely to find a well-paying job, but also where rents and other living expenses aren’t so exorbitant so as to add to their pile of debt.

5 cities where student loans borrowers struggle the most with debt:

  • 1. San Jose, California
  • 2. Fort Worth, Texas
  • 3. Boston, Massachusetts
  • 4. Los Angeles, California
  • 5. Denver, Colorado

5 cities where student loans borrowers struggle the least with debt:

  • 1. Dallas, TX
  • 2. Jacksonville, FL
  • 3. Houston, TX
  • 4. Columbus, OH
  • 5. Austin, TX

The key indicator for affordability was how much of a borrower’s monthly income would go towards their student loan payments and monthly housing costs.

Source: Credible

 

Marketplace Lending Explained (WealthManagement.com), Rated: A

Marketplace lending has grown by nearly 150 percent on a compound annual basis for the last half-decade. Strong growth and real longevity mean that most advisors have to consider the role that marketplace lending plays in their clients’ portfolios.

Source: WealthManagement.com

Refinancing high-rate credit card debt or other hard-money-type loans among high-quality borrowers via a marketplace lender is sensible and provides good value to all parties.

As part of a fixed income allocation, what are the risks in marketplace loans? There is the credit risk of the borrower first and foremost—here the asset can be seen as clearly pro-cyclical; in other words, as the economy improves, the asset strengthens. Correspondingly, as the economy weakens, the credit of the borrower will weaken. Additionally, there has recently been some weakness in consumer credit, primarily in auto loans and credit card defaults, though these have been largely limited to the subprime aspects of these loan categories.

United Kingdom

The Growing Alternative Finance Industry (Business Zone), Rated: AAA

The latest equity crowdfunding statistics released by OFF3R last month revealed that the first half of 2017 was the strongest 6 months for equity crowdfunding to date.

Six of the leading equity crowdfunding platforms that form the OFF3R Index raised nearly £130M in 2017 for UK private companies. This is £2M above the previous half yearly record that was reached back in the second half of 2015. March 2017, where Over £40 million was raised, buoyed the latest data and the period as a whole was characterised by some very large fundraises from Q1 2017.

The data also revealed that peer to peer lendinglevels continue to rise in the UK. The peer to peer lending statistics showed that over £1.8 billion was lent in the first half of 2017 by the nine platforms that make up the OFF3R Index. This is an increase of over £350 million from the previous half year period at the end of 2016.

The data also revealed that Assetz Capital had a record breaking month in June 2017. The total amount lent of over £30 million by the platform was higher than any previous period since the OFF3R Index began.

Toxic loans blight property peer-to-peer lender Wellesley – with more than half its borrowers behind on payments or in default (This is Money), Rated: AAA

More than half of the customers of an internet loan firm run by an aristocratic financier are behind on their payments or in default, the Mail can reveal.

Wellesley, a peer-to-peer lender which allows property developers to borrow cash from savers, is grappling with losses on its loan book.

Online lender Tandem acquires Harrods Bank in bid to expand services (Belfast Telegraph), Rated: A

Start-up lender Tandem has snapped up Harrods Bank in a deal that will bring it closer to launching a savings account.

The undisclosed deal will hand the online-only lender £80 million of additional capital and enable it to regain its banking licence , if it wins regulatory backing.

The institutional investor selling down its stake in VPC Speciality Lending (AltFi), Rated: A

Old Mutual, a sigificant shareholder in the £351m VPC Speciality Lending fund, has further reduced its holding in the closed ended portfolio following previous reductions in exposure earlier in the year.

Its holding in the fund fell below 6 per cent back in March 2017, now it has sold more shares with its stake now less than 4.99 per cent, according to regulatory filings.

VC firm behind Zopa among judges at PitchIt funding competition (P2P Finance News), Rated: B

A VENTURE capital (VC) firm that backed Zopa in its early days has been named among judges for the second annual PitchIt Europe competition.

Rob Moffat, partner at Balderton Capital, an early Zopa backer, will be one of the VC judges alongside Seedcamp’s Reshma Sohoni, Blenheim Chalcot’s Dan Cobley and managing director of CommerzVentures Patrick Meisberger.

China

Tencent credit check takes mobile payments battle to Alibaba (Financial Times), Rated: AAA

Tencent is developing a credit scoring system as it ramps up its battle with rival Alibaba for a share of China’s $5.5tn mobile payments market.

Ant Financial, Alibaba’s payments affiliate, launched its Sesame Credit two years ago, parlaying its data on consumers into a measure of their trustworthiness, providing comfort for small businesses and consumers alike.

Credit scoring is popular in China, especially among younger subscribers who lack a credit history but might be eligible for a high rating that would let them rent hotel rooms, bikes or phone chargers without leaving a deposit. The services are particularly valuable given the lack of access to credit cards in the country.

Tencent is testing a credit scoring service among a small group of its subscribers, upping the stakes as the two tech titans engage in an aggressive promotion this week encouraging Chinese to forgo cash in favour of payments made with a swipe of the phone.

Top 100 List of Chinese Internet firms in 2017: Tencent surpassed Alibaba to become NO.1, and Letv was Out of the List. (Xing Ping She), Rated: AAA

Recently, Internet Society of China (ISA) and the information center of Industry and Information Technology Ministry Jointly issued the list of “China’s Top 100 Internet Companies in 2017”. For this time, Tencent overtook Alibaba to become the No.1. Tencent, Alibaba and Baidu were still the top three for five consecutive years, while Letv was out of the list.

The top 10 of the list were:

  • No.1 Tencent
  • No.2 Alibaba
  • No.3 Baidu
  • No.4 Jingdong
  • No.5 NetEase
  • No.6 Sina
  • No.7 Sohu
  • No.8 Meituan
  • No.9 Ctrip
  • No.10 360

The list of “China’s top 100 Internet Companies” has been published every year since 2013 and has been published five times so far.The evaluation index combines seven core indicators of enterprise scale, profitability, innovation, growth, influence and social responsibility.

Central bank to regulate rapidly growing fintech (China Daily), Rated: AAA

In a report released last weekend, the People’s Bank of China said some financial products offered through internet channels by fintech companies are “systemically important” and hence will be included in its macro-prudential assessment or MPA.

The aim is to prevent cyclical risks and cross-market risk transmission, it said.

Analysts said this is the first time that the PBOC said it will include fintech businesses in its MPA.

With $ 3.58 bn in newly increased loan balance, Weli Dai becomes the largest microcredit platform in China (Xing Ping She), Rated: A

On 7th August, a Webank staff said in WeChat Moments that the loan balance of Weli Dai reached a milestone of over 100 billion RMB (equivalent to $14.91 bn). In a speech at the LendIt on July 16, Fang Zhengyu, the director of retail credit section in Webank, revealed that the loan balance of Weli Dai was $1.13 bn. And it has increased by $3.58 bn within just 22 days. What an amazing growth!

Weli Dai is focused on providing a cash loans product, with the loans amount from ¥500 to ¥300,000, and is operated in pure online pattern. With its white list invitation system, Weli Dai identifies the target customers effectively. The loan period is flexible from one day to twenty months, which makes users borrow and repay money at any time. Many factors contributed to the performance of Webank today, the most important is that Webank developed its business in the huge customer base of QQ and WeChat. Besides, Webank has built partnerships with nearly 40 banks for jointly making loans.

Hong Kong startup close to US$ 500mil valuation (The Star), Rated: A

TNG FinTech Group Inc, a Hong Kong-based digital wallet operator founded in 2013, is poised to close a funding round and is targeting a valuation of about US$500mil, according to a person familiar with the matter.

It has attracted almost US$60mil in the series A round from investors including a Beijing-based private equity fund, said the person, who asked not to be named discussing private deliberations.

TNG, which offers global money transfers, foreign-exchange transactions and bill payments, expects to be profitable this year and is targeting a listing in either New York or Hong Kong by 2019, the person said.

Jeffrey Chen of ZhongAn Insurance (Lend Academy), Rated: A

Our next guest on the Lend Academy Podcast is Jin (Jeffrey) Chen, the CEO of ZhongAn Insurance. I sat down with him when I was in Shanghai recently for Lang Di Fintech (LendIt’s Chinese event) and we conducted this interview with the assistance of his translator.

People’s Bank of China Has Fintech on Its Mind (Fox Business), Rated: A

The People’s Bank of China said in a report that it is considering expanding its risk-assessment system beyond banks to include major online financial businesses. Last month, it reached agreement with 45 nonbank financial firms– including payment systems affiliated with internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.–on joining a new payment-clearing platform called Wanglian, according to listed-company documents.

This effectively gives the PBOC a clearer view of payments, enhancing regulation, said Tencent, which owns the TenPay payment system.

European Union

Fellow Finance Adds Invoice Financing (P2P-Banking), Rated: A

Finnish p2p lending service Fellow Finance has opened a new invoice finance service for companies, which allows businesses to convert their trade receivables into cash immediately. In the new invoice finance service, a company gets funding against its invoice receivables directly from investors.

In adjacent Estonia p2p lending marketplace Investly, which specializes on invoice financing for Estonian and UK SMEs, is growing. The last figures we reported for them show 78% month on month and 319% y-o-y growth.

Balderton Capital on European Fintech (Stitcher), Rated: A

Rob Moffat is a Partner at Balderton Capital, a London-based venture capital firm that has invested in fintech businesses including GoCardless, Revolut, Crowdcube, Nutmeg, Seedcamp, ComplyAdvantage, Wonga, Zopa and more. Prior to joining Balderton, Rob worked at Bain & Company and Google. Rob holds degrees from Cambridge and INSEAD.

Listen to the podcast here.

International

Senate To Mull Financial Choice Act, UK Officials Look For Tighter Controls (PYMNTS), Rated: A

As has been noted in the financial and trade press, the Financial Choice Act, which was passed last month by the U.S. House of Representatives, now awaits a vote in the U.S. Senate.

In other regulatory news, one executive in Britain is calling for tighter financial regulations in the United Kingdom. Douglas Flint, departing chairman of Britain’s largest bank, HSBC, said in a statement that, amid issues such as Brexit and a revamp of the European financial order, a lack of homogeneity in regulation means there should be cooperation between overseers to find — and stop — “bad actors.” Flint advocated that “greater cooperation between the public and private sectors, together with a refresh of bank secrecy laws and regulation designed for a different age, would significantly increase the effectiveness of our joint efforts.”

Visa And The QR Code Evolution/Revolution (PYMNTS), Rated: A

As it turns out, putting that spec on the shelf helped to inform the development of the EMVCo QR code standard, which was released yesterday into a payments ecosystem that looks at them as anything but uninteresting.

China is a prime example as, over the course of the last five years, the QR code-based mobile payment has almost entirely displaced cash in the country — and leapfrogged credit and debit cards — to become Chinese consumers’ preferred alternative for payment. There are $5.5 trillion worth of mobile payments made in China per year, the vast, vast majority of which are handled via QR code.

But perhaps most striking is India and its government’s November 2016 decision to move toward a cashless society. That led the country to the accompanying adoption of a QR code-focused payments scheme based on Visa’s mVisa standard.

Getting To Scale

Visa is currently developing mVisa as a worldwide solution. The key to scale, Shrauger told Webster, is making it useful and accessible for their two client groups — merchants and their customers.

Australia

Westpac Banking Invests $ 40 Million into zipMoney (Crowdfund Insider), Rated: AAA

zipMoney (ASX:ZML) has announced a $40 million strategic investment from Westpac Banking (ASX:WBC). The investment was paired with an agreement for the two companies to explore the integration of Zip’s products and services into Westpac’s network across Australia. The investment will be by subscription of ordinary equity of 49,382,716 shares at a price of $0.81 per share. This represents a 14.1% premium over the close of $0.71 on August 4th.

India

How technology is helping investors achieve their financial aspirations (Financial Express), Rated: A

Most Indians save first and think of spending later. However, when it comes time for them to plan their expenses, they end up relying on mental estimates of their financial position. As a result, most people are never confident of 1) how much to save and 2) whether they can reach their financial aspirations with their current investment plan. This is especially true for young professionals who want to save for a secure future but also want a more fulfilling life experience. What is required is financial advice that delivers the answers to these questions in a clear and quantified way.

A solution to these issues has come from the field of artificial intelligence. Cognitive technologies is a branch of artificial intelligence that deals with the application of computers towards tasks traditionally performed by people. The aim of this process is to design a software solution that has comprehensive and detailed instructions, that enables it to do the same work that a person can. The benefits of this approach are that the same work can be done at a much faster pace, at a higher accuracy and at a lower cost.

Asia

Japan’s SoftBank says Q1 profit jumps 50.1% after inclusion of Vision Fund (CNBC), Rated: AAA

Japan’s SoftBank Group Corp on Monday reported a 50.1 percent rise in first-quarter operating profit, after the company included Vision Fund, the world’s largest private equity fund, as a new reportable segment and booked a valuation gain.

The internet and telecoms giant said profit for the quarter through June increased to 479.2 billion yen ($4.33 billion).

Fintech investments tripled in Singapore (The Star), Rated: AAA

GLOBAL investment in financial technology (fintech) firms more than doubled in the second quarter of the year, compared with the first quarter, to US$8.4bil (S$11.4bil) across 293 deals, KPMG said in a recent report.

Investment in fintech in Singapore more than tripled to US$61.5mil (S$83.3mil), although there were only four deals, compared with seven the quarter before.

Indonesian P2P Lending Platform UangTeman Secures Million During Series A Funding Round Led By K2 Venture Capital (Crowdfund Insider), Rated: A

On Monday, Indonesia-based peer-to-peer lending platform UangTeman announced it successfully secured $12 million during its Series A funding round, which was led by K2 Venture Capital, with participation from STI Financial Group and Draper Associates.

Middle East

UAE Authorities Plan SMB Crowdfunding Framework (PYMNTS), Rated: AAA

United Arab Emirates (UAE) regulators are setting out to establish a framework to guide the small business (SMB) crowdfunding market, news reports on Sunday (Aug. 6) said.

Equity crowdfunding is expected to provide $93 billion to small- and medium-sized enterprises by 2020, reports added. In the UAE, SMBs stand to gain significantly from that trend, as these businesses make up an estimated 85 percent of all UAE companies. In Dubai, that number is even higher, at nearly 95 percent of all businesses, reports added.

Meanwhile, research from the Khalifa Fund for Enterprise Development found that as many as 70 percent of small business loan applications in the UAE are rejected by traditional banks, despite efforts from the national government and the Central Bank of the UAE to promote SMB financing.

Latin America

Mexican fund invests in peer-to-peer lending network (Latin Lawyer), Rated: A

Greenberg Traurig SC in Mexico City has helped Mexican venture capital fund Ignia invest in peer-to-peer lending network Afluenta.

Africa

Why African fintech startups are becoming even more attractive for investors (Quartz), Rated: AAA

Take Flutterwave, a payments company which builds infrastructure to ease processing payments across Africa, it’s just raised $10 million in its Series A round. Significantly, the round was led by leading Silicon Valley venture capital funds Greycroft and Green Visor Capital, with participation from Y Combinator and Glynn Capital.

Fintech startups are the “most attractive,” for tech investors looking towards Africa, according to a recent report by Disrupt Africa. Nearly 20% of fintech startups tracked raised money in the last two years and in 2016, there was a 84% increase in the number of fintech startups secured investment compared to the previous year. In total, since 2015, fintech startups in Africa had raised $93 million in investment as of June 2017. Flutterwave’s raise takes that total past the $100 million mark.

In more advanced economies, fintech startups are focused on disrupting the traditional banking industry by changing how people access financial services. But in most parts of sub Saharan Africa, that’s not the case. In fact, fintech startups are typically creating products and services to plug many of the gaps which currently exist.

Indeed, as of 2014, only 34% of adults in sub Saharan Africa had bank accounts. Given the sheer size of the market which remains under-served, fintech startups are presented with a huge opportunity. And for investors, all that represents a major upside.

Authors:

George Popescu
Allen Taylor

 

Tuesday June 27 2017, Daily News Digest

shadow banking

News Comments Today’s main news: Venmo is testing a physical debit card. Zopa shares its banking plans. Ranger Direct Lending enters arbitration with Investee Princeton. Aegon Life explores digital channels for selling policies. Today’s main analysis: What’s driving the growth of shadow banking? Today’s thought-provoking articles: Prosper performance update for May 2017. The fastest consumer lenders to $1B in […]

shadow banking

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Canada

News Summary

United States

Venmo is testing its own physical debit card (recode), Rated: AAA

Venmo has been testing its own version of a physical debit card that would allow people who use its app to make purchases in brick-and-mortar stores using money stored in their Venmo account, according to multiple sources.

One potential advantage is that it would allow Venmo users to immediately spend money that is sent to them via the app without having to wait a business day for a deposit of those funds to appear in their bank account.

Prosper Performance Update: May 2017 (Prosper), Rated: AAA

Today we are sharing performance data for the Prosper portfolio for May 2017.  The weighted average coupon for assets originated through Prosper’s platform in May 2017 was 16.34%i, the highest for a monthly vintage since 2013.

Additional highlights from the May Update include:

  • Continued credit tightening can be seen via an increase in expected loss rate, coupon, Loss/FICO, and Coupon/FICO compared to prior months.
  • Prepayments for the 2017 origination months continue to trend above prior vintages.
  • 2015 and 2016H1 vintage delinquencies continue to trend below their prior peaks.

What’s driving the growth in ‘shadow banking’ (Chicago Booth Review), Rated: AAA

According to Chicago Booth’s Gregor Matvos, Booth PhD candidate Greg Buchak, Columbia’s Tomasz Piskorski, and Stanford’s Amit Seru, much of the growth is due to regulations that have pushed banks out of traditional lending businesses. The researchers also attribute some growth to online technology that has lowered the barrier to entry in markets where lenders once needed networks of physical branches to have any hope of building business.

The researchers focus on the US residential lending market, the largest consumer loan market in the country—and the market that drew the most attention from regulators after 2008. Between 2007 and 2015, shadow banks nearly tripled their market share, from 14 percent to 38 percent.

During the study period, lenders that originated loans online (fintech lenders) saw market share rise from 4 percent to 13 percent—but that remains less than half of the shadow-banking sector.

Source: Review.ChicagoBooth.edu

Fiserv partners with fintech startup to launch digital adviser (American Banker), Rated: A

The core banking software provider Fiserv and the fintech startup GoldBean have partnered to provide a digital adviser meant to provide that extra assistance.

GoldBean has an “investing for beginners” platform that was designed to promote financial literacy. By analyzing people’s spending, it creates customized portfolios featuring companies and brands with which end users are already familiar. GoldBean is a graduate of the INV Fintech Accelerator run by Fiserv and Bank Innovation.

Fiserv hopes that by integrating GoldBean education and advice into its Unified Wealth Platform, some of these investors will eventually interact with the human wealth managers who use Fiserv’s platform, for instance when they need to talk about a life change.

Amazon, Klarna, And The ‘Creative Destruction’ Of The Banking System (Seeking Alpha), Rated: A

As a consequence, Klarna has become “one of the most highly valued technology groups in Europe. A round of fundraising in 2015 valued it at $2.25 billion. And it is solidly profitable.”

The crucial thing here is that Mr. Siemiatkowski wants Klarna to stay focused. He believes that other innovative FinTech organizations will fill in the rest of the financial landscape. That is, banking will be done by numerous FinTech companies moving at the speed of technology innovation, not at the speed of ordinary banks.

First, there is so much to be gained from creating a network or a platform that is more inclusive than separate “specialists” joining together to create “full bank offering.”

Second, there is the issue of regulation. Banks are heavily regulated.

What Mr. Bezos of Amazon.com and Mr. Siemiatkowski of Klarna seem to be doing is reinventing banking on the basis of a payments platform that can serve many purposes. The “creative destruction” of the banking system as we know it appears to be just beginning.

The Fastest Consumer Lenders to $ 1 Billion in Originations (Lend Academy), Rated: A

Anyway, I did a little digging and through publicly available information I was mostly able to figure out how quickly many of the major platforms reached their first billion in total loans issued.

1. Marcus – 8 months

2. SoFi – 14 months – Based on data from Kroll Bond Rating Agency, we know that by August 1, 2016 (when the SCLP 2016-2 securitization closed) SoFi had issued at least $1.3 billion in loans based on the loan pool balance of their first three personal loan securitizations. Based on that data I estimate they crossed the $1 billion mark around April of 2016, 14 months after they launched the product.

3. Marlette – 17 months

4. Avant – 28 months – Avant launched in January of 2013 and when they crossed $1 billion in May 2015 they were the fastest platform to that milestone at the time.

5. Lending Club – 65 months – Lending Club was the first platform to cross a billion dollars back in November 2012.

6. Prosper – 98 months – Prosper was the first marketplace lender to launch in this country all the way back in February 2006. For many years it was just Lending Club and Prosper in the online consumer lending space and for much of that time Prosper was the market leader. Prosper crossed $1 billion in April 2014. They took over seven years to do their first $500 million and just 11 months for them to go from $500 million to $1 billion in total loans issued.

ezVerify and LendingPoint Launch ezCarePoint for Medical Payments (BusinessWire), Rated: A

Today at the HFMA ANI 2017 conference, ezVerify and LendingPoint announced an exclusive partnership that will make it easier and more affordable for consumers to pay their medical bills. Working together, the two companies will provide a new service called ezCarePoint, which will allow patients to accurately predict their out-of-pocket expenses and apply for flexible payment plans and loans to cover the costs of medical procedures.

According to a report by The Commonwealth Fund, more than 30 million people do not get necessary medical attention out of fear that doing so would be financially burdensome. Many Americans do not have a clear understanding of their insurance coverage and out-of-pocket obligations — as a result, consumers face medical costs they weren’t expecting, and practitioners lose money on unpaid bills.

By integrating the ezVerify and LendingPoint technologies, ezCarePoint will help patients verify their insurance coverage and payment responsibility for health care services before the procedure takes place, preventing incidents where patients unexpectedly find themselves responsible for bills outside of their insurance coverage. If the patient can’t pay the out-of-pocket costs up front, they will have the option to apply for a loan and payment plan quickly and easily from the ezCarePoint platform. Patients will be notified of approvals in a matter of seconds, and upon approval, LendingPoint will pay the loan proceeds to medical practitioners within one business day to pay the patients’ out-of-pocket medical costs up front.

Euler Hermes Digital Agency Announces CRiskCo Partnership (PR Newswire), Rated: A

Euler Hermes, the world’s leading trade credit insurer, today announced an innovative partnership with fintech credit risk analysis company, CRiskCo. With a focus on revolutionizing factoring, trade and supply chain finance, CRiskCo uses state-of-the art artificial intelligence (AI) credit analysis and fraud detection processes.

Christophe Spoerry, Euler Hermes Digital Agency (EHDA) co-founder, said, ” EHDA and CRiskCo are working together to evolve trade credit insurance and risk management, particularly at the transaction and single invoice cover levels. This has the potential to offer small-medium enterprises (SMEs) significantly more protection when doing business, by providing innovative, simple and affordable customer analyses.”

EHDA recently launched its first breakthrough product – Single Invoice Cover – which protects companies from non-payment by business customers. Cover is provided transaction by transaction while optimizing end-to-end supply chains and extending optimal credit terms to buyers. Based on a proprietary application program interface (API), it creates a seamless process for businesses, while facilitating a comprehensive and granular management of credit exposure.

RIAs Should Embrace Alternative Investments or Risk Client Attrition (WealthManagement.com), Rated: A

Before the emergence of crowdfunding-style investment platforms, it was hard for investors to reap the benefits of investing in a diversified portfolio of rental real estate. They can now, and you can show them how.

Wealth management is a “share of wallet” game. If you diversify your solutions, clients will end up with more diversified risk—and that’s the point.

Lending Club’s first securitization is a big deal (American Banker), Rated: A

Lending Club’s first securitization of its own consumer installment loans is an important step in rebuilding its business following a scandal last year over its corporate controls.

The company has been seeking to broaden its funding sources after concerns about the integrity of its data caused many investors to pause or scaled back their purchases. Lending Club originally acted purely as a matchmaker, connecting borrowers with lenders over its platform. It did not hold on to the loans.

Money in Cleveland tech-startup community begins to circulate (Cleveland.com), Rated: A

Splash Financial is a perfect example of this long journey.

Splash Financial completed a $3.3 million financing round in January of 2017 from several local angels and will become the newest entrant in the booming digital lending marketplace that includes LendingClub, OnDeck, SoFi and Cabbage.

The company is now working with banks to help build an efficient lending platform where a strong capital source (i.e. – the banks) do not have immediate access to the doctor marketplace.

1 in 5 Small Business Owners Would Give up a Vacation Day Rather Than Their Smartphone (Small Biz Trends), Rated: A

According to a recent survey of small business owners on their mobile device use by peer-to-peer lending marketplace Funding Circle, one in five (20.4 percent) small business owners said they would rather give up a vacation day than their smartphones for a week.

Funding Circle also found more than half (56 percent) of small business owners surveyed find their smartphone gives them the flexibility to work wherever and whenever they want, so they can make time for other passions.

Nearly half (49 percent) said their smartphone keeps them in closer contact with loved ones while away from home — via tools like text messages throughout the day and video calls while traveling for work.

Forty-four percent said having their smartphone helps them relax during vacation time because it gives them peace of mind to know if there’s a problem with the business at home, they are accessible.

Follow the yellow Laurel Road (Transform Magazine), Rated: A

National online lender Laurel Road, previously known as Darien Rowayton Bank Lending Division, is a division of the Connecticut-chartered Darien Rowayton Bank, which launched over a decade ago in 2006. Wishing to define its bank lending division as the first source of income advice and financial security for the state’s many university students, DRB turned to the New York office of international design agency Brand Union to create an identity and help carve out its unique path.

Laurel Road’s new strapline, also developed by Brand Union, is ‘Rewarding determination’ and acts with double meaning, being reminiscent of both the student’s educational motives and the lender’s financial role. It also serves to encourage its customers to pursue their college journey to its conclusion,

loanDepot: “The Momentum is Just Starting” (Crowdfund Insider), Rated: B

One of the most promising is loanDepot, the creation of CEO Anthony Hsieh, has become one of the top mortgage lenders in the US. Additionally, loanDepot has migrated into the personal loan space too challenging online consumer lenders like LendingClub.

RealtyShares Sources Debt For Seattle Student Housing Deal (Bisnow), Rated: B

RealtyShares, an online marketplace for real estate investing, has sourced $11.9M for the acquisition and partial recapitalization of a 10-property portfolio of student housing in Seattle.

3 Alternative Ways To Hedge Against A Market Downturn (NASDAQ), Rated: B

When approached correctly, peer-to-peer lending can be among the safest ways to invest right now.

The key to making it safe is to diversify across many loans. Diversification eliminates the risk of default because any single loan you invest in can default without sinking the entire investment.

I consider peer-to-peer lending via a reputable platform the safest way to invest right now while still earning respectable returns on your money.

United Kingdom

Zopa boss Janardana details plans for customer-centric bank (AltFi), Rated: AAA

Zopa aims to launch its bank next year with a series of products based on simple, flat pricing – and a direct challenge to the industry’s traditional strategy of milking their large “back books” of existing long-term customers who rarely switch or shop around.

Jaidev Janardana, Zopa’s chief executive confirmed in an exclusive interview that credit cards and auto-finance would be among the first products, and would charge a single rate for all customers, instead of ultra-low teaser offers that flip to high rates after a fixed term, catching borrowers who do not switch.

He pointed out that Zopa already follows this approach in its P2P lending with all investors receiving the same rate, and returns changing for everyone simultaneously. The company expects to apply to the Prudential Regulation Authority for its banking licence later this year.

Ranger Direct Lending Enters Arbitration Against Investee Princeton (London South East), Rated: AAA

Ranger Direct Lending Fund PLC said Monday it has entered arbitration proceedings against the parent company of investee firm Princeton Alternative Income Fund Ltd, following a provision taken over a loan portfolio.

Ranger said Monday it is now seeking to enforce redemption and provision of financial information rights against Princeton via the arbitration proceedings.

Lendy highlights gap between property prices and key influences (Bridging & Commercial), Rated: A

Lendy stated that residential property prices have risen by 20% since the start of 2014, however, the LPP, the new property market index, has only increased by 17% during the same period with the gap between them continuing to grow.

Fintech credit firm Quint posts record revenues (Express), Rated: A

FAST-growing UK fintech group Quint is forecasting a £50 million plus turnover this year after seeing a record 64 per cent rise in growth and revenues rise to £32 million.

The main drivers are the launch of its consumer credit comparison site MoneyGuru.com as well as strong growth in its lending platform Monevo and Monevo data services business.

Racefields to buy and sell debt from bridging lending market (Bridging & Commercial), Rated: A

Racefields is seeking to connect with bridging lenders who are interested in refinancing parts of their loan book after opening a trading room to buy and sell debt from the bridging market.

Blockchain raises $ 40 million from Lakestar and Google’s venture arm (Business Insider), Rated: A

Bitcoin and blockchain technology company Blockchain has raised $40 million (£31.5 million) in its second round of institutional funding.

European venture capital fund Lakestar and GV, Google’s venture capital arm, both led the round. Nokota Management and Digital Currency Group also took part in the investment, as did Blockchain’s existing investors Lightspeed Venture Partners, Mosaic Venture Partners, Prudence Holdings, Virgin, and Sir Richard Branson.

The Series B funding takes the total raised by Blockchain to $70 million (£55.2 million).

Why Sipps aren’t yet embracing P2P (MoneyWeek), Rated: A

Since April 2016, investors have been able to shield gains from peer-to-peer (P2P) lending from the taxman in the innovative finance Isas (IF Isas). And while it has taken a while for most P2P platforms to win the necessary approvals from HM Revenue & Customs and the Financial Conduct Authority (FCA) to offer IF Isas, these products are finally beginning to take off, with several launched since the start of the new tax year. However, the same can’t be said for P2P investments through self-invested personal pensions (Sipps).

Referral schemes: earn over £1,000 through family and friends (BT), Rated: B

People using peer-to-peer platform Funding Circle can net £50 if they recommend a friend or relative who goes on to lend at least £2,000. Normally, Zopa investors can earn up to £50 if the person they recommend lends £2,000 with the platform. They’ll receive £50 too. However, at the time of writing Zopa isn’t accepting any more investors due to high demand.

Elsewhere, Alliance Trust Savings will give existing customers a £50 Marks and Spencer voucher when they get a friend or family member to open an Investment Dealing Account, ISA or Select SIPP. Your friend will get £25 worth of vouchers, too.

Mutual Scottish Friendly is offering two £25 MyRewards card to their customers – that’s one for the customer and one for the person they recommend.

China

Internet majors, banks edge closer to fintech success (China Daily), Rated: AAA

China’s internet giants that forayed into online finance are now joining hands with banks, their perceived competitors, to succeed together in the booming financial technology or fintech sector.

The latest such partnership is between Tencent Holdings Ltd and Huaxia Bank Co Ltd, which was announced on Thursday.

Tencent’s peers, Baidu Inc and Alibaba Group Holding Ltd, which together comprise China’s “Tech Trinity”, are jostling for supremacy in the internet finance segment. The two already have partnerships or collaborations with the nation’s top lenders.

JD.com Inc, another e-commerce major, has also joined the fintech partnerships fray. It is working with ICBC, China’s largest bank by assets, on fintech, retail banking, loans for small and medium-sized enterprises, and consumer finance.

European Union

Ingenico ePayments Partners with French FinTech Company SlimPay on SEPA Direct Debit (EuroInvestor), Rated: A

Ingenico ePayments, the online and mobile commerce division of Ingenico Group, today announced that it has teamed up with French recurring payments specialist Slimpay to support a SEPA Direct Debit (SDD) solution the company is developing for online merchants to simply and securely create and manage the e-mandates required to process SDD payments. With the partnership, SlimPay joins a rapidly expanding ecosystem of exciting and innovative FinTech companies that work closely with Ingenico to jointly develop new solutions for online merchants.

International

Aegon Life insurance company explores e-commerce channels to sell policies (Financial Express), Rated: AAA

Private sector life insurer Aegon Life Insurance Company is exploring options to sell policies via fintech and e-commerce platforms. The company’s Chief Digital Officer Martijn de Jong said digital channel is to become the primary channel for the insurers to expand customer base.

The company’s first premium income grew by 30 per cent to Rs 10.40 crore during April-May period of the current fiscal, according to data available with Irdai. Aegon Life Insurance is a joint venture between global insurer Aegon and Bennett Coleman & Company (India).

Australia

Digital advice will bypass member apathy, embarrassment (Investment Magazine), Rated: A

Despite the tremendously importance of retirement planning to the long-term financial security of the working population, the majority of Australians tend to neglect their superannuation funds throughout most of their working lives.

For example, more than 50 per cent of Australians now retire on a date not of their choosing. In addition, research from global banking and financial services firm HSBC showed that a staggering 41 per cent of Australian pre-retirees do not receive any retirement advice.

Digital advice allows users to bypass any potential sensitivities they may feel when consulting a human adviser. Those who have limited knowledge about the basics of their own savings goals or liabilities may feel too embarrassed to talk to a professional and therefore switch off from engagement.

India

Fintech Startup Stashfin Raises $ 5 Mn Funding From Snow Leopard Ventures, Others (Inc42), Rated: A

Delhi-based fintech startup Stashfin has raised $5 Mn Pre-Series A funding from Snow Leopard Ventures and Singapore-based Alto Partners. Snow Leopard Ventures is the VC arm of the Kirloskar Group.

Stashfin is the parent company of digital lending platform, StashEasy. It was founded in February 2016 by Tushar Aggarwal.

Middle East

Machine learning is transforming lending (Khalee Times), Rated: AAA

In June 2015, the World Economic Forum published The Future of Financial Services – How disruptive innovations are reshaping the way financial services are structured, provisioned and consumed. The paper defined a taxonomy for disruption in financial services. It identified six broad areas and within them, 11 clusters of disruptive innovation.

The six areas are Payments, Market Provisioning, Investment Management, Insurance, Deposits & Lending and Capital Raising. Of the 11 clusters in the report, the combination of Alternative Lending and Shifting Customer Preference clusters are most relevant to today’s article. Within this combination, the Banking-as-Platform movement is playing a remarkable intermediary role in matching lenders and borrowers via a seamless, transparent, user-friendly standard API based model which leverages advances in processing power, artificial intelligence, user interfaces and design-thinking.

Traditional lenders, i.e. banks, usually find it difficult to match the agility and granular understanding that P2P Lending players have. Banks’ credit evaluation and origination platforms are often industrial-age processes with a large quantum of human intervention.

Canada

Billionaire Buffett throws lifeline to cash-starved Home Capital (Daily Mail), Rated: AAA

Berkshire Hathaway Inc’s commitment of a C$2 billion (US$1.51 billion) credit facility to Home Capital Group Inc, Canada’s largest nonbank lender, marks the billionaire’s latest effort to shore up a company in dire need of cash.

Home Capital shares soared as much as 18 percent, but was still more than two-thirds below the 2014 peak.

Berkshire also agreed through its Columbia Insurance unit to buy up to C$400 million (US$302 million) of Home Capital shares for a 38.4 percent stake, pending shareholder and regulatory approvals.

Home Capital has suffered a deposit exodus resembling a bank run since mid-April, when the Ontario Securities Commission accused it of deceiving investors.

Authors:

George Popescu
Allen Taylor

Monday June 19 2017, Daily News Digest

Lending Club default rates

News Comments Today’s main news: Finastra inks agreement with IBM. One number Elevate Credit shareholders are worried about. Zopa makes IFISA available to existing customers. Yirendai ready to include wealth management. Klarna wins Europe’s biggest fintech banking license. Today’s main analysis: Online lenders do a good job of identifying fraud. Today’s thought-provoking articles: Bloomberg report is critical of online […]

Lending Club default rates

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

Africa

News Summary

United States

One Number Elevate Credit Shareholders Are Worried About (The Motley Fool), Rated: AAA

Elevate Credit, Inc. (NYSE:ELVT) the newly public subprime fintech lender, delivered its first quarterly earnings report as a public company on May 8, and the results were impressive. Loan originations grew almost 40%, while revenue grew by a smaller 20%, due to the lowering of interest rates on Elevate’s high-rate loan products. Elevate’s IPO was unusual — most tech IPOs sport high growth rates but negative earnings. In the first quarter, Elevate actually delivered a net profit of $1.7 million. Adjusted EBITDA margin expanded to 16%, above the 10% margin posted in 2016 and the 4% in 2015.

The big blemish on the quarter was a high net charge-off rate  as a percentage of revenues. Net charge-offs measure the amount of principal and interest more than 60 days past due, minus recoveries from prior periods. That number shot up to 59% in the quarter, above the company’s target range of 45-55%,  and up 600 basis points year over year. While the company was still profitable, the $1.7 million in net earnings was down from $6 million in the year-ago quarter.

Management explained that the rise in loan loss provisions was partially related to a new credit score the company tested on lots of new customers at the end of 2016. As is the case with many financial companies, when new customers increase, there is often an initial uptick in defaults or loss ratios.

Bloomberg Report is Critical of Online Lenders (Crowdfund Insider), Rated: AAA

A report from Bloomberg this week takes certain online lending platforms to task regarding the fact that some online lenders are not verifying income status.  The report also says that even if there are errors in loan applications the loan may still be approved. More specifically, apparently Prosper does not verify income and employment in about a quarter of the loans. Lending Club is said to verify income in about one third of the loans.

Risk is always part of the investment equation and Orchard Platform perhaps provides the best perspective into affiliated risk of investing in loans originated online.

Online Lenders are doing a good job of identifying the frauds (even without hard income verification) (Croudify), Rated: AAA

Recently there was an article in Bloomberg (Article Link) that talked about how online lenders are not always verifying the basic borrower information like Income.

We at Croudify have been analyzing the loan data for more than 2 years and wanted to shed some light on the article and show that while the headline is true the devil is in the details and actually the platforms have been doing a very good job in identifying the fraud.

Once we had concluded that the non-verified loans are not growing as percent of population the logical next step was to check if these loans are performing worse than before. Is there a possibility that the loans without income verification have deteriorated over time and hence the red flag.

This points to a very important finding that the preliminary indicators that Lending Club is using in identifying the fraudulent behavior is not only working it is working great and is providing a performance lift to loans.

Pricey ‘fintech’ lenders put the squeeze on cash-strapped small businesses (L.A. Times), Rated: A

So Newman, 61, turned instead to an online lending company called OnDeck. After submitting a handful of bank statements, he was quickly approved for a $65,000 loan, which allowed Newman to cover his wine shipments and keep his business running.

“These loans are predatory by nature,” he told me. Think payday loans for small businesses, he said, with interest rates well over 30%.

And there’s something to that. Loans with a higher degree of risk would naturally come with higher interest rates. The question is whether such loans are being marketed honestly and fairly, and whether customers are able to make informed decisions about financial obligations.

Fairness in lending means clear and straightforward disclosure of terms and conditions. On that score, OnDeck seems to come up short.

For example, the company’s website boasts that term loans of up to $500,000 can be obtained with annual interest rates as low as 5.99%. Newman said that when he contacted OnDeck, he was hoping to get a loan at such a rate. But it didn’t work out that way.

What he got was a 12-month, $65,000 loan, plus nearly $17,500 in interest and an origination fee of $1,625. That translated to an annual percentage rate of 55%.

In fact, OnDeck told me its average annual interest rate for term loans, excluding fees, is 38%. If that’s the case, I asked why the rate most prominently displayed on their website is 5.99%.

China Merchants Bank is considered the largest industry player currently, but still its assets under management in its private banking division are worth just 1.66 trillion yuan.

Assessing the future of the financial advice industry (InvestmentNews), Rated: A

First: There will be fewer advisers, possibly many fewer. The trend line points down, and there’s nothing in the three- to five-year outlook to change that.

The future leaders of this profession see advisers serving far more clients with a greater assist from technology, as well as more reliance on outsourcing.

But those requiring expert financial advice will undoubtedly seek a more complete look at all areas where money touches their lives — and how those areas intersect. Who will need it most? A large population that isn’t necessarily today’s prime prospect pool, at least for advisers paid based on a percentage of assets: the HENRYs (high-earner, not rich yet). As investment advisers move beyond mere investments, and the field becomes a profession, compensation surely will evolve to ensure those who most need advice can get it and those giving advice can still run a profitable business.

In financial advice this will take the form of a planning quarterback who strategizes the entire financial game plan and keeps clients on track largely through automated accountability programs.

If you find this hard to believe, just wait until Google or Amazon moves full throttle into the asset management business.

Offer B2B Fintech Solutions To Help Clients Grow Their Sales (Forbes), Rated: A

In April, 2017, Pew Charitable Trusts published the results of a national survey of payday loan borrowers. The top three responses to what is most important to these borrowers in choosing where to get a payday loan were:

  • 76% – How quickly they can get the money
  • 74% – The fee charged
  • 73% – The certainty that they would be approved for the loan

The survey reveals other important consumer attitudes about payday loans. Most respondents believe that there should be more regulation of lenders, and lower interest charges. They would also prefer almost any other borrowing option or loan type to the payday solution.

Chuck Wait Tire, located in the small rural community of Mowrystown, Ohio, had never cleared more than $100,000 in monthly revenue, until they implemented Acima. The next month, they not only beat the $100,000 threshold, they killed it with a 33% monthly increase in sales from $90,000 to $120,000.

Podcast 105: Robert Morgan of the American Bankers Association (Lend Academy), Rated: A

In this podcast you will learn:

  • The core purpose of the ABA.
  • What is in the ABA Fintech Playbook and why they published it.
  • How the bank of  the future will be different to today.
  • How the ABA select their Endorsed Solutions providers.
  • The attitude of banks today regarding partnering with fintech platforms.
  • How large banks differ to small banks when it comes to partnering.
  • The needs of banks today when it comes to new technologies.
  • The official stance of the ABA on the OCC Fintech Charter.
  • The ABA’s view on the data sharing initiatives taking hold in Europe.
  • How banks, data aggregators and fintech companies are working together on data sharing.
  • How open banking could work in a similar way to Facebook logins.
  • Some of the other new technologies that are on Rob’s radar.
  • How banks of the future will be similar to banks of today.

ArborCrowd Now Offering $ 69.7 Million Commercial Real Estate Deal to Investors in Miami (Crowdfund Insider), Rated: B

Online commercial real estate company ArborCrowd announced on Thursday it is now offering a new $69.7 million commercial real estate deal to investors. The Lago Paradiso property is described as a multifamily complex located in Miami, Florida. 

According to ArborCrowd, investors now have the opportunity to own a piece of a $4 million stake in Lago Paradiso. The property now has a targeted 13 percent to 17 percent Internal Rate of Return (IRR) and a projected hold period of four to seven years.

United Kingdom

Zopa Announcement: IFISA Is Now Available to Existing Customers (Crowdfund Insider), Rated: AAA

Zopa announced on Thursday its IFISA is now available for all existing Zopa customers. Along with the IFISA, the online lender unveiled its latest peer-to-peer investment product, Zopa Core.

Zopa then explained that the Zopa Core product has a target return of 3.9% and by December will replace its products, Access and Classic, without Safeguard coverage. IFISA and Zopa Core features include:

Funding Circle SME Income fund holds steady on dividend (AltFi), Rated: AAA

The £406m Funding Circle SME Income fund has paid out its fifth dividend, the fourth consecutive quarter at the same 1.625p level, holding pay-outs in line with targets.

OFF3R Wants to Become “Money Supermarket” (Crowdfund Insider), Rated: A

At last count OFF3R hosts offers from 36 different UK platforms. Today in a report on P2PFinanceNews, OFF3R is revealing it is raising £5 million to become the “Money Supermarket” for investments. Essentially OFF3R wants to integrate today’s alternative investments with yesterday’s more traditional types.

Fiserv to buy UK mobile payments pioneer Monitise for 70 million pounds (Reuters), Rated: A

U.S. financial technology provider Fiserv said on Tuesday it had agreed to buy British financial services technology firm Monitise Plc for about 70 million pounds ($88.72 million).

AIM-listed Monetise, worth about 2 billion pounds at its peak in early 2014, blazed a trail by linking banks and mobile operators to build a business capable of handling billions of dollars in mobile payments, purchases and money transfers.

The SME’s guide to P2P (P2P Finance News), Rated: A

“The key thing is making sure that you’re looking for the right type of finance,” explains Paul Marston, managing director of commercial finance at peer-to-peer lending platform RateSetter.

A survey by the British Business Bank for 2015/16 found that 100,00 small businesses were rejected for loans by mainstream lenders – equating to £4bn of potential finance.

“If you’re an SME and go to the bank for an unsecured loan, there’s a cap of around £50,000, whereas Funding Circle will offer up to £350,000.

Funding Circle explains that it offers four key benefits for SME borrowers: speed, flexibility, efficiency and transparency.

As P2P platforms are purely online, busy business owners can apply for finance outside of working hours. “More than 50 per cent of loan applications are made outside of working hours, when a bank branch would be closed,” says Funding Circle.

While criteria varies from platform to platform, P2P loans are often more suitable for businesses that are slightly more established. For example, RateSetter offers loans to businesses that have been trading for at least three years and has at least two years of either audited accounts or formally prepared management accounts. And Funding Circle only lends to businesses that have been trading for more than two years, have a turnover of more than £50,000 and are a UK limited company.

However, there are still options for start-ups. Crowd2Fund has recently launched a ‘venture debt’ product which enables early-stage companies that are not cash-flow positive to access debt finance. Crowd2Fund argues that this can be simpler than raising equity and enables founders to keep control of their company.

Funding Xchange claims that a business using its platform can expect an average saving of £2,000 by comparing pricing from multiple providers – representing 10 per cent of the value of the average loan.

LendInvest hires second Northern BDM (Financial Reporter), Rated: B

LendInvest has appointed its second BDM for Northern England to satisfy growing demand in the region.

Sophie Mitchell-Charman joins the team from Mint where she worked as a Bridging BDM. Based in York, she will travel extensively throughout northern England, with a particular focus on deals in the North East.

China

P2P platform Yirendai ready to move up a financial league or two, including into wealth management (SCMP), Rated: AAA

Yirendai, China’s largest peer-to-peer lending platform, is looking to raise its profile even higher, with an expanded product offering, the company’s chief executive Fang Yihan has told the South China Morning Post, shrugging off any worries about a regulation-induced slowdown in the industry.

New rules governing the industry will come into force in August, and according to available drafts, these will impose a limit of 200 000 yuan (US$29,400) on lending to individual borrowers, require the lenders to carry out stricter background checks on all clients, and establish strong contractual relations with custodian banks.

Double digit returns for investors were commonplace last year, but will become harder to find.

But with its scale, larger players such as Yirendai that will be the most likely to gain a competitive advantage from the tighter rules.

China’s retail wealth management market was worth 120 trillion yuan last year, according to a report by Boston Consulting Group, which expects growth of 12 per cent annually for the next five years.

China Merchants Bank is considered the largest industry player currently, but still its assets under management in its private banking division are worth just 1.66 trillion yuan.

Yirendai is also experimenting with allowing partners to sell services other lending services via its platforms.

Yirendai Recognized as Best P2P Lending Platform in China at the Future of Finance Summit (IT Business Net), Rated: A

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading online consumer finance marketplace in China, today announced that it was awarded the Best P2P Lending Platform in China Award at The Future of Finance Summit (the “Summit”) held in Singapore on June 8-9, 2017. Yirendai is the first FinTech company in China to receive this prestigious reward.

China’s P2P Lending business volume of May reached to $ 53billion, keeping another new record. (Xing Ping She Email), Rated: A

According to a latest monthly report issued by P2P001.com, the total volume of P2P lending in China hit a new record to $53billion on May, with the month-on-month growth of 11.32%.

On May, the average annual interest rate for P2P loans was 8.34%, which has been slowly rising for three months in a row. However, the financial “deleveraging” and tighter monetary policy are still undergoing, it is unlikely that P2P lending rates will continue to rise.

By the end of May, the accumulated P2P loan balance in China has reached to $213billion, with the month-on-month growth of 6.72%. Among them, the loans outstanding on P2P loans of more than $29,850 reached to $152 billion, accounting for 71.46% of the total; the loans outstanding on P2P loans of more than $149,253 reached to $101billion, accounting for 47.43%.

In addition, there are 672 P2P lending institutions assigned depository agreement with banks up to the late May, involving 59 banks and 28 provincial and municipal lending platforms, and 286 of them have been already launched online.

China Banking Regulatory Commission issued a standard campus loan requirements (01Caijing), Rated: A

Recently, the China Banking Regulatory Commission, the Ministry of Education, Ministry of Human Resources and Social Security issued the Notice on Further Strengthening the Management of Campus Credit.

It is pointed out that commercial banks and policy banks should provide customized products for college students, training, consumption and entrepreneurship under the premise of risk control while strengthening the rectification of campus loan problems. And the standardization of financial services, together set the credit line and interest rates.

Beijing and Shenzhen drive Chinese fintech (Deal Street Asia), Rated: A

Ning Tang, CEO and founder of Chinese fintech major Creditease, believes that the current landscape will require players in the finance sector to evolve their approach amid a highly disruptive technology landscape with substantial opportunity.

What’re the assets under management and the role of the Singapore office?

Every year we help clients deploy over $100 billion of capital and the idea of coming to Singapore in 2014 was that this city was one of the bases for our internationalisation strategy.

You’ve got different entrepreneurial hubs in China – Hangzhou, Shanghai, Hong Kong, Beijing – which is the fintech capital of China? 

I’d like to say Beijing because that’s Creditease’s base. But in terms of technology innovation, not just in financial services, I think Beijing and Shenzhen are the leading cities, while some say Hangzhou as well.

Why do so many Chinese firms want to list in New York when Chinese entrepreneurs have access to very liquid stock markets in cities like Shanghai, Shenzhen and Hong Kong? 

In our experience, the US capital markets are more advanced in terms of welcoming innovative business models and companies at the growth stage despite being a pre-profit stock.

Recently, Beijing has been implementing capital controls and kerbing capital outflows from China. How has this affected Creditease’s business?  

We’re largely unaffected by these controls, as many of our wealth management clients have assets outside of China, and we help them manage those. However, with our Creditease Fintech Investment Fund,  we had some of our partners who were able to invest overseas.

There’s been a lot of movement in the Bitcoin and Ethereum markets. What’s the view of Creditease on digital currencies as an asset class and its use in marketplace lending? 

We remain interested but it’s too early at this stage. The regulatory framework and security issues around such models…I think we’d like to see more things get worked out before this asset class becomes appealing to our investor base. We help our investors do asset allocation and any asset class going into the portfolio should be a major asset class. Otherwise, it’s quite speculative and not helpful to our investors

Looking at the future of fintech in China, you have Beijing where the regulators are based. With all these centres like Shenzhen, Hangzhou, Beijing, Shanghai and Hong Kong, what is the future of all these different ecosystems? 

Quite interestingly, you’re talking about cities. I’m thinking about nations.

So different cities and nations have to assess the unique attributes they work and work on refining and enhancing those. I’m quite hopeful that Beijing will continue to be the fintech hub and with Creditease, we’ve got a presence in various places like Israel, Singapore, New York and Hong Kong, so we can access this innovation everywhere!

China: WeiyangX Fintech Review (Crowdfund Insider), Rated: B

As the plan summaries, from 2011 to 2015, over 96 regulations and guidelines for the financial sector have been issued. In the next five years, another 110 regulatory updates or new regulations or guidelines will be released.

Alibaba Group Holding Limited hosted an Investor Day on June 8-9 at Alibaba Xixi Headquarters. Speakers included Jack Ma (Executive Chairman), Daniel Zhang (CEO) and other members of the senior management team.

To safeguard the interests and property rights of college students and maintain financial stability for P2P online lending market, China Banking Regulatory Commission (CBRC), Ministry of Education and Ministry of Human Resources and Social Security have jointly issued a paper to regulate the student loans market. The paper encourages commercial banks and policy banks to develop student loans business and provide standardized financial services to college students.

Ant Financial’s virtual credit card service Ant Check Later (also known as “Huabei” in Mandarin) is eyeing to link up to 4 million online and offline merchants to help them grow businesses and attract consumers who have little access to physical credit cards.

At present, third party payment service license has become an essential equipment for any Chinese company who wants to expand into financial services. On June 7, GOME Finance announced to acquire a payment service company Easy Bonus Card. GOME Finance paid up to CNY 720 million, mainly for the license, which could make the company complement the payment capabilities and accelerate the process of technological innovation.

European Union

Sweden’s Klarna wins Europe’s biggest fintech banking licence (Financial Times), Rated: AAA

Klarna has become the largest European fintech company to get a banking licence, with the Swedish group saying it wants to become the Ryanair of the sector, attacking lenders across the continent.

Valued at more than $2bn, Klarna has already captured much of the market for online payments in the Nordics and Germany, and on Monday received a banking licence from the Swedish Financial Supervisory Authority 20 months after filing for one.

The Swedish group – which had revenues of SKr3.6bn last year and was valued at $2.25bn in a fundraising in 2015 – is looking at offering customers across Europe services such as bank cards and salary accounts as well as eyeing the US for future expansion.

Crowdfunding Platform BrickVest Makes First Exit At 31% Return (Bisnow), Rated: A

BrickVest, the real estate investment crowdfunding platform, has announced that some of its investors have exited an investment for the first time, at a sizzling return.

BrickVest, the real estate investment crowdfunding platform, has announced that some of its investors have exited an investment for the first time, at a sizzling return.

The BrickVest fund invested in a portfolio of 23 retail assets in a joint venture alongside Corestate Capital.

Russian Fintech And Their Fight Against Geopolitics (Forbes), Rated: A

According to EY’s Fintech Adoption Index report last year, although Russian online adoption is lower in comparison to major financial centers like London, New York or Hong Kong, the market in this area is growing at a rapid rate. Online payments and money transfers are booming Russia, as are Moscow and St Petersburg are becoming hubs for this form of technology.

David Waroquier, Partner at Mangrove Capital Partners also highlighted that access to funding in Russia is more limited. ‘This means Russian fintech companies must have a tighter control on costs and be very efficient operationally.’

As said before, one of the trends that has exploded in Russia is mobile payments, as the EY report states that 57.6% of Russians used this service in comparison to the 17.6% globally. There are currently 56 million online mobile users over 16 in the country and according to Gfk, 53% of online users in Russia made at least one mobile payment in the last 6 months, as Dunaev said.

European Crowdfunding Network Launches Survey on Cross-border Crowdfunding & Online Lending (Crowdfund Insider), Rated: A

The European Crowdfunding Network (ECN) has launched a survey dedicated to addressing the challenges of cross border transactions in the investment space. More specifically, the ECN is seeking input on cross border crowdfunding and online lending, including peer to peer / marketplace lending.

The ECN explains:

We will focus solely on crowdfunding models that entail a financial return, notably:

  • Investment-based crowdfunding (where companies issue equity or debt instruments to crowd-investors through a platform) and
  • Lending-based crowdfunding (where companies or individuals seek to obtain funds from the public through platforms in the form of a loan agreement)

The survey is available here. 

International

Newly Formed Finastra Signs Agreement with IBM on Banking Technology, Fintech (Crowdfund Insider), Rated: AAA

Finastra, created by the merging of Misys and D+H, and IBM (NYSE: IBM) have reached an agreement to explore how Finastra can transform their banking operations with IBM Cloud and Cognitive technologies. The two companies plan to bring IBM technology into the Finastra open architecture to enrich the digital retail banking experience and bring new innovations to market.

WorldRemit adds Android Pay as secure option for migrant remittances (Reuters), Rated: A

Cross-border money transfer service WorldRemit is enabling its immigrant customer base to send money home using Android Pay, making it the first international remittance firm to run on the Google payments system, the company said on Tuesday.

Connecting with Android Pay will enable WorldRemit customers in developed markets like Europe or North America to make instant international money transfers to reach the 112 million accounts available via WorldRemit’s network of payment channels.

London-based WorldRemit says it handles about three-quarters of mobile phone-based international money transfers, a small but fast-growing segment of the global $575 billion worldwide remittance market. Recipients using WorldRemit can up pick cash or deposit money in banks or mobile money accounts or top up mobile accounts.

Traydstream launches fintech solution for paperless trade (Global Trade Review), Rated: B

New fintech player, Traydstream, has launched a solution to digitalise trade documents and automate regulatory compliance screening using artificial intelligence.

In short, Traydstream’s new solution digitalises the whole trade transaction – from invoice to Swift – and is targeted at banks as well as corporates.

Australia

Big banks and fintech start-ups face up to Jack Ma’s mobile payments juggernaut Ant Financial (abc.net.au), Rated: A

While Ant Financial says it wants to work with our banks, not against them, some are warning disruption from a global digital giant is inevitable, even if it doesn’t come from China.

Former Challenger exec Paul Rogan makes robo-advice play (Australian Financial Review), Rated: A

Paul Rogan, the former chief executive of distribution, marketing and research who stepped out of the role in February after 12 years at Australia’s largest annuities providers, is now readying to launch Retirement Essentials, an online platform that educates and assists those who are already in retirement on how to manage their money.

Mr Rogan has invested an undisclosed sum in SuperEd, the the robo-adviser co-founded in 2012 by Vanguard Australia founder Jeremy Duffield and Westpac executive and technology entrepreneur Hugh Morrow.

India

Wadhawans opens UK unit, buys stake in Zopa (India Times), Rated: AAA

Wadhawan Global Capital (WGC), which owns 38% of DHFL and is the controlling lever for the group’s financial businesses, has set up a London unit that opened its account through undisclosed -but sizeable-investments in 12-year-old Zopa.

What the future holds for the P2P lending market in India and the world (My Big Plunge), Rated: A

While the overall internet-based alternative finance industry registered transactions worth more than $57 million between 2013 and 2015, online peer-to-peer or marketplace lending saw loans with a cumulative value of over $2 million disbursed during the same period. The total loan value in the corresponding two years has grown by around $2 million, with an estimated $4.5 million worth of loans disbursed through online peer-to-peer lending platforms by the end of 2016.

But even as industry projections predict the market for peer-to-peer loans to be worth $4-5 billion by the end of 2023, this promising segment is still a long way off from achieving its true potential as a highly viable alternative investment class.

The launch of India’s Digital Stack that includes Aadhar, eKYC and digital payments is paving the way for the country’s shift towards a cashless economy.

The year 2017 is expected to be the year of financial technology, with alternative lending and investment products like peer-to-peer lending set to be driving forces for the latest iteration of the fintech revolution in India.

Faircent.com, for example, has consistently delivered net returns upwards of 18% per annum to its majority of lenders.

Asia

InvestaCrowd Updates on Real Estate Crowdfunding in Asia (Crowdfund Insider), Rated: A

About a year ago, Crowdfund Insider connected with Julian Kwan, CEO and co-founder of Investacrowd, a real estate crowdfunding platform that was established in Singapore. Kwan was born in Australia but has spent the last 17 years in Asia – most recently Singapore. Having founded multiple companies, Kwan is a longtime real estate investor, developer, and manager.  InvestaCrowd was envisioned as a vehicle to provide access to real estate investments in select markets like New York City, Sydney or London.  As with many real estate platforms, by using technology much of the process may be completed online.

A report by Cushman & Wakefield from earlier this year highlighted this fact. In a publication, Cushman & Wakefield explained;

“Compared to other countries, China ranked No. 1 among foreign investors in commercial real estate within the U.S. in 2016. China inbound investment deal volumes have grown rapidly, reaching $19.2 billion USD in 2016, a record high. Sixty-two percent of the investments, which equated to $11.9 billion USD, were deals over $1 billion USD. The five largest Chinese investment transactions were among the top ten largest transactions in the U.S. in 2016.”

Kwan told us InvestaCrowd was in the process of obtaining a capital markets license from the Monetary Authority of Singapore (MAS) – now a requirement.

But current investors are turning into repeat investors. InvestaCrowd does not focus on Southeast Asian real estate which brings better quality deals but adds a different challenge to the mix. While he likes the Singapore market it is in a bit of a pause. On the other side, he is very cautious on deals in countries like Vietnam, Indonesia or China – a country where he spent many years in the real estate sector.

Kwan said they are looking to set up a line of credit too, so as to be able to pre-fund deals.

Meet Anna Haotanto, The Fintech Queen of Singapore (IB Times), Rated: A

Singapore is one of the leading hotspots for financial tech thanks to flexible regulation plus national initiatives to fund startups and integrate blockchain innovation into the local economy. American venture capitalists at the Ethereal Summit in New York praised Singapore as a ripe market, teeming with collaboration between entrepreneurs, regulators, banks and investors. The small island nation wants more than a high-tech economy: Singapore aims to become a global fintech hub.

Haotanto is a self-made millionaire determined to make fintech more accessible for Asian women. Her online media startup, the New Savvy, targets women investors by providing 30,000 Asian subscribers with finance and career guidance. This is no ordinary women’s publication. Forbes reported her team partners with the Monetary Authority of Singapore, the Singapore Exchange (SGX) and Far East Organization to produce pragmatic content.

So her company organized the Future Is Female conference in April, along with SGX, attended by 250 women.

Africa

P2P Cash Launches Money Transfer Service to Nigeria With No Transfer Fees (Press Release Rocket), Rated: A

P2P Cash, a Georgia-based digital financial services company, has opened a new money transfer service from the US states of Georgia and South Carolina to Nigeria. P2P Cash now offers cross-border money transfers at competitive exchange rates without any transfer fees. Nigerians and Nigerian-Americans in Georgia and South Carolina can find this new service at . Customers may also download the mobile app from the Google Play or Apple Stores.

P2P Cash’s aggressive no-fee pricing position is possible because of its proprietary Smart Token technology and global disbursement network.

Authors:

George Popescu
Allen Taylor