Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

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china p2p lending

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News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Friday February 16 2018, Daily News Digest

    Amazon small business lending

    News Comments Today’s main news: Amazon partners with Bank of America on lending. Roostify raises $25M for expansion. Lendy’s pretax profits hit 3.3M GBP. Lendix to enter Dutch, German markets. Revolut to launch banking app in APAC. Vested backs Dojo. Today’s main analysis: Important barriers to alternative investing digitization. Today’s thought-provoking articles: Americans can’t get enough consumer debt. Who are Britain’s […]

    Amazon small business lending

    News Comments

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    News Summary

    United States

    Amazon has partnered with Bank of America for its lending program (CNBC), Rated: AAA

    CNBC has learned that Amazon Lending, which launched in 2011, ultimately found a partner in Bank of America Merrill Lynch, according to people familiar with the matter who asked not to be named because the alliance is confidential. Partnering with Bank of America allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory.

    Amazon Lending is an invitation-only program that makes loans of $1,000 to $750,000, with terms of up to a year, for companies that may have difficulty landing traditional business loans. In June 2017, Amazon said it issued more than $1 billion in loans during the previous 12-month period, compared to $1.5 billion in combined loans for the four years prior to that.

    Scaling back

    But even with the Bank of America deal, Amazon Lending has been tapping the brakes on growth of late. After almost doubling to $661 million in 2016, outstanding loans just barely increased last year to $692 million, according to Amazon’s annual report earlier this month.

    Source: CNBC

    These 10 MBA Programs Will Earn You the Highest Salary, According to SoFi (Levo), Rated: A

    According to SoFi, the student loan refinancing company, “No BS” Return on Education 2018 MBA rankings, these are the best schools for earning back your money.

    With Americans owing more than $1.48 trillion in student loan debt,  (which is $620 billion more than the total U.S. credit card debt) knowing which schools are going to help you pay off your debt faster, is something you should consider if you are looking at business school programs.

    Source: Levo

    Roostify Closes $ 25 Million Series B To Fund Expansion (VentureBeat), Rated: AAA

    Roostify, a digital lending platform provider, today announced the completion of a $25 million Series B round of financing. The round included new investments from Cota Capital, Point72 Ventures, and Santander Innoventures, the venture capital arm of Banco Santander, as well as additional funding from previous investors JPMorgan Chase, Colchis Capital, and a subsidiary of USAA. The new funds will power the company’s ambitious growth goals, including a deeper presence in the enterprise space, rich product enhancements, and expansion into new markets.

    Abode Aims to Make Home Buying and Selling Easier (Chicago Inno), Rated: A

    In 2016, Kyle Stoner and best friend Carson Junginger were both having a hard time navigating the home-buying process. Between finding a realtor, finding a property and securing a mortgage, the two tech entrepreneurs realized that buying a home was too cumbersome and fragmented. And when they couldn’t find a single platform where they could manage all these separate tasks, they teamed up to create one — Abode.

    SoFi named Abode in its 2018 class of SoFi Entrepreneurs, the fourth cohort of startups which will receive mentorship and funding from the alternative lending startup, but Stoner declined to comment on whether SoFi is officially partnering with Abode in the future. Stoner said Abode is rolling out a new consumer product in March 2018, but declined to give further details.

    Americans Can’t Get Enough Consumer Debt (WSJ), Rated: AAA

    If anything, consumers are borrowing more on credit cards or through auto loans than they have in years, and lenders seeking growth are happy to oblige them.

    In the fourth quarter, consumer debt, excluding mortgages and other home loans, rose 5.5% from a year earlier to $3.82 trillion. That is the highest amount since the Federal Reserve Bank of New York began tracking the data in 1999. Moreover, consumers’ non-housing debts accounted for just over 29% of their overall debt load, also the highest amount on record.

    Overall, households are paying about 5.8% of their disposable personal income to stay current on their nonmortgage debts, according to third-quarter Federal Reserve data. This figure, which is at the highest level since the end of 2008, bottomed out at 4.9% in 2012.


    URGENT VS. IMPORTANT: BARRIERS TO DIGITIZATION IN ALTERNATIVE INVESTING (All About Alpha), Rated: AAA

    KPMG International and CREATE-Research have jointly prepared a report about the digitization imperative for alternative investment management.

    Early on, its authors list eight key digital innovations that are reconstructing the industry:

    Application programming interfaces; cognitive technology and machine learning; Big Data; blockchain; new digital platforms; robo-advisors; robotic process automation; and social media.

    To that end they have talked to 125 alternative managers located in 19 countries, with combined assets under management of $2.6 trillion.

    A Need to Future Proof

    They found that the scale of the ongoing shake-up is well understood. Only 2% of respondents saw a “business as usual” scenario playing out over the next 10 years. Roughly one-third (35%) expect marginal changes. But 53% anticipate “partial” disruption and the remaining 10% anticipate “total” disruption.

    Can small-dollar loans be both profitable and safe? (American Banker), Rated: A

    Is now the time when U.S. banks, credit unions and their regulators finally see eye to eye on small-dollar loans to consumers who have checkered credit histories?

    A long-running stalemate between the industry and its overseers has ceded much of the subprime consumer market to payday lenders, pawn shops and other high-cost lenders. But in recent months, banks started to get some insight from Washington about what type of product would be deemed acceptable.

    Citi, PNC invest in B-to-B payments fintech (American Banker), Rated: A

    In the latest example, Citi Ventures and PNC on Wednesday announced a strategic investment in the fintech firm HighRadius, which makes business-to-business payments and receivables software. Terms of the investment were not disclosed. HighRadius has an existing partnership with Bank of America on an accounts receivables platform, and also counts as clients Fortune 500 companies such as Walmart, Johnson & Johnson, Procter & Gamble and Starbucks.

    U.S. Bancorp hit with $ 613M in penalties linked to payday lender Scott Tucker (USA Today), Rated: A

    U.S. Bancorp, the parent of U.S. Bank, agreed to the criminal and civil penalties in settlements announced by the Manhattan U.S. Attorneys Office in New York, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Crimes Enforcement Network.

    From 2009 until 2014, U.S.Bank set an artificial cap on the number of alerts generated by its customer transaction monitoring systems, authorities said. The Minneapolis-based bank based the number of alerts on low staffing levels, rather than on the level of risk in the transactions.

    The lax oversight aided Tucker, a longtime U.S. Bank customer who was sentenced to more than 16 years in prison last month for running an illegal $3.5 billion Internet-based payday lending scheme that victimized thousands of consumers with loan interest rates as high as 1,000%.

     

    Fluid Market Launches Truck Sharing Marketplace (Business Insider), Rated: A

    Fluid Market, a neighborhood truck sharing application that allows people to rent trucks seamlessly from one another, today announced the nationwide launch of its truck-sharing marketplace, providing a seamless and on-demand utility vehicle rental experience to its peer-to-peer network of users and lenders across the country.

    Finalists for the LendIt Fintech Industry Awards 2018 Announced (Crowdfund Insider), Rated: A

    Fintech Innovator of the Year

    • Affirm
    • Varo Money
    • Better Mortgage
    • Upstart
    • Plaid
    • Circle
    • loanDepot

    Top Consumer Lending Platform

    • LendingClub
    • Zopa
    • Marlette Funding
    • Marcus by Goldman Sachs
    • LightStream
    • Yirendai

    Top Small Business Lending Platform

    • Kabbage
    • Funding Circle
    • BlueVine
    • Mirador
    • Credibly
    • StreetShares

    Top Real Estate Lending Platform

    • Sharestates
    • LendInvest
    • LendingHome
    • PeerStreet
    • LendingOne
    • Fundrise

    Emerging Lending Platform

    • Upgrade Inc.
    • Better Mortgage
    • ETHLend
    • Neat Capital
    • Nexoos
    • LendingUSA

    Excellence in Financial Inclusion

    • Kreditech
    • LendUp
    • LenddoEFL
    • Oportun
    • China Rapid Finance
    • Elevate Credit

    Most Promising Partnership

    • Katipult + Polymath Inc
    • Macquarie + PeerIQ
    • Lending Club + Opportunity Fund
    • Intrinio + QUODD
    • Financeit + Goldman Sachs
    • Minna Technologies + Swedbank

    Most Successful Cross-Border Partnership

    • Kabbage + ING
    • Kreditech + PayU
    • PayJoy + Macrocel
    • nCino + OakNorth
    • Kasisto + DBS Bank
    • Phoenix Finance + Saxo Bank

    Most Innovative Bank

    • BankMobile
    • Cross River Bank
    • Laurel Road
    • CBW Bank
    • Marcus by Goldman Sachs
    • HSBC

    International Innovator of the Year

    • UP Financial
    • LexinFintech
    • Afluenta
    • Phoenix Finance
    • IrisGuard
    • Borrowell

    Top Enterprise Technology Company

    • Salesforce
    • Roostify
    • Blend
    • ThreatMetrix
    • Mambu
    • CUneXus

    Top Emerging Technology Company

    • Nav
    • Ingo Money
    • Nova Credit Inc.
    • MoneyLion
    • dv01
    • Emailage

    Most Innovative Mobile Technology

    • PayJoy
    • Clarity Money
    • AutoGravity
    • Dave.com
    • Blinker
    • Juvo

    Top Investment Bank in Fintech

    • Macquarie
    • Marlin & Associates
    • FT Partners

    See the full list here.

    Macquarie looks to broaden US ABS footprint (Global Capital), Rate: B

    Macquarie Group is seeking to hire a US ABS director for its credit markets team as it looks to grow its presence in US esoteric ABS sectors, including whole business, marketplace lending and renewable energy finance.

    Small nonbanks call for clearer exemption from CFPB audits (American Banker), Rated: A

    Nonbank mortgage firms are seeking formal assurance from the Consumer Financial Protection Bureau that they will not become subject to surprise audits or enforcement without involvement of a state regulator.

    In a joint letter to acting CFPB Director Mick Mulvaney, the Community Home Lenders Association and the Community Mortgage Lenders of America said the agency should practice “streamlined supervision” of smaller nonbanks, which is consistent with the Dodd-Frank Act.

     

    Business Innovation Could Accelerate Under a Friendlier CFPB, LeClairRyan Attorney Says (Business Insider), Rated: B

    Recent moves by the federal Consumer Financial Protection Bureau (CFPB) could signal a friendlier approach to businesses, according to Jay Spruill, a partner in LeClairRyan’s Richmond office and leader of the national law firm’s Marketplace Funding Team.

    “The Payday Loan Rule has been heavily criticized by the small loan industry which says the rule will restrict consumers’ access to credit,” Spruill notes in the blog, CFPB Signals Retreat from Aggressive Regulation. The post appears in Marketplace Shift, which focuses on the impact of legal and regulatory developments on financial innovation.

    United Kingdom

    P2P Lender Lendy Releases Financial Results: Pretax Profits Rise to £3.3 Million (Crowdfund Insider), Rated: AAA

    Peer to peer lending platform Lendy has released its audited accounts for 2016, showing profits before tax rising to £3.3 million compared to £53,000 in 2015. The company reports that since launch in 2012, Lendy has originated over £376 million in secured loans generating £36 million in interest for investors. Approximately £141.5 million in principle has been repayed with current outstanding loans at £186.5 million.

     

    The digital upstarts taking on Britain’s dominant few banks (The Economist), Rated: AAA

    For some British millennials, Monzo is as close to a cult as a bank can be. Its coral-pink cards are hard to miss. “People in bars will get very excited if they see you are a fellow Monzo user,” says Mr Matthews, who is 29.

    Counting the British arm of Santander, Spain’s largest bank takes the share to over 80%. In 2015 Britons had 70m-odd active current accounts. They paid £500 ($750) or more into 70% of them every month.

    Supervisors have licensed more than 30 entrants since 2013. But by no means are all the challengers young. One of them, CYBG, owns Clydesdale, a Scottish bank that turns 180 this year, and Yorkshire Bank, aged 159. It has about 1.8m personal current-account customers and assets of £43bn. Nor are all the infants purely digital. Metro Bank has since 2010 established 55 “stores” (ie, branches) and is spreading beyond south-east England.

    Among digital purists, Monzo’s chief rival is Starling Bank—where Mr Blomfield used to work. It started current accounts last spring; around 100,000 have been opened. Tandem, which recently acquired Harrods Bank, the banking arm of a posh department store, is also open for business. Atom Bank, part-owned by Spain’s BBVA, focuses on mortgages funded by fixed-rate savings. N26, a German smartphone bank, is due to arrive this year. Another near-cult, Revolut, is seeking a European licence (valid, for now, in Britain).

    To ginger up small-business banking, RBS, the market leader, must cede ground and money to competitors as part of the price, agreed on with the European Commission, of its rescue by the government in 2008. RBS will put up £425m, divided into sums from £5m to £120m, to build up rivals’ capabilities, plus £350m for incentives to customers to switch banks. Banks with assets of up to £350bn may bid. That excludes the big four but just lets in Santander (£315bn), to some challengers’ chagrin.

     

    Industry reacts to SME finance inquiry (Bridging&Commercial), Rated: A

    Earlier this month, the Treasury committee 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.

    For example, unsecured lending to an SME borrower for the purposes of their business will only be regulated if the SME is unincorporated and the amount being borrowed is £25,000 or less.

    The UK’s Financial Conduct Authority doubles down on algorithmic trading (Crowdfund Insider), Rated: A

    The UK’s Financial Conduct Authority (FCA) on Monday published its report on the supervision of algorithmic trading, which is intended to illustrate best practices and give guidance to firms considering implementing AI to automate trading operations.

    The focus areas of the report hint at concerns the FCA harbors about AI use in capital markets. The regulator placed particular emphasis on humans being able to intervene in an algorithm if something goes wrong, and ensuring the technology doesn’t start behaving in a way unintended by its creators.

    Innovate Finance Announces Finalists for 2018 FinTech Pitch360 (Crowdfund Insider), Rated: B

    The 2018 Pitch360 finalists are the following:

    • Artificial Intelligence: Axyon AI SRL, Coriolis Technologies Ltd, Eye Capital S.A.
    • Banking/ Enterprise Solutions: Akoni, Hedgewiz Pure Risk Management Solutions, Salt Edge Inc
    • Distributed Ledger Technology: hiveonline, SPIRAL
    • Financial Inclusion: CommuScore, CreditSpring, Trezeo
    • Payments & FX: Duality Banx, Divido Financial Services, Envision&Company LTD
    • Peer-to-Peer / Alternative Funding / SME Lending: Alterest, Credit Data Research Ltd, StrideUp
    • Personal Finance Management & Robo Advice: CASHOFF Ltd, Bedaan
    • RegTech: Calcabis, Exate Technology
    China

     

    Hexindai: Positive Quarter Strengthens Bull Case (Seeking Alpha), Rated: AAA

    Sales increased 575% to $43.31 million, driven by loan facilitation growth, which was $388 million – an increase of 187.1% over the prior year. The high sales growth rate contributed to a whopping 1,589% net income growth, which was $26.9 million for the quarter. Gross billing ratio contributed to overall growth with an increase from 7.4% in the previous year to 12.1% in the reported one as the company continues its shift to credit loans.

    The company increased its guidance, bumping EPS estimates for the year from $0.74 (see linked article for full estimate calculations) to $1.30 per share, as sales are now expected at $108 million – up from previously expected $90 million. The company believes this will be driven by a bump in loan facilitation, which it expects to be $1.23 billion, up from previously expected $1 billion.

    In my previous article I initiated the company with a price target range of $14.80 to $22.20 per share given a 20x to 30x forward earnings multiple, and given recent positive catalysts I believe fair value lies in the same multiple. As the company has hiked its sales and net income guidance, pushing EPS to $1.30 for fiscal 2018, I believe the company’s fair value now lies in the range of $26.00 to $39.00 per share. That represents almost 200% upside from the current share price.

    Money20/20 launches in China, the world’s biggest FinTech market (CUInsight), Rated: A

    Ascential announced in Hangzhou recently the launch of its trailblazing FinTech event Money20/20 at Hangzhou International Expo Center on 14-16 November 2018.

    Guest speakers includedArthur Zhu, President of LianLian Pay; Raymond Qu, CEO of Geoswift; Jeff Parker, Managing Director of WorldFirst Asia-Pacific; Eric Gu, founder & CEO of Metaverse; and experts such as Dr. Ben Shenglin, Dean of Zhejiang University’s Academy of Internet Finance.

    Chinese ADSs on the Rise (Capital Watch), Rated: B

    Coming in second and third place, China Rapid Finance Ltd. (NYSE: XRF) and JP Holdings Ltd. (NYSE: JP) both soared 8 percent to close at $5.17 and $19.85 per share, respectively, while Jianpu Technology Inc. (NYSE:JT) rose nearly 6 percent to $7.28 per share.

    European Union

    Online Lender Lendix Plans Entrance into German and Dutch Markets (ICO News Desk), Rated: AAA

    Continuing its plan to lead the European SME lending market, fintech company Lendixcontinues its geographical expansion with plans to branch into Germany and the Netherlands.

    bitJob teams up with the Dutch government blockchain program to enrich students résumés with a crypto flair (Chipin), Rated: A

    bitJob, the P2P marketplace that connects students and businesses, is announcing today its partnership with the Blockchain projects division inside the Dutch government, to deploy its pilot project in Holland. The marketplace, developed by bitJob, bridges the gap between businesses and students by enabling both sides to offer/look for employment with a technology that promotes honesty, immediacy, and robustness.

    Opiria & PDATA token: peer reviewed token sale from Germany (Opiria email), Rated: B

    Opiria allows consumers to sell their personal data and companies to buy personal data directly from consumers without a veiled middleman in a fully transparent and secure way.

    We are presently running an ICO. About our ICO:

    • peer reviewed with due diligence report – showing PDATA is a top 5% ICO

    • Already >1 million USD raised in the Pre-ICO (hard cap $5 million in Pre-ICO)

    • 4k+ active users providing personal data and opinions

    Management Team:

    • Dr. Christian Lange (CEO): proven track record in entrepreneurship and successful exit in 2015

    • Marlene Gagesch (CTO): head of B2B software departments for > 10 years

    For more information:

    • 2 min pitch video: 

      1 page business model canvas: 

      ICO website/whitepaper: 

      International

      Can’t Miss Quick-Start Guide to Launching a New Business Venture (Influencive), Rated: A

      The following quick-start guide will explain the 7 steps that you need to follow to launch your business venture.

      Make Sure There Is a Market for Your Idea

      The very first step you should take is to validate your idea or concept. You need to make sure that there is a market for your idea.

      Create a Basic Business and Marketing Plan

      If you are trying to launch your product or service as soon as possible, you will still need a solid business and marketing plan. You do not need to be completely detailed, but you should have a good plan in place.

      Obtain Funding for Your Idea

      Another way to get financing is to use P2P (peer to peer) lending. This is similar to crowdfunding, which is another option. With both P2P lending and crowdfunding, you will need to properly explain the value of your product or service. Also, it may take a while to obtain all the funding that you require.

      Research Your Target Demographic

      Once you get funding, you will need to start researching your target demographic. You need to know who you are marketing to before you start a marketing campaign.

      Create a Website

      You do not need to spend a lot to build a website. There are several affordable options with easy to use website builders. These website builders include drag and drop layouts, so anyone can build their own website. A few options include WordPress, Wix, and SquareSpace.

      Decide on a Business Structure

      The next step is to choose a business structure. This is essential and should be decided before you release your product or service.

      Start Marketing Your Product or Service

      The final step is to begin marketing your product or service.

      India

      In consultation with MCA, Sebi makes headway in framing crowd-funding norms (Business Standard), Rated: AAA

      The Securities and Exchange Board of India (Sebi) is finalising the regulatory framework for crowd-funding in consultation with the corporate affairs ministry.

      APAC

      Revolut uses GPS for FX app launch in APAC (Fintech Futures), Rated: AAA

      Revolut will be using Global Processing Services (GPS) for the launch of its multi-currency FX app in the APAC region.

      Revolut will unleash its app, starting with New Zealand, Singapore and Japan. GPS announced the deal during the Lord Mayor of the City of London’s UK Business delegation, which is currently in Australia this week.

      Middle East

      Fintech Startup Beehive Is Closing The Gap For SME Finance In The GCC (Dubai Forum), Rated: AAA

      She found Beehive, a Dubai-based peer-to-peer lending platform. Through Beehive, Lowmass borrowed $54,000 in late 2016 at an interest rate of 9.89%. Although it took about the same amount of time to get a loan from Beehive as it did through the bank, Lowmass says, “the funds were raised cleanly and extremely quickly and we were delighted with the resultinginterest rate we ended up paying.”

      It has 6,000 registered investors—mostly from the U.A.E.—and has channeled a total of $40 million to borrowers.

      Africa

      Ecobank: African Fintech Predicted to Grow Exponentially by 2020 (Crowdfund Insider), Rated: A

      Africa is now at the forefront of fintech with 57.6% of the world’s 174 million active registered mobile money accounts (100.1 million) in Sub-Saharan Africa. Fintech in Africa is predicted to grow from US$ 200 million to US$ 3 billion by 2020. As Ecobank works seamlessly across 36 countries in total, Ecobank is also the only bank that allows customers to transact more easily across borders.

      Ecobank’s mobile app allows customers in any of the 33 African countries in which it operates to check balances, pay bills and merchants, and many other services. Rwanda, where the summit is taking place, has the second highest use of mobiles in Africa, with more than 50% of the population unique subscribers. Kenya has the highest penetration rate of almost 60% of the population.

      Canada

      Vested Ventures completes seed round in gamified savings app Dojo (Finextra), Rated: AAA

      Vested Ventures, the investment arm of the fastest growing public relations agency globally, Vested, announced it has successfully completed a seed round investment in Vancouver financial software company Dojo Technology Corp (“Dojo”).

      Dojo’s iOS and Android-friendly mobile platform reimagines how families and young people interact with their banks and credit unions by providing reward-based gamification and nudging users towards positive financial habits.

      Authors:

      George Popescu
      Allen Taylor

    Friday August 25 2017, Daily News Digest

    alternative investing

    News Comments Today’s main news: Ellevest raises $32M to target women investors. eOriginal, Notarize close first digital mortgage closing. OFF3R launches SIPPS portal. Zopa reduces higher-risk lending. China issues draft rules on illegal fundraising. TWINO adds second Russian originator. African university to offer fintech degree. Today’s main analysis: Should P2P lending investors worry about default rates?Early-stage fintech investment in UK, Germany. Today’s […]

    alternative investing

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia

    India

    Asia

    Africa

    News Summary

    United States

    Wall Street alum Sallie Krawcheck just raised $ 32 million for her investing platform (Business Insider), Rated: AAA

    But the uncertainty and risk that comes with the markets is very often a major deterrent, especially for women, who invest at a much lower rate than men in the US.

    To combat this, former Wall Street executive Sallie Krawcheck launched Ellevest in 2016, a digital investing platform that puts female investors’ money in low-cost ETFs based on a pick-and-choose set of goals, like starting a business, buying a home, having children, and retiring comfortably.

    This week, the startup raised $32.5 million in its latest round of funding, according to CNBC. Tennis superstar Venus Williams, who is a champion of equal pay and opportunity for women both on and off the court, was among Ellevest’s first investors.

    Just 28% of women are willing to take on high risk to get a good return on their investment, compared to 45% of men, according to a 2015 report by BlackRock.

    Man finds it can be hard to return $ 6,000 (WoodTV), Rated: AAA

    When 53-year-old Wyoming resident Duane La Varier found $6,180 had mysteriously appeared in his bank account, he never dreamed how hard it could be just trying to give money away.

    He said he and his wife never filled out any applications and never sought any kind of loan.

    The deposit a week ago had come from a company called LendingClub.

    “I said, ‘I did not apply for this loan. Just take it back, just take it all out of my account.’ They said no.”

    LendingClub is not the actual lender — it represents lenders — but Dudum said the company will take the hit for the $6,000 loan and its fees.

    eOriginal and Notarize Make Digital Mortgage the New Reality (Broadway World), Rated: AAA

    With its launch of Notarize for Mortgage, the company’s proprietary signing and remote notarization platform, Notarize recently completed the first-ever online mortgage closing. By integrating directly with eOriginal’s electronic vault, they enable lenders to leverage a joint solution that takes only a few short days to set up and launch before borrowers can start closing loans online. Together, Notarize and eOriginal allow lenders to quickly provide a seamless digital experience spanning the entire closing process all the way through registration with MERS (Mortgage Electronic Registration System, Inc.) and sale into the secondary market.

    Connecting lenders, title agents, borrowers and notaries online 24 x 7 to digitize the closing process, the Notarize for Mortgage platform is approved by both Fannie Mae and Freddie Mac, underwritten by national title underwriters, and was launched with five lender customers and numerous warehouse lender and mortgage servicer partners. The platform is available to lenders online or via modern APIs that allow them to integrate an online closing process directly into their existing tools, automating their closing operations entirely.

    eOriginal’s platform of integrated solutions delivers a fully digital mortgage and supports every type of digital closing strategy.

    TRANSPARENCY IN ALTERNATIVE INVESTING (All About Alpha), Rated: AAA

    In February of this year, the Economist Intelligence Unit surveyed 200 senior asset managers and institutional investor executives to learn what factors are most important in the way they make their decisions. Several different types of institution were involved, including hedge funds, private equity firms, insurance companies, and nonprofits.

    New Business Models – and Transparency

    The 2008 global financial crisis of course had a negative impact on the alternative investments industry.

    New business models have arisen to supply demand across the spectrum of investors, including those investors eligible for and interested in alternatives. Publicly traded limited partners are one important example.

    Who will win the robo advisor IPO race? (Financial-Planning), Rated: AAA

    It’s been a decade since the launch of the industry’s leading independent digital advice platforms — Betterment, Wealthfront and Personal Capital.

    The question that now remains for all three: who will cross the IPO finish line first?

    In terms of assets, the trio has kept their positions in the market respectively, with Betterment leading all independents with over $10 billion in AUM, followed by Wealthfront’s $7.4 billion and Personal Capital’s $4.9 billion.

    Collectively, the three count just over 420,000 clients and over 548,000 accounts, according to SEC filings and company statements.

    Personal Capital, which always tailored its services for HNW clients before lowering its account minimums (and then raising them up again) claims its average client account size is roughly $380,000; users with more than $1 million in investable assets, the company says, comprise about 40% of its AUM.

    Source: Financial-Planning.com

    Online Lenders Featured in the Inc. 5000 (Lend Academy), Rated: A

    Every year Inc. pulls together a list of the top 5000 fastest growing private companies in the United States. This year there were around 250 companies that made it in the financial services category and there are several familiar names on the list.

    Other lenders readers may recognize are Lighter Capital (634), FastPay (1653), National Funding (2030), and ZestFinance (2202).

    How Debit Activity Can Benefit Lenders in a Cashless Society (Clarity Services), Rated: A

    With nearly half the American population carrying a subprime credit score, rent-to-own companies, online installment, storefronts and others are embracing new tools to intelligently navigate a market that has been largely overlooked.

    • Cash is only 14 percent of the share of transactions by value of payments (The Federal Reserve System Cash Product Office).
    • While the average American spends roughly $100 per day – not counting the purchase of a home, motor vehicle or normal household bills (Gallop), half of us are walking around with less than $20 cash (Bankrate.com).
    • If given the choice between a cashless and cash-only shop, most consumers in the wealthiest countries prefer the cashless option (ING Group/eZonomics).
    • Nearly 40 percent of Americans said that they would be happy to go completely without cash. (ING Group/eZonomics).

    The top 7 startups from Y Combinator S’17 Demo Day 2 (TechCrunch), Rated: A

    Standard Cognition is using machine vision to build the checkout of the future. Called autonomous checkout, the technology will allow shoppers to grab what they want and walk out of a store without having to go to a cashier. Standard Cognition believes it tech will enable those companies to save money and reduce theft.

    Dharma Labs is building what it calls the first “protocol for debt on blockchains.” Citing the popularity of ICOs, the startup believes there’s a “proven demand for cryptoassets that look and act much like equity.” So Dharma has built a mechanism for decentralized peer-to-peer lending. “Anyone in the world can borrow and anyone in the world can lend.”

    Emailage Raises $ 10m in Growth Equity Funding (Finsmes), Rated: A

    Emailage, a Chandler, AZ-based provider of global fraud prevention and identity verification using email address scoring, raised $10m in growth equity funding.

    The round was led by Anthos Capital, with participation from Radian Capital, Wipro Ventures, Mucker Capital and Tallwave Capital.

    The company intends to use the funds to expand existing partnerships, further advance its email address-based predictive scoring system, and accelerate growth in North America, EMEA, LATAM and other key markets.

    How to Expand Your Business Online by Offering More Products or Services (Kabbage), Rated: A

    Hopefully, increased revenues will help ease cash flow problems and in the end, improve profits. Other advantages of growing business may include the chance to bring in more qualified employees, acquiring more customers and improving credit scores.

    Expand service areas

    Companies that provide services to homes or other businesses may find that their hometown or neighborhood has a limited customer base.

    Expanding to nearby locations is one of the most common ways that local businesses grow into regional businesses. This also allows the company to add some more geographic areas to a business website, directories, and social pages to show up in more local searches.

    Expand services

    Most small business owners have to work to manage cash flow, and this task is much tougher when revenues are only high for a few months but operational costs last all year.

    These are some ways to expand services both offline and online:

    • One good way to promote this kind of service online could be through holding webinars with tax tips for small businesses or even individuals. Some tax preparers might also produce books or videos for sale to help startups and small businesses manage tax planning better.
    • Some of these plucky entrepreneurs have learned to keep business flowing by offering holiday specials for getaways. Others have opened their facilities up to host seminars or workshops for organizations.
    • He kept his local business website to attract repair customers, but he also added an online store to sell products to the DIY crowd all over the country. He promoted this online store by creating some how-to videos.

    This credit card alternative could be bad for your wallet (WSBTV.com), Rated: B

    The problem is that these instant loans encourage impulse spending — and it doesn’t have to be a pricey vacation! Affirm will spread payments over a period of 12 months for loans of $100 or more.

    To put that in perspective, you could easily pay more than $15 in interest on just a $100 loan!

    LENDINGCLUB INVESTOR REVIEW: THE BEST PEER TO PEER LENDING SOLUTION (The College Investor), Rated: B

    Over the last 8 years, 150,000 investors have lent over $26 Billion in personal loans through the peer to peer LendingClub platfrom. On average, investors in the top grade loans earned 5-7% annualized with strong cash flow.

    As an added bonus, LendingClub allows you to invest as little as $25 per note. That means it’s easy to spread your risk across dozens or even hundreds of loans.

    First, you need to meet some strict investor requirements.

    •  Income requirements: Must earn $70,000 annually ($85,000 in California)
    • Net Worth Requirements: Must have a net worth (exclusive of your home value) of $70,000 ($85,000 in California). People with a $250,000 net worth do not have to abide by the income requirements ($200,000 in California).
    •  Kentucky residents must be accredited investors (earn $200,000 annually or have a net worth of $1 million)
    •  Residents of Alaska, New Mexico, North Carolina, Ohio, Pennsylvania cannot invest in LendingClub
    •  No more than 10% of your net worth can be investing in lending club notes
    •  $1,000 minimum investment

    LendingClub charges $100 per year for their self directed IRA accounts, but they waive that if you maintain $5,000 of investments in your first year or $10,000 in subsequent years.

    Once you select your loans, LendingClub will help you evaluate the risk on your portfolio of loans. They will even provide a projected rate of returns based off of history.

    Source: The College Investor

    TD Auto Monitors Fintech Startups (Auto Finance News), Rated: B

    TD Auto Finance is keeping a close eye on fintech startups as it evaluates “opportunities that might exist” for auto refinance and private-party transactions, President and Chief Executive Andrew Stuart told Auto Finance News.

    TD Auto is already “in discussions” with several fintech players to evaluate “where that might go,” Stuart said.

    5 Things To Know Before Taking A Loan Online (ValueWalk), Rated: B

    If you’ve considered taking a personal loan online here’s what you need to know:

    1. More accessible – Smaller, newer financial firms have stepped in to fill the gaps left behind by traditional banks since the crisis.
    2. Tailored products – You can tailor the specifics of the loan, such as the timeline for payback and the purpose of the loan. Businesses can use everything from inventory to invoices without the need for a personal guarantee.
    3. Pricing Variety – Whether the payments are amortized monthly or weekly. Whether the effective annual rate is as attractive as you expected.
    4. Less Regulation – Alternative lenders and online loan providers are not regulated by the FDIC the same way as traditional banks.
    5. More awareness – The lack of regulation means alternative online lenders have more flexibility to provide custom lending solutions. They can be as innovative as they want with these financial products. However, you need to be more careful when dealing with an online lender. Look into their history, get assurances from the company, and do your best to educate yourself about their business.
    United Kingdom

    OFF3R launches new SIPPS portal (P2P Finance News), Rated: AAA

    OFF3R has launched a new channel dedicated to Self Invested Personal Pensions (SIPPs), the tax-free vehicle for pension savings.

    The investment aggregator’s SIPPs portal launched on Tuesday 22 August with an initial list of three pension providers: Hargreaves Lansdown, IG, and True Potential Investor. It details the various fees and investment thresholds of each platform, as well as information on the different management styles.

    Zopa reduces higher-risk lending (Bridging and Commercial), Rated: AAA

    Zopa has revealed it is taking steps to attract more lower-risk customers as it continues its reduction in higher-risk lending.

    Zopa has reduced the amount of lending in its higher return D-E markets, which are included in its Plus product.

    The Plus product was designed for investors who were willing to accept more risk for higher returns, with rates of between 6-7%.

    Zopa expects that the lower-risk approach will mean the targeted returns for new investments in the Plus product will be 4.5%.

    “For example, the proportion of D and E loans in the Plus product would go from 30% until now, to 10-15% in the future.”

    Peer-to-peer lending: should you worry about default rates? (Your Money), Rated: AAA

    Neil Faulkner, managing director of peer-to-peer research and ratings agency 4thWay, explains that investors should pay close attention to published bad-debt figures (which cover loan write-offs as well as simple defaults) of the different platforms.

    Zopa

    When a loan is approved, Zopa makes an assumption about its likelihood of falling into default over the lifetime of the loan, and then revises this default expectation over the lifetime of the loan.

    Source: YourMoney.com

    Zopa divides up investor money between many borrowers matching the risk profile specified at the outset by the investor, to spread the risk. If a borrower misses four months of repayments, then a recovery process begins.

    RateSetter

    The headline rate to note is that over its lifetime, 98.31% of loans are up-to-date – in order words, around 1.7% are in some form of arrears.

    Funding Circle

    Funding Circle is a little different in that you are lending to businesses rather than people. Over the lifetime of the site, it says that around 2% of loans have turned bad.

    Lending Works

    To date, Lending Works has an actual bad debt rate of 1.1%.

    Assetz Capital Update: Investors Have Earned £25 Million to Date (Crowdfund Insider), Rated: A

    Assetz Capital has shared that investors in aggregate have earned gross returns of more than £25 million on their investments in approximately four years. Assetz Capital says lenders earned an average of 8% gross interest across all Assetz Capital loans since platform launch, before allowances for tax or any losses not covered by a provision fund.

    Currently, Assetz Capital has about 20,000 registered and active investors. The returns since the launch of the platform were generated from over £309 million lent to UK businesses from a range of industries looking to raise funds, including SME, bridging and development sectors.

    ThinCats plans staggered IFISA roll-out before end of 2017 (P2P Finance News), Rated: A

    Earlier this month, ThinCats received full authorisation from the Financial Conduct Authority (FCA), which allowed the firm to apply for ISA manager status from the HMRC. While a launch date has not been officially set, Stewart Cazier, head of retail, told Peer2Peer Finance News: “I’m definitely thinking 2017. I’d be very disappointed if it didn’t happen this year.”

    Innovate Finance CEO steps down (AltFi), Rated: B

    After two and half years at the helm of the fintech member association, Innovate Finance, Lawrence Wintermeyer has stepped down.

    Wintermeyer is leaving to pursue other opportunities, he said.

    China

    China issues draft rules in crackdown on illegal fundraising (Reuters), Rated: AAA

    China issued draft rules targeting illegal fundraising on Thursday, as the authorities step up a campaign to crack down on risky and illicit behavior in the country’s financial sector.

    The draft rules, issued by the law office of China’s State Council, call for participants engaged in illegal fundraising to cover the losses stemming from those activities.

    Regulators will guide financial institutions and non-bank payment service providers on tightening up their supervision of suspicious fund flows, the draft rules said.

    Financial institutions and non-bank payment service providers, if found to be negligent, will be subject to having their illegal income forfeited. They will also be subject to a fine of more than 1 time but less than five times of the illegal income, the draft rules said.

    The executives responsible for the illegal activity will be removed and banned from entering the financial industry for a certain period of time and could be subject to fines of between 50,000 yuan and 500,000 yuan each ($7,507-$75,072), the rules said.

    China Rapid Finance Posted a $ 13.5M Net Loss in Q2, but Very Close to Profitability (Xing Ping She), Rated: A

    Recently, China Rapid Finance (NYSE:XRF) released an unaudited financial report for the second quarter of 2017. In the second quarter, the company reported a gross income of $24.5 million, up 59% from a year earlier, and their net income was $15.2 million, up 9 percent year on year. The company posted a net loss of $13.5 million in the second quarter, compared with $5.9 million in the same period last year, as the cost of including customer incentives increased.

    However, the company still held the “Low and Grow” business strategy. Compared to the profitability, there are more concerned about gross income. Through analysis of the company’s financial and business data, we can find that some business data is changing and the potential for profit is increasing.

    Better Buy: SINA vs. Weibo (The Motley Fool), Rated: A

    Chinese internet companies SINA (NASDAQ:SINA) and Weibo(NASDAQ:WB) are closely tied to each other. SINA holds a 46% stake in Weibo, deriving 72% of its top line from the Chinese Twitter clone (as Weibo is referred to by some).

    Weibo’s greater gains have made it more expensive with a trailing price-to-earnings (P/E) ratio of 132 as compared to SINA’s 30.

    SINA relies on Weibo for 70% of its revenue, which means that investors can still enjoy the latter’s rapid growth via a stock with a lower valuation. Additionally, SINA’s non-Weibo business has started gaining some traction of late, with the company witnessing 8% year-over-year growth from this segment in the latest quarter.

    While there is no denying that Weibo’s growth is still impressive — as the 28% year-over-year jump in its monthly active users boosted its advertising revenue by 72% last quarter — at the same time, there will be a limit to the company’s growth given its negligible presence outside China and the competition from the likes of Tencent‘s (NASDAQOTH:TCEHY) WeChat.

    Fluid Wins LendIt Choice Award – Aug 2017 (FluidFi), Rated: B

    Fluid, a California based FinTech & AdTech startup announces today that it received LendIt LangDi Fintech Choice Award from LendIt Conference in Shanghai, China.

    European Union

    Latvian P2P Lender TWINO Adds Second Russian Originator (Crowdfund Insider), Rated: AAA

    Latvian peer-to-peer lending platform TWINO has reportedly added a second Russian originator to its platform since its December 2016 launch.

    According to P2P Finance News, over 40% of TWINO’s investors have funded Russian loans.

    Early-Stage Fintech Investment In The UK & Germany Goes To Insurtech, Banking (CB Insights), Rated: AAA

    Year-to-date, European fintech companies have raised close to $2.6B across 295 deals, meaning that at the current run rate 2017 could see 500 deals and $4.5B in total funding by year end. For perspective, funding to European fintech companies is already 30% higher in 2017 YTD than the 2016 total.

     

    UNITED KINGDOM

    UK early-stage fintech financing has remained above 15 deals quarterly since Q2’14. Total disclosed funding has been a bit choppier: at $27M, Q4’16 was the lowest quarter since Q2’14, while the following quarter (Q1’17) saw the third-highest total funding at $81M and the largest number of deals at 33. Most recently, Q2’17 figures fell to $41M across 16 deals.

    For example, Monese, which provides banking services for immigrants and expats, raised a $10M Series A in Q1’17, while Wirex, which allows for the holding of fiat currencies and cryptocurrencies in a single account on its personal banking platform, raised a $3M Series A in the same quarter.

    Insurance is trending up across Europe at large, with more than 20 early-stage deals closing for approximately $50M year-to-date.

    GERMANY

    Funding hit its peak in 2016 as well, at $135M, well above the previous high-water mark of $46M in 2013 and more than 4X the $31M total for 2015. 2017 is on pace to surpass 2016 early-stage fintech financing figures, with 22 deals and $83M year-to-date.

    Germany has also seen an increase in early-stage deals to small business banking and API-focused mobile banking platforms. Financing rounds to this group have increased steadily since 2015, which saw 5 deals close for $17M and was followed by 7 deals in 2016 (for a much smaller $6M).

    Klarna (Hortonworks), Rated: A

    Klarna uses Hortonworks Data Platform (HDP) and Hortonworks DataFlow (HDF) to help drive its deep data mining and AI, and to thus mitigate risk for buyers and sellers.

    International

    San Francisco and Berlin have new competition for the capital of ‘fintech’ (CNBC), Rated: AAA

    Dubai has seen a surge of interest from fintech startups and banking assets over the last three years, according to the emirate’s financial center’s management body.

    It’s fast becoming a destination for financial technology startups because of its location, private investment and innovation.

    He told CNBC that the financial services industry contributes about 12 percent to Dubai’s total gross domestic product and it is expected to increase to 18 percent by 2024.

    Increased appetite for fintech investment in Dubai from CNBC.

    AXIS Capital Partners with Plug and Play Tech Center (BusinessWire), Rated: A

    AXIS Capital Holdings Limited and its operating subsidiaries (“AXIS Capital”) (NYSE:AXS) today announced it has partnered with Plug and Play, a global digital startup innovation platform headquartered in Silicon Valley. By joining Plug and Play’s InsurTech platform, AXIS will gain access to world-class digital insurance startups and will provide mentorship and technical support, along with underwriting and actuarial expertise, to help turn their ideas into products or services.

    To help address the rapid and transformative changes underway within the (re)insurance industry, AXIS will work with property and casualty, life/health and general InsurTech startups that have been accepted to Plug and Play’s InsurTech program. This 12-week program attracts applications from hundreds of startups from around the world that utilize technology, data and analytics to develop innovative new business models, products and services.

    AXIS will focus on the areas of Insurance, Reinsurance, Health, IoT (Internet of Things), FinTech and Mobility, with leaders from different business areas serving as program mentors and technical advisors.

    Australia

    Digital advice embraced by all ages (Financial Standard), Rated: AAA

    Superannuation fund member engagement via Decimal’s digital financial advice software increased 37% in the past year, latest quarterly statistics show.

    Decimal’s digital insights report for the June quarter shows 2366 members in its superannuation client base decided to engage with super via the digital advice channel over a 12 month period, up from 1731 the year prior.

    Total funds under advice increased to $8.4 billion, up 72% year-on-year, and Decimal Software chief executive Nick Pollock said compound growth is stimulating for the super sector.

    “The insights show that 43% of all logins were by women, 28% of logins took place outside of business hours, with 31% of those logins happening between 10pm and 6am,” Pollock said.

    Australian fintech launches industry census (AltFi), Rated: A

    Australian fintech has launched an expanded industry census, which will seek to unpack key issues like how to expand overseas and gender diversity and help set lobbying and policy priorities.

    Working on the census, consultancy firm EY, and industry group FinTech Australia, have asked Aussie fintechs to complete it by 3 September.

    FinTech Australia Reveals Initial Speaker Line Up for Inaugural Fintech Fest (Crowdfund Insider), Rated: B

    FinTech Australia and Next Money, along with the State Government of Victoria, a gearing up for their inaugural week long Fintech event –  Intersekt. The Fintech festival will be taking place in Melbourne, Australia from October 27 to November 3rd if you happen to be in Australia.

    Confirmed speakers for Intersekt so far include:

    • Anthony Thomson, founder of the UK’s Metro and Atom Banks (and the current chairman of Atom Bank). Atom Bank is one of the leading UK Challenger banks.
    • Ron Suber, called the “godfather of Fintech” due to his globe-trotting reputation for promoting online lending and all things Fintech. Suber recently joined the leadership team at Credible, the multi-lender marketplace for student loans. Suber is also President Emeritus of Prosper Marketplace and holds a broad portfolio of Fintech investments.
    • Megan Caywood, chief platform officer for the UK’s mobile only Starling Bank, who has delivered a range of major customer experience improvements.
    • David Birch, an international thought leader in digital identity and digital money and author of “Before Babylon, Beyond Bitcoin”
    • Van Le, who is the co-founder of Xinja, which is on track to be Australia’s first independent, 100% digital bank made for mobile.
      Lucy Liu, co-founder and chief operating officer of Melbourne-based payments company Airwallex who was this year named as one of Forbes’ 30 Under 30
    • Emma Weston, CEO and co-founder of AgriDigital, which provides a blockchain-enabled, integrated commodity management solution for the global grains industry
    India

    Over 40% Indians act on financial advice given by spouse, RBI report shows (Zeebiz), Rated: AAA

    Key Highlights:

    • Over 50% Indians think that their children will take care of them financially after retirement
    • 44% Indians do not think they will ever retire from work 
    • An average of 66% of randomly selected adult household members have a bank account.
    Source: Zeebiz

    The report found that the average Indian household holds 84% of its wealth in real estate and other physical goods, 11% in gold and the residual 5% in financial assets.

    Source: Zeebiz

    The report said that 44% Indians have not thought of retirement as “people like me cannot retire from work,” they said.

    Only 13% people surveyed were actively saving for their retirement while 33% had absolutely no planning for retirement.

    Only around 5% people had money invested in financial assets for their retirement planning while gold formed nearly 10% of this fund.

    India’s Domestic Workers Have A New Ally In This Innovative FinTech Startup (Forbes), Rated: A

    The team at SERV’D has a simple but ambitious goal: to organize India’s unorganized domestic workforce. That means bringing financial inclusion to millions of unregistered workers via a mobile contract and payment app.

    The lack of written contracts also makes it difficult for low-income domestic workers to build a financial history. Without that, they struggle to save money or obtain insurance, which all but guarantees they will remain in poverty. Exclusion from formal financial services bars people from accessing health insurance, bank accounts, and can even inhibit them from finding affordable housing.

    SERV’D seeks to replace the verbal work agreements made between customers and their hired help. Instead of tenuous oral contracts, the fintech startup wants employers and employees to create digital agreements on the SERV’D app. The platform also allows them to make digital payment transfers so neither party has to worry about dealing with cash.

    Most importantly, the online payment trail creates traceable income records for poor, unbanked workers. With enough proof of income built up, they will eventually be able to open bank accounts and access financial products that are currently beyond reach.

    Ezetap’s fresh funds are the latest VC dollars flowing to Indian fintech (PitchBook), Rated: A

    Mobile payments startup Ezetap is the latest Indian fintech company to pull in new equity financing. The company has raised $16 million from investors including JS Capital Management, Social Capital and Horizons Ventures.

    Fintech NBFC “Prest Loans” Forays Its Operations In Rajasthan (BusinessWorld), Rated: B

    Prest Loans the new age FinTech NBFC, providing online loans to small businesses and MSME segment has expanded its operations by opening new office in Rajasthan.

    Asia

    LATTICE80 & FINOLAB Sign MOU on Fintech (Crowdfund Insider), Rated: AAA

    LATTICE80, a Singapore based non profit Fintech hub backed by Marvelstone Group, has signed a Memorandum of Understanding (MOU) with FINOLAB in Japan to mutually boost their Fintech ecosystems and global networks. Marvelstone is a global VC group based in Singapore.

    This Fintech bridge will seek to create a passporting system for Fintech’s in each country to expand into new markets.

    PH startups urged: Aspire to be unicorns (Cebu Daily News), Rated: AAA

    Aldo Carrascoso, founder and chief executive officer of GlycoProX Biosciences, Veem, and Jukin Media & Verego, said that focusing on becoming “unicorns” detracts the purpose of why people launch startups in the first place.

    Lee argued that the first unicorns were founded in the 1990s, Google Inc. being the clear “super unicorn” of the group with a valuation of more than $100 billion. Many unicorns were also born in the 2000s, although Facebook Inc. is the decade’s only super unicorn.

    Other prominent unicorns today include Uber, Airbnb, Dropbox, Spotify, Pinterest, and Lazada, to name a few.

    Treading the path toward that level takes mindfulness of revenue, a good business model, addressable market, and a product-market fit, said Carrascoso.

    Benjamin cited Xoom, a San Francisco-based digital money transfer or remittance provider, which traces its foundations to serving clients between the Philippines and the US.

    Since then the company has expanded to India and Mexico, among others, and was bought by PayPal for $890 million. Today, they do $9.1 billion in money transmissions and are operating in 18 countries with a demand for money remittance services.

    The search for a unicorn is on (Sunstar), Rated: A

    THE Philippines may have its own “tech unicorns” or technology businesses valued at $1 billion in the future. But experts says more work and collaboration is needed to achieve this dream.

    To date, no Philippine tech startup has managed to meet the goal of being a billion-dollar company.

    Globally, the US and China lead in numbers, having produced the most number of unicorns like Facebook, Uber, Airbnb as well as Xiaomi and Alibaba. Meanwhile, Malaysia in Southeast Asia has produced two unicorns in Grab and the Lazada Group.

    First, he said Philippine startups need to know how to be fundable. Instead of aiming to be a unicorn, he advised local startups to become a “cockroach” instead, one that characterizes strong survival skills, or a rhino, “big and realistic.”

    Getting payments to pay off (The Edge Markets), Rated: A

    “A key advantage of e-wallets is the low cost. You can make payments and transfer money at much cheaper rates than in conventional payment systems,” explains Gunther Zhen, the founder and CEO of iPayLinks Financial Information Service (Shanghai) Co Ltd.

    For China, this is certainly the case. While incumbent payment systems that rely on Visa, Mastercard and UnionPay charge merchants an estimated 2.5% to 3% MDR (merchant discount rate), new rivals like Alipay charge between 0.7% and 1.2%.

    In Malaysia, however, the landscape could be different as the current MDRs are already quite low. Bank Negara Malaysia’s Payment Card Reform Framework has slashed the MDR on debit and credit cards since July 2015 when it took effect.

    Today, domestic debit cards have an MDR of only 0.56% while for international debit cards, it is 0.96%. Credit cards are still relatively expensive with an MDR of 1.35%, but that is expected to drop drastically by 2021 when Bank Negara will cap interchange fees (the largest component of MDR) at 0.48% — less than half the 1.1% ceiling imposed today.

    Just look at Touch ’n Go Sdn Bhd, which booked RM15.3 million of interest income in 2015 on RM429.3 million worth of deposits in card balances. And this is merely from the relatively small balance in each card.

    Alipay creation, Yu’E Bao, is one of China’s most popular internet-based funds. It had amassed RMB1.43 trillion as at end-June. By comparison, Bank of China, one of the four major commercial banks in the country, had total deposits of RMB1.6 trillion as at end-2016.

    Pundi-Pundi Raises $ 4M in Pre-A Funding (Finsmes), Rated: A

    Pundi-Pundi, a Jakarta, Indonesia-based mobile payments and micro-loan startup aiming to create a cashless environment in South East Asia, closed a $4M pre-A round of funding.

    Africa

    UCT to offer fintech-focused degree from 2018 (BusinessDay), Rated: AAA

    The University of Cape Town (UCT) has become one of the first tertiary institutions in Africa to offer a degree specifically designed to equip students with the critical skills and knowledge to embrace the technological revolution in the financial services sector.

    One of its key focus areas will be blockchain technology, or the distributed ledger system, that has given rise to new crypto-currencies such as bitcoin and ether.

    The crypto-currency market is reportedly now worth more than $50bn and the use of virtual currencies is gaining traction in SA.

    UCT has sought to tackle this problem by offering a new master’s degree in data science with a specialisation in financial technology, said Georg, who is also the course convener. The programme is due to commence in 2018.

    Authors:

    George Popescu
    Allen Taylor

    Monday August 7 2017, Daily News Digest

    LendingClub

    News Comments Today’s main news: SoFi Ventures to support financial services startups. Prosper’s valuation dives 70%. Fundrise drops minimum investment to $500 for New Starter Portfolio Offering. UK P2P lenders asked to reveal past defaults. Hargreaves Lansdown cancels special dividend. FinMason expands into Prague. PledgeMe close to profitability. Today’s main analysis: LendingClub is looking beleaguered. Australian fintech update. Today’s thought-provoking articles: Surge […]

    LendingClub

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia/New Zealand

    India

    Asia

    Africa

    Barbados

    News Summary

    United States

    SoFi Ventures to support financial services startups (Pitchbook), Rated: AAA

    SoFi, a provider of online lending and wealth management services, has launched a strategic VC arm led by 

    Surge in FinTech Financings; PeerIQ Closes Series A (PeerIQ), Rated: AAA

    This past week featured a slate of fintech venture financings. Kabbage (Series F: $250M), Dianrong (Series D: $220M), Bread (Series B: $126M), and Juvo (Series B: $40M) all announced major financings.

    And last, but not least, , led by TransUnion, Hearst Financial Venture Fund, and Macquarie Group.

    For PeerIQ, it means continuing to execute upon the vision we shared at our seed financing just over two years ago. This fall, we will be launching our first products uniting TransUnion’s dataset with the PeerIQ analytics platform.

    Along with its investment, Hearst brings several major holding companies, including auto data provider, BlackBook, and Fitch Ratings, the global ratings provider, which opens up many new value propositions for our customers. Finally, we are working hand in hand with Macquarie, a major provider of capital to the fintech space, to improve tools for warehouse lenders and their borrowers alike.

    Lending Club Is Looking Beleaguered Heading Into Q2’s Do-Or-Die Earnings (Seeking Alpha), Rated: AAA

    Source: Thomson Reuters Eikon, image made by James Brumley

    Fast forward to Monday. That’s when Lending Club is expected to log another progressive quarter, cranking revenue up to $136.2 million, and whittle the per-share loss back to only one cent; the company lost nine cents per share on $103.4 million in sales for the same quarter a year earlier. Not only is revenue expected to keep growing beyond that, Lending Club is expected to swing back to a profit in Q3, of two cents per share.

    Fintech lender Prosper’s valuation dives 70% in latest funding round (Biz Journals), Rated: AAA

    San Francisco fintech Prosper is about to close on $50 million in funding, in a round that slashes its value 70 percent to $550 million, The Information reports .

    That a steep decrease from the $1.9 billion valuation the second-largest online lender saw just last year.

    Fundrise Drops Minimum Investment to $ 500 in New Starter Portfolio Offering (Crowdfund Insider), Rated: AAA

    The Fundrise Starter Portfolio starts with a $500 minimum and includes a 9.25% annual dividend yield and zero advisory fees through the end of the year. If you want to try it out the Starter Portfolio comes with a 90 day guarantee. If you have a change of heart, Fundrise will purchase your investment back at the original investment amount. Not a bad deal to test the waters.

    Online Lender Prosper in Talks on Deal That Would Slash Its Value (WSJ), Rated: AAA

    Prosper Marketplace Inc. is in talks to sell a roughly 10% stake to a Chinese conglomerate in a deal that could reduce the online lender’s valuation by more than two-thirds, according to people familiar with the matter.

    Under the terms of the proposed transaction, Linca would invest $50 million in Prosper at a valuation of about $550 million. No deal has been finalized, however, and there was no guarantee the parties would come to an agreement, the people said.

    David Kimball, who took over as Prosper’s CEO last December, has been focused on making the company profitable. In February, to ensure a funding source for the company’s loans, Mr. Kimball agreed to sell $5 billion worth of Prosper’s loans to a consortium of investors over the next two years along with warrants to purchase shares representing 35% of the company, The Wall Street Journal previously reported.

    Small Change Completes First Real Estate Crowdfunding Offer Under Reg CF (Crowdfund Insider), Rated: A

    Real estate investment crowdfunding site Small Change has closed its first real estate offering available to everyone – not just accredited investors.

    Small Change reports that investors have funded projects via their platform in cities including Pittsburgh, Los Angeles, New Orleans, and Washington D.C. These projects are as diverse as the cities in which they’ve been built. They include Pittsburgh’s first tiny house, a historic main street mixed-use conversion, and affordable housing in Washington, D.C. with the largest residential solar install in the country.

    Small Change has now completed its first offering open to all investors — a Starter Home Two project by architect Jonathan Tate.

    WSFS Introduces Private Student Lending Solutions (WSFS), Rated: A

    WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, today announced that it is now offering Private Student Lending Solutions, expanding its consumer lending product line to bridge the funding gap that exists between the actual cost of higher education and the federal aid, grants and scholarships available.

    WSFS is partnering with LendKey.

    SoFi to finally file for IPO? (Housingwire), Rated: A

    Social Finance, better known as SoFi, first teased it would file for an initial public offering nearly three years ago.

    SoFi CEO Mike Cagney appears to be interested in filing for an IPO again.

    If SoFi did file for an IPO, it would mark the second major IPO for a housing-related company after a dry spell the last few years.

    According to an article in Reuters by Lisa Lambert, “Last year IPOs in the United States fell by more than a third from 2015, and many of those 102 share offerings ended up trading below their debut price.”

    Renters Insurance: PolicyGenius vs. Lemonade (Coverager), Rated: A

    Yesterday, NYC-based digital broker PolicyGenius announced its expansion to renters insurance. The product is delivered in collaboration with Stillwater.

    Another thing happened yesterday. Lemonade announced its renters and homeowner’s insurance is now available to folks in NJ, joining those residing in CA, IL and NY.

    The result: Stillwater was 40% more expensive than Lemonade, all else equal.

    Fluid Strikes Strategic Partnership with Nomad Credit (LendIt), Rated: B

    Fintech and adtech startup Fluid announced a strategic partnership with Nomad Credit, a financial marketplace for international students in the US; the partnership looks to offer better credit options to this underserved market; together the companies will deliver better financial literacy, credit building tools and more cost effective financial products.

    Here’s how start-ups get funded before they’re ready for venture capital (CNBC), Rated: B

    Fledgling businesses rarely command seed or venture funding right out of the gate. But they still need cash to get started.

    In reality, there’s a big difference between securing a loan for your business and winning over backers on a site like Kickstarter. Meanwhile, equity crowdfunding, enabled by sites like AngelList, CircleUp and SeedInvest, is generally for businesses that are further along.

    Here are the real ways that most entrepreneurs get money at the very start.

    • Personal savings
    • Wages
    • Credit cards
    • Loans
    • Crowdfunding

    Countering West Coast Pull, by Helping Finance Start-Ups Sell in New York (The New York Times), Rated: A

    Nine of the 15 United States financial technology “unicorns” — companies worth $1 billion or more, as tracked by CB Insights — are in the San Francisco area. These Bay Area companies, which are not public, include the online payments processor Stripe, the online lender Social Finance and the finance website Credit Karma.

    For the last seven years, a New York business-backed program — the FinTech Innovation Lab — has been working to stem that West Coast tide by helping financial services start-ups sell their services in New York in an industry where the city clearly dominates: big banks and other finance companies.

    Make Delaware the financial technology capital (Delaware Online), Rated: A

    One such “industry of the future” that Delaware should be working to attract is the financial technology sector, or what some affectionately call “FinTech. Empowered by mobile computing, these companies use technology to bring better, cheaper, more efficient financial services to citizens. Mobile apps that allow you to send money quickly to friends or family are examples of FinTech products.

    For a number of reasons, Delaware is well-suited to become the nation’s FinTech capital. First, the financial services industry has served as a core portion of Delaware’s economy for over 40 years. Individuals with skills and expertise are ready and waiting.

    Second, banks, of which many call Delaware home, are leading the way in partnering with startups large and small to develop new solutions and businesses in the space.

    Third, Delaware’s nimble government and business community make it a flexible, attractive place for innovation.

    Is an Online Business Loan Your Best Option? (Nav), Rated: B

    There should be no surprise that with the growth of the internet and online banking that online lending would be close to follow. Over time, banks began to accept loan applications online and eventually began to offer full-service lending through the web.

    While online loans may be tempting, it is important to consider every option when borrowing a large sum. Comparison shopping is your friend. There are more than 44 different kinds of business financing — that’s a large ocean to navigate before finding the lowest-cost option that fits your business profile and approval chances.

    Nonbank lenders typically lend from their own funds or look to the financial markets to raise millions or billions of dollars to lend in smaller increments.

    Here are some questions to ask yourself to get started:

    • How much money do you need to borrow?
    • Do you need an in-person experience or are you comfortable online?
    • What are the best interest rates available today?
    • What origination fees are you willing to pay?
    United Kingdom

    UK’s peer-to-peer lenders to be asked to reveal past defaults (Financial Times), Rated: AAA

    The FCA is expected to announce new measures later this year, including forcing P2P groups to give extra information on the past performance of loans and on how much due diligence they have done on the borrowers’ past performance.

    P2P lenders — which had collectively facilitated loans of £7.3bn in the UK by the end of last year, according to research from the Peer-to-Peer Finance Association (P2PFA) — have had plenty of time to prepare for tighter regulation.

    The FCA’s latest review is the second in two years, and any measures are unlikely to come in before mid-2018, since the industry will be given between three and six months to respond to the proposals the authority puts forward later this year.

    Hargreaves Lansdown Cancels Special Dividend After Regulator Warns on Capital (The New York Times), Rated: AAA

    Fund supermarket Hargreaves Lansdown cancelled a planned special dividend on Friday after Britain’s financial regulator said the company needed to shore up its capital base, sending its shares lower.

    The company plans to launch its HL Savings product later in the year, a cash deposit service supported by marketplace lending, and this year also launched Lifetime ISAs, or individual savings accounts eligible for a government bonus.

    Distribution still keeping the wheels of credit turning (Computer Weekly), Rated: A

    A recent survey revealed a third of SMEs in the IT sector have missed out on business opportunities because of a lack of finance. Distributors have long been a major source of credit for SME resellers but with consolidation taking place in distribution through mergers and acquisitions, the sources of credit available to resellers are being reduced.

    One distributor that has publicly taken the initiative on credit is Exertis. The company recently introduced a programme called Credit Xtra with the intention of doubling the credit limit for more than 1,650 of its SMB accounts. There is also the option to increase the limit further if resellers remain within the distributor’s credit terms.

    Dow believes that it is especially important to offer extra credit at this time of year, when resellers are targeting the peak summertime buying period in education.

    LendInvest closes retail bond offer early (P2P Finance News), Rated: A

    LENDINVEST has closed its bond offer early, due to strong demand from both retail and institutional investors.

    The online mortgage lender launched the five-year notes on 19 July and the offer was scheduled to close at noon on Friday. However, it closed the offer at 11.30am on Thursday.

    It said estimated net proceeds from the offer would be just under £49m and confirmed that the issue date will be 10 August.

    Kantox raises £4.6 million from investors as it targets profitability (Business Insider), Rated: A

    Foreign exchange fintech company Kantox has raised £4.6 million from its existing investors as it aims for profitability.

    Filings with Companies House show Kantox raised the sum at the end of July.

    Kantox, founded in 2011, made an operating loss of £258,538 on revenues of £2.3 million in 2015, the most recent year accounts are available for.

    LendingCrowd offers cashback incentive (P2P Finance News), Rated: A

    LENDINGCROWD has launched a £150 cashback offer to investors when adding £2,500 or more amid surging demand from borrowers for business loans.

    The offer, which runs until 31 August, is available to new and existing investors and can be used in its Innovative Finance ISA (IFISA.)

    Competition regulator confirms P2P business lenders exempt from APR rules (P2P Finance News), Rated: A

    NEW pricing rules on business loans will not apply to peer-to-peer lenders, the Competition and Markets Authority (CMA) has confirmed.

    From today, all providers of unsecured loans and overdrafts worth up to £25,000 to small- and medium-sized enterprises (SMEs), will have to publish and clearly display the annual percentage rates (APRs.)

    It had previously been unclear if this would apply to P2P and alternative finance lenders but the CMA confirmed to Peer2Peer Finance News this morning that it would not.

    Can P2P Lending Kill NBFCs? (TechBullion), Rated: A

    NBFCs, on the other hand, are the Non-Banking Financial Companies.

    Does P2P lending offer such a serious threatto NBFCs and can P2P lending kill NBFCs? We write an informative review to let you know!

    While NBFCs mostly deal with the unbanked population, P2P concentrate on the businesses that are usually locked out by traditional lenders and also on the tech-savvy individuals.

    While P2P platforms have embraced the use of modern technology, NBFCs have failed in the use of technology. This has really affected their growth as they cannot really compete efficiently in the modern world.

    Should you go with the crowd? (MoneyWeek), Rated: B

    The returns available to investors aren’t as high as they used to be, but they’re still much, much more than you’d get putting your money in a deposit account. But there’s a very good reason for that. It’s an awful lot riskier too. You’re not covered by the financial services compensation scheme – which safeguards up to £85,000 of your savings if your bank goes bust. That means you cold lose everything.

    China

    Hexindai Partners with China UnionPay to Launch a Mobile Payment Function to Its App (PR Newswire), Rated: AAA

    Hexindai Inc. (“Hexindai” or “the Company”), a fast-growing consumer lending marketplace in China, today announced that it has partnered with China UnionPay to launch its “Quick Pass” app on Hexindai’s mobile platform. The app will allow investors on the Company’s platform to use surplus funds that have not been lent out to pay for goods and services provided by stores partnered with China UnionPay by scanning a QR code created by the app.

    Huge Internet finance firms to be assessed (Shanghai Daily), Rated: A

    CHINA will explore methods to include large Internet financial businesses of systemic importance in its macro prudential assessment, said a central bank report issued late Friday.

    The first peer-to-peer lending platform opened in 2007, and exploded in popularity, with the number of such platforms increasing 18-fold between 2012 and 2015 and the combined transaction volume jumping about 40 times over the period, said the State Information Center.

    Inclusive finance to lift fintech firms (China Daily), Rated: A

    Financial technology or fintech companies, particularly those focused on credit analysis, will greatly reduce cost of lending and also reduce credit risks. So, they are likely to experience fast growth on market demand as commercial banks are joining the inclusive finance market.

    That market is currently dominated by smaller, private financial institutions, such as peer-to-peer or P2P lending platforms and consumer finance platforms.

    In China, only 30 percent of citizens are covered by existing credit reporting system, while in mature markets the percentage could be 70 percent or higher.

    By the end of July, the five biggest banks in China-Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications and Bank of China-had launched inclusive finance arms, just two months after the authorities concerned called for better financial services for a wider group of people across China.

    European Union

    FinMason Announces International Expansion: Opens Operations in Prague (Crowdfund Insider), Rated: AAA

    Boston-based fintech and investment analytics firm, FinMason, announced its international expansion plans and the opening of a new operations center based in Prague. The company stated the initial expansion will include the hiring of twenty software engineers to keep pace with the rapid growth and development needs of the company.

    The company shared that FinMason Europe, s.r.o., opened August 1st and the first employees have already started.

    Vendorly Adds Three New Companies to Vendor Oversight Platform (Markets Insider), Rated: AAA

    Vendorly, an innovative vendor oversight platform for financial institutions, today announced the continued expansion of its platform through the addition of three new third-party oversight integrations available on the Vendorly™ platform. These additions further enable our customers to enhance their compliance management framework and help them maintain the high oversight standards required in today’s marketplace.

    Continuing this momentum, the new vendor oversight additions to the Vendorly platform include:

    • Dun & Bradstreet (NYSE: DNB)— Vendorly customers now have access to Dun & Bradstreet data to help make smarter decisions about their current and prospective vendor network.
    • The ID Co. — With DirectID, Vendorly customers now have the ability to conduct bank verification for current and prospective vendors in their network, to reduce fraud and misrepresentation prior to payment.
    • TINCheck — Vendorly customers now have the ability to validate the tax ID of all organizations in their current and prospective vendor network.

    iFunded Tackles Large Project With Bond Issue (Crowdfund Insider), Rated: A

    A new entrant in German online real estate lending, iFunded wants to address the market of larger property development projects that lie beyond the scope of real estate crowdfunding. Partnering with umbrella investment bank NFS Netfonds Financial Service, the platform is launching its first €10 million real estate bond issue, to be listed on the open market of the Frankfurt Stock Exchange. With this, iFunded leads, for the real estate online funding segment, the Fintech startup trend that consists in moving from exemption/sandbox status to a fully regulated financial environment.

    According to Crowdfunding.de, in the first half of 2017, German online real estate crowdlending platforms raised €58 million, 45% more than in the entire year of 2016.

    In July 2017, iFunded launched its first public bond offering, what motivated you as a company to add the classical fundraising channel to your online real estate platform?

    Real estate crowdfunding in Germany has grown very significantly recently and will reach between €100 and €120 million by the end of 2017. However, it still is small.

    Our first project Eisenzahnstrasse Berlin is a €10 million bond issue (ISIN: DE000A2E4FQ5) with a 3.5-year maturity and 5.5% interest rate. It is destined to transform an exi property into 281 flats, including a penthouse, and 2,400 sqm commercial space. The total estimated budget is €49.6 million and the expected income €67 million.

    Robo-adviser Moneyfarm expects profitability by 2019 (Citywire), Rated: A

    European robo-adviser Moneyfarm expects to become profitable by 2019 as it looks to bring to market new products in the coming months.

    The Italian firm filed its 2016 financial statements this morning, announcing expansion to 10,000 customers in the UK and £260 million in global assets under management (AUM), which renders it the second largest robo-adviser in Europe.

    The firm has reported total losses of £6.4 million in 2016, but claims this was in line with its agreed targets.

    Kildare businesses raise over €1m through Linked Finance (Leinster Leader), Rated: B

    Linked Finance, Ireland’s leading peer-to-peer (P2P) lending company has raised over €1m for Kildare-based businesses.

    36 Kildare businesses including well-known businesses Kelly’s Mountain Brew, Celbridge Playzone, and The Academy Barber, have used the Linked Finance platform to raise funds and facilitate business growth.

    International

    Analog Regulations Built for the Traditional Banking Space are not Conducive to Fostering Innovation in Financial Services (Crowdfund Insider), Rated: AAA

    Mueller notes that Singapore and the UK were the early leaders in Fintech innovation as the respective governments determined it was of strategic importance. With government backing, Fintech flourished.

    But there are many challenges for this transformation that is occurring at a breakneck speed. And as Mueller says;

    “analog regulations built for the traditional banking space are not conducive to fostering innovation in a financial services industry turned digital.”

    Mueller bullets out intrinsic challenges to the existing regulatory ecosystem:

    • Fear of failure has resulted in some regulators taking a go slow approach instead of being proactive. When things go wrong – who gets the blame?
    • Complexity in Fintech requires new skills. Regulatory agencies are typically populated with people entrenched in well defined processes. There is a lack of proper skills and staffing.
    • Internal culture may not be willing to adapt. Changing processes is always a challenge. A cohesive policy strategy is missing.
    • Fintech innovators may struggle to engage and communicate with a regulator. Fear of engagement harms us all

    Yes, some countries are blazing trails in Fintech and the list of countries pursuing a Fintech Hub status is growing. Without acknowledging the elephant in the room that the US is not at the top of this list (even though it is the leading global financial center) is telling about the regulatory morass elected officials have allowed to persist.

    Read the full report here.

    FinTech and the world of investment banking (Brave New Coin), Rated: A

    Global banks and investment banks are far more complex creatures than their high street counterparts, which is why we’ve seen far less disruption in corporate, commercial and wholesale banking that we are seeing in retail, but don’t be complacent or closed here. There are things happening in the more complex areas too.

    While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including:

    Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness.

    Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.

    Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments.

    Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries.

    Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains.

    Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modelling and analysis software.

    Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.

    Insurance tech: Companies creating new underwriting, claims, distribution and brokerage platforms, enhanced customer experience offerings, and software-as-a-service to help insurers deal with legacy IT issues

    Source: Brave New Coin

    Meantime, rather than ignoring these changes, the biggest banks are investing in them. Since 2012, the ten largest US banks by assets participated in 72 rounds of investment totalling $3.6 billion in 56 FinTech companies whilst, in Europe, Banco Santander leads with the most number of unique investments to FinTech startups. The firm has made 13 investments to 12 unique fintech startups. The largest investment was a $135 million in Q3 2015 to small business lender Kabbage, that also included participation from ING among other investors.

    Alt-Lending Enjoys Sudden Investment Revival (PYMNTS), Rated: A

    This week alone saw two examples of those concerns in action: One U.S. lawmaker, Rep. Emanuel Cleaver II (D-Mo.) sent a letter to five alternative small business lenders operating in the country, inquiring about their business practices.

    This week also saw one alternative lender in the U.K., DueCourse, fall into administration.

    All of this makes it even more surprising that alternative lending startups, by far, secured the greatest amount of investment this week – pushing half a billion dollars, in fact.

    PYMNTS breaks down the major AltFin investment rounds, plus covers the other B2B FinTechs that were able to secure new funding.

    Australia/New Zealand

    PledgeMe closes in on profitability in 2017, weighs up new product development (NZ Herald), Rated: AAA

    PledgeMe came within cooee of turning a profit in the 2017 financial year, boosting revenue from fees to use its equity crowdfunding and peer-to-peer lending platform while also clamping down on costs, and is considering adding another string to its bow which that could need another capital injection.

    The Wellington-based company narrowed its annual loss to $11,228 in the 12 months ended March 31 from $398,611 a year earlier as revenue climbed 55 per cent to $268,473 and operating costs were slashed 48 per cent to $288,502.

    Fintech Australia Shares 2017 Australian Fintech Update (Infographic) (Crowdfund Insider), Rated: AAA

    On Saturday, Fintech Australia released a new infographic that revealed more details about the Australian fintech industry’s successes so far this year.

     

    Non-bank loans gain momentum in tough lending regime (The Sydney Morning Herald), Rated: A

    We have seen demand for construction loans between $10 million and $30 million spike 20 per cent per cent over the last six months as Tier 1 banks are quickly tightening both pre-sales thresholds and loan-to-valuation ratios on new developments.

    One area of the greatest demand for non-bank finance is coming from Chinese property developers, who do not have the track record or Australian assets to provide comfort to the major lenders.

    Peer-to-peer lending models, like that of Chifley Securities, allow us to access investor funds to progress these developments, as we are applying different, more nuanced assessment of the risks associated with these loans.

    Will property crowdfunding take off in Australia? (Your Investment Property), Rated: A

    A new study conducted by the University of South Australia (UniSA) in partnership with DomaCom, suggests that crowdfunding could become a viable new vehicle for investors trying to make headway into the country’s increasingly challenging property market.

    Braam Lowies, the study’s lead researcher, noted that while the concept was relatively new in Australia, it had been successful in the United States and United Kingdom for approximately seven years.

    India

    Wadhawan Global takes second UK bet, invests Rs 175 crore (India Times), Rated: A

    Wadhawan Global Capital (WGC), which owns 38% of Dewan Housing FinanceBSE 0.07 %, has invested Rs 175 crore in London-based mortgage financer Neyber, marking it’s second investment through the newly set up UK arm as it seeks to expand its global footprint.

    Why PPF is like a safety jacket for investors of P2P lending (India Times), Rated: A

    Those who do not back the idea of PPF believe investors should carry the risk of loss as the principal idea of P2P Lending is to offer investors an “alternative investment route”. The P2P Lending platform, at best, can try to strengthen the risk-assessment processes by making the optimal use of technological innovations.

    While the other camp which is in favour of PPF opines that it is not a luxury but a necessity at the moment as it will only instill confidence among the investors. And, it’s not about disbelieving one’s capabilities.

    Asia

    Consultation by MAS on the provision of robo-advisory services in Singapore (Lexology), Rated: AAA

    A summary of the proposals put forward by MAS in the Consultation Paper is set out below.

    1. Expansion of licensing exemptions

      (a) Expansion of licensing exemption for dealings in securities other than CIS

      (b) Expansion of licensing exemption for provision of fund management services incidental to advisory activities

    2. Dispensation with prior client approval for each and every rebalancing transaction
    3. Case-by-case exemption from collecting full information on the financial circumstances of clients
    4. Relaxation of criteria for CMS licences in fund management for digital advisers
    5. Development, monitoring and testing of client-facing tools
    6. Provision of information on algorithms and conflicts of interest
    7. Responsibility of the board and senior management

    MAS Establishes Payments Council (LATTICE80 Email), Rated: A

    The Monetary Authority of Singapore (MAS) announced on 2 August that it will establish a Payments Council, comprising 20 leaders from banks, payment service providers, businesses,and trade  associations. Members are appointed for a two-year term and chaired by Mr Ravi Menon, Managing Director, MAS. The Payment Council marks the vision of an e-payments society, fostering collaboration between providers and users of payment services in Singapore.

    Green Packet an emerging fintech play (The Star), Rated: A

    Communication and technology services company Green Packet Bhd is eyeing an expansion into a new growth area – the mobile payment solutions segment, an area poised for disruptions through technology.

    According to the 2016 Visa Consumer Payment Attitudes survey, 74% of Malaysians prefer to make electronic payments instead of cash, an increase of 8% compared with 2015. In fact, Visa indicated in a separate study that seven in ten Malaysians are willing to use mobile wallets.

    Hyperintelligent banking in the fickle era of social media (Inquirer.net), Rated: A

    Such is the case of American banking giant Citi, which sees itself as a technology company with a banking license, having introduced video banking recently in India.

    Video banking is seen suitable especially in wealth management, which is part of the regional consumer business led by Selva. This is a segment where customers need trust and constant advice.

    Citi receives 70 million calls a year, almost half of which are answered by a phone agent. The bank usually spends about 30 to 45 seconds validating the call, asking the client his or her mother’s maiden name, date of birth and details about the last transaction.

    In the Philippines, Citi now implements voice-enabled biometrics for easier client verification. Citi is likewise moving toward facial recognition.

    Fintech Buys Stake in Exchange (finews), Rated: B

    GSX, which owns and operates the Gibraltar Stock Exchange, said on Friday that Cyberhub Fintech Holdings Limited is a new strategic shareholder. Cyberhub is a unit of Broctagon, a derivatives trading technology provider.

    The stock exchange also wants to become the world’s first to fully integrate blockchain technology.

    Africa

    The role of financial advisers in raising national savings levels (Biz Community), Rated: A

    According to the 2017 Old Mutual Savings & Investment Monitor, working South Africans allocate only 15% of their incometowards savings.

    Naidoo explained that these statistics emphasise the extent of the national savings deficit and the large gap that exists between targeted economic growth of 5.4% per year, as per the NDP, and the ability of the South African economy to fund that growth.

    Naidoo believes that financial services providers and advisers have a vital responsibility to promote a savings culture via collaborative advice and financial literacy efforts.

    Barbados

    Carilend seeing ‘phenomenal’ growth (Loop News Barbados), Rated: AAA

    Just three months in and Barbados’ sole peer-to-peer lending company, Carilend, is seeing tremendous success with 100 percent of its loans.

    With over 900 registered users on the site to date, the team at Carilend has been amazed at the response they have received.

    Carilend reported their “average” Borrower is borrowing $8,617 for 43 months at an average interest rate of 11.34%. Whilst all applications receive an answer in one working day, Carilend recently approved a brand new Borrower in 2 hours; 22 minutes from receipt of their initial application.

    Authors:

    George Popescu
    Allen Taylor

    Tuesday August 1 2017, Daily News Digest

    Charge offs

    News Comments Today’s main news: Ron Suber joins Credible as Executive Vice-Chairman. Prosper pulls plug on anti-theft app. FCA extends credit assessment rules for P2P platforms. Klarna launches P2P payment app. Revolut’s Seedrs campaign oversubscribed. Harmoney loses 63% revenue. UIDAI launches mAadhaar app. Today’s main analysis: Vintage Analysis on loan performance with age. Elevates Q2 2017 results. Today’s thought-provoking articles: AI and the […]

    Charge offs

    News Comments

    United States

    United Kingdom

    China

    European Union

    International

    Australia/New Zealand

    India

    Asia

    South America

    Israel

    News Summary

    United States

    Ron Suber Joins Credible as Executive Vice-Chairman (Credible), Rated: AAA

    Renowned fintech executive, advisor and investor Ron Suber has joined personal finance marketplace Credible.com as executive vice-chairman and a member of the board of directors.

    “It’s been extremely exciting to see the Credible team turn a startup with a promising business model into a fast-growing company that’s respected by consumers, lenders and the industry” Suber said. “I have decided that now is the right time to help Credible seize their broader opportunity in the fintech ecosystem.”

    Revisiting Vintage Analysis- How Loans Perform With Age (Orchard), Rated: AAA

    The older vintages have longer lines, as they have more months of history. Using this data, we can examine how loans booked at different times compare to each other at equivalent periods in their life-cycle. This can help an investor evaluate their current portfolio and help them make comparative judgments about its performance.

    Source: Orchard Platform

    Factors to Consider Within Vintage Analysis

    Interest Rates

    Source: Orchard Platform
    Source: Orchard Platform

    Credit Grade

    Vintage analysis can also help us to see how loans within a particular credit grade perform over time. In our prior analysis, we examined the performance of the top graded loans (A for Lending Club and AA for Prosper). However, as time has passed, these two platforms have increasingly been lending to borrowers with credit just below the top grades.

    FICO Score and Debt-to-Income Ratio

    From the data below we can see how loans from Lending Club charge-off over time controlling for the debt-to-income ratio of the borrower.

    Source: Orchard Platform

     

    ELEVATE CREDIT ANNOUNCES SECOND QUARTER 2017 RESULTS (Elevate), Rated: AAA

    Second Quarter 2017 Financial Highlights

    • Nearly 20% year-over-year revenue growth: Revenues totaled $150.5 million, an 18.7% increase from $126.8 million for the prior-year period.
    • Almost 29% year-over-year growth in loans receivable: Combined loans receivable – principal, totaled $481.1 million, a 28.7% increase from $373.7 million for the prior-year period.
    • Stable credit quality: Loan loss provision was 48.0% of revenues and within our targeted range of 45%- 55%. The ending combined loan loss reserve, as a percentage of combined loans receivable, was 13.8%, lower than the 15.7% reported for the prior-year period.
    • Customer acquisition costs within targeted range: The total number of new customer loans for the quarter was approximately 66,000 with an average customer acquisition cost of $294, within our targeted range of $250-$300.
    • Second consecutive quarter of net income: Net income of $3.0 million, or $0.08 per diluted share, versus a net loss of $7.5 million, or $(0.59) per diluted share, for the second quarter of 2016.
    • Adjusted EBITDA margin: Adjusted EBITDA totaled $19.8 million, up from $7.3 million in the second quarter of 2016. The Adjusted EBITDA margin increased to 13.2% from 5.8% for the prior-year period.

    Second Quarter 2017 Business Highlights

    • Elevate IPO. On April 6, Elevate began trading on the New York Stock Exchange under the “ELVT” ticker symbol.
    • $200 Million in Outstandings for Elastic. Just a year after achieving $100 million in outstandings, Elastic surpassed $200 million in total principal outstandings, with more than 120,000 open accounts.
    • Elevate Labs Launched. The Company launched Elevate Labs, including its new San Diego-based Advanced Analytics Center, underscoring its approximately $40 million annual investment in state-of-the art technology and data science.
    • RISE Enters Kansas with Line of Credit Product. Bringing additional responsible loan opportunities to non-prime consumers and expanding its product offering, RISE entered its 16th state, Kansas, the first state where RISE offers a line of credit product.
    • Savings for Customers. The average effective APR of its products for the quarter was 131%, down from 148% in the same quarter last year. The Company estimates indicate that Elevate’s products – Rise, Elastic and Sunny – saved customers approximately $304 million in the three months ended June 30, 2017 versus payday loans.
    Source: Elevate release q2-2017-release

    Elevate Reports Net Income of $ 3 Million on 0.5 Million in Revenue (Crowdfund Insider), Rated: A

    According to the company, revenues for the quarter totaled $150.5 million – an 18.7% increase versus year prior where Elevate delivered $126.8 million in revenue. Elevate reported net income of $3.0 million, or $0.08 per diluted share, versus a net loss of $7.5 million, or $(0.59) per diluted share, for the second quarter of 2016.

    Combined loans received were said to total $481.1 million, an increase of 28.7% from $373.7 from year prior quarter.

    Prosper pulls plug on anti-ID-theft app (American Banker), Rated: AAA

    Prosper Marketplace, one of the largest marketplace lenders, is discontinuing the Prosper Daily app.

    The app, formerly known as BillGuard and a favorite of many fintech insiders, helped users protect their identities and monitor their credit scores.

    The online lender said it will no longer have access to users’ financial accounts once the app is discontinued and that it will reimburse annual subscribers.

    Artificial Intelligence And The Future of Digital Lending (The Financial Brand), Rated: AAA

    To be a digital lender, banks and credit unions must do more than provide a digital app. Internal lending processes must be transformed to eliminate friction and unneeded steps, with artificial intelligence (AI) supporting proactive loan decisions.

    According to PwC, a financial organization must initially define what is desired from both a customer experience and operational efficiency basis around consumer lending. Next, banks and credit unions must build a digital lending strategy around the following organizational competencies. The path to becoming a true digital lending organization involves five steps.

    1. User-Centric Design
    2. Data-Driven Decision Making
    3. Flexible Infrastructure
    4. Effective Development Approach
    5. Organizational Agility

    Digital Borrower Expectations

    The expectations of the digital borrower have increased over the past several years, mostly based on marketplace offerings and digital experiences in other industries. While the interest rate and closing costs on loans are still primary considerations, the speed, simplicity, transparency and customer service of the entire process is important.

    According to the PwC report, Consumer Lending: Understanding Today’s Empowered Borrower, three out of four demographic segments prefer to be online for each phase of the lending process as opposed to traditional methods, such as in person or on the phone.

    While some lender apps offer the higher-ranking features – such as the ability to calculate the loan amount that the borrower can afford and the ability to lock in an interest rate on a loan, most of the other features are still not offered by most organizations.

    Being a Digital Lender is More Than Just Fewer Clicks

    To become a digital bank, organizations need to think beyond ‘minimizing the number of clicks’, reducing manual data entry, and improving the speed of decisions.

    The process of becoming a digital lender for the long-term moves investments from ‘digital features’ to a ‘digital mentality’ and process that can support changing digital lending options. It is a major move from investing in just digital output to investing in the digital input that works behind the scenes. It is a strategic framework for the future of digital lending.

    PeerStreet Integrates with Personal Capital to Provide More Detailed Investment Overview (PeerStreet Email), Rated: A

    PeerStreet, an award-winning platform for investing in real estate backed loans, has announced an integration with Personal Capital, powered by the Envestnet | Yodlee Data Aggregation Platform. Customers of both Personal Capital, an automated investment service with more than $4.8 billion assets under management, and PeerStreet can now view their PeerStreet positions within the context of their investment portfolio on Personal Capital.

    Realty Mogul’s REIT Turns One (Realty Mogul Email), Rated: A

    Celebrating its one year anniversary, MogulREIT I recently declared its twelfth consecutive month of 8% annualized return on investment. With ten assets across the country, MogulREIT I is a diversified portfolio of commercial real estate investments designed to provide consistent cash distributions, while protecting and returning capital contributions.

    Money360 Closes $ 143M in Commercial Real Estate Loans in Q2, Marking a Record-Breaking Quarter (Markets Insider), Rated: A

    Money360, a direct marketplace lender focused on commercial real estate, today announced that the company closed $143 million in loans in the second quarter, marking the lender’s best quarter to date. Money360 has now closed more than $350 million in total loans and is on pace to close more than $500 million by the end of the year. On average, the company is now closing $50 million in loans each month.

    A few of the $143 million in loans closed in the second quarter include:

    • A $15.6 million bridge loan for a three-tenant medical office property in Grand Forks County, North Dakota.
    • A $11.1 million bridge loan for the acquisition of a multi-tenant retail property in Wayne County, Michigan.
    • A $9.7 million bridge loan for a two-story, 198-room hotel property in Cumberland County, North Carolina.

    Read our analysis of Money360.

    Wells Fargo Sued in Yet Another Public Embarrassment (Financial Advisor), Rated: A

    The assault on the Wells Fargo brand continues, with a lawsuit accusing the bank of pushing almost 250,000 of its clients into delinquency by forcing them into auto insurance they didn’t need — or even ask for, Bloomberg reports.

    The bank allegedly made millions of dollars off unsuspecting clients, according to the proposed class-action lawsuit filed in San Francisco federal court and cited by the newswire.

    Wells Fargo allegedly didn’t check whether its clients taking out auto loans already had auto insurance, or ignored the fact that they did, Bloomberg reports.

    Insurance CEOs Say Change Is Coming (CB Insights), Rated: A

    Markel co-CEO Richard Whitt III on the $919M acquisition of State National

    We, like a lot of people, are starting to look at the insurtech space. And State National, I think they are ideally situated to sort of be the go between the insurtech folks and sort of your standard insurance carrier types. It’s a clash of cultures there, I would say.

    The insurtech folks are used to things happening lightening fast and with minimal regulatory issues and all that and that’s not insurance. So there almost needs to be a translator between insurtech folks and standard insurance folks. And that is a role that State National plays…And we see them helping us with our insurtech initiatives sort of being that translator between us and those folks.

    Chubb CEO Evan Greenberg: “Change is coming”

    But with that said, change is coming. And we are not alone in terms of carriers improving their capabilities, because of what technology brings that will lead that change. It’s around data, it’s around straight through process, it’s around data that improves the customer experience, while at the same time improving your ability to select risk and to do it quickly i.e. in seconds and to be able to then straight through process business.

    You taking out a loan for your business and technology enables those other forms of distribution. The customer will buy it from a desktop, the customer will buy it from a mobile device, they will buy it any time anywhere and they will service it anytime anywhere.

    Timothy Li of Fluid (Lend Academy), Rated: A

    Into this void steps Fluid, the brainchild of Timothy Li, our next guest on the Lend Academy Podcast. He has found a unique way to provide students access to credit and consequently a way to start building their credit while they are in college. Fluid provides small loans of up to $500 at 0% interest. It is a fascinating idea that we explore in some depth on the show.

    Are Technology Firms The Next Financial Service Providers? (Forbes), Rated: A

    Financial system regulatory costs continue to climb in part due to it being rife with problems that led to 45% of financial intermediaries, such as money transfer services and stock exchanges, experiencing economic crime. Blockchain increases transparency and decentralizes the financial system with encrypted, unforgeable records embedded in a secure network. By reducing transaction costs and removing intermediaries, blockchain technology is poised to increase mass peer-to-peer collaboration, which could make existing financial organizations unnecessary.

    Automated investment services, sometimes referred to as robo-advisors, are emerging as an easily accessible, cost-efficient solution to managing assets with 24/7 availability and annual fees of .2% to .5%, making it substantially less than typical rates.

    The financial technology upsurge is bringing accessibility and availability to the forefront, making existing banking options resemble archaic institutions. With apps that let you make quick, feeless transactions (such as Venmo) and peer-to-peer lending platforms (such as Lending Club), customers and millennials are welcoming these innovative platforms. According to a 2015 report, 75% of millennials visit bank branches either once a month or less than that, and 38% of them don’t use a branch to perform banking activities.

    Fintech, however, is fostering financial inclusion and building public confidence, evidenced by mobile platforms such as M-Pesa reaching 80% of households within four years.

    OCC files motion to dismiss fintech charter lawsuit (American Banker), Rated: A

    The Office of the Comptroller of the Currency has filed a motion to dismiss a lawsuit by state regulators challenging the agency’s fintech charter.

    2020 REI Group Launches REI Data Systems With Investorwell (Digital Journal), Rated: A

    Dallas- based 2020 REI Group has announced the creation of a data services and technology division to further their mission of providing products and services to real estate investors nationwide.

    The new division will be labeled as REI Data Systems and will be led by Mike Inman, Vice President of Technology for 2020 REI Group.  Inman was most recently IT Manager of Application Development for the City of Grand Prairie and has a vast background in cloud based applications, GIS mapping, mobile applications, and data analytics.

    The official launch for InvestorWell will be mid-August. The platform will help real estate investors find funding for their projects based on eight simple questions.

    The Role of Digital in Financial Planning (Insead Knowledge), Rated: A

    Long-term saving is a classic case study in behavioural biases. These must be managed and mitigated – whether it is through digital or face-to-face advice.

    Inertia is one such bias. While people will generally put off taking action, research has shown that if they are intimately involved in preparing a plan, they are more likely to stick to it. The most committed planners also tend to be the most financially literate.

    While robo-advisors are getting lots of press at the moment, they are mostly just a delivery mechanism. A nice user interface should not be a substitute for solid advice that ultimately addresses a key financial and behavioural problem. Digital poor advice is still poor advice.

    • Users should be asked, in non-misleading terms, whether they want a basic, average or luxury retirement lifestyle.
    • The language should be free of jargon and go to the heart of the users’ problem.
    • The tool should allow users to be actively involved in making the trade-offs based on their unique needs, wants and circumstances.

    Startups want to change what you insure and how you insure it (TechCrunch), Rated: A

    In the real world, however, insurance coverage hasn’t kept up with the social and economic changes of recent years. Sharing economies have gained scale. Jobs have gone from full-time to gig-based. And the vast millennial generation has entered adulthood intent on completing any complex transaction in a couple of minutes online.

    So far this year, insurance-focused startups have raised more than $700 million in venture funding, according to Crunchbase data, with significant backing from both traditional VCs and large insurers. The lion’s share of investment has gone to companies pioneering and popularizing coverage categories and delivery models, with a particular focus on millennial customers.

    One of the most richly funded players in this space is Trōv, which has an app for quickly insuring personal and work items like laptops, smartphones and high-end cameras. The five-year-old company raised a $45 million Series D round in April led by reinsurer Munich Re, bringing total funding to nearly $90 million.

    Cover, which just closed an $8 million Series A, offers a similar service. Customers take a picture of the item they want to insure and Cover offers a policy, underwritten by a partner insurance firm.

    One of the most richly funded insurance startups over the past few years is Metromile, which insures based on how much customers drive. Rack up few miles, and pay little beyond a small monthly base rate. Drive more, and it goes up. U.K.-based Cuvva, meanwhile, has raised seed funding to build out insurance offerings for short-term use of a car, for people learning to drive and for people who drive very little.

    Silicon Valley-based Hippo is also marketing itself as a new kind of homeowners insurance company, with policies that offer stronger protections for common valuables like home electronics.

    For short-term rentals, meanwhile, Slice Labs is partitioning off a space.

    Next Insurance, founded last year, sells coverage for yoga instructors, photographers, home contractors and others whose needs don’t always fit with standard insurance policies. The Silicon Valley company raised $48 million to date from VC and insurance industry backers. Bunker, which bills itself as an insurer for freelancers and independent contractors, is also scaling up. The San Francisco company closed a $6 million Series A round in May.

    One is Ladder, which has raised $16 million to build out a platform for offering direct-to-consumer term life insurance online. Another, Brooklyn-based Fabric, has raised $2.5 million for its digital platform offering instant quotes on accidental death coverage, as well as broader life insurance policies.

    An Attorney’s Take On Real Estate Crowdfunding (RealCrowd), Rated: A