Thursday October 25 2018, Daily News Digest

Funding Circle Holdings PLC

News Comments Today’s main news: SoFi CEO explains how market volatility, rising interest rates create opportunities. Amazon debuts no-fee AmEx card for small businesses. Funding Circle broker channel hits 1B GBP lending. China Rapid Finance is expected to break even. Today’s main analysis: Funding Circle’s short-lived rally. Today’s thought-provoking articles: Is student loan debt creating a millennial class […]

Funding Circle Holdings PLC

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United States

SoFi CEO Anthony Noto: Market volatility, rising rates create ‘opportunity for us’ (CNBC) Rated: A

Rising interest rates and market volatility, while feared on the Street, create an opportunity for online lending platform SoFi to gain new customers, according to CEO Anthony Noto.

“When the markets pull back, people evaluate: ‘Where am I putting my money from an investment standpoint?'” Noto said on CNBC’s “Closing Bell” on Tuesday.

Made conscious decision to focus on quality, not quantity of loans: SoFi CEO Anthony Noto from CNBC.

Amazon Debuts No-Fee AmEx Card to Lure Small-Business Spending (Bloomberg) Rated: AAA

Amazon.com Inc. and American Express Co. are upping the ante in their bid for small-business spending.

The two companies unveiled a new co-branded card for small businesses on Tuesday. Cardholders with an Amazon Prime membership will be able to choose between an interest-free loan for 90 days or 5 percent back on purchases made at Amazon.com, Amazon Business, Amazon Web Services and Whole Foods Market, the companies said in a statement. The no-fee metal card will also offer 2 percent back on purchases at U.S. restaurants and gas stations and on mobile-phone services.

Student-Loan Debt Is Bringing on Millennial Class War (Vice) Rated: AAA

MagnifyMoney, an independent service that compares financial products and is affiliated with the loan marketplace LendingTree, recently analyzed 2016 data from the Federal Reserve and estimated the average millennial with student debt had 75 percent less net worth than their debt-free peers. Though many of the stats they calculated might have been skewed by extremes—think people with debt loads of $200,000 and trust-fund kids worth seven figures—they were able to reach some pretty startling conclusions. For instance, the median net bank account balance (checking and savings) of all grads under 35 who had loans, they found, was $5,500, while it was some $10,180 for those who didn’t.

So what’s the most meaningful difference between those with loans and without?
The one that’s really most costly is when you look at the retirement savings. On that side, the average grad under 35 with debt has around $21,000 in retirement savings. Someone who doesn’t have student loans has an average of almost $40,000.

Credit Card Stats & Studies (Hub Wallet) Rated: AAA

Source: Hub Wallet

Building Loyalty with Gen Z and Millennials Starts with a Better Experience (Globe Newswire) Rated: AAA

In particular, changes in the credit card market have been heavily influenced by the youngest generations. While TransUnion studies have found that consumers generally have a much higher propensity of opening their next credit product with a lender with whom they already have multiple relationships, this doesn’t appear to hold true for Gen Z. Younger consumers are engaging with new lenders rather than going to existing lenders for new products. In the report, Gen Z respondents indicated that they were the least likely to open a new credit product with a financial institution as a result of an existing relationship with that lender.

While consumers are carrying more credit cards in their wallets today than in 2010, the industry has seen five straight quarters of declining year-over-year origination growth. The study also found that the average duration for which a credit card remains open has shortened across the majority of age groups, which would indicate shifting loyalty.

Source: Trans Union

The Fintech 250: The Top Fintech Startups Of 2018 (CB Insights) Rated: AAA

The financial services industry is being transformed by insurgent startups. From capital markets to insurance and digital banking to wealth management, the Fintech 250 are among the most promising of these companies globally.

The entire 

Lendio Named to the 2018 CB Insights Fintech 250 List of Fastest-Growing Fintech Startups (PR Newswire) Rated: A

CB Insights today named Lendio to the second annual Fintech 250 list, a prestigious group of emerging private companies working on groundbreaking financial technology.

“It’s an honor for Lendio to be listed among the innovative companies driving the fintech industry forward,” said Brock Blake, Lendio CEO and founder. “Lendio is doing its part to power the economy by bridging the financing gap for small businesses. We are committed to shaping the future of marketplace lending to help business owners unlock their financial potential.”

Lendio, the nation’s leading marketplace for small business loans, recently announced it has facilitated over $1 billion in financing to more than 51,000 small businesses across the U.S. Through access to this growth capital, Lendio’s small business customers have generated an estimated $3.8 billion in gross economic output and created more than 25,000 jobs nationwide. Lendio’s milestone comes after an 80 percent increase in loans funded through its platform in the last year.

As Rates Rise and Recession Threatens, Alternative Lenders Batten Down the Hatches (Bank Innovation) Rated: A

The CEOs of Prosper Marketplace, Lending Club, and Social Finance Inc. all spoke to a common theme – preparing for the coming storm and choosing loans for quality, not quantity. JPMorgan Chase has predicted a 60% chance of recession by 2020, and it’s not clear how traumatic an event it will be.

JPMorgan signed a deal with Plaid for customer data sharing (Business Insider) Rated: A

JPMorgan on Monday signed an agreement with Plaid, a technology company that connects bank accounts with fintech apps like Robinhood, Venmo, and Acorns, that will give its customers better control over their personal data.

Plaid will access JPMorgan’s customer data through a secure application programming interface or API, allowing customers to share their financial information more easily and safely. Banks including JPMorgan have pushed back against so-called screen scraping, another way for fintech apps to companies to access customer data that generally is viewed as less secure.

Goldman shifts Marcus digital bank to its wealth unit (American Banker) Rated: A

Goldman Sachs Group is shifting a heavily touted business line into its wealth management unit as the bank eyes expansion through products that can be pitched to the division’s customers.

The firm is handing oversight of the Marcus business — its retail-banking effort, which offers personal loans online — to its $1.5 trillion investment management division, according to a memo seen by Bloomberg. The move is aimed at starting new business offerings under the Marcus brand that can be sold to the unit’s expanding roster of clients.

A spokesman for Goldman Sachs confirmed the contents of the memo.

U.S. ‘Unbanked’ Population Continues to Fall (Wall Street Journal) Rated: A

The number of U.S. households without a bank account fell to 6.5% in 2017, according to a federal government survey, as the improved economy helped bring mainstream banking services to more people.

The Federal Deposit Insurance Corp. said Tuesday the number of ”unbanked” households reached its lowest level last year since the regulator began the biennial survey in 2009. The share of households without an account at a federally insured financial institution was down half a percentage point from 7% in 2015.

We’re Closer Than you Think to Autonomous Finance (Lend Academy) Rated: A

Autonomous finance isn’t a well known term within fintech, but it may be the biggest innovation in the consumer finance space in recent years. Ken Lin, the CEO and Co-Founder of Credit Karma talked with us recently on the Lend Academy podcast about this concept of autonomous finance, a concept that is slowly turning into reality.

Credit Karma is in the unique position to capitalize on this idea, particularly when it comes to the lending business, which still relies heavily on credit scores. The company has built a platform in which users can track their credit score over time and get suggestions on products based on their financial life. From my perspective Credit Karma has a monopoly of sorts on this business with no other serious competitors at scale. Due to their sheer size and the engagement with their members, Credit Karma is a significant lead generator for the major online lenders that exist today.

New UltraFICO score stokes concerns about data privacy (American Banker) Rated: A

A new credit score that includes a consumer’s cash flow alongside their credit score — dubbed UltraFICO — is winning praise for its potential to help expand access to credit but also stoking concerns about its data privacy implications.

FICO announced this week that it is testing a new credit score with Experian and data aggregator Finicity that draws on several months’ worth of data from consumers’ bank accounts. The idea, according to FICO, is to create a “second chance” score that could allow consumers who’ve been denied credit due to the traditional model another shot at obtaining it.

Short on Cash? Use Your Employer as a ‘Payday Lender’ (Nerd Wallet) Rated: A

In recent years, startups from Silicon Valley and beyond have stepped up to offer payday alternatives through the workplace. Some, including Earnin and PayActiv, have put a new twist on the two-week pay cycle to give people access to their wages as soon as they’ve earned them. Others, such as HoneyBee, SalaryFinance and TrueConnect, allow employers to offer low-cost emergency loans as an employee benefit.

Paycheck advances in the modern workplace

What technology companies like Earnin and PayActiv say they offer is a streamlined approach for employees that retains the employer’s traditional two-week pay cycle.

Navient eyes end of non-compete with Sallie Mae in January (Asset Securitization Report) Rated: A

Navient Corp. has been ramping up origination of refinance student loans even as rising interest rates reduce the potential savings for borrowers. Earnest, the online lender it acquired late in 2017, originated $903 million of refinance loans in the third quarter, bringing year-to-date originations $2 billion. But so far, the servicing giant’s ability to expand has been limited because of a non-compete agreement with the largest private student-lender, SLM Corp., better known as Sallie Mae.

Under the terms of their split in 2014, Navient is unable to refinance either private student loans made by Sallie Mae or any federally guaranteed student loans held by Sallie Mae.

The non-compete clause expires in January, and Navient CEO Jack Remondi doesn’t plan to waste any time. On a third quarter conference call Wednesday, Remondi made it clear that he sees plenty of potential to refinance loans made or held by Sallie Mae.

Kabbage Extends Access Of Small Business Lending (Benzinga) Rated: A

Kabbage is now lending over $10 million per day to small businesses, in congruence with the company’s recent addition of 30,000 customers in 2018. The company reported its first $500 million quarter this year, according to the press release.

The lender serves up to 1,400 businesses daily and has demonstrated a 68 percent increase of working capital accessed by Kabbage on mobile devices, as well as a 283 percent growth in use of the Kabbage Card since 2017.

“It was a great growth quarter for the company, and is a direct result of developing flexible and convenient solutions that simplify accessing capital for small businesses,” Kabbage CFO Scott Rosenberg told Benzinga.

Beyond Kickstarter: 10 Niche Crowdfunding Platforms for Startups (Entrepreneur) Rated: A

1. CrowdStreet

If you’re building a real-estate investment business — or developing real-estate projects — check out the online crowdfunding opportunities on CrowdStreet.

4. FundThatFlip

If your business is remodeling and reselling homes, FundThatFlip offers a place to get quick cash to fix up and resell. Investors put in a minimum of $5,000.

Guaranteed Rate Ranks as the Best Mortgage Lender for Online Mortgage Service by U.S. News & World Report (Bankless Times) Rated: A

Guaranteed Rate, an industry leader in technological innovation, tops the list of the Best Mortgage Lenders of 2018, according to U.S. News and World Report. The Chicago-based retail mortgage lender was named the Best Lender for Online Service with its groundbreaking advances to make the mortgage experience fast, simple and secure with its digital platform.

US News & World Report recommended the Guaranteed Rate mortgage process as best for borrowers who:

  • Want to complete most of the mortgage process online
  • Want help figuring out the right product for their situation
  • Want access to a variety of home loan options

Bought Mega Millions Tickets? Here’s What You Could Have Made If You Invested That Money Instead (Time) Rated: A

Americans spend a lot of money playing the lottery. Approximately 370 million lottery tickets were sold between Saturday and Tuesday before the Mega Millions drawing, according to a lottery official. The U.S. generated nearly $73 billion in lottery sales in 2016 and CNN reports that in 2017, U.S. residents spent about $73.5 billion on tickets. The average American spends about $223.04 per year on lottery tickets, loan marketplace LendEDU found in a report that calculated its average by dividing the 2016 lottery revenue by the U.S. population (325.7 million).

Milwaukee, Cincinnati and Minneapolis Are the Most Promising Places to Open a Restaurant (PR Newswire) Rated: A

LendingTree, the nation’s leading online loan marketplace, today released its study on the best cities to open a restaurant. The study found that while traditional foodie destinations like New York and San Francisco are saturated with restaurants, up-and-comers have room to grow. The restaurant population in cities like MilwaukeeCincinnati and Minneapolis cities is less dense than in other areas, and labor costs are lower.

LendingTree analyzed the 50 largest U.S. cities to see which offer prospective restaurateurs the best shot at success. Many top spots are in once-overlooked Midwestern cities now experiencing urban renewal. The least promising cities have historically been the restaurant industry’s most competitive.

Nav and Clover Partnership Streamlines Access to Business Credit Scores & Financing (PR Newswire) Rated: A

Today, Nav and Clover, a subsidiary of First Data, formally announced an integrated, multi-year partnership to deliver U.S.-based Clover users access to their free business credit scores, as well as custom-tailored business financing and credit card options.

The Federal Reserve Bank and other surveys consistently report around 70 percent of small business loan applicants are denied by their bank. As credit data is a primary way that banks and other financial institutions evaluate business loan applicants, the integration of business credit scores and insights directly into Clover’s dashboard enables these merchants to manage this important data.

Memorial Healthcare System Taps ezCarePoint to Provide Instant Online Financing for Patients’ Out-of-Pocket Medical Costs (AP News) Rated: A

Patients at facilities run by South Florida’s Memorial Healthcare System (MHS), one of the nation’s largest public healthcare systems, can now easily and quickly finance their out-of-pocket medical fees online, thanks to a new program powered by ezCarePoint, a next generation medical financing technology platform created by ezVerify, a Sunrise, Fla. based company and LendingPoint, a Kennesaw, Ga. based company.

RealtyFolio Updates Its Platform for a Big 2019 (PR Newswire) Rated: B

RealtyFolio, the online real estate investing platform has updated its interface, including a redesign, rebrand, and upgraded features. The upgrade was meant to “make it even more comfortable for clients to navigate the platform and for clients to be able to invest in real estate projects, quickly and easily,” according to the company’s CEO, Jonathan Klein. He went on to say that they “expect a very big year in 2019, with many projects in the works, and a lot of demand from clients.”

RealtyFolio is ushering in the future of real estate investing by allowing you to build a real estate portfolio online. With over 30 years of real estate investing and management experience on its team and a vast network of strategic partners across the United States, in cities such as New YorkMiami and Los AngelesRealtyFolio gives everyone a chance to swim with the sharks.

Tamarack Hires Seven and Expands Headquarters (ELFA) Rated: B

Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has moved to a new headquarters in the North Loop, doubling their space, and added seven new positions over the past three months to meet the growing demand.

With over 25 years of Leasing and Lending experience and an expert in InfoLease®, Tamarack hires on George Burke. Burke adds extensive experience to Tamarack’s back office software engineering team.

White Oak ABL Appoints Griffith to Managing Director (ABL Advisor) Rated: B

White Oak ABL, LLC, an affiliate of White Oak Global Advisors, LLC, announced the appointment of Clark D. Griffith to Managing Director, based in San Francisco. Griffith joins from Encina Business Credit where he held the position of Senior Managing Director in charge of West Coast originations, offering lines of credit and term loans from $5 million to $50 million.

PNC to offer online business loan option in 2019 (Delaware Business Now) Rated: B

PNC announced that in 2019 it plans to begin offering fully digital business lines of credit, up to$100,000.

PNC will partner withOnDeck and use its Platform-as-a-Service to simplify and accelerate the conventional lending originations processes for PNC Bank’s small and medium-sized business customers.

PNC will combine its expertise with ODX’s online origination technology and professional services to create PNC Small Business Lending.

TickPick Announces Affirm Partnership, Expands Payment Options at Checkout (PR Newswire) Rated: B

TickPick, the no-fee ticket marketplace that is transforming the industry, announced today a partnership with Affirm, the company founded by entrepreneur Max Levchin to provide fair and honest alternatives to traditional credit. This new payment option makes TickPick the first and only secondary marketplace to offer Affirm, which allows customers the ability to spread out the cost of their purchase over time through simple monthly payments.

United Kingdom

Funding Circle’s broker channel reaches £1bn lending milestone (Bridging and Commercial) Rated: AAA

After four consecutive record-breaking quarters, the in-house broker team has supported the growth of 9,600 British businesses.

Prior to the lending milestone, the P2P platform promoted Tom Shave to head of broker.

Tom has assisted in developing a diverse network of introducers, big and small, across the country.

UK regions come to the fore in producing $ 1bn tech companies (London Loves Business) Rated: A

The UK’s leading tech clusters are competing head to head with European capitals, according to new analysis of company growth, in a sign that the success of the UK tech sector is pushing far beyond its London heartland.

Following the IPOs of Farfetch and Funding Circle, the UK is now home to 15 unicorns and six cities have produced so-called unicorns – $1bn tech companies – according to research prepared for Tech Nation and the Government’s Digital Economy Council by venture capital analytics company Dealroom.co. This latest research is published ahead of the Secretary of State for Digital, Culture, Media and Sport’s first meeting with the Digital Economy Council on 24 October 2018.

Looking at the creation of $1bn tech companies, Oxford and Cambridge combined have produced more fast-growing tech companies than both Paris and Berlin.

China

Loss-Making China Rapid Finance Limited (NYSE:XRF) Expected To Breakeven (Simply Wall St News) Rated: AAA

China Rapid Finance Limited’s (NYSE:XRF): China Rapid Finance Limited, through its subsidiaries, provides a consumer lending marketplace for lenders and borrowers in the People’s Republic of China. The US$156m market-cap posted a loss in its most recent financial year of -US$122m and a latest trailing-twelve-month loss of -US$49m shrinking the gap between loss and breakeven. As path to profitability is the topic on XRF’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for XRF.

European Union

Klarna Talks Split Payments at Money2020 Conference (Cheddar) Rated: A

Klarna is launching a new ‘Slice it in 4’ product, allowing users to split up payments. Michael Rouse, chief commercial officer of Klarna, explains how it works.

INDOCHINO Chooses Klarna to Give Consumers the Power to Pay Over Time (PR Newswire) Rated: B

INDOCHINO shoppers can now Slice it at the checkout by using Klarna’s online consumer financing to easily spread the cost of their purchase over 6-36 months. Slice it has a simple 4-step credit application process, real-time decisioning and is offered within the merchant’s own website – no re-directs – for a frictionless and fast purchase experience.

By taking the premium made-to-measure experience direct to the consumer, INDOCHINO has created a superior alternative to off-the-rack clothing at ready-to-wear prices. Their immersive multi-channel experience enables customers to order their custom garments with ease online or in-person at one of 30+ showrooms across North America

German fintech poster child N26’s major security gap (Handelsblatt) Rated: A

Germany’s fintech darling N26 is potentially vulnerable to money laundering and terrorism financing, according to research by Handelsblatt’s sister magazine WirtschaftsWoche, which exposed a security gap at the online banking startup.

The apple of discord is how easily someone can open an account with a fake ID. A WirtschaftsWoche correspondent saw first hand how a man, Milo T., scanned a friend’s ID, added his own passport photo to the ID, printed it out and stuck it atop of a white plastic card that was the same size as the office ID card in his country. He cut the edges to make them round and voilà: a new identification card.

It took five minutes and the result is so blatantly a forgery that it would fail to convince even the laxest of nightclub doormen. None of the holograms or other security features found on original IDs can be seen on the fake. Regardless, Milo effortlessly used this ID to set up an N26 account, and this wasn’t a one-off occurrence. WirtschaftsWoche documented how several people opened N26 accounts using forged papers.

Robo.cash welcomes new loan originator (Peer2Peer Finance  News) Rated: B

LATVIAN peer-to-peer payday lender Robo.cash has added a loan originator from Kazakhstan to its platform.

Z-FINANCE provides short-term private lending in Kazakhstan with an average loan size equivalent to €60 (£52).

Investors on the Robo.cash site can now invest in these loans, which have a repayment period up to 30 days and an expected interest rate up to 12 per cent per annum.

Z-FINANCE was launched in July this year and currently lends through a network of 102 sales branches in Kazakhstan.

International

ID Finance Group reports 61% revenue growth for the nine months of 2018 (Fintech Finance) Rated: AAA

ID Finance Group has reported 61 per cent revenue growth and revenues of $141.3 million for nine months of 2018 following strong growth in Europe and Latam. The data science, credit scoring and digital finance company issued $215.7m in loans in the first nine months of the year, a 64 per cent increase on the same period last year.

Its European and LatAm operations comprising Spain, Poland, Brazil and Mexico demonstrated exceptional growth experiencing a 197 per cent revenue growth and revenues of $32.6 million for the nine months of 2018. It issued $63.8 million in loans, a 142 per cent increase on the same period last year, and has also grown its customer base to over one million registered users with 20,000 new users joining weekly.The Group has now separated its European and LatAm operations from its CIS businesses (comprising Russia, Kazakhstan and Georgia) and it is functioning as a separate entity under the ID Finance name.

Moven Enterprise Expands Availability of AI Smart-Banking Solution with Global Launch (Business Wire) Rated: A

Moven Enterprise, the smart-banking solutions division of Movencorp, Inc, today announced that it has expanded its footprint globally to help banks deepen their digital customer engagement and drive new revenue streams while significantly reducing attrition and acquisition costs.

After working successfully with TD Bank (TD) in Canada, Westpac in New Zealand, and others, Moven is now bringing its AI-driven digital banking platform to banks across LatAm, APAC, Africa, the Middle East and Europe. The global expansion is well-positioned as Moven Enterprise received investment from SBI Group to enhance Moven’s footprint in Asia earlier this year. This included the formation of a joint venture, SBI Moven Asia. The company’s innovative platform leverages a bank’s data and uses proprietary algorithms to create contextual, individualized smart-banking experiences for consumers; providing them the right advice at the right time with the right offer and helping them move towards a better financial lifestyle.

The Complete Beginner’s Guide to Becoming a Private Lender—Pros & Cons (NuWire Investor) Rated: A

Private lending has picked up the pace in recent years. This is despite high-interest rates charged by private lenders. Many reasons have pushed lenders into this space including tightened requirements by banks.

In addition, banks tend to shy away from lending money to small businesses and startups. As a result, many borrowers look for other ways of funding, and such opportunities provide opportunities to private lenders.

However, starting out as a private lender is no easy walk in the park. Numerous risks lurk in the business, and you need to tread with caution. In this article, you’ll learn how to become a private lender and some of the pros and cons involved, so if you have an interest in becoming “a bank,” read on.

Fintech Streamlines Socially Responsible Impact Investing Via Robo-Advisors (Investor Place) Rated: A

What makes an investment socially responsible? There are several criteria. For instance, SRI investing avoids tobacco companies as their products cause health problems and death. Typically, a company’s social responsibility rating is based on its performance in three categories: environmental, social and governance (ESG). Positive practices across one or more of these spheres can land a company in the socially responsible category.

At the same time, robo-advisors are digital investment managers designed to grow your wealth through investing with models are based on sophisticated computerized algorithms, including ESG consideration. These fintech darlings have answered the call for socially responsible robo-advisors with a host of diverse options. Of course, you could choose a socially responsible mutual fund or ETF on your own. But, for the busy investor, let one of the many robo-advisors take charge of your investing, in line with your personal values.

Uphold Joins Crypto Lending Platform Cred for New Lending and Earning Solutions (Coin Speaker) Rated: A

In today’s business community, partnership has become one of the most promising tools on the way to new amazing developments and interesting projects that are aimed at offering customers really unique experience and opening new opportunities for them.

News about recently established collaborations regularly appears here and there. This time the headlines are made by Uphold which is a major global digital money platform, that has conducted transactions worth over $4.0 billion across 184 countries, and Cred that is a crypto-backed lending provider with over $250 million in credit facilities.

Joint Projects

Having announced their partnership Uphold and Cred have revealed their plans to launch two cutting edge blockchain-based consumer finance products: Uphold Earn and Uphold Borrow. Both products are aimed at helping customers to earn interest from stablecoin holdings and borrow money against the cryptocurrencies they have.

India

Indian P2P Lending Operators forms Association to Make P2P Industry More Credible (Indian Web2) Rated: AAA

After the Reserve Bank of India unveiled guidelines last October recognizing the need for peer-to-peer lending platforms as NBFC-P2P in the country, the regulatory authority had issued first license in May 2018 and since then 9 players have been recognized as NBFC-P2P companies. More than 12 companies are in the process of getting approval from the regulatory authority. Some of them are at advance to mid-level stage.

To represent the NBFC-P2P industry at various front as well as to represent country’s P2P lending industry at international forums, most of existing & new players have teamed-up and formed a registered body – Association of NBFC P2P Platforms.

The association has been registered under The Society Registration Act, 1860. Mr. Pramod Akhramka has been elected as President, Mr. Rajiv Ranjan as Secretary and Mr. Mukesh Bubna as Treasurer of the association.

Choose bank or online lender based on nature of loan (DNA Online) Rated: A

Unexpected expenditures often come knocking on your door when you want them the least. The reasons could range from maintenance for your vehicle to your old washing machine that needs to be replaced. The plus point of such expenses cropping up during the festive season is that you can always get a good bargain online (or at the store nearby). The fact still remains that these are expenses nevertheless. And that too when your festive expenditure is already lined up, leaving no financial bandwidth.

At times like these, loans bring a sigh of relief. But with so many options available in the market, whom should you approach with your loan requirement- banks or digital lending platforms?

Today, Indian consumers are benefitting from a range of financial products and financial institutions (FI) such as banks, non-banking finance companies, online lending platforms, etc, available at their disposal. If you are planning to take a loan or feel like there’s a possibility of availing the same in the near future, you must primarily understand that every lender has its own unique pros and cons. Some are quick in terms of loan approval and disbursal, some are cost-effective, some offer greater flexibility to their customers, while some offer innovative products that are more relevant for an applicant.

Authors:

George Popescu
Allen Taylor

Tuesday October 9 2018, Daily News Digest

LendingClub

News Comments Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager. Today’s main analysis: Gen Z is more optimistic than millennials about home ownership. Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate […]

LendingClub

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United States

United Kingdom

China

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United States

Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA

The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7%  – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.

Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.

In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.

PeerIQ’s Learning of the Week

This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.

Source: PeerIQ

LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA

LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations.  Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.

Key findings

  • Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
  • South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
  • Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
  • Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
  • Older is smaller. Cities with older housing stock have smaller houses, including Detroit at  No. 45 on our list.
Source: LendingTree
Source: LendingTree

More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA

Key takeaways:

  • Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
  • College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
  • Gen X chooses intergenerational living to care for relatives more often than any other generation
  • Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
  • Gen Z to pose serious competition to Millennials on the real estate market
  • Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Source: PropertyShark

Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.

Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.

Source: PropertyShark

B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A

B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.

Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.

Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A

Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.

The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.

Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A

Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”

Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A

A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.

The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.

Fed studies rural branch closings (American Banker), Rated: A

For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.

The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.

AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B

American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.

United Kingdom

Are there too many property investment platforms? (Development Finance Today), Rated: A

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.
Source: Development Finance Today

I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A

Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises.  This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.

Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers.  We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.

Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B

Multiply is the latest fintech app launching on the Apple App Store, which wants to be your own personalised financial adviser so you can understand your money and the best things to do with it.

How Manchester entrepreneurs should begin investing (About Manchester), Rated: B

  • Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China

China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA

China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.

China Rapid Finance then explained it is focused on the next two process steps:

  • A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
  • verification of inspection results by the regional P2P Rectification Office to conduct on field inspections

China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A

According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.

Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.

The digital divide: inclusion must not create exclusion (The Finanser), Rated: A

There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy?

European Union

H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA

Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.

H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.

Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A

MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.

Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.

Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A

Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.

It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.

Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B

Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.

International

China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA

Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.

Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA

TD Ameritrade continues to explore how to connect with its clients over different platforms.

The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.

TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.

Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A

Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.

APAC

KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA

Telco PLDT, investment firm KKR and Tencent are part of a $175 million investment in Philippine digital tech company Voyager Innovations.

MENA

UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA

Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies500 Startups, and other high-level strategic individual investors.

Authors:

George Popescu
Allen Taylor

Wednesday August 30 2017, Daily News Digest

Prosper

News Comments Today’s main news: Prosper performance update for July 2017.Top Mozido executives quietly left company.White House OKs delay of fiduciary rule.Funding Circle kicks off 12M marketing campaign with TV ad.LATTICE80 to open London fintech hub.Klarna profits up 130%+.RateSetter hits 2,000 broker milestone. Today’s main analysis: Millennials prefer auto, personal loans to credit cards. Today’s […]

Prosper

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Asia

South America

Canada

Africa

News Summary

United States

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

Today we are sharing performance data from the Prosper portfolio for July 2017.

Our risk team implemented a credit tightening in July aimed at removing certain populations of borrowers from originations on a go-forward basis. As a result of this credit tightening, the overall distribution of the book shifted slightly towards lower risk loans. This slight shift resulted in an overall portfolio coupon decrease of 45bps and an overall return estimate decrease of 26bps.

Additional highlights from the July Update include:

  • Charge-off levels in 2016H2 vintages continue to show meaningful improvement compared to 2016H1 vintages.
  • Periodic delinquencies moved higher for 2016 and 2017 vintages.
Source: Prosper

The Top Executives Of Former Fintech Unicorn Mozido Have Quietly Left The Company (Forbes), Rated: AAA

The top two executives of Mozido, a financial technology company that raised some $300 million to develop a mobile payments business, have quietly left the company.

On its web site, Mozido currently lists Todd Bradley as its CEO, but Bradley said in a brief interview that he left the company in June. Bradley’s departure appears to have left Mozido without a chief executive officer. Bradley has also left Mozido’s board but the company’s web site still lists Bradley as a director.

Scott Ellyson, Mozido’s chief financial officer who is listed on Mozido’s web site as its second-most senior executive, has also left the company, according to Bradley. Ellyson’s LinkedIn page currently does not mention his time at Mozido. He did not respond to a request for comment.

Three weeks ago, Michael Liberty, the founder of Mozido, was sentenced to four months in prison and a $100,000 fine by a federal judge. Liberty pleaded guilty in November 2016 to making illegal campaign contributions.

Digitalization Among Factors Pushing Millennial Credit Preferences Toward Auto and Personal Loans (NASDAQ), Rated: AAA

As the first generation to be fully immersed in mass-market digitalization, Millennials are slowing their credit card usage while increasingly using other credit products such as personal loans. A just-released TransUnion (NYSE:TRUstudy found that Millennials are carrying on average two fewer bankcards and private label cards than Generation X (“Gen X”) consumers at the same respective ages. Conversely, Millennials’ appetite for new auto and personal loans has grown at a faster rate than Gen X borrowers at the same age points.

Credit Cards Out of Fashion; Cars and Personal Loans in Style

The study found that, in addition to carrying fewer credit cards than Gen X consumers, Millennials also are maintaining lower balances on those cards. TransUnion analysts believe that this is partly driven by the CARD Act of 2009, which limited the marketing of credit cards on college campuses. The increased use of debit cards also plays a role in this shift. The study pointed to recent Federal Reserve data, which found that debit card transactions grew from 8 billion in 2000 to 60 billion in 2015. In contrast, credit card transactions only increased from 16 billion to 34 billion in that same timeframe.

Source: TransUnion

Millennials and Mortgages

Among all major credit products, the mortgage market has been the slowest to recover from the Great Recession, with home ownership rates still below levels observed in 2009. Overall, homeownership is down 0.8% since the Recession, but this number grows to -1.6% for 35-44 year olds and -2.1% for those under 35.

As a result of credit access being limited and, per the U.S. Census Bureau, affordability being affected by income gaps between the two generations, TransUnion’s study found the percentage of Millennials opening mortgages between the ages of 21-34 (5%) is nearly half of the Gen X group (10%) when they were that age. TransUnion observed a smaller but still material gap (13% for Millennials vs. 16% for Gen X) within the Super Prime risk tier, suggesting that this dynamic is not driven solely by credit supply.

TransUnion’s study found that access to mortgages has declined dramatically for 21-34 year olds. In 2000, 39% of mortgage originations in this age range were comprised of non-prime borrowers.  In 2016, non-prime borrower originations declined to 20%.

Further impacting mortgage originations to Millennials are lower income levels. Per the U.S. Census Bureau, median household income of consumers ages 25-34 declined from $60k in 2000 to $57k in 2015.  The impact can be seen in the housing status of these consumers: a larger portion of younger adults ages 25-29 are living with their parents, rising from 15% in 2000 to 25% in 2014.

Despite these challenges, a TransUnion survey of 1,340 consumers in July 2017 found that nearly 75% of Millennials ages 23-37 said they plan on purchasing a home in the future.

White House OKs DOL Fiduciary Rule Delay (Financial Advisor IQ), Rated: AAA

The Office of Management & Budget of the White House has approved the Department of Labor’s request to push back the final implementation date of its fiduciary rule — originally scheduled for January — to July 2019, the Wall Street Journal reports.

Banks Send Warning Signs for Economy (WSJ), Rated: A

Being a key transmission mechanism for savings, investment and spending, the banking sector is worth watching as a barometer for the health of the overall economy. Lately it has been acting as one would expect toward the end of an expansion phase.

Most glaringly, after strong lending growth for several years, momentum clearly is slowing. In its quarterly report on the sector, the Federal Deposit Insurance Corp. found that total loans and leases by banks and other insured institutions rose by just 3.7% from a year earlier at the end of June. That is the third consecutive quarterly deceleration and is down from a 6.7% pace of growth a year ago.

After a period of strong lending, it is also typical for defaults to start ticking up as levels of indebtedness rise and bills come due. This is indeed happening, at least among consumers. Credit-card charge-offs soared by 24.5% in the second quarter, according to the FDIC, marking the seventh straight increase. Charge-offs on loans to commercial and industrial borrowers, however, declined by 9.7%, possibly due to a recovering energy sector.

‘Madden fix’ bills are a recipe for predatory lending (American Banker), Rated: A

Currently pending in both houses of Congress are versions of the Protecting Consumers Access to Credit Act of 2017 — bills that would “fix” the 2015 appellate court decision in Madden v. Midland Funding LLC. Unfortunately, these so-called legislative solutions are based on a faulty reading of case law.

The Madden case held that National Bank Act preemption of state usury laws applies only to a national bank, and not to a debt collector assignee of the national bank. The decision has potentially broad implications for all secondary markets in consumer credit in which loan assignments by national banks occur: securitizations, sales of defaulted debt and rent-a-BIN lending.

Unfortunately, the “Madden fix” bills are overly broad and unnecessary and will facilitate predatory lending.

The actual “valid-when-made” doctrine provides that the maker of a note cannot invoke a usury defense based on an unconnected usurious transaction. The basic situation in all of the 19th-century cases establishing the doctrine involves X making a nonusurious note to Y, who then sells the note to Z for a discount. The discounted sale of the note can be seen as a separate and potentially usurious loan from Y to Z, rather than a sale. The valid-when-made doctrine provides that X cannot shelter in Y’s usury defense based on the discounting of the note. Even if the discounting is usurious, it does not affect the validity of X’s obligation on the note. In other words, the validity of the note is a free-standing obligation, not colored by extraneous transactions.

Recovering Non-Performing Loans: Better Options (Lend Academy), Rated: A

A small business lender knows that a certain percentage of loans will become NPLs and typically has parameters the business must stay within to remain profitable. The lender may pursue NPLs on an in-house basis indefinitely past the charge-off date or turn them over to a collections agency at some point. Both options create problems in the fintech business model.

The best recovery option for online small business lenders is to manage NPLs in-house until they become charge-offs, then use the services of a reputable commercial debt buyer. This is how it works.

  • The lender works with the commercial debt buyer on a one-time basis, periodically, or in a forward-flow relationship where NPL information is sent regularly to the buyer.
  • A non-disclosure agreement (NDA) is signed and the lender provides information to the buyer on the pool of non-performing assets. This includes the number of accounts and amount of outstanding balances.
  • Buyer assigns a value to the NPLs and offers a price.
  • Lender signs the purchase agreement. Typically, buyers in forward-flow relationships will send payment within 24 hours.
  • Reputable buyers then work to collect the debts over time, without using the lender’s name and in a sensitive manner, and without reselling the debt.

TEN-X PARTNERS WITH MONEY360 TO OFFER FINANCING SERVICES FOR COMMERCIAL REAL ESTATE TRANSACTION MARKETPLACE (Money360), Rated: A

Ten-X Commercial, the nation’s leading online real estate transaction marketplace, today announced that it has partnered with Money360, a technology-enabled direct lender focused on commercial real estate (CRE), to offer financing for properties available for sale. The partnership will expand the investor pool for commercial properties listed on Ten-X by giving prospective buyers assurance they will be able to procure the necessary financing to fill the deal’s capital stack, while providing sellers and their brokers increased confidence that once terms are agreed upon, buyers will be able source a loan and close the deal.

Under the agreement, Money360 will work with Ten-X to determine which commercial properties listed on the Ten-X platform are appropriate for pre-arranged financing, and will then pre-underwrite bridge and/or permanent loans for qualifying properties. The lender’s offers will be listed on the Ten-X property detail page, informing prospective buyers about the available financing terms. After the property trades, Money360 will work with buyers to underwrite, process and close the loans to facilitate the transaction.

Non-Prime Boomers Struggle Financially, but Less So Than Other Generations (BusinessWire), Rated: A

Despite the widespread perception that Baby Boomers (ages 51-64) are struggling to make ends meet more than any other generation, new research from Elevate’s Center for the New Middle Class has found that Baby Boomers are actually struggling the least. In fact, Baby Boomers are the most likely to have steady employment and run out of money less often, compared to data from previous studies.

“These findings come as a surprise, as they are counter-intuitive to many of the trends we have seen widely covered around Baby Boomers,” said Jonathan Walker, executive director of Elevate’s Center for the New Middle Class. “Recently, it was reported by the Federal Reserve that Baby Boomers are leaving the workforce in such large droves that they are skewing employment numbers, but we’ve found that 60 percent of non-prime Boomers have had no employment change in the last 12 months, compared with 59 percent of Gen-X and 43 percent of Millennials.”

But even though they struggle less than other non-prime generations, they are still facing challenges in the new economy, especially when compared to their prime counterparts. Non-prime Boomers are more likely to hold more than one job and are 10 times more likely to run out of money every month.

Additional key findings include that – compared to their prime cohorts – non-prime Boomers are:

  • 2.2x as likely to say that their finances cause them significant stress
  • 4x as likely to live paycheck to paycheck and 1 in 6 use payday loans
  • 14x as likely to express difficulty predicting monthly income and are 2.5x more likely to overdraft on bank account
  • 3x as likely to take a loan against their 401k
  • 46 percent less likely to go on vacation
  • More likely to be living in households with 3 or more working adults

How Gen Z Will Affect The Future Of The Peer To Peer Economy (Forbes), Rated: A

Born in the mid-1990s to late 2000s, Gen Z accounts for one-quarter of the U.S. population. They are considered the most diverse and most multicultural generation the U.S. has ever seen. The highly influential Gen Zers are the first digital native generation. They are already impacting the current peer-to-peer (P2P) economy and will have an enormous effect on how this economy evolves.

Gallup study found that about 8 in 10 students in grades 5 through 12 reported that they wanted to be their own boss rather than work for someone else.

Additionally, a millennial branding studyreported that 72% of high school students and 64% of college students want to start their own business.

PUBLIC COMPANIES MAKING ICO-RELATED CLAIMS (Investor.gov) Rated: A

The SEC may suspend trading in a stock when the SEC is of the opinion that a suspension is required to protect investors and the public interest.  Circumstances that might lead to a trading suspension include:

  • A lack of current, accurate, or adequate information about the company – for example, when a company has not filed any periodic reports for an extended period;
  • Questions about the accuracy of publicly available information, including in company press releases and reports, about the company’s current operational status and financial condition; or
  • Questions about trading in the stock, including trading by insiders, potential market manipulation, and the ability to clear and settle transactions in the stock.

The SEC recently issued several trading suspensions on the common stock of certain issuers who made claims regarding their investments in ICOs or touted coin/token related news.  The companies affected by trading suspensions include First Bitcoin Capital Corp.CIAO GroupStrategic Global, and Sunshine Capital.

RealtyShares Reports: $ 10.3 Million Raised for Industrial Real Estate Deals in San Francisco and Boston MSA (Crowdfund Insider), Rated: A

Online real estate marketplace RealtyShares announced on Tuesday the closing of two industrial real estate financing transactions in San Francisco and Boston MSA. The amount raised between the deals was $10.3 million.

RealtyShares stated it secured  $8.7 million industrial debt loan for a San Francisco located mixed-use, industrial warehouse and office space in the city’s South of Market (SoMa) neighborhood.

Westlake Financial Services Embraces Clarity Services’ Clear Fraud to Enhance Its Auto Lending Nationwide (BusinessWire), Rated: A

Following impressive results using Clear FraudTM to mitigate losses in targeted auto lending transactions, Westlake Financial Services has expanded its relationship with Clarity Services to strengthen its auto portfolio nationwide.

Westlake, which has a network of more than 50,000 new and used auto and motorcycle dealers throughout the United States, began testing Clear FraudTM a year ago in select markets. The California-based finance company has enhanced its profitability by using Clear FraudTM to provide loan terms that are more attractive to both consumers and dealers.

By incorporating Clarity’s credit data, Westlake is able to more accurately price and structure deals with profitable loan terms, and determine down payment requirements. Westlake’s use of Clear FraudTM helps the lender evaluate subprime applicants with credit scores below 600. Clear FraudTM also makes it easy to integrate scores into Westlake’s existing scorecard.

AirFox Closes $ 6.5 Million AirToken Pre-Sale Weeks Ahead of Schedule (News BTC), Rated: A

AirFox, the company making mobile data and the internet more affordable for millions of people, today announced it closed its $6.5 million ICO pre-sale weeks earlier than scheduled. The ICO will open at 10 a.m. ET on September 19, 2017. AirFox will use the ICO funds raised to further develop and launch its new blockchain consumer platform, AirToken (AIR), in order to tokenize mobile access by unlocking mobile capital from the smartphone for the underserved and underbanked prepaid mobile subscribers in emerging markets.

FinTechs Give Banks A Wake-Up Call With Loan Disbursements (PYMNTS), Rated: A

Not too long ago, when small- to mid-sized business (SMB) Orion First, a business credit ratings firm, needed a loan, its only option was to visit a local bank, fill out myriad application forms and wait several weeks or months to (maybe) get approved. Fast forward to today, and the small business lending process has undergone a significant overhaul.

With a growing number of FinTech players competing in the lending space, small businesses now have improved access to a range of loan options — and, in most cases, funds are disbursed in as little as 24 hours.

New services that can expedite the lending process for companies like Orion First are already gaining popularity with SMBs and consumers who need short-term loans. The Innovative Lending Platform Association (ILPA), a trade organization representing several companies in the space — including prominent players like small business loan provider Kabbage and financial consultant and insights provider PayNet — says its member companies have distributed more than $14 billion in capital loan disbursements to small businesses to date.

The millennial population is estimated at roughly 83 million, and a recent survey found almost half of millennials (49 percent) plan to start their own businesses within the next three years.

recent survey by YouGov found 81 percent of both retail consumers and SMBs who turned to digital lenders said the ease and speed of completing a loan application were the reasons they made the switch. In the same survey, 77 percent of respondents cited the rapid pace of loan decision making as the key appeal for these platforms.

3Q 2017 PitchBook Fintech Analyst Note: Marketplace Lending (PitchBook), Rated: B

Key takeaways & highlights:

  • Online lenders have faced increased competition from other more established fintech companies. Furthermore, banks such as Goldman Sachs have started their own lending arms
  • Publicly traded firms have made great strides in improving financials; the analyst consensus has Lending Club moving into positive GAAP earnings by year end in part driven by securitizations as a lower-cost source of capital
  • SoFi has made strides towards becoming more bank-like after adding mortgage loans, wealth management services and acquiring (and subsequently shuttering) online bank and money transfer service Zenbanx

Online Lenders Gain Traction By Partnering With Incumbents (ValueWalk), Rated: B

As the latest PitchBook fintech analyst note points out, some of the most notable companies are becoming more like banks, with SoFi the most prominent example, as it expands from student loan refinancing into unsecured consumer credit, wealth management and more. Yet as some online lenders establish a foothold, there are still significant hurdles to overcome.

United Kingdom

Funding Circle is kicking off a £12 million marketing bonanza with a Great British Bake Off TV ad (Business Insider), Rated: AAA

Online lender Funding Circle is kicking off a £12 million ($15 million) marketing campaign with a prime-time TV advert during the Great British Bake Off.

A 30-second TV spot of a woman drumming will run during the premiere of the smash hit baking show on Channel 4 on Tuesday evening.

Singapore Fintech Hub LATTICE80 Announces UK Expansion (Crowdfund Insider), Rated: AAA

LATTICE80, a fintech hub owned and operated by Singapore-based private investment firm Marvelstone Group, announced on Monday it is set to open a fintech hub in London as part of its global expansion. The organization revealed that as of August 2017, its UK entity has been registered, but a suitable hub space remains to be found. It is currently in talks with relevant parties in the private and public sectors, with plans to secure and open a hub by 2018.

The evolution of the UK receivables market (AltFi), Rated: A

In particular, the UK market has lots of new entrants (now in excess of 100 providers) but the number of clients seems to be static at about 40,000-45,000. In order to remain competitive, lenders are required to compete on price and terms, which increases their risk and often reduces their return.

Customers also have more choice in the market, in that they have access to working capital both from banks and alternative lenders such as peer-to-peer (P2P) platforms. Consumers are becoming increasingly aware of the non-traditional players in the market that are harnessing technology. The new generation of borrowers is more tech-savvy and more comfortable embracing P2P capabilities, which makes new players more attractive.

The funding pitfalls a small business owner needs to know (RealBusiness), Rated: A

Richard Spielbichler, ABL director North West, Independent Growth Finance

“The main pitfall to consider is whether the business has a USP that will protect their position in the market. Many businesses suffer from ‘me too’ syndrome, where their USP is very similar to an existing organisation.”

Angelika Burawska, COO, Startup Funding Club

“It depends on the type of financing. In the case of loans and various types of trade finance, the main pitfalls lie in payment terms, such as how much and when, late payment fees and what happens if a company fails to pay.

“In the case of equity funding, businesses have to pay attention to the valuation they raise which may be too high or too low; and the control rights they give to investors.”

China

There Is a Major Tech IPO Boom Happening, Just Not in the United States (TheStreet), Rated: AAA

In the first half, a total of 59 Chinese technology, media and telecommunication (TMT) companies sold shares through initial public offerings (IPOs), a surge from 10 a year ago.

In value, the firms raised a combined 25.8 billion yuan (US$3.9 billion) in the first six months, five times the amount a year earlier, said the accounting firm in Shanghai.

The trend is a continuation of a boom that began in the second half of 2016, when there were 58 IPOs of such companies raising a total of 33 billion yuan.

Embracing Auto Finance Wave, Zhushang Financial Raised Tens Million RMB in Series A (Xing Ping She), Rated: A

On 25th August, Zhushang Financial, a P2P lending platform specialize in providing auto financing services, announced the closing of Tens million RMB in series A funding. Toulang Capital led the round, with participation from Cailang Capital. The “Zhushang Financial” brand has been upgraded from the “Zhushang Dai” brand and announced with this round of financing.

Zhushang Financial is based in Chengdu, a developed city in west China, providing P2P auto financing services for small companies and individuals. Currently, it has established branches in many western cities, including Chongqing, Guizhou Province, Kunming, Xi ‘an, Taiyuan and Lanzhou. Also, the company has signed agreements on depository with both Zhejiang Mintai Bank and Hunan Rural Commercial bank (Youxian Branch). Up to now, the total volume of the platform has reached over 500 million RMB.

According to the report of Central Bank, China’s auto financing market reached 700 billion RMB in 2016 and may exceed 1.85 trillion RMB in 2018. Its rapid growth comes not just from the wave of “car service”, but also from the policy support. Actually, according to the policy issued last year, the net loan assets must be small and dispersed, and since then auto finance has become a new hotspot of P2P lending industry.

sources said the SFC on the ICO advice Jianzhao pyramid schemes (Yicai), Rated: A

August 29, the first financial reporter from a block chain technology business executives were informed that the China Securities Regulatory Commission recently to some of the block chain enterprises on the ICO (Initial Coin Offering, virtual currency initial public offering) for advice, the current In the stage of collecting comments and discussions, the SFC expressed particular concern about ICO projects for pyramid schemes in the name of virtual currency.

Net mass transfer will go to the US IPO official response (01Caijing), Rated: B

According to Bloomberg News, Fintech Quantifiers currently selected JP Morgan and Morgan Stanley as US financial adviser to the US IPO, the IPO size of about 200 million US dollars.

European Union

Profits Up More Than 130 percent In Klarna’s Half-Year Report (PYMNTS), Rated: AAA

Klarna, the online payments firm based in Sweden, and one of the unicorns that came of age with a more than $1-billion valuation, posted results Friday detailing growth for the first half of the year.

The company said that net profit came in at 228 million crowns, or about $28.4 million, up 138 percent year over year, on sales of 2.05 billion crowns.  Sales were up 21 percent.

Klarna Celebrates Year-Over-Year Sales, Profit Gains (Finovate), Rated: A

On Friday the company reported sales and profit results for the first half of 2017 that represented gains of 21% and 138%, respectively. The strong financials come amid a series of headlines that show the Swedish payments company making strides on a number of fronts. This includes rumors that Klarna is partnering with Stripe to better access the U.S. market. Such a partnership would make Klarna the only non-credit card option available on the platform, and enable customers to take advantage of Klarna’s signature “pay after delivery” service. A deal between Klarna and Stripe also would provide what an anonymous source quoted in Nordic Business Insider referred to as “potentially an important piece of the puzzle” of Klarna’s plan for expansion in the U.S.

Swedish Tech Bank Klarna Launches ‘Smoooth’ Brand (PR Newswire), Rated: AAA

Last year, Klarna launched the “Smoooth” campaign with a series of award winning and critically praised advertisements showing just how smooth payments should be. Now Klarna takes the next step by fully implementing the concept of “Smoooth” across all aspects of the brand. This includes not only a new logo, graphic identity and checkout touch-points but towards a completely new user experience – transforming rational payment transactions into an emotional shopping experience for consumers.

Ice-cream melting on warm car hoods, shampooed long-haired dogs and pencils being pushed into huge jelly pastries. Klarna`s new identity is definitely not your average bank speaking.

“We are on a journey to transform Klarna from a traditional payment provider to a stronger consumer brand. Our new identity is more modern and expresses our focus on the consumer experience, innovation and simplicity in payments. It’s time for a new kind of bank.” Sebastian Siemiatkowski, CEO of Klarna

This is not only an update of the visual identity of Klarna but also changing the way consumers interact with the company. The concept of “Smoooth” will be evident when watching an ad or pushing a button to pay in the Klarna app. Every Klarna touchpoint has a new unique graphic and will be smarter and more intuitive. That will ensure a better user experience for consumers, but will also support in driving growth, conversion and consumer loyalty for all  Klarna merchants.

There are three intuitive ways to shop with Klarna:

  • Pay now. – Pay directly at checkout. No credit card numbers or passwords to remember.
  • Pay later. – Try first, pay later. Klarna lets you have 14 days or more to decide if you want to keep your goods or not.
  • Slice it. – Get all your payments on one invoice and choose how much to pay each month.

As of today, Klarna has released all touchpoints that can be updated automatically, and over the coming months will continuously roll out “Smoooth” updates to the touchpoints of all merchants.

PitchIt @ LendIt Europe 2017 (LendIt), Rated: B

Submit your application to PitchIt, a competition for fintech startups, taking place at LendIt Europe–one of the largest international lending and fintech conferences in Europe. This exclusive programme will nurture emerging talent throughout the competition, provide selected finalists with unparalleled access to industry expertise as well as invaluable exposure, branding and more at the event.

Deadline for applications is 4 September 2017.

International

NEW REPORT: Faster Disbursement Services From Alt-Lending Players Put Banks On Notice (PYMNTS), Rated: A

The August edition of the PYMNTS.com Disbursements Tracker™, powered by Ingo Money, highlights several notable developments that explain the waning influence of the paper check, and how new disbursement tools could impact the workplace, pension systems and mobile payment options.

The August edition of the PYMNTS.com Disbursements Tracker™, powered by Ingo Money, highlights several notable developments that explain the waning influence of the paper check, and how new disbursement tools could impact the workplace, pension systems and mobile payment options.

Hike recently added a digital payments wallet to its app, allowing money transfers between customers using the country’s United Payments Interface (UPI) service. Skype is another messaging service helping users quickly send money to one another using popular payment option PayPal. The partnership between Skype and PayPal enables users to send money to fellow Skype users in 22 countries, including the U.S., Canada and more than a dozen nations in Europe, through PayPal in the Skype mobile app.

Australia

Australian SMEs are turning to alternative sources of funding (Finder.com.au), Rated: AAA

Australian businesses are turning to crowdfunding, peer-to-peer (P2P) lending and online loans for finance, according to new research from Businessloans.com.au. The Small Business Credit Surveyconducted by ACA Research, found that the most sought-after alternative funding source was equity finance (34%), followed closely by online lenders (30%) and P2P business loans(21%).

However, while small- to medium-sized enterprises (SMEs) are embracing alternative sources of capital, not all of them are receiving the loans they hope for. The survey revealed that while 84.1% of businesses were successful in their applications, less than half of those (38.9%) of those were approved for all of the credit they applied for.

It is interesting to note that the number of businesses which were declined a loan is only 1.6% of respondents. The remaining 14.3% of the “unsuccessful applicant” group was approved for less than half of the loan they had asked for. Over one-third of this group (35%) had applied for more than or equal to $250,000.

The survey found that a rejected application seriously affects a business. Respondents that did not receive the full amount applied for delayed or could not expand their businesses (34%), delayed or were not able to fulfil existing orders or contracts (27%) or did not hire new employees (17%).

 

P2P lender reaches 2,000 brokers (Broker News), Rated: AAA

Peer-to-peer lender RateSetter has accredited 2,000 brokers on its lending platform, amidst a rise in P2P popularity within the general public.

Lending volumes through the broker channel, especially in auto and home improvement loans, are doubling every six months, according to the lender’s most recent settlement figures.

Across the direct and broker channels, RateSetter has also passed $150m in lending facilitated since 2014. In the last five months alone, lending grew 50% across both channels, passing the $100m milestone in March.

Source:: BrokerNews.com
India

‘Future-ready’ Industrial Policy to be out in October (The Hindu), Rated: A

The other “illustrative outcomes” are developing alternatives to banks and improving access to capital for MSMEs through ‘Peer to Peer Lending’ and ‘Crowd funding’, providing a credit rating mechanism for MSMEs to provide them easier access to funds, addressing the problem of inverted-duty structure and also balancing it against obligations under multilateral or bilateral trade agreements, studying the impact of automation on jobs and employment, ensuring minimal/zero waste from industrial activities and targeting certain sectors to radically cut emissions.

Asia

Dianrong and FinEX Asia Launch Asia’s First Fintech Asset Management Platform (PR Newswire), Rated: AAA

Dianrong and FinEX Asia today announced the launch of Asia’s first financial technology (fintech) asset management platform. FinEX Asia was established in 2017 to connect Asian investors with US consumer lending assets, such as credit card loans.

FinEX Asia combines its risk management expertise with Dianrong’s advanced fintech capabilities to give Asian investors access to a diverse and attractive portfolio of U.S. consumer lending assets. FinEX Asia’s fintech solutions offer advanced risk modeling capabilities, blockchain data security, performance monitoring, and secondary marketplace liquidity.

Seminar: Regulating Peer-to-Peer Lending to SMEs (Asian Development Bank), Rated: B

Event | 12 September 2017ADBI, Tokyo, Japan

This seminar looks at the regulation of P2P lending in the US, People’s Republic of China, Japan, and the UK, and discusses how regulators can help develop P2P as a safe and effective source of financing for SMEs.

Register here.

South America

Top VC funds in Fintech in Argentina (TechFoliance), Rated: A

Currently, Argentina has four major investment funds that have Fintech companies within their portfolios.

  1. NXTP
  2. Kaszek – Founded in 2011, it recently announced the release of a third fund of $200 million to be used for young technology throughout the region. To date, Kaszek has invested USD 1.4 billion in 43 companies, including Nubank, Brazil’s largest digital bank.
  3. Wayra
  4. Incutex
Canada

RBC WANTS TO USE AI TO GIVE CUSTOMERS FINANCIAL ADVICE (Betakit), Rated: AAA

Canada’s largest bank has announced that its mobile banking app will soon provide users with “actual insights about our client’s financials and a fully automated savings solution that uses predictive technology to identify money in a client’s cash flow that can be automatically saved.”

Dubbed ‘NOMI Insights’ and ‘NOMI Find and Save,’ the services are currently in a pilot release. A full launch is expected later this fall.

IOU Financial Inc. Releases Financial Results for the Three and Six Month Period Ended June 30, 2017 (Newswire), Rated: A

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV: IOU), a leading online lender to small businesses, announced today its results for the three and six month period ended June 30, 2017.

FINANCIAL HIGHLIGHTS

  • Loan originations for the second quarter ended June 30, 2017 were US$26.2 million versus originations of US$31.8 million for the same period last year. Loan originations decreased by 17.8% due to changes made to the Company’s lending policies in response to increased delinquency levels. We anticipate that these changes will have a positive impact on our loan portfolio over the course of 2017. For the first half of 2017, loan originations amounted to $48.2 million, representing a decrease of 15.7% over the origination of $57.1 million for the same period last year.
  • As of June 30, 2017, IOU’s total loans under management amounted to approximately $65.7 million as compared to $79.6 million in 2016. On June 30, 2017, the principal balance of the loan portfolio amounted to $41.6 million compared to $35.5 million in 2016. The increase is consistent with the Company’s strategy to retain more loans on its balance sheet. The principal balance of IOU’s servicing portfolio (loans being serviced on behalf of third-parties) amounted to approximately $24.1 millioncompared to $44.1 million in 2016.
  • IOU recorded gross revenue during the second quarter of $4.4 millionversus $3.5 million for the same period last year, representing a 24.5% increase. The increase in gross revenues was primarily driven by a 55.3% increase in interest income from $2.4 million in 2016 to $3.7 million in 2017, as a result of an increase in the size of the loan portfolio. For the six-month period ended June 30, 2017, gross revenues improved to $8.7 million compared to $6.8 million for the same period in 2016.
  • Interest expense during the three-month period ended June 30, 2017increased by 44.3% to $1.0 million, up from $0.7 million over the previous year. The increase is attributable to an increase in borrowings under the credit facility partially offset by a reduction in the cost of funds borrowed versus the previous year. For the six-month period ended June 30, 2017, interest expense amounted to $1.9 million compared to $1.3 million in 2016.
  • Provision for loan losses (net of recoveries) increased to $2.4 million for the three-month period ended June 30, 2017, up from $1.2 million for the previous year. The increase is primarily attributable to an increase in defaults by borrowers and partially due to an increase in the size of the loan portfolio. To improve loss performance, IOU Financial has made changes to its lending policies and deployed its next generation proprietary IOU Risk Logic Score. In addition, the Company has implemented certain process changes to improve its servicing and collections which includes an aggressive litigation process against businesses who intentionally default on their loan obligations. For the six-month period ended June 30, 2017, IOU recorded a provision for loan losses of $4.3 million compared to $2.0 million in 2016.
  • Excluding non-recurring costs, operating expenses decreased 18.1% to $2.5 million for the three-month period ended June 30, 2017 as compared to $3.1 million for the previous year. During the quarter ended September 30, 2016, the Company adopted a plan to reduce operating expenses. The Company is on track to achieve its target of quarterly operating costs of $2.0 million to $2.2 million on a normalized basis in the third quarter. In the second quarter, IOU recorded non-recurring costs of $0.5 million related to vendor contract cancellations and impairment of intangible assets. For the six-month period ended June 30, 2017, operating expenses amounted to $4.9 million, excluding non-recurring costs, compared to $6.0 million in 2016.
  • IOU closed its second quarter 2017 with a net loss of $2.1 million, or $0.03per share, compared to a net loss of $1.5 million or $0.02 per share during the same period of 2016. For the six-month period ended June 30, 2017, the net loss amounted to $3.1 million versus $2.8 million in 2016.
  • IOU closed its second quarter 2017 with an adjusted net loss of $1.3 million, which excludes certain non-cash and non-recurring items, compared to an adjusted net loss of $1.1 million in the second quarter of 2016. For the first half of 2017, the adjusted net loss was $1.9 millioncompared to an adjusted net loss of $1.6 million for the same period in 2016. Assuming the cost reduction plan was fully implemented on January 1, 2017, IOU’s pro forma adjusted net loss for the three-month and six-month period ended June 30, 2017 would have been approximately $0.8 million and $1.2 million, respectively.
Africa

Should established banks fight or assimilate to tech? (African Business Magazine), Rated: AAA

The same quandary that now faces established banks stood before landline telecoms operators 15–20 years ago. In terms of fintech, it seems likely that the answer will become clear over the next few years, as different banks adopt different strategies.

Global consultancy Accenture calculates that fintech threatens more than a third of traditional banks’ revenue. Due to the march of technological innovation and the emergence of more attractive investment regimes, the challenge posed by fintech is only likely to grow.

Fintech is not just a threat to established banks but also to other companies in the financial services sector. Visa, for instance, is built on technology developed during a previous financial technology revolution, and should be able to capitalise on the fintech boom.

Other attempts to integrate the two worlds include PayDunya, an online payments system that allows African e-businesses to accept payments from credit and debit cards, as well as mobile money wallets. Similarly, Yoco provides retailers with an integrated card acceptance and point-of-sale solution, incorporating a mobile app, and either wireless or plug-in card reader.

Some established banks have sought to compete by becoming incubators for fintech. Standard Bank and Barclayshave both launched startup support programmes, with the most successful companies taken under their wing at the end of their periods of support.

Authors:

George Popescu
Allen Taylor