Internet 1.0 is HTML websites. Internet 2.0 is a social network and user-created content. How is Internet 3.0 coming along? What is Internet 3.0? Are you familiar with Napster, Kazaa, and BitTorrent? Today, Bittorent has met Bitcoin and given birth to the following startups, networks, or organizations: Decentralized computing power. Golem, among others, is a […]
Internet 1.0 is HTML websites. Internet 2.0 is a social network and user-created content.
How is Internet 3.0 coming along?
What is Internet 3.0?
Are you familiar with Napster, Kazaa, and BitTorrent? Today, Bittorent has met Bitcoin and given birth to the following startups, networks, or organizations:
Decentralized computing power. Golem, among others, is a peer-to-peer market for putting your computer’s excess CPU power to use for other people. It works because there is no easy way to pay anybody on the planet fractions of a dollar for having used their CPU for 1 minute. This is, however, possible via blockchain.
Decentralized exchanges. Ether Delta, among others, is a cryptocurrency exchange which operates in a decentralized way (i.e., without a central counterparty). Decentralized exchanges allow peer-to-peer trading, which means that when a trade is executed the items are exchanged directly between the traders without touching any third party, and without the traders being able to stop the exchange. This approach eliminates counter-party risk entirely. On the other side, it also allows people to trade completely anonymously.
Decentralized protocol approval. Tezos, among others, is an open-source platform for assets and applications and allows the participants to vote to change its rules and protocols. Participants can choose to change the fee structure, rules, the protocol APIs, nearly everything. This protocol change-mechanism is built within the network rules, and nobody has the right of veto or override. Imagine if eBay merchants could vote to reduce the eBay fees without the eBay management being able to stop it. Of course, this opens the doors to politics, and also to oligarchies as having more Tezos coins obviously gives you more power to influence the votes.
Other similar companies include but are not limited to:
Decentralized file storage (Filecoin)
Decentralized domain naming (Namecoin)
Decentralized cloud storage (Storj)
Decentralized databases (BigchainDB, IPFS)
Decentralized internet address allocation (JACS)
Decentralized Video Encoding and Streaming (Livepeer).
Decentralize financial services (Bitcoin, Litecoin, etc.) and more.
Other online platforms like Facebook or Google don’t share any of the ad revenue earned from the personal-data exchanged through the platform. They keep 100%.
In addition, all centralized marketplaces and platforms exert full control over who can advertise, who and what can be sold, to whom, where, etc.
Their full control, when the company is young or fragile, is not being exercised much. They want to attract users and customers. However, as the company grows, and pressure from investors and the financial markets increases, the platform position of the de facto monopoly in their sector is usually leveraged to increase fees and to control who and what can be transacted on the platform. For example, Google has a history of banning certain ad categories on its platform. Most people agree that the bans, so far, have been legitimate and are targeting harmful or mostly fraudulent industries from selling their products and services. However, Google’s power of life-or-death over entire industries is troublesome.
In comparison, decentralized networks and organizations have so far mostly tried a few different business models.
Financing and crypto coins
Traditional , centralized, startups sell their equity to investors. Equity is scarce by definition, to 100%. And once sold, investors typically have a contractual right preventing startups from creating more shares and diluting them without their approval.
Equity is a problem in a decentralized project. Equity to what? What does an equity holder control?
Most decentralized organizations mentioned above have created their own crypto coins in order to finance their creation. Their usual business model is to make the coin, artificially or legitimately, a required part of each transaction on their network. As the number of transactions grows and the coin inventory is limited, the coins become more valuable. And the network itself uses its own inventory of coins to finance its expenses. In addition, some decentralized networks also take a percentage of the value exchanged on their platforms.
However, the token approach has, so far, failed to work for most networks.
The most successful tokens today have thousands of active daily addresses.
This is not surprising. All these decentralized organizations are new startups. It takes time for startups to build traction. A handful of them will have millions of users after 3-5 years. Most startups may still be viable businesses even though they only have hundreds of daily active users, but their tokens will not have any real value due to over-inventory. Therefore, maybe relying on token activity and scarcity to finance all decentralized projects may not be a viable way to finance these projects.
I believe an alternative token model is needed for most of these projects. A model that will have significant return to investors even if the network only achieves modest success of 100s of transactions per day. However, this may require an increase in network fees.
The X Open questions of decentralized entities
As I think of decentralization, many questions are on my mind:
What are these entities? Are they businesses, networks, organizations, protocols, or something else? The concept of Decentralized Autonomous Organization, or DAO, has been used in the past. But to my knowledge, no actively operating entity using a real DAO model is live and generating revenue today. All entities have executives, employees, bank accounts, offices, etc. Or is it? The Bitcoin network itself, with all the developers in various organizations who are trying to contribute to it, is fairly decentralized.
Governance: Leaders in centralized entities are required. Often, leaders aren’t any good at taking decisions, but making some decision is often better than not being able to make any decision. Many an organization has died because nothing at all was done. Are decentralized organizations able to make decisions fast and efficiently over 5 to 10 years while they grow?
Are decentralized networks cheaper to run, and do they have a disruptor advantage over centralized networks? It is not clear. Lending Club, one of the first P2P lending startups, argued that their cost structure was cheaper than banks’. However, it turns out the cost of capital lending and cost of customer acquisition were under-estimated and banks have cheaper capital and cheaper customer acquisition. Lending Club’s profit margins are not impressive. Neither is Uber’s. Nor are Amazon’s. I believe there is no single answer to this question, but assuming that a decentralized entity is more cost effective than a centralized entity is not obvious. In human history, disciplined centralized organizations (armies, empires, …) have clearly been more successful than federations, communes, etc.
Is there value built, and where is it? The startup/VC model has worked since the Dot Com boom because it was a profitable model for everybody involved. VCs made money, and successful entrepreneurs attracted more smart wannabe entrepreneurs. It is very important to see the founders and investors in these decentralized organizations be successful or there will be no second generation decentralized entities.
What is the innovation here?
I believe that an exchange that can work without counterparty risk is a real innovation.
I believe that a method to pay fractions of a dollars efficiently to anybody on the planet is a real innovation.
I believe one day we will see the Netflix of Internet 3.0 bankrupt the Blockbuster of Internet 0, 1.0, or 2.0.
However, questions remain. Is decentralization in business similar to communism in politics? Does this model really work? In 1990, in Moscow, everything was rationed, bread was extremely scarce. When a communist leader asked the London mayor who is in charge of the bread supply to London so they can learn their secrets, the mayor, confused, answered “Nobody!” Our modern food supply is a decentralized market, and fewer and fewer people are going hungry.
News Comments Today’s main news: Google gets EU eMoney license. JD launches online P2P lending service in China. Hexindai partners with Kunming Aotous. Today’s main analysis: Equity sector analysis. Today’s thought-provoking articles: Internet finance in a state of flux in China. P2P lending looking for a fresh start. Wonga collapse clears way for US payday lenders in UK. United […]
Chicago-based Enova, which also operates Pounds to Pocket and On Stride, saw UK revenue jump 20% to $36.6m (£29m). Texas-headquartered Elevate Credit operates in the UK under the Sunny loans brand, and saw its own UK revenue jump 23% to $32m, as new customer loans for Sunny rose 45% to $26,671.
Curo, which is behind WageDayAdvance, saw UK revenue jump 27.1% to $13.5m, while underlying earnings nearly halved from $8.1m to $4.2m. It was helped by a “high percentage of new customers”.
Ethical lenders that have been touted as alternatives to high-cost firms such as Wonga and BrightHouse are going out of business at the fastest rate in years, fuelling concerns that less well-off customers are in danger of losing access to credit.
The figures mark the worst year since at least 2010, as the sector battles against rising regulatory and technology costs.
Eight credit unions closed in 2018, and they affected an estimated 14,000 people with a collective £25 million in savings. Even some of the more successful CUs have had to curtail lending. Credit unions cap rates at 3 percent a month.
Despite initial reports of the feature’s disappearance, Hefeng Online Lending was still available until 4 p.m. on Wednesday. Previously, all products were labeled as being “sold out” after it was removed from the app’s main page. It has subsequently been completely removed.
E-commerce giant JD.com has become the first Chinese tech tycoon to launch peer-to-peer online lending products, CHNFUND.com reported on Sunday.
“Hefeng online lending” or literally “Hefeng Wangdai”, a platform providing information service on P2P online lending under JD.com, sold out all the products within seconds after it started operation on Sunday.
Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Wednesday it has formed a funding sources partnership with Kunming Aotou Economic Information Consulting Co., Ltd. (Kunming Aotou).
Hexindai reported that through this agreement it will assess borrowers that are using its risk management and credit assessment capabilities before referring them to Kunming Aotou which will facilitate the loans through a trust fund.
Recently, the Beijing-based Chang An Property Casualty Insurance Co was reported to have compensated nearly 2 billion yuan ($290 million) for its joint business with a number of domestic peer-to-peer (P2P) online lending platforms, according to a report of the Time Weekly.
The Lengjing reported that so far 220 P2P platforms had submitted their self-investigation reports to the government.
Micro-lending: Mynt Philippine fintech, Mynt, talks about the business case and technology behind its current micro-lending efforts and where it is planning to head with other financial services, leveraging the customers and data of its majority shareholder, the country’s largest Telco.
Home Credit – to its credit In an exclusive tour of Home Credit’s (HC) operations in Prague, we met seven staff members and learned about its retail challenger Air Bank, P2P lender Zonky and Home Credit Venture Capital (HCVC).
The State Bank of Việt Nam (SBV) has warned local people and firms to consider carefully and be cautious before taking part in peer-to-peer (P2P) lending as there are many potential risks related to the service.
News Comments Today’s main news: OnDeck creates subsidiary for bank partnerships. Lendio hits $1B in business loans. Blend Network on track to exceed 5M GBP in lending. Hexindai completes P2P compliance self-inspection report. Today’s main analysis: Bank earnings for JPMorgan, Wells Fargo, and Citigroup. Today’s thought-provoking articles: Why Google and Amazon are not a threat to small banks. Cities […]
Q3 bank earnings. An exellent report on JPMorgan, Wells Fargo, and Citigroup bank earnings. Especially interesting are the figures on digital banking customers.
Why Google and Amazon are no threat to small banks. I’ve been saying all along that banks should not be worried. Amazon and Google are stretching well beyond their core offerings, but they can’t get too far afield without destroying their business models.
OnDeck Capital, an online lender that also provides the technology to JPMorgan Chase’s digital small-business lending platform, is creating a new subsidiary to pursue partnerships with other banks.
The wholly owned subsidiary will be called ODX, according to New York-based OnDeck.
OnDeck, which specializes in online small-business loans, has been working to build its bank partnership business since announcing its deal with JPMorgan Chase in 2015. The nation’s largest bank launched its QuickCapital platform in 2016.
Lendio today announced it has facilitated $1 billion in financing to more than 51,000 small businesses across the U.S. Since its inception in 2011, Lendio has been bridging the financing gap for small business owners. As a result of access to growth capital, Lendio’s small business clients have burgeoned, generating an estimated $3.8 billion in economic output and creating more than 25,000 jobs in communities nationwide.
Revenues at JPM grew by 5% YoY to $27.8 Bn, and earnings grew by 24% YoY to $8.4 Bn. Earnings growth was driven by record NII of $14.1 Bn, up by 7% YoY, while fixed income trading revenues dropped by 10% YoY. JPM saw a small increase of 2% YoY in its consumer loan book. Net charge-offs declined by 11% YoY to $1.1 Bn and the provision for loan losses declined by 35% YoY to $0.9 Bn. The bank saw healthy growth of 11% YoY in its digital banking customers to 32.5 Mn. JPM’s ROE for this quarter was 14%, up by 3% points YoY.
Wells Fargo Q3 Earnings
WFC’s revenues were flat YoY at $21.9 Bn, but earnings grew by 33% YoY to $6 Bn. Earnings growth was driven by 1% YoY increase in NII to $12.6 Bn. The consumer loan book continues to decline with a drop of 3% YoY to $440 Bn driven by auto loans. Net charge-offs declined by 13% YoY to $0.5 Bn and the provision for loan losses declined by 19% YoY to $0.6 Bn. Digital banking customers grew by 4% YoY to 29 Mn. WFC’s ROE for this quarter was 12%, up by 3% points YoY.
Citigroup Q3 Earnings
Citi’s revenues were flat YoY at $18.4 Bn, but earnings grew by 12% YoY to $4.6 Bn. Earnings growth was driven by 9% YoY increase in fixed income trading revenue, the first increase since 2017. Citi’s outstanding consumer loans grew by 3% YoY to $309 Bn. Net charge-offs increased slightly by 1% YoY to $1.7 Bn but the provision for loan losses declined by 13% YoY to $1.9 Bn. Digital banking customers grew by 5% YoY to 18 Mn. Citi’s ROE for this quarter was 9.6%, up by 2% points YoY.
It’s a logical theory that sounds reasonable on its face: Since most small businesses already use Google, Amazon and Facebook for marketing, it will be easy for these tech giants to market loans to small businesses that they already have as customers.
One CNBC headline sums up the sentiment: “Another industry Amazon plans to crush is small-business lending.” The story notes that Amazon has already made billions of small-business loans to thousands of merchants and suggests that the online giant could come to dominate lending. In addition, there are countless fintech startups also seeking to disrupt small-business lending.
That’s because the theory misses a crucial detail: When tech giants and fintech startups target a business segment, they take a programmatic approach of catering to the most common use cases. That’s the opposite of what community banks do.
In data for 2017, the Census Bureau found that 13.7% of the U.S. population was foreign-born.
Key findings Cities with larger foreign-born populations and homeowners have higher home prices. Prices for the top 10 cities average $491,750 compared with $167,560 for the bottom 10.
But the lead city has modest home prices. Miami is top of the list with 26% of homes owned by foreign-born residents, but has a median price of just $278,700.
Immigrants love the coasts. The rest of the top five are also coastal cities, all in California with 17% and higher foreign-born homeownership rates and home prices above $300,000.
Some bargains are available. In addition to Miami, more affordable cities with high immigrant populations include Houston at No. 6 and Las Vegas at No. 7.
Cheaper cities are mostly shunned. Immigrants show little interest in bargain hunting in the cities towards the bottom of the list. The percentage of foreign-born homeowners in the bottom five cities is below 3%, despite home prices averaging about $160,000.
There are many VC firms investing in fintech today but most are based in the US or Europe. Our next guest on the Lend Academy Podcast runs a different type of fund that has its origins in China.
Anju Patwardhan is a Managing Director of the CreditEase Fintech Fund, which has quietly become one of the leading VC firms globally focused on fintech. They only launched in March 2016 and already they have made 45 investments into many of the leading fintech names such as Upgrade, Marqeta, Funding Circle, Ellevest, NAV, Figure, Onfido, DV01 and True Accord just to name a few.
Barclays is launching a US current account in a move that will put them in a head to head battle with Marcus; the account will be added to their current digital offering in the U.S. which currently includes credit cards, savings and loans to about 13 million customers; “We’re going to launch checking, we’re in the process of doing the build and we’re doing some testing .
We expect to have that in the market next year,” explained Barry Rodrigues, head of cards and payments at Barclays International, to the FT; the company does believe their knowledge in the U.S. market with credit cards can help to position them as they make this push into checking accounts; the company has not released targets for how many accounts they look to attract.
So how can a fintech startup stand out in an increasingly crowded fintech space? For personal finance and lending startup MoneyLion, the answer is to go where the audience goes—and go around in a loop with them 500 times.
Pedal To The Metal Scaling
That’s why MoneyLion recently announced it was partnering with Penske Automotive Group, Inc.PAG‘s Team Penske to sponsor NASCAR driver Austin Cindric’s Ford Motor CompanyFMustang for four races this season. It’s an unexpected move from a fintech startup, whose primary marketing channels to date have generally been social media and TV commercials.
With the number of retirement age citizens (65+) set to increase from 48 million today to 79 million, if reforms aren’t made, social security will start running out by 2035.
4. If you start investing now, you could be a millionaire later
If you want to start off small you can try investing in peer-to-peer lending with a minimum of $25. Instead of going through banks, peer-to-peer lending connects borrowers to lenders. Lenders can finance all or part (along with other investors) of a borrower’s loan at an interest rate of roughly between 5-36 percent.
Speaking exclusively to Development Finance Today, Yann Murciano, CEO, and Roxana Mohammadian-Molina, chief strategy officer (left), both of Blend Network, highlighted the company’s significant growth and future plans for the platform.
“We had a target of £5m, which it looks like we are going to exceed, because we will be at more than £4.2m in the next 10 days.
“In the first four months, we provided one facility of £1.3m and one for £1.4m, so this is how quickly we are growing.
Green and social infrastructure crowdfunding platform Abundance is set to announce a fund-raising of its own. The platform will this week unveil plans to raise a seven-figure sum to fund its next stage of growth, with an equity issue that will be hosted on its fellow crowdfunding service Seedrs.
But there is perhaps one small corner of the alternative finance universe in which the UK has been behind the curve – namely royalty finance. Originally developed to service the mining and commodities industries, the concept of royalty finance has been adapted to the needs of SMEs and mid sized companies. US businesses have been able to access this form of funding since the early 1990s, when a fund called Cypress Growth Capital was established to provide an alternative to venture capital, but to date the idea has failed to gain much traction in the UK.
But things are changing. Corporate finance companies offering variations on the royalty finance theme are emerging – including
The Financial Conduct Authority has written a “Dear CEO” letter to platforms providing high-cost short-term credit – which includes some peer-to-peer lending firms – to check on their creditworthiness assessments, particularly for repeat borrowers, and to assess whether customers are being treated fairly.
It warns that firms must be able to fund any remediation costs from complaints and should inform the FCA if they are unable to.
The letter follows the collapse of payday lender Wonga in August.
Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, today announced it has completed the submission of its P2P Compliance Self-Inspection Report to the Beijing Municipal Bureau of Financial Work, completing one of three key steps for compliance with industry reforms from the National P2P Rectification Office.
Hexindai is actively supporting and participating in this compliance process, which aims to foster the stable growth of the P2P lending industry in China. The result of this process will be a set of standards and best practices across the whole industry to protect the interests of both borrowers and lenders.
Now, Hexindai will focus on the next two steps in the process, including an inspection conducted by Beijing Internet Finance Industry Association. This will be followed by verification of inspection results by the Beijing Municipal Bureau of Financial Work with field inspection and possible final check by higher level government organizations.
On October 10th, People’s Bank of China, China Banking & Insurance Regulatory Commission and the China Securities Regulatory Commission jointly issued the “Administrative Measures on Anti-Money Laundering and Anti-Terrorism Financing for Internet Finance Institutions (Trial)” (hereinafter referred to as the “Administrative Measures”).The purpose of this document is to regulate the possible anti-money laundering and anti-terrorist financing of Internet finance institutions, and to effectively prevent money laundering and terrorist financing activities.
The “Administrative Measures” will be implemented from January 1, 2019, and require deeper compliance requirements for Internet finance institutions. At the same time, NIFA should coordinate with other industry self-regulatory organizations to formulate industry rules to achieve effective linkage between supervision and self-discipline management.
Dow Jones VentureSource is out with their quarterly report on VC activity for Q3 of 2018. According to their numbers, European VC fundraising increased during Q3 but investment in European companies “showed a notable decline in deal flow activity and investment levels.”
The report states that VC investment for the quarter totaled €3.51 billion across 24 European VC funds. This is a significant increase of 50% versus Q2 of 2018. Additionally, when comparing to Q3 of 2017 both capital and fund closings increased by 90% and 14% – respectively.
A new digital platform, run in partnership with Bendigo and Adelaide Bank, has launched to give Australians a “radically different banking alternative”.
The new digital app, called Up, was created by Melbourne-based technology developer Ferocia and operates under Bendigo and Adelaide Bank’s banking licence.
The smartphone banking app was officially launched last week and enables customers to track their money in real time, predict upcoming bill charges automatically and pay them on time, and also offers multiple saver accounts, round-ups on purchases, digital payments (such as Apple Pay and Google Pay) and no international transaction fees.
Start-ups in fintech and peer-to-peer (P2P) lending platforms are devising strategies of attracting more millennials towards small-ticket loans ranging from Rs 10,000 – 200,000, which are being mainly utilised towards experiential travel. Entrepreneurs say small ticket loans generally go towards home renovation, home decoration, home repairs, purchase of second cars/bikes, etc.. “But off late, the trend is tilting more towards utilisation of such loans for fulfilling travel ambitions,’’ say entrepreneurs.
“There is no doubt this segment (travel) is rising and more people are opting for this loan. Any customer would love a packaged deal which comes with financial support to go on a vacation, and this will also help them enjoy their vacation well,” says Bhavin Patel, co-founder and CEO, LenDenClub.
Although people going for longer vacations or to expensive destinations take loans that are in lakhs, during long weekends, the frequency of very small loans ranging from Rs 3,000 – 10,000 increases significantly, observes Bala Parthasarathy, co-founder and CEO, MoneyTap. The idea is to supplement their existing cash coffers, without causing any imbalance in their daily lifestyles, say experts.
It’s 2018. We’re facing the impending risk of climate change, rampant wealth inequality, and increasing populism around the world. We need to think beyond quarter-to-quarter profits to survive this. Companies must think about the long-term effects of their work—beyond their bottom dollar.
Find a purpose for your company that will help you soar during the good times, and persevere during the tough. What’s helped me fight fires every day—and get through the hardest challenges—is our mission of powering a new, more equal digital economy in India. A true mission serves a massive need in our society, especially for SMBs navigating the post-GST economy, and has the potential to create millions of jobs for companies looking to digitize and become compliant.
What’s my business model? How does it relate to my mission? What vulnerabilities does it have?
A mission should be more than words on your website’s ‘About’ page. It should lie at the core of everything you do, including your business model. You’re destined to fail—or at least be gravely disappointed—if your mission and business model do not align.
One of India’s fastest growing P2P lending platforms, ATL facilitates instant unsecured loans (personal, education and business loans) to eligible borrowers by connecting them with investors or lenders across India through a 100% digital ecosystem.
With this certification, ATL joins a select group of fintech startups who hold the NBFC-P2P accreditation. RBI follows a very stringent due diligence process while granting this license, which involves eligibility criteria like financial stability, business continuity plan, and how the business will aid in RBI’s larger vision of financial inclusion. The startup says that recognition from RBI is a strong validation of the startup’s sharp business model, processes and compliance with the RBI guidelines.
It looked like the end had arrived for Adewale Fatai’s chicken farm. Money was running out. Built to house 30,000 chickens, the farm was producing fewer than 2,000 chicks. His family had no funds to lend, and Nigeria’s banks weren’t interested.
Instead, he went online.
Two years later, Fatai now has 20,000 chickens. Flanked by thousands of chirping birds at his farm in Nigeria’s southwestern Ogun state, Fatai says his operation was saved by Farmcrowdy, one of a breed of new peer-to-peer lending companies aiming to match farmers with small investors.
Equity Group Holdings Ltd., Kenya’s biggest bank by market value, expects its financial-technology unit to bring in as much as 2.2 billion shillings ($22 million) of revenue in its first year of independent operations, according to Chief Executive Officer James Mwangi. The bank “has resolved to make Finserve an independent commercial subsidiary,” Mwangi said in a statement published in the Nairobi-based Sunday Nation newspaper. The unit serves 1.96 million subscribers on its mobile-banking platform, Equitel, he said.
The unit, Finserve Africa Ltd., became an independent entity this year and facilitates cross-border transactions in seven Eastern African nations worth 2 billion shillings each month, according to the statement. It has a startup capital base of 1 billion shillings and its assets are valued at 1.98 billion shillings, Mwangi said.
With a walloping around US$100 billion check, SoftBank’s Vision Fund is the world’s largest venture capital vehicle, and it’s also considered too big to be a conventional one. The Vision Fund is known for throwing gigantic amount at startups, urging them to compete for more market share at costly expenses.
Online lender Social Finance’s ex-CEO Mike Cagney, after investments from SoftBank in 2015, said that the funding “takes the pressing need of an IPO off the table,” and allow the company to put off an IPO indefinitely.
It seems that, receiving SoftBank investment is the new form of doing an IPO.
The firm in Southeast Asia invested in Grab and is encouraging the ride-hailer to form joint ventures with its portfolio companies to help them enter the region.
Unethical debt collection practices are part of the reason Indonesia’s financial services authority, OJK, has been strictly monitoring the sector. It recently blacklisted 407 online lenders for not registering with the authority. Raja Uang was one of them.
OJK cracks down on all firms who operate without being registered with OJK, but in practice, it’s difficult to ensure they do shut down for good.
News Comments Today’s main news: Yirendai’s Q2 2018 financial results. Crowdstacker exceeds 50M GBP in funds raised for British businesses. Data breach complaints soar in the UK. Flender raises 10M Euro for SME lending. Google partners with banks on digital lending in India. Today’s main analysis: Moody’s says Q2 2018 has a strong outlook. Today’s thought-provoking articles: If Wonga […]
PayPal executives are in talks about potentially eliminating the ability for users to publicly post and view transactions on Venmo, its peer-to-peer payments app, Bloomberg reported, citing a person familiar with the matter.
2Q 2018: Strong performance in line with positive outlook (Moody’s Email) Rated: AAA
The PMIs reported strong results in the second quarter of 2018, reflecting growth in new production, earned premiums from high-quality recent vintage business and lower incurred losses. Although mortgage rates have begun trending higher and housing affordability lower, we believe credit fundamentals will remain positive for the sector, and likely drive healthy performance through the second half of the year.
Other key areas the report looks at in-depth include:
New business volume rises in Q2. In Q2 2018, PMIs produced about $80.3 billion of new insurance written (NIW), up 14% from Q2 2017. For the first half of 2018, NIW totaled $138.8 billion while production was also up 14% on the year.
Premium rate cuts highlight competitive pressure. In April 2018, MGIC (senior Ba2) reduced its premium rates on its most popular policies by about 11%, effective June 2018. Competitors, inspired by corporate tax cuts, then cut rates themselves, essentially wiping out gains from the tax cuts. Given the current high persistency rates and expected ordinary loan amortization profiles, we do not expect the new lower premium rate business to become a majority of in-force business for several years.
GSE pilot programs signal potential changes in industry dynamics. In March 2018, Arch Capital Group (ACGL, senior Baa1 stable) and Freddie Mac (FMCC, senior Aaa stable) announced a new risk transfer pilot program, IMAGIN (Integrated Mortgage Insurance) through a newly formed Arch subsidiary that will cede 100% of the risk exposure to multiline reinsurers as an alternative to traditional mortgage insurance. A few months later, in July, Fannie Mae (FNMA, senior Aaa stable) announced a pilot program for enterprise paid mortgage insurance (EPMI). Both programs effectively serve as substitutes for single premium MI policies and highlight the evolution of the mortgage risk transfer market.
The value of residential real estate in New York is greater than the GDP of all but six countries, according to a new study from online lenderLendingTree, which ranks the most valuable cities in the U.S. based on real estate values.
Serent Capital, a San Francisco-based private equity firm, and owner of Docutech, just made its 12th investment in fintech and fourth in the lending technology market.
Serent recently announced it made a minority investment in GDS Link, a global provider of credit risk management software for the financial services industry. Serent is already investing in Optimal Blue and Mercury Network.
GDS Link helps clients efficiently manage credit risk strategies and improves lending and account management efforts.
Crowdstacker, a UK-based peer-to-peer (P2P) lending platform, recently announced it has exceeded £50 million in funds raised for UK businesses that are featured on its portal. According to the online lender, 100% of the P2P lending funds raised for British businesses through Crowdstacker has come directly from Crowdstacker’s “crowd.”
Some of the technology industry’s most respected investors face losing tens of millions of pounds as Wonga stands on the edge of failure.
Early investors including Accel, Balderton Capital and Greylock Partners are among the backers of the sub-prime lender that face losing their entire investment as it teeters close to collapse amid a rise in compensation claims.
Wonga’s backers had put about £90 million into the payday lender, including £10 million in the past month. However, if Wonga is placed into administration, shareholders are likely to be left with nothing as its assets are sold off to pay creditors, including customers with outstanding claims for redress.
Research from StepChange Debt Charity found that an estimated 1.1million people used high cost credit for everyday household costs in 2016. A recent update of this research found that this had increased in 2017 to an estimated 1.4million people. It’s becoming a bigger and bigger problem.
This has led to a situation where one in four working adults in the UK are now unable to afford an unexpected £500 bill and a growing number of low income households are becoming reliant on credit to cover basic needs.
The Information Commissioner’s Office (ICO) said they received more than 6,200 complaints in the first 6 months of GDPR; the majority of complaints were from customers saying their data was shared without permission and companies self reporting cases where data was accessed.
The £332m VPC Specialty Lending investment trust has announced its second consecutive dividend of 2p per share this year, its target level, following a two year turnaround amid lower than expected returns, according to an investor update.
Following on from recording its highest monthly return to date for May 2018 the closed-ended fund has declared an interim dividend of 2p pence per share for the three-month period to 30 June 2018.
Small business (SMBs) are distinct from other customer groups, Tide CEO Dr. Oliver Prill told Karen Webster during this week’s Monday Conversation, with a specific set of product and service needs that often go unmet because they are so unique. That means small businesses of all sizes — particularly the small businesses with fewer than 10 employees — simply deal with inefficiencies in their work flow that are actually rather damaging.
UK based digital bank Starling Bank is looking to raise additional capital as the bank has seen user growth reach more than 200,000, up from 43,000 in November.
The bank is also making significant progress on account balances, Starling accounts averaged £420 while competitor Monzo came in at less than £150. The fresh capital raise will be led by existing investor Harald McPike who owns more than 50 percent already and is a Bahamas based hedge fund investor.
Royal Bank of Scotland (RBS) has reportedly enlisted the help of challenger bank Starling in its efforts to develop a digital bank of its own.
The news, reported by The Times newspaper, came as a result of a letter to shareholders from Starling’s chief executive Anne Boden which stated that it has signed a contract “to provide payment services to support new initiatives at RBS/NatWest”.
In the second quarter of 2018, Yirendai facilitated RMB 11,736.2 million (US$1,773.6 million) of loans to 177,754 qualified individual borrowers through its online marketplace, representing a year-over-year growth of 38%; 23.4% of loan volume were generated by repeat borrowers who have successfully borrowed on Yirendai’s platform before; 76.3% of the borrowers were acquired from online channels; 100% of the loan volume originated from online channels was facilitated through mobile.
In the second quarter of 2018, Yirendai facilitated 202,380 investors with total investment amount of RMB 12,175.4 million (US$1,840.0 million), 100% of which was facilitated through its online platform and 96% of which was facilitated through its mobile application.
X Financial, which operates a peer-to-peer lending platform in China, filed on Tuesday with the SEC to raise up to $250 million in an initial public offering.
The Shenzhen, China-based companywas founded in 2014 and booked $445 million in revenue for the 12 months ended June 30, 2018. It plans to list on the NYSE under the symbol XYF. X Financial filed confidentially on January 8, 2018. Deutsche Bank and Morgan Stanley are the joint bookrunners on the deal. No pricing terms were disclosed.
China’s P2P industry has seen a quick rise and fall over the past year, causing some panic and chaos.
Earlier this week, China’s New Fortune magazine reported of one case where an investor had just invested 360,000 RMB (±US$52,700) into P2P platform Guojinbao, when they discovered the platform was already abandoned the day before, and there was no way to get their money back. It is just one among many recent cases.
Irish peer-to-peer lender Flender has reportedly raised €10 million through its latest funding round to lend to small and medium-sized enterprises (SMEs). Flender, which was launched in early 2017, is authorized and regulated by the Financial Conduct Authority under Registration Number 657861. The online lender is now on a mission to enable businesses and consumers the ability to borrow money through their existing networks of friends, family, and customers.
Flender also reported that it intends to offer established small businesses an innovative new way to access finance by leveraging their loyal customer base. The lender will facilitate and formalize an existing and large market of social lending across the UK and Ireland.
UBS Asset Management’s latest pension fund indicator report highlights the propensity of Australian superannuation funds to invest a substantial portion of retirement savings in “risker” assets such as equities.
According to the report, the asset allocation of Australian superannuation funds is heavily geared towards equities, with 45% of assets allocated to equities. The asset manager said Australia’s equity allocation is almost double its bond allocation, which attracts 26% of assets.
The paper distinguishes among five strategies, then adds a catch-all “other” category. The five are:
Business Development Companies. The BDCs operate under specific regulations mandating their “significant managerial assistance” to their debtor companies. The majority of BDCs are treated as RICs for tax purposes, which involves additional regulatory oversight.
Senior Loan Funds. These are closed-end vehicles that make first or second lien loans to small- and mid-sized companies. They use floating rate spreads composed of a risk premium and the benchmark rate, and typically target gross returns in the neighborhood of 10%.
Mezzanine Funds. These are also closed-end vehicles. Typically, they make junior capital investments (often a hybrid between debt and equity) in small- and medium sized companies funding acquisitions, growth, recapitalizations, or buyouts. They typically target return in the mid- to upper teens, given their position subordinate to the senior liens.
Distressed Debt Funds. These can be either closed- or open-end vehicles. They invest in the debt securities of mid- to large-sized companies that are experiencing financial distress, seeking deeply discounted purchases. There are a variety of strategies involved under this broad heading, including loan-to-own or turnaround lending.
Special Situation Funds. These are typically closed-end vehicles. They, too, target mid- to large-sized companies in tight circumstances. They have a much broader mandate than the distressed debt funds, investing across the capital structure.
Cryptocurrency has significantly opened a new world in financial sector which was primarily owned by bank namely lending and borrowing capital. Even through peer to peer lending and borrowing has developed in the recent years in fiat currency space, it’s only recently hat options for lending and borrowing cryptocurrencies are on the rise. Getmoder Foundation provides reliable platform for this recent practical option.
Getmoder is a known open-platform for lending and borrowing cryptocurrencies and digital assets. This platform allows lenders and borrowers to enter to fully collateralized crypto versus crypto lending agreement. With Getmoder lenders will be able to earn increased interest income on their long-term digital assets investments.
Have you heard about Prospa? This startup shot to Australian Financial Review fame in early June this year. It is an online lender which offers unsecured business loans to small businesses which big lenders consider to be too risky.Their own business was going remarkably well. So well in fact that Prospa was getting ready to take the ASX by storm and launch an IPO. The excitement was surely palpable, the founders would have been so proud of themselves and their strong team for getting to this point. The dollars were about to roll in!
And then, right before the IPO was about to take place, ASIC raised concerns purportedly regarding Prospa’s potentially unfair contract terms. This is not surprising given the climate of industry-wide reviews of lending practices. This concern led to postponement of the IPO on 6 June 2018, only 15 minutes prior to launch. A $576 million dollar ASX float on hold, indefinitely, whilst these standard form contracts were scrutinised. The issue? Potentially unfair terms in their standard form contracts contrary to the Australian Consumer Law.
From Facebook Inc.’s WhatsApp to Jack Ma’s Ant Financial, internet giants are joining a race to provide financial services in the world’s fastest-growing mobile arena. Online lending is becoming the next frontier as mobile users look for small loans with minimal paperwork, served to them even without credit ratings as fintech companies use data and algorithms to determine risk.
Bengaluru-based digital lending startup ZestMoney has raised $13.4 Mn in extended Series A round of funding led by Chinese smartphone maker Xiaomi.Existing investors PayU, Ribbit Capital and Omidyar Network also participated in the round.
The company plans to strengthen its technology and data science capabilities as well as expand use cases for the core ZestMoney Affordability Product.
Over the past two years, digitisation and the rising penetration of internet in India have irrevocably transformed the lending process from being extremely long and complex to a quick and technologically-exercise. The emergence of digital lending has challenged the stronghold of traditional financial institutions as the chief credit enablers in the economy while presenting consumers with an opportunity to access credit in a simplified and efficient manner.
Credit lending in India: Then and now
For decades, the credit lending market in India has been dominated by traditional banks and Non-banking financial companies (NBFC’s). Their complex policies and methods of operation have made it extremely difficult for the majority of Indians to avail credit. As a result, the gap between the demand for and supply of credit has amplified, while the number of underserved consumers in the country has risen exponentially.
Coinhako is just one of the many “fintech” startups flocking to Indonesia. The Indonesian Fintech Association said there are more than 200 fintech companies in the country, including the 31 e-payment providers that have secured licenses from Bank Indonesia and more than 60 peer-to-peer lending companies registered with the Financial Services Authority.
Despite still seeing fintech companies as potential threats, Indonesia’s major banks are also investing in local startups. Bank Mandiri has invested in P2P lending startups Amartha and KoinWorks through its venture capital arm Mandiri Capital Indonesia.
The Institute for Development of Economics and Finance (Indef) said that fintech-based companies offering peer-to-peer lending services can improve Indonesia’s macroeconomics capability.
Indef’s review, done together with the Indonesian Fintech Association (Aftech), estimates that fintech development in Indonesia can contribute up to Rp25.97 trillion to the GDP.
Speaking at the discussion with the theme “Lending Fintech Roles to Indonesia’s Economy” in Jakarta, August 28, Indef economist Bhima Yudhistira Adhinegara said that the Rp25.97 trillion contribution includes both direct and indirect impacts.
News Comments Today’s main news: One student saved $20K on a SoFi student loan. PayPal, Google deepen partnership. Zopa to hire a social media strategist. Ant Financial is a top 10 global bank. Today’s main analysis: Improved MPL pools are no guarantee of ABS performance. Today’s thought-provoking articles: A deeper look at GreenSky. Quants and fundamentalists. Ways to impress a lead investor. Helping […]
Is it clear skies ahead for GreenSky? GreenSky is exiting the gate looking good. To raise this kind of money on an IPO and be profitable for the past five years is a startup’s dream, and they’re living it.
Millennials are leading an investment revolution. I’m all for making an impact and being socially responsible, but if it isn’t profitable, then don’t count on retirement. That said, the millennial generation is definitely a different generation, and it’s quite refreshing to keep reading about them.
Student debt is growing in the US and looming as a major ongoing issue. With a total of $1.48 trillion in student loan debt in the US, spread among 44 million borrowers, Americans now have more student loan debt than credit card debt, according to Student Loan Hero.
Interest rates, meanwhile, are punishing, even more so depending on the type of loan you get, and the level of education you’re paying for. According to data from the Department of Education, rates range from around 3.5% to as high as 8.5% — with most types of loans floating in the 5-7% range. That’s extraordinarily high when you consider that many auto loan rates and even mortgages are lower.
The company offered 38.0 million shares to the public that priced at the upper end of the range at $23. The over allotment grant added another 5.7 million shares to the total offering. Selling shareholders offered all of the shares with gross proceeds of $1 billion.
GreenSky ended the day virtually unchanged at $23.26 at a time when most IPOs trade in more volatile ranges. The stock only had a range of $22.05 to $23.36 suggesting minimal initial interest by traders.
At the current price of $26.70, GreenSky has a market value of over $5.1 billion on 190 million shares outstanding (including the 5.7 million over-allotment option) with sales on pace to likely top $400 million this year.
The numbers though suggest anything but a boring company. Transaction volume jumped 47% to $1.0 billion during the March quarter and active merchants grew equally impressive at 52%. The fintech is even profitable.
PayPal and Google are extending their payments relationship across Google’s entire ecosystem, according to Finextra and TechCrunch. The two firms have worked together for awhile, as customers are able to integrate their PayPal accounts directly into Google Pay, Google’s mobile wallet.
But now, they’re taking the partnership a step further, allowing customers to enter their PayPal credentials once and then have them available for various types of payments, including bill pay and peer-to-peer (P2P) payments, across Google offerings such as Gmail, Google Play, Google Store, and YouTube. The partnership is expected to roll out in full later this year.
Marketplace lenders such as LendingClub and Prosper have made strides in improving underwriting standards in the past year.
In a report issued Thursday, Fitch said investors should still be wary of assuming new-issue MPL securitizations are a step up in quality over previous ABS deals, even though firms such as LendingClub and Prosper have taken steps to tighten lending standards as well as pool greater concentrations of borrowers with higher credit scores into their recent ABS deals.
LendingClub (NYSE:LC), for instance, boosted the weighted average FICO of its most recent prime/near-prime consumer-loan securitizations in December to 703, compared with 692 in its first asset-backed transaction of 2017.
LendingClub’s most recent self-sponsored transaction, Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-NP1, had its base-case loss range tightened to 13.25%-15.25% by Kroll Bond Rating Agency, compared with 14%-16% in its CLUB 2017-P2 transaction. (In December, LendingClub pooled a collection of subprime loans with credit scores below 660, with a base-case loss range of 19.65%-21.65%.)
But the Bloomberg Professional Services Blog has run a piece recently on “quantamental” investing, indicating that a merger of the two approaches is underway. Darwinian pressures aren’t kind to presuppositions or to the purity of paradigms. And it is survival of the fittest that is at work here, because fitness requires on the one hand that the quants use good (human) judgment to monitor and adjust the investment process to the prevailing market conditions, while it also requires that any workable fundamental approach employ “promising aspects of technology … to reduce bias and random noise.”
“Alternative data” means what it sounds like it means: every sort of datumthat one would not traditionally have expected to come up in a discussion of trades, investments, or portfolio allocations.
These sources can include (Bloomberg’s list), “social media posts, credit card accounts, online browsing activity, foot traffic and weather patterns.” Any and all of these can include clues to ongoing and future trends. The use of any such source, or any cross-referencing of sources that can produce patterns, may be novel this week, customary next week, and a bare minimum for survival in the trading jungle the week after that.
Some 92% of millennials agreed with the statement “I care more about having a positive impact on society than doing well financially” compared to 52% of nonmillennials.
We interviewed a handful of millennials, asking them what makes their generation different. They answered: access to information, aligning themselves with brands on social media, and growing up in more comfortable economic circumstances than their parents and grandparents.
Most of us are aware of the importance of small businesses in the US economy. Small businesses employ over half of private-sector workers in the US, so access to capital for small businesses is critical to their success. Fortunately, online lenders such as the ones mentioned in the report have focused on serving the needs of businesses and activity has picked up over the last few years. Both awareness of these alternative options and the amount lent on these platforms is increasing. Originations at five leading online small business lenders increased by 50% in three years, from $2.6 billion in 2015 to $3.9 billion in 2017.
Nearly $10 billion of funding was provided to 180,000 small businesses from 2015 to 2017 according to data which included leading platforms OnDeck, Kabbage and Lendio. This activity has generated $37.7 billion in gross output, created 358,911 jobs and $12.6 billion in wages.
Despite fears of trade wars and increased protectionism, foreign investment in the United States remains robust. In fact, the U.S. continues to be the single largest recipient of foreign direct investment (FDI) in the world: more than
The AI and algo game is nothing new really. A couple decades ago many called it neural networks and neural computing, and that has evolved into today’s version of AI. But what is different today and so disruptive are three elements that were not there in the early days of machine learning: computing power and cloud-based systems, a growing and global population of computer and data scientists and data. Lots of lots of data.
Those three are increasingly working together in the alternative investments markets space, enabling firms to make much more accurate, and potentially, more profitable investments. The AI topic, discussed at Lendit Fintech USA 2018 conference in San Francisco in April, revealed just how integrated it is already and where it is going in the coming months and years. Listen to the full recording HERE.
The former American Express chief Ken Chenault is backing a start-up company that provides credit scores for immigrants who struggle to rent apartments and access other basic services upon their arrival in the US.
Workers on overseas postings, international students and other newcomers have long struggled to secure credit cards and other loans because American institutions hold no records on them.
Nova Credit, which is among a new breed of Silicon Valley companies seeking to shake up the financial system, aims to address the problem. It has secured funding from General Catalyst, the venture capital group that has stood behind companies including Snap, Stripe and Warby Parker.
For online lenders, small business lending continues to grow into big business. Online lenders continue to grow their originations of small business loans, according to a new study released today by Washington D.C.-based economic research firm NDP.
Alternative financing in the form of crowdfunding may be a trending topic, but it’s hardly new. Mozart used the idea in the 1780s to finance the composition of one of his early piano concertos, offering prospective backers copies of his manuscript in exchange for their financial support.
Why choose alternative financing? Because a lot of great deals may never get done without it. Many banks and other traditional lenders won’t finance transactions valued under $50 million because there’s simply not enough profit in it for them. And, because of the late stage of the current real estate cycle, many other lenders are feeling skittish or are simply tapped out. That leaves a big gap in the financing market — and a big opportunity for nontraditional sources of capital.
Layered Insight announced today that Tim McKnight, EVP & Chief Information Security Officer at Thomson Reuters, and Richard Seiersen, SVP & Chief Information Security Officer at Lending Club, have joined Layered Insight’s Advisory Board.
Renew Financial, the inventor of Property Assessed Clean Energy (PACE) financing and a leading provider of financing for home improvements, today announced that Kirk Inglis, currently Renew Financial’s Chief Financial Officer (CFO), will succeed Cisco DeVries as Chief Executive Officer (CEO) of the company. Mr. Inglis brings more than 20 years of experience in financial services and technology with a deep expertise in consumer lending. His career includes senior finance and operating roles with Calypso Technology, Prosper Marketplace and Providian Financial Corporation. Mr. DeVries will become the company’s Chief Innovation Officer to focus on key growth opportunities and to help innovate new financing tools for clean energy. DeVries will continue to serve on Renew Financial’s board of directors.
ZOPA is hiring its first-ever social media executive in an effort to broaden its customer base.
The peer-to-peer lending platform is currently advertising for a person who can “translate the brand and social media strategy into tangible plans which encompass day to day content, product content and campaign content”.
The role will involve working with the wider marketing and product team, as well as analysing and optimising performance by channel.
LendInvest announced on Thursday it has named firms JMW Solicitors LLP and Lightfoots Solicitors as its first official panel of solicitors for its Buy-to-Let product. According to the online lender, JMW Solicitors is one of the North West’s leading full-service law firms, with significant experience in handling a range of real estate finance cases for both institutional and private lenders. Lightfoots are experts in complex property finance cases and have over 30 years experience providing legal services to mortgage lenders. Both firms are experienced in dealing with introducer-led business, offering dual representation and coverage across England and Wales.
Digital wealth manager Moneyfarm has got £40 million in a Series B funding round – meaning it has secured close to £60 million in capital so far.
Moneyfarm calls this the “largest funding round by a European digital wealth manager to date” and the company, which launched a personal pension (SIPP) in March this year, will use the capital to launch solutions and expand its investment strategy.
The round was led by Allianz Asset Management, the investment arm of global insurer Allianz, which first invested in Moneyfarm in September 2016.
It had been rumored for some time now. Ant Financial, the Chinese financial behemoth, was raising a very large funding round that would value the company at $150 billion. It has been reported extensively today that this funding round has in fact closed. Ant Financial has raised $10 billion at a $150 billion valuation.
For a brief primer on Ant Financial there is a decent summary on their English language websitebut for a deeper understanding I recommend you read Chris Skinner’s new book, Digital Human (the Kindle version is available now). This has a 30,000 word case study that not only shares the history of Ant Financial but also why they are one of the world’s most forward thinking companies. And if you think they are just a Chinese story, think again. Ant Financial embodies the future of financial services and they will, in my opinion, shape the future of financial services more than any other fintech company on the planet.
Dianrong (点融), a leading Chinese online P2P lending service provider today announced cooperation with R3, a global platform specializing in distributed data technology. The Chinese fintech company’s supply chain finance solutions will land on Corda, R3’s open-source distributed ledger.
Dianrong hopes the cooperation will enable the company’s end-to-end service through a comprehensive supply chain and increase efficiency by ensuring transparency. The company’s initiative is to allow micro and small businesses to access credit and financial services.
As of this week, Wisr will increase its personal loan limit from $35,000 up to $50,000, with a comparative interest rate up to 5% p.a. lower than the four major banks.
Loans will be available for any worthwhile purpose over three or five years, with a comparison rate of 9.36% p.a. for borrowers with a strong credit rating. The neo-lender also offers no early repayment or exit fees.
The report analyses the number of mortgages taken out in the 12 month periods to the end of March from 2014 to March 2018, and breaks them into borrower types – first home buyers, investors, people moving house, those staying put but refinancing and those buying a second home.
According to Real Estate Institute of New Zealand figures, Auckland property sales peaked in their current cycle in the 12 months to March 2016, when 30,631 homes were sold.
That number has steadily declined and in the 12 months to March this year had slumped to 21,628, a decline of 29.4%.
Today’s investors are undoubtedly looking at technology-driven startups with a difference. The best illustration here is Flipkart which managed to introduce the right technology-driven models at a time when people had to wait endlessly to buy products of their choice. With Walmart now having acquired majority stakes in Flipkart, more technology-driven models could potentially come to the fore.
The digital wallet company finally integrated its platform with government-owned unified payment interface (UPI) last week. A week later, numbers related to UPI have popped up that has reached a 5 million mark via @ikwik handles, a VPA (Virtual payment address) handle for UPI, according to an ET report.
The platform is also planning to partner with NBFCs to disburse loans to small businesses in the range of Rs 20,000 up to Rs 5 lakh.
South African investment fund Crossfin has concluded a deal with banking and asset management group Investec that will see the two companies identify early-stage fintech startups in which to invest through Crossfin’s angel funding arm Blue Garnet Investments.
The Crossfin fund, which has a particular focus on fintech startups, was formed in June of last year after South Africa-based private equity and venture capital firm Capital Eye and the Multiply Group signed a strategic investment partnership.
Capital Eye manages a portfolio of investments spread primarily across Sub-Saharan Africa, including South African fintech company wiGroup, which Investec has also invested in.
Today, Fundbox, the small business growth company, announced that the company has won the coveted Israeli Atlas Award for Best Fintech Start-Up. For a third year in a row, the 2018 Israeli Atlas Award event was held in cooperation with the Ayn Rand Center, The Marker and such leading partners as, BDI, IVC, Bank Hapoalim and Israel Aerospace Industries. The prize is awarded to those Israeli startups that have created a technology, idea or product of exceptional value in Israel over the past year.
News Comments Today’s main news: SoFi named official sponsor of Big Ten. Equifax supports SME lending with new data sharing solution. UK fintech venture investment rises 150%. Klarna partners with London College of Fashion. Revolut ditches Wirecard, takes card issuances in-house. Today’s main analysis: The most wanted for anti-money laundering cases in Asia. Today’s thought-provoking articles: Banks close 1,700 […]
SoFi now the official presenting sponsor of Big Ten. AT: “SoFi has stretched itself to build alliances in traditional ways despite being a groundbreaking leader in an unconventional business model. These types of sponsorships will keep them on top, and it puts their name in front of people who may have never heard of them before. It’s also top-of-mind marketing that serves as a strong branding element for an audience that may be familiar with them.”
Banks drop 1,700 branches in 12-month period. AT: “The period ended June 2017. I’ll be anxious to see how many branches close between then and June 2018. From the looks of things, the back half of 2017 wasn’t any kinder to banks than the front half. It’s no wonder banks are entering a consolidation and re-purposing phase where they look for other ways to use their branch space.”
An Oklahoma bank gets creative with its bank branch space. AT: “I can see a future where community banks are community meeting places and social hangouts for people who want to discuss financial health. A co-working space is unique and creative, but what other ways can banks attract consumers to sell them financial products once they get there? And keep in mind that those financial products could be products offered by alternative lenders in a day when banks are primarily seen as facilitators rather than originators.”
Why Digit is dropping chatbots. AT: “Interesting. Digit is one of the companies that pioneered chatbots. Now, banks are beginning to adopt them en masse, which is telling in itself. How long will it be before other fintech and alt lending companies realize what Digit has learned?”
Asia most wanted Top 10 AML cases. AT: “This is an interesting list of companies and bad actors on the world stage who are wanted in Asia for anti-money laundering. Includes convictions and sentences. Dig in.”
The Big Ten Conference and Big Ten Network announced a multi-year agreement naming SoFi as the presenting sponsor of the Big Ten Men’s Basketball Tournament. SoFi, a modern finance company taking an unprecedented approach to lending and wealth management, will not only be the on-site tournament sponsor, but also present the on-air coverage of all 10 tournament games televised on BTN.
Information solutions company Equifax has launched a new solution that provides back up for the government’s Commercial Credit Data Sharing (CCDS) initiative, which is seeking to boost the economy by encouraging new entrants into the SME lending sector.
According to the platform, the new solution “gives lenders a comprehensive picture of a business’ financial health to facilitate faster and more informed lending decisions”.
Equifax was designated as a credit reference agency under the CCDS initiative, giving it access to new data sets from leading business banks, including cash flow activity and debit and credit turnover. The data will be provided to lenders through Equifax Business Insights.
The number of branches in the U.S. shrank by more than 1,700 in the 12 months ended in June 2017, the biggest decline on record, according to a Wall Street Journal analysis of federal data.
Branch numbers fell again in the second half of 2017, according to related data submitted to bank regulators and reviewed by the Journal. That would add to the thousands of locations closed following the financial crisis, and is the longest stretch of closures since the Great Depression.
Many of the closings were in big cities and surrounding suburbs, where branches were consolidated largely because of falling foot traffic. Others were in rural areas, where some large regional lenders are leaving town altogether.
Citizens Bank of Edmond is trying to get closer to small business customers by providing space, guidance and almost anything else they might need — besides, of course, a loan.
The one-branch community bank in Edmond, Oklahoma once had another branch, 12,000 square feet located one block away from the main space, with a drive-thru window and some executive offices. But recently the bank decided to consolidate it into a single location and has now turned it into a “business social” co-working environment, called Vault 405, for its small business customers that includes wireless charging stations, conference rooms and a podcast studio.
Ideally, by creating an environment that would bring customer and community relationship returns, as well as grow deposits and loan volume. Citizens currently charges monthly rates between $400 and $1,000 for offices and $175 to $275 for desks and shared spaces. It also offers day passes.
Citizens is also addressing cash pickups for small business customers, one of the most compelling cases for banks thinking of repurposing their branches, using as much readily available technology as possible.
Now, Ethan Bloch, founder and CEO of the San Francisco startup, believes his company has been offering the wrong primary user interface. “We think [chatbots] haven’t lived up to their promise,” he said. “So we are done believing they will.”
While the premise of Digit is still the same — use the service to automatically transfer funds from checking to savings every few days in amounts its algorithms believe a person can afford — Bloch believed the chatbot model is terribly flawed in its inefficiency to find out information.
Lendio Franchise Announced in Seacoast Region (Lendio Email), Rated: B
6th Avenue Capital, a provider of small business financing solutions, announced the appointment of three senior members to their business development team. Mitchell (Mitch) Levy, Marc Seidel and Gary Lockwood were named to lead the sales teams. The new hires follow last year’s appointments of Christine Chang as CEO and Darren Schulman as COO and a $60 million commitment in capital from a large institutional investor.
Currently, firms offering services such as money transfers and cryptocurrency trading have to apply individually to operate in each of the 50 US states.
Under the new compact, if one of Georgia, Illinois, Kansas, Massachusetts, Tennessee, Texas and Washington reviews key elements of licensing – IT, cybersecurity, business plan, background check and Bank Secrecy Act compliance – the other six will accept the findings.
Wela, a fintech company that blends artificial intelligence (AI) with human advisors, today announces a partnership with In-Fi, an insurance agency management company specifically for financial institutions. Wela’s AI-powered chatbot, personified as Benjamin, is now fully integrated into In-Fi’s website, with the function of creating a more cohesive and engaging experience for their customers. Integration into In-Fi’s website is a pivotal step for Wela, which aims to place Benjamin at the center of financial decisions for families by integrating across a variety of financial service providers.
The hotly contested question of how to regulate payday lending is partly about ideology. How far should the government go to save repeat borrowers from their own worst habits? Your answer will depend on your political beliefs.
But this debate, like a lot of fights involving financial regulation, is also about facts. Do payday customers indeed suffer economic harm when they get into a cycle of repeat borrowing? That is an empirical question that unbiased researchers should be able to answer.
SoFi, whose earliest ads told people, “Don’t Bank. SoFi” has softened its marketing efforts, realizing the smart thing is for it to become a bank itself. Transferwise once ran provocative anti-bank ads but now advertises its own borderless account. But Aspiration isn’t shy about ruffling the feathers of the big banks. When Bank of America yanked its “free” checking accounts last month, moving them to its core checking account product that comes with a monthly $12 fee, Aspiration used it as a rallying point to get customers to bring their business to Aspiration, offering a $12 credit if they did. It claims its marketing has influenced “tens of thousands” of customers to leave B of A for Aspiration. Bank of America declined to comment for this story.
Pear venture capital has helped some aspiring entrepreneurs build their foundations from scratch. How did the idea behind Pear fructify and what is the significance behind its name?
We actually started out as an angel investor. Around 2009-2010, I felt that there was no institution to help founders from ground zero. Given my background and network, I thought I could build an institution, which would help founders in their early stages to work on their ideas, which would stay in the business for generations.
Today Pear is an early stage seed fund and we invest in founders who are building category defined companies and that which focus on solving a big problem in the market.
As a venture capitalist, how do you identify potential entrepreneurs before signing them a cheque? What sectors and businesses do you look at? Considering the humongous number of aspirants, how do you identify a viable idea and that which is worth your support and funding? If I look back at the last 18 years, there are some traits which are quite common among exceptional founders. We like those individuals who are looking to solve big problems in the market. They should either be close to the problem that they are trying to solve or they should have lived through their problem.
We also like those who have ability to track talents, are paranoid in a healthy way, have a vision and tend to question themselves every day. I also like CEOs who are captains of the ship,. the ones who usually stay till the end when the ship is sinking. Overall, we also look at size of the market. It’s fine if things don’t work out today as long as it’s going to be massive when it works. If you look at our portfolio companies, some of them have started in the unconventional space. As VCs, you live for those moments where you want to break the rule and partner with outliers.
LendingTree, the nation’s leading online loan marketplace, today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.
Purchase Mortgage Offers by Credit Score
Average Down Payment
Average Loan Amount
Lifetime Interest Paid*
*To enable comparison, lifetime interest is calculated for the average loan amount for all loans using the rates for each credit score bucket.
Refinance Mortgage Offers by Credit Score
Average Down Payment
Average Loan Amount
Lifetime Interest Paid*
*To enable comparison, lifetime interest is calculated for the average loan amount for all loans using the rates for each credit score bucket.
LendingTree, an online loan marketplace, recently analyzed 1.5 million purchase mortgage loan requests that came in through its system from the 100 largest cities in 2017. The study identifies the locations where buyer competition is the toughest based on three criteria:
The top 10 cities with the most competitive buyers based on those criteria include:
The three cities on the bottom of the list, where homes are more accessible to buyers and competition is less aggressive, are Youngstown, Ohio; McAllen, Tex.; and Scranton, Pa.
CBC National Bank, headquartered in Fernandina Beach and with branches in Fernandina Beach, Ocala and The Villages, Fla., and Beaufort and Port Royal, S.C., today announced that it has been named by LendingTree as among the Top 10 highest customer-rated mortgage lenders in the fourth quarter of 2017. It also achieved this prestigious designation in the first quarter of 2017.
Plug and Play Insurtech welcomes M Financial as its 55th partner. Headquartered in Portland, Oregon and comprised of 155 Member Firms across the U.S., as well as the U.K. and U.A.E., M Financial is searching for startups to transform the life insurance industry for the clients they serve. Startups accepted into Plug and Play’s platform will have the opportunity to pilot their technology with M Financial and the other partners in the program. M Financial is the first Plug and Play partner that is both a distributor and reinsurer of life insurance products.
Peer to peer lending: The demand for credit is sure to continue for centuries to come. There is always someone in need of some quick business loan or a personal loan and this gives a quick opportunity if there is another person with the capital and risk appetite to back it up. With the current boom in crypto currency usage, you can take advantage and set up a peer-to-peer lending service. Alternative funding can very well give traditional banking a run for the money because some people need quick loans but cannot have the convenience of applying through the mainstream banking system. Peer-to-peer lending offers the keys to unlock instant liquidity to a wide online community and offers attractive rewards to those who supply the capital.
A great advantage to the lender is that once a peer to peer lending platform has been selected, the popularity of the wallet will ensure that there is exposure to a wider target of borrowers. Most banks often get restricted to lending to people within a certain country or state. Since peer-to-peer lending is blockchain-backed, anyone around the globe with access to the platform can lend money to another peer and start earning money over the duration of the loan contract.
Funding Circle Sme Income Fund Limited (FCIF.L) are in focus today as the charts are revealing that the Mesa Adaptive Moving Average (MAMA) is holding steady above the FAMA, or Fractional Moving Average. This environment typically indicates that there might be a buying opportunity aligning in technicals. When there are crossovers between the FAMA and MAMA, the shares are often widely traded. When the MAMA crosses above the FAMA, it means that the shares are likely to move higher. Conversely the opposite occurs when the MAMA crosses below the FAMA. The Mesa Moving Average was first mentioned by John Ehlers in a paper published in a 2001 edition of Technical Analysis of Stocks and Commodities Magazine.
Fintech companies, such as TransferWise and OakNorth, raised $1.8bn of venture capital investment last year, up more than 150 per cent from $704m in 2016, the year of the UK’s vote to leave the EU, the data show.
The surge in UK funding contrasted with an 18 per cent drop in global fintech investments to $14.4bn, according to the report by Innovate Finance, the British fintech trade body.
The UK industry was boosted by handful of large fundraisings of more than $90m. The biggest was by TransferWise, a cross-border payments provider, which raised $280m. OakNorth, a digital lender to small businesses, raised $203m.
British banks are debating whether to ban their customers from buying cryptocurrencies using their credit cards after Lloyds Banking Group and Virgin Money said they had imposed such a ban.
Barclays, the UK’s leading credit card issuer through its Barclaycard business, said it was “keeping this matter under close review” after holding a meeting to discuss whether to follow the lead of Lloyds on Monday.
Last week MasterCard said that cross-border volumes on its network were up 22 per cent, driven in part by customers using their credit cards to buy cryptocurrencies.
British banks are also shunning companies that handle cryptocurrencies by refusing to let them open bank accounts or closing their accounts, which has forced many of them to open accounts in Gibraltar, Poland and Bulgaria.
I recently came across an article headlined: “8 in 10 SMEs still prefer traditional bank loans over alternative finance.”
It noted that 83% of financial directors preferred to go to their bank as their first port of call when seeking a loan, rather than finding an alternative, such as P2P lending or equity crowdfunding.
It claimed that a lack of understanding could be the reason for this, but pointed out that almost three-quarters of finance directors (74%) believed their knowledge of alternative finance was either “average or above average”.
UK Challenger bank Tandem has announced a partnership with cognitive banking company Personetics to provide users personalised insights on their spending across all of their bank accounts in one place, as well as warning people about unexpected fees and unusual activity on their accounts.
In a survey of financial advisers by Octopus Investments, three-quarters of respondents said they believe their clients hold too much in their cash ISA relative to the rest of their portfolio.
The majority (83 per cent) feel their clients are put off investing in stock and shares due to the risk of losing money, followed by concerns of an overstretched (49 per cent) and volatile (46 per cent) market.
If you need to borrow money, a variety of options are available. Two of the most common short term borrowing options are payday loans and short-term personal loans, both of which provide immediate access to cash to help you pay bills, purchase items and run your financial life.
Most people use short-term loans for purchasing certain items or covering other major expenses.
From a borrower’s perspective, the advantages of short-term loans include lower overall costs than payday loans. However, the credit check process and approval period mean that loans of this type often aren’t instant enough to help borrowers deal with urgent financial needs.
Most payday loans are for relatively small amounts of money, such as £200 to £500, and are aimed at providing cash until you get paid again.
P2P lending platform Folk2Folk has appointed Claire Thayers as its chapter development manager.
In the newly created role, Claire will be responsible for raising Folk2Folk’s profile across the South West and Three Counties regions and improving awareness of its products to both borrowers and brokers.
China’s increasingly competitive peer-to-peer marketplace requires players to understand government regulations and align their strategies accordingly, said Kevin Guo, co-founder and co-chairman of Dianrong, which specializes in making small loans over the internet.
European payments provider, Klarna, has announced a UK partnership with London College of Fashion, UAL, in an exciting initiative to support the next generation of talent at the intersection of fashion and technology.
Fashion is now the UK’s largest online retail market segment, worth around £10.1bn, and this growth is only set to continue. By 2020, fashion will represent 28.8% of UK online spend.
With Klarna research showing 94% of retailers are investing in new technology to meet the needs of younger customers, opportunity for innovation in the sector has never been greater.
Penta, a German digital bank for start-ups and small businesses, has secured €2.2m in seed funding, led by the UK-based and fintech-focused Inception Venture Capital .
Founded in May last year, Penta moved out of its private beta in December to a waitlist of over 3,000 local businesses. The platform has now opened its waitlist up to new users, and hopes to reach 10,000 businesses by the end of 2018.
PEER-TO-PEER analysis firm 4th Way is urging investors to diversify after stress testing revealed the odds of losing money in a severe recession can be 10 times higher in some cases when lending to just one borrower on a P2P platform.
The research, released on Tuesday, applied international banking stress tests to P2P platforms it assesses such as Zopa, Funding Circle and RateSetter, and found when lending to 100 borrowers, investors have just a 0.1 per cent chance of losing 20 per cent or more of their original money.
Serbian online lender Telenor Banka said on Tuesday that Bulgaria-based investment fund River Styxx Capital has not received the consent of Serbia’s central bank for the acquisition of 85% of its share capital from Norwegian telecommunications group Telenor.
Telenor will support any further step that will contribute to the positive closure of the transaction, Ingeborg Ofsthus, CEO of Telenor Serbia and chair of the Telenor Banka board of directors said in a statement issued by Telenor Banka.
Over the last decade, the quantity of money laundered has been steadily increasing. According to The United Nations Office on Drugs and Crime, it is estimated that approximately USD $1.6 trillion or 2.7 percent of global GDP was laundered in 2009.
Even worse, less than 1 percent of this global illicit financial flow is ever seized and frozen, meaning that the criminals are winning.
Effective anti-money laundering (AML) regulations and processes are essential to countering such criminal activity. Yet due to tighter anti-money laundering regulations in the US and Europe, money laundering activity is moving into the Asia Pacific as a way to avoid detection.
In December 2012, Standard Chartered was ordered to pay USD $330m to settle claims by United States government agencies that it had moved hundreds of billions of dollars on behalf of Iran. It was suggested that this practice exposed the international financial system to exploitation by to “terrorists” and “drug kingpins”.
News Comments Today’s main news: SoFi, Lending Club gear up for a busy quarter. RateSetter drops unsecured business loans. Zopa’s targeted returns rise to 4% and 4.5%. Monzo to phase out prepaid cards. Funding Societies surpasses SGD 100M in SME crowdfunding in SE Asia. Today’s main analysis: CEO optimism grows worldwide. Today’s thought-provoking articles: Which car brands borrowers stretch […]
Up to four transactions from marketplace lenders SoFi and Lending Club are slated to hit the market this quarter, including prime and non-prime consumer and student loan refinancing offerings.
SoFi is preparing to bring at least one consumer loan offering and possibly one more refinanced student loan offering over the next two months. The planned offerings could be in the range of previous transactions, said a source familiar with the company’s plans.
Shares of Twitter dipped on Monday after it was reported that Twitter’s chief operating officer, Anthony Noto, may leave the company for an offer to become the CEO of Social Finance, or SoFi, an online lending company.
Twitter’s stock was down 1.16% on Monday at $23.39 per share.
A recent LendingTree survey found that 27 percent of Americans plan to purchase a car in 2018. To discover if consumers are more likely to stretch their available incomes to own certain brands, LendingTree looked at people who found auto loans on the LendingTree.com platform in 2017 to buy used vehicles.
Contrary to popular assumptions, the results revealed that people aren’t going broke to buy used luxury cars. In fact, buyers of the most expensive cars seem to handily afford them.
On the other hand, LendingTree found Buick owners have the hardest time affording their car payments — not because they’re indulging in particularly expensive vehicles but because their income tends to be on the lower side, meaning they use a larger share of take home pay to cover their monthly payments.
Car Makes Borrowers Stretch the Most to Buy Used
Estimated Monthly Payment as a Percent of Estimated Monthly Income
The online small-business lender Fundbox says it is integrating its automated lending service with several software programs commonly used by its borrowers — and it’s a move that could hold a lesson for banks.
What’s striking about what Fundbox is doing, and the reason bankers could learn from it, is it is capitalizing on the concept of open banking — allowing a piece of a lender’s products and services to be accessed through a third party — in a way that few U.S. banks have.
Capital One comes the closest — its application programming interfaces let third parties offer services like prequalifying customers for Capital One credit cards and sharing its reward information.
When Wall Street compares one of Jack Dorsey’s two public companies to Amazon and Google, you’d expect them to be talking about the one in the tech sector — Twitter. But on Friday, Nomura analyst Dan Dolev said that Square, Dorsey’s payments company, is the one that resembles today’s tech giants in their early days.
Dolev thinks that these new initiatives will massively increase the number of payments Square processes by a long-term compound annual growth rate of 20%. Dolev also says that this growth will provide a 40% to 45% boost to earnings margins.
Loan origination solutions company defi SOLUTIONS just closed on $55 million in funding. The Series C round comes from Bain Capital Ventures, offering social proof along with a stamp of approval for defi’s suite of loan services. This is the Texas-based company’s first round of financing.
The primary capital portion of the investment will be used to accelerate product development, expand resources and facilities, and grow the number of employees by nearly 50% this year.
Recently disclosed results showed Citigroup, JPMorgan Chase, Bank of America and Wells Fargo took a combined $12.5 billion hit from soured card loans last year, about $2 billion more than a year ago. The FT reported.
Reuters recently warned that U.S. banks, already under pressure from slower loan growth and low interest rates, could be facing yet another challenge as a rising number of Americans fall behind on their credit card payments.
U.S. consumer credit outstanding rose in November by the most in 16 years as credit-card balances surged, recent Federal Reserve data showed, by $11.2 billion, to $1.023 trillion.
The news marks a significant month for Manhattan’s sometimes-struggling fintech scene, with MoneyLionhaving raised a whopping $42 million during its Series B in early January. And while these numbers are a drop in the bucket compared to the U.S. fintech industry surpassing $5 billion in Q3 ’17, the momentum is already being felt, and it comes as a welcome change for the city.
At the top end, some personal financial advisorscharge an annual fee plus investing expenses as a percentage of your assets under management, typically about 1% to 1.5%. As a result, these advisors often require that new clients have an account minimum of $250,000 in assets.
By comparison, robo-advisors — which use algorithms to build and manage a client’s investment portfolios and require little human interaction — charge fees from 0.45% to 0.70% of the amount managed. And many will take on new clients with $0 to open an account.
The downside of robo-advisors: Investment choices are more limited — often a small selection of low-cost index funds or exchange-traded funds — than the asset choices that full-service brokers and advisors may provide. And while many offer financial advice via email, chat or phone consultations, those hybrid services are likely to come at an additional cost.
The Tanda app, launched by the company Friday and available on Android and shortly on iOS, does exactly what its name implies. It lets you join groups of people to work toward savings goals together, in tandem: Each user pays an agreed-upon amount into a pot, choosing when they receive the money. Those who need it soonest pay a fee, and those who wait the longest receive a two-percent bonus. Yahoo Finance takes eight percent of the first payout and seven percent of the second payout, according to Android Police.
Yahoo Finance isn’t the first to think to monetize a more formal version of this sytem—the site eMoneyPool has been available to the public since 2013, servicing over $3 million, and the apps KyePot and Cashare serve a similar purpose. On Tanda, users receive a trust score, with higher scores allowing users access to larger money pools, up to $2,000.
In a national ranking, Dayton ranks relatively low for factors Lending Tree deems indicative of a competitive housing market. Prospective buyers in this area have relatively low average down payments, among other factors Lending Tree placed in the ranking.
On the list of 100 cities with the “most competitive home buyers,” Dayton ranks overall at 96, below Augusta, Ga. and above El Paso, Texas. Youngstown Ohio is last on the list at No. 100. San Francisco, Calif. is first.
In 2016, Fannie Mae named FormFree its first designated vendor for automated asset verification as part of the Day 1 Certainty initiative. Since then, FormFree has signed more than 800 lender clients, including 70 percent of the nation’s top 40 mortgage originators, and accepted over 1.25 million orders for the company’s flagship AccountChek® Asset Report. The company also increased its total number of technology integrations and reseller partnerships to over 100, making AccountChek available for more than 90% of mortgage transactions nationwide.
Peer to peer lender RateSetter said its commercial lending vertical will focus solely on secured lending in its commercial finance vertical. Following a review of its commercial finance operations, RateSetter said it would move to “simplify” its commercial finance by funding only property backed or asset backed loans.
RateSetter said it will continue to maintain a diversified approach to lending into consumer, business and motor finance markets, however, the commercial finance offer will no longer include unsecured business finance.
Challenger bank Monzo has announced it will close its popular prepaid Mastercard in early April, although its half a million customers can still enjoy valuable travel perks if they upgrade to Monzo’s current account.
Until this month, Monzo cards also offered fee-free cash withdrawals from foreign ATMs. However, this has now been capped at £200 of overseas withdrawals within a rolling 30-day period, and customers pay a 3 per cent fee if they exceed this limit.
While the UK remained the largest alternative finance market in Europe by far, at €5.6bn (£4.9bn), the rest of Europe began to play catch-up as it grew its own market by 101 per cent, the data from the university’s Centre for Alternative Finance showed.
Excluding the UK, Estonia ranked first for alternative finance volume per capita for the second year in a row, at €63, followed by Monaco and Georgia.
Britain’s start-up revolution is stalling, with the number of businesses created last year falling for the first time in almost a decade.
There were 5.5 per cent fewer start-ups in 2017 compared with 2016, according to research by DueDil, a financial analysis company. It found that 647,923 new businesses were started last year — down from 685,928 in 2016, bringing to an end what had been annual increases since 2008.
A £600 loan repaid over six months would typically cost an extra £330 to repay to a door step lender and over £500 to repay via a payday lender. Repaying via a social lender could easily halve this cost.
Hollywood actor and social activist Michael Sheen has supported the launch of a new £1 million fund set up by the Carnegie UK Trust and features in a new short film called Speaking out for Fair Credit.
“The need for ethical alternative providers is clear, whether they be on our local high streets or available online. But it’s not just about creating more providers – we need to do more to enable them to compete with the high cost providers and to provide vital financial support to communities across the UK, putting people before profit.”
It is estimated that around 150,000 people in Scotland borrow £250m from high cost lenders like pay day loan firms, door step lenders and rent-to-own shops annually.
Excluding the United Kingdom, which remained by far the largest alternative finance market in Europe at 5.6 billion euros, online alternative finance grew 101 per cent in Europe to 2.06 billion euros from 1.02 billion euros a year earlier. The UK’s market share in Europe declined to 73 per cent in 2016 from 81 per cent a year earlier as other markets grew faster.
France (444 million euros), Germany (322 million euros) and the Netherlands (194 million euros) are the three largest European alternative finance markets outside the UK, followed by Finland (142 million euros), Spain (131 million euros), Italy (127 million euros) and Georgia (103 million euros).
Peer-to-peer consumer lending is the largest alternative finance segment in Europe for the third year in a row, at 34 per cent, followed by peer-to-peer business lending (17 per cent), invoice trading (12 per cent), equity-based crowdfunding (11 per cent) and reward-based crowdfunding (nine per cent).
Fifty seven percent of business leaders say they believe global economic growth will improve in the next 12 months.
Optimism in global growth has more than doubled in the US (59%) after a period of uncertainty surrounding the election (2017: 24%). Brazil also saw a large increase in the share of CEOs who are optimistic global growth will improve (+38% to 80%). And even among the less optimistic countries such as Japan (2018: 38% vs. 2017: 11%) and the UK (2018: 36% vs. 2017: 17%), optimism in global growth has more than doubled since last year.
According to a September 2017 report from the Asian Development Bank (ADB), the trade finance gap remained relatively steady at $1.5 trillion in 2016 compared to a record high $1.6 trillion gap the year prior.1 MSMEs remain hardest hit by gaps in trade finance: the ADB report attributed 74 percent of rejected trade finance requests to MSMEs and midcap firms in 2016, compared to just 57 percent in 2015.2
ADB says this is despite fintech investment in trade finance that exceeded $13 billion in 2016 – more than half of the estimated $24 billion in total 2016 fintech investment cited in a separate report from the International Chamber of Commerce (ICC).3 Some experts – including Steven Beck, Head of Trade Finance at ADB – say fintech efforts may need to be redirected before their impact on import-export trade finance can be fully realized.4
Funding Societies, the leading peer-to-peer (P2P) lending platform in Southeast Asia, welcomed the start of the year by crossing the SGD 100 million mark in total crowdfunded SME loans across Singapore, Indonesia and Malaysia. In line with the platform’s goal of responsible growth, Funding Societies expanded its crowdfunding book by 400% in 2017 while maintaining a default rate of 1.5%.
According to statistics by the Ministry of Planning and Investment (MPI), SMEs contributed approximately 48% of Vietnam’s GDP in 2012. Moreover, based on research by the United Nations Economic and Social Commission for Asia and the Pacific, since SMEs are usually labour intensive they employed 77% of Vietnam’s labour force.
The Ministry of Planning and Investment in their survey in 2012 of SMEs ability to access financing indicated that approximately 30% of SMEs in Vietnam could not get any financing from financial institutions and another 30% that could get financing faced numerous difficulties in accessing funds.
The 2015 survey found that the percentage of firms having bank loans in 2015 for micro-sized firms was 40%, small firms 62%, medium firms 74% and 81% for large firms. Access to bank services in 2015 also took into consideration how common it was for these enterprises to give bribes to the bank staff: Micro (64%), small (56%), medium (49%) and large firms (39%). The percentage of firms that experienced how interest rates and other lending conditions applied to private businesses are always more difficult than those for SOEs: micro (74%), small (71%), medium (65%) and large (48%).
In just over a decade, alternative lending has evolved from a niche fintech play into a hundred billion dollar industry. 2017 was somewhat of a bumpy ride. Growing competition, shrinking bottom lines, stringent regulations, and traditional banks’ willingness to take on alt-lending using their financial muscle were the key trends that emerged last year. It […]
In just over a decade, alternative lending has evolved from a niche fintech play into a hundred billion dollar industry. 2017 was somewhat of a bumpy ride. Growing competition, shrinking bottom lines, stringent regulations, and traditional banks’ willingness to take on alt-lending using their financial muscle were the key trends that emerged last year. It is difficult to be sure what 2018 will bring, but here is what experts and pundits are predicting.
Ron Suber (Founder and former president, Prosper & chairman of the board, Credible) believes the marketplace lending industry has finally grown up. Companies will focus more on cash flow, profitability, and EBITDA. He encouraged online lenders to look for a lower cost of capital if they want to compete with the like of Marcus. He is also predicting the entrance of big technology companies like Amazon, Apple, Facebook, and Google.
Peter Renton (Lend Academy) believes five of the top 25 banks will launch their own platforms. He also believes Congress will pass a Madden fix and the IRS will modernize with its own API. One startling prediction he makes that one of the top online lenders (Lending Club, SoFi, Prosper, OnDeck, or Avant) will be acquired, and he believes a major platform will be hit by a cyber attack. Like everyone else, he believes the tech giants will solidify their positions in alternative lending, and more interestingly, he says messaging apps will integrate with online lending platforms.
Krista Morgan (CEO, P2Binvestor) makes predictions for MPL sector:
Companies will shift their focus on business models and unit profitability as hiring and spending decrease.
Mergers and shutdowns will continue as equity investors remain absent. She thinks it will be a tough year.
Investors believe the market is set for a correction; therefore, they will be looking at short duration assets for deploying their capital. Platforms will have to shift their focus to product development.
2018 will be the year of increased diversity.
Adam Stettner (Founder and CEO, Reliant Funding) predicts a year of instability. He also believes market variables will counterbalance themselves this year. The Fed is expected to increase interest rates, which will have a ripple effect in terms of rates for various types of loans. If unemployment levels remain low, it will lead to wage inflation. So the order of the day for alternative finance and small business funding companies will be adaptability, he says.
Additionally, Stettner sees a year of increased fraud, and companies will have to invest in identification tools and fraud detection techniques.
Two more predictions he points to are increased consolidation as companies overextend themselves and more disruption from big business names entering the space.
Juan Tavares (LendingPoint) predicts balance sheet lenders will take over, there will be more collaboration, and payments and credit will intersect more.
Small Business Lending
Trevor Dryer (Co-founder and CEO, Mirador) made predictions on small business lending:
Banks will continue to increase small business lending and alternative lenders will struggle.
Crowdfunding got a boost last year when Title III of The Jumpstart Our Business Startups Act (JOBS Act) was implemented, opening the gates for crowdfunding. Dryer believes this sector will thrive in 2018.
Alternative lending has removed physical barriers that makes the lending process faster and more convenient. Alternative lending will continue to be more inclusive and encourage more people to start businesses.
Legislative barriers will continue to fall.
Alternative lenders will focus on experience and relationship building. Companies able to streamline and automate the application processes will thrive.
Alternative Lending in India
Rajesh Gupta (Founder and CEO, Cash Suvidha) made the following predictions for the Indian alternative lending market.
A significant increase in alternative lending market share.
Favorable regulations, cash benefits, ease of usage, and increased internet and smartphone penetration.
Investors and venture capitalists will remain optimistic about the Indian alternative lending industry since it is the second most funded segment in Indian fintech.
“2018 will witness a transformation in the Indian financial landscape, all thanks to alternative lending,” he writes.
Traditional Financial Services and Alternative Investing
Kevin McPartland (Greenwich Associates) says 2018 will be the year of digital. He believes product-agnostic investing will be huge, and passive investing will gain on active investing. 2018 will also be the year that alternative data goes mainstream, he believes while data will be more important than trading. He also believes wealth management will “come out of retirement” and, finally, a ton of innovation in the financial markets as banks focus on crypto.
Chris Skinner (The Finanser Blog) writes a lot about banking’s reaction to alternative lending. He believes 2018 will be the year of artificial intelligence for banks and that banks will continue to drive digital technology deeper into their core systems. Not surprisingly, he also predicts that banks will develop more proof-of-concept operations for distributed ledger technology. Finally, he predicts the banks will develop an Enterprise Data Architecture this year to clean up their fragmented systems.
Alexander Prokhorov (FinSight Ventures) made some general predictions for fintech that apply just as well to alternative lending:
Software will converge with financial products in the U.S. and Europe
Insurtech will be more prominent
Artificial intelligence will transform financial services
There will be a lot of innovation in emerging economies such as Africa, Latin America, and Asia
Wealth management will pick up speed
Crypo assets and blockchain will take center stage for retail investing
Don Steinbrugge, CFA (Founder and CEO, Agecroft Partners) is predicting a banner year for the hedge fund industry. He believes hedge fund assets will reach an all-time high for the 10th straight year. He also believes there will be an increase in hedge funds shutting down. And there will be an increase in cryptocurrency funds. Strategies that will gain assets, he believes, include:
Asia long/short equity
Those that blur the lines between private equity and hedge funds
The Lending-Times Prediction
Allen Taylor (Editor, Lending-Times) believes more U.S. platforms will open the doors to non-accredited investors. Blockchain will feature more prominently in alternative lending with more platforms focused on crypto-lending including a prominent alternative lender adding cryptocurrency to its list of core services. He also believes increased specialization will lead to platforms targeting specific industries, regions/states, and other narrow target markets.
2018 will surely see the alternative lending industry enter a consolidation phase to withstand the changes in market dynamics, and companies best able to cope with these headwinds would emerge bigger and stronger.
News Comments Today’s main news: More LendingClub-IEG drama.Black Fish raises $145M.Moneygram partners with Ripple.Kreditech expands into India with Mambu. Today’s main analysis: JP Morgan Chase’s investments into digital technology.Is Yirendai undervalued? Today’s thought-provoking articles: Investors go into debt to buy bitcoin.Small business financing trends.How open banking could change how people manage money.Banks, trade finance, and […]
JP Morgan Chase teardown on digital technology. AT: “Besides Goldman Sachs and Citi, no other big bank is investing in digital technology like JP Morgan Chase. Whether their investments will make them a strong competitor in digital banking remains to be seen, but this is one area–at least, in the U.S.–that desires way more exploration and focus than it’s getting.”
Lending Club has all kinds of problems: a history of profit warnings, faint traces of scandal after a management upheaval almost two years ago, and a share price still more than 80 per cent adrift from its peak.
Add to that list: a bizarre, crypto-fuelled activist campaign waged by a Las Vegas-based payday lender called Paul Mathieson, who told authorities in his native Australia that he fled to America in 2008 because he feared being killed by a mobster.
Mathieson’s case for change at Lending Club, laid out in a letter to the company’s board on 2 January, is not a terrible one, on the face of it. He argues that the cost structure at the loss-making company, a pioneer in peer-to-peer lending, is “excessive,” noting fancy headquarters in San Francisco and “hundreds” of “excess” developers. He says that the board should consider a pivot to using its own balance sheet to lend, rather than acting as a broker, taking fees for matching borrowers with lenders. Underwriting has been sloppy, he says, resulting in sub-par returns to investors.
Mathieson is offering 13 shares in his own penny-stock company, IEG Holdings, for every share in Lending Club. At the time of the offer on Monday morning, that was a premium of 19 cents, or about 5 per cent.
IEG Holdings Corporation (OTCQB: IEGH) provides online unsecured consumer loans under the brand name “Mr. Amazing Loans” via its website, www.mramazingloans.com, in 20 US states. The company offers $5,000 and $10,000 personal loans over a five-year term at rates ranging from 19.9% to 29.9% APR. IEG Holdings plans future expansion to a total of 25 US states, which would cover 240mn people and represent approximately 75% of the US population.
Since 2013, IEGH has obtained additional state lending licenses, and they are licensed and originating direct consumer loans in 20 states including: Alabama, Arizona, California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maryland, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, and Wisconsin. The Company was founded in 2010 and is headquartered in Las Vegas, Nevada.
IEG Holdings Plans to Create its own IEGH Crypto/Blockchain Currency Backed by Gold Metal and SEC Registration as a Security
IEGH announced that its wholly owned subsidiary, Investment Evolution Crypto, LLC (“Crypto”), is negotiating to purchase a gold project with gold metal in the ground and prospecting licenses. IEG Holdings plans to utilize a gold resource to investigate creating, through Crypto, and a joint venture with Investment Evolution Corporation, also a wholly owned subsidiary of IEG Holdings, its own gold metal-backed crypto/blockchain currency, and potentially offer loans and accept loan repayments in its own crypto/blockchain currency.
IEGH increases loan originations
The company stated that it provided $960,000 in new consumer loans through its online property mramazingloans.com, from the October 2017 to December 2017 period. This represented a 12.3% increase over its July to September 2017 operating period, during which the company’s new loan originations were $855,000.
Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU. Of those, 20 percent have not paid off their balance. The phrase “buy bitcoin with credit” has been trending on Google for weeks.
Another problem with going into debt for cryptocurrencies is that people will have to pay back their debt before they see sufficient returns, said Erika Safran, founder of Safran Wealth Advisors. That may require tapping other resources, potentially creating further financial trouble.
Traditional bank loan rejections are notoriously high in all markets
Small Business Administration (and equivalent agencies) are nefarious for overextending the time-to-credit tolerances of small businesses
Volatility of markets, and exposure of almost all markets to disruption by startups could pose urgent cash needs for businesses, which are generally not considered for loan applications by traditional lenders.
Online Lending And Its Deepening Hold Over The Small Business Finance Market
In 2014, a Federal Reserve (US) survey concluded that one in five small business owners opted for loans from online lenders. Since then, the proliferation of online lending platforms has been on the surge, to the extent that traditional brick and mortar lending institutions have also had to move base to the online domain. In the coming years, multiple factors will result in the success and sustainability of online lending platforms. These include:
Growing confidence among small business owners to trust online lending platforms
Availability of cheaper, quicker, and more convenient loans
Options to truly personalize and customize the loan repayment terms to suit the business’ interests
The Call for Transparency in the Online Lending Market
Though the online lending market has been growing year on year, this doesn’t detract from the concerns around lack of transparency in the way some of these platforms operate. Some of the key concerns are around undisclosed APRs and hidden fees. In fact, some online lenders have been castigated for charging significantly high rates of interests from borrowers, often with service quality issues post-approval. Thankfully, there’s already some progress towards bringing a degree of regulation in place for online lending platforms to be at par with traditional lending regulations.
JPMorgan is making a bigger push into payments technology as digital banking becomes a strategic priority.
In 2016, the bank spent $9.5B on technology and Dimon has committed $300M alone to improve JPMorgan’s technology for its asset management products. Relative to its peer group, JPM claims the highest number of mobile banking customers and its Chase Mobile app currently sports a 4.7 (out of 5) rating in the App Store.
Earnings call analysis – Barclays, Bank of America, Morgan Stanley talking up digitization
JPM discussed continued digital consumer banking growth, which grew 6% in Q3’17.
Bank of America spent portions of its Q1’17 and Q3’17 talking about digital banking initiatives and technology investment. Specifically, CEO Brian Moynihan mentioned the bank spent $2.25B on technology initiatives in the first three quarters of 2017. The bank also now sees mobile devices account for 1 of every 5 deposit transactions.
On Morgan Stanley’s Q3’17 earnings call, Morgan Stanley CFO Jonathan Pruzan mentioned the bank is beta testing new customer-facing digital products it plans to launch, potentially in the robo-advisory space. Specifically, Pruzan noted: “When we think about our wealth business, it’s a business that’s built on scale. And it’s built on the fact that people with wealth want personal advice. So it’s going to be both a mix of technology and digital with the personal element of the advice channel. And we think that’s the winning formula going forward.”
Based on the data, JPMorgan ranks ahead of most bulge bracket banks when it comes to overall fintech investment since 2013, but behind its peers Goldman Sachs and Citi.
The Rise Fund, a private investment firm co-founded by the U2 lead singer, is making its first known bet on a fintech business by backing Acorns Grow Inc., said people familiar with the matter, who asked not to be identified because the details are private.
Oportun, a community development financial institution that provides small loans to individuals with little or no credit history, is planning to open 20 lending offices in Florida.
The Redwood City, Calif.-based lender said this week that it has already opened four offices in Miami and Hialeah and that it expects to add 16 more in the Sunshine State, primarily in South Florida, by the end of the year.
Convergence of Software and Financial Products One of the important lessons that Square taught the market is that bundles of software solutions (loyalty, POS, analytics, scheduling and many others) and lending are essential drivers in advancing growth of payment processing.
The Power of the Machines Companies like LendingClub are using machines to discover new relationships and patterns to introduce more tailored financial offers to their customers.
Emerging Economies Many growing companies in Africa, Asia, and Latin America are developing and adopting financial solutions, often faster and with more innovation than in developed economies.
The Internet giant is finally putting its many payments capabilities — Google Wallet, Android Pay and Pay with Google — under a single name, Google Pay, after lagging for years behind Apple Pay and Samsung Pay.
Fifth Third Bancorp has received top marks from the Federal Reserve on its most recent Community Reinvestment Act examination as expected.
Fifth Third announced the results on Wednesday, saying in a press release that the Fed gave it an “outstanding” rating on its most recent exam. The Cincinnati company had said in a regulatory filing last month that it expected to ace the test, which covered the period between Jan. 1, 2014, and June 30, 2016.
Roofstock (www.roofstock.com), the leading online marketplace for buying and selling leased single-family rental homes, today announced the strategic hire of Suresh Srinivasan as chief marketing officer. Srinivasan has 20 years’ experience leading marketing, product, and e-commerce functions at Fortune 500 and high-growth tech startups. Most recently serving as the SVP of Marketing for Xome, Srinivasan brings a deep understanding of the fast-growing real estate technology sector to Roofstock where he will be responsible for accelerating growth of Roofstock’s marketplace for single-family rental homes and developing the company’s partnership network.
Regulators in Europe and the UK are ordering banks and credit card companies to share customer data with other companies if their customers agree. The companies will also be able to carry out payments on a customers’ behalf.
Open Banking forces lenders to offer a digital “fire hose” of data that any third party can use to get standardised access — provided the startup is registered with the UK Financial Conduct Authority (FCA) and the customer agrees to share their data. They won’t have to negotiate deals with banks, just plug into their digital systems and go.
The aim of Opening Banking is to give customers greater control over their data and to encourage account switching.
ThinCats says 2018 is poised for growth. The online lender reports that December was a record month booking £12 million of funding listed on the platform followed the biggest-ever ThinCats-listed loan of £6.7 million to the Chelsea Yacht & Boat Company at the end of September.
Loan Store is the responsible lending hub that reveals to reduce the interest rates on instant cash loans for the UK people.
Hennery Dicosta, a senior adviser of Loan Store, has offered the complete details about this announcement. This is what he said- In a recent scenario, people usually try to borrow a small loan amount. That is why we have decided to provide the loans for bad credit people with no guarantor and no fees on an instant decision to resolve their short term emergencies. We never charge any processing fee and we are now providing these loans on quite low rates of interest. Besides, we do not judge the creditworthiness of the borrowers with their credit rating and give an instant decision on their loan request.
With that in mind, we asked three Motley Fool investors to each profile a company that has a low valuation now compared to its earnings-growth potential. They identified Yirendai (NYSE:YRD), Criteo S.A.(NASDAQ:CRTO), and Changyou.com (NASDAQ:CYOU) as strong contenders trading at attractive discounts.
China’s first P2P online lending platform
The Chinese P2P lending market blossomed in the late 2000s, catering to customers who were underserved by traditional banks, and is worth about $60 billion today.
Analysts expect Yirendai’s revenue and earnings to rise 74% and 14% respectively this year, followed by 43% revenue growth and 41% earnings growth next year. Yet the stock trades at just 14 times earnings, compared to an industry average of 26 for credit service providers. Based on those numbers, Yirendai looks likely an undervalued growth stock.
First, Yirendai is a subprime lender. Just 1.7% of its loans were rated as prime “Grade A” last quarter. Another 8.7% were Grade B, and 14.1% were Grade C — but 75.5% were rated Grade D. Yirendai collects higher fees from lower rated borrowers, but its business could collapse if its delinquency rates rise.
The company only discloses delinquency rates for loans past due by 15 to 89 days, and that rate came in at a low 1.8% last quarter. But it doesn’t report any data on loans delinquent for over 90 days.
Black Fish, a consumer finance platform based in China’s Nanjing region, has received $145 million in a series A round from a cluster of firms including Lightspeed China Partners and Shanghai and Kuala Lumpur based Gobi Partners.
Others who participated in the round include Morningside Venture Capital, JAFCO Asia, Fullcent Capital and Zhang Tao, founder of Dianping.com.
At this point, the average annual growth rate of consumer finance is 16.4 percent.
Renren holds a significant investment portfolio that is easily worth $12 per share. This value will likely be realized in the near term due to multiple catalysts.
The company has started to get involved with blockchain-related businesses, which potentially turns them into a “blockchain play”.
This situation leads to an asymmetrical payoff structure in which there is very little downside and significant upside. My target price is $18.
Renren was an early VC investor in Sofi, taking part in its seed round of financing as well as a later follow-on round. They currently hold a 13% stake in SoFi, having sold 14.1% of their holdings (representing 2% of SoFi) in April 2017 for $92 million.
Dianrong and the Dalian Finance Development Bureau and Dalian Finance Industry Investment Group (DFIIG) recently signed a strategic cooperation agreement to drive financial innovation in Dalian and across China. According to the agreement, Dianrong will develop a series of specific projects in partnership with the Dalian government, including:
Assist the Dalian Finance Development Bureau in creating a financial technology (fintech)cloud platform to provide fintech capabilities for small loan and guarantee companies, and other small and medium-sized financial institutions in the region and at large. Tools and services will include sophisticated fraud detection, big-data risk management tools, payment channel integration, and compliance reporting. The fintech cloud platform will also provide regulators with easier monitoring of local lending activities and trends in an ongoing and comprehensive way, helping them provide timely policy guidance and support on risk management.
Work with DFIIG to establish a special Internet finance investment fund for Dalian. The fund will focus on investment in fintech projects and startups with the potential to strengthen Dalian’s new economy and financial services industry.
Develop a supply-chain trading platform in Dalian utilizing advanced fintech and blockchain capabilities to help more small and medium-sized suppliers secure needed funding. Last year, Dianrong created the first blockchain platform for supply-chain finance with FoxConn Group, a global leader in consumer electronics.
Shanghai is one of China’s largest financial markets by market trading volume. In 2017, its trading volume was 1,438 trillion yuan ($220.9 trillion).
Shanghai has already launched a campaign against fraud and illegal behavior in financial consumer markets, such as internet-based peer-to-peer lending, cash loans to college students, and pay-day loans.
Germany’s Rocket Internet needs to hold on to its mountain of cash so it can compete with rivals from the United States and China and pounce when investment opportunities arise, the chief executive said in an interview.
Rocket is invested in more than 100 start-ups, including in financial and property tech, logistics and travel sites, with its stakes in the five biggest of them potentially worth more than 1 billion euros to Rocket, according to Berenberg bank.
Non-financial institution competitors are aggressively targeting this market, using innovations such as blockchain to develop products and tools that not only replace outdated paper and manual-based processes, but also deliver unprecedented levels of cybersecurity that are critical in today’s digital transaction space. The same ADB survey revealed more than $13 billion in venture capital was invested in FinTech trade finance in 2016 alone.
The recent Simmons & Simmons Hyperfinance studyof the world’s leading trade banks found that only 7% believe they are at the forefront of digital innovation in spite of the fact that 80% of innovation leaders report digitally-driven products and services introduced over the past three years have expanded revenue growth. This illustrates the reality that financial institutions recognize the importance of developing a digital strategy, but few are moving aggressively enough to take advantage of these new technologies.
The question before the house right now, though, is: what about the credit rating agencies? The question comes in three parts: there are the global CRAs; the smaller/regional CRAs in most of the world, and regional CRAs in the special case of China.
First, the global CRAs [there are just two of them, Moody’s and S&P] are making “strong efforts” to incorporate an understanding of ESG issues. They are hiring staff with ESG backgrounds, equipping their existing analysts with the relevant expertise, and drawing on third party providers.
Then there is China. Its CRAs include Dagong Global, China Chengxin, and Golden Credit Ratings. The idea of integrating ESG into their analyses is thus far limited to the issue of green bonds, that is, bonds issued for the development of brownfield sites. Government policy in China encourages green bonds and the CRAs have responded. The resulting assessments are focused on the “E,” not so much the “S” or the “G.” And their environmental assessments rely on measuring the impact of the project the bond aims to finance.
Research very generally supports the hypothesis that there exists a causal link between ESG factors and the credit worthiness of a borrower;
Academic research in limited in that it is too exclusively content to measure credit risk by credit ratings, rather than testing the ratings themselves against alternative measures;
But some research does employ the spread of credit default swaps as an independent measure of risk;
Anecdotal observation indicates a clear link between G and defaults, although the linkage between E and S and defaults is more difficult to pin down;
There is much evidence in the linkage of ESG to macroeconomic factors and potential growth, which in turn are important to sovereign risk in particular.
The asset-backed bond market is braced for a slew of new issues next week, with deal flow expected to be dominated by auto issuers including BMW and Mercedes.
Just two issuers sold deals this week – GM Financial and Consumer Portfolio Services – and both auto trades were met with strong demand from investors. One banker on the GM deal said the deal was over-subscribed across the capital stack.
The biggest tightening though was seen on the smallest and lower rated tranches. The 3.58-year Class B, rated Aa3/AA by Moody’s and Fitch, priced at 30bp over interpolated swaps versus guidance of 35-40bp and whispers of 45bp area.
The 3.58-year Class C, rated A1/A, priced at 50bp over interpolated swaps versus guidance of 55-60bp and whispers of 65bp area.
Currently, it represents only 1 percent of the global financial industry. By comparison, digital media accounts for 40 percent while eCommerce accounts for around 10 percent.
To give you a perspective, venture capitalists invested more than $13 billion across 840 different fintech holdings in 2016, according to a report by KPMG. This is 7 percent more than they invested in 2015.
According to the McKinsey report, five areas will see high growth over the next decade. They are consumer finance, mortgage, lending, retail payment, and wealth management.
PayPal handled $1.73 billion worth of transactions in the first quarter of 2017 alone, representing a 30 percent increase year-on-year.
Overstock’s blockchain-focused subsidiary, Medici Ventures, named its board of directors in 2017, and also saw a number of its portfolio companies continue to use blockchain to revolutionize industries including capital markets, money and banking, property registry, voting, identity, and underlying blockchain technology, including:
tZERO, the world’s first SEC approved, blockchain-based alternative trading system, launched its initial coin offering (ICO), which attracted over 10,000 subscribers and raised $100M in commitments in the first 12 hours of its pre-sale. A significant portion of the tZERO security tokens issued will be available to accredited investors in the public sale beginning in January, 2018.
DeSoto Inc., a joint venture between Overstock.com founder and CEO Patrick Byrne and world-renowned economist Hernando de Soto, was created to develop a global property registry system to surface the property rights of billions of people in the developing world.
Bitt, a Barbados-based financial technology company using blockchain to create central banking tools and mobile money applications, named Rawdon Adams, son of former Barbadian Prime Minister Tom Adams, as its CEO. Bitt also fully launched its new mMoney digital payment product, bringing to market a blockchain-based mobile wallet that allows users to participate in digital transactions on their smartphones without the need for a traditional bank account, helping to foster financial inclusion in the region.
South-American based Ripio (formally known as BitPagos), participated in an ICO that raised $37M to fund its Ethereum-based peer-to-peer lending platform, Ripio Credit Network.
Belgium-based SettleMint launched a token sale for its DataBroker DAO, a peer-to-peer marketplace created to provide Internet of Things (IoT) sensor-owners with a clear path to data monetization, and data consumers with a decentralized marketplace in order to buy IoT sensor data. SettleMint also signed an agreement with The Islamic Research and Training Institute, the research arm of the Islamic Development Bank Group, to work with local partner Ateon on developing blockchain-based financial products that can be used to support development and inclusion in IsDB member countries.
Zürich-based lender, TradePlus24, has selected Australian deep tech startup, Trade Ledger, as its global technology partner to roll out its new trade insurance wrapped lending product across their European lending network, and enter the Australian market.
According to IDC, only about a quarter of US bank technology budgets is spent on digital transformation, as opposed to business as usual. They expect this to grow to nearer 40 per cent in 2020.
Secondly, this spending could substantially boost banks’ productivity, and profits.
Banks will drive up the cost of customer acquisition for start-ups who will increasingly struggle unless they build network effects and scale very quickly. Roboadvisers and peer-to-peer lenders will be on heightened alert. Some start-ups will need to rethink their plans to disrupt and look to form partnerships instead.
Changes in financial regulation, such as a lighter touch fintech charter being examined in the US or the second payment services directive in Europe, could potentially make this more likely. The tech giants have the brands, customer reach, digital processes and flair to develop good products, and to take swift advantage of any regulatory changes.
A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.
A rising number of start-ups as well as small and medium enterprises (SMEs) are emerging in Myanmar as business opportunities rise. However, many companies fail to achieve their full potential and contribute substantially to the economy because capital assistance is lacking in the country.
Currently, local banks extend loans at interest rates ranging between 8.5 percent and 13pc. The local banks began offering SME loans at8.5pc interest in 2015. Since then, the Japan International Cooperation Agency (JICA) and KfW Development Bank from Germany have also launched SME loans.
To get around the financial constraints, borrowing from family members and peers is common.
In fact, a rising number of businesses have resorted to P2P lending for funds to build up their businesses. Without any guarantees of success though, many entrepreneurs ultimately end up in debt. Others fall prey to fraud. Last year, The Myanmar Times reported at least three cases of fraud involving fake promises of repayments with up to 30pc interest.
Cloud Lending Solutions was recognized as a “Top 25 FinTech Company for 2017” by APAC CIO Outlook Magazine. A panel of industrial experts and executives collaborated with the editorial board to curate the list with an aim to provide clarity into the ideal FinTech partners.
News Comments Today’s main news: LexinFintech relaxes on IPO funding goal. Welendus exceeds Seedrs funding target. LendingTree provides 2018 guidance prior to Investor Day. Yirendai invests in Lion Rock. Mercer delivers financial advice with AI through Facebook Messenger. Today’s main analysis: Online lenders test the faith of investors. Today’s thought-provoking articles: Why Google, Amazon scare BlackRock, Fidelity. A new chapter […]
Google, Amazon scare the bejeezus out of Fidelity and BlackRock. AT: “While I certainly see the concern, I’m still not entirely convinced Google has any interest in rolling out financial services, and I’m pretty sure they wouldn’t be as good at it as search. Amazon, that’s a different story, but I don’t see them getting too far afield of their core competency — e-commerce — either.”
“You are not on track to meet your retirement goal,” replies Amazon.com Inc.’s voice-activated digital assistant, with not a bit of sugar-coating. Then she suggests turning over $76 a month to Fidelity Investments and its advisers.
This won’t actually happen if you try it on your Amazon Alexa device at home. It’s a demonstration put on by EMoney Advisor LLC, a company owned by Fidelity, in its offices in Radnor, Pa. Amazon provides software for third-party developers to experiment with new functions. Fidelity is trying to find ways to apply artificial intelligence, computer algorithms, and voice-recognition software to the hidebound world of money management and investing.
Earlier this year, Boston-based Acadian Asset Management LLC struck a deal so its portfolio managers could use Microsoft Corp.’s Bing Predicts, which makes forecasts using search and social media data, to help pick stocks; that agreement later ended.
BlackRock, led by chief executive officer Larry Fink, in recent years has been buying stakes in other companies, particularly technology firms. Through these purchases, the company is pushing into new lines of business.
Fidelity bought EMoney in 2015. It sells software to investment advisers that’s designed to make it easier to interact with their customers on budgeting for weddings, college, or retirement.
Tianqiao Chen still wants to be part of Lending Club. Last week, while shares in America’s biggest listed online lender were tumbling after another cut to profit forecasts, the chief executive of Shanda Group bought 4m more of them, further cementing his position as the company’s biggest shareholder.
Many operators are feeling the effects of a big push for market share in the latter half of 2015 and early months of 2016, says David Snitkof, chief analytics officer at Orchard. As the platforms rushed to offer new loans, credit quality suffered, and loans originated during that period are among the worst performers, with loss rates well ahead of projections.
Across the sector, valuations have fallen. Earnest, a San Francisco-based student loans specialist, sold itself in October to Navient, the loan-servicing company, for $155m, or about 40 per cent of its peak valuation. Personal lender Prosper, once a “unicorn”, saw its pricetag drop from a peak $1.9bn to $550m in a fundraising last month.
That meant platforms had to spend heavily to bring compliance and controls systems up to scratch. Lending Club’s latest quarterly filing, for example, shows it had $1.21 of operating expenses for every dollar of fee income over the first nine months — up from $1.03 at the same point two years ago.
Revenue is anticipated to be in the range of $770 – $790 million, representing growth of 27% – 30% over the high-end of full-year 2017 guidance of $608 million.
Variable Marketing Margin is anticipated to be $270 – $280 million.
Adjusted EBITDA is anticipated to be in the range of $145 – $150 million, up 28% – 33% over the high-end of full-year 2017 guidance of $113 million.
The Analyst and Investor event is being hosted in New York at the Nasdaq MarketSite in Times Square. The presentation will begin promptly at 10:30 a.m. ET. A live audiocast with accompanying slides will be made available on the company’s investor relations website at investors.lendingtree.com.
An ICO is simply the initial public sale of a new type of digital “coins”, or “cryptocurrency”.
Judging from the prolific way these new cryptocurrency ICOs are popping up, like mushrooms after a spring rain, one might imagine any clever techie could spin one up at the kitchen table with little more than an internet connection and some well-caffeinated daring-do. Yes, ICOs are easier than crowdfunding, they have that special “blockchain” cachet going for them, and the “regulators talons” have not yet sunk deep.
In a real-life example, on September 29, 2017, the SEC filed a civil complaint in federal district court against ICO promoter Maksim Zaslavskiy and two companies run by Mr. Zaslavskiy. According to the complaint, between July and October Mr. Zaslavskiy and his companies raised at least $300,000 in an ICO touting a new cryptocurrency called “REcoin” — “the first ever cryptocurrency backed by real estate.” According to the SEC complaint, Mr. Zaslavskiy and his companies have been peddling unregistered securities. Furthermore, the complaint alleges, the companies never had any real operations even though Mr. Zaslavskiy told investors in REcoin they could expect sizeable returns from those company’s operations; the securities he sold weren’t backed by any real estate or other assets as he claimed they were; and no “REcoin” digital tokens ever actually existed.
ICOs and Crowdfunding
Circling back to the original crowdfunding thesis, we should also expect this disruptive new technology to begin surfacing in even more impactful nextgen “killer apps” for commercial real estate investment. That’s right, real estate crowdfunding may actually make a comeback by dint of being co-opted into the blockspace. New-age real estate crowdfunding ecosystems are already forming; for instance, the Real Estate Asset Ledger (“REAL”) is one application currently being talked up as a real estate crowdfunding network built on blockchain infrastructure.
Zeus CrowdFunding earned high marks recently from an independent ranking and reviews portal. The Real-Estate Crowdfunding Review named Zeus CrowdFunding the #7 real estate crowdfunding site on the Web based on its “incredible volume” and other impressive advantages.
The ranking also lauded Zeus CrowdFunding’s low default rate and semi-liquidity option and guarantee and called the company “one of the few platforms offering conservative loans below 65% LTV.”
To read The Real-Estate Crowdfunding Review’s ranking and review of Zeus CrowdFunding, visit
Open Banking is set to launch in Europe next month. As banks and fintech firms rush to ensure compliance we wanted to explore the effects on the US fintech market. Recently the CFPB set forth data sharing guidelines for banks and fintech firms to share information. There has since been a number of articles in the news pointing to frustration among fintech companies as banks have not been forthcoming with data sharing.
The current process is clumsy and requires consumers to login many times across many different services. This has also been something banks have complained about to agencies like the CFPB. Services such as Personal Capital and Mint constantly ping bank accounts for information that users have open access to. Setting up a similar initiative in the US could not only allow for a better experience but will undoubtedly be safer for the banks and fintech firms.
Simility, a provider of machine learning–powered adaptive fraud prevention solution, today announced it has secured $17.5 million during its latest funding round. PayPal, Inc. also participated in the round as a new strategic investor along with existing investors The Valley Fund and Trinity Ventures.
Matt Harris, Bain Capital Ventures: “SoftBank buys 20 percent of Stripe for $3 billion. PayPal continues to push itself down the path of being the leading financial services company for millennials and the mass market.” Dion Lisle, Capgemini SA: “‘Alexa, buy this’ or ‘Siri, I need an Uber, pay for it with my AmEx.’ Payments are going to be activated by that voice because that’s a great security method.”
Spencer Lazar, General Catalyst Partners: “Potential changes to the Consumer Financial Protection Bureau (CFPB) under the Trump Administration will likely turn back the clock on Obama-era regulations on non-bank lenders. This will be a boon to startup lenders, making it far easier to dole out capital. The fear is that rates could potentially become predatory.”
Amazon vs. JPMorgan
Andy Weissman, Union Square Ventures: “Some combination of Amazon, Google, Facebook, Apple, etc. will move deeper into online financing of small businesses.”
Tyler Sosin, Menlo Ventures: “Stripe and Adyen will merge, forming a $20 billion plus enterprise-value business and API-driven merchant processor.”
Charles Birnbaum, Bessemer Venture Partners: “Valuations in the alternative-lending space were overly optimistic in our opinion over the prior five years, but we do feel that the pendulum has likely swung back too far in the other direction following the recent pullback” leaving the sector ripe for potential funding or M&A.
Braviant Holdings, a leading fintech startup that offers analytics and technology-driven credit solutions for underserved Americans, is now offering personal loans up to $10,000 in Californiathrough its Chorus Credit online lending platform. Chorus will complement Braviant’s existing installment lending business, Balance Credit, by offering higher loan amounts at lower rates to the estimated 26% of California consumers who are underserved by traditional banks.
In 2017, we increased our solar project pipeline by an order of magnitude. This is due in large part to more resources dedicated to pipeline development, advancements in our lending practice, and – at a macro level – a rapidly growing solar market and commercial sector.
Yesterday U.S. District Judge Naomi Reice Buchwald of the Southern District of New York dismissed one of those lawsuits, Vullo v. Office of the Comptroller of the Currency. The judge dismissed the suit of the New York State Department of Financial Services, headed by Maria Vullo, against OCC on the grounds that the matter is not “ripe” for a decision on the legal ability of the Comptroller’s Office to issue such specialized charters.
Indeed, at the recent RegTech Enable conference in late November, OCC’s Beth Knickerbocker, chief innovation officer, characterized the proposal as “on hold.”
Why New York’s claim isn’t ripe
Judge Buchwald’s decision recapped the history of the proposal at length. Her decision came down to this sentence: “Claims are not ripe if they depend on the occurrence of contingent future event that may never occur at all.”
She pointed out that no injury would occur if OCC never issues such a charter to a fintech company.
Vanguard is moving to use blockchain to simplify how it updates index data underlying mutual funds, executives said on Monday, an important sign of confidence for the new financial technology.
Closely-held Vanguard, the top mutual fund firm with nearly $5 trillion under management, has successfully tested blockchain to automatically update data like the names and share prices of companies in index funds, processes that must currently be closely overseen by individuals, said Warren Pennington, a principal in Vanguard’s investment management group, in Pennsylvania.
Further, to date, the parties have not raised an important argument that this Court should consider, namely, that restricting the President’s authority over the CFPB Director’s replacement only exacerbates the serious constitutional questions currently before the D.C. Circuit with respect to the CFPB’s structure. As CUNA explains, such questions could be avoided by adopting Defendants’ position in this case. Thus, CUNA’s perspective on the central issues in this case is invaluable and unrepresented by the parties.
The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services to projects seek to use the blockchain funding model.
Specifically, accredited investors purchase Simple Agreements for Future Tokens (SAFTs), with the tokens set to be delivered at a later date. The mode has been used by a number of ICOs in recent months, and according to the page on MicroVentures, $915,000 has been raised from nine investors thus far in the new ICO.
The payments company today announced it is launching a new service called Assemble, which it calls a “prepaid innovation hub” designed to allow Mastercard partners or issuers to provide checking, budgeting, and payment features, as well as additional money management tools.
The media company evaluated personal loan companies in five key areas, reviewing data on eligibility, loan terms, fees, repayment methods and additional features. LendingPoint was cited as 2017’s top lender for people with fair to good credit, who have merit-based qualifications beyond FICO scores that make them worthy loan candidates.
Quesnay is pleased to announce that Goalsetter is the winner of the inaugural Female Founders in Tech, spotlighting female founders that positively impact the financial services and/or insurance technology industries.
The winners represented cutting-edge businesses that were also socially conscious:
– Goalsetter – Goalsetter is a goal-based savings and gifting platform, targeting millennials.
– Marinus Analytics – Marinus uses technologies to help identify and fight crimes like human trafficking and money laundering associated with it and other illicit activities
– LENDonate – LENDonate provides a marketplace lending platform for non-profits and supporters.
Approximately 100 women-led startups registered for the program with solutions ranging from artificial intelligence to blockchain to creative financial literacy and savings solutions. Seven finalists presented in New York to a panel of judges which included industry leaders from the sponsoring organizations: John Hancock, MassMutual, RGAx, Sterling National Bank, TD Bank and Thomson Reuters.
London-based MarketInvoice, which arranges loans for small companies secured by accounts receivable, will handle the underwriting for Investec customers in the partnership, according to the bank’s website. Investec will provide 50 million pounds ($67 million) in the first year to fund the loans, Anil Stocker, the startup’s co-founder and chief executive officer, said in an interview.
British banks have been mired in criticism for not lending as much as they could.
Many businesses have meanwhile found that alternative lenders lack the data to provide products that are tailored to their needs.
Rate hikes typically result in an increase in lending profitability, and so the increase often stimulates the appetite to lend.
But an increased appetite to lend doesn’t always follow an increased ability to price risks on all loan applicants, and herein lays the risk: lenders become creative with the ways in which they entice borrowers and mitigate their risks.
These loans from mainstream lenders look like the payday loans that flooded the market in the height of the recession. They take minutes to apply for, turnaround is within one day, and command interest rates of up to 23 per cent APR – five times more than some personal loans.
The figures showed growth across the UK’s alternative finance market, including crowdfunding, invoice trading, and marketplace lending. The date found a year-on-year rise of 43 per cent in 2016 from £3.2 billion to £4.58 billion.
Business marketplace lending grew by 28.5 per cent from £881 million in 2015 to £1,232 million in 2016, placing it ahead of consumer marketplace lending, which previously had the biggest share.
On Wednesday, specialist property lender LendInvest released its latest LendInvest Buy-to-Let Index report, which ranks all 105 postcode areas around England and Wales based ona combination of four metrics, which are capital gains, transaction volumes, rental yields, and rental price growth.
The Index report’s key findings include:
Manchester, leader of the Northern Powerhouse, takes top spot
Leicester breaks into the Top 10 and Birmingham climbs 8 places from #18 to #11, signaling upward mobility in the Midlands markets
Hull marks itself as biggest climber for 2017, rising 93 places to #6
Enfield tumbles from Top 10 in February to Bottom 10 in December
Those with pot sizes of less than £50,000 are increasingly being turned away by their financial adviser. In 2014 just under a quarter of clients were shown the door, whereas in 2017 this figure rose to 50 per cent.
Mr Bonanzinga thought he could combine internet data and machine learning to do a better job of ferreting out prospects. It took two years and £5m in investment for InReach Ventures to create the software, which has so far trawled through 95,000 European start-ups, picking out 2,000 that Mr Bonanzinga might be interested in.
The software determines this based on the people they are hiring, the products they are developing and the traffic on their website, among other things.
LexinFintech Holdings Ltd., a Chinese online lender that is planning to go public in the U.S., scaled back its fundraising ambitions after regulatory changes in China sparked a rout in shares of similar companies.
Lexin, a four-year-old company whose backers include Chinese online-retail giant JD.comInc., is planning to raise $120 million in an initial public offering, according to a Wednesday filing with the Securities and Exchange Commission.
Lexin Fintech plans to offer 12 million American depositary shares at an indicative price range of US$9 to US$11 a share, raising as much as US$132 million, the company said in an updated filing on Thursday to the US Securities and Exchange Commission.
The fundraising value is sharply down from an originally planned US$500 million, as mentioned in the IPO prospectus issued last month.
Local banking regulators have until the end of June to weed out noncompliant peer-to-peer (P2P) lenders, according to a circular issued by a special working group led by the China Banking Regulatory Commission (CBRC).
Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, announced today that it has made a strategic investment in Lion Rock, a comprehensive financial services platform that is focused on global asset allocation, through Lion Rock’s Series A financing of HK$50 million.
Lion Rock is headquartered in Hong Kong and offers a wide-variety of high-quality financial products, financial news, robo-advisory services as well as asset allocation services through its online platform.
FastInvest, a p2p fintech platform, recently studied data from over 8500 EU investors daily and came across a really unexpected finding. Highly specific traits and behaviors were driven by nationality over and above other individual factors when looking at big data.
From traditional investment metrics like risk aversion, to outside the box items like nationalistic tendencies and compulsive behaviors. Across numerous areas, national cultural traits could be seen solely based on country to country locales.
Even with the EU offering a bit of a more stable currency, only 1.76% of residents prefer to invest in Euro based currency loans.
Only 2.20% of Belgian investors choose PLN (Polish) currency based loans as opposed to their own Euro.
Germans appear to be the most open minded of EU countries, with 15.73% making investments in PLN currency.
The Netherlands followed behind Germany in diverting from the euro, with 9.08% of investors choosing PLN based loans.
Etherecash is one step closer to actualizing its vision of bridging the financial divide between the banked and the unbanked with the successful conclusion of its ICO ahead of schedule. The ICO is now scheduled to finish on 12th Dec 6:29 PM (GMT) after four impressive bonus rounds that outperformed expectations.
With over $30 million raised and 45000 registered participants, Etherecashcan now set its sight on eliminating traditional borders, intermediaries and prejudices in the way money is lent, spent, and sent.
Australia’s 17 million active Facebook users spend on average 1.4 hours a day liking, commenting and sharing stories with family and friends. Moreover, with roughly 17% of the earth’s population being active users of Facebook Messenger, there is irony in the fact that the smartphone generation is spending more time engaging on Facebook rather than thinking about their future financial readiness.
Accessed through Facebook Messenger, SuperBot represents the ultimate opportunity to scale financial advice across a very large proportion of the population.
Eighteen of the 25 participants in the KPMG non-bank financial institutions performance survey posted increased earnings in 2017, generating a total net profit of $216.7 million, up from $196.6 million a year earlier. Total assets grew 12 percent to $10.96 billion, with lending boosted by the nation’s strong demand for new vehicles and several non-bank institutions testing the waters in the mortgage space as the major banks become more reticent in some of their credit criteria.
The use of financial advice among high-net-worth investors (HNWI) has fallen to a five-year low, according to the insights, which show 435,000 millionaires own more than $1 million of investable assets.
Almost 75% of HNWIs relied on the expertise of a financial advice professional in 2013 – but this has declined to 68% in 2017.
Credit Suisse found the number of Australian millionaires rose by 200,000 in the year to June, marking the third-largest increase after the US and Germany in its global wealth ranking.
Indeed, interest rates on small business loans have “remained relatively high” due to a lack of competition – leaving banks as the major provider of lending to small businesses (80 per cent).
But a CCR regime would offer lenders more information about potential borrowers’ credit history than just negative credit information, as per the current standard.
The Australian government has determined a mandatory credit reporting regime to come into effect in July 2018, but a number of financial institutions such as NAB have already announced it will roll out such a regime.
Other forms of accessing finance for smaller firms or entrepreneur were large technology firms and alternative financing platforms, such as marketplace lending and crowdfunding, he added.
Financial technology firms that generate credit scores based on digital footprints of individuals will have a major role to play as banks begin to focus on lending to first generation customers who do not have credit history, former Deputy Governor of Reserve Bank of India H.R. Khan said here on Wednesday.
Mumbai-based fintech startup CapitaWorld Platform Pvt. Ltd has raised an undisclosed amount through convertible equity from high-net-worth individuals, corporate honchos and investors from Hong Kong and the Middle East.
The investors who participated in the latest round include former chief executive of Indian Banks’ Association Mohan Tanksale, Swift India CEO Kiran Shetty, Madhu Silica’s managing director Darshak Shah and former JP Morgan executive Mandar Mhatre, the startup said in a statement.
Berkshire Hathaway Specialty Insurance Co. (BHSI) announced it has introduced Financial Institution Professional Indemnity (FIPI) insurance in Asia.
The new BHSI policy is designed to cover a range of claims, from allegations of failure to disclose information, to misleading financial advice and breach of contracts, the company said in a statement. The policy combines coverage for civil liability, pre-investigations, mitigation expenses, bail bond costs, court attendance, loss of documents, and more.
The policy is designed for medium to large financial institutions, including securities dealers, regional banks, insurance companies, reinsurance companies, diversified institutions, and financial technology (fintech) and corporate advisory firms.
Brazilian fintech Nubank has launched an engineering center in Berlin as part of a plan to boost its software engineering function internationally.
Nubank has expatriated four of its engineers to Berlin to kickstart the European operations. It has also already started to hire local experts such as Gavin Bell, a senior engineer who previously managed the core data infrastructure platform at Soundcloud.