Walmart, Affirm getting closer to closing the deal. AT: “The news broke yesterday that Walmart is discussing the possibility of using Affirm to offer financing on point-of-sale purchases. If this happens, and it looks like it will, the floodgates will open to POS financing.”
You can now buy $400 pants with a subprime loan. AT: “Not friendly toward alt lenders, but an interesting read nonetheless, and the podcast even more so. This commentator is critical of Affirm and the pending Walmart-Affirm deal.”
A Walmart-Affirm partnership will strain Synchrony. AT: “Companies change. Practices change. If Synchrony dies, will it really be all that bad? Not for Walmart, and not for Affirm.”
After shallow sell-off, corporate credit spreads stabilize.
AutoFi raises $10M to make it easier to get a car loan. AT: And it will likely achieve its purpose in delivering faster loans while facilitating more auto lending.”
TD Ameritrade tackles security in Facebook Messenger chatbot.
The future of Simple. AT: “It’s refreshing to see a company admit it has strayed from its original path and is now going to repent.”
SuperMoney’s auto loan offer engine. AT: “Interesting that interest rate is the least negotiated factor among auto buyers when purchasing a car when it is where they spend the most on their purchase. I see the auto lending sector heating up in the next couple of years thanks to services like SuperMoney.”
Lending as a Service (LaaS) and why it matters. AT: “LaaS matters because it allows banks to act like technology companies without being technology companies.”
New report on fintech.
Douugh rises to challenge with AI-powered banking.
Douugh seeks to rebundle financial services.
Filippo Loreti attracts alternative investments for wristwatches.
Smart solutions for smart cities. AT: “This is the first time I’ve seen the connection made between the Internet of Things and marketplace lending. While JD Supra doesn’t spell it out, there are all sorts of solutions that can facilitate more a connected financial services sector with everyday living. They include apps for connected cars that allow you to apply for a loan from your bank or preferred lender at the push of a button. And you can just as well have one in your home, too–on the wall, on your TV, by voice command.”
Dos and don’ts for small business crowdfunding.
Why RealtyShares was the right choice for Acquire Real Estate.
Wealth management vs. financial advice.
How to win an argument. AT: “I’m a believer in indirect marketing, but this is really indirect. Show this to your sales teams.”
News Summary United States Walmart reportedly closes in on pilot deal to offer Affirm loans (Retail Dive), Rated: AAA You can now buy $400 pants with a subprime loan (The Outline), Rated: A Wal-Mart Stores To Exacerbate Synchrony Financial Woes With Affirm Deal (Baystreet), Rated: A After shallow sell-off, corporate credit spreads stabilize (Morningstar), Rated: AAA AutoFi Raises $ 10 Million Series A To Make It Easier To Get A Car Loan (Forbes), Rated: AAA How TD Ameritrade tackles security in Facebook Messenger chatbot (Financial-Planning), Rated: A The Future of Simple (Simple.com), Rated: A SuperMoney’s Auto Loan Offer Engine Will Change the Way You Buy A Car (Supermoney), Rated: A Lending as a service (LaaS) and why it matters (CIO), Rated: A New Report on Fintech from the World Economic Forum (Lend Academy), Rated: A Douugh Rises to Challenge with AI-Powered Banking (Paybefore), Rated: A Rebundling financial services is aspiration of startup Douugh (American Banker), Rated: A Ripple- Just As Good If Not Better (Investing.com), Rated: A Smart Solutions for Smart Cities (JD Supra), Rated: B SCORE: Dos and don’ts for crowdfunding small businesses (PostBulletin), Rated: B “When We Decided to Sell the Company, it Became Apparent that RealtyShares Was the Right Choice” (Crowdfund Insider), Rated: B Wealth Management vs. Financial Advice: They’re Not the Same (Kiplinger), Rated: B How to Win an Argument (Mental Floss), Rated: B United Kingdom Zopa Reports Diminishing Loss as Revenues Rise for 2016 (Crowdfund Insider), Rated: AAA A call for more considered critiques of P2P lending (AltFi), Rated: AAA Landbay Closes £2.4M Crowdfunding Round on Seedrs (Finsmes), Rated: AAA IFAs still most influential source of financial advice (P2P Finance News), Rated: A Should more banks form partnerships with alternative lenders? (Bridging and Commercial), Rated: A Debunking the peer-to-peer lending myths (City A.M.), Rated: A P2P Lending Sites Not Quite Wooing UK Customers (PYMNTS), Rated: A China Fintech in China: What’s Behind the Boom? (Brink News), Rated: AAA A global block chain summit was spot inspected, caused shock on ICO market (Xing Ping She), Rated: A European Union Klarna co-founder seeks to spur European tech giving (Financial Times), Rated: AAA Rabobank constructs physical model to understand IT architecture (Finextra), Rated: A International USAmeriBank live on Finastra hosted payments hub (Finextra), Rated: AAA AI Is the New UI – Exclusive Interview With Jake Tyler, CEO of Finn.AI (Let’s Talk Payments), Rated: A India RBI to harmonise NBFC regulations (India Times), Rated: AAA Guernsey consultation to update regs governing ‘non-regulated’ financial businesses (International Investment), Rated: A Asia The future of banking in Southeast Asia is in Cryptocurrency (Hero Email), Rated: B
Walmart reportedly is closing in on an agreement with loan services startup Affirm for a pilot program under which
Affirm would offer the retailer’s customers installment loans for purchases, sources familiar with the matter told The Wall Street Journal.The pilot could start as early as this fall.
Why are retailers so enamored with Affirm? Giving customers the option to take out an installment loan to finance a purchase gives customers more choices, making it more likely that they actually will make the purchase. Millenials and other younger demographioc consumers are often loathe to carry mountains of personal debt that way previous generations have.
However, it also has to do with the inflexible and sometimes excessive terms of store credit cards, which generally charge higher interest rates than the lowest portion of Affirm’s rate range. Still interest revenue and late fees from store cred cards contribute a significant amount of money to retailers’ bottom lines, making it difficult for them to commit to giving their customers more financing choices.
Overall though, retailers, banks and credit card companies are all starting to understand that at a time of massive change in how and where people shop, they need to make it easier for shoppers to close the deal. Mastercard may recognize this as well as Walmart does. The card network aligned with Verifone late last year
to begin offering instant installment financing at the point of sale.
Affirm may be a relatively new company, but the service it offers isn’t particularly innovative: It’s taking the concept of layaway, a type of no-interest payment plan that became popular during the Great Depression that lets you pay for things in fixed installments and take them home once you’ve paid for it in full, and twisting it for millennials. Unlike layaway, Affirm delivers your purchases instantly — but the cost of instant gratification is interest rates as high as 30 percent. The service is basically a cross between credit cards and layaway, combining the worst aspects of both.
Once your Affirm loan is approved, you can choose to pay it off in 3, 6, or 12 months, and interest rates range from 10 to 30 percent. The average customer takes out a $750 loan with a 21-percent interest rate and pays it back in nine months. Compared to credit cards, which have an
average APR of 17 percent, and personal loans that typically have interest rates ranging from 5 to 36 percent, Affirm isn’t a particularly good deal.
Affirm and Walmart have been in discussion about the possibility of teaming up since last year. Talks appear to have picked pace this year as the retailer continues to explore ways of giving customers access to a wide range of financing options to boost sales and shrug off competition posed by e-commerce platforms.
However, the move would also spell trouble for Synchrony Financial (NYSE:SYF) which is the retailer’s exclusive U.S card issuer.
The fact that Affirm offers loans could significantly reduce the number of people who apply for Synchrony credit cards.
Credit spreads in the corporate bond market stabilized last week after a brief sell-off the prior week pushed spreads higher. The average spread of the Morningstar Corporate Bond Index (our proxy for the investment-grade bond market) tightened 2 basis points to +113, and the average credit spread of the BankAmerica Merrill Lynch High Yield Master Index tightened 2 basis points to +398.
Earlier this month, British American Tobacco (BBB, stable) decided to issue $17.25 billion worth of bonds to fund its acquisition of Reynolds Tobacco. This transaction is the second-largest corporate bond deal Page 3 of 22 Morningstar Corporate Credit Research Highlights | 21 August 2017 | See Important Disclosures at the end of this report. Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 Page 3 of 22 issued this year, surpassed only by AT&T’s (BBB/UR-) $22.5 billion transaction, which itself was the third-largest corporate bond deal in history. The proceeds from the AT&T transaction will be used as the final installment for the permanent financing of its pending acquisition of Time Warner (rating: BBB+/UR-). In addition, McCormick & Co. (A+/UR-) had issued $2.5 billion of new bonds two weeks ago to finance its acquisition of Reckitt Benckiser’s food division.
Through the week ended Wednesday, Aug. 16, investors pulled $2.3 billion of assets out of the highyield market. Among the open-end funds, investors withdrew $1.0 billion of funds, and across the highyield exchange-traded funds, there was $1.3 billion of net units redeemed.
AutoFi has raised $10 million in its quest to make it easier to take out a car loan.
The San Francisco-based financial technology company said on Thursday it has completed a Series A funding round, with investors including Crosslink Capital, Ford Motor Credit Company and Lerer Hippeau Ventures.
AutoFi makes a white-label technology platform that allows car dealers to offer faster, online financing to customers. It recently partnered with Ford Motor Credit and is in the midst of launching at select Ford and Lincoln dealerships.
A common refrain in financial services these days is that companies need to go where customers are, not wait for people to come to a banking app or brokerage website.
TD Ameritrade is following that advice with a Facebook Messenger chatbot that will give customers instant updates on their portfolios and trades. The bot, unveiled Tuesday, will require the unit of Toronto-Dominion Bank to work through the privacy and security issues financial firms face whenever they communicate with customers via third-party platforms such as Messenger and Amazon’s Alexa.
Over the last few years, we have been focused on rebuilding
Simple’s technology on our new partner bank, Compass. Our focus on infrastructure and supporting customer growth means we haven’t been fully invested in building new technology that helps people feel confident that they’re doing money right. We have not made good on our promise to change an industry that is failing them.
We have been focused on growth instead of innovation. We have been acting like a bank instead of a technology company. And that changes today.
Today, we are recommitting to being a technology company that is completely focused on product. We are re-designing our team so that everything we do is in support of this focus. We will be ruthlessly dedicated to identifying customer problems and building products that solve them.
After debuting its
personal loan offer engine at Finovate in April 2017, SuperMoney today unveiled an automotive focused loan offer engine where its lending partners compete in real-time with customized auto loan offers.
auto loan offer engine allows borrowers to submit a single, easy, online application and receive multiple auto loan offers back. The tool makes apples to apples comparisons easy when shopping for the best auto financing rates, fees, and terms.
Only 31.6% of car buyers negotiate the interest rate on their loan
A recent survey by the Federal Reserve reported that 76.1% of car buyers negotiated the purchase price with the seller, but only 31.6% negotiated the interest rate on their loan. It gets worse. 27.1% of car buyers considered the monthly payment on their auto loan as the most important factor, but only 6.1% considered the interest rate on the loan as the most important factor (
Banks today are turning away more loan applicants than in recent memory thanks to stricter regulations and lingering memories of the recent financial crisis. Younger entrepreneurs who have little or no credit history often find themselves rejected from these financing options.
Even when they are accepted, the loan process can be arduous and needlessly complicated, taking longer than business owners can afford. Applications take several visits to the bank, credit checks, records requests and weeks’ worth of back-and-forth communications just to reach the underwriting phase.
The major catalyst for this new lending paradigm has been the rapid pace of online technology innovation over the last decade. Improvements in cloud infrastructure and artificial intelligence systems enable fintech companies to create reliable evaluation and matching systems for loans. Companies can now
examine a potential borrower’s financial records in minutes instead of weeks. Thanks to this compressed timeline, approval can now happen in as little as one day.
Instead of multiple meetings with bank lenders over the course of many weeks to compare options, users can often be approved in under a day by a reputable LaaS company.
LaaS platforms such as
Ezbob promise to approve a business loan for companies and deliver funds in under thirty minutes. The company’s algorithm examines more than credit scores, evaluating company financials and records to quickly distribute capital to those that require it most.
Today, the World Economic Forum released a report titled,
Beyond Fintech: A Pragmatic Assessment Of Disruptive Potential In Financial Services, that was the result of those and many other discussions they had with leaders from around the world. The report aims to answer the question about whether fintech companies will really change the financial landscape.
Below are some of the key findings from the report:
Fintech start-ups have so far fallen short of their ambitions to upend the competitive landscape in finance, driving innovation but struggling to capture market share in mature markets.
What fintechs have done is define the direction and speed of innovation across most areas of financial services; they have also set new and higher bars for user experience.
Large technology firms like Amazon and Google may represent the largest competitive threat to financial institutions, as their AI and cloud computing services become more central to the sector, and customer data rises in importance.
Models of financial services innovation around the world are diverging, benefitting local firms and making it harder to co-ordinate a regulatory response.
Banking challenger Douugh has unveiled its
artificial intelligence (AI)-powered financial platform, guided by “Sophie”—a 24/7 personal assistant for finances, reports Paybefore sister publication . Banking Technology
Douugh plans to use Sophie to help consumers make better financial decisions by:
Connecting a user’s existing bank accounts and credit cards, Sophie will collate, organize and inform on spending habits all in one place;
Using Sophie as their own personal banker to perform transactional tasks—such as paying and splitting bills, requesting money, saving, tracking and management of spending and savings goals;
Alexa and Siri for voice activation.
“You are 0% of the way to your retirement goal! You have plenty of time, keep up the good work.”
This message I recently received from the Wela app reminded me to kick my retirement saving efforts into gear. It’s an example of the kind of personalized financial advice many banks and fintechs are trying to provide right now, often with artificial intelligence engines analyzing customers’ account data, predicting future trends and making recommendations.
Based in San Francisco, Douugh strives to use artificial intelligence to help the 25-to-35-year-old set reduce their credit card and student loan debt and make better spending and saving decisions.
If you could buy a wristwatch that is the same quality as a Rolex or a Cartier for $350, would you wear it?
A company called
Filippo Loreti aims to deliver just that. The level of support that the young company is receiving from alternative investors is truly inspiring.
Thanks to the power of the Internet this watchmaker has already raised $6 million in two rounds of funding making it one of the most
successful crowdfunding projects in history.
Property “consumers” will be able to compare real-time information on a wide range of variables affecting property assets – for example, energy efficiency, connectivity and traffic noise. Banks will no longer be the only source of funds, with fast availability of internet peer-to-peer lending speeding up the time taken to put a deal together.
Blockchain or distributed ledger technology raises a number of opportunities in this field, from mortgage valuations, to rental and service charge payment systems. Smart contracts will replace the traditional approach to conveyancing – the main incentives being that the technology will expedite the process, reduce fraud and offer total transparency.
To help make a rewards-based crowdfunding effort successful, Dargie offers these dos and don’ts:
Understand the differences between rewards-based crowdfunding, equity crowdfunding and peer-to-peer lending.
Pick the right platform for your rewards-based campaign.
Follow through on your promises. Watchdog groups and state and federal consumer protection bureaus have begun to shift their attention to deceptive crowdfunding campaigns.
Fail to manage the expectations of your campaign’s backers.
Launch a campaign without the liability protection of a properly formed business entity.
Forget about taxes.
Last month, Real estate crowdfunding platform RealtyShares announced it acquired technology-first, marketplace platform Acquire Real Estate.
Now, less than 30-days later, Director of Business Development at RealtyShares and former CEO of Acquire, Josh Klimkiewicz, is sharing more details about the acquisition.
“The mission doesn’t end here. I will join the RealtyShares team as the director of commercial business development to lead that channel as RealtyShares continues to scale. In my new role, I will concentrate on building long-term relationships between RealtyShares and real estate owners across the country.”
Wealth management is one of the terms that is most overused, and it’s often misunderstood. But it’s actually pretty straightforward. Wealth management takes things up a notch, with an adviser or advisory team providing a full range of services for the client in three distinct ways.
Wealth enhancement: This is the use of strategies to deal with cash-flow issues and liquidity concerns, mitigate taxes and maximize growth.
Wealth transfer: Advisers look for the most efficient ways to pass your wealth on to your heirs in a way that lets your beneficiaries keep most or all of the money.
Wealth protection: For those who are subject to a lot of liabilities, there are strategies that can help protect hard-earned savings and avoid any blind spots.
Charitable giving: With proper planning, donating to a charity or charities can be a win-win, maximizing support for a favorite cause while making the most of certain tax advantages. Relationship management
To persuasively drive your point home, follow the tips below,
provided by online lender CashNetUSA’s SavingSpot blog and spotted by . Entrepreneur
Zopa, the first peer to peer lender to set up shop in the UK, has filed its annual accounts for 2016, and according to their numbers business is looking better.
Top line revenue improved by 61% jumping to £33.2 million for 2016. The operating loss stood at £5.9 million for the year, an improvement over the £8.9 million from year prior.
RateSetter’s wholesale lending saga and subsequent withdrawal from the Peer-to-Peer Finance Association, Zopa’s heightened loss expectations, and Funding Circlesignalling an end to manual investment, industry detractors are hardly short of fuel for their fires.
And yet we continue to endure spurious headlines that seem to be born of a broad desire to bash P2P, on the basis of seemingly anything.
Anyway. The latest episode of this kind comes courtesy of The Financial Times, which
reported on Monday that peer-to-peer lending websites are “struggling to attract UK customers who want to borrow money”.
, a London, UK-based buy-to-let mortgage lender, has closed a £2.4m crowdfunding round. Landbay
The funds were raised via Seedrs.
The company, which has raised approx. £7m to date via the crowdfunding platform, intends to use the funds to continue to expand operations and launch new products.
INDEPENDENT financial advisers (IFAs) are the most trusted source of external investment advice, but investors are still more likely to trust their own judgement, new research claims.
A survey by property finance firm Minerva Lending found that almost three quarters (72 per cent) of active investors prefer to take the advice of an IFA. However, the vast majority of active investors (77 per cent) said that they would rather trust their own judgement. Three in five (60 per cent) said that they would be more likely to trust word of mouth.
The survey also found that investors still prefer traditional investment advice over newer fintech solutions. Only 12 per cent of the investors surveyed said that they would trust a robo-adviser to offer financial guidance, and just 22 per cent would trust a standalone piece of software.
More banks should be forming partnerships with alternative lenders, one business finance provider has stated.
In the bank referral scheme, the UK’s biggest banks pass on the details of SMEs that have been turned down for loans to three SME finance platforms, which then share their details with alternative finance providers.
£4m of funding was accessed by 230 SMEs under the matchmaking scheme.
Chirag Shah, CEO of Nucleus Commercial Finance, felt there were clear benefits to the collaboration between banks and alternative lenders, but also urged for transparency.
So let’s look at some of the common arguments raised and try to filter out the fact from the fiction.
P2P will suffer in an economic downturn
Yet the oldest UK platform Zopa – which launched in 2005 – managed to survive during the financial collapse of 2008.
Admittedly the default rates jumped to 4.2 per cent from 0.4 per cent the year before, but figures from Zopa show that investors were still able to earn a four per cent annual return during the financial crash, compared to six per cent in 2007.
P2P platform Landbay commissioned an independent report in 2015 to find out how it would perform in poor economic conditions.
While the loss rate on Landbay’s loans is 0.03 per cent in normal economic conditions, the loss rate was estimated to hit 0.48 per cent if times got tough – that is, if GDP was down 3.5 per cent, unemployment rose to nine per cent, and UK house prices fell by 20 per cent. So even if the economy shrinks, investors would not have lost money.
An interest rate rise will kill the P2P industry
But Lucy Bott, head of customer operations at RateSetter, points out that interest rates on P2P platforms are not set by the banks, but by the supply of and demand for money.
P2P is for young people
He points to a report from Nesta, which found that more than half of P2P lending investors are aged 55 and over, while a third of lenders are aged 35 to 54, and just 12 per cent of investors are under 35.
Among 1,100 British consumers polled by
consultancy firm EY, only 7 percent indicated they had used such a service to borrow money this year. A separate poll of 1,050 Brits by Blumberg Capital revealed just 4 percent of them had utilized alternative lending platforms over the previous year, according to the . Financial Times
Where FinTech firms worldwide attracted $20 billion in investments over the first half of 2016, that number dropped to just $12 billion during the first six months of 2017.
The lower funding amounts could be attributed to banks having joined the peer-to-peer lending landscape, creating their own technologies or joining forces with startups to stay current, thus broadening the competitive field.
The country makes some of the world’s largest investments in the sector, and it has adopted fintech technologies faster than anywhere else. Companies such as Alipay, Lufax and ZhongAn Insurance have made their names across the globe by using fintech to develop some of the most disruptive business models. These players have enjoyed the fruits of fintech’s unprecedented growth by filling the gaps in China’s structurally imbalanced financial system in an open regulatory environment.
We believe the development of fintech in China has reached an inflection point. From this point, technology will be the key driver of value-chain disruption in an increasingly data-driven industry.
For example, it took four years for peer-to-peer transaction volume to exceed $5 billion in the U.S., while it took only two years in China. Lufax, a Chinese peer-to-peer lending platform founded in 2011, reached an annual loan origination amount of 9 billion yuan in just two years, compared to five years for Lending Club, the biggest peer-to-peer lending company in the U.S.
Recently, the Market Supervision Bureau of Shanghai Pudong New District has raided a global block chain summit that is suspected of false propaganda. According to the investigation, 35 companies set up booth to promote technology and financial products on the spot, and nearly 2,000 people attended the summit. The organizer is a Shanghai-based software technology company. The company referred to “bitcoin” technology and has developed a digital cryptocurrency ETP (entropy) on its own, which was traded on its platform.
On the spot, Law enforcement officials ordered the meeting to be halted immediately and interviewed with the parties involved. And in the same day, this news triggered a nearly 200% shock in the value of related tokens on some trading platforms, reflecting the growing risk of the ICO market. Now the company is still under investigation for alleged violations.
In the US, technology magnates from Microsoft’s Bill Gates to Facebook’s Mark Zuckerberg have started a long line of high-profile, high-minded initiatives often aimed at combating disease and helping the poor.
But in Europe, where many of the unicorns — start-ups valued at more than $1bn — are of a more recent vintage, many founders are still thinking of how to make money rather than spend it.
Two years ago, Mr Adalberth had become bored with what he describes as “the constant chasing of the next goal or achievement” at Klarna. So he stepped aside from the group and its relentless attempt to conquer the digital payment world by becoming a bank and attracting Visa in as an investor.
Instead, Mr Adalberth became one of the first of the recent crop of European tech founders to think about giving away money. The result is Norrsken Foundation, which has a triple-pronged approach aimed at encouraging social entrepreneurship. His venture is risky but is likely to be closely watched by the growing ranks of multi-millionaire European founders to see if it can provide some kind of blueprint. “There is a trend in the US to give something back. This trend has come to Sweden and maybe Europe as well,” he says.
Rabobank has built a 3D model of its own organisation and supporting IT systems to help visualise improvements that can be made as it embarks on its digital transformation programme.
As a banking co-operative operating at both local and regional levels, the Dutch bank runs a complex network of independent IT platforms often performing the same functions depending on local practices.
USAmeriBank selected Finastra’s hosted solution in order to have the flexibility to quickly add new payments rails and services, future-proofing its technology investment, while improving customer service and increasing straight-through processing.
In addition to quick time-to-market and ease of implementation, another benefit of using a hosted solution is a reduction of maintenance effort and total cost of ownership, as the technology and business services are maintained by Finastra.
In the coming months, the bank plans to add US ACH, and eventually real-time payments components, completing the bank’s journey to a fully-outsourced payment processing model.
LTP: Give us a high-level paragraph pitch for your company.
JT: The Finn Virtual Banking Assistant is a personal banking and financial management assistant, powered by artificial intelligence.
Finn delivers a personal banker within a customer’s favorite channels, including Facebook Messenger, Amazon Alexa, Google Assistant, SMS, iOS and Android apps, and web chat. We believe that
. AI is the new UI
LTP: In a sentence or two, what specific problems are you solving today?
JT: We help banks connect with customers where they already are (in major instant messaging and voice platforms), adapt to a new paradigm of consumer expectations set by Apple, Amazon, Google and Facebook where deep personalization and simple conversational interfaces are the norm, and reduce costs by augmenting human customer care agents with AI.
LTP: What are the biggest challenges you face when building with AI and ML, being nascent technologies? How have you overcome, or are you overcoming, those challenges?
JT: The biggest challenge is data, both quantity and quality. We address this by going deep in one core vertical – banking. We have a large, pre-existing data model in this domain that grows daily as consumers use our assistant. As new banks adopt Finn they are able to leverage this data model to deploy a high-quality assistant with proven features much faster than they would otherwise be able to do. India
There is scope for harmonisation of regulations covering non-banking financial companies (NBFCs) and the Reserve Bank is moving in that direction, Deputy Governor N S Vishwanathan said today.
He also said there is a need to create some new types of NBFCs to cater to the needs of the growing economy.
Lending, Credit & Finance Consultation Paper is aimed jointly at enabling Guernsey to accommodate the growing number of “innovative, often digitally-enabled, financial services which don’t neatly fit into the boxes marked banking, insurance, investment or fiduciary covered by current laws”, as well as to better protect Guernsey consumers and investors, “particularly those who are less financially able, from unscrupulous lending practises”, the GFSC says, in a summary of the LC&FCP‘s contents.
The proposed legislation would replace this existing NRFSB Law.
To read and download the consultation paper,
He also said there is a need to create some new types of NBFCs to cater to the needs of the growing economy.
Read more at:
The future of banking in Southeast Asia is in Cryptocurrency (Hero Email), Rated: B
There are an estimated two (2) billion people in the world who remain unbanked and underbanked. That’s roughly a quarter of the entire planet’s population who have little to no direct access to financial services most commonly found in banks and formal lending institutions.
In Southeast Asia, approximately only twenty-seven (27%) of the entire region are financially included, leaving the rest with little to no defense in times of economic crises.
Hero will build a blockchain-based credit algorithm and lending platform. Hero will be launching its own cryptocurrency coin called Hero Token through an upcoming token sale.
The majority of populations who suffer from financial exclusion live in emerging countries such as the Philippines, Indonesia and their neighbors in Southeast Asia. A notable fact about this region [SEA] is that it is the fastest growing Internet region in the world and is also the fourth largest.
Backed by an award winning group of experts, the organization started operating in the Philippines in 2015 as PawnHero, offering collateralized loans using an online platform, and since then has been helping thousands of Filipinos obtain access to affordable credit.
There will also be a ‘pre-sale’ wherein people can buy tokens prior to the actual token sale and get bonuses. During the pre-sale, Hero will offer 80% of all tokens to be created for purchase by the public in the Hero Initial Coin Offering under the ticker symbol Hero. The remaining 20% of all Hero tokens will be distributed to early believers, advisors and founders.
To participate in the Hero token sale people can send the following currencies – Ethereum (ETH), ETH Classic, BitCoin (BTC), Ripple, LiteCoin, and Waves from a wallet they directly control to the Hero wallet. Aside from these, extra tokens will be offered to those who commit early. Bounties are provided when the crowdsale ends. All payments received for Hero tokens in connection with this token sale will be held in escrow in a multi-signature address, with a multi-key structure.
For more information go to
George Popescu Allen Taylor
News Comments Today’s main news: SoFi battles its first PR crisis. Small businesses braced for higher costs post-Brexit. ID Finance sees potential in Brazilian market, sees 82% revenue growth in 2017 first half. Today’s main analysis: Pullback in subprime loans. Prosper’s Q2 numbers. Today’s thought-provoking articles: New fintech lenders encroaching on business banking turf. Pullback on subprime loans. Hongling Capital […]
News Summary United States SoFi battles its first major PR crisis (Tearsheet), Rated: AAA Start of a New Trend? Pullback in Subprime Loans Observed (GlobeNewswire), Rated: AAA Prosper Reports Strong Q2 Numbers – Is Cash Flow Positive Again (Lend Academy), Rated: AAA New Fintech Lenders Encroaching On Business Banking Turf (The Financial Brand), Rated: AAA Goldman Tops Banks Betting on a New Type of Hedging (Bloomberg), Rated: A A hot fintech startup has amassed nearly $ 5 billion from people willing to hand over their bank logins (Business Insider), Rated: A What you need to know about financial services fraud (Tearsheet), Rated: A Community banks stand to gain from blockchain — if they work together (American Banker), Rated: A Top and The Best Peer-To-Peer (P2P) Lending Sites For Online Loans (FX Daily Report), Rated: A CFPB Says Tribal Online Lender Case Belongs In Illinois (Law360), Rated: A Why fintech startups love advertising on the New York City subway (Tearsheet), Rated: A Charlotte fintech startup targets couples who don’t merge finances (Charlotte Agenda), Rated: A Small banks’ fintech efforts held back by Volcker Rule (American Banker), Rated: A I bought a new Surface with the Surface Plus program (onmsft.com), Rated: A Alan Gellman Joins Credible as Chief Marketing Officer (PR Web), Rated: B New Leaf Communities, in Partnership With RealtyeVest, to Build 35 Unit Townhome Project Near Amazon Fulfillment Center (GlobeNewswire), Rated: B United Kingdom Funding Circle: Small businesses braced for higher costs after Brexit (P2P Finance News), Rated: AAA Buy-to-let property platform hits £50m milestone (Property Industry Eye), Rated: A 4thWay Criticizes Competitors: “Comparison Websites Display Wildly Inaccurate Information About Peer-to-Peer Lending” (Crowdfund Insider), Rated: A The Start Up Loans Company and NatWest to help UK firms access alternative finance (Startups.co.uk), Rated: A Robo roundtable: Restricted advice like buying an ill-fitting suit (Citywire), Rated: A China Hongling Capital: The Worst Victim of China’s P2P Lending Regulatory Crackdown (Lend Academy), Rated: AAA Where is China’s Silicon Valley? (SCMP), Rated: AAA Fintech In China: Hitting The Moving Target (Oliver Wyman), Rated: A European Union Review of My Linked Finance Investment After 6 Months (P2P-Banking), Rated: A The Destiny of European Corporate Banking (TechBullion), Rated: A International ID Finance sees “huge potential” for online lending in Brazil as it reports 82% revenue growth in first half of 2017 (ID Finance Email), Rated: AAA Captain’s Log, Aug 16 (e27), Rated: A Five trends that will shape commercial real estate in future (Lanka Business Online), Rated: B Australia Tic:Toc Wants To Bust The Big Bank Myth About Online Home Loans (Which-50), Rated: AAA India Capital Float in advance talks to raise Rs 300-crore (India Times), Rated: AAA Funding Societies is First P2P Lender to Join International Association of Credit Portfolio Managers (Crowdfund Insider), Rated: B Asia The future of banking in Southeast Asia (HERO), Rated: A
In a wrongful dismissal suit filed
last week, a former employee reportedly claimed he was let go after he told management he had seen female employees subjected to lewd and inappropriate comments and that managers canceled loan applications when internal errors were made — a tactic to secure quarterly bonuses of up to $15,000. There’s also talk of a second class-action lawsuit alleging broader mistreatment of employees at the company.
But experts said the extent of the damage to the SoFi brand will center on whether other employees come forward to corroborate the allegations.
Jim Prosser, vp of communications and policy at SoFi, said the company carried out an internal investigation into the matter and challenged the notion that loan applications could be arbitrarily cancelled.
Based on sentiment expressed on Twitter, the lawsuit hasn’t made a big dent in SoFi’s brand reputation. Since the news broke Friday, 119 tweets mentioned the SoFi Twitter handle, 53 percent of which were positive and 47 percent were negative, according to Brandwatch. Compared to the past month, the SoFi handle attracted 920 mentions, 75 percent of which were positive. Still, Terry maintains that it’s not a massive conversation, and the news may have gotten less play with the violence in Charlottesville, Virginia, capturing headlines.
For the first time since 2012, originations to subprime consumers declined year-over-year for a number of major credit products, according to TransUnion’s (NYSE:
TRU) Q2 2017 Industry Insights Report. The report, powered by Prama SM analytics, found that 4.63 million subprime consumers originated an auto loan or lease, personal loan or credit card in Q1 2017. Comparatively, 4.89 million subprime consumers originated one of these products in Q1 2016.
In Q1 2017, subprime personal loan originations declined 10.6% year-over-year, compared to a positive annual growth rate of 11.0% in Q1 2016. This marks three straight quarters of year-over-year declines in originations. More than 100,000 fewer subprime consumers opened a personal loan in Q1 2017 than in Q1 2016.
In fact, personal loan originations declined for all risk tiers, but at lower rates than for subprime originations. Total originations dropped 6.9% from 2.99 million in Q1 2016 to 2.78 million in Q1 2017.
In the credit card market, subprime originations declined by 1.8% to start 2017, the second consecutive quarter of decline. Since 2014, subprime originations had increased at a rapid rate, averaging growth of 29.2% in the first quarters of 2014, 2015 and 2016. In Q1 2017, subprime originations declined at nearly the same rate as total originations (down 1.9%).
As subprime consumers gained access to credit cards, lenders kept subprime credit lines low. In Q1 2017, subprime consumers held just 2.6% of total credit lines.
Auto loan originations declined 8.9% year-over-year from Q1 2016 to Q1 2017. Originations to subprime consumers dropped to 1.10 million in Q1 2017, down from 1.20 million in the first quarter of 2016. At the same time, total originations declined just 2.9% to 6.73 million in Q1 2017.
Mortgage Delinquency Rate Drops to New Low since Recession
The mortgage delinquency rate reached the lowest level since the recession in the second quarter of 2017, dropping below 2% for the first time in almost 10 years. The mortgage delinquency rate was 1.92% in Q2 2017, down 16.5% from 2.30% in Q2 2016.
Viewed one quarter in arrears, mortgage originations remained relatively steady year-over-year in the first quarter of 2017. Up slightly from 1.46 million in Q1 2016, mortgage originations reached 1.49 million in Q1 2017. Largely due to the rise in interest rates, originations declined 28.3% between Q4 2016 and Q1 2017. A year prior, originations only declined 9.4% between Q4 2015 and Q1 2016.
More than 83% of mortgage originations were in the prime and above risk tiers in the first quarter of 2017. Market share of prime and above risk tiers has remained roughly in that range since Q4 2013.
The average new account balance, also viewed one quarter in arrears, declined 1.6% from $223,262 in Q1 2016 to $219,743 in Q1 2017.
Total Credit Card Balances Rise Following Rich Credit Offers in 2016
The latest TransUnion
Industry Insights report found that total credit card balances continued their steady year-over-year increase in the second quarter of 2017. Total card balances reached nearly $714 billion, up 7.8% from $662 billion in Q2 2016. The average balance per consumer grew 3.3% to $5,422, up from $5,247 in Q2 2016.
The credit card delinquency rate reached 1.46% in Q2 2017, up 13.2% from 1.29% in Q2 2016. This brings the card delinquency rate above the average Q2 delinquency reading of 1.27% for the last three years.
Auto Delinquency Rate Rises after Years of Non-prime Origination Growth
Industry Insights Report found that the auto delinquency rate reached 1.23% in Q2 2017, an increase of 10.8% from 1.11% Q2 2016.
Viewed one quarter in arrears, auto originations declined to 6.73 million in Q1 2017, down 2.9% from 6.93 million in Q1 2016. This marks the third consecutive quarter of year-over-year declines in auto originations and the first decline in origination growth in any first quarter since 2010.
Total auto balances achieved a new high in Q1 2017, reaching $1.145 trillion. The total balance was up 6.9% from $1.072 trillion in Q1 2016.
Personal Loans Reach New Milestones as Balances Grow and Delinquencies Drop
In the second quarter of 2017, the personal loan delinquency rate declined to the lowest level since 2009. The delinquency rate was 3.02% in Q2 2017, an 8.5% decline from 3.30% in Q2 2016.
Personal loan balances achieved a new milestone of nearly $107 billion in Q2 2017, growing 10.8% over Q2 2016, when total balances were $96 billion. While balances increased, the growth rate was lower than the average Q2 growth rate of 24.7% for the past three years. The average balance per consumer also reached a new high at $7,781 in the second quarter, up slightly from $7,745 in Q2 2016.
Personal loan originations, viewed one quarter in arrears, declined 6.9% to 2.78 million in Q2 2017, compared to 2.99 million in Q2 2016.
more charts and details about TransUnion’s Q2 2017 Industry Insights Report or to register for TransUnion’s Q2 2017 Industry Insights Webinar.
Source: Lend Academy
As you can see in the graphic above Prosper had a rocky 2016. They went from a quarterly origination high of over $1.1 billion in Q4 2015 to a low of $312 million in Q3 2016. Since that time they have shown some solid growth with originations in Q2 2017 coming in at $775 million up from $586 million in Q1. They still have a long way to go before they reach record levels but growth has returned to the first US marketplace lender.
Total originations from inception through June 30, 2017 was $9.7 billion.
Transaction fee revenue rose to $35.4 million, up 32% quarter-over-quarter and 84% year-over-year.
Whole loans represented 94% of total loan volume in Q2.
Adjusted EBITDA was $6.7 million up from a loss of $11.6 million in Q2 2016.
Source: Lend Academy
Small and micro businesses struggle to get the cash they need. According to the Federal Reserve’s
small business credit survey, 60% of applicants obtained less financing than they needed.
And they need money. The top challenge facing small businesses, says the Fed, is credit availability or securing funds for expansion (44%), followed by paying operating expenses (36%), making payments on debt (25%), and purchasing inventory or supplies to fulfill contracts (17%).
Unfortunately, size makes these loans unattractive to many banking providers. More than half (55%) of small businesses needed $100,000 or less and three-quarters sought $250,000 or less.
Can Smaller Banks and Credit Unions Compete? And Should They?
First, while online lender websites may be alluring, small business owners are still concerned about data security and privacy — particularly with these neo-lender startups. Second, the product features among fintechs are not always clearly stated, making it difficult to compare product offerings and costs.
These issues mean many small businesses still prefer to get a loan from a bank. Half (50%) seek financing from a large bank, and 21% from online lenders. And their preference is for loans not credit cards; 86% say they applied for a loan or a line of credit vs. only 31% who just applied for a credit card.
Smaller loans can be profitable, if you approach them in new ways using new tools.
Reengineer the Process with Big Data. With so much data available on small business owners and more computing power, banks can use big data in innovative ways to decision loans. No longer limited to a credit score, big data can analyze the behavior of the business and predict its ability to pay back the loan. Big data also means that fewer applications must be sent to a human for decisioning. Real-time decisioning cuts costs for the bank and since so much customer data is already digitized, there’s less need to require borrowers to submit reams of documentation.
Partner with Fintech. Rather than try to compete with online alternative lenders, consider joining them. IN 2015, J.P. Morgan Chase & Co. announced a partnership with to create online small business loans. Called Chase Business Quick Capital, it provides Chase customers with faster access to cash than a traditional bank loan. Chase states that the capital can be available in the same day. In the past, a small business loan could take weeks to decision and then fund. On Deck Capital
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading big banks in plowing record funds into outside ventures trying to disrupt their industry, a role typically dominated by venture capital firms, according to a report from Opimas, a management consultancy.
Goldman Sachs has invested in about 15 so-called fintech firms focusing on capital markets businesses this year, while JPMorgan has bet on nine, the report shows. Altogether, banks and other established companies will probably pump a record $1.7 billion into the sector through 44 deals in 2017, Opimas estimated.
Personal Capital is a startup known for its free platform, which allows people to plug in their bank and investment accounts to see all their financials at once.
CEO Jay Shah says Personal Capital has been monetizing the business by getting richer clients to pay for financial advice.
The startup recently raised an additional $40 million in outside funding.
The company is managing assets for Americans worth about $4.9 billion, and increasingly the customers are more affluent, Personal Capital’s CEO, Jay Shah, told Business Insider in a recent interview.
Shah declined to say how many of the company’s estimated 1.5 million free users convert to paying for financial advice from the free platform.
In finance, there are three distinct patterns of fraud: transaction fraud, application fraud and account takeover fraud.
Card issuers lost $15.72 billion (72 percent) in gross fraud losses in 2015 and merchants and acquirers lost the remaining $6.12 billion (28 percent), according to the Nilson Report.
Application fraud is the fastest-growing type of fraud in financial services and happens when a fraudster actually pretends to be you using actual account credentials to open new lines of credit. We can break it down even further into three types:
Third party fraud: when someone gets enough of someone’s personal information from a compromised data set to go to a bank and pretend to be that person to apply or a loan or credit card
First party fraud: when the person coming to the bank (or other service) really is the person he or she claims to be but intends to not pay back the loan or credit card; in instances of first party fraud, the bank or business is the victim, not the customer
Synthetic fraud: when someone creates a persona using fake or borrowed information, like a social security number, and adds other, made-up elements of personally identifiable information like a name, address or date or birth
Account takeover fraud is the final type of fraud (for the purposes of this primer, at least). It happens to people when fraudsters obtain their various user IDs and passwords to be able to access other accounts that involve financial transactions.
Did those new chip cards I got help?
Kind of! Account takeover incidents increased 61 percent to $2.3 billion from 2015 to 2016, according to research by Javelin published in February. Victims pay an average of $263 out of pocket and spent 20.7 million hours to resolve it in 2016 – six million hours more than in 2015.
Blockchain is most widely known as the platform to house virtual currencies such as
bitcoin, ethereum and litecoin. But the uses for blockchain are going well beyond virtual currencies. The Republic of Georgia, for example, voted in April 2016 to implement a land ownership registry that relies on blockchain to verify ownership of property. If the United States did something similar with blockchain, banks could close real estate loans more quickly. Think about a world where ownership interests in real estate can be verified immediately and with certainty.
In this world, the expansive role of the title agent would essentially dissipate (or be greatly minimized), the time taken to verify title would be eliminated and, most important, the cost associated with confirming a title interest through title insurance would be dramatically reduced. All of these results would improve the closing process, both from an efficiency standpoint for banks and from a cost standpoint for the customer.
Technologists are also using blockchain to try to replace our needlessly difficult residential mortgage loan origination processes so that the process, from application to closing, can be reduced from a few weeks to a few days.
To realize these kinds of opportunities, community banks in a region should collaborate on strategies to bring blockchain into the banking industry.
A PriceWaterhouseCoopers report noted that though the P2P industry is in its infancy loans to the tune of $5.5 billion have been disbursed by the P2P websites in the U.S. in 2014 alone. According to PriceWaterhouseCoopers, P2P lending could be more than $150 billion by 2025.
#1: Funding Circle
Funding Circle has disbursed more than $1 billion in loans to over 8,000 businesses in the world. Along with the growth in terms of the number of businesses borrowing from the company, Funding Circle has seen a substantial growth in the number of investors too. In fact, Funding Circle’s investor base includes banks, other financial institutions, and more than 40,000 retail investors. Even the U.K. government is an investor.
#2: Lending Club
As leading online lending marketplace, the company that connects borrowers and lenders has disbursed loans to the tune of $11,167,217,348 as of mid-2015.
The minimum amount you can borrow is $3,000 and the maximum is $35,000. The annual percentage rate or APR starts at 4.7 percent. They offer loans for just about everything.
#4: CircleBack Lending
Loans are offered by CircleBack Lending for tenures of 3 or 5 years and amounts ranging from $3,001 to $35,000. The APR ranges from 6.63 percent to 36 percent.
#5: Prosper Marketplace
The company has registered tremendous growth since its inception and currently has a client base of more than 250,000. Prosper has disbursed loans worth more than $4 billion so far.
This popular lending marketplace offers 3-year loans ranging from $1,000 to $25,000 with an APR of 7.12 percent to 29.99 percent. Peerform does not look at the FICO score alone in order to measure the risk of lending. The company’s Loan Analyzer carries out the evaluation on a case to case basis. According to Peerform, the Loan Analyzer was developed in consultation with leading economists and it follows a differentiated method for determining the creditworthiness of each borrower. As a result, even individuals whose credit scores are in the range of 600 may be able to secure loans.
SoFi’s offers loans starting from $5,000 and up to $100,000, which is higher compared to the standard amount of $35,000 offered by many other players in the peer-to-peer marketplace.
The Consumer Financial Protection Bureau urged an Illinois federal judge Monday not to transfer a suit claiming four Native American tribe-owned companies charged excessively high interest for online loans, saying there’s much more reason to keep the suit in Illinois than to move it to the companies’ preferred Kansas venue.
Golden Valley Lending Inc. and three other online lenders owned by the California-based Habematolel Pomo of Upper Lake Tribe had asked U.S. District Judge Thomas M. Durkin in June to transfer the CFPB’s suit to Kansas,….
For a consumer fintech startup, it’s the perfect place to put some advertising dollars. TransferWise has built its business around the ability to let people send money overseas at a low cost. Sixty percent of its users are immigrants; 40 percent are American-born. Its employees represent more than 50 countries. Its user base and prospective customer pool looks a lot like the people of New York.
Even if they’re American-born, theres still a chance they moved to New York from someplace else. TransferWise wants to send the message that it celebrates that diversity.
The subway is a hot destination for startups in general, looking to stretch their marketing budgets. E-commerce startups like Thinx and Casper both love advertising on the subway, calling them “conversation starters” and a way to be in a city where “trends are set.” They’re also effective, say these companies: David Zhang, Casper’s CMO, told
Tearsheet’s sister site, Digiday that subway ads are highly effective to target local audience because when riders get stuck on the train, they have nowhere to look except at those ads.
Three years ago Venmo ran an ad campaign around the New York subway featuring an everyday millennial called “Lucas” (who, it turns out, was a Venmo engineer). Venmo’s message to subway riders was the same (although less nostalgic and bittersweet): we do the same things you do, we understand you. The campaign sparked a lot of
frustration and confusion for consumers — but the company was engaging with them.
Couples today are getting married later.
And when they do get hitched, they’re much less likely to combine their finances. Only one-third of millennial couples are putting everything in a joint bank account and fully merging their money. That’s down from about half of couples overall,
according to research from TD Bank.
Honeyfi, an app planning a formal beta launch later this week, is designed to allow couples to blend finances to the extent they’re willing to — and figure out how to manage things accordingly.
Both sides load in all their financial accounts but can choose what’s visible to their significant other — both at the account level and at the individual transaction level. If you want to keep your shopping spree under wraps, you can do that with Honeyfi.
The Dodd-Frank Act’s Volcker Rule was meant to protect the financial system by prohibiting banks from engaging in certain risky activities. But it may also be stopping community banks from being able to reap significant benefits from the fintech revolution.
Here’s a couple of things to note: In order to be considered for the Surface Plus Program, you are required to purchase Microsoft Complete and you will be required to do a credit check through KLARNA. KLARNA handles the financing and you will have to
make your monthly payments through KLARNA and . After choosing the Surface Pro (fan-less Intel Kaby Lake i5 processor, 8 GB RAM, 256 SSD)I found that my 24-month payment plan is similar to a AT&T phone payment plan. NOT Microsoft
I have not started making payments yet, but my payments will be about $63 a month, with an option to upgrade after 18 months.
MORE THAN two thirds of small businesses that import goods and services expect costs to increase when Britain leaves the European Union, Funding Circle claims.
A poll of 1,325 small business borrowers by the peer-to-peer platform found 69 per cent of firms expect their average costs to increase by £5,300 per month resulting in £60,000 per year of extra spending.
Businesses were also deflated by the overall result of the general election with only 12 per cent stating that they feel positive about the outcome, while 41 per cent were concerned.
Founded in 2012 with an initial focus on Manchester, the House Crowd claims to offer investors returns of 8-10% to fund property projects, known as peer-to-peer (P2P) lending.
There have been 307 projects funded so far, all of which are secured on the underlying property.
The worst inaccuracies were found to be:
Five of the six are presenting peer-to-peer lending as “savings” rather than “investing” a year after the Financial Conduct Authority expressed well-founded concerns about this practice.
The two money sites that compare P2P investments in their comparison tables include P2P lending in savings account comparison tables rather than separate investment comparison tables.
Risk of fraud and negligence were not mentioned by any of the money sites.
Just one of the six mentioned the risks to investors of concentrating their pots on just one P2P lending platform.
Risks identified in behavioral investing theory (such as poor investing results from those who are too greedy or fearful) were not mentioned by any of the sites.
None of the six explained the full costs to investors of using P2P services, typically covering just a smaller part of the costs (the lending fee), while sometimes leaving the impression that lending is completely free. (It is never free for investors due to hidden costs.)
No money sites made clear the vast difference in risks between the various P2P lending platforms.
Just one generic money site explains that bad debts might be higher in a financial downturn.
While all showed the risk of losses if a P2P lending platform goes out of business, five did not explain that you could experience delays in getting your money back.
Five out of six relied heavily on provision funds and on the level of interest rates to assess whether a P2P lending platform is safe, assuming safety is always correlated. (Interest rates are an unreliable measure of risk and provision funds are a secondary risk-control or risk-measurement devices. Much more important factors include such things as solid underwriting and credit-risk models, good security and low bad debt history.)
Some of the money sites did not explain that provision funds might not always be sufficient to cover losses.
All six fail to mention that you might not in all circumstances be able to get your money back as soon as you expect, even if there is an option to sell your loans and exit early.
The Start Ups Loans Company, headline sponsor of the Startups Awards 2017, has announced a partnership with NatWest to help UK businesses access alternative sources of funding.
The government-backed Start Up Loans Company joins six other finance providers on the Capital Connections scheme including Seedrs, Funding Circle, Assetz Capital, iwoca, Together and NatWest Social & Community Capital.
New Model Adviser® sat down with the heads of three robo firms, or ‘digital wealth managers’.
Adam French, chief executive, Scalable Capital
Johann Bornman, director of product, ETFmatic
Giovanni Dapra, chief executive, Moneyfarm
The platform now has over 20 billion yuan ($3 billion) assets to settle, which includes 5 billion yuan ($750 million) of non-performing assets and 800 million yuan ($120 million) of bad debts. As of August 12, Hongling Capital has had 1.85 million investors and the accumulated trade volume is 274.7 billion yuan ($41 billion).
Established in 2009, Hongling as one of the oldest P2P platforms in China and they have created many innovative practices in P2P lending. However, some of these practices were later banned by the new regulatory rules. The large loans model was one of them.
Before the P2P lending industry took off in China, there were few explicit regulatory rules. However in August 2016, regulators released new rules on the loosely regulated industry, capping the size of loans at 1 million yuan ($149,000) for individuals and 5 million yuan ($743,000) for companies.
Although Hongling is one of the largest P2P platforms measured by trade volume, it has barely made a profit and even began to make loss recently: Hongling Capital made a loss of 183 million yuan ($27.4 million) in 2016 whilst in 2015 their business was still in the black.
This is largely because Hongling has a tradition of guaranteeing principal and interest on loans it facilitates – this is another common practice in the P2P lending industry in China that was initiated by Hongling and later banned by the new regulations.
When Ben Hu and his ex-Google partners wanted to build something to completely disrupt the traditional language teaching industry by artificial intelligence, it was not Silicon Valley they turned to for help, but Shanghai.
Source: South China Morning Post
Unlike the United States, where some of the most powerful companies are concentrated within the 1,854 square miles (4,801.8 square kilometres) Silicon Valley, with some spilling into nearby San Francisco, in China, tech hubs are scattered across numerous cities with mega cities – Beijing, Shanghai and Shenzhen – taking the lead.
Source: South China Morning Post
Between 2010 to 2013, investors had valued no more than one Chinese company a year. In 2014, five were classified as unicorns.
The first seven months of this year have seen an eye-popping 13 Chinese companies crowned unicorns, according to research firm CB Insights. This compared with the US’ 16 unicorns in January to July.
The report, based on a survey of more than 800 technology leaders globally, found that cities in the US and China are expected to make up six of the top 10 innovation hubs, outside of Silicon Valley/San Francisco, over the next four years, with Shanghai being on top of the list.
We have not yet seen the full potential of fintech in China. We believe that technological advances, coupled with the unique circumstances of China’s financial system, will propel fintech companies to further drive innovation and disrupt the traditional financial services space. Premier Li Keqiang commented at the inauguration ceremony of WeBank, the new web-based bank owned by Tencent, “It’s one small step for WeBank, one giant step for the country’s financial reform.”
Download the full report
here. European Union
The best part of my Linked Finance experience is that so far all payments have been made on time. Certainly I expect that there will be delays and defaults, but I appreciate that there have been none so far and this confirms the very low overall default rate Linked Finance shows in its statistics
The only disadvantages of Linked Finance are:
1.2% fee for investors
No secondary market
self calculated ROI so far is 5.6% (XIRR), but some of that is due to the initial cash drag and this figure will rise.
The banking world faces unforeseen challenges as it tries to hold on to customers who are being tempted to try alternative banking solutions by Fintech companies; finance start-ups and large technical corporations. These banking alternatives are attracting customer attention with lucrative proposals as they infiltrate the banking world which has up to now been the exclusive territory of conventional, traditional banking.
By going digital and fully automated financial companies can reduce expenses. They can also make AML easier through live monitoring for illegal activity. A major issue facing conventional banks today is an inability to improve their banking systems sufficiently and adjust to the increased KYC (Know Your Client) and AML (Anti Money Laundering) regulations procedures now in place. EMIs on the other hand usually operate newer and more advanced banking systems which make them appear to financial companies as insusceptible to fraudulent activity.
ID Finance sees “huge potential” for online lending in Brazil as it reports 82% revenue growth in first half of 2017 (ID Finance Email), Rated: AAA
Uber in talks for a Global ride-hailing giant
Uber is in exclusive talks to raise as much as US$12 billion in funding from SoftBank.
As per this report,
Tencent Holdings has also explored contributing funds to the round.
Modalku joins hands with TaniHub to launch fintech solution for SMEs
Indonesian P2P lending platform
Modalku has partnered with agritech startup TaniHub to launch a new fintech solution for small businesses operating in the areas of agriculture and supply chain financing.
Airports will be hassle-free
Technology will do 90% of the work – Surveying—the term used for leasing and investment brokers, property managers and valuers—is ripe for automation. Tasks such as rent collection, the examination of financial information, property valuation, and monitoring market conditions are predicted to be completed with the help of artificial intelligence and deep learning.
More investment in the emerging markets – In the Philippines, in Q1, six office developments were completed adding 113,000 sqm of office space in the capital Metro Manila. Impressively, the average vacancy rate is as low as 4%.
Unbanked lending will develop further – Alternatives to bank loans will continue to gather momentum. In countries like Mexico, peer-to-peer lending targeted at the underserved/unbanked population will prosper and bring more home buyers into the market. Customers searching for lower interest rates will also be tempted by the more favorable rates on offer by non-traditional lenders.
Agility will shape the market Australia
Emerging online lender and local fintech Tic:Toc, which says it offers a full home loan approval online in just 22 minutes, wants to bust the myth that consumers still need bank branches to apply for a mortgage.
When asked about the role of physical bank branches in a digital world, the
big banks are adamant that consumers want to speak to a human in person when they are signing up for decades of debt.
But that’s a myth, argues Anthony Baum, Tic:Toc founder and CEO. And particularly so, if someone has already gone through the home loan approval process once, he suggests.
According to Baum, The most popular time to apply for a home loan online is 7pm on Thursday evening — well outside regular office hours.
The average age of applicants using the Tic:Toc platform is 41 for men and 39 for women, and it’s a 50/50 split between applications to refinance and to make a new purchase. The median mortgage repayment is $1,680 per month and a variable interest rate home loan is the most popular product on the platform.
Tic:Toc’s first settlement was completed last Friday, exactly one month after launch. The smallest loan “in the settlement pipeline” is $60,000 and the biggest is $1 million.
Baum says Tic:Toc is the first of its kind in the world. The closest offer in the market already is US-based
Rocket, which doesn’t offer valuation and document generation, he said. India
Bengaluru-based digital lending startup Capital Float is in advanced talks to raise Rs 300 crore, according to two sources familiar with the development. US-based fintech-focused venture capital fund Ribbit Capital is in talks to lead the fresh capital infusion, said one of the sources mentioned above.
Capital Float, which specialises in lending to small and medium enterprises, will use the fresh funds for expanding its lending portfolio to consumer financing and for financing kirana stores as well, said the people mentioned above.
Funding Societies also reported that risk expert
Terry Tse has joined the online lender’s Board of Directors. Mr. Tse is the former Chief Risk Officer of Dianrong – one of China’s leading P2P lending platforms. Before joining Dianrong, Terry Tse spent many years in consulting and banking with Oliver Wyman and Deutsche Bank respectively. He currently serves as the Senior Vice President of Lian Lian Pay and is responsible for its international business development. Asia
Hero Token is starting their Official Bounty Program in order to reward BitcoinTalk Supporters, and it has one of the biggest Bounty Pools to be ever awarded on Bitcointalk!
The Program will run until
the end of ICO
A total of 2% Hero Tokens from the Total Supply of Hero Tokens are reserved for the Bounty Campaigns. If the hard cap is reached, that amounts to 1.25M Hero Tokens ( 6250 ETH or $1.875M at a price of 300$/ETH ).
1 ETH=200 Hero Tokens
5% of Total Bounty will be allocated to Facebook
Tier 3 : Having 500+ friends: 5
Tier 2 : Having 2000+ friends: 10 stakes
Tier 1 : Having 5000+ friends: 25 stakes
Tier 0: Having 10.000+ friends: 50 stakes
Extra Tier : 25.000+ friends/followers : 100 stakes
1: Your must have a minimum of 500 friends.
2: Your Facebook account must not be fake, inactive or a bot account. Only original Facebook accounts will be accepted.
3: You must be an active and regular Facebook user, and must be sharing and liking HERO’s official posts and updates.
4: Account must be open as a Public Profile and all Posts shared need to be public as well.
4: Multiple accounts are not allowed. Those found using such multi accounts will be disqualified and blacklisted from any and all future campaigns.
5: Terms and Conditions are subject to change if necessary.
From the HERO white paper:
Introduction Two billion people, about 40% of the global population, are still unbanked or underbanked and cannot get access to affordable credit, even if they have well-paying jobs and are connected to the Internet.
Savings and lending are foundational building blocks of modern society, serving as both fuel for funding economic growth and funds in times of financial need. Today we call the former as capital, and the latter as credit. Increased access to capital for the unbanked can have a positive impact of historical proportions. Without access to capital, Columbus’s expeditions to the Americas may not have occurred, and perhaps nor would the subsequent explorations of the “New World”. Without proper financing mechanisms, neither the Industrial Revolution nor the tech boom in Silicon Valley would have spread at such rapid speed. Both national and local economies are affected by the ease or difficulty to access capital. Access to credit is just as important. If you translate the examples earlier to a local level, then you have billions of people who don’t have access to credit to allow them to go to school, remain healthy and grow their small businesses – credit remains a roadblock to economic prosperity for billions of people, even if they have the talent, ambition and work ethics to prosper.
Download and read the white paper
George Popescu Allen Taylor