Thursday December 20 2018, Daily News Digest

US Yield Curve

News Comments Today’s main news: OnDeck to enter equipment financing. SoFi releases video to destigmatize debt. RateSetter sees 47% revenue growth. Funding Circle fund expects lower returns. 360 Finance financials. Today’s main analysis: U.S. yield curve inverts. Today’s thought-provoking articles: Why did OnDeck file suit in Arlington? Fewer Americans rely on cash. More than half of Americans can’t cover a $1,000 […]

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

US Yield Curve

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United States

United Kingdom

China/Hong Kong

Southeast Asia

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News Summary

United States

OnDeck (ONDK) to Enter Equipment Financing Market (StreetInsider), Rated: AAA

OnDeck announced today that it will begin offering equipment finance loans to select U.S. small businesses next year, bringing its heralded technology and digital lending expertise to what has traditionally been a slow-moving, opaque, and complicated process.

Who’s On Deck? And why are they in Arlington? We explain. (Biz Journals), Rated: AAA

At 2 p.m. on a Friday in mid-October, it’s judgment day for 13 small companies from across the country.

The plaintiff is On Deck Capital Inc., a publicly traded online small business lender based in New York that has sued each of the 13 companies for not repaying loans. Its choice of setting: the Arlington General District Courthouse.

New SoFi Campaign Aims To Destigmatize Debt and Financial Insecurity In Powerful “Money Talks” Video (PR Newswire), Rated: AAA

SoFi today launched a campaign showcasing some of its members’ most intimate stories around their personal struggles with money. Produced in collaboration with director Tatia Pilieva, the filmmaker most notably known for her sensational short film ‘First Kiss,’ the video captures twelve SoFi members, strangers to each other, meeting for the first time to have open-ended, unfiltered conversations about their lives, their money, and their views for their futures.

The video, along with more about the members featured in the video, are now live at 

US Yield Curve Inverts; Spreads Widening on New FinTech Deals (PeerIQ), Rated: AAA

Core CPI rose by 2.2% keeping the Fed on track to raise interest rates next week for the fourth time this year. The market-implied probability of a rate hike next week is ~77%, although the rate hike path in 2019 remains uncertain. The US yield curve saw its first post-crisis flatteningwhich we will look at in greater detail below.

US Yield Curve Inverts for the First Time Post-Crisis

The US yield-curve saw its first inversion post-crisis as the spreads between the yields on 3-year and 5-year Treasuries fell to -1 bps. The spread between the yields on 3-month and 10-year treasuries has been an accurate predictor of past recessions. As the chart below shows, there have been 6 recessions since 1970 after the 3-month – 10-year curve inverted. Currently, the 3-month – 10-year curve is 49 bps away from inversion, but markets are watching every part of the yield curve closely.

Source: Federal Reserve, PeerIQ

Spreads are Widening on New FinTech Deals

LendingClub and CommonBond are out with new securitizations. KBRA has rated the tranches on LendingClub’s latest $272 Mn deal CLUB 2018-P3 A-, BBB, and BB. The $300 Mn collateral pool consists of 17,825 Prime loans with an average balance of $16.8 k, a weighted average coupon of 14.58%, and a weighted average remaining term of 48 months. The weighted average FICO score of the borrowers is 703. The deal has an initial O/C of 9.2% and an excess spread of 9.1%. Both the O/C and excess spread are the lowest for LC’s 2018 prime deals. This deal priced 27-50bps wider than LC’s prior deal in September due to market volatility and widening structured products spreads, according to DebtWire.

More Americans are making no weekly purchases with cash (Pew Research), Rated: AAA

Entegra Bank Chooses Velocity Solutions to Power Its Small Business Digital Lending (deBanked), Rated: A

Velocity Solutions announced today that its Akouba digital lending platform was selected by Entegra Bank to power the bank’s digital lending for its small and medium-sized business customers. Akouba provides community and regional banks with origination and underwriting services.

LoanStreet Signs Up Workers Credit Union to Use Fintech Loan Participation Platform (Crowdfund Insider), Rated: B

LoanStreet, a Fintech “loan participation platform,” has signed up Massachusetts-based Workers Credit Union to its growing network.

Lending Express Appoints Former Maple Founder Ofer Ariel to Chief Product Officer; Promotes Daniel Katz to Chief Operating Officer (PR Newswire), Rated: B

Lending Express, the technology company dedicated to increasing access to funding for small businesses, today announced the promotions of Ofer Ariel and Daniel Katz to Chief Product Officer and Chief Operating Officer, respectively. This announcement follows a period of impressive growth for the company, and is indicative of its commitment to provide best-in-class service to both its customers and partners.

United Kingdom

RateSetter Announces 2017-18 Revenue Growth of 47% (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced last week the results of its 2017-2018 financial year, which ended on March 31, 2018. The lending platform reported that revenues were up by 47% (which was £34.3 million) from the previous year (£23.4 million). The company noted that the year-end, there were 44,441 active investors on the platform with loans under management of £700 million.

Funding Circle fund expecting lower returns (AltFi), Rated: AAA

A hit from its European Investment Bank transaction as well as higher UK loss rates have prompted a fall in expected returns for the Funding Circle SME Income fund.

The £332m Funding Circle SME Income Fund saw a fall in its net asset value (NAV) of 1.4 per cent in November as the investment trust’s board said it expected returns for the full year would be lower than previously anticipated owing to a higher expected rate of defaults among certain loan pools.

Orca opens waiting list ahead of 2019 IFISA launch (P2P Finance News), Rated: A

ORCA has opened a waiting list for investors interested in its self-select portfolio and Innovative Finance ISA (IFISA), with plans to launch both products in the first quarter of 2019.

The peer-to-peer lending analysis and investment platform, which first revealed its plans to launch a tax wrapper to Peer2Peer Finance News in October, said the Orca ISA will allow investors to hold multiple P2P loans from different providers in one tax wrapper.

It will offer interest of up to 6.5 per cent.

Transferwise – the power of partnerships (Fintech Futures), Rated: A

Cross-border payments were ripe for disruption and doing more than most to shake up things is peer-to-peer (P2P) specialist, Transferwise. Its number of partnerships with banks is multiplying while, in parallel, it is adding settlement options, most recently for direct access to the euro payment infrastructure through a euro settlement account with the Bank of Lithuania.

At present, with one notable exception, the partner banks that have been announced are challenger or other low-end players. However, it now claims over four million people around the world using its service to transfer over £3 billion each month. In the UK, global head of partnerships, Stuart Gregory, says its share of consumer international transfers is around 15%, putting in on or close to a par with some of the largest UK banks.

P2P property lending platform completes £10m investment round (AltFi), Rated: A

Peer-to-peer property lending platform BLEND Network has completed a £10m late-seed round of investing.

N26 Metal Now Available in the UK (coverageR), Rated: A

N26, the provider of mobile banking services which launched in the UK last month with a free account, is now offering N26 Metal – its first premium membership for UK customers.

For the price of £14.90 per month, Metal members get access to an exclusive partner program, dedicated customer service, and worldwide travel insurance provided by Allianz. In addition, members benefit from free ATM withdrawals in pounds, free payments in any currency, free withdrawals worldwide, and LoungeKey airport access in over 1k destinations.

This ex-Googler wants to help high street banks be more like Monzo (Yahoo! Finance), Rated: A

The head of innovation at one of Britain’s big high street banks told me earlier this year that he has a mantra when approaching a new problem: “What would Monzo do?”

Traditional banks are struggling to keep pace as Monzo pushes the boundaries. The startup sends smartphone push alerts when you spend money, knows when you’re abroad, lets you freeze your debit card if lost, and offers chatbot customer service — all through the app.

Onfido Sees 342 Pct Sales Growth In 2018 (PYMNTS), Rated: A

Onfido, the global identity verification company, announced Tuesday (Dec. 18) that it achieved 342 percent sales growth in 2018 compared with 2017 and that it has a four-year growth rate of 3,857 percent.

Starling Bank’s Megan Caywood jumps to Barclays’ ship (Fintech Futures), Rated: B

Megan Caywood, Starling Bank’s chief platform officer, is joining Barclays, as she handed in her notice a couple of weeks ago, according to TechCrunch.

China/Hong Kong

How a Chinese anti-virus software maker builds a fintech firm to wrestle with giants (TechCrunch), Rated: AAA

360 Finance,  an online consumer loan platform that spun off from China’s anti-virus service giant 360 Group, has joined a raft of Chinese fintech companies to go public in the U.S. over the last two years.

The company priced its initial public offering at $16.50 per share last Friday, raising $51 million by selling 3.1 million American depositary shares.

Source: TechCrunch

You’ve applied for a Virtual Bank license, what’s next? (Hubbis), Rated: AAA

Hong Kong is preparing for the arrival of virtual banks (VB) — pure digital players that offer banking services solely through digital channels without bricks-and-mortar branches. In an exclusive article from Synpulse we discover the challenges associated with virtual banking.

What is your differentiating proposition?

With HKMA’s recent announcement of receiving 29 applications for VB, competition is expected to be intense.

Focus on Customer Needs

Basic banking services are about fulfilling three main needs of the customer:

  • How do I pay or get paid?
  • How can I borrow?
  • How do I grow or protect my savings?

Capitalize on strong partnerships

FinTechs have traditionally excelled in one particular area (e.g.p2p lending, remittance and FX conversion).

Avoid a Pure Discount Model

VBs can leverage their lower operating costs to provide lower fees, higher deposit rates or other price incentives to attract customers. However, without a clear differentiating proposition, a pure low-cost play will not be sustainable.

Jiayin, a Top Player in P2P Lending Business, Files for $ 57.5 Million IPO on Nasdaq (Capital Watch), Rated: A

A leading individual financial marketplace, Jiayin Group Inc., is seeking to raise up to $57.5 million in an initial public offering on the Nasdaq Global Select Market in New York.

ByteDance registers fintech trademarks (Technode), Rated: A

In July, Jinri Toutiao launched a fintech product named Safe Lending. Up to 20,000 users were permitted to borrow up to RMB 200,000 (around $30,000) per person per day. The company claimed the Bank of Nanjing was one of its loan partners.

The product became the subject of investigations by the media in September. ByteDance later shuttered the online money lending service, while thousands of Chinese P2P lending companies shut down in the second half of the year.

PINTEC Partners with China National Investment & Guaranty Corporation to Develop Digital Lending Technologies (Markets Insider), Rated: B

Pintec Technology Holdings Ltd. (“PINTEC”) (NASDAQ: PT) today signed a strategic cooperation agreement with China National Investment & Guaranty Corporation (“I&G”), a leading enterprise in China’s guarantee industry. The two sides will jointly develop the next generation digital lending technologies and nurture a dynamic credit financing ecosystem for small and micro-sized enterprises in China.

European Union

Online Lender Creditshelf Partners with CrossLend to Offer First Digital Securitization of Loans (Crowdfund Insider), Rated: AAA

Germany based Fintech creditshelf Aktiengesellschaft, an SME financing platform, is launching a new partnership with CrossLend to offer the first digital securitization of SME loans in Germany.

A Visit to Crowdestor in Riga (P2P Banking), Rated: A

On invitation of Crowdestor I travelled to Riga and met the founders of Crowdestor Janis Timma and Gunars Udris. Crowdestor is a Latvian p2p lending platform for SME loans. They launched a year ago. Loans are typically for terms of up to 18 months and interest rates are quite high – the current loan offer by a transportation company seeking expansion capital carries 17% interest rate. The Crowdestor website is available in English, German and Portuguese language. Currently most investors on the platform are Germans, followed by Spanish investors.

Funding Options: From Fintech Petting Zoos To SME Lending Sanctuaries (Forbes), Rated: A

Both financial institutions and fintech startups have made serving SMEs a priority in 2018. However, despite business current accounts like Mettle being created this year, online comparison marketplace Funding Options has helped millions of firms across Europe, especially those that cannot get traditional bank lending because they are early-stage, high-growth or in difficulty, since its launch in 2012.

International

Finastra announces Eric Duffaut as President and Global Head of Field Operations (RealWire), Rated: A

Finastra has appointed Eric Duffaut as President and Global Head of Field Operations. Based at Finastra’s London Headquarters, Duffaut will take responsibility for the company’s entire go-to-market organization including global sales, services and consultancy, as well as overseeing the Finastra partner ecosystem.

Strengthening the Spread: ETHOS Now Live on Nitrogen Network (CoinTelegraph), Rated: A

Token of Ethos.io, a leading cryptocurrency wallet provider and Blockchain Financial Services (BFS) platform, has been officially listed on Nitrogen Network, a new decentralized peer-to-peer crypto lending network.

Nitrogen Network enables market participants to lend and borrow cryptocurrencies on their own terms, all while maintaining control of their holdings and private keys. This supports effective portfolio management and a diverse range of investment views across a wide variety of crypto assets.

Australia

As banks become stricter with lending, could your HELP debt get in the way of getting a home loan? (ABC.net.au), Rated: AAA

As banks rein in lending in the wake of the banking royal commission which revealed “irresponsible lending is endemic in Australia”, those who might have easily secured a home loan a few years ago now face much more stringent criteria.

Banks are looking more carefully at expenses and debts which, for 2.7 million Australians, will include a HELP (formerly HECS) debt.

India

NBFC Vivriti Capital secures Rs 200 Cr from Creation Investments in Series-A equity funding (Your Story), Rated: AAA

Vivriti Capital, a Chennai-based lending platform for corporate entities, has raised Series A equity funding of Rs 200 crores from Creation Investments, an investment management company focused on financial services.

Crowdfunding – A Brief Overview Of The Regulatory Framework (Mondaq), Rated: A

3. Peer-to-Peer Lending or Debt Crowdfunding: Peer-to-Peer Lending (P2P lending) is a form of crowdfunding used to raise loans which are re-paid along with interest. It can be defined as the use of an online platform that matches lenders with borrowers in order to provide unsecured loans. The borrower can either be an individual or a legal person requiring a loan. The interest rate may be set by the platform or by mutual agreement between the borrower and the lender. Fees are paid to the platform by both the lender as well as the borrower.2

4. Equity Crowdfunding:

The SEBI Consultation Paper furnishes proposals for a regulatory framework governing procedure of Security based Crowdfunding methods for Start-ups and Small and Medium Enterprises (SMEs).

The Directions define a “Non-banking financial company – Peer to Peer Lending Platform”4(NBFC-P2P) as a non-banking institution which carries on the business of a Peer-to-Peer Lending Platform. Peer-to- Peer Lending Platform5 has been defined as an intermediary providing the services of loan facilitation via online medium or otherwise, to the participants6(a person who has entered into an arrangement with an NBFC-P2P to lend on it or to avail of loan facilitation services provided by it). Non-banking institutions other than companies have been prohibited from undertaking the business of Peer-to-Peer Lending platform.7 The Directions provide the scope of activities, prudential norms (the aggregate loans taken by a borrower at any point of time, across all P2Ps, is subject to a cap of Rs.10,00,000/-), operational guidelines, inter alia other regulations.

Southeast Asia

Why the ASEAN P2P lending market will avoid the Chinese pitfalls (ASEAN Today), Rated: AAA

To say that 2018 was a rough year for peer-to-peer (P2P) lending businesses in China would be a gross understatement. It was nothing short of a bloodbath, mirroring in many ways the US sub-prime mortgage crisis of 2008-09.

China, despite its economic power, shares the following crucial features with smaller markets in South and Southeast Asia:

  • A large percentage of small-to-medium enterprises (SMEs) and individuals without access to traditional banking services
  • High mobile penetration among the population
  • Easy access to investor funds, both domestic as well as international

The Southeast Asian approach to P2P lending regulation is more proactive than the Chinese model

In the heydays of P2P platforms in China, the authorities pursued more of a “wait and watch” approach. In marked contrast, the regulatory bodies of Southeast Asian economies have adopted more pro-active steps to regulation.

Korea’s digital banks have two speeds: fast and faster (Asia Money), Rated: A

The average internet speed in South Korea is 26.7 megabits per second, faster than anywhere else in the world, according to French virtual private network developer Le VPN.

No Korean bank has ever been in the mix for this much-coveted prize. Nor did a single Korean firm appear in the latest Forbes rankings of the world’s 50 most innovative fintech companies. Indeed, it’s hard to identify a single well-known and home-grown fintech brand. There’s no Korean answer to, say, China’s Ant Financial, or Singapore-based ride-sharing-to-food-delivery service Grab.

OJK Pledges to Announce Names of Illegal Fintech Firm (Tempo), Rated: A

The Financial Services Authority (OJK) committed to monitoring legal and registered financial technology (fintech) companies of peer-to-peer lending or online loan as an effort to maintain the security for consumers.

Eurasia

Russia Is A Top Five Leader Of Digital Banking In Europe (Forbes), Rated: AAA

Because of the lack of legacy IT infrastructure within banks in Russia, the country has been listed in the top five leaders of digital banking in Europe, according to a new Deloitte and ID Finance report.

Latin America

Vitacon innovates again and launches an investment opportunity starting at USD250 with return of up to 12,8% per year (PR Newswire), Rated: AAA

Vitacon, a leading construction company that is revolutionizing the way people live in São Paulo, is launching one more investment opportunity for people seeking new options for earning income and diversifying their portfolios. The company, which for the past nine years has been incentivizing the shared economy in its residential developments, is launching the possibility for any investor to invest directly USD250 in a CD, a fixed income security issued by Banco Topázio, with a 24-month maturity, which allows for annual yields of up to 12.8%.

This new method, P2P Lending, is similar to one introduced in 2015, when Vitacon launched the first real estate crowdfunding, which surpassed expectations and created an international benchmark in the field, raising 28% above what was expected for the construction of the VN Cardoso de Melo building in a very prime location of São Paulo, scheduled for delivery next year.

Authors:

George Popescu
Allen Taylor

The post Thursday December 20 2018, Daily News Digest appeared first on Lending Times.

Thursday March 23 2017, Daily News Digest

insurtech

News Comments Today’s main news: Kabbage to raise money for acquisitions, possibly OnDeck. Fundbox partners with Zoho. Goji launches diversified P2P lending bond. HNW Lending launches IFISA. Property Crowd launches IFISA. Today’s main analysis: Ron Suber on Fintech & fraud. Today’s thought-provoking articles: Podcast: Dominic Venturo on creating a model for innovation. Alternative finance for SMEs is even more urgent. Jail […]

insurtech

News Comments

United States

United Kingdom

European Union

Australia

Canada

China

India

Asia

Latin America

News Summary

United States

Kabbage looks to raise money for acquisitions (Reuters), Rated: AAA

Small U.S. business online lender Kabbage Inc is in talks to raise a new round of equity funding that could be used for potential acquisitions at a time when many of its peers face funding challenges, people familiar with the matter said.

One of the acquisition targets under consideration by Kabbage is rival On Deck Capital Inc, which has market capitalization of $321 million, according to one of the sources.

Ron Suber on Fintech & Fraud: A Global Challenge (Crowdfund Insider), Rated: AAA

How fraud occurs is a never-ending, shape-shifting challenge for individuals, companies and public authorities. There will always be another Ponzi or Madoff looking to separate hard-earned money from honest people via duplicitous actions. As all types of business shift online, fraudster’s will inevitably adapt to pursue their malevolent objectives.

Some of the challenges that impact online lenders include:

  • “Shotgunning” – taking out multiple loans from multiple platforms in under ten days
  • Loan stacking – multiple unsecured loans over several months

Download Ron Suber’s special report “Fintech & Fraud” here.

FUNDBOX PARTNERS WITH ZOHO TO SOLVE CASH FLOW GAPS (Fundbox Email), Rated: AAA

Fundbox, the cash flow optimization platform for small businesses (SMBs), and Zoho, the cloud-based business operating system, today announced a partnership in which Zoho will offer Fundbox to its user base of over 25M. Under the partnership, Zoho will provide access to Fundbox’s technology to streamline and automate the business borrowing experience within the Zoho ecosystem.

Fundbox addresses one of the biggest pain points for small businesses and freelancers: cash flow.  A recent Fundbox study revealed that 64 percent of small businesses are adversely affected by late payments. Over 80 percent of small business invoices are over 30 days due. This integration will allow Zoho customers approved for Fundbox Credit to advance funds tied up in their receivables so they can focus on business growth.

U.S. Bank’s Dominic Venturo on creating a model for innovation (Tearsheet), Rated: AAA

Every institution innovates differently. Our approach is to work with the businesses to understand their objectives and strategies. We want to keep a long-term eye on emerging technology and how consumers and businesses interact with technology. We’ll blend that into the product development roadmaps for the businesses. In some cases, emerging technology will look like it has a lot of potential but then you really have to see how it applies to a business, whether it solves a customer problem or pain point, and whether it can scale to a company our size. I don’t know if this is different than others, but it’s definitely our approach.

Ondeck announces extension, upsize of revolving credit facility with Deutsche Bank (Reuters), Rated: A

On Deck Capital Inc – amended its asset-backed revolving credit facility with Deutsche bank to extend facility’s maturity date to march 2019

On Deck Capital Inc – amended credit facility to increase facility’s borrowing capacity by about $52 million to a total of up to approximately $214 million

Online small-business lending recovering (Biz Journals), Rated: A

For online business lenders, 2016 was a rough year.

Two prominent fintech companies saw their market valuations drop. One small-business lender abruptly stopped issuing loans temporarily due to performance issues, while another was forced to shut down.

Lifshitz offers his view on the subject:

1. Fintech loan originations will surge in 2017.

It’s clear to me that the fintech space’s long-term themes are unchanged. The credit gap remains, and fintech companies still provide a much-needed service. Plus, they’re doing so in a far easier and seamless way than has been available to customers in the past.

Those who reacted to the negativity of 2016 are going to be surprised. Fintech companies will recover from the sector’s downbeat view. Demand and originations will continue to grow. I predict that market sentiment will come back as confidence returns.

2. Fintech companies will adapt by diversifying products and target markets.

Fintech also will get a boost from a secular trend. More millennials are joining the workforce and consuming more services online, including financial services. The generational change favors fintech companies.

3. Fintech companies could form partnerships with banks.

4. Fintech will dominate the user experience.

How one startup aims to help ‘credit invisible’ foreign workers in the U.S. (Tearsheet), Rated: A

For millions of immigrants and temporary foreign residents in the U.S., establishing a financial identity here can be complicated and expensive. Since credit reports don’t cross borders, an immigrant with an exceptional credit score in his home country may arrive in the U.S. as ‘credit invisible’ — a status that may render him ineligible for loans or long-term housing.

Nova Credit is an alternative score to assess foreign residents’ creditworthiness based on their home country credit data. It can also be used for Americans returning to the country after years working abroad. The company obtains the data through agreements with major foreign credit bureaus, a process that can only be initiated with the customer’s consent, Esipov said. Though Nova Credit is initially focusing on India and Mexico, it’s entered into arrangements with credit bureaus in Europe, Canada, Australia and the Philippines. Its revenue model is based on fees to lenders who request the reports.

BP Podcast 219: Private Lending, Turnkey Investing, and Crowdfunding Real Estate with Dr. Kenyon Meadows (Bigger Pockets), Rated: A

If you are looking to make your real estate more passive, this is one show you can’t afford to miss!

Humans to Robos: You Can’t Touch This (Think Advisor), Rated: A

Over the past five years, robo-advisors that provide algorithm-based financial advice and online portfolio management have skyrocketed in popularity. Once the robots take over, the argument goes, humans will be no more.

A commoditized approach to investing cannot incorporate potentially high-impact life events in the same way a knowledgeable human advisor can. Humans offer expertise throughout the life cycle of a client’s investments, while a robo-advisor often reduces a client to a formula. Moreover, the human advisor offers another invaluable service that the robo-advisor can’t replicate – emotional intelligence.

Industry research supports our view. The Financial Planning Association and Investopedia found that investors want a low cost, automated platform combined with personal advice from a human adviseor. Moreover, they noted that 40% of the investors surveyed revealed they are very uncomfortable with automated investing during periods of extreme market volatility.

MyPrivateBanking estimates that hybrid human/automated solutions will accumulate AUM of nearly $3.7 trillion by 2020, and $16.3 trillion (slightly more than 10% of all investable wealth) by 2025. They estimate that pure robo-advisors will have a market share of only 1.6% of total investable wealth by 2025.

New US insurtech Fabric targets parents (Business Insider), Rated: A

The number of insurtechs in the life insurance space has been in two minutes online; and Fabric Premium, a more comprehensive 20-year term policy. As of Tuesday, Fabric is live in 32 US states, with license applications in the remainder pending approval. Fabric recently raised a $2.5 million Seed round led by VC firm

Evolve Capital Partners Advises on Acquisition of LeaseDimensions (Yahoo! Finance), Rated: A

Evolve Capital Partners Inc., a specialized investment bank, today announced its client, LeaseDimensions, has been successfully acquired by GenPact (NYSE: G), a global professional services firm focused on delivering digital transformation for clients.

Founded in 1995, LeaseDimensions is a technology-enabled business processing management and information technology services company that specializes in providing finance process and technology domain expertise to equipment, vehicle finance and renewable energy companies. By acquiring LeaseDimensions, GenPact will unlock synergies across its core equipment financing businesses, offering enhanced growth and scalability opportunities while effectively providing onshore servicing capabilities.

Financial Stress Suggests Consumers are Making Impulsive Decisions in the Home Buying Process (Yahoo! Finance), Rated: A

Owners.com, an innovative online brokerage, recently commissioned a survey of more than 1,200 consumers considering a home purchase this year. The theme of this year’s spring real estate season? Stress. In fact, according to the study, 72 percent of potential home buyers stated that they expect stress in the home buying process, with many citing financial aspects as the most concerning. Additional key findings are included below.

When asked about concerns and issues when buying a home, leading financial aspects included:

  • Fear of losing earnest money deposit (64 percent)
  • Becoming “house poor” (61 percent)
  • Bidding wars driving up the price (59 percent)

Despite these financial stressors, when potential home buyers were questioned about their willingness to go over budget in a competitive bid to get into a dream home:

  • More than half (55 percent) said they were willing to go beyond their budget
  • For those willing to stretch their dollars, on average, consumers stated they were willing to go $37,809 over budget

Given these monetary pressures, savvy consumers are considering real estate models that offer opportunities to cut costs in the transaction. When asked about their propensity to handle the home buying or selling process themselves if they would be charged a lower commission, 85 percent said they were likely to consider this opportunity if it meant they had access to some of the more complicated transaction services like the appraisal or legal documents. Nearly one-quarter (23 percent) indicated that they would be motivated to work with a real estate agent or broker who would reward them financially for the work they do on their own. These consumers should look for opportunities to work with a brokerage that offers a buyer rebate or sellers an opportunity to save on traditionally high agent commissions.

Detroit Fintech Startup Autobooks Closes $ 5.5M Series A Round (Xconomy), Rated: A

Autobooks, the Detroit-based startup spun out of Billhighway in 2015, has closed on a $5.5 million Series A funding round. The investment was led by Pittsburgh-based Draper Triangle, with participation from CU Solutions Group, Baird Capital, Detroit Venture Partners, and Invest Michigan.

Autobooks, he explains, has created a set of digital tools to automatically handle a range of accounting tasks, including collecting payments owed to a business and disbursing money a business owes to others. The company licenses its software to banks and credit unions, and they in turn make the technology available to their small-business customers.

Autobooks sprang from Troy, MI-based Billhighway, a financial technology company serving large enterprise customers.

Banks are Back in the Game (Forbes), Rated: A

The introduction of online and small business lending has forced banks to rethink their strategies, but banks are now starting to play ball and shift the industry again.

In the lending industry, there’s a perception that extreme competitiveness has developed between banks and non-bank lending, but I don’t believe that’s the case. By working together, they can help small businesses – the backbone of the American Dream.

JPMorgan Chase and Bank of America took two different approaches to building out online small business lending. They were able to learn from non-bank lenders and emulate the customer experience, or partner with a non-bank lender, to improve their own offerings. Non-bank lenders like OnDeck have reinvented the customer journey. Combine that with the advantages banks have with cost of capital, customer base, underwriting credit cycles and access to data, and you have a good recipe for the future of small business lending.

But as Tufail pointed out, the migration from baby boomers to millennials will further emphasize digital channels. Tech savvy folks will want even quicker lending decisions, and that starts online.

5 ways banks are using Snapchat (Tearsheet), Rated: A

American banks have also amped up their Snapchat recruiting efforts. Not long after their launch of Snapchat Spectacles, Citibank employees began shooting videos with them to offer insights of life as a Citibank worker.

Dutch bank ABN Amro launched a Snapchat customer service capability (Snapchat “webcare”), a feature that’s yielded them 2000 followers since its launch a year ago. The bank posts stories to engage users who can ask questions using photos, videos, emojis and filters.

Through Snapchat, banks are affiliating themselves with causes close to customers’ hearts. For example, CIBC, Canada’s fifth-largest bank, launched a Snapchat pride filter to mark LGBTQ pride festivities last summer.

The Bank of Ireland pulled in celebrity influencers who use the Snapchat offer financial tips and advice to younger customers — a part of the bank’s FeelFree student reward program.

Bank of America’s Llama was used as a Snapchat lens was released last summer in conjunction with the MLB All Star Game to promote the bank’s mobile app.

Small Change Announces First Los Angeles-Based Real Estate Offering (Crowdfund Insider), Rated: B

Real estate crowdfunding platform Small Change announced on Wednesday the launch of its first Los Angeles-based offering.

Small Change describes Rosewood as a urban-minded development of four single-family units that are designed to achieve net-zero energy usage and further vitalize the area. Each of the units is designed with energy efficiency and resource conservation in mind and will also be pre-wired for solar panels with sufficient roof space to achieve net-zero energy living.

Small Change added a 10% return is projected on this investment.

Conference of State Bank Supervisors Releases Statement to Congress on OCC FinTech Charters (Buckley Sander), Rated: B

Ryan stated that the OCC’s Proposal “sets a dangerous precedent [by demonstrating that] the OCC has acted beyond the legal limits of its authority [and has] bypassed and ignored bipartisan objections from Congress, [thereby] creat[ing] new risks to consumers.” He asserted that the proposed charter would “preempt existing state consumer protections without a comparable mechanism to replace them. It also exposes taxpayers to the risk of inevitable [F]inTech failures.”

United Kingdom

Goji launches P2P lending bond (FT Adviser), Rated: AAA

Goji’s Diversified Peer-to-peer Lending Bond claims to be the UK’s first diversified peer-to-peer lending proposition with a portfolio of loans from a variety of lenders.

It is targeting returns in excess of 5 per cent over a one or three-year term.

The bond is eligible for inclusion within the Innovative Finance Isa.

HNW Lending unveils Innovative Finance ISA targeting 7% – 15% (AltFi), Rated: AAA

HNW Lending has received full approval from the Financial Conduct Authority approval to offer Innovative Finance ISAs (IFISA), with minimum investments of £5,000 per loan.

It will target returns of between 7 per cent per annum and 15 per cent per annum depending on the risk of the loans in which the investors choose to invest.

Property Crowd launches IFISA with target returns of 7-10% (AltFi), Rated: AAA

Property Crowd, the real estate crowdfunder that’s owned by global secondary market platform Global Alternatives, has launched its Innovative Finance ISA offering just days prior to the April 5th tax cut-off. The product offers investors returns of up to 10 per cent.

The minimum invest amount for the IFISA offering is £5k.

Pollen Street Capital-backed alternative lender Capitalflow has secured a new round of funding valued at £50m to finance its loans to Irish SMEs.

P2P platform Landbay is turning to crowdfunding for capital. The buy-to-let mortgage lending platform, is hosting a £1.5m equity crowdfunding round on SeedrsLandbay is already overfunded, with more than £1.7m invested so far.

Innovative Finance ISA offers sweet deal for investors – if they know it exists (The Investment Observer), Rated: A

The survey, which focused on understanding investors’ intentions for the year ahead, found priorities for savers included a fixed income (17%), the opportunity to self-select how and where their money is invested (18%) and tax efficiency (24%) were top of their list of investment priorities.

Whilst the IFISA aims to meet all of these needs, half of investors questioned said they had never heard of it. 29 percent said they do know the name but don’t know what it is and only one in 20 said they know enough about what an IFISA is to be able to explain it clearly to other people.

However, the survey also found that those that do know about IFISAs and have invested in them have invested more on averagethan in traditional Cash ISAs.  The average amount of £7,013 per person has been invested in Crowdstacker’s IFISA to date; this is compared to £5,810 in cash ISAs between 2015 and 2016.

Master Investor Show: Setting the Standard for Investment Events (Yahoo! Finance), Rated: B

The Master Investor Show brings together private investors of all portfolio sizes to hear keynote talks from celebrity investors and gain access to new investment opportunities.

Ordinary investors will get the opportunity to speak to the CEOs and founders of 100 companies from multiple investment sectors, including equity funds and retirement saving, crowdfunding, life sciences and FinTech, and alternative finance such as film funding and peer-to-peer lending.

This year’s main-stage celebrity line-up:

  • Gonçalo de Vasconcelos, CEO of SyndicateRoom, the innovative online investment platform
European Union

Alternative finance for SMEs is even more urgent (Irish Examiner), Rated: AAA

While recent Central Bank figures found that perception by Irish SMEs of the willingness of banks to provide them with credit have improved considerably in the past three years, other surveys show access to finance is still a high concern for about one-third of Irish small businesses.

This is why SMEs are looking beyond their banks for alternative sources of funding.

Among these options is peer-to-peer lending. The largest platform Linked Finance launched in 2013 and rival Grid Finance arriving the following year.

Ms Kenneally was getting frustrated with the 10-week wait for a decision on an application for a bank overdraft when a friend pointed her towards Microfinance Ireland, a government initiative to provide loans to small businesses. She received a loan of €25,000 and was impressed with the fast turnaround.

Another source is crowdfunding. The idea behind crowdfunding is to pair donors with small businesses, charities or arts events who want to raise funds for a project or campaign. Platforms include Fundit, iDonate, and Seedups.

Warburg Pincus buys stake in Swiss fintech group Avaloq (Financial Times), Rated: A

Warburg Pincus has agreed to pay close to SFr300m for a minority stake in Avaloq, Switzerland’s largest software provider to banks.

The acquisition of a 35 per cent stake by the private equity group values the company, which already serves key financial centres, in excess of SFr1bn ($1bn), the private equity group said.

Avaloq has more than 2,000 employees and serves 155 banks and wealth managers in financial centres, including London, Frankfurt and Paris. It generated revenues of SFr533m in 2016, which represented a 10 per cent increase from a year earlier.

The private equity group has recruited several leading banking figures to sit on the Swiss company’s advisory board. Among them are Javier Marín, the former chief executive of Santander, Stefan Krause, former chief financial officer at Deutsche Bank and Jacques Aigrain, former chief executive officer at Swiss Re.

Here’s why fintech will make banks stronger (City A.M.), Rated: A

Brian McCabe, who chairs the fintech working group at the Fintech and Payments Association of Ireland, says existing banks and financial players won’t get weaker at the expense of new entrants.

Collaboration will be a feature of fintech’s next phase as traditional banks, financial institutions and insurance companies in Europe seem to recognise the importance of becoming smarter, more efficient and customer-focused.

Now is the chance for banks to take what fintech pioneers have to offer, and use it to make themselves more competitive.

Australia

Commonwealth Bank of Australia and Austrade sign fintech collaboration agreement (Finextra), Rated: A

The Commonwealth Bank of Australia (CBA) and Austrade have signed a new collaboration agreement to support the flow of fintech innovation between Australia and the UK.

The agreement will be used to target and attract fintech investment to Australia, and assist Australian fintech companies to access the UK market.

Canada

Investing in the Fintech Revolution: How Glance Technologies is innovating mobile payments (OTC Markets), Rated: A

Now, the creator of PayByPhone parking app has set his eyes on the restaurant industry, creating the Glance Pay Mobile Payment App under Glance Technologies Inc. (CSE:GET) (OTCQB:GLNNF) to revolutionize a C$650 Billion restaurant bill payment industry. Glance Pay allows diners to pay their restaurant bill in seconds using their mobile phone while automatically receiving exclusive restaurant rewards. Gone are the days of waiting for the server to bring around the card machine. Restaurant owners benefit from automatic bill collection, built-in loyalty programs, turn-key in-app marketing and valuable customer experience feedback.

China

Jail sentences for P2P lending scam (Shangai Daily), Rated: AAA

FORTY-ONE people in the city’s first and high-profile P2P fraud case involving nearly 700 million yuan (US$10.2 million) have been jailed, according to Yangpu District prosecutors.

The 41 were staff members from five outlets of Baiyin Wealth Co, including one in downtown Xintiandi area. Sentences ranged from six to eight months in prison, with some granted a reprieve.

Other suspects are either being investigated or are waiting to be tried.

India

Peer to Peer Lending Advantages and Disadvantages [Case Study] (Scalar), Rated: A

Peer to Peer lending advantages and disadvantages – lenders perspective

Advantages

  1. Higher interest

For example, a 5 year bond with a fixed rate interest of an Indian bank offers 3% AER, while the same amount has the potential to earn 6.32% to 30% p.a. through a peer to peer website, on the same tenure.

  1. Diversification
  2. Freedom to commit

Disadvantages

  1. Waiting period
  2. No legal laws
Asia

How transparency is driving Asian asset managers to technology (The Asset), Rated: A

The need for improved transparency is pushing Asian asset managers to use more sophisticated technology than they’ve ever used before in the management of their portfolios and to boost the overall efficiency of their businesses.

Another trend among Asian asset managers is using technology as a way to drive transparency between what their internal stakeholders and investment teams are actually reading and what is driving their investment decision.

Asset managers are also using this technology to look at broker performance which involves having all their data, primarily data on trading positions and transactions, on one buyside platform.

Latin America

Latin American Venture Capital Firms Invest in MPOWER Financing (NBC12), Rated: AAA

VARIV Capital, a Latin American venture capital firm, and Chilango Ventures, an investment firm with offices in San Francisco and Mexico City, have invested in MPOWER Financing () to help the innovative fintech firm expand its presence in Latin America and attract a greater number of high-potential students to America’s best colleges and universities.

Latin American students already represent 25 percent of MPOWER’s outstanding loan portfolio, with Mexico representing the third-largest student population currently studying in the U.S. through MPOWER’s financial support.

With the addition of these two new equity investors, MPOWER Financing has assembled a diverse global investor base that is enabling the firm to fulfill its mission to provide educational loan support to high-potential, international students who do not fit within traditional credit assessment models. Currently, MPOWER Financing, founded in 2014, has a pipeline of more than $120 million in loan applications from students in Asia, Europe, Latin America and Africa which it expects to fill in 2017. The recent investments are part of the closing of MPOWER Financing’s Series A funding.

Authors:

George Popescu
Allen Taylor

Helping Home Buyers Make Down Payments for a Dream Home

unison home ownership

One of life’s biggest dreams is owning a home, but lack of funds, especially for down payment, proves to be a major stumbling block for some would-be home owners. A recent report by the US Census Bureau shows the home ownership rate decreased to 63.7% in 2016, the lowest yearly average in 50 years. Millennial […]

unison home ownership

One of life’s biggest dreams is owning a home, but lack of funds, especially for down payment, proves to be a major stumbling block for some would-be home owners. A recent report by the US Census Bureau shows the home ownership rate decreased to 63.7% in 2016, the lowest yearly average in 50 years.

Millennial lack of savings is well documented, creating a catch-22 for prospective homeowners. Home buyers want to put a substantial portion of the sales price down to ensure monthly mortgage payments are sustainable, but on the flip side, they don’t want their entire net worth sitting in one illiquid asset. Unison not only understands the pain point of the consumer, but has created a new category of home ownership by investing in homes through Unison’s HomeOwner and HomeBuyer products.

An Upstart Trades Cash for Home Equity

Unison (earlier FirstREX), founded in 2005, is headquarters in San Francisco, California with a team of 70 employees and regional sales managers. The company launched its homeownership investment product in 2007, through which it has so far managed to invest more than $300 million. The initial capital invested was raised from pension funds and endowments.

Founder Thomas Sponholtz, Unison CEO and chairman of Unison, was co-head of the fixed income group at Barclays Global Investors prior to Unison. At Barclays, he was instrumental in the development of the first fixed income ishares (ETF). A year later, James Riccitelli, joined Thomas as Co-CEO and they launched the initial product at Unison. Riccitelli started his career with Nomura Securities in New York, a leading securities and investor banking company. He later headed the Nomura venture fund that focused on Fintech start-ups.

Residential real estate in the US is the largest asset class with a 2016 total value of $23.9 trillion, out of which $13.7 trillion is made up of household equity and the rest comprised of debt and mortgages. The mortgage side is becoming a commodity but there is a massive dearth of products targeting homeowner equity. The underlying idea behind Unison was to target the residential real estate market on a massive scale by concentrating a financial product that allows homeowners a way to fund their home purchase or to earn equity through a home ownership investment.

Unison is not a lender. Rather, it is licensed along similar lines as a real estate broker and provides a feasible platform to purchase real estate. In the last 10 years, Unison has revolutionized home ownership investing. Its flagship products include a product for home buyers and a product for home owners.

Product for Home Buyers

The Unison HomeBuyer program paves the way for people who wish to buy their home by providing half of the down payment required. On top of that, the contribution is not considered a loan. Rather, it is an investment that can be held for up to 30 years and gives Unison 35% of the upside or downside of the home equity. It is a true partnership where both the company and home owner win or lose together in a varied ratio.

This product is apt for the new-age American who doesn’t like to save but is capable enough to afford the EMI of home ownership. By sharing the down payment 50-50 in home purchase with the buyer, Unison lessens the burden of Loan to Value (LTV) for the home buyer. This mitigates the requirement for mortgage insurance on the homeowner’s part, thereby lowering monthly installments by 15%-20%.

Product for Home Owners

Unison HomeOwner program provides a special platform for existing homeowners to tap into their home equity without adding to their debt or payments on a home equity loan (HELOC). Unison provides a lump sum amount in cash, in some cases up to 20% of the home value, to empower homeowners to have access to their equity. The samount received can be used up for to 30 years as a cash cushion for financial stability, to pay off debt, for remodeling of a home, and for investing in a child´s education. In exchange, Unison participates in sharing the downside risk and upside potential in the change in the home’s value whenever the owner decides to sell.

Unison takes a second lien position on the property and usually does not require approval from the first lien holder. To ensure all parties are on the same page, the company works only with lenders that have pre-approved Unison. This relationship is of great value to the lenders as it enables lenders to offer different products and to tap a larger category of prospective buyers who lack cash for the entire down payment. Unison has already worked with eight well-known lenders such as Guild and Freddie Mac, and enables the customers to pre-qualify for a regular mortgage while offering a homeownership investment.

Unison does not get any tax benefit or write offs from property taxes, and mortgage interest still goes to homeowners. It also helps the homeowner reduce his capital tax burden when the house is sold as the investment returns are shared between Unison and the homebuyer.

Unison for Retirees

Unison is also a godsend for retirees. It provides an opportunity for buyers who are looking to downsize by putting a share in the down payment for the new home and enabling the retiree to have much more cash to meet their medical and other expenses. Unison specializes in helping people survive on retirement income while maintaining equity in their homes by giving them an option to sell their home equity for cash that can be used up to 30 years without payment of any EMI.

Unison operates in 13 states and plans to expand to many more. The company is the category leader, and its unique proposition and ability to hold pure equity for such long terms creates a valuable moat for the business.

Author:

Written by Heena Dhir.