Though the 2008-09 crisis scarred a lot of real estate investors, the fact is that the US real estate sector has been on a secular growth spree in this decade. The sector plays an integral role in the US economy and contributed $1.15 trillion to the country’s economic output in 2018, which is 6.2% of the nation’s […]
Though the 2008-09 crisis scarred a lot of real estate investors, the fact is that the US real estate sector has been on a secular growth spree in this decade. The sector plays an integral role in the US economy and contributed $1.15 trillion to the country’s economic output in 2018, which is 6.2% of the nation’s GDP. As a matter of fact, till Q3 2018, individuals owned US$25.6 trillion in real estate, and total mortgages amounted to US$10.3 trillion, which implies that home equity stood at US$15.2 trillion until Q3 2018. That’s a record in itself. Approximately 14.7 million homes have 50% or more of their total equity in their houses.
This represents a massive untapped financial asset for American homeowners. But wary of piling on more debt and with selling the house not an option, homeowners need a new solution to monetize their homes. QuantmRE has brought to market a win-win framework with its shared equity contract agreements. In conversation with Matthew Sullivan, founder/CEO of the company, Lending Times gets a front seat view on how the blockchain-powered solution will help millions of homeowners generate additional liquidity without taking on debt.
The QuantmRE Solution
The fundamental concept behind the company’s platform is “the home owner has equity and wants cash, whereas, the investor has money and wants equity.” QuantmRE’s solutions enable an individual to realize the value of their home’s equity without incurring any further debt. QuantmRE’s funds will purchase a fraction of the owner’s home equity and then tokenize it, building a marketplace for both owners and investors, with new financial opportunities. How?
The explanation lies ahead.
Structure of the Contracts
The QuantmRE contracts are flexible to cater to the needs of different stakeholders and are built to suit varied interests of the homeowners – with some contracts having a 10-year commitment attached to them and some contracts committing for 20-30 years. Along with this, the equity ownership framework will rely on risk profiles of the different contracts.
To illustrate, when the owner wants to part with 10% of the current value of their home, they are selling the future rights to its appreciation. When the owner sells the house in the future, they will provide the investor with a 15%-18% of the value of house. Thus, the company is buying 15%-18% of the future value of the owner’s house at 10% of the present value. This 10% is the shared equity. The company will cap the return in the initial years and the ROI will also be capped at 18%-20% per year.
These are strictly real estate contracts and not loans; here the homeowners simply agree to share the present or future appreciation or depreciation of the value of their real estate. The investor is investing in a real estate option and not investing in any debt.
Under the scenario where the house owner does not sell the house, the contract shall either be refinanced under the same terms as before or shall be renewed on new agreeable terms on all sides.
What are the returns for the investors?
Investor in the funds: The fund will buy the equity instruments from individual homeowners, and the investors will benefit from the overall diversification of the fund. The returns are usually asymmetric and are geared for strong positive alpha and downside protection (due to the structure where it pays for 10% on Day One but receives 15%-18% of future value). Even in the scenario where the house prices remain flat or fall marginally, the funds shall still deliver positive returns. But there is still risk involved, as the downside buffer is limited to an extent.
The company is developing a cryptocurrency token with real intrinsic value: EQRE. These tokens shall be backed by audited pooled real estate assets; the tokens derive their value from the equity interests in the single-family owner-occupied homes. These tokens will be launched in the near future.
It provides a platform to the owners and investors to tap the previously illiquid real estate asset class in a stock market environment enabling the fractional interests in the real estate investments to be traded on the blockchain. The tokenization of real estate will allow small mom and pop investors to diversify their real estate holdings and provide institutional players a platform for liquidity in their real estate investments.
QuantmRE To Date
QuantmRE was founded in December 2017 and has successfully originated close to 100 transactions of over $25 million across a few states. Albeit, currently these transactions are not all QuantmRE contracts. Since its inception, the company has developed its technology, contracts, and design. and is just a few weeks away from launching its EQRE token.
As far as funding goes, the company raised close to US$2 million in 2018 in a seed round. The company plans to raise $5 million for working capital and expansion.
The company offers homeowners an opportunity to liquidate a part of their house without taking on more debt. Investors get to partake in the growth of single-family residential units. This is structured through a shared equity contract. These contracts will further back the token of the company that can be traded. The token of the company (EQRE) is being developed and shall be soon launched. QuantmRE plans to integrate the blockchain and cryptocurrency technology with the real estate sector allowing for liquid profitable real estate investments. The company has its eyes on the $15 trillion unmortgaged equity in US homes and is poised to leverage blockchain tech to make it a strong investment proposition.
News Comments Today’s main news: RateSetter passes 500M GBP in secondary market lending. U.S. economy fuels boom in consumer debt. Seedrs tops 500M GBP in crowdfund securities. Today’s main analysis: China P2P lending crackdown could see 70% firms closed. Today’s thought-provoking articles: Peter Renton’s Q3 2018 MPL results. 2018 was a standout year for fintech funding. 9 big ideas […]
Consumer debt, including credit cards, auto and student loans and personal loans, is on pace to top $4 trillion in 2019.
Consumer spending has increased 2.7% on average in the four quarters through September compared with the same period a year earlier, as disposable income rose 2.7% on average, according to Moody’s Investors Service. Meanwhile, personal savings as a percentage of disposable income was 6.3% in the third quarter, above a 20-year average of 5.9%, according to Bureau of Economic Analysis data.
My trailing 12 month returns for the year ended September 30, 2018 across all my accounts was 4.77% up from 4.46% in my last update. My original six accounts, all with Lending Club and Prosper, also improved over last quarter but are still at a paltry 3.19%.
Robo advisor Betterment currently manages $15 billion in assets for its more than 400,000 customers, firm CEO Jon Stein tells FA-IQ. But at the start of 2016, Betterment’s AUM was just a little over $6 billion, Stein says. The firm has cemented its place on the 2018 Financial Times’ 300 Top RIAs list.
Q: How has Betterment’s client base evolved?
A: When Betterment was first launched, our customer base was mainly young folks in their twenties who were depositing $100-$500 to invest at a time. That client demographic has shifted dramatically over the years. Today, more than one-third of our business comes from customers who are at least 50 years old.
2018 was a volatile year for equity and credit markets, particularly in the fourth quarter. The S&P500 is down ~7.5% for the year, and cyclical stocks are down more. CDX IG spreads have widened ~40 bps and CDX HY spreads have widened ~150bps.
ABS markets enjoyed record issuance. However, spreads widened, and all-in yields were higher leading to rate increases for borrowers and tighter margins for lenders. 2019 is shaping up to be a pivotal year in this late economic cycle. Synchronized global growth could turn into a synchronized slowdown. The risk of policy error is heightened as the Fed navigates record low unemployment and a slowdown in growth. The US yield curve has partially inverted and the all-important 3-month – 10-year yield spread is at ~37 bps.
Our next guest on the Lend Academy Podcast is Kevin Tweddle. His official title is the Group EVP for Innovation and Financial Technology at the Independent Community Bankers of America (ICBA), the leading trade organization representing community banks. He is completely focused on fintech and helping community banks use technology to thrive in the future.
Financial technology (Fintech) and the internet have enabled the creation of online loan marketplaces. Marketplace lending is made possible by technology platforms that use scoring algorithms to determine the borrowers’ ability to repay.
Fintech online loan platforms have started creating partnerships with banks and credit unions to reach small businesses who aren’t as comfortable dealing entirely online. Traditional lenders are eager to jump on the Fintech bandwagon to avoid being made obsolete.
A report in the Wall Street Journal, citing analysts, reported that legislative response to the massive Equifax data breach of 2017 is at the top of the agenda for 2019. The Wall Street Journal noted that existing proposals, some bipartisan, provide a glimpse into how changes can be made to the industry. The paper noted the changes would pertain to how the firms handle consumer information and could include tougher cybersecurity standards and making it easier for consumers to fix mistakes on their credit reports.
White Oak Healthcare Finance, LLC (“White Oak”), today announced it acted as sole lender and administrative agent on the funding of a $161 million senior credit facility for Allegiant Healthcare (“Allegiant”) and Hillstone Healthcare, Inc. (“Hillstone”). The funds were used to acquire and provide working capital for a portfolio of 17 skilled nursing facilities in Ohio.
The one upside to all this is that, although cryptocurrencies may have entered a death spiral, the blockchain economy is here to stay. As well as allowing safe peer-to-peer lending and transactions, it is being used to build more efficient supply chains and in the evolution of the internet of things – to name just a few of its applications.
RATESETTER has passed £500m in lending on its secondary market, marking a major liquidity milestone for the platform.
At the end of December 2018, the peer-to-peer platform revealed that a cumulative total of £500m in liquidity had been provided to investors via its secondary market. According to the platform, in the majority of cases investors were able to access these funds within one working day.
In a blog post, UK crowdfunding platform Seedrs shared that it has now topped £500 million in investment crowdfunding. The money has been raised for 720 deals that have been successfully funded since the platform launched.
iwoca,the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and will enable more than 60 percent of the lender’s customers to take advantage of the Open Banking service.
The number of Chinese peer-to-peer lenders may drop by 70 percent this year, a research firm that tracks the industry says, as the nation intensifies a crackdown on riskier forms of financing.
As few as 300 companies will remain by the end of the year, according to an estimate from Shanghai-based Yingcan Group. The number of operators dropped by more than 50 percent to 1,021 during 2018, it said, adding that there’s been no new entrants into the market since August.
According to Yingcan Group, by the end of 2019, there will only be 300 P2P lenders remaining. During 2018, the market research firm said the number of P2P lenders declined by 50 percent to 1,021. What’s more, no new companies have entered the market since August.
Yidai, an online peer-to-peer (P2P) lending intermediary, is the latest to exit the business as China reins in its US$176 billion experiment with this riskier form of financing.
The company set up a committee to start refunding its lenders after “months” of losses, Yidai said in statements over the extended holiday weekend. It has about 32,000 lenders with an outstanding principal balance of four billion yuan (S$795.4 million), and expects to repay them in three-to-five years.
In the first half of 2018 alone, fintechs secured $57.9 billion, nearing the previous annual record of $62.5 billion set in 2015.
Fintechs including UK neobank Revolut, US insurtech Root, US fintech for gig economy workersEarnin, Hong Kong-based alt lender Oriente, and US crypto exchange operator Coinbase all raised funding rounds of over $100 million this year.
JPMorgan Chase collected more than $1.8 billion in revenue from overdraft fees in 2017, according to an analysis of regulatory data by the Center for Responsible Lending. Bank of America and Wells Fargo both raked in more than $1.6 billion. Big banks typically charge around $35 per overdraft. Many other institutions also rely on such fees.
Give customers some control of their financial data
For decades, banks, credit card networks and credit bureaus have been sharing and selling consumers’ financial data without their knowledge or consent while data aggregators have screen-scraped that information without the full cooperation of financial services providers.
10. New Asset Class – New Asset Backed Lending for Crypto
The likes of Nexo, SALT, CoinLoans & Unchained Capital have emerged in the recent months unlocking the value of your cryptocurrency. There is a list of crypto lending sites here.
8. Banks will rule again
We have seen big banks leveraging Fintech platforms from OnDeck and Avant in 2018. More of it will come in 2019 as banks begins to decentralize banking again.
7. Everyone will be rich (unlocking home equity value)
I attend a talk by Mike Cagney of Figure at 2018’s Lendit China conference. He’s creating something completely different to unlock the potential of the entire “supply chain” process from home equity lines of credit to bundling and tracking this asset class utilizing smart contracts and blockchain. He wants to eliminate the hurdles and ambiguity for the secondary market.
As home equity value rises and interest rates increase, home equity products will need a ton of tech. It has become a forgotten art since the great depression. I am predicting that a lot more of Fintech companies will come to light in 2019 working with the banks to unlock consumers’ home equity value
Amrish Rau is the CEO of PayU India, the country’s leading digital payment solution provider valued at around USD 2.5 billion. Previously, he had founded Citrus Pay, which was acquired by Naspers (PayU) in one of the largest startup acquisitions in India. PayU’s digital lending platform Lazypay has done extremely well with nearly 4.5 lakh customers already using it. He has also invested in multiple startups like Signzy, Elemential, Nuo and Open.
Harshil Mathur : CEO & Co-Founder at Razorpay
Harshil runs one of India’s most innovative Fintechs, Razorpay, which is morphing from a B2B Payment Gateway into a Financial Conglomerate. They have entered the lending business with Razorpay Capital, which has already reached an annual loan disbursal rate of USD 30 million.
Manish Khera : CEO at Happy
Manish is the founder of Happy Loans – one of the fastest growing MSME lending platform in the country.
Naveen Kukreja : Co-Founder & CEO at Paisabazaar.com; CMO at Policybazaar
Naveen is the co-founder and CEO of Paisabazaar.com. Under Naveen’s leadership, Paisabazaar.com has become one of the largest marketplace platforms for lending and banking products. Paisabazaar.com currently disburses annualized loans worth USD 1 billion to more than 1000 towns and cities across India.
The latest entrants into the digital lending sector, peer-to-peer lending platforms, are facing an uphill task attracting investors with regulatory restrictions limiting their growth potential.
OMLP2P is a Mumbai-based lending platform and disburses around Rs 20 lakh per month. Another Mumbai-based P2P lending startup Paisadukaan’s founder Rajiv Ranjan also said that VCs have been shying away from this sector because of the limitation imposed by the RBI.
News Comments Today’s main news: SoFi Money has launched. Lendio Employee Contribution Program funds 2,800 loans through Kiva. Goldman funds Yirendai. Nubank opens 1.5M digital accounts. Today’s main analysis: UK banks are closing branches faster. Today’s thought-provoking articles: How Goldman Sachs is transitioning into a consumer-facing bank. Europe’s IPO market is heating up. SoftBank yanks startups from Renren. The rise of […]
At first glance, SoFi’s banking app, which launches in beta today, is no different from the existing options on the market. It comes with a debit card, enables peer-to-peer payments, and accepts mobile check deposits. The interface, like that of many banking apps, is dominated by a blue-and-white color scheme. But in the details, there is a hint of SoFi’s bigger ambitions. SoFi Money, as the product is known, sets the stage for the fintech company to become both a financial hub and lucrative recommendation engine for its 500,000-plus members.
The Wall Street investment bank is trying to transform itself into a broader financial-services company like bigger rivals Bank of America Corp. and JPMorgan Chase & Co. So a couple years ago, Goldman expanded beyond its traditional clientele — elite corporations, big investors and the super-rich — to provide retail banking through a new website called Marcus. The company now offers both personal loans and savings accounts, with a minimum deposit of just $1. So, ordinary people can apply.
But here’s why you should take a look now: Since New York-based Goldman is trying to build up the business rapidly, it’s offering some of the highest rates on savings deposits in the U.S. – currently 1.7%. That compares with near-zero rates at the biggest retail banks, including Bank of America, JPMorgan Chase, Citigroup Inc. and Wells Fargo & Co.
Lendio announced today that Lendio Gives, its employee contribution and employer matching program, has provided more than $70,000 in microloans to 2,800 underserved entrepreneurs in 78 countries through Kiva. In May, Lendio ranked 6th among Kiva’s Internal Business Groups for total fundings, with over 300 new loans funded.
Also, find out how much you can actually afford to borrow by calculating your Debt Service Coverage Ratio (DSCR). To figure out your DSCR, you simply divide your net operating income by your total debt service. With some lenders, you can get away with a 1.0 ratio; however, most lenders prefer a DSCR that shows your annual net operating income is higher than your total debt, such as a DSCR of 1.35 and above.
Finastra has acquired Malauzai, a provider of mobile and Internet banking solutions for community financial institutions. The deal reflects Finastra’s commitment to the US retail and business banking sectors by further enabling digital transformation for community banks and credit unions across the country.
The acquisition is built on an already successful and proven partnership between Finastra and Malauzai, which saw the latter’s digital solution integrated into Finastra’s Fusion Phoenix core banking system.
LendingClub Corp. asked a California federal judge Monday to toss a Federal Trade Commission suit claiming the online lender falsely promises consumers their loans come with “no hidden fees,” arguing that its origination fee is noted on its website in at least three places.
The San Francisco-based company asserts in its motion to dismiss that an origination fee, deducted when loan funds are initially disbursed, is not hidden, and the FTC knows it.
The $8.5 trillion U.S. financial services industry is going through a dramatic transformation, with incumbents fending off upstart fintech companies that promise to disrupt their old ways of doing business.
#1 Paypal (NASDAQ: PYPL)- PayPal processed approximately $49 billion in mobile payment volume in the first quarter, which is up 52 percent from a year earlier. Mobile payments actually account for 37 percent of Paypal’s entire payment volume.
#2 QPAGOS (QPAG)-QPAGOS (QPAG) is upending this dynamic industry, with what some like to call small “super-banks” deposited on street corners, in supermarkets, or an endless number of other convenient locations.
#4 Alibaba (NYSE: BABA)-Alibaba is quickly becoming one of the world’s hottest companies thanks to its innovative approach to technology.
Some of the world’s most successful companies have been formed by founders quitting university to nurture their start-ups, not least the Harvard dropouts Bill Gates, of Microsoft, and Mark Zuckerberg, of Facebook.
But a small yet significant number of students on masters in finance degrees do the opposite, enrolling to improve their core finance knowledge.
Maximilian Voigt applied for a place on the masters degree in financial economics at Saïd Business School at Oxford university shortly after co-founding Gründermaschine, an incubator for early stage fintech ventures in Frankfurt.
Brex, a San Francisco company that offers a corporate credit card for startups, has launched its first product and raised $50 million in new investment, bringing its total funding to $57 million. PayPal founders Max Levchin and Peter Thiel contributed to the Series B financing round, in addition to fintech venture capital firm Ribbit Capital, early Facebook investor Yuri Milner and former Visa CEO Carl Pascarella.
The startup has a new model for determining whether companies are creditworthy. Instead of focusing on founders’ personal credit history or a company’s expected profits, it looks at the amount of money a startup has in its bank account, and it sets a credit limit that’s typically 10% of that total.
Home improvement tops the list of uses for home equity loans. The most common use was home improvement, at 43 percent of home equity loan requests.
Real estate investors borrow the most. Borrowers who were looking to invest in another property had the highest property values and requested loan amounts. For property investments, borrowers requested an average of $103,625.
For non-property investments, which likely include small businesses, borrowers requested $80,241.
Just over 1 percent of requests were to fund retirement. Not surprisingly, this cohort had the highest average age of 63 — 12 years above the next highest average age.
A small share accessed their home equity for emergency expenses. This group had the lowest loan amount requested of $35,747 and kept their LTV low at 51 percent.
Debt consolidators push the limits on LTV. Borrowers looking to consolidate debt had the highest LTV of 74 percent.
Klarna Launches First U.S. Out-of-Home Marketing Campaign (Klarna Email) Rated: B
Klarna is mounting its first out-of-home marketing campaign in the U.S. in three-cities. Elements of the campaign will appear in San Francisco, New York City and Columbus, Ohio, beginning the week of June 18.
MoneyLion Inc., the financial operating system revolutionizing the way Americans save, invest, borrow, and build their credit, announced today that Jon Stevenson has joined the company as the new Head of Wealth Management and Banking.
In this role, Stevenson is responsible for developing simplified, accessible solutions that address the financial challenges faced by millions of Americans every day. He will help MoneyLion Plus members create investment plans that align with their unique circumstances and goals – services traditionally reserved for high-net-worth individuals through their Financial Advisor.
Here are some key statistics about branch closures:
Branch closures are accelerating. In 2016, 630 bank branches and building societies closed. This number increased nearly 40% to 879 in 2017. Meanwhile, 670 branches have already been closed or are due to close by the end of June, suggesting that this number will probably far higher this year.
Most branches have closed in Scotland. Not all regions in the UK have seen the same level of closures, and Scotland is currently leading the way with 368 closed branches, followed by the Southeast and Southwest, with 361 and 327, respectively. Northern Ireland, on the other hand, has only seen 44 branches close, so far. The trend toward closing branches probably depends in part on demand from customers, so branches in rural areas or with an older demographic may be more likely to stay open.
This means that more Starling customers will now be able to use their smartphone and wearable devices as a fast and secure way to pay almost anywhere that contactless payments are accepted and without ever having to get their card from their wallet.
Plus new customers on Android will be able to add their sparkling new Starling debit card to their Google Pay wallet straight from our app meaning that, like our iOS customers, you can start spending within minutes of opening your account!
Less than a year after securing nearly £925,000 through its first equity crowdfunding campaign on Seedrs, Plum, an artificial intelligence (AI) chatbot for personal finance, has returned to the funding portal, seeking an additional £850,000 in funding.
Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”) announced today that Goldman Sachs, a leading global investment banking firm, has provided the Company with RMB 324 million of funding for a term of 3 years.
Installment payments are helping to power China’s domestic consumption and sales of online lender LexinFintech Holdings Ltd’s installment finance platform Fenqile surged 220 percent during an e-commerce shopping festival.
Fenqile, translated as “Instalment Pleasure” in Chinese, lets consumers buy electronic equipment like mobile phones and consumer accessories such as handbags on credit and repay the loan in installments.
Sales of Shenzhen-based LexinFintech’s Fenqile surged 220 percent during the annual 618 e-commerce shopping festival on Monday, a major mid-year shopping event initiated by e-commerce giant JD.com.
So far this year, 27 IPOs totaling $32.5 billion have been launched in Europe, eclipsing the 57 listings worth $8.28 billion last year, according to dealroom.co, an Amsterdam firm that tracks fast-growing companies. The big difference this year is not the number of listings, which has been fairly steady in recent years, but the size of the valuations of the companies. “There is a clear emergence of unicorns after a few years of increasing investment in the venture capital sector,” said Gilles Babinet, a French serial entrepreneur.
Swedish digital payments firm Izettle should have been the next head-turner for investors, but PayPal swooped in with an offer of $2.2 billion — twice the IPO value.
Fast Invest is a European P2P lending investment facilitator platform specialising in low-risk, medium-high return investment opportunities. With one successful ICO crowdsale behind and one currently ongoing, the company is now embarking on a blockchain enabled global expansion. Fast Invest is headquartered in London, with offices in Milan and Warsaw, and already employs a team of about 50 people.
We recently had the opportunity to talk with the founder and CEO, Simona Vaitkune, about the Fast Invest story so far and projects ahead.
SoftBank continues to make waves by underwriting the valuations of a growing number of turbocharged “unicorns” carrying private values north of $10 billion. It recently bought 15% of Uber at a $48 billion valuation. In partnership with GM, it paid $2.25 billion for a 19.6% stake in Cruise Automation. Masayoshi Son’s conglomerate is also
On the other side is 31-year-old Arpit Sabharwal, a Mumbai-based businessman, and lender on P2P platform Faircent. Arpit’s portfolio stands at ₹4 lakh and returns have been around 17 to 19 per cent. He is now re-allocating some of his mutual fund portfolio to the peer-to-peer lending platform.
But these platforms are not really risk-free. According to officials, the average default rate is in the range of 5-6 per cent.
According to industry insiders, there has been a near 15-20 per cent growth in loan applications and disbursements (across these platforms) on a month-on-month basis in the last one year.
While bigger players such as Faircent are said to be disbursing close to ₹2 crore a month, others like i2i Funding.com have been disbursing close to ₹60 lakh to ₹1 crore on a monthly basis.
Mumbai-headquartered IndiaMoneyMart has launched a Helpline for Loan applicants who are stressed and stuck in payday loan debt trap. Borrowers are welcome to reach out on +91-9082646766 between 11am to 4pm from Monday to Friday.
Brazil-based challenger Nubank has got 1.5 million customers signed up for its digital savings account (“NuConta”) over the last six months.
As reported in October, Nubank started to offer these accounts in addition to its credit card business. The move was designed to provide access to billpay, account-to-account transfers, and the ability to earn more in interest than is available with a regular savings account.
According to the bank, it has transacted around BRL 4 billion ($1 million) in its digital account so far, with over four million credit card customers on its books.
News Comments Yesterday, Lending-Times incorrectly stated that Zopa would charge all borrowers the same rates with its planned bank. In actuality, the plan is to price the book the same between new and existing customers, and not make a difference between new and existing customers as other banks do. Today’s main news: MarketInvoice, Funding Circle, […]
Yesterday, Lending-Times incorrectly stated that Zopa would charge all borrowers the same rates with its planned bank. In actuality, the plan is to price the book the same between new and existing customers, and not make a difference between new and existing customers as other banks do.
Elevate Credit enters 16th state. GP:”A small step. I am surprised that it is not in more states than this. I guess there is clear path to revenu growth. “AT: “Congratulations. Elevate is making fast strides to becoming a major powerhouse in alternative lending.”
9 steps to a successful Reg A+ IPO. AT: “A great read with practical tips. The focus here is on marketing and networking, which, of course, are imperative to spreading the word about your offering.”
College Ave closes first securitization. GP:”A milestone worth celebrating: College Ave now has access to cheap capital which will help it grow its lending capital sources and become more profitable. Now the issue will still be cost of customer acquisition and volume.”
Plaid puts out call for startups in nine underserved sectors. GP:”Great list. All entrepreneurs should read it. “AT: “There are some huge opportunities here. A robo for tax preparation? I’d pay for that. We’ve seen mobile apps that allow bank customers to manage their accounts on their phones, but to open them? A great idea. And there are still plenty of opportunities in the insurtech and regtech arenas. Kudos to Plaid for offering the encouragement.”
Easiest path to riches on the Web? ICOs. AT: “It’s also one of the riskiest. What if nobody buys your coins, or the underlying technology you’re funding with your ICO never makes it to development? Still, who can’t wink at the innovation?”
Elevate Credit, Inc., a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, announced today that its RISE product, traditionally offering installment loans, will now offer lines of credit. Kansas will be the sixteenth state where RISE’s products are available and the first state in which RISE’s line of credit is available to non-prime consumers.
RISE is a state-licensed online lender offering unsecured installment loans and lines of credit. RISE is designed to meet the needs of the millions of non-prime Americans with less than prime-credit, who do not have access to traditional sources of credit. RISE is a path toward a brighter financial future with features such as fast approval, flexible loan terms, lower rates than other non-prime lenders, rates that can go down over time, credit bureau reporting, free credit score monitoring and financial literacy courses.
When online peer to peer lending was new, consumers were the first investors to step in while accredited and institutional investors stayed on the sidelines until later – they now dominate the peer to peer lending business, which has grown to be a huge multi-billion dollar market.
1. If you have an enthusiastic following in your industry:
If you have a large enough network, this group might fund your entire capital raise. Take steps to build a working contact list of them. And make sure to establish a regular habit of emailing them so that when you later send out an email suggesting that they consider investing in your Reg A+ offering, your email will be opened and read.
2. Build a large and enthusiastic customer base.
VidAngel emailed their most active 30k customers andraised $10 mill in 5 days live to investors, setting the record for the fastest rate of onlineinvestor capital raise in Reg A+ to date.
3. Establish a direct sales relationship with your customers.
When your customers find it normal that you send them an email message, they are far more likely to respond favorably when you send them an email offering them the opportunity to become an investor and part owner of your company.
4. Add a consumer appealing product or service;
5. Build a large social media fan base;
A fan base of 100k people is a good start.
6. Combine product and investment marketing;
This combination can save marketing expense and also emphasizes the brand building and product sales synergy that can be levered in a Reg A+ offering.
7. Leverage your existing investors;
As an example, a sizable portion of the recent MYONYSE IPO and the ADOMNASDAQ IPO investments were from existing investors and their friends.
8. Prepare consumer investment rewards:
Line up your reward packages ahead of time to ensure that you have long lead time items ready and on hand in quantity when your Reg A+ goes live.
9. Assemble the proof points that you will need;
Gather and build the market size and total available market evidence you will need to make credible claims that your market is large enough to justify the attention of investors.
Financial Engines Inc. CEO Larry Raffone is seeking to give his company a second date with destiny by combining the biggest 401(k) robo-advisor and one of the larger national RIAs — and coming out of it with a true national RIA that can take on the accounts of Fortune 500 companies at the retail as well as the pension-plan level.
Raffone plans to open new Financial Engines offices in more populous areas such as Southern California, where Financial Engines is already on-site at corporations where participants use its managed account 401(k) service.
The pricing model is still TBD, but William Blair equity analyst Robert Napoli said in an April 6 report that he expects Personal Advisor to come in at 80 basis points. He notes that compares to 35 basis points for FE’s managed account 401(k) program.
LendingOne, one of the nation’s fastest growing online lenders for real estate investors, announced today it closed a Series A financing round.
Investors include Ron Suber, a prominent fintech investor and President of Prosper Marketplace, Richard Vague, co-founder and former CEO of two credit card companies, First USA and Juniper Financial, Sidney Brown, CEO of NFI Industries and former Chairman of Sun National Bank, Michael Heller, CEO of Cozen O’Conner, a national full-service law firm, along with LendingOne founder and CEO, Bill Green.
College Avenue Student Loans, an online student loan refinancing and origination company, has closed its first securitization of private student loans, according to Global Capital.
Getting into the asset-backed securities (ABS) business for the first time, College Ave’s securitization is a $160.89 million offering backed by private student loans. Barclays is the only underwriter on the company’s first ABS transaction.
Credit research and ratings company DBRS has assigned provisional ratings for the various classes of notes issued by College Ave. The Class A-1 notes worth $95,320,000 have been given an A rating, while the Class A-2 notes worth $43,470,000 have also been an A rating. The Class B notes worth $10,760,000 have been given a BBB rating, and, finally, the Class C notes worth $11,340,000 have been given a BB rating, according to DBRS.
Most executives of middle-market companies not only expect their business to experience disruption in the near future, but welcome it, according to Disruption in the Middle Market, a report released today by Capital One Commercial Bank. However, this optimistic view does not always translate into action; only a small portion of middle market companies have taken a full range of defensive measures to protect against disruption’s potentially destructive consequences.
Capital One surveyed more than 300 senior executives from companies with annual revenues ranging from $100 million to $3 billion to determine their views on disruption—a significant interruption to an existing business arising from innovative technology, a new business model, or political, economic and environmental forces.
The study revealed that attitudes toward disruption correlated to size. Smaller middle-market companies are more likely than their larger counterparts to be unprepared for disruption. The report also highlighted a series of steps, such as strengthening financial relationships, that smaller companies can take to catch up.
Disruption in the Middle Market provides a detailed picture of the views of middle-market executives about disruption and the steps they are taking to address it. Eighty-eight percent of respondents reported that their companies have already experienced disruption or expect to experience it during the next three years. However, only one-sixth of those surveyed believe they are prepared to deal with a disruptive event. Despite this lack of preparation, four-fifths of middle-market executives view disruption as an opportunity, not a threat. Many of these executives believe that disruption threatens their industry—but not their own company. Forty-three percent said that their industry is vulnerable to disruption, while just 18 percent reported that their own company is vulnerable.
Size proved the key determinant in a company’s preparedness and attitude toward disruption. Companies with revenue between $2 billion and $3 billion are much more likely to see a disruptive event as an opportunity than companies in the $100 million to $499 million range. In addition, larger companies are more likely to have insulated themselves from the effects of a disruptive event and to be pursuing a disruptive strategy of their own that could lead to a competitive advantage.
Financial Preparation Is Critical
The study revealed that a strong relationship with a stable financial institution could play a critical role in helping a middle-market company respond to disruptive forces. Sixty-eight percent of those with an ongoing banking relationship expect to need additional funding in the face of a disruption. These companies will find it easier to arrange than the 32 percent without a strong banking relationship. Here again, smaller companies are at a disadvantage. Many lack the holistic banking relationship needed to confront disruption, and instead are willing to consider alternative sources of capital like peer-to-peer lending and even crowdfunding.
Attitude toward disruption varies considerably by industry Middle market executives in some industries have adopted a much more proactive approach to disruption than those in others.
Financial services and insurance companies are archetypical disruptors. Forty-seven percent are quite or extremely prepared for disruption, and 83 percent are pursuing a disruptive strategy. The overall middle-market averages for the survey are 16 percent and 60 percent, respectively.
Energy, resources, and chemicals companies tend to be classic delayers. Eighty-three percent are slightly or not at all prepared for a disruptive event (compared to 53 percent for the full survey), and only 37 percent are pursuing a disruptive strategy (compared to 60 percent overall).
Plaid wants to make it easier for financial services companies to serve consumers and businesses, but it also sees significant holes in the fintech ecosystem. As a result, the company has issued a Y Combinator-like “request for startups” to tackle particular issues where it believes significant innovation is lacking.
Like Yodlee before it, Plaid enables startups and other tech companies to more easily connect with banks, credit card companies and other financial institutions, both to authenticate consumer accounts and access their financial data.
A new crop of technology entrepreneurs is forgoing the usual routes to raising money. The entrepreneurs are not pitching venture capitalists, selling stock in an initial public offering or using crowdfunding sites like Kickstarter.
Instead, before they even have a working product, they are creating their own digital currencies and selling so-called coins on the web, sometimes raising tens of millions of dollars in a matter of minutes.
Since the beginning of the year, 65 projects have raised $522 million in these offerings, according to Smith & Crown, a research firm focused on the new industry.
Last month, a small team of computer engineers in Lithuania raised $14 million in 45 minutes by selling a coin, known as Mysterium, that is intended to give access to an encrypted online data service that is still being built.
The next day, a group of coders in the Bay Area pulled in $35 million in under 30 seconds of online fund-raising. The coders were offering Basic Attention Tokens, which will one day work on a new kind of ad-free web browser.
Then this week, a team in Switzerland raised around $100 million for a coin that will be used on an online chat program that has not yet been released, known as Status.
Last year, the first blockbuster coin offering, the Decentralized Autonomous Organization, quickly raised more than $150 million. But the project blew up after a hacker manipulated the code and stole more than $50 million worth of digital currency.
U.S. mortgage lenders are bracing for rockier times as consumers demand for home loans slows and competition in the mortgage industry intensifies, Fannie Mae’s latest quarterly survey released on Monday showed.
The margin on the share of lenders who saw a drop in consumer demand for a loan to buy a home in the past three months over the share of lenders who saw a rise in purchase loan demand fell to about 30 percent, the lowest in two years on a year-over-year basis, Fannie Mae said.
The net percentage of lenders which anticipate lower profit margin in the next three months stood at 6 points, down from 12 points in the first quarter and from 31 points in the fourth quarter of 2016.
Moody’s has placed on review for possible upgrade the ratings of 41 private student loan ABS bonds – totalling approximately US$2.56bn worth of securities across 19 securitisations – issued by three marketplace lending platforms. At the same time, Fitch has released an exposure draft of criteria for rating US private student loan ABS that could result in multiple-category upgrades for …
Life/annuity: Private startups providing distribution of life insurance products including term life and annuities including Abaris and PolicyGenius
Auto insurance (split into distribution, usage-based insurance/telematics, and claims): Startups ranging from aggregators including CoverHound and Goji to white label auto claims apps (Snapsheet) to per-mile managing general agents like Metromile.
P2P insurance: Private peer-to-peer insurance and mutual-based startups include Lemonade, Guevara, Friendsurance, and others.
Small business insurance: Private tech companies serving as commercial insurance brokers and managing general agents to SMBs include Insureon, Embroker, and Next Insurance.
Insurance industry software/analytics/IaaS: Insurance-specific software across the value chain providers range from BI and data-warehousing startup Quantemplate to insurance fraud detection firm Shift Technology to re-insurance SaaS analytics startup Analyze Re to claims inspection startup Spex.
Mobile insurance management: Startups focusing on allowing consumers to manage and purchase insurance policies via their mobile device including Knip and GetSafe.
Product insurance: Companies insuring or tracking products — i.e. smartphones, laptops — for insurance applications.
Renters/homeowners: Startups providing distribution of renter’s insurance and homeowner’s insurance as well as lease default insurance programs.
Sharing economy: Startups working on new insurance products in coverage areas including short-term rental marketplaces and for sharing economy 1099 workers.
Health insurance: Across new carriers like Oscar as well as healthcare insurance startups targeted at individuals (Stride Health) and employers (Zenefits).
One of the most hotly contested aspects of the Fiduciary Rule is around the standard of suitability as a determinant for an investment choice made by a registered representative. Today, a registered representative must only ensure that an investment is ‘suitable’ for a client. This suitability is determined by factors including investment risk tolerance, time frame, and goals. However, there is no determination made as to whether the investment is in the client’s best interests.
To illustrate, let’s say the registered representative (RR) has a choice of offering two different mutual funds to a client. Both invest in similar stocks and have relatively similar returns (before fees), but one charges higher fees and also pays the RR’s firm based on the total dollar investments made into that particular fund. The RR only offers the client the one for which they get compensated, even though the other mutual fund option may be a better option for the client (because it charges lower fees). The reason the RR can do this is that both mutual funds are considered “suitable”: meaning as long as the recommendation meets the client’s risk profile and investment goals, then they can offer that product to their client.
In contrast, an investment adviser representative (IAR) must act as a fiduciary. In the same situation, if the IAR wanted to offer the same mutual fund that the RR did, they would need to disclose to the client that they are getting compensated for sales of that fund and that the lower cost option makes more sense for the client. So, instead of simply offering a suitable choice for the client, the IAR must: 1) disclose conflicts of interest and, 2) act in the best interest of the client rather than in their own best interest.
What The Fiduciary Rule Would Change
Staying with the scenario above, the Fiduciary Rule would require an RR to act like the IAR in when selling any products related to, or be advising on anything related to retirement.
The rule would also apply to anyone dually-registered (meaning they are registered both as an RR and an IAR). Currently, the dually-registered representative can decide what ‘hat’ they wear (RR or IAR) when suggesting investments for retirement.
LendingTree, the popular mortgage site, which debuted its own valuation model earlier this month, can tell you why: Because none of the other value estimators calculate your home equity or suggest how and when you might want to tap into it.
If you’re not quite ready to move ahead but instead prefer to track your equity, credit and mortgage situation on a regular basis, you can sign up for a more comprehensive “My LendingTree” service, for which there is no charge. It provides you with monthly updates plus periodic alerts on your home equity movement. You get an alert when there’s “an actionable opportunity” for you to tap into your equity on favorable terms, based on “real-time market data,” changes in your credit files and equity levels, according to the website. There’s no requirement that you take any action.
OppLoans, the nation’s leading socially responsible online lender serving non-prime consumers, has announced the appointment of Daniel Fell to the role of Vice President of Business Development. Fell will oversee all strategic business development and partnership objectives at the high-growth, profitable firm.
Debt works really well when you choose the right type of debt for your business. You can reduce what you pay for business debt by making a well-informed choice. For example, peer-to-peer lending may be an option if you’re unable to get a loan or finance from a traditional bank and can be cheaper too.
2. Nurturing your cashflow/credit score
If your business doesn’t have great creditworthiness, or is too new to have any credit history, then a lender will look at the credit score of someone able to guarantee the business’ debts.
3. Shopping around for the best deal
If you need finance consider all the options – the high street bank, the online lender, the peer-to-peer lender and the government-backed lender.
MARKETINVOICE, Funding Circle, Zopa and LendInvest have made CB Insights’ Fintech 250 list for 2017, which awards the companies worldwide that are leading the transformation in financial services.
The list of 250 emerging private companies from 23 countries, which was chosen out of a longlist of more than 2,000 entrants, was revealed by the research firm’s chief executive and co-founder Anand Sanwal during The Future of Fintech conference in New York on Tuesday.
The Fintech 250 companies (in alphabetical order):
The evidence from a sample of 20 fintech startups in the UK is that there are substantial profitability challenges that still need to be overcome. As of June 2017, the total equity investment in the sample companies I have looked at has been £852m. The total valuation of the sample at the last valuation round for each company was £2.6bn, but none are profitable and cumulative losses have been £211m.
Only one company in the whole sample has reported a single year of profitability, but this has since fallen back into loss.
However, the median losses are: £0.3m in year 1, £1.3m in year 2 and £2.0m in year 3. One company, Atom Bank, is already losing £22.5m in the third year of operation, substantially more than any of the others.
While the head of one of the United Kingdom’s largest P2P sites understands why small business owners are hesitant to make big decisions in Brexit’s wake, he cautions them to not miss the opportunities either.
“The door is open for business leaders to redefine Brexit so that it is seen as an opportunity, rather than a threat.”
Property investors have had to deal with a host of government and regulatory changes over the last couple of years.
These new rules have resulted in many buy-to-let lenders requiring much more significant interest rental coverage, often looking for as high as 145%.
For example, in the last LendInvest Buy-to-Let Index we found that Southampton offered an average yield of 4.08% – significantly lower than landlords can enjoy in other areas of the UK. Yet it has seen solid capital price growth at 5.47%, its excellent transport links into the capital regularly see it named as a future house price hotspot, while the presence of two large universities boosts its appeal to landlords.
Financial Technology Partners (FT Partners), the only global investment banking firm focused exclusively on FinTech, is pleased to formally announce its planned expansion into the Europe, the Middle East and Africa (EMEA) markets. This announcement is a direct response to the global demand the Firm is seeing for its highly specialized and deep domain focused advisory capabilities from EMEA clients and further highlights the Firm’s strong activity in cross-border FinTech deals globally. FT Partners’ global team of FinTech focused investment bankers will continue to serve its clients and its EMEA operations will be based out of London in the United Kingdom. The Firm is also announcing the continued expansion of its senior team with the addition of Timm Schipporeit, former FinTech investment banker at Morgan Stanley and FinTech investor at Index Ventures, who joins as Managing Director in our London office
Concerns that bad-loan levels are worse than lenders are confessing to, combined with fears the country’s fintech giants, including Alibaba Group Holdings Ltd. affiliate Ant Financial, are disrupting operations, have weighed on stocks.
For one, bad-debt figures, if you believe them in the first place, are coming down. And even if you do think nonperforming loans have been understated, what’s undeniable is that the country’s big banks have been shifting into mortgage lending, which has a lower default rate than the state-firm lending that’s long been their bread and butter. The nonperforming loan ratio of a mortgage in China is 0.37 percent, one sixth of a corporate advance, according to CIMB Securities Ltd. analyst Michael Chang.
Of course, fintech companies getting into the lending business is cause for concern. Alipay’s consumer credit site Ant Check Later will lend up to a certain amount without needing to see bank records, while e-commerce outfits like JD.com Inc. allow monthly payment installments that blur the line between bank and retailer.
However, it’s worth noting that lending is a business with thin margins, and figuring out default risk is crucial, especially considering many fintech startups cater to those people the big banks won’t touch.
According to Morgan Stanley, online loan volume in the US market is expected to reach US$120 billion in 2020, up from US$20 billion in 2015.
Among others, one important promise of FinTech is that there will be greater reliance on algorithmically-determined financial decisions in areas such as loan, insurance and stock picking. The advancement of artificial intelligence methods has been the propeller facilitating the transition in such a direction.
The overall implication here is that a machine can replace a human in processing large amounts of text in a much more efficient way. This information extraction procedure also helps us understand more about the interplay between investors and various types of information. Interestingly, we find that investors react more strongly to negative than to positive text, and that analyst report text is more useful when it places more emphasis on non-financial topics, is written more assertively and concisely, and when the perceived validity of other information signals in the same report is low.
One common feature of the above two research studies is that computer algorithms are used to extract and quantify some otherwise fuzzy concepts: analyst sentiment in the first study, and analyst information discovery and interpretation effort in the second one. The computer achieves it by aggregating a huge amount of data which is surely beyond any human’s ability to process. Even though humans can understand intuition through very limited observations, it is hard for them to transfer the intuition or knowledge to other people. The computational limitation and the qualitative nature of the human knowledge are the underlying reasons why computers will eventually outperform humans in more and more settings.
FinTech does not come as a free lunch, however. Algorithm-based decisions are not immune to anomalies and manipulations. On 6 May, 2010, the Dow Jones Industrial Average dropped 998.5 points (about 9%), mostly within minutes. This sudden market crash was later attributed to the algorithm trading systems being manipulated by a trader.
Klarna, the $2 billion+ startup out of Sweden that works with some 70,000 e-commerce sites to enable payments and provide flexible financing to make purchases, is adding one more key investor to help take its next steps into a wider range of services. Today it announced that credit card giant Visa is making an equity investment in the company, and as part of it, the two are forging a strategic partnership to roll out new products.
Visa and Klarna are not disclosing the size of the stake — following the same pattern Visa took when it invested some years ago in two other fast-growing financial startups, Square and Stripe — and Klarna is not specifying what form the strategic partnership will take.
In 2014, I moved to London to launch an asset management firm investing in loans originated by marketplace lending platforms.
Starting the business in London made sense. The UK boasted a business environment in which risk-taking was encouraged and entrepreneurial success valued and rewarded. Simple rules such as entrepreneurs’ relief, which reduces capital gains tax on the sale of a business, are very attractive for budding entrepreneurs.
However, the vote in last year’s referendum for Britain to leave the EU has caused me to reconsider my decision to live in and operate my business from London.
Exactly one year after winning Money20/20 Europe Startup Competition, James (a FinTech in Credit Risk, formerly known as CrowdProcess) returns to Copenhagen after closing an oversubscribed investment round led by Ex-Credit Suisse Board Member Gaël de Boissard. This round also included ex-Deutsche Bank COO, Henry Ritchotte, and BiG Start Ventures, a VC focused on FinTech and InsurTech. As a result of this deal, Mr. de Boissard has now joined James’s Board of Directors, after having previously been at the board of Credit Suisse.
IBM is building blockchain technology that will be used by seven of Europe’s largest banks, including HSBC and Rabobank, to facilitate international trade for small and medium-size enterprises, the company said on Tuesday.
TodayKiva.org, the world’s first and largest crowdfunding platform for social good, announced that it surpassed $1 billion USD in loans supporting borrowers around the world. More than 2.4 million entrepreneurs, farmers and students globally have been able to launch and expand viable businesses or pursue an education thanks to loan support from 1.6 million people, lending just $25 dollars at a time.
Recently on World Refugee Day (celebrated globally on June 20), Kiva launched a new World Refugee Fund, a $250K matching fund to be followed by a rotating fund of up to $9M in loan capital to provide support to refugees and host communities in countries including Lebanon, Jordan, and Turkey.
The World Refugee Fund seeks to fill this lending gap and is being developed by Kiva and the Alight Fund, along with founding partners the Tent Foundation and USA for UNHCR. To date, Kiva has crowdfunded $4.3 million in loans to 4,544 refugee borrowers globally.
According to KPMG’s 2016 global Pulse of Financial Technology (FinTech) Report (source), Venture Capital (VC) investment in the FinTech sector reached an all time high with a total of $13.6 billion across 840 financings in 2016. While FinTech investment proved to be “hot” in 2016, has this massive investment translated into consumer adoption? Today, at Money 20/20 Europe, early-stage venture capital firm Blumberg Capital released the results of its recent survey conducted online by Harris Poll in France, Germany, Israel, United Kingdom (U.K.), and the United States (U.S.), which found that FinTech appears to be gaining traction with Israel emerging as a leader in early-adoption. Despite investment and adoption progress, cash still remains king for most of these countries such as Germany, where 75 percent of adults still use paper currency and coins to make purchases at least once a week. Can cash ever be crushed? To see the full findings, please visit globalfintech.blumbergcapital.com.
Israel Embraces FinTech Early but Cash is Still KÃ¶nig in Germany The findings indicate Israel as a leader in early FinTech adoption as this country is more likely than other countries surveyed to use mobile banking apps and mobile wallets to make a purchase at least once per month. Additionally, nearly one in 10 Israeli adults say they have used alternative financing/lending services within the last 12 months. While many may believe cash to be an antiquated form of payment, the survey revealed paper money is still regularly in use.
Israeli adults are most likely to use a mobile banking app at least once a month (e.g., to check account balances, transfer funds, make a mobile deposit) (50 percent vs. 38 percent in U.S., 37 percent in U.K., 35 percent in France, 28 percent in Germany).
Israeli adults are more likely than French, British, and American adults to use mobile wallet apps to purchase goods/services at least once a month (27 percent of Israeli adults vs. 21 percent of French adults, 18 percent of American adults, and 17 percent of British adults).
Seven percent of Israeli adults have used alternative financing/lending services (e.g., peer-to-peer lending, online lender, lease-to-own) within the last 12 months.
German adults are most likely to use cash to make purchases at least once a week (75 percent vs. 64 percent of British adults, 58 percent of American adults, 48 percent of French adults, 47 percent of Israeli adults).
What is Fraud Anyway? As cybersecurity continues to dominate the headlines, there was a surprisingly low level of concern among most countries surveyed given the current risk landscape. In Blumberg Capital’s 2017 State of Cybersecurity Report, findings revealed a gross overconfidence in cybersecurity knowledge and safety despite $15 billion being stolen from 13.1 million American consumers in 2015 in the U.S. alone (source). This disregard for fraud risk could indicate that consumers generally have confidence in the products and services they choose, suggesting that FinTech companies have the opportunity to educate new users on the security measures they have in place and why they are important.
British, American and Israeli adults are more likely than French and German adults to worry about being defrauded (e.g., getting scammed, having identity stolen, having accounts hacked) when they make financial transactions online (43 percent, 39 percent, and 38 percent vs. 31 percent and 23 percent, respectively).
Nationalism vs. Globalization: Are transactions crossing borders? The survey also looked at how often people make online cross border purchases at least once a month. Again, Israeli adults lead the charge in cross-border transactions which could reflect on the narrower range of product choice available locally in Israel compared to other countries or Israel’s acceptance and wider adoption of FinTech and international eCommerce. Additionally, people were polled regarding the costs related to cross-border transactions, which revealed a budding anticipation of increased costs for these types of purchases in the future, especially in the U.K. This belief in the U.K could be related to Brexit. Findings include:
Israeli adults are most likely to make online purchases outside of the country they live in at least once a month (44 percent vs. 17 percent of French adults, 14 percent of German adults, 13 percent of British adults, and 9 percent of American adults).
21 percent of British adults believe making online purchases outside of the country they reside will become more expensive (i.e., goods/ services will cost more and/or there will be additional fees) in the future. (Vs. 16 percent of American adults, 14 percent of German adults, 11 percent of French adults, 9 percent of Israeli adults).
Methodology This survey was conducted online by Harris Poll on behalf of Blumberg Capital from May 16-22, 2017 among 2,166 American adults ages 18+, 1,046 German adults ages 18+, 1,048 French adults ages 18+, 1,050 British adults ages 18+, and 550 Israeli adults ages 18+. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For additional information about the survey results and methodology please contact: email@example.com
For the 50th anniversary of the first ATM, YouGov has conducted a global poll of 8000 consumers on behalf of ACI Worldwide to survey the usage of automated teller machines.
The survey found that only 42% of British consumers use ATMs just as much as they always have, while 48% in Germany, 47% in Spain and 40% in France believe the same, perhaps because of the widespread availability of alternative digital payments. 29% of UK consumers, 31% of French, 38% of Spanish and 43% of Italian would prefer this as well as a more secure way of payment authentication.
Zurawski does not see an ATM retirement any time soon as many still prefer using hard cash because it is a deliberate way of controlling spending.
The survey presented that customers want mini-statements, alerts for upcoming payments or overdraft fees plus the ability to dispense a new credit or debit card.
The rise of fintech does not pose any compelling risks to financial stability, according to a review by global regulators, but this may change as the sector grows.
While financial technology is changing how financial services and information are being delivered, there is no evidence that services like crowdfunding, “robo” advice and cloud computing will fundamentally change underlying activities such as lending, the Financial Stability Board (FSB) said in a report published on Tuesday.
While money transfers and payments services still lead the fintech charge with an adoption rate of 50 per cent in 2017, insurance has come in a surprise second with a 24 per cent global adoption rate.
The adoption level for insurance fintech services in Australia stands at four per cent higher than the global average (29 per cent), linked to the upswing of personalised wearables with in-built abilities which allow for prediction of claim probability and lifestyle trends by insurance firms.
While many players try to attract investors by offering high-interest rates and leave them in the lurch in the case of default, i2iFunding has walked the talk by making the first payment from the Principal Protection Fund, and reiterated its commitment to shore up investors’ confidence.
Deteriorating asset quality has become an inevitable problem of the banking sector these days. Bad loans skyrocketed 135 percent over the last two years, and now, they constitute close to 11 percent of the advances of Public Sector Banks (PSBs).
The P2P lending industry is no immune to this trend.
i2iFunding has become the first P2P lending platform in India to compensate investors for the loss of outstanding principal amount incurred on the defaulted accounts.
Principal Protection programme will also be strengthened further, and many new features will be included. As of now, the level of principal protection depends on the category of the loan. Default in the category “A” qualifies for 100% protection of outstanding principal. This falls by 10% for the every next category and default in the “F” category offers you 50% protection. The functioning of the Principal Protection Fund will be further rationalised and smoothened. i2ifunding will primarily provide 50% and 100% principal protection options in each category from ‘A’ to ‘F’. There will also be the third option of ‘zero’ protection. Depending on the option selected by the investor, he/she will have to settle in for lower EMIS. The fee for offering principal protection service would be deducted through EMIs, but won’t be collected upfront. It’s noteworthy that, this may proportionately reduce the returns earned on lending projects but would make lending at i2iFunding safer and more secure.
Always ahead of the innovation curve, Rubique has yet again demonstrated its focus on making financial solutions accessible to as many users as possible. The one-stop online marketplace providing technology enabled end-to-end solutions to financing needs of individuals and SMEs has just localised its Rubique Associate app.
The interactive app now live in Hindi, Marathi and Bengali language will now enable more number of potential Business Associates to register with Rubique and earn a commission for every reference search for loans or credit cards.
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 […]
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.