When an industry develops at a breakneck speed, the law can take some time to catch up. Existing regulations usually do not fit new paradigms, and it can stifle innovation. A regulatory sandbox is the perfect solution because it allows for the testing of new innovations in a controlled environment. The term “sandbox” refers to […]
When an industry develops at a breakneck speed, the law can take some time to catch up. Existing regulations usually do not fit new paradigms, and it can stifle innovation. A regulatory sandbox is the perfect solution because it allows for the testing of new innovations in a controlled environment.
The term “sandbox” refers to the box of sand where small children play in a confined boundary. The term has received a new connotation in a commercial sense and refers to a closed environment used for experimenting and testing projects or new ideas. Regulatory sandboxes help in testing business proposals and prototypes under a regulator’s supervision. These testing grounds have an advantage of not being governed by current rules and, therefore, the business can explicitly experiment the validity of their projects without the danger of getting caught on the wrong side of existing law.
Such regulatory sandboxes are critical for the development of the alternative lending industry. The gist of having regulatory sandboxes in this sector is to comply with the regulatory directives that complement the growth of fintech companies without compromising on users’ safety and protection. The existence of suitable safeguards assists players in executing a live trial in the market without having to worry about the legal consequences.
The Dawn of the Regulatory Sandbox
Financial regulators across the globe understand the challenges and opportunities presented by innovations like digital-only banking, P2P lending, robo-advisors, and other fintech innovations. Some countries have taken the lead in ensuring that an ecosystem is created which helps startups experiment with their products and services without running afoul of current rules.
United Kingdom- The Pioneer
Seeing massive investor interest in this industry, the Financial Conduct Authority (FCA) proposed a regulatory sandbox as a part of its Project Innovate. It started accepting applications in mid-2016.
The UK has completed the successful testing of models from 18 out of 69 firms in the first phase and 24 out of 77 firms in the second phase. The sandbox has accepted 18 out of 61 firms for the third phase, and 29 out of 69 applications received qualified to the testing stage in the fuurth phase.
Participants in the UK sandbox came from sectors like retail banking, general insurance, retail lending, and wholesale lending. Around 35 percent of the participants in the secnd phase were from other countries, including the US and Singapore. The fourth cohort has almost 40 percent of startups experimenting with distributed ledger technology for disrupting traditional finance.
The UK regulatory sandbox includes:
A positive reaction from other global regulators.
The startup community’s eagerness is evident from each phase being oversubscribed.
It has reduced the time to get an idea to market. FCA claims that, during the first year itself, 90 percent of the firms were able to go for a commercial market launch of their product.
Also, many of the approved fintech companies were able to attract VC investment for their projects.
Singapore
The second jurisdiction to launch the concept of a regulatory sandbox is Singapore. The Monetary Authority of Singapore (MAS) introduced its sandbox in June 2016. It has launched a range of schemes for interested startups. Till date, the country has the maximum regulatory alliances and has entered into co-operation arrangements with eight countries including UK, Australia, and Japan.
Since its launch, the MAS has guided over 140 applicants from around the globe. About one in five applications has been approved for experimentation.
Startups in crowdfunding, financial advisory, artificial intelligence, cross-border funding, distributed ledgers, and more were able to experiment under the MAS scheme. The sandbox has helped Singapore attract overseas startups to come and do business in the country. And it is contributing positively in making Singapore a Smart Financial Hub by allowing these young startups to form partnerships with traditional financial institutions.
United States
The Consumer Protection Financial Bureau (CPFB) initiated the concept of regulatory sandboxes to ensure global compliance and to stimulate innovation in the fintech industry.
Arizona became the first state to open a fintech sandbox in the US by passing a legislation to create a Regulatory Sandbox Program. This program will enable finetch players to test their financial products without being subjected to the licensing provisions of the state. The move will come under the supervision of the Arizona Attorney General. Another state, Illinois, also on the footsteps of Arizona, has a separate regulatory bill (currently on hold) on the horizon.
Along with the regulatory sandbox, the US has also launched an ‘office of innovation’, which primarily focuses on blockchain and cryptocurrency technologies. The aim is to stimulate competition in the industry and expedite consumer advancement.
The participants included payment start-ups, financial technology companies, credit agencies, and lending companies.
The startups in the Arizona sandbox will be allowed to experiment with their financial products for a period of up to two years. The sandbox has promoted investment and job creation in the state. It will help improve the competitive position of the country in the global fintech industry. The concept has also helped early stage entrepreneurs surpass the legal hurdles with access to a trillion dollar opportunity.
Canada
The Ontario Securities Commission (OSC) launched its sandbox “LaunchPad” in February 2017. The government is said to create a “super sandbox” that will help foster communication between fintech players, financial institutions, regulators, and the government. It is a part of its 2016-2019 Business Plan to understand how technology affects the markets. An agency by the name Ontario Fintech Accelerator Office will also be instituted to provide assistance to start ups. The government plans to develop the retail payment and financial sector framework at the national level.
It has given a push to Canada’s innovation market as earlier, due to the domination of a few financial companies in the industry, innovation was slow. Now, it has allowed Canadian fintech companies to come forward and grow both locally and internationally. The new idea will benefit Canadian SMEs who could not access funding from traditional lenders.
Global Integration
The concept of regulatory sandboxes is currently running in over 20 nations. Apart from the countries mentioned above, Australia, Indonesia, Hong Kong, Malaysia, Denmark, and Thailand have sandboxes running to join the race. To promote interaction among participants at a global level, a GFIN (Global Financial Innovation Network) has been launched, aimed at knowledge sharing and facilitating cross-border testing of ideas. It is a joint effort of FCA and 11 other regulatory authorities. Organizations such as the US CFPB, Hong Kong Monetary Authority, UK FCA, MAS, and others, are a part of this network. The goal is to go past the idea of a sandbox and ensure that regulators are able to support the advancements in the fintech industry.
News Comments Today’s main news: Zuckerberg, Bezos, Gates back Wagestream. Funding Circle plans 300M GBP IPO. P2P lenders take in 300M GBP in second year of IFISA. Hong Kong receives 29 bids for virtual bank licenses. Today’s main analysis: Does fintech has a vicious funding circle? Today’s thought-provoking articles: Samir Desai discusses Funding Circle’s IPO as plan to […]
Zuckerberg, Gates, Bezos back UK-based Wagestream. This makes sense, but I wonder if they may be thinking that their own employees will be the ones to take advantage of what Wagestream has to offer.
Samir Desai on Funding Circle’s IPO as a path to conquer America. This is an excellent article with a lot of detail and critical perspective. It discusses more than Funding Circle and UK lending. There is also much to say about international competition, including China, U.S., Asia, and the rest of Europe. A great read.
Funding Circle has already facilitated over £5 billion ($6.37 billion) in loans since launching in 2010, mostly from its home U.K. market.
Funding Circle facilitated over £1 billion in loans to small businesses during the first six months of 2018 alone.
It’s now on track to become London’s biggest fintech IPO since global payments giant WorldPay’s bumper £4.8 billion ($6.1 billion) listing in 2015.
Source: Funding Circle
In the U.K. just 5% of businesses say Funding Circle when asked where they would go for finance, according to the company’s data, and 95% continue to chose their banks.
There are fintechs, and then there are fintechs. Cheerleaders point to payments startups like Jack Dorsey’s Square Inc., whose stock has soared 242 percent in a year, as evidence of a Silicon-Valley-style revolution in the making. But there are sob stories, too: loan platforms LendingClub Corp. and On Deck Capital Inc. are still trading well below their IPO prices. Promises of break-neck expansion often crash into the reality of regulated finance.
We remain in the late stages of the credit cycle. The US consumer has benefitted from record low unemployment, rising incomes and home prices, and a lower tax rate. The supply of credit and competition to offer loans is increasing. Lenders are optimistic about consumer spending and debt levels, and are reserving for potentially higher losses in the future.
We see divergent credit performance across FinTech asset classes. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. LendingClub also increased its charge-off estimates across loan grades by ~40 bps QoQ.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. Loan loss provisions are increasing at roughly twice the rate of loan growth across card issuers, but overall reserve levels are still low.
Scratch Introduces First Loan Servicing Platform To Align Financial Interests of Lenders and Borrowers (Scratch Email) Rated: A
Scratch, a new financial technology company started in 2015 to transform the antiquated business of getting America’s $13 trillion household debt repaid, introduced the first loan servicing platform to align the financial interests of lenders and borrowers.
The Scratch loan servicing platform empowers borrowers with a simple web application for understanding, managing and paying back their loans while providing lenders accurate, real-time portfolio insights. And, by automating the back-office complexities of loan management, Scratch can devote more resources to giving borrowers the attention and guidance they deserve.
Loan Servicing Crisis Persists
U.S. household debt composed of mortgages, student loans, auto loans, credit cards, home equity lines of credit, and other consumer loans, is at an all-time high and growing daily.
Today, household debt is at a high of $13 trillion and 8 out of 10 Americans carry some type of debt, including mortgages, credit cards, student loans, and auto loans. And everyone who has a loan has a loan servicer.
Funding Circle has announced plans to become the first of Britain’s new generation of financial technology companies to go public, in a deal expected to raise £300m and value the peer-to-peer lender at more than £1.5bn.
The initial public offering of Britain’s biggest peer-to-peer lender will provide a significant test of investor appetite for the breed of fintechs that have sprung up in the past decade to challenge high-street banks. Funding Circle has arranged £5bn of loans to small companies in the UK, the US, Germany and the Netherlands since its launch in 2010 by connecting businesses looking to borrow money with retail and institutional investors willing to lend them money.
However, the company’s prospective value of more than £1.5bn is above the current value of US-listed peers OnDeck and Lending Club, which have both suffered tumbling share prices since their lPOs.
FUNDING Circle has said it expects its existing investors will be able to become shareholders in the company after it goes public.
Funding Circle said that its initial public offering (IPO), if it goes ahead, would aim to raise around £300m, with at least 25 per cent of the company’s issued share capital to be placed on a free float.
In a blog post on its website, also on Monday, the P2P lender said that its customers would have the opportunity to apply to participate in the IPO and become a shareholder in Funding Circle via an intermediaries offer.
Given that Funding Circle’s flotation comes just days after the collapse of that other trailblazing fintech, Wonga, it’s hard not to compare the two.
Both were launched to fill the gaps in the lending market where traditional banks feared to tread. Both used tech wizardry to check they were lending to the right people at the right price. Both brilliantly deployed digital technology to make their services simple and fast to use.
Hopefully, for future investors, the similarities end there.
FUNDING Circle is to host a panel event focusing on cryptocurrency, described by the organisers as “one of the most interesting but least understood areas of fintech.”
The event is being held in connection with FinTechWomen, a London-based meet-up group, and is sponsored by Funding Circle.
UK sub-prime investors are shrugging off Wonga’s cloud. Customer complaints and a regulatory clampdown forced the payday lender to stop making loans. The likes of Amigo Holdings and Non-Standard Finance have different models, and regulators’ blessing. Yet, with Wonga out of the picture, they too risk becoming the focus of public ire.
Investors love it. Amigo’s return on equity will be around 40 percent this year, using Thomson Reuters I/B/E/S, while it and Non-Standard Finance should grow revenue on average by more than 20 percent each year up to 2021, analysts reckon. NSF, which has a more diversified business including unguaranteed loans, is valued at over 17 times forward earnings. Amigo’s shares were priced at 12 times forward earnings even after a selloff promoted by disappointing results on Thursday. The consumer finance sector on average trades at less than 11 times forward earnings, according to Eikon.
A Mayfair hedge fund is at the front of the queue to be paid by collapsed Wonga as fears grow that thousands of its hard-up customers will get nothing.
Kreos Capital lent Wonga about £34million two years ago and is understood to be still owed around £10million by the payday loan company.
Under the arrangement, it is thought to be in line to collect that sum ahead of other creditors.
The data shows that savers subscribed to 10.8 million Isa accounts during the 2017-18 tax year, down from 11.1 million in the previous tax year. This represents a fall of 10%.
Stuart Law, who heads up the business P2P lender, warned that the strong take-up of the IFISA could be hampered by the FCA’s proposed marketing restrictions for the sector.
Under the proposed changes, platforms would be restricted to marketing to those who are certified as sophisticated or high-net-worth investors or those that certify that they will not invest more than 10 per cent of their net portfolio in P2P agreements.
County Down Developments has received a £250,000 facility from Blend Network for the development of four luxury apartments in Bangor, Northern Ireland.
The loan from Blend Network came after the housebuilder was turned down for a loan by Barclays.
A US online mattress start-up backed by rapper 50 Cent has been forced to stop offering credit to UK customers, after it emerged it had been doing so without permission from the regulator.
Casper, a five-year-old company that is on a major European expansion drive, was allowing UK customers to buy on credit from Swedish bank Klarna.
Standard Chartered, WeLab, Zhong An Bank and HKT among several banking, technology and telecom firms applying for virtual banking licenses.
Twenty-nine financial and technology firms, including Standard Chartered and WeLab have submitted applications to obtain Hong Kong’s first online-only banking licenses.
The company shifted its headquarters to Hong Kong from Melbourne earlier this month as it prepares to submit a virtual banking license application, along with partners, ahead of Friday’s deadline.
Airwallex co-founder and chief executive Jack Zhang said the company will team up with a traditional bank and other local partners as part of the application process, although he declined to reveal their identities.
Another reason for the relocation to Hong Kong is proximity to major clients, including Tencent, online travel operator Ctrip, e-commerce JD.com as well as traditional lender Bank of East Asia.
And Beijing’s crackdown on the peer-to-peer lending sector – the shadow banking system that saw rampant illicit and risky behaviour continue in the first half of this year – has helped increase demand for corporate lending levels too.
First-half earnings showed the lenders rallying after several years of low growth. Collective net profit rose 5.7% year on year to 532.1 billion yuan ($77.9 billion), while the lenders’ average ratio of bad debt fell 0.06 percentage point in six months to 1.52% at the end of June.
Today Instantor, the Swedish fintech company making financial decisions easy, announces, WDSK, The World Domination Starter Kit. The WDSK is an initiative to support start-ups and scale-ups to develop next-generation products by giving them access to Instantor´s Bank API with no associated costs for new Instantor customers. By using Instantors bank API, developers will have access to transactional data from over 300 banks in 25 countries, with the potential to reach half a billion people. Instantor´s bank API has an unrivaled reach, and the WDSK initiative includes access to several markets outside new Open Banking legislation. The authentication and the end user’s interaction with banks are handled by Instantor, and the data can be accessed once the end user has given their consent.
The analyst suggested robo-adviser may be ahead of their time, given high net-worth demand for robo-advice is on the rise among the next generation of investors.
“While robo-advice is here to stay, it will take time to cement itself. The digitally-savvy next generation will embrace an automated service and big banks should capitalize on this. However, a big brand is not enough to justify much higher fees,” Woldemichael said.
To succeed, incumbents will have to provide a level of service, and prices, that are genuinely competitive with those offered by startups.”
The collapse of Wonga, one of Britain’s most high-profile fintech lenders, provides salient lessons for Australia, which considers the UK a template for financial technology policy and where tighter laws to protect vulnerable customers from payday lenders appear to have stalled.
Wonga, built around a slick app allowing customers to get expensive loans via their mobile phone, was “notorious for its extortionate interest rates and was a toxic symbol of Britain’s household debt crisis”, said The Guardian last week.
The payday lender “failed because it was too greedy and at times crossed the ethical line”, it said, quoting prominent UK financial columnist Martin Lewis, who described Wonga’s loans as “the crack cocaine of debt – unneeded, unwanted, unhelpful, destructive and addictive”.
Her heartfelt story was told at Good Money’s one-year anniversary last week during what Carol described as a “life-changing event” after borrowing money to buy essential appliances like a new fridge and washing machine.
The low to no-interest lender was set up in July last year in partnership with Good Shepherd Microfinance and the National Australia Bank, following a $2.3 million investment from the state government.
More than 2900 people made enquiries in the hub’s first year, and the store has provided more than 500 no and low-interest loans for household appliances, car-related expenses, household furniture and costs such as medical and education expenses.
SlicePay, a digital lending platform which caters to college students and young professionals, has raised an undisclosed amount in an extended Series A round of funding led by Chinese firm FinUp Finance Technology Group.
The company said in a statement that existing investors Blume Ventures, Japan’s Das Capital, and Russia’s Simile Ventures had also participated in the round.
A person close to the development who did not wish to be named pegged the deal at $14.9 million (around Rs 105 crore at current exchange rates).
Having recently raised what is estimated to be the largest Series B funding round for a fintech firm in Southeast Asia, Indonesia-focused lending platform Kredivo says the process was far from smooth sailing.
The company was forced to look beyond the region to raise the majority of its fund, as it found that there were simply very few investors in the region that specialized in doing Series B investments.
Tel Aviv University is among the top ten global undergraduate programs in terms of producing venture capital-backed entrepreneurs, according to a report published last week by Seattle-based market research company Pitchbook. Pitchbook ranked Tel Aviv in eighth place, up from ninth last year, above Yale, Princeton, and Brown.
Two other Israeli universities made the top 50 list: the Technion-Israel Institute of Technology came in at 14, while the Hebrew University of Jerusalem placed at 35.
News Comments Today’s main news: OnDeck CEO says online lending is the future of SMB lending. SALT Lending now in 35 states. LendInvest debuts exclusive 5-year fix product through buy-to-let club. Weidai files $100M IPO in New York. Wonga says $3M African loans are unaffected by UK woes. Today’s main analysis: LendingTree Personal Loan Offers Report for July 2018. […]
Is online lending the future for small businesses? There will likely still be some form of bank lending in the future, but online lending is more efficient. I can see where small businesses will be able to get better deals, then as they are do now, through online lenders.
SALT Lending is now in 35 states. Crypto lending, and cryptocurrency-backed lending, is one of the fastest growing parts of alternative lending now. I see this trend developing more, and SALT Lending is leading the way.
Do public markets have major flaws? A very interesting read. Is it almost over for IPOs? I think they’re still going strong, but the sudden rise of ICOs may be evidence that there are major flaws in the IPO process.
CEO Noah Breslow tells Proactive Investors the small business lending company has provided over US$9bln to small businesses, crossing the US$10bln mark this fall, saying online lending is the future for small businesses and consumers.
The cryptocurrency-backed lending firm, SALT, has released details that it is now operational across 35 states in lieu of passing crypto regulations and will be expanding its network to 20 new locations.
SALT is based in Colorado and is one of the few companies that allows borrowers to leverage their held crypto as collateral for loans. As more people than ever before hold crypto, it is important that cryptocurrency-backed lending firms pass regulatory checks to offer more competition to potential crypto borrowers in the safest possible manner.
SALT is planning to move into 20 new states, which will include North Carolina, Oklahoma, Florida, and Virginia. Crypto users in all but 15 states can now leverage their crypto to receive personal cryptocurrency-backed lending packages.
According to two prominent executives this week, the stock market isn’t all that it’s cracked up to be. Initial public offerings are broken, according to Spotify CFO Barry McCarthy (paywall). Tesla CEO Elon Musk says stock investors are too focused on the short-term, and his threat to take the company private sent traders, bankers, fans, and government watchdogs into a tizzy.
McCarthy and Musk aren’t alone in their worries. The number of IPOs and listed companies in the US is shrinking: There were an average of 310 public offerings annually from 1980 to 2000, according to an analysis by Jay Ritter, a finance professor at the University of Florida. The average has slipped to 108 since then.
A common complaint is that public markets are too demanding. It’s expensive to comply with regulations, and these days there’s ample private money available for companies to tap without all the hassles of dealing with analysts, short sellers, quarterly reporting, and the rest of it.
Offered loan amounts are down about 3.5% for all borrowers, while offered APRs inched up. Rate and loan amount offers varied widely among consumers, depending on factors including, but not limited to, credit score, income, and current debt obligations.
The most common reasons for seeking a personal loan are credit card refinancing and debt consolidation. These two categories comprise 64% of all loan inquiries.
West Virginia schools rank 24th in the nation for the amount of debt its students graduate with, with Marshall University coming in sixth out of the schools tallied in a recent LendEDU report.
By licensing data collected from the annual Peterson’s voluntary financial aid survey, LendEDU, an online loan marketplace, completed its annual Student Loan Debt by School by State Report, a comprehensive analysis of student loan debt statistics for over 1,000 colleges and universities throughout the United States.
The total outstanding student loan debt now stands at $1.52 trillion, making it the second largest form of consumer debt behind only mortgages.
The average amount of individual student loan debt owned by U.S. college students increased by more than $300 in 2017, according to a study by LendEDU.
The New Jersey-based online loan marketplace’s annual Student Loan Debt by School by State Report found the average debt per borrower for the class of 2017 was $28,288, up $313 from $27,975 in 2016.
“Student loan debt in the U.S. continues to be an issue of the utmost importance. The total outstanding student loan debt now stands at to $1.52 trillion, making it the second largest form of consumer debt behind only mortgages,” LendEDU said Wednesday.
The annual report uses data from the Peterson’s financial aid survey, which collects responses from 1,080 four-year public and private institutions to determine average individual student loan debt figures and rank states and colleges in terms of debt per borrower.
The second quarter of 2018 was a busy one for robo-advisors. Hedgeable announced its impending closure, WorthFM became history and LearnVest notified customers it was discontinuing its planning and online investment services.
During the same quarter, US Bank and Fifth Third Bank launched their robo-advisor platforms and SoFi, a fintech lender with a robo product, introduced checking accounts with debit cards, further blurring the lines between banking and digital advice. And U.K.-based Wealth Wizards, an independent digital advisor with AI capabilities, is exploring a talking robo-advisor.
Genesis Global Trading, a crypto trading shop based in New York,launched a crypto lending unit, Genesis Capital, earlier this year.That business originated $30 million in crypto loans on Tuesday, its largest amount ever, according to chief executive officer Michael Moro. The company typically lends out around $2 million per day on average.
In a sense, it could be a bearish indicator for the market. Many of the people who are borrowing crypto from the firm are doing so in order to take a short position on a given coin.
It took almost two years for two dozen officials at the Consumer Financial Protection Bureau to pull together a case against Golden Valley Lending. The online lender was making small short-term loans at interest rates as high as 950 percent, violating laws in at least 17 states that cap interest rates. Last October, the agency finalized a rule to stop “payday debt traps” by requiring lenders to determine whether people can afford to repay their loans.
Yet a few months later, it unceremoniously dropped the case, telling a federal judge in Kansas that it would “continue to investigate the transactions that were at issue.” Golden Valley is still doing business; its Web site says: “Get the money you need. It’s easy!”
Mulvaney has all but halted the enforcement of certain government regulations. He stripped the bureau’s fair-lending unit of enforcement power and redefined it as an advocacy office.
RealtyShares announced today the launch of its new corporate brand identity and online learning center. The brand changes come at a time when the company is continuing its focus on the commercial middle market, commercial transaction values under $50 million.
As part of the rebrand, RealtyShares is launching a new online learning center where investors can learn more about diversifying investments and the role that commercial real estate can play in an investment portfolio. This learning center includes guided learning paths and educational articles created and curated by RealtyShares’ expert professionals. The content is designed to help investors with a range of investing experience better understand the risks and rewards of investing in commercial real estate.
The real estate market has seen steady growth the past few years, and is showing no signs of slowing down. The commercial real estate industry alone is expected to reach $414 billion in commercial transactions next year.
This isn’t the biggest news in the real estate industry though.
According to real estate and cryptocurrency expert, Kirill Bensonoff, the most significant growth for real estate in the next few years will be how blockchain technology is applied to the market.
Holistic financial health platform Even announced on Friday it has opened its new office in Raleigh, North Carolina. This news follows the company securing $40 million through its Series B funding round. Founded in 2014, Even describes itself as a mission-driven technology company working to help Americans escape the paycheck-to-paycheck cycle.
Even also reported that its mobile apps instantly budget so that users know how much is “okay to spend,” safely address cash flow issues with Instapay (on-demand access to wages), and help employees automatically save money out of their paycheck before it ever hits their bank balance.
Buy the Block founder Lynn P and her team have struck gold in the hills of Colorado for a second time in as many years with the release of their new app now available on Android and iOS platform. This app will expand the already extensive number of BlockVestor enthusiasts that populate the first Black-female owned FINRA and SEC regulated real estate crowd investing platform in the United States. The addition of the new app will rapidly expand a brand that is on the cutting-edge in alternative financing. This unique and innovative platform allows many inner-city residents a never-before available opportunity to invest with their peers and their communities.
Moving can also be expensive, so the company has announced a partnership with Affirm, where Affirm’s financing will allow you to break up the moving costs into monthly payments.
To be clear, Moved isn’t doing the moving itself — instead, it’s basically connecting you to a marketplace of movers and other service providers. Pittenger said the company is “very strict about the suppliers and the vendors” and will remove them if customers aren’t happy with their experience.
Moved is managing all of this through a real, human assistant who can help you figure out what you need, handle the scheduling and serve as a “consumer advocate” who ensures that you’re not getting ripped off.
As the back-to-school season gets under way, you may be shopping around for new investments for your portfolio. Real estate is a solid diversification tool and student housing is an under-the-radar sector to consider this fall.
“The student housing real estate investment market is virtually untapped,” says Jay Morrison, CEO of the Tulsa Real Estate Fund. An aura of exclusivity surrounds student housing investments but it’s a sector that’s far from fully realized, “which means there’s plenty of room for opportunity for new investors in this market.”
As a smaller niche within the commercial real estate market, student housing has long been the domain of institutional investors and people with a high net worth.
Following the recent changes on its marketplace lending platform, UK-based LendInvest announced the launch of an exclusive five-year fix product through the lender’s Buy to Let Club. The lender reported that the product is Designed for landlords who wish to utilize a higher fee, lower interest rate loan, and allows the borrower to leverage their cash flow.
According to LendInvest, the five year fixed rate of 2.75% is available up to 75% LTV through the distributor, with a product fee of 4.99% which can be added to the loan. Affordability is then calculated at an Interest Cover Ratio (ICR) of 140% for higher rate taxpayers; 125% for limited companies and basic rate taxpayers, at an assessment rate of 4.19% against the total gross loan amount. The mortgage is available on loans up to £500,000 for purchase and remortgages, and suitable for standard property types and HMO’s.
When you are starting up a new business, it is unlikely that you will already have enough capital to invest. Taking out a business loan is the best option as this will give you the chance to get set up.
But which loan type is best for your business idea?
Peer to Peer Lending
As banks are increasingly wary about giving out business loans, peer to peer lending has become a more popular method for matching people who wish to invest their money and those who need to borrow. Though this method can be quite expensive and may be risky, it is quite easy to raise substantial funds this way.
Crowdfunding
There are two types of crowdfunding: equity-based and reward-based. Equity-based crowdfunding is where people contribute money to receive equity in your business; reward-based crowdfunding is where people contribute money for a reward.
Competition from alternative lenders is driving banks to boost lending amounts for businesses, according to Conrad Ford, Chief Executive of SME finance aggregator Funding Options.
Barclays and NatWest/Royal Bank of Scotland are among the banks that are boosting access to finance for SMEs.
Growing competition
Competition from alternative lenders is thought to have been the driving force behind Barclays’ decision to increase its lending amount to £100,000.
Commenting on the trend, Ford stated that there is growing competition in this sector, adding that Barclays is not the only bank that is taking action, with RBS/NatWest launching their Esme loans service, a digital lending platform that enables SMES to access unsecured loans of up to £150,000.
With tax changes and stricter lending rules making it harder for some to finance a property purchase, investors are increasingly looking to navigate the challenges in the buy-to-let sector.
It’s why setting up a limited company through which to buy and operate rental properties is growing in popularity.
Peer to peer lending has exploded in popularity because it offers investors high interest rates paid over relatively short time periods.
There is obviously a level of risk involved – the property is used as security, and if house prices drop suddenly then you risk losing some capital. That’s why it’s important to consider the loan to value ratio (LTV) – for example, if this is 75%, the borrower can borrow three quarters of the value of their property. This means house prices would need to fall 25% before the investor made a loss.
In recent years, many in China’s middle classes poured their savings into peer-to-peer lending platforms, known as P2P for short, drawn in by promises of high returns. But amid a larger effort to curb financial risk to China’s economy, financial regulators tightened rules for these platforms, leading many of them to collapse without returning investor money. In Li’s case, the main stakeholders of Yonglibao, which he had put his money into, suddenly disappeared in mid-July (link in Chinese), he told the South China Morning Post. By the time its founders abandoned its offices, the platform had amassed a transaction volume of 7.6 billion yuan ($1.1 billion). The other protester told Quartz he had lost the equivalent of $50,000 on a platform called iqianjin.com—its name is Love Money, though it can also be understood as “Get Ahead” or “Money Coming.”
Both hoped a protest in Beijing would compel the government to help people recover their money from the dozens of P2P platforms that stopped allowing fund withdrawals last month. Instead, they were foiled by hundreds of uniformed police who locked down the area, patrolling corners near the offices of the central bank and securities regulators, and checking identity cards. More than 120 buses were brought to the area to take the stealth protesters away, according to a reporter with AFP.
Hangzhou-based peer-to-peer lending platform Weidai, which translates as “micro-lending,” filed its preliminary prospectus Friday seeking to raise up to $100 million in an initial public offering in New York.
The proposed IPO size shrinked significantly since the company first announced its plans in April. According to Bloomberg citing sources, Weidai was previously planning to raise nearly $400 million.
Launched in 2011, the online micro-lending platform has attracted multiple high-profile investments, including a $159 million series C funding in 2016 led by Vision Knight Capital. Among other key investors were Chinese billionaire Chen Tianqiao’s Shanda Group and Shenzhen-listed software developer Hakim Unique Internet Co.
BRACE, brace. Hong Kong’s initial public offering (IPO) take-off is going to come to a screeching halt.
Source: The Edge Markets
Ascletis Pharma Inc, a Hangzhou-based maker of HIV drugs, has slumped 20% since making its entrance at the end of July (1).
Even the online insurer that sparked a revival of Hong Kong’s IPO frenzy is in the red. ZhongAn Online P&C Insurance Co, a company backed by Internet behemoths Tencent Holdings Ltd and Alibaba Group Holding Ltd, surged on its debut in September, but now stands 42% below its price on listing.
Two-thirds of IPOs that raised more than US$1 billion in the two years ended July 2017 were below their offer prices after six months; three-quarters had dropped after a year, data compiled by Bloomberg show. Ironically, the cause of the pain can be traced partly to measures Hong Kong Exchanges & Clearing Ltd has taken to fight back against a US market that was luring away China’s new-economy stars.
Hexindai (NASDAQ:HX), a China-based peer to peer lender, announced on Friday it has further strengthened its risk control system to better protect investors throughout the entire process of borrower acquisition, risk-based pricing, post-loan management, and default risk coverage through its new comprehensive, stable and efficient asset security system, HX-CORE. Hexindai reported it established the system based on advanced risk control technologies that leverage risk control models and enormous volumes of credit data from cooperating partners and business data accumulated by the online lending platform.
According to Hexindai, the risk-based pricing is conducted by the Company’s proprietary risk control system, called Hurricane, which was developed by the lender and operates in cooperation with a number of credit information organizations and third-party Big Data risk management companies.
Ning Tang, founder and CEO of CreditEase – a huge Chinese Fintech that started as just a peer to peer lending platform, recently spoke to Bloomberg in Asia. CreditEase is also the majority shareholder of US listed online lender Yirendai (NYSE:YRD)
Tang provided an interesting update on the Chinese P2P sector as it has been going through a transformational process. In July alone, it has been reported that over 100 peer to peer lenders shut down in China as regulatory authorities tighten operational standards to curb rampant fraud. The actions are to ensure a robust and sustainable sector of online lending.
Tang shared that revenues have not been impacted much by the regulatory actions as CreditEase has become more diversified with inclusive finance, alternative asset management, and wealth management.
Chinese authorities are taking immediate actions to reduce risks in the peer-to-peer (P2P) lending business and better protect the interests of private investors.
The latest moves by Chinese financial regulators include urging leading internet platforms to undergo self-inspection and fix problems. They will also guide unqualified P2P lending platforms in exiting the market and dealing with their assets and debts in a market-oriented way based on legal principles.
Thanks to rapid technological development around the world, it’s now possible for consumers to sidestep banks and other unnecessary intermediaries and secure private loans more efficiently.
One nation where this hasn’t been an issue is Sweden. Look no further than Lendify – the country’s largest peer-to-peer lending platform – for proof.
“Lendify is a marketplace platform that connects borrowers with investors, without the involvement of banks or credit card companies,” said Erik Wikander, the company’s Founder. “Some of Sweden’s foremost entrepreneurs are a big part of the platform – and we’ve been granted full approval from Finansinspektionen (the government’s financial regulation agency).”
Deloitte Germany has published research on the crowdfunding sector and when it comes to comparing new forms of online capital formation and old banks – banks win. That is, at least in the eyes of the Deloitte research.
Deloitte states that when it comes to providing finance to medium sized firms, the fabled Mittelstand, these companies have “little interest” in using this new form of finance. Simply put, their relationships with banks is too strong of a bond.
The research published by Deloitte was done in partnership with EFAM (Europäisches Forschungsfeld für Angewandte Mittelstandsforschung) at the University of Bamberg, the document said that the threat to traditional banks by crowdfunding or crowdlending has not panned out. This more recent study follows a similar one back in 2015 which stated that crowdlending was relatively unknown among company executives. Three years later, their survey of 250 medium size German firms appears to indicate little has change.
CreditRiskMonitor (OTCQX: CRMZ) today announced a new licensing agreement with DBRS, an independent, privately-held, globally recognized credit agency. DBRS is the fourth-largest ratings agency globally, with ratings on more than 2,400 issuer families and nearly 50,000 securities worldwide.
CreditRiskMonitor has also invested in cutting-edge technologies to improve the accuracy of its predictive scoring methods. The FRISK® score, a measure of bankruptcy risk in public companies, uses crowdsourced click patterns of risk professionals who subscribe to CreditRiskMonitor’s service. The PAYCE score, used for private company financial risk assessment, is formulated with deep neural network technology, a type of artificial intelligence.
With the introduction of blockchain technology, there have been lots of projects built on blockchain that have attempted to improve the traditional banking system. This brings us back to the question; Can blockchain revolutionize the traditional lending system? The answer is unequivocally YES since there are projects already on the brink of achieving this. Also, the below features of blockchain technology is naturally what is needed to revolutionize the traditional lending system.
Ways blockchain technology edge the traditional lending system:
The financial services industry is experiencing a period of dramatic change as a result of the growth in digitalization and its effect on customer behavior. In an emerging landscape made up of cryptocurrencies, frictionless trading, and consolidated marketplace lending, traditional banks have found themselves shaken by the introduction of new, disruptive, digitally-native and mobile-first brands.
With a reputation as being somewhat conservative and slow to innovate, many financial service providers are now modernizing and improving their systems, transforming their new business models and technologies in an effort to stay ahead of the more agile challengers snapping at their heels.
However, while this digital transformation brings significant opportunities, implementing these new technologies also presents challenges.
BLOCKLOAN, a new blockchain-based marketplace lender headquartered in Sydney, has announced that venture capital fund Xplora Capital has purchased $1.35 million in tokens, as it continues its mission to provide “transparent, easy to understand, [and] real-time” access to personal finance on a global scale at more competitive rates than the banks.
Described as “banking-as-a-platform on blockchain”, BLOCKLOAN offers personal crypto-fiat loans; crypto equity margin lending and collateralised crypto loans; digital wallets, and debit cards for borrowers to access crypto funds.
The fintech said that by using cryptocurrency-backed loans on a global P2P lending marketplace, it aims to eliminate the “unnecessary” fees associated with traditional lending, while promising end-to-end loan origination, matching and management through the use of pooled smart contracts and an automated KYC and credit risk engine.
The effects of technology and the disruptions technology make, manifests itself in clearly perceivable ways. This is very evident in many sectors – in a short span (just eighteen months after its release) Google Maps had knocked out GPS navigation device makers and Amazon and Taobao (Alibaba) have disrupted how consumers shop for goods by moving them to online from offline (O2O). Enterprises are worried about being Uber-ed or Airbnb-ed as new age companies are challenging traditional ways of doing business.
Banking and Lending space have also gone through an amazing level of rapid innovation and disruption starting at the turn on the new millennium. Traditional banking monoliths can no longer feel impervious as they were protected by a myriad of government regulations which used to make it hard for fintech start-ups. Fintech start-ups don’t have to deal with the large legacy systems that drag down big banks and are nimbler and more suited to adapt to global trends and changing regulations. Internet only online banks with meagre to no brick and mortar branch presence have come up and have shaken up the large banks by offering better interest rates for deposits and borrowing than traditional banks. As an added benefit with the ubiquity of eKYC systems and adoption by fintech industry, accounts can now be opened in a matter of minutes and can be ready to transact than days and after an insane amount of paperwork that needed to be filled in earlier days.
An emergency cash injection of R178 million has saved microlender Wonga from collapse – for now.
The UK firm, which has operations in South Africa, is currently facing immense pressure after the British authorities forced it to write off loans worth R4 billion because Wonga failed to properly check whether customers could afford them.
Wonga’s shareholders, two venture capital funds, have pledged the money to prop up Wonga.
During a wide-ranging interview with The New Times at a recent GSMA M360 Africa Series in Kigali, Mr Akinwale Goodluck, Head of the Global Mobile Operators’ organisation in sub-Saharan, sought to dispel the myth that mobile money would cannibalise banks.
He pointed to the fintech synergy between telcos and banks, noting how the significant numbers of people across the region are using “phones to do proper mobile banking.”
This is true, and perhaps more pronounced in East Africa. The sub-region has the largest mobile money market on the continent, accounting for 56.4 per cent of total users in sub-Saharan Africa, according to GSMA.
East Africa is, however, only leading the way, but not for long.
Two Indonesian startups have confirmed raising a funding round earlier this year.
P2P lending startup Akseleran said it raised a pre-Series A funding round of $1.85 million, while adtech startup Pomona said it secured an undisclosed Series A funding round.
P2P lending startup Akseleran raises $1.85 pre-Series A funding Peer-to-peer lending startup Akseleran has confirmed raising a $1.85-million pre-Series A funding round backed by a New York-based family office, the parent company of PT Bintraco Dharma Tbk and several angel investors.
According to a press release, the startup plans to use the fresh funding for expansion by recruiting representatives in a number of cities in Java such as Yogyakarta, Solo, Surabaya and Semarang. It also plans to step up its marketing campaigns through various advertisements.
News Comments Today’s main news: FTC says LendingClub misled customers on fees. Credit Karma expands ID theft monitoring to include dark web data. Two startup robos were top performers in Q1. Shanlin Finance leaders charged with operating Ponzi scheme. TransferWise launches borderless accounts in European nations. Today’s main analysis: Small-dollar loans. Today’s thought-provoking articles: Elevate’s safe credit. Hong Kong makes […]
LendingClub accused of misleading customers on fees. AT: “Of course, they deny it. The interesting note is that this is the lead story in a very drab news day. It does not get better, and the industry can’t afford any more bad news. We’re still climbing out of the pit from the last bad news.”
Small-dollar loans. AT: “A worthwhile read, if for any reason, for the graphic that shows the types of payday loans that most often lead to consumer complaints. Payday lending is a huge business. Online lenders are poised to disrupt it, but so far, no one has tapped into this sector in a big way. The company that can do it and make regulators and advocates for the poor happy could be the SoFi of the small-dollar loan sector.”
The Federal Trade Commission said the company, which connects borrowers to investors without banks in the middle, “lures” customers with the promise of no hidden fees.
Instead, Lending Club deducts money up front — hundreds and sometimes thousands of dollars, the FTC said.
The FTC also accused Lending Club (LC) of falsely leading customers to believe they have been approved for a loan.
The FTC further accused Lending Club of withdrawing double payments from the accounts of its customers and charging customers who had canceled auto-payments or already paid off their loans.
Following an inquiry that began in May 2016, the U.S. Federal Trade Commission (FTC) brought an action against LendingClub(NYSE: LC) earlier today in the Northern District of California alleging that certain LendingClub practices do not, or in the past did not, comply with the requirements of the FTC and Gramm-Leach-Bliley Acts.
LendingClub believes that the allegations in the FTC’s complaint are legally and factually unwarranted. The company is disappointed that it was not possible to resolve this matter constructively with the agency’s current leadership and intends to oppose the claims and work towards an early resolution of the matter in Federal Court. Additional information about the complaint and LendingClub’s response are on its blog.
Shares of peer-to-peer (P2P) lending company LendingClub Corp(NYSE:LC) are down by about 15% as of 3:30 p.m. EDT after the Federal Trade Commission charged the company with deceiving customers.
Providing credit to 160 million Americans who are being ignored by banks sounds like a great business. And indeed, Elevate, which does just that, has been growing faster than Lending Club, SoFi, or OnDeck and is more profitable than any of them, said Ken Rees, the company’s CEO .
“Forty percent of Americans show monthly income swings of 30%. The majority of Americans need access to emergency credit but the banks have pulled back. Credit is particularly important because they have very low savings.”
After introducing a free identity monitoring tool for its users late last year, Credit Karma is widening the scope of its fraud-fighting scans to include data from the dark web.
Credit Karma’s existing ID-monitoring tool searches 4.5 billion public breaches for a user’s personal data, but the improved service will scour additional breaches culled from the dark web. Added up, the tool will now search through 13 billion data breaches.
The company estimates that 65 percent of its users have experienced a data breach, whether they know it or not, so Credit Karma is well-positioned to issue a wake-up call about protecting identifying information online.
Two relative newcomers to the robo-advisor space are among the industry’s top three performers in the first quarter, according to the latest Robo Report from BackEnd Benchmarking.
SoFi Wealth Management, which launched in May 2017 as an offshoot from the SoFi online lending platform, took first place; TIAA SRI, the socially responsible investment portfolio of its TIAA Personal Portfolio robo, placed third; and sandwiched between the two was Schwab Intelligent Portfolios.
All three robos lost money in the first quarter in their taxable, balanced portfolios, split roughly 60/40 between stocks and bonds, but they performed better than other digital advisors and the overall stock market, which was down 0.76%, for the S&P 500. Their losses ranged from 0.14% for SoFi and 0.45% for TIAA SRI.
Schwab Intelligent Portfolios excelled largely because of its fixed income allocation, which included high-yield bonds and international debt, according to the Robo Report. It placed first for fixed income performance not only for the first quarter of 2018 but for the one-year and two-year trailing periods.
The Trump Administration has also taken notable steps to ease the burden placed on the payday lending industry. These include terminating the Obama-era “Operation Choke Point,” which was designed to discourage banks from doing business with payday lenders,11 as well as removing payday-bank partnership restrictions for at least one payday lender.12 This signals a significant departure from regulatory constraints put in place a decade ago prohibiting affiliations between national banks and payday lenders that sought to circumvent state interest rate caps.13
In addition to established market participants targeting borrowers with high credit scores, new internet-based startups are offering small-dollar loans to non-prime borrowers, directly targeting the payday lenders’ customer base. Fintechs aim to compete with traditional payday lenders by marketing a more customer-centric approach, as well as flexible terms and lower fees. These new market entrants generally rely on the use of AI-driven scoring products and non-traditional data analytics to assess a borrower’s creditworthiness. In addition to fair lending considerations, these new online startups generally rely on mobile devices and related technology to host their software and undertake lending decisions, thereby raising privacy and cybersecurity concerns.
Wilmington-based Navient reported higher earnings in the first quarter as the company expanded its segment reporting to reflect a broader array of businesses.
Results that included the origination of $500 million of private education refinance loans, a 43 percent decrease in private education loan charge-offs and a 32 percent increase in business processing fee revenue from the year-ago quarter.
For the first-quarter 2018, GAAP (Generally Accepted Accounting Principles) net income was $126 million compared with $88 million ($0.30 diluted earnings per share) for the year-ago quarter.
Utah-based Celtic Bank and Georgia-based lender Kabbage Inc have been hit with a proposed class action accusing them of creating a “rent-a-bank” arrangement to issue high-interest loans to small businesses in California and evade the state’s usury laws.
The case was removed by Celtic Bank to federal court in Los Angeles on Tuesday after being filed last month in Los Angeles County Superior Court.
If I may grossly generalize and speak for the majority of the millennial workforce, workplace culture is a big job-hunting factor. Of course, we want to make decent salaries and have access to good health insurance. We also want to be spending those 40 or more hours per week with people we enjoy working with, tackling independent and collaborative work, constantly learning new things, and developing our skills — all of which Enova does a great job of cultivating.
What is the foundation of Avant’s culture?
Avant’s culture is based a lot around letting the best idea win. No matter what part of the business someone is in, if they have an idea that really shines through and will resolve the issue at hand, they are heard. In my experience, even if you’re not in your domain, people will listen to you as long as you come in with a clear spec. If you ask for something and have a good explanation as to why it’s needed, you can get it.
A spokesman cited in publications, including a CNBC story in March about students using their financial aid money to invest in cryptocurrencies, is a fake, the CEO of a partner website has admitted.
Nate Matherson, CEO of student loan refinancing company, LendEDU, said he started The Student Loan Report — studentloans.net — in 2016.
Many online lenders have personal loans that offer more flexibility. Some lenders set borrowing minimums as low as $1,000.
Pros: Some online lenders offer flexible repayment plans. For example, Avant allows you to make changes to your upcoming payments online, including the amount and date of your current or future payments. The company says it’s willing to work with you if you’re unable to make a payment, making it easier to repay your loan.
Sen. Kirsten Gillibrand (D-N.Y.) is introducing legislation Wednesday that would require every U.S. post office to provide basic banking services, an ambitious step aimed at improving the lives of Americans with limited financial resources.
The postal system’s 30,000 locations touch every community. A majority ― 59 percent ― are in so-called banking deserts, or zip codes that have either no bank branches or just one.
Upgrade is an online lender that primarily offers unsecured personal loans between $1,000 and $50,000. You can use these loans for a variety of purposes, including home improvement, debt consolidation, or a big purchase.
As unsecured loans, these personal loans don’t require any collateral.
According to the National Survey of Family Growth by the Centers for Disease Control and Prevention, one in eight couples have trouble getting pregnant or sustaining a pregnancy and more than 85,000 women in the U.S. undergo in vitro fertilization each year.
According to a 2015 study about the sentiment, costs and financial impact of fertility treatments in the U.S. by Prosper Marketplace, a peer-to-peer lending marketplace, nearly half of those polled said that prices impacted the level of treatment they sought. Almost 34 percent of those women surveyed had to stop treatment due to the financial burden. Meanwhile, 70 percent of participants reported acquiring some degree of debt in their quest to conceive with more than 26 percent taking on over $30,000 of debt. The cost of treatments was also the single largest factor for those respondents who initially decided to delay fertility treatment at nearly 82 percent.
In recent weeks, federal banking regulators have proposed softening a requirement that puts a hard limit on how much the largest banks can borrow. The rule, known as the supplementary leverage ratio, requires that banks prepare for a disaster by maintaining a certain level of capital on their balance sheets based on their total size.
Banks have long complained that the rule is too restrictive and makes it harder for them to do business, including lending, in important markets. They have asserted that the ratio is too blunt of an instrument and often the strictest of the various capital requirements that were put in place after the crisis.
Who can invest in REITs and real estate crowdfunding? The best investors for REITs and real estate crowdfunding might not be the same. Joseph Hogue, chartered financial analyst and owner of Crowd 101, a crowdfunding website, says that although real estate crowdfunding is less work than direct investment in properties, it still involves more due diligence than REIT investing.
What are the advantages and disadvantages of REITs and real estate crowdfunding? For hands-on investors, who want to customize their real estate investing, crowdfunding fits the bill, says Javier Benson, senior vice president of strategy and implementation at crowdfunding site RealtyShares. RealtyShares specializes in funding commercial real estate projects valued at more than $50 million, certainly not a market for the individual investor.
Benson summarizes the benefits of real estate crowdfunding: “lower fee loads, increased transparency and the opportunity to select individual projects.”
Mortgage lenders rejected 9 percent of loan applications in recent years from Greater Hartford borrowers, which is the nation’s 10th worst denial rate, according to a recent study.
The study by national lending exchange marketplace Lending Tree said lenders denied mortgage shoppers in Hartford, West Hartford and East Hartford at a high rate mainly due to insufficient debt-to-income ratios and collateral.
Hartford’s would-be borrowers ranked second in the nation for cities where collateral issues resulted in their mortgage denial, which amounts to 24 percent of its denials.
COMPLY2018 announces that LendingTree, the nation’s leading online loan marketplace, will award one company as The Most Innovative Company during the annual RegTech and Compliance Conference May 16-17 in New York City.
UK alternative finance firm Growth Street has been granted full FCA authorization, a significant milestone for Growth Street, which had been operating as an Appointed Representative of Resolution Compliance Limited since 2016.
Growth Street has simultaneously rolled out an update to its flagship business lending product, GrowthLine. The firm is now accepting applications from businesses looking to borrow up to £2M, a substantial increase from the previous maximum limit of £1M.
A THIRD of personal loan applicants have admitted they weren’t confident about how to check if their provider was legitimate, the Financial Conduct Authority (FCA) has revealed.
Research by the City watchdog found 36 per cent of those who took out a loan product in the past three years didn’t do any checks to ensure the legitimacy of their loan provider.
The FCA has revealed that more than £3.5m has been lost to loan fee fraud and said reports to its consumer helpline on this issue had increased by 44 per cent.
Eight ringleaders of the Shanghai-based Shanlin Finance have been charged with illegally obtaining deposits and taken into custody, according to local public prosecutor the Shanghai Pudong district People’s Procuratorate, the official Xinhua News Agency reported on Tuesday.
The scheme was disguised as a peer-to-peer lending platform, police said. Shanlin’s online lending platforms and mobile apps have been suspended from service.
Hong Kong Exchanges & Clearing Ltd. will allow innovative companies that use shares with weighted voting rights to apply for IPOs starting April 30, and will also admit unprofitable biotech firms. That’s a landmark departure from the exchange’s longstanding adherence to the one-share-one-vote principle and the requirement for a three-year profit track record.
China has also opened the door for companies listed on its National Equities Exchange and Quotations market – an over-the-counter trading venue that’s developed something of a reputation as a casino – to sell H shares in Hong Kong.
Looser entry rules will create a vastly different market.
P2P lending, which was designed to bypass traditional lending by matching individual borrowers and lenders, began to flourish on the Chinese mainland in 2011 as the government encouraged the wider use of technology to expand financial services to small businesses and individuals. At P2P lending’s peak in late 2015, there were more than 3,300 platforms operating, according to Wandaizhijia, a portal site that tracks the sector.
However, due to the absence of unified regulations, a great proportion of P2P lenders began collecting cash from investors, offering high returns. A market worth more than 1 trillion yuan ($158 billion) quickly developed.
A survey by FT Confidential Research shows the online lending industry in China continues to consolidate from new regulations; the days of significant growth and platform expansion have ended as the government looks to weed out the smaller players; since 2016 the government has capped borrowing limits, shut down secondary markets and forced platforms to file with local regulators
Transferwise is today rolling out a “borderless” consumer account and linked debit card, which will let people hold money in multiple currencies.
The service, which Transferwise says is the first one of its kind, has been openly trialed among a few thousand customers since January, and goes live globally including in Sweden, Denmark and Finland. Norway will follow later on.
This means that people will be able to transfer and spend money abroad, with little or no exchange or mark-up fees. They will also be able to make withdrawals through a Mastercard debit card. The debit card will me made available for larger businesses later in 2018.
According to an insider at the Royal Bank of Scotland, the bank has set an internal target of switching more than 1m users from Natwest to its latest project, a “next generation mobile-only bank”, in time for its debut in the third quarter of 2018.
In another interesting move, the insider has said that RBS’ mobile-only bank will be pursuing a marketplace business model, aiming to forge third-party partnerships as its primary source of revenue over lending. This is a model that is now well-known in the digital banking sector, hailed by dominant players like Monzo and Starling Bank as the future of next generation banking.
The General Data Protection Regulation (GDPR) makes special mention of children and, for the purposes of the regulation, consent cannot be granted without parental approval by anyone under the age of 13. Upon their 13thbirthday, data subjects can freely consent to how their data is processed – in other words, they can sign up to newsletters and appropriate alerts.
Unlikely as it may be that a 13-year-old will be signing up for newsletters from financial advisers, advice firms will still be processing large amounts of data on under-13s. Taking Intelligent Office as an example, there are currently more than 75,000 records of people under the age of 13 and so it is important that appropriate checks are in place and that parental consent has been granted at the beginning of the process.
However, don’t tell that to Deposit Solutions. The Hamburg-based provider of an open-banking platform that lets deposit-rich banks offer their account holders insured savings products from other banks is growing fast. It launched its own business-to-consumer marketplace Zinspilot in September 2015 and by the end of 2016 had transmitted $1 billion in deposits.
Deposit Solutions also has 50 banks in 16 European countries on its B2B platform. These include Deutsche Bank, FFB – the German subsidiary of Fidelity – and MünchenerHyp in Germany, and Atom Bank and Close Brothers in the UK.
So-called product banks, such as Atom, that are seeking funding, but don’t want to invest in a traditional deposit-gathering infrastructure, can offer terms to so-called client banks, such as Deutsche, with lots of customers, but already an excess of deposits.
The Spanish banking giant’s U.K. arm recently launched One Pay FX, a mobile payments service for its U.K. debit card holders that want to send payments to people in Euro Zone countries and the U.S. It’s the first market-ready product built on blockchain technology, Ripple’s xCurrent protocol, for retail customers. It had been running as a pilot for employees for the last 18 months.
Santander, one of the founding members of R3 CEV, a prominent consortium of banks investing in the company’s blockchain technology for financial applications, soon became one of the first members to exit the group as it concentrated on other payments-focused group work like the Utility Settlement Coin — “a tokenized version of central bank money,” in Faura’s words — and the Global Payments Steering Group.
According to BusinessBecause data, 90% of MBA applicants would consider studying abroad. At the same time, over 60% say they wouldn’t be able to pursue an MBA without financial aid.
Prodigy Finance has lent more than $505 million in loans to over 10,300 students globally. Those loans have enabled international students such as Alex Brack, originally from Brazil and a recent MBA graduate for The F.W. Olin Graduate School of Business at Babson College, to thrive.
Following an increase in incidents such as the January 2018 theft of $425 million from Coincheck Inc, ZPER, the decentralised peer-to-peer (P2P) financial ecosystem, is launching the most secure cryptocurrency wallet available. ZPER is achieving this by embedding advanced security solutions from app and device security leader, Trustonic, to provide best-in-class protection. This move is in response to growing concerns about the vulnerability of cryptocurrencies when stored in exchanges.
The emergence of instant cash loan machines across parts of New South Wales has sparked fears about low-income families being potentially caught in a debt trap.
The machines, which look like ATMs, only require identification and bank details before users are approved for cash loans almost immediately.
Financial counsellors have expressed concern about the devices, which they say appear to be popping up in low socio-economic areas.
It raised $10 million (Rs 64.3 crore) in a Series B round of funding led by Bain Capital Ventures and Renaud Laplanche, a French-American entrepreneur. The company had earlier raised $2 million in a pre-Series A round from Accel Partners and IDG Ventures India in November 2016.
Crowd-Genie, an Asia-wide cross-border lending platform, concluded its ICO on March 1, raising over $5.5 million. Under the stewardship of CEO and Co-Founder,Akshay Mehra, Genie is aiming to build a private capital hub using smart contracts to make borrowing safer, cheaper and more efficient. Mehra is certified in CMFAS by the MAS and has over 15 years industry experience. His goal of creating a tokenized lending platform puts him at the forefront of blockchain and cryptocurrency technology in Asia.
Under Mehra’s leadership, Crowd Genie’s goal is to develop a Business Loans Asset Exchange on which lenders can enhance their liquidity by transferring asset ownership. Crowd Genie Financial Services Pte. Ltd. is one of a handful of licensed platforms in Singapore to hold a ‘Dealing in Securities’ license by MAS and GenieICO’s token – CGC – was listed on the Cobinhood exchange on March 19.
The first initial public offering (IPO) by a Brazilian retail bank in nearly a decade, set to price on Thursday, will test if investors expect new technologies to give smaller lenders a fighting chance against Brazil’s dominant big four banks.
Banco Inter SA, a tiny mortgage lender that has reinvented itself as a purely online bank, is the first in a wave of feisty digital challengers planning to go public – and looking to trade at higher multiples than many of Brazil’s largest lenders.
News Comments Today’s main news: Affirm raises $200M at almost $2B valuation. Elastic Line of Credit surpasses $1B in funding. Klarna signs 500 online retailers in U.S. Zopa makes changes to Isa. Mintos adds first Russian loan originator. Flexiti offers online financing for e-tailers in Canada. Today’s main analysis: UK alternative finance is still healthy. Today’s thought-provoking articles: Cross River […]
Affirm almost hits $2B valuation with $200M fund raise. AT: “From last reports, this exceeded expectations. Congratulations to Max Levchin and his team for this achievement. This entrepreneur continues to surprise. Affirm is going to be one of the huge fintech success stories this decade.”
Klarna North America signs 500 online retailers in U.S. AT: “Congratulations to Klarna too. The competition in POS financing and e-commerce financing is heating up in practically every geographical region around the globe. Klarna is one of the major players, as is Affirm.”
The San Francisco-based company confirmed that it’s raising $200 million, led by GIC, a Singaporean sovereign wealth fund. Existing investors Khosla Ventures and Spark Capital are also participating.
Affirm’s valuation is estimated to be between $1.5 billion and $2 billion, as first reported by The Wall Street Journal. Investors are betting on Max Levchin, the PayPal co-founder who runs Affirm.
Elevate Credit, Inc., a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the Elastic product has originated more than $1 billion, and has served over 200,000 customers since 2013.
Elastic, a bank-issued line of credit offered by Republic Bank & Trust Company (“Republic Bank”), currently has more than $260 million in total principal outstandings across over 150,000 open accounts.
Since Klarna introduced its financing solution in the U.S. in October 2016, 500 online retailers have already enrolled in the simple and ‘smoooth’ credit solution that is fully integrated into the online checkout process. Available in 10 countries via a single API, retailers include powerhouse global brands like Microsoft, TaylorMade, Overstock and Lenovo.
Cross River Bank, the bank of fintech startups, is working with Mastercard to give consumers cardless access to ATMs through an offering called Mastercard Cash Pick-Up. It allows businesses or individuals to send cash payments by logging in to the Cash Pick-Up platform via their bank’s website or mobile app and entering the necessary transaction and recipient. When they’ve done that, recipients receive a text message with the order number, PIN and a link that helps them locate a participating ATM nearby.
The offering highlights the role of mobile phones in banking’s new normal — mobile is more than just a channel, it’s the thing that’s guiding both financial incumbents and consumers alike through the shift from physical to digital banking, which still hasn’t been fully realized.
For now, Mastercard Cash Pick-Up is only available at enabled ATMs in the U.S., where the postal service plays far too big a role in payments, particularly low dollar disbursements, Isaacson said.
Niehenke theorized that consumers whose trust in traditional banks had eroded might become a willing customer base for financial technology startups. But it was a bumpy time for tech companies entering the highly regulated financial sector.
Among those startups was Prosper, a peer-to-peer lending startup that had been temporarily shut down in 2008 by the Securities and Exchange Commission. The SEC maintained that the company was, in effect, selling securities rather than merely functioning as a marketplace connecting lenders and borrowers, TechCrunch reported.
CAN Capital, a small business specialty finance company, today announced three strategic hires as the company continues to invest in its technology and growth strategies. Mike Dodson, Vice President, Technology, Michael O’Brien, Director, Business Development, and Liping Deng, Director, Modeling & Analytics, have joined CAN Capital to focus on accelerating the company’s expansion.
E-commerce giant JD.com, the closest rival to Alibaba in China, is broadening its presence in Silicon Valley after it announced a collaboration with accelerator firm Plug and Play to seek out and work with promising U.S. startups.
More than eight out of ten (82%) US commercial banks have pledged to increase fintech investment over the next three years as the sector continues to expand, with 86% of senior managers planning an imminent rise in investment.
The in-depth research commissioned by global Fintech provider Fraedom, polled decision-makers in commercial banks including shareholders, middle managers and senior managers.
The study also found that more than seven out of ten (71%) respondents believe that the rise of technology within commercial banking threatens traditional one to one bank and customer relationships. This disruptive impact was felt greatest by shareholders (95%) as opposed to 67% of middle managers.
Startup founders know to look for grants, crowdfunding, and angel investors, and established small business owners understand the ins and outs of bank loans. However, another form of financing for established small businesses—working capital loans—is a little less familiar to many owners, yet working capital loans can be the ideal financial tool to handle opportunities (or problems) that present themselves in the shorter term.
Here are some of the highlights:
You don’t need to lay out a detailed plan of what you want to do with the money. Paperwork is minimal.
If your credit score is at least 500, you’ll need to show an annual profit of $50,000; if your credit score is at least 600, that gets cut in half to $25,000. If you’ve been denied a bank loan, your chances may still be good for a working capital loan.
You have the flexibility of choosing the type of working capital loan that best meets your needs: a term loan, cash advance, invoice factoring, revolving line of credit, or purchase order advance.
$682 billion | Amount that consumers are expected to spend on presents and other holiday preparations this holiday shoppingseason, with retailers going the extra mile to meet them where they are in a simpler and faster way. That means upping mobile and online shopping experiences, offering a buy online pick up in-store model and launching services like curbside pickup and better shipping options.
Broker-dealer firms aren’t confident the SEC’s consolidated audit trail (CAT) – a single, comprehensive database expected to store an unprecedented amount of sensitive trade data and personal identifiable information (PII) – is secure, according to testimony delivered before the U.S. House of Representatives.
National securities exchanges, Finra, alternative trading systems and broker-dealer firms have been required to submit information on trading activities – including customer information and prices – to the CAT daily since November 15 of this year. Large broker-dealers will be required to start submitting information to the CAT by November 15, 2018, while small broker-dealers are expected to do so by November 15, 2019.
The CAT is expected to take in 58 billion records daily – including orders, cancellations, modifications, executions and quotes for the equities and options markets – and maintain data for more than 100 million customer accounts and their unique customer information, according to parties involved in the CAT.
.46 Billion in Extra Credit Card Charges Due to Upcoming Fed Rate Hike (WalletHub Email), Rated: A
Forecasts call for a 99%+ chance of a Federal Reserve rate hike on Wednesday, which would make three for 2017. The move couldn’t come at a worse time for consumers, according to WalletHub’s
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Financial advisor consultancy founder Angie Herbers has launched an online training platform aimed at helping advisors grow their firms.
Beyond U offers advisor education via videos, online seminars and assessments, covering such topics as operations, management, sales and marketing, client services, compensation and more, according to a press release from the firm.
Zopa investors can now redirect their repayments into an Isa, allowing investors to gradually transfer their funds into an Isa without having to sell loans or pay fees throughout the process.
The UK’s alternative finance market — including marketplace lending, crowdfunding, and invoice trading — grew 43% year-over-year (YoY) in 2016, from £3.2 billion ($4.3 billion) to £4.58 billion ($6.17 billion), according to a recently released study from the Source: Business Insider
Researchers said about 72 percent of market volume in 2016 can be traced back to demand for lending options among startups and small businesses, up from 50 percent the year before. That amounts to more than $4.4 billion driven by startups and SMBs in 2016.
Peer-to-peer businesses lending was 2016’s largest alternative finance market segment, which saw 36 percent year-over-year growth.
Squirrel, a personal finance app designed to help users have more control over their money, has successfully secured its initial £400,000 funding target from 450 investors through its equity crowdfunding campaign on Crowdcube.
DOWNING has hired two real estate experts from Funding Circle’s property division as it enters the property development space through its crowd bonds platform.
Investors on Downing’s crowd bonds platform are being offered returns of five per cent for one year or six per cent for two years by investing in Downing Development Finance (DDF) through the DDF Property Bond.
Edinburgh Worldwide is another Baillie Gifford managed trust, though rather obscured by the group’s better known trusts. Notable performers (not a Scottish name among them) were Alnylam Pharmaceuticals, a gene silencing company, LendingTree, an online loan marketplace, and IPG Photonics, a manufacturer of fibre-lasers used in metal processing.
Banking disintermediation – essentially, taking out the middle man – has taken a new twist. While in recent years peer-to-peer (P2P) lending has become the poster-child for threatening banks’ lending business, a new type of hybrid disrupter is apparently starting to emerge: asset managers backed by financial technology.
One such firm attempting to cut banks out of the consumer-lending equation is FinEx Asia. The newly-licensed asset manager connects Asian investors with American consumer-credit assets, using artificial intelligence to select the loans based on risk appetite.
Founder and chief executive Maggie Ng said the company’s three funds now have US$100 million under management. They are backed by a portfolio of more than 10,000 US-based borrowers who have obtained loans from multiple online lending platforms, she said without specifying which ones.
Thomson Reuters, the news and market data giant, is partnering with a Hong Kong government-backed body to help the city’s banks and fintech firms develop new technology, cut costs and create new products.
Celebrating its 150th anniversary in Hong Kong next year, the new arrangement will see Thomson Reuters offer its platform to financial firms to distribute their products as well as use its technology, tools and data to create products, for free.
Whether bank customers are consumers or businesses, chances are good that they do at least some of their banking online. This month, startup nanopay is announcing a partnership with Canadian nonprofit interbank network Interac to help businesses manage the complexity of working across borders.
The partnership creates access for any bank account holder in the country to send funds to or receive funds from any other bank account served by nanopay. So far, that’s a short list including just India. But, according to nanopay CEO Laurence Cooke, coverage will be supported in the U.S. and China as well in Q1 of 2018.
The Datarius main characteristics are the use of blockchain, artificial intelligence, cryptocurrency operations and a special designer of the customer-adapted tariffs.
P2P lending is another characteristic of Datarius. It provides millions of people around the world with the possibility to receive and make loans using a Personal Account in the browser or through a smartphone application. It is a fast, reliable and easy way to get a loan wherever a person is. This is an opportunity to earn without involving brokers.
The pre-ITO round starts on December 12 on the official website of the Datarius Cryptobank and will last till December 31. 1 DTRC token = $ 1, but during the Pre-sale every buyer receives a 35% bonus. Soft Cap: $ 125,000.
CONVERSION PROS, a marketing agency within the retail finance sector and founding company behind the iFX EXPO series of financial B2B events, has announced their next event, the iFX EXPO Asia 2018, which will take place in Hong Kong from the 23rd to the 25th January 2018 at the HKCEC (Hong Kong Convention & Exhibition Centre).
This event holds special significance, according to Gal Ron, CEO of CONVERSION PROS:
“This will be our 12th show to date and we expect to showcase this steady growth as we present an expanded floor plan with more exhibitor and sponsor areas tailored to the needs of our attendees. We are also placing special focus on Crypto as well as Peer to Peer lending as we are sure that this is part of the future of the online trading industry.”
The Mintos marketplace for loans has added its first Russia based loan originator: EcoFinance. The online lender offers investments in unsecured personal loans issued in Russia under its CreditPlus brand. Mintos reports that EcoFinance loans on its marketplace will initially be listed in Euros with investors able to earn up to 11% annually.
It’s no longer news that many individuals and SMEs in Nigeria have limited access to finance, especially from commercial banks.
Kiakia, an AI and machine learning powered alternative credit scoring, customer service, direct and a P2P lending platform has launched a virtual agent called “Mr K” to help working adults and SMEs access credit.
According to the Co-founder, Olajide Abiola (who also doubles as the Chief Data Scientist), millions of naira in loans have been successfully granted to and repaid by hundreds of borrowers across 22 States in Nigeria. This comes with a loss/default/NPL ratio of below 2.3%, which is consistently maintained over a 12-month period, all thanks to Kiakia’s algorithm.
Flexiti Financial, a provider of Point-Of-Sale (POS) financing and payment technology, announced today that its award-winning POS consumer lending platform is now available for online transactions. Retailers across Canada now have access to a powerful, online financing platform that easily integrates into any e-commerce engine, offering a low-cost solution. This is a critical new offering for Canadian retailers as it overcomes two key hurdles – speed of implementation and cost – as e-commerce continues to grow as a critical sales channel.
Flexiti Financial’s POS lending platform offers low rates for retailers who want to offer their customers flexible payment options, such as 0% interest financing. Customers do not require an existing credit card to apply.
News Comments Today’s main news: LendingHome surpasses $100M in monthly loan volume, secures $57M in Series C-2. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2017-3. RateSetter says FCA authorization merely a milestone. Qudian raises $900M in biggest listing by Chinese fintech firm. BBVA focuses on U.S.-Mexico remittances with money-transfer app. New Zealand paves path for robos. SoftBank considering second […]
Goldman puts Lending Club, Prosper on its radar. AT: “Goldman Sachs is the legacy player to watch. With their financial might, they will likely be the digital banking force to beat in a few short years. If the Big 4 tech companies go fintech, Goldman could make the fifth giant in a land of global digital tidal forces. This is a must-read analysis from CB Insights.”
J.P. Morgan to buy WePay. AT: I’ve wondered when J.P. Morgan would get in on the acquisition game. Depending on how it’s managed, this could be a huge boon to Morgan’s banking business.”
New Zealand opens the door for robo-advice. AT: “This is interesting. They don’t change the standing rule that financial advice must involve a human. Instead, they offer robos an exemption from the rule.”
Less than a week after announcing its new office in Pittsburgh, real estate marketplace lending platform LendingHome announced it has surpassed $100 million in monthly loan volume and secured $57 million during its Series C-2 funding round, which included participation from Sberbank and Noah Holdings Limited.
The online lender also revealed the closing of the LendingHome Opportunity Fund II, which was managed by LH Capital Management, with $100 million in commitments from more than 40 investors including asset managers, international funds, family offices, and high net worth individuals. An additional credit facility of up to $300 million brings the fund’s total potential assets to $400 million.
Georgia companies scored the most venture dollars in the third quarter, since first quarter 2000. Fintech Kabbage and access management technology firm Core Security raised a combined $450 million, or about 60 percent of total venture capital invested in Atlanta companies in the third quarter.
As its bond trading revenue plummets, Goldman has undergone a major strategic shift, looking to grow the revenue opportunity from its consumer digital finance operation.
Goldman Sachs has changed a lot through its 148-year history. But as technology continues to roll through the financial services industry, Goldman is one of the few bulge bracket banks today that is staking its reputation and future on new strategic bets in digital finance.
When Goldman announced it would be entering the online lending business in 2015, Lending Club‘s then-COO Scott Sanborn quipped, “We are looking forward to competing with Goldman Sachs on customer experience.” More recently, when Goldman bought $2.8B worth of bonds held by Venezuela’s struggling central bank at a 70% discount to market price, Ribbit Capital founder Micky Malka tweeted, “This is why @GoldmanSachs won’t become a consumer first brand.”
46% of Goldman Sachs job postings are in technology.
Goldman Sachs’ online lending arm Marcus lent $1 billion in the first 8 months of operation. Now it is taking its digital finance brands global.
Goldman Sachs is one of the top two most active US bulge bracket banks investing in fintech startups.
Goldman has pushed investments into Brazil.
Goldman made its first fintech acquisition in 2016 and is looking for more.
Goldman’s cryptocurrency patent made headlines, but most of its patents have focused on improving its systems.
BACKGROUND ON CORE GOLDMAN SACHS
Goldman Sachs makes money in five primary areas: investment banking, equities, investment management, investing & lending, and FICC client execution.
Source: CB Insights
Digital finance initiatives
Notably, Goldman seems to believe that its digital consumer lending and deposit platform has as large of a net revenue growth opportunity as its FICC trading unit. This is a remarkable shift in strategy that only materialized in the last three years, and the strategy is still in the extremely early innings of its growth potential for Goldman.
Another advantage Marcus has over other bank incumbents looking to launch a competing initiative is its non-legacy IT architecture and the fact that Goldman does not have an existing consumer credit card business for Marcus to cannibalize.
Marcus reportedly passed $1B in loan origination in its first 8 months and is expected to originate $2B by the end of 2017. While data on number of loans doled out is hard to find, Goldman reached its first billion in consumer loans significantly faster than competing online personal loan companies (Lending Club launched in 2007). At the CB Insights Future of Fintech conference, Talwar noted that Marcus’s average loan size was “around $14,000.”
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2017-3 (“PMIT 2017-3”). This is a $501.05 million consumer loan ABS transaction.
This transaction represents the eighth securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Prosper Funding LLC (“Prosper” or the “Company”).
Preliminary Ratings Assigned: Prosper Marketplace Issuance Trust, Series 2017-3
eOriginal, Inc. and Quicken Loans today announced a partnership to complete the final steps of the online mortgage process – to digitally create an electronic note, and securely store it as an authoritative copy with delivery to both custodians and the secondary market. This advancement accelerates the time between origination and replenishment of capital.
Quicken Loans, the country’s largest online mortgage lender, closed more than $7 billion in mortgage volume through Rocket Mortgage, the nation’s first fully online mortgage process, in 2016 – its first full year in market. The rapid growth of Rocket Mortgage comes from its appeal to a new generation of homebuyers. In fact, two-thirds of Rocket Mortgage clients used the online process to finance a home purchase, and 80 percent of those consumers were first-time home buyers.
eOriginal’s platform delivers a fully digital mortgage and supports every type of digital closing strategy.
Modo, the payments fintech working with Bank of America Merrill Lynch, Alliance Data, FIS, Verifone, and Klarna, today announced they’re ready to break their self-imposed silence and discuss the work they have been doing to deliver innovative payment solutions for their clients in Q4 2017.
Modo has already announced support for three payment event types, in diverse areas of payments with Klarna, Verifone and FIS, and Bank of America Merrill Lynch (respectively):
Payout Events: Enable your corporate and commercial customers to send money globally using the ever growing number of digital wallets to accelerate the last mile of disbursements.
Checkout Events: Checkout anywhere, using any method of payment. Whether you are a merchant or a payment provider, offer consumers any way to pay.
Loyalty Events: Earn and burn loyalty in entirely new ways in entirely new experiences. Combine multiple rewards and loyalty programs to make a purchase or send a gift.
J.P. Morgan Chase & Co. (JPM) said that it agreed to buy payments company WePay Inc. in the bank’s first sizable acquisition of a financial-technology startup.
The banking giant plans to roll out WePay’s technology to J.P. Morgan’s four million small-business customers, said Matt Kane, CEO of Chase Merchant Services. WePay, which has roughly 200 employees, helps online marketplaces and crowdfunding websites like GoFundMe process payments.
The two companies didn’t disclose terms of the deal. But a person familiar with the matter said the price was above the roughly $220 million valuation that Redwood City, Calif.-based WePay achieved in a 2015 fundraising.
Bank of America processed $4 billion in Zelle transactions in the third quarter of 2017 alone, CEO Brian Moynihan reported on the bank’s earnings call Friday morning. Digital payments volume increased nine percent to $324 million. Within that, person-to-person payments growth was about 67 percent with the addition of Zelle this summer, reporting 13.6 million transactions and $4 billion in volume. The bank recently processed half a billion dollars in a single week, Moynihan said.
The bank’s digital users grew 5.2 percent to 34.5 million on a year-over-year basis. Mobile banking users grew 10.8 percent to 23.6 million.
Over at Wells Fargo, CEO Tim Sloan said during that earning call that third-quarter peer-to-peer payments increased 46 percent, but didn’t provide a Zelle-specific number.
At many times in history there have been finance companies that made loans that banks chose not to make. Such finance companies have thrived in good economic times and tended to fail in major recessions. I predict the same will be true of the newer editions.
But second, let us ask why are the banks not making these loans? The answer is simple. The combination of the costs of marketing and administration and the credit risk is too great to make money on a consistent basis. Therefore the banks are funding a large part of the loans by lending to the lenders and taking a senior position, cushioned by the equity of other investors and shielded from the marketing and loan acquisition costs (as well, perhaps, as some of the consumer regulatory risks). Smart banking, it seems to me. The banks have a lower cost of funds than the new lenders, so they can make money at a lower effective interest rate on the money they lend, so long as it is safer.
I have been shocked at the levels of expenses being incurred by some of the new lenders.
Not finding a mortgage lender you like? Try borrowing from a friend – or several of them – instead. According to reports, a new platform called Celsius could make P2P mortgage lending a viable option.
Using blockchain technology, Celsius is in the process of building a peer-to-peer lending network specifically aimed at the Millennial market. According to Alex Mashinsky, founder of the company, the platform will allow younger buyers to secure funding using their social circle, rather than big banks and financial institutions.
So how will it work? To start, each user creates a digital profile. They’ll need to upload FICO scores, online transaction histories and other non-traditional financial data. Then, Celsius will assign each profile a credit score that’s unique to the site.
To protect lenders, Celsius will offer insurance that covers a percentage of the principal loan amount in case of default.
Digital Asset Holdings LLC has raised $40 million in a Series B round, bringing the enterprise blockchain startup’s total funding so far to $110 million.
AlphaPoint Utilizes Intel Security Technology to Deliver Enterprise-Ready Blockchain Platform (AlphaPoint Email), Rated: A
Today, AlphaPoint announces the AlphaPoint Asset Digitization solution making illiquid assets liquid by facilitating the digitization of assets and launching new markets. AlphaPoint also announces the release of the AlphaPoint TrustedVM, a trusted virtual machine enabled by Intel Software Guard Extensions (Intel SGX) technology which allows smart contracts and blockchain services to run securely.
The latest release of the AlphaPoint Asset Digitization solution with AlphaPoint TrustedVM adds additional enterprise-class capabilities by securing access to information from intermediaries and network participants, thereby enhancing privacy and security to the AlphaPoint Distributed Ledger Platform. AlphaPoint has been working with some of the largest Fortune 100 financial institutions since 2013 to launch markets on blockchain technologies.
Enterprise-ready Blockchain Platform
In collaboration with Intel, the AlphaPoint Asset Digitization solution as designed at its core to help enterprises efficiently deploy blockchain solutions that implement business initiatives with world-class privacy and security. This solution was architected to create Trusted Virtual Machine, or TrustedVM, that leverages the trusted execution environment (TEE) that Intel SGX enables. AlphaPoint’s solution utilizes the security and privacy capabilities of Intel SGX, thereby allowing customers to benefit from several key technology and business advantages:
Faster time to market – Quickly develop and deploy blockchain applications with proven technology.
Hardware–enforced privacyand secure consensus – Execution and validation inside the TrustedVM, ensuring data is not visible to any unwanted parties.
Lower and predictable costs – With linear scalability, this technology improves total cost of ownership (TCO) and operational efficiencies.
Simplified development – Smart contracts and applications may be written in TypeScript and JavaScript, instead of highly specialized languages.
IBM is using the technology behind bitcoin to help farmers and other small businesses in underdeveloped countries participate in global trade.
The companies will use IBM’s blockchain technology to process financial transactions across borders and currencies — a process which is often prohibitively slow and costly for small business owners, especially when they are in developing regions with smaller banking infrastructures.
The project is focused on what Stellar calls “underdeveloped payment corridors” — countries like Samoa and Fiji, where monetary policies, currencies, and economic instability make it difficult for businesses to move money internationally.
Minorities are more likely to turn to a financial technology firm when seeking a business loan, but they may pay higher interest rates, according to the preliminary results of a congressional investigation released Monday.
A fintech startup with no mobile app does a fundraising round. It secures $8 million. How is that even possible?
True Link, a retiree-focused hybrid advice platform, had a simple pitch to investors: elderly clients like the convenience of digital advice, but want to talk on the phone. The firm claims it received 1.6 million client calls last year.
Now they are actually doing something about it, by launching a new framework for corporate governance, investing and trading called the Long-Term Stock Exchange. Backed by top Valley figures such as venture capitalist Marc Andreessen and LinkedIn co-founder Reid Hoffman, the LTSE says it plans to seek regulatory approval by the end of this year to become the newest U.S. stock exchange.
Its key feature: a system in which the voting power of shares increases the longer investors own them.
A year ago Lending Club launched a deal for new investors with United Airlines. New investors could earn 1 MileagePlus frequent flier mile for every $2 invested in a new Lending Club account.
Well last week Lending Club sweetened the deal. They basically doubled the amount of miles you can receive. So, instead of 1 mile for every $2 invested it is now 1 mile for every $1 invested. This deal is only valid until January 9, 2018 whereas the last deal had a three year expiration date.
whoa: blockchain, blockchain, blockchain (CB Insights Email), Rated: B
First, we’ve teamed up with Fortune Magazine for a joint review of Blockchain Trends & Opportunities. Robert Hackett of Fortune will be joined by CBI Intelligence Analyst, Arieh Levi.
RateSetter applied for full authorisation in October 2015 and cofounder and CEO Rhydian Lewis said in a statement the process has been “a long but positive journey during which we have learnt a lot, improved our infrastructure and implemented important changes, notably making the business more transparent.”
“Authorisation is a milestone but not an end in itself and we look forward to working with the regulator and all stakeholders to continue to deliver good customer outcomes and to grow RateSetter.”
According to data gathered by AltFi lending volumes through P2P platforms achieved a staggering compounded annual growth rate of 110% between 2011 and 2016 and shows little sign of letting up this year.
However, there are some indications this honeymoon period for the industry may be over as the UK’s inflation rate hit 3.0% last month piling pressure on the Bank of England to raise interest rates. This is an understandable worry for the industry, as much of the lending it facilitates is higher risk than that of the traditional banking sector.
Furthermore, there are several emerging industry trends, which are likely to boost its resilience to deteriorating economic circumstances.
Consolidation- While nearly 100 platforms are operating in the UK a resilient oligopoly is emerging. This is made up of the markets four largest lenders: Zopa; Funding Circle; LendInvest and Rate Setter who cumulatively facilitate over 70% of lending volume.
Securitisation – Previously, P2P platforms lacked the scale to make securitisation economic and this new trend will likely provide a further edge to the industries established participants.
Zopa, the world’s oldest “peer-to-peer” lender, has long focused on low-risk borrowers. The weighted average interest rate the 12-year-old company charges its British customers has never gone higher than 10 per cent and was as low as 5.6 per cent in 2013. While startups like Wonga focussed on the high returns available from borrowers who are under-served by financial institutions, Zopa has largely competed at the “prime” end of the spectrum with high street banks. The returns are lower, but so too are the risks, including to its reputation.
In recent years, Zopa has added riskier borrowers to help drive growth. (It’s worth saying that it is still miles from Wonga territory.) The weighted average interest rate across its portfolio has grown from 5.8 per cent in 2014 to almost 8.8 per cent in 2017:
Source: Financial Times
Zopa has been taking on more risk to achieve pretty much the same returns as when it made fewer risky loans.
Britain has seen its population of small housebuilders shrink by 80% in a single generation as market dominance has passed to an entrenched group of major players – among the top 10 UK housebuilders, none was founded after 1990. The disappearance of small and medium-sized housebuilders from the UK – defined as companies that complete between one and 100 units a year – has seen their numbers fall from more than 12,000 in the mid-1980s to about 2,400 today, according to research by the non-bank mortgage lender LendInvest.
Chinese online micro-credit provider Qudian Inc said it raised about $900 million in an IPO that priced above expectations, underscoring robust U.S. investor demand for fast-growing Chinese companies.
The offering from Qudian represents the biggest-ever U.S. listing by a Chinese financial technology firm. It is also the most high-profile company to take part in a resurgence of U.S. listings by Asian firms this year.
Qudian , an online microlender backed by e-commerce giant Alibaba’s financial unit, priced its U.S. listing above its expected range on Tuesday, says Reuters.
It offers fast growth, low default rates and, unlike many tech startups, is already profitable. At $24 per share, the final price represents a 2018 PE of 13.8, compared to 13.0 for smaller U.S.-listed online lender Yirendai.
China’s household debt relative to income is still low, and consumer credit is underpenetrated at 7 percent of gross domestic product, versus 20 percent in the United States, says Goldman Sachs.
Backed by Alibaba’s Ant Financial, Qudian lends cash to young Chinese consumers such as white collar workers, and advances credit so they can buy goods online and pay for them in monthly installments. The company provided $5.6 billion to 7 million active borrowers in the first half of 2017.
The sale of 37.5 million shares in Qudian has already raised about $900 million, making it the biggest U.S.-listing by a Chinese company this year, the report said. The offering values Qudian at as much as $7.9 billion, the report added.
Online micro-lending company Qudian is about to go public at the New York Stock Exchange on Wednesday, and it’s set to be one of the largest U.S.-listed floats by a Chinese company this year.
In its prospectus, Qudian said it was offering 37.5 million American Depository Shares with a float price range of $19-$22 per share. The company said it could offer up to 43.1 million shares if underwriters exercised an option.
In recent years, raising funds through crowdfunding activities is becoming increasingly popular among enterprises worldwide, and the governments of quite a number of countries have introduced legislation to regulate raising funds through crowdfunding activities. On the other hand, the Financial Services Development Council (FSDC) released on March 18 last year a report entitled Introducing a Regulatory Framework for Equity Crowdfunding in Hong Kong, which explored options for establishing a framework and a regulatory regime to promote and, at the same time, regulate equity crowdfunding activities in Hong Kong. So far, however, the Government has not yet announced any specific measures to promote equity crowdfunding activities.
Reply:
(1) We note that crowdfunding activities might come in different forms, including equity crowdfunding (ECF) and peer-to-peer (P2P) lending. The regulatory approaches towards these activities vary globally across jurisdictions in view of the nascent nature of the business. While some economies have developed dedicated new regimes, others leverage existing rules to regulate such activities.
(2) At present, parties engaging in crowdfunding activities in Hong Kong (e.g. where the activity involves an offer to the public to purchase securities, including shares, debentures or interests in collective investment schemes, or where the platform offers its own funds to borrowers) may be subject to the provisions of the Securities and Futures Ordinance (Cap. 571), the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and the Money Lenders Ordinance (Cap. 163), depending on the specific structure and features of the relevant arrangement.
Israeli startup Innovative Assessments (IA) says financial lenders like banks are missing out on huge numbers of potential clients because their criteria for handing out credit are too stringent and do not take the full picture of the client into account.
As a result, banks are effectively cutting themselves off from lending out money to large segments of the population, and many borrowers are denied access to affordable credit.
IA wants to help solve this problem. Banks should not only look at financial information to assess creditworthiness, IA says, but also at personal character, which is a whole new dimension of data that is missing from today’s credit scores. So, IA has come up with an idea to help lenders do this.
IA has developed patent-pending software that uses advanced psychometrics for credit scoring.
“Our algorithms look at people’s preferences towards certain financial behaviors,” added Fine. “And while there are no right or wrong answers, we can also identify people who may be responding insincerely.”
SeerGate, a real-time payments firm, was acquired by MyCheck in May 2015 while Ramat Gan-based Sling, whose platform allows micro-merchants to accept electronic payments from consumers via smartphones, was snapped up by Avante in July last year.
NSKnox has created a Digital Notary based on cooperative software that allows a secure transaction approval for banks and organizations, the company says. The software, which uses algorithms, allows two or more blind witnesses — who are actually financial or other kind of organizations — to help independently authenticate, authorize and detect fraud while verifying business transactions.
A total of 68 startups, including nine in the latest brew, have taken part in Citi’s Israel Accelerator program since it was set up in November 2013 in Tel Aviv.
Citi provides the entrepreneurs access to experts within the company globally to bounce ideas off of and the opportunity to use the bank’s huge infrastructure as beta sites. The banking giant does its mentoring and fostering pro bono, without taking any stakes in the companies it fosters.
The graduates of Citi’s program, which include startups like Paykey, Paybox and Vatbox, have raised a total of $300 million to date, according to data provided by Citi, and there have been two exits, with Sling and SeerGate having been acquired.
BBVA, Spain’s second-largest bank that snatched up mobile banking startup Simple for $117 million back in 2014, is now entering the mobile money transfer business with today’s launch of a new app called Tuyyo. The app, which is available on both iOS and Android, is focused on the $73 billion annual market for remittances to Latin America and the Caribbean from the U.S.
However, the service is initially launching with money transfers from the U.S. to Mexico, where the average amount sent by U.S. workers is about $1,900 per year, says BBVA. It also notes that the U.S. to Mexico corridor sees over $27 billion flowing between the countries annually, making it one of the world’s largest.
Many of the world’s poor in developing countries — nearly 2 billion, according to the World Bank — struggle to lift themselves out of poverty simply because they don’t have a bank account or financial services.
However, a new collaboration supported by the Bill & Melinda Gates Foundation will change that. Ripple, in partnership with Dwolla, ModusBox, Software Groupand Crosslake Technologies, with funding and support from the Gates Foundation, developed a new open-source software called Mojaloop for creating a real-time, interoperable payments platform on a national scale to reach the world’s poor with essential financial tools.
Leveraging the power of the Interledger Protocol (ILP), Mojaloop offers a way for financial providers, governments and mobile network operators to simplify and reduce the cost of developing inclusive payments platforms.
Financial technology has the potential to radically transform the securities industry. The fast pace of change could lead to disintermediation, according to an Iosco study.
Key trends identified in the report include:
Greater availability of data
Exponential growth in computing power allowing the analysis of ever larger data sets
Broader access to and the decreasing cost of goods and services
Increasing disintermediation and re-intermediation
Demographic and generational changes
Innovative fintech business models are disintermediating and re-intermediating certain regulated activities. For example, online equity crowdfunding platforms intermediate share placements and disintermediate stock exchanges and underwriters; peer to peer lending platforms intermediate or sell loans and disintermediate banks and lenders, and robo-advisers provide automated investment advice and thereby disintermediate traditional advisors.
Beginning with bitcoin in 2009, cryptocurrencies have also seen their prominence rise due to some of the qualities that they share with gold, the most prominent of which is their scarcity.
With the emergence of today’s digital age, a startup called GoldMint is seeking to alter this trend with a new means of exchange for physical gold, with transactions occurring over a blockchain-based platform.
GoldMint’s platform will leverage the private and individual gold trading market, including potentially the management of larger physical stocks such as those in central banks. It will also deliver an electronic payment solution tethered to physical gold, as well as a gold-backed peer-to-peer lending system.
There are two options for trading GOLD for fiat or cryptocurrencies. First, there is a method for seeking a GoldMint-guaranteed buyback. And second, a loan can be requested. For either option, the process is as follows:
Through the use of a special app which is not yet available, GOLD can be transferred as collateral to a designated GoldMint account.
GoldMint utilizes the current price of gold, as set by the LBMA, to fix the rate of a loan.
GoldMint requires the customer to undergo its know-your-customer (KYC) process as well as consent to GoldMint’s loan terms to receive the loan. Various repayment options for the loan amount and the means of repaying it are then offered.
If a customer defaults on repayment, their GOLD cryptoassets are transferred to GoldMint.
GoldMint also has a process for converting gold into GOLD tokens and reconverting these tokens into gold for cross-border passages.
The Financial Markets Authority has decided to allow financial services companies to provide so-called “robo-advice” to individuals.
Such methods are widespread around the world, but New Zealand law requires any financial advice to be given by a human adviser, and law changes to allow advice to be given by a computer programmes are not expected to be passed until 2019.
Companies wanting to offer robo-advice will have to apply to the FMA for an exemption.
The Financial Markets Authority will let Kiwis access personalised automated financial advice, known as robo-advice, with an exemption kicking in before a legislative overhaul of the sector.
The market watchdog sought feedback on the proposal in June and today decided to expand the range of products robo-advice can cover to include mortgages and personal insurance, it said in a statement. Providers wanting to offer the service will need FMA approval on the good character of directors and officers and satisfy the regulator of their capability and competence. Another round of consultation is needed to finalise the exemption and the FMA is aiming to start the process early next year.
Big banks are planning roboadvice services, but only BNZ has revealed how far advanced it is.
Westpac and BNZ have both told the Financial Markets Authority (FMA) they expect to launch roboadvice services, which could close the “advice gap” by using artificial intelligence (AI) systems to give customers advice on things like KiwiSaver, insurance and mortgages.
The banks’ intentions were revealed in submissions on whether the FMA should use its “exemption” powers to allow roboadvice services to operate despite current law only allowing personalised advice to be given by a human being.
ANZ and Kiwibank’s intentions were blacked out in their submissions, released by the FMA.
Submissions to the consultation focused on a number of themes:
Strong support for an exemption from the current laws preventing personalised robo-advice.
Opposition to financial limits and product exclusions.
Robo-advice should meet the same standards as those that apply to authorised financial advisers (AFAs).
Exemption applicants should be pre-approved or licensed.
Exemption conditions should be aligned with new advice regime requirements.
The FMA has decided not to impose financial limits on personalised robo-advice and the eligible product list has been expanded to include mortgages and personal insurance products.
Companies seeking to offer personalised robo-advice will have to provide the FMA with good character declarations for directors and senior managers as well as information showing they have the capability and competence to provide the robo-advice service. The exemption conditions will also be designed so that the robo-advice service is provided in a manner that is consistent with AFA requirements.
A summary of the submissions can be found here. 49 submissions were received by the FMA. 47 are being published.
Mumbai-based peer-to-peer lending platform Lenden Club has raised $500,000 almost Rs 3.5 crore in equity investment from three major investors Venture Catalyst, Anirudh Damani and an Indian venture capital fund. Venture Catalyst and Anirudh Damani had put in seed investment of Rs 1.5 crore in the company as well in May last year.
The Reserve Bank of India’s notification on peer to peer (P2P) lending issued on October 4 this year (“Regulations”) seems to have only added an element of ambiguity in the minds of stakeholders. Eighteen months since the RBI issued the consultation paper and it is not certain how and whether stakeholder comments have been internalised in the paper.
The definition of a “peer to peer lending platform” as an intermediary providing the services of loan facilitation, may unintentionally bring into the purview, a wide variety of operators. As a literal construct, this does not seem to take into cognizance the various types of business operations in the industry simply because it doesn’t clarify whether this excludes a model that doesn’t provide syndication. Theoretically even an internet search engine, business correspondents and lead generators could fall under this definition.
This must be the first category of Non-Banking Financial Company (NBFC) to not function in the manner in which it has been typically designed. The new Regulations set a precedent to regulate entities as NBFC’s that undertake neither lending nor credit enhancement.
The new Regulations also seem to bring into its ambit, an “off-line” P2P: the very essence for P2P start-ups has been low transaction costs thereby resorting to the online medium for such lending.
Japanese Internet conglomerate SoftBank is in early discussions to launch another fund that can possibly be larger than its existing $100 billion Vision Fund, Recode reported, citing anonymous sources.
The Information, in its report, noted that SoftBank got the right to prevent online lender Kabbage, in which it led a $250-million investment in August, from selling parts of itself, buying other companies, selling stock below a certain price or borrowing money beyond a certain level.
The fintech revolution sweeping finance will lessen the profitability of banks in the GCC when it comes to parts of consumer banking – such as money transfers and foreign exchange – but overall it is unlikely to hurt the ability of regional lenders to make money.
The rating agency noted that the GCC banks that it assigns ratings to get about a quarter of their revenues from fees and commissions and foreign exchange gains and, while a big portion that is generated from lending and advisory activities, some of that money comes from transfers and currency exchange.
Investments in technology and digitisation are also timely for UAE banks as profitability has been on the wane in the wake of the biggest oil price slump since the 2008 financial crash. Lenders are fortunate that this country has one of the highest smartphone penetration rates in the world.
The rising influence of financial technology (fintech) firms in the Gulf could eventually threaten jobs and profitability at the region’s banks, warned ratings agency S&P Global.
“This would push some banks to adjust their operations through increased digitalization, branch network reduction, and staff rationalization,” said Mohamed Damak, S&P Global Ratings credit analyst in the report.
Already, the region’s banks are starting to rethink their business model.
In early October, Mashreq launched one of the region’s first full service digital branchless bank — Mashreq Neo — as well as a new new digital mobile wallet service called Mashreq Pay — that can be used to make purchases around the world.
The Dubai-based bank has also started to use robotics in the third quarter to manage open account trade payments, according to the bank’s Q3 statement.
LENDING Loop, a Canadian peer-to-peer lending platform, has agreed to finance Snakes & Lattes, a cafe chain where people can play and buy board games.
Amfil Technologies, which owns Snakes & Lattes, said on Tuesday that the financing will be used to fuel the expansion of the brand across North America.
Snakes & Lattes has entered into an EXCLUSIVE partnership with Lending Loop, Canada’s first fully regulated peer-to-peer lending platform focused on small businesses. This partnership will fuel and facilitate the mass expansion of the Snakes and Lattes brand across North America, while simultaneously preserving shareholder value. This is the first time in history that Lending Loop has made a direct partnership to finance a growing company, and they will be conducting a mass marketing/advertising campaign to promote both Lending Loop and Snakes & Lattes.
In contrast, Amfil is collaborating with financial innovator, Lending Loop, to fuel the subsidiary’s growth at a fair market rate with flexible cash repayment terms.
Internet pioneer Sir Tim Berners-Lee looks at the fintech landscape today and sees something familiar — a creative ferment that reminds him of the early web. He also sees some mistakes in danger of being repeated.
News Comments Today’s main news: College Ave completes $161M securitization of private student loans.Marlette Funding prepares new deal.SoFi’s latest student loan securitization sees strong demand.Zopa closing in on completing the opening of new bank.Mintos exceeds 35K investors.JD Finance launches bank deposit product with yield rate up to 5%.SocietyOne hits $350M in total loan originations.Crisil withdraws […]
Why the next fintech phase is collaboration, not competition. AT: “It’s been said before, but it doesn’t hurt to repeat. I think everyone knows by now, banks need the technology and fintechs need the capital, the customers, and the security.”
Only three years after its inception, a major student loan marketplace lender, College Ave Student Loans, announced the completion of its first securitization of private student loans. The $161 million transaction got an ”A” rating from DBRS and a ”BBB” rating from S&P according to College Ave. The sole underwriter of the deal completed earlier in the summer was Barclays.
Online lender Marlette Funding is marketing a securitization this week, as the wider marketplace lending industry gears up for an important fourth quarter.
Goldman Sachs, Deutsche Bank and Citi are joint lead managers on the $312m deal, according to a source briefed on the matter. The deal is backed by unsecured consumer loans, which the company originates through Cross River Bank (CRB), and then repurchases before selling to third party loan ….
Credit rating agencies aren’t overly concerned about recent management changes at Social Finance, and it appears that investors feel the same way. The company’s latest student loan securitization attracted strong interest, and priced at levels similar to or better to its previous transaction, completed in July.
Fintech is growing up: Financial institutions are increasingly viewing these disruptors as partners while startups are learning that they need the scale and regulatory expertise of the incumbents. Both sides have a lot to learn, and benefit, from each other, according to speakers at the recent “Fintech: The Impact on Consumers, Banking, and Regulatory Policy” conference at the Federal Reserve Bank of Philadelphia.
“We are actively seeking startups for our members to partner with,” said Robert Nichols, president of the nearly 6,000-member American Banking Association (ABA).
Capital One has integrated its services with Amazon’s Alexa digital assistant and its video-enabled device, Echo Show. Consumers can ask Alexa for their account balance, request that it track their spending or even make a payment. Bank of America is set to debut its chatbot Erica on the bank’s mobile app to help customers with personal finance decisions. Also, more than 30 banks are using Zelle, a service that lets people send money to each other in minutes. It started in 2011 as a collaboration among Bank of America, Wells Fargo and JPMorgan Chase.
The Federal Reserve Bank of San Francisco launched a fintech portal in May to help companies navigate the regulatory system and show them where to go for further assistance, said Tracy Basinger, its director of financial institution supervision and credit.
One example of alternative data used by online lender the LendingClub is the internet footprint of a customer. It doesn’t use social media information due to privacy concerns. Rather, the company uses things like a geocode IP address for fraud detection.
Retail giant Overstock.com is to launch its new regulated token exchange with its own initial coin offering (ICO), according to a news report.
The token sale will be the inaugural event for the new exchange, which is set to be the first marketplace specifically for trading tokens classed as securities in the U.S. The service is being launched under the umbrella of Overstock’s capital markets arm, tØ.
The company expects to raise $200 million to $500 million “easily” via the ICO, Byrne said.
This system created a culture of ‘buy now, pay later’, something that came to a grinding halt with the financial crash of 2008. Suddenly, credit was not so easy to come by and the world stopped turning.
Of all disruptions often mentioned in the tech world, the financial crisis was the greatest of them all.
Cash is dying out, digital money and remittances have been completely disrupted and even credit card providers are losing business.
So, step forward, Celsius, an ethereum-member based lending platform that wants to disrupt the consumer credit industry by enabling quick and easy peer-to-peer loans.
These loans will pay higher interest to lenders and charge lower interest to borrowers by splitting the bank profits between the members of the community.
In the US, an astonishing $ 1 trillion, more than 50% of all the consumer credit issued worldwide,is currently controlled by six of the largest US banks. Centralized financial institutions like to offer credit to many of their richest clients – those who have well-established and pristine credit histories, but ignore ‘riskier’ millennials.
In the U.S., $1.1 trillion, one-half of all the consumer credit issued, is currently controlled by six of the largest banks.
Celsius, an ethereum-based lending platform, announces today its plans to disrupt the consumer credit industry by enabling quick and easy peer-to-peer loans, swapping out big banks and their exorbitant fees for colleagues, friends or other Ethereum token holders. Celsius will focus its efforts on supporting millennials, the generation that often suffers the most at the hands of credit lending services—a phenomenon we’ve seen recently with the rise of the student and consumer debt in the U.S. Celsius is building the future of consumer credit by migrating credit scores and legacy data to the blockchain and incentivizing millennials to build a new digital identity and credit score that includes their social and digital footprint. This process encourages the creation of a community of lenders and borrowers with lower loss factors and higher on-time payments, enabling greater credit limits at lower interest rates.
Celsius will hold an ICO for its Degree token in January, but the company just initiated its presale of $30 million from accredited investors. Celsius has added many notable names to its advisory, partner and investor groups including serial entrepreneur Jeff Pulver, co-founder of Vonage and VoIP Pioneer; Chris Dannen, founder and partner of Iterative Capital Management; Ismail Malik, founder of BlockchainLabs; Lou Kerner, top blogger on Medium; and Miko Matsumura, founder of Evercoin.
Celsius offers its users a variety of features, including:
Peer-to-peer lending
Digital credit score: Celsius will issue each user a credit score based on their digital identity and any other user uploaded data including FICO credit scores and past transaction history on websites such as Amazon and eBay.
Global Network
Insuring the credit: Celsius provides insurance so that if the borrower defaults, Celsius covers the portion of the principal loan amount for the lender and is responsible to recover the money owed to the lenders.
Companies that offer personal loans (even enterprise-level banking institutions) charge exorbitant fees, and often require you to ‘sign in blood’ for the loan. In fact, much of the consumer credit market is held by just a few major banking institutions.
Nowhere is this situation more critical than among millennials.
According to a recent article in Forbes, the answer for this system seems to be coming from Blockchain technology.
The marketplace lending industry, particularly in the US, has always sat in a transient grey area between banking and tech firm, providing lending services while also preaching ‘disruption’, as Silicon Valley firms are fond of doing.
While the industry’s image as the ethical and trendy alternative to banking was a great route to publicity in the industry’s infancy, marketplace lending ought to be well enough established for platforms to sell themselves on their core lending business.
Ken Rees, Chief Executive Officer at Elevate, a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, will keynote at the LEND360 conference on October 11, sharing his insights on innovation and the needs of non-prime Americans. Rees will highlight Elevate’s Center for the New Middle Class, its mission, and the company’s commitment to innovating for their customers. His talk will shed light on the realities of being non-prime in America, and help audience members discover new ways to serve this group. Elevate is an online lender that has originated $4.5 billion in credit to more than 1.7 million non-prime consumers.
The mortgage process is speeding up. The study revealed that the median time from early rate shopping to closing on a purchase mortgage declined 7 days from 2016 to 2017.
From 2016 to 2017, LendingTree has seen a 19% increase in the number of loans closed within 30 days and a 27% increase in loans closed in 60 days.
LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation’s leading online loan marketplace, today announced that it will release its fiscal third quarter 2017 results on Thursday, October 26, 2017, and the company will hold a conference call at 9:00am ET.
Conference call
Toll free #: 877-606-1416
707-287-9313 outside the United States/Canada
To listen to a replay of the call
Toll free #: 855-859-2056
404-537-3406 outside the United States/Canada
Replay Passcode: 98763739
Davis & Gilbert partner Joseph Cioffi, a widely-respected authority on loan and securitization markets, has found that credit enhancements supporting subprime auto asset-backed securities (ABS) do not necessarily provide the same level of protection as credit enhancements supporting pre-financial crisis era subprime residential mortgage-backed securities (RMBS), leaving them more vulnerable to market shifts and shocks than many realize.
These observations were made on a newly launched blog, the Credit Chronometer, in which Mr. Cioffi and team will be analyzing economic, market and political events that shape the legal landscape, and impact loan and structured credit markets, including those for auto loans, marketplace lending (peer-to-peer), student loans, mortgage loans and Property Assessed Clean Energy (PACE) financing.
Based on the indicators of crisis that foretold the subprime mortgage crisis – within the areas of lending practices, ABS practices and the underlying market for autos – the Credit Chronometer presents the “Subprime Auto Loan Crisis Chronometer” to depict the risk of a crisis, which Mr. Cioffi defines as a “battle over loss allocation.” As events impact the subprime auto market, the Subprime Auto Loan Crisis Chronometer’s bright yellow gauges will show the current level of risk. As of today, the Subprime Auto Loan Crisis Chronometer is set at:
Splash Financial in Cleveland has focused on relieving the burden of student debt since the company was founded in 2013. But according to founder and CEO Steven Muszynski, it wasn’t until recently the company turned its sights to the medical community.
“We’re an online lender that helps doctors refinance their student loans,” he said. “The majority of people financing their student loans graduate with an average of $200,000 in debt. We’re the only company in the country that allows lenders to pay only $1 a month for trainees.”
The hysteria in Washington around the release of the Consumer Financial Protection Bureau’s final short-term, small-dollar loan rule has been immense as of late. With the final rule issued late last week, it largely lived up to the hype.
The content of a federal rulemaking, while devastating for the payday loan industry, wasn’t all that was at stake. The CFPB’s Director Richard Cordray has long been expected to run for Governor of Ohio once the rule was finalized. With reports flowing in that Cordray plans to make the announcement any day now, the speculation is well-founded.
But the crux of the final rule remains the same. It will force lenders to conduct an “ability to repay” assessment of customers to ensure that borrowers can repay the loans and fees within two weeks, it will cap the amount of times a customer can roll over a loan at three, and it will prevent lenders from charging a customer’s checking account after two unsuccessful attempts.
This makes the impact of the rule devastating. The CFPB’s own impact analysis found that the rule would reduce industry revenue by approximately 75 percent. This is in essence a death warrant to at least three-quarters of the 20,000 payday loan shops that service some 12 million Americans annually.
There are multiple surveys confirming that the users of payday loans widely approve of the option.
Republicans should waste no time in using the Congressional Review Act to overturn this devastating regulation.
The Consumer Financial Protection Bureau (CFPB) published its final rule addressing so-called payday loans as well as certain other extensions of credit to consumers on Thursday. These loans are usually small, very short-term (often just a few weeks) and carry a very high effective interest rate after all fees are taken into account.
The rule applies to three types of “covered short-term loans:”
Short-term loans maturing in 45 days or less
Longer-term (more than 45 days) balloon-payment loans; that is, the loan is paid in full when it comes due or the loan agreement requires at least one substantial down payment of the loan.
Longer-term loans with a cost of credit exceeding 36 percent that either have a balloon-payment feature or the lender is authorized to obtain repayment by initiating a transfer of funds from the borrower’s bank account.
Of course, everyone is not happy about the changes, which won’t take effect until July 2019.
Here are three ways the new payday lending rules will help consumers
Prevent overborrowing: Once a consumer has borrowed three times in a 30-day period, a mandatory 30-day “cooling off period” kicks in. During this time, the consumer won’t be allowed to borrow unless at least a third of the previous outstanding loan has been satisfied.
Mandate income verification: Believe it or not, many payday lenders don’t check to see what a borrower’s monthly income is — they don’t have an incentive to. If you don’t pay up, your collateral — in many cases, your car — will become theirs. With the new rules, lenders must verify the consumer’s net monthly income and the amount of payments required for the consumer’s debt to be paid.
Control payment withdrawals: Gone will be the days when a lender can continue to hit up your zero-balance account, triggering those insufficient funds charges. The new rules state that lenders must provide a written notice before a first attempt to withdraw payments for a loan from a consumer’s account. When two consecutive withdrawal attempts fail, the lender must get permission again from the borrower to attempt another withdrawal from the same account.
Lenders avoided the law’s 28 percent interest rate cap by registering as mortgage lenders or credit-service organizations. That has allowed them to charge an average 591 percent annual interest rate on the short-term loans, watchdogs contend.
According to Pew Charitable Trust, Ohioans who borrow $300 from a payday lender are charged, on average, $680 in interest and fees over a five-month period — the typical payoff for what is supposed to be a two-week loan.
A bill awaiting action in the Ohio House would allow lenders to charge interest rates up to 28 percent plus a monthly 5 percent fee on the first $400 loaned — a $20 maximum rate.
By the CFPB’s own estimates, the regulations will reduce the number of short-term loans in the U.S. by more than half.
Industry estimates project a drop in loan volume that will close the doors of more than 80 percent of short-term lenders in the U.S., most of which are smaller “mom and pop” operations.
A Brief History of Small Banks, DAPs, the CFPB and the OCC
Until around 2013, DAPs were offered as a mainstream banking competitor to payday loans. Their main competitive advantage was twofold: They were faster, and one’s bank could instantly verify those direct deposits. But in 2013, the CFPB released a whitepaper that said DAP loans were so similar to their payday cousins as to have all of the flaws normally associated with such lending products.
The CFPB Has a Change of Heart about DAP
A funny thing happened to the CFPB on its way to publishing those draft regulations on short-term lending: It seems to have had a change of heart about bank-based, short-term lending. In fact, when announcing the short-term lending rules, CFPB executive director Richard Cordray called out a special carve-out for community banks and credit unions, provided they make fewer than 2,500 short-term loans each year and collectively account for less than 10 percent of total lending revenue.
Follow the bouncing regs. The new CFPB rules, released last week, have a carve-out for small banks to pick up some of the short-term lending needs of consumers.
An attorney defending himself against charges he helped operate a $2 billion criminal payday-loan empire told a Manhattan federal jury Tuesday that he viewed tribal involvement in the enterprise as a legitimate legal shield and asserted that he had “panicked” when he faked a signature on a legal document.
In May, when an Australian real estate mogul suggested posited the somewhat insulting theory that millennials aren’t able to buy homes because they’re spending too much on discretionary items like avocado toast, SoFi COO Joanne Bradford tapped into that controversy as a way to connect with the company’s millennial customer base: the online lender offered a month of free avocado toast to everyone who got a mortgage through the company. More than a hundred a media outlets jumped on the story and SoFi had three of its greatest months ever.
CleanCapital announced that Matt Eastwick has joined the company to structure and execute capital markets transactions. As Head of Capital Markets, Eastwick will bring an innovative approach to securing the optimal structures and investors for CleanCapital’s various and growing capital needs. Eastwick’s hire comes after a successful Series A equity raise this past summer, as CleanCapital continues to scale operations, while expanding opportunities for clean energy investing.
Chicago Mayor Rahm Emanuel cut the ribbon at the new OppLoansheadquarters in downtown Chicago this week. OppLoans, the nation’s leading socially responsible online lender, has more than tripled its employee-count in the past two years and expanded their operations in One Prudential Plaza. In 2017, the firm was named the 14th fastest-growing company in Illinois and the 219th nationally.
A growing number of investors are starting to take a closer look at the real estate market as a practical way to help fund their retirement. These retirees are getting into real estate investing through real estate crowdfunding platforms that allow them to pool their money for real-life real estate investments.
Last year, real estate crowdfunding sites topped the $3 billion mark and crowdfunding overall is expected to grow into a$300 billion industry in less than a decade. Fewer than 10% of Americans are accredited investors yet make up 70% of the wealthiest individuals in the U.S. Many retirees qualify as accredited, and we can expect many more crowdfunding sites to embrace the average individual investor by lowering the barrier to entry.
Online lender Zopa is close to finishing building the tech it needs to launch a full bank, according to its CEO.
Janardana said he couldn’t comment on Zopa’s progress in getting fully regulated as a bank but said the shortest time it has taken a new bank to be regulated is around two years, suggesting Zopa is still a way off from launch.
‘We’re in close communication with Monzo, Starling, Tandem’
Janardana, who was speaking to BI at LendIt Europe conference in London, said Zopa is working closely with other startup banks in Britain.
During his presentation at LendIt Europe, Janardana said Zopa’s new bank initially plans to launch savings and credit cards. He said the bank will take a customer-focused approach, shunning 0% balance transfers on credit cards in favour of consistent low rates and rejecting teaser rates on savings accounts.
ZOPA’S chief product officer Andrew Lawson has heralded the move towards open banking as “a really exciting opportunity” that could potentially broaden the peer-to-peer lender’s product offering.
Late last year, Zopa unveiled plans to launch a digital bank that would sit alongside its P2P operations. Lawson re-affirmed that this would enable Zopa to service a wider set of customers with a wider set of products. Revolving credit, credit cards and longer mortgages would not be possible with P2P, he argued.
Speaking at the LendIt Europe conference this morning, Zopa CEO Jaidev Janardana (pictured) issued a stinging critique of the traditional banking model, which he says is set up to “take advantage of customer inertia”. He went further, describing old school banking as a zero-sum game, in which wins for the bank will always be to the detriment of customers, and vice versa.
Mintos marketplace for loans has reached a new milestone – 35 000 registered investors from 64 countries.
About 2 000 new investors join Mintos each month. This has allowed for loans worth more than EUR 325 million to be funded through Mintos in two years since its establishment. More than EUR 200 million has been funded in 2017 alone, making Mints a clear market leader in continental Europe with a 40% market share, according to AltFi Data.
As of September 2017, about EUR 1 million is invested in loans through Mintos daily, which is three times more than just a year ago.
On the supply side of the marketplace, there are 27 loan originators from 13 countries.
Digital micro-lender, Oakam has provided over 420,000 loans totalling over £320 million to consumers overlooked by mainstream financial institutions since 2006. Alternative data is enabling Oakam to employ new methods in underwriting and risk management to expand credit access for financially excluded consumers in the U.K., while maintaining robust lending standards.
Data from FICO shows that 60-75% of traditionally un-scorable consumers could be assigned a more meaningful credit score using alternative data. For Oakam, supplementing traditional methods of underwriting, such as the analysis of credit bureau data with alternative approaches has enabled Oakam to evaluate a high volume of applications since inception.
Oakam’s use of alternative data has also yielded positive repayment behaviour among customers. 70% of new customers made on-time repayments, despite previous challenges accessing credit due to their income levels; court judgements on prior loan defaults; status as a new resident of the UK; the absence of credit history or low credit scores; or some combination thereof. This is according to a study of 15,000 first-time Oakam customers between January 2015 and July 2016.
Oakam uses the following alternative sources for its underwriting:
Network associations: Similar to the use of relationship mapping on LinkedIn, Oakam assesses the connections between borrowers and applicants, based on social network data, geographic proximity, and referrals to study patterns that detect fraud or surface certain risk attributes. Data from Oakam showed that customers who were referred by other customers were 20% less likely to default than customers outside of any network.
Reaction data from nudges: In addition to predicting risk, Oakam uses gamification to influence it. Through its gamified mobile app, customers are financially incentivised to repay their loans. Oakam has seen a 25% improvement in on-time repayment since April 2017 as a result. Gamification also provides access to behavioural data to strengthen Oakam’s future underwriting decisions.
Unstructured data from online conversations: Oakam uses natural language processing and machine learning to analyse the conversations between potential customers and Oakam Digital Agents via its website, and to detect default risk or fraudulent intent.
Funding Circle boss takes shot at RBS’s online lending pilot Esme.
Esme, RBS’s online lending pilot for small businesses, went live in February of this year. 30-year RBS veteran Richard Kerton leads the project. This morning, he told the LendIt audience that Esme could approve and fund business loans in as little as 25 minutes, with broader risk parameters than its parent bank.
Desai dismissed the idea that P2P lenders are overly-reliant on brokers as a “myth”, pointing out that 75 per cent of Funding Circle’s borrowers come directly to the platform, and highlighting the simplicity of the platform as a big part of the reason.
A British “neobank” called Revolut is working on letting its customers convert and hold bitcoin and other cryptocurrencies directly in their accounts.
The firm will let users buy, sell, and hold three cryptocurrencies: bitcoin, litecoin, and ethereum. Users will also be able to transfer cryptocurrencies to other Revolut account holders. The big thing here is Revolut’s promise to allow “instant” conversion of fiat money to cryptocurrencies within its app, potentially removing the currently troublesome process of signing up on crypto exchanges, or peer-to-peer platforms, or going to a bitcoin ATM, to acquire or dispose of funds.
JD Finance, a third-party finance platform in China, recently launched several BaoShang Bank deposit products. The one-year yield of the product is as high as 5%, rising by as much as 230% compared with the benchmark interest rate for Banks.
The product description shows that the maturity of this series including 1 year, 6 months and 3 months, correspond the savings deposit rate of 5 %, 3.5% and 3.3%, and the minimum deposit amount of 50000, 100 and 100 RMB. In terms of security, as deposits, the product series guaranteed income. As for liquidity, it can be taken at any time. In procedures, it can be purchased directly without evaluation.
A number of bank retails said that the deposits on individuals always have been conducted through their own channels, and they have never take deposits through a third party platform. It also reflects that the competition of bank deposit market becomes more and more fierce.
However, JD Finance explained that they just play the role of information display platform for the bank deposit product, rather than commission sale. Both product and service are supplied by the bank itself.
Zhongan Insurance (06060.HK) has been known as The First Stock in Fintech. After three days of rising in a row, its stock price hit a new high of HK $97.8 and closed at HK $90.8 on October 9th. So far, the market value of Zhongan Insurance reached to HK $130.7 billion.
WIND data shows that the stock has risen 52.09% in six trading days since listed, with a turnover rate of 59. 62%, and the interval volume is 2.62 billion shares, the transaction amount reached to 20 billion RMB.
“Now there is no other pure insurance technology company in Hong Kong stock market. The listing of Zhongan Insurance brings the opportunity for investors to participate in the field of insurance technology. In addition to foreign investment in the stock, mainland funds are also very fond of the unit”, a Hong Kong investment analyst said.
CreditEase, a Beijing-based financial technology conglomerate with a robust online platform and a broad offline network, announced it recently hosted a FinTech conference, “2017 Silicon Valley – Beijing Dialogue” themed “The Power of Innovation: Driving Forces behind the FinTech Age 3.0″, in San Francisco.
The city’s ranking in the Global Innovation Index has fallen in the last two years. And this slide has been accompanied by another trend: the rise of China in the table.
With more than 600 million people in China participating in the sharing economy, it’s expected that it will account for 10 per cent of China’s gross domestic product by 2020, according to their State Information Centre.
today at the Lendit Europe gathering of over 1,000 fintech and lending executives in London, creditshelf announced that, according to the study “Industrial SMEs and Financing 4.0”, nine out of ten medium-sized industrial enterprises in Germany would provide lenders with real-time production data to either convince them of the value of making an investment, or to enable them – during the credit term – to check on the performance of a facility already arranged.
Panellists at LendIt Europe on Monday said that there may be more to Europe’s marketplace loan ABS market than meets the eye, with a number of platforms issuing deals under the radar.
Citi’s Sebastian Walf said that the two public ABS deals, which were sold last year from Funding Circle and Zopa, were just the “tip of the iceberg”, with a number of other online lending platforms issuing private securitizations to meet their funding needs.
Trustly, the European payments company, and Nordic software provider Emric, part of Tieto, are delighted to announce a new strategic partnership which will provide Emric’s business customers access to Trustly’s online banking payments technology across Europe.
During the ICO last month, Suretly secured its minimum funding requirements in just a few hours. It raised $2.8m. Before the ICO, the first version of the Suretly app was successfully tested. A beta version of it will be released on the market within several weeks from the ICO. Upon release of the app, the system will already be populated with borrowers.
Suretly is an international project. The company has legally set up in the following initial countries: Russia, Kazakhstan, and the USA.
CFTE is pleased to announce the worldwide release of Around Fintech in 8 Hours. The Fintech foundation course has been designed to give professionals working in the finance industry a solid understanding of how technology is redefining the provision of financial services.
4 senior lecturers and 16 industry experts who are Fintech CEOs, investors and heads of innovation will provide participants with a 360 perspective on Fintech disruption.
16 guest experts such as Rob Frohwein, CEO of Kabbage and Anne Boden, CEO of Starling Bank, will support the lecturers by providing first hand insights into how the structure of the FS industry is being transformed by technology and what this means for professionals.
The Centre for Finance, Technology and Entrepreneurship (CFTE) is launching their first online Fintech course which will open to the public soon. If you are interested, you may enroll here. The course is described as “Around Fintech in Eight Hours.”
The CFTE has partnered with several accelerators including the Supercharger Fintech Accelerator and LATTIC80. Both are based in Asia (Hong Kong & Singapore) with the CFTE operating out of London.
A statement released by ESC says that it is participating at GITEX 2017 to provide Indian IT companies opportunities to exploit the burgeoning Middle East ICT market. It is the largest participation by India, under the Council’s banner.
Meanwhile ESC Chairman Prasad Garapathi said that Indian IT exporters will continue to look into the whole Middle East and MENA region through this important gateway of Dubai.
Export of software and related services to the Middle East has reached $2bn in 2016-17 while India’s total export of electronics hardware during 2016-17 is estimated at $5.685bn.
The Middle East nation is keen to elevate disruptive Indian fintech startups by providing them an international platform and financial support.
The two sides also signed 14 agreements whereby the UAE vowed it would invest $75 billion in India.
The two countries also set a target of 60 percent increase in bilateral trade in the next five years.
Australia-based online lender SocietyOne announced on Tuesday it has secured $350 million in total originations. This news comes less than two months after the lending platform celebrated its fifth birthday. According to SocietyOne, the company topping $350 million as the current loan book also reached $200 million for the first time in the lender’s history.
Pay Later, better known as Afterpay, is an easy-to-use payment process allows shoppers to buy their product today and pay it off in 4 equal fortnightly instalments.
Airwallex was founded in 2015 by a team of entrepreneurs who developed a technology that uses machine learning to determine the most cost-effective way of settling every payment that comes through the platform.
CoinJar provides simple tools to manage digital currencies.
Data Republic was founded to empower the liquidity of data by delivering technology which offers best-practice security, privacy compliance and governance controls for organizations looking to safely exchange data.
Harmoney is NZ’s leading peer-to-peer money marketplace – where everyday people borrow money from (and lend money to) other everyday people. Hence the term ‘peer’ to ‘peer.’
HashChing is Australia’s first online marketplace allowing consumers to access great home loan deals without having to shop around.
identitii allows banks to move away from customer level information to detailed information about each and every transaction.
Prospa is Australia’s online small business lender committed to helping small businesses access the funds they need to grow.
SocietyOne is radically changing the landscape of financial services in Australia. Since our foundation almost five years ago, we have gone from a standing start to providing more than $300 million in loans to customers.
Xero is one of the fastest growing software as a service companies globally.
Bank of Queensland has topped the list as Australia’s worst offender for disputes with home loan customers, according to the financial ombudsman.
It is the fourth year in a row the bank has headed the list, with the number of disputes per 100,000 customers barely improving in the past two years, although the numbers have trended downward since 2014.
For every 100,000 home loan customers, BoQ was involved in 79 disputes during the year. Of those, 40 per cent were resolved by agreement, with 29 per cent in BoQ’s favour, according to the Financial Ombudsman Service.
Home loans accounted for 10 per cent of all disputes FOS accepted in the year, while credit cards accounted for 14 per cent and personal loans 8 per cent.
Ratings agency Crisil has withdrawn proposal to enter into peer-to-peer lending platform business while the government has approved Rs 85.45 crore foreign direct investment (FDI) proposals in September from four companies, the Finance Ministry said on Tuesday.
Crisil’s majority shareholder is international ratings agency Standard and Poor’s, an American corporation.
After the Reserve Bank of India (RBI) released guidelines for entities engaged in peer-to-peer (P2P) lending last week, an association of such entities is planning to ask the central bank to clarify whether institutions will be allowed to lend through P2P platforms.
A top executive with one of the five P2P lending platforms told FE that the industry is unsure of whether ‘participant’ covers only individuals or institutions as well.
BankBazaar is the world’s first neutral online marketplace that helps people compare and choose financial products such as loans, insurance, credit cards, fixed deposits, saving accounts, mutual funds etc., – over a highly secure, user friendly, and intuitive platform.
Capital Float is an online platform that provides working capital finance to SMEs in India.
FreeCharge is India’s No.1 payments app.
Lendingkart Technologies Private Limited is a fin-tech startup in the working capital space.
MobiKwik is India’s largest independent mobile payments network connecting 55 million users with more than 1,500,000 retailers.
Mswipe is India’s largest independent mobile POS merchant acquirer & network provider.
Paytm is India’s largest mobile payments and commerce platform.
Policybazaar is an Indian online life insurance and general insurance comparison portal.
Razorpay aims to revolutionize online payments by providing clean, developer-friendly APIs and hassle-free integration.
Rubique (Rubik + Unique) aims to mine every possibilty to offer a unique solution to our customers’ complex financing problems through advanced technologies and data science.
India Money Mart (IMM), a digital lending marketplace, has launched its app to allow lenders and borrowers to carry out Peer-to-Peer (P2P) lending a week after the RBI released detailed guidelines for this platform.
The app is useful for people seeking alternative sources of funding to meet emergency requirements, not serviced by banks and other traditional lenders, it said.
In Mongolia, where the average monthly income is $390, informal loans between friends or family members are commonplace as credit and small bank loans are hard to get. On the other hand, small informal loans are almost expected to not be paid back.
“There is no leverage system for people to repay, so in the worst case they lose their friends,” says Anar Chinbaatar, 35, CEO of fintech startup AND Global.
His startup, which launched the mobile app LendMN, introduced mobile-based microlending to the North Asian country where borrowers are blacklisted from significant financial services such as mortgages if they default on a small loan from the bank.
After raising $1 million in seed funding in April 2016, the company received another $4 million with a $30.8 million valuation in August from influential backers in Mongolia and Japan including former Japanese parliament member Takami Yuichi, investor Satoshi Matsumoto and his wife Yasuyo Matsumoto. It is also advised by Oko Davaasuren, an influential Mongolian investor from TechStars.
The company, which has issued over $1.9 million in loans as of this month, plans to use the new investment to fuel expansion into the Philippines and Japan and develop new technology such as a blockchain project while preparing for an initial coin offering in December.
Malaysia was the first country to regulate the growing industry to support new ideas by providing a funding mechanism. Its Securities Commission (SC) has approved a total of 12 crowdfunding platforms – six equity-based and six peer-to-peer (P2P) lending – and, though there are strict guidelines for operation, the market is creating new avenues for entrepreneurs.
Growing regulation of the crowdfunding industry is not putting off investors; Malaysia as a whole is one of the least complex jurisdictions in Asia, according to TMF Group’s inaugural Financial Complexity Index.
The ranking of 94 jurisdictions across the world resulted in three top-10 spots for Asia Pacific: Vietnam ranked 5th most complex for compliance, followed by China at 7 and India at 10.
But there was a large chunk of southeast Asia which ranked on the less complex side of the table, including Malaysia (59), the first country in Asia to regulate crowdfunding.
Inspeer, one of the few players to recognize the need for revolutionary technology in the financial services industry has opted to introduce additional utilities backed by cryptocurrencies and their underlying blockchain technology. The platform, designed to use cryptocurrency alongside fiat currency for the purpose of peer to peer lending has announced the launch of its upcoming crowdsale campaign.
With their primary operations located in Russia under the LightFin.ru brand, more than 200,000 loans applications were processed within the first year of platform deployment.
Inspeer’s platform uses loan pipelines and scoring algorithms which consist of the InsCore system and OLAF algorithms. Together, these two components help to effectively execute an assessment of the borrower’s likelihood of repayment as based on more than 20,000 predictors.
Orchard updates Lendscape graphic. AT: We can see a growing number of institutional investors and originating banks, not to mention a push into new areas of lending with expanding categories of originators.”
Top sources of small business financing based on approval rates. AT: “It looks like the year goes to institutional investors and big banks. Credit unions and alternative lenders are in decline. I guess this means you can innovate all you want, money still talks.”
AutoGravity surpasses $1B USD in finance amount requested. AT: “AutoGravity, by far, is doing the most interesting thing in the area of auto finance. This is a huge milestone. Congratulations, with the expectation to see more great achievements from this young startup.”
ID-verification firms capitalize on Equifax’s failure. AT: “This is a natural consequence, and I expect to see more alternative ID verification products hit the market in the coming year. Companies that take their time and do it right have a greater chance at success, long-term.”
OCC Fintech Charter undermines our authority, says NY Department of Financial Services. AT: “The struggle for control over regulation between the states and the federal government continues to heat up. Of course, states have no authority not granted by the Constitution, and that authority is subservient to the federal government in most cases. I suspect the federal government will win this battle, though it will take a few years.”
High net worth individuals would use Amazon for wealth management. AT: “I find this quite interesting. Around the globe, HNWs would use Google, Apple, Facebook, and Amazon (GAFA) for wealth management. This sounds like an invitation for the Big 4 to intro their own robo-advisors. Who knows? It could happen.”
LendingClub (NYSE: LC) has sponsored and contributed to its second securitization deal following the the last successful self sponsored deal this past June. The “Consumer Loan Underlying Bond” (CLUB) Credit Trust 2017-P1 (CLUB 2017-P1) issued $323.1 million in prime notes backed by consumer loan assets originated via the LendingClub platform. This is the sixth securitization supported or sponsored by LendingClub, and the fourth rated securitization of LendingClub facilitated loans overall. LendingClub described the deal as further expanding investor access.
LendingClub reported the transaction was backed by approximately $350 million of collateral and includes $217.3 million of Class A notes rated “A-(sf)”, $51.0 million of Class B notes rated “BBB (sf)” and $54.7 million of Class C notes rated “BB (sf)”.
Orchard Platform, the nexus of loan originators and institutional investing, has updated their ongoing graphical view of the online lending world or “Lendscape”. As the online lending universe has moved from peer to peer lending, to marketplace lending to all forms of online lending, the Lendscape has changed and grown. New lending platforms have been launched, new verticals targeted, and a growing number of ancillary services have joined the space. Orchard points to the addition of lenders like LendingPoint, Liberty Lending, Lendmart, Allegro Credit, UpLift, ArtMoney, Ascend, OppLoans, and Lendistry.
Perhaps the most important shift in online lending is the growing participation by traditional finance firms.
Morningstar Credit Ratings, LLC believes the next iteration of property assessed clean energy securitizations will be in the commercial sector. While securitization of residential PACE assessments tops $3 billion, there have been no public transactions consisting primarily of commercial liens.
Evaluating Property Income Generated to Pay Debts In analyzing the credit risk of transactions backed by commercial assessments, Morningstar considers the debt service coverage ratio, because PACE lending is tied to the property rather than the owner’s creditworthiness.
Evaluating Property Income Generated to Pay Debts
Morningstar evaluates a property’s net operating income in relation to its annual debt-service payments. Among securitized commercial mortgages, the average DSCR is approximately 2.14x, according to Morningstar. C-PACE lenders and aggregators typically require a minimum total DSCR in the 1.00x to 1.15x range. Although, in some cases, the DSCR has dipped below 1.00x, especially if total debtto-value is low when operating expenses are higher than revenue. Factors possibly mitigating a lower DSCR, which include county support, property ownership affiliations within a network, liquidity account and equity position require case-by-case analysis. In addition, DSCR of the lien is more important than the DSCR of the overall debt.
Evaluating Divergent Leverage Metrics
The lien-to-value ratio is another leverage metric that Morningstar analyzes. Although a PACE assessment raises a property’s lien-to-value ratio, the increased risk to the underlying mortgage is likely minimal, as the obligation is usually small in comparison to the mortgage.
It can be more challenging to calculate the lien-to-value ratio for C-PACE levies, because the properties can run the gamut from hotels, farmlands, nursing homes, and gas stations to nonprofit buildings such as churches. Across residential PACE deals, we have seen lien-to-value ratios around 6.7% and combined PACE-lien-plus-mortgage-tovalue ratios at around 62.7%. In C-PACE, lien-to-value ratios hover around 25.0%, not including mortgage debt.
While we scrutinize total debt-to-value, the distribution of leverage offers insight into the financial health of the property. For example, we view a property with a 90% debt-to-value ratio that is composed of an 89% mortgage loan and a 1% PACE assessment more favorably than a property whose debt is composed of an 89% PACE obligation and a 1% mortgage because of higher subordination levels.
Growing Market Size
C-PACE financing has grown to about $482 million as of Sept. 1, encompassing 1,097 commercial projects, according to PACENation. More than 2,500 municipalities have C-PACE programs.
Compared with residential programs, C-PACE is in its infancy, as R-PACE financing totaled about $3.67 billion and R-PACE securitizations totaled around $3.40 billion. A sliver of
commercial assets was included in one of those securitizations, GoodGreen 2016-1, with commercial PACE levies representing approximately 4.8% of the pool’s assets.
According to the latest Biz2Credit Small Business Lending Index™, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Loan approval percentages of institutional investors have continuously reached new heights this year in terms of approval rates. In August Institutional lenders’ loan approval rates in August reached 63.9%.
Alternative lenders’ approval percentages continue to decline; in August the rate dipped to 57.1%. Approval percentages have dropped every month for more than a year.
Approval percentages at small banks rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure. It is conceivable that the number may cross the 50% benchmark.
Big banks improved one-tenth of a percent to 24.6% in August, setting a new high for the Biz2Credit Index, which has tracked loan approvals since January 2011. The number is creeping up to one-in-four. It’s a good time for bank lending.
Loan approval rates at credit unions dipped to 40.3% in August, falling to a new low for this category of lenders on Biz2Credit’s index.
AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, today announced that it has reached $1 billion USD in finance amount requested on the AutoGravity platform. Additionally, AutoGravity has announced the launch of real-time inventory for new and used cars from partner dealership groups across the nation. Car shoppers can browse real vehicle inventory on dealership lots, find the specific car that’s right for them and secure up to four finance offers in minutes on the AutoGravity smartphone app.
More over 750,000 car shoppers have downloaded AutoGravity, collectively requesting over $1 billion USD in financing. These users can now search inventory by car brand and model year – as well as characteristics such as body type, drivetrain and color. Car shoppers can find their desired car waiting for them on the showroom lot for the payment they want. With car selected and offers in hand, users can pick up their car and drive off the lot with the confidence of knowing they have secured a fair deal.
AutoGravity partnered closely with the largest dealer groups in the country to design a seamless process by which dealers can easily load inventory feeds, including vehicle details and pictures, to AutoGravity’s secure platform. Inventory is updated and shown to users in real time.
The Equifax hack, combined with the rise of online lending, may have turned 2017 into a golden age for companies with new ideas for ID.
The software company Mitek plans to roll out a product in the coming year called Mobile Verify for Lending, which offers lenders a five-step process to quickly verify customer identities. Borrowers first share their online bank account information with lenders. They then submit four pictures taken from their smartphones: the front and back of their driver’s licenses, a selfie and a pay stub.
Other players are offering digital lending solutions to make it easier for banks to keep pace with speedy fintech competitors. Upstart, for example, is marketing software, called Powered by Upstart, to banks wanting to get into digital lending.
The U.S. Office of the Comptroller of the Currency’s plan to offer a special-purpose bank charter for financial technology companies “undermines” the Department of Financial Services’ regulatory authority in New York, the state agency argued in court documents.
“The Fintech Charter Decision is an unlawful assertion of power that usurps New York consumer protection laws and would preempt plaintiff’s ability to regulate any number of the over 600 nondepository institutions she currently regulates,” wrote Matthew Levine, the executive deputy superintendent for enforcement at the department.
Stockpile, a brokerage popular with millennials that is pioneering fractional share stock investing, announced today that it has raised $30 million in Series B funding led by Fidelity backed Eight Roads Ventures, with participation by Mayfield, Arbor Ventures, Hanna Ventures, Wang Ventures, and others.
This latest investment brings the total raised by Stockpile to more than $45 million. Mayfield led Stockpile’s $15 millionSeries A in October 2015, with participation by Arbor Ventures, Stanford University, and actor Ashton Kutcher. Stockpile will use the new funds to bring stock investing to more millennial customers and expand its unique features, Lele said.
Chime is raising $18 million in Series B financing for its mobile-first approach to banking. Cathay Innovation led the round with participation from Northwestern Mutual Future Ventures, Crosslink Capital, Forerunner Ventures, Homebrew and others.
It’s a bank account and debit card built for the digital age.
Without monthly fees or overdraft charges, Chime tries to appeal to the millennial generation, touting its affordability and easy-to-use app. Since launching in 2014, Chime has signed up 500,000 customers, who are typically in their late 20s and making between $50,000 and $70,000 per year.
Shinola/Detroit LLC is targeting millennials by adding an option to pay for its watches and other luxury goods in an old-fashioned way: the installment plan.
The average order value for Affirm customers is 70 percent higher than the sitewide average, Kopitz said. And about half of those using the service with Shinola are 18-34 years old, the release said.
Around 1,000 retailers now accept payment through Affirm.
As new as fintech and marketplace lending—once known as “peer to peer lending”—may still seem, Noreika suggested that the online lending fraternity may be moving toward maturity.
Noreika said the sweat that went into those ideas has hit $40 billion in consumer and small business credit, with volumes doubling every year since 2010. He noted that some project that at that rate, marketplace lending will hit $1 trillion by 2025—versus the $3.7 trillion in unsecured consumer lending as of yearend 2016.
Noreika pointed out that marketplace lenders have been seeing cracks in their credit since the fourth quarter of 2015.
“Hardly a day goes by where there isn’t a recording of some scandal or another,” Levitt said. “I think that’s generally true of emerging cultures and emerging standards and cultures. That makes the odds of winning much less than in well established companies with better established cultures.”
His fellow fintech panelists, Sarah Friar, chief financial officer at Square, and Scott Sanborn, CEO of Lending Club, both pointed out that established companies have had their own share of scandals.
Levitt said it’s difficult for startups to attract the kind of quality board members that larger, more mature companies are able to attract.
“Regulators are always playing catch up,” he said. “Regulation today trails the fintech world and often presents impediments and costs that are unnecessary. Regulators are constantly protecting their space so they don’t get caught up in a scandal they’re held accountable for, so there’s a tendency to over-regulate.”
Today, Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, and Senator Cory Booker (D-NJ) introduced the IRS Data Verification Modernization Act of 2017. This bipartisan bill will require the Internal Revenue Service (IRS) to automate the Income Verification Express Services process by creating an Application Programming Interface (API) allowing small businesses and consumers to access accurate credit assessments more efficiently. Joining McHenry as an original cosponsor of H.R. 3860 is Congressman Earl Blumenauer (D, OR-03), a senior member of the House Committee on Ways and Means.
Plug and Play formally announces the startups accepted into their Winter 2017 batches. Plug and Play will run five programs this quarter focused on Health & Wellness, Insurtech, Internet of Things, Mobility, and Travel & Hospitality.
We’re incredibly excited to welcome the newest member of Wunder Capital’s team, Rich Mauro. As Director of Capital Markets, Rich will lead Wunder’s institutional fundraising activities, bolstering our capital stack and helping us scale Wunder’s platform to the next level.
Funding Circle remains a loss-making business (accumulated losses stand at £116.6 million to date) but Desai says it is on a long-term path to profitability.
Funding Circle, however, has remained a firm market leader, and its annual results for 2016 show it continues to do well.
Its losses narrowed 3% from £37 million ($50 million) in 2015 to £36 million ($48 million) in 2016, as revenue grew 59% year-over-year (YoY) from £32 million ($43 million) to £51 million ($68 million), and originations saw a 61% boost from £846 million ($1.1 billion) to £1.4 billion ($1.9 billion).
The £220m Ranger Direct Lending fund could see its dividend pay-out for the second half of 2017 fall to nearly half of that in the first six months of the year, according to a statement by Ranger.
It is expecting NAV returns in H2 2017 to average 0.4 per cent-0.5 per cent per month (c.5-6 per cent pa), and then recover to 0.6 per cent-0.7 per cent per month (c.7 per cent-9 per cent pa) in 2018, assuming the resolution of Princeton this year.
As a result aggregate dividends of c.25p are expected for H2 2017, compared to 46p in H1.
LendInvest, an online marketplace platform for property lending and investing, was named the most valuable tech company at the prestigious Investor Allstars event in London on Wednesday evening.
A “RegTech” — regulation technology — company founded by three Oxford grads all under 30 has raised $30 million (£22.4 million) from investors including Microsoft’s venture capital arm.
Onfido, an identity verification startup, has raised the “Series C” fundraising from Crane Venture Partners, Microsoft Ventures, and Salesforce Ventures, as well as existing investors. It takes the total raised by the London startup to over $60 million.
Onfido’s latest $30 million funding injection follows a $25 million investment last April. Kassai says the latest funding will go towards technology investment and global expansion.
One of the biggest changes in the financial sector in the UK has been the introduction of challenger banks.
Crucially, these banks have not been mired by the many recent scandals and still rely on customer deposits to build their balance sheets. That’s why fledgling banks such as Metro Bank, Aldermore, Tesco Bank and United Bank UK and currently dominating the best buy tables.
Retail banking is the area that has seen the biggest change as a result of the FinTech sector, but that’s not to say there hasn’t also been a significant impact in the commercial banking sector.
A perfect example is Barclay’s mobile payments service Pingit, designed to compete with Apple Pay, while other banks have launched new mobile banking businesses away from their legacy businesses in an attempt to compete in a digital age.
Bringing financial services to small businesses
One example is peer-to-peer lending, a sector that has sprung up from nothing ten years ago to lend a total of £2.9bn in 2016. This is now filling the capital void for many growing businesses and lending at lower rates than many firms would be able to access elsewhere.
SIX new trustees have been appointed to the board of the Finance Innovation Lab.
The new trustees include Caroline Ellis, a social and organisational change consultant who is taking on the role of chair of the board, and Kate Ormiston Smith, director of finance and operations at The B Team, who is taking up the post of treasurer.
The other new members of the board are: Hanna McCloskey, founder and chief executive officer of Fearless Futures; Toyin Ogundana – investment manager at CAF Venturesome; Paul Riseborough – chief commercial officer at Metro Bank and Julian Thompson, social innovation and fundraising strategist.
When considering your initial application for funding, crowdlending platforms will review your business plan, financial information and other details about your company. In other words, the platforms will review your company’s financial information as well as your personal information in much the same way as banks will do before offering you a loan. Therefore, it is imperative to ensure that your business plan is engaging, comprehensive and well thought out.
Investors will usually seek to get more information about you and your business from social networks like Facebook, Twitterand LinkedIn. It will serve you well to ensure that you have an online presence before you seek for funds through crowdlending.
Going by the FundingKnightresearch, most UK investors have a love for the community and would want to give back to some UK SME to ensure its prosperity.
More Chinese fintech firms vying to go public could choose Hong Kong as their listing venue, after the city’s first fintech IPO received a hot response from investors, and that Hong Kong has unique advantages compared with other global financial hubs, said JP Morgan’s head of global investment banking in China.
Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, closed nine per cent up from its IPO price on Thursday in its Hong Kong debut. With an oversubscription of nearly 400 times from retail investors, the company had priced its IPO at the top end of the expected range, raising US$1.5 billion in the city’s biggest ever fintech offering.
“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”
In particular, revenue from online payment is estimated to increase to 202 billion yuan by 2020. Revenue from online distribution of financial products could grow to 52 billion yuan by then, while that for online lending and online insurance may reach 142 billion yuan and 60 billion yuan respectively.
ZhongAn’s IPO will likely make the company the 4th most valuable fintech company in the world with a market cap of about US$10.4 billion, following the top three fintechs, which are Paypal ($78bn), Ant Financial ($68bn) and Lufax ($18bn).
Peter Renton interviewed the CEO of ZhongAn Insurance, Jeffrey Chen, on the Lend Academy Podcast over the summer. Jeffrey said in the interview that ZhongAn has 492 million insurance customers as of December 31, 2016. That is more than four times that of insurance giant AXA’s customer base (107 million, as of December 31, 2016). By this measure, ZhongAn truly is the world’s largest insurance company. And this is just a four-year old company!
Why ZhongAn is So Succesful
For the technology part, ZhongAn has been using artificial intelligence and big data analytics in each step of the insurance value chain, from marketing, underwriting, pricing to claims processing.
Another example is that ZhongAn has partnered with a Chinese automaker to develop internet of things (IoTs) and telematics solutions. Telematics devices can capture drivers’ behavioral data, which can be fed to algorithms using big data techniques to tailor product pricing to observed risk levels.
In ZhongAn’s early days, the revenue generated by shipping return policies accounted for almost 90% of the total revenue. This product would not have been such a success were it not for its partnership with Alibaba. Ant Financial, the financial affiliate of Alibaba, is also the single biggest shareholder (16.04%) of ZhongAn.
Shenzhen Suishou Technology Co. (“Suishou” or the “Company”), a leading personal finance management platform in China, and global investment firm KKR today announced the signing of a definitive agreement under which KKR will invest in Suishou’s Series C funding round to support the Company’s expansion across China.
Emerging peer to peer lender Robo.Cashhas topped €2 million in loans with the advent of the 1000th investor. According to Robo.Cash, investors are spread across most of Europe with lenders now coming from 28 different countries. The short term loans are coming from Spain and Kazakhstan.
The total sum of earned interests has amounted to more than €50,000 since the start of the platform’s work.
Switzerland is one of the major global fintech centers and the industry is booming: Swisscom counted fewer than a hundred fintech startups in 2015, today there are 208 companies active in wealth management, comparative consulting, crypto finance, data management, payment services and lending (see illustration below).
Blurred Dividing Line
And this may also spell the end of fintech as we know it, in Switzerland, and abroad. That’s at least what Armands Broks (pictured below) believes. The founder and CEO of Twino, a peer-to-peer lending platform, thinks that the fine line between finance industry and fintech is about to be blurred and that fintech eventually will disappear.
The only way forward for fintech is through cooperation agreements and in doing so, «the fintech industry is signing its own death sentence,» Broks said.
PWC consultants said that about 60 percent of Swiss banks have links to fintechs. Four out of five banks are eyeing partnerships in the near future or are planning to expand existing ones.
The same year it launched GS Bank, it began building a digital-only consumer loan product, Marcus, that was fully developed and on the market 12 months later. Without having the legacy infrastructure under previously existing consumer products and services, the overhaul other major banks have been experiencing don’t exist for Goldman.
“[The] platform approach has not been an obvious approach on Wall Street. Our competitors are generally structured in deep vertical silos and we have a different architecture: these shallower silos built on top of many layers of software, tech infrastructure, cybersecurity, enterprise platforms and increasingly, client platforms,” Marty Chavez, an engineer and Goldman Sachs CIO-turned-CFO this year, said in a keynote at Harvard University earlier this year.
46 percent of Goldman jobs are in technology
CB Insights analyzed more than 2,000 open Goldman Sachs job listings by division and business unit to confirm it’s focused on building its technology and digital finance units.
Many of the jobs are in digital finance. Earlier this month it reportedly poached 20 employees from New York-based online lending startup Bond Street — engineers, product developers, and risk and marketing specialists — presumably to build out a lending product.
According to the research, published Tuesday, 46 percent of all of the firm’s jobs as of Sept. 14 are in technology, with the highest amount for core platform roles, followed by operations engineering and then equities technology.
Source: Tearsheet
Marcus is expanding in the U.K.
Marcus, the online lending startup built inside the investment bank, has been growing tremendously in the eight months since it launched in October 2016. It has one product: a customizable personal loan for Prime borrowers, with at least a 660 credit score, of up to $30,000. It promises no fees and straightforward repayment terms. It recently passed $1 billion in loan originations with expectations to originate $2 billion by the end of this year. By comparison: SoFi, which launched in 2011, reached its first billion after 14 months; Avant, founded in 2012, took 28 months; 10-year-old Lending Club took 65 months; and Prosper, launched in 2006, passed $1 billion in 98 months.
Goldmoney Inc. (TSX:XAU) (“Goldmoney”) (the “Company”), a precious metal financial service and technology company, today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.
Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.
The majority of high net investors would turn to Google, Apple, Facebook and Amazon for wealth management, Bloomberg writes.
If one of the four tech giants were to enter the advice space, 56.2% of wealthy individuals would entrust them with their money, according to a Capgemini survey of 2,500 individuals with a net worth of $1 million or more in North America, Latin America, Europe and Asia-Pacific cited by the news service. And among people under 40, more than 81% would use one of the four tech firms, according to the survey.
It’s called Study Loans and is said to be the first online platform dedicated to providing loans to students for both vocational and higher education.
Working closely with education providers, the fintech will track student performance and provide funds as you study through ‘tranches’ – which are based on the number of units you do and when they are completed.
Think of tranches as a ‘pay as you go’ kind of deal. So whether you pass one unit or four, Study Loans will release the funds according to your course progression.
Study Loans has raised $5 million debt equity so far, which is ready to be distributed as the first tranche to Aussie students who have already applied through the platform.
Financing options for students:
Student loans –Student personal loans are designed to help fund your education. They often have a more lenient application criteria and have lower interest rates than standard personal loans. But you are expected to make monthly repayments – so you’ll need to make sure your budget can handle the amount.
Peer-to-peer lending
HECS-HELP – This is a Government funded scheme for students enrolled in Commonwealth supported institutions with no real interest charged on the loan. You won’t have to pay your student fees upfront, however, you are expected to make repayments once you start earning a salary of $54,869.
Monefly is an innovative new Fintech platform in Australia, focused on providing tools and resources that empower its members to grow income, reduce expenses, build assets, eliminate debt and protect themselves from risk. Some of these exciting tools include free property valuations, automated budgeting, credit scores, bank account consolidation and much more.
Monefly has partnered with Envestnet | Yodlee to help its members access comprehensive financial data available across banking and wealth management from over 15,500 data sources globally.
The data being integrated into Monefly includes superannuation, cash, credit cards, personal debts, mortgages, assets, shares, real estate, credit scores and other investment data.
MyAdvo, India’s leading Legal Tech Startup has entered into an agreement with Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards to enable loan facilitation for lawyers on its panel.
Square Capital currently facilitates USD 30- 40Mn(INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, loan against property and business loan.
This exclusive tie-up will benefit MyAdvo registered lawyers in receiving immediate loan solutions without any hassle.
Robo-advisers, or automated services based on computer algorithms, are catching on in the Indian market due to the relatively lower penetration of financial products in India compared to developed markets.
According to a Business Insider Intelligence forecast, robo-advisers (with some element of automation) will manage investment products worth $1 trillion by 2020, which will go up to $4.6 trillion by as early as 2022.
Scepticism notwithstanding, financial institutions in the country are realising the benefits of robo-advisory services by either building the product in-house or partnering with fintech companies to develop robo-advisers. Take the case of FundsIndia.com, which has a robo-advisory service for which it is forging partnerships with financial biggies. “We have a partnership with Axis Securities and one more company. There is a growing acceptance from the industry, and we are trying to enable better product design,” said Srikant Meenakshi, co-founder, FundsIndia.com. According to him, 15% of his company’s overall portfolio comprises robo-advisory services. Similarly, 5nance has an agreement with HDFC Mutual Fund for its robo-advisor.
Robo-advisory start-up ArthaYantra uses a patented methodology called the Personal Financial Lifecycle Management on its online platform, Arthos. Since its launch in 2008, the site claims to have helped 120,000 customers across more 650 cities and 30 countries.
Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.
Chia Hock Lai, president of the Singapore Fintech Association, which has broader membership than Access, said some of his organization’s members also experienced account closures, though he didn’t provide figures.
Access has 106 members and the Fintech Association has 185, though the two organizations said some companies belong to both groups.
According to Joseph Huang, president of E.Sun Bank, speaking in an interview with The Asset, payments is one area that every bank is looking to explore, although it does not generate huge profits for most banks.
Banks are also more frequently working with technology companies. E.Sun Bank partnered with IBM Taiwan in building its digital branch, which opened in February 2017, making it the first digital branch in Taiwan. Similarly, CTBC partnered with LINE Pay to help merge its banking services with communication apps and social media.
Taishin Bank’s e-banking application, Richart, which attracted over 120,000 subscribers, is targeting young Taiwanese users, while Cathay United Bank is also providing its products to retail customers through its platform My MobiBank.
Orchard updates Lendscape graphic. AT: We can see a growing number of institutional investors and originating banks, not to mention a push into new areas of lending with expanding categories of originators.”
Top sources of small business financing based on approval rates. AT: “It looks like the year goes to institutional investors and big banks. Credit unions and alternative lenders are in decline. I guess this means you can innovate all you want, money still talks.”
AutoGravity surpasses $1B USD in finance amount requested. AT: “AutoGravity, by far, is doing the most interesting thing in the area of auto finance. This is a huge milestone. Congratulations, with the expectation to see more great achievements from this young startup.”
ID-verification firms capitalize on Equifax’s failure. AT: “This is a natural consequence, and I expect to see more alternative ID verification products hit the market in the coming year. Companies that take their time and do it right have a greater chance at success, long-term.”
OCC Fintech Charter undermines our authority, says NY Department of Financial Services. AT: “The struggle for control over regulation between the states and the federal government continues to heat up. Of course, states have no authority not granted by the Constitution, and that authority is subservient to the federal government in most cases. I suspect the federal government will win this battle, though it will take a few years.”
High net worth individuals would use Amazon for wealth management. AT: “I find this quite interesting. Around the globe, HNWs would use Google, Apple, Facebook, and Amazon (GAFA) for wealth management. This sounds like an invitation for the Big 4 to intro their own robo-advisors. Who knows? It could happen.”
LendingClub (NYSE: LC) has sponsored and contributed to its second securitization deal following the the last successful self sponsored deal this past June. The “Consumer Loan Underlying Bond” (CLUB) Credit Trust 2017-P1 (CLUB 2017-P1) issued $323.1 million in prime notes backed by consumer loan assets originated via the LendingClub platform. This is the sixth securitization supported or sponsored by LendingClub, and the fourth rated securitization of LendingClub facilitated loans overall. LendingClub described the deal as further expanding investor access.
LendingClub reported the transaction was backed by approximately $350 million of collateral and includes $217.3 million of Class A notes rated “A-(sf)”, $51.0 million of Class B notes rated “BBB (sf)” and $54.7 million of Class C notes rated “BB (sf)”.
Orchard Platform, the nexus of loan originators and institutional investing, has updated their ongoing graphical view of the online lending world or “Lendscape”. As the online lending universe has moved from peer to peer lending, to marketplace lending to all forms of online lending, the Lendscape has changed and grown. New lending platforms have been launched, new verticals targeted, and a growing number of ancillary services have joined the space. Orchard points to the addition of lenders like LendingPoint, Liberty Lending, Lendmart, Allegro Credit, UpLift, ArtMoney, Ascend, OppLoans, and Lendistry.
Perhaps the most important shift in online lending is the growing participation by traditional finance firms.
Morningstar Credit Ratings, LLC believes the next iteration of property assessed clean energy securitizations will be in the commercial sector. While securitization of residential PACE assessments tops $3 billion, there have been no public transactions consisting primarily of commercial liens.
Evaluating Property Income Generated to Pay Debts In analyzing the credit risk of transactions backed by commercial assessments, Morningstar considers the debt service coverage ratio, because PACE lending is tied to the property rather than the owner’s creditworthiness.
Evaluating Property Income Generated to Pay Debts
Morningstar evaluates a property’s net operating income in relation to its annual debt-service payments. Among securitized commercial mortgages, the average DSCR is approximately 2.14x, according to Morningstar. C-PACE lenders and aggregators typically require a minimum total DSCR in the 1.00x to 1.15x range. Although, in some cases, the DSCR has dipped below 1.00x, especially if total debtto-value is low when operating expenses are higher than revenue. Factors possibly mitigating a lower DSCR, which include county support, property ownership affiliations within a network, liquidity account and equity position require case-by-case analysis. In addition, DSCR of the lien is more important than the DSCR of the overall debt.
Evaluating Divergent Leverage Metrics
The lien-to-value ratio is another leverage metric that Morningstar analyzes. Although a PACE assessment raises a property’s lien-to-value ratio, the increased risk to the underlying mortgage is likely minimal, as the obligation is usually small in comparison to the mortgage.
It can be more challenging to calculate the lien-to-value ratio for C-PACE levies, because the properties can run the gamut from hotels, farmlands, nursing homes, and gas stations to nonprofit buildings such as churches. Across residential PACE deals, we have seen lien-to-value ratios around 6.7% and combined PACE-lien-plus-mortgage-tovalue ratios at around 62.7%. In C-PACE, lien-to-value ratios hover around 25.0%, not including mortgage debt.
While we scrutinize total debt-to-value, the distribution of leverage offers insight into the financial health of the property. For example, we view a property with a 90% debt-to-value ratio that is composed of an 89% mortgage loan and a 1% PACE assessment more favorably than a property whose debt is composed of an 89% PACE obligation and a 1% mortgage because of higher subordination levels.
Growing Market Size
C-PACE financing has grown to about $482 million as of Sept. 1, encompassing 1,097 commercial projects, according to PACENation. More than 2,500 municipalities have C-PACE programs.
Compared with residential programs, C-PACE is in its infancy, as R-PACE financing totaled about $3.67 billion and R-PACE securitizations totaled around $3.40 billion. A sliver of
commercial assets was included in one of those securitizations, GoodGreen 2016-1, with commercial PACE levies representing approximately 4.8% of the pool’s assets.
According to the latest Biz2Credit Small Business Lending Index™, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Loan approval percentages of institutional investors have continuously reached new heights this year in terms of approval rates. In August Institutional lenders’ loan approval rates in August reached 63.9%.
Alternative lenders’ approval percentages continue to decline; in August the rate dipped to 57.1%. Approval percentages have dropped every month for more than a year.
Approval percentages at small banks rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure. It is conceivable that the number may cross the 50% benchmark.
Big banks improved one-tenth of a percent to 24.6% in August, setting a new high for the Biz2Credit Index, which has tracked loan approvals since January 2011. The number is creeping up to one-in-four. It’s a good time for bank lending.
Loan approval rates at credit unions dipped to 40.3% in August, falling to a new low for this category of lenders on Biz2Credit’s index.
AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, today announced that it has reached $1 billion USD in finance amount requested on the AutoGravity platform. Additionally, AutoGravity has announced the launch of real-time inventory for new and used cars from partner dealership groups across the nation. Car shoppers can browse real vehicle inventory on dealership lots, find the specific car that’s right for them and secure up to four finance offers in minutes on the AutoGravity smartphone app.
More over 750,000 car shoppers have downloaded AutoGravity, collectively requesting over $1 billion USD in financing. These users can now search inventory by car brand and model year – as well as characteristics such as body type, drivetrain and color. Car shoppers can find their desired car waiting for them on the showroom lot for the payment they want. With car selected and offers in hand, users can pick up their car and drive off the lot with the confidence of knowing they have secured a fair deal.
AutoGravity partnered closely with the largest dealer groups in the country to design a seamless process by which dealers can easily load inventory feeds, including vehicle details and pictures, to AutoGravity’s secure platform. Inventory is updated and shown to users in real time.
The Equifax hack, combined with the rise of online lending, may have turned 2017 into a golden age for companies with new ideas for ID.
The software company Mitek plans to roll out a product in the coming year called Mobile Verify for Lending, which offers lenders a five-step process to quickly verify customer identities. Borrowers first share their online bank account information with lenders. They then submit four pictures taken from their smartphones: the front and back of their driver’s licenses, a selfie and a pay stub.
Other players are offering digital lending solutions to make it easier for banks to keep pace with speedy fintech competitors. Upstart, for example, is marketing software, called Powered by Upstart, to banks wanting to get into digital lending.
The U.S. Office of the Comptroller of the Currency’s plan to offer a special-purpose bank charter for financial technology companies “undermines” the Department of Financial Services’ regulatory authority in New York, the state agency argued in court documents.
“The Fintech Charter Decision is an unlawful assertion of power that usurps New York consumer protection laws and would preempt plaintiff’s ability to regulate any number of the over 600 nondepository institutions she currently regulates,” wrote Matthew Levine, the executive deputy superintendent for enforcement at the department.
Stockpile, a brokerage popular with millennials that is pioneering fractional share stock investing, announced today that it has raised $30 million in Series B funding led by Fidelity backed Eight Roads Ventures, with participation by Mayfield, Arbor Ventures, Hanna Ventures, Wang Ventures, and others.
This latest investment brings the total raised by Stockpile to more than $45 million. Mayfield led Stockpile’s $15 millionSeries A in October 2015, with participation by Arbor Ventures, Stanford University, and actor Ashton Kutcher. Stockpile will use the new funds to bring stock investing to more millennial customers and expand its unique features, Lele said.
Chime is raising $18 million in Series B financing for its mobile-first approach to banking. Cathay Innovation led the round with participation from Northwestern Mutual Future Ventures, Crosslink Capital, Forerunner Ventures, Homebrew and others.
It’s a bank account and debit card built for the digital age.
Without monthly fees or overdraft charges, Chime tries to appeal to the millennial generation, touting its affordability and easy-to-use app. Since launching in 2014, Chime has signed up 500,000 customers, who are typically in their late 20s and making between $50,000 and $70,000 per year.
Shinola/Detroit LLC is targeting millennials by adding an option to pay for its watches and other luxury goods in an old-fashioned way: the installment plan.
The average order value for Affirm customers is 70 percent higher than the sitewide average, Kopitz said. And about half of those using the service with Shinola are 18-34 years old, the release said.
Around 1,000 retailers now accept payment through Affirm.
As new as fintech and marketplace lending—once known as “peer to peer lending”—may still seem, Noreika suggested that the online lending fraternity may be moving toward maturity.
Noreika said the sweat that went into those ideas has hit $40 billion in consumer and small business credit, with volumes doubling every year since 2010. He noted that some project that at that rate, marketplace lending will hit $1 trillion by 2025—versus the $3.7 trillion in unsecured consumer lending as of yearend 2016.
Noreika pointed out that marketplace lenders have been seeing cracks in their credit since the fourth quarter of 2015.
“Hardly a day goes by where there isn’t a recording of some scandal or another,” Levitt said. “I think that’s generally true of emerging cultures and emerging standards and cultures. That makes the odds of winning much less than in well established companies with better established cultures.”
His fellow fintech panelists, Sarah Friar, chief financial officer at Square, and Scott Sanborn, CEO of Lending Club, both pointed out that established companies have had their own share of scandals.
Levitt said it’s difficult for startups to attract the kind of quality board members that larger, more mature companies are able to attract.
“Regulators are always playing catch up,” he said. “Regulation today trails the fintech world and often presents impediments and costs that are unnecessary. Regulators are constantly protecting their space so they don’t get caught up in a scandal they’re held accountable for, so there’s a tendency to over-regulate.”
Today, Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, and Senator Cory Booker (D-NJ) introduced the IRS Data Verification Modernization Act of 2017. This bipartisan bill will require the Internal Revenue Service (IRS) to automate the Income Verification Express Services process by creating an Application Programming Interface (API) allowing small businesses and consumers to access accurate credit assessments more efficiently. Joining McHenry as an original cosponsor of H.R. 3860 is Congressman Earl Blumenauer (D, OR-03), a senior member of the House Committee on Ways and Means.
Plug and Play formally announces the startups accepted into their Winter 2017 batches. Plug and Play will run five programs this quarter focused on Health & Wellness, Insurtech, Internet of Things, Mobility, and Travel & Hospitality.
We’re incredibly excited to welcome the newest member of Wunder Capital’s team, Rich Mauro. As Director of Capital Markets, Rich will lead Wunder’s institutional fundraising activities, bolstering our capital stack and helping us scale Wunder’s platform to the next level.
Funding Circle remains a loss-making business (accumulated losses stand at £116.6 million to date) but Desai says it is on a long-term path to profitability.
Funding Circle, however, has remained a firm market leader, and its annual results for 2016 show it continues to do well.
Its losses narrowed 3% from £37 million ($50 million) in 2015 to £36 million ($48 million) in 2016, as revenue grew 59% year-over-year (YoY) from £32 million ($43 million) to £51 million ($68 million), and originations saw a 61% boost from £846 million ($1.1 billion) to £1.4 billion ($1.9 billion).
The £220m Ranger Direct Lending fund could see its dividend pay-out for the second half of 2017 fall to nearly half of that in the first six months of the year, according to a statement by Ranger.
It is expecting NAV returns in H2 2017 to average 0.4 per cent-0.5 per cent per month (c.5-6 per cent pa), and then recover to 0.6 per cent-0.7 per cent per month (c.7 per cent-9 per cent pa) in 2018, assuming the resolution of Princeton this year.
As a result aggregate dividends of c.25p are expected for H2 2017, compared to 46p in H1.
LendInvest, an online marketplace platform for property lending and investing, was named the most valuable tech company at the prestigious Investor Allstars event in London on Wednesday evening.
A “RegTech” — regulation technology — company founded by three Oxford grads all under 30 has raised $30 million (£22.4 million) from investors including Microsoft’s venture capital arm.
Onfido, an identity verification startup, has raised the “Series C” fundraising from Crane Venture Partners, Microsoft Ventures, and Salesforce Ventures, as well as existing investors. It takes the total raised by the London startup to over $60 million.
Onfido’s latest $30 million funding injection follows a $25 million investment last April. Kassai says the latest funding will go towards technology investment and global expansion.
One of the biggest changes in the financial sector in the UK has been the introduction of challenger banks.
Crucially, these banks have not been mired by the many recent scandals and still rely on customer deposits to build their balance sheets. That’s why fledgling banks such as Metro Bank, Aldermore, Tesco Bank and United Bank UK and currently dominating the best buy tables.
Retail banking is the area that has seen the biggest change as a result of the FinTech sector, but that’s not to say there hasn’t also been a significant impact in the commercial banking sector.
A perfect example is Barclay’s mobile payments service Pingit, designed to compete with Apple Pay, while other banks have launched new mobile banking businesses away from their legacy businesses in an attempt to compete in a digital age.
Bringing financial services to small businesses
One example is peer-to-peer lending, a sector that has sprung up from nothing ten years ago to lend a total of £2.9bn in 2016. This is now filling the capital void for many growing businesses and lending at lower rates than many firms would be able to access elsewhere.
SIX new trustees have been appointed to the board of the Finance Innovation Lab.
The new trustees include Caroline Ellis, a social and organisational change consultant who is taking on the role of chair of the board, and Kate Ormiston Smith, director of finance and operations at The B Team, who is taking up the post of treasurer.
The other new members of the board are: Hanna McCloskey, founder and chief executive officer of Fearless Futures; Toyin Ogundana – investment manager at CAF Venturesome; Paul Riseborough – chief commercial officer at Metro Bank and Julian Thompson, social innovation and fundraising strategist.
When considering your initial application for funding, crowdlending platforms will review your business plan, financial information and other details about your company. In other words, the platforms will review your company’s financial information as well as your personal information in much the same way as banks will do before offering you a loan. Therefore, it is imperative to ensure that your business plan is engaging, comprehensive and well thought out.
Investors will usually seek to get more information about you and your business from social networks like Facebook, Twitterand LinkedIn. It will serve you well to ensure that you have an online presence before you seek for funds through crowdlending.
Going by the FundingKnightresearch, most UK investors have a love for the community and would want to give back to some UK SME to ensure its prosperity.
More Chinese fintech firms vying to go public could choose Hong Kong as their listing venue, after the city’s first fintech IPO received a hot response from investors, and that Hong Kong has unique advantages compared with other global financial hubs, said JP Morgan’s head of global investment banking in China.
Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, closed nine per cent up from its IPO price on Thursday in its Hong Kong debut. With an oversubscription of nearly 400 times from retail investors, the company had priced its IPO at the top end of the expected range, raising US$1.5 billion in the city’s biggest ever fintech offering.
“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”
In particular, revenue from online payment is estimated to increase to 202 billion yuan by 2020. Revenue from online distribution of financial products could grow to 52 billion yuan by then, while that for online lending and online insurance may reach 142 billion yuan and 60 billion yuan respectively.
ZhongAn’s IPO will likely make the company the 4th most valuable fintech company in the world with a market cap of about US$10.4 billion, following the top three fintechs, which are Paypal ($78bn), Ant Financial ($68bn) and Lufax ($18bn).
Peter Renton interviewed the CEO of ZhongAn Insurance, Jeffrey Chen, on the Lend Academy Podcast over the summer. Jeffrey said in the interview that ZhongAn has 492 million insurance customers as of December 31, 2016. That is more than four times that of insurance giant AXA’s customer base (107 million, as of December 31, 2016). By this measure, ZhongAn truly is the world’s largest insurance company. And this is just a four-year old company!
Why ZhongAn is So Succesful
For the technology part, ZhongAn has been using artificial intelligence and big data analytics in each step of the insurance value chain, from marketing, underwriting, pricing to claims processing.
Another example is that ZhongAn has partnered with a Chinese automaker to develop internet of things (IoTs) and telematics solutions. Telematics devices can capture drivers’ behavioral data, which can be fed to algorithms using big data techniques to tailor product pricing to observed risk levels.
In ZhongAn’s early days, the revenue generated by shipping return policies accounted for almost 90% of the total revenue. This product would not have been such a success were it not for its partnership with Alibaba. Ant Financial, the financial affiliate of Alibaba, is also the single biggest shareholder (16.04%) of ZhongAn.
Shenzhen Suishou Technology Co. (“Suishou” or the “Company”), a leading personal finance management platform in China, and global investment firm KKR today announced the signing of a definitive agreement under which KKR will invest in Suishou’s Series C funding round to support the Company’s expansion across China.
Emerging peer to peer lender Robo.Cashhas topped €2 million in loans with the advent of the 1000th investor. According to Robo.Cash, investors are spread across most of Europe with lenders now coming from 28 different countries. The short term loans are coming from Spain and Kazakhstan.
The total sum of earned interests has amounted to more than €50,000 since the start of the platform’s work.
Switzerland is one of the major global fintech centers and the industry is booming: Swisscom counted fewer than a hundred fintech startups in 2015, today there are 208 companies active in wealth management, comparative consulting, crypto finance, data management, payment services and lending (see illustration below).
Blurred Dividing Line
And this may also spell the end of fintech as we know it, in Switzerland, and abroad. That’s at least what Armands Broks (pictured below) believes. The founder and CEO of Twino, a peer-to-peer lending platform, thinks that the fine line between finance industry and fintech is about to be blurred and that fintech eventually will disappear.
The only way forward for fintech is through cooperation agreements and in doing so, «the fintech industry is signing its own death sentence,» Broks said.
PWC consultants said that about 60 percent of Swiss banks have links to fintechs. Four out of five banks are eyeing partnerships in the near future or are planning to expand existing ones.
The same year it launched GS Bank, it began building a digital-only consumer loan product, Marcus, that was fully developed and on the market 12 months later. Without having the legacy infrastructure under previously existing consumer products and services, the overhaul other major banks have been experiencing don’t exist for Goldman.
“[The] platform approach has not been an obvious approach on Wall Street. Our competitors are generally structured in deep vertical silos and we have a different architecture: these shallower silos built on top of many layers of software, tech infrastructure, cybersecurity, enterprise platforms and increasingly, client platforms,” Marty Chavez, an engineer and Goldman Sachs CIO-turned-CFO this year, said in a keynote at Harvard University earlier this year.
46 percent of Goldman jobs are in technology
CB Insights analyzed more than 2,000 open Goldman Sachs job listings by division and business unit to confirm it’s focused on building its technology and digital finance units.
Many of the jobs are in digital finance. Earlier this month it reportedly poached 20 employees from New York-based online lending startup Bond Street — engineers, product developers, and risk and marketing specialists — presumably to build out a lending product.
According to the research, published Tuesday, 46 percent of all of the firm’s jobs as of Sept. 14 are in technology, with the highest amount for core platform roles, followed by operations engineering and then equities technology.
Source: Tearsheet
Marcus is expanding in the U.K.
Marcus, the online lending startup built inside the investment bank, has been growing tremendously in the eight months since it launched in October 2016. It has one product: a customizable personal loan for Prime borrowers, with at least a 660 credit score, of up to $30,000. It promises no fees and straightforward repayment terms. It recently passed $1 billion in loan originations with expectations to originate $2 billion by the end of this year. By comparison: SoFi, which launched in 2011, reached its first billion after 14 months; Avant, founded in 2012, took 28 months; 10-year-old Lending Club took 65 months; and Prosper, launched in 2006, passed $1 billion in 98 months.
Goldmoney Inc. (TSX:XAU) (“Goldmoney”) (the “Company”), a precious metal financial service and technology company, today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.
Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.
The majority of high net investors would turn to Google, Apple, Facebook and Amazon for wealth management, Bloomberg writes.
If one of the four tech giants were to enter the advice space, 56.2% of wealthy individuals would entrust them with their money, according to a Capgemini survey of 2,500 individuals with a net worth of $1 million or more in North America, Latin America, Europe and Asia-Pacific cited by the news service. And among people under 40, more than 81% would use one of the four tech firms, according to the survey.
It’s called Study Loans and is said to be the first online platform dedicated to providing loans to students for both vocational and higher education.
Working closely with education providers, the fintech will track student performance and provide funds as you study through ‘tranches’ – which are based on the number of units you do and when they are completed.
Think of tranches as a ‘pay as you go’ kind of deal. So whether you pass one unit or four, Study Loans will release the funds according to your course progression.
Study Loans has raised $5 million debt equity so far, which is ready to be distributed as the first tranche to Aussie students who have already applied through the platform.
Financing options for students:
Student loans –Student personal loans are designed to help fund your education. They often have a more lenient application criteria and have lower interest rates than standard personal loans. But you are expected to make monthly repayments – so you’ll need to make sure your budget can handle the amount.
Peer-to-peer lending
HECS-HELP – This is a Government funded scheme for students enrolled in Commonwealth supported institutions with no real interest charged on the loan. You won’t have to pay your student fees upfront, however, you are expected to make repayments once you start earning a salary of $54,869.
Monefly is an innovative new Fintech platform in Australia, focused on providing tools and resources that empower its members to grow income, reduce expenses, build assets, eliminate debt and protect themselves from risk. Some of these exciting tools include free property valuations, automated budgeting, credit scores, bank account consolidation and much more.
Monefly has partnered with Envestnet | Yodlee to help its members access comprehensive financial data available across banking and wealth management from over 15,500 data sources globally.
The data being integrated into Monefly includes superannuation, cash, credit cards, personal debts, mortgages, assets, shares, real estate, credit scores and other investment data.
MyAdvo, India’s leading Legal Tech Startup has entered into an agreement with Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards to enable loan facilitation for lawyers on its panel.
Square Capital currently facilitates USD 30- 40Mn(INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, loan against property and business loan.
This exclusive tie-up will benefit MyAdvo registered lawyers in receiving immediate loan solutions without any hassle.
Robo-advisers, or automated services based on computer algorithms, are catching on in the Indian market due to the relatively lower penetration of financial products in India compared to developed markets.
According to a Business Insider Intelligence forecast, robo-advisers (with some element of automation) will manage investment products worth $1 trillion by 2020, which will go up to $4.6 trillion by as early as 2022.
Scepticism notwithstanding, financial institutions in the country are realising the benefits of robo-advisory services by either building the product in-house or partnering with fintech companies to develop robo-advisers. Take the case of FundsIndia.com, which has a robo-advisory service for which it is forging partnerships with financial biggies. “We have a partnership with Axis Securities and one more company. There is a growing acceptance from the industry, and we are trying to enable better product design,” said Srikant Meenakshi, co-founder, FundsIndia.com. According to him, 15% of his company’s overall portfolio comprises robo-advisory services. Similarly, 5nance has an agreement with HDFC Mutual Fund for its robo-advisor.
Robo-advisory start-up ArthaYantra uses a patented methodology called the Personal Financial Lifecycle Management on its online platform, Arthos. Since its launch in 2008, the site claims to have helped 120,000 customers across more 650 cities and 30 countries.
Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.
Chia Hock Lai, president of the Singapore Fintech Association, which has broader membership than Access, said some of his organization’s members also experienced account closures, though he didn’t provide figures.
Access has 106 members and the Fintech Association has 185, though the two organizations said some companies belong to both groups.
According to Joseph Huang, president of E.Sun Bank, speaking in an interview with The Asset, payments is one area that every bank is looking to explore, although it does not generate huge profits for most banks.
Banks are also more frequently working with technology companies. E.Sun Bank partnered with IBM Taiwan in building its digital branch, which opened in February 2017, making it the first digital branch in Taiwan. Similarly, CTBC partnered with LINE Pay to help merge its banking services with communication apps and social media.
Taishin Bank’s e-banking application, Richart, which attracted over 120,000 subscribers, is targeting young Taiwanese users, while Cathay United Bank is also providing its products to retail customers through its platform My MobiBank.
News Comments Today’s main news: PayPal likely to buy big target like Square or Klarna soon. LendingTree acquires non-lending assets of SnapCap. Funding Circle boost revenues, narrows losses. ZhongAn raises $1.5B in Hong Kong IPO. Funding Societies intros first crowdfunding chatbot in Southeast Asia. Today’s main analysis: Hong Kong private wealth sees double-digit growth. Today’s thought-provoking articles: The next […]
PayPal could be eyeing acquisition target. AT: “PayPal has been on a buying spree, most likely to boost its portfolio earnings and to enlarge its lending footprint. Targeting a company like Square, Klarna, or Stripe would do both and make the company stronger in the long run. I can see this happening.”
The next billion-dollar startups. AT: “It’s fun to predict who the next unicorns will be. Forbes narrows the list to 25, three of which are tech companies in the alt lending space. If the Plaid prediction is correct, one of whose chief investors is Goldman Sachs, then we are likely to see a lot more bank-fintech partnerships. This will likely happen anyway, but a breakout success of tech companies focused on that union would accelerate the partnerships.”
Shinola partner with Affirm. AT: “If it isn’t Affirm, it’s Klarna. We are seeing these announcements more and more frequently. How long will it be before non-credit card POS financing is the norm rather than the exception?”
Cash-rich PayPal Holdings (PYPL) is likely to pull the trigger on a big acquisition soon, and may be eyeing Europe or a big target like Square (SQ), says a Wall Street analyst.
Ellis says PayPal has $6 billion in cash on its balance sheet and could raise $4 billion or more by selling off its consumer credit business.
“While there are a number of potential candidates, we see the acquisition of a European payments asset as the most likely,” added Ellis in the report. “We believe the top candidates are Adyen, Klarna, Square and Stripe.”
Both Square and Stripe, however, would be costly acquisitions. Square’s market valuation tops $10 billion, while privately-held Stripe’s latest funding round in December gave it a whopping $9.2 billion valuation.
LendingTree, Inc. (NASDAQ: TREE) announced today that it has acquired certain assets of Snap Capital LLC, a tech-enabled online platform connecting business owners with lenders offering small business loans, lines of credit and merchant cash advance products through a concierge-based sales approach.
The acquisition purchase has a possible total consideration of $21 million, which consists of $12 million in cash at closing, and contingent consideration payments of up to $9 million.
Every year for the past three, Forbes has gone looking for 25 young U.S. companies with a strong shot at reaching a valuation of $1 billion or more. This year, with the help of TrueBridge Capital Partners, we asked venture firms which companies they thought most likely to hit the billion-dollar mark soon. Then we cut that list down to a final 25, evaluating strategies, funding and competitive challenges as well as estimating current revenues.
What it does: Makes cloud-based software that lenders use to originate mortgages online. Today, Blend works with about 30 mortgage originators, including Wells Fargo, U.S. Bancorp and Mason-McDuffie Mortgage. It also plans expansions into student and auto loans.
Fundbox
Founders: Yuval Ariav, Tomer Michaeli, Eyal Shinar (CEO); Equity raised: $108 million; Estimated 2017 revenue: $55 million; Lead investors: General Catalyst, Khosla Ventures, Spark Capital
What it does: Provides short-term financing to small businesses. Fundbox intends to reduce the cash-flow headaches of small companies, both those waiting for payment and those that need short-term credit to pay what they owe. Fundbox started as an invoice-financing company, lending money to small businesses against their accounts receivables at rates lower than those for cash advances and without prepayment penalties. Its new model, expected to launch in 2018, is meant to work like a credit card for business-to-business transactions. A company that owes money has Fundbox pay the invoice. The company that is owed gets its cash immediately (minus a small interchange fee). Meanwhile, the first company has 60 days to repay Fundbox before being charged interest. With U.S. businesses doing some $41 trillion in business-to-business transactions a year, the potential market is enormous, but setting up such a network is hard.
Plaid
Founders: William Hockey, Zach Perret (CEO); Equity raised: $60 million; Estimated 2017 revenue: $40 million; Lead investors: Goldman Sachs, New Enterprise Associates, Spark Capital
What it does: Makes software that helps technology startups and banks work together. Plaid’s products provide authentication of accounts and routing numbers, income validation and real-time balance checks. Among its customers: Venmo, Robinhood, Coinbase and Clarity Money.
Affirm, Inc., the company started by Max Levchin to provide fair and honest consumer financing, today announced that Detroit-based design brand, Shinola, is using Affirm’s point of sale service to put customers first in an era when a merchant’s values often outstrip price for shoppers’ making a buying decision — especially among millennials.
Known for its dedication to thoughtful manufacturing by creating jobs and making watches, bicycles, leather goods, journals, jewelry, and audio equipment of the highest quality, Shinola is obsessive about customer experience to ensure a high-touch shopping experience that accurately matches the finely crafted watches, bicycles, jewelry, bags, accessories and gifts for sale on its website.
Since Shinola began offering Affirm’s financing to its shoppers, the company’s average order value (AOV) has increased by 52 percent. Also, 50 percent of the Affirm users on Shinola’s site are now between the ages of 18 and 34, a market Shinola has been working to grow.
Nearly 90 percent of marketers said customer experience would be their primary differentiator this year, according to a recent study by research and advisory firm Gartner, Inc. And, the majority of respondents — 55 percent — in a recent survey conducted by Affirm and Qualtrics of more than 1,000 22 to 44-year-olds in the U.S. said they prioritize a company with high values and ethical business practices, over minimizing their out-of-pocket costs.
Jason Burian: The number of closed-end private real estate funds in the market raising capital over the past three years:
January 2015 – 478
January 2016 – 492
January 2017 – 525 (record high)
Closed-end private real estate dry powder over the past three years:
December 2015 – $229 billion
December 2016 – $237 billion
July 2017 – $255 billion (record high)
CPE: Is the real estate crowdfunding industry a solution? What are the risks?
Burian: I see real estate crowdfunding as an alternative to traditional private equity real estate and an alternative source of investors and not as a solution to any problem. As we know, it is just an avenue for every day individual investors seeking exposure in their portfolios to real estate without acquiring shares of REIT’s.
Government regulation is always a risk for this relatively new industry sector. There are questions about the amount of government regulation and whether there is enough to make it a safe playing field. Until crowdfunding matures, with the proper level of regulation, there is always a risk that someone is taking advantage of that gap that currently may exist.
A new survey has concluded that then it comes to researching mortgages, Millennials prefer the D.I.Y. aspect of the online world, while Baby Boomers prefer to communicate with people.
According to the survey, “The Digital Mortgage Experience: A Study of Shifting Borrower Expectations,” from Los Angeles-based Velocify, more than one-third of all borrowers prefer self-service websites, especially during the research stage of getting a mortgage. But as the process evolves, demographic shifts occur. The survey found Millennials were 45 percent more likely to find their lender online than Baby Boomers, who were 87 percent more likely to use their current bank or lender for their home loans.
Boost Insurance USA, a NY-based technology-enabled insurtech development platform provider, raised $3m in funding.
The round was led by Norwest Venture Partners with participation from IA Capital Group, Greycroft Partners, and re/insurance industry leaders State National Companies (NASDAQ: SNC) and Nephila.
DATA SOURCE: TD AMERITRADE. PRICES AS OF SEPT. 26, 2017.
Finally starting to grow again
Peer-to-peer lending platform Lending Club has lost roughly three-fourths of its market value since its first trading day in 2014, thanks to several quarters of stagnant growth and a scandal that worried investors.
However, the company’s most recent earnings report shows that things may finally be starting to pick up, with 10% growth in loan originations, higher profit margins, and impressive revenue growth. In addition, the company said it could be on the verge of profitability by the start of 2018, and it expects double-digit sequential revenue growth in the third quarter of this year.
Lending Club’s current loan portfolio represents roughly 0.4% of the U.S. consumer lending market, and if the company could even manage to boost its market share to one or two percent, it could mean a big payday for the company’s investors.
After raising $23 million in a Series D funding round last September, Kyriba says today it has raised $45 million in a growth equity round led by Sumeru Equity Partners, a tech-focused private equity firm that specializes in mid-market deals. Previous investors Bpifrance, Iris Capital, Daher Capital (all growth equity funds) joined the deal, along with HSBC.
The venture rounds are over for Kyriba, a cloud-based provider of corporate treasury and financial management software that is based in New York and San Diego.
Daniel Ketchum prides himself on his low fees and independence, but after 27 years as a financial adviser he is finding it harder to make a living working with smaller clients.
Increased government regulations and savers becoming more knowledgeable about investing have created what he calls the “Amazon effect” for US financial advisers.
But the US Department of Labor’s fiduciary rule, which came out this year, is making it harder for him to make a profit from advising small plans, he says.
The regulation requires advisers servicing retirement accounts to work in the best interest of the client and has disrupted the wealth management industry.
“I am trying to see if there’s an area where we can do this online and don’t need to leave the office,” he says. “If every plan had the economics of the smaller guys, it would be tough to pay staff, office rent and marketing.”
Max Levchin, a cofounder of PayPal and former chairman of Yelp who is now CEO of the online lending startup Affirm, told BuzzFeed News on Wednesday that Amazon has “not yet” become a monopoly because of competition from major retailers like Walmart as well as from smaller brands, which are investing in ways to attract and keep customers in the real world as well as online.
Walmart is still much larger than Amazon in terms of net sales. During 2017 fiscal year, Walmart reported$485.9 billion in revenue and $481.3 billion in net sales. Amazon, on the other hand, reported about $136 billion in net sales in 2016.
The UK’s largest marketplace lending platform marginally narrowed its losses in 2016. Funding Circle, a business loans marketplace, lost £35.7m in 2016, slightly down from £36.9m in the previous year. Meanwhile the platform boosted revenues by 59 per cent to £50.9m, and saw its total loans outstanding climb 61 per cent to £1.37bn, according to a Companies House filing.
Funding Circle has also flagged that its group operating results for the first half of 2017 demonstrate that revenue growth has accelerated further, approximately doubling year-on-year.
Crowdfund Insider recently spoke with Raghavendra Rau to better understand his perspective on the crowdfunding market. Rau is the Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School. He is also a founder and Director at the Cambridge Centre for Alternative Finance (CCAF). At the most recent CCAF annual conference in Cambridge, Rau shared some insightful research he had recently completed on the global crowdfunding market.
First, to clarify, in the UK crowdfunding encompasses both debt and equity so peer to peer lending (IE Marketplace Lending) is included in aggregate terms. It is more about many people (and perhaps some institutions) funding a single project. Rau, in his research, emphasizes that in the UK the debt crowdfunding market is far larger than the equity side. This makes sense and mirrors the public markets. Yet access to capital at a very early stage may require equity capital. But globally, over 90% of the crowdfunding market is debt, not equity. It is a debt financed world, at least for SMEs, said Rau.
“Yes, there is definitely potential here. Usually you have two types of firms. Most small enterprises do not require equity. They require debt. Debt means you have to have approximately stable cash flows. Equity means you have to convince the investors that you have an amazing idea that is going to pay off in several years and I am going to let you (the investor) share in this. This is more risky for the investor and so all SMEs are not suitable candidates to raise equity.”
Rau said there are two different paths. Banks or crowdfunding. With crowdfunding there is less paperwork. It is easier to process and in some instances less risk averse. Banks are pulling back from lending across the spectrum. SMEs, the engine of economic growth, are not getting the necessary capital via the traditional route.
So has the UK crowdfunding system been effective?
In the broader scope of things, China is the largest alternative finance market in the world. The US comes in a distant second. The UK is a strong third. But given the relative size of the UK economy, Rau calls the UK performance “extremely impressive.”
The UK is recognized as the top Fintech hub in the world but this required policymakers to be more creative and to take some chances. So far, it has paid off.
Wealth Mosaic aims to build “a resource covering all of the main business needs of wealth managers” in about a dozen verticals, says its co-founder Stephen Wall, who has worked as a wealth management consultant with Boston-based Aite Group and Scorpio Partnership in London. At first, though, he says the service will focus where it’s needed most: on technology and data resources as well as consulting and research options.
Though Wall sees a role for Wealth Mosaic with all “different types of wealth managers,” he sees particular growth opportunities helping “smaller independent” firms that lack in-house consulting arms to help them match their needs to third-party providers, whether the services in question are critical to the firm’s core mission or add value around the edges.
A panel of experts at the Chartered Institute for Securities and Investment’s financial planning conference in Newport today (26 September) said robo-advice did not necessarily pose a risk to financial advice as long as advisers adapted.
George Rooke, head of UK portfolio management at Wealthsimple, said there were advisers who would “struggle” because of their refusal to engage with robo-advice.
Michelle Pearce, co-founder of robo-adviser Wealthify, said advisers did not necessarily have to worry about being replaced by companies such as hers.
THE BRITISH Business Bank (BBB) has published a new report underlining the importance of diverse sources of funding for smaller businesses, including peer-to-peer lending.
The report, titled The Benefits of Diverse Finance Markets for Smaller Businesses, explains why and how the state-backed lender works to increase the number of providers and finance options available to small firms in the UK.
“To date £135m is committed to five fintech alternative lending partners. These partners cover a wide range of products including P2P term loans, invoice finance and merchant cash advances.”
Spotcap, an online lender for SMEs, has announced Mohammed Hussan as the winner of its Fintech Fellowship 2017. The Fellowship awards one aspiring masters or MBA student with a £8,000 stipend towards their studies.
ZhongAn, the online insurance seller with ties to China’s two largest internet companies, raised $1.5 billion from its Hong Kong IPO as investor flocked to the biggest listing to date by a new generation of Chinese financial technology (fintech) companies.
Shares of ZhongAn Online Property & Casualty Insurance Co. Ltd. were priced at HK$59.70 ($7.64) apiece, representing the top of their previously indicated range, according to a company announcement on Wednesday to the Hong Kong stock exchange. The offering raised HK$11.5 billion after being nearly 400 times oversubscribed.
ZhongAn Online Property & Casualty Insurance Co jumped 18 percent on debut on Thursday after the biggest ever IPO by a financial technology firm in Asia, boosting Hong Kong’s hopes of luring future Chinese technology startups away from New York.
It also bodes well for expected listings from other fintech giants in Hong Kong, including Alibaba affiliate Ant Financial and peer-to-peer lending and wealth management platform Lufax.
Both Ant Financial and Lufax are considering IPOs in the city, sources previously told Reuters, although the timing for the deals is uncertain.
THIS July, Hong Kong’s private wealth management industry recorded a 14% increase in assets under management (AUM) compared to a year ago. Hong Kong’s wealth management professionals believe that the growth is primarily driven by mainland China’s growing wealth, according to a recent report.
The estimated total private wealth in terms of AUM in Hong Kong is over US$800 billion as of July 2017, according to a survey by Private Wealth Management Association (PWMA) and PwC. This is an increase of 14% from US$700 billion in July 2016. PWMA’s annual members survey was produced with PwC in July 2017, with 33 out of 45 PWMA member firms participated.
In the survey, 100% of respondents cited mainland China as the main driver of growth in Hong Kong’s private wealth AUM. This may be unsurprising, as China has become home to the highest number of billionaires in the world. According to Hurun Report in 2016, China now has 568 billionaires, surpassing the 535 billionaires in the US, and now ranks first globally.
Ant Financial, the payment affiliate of Alibaba Group Holding Ltd, said it will create a joint venture this year with CK Hutchison Holdings Ltd to operate its payment app in Hong Kong, ending Ant’s solo management of the service.
The new venture will allow Ant Financial’s Alipay to offer services via companies under CK Hutchison, which operates ports, retail, infrastructure and telecommunications businesses across 50 countries.
Ant Financial currently operates its payment app under the Alipay brand in Hong Kong, which offers transaction services at around 4,000 outlets in the city. The new joint venture will take over operation of the app, though it will still be branded Alipay, it said on Tuesday.
Kommunalkredit is a specialist bank for infrastructure financing based in Vienna, with a branch office in Frankfurt am Main. Its new online offering KOMMUNALKREDIT INVEST targets retail investors, who want to deposit their savings at attractive conditions. Their funds will be used to support key infrastructure investments made by Kommunalkredit such as schools, hospitals, care homes, wind farms, solar energy installations, waste-to-energy facilities, and transport projects.
FinTech Group provides a broad range of fully digital solutions and interfaces for KOMMUNALKREDIT INVEST: they include frontend processes such as online account openings, e-banking, and identification solutions such as video identification, e-signature and mTAN. On the backend side, FinTech Group will also run a data warehouse and carry out compliance monitoring as well as regulatory reporting.
Thirty firms – ranging from start-ups to established corporates – have already selected the Fintech District as their home; they include businesses working in crowdfunding, peer-to-peer lending, blockchain and cryptocurrency-based technologies, and robo-advisory.
Trade finance revenue is slipping at the world’s largest banks, especially as companies struggle in a global trade environment operating with a $1.5 trillion gap in trade finance availability.
According to the ADB’s latest survey findings, though, outlined in its Trade Finance Gaps, Growth and Jobs report, FinTech players have yet to make a meaningful impact on the trade finance industry.
The survey polled more than 515 banks and 1,336 companies across 103 countries, finding that FinTech innovators can, indeed, help address the $1.5 trillion trade finance gap which disproportionately impacts small- and medium-sized businesses (SMBs).
Approximately one-fifth of the companies surveyed said they had used some type of digital finance, alternative lending or FinTech platform to access trade finance, according to the ADB results.
Banks aren’t just dealing with customers who want lending and credit information faster. Government regulations are also requiring them to do so, such as Australian banks requiring affordability checks as part of new consumer loans.
Venkat Srinivasan, Head of Lending at Monzo, said that as a new digital bank, they began to question why it was often a month or two months before consumers could see the transaction come through on their banking or credit card. Venkat noted that while technology is improving and customers are evolving, data availability is evolving at the same time.
Roger Vincent, Head of Banking and Innovation at Equifax, discussed how they’re finding new ways to store data, facilitate data movement, and turn data into insights in the form of scores and characteristics.
Phil Grady, CEO of Castlight Financial, discussed how they created a business that has taken traditional credit data from consumers and integrated it with transactional data. This involves categorizing income and expenditures, and then determining essential expenditures versus non-essentials. This enables Castlight to determine consumers’ real disposable income, which in turn helps lenders make better lending decisions. This type of granular level data has allowed Castlight to create the first real-time Financial Capability Formula.
Only three per cent of 162 advisers surveyed said they offered fully automated wealth management services, the research found.
The study, which was conducted by research firm Platforum on behalf of JP Morgan, also found that only 14 per cent plant to implement it in the next two years.
Australia’s alternative finance market has grown by 53% over 12 months according to a report released by KPMG, becoming the second largest in the Asia-Pacific region.
The report revealed Australia’s alternative finance market increased from US$27 million in 2015 to US$610 million in 2016 as Aussies turn to peer-to-peer lending (P2P), balance sheet business lending and crowdfunding.
In the US$245.28 billion Asia-Pacific alternative finance market, China was found to be the leader, accounting for 99.2% and representing 85% of the total global market.
P2P consumer lending was Australia’s second most popular alternative finance model behind balance sheet business lending, increasing from US$43 million in 2015 to over US$158 million in 2016.
Funding Societies, Singapore’sand Southeast Asia’s leading crowdfunding platform, has announced the launch of its chatbot Miyu. This is the first such chatbot created by a crowdfunding company in Southeast Asia. Miyu works round the clock to answer queries that a business owner or an investor may ask about the products and services offered by Funding Societies.
“We created Miyu via self-learning with guidance from our seniors. She is different from most other chatbots in the financial services space. Personally, I like that Miyu can escalate to human support whenever required, giving our users a seamless experience,” said Sherman Lim, who is a Singaporean and majors in Economics and Strategic Management at Singapore Management University (SMU).
The future plans for Miyu include acting as a Virtual Relationship Manager who can assist SMEs in loan application, and help investors navigate through the platform, initiate video chats with real customer experience managers as well as perform account opening and management activities such as investments, deposits, withdrawals, etc. without human intervention at any time of the day.
Financial Technology (Fintech) firms are in early discussions with the government and Micro Units Development & Refinance Agency Ltd (MUDRA), exploring opportunities under the Pradhan Mantri Mudra Yojana (PMMY), said three people close to the development.
So far, PMMY loans have been extended by all public sector banks, regional rural banks (RRBs), cooperative banks, private sector banks, foreign banks, micro finance institutions and non-banking finance companies. Fintech companies have not been involved yet.
Under Shishu, refinancing is provided for loans up to Rs50,000. Kishor offers refinancing for loans above Rs50,000 up to Rs5 lakh whereas, Tarun provides refinancing for loans above Rs5 lakh up to Rs10 lakh. Mudra also offers services like credit guarantee for micro units and securitization of loan assets against micro enterprise portfolios.
Emcredit, a subsidiary of Dubai Economy, and the UK-based Object Tech Group have signed a partnership deal to facilitate financial transactions through contactless payment.
Emcredit and Object Tech will develop a competitive, accountable and legally compliant emCash ecosystem together. Several associated products to protect emCash wallet and digital documents, enable direct real-time settlement and peer-to-peer lending, and provide credit rating based on the distributor ledger of emCash will also be developed.
emCash is based on blockchain technology and will be the digital currency in emPay wallet. The payment method, according to Dubai Economy, will allow the UAE residents to make varied payments through the near field communication (NFC) option on their phones. With emCash, emPay users will have the option of a secure digital currency, and merchants can receive such payments in real time without going through intermediaries.
It’s estimated that in 2017 alone, nearly $60 billion worth of payments will be made on mobile platforms. Comparing these figures to just two years ago, only $8.71 billion worth of transactions were made digitally in 2015.
In line with other frontrunners in the industry, such as London, Silicon Valley and New York City, Toronto, Canada, my hometown, stands apart as an emerging FinTech ecosystem, and it’s become a well-recognized leader amongst the largest and most stable financial centers in the world.
Ontario has been a global leader in digital payments for more than a decade, with Toronto leading in a high concentration of cryptocurrencies,blockchain, alternative lending and e-commerce growth verticals.
