- Today’s main news: Chime surpasses 1M bank accounts. Top MPLs (SoFi, VPC, more) join Marketplace Lending Association. LendingPoint secures up to $600M credit facility.
- Today’s main analysis: Survey on Aadhaar, data-driven insights.
- Today’s thought-provoking articles: Why the credit card boom has peaked. Should banks have ‘flanker’ brands? The Baltics are stars in EU P2P lending. Top personal loans with no origination fee.
- Chime surpasses 1 million bank accounts. AT: “Could this signify the beginning of the climb to popularity for U.S. challenger banks?”
- LendingPoint grabs up to $600 million credit facility. AT: “Congratulations.”
- Why the credit card boom may have peaked. AT: “As instant financing becomes more popular, or POS financing if you prefer, I think we’ll see the need for credit cards become obsolete. It’s quite possible we’ll see smartphone credit apps, or some equivalent, that holds encrypted personal data for credit purposes.”
- CreditShop intros MercuryMastercard.
- The forces behind GreenSky’s IPO.
- Coinbase rolls out 4 trading tools for institutional investors to bet on crypto.
- Former AmeriCredit, Exeter execs partner on Horizon Digital.
- Circle raises record-setting $110 million for U.S. dollar-backed cryptocurrency.
- Regalii pivots to virtual cards.
- Elix: Another crypto lender on the way.
- Top 5 personal loans with no origination fee.
- P2P lending: Viable alternative to a traditional bank account.
- Compound helps investors earn interest on cryptocurrency.
- The changing real estate capital markets.
- BlockFi gets new Chief Risk Officer.
- Is it wrong for banks to launch ‘flanker’ brands?
- Victory Park Capital joins Marketplace Lending Association.
- Data-driven insights on Aadhaar. AT: “A must read.”
- P2P lending expected to see huge traction.
- DIPP hits brakes on funding.
- United States
- Chime Surpasses One Million Bank Accounts (PR Newswire) Rated: AAA
- CreditShop Introduces the Mercury Mastercard for Hardworking Americans (Pr Newswire) Rated: A
- LendingPoint Secures up to $ 600 Million Credit Facility Arranged by Guggenheim Securities (Business Wire) Rated: AAA
- What are the Forces Behind the GreenSky IPO? (PYMNTS) Rated: A
- Coinbase just rolled out 4 new crypto trading tools, and they offer a big clue to where the platform might be headed next (Business Insider) Rated: A
- Former top Exeter, AmeriCredit leaders reunite again with FinTech firm (Auto Remarketing) Rated: A
- Is Envestnet’s market dominance also its weakness? (Financial Planning) Rated: A
- After raising $ 110M, Circle raises announces new US dollar-linked cryptocurrency (Silicon Angle) Rated: A
- A fintech shifts gears to virtual cards (American Banker) Rated: A
- What is Elix / Elixir (ELIX)? | Beginner’s Guide (Coin Central) Rated: A
- Why the Credit-Card Boom May Have Just Peaked (Wall Street Journal) Rated: AAA
- Top 5 Personal Loans With No Origination Fee (Student Loan Hero) Rated: AAA
- 7 Alternatives to a Traditional Bank Account (Dough Roller) Rated: A
- Coinbase’s first investment, Compound, earns you interest on crypto (Tech Crunch) Rated: A
- NYU’s Sam Chandan on the Changing Real Estate Capital Markets (Commercial Property Executive) Rated: B
- Rene van Kesteren joins BlockFi as Chief Risk Officer (BlockFi) Rated: B
- United Kingdom
- Is it wrong for banks to launch ‘flanker’ brands? (AltFi News) Rated: AAA
- Victory Park Capital joins Marketplace Lending Association (Peer2Peer Finance) Rated: B
- China’s tech giants have few worries from smaller rivals (Channel Asia News) Rated: A
- European Union
- The Baltics, the Shining Stars in the EU P2P Lending landscape (The Baltic Times) Rated: AAA
- Marketplace Lending Association Announces Nine New Members (PR Newswire) Rated: AAA
- TraXion.tech announces pre-sale, ICO (Inquirer) Rated: B
- Largest Independent Survey on Aadhaar, provides Data-Driven Insights (IDinsight Press Office) Rated: AAA
- Peer-to-peer lending expected to see huge traction in India (The Week) Rated: A
- Indian Govt’s Flagship Startup Scheme Slows Down As DIPP Hits Brakes On Funding (Inc42 Media) Rated: B
- Standard Chartered to use Robo Web’s LnB platform (Taipei Times) Rated: A
- How proptech is changing Hong Kong’s property industry (South China Morning Post) Rated: A
Chime Surpasses One Million Bank Accounts (PR Newswire) Rated: AAA
Chime announced it surpassed one million accounts to date last month and has now processed more than $4.5 billion in total transaction volume, solidifying Chime’s position as the clear leader in the U.S. challenger banking segment.
Unlike traditional banks that charged consumers over $34 billion in fees in 2017, Chime is transforming the consumer banking experience. The company’s unique business model, which doesn’t rely on fees, allows Chime to relentlessly focus on its mission of helping members lead healthy financial lives.
CreditShop Introduces the Mercury Mastercard for Hardworking Americans (Pr Newswire) Rated: A
CreditShop LLC, a finance company focused on developing, marketing and servicing consumer-friendly credit products, today announced the introduction of the Mercury Mastercard. Mercury cards will provide cardmembers with complementary access to their FICO score, and account performance will be reported to major credit bureaus. The cards will be issued by First Bank & Trust of Brookings, South Dakota.
There are about 75 million Americans in the “middle market” with FICO scores ranging between 575 and 675, and many are charged high fees by sub-prime credit card issuers.
LendingPoint Secures up to $ 600 Million Credit Facility Arranged by Guggenheim Securities (Business Wire) Rated: AAA
LendingPoint today announced it has closed an up to $600 million, committed credit facility arranged by Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners.
With this new deal, LendingPoint has secured up to $1.1 billion of senior credit financing in less than one year. In September 2017, the company announced it had secured an up to $500 million committed credit facility, also arranged by Guggenheim Securities.
What are the Forces Behind the GreenSky IPO? (PYMNTS) Rated: A
Some 58 percent of U.S. homeowners will pay for home improvements this year, roughly the same level of interest in 2017, according to the fifth annual LightStream Home Improvement Survey. LightStream is the national online lending division of SunTrust Banks.
But spending plans tell a different story, one that works in favor of the GreenSky IPO. “The percentage of people intending to use a home improvement loan has grown 29 percent from 2017, with 54 percent more 18- to 34-year-olds planning to fund projects through home improvement financing,” the report said. “While overall, 30 percent of homeowners say they’ll pay for some portion of their 2018 project with a credit card, 16 percent fewer homeowners aged 18 to 34 plan to use them” compared to 2017.
On Tuesday, the company announced the launch of four services, all centered on attracting financial institutions to its platform. The new tools include options like Coinbase Custody, a custodian partnership similar to the custodian offerings typically provided by banks to secure customers’ cash, and Coinbase Prime, a platform centered on research and market data geared toward institutional clients.
Former top Exeter, AmeriCredit leaders reunite again with FinTech firm (Auto Remarketing) Rated: A
After collaborating previously at Exeter Finance and AmeriCredit, auto finance industry veterans Mark Floyd and Kenneth Wardle are teaming up again; this time to leverage what’s happening online when consumers search for financing.
According to a news release sent to SubPrime Auto Finance News this week, Floyd and Wardle have acquired an equity stake in Horizon Digital Financial Holdings, an online auto finance technology firm located in the Dallas-Fort Worth Metroplex. The transaction was effective May 1.
Horizon Digital is the parent company for online consumer loan marketplace participant myAutoloan.com.
Floyd will serve as chairman and chief executive officer of Horizon Digital, and Wardle will serve as chief operating officer.
Is Envestnet’s market dominance also its weakness? (Financial Planning) Rated: A
At well over $400 billon, Envestnet has more than six times the assets of its nearest competitor in its core asset management platform business. Tamarac, the firm’s rebalancing, reporting and practice management software powerhouse, has seen revenue grow approximately eight-fold since Envestnet bought the company six years ago.
After raising $ 110M, Circle raises announces new US dollar-linked cryptocurrency (Silicon Angle) Rated: A
Bitcoin and blockchain startup Circle Internet Financial, Inc. has raised $110 million in new funding as a “strategic investment” while also announcing its intent to launch a new cryptocurrency tied to the U.S. dollar.
The new round announced Tuesday, the first since 2016, was led by Bitmain, with the participation of IDG Capital, Breyer Capital, General Catalyst, Accel, Digital Currency Group, Pantera, Blockchain Capital and Tusk Ventures.
A fintech shifts gears to virtual cards (American Banker) Rated: A
The fintech startup Regalii, which originally built technology to help immigrants pay bills back home, has pivoted. Under a new name, arcus, it is now helping banks reissue credit and debit cards to customers whose cards have been lost, stolen or breached.
What is Elix / Elixir (ELIX)? | Beginner’s Guide (Coin Central) Rated: A
Elix is an Ethereum-based platform for payments, loans, and crowdfunding. The team is uniquely taking a mobile-first approach and focusing on usability to attract as large of a user base as possible from the start.
Elix also includes a platform, Boost, to facilitate decentralized crowdfunding campaigns using smart contracts.
Peer-to-Peer (P2P) Lending
With Elix, though, both the lender and the borrower are incentivized to follow the terms of the loan. When setting up a loan, the participants can opt to include a mining period once the loan is complete to gain additional rewards. If enabled, as a lender, you must hold the ELIX in your wallet for a certain amount of time in a system similar to Proof-of-Stake. When that holding period is complete, Elix hands out the rewards in the form of a new token, Token P. This token will most likely have a different name in the future.
If the borrower pays back the loan on time, the reward is split with the lender receiving 65% and the borrower receiving 35%. If the borrower has late payments, though, the lender receives 100% of the reward.
Why the Credit-Card Boom May Have Just Peaked (Wall Street Journal) Rated: AAA
Following some of their strongest years ever, credit-card issuers are grappling with an uneasy future.
Five of the largest credit-card issuers— American Express Co. AXP 0.87% , Capital One Financial Corp. COF 1.15% , Citigroup Inc., C -0.20% Discover Financial Services DFS 0.54% and Synchrony Financial SYF 0.90% —generated a median return of 2.1% on their assets for common shareholders in the first quarter, up from 2% a year earlier but down from 2.6% two years prior, according to analysis by Autonomous Research. The recent peak was 3.7% in the second quarter of 2011, according to an industry analysis by Autonomous at the time.
Top 5 Personal Loans With No Origination Fee (Student Loan Hero) Rated: AAA
To help, here’s our list of the top five lenders. Interest rates were current as of May 16, 2018. Some rates include a discount for setting up autopay. LightStream rates can vary by loan amount, repayment period, and the purpose of the debt.
7 Alternatives to a Traditional Bank Account (Dough Roller) Rated: A
However, when you invest in P2P lending, you’re only purchasing notes, not entire loans. The notes represent $25 slivers of individual loans. That means that you can invest in 40 different loans with an investment of $1,000. That will help to minimize your risk.
Coinbase’s first investment, Compound, earns you interest on crypto (Tech Crunch) Rated: A
Compound wants to let you borrow cryptocurrency, or lend it and earn an interest rate. Most cryptocurrency is shoved in a wallet or metaphorically hidden under a mattress, failing to generate interest the way traditionally banked assets do. But Compound wants to create liquid money markets for cryptocurrency by algorithmically setting interest rates, and letting you gamble by borrowing and then short-selling coins you think will sink. It plans to launch its first five for Ether, a stable coin, and a few others, by October.
Today, Compound is announcing some ridiculously powerful allies for that quest. It’s just become the first-ever investment by crypto exchange juggernaut Coinbase’s new venture fund. It’s part of an $8.2 million seed round led by top-tier VC Andreessen Horowitz, crypto hedge fund Polychain Capital and Bain Capital Ventures — the startup arm of the big investment firm. [Update: Compound told us it was Coinbase Ventures’ first investment when it closed its round, though Coinbase notes that it’s done 8 rapid-fire investments over the past two months alongside this funding.]
NYU’s Sam Chandan on the Changing Real Estate Capital Markets (Commercial Property Executive) Rated: B
While there is potential for growth and it’s an exciting opportunity, real estate crowdfunding will remain a relatively small share of the overall market. In our view, on the long-term, banks, agency lenders, life insurance companies will remain the dominant sources of financing into the market.
Rene van Kesteren joins BlockFi as Chief Risk Officer (BlockFi) Rated: B
Former Managing Director of Equity Markets at BOA Merrill Lynch, Rene van Kesteren, joins BlockFi as Chief Risk Officer. BlockFi, based in New York City, serves crypto investors by offering USD loans collateralized by cryptoassets.
Van Kesteren will be responsible for the company’s risk models and product development in addition to general strategic influence as part of the company’s executive team.
Is it wrong for banks to launch ‘flanker’ brands? (AltFi News) Rated: AAA
For the uninitiated, Esme is the online lending platform launched by NatWest. It can advance loans of up to £150,000 to small businesses in less than an hour, utilising a wholly online process that is a great deal swifter and simpler than its progenitor, NatWest, can manage.
NatWest is by no means alone in having launched a separate digital banking or lending brand – often called ‘flanker’ brands by innovation specialists.
Victory Park Capital joins Marketplace Lending Association (Peer2Peer Finance) Rated: B
VICTORY Park Capital (VPC) has joined US industry body the Marketplace Lending Association (MLA).
China’s tech giants have few worries from smaller rivals (Channel Asia News) Rated: A
Chinese start-ups and other established companies like Didi Chuxing, Xiaomi and Meituan Dianping may command high valuations but they are unlikely to dislodge leaders Alibaba and Tencent, says one observer from the Financial Times.
China’s pre-eminent tech duo of Alibaba and Tencent are approaching their 20th birthdays. Still reasonably youthful but old enough to have spawned an entire new generation of internet wunderkinder.
Peer-to-peer lending, for example, offers a graphic illustration of what can happen when multiple players are unleashed.
The Baltics, the Shining Stars in the EU P2P Lending landscape (The Baltic Times) Rated: AAA
Finbee (LV) offers average yields as high as 20%, while all of them offering returns between 10-20%.
An explanations of the yield/risk ratio is that they use quality originators, a magic formula for due diligence, using new technologies such as machine learning and artificial intelligence.
One too watch is Peerberry (LV) using outside loan originators and creating a marketplace to trade consumer loans offering a 12.49% on average.
Marketplace Lending Association Announces Nine New Members (PR Newswire) Rated: AAA
The Marketplace Lending Association (MLA) today announced the addition of nine new companies to the Association. The new members join as the MLA continues to expand its presence and engage with policymakers in Washington and around the country. The three new lending firms include Social Finance(SoFi), LendingPoint and College Ave. The six new Associate and Investor Council Members of the MLA include Laurel Road, Education Loan Finance (ELFI), Arcadia Funds, Victory Park Capital, PricewaterhouseCoopers, and First Associates. The MLA now has 24 active members.
TraXion.tech announces pre-sale, ICO (Inquirer) Rated: B
Ireland-based company Pluma Technologies Ltd together with its Philippine partner Gava Technologies Inc. are raising $4M worth of Ether through a pre-sale for its TraXion tokens.
TraXion.tech Chief Executive Officer Ann Cuisia said that the company’s token sale would pave the way for TraXion to become the go-to crypto-economy for payments, peer-to-peer lending, remittances, savings, insurance, investments, and philanthropy.
The TraXion token pre-sale began last May 1, 2018 and the Initial Coin Offering (ICO) will start on June 1, 2018, respectively. TraXion tokens are currently valued at 0.001 ETH.
Largest Independent Survey on Aadhaar, provides Data-Driven Insights (IDinsight Press Office) Rated: AAA
IDinsight, a global development analytics firm, today released its State of Aadhaar Report 2017-18 which provides data-driven insights on Aadhaar, the world’s largest biometric system. The report is based on an independent household survey covering 2947 rural households in 21 districts across three Indian states. The survey was conducted between November 2017 and February 2018.
The key highlights of the report are:
- Over 96% of respondents value privacy and thought it is important to know what the government will do with their Aadhaar data. At the same time, 87% of respondents approve of mandatory linking of Aadhaar to public welfare programs.
- Aadhaar’s coverage is widespread, but the data quality has room for improvement. The report finds a higher uptake of Aadhaar than voter identification cards. In addition, the report finds no evidence of differences in enrollment by gender, caste, religion, or education levels. The report highlights that 8.8% of Aadhaar-holders reported errors on their name, age, address, or other information on their Aadhaar letter. Compared to voter identification cards, the error-rate on Aadhaar was 1.5 times higher.
- While exclusion from food subsidy welfare-benefits due to Aadhaar-related factors is significant, it is lower than exclusion explained by factors unrelated to Aadhaar. State capacity has a bearing on the functioning of welfare distribution, with wide variation between certain states. Overall monthly exclusion from welfare benefits ranges from 9.9% to 1.1%. Of this, Aadhaar-related factors contribute 2.2% and 0.8% respectively. Despite this, the report finds that a majority of welfare beneficiaries prefer Aadhaar-based benefits delivery in both states, as they perceive biometric authentication prevents identity fraud.
Read the full report here.
Peer-to-peer lending expected to see huge traction in India (The Week) Rated: A
Peer-to-peer (P2P) lending, which helps people to borrow and lend money without the help of an official financial set up such as a bank as an intermediary, is expected to see huge traction in the country in the near future. It is estimated that the value of P2P lending to be generated in India over next five years will be around $4 billion (which will be 160 times the current lending size).
However, this is sum is small when compared to China where P2P lending book currently is around $100 billion, indicating the potential for exponential growth opportunity available for P2P in India. India currently has around 30 online P2P lending platforms with a current loan book of $ 25 million.
Indian Govt’s Flagship Startup Scheme Slows Down As DIPP Hits Brakes On Funding (Inc42 Media) Rated: B
The Indian government’s $1.47 Bn (INR10,000 Cr ) Fund-of-Funds for Start-ups (FFS) , a part of the Start-up India Action Plan aimed at helping startups gather funds, isn’t seeing much action and it isn’t because of lack of trying, The Indian Express reported.
Small Industries Development Bank of India (SIDBI), which manages FFS program, has so far committed $189.3 Mn( INR 1,285 Cr) to 27 local venture capital funds under the FFS scheme, of which $20.8 Mn (INR 141 Cr) —only about 11% — has been disbursed to these funds till April 2018.
Standard Chartered to use Robo Web’s LnB platform (Taipei Times) Rated: A
Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) yesterday entered into a partnership with peer-to-peer lending operator Robo Web Technology Co (瑞保網路科技) to expand its retail banking clientele from high-net-worth individuals to the general public.
The alliance enables borrowers to open accounts and apply for loans without visiting brick-and-mortar branches and came as competition from non-traditional players gains force.
Standard Chartered would continue to pursue affluent clients, but also aims to take advantage of the fast-growing digital banking business, which was valued at US$64 billion in 2015 and could hit US$1 trillion in 2025, Lin said.
How proptech is changing Hong Kong’s property industry (South China Morning Post) Rated: A
Start-ups in Asia-Pacific have received US$4.8b, or over 60pc of the world’s proptech investments, with Hong Kong and China taking US$3b of that amount.
In Hong Kong, some companies working in property have begun adopting proptech, but by and large, the industry and regulators have been slow in tapping into these advances, which analysts attribute to a few factors.
JLL said in a November report that 179 start-ups in Asia-Pacific have received US$4.8 billion, or over 60 per cent of the world’s proptech investments since 2013, with Hong Kong and mainland China taking US$3 billion of that amount.
Hong Kong is also aiming to become a global hub for innovation and technology, earmarking HK$50 billion (US$6.37 billion) this year to boost the tech sector.