Friday March 9 2018, Daily News Digest

Friday March 9 2018, Daily News Digest

News Comments Today’s main news: What SoFi pays for prime customer acquisition. Funding Circle investors lent over 113M GBP in February. Landbay hit 100M GBP lending milestone. Atom Bank secures 149M GBP, BBVA ups stakes. Today’s main analysis: LendingTree personal loan offers report – February 2018. Americans owe more than $1T in credit card debt. Today’s thought-provoking articles: Americans […]

Friday March 9 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

SoFi Is Paying Top Dollar To Acquire Its Prime Customers (Fast Company), Rated: AAA

Last year, even as a sex scandal engulfed the six-year-old company, SoFi originated $12.9 billion in loans, added 225,000 customers, and turned a profit.

All told, SoFi spent $170 million on marketing in 2017, or $756 to acquire each new customer, according to data obtained by Fast Company and confirmed by the company. This year, SoFi plans to spend $200 million.

Other online lenders targeting prime borrowers, like Lending Club and Prosper, typically spend $350-$450 to acquire each customer, industry experts say.

Judge ‘Shocked’ By $ 16M Atty Fee Bid In LendingClub Deal, (Law 360), Rated: A

A California federal judge said he was “shocked” attorneys want $16 million for representing LendingClub Corp. investors in two securities class actions against the peer-to-peer lending company, telling the plaintiffs’ lawyers at a hearing Thursday they “may be being greedy” by asking for that much of the $125 million settlement.

LendingTree Personal Loan Offers Report – February 2018 (LendingTree), Rated: AAA

Excellent credit (760+ score): Offered APRs to consumers with a credit score of 760+ averaged 7.44% in February.

  • The average best APR offered to all borrowers with credit scores of 760 or above was 7.44%, an increase of 3 basis points from the prior month, but down 19 basis points from the same period one year ago.
  • At $23,689, the average loan amounts offered with the best APRs to all borrowers with a score of 760 and above was down 2.23% ($528) from January, but up over 21.44% ($5,078) from the same period one year ago.
  • The top 10% of offers, presented to borrowers with the best profiles within this group, had offered APRs of 4.97% on average, and loan amounts of $33,050. A borrower with this APR and loan amount would save $2,748 by consolidating debt with a 10% APR over a three-year term.
Source: LendingTree

Good credit (680 – 719 score): Offered APRs to consumers with a credit score between 680 and 719 averaged 15.69% in February.

  • The average best APR for all borrowers with credit scores of 680 – 719 was 15.69%, down 10 basis points from last month, but up almost 126 basis points from a year earlier.
  • At $16,272, borrowers with scores of 680 – 719 saw the amounts offered with the best APRs increase by almost 4% ($644) in the last month and by almost 5% ($795) from February 2017.
  • The top 10% of offers, presented to borrowers with the best profiles within the 680 – 719 credit score range, had an average best APR of 6.75%, offered with an average loan amount of $24,484. A borrower with this APR and loan amount would save $3,440 by consolidating debt from a 15% APR over a three-year term.
Source: LendingTree

Credit Card Debt Study: Trends & Insights (WalletHub), Rated: AAA

Americans now owe more than $1 trillion in credit card debt for the first time ever, after adding a post-Great Recession record $92.2 billion to our tab in 2017. Only four times in the past 30 years have we spent so much in a year. And in each of those prior cases, the charge-off rate – currently hovering near historical lows – rose the following year.

Source: WalletHub

The $67.6 billion in credit card debt that we added in Q4 2017 is the highest quarterly accumulation in the last 30 years – 68% higher than the post-Great Recession average.

Source: WalletHub
Source: WalletHub

 

 

Fintechs on Bank of Amazon: It’d be a net plus (American Banker), Rated: A

When Chris Britt, founder and CEO of the challenger bank Chime, heard that 

Brett King — founder of Moven, which is on its way to becoming a U.S. challenger bank — had a similar reaction.

“I’m frankly surprised it took them this long, given Alibaba’s massive success with Yue Bao,” he said, referring to the money market fund the online retailer formed that now has more than 370 million investors.

Kathryn Petralia, co-founder and president of the small-business lending fintech Kabbage, also liked the idea of Amazon offering checking with a large bank partner.

“It made perfect sense to me,” she said. “It seems like Amazon is doing this to enhance the customer experience, and they have a really strong focus on customer experience and customer service.”

Kabbage already competes with Amazon for small-business loans. Amazon began making loans of $1,000 to $750,000 in 2011. Last June, the company said it had issued more than $1 billion in loans during the previous 12 months and $1.5 billion in loans in the four years prior. Kabbage has made $4 billion in loans since it started in 2009.

Small-bank contract negotiators expand from core systems to fintech (American Banker), Rated: B

The consulting firm Paladin fs announced on Tuesday that Alex Lopatine, who founded the cloud-based core systems provider Nymbus, will be the managing director of its new “FinTech Advantage,” a unit dedicated to helping banks buy financial technology “needed to remain competitive and successful in the fast-evolving industry,” according to a press release.

St. Vincent de Paul Society’s alternative to payday loans (The Arlington Catholic Herald), Rated: A

 

In 2014, the Arlington District Council of St. Vincent de Paul Society began looking into the issue. In February, the group launched the Alternative Loan Program. People who qualify will be eligible for a loan of up to $1,000 to escape debt due to a payday loan. For people who need help with housing utilities, or medical bills, “we’ll still administer our assistance program,” said George Degnon, chairman of the loan committee.

To help run the program, the council partnered with Apple Federal Credit Union, which has several branches around Northern Virginia. “(The society) will maintain deposits at Apple Federal to serve as security for loans to borrowers whom the society recommends,” the group said in a press release. An interest rate of 3.1 percent will be retained by Apple Federal to cover administrative costs of the program.

Borrowers are required to take a budgeting class before qualifying for a loan, and can repay at a rate of just $25 a month, said Degnon.

Will 2018 Be the Year the Mortgage Industry Finally Bridges the Digital Divide? (JD Power Email), Rated: A

It should come as little surprise to those familiar with the mortgage industry that attendees at the recent Mortgage Bankers Association Annual Servicing Conference overwhelmingly selected Technology & Innovation when asked what their priorities were for 2018.

Digital Interaction Improves Mortgage Customer Satisfaction
For the first time, the 2017 J.D. Power U.S. Primary Mortgage Origination StudySM found both refinance and purchase customers cite online/website as the most frequent method of submitting a mortgage application. A total of 43% of mortgage customers report applying digitally in 2017, up from just 28% in 2016. Customers applying digitally also report substantially higher overall satisfaction with the mortgage origination process.

Still Need a Human Touch – Balancing Self-Service with Live Support Presents Challenges
The J.D. Power 2017 U.S. Retail Banking Satisfaction Study was the first to introduce
the idea of the “rise of the retail banking omnivore,” a financial services consumer that flips seamlessly through multiple interaction channels. Specifically, the study found that more customers than ever are using mobile banking (49% of Millennials, 31% of Gen X and 16% of Boomers). Despite this widespread adoption of the digital channel, 71% of all bank customers visited the branch an average of 14 times over the past year. Among Millennials, 71% used the branch, averaging 11 visits in the past year.

Source: J.D. Power

View the full report here.

HomeUnion Launches Investimate to Determine a Home’s Value as an Investment Property (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched Investimate, a tool that enables consumers to see the potential value of a house as an investment using AI and machine learning. Investimate predicts a property’s investment value by estimating three factors: its price, rent, and operating expenses. Investimate is powered by big data on 110 million homes, institutional-quality research and on-the-ground experts with deep insight into local real estate market conditions.

With the launch of Investimate, HomeUnion is the only website that forecasts the performance of residential properties over a period of 15 years. After entering the address of a house, a consumer views comprehensive information on that property, including yields, appreciation and total returns. HomeUnion’s Investimate also displays in-depth information about the physical characteristics of each property, surrounding neighborhoods, historic price and rent trends, sales comps and other detailed information.

Real estate tech company Qualia closes $ 33M Series B (Bankless Times), Rated: A

Qualia, a real estate technology company streamlining the home closing process, today announced the closing of a $33M Series B led by Menlo Ventures with participation from 8VC, Bienville Capital, and Barry Sternlicht. With this new capital, Qualia will expand its engineering and product teams and accelerate their growth into additional markets across the U.S.

BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2017 (MarketWired), Rated: A

Fourth Quarter 2017 Compared to Fourth Quarter 2016:

  • Total consolidated revenues of $214.7 million vs. $198.5 million, an increase of 8.2%
  • Net income attributable to shareholders of $44.0 million vs. $4.9 million
  • Diluted earnings per share of $0.43 vs. $0.05
  • Benefit for income taxes of $37.3 million vs. a provision for income taxes of $12.5 million due to a decrease in net deferred tax liabilities as a result of the enactment of the Tax Cuts and Jobs Act (2)
  • Free cash flow of $19.6 million vs. $16.0 million (1)

Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016:

  • Total consolidated revenues of $815.8 million vs. $767.3 million, an increase of 6.3%
  • Net income attributable to shareholders of $82.2 million vs. $28.4 million
  • Diluted earnings per share of $0.79 vs. $0.32
  • Benefit for income taxes of $7.2 million vs. a provision for income taxes of $36.4 million primarily due to a decrease in net deferred tax liabilities (2)
  • Free cash flow of $43.6 million vs. $68.2 million (1)

Balance Sheet as of December 31, 2017 Compared to December 31, 2016:

  • Total consolidated assets of $1.6 billion vs. $1.4 billion
  • Total shareholders’ equity of $573.2 million vs. $454.6 million
  • Fully diluted book value per share of $5.52 vs. $4.22

Three equity crowdfunding platforms you should consider (Born2Invest),  Rated: A

Indiegogo

Founded in 2007, Indiegogo remains to be one of the most popular and easy-to-access crowdfunding platforms to date. The website is home to countless crowdfunding projects, most of which are gadgets and technological innovations. Some of the successful campaigns out of Indiegogo are the ONAGOfly smart droneSondors THIN electric bike, and popSLATE2, which serves as a second screen for iPhones.

Other than a huge selection of startups to invest on, Indiegogo is also one of the few crowdfunding platforms that provide initial coin offerings (ICO) for new cryptocurrencies, according to Black Enterprise.

SeedInvest

The minimum investment to be made at SeedInvest is $500. Also, since the projects on the website are highly vetted and promising, chances of success are bigger. The platform offers a customizable auto invest program that allows people to diversify their investments in up to 25 startups as well.

StraightUp

For New Yorkers, StraightUp is going to be of great help. Coming straight out of the incubation of HAP Ventures, the company carries a deep knowledge of property crowdfunding and The Big Apple’s real estate market.

What StraightUp does differently from other competitors in its field is that it invests along with its clients. Whatever project their client finds interesting, StraightUp also supports by being a part of its crowdfunding. In doing so, the interest between StraightUp and its clients are in line with each other.

Lendio adds Gainesville-Ocala franchise (Bankless Times), Rated: B

Small business loan marketplace Lendio today announced the opening of a new Lendio franchise in the Gainesville-Ocala, Florida region. Through the Lendio franchise program, Luis Salazar will help local businesses in the community apply for loans, review their options and secure funding, easing the financial hurdles for small business owners.

Lendio is an online service helping business owners find the working capital they need to grow their business through the company’s network of more than 75 lenders. Funding options include SBA loans, startup loans, equipment loans, and commercial real estate loans. In the last fiscal year alone, Lendio facilitated more than $300 million in funding.

 

HR Buzz: March Madness, Taxes and Mobility, Disappointing HiPos (Bloomberg), Rated: B

More than seven in 10 (71.4 percent) student debtors consider benefits covering their loans to be an important or very important factor when pondering job offers, a survey commissioned by student loan consolidation and refinancing service LendEDU and online lender Laurel Road found.

More than half (53.1 percent) would stay in a job they disliked if it was helping them pay off their student debt, and 58.4 percent would take a loan repayment benefit instead of additional vacation days. The survey was done Feb. 8-9 among 1,000 student borrowers who graduated between 2012 and 2017.

EnTrustPermal Expands Alternative Investment Capabilities With Dedicated Aviation Financing Team (PRNewswire), Rated: B

EnTrustPermal, a global alternative asset manager, today announced the expansion of its private debt opportunities investment platform with the addition of John Morabito, a veteran aviation investor from the CIT Group.  EnTrustPermal’s private debt opportunities capabilities now include direct leasing and financing vehicles in the maritime and aviation industries.

Commercial Real Estate Veteran Joins PeerStreet to Lead Commercial Real Estate Team (BusinessWire), Rated: B

PeerStreet is excited to announce the appointment of Greg Galusha as Head of Commercial Real Estate. He will be based in the firm’s headquarters in Los Angeles, California.

Galusha is responsible for leading PeerStreet’s growing commercial real estate division, which will help PeerStreet expand and enhance the current spectrum of commercial real estate investments offered through its marketplace.

 

Elevate Named as Finalist for LendIt Fintech 2018’s Financial Inclusion Award (Business Wire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2018. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

United Kingdom

Landbay Milestone: Hits £100 Million in Lending (Crowd Fund Insider), Rated: AAA

UK-based peer-to-peer lender Landbay announced this week it has hit its £100 million in lending milestone. The online lending platform achieved its half-way point in lending this past September and revealed that since then momentum has accelerated to result in near-on double of lending volumes in just six months. The lender also noted that the amount to more than £4 million in interest was earned by its investors from loans originated by its platform.

Landbay also confirmed that while lending volumes are always increasing, its focus remains on ensuring that all the lending it does is responsible and it is proud to affirm that its track-record of zero defaults or arrears is still intact.

Founded in 2013, Landbay describes itself as a fast-growing UK peer-to-peer lending platform that enables retail investors, institutions, and local governments to invest in UK’s private rented sector through the funding of residential buy-to-let mortgages.

Landbay is fully authorized and regulated by the FCA, but peer-to-peer lending platforms are not covered by the FSCS. Since its founding, Landbay has launched six other Seedrs campaigns, with the previous initiative attracting more than £1.6 million, which includes an investment from tennis star, Andy Murray.

 

Funding Circle Investors Lent More Than £113 Million to Over 1,700 UK Businesses in February 2018 (Crowdfund Insider), Rated: AAA

Source: Crowdfund Insider

On Wednesday, online lender Funding Circle announced investors lent more than £113 million to over 1,700 UK businesses throughout the month of February. Funding Circle also reported that over the last six months investors have helped more than 10,200 small businesses be able to gain access to financing. More than 678 million has been lent through its platform from August 2017 to February 2018. Breakdowns of February 2018 included the following:

Source: Crowdfund Insider

 

Woodford-backed Atom Bank grabs £149m as Spanish bank BBVA ups its stake (City A.M.), Rated: AAA

Challenger bank Atom, which counts rapper Will.i.am as a board adviser, has today grabbed £149m in its latest capital raising.

BBVA, which invested £85.4m and has ploughed in a total of £167m so far, upped its stake to 39 per cent and said the new investment signalled its “confidence in both the business strategy and management team”.

Augmentum’s fintech fund exceeds crowdfunding target to raise £695,000 (Peer2Peer Finance News). Rated: A

A VENTURE capital firm that has a stake in Zopa has breezed through its crowdfunding target to hit £695,000 before closing to new investments, and now looks set to raise £100m from a London flotation.

The initial £500,000 crowdfunding target was hit within 24 hours.

LendInvest Funds £5.5 million Development Deal on Historical Glaswegian Location (CrowdFund Insider), Rated: A

LendInvest also reported that construction is expected to be completed by late October 2018. The total GDV is forecast at just under £8.5 million.

Ablrate considers buying Collateral’s loan book (Peer2Peer Finance News), Rated: A

BUSINESS lender Ablrate is considering buying the loan book of Collateral, the peer-to-peer lending platform that recently went into administration.

Ablrate’s chief executive David Bradley-Ward said he has contacted Collateral’s administrators to find out how it can help.

LATTICE80 opens New Global Headquarters in London (LATTICE80), Rated: B

Global Fintech Hub LATTICE80 strategically relocates its global headquarters from Singapore to London.

LATTICE80 announced its plan to expand into several cities globally including London, New York and Seoul. By relocating its global hub to London, it can better support its global expansion plans in Europe, Asia and US this year. LATTICE80 will still keep the operations in Singapore to cover Southeast Asia.

European Union

Business Borrowers Should Think Outside the Bank (Payments Journal), Rated: A

Peer-to-Peer lending for small businesses is not new, as those of us on this side of the pond can recall from Lending Club and Prosper, and surely not without lender risk. One of the points made in this piece is that SMEs in Scotland account for ‘more than half’ of all private sector employment.  This is not dissimilar to the world in general, although SME definitions vary widely. In the U.S. for example, there are about 102 million people employed and we would estimate that roughly 60% work for businesses with less than 100 employees. Among these are about 24 million businesses with no employees (sole-proprietors).

They key to this business space however is to help fill a liquidity gap in the market that banks are either unwilling or unable to accommodate, given capital regulations, asset risk ratings, liquidity ratios and so forth.

Real estate crowdfunding company Housers teams up with Redpiso (PropertyPortalWatch), Rated A

The participative real estate financing platform Housers has signed a collaboration agreement with Redpiso so that its promoters appear on the website of this real estate company, the two companies reported today.

 

Capital Markets Union (European Commission), Rated: B

Commission presents Action Plans on sustainable finance and financial technology and adopts legislative proposal on crowdfunding

Action Plan on Financial Technology

The Action Plan sets out 23 steps to enable innovative business models to scale up, support the uptake of new technologies, increase cybersecurity and the integrity of the financial system.

Legislative proposal on crowdfunding

The Commission also put forward new rules that will help crowdfunding platforms to grow across the EU’s single market.

 

International

Is a new and better culture evolving in the credit market? (AltFi), Rated: AAA

The promise of direct lending 2.0

The fastest-growing and potentially huge segment of private credit is being brought about by tech and data powered lending platforms – Direct Lending 2.0. These groups have evolved from their P2P roots. Business models are being re-examined, which is healthy. Several, such as Auxmoney, Funding Circle and Lending Club are now large originators and servicers of SME and consumer credits direct for institutional investors. Just one UK-based platform lender originating SME credits of around 100,000 Euros per clip made more loans of that size to UK companies than the entire UK banking system managed in Q4. This potentially vast capital market has the potential to be a sustainable alternative to the banking system.

The arrival of credit culture 2.0?

In this context it was interesting to see Patty McCord, world-beating Netflix’s ‘Chief Talent Officer’ (we don’t see many of those in the credit market) recently join Lending Club.

Meeting the Fintech Challenge in Digital Consumer Lending: Strategies and Technologies for Innovation (Celent), Rated: A

Digital lending is not limited to fintechs; banks and credit unions have many strengths which, when combined with digital technology, will enable them to thrive long after the Fintech Era ends.

Source: Celent

Finastra, Microsoft form strategic alliance to shape future of financial services software (RealWire), Rated: A

Finastra and Microsoft have formed a strategic alliance to deliver secure, flexible and cost effective financial services cloud solutions. As part of the alliance, Microsoft Azure, Microsoft’s enterprise-ready trusted cloud platform, will underpin FusionFabric.cloud as Finastra’s strategic cloud platform. In addition, Finastra will launch a selection of its global payments and retail banking products on Azure over the course of this year.

India

This husband-wife duo makes AnyTimeLoan a reality (Your Story), Rated: AAA

Keerthi is an engineering graduate and an alumnus of IIM and ISB with over 14 years of experience across financial service and infrastructure sectors. He co-founded the AnyTimeLoan along with his wife Neha Jain, 32, who is a Chartered Accountant by profession and has over nine years of experience in taxation, compliance, and audit. She was associated as Partner in a CA firm before she took over ATL as co-founder wherein she handles entire finance, compliance, etc.

ATL has also applied to the RBI and is in the process of seeking NBFC P2P license.

For the financial year 2017-18, it is clocking revenues worth Rs 300 lakh, with total loans disbursed around Rs 39.8 crores. It also claims to have a default rate of less than 0.23 percent.

Africa

Africa’s banks lag behind on innovation in financial services (Financial Times), Rated: AAA

African central banks are stifling development by failing to keep up with financial services innovation, according to the head of a UN economic agency and industry executives.
Penetration of mobile money is more than 90 per cent in countries such as Kenya, where Safaricom, a telecoms provider, developed the Mpesa platform in 2007. But it is only 1 per cent in Nigeria.

Meanwhile, some central banks, such as in Tanzania, allowed innovations such as payments between different telecoms operators three years ago while others still ban them.

Many financial services companies, such as mobile-based micro-loan companies, have escaped formal regulation in most African countries as central banks and telecoms regulators struggle to categorise them.

Authors:

George Popescu
Allen Taylor

Tuesday November 15 2016, Daily News Digest

Tuesday November 15 2016, Daily News Digest

News Comments Today’s main news: Prosper has new CEO. Today’s main analysis : 7 critical changes of the maturing FinTech sector. Today’s thought-provoking articles: UK’s FinTech sector is nervously waiting for the final Brexit outcome. Will EU regulate FinTech? Bank of Indonesia sets up a FinTech office. United States Prosper has new CEO GP:” This is a huge […]

Tuesday November 15 2016, Daily News Digest

News Comments

United States

United Kingdom

European Union

China

India

Asia

News Summary

United States

Prosper Marketplace Names David Kimball Chief Executive Officer (BusinessWire), Rated: AAA

Prosper Marketplace, a leading online marketplace for consumer credit, today announced that the company’s board of directors has named David Kimball Chief Executive Officer. Kimball succeeds Aaron Vermut and the appointment is effective December 1, 2016. Vermut has served as the CEO of Prosper Marketplace since March 2014 and will retain his seat on the company’s board of directors.

Bracing for seven critical changes as fintech matures (McKinsey&Company), Rated: AAA

For the past decade, fintech companies—technology firms that focus on financial products and services—have moved quickly, forcing incumbents to rethink their core business models and embrace digital innovations. But now, the fintech industry is itself maturing and entering a period of rapid change. Companies wondering how they will fit into this new era must first understand the forces that are pushing the changes.

While the industry will undoubtedly continue to expand as its customer base grows and investor appetite remains unsated, changes are imminent. Indeed, the very concept of what comprises fintech will shift. As the industry evolves, it will play a role well beyond financial products and services, individual companies will vie to become undisputed leaders by size and breadth, and ecosystems will develop that have a tight grip on customer loyalty.

This new fintech era is being shaped by changes in market conditions, new regulations, and shifts in consumer demands and behaviors.

Expanding scope

The scope of products and services offered by fintechs is expanding rapidly. The shift brings fintechs away from a focus on frontline activities to a broad engagement throughout the value chain.

 

Increasing diversity

The fintech industry is also becoming more diversified, with a wide variety of business models seen across geographies, segments, and technologies.

Improving collaboration

Collaborative partnerships will become increasingly important as fintechs seek scale and traditional financial institutions seek digital expertise.

Impending consolidation

As the industry continues to mature, fintechs will likely enter a period of consolidation, with larger players turning to mergers and acquisitions to satisfy their expansion goals.

Normalizing valuations

Valuations of fintechs are also normalizing as investors become more cautious and start favoring companies with proven track records.

Shifting regulations

Not surprising for a new industry, the regulatory regimes affecting fintechs are also evolving swiftly and will significantly influence how the industry develops. In many markets, regulators are playing a more proactive role in overseeing the industry, often encouraging its development, for instance by following a sandbox—or test and learn—approach that allows fintechs to experiment without impacting the entire financial system.

Emerging ecosystems

As digital offerings become more mature and interconnected, vast ecosystems will develop that span multiple industries. In many instances, fintechs will become submerged in these ecosystems, representing, like many others, a component of a much broader digital network.

StreetShares Foundation and JPMorgan Chase Partner to Give Veterans $ 10,000 in Monthly Business Awards (PR Newswire), Rated: AAA

StreetShares, the lending and investing community for veterans and their supporters and creators of the Veteran Business Bond, recently announced the formation of the StreetShares Foundation. The goal of the StreetShares Foundation is to inspire, educate, and support veteran small business owners. JPMorgan Chase & Co. is partnering with the StreetShares Foundation to provide up to $10,000 each month in Veteran Small Business Awards.

The StreetShares Foundation plans to give three Veteran Small Business Awardseach month to eligible veteran and military-spouse small business owners:

  • First Place – $5,000
  • Second Place – $3,000
  • Third Place – $2,000

One unique feature of the new Veteran Small Business Award program is the focus on public participation. StreetShares Foundation encourages everyone who supports veterans and entrepreneurship to participate in voting for their favorite veteran business at StreetShares.com/Foundation. Finalists will be presented for public vote each month.

SEC Should Take Lead on Regulating Fintech, GOP Commissioner Says (Morning Consult), Rated: A

The Securities and Exchange Commission should play the leading role in regulating financial technology, said Commissioner Michael Piwowar, the lone Republican on the panel.

The statement, made at the agency’s fintech forum on Monday, could set the stage for a turf battle among agencies like the SEC, the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau as they grapple with how to police the emerging industry. The OCC is weighing a national charter for fintech firms and said it will release a paper on the matter by the end of the year.

Real Estate Marketplace Roofstock Raises $ 20m Series B (Biz Journals), Rated: A

Roofstock (www.roofstock.com), the leading online marketplace and transaction platform in the $2 trillion single-family rental (SFR) sector, today announced $20 million in Series B financing led by Lightspeed Venture Partners, with substantial participation from existing investors including Khosla Ventures, Bain Capital Ventures, Nyca Partners, QED Investors and SV Angel. Roofstock has raised a total of $33.25 million in equity since the company’s formation in May of 2015.

The company has developed a proprietary marketplace for investors to find, evaluate and invest in single-family rentals online with tools and transparency never before available to either retail or institutional investors. Since its public launch in March of this year, the company has expanded to serve 10 markets, engaged thousands of registered users, grown its transaction volume by 400% from Q2 to Q3, and significantly expanded its inventory and seller network.

Robo-advisers sound off to SEC about rule changes for automated advice (Investment News), Rated: A

The SEC hosted a forum of financial technology experts Monday to discuss the impact of innovations in investment advice and other financial services. SEC staff is considering whether further guidance or even new rules are needed to protect investors.

Automated-advice providers, often called robo-advisers, register with the Securities and Exchange Commission as investment advisers and are subject to the Investment Advisers Act, which requires clients’ interests to come first when providing recommendations, among other standards.

Regulators have questions about how that happens when recommendations are generated by algorithms, and in May the SEC and the Financial Industry Regulatory Authority Inc. alerted investors to the risks associated with using a digital provider over a human.

iCapital Network Marks Two Year Anniversary of Platform Launch (Yahoo! Sports), Rated: B

iCapital Network today announced it has surpassed $2 billion in platform assets since the launch of its online alternative investment platform two years ago. The firm’s proprietary technology has helped to rapidly democratize private investments such as private equity and hedge funds by connecting individual investors and their advisors to asset managers through a streamlined and secure digital interface.

1031 Crowdfunding, LLC Ranked Among Top 10 Real Estate Crowdfunding Sites (PR Newswire), Rated: B

1031 Crowdfunding, LLC announced today that the Company moved up in the rankings for the 2016 Top 100+ Real Estate Crowdfunding Sites to #10 overall and maintained its position as #1 ranked Real Estate Crowdfunding site for 1031 Exchanges.

United Kingdom

THE U.K.’S FINTECH SECTOR IS WAITING NERVOUSLY FOR THE BREXIT OUTCOME (Newsweek), Rated: AAA

This week, one arm of the British government’s post-Brexit outreach strategy extends to Singapore. A mission organized by the Department for International Trade, one of two new bodies set up by Theresa May to handle the U.K.’s post-Brexit future, is heading to the Asian city-state, bringing in tow nine companies from Britain’s booming FinTech (financial technology) sector, as well as Simon Kirby, a Treasury minister.

The government is pitching it as a landmark event. But this is just the first round in a long fight.  Brexit could well mean an end to the free movement of people from Europe—something highly prized by talent-hungry technology businesses—and could threaten the “passporting” rights that allow British financial services businesses to ply their trade throughout the bloc. It has some work to do to keep the sector strong.

But now, like everybody else, FinTech businesses are waiting to find out what Brexit means for Britain. They do so with some trepidation: of 12 leading FinTech companies that Newsweek surveyed for this piece, all but one were concerned about the referendum vote’s impact on their business, and 10 rated the continuation of passporting rights as either vital or important for their future success.

Fintech Platform Revenues for Lending & Financing to Exceed $ 10bn by 2020 (PR Newswire), Rated: A

Juniper Research has found that Fintech platform revenues to support lending and financing are set to reach $10.5 billion globally by 2020, doubling the $5.2 billionexpected this year. The analyst house claimed that growth would be driven by a combination of factors including:

  • an acceleration in P2P (peer to peer) lending;
  • crowdfunding becoming a viable alternative to traditional lending mechanisms;
  • the deployment of next generation analytics platforms.

The new study, Fintech Futures: Market Disruption, Leading Innovators & Emerging Opportunities 2016-2021, argued that, in the absence of credit checking bureaus in emerging markets, applicants’ social media activity will be a deciding factor for their loan applications, with suppliers developing equivalents to credit scores so that lenders can gauge their risk exposure.

OFF3R Relaunches Alternative Asset Investment App with Majority of UK Platforms (Crowdfund Insider), Rated: A

OFF3R has relaunched its updated site that allows investors to access peer to peer lending, property / equity crowdfunding and managed investment platforms in a single application. The multi-channel platform was said to have received a “total overhaul” for both its desktop and mobile version.

OFF3R was initially focussed on the equity crowdfunding sector. The new marketplace will allow investors to sign up for free and subsequently discover 100’s of investment opportunities from some of the leading alternative investment platforms in the UK and Europe.

Lossmaking online wealth manager Nutmeg raises £30m (Financial Times), Rated: A

Nutmeg, the lossmaking online wealth manager, has raised £30m from international investors in a deal that underscores the belief that low-cost “robo-advisers” will reshape financial advice even though firms have had limited success so far.

The London-based company, which posted pre-tax lossesof £9m this year, has attracted £24m from Convoy, Hong Kong’s largest listed financial advisory firm, as well as £6m from its existing backers. Nutmeg said it was considering using the funds to expand into Asia.

The funding round is the largest in a UK fintech company since the country voted to leave the EU. It doubles the total investment in Nutmeg, which offers low-cost automated online advice and was launched in 2011.

Alternative investment ops gaining pace, OFF3R (IBS Intelligence), Rated: A

Equity crowdfunding platforms raised £216.25 million and P2P facilitated a combined lending of £2.6 billion over the last year, according to OFF3R research. The marketplace for alternative investments has launched an index outlining month-on-month performances of equity crowdfunding and P2P lending platforms. It analysed the likes of Seedrs, Crowdcube, Syndicate Room, Angels Den, Envestors and The House Crowd. The P2P lending platforms examined were Zopa, Landbay, RateSetter, ArchOver, Marketinvoice, Lending Works, Funding Circle and Thin Cats.

Sharia-compliant P2P lenders could enter market, banker reveals (Bridging & Commercial), Rated: A

Speaking to Bridging & Commercial, Maisam Fazal, head of commercial finance at Al Rayan Bank, admitted that there may be a gap in the market for alternative finance such as P2P lending.

“I know I have a lot of contacts working on [Sharia-compliant P2P] right now, trying to get this on the market.

Despite welcoming more firms to the Islamic finance market, Maisam suggested that rates as low as Al Rayan’s could make it off-putting for potential new entrants.

Finstar appoints CEO to oversee new fintech investment unit (Finextra), Rated: B

Private equity outfit Finstar Financial has appointed Mark Ruddock from Wonga to oversee a new corporate venture group that will look for opportunities in the fintech space.

Ruddock has been appointed as CEO of FinstarLabs, a special-purpose investment vehicle aimed at expanding the PE firm’s fintech portfolio.

European Union

EU Commission Puts Fintech Review on Agenda for 2017 (Fortune), Rated: AAA

The European Commission aims to propose recommendations for financial technology firms early next year, taking a first step towards assessing the risks and rewards presented by a sector that is shaking up traditional banking.

Announcing an internal task force meant to propose recommendations for the sector in the first half of next year, EU financial services commissioner Valdis Dombrovskis said technological innovation in finance was a development to be encouraged.

The Commission did not clarify whether fully-fledged regulation is on the cards, but some regulatory changes appear likely.

Vattenfall: Anna Borg Appointed Senior Vice President for Business Area Markets (BusinessWire), Rated: A

Anna Borg, currently Senior Vice President and head of Klarna’s commercial operations in the Nordics, has been appointed Senior Vice President of Vattenfall’s Business Area Markets. Anna Borg will be a member of Vattenfall’s Executive Group Management and report directly to President and CEO Magnus Hall. She will take up her new position 1 April, 2017.

During the past two years Anna Borg has headed Klarna’s, a leading European fin tech player, online buying and payment solutions business in the Nordics. Before that she spent 18 years at Vattenfall, holding numerous management positions, including heading the business development of the market and trading operations.

Manage your own property portfolio with Housers (The Olive Press), Rated: A

3. In what way is real estate crowdfunding and Housers different?
In regular real-estate investment, your money is invested in either one or a very few properties and you need large amounts to be able to participate in this market. Via Housers, everybody can participate in the real estate market for a minimum investment of just €50, and in up to as many properties as they like.

5. Why should people choose this way to invest?
It allows them to diversify their investment, thus reducing the risks. Because Housers manages the whole process, from purchase to lease to sale, the customer doesn’t have to worry about paperwork, tenants etc.

8. How do people make money?
Housers make money every month when dividends are paid, based on the rental income of each property; or, when the projected sales price is reached, they also share in the capital gains that the property has generated.

China

The Fintech Files: Will P2P Disrupt the Banks? (CFA Institute), Rated: A

Lu.com (陆金所) is one of the world’s largest players in the P2P market. Recently, I sat down with Gregory Gibb, CEO and chairman of Lu.com, in his office in Shanghai to discuss how the industry will evolve.

Is P2P a big enough market for financial institutions to enter?

They differ a lot by location. In the United States, the consumer market’s already been dominated by the banks. Lending Club and the like are eight or nine years into the business but still not very big.

If you go to places like India, Indonesia, or China, where . . . there’s a huge amount of consumer-borrowing need, there’s also a huge amount of retail investing need — and in the case of China, where the banks are 80%–90% non-retail because there are easier places to make money and it’s more socially rewarding to be a corporate banker than a retail banker — the market’s going to be big because the traditional players aren’t going to grab the consumer lending as fast. So the answer differs a lot in terms of scale in different countries.

Sounds like P2P can grow to be quite big in markets like China if it simply captures a slice of the pie.

The peer-to-peer market in China today is just north of USD$100 billion in loans outstanding. To say that the market will be a trillion US dollars within the next seven to 10 years is not a crazy number.

So why aren’t the banks going into P2P?

There is absolutely nothing stopping a bank from doing this. But why would a bank do P2P?

The funding cost is 1%, 2%, 3% on the deposit side and the credit card APR is 18%. Then they are making 15–16 points in gross margin. And if they went into a peer-to-peer model, they may have to give the investors 5% or 6%. So they’ve lost a couple hundred basis points of profit.

Fintech advances prompt lenders to become start up friendly (South China Morning Post), Rated: A

Finding the right partners with which to work and fostering an environment for fintech collaboration are posing challenges for lenders, as the relationship between big global banks and emerging financial technology companies shifts away from competition to more of collaboration.

Many large global banks in their current form are not easily compatible with agile and innovative financial technology start ups, due to their complex existing systems and legacy issues. Some managers responsible for working with fintech companies at financial institutions, speaking privately, bewailed their more senior colleagues’ inability to make the necessary changes to the way in which they operate.

“Most of the fintech companies are trying to sell their services to or partner with existing institutions,” said James Lloyd, fintech leader at EY. “But that does not mean that banks can forget the 5 per cent that are trying to compete with them,” he said.

It is for both this reason, and doubts about what their rivals might be doing, that banks are still concerned about fintech.

India

Here’s why India’s fintech sector could boom (Business Insider), Rated: A

The government made the surprise move in a bid to combat “black money,” or currency that is unaccounted for, and counterfeit currency. Consumers have until December 30 to exchange their R500 notes for new editions with enhanced security features, while limited numbers of new R2,000 ($39.70) notes have been issued. A replacement R1,000 note will be introduced in “due course,”

Asia

BI’s new ‘fintech office’ to ensure both innovation, security (The Jakarta Post), Rated: AAA

Bank Indonesia (BI) on Monday officially launched a financial technology (fintech) office to monitor the services offered by the young and thriving industry so as to ensure innovation continues and consumers simultaneously enjoy security.

BI governor Agus Martowardojo described the new office as an advisory hub for all fintech companies operating in Indonesia and as a facilitator to help the industry expand further and ensure greater financial inclusion in a country where half the population does not have access to banks.

As part of its office, BI plans to monitor the development of fintech companies through its regulatory sandbox, a sort of laboratory where ideas on innovation are shared between regulators and fintech players so they can be tested and evaluated with the central bank’s supervision before they go commercial.

B2B FinTech Startup MC Payment Grabs Funding (PYMNTS), Rated: B

Singapore-based B2B FinTech firm MC Payment announced a new funding round, as well as global expansion, late last week.

Reports Friday (Nov. 11) said MC Payment raised $3.5 million from an investment firm in Thailand, as well as participation from Aura Funds Management, tryb Capital and Perle Ventures. The funds have also allowed the company to enter the Thailand market, reports said.

Authors:

George Popescu
Allen Taylor