News Comments Today’s main news: Top customer-rated lenders by loan product. Kabbage, Ingo Money partner on SMB loan disbursements. RateSetter offers 100 GBP cash incentive to ISA investors. TransUnion to buy Callcredit in Europe for $1.4B. Today’s main analysis: Bank earnings. Today’s thought-provoking articles: P2P lending vs. stock markets. Using psychometry for loan disbursement. Don’t fear the robo-advisor. Bank earnings. Fintech leaders […]
Strong bank earnings. AT: Marcus and Bank of America are looking good on the lending side of things, even alternative models like mobile banking. These banks are the industry’s leading bank competitors.
LendingTree, the nation’s leading online loan marketplace, today released its quarterly list of the top customer-rated lenders on its network based on actual customer reviews for the first quarter of 2018.
The top lenders for the first quarter by product are:
Kabbage and Ingo Money have teamed up to expedite the payout of loans into the accounts of small and medium-sized businesses in real time. The move is important news for small businesses in need of a fast loan payout to capitalize on new opportunities or continue operations.
Thanks to the new partnership, when businesses get a loan from Kabbage, the Ingo Money technology will be used to deliver the funds to the applicant’s account right away. The loans are going to be paid out using Ingo Money’s push platform with push-payments-in-a-box technology.
The partnership was announced on pymnts.com at which time Kabbage President Kathryn Petralia explained the importance of accelerating the delivery of funds.
Goldman Sachs delivered its highest revenue in 3 years, also driven by a boost from its fixed income trading business. The bank continues to invest in Marcus and has originated $2.3 Bn in loans life-to-date and has $17 Bn in deposits. Marcus is only one part of GS’s broader lending strategy. We note in the slide below from GS’s earnings call that Goldman has substantially increased its loan book from $64 Bn at the end of 2016 to $81 Bn at the end of 2017 by expanding collateralized lending to high net-worth clients and securities-based lending.
Bank of America’s total revenue grew by 3.7% to $23.3 Bn driven by its Consumer business which saw profits grow by $0.8 Bn to $2.7 Bn, and 32 straight quarters of loan growth. Average loans increased by $22 Bn to $280 Bn driven by growth in mortgages and credit cards. Provision for credit losses increased by $97 Mn to $935 Mn, driven by credit card seasoning and loan growth. The net charge-off ratio increased slightly to 1.27%. Bank of America is the leader in mobile banking and active mobile banking users increased 12% YoY to 24.8 Mn.
Technology advances have infiltrated every corner of finance, including the world of wealth management. While few can argue with the positives of automated, algorithm-based portfolio management platforms, the advent of the cost-efficient, dispassionate robo-advisor has struck fear into the heart of many a financial advisor and fund manager, who see these technology options as a threat to their business practice.
FIRST, WHAT ARE SOME BENEFITS OF A ROBO?
Lower fees. Most of these robo advisors charge less than 1%, with some south of .20%, versus the standard investment advisor fee range of 1-3% on a client’s portfolio.
Elimination of emotional trading. With a robo advisor executing a passively managed program, there is no chance of active management decision-making being affected by human emotional reaction to markets.
Index-like performance with tax efficiencies and global access. Most robo platforms feature ETFs that aim to produce results like an index, but with lower expense ratios than their equivalent counterparts found in mutual funds. For individuals focused on low cost but benchmark performance in a portfolio, a mix of ETFs can be a desirable option long term.
Barclays — the bank behind popular co-branded cards including Uber, American Airlines, JetBlue and a host of other retail partners — is using customer data to suggest products and understand the root causes of customer complaints. It’s an approach large banks like Capital One and JPMorgan Chase as well as startups like Credit Karma and MoneyLion are using to push insights and recommendations that are most relevant to the customer’s spending behavior and product preferences.
With all this data gathering, how do you avoid creeping out the customer? We do a lot of testing, we are very thoughtful about products we develop and ways we communicate with customers. We don’t want to be in a situation where the customer is “creeped out”. We try to be very sensitive to that. We do a lot of data analysis and co-create experiences and products with customers to get a sense whether something will resonate or not. It’s an interesting time. It becomes straddling between convenience and relevance for the customer and going too far, [the sense of which] is different for each customer.
6th Avenue Capital, LLC (“6th Avenue Capital”) announced today the launch of its first “Merchant Madness” promotion. Throughout the month, and coinciding with the annual NCAA Men’s Basketball Tournament, 6th Avenue Capital will award points for all new ISOs, Merchant Cash Advance (MCA) submissions, approvals and funded deals.
In addition to the new Merchant Madness promotion, 6th Avenue Capital also recently announced competitive underwriting guidelines, buy rates and incentive programs for 2018.
There are a few providers already in business. CountingUp is a new service that integrates a business account with automated bookkeeping. Income and expenses are automatically categorised, and it can produce profit-and-loss accounts, raise invoices and file taxes. Sole traders will pay £9.95 a month; limited companies £19.95. Cash can be deposited via the Post Office for a £1 fee or via Paypoint for a 2.5% commission. Cash withdrawals cost £1.
Also in the works is CivilisedBank, which gained its banking licence in May last year, but released it earlier this month to give itself more time to develop its technology platform. CivilisedBank proposes a branch-free service for more established companies, and will focus on customer service by employing up to 80 “local bankers” for businesses with a turnover of more than £1m. It hopes to provide savings, loans, current accounts with overdrafts, and foreign exchange. It will also offer savings products to non-business customers.
The recent warning that banks are no longer making the effort to get to know small- and medium-sized businesses when they apply for a loan, struck a chord with Andrea Linehan.
Linehan, the commercial director with Grid Finance, is keen to stress that Grid’s model is much more business friendly, with staff around the country eager to dig into the fine details of a business hungry for capital.
LexinFintech Holdings Ltd. (“Lexin” or the “Company”) (NASDAQ:LX) announced that it expects to invest RMB1 billion in cooperation with its partners over the next three years, to better serve its customersand to expand the use of credit services.
U.S. credit reporting agency TransUnion (TRU.N) on Friday said it will buy UK consumer data provider Callcredit for 1 billion pounds ($1.4 billion) from private equity firm GTCR, expanding its operations into Europe for the first time.
The deal comes at a time when credit-checking services are growing, in response to the proliferation of non-traditional lenders to consumers, such as payday loan providers and online lenders.
As the largest economy in the European Economic Area, the German market offers many opportunities for fintech innovation. Although some of the initial disruptive energy has been mitigated by regulatory challenges and a soft trend towards consolidation, a second phase of solid and mature business development is on the horizon.
Important players in the market include:
N26 – an app-based direct bank;
Kreditech – offers data-based bank lending;
Raisin – offers a pan-European marketplace for savings products;
Spotcap – offers loans for small and medium-sized enterprises;
Auxmoney – operates an online platform for peer-to-peer money lending services;
Smava – offers a loan comparison platform;
Liqid and Scalable – both offer online portfolio management to retail customers;
Exporo – offers an equity crowdfunding platform for real estate investment and bitbond, a bitcoin-based peer-to-peer lending platform; and
Finleap – while not a fintech company itself, it offers a fintech company builder ecosystem.
“It was clear the loan products for small businesses were just not good enough,” says Moshal. He, and joint CEO Beau Bertoli, 34, set out to solve that problem in 2011 with Prospa, their Sydney-based online lender. Last year, Prospa provided over A$500m (£273m) in small-business loans, which are funded by bundling the loans together and selling them on to institutional investors. Interest rates start at around 12%, stretching into the mid-20s depending on risk.
Prospa’s draw is its speed in processing applications, with funding coming the same day. “We aren’t necessarily cheaper than a bank, but we offer speed, convenience and more access to credit,” says Bertoli. A A$25m funding round last year valued the business at A$235m, and the lender is now testing the waters for a stockmarket listing.
Gurgaon-based digital payments firm True Balance has reportedly raised $23 million in a bridge round from a clutch of foreign institutional investors.
According to a report in The Economic Times, Japan-based Line Ventures Corporation, Korean search engine Naver, Korean lender Shinhan Bank, TS Investment and other investors participated in this latest round.
Investment in Financial Assets has been increasing in India. High return assets such as stocks and Peer to Peer (P2P) lending are increasingly sought after by investors.
It depends on the knowledge and risk profile of the person. While P2P lending is simple, stocks are pretty complex and require a lot of knowledge. However, both have the potential to provide good returns.
Indian households tend to have the highest savings in the world – at about 30 percent of income. Surprisingly, this does not translate into investments in the same proportion. Only about 3.2 crore people invest in the country’s stock markets – that is less than 3 percent of the population.
Although news reports from the Q4 2017 show that banks are increasingly becoming open to lending more money even as lenders are expected to loosen credit scoring criteria in Q1 2018, they recorded an 8 percent increase in bad loans recorded in 2017.
Indeed the market is vast for Kiakia and other competing online loan services. Statistics from Nigeria interbank settlement system shows that there are over 31 million verified bank accounts in Nigerian banks.
For Kiakia about 75% of this number has never accessed any form of consumer or business credit from any financial institutions.
Nomura Asset Management, a wholly owned subsidiary of Japan-based Nomura Holdings, has recently agreed to buy majority stake in Tokyo-based robo-advisory services provider 8 Securities Inc and a minority stake in Hong Kong headquartered parent company 8 Limited for JPY2.7bn ($25m). Expect major international asset managers to build similar distribution channels via the purchase of other established robo-advice FinTechs, says leading data and analytics company GlobalData.
Compared to most robo-advisers, 8 Securities has been in the market for a while. Chloe, its robo-advice platform, was the first in Asia to be offered via a mobile app and it currently has a presence in Hong Kong and Japan.
Brazilian fintech startup Nubank announced earlier this week the launch of its new facial biometrics feature, AccessoBio. According to various reports, the fintech firm will now use the AccessoBio tool to help prevent identity fraud in credit card transactions.
ZDNet noted that Nubank believes the introduction of biometrics to its technology is a positive for customers due to the fact it does improve the mobile-based experience around the credit card requests and reduces the possibility of false rejects while reducing identity fraud possibility.
News Comments Today’s main news: OnDeck collaborates with Ingo Money, Visa on real-time SMB lending. Affirm’s new mobile app allows consumers to borrow money for almost any online purchase. N26 readies for launch in the UK. P2PFA reports over 700M GBP in Q3 new lending. Fincera issues $1B in Q2 lending. Kabbage automates SMB lending in France, Italy with ING partnership. […]
SoFi priced itself at twice its valuation. AT: “But why? Did SoFi really believe it was worth $8B, or was this a fishing expedition to see who may be interested down the road when the company could command that valuation?”
Why Charles Schwab held talks on SoFi. AT: “Very interesting. Schwab likely sees the technology writing on the wall. If they are to remain relevant in the 21st century, the company will either have to develop new technology on its own or partner with a company that already has the technology. So this makes me wonder, will they go looking for another company?”
OnDeck (NYSE: ONDK), the nation’s largest online lender to small business, announced today agreements with Ingo Money and Visa to enable real-time1 funding of loans to small businesses via their debit cards, powered by Visa Direct. OnDeck will be the first company in the online lending industry to offer real-time access to capital via a customer’s existing small business debit card.
The move by OnDeck comes in response to small business demand for improved cash flow and faster payment experiences. A recent survey found 70% of small business owners report they have a small business debit card, and of those without debit cards, 87% of them said they would get a new debit card to take advantage of real time transfers. The virtual card grants you a one-time card number, an expiration date, and a three-digit security code, which can then be used to make singular online purchases, while the repayment plan is managed through the app.2OnDeck plans to use Visa Direct through Ingo Money’s technology platform to disburse loan proceeds securely in real time to its line of credit customers via their existing small business debit cards. Visa Direct is Visa’s real-time push payments platform allowing companies to leverage Visa’s global scale to develop faster payments solutions for ubiquitous reach to consumers or small businesses with a debit card.
Ingo Push, the turnkey push payments service from Ingo Money, allows OnDeck customers to receive funds via a vast network of eligible debit or prepaid card accounts, including eligible Visa cards; online and mobile wallets; and a network of more than 40,000 cash-out distribution points.
SoFi reportedly mulled a potential sale earlier this year, but the talks evaporated over a hefty asking price. After receiving a non-binding offer of $6 billion from a foreign bank, the online lender pegged its target acquisition price at $8 billion to $10 billion as it negotiated with several US companies, including Charles Schwab, per the Financial Times. That price would have ranked the deal among the second most valuable VC-backed fintech companyin the US. It’s also one of eight American startups that have raised $500 million+ rounds this year.
But while SoFi could likely fetch a relatively high acquisition price, the $8 billion to $10 billion figure is far more than it appears to be worth. In February, the online lender raised a $500 million round at a valuation of $4.4 billion—and since then, its value has likely dropped amid sexual harassment allegations at the company.
Citing people familiar with the matter, the Financial Times (paywall) reported the deal talks with Schwab were prompted by a $6 billion offer from a foreign bank after SoFi raised $500 million in funding led by Silver Lake. With a more than $4 billion valuation after that, the unnamed foreign bank expressed interest in acquiring SoFi. That prompted the online lender to reach out to other potential suitors aiming to fetch $8 billion to $10 billion in a sale.
At first blush, a deal with Charles Schwab may not make sense, given it isn’t in the online lending business. But SoFi does have a wealth management unit that would give the San Francisco discount brokerage access to more customers and thus more assets under management. It’s also a low-cost provider on that front, something very much in Schwab’s wheelhouse. According to SoFi’s website, the company doesn’t charge customers for the first $10,000 invested and charges 0.25% per year. It also has a team of live advisors that give customers advice and ETF portfolios that are curated by the company. SoFi also has a large customer base, particularly of millennials, that would be attractive to Schwab. Earlier this year ex-CEO Cagney predicted SoFi would end the year with 500,000 customers.
Lending startup Affirm, founded by PayPal and Yelp co-founder Max Levchin, is out to destroy the credit card, or at the very least make a noticeable dent in its utter ubiquity. The company, which began in 2012 by offering simple and transparent loans for web purchases, is today launching a mobile app to the public that acts as a virtual credit card, so it can be used as a line of credit with no strings attached for pretty much any online purchase. The app is available now for iOS and Android.
The virtual card grants you a one-time card number, an expiration date, and a three-digit security code, which can then be used to make singular online purchases, while the repayment plan is managed through the app. To use the service, you need to provide proof of your identity, but credit is extended only for the item you want to buy, with the company determining your likelihood to pay back the loan based on your current credit and the total amount being lended.
You’ll need approval for every purchase you try to make, up to a maximum of $10,000. In total, Chou says Affirm has made more than 1 million loans for a total amount of more than $1 billion since it started roughly five years ago. It also now counts as over 1,000 merchants as partners, including mattress maker Casper, furniture site Wayfair, and Expedia.
Now, Affirm wants to extend its services to anyone and any merchant, by going directly to the consumer with a virtual card.
Although Affirm may offer as low as 10 percent APR, or in some cases zero percent for select partner merchants, you still run the risk of paying more for a purchase using the company’s virtual card than if you had a standard credit card. For those who are simply bad with money and borrowing, it has the same pitfalls as a credit card, though with a few more speed bumps and warning signs built in.
For every dollar of fraud, lending companies incur $2.82 in costs, which includes chargebacks, fees, interest, merchandise replacement and distribution, according to the LexisNexis Risk Solutions Fraud Multiplier. Large digital lenders, with over $50 million in annual revenue, are hit hardest by fraud in this space. These large digital lenders face a higher risk of successful fraud attempts than others within the lending space, but it really is a problem across the digital lending space, even with small and midsized digital lenders.
When BlackRock, the world’s largest asset manager with USD 5.7 trillion in AUM, decided to layoff talented stock pickers in favor of machines for portfolio management in March, it was a sure sign that times are changing.
The top performer in a group of the five leading robo advisors in the first eight months of 2016 generated returns that were encroaching on double-digit territory, and in some cases outperformed their more expensive mutual fund counterparts.
And it’s not just BlackRock that’s demonstrated a willingness to favor machines over stock pickers. Robo advisors as a category, which is comprised of approximately 100 firms, oversee USD 60 billion in AUM as of year-end 2016 across 15 countries, according to Deloitte. That amount is expected to balloon more than fivefold to USD 385 billion in a half decade, according to Cerulli Associates research.
A recent Capital One Investing survey says in times of extreme market volatility, millennials are the least likely generation to turn to a person for financial advisory services at 69%. In fact, millennials are the generation that place the highest value on robo-advisory services, evidenced by 65% of them saying automated financial advice “enhances their financial peace of mind,” according to the poll.
FS Card Inc., an emerging financial services leader for underserved consumers, today announced it has raised $150 million in financing to fund future growth. Through its Build Card product, FS Card will expand access to traditional credit and create an on-ramp into the financial mainstream for small-dollar loan customers. The new credit facility closing comes as FS Card wraps up a year of rapid growth with Build Card portfolio expansion of nearly 500 percent in 2017.
The funding will be used for sustained portfolio build as part of the company’s ongoing commitment to financial inclusion in a market where a new rule from the Consumer Financial Protection Bureau is likely to impact access to alternative credit products.
According to Prosperity Now and The Federal Reserve, more than half of Americans are credit invisible or subprime, while 47 percent do not have $400 to pay for an emergency expense. FS Card leverages its proprietary machine learning algorithms to actively meet the increasing demand of underserved consumers for fairly priced credit with a prime-like experience.
Fintech is a multi-billion dollar industry, with startups in the US raising around $18 billion since 2015, according to PitchBook and nearly 1,400 venture capitalist-backed deals. Two of the most valuable startups in the country — Stripe and SoFi — are in the fintech sector. And there are 11 fintech startups valued at more than $1 billion.
10. Kabbage — $1.3 billion
Kabbage is valued at $1.3 billion, according to PitchBook estimates, thanks to a $250 million investment round in August 2017.
9. Robinhood — $1.3 billion
The zero-commission, US-focused stock brokerage is valued at $1.3 billion following a $110 million funding round in April 2017.
Avant was valued at $2 billion after a $325 million funding round in September 2015.
Though its valuation makes it the fifth most valuable fintech startup in the US, it’s seen some rocky shores in the years since. In June 2016, the company reportedly laid off staff and lowered its monthly lending by half.
3. Credit Karma — $3.5 billion
Credit Karma scored a $3.5 billion valuation on a $175 million funding round in June 2015 which brought the company’s total funding to $368 million.
2. SoFi — $4.4 billion
SoFi was valued at $4.4 billion during its most recent round of funding in February 2017, which brought the company $500 million from investors. In total, the company has raised over $2 billion, including a $1 billion round led by SoftBank in 2015.
1. Stripe — $9.2 billion
Stripe was valued at $9.2 billion in its most recent $150 million funding round in November 2016. The company has raised a total of $440 million since its founding in 2010.
In response to overwhelming investor demand, Groundfloor, the only real estate crowdfunding platform that is open to non-accredited investors, today announced the launch of its Loan Origination Network for mortgage brokers and third-party originators interested in tapping additional real estate loan opportunities. The company has opened up its innovative real estate financing platform to brokers nationwide who now have the opportunity to provide customers with low cost capital for fix and flip projects.
According to a recent report from ATTOM Data Solutions, the estimated total dollar volume of financing for homes flipped in Q2 2017 was $4.4 billion, up from $3.9 billion in the previous quarter and up from $3.4 billion a year ago to the to the highest level since Q3 2017, a nearly 10-year high. Also, more than 35 percent of homes flipped in Q2 2017 were purchased by the flipper with financing, up from 33.2 percent in the previous quarter.
Key benefits for mortgage brokers and third-party originators:
Competitive rates from six percent
Unique deferred payment option
Closing in as little as seven days
Costs rolled into loan principal
Discounted fees for high volume partners
Partners assigned dedicated Business Development Manager
Mortgage industry veteran Debora Valentine joins the team as Senior Vice President, Business Development. Valentine brings more than 25 years of experience in sales to Groundfloor’s senior leadership team.
Alipay, the world’s leading third-party payment platform, today announced they are working with JPMorgan Chase, a global financial leader, toward a relationship by which Chinese consumers traveling in North America would be enabled to pay using their Alipay Mobile Wallet at Chase merchant clients.
The proposed relationship between JPMorgan Chase and Alipay would enable its acceptance at many of Chase’s merchants in North America. Through Alipay’s geolocation-based “Discover” function and push notifications within the Alipay app, Chinese travelers can locate merchants nearby, receive promotion information, and make purchase decisions. It also enables local merchants to better target and connect with Chinese consumers.
Approximately 10 million consumers are expected to originate a home equity line of credit (HELOC) between 2018 and 2022. This would more than double the 4.8 million HELOCs originated in the previous five-year period (2012-2016). The projection is part of a new TransUnion (NYSE:TRU) study that evaluated recent dynamics in the HELOC industry, and was released today during the Mortgage Bankers Association’s Annual Convention & Expo.
TransUnion projects 1.4 million new HELOC borrowers in 2017 and 1.6 million in 2018, about a 30% increase from the previous two-year period of 2015 (1.1 million) and 2016 (1.2 million).
HELOC Originations – 2017-2022 Include Projections
HELOC Originations (In Millions)
The TransUnion HELOC study found that rising home prices and the resulting increase in equity is beginning to fuel interest in HELOCs. The Case-Shiller home price index rose as high as 180 in 2005 and 185 in 2006 before dropping to 134 in 2012. By July 2017 it had risen again to 194, and is expected to rise in the next few years to well over 200.
According to the study, there were 4.9 million HELOC originations in 2005 when home equity stood at $13.3 Trillion. HELOC originations dropped to a mere 600,000 in 2011 as home equity declined to $6.3 Trillion. Home equity has once again risen to $13.3 Trillion in 2016, yet HELOC originations continued to be low at 1.2 million.
Who are the HELOC borrowers?
The study explored the primary reasons why consumers open HELOCs and estimated the percentage of HELOCs opened under each motivating reason.
Types of HELOC Borrowers
Defining this Type of HELOC Borrower
“Consolidate balances from other credit products, usually to a lower interest rate”
“Finance a large credit need (e.g., home renovation project)”
“Refinance a HELOC, often to change terms or to get a better rate”
“Concurrent with a mortgage origination, often used as part of a down payment”
“Standby, undrawn line of credit for a ‘rainy day’”
Four leading trade associations – Electronic Transactions Association, Innovative Lending Platform Association, the Marketplace Lending Association, and the Small Business Finance Association – commissioned a comprehensive survey of U.S. small business owners from Edelman Intelligence. The survey conducted by Edelman Intelligence found that a large majority (70%) of small business owners believe there are more credit options today when compared to five years ago, and 97% of those feel that the growing number of financing options is a good thing.
Key findings of the study include:
70percent of small- and medium-sized business owners say there are more lending options now, and 97 percent of those believe that the increase in options is a positive thing for their businesses.
Most small business owners reported using online small business lenders to help them expand their locations, make necessary hiring and equipment purchases, and help manage cash flow.
Of the small business owners considering taking out a loan in the next 12 months, close to 40 percent say they will consider borrowing from an online lender.
According to the study, 98 percent of small business ownerswho have used online lenders say they are likely to take out another loan with an online lender.
For many small business owners, online small business lending platforms are a popular alternativeto asking friends and family for a loan.
PeerStreet, a marketplace for investing in real estate-backed loans, is excited to announce its affiliate program at FinCon 2017. Backed by Andreessen Horowitz, PeerStreet’s platform provides investments in high-yield, short-term real estate loans. The newly launched program will allow PeerStreet to partner with the personal finance community to better serve both current and future investors.
PeerStreet aims to reach more investors through the affiliate program by working with financial writers and influencers to share thought leadership and market information about this unique space. In addition to high-conversion advertising opportunities, affiliate program partners will also have access to PeerStreet’s dedicated Affiliate Director, who can provide deep insight into PeerStreet’s service and offer tailored support.
Mastercardannounced it has tested and validated its blockchain and will be opening access to it via a set of three APIs published on the Mastercard Developers website. The APIs include the Blockchain Core API, the Smart Contracts API, and the Fast Pay Network API.
Mastercard will pilot the blockchain for use in the business-to-business space, implementing it to increase speed and transparency in payments and decrease costs for cross-border payments.
Mastercard’s blockchain operates independently of a digital currency.
Envestnet | Yodlee (NYSE: ENV), a data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services, today announced its integration with Fannie Mae through a pilot program to digitally validate borrowers’ assets. Fannie Mae will leverage Envestnet | Yodlee’s Risk Insight Solutions to fuel the Day 1 Certainty™ validation of assets offering, which gives lenders a faster and simplified borrower experience.
Over a four-decade career in financial services I have witnessed, experienced and participated in transformational change. The conversations around emerging technology like the ATM caused industry debate – consumers would never use a machine to make a withdrawal from their account. Credit cards not tied to a specific gasoline brand, local merchant or one of the giants of the catalogue sales world – Montgomery Wards, Sears and that upstart JC Penney – would never be accepted. Consumers would never do their banking over the telephone, and of course never accept online banking – remember the first versions using a floppy disk? And checks would always be the only way, other than cash, to pay for things (bill pay, PayPal, debit cards and other payment methods…all have dispelled that).
We should be concerned about the FinTechs. They are not a fad nor are they going away. They are very well capitalized, and they have revolutionized how to leverage big data in ways we can only dream of. They have challenged credit score lending structures by leveraging their ability to engineer data. They are mobile optimized, in fact they are mobile prevalent, and they strive for immediate decisions and funding. Where traditional lenders are still caught up in past practices making it difficult to refinance student debt, underwrite small business loans in minutes, grant signature loans at the point of purchase, or embrace new credit models, the FinTechs are quickly gaining ground in market share because they can do those things today.
And we have not evolved our cornerstone lending program, the signature loan, to compete not only at the POS for autos, but for personal improvements and major retail purchases as SOFI, Lending Club and so many other FinTechs have.
Robin Erickson, an Arizona snowbird, remembers the pitch she got from her life-insurance agent about LoanGo, a startup internet payday-loan company.
The Mount Vernon, Washington, resident said she was told that the investment would generate an 18 percent return, and she “more than likely” would get her money back in a year.
“I loaned him $30,000, and I haven’t heard from him since,” Erickson, a retired elementary-school teacher, told The Arizona Republic in a phone interview.
The Arizona Corporation Commission’s Securities Division alleges that Erickson and four other older investors were defrauded of a combined $250,000 after making investments in 2011 and 2012 with LoanGo.
Administrative Law Judge Scott M. Hesla on Oct. 10 sided with state regulators and ordered the men to pay a total of $250,000 in restitution to the five investors. The judge also ordered the men to pay penalties of up to $15,000 each for “multiple violations” of the state’s anti-fraud provisions.
The judge, in his ruling, noted that Billingsley failed to inform investors that their money would be used to repay business startup loans of $10,000 each to himself and Peterson. The judge also wrotethat investors were not told Billingsley received a $15,000 commission for obtaining their investments.
The judge noted that Billingsley was repaid his startup loan the same day one person invested $45,000 in LoanGo, and that Peterson was repaid the same day a different person invested $25,000 in the company.
It has been 20 years since the Alternative Investment Management Association published its first due diligence questionnaire, a template designed to standardize the diligence process by which investors decide if a particular management is right for them.
Now it has published a new questionnaire/template, covering a broader range of entities/strategies. Specifically, for the first time there are questions specifically covering private credit and private equity strategies. The new document also integrates what were formerly separate questionnaires specific to commodity trading advisers and fund of funds managers.
Banks have welcomed the statement of principles because they are non-binding, while fintechs are encouraged by the CFPB’s recognition of key issues in the debate.
Yet the principles could also lay the groundwork for future regulation if banks and fintechs cannot work out some outstanding issues on their own.
The most controversial aspect of data sharing is screen scraping. Banks loathe data aggregators’ practice of asking a consumer to provide their online banking login credentials, so the firm can scrape their account data. They argue it’s unsafe to hand out banking credentials and that aggregators bombard their servers with these requests, preventing actual customers from accessing their accounts.
The CFPB’s principles seem to discourage screen scraping without banning it.
Knight said the principle may encourage banks to directly provide data to third parties.
The CFPB’s principles around informed consent appeared the most stringent, suggesting that it’s not enough to just disclose what a company is doing, but disclosures must be done in language anyone can understand.
The principle may pose a challenge for banks and fintechs. How many companies send notifications about how they’re using and storing consumers’ data, in easy to understand language?
However, while Noreika again defended the OCC’s right to license non-depository companies on Thursday, he also said the agency has not decided whether it will “exercise that specific authority.” This is more ambiguous than the OCC’s previous stance, perhaps suggesting the regulator believes the measure won’t survive such strong opposition.
Noreika said there’s been progress here, as federal regulators are now more willing to engage in dialogue with each other and with fintechs.
The Robo Report, the first and only report on the performance and portfolios of robo advisors, published by BackEndBenchmarking, has been released for the third quarter 2017, the company announced.
The expanded Report now offers a first look two full years of a few robo advisors performance data, along with new sections that include interviews with WiseBanyan, Personal Capital and Betterment; the addition of Sofi, TIAA and WealthSimple; and upside/downside capture ratios for more specific quant on risk tolerance, as well as more detailed asset allocation and style analysis.
The company currently tracks Acorns, Betterment, eTrade, Fidelity Go, Future Advisor, Personal Capital, Schwab, SigFig, Tradeking, Vanguard, WiseBanyan, TD Ameritrade, Ellevest, Hedgeable and Merrill Edge, Sofi, TIAA and WealthSimple.
First Associates Loan Servicing announced today that they will be hosting an industry networking breakfast for Marketplace Lending and Investment Banking professionals the day prior to the American Banker Digital Lending + Investing Conference.
Hosted at Aureole Restaurant in Manhattan, this event will include a panel of marketplace lending superstars, including speakers from Prospect Capital, Macquarie, MoneyLion and more, who will discuss the state of the industry.
If you have interest in attending panel discussion and event, please click here to learn more.
CoinList, a provider of financial services for staging and managing initial coin offerings (ICOs), is spinning out of AngelList as a standalone company that will be led by former Sidewire CEO Andy Bromberg, it tells Axios.
Closely-watched German fintech startup N26 is recruiting a country manager to spearhead its launch into the UK.
A job listing on N26’s website says it is looking for someone to take “charge of the market entry of N26 in the UK.” The successful applicant will be “responsible for the operational setup and development of N26 in the UK market,” and should “build up the branding for N26 within the UK market in order to successfully attract and win new customers.”
THE PEER-TO-PEER Finance Association (P2PFA) has reported that new lending among its members equated to more than £700m in the third quarter of 2017, despite losing ‘big three’ platform RateSetter during the period.
The self-regulated trade body said on Monday that cumulative lending by the existing P2PFA platforms came in at more than £7.1bn by the end of September 2017.
The UK Peer to Peer Finance Association (P2PFA) has published their quarterly numbers on sector growth for the third quarter of 2017. Covering the period between July and September 2017, the P2PFA says the numbers confirm continued steady growth in levels of new lending and in the number of borrowers facilitating loans through peer-to-peer lending platforms.
Earlier this year LendInvest received the highest possible rating for the quality of our loan servicing from ARC Rating, a regulated European credit agency, for the third straight year. It’s a big achievement for any lender, but particularly an online lender.
Here are some of the things that ARC looks for when rating a lender’s servicing standards:
Open Banking refers to an open source technology that allows anyone to create apps and websites for the financial services sector. Developers use an application programme interface (API) to create software that allows customer data to be shared securely between banks and trusted third parties – with the customer’s consent.
The Open Banking Standard is publically available and can be accessed by developers when creating apps and websites. The final version of the Open Banking Standard is due to be in use by 2019.
Examples of Open Banking apps
Yolt is a money management app owned by ING Bank and launched in beta format in June 2017. Yolt allows users to view all their bank accounts, credit cards, bills etc. in one place – even if they are from different providers. Users can compare prices, including energy prices, and set budgets on their phone.
HSBC announced in September 2017 that it was testing an Open Banking platform that will allow its customers to view their current accounts, credit cards, loans, mortgages and savings from up to 21 different providers.
Wave offers a service for businesses to give clients access to all of their finances in one place. It acts as an invoicing service; tracks income and expenses to make accounting easier; allows for streamlined payment of staff and will leverage data from as many sources as possible. It also offers loans to clients by connecting with the online lender OnDeck.
DueDil is an app which uses data to make online due diligence passports for its clients so that they can prove their financial credentials.
Tandem collects the banking data of its customers from their banks, analyses their spending habits and provides suggestions for how they can save money.
As rents continue their inexorable rise, the appeal of living in inner London boroughs such as Camden – where the average monthly rent is £2,219 – is starting to lose its shine.
According to peer-to-peer lending platform Landbay, the central areas popular among students are being eschewed by graduates, who are looking to make the capital their long-term base.
Faced with spending up to 75 per cent of their take-home pay on rent, graduates looking to work in London are choosing to live in areas where they can remain in commuting distance but pay less. And with average student loan debts of more than £50,000 according to the Institute of Fiscal Studies, any savings are welcome.
Top ten outer London boroughs | Average rent and yield
Fincera Inc. (OTCQB: YUANF), a provider of online financing and e-commerce services for small and medium – sized businesses and individuals in China, has reported financial results for the second quarter ended June 30 , 2017.
According to their numbers, loan transaction volume across both CeraPay and CeraVest platforms for Q2 2017 totaled approximately RMB 6.9 billion (USD $ 1.0 billion ).
Chinese companies have raised $38.6bn through IPOs in the year to date, according to Dealogic.
Issuers in financial services — which, like education and leisure is at the confluence of the hot segments of consumer services and tech — include Ppdai, which is raising $350m in New York, Yixin, Lexin and Jianpu Technology.
Yixin illustrates another trend: many of those coming to market are backed by China’s tech royalty including Tencent, Alibaba, Baidu and JD.com. Auto financier Yixin, backed by the latter trio, is expected to raise about $200m.
Like Qudian, which listed last week, fellow online lender Lexin is heading to the US and is expected to raise around $600m, according to bankers. Jianpu Technology, a financial comparison site akin to Lending Tree in the US or MoneySuperMarket in the UK, filed for its IPO last Friday.
Recently, Rong360’s JianPu Technology has filed an IPO prospectus to U.S. Securities and Exchange Commission. Rong360, which started with a diversion business, this time takes the VIE model to list in US. Its business scope covers loans, credit cards and finance, as well as big data risk controls. However, it is noteworthy that Rong360 is still in the red, and its big data risk control business has also led to a compliance controversy.
According to the prospectus, the company plans to go public in the U.S. with a maximum of $200 million deal for it, and the underwriters are Goldman Sachs, Morgan Stanley, JP Morgan and Huaxing Capital. Rong360 was founded in 2011 and has finished four round of equity finance. The listed entity is a wholly owned subsidiary of Rong360, which was registered in the Cayman Islands in June 1st this year.
With the net loss of $7.2 million in the first half of 2017, Rong360 is still in the red. However, the deficit of JianPu Tech has been shrinking. The prospectus shows that the company’s revenue has increased from 168.4 million RMB in 2015 to 182.1 million RMB in 2016. And in the first half of 2017, its revenue has grown to 393.4 RMB, nearly tripled in less than two years.
Chinese online lender Qudian Inc is under fire in China after what observers said was a less-than-impressive interview by its CEO Luo Min Sunday that was aimed fending off criticism of the company’s business practices. The critics said it could instead exacerbate the company’s domestic image and hurt its share price.
Following its splashy debut in the US, Qudian was the subject of many negative news reports, mostly from popular social media accounts, about its business model, with some questioning its practice of targeting students for loans and others even describing the company as a “loan shark” – lending money at usurious rates.
“Our bad loan ratio is below 0.5 percent, that’s very low. So we can afford it when those people don’t pay up… Losses have been contained at a low level,” Luo said.
But part of the interview drew much attention and even mockery. Luo said, “Loans that weren’t paid on time were considered dead accounts. We never pushed people to pay back. We don’t even call. If you don’t pay back, then never mind, we’ll just give it to you as a gift.”
ING Partners with Kabbage, Inc. to Expand Automated Small Business Lending into France and Italy (Kabbage Email), Rated: AAA
Kabbage Inc., a global financial services, technology and data platform serving small businesses, and ING, a global bank, are expanding their strategic partnership into France and Italy to provide small businesses with real-time access to working capital. Building on ING’s successful launch in Spain with the Kabbage Platform TM , this partnership allows millions of small businesses throughout France and Italy to easily apply, qualify and access ongoing lines of credit up to €100,000 with ING in under 10 minutes.
Initiative Ireland has today announced the launch of Ireland’s first syndicated property finance platform.
The launch coincides with the company’s pre-approval of a €1.5 million secured loan, which has been approved for funding via the platform. The largest crowd-lending loan approved to date in Ireland, the loan will fund the development of 10 social housing apartments and a ground floor restaurant on the North Strand Road, Dublin.
One angle that needs to be discussed more is how the introduction of these new services is also lowering barriers to most financial activities.
For instance, the rise of cashless options has given the unbanked access to financial services especially in regions that banks find unserviceable. So, it is quite refreshing then that some new Fintech efforts are focused on this particular area since financial inclusion is considered as a key aspect to poverty reduction.
I recently spoke with Sharone Perlstein who is currently working on delivering microfinance services to emerging markets.
What attracted you to microfinance?
There are about 2.5 billion people in the world who are unbanked. Microfinance bypasses the banking system and can help unbanked people develop their own personal economy that will enable them to support their families, their communities, and ultimately the economy of their country.
What are the key challenges in microfinancing and how do you think they can be overcome?
Human resources: Until now, a very large workforce was required to provide this service to those who need it. Today, with automation and smarter information systems, we can significantly reduce manpower and streamline processes to make loans more economically viable for borrowers and lenders.
Most microfinance companies operate where they are most needed, namely in rural areas where the technological infrastructure is unadvanced and unstable. These areas are usually far from urban centers and transportation is inconvenient and expensive. As a result, communication between the microfinance service provider and its potential customers is complex and challenging.
Granting loans to people without a bank account may be risky from a business point of view, since it is difficult to know whether potential borrowers are trustworthy or will be able to meet the terms of the loan. It is also difficult to monitor their business and economic activity. In other words, it is very difficult to build a financial profile for a borrower with no banking activity. Here, too, mobile technology changes the picture.
Some argue that microfinance loans, supposedly meant to help poor people succeed financially, often leave them with debts they can’t afford because of the high-interest rates. What is your opinion on this matter? Is this a real problem? What causes it? And how can it be solved?
I think the best solution is to ensure that:
A. Potential borrowers understand the terms of the loan in depth.
B. The Microfinancier knows the potential borrower in depth.
Why do you choose to focus on Indonesia?
I researched the region’s economy a bit and discovered that there were more than 50 million small and medium-sized businesses, representing about 97% of the business sector in Indonesia and responsible for 30%, if not more, of its GDP growth. However, many of these businesses don’t have enough money to realize their full potential, especially in rural areas, and the banks do not provide the right solution. For this reason, the Bank of Indonesia has enacted a law according to which banks will have to devote at least 20% of their loans portfolio to microloans by 2018, thus opening a window of opportunity for businesses and other microfinance companies wishing to enter the local ecosystem.
Bitcoin could have you covered on your next home loan.
In this line, the longstanding contribution of traditional banks in the worldwide economy is undeniable. But due to their credit selectiveness, renowned bureaucracy and transactional costs, the question is: Can this system can be improved to better serve the 2 billion underbankedaround the world? Greater financial inclusion provides benefits far beyond improved economic health for underserved societies; it is also way for governments to reduce corruption and fraud and promote entrepreneurship and growth.
Anecdotally, at the end of 2015, Lending Club had a total loan volume of $15.9 billion. Year-end of 2016 shows a total volume of $24.6 billion so the annual volume for 2016 is the difference or $8.7 billion.
Just last year, Ripio Credit Network, which wrapped up a $31 million Ethereum ICO, entered the credit service market using Bitcoin as the transaction vehicle. A year later, BitPagos launched Ripio as a digital wallet that enables consumers to send, receive, store, and buy or sell Bitcoin in local currency and to make online payments. In January 2017, BitPagos rebranded as Ripio, with around 100,000 users in tow across North and South America.
Mambu is operating in 45 different countries indicating its ability to quickly adapt to diverse regulatory regimes.
Co-founded by CEO Eugene Danilkis and COO Frederik Pfisterer, Mambu is Berlin based Fintech, a standout in the emerging German Fintech scene. Danilkis started his career developing NASA-certified software for the International Space Station.
Can you please provide an update on Mambu and global utilization? How many different companies are using your digital banking services? Which countries are you operating in?
Mambu is live on 6 continents, countries of operation include the UK, Netherlands, Germany, Sweden, the US, Kenya, Australia, Philippines, China and Argentina, to name a few.
We have more than 180 live operations in over 45 countries, our solution powers over 5000 loan and deposit products which serve over 4 million end customers.
Our clients range from FinTech revolutionaries to traditional banks.
New10, ABN AMRO’snewly launched SME lending Fintech, went from concept to launch in 10 months and is offering a fast and fully digital loan application process for Dutch businesses.
Globe Telecom’s lending business Fuse
Is online lending, including P2P, marketplace and balance sheet lending, the most demanded service right now?
Eugene Danilkis: Across all lending verticals, consumer, business and marketplace, there is significant demand for digital and customer centric loan products.
That being said, we have experienced a rise in demand from institutions looking to launch new digital banking services, offering both deposit and loan products.
We’ve also seen a growth in institutions looking to explore a different approach and take a marketplace model similar to that of N26. They want to collaborate with product providers to offer clients a wider range of products and services.
There appears to be more traditional lenders (IE banks) more inclined to go it alone and launch their own platforms. Goldman Sachs launched Marcus which they developed in house. Is this a trend? Or an opportunity for Mambu?
Eugene Danilkis: As mentioned above, this is a trend that is gathering momentum and it is an opportunity for Mambu.
The Mastercard Foundation today announced that its fifth annual and largest Symposium on Financial Inclusion (SoFI) will take place in Accra, Ghana, on November 7 – 9, 2017. The Symposium champions the idea that, to achieve greater financial inclusion, financial service providers in developing countries must do more to meet the needs and expectations of people living in poverty.
Each year since 2013 the Foundation has convened hundreds of industry professionals to focus on barriers to greater financial inclusion around the world.
This year’s event will reflect on progress made over the past five years, explore challenges that still lie ahead, and plan how to expand and deepen financial inclusion for the world’s most underserved people.
Keynote Address II: Dr. Ernest Addison, Governor, Bank of Ghana
The Mastercard Foundation first awarded the Clients at the Centre Prize in 2015 to the Swedish mobile microinsurance firm BIMA. Last year, the Prize was presented to the South African international remittance company, Hello Paisa. Each year draws nearly 100 applicants from companies around the globe. The three 2017 finalists are:
Jumo, a large-scale, low-cost financial services marketplace that uses behavioral data from mobile usage to create financial identities for micro, small, and medium-sized enterprises;
ftCash, one of India’s fastest growing financial technology ventures which aims to empower micro-merchants and small businesses with the power of digital payments and loans; and
Destacame, a free online platform that empowers users by giving them control over their data to build their financial capabilities and to access financial products.
News Comments Today’s main news: SoFi wants to steal banks’ most coveted customers. Biggest online lenders don’t always check key borrower data. Fed issues FOMC statement. RateSetter puts aside George Banco partnership. Alibaba’s first fintech investment in Hong Kong. Investree enters Vietnam. Today’s main analysis: How fintech startups are transforming banking in Indonesia (A MUST-READ). Today’s thought-provoking articles: Real estate […]
SoFi on the way to stealing banks’ most coveted customers. AT: “There’s really nothing new about this. SoFi hasn’t made it a big secret that they want to take on banks. The audacity of CEO Mike Cagney forcing banks to change their business model is still worth noting even after being stated thousands of times. The interesting thing here is that Mad Money host Jim Cramer says if BofA or Citi had the Internet when they started, they’d be doing it like SoFi is doing it now. That’s a serious poke.”
SoFi is drawing flames from activists. AT: “Any disruptor is going to spark some heat. The fact that this is happening in the financial sector–people get antsy when their money is at stake–is the, ahem, cool part. Banks will change, but they may not like it. Pass the queso, please.”
Don’t look now, but the ‘in your face’ fintech firm, SoFi, is moving from offering just student and personal loans to providing wealth management and opening checking accounts. And their target market is one of the most coveted by banking … the educated, affluent, digital-first Millennial.
In an interview with Mike Cagney, “Mad Money” host Jim Cramer said, “If Bank of America or Citi had the Internet when they were forming, this (the SoFi model) is what they would have started.” Cagney responded saying, “Absolutely. I think what’s going to happen is the banks are going to move toward our model over time. And we certainly don’t have the hubris to expect that we’re going to change all of banking, but we are going to drag them into a different kind of service model. One that’s a lot more aligned to the customer.”
The company is also developing financial planning services, which it expects to launch this summer. These include joint financial planning for couples and first-time home buying.
“If you look at SoFi, we run over 65 percent contribution margin across our three lending businesses. We’re the most profitable fintech company in the marketplace. And there’s huge opportunity to expand from that, and it comes down to cost of acquisition. If you build really strong brand, really strong evangelism, really strong what I call ‘cross-buy,’ you can drop that cost of acquisition significantly and that drives margins,” Cagney said.
In its early days, Social Finance made loans only to borrowers who had attended name-brand universities. Graduates of elite colleges were paying relatively high interest rates on federal student loans even though they represented a low risk, and the Silicon Valley startup saw in that mispricing a chance to make money.
SoFi CEO Mike Cagney noted in a 2013 interview that traditional banks were aware of this opportunity but were unwilling to pursue it.
Back in 2012, I borrowed money to purchase a house I planned to fix-and-flip. I contributed 20% of the purchase price as a down payment. For the privilege of borrowing the other 80%, I paid a local “hard money lender” a 3.5% origination fee plus interest only payments at a 13% APR.
I started doing some more research into the market that was originating a majority of these types of fix-and-flip loans, which is called “hard money lending”. There were a few things that became quickly apparent to me.
The market was highly-fragmented. There wasn’t a single lender that controlled any significant amount of the national market.
The use of technology was virtually non-existent. The ability to apply online for a hard money loan didn’t exist. The lender I borrowed from didn’t even have a website.
Capital formation was very analog. This put them in a perpetual cycle of originating new loans to keep their funds working while also raising additional capital to meet the demands of their borrower base.
Hard Money Lenders, generally speaking, had a very negative reputation among the borrower community. This was in part due to the high interest rates. However, upon further digging, the real cause of dissatisfaction among borrowers was the lack of service and transparency.
Much like the early days of peer-to-peer lending, the new online real estate originators won business by providing a better borrower experience. Online applications with instant feedback on pricing and terms provided better transparency to borrowers. Quick funding decisions that are augmented by large data sets, rather than relying 100% on appraisals, allows these new lenders to provide more certainty around closing. Online dashboards where borrowers can order construction draws and make interest payments make the loan servicing experience easier for the borrower. Regardless of the financial innovation that is to follow, these technology platforms have improved the level of service provided to borrowers.
That said, the five largest online originators still only write between 5-8% of the total loan volume in the fix-and-flip market. We are still in the very early days of what is likely to be a massive consolidation of a previously fragmented market.
Prosper Marketplace Inc. doesn’t verify key information like income and employment for around a quarter of the loans it makes, according to documents tied to bonds that Prosper sold last month. LendingClub Corp. said it only verified income about a third of the time for one of the most popular loans it made in 2016, according to company data seen by Bloomberg. If either lender finds mistakes in a borrower’s application, such as overstated income, they may still go ahead with the loan, according to disclosures linked to bond sales from the companies, including documents for securities that LendingClub is offering now.
Online loans usually don’t have collateral, so when they go bad, investors can lose out. Traditional consumer finance companies and banks tend to check incomes and employment on closer to 100 percent of new customers before making these kinds of loans, according to industry executives. Online lending competitor Social Finance Inc. checks income on 100 percent of its borrowers, according to a report from Kroll Bond Rating Agency.
Investors in LendingClub loans earn average annual returns of around 4.3 percent, about three percentage points higher than the yield for two-year U.S. Treasuries. Those kinds of returns helped nonbank startups arrange more than $36 billion of loans in 2015, mainly for consumers, according to a report from KPMG.
LendingClub verified income on 35.6 percent of one of its most popular types of loans in 2016, according to company data obtained by Bloomberg. That figure has bounced around over time: it was 16 percent in 2008, and 47 percent in 2013.
LendingClub has had to write off a growing percentage of its loans — 8.5 percent, annualized, in the first three months, compared with 5 percent the same quarter a year ago.
Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending has picked up in recent months, and business fixed investment has continued to expand. On a 12-month basis, inflation has declined recently and, like the measure excluding food and energy prices, is running somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.
In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1 to 1-1/4 percent.
The SEC says many financial advice firms are falling short when it comes to cybersecurity, with investment advice firms being less prepared than broker-dealers, Reuters writes.
As part of its second stage of cybersecurity exams initiated in 2014, the SEC analyzed 75 firms and found that 26% of the companies don’t conduct risk assessments on a continuous basis and 57% of the firms fail to carry out vulnerability and penetration tests with simulated attacks on critical systems, according to the newswire.
The SEC has concluded that investment advice firms have had more issues with cybersecurity than broker-dealers, according to the newswire. On the other hand, the SEC learned that almost all investment advisors practiced regular system maintenance as part of their cybersecurity process, namely by consistently installing security patches, Reuters writes.
Only 4% of the companies examined were missing essential patches or updates, according to the newswire.
On June 2, 2017, representatives of the Company provided us with a computer-generated unsecured consumer loan data file containing data, as represented to us by the Company, as of May 24, 2017, with respect to 29,806 unsecured consumer loans (the “Statistical Loan File”). At your instruction, we randomly selected 125 unsecured consumer loans (the “Initial Sample Loans”) from the Initial Statistical Loan File using the following criteria provided to us by the Company:
3 unsecured consumer loans with a seller identified as “Seller #1” on the Initial Statistical Loan File;
21 unsecured consumer loans with a seller identified as “Seller #2” on the Initial Statistical Loan File;
1 unsecured consumer loan with a seller identified “Seller #3” on the Initial Statistical Loan File;
23 unsecured consumer loans with a seller identified as “Seller #4” on the Initial Statistical Loan File;
15 unsecured consumer loans with a seller identified as “Seller #5” on the Initial Statistical Loan File;
62 unsecured consumer loans with a seller identified as “Seller #6” on the Initial Statistical Loan File;
In addition, on June 13, 2017, representatives of the Company provided us with a computer-generated unsecured consumer loan data file containing data, as represented to us by the Company, as of May 24, 2017, with respect to an additional 4,203 unsecured consumer loans (the “Subsequent Statistical Loan File”). At your instruction, we randomly selected 8 unsecured consumer loans from the Subsequent Statistical Loan File with an origination date (as set forth on the Subsequent Statistical Loan File) on or before March 31, 2015 (the “Subsequent Sample Loans”). The Initial Sample Loans and the Subsequent Sample Loans are collectively and hereinafter referred to as the “Sample Loans”
Ingo provides risk-management services to financial institutions, such as banks and payment networks. Investors include Baltimore-based Camden Partners, Philadelphia-based MissionOG, and Bethesda, Md-based CNF Investments.
Notice of Class Action Settlement (Google AdWords Email), Rated: A
In Re Google AdWords Litigation, No. 5:08-cv-03369-EJD
U.S. District Court Northern District of California
A $22,500,000 class action settlement has been preliminarily approved by the U.S. District Court for the Northern District of California, in the case In Re Google AdWords Litigation, No. 5:08-cv-03369-EJD. Your rights may be affected and you may be entitled to a portion of this settlement if you are an eligible Class Member.
Who Is Included in the Settlement?
You may be a Class Member if during the period of July 11, 2004 and March 31, 2008, you: 1) were a U.S. resident; 2) had a Google AdWords Account; and, 3) were charged for clicks on advertisements appearing on parked domains or error pages.
What Is This Case About?
This case alleges that Google failed to disclose to its AdWords customers that it placed ads on websites known as parked domains and error pages. The lawsuit alleges this conduct violates California laws against unfair competition and false advertising. Google denies these claims.
The Court will hold a Final Fairness Hearing on July 27, 2017 at 9:00 am PST at the following location: U.S. District Court for the Northern District of California, San Jose Courthouse, Courtroom 4 – 5th Floor, 280 South 1st Street, San Jose, CA 95113. At this hearing, the Court will consider whether: 1) the settlement is fair, reasonable, and adequate; 2) to approve the service awards to the class representatives; and 3) to approve the award of attorneys’ fees and expenses to the attorneys for the class.
Under newly confirmed Chairman Jay Clayton, the SEC is setting its sights on expanded protections for retail investors, planning a series of RIA sweep exams exploring areas like robo advisers and money market funds.
Slated to launch this year is an exam sweep looking at how firms are deploying robo advisers, or using automated services to augment the provision of investment advice.
Levine said that the sweep will likely run along the lines of the guidance on digital advice platforms that the SEC issued in February, when it affirmed that robo advisory services still have a fiduciary duty, and warned of potential issues around disclosure and client communications.
Also this year, the SEC is planning to launch a sweep looking at how firms that traffic in money market funds are incorporating the rules the SEC adopted to shore up that sector following the destabilizing run in 2008.
As part of a broader focus on retail investors saving for retirement, the commission is also planning to launch a sweep exam looking at how firms are adhering to the schedules laid out in the disclosures of target-date funds, and another probing the controls advisers have in place on fixed-income cross trading relating to retirement accounts.
Today, we’re excited to announce that the Chan Zuckerberg Initiative (CZI), has invested $5,000,000 to create a Landed down payment support fund that will make it easier for educators in the Redwood City, Ravenswood City, and Sequoia Union High School districts in California — districts which face some of the highest housing costs in the country — to buy homes.
Eligibility: Any district or public school employee within the boundaries of Sequoia Union High School District, Redwood City School District and Ravenswood City School District.
Support: Up to half of a down payment (max $120,000), for the purchase of a primary residence.
Terms: Participants share up to 25% of the appreciation (or loss) in the price of the home upon sale, or after 30 years, whichever is sooner. There are no monthly payments.
Other: Participants can choose to end their relationship with Landed at any time. Financial coaching support will also be made available to participants.
AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, has announced the launch of real-time inventory on the Fletcher Jones Drive (FJ Drive) smartphone app powered by AutoGravity. Car shoppers now have access to the largest selection of Mercedes-Benz inventory in the nation, a seamless auto financing application and Mercedes-Benz Financial Services offer presentment – all in the palm of their hand through the AutoGravity powered FJ Drive app for iOS and Android.
AutoGravity joined forces with the Fletcher Jones Auto Group to launch FJ Drive, the nation’s first and only mobile app that allows customers to secure financing for any new Mercedes-Benz right on their smartphone. Real time inventory extends the partnership by empowering users to shop for specific vehicles sitting on the dealership lot. Guests can choose any Mercedes-Benz model and browse all available cars for their store of choice. Easy to use filters, including model year, body type and color, make finding cars simple and intuitive. Guests apply for financing and review their lease or loan offer in the app before picking up their car at the Fletcher Jones showroom.
Centana is hoping to differentiate itself from other venture capital firms by pursuing “workhorses” — essentially, companies that will help incumbent companies improve on existing business models, Cukier said.
Wealth Migrate, an online real estate investment marketplace, announces the global opening of its #LikeAMillionaire luxury condo give-a-way. The competition, which is open to all new users who sign up on the WealthMigrate.com platform, is another example of how Wealth Migrate is putting quality real estate within reach of middle class investors throughout the globe, who typically do not have access to these types of deals.
The Zero-2-One Tower, standing 42 stories tall, is set to be the tallest building in Cape Town upon completion in 2020.
The FinTech and InsurTech company IATAI Enterprises (IATAI), which specializes in making mobile transactions, communications and other interactions quicker and easier across platforms, has joined forces with the payment solutions enabler BPP to develop Handy U, a universal and customizable payment, rewards and insurance solution for consumers, businesses and merchants.
Handy U is a reloadable Visa virtual/digital account that enables IATAI’s travel and insurance clients to instantly make and receive payments, access benefits and redeem rewards generated by their loyalty programs. Handy U is hosted on IATAI’s digital wallet, onepocket, which lets users combine several payment methods in a single transaction, both online and in-store.
This Financial Poise webinar series explores the purchase of ownership shares in private companies via crowdfunding websites.
Episodes in the series address
the modes of angel investing in a company during its early stages,
the opportunities and perils of crowdfunding real estate investments,
the money-raising entity’s perspective and
a close look at crowdfunding options under federal and state law.
The 3rd episode of the “Equity Crowfunding” series is available now on demand! “Investing in Real Estate through Equity Crowdfunding Websites” (Register Here) features Moderator Chris Cahill of Lowis & Gellen. Chris is joined by Jordan Fishfeld of CFX Markets, Marty Coyne of Connected Investors Inc. and Lynda Davey of Avalon Net Worth.
FinMason, a Boston-based fintech and investment analytics firm, announced on Thursday the launch of its new fintech accelerating program, FinSpring, which is described as an initiative that will provide free access to FinRiver, a set of flexible and lightning-fast investment analytics APIs.
Last month, RateSetter announced it was entering a partnership with George Banco and acquiring an equity stake in the personal loan provider company. Unfortunately, RateSetter revealed earlier this month that it has decided to pull out of the partnership after all.
“We have subsequently decided not to go ahead with this new arrangement with George Banco. After further examination of the infrastructure required to do this, we concluded there were better uses of our development resources which may be deployed more effectively to source other borrowers. Therefore, we will not facilitate lending directly to George Banco’s customers, and accordingly we have updated our Principles of Lending document which sets out our lending criteria. The existing wholesale loans to George Banco will continue to be repaid in accordance with the schedule of the existing loan contracts. The total of these existing loans currently stands at £31.5 million.”
To see the updated Principles of Lending document, click here.
The top ten buy-to-let postcodes in England and Wales are evenly split between locations that voted for the Conservatives or Labour.
Luton has been identified as the best buy-to-let investment location across England and Wales, with an average yield of 4.54% and rental price growth of 7.37%.
According to LendInvest, which analyses data from Zoopla and the Land Registry to compile its Buy-to-Let Index, Stevenage is the best performing buy-to-let postcode out of areas that voted Conservative last week.
The Hertfordshire town has recorded capital gains of 11.64% and rental price growth of 7.5% over the last quarter.
Luton is the top performing Labour-voting postcode.
Assure Hedge, a provider of foreign exchange technology to protect businesses from currency fluctuations, has received a boost from the UK Financial Conduct Authority under a programme aimed at drawing financial technology (fintech) under its regulatory oversight.
Aiming to fix cash flow issues for companies operating in Hong Kong, Andy Chan along with his partner Winston Wong, set out on a mission to craft Hong Kong’s first invoice trading platform, Qupital.
Since its inception less than a year ago, the company has started to gain attention from companies including Chinese e-commerce giant Alibaba.
In terms of generating revenue, Chan shares that when an invoice is purchased, Qupital would take between 25-75 basis points of the total invoice value. Moreover, the company would take 20% of net gains made by funders.
With fresh capital from high-profile backers, Chan has his sights on deepening his business in Hong Kong with an eye on expansion to other markets in 2018 such as Thailand and Vietnam.
Baidu Inc. is among China’s tech giants looking to get a leg up in the competitive financial-services market. Credit-rating companies aren’t so sure it’s a good idea.
Fitch recently placed Baidu on negative watch, citing “significantly higher” business risks as it moves into making unsecured consumer loans and selling uninsured investments known as wealth-management products, which Fitch said are “part of the shadow banking system in China.”
Moody’s decided last month to place Baidu’s bond ratings on review for a downgrade, citing concerns over the firm’s short history in the financial-services business.
Baidu’s financial services, which also include its mobile payment platform, now account for about 12% of its assets, or 25 billion yuan ($3.7 billion)—representing rapid growth for a firm that formed its financial-services group only about a year ago. That has significantly changed Baidu’s credit profile, said Moody’s vice president and senior credit officer Lina Choi.
HSBC has its own tech teams designing new platforms and products, and they are absolutely brilliant. But we need to be humble and recognise that we don’t have all the answers. We invest in and work with fintech start-ups where we think they can help.
Our partnership with Tradeshift is making it easier for business customers to manage their accounts and their relationships with suppliers online, saving time and cutting down paperwork.
Retail customers in the UK can now download an HSBC SmartSave app, developed in partnership with a start-up called Pariti. It helps them save money without even having to think about it.
We have invested in a start-up which is developing technology that can sift through large amounts of financial transactions to pinpoint suspicious patterns. This will help us tackle financial crime more effectively, and, ultimately, keep our customers safer.
ASX-listed fintech zipMoney has put the finishing touches on its A$260 million debt warehouse with big four bank NAB and could become one of the few all-Australian fintechs to make a profit.
The money raised will go to the “immediate refinance of $70 million of existing receivables”, ZipMoney told the ASX, resulting in lower interest rates across the board. It will also allow the company to increase volumes and hire more staff.
ZipMoney provides a ‘buy now, pay later’ service, offering shoppers loans between $1000 and $10,000 for up to eight months.
An ASIC investigation found that between January 2011 and November 2012 Mr Hutchison dishonestly:
banked cheques he received from his clients for advice fees directly into his personal bank account, when he knew he was obliged to remit or report them to RI Advice. Mr Hutchison then deducted additional fees from his clients’ investment platform or financial product for payment to RI Advice; and
banked cheques he received from his clients for advice fees directly into his personal bank account and failed to record the receipt of the cheques on RI Advice’s payment system.
Mr Hutchison misled or deceived his clients by failing to disclose to them that they had been double charged advice fees and failed to comply with the proper process for remitting and reporting the fees. He also misled or deceived RI Advice by failing to disclose that he had deposited the advice fees into his own account and did not comply with RI Advice’s relevant fees policies and procedures.
SMC Capital and EPC developer REPL group have come together to launch a Rs 1,000-crore real estate fund, SMC IM Capital. The fund has already got commitments from global investors based in the US and Middle East and will look at a first close by end of this month.
The fund will invest between Rs 50 crore and Rs 80 crore in the middle segment affordable housing projects in tier I and II cities.
In India, real estate is the second largest employer after agriculture, and is slated to grow at 30% over the next decade. The real estate sector comprises four sub sectors — housing, retail, hospitality, and commercial.
Indonesian peer-to-peer (P2P) lending startup Investree announced on Thursday that it is set to begin expansion to Vietnam in 2018, DailySocialreported.
The Jakarta-based startup said it is currently undergoing the process of setting up a joint venture with an undisclosed local financial institution.
Investree also announced that it is going to launch a sharia-based lending service in July; the startup is currently on the process of applying for certification from the National Sharia Board (DSN).
Gunadi cited strong demand from both borrowers and lenders to set up a lending practice based on the Islamic law, and by far three small businesses from Jakarta and Surabaya have agreed to join in the pilot project.
India, November 2016. PM Modi launched a demonetisation drive to eradicate black money, fostering a new wave of digitisation in India. Consequently, there was a tremendous rise in the adoption of e-wallets, launch of new fintech startups, and the average Indian became familiar with a new financial entity, bitcoin.
From local grocery shops to petrol pumps to movie theatres, digital wallets have captured each and every day-to-day business which requires payments. Not only this, digital wallets have even seen a massive adoption for payment chores like booking air tickets or buying movie tickets or paying bills (DTH, Water, Electricity).
Be it digital payments, online lending, or remote banking, Indonesia has seen a surge of startups that have developed products to solve the current needs of the population.
At the same time, the country remains a challenging market for fintech industry to grow with only 40% of adults in the country having access to banks. 49 Mn SMEs unit are still not bankable, because of low credit score and little or no financial history.
It is estimated that only 40% of Indonesia’s 250 Mn populationcurrently have access to services provided by banks.
Thirdly, due to Indonesia’s peculiar geography, its traditional banking system suffers. The number of bank branches, which is estimated at 10 banks (branches) per 1,000 square kilometersis far too low to serve Indonesia’s vast geography.
The major areas that startups are capturing and disrupting are payments, insurance, stock markets, investments, PoS, comparison, and online lending. Major startups in the payments sector include Mandiri, T-Cash, PayPro, IPayMu, Xenditi among others.
Digital payments have become so big in the archipelago that the total transaction value in the “Digital Payments” segment amounts to $18 Mn in 2017. Additionally, the total transaction value is expected to show an annual growth rate (CAGR 2017-2021) of 18.4 %, resulting in the total amount of $36 Mn in 2021. Popular fintech categories in Indonesia are lending platforms, capturing 17% and marketplaces for financial products that have occupied 13%.
Deposits, Lending, And Capital Raising
The online lending space is dominated by players included Modalku, Taralite, and Investree. The online lending segment has a huge market demand in the country, owing to the fact that a major population of the country has a low credit score and SMEs can benefit from these alternative services.
Taralite: Launched in 2016, the startup sanctions financial loans with relatively low interest, starting from 1%, for education, marriage, childbirth, house renovation, vehicle purchase, property & housing. It also provides loans without collateral. It recently secured $6.3 Mn from Japanese financial services provider, SBI Group.
MODALKU: Founded in 2016, it is an online lending platform, that provides loans up to IDR. 2 Bn, with relatively affordable interest. Its focus areas are SMEs looking for working capital, with minimum one year of operations.
Cekaja.com: Launched in 2013, the platform allows users to compare various financial products at one place.
Investment & Risk Management
JOJONOMIC: JOJONOMIC digitises the entire employee reimbursement process for an employee.
RajaPremi: Founded in 2014, RajaPremi is an online insurance marketplace.
Bareksa: Founded in 2016, it is an online and integrated marketplace for mutual funds.
Kudo: Launched in 2014, the startup has a website and a mobile application that enables anyone to be an online entrepreneur without having to personally stock the items.
DOKU: A 2007 founded startup, Doku is the biggest player in the Indonesian payments scene. Functioning as an online and offline payment gateway for businesses and individuals, DOKU is an e-wallet equipped with links to credit card and electronic money.
t-cash: Founded in 2011, it is an electronic money service provided by Telkomsel (a telecom giant). Users are required to install the T-Wallet app on their mobiles and equip their mobiles with the t-cash stickers.
Ayopop: Launched in 2016, Ayopop is an app that specialises in bill payments.
POS (Point-Of-Sales Startups)
Pawoon: Launched in 2013, Pawoon is a cloud-based Point of Sales (POS) application for SMEs.
DealPOS: DealPOS is a cloud-based point-of-sale ( POS ), inventory and accounting software for business which was also launched in 2013.
Wondering in the halls of an incredible conference in Shanghai a few days later at LendIt Conference China, I was consumed with anxiety. Every platform I saw in China easily had 30 million plus active users. Whether it was credit, payment, insurance or investments, the conference in China was filled with eager entrepreneurs, seasoned executives and hunger investors.
Out of necessity, with a series of coincidences and a ton of luck I founded a company called MaxDecisions, Inc. with an old colleague and friend Henry Wang. We didn’t think too much of it and we didn’t really know where we will end up with it.
In the same month, I founded another company called Kuber Financial, LLC. and later Kuber Inc. with two other co-founders. Both of them left in the middle of the project, one early on and one late later year.
Fluid App came to me because I wanted to build something that’s truly different from all other platforms. A fun, mobile only, credit building product that could truly change lives of millions of young Americans. A FinTech, AdTech mesh up, that a lot of people are now starting to understand and appreciate my vision for this product.
With our 10th employee coming onboard at www.maxdecision.com next week, we’ve officially broke our first million dollars in sales.
June 14, Shenzhen Internet Finance Association, THE FINLAB PTE LTD and the Hong Kong Internet Professional Association in the World Youth Entrepreneurship Forum officially signed a tripartite cooperation memorandum, at the same time announced at the forum, Shenzhen – Singapore – Hong Kong Financial Technology Alliance was formally established.
Payments and remittances startups account for the majority of Africa’s over 300 fintech startups, though blockchain companies are the more likely to secure funding.
Payments and remittances is the most populated of nine sub-sectors addressed in the report, with 125 startups across the continent focused on making the process of sending and receiving money easier. Lending and financing – with 65 startups – is the next most popular category; indeed, over 60 per cent of all Africa’s fintech startups are focused on these two crucial spaces.
African blockchain startups are the most successful in percentage terms, with almost 40 per cent of the blockchain-focused startups on the continent securing funding.
The continent’s fintech startups have secured over US$92.5 million in investment since 2015, the report finds, while the data shows fintech startups are spread across the African continent. Southern Africa and West Africa are fintech leaders – with 34.2 per cent and 34 per cent respectively based in those regions respectively. South Africa has the most fintech startups (94), followed by Nigeria (74) and Kenya (56).