Details Title: Internet 3.0: Decentralize everything Internet 1.0 is HTML websites. Internet 2.0 is a social network and user-created content. Internet 3.0 is the decentralization of everything: decentralization of marketplaces, of resources usage and allocation, etc. Is Internet 3.0 the P2P of everything? Examples of decentralization include: Decentralized exchanges (Ether Delta) Decentralize computing power (Golem) […]
Internet 1.0 is HTML websites.
Internet 2.0 is a social network and user-created content.
Internet 3.0 is the decentralization of everything: decentralization of marketplaces, of resources usage and allocation, etc.
News Comments Today’s main news: Google gets EU eMoney license. JD launches online P2P lending service in China. Hexindai partners with Kunming Aotous. Today’s main analysis: Equity sector analysis. Today’s thought-provoking articles: Internet finance in a state of flux in China. P2P lending looking for a fresh start. Wonga collapse clears way for US payday lenders in UK. United […]
We have identified a $377 billion addressable U.S. online travel market. Millennials, the largest consumer group in the U.S., are shifting their spending from products to experiences.
We’ve also found that 55% of people are avoiding credit cards at checkout when paying for travel. 67% are looking for options to pay over time.
1. Consumers will demand more control over their data.
2. Alternative lending will continue to grow.
Given that around 80 percent of small business loan applications are rejected, startup founders are increasingly looking to nontraditional financiers for capital.
Chicago-based Enova, which also operates Pounds to Pocket and On Stride, saw UK revenue jump 20% to $36.6m (£29m). Texas-headquartered Elevate Credit operates in the UK under the Sunny loans brand, and saw its own UK revenue jump 23% to $32m, as new customer loans for Sunny rose 45% to $26,671.
Curo, which is behind WageDayAdvance, saw UK revenue jump 27.1% to $13.5m, while underlying earnings nearly halved from $8.1m to $4.2m. It was helped by a “high percentage of new customers”.
Ethical lenders that have been touted as alternatives to high-cost firms such as Wonga and BrightHouse are going out of business at the fastest rate in years, fuelling concerns that less well-off customers are in danger of losing access to credit.
The figures mark the worst year since at least 2010, as the sector battles against rising regulatory and technology costs.
Eight credit unions closed in 2018, and they affected an estimated 14,000 people with a collective £25 million in savings. Even some of the more successful CUs have had to curtail lending. Credit unions cap rates at 3 percent a month.
Despite initial reports of the feature’s disappearance, Hefeng Online Lending was still available until 4 p.m. on Wednesday. Previously, all products were labeled as being “sold out” after it was removed from the app’s main page. It has subsequently been completely removed.
E-commerce giant JD.com has become the first Chinese tech tycoon to launch peer-to-peer online lending products, CHNFUND.com reported on Sunday.
“Hefeng online lending” or literally “Hefeng Wangdai”, a platform providing information service on P2P online lending under JD.com, sold out all the products within seconds after it started operation on Sunday.
JD Finance has removed its second peer-to-peer (P2P) lending feature from its app after it had been online for less than 10 days, highlighting difficulties in China’s P2P loans sector.
Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Wednesday it has formed a funding sources partnership with Kunming Aotou Economic Information Consulting Co., Ltd. (Kunming Aotou).
Hexindai reported that through this agreement it will assess borrowers that are using its risk management and credit assessment capabilities before referring them to Kunming Aotou which will facilitate the loans through a trust fund.
Recently, the Beijing-based Chang An Property Casualty Insurance Co was reported to have compensated nearly 2 billion yuan ($290 million) for its joint business with a number of domestic peer-to-peer (P2P) online lending platforms, according to a report of the Time Weekly.
The Lengjing reported that so far 220 P2P platforms had submitted their self-investigation reports to the government.
The Lithuanian FinTech initiative now covers more than 100 licensed companies, with most of them involved in payments, electronic money and peer-to-peer lending and crowdfunding.
But even P2P Global Investments, the first investment fund dedicated to the sector when it launched in 2014, admits the initial “frenzy” of interest has died down.
It is considering changing its name because it no longer accurately reflects the fund’s interests.
Mike Bristow, chief executive of property lender CrowdProperty, suggested that some companies have tried to take advantage of the hype around peer-to-peer without making effective business plans.
Micro-lending: Mynt Philippine fintech, Mynt, talks about the business case and technology behind its current micro-lending efforts and where it is planning to head with other financial services, leveraging the customers and data of its majority shareholder, the country’s largest Telco.
Robocash – fintech crossing the borders
In 2017, peer-to-peer (P2P) platform Robocash started its operations in the European Union (EU). Since then, it attracted more than €4 million
Home Credit – to its credit In an exclusive tour of Home Credit’s (HC) operations in Prague, we met seven staff members and learned about its retail challenger Air Bank, P2P lender Zonky and Home Credit Venture Capital (HCVC).
Every loan involves a cost. From the time of signing up to delay in repaying the loan, here’s a list of charges a borrower needs to pay while taking a loan from a peer-to-peer (P2P) lending platform.
UMG Idealab has started its venture journey in Indonesia with 11 portfolios to date.
UMG Idealab is looking for startups in IoT, Big Data, Voice Recognition (VR), and Artificial Intelligent (AI). He aims to invest in 20 startups next year.
The State Bank of Việt Nam (SBV) has warned local people and firms to consider carefully and be cautious before taking part in peer-to-peer (P2P) lending as there are many potential risks related to the service.
News Comments Today’s main news: PawnHero lands $9.7M financing. AltFi Data scoops equity investment, appoints advisory board. Funding Circle to launch new Autobid, Autosell lending features. SocietyOne celebrates fifth anniversary. Today’s main analysis: Peter Renton’s MPL results for Q2 2017. Today’s thought-provoking articles: How Amazon’s Alexa will upend wealth management. The future of banking investments. Will finance businesses jeopardize the credit quality […]
How Amazon’s Alexa will upend wealth management. AT: “I don’t know so much that Amazon itself will impact wealth management, but perhaps the underlying technology of Alexa will cause the industry to change more rapidly. I can see Amazon directly impacting banking and finance for consumers, and they’ve already begun to.”
The future of banking investments. AT: “I agree that banks will adapt to the changing landscape of handling other people’s money, and they’ll do it their own way–probably in a way most of us least expect it.”
Instant gratification and real-time vacations. AT: “In 2005, my wife and I toured Germany by train. At that time, we had our laptops and managed to book hospitality services using the public railway system’s free wi-fi. We thought it was cool that we could plan a two-week vacation on the fly and move from one city to the next with minimal planning. Today’s technology is even better and more readily available for this type of ‘vagabonding’.”
One could almost say my returns are in a downward spiral. Since peaking in Q1 2014 at 12.44% my returns have decreased pretty much every quarter and for the last two years that decrease has averaged around 0.5% per quarter.
This past quarter my overall returns stood at 7.28% and the returns for my original six accounts were 5.07%. My worst Lending Club account was my original account there and it came in at 1.95% for the year. The only good news, if there was any, was that I did not have a negative quarter in any of my accounts this quarter unlike in Q1.
Source: Lend Academy
All the account totals and interest numbers are taken from my monthly statements that I download each month.
The Net Interest column is the total interest earned plus late fees and recoveries less charge-offs.
The Average Rate column shows the weighted average interest rate taken directly from Lending Club or Prosper.
The XIRR ROI column shows my real world return for the trailing 12 months (TTM). I believe the XIRR method is the best way for individual investors to determine their actual return.
The six older accounts have been separated out to provide a level of continuity with my earlier updates.
I do not take into account the impact of taxes.
Lending Club
While Lending Club shows an 8.19% return I ignore that number and do my own calculation. My TTM return here is at an all time low of 1.95% but at least I have reversed what happened in Q1 when I had a negative quarter.
Prosper
Source: Lend Academy
Direct Lending Income Fund
The Direct Lending Income Fund continues to be my most consistent performer returning solid double digit returns every quarter since I started investing back in 2013.
Advisors wondering how Amazon will enter wealth management should look to its cloud computing arm, Amazon Web Services, which is pitching the natural language processing, machine-learning brain behind its voice interactive service to wirehouses, broker-dealers and robo advisors.
Already, UBS has partnered with Amazon to enable clients and non-clients of the bank to get answers to financial and economic questions through Alexa.
I’ve actually had this subject on my mind for awhile. In my article “Customer Experience And Retail Banking: Why Banks Need To Enter The Modern World”, I discussed a day where my district manager came to show us the ABSOLUTE IMPORTANCE OF LOBBY LEADERSHIP!!!!!!! I was rather underwhelmed by its importance, but overwhelmed by the fact that the banks were all putting such a heavy focus on greeting customers at the door and making each trip to the bank “an experience”
One of the downsides of the future of banks—and one of the things that might compel someone to avoid bank stocks—is that they are slow to change. They are loathe to change.
Other businesses are trying to please their customers. Banks are trying to please their regulators. Because customers don’t issue multi-million dollar fines on banks when they don’t get what they want.
A New Challenger Has Entered The Battle!
Businesses always have competition within their field. Banks are no exception. Banks compete with other banks to provide their services to the global market.
Except now, with fintech growing at a record pace, banks face competition from small fintech companies and major technology giants such as Google and Apple.
We’ve seen companies like Lending Club take the world of lending andinvesting by storm with their peer-to-peer lending services. LendingTree has changed the way people shopped for mortgages, and LendKey is fast becoming a leader in student loans by acting as a broker for not-for-profit lenders and providing full after-funding services. I wrote a review about LendKey here.
For non-lending companies that aren’t brought to you by the letter “L”, there’s PolicyGenius (an online life insurance broker). There’s Acorns, a “micro investment” company that takes each of your debit card purchases, rounds them up to the nearest dollar, and invests the spare change into your investment portfolio. And of course, there’s PayPal, the legendary online payments/money transfer company.
Of course, the fintech firms aren’t even the largest future competitors! Ironically, it’s non-financial technology giants that pose the greatest threat to the future of traditional banks!
Why I Think Bank Stocks Are A Great Future Investment
No, I’m bullish on banks because I think that they will adapt, in their own unique way.
Last week the Cleveland-based bank announced it had taken an equity stake in the fintech firm Billtrust, which provides digitized and automated accounts receivable capabilities for companies. The investment is one of a series the $134 billion-asset Key has made in the space in the last two years.
Other banks are also making an effort to enhance commercial payments capabilities. Wells Fargo, for example, in June announced that receipt imaging would be available for commercial card customers who use the bank’s commercial card expense reporting service, which allows them to upload and manage receipts directly on mobile devices. U.S. Bank also began offering corporate clients a virtual payments service, for employees who need to make a one-off work-related payment or who make purchases rarely enough that they don’t need a physical plastic corporate card.
Time and reality have since set in, and the tone of the conversation has shifted away from “compete” toward “collaborate.” Banks increasingly see the value of capabilities developed by fintech firms, and those companies in turn are becoming better acquainted with the challenges of regulation and other barriers to bringing their products to market.
For banks, the wakeup call has been the realization that customers are coming to value—and expect—a frictionless banking experience. And if banks can’t provide that kind of frictionless experience, Henrichs says, they’ll turn to alternate solutions.
Keys to building a successful fintech strategy
1. Adopt the right cultural mindset.
First and foremost, the bank must have an appetite for innovation.
For some banks, this may involve a shift away from viewing fintech companies as simply third-party vendors or service providers, and instead as collaborators working side by side to develop something new.
2. Do something.
And size isn’t an excuse to sit back and wait, Henrichs adds. Rather, it’s about choosing an area of focus that makes sense for the bank in terms of available resources. While that may not always be a big, sexy innovation, banks can start by achieving smaller, incremental change—something as simple as building and beta testing a new email delivery system can help build up the bank’s “try and fail muscle” and help lay the groundwork for future, larger-scale projects.
3. Be forward-looking.
Consumers’ demands are shifting every day, and new products will continue to hit the market at an unrelenting pace. Knowing that, bankers must be able to keep an eye on the horizon.
According to the quarterly Fiserv “Expectations & Experiences: Borrowing and Wealth Management” survey conducted in June 2016, 49 per cent of consumers are interested in receiving financial advice from a robo-advisor.
However, there are limits to a robo-only approach. That is why we are witnessing an increase in wealth management firms that incorporate both digital advice and human advice to create a hybrid model, which is likely to become best practice in the industry.
Annualcreditreport.com is a free website and app which will allow you to get a free copy of your credit report every 12 months from each credit reporting company.
Nerdwallet.com is another free website and app. The site offers financial tools and objective advice to help people better understand their financial options and make the best possible financial decisions.
Mint.com is a free website and app that helps you create budgets that make sense today and set you up for success tomorrow.
Bankrate.com is a free website and app that will help you find and compare rates on financial products like mortgages, credit cards, car loans, savings accounts, certificates of deposit, checking ATM fees, home equity loans and banking fees.
On Monday, Funding Circle announced it is set to launch a new version of its existing Autobid and Autosell lending tools. Funding Circle will be eliminating the option to manually choose which businesses an investor may lend to and which loan parts to sell will be withdrawn. This is a significant shift in operation of the peer to peer lending platform as it begins to operate more like a fund.
Funding Circle created a new section on their web site dedicated to the explanation as to why they were moving away from peer to peer lending and becoming more like a fund by eliminating manual selection.
While many investors have enjoyed manually choosing loans, there are some drawbacks to it:
Many investors do not currently benefit from lending to all types of businesses.
It can mean your lending is not spread evenly across lots of businesses.
It can be confusing for investors.73% of new investors who join Funding Circle choose Autobid, and 80% of Funding Circle investors* say simplicity of lending is important to them.”
The FCA has launched a crackdown on peer-to-peer (P2P) lending, in the coming months, aiming to ensure protection for retail investors within this heavily risk-associated market.
These operations could weaken the internet companies’ credit quality, especially if their finances are consolidated on the technology companies’ accounts, Moody’s Investors Service said.
That’s because most internet companies don’t generate enough profits from operating these businesses, and they lack a track record of holding borrowers accountable for timely payments on their loans, Moody’s said.
After years of explosive but unruly growth, the online finance market requires cooling through tighter regulation.
On the contrary, there were few regulations to guide or hamper China’s Internet finance industry, with no such requirements as reserve levels or loan-to-deposit ratios. The near-absence of regulation greatly lowered the barriers to entry for the sector, which witnessed both explosive expansion and high failure and fraud rates as it grew. Take P2P lending platforms, for example. As of the end of July, 5,916 P2P lending platforms had been set up in China, but only 2,090 were operating normally, with the rest either encountering liquidity problems or simply closing, according to statistics from wangdaizhijia.com, a P2P industry portal.
Ant Financial has a big market share in the online payments industry in China. However, its ambitions go far beyond that. Recently, Ant Financial was known to get involved in the credit market.
Ant Financial seeks to merge the gap between the Yu ‘E Bao account and the general bank account through the online merchant bank. It hopes to connect the supply and demand side of the credit in its own account system, just as the bank account do.
But it won’t be easy. The biggest difference between the credit business and the payment business is that the credit business is a heavy capital business and a highly regulated licence business with a strong social spillover effect.
The Swedish startup Klarna made waves this summer by launching its own peer-to-peer payment app called Wavy and acquiring a full banking license, which sets Klarna apart as one of the few fintech companies able to compete with traditional banks head-on. TechCrunch described it as a $2 billion startup working the 700,000 e-commerce sites. In June, Visa Inc. announced it is buying a stake in Klarna plus forming a payments partnership. Klarna is now widely considered one of the world’s most promising fintech startups.
There is a small but growing demand for bitcoin in Sweden. Sweden’s central bank is even considering the merits of making its own national cryptocurrency. In the meantime, Safello aims to become the “ Coinbase of Europe,” since the European bitcoin landscape is far more diverse than North America in terms of regulation and user habits. Coinbase, arguably the world’s best funded bitcoin exchange, is already available in Europe. However, Safello sets itself apart by focusing exclusively on the needs of European users, including support in nine different languages.
So far, Schuil said Safello has facilitated $10 million worth of transactions involving tens of thousands of European users.
Klarna and Safello aren’t the only Swedish startups with the potential to completely overhaul how people interact with money. Among all the startups buzzing around Stockholm, Biohax International certainly stands out. Biohax CEO Jowan Osterlund told IBT his team has implanted 3,000 microchips in people’s bodies, usually their hands, most of which happened in the past year.
These microchips can be used for purchases like train tickets and food. The Wisconsin company Three Square Market now lets employees buy office snacks with the swipe of a bio hacked hand, while also using the chip as a workplace ID for office equipment.
The transparency agenda in online lending has taken a step forwards, as another analytics firm raises capital. AltFi Data has raised an undisclosed sum of equity funding, in tandem to forming a new advisory board.
Roger Spooner and Peter Wilson will join existing backer and executive board-member Michael Baptista on the newly established advisory board. Spooner was most recently a member of the management committee at global data firm Markit, where he was head of global client management. Following a 20 year career in private equity, Wilson was the inaugural CEO of British Business Bank Investments, where he was responsible for £1.5bn of government investment. In this role he oversaw a number of early institutional investments within the UK’s marketplace lending sector.
Sona 10 Newmarket, which is located next to the Teeling Whiskey Distillery, is being created in collaboration with the long-established Dublin Food Co-Op and will be hosted on its premises.
The brainchild of Adrian O’Connor, a Canadian entrepreneur who has lived and worked in the area for about a decade, Sona 10 has already raised some private funding to get the building open with some tenants already coming on board.
It is now seeking to raise an additional €25,000 via the Irish crowdfunding platform Flender to kit out the premises.
Being able to transfer money between accounts in real-time has become part of our daily lives, so much so that when these automatic services do not work, it becomes a problem.
Smartphones have become global standard: ‘conventional banking meant writing traveler’s checks and exchanging physical currency ahead of a trip, both of which are very expensive for the average consumer. Since then, new fintech providers – even in emerging markets – have dramatically increased the acceptance of foreign credit and debit cards,’ Likar said.
Vacationing in real-time is here: ‘you can now rent an apartment for same-day arrival on Airbnb or HomeAway, find last-minute dinner reservations through OpenTable, borrow a car near your location with Turo, and even book by-the-minute hotel rooms through the Recharge app.
Another aim of the fintech industry, in the same vein of the eradication of cash, is helping those that are unbanked and underbanked pay for services only available for those with credit cards. ‘Most airlines today accept payments from alternatives like PayPal. Other financial services companies, such as Affirm, offer three, six and twelve-month financing plans for customers who cannot afford to pay for the flight up front.’
WeSwap is a multi-currency card that can hold up to 18 different currencies, ensuring that consumers can lock in the exchange rate upfront rather than after the purchase,’ Likar mentioned.
As WisdomTree points out in a recent note, a massive chunk of global real estate investments are actually found outside the U.S. (See also: Eyeing Emerging Markets REITs? See These ETFs.)
Australia-based online lender SocietyOne announced on Monday it is celebrating its five-year anniversary of helping customers achieve their lending needs. This celebration comes less than two months after the lending platform surpassed $300 million in total originations. The lender revealed that more than 13,000 customers thanks to $325 million provided by its investor funders.
Southeast Asia’s first digital pawn shop PawnHero has closed a $9.7 million (P500 million) financing deal with a Philippine investment bank even as it signed a partnership agreement with the fintech arm of telco giant PLDT.
The key to the banks’ risk taking ability is aggregation. The bank is able to get the deposits at scale and at the same time lend to a large number of customers most of which are likely to pay back. In a portfolio of loans, historically, only a small percentage is non-performing. The individual lender has so far not had the ability to create a portfolio. The start of crowdfunding a few years ago began to change that. Crowdfunding works in the area of providing returns through some level of ownership of either the product itself or the company which is promoting it. For individual investors seeking a stream of steady income on the other hand, P2P Lending or Marketplace Lending makes more sense.
However, the speed of growth of P2P lending outstrips that of traditional banking. An excellent December 2014 whitepaper, A Trillion Dollar Market By the People, For the People published by Foundation Capital, describes the blistering pace at which P2P lending grew from a base of $870 million dollars in 2012. Estimates of the size of the industry vary from between $100 billion to $200 billion. The whitepaper predicts that the market size will be about $1 trillion by 2025.
On average, P2P lending platforms like Beehive are able to reduce interest rate spreads between sourcing and lending money by about 400 basis points (4 per cent). That’s because players in this space do not keep the loans on their balance sheets.
News Comments Today’s main news: SoFi Ventures to support financial services startups. Prosper’s valuation dives 70%. Fundrise drops minimum investment to $500 for New Starter Portfolio Offering. UK P2P lenders asked to reveal past defaults. Hargreaves Lansdown cancels special dividend. FinMason expands into Prague. PledgeMe close to profitability. Today’s main analysis: LendingClub is looking beleaguered. Australian fintech update. Today’s thought-provoking articles: Surge […]
This past week featured a slate of fintech venture financings. Kabbage (Series F: $250M), Dianrong (Series D: $220M), Bread (Series B: $126M), and Juvo (Series B: $40M) all announced major financings.
For PeerIQ, it means continuing to execute upon the vision we shared at our seed financing just over two years ago. This fall, we will be launching our first products uniting TransUnion’s dataset with the PeerIQ analytics platform.
Along with its investment, Hearst brings several major holding companies, including auto data provider, BlackBook, and Fitch Ratings, the global ratings provider, which opens up many new value propositions for our customers. Finally, we are working hand in hand with Macquarie, a major provider of capital to the fintech space, to improve tools for warehouse lenders and their borrowers alike.
Source: Thomson Reuters Eikon, image made by James Brumley
Fast forward to Monday. That’s when Lending Club is expected to log another progressive quarter, cranking revenue up to $136.2 million, and whittle the per-share loss back to only one cent; the company lost nine cents per share on $103.4 million in sales for the same quarter a year earlier. Not only is revenue expected to keep growing beyond that, Lending Club is expected to swing back to a profit in Q3, of two cents per share.
San Francisco fintech Prosper is about to close on $50 million in funding, in a round that slashes its value 70 percent to $550 million, The Information reports.
That a steep decrease from the $1.9 billion valuation the second-largest online lender saw just last year.
The Fundrise Starter Portfolio starts with a $500 minimum and includes a 9.25% annual dividend yield and zero advisory fees through the end of the year. If you want to try it out the Starter Portfolio comes with a 90 day guarantee. If you have a change of heart, Fundrise will purchase your investment back at the original investment amount. Not a bad deal to test the waters.
Prosper Marketplace Inc. is in talks to sell a roughly 10% stake to a Chinese conglomerate in a deal that could reduce the online lender’s valuation by more than two-thirds, according to people familiar with the matter.
Under the terms of the proposed transaction, Linca would invest $50 million in Prosper at a valuation of about $550 million. No deal has been finalized, however, and there was no guarantee the parties would come to an agreement, the people said.
David Kimball, who took over as Prosper’s CEO last December, has been focused on making the company profitable. In February, to ensure a funding source for the company’s loans, Mr. Kimball agreed to sell $5 billion worth of Prosper’s loans to a consortium of investors over the next two years along with warrants to purchase shares representing 35% of the company, The Wall Street Journal previously reported.
Real estate investment crowdfunding site Small Change has closed its first real estate offering available to everyone – not just accredited investors.
Small Change reports that investors have funded projects via their platform in cities including Pittsburgh, Los Angeles, New Orleans, and Washington D.C. These projects are as diverse as the cities in which they’ve been built. They include Pittsburgh’s first tiny house, a historic main street mixed-use conversion, and affordable housing in Washington, D.C. with the largest residential solar install in the country.
WSFS Financial Corporation (Nasdaq:WSFS), the parent company of WSFS Bank, today announced that it is now offering Private Student Lending Solutions, expanding its consumer lending product line to bridge the funding gap that exists between the actual cost of higher education and the federal aid, grants and scholarships available.
Social Finance, better known as SoFi, first teased it would file for an initial public offering nearly three years ago.
SoFi CEO Mike Cagney appears to be interested in filing for an IPO again.
If SoFi did file for an IPO, it would mark the second major IPO for a housing-related company after a dry spell the last few years.
According to an article in Reuters by Lisa Lambert, “Last year IPOs in the United States fell by more than a third from 2015, and many of those 102 share offerings ended up trading below their debut price.”
Yesterday, NYC-based digital broker PolicyGenius announced its expansion to renters insurance. The product is delivered in collaboration with Stillwater.
Another thing happened yesterday. Lemonade announced its renters and homeowner’s insurance is now available to folks in NJ, joining those residing in CA, IL and NY.
Fintech and adtech startup Fluid announced a strategic partnership with Nomad Credit, a financial marketplace for international students in the US; the partnership looks to offer better credit options to this underserved market; together the companies will deliver better financial literacy, credit building tools and more cost effective financial products.
Fledgling businesses rarely command seed or venture funding right out of the gate. But they still need cash to get started.
In reality, there’s a big difference between securing a loan for your business and winning over backers on a site like Kickstarter. Meanwhile, equity crowdfunding, enabled by sites like AngelList,CircleUp and SeedInvest, is generally for businesses that are further along.
Here are the real ways that most entrepreneurs get money at the very start.
Nine of the 15 United States financial technology “unicorns” — companies worth $1 billion or more, as tracked by CB Insights — are in the San Francisco area. These Bay Area companies, which are not public, include the online payments processor Stripe, the online lender Social Finance and the finance website Credit Karma.
For the last seven years, a New York business-backed program — the FinTech Innovation Lab — has been working to stem that West Coast tide by helping financial services start-ups sell their services in New York in an industry where the city clearly dominates: big banks and other finance companies.
One such “industry of the future” that Delaware should be working to attract is the financial technology sector, or what some affectionately call “FinTech. Empowered by mobile computing, these companies use technology to bring better, cheaper, more efficient financial services to citizens. Mobile apps that allow you to send money quickly to friends or family are examples of FinTech products.
For a number of reasons, Delaware is well-suited to become the nation’s FinTech capital. First, the financial services industry has served as a core portion of Delaware’s economy for over 40 years. Individuals with skills and expertise are ready and waiting.
Second, banks, of which many call Delaware home, are leading the way in partnering with startups large and small to develop new solutions and businesses in the space.
Third, Delaware’s nimble government and business community make it a flexible, attractive place for innovation.
There should be no surprise that with the growth of the internet and online banking that online lending would be close to follow. Over time, banks began to accept loan applications online and eventually began to offer full-service lending through the web.
While online loans may be tempting, it is important to consider every option when borrowing a large sum. Comparison shopping is your friend. There are more than 44 different kinds of business financing — that’s a large ocean to navigate before finding the lowest-cost option that fits your business profile and approval chances.
Nonbank lenders typically lend from their own funds or look to the financial markets to raise millions or billions of dollars to lend in smaller increments.
Here are some questions to ask yourself to get started:
How much money do you need to borrow?
Do you need an in-person experience or are you comfortable online?
The FCA is expected to announce new measures later this year, including forcing P2P groups to give extra information on the past performance of loans and on how much due diligence they have done on the borrowers’ past performance.
P2P lenders — which had collectively facilitated loans of £7.3bn in the UK by the end of last year, according to research from the Peer-to-Peer Finance Association (P2PFA) — have had plenty of time to prepare for tighter regulation.
The FCA’s latest review is the second in two years, and any measures are unlikely to come in before mid-2018, since the industry will be given between three and six months to respond to the proposals the authority puts forward later this year.
Fund supermarket Hargreaves Lansdown cancelled a planned special dividend on Friday after Britain’s financial regulator said the company needed to shore up its capital base, sending its shares lower.
The company plans to launch its HL Savings product later in the year, a cash deposit service supported by marketplace lending, and this year also launched Lifetime ISAs, or individual savings accounts eligible for a government bonus.
A recent survey revealed a third of SMEs in the IT sector have missed out on business opportunities because of a lack of finance. Distributors have long been a major source of credit for SME resellers but with consolidation taking place in distribution through mergers and acquisitions, the sources of credit available to resellers are being reduced.
One distributor that has publicly taken the initiative on credit is Exertis. The company recently introduced a programme called Credit Xtra with the intention of doubling the credit limit for more than 1,650 of its SMB accounts. There is also the option to increase the limit further if resellers remain within the distributor’s credit terms.
Dow believes that it is especially important to offer extra credit at this time of year, when resellers are targeting the peak summertime buying period in education.
LENDINVEST has closed its bond offer early, due to strong demand from both retail and institutional investors.
The online mortgage lender launched the five-year notes on 19 July and the offer was scheduled to close at noon on Friday. However, it closed the offer at 11.30am on Thursday.
It said estimated net proceeds from the offer would be just under £49m and confirmed that the issue date will be 10 August.
NEW pricing rules on business loans will not apply to peer-to-peer lenders, the Competition and Markets Authority (CMA) has confirmed.
From today, all providers of unsecured loans and overdrafts worth up to £25,000 to small- and medium-sized enterprises (SMEs), will have to publish and clearly display the annual percentage rates (APRs.)
It had previously been unclear if this would apply to P2P and alternative finance lenders but the CMA confirmed to Peer2Peer Finance News this morning that it would not.
While NBFCs mostly deal with the unbanked population, P2P concentrate on the businesses that are usually locked out by traditional lenders and also on the tech-savvy individuals.
While P2P platforms have embraced the use of modern technology, NBFCs have failed in the use of technology. This has really affected their growth as they cannot really compete efficiently in the modern world.
The returns available to investors aren’t as high as they used to be, but they’re still much, much more than you’d get putting your money in a deposit account. But there’s a very good reason for that. It’s an awful lot riskier too. You’re not covered by the financial services compensation scheme – which safeguards up to £85,000 of your savings if your bank goes bust. That means you cold lose everything.
Hexindai Inc. (“Hexindai” or “the Company”), a fast-growing consumer lending marketplace in China, today announced that it has partnered with China UnionPay to launch its “Quick Pass” app on Hexindai’s mobile platform. The app will allow investors on the Company’s platform to use surplus funds that have not been lent out to pay for goods and services provided by stores partnered with China UnionPay by scanning a QR code created by the app.
CHINA will explore methods to include large Internet financial businesses of systemic importance in its macro prudential assessment, said a central bank report issued late Friday.
The first peer-to-peer lending platform opened in 2007, and exploded in popularity, with the number of such platforms increasing 18-fold between 2012 and 2015 and the combined transaction volume jumping about 40 times over the period, said the State Information Center.
Financial technology or fintech companies, particularly those focused on credit analysis, will greatly reduce cost of lending and also reduce credit risks. So, they are likely to experience fast growth on market demand as commercial banks are joining the inclusive finance market.
That market is currently dominated by smaller, private financial institutions, such as peer-to-peer or P2P lending platforms and consumer finance platforms.
In China, only 30 percent of citizens are covered by existing credit reporting system, while in mature markets the percentage could be 70 percent or higher.
By the end of July, the five biggest banks in China-Industrial & Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications and Bank of China－had launched inclusive finance arms, just two months after the authorities concerned called for better financial services for a wider group of people across China.
Boston-based fintech and investment analytics firm, FinMason, announced its international expansion plans and the opening of a new operations center based in Prague. The company stated the initial expansion will include the hiring of twenty software engineers to keep pace with the rapid growth and development needs of the company.
The company shared that FinMason Europe, s.r.o., opened August 1st and the first employees have already started.
Vendorly, an innovative vendor oversight platform for financial institutions, today announced the continued expansion of its platform through the addition of three new third-party oversight integrations available on the Vendorly™ platform. These additions further enable our customers to enhance their compliance management framework and help them maintain the high oversight standards required in today’s marketplace.
Continuing this momentum, the new vendor oversight additions to the Vendorly platform include:
Dun & Bradstreet (NYSE: DNB)— Vendorly customers now have access to Dun & Bradstreet data to help make smarter decisions about their current and prospective vendor network.
The ID Co. — With DirectID, Vendorly customers now have the ability to conduct bank verification for current and prospective vendors in their network, to reduce fraud and misrepresentation prior to payment.
TINCheck — Vendorly customers now have the ability to validate the tax ID of all organizations in their current and prospective vendor network.
A new entrant in German online real estate lending, iFunded wants to address the market of larger property development projects that lie beyond the scope of real estate crowdfunding. Partnering with umbrella investment bank NFS Netfonds Financial Service, the platform is launching its first €10 million real estate bond issue, to be listed on the open market of the Frankfurt Stock Exchange. With this, iFunded leads, for the real estate online funding segment, the Fintech startup trend that consists in moving from exemption/sandbox status to a fully regulated financial environment.
According to Crowdfunding.de, in the first half of 2017, German online real estate crowdlending platforms raised €58 million, 45% more than in the entire year of 2016.
In July 2017, iFunded launched its first public bond offering, what motivated you as a company to add the classical fundraising channel to your online real estate platform?
Real estate crowdfunding in Germany has grown very significantly recently and will reach between €100 and €120 million by the end of 2017. However, it still is small.
Our first project Eisenzahnstrasse Berlin is a €10 million bond issue (ISIN: DE000A2E4FQ5) with a 3.5-year maturity and 5.5% interest rate. It is destined to transform an exi property into 281 flats, including a penthouse, and 2,400 sqm commercial space. The total estimated budget is €49.6 million and the expected income €67 million.
European robo-adviser Moneyfarm expects to become profitable by 2019 as it looks to bring to market new products in the coming months.
The Italian firm filed its 2016 financial statements this morning, announcing expansion to 10,000 customers in the UK and £260 million in global assets under management (AUM), which renders it the second largest robo-adviser in Europe.
The firm has reported total losses of £6.4 million in 2016, but claims this was in line with its agreed targets.
Linked Finance, Ireland’s leading peer-to-peer (P2P) lending company has raised over €1m for Kildare-based businesses.
36 Kildare businesses including well-known businesses Kelly’s Mountain Brew, Celbridge Playzone, and The Academy Barber, have used the Linked Finance platform to raise funds and facilitate business growth.
Mueller notes that Singapore and the UK were the early leaders in Fintech innovation as the respective governments determined it was of strategic importance. With government backing, Fintech flourished.
But there are many challenges for this transformation that is occurring at a breakneck speed. And as Mueller says;
“analog regulations built for the traditional banking space are not conducive to fostering innovation in a financial services industry turned digital.”
Mueller bullets out intrinsic challenges to the existing regulatory ecosystem:
Fear of failure has resulted in some regulators taking a go slow approach instead of being proactive. When things go wrong – who gets the blame?
Complexity in Fintech requires new skills. Regulatory agencies are typically populated with people entrenched in well defined processes. There is a lack of proper skills and staffing.
Internal culture may not be willing to adapt. Changing processes is always a challenge. A cohesive policy strategy is missing.
Fintech innovators may struggle to engage and communicate with a regulator. Fear of engagement harms us all
Yes, some countries are blazing trails in Fintech and the list of countries pursuing a Fintech Hub status is growing. Without acknowledging the elephant in the room that the US is not at the top of this list (even though it is the leading global financial center) is telling about the regulatory morass elected officials have allowed to persist.
Global banks and investment banks are far more complex creatures than their high street counterparts, which is why we’ve seen far less disruption in corporate, commercial and wholesale banking that we are seeing in retail, but don’t be complacent or closed here. There are things happening in the more complex areas too.
While fintech covers a diverse array of companies, business models, and technologies, companies generally fall into several key verticals, including:
Lending tech: Lending companies on the list include primarily peer-to-peer lending platforms as well as underwriter and lending platforms using machine learning technologies and algorithms to assess creditworthiness.
Payments/billing tech: Payments and billing tech companies span from solutions to facilitate payments processing to payment card developers to subscription billing software tools.
Personal finance/wealth management: Tech companies that help individuals manage their personal bills, accounts and/or credit, as well as manage their personal assets and investments.
Money transfer/remittance: Money transfer companies include primarily peer-to-peer platforms to transfer money between individuals across countries.
Blockchain/bitcoin: Companies here span key software or technology firms in the distributed ledger space, ranging from bitcoin wallets to security providers to sidechains.
Institutional/capital markets tech: Companies either providing tools to financial institutions such as banks, hedge funds, mutual funds, or other institutional investors. These range from alternative trading systems to financial modelling and analysis software.
Equity crowdfunding: Platforms that allow a collection of individuals to provide monetary contributions for projects or companies provisioned in the form of equity.
Meantime, rather than ignoring these changes, the biggest banks are investing in them. Since 2012, the ten largest US banks by assets participated in 72 rounds of investment totalling $3.6 billion in 56 FinTech companies whilst, in Europe, Banco Santander leads with the most number of unique investments to FinTech startups. The firm has made 13 investments to 12 unique fintech startups. The largest investment was a $135 million in Q3 2015 to small business lender Kabbage, that also included participation from ING among other investors.
Alternative lending was the golden child among investors around 2015, but lately, the industry seems to have fallen out of favor thanks to regulatory uncertainty and questions over the viability of some business models.
This week alone saw two examples of those concerns in action: One U.S. lawmaker, Rep. Emanuel Cleaver II (D-Mo.) sent a letter to five alternative small business lenders operating in the country, inquiring about their business practices.
All of this makes it even more surprising that alternative lending startups, by far, secured the greatest amount of investment this week – pushing half a billion dollars, in fact.
PledgeMe came within cooee of turning a profit in the 2017 financial year, boosting revenue from fees to use its equity crowdfunding and peer-to-peer lending platform while also clamping down on costs, and is considering adding another string to its bow which that could need another capital injection.
The Wellington-based company narrowed its annual loss to $11,228 in the 12 months ended March 31 from $398,611 a year earlier as revenue climbed 55 per cent to $268,473 and operating costs were slashed 48 per cent to $288,502.
On Saturday, Fintech Australia released a new infographic that revealed more details about the Australian fintech industry’s successes so far this year.
We have seen demand for construction loans between $10 million and $30 million spike 20 per cent per cent over the last six months as Tier 1 banks are quickly tightening both pre-sales thresholds and loan-to-valuation ratios on new developments.
One area of the greatest demand for non-bank finance is coming from Chinese property developers, who do not have the track record or Australian assets to provide comfort to the major lenders.
Peer-to-peer lending models, like that of Chifley Securities, allow us to access investor funds to progress these developments, as we are applying different, more nuanced assessment of the risks associated with these loans.
A new study conducted by the University of South Australia (UniSA) in partnership with DomaCom, suggests that crowdfunding could become a viable new vehicle for investors trying to make headway into the country’s increasingly challenging property market.
Braam Lowies, the study’s lead researcher, noted that while the concept was relatively new in Australia, it had been successful in the United States and United Kingdom for approximately seven years.
Wadhawan Global Capital (WGC), which owns 38% of Dewan Housing FinanceBSE 0.07 %, has invested Rs 175 crore in London-based mortgage financer Neyber, marking it’s second investment through the newly set up UK arm as it seeks to expand its global footprint.
Those who do not back the idea of PPF believe investors should carry the risk of loss as the principal idea of P2P Lending is to offer investors an “alternative investment route”. The P2P Lending platform, at best, can try to strengthen the risk-assessment processes by making the optimal use of technological innovations.
While the other camp which is in favour of PPF opines that it is not a luxury but a necessity at the moment as it will only instill confidence among the investors. And, it’s not about disbelieving one’s capabilities.
A summary of the proposals put forward by MAS in the Consultation Paper is set out below.
Expansion of licensing exemptions
(a) Expansion of licensing exemption for dealings in securities other than CIS
(b) Expansion of licensing exemption for provision of fund management services incidental to advisory activities
Dispensation with prior client approval for each and every rebalancing transaction
Case-by-case exemption from collecting full information on the financial circumstances of clients
Relaxation of criteria for CMS licences in fund management for digital advisers
Development, monitoring and testing of client-facing tools
Provision of information on algorithms and conflicts of interest
Responsibility of the board and senior management
MAS Establishes Payments Council (LATTICE80 Email), Rated: A
The Monetary Authority of Singapore (MAS) announced on 2 August that it will establish a Payments Council, comprising 20 leaders from banks, payment service providers, businesses,and trade associations. Members are appointed for a two-year term and chaired by Mr Ravi Menon, Managing Director, MAS. The Payment Council marks the vision of an e-payments society, fostering collaboration between providers and users of payment services in Singapore.
Communication and technology services company Green Packet Bhd is eyeing an expansion into a new growth area – the mobile payment solutions segment, an area poised for disruptions through technology.
According to the 2016 Visa Consumer Payment Attitudes survey, 74% of Malaysians prefer to make electronic payments instead of cash, an increase of 8% compared with 2015. In fact, Visa indicated in a separate study that seven in ten Malaysians are willing to use mobile wallets.
Such is the case of American banking giant Citi, which sees itself as a technology company with a banking license, having introduced video banking recently in India.
Video banking is seen suitable especially in wealth management, which is part of the regional consumer business led by Selva. This is a segment where customers need trust and constant advice.
Citi receives 70 million calls a year, almost half of which are answered by a phone agent. The bank usually spends about 30 to 45 seconds validating the call, asking the client his or her mother’s maiden name, date of birth and details about the last transaction.
In the Philippines, Citi now implements voice-enabled biometrics for easier client verification. Citi is likewise moving toward facial recognition.
GSX, which owns and operates the Gibraltar Stock Exchange, said on Friday that Cyberhub Fintech Holdings Limited is a new strategic shareholder. Cyberhub is a unit of Broctagon, a derivatives trading technology provider.
The stock exchange also wants to become the world’s first to fully integrate blockchain technology.
According to the 2017 Old Mutual Savings & Investment Monitor, working South Africans allocate only 15% of their incometowards savings.
Naidoo explained that these statistics emphasise the extent of the national savings deficit and the large gap that exists between targeted economic growth of 5.4% per year, as per the NDP, and the ability of the South African economy to fund that growth.
Naidoo believes that financial services providers and advisers have a vital responsibility to promote a savings culture via collaborative advice and financial literacy efforts.
Just three months in and Barbados’ sole peer-to-peer lending company, Carilend, is seeing tremendous success with 100 percent of its loans.
With over 900 registered users on the site to date, the team at Carilend has been amazed at the response they have received.
Carilend reported their “average” Borrower is borrowing $8,617 for 43 months at an average interest rate of 11.34%. Whilst all applications receive an answer in one working day, Carilend recently approved a brand new Borrower in 2 hours; 22 minutes from receipt of their initial application.
News Comments Today’s main news: California SC finds arbitration agreement waiver unenforceable. BondMason first P2P provider to launch SIPP. China’s internet finance thrives as fraud fades. Marvelstone plans robo-advisor for family offices. Today’s main analysis: Real estate tech deals tick up. Today’s thought-provoking articles: 5 areas of fintech attracting investment. UK still fintech unicorn capital of Europe. Millennials favor search […]
Real estate tech deals tick up. AT: “I suspect most of this is being driven by RECF. Mortgage tech is starting to rise. PropTech is huge, and that includes tools for real estate brokers and investors including rental unit management.”
Why I don’t believe in the hybrid advice model. AT: “This is a position I’d expect of LendingRobot’s Emmanuel Marot. Although brilliant, LR and Marot cannot fight market forces. Nonetheless, I agree with his bottom line: Humans can spout meaningless justifications better than any robot, which is why the hybrid model is catching on. While investors think technology is cool, there is still that spark of meaningless human voice-in-the-head begging them to fear it.”
China’s internet finance thrives as fraud fades. AT: “This report came sooner than I thought. Could it be that companies are shaping up under the threat of enforcement, and the examples already set?”
On April 6, the California Supreme Court issued a unanimous opinion in McGill v. Citibank, finding that a pre-dispute arbitration agreement was unenforceable to the extent it required the plaintiff to waive her right to seek public injunctive relief. According to the court, the right to pursue a public injunction constitutes an “unwaivable public right” under California law. Therefore, “a provision in any contract ― even a contract that has no arbitration provision ― that purports to waive, in all fora, the statutory right to seek public injunctive relief . . . is invalid and unenforceable under California law.”
The California court further explained that its partial unenforceability finding is consistent with the U.S. Supreme Court’s decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). In that case, the Court stated that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitrable, rather than a judicial forum.”
The court also acknowledged, but found no reason to address, the plaintiff’s related claim based on what is known under California law as the “Broughton-Cruz” rule, asserting that a request for a public injunction cannot be decided in arbitration. Finally, the decision remanded the case to the California Court of Appeals to consider ― if either party should raise the issue ― the question of whether the rest of the arbitration agreement remains enforceable in light of language contained in the most recent version of the underlying account agreement stating that, “if any portion of the arbitration provision is deemed invalid or unenforceable, the entire arbitration provision shall not remain in force.”
Pepper Points
The decision of the California Supreme Court in McGill v. Citibank will likely be appealed.
In light of this decision, providers of consumer products and services should review their existing arbitration agreements to determine whether the consumer’s ability to pursue a public injunction or other “public rights” is completely foreclosed.
McGill v. Citibank also highlights the risks of including language in an arbitration agreement (or in any contract) stating that the agreement will be invalid if any portion of the agreement is deemed invalid or unenforceable. Given the impossibility of predicting how courts may interpret even well-settled questions of law, standard severability language is always preferable unless different language is specifically mandated.
At the same time, some of the steam has come out of the sector. Overall investment and merger and acquisition activity in fintech almost halved from a record high of $46.7bn in 2015 to only $24.7bn last year, according to KPMG.
Another negative factor was the governance scandal last year at Lending Club, the biggest online lender in the US, combined with disappointing performances by some of its rivals, which turned investors off peer-to-peer lending.
China
Total fintech investment in Asia inched up to a new record of $8.6bn last year, although the number of deals fell by more than 8 per cent. More than half the region’s total fintech investment came from one deal: Ant Financial’s $4.5bn funding round.
Artificial intelligence
The launch of voice-activated assistants such as Amazon Alexa and Google Voice has opened up possibilities for making online banking easier for customers. Banks such as Capital One have already latched on to this trend.
Cyber security
Cyber security shot to the top of the boardroom agenda for banks after one of the biggest bank robberies in history was carried out by cyber thieves on the Bangladesh central bank via the Swift payments system in February 2016. The crooks made off with $81m that was on deposit at the US Federal Reserve.
Blockchain
Most big financial groups remain convinced of the potential for blockchain to revolutionise parts of their industry and several central banks are examining the potential for using the technology to create digital currencies. Venture capital investment in blockchain companies rose by a fifth to $544m last year, according to KPMG.
Insurtech
The insurance industry has been slower than other areas of finance to wake up to the digital disruption at its door. But recently start-ups such as So-sure, Friendsurance, Lemonade, Guevara and Brolly have emerged with plans to transform the sector. Venture capital investment in insurance technology companies doubled last year to almost $1.2bn, according to KPMG.
2016 was a banner year for real estate tech with over $2.6B in funding to the category across 277 deals. At the current run rate, 2017 could very well reach another consecutive funding high, even as deals are on track to come in slightly below last year’s total.
So far this year, real estate tech companies have received $733M across 61 deals. At the current run-rate investment activity is on track to reach $2.9B invested across 247 deals.
On a quarterly basis, deals have materially declined since Q3’16.
Funding, on the other hand, has increased in each of the last three quarters and Q1’17 received the second-largest quarterly funding total ever, behind Q2’16.
On paper, it looks pretty good: let the robot do the simpler stuff, like a modern-portfolio-theory allocation between a few ETFs, and have a human being intervene to provide more sophisticated and personalized advice.
In practice, I think it’s nonsense. If you believe the market is truly efficient, then there’s no point in using an advisor, robot or human. Just invest in a broad market ETF and be done with it (except for tax harvesting).
If you think the market is efficient-ish, then low cost optimization is the solution. Go robot. If you think you need an active manager, you should read the trove of statistical analysis that demonstrate you’re simply paying for someone’s yacht. Indexes beat stockpickers [92% of time]…
It does make sense for robo-advisors to move to the hybrid model, since it allows them to differentiate and de-commoditize their service, but for their clients, not so much.
Machine learning algorithms have become so good in the last 10 years, that any number-crunching and quantitative decisions a smart but junior employee can do, the machine will do better, faster, and cheaper.
As its first move into lending, robo-advice provider Wealthfront has revealed it will let clients borrow money against their investments, Reuters reports.
Along with robo rival Betterment, the robo-advisor has increased competition in the wealth management space against the likes of wirehouses Merrill Lynch and Morgan Stanley, brokerages like Charles Schwab and even fund houses with direct-to-consumer offerings like Vanguard.
Investors with at least $100,000 with Wealthfront can now borrow up to 30% of their balance for loans for anything except purchasing more investments on the firm’s platform, the company announced Wednesday.
Reuters reports loans will cost between 3.25% and 4.5%, and any money a client deposits into their account after taking out a loan will pay off the balance rather than investments.
Financial services firm Edward Jones today announced a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. Backed by the St. Louis Regional Chamber, SixThirty was founded in 2013 and to date has funded more than 25 startups across the globe.
As part of the partnership with SixThirty, Frank LaQuinta, a general partner with Edward Jones, has joined the organization’s Investment Committee which evaluates the investment pipeline and selects FinTech startups that SixThirty invests in.
Pi Capital International LLC (“Pi Capital”) is pleased to announce that it was the exclusive financial advisor and placement agent to Money360, Inc. for a structured debt facility of up to $250 million. The financing vehicle is designed to allow Money360 to employ funding as it provides commercial real estate loans to its U.S. client base. The fund provides Korean investors with a short-duration, high-yield fixed-income instrument.
“The fund raise by Pi Capital will allow us to substantially increase our assets under management,” said Evan Gentry, M360 Advisors’ CEO. “We believe this gives us a competitive advantage with an anticipated $250 million investment from one of South Korea’s most reputable financial institutions.”
ApplePie Capital, the first online lender solely dedicated to the franchise industry, today announced the appointment of franchise industry veteran Ronald Feldman as chief development officer, as well as the acquisition of Funding Solutions, LLC, a well-established national franchise lending consultancy that specializes in SBA, conventional and equipment finance loans. Feldman and Funding Solutions’ managing partner Randy Jones will join ApplePie’s leadership team.
These additions position ApplePie’s financial platform to exponentially expand upon its hallmarks of speed, flexibility and efficiency with new product options, an expanded network of lending sources and an extraordinary wealth of franchise finance expertise for its growing list of franchisor partners. Currently, ApplePie serves more than 40 franchisors including Orangetheory Fitness, Jimmy John’s, Jersey Mike’s and Marco’s Pizza.
Responsible for growing ApplePie’s brand portfolio and contributing to product strategy, Ronald Feldman comes to the company with more than 20 years of experience in franchise leadership and franchise financing. He previously served as chief development officer at FranData, the industry leader in market research, and as a principal and co-founder of Franchise America Finance (FAF) and The Siegel Financial Group. Feldman was also an early franchisee of The Goddard School system. As an active advocate of the franchising business model, Feldman currently serves the International Franchise Association (IFA) as chair of the Supplier Forum Advisory Board and sits on both the Board of Directors and the Executive Committee of the association. Feldman was awarded the Sid Feltenstein MVP Award for service to the IFA’s Political Action Committee (FRANPAC) in 2013.
Unfortunately, some Millennial stereotypes are rooted in fact. A 2015 PWC survey showed that only 24% of us have basic financial knowledge, and even so, only 27% of us seek financial advice on saving and investing.
When it comes to jobs, we’re not the deadbeats that people assume. In fact, a 2015 Deloitte report found that 54% of Millennials had started or had planned to start their own businesses by year-end. Although we may work differently than generations past, many of us are passionate, entrepreneurial and looking to make a difference.
“Advisors need to understand how truly connected this new generation is to each other and to information.” When it comes to trusting a financial advisor, Kamine highlights this outsider oversight as a road block.
Millennials currently represent a meaningful fraction of U.S. wealth that will grow as baby boomers continue to pass down an astounding $30 trillion over the next 30 years. When this transfer of wealth happens, an estimated 66% of Millennials will fire their parents’ financial advisor, according to InvestmentNews Data.
This year, 86% of Millennials said they are interested in socially responsible investing, according to Morgan Stanley.
The Millennial Disruption Index reports 71% of us would rather go to the dentist than listen to what banks tell us. In our financial planning, we have shorter-term goals that we’re trying to align with the things we care about.
With an average age of 51, many advisors still build financial plans based on their view of a traditional life cycle with set ages for when we start a family, buy a house, climb the corporate ladder and retire. But their view is not our reality. Kamine adds, “Financial advice has been like a structured box without much creativity or understanding of the individual. Advisors need to become more dynamic because we’re revolting against structure. I’ve told my advisors I don’t envision buying a house for at least the next five years. And I’m definitely not focused on planning for retirement 40 to 50 years from now.”
DadeSystems, a Miami-based provider of account receivable automation solutions, raised $2 million in funding to accelerate its growth from Miami early-stage venture firm Ocean Azul Partners.
The report, the first in a series on regulation in the fintech industry, focuses specifically on marketplace lenders, mobile payments, digital wealth management platforms and distributed ledger (also known as blockchain) technology.
While the GAO did not issue any recommendations in the report, it noted that regulation of these four subsectors was varied depending on the types of products or services offered and the way in which they are delivered to consumers.
College Ave Student Loans, the leading next-generation student loan fintech lender, has teamed up with America’s #1 College Life Expert Harlan Cohen to help families get comfortable with the uncomfortable when it comes to college and money. Hosted by Harlan Cohen, author of The Naked Roommate, the Naked Financial Truth Digital Tour will feature a series of free webinars and videos focused on financial advice, strategies and tips to help parents and students plan for post-secondary education.
The first webinar, “The 7 Biggest Financial Mistakes College Students Make (And How Parents Can Help)” will be held on Tuesday, April 25 at 7 p.m. ET. Registration for the webinar is free and available online at
These eight companies — which are required to have a presence in the region to receive an investment — will begin the 12-week accelerator on April 24, meeting with mentors and advisors selected to help guide them toward growth and fundings. They run the gamut of the financial industry, from creating data visualizations of personal assets to a student loan repayment benefit program. Four focus on putting financial technology to use solving social issues.
In the next several weeks Raymond James is setting its sights on rolling out a revamped suite of “longevity” planning tools. The updated software comes with the kinds of bells and whistles that advisors might expect from a nearly five-year-old package – a “new look and feel” as well as a “more conversational design,” as company execs put it.
Other notable enhancements, they say, include more flexibility for analyzing portfolio return patterns and capabilities allowing real-time updates as clients’ household budgets and retirement goals change over time.
Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has added Channel Partners Capital as its newest client to utilize Tamarack’s Lease/Loan Origination Accelerator on Salesforce.
Channel Partners, a leading provider of small business working capital loans, will benefit from added flexibility, streamlined operations and enhanced audit controls, as a result of using Tamarack’s Lease/Loan Origination Accelerator on Salesforce.
Tamarack’s Lease/Loan Origination Accelerator on Salesforce is a scalable solution offering users the ability to automate work queues,increase throughput of loans without additional head count and customize notifications from lead generation through to funding.
The UK dominates the European financial technology industry, with figures showing it boasts more billion-dollar fintech companies than the rest of the continent put together.
Britain houses four fintech “unicorns” – companies valued at $1bn (£780m) or more – with a combined valuation of $18.5bn, according to a report by the technology investment bank GP Bullhound.
This compares to two in the rest of Europe, which are worth $4.6bn between them.
Globally, fintech investment grew slightly to $13.6bn, although there was a decrease in the number of investments from 942 to 840.
BondMason has become the first peer-to-peer service provider to launch a self-invested personal pension (SIPP) product. The service aims to offer investors a flexible and tax-efficient way to save for retirement.
The new retirement product, which selects loans across P2P lending platforms, will grant UK savers exposure to higher-return assets than traditional pension savings products. Starting from a minimum investment of £5,000.
MILLENNIALS are favouring search engines over professional financial advice when it comes to managing their own money, research claims.
A poll of more than 2,000 adults by Zurich UK claims 15 per cent of millennials, referring to those aged 18-34, are turning to search engines such as Google instead of seeking professional financial advice, more than any other age group.
Only three per cent of 35-44 year olds and nine per cent of those aged 45-54 and over 55 respectively, opt for web-based information.
Asked why they eschew professional help, one in five millennials cited confidence in their ability to sort their own financial futures as a reason for not initially seeking professional help, while 37 per cent felt they do not earn enough to need to speak to a financial adviser, and almost a quarter said they were too young.
High Street bank TSB said some loan providers make a “hard mark” on credit files when someone asks for a loan price or quote.
TSB chief executive Paul Pester said: “We estimate that consumers are losing out by as much as £400m each year, which is going straight into the pockets of aggressive loans providers. It is time the industry comes clean on these costly underhand tactics.”
P2P lending offers an innovative funding option for businesses – including developers – and is fast becoming the go-to option.
It’s essential that the development finance sector stays competitive and vibrant, and alternative lending allows that to happen. Far from just being a back-up for situations that the traditional lending sector can’t cater to, crowdfunding and P2P platforms can actually be a more efficient source of funding.
Achieving compliance will not happen overnight. Indeed, MiFID II is widely considered to be one of the most sprawling pieces of financial legislation ever devised, and thus it presents numerous challenges. One of which being that recording calls will become mandatory for all areas of financial advice.
Then, if you add GDPR (the EU’s General Data Protection Regulation), coming into effect in May 2018, into the equation, 2018 is shaping up to be a regulatory nightmare for financial services firms. Under GDPR, we all have a‘ right to be forgotten’ or a right to erasure of all personal information held on us by a particular company. This places a duty on companies to be able to quickly access and delete the information they hold on specific individuals, on request.
However, comparing the responses of IT professionals and those responsible for managing Risk & Compliance within a business shows IT teams have a better overall understanding of the consequences of non-compliance. 62% of risk and compliance managers admitted to not knowing a company can be fined up to five million euros or 10 per cent of annual turnover, compared to only 42% of IT managers and decision makers.
A stranger’s photograph appears on your smartphone screen, and you decide whether to give him or her a loan or not. The money is not yours, but instead is provided by microfinance organizations. That’s the main difference from traditional American P2P (peer-to-peer) lending, and with Suretly you can earn or lose depending on whether the recipient of your largesse proves to be a reliable borrower or not.
Suretly is geared exclusively to short-term loans of up to one month; in other words, those with the highest interest.
The money itself is loaned by the microfinance organization that the borrower applies to, but only if they attract enough sureties to cover the whole amount, plus interest. Users share the risks, and depending on whether the individual returns the money or not, they can lose or earn from $1 to $10.
On the app, borrowers are divided into seven categories from A to G depending on their trustworthiness. The higher the risk that the loan won’t be repaid, the higher the price of its surety. The maximum commission is $1.5.
Listed Australian deposit taking institution Goldfields Money (ASX:GMY) looks to be making good on its intention to become a leading player in the digital banking product distribution and BaaS market in Australia, announcing last week that it had signed an MoU with Singapore headquartered remittance fintech Instarem.
What is interesting about the MoU is the intent to move beyond remittance towards a broader banking play for cross-border SMEs and products orientated towards visa holders visiting or living in Australia.
The two companies should have a healthy market ready to capitalise on. According to the Australian Bureau of Statistics, over the last 10 years the proportion of the Australian population born in China alone has increased from 1.2% to 2.2%, coming in just behind New Zealanders and British immigrants. Those born in India currently make up 1.9% of the population, while citizens from the Philippines, Vietnam and Malaysia collectively add up to further 2.7%.
Migration isn’t going away. And the degree to which an individual’s assets are spread across countries is also on the increase thanks to globalization.
China has four large state-owned banks, and state-owned enterprises generally have easier access to financing. Many small companies are troubled by the financing bottleneck, creating pent-up demand.
Meanwhile, working-class families struggle to figure out where to invest their savings to seek higher returns, and many of them move money online. The country, home to the world’s biggest online population, also has a number of groups, such as college students, who are underserved by banks.
By March 2017, 3,607 Chinese P2P lending platforms had run into trouble or been forced to close, with only 2,281 platforms in normal operation.
On top of P2P lending, Internet finance also covers business such as third-party online payment, crowd funding, and other financial services.
Risk caused by the Internet finance industry has wide repercussions. Some P2P lending platforms resembled hybrid financial institutions providing clients with various financial services online, analysts said.
Businesses such as P2P lending, Internet-based insurance, third-party online payment, and online asset management were among key areas for strengthened supervision, industry observers said.
Internet finance last week appeared on the top banking regulator’s list of ten most important areas for enhanced risk control, with targeted measures to be taken to stem emergence of a financial crisis.
Wang said 2017 will be a watershed year for Chinese Internet finance as the rules are tightened, bringing the industry out of the wilderness.
New York-based developer Tishman Speyer is teaming up with China’s CreditEase Wealth Management to invest $1.4 billion in China and other countries within the next three years.
The strategic partnership is aimed to extend “global cooperation in resource sharing, fund investment, buyouts and business development,” the firms said in a joint statement.
Singapore-based Marvelstone Capital plans a robo advisor platform for the under-served family office market in Asia.
The platform is being developed with Singaporean fintech startup Smartfolios, and will be launched in the third quarter of 2017. It will be available on desktop and mobile for Marvelstone Capital’s clients.
Marvelstone will target family offices based in Singapore, Malaysia, Indonesia, Myanmar, as well as India. The company points out that Malaysia is an important market and Cho added: “It is a huge market and the culture is quite unique as well, there’s a huge Shariah-compliant market, so it is definitely one of the most important markets for us.”
