Thursday November 29 2018, Daily News Digest

GlobalData

News Comments Today’s main news: MPOWER Financing raises $110M. Funding Circle, BBB partner on SME lending. Zopa sells batch of defaulted loans. Yirendai misses earnings estimates by .17 EPS. RateSetter aiming to be Australia’s biggest consumer loans provider. Revolut greenlighted to expand into Singapore, Japan. Today’s main analysis: Is UK headed for credit card crisis? Today’s thought-provoking articles: 37.4% of purchase […]

GlobalData

News Comments

United States

United Kingdom

Southeast Asia

Other

News Summary

United States

MPOWER Financing raises USD110 million in latest funding round (Private Equity Wire) Rated: AAA

MPOWER Financing, a fintech company providing educational loans to high-potential international and DACA students, has completed its largest funding round to-date with USD110 million in new financing for students enrolling in major US universities.

This latest round, led by Gray Matters Capital and Community Investment Management (CIM), will be used to support new product growth and technology enhancements as well as to finance MPOWER Financing’s expanding student loan portfolio.

“We co-created a unique type of debt with Community Investment Management’s leadership team. This USD100 million is just the beginning of MPOWER’s Capital Markets roadmap,” says Mike Davis, MPOWER Financing Chief Investment Officer and co-founder.

37.4% of Purchase Borrowers Received  Mortgage Rates Under 5% Last Week (LendingTree), Rated: AAA

  • For 30-year fixed-rate mortgages, 37.4% of purchase borrowers received offers under 5%, up from 29.4% the prior week. A year ago, 98.1% of purchase offers were under 5%.
  • Across all 30-year fixed-rate mortgage purchase applications on LendingTree, the most common interest rate was 4.875%, offered to 21.3% of borrowers.
  • 27.9% of 30-year fixed-rate mortgage refinance borrowers received offers under 5%, up from 20.1% the prior week. A year ago, 98.1% of refinance offers were under 5%.
  • Across all 30-year fixed-rate mortgage refinance applications, the most common interest rate was 5.00%, offered to 22.3% of borrowers.


5 Technologies And Trends Changing The Credit Industry (ValueWalk), Rated: AAA

New tools and advancements in the credit industry are transforming the way consumers borrow cash. Before, loan options were limited to government entities (Pag-IBIG and SSS), banks, credit cards, cash advance from credit cards, and loan sharks. These financial institutions (apart from loan sharks) are heavily regulated, but with a roster of new methods offered today, loaning has become more accessible and borrower-friendly.

The Future of Fintech Video Series: Intuit Consumer Group (ATM Marketplace), Rated: A

Intuit Consumer Group’s Varun Krishna gives some background on the company’s latest partnerships with Lending club and Wealthfront. This interview is part of a video series, “The Future of Fintech,” produced by Mobile Payments Today and powered by Galileo Processing.

MPL Loan Performance Monitor (as of August 2018) (PeerIQ), Rated: A

Highlights from the August 2018 MPL Loan Performance Monitor :

  • Our MPL Loan Performance Monitor tracks the delinquency rates, cumulative losses, cumulative prepays and transition matrices using public marketplace lending data that comprises unsecured consumer loans originated by Marketplace Lenders.
  • Delinquencies on the 2017 vintage in the first 18 months are lower than those on the 2015 and 2016 vintages with lenders having tightened underwriting standards.
  • Cumulative loss rates on the 2017 vintage are lower than those on the 2015 and 2016 vintages. Cumulative losses on the 2015-2017 vintages are outpacing those on earlier vintages.
  • Cumulative prepayments have picked up, with the 2017 vintage paying significantly faster than all prior vintages.

Lendio Recognized as a Great Place to Work for Third Consecutive Year (Lendio), Rated: A

Lendio was certified for the third consecutive year as a great workplace by the independent analysts at Great Place to Work. Lendio earned this credential based on extensive ratings provided by its employees in anonymous surveys. A summary of these ratings can be found at 

Four Major Fintech Trends In The Self-Directed IRA Industry (Forbes), Rated: A

Fintech has helped significantly increase the number of investment options available to self-directed IRA investments. From online crowdfunding platforms to peer-to-peer lending portals, as well as cryptocurrency and digital asset exchanges, new financial technology has helped self-directed IRA investors gain access to new and exciting investment opportunities in an efficient and secure investment environment.

There has never been a better time to find a bad credit mortgage (Mortgage Introducer), Rated: A

Research conducted by the Online Mortgage Adviser website has discovered that up to 70% of potential mortgage applicants fail to approach lenders or other service providers because they mistakenly believe that their personal circumstances or financial histories will preclude them from being considered.

The study, which was based upon a survey of over 2,000 people nationwide, found that almost 50% of respondents believed that a low credit score, or evidence of previous issues, would automatically disqualify their application. 33% and 15% (respectively) felt that a zero-hour contract or payday loan would prevent them from achieving a mortgage loan.

stREITwise Launches Invest for a Cause (GlobeNewswire), Rated: A

stREITwise, an investment vehicle that makes commercial real estate investments accessible to everyone, is announcing the second annual Invest for a Cause holiday campaign. Through December 31st, their executive team will personally make a donation equal to 2% of any new investment to a non-profit of the investor’s choice.

2018’s Top Takeaways (Commercial Property Executive), Rated: A

But perhaps the biggest catchphrase of 2018 represents the rapidly evolving technologies that are benefiting—and some even say revolutionizing—the commercial real estate industry. So-called “proptech” includes a range of building performance solutions, along with financial benefits like the developing blockchain process protections and growth of the still fledging real estate crowdfunding business. (Our most recent discussions include our Mission: Success profile of MetaProp’s founders and the CFO Corner column “3 Ways to Leverage Fintech.”)

Small Banks Join Forces To Bring Fintech To Customers (Forbes), Rated: A

The move is driven in part by a desire to innovate and part survival. It comes as millennials are bypassing branches and traditional banking services for the fintech offerings at an increasing rate. Take Quicken Loans, the Detroit-based lender that operates Rocket Mortgage it’s completely digital platform, for one glaring example.

Stocks Hold Onto Gains Ahead of Powell Speech (Nasdaq) Rated: A

Counterstrike: The market looks like it might rise into the G-20 meeting that begins on Friday, so Jeremy thought this was a good time to pick up a couple names. Firstly, the editor added a 6% allocation in online marketplace Lending Tree (TREE), which has been halved from its 2018 highs. But it could be poised for a sharp move higher as a strong quarterly report has exposed its oversold position.

Online Lender Settles With FTC Over Refinancing Misrepresentations (Manatt), Rated: A

Issuing a warning to other lenders, the Federal Trade Commission (FTC) reached a deal with an online lender over charges the company violated the FTC Act by making false statements about student loan refinancing.

Velocity Commercial Capital Chooses SS&C for its Finance Transformation (SS&C), Rated: A

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that Velocity Commercial Capital, LLC (‘Velocity’) has signed a multi-year agreement with SS&C Primatics’ EVOLV platform. EVOLV will help Velocity transform their financial operations and capitalize on growth opportunities in a controlled environment. Velocity, a direct portfolio lender, provides investment property loans for residential 1-4, multi-family, mixed-use and small balance commercial properties.

Guaranteed Rate Expands Its Footprint in Hawaii (GlobeNewswire), Rated: B

Guaranteed Rate, Inc. (“Guaranteed Rate”), one of the largest independent retail mortgage companies in the United States, today announced that it will acquire certain assets of Honolulu HomeLoans (HHL) and Hawaii Lending Alliance (HLA), growing its existing Guaranteed Rate presence in the Hawaii market and adding an experienced team of mortgage professionals.

BFS Capital Appoints Mark Ruddock as Chief Executive Officer (Citizen Tribune), Rated: B

BFS Capital announced today the appointment of Mark Ruddock as Chief Executive Officer, effective immediately. He will also join the company’s Board of Directors.

United Kingdom

Funding Circle and BBB announce £150m SME lending partnership (Bridging & Commercial), Rated: AAA

The British Business Bank (BBB) has committed to lend up to £150m to UK small businesses through Funding Circle.

The transaction has been made under the bank’s ENABLE Funding programme and is expected to support the growth of over 2,000 UK companies.

The new facility will provide senior financing to a transaction with the Funding Circle SME Income Fund Limited, the publicly traded fund that lends exclusively through Funding Circle.

Zopa sells batch of defaulted loans to boost investor returns (P2P Finance News), Rated: AAA

ZOPA has sold a batch of defaulted loans to a debt collection agency, which it says will enable a faster and higher recovery for investors.

The peer-to-peer consumer lender informed its investors last week about the debt sale. It said that it has received upfront payment for the loans in question and will pass on the proceeds to investors within the next couple of weeks.

The UK could be headed for a credit card crisis (GlobalData Email), Rated: AAA

Almost three quarters of retail consumers in the UK (those with liquid assets between £0 and £3,918) do not pay off their credit card balances in full each month, says 

Britain’s creative industries break the £100 billion barrier (Gov.UK), Rated: A

The UK’s roaring creative industries made a record contribution to the economy in 2017, smashing through the £100 billion mark.

Its value of the creative industries to the UK is up from £94.8 billion in 2016 to £101.5 billion, and has grown at nearly twice the rate of the economy since 2010, according to figures published today by the Department for Digital, Media, Culture and Sport (DCMS).

It continues to perform highly and over the last two months British tech firms Monzo, Farfetch and Funding Circle have surpassed the $1 billion mark, meaning they are now so-called ‘unicorns’.

China

Yirendai (YRD) Posts Quarterly Earnings Results, Misses Estimates By $ 0.17 EPS (Fairfield Current), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Monday, November 12th. The technology company reported $0.35 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.52 by ($0.17), Briefing.com reports. The company had revenue of $163.20 million for the quarter, compared to the consensus estimate of $179.48 million. Yirendai had a return on equity of 40.40% and a net margin of 18.56%. The company’s revenue was down 28.3% compared to the same quarter last year. During the same period last year, the firm posted $0.74 EPS.

Source: Fairfield Current

Senmiao Technology (AIHS) Acquires 60% Equity Interest in Chinese Automobile Financial Leasing (StreetInsider), Rated: AAA

Senmiao Technology Limited (NASDAQ: AIHS), an online lending platform in China connecting investors with individual and small-to-medium-sized enterprise borrowers and creditors, today announced that it entered into an Investment and Equity Transfer Agreement (the “Agreement”) to acquire a 60% equity interest in Hunan Ruixi Financial Leasing Co., Ltd. (“Ruixi”), a Chinese licensed financial leasing company focusing on the auto industry with registered capital of $10 million. In exchange for the 60% equity interest in Ruixi from its three existing shareholders, Senmiao has agreed to contribute $6 million in registered capital to Ruixi. The acquisition closed on November 22, 2018.

Beyond The Sugar Rush: Strategic Stimulus For Chinese Stocks (Seeking Alpha), Rated: A

Private companies and even individuals have taken full advantage of loose credit conditions. Rising corporate bond defaults and nonperforming loans, as well as the recent collapse of hundreds of peer-to-peer lending platforms, suggest that at least in some cases, the money came too easily. Concerned global equities investors are already applying a substantial discount to Chinese stocks because of debt issues.

European Union

‘Inconsistent and punitive’ employee ownership rules are damaging Europe’s start-ups, say tech bosses (Telegraph), Rated: AAA

A group of thirty European tech start-ups have warned that the European Union’s “inconsistent and often punitive rules” employee ownership rules are hindering their businesses.

The entrepreneurs, which include the founders and chief executives of iZettleTransferWise and Delivery Hero, stated that laws across the continent make it costly for employers to give out stock options to employees.

The warning to EU policymakers, in an open letter, comes as research by venture capitalists Index Ventures finds that employees own only 10 per cent of late-stage start-ups in Europe, because of limitations brought about by regulations.  However in the US it is 20 per cent.

Online Lender October Officially Launches in the Netherlands (Crowdfund Insider), Rated: A

Online lender October (formerly Lendix) has launched in the Netherlands. Alongside this expansion, the Paris based October is providing SME financing in France, Spain, and Italy.

According to a note from October, SMEs may apply for loans ranging from €30,000 and up to €3.5 million.

Solactive Launches New Sharing Economy Index (Mondo Visione), Rated: B

Solactive is pleased to announce the launch of the Solactive Sharing Economy Index. It tracks companies active in the Sharing Economy, and other modern economies such as on-demand and subscription.

Formerly being attributed to open-source communities, the umbrella term “Sharing Economy“, nowadays reflects various economic activities such as peer-to-peer sharing of goods and services.

International

Zero Fees and Interest-free Loans in Decentralized Credit Networks (NewsBTC), Rated: AAA

Money lending is the core principle of any functioning economy. Decentralized credit networks which have recently seen a rapid increase in popularity promise easy and global access to credit and loans for businesses and the public by immediately connecting borrowers and lenders on the platform. Users of IOU credit networks can even take advantage of interest-free loans and zero fees.

Australia

RateSetter putting pieces in place to be Australia’s biggest consumer loans provider (Finder), Rated: AAA

When RateSetter started operations in Australia four years ago, the peer-to-peer (P2P) lending industry was in its infancy and its risk-based, investor-funded loan was seen as an alternative. But a lot can happen in four years. Today, major banks such as CommBank, HSBC and Citi use risk-based pricing, once only the domain of P2P lenders, while the formerly “alternative” RateSetter funded over $25 million in consumer loans this month.

Foggo said the lender has been “determined” to focus on specific products. One of its new ones is a renewable energy loan which it launched two and a half years ago.

India

Suspension of Aadhaar verification to hit lending of small fintech players (The Hindu Business Line), Rated: AAA

Fintech players, especially online lenders in the personal and consumer loans segment, are likely to face slowdown in business following the Supreme Court order that prevents private companies from seeking Aadhaar data for e-KYC and e-signatures.

Asia

Fintech firm Revolut gets green light to expand to Japan and Singapore (CNBC), Rated: AAA

British mobile bank Revolut has obtained licenses to operate in Japan and Singapore as it readies an expansion into Asia.

The London-based financial technology firm said Thursday that it had acquired a remittance license from the Monetary Authority of Singapore and full authorization from Japan’s Financial Services Agency.

It said Thursday that it intends to launch its platform in the Asia-Pacific (APAC) region in the first quarter of 2019, and is looking to select Singapore to host its APAC headquarters.

Online lending platform Oriente announces 5m initial funding for Southeast Asia (kr-Asia), Rated: A

Hong Kong-based online lender Oriente today announced a US$105 million initial round of financing to scale its business across Southeast Asia. The fintech startup already runs lending platforms in the Philippines and Indonesia and will launch in Vietnam soon.

Tapping into digital economy (The Jakarta Post), Rated: A

According to the latest survey by Google and Singapore’s Temasek Holdings, Indonesia’s digital economy is projected to triple to US$100 billion by 2025 from $27 billion this year, given the mushrooming of the country’s online marketplaces. The projection is not an exaggeration as indicated by the huge transaction values at a recent online shopping festival, dubbed a warm-up for the National Online Shopping Day in mid-December.

P2P lending transactions total Rp 13.8 trillion in first three quarters (The Jakarta Post), Rated: A

According to Financial Services Authority (OJK) data, transactions through peer to peer (P2P) lending totaled Rp 13.8 trillion (US$951 million) in the first three quarters of 2018, with the non-performing loan (NPL) rate recorded at 1.2 percent.

P2P lending transactions in 2018 have increased drastically compared to the last two years, with the OJK recording Rp 284 billion in transactions in December 2016 and Rp 2.56 trillion in December 2017.

Who’s afraid of peer-to-peer lending? (Bangkok Post), Rated: A

The recent announcement by the Bank of Thailand on peer-to-peer (P2P) lending rules represents a significant paradigm shift. If all goes to plan, by early next year Thailand will be among the few Asian countries, most notably China and Indonesia, to legalise this match-making platform between lenders and borrowers.

Bukalapak eyes investment products, P2P lending to cash in on fintech opportunity (Deal Street Asia), Rated: B

Indonesia’s online marketplace unicorn Bukalapak is planning to cast a wider net in the country’s booming fintech market. The company is looking at launching new investment products and enter new verticles such as P2P lending and remittances, co-founder and president Muhamad Fajrin Rasyid told this portal.

Authors:

George Popescu
Allen Taylor

Tuesday November 27 2018, Daily News Digest

Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

News Comments Today’s main news: LendingClub hits $1B in CLUB certificate issuance. Zopa boosts Augmentum Fintech fund returns. Monzo breaks record on crowdfunding round. Yirendai’s critical stage to regain growth. Judo gets $350M in funding. Today’s main analysis: How late-cycle expansions turn into recessions. Today’s thought-provoking articles: LendingClub does more lending during holidays. Turning LendingClub into a financial health club. Why […]

Reliable Consumers for JP morgan, Citigroup, wells fargo and Bank of America

News Comments

United States

United Kingdom

India

Other

News Summary

United States

LendingClub Reaches $ 1bn in CLUB Certificate Issuance (Lend Academy) Rated: AAA

LendingClub has seen issuance of their new CLUB Certificate reach $1bn in less than a year after first announcing the pass-through security product last December at their investor day. The CLUB Certificate was created to make it easier for institutions to invest in LendingClub originated loans.

Loan for the holidays: Lending Club loans out more during holiday shopping months (Thinknum Media) Rated: AAA

This year was a record-breaking season for holiday shopping, as online spending surged 23.6% according to Adobe Analytics.

But where is all that money coming from? While some consumers saved up for the season, others might have turned to loans, such as ones offered at Lending Club ($NYSE:LC), to pay down huge gifts or refinance debt from credit card spending.

Outside of March 2016 — a month during an unusual stretch of time right before its chief executive Renaud Laplanche stepped down and a federal subpoena came in — Lending Club typically has the most loans issued by dollar amount in the months before the holiday season, according to data tracked since 2013.

Source: Thinknum

LendingClub CEO Working to Turn It Into a Financial Health Club (Web Pro News) Rated: AAA

The CEO of LendingClub, Scott Sanborn, says that they are really looking to make membership in the club mean something and are working to take Lending Club and turn it into a ‘financial health club’ that will help people successfully manage expenses. He says that LendingClub helps by shining a spotlight on credit card debt which is the first step to doing something about it.

A Looming Crisis in People’s Overall Financial Health

We are seeing really an epidemic happening which is incomes have been stagnant for more than 20 years. All of people’s major expenses, healthcare, college, housing, is going up and it’s creating a real looming crisis in people’s overall financial health and it’s something that people just aren’t talking about. Close to half of Americans have credit card debts and they are more than twice as likely to talk about spousal infidelity than they are about the fact that they have credit card debt that they need to manage. We believe that by shining a spotlight on the problem it’s the first step to helping people do something about it.

Top fintech VCs explain how PayPal missed a golden opportunity and why they wouldn’t invest in LendingClub today (Business Insider) Rated: AAA

PayPal is arguably one of the biggest success stories to come out of Silicon Valley in the last 20 years. It launched the careers of Peter Thiel, Elon Musk, and Max Levchin and paved the way for other members of the “PayPal mafia” to make seed investments in a next generation of startups.

“OnDeck and LendingClub have scaled, strong businesses now, but you’d never invest in those companies as startups today,” Harris said. “I don’t think you would look at unsecured personal lending or small-business lending, where you have to go out and acquire customers in the wild, with no special sauce. That’s 10-year-old thinking.”

The current model many VCs advocate is for companies to find ways to offer additional services, like loans, to existing customers. Acquiring new customers can be expensive, and there’s a competitive advantage when you underwrite or target new services to existing customers, because they know more about them.

PeerIQ’s Lender Earnings Webinar; Bank Exec Comments on the Credit Cycle (Peer IQ) Rated: AAA

One of the main themes that we explored in the LEI was how late we are in the credit cycle. Most C-level executives were extremely are sanguine on the economy but are nonetheless taking precautions. PeerIQ’s view is “The good news — and the bad news — is that conditions don’t get better than they are now.” We recommend reviewing Bloomberg Julie Verhage’s “US Banks See Good Times Ahead Even as Many Prep for Downturn” for more.

Source: Peer IQ

How Late-Cycle Expansions Turn into Recessions

The current US expansion that started in June 2009 is the longest on record at over 113 months. Late expansions are characterized by low unemployment, high consumer confidence, high asset values. We currently observe a near 50-year low unemployment rate, near record high consumer confidence, and the highest level of consumer credit outstanding (although well below peak per-capita debt levels).

Ironically, it is these solid economic indicators that are responsible for the party coming to an end. In a simplified model, credit availability expands to the marginal borrower (e.g., new entrants, cov-lite corporate loans, thin-file credits, etc.) just until the marginal consumer or corporate loans creates more losses than expected. Lenders feel the pinch on credit performance and on funding due to rising rates. Lenders individually tighten lending leading to a reduction in the supply of credit on an aggregate basis.

PeerIQ’s Q4 2018 Lending Earnings Insights Report (Lend Academy) Rated: A

PeerIQ released their Q4 2018 Lending Earnings Insights Report which points to a number of themes showing the economy is strong but CEOs are striking a cautious tone. Delinquencies and defaults continue to be low as consumers have seen their wages rise and taxes drop. Lenders are increasing reserves as they anticipate credit to renormalize in the near future, saying the economy right now was too good to be true.

Read the Full Report here.

Excerpts:

Regulators are increasingly focusing on the greater role of non-banks in consumer lending.Large money center banks continue to pull-back from riskier loans such as small business and consumer lending. Large banks instead have increased their credit facility volume 6x since 2010. FDIC Chair Jelena McWilliams cites the significant role of non-banks in origination as potential for systemic risk. The FDIC is contemplating granting ILC charters to non-banks – a major shift.

Delinquencies and charge-offs in FinTech asset classes are near all-time lows, although charge-offs on prime credit are increasing. Enova (Subprime) and OnDeck (Small Biz) are seeing near cycle-low charge-offs, while LendingClub (Prime) is seeing higher delinquencies on newer vintages. The change in LendingClub’s charge-off estimates across loan grades was mixed. Charge-offs on grades B and C are estimated to be higher by 28 bps and 16 bps respectively QoQ.

Small Businesses Are Poised for Growth, but Are Lenders Ready? (Business Wire) Rated: AAA

Source Business Wire

Betterment, Merrill Edge, Fidelity’s Go Lead the Pack in Digital Advice Branding, Claims Cerulli (Financial Advisor IQ) Rated: A

Robo-advice pioneer Betterment is the pack leader in digital platform awareness among investors, a new Cerulli Associates study reveals. But Merrill Lynch and Fidelity aren’t far behind, the study shows.

Among the more than 5,500 people polled, the Betterment brand was known by 15% of respondents, Merrill Lynch’s Merrill EDGE by 13%, and Fidelity’s Go by 12%. Trailing the three frontrunners was Charles Schwab’s Intelligent Portfolios and Vanguard’s Personal Advisor Services, which were each recognized by 10% of respondents, the study reveals.

For its digital platform marketing awareness study, Cerulli polled investors under the age of 45 earning more than $125,000 annually and with more than $250,000 in investable assets.

5 Business Loans You Can Get Without Being Profitable (NAV) Rated: A

With the Bureau of Labor Statistics reporting over 415,226 startup firms less than 1 year old in 2017, it’s apparent that this category of business will need funding like never before. However, business loans are tricky. On hand, they tend to offer a larger line of credit to companies than personal loans or lines of credit. On the other hand, qualifying can be difficult and often requires you to provide at least two years of documentation that you are profitable.

For the brand new business that hasn’t managed to turn a profit (yet), what is left? How can you get a cash infusion into your business in time to expand, add employees, support a product launch, or refinance existing debt? The following loans are a bit non-traditional, but just might be exactly what you are looking for in your quest for funding during your startup years.

TD Bank Launches New Digital Mortgage Experience Powered by Roostify (Business Wire) Rated: A

Roostify, a digital lending platform provider, announced that TD Bank, America’s Most Convenient Bank®, has leveraged Roostify’s technology to provide customers with a digital mortgage offering. This digital experience combines the latest in lending technology with a human-centric approach that gives TD Bank’s customers an accelerated, low-stress path to home ownership.

The deployment now provides prospective homebuyers with useful tools to assist them in finding a loan that fits their needs and budget. Leveraging Roostify’s proprietary DecisionBuilder lead tool, TD Bank’s Digital Mortgage allows consumers to explore which loan products they qualify for, right from a simple-to-use web page. Consumers can then move on to apply for their chosen loan in minutes, and follow a streamlined, all-digital process for moving their loan through closing. With easy access to TD Bank’s expert loan team, homebuyers can enjoy both the convenience of a digital solution and reassurance of expert guidance as they navigate one of the most significant transactions of their lives.

The Lending Alternatives Hopeful Investors Should Know Inside And Out (Forbes) Rated: A

People buy real estate for many reasons — generating cash flow, a tax write-off, appreciation value. Some of the greatest profits are made when buying real estate in a down market. Seasoned investors and fortunate newcomers who purchased coastal residential property from 2012-2017 are sitting on healthy equity appreciation as well as competitive interest rates in the 3.5-5% range.

The traditional path to buy a property is to obtain financing through banks, credit unions or a mortgage company. Following the 2008 housing crisis, traditional lenders implemented more strict guidelines: Stellar credit scores from 740 and above, stable employment, a low debt-to-income ratio, six months or more of liquid reserves.

For hopeful investors unable to meet these demands, alternatives are to pay all cash or to finance the purchase using hard money financing or a private lender. By utilizing one of these two methods, buyers also do not have to be concerned with the mounds of paperwork lenders requested. There are some advantages and disadvantages by using either type of alternative financing.

How Marcus by Goldman Sachs took to the streets of New York to market its high yield savings account (Tearsheet) Rated: A

Marcus, the online consumer bank by Goldman Sachs, has been running a man-on-the-street ad campaign about recent research the company conducted. According to the survey, 60 percent of Americans with savings accounts don’t know the interest rate on their savings account, and *more than half* of Americans with savings accounts (56 percent) opened theirs without exploring other options.

Dustin Cohn, head of brand and marketing communications at Marcus, joins the podcast to talk about the survey and why Marcus chose interest rates as a differentiator. We unpack the recent advertising campaign and explore the recent acquisition and integration of personal finance app, Clarity Money.

Ross: Easy money and the rise of ‘neo banking’ (My NorthWest) Rated: A

Banks are entering a whole new era. It’s called neo banking. Because it’s so “neo.”

You just sign over your paycheck, and suddenly you can buy things with a wave of the phone. As far as I can tell, you just look romantically at what you want to buy – and it’s yours!

You can even get loans. But it’s friendlier because neo banks don’t have loan officers who look at your income statement and say “Ha ha ha, you’re kidding!”

United Kingdom

Zopa helps boost Augmentum Fintech fund returns (Peer2Peer Finance) Rated: AAA

ZOPA’S latest funding round has boosted the value of Augmentum Fintech’s portfolio, helping the fintech investment fund report net asset value growth of 5.1 per cent in its maiden financial results.

UK-listed Augmentum Fintech unveiled its first financial results on Monday since launching in December 2017. It reported that a recent £60m private fundraise by Zopa had boosted the value of its stake in the lender by £3.5m to £22m.

Augmentum Fintech Sees Portfolio Rise In First Interims Since IPO (Morning Star) Rated: A

Augmentum Fintech PLC reported its first interim results Monday since listing on the London Main Market in March.

In the period from incorporation on December 19 last year to September 30, the fintech venture capital investor had a net asset value total return of 5.1%.

At September 30, Augmentum Fintech’s NAV per share was 104p. The company’s net assets at September 30 totalled GBP97.8 million.

The company’s portfolio fair value increased 62% since the company listed in March to GBP53.9 million on September 30 from GBP33.3 million on March 13.

Monzo confirms record-breaking UK fintech crowdfunding round (City AM) Rated: AAA

Digital bank Monzo has today announced it will be heading back to the crowd for the last chunk of its series E fundraising round, with a target of up to £20m.

The raise, first reported exclusively by City A.M. in August, will be the largest fintech crowdfunding round in the UK to date.

Going live on Exeter-based platform Crowdcube, existing Monzo investors will get early access to the round from 3 December. The round will then be opened up to other Monzo customers, who can invest up to £2,000.

Banking app Monzo explores expansion into high-cost loan products (The Telegraph) Rated: A

Monzo, the financial technology start-up,  is considering launching loans aimed at “the Wonga segment” of the market, its chief executive Tom Blomfield said.

Mr Blomfield said he hopes in future to offer loans to people with poor credit scores who may not be able to access more traditional loan products.

UK Competition and Markets Authority Questions PayPal Acquisition of iZettle (Crowdfund Insider) Rated: A

The UK Competition and Markets Authority (CMA) has issued a statement on the PayPal acquisition of iZettle – an event that was announced in early 2018 and closed in September. PayPal purchased Sweden based iZettle for $2.2 billion as the company seeks to gain access to iZettle’s point of purchase credit platform.

The CMA stated:

“… the CMA has found that PayPal could face insufficient competition in the UK after acquiring its market-leading rival. The finding raises concerns that the merger could result in customers, which include small and medium-sized businesses, paying higher prices or receiving a lower quality service.”

The CMA added that iZettle could have provided strong competition for PayPal if the company had not moved to take over the Fintech.

NatWest digital loan ceiling lifted to £700K (FinExtra) Rated: A

NatWest has today announced the launch of a new digital platform which will be available to all NatWest business and commercial customers allowing them to apply online for secured and unsecured loans of up to £750,000 – the largest digitally available loans in the industry.

The new platform, available to all business and commercial banking customers who use online banking, will allow applicants to complete the process in a matter of minutes, with a decision being communicated to customers usually within 24 hours, sometimes immediately. This fully digitised application process streamlines the customer experience and reinforces NatWest’s position as the UK’s leading commercial lender.

NatWest’s development underlines the bank’s commitment to further improving its digital offering and builds on the success of its ESME Loans platform, which provides loans of up to £150,000, Mettle – the standalone digital business current account, and LenderComm, the first production use of blockchain in the syndicated loan marketplace.

Arbuthnot Commercial Asset Based Lending supports acquisition of Euxton Tile Supplies Ltd (Bridging Loan Directory) Rated: B

Arbuthnot Commercial Asset Based Lending (ABL) has supported the acquisition of Euxton Tile Supplies Ltd (Euxton) by Earle Group with a £2m asset based lending facility, comprising a £1,250,000 confidential invoice discounting line and a £750,000 cash flow strip to provide the desired level of headroom in the transaction.

Wonga to automate compensation claims (TNT Magazine) Rated: A

Wonga, the payday lender that went into administration this August, plans to automate its compensation claims process – sparking fears that customers will lose out. Accounting firm Grant Thornton is in the process of winding up Wonga and is legally obliged to assess the claims of all customers who believe that they have been mis-sold loans.

The Guardian reports that in a bid to cut costs the administrators are creating an automated ‘adjudication tool’ that will decide which claims to pay out on, rather than processing each claim manually.

In its October letter to creditors, Wonga said that it had been receiving roughly 200 to 500 compensation claims every day after it went into administration on 30 August. Before that date the company had received 24,000 complaints from customers and a further 9,500 had been escalated to the Financial Ombudsman Service.

Proplend Milestone: Surpasses £50 Million in Online Lending (Crowdfund Insider) Rated: A

Less than six months after surpassing £40 million in online lending, UK based peer to peer lender in the property space, Proplend, announced on Monday it has now reached £50 million in online lending. According to the lender, all loans are commercial property backed, comprising a mix of bridging and mortgage lending risk-adjusted returns, which were funded by the lending platform’s growing band of Classic account, Pension account, and ISA “Lenders.” Proplend also revealed:

“By circumventing the traditional banking system, our Lenders have access to secured, inflation-beating fixed income returns whilst providing creditworthy commercial borrowers with an invaluable source of fast, flexible, interest only alternative funding. Having facilitated its first loan in 2014, Proplend has since accommodated over 50 commercial facilities, each loan typically funded within 24 hours by more than 100 participating Lenders. With a maximum loan term of 5 years, 20 loans have fully repaid to date with more than £15m capital returned and over £4m interest earned across the book – much of it tax-free.”

China

Yirendai Is At A Critical Stage To Regain Growth (Seeking Alpha) Rated: AAA

Yirendai Ltd (NYSE: YRD) released the third quarter 2018 earnings on November 12, with diluted Earnings per ADS of RMB2.43 (USD$0.35), decreased from USD 0.5 from second quarter. Considering the application of ASC 606, the adjusted earnings per ADS (if ASC were not adopted) is RMB 5.89 (USD 0.86), increased from RMB 4.91 in the same period from last year.

  1. The volume of newly originated loans has been decreasing, more than the loan volume decrease of the industry. We can compare YRD’s loan volume with the industry, as well as some competitors, as below.
    Source: Seeking Alpha

WeiyangX Fintech Review (Crowdfund Insider) Rated: A

Ping An Invests $47 million in Berlin-based Fintech Startup Finleap

The Ping An Insurance Group’s Global Voyager Investment Fund led a €41.5 million ($47 million) investment towards Berlin-based Fintech company Finleap.

Internet Finance Association of Jiangxi Province Issues P2P Exit Guidelines

On November 16, the Internet Finance Association of Jiangxi Province issued the “Guidelines for the Exit of Online Lending Intermediary Organizations in Jiangxi Province (Trial)”, stating that online lending institutions should put the rights of protecting lenders at the top of their exit work and minimize the loss of lenders. The guidelines specifically mention that when a P2P institution exit, it needs to take eight steps, namely:

(1) to file an application for withdrawal;

(2) to set up an exit work leading group;

(3) to issue an exit notice and close some platform functions;

(4) to prepare a business list of circumstances and formulate an exit plan;

(5) submit an exit plan and other related materials;

(6) publish relevant information such as the exit plan;

(7) implement the lender’s funds as planned, and steadily settle the stock items;

(8) completion of the exit.

European Union

Lendingblock Receives In-Principle Licence as DLT Provider in Gibraltar (Crowdfun Insider) Rated: AAA

Securities lending platform for digital assets Lendingblock has issued a statement indicating that the Gibraltar Financial Services Commission (GFSC) has made an in-principle decision to grant the firm authorization as a Distributed Ledger Technology (DLT) provider. Lendingblock adds that it continues to work closely with the GFSC as it seeks the full DLT licence.

Lendingblock says that following this decision, and the successful testing period, the Lendingblock platform is open for institutional onboarding in preparation for launch.

Market participants are now able to sign up for access and will be able to commence borrowing and lending  BTC, ETC, BCH, and LTC beginning early next year.

Digital lenders ‘must keep investing to grow’ (IBS Intelligence) Rated: A

Research from digital ID specialist Mitek has concluded that there is a huge opportunity for digital lenders to grow, if they continue to invest in digitisation.

The findings have been published as a whitepaper, authored by fintech research practice Autonomous NEXT. Titled European Digital Lenders, it looks into the state of the digital lending market in Europe.

He said the report found that venture capital investment is still flowing into the space and is set to hit $800m in Europe: “The UK alone has originations of over $6bn, and Europe-wide, the addressable market is $150bn – with current digital lender revenues estimated at $400m,” he added. “Moreover, the market shows impressive originations growth, with a 60% CAGR since 2013.”

Australia/New Zealand

Australian challenger bank Judo gets $ 350m funding boost (Fintech Futures) Rated: A

Melbourne-based challenger bank Judo Capital is edging towards a bank licence with a $350 million debt facility agreement with firm Credit Suisse.

The bank shared the news with Business Insider. David Hornery, co-founder and co-CEO of Judo, says the facility will provide further depth to Judo’s funding for Australian SMEs.

Short-term loan, long-term debt: Superloans under investigation after slew of complaints (Stuff) Rated: A

Short-term money lender Superloans has come under attack from people who say they target poor and vulnerable consumers, charge extremely high interest rates, and resort to illegal means for recouping their money.

The Commerce Commission has launched an investigation into Superloans after it received more than 20 complaints against the company since 2013 – several from financial advisors.

Copies of the complaints, obtained under the Official Information Act, reveal one complainant alleged Superloans threatened to take repayments out of a person’s pay cheque, illegally.

Another woman complained that a Superloans’ employee only looked at her bank statements before approving her loan application, and did not check her credit.

India

IvyCap Ventures makes first investment in P2P lending through Lendbox (The Ecomonic Times) Rated: AAA

Credit marketplace LendBox has secured the first investment by a large institutional investor in India’s peer-to-peer lending space, raising Rs 6 crore in a pre-series A financing round.

Major Trends Witnessed this year in Fintech (Entrepreneur) Rated: A

Online lending platforms have been quite phenomenal in filling in the credit void within our country. But how accomplished are they in doing so? MSME loans are considered as the trickiest element of lending given the sheer opacity that exists within the sector. This opacity has decreased the share of scheduled commercial banks in MSME credit from 95% to 90% between December 2015 and March 2018. The credit growth turned negative post-demonetization. During the same period, the share of loans by NBFCs (which are essentially used by online lending platforms) nearly doubled growing with an annual average of 35 per cent, largely because of cutting-edge technologies such as Artificial Intelligence and Big Data.

5 ways to reduce risk in P2P lending (The Economic Times) Rated: A

Lending money is a risky affair. However, there are ways to minimize the risk. Since peer-to-peer (P2P) lending is a relatively new concept and the RBI regulations for the P2P sector are barely about a year old, here are five effective ways in which you can reduce the risk to ensure getting your money back. Of course, with interest.

Understand the platform
You should try to understand how the online P2P model works before lending money on it. An investor should be aware how the money is lent on the platform and what are the risks involved in lending money on the platform.

Do not hesitate to ask the P2P player about the overall volume, defaults, recovery process and likely returns. You can do your own research or simply contact the P2P company through emails, chats or phone calls.

Do not go overboard
Sure, P2P platforms can offer your higher double-digit returns. But that doesn’t mean you should lend your entire in P2P lending. Choose the amount you wish to invest and then diversify,” says Raghavendra Pratap Singh, Co-Founder, i2ifunding.

Ex-Infosys CFO & Director V. Balakrishnan Joins Association of NBFC P2P Platforms as Patron Member (Indian Web) Rated: B

Within a month after the formation of NBFC-P2P industry bodyAssociation of NBFC P2P Platforms, the association today announced the joining of finance industry veteran & Former Infosys Chief Financial Officer V Balakrishnan as Patron Member.

P2P lending industry players have formed association to represent the Indian NBFC-P2P industry at various national as well as at international forums. The P2P operators participating in the operations are OML P2P, Monexo, PaisaDukan, Finzy, Cashkumar, Liquiloans, Micrograam, Lendsmartp2p, Peerlend and Indiamoneymart. The association aims to establish formal lines of communication between various government and regulatory authorities on matter of compliance and to create awareness about the industry and to work towards enhancement of public trust in this sector.

Asia

HonestFund Raises $ 12.2 million (USD) in our Series B round (Honestfund Email) Rated: AAA

HonestFund is one of the largest peer-to-peer lending players in South Korea. We were founded in 2015 and currently have about USD 300 million in cumulative originated loans. We have recently raised USD 12.2 million in our Series B round from the top VC firms, IT giants, and the largest financial institutions (i.e. Shinhan Bank and Hanwha Life Insurance) in South Korea.

Canada

Unlicensed online payday lenders are operating in New Brunswick (Global Newswire) Rated: A

Unlicensed online payday lenders are targeting New Brunswickers, warns the Financial and Consumer Services Commission.

FCNB has been receiving complaints from consumers about inappropriate collection practices by payday lending businesses not licensed to operate in the province.

“We are hearing that these businesses are contacting consumers who have fallen behind in their payments at their place of employment and in some cases, threatening to seek repayment from their employer. Sometimes they are contacting them up to 50 times a day,” said Alaina Nicholson, director of Consumer Affairs at FCNB. “It is against the law for a payday lender in the province to contact you at your place of work, or to contact your employers or coworkers to collect a payday loan that is late.”

Subscribe Technologies Upgrading Lendertech With Peer To Peer Lending Service And Integrating Platform Into Gingerly Marketplace (Stockhouse) Rated: A

Subscribe Technologies Inc. is pleased to announce it is upgrading the Company’s Lendertech financial technology platform with financial service auction and matchmaking features and has begun the initial phase of integrating the technology with the Company’s flagship Gingerly small business software application marketplace.

LenderTech facilitates greater and broader access to capital for those in need, including across a number of traditional and emerging areas such as mortgages, commercial lending, auto loans, student loans, and small business loans, among others.

As intended, our development team is now integrating this money lending service into the Gingerly software application marketplace and dashboard, with the addition of new Peer-to-Peer matchmaking features, designed for SMEs to have greater and faster access to lenders in one clean and simple to use interface.

IOU Financial Inc. Joins the FINSYNC Lending Network  (PR Newswire) Rated: B

 IOU FINANCIAL INC., a leading online lender to small businesses (IOUFinancial.com), is pleased to announce its strategic partnership with FINSYNC, Inc. (“FINSYNC”).

Small businesses of all types rely on FINSYNC to visualize, manage and project cash flow and analyze loan options.  IOU’s non-collateralized financing product has been assimilated by FINSYNC, enabling users who apply for financing through FINSYNC to quickly access IOU’s affordable, flexible financing for working capital and expansion.

Africa

Nigeria’s mixed signals on fintech (Euromoney) Rated: AAA

Earlier this year, the country’s central bank and the Nigeria Inter-Bank Settlement System opened a regulatory sandbox to enable budding fintech companies to develop new products freely and securely, becoming one of the first African countries to do so.

Even before that launch, Nigeria was frequently touted as the continent’s next big fintech hub, set to compete with South Africa and Kenya.

Bitcoin exchange NairaEx, online lender KiaKia and invoicing platform Payant are just three of the firms that have made a name for themselves in short order.

Authors:

George Popescu
Allen Taylor

Monday May 21 2018 Daily News Digest

ICO red flags

News Comments Today’s main news: Prospa launches $146M IPO. Experian, HSBC UK partner on credit application solution. RateSetter Australia extends green deal. Student Loan Genius raises $3.5M. Australia court rules against Harmoney. Faircent gets certified for NBFC-P2P. Today’s main analysis: WSJ investigates ICO fraud. Today’s thought-provoking articles: One student explains her student loan turmoil. China’s foreign investment restrictions for P2P lending […]

ICO red flags

News Comments

United States

United Kingdom

International

Australia

India

Other

News Summary

United States

 

Wealthfront’s experiment in risk parity has a rocky start (Financial Times) Rated: AAA

Our case here involves Wealthfront, an automated investing service founded by all-star venture capitalist Andy Rachleff. Boasting over $10.5bn under management, the platform offers a wide-range of thoughtful strategies to the casual investor, including indexes optimised to harvest tax-losses and a smart-beta product, overseen by Random Walk proselytiser Burton Malkiel.

Back to Wealthfront’s risk parity offering. In an attempt to lure investors, it backtested its new strategy versus its competitors at AQR and Bridgewater. Here are the results:

Source: Financial Times

I’ve Paid $ 18,000 To A $ 24,000 Student Loan, & I Still Owe $ 24,000 (Bustle) Rated: AAA

The loan, ironically called a “Smart Option” loan, has a variable interest rate that fluctuates based on changes in the financial market — which may have been explained to me at the time (I truly don’t remember), but I know I didn’t fully grasp what that meant.

Source: Bustle

Now, eight years later, that loan — one of nine that left me $95,000 in debt upon graduation (because, yes, interest does accrue while you’re in school) — very clearly marks the exact moment when I lost control of my own financial destiny.

According to a February 2018 study published by the Levy Economic Institute, a nonpartisan policy think tank at Bard College, there are 44.2 million Americans with student loans, which adds up to about $1.4 trillion in debt. There already exists a myriad of research-driven articles that wax on the impact of the student loan crisis on the future of this country (screwed), our economy (broken), and the weight of the loan crisis (crippling)

Student Loan Genius Raises $ 3.5M in Seed Series Prime Financing (Finsmes) Rated: AAA

Student Loan Genius (SLG), an Austin, Texas-based employee benefits platform, raised $3.5m in Seed Series Prime financing.

The round was led by Vestigo Ventures, with participation from CMFG Ventures, Prudential Financial and Rubicon Venture Capital.

The company intends to use the funds to support commercialization of its offering as well as to grow its technology, sales and marketing teams.

Cloudvirga Raises $ 50M in Series C Funding (Finsmes) Rated: A

Cloudvirga, an Irvine, Calif.-based provider of digital mortgage point-of-sale (POS) software provider, closed a $50m Series C funding round.

The round was led by Riverwood Capital with participation from Upfront Ventures. In conjunction with the funding, Riverwood executives Scott Ransenberg and Jay Schneider will join Cloudvirga’s board of directors.

Under-the-radar Wilmington fintech companies burst onto consumer credit scene (Delaware Online) Rated: A

One is Fair Square Financial, which last week snagged a $100 million investment from Vikram Pandit, the former CEO of Citigroup.

It’s an infusion of cash that the online credit card company says will allow it to expand beyond its downtown co-working space this year while doubling its workforce to 100 employees during the next two years.

The expansion decision is the result of surprisingly strong customer demand for its online-serviced, low-fee Ollo cards, Fair Square CEO Rob Habgood said. The credit cards carry a variable interest rate that currently sits at a lofty 24.99 percent.

Fintech is disrupting big banks, but here’s what it still needs to learn from them (The Next Web) Rated: A

Much of the hype around fintech focuses on what traditional banks do wrong: they’re slow to adopt new technology; they don’t center the customer; they’re too big to respond nimbly to change. This narrative is part of why fintech continues to attract massive investment, with $31 billion total flowing into the sector last year, according to KPMG.

The truth is that there’s actually a lot that banks do right — things that fintech startups can struggle to replicate. I mean, there’s a reason why they’ve been successful.

Here are the three areas where I feel fintech’s needs and banks’ expertise overlap.

Will Consumers Take On Too Much Debt In 2018? (PYMNTS) Rated: A

The rate of new delinquencies on credit cards stood at 6.42 percent in Q1, up from 5.9 percent for the same period last year. According to Moody’s, the delinquency trend for the next year is for an “increase.” The Q1 credit card delinquency rate trails the 7.3 percent rate for auto loans but is higher than the 3.4 percent rate for residential mortgages.

Meanwhile, the rate of total new household debt delinquencies was about 4.5 percent in Q1 of 2018, “down slightly from a year ago,” Moody’s said. “Over the next year, we believe delinquencies will rise a bit as lenders modestly loosen underwriting standards.”

Direct Lending Partners Hires Industry Leader as Director of Originations and Capital Markets (PR.com) Rated: B

Dream Live Prosper (DLP), an award-winning family company led by Don Wenner (Founder and CEO), is excited to announce the appointment of Greg E Schecher as Director of Originations and Capital Markets.

Based out of the company’s Southeast headquarters in St. Augustine, Florida, Greg will lead the firm’s CRE bridge loan lending and marketplace lending platform.

United Kingdom

Equifax powers HSBC UK’s first live credit application solution (Fintech Futures) Rated: AAA

HSBC UK has created the “first live” use case of open banking for credit applications using the InterConnect cloud platform from Equifax.

According to Equifax, the solution will help quick affordability assessments by allowing individuals to submit their bank transaction information electronically, in less than five minutes, during an application for credit.

Each submission is presented directly to HSBC UK’s underwriting team in real-time, providing the bank with view of a customer’s affordability and offering faster lending decisions.

Peer-to-peer lending: beware the risks (The Times) Rated: A

About 150,000 Britons have lent nearly £10bn in this way over the past decade, earning around 4.5% interest on average. By contrast, the average interest rate on an easy access savings account is just 0.51%.

The bigger platforms, such as Zopa, Funding Circle and RateSetter, are therefore attractive alternatives for would-be savers.

The market was boosted by the launch in 2016 of innovative finance Isas, which allow people to invest £20,000 a year tax-free in P2P platforms and equity-based crowdfunding, where they buy stakes in companies.

The Disruptive Rise of FinTech (Technative) Rated: A

The fintech industry is one of the fastest growing areas of the British economy and is generating more than £20 billion annually. The sector continues to grow, it currently employs over 60,000 people and has produced more billion pound-valued start-ups than any other British economic sector.

 

P2P lender urges social media firms to allow crypto ads (Peer2Peer Finance) Rated: A

A BAN on cryptocurrency adverts will do more harm than good, a crypto-backed peer-to-peer lender has warned.

Lendingblock, which lets individuals lend in a range of digital currencies such as Bitcoin, Ethereum and Ripple, said rather than Google, Facebook and Twitter pursuing a current ban on cryptocurrency adverts to help clamp down on scams, they should help promote education and awareness.

Lendingblock warned a complete blackout on information may be “the easiest option” but warned that cryptocurrencies aren’t going anywhere so it would be better to partner with the industry and ensure consumers understand the market.

More funding for smes (Manufacturing and Engineering Magazine) Rated: A

The Manufacturer has partnered up with the alternative finance specialist ThinCats to make £100 million of funding available to UK manufacturers, as more and more investors are becoming increasingly keen to help fund SMEs.

The main issue for some SMEs is that they do not have the largest amounts of assets against which the banks are more willing to lend. As a result, many of them can’t invest in their growth, or delay investment until they reach the point they can fund it themselves. The wider knock-on effect of this problem is that the UK’s productivity and growth is being held back.

Crypto world gets most complete and secured crypto exchange with Bitmillex (The Cryptocurrency Analytics) Rated: A

What separates Bitmillex from other crypto exchanges is that the platform was developed out of the long-standing demand of a credible cryptocurrency exchange which will prioritize fund security and also will be able to extend a much wider range of investing and trading options than what is offered by current regular exchanges.  

Speaking further, Mr. Briton highlighted the other state of the art features of Bitmillex which keeps it ahead of other crypto exchanges-

  • Most advanced security and hosting protection through cloud hosted servers that are connected to custom hardware security modules and multiple protective layers to withstand any attack and hack attempts. In addition, 98% of all balances are to be stored in secure offline cold storage.
  • Multiple social trade offerings through Auto-Trade, Peer-to-Peer BTC market and Peer to Peer Lending & Borrowing opportunity. (use the term copy trading)
  • Bitmillex has introduced MTG trading software to ensure a ground-breaking multi-terminal and multi-platform trading experience  (MT4)
  • Traders have the flexibility to hold funds in fiat and trade major forex pairs when the crypto market is bearish
  • Bitmillex is offering its revolutionary Debit Card to users that will be linked to their wallets and will provide them immediate access to their balance at ATMs or POS in fiat currency worldwide

Fintech envoy for Northern Ireland appointed (Open Access Government) Rated: B

Georgina O’Leary, Director of Innovation, Research and Development at Allstate has been appointed as the government’s new fintech envoy for Northern Ireland.

China

Foreign investment restrictions in P2P lending intermediaries (China Business Law Review) Rated: AAA

Current regulations and policies on peer-to-peer lending do not directly restrict or prohibit foreign investment in P2P lending intermediaries.

Relying on a network, a P2P lending intermediary will generally charge a certain consulting fee, service fee, etc., once a lender and borrower that have been brought together establish a lending relationship.

Local financial service office recordal/registration. Article 5 of the measures specifies that, within 10 working days after collecting its business licence, a P2P lending intermediary, or one of its branches, that proposes to launch P2P lending information intermediary services is required to carry out, on the strength of relevant materials, recordal/registration with the local financial regulator of the place where it has its business registration. Once it has completed recordal/registration with the local regulator, the P2P lending intermediary is required to apply for the appropriate telecoms service operating permit in accordance with relevant regulations of the competent telecoms authority before it can launch its services.

European Union

Following the Paypal acquisition: iZettle’s founders are the latest Swedish tech billionaires (Business Insider) Rated: AAA

Mojang founder Markus “Notch” Persson, Skype’s Niklas Zennström and Spotify’s founding duo Daniel Ek and Martin Lorentzon are Sweden’s richest people in tech today – all worth $1 billion or more.

Following Paypal’s announcement that it would buy the Swedish payments company iZettle for $2,2 billion (19 billion SEK), Jacob de Geer and Magnus Nilsson – founders of iZettle – have joined the few dozen Swedish entrepreneurs worth 1 billion krona or more.

International

Hundreds of Bitcoin Wannabes Show Hallmarks of Fraud (Wall Street Journal) Rated: AAA

In a review of documents produced for 1,450 digital coin offerings, The Wall Street Journal has found 271 with red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.

Source: The Wall Street Journal

Data Centers Take Center Stage in Real-Estate Investing (Barron’s) Rated: AAA

“An autonomous car will need 40 times more bandwidth than the cars we use today,” says East. “The demand for data centers is growing 30% per year in the U.S. and 70% in China, but there are only six public companies in the supplier’s market.” They are: Equinix (EQIX), CoreSite Realty (COR), CyrusOne(CONE), Digital Realty Trust (DLR), QTS Realty Trust (QTS), and Switch (SWCH).

Data centers aren’t easy markets to enter. It’s not hard to purchase a piece of land to build the property, but the facility needs to be outfitted in fiber, equipped with interconnected networks, and wired for massive electric power and top-tier security devices. It takes about $1,000 to build one square foot of data center, said East, compared with the average cost of $300 for conventional real estate.

Capgemini And Efma Launch Innovative FinTech Portal (Payment Week) Rated: A

Capgemini and Efma today announced the launch of FinTechVisor, an innovative platform designed to bring FinTechs and financial institutions together to collaborate. The FinTechVisor portal offers a world-wide networking and collaborative community for FinTechs and financial institutions to become game-changers by co-creating the future of the financial services industry.

Launched today at the CCX Forum in London, the portal, which connects financial institutions and FinTechs, will have a feature that allows bankers and insurers to rate FinTechs and comment on their solutions, as well as a “matchmaker-like” personalized function for financial institutions to find a FinTech partner who complements their needs and interests.

InnerScope Hearing Technologies, Inc. Announces Klarna Bank as a Financing Partner (Globe Newswire) Rated: B

Hearing Technologies InnerScopeInc. (OTCQB:INND) announced today the complete integration of www.Klarna.com for a simple and easy one-click payment solutions for its online customers who shop at www.hearingbenefit.com and www.nohasslehearing.com websites.

InnerScope and Klarna have teamed up to offer a frictionless one-click checkout solution which gives customers a choice of 2 simple no-hassle payment options, Pay Now, or Slice It options.

  • The Pay Now option is for customers who want to pay in full at checkout can do it quickly and securely with a credit/debit card.
  • The Slice it option with its instant financing and a quick and simple credit application process allowing the customers to spread the cost of their purchases over a 6 to 24-month period at 0% annual percent rate (“APR”), depending on transaction value, giving them flexibility and increased purchasing power.
Australia

Online lender Prospa launches $ 146m IPO (News) Rated: AAA

Online lender Prospa has launched a $146 million initial public offering, offering shares at $3.64.

Prospa, which lends to small businesses, says the majority of funds raised in the IPO, which includes institutional, retail and employee offers, will be used to grow its existing business, add new products and expand into New Zealand.

RateSetter Australia extends green deal (Peer2Peer Finance) Rated: AAA

RATESETTER Australia has announced an 18-month extension to its green loan marketplace.

The UK peer-to-peer lender’s Australian subsidiary is working with the Australian government’s Clean Energy Finance Corporation (CEFC) to bring clean energy borrowers and investors together.

In its first year it helped more than 1,000 households and small businesses finance green energy products.

 

High Court backs Commerce Commission over Harmoney (Scoop News) Rated: AAA

The High Court has sided with the Commerce Commission on how to interpret peer-to-peer lender Harmoney’s platform fees, deeming them to be credit fees and falling under the regulator’s purview.

The commission, which oversees the Credit Contracts and Consumer Finance Act 2003, claimed Harmoney’s platform fees were an unreasonable credit fee and sought a declaration from the court backing up its interpretation.

Justice Patricia Courtney today backed the commission’s interpretation, saying Harmoney’s documents amounted to a credit contract and that the way the peer-to-peer lender was structured went “beyond mere matchmaking”, providing a nominal creditor to hold loans as a bare trustee for investors and undertaking the full administration of the transactions.

Fintech disruptor will benefit from Banking Royal Commission (Motley Fool) Rated: A

Zip Co Ltd (ASX: Z1P) provides online credit for consumers and businesses at point-of-sale through brands zipMoney and zipPay.

Afterpay Touch Group Ltd (ASX: APT) provides a platform that allows retail merchants to offer consumers to ‘buy now, receive now, pay later’ without having to enter into a traditional loan agreement.

Money3 Corporation Limited (ASX: MNY) started out as a a payday lender, which it plans to exit in the next financial year. The company is predominantly involved in providing secured auto loans, which make up around 80% of its loan book.

Westpac made blind pensioner a guarantor without risk advice, inquiry hears (Reuters) Rated: A

Australia’s Westpac Banking Corp admitted on Monday to signing up a legally blind pensioner as loan guarantor for her daughter’s business without warning her of the risks, then threatened to evict her when the business failed.

The testimony, given to a powerful inquiry into the country’s financial sector, came as Australia’s “big four” lenders all admitted to misconduct in their submissions to a third round of public hearings that focuses on loans to small businesses.

Other transgressions included fraudulent loans and double-charging interest, the inquiry heard, a further hit to the sector’s reputation after previous rounds of hearings uncovered widespread abuses in Australia’s financial planning industry.

FinTech Australia announces new CEO (Fintech Australia) Rated: B

Brad Kitschke has been appointed as CEO of FinTech Australia.

 

India

Faircent Gets RBI Nod For NBFC-P2P Certification (Inc 42) Rated: AAA

Gurugram-based P2P lending startup Faircent has received its non-banking financial companies (NBFC)-Peer-to-Peer (P2P) certification from the RBI (Reserve Bank of India).

The accreditation makes Faircent the first P2P lending platform in the country to receive the certificate of registration as an NBFC-P2P by the national regulator.

FinTech firms assisting banks with customer acquisition (Business Standard News) Rated: A

MoneyTap

People earning more than Rs. 20,000 per month can utilise this app to borrow anywhere between Rs.3,000 to Rs.500,000. Offering flexible payback options, MoneyTap allows borrowers to select their own EMI plans.

CoinTribe

Endeavoring to fill the gaps in SME unsecured loan segment, CoinTribe as a loan marketplace makes it easier for banks to confidently enter the uncharted domains.

Lending on peer-to-peer platforms is fraught with higher risks (Business Standard) Rated: A

Peer-to-peer or P2P lending has emerged as an alternative option for investors who wish to earn higher rates of return than what traditional fixed-income instruments can offer. However, lending on these platforms also entails higher risk, which investors need to be aware of before venturing into this relatively new investment avenue.

6 investments with high return (The Economic Times) Rated: A

Peer-to-peer (P2P) lending is a relatively recent option and is a form of crowd-funding used to raise loans which are paid back with interest by bringing together people who need to borrow, from those who want to invest. For the funds that you invest, the interest rate may be set by the P2P platform or mutual agreement between the borrower and lender.

Risks: Since this is an unsecured loan where there is no face-to-face interaction, a P2P lender, i.e., the investor needs to be aware of the risks involved such as default on the part of the borrowers.

Asia

Finance: RHB plans to win over SMEs with digital agenda (The Edge Markets) Rated: A

Small and medium enterprises (SMEs) can no longer avoid going digital if they want to stay relevant. And RHB Bank Bhd, which has a new five-year strategy, is looking to help them do just that.

Jeffrey Ng, the bank’s head of group business and transaction banking, says the digital economy is the biggest trend impacting SMEs, and many of them will require assistance to adopt the technology. Ng was previously head of RHB’s SME division.

For RHB, this means onboarding SMEs into its electronic financial supply chain platforms. Suppliers and buyers can perform payments for goods entirely on the bank’s platforms and receive payments instantly. SMEs that want to offer cashless payments can also do so with RHB’s solutions.

How Vietnam’s Fintech Market Could Reach Nearly $ 8 Billion By 2020 (Forbes) Rated: A

According to PricewaterhouseCoopers, 

George Popescu
Allen Taylor

Friday May 18 2018, Daily News Digest

Seedinvest returns vs traditional

News Comments Today’s main news: PayPal to buy iZettle. LendInvest integrates with Stripe. KBRA assigns preliminary ratings to Avant Loans Funding Trust 2018-A. Ant Financial extends dominance. Today’s main analysis: SeedInvest delivers 17.4% IRR. Today’s thought-provoking articles: UK tech expanding faster than the rest of the economy. Why spreading fiber optic cable in Africa offers hope. Digital transformation is key […]

Seedinvest returns vs traditional

News Comments

United States

United Kingdom

European Union

International

  • PayPal to acquire iZettle for about $2.2 billion. AT: “This is huge news. If PayPal becomes a regular option in retail stores alongside Visa and Mastercard, it could become the defacto payment option for the majority of consumers. Of course, it will still have to compete with Square, Affirm, and Klarna. It’s bright spot is the massive head start is has over all of the above.”
  • Bitcoin boosts fintechs. AT: “I just can’t see any way that lenders and othe fintech companies to lose by offering crypto alternatives to their current products.”

Other

News Summary

United States

KBRA Assigns Preliminary Ratings to Avant Loans Funding Trust 2018-A (Business Wire) Rated: AAA

-Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Avant Loans Funding Trust 2018-A (“AVNT 2018-A”). This is a $221.935 million consumer loan ABS transaction that is expected to close on May 31, 2018.

Preliminary Ratings Assigned: Avant Loans Funding Trust 2018-A

Class Preliminary Rating Expected Initial

Class Principal

A A- (sf) $149,010,000
B BBB- (sf) $47,500,000
C BB- (sf) $25,425,000

SeedInvest Publishes Report on Investor Returns, Delivers IRR of 17.4% (Crowdfund Insider) Rated: AAA

SeedInvest, one of the largest investment crowdfunding platforms in the US, has released a performance report on investor returns. SeedInvest has been in operation since 2013 following the creation of accredited crowdfunding under Title II of the JOBS Act (Reg D 506c). Since that date, SeedInvest has become a full stack crowdfunding platform offering investments in the three different crowdfunding exemptions to both accredited and non-accredited investors.

Source: Crowdfund Insider

According to SeedInvest, investors on their platform have generated an unrealized Internal Rate of Return (IRR) of 17.4%1 since 2013. In comparison, this number is 1.5x greater than the 11.7% median return calculated by research firm Cambridge Associates for U.S. venture capital funds of the same vintage. The term of the report was up to the end of 2017.

SeedInvest said that the top 10% of their listed investors generated an a whopping 76.86% IRR while the bottom 10% delivered a negative 7.4% IRR. SeedInvest estimated that only 1.3% of their platform investors who have invested in three or more companies have generated negative unrealized IRR.

Check out the full report here.

Study Details Why Women Entrepreneurs Have Greater Crowdfunding Success (Entrepreneur) Rated: A

Crowdsourcing has emerged as a positive platform for women. The National Women’s Business Council released a report — Crowdfunding as a Capital Source for Women Entrepreneurs — based on exclusive and original data from the two leading crowdsourcing platforms, Kickstarter and Kiva. The goal was to determine various predictors of success on crowdsourcing platforms for women business owners, and if those predictors of success were different than their male counterparts.

Real Estate Crowdfunding Platform Small Change Lists Side by Side Reg CF – Reg D 506c Offer (Crowdfund Insider) Rated: A

Recently, Small Change has listed their first side-by-side Reg D 506c / Reg CF offering thus leveraging a work around other securities crowdfunding platforms in the early stage space have incorporated.

 

The SEC Just Launched a Fake ICO Website to Educate Investors (CoinDesk) Rated: A

The regulator announced Wednesday it has launched a mock ICO called HoweyCoin, presumably named after the Howey Test, which “touts an all too good to be true investment opportunity.”

However, the company notes, “the offer isn’t real.” Users who try to invest in the token sale will instead be redirected to the regulator’s education tools, which are aimed at pointing out the signs of fraudulent token sales.

BlackRock’s bet on Acorns is a bet on tomorrow’s investor (Financial Planning) Rated: A

BlackRock’s investment in microinvesting app Acorns underscores an evolution occurring in financial services in its shift toward digital — that gaining scale early will be essential to amassing future client assets.

The world’s largest asset manager is leading a $50 million funding round that will build out the startup’s portfolio stack with new investment options. It also gives BlackRock an inside look into the behavior of next generation investors, which it says will help fine-tune future releases and broaden its appeal beyond large institutions and pension funds.

Fundation grabs $ 120 mln from SunTrust (PE Hub) Rated: A

Fundation Group LLC, a lender and credit solutions provider, has secured a $120 million credit facility from SunTrust Bank. Fundation is also backed by Waterfall Asset Management and is majority-owned by Garrison Investment Group.

TransUnion Announces Agreement to Acquire iovation to Strengthen Fraud and Identity Solutions (Omaha World-Herald) Rated: A

TransUnion (NYSE:TRU) has agreed to acquire iovation, one of the most advanced providers of device-based information in the world, strengthening its leadership position in fraud and identity management.

PR Mortgage & Investments Selects SS&C Precision LM to Support Its Agency Lending Operations (SS&C Technologies) Rated: B

SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of financial services software and software-enabled services, today announced that PR Mortgage & Investment Corp. (“PR Mortgage”) has selected SS&C Precision LM to support loan servicing and origination for HUD/Ginnie Mae, Fannie Mae, Freddie Mac and its banking programs. SS&C Precision LM will also enhance PR Mortgage’s asset management and investor reporting, and provide secure web-based portals for borrower self-service and document workflow automation.

United Kingdom

LendInvest Announces Integration With Payments Platform Stripe To Streamline Loan Application Process (Crowdfund Insider) Rated: AAA

On Thursday, specialist property finance lender LendInvest announced it has expanded on its long-term partnership with Stripe by integrated the payments platform in order to streamline its loan application process. According to the online lender, the new integration will be embedded in the primary stages of the buy-to-let loan application process. LendInvest reported:

“Stripe allows the broker to pay the valuation fee through LendInvest’s online buy-to-let portal immediately after the borrower’s application forms have been signed. This process was previously handled manually, with the case manager having to call the broker and then the borrower to arrange payment. Managing these payments centrally through LendInvest’s self-service online portal cuts down the overall time taken to complete the application, whilst providing a transparent way to track this stage of the application process.”

Tech Nation 2018 report: UK tech expanding faster than the rest of the economy (Information Age) Rated: AAA

Tech is expanding 2.6 times faster than the rest of the UK economy, according to Tech Nation’s 2018 report. The digital tech sector is worth nearly £184 billion to UK economy, up from £170 billion in 2016.

London ranks as second most connected place for tech in the world, after Silicon Valley. But, when it comes to proportion of overseas customers, the UK capital trumps the self-appointed tech capital of the world.

The UK’s digital tech sector continues to accelerate faster than the rest of the economy, according to Tech Nation 2018. Turnover of digital tech companies grew by 4.5% between 2016-17 compared to UK GDP which grew by 1.7% over the same period, according to the figures.

HSBC to tap Open Banking potential through new partnership (AltFi News) Rated: A

HSBC UK is set to capitalise on the opportunities presented by Open Banking after agreeing to a partnership with consents.online, an Account Information Service Provider (AISP).

Under the deal, HSBC can access consumer transaction data held by other organisations. The bank plans to use this information to launch new consumer products.

It will also use consents.online’s consent management architecture, which allows consumers to view and control how their data is used. The platform gives consumers and small businesses the ability to see who is accessing their data and to control access – with the power to revoke it at any time.

Peer to Peer (P2P) Lending – Withholding Tax Obligations – Borrowers (and Lenders) Beware (Lexology) Rated: A

Borrowers and lenders should be aware that currently Ireland’s withholding tax regime has not been amended for P2P Lending (aside the ability in certain circumstances to group payments together to the same lender in a calendar year) and in that regard the Irish Revenue Commissioners have issued a timely Revenue eBrief reminding Irish corporate borrowers (as well as lenders) of their Irish tax obligations. In particular the general obligation on an Irish corporate borrower2 to, amongst other things, withhold tax on interest payments made on the finance raised, at the standard rate (currently 20%) subject to certain exceptions, most of which will not apply where the lender is an individual, regardless of where resident.

Ablrate takes equity stake in Huddle (Peer2Peer Finance) Rated: A

ABLRATE has taken an equity stake in fellow peer-to-peer lender Huddle, as part of a wider strategic partnership between the two platforms.

Under the new deal, Ablrate has taken a minority holding in the business lender and the two platforms will share their investor bases.

 

Atom Bank launches mortgages for first-time buyers (AltFi News) Rated: A

Digital banking app Atom has launched first-time buyer products on its standalone Digital Mortgages platform.

The new loans will offer first-time home-buyers £500 cashback, along with a free valuation and no product fee. The newly-launched range will be available for mortgages between 80-95 per cent loan-to-value (LTV). The range consists of two, three and five-year fixed rates mortgages, with rates starting at 2.24 per cent.

The platform has also extended its existing range by adding 95 per cent LTV products for its purchase and remortgage products.

Furthermore, Atom has removed the £300,000 limit on first-time buyer applications and increased its maximum mortgage term from 35 to 40 years – changes meant to increase its flexibility and in line with broker feedback.

BitBose ICO (BOSE Token): Crypto Lending & Investment Platform (Bitcoin Exchange Guide) Rated: B

  • The platform will also have the Bitbose crypto loans program that will allow users to be able to receive real cash by holding to their crypto assets in a secured platform. The program offers an easy way for users to get money without having to sell their crypto assets. The program will have an easy to borrow and lend application, almost instant approval of loans and the borrower will get their cash instantly since it will be credited to borrower’s bank account. The interest rates are also competitive and do not have advance payment requirements. Another significant feature of the program is the lack of a capital block. Users of the program can withdraw their assets back anytime.
China

Ant Financial extends dominance in Chinese online finance (Financial Times) Rated: AAA

In documents reviewed by the FT Ant Financial says they now have more than 620 million users and their wealth management business has $345bn in assets under management; the information was put together for investors as the fintech company looks to raise $10bn of new capital; reports say the round is already oversubscribed and would value Ant Financial at more than $160bn

European Union

Hermes launches European Direct Lending Fund (AltFi News) Rated: A

Hermes Investment Management has launched the Hermes European Direct Lending following on from the launch of a UK direct lending fund in 2016.

Also headed by Patrick Marshall, Hermes head of private debt & CLOs, the European focused direct lending fund aims to offer institutional investors access to stable, low-correlated returns from high-quality, senior-secured loans.

These loans are typically to middle-market businesses in the UK and Europe, with a focus on Scandinavia, Germany, Benelux and Ireland.

Lendix Appoints Luuc Mannaerts As New CEO of Lender Nederland (Crowdfund Insider) Rated: B

Earlier this week, France-based online lending platform Lendix announced it has appointed Luuc Mannaerts as the new CEO of Lender Nederland, Lendix’s Dutch subsidiary. According to the online lender, Mannaerts has more than 20 years of experience in the Dutch and European banking sector.

Prior to joining Lendix, Mannaerts was CEO of ABN AMRO Commercial Finance, an ABN AMRO subsidiary with over 500 employees and specializing in SME finance in the Netherlands, the UK, France, and Germany. Lendix also revealed that thanks to his background, Mannaerts has specialized knowledge of the Dutch SME fabric

International

PayPal Agrees to Buy European Fintech Startup iZettle for About $ 2.2 Billion (Wall Street Journal) Rated: AAA

PayPal Holdings Inc. has agreed to buy European financial-technology startup iZettle AB for about $2.2 billion, a move that would catapult the U.S. digital-payments giant into hundreds of thousands of brick-and-mortar retailers around the world.

The acquisition, the largest in PayPal’s history, sets up a showdown between the San Jose, Calif., company and Jack Dorsey’s Square Inc.

Bitcoin is steroids for fintech startups that big banks are afraid to touch (Quartz) Rated: AAA

Making money by trading bitcoin, whose price has fallen by about 40%this year, has been difficult lately. But startups that provide services supporting crypto markets are faring much better. Companies like Revolut, a payment app, and Robinhood, a mobile broker, scoredlegions of new customers after they added buying and selling of digital tokens to their services.

TransferGo, a remittance company, is another fintech upstart that plans to offer crypto trading to customers. CEO Daumantas Dvilinskas says users were asking for ways to buy digital assets—about 4,000 people pre-registered for the service in just a few hours. The London-based firm, which announced today that it raised an additional $10 million from venture capital investors, will soon allow customers to buy and sell bitcoin, ethereum, XRP, litecoin, and bitcoin cash.

India

Fintech Startup Open Raises Pre-Series A Funding (Inc42) Rated: AAA

Bengaluru-based fintech startup Open Financial Technologies has raised an undisclosed amount of pre-series A funding led by Unicorn India Ventures and Recruit Co. Ltd, through its investment subsidiary RSP India Fund LLC.

Existing investors ISME-ACE and Vaibhav Domkundwar’s BetterCapital AngelList syndicate also participated in the round.

How has lending Money to SME evolved in India? (The Indian Wire) Rated: A

According to a report by Planning Commission of India, the MSME sector comprises 30 million establishments. It generates employment for 70 million people, manufactures over 6000 products, and contributes 45% to manufacturing output and 40% to exports. These statistics validate the fact that MSME sector is the backbone of the Indian economy.

There are several reasons why small and medium-size enterprises are unable to secure easy and quick business loans in India:

  • They do not have hard assets to mortgage, which disqualifies them from loans offered by most credit channels.
  • They do not have documented credit scores to assess their creditworthiness.
  • The loan application process in banks and other mainstream financial institutions is very tedious.

 

Asia

Validus, Lighthouse Canton launch S$ 20m SME financing fund (The Business Times) Rated: A

VALIDUS Capital and Lighthouse Canton Group launched a S$20 million fund to finance small and medium enterprises (SMEs) in Singapore on Friday, and hope to grow the fund to S$200 million in the next three years.

The LCV Trade Finance Fund will invest in loans that originate from Validus’ peer-to-peer lending platform.

Africa

Why the Spreading Network of Fibre Optic Cables Carries So Much Hope for Africa (Equities) Rated: AAA

The growing fibre infrastructure also has a direct impact on labour markets across the continent as the demand for specialized technicians and engineers increases. Plus, because fibre gives users and businesses access to more bandwidth, this technology is helping spur growth for small businesses directly and indirectly.

To illustrate, online P2P lending platforms such as Kiva and Lending Club have become quite popular with small businesses around the continent that now maintain an online presence. As a result, small business owners have ready access to unsecured business lines of credit, which helps them grow outside the confines of traditional financial systems.

Latin America

Why Digital Transformation Is Key to Argentina’s Future (Knowledge@Wharton) Rated: AAA

A surging U.S. dollar is playing havoc with its interest rates and the central bank pushed the key rate from 27.25% to a stunning 40% recently to support the peso. Even that was not enough to stem the run on the currency, and last week the government requested aid from the International Monetary Fund in the form of a $30 billion credit line.

In a country that has one of the smallest financial systems in the world as a percentage of GDP (14%), some of the world’s highest interest rates, and where nearly half of the population is unbanked, the opportunities presented by digital technologies are tremendous.

These include 123Seguro, the largest online insurance broker in Argentina, Mexico and Colombia, which is growing over 50% per year with an admittedly simple offering, and Afluenta, a peer-to-peer lending platform serving Mexico, Peru, Colombia and Argentina, and now expanding into Brazil, Chile and Uruguay.

Authors:

George Popescu
Allen Taylor

Monday May 14 2018, Daily News Digest

Kabbage KABB 2017-1

News Comments Today’s main news: LendingTree to acquire Ovation Credit Services. Revolut to enter America. Flender delays UK launch. UK challenger banks test location-based P2P payments. Ant Financial raises $10B led by Carlyle Group. Today’s main analysis: KABB 2017-1 deep dive. Today’s thought-provoking articles: How the FTC knew LendingClub was allegedly hiding fees. Elevate’s Q2 earnings estimates. UK customers trust banks, […]

Kabbage KABB 2017-1

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

LendingTree, Inc. Announces Agreement to Acquire Ovation Credit Services (PR Newswire) Rated: AAA

LendingTree, Inc. (NASDAQ:  TREE) announced today that it has entered into a definitive agreement to acquire Ovation Credit Services, Inc., a provider of credit services with a strong customer service reputation. Ovation Credit Services utilizes a proprietary software application that facilitates the credit repair process and is integrated directly with certain credit bureaus while educating consumers on credit improvement via ongoing outreach with Ovation case advisors.

Europe’s New Fintech Unicorn, Revolut, Heads to America (Newsday) Rated: AAA

The London-based fintech start-up allows users to buy and trade cryptocurrencies, making it a direct competitor to the U.S.-based Robinhood. Revolut also sees itself as a disruptor of the traditional banking industry, as it offers checking accounts, peer-to-peer payments, and international money transfers, says Chad West, the company’s chief marketing officer.

FTC Doesn’t Hide Action Over LendingClub’s Allegedly Hidden Fees (Lexology) Rated: AAA

The FTC noted that the site did feature a small green dot (known as a tooltip) with a white question mark inside, which appeared next to the term “APR.” If a consumer clicked on the tooltip, a pop-up bubble appeared with a disclosure that read: “APR stands for Annual Percentage Rate and is a measure of the total cost of credit as an annual rate. The APR is comprised of the annual interest you pay at a rate of 6.99%—which is ultimately paid each month to the investors who enable your loan—and a one-time origination fee of 3.5% ($350.00) that is collected out of your loan proceeds.”

The complaint reminds lenders of the continued importance of accuracy and completeness in advertising and other marketing in order to avoid UDAAP claims, including under Section 5 of the FTC Act.

KABB 2017-1 Deep Dive (PeerIQ), Rated: AAA

The battle for transaction fee interchange revenue is heating up. Amazon is now encouraging smaller retailers to use its own payment processing system – Amazon Pay – in lieu of credit cards or PayPal.Amazon is willing to offer the payments at a discounted rate in exchange for growing market share and gain additional data insights from merchants.

FinTech Earnings – LendingClub and OnDeck

The market has responded well to LC’s earnings and the stock price has surged 17% post earnings.

Source: LendingClub

OnDeck’s stock price has enjoyed a 10% rise since earnings.

Source: OnDeck

Deal Deep Dive KABB 2017-1 Additional Notes

Kabbage is issuing $60 Mn in additional notes under the expandable option on its $550 Mn KABB 2017-1 deal. The additional notes classes A to D have balances of $44.4 Mn, $9.5 Mn, $3.2 Mn, and $2.9 Mn respectively. KBRA has rated the tranches A, BBB, BB, and B respectively. Kabbage issued $525 Mn in bonds originally on the KABB 2017-1 deal, and subsequently issued $25 Mn in additional notes.

KABB 2017-1 is passing all its triggers and has a weighted average yield of 42.9% and a 3-month average DQ percentage of 9.7%. The bonds are locked out from receiving principal for 36 months since issuance and the additional cashflow is used to purchase receivables that keep the weighted average receivables yield for the entire pool above 38% and individually yield at least 19%.

Source: PeerIQ, KBRA
Source: PeerIQ, KBRA

Q2 2018 Earnings Estimate for Elevate Credit (NYSE:ELVT) Issued By Jefferies Group (Macon Daily) Rated: AAA

Jefferies Group lifted their Q2 2018 earnings per share estimates for shares of Elevate Credit in a report released on Tuesday, May 1st, according to Zacks Investment Research. Jefferies Group analyst J. Hecht now forecasts that the company will earn $0.19 per share for the quarter, up from their previous estimate of $0.18. Jefferies Group also issued estimates for Elevate Credit’s FY2018 earnings at $0.83 EPS, Q1 2019 earnings at $0.37 EPS and FY2019 earnings at $1.09 EPS.

Source: Macon Daily

Renaud Laplanche: the sailor who revolutionised banking (Money Week) Rated: A

“Soft spoken and unfailingly polite”, as Forbes noted in 2015, Laplanche claimed, with some justification, to be “transforming” the banking industry – bypassing banks to link would-be borrowers with lenders online. He swiftly established his outfit as the market leader, originating some $20bn in loans and winning copious “disruptive innovator” awards. Then came the shipwreck.

He is now focused on “what can I learn from it, what can I do better. Upgrade has been part of that.” Last year, Upgrade raised $60m – “the biggest ever series A funding round for a US fintech start-up”, backed by “many of Lending Club’s original investors”. The market is now more crowded than ever, notes the Lending Times, and “margins have shrunk”. Still, many reckon that if anyone can steer a clear course it’s “the guy credited with creating the industry in the first place”.

 

 

 

PayPal CEO: A Cashless Society Is Possible as Mobile Payments Take Over (The Street) Rated: A

The world is rapidly digitizing. You look at every industry, whether it’s media publishing or entertainment and you are now seeing different value propositions being driven by software and mobile connectivity. Financial services is no different. I think you are going to see more changes in the financial services industry in the next five or 10 years than maybe we have seen in the last 25 or 30 years.

The world is rapidly digitizing. People are writing many less checks than they ever have before. Peer to peer lending, which once involved giving cash to a friend to split a bill at a restaurant, that’s now happening digitally.

The Most Well-Funded Tech Startup In Every US State (CB Insights), Rated: A

In our latest map of the most well-funded American tech startup in each state, some companies with the deepest pockets were found in Florida (Magic Leap, $1.89B), Virginia (OneWeb, $2.2B), Utah (Domo, $698M), and Illinois (Avant, $655M).

Source: CB Insights

Congress Votes to Erase Auto Loan Anti-Discrimination Rule (LendEDU) Rated: A

Under the authority granted by the Congressional Review Act, the House of Representatives passed a measure on May 8 to roll back an Obama-era rule on auto lending practices issued by the Consumer Financial Protection Bureau (CFPB). It should be noted that the rollback pertains to a set of administrative guidelines issued by the CFPB, not a law ratified by Congress.

The House vote was 234-175, reversing a 2013 rule established by the CFPB to stop auto lenders from charging higher fees to borrowers based on their religion, sex, race, or age. The vote follows a Senate vote in April to also repeal this measure. It will now go to President Donald Trump’s desk for his approval.

Virginia Attorney General Files Suit Against Online Lender Alleging Predatory Lending (JD Supra) Rated: B

The complaint alleges that the lender, one of the largest online lenders in Virginia, operated without a Virginia license, and misled borrowers about its licensure status in another state in order to avoid Virginia’s 12% interest rate usury cap.  Virginia Code § 6.2-303.  Specifically, the complaint alleges that the installment loan agreements’ Utah choice-of-law provisions are void, and that Virginia law, including Virginia’s usury cap, applies to the loans.  The VA Attorney General also alleges that the lender attempted to collect on loans from borrowers who were in bankruptcy and entitled to protection from debt collection.

United Kingdom

Ireland’s Flender pushes back UK launch (Peer2Peer Finance) Rated: AAA

IRISH peer-to-peer lending platform Flender has pushed back its UK launch to focus on becoming the “dominant platform” in its home country first.

UK banks are trying out location-based P2P payments (Tearsheet) Rated: AAA

On Friday, Revolut introduced a feature called “Near Me” which lets its customers find other Revolut customers using the same feature and send them money without knowing their contact details. On Monday, Monzo rolled out a capability called “Nearby Friends.”

The use cases for location-based peer-to-peer payments among consumers may not be compelling enough for providers to consider it, said Paygility Advisors partner Deborah Baxley.

Q&A With Simon Taylor, 11:FS Co-Founder (Forbes) Rated: A

However, last month’s announcement that London FinTech Revolut is now a so-called unicorn with a $1.7 billion valuation and TransferWise working with the Bank of England and launching a ‘borderless’ card that drastically slashes transaction costs, the future for the city may be companies such as these.

Another fellow London FinTech 11:FS is also making waves offering a range of FinTech services, not least being able to ‘make a challenger bank in 12 weeks’. Here company Co-Founder Simon Taylor speaks exclusively to Forbes about what these moves and also on Swedish company iZettle’s recent IPO announcement.

 

 

A new study shows UK customers trust banks but don’t engage with them (Business Insider) Rated: AAA

UK banks were trusted by 40% of consumers in 2017, up from 29% in 2015, according to a study from Accenture. This makes banks only 3% less trusted than retailers, and ahead of insurers, independent advisers, and tech companies.

Source: Business Insider

Additionally, customer satisfaction was up 5% from 65% in 2015 to 70% in 2017, suggesting banks have been doing something right in terms of customer experience in the recent years. This also brings banks ahead of life insurers and pension providers, as well as on the same level as motor insurers and home insurers, when it comes to customer satisfaction.

 

P2P lenders benefit as BoE keeps interest rates low (AltFi News) Rated: A

The Bank of England’s decision to keep the interest rates at 0.5 per cent should at least make peer-to-peer lenders smile. People are tempted to look for alternative and riskier ways to increase the value of their savings, as inflation continues to hover above BoE’s target of two per cent and traditional savings accounts offer barely any interest at all.

Mike Allan, the director of operations at LendingCrowd, said that the historically lax monetary policy created an opening for P2P lending to take off.

Why commercial property could be the new buy-to-let and how to invest for better returns (This is Money) Rated: A

Over the past five or six years, investing in property through peer-to-peer and crowdfunding platforms has grown enormously in popularity. There are now lots of platforms to choose from and each offers a slightly different proposition.

Both peer-to-peer and crowdfunding platforms have different approaches, in that some allow you to put money in and spread it across a number of properties, or a portfolio run by them.

 

 

China

Jack Ma’s Ant Snags Carlyle for $ 10 Billion Funding, Sources Say (Bloomberg) Rated: AAA

Ant Financial, the Chinese payments giant controlled by Jack Ma, is expected to close a fundraising of at least $10 billion in the next few days, attracting Carlyle Group and the Canada Pension Plan Investment Board as first-time investors, according to people familiar with the matter.

The Hangzhou-based company is said to be valued at about $150 billion in this round, the people said, requesting not to be named because the matter is private. The funding will be mostly used for overseas expansion, the people said.

PBOC Bans Unauthorized APP to Access Credit Rating System (Crowdfund Insider) Rated: AAA

Recently, the People’s Bank of China (PBOC), China’s central bank, issued a document named, “Notice on Further Strengthening the Management of Credit Information Security” (Yinfa [2018] No. 102) (hereinafter referred to as “Document No. 102”), to further strengthen the management and security of credit information database. According to Document No. 102, credit reporting agencies and access agencies are strictly forbidden to query credit report without authorization, and unauthorized APP accessing to credit reporting systems is strictly prohibited. In addition, it is required to establish a leading group for credit information security work and make clear that the person in charge of the credit management work shall take the primary responsibility for related issue.

China’s online lenders reel from government clampdown (Nikkei Asian Review) Rated: A

Of 66 peer-to-peer lending platforms surveyed by FTCR, 10 said they might close because of difficulties in meeting new compliance standards and in controlling an increase in bad loans. Among the platforms, which match lenders with borrowers online, more than 40% of those in second- and third-tier cities said business had fallen in the first quarter compared with the end of last year.

P2P lending in China had grown rapidly, extending 2.8 trillion yuan ($443.3 billion) in 2017, equivalent to 20.7% of the amount lent by banks.

Antisocial networking (Breaking Views) Rated: A

A Chinese social network is finding new ways to lose friends. Renren has irked investors over plans to sell some of its assets, notably a stake in U.S. online lender SoFi, to a firm partly controlled by its chief executive.

Renren has been irritating shareholders for years. Since its initial public offering in New York in 2011 valuing it at close to $6 billion, the company has failed to live up to the hype of being China’s answer to Facebook. It is now worth just $600 million.

This latest episode also isn’t the first time boss Joe Chen has been accused of trying to enrich himself at the expense of shareholders. A non-binding 2015 bid to take Renren private for $1.4 billion never came to fruition, and the SoFi stake was a topic of dispute then, too.

European Union

Banco BNI Europa invests €15m in auto financing start-up Lendrock (Fintech Futures) Rated: AAA

Portuguese Banco BNI Europa will invest up to €15 million in Spain-based Lendrock’s online financing platform that specialises in near prime consumer auto financing.

The bank says the Iberian partnership begins with the acquisition of part of the existing loan portfolio, offering exposure to Lendrock’s loans and setting the stage for the acquisition of monthly origination volumes.

iZettle: From Swedish Fintech Success To Europe’s Biggest Fintech IPO (Forbes) Rated: AAA

Swedish fintech iZettle announced last week that they intend on selling shares and launching an IPO in order to raise SKr2bn by listing on Nasdaq Stockholm. With plans to increase revenue by 40 per cent a year, iZettle aims to also break even by 2020.

With JPMorgan and Carnegie on their side as joint global co-ordinators, iZettle would like to walk away with at least SKr10bn ($1.1 billion) by the end of this month or June.

 

International

The Top 100 Venture Capitalists (CB Insights), Rated: A

For the third year in a row, CB Insights partnered with The New York Times to provide an algorithmically-driven view into the question of who are the top VCs. Not swayed by narrative or a storied history in venture capital, the NYT-CBI rankings provide a current view into the best venture capitalists in the world at an individual and firm level.

Some of the top movers in 2018 include:

  • Steve Anderson of Baseline Ventures who moved from 10th place to 2nd due in part to a consistent knack for investing early in winners.  His stellar track record saw another success in recently public ecommerce company Stitch Fix.
  • And Rob Hayes of First Round Capital saw the most significant jump going from 85th to 7th for leading investments in Uberand Square.

First-time appearances on the ranking include Shawn Carolan of Menlo Ventures (investor in Roku), Meyer Malka of Ribbit Capital (investor in Credit Karma), and Albert Wenger of Union Square Ventures (investor in MongoDB).

Tech firms will be regulated like banks in future (The Finanser) Rated: A

First, we have become addicted to technology. We live our lives staring at our devices rather than talking to each other or watching where we are going.

Second is privacy. Facebook and other internet giants are abusing our privacy rights in order to generate ad revenues, as demonstrated by Cambridge Analytica, but they’re not the only one.

Third is that the power of these firms is too much. When six firms – Google (Alphabet), Amazon, Facebook, Tencent, Alibaba and Baidu – have almost all the information on all the citizens of the world held digitally, it creates a backlash and a fear.

 

Bitbond’s Loan Transfers Using Bitcoin Are Becoming More Popular (BTC Manager) Rated: A

Global peer to peer marketplace for small loans, Bitbond, allows clients the option to transfer their loans by using bitcoin. The bitcoin startup has seen its popularity grow, with the startup managing around $1 million in loans per month for 100 clients.

The revelation was made in an interview by Reuters TV with Bitbond’s German founder Radoslav Albrecht. He said the rationale behind the move is that it will help reduce the foreign exchange cost for clients.

The Benzinga Global Fintech Award Finalists For The Best Under-Banked Or Emerging Market Solution (Benzinga) Rated: B

The finalists for the Best Under-banked or Emerging Market Solution category are:

Airfox
Braviant Holdings
CreditStacks
Elevate Credit
Experian MicroAnalytics
Finn.ai
Humaniq
ID Finance
LenddoEFL
MoneyLion
Oakam
Self Lender, Inc.
Teller

Australia/New Zealand

Three disruptive forces driving Aussie neobanks like volt, as fintech startups get serious (Australian Financial Review) Rated: AAA

In a significant milestone for the local fintech scene, the Australian Prudential Regulation Authority said last week volt bank would become the first recipient of a “restricted license” under its new regime, created after the federal government indicated it wants to see more competition in banking.

Here come the robots: First digital financial advice gets green light (NZ Herald) Rated: A

Already under pressure from reputational challenges, New Zealand’s human financial advisor workforce will now have to go head to head with computer-generated advice.

KiwiSaver provider Kiwi Wealth has today received the green light to be the first to offer personalised digital financial advice and will launch the service to its KiwiSaver members next month.

Kiwi Wealth, which is owned by the Government, ACC and the New Zealand Superannuation Fund, and is a sister company to Kiwibank, is the first to gain an exemption from the Financial Markets Authority.

India

Deifying big data (Business Line) Rated: A

The fusion of big data with artificial intelligence is creating this beast called ‘data capitalism’

The world is shifting from finance to data-capitalism. The man with data is the king. Data-rich markets will destroy the existing order, money will no longer be in its pre-eminent position, labour markets will be uprooted and millions of jobs endangered, firms thrown out of business, and so on.

From solving habitual tasks to affordable interior designs – your startup fix to start the week (Your Story) Rated: A

The rules of investment have changed over the years, and peer-to-peer lending is being viewed as an investment avenue that is expected to give returns to the tune of 18-22 percent, according to industry estimates. Bengaluru-based Finzy is trying to tap on to just that. Amit More’s background in finance had him excited about the credit opportunity in India. He teamed up with Abhinanadan Sangam, and the duo chose to set shop in the ripe Indian digital lending market. Finzy was incorporated in October 2016 with Bridge FinTech Solutions Pvt Ltd as the parent company.

Asia

Keeping Loan Sharks Away From Indonesia’s Fintech Archipelago (Bloomberg) Rated: AAA

Indonesia is planning to tighten regulation of its vibrant financial technology sector, imposing new rules on companies which it hopes will stand at the forefront of efforts to extend services to more of the country’s 260 million people.

Peer-to-peer lending jumped 38 percent in the first two months of 2018 from a year earlier, hitting 3.5 trillion rupiah, and OJK director Eko Ariantoro said in March that regulators “don’t want these developing fintechs to become loan shark-like businesses.”

Asia news roundup: Didi responds to passenger killing, Flipkart founder exits, and more (Tech In Asia) Rated: B

Julo raises US$5 million in series A (Indonesia). The peer-to-peer lending startup received the funding in a round led by Skystar Capital and East Ventures. Participating investors included Convergence Ventures, Provident Capital, and Central Capital Ventura, among others.

Authors:

George Popescu
Allen Taylor

Wednesday May 9 2018, Daily News Digest

Gross Revenue and Net interest

News Comments Today’s main news: SoFi is planning a credit card. LendingClub reports Q1 results. OnDeck reports Q1 results. Kabbage closes Orchard acquisition. Cross River passes $600M in monthly originations. Mintos achieves profitability. iZettle to pursue $1.1B valuation through IPO. TransferWise moves into Canada. Today’s main analysis: Review of OnDeck earnings. Today’s thought-provoking articles: Review of Marcus. Cities where borrowers save the most […]

Gross Revenue and Net interest

News Comments

United States

European Union

International

India

Other

News Summary

United States

SoFi Is Said to Plan Credit Card With Help From Former Citi Executive (Bloomberg) Rated: AAA

Social Finance Inc., a startup looking to offer a range of banking services to millennials, is working on a credit card and is bringing in a former Citigroup Inc. executive to help oversee the initiative, said people familiar with the matter.

The San Francisco-based company hopes to offer credit cards within the next year, said the people, who asked not to be identified because the plans are private. In preparation, SoFi is hiring Richard Garside to help lead the company’s operations, the people said.

Financial highlights for the first quarter include:

  • Delivered revenue of $151.7 million, up 22% year-over-year
  • Achieved 18% year-over-year growth in originations to over $2.3 billion
  • Improved Contribution Margin to 49.1% from 42.7% in the same quarter last year
  • Delivered Adjusted EBITDA of $15.3 million, or a 10.1% Adjusted EBITDA margin, compared to an Adjusted EBITDA of $0.2 million, or a 0.1% Adjusted EBITDA margin, in the same quarter last year
  • GAAP Consolidated Net Loss was ($31.2) million, including $17 million of expenses related to outstanding legacy issues disclosed by the Company in 2016, related to ongoing legal costs from government investigations, as well indemnification costs for the previous management.

Operational highlights for the first quarter include:

  • In the first quarter of 2018, LendingClub continued to execute on its mission to make credit more affordable and investing more rewarding, now having served over 2.4 million borrowers.
  • For Borrowers: LendingClub saw strong adoption of a new feature called Direct Payoff that allows borrowers to seamlessly pay off their credit card balances in exchange for a better rate – thereby improving their financial profile and lowering their monthly payments.
  • For Investors: LendingClub’s recently launched innovation, CLUB Certificates, attracted over $160 million in funding from several of the top names in asset management. The new CLUB Certificates give investors easy access to consumer credit and provide a single security that offers greater flexibility and liquidity.
  • Scott Sanborn, LendingClub CEO said, ‘We feel good about how we’ve kicked off the year and the fundamentals of our business continue to be strong. Our strategic initiatives are working on both sides of our marketplace and we’ll keep innovating to help more Americans on their journey to financial success.’.

 

OnDeck Reports First Quarter 2018 Financial Results (PR Newswire) Rated: AAA

OnDeck (NYSE: ONDK) today announced first quarter 2018 Gross revenue of $90 million, Net loss of $1.9 million, and Adjusted Net income of $6.4 million.

“Our first quarter results reflect a strong start to 2018 as we continue to execute on our strategic priorities to position our business for future success,” said Noah Breslow, chief executive officer, OnDeck. “We delivered 8% sequential loan growth while managing our sales and marketing costs, and had positive credit performance, as the 15+ Day Delinquency Ratio and Net Charge-off rate both improved significantly from a year ago.”

Review of OnDeck Q1 2018 Earnings Results (Lend Academy) Rated: AAA

While the company posted a net loss of $1.9 million for the quarter, this was within guidance. Gross revenues were $90 million, coming in at the top end of projections for the quarter. The increase in revenue was attributable to higher interest income or the company’s effective interest yield, or EIY which came in at 35.6%, compared to 34.8% in the previous quarter. OnDeck also beat on adjusted income which came in at $6.4 million (Q1 2018 guidance was between $1 and $5 million).

Source: Lend Academy

Originations were up 8% from the previous quarter at $591 million.

Source: Lend Academy

OnDeck swings to loss, but loan demand surges (American Banker) Rated: A

The New York company recorded a net loss of $2 million, or 3 cents per share, versus a loss of $11 million in the same period a year ago.

OnDeck earned $5.1 in fourth quarter, its first quarterly profit in two years. In a news release Tuesday, the company said that it would have earned $6.4 million in the quarter that ended March 31 if not for charges it took to cover the costs of leases terminations New York and Denver, severance for laid-off workers and other one-time expenses. The lease terminations are expected to save the company $2 million over the next eight years.

 

Kabbage’s Acquisition of Orchard Officially Closes (Crowdfund Insider) Rated: AAA

Orchard co-founder Matt Burton has emailed industry members stating the previously announced acquisition of his company by SME lender Kabbage has formally closed. The purchase had been rumored for weeks with an official announcement hitting the press at the end of April.

Burton, and co-founder and Chief Analytics Officer David Snitkof, have both joined Kabbage in leadership roles. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

 

We tried Goldman’s Marcus, here’s our conclusion (Business Insider) Rated: AAA

Goldman Sachs’ consumer lending platform, Marcus, appears well on its way to becoming a full-scale digital banking offering. The platform has originated some $2.5 billion in loans since launching in October 2016, and now offers savings accounts with a minimum threshold of $1.

Source: Business Insider

Here’s why FIs should be worried about Marcus:

  • It’s backed by Goldman’s reputation, and deep pockets.
  • The interface is sleek and consumer friendly.
  • Its offerings are extremely competitive.

LendingTree Reveals Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans (PR Newswire) Rated: AAA

LendingTree today released its Mortgage Rate Competition Indexes for the 50 largest cities in the U.S. to assess how different markets behave across the country.

Source: LendingTree

Cross River Passes $ 600 Million in Monthly Loan Originations (The Public Opinion) Rated: AAA

Continuing its strong record of growth, Cross River, a leader in the emerging Fintech industry, announced today that it has set a new monthly loan origination record of more than $600 million in April.

Cross River’s April 2018 volume represents approximately 60% growth in loan origination from April 2017, and keeps Cross River on pace to exceed $7 billion in loan originations for 2018.

MoneyGram Seeks More Digital Gains In 2018 (PYMNTS) Rated: A

MoneyGram revenue declined 2 percent year over year in the first quarter, to $380 million. That was lower than analyst expectations of about $386 million. Net income declined 19 percent, to $7.1 million, with earnings per share at $0.15 per share — below analyst expectations of $0.26.

Moneygram.com, the digital business, posted a year-over-year revenue gain of 21 percent in the first quarter, with most credit going to customer acquisitions, the company said in its financial release. Digital revenue accounted for 16 percent of all money transfer revenue in the first quarter.

Credit Karma Partners with SpyCloud to Add Dark Web Data Monitoring (Finovate) Rated: A

Credit Karma has expanded its identity theft monitoring offering to include data from the dark web. Courtesy of a partnership with fellow Finovate alum – and Best of Show winner – SpyCloud, Credit Karma will dramatically increase the number of data breaches it is able to review for its 80 million users. Currently searching 4.5 billion public breaches, the new service will boost the total number of data breaches searched to 13 billion.

Data Sheet—Zillow’s Audacious House Flipping Plan Scares Wall Street (Fortune) Rated: A

Looking merely at the numbers, Zillow reported a fine quarter Monday. The Seattle company doesn’t make money. But it does grow quickly on top of a billion-dollar-plus annual-revenue clip. It is worth more than $10 billion and is the winner of its category, having absorbed competitor Trulia and outlasted others.

Yet Zillow isn’t satisfied. It is starting a new home-flipping business using its own balance sheet to buy, touch up, and sell homes. Wall Street hates the idea, wondering why a perfectly respectable online business would wade into the messy and highly variable world of investing real money in actual houses.

Fintech Companies Should Move On From The Millennials (Forbes) Rated: A

These days, for consumer fintech companies in wealth management (we will call them fintechs for short), it is, to paraphrase Meghan Trainor, all about the millennials. Fintech unicorns are courting millennials and garnering billion-dollar valuations for succeeding at it. The Robinhood is 28, and 78% are under 35. The average age of a Betterment customer is 35 and .  With three million accounts, Acorns has primarily a millennial customer base as well. However, if these companies and their millennial-chasing brethren are hoping to raise meaningful assets under management, it is time for them to move on from the millennials.

According to the , millennials today have just 4% of the nation’s wealth, compared to 50% for Baby Boomers and 33% for the Silent Generation.

3 Strategies To Help You Say “Bye, Felicia” To Student Loan Debt (Forbes) Rated: A

Goldman, Wells Fargo Look to Credit Cards for Bigger Returns (Bloomberg) Rated: A

Two of the biggest U.S. banks, Goldman Sachs Group Inc. and Wells Fargo & Co., are on the brink of piling into credit-card lending, seeking a share of the $183 billion in fees and interest tied to the product.

Making the Ask, Part 1: The Key to Entrepreneurial Success (Newswise) Rated: A

Professor Saras Sarasvathy, a renowned scholar of entrepreneurship at the University of Virginia Darden School of Business, has discovered that successful entrepreneurs are not only relentless “askers,” but they also have a repertoire of asks for different startup scenarios.

Rather than develop business plans to raise money, experienced entrepreneurs start with their means at hand — who they are, what they know and whom they know — exploring what they could do with those means. At the same time, they enlist others who want to work with them. Together, they iteratively co-create new products, ventures and markets. As more stakeholders self-select, committing their resources to the emergent ideas, the goals start to coalesce.

In the early stages of venture creation, effectual asks start as open-ended conversations.

SmartBiz Loans Adds Seacoast Bank to Technology Ecosystem (Business Wire) Rated: B

SmartBiz Loans today announced the addition of Seacoast Bank ( to the company’s unique technology ecosystem, taking the total number of banks on their platform to nine. SmartBiz Loans’ intelligent technology platform matches Florida-based Seacoast Bank to the right loan customers in a fraction of the time a referral typically can take, allowing the bank to originate SBA loans more efficiently while increasing the likelihood that small business owners get approved for funding.

 

With student debt levels reaching crisis proportions in the United States, Fidelity Investments announces significant response to its Student Debt Employer Contribution benefit, with 25 employers making plans to offer the Fidelity program and nearly 9,000 of their eligible employees expected to be enrolled in the program by the end of June.

 

 

 

 

 

 

 

 

 

 

United Kingdom

What are the benefits of IFIsas? (Bridging & Commercial) Rated: A

Over a third of UK savers (36%) would place their money in an IFIsa if they had the available funds, a new study has found.

The Next Gen: Investors and Savers report from P2P lending platform ArchOver found that 61% of respondents acknowledged the prospect of higher returns and better interest rates from an IFIsa.

However, over half (57%) claimed that they still didn’t fully understand the service.

China

Chinese Rural Fintech Firm Shenma Completes $ 47.3M Series C Round (Chinese Money Network) Rated: A

Shanghai-based Shenma Finance, a fintech company focused on rural mobility, has raised a RMB300 million (US$47.25 million) series C round led by China Growth Capital, Hina Group and Chinese fintech firm Tongbanjie Group.

Existing investors Credit Ease Financial Industry Investment Fund and ChinaEquity Group also participated in the round, the firm announced on its official WeChat account.

European Union

Riga-based fintech startup Mintos reaches profitability as it eyes global expansion (EU Startups) Rated: AAA

Three years after launch, the Riga-based fintech startup Mintos has turned an annual profit for the first time. The company’s revenue increased more than four-fold in 2017 to over €2.1 million and net profit for 2017 was €197K.

In more than three years since its establishment, Mintos has exceeded €660 million in cumulative investments by investors and the company expects the amount of loans funded to reach €1 billion by the end of the year.

Swedish fintech group iZettle to seek $ 1.1bn valuation in IPO (Financial Times) Rated: AAA

Some of the biggest names in payments, including Mastercard, American Express and Santander, have invested in iZettle, as have venture capital firms including Index Ventures and Dawn Capital.

International

ArthaCoin ICO (ATH Token): Long Term Crypto Lending Program? (Bitcoin Exchange Guide) Rated: A

Arthacoin is a sustainable investment-lending platform that aims at providing prosperity and guaranteed returns to its investors. Arthacoin is viewed as an alternative investment, which uses different investment methods to ensure investors get active returns using their collected funds. The platform purposes to create returns by use of derivatives and leverage in cryptocurrencies.

Besides, it is a self-managed financial system, which supports peer-to-peer transactions with a basis on the open-source platform. Arthacoin is built with a vision of creating a regular passive and sustainable income in the end for its investors.

What’s The Difference Between Trading Crypto VS. Lending Crypto (Finsmes) Rated: A

When it comes to investing in cryptocurrencies, the most common way to invest is by trading. Cryptocurrencies have revolutionized how we do business, make investments and raise funds. Some would even call blockchain technology the invention that would shape the 21st century. Trading cryptocurrencies is a fast and easy way to profit and can be interesting too.

But there is also another way to earn profits from cryptocurrencies and make your money work for you – crypto lending.

Let’s take a look at both crypto trading and crypto lending.

Crypto lending is a relatively newer way to earn profits. It revolves around the concept of shorting.

Australia

Do You Still Only Have One Bank Account? Here’s How Many You Should Have By Now (MyDomaine) Rated: A

If you’re living from pay cheque to pay cheque and can’t seem to break the cycle, chances are you’re not alone, dear millennial. In fact, it may not have even been bad shopping habits that landed you here. Whether it’s an underpaying job, or a weekly rent payment that is far from sensible, in the words of financial adviser, from Honest Money, Jacqui Park: “There’s no time like the present” to stop spending frivolously and start saving. But before you downsize, start a side-hustle, or, cut up the credit cards; it’s worth noting the basics of saving, so when you do decide to forgo life’s little luxuries you are able to make the most of it.

India

BigWin Infotech gets P2P lending licence (The Economic Times) Rated: AAA

Online lending platform BigWin Infotech has received an in-principle approval from RBI to start peer-to-peer lending operation as a non-banking finance company.

The company claims to be the first among all the P2P applicants to have received the licence and is planning to commence operations under the brand name of Paisadukaan.

The Future Of Credit Is Here (Businessworld) Rated: AAA

Fintech companies have netted the lower-middle income consumers who have, until now, been ill-served by banks as far as credit is concerned and have had to resort to gold loans or source other types of collateral. The lending landscape has transformed in the recent times with a host of startups that provide direct and simple credit for consumers. These companies broadly offer two types of products: Cash credit from companies such as Walnut & PaySense, that can be used for any purpose.

EMI loans to purchase electronics or white goods from companies like Zest Money or Kissht competing against industry giants such as Bajaj Finance. Then there are companies like MoneyTap that provide a flexible hybrid product that is an app-based credit line.

Fintech startups that provide credit to SMEs include CapitalFloat, KredX, LendingKart, NeoGrowth, Indifi and others.

P2P loan marketplace Finzy wants to change how India sees lending (Your Story) Rated: A

The rules of investment have changed over the years. First it was traditional methods like saving with fixed deposits, and then came insurance and stock markets.

However, the rules have changed yet again, and peer-to-peer lending is being viewed as an investment avenue that is expected to give returns to the tune of 18-22 percent, according to industry estimates.

According to the company, the rate of return for investing in Finzy is 15.5 percent for investors.

 

Latin America

Ripio CEO: Reinventing P2P Lending With The Blockchain (PTMNTS) Rated: A

Ripio has had more than one name in its evolution as a firm – but only a single goal. Originally known as BitPagos at launch, and then rebranding to Ripio in advance of its late 2017 ICO – the Argentina-based firm wants to use the blockchain to unlock the power of P2P lendingon a global scale.

The problem with traditional credit systems, according to Ripio, is that when it comes to access, geography is more or less destiny in many cases.

Canada

Fintech company TransferWise to launch borderless debit card in Canada in 2019 (Financial Post) Rated: AAA

European financial technology company TransferWise is planning a Canadian launch next year for its borderless debit MasterCard, which allows users to hold and spend a balance in multiple currencies with lower fees than traditional banks.

Kaarmann says there would be no transaction fees for people making purchases on the borderless debit card in the currency a balance is held in.

Authors:

George Popescu
Allen Taylor

Wednesday May 2 2018, Daily News Digest

Wednesday May 2 2018, Daily News Digest

News Comments Today’s main news: RateSetter overhauls Rolling Market product. Revolut to offer cash back in cryptocurrency. Kabbage hires new CTO. BlueVine raises $200M. iZettle expected to IPO. ETMoney launches CreditLine. Today’s main analysis: Are marketplace lenders, tech companies living up to the hype? Today’s thought-provoking articles: Revising the ICAPM to reflect effects of style investing. Cagney’s Figure to offer home […]

Wednesday May 2 2018, Daily News Digest

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Kabbage Hires CTO to Lead Development of Future Data-First Solutions for Small Businesses (PRNewswire) Rated: AAA

Kabbage, Inc., a global financial services, technology and data platform serving small businesses, appoints James Chou as its chief technology officer (CTO). With more than 20 years of successfully leading technology innovations, Chou will oversee the development of the company’s next generation of data-driven financial products and services for small businesses.

Ex-SoFi CEO Mike Cagney Makes a Comeback With a New Blockchain-Focused Startup (Fortune) Rated: AAA

The new startup plans to offer three- to 10-year home equity loans and a buy-lease-back product, the report says. In other words, it will purchase retirees’ homes and then lease them back. Many banks cut down on these types of loans following the financial crisis, but they’re starting to gain traction again due to rising home prices.

 

Online Lender BlueVine Receives $ 200 Million Line of Credit from Credit Suisse (Crowdfund Insider) Rated: AAA

Online lender BlueVine has secured a $200 million asset-backed revolving credit facility with Credit Suisse. Additionally, the SME focused platform said it has upped its business line of credit to $250,000. Earlier in 2018, BlueVine doubled its invoice factoring credit limit to $5 million. BlueVine’s total funded volume since founding is expected to top $1 billion in 2018.

To date, BlueVine has raised more than $400 million in equity and debt funding and is funded by Lightspeed Venture Partners, 83NORTH, Correlation Ventures, Citi Ventures, Menlo Ventures, Rakuten Fintech Fund and other private investors.

Senate should take up bill to help lenders see ‘credit invisibles’ (American Banker) Rated: A

The Credit Access and Inclusion Act of 2017 would amend the Fair Credit Reporting Act to allow the reporting of certain positive consumer credit information, such as on-time payment histories, to consumer reporting agencies. In other words, the legislation would help consumers build up their credit history for something they’re already doing.

A New Crop of Fintech IPOs Will Face Skeptical Investors (Bloomberg) Rated: A

There are now close to 30 private fintech startups with valuations at or above $1 billion, according to data platform PitchBook. A few of them are increasingly cited as possible IPO candidates. Among the most closely watched are Pimco-backed GreenSky, which has already filed paperwork with the Securities and Exchange Commission, and Dutch payments company Adyen BV, said to be considering IPO as soon as this year.

The question now is what happens to those billion-dollar-plus valuations when the public gets a look at the companies’ financials and growth projections. In the past, fintech companies haven’t fared too well. Square Inc., which is set to report earnings this week, is the exception.

BOK Financial Implements Partnership With Roostify to Streamline Mortgage Process (Business Wire) Rated: A

BOK Financial, a top-25 regional financial services company, has implemented a partnership with Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans.

The new digital platform is a tool that offers functionality and efficiency to customers including:

  • Customers can start an application, provide documentation and follow their loan’s progress online.
  • Applicants have a secure way to upload, send, and receive loan documents. Homebuyers can add other involved parties to transaction, such as the real estate agent.
  • Users don’t have to guess where they are in the process – they will receive timely loan status updates.

Inside a swanky New York party for graduates who paid off their student loans (Market Watch) Rated: A

Garrido also entered a competition to win a trip to New York furnished by SoFi, the company that’s made its name refinancing student loans, including one of her own. The occasion of the competition, which Garrido ultimately won: To join other SoFi customers—or “members” in the company’s parlance—who paid off their debt to celebrate at a rooftop bar and restaurant last Thursday in the swanky William Vale hotel in Williamsburg, Brooklyn.

On one side of the student debt story are those that our college finance system has truly crippled: Borrowers who leave school with debt and no degree or graduate with degrees worth little in the labor market, or benefit less from their degree simply because of where they came from. Many in the latter group struggle to repay the debt—and not necessarily due to lack of ambition. Despite the rebounding economy, levels of student-loan delinquency remain stubbornly high.

Mom, CFP: New Varo Money Survey Reveals That When Americans Need Financial Advice, They Come To Mama (Payment Week) Rated: A

Mobile banking company 

U.S. judge dismisses state regulators’ lawsuit over national ‘fintech’ charter (Reuters) Rated: A

A District of Columbia federal judge dismissed a lawsuit brought by state bank regulators against the U.S. Comptroller of the Currency over its proposal to offer charters that would let so-called fintech companies do business nationwide.

Since the OCC has not reached a final decision on the fintech charters, the claim of harm by the Conference of State Bank Supervisors (CSBS) was speculative, U.S. District Judge Dabney Friedrich wrote in her decision tossing out the case, issued late on Monday.

The future of lending is here, meet RAD Lending (TechBullion) Rated: A

Introducing the RAD Lendingplatform, a foundation for the financial products for the modern crypto economy, where a family of RAD credit products — personal and business loans, credit cards — will help filling the gap between crypto holdings and real-life fiat spending.

RAD Lending’s peer-to-peer (p2p) lending platform will use the benefits of the blockchain and smart contracts for its crypto secured credit products. The platform will connect fiat money investors looking for the predictable yield, with crypto-asset holders looking for loans in easily spendable fiat. By accepting crypto assets as a collateral against loans, and using the guardrails of the blockchain and smart contract technology, the platform will mitigate risks for both investors and lenders.

REVISING THE ICAPM TO REFLECT EFFECTS OF STYLE INVESTING (All About Alpha) Rated: AAA

A recent paper by Michael Stutzer, of the University of Colorado at Boulder, Leeds School of Business, suggests that the intertemporal version of the capital asset pricing model (ICAPM) needs some revision in light of the market dominance of style investors.

A more full statement of that might be: it needs revision in light of the lack of empirical support for its foundations on the one hand, and in light of the dominance of style investors on the other: and that these two revisions turn out to be one and the same.

Read the full paper here.

5 Top Lenders You Should Consider for Tiny House Financing (Student Loan Hero) Rated: A

 Upstart

  • Upstart personal loans come with an APR range of 7.73% to 29.99%
  • Borrow between $1,000 and $50,000
  • Repayment terms of three or five years
  • Qualify with a credit score of 620 or better

2. LendingClub

  • LendingClub personal loans come with an APR range of 5.99% to 35.89%
  • Borrow between $1,000 and $40,000
  • Repayment terms of three or five years
  • Qualify with a credit score of 600 or better

4. FreedomPlus

  • FreedomPlus personal loans come with an APR range of 4.99% to 29.99%
  • Borrow between $10,000 and $35,000
  • Repayment terms of two, three, four, or five years
  • Qualify with a credit score of 640 or better

5. SoFi

  • SoFi personal loans come with an APR range of 5.37% to 14.24%
  • Borrow between $5,000 and $100,000
  • Repayment terms of three, five, or seven years

Personal Capital links with employers to grow user base (Tearsheet) Rated: B

Digital wealth adviser Personal Capital is offering its financial advice platform to employers to grow its user base beyond its core group of investors.

The company last week inked an agreement with benefits provider Alight and investment firm AllianceBernstein to use Personal Capital’s tech platform to help participating employers select personalized 401(k) offerings for their staff members. Co-branding with Personal Capital exposes large swaths of new users to the platform.

PLI 23rd Annual Consumer Financial Services Institute, Chicago session (JDSupra) Rated: B

The second presentation of the 23rd Annual Consumer Financial Services Institute, sponsored by the Practising Law Institute, will take place in Chicago on May 7-8, 2018.  I am co-chairing the event, as I have for the past 22 years.

New to the Institute this year will be a panel on the second day that I will moderate and that will discuss the rapidly changing landscape for marketplace lending and fintech.

United Kingdom

RateSetter overhauls Rolling Market product (Peer2Peer Finance) Rated: AAA

RATESETTER has unveiled a series of changes to its Rolling Market product, removing the ability for investors to set their own rate on reinvested funds and altering how returns are paid.

Currently investments in the Rolling Market are reinvested each month, meaning the interest rate can change, but from 6 June, investments will remain matched to the same borrower until the loan is repaid, so the return will remain the same.

The rate will only change when the money is reinvested.

UK Fintech Startup Revolut Will Give Cash Back In Cryptocurrencies (Forbes) Rated: AAA

In a bold bid to further tempt young, tech-minded customers, London-based fintech startup Revolut is going to launch a debit card that gives users 1% cash back in cryptocurrencies.

UK challenger banks braced for fresh wave of consolidation (Financial Times) Rated: A

Senior executives at several smaller lenders and established high street banks said they expect a pick-up in M&A activity, after last year’s £850m takeover of Shawbrook and FirstRand’s £1.1bn purchase of Aldermore put the sector on notice for a return to dealmaking.

Cryptocurrency lobby group calls for regulation based on P2P model (Peer2Peer Finance) Rated: A

A GROUP of the UK’s leading cryptocurrency platforms want the regulator to use peer-to-peer finance legislation as a framework for their own sector.

CryptoUK, a self-regulatory trade association with eight members, has set out new plans for the Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA).

The plans are part of a written response by CryptoUK to the House of Commons Treasury Select Committee inquiry into digital currencies, which is currently underway.

Do you live in a P2P property hotspot? (Peer2Peer Finance) Rated: A

But as the P2P property market has expanded, a few clear trends have begun to emerge. In some parts of the country, P2P property lending is going strong. In fact, if you’re based in one of these P2P property hotspots, you may be living next door to one…

Walthamstow-Wellesley is currently offering investments in three new-build properties in E17, while Octopus Choice has loaned money on more than 30 properties in the E17, N17 and N15 areas. The Octopus platform is offering rates of between 4.49 per cent and 7.99 per cent of borrowers, with an average of four per cent in returns for investors.

Huddersfield-The West Yorkshire town of Huddersfield has been a surprising recipient of P2P property funding, largely thanks to property platform Lendy, which has financed several large property developments there. Its proximity to Manchester and Leeds means that it is likely to attract even more developer interest in the coming years.

Eastbourne-Landbay currently keeps 21 per cent of its property portfolio in the South East, with dozens of properties in and around Eastbourne.

YPO Innovation Week Unites Innovators for the Global Fintech Summit 2018 in London (Globe Newswire) Rated: B

As a part of its third annual YPO Innovation Week, YPO will host the Global Fintech Summit in London, United Kingdom, where the most dynamic global innovators will be together for a rare chance to network, overturn conventional thinking and leave inspired with the tools to infuse innovation in their companies and communities.

The Global Fintech Summit 2018 will explore the latest disruptive technologies and opportunities across the fintech landscape – including blockchain, bitcoin and robo-advice to online payments, crowdfunding, P2P lending and private equity while connecting YPO leaders from throughout Europe and across the world to share challenges, insights and needs.

China

China’s Biggest Tech Unicorns Stampede to Go Public (Wall Street Journal) Rated: AAA

An unprecedented wave of Chinese technology companies is accelerating plans to raise money from the global capital markets, hoping to leverage investors’ optimism about the sector and lock in buoyant stock valuations.

In recent months, at least a dozen Chinese companies with collective private valuations of roughly $500 billion have been in talks with bankers and potential investors about initial public offerings in the second half of this year or in early 2019, according to people familiar with the discussions.

European Union

iZettle to announce IPO plan early next week (Financial Times) Rated: AAA

iZettle is gearing up to announce its intention to float as early next week in what would be the largest initial public offering by a European financial technology company.

The Swedish payments and ecommerce group has been in talks with potential investors and could seek a valuation of about SKr10bn ($1.1bn) when it is expected to launch its IPO process on Tuesday next week, according to people involved in the flotation.

International

Banks and Fintechs: Adversaries or Partners? (Wharton) Rated: AAA

Some fintechs will aggressively go it alone and challenge the legacy banks in their most lucrative markets. And recent rule changes in Europe, which force banks to transfer closely guarded customer information to fintechs upon customer request, will add new momentum to the upstarts.

Still, the drive towards collaboration is well underway, as the following on-the-ground examples suggest.

  • ICICI Bank, India’s largest private bank, and Paytm, the country’s largest digital payments platform, have jointly launched a digital credit account on the Paytm app. Paytm-ICICI Bank Postpaid gives customers access to instant micro-credit for everyday expenses — from bill payments to movie tickets. Its algorithm – from ICICI – is based on a customer’s financial and digital behavior and evaluates credit-worthiness in seconds.
  • Bocom International, the investment banking arm of China’s Bank of Communications, has partnered with Hong Kong fintech firm FDT-AI to develop intelligent, personalized investment research based on bank clients’ past transactions. The hope is to offer more tailor-made investment advice.
  • ING Group has partnered with Scalable Capital, a leading online wealth manager and robo-advice firm in Europe, to offer a fully digital investment solution to ING’s retail customers starting in Germany. Customers do a paperless registration in under 15 minutes. With a minimum investment of 10,000 euros they can monitor their portfolios on both Scalable Capital and ING mobile apps and online portals.
  • Kabbage, a U.S.-based leading online lender, has partnered with large players such as Scotiabank, for streamlining online lending; MasterCard, for business loans through MasterCard’s network of acquirers; ING, to provide capital to small businesses; and Santander Bank, for loans to small and medium enterprises.

Financial regulators turn their sights on banks’ use of cloud (Financial Times) Rated: A

Financial regulators on both sides of the Atlantic have turned their attention to the cloud, as concerns mount over how to supervise online storage services, which hold information from the world’s biggest banks.

Global financial institutions are becoming increasingly reliant on the cloud — using it to store customer-account data and their banking systems, leading supervisors to fret about what might happen if a bank collapses.

As well as cyber risk, regulators ‎are worried about concentrating so much information in the hands of Amazon, Google and Microsoft — the three big companies that dominate cloud provision — without the same level of supervisory oversight as banks, according to people familiar with regulatory discussions.

Chris Larsen: From Marketplace Lending Pioneer to Creating the New Internet of Value (Lend Academy) Rated: A

But Chris had an itch to start a new company, one that was based on this emerging blockchain technology.

Of course, this move proved to be prescient and his new company, which eventually became known at Ripple, has the potential to completely rewrite the rules of global commerce. In 2013 they introduced the XRP token as the vehicle to help them achieve this goal. XRP (as of this writing) is the third most valuable token with market cap of $32 billion. This is down considerably from its high in January when its market cap reached around $150 billion and briefly made Chris Larsen one of the wealthiest people in the world.

When you think about how far technology has come and the fact that information has flowed freely across borders now for 25 years it is just crazy that the way we move money internationally has barely changed since the 1980s. And while companies like Transferwise have made it more efficient and simple to send money internationally, it is still more expensive and much slower than the system that Chris Larsen envisions. He sees this new system as the second internet: the internet of value.

Living Up To The Hype (Or Not) (PYMNTS) Rated: AAA

Bitcoin, marketplace lending — pick your poison — they came to disrupt, but the jury is still out on whether they can ever achieve that goal. The global citizen and international nomad may change the nature of work around the world, but they need a “finabler” to help them do it.

And new EU regulations like GDPR may be a sea change in how business worldwide will get done, but no one seems to know if that change will come as an easy, rising tide or a tsunami of transformation.

Source: PYMNTS

BFEX: EMPOWERING THE WORLD WITH A BETTER FINANCIAL IDENTITY BY SHANKAR BISWAS (Bitcoinist) Rated: A

BFEX’s peer to peer lending platform is a financial market place with a difference: it is transparent, secure and credible and different from the banks with its proprietary; Decentralized Social Trust Credit Scoring that will provide millions with access money at fair rates with a new improved social identity. BFEX will create better indicators by making meaningful connections between traditional and nontraditional data where raw Credit scores are only a part of the story. Nontraditional data will allow us to look at trends in consumer behavior that completes the picture and tells a better story of the person.

India

ETMoney forays into lending with the launch of CreditLine (Medianama) Rated: AAA

Times Internet’s ETMoney has entered into the lending space with the launch of a new service called CreditLine on its platform, in partnership with RBL Bank.

ETMoney is a personal expense management app which allows users to invest in mutual funds, gold deposits, liquid funds etc, buy insurance, manage expenses and more. The company claims that the app has 4 million users so far and said that it has grown 20x in the last 12 months.

Competition

Paytm is reportedly trying to enter the lending space and is seeking a licence from the Reserve Bank of India (RBI) to become a peer-to-peer lending platform.

Mobikwik too is working on the launch of a lending product that will offer instant credit to customers directly from its app.  Other players in this segment are like Capital Float, NeoGrowth, Paytm-backed CreditMate, CASHe, LendingKart, MoneyTap, EasySalry, Faircent, LoanMeet amongst others.

Asia

New P2P lender snares key Asian backers (Financial Review) Rated: AAA

OurMoneyMarket has just closed a $4 million funding round which saw N2N Connect, a Malaysian stock exchange-listed financial information provider backed by Japan’s financial media giant, Nikkei Inc, emerge as a key shareholder. Singapore-based YK Capital, a tech company investor, also tipped into the raising.

Run by Adam Sutherland, formerly a securitisation banker at National Australia Bank, and chief operating officer Crystal Anderson, and chaired by John Barry, NAB’s former head of debt capital markets in Asia, OurMoneyMarket has been up and running for nine months and during that time has made $1.5 million in loans.

It’s taking things slowly; there have been $95 million in applications. It has delivered early investors a 13 per cent net return. Revenue is growing at 45 per cent month on month.

Singapore launches the “Fintech Fast Track” for new patents (Business Insider) Rated: AAA

The Intellectual Property Office of Singapore (IPOS) has announced the launch of a new initiative, dubbed the Fintech Fast Track initiative, which aims to grant patents for fintech innovations at a faster pace than before. While it can traditionally take up to 2 years for a patent to be granted, this new initiative will bring that down to 6 months for new fintech solutions. The initiative includes fintech innovations related to electronic payments, investment platforms, insurance technology, blockchain, banking, security, fraud, and authentication, among others.

Authors:

George Popescu
Allen Taylor

Friday April 20 2018, Daily News Digest

Marketplace Lending Securitization League Table

News Comments Today’s main news: OnDeck closes $100M credit facility. LendingClub expected to announce quarterly sales of $152.18M. Affirm expands to cover smaller purchases. Funding Circle lends 80M GBP through IFISA. China Construction Bank opens robot-only branch. Today’s main analysis: Originator league table. UK P2P lending nears 9B GBP. Today’s thought-provoking articles: Top fintech investors by stage. Interview with […]

Marketplace Lending Securitization League Table

News Comments

United States

United Kingdom

China

Australia

Other

News Summary

United States

OnDeck Announces New 0 Million Revolving Credit Facility (PR Newswire) Rated: AAA

OnDeck announced today the closing of a $100 million asset-backed revolving credit facility with Pioneers Gate LLC, a lending vehicle of a leading life insurance company managed by 20 Gates Management. The new facility provides the longest revolving funding period of any of OnDeck’s funding sources, and the lowest interest margin of any of OnDeck’s variable-rate funding facilities to date.

Lending Club (LC) Expected to Announce Quarterly Sales of 2.18 Million (The Lincolnian Online) Rated: AAA

Wall Street brokerages expect that Lending Club (NYSE:LC) will announce sales of $152.18 million for the current fiscal quarter, according to Zacks. Three analysts have provided estimates for Lending Club’s earnings. The lowest sales estimate is $150.00 million and the highest is $154.53 million. Lending Club posted sales of $124.48 million during the same quarter last year, which suggests a positive year-over-year growth rate of 22.3%. The firm is scheduled to announce its next earnings results after the market closes on Tuesday, May 8th.

On average, analysts expect that Lending Club will report full-year sales of $688.45 million for the current financial year, with estimates ranging from $680.00 million to $693.30 million. For the next fiscal year, analysts expect that the company will post sales of $803.61 million per share, with estimates ranging from $773.00 million to $858.31 million. Zacks Investment Research’s sales averages are an average based on a survey of sell-side research analysts that cover Lending Club.

Affirm Expands Offering to Cover Smaller Purchases with Simple, Transparent Payments (The Virginian Pilot) Rated: AAA

Affirm, Inc., the company founded by entrepreneur Max Levchin to provide fair and honest financial products, today announced Affirm will partner with brands and retailers to offer shoppers a simple, no-interest payment option on purchases of any size via three easy, monthly payments. Now, Affirm’s financial products are available for purchases of any size, marking an expansion for the company. Affirm will continue to offer shoppers the option to buy now and make simple, transparent payments over time for purchases up to thousands of dollars, with terms ranging from 3 to 36 months.

The expansion of Affirm’s capabilities will be especially valuable to fashion and apparel brands and retailers that want to offer a quick and convenient payment method that better aligns with shoppers’ cash flows and are more transparent than traditional credit.

PeerIQ Releases Their Marketplace Lending Securitization Tracker For Q1 2018 (Lend Academy) Rated: AAA

We see another robust quarter for marketplace lending securitizations with $4.3 billion in new deals.

SoFi lead the way again with $2.6 billion or around 60% of the market with two huge student loan deals and a consumer loan deal.

Online Lending in Risk On Mode: Unprecedented 21 Months of Non Stop Securitization Issuance (Crowdfubd Insider) Rated: A

The most recent report stated that PeerIQ has observed an “unprecedented 21 months of non-stop issuance. Markets remain in a “risk-on” mode and MPL investor appetite continues to grow. This is a very bullish statement for online lenders coming at a time when interest rates are rising as is competition in the sector is increasing.

Top Seed-Stage FinTech Investors (Crunchbase News) Rated: AAA

Crunchbase News recently took a deep dive into the U.S. FinTech industry’s Q1 2018 venture activity. We found that deal volume in 2017 amounted to more than $7 billion in venture funding for seed, early, and late-stage startups. As 2018 came to a head, the number of deals in the space declined slightly, while venture capital dollars increased by 37 percent quarter over quarter.

The firm has made more than 690 investments in technology companies, with lead investments in 24 startups. Plug and Play also made an early bet on PayPal, now a public company with a market cap over $90 billion. California-based Hippo Insurance picked up an investment by Plug and Play in its $25 million Series B in January 2018. Hippo Insurance was coincidentally also mentioned in our Crunchbase News analysis of startups that have weird names.

Source: Crunchbase News

Defi Solutions, a SaaS platform for lenders, was the latest growth-stage FinTech company to score an investment by the firm. Bain Capital Ventures was the sole investor in the startup’s $55 million Series C in January 2018.

Source: Crunchbase News

RealtyMogul’s MogulREIT I Closes Senior Debt Investment in San Francisco (The Virginian Pilot) Rated: A

MogulREIT I today announced that it has completed an investment in a $6.69 million mixed use building in San Francisco, California, its 15 th acquisition since inception. MogulREIT I was designed to offer investors potential cash flow through managing a diversified portfolio of commercial real estate investments, including, but not limited to medical office buildings, multifamily apartment complexes, office spaces and retail shopping centers.

Ascentium Capital Surpasses $ 4 Billion in Originations (deBanked) Rated: A

Texas-based lender Ascentium Capital announced last week that it had surpassed $4 billion in origination volume since the company was founded in 2011.

The other business channel is a direct channel where Ascentium makes direct loans to small and medium sized businesses of up to $250,000. Depping told deBanked that the company’s direct channel makes up about 30 to 40 percent of its business.

Q&A: Renaud Laplanche on Starting Upgrade and Offering New Credit Products to Consumers (LendEDU) Rated: AAA

Q: It looks like you co-founded Upgrade with a total of 6 co-founders. How has starting Upgrade been unique from a team building perspective?

A: Over the last year we’ve on-boarded more than 250 team members across our three offices – San Francisco, California headquarters, Phoenix, Arizona operations center and Montreal, Quebec, Canada development center. It has been an incredible year, especially looking back at the team we’ve formed.

Q: How did the challenges of starting LendingClub compare to the unique challenges of starting Upgrade?

A: The challenges are quite different because the launch of each company stands about decade apart, so the landscape is very different.

Q: Beyond credit monitoring, how is Upgrade helping to educate consumers about their finances?

A: We believe helping people get smarter about credit can enable them to access more affordable credit in the future, and that’s why we launched Credit Health. Credit Health comprises of a range of tools that we think can help people understand their credit profile and what they can do to improve it. In addition to credit monitoring and alerts we offer Credit Health Insights – a library of educational articles and videos. Credit Health also features a credit simulator that gives you customized advice and tips tailored to your unique credit history. We haven’t seen other credit monitoring platforms offer this the same way we do.

Blockchain Startup Backed By Billionaire Bitcoin Bull Peter Thiel Gets $ 28 Million Investment (BTC Manager) Rated: A

Harbor, a blockchain startup backed by billionaire bitcoin bull Peter Thiel, has received an additional $28 million investment that it hopes will make blockchain real-estate investing a reality.

This latest cash infusion was led by Thiel’s Founders Fund, venture-capital fund Andreessen Horowitz, and cryptocurrency investment firms Pantera Capital and Craft Ventures. The San Francisco-based Harbor secured $10 million in Series A financing in February 2018, raising its total investments to $40 million.

LendingClub vs. Prosper Review: Here’s What You Need to Know (Student Loan Hero) Rated: A

In recent years, there’s been rising interest in peer-to-peer (P2P) lending. A report from Research and Markets estimates that P2P lending could grow by 53.06% between 2016 and 2020, while Transparency Market Research projects that the global P2P market will be worth $897.85 billion by 2024.

Source: Student Loan Hero

Need an Alternative to a Capital One Personal Loan? Here’s Where to Look (Student Loan Hero) Rated: B

For example, if you’re looking for a small loan — say, around $500 — you should skip online lenders. Most don’t provide loans for less than $1,000 or $2,000. Also remember that your credit score is vital to the approval process, so if you can’t get one on your own, consider getting a cosigner.

Source: Student Loan Hero

Why digital banks are welcoming CRA revamp (American Banker) Rated: A

To get a sense of why Ally Bank wants the Community Reinvestment Act rewritten, look at its situation in Utah.

Since it has no retail branches, the $137 billion-asset Ally is assessed for CRA compliance for its lending in Salt Lake City, where its bank is headquartered. But Ally gets no CRA credit for lending in Detroit, where its holding company is based and where nearly four in 10 households are living in poverty.

Quarles suggests new Fed approach to ILCs (American Banker) Rated: B

The Federal Reserve Board’s chief regulator suggested he was open to companies receiving industrial loan company charters, a sign that the central bank’s view on ILCs may be evolving.

“I don’t think of [ILCs] as a particularly special, excessively problematic case,” said Federal Reserve Vice Chairman for Supervision Randal Quarles at an International Monetary Fund forum Wednesday.

Education Loan Finance Receives AAA Ratings on Inaugural Securitization Deal (Business Wire) Rated: A

Education Loan Finance (ELFI), a division of SouthEast Bank, focusing on student loan debt refinancing and consolidation, announces the close of its inaugural securitization of refinanced student loans. Education Loan Finance is the first student loan refinancing lender to receive the AAA rating from both Standard & Poor’s and DBRS on its senior notes in its first securitization transaction comprised of this type of education loan product.

The $200 million transaction was comprised of $24.784 million of variable rate Class A-1 Notes, $158.65 million of fixed rate Class A-2 Notes, and $16.566 million of Class B Notes. The Class B Notes are rated A by DBRS. Citi and Credit Suisse served as joint lead managers on the transaction.

The process of elimination in multiple-offer scenarios (The Ledger) Rated: A

If a house is listed for $400,000 and someone presents a cash offer for $380,000, that will not be favored over an offer for $400,000 from a person getting an 80 percent loan.

For example, a 75 percent loan from an online lender with no ties to the Nashville area could be trumped by a 100 percent loan from a local, well-known lender that provides physician loans.

Boulder solar power finance firm lands big bucks (like $ 112M of them) (Denver Business Journal) Rated: A

Boulder-based Wunder Capital, which lends money for commercial-scale solar power projects, said Wednesday it’s raised $112 million in equity and debt financing to grow the company.

The Series B financing round was led by New York City investment firm Cyrus Capital Partners, which manages $4 billion in investments. Existing investors also were involved in the round, including Techstars Ventures which led the company’s Series A round of funding in March 2016.

United Kingdom

£80m lent through Funding Circle Isa (Bridging & Commercial) Rated: AAA

Funding Circle has announced that approximately £80m has already been lent to thousands of businesses through its Innovative Finance Isa (IFIsa).

The Isa offers an estimated tax-free projected return of 7.2% and is a flexi Isa which allows investors to take money out of their account and put it back later in the tax year without losing their tax-free entitlement.

There is an initial minimum investment of £1,000 and investors will be able to transfer exiting Isas into the Funding Circle Isa later this year.

 

 

P2PFA: UK Peer to Peer Lending Industry Nears £9 Billion in Total Lending (Crowdfund Insider) Rated: AAA

The UK Peer to Peer Finance Association (P2PFA) has released Q1 data for its member platforms. According to the industry association, P2P lending is nearing £9 billion in loan originations having provided finance for approximately 50,000 business and 221,000 individuals. Total investors stand at around 150,000.

 

Source: Crowdfund Insider

How Starling Bank is taking cues from Amazon (Tearsheet) Rated: AAA

And digital-only banks with a license, like Monzo, Starling, Tandem and OakNorth, are growing market share.

What are the biggest problems with banking today?
Banking as it is today sucks — it’s hard to easily manage account openings, and [until recently] to send payments to friends. That’s why Venmo has been so successful, but this should be a thing banks do.  You shouldn’t have to read an FAQ to use the mobile app or set up a bill pay.

LendInvest Calls Upon UK Government to Improve Finance Access for Property SMEs (Crowdfund Insider) Rated: A

LendInvest reported that in a new report entitled Putting Finance First: the alternative route to funding Britain’s SME housebuilders, the online lender recognizes that while the government is trying to help improve the outlook for property SMEs, but then argues that not enough is being done to put rhetoric into action. The report focuses on three proposed initiatives that combine existing government-backed funding mechanisms with the experience and expertise of alternative lenders, like LendInvest, to speed up and increase the supply of finance to property SME businesses:

  • Homes England: Should deploy its £2.5 billion Home Building Fund through funding lines agreed with alternative lenders.
  • Local authorities: Should co-invest with alternative lenders in local developments, utilizing the Public Works Loan Board mechanism to provide discounted capital for SMEs.
  • The British Business Bank: Should appoint more alternative lenders to use the ENABLE Guarantee programme to underwrite property investment and development loans.

Malta-Based Decentralized Ventures to Spearhead Crypto Island’s Blockchain Services Provision (Blockchain News) Rated: B

Blockchain services provider Decentralized Ventures on Tuesday announced its official launch, with the objective of bolstering Malta’s crypto communities.

A partnership between initial coin offering (ICO) specialist TokenKey and token research and Blockchain consultancy Strategic Coin Inc., Decentralised Ventures is designed to support the Maltese government’s plans to create the world’s first fully regulated market for ICOs, DLT and virtual currencies, a statement said.

 

JustUs launches IFIsa to support ethical housing scheme (Bridging & Commercial) Rated: B

The IFIsa aims to raise £367,500 and will offer a return of up to 6.5% to investors.

JustUs will provide a bridging loan to Mersten for up to 50% of the property’s value to fund the renovation.

China

 

China Construction Bank opens robot-run branch (Fintech Futures) Rated: AAA

China Construction Bank (CCB) has opened a branch in Shanghai run solely on the power of pure technology.

According to the South China Morning Post (SCMP), the branch has no human staff and instead uses facial recognition, artificial intelligence (AI) and virtual reality (VR) to provide the bank services.

SCMP says it is hyped as a first for the Chinese banking industry, and the Beijing-based bank says it has installed 1,600 smart machines at its 360 branches in the city to ramp up its appeal to tech-savvy customers and trim staff costs.

CreditEase’s Hou outlines allocation outlook (Asian Investor) Rated: A

Beijing-based CreditEase, a peer-to-peer P2P lending platform and wealth management platform, has been busy building its roster of mutual fund, trust and insurance products.

European Union

iZettle squares up to Square with e-commerce platform launch (Fintech Futures) Rated: A

Swedish mobile payments firm iZettle is taking on Square with the launch of its new e-commerce platform that will allow merchants to sell in-store and online.

Called iZettle E-commerce, it lets small business owners set up and customise a new webshop or start selling across channels online, including social media, blogs and existing websites.

International

Digital banking’s key trends: Demand, competition, mobile on the rise (American Banker) Rated: AAA

Two global studies — a study of 150,000 consumers polled by Gallup for the World Bank for its Global Findex Database, and a survey of 5,200 consumers by the tech giant Oracle — found complementary trends in the use and adoption of digital banking.

For example, 60% of customers globally want to open a bank account online, according to Oracle’s survey.

Many are already there: Sixty-seven percent of customers globally are on digital banking platforms now, according to Oracle; the World Bank reports that 515 million customers worldwide opened a banking account through a mobile money provider in the last three years.

 

More Than Half Of Cards Issued Globally Were EMV-Enabled (PYMNTS) Rated: A

Data from EMVCo shows that 54.6 percent of all cards issued globally by the end of 2017 were EMV-enabled.

In addition, the number of EMV payment cards in circulation around the world increased by 1 billion over the previous 12 months — to a total of 7.1 billion.

“Both EMV chip card issuance and EMV chip transactions surpassing 50 percent globally is testament to the increasing maturity of the worldwide infrastructure, and [is] a significant milestone for the payments community,” EMVCo Executive Committee Chair Jack Pan commented.

 

Australia

Australia’s top bank says it charged dead clients for advice (CNN) Rated: AAA

Australia’s top bank has admitted to charging fees to clients it knew had died years previously.

Commonwealth Bank of Australia (CBAUF) told a government inquiry Thursday that the practice of billing deceased customers for financial advice stretched back years. In one instance, an adviser at the bank’s financial planning business was collecting fees from a client more than a decade after they had died.

The revelations emerged as part of a Royal Commission, or public inquiry, into malpractice in Australia’s financial services industry.

One winner from the banking royal commission (The Australian) Rated: B

The peer-to-peer lending space may be a major beneficiary of the poor practice scandals coming out of the Royal Commission, according to one non-bank lender.

ME hikes home loan interest rates: does this mark the end of super low rates? (MOZO) Rated: A

Online lender ME has announced it is increasing home loan interest rates across its variable mortgage range effective today, citing increased funding costs as the reason – and it’s not the first to do so.

ME hiked its standard variable rate for existing owner-occupier principal-and-interest borrowers with an 80% LVR by 6 basis points, bringing it to 5.09% p.a. (5.11% comparison rate).

Existing investor principal-and-interest borrowers were hit with a bigger increase of 11 basis points, while interest-only borrowers saw the biggest increase of 16 basis points.

Source: MOZO
Asia

 

High investor FOMO about P2P lending in SE Asia: Funding Societies co-founder Kelvin Teo (Deal Street Asia) Rated: AAA

Your Series B round is likely the largest for a P2P lender in the region. Is that a measure of how strong the investor interest in this space and the potential for the sector in Southeast Asia?

P2P lending is a promising sector in Southeast Asia. We see strong investor interest, but perhaps too much, especially for emerging markets like Indonesia where the fear-of-missing-out (FOMO) is high. SME lending is a technical and a very localized business, and Southeast Asia apparently is not easily understood. We did not realize the significance of them until we started speaking to investors for Series B. In all candour, it was slightly painful to interact with investors who do not know Southeast Asia and/ or lending business.

Is $25 million the amount that you were looking to raise? 

We have a trust-based relationship with our shareholders. Our early discussion with our Series A lead investor Sequoia was to raise US$ 10M – 15M.

Alternative investment opportunities in Việt Nam (Viet Nam News) Rated: A

Access to and use of formal financial services is low in Việt Nam compared with other countries in the region, with only 31 per cent of all adults having formal bank accounts in 2016, according to the World Bank.

In 2016, 14.6 per cent of Vietnamese had saved money with a formal financial institution, 18.4 per cent had a loan with a formal financial institution, and only 26.5 per cent had access to a debit card. Interestingly, about 30 per cent of adults borrowed from friends or family in 2016 in Việt Nam, against 18.4 per cent who have borrowed from a financial institution.

Latin America

Creditas investment a Brazilian first for Santander InnoVentures (Bankless Times) Rated: AAA

Santander InnoVentures, the fintech venture capital fund of Santander Group, announced today an investment in the startup Creditas, a Brazilian secured lending platform. This is Santander InnoVentures’ first investment in Brazil and second in Latin America.

Creditas also announced today an increase of its Series-C funding round to $55 million with the addition of Santander InnoVentures and Amadeus Capital Partners. The round was led by Vostok Emerging Finance (VEF), a company focused on early and growth stage fintech companies across emerging and frontier markets, based in Sweden. Current investors also participated in the round, including Kaszek Ventures, Quona Capital, QED Investors, International Finance Corporation and Naspers Fintech.

Authors:

George Popescu
Allen Taylor

Thursday December 21 2017, Daily News Digest

PBC interest rates

News Comments Today’s main news: SoftBank leads $120M funding round for Lemonade. Shareholders file class action against Qudian. RateSetter looks to cautious growth in car financing. LoanBook rakes in 650K GBP on Crowdcube. Prospa planning a 2018 IPO. Today’s main analysis: Muddy Waters goes cold on China Internet Nationwide Financial Services Inc. (CIFS). Today’s thought-provoking articles: Two big banks […]

PBC interest rates

News Comments

United States

United Kingdom

China

European Union

Australia

India

Asia

Canada

News Summary

United States

SoftBank leads a $ 120 million round for insurance startup Lemonade (TechCrunch), Rated: AAA

The SoftBank Group has finally made a good tech investment around real estate.

After investing $4.4 billion in what is essentially a bespoke office space rental business (WeWork) and another $450 million in Zillow for rich people (Compass), the gargantuan Japanese tech investor is leading a $120 million round of funding for Lemonade, a startup providing renters and homeowners insurance.

Additional investors in the round include previous backers Alphabet’s investment firm, GV, General Catalyst and Sequoia Capital.

Shareholder Class Action Filed Against Qudian Inc. – QD (GuruFocus), Rated: AAA

The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Qudian Inc. (NYSE: QD) (“Qudian” or the “Company) on behalf of investors who purchased the Company’s securities between October 18, 2017 and November 20, 2017, inclusive (the “Class Period”).

Qudian shareholders may, no later than February 12, 2018, petition the Court to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member.

Two Big Banks Set to Launch Their Own Online Lending Platforms (Lend Academy), Rated: AAA

A little over a year ago Goldman Sachs launched their consumer lending platform Marcus as part of a digital strategy to move into the retail banking segment. They have since grown faster than any online lending platform with originations approaching $2 billion. Goldman Sachs now believes revenues from online loans will equal that of trading in the near future.

U.K. based Barclays has been increasing their footprint in the U.S. the last few years through the Barclaycard brand. They are now one of the top 10 credit card issuers in the US.  News broke last month that Barclays would be launching a digital bank in 2018 and rebranding from Barclaycard to Barclays in the US.

Pittsburgh based PNC Financial Services Group is one of the top 10 largest banks in the US with $371 billion in assets. They are looking to launch their online consumer lending product in new branches and through their mobile wallet product.

From On Fire To Under Fire: Marketplace Lending Enters 2018 Taking On Flak (ValueWalk), Rated: A

After a meteoric rise, marketplace lending has had its share of challenges and scrutiny, but the future should still be bright for such an industry on the forward edge of technology and consumer needs. Yet marketplace lending seems to be ending 2017 under an unwarranted attack from regulators and commentators determined to find similarities in marketplace lending to the subprime mortgage market in the years leading up to the financial crisis.

EquityMultiple CEO Charles Clinton Highlights Real Estate Opportunities & Disruption, Predictions for 2018 (Crowdfund Insider), Rated: A

CEO Charles Clinton and CIO Marious Sjulsen co-founded EquityMultiple with a shared vision of transforming real estate investing through tech and by providing new access to private transactions while streamlining the investment process.

Erin: Please share EquityMultiple’s latest stats.

Charles: We’ve funded 32 investments to date and are expecting to hit around 100% year-over-year growth in dollars invested. For investments that have fully repaid or are currently cash-flowing to investors, we’re averaging around a net 9% annualized dividend.

Erin: What sets EquityMultiple apart from its industry peers? How will EquityMultiple continue to differentiate itself?

Charles: We’ve taken a different path from most of our direct competitors and I suspect that will continue. This started at the very beginning – rather than look for venture capital financing, we sought out a real estate firm to partner with and found that in Mission Capital, a national capital markets firm that has done over $70 billion of business in its 15-year history.

Erin: Earlier this year you stated that individuals made up 100% of EquityMultiple’s investments. Has institutional money entered into this investment flow?  Why or why not? What are your methods of tapping into new investors?

Charles: We are still 100% focused on individual investors by design. We feel that individual investors are the customers that we provide the most value to. For institutional investors, there often is no real accessibility issue for getting into commercial real estate. Individual investors, on the other hand, are significantly under-allocated into real estate by comparison.

Krawcheck expands Ellevest robo to three service levels with more human advice (InvestmentNews), Rated: A

Investors can access the robo-adviser by itself for 25 basis points (formerly 50 basis points), which includes algorithmic portfolio construction, tax minimization strategies, and now support from human advisers via email and text.

For 50 basis points and an account minimum of $50,000, investors can access Ellevest Premium, which includes the technology platform as well as personalized goals-based planning from an adviser with certified financial planner credentials.

Why Employers Need To Help Workers Deal With Income Volatility (Forbes), Rated: A

Roughly a quarter of American families suffer a major disruption to their income each year, according to the Urban Institute. Nearly one in five of those families suffer an income drop of 50% or more: a potentially catastrophic shock for low-income families.

But it’s not just these one-time shocks that affect families’ ability to plan and save — it’s the month-to-month fluctuations, as well. The JP Morgan Chase Institute foundthat, between 2012 and 2015, 55% of the bank’s customers regularly experienced more than a 30% change in income — up or down — from one month to the next.

BankMobile deploys AI, alternative data to lend to FICO-poor students (American Banker), Rated: A

BankMobile has become the first bank to start using online lending software developed by Upstart, which is designed to use artificial intelligence and alternative data to determine the creditworthiness of consumers with thin or no credit files.

BankMobile, the digital-only subsidiary of Customers Bank in Wyomissing, Pa., which is due to be spun off and merged with Flagship Community Bank in mid-2018, is planning to use the software to offer its first credit product to the students it reaches through relationships with 800 universities.

 

Merrill Lynch Fined $ 1.4M Over Supervisory Failures (Financial Advisor IQ), Rated: A

Finra has fined Merrill Lynch $1.4 million for alleged supervisory failures related to extended settlement transactions, the industry’s self-regulator says in a press release.

From April 2013 through June 2015, the wirehouse allegedly didn’t collect enough margin to offset credit, market and exposure risk presented by the longer time period between trades and settlements inherent in such trades, Finra says.

‘Banks can’t attract the talent they want or need’ (Tearsheet), Rated: A

Banks have always proclaimed themselves as technology companies with banking licenses. But culturally, banks are still banks: conservative. Innovation teams can only innovate so much before someone in legal or compliance tells them no; they can only move so fast before someone tells them to slow down.

In this installment of Confessions, in which we trade anonymity in exchange for honesty, we spoke with an analyst at a startup attached to a large bank about internal innovation, attracting strong talent and why alternative bank service companies should get serious about becoming or partnering with a bank.

10 who had a rough year in 2017 (American Banker), Rated: A

Move over Wells Fargo, another prominent financial firm has taken your place as the poster child for bad behavior.

Equifax, the credit reporting agency whose primary responsibility is to protect consumers’ personal information, became public enemy No. 1 this year when it revealed that thieves hacked into its database and stole the personal information — birth dates, credit card data, Social Security numbers — of some 145 million consumers.

Runway Growth Credit Fund Successfully Closes $ 275 Million Equity Offering with Increased Investment from Oaktree Funds (BusinessWire), Rated: A

Runway Growth Credit Fund Inc. (“Runway Growth Credit”), a provider of term debt to fast-growing companies seeking an alternative to raising equity, today announced the successful closing of its $275 million initial equity capital raise with an increased commitment to $139 million from OCM Growth Holdings, LLC, an entity owned by certain investment funds managed by Oaktree Capital Management, L.P. (“Oaktree”), along with commitments from other investors.

Investors Commit 0 Million to tZERO ICO (Coindesk), Rated: A

As reported by CoinDesk, the first leg of the sale – in which the firm is selling Simple Agreements for Future Equity (SAFEs) that will later be redeemed for tokens by accredited investors – began yesterday, albeit a bit laterthan planned. Hiccups aside, Byrne told CoinDesk the sale ultimately attracted a big crowd – some 2,000 accredited investors.

As such, he indicated the company may move to shorten the initial two-month timeframe for the token sale.

Some of the offers, he said, were as high as $5 million or more for single token allocations.

OCC’s Otting sees future for fintech charter, CRA reform (American Banker), Rated: A

Comptroller of the Currency Joseph Otting said in a press conference Wednesday morning that there is a place in the banking world for some kind of fintech charter, though the exact parameters of such a charter are still unclear and have to be worked out.

“I’m not sure what it looks like, and how it’s funded, but I do think there’s a space there that a technology solution can solve,” Otting said when asked whether he sees a future for the Office of the Comptroller of the Currency’s nascent fintech charter.

BLACKSTONE LOOKS AT THE SECONDARY PRIVATE EQUITY MARKET (All About Alpha), Rated: A

An October paper put out by Strategic Partners Fund Solutions, of Blackstone, argues that (despite risks and drawbacks) investing in the secondary private equity market  can still be a smart play, offering “accelerated returns with lower volatility, lower loss rates, and greater downside protection” than the primary market.

How the digital community is supporting small business (Rapid Growth Media), Rated: A

The 2016 Small Business Credit Survey, published by the Federal Reserve Bank of New York, reports that startups are more likely than their mature counterparts to be undergoing growth and planning to add jobs. The report shows 70 percent of startup applicants are in need of funding to support this growth, versus 60 percent of mature applicants. Additionally, in 2016, 52 percent of startups applied for financing.

The Credit Survey highlights that only “31 percent of startup applicants were approved for the full amount of financing sought”.

Debt crowdfunding: Peer-to-Peer lending

Lending Tree was a revolutionary option for individuals to secure financing when they simply wanted to compare options or if they may not have been bankable. Kiva, for example, allows lenders to contribute small amounts, sometimes as little as $25, to help fund requests.

As of October 2017, Kiva reports funding over 1M loans resulting in $1 billion being lent.

Equity crowdfunding

Now, instead of searching for affluent individuals looking to invest in a business, entrepreneurs can turn to sites like MicroVentures. MicroVentures is a public, online venture capital investment bank. Investors have the opportunity to invest as little as $100, which opens up the market to a much larger pool of potential investors. This option is best suited for established companies with strong historical performance and larger financial needs. Since their launch in 2011, MicroVentures reports facilitating over 160 investments, resulting in over $100M in capital investment to date.

Mayor Kasim Reed Announces Bank on Atlanta Initiative (AJC.com), Rated: B

Bank on Atlanta, a financial access program that will focus on providing free or low-cost banking products, along with financial education and financial counseling, to unbanked and underbanked residents in the city of Atlanta has been created.

Research shows that relying on alternative financial service providers such as check-cashing or payday lending establishments makes it hard for residents to rise out of poverty in our city.

9 Holiday Gift Cards That Give You Something for Nothing (TheStreet), Rated: A

Online student loan marketplace LendEDU.com studied the most sought-after gift cards and listed them in descending order: Amazon (AMZN – Get Report) , Walmart (WMT – Get Report) , Target (TGT – Get Report, Best Buy (BBY – Get Report) , and Subway. But these cards sold for only 2% to 5% less than face value, compared with 1-800-Flowers (FLWS – Get Report) , H&M or Dress Barn gift cards which offered, on average, 30% off face value on their sites. Even Dunkin’ Donuts (DNKN – Get Report) and Godiva mark down their gift cards by 25%.

RealtyMogul Hires New Chief People Officer (BusinessWire), Rated: B

RealtyMogul, a unique commercial real estate private markets investing platform, today announced the addition of Soley Van Lokeren as Chief People Officer.

Credit Karma adds Gannesh Bharadhwaj as General Manager, Credit Cards (Credit Karma), Rated: B

Credit Karma, the leading personal finance technology company in North America, today announced it has appointed Gannesh Bharadhwaj as general manager of credit cards. Previously president of Renew Financial, Bharadhwaj brings a strong background in financial institutions as Credit Karma remains focused on using innovative technology to bridge the gap between banks and consumers.

The Small Business Benefits of Being Charitable (Business2Community), Rated: B

Entrepreneurs can make charity a part of their approach to business, and in a variety of ways. A survey by Funding Circle revealed some interesting figures, as reported by Joshua Sophy last December for smallbiztrends.com.

  • Of 1,400 small business owners polled, 52 percent said they were donating or had already donated to charity.
  • 46 percent planned to donate “up to $1,000.”
  • 44 percent preferred to donate cash.
United Kingdom

RateSetter plans ‘cautious growth’ in car finance market (P2P Finance News), Rated: AAA

RATESETTER is planning to grow its motor finance division to take advantage of the huge opportunities it sees in the market.

The peer-to-peer lender entered the consumer hire purchase industry in May when it acquired Vehicle Credit Limited out of its parent company’s administration as part of its wholesale lending “interventions”. Vehicle Credit Limited has now been integrated into the group as part of RateSetter Motor Finance.

Chip, the chatbot savings app, raises over £1M in crowdfunding with plans to apply for a banking license (TechCrunch), Rated: A

Chip, the chatbot app that plugs into your bank account and lets you automatically save for a rainy day, has raised nearly £1.1 million on equity crowdfunding platform Crowdcube.

The fund raise, which is part of a larger £2.4 million funding round, forms part of plans for the London-based startup to apply for a banking license so that it has more flexibility regarding the kinds of products it can offer in the future. The app currently claims 30,000 active users “who are collectively saving millions a month”.

China

Muddy Waters Is Short China Internet Nationwide Fncl Srvcs Inc (CIFS) (ValueWalk), Rated: AAA

We conclude that China Internet Financial Services Inc. (NASDAQ:CIFS) is a King Zero – just another worthless China fraud, says Muddy Waters Research.

  • Every one of the purported borrowers to which CIFS disclosed having made loans (accounting for 84.2% of loan balances) appears to be a sham counterparty.  (The purported borrowers of the remaining 15.8% of reported loan balances were not disclosed; however, we strongly suspect that most – if not all – of these loans and associated income are also fabrications.)
  • CIFS’s recently announced “big data” company purchase also appears to be a lie.
  • 47.3% of CIFS’s reported 2016 net income purportedly was generated by its Kashgar subsidiary; however, that subsidiary existed for only two days in 2016.
  • CIFS is too good to be true – claiming to turn a seeming commoditized business model into an overnight juggernaut with purported gross margins over 97% and net margins over 70%.
Source: ValueWalk

Read “The Farce Awakens: CIFS” in full here.

China Ripe for Auto Finance Boom as Consumer Penetration Rate Rises (Auto Finance News), Rated: AAA

Since 2009, China has surpassed the United States as the largest market for new-vehicle sales, according to Deloitte Consulting LLC. And now, auto finance is starting to catch up.

For many years, the Chinese automotive market has been propped up by government incentives like tax breaks, which encouraged customers to purchase cars. So far, this incentive has led to more than 2 million cars being sold a month, with growth running up 15% last year, the Wall Street Journal reported in March. But as the tax breaks are expected to wind down, auto lenders have a greater opportunity to step in and capture marketshare in China, where penetration rates remain lower than other developed nations.

In the U.S., for instance, 84% of new cars in the U.S. were financed in 2014 compared with 20% in China, according to Experian. The Chinese auto finance rate rose to 38% in 2016, and is expected to rise steadily in the next few years; reaching an estimated 55% in 2021, according to ReportLinker.

Debtors in China are placed on a blacklist that prohibits them from flying, buying train tickets, and staying at luxury hotels (Business Insider), Rated: A

China maintains a public blacklist of debtors that effectively restricts their movements and their spending habits.

The country’s highest court publishes the names and ID numbers of “dishonest people” on its website and restricts those people from flying domestically, using high-speed trains, or enrolling their children at expensive private schools.

Defaulters are also prevented from staying at hotels with three-stars or more. They also face tougher exams if they want to join the civil service, and are charged higher fees for booking cars. The bans work by linking to a person’s ID number. Some people used their passport when travelling to circumvent the ban, but that loophole now appears to be closed.

European Union

Spanish Marketplace Lending Platform LoanBook Secures £650,000 Funding Target on Crowdcube (Crowdfund Insider), Rated: AAA

LoanBook, a Spanish marketplace lending platform, has successfully secured its initial £650,000 funding target from more than 200 investors through equity crowdfunding platform Crowdcube. Founded in 2013, LoanBook claims to be Spain’s largest marketplace lending platform, with a 4-year track record of working capital lending to Spanish SMEs and 40% market share.

Two Additional Ways to Improve API Security for Fintech startups (Finextra), Rate: AAA

It’s simple: the probability of being under cyber attack is 100%.

With high probability and high impact, the risk is very high that API’s in the PSD2 era will enable a New Normal in Bank Robberies. Not IF, rather WHEN and WHO.

1. Consider new AI-based approaches in vulnerability scanning.

2. Know what’s under the hood

Think of the Infineon-developed RSA Library version v1.02.013, which lead to Estonia having to reissue over 750,000 certificates, part of their National ID scheme. Or the 2014 GnuTLC bugwhich allowed a Man-in-the-Middle attack due wrong behavior during a TLS handshake.

My advice is to keep track of all dependencies and track vulnerabilities in all underlying components. OWASP has a project calledDependency-Check aimed to do just that.

5 hugely successful Nordic entrepreneurs share their advice to young people (Business Insider), Rated: A

iZettle CEO Jacob de Geer says you should team up with peers – and experiment.

“Apart from getting the business started, is to experiment with whatever idea you have. Most of your trials will fail, but one in 100 will work. If you view problem solving as a way of increasing the value of the company that you are building, then you are off to a good start.”

Klarna co-founder Sebastian Siemiatkowski thinks it’s important to have a holistic approach to problem solving.

When I advise young entrepreneurs, I tell them, “It’s not about figuring out the best business ideas, and it’s not about solving problems theoretically, but it’s about testing your ideas. It’s about coming up with an idea, and then trying it and learning from it.”

A small fintech company surges 250% after launching a blockchain-focused business unit (Business Insider), Rated: A

Australia

Online lender Prospa joins the 2018 IPO pipeline (Financial Review), Rated: AAA

Investment bankers lining up for a stronger 2018 pipeline of initial public offerings have online business lender Prospa in their sights.

Street Talk understands a handful of banks have pitched their wares to Prospa’s chief executives Greg Moshal and Beau Bertoli in recent weeks ahead of a planned run at the local bourse some time next year.

India

“Five best alternative investment strategies to consider in 2018” (Business Today), Rated: AAA

Alternative investing is as much a mindset, as it is about specific investments. Here are some alternative investments approaches culled from our members around the world that are applicable to any investment decisions.

Invest in markets or assets that your analysis leads you to believe will do well; don’t invest in a product just because it’s likely to (or, worse, has in the past) “outperform the market”.

Understand that returns are one-dimensional, risk is multi-dimensional

You should constantly revisit your assumptions of the return drivers of the investment (much more so than its price performance), in case they change and you need to rethink your investment.

When we’re asked to define alternatives, we often end up saying “well, anything that’s not traditional”. Actually that’s not quite such a lame definition; alternative investment practitioners know that the best opportunities are usually those that are yet well known or exploited, and hence the field of “alternative investment” is one populated by investment ideas that may not be immediately obvious.

Diversification is the only free lunch – make sure you are diversified

Alternative asset classes: P2P lending emerges as viable option in India (Financial Express), Rated: A

India has a unique problem of too much money chasing too few customers. So at one end, we have traditional salaried class getting loan offers and at the other end, people are left at the mercy of hawkish money lenders ever-more resembling Shakespeare’s Shylock. Clearly, P2P lending and borrowing is the disruption that was waiting to happen as banks and NBFCs have successfully struggled at twin accounts of making credit affordable and accessible in a credit-hungry nation.

Regulations helped fintech mature in 2017; yet 2018 may prove challenging for cos to navigate (Economic Times), Rated: A

If 2016 saw demonetisation change India’s fintech ecosystem forever, this year will be remembered for the Reserve Bank of India’s (RBI) multiple regulations aimed at organising the sector. Recognition of peer-to-peer lending startups, revised guidelines for digital wallets, finalising charges for digital payments—the second half of the year saw it all, setting the template for a more mature yet challenging 2018.

Meet The Top 20 Finalists Of The 5th Edition Of Wharton India Startup Challenge (Inc42), Rated: B

The 22nd Wharton India Economic Forum (WIEF) has announced the finalists of the Yes Bank – Wharton India Startup challenge.

Perpule: Perpule’s 1Pay is a self -checkout app for express checkouts and easy payments in Perpule’s partnered stores like Hypercity, Spar etc.

Capzest: Capzest is a digital lending platform focused on providing unsecured credit to individuals for income generation purposes. It secures partnerships with income generation service platforms and provides short term capital to their various stakeholders. It was founded in October 2015 in Mumbai by Rohan Adlakha andSayantan Sarkar.

Luharia Technologies Pvt. Ltd: Based in Hyderabad, Luharia Technologies owns and operates peer-to-peer platforms for businesses and individuals. Founded by ISB alumni Keerthi Kumar Jain, Luharia’s flagship solution is Vote4Edu, which is an online peer-to-peer lending platform for K-12 education loans. The company also runs Vote4Cash, a P2P marketplace where borrowers can avail cash loans. Machine Bank, an infrastructure ecommerce platform, and P2P lending platform SMEBank are also owned by Luharia Group.

Asia

Cyberattack brings a cryptocurrency exchange to its knees (Business Insider), Rated: A

A South Korea-based cryptocurrency exchange was brought to its knees by a cybersecurity attack.

Yapian, the operator of crypto-exchange Youbit, halted trading of cryptocurrencies on its venue Tuesday and filed for bankruptcy after a hack, according to reporting by The Wall Street Journal.

The Journal reported the exchange had 17% of its digital currency holdings stolen.

How to get a personal loan without a credit score? (Asianet Newsable), Rated: B

Your credit score reflects how well you have treated your credit in the past. It is one of the most important factors that lenders consider while evaluating a loan or credit card application. But what if you don’t have a credit score?

  1. NBFCs

If your bank has rejected your personal loan application, approach NBFCs. Since they usually target customers with low or no credit score, they are more flexible with credit scores than banks.

  1. Peer to Peer Lending

Since P2P platforms connect borrowers and investors online, they run with lower overheads and resultantly offer services cheaper than what traditional financial institutions have to offer. There are over 40 peer-to-peer lending platforms in India that are helping a large section of people who have been failed to qualify for loans from banks.

Canada

RATEHUB REPORTS GENERATIONAL DIVIDE WHEN IT COMES TO TRUST IN FINTECH (Betakit), Rated: A

A RateHub report examining FinTech trends in 2017 found that there is a generational divide when it comes to trust in the emerging technology.

Nearly twice as many millennials (44 percent) and Generation Xers (42 percent) said they trust robo-advisors, compared to baby boomers (23 percent).

Forty-seven percent of millennials and forty-eight percent of Gen Xers trust marketplace lenders, compared to 23 percent of boomers.

Online banking and contactless payments were the two most trusted FinTech offerings this year, capturing the trust of 85 percent and 62 percent of Canadians on average.

Access the full report here.

Authors:

George Popescu
Allen Taylor

Thursday December 14 2017, Daily News Digest

online lender delinquency rates

News Comments Today’s main news: LexinFintech relaxes on IPO funding goal. Welendus exceeds Seedrs funding target. LendingTree provides 2018 guidance prior to Investor Day. Yirendai invests in Lion Rock. Mercer delivers financial advice with AI through Facebook Messenger. Today’s main analysis: Online lenders test the faith of investors. Today’s thought-provoking articles: Why Google, Amazon scare BlackRock, Fidelity. A new chapter […]

online lender delinquency rates

News Comments

United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Asia

South America

News Summary

United States

Why Google and Amazon Keep Fidelity and BlackRock Up at Night (Bloomberg), Rated: AAA

“Alexa…will I meet my retirement goal?”

“You are not on track to meet your retirement goal,” replies Amazon.com Inc.’s voice-activated digital assistant, with not a bit of sugar-coating. Then she suggests turning over $76 a month to Fidelity Investments and its advisers.

This won’t actually happen if you try it on your Amazon Alexa device at home. It’s a demonstration put on by EMoney Advisor LLC, a company owned by Fidelity, in its offices in Radnor, Pa. Amazon provides software for third-party developers to experiment with new functions. Fidelity is trying to find ways to apply artificial intelligence, computer algorithms, and voice-­recognition software to the hidebound world of money management and investing.

Earlier this year, Boston-based Acadian Asset Management LLC struck a deal so its portfolio managers could use Microsoft Corp.’s Bing Predicts, which makes forecasts using search and social media data, to help pick stocks; that agreement later ended.

BlackRock, led by chief executive officer Larry Fink, in recent years has been buying stakes in other companies, particularly technology firms. Through these purchases, the company is pushing into new lines of business.

Fidelity bought EMoney in 2015. It sells software to investment advisers that’s designed to make it easier to interact with their customers on budgeting for weddings, college, or retirement.

Online lending platforms test investors’ faith (Financial Times), Rated: AAA

Tianqiao Chen still wants to be part of Lending Club. Last week, while shares in America’s biggest listed online lender were tumbling after another cut to profit forecasts, the chief executive of Shanda Group bought 4m more of them, further cementing his position as the company’s biggest shareholder.

Many operators are feeling the effects of a big push for market share in the latter half of 2015 and early months of 2016, says David Snitkof, chief analytics officer at Orchard. As the platforms rushed to offer new loans, credit quality suffered, and loans originated during that period are among the worst performers, with loss rates well ahead of projections.

Across the sector, valuations have fallen. Earnest, a San Francisco-based student loans specialist, sold itself in October to Navient, the loan-servicing company, for $155m, or about 40 per cent of its peak valuation. Personal lender Prosper, once a “unicorn”, saw its pricetag drop from a peak $1.9bn to $550m in a fundraising last month.

That meant platforms had to spend heavily to bring compliance and controls systems up to scratch. Lending Club’s latest quarterly filing, for example, shows it had $1.21 of operating expenses for every dollar of fee income over the first nine months — up from $1.03 at the same point two years ago.

LendingTree Introduces 2018 Guidance Ahead Of Investor Day (Business Insider), Rated: AAA

Business Outlook – 2018

  • Revenue is anticipated to be in the range of $770 – $790 million, representing growth of 27% – 30% over the high-end of full-year 2017 guidance of $608 million.
  • Variable Marketing Margin is anticipated to be $270 – $280 million.
  • Adjusted EBITDA is anticipated to be in the range of $145 – $150 million, up 28% – 33% over the high-end of full-year 2017 guidance of $113 million.

The Analyst and Investor event is being hosted in New York at the Nasdaq MarketSite in Times Square.  The presentation will begin promptly at 10:30 a.m. ET.  A live audiocast with accompanying slides will be made available on the company’s investor relations website at investors.lendingtree.com.

 

Does the ICO Open a New Chapter for RE Crowdfunding? (Lexology), Rated: AAA

An ICO is simply the initial public sale of a new type of digital “coins”, or “cryptocurrency”.

Judging from the prolific way these new cryptocurrency ICOs are popping up, like mushrooms after a spring rain, one might imagine any clever techie could spin one up at the kitchen table with little more than an internet connection and some well-caffeinated daring-do. Yes, ICOs are easier than crowdfunding, they have that special “blockchain” cachet going for them, and the “regulators talons” have not yet sunk deep.

In a real-life example, on September 29, 2017, the SEC filed a civil complaint in federal district court against ICO promoter Maksim Zaslavskiy and two companies run by Mr. Zaslavskiy. According to the complaint, between July and October Mr. Zaslavskiy and his companies raised at least $300,000 in an ICO touting a new cryptocurrency called “REcoin” — “the first ever cryptocurrency backed by real estate.” According to the SEC complaint, Mr. Zaslavskiy and his companies have been peddling unregistered securities. Furthermore, the complaint alleges, the companies never had any real operations even though Mr. Zaslavskiy told investors in REcoin they could expect sizeable returns from those company’s operations; the securities he sold weren’t backed by any real estate or other assets as he claimed they were; and no “REcoin” digital tokens ever actually existed.

ICOs and Crowdfunding

Circling back to the original crowdfunding thesis, we should also expect this disruptive new technology to begin surfacing in even more impactful nextgen “killer apps” for commercial real estate investment. That’s right, real estate crowdfunding may actually make a comeback by dint of being co-opted into the blockspace. New-age real estate crowdfunding ecosystems are already forming; for instance, the Real Estate Asset Ledger (“REAL”) is one application currently being talked up as a real estate crowdfunding network built on blockchain infrastructure.

The Rise of the ICO (Coinlist), Rated: AAA

Zeus CrowdFunding Earns Top-Ten Ranking in Real Estate Crowdfunding Industry (PR.com), Rated: B

Zeus CrowdFunding earned high marks recently from an independent ranking and reviews portal. The Real-Estate Crowdfunding Review named Zeus CrowdFunding the #7 real estate crowdfunding site on the Web based on its “incredible volume” and other impressive advantages.

The ranking also lauded Zeus CrowdFunding’s low default rate and semi-liquidity option and guarantee and called the company “one of the few platforms offering conservative loans below 65% LTV.”

To read The Real-Estate Crowdfunding Review’s ranking and review of Zeus CrowdFunding, visit

Open Banking Trends Shift to US Market (Lend Academy), Rated: A

Open Banking is set to launch in Europe next month. As banks and fintech firms rush to ensure compliance we wanted to explore the effects on the US fintech market. Recently the CFPB set forth data sharing guidelines for banks and fintech firms to share information. There has since been a number of articles in the news pointing to frustration among fintech companies as banks have not been forthcoming with data sharing.

The current process is clumsy and requires consumers to login many times across many different services. This has also been something banks have complained about to agencies like the CFPB. Services such as Personal Capital and Mint constantly ping bank accounts for information that users have open access to. Setting up a similar initiative in the US could not only allow for a better experience but will undoubtedly be safer for the banks and fintech firms.

LendingUSA Secures $ 60m Credit Facility (Finsmes), Rated: A

LendingUSA, a Sherman Oaks, CA-based point-of-need financing company, secured a $60m credit facility.

The funding was provided by CapitalSource, a division of Pacific Western Bank, and a provider of commercial lending and banking solutions.

 

U.S. Fintech Simility Secures $ 17.5 Million During Latest Funding Round Led By Accel With Participation From PayPal (Crowdfund Insider), Rated: A

Simility, a provider of machine learning–powered adaptive fraud prevention solution, today announced it has secured $17.5 million during its latest funding round. PayPal, Inc. also participated in the round as a new strategic investor along with existing investors The Valley Fund and Trinity Ventures.

First National Bank Plans Online SMB Lending Portal (PYMNTS), Rated: A

First National Bank and Trust Company is planning the launch of a digital small business lending portal and has tapped a partner to create the solution.

The financial institution (FI) said Tuesday (Dec. 12) that it is working with FinTech firm RCGILTNER Services to deploy the digital platform, which will launch in the first quarter of 2018.

Aspiration Taps $ 47 Million for Conscientious Banking (WSJ), Rated: A

Conscientious consumption and online banking services don’t typically go hand in hand. Andrei Cherny, co-founder and chief executive of Aspiration, aims to change that.

Aspiration, which offers online banking with optional fees and no penalties, provides its customers insights on how companies treat the environment and their employees, informing spending decisions.

Aspiration now boasts more than 200,000 account holders since launching in February 2015. On Tuesday, the Los Angeles company said it raised a $47 million Series B to further fuel its ambitions.

Will 2018 Be the Year of the Bank of Amazon? Experts Weigh In (Fortune), Rated: A

Payments

Matt Harris, Bain Capital Ventures: “SoftBank buys 20 percent of Stripe for $3 billion. PayPal continues to push itself down the path of being the leading financial services company for millennials and the mass market.” Dion Lisle, Capgemini SA: “‘Alexa, buy this’ or ‘Siri, I need an Uber, pay for it with my AmEx.’ Payments are going to be activated by that voice because that’s a great security method.”

Lending

Spencer Lazar, General Catalyst Partners: “Potential changes to the Consumer Financial Protection Bureau (CFPB) under the Trump Administration will likely turn back the clock on Obama-era regulations on non-bank lenders. This will be a boon to startup lenders, making it far easier to dole out capital. The fear is that rates could potentially become predatory.”

Amazon vs. JPMorgan

Andy Weissman, Union Square Ventures: “Some combination of Amazon, Google, Facebook, Apple, etc. will move deeper into online financing of small businesses.”

M&A

Tyler Sosin, Menlo Ventures: “Stripe and Adyen will merge, forming a $20 billion plus enterprise-value business and API-driven merchant processor.”

Funding

Charles Birnbaum, Bessemer Venture Partners: “Valuations in the alternative-lending space were overly optimistic in our opinion over the prior five years, but we do feel that the pendulum has likely swung back too far in the other direction following the recent pullback” leaving the sector ripe for potential funding or M&A.

Braviant Holdings Announces Launch of Chorus Credit Personal Loans (PR Newswire), Rated: A

Braviant Holdings, a leading fintech startup that offers analytics and technology-driven credit solutions for underserved Americans, is now offering personal loans up to $10,000 in Californiathrough its Chorus Credit online lending platform. Chorus will complement Braviant’s existing installment lending business, Balance Credit, by offering higher loan amounts at lower rates to the estimated 26% of California consumers who are underserved by traditional banks.

2017 YEAR-IN-REVIEW (Wunder Capital), Rated: A

In 2017, we increased our solar project pipeline by an order of magnitude. This is due in large part to more resources dedicated to pipeline development, advancements in our lending practice, and – at a macro level – a rapidly growing solar market and commercial sector.

Source: Wunder Capital

See the full report here.

Not “ripe,” says judge dismissing N.Y. fintech charter challenge (Banking Exchange), Rated: A

Yesterday U.S. District Judge Naomi Reice Buchwald of the Southern District of New York dismissed one of those lawsuits, Vullo v. Office of the Comptroller of the Currency. The judge dismissed the suit of the New York State Department of Financial Services, headed by Maria Vullo, against OCC on the grounds that the matter is not “ripe” for a decision on the legal ability of the Comptroller’s Office to issue such specialized charters.

Indeed, at the recent RegTech Enable conference in late November, OCC’s Beth Knickerbocker, chief innovation officer, characterized the proposal as “on hold.”

Why New York’s claim isn’t ripe

Judge Buchwald’s decision recapped the history of the proposal at length. Her decision came down to this sentence: “Claims are not ripe if they depend on the occurrence of contingent future event that may never occur at all.”

She pointed out that no injury would occur if OCC never issues such a charter to a fintech company.

Vanguard, the fund giant with nearly $ 5 trillion in assets, is using blockchain to underpin its mutual funds (Business Insider), Rated: A

Vanguard is moving to use blockchain to simplify how it updates index data underlying mutual funds, executives said on Monday, an important sign of confidence for the new financial technology.

Closely-held Vanguard, the top mutual fund firm with nearly $5 trillion under management, has successfully tested blockchain to automatically update data like the names and share prices of companies in index funds, processes that must currently be closely overseen by individuals, said Warren Pennington, a principal in Vanguard’s investment management group, in Pennsylvania.

UNOPPOSED MOTION FOR LEAVE TO FILE AMICIUS CURIAE BRIEF (U.S. District Court, D.C.), Rated: A

Further, to date, the parties have not raised an important argument that this Court should consider, namely, that restricting the President’s authority over the CFPB Director’s replacement only exacerbates the serious constitutional questions currently before the D.C. Circuit with respect to the CFPB’s structure. As CUNA explains, such questions could be avoided by adopting Defendants’ position in this case. Thus, CUNA’s perspective on the central issues in this case is invaluable and unrepresented by the parties.

Read the motion in full here.

(Coindesk), Rated: A

The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services to projects seek to use the blockchain funding model.

Specifically, accredited investors purchase Simple Agreements for Future Tokens (SAFTs), with the tokens set to be delivered at a later date. The mode has been used by a number of ICOs in recent months, and according to the page on MicroVentures, $915,000 has been raised from nine investors thus far in the new ICO.

Mastercard targets millennial clients with digital money management service (American Banker), Rated: B

The payments company today announced it is launching a new service called Assemble, which it calls a “prepaid innovation hub” designed to allow Mastercard partners or issuers to provide checking, budgeting, and payment features, as well as additional money management tools.

Longfin Corp. Becomes the First Public-listed FinTech Company Under Reg A+ on Nasdaq (GlobeNewswire), Rated: B

Longfin Corp. (NASDAQ: LFIN) announces that it will be traded on the Nasdaq market for the first day after its initial public offering (IPO) under Reg A+ closing on December 8, 2017.

U.S. News & World Report Names LendingPoint One of 2017’s Best Personal Loan Companies (BusinessWire), Rated: B

LendingPoint was named one of nation’s six best personal loan companies by U.S. News & World Report.

The media company evaluated personal loan companies in five key areas, reviewing data on eligibility, loan terms, fees, repayment methods and additional features. LendingPoint was cited as 2017’s top lender for people with fair to good credit, who have merit-based qualifications beyond FICO scores that make them worthy loan candidates.

Quesnay’s Female Founders in Tech Program Awards Goalsetter First Place (PR Newswire), Rated: B

Quesnay is pleased to announce that Goalsetter is the winner of the inaugural Female Founders in Tech, spotlighting female founders that positively impact the financial services and/or insurance technology industries.

The winners represented cutting-edge businesses that were also socially conscious:
– Goalsetter – Goalsetter is a goal-based savings and gifting platform, targeting millennials.
– Marinus Analytics – Marinus uses technologies to help identify and fight crimes like human trafficking and money laundering associated with it and other illicit activities
– LENDonate – LENDonate provides a marketplace lending platform for non-profits and supporters.

Approximately 100 women-led startups registered for the program with solutions ranging from artificial intelligence to blockchain to creative financial literacy and savings solutions. Seven finalists presented in New York to a panel of judges which included industry leaders from the sponsoring organizations: John HancockMassMutualRGAxSterling National BankTD Bank and Thomson Reuters.

 

United Kingdom

Welendus exceeds Seedrs fundraising target (P2P Finance News), Rated: AAA

WELENDUS, the peer-to-peer payday loan provider, has announced that its latest crowdfunding round on Seedrs has reached over 130 per cent of its target.

The firm had been seeking £150,000 but has already raised £197,991, according to Seedrs’ website.

Welendus said on Thursday that the funding round had attracted more than 250 investors.

Investec Provides U.K. Fintech With $ 67 Million for Online Loans (Bloomberg), Rated: A

London-based MarketInvoice, which arranges loans for small companies secured by accounts receivable, will handle the underwriting for Investec customers in the partnership, according to the bank’s website. Investec will provide 50 million pounds ($67 million) in the first year to fund the loans, Anil Stocker, the startup’s co-founder and chief executive officer, said in an interview.

The rise of the payday-style business loan (City A.M.),  Rated: A

British banks have been mired in criticism for not lending as much as they could.

Many businesses have meanwhile found that alternative lenders lack the data to provide products that are tailored to their needs.

Creative credit

Rate hikes typically result in an increase in lending profitability, and so the increase often stimulates the appetite to lend.

But an increased appetite to lend doesn’t always follow an increased ability to price risks on all loan applicants, and herein lays the risk: lenders become creative with the ways in which they entice borrowers and mitigate their risks.

These loans from mainstream lenders look like the payday loans that flooded the market in the height of the recession. They take minutes to apply for, turnaround is within one day, and command interest rates of up to 23 per cent APR – five times more than some personal loans.

Data shows increase in demand for alternative finance services (Londons School of Business Finance), Rated: A

The figures showed growth across the UK’s alternative finance market, including crowdfunding, invoice trading, and marketplace lending. The date found a year-on-year rise of 43 per cent in 2016 from £3.2 billion to £4.58 billion.

Business marketplace lending grew by 28.5 per cent from £881 million in 2015 to £1,232 million in 2016, placing it ahead of consumer marketplace lending, which previously had the biggest share.

LendInvest’s Latest Buy-to-Let Index Reveals: Manchester Tops Charts & Hull is Named Biggest Climber (Crowdfund Insider), Rated: A

On Wednesday, specialist property lender LendInvest released its latest LendInvest Buy-to-Let Index report, which ranks all 105 postcode areas around England and Wales based ona combination of four metrics, which are capital gains, transaction volumes, rental yields, and rental price growth.

The Index report’s key findings include:

  • Manchester, leader of the Northern Powerhouse, takes top spot
  • Leicester breaks into the Top 10 and Birmingham climbs 8 places from #18 to #11, signaling upward mobility in the Midlands markets
  • Hull marks itself as biggest climber for 2017, rising 93 places to #6
  • Enfield tumbles from Top 10 in February to Bottom 10 in December
Source: LendInvest

Download the full report here.

One in two advisers ‘fire’ clients with less than £50,000 (Money Observer), Rated: A

Those with pot sizes of less than £50,000 are increasingly being turned away by their financial adviser. In 2014 just under a quarter of clients were shown the door, whereas in 2017 this figure rose to 50 per cent.

Artificial intelligence is guiding venture capital to start-ups (Financial Times), Rated: A

Mr Bonanzinga thought he could combine internet data and machine learning to do a better job of ferreting out prospects. It took two years and £5m in investment for InReach Ventures to create the software, which has so far trawled through 95,000 European start-ups, picking out 2,000 that Mr Bonanzinga might be interested in.

The software determines this based on the people they are hiring, the products they are developing and the traffic on their website, among other things.

Tifosy: The sports crowdfunding platform that wants to help small teams grow and big teams reconnect with fans (City A.M.), Rated: B

The company has already partnered with 15 clubs in England and Italy, raising £2.9m from “fanfunders” for a variety of different projects.

So rather than owners selling equity stakes to unfamiliar outside investors, crowdfunding solutions such as mini-bonds or equity shares have emerged as alternative solutions to many sports franchises.

Top-flight rugby clubs Harlequins and Wasps raised £15m and £35m respectively by issuing their own bonds, while Surrey County Cricket club raised £5m in seven days in 2015.

China

Chinese Online Lender LexinFintech Shrinks U.S. IPO Fundraising Goal (WSJ), Rated: AAA

LexinFintech Holdings Ltd., a Chinese online lender that is planning to go public in the U.S., scaled back its fundraising ambitions after regulatory changes in China sparked a rout in shares of similar companies.

Lexin, a four-year-old company whose backers include Chinese online-retail giant JD.com Inc., is planning to raise $120 million in an initial public offering, according to a Wednesday filing with the Securities and Exchange Commission.

JD.com-backed micro lender slashes IPO by 70pc after China’s internet finance crackdown (SCMP), Rated: A

Lexin Fintech plans to offer 12 million American depositary shares at an indicative price range of US$9 to US$11 a share, raising as much as US$132 million, the company said in an updated filing on Thursday to the US Securities and Exchange Commission.

The fundraising value is sharply down from an originally planned US$500 million, as mentioned in the IPO prospectus issued last month.

Noncompliant P2P Lenders to Be Out by Mid-2018 (Caixin), Rated: AAA

Local banking regulators have until the end of June to weed out noncompliant peer-to-peer (P2P) lenders, according to a circular issued by a special working group led by the China Banking Regulatory Commission (CBRC).

Yirendai Announces Strategic Investment in Lion Rock (Business Insider), Rated: AAA

Yirendai Ltd. (NYSE: YRD) (“Yirendai” or the “Company”), a leading fintech company in China, announced today that it has made a strategic investment in Lion Rock, a comprehensive financial services platform that is focused on global asset allocation, through Lion Rock’s Series A financing of HK$50 million.

Lion Rock is headquartered in Hong Kong and offers a wide-variety of high-quality financial products, financial news, robo-advisory services as well as asset allocation services through its online platform.

Hong Kong Fintech Start-Up Lion Rock Raises $ 6.4M Led By Marathon Venture (China Money Network), Rated: A

Lion Rock FinTech Ltd., a Hong Kong-based fintech company, has raised HK$50 million (US$6.4 million) in an equity financing led by Marathon Venture Partners.

In addition, 9F Inc., the strategic investor who backed Lion Rock’s last round of financing, continued to invest in this round.

European Union

The Culture of p2p Investors Across the EU (FastInvest), Rated: AAA

FastInvest, a p2p fintech platform, recently studied data from over 8500 EU investors daily and came across a really unexpected finding. Highly specific traits and behaviors were driven by nationality over and above other individual factors when looking at big data.

From traditional investment metrics like risk aversion, to outside the box items like nationalistic tendencies and compulsive behaviors.  Across numerous areas, national cultural traits could be seen solely based on country to country locales.

Source: FastInvest

Poland
Even with the EU offering a bit of a more stable currency, only 1.76% of residents prefer to invest in Euro based currency loans.

Belgium
Only 2.20% of Belgian investors choose PLN (Polish) currency based loans as opposed to their own Euro.

Germany
Germans appear to be the most open minded of EU countries, with 15.73% making investments in PLN currency.

Netherlands
The Netherlands followed behind Germany in diverting from the euro, with 9.08% of investors choosing PLN based loans.

Download the full report here.

iZettle Grabs $ 47M Additional Funding, Eyes Market Expansion (PYMNTS), Rated: A

iZettle has grabbed €40 million in funding (the equivalent of $47 million) that the Stockholm-based payments firm will use to expand into new markets.

International

Disruptive Startup, Etherecash, Concludes ICO Ahead Of Schedule (Coinidol), Rated: B

Etherecash is one step closer to actualizing its vision of bridging the financial divide between the banked and the unbanked with the successful conclusion of its ICO ahead of schedule. The ICO is now scheduled to finish on 12th Dec 6:29 PM (GMT) after four impressive bonus rounds that outperformed expectations.

With over $30 million raised and 45000 registered participants, Etherecashcan now set its sight on eliminating traditional borders, intermediaries and prejudices in the way money is lent, spent, and sent.

Australia/New Zealand

MERCER LAUNCHES SUPERBOT, ARTIFICIAL INTELLIGENCE DELIVERING FINANCIAL ADVICE VIA FACEBOOK MESSENGER (Mercer), Rated: AAA

Australia’s 17 million active Facebook users spend on average 1.4 hours a day liking, commenting and sharing stories with family and friends. Moreover, with roughly 17% of the earth’s population being active users of Facebook Messenger, there is irony in the fact that the smartphone generation is spending more time engaging on Facebook rather than thinking about their future financial readiness.

Accessed through Facebook Messenger, SuperBot represents the ultimate opportunity to scale financial advice across a very large proportion of the population.

Non-bank lenders lift profit 10% in 2017 (NBR), Rated: A

Eighteen of the 25 participants in the KPMG non-bank financial institutions performance survey posted increased earnings in 2017, generating a total net profit of $216.7 million, up from $196.6 million a year earlier. Total assets grew 12 percent to $10.96 billion, with lending boosted by the nation’s strong demand for new vehicles and several non-bank institutions testing the waters in the mortgage space as the major banks become more reticent in some of their credit criteria.

HNWI financial advice demand falls (Financial Standard), Rated: A

The use of financial advice among high-net-worth investors (HNWI) has fallen to a five-year low, according to the insights, which show 435,000 millionaires own more than $1 million of investable assets.

Almost 75% of HNWIs relied on the expertise of a financial advice professional in 2013 – but this has declined to 68% in 2017.

Credit Suisse found the number of Australian millionaires rose by 200,000 in the year to June, marking the third-largest increase after the US and Germany in its global wealth ranking.

CCR to help business financing (InvestorDaily), Rated: B

Indeed, interest rates on small business loans have “remained relatively high” due to a lack of competition – leaving banks as the major provider of lending to small businesses (80 per cent).

But a CCR regime would offer lenders more information about potential borrowers’ credit history than just negative credit information, as per the current standard.

The Australian government has determined a mandatory credit reporting regime to come into effect in July 2018, but a number of financial institutions such as NAB have already announced it will roll out such a regime.

Other forms of accessing finance for smaller firms or entrepreneur were large technology firms and alternative financing platforms, such as marketplace lending and crowdfunding, he added.

India

Online loans marketplace FinBucket gets funding from Impanix Capital (VC Circle), Rated: A

FinBucket Pvt. Ltd, which runs an eponymous online marketplace for loans and investments, has raised Rs 12 crore ($1.8 million) from Delhi-based early-stage venture capital firm Impanix Capital.

The startup plans to use the funds to increase its staff strength to 200 and expand operations.

‘Fintech can help assess credit score ’ (The Hindu), Rated: A

Financial technology firms that generate credit scores based on digital footprints of individuals will have a major role to play as banks begin to focus on lending to first generation customers who do not have credit history, former Deputy Governor of Reserve Bank of India H.R. Khan said here on Wednesday.

Fintech startup CapitaWorld raises funding (VC Circle), Rated: B

Mumbai-based fintech startup CapitaWorld Platform Pvt. Ltd has raised an undisclosed amount through convertible equity from high-net-worth individuals, corporate honchos and investors from Hong Kong and the Middle East.

The investors who participated in the latest round include former chief executive of Indian Banks’ Association Mohan Tanksale, Swift India CEO Kiran Shetty, Madhu Silica’s managing director Darshak Shah and former JP Morgan executive Mandar Mhatre, the startup said in a statement.

Asia

BHSI Launches Financial Institution Professional Indemnity Insurance in Asia (Insurance Journal), Rated: A

Berkshire Hathaway Specialty Insurance Co. (BHSI) announced it has introduced Financial Institution Professional Indemnity (FIPI) insurance in Asia.

The new BHSI policy is designed to cover a range of claims, from allegations of failure to disclose information, to misleading financial advice and breach of contracts, the company said in a statement. The policy combines coverage for civil liability, pre-investigations, mitigation expenses, bail bond costs, court attendance, loss of documents, and more.

The policy is designed for medium to large financial institutions, including securities dealers, regional banks, insurance companies, reinsurance companies, diversified institutions, and financial technology (fintech) and corporate advisory firms.

South America

Brazilian fintech Nubank starts international tech talent hunt (ZDNet), Rated: B

Brazilian fintech Nubank has launched an engineering center in Berlin as part of a plan to boost its software engineering function internationally.

Nubank has expatriated four of its engineers to Berlin to kickstart the European operations. It has also already started to hire local experts such as Gavin Bell, a senior engineer who previously managed the core data infrastructure platform at Soundcloud.

Authors:

George Popescu
Allen Taylor