Thursday June 20 2019, Weekly News Digest

ASIC borrowers

News Comments Today’s main news: LendingClub expands borrower program. Funding Circle forced to narrow range of valuation. Yirendai revenues come from haircut loans. Chinese P2P lenders explore southeast Asia. Borrowell passes 1M members, raises $20M. Today’s main analysis: 5 ASIC findings on marketplace lending. Today’s thought-provoking articles: US Core, inflation ease. Fintech lending algorithms discriminate […]

The post Thursday June 20 2019, Weekly News Digest appeared first on Lending Times.

ASIC borrowers

News Comments

United States

United Kingdom

China

Other

News Summary

United States

LendingClub Expands Program to Help Borrowers Actually Pay Off Debt (Lend Academy), Rated: AAA

LendingClub shared a few stats on borrowers who choose this method:

  • Save an average of nearly $900 over the course of their loan
  • Cut their credit card interest rate nearly in half
  • Increase their credit score in just three months

The product has been tested for over a year and LendingClub is working with a partner network of over 1,700 credit card, bank and loan companies to make the process seamless. What’s interesting is borrowers can add up to 12 creditors per loan which is an important feature since borrowers often hold balances across many cards.

Turning Lending Club’s Worst Loans into Investment Gold (Towards Data Science), Rated: A

This is a writeup of a machine learning project I completed. In this post I hope to:

  • Describe my algorithm for predicting loan defaults.
  • Use the algorithm to construct a portfolio of clean loans

Inflation Miss (PeerIQ), Rated: AAA

US Core CPI rose by 2% YoY in May, just at the Fed’s target rate but below economists’ expectations. Consistently low inflation is boosting calls for a rate cut next week. The market is pricing in a 24% probability of a rate cut next week and a 76% probability of a rate cut in September.

Source: Bloomberg, PeerIQ

Fintech algorithms discriminate 40% less than traditional lenders (Quartz), Rated: AAA

Algorithmic fintech lending is less discriminatory against minorities than traditional loan officers, according to a recent study of US mortgages. The findings signal hope that technology could provide financing that’s more fair, but the research also underscores how widespread discrimination remains.

The US housing market has long been prejudiced against minorities. When Latino and Africa-American borrowers are looking to buy a home, they usually end up paying 7.9 basis points (0.079 percentage points) more than whites to take out the mortgage, and 3.6 basis points more when they refinance the debt, according to a National Bureau of Economic Researchworking paper published this month.

Buttigieg worries tech may add racial bias to credit decisions (American Banker), Rated: A

Pete Buttigieg said the way credit scoring is done in the U.S. is fraught with inequality and he’s worried the process may get worse with systems based on artificial intelligence.

Commercial Real Estate Crowdfunding Eyes ’18-Hour Cities’ for Small Investors (The Street), Rated: A

When Clear Point Gardens, a 604-unit apartment complex in Columbus, Ohio, recently changed hands, it produced a nearly 43% gain in 16 months, an amazing windfall for investors in the deal.

All 68 of them.

The sale of Clear Point, financed with help from investors on CrowdStreet’s online platform, is the latest example of how online syndication is revolutionizing the way deals are financed in the $6 trillion commercial real estate market.

HSBC launches digital mortgage platform with help from Roostify (HousingWire), Rated: A

One of the world’s largest banks is about to join the digital mortgage revolution, as HSBC Bank USA, the U.S. arm of HSBC Group, announced that it is partnering with Roostify to launch a digital mortgage platform.

Mirador’s Trevor Dryer: ‘The world doesn’t need another high price lender’ (Tearsheet), Rated: A

Trevor started Mirador to fill this void of bank-originated small business lending. We talk about why he started Mirador with a lending as a service model and what painpoints he was addressing.

Dave is launching a checking account that helps users build their credit score (Business Insider), Rated: A

The Los Angeles-based company, backed by investors including Mark Cuban, the DJ Diplo, and hedge fund Mark 2 Capital, said on Tuesday it’s rolling out a new checking account product that reports all rent payments to credit agencies. The new feature, added to Dave’s original app, helps customers to build their credit. Dave plans to begin reporting utility payments later this summer.

CoreLogic Launches Marketrac Platinum (CoreLogic), Rated: A

With Marketrac Platinum, lenders and title companies can utilize the interactive platform to identify top performing real estate agents and brokerage firms to prioritize professional relationships based on market trends.

Zirtue Revolutionizes Peer-to-Peer Lending (IT Business Net), Rated: A

Sprout Mortgage Launches ACORN Automated Underwriting System (Yahoo! Finance), Rated: A

Sprout Mortgage, the innovative force in Non-QM lending, today announced the launch of its ACORN automated underwriting system (AUS) as part of an ongoing effort to deliver value-added services to its third-party origination clients.

Finicity Integrates with LendingQB to Optimize Mortgage Origination Process (PR Web), Rated: B

Finicity announced today an integration with LendingQB. LendingQB’s platform now uses Finicity’s digital Verification of Assets (VoA) solution to allow lenders to free up resources, increase processing speed and reduce mortgage fraud while providing borrowers with a more efficient and positive experience.

Cardholders Seek to Capital-ize on Madden (The National Law Review), Rated: A

Last week, three Capital One cardholders filed a putative class action in the Eastern District of New York, Cohen v. Capital One Funding, LLC,1 alleging that the rates of interest they paid to a securitization trust unlawfully exceed the sixteen percent threshold in New York’s usury statutes.  The Plaintiffs seek to recoup the allegedly excessive interest payments and an injunction to cap the interest rates going forward.

Fundbox Tapped By Top B2B E-Commerce Software Provider OroCommerce to Power Net Terms (Fundbox Email), Rated: A

According to a 2019 research study by

Cross River poaches execs from student refinancing firm Laurel Road (American Banker), Rated: A

Cross River Bank, a Teaneck, N.J.-based bank that focuses most of its energy on supporting fintechs, is hiring several people from the student loan refinancing company Laurel Road to its capital markets team.

Cross River’s fintech partners include Affirm, Circle, Best Egg, Coinbase, Rocket Loans, Stripe, Upstart and Transferwise.

Optimizely Closes $ US105M Financing Round (Which-50), Rated: A

Optimisation platform Optimizely has closed US$105 million in financing, including US$50 million in Series D funding. The funding, led by Goldman Sachs Private Capital Investing, also included Accenture Ventures.

Austin Niemiec Named New Executive Vice President of Quicken Loans Mortgage Services (Yahoo! Finance), Rated: B

Quicken Loans Mortgage Services (QLMS), the second largest mortgage lender serving the needs of brokers, regional banks and credit unions, today announced that Austin Niemiec has been named Executive Vice President.

Self Lender Awarded Inaugural Inclusive Fintech 50 (PR Newswire), Rated: B

Self Lender is pleased to announce its inclusion in the inaugural list of winners of the Inclusive Fintech 50. The Inclusive Fintech 50 is a competition launched in February to help early-stage fintech companies attract capital and resources to benefit the world’s 3 billion financially underserved people. The competition was organized by MetLife Foundation and Visa Inc., with global nonprofit Accion and World Bank Group member IFC.

United Kingdom

No sign yet of breaking out of circle (The Times), Rated: AAA

The early days of a company’s life on the stock market tends to set the tone for what follows. The grief around Funding Circle’s listing began even earlier and has continued to plague it.

Days before trading in shares of the specialist online lender began at the end of September, Funding Circle and its bankers were gunning for a valuation of up to £1.75 billion, only to be forced to narrow the expected range shortly before it came to market, and then to price the shares at the lower level of 440p apiece.

Source: Refinitiv

Three Biggest Overperformers And One Underperformer In Peer-To-Peer Lending (4th Way Email), Rated: AAA

Landbay

  • Over £300 million lent.
  • Maximum loan size to property valuation (LTV) 80% – better than all the major high-street banks.
  • Average LTV: 72% – highly suitable for these kinds of mortgages.
  • Average rent: 190% of the monthly mortgage payment.
  • Over 90% of mortgages are to experienced and professional landlords.
  • Reserve fund: 0.6% of outstanding mortgages – modest but useful.
  • Type of lending: residential BTL.
  • Typical risk of this type of bank lending: very low.
  • P2P bad debts: none.
  • Interest rate: 3.54% after expected bad debts.

Proplend

  • £65 million lent.
  • Maximum loan size to property valuation (LTV) 75% and investors can choose to limit to 50% – lower than all high-street banks.
  • Average LTV  60% – highly suitable for these kinds of mortgages and loans.
  • Minimum rent on rental properties usually 110% of the monthly mortgage payment.
  • Type of lending: residential and commercial rented properties up to five years; some development lending; a mix of senior and junior debt (junior means other lenders get repaid first if the borrower’s property has to be forcibly sold to repay the loans).
  • Typical risk of this type of bank lending: low to moderate for shorter-term rental properties; moderate to high for developments and junior debt.
  • P2P bad debts: none.
  • Interest rate: 7.32% to 9.43% after expected bad debts (7.32%-12.13% before bad debts).

CrowdProperty

  • £35 million lent.
  • Maximum loan size to property valuation (LTV) 70% and investors can choose to limit to 50% – lower than all high-street banks.
  • Average LTV  61% (against starting value of property) – very low for these kinds of loans.
  • Type of lending: property development lending.
  • Typical risk of this type of bank lending: moderate to high.
  • P2P bad debts: none.
  • Interest rate: 8% after expected bad debts (7.32%-12.13% before bad debts).

Rebuildingsociety – the Underperformer

  • £15 million lent.
  • Type of lending: unsecured small business lending to sub-prime.
  • Typical risk of this type of bank lending: moderate to high.
  • P2P bad debts: 17% of total lent in pounds
  • Interest rates: estimate an average 5% after heavy losses.

British Business Bank adds £60m firepower to non-bank lender (AltFi), Rated: A

Simply, a non-bank lender, focused on SME asset financing has scored a a third financing tranche of £60m from the British Business Bank.

One fifth of UK investors upping exposure to debt investments (Investment Week), Rated: A

One-fifth of UK investors are increasing their exposure to debt amid low interest rates and Brexit uncertainty, according to research from FJP Investment, which found this number climbs to 34% when 18-to-35 year-olds are considered in isolation.

However, the independent survey – which comprises 950 investors – discovered 44% of participants are more focused on short-term debt investments over this financial year due to both political and economic uncertainty; this figure rose to 68% among under 35s.

OakNorth completes loan to Oncore IT for the acquisition of Fuse Technologies (Fintech Finance), Rated: A

OakNorth – the bank for entrepreneurs, by entrepreneurs – has provided a loan to Oncore IT, a managed service and cloud platform provider.

The finance has been used for the acquisition of Fuse Technologies, a London based provider of unified communications tools.

Brexit and drive for growth sees IT fintech salaries surge (AltFi), Rated: A

London-based java developers lead the pack, commanding starting salaries of up to £60,000, followed by software developers in the capital on up to £55,000.

Intense competition between UK-based fintechs – lead by Revolut, TransferWise, OakNorth and Funding Circle – and high street banks attempting to upgrade their services has led to bidding wars in order to gain top level IT professionals, said the report called The UK Fintech Revolution.

Lloyds first to launch open banking app for credit cards and savings (Fintech Futures), Rated: A

Customers of Lloyds Bank, Halifax and Bank of Scotland are the first to see their savings accounts and credit cards in one place, thanks to open banking technology, reports Jane Connolly.

J.P. Morgan working on a secretive digital banking project based out of London (TechCrunch), Rated: A

A number of incumbent banks are known to be developing new digital-first products in a bid to keep the new wave of challenger banks at bay and now it appears that the latest to make that move is J.P. Morgan.

According to sources, the investment bank has begun recruiting for a secretive skunkworks project within London’s booming fintech industry. Very few details are known about what exactly J.P. Morgan plans to build, although TechCrunch understands the bank is busy hiring high level developers with full-stack and cloud-based dev skills for the new project, along with other personnel.

Following Facebook’s Libra launch, UK regulator hints at greater Big Tech scrutiny (AltFi), Rated: A

The FCA says technology is dramatically changing the markets it regulates and blurring regulatory boundaries in a new report into its activities.

China

Yirendai Revenues Come From Suspect Haircut Loans (Seeking Alpha), Rated: AAA

Over 60% of YRD’s FY 2018 revenues stem from “haircut loans” (P2P service fees charged to borrowers) that are prohibited by Chinese regulation. Recent developments in the P2P lending sector with regards to questionable lending practices, unethical collections, and usury are not being disclosed in YRD’s SEC filings, leaving U.S., Canadian, and international investors completely in the dark.

The Chinese P2P Lending Market

Unlike in developed countries, there are no administrative bodies (such as the U.S. Securities Exchange Commission) which regulate peer to peer lending exchanges in China. Instead, such services are regulated by self-organized internet associations and retail banks. The lack of meaningful oversight has caused the Chinese P2P lending market to bubble into $178.9 Billion in FY2018, almost 22 times the size of the P2P lending market in the United States and 447 times that of Japan’s.

Over 850+ fraudulent/ponzi lending platforms were exposed in FY 2018 alone.

Source: iiMedia Research

But the bad numbers don’t end here:

– The total loan volume amounted to 245.9 billion in Q12019, down -55.5% Y/Y.

– 85.7 in new loans were lent in March 2019, down -53.5% Y/Y.

– Principal balance of all loans: 8,029 CNY billion, down -3.6% Y/Y.

– sum of P2P lenders and borrowers, up 21%.

Chinese P2P lending platforms look to Southeast Asia amid industry purge back home (Technode), Rated: AAA

A slew of Chinese fintech and peer-to-peer (P2P) lending platforms are looking to more lenient markets in Southeast Asia (SEA), following a prolonged industry crackdown in China that has left the sector reeling.

Over the past year, China’s regulatory clampdown on risky financial practices has wiped out more than half of the country’s P2P lending platforms. As of May, just 900 survived, down from almost 1,900 recorded a year ago.

In early June, Indian daily newspaper the Economic Times reported that Chinese fintech companies, including WeShare, 9F Group, and CashBUS, are exploring investment opportunities in the country’s burgeoning online lending sector, particularly in the P2P lending space.

XW Bank Welcomed by IMF as One of 6 Outstanding FinTech Companies From China (Yahoo! Finance), Rated: A

The International Monetary Fund (IMF) welcomed 6 outstanding FinTech companies from China including Ant Financial, WeBank and XW Bank.

European Union

Snask helps Klarna to communicate its ‘smooth’ banking offer with off-the-wall film and photography (Creative Boom), Rated: A

When Stockholm studio Snask was approached by Klarna, one of Europe’s biggest banks, to help communicate how its revolutionary payment solutions make life easier for its customers, it set out to create seven “never-seen-before” worlds.

LHV Bank Integrates Estateguru Investments in Online Banking Dashboard (P2P-Banking), Rated: A

You might wonder why that is relevant as most readers are unlikely to be LHV Bank customers. LHV Bank is a bank in Estonia.

I think it is highly interesting, as it is – to my knowledge – the first time a bank has integrated p2p lending investments in its customer interface. So the LHV bank customers, not only see their accounts and stock depots, but also their Estateguru investments conveniently listed in their online bank dashboard. Much has been talked about what role could banks have in p2p lending (mere transaction banks? providing credit lines?) and also there is a lot of speculation if PSD2 (open banking) will help fintechs to seize the access to the customer from banks because they could control the user interface in the future. But this is actually a first step a bank takes in the opposite direction. By aggregating “non-bank” information inside the dashboard, they aim to make the banking interface more useful for the customers.

International

How Klarna is Helping the World Shop Like a Queen (Power Retail), Rated: AAA

Klarna is the latest Buy Now Pay Later (BNPL) app to sweep through the world. Originating in Sweden, the BNPL platform allows users to purchase goods and schedule repayments in timeslots. At this point in time, Klarna is the first and only BNPL platform that’s available in the U.S. It’s also available in the UK, Denmark, Norway, Belgium and many other European countries.

Australia

Five key ASIC findings on marketplace lending (Cuffelinks), Rated: AAA

In April 2019, the Australian Securities and Investments Commission (ASIC) released its third report on marketplace lending, the Survey of marketplace lending providers: 2017–18The report paints a clear picture of a once-nascent industry enjoying growth with new borrowing increasing by nearly 45% in the 2017-18 financial year. The report notes that this growth is moderating compared to the near doubling in funds borrowed the previous year (from $156 million to $300 million). By contrast, the Australian Bureau of Statistics (ABS) reports that overall personal lending has declined by an astonishing 24% in the 12 months to March 2019.

Source: Cuffelinks

The ASIC report found that the average interest rate charged for marketplace loans entered into during the 2017–18 financial year was 11.5%, up from 10.5% in the 2016–17 financial year.

Source: Cuffelinks
India

All you need to know about P2P lending and Commodities (India Times), Rated: AAA

Vinay Mathews, Founder and COO, Faircent and Sanjay Gakhar, Vice President, MCX talks about the benefits of investing via the P2P platform and Commodities, ET Wealth investment Workshop in Delhi Listen in!

Watch the video here.

Asia

Indonesian firms turn to P2P lenders for funds (Asia-First), Rated: AAA

Small companies in Asia-Pacific are tapping new funding sources, according to the Economist Intelligence Unit (EIU) study commissioned by Mastercard, with peer-to-peer (P2P) lending platforms in Indonesia reportedly posting USD1.4bn worth of transactions in 2018, an increase from USD20m in 2016.

Canada

Borrowell passes one million members, raises $ 20 million in new capital (Zone Startups), Rated: AAA

RFI alumni company Borrowell announced that it had reached significantly more than a million users, making it Canada’s largest consumer fintech company by that measure.

In addition to this membership milestone, Borrowell also confirmed that it has received $20 million in Series B funding.

AltFi Toronto Summit 2019 (AltFi), Rated: B

WED, 9 OCTOBER 2019, 08:30 – 17:30 EDT

Blind Bird tickets are now on sale at a 50% discount ahead of the Summit’s agenda being announced later this Summer.

Authors:

George Popescu
Allen Taylor

The post Thursday June 20 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 24 2019, Weekly News Digest

millennials loan money

News Comments Today’s main news: Funding Circle, Stripe partner on small business expansion. Goldman, Citi drop Chinese P2P lenders. RateSetter attracts 75K investors. MarketInvoice gets 56M GBP in equity, debt funding. Hexindai shares credit data with Baihang Credit. Today’s main analysis: PeerIQ on bank earnings. Today’s thought-provoking articles: The link between marketplace lending and personal bankruptcy. 10 best places to […]

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

millennials loan money

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

Goldman, Citi Drop Chinese Peer-to-Peer Lenders After Crackdown (Bloomberg), Rated: AAA

First came a sweeping government crackdown and a surge in defaults and failures at thousands of China’s peer-to-peer lenders. Now, in another troubling sign for the industry, some of the biggest investment banks have stopped taking them public.

Wall Street firms including Goldman Sachs Group Inc. and Citigroup Inc. walked away from U.S. initial public offerings of Chinese P2P lenders in recent months, people with knowledge of the matter said. Their concerns mainly stemmed from the timing of the deals, with an uncertain outlook for P2P companies and a slumping market knocking down valuations. In each case, the businesses went ahead with their offerings after finding new underwriters.

Marketplace Lending & Personal Bankruptcy: Cause and Effect (Lend Academy), Rated: AAA

A national wave of personal bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2010-2011.

An interesting white paper (The Real Effects of Financial Technology: Marketplace Lending and Personal Bankruptcy) co-authored by Dr. Piotr Danisewicz, University of Bristol and Ilaf Elard, Assistant Professor of Finance at Shanghai University of International Business and Economics was released last summer.

Among the many additional conclusions Danisewicz and Elard reach in the white paper are:

  • The Madden win triggered Lending Club and Prosper, the two largest U.S. marketplace lenders, to reduce lending in the states affected by the verdict.
  • The co-authors attribute the increase in the incidence of personal bankruptcy following Madden to the reduction in marketplace lending. This hypothesis is supported by a number of further results.
  • The consequences of Madden are limited to the enforceability of marketplace loans and suggest that the increase in bankruptcy rates following Madden arises predominantly from changes in marketplace lending.
  • Danisewicz and Elard also rule out that the rise in bankruptcy following the verdict could be the result of an increase in defaults by marketplace borrowers in the affected states. This may occur if marketplace borrowers are over-indebted and default after being unable to obtain additional marketplace loans in the affected states.

Strong Bank Earnings (PeerIQ), Rated: AAA

Banks had a rough quarter for trading revenues. FICC revenues at MS dropped by 30% YoY and by 18% YoY at GSBank of America’s 15% YoY drop in trading revenues was offset by a 10% increase in consumer banking revenuesRevenues at Wells Fargo dropped by 5% YoY driven by lower consumer loan balances. WFC faces a regulatory asset cap until the end of 2019 which is hampering loan growth. JPM was the only bank where the provision for credit losses increased, driven by a reserve build for credit cards due to loan growth.

Source: PeerIQ

10 Best Places to Pay Down Debt (LendingTree), Rated: AAA

Americans’ debt balances continued climbing in 2018, with total consumer debt tracking to top $4 trillion by the end of that year. With balances climbing high, many borrowers will want to use the new year to take their debt down a peg. For those who do so, prioritizing paying off debt can bring major rewards both in the near and long distance future.

86 Million Americans Fear Maxing Out Plastic on Large Purchases (WalletHub), Rated: AAA

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 34 percent of respondents say they worry about maxing out their card with a large purchase.

Source: WalletHub

Credit Line Increases Drive Consumer Engagement and are Most Likely to Happen at the Beginning of the Year (AP News), Rated: A

According to a new study from TransUnion (NYSE: TRU), consumers are 50% more likely to receive a credit line increase (CLI) between the months of January and May. However, credit line decreases (CLD) occur at twice the normal rate during the month of January.

Lendio Provides More Than 5,000 Kiva Loans to Support Women-Owned Businesses Around the World (Lendio), Rated: A

Lendio announced today that through continued efforts to support business growth around the world, the Lendio Gives program has funded more than 5,000 Kiva microloans. To-date, Lendio’s employee contribution and employer matching program has provided more than $130,000 in loans to underserved business owners in 78 countries.

Lendio Franchising Named No. 1 Financial Services Brand in Entrepreneur’s Franchise 500 (Lendio), Rated: B

Lendio Franchising recently ranked in Entrepreneur magazine’s Franchise 500, the world’s first, best and most comprehensive franchise ranking. Named #1 in the Business Financial Services category for the second year running, Lendio Franchising was recognized for its outstanding performance in areas including unit growth, financial strength and stability, and brand power. Placement in the Franchise 500 is a highly sought-after honor in the franchise industry; Entrepreneur received more than 1,000 applications this year, making it one of the company’s most competitive rankings ever.

Commercial Real Estate Finance Platform CrediFi Milestone: Total Capital Raised Has Surpassed $ 29 Million (Crowdfund Insider), Rated: A

CrediFi, a fintech and commercial real estate finance platform, on Wednesday it has raised an additional $6 million in funding. This funding comes on the heels of the $13 million previously raised in Series B funding. The company reported that the total amount it has raised has surpassed $29 million.

Lending Express Celebrates $ 100M Lending Milestone & California’s Golden Opportunities (Crowdfund Insider), Rated: A

Lending Express, an Israeli tech company dedicated to creating a better world of funding for SMBs, has surpassed $100 million in financing facilitated between small and medium business owners and online lenders. Lending Express also obtained state permission to open for business in California.

Fundation Launches Digital Lending Capability with Banc of California for Small Business Customers (OAOA), Rated: A

Fundation announced that it has recently launched a digital lending solution in partnership with Banc of California, enabling the California-based bank to offer a new, streamlined end-to-end solution for small businesses seeking a business loan or line of credit. The solution enables small businesses to apply for loans and lines of credit through a simple online application at Bancofcal.com and receive funds in a little as one business day.

Entrepreneurs Take Note: Success Is Within Reach (WWD), Rated: A

With insight from 600 “thriving” U.S. small business owners, a study by global financial services platform Kabbage, Inc. reveals one-third of small businesses started with less than $5,000 in start-up capital.

According to the report, particularly scrappy or thrifty entrepreneurs may want to consider starting a business in one of the three categories costing $5,000 or less “during the first six months.” Accounting; at 45 percent, online retail; at 44 percent and construction and landscaping; at 39 percent represented the least amount of start-up capital, or lowest entry barriers.

Officials caution federal workers of predatory online payday lenders during federal shutdown (News 8), Rated: A

Attorney General William Tong and Department of Banking Commissioner Jorge Perez cautioned federal workers on Wednesday to avoid predatory online payday lenders who may seek to exploit the struggling workers during the partial government shutdown.

Most People Would Not Loan Their Loved Ones Money to Start a Business (Fundera), Rated: A

The time and effort it takes to raise the funds for your startup can quickly get out of hand, which may be the reason that 29% of new small businesses run out of cash and fail.

In fact, 38% of startups are funded by friends and family members.

We surveyed 1,000 Americans on whether or not they would loan a friend or family member money to start their business and found that 82% of people would not loan a friend or family member money to start a business.

Source: Fundera

No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback (WSJ), Rated: A

Lenders issued $34 billion of these unconventional mortgages in the first three quarters of 2018, a 24% increase from the same period a year earlier, according to Inside Mortgage Finance, an industry research group. While that makes up less than 3% of the $1.3 trillion of mortgage originations over that period, the growth is notable because it came as traditional home loans declined. Those originations fell 1.2% over the same period and were on track for a second down year in 2018.

North Capital Launches REITless Impact Income Strategies (PR Newswire), Rated: A

North Capital Investment Technology Inc. recently launched a new investment vehicle, REITless Impact Income Strategies (REITless), focused on lending and strategic debt investments to primarily single- and multi-family real estate development and redevelopment projects that aim to produce positive social impact in communities nationwide. The impact initiatives targeted by the company are energy efficiency, employment generation, affordable housing, and green-housing improvements that promote environmental sustainability. REITless is managed by North Capital Inc., an SEC-registered investment advisor (RIA).

BFS Capital Achieves $ 2 Billion in Financing (BusinessWire), Rated: A

BFS Capital, a leading small business financing platform, today announced it has now issued more than $2 billion in financing to over 22,000 small businesses across the United States, Canada and, through its United Kingdom subsidiary, Boost Capital.

KeyBank To Acquire Online Lending Business Laurel Road (PR Newswire), Rated: A

KeyBank National Association today announced that KeyBank and Laurel Road Bank have entered into a definitive agreement for the acquisition by Key of Laurel Road’s digital lending business; Laurel Road’s three bank branches located in southeast Connecticut are not part of this transaction. Through the acquisition, Key will enhance its digital capabilities with state-of-the-art, customer-centric technology and will leverage Laurel Road’s proven ability to attract and serve professional millennial clients.

GROUNDFLOOR Launches Real Estate Investments Specific To Georgia Residents During Federal Shutdown (PR Newswire), Rated: A

Today, Atlanta-based GROUNDFLOOR is launching new investment opportunities specific to Georgia residents. The crowdsourced real estate investing and lending platform regularly offers investment opportunities to accredited and non-accredited investors throughout the country. Due to the federal shutdown and furloughs at the Securities and Exchange Commission, GROUNDFLOOR is now resurfacing state-by-state securities to continue to offer investors the opportunity to invest on a fractional, self-directed basis in Georgia real estate.

Is community banks’ loan growth too much of a good thing? (American Banker), Rated: A

Total loans at publicly traded banks with assets of less than $20 billion rose 9.2% in the fourth quarter from a year earlier, based on Jan. 18 data compiled by FIG Partners. Publicly traded banks above that threshold have reported a 2.7% increase in loans.

Breakout Capital Finance expands Board of Directors, appoints Neil Gurvitch and Firoze Lafeer (PR Newswire), Rated: B

Breakout Capital Finance, a leading fintech innovator, announces the expansion of its Board of Directors by appointing Firoze Lafeer, company CTO, and Neil Gurvitch as an independent director.  In making the appointments, Carl Fairbank, Breakout’s Founder and CEO, said, “We continue to see rapid growth in our lending- and technology-focused endeavors.  Adding more seasoned leadership continues our expansion and growth plans.”

Samsung NEXT, NBKC Executives and Ellie Mae Veteran Join ProPair Advisory Board (BusinessWire), Rated: B

ProPair, a Silicon Valley innovator using machine learning and predictive decision-making to change how mortgage lenders are assigning and prioritizing their leads, today announced the additions of Leo Chang, Chad Cronk and Nick Hedges to its advisory board.

United Kingdom

RateSetter attracts over 75,000 investors (Bridging and Commercial), Rated: AAA

RateSetter has announced that over 75,000 investors have put money into its platform.

Since its launch in 2010, investors have earned £120m through the P2P lending platform at an average interest rate of 4.4% per year.

RateSetter currently has £830m of investment under management, including £170m invested through its Isa.

MarketInvoice secures £56m equity and debt funding (MarketInvoice), Rated: AAA

Fintech business MarketInvoice today announced it has raised £26m in new equity funding. This Series-B funding round was led by Barclays and Fintech fund, Santander InnoVentures with significant participation from European venture fund Northzone, an existing investor in the company. Technology credit fund Viola Credit, who also participated in the equity round, will provide a debt facility of up to £30m. The facility will help scale the MarketInvoice business loans offering that sits alongside their core invoice finance solutions.

Goldman Sachs’ Marcus platform reveals AUM (AltFi), Rated: A

The US investment giant said its digital bank attracted has more than £5bn in UK savings just three months after its launch.

The US investment giant debuted its online lending and deposit platform, Marcus, in the UK at the end of last summer, and pulled in 100,000 customers and £5.4bn in the final quarter of the year.

Metro Bank shares crash after loans blunder revealed (The Guardian), Rated: A

Metro Bank has revealed a major blunder in how it classifies its loan book, an admission that drove its share price down by nearly 40% on Wednesday, wiping £800m off the value of the company.

The bank, which has been opening new branches as established rivals cut back, revealed that hundreds of millions of pounds of commercial property loans and loans to commercial buy-to-let operators had been wrongly classified in risk terms, and should have been among its “risk-weighted assets” (RWAs).

Glenhawk grows team with LendInvest hire following strong start to 2019 (Property Funds World), Rated: B

Having originated GBP28.4 million of potential loans since the start of the year, and completed on just over GBP4 million, early indications are that 2019 will see accelerated demand for Glenhawk’s fast and flexible short term property finance. Wareham joins Glenhawk’s 20-strong team of real estate professionals, supporting an increasingly diverse range of borrowers across the South of England and Midlands.

China

Hexindai Begins Sharing Credit Data with Baihang Credit (PR Newswire), Rated: AAA

Hexindai Inc. (NASDAQ: HX) (“Hexindai” or the “Company”), a fast-growing consumer lending marketplace in China, announced today that it has connected its systems and begun sharing credit data with Baihang Zhengxin (“Baihang Credit”).

China crackdown aims to push peer-to-peer lenders out of the industry (Australian Financial Review), Rated: A

Chinese authorities have further tightened controls on the peer-to-peer lending industry, aiming to clear out as many P2P platforms as possible, according to an official document seen by Caixin.

Microlenders need to obtain licences from the regulators and meet certain minimal capital requirements. For instance, a microlender in Shanghai needs to register its business with more than 200 million yuan ($41.2 million). P2P platforms usually don’t have to meet such requirements.

Chinese investors try to storm company after P2P lender failure (Business Times), Rated: A

In the latest sign of turmoil in China’s once booming peer-to-peer (P2P) lending sector, around 80 investors in failed lender Xinhehui protested outside the Hangzhou headquarters of a related company on Tuesday, demanding a US$330 million bailout.

Mrs Xue, who would only provide a surname for fear of retaliation, said she arrived at 8am with around 80 other investors from Zhejiang and neighboring provinces, demanding payment for 2.26 billion yuan (S$452 million) of products that Xinhehui had sold, including 860 million yuan (S$172 million) worth that were due for repayment on Jan 6.

Xi Tells Cadres to ‘Prevent and Control’ Risks as China’s Economic Woes Mount (The Epoch Times), Rated: B

At a high-level meeting of senior Chinese Communist Party officials held in Beijing, Chinese leader Xi Jinping gave an opening speech on Jan. 21 that hinted at the severity of China’s economic downturn.

European Union

Fellow Finance Launches Peer to Peer Lending in Denmark (Crowdfund Insider), Rated: AAA

Finland based peer to peer lender Fellow Finance is now operating in Denmark. The company says it will offer Danish consumers access to credit while Fellow Finance investors will be able to fund Danish loans. Currently, Fellow Finance provides consumer loans in Finland, Germany, Poland, and Sweden.

Note to Irish and US parents: college not the only path for your cherished offspring (Irish Central), Rated: A

According to the student loan marketplace www.lendEDU.com, the average debt per borrower at a public college is $26,872. This rises to $31,710 if you’re inclined to a private college experience. For graduate school students – whose parents have by now presumably said, “Time to pay your own way, sunshine” – the average debt is a staggering $57,600.

International

Funding Circle partners with Stripe to help small businesses expand (PR Newswire), Rated: AAA

Funding Circle, the global small business loans platform, today announced that it has joined the Stripe Partner Program, providing businesses using Stripe with access to affordable business financing through Funding Circle. As a verified extension partner, Funding Circle now enables Stripe users to import their data directly and securely to apply for a business loan up to $500,000 — making the process faster and easier so they can get back to running their businesses.

Boost Capital ups firepower as US parent hits $ 2bn lending milestone (AltFi), Rated: A

Small business lender Boost Capital has refinanced its credit facility lifting its funding capacity to $60m, as its US parent targets European growth.

The Chelmsford-based platform, which provides business loans and merchant cash advances, said it upped its credit firepower from $40m after signing a deal with New York-based investment firm Atalaya Capital Management.

India

Matrix Partners invests in P2P lending platform LiquiLoans (Techstory), Rated: AAA

Mumbai based peer to peer lending platform LiquiLoans, one of the few players to have secured a P2P license, has now secured an undisclosed amount of funding from some of the existing investor that is Matrix partners India.

Fintech startup floated by ex-Lendingkart execs MoneyOnClick raises funding (VC Circle), Rated: A

Two former executives from online lending platform Lendingkart have quit the firm to set up a new venture in the alternative lending space, catering to consumers.

According to their respective LinkedIn accounts, the startup, which has been operational since October 2018, has already raised $2.25 million (Rs 16.02 crore at current exchange rates) as part of its first institutional funding round from undisclosed investors.

Women, non-metros topping up on credit, says BankBazaar survey (MoneyControl), Rated: A

Non-metro cities have emerged as the bigger market for unsecured credit in terms of volume than the metros in 2018, according to BankBazaar Moneymood 2019 report.

The average personal loan ticket size in non-metros is Rs 2.80 lakh compared to Rs 2.55 lakh in metros. The unsecured credit portfolio includes personal loans and credit cards which are used more for consumption activities than secured loans.

Online rental marketplace Sacorooms Rises fresh funding Pre-Series A (Times of India), Rated: A

Sacorooms, a start-up that is building co-living spaces, has closed a pre-Series A round of funding for an undisclosed amount from Mr. Broadway. The investment comes after a strategic round led by Incubate Fund and a group of investors from the real estate industry this year.

Asia

OJK Zero Down Payment Policy Drives Multifinance Growth (Tempo.co), Rated: AAA

The recent policy of zero percent down payment for vehicle credit issued by the Financial Services Authority (OJK) believed to be able to drive the performance of the multifinance industry. Businesses are confident that multi-finance companies will perform better with the new regulation.

Chairman of the Indonesian Financing Company Association (APPI) Soewandi Wiranto, said that the business expansion stated in the new regulation can increase financing industry growth. Based on APPI’s calculation, industrial asset growth for 2019 can reach up to 9 percent while the growth rate of receivables is predicted to be in a range of 6 to 7 percent.

Authors:

George Popescu
Allen Taylor

The post Thursday January 24 2019, Weekly News Digest appeared first on Lending Times.

Thursday January 17 2019, Weekly News Digest

marketplace securitizations

News Comments Today’s main news: RateSetter surpasses 3B GBP in lending. SoFi Money bank-like offerings. LendingClub land on 2019 Bloomberg Gender-Equality Index. HeZhong International to list on Nasdaq. Robo.cash doubles investors in 2018. Kabbage to provide point-of-sale loans to Alibaba shoppers. Today’s main analysis: Marketplace lending securitization slowed in Q4 2018. Today’s thought-provoking articles: Consumer credit continues to grow. Loan default […]

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

marketplace securitizations

News Comments

United States

United Kingdom

International

Other

News Summary

United States

SoFi Offering Bank Like Services, But it is Still Not a Bank (Crowdfund Insider), Rated: AAA

Today, SoFi is distributing more invites to their bank-like services – SoFi Money, a service announced last summer. SoFi is offering consumers the following:

  • No “freakin” fees, including annual, transactional, overdraft, or any other account fees.
  • Higher interest rates, a “whopping” 2.25% APY on your money.
  • Free ATM usage as SoFi will reimburse the fees.
  • Mobile first as your phone is your [bank] branch.
  • Secure – Accounts are FDIC insured up to $1.5 million.³

More MDs, fewer residents in SoFi’s next student loan securitization (Asset Securitization Report), Rated: A

Social Finance’s next student loan securitization features higher exposure to physicians, and fewer of them are still in a residency program, according to rating agency reports.

Borrowers with medical and dental degrees are considered to be good credits in part because they have some of best employment prospects. They account for 28.8% of borrowers in the pool of collateral who have medical degrees, up from 22% for SoFi’s previous student loan securitization, according to Moody’s Investors Service.

LendingClub Selected for 2019 Bloomberg Gender-Equality Index (LendingClub), Rated: AAA

LendingClub Corporation (NYSE: LC), today announced that it is one of 230 companies selected for the 2019 Bloomberg Gender-Equality Index (GEI), which distinguishes companies committed to transparency in gender reporting and advancing women’s equality. The index doubled in size from 2018 and includes firms from 10 sectors, headquartered across 36 countries and regions. Collectively, these firms have a combined market capitalization of USD 9 trillion and globally employ more than 15 million people, of which 7 million are women. Thirteen markets are represented for the first time this year, including Argentina, China, Israel, and South Africa.

Securitization in Marketplace Lending Slowed in Q4 2018 (Lend Academy), Rated: AAA

Issuance totaled $2.6 billion, which is the slowest pace of issuance in 5 quarters and was related to market volatility according to PeerIQ. Volume decreased 44% from the prior year period and dropped 25% quarter over quarter. Total issuance in 2018 was $15.3 billion and included newer issuers Upgrade and Enova. PeerIQ expects that Upgrade and Enova will continue to participate in the securitization market going forward. While Q4 represented a drop in deals, cumulative issuance still stands at $44.5 billion across 142 deals which is a significant amount.

Source: Bloomberg, PeerIQ

We should also point out that LendingClub sold more than $1 billion in CLUB certficates in 2018 which likely reduced their securitization volume in 2018.

Source: Lend Academy

Fed Affirms Flexibility on Rate Hikes (PeerIQ), Rated: AAA

Consumer credit continues to grow. The Fed reported that consumer credit outstanding grew at an annualized rate of 6.7% in November to $3.98 Tn. This is the third month out of the past four that consumer credit grew more than $20 Bn, for the first time in four years.

Source: Federal Reserve, PeerIQ

Experian: Loan Default Rates Rose In Dec (PYMNTS), Rated: AAA

According to the S&P/Experian Consumer Credit Default Indices, which the companies said in a press release represent a comprehensive measure of changes in consumer credit defaults, the composite rate rose six basis points from December to 0.89 percent. The bank card default rate rose 25 basis points to 3.34 percent, while the auto loan default rate jumped 10 basis points to 1.03 percent. The default rate on first mortgages was three basis points higher at 0.67 percent.

What’s more, S&P Dow Jones Indices and Experian said that all five of the metropolitan statistical areas showed a higher default rate in December of 2018. In Miami, it increased 41 basis points to 1.93 percent, while New York saw a 13 basis-point increase to 0.96 percent and the Chicago default rate was up four basis points to 0.88 percent. In Dallas, the default rate ticked up three basis points to 0.85 percent, while in Los Angeles it was up two basis points to 0.52 percent.

Source: PRNewsfoto/S&P Dow Jones Indices

Fiserv to acquire First Data for $ 22bn (Fintech Futures), Rated: A

A giant will roam the fintech land as Fiserv will acquire First Data in an all-stock transaction of $22 billion.

LendingTree Ranks Most Competitive Housing Markets (LendingTree), Rated: AAA

Key Findings:

Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.

Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country.Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the U.S.

Roostify Enables Digital Mortgage Solution for Glacier Bancorp (BusinessWire), Rated: A

Roostify today announced that Glacier Bancorp, Inc. has launched a digital mortgage solution powered by Roostify. Glacier Bancorp, Inc. is a regional bank holding company providing commercial banking services in 104 communities through 164 banking offices in Montana, Idaho, Colorado, Utah, Washington, Wyoming and Arizona. The company holds total assets of $11.9 billion and shareholder equity of $1.5 billion.

Joust launches a digital bank for gig-economy workers (American Banker), Rated: A

The fintech startup Joust is launching a mobile banking app Tuesday designed for the 56.7 million Americans who rely on freelance income.

The product comes with a bank account, a merchant account, and a way to get quick credit. Behind it is a network of community banks that will gather the deposits the app brings in.

Snoop Dogg Invests In Klarna, Sweden’s $ 2.5 Billion Unicorn (Forbes), Rated: A

Klarna, the Swedish financial technology giant valued at $2.5 billion last year, has a new addition to its shareholder register from the most unlikely source.

Millionaire American rapper Snoop Dogg, aka Calvin Broadus, has today become a minority shareholder in the company which offers buy-now-pay-later services at 100,000 retailers in Europe and across the U.S.

2019 business: 5 trends that will dominate 2019 (Business Report), Rated: A

1. Consumers demand data control:  a Deloitte report shows 71% of purchased data is … inaccurate.

2. Alternative lending will surge: It makes sense that non-bank lending will continue to grow, not only was 2018 a big year for the industry but, more importantly, 80% of small business loans are rejected.

6 Personal Loan Lenders That Accept Cosigners (Credible), Rated: A

Not all personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are six lenders that allow cosigners on their applications.

  1. Freedom Plus
  2. Laurel Road
  3. Lending Club
  4. Lightstream
  5. OneMain Financial

What happens to robos in a downturn? (Financial Planning), Rated: A

As stocks soared to record highs over the past decade, robo advisors amassed billions of dollars in investable assets. But now with the onset of ominous market indicators and volatility, advisors say they are worried about how automated investment platforms will perform during a major market downturn and what that might mean for their bottom lines.

“It is a wild unknown,” says Josh Pace, president of the custodian TCA by E-Trade.

SMB BANKING: THE NEXT WAVE OF INNOVATION (LendIt), Rated: A

Key findings address:
  • How the largest banks, regional banks and community banks differ in their approaches to blending hi-tech and hi-touch customer interactions
  • Who are emerging SMB-focused fintech companies and partnerships to watch
  • What banking functions and features are most sought after by SMBs
  • How mobile apps are being designed specifically with SMB customers in mind
  • Why big data and artificial intelligence are key to integrated financial dashboard and advisory applications
White Oak Healthcare Finance, LLC (“White Oak”) today announced it acted as sole lender and administrative agent on the funding of a senior credit facility for GMF Capital (“GMF”) and Meridian Senior Living (“Meridian”). The funds were used to acquire assisted living/skilled nursing facilities located near Providence, Rhode Island.

FundThrough Engages 919 Marketing to Fuel U.S. Expansion (PRWeb), Rated: B

FundThrough, North America’s fastest growing automated, tech enabled invoice factoring company and a power player in the fintech SMB (small and midsized businesses) working capital space, has engaged 919 Marketing, a leading national franchise marketing agency offering content marketing and public relations services to all companies (franchise or non-franchise), to generate consistent brand awareness and accelerate expansion in the U.S. markets.

Fed not an impediment to fintechs’ charter ambitions (American Banker), Rated: B

Comptroller of the Currency Joseph Otting on Wednesday downplayed concerns that applicants for the agency’s new fintech charter may face resistance from the Federal Reserve Board.

Some in the fintech industry are raising alarm that the Fed may balk at allowing holders of the new special-purpose charter into the payments system, which could reduce the overall value of the charter.

United Kingdom

RateSetter Milestone: Online Lender Surpasses £3 Billion in Lending (Crowdfund Insider), Rated: AAA

UK based peer-to-peer lender RateSetter announced on Tuesday it has surpassed £3 billion in online lending. RateSetter reported that the milestone follows a successful year, with the lender originating more than £700 million of new lending and active loans under management grew to £820 million.

RateSetter also revealed that more than 600,000 customers have used its lending platform to invest or borrow. To date, investors have lent £1.9 billion to individuals and £1.1 billion to businesses. A total of £2.2 billion has been repaid by borrowers, generating returns of £120 million for RateSetter investors, who have enjoyed an average annual interest rate of 4.4% per year since RateSetter’s launch in 2010.

Rapper Big Narstie named among celebrities joining Zopa hotline for a day (P2P Finance News), Rated: AAA

PEER-TO-PEER lender Zopa is making four celebrities honorary ‘Zopians’ for a day next week.

It has launched a “FeelGood Hotline” to banish the January blues that will be staffed by pop star and TV host Frankie Bridge, broadcaster Lauren Laverne and rapper Big Narstie (pictured) on 23 January.

Boxing icon Frank Bruno will also be on the hotline.

UK challenger bank Tandem eyes IPO (Fintech Futures), Rated: A

UK digital challenger bank Tandem has got its young beating heart set on an IPO within the next few years.

In a brief written and video update, it looks to the future and the past. For example, it cites its recent $15 million investment from Hong Kong for Asian market expansion plans.

Tide Collaborates With ClearBank to Transform UK SME Banking Market (Crowdfund Insider), Rated: B

Tide, a UK-based SME challenger banking, announced on Monday it has formed a new partnership with ClearBank to help transform the UK SME banking market.

Tide reported that through its support, ClearBank has applied for a grant from Pool A of the Capability and Innovation Fund that forms part of the £775 million RBS Alternative Remedies Package, a government-backed competition. 

A quarter of UK consumers will have a neobank account within five years (Business Insider), Rated: A

Currently, 9% of Brits, equating to 4.5 million people, have opened an account with a digital-only bank, according to the study. By 2024, a further 16% of the population, or 8.5 million people, intend to do the same.

Source: Business Insider

ARBUTHNOT COMMERCIAL ASSET BASED LENDING LTD. SUPPORTS MBO OF PLUMBWORLD WITH £3.5M STOCK ONLY FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending Ltd. (Arbuthnot Commercial ABL) is pleased to announce the completion of a bespoke £3.5m transaction to support the management buy-out of Online Home Retail Limited (trading as www.plumbworld.co.uk), one of the UK’s leading e-commerce retailer of bathroom related products, from Grafton Group PLC, an international distributor of building materials.

BBVA name dropped in Atom Bank takeover talks (Fintech Futures), Rated: B

BBVA is one of the names coming up in a potential takeover of the UK digital challenger Atom Bank.

Sky News has learnt that Atom is in talks to appoint Citi to advise its board on options for the business.

Accountants Look Out (Fintech Finance), Rated: B

Two thirds (66%) of accountants surveyed said that they do recommend external finance providers to their clients. Whilst these recommendations will be based on the need of any given business, they also indicated their preferred source of funding. Half (50.8%) indicated that they would recommend their clients speak with a bank about their finance needs. Interestingly, more than a third (36.3%) are recommending an invoice finance provider ahead of a business loan provider (33.66%).

China

HeZhong International, Chinese P2P Lender, Seeks $ 5.8 Million Nasdaq Listing (Capital Watch), Rated: AAA

The Shenzhen company hopes to raise up to $5.8 million in New York under the symbol “HZ,” according to its prospectus filed with the U.S. Securities and Exchange Commission.

On its online platform, HeZhong matches borrowers and investors, facilitating mostly consumer loans ranging from $437 to $2,200. It also issues car loans in the amounts ranging between $2,900 and $29,200.

HeZhong IPO: Tempting But Risky With 3,330% Revenue Growth (Seeking Alpha), Rated: A

  • Based in Shenzhen, China, HeZhong offers an online peer-to-peer lending marketplace, providing consumer and automobile loans to the Chinese borrowers and risk-adjusted returns to the investors.
  • Certain investors will believe that the interest rates seem quite appealing. Annual interest rates are between 8% and 15%, and usual tenures are from 7 days to 360 days.
  • The year 2018 was also great in terms of profitability. The company went from reporting losses from operations of -$1.1 million to report operating profit of $5.6 million.
European Union

Robo.cash doubles new investors in 2018 (P2P Finance News), Rated: AAA

LATVIAN peer-to-peer lending platform Robo.cash has reported that it doubled its investor base in 2018 as it expanded its product range and scaled up its lending.

The P2P payday lender said the total volume of investments on its platform hit €5m (£4.45m) after a strong year, representing 93 per cent growth. Meanwhile, it attracted 3,200 new investors, twice the number in 2017, with the majority coming from Germany.

Investment in European Companies Remains Steady but Deal Flow Dives (Crowdfund Insider), Rated: A

Dow Jones has published their Q4 VentureSource report today and while investment in European companies “held steady” deal flow dropped.

The report indicates that the number of deals in Q4 stood at 729. In comparison to the prior quarter, it dipped slightly from 738. When you compare year over year quarters the discrepancy is greater as Q4 2017 delivered 865 separate deals.

In total amount raised, Q4 2018 came in at € 5.19 billion. This is a decline from Q3 at €4.98 billion. But year over year the amount was down as well as Q4 2017 saw € 5.6 billion raised.

Better systems can aid business of giving money to tackle poverty (Breaking News), Rated: A

On a visit to Ethiopia last week, the Taoiseach chose to visit one of the most impoverished areas of the world and witness, first hand, profound poverty.

While there, he was introduced to a woman who had bought four potentially life-saving sheep with a micro-loan provided by Irish Aid.

Irish Aid is operated by the Department of Foreign Affairs. It is, effectively, managed on behalf of us citizens.

International

Kabbage to provide point-of-sale loans to Alibaba shoppers (American Banker), Rated: AAA

Kabbage, an online lender to small businesses, is now providing point-of-sale loans to small businesses that buy things on Alibaba’s online shopping site, the two companies announced Monday.

Under the program, which is called Pay Later, small-business owners can get credit lines of up to $150,000 for their orders on the site.

White Oak Global Advisors Surpasses $ 2.5 Billion of Loan Originations (AP News), Rated: A

White Oak Global Advisors, LLC (“White Oak”), today announced it funded over $2.5 billion in loans in 2018.

Klarna links up with Daniel Wellington to allow shoppers to slice their purchase and pay over time (Klarna), Rated: B

Today, global payments provider, Klarna announced a new collaboration with Daniel Wellington, maker of classic and timeless watches. Loyal shoppers of Daniel Wellington will now benefit from Klarna’s newest payment option, which allows customers to pay for their watches and accessories in 4 equal interest-free installments collected bi-weekly from the shopper’s chosen debit or credit card.

India

Blockchain, AI providing traction to India’s crowdfunding platforms (Financial Express), Rated: AAA

Although crowdfunding in India is at a nascent stage, with only 15 notable crowdfunding platforms (CFPs), the concept holds immense potential for the country’s startup ecosystem.

A World Bank report states crowdfunding has emerged as a multi-billion dollar global industry, and is expected have a volume of $300 billion by 2030.

Authors:

George Popescu
Allen Taylor

The post Thursday January 17 2019, Weekly News Digest appeared first on Lending Times.

Monday June 4 2018, Daily News Digest

Average segment revenue Qudian

News Comments Today’s main news: Yirendai announces earnings results. LendingCrowd goes over 3M GBP in loan originations in May. Starling seeks 80M GBP in funds. Transferwise partners with first European bank. Today’s main analysis: Is Qudian too risky? Today’s thought-provoking articles: The most well-funded tech startups in each U.S. state. Alipay isn’t just for the Chinese. International P2P lending volumes […]

Average segment revenue Qudian

News Comments

United States

United Kingdom

China

International

Other

News Summary

United States

The United States Of Startups: The Most Well-Funded Tech Startup In Every US State (CB Insights) Rated: AAA

Using the CB Insights database, we identified the most-well funded VC-backed technology startups by state based on disclosed equity funding. We excluded funding from debt as well as lines of credit, and only considered companies that have raised at least $1M of equity funding since 2015 to date (5/23/18).

Source: CB Insights

Citi has announced a direction for a new digital bank (Business Insider) Rated: A

A digital-only bank can allow Citi to continue onboarding new account holders despite its shrinking physical presence.

And because Citi already has 10 million active mobile banking customers as of Q1 2018, which represents 25% year-over-year (YoY) growth, it’s likely that consumers with Citi accounts will continue to do their mobile banking through Citi, so it’s a good move for the firm to target another customer base by leveraging its card network and cobrand partnerships.

How Capital One sees digital identity as a business opportunity (American Banker) Rated: A

Capital One has taken a different tack, spending much of the past year building out a digital identity platform that it can potentially position as a service it would sell to businesses.

By buying the startup Confyrm and hiring its founder, consumer identity expert Andrew Nash, the bank is taking another step toward making a business out of addressing the industry’s digital identity needs, industry observers say.

Source: American Banker/Experian

Hottest Alternative Lending Options Available for Small Businesses (All Business) Rated: A

Here are some trending alternative lending options—one of them may be just right for your SME.

Revolving business line of credit-Individuals and corporations are eligible to take out revolving lines of credit; this type of credit line allows entrepreneurs to pay a commitment fee and then utilize funds on an as-needed basis.

Unsecured business loan-Secured business loans require collateral and unsecured business loans do not. If you’re an entrepreneur and would prefer not to borrow money without putting your home, auto, or business inventory (or something else along those lines) up as collateral, then seeking out an unsecured business loan from an alternative lender may be your most practical option.

Crowdfunding-This funding method involves raising capital via individual investors, friends, customers, and family. It’s about tapping into the collective efforts of a big group of people, mostly through crowdfunding platforms and social media networks.

Too broke to own a home? These startups will fund your American Dream (Fast Company) Rated: A

Loftium, a Seattle-based startup, will contribute to a buyer’s down payment in exchange for Airbnb income.

Loftium has so far closed on nearly 50 homes, says Yifan Zhang, cofounder and CEO.

Other startups are taking a similarly innovative approach to the staid, highly regulated housing market. HomeFundMe, for example, helps homeowners crowdsource down payment funds from family members, friends, and employers. Point, based in San Francisco, buys equity from existing homeowners, and then cashes out when they sell–a homeowner-friendly twist on home equity lines of credit (HELOCs).

Laurel Road, MoviePass Join Forces  (Broadway World) Rated: A

Laurel Road, an online lender and FDIC-insured bank, has announced an exclusive, first-of-its-kind partnership with MoviePass, the nation’s premier movie theater subscription service, designed to further amplify savings and value for its customers.

As part of the agreement, MoviePass customers who refinance their student loans with Laurel Road will receive a free annual membership to MoviePass.

How credit card issuers are prepping for the next downturn (American Banker) Rated: A

Is the next turn in the credit cycle right around the corner? Or is it still years away?

The answer has big ramifications for the $1 trillion credit card industry, which has enjoyed unusually strong profits in the post-crisis period, but typically suffers during recessions.

At an industry conference in New York, credit card industry executives said Thursday that they still see sunshine on the horizon. But they were also careful to make clear that they are taking steps to prepare for rainy days ahead.

2018 Rising Stars: Viral Shah (Housing Wire) Rated: B

Viral Shah is cofounder and head of capital markets at Better Mortgage, where he oversees financial product innovation, the mortgage marketplace and corporate nance. Shah’s experience includes consumer nance, capital markets, corporate development and strategy.

Shah led the acquisition and integration of the mortgage lender that Better Mortgage purchased in 2015, while concurrently running the $30 million Series A capital raise.

Shah built out the capital markets infrastructure for the company, obtaining multiple warehouse lines and establishing a loan marketplace representing $700 billion of annual demand and 70% of the mortgage market, including some of the largest GSEs, banks, hedge funds, REITS and asset managers.

PeerStreet’s Nia Patel Named One of HousingWire’s 2018 Rising Stars (Business Wire) Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is honored to announce that Nia Patel has been named to HousingWire’s 2018 Rising Stars list of young leaders to watch in the housing industry. HousingWire’s 2018 Rising Stars list recognizes talent that demonstrate leadership and innovation, inspiring not only those within their company, but also their communities and the industry at large.

United Kingdom

LendingCrowd Milestone: Celebrates Record Month For Loan Origination (Crowdfund Insider) Rated: AAA

LendingCrowd, one of the UK’s fastest-growing alternative finance lenders to the SME market, announced on Friday it is on course for continued expansion after completing loan deals totaling to more than £3 million during May, marking the p2p lending platform’s best month ever. The company also reported that despite the month having two bank holidays it also saw its deal volumes reach a fresh record and secured loans for 36 small business covering a wide range of sectors across Britain.

UK challenger bank Starling seeks £80m funding (Fintech Futures) Rated: AAA

UK challenger bank Starling is looking to raise £80 million in its latest quest for funding – and it has ended its relationship with TransferWise.

In addition to the cash injection, Starling is hiring a new international advisory firm, as it potentially hunts for action beyond the UK. Starling is already in Ireland.

Catch the budgeting bug: apps aimed at millennials (The Sunday Times) Rated: A

Chip promises to help you save “without feeling it”. You link the app to your current account (12 providers are signed up); it works out what you can afford and sends this money every few days to a savings account paying 1% interest. It’s free, regulated by the Financial Conduct Authority (FCA) and available for iOS and Android.

Plum uses Facebook Messenger to analyse your cashflow before banking money. You can invest it in peer-to-peer platform RateSetter and earn up to 3% interest (RateSetter is not covered by the Financial Services Compensation Scheme). Plum is free and available for iOS and Android.

If you are self-employed or do freelance work, Coconut allows you to track your income and outgoings and any tax you owe.

In the red: the soaring cost of middle-class borrowing (The Times) Rated: A

This week the city regulator, the Financial Conduct Authority (FCA), said charges for dipping into an unarranged overdraft, something 13 million people do each year, can be ten times higher than the cost of paying off the same amount on a payday loan.

While 19 million people use the planned overdraft that comes with their bank account, most don’t see this as debt and will also probably have paid charges.

UK financial watchdog calls for ‘radical overhaul’ of high-cost credit (Financial Times) Rated: A

The UK financial regulator called for a “radical” overhaul of rules surrounding bank overdrafts and rent-to-own businesses on Thursday, dismissing criticism that it was dragging its heels in its efforts to protect vulnerable customers.

The Financial Conduct Authority said forcing banks to give more transparent information about overdrafts would save customers more than £200m a year. The regulator said it would consider more fundamental changes in future, such as a ban on fixed fees and ending distinctions between unarranged and arranged borrowing costs.

When Tandem met Harrods: we had ‘sir’, but we didn’t have ‘dame’ (AltFi News) Rated: A

When Tandem’s banking plans went up in smoke last year, after a failed fundraise, few could have guessed that it would rise from the ashes on the wings of luxury department store Harrods’ banking arm.

But that is exactly what happened. The digital challenger completed the acquisition of Harrods Bank in January, giving it a banking licence, £80m of equity capital, £400m of deposits and a £375m mortgage loanbook. It has now launched a cashback credit card and fixed savings accounts – not to mention having signed up 100,000 customers.

In announcing that milestone earlier this week, Tandem revealed that its chief executive Ricky Knox (pictured, right-middle) had invited Harrods Bank’s 7,000 global customers to meet face-to-face in his office in the months following the acquisition.

Finance companies and retailers are experimenting with Slack (Tear Sheet) Rated: B

While no major bank has rolled out a Slack bot for customers (though they’ve done so on Facebook messenger or iMessage), challenger bank Revolut is testing its capabilities for business customers.

This week, the bank launched Revolut Connect, a feature that lets business account holders “talk” to companion apps they use frequently for crucial day-to-day functions like payroll and expense management.

China

Yirendai Announces Earnings Results (The Ledger Gazette) Rated: AAA

Yirendai (NYSE:YRD) issued its quarterly earnings data on Thursday, May 24th. The technology company reported $1.72 EPS for the quarter, beating the consensus estimate of $0.99 by $0.73, Briefing.com reports. The firm had revenue of $253.90 million during the quarter, compared to the consensus estimate of $250.75 million. Yirendai had a net margin of 21.93% and a return on equity of 51.90%. During the same period in the prior year, the firm posted $5.81 earnings per share.

Qudian: The Risky Chinese Fintech Opportunity (Seeking Alpha) Rated: AAA

QD’s average loan size is small. Roughly speaking it ranges from $100-200 per customer. The average cash credit was $136, as listed in its IPO prospectus. QD considers that these small credits pose a favorable risk-reward profile because customers are likely always to pay back their debts. Also, since their credit is short term, its risk is lower compared to longer-term credit products.

Source: SEC filings, quote QD, and author’s elaboration
Source: SEC filings, quote QD, and author’s elaboration

China: WeiyangX Fintech Review (Crowdfund Insider) Rated: A

International Tuition Payment Platform Easy Transfer Receives Tens of Million Yuan in Series A Financing

This week, Easy Transfer announced that it has won tens of millions yuan in Series A financing, which was led by Zhen Fund and followed by IDG Capital. It is reported that this round of investment will be mainly used for product development, team-building and marketing.

The Hong Kong Monetary Authority is Expected to License Virtual Banks by the End of this Year

On May 31st, Hong Kong Monetary Authority (HKMA) issued the revised “Virtual Bank Recognition Guidelines”. The president of the HKMA, CHAN Tak-Lam, said that some interested parties have begun to submit applications to the HKMA. HKMA will carefully and quickly assess the applications and is expected to license virtual banks by as early as the end of this year.

Consumer Finance Company Dauron Secures Tens of Million Yuan in Pre-A Round of Financing

Dauron, an online consumer finance company, announced that it had received tens of million yuan in Pre-A round of financing from Jingbei Investment and Wanrui Factoring.

European Union

Transferwise partners with first major European bank BPCE (City A.M.) Rated: AAA

Out with the old and in with the new: digital money transfer service Transferwise has partnered with Banques Populaires’ and Caisses d’Espargne (BPCE), France’s second largest bank, to integrate its API directly into BPCE’s banking apps.

Set to go live at the beginning of 2019, the partnership between Groupe BPCE, its international banking arm Natixis Payments and Transferwise will see the fintech’s international payments API power all payments made digitally by the group’s 15.1m retail customers at the mid-market exchange rate.

Transactions will also be set at Transferwise’s low-cost 0.5 per cent fee on most routes, and will serve over 60 international destinations. Currently over 3m people use the platform to transfer more than €2m (£1.75m) every month.

How European FIs Are Building Delightful Banking Experiences (Medici) Rated: A

BBVA was the first financial institution in Spain to launch ‘Online Onboarding’via mobile in 2016, which allows anyone to open an account in just a few minutes and start banking right away. This service uses a procedure that verifies a customer’s identity through a selfie and a video call.

The Estonian eID card system is one of the most advanced in the world and serves as the basis for all of the digital services that are available in the country. The system has been in service for 16 years already and represents a highly sophisticated digital access card for all of Estonia’s secure e-services.

Monzo uses a photo of the customer’s passport or DL for identification and matches it to a video selfie; N26 uses passport/ID proof + video chat-based ID verification (in Germany, specific nationalities are also required to check at the closest post office to show their ID); similar to N26, Fidor asks for passport/ID proof + a video chat for ID verification.

International

International P2P Lending Volumes May 2018 (P2P Banking) Rated: AAA

Source: P2P Banking

So you think Alipay is just for the Chinese? (Chris Skinners Blog) Rated: AAA

It all started with a very good sum-up of Ant Financial’s recent $150 billion by Huy Nguyen Trieu, CEO @ The Disruptive Group. Ant were valued at around $50 billion when I first started to focus upon them two years ago, so a tripling in value in two years is notable, especially as it would make them the tenth largest bank in the world by value.

Second point is that valuation of $150 billion. In another conversation on social media, someone questioned that valuation (coincidentally a former member of Standard Chartered, Axel Winter, Former Global Chief Architect & Technology Strategy Head).

Source: Chris Skinners Blog

How Banks Can Stay Relevant in a Changing World (Payments Journal) Rated: AAA

The idea that we don’t care about our finances is counterintuitive. Hot new fintech start-ups and challenger banks are racing to develop apps providing evermore detailed analytics. But to make an impact and deliver real value, Brkic argues that banks need to take a step back and get better at delivering simple services that make a big difference.

Take overdraft charges. A service that alerts the consumer when they are about to go overdrawn and comes up with a solution (such as transferring money from a savings account, or temporarily extending a planned overdraft) is useful because it instantly solves a problem before it arises. For those living pay check to pay check, an avoided overdraft charge is more immediately beneficial than knowing that 10% of income is spent on dining out.

Meet the new bank. Same as the old bank

Advanced algorithms that promote generic, impersonal user experiences should be avoided. To immunise against engineers’ disease, Hammersley contends that inherently human interactions, such as customer service chatbots, should not be left solely in the hands of engineers.

Accessible Data and Artificial Intelligence: Is this the Future of Fintech? (Payments Journal) Rated: A

For organizations faced with the rise in product liability and fraud losses, AI is progressively positioned as a key tech to help robotize instant fraud detection and maximize performance in the near future. In addition, overlooked factors that influence the effectiveness of access data will include:

  • Geographical variances in data
  • Varied risk across products, apps, and channels
  • Accuracy of fraud classification
  • Relatively occurrence of fraud compared to transactions

With the advancements of AI and Accessible Data, we can add in precious metals, international currencies, peer-to-peer lending, identity protection, e-Wallet security, cloud computing access and more into the global payment experience.

Cyber, battery, sports tech win big investments (Isreal 21c) Rated: B

Lending Express of Tel Aviv, San Francisco and New York City, an AI-powered business loan marketplace with more than 55,000 customers in the US and Australia, secured $2.7 million in seed financing.

Millennials and money (Gulf News) Rated: A

Millennials make up about one-fourth of the global population today and are the inheritors of one of the largest inter-generational wealth transfers seen in human history, holding $17 trillion (Dh62.44 trillion) or about 10 per cent of the world’s private wealth. Banks and financial institutions have the challenge of catering to a newer type of customer in a rapidly changing technological environment, blurring boundaries and creating new business paradigms.

For banks, merely building a digital version of a branch is not the answer if your customers have never been to one. As author and futurist Brett King says, a bank is no longer somewhere you go to, it is something you do. Banks that are able to provide anytime, anywhere banking, combining tech and touch intelligently, stand to win.

Australia

How this fintech startup chief facilitated $ 50 million in Australian business loans without stepping foot in the country (Smart Company) Rated: AAA

Business loan marketplace Lending Express launched in Australia in 2016, and since then it’s facilitated $50 million in small business loans. But it was only last month that co-founder and chief executive Eden Amirav first set foot on Australian soil.

Now the Israeli startup has secured $US2.8 million ($3.7 million) in funding, Amirav has plans to further improve the artificial intelligence-enabled platform, and to get his message to even more Aussies.

Using artificial intelligence and machine learning, Lending Express connects small businesses seeking loans with alternative lenders. The business owner fills in an application via the online platform, and Lending Express runs an algorithm, immediately identifying the lenders that would be most likely to approve the loan.

Upcoming IPOs this week (Motley Fool Australia) Rated: A

According to ASX Ltd (ASX: ASX) there is only one IPO this week. That share is:

Prospa Group Limited (ASX: PGL)

Its principal activity is online lending to small businesses.

It’s looking to raise $146.5 million and list on 6 June 2018.

Asia

Fintech in Iran: Challenges and opportunities (Tehran Times) Rated: AAA

According to statistics published by International World Stats (IWS) until December 31, 2017, there are 56,700,000 Internet users in Iran, which is 69.1% of the population.

The internet finance in Iran is now mostly PSP-based, which offers shops online services for accepting electronic payments by a variety of payment methods including credit card and bank-based payments.

Authors:

George Popescu
Allen Taylor

Thursday May 10 2018, Daily News Digest

Quarterly Originations

News Comments Today’s main news: Quarz Capital Management outlines proposals to unlock >70% returns in LendingClub share price. Sharestates surpasses $1B in loan originations. Funding Circle hires first female NED. Today’s main analysis: Review of LendingClub’s Q1 2018 earnings results. Today’s thought-provoking articles: LendingTree’s monthly mortgage offer report for April 2018. Crowdfunding in the absence of liquidity constraints. Digitization […]

Quarterly Originations

News Comments

United States

United Kingdom

China

European Union

International

News Summary

United States

Quarz Capital Management Outlines Proposals to Unlock Return of >70% in the LendingClub’s Share Price (PR Newswire) Rated: AAA

Quarz Capital Management, Ltd. (QCM), an investment manager, today issued a letter urging LendingClub to take immediate and decisive steps to address the severe undervaluation of its share price and unlock a potential attractive total return of >70% for shareholders.

US ONLINE MARKETPLACE LENDING BEHEMOTH TRADING AT ‘STARTUP’ VALUATION
– POTENTIAL TOTAL RETURN IN EXCESS OF 70% OVER THE NEXT 3 YEARS –

LendingClub is the largest online lending marketplace platform in the US with an estimated ~50% market share1. The firm is projected to generate more than $700million of revenue on ~$11billion of loan originations in 2018E. LC’s substantial loan origination volume of more than $35billion since 2006 and its proprietary credit data increase the effectiveness of credit and risk models and enable the largest institutional investors to undertake the rigorous due diligence required to allocate capital on its platform.

Recommendation 1. Emphasize on cost control to increase profitability

Recommendation 2. Improve alignment of compensation system for top management

Recommendation 3. Increase shareholder return on sizeable cash holdings

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

During the first quarter, LendingClub is typically affected by the seasonality of the lending business so it’s beneficial to look both at the last quarter as well as the prior year period. In the first quarter of 2018, LendingClub posted originations of $2.3 billion. This represents a 5% decrease from the previous quarter, but an increase of 18% from the prior year period.

Source: Lend Academy

Revenue came in at $151.7 million, down 3% from the previous quarter but up 22% from the prior year period. They incurred a GAAP net loss of $31.2 million which included legal expenses related to legacy issues of $17 million.

Source: Lend Academy

 

Here’s Why Lending Club Is Soaring Today (The Motley Fool) Rated: A

The company called for 20% growth in its 2018 outlook, so 22% revenue growth is even better than expected. And, the company’s full-year outlook calls for total revenue in the range of $680-$705 million. At the midpoint, this implies average revenue of more than $180 million per quarter for the rest of the year. Considering that the first quarter’s revenue was “just” $151.7 million, this represents some impressive growth ahead.

Q1 2018: LendingClub Platform Update (Lending Club) Rated: A

During the first quarter of 2018, we continued to observe that credit performance across the industry is returning to long-term averages and interest rates are rising across fixed income assets.1 On the platform, we continue to see both of these trends in action: investors show higher demand for higher quality assets and are looking for higher interest rates overall.

Sharestates Surpasses $ 1 Billion in Loan Originations; Celebrates With $ 100,000 Giveaway to Investors (PR Newswire) Rated: AAA

Online real estate investment platform, Sharestates, today announced they have surpassed $1 Billion in loan volume – an incredible milestone that showcases their continued growth in the real estate investment space. To celebrate the achievement, Sharestates is giving away $100,000 to mark the occasion.

LendingTree Releases Monthly Mortgage Offer Report for April (PR Newswire) Rated: AAA

LendingTree today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

See the full report here.

CRE Crowdfunding Firms Continue to Scale Up Platforms (National Real Estate Investor) Rated: A

Crowdfunding firms have put a lot of effort into educating accredited investors on real estate crowdfunding and real estate investing in general. Those efforts are starting to pay for firms such as CrowdStreet. The firm hit a major milestone in March with more than 99,000 registered investors on its platform. CrowdStreet also is generating a high volume of repeat investors that are using crowdfunding to create diversified real estate portfolios with different sponsors, property types, geographic markets and risk profiles, notes Tore Steen, CEO, CrowdStreet.

The average investor on CrowdStreet has five investments in their portfolio, and over 20 percent of investors on CrowdStreet have invested more than $1 million across 12 unique investments.

Some crowdfunding platforms, such as Fundrise, Realty Mogul and Rich Uncles, have introduced e-REITs as a way to reach non-accredited investors and expand their potential customer base. But for the most part, crowdfunding firms are firmly focused on raising capital from accredited investors.

Groundfloor is one of the few crowdfunding platforms that is providing direct investment opportunities to non-accredited investors.

Banks in constant game of catch-up in combating mobile fraud (American Banker) Rated: A

Even as banks and other financial firms have invested heavily in technology designed to protect customers’ data, fraudsters have become more and more aggressive in trying to steal consumers’ identities to open accounts, take out loans or intercept payments.

According to ThreatMetrix, a global cybersecurity network used by banks and e-commerce firms to help determine the authenticity of digital transactions, 210 million attempted attacks were made on its network during the first quarter of 2018, a 62% increase over the same period last year.

Cohn says starting ‘digitized’ bank one option for next job (American Banker) Rated: A

Gary Cohn, the former director of the White House Economic Council, said he’s still weighing options for his next role but one possibility is a digital bank.

“I do have an idea for a company,” Cohn, who was president of Goldman Sachs before joining the Trump administration, said Tuesday in an interview on CNBC. “It would be an interesting concept playing on the knowledge I know from the banking world, in running a regulated bank, but in a digitized world.”

Where big banks fear to tread (Financial Times) Rated: A

Bank accounts for small businesses is an area of fintech not yet solved; Azlo is looking to fill that void as they believe banks have built their small business offering for the traditional small business owner; the new age business owner doesn’t have years of tax returns to share, providing accounts for them is not a risk banks want to take; Azlo also plans to move into loans later as an alternative to overdraft fees; they believe a straightforward, transparent offering will allow them to serve the type of small business banks have overlooked for years.

How Northwestern Mutual is using LearnVest to build advisory services (Tearsheet) Rated: A

Northwestern Mutual is growing its advisory services, building on the technology and expertise of LearnVest, which is currently shutting down and preparing for a rebrand as a content site this year.

In a statement, Northwestern Mutual said it wants to serve customers wanting an “end-to-end experience” with a human adviser using LearnVest’s digital planning platform, alongside a new content site. The integration also allows the parent company to concentrate on full-scale financial planning — a message consistent with a recent job posting that noted the company is scaling its technology and personal finance approach to reach millions of people across both LearnVest and Northwestern Mutual brands.

Bitcoin Sees Wall Street Warm to Trading Virtual Currency (The New York Times) Rated: A

The parent company of the New York Stock Exchange has been working on an online trading platform that would allow large investors to buy and hold Bitcoin, according to emails and documents viewed by The New York Times and four people briefed on the effort who asked to remain anonymous because the plans were still confidential.

Rebundling the bank: an interview with Renaud Laplanche (AltFi News) Rated: A

It’s clear that Laplanche has designed Upgrade from the start with scale in mind. Little more than a year after launching its first product, the company has 250 staff across three centres, San Francisco, Phoenix, and Montreal, and its series A funding round was no minnow at $60m. Originations are running at $100m a month, having reached a level after a year that it took Lending Club more than six years to reach. Laplanche said in April he expects to originate $2bn of loans this year.

Laplanche is scathing about credit cards, labelling them “fundamentally bad products”. They are expensive – the average interest rate on the US’s $1.03 trillion of balances is 17 per cent, he says, which rises to perhaps 25 per cent once fees are accounted for – and borrowers can run up debts without having to pay down the principal every month as they would with a loan. Many don’t even realise they are taking out a loan, and card issuers never use the word.

California bank goes online competitors one better (Banking Exchange) Rated: A

First Foundation Bank, an 11-year old $4.5 billion-assets bank headquartered in Irvine, Calif., gets that message. Lorrie Asker, senior vice-president, commercial banking, says she’s heard from many clients that they handle their finances and their banking between 10 P.M. and 2 A.M. In the Age of Amazon, everyone, she says, craves immediate online availability of services, including banking.

Marketplace business lenders frequently point out that busy small business owners’ lives often don’t synch with “bankers hours.” Being able to apply for credit with online players like Kabbage or OnDeck any hour of the day is a much touted advantage. It plays to the credit hungry who find their credit by Googling for it.

10 tips to beef up your crowdfunding campaign (Born2Invest) Rated: A

Researchers from Georgia Tech checked out nine million phrases culled from 45,000 Kickstarter campaigns, and they discovered the most-used phrases from fully funded campaigns versus those that failed.

Some platforms to consider include:

IndiegogoA popular crowdfunding platform that is home to mostly technological innovations. Aside from this, the platform also offers initial coin offerings (ICO) of new cryptocurrencies.

SeedInvestThis crowdfunding platform has a selection process for startups it wants to help out. While the company only accepts one percent of startups that apply, it presents a selection of highly vetted businesses.

StraightUpMade for real estate crowdfunding, the company invests along with its clients. If a client finds a project interesting, StraightUp also supports it by participating in the crowdfunding.

LendUp Bolsters Leadership Team Across Finance, Engineering, Credit Card Product, InfoSec, And Legal, (PR Newswire) Rated: B

LendUp, a fast-growing fintech firm for the emerging middle class, today announced a number of executive hires, including a General Counsel and VP of Engineering, as well as new heads of Capital Markets, Credit Card Product, and Information Security. These appointments will help LendUp expand the scope of its affordable, consumer-friendly products, as it becomes a first-of-its-kind destination for responsible spenders, savers, and strivers.

Beyond Spare Change: Debt Payment Startup Qoins Wins Country’s Largest Fintech Prize (Hypepotamus) Rated: B

Qoins, an Atlanta-based startup that rounds up users’ spare change to help them pay off their debt, took home the largest equity-free cash prize for startups in the country as the winner of the Fintech Innovation Award Challenge at this week’s FinTech South conference. The audience was able to vote on which of four finalists would receive the $50,000 check during a live pitch event.

4 Tips for Finding the Best Online Mortgage Lenders (Nerd Wallet) Rated: B

Since not every lender offers a fully digital mortgage and your experience can differ from one lender to the next, it’s a good idea to find a company that offers an online experience that meets your expectations. These four tips will guide you to the right fit.

  1. Know who offers the loan you need with qualifications you can meet
  2. Evaluate the customer service
  3. Find out if an online application is right for your situation
  4. Test-drive online lender platforms by getting preapproved

Laurel Road Named Winner Of Best Consumer Lending Product Category In 2018 Fintech Breakthrough Awards (PR Newswire) Rated: B

Laurel Road, an online lender and FDIC-insured bank, today announced that its online student loan solution has been selected as winner of the “Best Consumer Lending Product” award by FinTech Breakthrough, an independent organization that recognizes the top companies, technologies and products in the global fintech market today.

United Kingdom

Funding Circle, the UK’s biggest peer-to-peer lender, will this week take another step towards a £2bn London flotation by naming its first female non-executive director.

Sky News understands that the company, which is targeting a listing soon after the summer, will announce that former O2 executive Cath Keers is joining its board.

Ms Keers, who is an experienced non-executive director in the retail, technology and logistics industries, will bolster Funding Circle’s public market credentials as well as improving the gender balance in its boardroom.

NatWest fintech investments bear fruit as SME loans platform goes live (Computer Weekly) Rated: A

NatWest has launched a fintech (financial technology) lending platform aimed at small to medium-sized enterprises (SMEs) that cuts the time it takes to apply for a loan to 10 minutes. The project will help the bank fight off competition from peer-to-peer lenders.

The platform, known as Esme Loans, offers SMEs loans of up to £150,000 and makes it easier to apply for them by using the latest technology, including application programming interfaces (APIs).  The entire process is online and paperless, with customers able to apply in less than 10 minutes.

China

Six and the Citi unveil API partnerships in Hong Kong (Fintech Futures) Rated: AAA

Citi has made six API partnerships with corporations in Hong Kong as it looks to improve its digital banking services.

The six partnerships are:

  • HKTVmall integrated with Citi Pay with points API
  • EGL Tours integrated with Citi Pay with points API
  • AIA Hong Kong integrated with Citi Customers API
  • Octopus App integrated with Citi onboarding, cards and money movement APIs
  • Citi Visa Fetch App
  • Zurich Hong Kong integrated with Citi Customers API

China’s peer-to-peer lending hits the skids (Nikkei Asian Review) Rated: A

Peer-to-peer lending is slowing dramatically in China as a looming clampdown on the industry spurs platform providers to throw in the towel — sometimes after just a few months in business.

The balance of peer-to-peer loans, or financing between individuals, came to 1.29 trillion yuan ($202 billion) on April 30, up a mere 6% from the end of 2017. That increase represents a sharp slowdown from the 50% surge last year and the 100% jump in 2016, according to industry information provider WDZJ.com. Less than 200 billion yuan worth of contracts were signed for April, down around 20% year on year.

European Union

CROWDFUNDING IN THE ABSENCE OF LIQUIDITY CONSTRAINTS (All About Alpha) Rated: AAA

A forthcoming issue of the Journal of the European Economic Association will carry a study arguing that crowdfunding in the absence of liquidity constraints is a superior method of equity financing–superior to “traditional financing forms,” that is, unless those traditional financiers are fully competitive and perfectly informed.

By one estimate, global crowdfunding reached $195 billion in 2017. Of that, $13 billion was equity- or reward-based.

The 60 second interview: Lara Oyesanya (The Lawyer) Rated: A

Ahead of her session at the In-house Financial Services Conference, Lara talks to The Lawyer about the legal challenges of digital innovation and the way in which technology is transforming the in-house lawyer’s relationship with external counsel.

What legal challenges are brought forward by digitalisation?

Will AI function within current legal frameworks, do we actually know how it will function to properly assess legal risks, is monitoring required to ensure due legal process? There are then ongoing discussions around data, information and cyber security.Algorithms and Applied Programming Interfaces (APIs) are at the heart of digitalisation. With the continued development of artificial intelligence (i.e. algorithms with learning capabilities), there will be more legal challenges to address.

UniCredit Pushes on Cost, Asset Quality to Affirm Leadership (Bloomberg) Rated: A

UniCredit SpA Chief Executive Officer Jean Pierre Mustier is ramping up cost cuts and improving asset quality to keep his promise of building a leading pan-European bank.

A 5.2 percent decline in operating expense in the first quarter helped the bank increase net income to 1.11 billion euros ($1.3 billion) from 907 million euros a year earlier. That beat the 796 million-euro profit expected by the average of 8 analysts surveyed by Bloomberg.

UniCredit climbed as much as 2.6 percent in Milan trading and was up 2.4 percent at 17.96 euros as of 9:23 a.m. That boosts the bank’s gain this year to 15 percent.

Taaleri records a loss of about EUR 2.5 million from a German geothermal project (Globe Newswire) Rated: B

Taaleri Investments Ltd, part of the Taaleri Group, acquired the majority shareholding in Erdwärme Oberland GmbH (86.42% of shares and votes) from the Italian energy-company Enel on March 12, 2018.

Unfortunately, the tests on the first geothermic production site have proven that the project on the site in question is not commercially doable and, Taaleri Investments Ltd records hence a loss of approximately EUR 2.5 million, visible in Taaleri Groups half year results 2018.

International

Digitization of Money and Finance: Challenges and Opportunities (International Monetary Fund) Rated: AAA

The global economy is experiencing a non-stop digital revolution. Consider this one number: a recent study estimates that by 2025, what is called the “global data-sphere” will grow to 163 trillion gigabytes from 16.1 trillion gigabytes in 2016. That ten-fold increase will encompass data held everywhere from the cloud to our handheld devices.

It raises the prospect of expanding financial inclusion, especially in developing countries. The possibilities are exciting.

Companies working with artificial intelligence are exploring credit scoring based on payment data. Fintech startups in Latin America, Africa, and Asia are moving toward the use of peer-to-peer lending data, and information from mobile phone payments to build reliable credit databases.

Firmo protocol for financial derivatives on the blockchain (Next Big Future) Rated: A

The Firmo protocol executes financial contracts on blockchain technology. Contracts are written using the domain specific language; FirmoLang. FirmoLang provides a secure execution environment for financial contracts on decentralized asset-classes. Similar to software built for airplane coordination, FirmoLang is formally verified, yielding needed security benefits for smart contracts in finance. FirmoLang compiles directly to Ethereum Virtual Machine bytecode. The Firmo Protocol is designed to integrate with and support the advancing decentralized economy, including: Decentralized exchanges, p2p lending platforms, prediction market platforms and more.

Firmo is building the future of financial infrastructure. 1/7 of the world’s economy is derivatives, but these financial contracts are not securely available in the crypto economy yet.

Valorem : Blockchain, Loans, P2P Networks, Investing, Marketplace, Insurance and Charity. ICO is still live! (TechBullion) Rated: A

The Valorem foundation provides a decentralized platform enabled by smart contracts of the blockchain to allow users engage in cryptocurrency-based transactions and exchanges. The transactions between users are facilitated by an ERC20 standard token called VLR token.

Valorem Foundation’s VLR token is the utility token for this ever changing platform. Valorem Foundation is developing a unique platform with the following features: Microloans, Student Loans, Car Loans, P2P Networks, Business Investing, Crowdfunding, Buying/Selling of goods, Insurance and Charity.

Authors:

George Popescu
Allen Taylor

 

Thursday April 5 2018, Daily News Digest

Thursday April 5 2018, Daily News Digest

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-2. dv01’s Q1 securitization volume hits $2.58B. Revolut releases open API. RainFin acquires stake in 4AX. Today’s main analysis: International P2P lending volumes for March 2018. Today’s thought-provoking articles: Trends on millennials and money. A tale of two fintech sectors. Amazon could become the third largest […]

Thursday April 5 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-2 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-2 (“SCLP 2018-2”). This is a $544.6 million consumer loan ABS transaction.

This transaction represents SoFi Lending Corp.’s (“SoFi” or the “Company”) 14th rated securitization collateralized by a portfolio of unsecured consumer loans. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-2

Class Preliminary Rating Initial Class Principal
A-1 AA (sf) $277,700,000
A-2 AA (sf) $127,900,000
B A (sf) $75,000,000
C BBB (sf) $64,000,000

DV01’S Q1 SECURITIZATION VOLUME TOPS $ 2.58B, ENCOMPASSING NINE DEALS FROM SIX ORIGINATORS (DV01), Rated: AAA

dv01 closed out Q1 with nine new securitizations, totaling $2.58 billion in total issuance. This represents a 141% increase from last year’s Q1 volume, which totaled $1.07 billion.

Deals were originated by six different lenders, including Prosper, Upgrade, LendingClub, CommmonBond, SoFi, and Marlette. Three of the deals (UPT I 2018-1, UPT I 2018-2, and CLUBC 2018-2) were trust certificates. dv01 was loan data agent on eight of the nine deals; loan level data and reporting tools for all the deals are accessible through dv01’s Securitizations portal.

Millennials and Money: 30+ Trends Financial Marketers Need to Know (The Financial Brand), Rated: AAA

Here are over 30 facts, statistics and insights about Millennials banks and credit unions need to know to serve this essential market segment more effectively.

  •  Millennials want to learn how to feel financially empowered. Nearly three quarters say they feel confident in their ability to make financial decisions, but they still want to learn more. 92% believe that being educated on personal finances is important. (Source: CSpace)
  • Millennials are so serious about their financial health that more than a third (34%) have a written financial plan, much higher than the 21% of Gen X and 18% of Baby Boomers who have done the same. However, 78% rarely or never make spreadsheets for their finances, and 35% say they’d rather vomit than make a spreadsheet to help them manage their finances. (Sources: Schwab, Varo Money)
  • Maybe Millennials don’t need help from real human beings. With 85% saying artificial intelligence could help them better manage their finances, banks and credit unions should use digital tools and AI to deliver the financial insights they crave. Nearly half of Millennials say they want their bank to be able to anticipate their financial needs and offer them timely advice (Sources: Varo Money, Segmint).
  • Millennials’ top savings priorities are emergency funds (64%), retirement (49%), and buying a house (33%). Nearly half already have $15,000 or more in savings, and 16% have a whopping $100,000 or more in savings. (Source: Bank of America)
  • When it comes to saving, Millennials still have significant headwinds: three in four college graduates today will have a heavy student debt load. (Source: ABA)
  • The average graduate from the university class of 2016 has $37,172 in student loan debt, up 6% from the prior year. (Source: Student Loan Hero)
  • Student loan debt is such a burden that 70% of Millennials say that financial circumstances were a key consideration in deciding whether or not to go to college. (Source: Harvard)

Publicly Listed Fintech Companies – a Tale of Two Sectors (Lend Academy), Rated: AAA

(KFTX) is a good place to start.

Since inception in June 2016, the index has returned 46%, outperforming the broad market S&P 500 by a whopping 24%, and even the tech-heavy NASDAQ by a meaningful 9%.

Source: Lend Academy

Amazon could become the third-biggest US bank if it wants to: Bain study (CNBC), Rated: AAA

Amazon could rival the nation’s big banks in as few as five years, capitalizing off its digital prowess and massive consumer base, according to a Bain & Company report.

Pushing customers toward a co-branded banking account also allows Amazon to cut down on transaction costs, Bain said.

Amazon could – according to Bain calculations – avoid more than $250,000,000 in credit card interchange fees every year if finds a bank willing to partner on checking accounts.

Source: Bain & Company

Why Amazon won’t enter the advice market (Investment News), Rated: A

Despite what many see as the inevitability of tech giants entering the financial advice business, the economics of doing so — as well as the intensely regulated nature of the business — make their entry unlikely, according to a new report from Cerulli.

The Boston-based research firm says that “companies like Facebook, Amazon, Apple, Netflix and Google (FAANGs) have the tools and data to excel, but face significant obstacles that will likely preclude their entry,”

One major obstacle, Cerulli says, is the relatively small size of the market. The firm estimates that the “digital advice opportunity segment” represents only about 12% of investors, or a segment “that would be difficult to scale to be of strategic interest to the world’s largest technology providers.”

The Credit Junction Secures $ 150 Million Credit Facility from MidCap Financial (Business Wire), Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $150 million credit facility from MidCap Financial, a leading capital provider to the middle market specialty finance industry. The facility strengthens and expands The Credit Junction’s ability to deliver comprehensive capital solutions to businesses across the United States.

The Credit Junction combines traditional credit metrics with data intelligence and partners with business owners to deliver asset-based financing alternatives unique to the needs of each borrower. Since its launch in May 2015, The Credit Junction has helped businesses across the country achieve their growth objectives while supporting job creation and development in the communities they serve.

Real Estate Investment Platform, Sharestates, Changes the Game with User Experience (UX) (PR Newswire), Rated: A

Sharestates, an online real estate investment platform, announced today the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry.

Sharestates’ unique solution was designed by the company’s development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one stop shop” in real estate financing.

Banking Disruptors: Peer-to-Peer Lending and Payments (The Motley Fool), Rated: A

Peer-to-peer lending platforms such as Prosper and LendingClub (NYSE:LC) have changed the way people can borrow money, and apps such as Venmo and Zelle have made it easier and cheaper to send money.

In this segment from Industry Focus: Financials, analyst Michael Douglass and Motley Fool contributor Matt Frankel talk about the ways that technology is disrupting big banks, and what this trend could mean to the banking industry.

How Affirm Personal Loans Can Help You Finance Smaller Purchases (Student Loan Hero), Rated: A

The average student loan payment is $351. Between such a high monthly payment and rent, finding the money to furnish your home or buy a new computer can seem daunting.

If approved, you can now shop. When you’re ready to make a purchase, you can enter the total from your online shopping cart on Affirm’s site. You then choose an amount between $50 and $10,000. You’ll be provided virtual card information to complete the purchase. With some partner retailers, you might select Affirm at checkout instead.

LendingTree Launches Credit Analyzer, a Free Credit and Debt Analysis Tool (Lending Tree), Rated: A

LendingTree, the nation’s leading online loan marketplace, today announced the launch of its Credit Analyzer, a free credit and debt analyzer tool, which was created to help consumers avoid common credit mistakes, improve debt management skills and find the right financial products for their needs.

Credit Analyzer is a free tool that provides a deeper, instant analysis of consumers’ credit and debt situations and offers personalized recommendations based on individuals’ financial goals. The user experience is designed to make it easier for consumers to understand the most important factors that impact credit scores.

 

What will the financial services industry look like in five years? (Lend Academy), Rated: A

This article briefly touches on many of the themes being explored at our LendIt Fintech USA 2018 conference, which is now just days away:

Audits Will Go the Way of the Dodo Bird

The protocol of trust is here to stay, and it’s going to disrupt everything.

While the blockchain has not rendered audits unnecessary yet, I believe we’ll see it happen within the next five years.

Smart Contracts Are In, Long, Paper-Intensive Financial Processes Are Out

As I write this, Lending Robot is raising a private round of growth capital. The closing process, called “papering” for very obvious reasons, is just as onerous and Microsoft Word-oriented as I remember it back in the early 2000s when I was a young VC.

Fintech is Everywhere

Fintechs are enhancing the customer experience along four axes: choice, price, convenience, and predictability. They are meeting the needs of educated, aware, demanding consumers and they are attacking traditional financial institutions at every angle.

 

Five Things Fintech Startups Must Do In 2018 To Get Noticed, Adopted And Funded (Forbes), Rated: A

Here are five things the winners nailed that newcomers must do to compete:

  1. Build a seamless digital customer experience (CX) customized to each set of eyeballs, across platforms — plus, make financial services ubiquitous, instead of an unfortunate necessity.
  2. Streamline their lead generation and nurturing through automation, machine learning and AI, plus intelligent CRM throughout the customer journey. This powers faster, more accurate processes like loan origination, mortgage underwriting and credit application decisions, among others.
  3. Instead of being scared of increased regulation, embrace it as a driver of innovation.
  4. Upend an established Wall Street business model both by undercutting fees and over-delivering on performance.
  5. Find novel, values-driven ways to increase millennial participation in financial services.

Financing Small Businesses- 6 Tips For Finding An Online Loan (Bizztor), Rated: A

Online business loans are a popular option for financing small businesses. Over the years more small business owners have been turning to online lenders as banks have cut down on loans to smaller businesses.

With the assistance of technology and algorithm, online lenders are able to assess conventional credit standards like cash flow and personal credit score.

DriveWealth Raises $ 21M in Series B Funding (Finsmes), Rated: A

DriveWealth Holdings, Inc., a Chatam, N.J.-based fintech company, closed a $21m Series B funding.

The round was led by Raptor Group Holdings, SBI Holdings, Inc, and Point72 Ventures, LLC, as weel as existing investors Route 66 Ventures.

The company intends to use the funds to develop its technologies and scale its business.

Mosaic Readies New Solar Loan Deal (Global Capital), Rated: A

The San Diego-based company filed documents with the Securities and Exchange Commission on Monday for Mosaic Solar Loans 2018-1. The ABS-15G forms name Deutsche Bank and BNP Paribas as banks on the deal.

The transaction, Mosaic Solar Loans 2017-2, was priced at 185bp over interpolated swaps for the senior class, yielding 3.854%. Energy related ABS such as solar and Property Assessed Clean Energy (Pace) deals were heavily subscribed throughout last year, with strong issuance of residential Pace bonds and the first ever issuance of commercial Pace ABS from Greenworks Lending.

Laurel Road And Darien Rowayton Bank Officially Rebrand Under Integrated Laurel Road Name (PR Newswire), Rated: B

Laurel Road, an online lender and FDIC-insured bank, officially announced today that Darien Rowayton Bank and its national online lending division will rebrand under the integrated national Laurel Road brand. The new, unified Laurel Road brand represents a deep understanding of its customer base, best-in-class technology and industry-leading compliance and risk management.

Bankrupt Payday Lender Can’t Move Pa. AG’s Suit To Texas (Law 360), Rated: B

Think Finance LLC, a financial technology firm that critics say uses Native American tribes to skirt payday lending laws, failed to convince a Pennsylvania federal judge on Tuesday to move an action brought by the state’s attorney general to Texas, where it has filed for bankruptcy.

The company has been hit with lawsuits over its alleged role in several “rent-a-tribe” schemes, where a high-interest lender affiliates itself with a Native American tribe to shield itself from legal challenges.

Sarasota-Manatee ranks last for millennials buying homes (Sarasota Herald-Tribune), Rated: B

Millennials rank as the key target in the economic development world setting sights on future prosperity. A new study casts a pall over efforts to build the Sarasota and Manatee population of this prized demographic. Out of the largest 100 U.S. metropolitan statistical areas in the country, Sarasota-Manatee ranked dead last among cities favored by millennial homebuyers.

The study, conducted by LendingTree, focused on the percentages of all loan requests to the online loan marketplace that came from millennials. That figure for Sarasota fell far from top-ranked Des Moines, Iowa — 17.9 percent versus 42.4 percent. Fort Myers ranked just above Sarasota, with 19.8 percent.

The Online Lending Policy Institute (OLPI) Appoints Deputy Director (Lendit), Rated: B

Robert J. (Bob) Mullenbach, CRCM, Managing Director – Compliance Division Deputy at ProBank Austin – has been appointed as the Online Lending Policy Institute’s (OLPI) new Deputy Director. Mr. Mullenbach brings 25 years of regulatory compliance experience in billion-dollar financial institutions, regional and community banks, fintech’s, and leading consulting firms. In his current position, Bob audits clients on the myriad of regulatory requirements associated with consumer/commercial lending, bank secrecy act/anti-money laundering, privacy, and non-deposit investment products.

Microloans offer needy a better alternative (The Columbus Dispatch), Rated: B

Central Ohio chapters of the St. Vincent dePaul Society, an international charity run by Roman Catholic volunteers, give needy folks a better option through the society’s microloan program. Information is available through the organization’s website at svdpcolumbus.org.

Anyone of any faith who needs up to $500 for car repairs, school, home repairs or medical bills, can apply for a quick loan with a low interest rate and 12 to 15 months to pay it off.

Contrast that with the typical payday-loan operation, which loans a couple-hundred dollars and demands payment in two weeks. Many borrowers who are strapped enough to go to such a lender in the first place can’t pay it back that quickly. This leads to loans on top of loans, with tacked-on fees that can lead to an effective interest rate of nearly 600 percent.

SunTrust teams with fintech to offer loans for HVAC upgrades (American Banker), Rated: B

SunTrust Banks in Atlanta is teaming up with another fintech upstart to expand its reach in consumer lending.

The $202 billion-asset company said Wednesday that it has struck a partnership with the online lender Microf to offer point-of-sale loans to homeowners looking to replace aging residential heating, ventilation and air conditioning systems.

SunTrust will hold the loans on its books and a pay a fee to Microf for the referrals. Microf, based in Albany, Ga., offers the loans through its nationwide network of HVAC contractors.

United Kingdom

Revolut unleashes open API to all customers (Fintech Futures), Rated: AAA

APIs and open banking are hotter than a freshly tarmacked road in summer, and Revolut joins the mad-for-it crowd.

On its blog, the bank, which was launched in mid-2015 and offers a money transfer app, says account owners can generate sandbox and production keys, and set whitelisted IPs as an “extra layer of security”.

Away from these API days, the firm adds that over the last few months it’s been making updates to its business accounts.

New fintech fund could boost P2P sector (Peer2Peer Finance), Rated: A

At a time when investment trusts such as Victory Park Capital Specialty Lending have signalled a shift away from P2P opportunities, Augmentum Fintech’s investment adviser has hinted that P2P lenders could be included in the portfolio.

Augmentum Fintech was launched by Augmentum Capital, a venture capital (VC) firm backed by Lord Rothschild’s RIT Capital Partners, last month. The VC firm already had a 7.4 per cent holding in P2P giant Zopa worth £18.5m that has been transferred into the investment company portfolio and its founder Tim Levene, who is acting as investment adviser to Augmentum Fintech, said that the firm is well geared to the P2P sector.

FCA reveals it intervened in Collateral administration to protect investors (Peer2Peer Finance News) Rated: A

THE FINANCIAL Conduct Authority (FCA) has revealed that it intervened in the administration of Collateral because the peer-to-peer lender failed to seek its approval when it appointed an insolvency practitioner.

Wigan-based Refresh Recovery was selected by Collateral when the company shut down in February but it was revealed on Tuesday that the City watchdog was looking to appoint a different administrator.

“The Collateral companies were required to obtain the approval of the FCA when appointing an administrator,” the FCA said in a statement on Wednesday.

ISA countdown: The latest IFISAs on the market (Peer2Peer Finance News), Rated: A

March saw the introduction of tax wrappers from peer-to-peer property platforms The House Crowd and Safe as Houses, while EasyMoney, part of Sir Stelios Haji-Ioannou’s easy family of brands, launched its second IFISA offering.

Safe as Houses

The Safe As Houses ISA, which invests in loans made to Safe as Houses Group to develop, regenerate and sell on distressed properties, offers investors a return of six per cent.

The IFISA has a five-year term and requires a minimum investment of £5,000.

The House Crowd

The House Crowd’s IFISA invests in secured P2P loans and property development investments and offers a target return of seven per cent.

The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio.

Investors will get a fixed return paid in twice a year in October and April.

EasyMoney

The latest IFISA to hit the market before the deadline came from EasyMoney, offering target returns of 7.28 per cent. This eclipses the 4.03 per cent returns offered by its first product that launched in February.

The P2P lending platform said its new ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, limited to 75 per cent loan-to-value (LTV).

MINOR INVESTOR: An Innovative Finance Isa with a 7% rate is a tempting idea but tread carefully in the investing Wild West (This is Money), Rated: A

Only the peer to peer lending element can be included in an innovative Isa, not the equity version where investors take a stake in a company.

Obviously, innovative Isas don’t qualify for the savings element of the Financial Services Compensation Scheme that protects up to £85,000 per licensed bank.

Crucially, however, neither do they get the FSCS investing element that covers up to £50,000 in case your investing platform goes bust and hasn’t done what it is meant to with your money.

European Union

Robo advisors and the Data Revolution (GDPR) (AltFiNews), Rated: AAA

With just a month to go until the General Data Protection Regulation (GDPR) is implemented throughout Europe in May. We look at how the new regulatory regime will affect the nascent Digital Advice industry. Some of the upcoming regulatory changes issued from the EU and its commissioners should be positive for fintech asset managers.

With a clear focus on transparency, robo-advisors should look forward to the new era of information portability and openness.

The digital advice sector has from inception attempted to gain a competitive edge with clear transparent product engineering and pricing, but it won’t all be plain sailing and there may be headwinds ahead.

BANCO BNI EUROPA grows significantly in 2017 and attracts equity investor (Fintech Finance), Rated: A

2017 was once again characterized by the significant growth of Banco BNI Europa’s activity, increasing 41% in assets (from € 362M in 2016 to € 509M in 2017), 16% in customer deposits (from € 262M in 2016 to € 305M in 2017) and 379% in banking income (€ 2,8M in 2016 to € 13,2M in 2017). 

Net income reached € 2.3M, increasing regulatory capital to € 23.3M and the solvency ratio comfortably above the statutory limit at 13%.

International

International P2P Lending Volumes March 2018 (P2P Banking), Rated: AAA

Milestones achieved this month (overall volume since launch):

  • Landbay reached 100M GBP
  • Estateguru reached 50M EUR
  • Linked Finance reached 50M EUR
Source P2P Banking

Banking at a Tipping Point as Fintech Drives Change (Cash Lady News), Rated: AAA

According to Citigroup consumer banking currently generates around $870bn in revenues across Europe and North America, with digital innovators accounting for just 5% of that total. But if the report’s predictions are correct, by 2023, disruption by fintech companies will account for 17% of a total earnings pot of $1.200bn

Follow the Money

CitiGroup cites figures showing that global investment has risen from around $0.5bn in 2019 to just under $20bn today. And most of that investment – Citigroup puts it at 70% is focused on the key areas of personal and SME banking.

Read the full report here.

ROSCAcoin: A Self-Regulating, Autonomous and Decentralized Financial Platform for the Unbanked (BTC Manager), Rated: A

ROSCAcoin is a new decentralised autonomous and self-regulating platform built on the Ethereum blockchain. The project aims to develop an innovative financial infrastructure that allows creating solutions for people with little or no access to financial services. ROSCAcoin is set upon an ancient model of borrowing very popular in third world countries.

ROSCA, or Rotating and Saving Credit Association, is defined by a method of borrowing where a group of individuals agree to cooperate for saving and borrowing purposes within a pre-established period; is also a form of peer-to-peer banking and peer-to-peer lending. ROSCAcoin strives to introduce this method using the blockchain technology.

The platform is powered by its own currency RCA, which will be the engine of the whole ecosystem. By using smart contracts, ROSCAcoin is trying to build the ultimate financial solution for the unbanked.

“Stars are Aligned” for an Higher US Dollar Against the Swiss Franc (PoundSterling Live), Rated: B

The Dollar has risen 4.4% versus the Swiss Franc since mid-February and could be about to accelarate the move suggest analysts; this despite the sizeable global stock market sell-off which would normally be expected to support the safe-haven Franc.

Safe-haven currencies usually strengthen in times of fear, such as the present, however this does not appear to be the case with USD/CHF which has risen due to the USD outperforming CHF – not the other way round.

White Oak Signs Agreement to Acquire LDF Group (Globe Newswire), Rated: B

White Oak Global Advisors, LLC on behalf of its institutional clients (collectively “White Oak” or the “Company”), announced today that White Oak has agreed to expand its asset-based lending platform to serve clients in the U.K. and Europe through the acquisition of LDF Group (“LDF”), a U.K.-based finance company providing asset finance, business loans, commercial mortgages and education leases to small and middle-market companies.  Established in 1986, LDF is an industry leader and one of the largest independent finance providers for small businesses in the U.K.

India

Faircent brings Shalabh Gupta on-board as national sales head – lending (The Siasat Daily), Rated: A

Leading Peer-to-peer (P2P) lending company Faircent on Thursday announced that the company has hired Shalabh Gupta as national sales head – lending.

As an industry veteran with over 17 years of extensive sales experience with brands like the Times Group, Reliance Capital, HDFC Bank, and ITC Limited, Shalabh will play a crucial role in furthering the company’s impressive growth plans and vision as a part of its leadership team.

Aadhaar-Based EKYC Limitations Cause Trouble For Fintech Startups (Ink 42), Rated: AAA

Since the Supreme Court extended the deadline for linking of Aadhaar to host of services, the fintech segment has been riddled with burdens of limited Aadhaar-based eKYC. The companies have been unable to access Aadhaar database for verification of their customers.

Impact Of Aadhaar KYC On Fintech Startups

According to reports, fintech startups across the insurance, lending and broking sectors are being denied access to authentication agencies for eKYC to verify customer antecedents on the Aadhaar database amidst rising concern over data privacy.

UIDAI revokes e-KYC services for some e-wallets, online lenders (The Times Of India), Rated: A

In a move that seems to have left fintech players scrambling, the Unique Identification Authority of India (UIDAI) revoked on Tuesday their access to a dozen agencies that provide e-KYC verification and authentication services. Some of these agencies – KUAs (e-KYC user agencies) and AUAs (authorised user agencies) – will no longer be able to provide e-KYC verification to onboard new customers or authenticate financial transactions affecting e-wallets, online lenders, NFBCs and smaller fintech players.

Africa

RainFin acquires stake in 4AX (Business Tech), Rated: AAA

Fintech company RainFin has announced the conclusion of a transaction with 4 Africa Exchange Proprietary Limited (4AX), which will see the company sell to 4AX its corporate debt marketplace, in exchange for a strategic shareholding in 4AX.

RainFin’s credit marketplace technology has been utilised by companies to raise debt funding from both tradition and non-traditional sources since its formation in 2002.

Accra, Ghana to Host 2018 Startupbootcamp Africa (Tech in Africa), Rated: B

Accra, Ghana’s capital city will host the forthcoming Startupbootcamp (SBC) Africa Accelerator program. The SBC sponsors include the Old Mutual, BNP Paribas, RCS, PwC, and Nedbank. During the event, startups present to the panelists for about two hours.

Authors:

George Popescu
Allen Taylor

Wednesday March 2 2018 Daily News Digest

Alibaba and Tencent investments

News Comments Today’s main news: Vanguard partners with Raisin. Rumor alert: Upstart seeking $100M from investors. LendInvest changes commercial property products. Apple may be blocking Chinese P2P lenders from app updates. Today’s main analysis: PeerIQ’s MPL earnings insights report. (A MUST-READ) Today’s thought-provoking articles: Fintech holds promise to expand credit. How the PE lifecycle can be audited by the blockchain. How […]

Alibaba and Tencent investments

News Comments

United States

United Kingdom

China

European Union

International

Australia

Asia

Africa

News Summary

United States

Online lender Upstart is said to seek $ 100 million from investors (American Banker), Rated: AAA

Upstart, which was founded by Google veterans, is testing venture capitalists’ appetite for an investment round of about $100 million, said two people briefed on the matter.

The San Carlos, Calif.-based startup is looking to sell shares that would value the business at $500 million to $1 billion, said one of the people, who asked not to be identified because the discussions were private. This venture capitalist didn’t pursue a deal because of an existing competitive investment.

PeerIQ’s Marketplace Lending Earnings Insights (PeerIQ Email), Rated: AAA

    • Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income. However, an increasing supply for credit and demand for credit, as well as re-normalization trends and increased competition are leading to higher charge-offs.
Source: PeerIQ
  • Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.
  • Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.
  • GS & Morgan Stanley remain comparable in market cap, revenues, and margins – are focused on lending to improve ROE. MS is doubling the size of its warehouse lending footprint. GS continues to invest in Marcus and aggressively pursue M&A. If GS executes on its strategic plan of generating, in 5 years we should observe a growth in ROE from their consumer lending activities.
  • Bank FinTech partnerships, and M&A continues. Banks are either partnering with FinTechs or investing in beefing up their technology capabilities in payments, lending, digital banking and wealth management. Banks like JP are partnering with Amazon by rolling out co-branded checking accounts and credit cards. A specter is haunting financial services – the specter of Amazon.
  • Lenders are taking actions to pass rising rates on to borrowers to protect margins and investor returns. Lenders are also trying to reduce all-in funding costs by reducing the credit spreads on their securitizations.
Source: PeerIQ

Read the full report here.

 

Fintech Holds Great Promise To Expand Credit, Says Fed’s Bank Supervision Ace (Forbes), Rated: AAA

Fintech holds great promise to expand credit, Federal Reserve Vice Chair for Bank Supervision Randy Quarles told a forum on financial services for the underserved Monday.

While promoting the advantages of algorithm credit rating and other forms of fintech, he voiced it is important for banks to understand the risks when they offer new products of their own or partner with emerging fintech companies.

Touching on another issue, Quarles said the decline in lending by small banks to small businesses can be attributed in part by entrepreneurs using big bank credit cards.

THE PE LIFECYCLE CAN BE AUDITED BY BLOCKCHAIN (AllAboutAlpha), Rated: AAA

The hyperledger fabric is an open-source cross-industry collaborative effort to create a standardized enterprise code base. No cryptocurrency is required, the network is permissioned, and the system of consensus is PBFT rather than proof of work.

That latter point is important in the finance/auditing context, and so is worthy of some explanation here. The usual system in blockchains is “proof of work.” The creator of a new “block” within the chain is required to do something mathematically laborious, a calculation, also called “mining.” This is what allows the trustless and distributed consensus that made possible the creation of “bitcoins” and the launch of blockchain as a technology.

But “proof of work” takes up a lot of computational energy, and for some non-currency uses of blockchain it is just too much trouble. So alternatives protocols have developed within the blockchain world, and one of them has the ungainly name “practical byzantine fault tolerance.” That term comes from a game-theoretical issue called the “Byzantine Generals’ Problem,” which is something like the “prisoner’s dilemma” on steroids. But it is generally best to ignore all of that and just to think of the alternative protocol as PBFT.

Avant Founders Raise $ 15 Million for Blockchain Firm, Token Sale (Bloomberg), Rated: A

The team that founded marketplace lender Avant Inc. raised about $15 million to start a firm that will use blockchain technology and digital tokens to motivate companies to share data about customer identities and credit worthiness.

The venture, which is called Springcoin but does business as Spring Labs, is building a decentralized network that seeks to allow lenders, banks and data providers to pay one another for direct access to consumer information, Spring Labs Chief Executive Officer Adam Jiwan said in an interview. Many companies are hesitant to give out customer data due to concerns about regulation and security, while others don’t have a financial incentive to do so, he said.

TD Bank in commercial lendtech revamp with nCino (Fintech Futues), Rated: A

Chalk up another big win for cloud-based lendtech vendor nCino. The North Carolina-based fintech has signed a deal with TD Bank in the US that will put nCino’s Bank Operating System to work for the bank’s corporate and commercial lending divisions, reports David Penn at Finovate.

The technology is already live with employees in the TD Equipment Finance department. nCino’s platform will give prospective business borrowers faster decisions on their loan requests, as well as add transparency to the loan process. The Bank Operating System will also enable the bank’s credit risk management, sales, and underwriting professionals to benefit from insights into TD Bank’s commercial lending portfolio and better collaborate on deals. Built on top of Salesforce.com, nCino’s Bank Operating system features CRM, loan origination, account opening, workflow, content management, business process management, customer engagement, and instant reporting all on a single platform.

How blockchain is affecting banking (Stitcher), Rated: A

In this episode the host John Siracusa and co-host Sarah Bacehowski. Interview Jason Jones co founder of the Lendit Fintech Conference they discuss how blockchain is affecting national and global banking today and how it may impact credit and lending.

Fintech’s Focus Shifts Toward Finance (CFO), Rated: A

The financial technology industry is maturing at a dizzying pace, having exceeded a combined $31 billion in total funding last year alone, according to KPMG’s recent Pulse of Fintech report.

With this sustained influx of funding, innovations within the space are moving traditional banks to partner up with fintech firms. That benefits both sides as well as customers like corporate finance departments.

On Deck Capital and Lending Club have both recently found themselves in publicly precarious situations related to risk management. On Deck has had to change its strategy several times over the years to address investor concerns. Lending Club experienced a systematic fraud issue that resulted in a CEO departure, stock-price drop, and public cynicism. Other, smaller companies have faced similar problems stemming from a deficient focus on this important role.

Top 5 Debt Consolidation Loan Companies for 2018 (Student Loan Hero), Rated: A

Using a personal loan to consolidate debt can simplify your financial life. But this move is most worthwhile if you can get debt consolidation loan rates that are lower than what you’re currently paying.

This overview can help you quickly find debt consolidation loan companies with the best rates. From there, you can find the lender that offers the best rates and terms to help you get ahead of your debt.

Source: Student Loan Hero

Omnichannel and Short-Term Lending (Lendit), Rated: A

Research conducted in late 2016 noted that three things were apt to cause the average customer to end his or her interaction with a company. These included being transferred between multiple employees when seeking a resolution to a problem, long wait times, and having to repeat themselves during a transaction process. To solve these kinds of discrepancies between customer expectations and the quality of service provided across multiple platforms, more companies are taking an omnichannel approach to the customer experience—especially in the financial services industry.

Below are three questions and answers about how this novel approach to customer experience can benefit both short-term lenders and borrowers.

  1. What does the omnichannel approach offer businesses and customers in the short-term lending industry?
  2. What obstacles stand in the way of the mass adoption of omnichannel lending?
  3. What is the best way for short-term lenders to implement an omnichannel model?

LAUREL ROAD DEBUTS TRULY DIGITAL MORTGAGE PLATFORM (PR Newsire), Rated: A

Laurel Road, an online lender and FDIC-insured bank, today debuts a truly digital mortgage product that uses the company’s secure lending technology to offer home buyers and owners personalized mortgage options at real, competitive rates. Laurel Road’s platform builds mortgages entirely online, simplifying the process with transparent fees and a customized end-to-end digital experience with human support only when customers need it.

Additional product features include:

  • Truly digital experience – Laurel Road’s mortgage product puts customers in the driver’s seat by enabling a digital-first user experience, with human support via phone or online chat as needed but never required outside of closing
  • Stated pricing – Customers who have a price range or specific house in mind can input these details upfront to generate customized options and rates
  • Maximum affordability – By inputting basic financial information, customers can determine the maximum affordable loan they’re eligible for early in the process with no commitment required
  • Added savings – Customers have the ability to earn savings off their closing costs by using the online capabilities throughout the process, such as data verification
  • Optimized for efficiency – Digitally-enabled experience and built-in incentives for options that streamline the process allows Laurel Road to invest more in customer experience and deliver mortgages in just a few weeks
  • Educational resources – Prompts integrated into the user journey will help customers establish their financial readiness and evaluate how Laurel Road can be a partner in the process
  • Expert options and clear terms and fees – Based on a customer’s preferences, 3 unique mortgage options are presented in a transparent way so one doesn’t get caught with misleading teaser rates or hidden fees
  • Soft credit pull – Laurel Road will conduct a soft credit pull during preliminary stages to avoid credit penalties when customers are still exploring options

DiversyFund Hires New Chief Technology Officer (Digital Journal), Rated: B

DiversyFund has named Mark Brogowicz as its new Chief Technology Officer as the firm ramps up its efforts to reinvent alternative investing through its revolutionary crowdfunding platform.

Brogowicz will lead the firm’s product and engineering teams. Brogowicz previously helped Los Angeles startup PeerStreet launch their product and is now looking to replicate that process in San Diego.

MassChallenge wants to pair fintech startups with finance giants (Boston Business Journal), Rated: B

MassChallenge is preparing to launch a program for startups specializing in financial services technology, or fintech — a fast-growing field that’s increasingly a top priority for Boston’s investment firms, banks and insurance companies.

While details are still being worked out, the program is expected be similar to the Boston-based organization’s accelerator for health technology startups, according to MassChallenge. That program, known as Pulse@MassChallenge, pairs later-stage startups with some of the industry’s biggest local and national players, like Aetna and Vertex Pharmaceuticals. The program provides them with mentoring, office space, and an opportunity to compete for cash prizes.

Shinnecock Partners Publishes an Investor’s Guide to Fine Art Secured Lending (PR News), Rated: B

Shinnecock Partners, a 28-year old family office boutique with significant expertise in alternative finance and fintech, has published “Creative Collateral: Lending Against Fine Art,” by the firm’s founding partner, Alan C. Snyder and co-authors/firm analysts Michael Cervino and Christian Williams. The 16-page report outlines a little-known niche investment opportunity, art-secured lending, which, as reported by Deloitte, is a $15 – $20 billion market that is growing at an annual rate of 13 percent.

The research paper covers:

  •     An overview of the market and the “buzzword” lexicon
  •     Key factors to consider
  •     Risk mitigants
  •     An investor participation road map

You can access the report at: 

Private Lending Association to Offer Class for Certified Fund Manager Designation (PR Newswire), Rated: B

The American Association of Private Lenders (AAPL) is offering the Certified Fund Manager (CFM) designation class May 9, 2018, at the Geraci Activate Conference, located at the Sofitel Hotel in Beverly Hills, California. AAPL members are eligible for the CFM designation and may register for the class at  or  The CFM designation class requires a separate registration from the Geraci Activate Conference.

Seek Capital Wins Again, #1 Customer-Rated Lender for the Business Loans Category from LendingTree in Q4 2017 (PR Newswire), Rated: B

On LendingTree’s platform, Seek Capital has a 4.9 out of 5 star rating. 57 different businesses have reviewed Seek Capital on LendingTree.

Seek Capital specializes in getting startup business loans for new businesses. While there is a large array of funding options for established businesses, new businesses are left with little to no options. Seek Capital provides solutions to this under-serviced segment of the business funding market. In 2017, Seek Capital originated close to $100 million for startup businesses in the form of an unsecured line of credit.

United Kingdom

LendInvest changes commercial property products (Mortage Introducer), Rated: AAA

Borrowers wishing to fund the purchase of, extend the lease on, or refurbish a commercial property where the use will remain commercial, are directed to the updated commercial bridging product.

LendInvest has increased the maximum term for its commercial bridging loans from 12 to 24 months, and reduced rates.

Its commercial bridging rates vary between LTV but the base 60% has been reduced from 0.90% to 0.79%.

Best refer-a-friend schemes: how you can earn up to £500 (Which?), Rated: A

NatWest has launched its first ever refer-a-friend scheme, which could earn eligible customers up to £500 – and it’s not the only company offering incentives for signing-up your loved ones.

Until 20 April 2018, eligible customers will receive up to £500 when their friends and family join NatWest. But it’s not open to everyone, with NatWest randomly selecting 300,000 customers for the test phase.

Refer-a-friend: current accounts

Earn £500 with NatWest-NatWest recently launched its first ever refer-a-friend scheme, offering existing members the chance to earn up to £500 by recommending its current accounts to friends and family.

Earn up to £500 with Nationwide-Nationwide is offering existing members the chance to earn up to £500 by encouraging friends and family to switch their current account.

Earn £25 with Vanquis -Vanquis Bank customers could earn £25 for convincing friends and family to sign up to the Vanquis Credit Card.

Earn £25 vouchers with Scottish Friendly-Customers of Scottish Friendly could earn £25 by introducing a new friend or family member to the company.

P2P securitisation boom still on the cards (Peer2Peer Finance), Rated: A

PREDICTIONS of a securitisation boom in the peer-to-peer lending sector last year failed to materialise, but analysts are still optimistic about the market.

Ratings agencies such as Moody’s predicted a boom in P2P securitisations, but the only activity in 2017 was a £208.9m Zopa deal led by investment trust P2P Global Investments.

Ratings agency S&P Global is also expecting more activity and has predicted a 30 per cent increase in securitisations from marketplace lenders around the world during 2018.

7 TECH STARTUPS THAT ARE TAKING IRELAND BY STORM (Irish Tech News), Rated: A

Pro-business policies have made the country an extremely favourable environment for startups, and the capital can lay a convincing claim to be Europe’s Silicon Valley. Here are just seven of the most interesting and highly awarded startups finding success in Ireland.

Mingo- Mingo are aiming to replicate the success of digital currencies like Bitcoin and Ethereum by floating their own currency called (quite logically) Mingocoin.

Trezeo- Firms are using digital tools to revolutionise the process of transferring and storing traditional currencies as well as digital-only ones. Trezeo are a perfect example of this mindset, and offer a product that’s of use to the everyman rather than the big financial institutions.

FlenderFlender is one of the success stories from crowdfunded investment platform Seedrs. The premise: peer-to-peer lending, where lenders can set their own rates and terms for borrowers to agree to.

Don’t Innovate for Innovation’s Sake. Understand the Need for Change. (Retail Tech News), Rated: A

Here, Luke Griffiths (pictured below), general manager, Klarna UKexplains why that means it’s crucial that retailers consider the shopping journey from browsing through to purchase, delivery, and returns.  

It’s no longer good enough for retailers to wait on the sidelines while others make the first move into innovation – something which was highlighted in a recent white paper Klarna produced in association with Internet Retailing. In it, we explored the main qualities needed to be successful in today’s ever-changing retail sector.

Retailers can’t afford to ignore more innovative payment options. This was highlighted by recent Klarna research, which found that 53% of shoppers are looking for new, easier ways to pay online; while 56% would buy more online if there was more variety in payment options available.

 

British Business Bank provides 1pm with £35m funding line (Leasing Life), Rated: A

The British Business Bank provided 1pm Group with a £35m asset finance facility which will be used mainly on hard assets through its subsidiary Bradgate Business Finance.

At the end of February 1pm has entered into a cooperation agreement with Mintos to be a loan originator on its online marketplace for loans.

1pm is the first loan originator from the UK to access the Mintos marketplace and joins approximately 30 other loan originators globally.

 

 

It’s time to crack down on high-cost credit cards, says Labour MP (The Investment Observer), Rated: B

Stella Creasy is hoping to crack down on high-cost credit cards, introducing a cap on fees and interest charges.

The Labour MP, who was credited with the caps on interest rates and fees charged by payday loan companies, will attempt to enforce similar laws for credit cards on in Parliament on Tuesday.

The FCA has ruled out capping credit card costs after reviewing the market last year.

 

China

Apple App Store Said to be Blocking Chinese Peer to Peer Lenders from Updating Apps (Crowdfund Insider), Rated: AAA

We have received some information from an insider regarding Chinese peer to peer lending platforms being unable to update their Apps in the Apple App store due to a regulatory disconnect.

The problem is that not a single Chinese peer to peer lender has passed the necessary evaluations as regulators have not yet processed any. The first batch of approvals from the Chinese authorities is due at the end of April with the deadline by the end of June. According to the source, it is even more perplexing due to the fact that having an updated iOS App is necessary to comply with the Chinese regulations and pass the tests.

The Apple enforced process is described as follows:

  • We need to update our iOS App so that we can provide updated features to customers that are in compliance with regulations
  • Local financial regulators will not allow us to complete the record-filing process if they see that we have not come into compliance across all of our platforms (Android, iOS, PC)
  • If we can’t complete the record-filing process, then we will not be allowed to update our business license to include “internet loan information agency” in permitted activities
  • If we can’t update our business license, we can’t provide the necessary documentation to App Review to have our App Update approved
  • If we can’t get our iOS app updated, then we won’t be in compliance with regulations
  • Dead-end feedback loop back to point #1….
European Union

Vanguard Teams With German Fintech Raisin (Investopedia), Rated: AAA

Vanguard, the king of passive investing and one of the world’s largest fund managers, is partnering with Raisin, the German fintech, enabling some of its investments to be sold on the fintech’s platform.

Raisin, among Europe’s largest fintechs, counting more than 100,000 customers, will offer four portfolios comprising index or exchange-traded funds from Vanguard and BNP Paribas. The Financial Times reported that the investment portfolios have annual costs on average that are less than 0.5%. According to The Financial Times, this is the first time Raisin is getting into the investment area, previously focusing its efforts on brokered savings deposits.

Banks deploy ID software for client verification (Financial Times), Rated: A

Banks have begun to implement new technologies to help verify who the customer is, though the new GDPR rules in Europe could complicate usage; the General Data Protection Regulation, which will restrict how companies collect and store data, allows for customers to ask for their data to be removed and non compliance results in huge fines; banks have started to slowly add new technology but they are still figuring out where to limit storage; new companies are trying to sell services into bank that allow them to collect information but store it in a certain way to be compliant; with new technology being developed so rapidly, governments need to ensure they keep up with innovation and clearly tell the market how to comply.

German fintech Penta launches new business banking platform (AltFiNews), Rated: A

Berlin-based Penta has announced its newest fintech “Compass”, a platform that allows incorporating businesses in Germany to deposit their share capital and open a bank account in under 24 hours.

According to Penta, incorporating a business can take up to 6-8 weeks because of the bureaucratic process of opening a bank account and registering with the correct government bodies, which is legally required in Germany. Penta’s latest proposition will allow founders to open a bank account in a process that takes less than 15 minutes, completing the whole process online for free.

 

International

BBVA-backed fintech launches global bank account (American Banker), Rated: AAA

A new fintech backed by the Spanish bank BBVA aims to do something that others before it have failed to do: simplify international payments.

The fintech, Denizen, claims it has created a “global banking platform” that allows customers to receive money in one country and pay it out in another immediately, avoiding international transfer fees and eliminating currency exchange fees.

The firm says the cross-border money movement service is the first in a planned series of products. Denizen is currently available to expatriates living in Spain and the United States. The service is set to expand in 2018, adding as many as 10 European Union countries in the second half of the year as well as the United Kingdom.

Finastra appoints new CTO to lead next wave of financial services innovation (Fintech Finance), Rated: B

Finastra today announced that Eli Rosner has joined the firm as Chief Product and Technology Officer. Eli is responsible for global product and technology strategy and will support Finastra to deliver world class products, fully integrated solutions and its open FusionFabric.cloud platform for innovation.

Eli brings more than 25 years of industry experience to the role at Finastra. He joins from NCR Corporation where he served as CTO and Head of Product Management. Based in London, Eli will lead a global team of strategy and product managers, enterprise architects, data scientists and software engineers.

Australia

Online lender launches new loan portal (The Adviser), Rated: AAA

A custom-built introducer portal designed to facilitate fast, real-time processing of loan applications for brokers has been launched by an Australian marketplace lender.

Online lender Zagga this week launched the new portal, which uses custom-built algorithms to match wholesale investors with borrowers.

Speaking to The Adviser, Zagga CEO Alan Greenstein said the portal would provide brokers with simple, fast, and direct access to the loan application process from start to finish.

Sydney Angels funds QPay $ 570k to steal millennial students from banks (Finextra), Rated: A

Australia’s first ever student marketplace app, QPay, has raised $570,000 from a series of high profile investors, including Sydney Angels and the Sydney Angels Sidecar Fund 2, to break into student banking through the release of a student-targeted QPay MasterCard.

QPay aims to use the QPay MasterCard to capture the largest cluster of millennial consumers at the point when they’re most likely to begin making serious financial decisions – when enrolled in tertiary education.

Asia

How Alibaba and Tencent became Asia’s biggest dealmakers (Financial Times), Rated: AAA

The China Music story shows just how hard it can be to say no to Tencent — and the other big player in the Chinese tech world, Alibaba. With their large resources and long-term perspective, the two Chinese groups are transforming Asia’s investment landscape, posing challenges for private equity and venture capitalists as well as the start-ups looking for funds. In some parts of the region, SoftBank, the Japanese investment group, is playing a similar role.

The reach of Tencent and Alibaba in their home market dwarfs that of the big tech groups in the US. While the latter accounts for less than 5 per cent of all venture capital flows in their home market, Alibaba and Tencent account for 40-50 per cent of venture capital flows in mainland China, according to data from McKinsey.

If the venture capital market in China has become a fierce battle between Alibaba and Tencent, in other parts of the region it is often a three-pronged competition that also includes SoftBank.

 

Can Korean entrepreneurs help create Indonesia’s next unicorn? (The Investor), Rated: A

Indonesia is home to four unicorns — startups whose value reaches over US$1 billion — Go-jek, Traveloka, Tokopeida and Bukalapak. But the world’s fourth populous country with more than 250 million potential spenders wants more such success stories.

“Currently, we have four startup unicorns from Indonesia but none are from fintech services. I hope to see the next unicorn from this field,” said Rudiantara, adding that he believes P2P lending fintech startups have a chance to become the next unicorn.

His wish may soon become a reality as Indonesia’s market potential, combined with the government’s push for creating a startup hub are attracting aspiring entrepreneurs from all around the world.

Africa

How technology is changing wealth management (Money Web), Rated: AAA

The investment world is no different. Robo-advice is but one small part of the broader fintech landscape, but it has already made a major impact on the investment space through improved access and by allowing investors to plan for specific needs without the use of a traditional advisor. Technology has also made pricing more competitive.

According to Accenture, global investment in fintech ventures tripled from just over $4 billion in 2013 to more than $12 billion in 2014.

Authors:

George Popescu
Allen Taylor

Wednesday January 17 2018, Daily News Digest

European alt SME lending

News Comments Today’s main news: Wells Fargo is closing branches left and right. Repeal  of payday lending rule under consideration. Moody’s assigns provisional ratings to SoFi Professional Loan Program 2018-A-LLC. RateSetter leads in personal loans. Curve launches. Victory Park Capital looks overseas. Today’s main analysis: How Lendix blazes a trail in SME lending. Today’s thought-provoking articles: Why regulation is crucial. Wells […]

European alt SME lending

News Comments

United States

United Kingdom

China

European Union

International

Asia

Africa

Canada

News Summary

United States

Wells Fargo is getting more aggressive with branch closures (Tearsheet), Rated: AAA

Wells Fargo is charging toward its goal to cut over 800 branches by the end of 2020, it said in a presentation of its fourth quarter earnings on Friday.

 

Wells, which has been struggling to cut costs while it continues getting hit with legal fees following its various scandals, expects to save $4 billion as a result of the plan.
Source: Tearsheet

Consumer Financial Protection Bureau considering repeal of payday lending rule (NBC News), Rated: AAA

The bureau, which came under control of the Trump administration late last year, said in a statement Tuesday that it plans to take a second look at the payday lending rules. While the bureau did not submit a proposal to repeal the rules outright, the statement opens the door for the bureau to start the process of revising or even repealing the regulations. The bureau also said it would grant waivers to companies as the first sets of regulations going into effect later this year.

Moody’s assigns provisional ratings to SoFi Professional Loan Program 2018-A LLC (Moody’s), Rated: AAA

Moody’s Investors Service has assigned provisional ratings of (P)Aaa (sf) to Class A-1 Notes, the Class A-2A Notes and the Class A-2B Notes to be issued by SoFi Professional Loan Program 2018-A LLC (SoFi 2018-A). The collateral underlying the transaction consists of SoFi’s private student loans, which are loans the government does not guarantee. Our cumulative net loss expectation for SoFi 2018-A’s loan pool is approximately 2.0%.

Issuer: SoFi Professional Loan Program 2018-A LLC

  • $55,000,000 Floating Rate Post-Graduate Loan Asset-Backed Class A-1 Notes, Assigned (P)Aaa (sf)
  • $358,500,000 Fixed Rate Post-Graduate Loan Asset-Backed Class A-2A Notes, Assigned (P)Aaa (sf)
  • $236,800,000 Fixed Rate Post-Graduate Loan Asset-Backed Class A-2B Notes, Assigned (P)Aaa (sf)

Magilla Loans Platform Surpasses $ 4.5B Loan Origination Milestone (PR Newswire), Rated: A

Magilla Loans, a search engine for loans that connects borrowers to banks without requesting personal information, announced it has surpassed $4.5 billion in aggregated loans from top banks across the U.S. The Magilla platform provides business owners with access to multiple financing options, including access to business, home and real estate loans.

UpLift Closes Financings of $ 90M (FINSMES), Rated: A

UpLift, a Sunnyvale, CA-based travel financing company, closed financings of $90m.

The company received:
– a $75m credit facility in partnership with funds managed by affiliates of Fortress Investment Group, and
– a $15m equity round which includes participation from previous investors including PAR Capital with Draper Nexus, Highgate Ventures, and former Expedia CEO Erik Blachford.

NextCapital does $ 30-million VC round with a staggering objective that’s taking shape first with John Hancock (RIABiz), Rated: A

The shoot-the-moon robo strategy of NextCapital Advisers Inc. is looking up now that John Hancock Financial Services Inc. has come out of pilot and State Street Global Advisors became a partner in going after RIAs.

The Chicago-based digital advisor, founded in 2013, announced it more than doubled its backing with $30 million of venture round led this time led by Oak HC/FT of Greenwich, Conn. See: NextCapital raises $16 million as its founder goes where Financial Engines’ 401(k) robo strategy didn’t.

All told, the firm has raised $54 million: Six million dollars in August 2014, $18 million in 2015 and, just recently, this $30-million round.

Borrowers in the Lone Star State Can Now Get a Better Mortgage (Digital Journal), Rated: A

Better Mortgage, a digital mortgage company focused on improving access to home financing for a new generation of homeowners, is now available to Texas homebuyers. Better will now be able to serve more than half of Americans who are looking to own or currently own a home. In 2017, Better expanded its footprint in major real estate markets around the country, with Texas being the latest licensed states.

Texas is Better’s 14th market. In 2018, they expect to continue their expansion, focusing on geographies that help first-time homebuyers invest in their communities by putting down roots.

Gary Lieberman of Laurel Road (Lend Academy), Rated: A

In this podcast you will learn:

  • The history of Darien Rowayton Bank.
  • Why Gary decided to buy this small community bank in 2010.
  • How the bank has grown since Gary took it over.
  • How student loan refinancing first got on his radar decades ago.
  • When DRB originated their first student loan.
  • The advantages of being a bank and a fintech platform.
  • Some of the affiliate partnerships DRB has.
  • Other verticals where DRB has offerings today.
  • Why DRB rebranded to Laurel Road in 2017.
  • The scale they are at today with student loan refinancing.
  • Their approach to securitization.
  • How their loans have been performing to date.
  • The profile of their typical borrower.
  • How they market their offerings.
  • What the future holds for Laurel Road.

Refinancing Student Loans Gets Mixed Report (247WallSt), Rated: A

More than 45 million Americans have borrowed $1.45 trillion in student loans to help pay for their post-secondary educations. Repaying those loans can be tough, especially if the loan amount is high and pay for the first job after graduation is low.

Student loan marketplace and refinancing website LendEDU has just released its second annual report on the state of the student loan refinancing market. Here are several highlights from the report:

  • Average credit score of an approved refinance applicant is 764.
  • Just over 58% of 2017 applications are denied.
  • The average interest rate on a refinanced loan is 5.56%. The average rate rose 74 basis points year over year from 4.82% in 2016.
  • The average size of a refinance loan was $66,453. The 2017 average was more than 23% higher year over year.
  • Less than half of approved applicants actually end up refinancing their loans. In 2016, just over 33% of all applicants completed the loan process.

Reliamax’s Michael VanErdewyk: ‘We’re seeing a move towards more private student loans’ (Tearsheet), Rated: A

With all the excitement around online lending, there are still some spaces that have a long growth runway. One of the most persuasive growth opportunities is private student lending. Macroeconomic and policy changes are contributing to the growth thesis but so too are the number of local lending institutions that want to move into this asset class.

Rising costs of higher education
The cost of education continues to increase and the number of kids in school isn’t declining. So, it’s a big opportunity. Really, we have to talk about the cost of education. The cost of higher education in the U.S. today costs over $400 billion a year. About 25 percent of that is free money (grants and scholarships). Another 25 percent is federal student loans. The remainder — about $200 billion a year — is really family contributions.

The focus on private student loans
If you look at the total outstanding student debt, there’s about $1.4 trillion in federal student loans and $100 billion in private student loans, comprising only about 7 percent of total outstanding student debt.

CreditVest starts crowdfunding advisory firm (BizJournals.com), Rated: B

Jon Mauro founded Realty Mentors with Andrea Humphrey, who is president and owner of CreditVest, to focus on individual investors who want to participate in commercial real estate crowdfunding.

Zelle is now running TV ads (Tearsheet), Rated: A

Zelle is spending “tens of millions” of dollars on a television ad campaign featuring spoken word artist Daveed Diggs.

Early Warning, the bank-owned consortium behind the peer-to-peer payments platform, aired the first ad Saturday during the National Football League’s divisional round of playoff games and will continue to run them alongside unifying cultural events like the Grammy Awards, the NBA All-Star Game and the Super Bowl pre-game show. They’ll also run during popular shows on Bravo, Comedy Central, The Discovery Channel, ESPN and MTV.

Zelle is trying to build some brand recognition for itself among its target audience, mobile users, in an effort to compete with Venmo.

An investing platform founded by a 25-year-old went free — and now it’s facing a backlash from its rivals (Business Insider), Rated: A

M1, which was founded by CEO Brian Barnes when he was 25, originally charged users 25 to 40 basis points to use its platform, which allows users to buy fractional stocks and invest in pre-built portfolios. In December, it decided to go free, and make money strictly on the backend, by selling flow to trading firms and lending out non-invested funds sitting in users’ accounts to banks. The company also plans to offer margin trading to its users.

Since going free in December, M1 has seen daily inflows hit as high as $1 million, and a 10-fold increase in the number of new accounts each day.

Still,  M1’s robo rivals aren’t convinced the strategy will work for the small company.

Tipalti Launches Payables Automation Partner Program (BusinessWire), Rated: A

Tipalti, the leading global payables automation platform, today announced the launch of its Partner Program, which will offer accounting firms, financial institutions, system integrators, ERP resellers/VARs, consultants, and partners who work with the office of the CFO, the ability for their clients to leverage Tipalti’s software to eliminate the friction, risk, and time spent on manual accounts payable operations.

Key Features of Tipalti’s Partner Program:

  • Training and support for partners as they assist their clients
  • Option to pass exclusive savings on to their clients
  • Option to receive income stream through revenue-sharing
  • Low-impact engagement with minimal investment by partner

STOCKHOLDER INSPECTION RIGHTS SURVIVE CHALLENGE IN DELAWARE (AllAboutAlpha), Rated: A

On December 29, 2017, the last business day of the expiring year, the Delaware Chancery Court, in a memorandum of opinion by Vice Chancellor Slights, upheld stockholders’ statutory books-and-records inspection rights against a defendant corporation that sought to invoke and considerably to widen the scope of the Delaware Supreme Court’s Corwin decision of 2015.

The significance of this is that Delaware, some impressions to the contrary, is not a corporate-management-always-wins state. It was not so before the Corwin decision, nor did that decision make it so.  That ought to be good news for activist investors and their counsel. There may be alpha, or at least leverage toward alpha, lurking in the right to inspect books and records.

United Kingdom

RateSetter leading the way for personal loans (RateCity), Rated: AAA

Interest rates for personal loans listed on RateCity range from as low as 3.57 per cent to as high as 48.00 per cent.

The average personal loan interest rate was 11.89 per cent at the end of December, according to an analysis of the dozens of lenders listed on RateCity.

RateSetter, a peer-to-peer lender, has a one-year unsecured personal loan with an advertised rate of 3.57 per cent and a comparison rate of 3.92 per cent.

Curve, the fintech that connects all your cards to a single card and app, gets full consumer launch (TechCrunch), Rated: AAA

Curve, the London fintech startup that offers a platform that lets you consolidate all your bank cards into a single Curve card and app to make it easier to manage your spending, is finally launching to U.K. consumers. Up until now, the service remained in beta and was only officially available to business users.

In a call with Curve founder and CEO Shachar Bialick, he described the consumer launch as a major milestone for the company, noting that 50,000 people have signed up to its waitlist, in addition to the 100,000 or so users who joined Curve in its beta phase. It’s free to join, although a premium version of the Curve card is also available for £50 that offers additional perks.

How P2P could be a financial lifeline for UK landowners (Bridging&Commercial), Rated: A

A recent study of 172 farms by the Prince’s Farm Resilience Programme found that just 16% made a profit from their farming activities over the period assessed. The analysis found that instead many farms are now reliant on alternative income streams to turn a profit, such as tourism, renewable energy and selling their products directly to consumers.

But moving into alternative areas of business requires capital. And – with the average farm in the study making a loss of more than £20,000 from its farming activities – it may be capital that landowners require to invest in their business to prevent a loss.

Folk2Folk champions local lending because we believe in creating financially and socially sustainable communities by matching local businesses with local lenders.

Robo advice platform citing AI and machine learning raises £562k on Crowdcube (AltFi), Rated: A

Marketsflow, a new digital wealth management platform closed its fully funded investment round via equity crowdfunding.

Initially looking to raise £210k, the fundraise has seen more than £562k of commitments from nearly 800 investors giving Marketsflow a pre-money valuation of £2.4m.

What we learned about fintech from some of the biggest brains at Clifford Chance (Legal Cheek), Rated: A

What kind of financial technology has come across your desk at Clifford Chance, then? (Here comes the educational bit.) Chapman identified four technologies driving change:

Marketplace lending: crowdfunding or peer to peer lending, with the potential for “disintermediation” of the financial institution that used act as middleman for loans.
Big data and AI: you might just have seen it in the newspapers. But it’s closer than you think: if you’ve applied for a credit card, according to Chapman, chances are that a machine took part of the decision on whether or not to approve you.
Mobile payments: forget branches, even internet banking on a web browser is old hat. Some banks, indeed, exist only as apps (I instantly thought of my Revolut app, which started out offering as a slick currency exchange platform, but is now offering credit).
Blockchain and distributed ledger: different things, but often used in combination. These are “the pieces of technology that underpin the Bitcoin phenomenon”. It’s not just media hype, either: Clifford Chance is “seeing a lot of work in this space”.

5 Top Alternative Investments in the UK (What Investment), Rated: B

1. Crowdfunding

Rather than rely on venture capital trusts and angel investors, many new businesses are using crowdfunding to get off the ground. In fact, UK platforms such as CrowdCube and Angels Den have raised over £72 million from investors this year.

5. Peer-to-peer lending

Peer-to-peer lending allows you to loan money to people through online platforms, without a bank. These agreements are arranged through peer-to-peer lending platforms such as Zopa, Prosper and Lending Works. These peer-to-peer companies are typically FCA regulated and they organise credit and ID checks as well as set interest rates, collect payments and pay your returns.

After PSD2 and GDPR, what Wayfinding Signs will guide visitors through an Open Bank? (LinkedIn), Rated: A

When branch banking was the mainstream method of service distribution in financial services, both a bank’s customers and potential business partners could follow clear signs that directed them where to go and who to contact. The first sign that a bank sent its customers and potential business partners was the geographic location of a bank branch.

One in four very-low income households are struggling to pay bills or debt, with 10 per cent spending more than a quarter of their salary on credit card repayments, a report has found.

Data from the Institute for Fiscal Studies (IFS) showed one-sixth of the poorest households in Britain were in arrears on repayments and bills.

A further 10 per cent were spending at least a quarter of their monthly income on unsecured debts, such as credit cards and payday loans.

China

‘Freedom at a Price’: Why Regulation Is Crucial to Fintech’s Future (Wharton), Rated: AAA

In recent years, financial technology, or fintech, has dramatically expanded financial inclusion in China and elsewhere in Asia. Small and midsized businesses that have been underserved by banks now have access to capital, as fintech enterprises use the internet and mobile technology to reach those borrowers; leverage data analytics to build credible and innovative risk profiles to gauge creditworthiness, and are able to scale their reach exponentially with 24/7 customer windows and without the baggage of fixed-cost overheads that typically shackle traditional banks. Not surprisingly, the unmet needs of the underserved have provided huge market potential for fintechs.

Credit China FinTech, which is listed on the Hong Kong Stock Exchange as Chong Sing Holdings FinTech Group Ltd., or CSF, provides third party payments, online investment, technology-enabled lending, and traditional loans and financing services. Today, it has more than 51 million users who generated transactions worth RMB 868 billion ($130 billion) in the first half of 2017.

At the same time, both have proved massively popular in China which accounts for roughly half of the world’s digital payments and three-quarters of global, online P2P lending volume, according to Pricewaterhouse Coopers.

For one, default rates are higher than anticipated on peer-to-peer lending platforms. Also, instead of being disrupted by the fintechs, traditional banks have entered the peer-to-peer lending space to become the dominant players, he added.

China regulator says fintech must serve real economy (Finextra), Rated: A

Jiang Yang, vice chairman of China’s Securities Regulatory Commission (CSRC) was speaking at the Asian Financial Forum to an audience of fintech entrepreneurs. The development of fintechs should benefit the real economy and not “a small group of people”, he said in comments reported by the Nikkei Financial Review.

European Union

Lendix Raises €200 Million Institutional Financing to Trailblaze European Alternative SME Finance (Crowdfund Insider), Rated: AAA

The European Investment Bank Group (EIB), CNP Assurances, Eiffel IM, Groupama, Zencap AM, Matmut and Decaux Frères Investissements are among the first investors joining to finance Lendix’s latest investment vehicle to fund unsecured loans to SMEs in France, Spain and Italy. New institutional investors from banks and asset management firms in Spain and Italy are joining. As of now, €120 million of the planned €200 million are already committed and the first loans from this fund will start rolling out as soon as February.

Source: Crowdfund Insider

As of December 2017, Lendix originated a cumulated worth of €143 million of SME loans, a 90% increase from 2016.

Online Lender Robo.Cash Shares Insight into Investor Activity (Crowdfund Insider), Rated: A

Peer to peer lender Robo.cash has shared a “financial portrait of a Robo.cash investor.”

According to their results, investors from a younger age group, 18-24 years old, usually deposit circa €200 at a time and rarely withdrew  any funds. The maximum funding size is characteristic of the older age groups: the average deposit of investors of 35-44 years old is equal to €879 and for those who are older than 45 years old is €838.

Millennials of 25-34 years of age invest about €679 on average making frequent deposits in comparison to the younger age group.

Approaching energy crowdfunding with eyes wide open (YourIS.com), Rated: A

youris.com met Sissy Windisch, from the German company Green Crowding, who published a guide for new small investors, to allow them to make the best decisions. The document was released under the EU project CrowdFundRES.

This is a different kind of crowdfunding, unlike what platforms such as Kickstarter do?
With Kickstarter you donate money, so a comic book for example can be published, or you just want an artist to keep on creating art. Instead, the type of crowdfunding we are interested in is debt-based, which means that you get your money back plus interest. If you finance a solar roof on a school for five years, you get 3% every year and at the end of five years you get your money back.

Could you tell us more about debt-based crowdfunding?
Debt-based funding is already one of the largest types of crowdfunding. I would say one of the biggest areas in terms of funding volume at the moment is real estate. I think for 2016 alone the funding was estimated at around 3.5 billion dollars.

Why can’t the traditional financial institutions, such as banks or investment firms, offer these services?
What we’ve often seen, particularly for renewables, is that banks and other traditional financial institutions often look for large projects to invest in. They prefer investing in one 50-million wind park than in 500 small photovoltaic installations.

Swaper Offers One-Click Portfolio Investing (Benzinga), Rated: B

What does your company do? What unique problem does it solve?

Swaper CEO Peteris Kisis: Swaper is a loan marketplace offering an easy investing in pre-funded consumer loans originated by its parent company Wandoo Finance Group in Poland, Georgia, Spain, Denmark and Russia. All investments offered on our marketplace start from 12 percent annual interest and are BuyBack guaranteed, meaning Swaper will compensate investors both for the invested principal and accrued interest in case the borrower is late with payments.

International

Top backer of US subprime lenders eyes overseas opportunities (Financial Times), Rated: AAA

Victory Park Capital, a Chicago-based investment firm, has been a vital source of debt capital for a string of online lenders, including Avant, Elevate and LendUp, all of which focus on borrowers in the subprime segment. Total commitments and investments come to about $6.5bn from more than 90 deals, mostly in the US.

The firm, which was founded 10 years ago, is seeking to add to a portfolio including zip Money in Australia, Kreditech in Germany and Oakam in the UK.

(The Merkle), Rated: A

Vitalik Buterin, the creator of the Ethereum Network, recently proposed a new method for decentralized fundraising called the “DAICO”. Incorporating elements of Decentralized Autonomous Organizations, or DAOs, the new model is designed to minimize the complexity and risk associated with ICOs.

Buterin outlined the new model in a post on the Ethereum Research Forum entitled “Explanation of DAICOs”. In the exposition, the Russian-Canadian programmer outlines a new model that integrates characteristics of DAOs into ICOs to create a new model he refers to as the “DAICO”.

Source: The Merkle
Asia

New Crypto Exchange and 1000 Percent Revenue Growth Could Make KPAY The Crypto Stock To Own In 2018 (Baystreet), Rated: AAA

The little-known Indonesian digital payments company KinerjaPay (KPAY) reported another blowout quarter in December with sales that topped the previous 3 month period by a whopping 1,100%!

Revenue and User-Base Growing Parabolically? +1100% in Q3

KinerjaPay is a digital payments platform in Indonesia and South Asia, and the company ha been growing at an astronomical rate in the last year. In the third fiscal quarter of 2017 ended September 30, 2017, the company posted quarterly transactional revenue of $1.76 million, an 1,183% increase over $149K in the second quarter.

User growth is accelerating as the company brings on more partners for digital payments and bill pay capabilities in a region of the world where a fraction of people have a bank account or credit/debit card. The rate at which KinerjaPay is adding customers grew 58% in the 3rd quarter; the company reported 10,962 new users compared to 6,904 new users in the same quarter of last year, demonstrating just how fast they’re adding users for a small emerging company.

Asian stocks bounce back, with Hang Seng closing at a record (MarketWatch), Rated: A

Asian equity markets on Tuesday found their footing after some initial softness, leaving Hong Kong’s benchmark at a record closing high.

The Hang Seng rose 1.8% to 31,904.75, topping the previous high set on Oct. 30, 2007.

Japanese stocks rebounded from Monday’s selloff, with a weaker yen helping the country’s exporters. The dollar gained 0.2% to ¥110.7200, pushing the Nikkei to finish up 1% at a fresh 26-year high.

Africa

Fintech startups took nearly a third of all African venture funding in 2017 (Quartz), Rated: AAA

Almost a third of funding raised by African startups in 2017 was in the fintech sector as investors bet on consumers turning to more formal financial services in a region where just 17% of the population have banking accounts. Venture funding for African startups jumped by 51% to $195 million in 2017, according to a report from Disrupt Africa.

The success of mobile money technology like M-Pesa in Kenya and across East Africa has long shown the potential for other underserved markets. M-Pesa’s success is likely also behind for the increasing presence of mobile networks in the African financial sector and the convergence of the two sectors (pdf page 11).

Nigeria, South Africa and Kenya remained the countries with highest funding raised, consistent with their record from previous years.

Canada

Still a market for short-term loans (Edmonton Journal), Rated: A

Payday loan licences in Alberta have fallen by more than one-quarter, to 165 from 230, and industry officials predict even more payday loan stores will be shuttering their doors this year.

Before then, rules around payday loans in Alberta allowed for the second-highest interest rates in Canada, with lenders being allowed to charge up to $23 for every $100 borrowed, up to a maximum of $1,500. Now, the rate is $15 per $100 — touted to be the lowest in Canada — and borrowers are allowed to repay the the loans in instalments over two months. Lenders are also no longer allowed to penalize customers for paying back loans early and must restrict the number of times a lender can make preauthorized withdrawals.

Authors:

George Popescu
Allen Taylor

Tuesday June 27 2017, Daily News Digest

shadow banking

News Comments Today’s main news: Venmo is testing a physical debit card. Zopa shares its banking plans. Ranger Direct Lending enters arbitration with Investee Princeton. Aegon Life explores digital channels for selling policies. Today’s main analysis: What’s driving the growth of shadow banking? Today’s thought-provoking articles: Prosper performance update for May 2017. The fastest consumer lenders to $1B in […]

shadow banking

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

Canada

News Summary

United States

Venmo is testing its own physical debit card (recode), Rated: AAA

Venmo has been testing its own version of a physical debit card that would allow people who use its app to make purchases in brick-and-mortar stores using money stored in their Venmo account, according to multiple sources.

One potential advantage is that it would allow Venmo users to immediately spend money that is sent to them via the app without having to wait a business day for a deposit of those funds to appear in their bank account.

Prosper Performance Update: May 2017 (Prosper), Rated: AAA

Today we are sharing performance data for the Prosper portfolio for May 2017.  The weighted average coupon for assets originated through Prosper’s platform in May 2017 was 16.34%i, the highest for a monthly vintage since 2013.

Additional highlights from the May Update include:

  • Continued credit tightening can be seen via an increase in expected loss rate, coupon, Loss/FICO, and Coupon/FICO compared to prior months.
  • Prepayments for the 2017 origination months continue to trend above prior vintages.
  • 2015 and 2016H1 vintage delinquencies continue to trend below their prior peaks.

What’s driving the growth in ‘shadow banking’ (Chicago Booth Review), Rated: AAA

According to Chicago Booth’s Gregor Matvos, Booth PhD candidate Greg Buchak, Columbia’s Tomasz Piskorski, and Stanford’s Amit Seru, much of the growth is due to regulations that have pushed banks out of traditional lending businesses. The researchers also attribute some growth to online technology that has lowered the barrier to entry in markets where lenders once needed networks of physical branches to have any hope of building business.

The researchers focus on the US residential lending market, the largest consumer loan market in the country—and the market that drew the most attention from regulators after 2008. Between 2007 and 2015, shadow banks nearly tripled their market share, from 14 percent to 38 percent.

During the study period, lenders that originated loans online (fintech lenders) saw market share rise from 4 percent to 13 percent—but that remains less than half of the shadow-banking sector.

Source: Review.ChicagoBooth.edu

Fiserv partners with fintech startup to launch digital adviser (American Banker), Rated: A

The core banking software provider Fiserv and the fintech startup GoldBean have partnered to provide a digital adviser meant to provide that extra assistance.

GoldBean has an “investing for beginners” platform that was designed to promote financial literacy. By analyzing people’s spending, it creates customized portfolios featuring companies and brands with which end users are already familiar. GoldBean is a graduate of the INV Fintech Accelerator run by Fiserv and Bank Innovation.

Fiserv hopes that by integrating GoldBean education and advice into its Unified Wealth Platform, some of these investors will eventually interact with the human wealth managers who use Fiserv’s platform, for instance when they need to talk about a life change.

Amazon, Klarna, And The ‘Creative Destruction’ Of The Banking System (Seeking Alpha), Rated: A

As a consequence, Klarna has become “one of the most highly valued technology groups in Europe. A round of fundraising in 2015 valued it at $2.25 billion. And it is solidly profitable.”

The crucial thing here is that Mr. Siemiatkowski wants Klarna to stay focused. He believes that other innovative FinTech organizations will fill in the rest of the financial landscape. That is, banking will be done by numerous FinTech companies moving at the speed of technology innovation, not at the speed of ordinary banks.

First, there is so much to be gained from creating a network or a platform that is more inclusive than separate “specialists” joining together to create “full bank offering.”

Second, there is the issue of regulation. Banks are heavily regulated.

What Mr. Bezos of Amazon.com and Mr. Siemiatkowski of Klarna seem to be doing is reinventing banking on the basis of a payments platform that can serve many purposes. The “creative destruction” of the banking system as we know it appears to be just beginning.

The Fastest Consumer Lenders to $ 1 Billion in Originations (Lend Academy), Rated: A

Anyway, I did a little digging and through publicly available information I was mostly able to figure out how quickly many of the major platforms reached their first billion in total loans issued.

1. Marcus – 8 months

2. SoFi – 14 months – Based on data from Kroll Bond Rating Agency, we know that by August 1, 2016 (when the SCLP 2016-2 securitization closed) SoFi had issued at least $1.3 billion in loans based on the loan pool balance of their first three personal loan securitizations. Based on that data I estimate they crossed the $1 billion mark around April of 2016, 14 months after they launched the product.

3. Marlette – 17 months

4. Avant – 28 months – Avant launched in January of 2013 and when they crossed $1 billion in May 2015 they were the fastest platform to that milestone at the time.

5. Lending Club – 65 months – Lending Club was the first platform to cross a billion dollars back in November 2012.

6. Prosper – 98 months – Prosper was the first marketplace lender to launch in this country all the way back in February 2006. For many years it was just Lending Club and Prosper in the online consumer lending space and for much of that time Prosper was the market leader. Prosper crossed $1 billion in April 2014. They took over seven years to do their first $500 million and just 11 months for them to go from $500 million to $1 billion in total loans issued.

ezVerify and LendingPoint Launch ezCarePoint for Medical Payments (BusinessWire), Rated: A

Today at the HFMA ANI 2017 conference, ezVerify and LendingPoint announced an exclusive partnership that will make it easier and more affordable for consumers to pay their medical bills. Working together, the two companies will provide a new service called ezCarePoint, which will allow patients to accurately predict their out-of-pocket expenses and apply for flexible payment plans and loans to cover the costs of medical procedures.

According to a report by The Commonwealth Fund, more than 30 million people do not get necessary medical attention out of fear that doing so would be financially burdensome. Many Americans do not have a clear understanding of their insurance coverage and out-of-pocket obligations — as a result, consumers face medical costs they weren’t expecting, and practitioners lose money on unpaid bills.

By integrating the ezVerify and LendingPoint technologies, ezCarePoint will help patients verify their insurance coverage and payment responsibility for health care services before the procedure takes place, preventing incidents where patients unexpectedly find themselves responsible for bills outside of their insurance coverage. If the patient can’t pay the out-of-pocket costs up front, they will have the option to apply for a loan and payment plan quickly and easily from the ezCarePoint platform. Patients will be notified of approvals in a matter of seconds, and upon approval, LendingPoint will pay the loan proceeds to medical practitioners within one business day to pay the patients’ out-of-pocket medical costs up front.

Euler Hermes Digital Agency Announces CRiskCo Partnership (PR Newswire), Rated: A

Euler Hermes, the world’s leading trade credit insurer, today announced an innovative partnership with fintech credit risk analysis company, CRiskCo. With a focus on revolutionizing factoring, trade and supply chain finance, CRiskCo uses state-of-the art artificial intelligence (AI) credit analysis and fraud detection processes.

Christophe Spoerry, Euler Hermes Digital Agency (EHDA) co-founder, said, ” EHDA and CRiskCo are working together to evolve trade credit insurance and risk management, particularly at the transaction and single invoice cover levels. This has the potential to offer small-medium enterprises (SMEs) significantly more protection when doing business, by providing innovative, simple and affordable customer analyses.”

EHDA recently launched its first breakthrough product – Single Invoice Cover – which protects companies from non-payment by business customers. Cover is provided transaction by transaction while optimizing end-to-end supply chains and extending optimal credit terms to buyers. Based on a proprietary application program interface (API), it creates a seamless process for businesses, while facilitating a comprehensive and granular management of credit exposure.

RIAs Should Embrace Alternative Investments or Risk Client Attrition (WealthManagement.com), Rated: A

Before the emergence of crowdfunding-style investment platforms, it was hard for investors to reap the benefits of investing in a diversified portfolio of rental real estate. They can now, and you can show them how.

Wealth management is a “share of wallet” game. If you diversify your solutions, clients will end up with more diversified risk—and that’s the point.

Lending Club’s first securitization is a big deal (American Banker), Rated: A

Lending Club’s first securitization of its own consumer installment loans is an important step in rebuilding its business following a scandal last year over its corporate controls.

The company has been seeking to broaden its funding sources after concerns about the integrity of its data caused many investors to pause or scaled back their purchases. Lending Club originally acted purely as a matchmaker, connecting borrowers with lenders over its platform. It did not hold on to the loans.

Money in Cleveland tech-startup community begins to circulate (Cleveland.com), Rated: A

Splash Financial is a perfect example of this long journey.

Splash Financial completed a $3.3 million financing round in January of 2017 from several local angels and will become the newest entrant in the booming digital lending marketplace that includes LendingClub, OnDeck, SoFi and Cabbage.

The company is now working with banks to help build an efficient lending platform where a strong capital source (i.e. – the banks) do not have immediate access to the doctor marketplace.

1 in 5 Small Business Owners Would Give up a Vacation Day Rather Than Their Smartphone (Small Biz Trends), Rated: A

According to a recent survey of small business owners on their mobile device use by peer-to-peer lending marketplace Funding Circle, one in five (20.4 percent) small business owners said they would rather give up a vacation day than their smartphones for a week.

Funding Circle also found more than half (56 percent) of small business owners surveyed find their smartphone gives them the flexibility to work wherever and whenever they want, so they can make time for other passions.

Nearly half (49 percent) said their smartphone keeps them in closer contact with loved ones while away from home — via tools like text messages throughout the day and video calls while traveling for work.

Forty-four percent said having their smartphone helps them relax during vacation time because it gives them peace of mind to know if there’s a problem with the business at home, they are accessible.

Follow the yellow Laurel Road (Transform Magazine), Rated: A

National online lender Laurel Road, previously known as Darien Rowayton Bank Lending Division, is a division of the Connecticut-chartered Darien Rowayton Bank, which launched over a decade ago in 2006. Wishing to define its bank lending division as the first source of income advice and financial security for the state’s many university students, DRB turned to the New York office of international design agency Brand Union to create an identity and help carve out its unique path.

Laurel Road’s new strapline, also developed by Brand Union, is ‘Rewarding determination’ and acts with double meaning, being reminiscent of both the student’s educational motives and the lender’s financial role. It also serves to encourage its customers to pursue their college journey to its conclusion,

loanDepot: “The Momentum is Just Starting” (Crowdfund Insider), Rated: B

One of the most promising is loanDepot, the creation of CEO Anthony Hsieh, has become one of the top mortgage lenders in the US. Additionally, loanDepot has migrated into the personal loan space too challenging online consumer lenders like LendingClub.

RealtyShares Sources Debt For Seattle Student Housing Deal (Bisnow), Rated: B

RealtyShares, an online marketplace for real estate investing, has sourced $11.9M for the acquisition and partial recapitalization of a 10-property portfolio of student housing in Seattle.

3 Alternative Ways To Hedge Against A Market Downturn (NASDAQ), Rated: B

When approached correctly, peer-to-peer lending can be among the safest ways to invest right now.

The key to making it safe is to diversify across many loans. Diversification eliminates the risk of default because any single loan you invest in can default without sinking the entire investment.

I consider peer-to-peer lending via a reputable platform the safest way to invest right now while still earning respectable returns on your money.

United Kingdom

Zopa boss Janardana details plans for customer-centric bank (AltFi), Rated: AAA

Zopa aims to launch its bank next year with a series of products based on simple, flat pricing – and a direct challenge to the industry’s traditional strategy of milking their large “back books” of existing long-term customers who rarely switch or shop around.

Jaidev Janardana, Zopa’s chief executive confirmed in an exclusive interview that credit cards and auto-finance would be among the first products, and would charge a single rate for all customers, instead of ultra-low teaser offers that flip to high rates after a fixed term, catching borrowers who do not switch.

He pointed out that Zopa already follows this approach in its P2P lending with all investors receiving the same rate, and returns changing for everyone simultaneously. The company expects to apply to the Prudential Regulation Authority for its banking licence later this year.

Ranger Direct Lending Enters Arbitration Against Investee Princeton (London South East), Rated: AAA

Ranger Direct Lending Fund PLC said Monday it has entered arbitration proceedings against the parent company of investee firm Princeton Alternative Income Fund Ltd, following a provision taken over a loan portfolio.

Ranger said Monday it is now seeking to enforce redemption and provision of financial information rights against Princeton via the arbitration proceedings.

Lendy highlights gap between property prices and key influences (Bridging & Commercial), Rated: A

Lendy stated that residential property prices have risen by 20% since the start of 2014, however, the LPP, the new property market index, has only increased by 17% during the same period with the gap between them continuing to grow.

Fintech credit firm Quint posts record revenues (Express), Rated: A

FAST-growing UK fintech group Quint is forecasting a £50 million plus turnover this year after seeing a record 64 per cent rise in growth and revenues rise to £32 million.

The main drivers are the launch of its consumer credit comparison site MoneyGuru.com as well as strong growth in its lending platform Monevo and Monevo data services business.

Racefields to buy and sell debt from bridging lending market (Bridging & Commercial), Rated: A

Racefields is seeking to connect with bridging lenders who are interested in refinancing parts of their loan book after opening a trading room to buy and sell debt from the bridging market.

Blockchain raises $ 40 million from Lakestar and Google’s venture arm (Business Insider), Rated: A

Bitcoin and blockchain technology company Blockchain has raised $40 million (£31.5 million) in its second round of institutional funding.

European venture capital fund Lakestar and GV, Google’s venture capital arm, both led the round. Nokota Management and Digital Currency Group also took part in the investment, as did Blockchain’s existing investors Lightspeed Venture Partners, Mosaic Venture Partners, Prudence Holdings, Virgin, and Sir Richard Branson.

The Series B funding takes the total raised by Blockchain to $70 million (£55.2 million).

Why Sipps aren’t yet embracing P2P (MoneyWeek), Rated: A

Since April 2016, investors have been able to shield gains from peer-to-peer (P2P) lending from the taxman in the innovative finance Isas (IF Isas). And while it has taken a while for most P2P platforms to win the necessary approvals from HM Revenue & Customs and the Financial Conduct Authority (FCA) to offer IF Isas, these products are finally beginning to take off, with several launched since the start of the new tax year. However, the same can’t be said for P2P investments through self-invested personal pensions (Sipps).

Referral schemes: earn over £1,000 through family and friends (BT), Rated: B

People using peer-to-peer platform Funding Circle can net £50 if they recommend a friend or relative who goes on to lend at least £2,000. Normally, Zopa investors can earn up to £50 if the person they recommend lends £2,000 with the platform. They’ll receive £50 too. However, at the time of writing Zopa isn’t accepting any more investors due to high demand.

Elsewhere, Alliance Trust Savings will give existing customers a £50 Marks and Spencer voucher when they get a friend or family member to open an Investment Dealing Account, ISA or Select SIPP. Your friend will get £25 worth of vouchers, too.

Mutual Scottish Friendly is offering two £25 MyRewards card to their customers – that’s one for the customer and one for the person they recommend.

China

Internet majors, banks edge closer to fintech success (China Daily), Rated: AAA

China’s internet giants that forayed into online finance are now joining hands with banks, their perceived competitors, to succeed together in the booming financial technology or fintech sector.

The latest such partnership is between Tencent Holdings Ltd and Huaxia Bank Co Ltd, which was announced on Thursday.

Tencent’s peers, Baidu Inc and Alibaba Group Holding Ltd, which together comprise China’s “Tech Trinity”, are jostling for supremacy in the internet finance segment. The two already have partnerships or collaborations with the nation’s top lenders.

JD.com Inc, another e-commerce major, has also joined the fintech partnerships fray. It is working with ICBC, China’s largest bank by assets, on fintech, retail banking, loans for small and medium-sized enterprises, and consumer finance.

European Union

Ingenico ePayments Partners with French FinTech Company SlimPay on SEPA Direct Debit (EuroInvestor), Rated: A

Ingenico ePayments, the online and mobile commerce division of Ingenico Group, today announced that it has teamed up with French recurring payments specialist Slimpay to support a SEPA Direct Debit (SDD) solution the company is developing for online merchants to simply and securely create and manage the e-mandates required to process SDD payments. With the partnership, SlimPay joins a rapidly expanding ecosystem of exciting and innovative FinTech companies that work closely with Ingenico to jointly develop new solutions for online merchants.

International

Aegon Life insurance company explores e-commerce channels to sell policies (Financial Express), Rated: AAA

Private sector life insurer Aegon Life Insurance Company is exploring options to sell policies via fintech and e-commerce platforms. The company’s Chief Digital Officer Martijn de Jong said digital channel is to become the primary channel for the insurers to expand customer base.

The company’s first premium income grew by 30 per cent to Rs 10.40 crore during April-May period of the current fiscal, according to data available with Irdai. Aegon Life Insurance is a joint venture between global insurer Aegon and Bennett Coleman & Company (India).

Australia

Digital advice will bypass member apathy, embarrassment (Investment Magazine), Rated: A

Despite the tremendously importance of retirement planning to the long-term financial security of the working population, the majority of Australians tend to neglect their superannuation funds throughout most of their working lives.

For example, more than 50 per cent of Australians now retire on a date not of their choosing. In addition, research from global banking and financial services firm HSBC showed that a staggering 41 per cent of Australian pre-retirees do not receive any retirement advice.

Digital advice allows users to bypass any potential sensitivities they may feel when consulting a human adviser. Those who have limited knowledge about the basics of their own savings goals or liabilities may feel too embarrassed to talk to a professional and therefore switch off from engagement.

India

Fintech Startup Stashfin Raises $ 5 Mn Funding From Snow Leopard Ventures, Others (Inc42), Rated: A

Delhi-based fintech startup Stashfin has raised $5 Mn Pre-Series A funding from Snow Leopard Ventures and Singapore-based Alto Partners. Snow Leopard Ventures is the VC arm of the Kirloskar Group.

Stashfin is the parent company of digital lending platform, StashEasy. It was founded in February 2016 by Tushar Aggarwal.

Middle East

Machine learning is transforming lending (Khalee Times), Rated: AAA

In June 2015, the World Economic Forum published The Future of Financial Services – How disruptive innovations are reshaping the way financial services are structured, provisioned and consumed. The paper defined a taxonomy for disruption in financial services. It identified six broad areas and within them, 11 clusters of disruptive innovation.

The six areas are Payments, Market Provisioning, Investment Management, Insurance, Deposits & Lending and Capital Raising. Of the 11 clusters in the report, the combination of Alternative Lending and Shifting Customer Preference clusters are most relevant to today’s article. Within this combination, the Banking-as-Platform movement is playing a remarkable intermediary role in matching lenders and borrowers via a seamless, transparent, user-friendly standard API based model which leverages advances in processing power, artificial intelligence, user interfaces and design-thinking.

Traditional lenders, i.e. banks, usually find it difficult to match the agility and granular understanding that P2P Lending players have. Banks’ credit evaluation and origination platforms are often industrial-age processes with a large quantum of human intervention.

Canada

Billionaire Buffett throws lifeline to cash-starved Home Capital (Daily Mail), Rated: AAA

Berkshire Hathaway Inc’s commitment of a C$2 billion (US$1.51 billion) credit facility to Home Capital Group Inc, Canada’s largest nonbank lender, marks the billionaire’s latest effort to shore up a company in dire need of cash.

Home Capital shares soared as much as 18 percent, but was still more than two-thirds below the 2014 peak.

Berkshire also agreed through its Columbia Insurance unit to buy up to C$400 million (US$302 million) of Home Capital shares for a 38.4 percent stake, pending shareholder and regulatory approvals.

Home Capital has suffered a deposit exodus resembling a bank run since mid-April, when the Ontario Securities Commission accused it of deceiving investors.

Authors:

George Popescu
Allen Taylor