Introduction Online lenders are fast becoming the first port of call to avail loans and have been attracting strong funding interest from VCs and PEs. This demand for a digital lending experience has also forced traditional lenders like banks and credit unions to figure out the technology which will allow them to originate loans in […]
Online lenders are fast becoming the first port of call to avail loans and have been attracting strong funding interest from VCs and PEs. This demand for a digital lending experience has also forced traditional lenders like banks and credit unions to figure out the technology which will allow them to originate loans in a flexible yet scaleable way. They have two options: Buy or Build.
The build option can be extremely expensive and time consuming. But the buy option leads to a digital experience that is constrained, as you are dependent the features and functionalities of the vendor. Moreover, there is no way to really differentiate in the eyes of the digital customer. The solution is DigiFi: an open source tech platform which also allows you to customize along with a layer of additional services like hosting, support, platform implementation, etc.
DigiFi was founded by Joshua Jersey and Bradley Vanderstarren in 2014. It started its life as Promise Financial, an online lender, and raised $110 million in credit capital. It built up its own proprietary tech as there was no solution provider in 2014 offering an end-to-end loan origination platform that could automate the entire process. They sold off the tech to a large lending institution in 2017 and pivoted to DigiFi, one of the world’s first open source loan origination systems (LOS) which equips the lenders with flexible and modern tools to create unique platforms and digital experiences.
The company’s ideology is simple: That is to give other incumbent lenders, branches, credit unions, and startup digital lenders a platform where they do not struggle to build core lending capabilities from scratch. The company utilized the year 2017 and early 2018 to build up its platform, and started working with clients in late 2018. The company, with 10 people, has raised $4 million in equity to date and is based in New York.
The Market’s Pain Points and the DigiFi Solution
The ‘build or buy’ question creates a space for a platform that can bring together the qualities that fulfill the core origination requirements of the lending market and yet customize to give the client a competitive edge over other players. DigiFi empowers its clients to control the features and UI/UX so that it suits the specific needs of their unique client base. The existing tech vendors force the lenders into a rigid structure that limits flexibility to differentiate and provides the exact same experience for all sets of clients.
DigiFi gives the best of ‘buy vs. build’. Thus, DigiFi clients do not need to start from scratch and yet have the power to tailor the tech (buy and build, a win-win!). The company’s core platform is open source, and the source code can be accessed on Github. Revenue is generated from acting as a layer that provides hosting, support, platform implementation and customization services.
In crux, the platform of the company has features like complete lending CRM, decision engine for lending decisions, machine learning environment, and open-API architecture, and it can be configured for deployment across a range of lending verticals that include consumer, mortgage, small business, and commercial. DigiFi gives out the open source platform and its documentation for free.
The platform of the company is currently being leveraged by Sprout Mortgage, Mariner Finance, Constant Energy Capital, Greenwave, and Home Point Financial.
The Platform in Detail
The company provides its platform to the lenders for free and charges for additional services of configuration, setup, support, and running. Depending on the requirements of the client, DigiFi offers support plans for a monthly fee. The customization and platform implementation are charged on an hourly basis. The implementation time and cost varies. The implementation might take up to 4-8 weeks at a minimum and can take up to months if the lender needs to build out features from scratch. As compared to years and millions of dollars for building an in–house model, the DigiFi solution is usually in the 5-6 figure range.
As per the CEO of DigiFI, the incumbents are getting better with time as they have a lower cost of capital and existing customer base, positioning them to succeed. Getting the right tech partner on board is thus the critical piece to build a successful moat.
DigiFi offers a platform to lenders looking to tap the online lending market that not only equips them to get the best of the ‘buy vs. build’ system but also ensures full support and customization. It powers the lender with ready-made solutions, fast implementation, support and training, feature controls, unique customizations, flexible hosting options, and a contributor community. It provides the option to integrate all major data sources – Transunion, Equifax, Experian, MicroBilt, LexisNexis, etc. With over 45,000 development hours, DigiFi platform provides it clients a strong barrier to entry with complete configurability with other APIs, true scaleability with AWS, and integrated AI ML solutions.
Consumer lending in the US reached nearly 1.5 trillion dollars in 2018, according to the Federal Reserve Board of Governors, and European banks reported a demand growth of 25% in the second quarter of 2018. Needless to say, it’s a good time for lending. While banks are still paying out the lion’s share of the […]
Consumer lending in the US reached nearly 1.5 trillion dollars in 2018, according to the Federal Reserve Board of Governors, and European banks reported a demand growth of 25% in the second quarter of 2018. Needless to say, it’s a good time for lending.
While banks are still paying out the lion’s share of the loans, alternative lenders are gradually moving in to fill holes in the ever-increasing lending market.
Fintechs Exploit the Growing Market
The traditional banking sector is entrenched in their old way of doing business. Banks and customers alike expect a certain customer experience and style of operational management. While this may appeal to some customers and lending institutions, it comes at a significant cost. Each teller or call-agent interaction at a traditional bank costs an average of four dollars compared to merely ten cents for a mobile interaction.
While the profits of running a fintech are clear, the process of getting up and running is not without its challenges.
Practical Steps for Setting up a Lending Company
Lending markets vary from country to country depending on regulations, legislation, and consumer behavior. This simple roadmap outlines the general process to get started.
Point One: Becoming A Legitimate Enterprise
In order to start lending online, business owners need to create a legal entity. This is the vehicle that all lenders will use to navigate red tape. As this process varies greatly from business to business, it may take as little as 1% or as much as 20% of your initial startup budget.
One possible way of circumventing this is to purchase an already existing bona fide legal entity or lending franchise. For example, the largest franchise lender in the US is Liquid Capital. The short-term costs may run a bit higher, however, the long-term benefits of using an existing household name could potentially pay large dividends.
In addition to the unique requirements for lending entities, regular business costs will often crop up as well. Among others, these could include hiring and administrative overhead and office rental. On average, these costs could take anywhere from 10%-12% of your startup budget.
Point Two: Raising Funds
Raising capital to lend out is the primary operational challenge for any lending startup.
Usually the best way for a startup to begin lending is with their own capital, but when that is not possible (or favorable) funds can be raised in the marketplace. Recently, institutional lenders have become much more comfortable with providing capital to lending startups following the rise of the P2P model.
Any lending company funded by public investors will have to factor in the cost of hiring a Certified Public Accounting firm to perform an audit to certify all financial data including their business plan, valuation, and other financials.
Point Three: Using the Right Technology Platform
The core of any modern lending company is the technological platform it runs on. The platform is the brain of the business and takes time to nurture and grow. It is best to do this in parallel with the other points as it is the primary capital asset of the operation.
When it comes to platforms, there are two main options: building your own from scratch or purchasing an existing platform from a vendor. This crucial decision will have a long-term impact on the business and will greatly affect setup and operational costs. Each option comes with pros and cons:
Building a lending system from scratch is more time-consuming, and can take up to 12 months. It requires a substantial upfront investment as you will need both financial and technological expertise to pull it off. Additionally, time-sensitive shifts in the market could be a factor, so timing your release is of paramount importance. While this option could be risky, it gives lenders full control over the product they build.
Purchasing an existing lending platform is generally less expensive and faster. There are a wide range of solutions both out-of-the-box and fully-customizable. The options fall into two general categories: traditional core banking systems (eg. Oracle, Temenos, and Infosys) or fintech-focused solutions (eg. HES Lending Software).
There are number of software challenges that digital lender should consider when choosing a platform:
In order to optimize productivity, systems often require further customization.
Some systems only cover a single or hand-full of loan management aspects like underwriting, loan origination, or loan servicing, and do not support many back-office functions.
Systems often do not integrate with the majority of third-party services, so lenders might end up needing to mix and match software to run their business.
Some systems do not extend well into new markets or product segments.
Some systems require license upgrades to increase the loan volume or number of user accounts.
With a good understanding of the industry, thorough planning, and about $200,000 to $1,000,000 of startup capital, a state-of-the-art lending business can be launched. Not only do these businesses financially benefit their owners and investors, but they come with the satisfaction of knowing that every loan issued has great potential for improving the lives of the borrowers and their communities.
Natalie Pavlovskaya is the Chief Marketing Officer at HES (HiEnd Systems), a fintech company behind comprehensive lending and credit scoring solutions. She is a Marketing Executive with international business experience in CIS, EMEA, and US, working for more than 7 years in digital marketing.
D+H is a global payments and lending technology provider based out of Toronto serving nearly 8,000 financial institutions. With revenues of over $1.5 billion and 5,500 employees, it’s a bona fide giant in the financial technology industry. The company has realized the shift towards digital lending and mobile-first experience, recently launching Total Lending Small Business, […]
D+H is a global payments and lending technology provider based out of Toronto serving nearly 8,000 financial institutions. With revenues of over $1.5 billion and 5,500 employees, it’s a bona fide giant in the financial technology industry. The company has realized the shift towards digital lending and mobile-first experience, recently launching Total Lending Small Business, a mobile-first lending solution designed to boost traction for traditional lenders and improve the lending experience for small business owners across the United States.
D+H hired David Boswell as head of its new lending products division. Under his supervision, they researched the banking sector for a year-and-a-half to spot opportunities for a new product. Before launching the solution, it was put through rigorous testing and, in March 2017, Total Lending Small Business kicked off. A cloud-based SaaS solution developed to target the small business space, banks and other lenders can use it to deploy an online loan application for small business owners in record time.
The solution is a lot quicker and more efficient than paper-based branch models and processes more loan applications with the same amount of resources. It is a pure win-win as there is revenue augmentation without additional costs.
Rather than try to find something new and exotic, D+H went back to the basics and tried to tackle the problem of borrower experience in the loan application process. Even though the solution is primarily all about elevating lender efficiency and borrower experience, the product offers much more. Since it is cloud-based, it will help lenders reduce overhead expenses such as office space and manpower while reducing the chance of human error. That will improve processing speed and customer satisfaction.
Features of Total Lending Small Business
Total Lending Small Business is an entirely online-based application available in both mobile and desktop versions. The USP is its interactive interface. Borrowers can have virtual conversations that develop questions, and answers, on the go. This allows for a hassle-free experience compared to other platforms that use a preset form for all borrowers.
The platform is particularly beneficial as small business owners sometimes don’t really understand the technical details associated with loan applications. Through live interaction, the platform is able to intuitively interact with each borrower. For now, D+H is sticking to the application process, but the company is expected to add other features to the platform that include uploading documents, upselling, and underwriting.
Buy or Build
Some banks are not large enough to develop their own platform or technology solution. Therefore, it makes sense for them to buy a specialist solution. D+H aims to target about 100 banks up to $20-30 billion in revenue.
Small business lending has proven to be an Achilles heel for banks. The financial crisis led banks to vacate this space as the risk was not consummate to returns. But with growing competition in other lending segments, banks have finally started taking the SMB lending space seriously again. They are either developing their own SMB lending solutions or are partnering with alternative lenders with a proven track record.
One association that has made waves in the lending space is the Chase/On-Deck partnership. On-Deck has turned into a tech provider while Chase Bank is leveraging its existing client base and balance sheet to penetrate the SMB lending market.
Over the years, SMB lending has evolved manifold, and a lot of non-traditional lenders are beginning to enter the space. This makes it pertinent for brick-and-mortar lenders to shore up their SMB customer bases by introducing lending systems commensurate with the technology currently prevalent in the market.
Mortgage Lending Solution
Mortgage lending solution is the principal business of D+H. The company got its start in the early 2000s when the internet gaining popular traction. The premier software is available as an SaaS deployed in the cloud or an on-premise platform. Its main targets are online mortgage businesses.
Solutions range from POS origination, processing, and compliance documentation. All these solutions are highly customized for the customer experience. Earlier, only 2% of mortgage applications were completed on mobile devices, but in last 2-3 years, that number has jumped to 20%. This significant increase in number is due to busy lifestyles and smartphones increasingly replacing desktops and laptops for private browsing.
While developing its SMB lending platform, D+H placed specific emphasis on this shifting trend.
Responding to the trend, D+H launched its second Mortgagebot solution. Mortgagebot LOS, a total lending mortgage solution, has signed over 200 customers in two months since its launch. Company executives believe the growing interest in a mobile-optimized experience will lead to greater demand for the product.
Next big thing: Smartphones
These days, more people rely heavily on their smartphones, yet lending companies don’t develop or design software tailor-made for them. D+H believes the introduction of smartphone solutions into the technology mix will completely change how lenders and borrowers interact. The company has been getting feedback from testing its solution on a real user base to ensure an intuitive customer experience.
Making a difference
Many players have entered the market with their white-label online lending platforms. TransUnion recently launched Find My Offer – “a set of configurable white-label web screens that support a lender’s consumer prequalification and digital prescreen initiatives.”
All of these online lending platforms have a similar set of features, and lenders depending on such platforms to boost growth will find themselves behind the curve. Such platforms are a commodity now, and compulsory for operating a lending business.
News Comments Today’s main news: California SC finds arbitration agreement waiver unenforceable. BondMason first P2P provider to launch SIPP. China’s internet finance thrives as fraud fades. Marvelstone plans robo-advisor for family offices. Today’s main analysis: Real estate tech deals tick up. Today’s thought-provoking articles: 5 areas of fintech attracting investment. UK still fintech unicorn capital of Europe. Millennials favor search […]
Real estate tech deals tick up. AT: “I suspect most of this is being driven by RECF. Mortgage tech is starting to rise. PropTech is huge, and that includes tools for real estate brokers and investors including rental unit management.”
Why I don’t believe in the hybrid advice model. AT: “This is a position I’d expect of LendingRobot’s Emmanuel Marot. Although brilliant, LR and Marot cannot fight market forces. Nonetheless, I agree with his bottom line: Humans can spout meaningless justifications better than any robot, which is why the hybrid model is catching on. While investors think technology is cool, there is still that spark of meaningless human voice-in-the-head begging them to fear it.”
On April 6, the California Supreme Court issued a unanimous opinion in McGill v. Citibank, finding that a pre-dispute arbitration agreement was unenforceable to the extent it required the plaintiff to waive her right to seek public injunctive relief. According to the court, the right to pursue a public injunction constitutes an “unwaivable public right” under California law. Therefore, “a provision in any contract ― even a contract that has no arbitration provision ― that purports to waive, in all fora, the statutory right to seek public injunctive relief . . . is invalid and unenforceable under California law.”
The California court further explained that its partial unenforceability finding is consistent with the U.S. Supreme Court’s decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). In that case, the Court stated that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitrable, rather than a judicial forum.”
The court also acknowledged, but found no reason to address, the plaintiff’s related claim based on what is known under California law as the “Broughton-Cruz” rule, asserting that a request for a public injunction cannot be decided in arbitration. Finally, the decision remanded the case to the California Court of Appeals to consider ― if either party should raise the issue ― the question of whether the rest of the arbitration agreement remains enforceable in light of language contained in the most recent version of the underlying account agreement stating that, “if any portion of the arbitration provision is deemed invalid or unenforceable, the entire arbitration provision shall not remain in force.”
The decision of the California Supreme Court in McGill v. Citibank will likely be appealed.
In light of this decision, providers of consumer products and services should review their existing arbitration agreements to determine whether the consumer’s ability to pursue a public injunction or other “public rights” is completely foreclosed.
McGill v. Citibank also highlights the risks of including language in an arbitration agreement (or in any contract) stating that the agreement will be invalid if any portion of the agreement is deemed invalid or unenforceable. Given the impossibility of predicting how courts may interpret even well-settled questions of law, standard severability language is always preferable unless different language is specifically mandated.
At the same time, some of the steam has come out of the sector. Overall investment and merger and acquisition activity in fintech almost halved from a record high of $46.7bn in 2015 to only $24.7bn last year, according to KPMG.
Another negative factor was the governance scandal last year at Lending Club, the biggest online lender in the US, combined with disappointing performances by some of its rivals, which turned investors off peer-to-peer lending.
Total fintech investment in Asia inched up to a new record of $8.6bn last year, although the number of deals fell by more than 8 per cent. More than half the region’s total fintech investment came from one deal: Ant Financial’s $4.5bn funding round.
The launch of voice-activated assistants such as Amazon Alexa and Google Voice has opened up possibilities for making online banking easier for customers. Banks such as Capital One have already latched on to this trend.
Cyber security shot to the top of the boardroom agenda for banks after one of the biggest bank robberies in history was carried out by cyber thieves on the Bangladesh central bank via the Swift payments system in February 2016. The crooks made off with $81m that was on deposit at the US Federal Reserve.
Most big financial groups remain convinced of the potential for blockchain to revolutionise parts of their industry and several central banks are examining the potential for using the technology to create digital currencies. Venture capital investment in blockchain companies rose by a fifth to $544m last year, according to KPMG.
The insurance industry has been slower than other areas of finance to wake up to the digital disruption at its door. But recently start-ups such as So-sure, Friendsurance, Lemonade, Guevara and Brolly have emerged with plans to transform the sector. Venture capital investment in insurance technology companies doubled last year to almost $1.2bn, according to KPMG.
2016 was a banner year for real estate tech with over $2.6B in funding to the category across 277 deals. At the current run rate, 2017 could very well reach another consecutive funding high, even as deals are on track to come in slightly below last year’s total.
So far this year, real estate tech companies have received $733M across 61 deals. At the current run-rate investment activity is on track to reach $2.9B invested across 247 deals.
On a quarterly basis, deals have materially declined since Q3’16.
Funding, on the other hand, has increased in each of the last three quarters and Q1’17 received the second-largest quarterly funding total ever, behind Q2’16.
On paper, it looks pretty good: let the robot do the simpler stuff, like a modern-portfolio-theory allocation between a few ETFs, and have a human being intervene to provide more sophisticated and personalized advice.
In practice, I think it’s nonsense. If you believe the market is truly efficient, then there’s no point in using an advisor, robot or human. Just invest in a broad market ETF and be done with it (except for tax harvesting).
If you think the market is efficient-ish, then low cost optimization is the solution. Go robot. If you think you need an active manager, you should read the trove of statistical analysis that demonstrate you’re simply paying for someone’s yacht. Indexes beat stockpickers [92% of time]…
It does make sense for robo-advisors to move to the hybrid model, since it allows them to differentiate and de-commoditize their service, but for their clients, not so much.
Machine learning algorithms have become so good in the last 10 years, that any number-crunching and quantitative decisions a smart but junior employee can do, the machine will do better, faster, and cheaper.
Investors with at least $100,000 with Wealthfront can now borrow up to 30% of their balance for loans for anything except purchasing more investments on the firm’s platform, the company announced Wednesday.
Reuters reports loans will cost between 3.25% and 4.5%, and any money a client deposits into their account after taking out a loan will pay off the balance rather than investments.
Financial services firm Edward Jones today announced a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. Backed by the St. Louis Regional Chamber, SixThirty was founded in 2013 and to date has funded more than 25 startups across the globe.
As part of the partnership with SixThirty, Frank LaQuinta, a general partner with Edward Jones, has joined the organization’s Investment Committee which evaluates the investment pipeline and selects FinTech startups that SixThirty invests in.
Pi Capital International LLC (“Pi Capital”) is pleased to announce that it was the exclusive financial advisor and placement agent to Money360, Inc. for a structured debt facility of up to $250 million. The financing vehicle is designed to allow Money360 to employ funding as it provides commercial real estate loans to its U.S. client base. The fund provides Korean investors with a short-duration, high-yield fixed-income instrument.
“The fund raise by Pi Capital will allow us to substantially increase our assets under management,” said Evan Gentry, M360 Advisors’ CEO. “We believe this gives us a competitive advantage with an anticipated $250 million investment from one of South Korea’s most reputable financial institutions.”
ApplePie Capital, the first online lender solely dedicated to the franchise industry, today announced the appointment of franchise industry veteran Ronald Feldman as chief development officer, as well as the acquisition of Funding Solutions, LLC, a well-established national franchise lending consultancy that specializes in SBA, conventional and equipment finance loans. Feldman and Funding Solutions’ managing partner Randy Jones will join ApplePie’s leadership team.
These additions position ApplePie’s financial platform to exponentially expand upon its hallmarks of speed, flexibility and efficiency with new product options, an expanded network of lending sources and an extraordinary wealth of franchise finance expertise for its growing list of franchisor partners. Currently, ApplePie serves more than 40 franchisors including Orangetheory Fitness, Jimmy John’s, Jersey Mike’s and Marco’s Pizza.
Responsible for growing ApplePie’s brand portfolio and contributing to product strategy, Ronald Feldman comes to the company with more than 20 years of experience in franchise leadership and franchise financing. He previously served as chief development officer at FranData, the industry leader in market research, and as a principal and co-founder of Franchise America Finance (FAF) and The Siegel Financial Group. Feldman was also an early franchisee of The Goddard School system. As an active advocate of the franchising business model, Feldman currently serves the International Franchise Association (IFA) as chair of the Supplier Forum Advisory Board and sits on both the Board of Directors and the Executive Committee of the association. Feldman was awarded the Sid Feltenstein MVP Award for service to the IFA’s Political Action Committee (FRANPAC) in 2013.
Unfortunately, some Millennial stereotypes are rooted in fact. A 2015 PWC survey showed that only 24% of us have basic financial knowledge, and even so, only 27% of us seek financial advice on saving and investing.
When it comes to jobs, we’re not the deadbeats that people assume. In fact, a 2015 Deloitte report found that 54% of Millennials had started or had planned to start their own businesses by year-end. Although we may work differently than generations past, many of us are passionate, entrepreneurial and looking to make a difference.
“Advisors need to understand how truly connected this new generation is to each other and to information.” When it comes to trusting a financial advisor, Kamine highlights this outsider oversight as a road block.
Millennials currently represent a meaningful fraction of U.S. wealth that will grow as baby boomers continue to pass down an astounding $30 trillion over the next 30 years. When this transfer of wealth happens, an estimated 66% of Millennials will fire their parents’ financial advisor, according to InvestmentNews Data.
This year, 86% of Millennials said they are interested in socially responsible investing, according to Morgan Stanley.
The Millennial Disruption Index reports 71% of us would rather go to the dentist than listen to what banks tell us. In our financial planning, we have shorter-term goals that we’re trying to align with the things we care about.
With an average age of 51, many advisors still build financial plans based on their view of a traditional life cycle with set ages for when we start a family, buy a house, climb the corporate ladder and retire. But their view is not our reality. Kamine adds, “Financial advice has been like a structured box without much creativity or understanding of the individual. Advisors need to become more dynamic because we’re revolting against structure. I’ve told my advisors I don’t envision buying a house for at least the next five years. And I’m definitely not focused on planning for retirement 40 to 50 years from now.”
The report, the first in a series on regulation in the fintech industry, focuses specifically on marketplace lenders, mobile payments, digital wealth management platforms and distributed ledger (also known as blockchain) technology.
While the GAO did not issue any recommendations in the report, it noted that regulation of these four subsectors was varied depending on the types of products or services offered and the way in which they are delivered to consumers.
College Ave Student Loans, the leading next-generation student loan fintech lender, has teamed up with America’s #1 College Life Expert Harlan Cohen to help families get comfortable with the uncomfortable when it comes to college and money. Hosted by Harlan Cohen, author of The Naked Roommate, the Naked Financial Truth Digital Tour will feature a series of free webinars and videos focused on financial advice, strategies and tips to help parents and students plan for post-secondary education.
The first webinar, “The 7 Biggest Financial Mistakes College Students Make (And How Parents Can Help)” will be held on Tuesday, April 25 at 7 p.m. ET. Registration for the webinar is free and available online at
These eight companies — which are required to have a presence in the region to receive an investment — will begin the 12-week accelerator on April 24, meeting with mentors and advisors selected to help guide them toward growth and fundings. They run the gamut of the financial industry, from creating data visualizations of personal assets to a student loan repayment benefit program. Four focus on putting financial technology to use solving social issues.
In the next several weeks Raymond James is setting its sights on rolling out a revamped suite of “longevity” planning tools. The updated software comes with the kinds of bells and whistles that advisors might expect from a nearly five-year-old package – a “new look and feel” as well as a “more conversational design,” as company execs put it.
Other notable enhancements, they say, include more flexibility for analyzing portfolio return patterns and capabilities allowing real-time updates as clients’ household budgets and retirement goals change over time.
Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has added Channel Partners Capital as its newest client to utilize Tamarack’s Lease/Loan Origination Accelerator on Salesforce.
Channel Partners, a leading provider of small business working capital loans, will benefit from added flexibility, streamlined operations and enhanced audit controls, as a result of using Tamarack’s Lease/Loan Origination Accelerator on Salesforce.
Tamarack’s Lease/Loan Origination Accelerator on Salesforce is a scalable solution offering users the ability to automate work queues,increase throughput of loans without additional head count and customize notifications from lead generation through to funding.
BondMason has become the first peer-to-peer service provider to launch a self-invested personal pension (SIPP) product. The service aims to offer investors a flexible and tax-efficient way to save for retirement.
The new retirement product, which selects loans across P2P lending platforms, will grant UK savers exposure to higher-return assets than traditional pension savings products. Starting from a minimum investment of £5,000.
MILLENNIALS are favouring search engines over professional financial advice when it comes to managing their own money, research claims.
A poll of more than 2,000 adults by Zurich UK claims 15 per cent of millennials, referring to those aged 18-34, are turning to search engines such as Google instead of seeking professional financial advice, more than any other age group.
Only three per cent of 35-44 year olds and nine per cent of those aged 45-54 and over 55 respectively, opt for web-based information.
Asked why they eschew professional help, one in five millennials cited confidence in their ability to sort their own financial futures as a reason for not initially seeking professional help, while 37 per cent felt they do not earn enough to need to speak to a financial adviser, and almost a quarter said they were too young.
High Street bank TSB said some loan providers make a “hard mark” on credit files when someone asks for a loan price or quote.
TSB chief executive Paul Pester said: “We estimate that consumers are losing out by as much as £400m each year, which is going straight into the pockets of aggressive loans providers. It is time the industry comes clean on these costly underhand tactics.”
P2P lending offers an innovative funding option for businesses – including developers – and is fast becoming the go-to option.
It’s essential that the development finance sector stays competitive and vibrant, and alternative lending allows that to happen. Far from just being a back-up for situations that the traditional lending sector can’t cater to, crowdfunding and P2P platforms can actually be a more efficient source of funding.
Achieving compliance will not happen overnight. Indeed, MiFID II is widely considered to be one of the most sprawling pieces of financial legislation ever devised, and thus it presents numerous challenges. One of which being that recording calls will become mandatory for all areas of financial advice.
Then, if you add GDPR (the EU’s General Data Protection Regulation), coming into effect in May 2018, into the equation, 2018 is shaping up to be a regulatory nightmare for financial services firms. Under GDPR, we all have a‘ right to be forgotten’ or a right to erasure of all personal information held on us by a particular company. This places a duty on companies to be able to quickly access and delete the information they hold on specific individuals, on request.
However, comparing the responses of IT professionals and those responsible for managing Risk & Compliance within a business shows IT teams have a better overall understanding of the consequences of non-compliance. 62% of risk and compliance managers admitted to not knowing a company can be fined up to five million euros or 10 per cent of annual turnover, compared to only 42% of IT managers and decision makers.
A stranger’s photograph appears on your smartphone screen, and you decide whether to give him or her a loan or not. The money is not yours, but instead is provided by microfinance organizations. That’s the main difference from traditional American P2P (peer-to-peer) lending, and with Suretly you can earn or lose depending on whether the recipient of your largesse proves to be a reliable borrower or not.
Suretly is geared exclusively to short-term loans of up to one month; in other words, those with the highest interest.
The money itself is loaned by the microfinance organization that the borrower applies to, but only if they attract enough sureties to cover the whole amount, plus interest. Users share the risks, and depending on whether the individual returns the money or not, they can lose or earn from $1 to $10.
On the app, borrowers are divided into seven categories from A to G depending on their trustworthiness. The higher the risk that the loan won’t be repaid, the higher the price of its surety. The maximum commission is $1.5.
Listed Australian deposit taking institution Goldfields Money (ASX:GMY) looks to be making good on its intention to become a leading player in the digital banking product distribution and BaaS market in Australia, announcing last week that it had signed an MoU with Singapore headquartered remittance fintech Instarem.
What is interesting about the MoU is the intent to move beyond remittance towards a broader banking play for cross-border SMEs and products orientated towards visa holders visiting or living in Australia.
The two companies should have a healthy market ready to capitalise on. According to the Australian Bureau of Statistics, over the last 10 years the proportion of the Australian population born in China alone has increased from 1.2% to 2.2%, coming in just behind New Zealanders and British immigrants. Those born in India currently make up 1.9% of the population, while citizens from the Philippines, Vietnam and Malaysia collectively add up to further 2.7%.
Migration isn’t going away. And the degree to which an individual’s assets are spread across countries is also on the increase thanks to globalization.
China has four large state-owned banks, and state-owned enterprises generally have easier access to financing. Many small companies are troubled by the financing bottleneck, creating pent-up demand.
Meanwhile, working-class families struggle to figure out where to invest their savings to seek higher returns, and many of them move money online. The country, home to the world’s biggest online population, also has a number of groups, such as college students, who are underserved by banks.
By March 2017, 3,607 Chinese P2P lending platforms had run into trouble or been forced to close, with only 2,281 platforms in normal operation.
On top of P2P lending, Internet finance also covers business such as third-party online payment, crowd funding, and other financial services.
Risk caused by the Internet finance industry has wide repercussions. Some P2P lending platforms resembled hybrid financial institutions providing clients with various financial services online, analysts said.
Businesses such as P2P lending, Internet-based insurance, third-party online payment, and online asset management were among key areas for strengthened supervision, industry observers said.
Internet finance last week appeared on the top banking regulator’s list of ten most important areas for enhanced risk control, with targeted measures to be taken to stem emergence of a financial crisis.
Wang said 2017 will be a watershed year for Chinese Internet finance as the rules are tightened, bringing the industry out of the wilderness.
Singapore-based Marvelstone Capital plans a robo advisor platform for the under-served family office market in Asia.
The platform is being developed with Singaporean fintech startup Smartfolios, and will be launched in the third quarter of 2017. It will be available on desktop and mobile for Marvelstone Capital’s clients.
Marvelstone will target family offices based in Singapore, Malaysia, Indonesia, Myanmar, as well as India. The company points out that Malaysia is an important market and Cho added: “It is a huge market and the culture is quite unique as well, there’s a huge Shariah-compliant market, so it is definitely one of the most important markets for us.”