- Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. LendingPoint increases mezzanine financing. UK publishes Open Banking operational guidelines. Raisin raises $114M.
- Today’s main analysis: International P2P lending volumes for January 2019.
- Today’s thought-provoking articles: Where are we in the credit cycle? Marketplace lending associations respond to FDIC small dollar lending rule request. 8 U.S. challenger banks traditional banks should be scared of. Due diligence on P2P platforms. Global regulators struggle to define fintech credit.
- KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2019-1 Trust. The lowest rating is a BBB, highest AAA. No surprises, really.
- Where we are in the credit cycle. Traditional banks are happy with where things are. Also includes a roundup of some big news in the alternative lending sector, including Acorns’ huge raise of $105 million.
- How the industry responds to the FDIC small dollar lending rule request. Both the Marketplace Lending Association and the Online Lenders Alliance issue statements. Included: The statement from the Online Lenders Association. A must-read.
- LendingPoint increases mezzanine financing to more than $67.5 million.
- 8 challenger banks traditional institutions should be afraid of. There are way more challenger banks than this, but these are the bigger ones. SoFi Money is one of the late comers, but with its financial strength, it should be a contender. Down below, don’t miss the interview with Joust, which is not on this list.
- Joust interview: The bank for freelancers.
- Chime tries to disrupt American banking.
- Challenger bank Rising Bank sets up in Midwest.
- P2P Global sells U.S. loans.
- Molo offers 15-minute mortgages.
- 25% say money is biggest hurdle in running a business.
- Plaid, Quovo scratch the surface of data aggregation.
- PeerLoanAdvisor intros loan ratings for P2P lending investors.
- Dharma Labs offers blockchain lending.
- CashCall class action will need to be refiled.
- LendingHome named to Forbes Fintech 50.
- PeerStreet integrates with Liquid Logics.
- Fluent appoints new chief financial officer.
- CoreLogic launches enhanced title, closing solution for lenders.
- Custody firm backing Betterment, Stash to launch crypto custody service.
- Due diligence on P2P platforms. Are things going to get tougher for UK P2P lenders?
- Open Banking guidelines are offered.
- Starling Bank launches euro accounts.
- Aire raises $11 million.
- AccountScore offers real-time financial advice with Open Banking.
- Is SMEs declining external investments a barrier to scale?
- ANNA gets 8.5 million GBP in funding.
- Celsius has issued $630 million in crypto loans in six months.
- Aave launches Bitcoin lending on ETHLend.
- UK Bond Network closes doors.
- Raisin raises $114 million.
- ING offers Dutch SMBs funding options.
- NOVA disrupts P2P lending in Ireland.
- Banco BNI Europa, NDGIT accelerate Open Banking, PSD2.
- P2P lending volumes for January 2019. RateSetter crossed over 3,000 million GBP. Zopa crossed 4,000 million GBP.
- Regulators struggle to define fintech credit.
- Why venture capital is the answer to falling returns.
- Can technology stop the unbanked from falling through the cracks?
- Sancus to accept euros, dollars for loan funding.
- Revolut partners with WeWork.
- China: CreditEase offers social lending to farmers.
- Australia: Wisr launches ad campaign toward disillusioned big bank customers.
- Malaysia: Youth urged to diversify P2P lending investments.
- Canada: Vancouver-based crypto trading platform with lending features launches.
- Africa: DexAge offers versatile crypto trading and includes lending.
- United States
- KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA
- Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA
- The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA
- LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA
- Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA
- P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A
- 15 Minute Mortgages? Meet Molo – The New Fintech Aiming To Shake Up The Market (Forbes), Rated: A
- Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A
- 1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A
- Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A
- Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A
- US challenger Rising Bank rises up in Midwest (Fintech Futures), Rated: A
- PeerLoanAdvisor.com Introduces Exclusive Loan Ratings for Peer to Peer Lending Investors (PRWeb), Rated: A
- California-based blockchain lender proves attractive to investors (CoinGeek), Rated: A
- Long-running CashCall class action headed to state court (Reuters), Rated: A
- LendingHome Named to Forbes Fintech 50 List for Second Consecutive Year (Business Wire), Rated: B
- PeerStreet Announces New Software Integration with Liquid Logics (PeerStreet), Rated: B
- Fluent, Inc. Appoints Alex Mandel as Chief Financial Officer (Globe Newswire), Rated: B
- CoreLogic Launches Enhanced Title and Closing Solution for Lenders (CoreLogic Email), Rated: B
- A fintech firm backing hot robo advisors like Betterment and Stash is planning to launch crypto custody services within the next few months (Business Insider), Rated: B
- United Kingdom
- Due diligence on P2P platforms (FT Adviser), Rated: AAA
- UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA
- Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A
- Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A
- AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A
- Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A
- SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A
- What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A
- Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A
- Exclusive: P2P firm shuts platform (AltFi), Rated: B
- From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA
- European Union
- PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA
- ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A
- The Irish fintech startups disrupting their industries (Irish Times), Rated: A
- Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A
- International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA
- Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA
- Why VC Is The Answer To Falling Returns (Forbes), Rated: A
- Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A
- Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A
- Revolut team ups with WeWork (AltFi), Rated: B
- Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A
- Diversify investments in P2P lending, youths urged (The Star), Rated: AAA
- DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA
- Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA
KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2019-1 Trust (Business Wire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2019-1 (“SCLP 2019-1”). This is a $480.7 million consumer loan ABS transaction.
Preliminary Ratings Assigned: SoFi Consumer Loan Program 2019-1
|Class||Preliminary Rating||Class Principal|
Where Are We in the Credit Cycle? (PeerIQ), Rated: AAA
This week’s big funding news was that digital savings and investing platform Acorns raised $105 million in its Series E round, bringing its total valuation to $860 million.
The US economy generated 304 k jobs in January, marking a record 100 months of job growth. Average hourly earnings rose by 3.2% and the unemployment rate rose slightly to 4%.
Marlette CEO Jeff Meiler discussed profitability and loan performance with Peter Renton (transcript and podcast here). Marlette announced another year of profitability in 2018.
Overall, lenders view the US consumer as healthy and the US economic growth as solid.
The Industry Responds to FDIC Small Dollar Lending Rule Request (Lend Academy), Rated: AAA
So, back in November the FDIC issued a Request for Information on Small Dollar Lending. They received more than 60 responses from banks, industry associations, non-profit groups, fintech companies and individuals. While the FDIC did not define exactly what they meant by a small dollar loan the respondents, for the most part, took it to mean loans of less than $5,000.
There are many mainstream online lenders offering personal loans down to $1,000 and there are also many fintech companies offering loans under $1,000. Companies like Oportun, Insikt, LendUp, Elevate, Opploans and many others offer these sub-$1,000 loans using the latest technology tools to make this process more efficient.
The Marketplace Lending Association (MLA) provided a detailed 10-page response where they urged the FDIC (and other regulators) to do more to support banks and foster closer working relationships with fintech providers:
The Online Lenders Alliance is a trade group that contains many small dollar lenders who operate online. Not surprisingly they are against the 36% rate cap but they also have a lot in common with their sub-36% brethren such as promoting partnerships between banks and fintech companies.
The Center for Responsible Lending gave one of the most detailed responses to the RFI, a full 38 pages.
Read the full Online Lenders Alliance response here.
LendingPoint Again Upsizes Its Mezzanine Financing, Bringing It to More Than $ 67.5 Million (Business Wire), Rated: AAA
LendingPoint, the consumer lending platform, announced it closed an increase of its mezzanine financing, bringing the total of the facility to $67.5 million. A Paragon co-investor joined the facility as a lender.
Today’s announcement is the latest in a string of financing transactions LendingPoint has closed in the past 15 months. The company secured an up to $500 million Senior Credit Facility in August 2017 and an up to $600 million Senior Credit Facilityin May 2018, both arranged by Guggenheim Securities.
Eight Challenger Banks Traditional Institutions Should Worry About (The Financial Brand), Rated: AAA
1. BankMobile — Hooked Up With T-Mobile
Parent Company: Customers Bank
Category: Mobile bank
The creation of father-daughter team of Jay and Luvleen Sidhu (CEO and President respectively), BankMobile is an evolving banking-as-a-service platform.
2. Chime — Super Slick App
Category: Mobile banking and money management app (in partnership with the The Bancorp Bank)
Notable Milestone: 2 million account relationships
3. Finn — Chase Bank’s Millennial Play
Parent Company: JPMorgan Chase
Category: Mobile bank
Chase is offering a $100 for opening a new Finn account (as long as you make ten qualifying transactions in the first 60 days).
4. Marcus — Sucking Up Your Customers
Parent Company: Goldman Sachs
Category: Online bank
Notable Milestones: 2+ million customers and $35 billion in deposits.
Marcus’ loans range from $3,500 to $40,000 at rates of 6.99% to 25%. The average loan in 2018 was $15,000 over four years with a 12% interest rate, according to Bloomberg BusinessWeek. That leaves plenty of margin room even with its online savings rate up at 2.25% (as of January 2019).
5. N26 — Platform Maestro
Category: Mobile bank
Notable Milestones: 2.3 million users and $1 billion in deposits.
6. Revolut — The Amazon of Banking
Category: Mobile financial provider
Notable Milestones: 3 million customers — both consumers and businesses. Opening about 8,000 accounts per day. 1.2 million monthly active users. Monthly transaction volume $3 billion. Received European banking license in December 2018. More than 60,000 U.S. customers on Revolut’s waiting list.
7. SoFi Money — Join The ‘Waitlist’
Parent Company: Social Finance, Inc.
Founded: 2011 (Sofi Money Beta Launch, June 2018)
Category: No-fee Mobile banking account
8. Varo Money — Almost OCC Approved
Category: Mobile banking/money management app in partnership with the The Bancorp Bank.
Notable Milestones: First mobile-only bank to get preliminary approval for a national bank charter.
Walsh feels Varo Money is particularly suitable for the 70% of the people they initially surveyed who are “hands-off creditworthy Millennials.”
P2P Global sells US loans and chases ‘less volatile returns’ (AltFi), Rated: A
It said its net asset value (NAV) rose by 0.78 per cent in the final month of the year, amounting to a total 5.2 per cent return in 2018, as the fund sold off a number of poorly performing loans, according to its December newsletter published today.
Francesca Carlesi is the Co-Founder and CEO of Molo, a new, super exciting fintech start-up, aiming to reimagine how people get mortgages forever. She was originally a University professor, envisioning pursuing an academic career, before quickly joining McKinsey & Co., immediately after finishing her Ph.D. Molo is her first experience as a start-up entrepreneur after a long career in the finance and banking world. Here she discusses how she made the transition and found the journey so far.
Building a bank designed for freelancers and solopreneurs with Joust’s George Kurtyka (Tearsheet), Rated: A
57 million people in the US freelance and 30 million or so of those are micro and small businesses. Small businesses use approximately a dozen apps and pieces of software to manage their finances. From a bank account to payments to QuickBooks to factoring, microbusinesses spend 365 hours a year reconciling the data between all their financial tools.
1 IN 4 SAYS MONEY IS THE BIGGEST HURDLE TO RUNNING A BUSINESS (Valpak), Rated: A
- 1 in 4 Americans considers funding to be the biggest obstacle.
- More women say not knowing how to run a business is a challenge than men.
- Millennials ages 25 to 34 are the most afraid of failure.
- 1 in 3 Americans lacks a strong business idea to begin with.
Plaid And Quovo Just Scratching The Surface With Data Aggregation (Forbes), Rated: A
The fintech consolidation is starting, at least in the financial data side of the business, with Plaid recently announcing an
With fintechs getting access to customers data residing at different banks and investment firms, the tie-up between Plaid and Quovo is seen as the early signs of the next wave of fintech disruption. These startups will not only help fintechs aggregate data but analyze it as well. That’s according to David Jegen, a partner at F-Prime Capital, an early stage venture fund based in Boston that co-led the Series B round of fundraising for Quovo. He said the industry has rapidly shifted from a time when no one beyond financial advisors gave much thought to aggregating all of a customer’s’ financial data to it now becoming expected. Just ask a millennial who wants to easily access their data from their bank account on a mobile trading app.
With fintechs getting access to customers data residing at different banks and investment firms, the tie-up between Plaid and Quovo is seen as the early signs of the next wave of fintech disruption. These startups will not only help fintechs aggregate data but analyze it as well. That’s according to David Jegen, a partner at F-Prime Capital, an early stage venture fund based in Boston that co-led the Series B round of fundraising for Quovo. He said the industry has rapidly shifted from a time when no one beyond financial advisors gave much thought to aggregating all of a customer’s’ financial data to it now becoming expected. Just ask a millennial who wants to easily access their data from their bank account on a mobile trading app.
Meet the start-up bank with millions of customers trying to disrupt the ‘adversarial’ American banking system (Business Insider), Rated: A
Due diligence on P2P platforms (FT Adviser), Rated: AAA
In the immediate aftermath of the credit crunch, politicians enthused about the new crop of peer-to-peer providers and even created the Innovative Finance Isa.
UK financial institutions will receive more clarity on Open Banking (Business Insider), Rated: AAA
The Open Banking Implementation Entity (OBIE) has published its Operational Guidelines and accompanying checklist to help financial institutions (FIs) better navigate Open Banking, per a press release.
With the guidelines, the OBIE aims to clarify the regulatory requirements for a dedicated interface, as set out in the revised Payment Services Directive (PSD2), RTS, EBA Guidelines, and Financial Conduct Authority (FCA) Approach documents.
Read the full report here.
Starling launches euro account as UK prepares for Brexit (AltFi), Rated: A
The digital-only bank, which expects to top one million customers this year, said the new account is a simple was to ‘send and receive euros for free’.
Alt Credit Scorer Aire Scoops Up $ 11 Million in Growth Funding (Finovate), Rated: A
Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.
AccountScore uses Open Banking to offer real-time debt advice with Insolvency Panel (AltFi), Rated: A
A new service has been set up for people in debt, giving them the power to let advisors see their bank accounts in order to offer quick and accurate advice.
The service is a tie-up between fintech bank transactions firm AccountScore and The Insolvency Panel launched this month.
Why are SMEs declining external investment, and is it a barrier to scale? (Vox Markets), Rated: A
Small businesses accounted for 22 per cent of the UK’s economic growth in 2017 according to Octopus Investments High Growth Small Business Report. These SMEs, which comprise less than one per cent of UK companies, created one in five jobs in 2017 and hold a wealth of potential for our economy. When it comes to the future of the UK business landscape, it seems that the best things do come in smaller packages.
SME finance app ANNA gets £8.5m funding (Fintech Futures), Rated: A
SME business account Anna has received an investment of £8.5 million from Kinetik as it prepares to launch new tools and products.
What Winter? Crypto Lending Firm Has Issued over $ 630M in Just Six Months (NullTx), Rated: A
The cryptocurrency winter has been one of many contrasts. While some firms have gone out of business and shut down, some have thrived. Celsius Networks belongs to the latter.
Based in London, the firm launched just six months ago, but it has grown by leaps and bounds. It has lent over $630 million in loans, predominantly in cryptocurrencies.
Aave Launches Bitcoin on Its Ethereum-based Crypto Lending Marketplace ETHLend (PR Newswire), Rated: A
AAVE, a UK-based FinTech Startup, today announced a new release for its crypto lending marketplace ETHLend. The release introduces the capability for the ETHLend users to use their Bitcoin holdings as a collateral to borrow funds for spending.
Exclusive: P2P firm shuts platform (AltFi), Rated: B
The UK Bond Network, a p2p platform for corporate bonds, is closing as of today Monday 4 February 2019, according to the firm.
From private bank client to farmer: a Chinese model of social lending (Euromoney), Rated: AAA
Financial services group CreditEase runs an app through which its private banking clients can be connected to needy women farmers in China’s rural interior. It’s a remarkable initiative taken up by 200,000 farmers and shows what can be done with low-level credit. But how does the risk management work?
PayPal backed fintech Raisin raises $ 114m (Financial Times), Rated: AAA
German financial technology group Raisin has raised $114m in new funding from high-profile backers including Index Ventures and PayPal, in one of the largest fundraisings to date in Europe’s emerging “wealth tech” space.
ING Bridges Dutch SMBs To Funding Options (PYMNTS), Rated: A
The partnership means Funding Options has launched services in the Netherlands, expanding beyond the U.K. for the first time, said reports in Crowdfund Insider. Approximately 1.8 million SMBs in the Netherlands will gain access to Funding Options via ING Bank.
The Irish fintech startups disrupting their industries (Irish Times), Rated: A
Also based at NOVA is Initiative Ireland which aims to give cautious investors lower-risk access to the Irish property market. With poor interest rates, investors face the perennial problem of what to do with their money. Risk takers will always have options, cautious investors less so, and this is Initiative Ireland’s sweet spot. It is offering returns in the order of six to eight per cent to those investing in its novel peer-to-peer lending platform for developers building social and affordable housing.
Banco BNI Europa, NDGIT accelerate PSD2 and Open Banking in Europe (The Paypers), Rated: A
BNI Europa implements “PSD2 Ready”, NDGIT’s smart standardized software solution following the Berlin Group RTS standard, to fulfil all PSD2 requirements. This cooperation is a milestone for the future development of Open Banking in Europe and for BNI Europa the next step in their company’s development.
International P2P Lending Volumes January 2019 (P2P-Banking), Rated: AAA
Milestones achieved this month (total volume since launch):
- MyTripleA crossed 50M EUR
- Peerberry crossed 50M EUR
- Ratesetter crossed 3000M GBP
- Swaper crossed 50M EUR
- Zopa crossed 4000M GBP
Global regulators are struggling to define fintech credit (Business Insider), Rated: AAA
While many jurisdictions have highlighted fintech credit as a key development in the nonbank financial space over the last year, they struggle to define exactly what fintech credit is, per findings of the Financial Stability Board’s (FSB’s) Global Monitoring Report on Non-Bank Financial Intermediation 2018.
Why VC Is The Answer To Falling Returns (Forbes), Rated: A
Technology has opened up access to banking but can it stop the unbanked from falling through the cracks? (Tearsheet), Rated: A
Those of us who work in finance can’t imagine life without a bank account. But for the world’s 1.7 billion unbanked adults, this is a reality. In the U.S., 33.5 million households are either unbanked or underbanked and lack the ability, criteria, or financial literacy to access banking services. Without access to savings and credit, these people often live — and remain — in a cycle of poverty.
In the U.S., nearly 95 percent of adults have a mobile phone and 80 percent of those are smartphones. And since they’re not tied to traditional banking norms such as branches, ATMs, and credit cards, the unbanked are more likely to adopt digital banking via their phones.
TymeBank in South Africa uses AI to help people learn about their money and how to save. It teaches people about credit scores and rewards them for good financial behavior — TymeBank offers an amazing 10 percent interest rate on savings accounts for customers who can define specific financial goals they want to hit, and then contribute to them.
Sancus to start accepting euros and dollars to fund loans (P2P Finance News), Rated: A
SANCUS will start accepting euro-denominated loans within the next few months, to help it expand its investor base.
The alternative business finance provider is also planning to establish a new base in the Cayman Islands by the end of 2019, a move which would allow it to accept dollar-denominated investments as well.
Revolut team ups with WeWork (AltFi), Rated: B
The new partnership will provide Revolut for Business customers with 3 months free of hot-desk space at a WeWork co-working space.
Australia’s getting wiser says Wisr in new campaign targeting disillusioned big bank customers (Mumbrella), Rated: A
Peer to peer lending service provider Wisr has targeted disillusioned big bank customers in its new ad campaign.
Diversify investments in P2P lending, youths urged (The Star), Rated: AAA
Technology-driven peer-to-peer (P2P) lending is becoming a popular investment choice among young investors, but the anticipated slowdown in the economy this year also raises the risk of losing money.
To protect their investment, a P2P financing platform operator said that investors should spread their investment into as many deals as possible.
DexAge – A Versatile Crypto-Trading Solution (Blockmanity), Rated: AAA
The P2P Crypto loan services allow users to retain their assets in case they predict the concerned cryptocurrency value might appreciate in the future. DexAge enables users to stake their crypto assets as collateral and acquire a loan of the same value to expand their investment profile.
Vancouver’s First P2P OTC Digital Trading Platform Officially Launched and Supported by Huobi Cloud Technology (Digital Journal), Rated: AAA
iBank Digital Asset L.P. (“iBank Digital”, “iBankEx” or the “Company”) has officially launched Vancouver’s first peer-to-peer (P2P) OTC digital currency trading platform on iBankEx. (www.ibankex.io) This launch is supported by Huobi Cloud (“Huobi Cloud”) technology, which has officially entered the Canadian market in 2019 with 120 exchanges around the world.
iBank Products & Services:
Fiat Lending – A decentralized global lending network connecting financial institutions worldwide by offering crypto backed loan business.
Crypto Lending – iBank provides crypto loans collateralized by your crypto assets in BTC/USDT with security and confidentiality.
News Comments Today’s main news: Klarna launches Boost. Funding Circle going where banks won’t. Zopa CEO says marketing restrictions appropriate for riskier platforms. ApplePie Capital hits $300M franchise loan milestone. Menē, Affirm partner. Today’s main analysis: SoFi and Prosper Q3 earnings. Today’s thought-provoking articles: LendingClub is healthier than ever. Average homeowner age in U.S. metro areas. Robo-advisors growing. Top 5 emerging […]
- Today’s main news: Klarna launches Boost. Funding Circle going where banks won’t. Zopa CEO says marketing restrictions appropriate for riskier platforms. ApplePie Capital hits $300M franchise loan milestone. Menē, Affirm partner.
- Today’s main analysis: SoFi and Prosper Q3 earnings.
- Today’s thought-provoking articles: LendingClub is healthier than ever. Average homeowner age in U.S. metro areas. Robo-advisors growing. Top 5 emerging fintech hotspots.
- ApplePie Capital hits $300 million business franchise loan milestone. Congratulations! Quite significant. I wonder how this niche would fare with more competition.
- SoFi, Prosper Q3 earnings. Another great analysis from PeerIQ.
- LendingClub appears healthier than ever. LendingClub appears to be recovering from its woes quite well. It looks healthy today, and it’s looking even better for the future.
- Court appoints lead plaintiffs in LendingClub lawsuit.
- The average homeowner age in 100 of the largest metro areas. A LendingTree study.
- LendingHome sheds light on house flipping in California.
- RealtyShares competitors speak on company’s early demise.
- Plastiq raises $27 million.
- SuperMoney launches student loan refinancing marketplace.
- 7 ways to finance home renovations.
- Klarna cuddles up with Gravity Blanket on POS financing.
- ArborCrowd co-founder recognized as HIVE 50 innovator.
- Funding Circle going where banks won’t.
- Zopa CEO says marketing restrictions on risky platforms is appropriate.
- Robo-advisors are growing.
- Klarna launches search for UK’s smoothest stores.
- FCA hailes positive impact of P2P regulation for cryptocurrencies.
- How to improve customer journey in lending.
- Why advisers should recommend P2P lending.
- Klarna launches Boost. Klarna hit the news in 3 different regions today.
- How direct lending and securitization can disrupt consumer lending in the Nordics.
- Menē, Affirm partner.
- Top 5 emerging fintech hotspots.
- SALT Lending is target of investigation in U.S.
- United States
- ApplePie Capital Reaches $ 300 Million Milestone in Franchise Business Loans (Citizen Tribune) Rated: AAA
- SoFi and Prosper 3Q Earnings, Volatility Ahead, PeerIQ’s Lending Earnings Insights (Peer IQ) Rated: AAA
- LendingClub: Looking Healthier Than Ever (Seeking Alpha) Rated: AAA
- Court appoints lead plaintiffs in class action against LendingClub (Northern California Record) Rated: A
- LendingTree Compares Average Homeowner Age Across 100 Largest U.S. Metropolitan Areas (Lending Tree) Rated: AAA
- LendingHome Shines Spotlight on California in First-Ever “State of The Flipping Market” Report (PR Newswire) Rated: A
- Real Estate Crowdfunding Pros Respond to RealtyShares’ Troubles (National Real Estate Investor) Rated: A
- Plastiq Raises $ 27M in Series C Funding (FinSMES) Rated: A
- SuperMoney Launches Student Loan Refinancing Marketplace (Finovate) Rated: A
- 7 ways to finance your investment home renovation (AZ Big Media) Rated: A
- Klarna Cuddles Up With Gravity Blanket To Give Consumers The Luxury Of Paying Over Time (PR Newswire) Rated: B
- ArborCrowd Co-Founder Adam Kaufman Recognized as a HIVE 50 Innovator (AP) Rated: B
- United Kingdom
- Funding Circle Is Going Where Banks Won’t (Barrons) Rated: AAA
- Zopa CEO: Marketing restrictions appropriate for riskier platforms (Peer2Peer Finance) Rated: AAA
- Robo-advisors are growing but incumbents still dominate investment services (Business Insider) Rated: AAA
- Klarna launches search for UK’s ‘Smooothest Stores’ (Fashion United) Rated: A
- FCA hails positive impact of P2P regulation for cryptos (Peer2Peer Finance) Rated: A
- Customer journey of trying to get a loan and how it could be improved (Lendit) Rated: A
- Paul Stallard: Why should advisers recommend peer-to-peer lending? (Professional Adviser) Rated: A
- European Union
- Klarna launches financing program Boost (Ecommerce News) Rated: AAA
- How direct lending and securitization can disrupt consumer lending in the Nordics (Lendit) Rated: A
- Menē Inc. Partners with Affirm to Offer New Credit Alternative to U.S. Customers (Business Wire) Rated: AAA
- Top 5 Emerging Fintech Hotspots in 2018 (Bank Innovation) Rated: AAA
- SALT Lending Platform Investigated, WSJ Continues Attack On Erik Voorhees (Crypto Disrupt) Rated: A
- How FinTech is Changing the Game for Microbusinesses (Entrepreneur) Rated: AAA
- Chinese fintech firm CashCash gets funding while website and app are blocked in Indonesia (Krasia) Rated: AAA
- HSBC eCredit: New Service to Streamline Banking for Small Businesses (Globe Newswire) Rated: AAA
ApplePie Capital Reaches $ 300 Million Milestone in Franchise Business Loans (Citizen Tribune) Rated: AAA
ApplePie Capital, the first and only online lender dedicated to franchising, announced that it recently surpassed $300 million in loans originated to franchise entrepreneurs opening or expanding their businesses.
SoFi and Prosper 3Q Earnings, Volatility Ahead, PeerIQ’s Lending Earnings Insights (Peer IQ) Rated: AAA
The gap between current and projected financial conditions continues to widen suggesting greater volatility ahead:
Prosper’s 10Q revealed that the company lost $19.8 Mn in 3Q, a $7.2 Mn improvement YoY. Net revenues declined from $28.9 Mn to $20.7 Mn YoY. Originations declined from $822 Mn to $640 Mn YoY driven by tighter credit guidelines and rising interest rates.
SoFi’s EBITDA loss in Q3 was $12 Mn compared to an EBITDA gain of $56 Mn in Q3 2017. SoFi’s originations were $2.5 Bn, down by 30% YoY. Rising rates have slowed SoFi’s student loan refinancing business and have contributed to the drop in originations. SoFi now has 700 k checking account customers and the company is branching into offering a suite of wealth management services to these customers. SoFi recently closed a $560 Mn line of credit.
Below is a comparison of key financial metrics of Prosper, SoFi, and their publicly-traded counterpart LendingClub.
LendingClub: Looking Healthier Than Ever (Seeking Alpha) Rated: AAA
Investors are barely noticing it, but LendingClub (LC) continues to pump through another record-setting quarter as the P2P lending platform shores up its core business and boosts its profit targets for the year. Volatility has largely left LendingClub stock; the company has traded in the $3-4 range for the better part of this year as investors have moved on to more exciting names, but in my view, LendingClub is well-positioned for a near-term rebound.
On the back of LendingClub’s strong Q3 report, the company also inched up its guidance for FY18. The forecast now calls for $693 million in revenue and $91.5 million in EBITDA at the midpoint of management’s ranges:
Court appoints lead plaintiffs in class action against LendingClub (Northern California Record) Rated: A
The U.S. District Court for the Northern District of California appointed lead plaintiffs in a class-action suit against LendingClub, alleging the San Francisco-based company tried to artificially inflate securities and defraud investors.
The plaintiffs, under the title LendingClub Investor Group (LIG), include Xiangdong Ding and Zhenbin Chen, who will serve as lead plaintiffs in the suit according to the Nov. 7 ruling. Ding and Chen invested in and allegedly suffered substantial monetary losses as a result of the fraud.
LendingTree Compares Average Homeowner Age Across 100 Largest U.S. Metropolitan Areas (Lending Tree) Rated: AAA
LendingTree set out to find which metro areas have the oldest homeowners. Using data from the U.S. Census Bureau’s American Community Survey, we ranked the 100 largest metropolitan areas by average homeowner age. While some of the rankings aren’t surprising (Florida metros dominate the “old” end of the list), cities popular among millennials aren’t necessarily gaining young homeowners.
- The average age of a homeowner across the 100 largest metropolitan areas in the United States is 54. Only two metros in our analysis — Provo and Ogden, Utah — have an average homeowner age below 50.
- Homeowners in Florida are older than homeowners in most other states. Seven out of the top 10 metropolitan areas with the highest average homeowner age were in Florida.
- Homeowners in cities in Utah are among the youngest in the country. Out of the top 10 metropolitan areas with the lowest average age for homeowners, metropolitan areas in Utah — Provo, Ogden and Salt Lake City — held the top three spots.
LendingHome Shines Spotlight on California in First-Ever “State of The Flipping Market” Report (PR Newswire) Rated: A
LendingHome today released a never-before-seen, inside look at localized market statistics based on a combination of LendingHome proprietary data and publicly available real estate records.
LendingHome’s inaugural “State of The Flipping Market” focuses on California which experienced the biggest surge in brand-new house flippers – those who buy, rehabilitate (fix), and resell (flip) residential homes – compared to any other state in 2017. California was also LendingHome’s top state for loan originations in 2017.
LendingHome’s report also pinpoints California’s Top 10 flipping hot spots by county. Ranking first was Los Angeles County, where a whopping 25.71% of all houses purchased were flips. The Top 10 in order:
Real Estate Crowdfunding Pros Respond to RealtyShares’ Troubles (National Real Estate Investor) Rated: A
Executives at three of RealtyShares’ real estate crowdfunding counterparts—ArborCrowd, CrowdStreet and EquityMultiple—say the collapse of a player like RealtyShares is an unfortunate but inevitable growing pain in an evolving industry. Charles Clinton, co-founder and CEO of EquityMultiple, calls the RealtyShares situation a “natural blip.”
The fall of RealtyShares isn’t “an indicator of the health or the longevity of this industry,” Steen says. “It’s actually an indicator that the industry is maturing. In an industry like this—crowdfunding of commercial real estate—you’re going to have certain business models that survive and certain ones that might not.”
Plastiq Raises $ 27M in Series C Funding (FinSMES) Rated: A
Plastiq, a San Francisco, CA-based provider of a solutions to pay bills by credit card, raised $27m in Series C financing.
The round was led by Kleiner Perkins with participation from DST Global. In conjunction with the funding, Kleiner Perkins general partner, Ilya Fushman, will join the Plastiq Board of Directors.
The company intends to use the funds to accelerate growth and roll out new services, develop and deepen its partnerships with key players in the financial and payments sectors, such as MasterCard and other major card brands.
SuperMoney Launches Student Loan Refinancing Marketplace (Finovate) Rated: A
Financial services comparison site SuperMoney is venturing into new territory this week with the launch of its student loan refinancing comparison marketplace. And since student loans are the largest source of unsecured debt in the U.S., with outstanding loan amounts totaling $1.53 trillion, now is as good a time as ever for the new endeavor.
The new marketplace aims to help students make smarter decisions when refinancing their existing student loans. By submitting a single application, users can receive actual rate quotes in real time from multiple lenders, including LendKey, CommonBond, and SoFi. Each offer transparently shows users a breakdown of monthly costs, payments, and fees so that they can make the best decision based on their circumstances.
7 ways to finance your investment home renovation (AZ Big Media) Rated: A
2. Open a Home Equity Line of Credit – If you’ve been paying down your mortgage for a few years, you’ll have built sizeable equity into your home. Assuming you have decent credit, most banks will give you a line of credit based on that equity.
4. Look into Peer-to-Peer Lending – Peer-to-peer lending is another way to get funding with a comparatively low barrier to entry. Investors put their extra cash into a peer-to-peer lending platform so you borrow from individual investors rather than a bank.
6. Crowdsource the Money – If friends and family are sympathetic to your needs, you may be able to generate funds from them. It’s easy to collect money through crowdsourcing with platforms such as GoFundMe.
Klarna Cuddles Up With Gravity Blanket To Give Consumers The Luxury Of Paying Over Time (PR Newswire) Rated: B
Today, Klarna, a leading global payments provider, announced a new collaboration with Gravity Blanket, creator of weighted blankets and sleep products engineered to naturally reduce stress and increase relaxation. Shoppers will now be able to use Klarna’s Slice it and brand-new Slice it in 4 products, which allow consumers to pay for their products in installments.
ArborCrowd, the only online platform that enables individuals to make equity investments in institutional-quality commercial real estate, announced today that its Co-Founder and Managing Director, Adam Kaufman, was named a HIVE 50 Innovator by Hanley Wood, the premier company serving the information, media, and marketing needs of the residential and commercial design and construction industries.
The prestigious HIVE 50 is made up of the top people, products, and processes that are leading the charge to inspire creativity, improve performance, and explore better ways to build. This year’s honorees were separated into five categories. Mr. Kaufman was selected as one of the top innovators in the “Capital” category for his role in co-founding and leading ArborCrowd, which provides accredited investors with access to institutional-quality real estate investment opportunities.
Funding Circle Is Going Where Banks Won’t (Barrons) Rated: AAA
One company that isn’t quite doing that is Funding Circle , the platform lending company founded in the U.K. in 2010. After an initial public offering earlier this year, it’s publicly traded on the London Stock Exchange with a $1.6 billion market cap.
That’s a lower valuation than the company hoped for and that “less than giddy IPO,” as Bloomberg put it, has been seen as a cautionary data-point for other soon-to-be-public fintech lenders.
Zopa CEO: Marketing restrictions appropriate for riskier platforms (Peer2Peer Finance) Rated: AAA
ZOPA’S chief executive has said that proposed investor marketing restrictions are appropriate for platforms that offer riskier manual lending opportunities but not for them.
Jaidev Janardana (pictured) said that when an investor is lending against one property or one business, this could be riskier and “we need to make sure investors are sophisticated when they make these decisions”.
Robo-advisors are growing but incumbents still dominate investment services (Business Insider) Rated: AAA
A growth in the demand for low-cost investment services in the UK is driving new investor uptake in fintech robo-advisors, according to Boring Money research. Through Q3 2018, 800,000 new DIY investment accounts — where customers decide on investment choices without the help of financial advisors — were opened in the UK.
Of those new account openings, a third were with one of the UK’s leading fintech robo-advisor operators, including Nutmeg and Moneyfarm, compared with 11% a year ago. The total number of DIY investment accounts, inclusive of customers of robo and traditional platforms, rose to 4.8 million in the same period — a 22% uptick.
Klarna launches search for UK’s ‘Smooothest Stores’ (Fashion United) Rated: A
Klarna is searching for eight small and medium-sized enterprises to help them grow and take their businesses to the next level with its ‘Smooothest Store’ competition.
Open to businesses specialising in fashion, jewellery or lifestyle products, who are less than two years old, with an e-commerce store and a turnover in excess of 100,000 pounds per annum, the competition will help the winning up-and-coming retailers with a tailored combination of guidance, finance, and Klarna’s in-demand Pay later payment product.
FCA hails positive impact of P2P regulation for cryptos (Peer2Peer Finance) Rated: A
Speaking at the LendIt Fintech conference in London, Chris Woolard (pictured) said the FCA wants the UK to be a “good place” for cryptoassets but it must be safe for consumers.
He highlighted that the way P2P platforms have become authorised shows that regulation is not to be feared.
Customer journey of trying to get a loan and how it could be improved (Lendit) Rated: A
Today’s customers are looking for transparency and speed. My credit card provider had years to collect data on my and had ample opportunity to contact me and explain what information they needed. Sadly they chose to wait for me to get fed up with their slow process. We see companies struggle everyday with the balance between calculated risk and customer experience. At Equiniti we have dealt with many similar situations in which we try to find the right balance for our client so that they can offer their client the credit they need in a safe and structured way without sacrificing speed. Perhaps it is time that I offer this service to my own bank. But I would make them ask me 3 times………
Paul Stallard: Why should advisers recommend peer-to-peer lending? (Professional Adviser) Rated: A
Peer-to-peer lending is growing in popularity among borrowers and investors but where could financial advisers fit into the picture? Paul Stallard has some thoughts on the matter.
Peer-to-peer lending is growing in popularity among borrowers and investors alike, offering a flexible alternative to traditional investment products. In particular, peer-to-peer lending is catching on among property investors, with platforms offering attractive returns without the associated hassle and risk of traditional buy-to-let investing.
Klarna launches financing program Boost (Ecommerce News) Rated: AAA
Klarna has launched its own financing program for SME retailers in Europe. The new initiative is called Boost and is aimed to further support retailers in accelerating their growth. The company promises the application process will be simple and straightforward.
Klarna’s Boost is currently available in Austria, Denmark, Finland, Germany, the Netherlands, Norway and Sweden for selected merchants only, but it will be widely available in these seven European countries from the beginning of December.
The company explains the release by saying how cash flow is often one of the biggest hurdles for entrepreneurs and small businesses who want to grow further.
The consumer credit market in Sweden is a relatively large and growing market. The total loan volumes amount to approximately Bn EUR 23, distributed among 1.4 million individuals. According to the Swedish central bank, the average interest rate is 12.5% and credit losses are between 0.9% to 1.5% per annum.
The funding predominantly comes from Swedish banks and niche banks which are advanced in digitization and benefit from the Swedish population being used to managing their finances online. However, digitization has not contributed to improving competition or the conditions for consumers. Instead, net interest rates (rates after deduction of funding costs) have risen well beyond 8-10% and created the world’s most profitable banks with a return on equity often well above 30%.
Menē Inc. Partners with Affirm to Offer New Credit Alternative to U.S. Customers (Business Wire) Rated: AAA
Menē Inc. (TSX-V:MENE) (“Menē” or the “Company”), an online 24 karat investment jewelry brand, today announced its partnership with Affirm, which provides U.S. customers with a new option based on real-time credit decisions that allow them to split Menē purchases into monthly payments while receiving items directly following payment capture.
Qualified U.S. customers will be offered 0% APR loans for 3 or 6-month terms, while remaining customers will be offered 10-30% APR loans for 3, 6 or 12-month terms. For example, a $600 loan over six months at 0% APR would cost $100 per month. Affirm’s offering is in addition to Menē’s existing Harvest Plan payment program, which remains available to Canadian and other international customers.
Top 5 Emerging Fintech Hotspots in 2018 (Bank Innovation) Rated: AAA
According to a report, the city has seen a 28% increase in technology jobs in the last five years.
The city already has major fintech players like online marketplace LendingTree, automated bill solutions provider AvidXChange, home lending platform Movement Mortgage, mobile payment companies like Passport and Payzer, and the list goes on.
Mexico City, Mexico
It’s already home to fintechs like Bankaool, a challenger bank offering an annual interest rate of 3.75%; Conekta, an AI-powered platform develops that helps FIs in Latin America detect and prevent fraud; as well as CLIP, a Square Cash-like company that allows merchants to turn their phones and tablets into POS terminals.
SALT Lending Platform Investigated, WSJ Continues Attack On Erik Voorhees (Crypto Disrupt) Rated: A
The WSJ reports that a subpoena was sent to the SALT lending platform this February and the SEC is currently evaluating whether or not the ICO constituted an unregistered securities offering. SALT’s troubles do not end there. The SALT CFO has also filed a lawsuit against the company because favorable loans were given to company executives and family members.
How FinTech is Changing the Game for Microbusinesses (Entrepreneur) Rated: AAA
The FinTech ecosystem is a financial evolution in itself. Right from money transfers to personal loans, from account management to asset management, FinTech is rapidly making its way into the lives of the tech-savvy microentrepreneurs of today. Just a few years ago, the only way to start a business was to approach a bank or an investor for financial assistance. Thanks to FinTech, the micro or small businesses now can choose to no longer go through the conventional methods to get microloans for starting, running or scaling up their businesses.
FinTech has opened a whole new world of opportunities for small businesses. They can now offer more and better services at a reduced price. But, if you want to not only sustain but succeed in your business, it is important that you embrace technology and stay up to date with the latest FinTech developments.
Chinese fintech firm CashCash gets funding while website and app are blocked in Indonesia (Krasia) Rated: AAA
P2P (peer to peer) lending has grown popular in Indonesia. These online lenders promise quick loans with few questions asked. According to Indonesia Investments, credit disbursement through P2P lending in Indonesia has soared 204.7% this year.
Hundreds of fintech startups launched in Indonesia with variations of the P2P loan model; some of the older players are starting to see traction, while some others are facing various challenges due to increasingly stringent regulations.
The Financial Services Regulator, OJK, at some point put out a list of more than a hundred online lenders that it had banned for pushing into the market without going through the mandatory registration with the regulator, but that doesn’t appear to deter startups from participating in the lending gold rush.
HSBC eCredit: New Service to Streamline Banking for Small Businesses (Globe Newswire) Rated: AAA
Biz2Credit is working with HSBC Bank Canada to give Canadian small business owners quicker and easier access to apply for business financing.
HSBC eCredit is a digital-first approach to lending, which will allow small business owners to apply for financing online. Currently available by invitation in selected areas, HSBC eCredit will be fully available country wide in English December 2018 and in French the following month.
News Comments Today’s main news: LendingClub spared from sharing underwriting docs with investors. Wealthsimple raises $65M. Zopa warns investors of increased defaults. Raisin now operates in UK. RaboDirect to bow out of Ireland. Today’s main analysis: LendingClub’s Q4 2017 results. Today’s thought-provoking articles: LendingClub’s CIO issues an update on Q4 results. LendingTree ranks best places for fresh start. Faster payments mean […]
- Today’s main news: LendingClub spared from sharing underwriting docs with investors. Wealthsimple raises $65M. Zopa warns investors of increased defaults. Raisin now operates in UK. RaboDirect to bow out of Ireland.
- Today’s main analysis: LendingClub’s Q4 2017 results.
- Today’s thought-provoking articles: LendingClub’s CIO issues an update on Q4 results. LendingTree ranks best places for fresh start. Faster payments mean faster fraud. Revolut CEO on work-life balance and overcoming challenges. The Temenos share buyback and Fidessa takeover.
- LendingClub’s Q4 2017 results. AT: “Read them for yourself.”
- Update from LendingClub’s CIO. AT: “An interesting look at the forces LendingClub faces, internally and externally.”
- LendingClub doesn’t have to share underwriting docs with investors.
- LendingTree ranks best places for a fresh start. AT: “As a Texan, I’m envious of Buffalo, New York. An interesting look at where to go if you want a fresh financial start.”
- Why faster payments mean faster fraud. AT: “Cybersecurity is one of the most important core business concerns for banks and alternative lenders alike.”
- Greenlight raises $16M.
- 7 companies reimagining real estate investing.
- Enodo provides quantifiable insights for property investors.
- Savings and deposits rates in a rising rate environment.
- Kabbage president talks about small business loans.
- The expanded Military Lending Act regs.
- How to invest in private loans.
- Challenges to the challenger bank business model. AT: “It’s a shame no real challenger banks have emerged in the U.S. The market could be taken over by foreign challenger banks moving in on the turf.”
- BankMobile launches online magazine. AT: “I’m a huge believer in branded journalism as a marketing strategy.”
- What family offices want from an alternative investment manager.
- 33% of Americans have more credit card debt than savings.
- U.S. mobile payment market to hit $3T by 2020.
- Marlette Funding a consumer lending finalist in LendIt Fintech awards.
- Klarna North America to sponsor, exhibit at eTail West 2018.
- Varo Money gets new chief marketing officer.
- Zopa warns investors of increased defaults.
- Raisin operating in the UK.
- Revolut CEO discusses challenges to building a competitive business.
- How startups can gain traction in financial services.
- Lloyds Bank puts $4.1B aside for digital strategy.
- P2P lending a part of SME finance inquiry.
- Guide to IFISAs, part 2.
- How Wonga went worldwide.
- RaboDirect bows out of Irish market.
- On the Temenos takeover of Fidessa.
- Anyfin raises 4.8M Euro.
- BNI Europa, Code for All partner to train IT developers.
- The Ripio Credit Network.
- Etherty launches blockchain-based real estate platform.
- 500 Startups, Huobi Labs to incubate blockchain projects.
- United States
- Fourth Quarter 2017 Results (LendingClub), Rated: AAA
- Q4 2017: An update from our CIO (Lending Club), Rated: AAA
- Judge Nixes LendingClub Investor Bid For Underwriter Docs (Law360), Rated: AAA
- LendingTree Ranks Best Places for a Fresh Start in 2018 (PR Newswire), Rated: AAA
- Why faster payments mean faster fraud (Tearsheet), Rated: AAA
- Greenlight raises $ 16m for kids’ debit card (Finextra), Rated: A
- 7 COMPANIES REIMAGINING REAL ESTATE INVESTMENT AND FINANCE (Builder Online), Rated: A
- Enodo delivers quantifiable insights for property investors (Realty Biz News), Rated: A
- Savings and Deposit Rates in a Rising Rate Environment (Lend Academy), Rated: A
- Kabbage’s Kathryn Petralia Talks Small Business Loans (LendEDU), Rated: A
- The Expanded Military Lending Act Regulations (The National Law Review), Rated: A
- How to Invest in Private Loans (The Student Loan Report), Rated: A
- As challenger banks seek to enter the US, the business model still faces hurdles (Tearsheet), Rated: A
- Why BankMobile has launched an online magazine (Tearsheet), Rated: B
- WHAT FAMILY OFFICES WANT FROM ALTERNATIVE INVESTMENT MANAGERS (All About Alpha), Rated: A
- 33% of Americans do not have more savings than credit card debt (KHOU), Rated: A
- US Mobile Payment Market to Reach $ 3 Trillion by 2020, Fintech Stocks Lead the Way (Investing News), Rated: A
- Marlette Funding Named a Finalist in Top Consumer Lending Platform in LendIt Fintech Industry Awards Competition (Business Wire), Rated: B
- Klarna North America to Highlight “Smoooth” Payment Products at eTail West 2018 (Klarna Email), Rated: B
- Carl Gish Joins Varo Money as Chief Marketing Officer (PRWeb), Rated: B
- United Kingdom
- Zopa warns over defaults as investor returns decline (Financial Times), Rated: AAA
- Fintech Raisin Crosses the Channel to Offer Services to UK Savers (Crowdfund Insider), Rated: AAA
- Revolut’s Nikolay Storonsky on long hours and high staff turnover (Financial Times), Rated: AAA
- How Startups Can Gain Traction In The Financial Services Market (Forbes), Rated: A
- Lloyds Bank Marks $ 4.1B for Digital Strategy (Bank Innovation), Rated: A
- P2P lending to form part of inquiry into SME finance (P2P Finance News), Rated: A
- Ultimate guide to Innovative Finance ISAs: Part two (P2P Finance News), Rated: A
- How Short Term Lender Wonga Went Worldwide (Silicon India), Rated: A
- China tries to bring order to sprawling online finance sector (Asian Review), Rated: A
- European Union
- RaboDirect to quit Irish market in May (The Irish Times), Rated: AAA
- Bizarre Buybacks and Expensive Takeovers (The Washington Post), Rated: AAA
- Anyfin raises €4.8 million to refinance loans with a statement selfie (Finextra), Rated: A
- BNI Europa and Code for All partner to train new generation of IT developers (Finextra), Rated: A
- What Is the Ripio Credit Network? (The Merkle), Rated: A
- Etherty launches blockchain-based, real estate trading platform (Construction Business News), Rated: A
- 500 Startups, Huobi Labs to Incubate Blockchain Projects (CoinDesk), Rated: B
- Australia/New Zealand
- FMA opens applications for personalised digital advice (Scoop), Rated: AAA
- P2P lending, payments platform JaldiCash to merge with parent firm Weizmann Forex (Financial Express), Rated: A
- ALAMI is on a journey to popularise sharia-based finance in Indonesia. (e27), Rated: A
- Wealthsimple raises $ 65 million in funding from Power Financial group of companies (Cision), Rated: AAA
Fourth Quarter 2017 Results (LendingClub), Rated: AAA
View the reported Q4 2017 earnings results from LendingClub right here.
Q4 2017: An update from our CIO (Lending Club), Rated: AAA
A core strength of LendingClub’s marketplace model is the ability to incorporate data insights quickly in order to responsibly adapt for the benefit of borrowers and investors.
From 2009 to 2014, credit supply was tight, so consumer loans experienced better-than-average loss rates. Since then, credit supply has increased, and the industry has seen a return to long-term average delinquency rates and higher losses in higher risk populations.
As a result of cumulative actions taken, our loss forecast for newly originated loans remains unchanged in aggregate compared to last quarter.
U.S. economic growth remains slow but steady, with annual GDP growth rate increasing to 2.6% in the fourth quarter of 2017. A primary driver of GDP growth since the financial crisis has been a historically low unemployment rate, which is down to 4.1% from its peak of 10% in 2009.
Updated pricing and return forecast
We continuously refine our methodology and recalibrate interest rates based on shifts in risk across the portfolio. This quarter, interest rates are increasing for certain subgrades in grades D and E.
Loss forecasts are remaining stable in aggregate for the platform relative to last quarter.
Platform Summary and Projections as of February 20, 2018
Judge Nixes LendingClub Investor Bid For Underwriter Docs (Law360), Rated: AAA
Morgan Stanley, Goldman Sachs and the other underwriters of LendingClub Corp.’s $1 billion initial public offering for now don’t have to produce roughly a thousand documents sought by a class of investors suing the peer-to-peer lending company for alleged stock fraud, a California federal judge ruled Tuesday.
LendingTree Ranks Best Places for a Fresh Start in 2018 (PR Newswire), Rated: AAA
LendingTree, the nation’s leading online loan marketplace, today released the findings of its study on the best cities for those seeking a fresh start.
First, the study looked at eight elements to consider when going through a financial recovery, such as the local median income and rents, and if the state has laws to protect debtors from aggressive collections and penalties, in case methods like debt consolidation or refinancing to lower rates aren’t enough to manage liabilities.
Next, to determine what opportunities there might be for people seeking a solid job and income, the study looked at the percentage of people in these metros who are between the ages of 35 and 64, single, employed, have health insurance coverage and are currently enrolled in school.
Lastly, to get an idea of how well people in an area are recovering from financial calamity, LendingTree calculated how quickly credit scores are rising after a bankruptcy by using proprietary data on the average credit score, on a geographic basis, of LendingTree customers who declared bankruptcy between three to four years earlier.
1. Buffalo, N.Y. – 67.6
At $738, Buffalo has the lowest median rent among the 50 cities reviewed, and 94 percent of adults over the age of 35 are insured (second highest). Residents who declare bankruptcy have an average credit score of 664 three years on, tied for the second highest score for the cities reviewed, suggesting that conditions are favorable for financial recovery. However, Buffalo ranks poorly in two metrics: at $52,303, median income is the seventh lowest, and only one other city has fewer students over the age the 35.
2. Minneapolis – 62.9
At just 3.7 percent, the exceedingly low unemployment rate for citizens in Minneapolis between the ages of 35 and 64 helps push the city to the No. 2 spot. Not only are most over-35s employed, but they also earn a median salary of $70,915, the eighth highest in the cities reviewed, 94 percent have health insurance and median rents are relatively low at $963.
3. Salt Lake City – 62.6
Only two other cities have more over-35s enrolled in school (Virginia Beach and Washington), and only five have more unmarried over-35s (New Orleans has the most). That could be due to the lowest unemployment rate for over-35s of any city reviewed (3.6%), and higher-than-average median income of $64,564 for that same group. That combines nicely with a moderate median rent of $967.
Why faster payments mean faster fraud (Tearsheet), Rated: AAA
Less than a month ago Early Warning Services, the network that powers peer-to-peer payments platform Zelle, touted $75 billion in funds moved through its bank-supported platform with plans to expand its member network. One member bank, however, also reported a fraud rate of 90 percent shortly after implementing Zelle last year, said someone familiar with the statistics who wished to remain anonymous.
Fraud detection in banks, however, is no longer just about building a wall to keep outsiders out; cybersecurity teams need to install a filter that can identify who can and should enter the system.
Bank of America will spend $600 million this year on cyber defense alone, its chief operations and technology officer Cathy Bessant recently told Tearsheet. In December Menlo Security, a company that provides malware isolation solutions, raised $40 million in Series C funding, bringing its total funding to $85 million. JPMorgan Chase, HSBC and American Express Ventures are among its investors.
Greenlight raises $ 16m for kids’ debit card (Finextra), Rated: A
7 COMPANIES REIMAGINING REAL ESTATE INVESTMENT AND FINANCE (Builder Online), Rated: A
Companies like Better Mortgage, Blend and LendingHome are reengineering the way mortgages are applied for and underwritten. While Cadre and Fundrise are moving real estate investments from Excel spreadsheets to the digital world.
GreenSky offers on-the-spot loans of up to $65,000 for home improvement projects with generous zero-interest promotional periods. Lemonade offers urban renters and homeowners insurance for as little as $5 and $25, respectively. LendingHome provides financing for house flippers, and more recently, homeowners.
Enodo delivers quantifiable insights for property investors (Realty Biz News), Rated: A
With the Enodo platform investors can cut to the chase with a platform that supports their decision-making through acquisition all the way to renovation, with features including rent price forecasting. In other words, Enodo is a real estate investing platform that provides quantifiable data, meaning investors no longer have to rely on hunches alone.
Enodo allows investors to carefully analyze any property in the country using basic physical and investment parameters. Users can also identify comparable properties, predict operating expenses and more. Parameters include things such as the year the home was built, number of units, amenities, market demographics and more.
Savings and Deposit Rates in a Rising Rate Environment (Lend Academy), Rated: A
This thread called Cash Parking on the Lend Academy Forum was created back in December 2016 and since then, forum members have discussed opportunities at banks and credit unions.
The discussion caught my eye when one user posted a 3% 5 year CD which happened to be offered by my local credit union.
Signing Up for a Savings Account at Marcus
Marcus by Goldman Sachs has been near the top of the list since I began checking. We last did a piece on savings account rates back in June 2017 when Goldman Sachs’ deposit accounts were still branded under GS Bank. Rates are now 30 basis points higher at 1.5% on Marcus accounts.
Their investment has paid off and it was recently reported that they had $17 billion of deposits. Since Goldman Sachs acquired GE Capital’s retail deposits, deposits have grown a whopping 90%.
Kabbage’s Kathryn Petralia Talks Small Business Loans (LendEDU), Rated: A
She’s been hailed by Forbes as one of the most powerful women in the world, and TechCrunch recognized her for “crushing it” last year. Both sources refer to her success as a leader at Kabbage, Inc. which has financed over $4 billion to more than 130,000 businesses to date.
Q: What sets Kabbage apart from other online small business lenders?
A: Our focus on real-time access to third-party data and our ability to stay connected to our customer’s data all the time. This technology allows us to provide an automated experience.
Q: So, user experience seems to be a big advantage for non-traditional lending sources. While that’s an advantage, what disadvantages does a lender like Kabbage have against a traditional lender?
A: There are lots of things. First, traditional lenders like banks have well-known brands; they have access to really cheap capital. They have a lot of customers already. They already have access to a framework which they operate with the ability to move funds.
The only thing they don’t have is the ability to serve the market, because it’s too expensive for them to serve our customers with the type of product they need.
Q: Was there a typical small business customer that you would lend to? Do you lend to certain business more often than others today?
A: Well, we got our start making loans to eBay sellers which you may or may not know. The reason we started there was because that’s where the first API was available, so we could get information on a business’ performance. Then as more APIs became available, we were able to expand our business. So for a long time, all of our customers were eCommerce businesses.
But about three years ago, we began expanding to service brick & mortar businesses, and today, about 85% of our customers are brick & mortar businesses.
Q: Over the last 5 years, fintech lending has grown to take up more of the small business lending market. Where do you see the market share in 5 years? Where’s Kabbage in this equation?
A: If you’re talking about businesses seeking less than half or a quarter million dollars, I think it’ll stay the way it is with largely non-traditional players, like Kabbage, filling that space. And I think banks could serve that market through partnerships, but overall, I think it’s going to look much the same as it is now.
The Expanded Military Lending Act Regulations (The National Law Review), Rated: A
The Military Lending Act’s (“MLA”) lending restrictions are expanded to apply to consumer credit card issuers and unsecured consumer lenders. Compliance in most areas was mandatory as of October 3, 2016, but as to credit cards the mandatory compliance date is October 3, 2017.
The MLA applies to active-duty military personnel, active Reserve and National Guard personnel serving on Title 10 orders, and their dependents with a valid military identification card.
How to Invest in Private Loans (The Student Loan Report), Rated: A
The $1.45 trillion student loan market is made up of public and private student loans.
We now live in a world where crowdfunding and P2P investment opportunities are everywhere. The student loan market is no different. Companies like Sofi are shaking up what it looks like for both students and investors alike.
Sofi (short for Social Finance) has funded over $25 billion in student loans, with over 437,000 members around the country.
As challenger banks seek to enter the US, the business model still faces hurdles (Tearsheet), Rated: A
European digital banks N26 and Revolut will launch in the U.S. later this year, and there are reports that U.K. challenger bank Monzo is mulling a move into the U.S. market. Meanwhile, three U.S. banking startups — Varo Money, Square and Moven — recently announced plans to apply for or acquire U.S. banking licenses.
For N26, winning means customers loving N26 like in Europe. U.K.-based Revolut, which plans to launch in the U.S. later this year with a multi-currency bank account, said winning means acquiring millions of customers, particularly those who travel often; and to San Francisco-based Chime, a win is to bring large numbers of customers away from traditional institutions.
Why BankMobile has launched an online magazine (Tearsheet), Rated: B
BankMobile has launched a content marketing website called Paradigm Money to help customers navigate personal finance.
The site, which launched this month, includes news, opinion pieces, interviews and advice.
BankMobile, which was born as the mobile-only offshoot of Customers Bank which sold it last year, has 1.8 million customers to date and opens about 300,000 new accounts each year.
WHAT FAMILY OFFICES WANT FROM ALTERNATIVE INVESTMENT MANAGERS (All About Alpha), Rated: A
Competition within the alternatives sector for family office investments is at an all-time high, as these investors get more comfortable with the range of assets available to them and their general understanding of alternatives rises. Fund managers want to win these wealthy investors over, but often find they are unsure of how best to pursue them. The family office client is increasingly demanding a more tailored approach to wooing them over. Managers who can adapt their prospecting tactics stand a better chance of winning a partnership with these prized investors.
A Q4 2017 research study, “Single-Family Offices and Alternative Investments,” by Institutional Capital Network, provides a framework for the changing dynamics in family office activity within the alternatives space. Some of the research findings that stand out in particular include:
First-generation founders have a “stay-rich” mentality, while second-generation are more likely to have a “get-richer” perspective.
About 40% of second generation single-family offices are investing 15% or more of their total portfolios into alternatives, compared to 20% of first generation single-family offices that are investing at similar levels. In 2017, 71% increased their direct allocations relative to 2016, and 82% intend to do so in the future.
33% of Americans do not have more savings than credit card debt (KHOU), Rated: A
In the latest survey by personal finance site Bankrate.com, 33% of Americans say they do not have more emergency savings than credit card debt. That includes 21% who say their credit card debt exceeds their emergency savings and 12% who indicate they have no savings or credit card debt.
While one in three Americans are financially ill-equipped for an emergency, that is down from 41% in 2017 and 43% in 2016 and is the lowest level in the eight years of the survey.
Fifty-eight percent say their emergency savings fund exceeds their credit card debt, which is up from 52% in the last two years and ties 2015 as the best seen in eight years.
US Mobile Payment Market to Reach $ 3 Trillion by 2020, Fintech Stocks Lead the Way (Investing News), Rated: A
A new Market Research Reports Search Engine report states the US mobile payments will grow from $550 billion in 2015 to reach $2.8 trillion by 2020, representing a compound annual growth rate (CAGR) of 39.1 percent over the course of that period.
Marlette Funding Named a Finalist in Top Consumer Lending Platform in LendIt Fintech Industry Awards Competition (Business Wire), Rated: B
LendIt Fintech, the world’s leading event in financial services innovation, announced today that they have selected the Best Egg Personal Loan Platform provided by Marlette Funding, LLC, as a finalist in the Top Consumer Lending Platform category for the LendIt Fintech Industry Awards. The Top Consumer Lending Platform finalists were selected from companies that demonstrate a combination of loan performance, volume, growth, product diversity and responsiveness to stakeholders.
Klarna North America to Highlight “Smoooth” Payment Products at eTail West 2018 (Klarna Email), Rated: B
Klarna, a global payments provider, is a sponsor of and will be exhibiting at next week’s eTail West 2018 in Palm Springs, Calif.
Carl Gish Joins Varo Money as Chief Marketing Officer (PRWeb), Rated: B
Mobile banking startup Varo Money, Inc. today announced the hire of Carl Gish as Chief Marketing Officer. Gish is a marketing and general management executive with more than 20 years of experience across well-known, high-growth consumer brands and e-commerce businesses, including Amazon, Unilever, Dyson, eBay and Affirm. He will lead all aspects of the company’s branding and marketing, and will work directly with CEO Colin Walsh to drive large growth in Varo’s customer base across multiple marketing channels and partnerships.
Zopa warns over defaults as investor returns decline (Financial Times), Rated: AAA
The UK’s oldest peer-to-peer service is warning investors that defaults on its recent loans will be running at a higher rate than during the financial crisis.
Fintech Raisin Crosses the Channel to Offer Services to UK Savers (Crowdfund Insider), Rated: AAA
Savings marketplace Raisin has launched in the UK.
Revolut’s Nikolay Storonsky on long hours and high staff turnover (Financial Times), Rated: AAA
Over the past three years, and with the backing of Balderton Capital and Index Ventures, two European venture capital firms, Mr Storonsky’s company has raised about £60m and had a valuation of £300m last year.
How Startups Can Gain Traction In The Financial Services Market (Forbes), Rated: A
The United Kingdom’s financial technology sector attracted a record £1.34bn in venture capital investment in 2017, with 90% of that money going to startup and early stage businesses based in London.
Those raising cash last year included peer2peer lending platform Funding Circle (£81.9m); payments company, Transferwise (£211m) and challenger bank, Monzo (£71m).
Last week I spoke to two fintech entrepreneurs – Ollie Purdue of online bank account provider, Loot and Jared Jesner, CEO of currency exchange, WeSwap – about their reasons for entering the fintech arena and how they hope to carve out a niche in a crowded market.
Lloyds Bank Marks $ 4.1B for Digital Strategy (Bank Innovation), Rated: A
British bank Lloyds has put aside £3 billion ($4.1 billion) for digital development and growth, the bank announced today.
The £3 billion is a 40% increase on the spend Lloyd marked for its previous three-year expansion plan.
P2P lending to form part of inquiry into SME finance (P2P Finance News), Rated: A
POLITICIANS are going to consider the availability and uptake of peer-to-peer lending as part of an inquiry into finance for small-and-medium-sized enterprises (SMEs).
Ultimate guide to Innovative Finance ISAs: Part two (P2P Finance News), Rated: A
Lending to small- and medium-sized enterprises (SMEs) has soared in recent years. Members of the Peer-to-Peer Finance Association have cumulatively lent a total of £5bn to businesses versus £3bn to individuals, as of the end of 2017.
Loans to SMEs tend to produce a higher rate of return than loans to consumers, but they can also be riskier in some cases. The average size of loan is also much higher.
How Short Term Lender Wonga Went Worldwide (Silicon India), Rated: A
Today the brand eclipses its competition, with many of its 400 failing to survive in 2016 as fresh price caps on loan and repayment charges came into action.
With UK-domination taken care of, the lender has been expanding rapidly overseas, starting its journey by launching in Canada, South Africa and Poland, before going on to purchase and assimilate a number of foreign short term lenders as part of its global growth.
To launch Wonga Spain, the lender purchased Spanish credit agency Credito Pocket in 2013, going on to purchase German “pay later” payment firm BillPay (with two million users to its name) and a stake in Indian firm Nahar Credits Private in October of the same year.
China tries to bring order to sprawling online finance sector (Asian Review), Rated: A
China’s 1.2 trillion yuan ($189 billion) internet finance industry has reached a turning point as regulators tighten regulations after one too many cases of bankruptcy and fraud.
RaboDirect to quit Irish market in May (The Irish Times), Rated: AAA
RaboDirect Ireland, an online savings bank owned by the Dutch lender Rabobank, will quit the Irish market in May. The bank has up to 90,000 Irish customer accounts with a total of €3 billion on deposit.
The bank says it has decided to withdraw from the Irish market after 13 years following “moves by our parent, the Rabobank Group, to simplify its business model across the world and reduce costs”.
Bizarre Buybacks and Expensive Takeovers (The Washington Post), Rated: AAA
In November, Swiss fintech company Temenos Group AG spent 150 million Swiss francs ($160 million) buying back its shares at an average price of 122 francs each. Weeks later, with the stock at 115 francs, it’s preparing to sell shares to fund a $1.9 billion takeover of British rival Fidessa Group Plc.
The return on invested capital looks set to be just over 6 percent in 2020, based on the stated cost synergies plus Fidessa’s forecast operating performance. That’s well below the target’s 9 percent cost of capital.
Anyfin raises €4.8 million to refinance loans with a statement selfie (Finextra), Rated: A
BNI Europa and Code for All partner to train new generation of IT developers (Finextra), Rated: A
BNI Europa, through Puzzle, its online credit brand, created a partnership with <Code for All_> to provide financial aid to anyone who wants to learn to become a IT developer.
This partnership provides an intensive code training program of 14 weeks supported by an online credit solution that offers special payment conditions to the program’s students.
What Is the Ripio Credit Network? (The Merkle), Rated: A
The Ripio Credit Network wants to offer a real global credit ecosystem which is more suitable than traditional solutions and even than similar peer-to-peer lending services. While that sounds like a tall order, the RCN protocol will connect lenders and borrowers all over the world via the native RCN token.
As is the case with any blockchain ecosystem, the Ripio Credit Network has its own native RCN token. It is the network’s payment channel first and foremost. Although credit transactions can be settled in any local currency, one does need RCN tokens to access the network and facilitate transactions.
Etherty launches blockchain-based, real estate trading platform (Construction Business News), Rated: A
A new investment portal, Etherty, has launched offering a real estate linked-crypto currency that enables investors to seize property investment opportunities all over the world, primarily in key markets such as Dubai, Mexico, and Australia.
500 Startups, Huobi Labs to Incubate Blockchain Projects (CoinDesk), Rated: B
500 Startups, the Silicon Valley startup accelerator, announced Tuesday it is partnering with cryptocurrency exchange Huobi’s incubator wing, Huobi Labs.
The two companies will support startups in various areas, including developing business plans, focusing on elements such as white papers, marketing strategies, community engagement and fundraising efforts, the accelerator said in a press release.
FMA opens applications for personalised digital advice (Scoop), Rated: AAA
The FMA is now open for applications from providers seeking to offer personalised financial advice to consumers through digital tools and platforms (so-called robo-advice).
P2P lending, payments platform JaldiCash to merge with parent firm Weizmann Forex (Financial Express), Rated: A
Weizmann Forex Limited (WFL), a foreign exchange and inward remittances platform, has approved the acquisition of its unit Weizmann Impex Enterprises Ltd (WISE). The proposed deal is supposed to take place on April 1st and will be done through a Scheme of Amalgamation, the company said in a press release. WISE is authorized by the Reserve bank of India to issue and operate semi-closed prepaid payment systems in India. The company owns ‘JaldiCash’, a payments platform that claims to have a network of more than 18,000 channel partners across 29 Indian states and more than 520 districts through their B2B model. JaldiCash works on a P2P model lending model, enabling loans for retailers, hotels and other services
Islamic banking assets is only 5.03 per cent of the total banking sector’s assets in the country, with a market share of IDR356.5 trillion (US$26.7 billion).
According to ALAMI CEO Bembi Juniar, this is due to the lack of infrastructure, support from key opinion leaders, and education on the benefits of sharia-based financial services.
So ALAMI offers a platform that serves as an aggregator for sharia-based financing for SMEs.
Wealthsimple raises $ 65 million in funding from Power Financial group of companies (Cision), Rated: AAA
Canada’s digital investor has raised a $65 million investment from the Power Financial group of companies, bringing their total investment in Wealthsimple to $165 million. Wealthsimple manages approximately $1.9 billion for over 65,000 clients in Canada, the United States, and the United Kingdom. More than 80 per cent of people who use digital investing in Canada use Wealthsimple.
News Comments Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade. Today’s main analysis: Review of OnDeck Q4 2017 earnings results. Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The […]
- Today’s main news: OnDeck becomes profitable. NepFin launches first online commercial lending platform for U.S. market. MoneyLion has 2 million customers. Sequoia China leads $40M DataVisor Series C. Moody’s reviews CommonBond for upgrade.
- Today’s main analysis: Review of OnDeck Q4 2017 earnings results.
- Today’s thought-provoking articles: The Future of Lending. Is investing RateSetter Isa worth it? Genie ICO: The decentralized business loan network on the blockchain. Private equity, venture capital opportunities in India.
- OnDeck swings to profit. AT: “A lot of people have been waiting for this moment.”
- Review of OnDeck’s Q4 2017 results. AT: “Very good breakdown. Excellent charts.”
- OnDeck flips to profitability. AT: “A few more details.”
- OnDeck’s share go up.
- NepFin launches first online commercial lending platform. AT: “This is a huge market with lots of room for growth.”
- LendingClub to sponsor Watermark Conference for Women.
- Top alternative lenders on Forbes’ Fintech 50. AT: “Some of these–Affirm and Kabbage, for instance–are no surprise, but there is at least one surprise on this list.”
- MoneyLion has 2 million customers. AT: “Congratulations.”
- CommonBond under review by Moody’s for rating upgrade. AT: “Congratulations. I think they’ll likely get the upgrade.”
- Dwolla gets $12M injection. AT: “Congrats.”
- Marcus has access to $17B in deposits. AT: “This has to position them well above almost every competing alternative lender, if not all of them.”
- BlockFi nabs $1.55M in funding for cryptoasset ecosystem.
- 5 credit unions sign with Shastic’s text messaging platform for lending operations.
- Data-sharing spec revised to encourage open banking.
- How Alexa makes finance conversational.
- TD Ameritrade intros Twitter trading bot.
- Coinmast offers app-based financial advice.
- Stash secures $37.5M in Series D round.
- My financial advisor is a robot.
- Webster Bank to use robo-advisor developed by LPL Financial, FutureAdvisor.
- Interest doesn’t necessarily lead to robo adoption.
- Cetera enhances advice-centric experience for financial advisors.
- How to find credit union student loans online.
- Is RateSetter’s new Isa worth investing in?
- TruFin raises 70M GBP.
- LendInvest unveils product transition process.
- Lendy returns 2.1M GBP loan repayment.
- Lendy appoints new head of finance.
- Barclays, Triodos, and Citizens Bank. AT: “A Financial Times podcast.”
- RentoMojo rolls out rent-to-own model.
- PE, VC opportunities in the 21st century.
- MoneyOnMobile raises $5M.
- United States
- OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA
- Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA
- OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A
- Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B
- NepFin Launches First Online Commercial Lending Platform for $1-Trillion U.S. Market (Digital Journal), Rated: AAA
- LendingClub at the Watermark Conference for Women (LendingClub), Rated: A
- Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA
- MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA
- Student lending platform on review for ratings boost (AltFi), Rated: AAA
- Dwolla Lands $ 12 Million (Finovate), Rated: A
- Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A
- Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A
- Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A
- Data-sharing spec revised to encourage open banking (American Banker), Rated: A
- What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A
- In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B
- Millennial entrepreneur strives to provide affordable financial advice to all (NewsOK), Rated: A
- Robo advice app Stash raises $37.5m Series D, releases investing for kids (AltFi), Rated: A
- My Financial Advisor is a Robot (Direct Industry), Rated: A
- LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A
- Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A
- Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B
- Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B
- United Kingdom
- New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA
- Fintech group TruFin raises £70m (Finextra), Rated: A
- LendInvest unveils product transition process (BestAdvice), Rated: A
- Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A
- Lendy appoints new head of finance (Bridging&Commercial), Rated: B
- Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA
- European Union
- Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA
- Banco BNI Europa to invest with CrossLend (Finextra), Rated: A
- Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A
- DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA
- Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA
- PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA
- MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A
- Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA
OnDeck swings to profit, eyes second bank partnership (American Banker), Rated: AAA
The New York-based small-business lender recorded net income of $5.1 million in the quarter that ended Dec. 31, which compared with a $35.9 million loss in the fourth quarter of 2016.
OnDeck, which has recorded $94.5 million losses over the last two years, is cutting costs in an effort to achieve profitability.
Review of OnDeck Q4 2017 Earnings Results (Lend Academy), Rated: AAA
In the fourth quarter they generated $5 million of GAAP profit. To put this in perspective, this is $41 million better than the prior year period. This puts them on solid footing as they look towards priorities for 2018. Originations for the quarter were $546 million, up 3% from the prior quarter.
Gross revenue came in at $87.7 million, up 7% year over year. Gain on sale revenue or revenue from loans sold on OnDeck’s marketplace to investors totaled $0.6 million. Other income totaled $3.5 million, up slightly from $3.4 million in the previous quarter.
Full Year 2018
- Gross revenue between $370 million and $382 million.
- GAAP Net income (loss) attributable to OnDeck between $(2) million and $10 million.
- Adjusted Net income between $16 million and $28 million.
First Quarter 2018
- Gross revenue between $86 million and $90 million.
- GAAP Net income (loss) attributable to OnDeck between $(5.5) million and $(1.5) million.
- Adjusted Net income between $1 million and $5 million.
OnDeck Flips To Profitability Much To The Market’s Delight (PYMNTS), Rated: A
Originations were up 3 percent over the previous quarter to $546 million.
Loans sold or designated as held for sale through OnDeck Marketplace represented 3.9 percent of term loan originations. Provision for loan losses was $34.4 million and the Provision Rate was 6.4 percent, down from Q3’s 7.5 percent.
Gross revenue increased to $87.7 million, up 7 percent year-over-year, while net revenue was $42.1 million, up 159 percent year-on-year.
The cost of funds rate was 6.5 percent, which was a slight increase over Q3. OnDeck noted that figure will likely continue to tick up during 2018, as the Fed is forecast to keep raising short-term interest rates.
Online lender OnDeck’s profit beats on lower costs, shares soar (Reuters), Rated: B
Shares of OnDeck Capital Inc (ONDK.N) soared on Tuesday after the online lender reported better-than-expected quarterly profit as it set aside less money for bad loans, and managed to keep costs lower.
NepFin Launches First Online Commercial Lending Platform for -Trillion U.S. Market (Digital Journal), Rated: AAA
Neptune Financial Inc., or NepFin, a financial services firm, announced today that it has launched the first online commercial lending platform for mid-sized U.S. businesses, creating a new source of credit as well as business software solutions for a large, thriving sector of the economy whose borrowing options are limited.
NepFin also announced that it has raised a $10-million Series A round led by Sands Capital Ventures with participation from its existing investors. Michael Raab, Partner at Sands Capital, will join NepFin’s board, which already includes Third Point’s David Bonanno, currently a board member of SoFi, as well as Robert Schwartz, Managing Partner at Third Point Ventures. This round brings NepFin’s total capital raised to $13 million.
NepFin, whose platform has digital solutions built from the team’s years of experience in online lending and traditional finance, says that its focus is on one of the most underserved sectors of the broader U.S. economy – businesses with between $10 million and $100 million in revenue. NepFin provides loans of up to $60 million.
LendingClub at the Watermark Conference for Women (LendingClub), Rated: A
LendingClub is excited and proud to be a sponsor of the Watermark Conference for Women being held on February 23rd in San Jose, California. As part of the agenda, two of our Client Advisors from the Business Loans team, Mana and Somie, will be leading roundtable discussions with women entrepreneurs on the core elements to consider when exploring small business financing options.
Forbes Fintech 50 2018: The Future Of Lending (Forbes), Rated: AAA
Affirm, San Francisco
Makes instant three, six and 12 month loans for purchases from 1,500 online merchants. A handful of sellers subsidize 0% rates, but most loans carry annual interest rates of 10% to 30%.
Bona fides: More than 1 million loans issued. Partners include Wayfair and Expedia.
Digital-only mortgage originator estimates the loan an applicant qualifies for within three minutes using stated income and a credit score check.
Bona fides: Fannie Mae and five of nation’s six largest banks buy its loans.
Speeds up the mortgage approval process at the nation’s largest lenders with its cloud based white label software.
Bona fides: Wells Fargo and U.S. Bancorp are already onboard
Online lender refinances and finances undergraduate and graduate student loans.
Bona fides: CommonBond has made $1.5 billion in loans, but says just two have gone into default.
Provides on-the-spot financing for home improvement projects (with loans up to $65,000) via a network of contractors and bank partners — without itself taking on the risk of defaults. Most borrowers don’t pay a dime in interest thanks to zero-interest promotional periods that last from 6 to 60 months. Recently began offering financing at doctor, dentist and veterinary offices.
Bona fides: Has facilitated over $10 billion in loans
Lending platform offers nearly instantaneous small business loans. Uses creative alternative data to underwrite loans–such as the number of UPS packages a business sends and receives over time.
Bona fides: Over $4 billion in originations to 130,000 small businesses
Four year-old online lender started out providing bridge loans to fix and flip housing investors, a historically underserved segment. With original product now available in 25 states, LendingHome has expanded into personal mortgages in 14.
Bona fides: $2 billion in loans made; 10,000 homes financed
Approves developing-world borrowers who lack a credit history for micro-loans of between $10 and $500 by crunching 10,000 data points—from financial transactions to mobile games played—from an applicant’s smartphone.
Bona fides: Has made more than 4.5 million loans, with a repayment rate above 90%.
Upstart, San Carlos, CA
Uses alternative data such as education, employment history and whether applicants know their own credit score to underwrite and price loans. After five years of training its algorithms, it now approves 47% of loans without human intervention and with some of the lowest default rates in the industry.
Bona fides: $1.5 billion in loans originated to 120,000 borrowers
MoneyLion Reaches 2 Million Customer Milestone As Growth Accelerates (BusinessWire), Rated: AAA
MoneyLion, the digital personal finance platform for the financial middle class, today announced that it now empowers over 2 million customers to better their borrowing, saving and investing through personalized, AI-driven solutions. The growth of MoneyLion’s community is a reflection of the positive financial outcomes its customers have achieved and the platform’s unique approach to money management for everyday Americans.
The momentum behind MoneyLion’s customer growth follows a number of recent milestones for the company, including:
- The December launch of MoneyLion Plus, a first-of-its-kind membership that combines guided savings, simple investing, access to low-cost loans, and personalized daily financial tips to help consumers build their credit, financial resilience, and first $2,000 in savings. MoneyLion Plus has democratized access to private banking-like services typically reserved for high net worth consumers, providing an opportunity for first-time investors to begin building wealth.
- Completion of a successful $42 million Series B equity round in January, bringing MoneyLion’s total funds raised to $67 million. This financing accelerates MoneyLion’s continued development of innovative, inclusive financial products and services for America’s financial middle class.
Student lending platform on review for ratings boost (AltFi), Rated: AAA
Moody’s puts six tranches issued by CommonBond on review for upgrade.
Moody’s Investor Services has placed six tranches issued by CommonBond Student Loan Trust 2016-B, 2017-A-GS and 2017-B-GS on review for upgrade. The tranches are comprised of loans to students, and $488m of asset backed securities are affected by the review.
Dwolla Lands $ 12 Million (Finovate), Rated: A
In a short, three-sentence blog post, Dwolla CEO Ben Milne announced that the company closed a $12 million round of funding. The investment, which brings the Iowa-based company’s total to $51.4 million, was led by Foundry Group with participation from Union Square Ventures, Next Level Ventures, Ludlow Ventures, High Alpha, and Firebrand– all existing investors.
Fortress Balance Sheet: Goldman Sachs’ Online Lender Marcus Has Access to $ 17 Billion in Deposits (Crowdfund Insider), Rated: A
But today, Blankfein shared that Marcus now has access to over $17 billion in deposits representing a huge amount of credit firepower at an unbeatable cost to lend.
In a savvy move, Goldman acquired GE Capital’s retail deposits prior to launching Marcus. Since the acquisition, these deposits have grown an impressive 90%.
Secured Lender BlockFi Secures $ 1.55M Funding to Build Cryptoasset Ecosystem (Crowdfund Insider), Rated: A
BlockFi, a New York-based non-bank lender that offers USD loans to cryptoasset owners, announced a $1.55 million raise from ConsenSys Ventures, Kenetic Capital, PJC, SoFi, Purple Arch Ventures and Lumenary. The new capital injection will be used to bridge the gap between traditional debt capital markets and the cryptoasset ecosystem.
Five credit unions sign with new text messaging platform in January to enhance lending and operations (CUInsights), Rated: A
Shastic, a SaaS company specializing in banking-specific technology services, has signed on five new customers in the first month of 2018. The recent growth follows the fintech company’s early launch of Elle, the conversational text messaging platform built for credit unions. Elle is an expansion of their automation services to deliver efficient, real-time message communication between a credit unions and their members.
What We Talk About When We Talk About Finances (With Alexa) (PYMNTS), Rated: A
As anyone who has used an Alexa skill might know, the movement toward conversational finance, or financial conversations, is a tricky one, as specific instructions or questions (okay, they are commands, really) have traditionally been needed to spur the assistant to retrieve information.
In play for customer data, TD Ameritrade rolls out Twitter trading bot (Tearsheet), Rated: B
The brokerage firm released a Twitter bot Thursday, allowing stock investors to execute trades, get market updates and browse educational content through direct messages. For the brokerage, encouraging traders who use Twitter to transact will give it, the hope is, a rich source of user data to offer personalized customer experiences and product recommendations.
How to go about repairing your credit, reducing your student loan debt or obtaining the best mortgage loan now is available to you through a locally produced app.
The answers are among the widespread financial advice available to consumers nationwide through a new app called Coinmast launched by an Oklahoma City-based millennial entrepreneur.
At $11 a call, the tech startup offers such help from certified financial counselors, certified financial planners and certified public accountants whom Haller contracts nationwide. Experts, he said, offer advice on almost anything, excluding on individual securities, insurance and taxes.
Robo advice app Stash raises .5m Series D, releases investing for kids (AltFi), Rated: A
US-based micro investments app Stash has announced a $37.5m raise in Series D funding, led by Union Square Ventures. Existing investors Breyer Capital, Coatue Management, Entree Capital, as well as fintech familiars Goodwater Capital and Valar Ventures, also joined in on the round.
My Financial Advisor is a Robot (Direct Industry), Rated: A
Fintech company Moneyfarm uses cutting-edge technology as well as human financial expertise to help make investing simple, easy and cost-effective. The company also invests in artificial intelligence and machine learning and recently bought AI-driven chatbot Ernest.
DirectIndustry e-magazine: What is the technology behind it?
Paolo Galvani: We use technology to match investors with investment portfolios that are specifically built for their investor profiles. Each new customer completes a survey during the sign-up process. The algorithms we have developed in-house match each investor to an investor profile that reflects their tolerance for risk. Investors are then paired with a portfoliothat is specifically built and managed by our team of investment experts to reflect the customer’s investor profile.
LPL rolls out robo-adviser to regional bank (InvesmentNews), Rated: A
Webster Bank, a $26.4 billion financial institution with branches in Connecticut, Rhode Island, Massachusetts and New York, announced that it would start offering access to Guided Wealth Portfolios, a digital advice platform developed by LPL Financial and BlackRock Inc.‘s FutureAdvisor.
Interest Doesn’t Always Bring Adoption of Robo-Adviser Tech (PlanAdviser), Rated: A
A new report published by Cerulli Associates examines the growth trajectory of the digital financial advice market that has occurred since 2015, finding there remains a clear inverse relationship between an investor’s age and their willingness to engage with purely digital financial advice platforms.
Scott Smith, director at Cerulli, notes that as of the third quarter of 2017, there is “greater openness to digital advice relationships, but a strongly negative correlation between age and interest remains.”
Cetera Financial Group Enhance Delivery of Advice-Centric Experience for Financial Advisors, Clients (PR Newswire), Rated: B
Cetera Financial Group (“Cetera”)*, a network of independent firms supporting the delivery of professional financial advice, today announced that the six firms comprising its network will be organized under its newly-created Traditional and Specialty Channels. The formation of these two channels is expected to accelerate the ability of each network firm to support Cetera’s Advice-Centric Experience for advisors and clients, which envisions a financial advice profession driven by goals-based planning and solutions that help clients achieve more predictable outcomes on their journey to financial well-being.
Looking for Credit Union Student Loans? Here’s How to Find and Apply for Them (Student Loan Hero), Rated: B
MyCreditUnion.gov provides a map that makes it easy to locate credit unions in your area. Input your address to find a list of credit unions, directions to each location, and available member services. You can then contact local credit unions to find out about membership requirements and student loan options.
One of the best ways to research your options is to use LendKey. LendKey offers easy access to hundreds of different credit unions and community banks that provide private student loans.
You have the option of applying directly through a credit union that allows people to join from anywhere in the United States. Some examples of credit unions open to individuals nationwide include Alliant Credit Union, Digital Federal Credit Union, and First Tech Federal Credit Union.
New Isa from RateSetter offers 6% return: is it worth investing? (Which?), Rated: AAA
With the new product form RateSetter, you could earn 3-6% interest on your investment, depending on how long you lock your money away.
RateSetter’s Innovative finance Isa allows you to invest up to £20,000 in a tax year.
It is a flexible Isa product, meaning you can withdraw money and replace it without using up your £20,000 tax-free savings allowance.
Say, for example, you put £10,000 into your innovative finance Isa and then withdrew £5,000. Under the rules, you could still deposit £15,000 without incurring tax.
The shortest duration investment rolls over monthly with an interest rate of 3.1%. The longest is a five-year investment, which currently has an interest rate of 5.8%.
|Money goes to…||Minimum investment||Projected rate|
|Abundance||Green energy projects||£5||6-9% over lifetime of investment (3-5 years)|
|Advancr||Public and private businesses||£1,000||5-6% depending on length of bond|
|Basset & Gold||Fixed income bonds||£1,000||3-7% depending on product|
|CapitalRise||Property development projects||£1,000||10% or more depending on the project|
|Crowd for Angels||Crowd bonds funding small businesses||£25, but companies can increase that||12%|
|Crowdstacker||Businesses||£500, but set by borrowers||5-7%|
|Downing Crowd||Fixed-term bonds for small businesses||£100||4-7%|
|Folk2Folk||Asset-backed loans to small, mostly rural businesses||£20,000||5.5-6.5% depending on product|
|Funding Circle*||Businesses||£1,000||4.8-7.5% depending on selected risk level|
|FundingSecure||Asset-backed sub-prime loans to individuals||£25||Up to 16%|
|Goji P2P||Consumer, business and property loans||£5,000||5%|
|HNW Lending||Asset-backed loans to individuals and businesses||£10,000||6-15% depending on term and risk|
|LandlordInvest||Asset-backed loans to landlords||£100||5-12%|
|Lending Works||Individuals||£10||3-5% depending on term|
|Mongoose Crowd||Community energy projects||£100-200, but can vary by project||4-7%|
|Property Crowd||Commercial and residential developments||£5,000||10%|
|Proplend||Property of varying types||£1,000||5-12%|
|Ratesetter||Businesses, individuals and property developers||£10||3-6% depending on product|
|Rebuildingsociety||Small and medium-sized businesses||£10||9.7%|
|Relendex||Commercial and residential property loans||£500||10%|
|UK Bond Network||Businesses||£5,000||11%|
Fintech group TruFin raises £70m (Finextra), Rated: A
TruFin, a British fintech and banking business with fingers in various niche lending pies, has raised £70 million through a listing on the LSE’s AIM market.
LendInvest unveils product transition process (BestAdvice), Rated: A
The Product Transition process allows existing borrowers to transfer between specialised loans that are tailored to support them at each stage in their development project.
Lendy returns £2.1m loan repayment from luxury property in Chelsea (Mortgage Introducer), Rated: A
Peer-to-peer lending platform Lendy returned a £2.1m loan repayment to P2P investors from a luxury apartment in Chelsea, on an investment made through Lendy.
Lendy appoints new head of finance (Bridging&Commercial), Rated: B
Andrew Wawrzyniak has joined the peer-to-peer lending platform from Fund Partners, a fund manager whose clients include Octopus Investments, Pictet Asset Management and Russell Investments.
Sequoia China leads $ 40M DataVisor Series C (Bankless Times), Rated: AAA
DataVisor, a provider of fraud detection solutions using unsupervised machine learning, today announced a $40 million Series C round of financing led by Sequoia China, with participation from existing investors New Enterprise Associates and GSR Ventures.
Rock Wang, managing director at Sequoia China, will join DataVisor’s board of directors. With this new round of financing, DataVisor will expand its global footprint in the fraud detection and prevention market, which is estimated to reach $41.6 billion by year 2022 according to research firm MarketsandMarkets.
Swedish Online Payments Company Klarna Shuts Down Tel Aviv Development Center (CTech), Rated: AAA
Swedish online payments company Klarna Bank AB (publ) will be shutting down its Tel Aviv development center during the next few months, the company announced Tuesday. All 31 of its employees in Tel Aviv were offered the opportunity to remain with the company and relocate to one of its Swedish or German offices.
Banco BNI Europa to invest with CrossLend (Finextra), Rated: A
Banco BNI Europa and CrossLend have launched a cooperation whereby Banco BNI Europa invests into notes issued by CrossLend Securities SA.
Barclays faces new charge, Triodos innovates and outlook for Citizens Bank in the US (Financial Times), Rated: A
Martin Arnold and guests discuss the latest charges against Barclays, Bevis Watts of the ethically-focused bank Triodos talks about his new UK peer-to-peer lending model and Bruce van Saun explains what US rate rises will mean for Citizens Bank.
DirectMoney Secures New Strategic Investment From Alceon For Growth & Innovation Initiatives (Crowdfund Insider), Rated: AAA
Australian marketplace lending platform DirectMoney announced on Tuesday it secured a strategic investment from alternative investment manager Alceon to fund growth and innovation initiatives.
According to DirectMoney, the investment will be structured through an initial placement of $600,000 at $0.042 per share (being 14,285,715 new shares), a 56% premium to the price at close of trading on February 9th and equivalent to a 3.1% shareholding.
Why just rent when RentoMojo also gives you the option of renting and owning (YourStory), Rated: AAA
Online rental and financing marketplace RentoMojo, which lets consumers in eight cities lease furniture, two-wheelers and home appliances, has launched an additional rent-to-own model.
PE AND VC OPPORTUNITIES IN 21ST CENTURY INDIA (AllAboutAlpha), Rated: AAA
ARA Law, a firm based in Mumbai and Bangalore, India, has issued a paper on private equity and venture capital in that country.
The main text of the paper begins with sectoral analysis and market behavior. PE and VC investments in India declined in the early months of 2017, but they had started to pick up already before the end of the first quarter and in the third quarter investments by such vehicles “surprised the market with a tremendous jump in deal volume as well as value.”
In August of that year the deal value reached US$5 billion. The third quarter as a whole saw 129 deals of value greater than US$100 million, aggregating to about US$7 billion.
The most lucrative sector last year was e-Commerce, “in spite of the sharp fall in investments by the end of AY 2016,” followed by real estate. In the 3d quarter, e-Commerce recorded roughly US$2.6 billion in deals across 18 deals. Real estate? US$2.3 billion across 13 deals. Banking and Financial Services? Third place in the league table with US $1.4 billion across 25 deals.
MoneyOnMobile Raises $ 5 Mn Funding From S7 Group (Inc42), Rated: A
Mumbai-based fintech startup MoneyOnMobile has raised $5 Mn in Series H funding from Russia-based private aviation and aerospace holding company S7 Group. The development comes just two weeks after the startup secured $7.6 Mn Series F funding from undisclosed investors.
Genie ICO: A Blockchain Network For Decentralized Business Loans (Global Coin Report), Rated: AAA
Genie was created to provide individuals based in Asia with a unique way to borrow and lend money for their business using a peer-to-peer system that is based on a blockchain network. The Genie ICO has been created by an experienced team after observing the rapidly changing Asian financial landscape ever since cryptocurrencies, ICOs, and blockchain technology grew to prominence in 2017.
The platform will also have its very own token Crowd Genie Coin (CGC) which will be generated via an ICO. There will be a limited supply of 120,000,000 tokens available. Of this amount, only 50 million will be available for purchase during the token sale. The rest of the tokens will be used for facilitating transactions on the platform, will be given to the founders, used for distribution, etc. All tokens that are not bought during the token sale, however, will be destroyed to increase the value of a single CGC.
The Genie team hopes to raise a total of $35,000,000 throughout the ICO and the value of 400 CGC tokens has been estimated to be of equal value of 1 ether, which at the time of writing equates to $858. This means that a single CGC is worth $2.15. However, the interested investor can invest a minimum of 0.1, which will attract a wide variety of investors.
News Comments Today’s main news: Credible raises $50M in Australian IPO. Kabbage considers IPO. Blockchain project gives New York homeless a digital identity. Funding Circle surpasses $5B global lending, $1B to U.S. businesses. RateSetter publishes 2016-17 accounts. Starling Bank gets full FCA, PRA approval. N26 launches premium debit card, partners with WeWork. Revolut rolls out bitcoin services. Vietnam gets first P2P lending platform. IOU […]
- Today’s main news: Credible raises $50M in Australian IPO. Kabbage considers IPO. Blockchain project gives New York homeless a digital identity. Funding Circle surpasses $5B global lending, $1B to U.S. businesses. RateSetter publishes 2016-17 accounts. Starling Bank gets full FCA, PRA approval. N26 launches premium debit card, partners with WeWork. Revolut rolls out bitcoin services. Vietnam gets first P2P lending platform. IOU Financial originates $500M in loans.
- Today’s main analysis: The 7 fastest-growing personal finance apps (a must-read).
- Today’s thought-provoking articles: Securitizations secure the future. Consumers are hounded for debts they don’t owe. Blockchain project gives New York homeless a digital identity. Funding Circle’s December review. China targets booming online lending. The growth of Indian alt lending.
- Kabbage considers IPO. AT: “The company wants to expand into Asia, which would be a good move indeed.”
- How securitizations secure Lending Club’s future. AT: “A Lending Club blog post.”
- 7 fastest-growing personal finance apps of all time. AT: “If you read just one article today, this should be it. CB Insights delves into the fastest-growing personal finance apps including Robinhood, Mint, Check, Level Money, and others and illustrates–better than any case study ever can–how you can grow your own alt lending company. Learn what to do before, during, and after launch by studying these companies.”
- Millions of consumers hounded for debt they don’t owe. AT: “An interesting look into phantom debt.”
- Fummi uses the blockchain to give homeless a digital identity. AT: “This is interesting, but I wonder what the rationale is for charging users $3 per month, and will they collect it?”
- Amazon is now the most-talked-about tech company on earnings calls. AT: “I’m not surprised. Are you?”
- Global Debt Registry joins Wall Street Blockchain Alliance.
- Discover enables Apple Pay Cash.
- Curo Group goes public at $620M valuation.
- Online lender convicted of $220M fraud.
- Instamotor customers can apply for financing.
- Lendio opens franchise office in Nashville.
- Progressive Leasing, Marqeta partner on lease-to-own financing.
- Real estate crowdfunding expands into more niche markets.
- Will the SEC crack down on ICOs?
- Spat over FICO ensues.
- Tips to reduce college costs. AT: “Infographic from Earnest.”
- Roostify to integrate with Black Knight’s LoanSphere.
- Envestnet/Yodlee announce new cohort for incubator.
- AutoGravity appoints new CTO.
- QCash wins Financial Times Future of Fintech award.
- Funding Circle is the first company to lend $1B across two markets. AT: “Congratulations. A huge milestone for the industry.”
- Funding Circle’s December review.
- RateSetter publishes 2016-17 accounts. AT: “I’d like to know more about why they didn’t use their provisional fund.”
- RateSetter losses jump.
- RateSetter’s goodwill pushes it deeper into the red.
- Starling Bank gets full FCA, PRA approval. AT: “Huge news. Congratulations. This could be the first step to making digital-only banks legitimate in the UK, and it could be the first step to helping them gain real traction elsewhere in the world–first in Europe, then Asia, and the U.S.”
- Barnett backs P2P Global Investments.
- The future of financial advice is ‘Fintegration’.
- Revolut begins bitcoin services.
- BFS Capital extends $1.7B to businesses in U.S., UK, and Canada.
- Recent online lending origination milestones.
- Emerging markets under pressure.
- Viola FinTech is the new Israeli-based VC for fintech startups.
- Credible launches IPO and raises $50M. AT: “This is a huge move, but I wonder why they chose Australia as opposed to the U.S. Ron Suber’s comments provide a clue.”
- Prospa added to Yellow Brick Road.
- Marketplace lenders need to educate SMSFs.
- Nga Tangata breaking hold of predatory lenders.
- Vay Muon becomes first Vietnam P2P lender.
- Korean startups should do what they’re good at.
- Introducing Datarius Cryptobank.
- IOU Financial surpasses U.S. $500M in loan originations. AT: “Congratulations.”
- United States
- Kabbage Mulling An IPO (Seeking Alpha), Rated: AAA
- Securitizations Securing the Future (Lending Club), Rated: AAA
- We Analyzed 7 Of The Fastest-Growing Personal Finance Apps Of All Time To Figure Out The Secrets To Their Success (CB Insights), Rated: AAA
- Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance (Bloomberg), Rated: AAA
- This New Blockchain Project Gives Homeless New Yorkers A Digital Identity (Fast Company), Rated: AAA
- On Earnings Calls, Which Tech Company Are Senior Execs Most Obsessed With? (CB Insights), Rated: A
- Global Debt Registry joins Wall Street Blockchain Alliance (Finextra), Rated: A
- Discover Enables Apple Pay Cash (PYMNTS), Rated: A
- Payday lender Curo to launch in New York with $ 620m valuation (Financial Times), Rated: A
- Jury Convicts Online Lender Of $ 220M (Mondaq), Rated: A
- Instamotor Customers Can Now Apply for Financing While Shopping For A Used Car (BusinessWire), Rated: A
- Lendio Opens New Franchise in Nashville (Crowdfund Insider), Rated: A
- Progressive Leasing and Marqeta Partner to Power New Lease-to-Own Financing Experience (BusinessWire), Rated: A
- Real estate crowdfunding expands into more niche markets (Curbed), Rated: A
- Hope grows that a larger SEC crackdown on ICOs is coming — and soon (TechCrunch), Rated: A
- Credit score row as FICO chief hits out at banks over ‘Fako’ rivals (Financial Times), Rated: A
- Tips for Reducing College Costs (Earnest Email), Rated: B
- Roostify to Integrate With Black Knight’s LoanSphere Empower Loan Origination System (BusinessWire), Rated: B
- Envestnet | Yodlee Incubator Unveils New Class of Fintech Disruptors (Business Insider), Rated: B
- AutoGravity Names Sheng Wang As Chief Technology Officer (PR Newswire), Rated: B
- QCash Financial Wins Financial Times Future of Fintech Awards for the Innovation Category (BusinessWire), Rated: B
- United Kingdom
- Funding Circle passes $ 5 billion lent globally, including $ 1 billion lent to US businesses (PR Newswire), Rated: AAA
- Your December Review – Insight and Analysis (Funding Circle), Rated: AAA
- RateSetter Publishes 2016-2017 Accounts (Crowdfund Insider), Rated: AAA
- Peer-to-peer lender RateSetter’s losses jump as it takes a hit from bad loan to ad company (Business Insider), Rated: A
- Goodwill impairment helps push Ratesetter further into to the red (Verdict), Rated: A
- Starling Bank Receives Full Regulatory Approval from FCA & PRA to Offer Broad Portfolio of Financial Products (Crowdfund Insider), Rated: AAA
- Barnett backs P2P Global Investments for recovery (Citywire), Rated: A
- The future of advice is ‘Fintegration’ (Professional Adviser), Rated: A
- China targets booming online lending as crisis fears build (Hong Kong FP), Rated: AAA
- European Union
- N26 launches a premium debit card for ‘the digital customer,’ partners with WeWork (TechCrunch), Rated: AAA
- Currency trader Revolut’s offer to those champing at the bitcoin (The Times), Rated: AAA
- BFS Capital has Extended Over $ 1.7 Billion in Financing to Businesses across the US, UK and Canada (BusinessWire), Rated: A
- Recent Origination Milestones in Online Lending (Lend Academy), Rated: A
- Emerging markets are under pressure, but I’m buying the dip (CNBC), Rated: A
- Viola FinTech is a new $ 100M Israel-based VC fund targeting fintech startups around the world (TechCrunch), Rated: B
- Australia/New Zealand
- San Francisco’s Credible Raises $ 50 Million in Australian IPO (Bloomberg), Rated: AAA
- Yellow Brick Road Adds Prospa to Lending Panel in Boost to Aussie Small Business (Crowdfund Insider), Rated: A
- Marketplace lenders must ‘start educating’ SMSFs on opportunities, discipline (Nestegg), Rated: A
- Ngā Tangata Microfinance breaking hold of predatory lenders (Scoop), Rated: A
- Loans are easy to get, but are they for you? (livemint), Rated: AAA
- Vietnam launches first peer-to-peer lending platform (XinhuaNet), Rated: AAA
- ‘Korean startups should do what they are good at to get funding’ (The Investor), Rated: A
- Datarius Cryptobank Participates at BlockShow Asia 2017 (Digital Journal), Rated: B
- IOU Financial Surpasses US$ 500 Million in Loans Originated (Cision), Rated: AAA
Kabbage Mulling An IPO (Seeking Alpha), Rated: AAA
According to FT Partners, the FinTech market saw a record 412 financial deals during the third quarter of 2017. One of the largest deals in the quarter involved a $250 million investment by Softbank (OTCPK:SFTBY) in billion-dollar unicorn Kabbage (Private:KBGE).
Kabbage generates revenue from the fees on the loans. It expects revenue of over $200 million in 2017, roughly double the revenue in 2015. The company claims to have a loss rate lower than the rest of the industry, and that its direct lending business had turned profitable in the fourth quarter of 2016. It expected the whole business to be profitable in the second half of this year.
Kabbage plans to use the funds for expansion into Asia and build new products like insurance and payroll services. It will also be positioning the company for a possible IPO.
Securitizations Securing the Future (Lending Club), Rated: AAA
As we near year’s end, we’re excited to announce that LendingClub has closed its third self-sponsored securitization. The $330 million transaction saw immediate traction and has further increased access to consumer credit for the stable and scalable pool of investor capital in the liquid Asset-Backed Securities (ABS) investor market.
Of note, with 48 total securitization investors this year, over two-thirds 34 are new to LendingClub, including insurance companies, hedge funds, a bank and a pension fund.
We Analyzed 7 Of The Fastest-Growing Personal Finance Apps Of All Time To Figure Out The Secrets To Their Success (CB Insights), Rated: AAA
Ninety-two million millennials will soon be in what Goldman Sachs calls their “prime spending years.” In aggregate, they command $1.3 trillion in annual spending.
(Bankrate found 83% of millennials don’t think they’ll ever retire: they simply “don’t think they’ll have the money” to do so.)
For three of the tools we looked at — Mint, Level Money, and Check — we studied how their product evolved all the way up to their acquisition (by Intuit, Capital One, and Intuit, respectively).
What follows are the results of our analysis — six secrets to success in the world of personal finance management.
1. Use pre-launch marketing to build both trust and hype
Mint had by far the most significant growth in its valuation — from $0 to $170M in just two years.
2. Making the first experience valuable
Keeping users around is hard: according to Localytics, the average mobile app loses 80% of its users within just three days of download.
The best apps retain about 70% of users after three days. The next-best retain about 60%.
3. Design for The Specific User You Want
Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance (Bloomberg), Rated: AAA
A few minutes later, Therrien’s phone buzzed. It was the same guy. He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn’t owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.
Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don’t owe. The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.
The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams.
This New Blockchain Project Gives Homeless New Yorkers A Digital Identity (Fast Company), Rated: AAA
Three thousand homeless people in New York are about to receive a special holiday gift: a free smartphone that allows them to manage their digital identity, access shelters and food pantries, and make use of financial services.
The project comes from Blockchain for Change, a New York City startup that has developed a mobile app called Fummi that’s preloaded on the phone. It has teamed up with Life Wireless, which provides phones to low-income groups using federal subsidies. Also involved are NYC service providers like Urban Pathways, Part of the Solution (POTS), Hakook, and the Robin Hood Foundation.
Life Wireless is distributing the phones, starting in the Bronx. The service groups create the blockchain identities for individuals. Once on the system, they can then open an account, receive money, and track their activity.
Blockchain for Change has raised more than $500,000 in a seed round, but it’s also planning a public initial coin offering where it hopes to raise up to $50 million. It generates revenue by charging fees to users at a rate of $3 per month.
On Earnings Calls, Which Tech Company Are Senior Execs Most Obsessed With? (CB Insights), Rated: A
More than Google, Apple, or Facebook, there’s one company that CEOs and public company execs are talking about the most. We analyzed earnings call transcripts to identify the new king of technology.
Amazon has been mentioned nearly 3000 times in the last year. That’s more than Facebook, Apple, and Microsoft combined.
Global Debt Registry joins Wall Street Blockchain Alliance (Finextra), Rated: A
Global Debt Registry (GDR), the asset certainty company, today announced its membership to The Wall Street Blockchain Alliance (WSBA).
WSBA is an industry non-profit trade association created for financial market professionals, by financial market professionals. The alliance engages market participants, regulators, policymakers and technology innovators to advocate the adoption of blockchain’s distributed ledger technology.
Discover Enables Apple Pay Cash (PYMNTS), Rated: A
The card is part of the new Apple Pay functionality, which allows U.S. customers to quickly, easily and securely send and receive money among friends and family. When Apple customers receive money on a supported device, the money is added to their new Apple Pay Cash card. They can use the money instantly to pay someone or to make purchases using Apple Pay in stores, apps and on the web.
Payday lender Curo to launch in New York with $ 620m valuation (Financial Times), Rated: A
One of America’s biggest payday lenders is launching on the stock market with a $620m valuation, cashing in on mounting hopes that the Trump administration and Republicans in Congress will ease regulatory restrictions on the sector.
Curo Group, which targets “underbanked” consumers and is behind WageDayAdvance in the UK as well as Speedy Cash in the US, begins trading on the New York Stock Exchange on Thursday.
Shares in the private equity-backed company were priced on Wednesday evening at $14 per share, according to Bloomberg data.
Jury Convicts Online Lender Of $ 220M (Mondaq), Rated: A
Recently, a Manhattan federal jury convicted Richard Moseley Sr., the head of an online network of payday lenders and loan servicers, on charges of wire fraud, aggravated identity theft, and violating the Racketeer Influenced and Corrupt Organizations Act and Truth in Lending Act, among other counts.
Moseley was convicted due to his leadership role over a vast and complicated system of interrelated companies that collected over $220 million from more than 600,000 borrowers and deceived regulators in the process. Convincing state and federal regulators and even his own lawyers that his companies were based offshore and not bound by U.S. law, Moseley coordinated a network of lenders and loan servicers that routinely misled both consumers and regulators.
Instamotor Customers Can Now Apply for Financing While Shopping For A Used Car (BusinessWire), Rated: A
Instamotor, the free online used car marketplace, announced today that its customers can now apply for and receive financing for vehicles on its platform.
An estimated 54% of used car buyers need financing according to Experian. By working with leading direct-to-consumer automotive lenders, Instamotor will become one of the few true automotive marketplaces to enable its users to shop for a used car and secure the financing more than half of them will need, all conveniently integrated in one place.
Loans enabled through Instamotor will be available to consumers with FICO scores as low as 500, which are people who commonly have trouble receiving optimal loan terms through traditional financing methods. Also, the application is optimized to be completed entirely in the comfort of one’s home rather than in a dealership office or credit union.
Lendio Opens New Franchise in Nashville (Crowdfund Insider), Rated: A
Marketplace lending platform Lendio, recently announced its has opened its new franchise located in Nashville, Tennessee. Lendio revealed that its franchise program makes accessing business loans easy by helping small business owners skip the legwork of looking for a small business loan.
Progressive Leasing and Marqeta Partner to Power New Lease-to-Own Financing Experience (BusinessWire), Rated: A
Marqeta, the open API payment card issuing platform, and Progressive Leasing, a virtual lease-to-own company and a division of Aaron’s, Inc., today announced a technology partnership that will enhance the checkout process for Progressive Leasing customers.
As one of the largest players in the lease-to-own industry, Progressive Leasing sought a partner who could support their needs today and provide innovative solutions to help build their future payment checkout roadmap. Through the partnership, Marqeta will enable Progressive Leasing to issue virtual cards at the point of sale and work with them to create additional innovative payment offerings.
With the partnership, Marqeta will enable Progressive Leasing to take advantage of a wide range of modern features, including virtual card issuance, tokenization, and its patent-pending Just-in-Time (JIT) Funding, allowing Progressive Leasing to authorize and reconcile transactions in real time.
Real estate crowdfunding expands into more niche markets (Curbed), Rated: A
To those unfamiliar with real estate crowdfunding, the Fair-Haired Dumbbell development in Portland may be just the kind of wacky, esoteric project one envisions when imagining what happens when strangers pool funds online, crossing Kickstarter with construction. A pair of six-story towers connected by a skybridge, the commercial project does in fact resemble a hand weight, with an ostentatious, colorful Italianate pattern sprawled across the facade for extra impact.
Funded in part by investors who pooled money via the Crowdstreet crowdfunding platform, the building, located in a former industrial neighborhood called Burnside Bridgehead, is also open for business and looking for tenants. It’s the city’s first crowdfunded building, and a sign that the growing world of real estate crowdfunding has developed and matured since a 2012 change in investment regulations made these platforms possible.
While reliable numbers about this growing and fragmented market prove difficult to come by, research firm Massolution estimated the global market for real estate crowdfunding surpassed $3.5 billion in 2016.
Hope grows that a larger SEC crackdown on ICOs is coming — and soon (TechCrunch), Rated: A
More than $3 billion has been raised through so-called initial coin offerings so far in 2017.
That wait-and-see stance looks to evolve into much more action in 2018, suggest those who’ve either spoken with the Securities and Exchange Commission or otherwise have a vested interest in its rulings. (The SEC isn’t commenting publicly on its specific plans.)
Just Friday, a new division of the agency that’s focused on ICOs filed charges against an outfit called PlexCoin that reportedly raised $15 million from thousands of investors by promising a 1,354 percent return in 29 days or less.
Credit score row as FICO chief hits out at banks over ‘Fako’ rivals (Financial Times), Rated: A
A row has erupted over credit scoring after the head of FICO, the company whose metric underpins trillions of dollars in lending decisions in the US, hit out at some lenders for supplying customers with a rival measure he dismissed as “Fako”.
The group that supplies lenders with the rival assessment, VantageScore, hit back, saying Mr Lansing was spreading “misinformation aimed at discrediting FICO’s only real competitor”.
The spat points to the opacity of credit scoring, a crucial part of America’s consumer finance economy that is in the spotlight after the huge data loss at the credit reporting company Equifax.
Tips for Reducing College Costs (Earnest Email), Rated: B
Roostify to Integrate With Black Knight’s LoanSphere Empower Loan Origination System (BusinessWire), Rated: B
Roostify, a provider of automated mortgage transaction technology, today announced that it has signed an agreement with Black Knight, Inc. (NYSE:BKI) to integrate its platform with Black Knight’s LoanSphere Empower loan origination system (LOS). The integration will enable Empower users to add further efficiency and transparency to the loan origination process – from application to closing.
Envestnet | Yodlee Incubator Unveils New Class of Fintech Disruptors (Business Insider), Rated: B
Envestnet | Yodlee(NYSE: ENV) today announced the members of the newest Envestnet | Yodlee Incubator class.
The members of the 2017–2018 Envestnet | Yodlee Incubator class are:
- Amplifunds helps donors find non-profits that match their interests and performance expectations.
- Datasine turns transactional data into psychometric insights, allowing banks to better serve their customers.
- Golden helps families care for their senior parents’ financial health, wealth and security.
- Peanut Butter offers a cloud-based software to help employers attract college-educated talent by managing student loan assistance programs.
- Starbutter AI makes text and voice chat Artificial Intelligence (AI) agents that help consumers pick financial products like credit cards and mortgages.
- Stessa enables property owners to manage, track, and communicate performance of their real estate assets.
- Tangello improves home affordability by bridging the gap between renting and buying and offering a flexible, lower cost, and quicker way to finance homes, directly from mobile devices.
- Veryfi provides mobile-first bookkeeping software that empowers business owners by automating the tedious parts of accounting through AI and machine learning.
AutoGravity Names Sheng Wang As Chief Technology Officer (PR Newswire), Rated: B
AutoGravity has announced the appointment of Sheng Wang as Chief Technology Officer (CTO) to drive the company’s global engineering efforts. Wang joins AutoGravity’s executive team with responsibility for leading product and engineering to deliver a trustworthy and innovative car buying experience that empowers the consumer.
Prior to her appointment as CTO, Wang led AutoGravity product development as the company’s first Director of Product, building cross-functional teams to develop and launch the award-winning AutoGravity platform, as well as branded platforms for Volkswagen Credit and Kia Motors Finance. Wang joined AutoGravity with more than fifteen years of leadership experience in the technology industry and an uncompromising dedication to building dynamic teams and high-impact products that people love.
QCash Financial Wins Financial Times Future of Fintech Awards for the Innovation Category (BusinessWire), Rated: B
QCash Financial, a Credit Union Service Organization (CUSO) providing automated, cloud-based small-dollar lending technology for financial institutions, announced that it was selected as the winner of Financial Times Future of Fintech Innovation Award.
The FT Future of Fintech awards recognize pioneering companies able to demonstrate innovative ideas capable of creating lasting change in the financial services sector on a global scale. Financial Times offers an Innovation Award for newer Fintech companies that are bringing out novel solutions. QCash Financial was awarded the Innovation Award.
Funding Circle passes $ 5 billion lent globally, including $ 1 billion lent to US businesses (PR Newswire), Rated: AAA
Funding Circle today announced that investors have lent more than $5 billion globally to small businesses through the Funding Circle platform. This has supported a network of 40,000 businesses across the UK, USA, Germany and the Netherlands and helped to create more than 100,000 new jobs.*
Today’s news follows a record November for Funding Circle globally with the business facilitating more than $260 million of lending, including $175 million in the UK (£130m), $70 million in the US and $15 million in Continental Europe (€14.5m). Together this has helped thousands of business owners to access fast, transparent finance to grow their businesses, and will lead to an estimated 7,500 new jobs.
With US businesses now having accessed more than $1 billion in funding through the platform, Funding Circle becomes the first lending platform anywhere in the world to have facilitated more than $1 billion across two markets.
Your December Review – Insight and Analysis (Funding Circle), Rated: AAA
Your lending has reached £3 billion in the UK! November was also a record month, with £129 million lent to small businesses in the UK.
Over half of Brits (56%) think they have the skills to run their own business, but only 13% believe they’re entrepreneurial.
RateSetter Publishes 2016-2017 Accounts (Crowdfund Insider), Rated: AAA
On Wednesday, UK peer-to-peer lending platform RateSetter released its accounts for the year ending on March 31, 2017. The online lender reported that revenues were £23.7m, up 38 percent from 2015-16; loans under management grew by 23 percent, from £581m to £714m; the number of active lenders grew by 36 percent from 31,036 to 42,049; and, over the same period, the number of active borrowers grew 27 percent from 161,000 to 204,000.
Peer-to-peer lender RateSetter’s losses jump as it takes a hit from bad loan to ad company (Business Insider), Rated: A
RateSetter booked a pre-tax loss of £23.3 million in the year to March 2017, compared to a £5.3 million in the previous year. The company operates a peer-to-peer platform that matches retail investors with individuals looking to borrow money.
Operating losses were £9.2 million last year but the figure was pushed higher by a one-off write-down relating to a loan the platform made to Adpod Limited, an advertising business RateSetter lent £12 million.
‘A resilient business’
RateSetter’s accounts also show that revenue rose by 38% to £23.7 million. Loans under management rose by 23% to £714 million. The number of active lenders on the platform rose by 36% to 42,049 and the number of borrowers rose by 27% to 204,000.
Goodwill impairment helps push Ratesetter further into to the red (Verdict), Rated: A
A goodwill impairment pushed pre-tax losses for RateSetter down to £23m in the year ending March 2017, despite revenue growth of 38% to £23.7m.
The company, which launched a consumer vehicle and commercial assets HP offer this year, saw a rise of 36% in the number of lenders and 27% of borrowers. However, operating losses of £9.2m were further weighed down by a £14.1m goodwill impairment on a loan to advertising company Adpop.
In 2015 Vehicle Trading Group, a company operating in motor finance for consumers and dealerships, used a wholesale facility from RateSetter to lend £12m to Adpop. Both Vehicle Trading Group and Adpop subsequently went into financial difficulties, and RateSetter then bought the two companies.
RateSetter thus decided to back Adpop’s repayments of third party loans, preventing its provision fund from absorbing the hit, as it normally would in case a borrower defaults.
Starling Bank Receives Full Regulatory Approval from FCA & PRA to Offer Broad Portfolio of Financial Products (Crowdfund Insider), Rated: AAA
Starling Bank has been granted approval by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to offer customers a wide array of financial products by the mobile only bank. Starling Bank received a licence to operate as a bank by the Bank of England in 2016. The digital only challenger bank will now be able to provide; mortgages, consumer loans, ISAs, and other investment products via their App. No bricks and mortar necessary.
Barnett backs P2P Global Investments for recovery (Citywire), Rated: A
P2P Global Investments (P2P), the largest of the listed alternative lending funds, has won the backing of Invesco Perpetual’s Mark Barnett, its largest shareholder, for the turnaround plan it outlined last week.
The future of advice is ‘Fintegration’ (Professional Adviser), Rated: A
The financial advisory sector has seen much change in the past few years, much of it driven by new technologies and a wave of new market entrants. While we are seeing consolidation and innovation in response, this is just the start. So if you thought the merry-go-round was slowing down, then grab hold tightly because it is only going to accelerate.
‘Fintegration’ – the integration with fintech services – is emerging as an important factor.
What is common to both groups is their appetite for financial online and digital services – from online banking and mortgage management to peer-to-peer lending platforms. There is no doubt we will shortly see the fully integrated dashboard becoming commonplace.
China targets booming online lending as crisis fears build (Hong Kong FP), Rated: AAA
The 24-year-old secretary is among millions of Chinese who have turned to proliferating online companies that dish out quick loans — and are worrying the country’s leadership.
Jia started accumulating her debt when she was in college, turning to tech titan Alibaba when she could not get a credit card.
The ease of a few taps on her phone and a four minute wait led Jia to borrow and borrow and when she was finally able to take out a card, she used it to repay Alibaba’s affiliate Ant Financial.
But her debt reached roughly US$9,000 this summer, and her monthly interest payments eclipsed her meagre salary.
Alternative lending, with loans that can be wired to accounts within minutes, has taken off in China and accounts for 85 percent of the global market, according to a University of Cambridge report.
N26 launches a premium debit card for ‘the digital customer,’ partners with WeWork (TechCrunch), Rated: AAA
N26, the European mobile banking service, today announced the launch of N26 Metal, the company’s premium MasterCard-affiliated debit card “tailored to the needs of digital customers” at TechCrunch Disrupt Berlin. N26 Black customers in Germany, France, Italy and Austria will be able to sign up for the new NFC-enabled card, which obviously features a metal core made from tungsten and that makes the card weigh a lot, starting December 14.
It’s also worth noting that this is the first metal card in Europe that supports contactless payments.
What better company to partner with then than co-working and real estate startup WeWork. Using the N26 Metal service, N26 customers will also be able to join the WeWork network and get credits to reserve workspaces and conference rooms.
Currency trader Revolut’s offer to those champing at the bitcoin (The Times), Rated: AAA
Revolut, which provides foreign currency services to consumers and small businesses, said that from today its users would be able to buy bitcoin and other “cryptocurrencies” using 25 conventional currencies.
BFS Capital has Extended Over $ 1.7 Billion in Financing to Businesses across the US, UK and Canada (BusinessWire), Rated: A
Marking its 15th anniversary year, BFS Capital, a leading small business financing platform, announced it has now extended over $1.7 billion in financing since funding its first deal in 2002. The company also reported that over 75 percent of its originations have occurred in the last five years and more than 25 percent took place in the last 18 months. For full year 2017, BFS Capital expects to generate more than $300 million in originations, a new annual high.
Recent Origination Milestones in Online Lending (Lend Academy), Rated: A
Today, Kabbage announced they had crossed the $4 billion mark. They have now lent to more than 130,000 small businesses which they claim is the largest customer base of any online small business lender.
This week LendingHome announced it had crossed $2 billion in mortgage loans for homeowners and real estate investors.
Funding Circle UK crossed the £3 billion (approx. $4 billion) mark in small business lending for their UK business.
LendingClub quietly announced total small business originations of $500 million since 2014 in a recent blog post.
Emerging markets are under pressure, but I’m buying the dip (CNBC), Rated: A
The Chinese government instituted tough new regulations on online consumer lending platforms, which are made up of payday loans and peer-to-peer lending. Some of them are associated with large holdings in the emerging markets exchange-traded fund like Ant Financial, an Alibaba Group affiliate.
While much of this is a continuation of the Chinese debt bubble, the move suggests that it has gotten out of the regulators’ control.
We see a global trade boom continuing to drive emerging markets as global Purchasing Manager indexes show continued growth in demand for manufactured goods. For example, Korea is already registering signs of slowing Chinese demand but is still showing 9.6 percent year-on-year growth for November exports. However, we continue to watch the tone out of Washington, since a shift toward more protectionism could put a dent in this.
Viola FinTech is a new $ 100M Israel-based VC fund targeting fintech startups around the world (TechCrunch), Rated: B
Viola, the Israel-based technology investment group, is launching new independent VC fund targeting fintech startups from anywhere in the world. Dubbed Viola FinTech, the “cross-stage venture fund” has an initial closing of $100 million but will extend that towards $120-150 million. It is backed by global banks, insurance companies and asset managers from North America, Europe, APAC and Israel, including Scotiabank, The Travelers Companies, Inc and Bank Hapoalim.
San Francisco’s Credible Raises $ 50 Million in Australian IPO (Bloomberg), Rated: AAA
San Francisco-based financial technology company Credible Labs Inc. is going public, but not on a U.S. exchange.
The startup, a consumer loans marketplace, raised $50 million (A$66 million) in an initial public offering on the Australian Securities Exchange, according to a statement Thursday.
The IPO values Credible at A$300 million, about 50 percent higher than the valuation it got in its last fundraising round, according to people familiar with the matter, who asked not to be identified as the details aren’t public.
Yellow Brick Road Adds Prospa to Lending Panel in Boost to Aussie Small Business (Crowdfund Insider), Rated: A
Yellow Brick Road has added online lender Prospa to its lending panel. The move was described as an effort to diversify its lending offerings for Australian small business customers. Yellow Brick Road is a full service wealth management company that offers products and services for home loans, financial planning, insurance, superannuation, and investments.
Marketplace lenders must ‘start educating’ SMSFs on opportunities, discipline (Nestegg), Rated: A
Speaking to Nest Egg, CEO of fully licensed marketplace lender Zagga, Alan Greenstein said that self-directed investing is now a “very, very big part of SMSF investment” and that according to Zagga research, well over 30 per cent of SMSFs at a sophisticated wholesale level are self-directed investors.
Pointing to a recent whitepaper produced by Zagga, Mr Greenstein said SMSFs tend to be invested at either end of the spectrum; very high risk and high yielding opportunities, or very low risk opportunities.
He said that Zagga’s newly launched ZAG Fund offered a middle ground, with a targeted net return of 6.5 per cent.
Ngā Tangata Microfinance breaking hold of predatory lenders (Scoop), Rated: A
With loan capital provided by Kiwibank, Ngā Tangata Microfinance (NTM) provides no-interest loans to qualifying clients for family well-being and relief from high-interest debt.
An evaluation conducted by the University of Auckland’s Centre for Applied Research in Economics found NTM’s no-interest loans were crucial in helping low-income clients break the cycle of debt caused by predatory payday and fringe lenders.
Partnering with local budgeting advisors, NTM has now disbursed more than $660,000 in no-interest loans to more than 300 clients, with 70% of the support being for relief from high-interest debt. It is estimated these loans had potentially saved clients a total of more than $1 million in interest and additional costs. Requests for help continued to trend up – 30% more NTM loans were approved in the past 12 months compared to the previous year, amounting to nearly 130 loans worth $275,000.
Loans are easy to get, but are they for you? (livemint), Rated: AAA
When you buy a phone, you have the option to pay for it then or pay later. You have this option even when you are buying grocery or paying bills. Credit these days can be available relatively easily, even for amounts as low as Rs1,000. In fact, in a country where you need to have a good credit history and credit score to get loans from banks, you can now get loans on your phone—even if a bank would not lend to you.
According to data from the Centre for Monitoring Indian Economy Pvt. Ltd (CMIE), personal loans (incremental numbers) increased 179% and credit card outstanding rose 34.63% in value during April to October period in FY 2017-18. In comparison, incremental numbers during the same period for housing loans showed negative 32.7%.
HDFC Bank Ltd saw a 35.75% growth in personal loans and 44.50% growth in credit card business in the second quarter (on a year-on-year basis). ICICI Bank, in its second quarter results this financial year said that its personal loan book saw a 40.1% year-on-year growth and the credit card business grew by 36.5%. And this is true for the non-banking finance companies (NBFCs) as well. Bajaj Finance Ltd saw a 42% growth in consumer lending in the same period.
Vietnam launches first peer-to-peer lending platform (XinhuaNet), Rated: AAA
Vietnam has launched its first peer-to-peer lending service Vay Muon, enabling people to borrow and lend money without having to go through a financial institution.
Matching lenders and borrowers via a smartphone application, the lending platform does not require mortgages and one-on-one meetings, local VTV online newspaper reported on Thursday.
First-time loan requests will be reviewed and disbursed within four hours and subsequent requests will be handled in just half an hour.
‘Korean startups should do what they are good at to get funding’ (The Investor), Rated: A
Korean startups flock to Silicon Valley hoping to become the next Facebook or Google. However, setting up a business from scratch where thousands of new startups come and go every year, is not easy, and becoming a “unicorn” is near impossible.
One fundamental reason is because they can’t get enough funding, according to Tim Chae, head of the Korean unit of US accelerator 500 Startups.
First of all, a company should either run a business in a certain sector for which Korea is widely famous worldwide, such as beauty and e-sports segments, rather than roll out me-too services and products.
Datarius Cryptobank Participates at BlockShow Asia 2017 (Digital Journal), Rated: B
On November 29–30 a large-scale event — Block Show Asia 2017 — was held, and Datarius Cryptobank participated in this event.
Datarius Cryptobank is a unique project. This is a first social cryptobank built on base of the distributed register technologies using neural networks and artificial intelligence. The main attractive features of the project for investors and future customers are the lowest transaction fees, as well as P2P-lending.
IOU Financial Surpasses US$ 500 Million in Loans Originated (Cision), Rated: AAA
IOU Financial Inc. (“IOU” or “the Company”) (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announces today that it has facilitated more than US$500 million in financing to thousands of merchants and small businesses across the United States and Canada since launching its lending platform.
News Comments Today’s main news: Prosper’s top concern next year is liquidity. Affirm seeks new funding at $1.5B valuation. LendingHome surpasses $2B in loan originations. ThinCats delays IFIsa launch. Funding Circle hits 3B GBP in lending. Dianrong planning $500M IPO. Today’s main analysis: Acorns puts up a fight to upscale. Mobile credit and financial inclusion. Today’s thought-provoking articles: Is Lending Club […]
- Today’s main news: Prosper’s top concern next year is liquidity. Affirm seeks new funding at $1.5B valuation. LendingHome surpasses $2B in loan originations. ThinCats delays IFIsa launch. Funding Circle hits 3B GBP in lending. Dianrong planning $500M IPO.
- Today’s main analysis: Acorns puts up a fight to upscale. Mobile credit and financial inclusion.
- Today’s thought-provoking articles: Is Lending Club misleading new investors? Best and worst cities for wallet fitness. China set to rank its citizens. China Rapid Finance eyes a new opportunity. How mobile credit can lead to financial inclusion. India’s small businesses brace for a boom.
- Prosper is concerned about liquidity. AT: “As Prosper grows, liquidity will become even more important. The risk is to go bell up or sink the company in debt, which could keep it tied away from expecting profits for years to come. I’d like to see the company hit the level of liquidity it expects.”
- Is Lending Club misleading new investors about past performance? AT: “I’ll have to agree with Sean Murray on this one. While it may be misleading, the onus is on investors to do their due diligence. The information is out there.”
- Affirm said to be raising funds at $1.5B valuation. AT: “Unicorn status is just a symbol. The real test of success is how the company is run, whether or not it is profitable, and whether it services customers’ expectations well. That said, Affirm has huge potential in the niche it is targeting. We’re just at the beginning stage of this boat ride.”
- Acorns puts up a fight to go upmarket. AT: “A few years ago, while building a content marketing company, I discovered that there were two ways a business can pursue the success dragon. You can sell high-dollar products to raving fans and build upon reputation–like Apple–or you can target to the masses and make your profits on slim margins. The latter is the more difficult row to hoe, especially if there is a lot of competition at the price level. Acorns may have a lot of customers, but they can’t bank forever on slim margins. This is a great read.”
- How Cross River Bank is taking mobile payments to businesses.
- Morgan Stanley is starting a robo-advisor.
- The best and worst cities for wallet fitness.
- Rich Uncles hires new CFO, COO.
- Perkins Coie hires SEC attorney.
- Barclaycard rebrands to Barclays to open digital bank in U.S.
- The Argon Group fires staff en masse.
- Atlantic Capital Bank adds new position: VP of Fintech Industry Banking.
- 2 secrets to getting a business loan.
- ThinCats delays IFIsa launch.
- Funding Circle hits 3B GBP lending milestone. AT: “In case you missed it.”
- Oakam nabs 35M GBP debt facility from Victory Park Capital.
- LandlordInvest publishes loan book.
- Welendus launches beta platform for investors.
- 6 ways fintech startups can hurt incumbent banks.
- 5 UK startups to watch.
- Dianrong planning a 2018 IPO for $500M.
- China all set to implement ranking system on citizens.
- China Rapid Finance sees new opportunity.
- Banks’ robo-advisors see more scrutiny.
- Pinganfang caught up in U.S. fraud case.
- Fintech faces a change of pace.
- Why mobile credit can lead to financial inclusion. AT: “An excellent read using Juvo data.”
- Bitfinex crashes.
- Etherecash provides lawyer-backed platform.
- ID Finance adds ex-CEO of 4finance to board.
- Small businesses are ready to boom.
- Rentickle raises $4M.
- P2P Easy the fastest growing P2P platform in India.
- United States
- Prosper’s Top Concern in 2018 is Liquidity, CEO Says (Bank Innovation), Rated: AAA
- Is Lending Club Misleading New Investors About Past Performance? (deBanked), Rated: AAA
- Affirm Is Said to Be Raising Funding at $ 1.5 Billion Valuation (Bloomberg), Rated: AAA
- Acorns Teardown: The Most Popular Robo-Advisor Faces A Fierce Fight As It Goes ‘Upmarket’ (CB Insights), Rated: AAA
- Mortgage Marketplace Lender LendingHome Surpasses $ 2 Billion in Loan Originations (Crowdfund Insider), Rated: AAA
- How Cross River Bank plans to bring mobile payments to business customers (Tearsheet), Rated: A
- Morgan Stanley is getting in on the hottest trend in investing (Business Insider), Rated: A
- 2017’s Best & Worst Cities for Wallet Fitness (WalletHub), Rated: AAA
- Rich Uncles Announces New CFO, COO, and Corporate Headquarters (Business Insider), Rated: A
- Perkins Coie Law Firm Boosts Fintech Bench with SEC Attorney Hire (Crowdfund Insider), Rated: A
- Barclaycard building digital bank in US (Banking Technology), Rated: A
- Mass firings at top digital currency investment bank (New York Post), Rated: A
- Atlantic Capital Bank expands into Fintech Banking with strategic new hire (GlobeNewswire), Rated: A
- Want to Learn 8 Secrets for Getting a Business Loan? Here are 2 (Small Biz Trends), Rated: B
- United Kingdom
- ThinCats delays IFIsa launch (Bridging&Commercial), Rated: AAA
- Funding Circle hits £3bn lending milestone (P2P Finance News), Rated: AAA
- Micro-lender Oakam secures £35 million debt facility from Victory Park Capital (Finextra), Rated: A
- LandlordInvest publishes loan book (P2P Finance News), Rated: A
- Welendus launches beta platform for investors (P2P Finance News), Rated: A
- Six ways fintech startups could hurt incumbent banks (Econsultancy), Rated: A
- Five (more) UK startups to watch: Were we right? | Fintech Recap 2017 (Bob’s Guide), Rated: B
- Chinese Online Lender Dianrong Eyes 2018 IPO, Could Raise at Least $ 500 Million (WSJ), Rated: AAA
- China Is Set to Implement a System of Ranking Its Citizens (Interesting Engineering), Rated: AAA
- Micro-lender China Rapid Finance spots opportunity in new rules (Reuters), Rated: AAA
- Banks’ robo-advisers are facing increasing scrutiny (China Daily), Rated: A
- WeiyangX Fintech Review (Crowdfund Insider), Rated: A
- Change of pace ahead for fintech (China Daily), Rated: A
- Why Mobile Credit Can Be the Entry Ticket to Financial Inclusion (Let’s Talk Payments), Rated: AAA
- Anger and confusion as crypto traders lose thousands in ‘flash crash’ on $ 54 billion exchange (Business Insider), Rated: A
- Etherecash Provides Lawyer-backed Platform to Secure Loans Against Your Own Cryptocurrency (Coinspeaker), Rated: B
- ID Finance strengthens board with ex-CEO of 4finance (ID Finance Email), Rated: A
- India’s Small Businesses Are Ready To Boom, Thanks To Fintech (Forbes), Rated: AAA
- Online lifestyle renting firm Rentickle.com raises $ 4 M in equity and debt (YourStory), Rated: A
- P2P Easy Extends Services As The Fastest Growing Peer-to-Peer Money Lending Platform In India (Digital Journal), Rated: B
- Culum Capital launches online platform for alternative investment (HedgeWeek), Rated: A
- Fintech versus financial inclusion: What’s the difference? (DevEx), Rated: A
Prosper’s Top Concern in 2018 is Liquidity, CEO Says (Bank Innovation), Rated: AAA
Marketplace lender Prosper will make liquidity a top priority as the company moves into 2018, company CEO David Kimball said during a lending conference that took place last week.
“Our main concern… it’s always liquidity, and I think most people in this room understand that the best way to get to liquidity is to have a lot of different options,” Kimball said to attendees of the Investors Conference in Marketplace Lending on Friday, December 1st. “And so I think you’ll see our toolkit expand [in 2018] versus where it is now.”
Is Lending Club Misleading New Investors About Past Performance? (deBanked), Rated: AAA
New retail investors interested in the Lending Club platform are greeted with a friendly statistic, that “99% of portfolios with 100+ Notes have seen positive returns.” That’s a slippery statement, which is probably why they footnoted it.
Affirm Is Said to Be Raising Funding at $ 1.5 Billion Valuation (Bloomberg), Rated: AAA
Affirm Inc., an online lender run by PayPal co-founder Max Levchin, is in advanced talks for a financing round that would earn it a place in the unicorn startup club.
The San Francisco-based startup is discussing an investment of about $150 million, said people familiar with the matter. The deal would value the company at $1.5 billion, about double the valuation from the last round in April 2016, said the people, who asked not to be identified because the terms aren’t finalized. Affirm declined to comment.
Acorns Teardown: The Most Popular Robo-Advisor Faces A Fierce Fight As It Goes ‘Upmarket’ (CB Insights), Rated: AAA
The micro-investing app has grown an of army of 2.2M accounts. But making money off these first-time, lower-income investors won’t be easy. To do so, Acorns is building out higher-tier investment services and moving into the highly saturated $40T retirement planning market.
With over 2.2M investment accounts in the US since launch, the company has proved there is a clear niche for its product. It is already the largest robo-advisor by client accounts.
Acorns’ service isn’t free, but it is cheap — the company charges $1 a month or .25% for accounts over $500. At $12 annually for many accounts, that’s not a lot of revenue.
Acorns is making a number of important moves:
- It is launching its own retirement savings plan in 2018 called Acorns Later, which could help it reach new users and push up current users’ account size.
- It has formed a strategic partnership with investor Paypal to extend its product to Paypal’s huge user base. In addition, its partnership with Paypal could ultimately help Acorns get into bank account services, a move similar to what low-income investing competitor Stash has done.
- A B2B offering may also be in the works, based on recent acquisition activity. B2B products have helped other robo-advisors see big jumps in AUM.
Acorns manages approximately $528M in AUM and approximately $407 per account as of September 2017. Compare that to Betterment which manages approximately $28.5K per client account and Wealthfront which averages $42.3K.
Mortgage Marketplace Lender LendingHome Surpasses $ 2 Billion in Loan Originations (Crowdfund Insider), Rated: AAA
On Monday, mortgage marketplace lender LendingHome announced it has originated more than $2 billion in mortgage loans for homeowners and real estate investors. The online lender revealed that the first billion of originations occurred over the course of 30 months, while it took just 12 months for the company to originate its second billion. In the process, LendingHome crossed the major milestone of financing more than 10,000 homes nationwide.
How Cross River Bank plans to bring mobile payments to business customers (Tearsheet), Rated: A
How and when employees get paid should be their choice, Isaacson said. The technology to make that happen is already in the market — Uber and Lyft drivers are taking advantage of it, for example — but the systems aren’t in place at most companies, and there’s a mental barrier for businesses to overcome to begin creating mobile payout experiences.
It’s also too inflexible for some businesses, like a restaurant or store that may need more or fewer cases of Coca Cola than the originally ordered 10. They need to be able to make adjustments like that in real time, Isaacson said. With a mobile device, people can manage and initiate payments in real time and remotely.
Cross River Bank is a business bank, whose clients are some of the biggest fintech companies. Behind the scenes, CRB has developed payments solutions for faster, more secure and lower-cost transfers that have been integrated by TransferWise and the bitcoin wallet Coinbase, as well as Google Wallet and Stripe — which counts Lyft as a customer.
Morgan Stanley is getting in on the hottest trend in investing (Business Insider), Rated: A
The New York-based investment bank announced Monday the launch of Access Investing, an online roboadviser designed to capture a younger clientele.
The goal of Morgan Stanley’s new offering is to serve as a stepping stone, so to speak, for younger savers who one day might want to tap into the bank’s broader suite of wealth-management services when they are wealthier and older.
2017’s Best & Worst Cities for Wallet Fitness (WalletHub), Rated: AAA
Wallet Fitness levels vary widely across the U.S. As we prepare to make resolutions for self-improvement, it’s fair to wonder who’s best positioned for financial success and who has the most work to do. To find out, we compared more than 180 U.S. cities based on 29 key indicators of Wallet Fitness.
|10 Best Cities for Wallet Fitness||10 Worst Cities for Wallet Fitness|
|1||Fremont, CA||173||Oxnard, CA|
|2||San Francisco, CA||174||Miami, FL|
|3||Madison, WI||175||New Orleans, LA|
|4||Columbia, MD||176||Gulfport, MS|
|5||San Jose, CA||177||Santa Ana, CA|
|6||Seattle, WA||178||Brownsville, TX|
|7||Minneapolis, MN||179||San Bernardino, CA|
|8||Sioux Falls, SD||180||North Las Vegas, NV|
|9||Bismarck, ND||181||Newark, NJ|
|10||Warwick, RI||182||Hialeah, FL|
See the rest of the results here.
Rich Uncles Announces New CFO, COO, and Corporate Headquarters (Business Insider), Rated: A
Leading crowdfunding real estate investment platform, Rich Uncles, LLC, today announced the appointment of John H. Davis as its new chief financial officer and Jean Ho as its new chief operating officer and chief compliance officer.
Mr. Davis comes to Rich Uncles after more than four decades with KPMG LLP, one of the world’s four largest accounting firms, where he had served as a partner since 1988.
Ms. Ho joined Rich Uncles, LLC in 2016 as the company’s chief financial officer, where she has helped lead the acquisitions of 29 commercial properties across two Rich Uncles-sponsored REITs: Rich Uncles Real Estate Investment Trust I and Rich Uncles NNN REIT, Inc. Prior to joining Rich Uncles, LLC, Ms. Ho held positions as chief operating officer and chief financial officer of Soteira Capital, LLC, chief financial officer of MKA Capital Advisors, LLC, and with KPMG LLP, where she specialized in real estate, financial services, and high net wealth personal financial and estate planning.
Perkins Coie Law Firm Boosts Fintech Bench with SEC Attorney Hire (Crowdfund Insider), Rated: A
Perkins Coie, a law firm that is very active in the Fintech / Blockchain space, has announced the hiring of a former SEC attorney. Michael S. Didiuk has joined the firm’s Investment Management practice group as a partner in the San Francisco office where he will represent clients on various federal securities laws and complex regulatory issues raised by Blockchain technology and with the emergence of digital asset sales and digital securities.
Barclaycard building digital bank in US (Banking Technology), Rated: A
Barclaycard is rebranding itself to Barclays in the US as part of its retail digital banking strategy in 2018.
According to Tearsheet, Barclaycard says since last November it has been targeting prime and super-prime borrowers with an online personal loan offering on a test-and-learn basis to a small group of customers. Barclaycard plans to launch the same offering publicly by the middle of 2018.
Mass firings at top digital currency investment bank (New York Post), Rated: A
The largest investment bank catering to the red-hot cryptocurrency sector was in total disarray on Friday after management fired nine employees — including the entire tech team, The Post has learned.
The Argon Group had been battling internal turmoil recently as many of its investment bankers had grown disenchanted over the direction of the company, sources said.
Atlantic Capital Bank expands into Fintech Banking with strategic new hire (GlobeNewswire), Rated: A
Chris Stanley joins Atlantic Capital Bank as Vice President of Fintech Industry Banking, to lead Atlantic Capital’s Fintech Banking practice.
Expanding on a successful payments industry line of business, the new fintech banking practice will focus on emerging growth and growth-stage companies in this evolving technology segment. This will bolster Atlantic Capital’s core deposit gathering strategy.
Want to Learn 8 Secrets for Getting a Business Loan? Here are 2 (Small Biz Trends), Rated: B
Secret #1: Yes, You CAN Improve Your Personal Credit Score
- Pay down your credit cards. As a yardstick, you’ll want all your cards under 50 percent of their limits. This means no more maxing out cards — for personal or business.
- Lower your debt compared to your income. A good benchmark is keeping debt to 30 percent of less of your income. Rather than taking a second mortgage on your home and increasing your debt load, you might be better served to apply for a business loan.
- Monitor your credit score. Errors are more common than most people realize. Besides you’ll learn which creditors report to credit agencies and what they report on.
Secret #2: Your Business Credit History May Be Incomplete, But It’s Not Hard to Change That
- Establish free profiles with the three major business credit bureaus: D&B, Experian, Equifax
- Apply for a business credit card and use it to establish a timely repayment history.
- Do business with vendors (“trades”) that report to credit bureaus regularly.
ThinCats delays IFIsa launch (Bridging&Commercial), Rated: AAA
The peer-to-peer lending platform had hoped to launch its IFIsa by the end of this year and thanked investors for their patience.
It is currently building the new systems needed to handle the different aspects of accepting and administering Isa investments safely.
Funding Circle hits £3bn lending milestone (P2P Finance News), Rated: AAA
FUNDING Circle has become the first UK peer-to-peer platform to reach the £3bn cumulative lending milestone.
The business finance provider said on its website that “30,948 UK businesses have financed their goals by borrowing £3bn through Funding Circle”.
Zopa, which lent out a record £100m last month, said it expects to reach the £3bn mark in January.
Micro-lender Oakam secures £35 million debt facility from Victory Park Capital (Finextra), Rated: A
Digital micro-lender, Oakam today announced that it has secured a £35 million debt investment from Victory Park Capital Advisors, LLC (VPC), an investment firm focused on private middle market debt and equity investments.
LandlordInvest publishes loan book (P2P Finance News), Rated: A
LANDLORDINVEST, a peer-to-peer lending platform for residential and commercial real estate mortgages, has published its entire loan book to mark its one-year anniversary.
It reveals that LandlordInvest lent a total of £2.7m between December 2016 and December 2017, with an average loan amount of £210,535.
The average loan term was 7.6 months, the average LTV was 63.7 per cent and the average annual gross return to investors was 11.1 per cent.
Welendus launches beta platform for investors (P2P Finance News), Rated: A
WELENDUS, the peer-to-peer payday lender, has launched a beta version of its platform for investors after its latest funding round exceeded its target in under 24 hours.
Six ways fintech startups could hurt incumbent banks (Econsultancy), Rated: A
For years, there has been much talk about the impact of fintech startups like Mondo and Atom Bank on incumbent banks but little has been done to quantify the actual effects fintechs are having on big banks.
New data from The Bank of England (BoE), published as part of its 2017 stress test of the UK banking system, however, is shedding light on this subject.
- Reduced overdraft revenue
- Reduced fees from payment services
- Higher customer acquisition and retention costs
- More difficulty cross-selling
- Increased liquidity risk
- Increased cyber security risk
Five (more) UK startups to watch: Were we right? | Fintech Recap 2017 (Bob’s Guide), Rated: B
Where they were then: Trussle, the online mortgage trading company, is a rising star in the fintech industry. The start-up company provides solutions and answers to those looking to invest with a hassle-free process.
Where they are now: Following their funding round in early February to raise £4.5m ($5.68m) backed by Orange and Growth Capital, and existing investors LocalGlobe, Zoopla and Seedcamp, Trussle went on to join forces with Revolut in April to give users direct access to their mortgage brokering services.
Total equity funding: $7.38m (now $7.6m) +2.98%*
Where they were then: Iwoca was created to help make credit and loans of up to £100,000 available to small businesses.
Where they are now: 8 days after the time of writing the previous bio, Iwoca partnered with NatWest through Capital Connections to provide SMB loans, a significant collaboration for the six year-old startup.
Total equity funding: $58.5m (now $90m) +54%*
Where they are now: They currently boast a 6.6% annual return for investors and have earned £156m in interest for investors. They’ve lent £3 billion to UK businesses in a total of 43,251 loans (since 2010).
Total equity funding: $373.2m (now flat) –%*
Where they were then: Crowdcube is an investment crowdfunding platform that lets customers hand pick the businesses they want to back and invest in.
Where they are now: In the third quarter of 2017, Crowdcube registered £1m in company revenue, with 70 pitches.
Funds raised to date: $18.69m (now $28.3m) +51.42%*
Where they were then: Based in the heart of the UK capital, LendInvest is the UK’s leading online property lending and investing businesses.
Where they are now: In September, LendInvest announced the strategic partnership with Clever Lending, a specialist lending solution.
Total equity funding: $58.6m (now $393m) +570%*
Dianrong.com, a Chinese online lending platform started and run by a co-founder of LendingClub Corp. , is planning an initial public offering as soon as next year that could raise at least $500 million, according to people familiar with the matter.
China Is Set to Implement a System of Ranking Its Citizens (Interesting Engineering), Rated: AAA
China is set to implement a social credit system that will rate each of its citizens on a publicly available scale. Officially known as the Social Credit Score or SCS, the system is likely to be implemented by 2020.
It works by giving each citizen a score based on their daily interactions and financial decisions, the score can be affected by debt, spending habits and even social interactions. Obviously, to get this kind of score that will be somewhat compared to a person’s trustworthiness, there will need to be a huge amount of individual monitoring and data collection. The SCS is expected to be rolled out in 2020, but there will be a large scale trial period from now until then so the system can be at optimal functionality when it goes live on its 1.3 billion citizens.
Micro-lender China Rapid Finance spots opportunity in new rules (Reuters), Rated: AAA
China Rapid Finance will make any adjustments needed to its business practices and the fees it charges in response to Bejing’s new requirements to clean up fast-growing online micro-lenders, its chief executive Zane Wang said on Monday.
Online micro-lenders have come under scrutiny as “problems such as over-lending, repeat borrowing, improper collection, abnormally high interest rates, and privacy violations have become prominent”, Chinese financial regulators said last week.
Banks’ robo-advisers are facing increasing scrutiny (China Daily), Rated: A
With financial institutions increasingly employing roboadvisers, China’s central bank and financial regulators issued draft regulations for comment recently, requiring financial institutions to receive regulatory approval for offering such services.
The regulatory authorities said financial institutions should create rational investment strategies and algorithm models, as well as remind investors of the flaws and risks associated with algorithm-based robo-advisory models.
WeiyangX Fintech Review (Crowdfund Insider), Rated: A
The project that Pinganfang.com was caught up in is a sharing working place project called Bar Works. Every work place was sold at $25,000 and the minimum purchase quota per investor was two each. The expected annual rate of return was between 12% to 15%. On June 30th 2017, the SEC charged Renwick Haddow (the planner of Bar Works project) with multiple counts, including illegal fundraising $36 million from the Bar Works investors.
On November 30th, JD Finance and China UnionPay co-launched a Blockchain-based risk information sharing mechanism.
On December 1st, Alibaba officially set up a poverty alleviation fund. As planned, the fund will invest 10-billion-yuan in the next five years to establish a comprehensive security system and help people fight against poverty. At the fund launch ceremony, Jack Ma, the executive chairman of Alibaba Group, told the media that Ant Financial would suspend plans for an initial public offering.
Change of pace ahead for fintech (China Daily), Rated: A
China has emerged as a leading fintech market globally, with analysts estimating the market size to have exceeded $243 billion by the end of last year, accounting for about 85 percent of the global market share.
The sector’s fast and furious growth was also illustrated by the surge of fintech investment in the country, which attracted capital of $8.8 billion between July 2015 to June 2016, equivalent to an increase of 252 percent since 2010, according to a report by Singaporean banking giant DBS Group and global accounting firm Ernst & Young.
Why Mobile Credit Can Be the Entry Ticket to Financial Inclusion (Let’s Talk Payments), Rated: AAA
Think for a moment of what your life would be like with no access to credit. Chances are you wouldn’t own a home or a car. Most of us could not have afforded our college education. The entrepreneurs among us would be hard-pressed to build successful businesses. And what about the ways we take advantage of credit cards – basically small-time loans that exist to allow us to pay for emergencies and unexpected expenses? Our financial identity is tied up in our access to these credit opportunities.
The good news, however, is that mobile devices – along with the existence of the cloud – are providing an entirely new landscape for the developing world. This landscape involves assigning a financial identity to those who have largely remained anonymous, reaching these populations through their smartphones. There are scores of creditworthy people on the planet, and we’ve proven before through data science that worthiness has little to do with income or wealth, but instead with the opportunity to demonstrate responsibility.
With this understanding in mind, we reviewed activity in the wake of recent hurricanes that rocked the Caribbean and observed a spike in prepaid mobile users topping up their phone allowances via on-demand credit extensions prior to hurricanes making landfall.
The following image shows the ratio of airtime credit extensions to cash top-ups as the eye of Hurricane Irma hit the Leeward Islands as well as Turks & Caicos.
As Irma made landfall, purchasing airtime from shops become extremely difficult, if not impossible. The graph above shows what happens when cash based-top ups are not possible.
For these reasons, creating a mobile financial identity in order to provide mobile credit remains the best place to start to address financial exclusion in many parts of the world and smartphones are the most logical vehicle for providing it. Nearly 80% of people all across the globe have prepaid phones, and there are nearly $1 trillion in transactions taking place every day.
Anger and confusion as crypto traders lose thousands in ‘flash crash’ on $ 54 billion exchange (Business Insider), Rated: A
A “flash crash” on the world’s biggest cryptocurrency exchange has left customers demanding answers and refunds, with many claiming to have lost thousands of dollars.
The price of cryptocurrencies NEO, OMG, and ETP crashed as much as 90% in minutes on the Bitfinex exchange on Wednesday before quickly bouncing back to former levels.
The price crash led Bitfinex, the world’s largest cryptocurrency exchange by daily volume, to close the positions of many traders who had placed leveraged bets on these digital currencies. Leveraged trading involves borrowing money to increase exposure.
Brett Kruger, a Bitfinex user affected by the “flash crash”, told Business Insider he is unhappy with Bitfinex because he claims the website was “lagging, unresponsive” at the time of the crash. He said he was also repeatedly logged out of the website, blaming recent DDoS attacks. Bitfinex announced last Sunday that it had been hit by a distributed denial of service (DDoS) attack, a malicious attack meant to bring down the service.
Etherecash Provides Lawyer-backed Platform to Secure Loans Against Your Own Cryptocurrency (Coinspeaker), Rated: B
EthereCash, is a three prong financial platform, wants to eliminate borders, intermediaries and prejudices, providing access to bank services for everybody. It makes all the tedious and lengthy bank operations simple, transparent and secure.
ID Finance strengthens board with ex-CEO of 4finance (ID Finance Email), Rated: A
ID Finance, the emerging markets fintech company, has strengthened its board with the appointment of Kieran Donnelly, ex-CEO of, 4finance, as a board advisor. The appointment will support ID Finance as it continues rapid expansion and further diversification of its business.
Kieran Donnelly served as CEO at 4finance, the European online and mobile consumer lending group for three years. He brings over 30 years of management experience to ID Finance having also held senior roles at Standard Bank Group, MDM Bank and Renaissance Group.
India’s Small Businesses Are Ready To Boom, Thanks To Fintech (Forbes), Rated: AAA
In 2017, India ranked second in the growth rate of fintech adoptionamong digitally active consumers across the globe; this surge was paralleled by the rise in fintech funding — receiving over $200 million in the first half of the year.
The financial services market in India is primarily untapped, with 40% of the population having no association with any bank, and more than 80% of the transactions carried out through cash.
Economic analysts predict that the next impetus for growth in the Indian economy will come from SMBs and startups.This is a great opportunity for the fintech industry, especially startups, to make it easier for SMBs, including kirana and mom-and-pop stores that are looking to gain access to capital and grow their business, by providing services where traditional banks and lenders have failed to reach, or have done so at a far higher cost. For example, Mumbai-based online loan platform, SMECorner.com, offers business loans to SMBs with virtually zero collateral.
Online lifestyle renting firm Rentickle.com raises $ 4 M in equity and debt (YourStory), Rated: A
Delhi-NCR-based lifestyle products rental portal Rentickle.com today announced it has raised $4 million in a fresh funding round. The fundraising is a combination of equity and debt.
The equity portion was led by Ajay Relan, Founder and Chairman, CX Partners, and ThinKuvate, a Singapore-based VC firm, with participation from existing investors. Delhi-based NBFC, DMI Finance Pvt Ltd, extended the company a debt line. Rentickle.com had raised $250,000 seed funding in early 2016.
P2P Easy Extends Services As The Fastest Growing Peer-to-Peer Money Lending Platform In India (Digital Journal), Rated: B
‘P2P Easy’ is a recently founded online platform that works hand in hand with borrowers and lenders for fast loan processing & acceptance.
Although the idea of loaning money dates back to the time when the first bank was established, the core issues are more or less the same to date – i.e. 90% borrowers are rejected, and lenders are skeptic due to a lack of any reasonably acceptable guarantee.
Culum Capital launches online platform for alternative investment (HedgeWeek), Rated: A
Culum Capital, a Singapore-based receivables and supply chain financing provider, has launched a new investor platform, which is aimed at accredited and institutional investors around the globe, and provides invoice financing to SMEs as an alternative to traditional financing sources.
The platform uses its proprietary credit scoring and on-going risk measurement to identify optimum investment opportunities and provide transparency. The transactions carry a short tenor of maximum 120 days, with the average transaction at 70 days. Annualised gross returns are between 10 and 25 per cent, with a strong SME diversification.
Fintech versus financial inclusion: What’s the difference? (DevEx), Rated: A
Mobile phones have introduced a sea of opportunities in every sector imaginable, and that includes in finance. Today, anyone with a cellphone can engage in one form or another of cashless transaction, be it paying bills, sending phone credit, transferring cash, or buying goods and services — even in flea markets.
But what makes this a game changer in the financial sector is how it has penetrated different levels of society. This applies particularly to the unbanked, who are unable to access formal financial institutions and often borrow money from informal lenders who may charge high interest rates and where there is no guarantee of consumer protection.
In recent years, new technologies have emerged that are being used to complement and further what mobile money has achieved: machine learning, peer-to-peer lending, biometric technology, cloud computing, and blockchain, among others.
A conscious effort to ensure all these innovations work for the unbanked
But just because it’s fintech doesn’t necessarily mean it covers financial inclusion.
In fact, a number of the technologies being adopted in the sector are largely aimed at consumer convenience instead of the unbanked.
News Comments Today’s main news: LendingHome surpasses $100M in monthly loan volume, secures $57M in Series C-2. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2017-3. RateSetter says FCA authorization merely a milestone. Qudian raises $900M in biggest listing by Chinese fintech firm. BBVA focuses on U.S.-Mexico remittances with money-transfer app. New Zealand paves path for robos. SoftBank considering second […]
- Today’s main news: LendingHome surpasses $100M in monthly loan volume, secures $57M in Series C-2. KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2017-3. RateSetter says FCA authorization merely a milestone. Qudian raises $900M in biggest listing by Chinese fintech firm. BBVA focuses on U.S.-Mexico remittances with money-transfer app. New Zealand paves path for robos. SoftBank considering second fund launch.
- Today’s main analysis: Goldman goes after Prosper, Lending Club.
- Today’s thought-provoking articles: 2017: the year of VC ‘mega-round’. Is growth of P2P lending sustainable? Zopa trades more risk for same reward. Qudian IPO feeds debt-hungry Chinese millennials. Will fintechs hurt GCC bank profitability?
- LendingHome secures $57M, surpasses $100M in monthly loan volume. AT: “Congratulations.”
- 2017 shaping up to be the year of VC mega-round. AT: “It’s certainly looking that way.”
- Goldman puts Lending Club, Prosper on its radar. AT: “Goldman Sachs is the legacy player to watch. With their financial might, they will likely be the digital banking force to beat in a few short years. If the Big 4 tech companies go fintech, Goldman could make the fifth giant in a land of global digital tidal forces. This is a must-read analysis from CB Insights.”
- KBRA assigns preliminary ratings to Prosper Marketplace Issuance Trust, Series 2017-3.
- Quicken Loans, eOriginal partner on next phase of online mortgage process.
- Modo breaks silence on new payment event data service.
- J.P. Morgan to buy WePay. AT: I’ve wondered when J.P. Morgan would get in on the acquisition game. Depending on how it’s managed, this could be a huge boon to Morgan’s banking business.”
- Bank of America (BofA) processed $4M in Zelle payments in Q3.
- BofA, Wells Fargo growing digitally.
- Arizona real estate gets crowfunding.
- Is there anything new about the new lenders?
- P2P mortgage lending could be game changer for millennials.
- Digital Asset Holdings closes $40M Series B round.
- AlphaPoint to deliver enterprise-ready blockchain platform with Intel security tech.
- IBM using blockchain in countries with weak banking.
- Are fintechs charging minorities more for business loans?
- True Link offers financial advice to retirees on the phone.
- There’s a new stock exchange on the block.
- Blockchain brands.
- Lending Club makes United Airlines frequent flyer deal even better.
- CB Insights partners with Fortune Magazine.
- RateSetter says FCA approval just a milestone.
- Is growth of P2P lending sustainable?
- Zopa takes on more risk.
- Small scale housebuilders: What support do they need?
- Qudian raises $900M in U.S. IPO.
- Qudian IPO feeds debt-hungry Chinese millennials.
- Qudian going public.
- LCQ22: Promoting equity crowdfunding in Hong Kong.
- BBVA launches money-transfer app to focus on U.S.-Mexico remittances.
- Ripple partners with Gates Foundation on financial inclusion.
- Securities at the crossroads.
- GoldMint and the future of gold.
- New Zealand opens the door for robo-advice. AT: “This is interesting. They don’t change the standing rule that financial advice must involve a human. Instead, they offer robos an exemption from the rule.”
- Financial Markets Authority okays robos.
- Banks get their robos ready.
- Applications for robos open in 2018.
- Lenden Club gets Rs 3.5 cr in equity investment.
- Whither P2P lending by non-banking financial companies?
- United States
- LendingHome Surpasses $ 100 Million Mark in Monthly Loan Volume & Secures $ 57 Million During Series C-2 Funding Round (Crowdfund Insider), Rated: AAA
- 2017 shaping up to be the year of the venture capital ‘mega-round’ (Biz Journals), Rated: AAA
- Goldman Attacks Lending Club & Prosper, Courts Main Street (CB Insights), Rated: AAA
- KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2017-3 (BusinessWire), Rated: AAA
- Quicken Loans and eOriginal Partner on Next Phase of the Digital Mortgage Revolution (PR Web), Rated: A
- Modo Emerges From Reverse Stealth With New Service For Payment Event Data (Business Insider), Rated: A
- J.P. Morgan to buy payments firm WePay in first major fintech acquisition (Fox Business), Rated: A
- Bank of America processed $ 4 billion in Zelle payments this quarter (Tearsheet), Rated: A
- Digital growth stands out for Bank of America and Wells Fargo (Business Insider), Rated: A
- Crowdfunding comes to Arizona real estate (Biz Journals), Rated: A
- Is There Anything New About New Lenders? (Seeking Alpha), Rated: A
- P2P mortgage lending could be a game changer for Millennials (The Mortgage Reports), Rated: A
- $ 40 Million: Digital Asset Holdings Closes Series B Fundraising (Coindesk), Rated: A
- AlphaPoint Utilizes Intel Security Technology to Deliver Enterprise-Ready Blockchain Platform (AlphaPoint Email), Rated: A
- IBM is using the technology behind bitcoin to help businesses in countries with weak banking systems (Business Insider), Rated: B
- Are fintechs charging minorities more for business loans? (American Banker), Rated: A
- Retiree robo shuns app, still lands $ 8M funding (FinancialPlanning), Rated: A
- Silicon Valley Vs. Wall Street: Can the New Long-Term Stock Exchange Disrupt Capitalism? (WSJ), Rated: A
- Block brands (CB Insights Email), Rated: A
- Lending Club Sweetens the United Airlines Frequent Flier Promotion (Lend Academy), Rated: B
- whoa: blockchain, blockchain, blockchain (CB Insights Email), Rated: B
- United Kingdom
- Peer-to-peer lender RateSetter gets stamp of approval from UK financial watchdog (Business Insider), Rated: AAA
- The Growth of P2P Lending: Is It Sustainable? (The Market Mogul), Rated: AAA
- Zopa: more risk, same reward (FT Alphaville), Rated: AAA
- Starting small: what support do small scale housebuilders need? (Prospect Magazine), Rated: A
- Qudian raises $ 900 mln in biggest U.S. listing by a Chinese fintech firm (Fidelity), Rated: AAA
- Qudian IPO feeds debt-hungry Chinese millennials (The Star), Rated: AAA
- China’s Qudian is about to go public and it could be the largest Chinese listing in the US this year (CNBC), Rated: A
- LCQ22: Promoting equity crowdfunding activities in Hong Kong (7th Space), Rated: A
- European Union
- Citi fosters Israeli fintech to meet changing needs of financial sector (The Times of Israel), Rated: AAA
- Spanish bank launches money-transfer app focused initially on US-Mexico remittances (TechCrunch), Rated: AAA
- Ripple & the Gates Foundation Team Up to Level the Economic Playing Field for the Poor (Ripple), Rated: A
- Securities markets: standing at the crossroads (Banking Technology), Rated: A
- GoldMint and the Future of the Gold Trade (Bitcoin Magazine), Rated: A
- Australia/New Zealand
- ‘Robo’ financial advice on the way (Radio NZ), Rated: AAA
- FMA fast-tracks personalised robo-advice with exemption (NZ Herald), Rated: A
- Banks readying their roboadvisers (Stuff), Rated: A
- FMA allows personalised robo-advice; applications open early 2018 (FMA), Rated: B
- P2P lending platform Lenden Club gets Rs 3.5 cr in equity investment (India Times), Rated: AAA
- Whither P2P lending by NBFC’s (Bar and Bench), Rated: A
- SoftBank in talks to raise second, possibly larger than $ 100b, fund (Deal Street Asia), Rated: AAA
- Middle East
- S&P says fintech revolution unlikely to hurt GCC bank profitability (The National), Rated: AAA
- Fintech threatens Gulf bank jobs (Arab News), Rated: A
- Lending Loop invests in Canadian board game cafe chain (P2P Finance News), Rated: AAA
- Amfil Technologies Inc. Provides Update on Audit Completion, Uplisting / Dividend, Franchising and General Company Operations (Marketwired), Rated: A
- Web’s creator to fintech players: Beware the blockchain Frankenstein (American Banker), Rated: A
LendingHome Surpasses $ 100 Million Mark in Monthly Loan Volume & Secures $ 57 Million During Series C-2 Funding Round (Crowdfund Insider), Rated: AAA
Less than a week after announcing its new office in Pittsburgh, real estate marketplace lending platform LendingHome announced it has surpassed $100 million in monthly loan volume and secured $57 million during its Series C-2 funding round, which included participation from Sberbank and Noah Holdings Limited.
The online lender also revealed the closing of the LendingHome Opportunity Fund II, which was managed by LH Capital Management, with $100 million in commitments from more than 40 investors including asset managers, international funds, family offices, and high net worth individuals. An additional credit facility of up to $300 million brings the fund’s total potential assets to $400 million.
2017 shaping up to be the year of the venture capital ‘mega-round’ (Biz Journals), Rated: AAA
Georgia companies scored the most venture dollars in the third quarter, since first quarter 2000. Fintech Kabbage and access management technology firm Core Security raised a combined $450 million, or about 60 percent of total venture capital invested in Atlanta companies in the third quarter.
Goldman Attacks Lending Club & Prosper, Courts Main Street (CB Insights), Rated: AAA
As its bond trading revenue plummets, Goldman has undergone a major strategic shift, looking to grow the revenue opportunity from its consumer digital finance operation.
Goldman Sachs has changed a lot through its 148-year history. But as technology continues to roll through the financial services industry, Goldman is one of the few bulge bracket banks today that is staking its reputation and future on new strategic bets in digital finance.
When Goldman announced it would be entering the online lending business in 2015, Lending Club‘s then-COO Scott Sanborn quipped, “We are looking forward to competing with Goldman Sachs on customer experience.” More recently, when Goldman bought $2.8B worth of bonds held by Venezuela’s struggling central bank at a 70% discount to market price, Ribbit Capital founder Micky Malka tweeted, “This is why @GoldmanSachs won’t become a consumer first brand.”
- 46% of Goldman Sachs job postings are in technology.
- Goldman Sachs’ online lending arm Marcus lent $1 billion in the first 8 months of operation. Now it is taking its digital finance brands global.
- Goldman Sachs is one of the top two most active US bulge bracket banks investing in fintech startups.
- Goldman has pushed investments into Brazil.
- Goldman made its first fintech acquisition in 2016 and is looking for more.
- Goldman’s cryptocurrency patent made headlines, but most of its patents have focused on improving its systems.
BACKGROUND ON CORE GOLDMAN SACHS
Goldman Sachs makes money in five primary areas: investment banking, equities, investment management, investing & lending, and FICC client execution.
Digital finance initiatives
Notably, Goldman seems to believe that its digital consumer lending and deposit platform has as large of a net revenue growth opportunity as its FICC trading unit. This is a remarkable shift in strategy that only materialized in the last three years, and the strategy is still in the extremely early innings of its growth potential for Goldman.
Another advantage Marcus has over other bank incumbents looking to launch a competing initiative is its non-legacy IT architecture and the fact that Goldman does not have an existing consumer credit card business for Marcus to cannibalize.
Marcus reportedly passed $1B in loan origination in its first 8 months and is expected to originate $2B by the end of 2017. While data on number of loans doled out is hard to find, Goldman reached its first billion in consumer loans significantly faster than competing online personal loan companies (Lending Club launched in 2007). At the CB Insights Future of Fintech conference, Talwar noted that Marcus’s average loan size was “around $14,000.”
KBRA Assigns Preliminary Ratings to Prosper Marketplace Issuance Trust, Series 2017-3 (BusinessWire), Rated: AAA
Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Prosper Marketplace Lending Issuance Trust 2017-3 (“PMIT 2017-3”). This is a $501.05 million consumer loan ABS transaction.
This transaction represents the eighth securitization collateralized by unsecured consumer loans originated through the online marketplace lending platform operated by Prosper Funding LLC (“Prosper” or the “Company”).
Preliminary Ratings Assigned: Prosper Marketplace Issuance Trust, Series 2017-3
|Class||Preliminary Rating||Expected Initial Class Principal|
Quicken Loans and eOriginal Partner on Next Phase of the Digital Mortgage Revolution (PR Web), Rated: A
eOriginal, Inc. and Quicken Loans today announced a partnership to complete the final steps of the online mortgage process – to digitally create an electronic note, and securely store it as an authoritative copy with delivery to both custodians and the secondary market. This advancement accelerates the time between origination and replenishment of capital.
Quicken Loans, the country’s largest online mortgage lender, closed more than $7 billion in mortgage volume through Rocket Mortgage, the nation’s first fully online mortgage process, in 2016 – its first full year in market. The rapid growth of Rocket Mortgage comes from its appeal to a new generation of homebuyers. In fact, two-thirds of Rocket Mortgage clients used the online process to finance a home purchase, and 80 percent of those consumers were first-time home buyers.
Modo Emerges From Reverse Stealth With New Service For Payment Event Data (Business Insider), Rated: A
Modo, the payments fintech working with Bank of America Merrill Lynch, Alliance Data, FIS, Verifone, and Klarna, today announced they’re ready to break their self-imposed silence and discuss the work they have been doing to deliver innovative payment solutions for their clients in Q4 2017.
Modo has already announced support for three payment event types, in diverse areas of payments with Klarna, Verifone and FIS, and Bank of America Merrill Lynch (respectively):
- Payout Events: Enable your corporate and commercial customers to send money globally using the ever growing number of digital wallets to accelerate the last mile of disbursements.
- Checkout Events: Checkout anywhere, using any method of payment. Whether you are a merchant or a payment provider, offer consumers any way to pay.
- Loyalty Events: Earn and burn loyalty in entirely new ways in entirely new experiences. Combine multiple rewards and loyalty programs to make a purchase or send a gift.
J.P. Morgan to buy payments firm WePay in first major fintech acquisition (Fox Business), Rated: A
J.P. Morgan Chase & Co. (JPM) said that it agreed to buy payments company WePay Inc. in the bank’s first sizable acquisition of a financial-technology startup.
The banking giant plans to roll out WePay’s technology to J.P. Morgan’s four million small-business customers, said Matt Kane, CEO of Chase Merchant Services. WePay, which has roughly 200 employees, helps online marketplaces and crowdfunding websites like GoFundMe process payments.
The two companies didn’t disclose terms of the deal. But a person familiar with the matter said the price was above the roughly $220 million valuation that Redwood City, Calif.-based WePay achieved in a 2015 fundraising.
Bank of America processed $ 4 billion in Zelle payments this quarter (Tearsheet), Rated: A
Bank of America processed $4 billion in Zelle transactions in the third quarter of 2017 alone, CEO Brian Moynihan reported on the bank’s earnings call Friday morning. Digital payments volume increased nine percent to $324 million. Within that, person-to-person payments growth was about 67 percent with the addition of Zelle this summer, reporting 13.6 million transactions and $4 billion in volume. The bank recently processed half a billion dollars in a single week, Moynihan said.
The bank’s digital users grew 5.2 percent to 34.5 million on a year-over-year basis. Mobile banking users grew 10.8 percent to 23.6 million.
Over at Wells Fargo, CEO Tim Sloan said during that earning call that third-quarter peer-to-peer payments increased 46 percent, but didn’t provide a Zelle-specific number.
Digital growth stands out for Bank of America and Wells Fargo (Business Insider), Rated: A
Although the imminent death of the bank branch is being drastically overstated, if the Q3 earnings of Wells Fargo
- Active digital customers, which include both online and mobile users, grew 2% YoY to reach 27.8 million.
- Active digital customers, which include both online and mobile users, grew 2% YoY to reach 27.8 million.
Crowdfunding comes to Arizona real estate (Biz Journals), Rated: A
Crowdfunding ventures raise $34 billion annually in the U.S.
Is There Anything New About New Lenders? (Seeking Alpha), Rated: A
At many times in history there have been finance companies that made loans that banks chose not to make. Such finance companies have thrived in good economic times and tended to fail in major recessions. I predict the same will be true of the newer editions.
But second, let us ask why are the banks not making these loans? The answer is simple. The combination of the costs of marketing and administration and the credit risk is too great to make money on a consistent basis. Therefore the banks are funding a large part of the loans by lending to the lenders and taking a senior position, cushioned by the equity of other investors and shielded from the marketing and loan acquisition costs (as well, perhaps, as some of the consumer regulatory risks). Smart banking, it seems to me. The banks have a lower cost of funds than the new lenders, so they can make money at a lower effective interest rate on the money they lend, so long as it is safer.
I have been shocked at the levels of expenses being incurred by some of the new lenders.
P2P mortgage lending could be a game changer for Millennials (The Mortgage Reports), Rated: A
Not finding a mortgage lender you like? Try borrowing from a friend – or several of them – instead. According to reports, a new platform called Celsius could make P2P mortgage lending a viable option.
Using blockchain technology, Celsius is in the process of building a peer-to-peer lending network specifically aimed at the Millennial market. According to Alex Mashinsky, founder of the company, the platform will allow younger buyers to secure funding using their social circle, rather than big banks and financial institutions.
So how will it work? To start, each user creates a digital profile. They’ll need to upload FICO scores, online transaction histories and other non-traditional financial data. Then, Celsius will assign each profile a credit score that’s unique to the site.
To protect lenders, Celsius will offer insurance that covers a percentage of the principal loan amount in case of default.
$ 40 Million: Digital Asset Holdings Closes Series B Fundraising (Coindesk), Rated: A
Digital Asset Holdings LLC has raised $40 million in a Series B round, bringing the enterprise blockchain startup’s total funding so far to $110 million.
AlphaPoint Utilizes Intel Security Technology to Deliver Enterprise-Ready Blockchain Platform (AlphaPoint Email), Rated: A
Today, AlphaPoint announces the AlphaPoint Asset Digitization solution making illiquid assets liquid by facilitating the digitization of assets and launching new markets. AlphaPoint also announces the release of the AlphaPoint TrustedVM, a trusted virtual machine enabled by Intel Software Guard Extensions (Intel SGX) technology which allows smart contracts and blockchain services to run securely.
The latest release of the AlphaPoint Asset Digitization solution with AlphaPoint TrustedVM adds additional enterprise-class capabilities by securing access to information from intermediaries and network participants, thereby enhancing privacy and security to the AlphaPoint Distributed Ledger Platform. AlphaPoint has been working with some of the largest Fortune 100 financial institutions since 2013 to launch markets on blockchain technologies.
Enterprise-ready Blockchain Platform
In collaboration with Intel, the AlphaPoint Asset Digitization solution as designed at its core to help enterprises efficiently deploy blockchain solutions that implement business initiatives with world-class privacy and security. This solution was architected to create Trusted Virtual Machine, or TrustedVM, that leverages the trusted execution environment (TEE) that Intel SGX enables. AlphaPoint’s solution utilizes the security and privacy capabilities of Intel SGX, thereby allowing customers to benefit from several key technology and business advantages:
- Faster time to market – Quickly develop and deploy blockchain applications with proven technology.
- Hardware–enforced privacy and secure consensus – Execution and validation inside the TrustedVM, ensuring data is not visible to any unwanted parties.
- Lower and predictable costs – With linear scalability, this technology improves total cost of ownership (TCO) and operational efficiencies.
IBM is using the technology behind bitcoin to help businesses in countries with weak banking systems (Business Insider), Rated: B
IBM is using the technology behind bitcoin to help farmers and other small businesses in underdeveloped countries participate in global trade.
The companies will use IBM’s blockchain technology to process financial transactions across borders and currencies — a process which is often prohibitively slow and costly for small business owners, especially when they are in developing regions with smaller banking infrastructures.
The project is focused on what Stellar calls “underdeveloped payment corridors” — countries like Samoa and Fiji, where monetary policies, currencies, and economic instability make it difficult for businesses to move money internationally.
Are fintechs charging minorities more for business loans? (American Banker), Rated: A
Minorities are more likely to turn to a financial technology firm when seeking a business loan, but they may pay higher interest rates, according to the preliminary results of a congressional investigation released Monday.
Retiree robo shuns app, still lands $ 8M funding (FinancialPlanning), Rated: A
A fintech startup with no mobile app does a fundraising round. It secures $8 million. How is that even possible?
True Link, a retiree-focused hybrid advice platform, had a simple pitch to investors: elderly clients like the convenience of digital advice, but want to talk on the phone. The firm claims it received 1.6 million client calls last year.
Silicon Valley Vs. Wall Street: Can the New Long-Term Stock Exchange Disrupt Capitalism? (WSJ), Rated: A
Now they are actually doing something about it, by launching a new framework for corporate governance, investing and trading called the Long-Term Stock Exchange. Backed by top Valley figures such as venture capitalist Marc Andreessen and LinkedIn co-founder Reid Hoffman, the LTSE says it plans to seek regulatory approval by the end of this year to become the newest U.S. stock exchange.
Its key feature: a system in which the voting power of shares increases the longer investors own them.
Block brands (CB Insights Email), Rated: A
Lending Club Sweetens the United Airlines Frequent Flier Promotion (Lend Academy), Rated: B
A year ago Lending Club launched a deal for new investors with United Airlines. New investors could earn 1 MileagePlus frequent flier mile for every $2 invested in a new Lending Club account.
Well last week Lending Club sweetened the deal. They basically doubled the amount of miles you can receive. So, instead of 1 mile for every $2 invested it is now 1 mile for every $1 invested. This deal is only valid until January 9, 2018 whereas the last deal had a three year expiration date.
whoa: blockchain, blockchain, blockchain (CB Insights Email), Rated: B
First, we’ve teamed up with Fortune Magazine for a joint review of Blockchain Trends & Opportunities. Robert Hackett of Fortune will be joined by CBI Intelligence Analyst, Arieh Levi.
Peer-to-peer lender RateSetter gets stamp of approval from UK financial watchdog (Business Insider), Rated: AAA
RateSetter applied for full authorisation in October 2015 and cofounder and CEO Rhydian Lewis said in a statement the process has been “a long but positive journey during which we have learnt a lot, improved our infrastructure and implemented important changes, notably making the business more transparent.”
RateSetter has increased the amount of market data it makes public and earlier this month announced plans to simplify early access for investors to their money.
“Authorisation is a milestone but not an end in itself and we look forward to working with the regulator and all stakeholders to continue to deliver good customer outcomes and to grow RateSetter.”
The Growth of P2P Lending: Is It Sustainable? (The Market Mogul), Rated: AAA
According to data gathered by AltFi lending volumes through P2P platforms achieved a staggering compounded annual growth rate of 110% between 2011 and 2016 and shows little sign of letting up this year.
However, there are some indications this honeymoon period for the industry may be over as the UK’s inflation rate hit 3.0% last month piling pressure on the Bank of England to raise interest rates. This is an understandable worry for the industry, as much of the lending it facilitates is higher risk than that of the traditional banking sector.
Furthermore, there are several emerging industry trends, which are likely to boost its resilience to deteriorating economic circumstances.
- Consolidation- While nearly 100 platforms are operating in the UK a resilient oligopoly is emerging. This is made up of the markets four largest lenders: Zopa; Funding Circle; LendInvest and Rate Setter who cumulatively facilitate over 70% of lending volume.
- Securitisation – Previously, P2P platforms lacked the scale to make securitisation economic and this new trend will likely provide a further edge to the industries established participants.
Zopa: more risk, same reward (FT Alphaville), Rated: AAA
Zopa, the world’s oldest “peer-to-peer” lender, has long focused on low-risk borrowers. The weighted average interest rate the 12-year-old company charges its British customers has never gone higher than 10 per cent and was as low as 5.6 per cent in 2013. While startups like Wonga focussed on the high returns available from borrowers who are under-served by financial institutions, Zopa has largely competed at the “prime” end of the spectrum with high street banks. The returns are lower, but so too are the risks, including to its reputation.
In recent years, Zopa has added riskier borrowers to help drive growth. (It’s worth saying that it is still miles from Wonga territory.) The weighted average interest rate across its portfolio has grown from 5.8 per cent in 2014 to almost 8.8 per cent in 2017:
Zopa has been taking on more risk to achieve pretty much the same returns as when it made fewer risky loans.
Starting small: what support do small scale housebuilders need? (Prospect Magazine), Rated: A
Britain has seen its population of small housebuilders shrink by 80% in a single generation as market dominance has passed to an entrenched group of major players – among the top 10 UK housebuilders, none was founded after 1990. The disappearance of small and medium-sized housebuilders from the UK – defined as companies that complete between one and 100 units a year – has seen their numbers fall from more than 12,000 in the mid-1980s to about 2,400 today, according to research by the non-bank mortgage lender LendInvest.
Qudian raises $ 900 mln in biggest U.S. listing by a Chinese fintech firm (Fidelity), Rated: AAA
Chinese online micro-credit provider Qudian Inc said it raised about $900 million in an IPO that priced above expectations, underscoring robust U.S. investor demand for fast-growing Chinese companies.
The offering from Qudian represents the biggest-ever U.S. listing by a Chinese financial technology firm. It is also the most high-profile company to take part in a resurgence of U.S. listings by Asian firms this year.
Qudian IPO feeds debt-hungry Chinese millennials (The Star), Rated: AAA
Qudian , an online microlender backed by e-commerce giant Alibaba’s financial unit, priced its U.S. listing above its expected range on Tuesday, says Reuters.
It offers fast growth, low default rates and, unlike many tech startups, is already profitable. At $24 per share, the final price represents a 2018 PE of 13.8, compared to 13.0 for smaller U.S.-listed online lender Yirendai.
China’s household debt relative to income is still low, and consumer credit is underpenetrated at 7 percent of gross domestic product, versus 20 percent in the United States, says Goldman Sachs.
Backed by Alibaba’s Ant Financial, Qudian lends cash to young Chinese consumers such as white collar workers, and advances credit so they can buy goods online and pay for them in monthly installments. The company provided $5.6 billion to 7 million active borrowers in the first half of 2017.
The sale of 37.5 million shares in Qudian has already raised about $900 million, making it the biggest U.S.-listing by a Chinese company this year, the report said. The offering values Qudian at as much as $7.9 billion, the report added.
China’s Qudian is about to go public and it could be the largest Chinese listing in the US this year (CNBC), Rated: A
Online micro-lending company Qudian is about to go public at the New York Stock Exchange on Wednesday, and it’s set to be one of the largest U.S.-listed floats by a Chinese company this year.
In its prospectus, Qudian said it was offering 37.5 million American Depository Shares with a float price range of $19-$22 per share. The company said it could offer up to 43.1 million shares if underwriters exercised an option.
LCQ22: Promoting equity crowdfunding activities in Hong Kong (7th Space), Rated: A
In recent years, raising funds through crowdfunding activities is becoming increasingly popular among enterprises worldwide, and the governments of quite a number of countries have introduced legislation to regulate raising funds through crowdfunding activities. On the other hand, the Financial Services Development Council (FSDC) released on March 18 last year a report entitled Introducing a Regulatory Framework for Equity Crowdfunding in Hong Kong, which explored options for establishing a framework and a regulatory regime to promote and, at the same time, regulate equity crowdfunding activities in Hong Kong. So far, however, the Government has not yet announced any specific measures to promote equity crowdfunding activities.
(1) We note that crowdfunding activities might come in different forms, including equity crowdfunding (ECF) and peer-to-peer (P2P) lending. The regulatory approaches towards these activities vary globally across jurisdictions in view of the nascent nature of the business. While some economies have developed dedicated new regimes, others leverage existing rules to regulate such activities.
(2) At present, parties engaging in crowdfunding activities in Hong Kong (e.g. where the activity involves an offer to the public to purchase securities, including shares, debentures or interests in collective investment schemes, or where the platform offers its own funds to borrowers) may be subject to the provisions of the Securities and Futures Ordinance (Cap. 571), the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) and the Money Lenders Ordinance (Cap. 163), depending on the specific structure and features of the relevant arrangement.
Citi fosters Israeli fintech to meet changing needs of financial sector (The Times of Israel), Rated: AAA
Israeli startup Innovative Assessments (IA) says financial lenders like banks are missing out on huge numbers of potential clients because their criteria for handing out credit are too stringent and do not take the full picture of the client into account.
As a result, banks are effectively cutting themselves off from lending out money to large segments of the population, and many borrowers are denied access to affordable credit.
IA wants to help solve this problem. Banks should not only look at financial information to assess creditworthiness, IA says, but also at personal character, which is a whole new dimension of data that is missing from today’s credit scores. So, IA has come up with an idea to help lenders do this.
IA has developed patent-pending software that uses advanced psychometrics for credit scoring.
“Our algorithms look at people’s preferences towards certain financial behaviors,” added Fine. “And while there are no right or wrong answers, we can also identify people who may be responding insincerely.”
SeerGate, a real-time payments firm, was acquired by MyCheck in May 2015 while Ramat Gan-based Sling, whose platform allows micro-merchants to accept electronic payments from consumers via smartphones, was snapped up by Avante in July last year.
NSKnox has created a Digital Notary based on cooperative software that allows a secure transaction approval for banks and organizations, the company says. The software, which uses algorithms, allows two or more blind witnesses — who are actually financial or other kind of organizations — to help independently authenticate, authorize and detect fraud while verifying business transactions.
A total of 68 startups, including nine in the latest brew, have taken part in Citi’s Israel Accelerator program since it was set up in November 2013 in Tel Aviv.
Citi provides the entrepreneurs access to experts within the company globally to bounce ideas off of and the opportunity to use the bank’s huge infrastructure as beta sites. The banking giant does its mentoring and fostering pro bono, without taking any stakes in the companies it fosters.
The graduates of Citi’s program, which include startups like Paykey, Paybox and Vatbox, have raised a total of $300 million to date, according to data provided by Citi, and there have been two exits, with Sling and SeerGate having been acquired.
Spanish bank launches money-transfer app focused initially on US-Mexico remittances (TechCrunch), Rated: AAA
BBVA, Spain’s second-largest bank that snatched up mobile banking startup Simple for $117 million back in 2014, is now entering the mobile money transfer business with today’s launch of a new app called Tuyyo. The app, which is available on both iOS and Android, is focused on the $73 billion annual market for remittances to Latin America and the Caribbean from the U.S.
However, the service is initially launching with money transfers from the U.S. to Mexico, where the average amount sent by U.S. workers is about $1,900 per year, says BBVA. It also notes that the U.S. to Mexico corridor sees over $27 billion flowing between the countries annually, making it one of the world’s largest.
Ripple & the Gates Foundation Team Up to Level the Economic Playing Field for the Poor (Ripple), Rated: A
Many of the world’s poor in developing countries — nearly 2 billion, according to the World Bank — struggle to lift themselves out of poverty simply because they don’t have a bank account or financial services.
However, a new collaboration supported by the Bill & Melinda Gates Foundation will change that. Ripple, in partnership with Dwolla, ModusBox, Software Groupand Crosslake Technologies, with funding and support from the Gates Foundation, developed a new open-source software called Mojaloop for creating a real-time, interoperable payments platform on a national scale to reach the world’s poor with essential financial tools.
Leveraging the power of the Interledger Protocol (ILP), Mojaloop offers a way for financial providers, governments and mobile network operators to simplify and reduce the cost of developing inclusive payments platforms.
Securities markets: standing at the crossroads (Banking Technology), Rated: A
Financial technology has the potential to radically transform the securities industry. The fast pace of change could lead to disintermediation, according to an Iosco study.
Key trends identified in the report include:
- Greater availability of data
- Exponential growth in computing power allowing the analysis of ever larger data sets
- Broader access to and the decreasing cost of goods and services
- Increasing disintermediation and re-intermediation
- Demographic and generational changes
Innovative fintech business models are disintermediating and re-intermediating certain regulated activities. For example, online equity crowdfunding platforms intermediate share placements and disintermediate stock exchanges and underwriters; peer to peer lending platforms intermediate or sell loans and disintermediate banks and lenders, and robo-advisers provide automated investment advice and thereby disintermediate traditional advisors.
GoldMint and the Future of the Gold Trade (Bitcoin Magazine), Rated: A
Beginning with bitcoin in 2009, cryptocurrencies have also seen their prominence rise due to some of the qualities that they share with gold, the most prominent of which is their scarcity.
With the emergence of today’s digital age, a startup called GoldMint is seeking to alter this trend with a new means of exchange for physical gold, with transactions occurring over a blockchain-based platform.
GoldMint’s platform will leverage the private and individual gold trading market, including potentially the management of larger physical stocks such as those in central banks. It will also deliver an electronic payment solution tethered to physical gold, as well as a gold-backed peer-to-peer lending system.
There are two options for trading GOLD for fiat or cryptocurrencies. First, there is a method for seeking a GoldMint-guaranteed buyback. And second, a loan can be requested. For either option, the process is as follows:
- Through the use of a special app which is not yet available, GOLD can be transferred as collateral to a designated GoldMint account.
- GoldMint utilizes the current price of gold, as set by the LBMA, to fix the rate of a loan.
- GoldMint requires the customer to undergo its know-your-customer (KYC) process as well as consent to GoldMint’s loan terms to receive the loan. Various repayment options for the loan amount and the means of repaying it are then offered.
- If a customer defaults on repayment, their GOLD cryptoassets are transferred to GoldMint.
GoldMint also has a process for converting gold into GOLD tokens and reconverting these tokens into gold for cross-border passages.
‘Robo’ financial advice on the way (Radio NZ), Rated: AAA
The Financial Markets Authority has decided to allow financial services companies to provide so-called “robo-advice” to individuals.
Such methods are widespread around the world, but New Zealand law requires any financial advice to be given by a human adviser, and law changes to allow advice to be given by a computer programmes are not expected to be passed until 2019.
Companies wanting to offer robo-advice will have to apply to the FMA for an exemption.
FMA fast-tracks personalised robo-advice with exemption (NZ Herald), Rated: A
The Financial Markets Authority will let Kiwis access personalised automated financial advice, known as robo-advice, with an exemption kicking in before a legislative overhaul of the sector.
The market watchdog sought feedback on the proposal in June and today decided to expand the range of products robo-advice can cover to include mortgages and personal insurance, it said in a statement. Providers wanting to offer the service will need FMA approval on the good character of directors and officers and satisfy the regulator of their capability and competence. Another round of consultation is needed to finalise the exemption and the FMA is aiming to start the process early next year.
Banks readying their roboadvisers (Stuff), Rated: A
Big banks are planning roboadvice services, but only BNZ has revealed how far advanced it is.
Westpac and BNZ have both told the Financial Markets Authority (FMA) they expect to launch roboadvice services, which could close the “advice gap” by using artificial intelligence (AI) systems to give customers advice on things like KiwiSaver, insurance and mortgages.
The banks’ intentions were revealed in submissions on whether the FMA should use its “exemption” powers to allow roboadvice services to operate despite current law only allowing personalised advice to be given by a human being.
ANZ and Kiwibank’s intentions were blacked out in their submissions, released by the FMA.
Submissions to the consultation focused on a number of themes:
- Strong support for an exemption from the current laws preventing personalised robo-advice.
- Opposition to financial limits and product exclusions.
- Robo-advice should meet the same standards as those that apply to authorised financial advisers (AFAs).
- Exemption applicants should be pre-approved or licensed.
- Exemption conditions should be aligned with new advice regime requirements.
The FMA has decided not to impose financial limits on personalised robo-advice and the eligible product list has been expanded to include mortgages and personal insurance products.
Companies seeking to offer personalised robo-advice will have to provide the FMA with good character declarations for directors and senior managers as well as information showing they have the capability and competence to provide the robo-advice service. The exemption conditions will also be designed so that the robo-advice service is provided in a manner that is consistent with AFA requirements.
A summary of the submissions can be found here. 49 submissions were received by the FMA. 47 are being published.
P2P lending platform Lenden Club gets Rs 3.5 cr in equity investment (India Times), Rated: AAA
Mumbai-based peer-to-peer lending platform Lenden Club has raised $500,000 almost Rs 3.5 crore in equity investment from three major investors Venture Catalyst, Anirudh Damani and an Indian venture capital fund. Venture Catalyst and Anirudh Damani had put in seed investment of Rs 1.5 crore in the company as well in May last year.
Whither P2P lending by NBFC’s (Bar and Bench), Rated: A
The Reserve Bank of India’s notification on peer to peer (P2P) lending issued on October 4 this year (“Regulations”) seems to have only added an element of ambiguity in the minds of stakeholders. Eighteen months since the RBI issued the consultation paper and it is not certain how and whether stakeholder comments have been internalised in the paper.
The definition of a “peer to peer lending platform” as an intermediary providing the services of loan facilitation, may unintentionally bring into the purview, a wide variety of operators. As a literal construct, this does not seem to take into cognizance the various types of business operations in the industry simply because it doesn’t clarify whether this excludes a model that doesn’t provide syndication. Theoretically even an internet search engine, business correspondents and lead generators could fall under this definition.
This must be the first category of Non-Banking Financial Company (NBFC) to not function in the manner in which it has been typically designed. The new Regulations set a precedent to regulate entities as NBFC’s that undertake neither lending nor credit enhancement.
The new Regulations also seem to bring into its ambit, an “off-line” P2P: the very essence for P2P start-ups has been low transaction costs thereby resorting to the online medium for such lending.
SoftBank in talks to raise second, possibly larger than $ 100b, fund (Deal Street Asia), Rated: AAA
Japanese Internet conglomerate SoftBank is in early discussions to launch another fund that can possibly be larger than its existing $100 billion Vision Fund, Recode reported, citing anonymous sources.
The Information, in its report, noted that SoftBank got the right to prevent online lender Kabbage, in which it led a $250-million investment in August, from selling parts of itself, buying other companies, selling stock below a certain price or borrowing money beyond a certain level.
S&P says fintech revolution unlikely to hurt GCC bank profitability (The National), Rated: AAA
The fintech revolution sweeping finance will lessen the profitability of banks in the GCC when it comes to parts of consumer banking – such as money transfers and foreign exchange – but overall it is unlikely to hurt the ability of regional lenders to make money.
The rating agency noted that the GCC banks that it assigns ratings to get about a quarter of their revenues from fees and commissions and foreign exchange gains and, while a big portion that is generated from lending and advisory activities, some of that money comes from transfers and currency exchange.
Investments in technology and digitisation are also timely for UAE banks as profitability has been on the wane in the wake of the biggest oil price slump since the 2008 financial crash. Lenders are fortunate that this country has one of the highest smartphone penetration rates in the world.
Fintech threatens Gulf bank jobs (Arab News), Rated: A
The rising influence of financial technology (fintech) firms in the Gulf could eventually threaten jobs and profitability at the region’s banks, warned ratings agency S&P Global.
“This would push some banks to adjust their operations through increased digitalization, branch network reduction, and staff rationalization,” said Mohamed Damak, S&P Global Ratings credit analyst in the report.
Already, the region’s banks are starting to rethink their business model.
In early October, Mashreq launched one of the region’s first full service digital branchless bank — Mashreq Neo — as well as a new new digital mobile wallet service called Mashreq Pay — that can be used to make purchases around the world.
The Dubai-based bank has also started to use robotics in the third quarter to manage open account trade payments, according to the bank’s Q3 statement.
Lending Loop invests in Canadian board game cafe chain (P2P Finance News), Rated: AAA
LENDING Loop, a Canadian peer-to-peer lending platform, has agreed to finance Snakes & Lattes, a cafe chain where people can play and buy board games.
Amfil Technologies, which owns Snakes & Lattes, said on Tuesday that the financing will be used to fuel the expansion of the brand across North America.
Amfil Technologies Inc. Provides Update on Audit Completion, Uplisting / Dividend, Franchising and General Company Operations (Marketwired), Rated: A
Snakes & Lattes has entered into an EXCLUSIVE partnership with Lending Loop, Canada’s first fully regulated peer-to-peer lending platform focused on small businesses. This partnership will fuel and facilitate the mass expansion of the Snakes and Lattes brand across North America, while simultaneously preserving shareholder value. This is the first time in history that Lending Loop has made a direct partnership to finance a growing company, and they will be conducting a mass marketing/advertising campaign to promote both Lending Loop and Snakes & Lattes.
In contrast, Amfil is collaborating with financial innovator, Lending Loop, to fuel the subsidiary’s growth at a fair market rate with flexible cash repayment terms.
Web’s creator to fintech players: Beware the blockchain Frankenstein (American Banker), Rated: A
Internet pioneer Sir Tim Berners-Lee looks at the fintech landscape today and sees something familiar — a creative ferment that reminds him of the early web. He also sees some mistakes in danger of being repeated.
News Comments Today’s main news: RateSetter receives full FCA approval. PayPal’s market value eclipses American Express’s. Lending Club files 8-K entry into material definitive agreement. Some of Zopa’s loans are up for sale by P2PGI. Hexindai sets terms for U.S. IPO. PolicyBazaar becomes most-funded insurance aggregator worldwide. Today’s main analysis: Big bank earnings, IMF global growth forecast. Betterment vs. Wealthfront. Today’s […]
- Today’s main news: RateSetter receives full FCA approval. PayPal’s market value eclipses American Express’s. Lending Club files 8-K entry into material definitive agreement. Some of Zopa’s loans are up for sale by P2PGI. Hexindai sets terms for U.S. IPO. PolicyBazaar becomes most-funded insurance aggregator worldwide.
- Today’s main analysis: Big bank earnings, IMF global growth forecast. Betterment vs. Wealthfront.
- Today’s thought-provoking articles: Ron Suber declares this the Golden Age of Fintech. Busy quarter in fintech deals. Mortgage startups: Blurring the lines between old and new capital strategies. High income homes hit hardest by UK inflation.
- PayPal nearing market value of Goldman, Morgan Stanley. AT: “PayPal’s steady growth is paying off. This is a company that has stayed true to a long-term vision. Popular in the U.S. it could someday be the world’s favorite payment processor.”
- Ron Suber says we are in the golden age of fintech. AT: “If the fintech age began with PayPal in 1998 and the ‘golden age’ is the middle 10 years, that means the best is yet to come.”
- LendingClub files 8-K for material definitive agreement. AT: “This is a $250M credit facility.”
- Bank earnings of JP Morgan, Citigroup, Bank of America, and Wells Fargo. AT: “Despite fintech disruption, the top banks in the U.S. are doing well.”
- A busy quarter for fintech deals. AT: “This may be the first time I’ve seen P2P lending lumped in with banking.”
- Robo-advisor comparison: Betterment and Wealthfront. AT: “The interesting analysis is AUM vs. AUM. Betterment has a higher total while Wealthfront has a higher AUM per client. But there’s more–a lot more.”
- SoFi hasn’t completely bailed on its bank aspirations. AT: “They evidently believe their chances for getting a banking license will improve if they back up five and punt.”
- Barclays CEO says bank must protect payments business from Apple, Amazon.
- LendingHome to ramp up originations by raising $450M.
- Pefin uses AI for comprehensive financial advice.
- BlueVine rceives $130M in debt financing, business line of credit with monthly payments.
- Fintech moves beyond lending.
- Community banks take swing at fintech collaboration.
- Senate Dems claim Noreika serving as Office of the Comptroller of the Currency illegally.
- Why Trello didn’t fail to become a unicorn. AT: “A profit is a profit. In other words, don’t chase a status symbol; build a business.”
- Companies are owned less and creating more value. AT: “Interesting read. Although not specifically about alternative lending, there is a lesson here for alternative lenders. Digital assets are on the rise, so we’re all in the right place.”
- Congress should fix Madden v. Midland.
- Alt lending’s Achilles heel: reaching low-income consumers.
- Wall Street vet joins PeerStreet.
- Centana Growth Partners hires senior management.
- Kansas goes after student loan scammers.
- RateSetter receives FCA approval. AT: “We’ve been waiting for this for a long time. Congratulations.”
- Some of Zopa’s loans are up for sale.
- High income homes hit the hardest by inflation.
- Welendus receives full FCA approval.
- How Moneyfarm is changing wealth management.
- Collaboration benefits banks.
- Future of Fintech Awards shortlist.
- SMEs ignore credit scores.
- Wonga appoints Epiphany to assist with brand perception.
- PolicyBazaar raises $77M at $500M valuation.
- KrazyBee raises $8M to enter payday lending.
- P2P lending, borrowing limits.
- Markel International launches insurtech platform for Asian market.
- Baker McKenzie poaches partner from Gilber + Tobin. AT: “With experience in P2p lending, securitization, smart contracts, and the blockchain.”
- United States
- PayPal’s Market Value Eclipses AmEx, Nears Morgan Stanley, Goldman (WSJ), Rated: AAA
- Ron Suber: We are in the Golden Age of Fintech (Crowdfund Insider), Rated: AAA
- LendingClub Corporation (NYSE:LC) Files An 8-K Entry into a Material Definitive Agreement (Market Exclusive), Rated: AAA
- IMF Raises Global Growth Forecast, GS Enters Fix-and-Flip, Deep Dive on Big Bank Earnings (PeerIQ), Rated: AAA
- It Was a Busy Quarter for Deals in Fintech (Bloomberg), Rated: AAA
- Robo-Advisor Teardown: How Betterment And Wealthfront Stack Up (CB Insights), Rated: AAA
- Mortgage startups blur lines between old and new capital strategies (National Mortgage News), Rated: AAA
- SoFi Bails On Being A Bank (PYMNTS), Rated: A
- Barclays CEO Says Bank Must Protect Payments Business From Apple, Amazon (Bloomberg), Rated: A
- LendingHome adds $ 450 million to ramp up originations (National Mortgage News), Rated: A
- Pefin Leverages Artificial Intelligence To Provide A Comprehensive Set Of Financial Advisory Services (Superb Crew), Rated: A
- BlueVine Expands Reach With up to $ 130 Million in New Debt Financing, Business Credit Line With Monthly Payments (PR Newswire), Rated: A
- Fintech market moves beyond lending (Financial Times), Rated: A
- Community Banks Take A Swing At FinTech Collaboration (PYMNTS), Rated: A
- SENATE DEMOCRATS CLAIM A TOP BANKING REGULATOR IS SERVING ILLEGALLY IN HIS POSITION (The Intercept), Rated: A
- No, Trello Didn’t “Fail To Build A Billion Dollar Business” (Medium), Rated: A
- Companies Are Owning Less And Creating More Value (Forbes), Rated: A
- Congress Should Fix Fintech Lending Model (Competitive Enterprise Institute), Rated: A
- Fintech’s Achilles heel: Reaching low-income consumers (American Banker), Rated: A
- Wall Street Veteran Joins PeerStreet To Lead Capital Markets Team (BusinessWire), Rated: B
- Centana Growth Partners Expands Investment Team with Senior Hires (BusinessWire), Rated: B
- Kansas AG’s office targeting student loan scammers (WIBW News Now), Rated: B
- United Kingdom
- UK Peer-To-Peer Lender RateSetter Receives FCA Regulatory OK (The New York Times), Rated: AAA
- P2PGI puts portion of Zopa loans up for sale (P2P Finance News), Rated: AAA
- Inflation hitting higher income households hardest (P2P Finance News), Rated: AAA
- Payday P2P lender Welendus receives full FCA approval (P2P Finance News), Rated: A
- Moneyfarm is changing the face of wealth management (City A.M.), Rated: A
- Collaboration brings benefits to business at every level, say bosses (The Yorkshire Post), Rated: A
- Future of Fintech Awards shortlist 2017 (Financial Times), Rated: A
- SMEs are ignoring their credit score (P2P Finance News), Rated: A
- Epiphany appointed by Wonga to help with brand perception (Prolific North), Rated: B
- Chinese peer-to-peer marketplace Hexindai sets terms for $ 58 million min-max US IPO (NASDAQ), Rated: AAA
- European Union
- Credimi: four asset management funds renovate and increase the commitment up to €72.5 million (Credimi Email), Rated: AAA
- Lenddo and EFL Team Up to Lead Financial Inclusion Revolution (Lenddo Email), Rated: A
- Australian banking doesn’t need Google to be competitive (Financial Review), Rated: A
- Online Lender Prospa Forms New Partnership With Retail Marketplace MyDeal (Crowdfund Insider), Rated: A
- PolicyBazaar Raises $ 77M at a $ 500M Valuation (Coverager), Rated: AAA
- Micro-lending startup KrazyBee raises $ 8M, plans to enter payday-loan segment (YourStory), Rated: A
- Lending and borrowing limits on peer-to-peer lending platforms (Livemint), Rated: B
- Markel International Launches Fintech Insurance for Asian Market (Insurance Journal), Rated: A
- Baker McKenzie snags top G+T partner (Australasian Lawyer), Rated: B
- SA’s Retailer Pick n Pay Reaches 200 000 Money Transfer Users (Tech Financials), Rated: AAA
PayPal’s Market Value Eclipses AmEx, Nears Morgan Stanley, Goldman (WSJ), Rated: AAA
PayPal Holdings Inc. PYPL +0.04% vaulted over American ExpressCo. AXP -0.20% in terms of market value this week, punctuating a rally that has pushed up the payments company’s shares by nearly 75% since the start of 2017.
Its market capitalization stands at about $83 billion, nearly double the $47 billion value it had when it spun off from eBay Inc. a little over two years ago.
PayPal, which reports earnings on Thursday, now trades at a multiple of about 32 times forward earnings, according to FactSet. So although its market value is about half that of Mastercard Inc. and about two-fifths that of Visa Inc., its earnings multiple is far dearer. Visa trades around 27 times forward earnings and Mastercard is around 29 times. AmEx, meanwhile, trades just shy of 15 times.
Ron Suber: We are in the Golden Age of Fintech (Crowdfund Insider), Rated: AAA
So what exactly is the “Golden Age of Fintech”?
Ron Suber: Innovation cycles take 50 years. PayPal started it in 1998, Lending Club and Prosper accelerated it in 2006 by giving people reasons to borrow and lend online … similar to how AOL and EBay gave people reasons to go on the World Wide Web in the early internet days. And now we are in the Golden Age of Fintech which is the middle 10 years of the 50 year innovation cycle.
How does this fit with the online lending space? Can early MPL/Online Lenders remain competitive? And what do they need to do to remain competitive?
Ron Suber: Yes, The keys (KPI’s = key performance indicators) continue to be:
A) Loan Performance
B) Equilibrium between capital and borrowers
C) Committed Long term, low cost of capital
D) Unique, diversified and low cost methods of acquiring borrowers
E) Increasing Life Time Value (LTV) with multiple loans and additional products
F) Platform efficiency, customer experience and profitability
G) Scale and Brand.
What is next for you? Was Lend360 really your final appearance as the “Godfather of Fintech”? Or is this the intermission before the next act?
Ron Suber: Lend360 was my last presentation in North America … I am heading back to Australia and Southeast Asia for the remainder of the year … then to Patagonia for a Q1 vacation and then onto Africa to do some teaching about lending and entrepreneurship with Opportunity International (OI). OI provides entrepreneurs around the world with access to loans, savings, insurance and training – tools that empower them to work their way out of poverty…..a hand up, not a handout.
[Editors Note: Ron has created his own “Rewirement” web site available here.
LendingClub Corporation (NYSE:LC) Files An 8-K Entry into a Material Definitive Agreement (Market Exclusive), Rated: AAA
On October 10, 2017, LendingClub Warehouse I LLC (“Warehouse”), a wholly-owned subsidiary of LendingClub Corporation (the “Company” or “Lending Club”), entered into a Warehouse Credit Agreement (the “Warehouse Agreement”) with certain lenders from time to time party thereto (the “Lenders”), a large commercial bank as administrative agent (the “Administrative Agent”), and a national banking association as the collateral trustee (in such capacity, the “Collateral Trustee”) and as paying agent. to the Warehouse Agreement, the Lenders agree to provide a $250 million secured revolving credit facility (the “Credit Facility”) to Warehouse, which Warehouse may draw upon from the Credit Facility closing date until the earlier of October 10, 2019 or another event that constitutes a “Commitment Terminate Date” under the Warehouse Agreement. Proceeds under the Credit Facility may only be used to purchase certain unsecured consumer loans from the Company and related rights and documents and pay fees and expenses related to the Credit Facility.
IMF Raises Global Growth Forecast, GS Enters Fix-and-Flip, Deep Dive on Big Bank Earnings (PeerIQ), Rated: AAA
During an unusual period of global synchronized growth, the IMF raised its Global Growth Forecast for 2017 and 2018 by 10 bps to 3.6% and 3.7%, respectively. The IMF also named nine banks that will struggle to achieve profitability.
In securitization news, Marlette Funding Trust 2017-3 is expected to close at the end of October with $298 Mn in loans. MFT 2017-3 is the fifth ABS from this platform and the fourth on the MFT shelf (the first was on Citi’s CHAI shelf).
In this week’s newsletter, PeerIQ dives into the earnings and loan loss provisions for the major money center banks.
The big money center banks released earnings this week to a mixed reception although YTD stock performance is strong. FICC trading revenues were down year-over-year across the board. ROE levels for the big banks remain mired in the low double-digit area or lower.
- JP Morgan is currently the largest US Bank ranked by total US Deposits, which has grown 9% year over year.
- JP Morgan credit card costs were up about $200 Mn year-on-year driven by the successful Sapphire launch, and higher net charge-offs.
- Q3 2017 provision for credit losses was $1.5 Bn, up from $1.3 Bn in the prior year. Currently at 3.3%, credit card allowance to total loans rose every quarter this year.
- Citi built approximately $500 Mn in card loan loss reserves this quarter:
- $150 Mn from regular seasoning and volume growth.
- $50 Mn from hurricanes and other natural disasters.
- $300 Mn attributable to forward-looking NCL expectations.
- Citi expects NCL rate on branded cards to increase 10 bps in 2018 to 295 bps.
- Citi shifted away from rewards oriented products and more towards value products due to heavy competition in rewards products (see Chase Sapphire Reserve). These cards typically have non-yielding promotional balances in the near term.
Bank of America
- Quarterly profit rose 13% year over year.
- Provision for loan losses increased by nearly 15% quarter over quarter while allowance for loan losses decreased 1.7% over the same period.
- Allowance for loan losses as a percentage of total loans decreased to 1.15% from 1.19% last quarter and from 1.29% last year.
- Wells Fargo was the only reporting bank that had decreasing negative returns YTD and a ROE decline YOY.
- Revenue fell 2% year over year, and Wells is the only reporting bank to have falling revenues.
It Was a Busy Quarter for Deals in Fintech (Bloomberg), Rated: AAA
Traditional Wall Street firms are keeping financial technology humming as they set their sights on developing technologies of their own. The third-quarter saw the second highest financing deal count ever, with 412 total transactions, according to a report from investment bank FT Partners.
Still, some areas are hotter than others. Banking — which includes peer-to-peer lending — and payments reported the most deals in the period. The largest was Softbank Group Corp.’s $250 million investment in online lending startup Kabbage Inc. Payments startups Toast Inc. and Raise Marketplace Inc. were also in the top 10 deals with $101 million and $60 million investments, respectively.
Robo-Advisor Teardown: How Betterment And Wealthfront Stack Up (CB Insights), Rated: AAA
In the battle for assets under management (AUM), incumbent wealth management firms have faced significant pressure from insurgent robo-advisors, as investors have poured over $1.6B into robo-advisors across 151 investments since 2013.
The two largest of these robo-advisors, Betterment and Wealthfront, have collectively raised $405M in aggregate funding to date and have both voiced the long-term goal of going public. Nearly a decade after launch, Betterment and Wealthfront together manage approximately $15.9B of assets for over 495K client accounts.
Some of the key takeaways from our analysis include:
- Betterment continues to outpace Wealthfront in client accounts. As of Q1’17, Betterment managed approximately 330K accounts, nearly 2X as many accounts as Wealthfront (at 165K accounts).
- Wealthfront has a higher growth rate than Betterment. As of their respective filings in Q1’17 and Q2’17, Wealthfront had added 65K accounts, representing 65% growth, while Betterment added 52K accounts and grew 19%.
- Betterment has raised more than 2X the amount of funding as Wealthfront. Betterment has raised $275M total as of its latest investment (a $70M Series E – II round in Q3’17), while Wealthfront has raised $129.5M as of its last funding (a $64M Series D in Q3’14).
- Betterment has taken the lead over Wealthfront for total AUM since 2015.
- Wealthfront has consistently had a higher AUM per client. Wealthfront clients average $40.9K per account, compared to Betterment’s account average of $27.4K.
CLIENT ACCOUNTS: WEALTHFRONT COULD SURPASS BETTERMENT IN 3 YEARS
An analysis of the data shows that while Betterment leads Wealthfront in number of client accounts today, Wealthfront’s higher growth rate suggests that Wealthfront could surpass Betterment within 3 years. Wealthfront added 65K accounts in H1’17, representing 65% growth, while Betterment added 52K accounts and grew only 19% over the same period.
Comparing average AUM per client, Wealthfront has consistently had a higher AUM per client ($40.9K invested per account, vs. Betterment’s average of $27.4K), and as it continues to add additional services like PATH and the portfolio line of credit, that average could grow over time.
ASSETS UNDER MANAGEMENT (AUM): BETTERMENT GROWTH SLOWS
Betterment grew AUM by approximately 13% since their last filing, their slowest quarter for growth. Again, this comes on the heels of the backlash against changes in Betterment’s fee structure in Q1’17. In contrast, Wealthfront set a new record for AUM growth in Q2’17, adding approximately $1.76B in AUM since the previous quarter. This was Wealthfront’s largest quarterly dollar increase in AUM.
Mortgage startups blur lines between old and new capital strategies (National Mortgage News), Rated: AAA
Marketplace lending is, in many respects, an evolution of the privately funded mortgage market, which has co-existed with mainstream lenders without posing much threat for years.
Technology used by marketplace lenders offers deeper insights and transparency into transactions, while more easily connecting investors and borrowers in disparate locations.
LendingHome has raised $110 million in venture capital since it was founded in 2013 and is looking for more. It’s done six bridge-loan securitizations totaling $183 million and has a marketplace lending vehicle where accredited investors can purchase fractional interests in loans.
This suggests that the legacy of fintech and marketplace lenders will not be defined by drawing lines between this new breed of lenders and mainstream incumbents, but rather by how those lines are blurred.
Income&, while reaching out directly to investors, is working to serve retirees potentially more interested in accessing the mainstream mortgage market’s lower-risk cash-flows than taking on more risk in order to reach for yield the way marketplace lenders’ investor bases tend to.
The company structures the investments through a twist on traditional securitization.
SoFi Bails On Being A Bank (PYMNTS), Rated: A
“With SoFi’s leadership in transition, we’re withdrawing our application with the FDIC for now,” SoFi spokesman Jim Prosser said in a statement to Reuters. “A bank charter remains an attractive option when the time is right. This decision does not change our plans to make deposit accounts available through partner banks in the near future.”
Barclays CEO Says Bank Must Protect Payments Business From Apple, Amazon (Bloomberg), Rated: A
Barclays Plc will need to defend its advantages in the payments business from encroachment by technology companies including Amazon.com Inc. and Apple Inc., according to Chief Executive Officer Jes Staley.
LendingHome adds $ 450 million to ramp up originations (National Mortgage News), Rated: A
A fund LendingHome began setting up earlier this year raised $100 million in commitments and established a $300 million credit facility that brings its total potential assets to $400 million.
LendingHome Opportunity Fund II is committed to buying more than $1 billion in high-yield bridge loans over a two-year period, but the company also will continue to sell loans to other investors through other existing channels.
Pefin Leverages Artificial Intelligence To Provide A Comprehensive Set Of Financial Advisory Services (Superb Crew), Rated: A
Q: Catherine, what is Pefin?
A: Pefin understands a user’s complete financial situation, including their current spending patterns, their debt and investments and their goals. An interactive chat experience helps users plan for life events that matter to them- like buying a home, having kids, sending them to college, and retiring in comfort. Pefin then incorporates the economy, markets, social security rules, federal and state taxes and much more to craft a thorough financial plan tailored to each user, showing the affordability of their plans. It provides ongoing advice on how they can save to achieve their plans, when they should repay debt, and whether investing is appropriate. If it is, Pefin also offers investment advice and portfolio management services through its SEC regulated subsidiary, Pefin Advisors. Pefin does not require that users invest through its platform, but if they choose to do so, it tailors each portfolio to help users achieve their plans.
Q: Who are the primary users of Pefin and what are some of the key challenges you are helping them solve?
The typical human advisor charges between $2,000 – $,5000 for a one-time financial plan and being static, it is obsolete moments after it is created. Robo-Advisors, while affordable, are unable to offer a comprehensive financial plan, instead focusing on recommending a generic portfolio (one of 10 or so static investment portfolios), primarily based on a risk level the user picks. Pefin’s AI stays on top of 2-5 million data points per user and updates plans real-time, ensuring the advice users receive is current and anything but generic. And Pefin does all this, for $10 a month. As for investments, Pefin requires no minimum investment size, and fees are 0.25% of assets under management, with the first $5,000 managed for free.
Q: Can you give us more insights into your Artificial Intelligence powered solution?
The neural network understands these financial rules and relationships, and propagates them forward in time, up to 80 years depending on the age of the client. The network starts with a user’s current finances and projects how they change over time with market conditions, inflation, taxes, government rules, and their plans. For any given user, the network evaluates anywhere from 2-5 million data points, depending on the complexity of their financial situation and financial plans are available 24/7.
BlueVine Expands Reach With up to $ 130 Million in New Debt Financing, Business Credit Line With Monthly Payments (PR Newswire), Rated: A
BlueVine is expanding its reach in online business lending with new debt financing of up to $130 million and a new additional line of credit product that allows business owners to make monthly, instead of weekly, payments, over 12 months.
BlueVine secured major funding as the company rolls out a 12-month business line of credit based on monthly payments, a new offering that would make it easier for business owners to meet their everyday funding needs.
BlueVine introduced the new product in response to client requests for a longer-term business line of credit with monthly payment plans. The new financing underscores the fintech pioneer’s commitment to innovation based on customer needs.
The new product gives business owners 12 months to repay each withdrawal in full, meaning lower payments each month.
Fintech market moves beyond lending (Financial Times), Rated: A
Goldman Sachs, arguably the world’s leading investment bank, has not been the greatest success story of recent times. After all the challenges of the 2008 financial crisis and the post-crisis regulatory glut, its profitability has declined sharply.
Today its stock market valuation, though far stronger than most banks, puts it on a so-called price-to-book valuation of 1.1 times. That is to say, its shares are worth 10 per cent more than the value of its net assets.
Compare that with the market’s view of Lending Club, the upstart peer-to-peer lender. Despite a scandal last year founded in slipshod controls, and a fall in the group’s share price from a 2015 high of more than $25 to barely a fifth of that today, it is relatively far more valuable than the Wall Street titan, with a price-to-book multiple of 2.6 times.
All that has yet to follow is a re-rating of Goldman stock — from bank to fintech. Though with barely $1bn of Goldman’s near $1tn balance sheet so far devoted to online lending, it may have a while to wait.
In a sign that the fintech business is maturing into more sophisticated areas, “regtech” is among the fastest-growing areas, accounting for a chunk of applications to the Future of Fintech awards.
Community Banks Take A Swing At FinTech Collaboration (PYMNTS), Rated: A
Community banks are typically a better bet for small businesses in search of a loan, with approval rates higher than those at larger financial institutions. But the latest data on SMB lending in the U.S. suggests a shift is ahead.
Earlier this month, Biz2Credit released its monthly Small Business Lending Index and found that approval rates at large banks increased more than they did at smaller community banks. And while community banks’ SMB loan approval rates are still higher than those at large banks (49.1 percent compared to 24.8 percent, respectively), separate analysis from the Federal Reserve, also published earlier this month, concluded that community banks are beginning to reexamine how small businesses fit into their broader loan portfolios.
The Fed found that small business lending at community banks actually declined in 2016, while SMB lending at big banks increased over the same period.
SENATE DEMOCRATS CLAIM A TOP BANKING REGULATOR IS SERVING ILLEGALLY IN HIS POSITION (The Intercept), Rated: A
SIX SENATE DEMOCRATS have asked the Treasury Department’s inspector general to investigate whether Keith Noreika, head of the Office of the Comptroller of the Currency, is illegally serving in office.
Noreika planned to serve temporarily until Joseph Otting, former CEO of OneWest Bank and Trump’s nominee for the OCC, was confirmed. But that hasn’t happened yet; Otting’s nomination has sat on the Senate calendar for over a month.
Special government employees are limited to 130 days of service over a 365-day period. The OCC contends that the number only refers to business days, meaning weekends can be taken off and Noreika still has until November to go. But “business days” appears nowhere in the statute.
No, Trello Didn’t “Fail To Build A Billion Dollar Business” (Medium), Rated: A
I’ve seen a lot of folks passing around that article about how Trello failed to build a billion dollar business. It’s stunningly obtuse.
The premise is that the software that was sold for a $400m acquisition was a failure because it wasn’t worth $1b.
When Fog Creek spun Trello off as its own entity, the amount of money they raised was $10m. That was the only money they ever raised, and it was all they needed to raise.
For almost anyone with a sincere connection to reality, a $400,000,000 exit is an amazing win.
The “Trello Failed” take is not only wrong…
Really, what is the issue with an exit that large, after a fundraise that small? I believe there’s a level of unicorn fetishism at play here that’s more than a little depressing. To think that on any level a company either reaches a billion dollars or has “failed” is to denigrate the work of entrepreneurs building amazing products and achieving amazing things.
I have no real interest in billion dollar companies. I’m interested in companies that serve their customers, build amazing products and make money. If they happen to reach a billion, that’s great. But getting to a billion is not a goal that keeps me up at night.
Companies Are Owning Less And Creating More Value (Forbes), Rated: A
Although our society and culture are slow to realize it, the assets of yesterday are quickly becoming the liabilities of today. This is true in business and in our individual lives as well.
Digital technology and digital assets, rather than physical things, are giving us options that are newer, faster, cheaper, and more convenient. It appears that today, the less you own, the more have.
By owning less and relying on a network to share the load, they operate more profitably and scale rapidly and inexpensively, trouncing big, established, asset-heavy players.
So, what are we doing in a world where less (stuff) is becoming more (valuable) and access is trumping ownership?
- First, we are lightening our balance sheets, both personal and corporate. People are carefully considering which assets they actually need to own, and what stuff actually creates more value than its cost of ownership.
- Second, we are using our intangible assets, like skills, ideas, technology, and particularly relationships, to serve us in ways never before possible.
- Third, we are identifying our own professional skills and differentiators for the gig economy.
Congress Should Fix Fintech Lending Model (Competitive Enterprise Institute), Rated: A
Originally announced for markup, the Protecting Consumers’ Access to Credit Act of 2017 never made it to a vote. Yet, this is one of the most important bills Congress can pass this session, as it provides a legislative fix to a damaging U.S. Court of Appeals ruling, Madden v. Midland Funding.
Nonbank Fintech lenders are not currently chartered at the federal level. Instead, each Fintech lender is required to charter in each the state in which it originates loans. Each state sets its own regulations with regards to interest rates. Such a patchwork of different regulations means that Fintech lenders often cannot lend to customers in other states at the same interest rates that they lend to their in-state clients. This puts Fintech lenders at a competitive disadvantage, as solely state-chartered firms cannot offer consistent products nationwide that can provide benefits from economies of scale.
Fintech’s Achilles heel: Reaching low-income consumers (American Banker), Rated: A
Over the last decade, fintech companies have launched robo-advisers, digitized lending, improved fraud detection and created virtual currencies. In short, fintech firms have helped change our understanding of what is possible in financial services.
However, the fintech revolution has largely ignored the financial needs of the bottom third of the U.S. population. For instance, fintech companies have so far failed to successfully create an alternative to credit scores for the 51% of people with subprime scores. Secondly, fintech firms have yet to help move our national savings rate in a positive direction. Thirdly, the amount of money that lower-income households have left over every month after paying their expenses is still declining despite fintech apps’ promise to help people budget. According to data from the Pew Charitable Trusts, the typical low-income household had $1,500 of income left over after expenses in 2004. In 2014, they were $2,300 in the red after expenses.
One explanation: Consumer spending dictates the preponderance of innovation and investment, and spending by 5% of households with the highest income now directs one-fifth of gross domestic product.
AI can help people save more of their paycheck
Close to half of Americans have expenses that equal or exceed their income, making every month a financial balancing act.
A fintech company could use artificial intelligence to identify patterns in someone’s past family financial behavior — both successful and unsuccessful — to recommend an easy-to-follow budget, send reminders or prompts, and eventually, say, help someone consistently lower expenditures and increase savings. Digit, for instance, is one example of a fintech company paving the way to do just that. The digital service mines someone’s checking account data to determine what he or she can afford to save and then Digit automatically transfers that amount into someone’s savings account.
Improve government-issued benefit cards
Each month, 52.2 million Americans receive government benefits — and most of them receive the benefits on a payment card. Most of these payment cards lack associated mobile apps that could make it easier for someone to check balances, track spending or fund savings. The cards also fail to let someone pay utility or phone bills directly.
Peer-to-peer platforms that enable lending between friends and family
Pro-consumer auto and mortgage loan calculators
In 2014, auto loans (29%) and mortgages (28%) were the second and third largest debt categories in America. In a world where visiting two additional mortgage brokers (or getting two more quotes) could save someone over $24,000 over the lifetime of their loan, the lack of clarity and understanding when people are signing their loan documents is reprehensible.
Wall Street Veteran Joins PeerStreet To Lead Capital Markets Team (BusinessWire), Rated: B
PeerStreet, an award-winning platform for investing in real estate backed loans, is excited to announce the appointment of Louis Nees as Head of Capital Markets. He will be based in the firm’s headquarters in Los Angeles, California.
In this role, Nees is responsible for leading PeerStreet’s Capital Markets team, which plays a crucial part in interfacing with the growing number of investors seeking to invest in loans on PeerStreet. The company recently surpassed half a billion in cumulative loans funded, all with zero losses to investors, and monthly origination volumes now reach above $50 million.
With his deep Wall Street background, Nees will provide key guidance on multiple and varied capital sources for PeerStreet.
Centana Growth Partners Expands Investment Team with Senior Hires (BusinessWire), Rated: B
Centana Growth Partners (Centana), a unique growth equity firm focused on the future of financial services, today announced an expansion of its investment team with the hiring of Tom Davis, Principal, and Matthew Alfieri, Vice President. Mr. Davis and Mr. Alfieri join the firm after the successful close of its $250 million fund earlier this year.
Mr. Alfieri joins Centana from Goldman Sachs where he spent nine years, most recently as a Vice President with the Principal Strategic Investments team, where he invested in financial technology and enterprise technology companies.
Kansas AG’s office targeting student loan scammers (WIBW News Now), Rated: B
Kansas Attorney General Derek Schmidt is joining the Federal Trade Commission and ten of his colleagues from other states in a coordinated crackdown against student loan scammers.
“The student loan market is the second largest debt market after mortgages,” said Schmidt. “There’s more than $1.4 trillion in outstanding student loan balances around the country.”
Around 42 million Americans have student loan debt.
UK Peer-To-Peer Lender RateSetter Receives FCA Regulatory OK (The New York Times), Rated: AAA
British peer-to-peer lending platform RateSetter on Tuesday said it had received full regulatory authorisation from the country’s Financial Conduct Authority watchdog.
P2PGI puts portion of Zopa loans up for sale (P2P Finance News), Rated: AAA
PEER-TO-PEER investment trust P2P Global Investments (P2PGI) has appointed Deutsche Bank to sell off 31,153 Zopa loans in its portfolio in the latest securitisation activity in the sector.
The bank is offering the loans in three tranches worth £208.9m overall.
The average value is £7,488 with an average interest rate of 7.2 per cent and remaining term of 45.7 months, Deutsche Bank said.
Inflation hitting higher income households hardest (P2P Finance News), Rated: AAA
NEW analysis by investment and financial planning group Tilney has revealed that the wealthiest households have experienced a much higher rate of inflation over the last two decades than everyone else.
In its household inflation index report, Tilney calculated that the top 10 per cent of households – those with incomes above £78,500 a year – have seen overall inflation of 64 per cent since 1997. That’s compared to 50.7 per cent for typical households (those with incomes of £26,900 to £30,000 a year) and 53.8 per cent for the lowest income families (less than £10,400).
Inflation has grown sharply in recent months, hitting a higher-than-expected 2.9 per cent in August, making it ever more difficult to savers to find an inflation-beating return from conventional savings accounts, adding to the allure of the peer-to-peer lending market.
Payday P2P lender Welendus receives full FCA approval (P2P Finance News), Rated: A
WELENDUS, the peer-to-peer payday lender, has received full authorisation from the Financial Conduct Authority (FCA.)
The milestone comes a year after the company was formed.
The platform, which wants to shake-up the payday lending market by offering more reasonable interest rates than its competitors, launched a crowdfunding campaign on Seedrs in January to raise £300,000, but closed that campaign two weeks ago and instead started a new one to raise £100,000.
Moneyfarm is changing the face of wealth management (City A.M.), Rated: A
Moneyfarm is one of the new kids on the block. Founders Giovanni Dapra and Paolo Galvani left behind their City careers to set it up in 2011. It’s an app-based digital wealth management platform, which expanded into the UK from Italy last year. Dapra, the firm’s chief executive, is on a mission.
Since moving to London, the business has doubled its user base, now managing £260m in assets across the UK and Italy.
As well as a partnership with Allianz Global Investors, and launching separate partnerships with Uberand Revolut, Moneyfarm is in the process of launching a pension product.
Fewer people are saving into a private pension plan than at any point for the past 60 years. Auto-enrolment has gone some of the way to curing this ill, yet still there is a reluctance to think ahead.
Collaboration brings benefits to business at every level, say bosses (The Yorkshire Post), Rated: A
One banking leader said that the rise of fintech and challenger banks had forced his and other large scale banks to collaborate more widely while all assembled agreed that universities and business leaders should work together more closely for the benefit of students as well as their respective organisations.
Pete Sumners, director of corporate structure finance at Clydesdale Yorkshire Bank, said that recent innovations in disruptive lending technology has meant that the banking sector at large had had to admit it did not have the technology to offer certain services and as such was forced to work with fintech companies: “In terms of banking, not just CYBG, collaboration has been forced on us by competition.
Simon Pilling, partner at Bond Dickinson, agreed that the rise of artificial intelligence had meant professional services had needed to change their business model but that there was still a need for skilled lawyers in all ends of the process.
Future of Fintech Awards shortlist 2017 (Financial Times), Rated: A
There are two categories; the Impact Award is for larger and more established fintech companies, which are starting to have an effect on the financial services industry, while the Innovation Award is for newer fintech companies that are bringing out novel solutions.
Funding Circle, a direct lending platform that connects investors to borrowers, is shortlisted for the second year running for our Impact Award. With valuation of more than $1bn it is one of the UK’s “unicorns” and the largest British online “peer-to-peer” company by cumulative amount lent. More than £3bn has now been lent through the platform, with £1.1bn of that in 2016.
THE JUDGES SAID:
“The company is big enough to be making an impact in small business lending now.”
Ant Financial Services, founded in 2014, is an affiliate of Alibaba, the Chinese e-commerce company.
THE JUDGES SAID:
“This is clearly one of the most innovative and impactful fintech companies of the moment, changing the landscape completely.”
California based Ripple, founded in 2012, has grown to be one of the world’s biggest blockchain networks. It allows businesses to transfer money globally at low cost using its own cryptocurrency XRP.
THE JUDGES SAID:
“This is no longer a prototype. Ripple is actually sending blockchain payments through. Many of these are still test payments but it is further than a lot of others.”
EFL Global provides alternative credit scoring for people who have previously been outside the banking system.
THE JUDGES SAID:
“There were many credit scoring entries and we liked what many of these were doing in terms of giving more people access to finance. However, we particularly liked the way EFL went beyond traditional credit score information.”
Digital Reasoning uses cognitive computing techniques to detect rogue traders at financial services companies.
THE JUDGES SAID:
“We thought this idea was cool. Cutting rogue trader activity and fraud at banks is a serious issue with consequences beyond just the banks themselves.”
Micro finance lending platform QCash Financial was founded by the Washington State Employee Credit Union as an alternative to expensive payday loans.
THE JUDGES SAID:
“We liked this because it was an alternative to payday lending and an instance of an established financial institution doing something innovative.”
Token is creating an open banking platform aimed at making it easier for people, businesses and financial institutions to move money around. Using digital identity and smart tokens it offers a way for people to give third parties access to their account details in a secure and simple way.
THE JUDGES SAID:
“This is solving the problem that PSD2 brings, where banks need to provide APIs to authorised third parties. Token simplifies the many APIs and is already integrating 10 banks into the system.
RSRCHXchange was founded in 2014 as a one-stop-shop for asset management firms to purchase research services from banks, brokers and boutique providers. It will be particularly useful in helping banks comply with the EU’s new Mifid II rules, which come into force at the start of 2018.
THE JUDGES SAID:
This is solving a problem that comes with Mifid II. A more sophisticated solution than others in the market.
Bricklane.com is an online property ISA allowing anyone to participate in the housing market with an initial investment of as little as £100.
THE JUDGES SAID:
“We liked this because it is creating a new product. The founders say the main competitor is cash, with most of their funds coming from people transferring their ISAs.”
Castlight Financial is aiming to prevent another credit crunch by providing a more accurate way to assess what a consumer can afford to borrow. It collects data in real time from customers’ banks accounts, including income and expenditure, and uses these to build a clear picture of a their monthly disposable income. People who may have previously been refused loans because banks had too little data about them may become eligible for credit. Castlight says it can also speed up the mortgage decision process from six weeks to 10 minutes.
THE JUDGES SAID:
“The idea of better credit scoring is attractive and it is significant that the company has made a profit from the first year and has not had to take any financing.”
SMEs are ignoring their credit score (P2P Finance News), Rated: A
ALMOST half (44 per cent) of small- and medium-sized enterprises (SMEs) have never checked their credit score, new research from RateSetter Business Finance shows.
The study, released on Monday, found that a further six per cent have opted against checking their score in the last year, while less than one in five (18 per cent) have checked the score in the last six months.
The peer-to-peer lender pointed out that credit scores are an integral part of establishing whether a business has a decent record of repaying debt, and have a significant impact on their chances of getting further finance.
Epiphany appointed by Wonga to help with brand perception (Prolific North), Rated: B
Leeds search specialist Epiphany has been appointed to help improve the brand perception of payday loan company Wonga.
Epiphany will work in partnership with Wonga’s content agency, Cedar, on brand perception and delivering a customer-first multi-channel content strategy. The agency will also be responsible for driving traffic and enquiries from organic search.
Chinese peer-to-peer marketplace Hexindai sets terms for $ 58 million min-max US IPO (NASDAQ), Rated: AAA
Hexindai, a Chinese marketplace for peer-to-peer lending, announced terms for its min-max US IPO on Monday. The offering is being made on a best-efforts, min-max basis and therefore will not be included in our IPO stats.
The Beijing, China-based company plans to raise at least $30,000,000 by offering a minimum of 2.7 million ADSs and a maximum of 8.9 million ADSs at a price range of $9 to $11. At the midpoint of the proposed range, Hexindai would command a fully diluted market value of $487 million.
Credimi: four asset management funds renovate and increase the commitment up to €72.5 million (Credimi Email), Rated: AAA
Barely a year after the launch, Credimi – the digital financing platform for SMEs that makes liquid the working capital in short time at low costs – has renewed the agreement with the four primary investment funds. They committed up to 72,5M€ to purchase the entire portfolio of commercial credits originated by the fintech platform.
Credimi is a fintech company officially authorized by the Bank of Italy to the public financing activity according to the dispositions contained in the new art.106 of the Banking Consolidated Law. The company will be able to provide funding to SMEs up to €300 million in the next months .
The four partners previously involved, Anima Sgr, Anthilia Capital Partner Sgr, BG Fund Management Luxembourg S.A. and Tikehau Capital, have decided to renew the agreement. Credimi is therefore reinforcing the attractiveness of its notes, which are the among the most profitable and diversified asset class among investments with a comparable risk profile. In fact, the notes combine an average life of the underlying invoices of less than 3 months with a spread around 450 base points and credit losses of 0.3%. Credimi finances hundreds of SMEs with average ticket of 20,000€, creating a low risk, diversified portfolio.
The portfolio subscribed by the four noteholders is untranched and pays a quarterly coupon. Additionally, Credimi continues to keep a stake of around 5% (as fifth noteholder alongside with the other four) to have ‘skin in the game’. This is not requested by law as the note is untranched and is ensured by Credimi to the noteholders on a voluntary basis.
Since launch on the market, Credimi has achieved outstanding results, exceeding initial expectations: €40million of loans have been delivered to Italian SMEs and more than 2.000 invoices have been financed. The same strong results have been obtained with the Supply Chain financing: by signing deals with corporations – such as Ariston Thermo, Jab group (Jimmy Choo and Bally), Pittarosso and few others – Credimi helps large enterprises to finance their suppliers at competitive prices and with an unmatched flexibility.
Lenddo and EFL Team Up to Lead Financial Inclusion Revolution (Lenddo Email), Rated: A
United by the common vision of providing financial inclusion for more than one billion new and underserved individuals across the globe, Lenddo and EFL will together provide a suite of credit scoring and identity verification products to more than 20 emerging markets.
Lenddo and EFL have individually facilitated over 5 million credit assessments since inception, allowing more than 50 financial institutions to disburse over $2 billion USD in credit to people with limited information. The combined company will work directly with banks, telcos, retailers, microfinance institutions and insurers to serve individuals and small businesses.
The first joint product offering goes live in Asia and Latin America today, with additional products and features scheduled for release in the coming months.
Australian banking doesn’t need Google to be competitive (Financial Review), Rated: A
A leading member of Australia’s fintech community has backed the view of veteran bankers that technology giants will be dissuaded from setting up shop in Australia and taking on the big four. But the disrupters see different reasons for Google’s absence.
SocietyOne CEO Jason Yetton said for the tech companies with the resources it wasn’t a question of whether they could disrupt the incumbents but whether they should do so.
In Australia there is a raft of smaller companies looking to carve out their own share of the financial services market including personal loans company Ratesetter, layby purchases Afterpay and online lender Zipmoney.
Tyro is a payments and technology company that also lends to small businesses. It also has Australia’s newest banking licence and is therefore subject to the same oversight as other authorised deposit taking institutions (ADIs).
Online Lender Prospa Forms New Partnership With Retail Marketplace MyDeal (Crowdfund Insider), Rated: A
Prospa, an Australian online lender for small businesses, has formed a partnership with Gandel-backed retail marketplace MyDeal, which will allow retailers on its platform to apply for loans of up to $250,000.
Senvirtne and his MyDeal team will be receiving a 1-2% small commission for every loan that comes through the marketplace.
PolicyBazaar Raises $ 77M at a $ 500M Valuation (Coverager), Rated: AAA
Gurgaon-based PolicyBazaar announced it has raised $77M in a Series E round led by Wellington Management , with participation from IDG Ventures India and True North; to name two. The online insurance aggregator has raised a total of $146.6M since its inception in 2008 and is currently valued at $500M.
According to VCCiRCLE, the company plans to go public by the end of 2018 after breaking even in November 2016.
Micro-lending startup KrazyBee raises $ 8M, plans to enter payday-loan segment (YourStory), Rated: A
On Monday, Bengaluru-based micro-lending startup KrazyBee said it had raised $8 million in a Series A round led by Xiaomi Technologies and Chinese venture capital fund Shunwei Capital. The funding raised was a combination of equity and debt, with participation from Essel Group’s E-City Ventures and RK Group.
The funding announcement comes within a year of the firm raising $3 million pre-Series A round in January from Plum Ventures. Prior to this, KrazyBee had raised a seed round of $2 million in May 2016.
Until July this year, the company claimed they had disbursed 80,000 loans and processed close to 170,000 loan applications. As of October 2017, the company had disbursed close to 150,000 loans and processed above 200,000 loan applications. The founder claims that of this number, 75,000 loans have already matured with steady settlement.
The average size of loans by KrazyBee is around Rs 15,000 with the maximum tenure being 12 months.
Lending and borrowing limits on peer-to-peer lending platforms (Livemint), Rated: B
Many lenders find P2P platforms attractive because of their potential for giving higher returns, compared to fixed and savings bank deposits. In fact, these platforms also market their services by comparing the returns from P2P lending with returns from mutual funds. It is important to note here that these platforms cannot guarantee any return.
Thus, the RBI imposed limits on how much can be lent and how much can be borrowed by individuals from these platforms—to limit the risk exposure of individuals.
If such a person was to take a personal loan from a bank, it would come at 16-17%. Through P2P lending they can get that loan at around 14%. Those with low credit scores typically go to other NBFCs, and get loans at 22-23%.
No borrower can have loans of more than Rs10 lakh, from all the P2P platforms combined; and no more than Rs50,000 from one lender. All loans through P2P platforms come with a payback period that cannot be more than 36 months.
Markel International Launches Fintech Insurance for Asian Market (Insurance Journal), Rated: A
Markel International, the specialist insurer, has unveiled a fintech policy offering comprehensive protection for businesses in the financial technology sector in Asia, having successfully launched it in the UK early last year.
Coverage also extends to the costs involved when sensitive documents or data are lost.
On top of the professional indemnity core cover, the policy offers protection for three additional perils to protect clients against their key exposures:
- Directors’ and officers’ liability cover protects against claims of mismanagement, which could be brought by shareholders, employees, creditors or regulators.
- Theft option covers the insured against the stealing of money or other financial instruments, through both electronic and non-electronic means, including through extortion. It will also cover the cost of rectifying computer systems following a theft.
- Cyber liability and loss cover provides protection if the insured suffers a network security incident, such as a hack, denial of service attack, or a computer virus, and will also cover business interruption losses arising from such an incident. This section includes cover for the cost of rectifying computer systems following a network security incident.
Baker McKenzie snags top G+T partner (Australasian Lawyer), Rated: B
Baker McKenzie has snagged a top partner from Gilbert + Tobin.
In addition to his knowledge in DCM matters, McGrath brings to Baker McKenzie a practice that covers a wide range of areas, including securitisation, leveraged and general finance, peer-to-peer lending, insolvency and restructuring, blockchain, and smart contracts.
SA’s Retailer Pick n Pay Reaches 200 000 Money Transfer Users (Tech Financials), Rated: AAA
South Africa’s Pick n Pay announced on Tuesday that it has 200 000 registered money transfer customers as of 27 August 2017.
The largest online grocery business in Africa is in partnership with digital bank TymeDigital, a subsidiary of Commonwealth Bank, to deliver money transfer.
In line with its plans to launch a digital bank, TymeDigital was recently awarded a banking licence by the South African Reserve Bank, a first in 18 years.
News Comments Today’s main news: Lending Club increases minimum investment to open account. Consumers pay off unsecured personal loans first. American Households Return To Peak Debt, Thanks To Booming Student Loans. RateSetter sells off bad debts. Today’s main analysis: The fast lane to better small business funding. Today’s thought-provoking articles: Consumers pay off unsecured personal loans first. American Households […]
- Today’s main news: Lending Club increases minimum investment to open account. Consumers pay off unsecured personal loans first. American Households Return To Peak Debt, Thanks To Booming Student Loans. RateSetter sells off bad debts.
- Today’s main analysis: The fast lane to better small business funding.
- Today’s thought-provoking articles: Consumers pay off unsecured personal loans first. American Households Return To Peak Debt, Thanks To Booming Student Loans.
- Lending Club increases minimum investment to open account. GP:”I am very surprised by this increase. Many people want to test the waters with $100 , or $200. $25 was surprisingly low but I wonder what is the cost of an account to Lending Club. It should be minimal IT costs. $1000 will probably prevent some people from testing the waters. I do not understand this move. “AT: “This is likely a move to increase stockholder profits. As companies mature, a shift in thinking occurs from attracting new customers and acquiring new accounts to increasing profits and making shareholders happy. This is a natural outgrowth of the company’s success in growing itself into maturity.”
- American Households Return To Peak Debt, Thanks To Booming Student Loans GP:”Very interesting data and trend. A must read and check the charts.”
- The fast lane of better small business funding. GP:”Online lending is on average easier and faster. “AT: “This is an interesting infographic from Lendio that pits marketplace lenders against banks and other traditional lenders.”
- Consumers pay off unsecured personal loans first. GP:”This is again very surprising. A must read as well. Completely counter intuitive and very important for the industry. ” AT: “Very interesting report from TransUnion with a comparison of delinquency rates between personal, auto, credit card, and mortgage loans. A must-read.”
- Why millennials are interested in real estate investing. AT: “Millennials view the stock market and banks with a raised eyebrow. Real estate they can touch. But intangibles? Not with a 10-foot pole. Who can blame them?”
- Juvo appoints Ron Suber as strategic advisor. GP:”Ron receives probably daily requests to become strategic advisor. The fact that he accepted this position puts Juvo in the spotlight for sure.”
- LendingHome hires new CFO, receives Fannie Mae approval. GP:”Congratulations on the Fannie Mae, that’s the cheapest capital you can find. Not all mortgages will be sellable to Fannie Mae but this allows LendingHome to increase origination volumes in standard single family morgages tremendously by leveraging their technology unlike the usual paper bank process. “
- Is Vision 2020 the answer to the OCC Fintech Charter? AT: “Fintech regulation is where Democrats and Republicans can learn to compromise.”
- Fintech lawyers on Vision 2020.
- LendUp, Beneficial State Bank expand partnership. GP:”The take away: a new bank is partnering with fintechs.”
- Addepar to buy AltX.
- Ascentium Capital surpasses $3B in origination volume. AT: “Congratulations.”
- Milwaukee fintech firms aim to help consumers. AT: “I’m seeing more and more news related to local crowdfunding and fintech companies. Evidence that fintech is going mainstream.”
- Redpoint Capital Group names Alex Dunev as managing partner.
- DiversyFund brings new innovations to RECF.
- RateSetter sells of bad debt. AT: “This is a first in the UK. Could this spark a secondary market industry for P2P debt?”
- Landbay intros retention fee for intermediaries.
- Investing in the UK’s growth.
- Notion Capital announces $80M startup fund.
- Why Ford cars are a good alternative investment vehicle.
- Alibaba invests in first fintech in Hong Kong.
- Dianrong announces next tech agreement outside China.
- QuantGroup considers U.S. IPO.
- Regulating online crowdfunding, lending platforms.
- additiv gets $21.3M new capital.
- Lendity: ideal MPL exposure for pension funds, asset managers, family offices, private banks.
- The influence of technology on the future of finance.
- Retirees are riskier investors than millennials. AT: “I’d like to see a similar study in the U.S.”
- NAB’s fintech arm brings robo-advice to home loans.
- United States
- Lending Club Increases Minimum Investment to Open an Account to $1,000 (Lend Academy), Rated: AAA
- American Households Return To Peak Debt, Thanks To Booming Student Loans, (Buzz Feed), Rated: AAA
- The Fast Lane to Better Small Business Funding (Lendio Email), Rated: AAA
- Consumers Place Personal Loans Atop the Credit Mountain (GlobeNewswire), Rated: AAA
- Why Millennials Are Interested In Real Estate Investing (Forbes), Rated: AAA
- Juvo Appoints Financial Services Expert Ron Suber As Strategic Advisor (Juvo Email), Rated: A
- LendingHome Hires New CFO. Receives Fannie Mae Approval to Expand Home Loans (Crowdfund Insider), Rated: A
- Is the CSBS Vision 2020 the Answer to the OCC Fintech Charter? (Crowdfund Insider), Rated: A
- Fintech Lawyers on State Regulators’ Possible Alternative to OCC Charter Plan (Corporate Counsel), Rated: A
- LendUp And Beneficial State Bank Announce Major Expansion Of Credit Card Partnership (PR Newswire), Rated: A
- Addepar To Buy Alternatives Data Provider AltX (Financial Advisor), Rated: A
- Ascentium Capital Surpasses $ 3.0 Billion in Origination Volume (Ascentium), Rated: A
- Milwaukee FinTech firms aim to help consumers (Biz Times), Rated: A
- Redpoint Capital Group Names Alex Dunev as Managing Partner (BusinessWire), Rated: B
- DiversyFund, Inc. Brings New Innovations to Real Estate Crowdfunding (Digital Journal), Rated: B
- United Kingdom
- P2P Lender Sells Off Bad Debts Worth £2.1 Million (iExpats), Rated: AAA
- Landbay introduces retention fee for intermediaries (P2P Finance News), Rated: AAA
- Investing in the UK’s growth when it needs it most (FT Adviser), Rated: A
- London-based VC Notion Capital has announced a new $ 80 million startup fund (Business Insider), Rated: A
- Ford: Wine, watches and cars: the rise of alternative investing (Automotive World), Rated: B
- Alibaba Invests In Its First Fintech Company In Hong Kong (Crowdfund Insider), Rated: AAA
- Dianrong Announces Next Technology Agreement Outside Mainland China (Military-Technologies), Rated: AAA
- Chinese Celebrity-Backed Fintech Firm QuantGroup Considering US IPO (Crowfund Insider), Rated: A
- LCQ5: Regulation of online crowdfunding and lending platforms (7th Space), Rated: B
- European Union
- Older Swiss fintech additiv gets $ 21.3 million in new capital (CNBC), Rated: AAA
- Lendity: ideal marketplace lending exposure for pension funds, asset managers, family offices, private banks (Daily Fintech), Rated: A
- FinTech: the influence of technology on the future of the financial sector (Lexology), Rated: A
- Retirees are riskier investors than millennials, says ASX report (Financial Review), Rated: AAA
- NAB’s fintech arm brings robo-advice to home loans (AltFi), Rated: A
- Robo advisors: Stay relaxed while getting accurate financial advice (DNA), Rated: A
- Middle East
- Abu Dhabi Global Market admits first five fintech start-ups into its Reglab sandbox (CNBC), Rated: B
Lending Club Increases Minimum Investment to Open an Account to ,000 (Lend Academy), Rated: AAA
Until today new investors at Lending Club could open an account with as little as $25. This has now changed. Going forward to open a new account at Lending Club you must deposit $1,000. The $25 minimum investment per loan still applies but you will no longer be able to start an account with less than $1,000.
The reason for this move can be explained in one word: diversification. We have written manytimes before about the importance of diversification and Lending Club has a page on their site dedicated to this topic. With $1,000 investors will be able to invest in 40 notes; while that is still not very diversified it is a lot better than investing in, say, four notes when someone starts with $100.
American Households Return To Peak Debt, Thanks To Booming Student Loans, (Buzz Feed), Rated: AAA
American households are back at peak debt, with new data showing the highest level of household debt since 2008.
Americans now sit on a $12.73 trillion pile of household debt, meaning mortgages, loans, credit cards, home equity lines of credit, car loans, and student debt. That figure previously peaked at $12.68 trillion in the early days of the Great Recession.
Those numbers aren’t adjusted for inflation, and $12.68 trillion 2008 dollars would be equal to more than $14.5 trillion today. And while debt number is at it’s highest ever, the economy has grown significantly in the last nine years, meaning that as a percentage of the total economy, it’s still well below its 2008 high.
“Almost nine years later, household debt has finally exceeded its 2008 peak but the debt and its borrowers look quite different today,” said Donghoon Lee, a Research Officer at the New York Fed. “This record debt level is neither a reason to celebrate nor a cause for alarm.”
The makeup of American household debt has changed in a big way. Back in 2008, people held $10 trillion in housing debt; that has fallen to $9.1 trillion today. In its place, student loan debt has boomed, and car loan and credit card debt also rose.
Home loans have become harder to come by for middle- and low-income buyers in the decade since the housing crisis began. And as the recession kicked into high gear and unemployment spiked, people poured into colleges in huge numbers, looking to weather the storm. That led to a boom in the for-profit college industry — and a soaring national student debt pile.
When household debt peaked in 2008, Americans had $610 billion in student loan debt, about 5% percent of all consumer debt and 23% percent of all non-housing debt. Today, student debt balances have more than doubled to $1.3 trillion, 11% of all consumer debt and 37% of all non-housing debt.
But people are now defaulting on those student loans at at a higher rate than any other form of debt. 11% of all student debt is now more than 90 days overdue, compared to 7.5% for credit cards and 3.8% for home loans.
“The standout, however, has been student loans—with new serious delinquency flows that deteriorated steadily between 2004 and 2014 and have remained stubbornly high since then,” the Fed researchers said.
The Fast Lane to Better Small Business Funding (Lendio Email), Rated: AAA
Consumers Place Personal Loans Atop the Credit Mountain (GlobeNewswire), Rated: AAA
When faced with the choice of which debts to pay and which to miss, consumers in financial distress tend to prioritize unsecured personal loans ahead of other credit products such as auto loans, mortgages and credit cards. These findings were released today during TransUnion’s annual Financial Services Summit, attended by more than 300 senior-level financial services executives from around the globe.
The most recent study incorporates unsecured personal loans for the first time since TransUnion began analyzing the payment hierarchy dynamic in 2010. Beyond personal loans, this most recent analysis is consistent with prior TransUnion studies in finding that consumers have historically prioritized auto loans over their mortgages and credit cards, and have done so consistently since at least the beginning of 2004.
|Personal Loan Delinquencies* Consistently Remain Lower Than Other Loan Types|
|Delinquency* Rates for Consumers Possessing
Auto Loans, Credit Cards, Mortgage Loans and Unsecured Personal Loans
|Year||Personal Loan||Auto Loan||Mortgage||Credit Card|
*Delinquency rates after 12 months for consumers who possess and are current on all four credit products at the beginning of the respective performance measurement period.
Recent TransUnion data show that average term lengths are much shorter for unsecured personal loans. For loans originated in Q4 2016, unsecured personal loans had an average term of 28 months. In this same timeframe, the length of auto loans averaged 60 months and mortgages averaged 230 months.
Why Millennials Are Interested In Real Estate Investing (Forbes), Rated: AAA
RealtyShares recently teamed up with Harris Interactive to put out the Real Estate Investing Report, surveying Americans on their investment preferences. And according to the survey results, 55 percent of millennials are interested in investing in real estate, the highest percentage of all demographics questioned. Research from Fannie Mae supports these findings, reporting that 85 percent of millennials think real estate is a good investment.
According to a recent Pew report, there are 75.4 million millennials compared with 74.9 million baby boomers.
In the RealtyShares survey results, 20 percent of millennials indicated they believe real estate has performed the best since 2000. In fact, millennials were the age group with the largest percentage with that belief. The next highest group to believe real estate outperformed the stock market since 2000 is comprised primarily of Generation X (ages 35–44), 16 percent of whom chose real estate as the top performer.
Millennials, ever-vigilant on the internet, are paying heed to online financial experts. One of these experts especially popular among millennials is personal finance blogger Financial Samurai, who recently shared his preference for investing in real estate over the stock market.
While the large down payment needed to invest in real estate is the biggest reason millennials aren’t buying real estate, thanks to online real estate investing platforms, millennials can now invest in real estate without saving tens of thousands of dollars for a down payment.
Juvo Appoints Financial Services Expert Ron Suber As Strategic Advisor (Juvo Email), Rated: A
Juvo, a pioneer in mobile Identity Scoring, today announced the appointment of Ron Suber, president of Prosper Marketplace, as strategic advisor to the company. An investor in Juvo, Suber is a prolific presence in fintech and is well known as an industry influencer around the world. In his advisor role at Juvo, he will help direct the company through its global growth, ongoing product development and expansion into new markets.
Ron’s appointment helps round out the Juvo advisory team, which includes:
- Nils Puhlmann, leads Juvo’s security and privacy efforts: former Chief Security Officer & co-founder of Cloud Security Alliance
- Vicente Silveira, fraud and risk management advisor: head of fraud data science at Uber
- Allison Duncan, social impact advisor: founder and CEO of Amplifier Strategies
- Ken Laversin, enterprise software/SaaS advisor: senior vice president, worldwide sales at Jasper
- Monica Rogati, data science advisor: equity partner at Data Collective, former VP of data at Jawbone and LinkedIn data scientist
LendingHome Hires New CFO. Receives Fannie Mae Approval to Expand Home Loans (Crowdfund Insider), Rated: A
LendingHome says it is ready to ratchet up platform growth. The marketplace lending platform that finances residential mortgages has made two announcements today.
First, the online lender has announced that former Nationstar Mortgage CFO, Robert Stiles, has been appointed to become LendingHome’s CFO.
Simultaneously, LendingHome has been approved by Fannie Mae as a seller and servicer provider which will enable LendingHome to expand its consumer home financing business, a bit of a big deal.
By working directly with Fannie Mae, LendingHome may streamline operations and offer better loan pricing to its customers.
Is the CSBS Vision 2020 the Answer to the OCC Fintech Charter? (Crowdfund Insider), Rated: A
Earlier this week, the Conference on State Bank Supervisors (CSBS) announced their “Vision 2020” initiative.
The CSBS outlined their initial objectives:
- Redesign the Nationwide Multistate Licensing System (NMLS). CSBS has launched a technology effort that redesigns and expands NMLS, the common platform for state non-bank regulation. The redesign will use data and analytics to provide a more automated licensing process for new applicants, streamline multi-state regulation, and shift state resources to higher-risk cases. State regulators also will ensure transparency through NMLS Consumer Access, which was viewed 3.7 million times last year.
- Harmonize multi-state supervision. CSBS has created working groups to establish model approaches to key aspects of non-bank supervision. The groups will work to enhance uniformity in examinations, facilitate best practices, and capture and report non-bank violations at the national level. To further streamline the process, CSBS will create a common technology platform for state examinations.
- Form an industry advisory panel. CSBS will establish a fintech industry advisory panel to identify points of friction in licensing and multi-state regulation, and provide feedback to state efforts to modernize regulatory regimes. The panel will focus on lending and money transmission, and discuss a wide range of solutions. Individual state regulators already have been engaging the fintech industry in formal dialogue.
- Assist state banking departments. CSBS education programs will make state departments more effective in supervising banks and non-banks. Updated standards and analytics will help states determine where new expertise is most needed, identify and address weaknesses, update supervisory processes, and compare themselves to and learn from other state departments. These higher standards will be validated through an enhanced CSBS accreditation program.
- Make it easier for banks to provide services to non-banks. CSBS is stepping up efforts to address de-risking – where banks are cautious about doing business with non-banks, due to regulatory uncertainty – by increasing industry awareness that strong regulatory regimes exist for compliance with laws for money laundering, the Bank Secrecy Act, and cybersecurity.
- Make supervision more efficient for third parties. Banks of all sizes work with a variety of third-party service providers, including fintech companies. CSBS supports federal legislation that would allow state and federal regulators to better coordinate supervision of bank third-party service providers.
Fintech Lawyers on State Regulators’ Possible Alternative to OCC Charter Plan (Corporate Counsel), Rated: A
Lawyers who work for and with fintechs are encouraged that the state regulators at the CSBS are at least thinking about changes to the system that they believe would modernize state regulations of nonbanks or help centralize regulation among the states.
The state banking regulators’ plan for nonbanks such as fintechs outlines six ways in which it seeks to provide “a regulatory system that makes supervision more efficient and recognizes standards across state lines” by 2020, according to a press release.
Initial actions will include: redesigning the Nationwide Multistate Licensing System, harmonizing multistate supervision, forming an industry advisory panel, assisting state banking departments, making it easier for banks to provide services to nonbanks and making supervision more efficient for third parties, according to the association.
LendUp And Beneficial State Bank Announce Major Expansion Of Credit Card Partnership (PR Newswire), Rated: A
LendUp, a socially responsible lender for the emerging middle class, and Beneficial State Bank (Beneficial State), a social enterprise bank, today announced a significant expansion of the L Card, its credit card joint venture. The move is expected to quadruple the availability of L Cards, a Visa credit card product designed by LendUp and issued by Beneficial State for consumers traditionally shut out of mainstream banking due to poor credit scores or damaged credit files. The expansion builds on the firms’ partnership that extends back to the L Card pilot in April 2015.
According to the Credit Builders Alliance, a person with subprime credit pays on average $250,000 more in interest than borrowers with good credit over the course of their lifetime — and that doesn’t even include fees on financial products. In addition, according to LendUp research, many of its own customers are currently shut out of mainstream credit card products, such as rewards credit cards (98.5%) and retail rewards cards (66.5%).
In response, LendUp created a card for Beneficial State that meets borrowers’ immediate credit needs while helping to build their long term financial health. Features include:
- Instant decisions
- No over-the-limit fees or security deposits
- Reporting to the three main credit bureaus
- Affordable payments
The L Card carries an annual fee of $0–$60 and APR ranging from 19.99% to 29.99%; it has a 4.8 average star review on CreditKarma.
Addepar To Buy Alternatives Data Provider AltX (Financial Advisor), Rated: A
Mountainview, Calif.-based Addepar announced on Thursday that it is purchasing AltX, an alternatives market intelligence platform.
Addepar hopes that the acquisition will boost it’s capabilities around alternative investing by enabling advisors to make better-informed decisions, said Eric Poirier, Addepar CEO, in a statement released on Thursday.
AltX’s platform uses machine learning to gather intelligence on alternative investments, incorporating reference data, public filings and news into a database of performance, holdings and key reference data for more than 17,000 funds.
Ascentium Capital Surpasses $ 3.0 Billion in Origination Volume (Ascentium), Rated: A
Ascentium Capital LLC, the top private independent finance company in the United States by new business volume, announced surpassing $3 billion in origination volume since the Company’s inception in August 2011.
Milwaukee FinTech firms aim to help consumers (Biz Times), Rated: A
The pace of FinTech disruption is increasing in the financial industry, with about $22 billion raised by FinTech startups over the past five years, Schedler said.
Northwestern Mutual has invested in two key early FinTech leaders, Betterment and Learnvest. And with its Future Ventures program, it plans to invest $50 million in series A and series B funding rounds over the next five to six years to bring in more partnership opportunities.
Bank My Biz has 13 bank partners in Wisconsin and many more across the country, he said. So if one of those banks isn’t able to extend an equipment or working capital loan of less than $100,000 to a small business, Bank My Biz may be able to do so with its financial partner, Brookfield-based national direct lender Advantage+.
Banks earn income off the term loan and Bank My Biz earns its revenue through the interest rate spread. It charges interest rates of between 9 and 13 percent.
Looking Glass buys marketplace loans on lending sites Funding Circle, LendingClub, Peerform and Prosper. Using its custom predictive analytics software, LGI evaluates and underwrites loans it has determined are unlikely to default. The alternative investment model promises investors a less volatile environment than the equity markets.
It also runs LoansOfTheDay.com, which uses big data, predictive analytics, artificial intelligence and machine learning to distribute risk and optimize returns on peer-to-peer lending sites. LGI contributes a minimum of $25 to each loan on the site.
And its newest product is LendSight, a SaaS underwriting tool banks can use to improve their profit margins by doing predictive underwriting, while allowing Looking Glass to capture more market share, Siefkes said.
Redpoint Capital Group Names Alex Dunev as Managing Partner (BusinessWire), Rated: B
Redpoint Capital Group, LLC (“Redpoint”), an alternative investment company focused on providing financing solutions to companies in the Specialty Finance and FinTech sectors, announced today that it has added Alex Dunev as a Managing Partner. Alex will be responsible for driving Redpoint’s strategic priorities, including sourcing new investment opportunities and raising capital to deploy into Redpoint’s investment strategies. Alex will also manage Redpoint’s office in Westport, Connecticut.
Alex was previously a Managing Director in the Investment Banking Division at UBS, leading the bank’s Specialty Finance efforts in the Americas. Prior to UBS Alex also covered Specialty Finance companies at Morgan Stanley and Credit Suisse.
DiversyFund, Inc. Brings New Innovations to Real Estate Crowdfunding (Digital Journal), Rated: B
Mr. Cecilio and Mr. Lewis formed DiversyFund, Inc. to create the industry’s first online crowdfunding real estate platform where the company acts as the real estate developer on all of its investment offerings in order to deliver to its investors better quality control and more detailed and robust investor reporting, including monthly construction updates on each real estate project with pictures of all work in progress.
Because DiversyFund, Inc. acts as the developer and receives a developer fee that is paid at the project level, DiversyFund does not charge any platform fees, servicing fees or other sales commissions to its investors, enabling investors to keep 100% of their investment returns.
Additionally, DiversyFund, Inc. is the only crowdfunding real estate site that focuses exclusively on strong-performing Southern California real estate markets.
P2P Lender Sells Off Bad Debts Worth £2.1 Million (iExpats), Rated: AAA
A British peer-to-peer lender has become the first platform to sell non-performing debt.
RateSetter has completed a deal with undisclosed terms to 1st Credit, a debt purchasing company.
The lender says the loans were taken out between 2010 and 2015 and that the company felt borrowers were unlikely to settle the debt.
RateSetter has a £22.23 million provision fund to cover bad debts and expects to pay out £18.78 million compensation to investors.
Landbay introduces retention fee for intermediaries (P2P Finance News), Rated: AAA
LANDBAY has announced that its intermediaries will now receive a retention fee for all customer renewals.
The peer-to-peer lender, which specialises in buy-to-let mortgages, said that it introduced the 0.3 per cent fee because of its ongoing recognition of the role of intermediaries in offering advice in the retention process of customers.
Investing in the UK’s growth when it needs it most (FT Adviser), Rated: A
The notoriety and growth of crowd funding, and its variations, has gathered a great deal of attention. For good and bad. Only last year, Lord Turner warned: “The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses.”
While investing in VCTs has its risks, just as any investment has, these risks are for more measured and disciplined with quality offerings. Many quality VCT providers have more recently felt lumped in the same bucket as the under fire feel peer to peer (P2P) lenders and equity crowdfunders (ECFs) both of which now the subject of a clampdown by the FCA.
Despite some of the misconceptions, VCTs raised £458m in the 2015-16 tax year, making it the third highest year for VCT investment since records began in 1995. In the tax year that has just closed, most but not all were fully funded by the end of 2016-2017.
VCTs invest in small, largely unquoted, companies in the UK of up to £15m in size.
London-based VC Notion Capital has announced a new $ 80 million startup fund (Business Insider), Rated: A
Notion Capital, a London-based venture capital firm that backs startups across Europe, has announced a new $80 million (£60 million) startup fund that will be used to back later stage companies.
The VC, which focuses on backing enterprise software and cloud companies, also announced on Tuesday the final closing of a $140 million (£107 million) venture fund to back early stage startups.
Ford: Wine, watches and cars: the rise of alternative investing (Automotive World), Rated: B
As savvy investors champion alternative commodities such as wine and watches, classic Fords have proved themselves another sound investment.
For those who think there’s no money to be made from cars, think again – total growth over the past decade was 457 per cent***. This is a bigger increase than even property, which has increased in value on average 20 per cent in the last decade and 152 per cent since 2000 across Europe*****. And it’s not just new super cars such as the latest Ford GT newly on sale in excess of $450,000 that command a hefty price tag and appreciate rapidly. Among the list of top investor car makes, Ford offers among the lowest entry costs.
In March 2016, a Ford Escort Cosworth with less than 2,500 miles on the clock sold at auction for £67,580 after originally going on sale at £22,050 in 1992. The average price of a Cosworth is now more than double that original price and the Fiesta XR2 which went on sale in 1981 for £5,150, has trebled in value since 2014 to prices well in excess of £10,000, with the best advertised at close to £20,000.******
Alibaba Invests In Its First Fintech Company In Hong Kong (Crowdfund Insider), Rated: AAA
As reported by Forbes today, Alibaba has invested in online invoice exchange marketplace Qupital, marking the Chinese e-commerce giant’s first foray into fintech investment in Hong Kong. Qupital raised a total of $2 million in its seed round.
Qupital bills itself as Hong Kong’s first and largest online invoice discounting exchange. The company aims to solve the problem of companies not having quick access to cash by allowing them to raise funds on the site through the auctioning off of unpaid invoices, essentially securitizing their accounts receivable.
Dianrong Announces Next Technology Agreement Outside Mainland China (Military-Technologies), Rated: AAA
Dianrong today announced a new technology agreement with Maggie Ng, a leading consumer banking executive in Asia Pacific, to launch the first global fintech marketplace connecting Asian investors with high-quality, low-volatility and largely untapped asset classes, including U.S. consumer lending. The new strategic alliance combines Dianrong’s advanced technology with Ms. Ng’s extensive consumer-lending experience.
Ms. Ng and Dianrong engineers are currently completing beta testing for the new fintech platform that will provide Asian investors with an integrated solution to access U.S. marketplace lending assets. The platform will utilize multiple U.S. marketplace lenders and a single onboarding and know-your-customer process. It will also offer advanced risk modeling capabilities, added credit enhancement and structuring features, and blockchain solutions to safeguard data integrity. Investors will also have access to real-time performance monitoring, U.S. tax-exemption filing capabilities and a secondary market for liquidity.
Chinese Celebrity-Backed Fintech Firm QuantGroup Considering US IPO (Crowfund Insider), Rated: A
Fintech company QuantGroup, which was founded by several notable Chinese movie stars, is considering a US IPO, according to an article published in Bloomberg last week. The firm is looking to raise an estimated $200 million according to unnamed sources.
The Beijing-based QuantGroup is a financial services company that provides estimated credit ratings using big data.
QuantGroup joins a growing list of Chinese fintech firms in the process of launching US IPOs. Fenqile, a Chinese online shopping mall that lets customers pay in installments, is also looking to raise over $600 million through a US IPO.
LCQ5: Regulation of online crowdfunding and lending platforms (7th Space), Rated: B
Platforms for raising funds from and lending small loans to members of the public through the Internet (crowdfunding and lending platforms) have become popular in recent years. However, some financial advisers have pointed out that investors participating in crowdfunding activities are exposed to considerable risks. In this connection, will the Government inform this Council:
(1) whether it knows the number of companies currently operating local crowdfunding and lending platforms, and the number of complaints received by the authorities in the past three years concerning crowdfunding activities, with a breakdown by type of complaints;
(2) how the current legislation regulates the fundraising and lending activities conducted through crowdfunding and lending platforms;
(3) as some financial advisers have pointed out that investors provide funds through such platforms, which in turn lend the funds to borrowers, whether the authorities will, to avoid such investors breaching the law inadvertently, clarify if such investors are regarded as money lenders under the Money Lenders Ordinance (Cap. 163) and therefore are required to obtain money lender licences; and
(4) whether the authorities will conduct public education activities on the risks faced by investors participating in crowdfunding activities; if so, of the details?
|Year||No. of complaints about crowdfunding||No. of complaints about lending platforms|
(as at end March)
(2) and (3) Depending on the specific structure and features of the relevant arrangement, some types of crowdfunding activities, in particular equity crowdfunding and peer-to-peer lending, may be subject to the provisions of the Securities and Futures Ordinance (Cap.571), and/or the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32).
(4) We will ensure that investors and consumers of crowdfunding and lending platforms will receive proper protection under Hong Kong’s regulatory rules and standards. In view of the rapid development of financial technologies (Fintech), the Investor Education Centre (IEC) is working on a series of articles to introduce various Fintech services/products, associated risks and regulatory framework to the public.
Older Swiss fintech additiv gets $ 21.3 million in new capital (CNBC), Rated: AAA
A Zurich-based Swiss financial technology (fintech) firm, additiv, has today raised CHF21m Swiss Francs ($21.3m) in capital from core investors including BZ Bank, acting on behalf of its clients, and the investment vehicle Patinex.
Additiv provides systems to help with the digitalization of banks, asset managers and insurers.
Additiv’s key software product is the Digital Finance Suite (DFS). It has offices in Switzerland, Hong Kong and Singapore, as well as an international network of reselling partners and customers around the world.
Additiv’s key software product is the Digital Finance Suite (DFS). It has offices in Switzerland, Hong Kong and Singapore, as well as an international network of reselling partners and customers around the world.
Lendity: ideal marketplace lending exposure for pension funds, asset managers, family offices, private banks (Daily Fintech), Rated: A
A sea of 300 suits is what I faced last week at the first Swiss Alternative Lending conference hosted at SIX and in partnership SIX and Lendity.
Lendity is focused on developing structures that a family office, an asset manager, a pension fund, can book on their books or a private bank can list in their private debt product offering for qualified investors. And at the same time include:
o Global exposure – US and Europe for now (USD, CHF)
o Asset diversification – Consumer, SME, real estate etc
o Platform diversification
o Tax efficiency, despite the cross-border exposure
o Regulatory compliance, despite the cross-border exposure
o Private debt without additional counterparty risk from the issuer.
Lendity is really solving a pain point for both marketplace lending platforms and for institutional investors.
For marketplace lending platforms, Lendity acts as a marketplace that matches them with institutional capital from Financial advisors, Private Bankers, Pension funds, Family offices, and Asset managers (the 5 “investor” types).
FinTech: the influence of technology on the future of the financial sector (Lexology), Rated: A
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published its final report on ‘ (2016/2243(INI))’.
On the other side of the coin, the report stresses the following:
- Financial services legislation at both the EU and national levels should be sufficiently innovation friendly.
- Fintech companies should continue to contribute positively to the development of financial intermediation.
- There is scope for improvement in the means that can be used for cross-border payments (while noting the regret of the European Parliament that there is no EU-wide European-owned credit or debit card scheme).
- There are no clear European rules or guidelines for outsourcing data to the could with regard to the financial sector.
- It is concerned about the increased use of permissionless blockchain applications for criminal activities.
See the full report here.
Retirees are riskier investors than millennials, says ASX report (Financial Review), Rated: AAA
The latest ASX Australian Investor Study found the proportion of 18 to 24-year-olds who invested in the ASX over the past five years had increased from 10 to 20 per cent. The proportion of 25 to 34-year-olds had also increased, from 24 to 39 per cent.
The survey shows that 81 per cent of 18 to 24-year-olds are seeking guaranteed or stable returns, compared to 67 per cent of 25 to 59-year-old investors and 60 per cent of retirees.
Millennials have grown to recently become the largest generational cohort in Australia, with 4.9 million people, eclipsing Gen X (4.8 million) and baby boomers (4.1 million), Roy Morgan Australia says.
According to the ASX research, 44 per cent of 18 to 24-year-old investors hold cash, 31 per cent hold shares and 25 per cent have investment properties.
The ASX survey also revealed that the proportion of 18 to 24-year-old investors using professional financial advisers was 37 per cent, but Mr Mahony said the number of people who used Google to see where they should be investing was 48 per cent.
NAB’s fintech arm brings robo-advice to home loans (AltFi), Rated: A
The fintech arm of Australian banking giant NAB, UBank, has unveiled a robo-advisor aimed at helping customers complete their home loan applications.
In a national first, “RoboChat” will offer real time help for online home loan applications available 24/7. The robot will answer FAQs, such as “what term do you offer on home loans?” and “do you offer redraws and how do they work?”, as well as stupid and unrelated questions with a sense of humour.
Robo advisors give users access to advice by highly qualified experts who have multiple decades of financial experience with them as against serviced by a 22-25 year sales executive, or a family member. Also, since this is available online and requires minimal human intervention, it is the best and most economical way to make customised expert financial advice available to the masses.
Capacity (Who will cater to masses?): Bank relationship managers and advisors are a privilege of the rich as reduction in distributor commissions have made intermediaries vacate the low/ medium end of the market.
Robo-advisors reduce a lot of unpleasant experience of interaction. There is no pressure for you to buy right now, in addition to having the option of doing it at your own convenience. The design and UX at certain platforms are created to engage users without being too intrusive.
The unbundling of banking (CB Insights), Rated: A
Paytm, the private Indian mobile payment unicorn, is now coming for the banks.
Abu Dhabi Global Market admits first five fintech start-ups into its Reglab sandbox (CNBC), Rated: B
Abu Dhabi Global Market (ADGM) has announced its first batch of financial technology (fintech) regulatory laboratory (Reglab) companies that will go through its new innovation center.
- Now Money – UAE: provides mobile technology to allow low income migrant workers in the UAE to access banking and remittance services, which would otherwise be out of reach.
- Titanium Escrow – UAE: This is an automated escrow service that aims to increase trust in counterparties and stabilize the cash cycle for small businesses.
- CapitaWorld – India: A one-stop digital platform that automates the entire loan value chain from loan application to credit appraisal and post-disbursement credit monitoring. Rather than needing to physically visit multiple banks to apply for a loan, the CapitaWorld platform allows a borrower to submit a loan application just once online, and its platform will use analytics to carry out verification and credit risk scoring. It will then match the borrower with multiple banks that have signed onto the platform and ensure that the credit risk appetite matches the borrower’s profile.
- Rubique – India: Rubique is an online platform that connects banks and fund seekers/borrowers via a smart financing process that links to a range of loan, credit card and financing options that attempt to bridge the gap between lenders and borrowers.
- Finalytix -US: This is a robo-advisory platform for wealth management applications that seeks to help clients optimize their holdings, mitigate risks and costs, and identify new investment opportunities.
News Comments Today’s main news: Renaud Laplanche’s new firm Upgrade launches as a consumer platform. US MPL securitizations total $3B in Q1 2017. RateSetter targets growth in SME lending. NewOak Asset Management agreement to purchase $2bil in loans from LendingArch. Today’s main analysis: Fundrise files Reg A+ for new investment offer. Q4 Loan origination stats per market, a must […]
- Today’s main news: Renaud Laplanche’s new firm Upgrade launches as a consumer platform. US MPL securitizations total $3B in Q1 2017. RateSetter targets growth in SME lending. NewOak Asset Management agreement to purchase $2bil in loans from LendingArch.
- Today’s main analysis: Fundrise files Reg A+ for new investment offer. Q4 Loan origination stats per market, a must read.
- Today’s thought-provoking articles: Lending Club is offering hardship plans for borrowers, protecting returns for lenders.
- Renaud Laplanche’s Upgrade launches as a consumer platform. GP:” With a $60mil A round from top investors and a 70-people team, Upgrade is Renaud Laplanche’s answer to being outsted from Lending Club. A very interesting nuance: Upgrade is using Blockchain to ‘enhance data integrity by creating time-stamped, immutable transaction records.’ Also they are already lining up Jefferies for securitization and the company will retain risk on balance sheet while providing whole loans for sale. I am not sure how you can sell whole loans if you retain risk. I assume the answer is that they will not retain risk on all loans. So put apart the confusion on their whole loan sale/balance sheet retained risk / what do they do with the rest of the loan-risk, it looks very promissing. I would also be curious if they plan to use direct mail for marketing or something more efficient. Their plan does include consumer tools for credit monitoring and understanding, but I wonder if that is enough to generate loan leads. Why not look into taking the lessons from Lending Club and launching a credit card business instead ? ” AT: “Lending Club’s Renaud Laplanche is back. And he may be bigger and better than before. A consumer credit platform for the MPL industry would be a huge boon.”
- MPL securitizations reach $3B in Q1 2017. GP:” The full report can be found under our reports section with all charts and information. Very useful as usual.” AT: “PeerIQ’s report is a must-read.”
- Fundrise files Reg A+. GP:” Reg A+ as our readers already know, is a mini IPO. A way to raise capital that shouldn’t be ignored.” AT: “Fundrise continues to innovate, which is probably why they’re still in front in the RECF niche. However, their shift into eREITs and eFUNDs is very telling. Where to next?”
- Q4 slump caps off tough 2016 for US fintech lenders. GP:” Great data and summary. A must see table.” AT: “Despite major losses, Lending Club was still an industry leader in originations. I see them turning around.”
- Lending Club is offering hardship plans for borrowers, protecting returns for lenders. GP:”Lending Club is trying to figure out a way to reduce defaults. Humans tend to game systems so I am curious how will such a program behave over time.” AT: “Here’s the evidence, a tiny bit of it. Lending Club continues to focus on customer needs. I like this program. Hardship plans for borrowers has the potential to make a big impact on the economy and put a little confidence in everyday people.”
- LendingHome’s investor platform hits $100M. AT: “Congratulations. Great milestone.”
- Amazon launches Amazon Cash. AT: “As an avid Amazon shopper, I love this idea. It makes me wonder if Amazon will ever own a bank. I think they will, a digital one.”
- OCC Fintech Charter is key first step. GP:” An article in support of the charter. In fact, most people are in support of the charter.”
- Chase spent $600M on fintech deals in 2016. GP:” Chase has $26mil active customers on their mobile app. Most of the spent was on mobile and digital… I wonder what else is there that is not mobile and digital.”
- LC CEO sketches the future. GP:” A summary of the talk at Lendit. In 2016 LC lost $146mil, out of a $800 mil in cash approx. However, the 3 new initiatives look very vagues to me.”
- Online lenders spooked by Colorado’s tough stance on interest rates. GP:” Even Upgrade, Renaud Laplanche’s new firm, doesnt’ originate in Colorado.”
- The fintech accelerator in Little Rock.
- Online RECF will flip industry on its head. AT: “I would say it already has. It just needs to go the next step and create more opportunities for non-accredited investors.”
- Arizona gives legal status to blockchain-based smart contracts. AT: “I’d like to see more states draw attention to smart contracts. I see a lot of opportunity for mass acceptance.”
- Online Lending Network to reduce fraud.
- Goldman Sachs is bringing AI, blockchain to Columbia B-school.
- RateSetter targets growth in SME lending. GP:” An interesting move, not many personal lenders move into SME as the businesses are completely different and there isn’t much efficiency. In fact in the US Kabbage launched Karrot , moving from SME to personal lending, and last year they had announced they are shutting Karrot down.”
- BofE still worried about personal lending. GP:” Personal lending is such a small piece of the credit markets I fail to see it as a major threat to anything at all.”
- Bridging P2P lending’s data gap. GP: ” ‘lack of independent research that allows investors and advisers to benchmark P2P platforms’ . There are a few options, perhaps not well know yet. Perhaps the research companies should advertise more and build real marketing arms. “
- UK consumer slowdown underway.
- When VCs get two bites of the apple. GP:” Participating preferred investments have been standard in the US since the VC industry existed. And yes, investors are in the investment to make money, and they will not only take participating preferred deals, but also coupons on their money, and control the budgets, key hires, force redemptions… Anybody thought investors were non profits giving money away for free?”
- The complete guide to using Revolut for P2P lending investors.
- Deutsche Bank acquires stake in TrustBills. GP:” A very interesting move. TrusBill is a an auction house of trade receivables.”
- Grant supports delivery of next-gen fintech for Speakerbus.
- NewOak Asset Management, LendingArch partner on consumer loans purchasing. GP:” NewOak can purchase up to $2bil of loand form LendingArch’s platform. This deal is worth your attention.”
- United States
- Upgrade, Inc. Launches New Consumer Credit Platform (Upgrade), Rated: AAA
- US MPL securitisations total $ 3bn in first quarter (P2P Finance News), Rated: AAA
- Fundrise Files Reg A+: “For Sale Housing eFUND”, New Real Estate Investment Offer (Crowdfund Insider), Rated: AAA
- Q4 slump caps off tough 2016 for US fintech lenders (AltFi), Rated: AAA
- Offering Hardship Plans for Borrowers and Protecting Returns for Investors (Lending Club Email), Rated: AAA
- LendingHome’s Investor Platform Hits $ 100 Million Invested (LendingHome), Rated: A
- Amazon launches Amazon Cash, a way to shop its site without a bank card (TechCrunch), Rated: A
- The OCC Fintech Charter is a Key First Step, Not the Last Word (Crowdfund Insider), Rated: A
- Chase Spent $ 600 Million on Fintech Deals in 2016 (Bank Innovation), Rated: A
- Lending Club CEO sketches the future (Banking Exchange), Rated: A
- Online lenders spooked by Colorado’s tough stance on interest rates (American Banker), Rated: A
- Inside the fintech accelerator program in Little Rock (Tearsheet), Rated: A
- Online real estate crowdfunding will flip industry on its head (Daily News), Rated: A
- Arizona Gives Legal Status to Blockchain Based Smart Contracts (Trustnodes), Rated: A
- Online Lending Network to reduce fraud (Bankless Times), Rated: B
- Goldman Sachs Is Bringing Artificial Intelligence And Blockchain To Columbia B-School (Business Because), Rated: B
- United Kingdom
- RateSetter targets growth in SME lending (P2P Finance News), Rated: AAA
- Bank still worried about personal lending (BBC), Rated: AAA
- Bridging P2P lending’s data gap (Professional Adviser), Rated: A
- UK consumer slowdown underway, caution needed on rates-Bank of England’s Vlieghe (Arab News), Rated: A
- When VCs get two bites of the apple (Financial Times), Rated: A
- The Complete Guide to Using Revolut for P2P Lending Investors (P2P-Banking), Rated: B
- European Union
- Deutsche Bank acquires stake in FinTech TrustBills (Deutsche Bank), Rated: A
- GRANT SUPPORTS DELIVERY OF NEXT GEN FINTECH FOR SPEAKERBUS (Speakerbus), Rated: B
- Fintech all talk no action in bank competition race (Fiancial Review), Rated: A
- NewOak Asset Management Partners with LendingArch to Purchase up to $2 Billion in Consumer Loans (LendingArch Email), Rated: AAA
- CFA challenges investment industry: transform or be disintermediated (The Asset), Rated: A
Upgrade, Inc. Launches New Consumer Credit Platform (Upgrade), Rated: AAA
Upgrade started operations in August 2016 and closed its Series A round of financing in March, raising $60 million in equity and convertible notes from investors including Apoletto, Credit Ease, FirstMark Capital, Noah Holdings, Ribbit Capital, Sands Capital Ventures, Silicon Valley Bank, Union Square Ventures, Uprising and Vy Capital.
All loans originated through the Upgrade platform are issued by WebBank, Member FDIC. Upgrade will acquire loans from WebBank, retain a representative portion of those loans on its balance sheets and offer whole loans for sale to institutional investors.
Jefferies is advising the company on its capital markets strategy and is expected to participate in loan purchases to help establish the company’s securitization program.
Personal loans are available through the Upgrade website starting today. Credit monitoring, alerts and education features will launch in coming weeks.
US MPL securitisations total $ 3bn in first quarter (P2P Finance News), Rated: AAA
SEVEN marketplace lending (MPL) securitisations took place in the US in the first quarter of 2017, with a total value of $3bn (£2.4bn), according to new research.
This is up from $2.4bn in the fourth quarter of 2016. Alternative lending research firm PeerIQ found that total issuance to date now stands at $18bn, equating to 80 US MPL deals since September 2013.
Read the full report: MPL securitization tracker for Q1 2017 from PeerIQ.
Fundrise Files Reg A+: “For Sale Housing eFUND”, New Real Estate Investment Offer (Crowdfund Insider), Rated: AAA
Fundrise is adding a new investment vehicle to its growing list of opportunities for smaller investors. This time the real estate marketplace has filed a Form 1-A with the SEC for a “Fundrise For-Sale Housing eFUND”.
Now Fundrise is looking to develop single family attached and detached homes, including condos in southern California.
For investors, the objective is to pay distributions from cash flow from operations as a partnership which means different taxation for investors (IE you receive a K-1)
As with their other Reg A+ filings, Fundrise is seeking a maximum amount of $50 million (the legal limit).
Q4 slump caps off tough 2016 for US fintech lenders (AltFi), Rated: AAA
S&P Global Market Intelligence, a research arm of major ratings agency S&P, has released 2016 origination numbers for 13 major online lenders. The data is headlined by a 14.5 per cent year over year fall in originations for the entire group in the fourth quarter.
Despite the difficult Q4, S&P estimates that the 13 lenders in question grew full-year originations in 2016 by 15 per cent. The student and SME focused lenders exhibited especially strong full-year origination growth, with 62.3 per cent and 43.0 per cent respectively.
Analysis from AltFi Data shows that originations in the UK’s marketplace lending sector grew 49 per cent in Q4 2016 on a year on year basis.
SoFi was the largest online lender by volume in the US during Q4 2016, with roughly $2.5bn lent. But Lending Club just about remained the largest player by yearly origination volume with a little over $8.5bn lent, besting SoFi by around $600m.
Offering Hardship Plans for Borrowers and Protecting Returns for Investors (Lending Club Email), Rated: AAA
We’re excited to announce that after a beta test, we will begin offering hardship plans to borrowers effective May 4, 2017. Hardship plans allow borrowers to temporarily make interest-only payments to accommodate an unexpected life event. As part of this change we are also making additional data fields related to these plans available for investors.
Our hardship plan program specifically targets borrowers who are more likely to return to repaying their loan. Under the plan, borrowers are allowed to temporarily make interest-only payments for a period of 3 months to accommodate an unexpected life event. After 3 months, regular payment terms and obligations resume. Only borrowers who fulfill specific characteristics (such as a demonstrated history of repayment) and who claim a hardship will be offered plans. Importantly, borrowers’ loans must be either current or between 1 and 30 days past due to qualify for a hardship plan.
Finally, we are adding 15 new data attributes of borrowers who utilize hardship plans to investor reports and the API. The fields will only apply for hardship plans offered as of May 4, 2017 and going forward. You can find more information on these new data fields here.
LendingHome’s Investor Platform Hits $ 100 Million Invested (LendingHome), Rated: A
LendingHome, the leading mortgage marketplace lender, today announced that $100 million has now been invested on its platform for individual investors since the platform’s launch in January 2016.
Individual investors can access LendingHome’s marketplace with a minimum opening balance of $50,000 and a minimum investment of $2,500. Investors benefit from fractional notes backed by mortgages that yield 8.75 percent on average. They also receive immediate monthly cash flows and the ability to diversify across hundreds of investments.
In its first year of operation, more than 500 loans were fully funded through the investor platform. Currently all loans offered on the platform are short-term bridge loans for professional real estate investors who buy, renovate, and resell properties. The average loan duration is under one year.
Amazon launches Amazon Cash, a way to shop its site without a bank card (TechCrunch), Rated: A
Amazon this morning announced the launch of Amazon Cash, a new service that allows consumers to add cash to their Amazon.com balance by showing a barcode at a participating retailer, then having the cash applied immediately to their online Amazon account. The service will support adding any amount between $15 and $500 in a single transaction, Amazon says.
Amazon Cash will be available at brick-and-mortar retailers across the U.S., including CVS Pharmacy, Speedway, Sheetz, Kum & Go, D&W Fresh Market, Family Fare Supermarkets, and VG’s Grocery. Other stores will be added in the future.
The service is not all that different from a similar effort by PayPal, whose PayPal My Cash Card lets you add funds to your online PayPal account, using cash from your wallet. It also has a barcode-only service, powered by Green Dot.
The advantage to Amazon Cash is that, as soon as you checkout at the register, the funds are available in the customer’s Amazon account. There are also no fees – something that can’t be said of all the prepaid cards on the market.
The OCC Fintech Charter is a Key First Step, Not the Last Word (Crowdfund Insider), Rated: A
While Americans prize the innovations that can improve their lives, our regulatory framework today is structured in such a way that makes experimentation and greater competition in financial services expensive and difficult. For instance, obtaining and maintaining licenses in 50 states is a major hurdle, and can impose outdated and arbitrary restrictions that are hardly even applicable to platforms that born on the internet.
This has important implications, because while the incumbent national institutions bypass all these state rules, those same traditional bricks and mortar players currently may not always deliver credit products that best meet the current needs of under-served urban and rural communities.
The recent charter proposal from the Office of the Comptroller of the Currency (OCC) strives to strike the balance of promoting greater innovation but doing so within the constructs of existing national bank laws and regulations. As it has done with previous generations of innovative products, like credit cards, the OCC recognizes that the business of banking is not static, and the agency is working within its existing authority to create a single national regulatory option for financial technology firms.
Finally, promoting competition from the formation of innovative “de novo” banks is clearly a bipartisan priority. The OCC special purpose bank charter is a critical response to help advance this goal nationally and its associated benefits.
Chase Spent $ 600 Million on Fintech Deals in 2016 (Bank Innovation), Rated: A
$600 million of JP Morgan Chase’s $9.5 billion technology spend in 2016 went to fintech solutions, and given the company’s 2016 results, it seems like money well spent.
According to the company’s Annual Report 2016, released today, the bank’s spend on fintech included improving its mobile and digital services.
Chase ended the year with 26 million active customers on its mobile app.
It also reported 94 million transactions took place in 2016 on its P2P service, Chase QuickPay, representing a 30% increase year over year—and as Chase is one of the banks supporting Zelle, it expects further development in P2P during the course of 2017.
Lending Club CEO sketches the future (Banking Exchange), Rated: A
When Lending Club CEO Scott Sanborn spoke at the LendIt USA Conference in March the majority of the audience represented a key part of Lending Club’s funding base—institutional investors, including banks—as well as potential partners and competitors in the marketplace lending community.
“Roughly 60% of our loans are to people who are paying off existing credit card debt with a lower interest fixed-payment loan from us,” Sanborn said. “On average borrowers are telling us they’re saving about 25% versus their credit cards so it’s a pretty material spread there that we’re comfortable with.”
Lending Club lost $146 million in 2016.
Sanborn likened the situation to the online retail business, where he had worked earlier. The launch of eBay and Amazon in 1995 spawned a host of dotcom competitors, many of which went away. Amazon itself was expected to close doors, first in 1999 and then in 2001, he noted. Today the behemoth has $100 billion in e-commerce sales, with Walmart a distant second. Likewise, the development of the online lending business is not a linear process, said Sanborn, but more of a cycle.
Sanborn said the good news for 2016 that didn’t get a lot of press: “Lending Club remained the number one provider of personal loans in the country. We issued $8 billion in loans last year, bringing our total [outstandings] to $25 billion.”
Sanborn spent the bulk of his speech describing three initiatives he sees shaping the online lending industry—and Lending Club—going forward.
- Evolving the customer experience
- Unleashing the platform’s potential
- Amplifying core innovations
Online lenders spooked by Colorado’s tough stance on interest rates (American Banker), Rated: A
The ongoing battle over the interest rates that online lenders can charge has moved to Colorado, which is taking aggressive steps to enforce its 12% rate cap for consumer loans.
Inside the fintech accelerator program in Little Rock (Tearsheet), Rated: A
A recent addition to the pool of development programs for financial technology startups is the Venture Center Fintech Accelerator based in Little Rock, Arkansas, which just graduated its first class. It is backed industry giant FIS, a banking technology company that operates in over 130 countries.
The program selects 10 entrepreneurs a year, and it covers a broad range of focus areas, including core banking services, wealth management, wearables, wallets, back office, compliance and payments. For the startups, it’s an opportunity to get honest feedback from counterparts in the banking sector. This year, organizers received 295 applications.
Grant Easterbrook, co-founder of Dream Forward, a 401(k) startup and 2016 class graduate, said the program was mix of meetings and independent work organized around a series of themes relevant to growing the business.
Each week, every company had deliverables, and the work culminated in a demonstration day for investors, bankers and other stakeholders. Bauer said that while many accelerators focus on fundraising, the FIS program zeroes in on getting the products to market, which he said can be the biggest challenge for early-stage entrepreneurs.
Online real estate crowdfunding will flip industry on its head (Daily News), Rated: A
An acronym for Jumpstart Our Business Startups, this lesser-known, but very impactful law has substantially relaxed some of the most stringent securities laws dating back to the Depression era and single-handedly created a whole new investment category known as equity crowdfunding.
And while the title of the category is equity crowdfunding, in reality both equity and debt opportunities are allowed. It is now possible to take relatively small amounts of money and purchase a small stake in a Silicon Valley startup, loan money to an established small business, and — yes — participate in real estate deals.
As an early adopter I have been participating in this space since late 2013, patriating in over 30 deals. They have almost exclusively been debt and I have had several successful exits with no loss of capital this far. My net return over this time has been a very satisfactory 11%.
While we are still in the early phases, I think that real estate crowdfunding is here to stay. From a few million dollars in 2012 to over $3 billion in 2016, we have clear evidence of growing momentum in this space.
Arizona Gives Legal Status to Blockchain Based Smart Contracts (Trustnodes), Rated: A
Ethereum’s technology has just been given the seal of approval by the State of Arizona which passed a bill giving legal status to smart contracts and blockchain based signatures, considering them as any ordinary contract or signature.
In effect, the new legislation applies current contract law to blockchain based contracts, erasing any uncertainty and making it clear that any blockchain based agreement is fully enforceable in a court of law.
The law goes further to state that blockchain based data amounts to ownership, importing current property rights to the nascent field and removing any legal ambiguity as to what may amount to theft.
Things like futures, as in you pay a farmer now for his crop at a set price with delivery at a later date, things like escrow, things like blockchain based insurance, and so on, can now be set in code with the code itself applying enforceable contractual terms where it operates as intended.
Online Lending Network to reduce fraud (Bankless Times), Rated: B
ID Analytics hopes its new Online Lending Network will reduce fraud committed against participating members.
Within a year of its inception, ID Analytics believes the Online Lending Network has gained visibility into 75 per cent of the U.S. domestic marketplace lending activity.
Goldman Sachs Is Bringing Artificial Intelligence And Blockchain To Columbia B-School (Business Because), Rated: B
New York’s Columbia Business School will host a fintech conference sponsored by Goldman Sachs, Microsoft and Deloitte — the latest example of the fintech frenzy at elite business schools.
Students at the business school run Columbia FinTech Club, an organization that aims to develop education and innovation in the field of financial technology. Columbia alumni include Jon Stein, the founder of digital wealth manager Betterment, which uses software to create a portfolio and automatically rebalance it, which is valued at $700 million.
RateSetter targets growth in SME lending (P2P Finance News), Rated: AAA
RATESETTER is planning to ramp up its business lending, after working behind the scenes last year to boost its small- and medium-sized enterprise (SME) technology and grow its dedicated team.
But it sees opportunities for growth within the sector, as SMEs across the country grow increasingly hungry for working capital.
Small businesses have shrugged off Brexit, with the weak pound creating a very strong case for boosting exports, Marston said. The firm found that in the South East region alone, at least 40 per cent of small companies are looking to grow in the next six months.
Bank still worried about personal lending (BBC), Rated: AAA
The recent rapid rise in consumer borrowing is still a potential threat to the stability of the UK’s financial system, says the Bank of England.
These elements of household borrowing – known as consumer credit – are dwarfed by the amount of money that has been lent to home buyers in the form of mortgages.
But the Bank fears that lenders may have become too slack in deciding to whom they should lend.
Data from the price comparison service Moneyfacts shows that some card issuers will now offer interest-free periods of as long as 43 months.
Another area of concern, the Bank said, was that some lenders had been offering larger, unsecured, personal loans than before.
Consumer credit lending is still less than 10% of all lending by UK banks to household borrowers, and is far smaller than mortgage lending which amounts to 70% of loans to households.
Bridging P2P lending’s data gap (Professional Adviser), Rated: A
A strange thing happened in April last year, when the regulator allowed financial advisers to recommend peer-to-peer (P2P) lending to their clients. What happened was – nothing. At least not to begin with.
To an extent, this reflects a certain wariness for the P2P lending sector among some advisers, which is based on a lack of familiarity with the asset class. But there is a much bigger problem – the lack of meaningful data about the sector and a dearth of tools with which to interrogate what little information is available.
In short, there has been a lack of independent research that allows investors and advisers to benchmark P2P platforms. Independently assessed default and return rates have been hard to find – as have been industry-wide figures on subjects such as the total size of the market.
This matters increasingly as the P2P scene grows ever larger. There are now more than 50 P2P platforms and, in the three years from 2014 to 2016 alone, lending grew from £1.25bn to £3.13bn, providing credit to both consumers and businesses. Currently, just over 177,000 retail investors are active in this space. By 2020, it is estimated 2.7 million people will be investing in P2P lending.
They will need independent data, analysis and insight to guide their decisions.
UK consumer slowdown underway, caution needed on rates-Bank of England’s Vlieghe (Arab News), Rated: A
Bank of England rate-setter Gertjan Vlieghe said on Wednesday a consumer slowdown was already underway in Britain and was likely to worsen, underscoring the need for caution on interest rates.
Vlieghe, who is considered one of the central bank’s most dovish policymakers, repeated his view that a premature rate hike was more dangerous than one that came too late.
The BoE is widely expected to keep interest rates at their record low throughout this year and possibly until 2019 as it steers the British economy through the uncertainty linked to the exit from the EU.
However, one rate-setter — Kristin Forbes — voted last month for a rate hike and others said they might follow suit soon if there were signs of inflation picking up by more than expected or that economy was maintaining its momentum of 2016.
When VCs get two bites of the apple (Financial Times), Rated: A
But this is finance and that means things inevitably get even more complicated. This time we’re going to look at the way venture capitalists have structured their investments in two of the UK’s rising fintech stars: Funding Circle and Transferwise.
Transferwise, a payments business, has raised just over $100m from investors including Index Ventures, Peter Thiel’s Valar Ventures, Andreessen Horowitz, and Baillie Gifford, according to Crunchbase.
Funding Circle, a lender to small businesses, has raised $370m from the likes of Index Ventures, Accel Partners, BlackRock, Baillie Gifford, and others, also according to Crunchbase.
Funding Circle, on the other hand, seems to have a more complicated setup called a “participating preferred” structure. This means the investors get their money back in a sale, ahead of anyone else, and they get a share of the cash that’s left over.
The Complete Guide to Using Revolut for P2P Lending Investors (P2P-Banking), Rated: B
The important fact is that with the own account number it is possible to use that for withdrawals from UK marketplaces as no reference is needed for the transfer. I have done this a couple of times now and it takes only a few hours for the money to arrive and get credited.
Entering the recipients bank details on a smartphone is a bit cumbersome, but it needs to be done only once, as the details are stored and can be reused for future transfers.
Note to UK investors: You cannot use the Revolut app likewise for transfering funds from on p2p lending platform in the Eurozone to another p2p lending platform in the Eurozone.
And when I did a comparison of exchange rates at the time of writing this article, I found that actually Revolut offers a much better exchange rate. This is what I got when I compared:
- Revolut: 238 Euro gets 206.12 GBP
- Transferwise: 238 Euro gets 204.92 GBP
- Currencyfair: 238 Euro gets 202.91 GBP
Important tip: Never exchange money on Revolut on a weekend, as Revolut will charge a 1% fee then.
Deutsche Bank acquires stake in FinTech TrustBills (Deutsche Bank), Rated: A
Deutsche Bank AG today announced the acquisition of a 12.5 percent share interest in the receivables auction platform TrustBills. Founded in 2015, the Germany based FinTech TrustBills is an electronic True Sale marketplace for national and international trade receivables. TrustBill’s goal is to become an international receivables market place for companies of all sizes. Terms of the agreement are not being disclosed.
GRANT SUPPORTS DELIVERY OF NEXT GEN FINTECH FOR SPEAKERBUS (Speakerbus), Rated: B
Speakerbus today announced a milestone in its TRADECOM European Union funded project with the successful submission of its scheduled phase 1 reports. The European Commission’s innovation in SME’s programme (Horizon2020), awarded Speakerbus an innovation grant to advance the commercialisation of its vTurret; itself a prototype developed from a UK Government Innovation Grant, a grant specifically awarded to showcase and fast-track technological innovation in technology.
The partly funded project demonstrates Speakerbus commitment to Software as a Service (SaaS), cost pressures, scalability, redundancy, VoIP, compliance, access to an advance API and multi-vendor collaboration, as the project matures.
Fintech all talk no action in bank competition race (Fiancial Review), Rated: A
One theme often overlooked in the debate around the role of the major banks and home lending is competition, or lack of it. Australia’s banking sector is one of the most highly concentrated in the world and the much-hyped arrival of digital disruption has hardly shifted the dial.
Sims makes no bones about the fact that he thinks the market share of the big banks, along with their profits, are too high. He notes that their earnings have increased over the past 15 years as their share of the lending market continues to rise.
The hype around the changes digital technology was going to have on the industry has also failed to materially affect the competitive landscape, although it has forced the existing players to compete with each other with better payments systems and smartphone apps. The biggest competitive shift has been the rise of mortgage brokers, although they will be impacted the most from the banking regulator’s latest crackdown on interest-only loans.
NewOak Asset Management Partners with LendingArch to Purchase up to Billion in Consumer Loans (LendingArch Email), Rated: AAA
Today LendingArch, the Calgary-based online and point-of-sale lending platform, announced a partnership with NewOak Asset Management LLC, a New York-based asset management and institutional advisory firm who have advised on over $5.5 trillion in assets on behalf of the world’s top banks, institutions, law firms and regulators. This partnership gives NewOak the ability to purchase up to $2 billion worth of loans originated through LendingArch’s platform over the next three years, the largest deal of its kind for a Canadian consumer lending platform.
NewOak will also be taking on an advisory role with LendingArch, providing insight on capital markets, credit, growth, and additional business opportunities as the company further expands its point-of-sale lending platform.
The NewOak partnership is LendingArch’s first of many institutional-based deals that they are looking to strike in North America and internationally, and means that the company can continue to provide high-quality, low-cost loans across a range of verticals, giving Canadians a viable alternative to banks for consumer lending.
CFA challenges investment industry: transform or be disintermediated (The Asset), Rated: A
CFA Institute, the investment management industry’s global think-tank and lobby group, has come out with a very strong challenge to the industry to “transform” itself or risk being “disintermediated” in the face of industry difficulties.
Among the significant trends that the study cited are:
• Uncertainties brought about by geopolitical developments such as Brexit, Trump’s election, regulatory reform, etc;
• Disruptions brought about by fast-paced developments in the financial technology (fintech) sector;
• The persistent low-yield environment and the resulting shift from passive to active management.