News Comments
- Today’s main news: Court dismisses case against OCC Fintech Charter. Affirm’s valuation confirmed at $1.75B. RateSetter Australia reaches $200M milestone. SoftBank invests $450M into Compass. Starling Bank expected to profit in 2019. Linked Finance launches P2P lending pension accounts. ID Finance raises $85M through ETF bonds.
- Today’s main analysis: TransUnion reports on consumer credit markets.
- Today’s thought-provoking articles: What comes after Affirm’s $200M capital raise. TransUnion expects consumer credit market to stay strong. Why big banks back isolated web browsing. Seedrs founder wants to save capitalism from itself. Understanding data protection.
United States
- Judge dismisses lawsuit against OCC Fintech Charter. AT: “This fight isn’t over. It simply means a delay as the litigant can bring the suit back in the future.”
- Affirm’s valuation is confirmed at $1.75M. AT: “Affirm is the company to watch in instant POS loans.”
- Levchin talks about what comes next for Affirm.
- Do your customers wrong and the competition will do them right.
- Retailers now offer instaloans.
- Prosper appoints former JP Morgan exec to board.
- OnDeck hires GE Capital, SunTrust executives for finance team. AT: “Talent is very important for a company like OnDeck. Will these executives be able to take the company to the next level?”
- TransUnion says consumer credit market to remain strong. AT: “Excllent analysis. A must-read.”
- Why big banks like isolated web browsing.
- Niche lending crosses path with fintech.
- Finance teams are the problem at banks.
- Royal Business Bank invests in Lendistry Loan Fund.
- Credit union association files amicus brief in English v. Trump. AT: “Represented by Ballard Spahr, credit unions are challenging Trump’s Consumer Financial Protection Bureau (CFPB) appointment.”
- Credit union brings its own lawsuit against Trump on CFPB leadership appointment.
- Zelle succeeds for US Bank.
- Banks need big tech talent.
- BitGo raises $42.5M.
- Top firms using AI to redefine industries, including fintech. AT: “Hint: Affirm is one of them.”
- Promising early-stage startups to watch.
- Using alternative credit to buy a home.
United Kingdom
China
European Union
- Linked Finance launches P2P lending pension accounts.
- N26 partners with Younited Credit in France.
- Advantages of P2P lending. AT: “For beginners.”
- Barion secures 6M Euro investment.
- Fellow Finance receives payment institution authorization.
- Former Klarna employee building a network of co-working spaces.
International
- ID Finance raises $8.5M with ETF bonds.
- Banks, fintechs, and British royal partner on blockchain green-lending initiative.
Australia
India
Asia
MENA
Israel
South America
News Summary
- United States
- Court throws out New York regulator’s suit against OCC fintech charter (American Banker), Rated: AAA
- Lending startup Affirm valued at $ 1.8 bln in latest financing round (Business Insider), Rated: AAA
- Max Levchin On What Comes After $ 200M Worth Of Capital Affirmation (PYMNTS), Rated: AAA
- Doing customers wrong allows your competitor to make things right (American Banker), Rated: A
- Retailers now offers Instaloans to pay for purchases (ABC30.com), Rated: A
- Prosper Appoints Former J.P. Morgan Chase CMO Claire Huang to Board of Directors (Crowfund Insider), Rated: AAA
- OnDeck Adds Former GE Capital and SunTrust Executives to Finance Team (PR Newswire), Rated: AAA
- Compass gets $ 450M from SoftBank; real estate portal now valued at $2.2B (TechCrunch), Rated: AAA
- Consumer Credit Market Expected to Remain Strong in 2018 Even in a Rising Rate Environment (NASDAQ), Rated: AAA
- Why JPMorgan, Amex, HSBC are backing ‘isolation’ web browsing (American Banker), Rated: AAA
- Niche lending and fintech cross paths in Silicon Slopes (Utah Business), Rated: A
- Finance teams are ‘bottlenecking’ banks’ digital transformations (Tearsheet), Rated: A
- Royal Business Bank Invests $ 500K in Lendistry Loan Fund, Providing Opportunity for Small Businesses in Underserved Communities (Digital Journal), Rated: A
- First financial industry brief filed in CFPB English v. Trump case (Ballard Spahr Email), Rated: A
- Lawsuit: Trump appointee Mick Mulvaney has ‘no more right’ to lead CFPB ‘than Santa’ (Washington Examiner), Rated: A
- US Bank sees success with Zelle (Business Insider), Rated: A
- To compete with big tech firms, banks need big-tech talent (American Banker), Rated: A
- BitGo Raises $ 42.5M in Series B Funding (Finsmes), Rated: A
- AI 100: The Artificial Intelligence Startups Redefining Industries (CB Insights), Rated: A
- 5 Promising Early-Stage Startups to Watch (Tech Startups), Rated: B
- Homebuying With Alternative Credit (Microbilt), Rated: B
- United Kingdom
- Digital challenger Starling to hit profit in 2019 says founder Anne Boden as European expansion takes crucial step (City A.M.), Rated: AAA
- Crowdfunding a mission to save capitalism from itself (Financial Times), Rated: AAA
- China
- SenseTime Raises US$ 410M Series B Financing (Finsmes), Rated: A
- European Union
- Linked Finance Launches New P2P Lending Pension Accounts (Better Business), Rated: AAA
- Mobile bank N26 partners with crowd-lending platform Younited Credit in France (Telecompaper), Rated: A
- The Advantages of #Peer-to-Peer Lending (EU Reporter), Rated: A
- Hungarian fintech secures EUR 6 mln in Czech funding (Portfolio.hu), Rated: A
- Finnish Crowdfunding & P2P Lending Platform Fellow Finance Receives Payment Institution Authorization (Crowdfund Insider), Rated: B
- With Norrsken House, ex-Klarna executive envisions a global network of co-working spaces focused on impact (TechCrunch), Rated: A
- International
- ID Finance raises $ 8.5m via exchange-traded bonds to support growth (Finextra), Rated: AAA
- Banks, fintechs and a Brit royal to build green-lending blockchain (American Banker), Rated: A
- Australia
- RateSetter’s Australian business hits $ 200m milestone (AltFi), Rated: AAA
- India
- Understanding the Data Protection White Paper Part XI: Establishing proper deterrent consequences for privacy violations (Tech 2), Rated: AAA
- Asia
- 8Percent leverages power of platform (Korea Herald), Rated: A
- MENA
- Crowdfunding real estate: a new reality booming? (Gulf News), Rated: AAA
- Israel
- MK Rachel Azaria threatens banks with P2P legislation (Globes.co.il), Rated: AAA
- South America
- Creditas Raises $ 50M in Series C Funding (Finsmes), Rated: A
United States
Court throws out New York regulator’s suit against OCC fintech charter (American Banker), Rated: AAA
A New York District Court judge threw out a lawsuit by the New York Department of Financial Services that sought to block the Office of the Comptroller of the Currency’s attempted fintech charter, saying the charter doesn’t exist yet so the suit is premature.
Lending startup Affirm valued at $ 1.8 bln in latest financing round (Business Insider), Rated: AAA
Silicon Valley lending startup Affirm said on Monday it has raised $200 million in a fresh round of funding, boosting prospects as the firm aims to go after the market for millennial shoppers needing loans.
The new financing put Affirm’s total fundraising to date at about $450 million, and increases its valuation to $1.75 billion, according to a source with knowledge of the matter.
Max Levchin On What Comes After $ 200M Worth Of Capital Affirmation (PYMNTS), Rated: AAA
The CEO with the measured response is PayPal co-founder Max Levchin, who told Karen Webster that with any capital raise of size, the temptation is to believe that “it is a big victory and it is validation … but all it really is, is a temporary tally of how far you have gone.”
He noted that with big investments come big responsibility (and Affirm has raised roughly $450 million to date), as he remarked that there is the implicit end goal of taking the money and parlaying vision and strategy into strong returns on that cash.
Affirm says that its retailers report that consumers who use Affirm leave with a basket size 75 percent greater than those who don’t use Affirm to pay for their purchases, and enjoy site-wide conversion rates as much as 20 percent higher, with revenue per visitor lifts of more than 10 percent.
Doing customers wrong allows your competitor to make things right (American Banker), Rated: A
Consider Affirm, a startup that offers consumers installment loans for individual purchases and markets the loans as a simpler and more honest financing alternative — a message that is clearly targeted at consumers who are frustrated by a perceived lack of transparency in the costs associated with using credit cards. This message appears to be resonating in the market; Affirm is processing relationships with more than 1,000 internet retailers and is reportedly working with Walmart on a pilot project.
In an interview with American Banker, Douugh founder and CEO Andy Taylor said: “When we dug deeper, we realized the consumer debt levels are out of control. Big banks are running off legacy business models that are driven to keep customers within these debt cycles. They’re not properly incentivized to foster financial wellness.”
Affirm, Marcus and Douugh are all basing their strategic direction on a simple but powerful insight: There is a difference between the way many consumers use credit cards and the way that those consumers should use their credit cards in order to maximize their financial wellness.
Retailers now offers Instaloans to pay for purchases (ABC30.com), Rated: A
A growing number of major retailers offer shoppers instant loans to pay for your purchases.
But how do they work? And are they better than credit cards?
Each lender may be slightly different, but typically: you give basic information, decide the length of the loan -usually anywhere from three to twenty-four months and in less than a minute you’ll know if you’re approved.
Prosper Appoints Former J.P. Morgan Chase CMO Claire Huang to Board of Directors (Crowfund Insider), Rated: AAA
Peer-to-peer lending platform Prosper announced on Tuesday it has appointed former Chief Marketing Officer of J.P. Morgan, Claire Huang to its board of directors. According to Prosper, Huang has held senior leadership positions at various well-known financial services companies, which includes Bank of America, Fidelity Investments, and American Express.
OnDeck Adds Former GE Capital and SunTrust Executives to Finance Team (PR Newswire), Rated: AAA
OnDeck (NYSE: ONDK), the leading online lender to small business, today announced the hiring of two senior financial services executives to join its management team. Kelly Merrill and Erich Wust will assume new leadership roles that directly support OnDeck’s mission of empowering small business owners with the fastest and most flexible credit solutions.
Kelly Merrill joins OnDeck as the Senior Vice President for Finance, where she will help lead the company’s short-term and long-term financial planning initiatives. Merrill brings over a decade of finance experience to OnDeck from GE Capital, where she played a leading role in developing and executing the disposition strategy for GE Capitals’s $200 billion balance sheet. Previously, Merrill was the Chief Financial Officer (CFO) of GE Capital Real Estate, where she led a team of more than 50 employees.
Erich Wust has been appointed as the Senior Vice President for Portfolio Management at OnDeck. He will be responsible for managing portfolio credit strategies, balance sheet optimization and other components of the company’s loan portfolio. Wust joins OnDeck after more than a decade in credit and risk leadership roles at SunTrust Bank.
Compass gets $ 450M from SoftBank; real estate portal now valued at .2B (TechCrunch), Rated: AAA
Less than a month after raising $100 million led by Fidelity, real-estate startup Compass is striking while the iron is hot. The company has now picked up an even bigger investment of $450 million, this time from the SoftBank Vision Fund, plus another $50M in secondary deals, to fill out a vision of its own: taking its real estate rental and sales platform global.
New York-based Compass is now valued at $2.2 billion post-money, up from $1.8 billion just four weeks ago, with $775 million raised to date.
Consumer Credit Market Expected to Remain Strong in 2018 Even in a Rising Rate Environment (NASDAQ), Rated: AAA
In spite of rising interest rates, the U.S. consumer credit market is poised to perform well in 2018, with well-managed delinquencies and continued wide access to credit across all products. TransUnion’s (NYSE:TRU) 2018 consumer credit forecast found that expected increases to GDP, personal income, total employment and the Housing Price Index, among other factors, will outweigh potential negatives such as increasing interest rates and slowing vehicle sales.
5-Year Trends: Serious Borrower-Level Delinquency Rates for Key Credit Products** | ||||||||||||||
Credit Product | Q4 2013 | Q4 2014 | Q4 2015 | Q4 2016 | Q4 2017* | Q4 2018* | PCT Change in Last 5 Years (2013-2018) | |||||||
Auto Loans |
1.23 |
% |
1.19 |
% |
1.27 |
% |
1.44 |
% |
1.43 |
% |
1.46 |
% |
+18.7 % |
|
Credit Cards | 1.60 | % | 1.48 | % | 1.59 | % | 1.79 | % | 1.86 | % | 1.96 | % | +22.50 % | |
Mortgage Loans | 4.31 | % | 3.40 | % | 2.46 | % | 2.28 | % | 1.83 | % | 1.65 | % | (-61.7%) | |
Unsecured Personal Loans | 4.01 | % | 3.73 | % | 3.62 | % | 3.83 | % | 3.37 | % | 3.36 | % | (-16.21%) | |
*Projections; **Serious mortgage, auto loan and personal loan delinquencies are defined here as those with payments 60 or more days past due. Serious credit card delinquencies are defined as those with payments 90 or more days past due. |
Inside the Mortgage Forecast
60-Day+ Mortgage Delinquency Rate and Average Mortgage Debt per Borrower | |||||||||||||||||||||||||||||
Q4 2009 | Q4 2010 | Q4 2011 | Q4 2012 | Q4 2013 | Q4 2014 | Q4 2015 | Q4 2016 | Q4 2017* | Q4 2018* | ||||||||||||||||||||
7.16% | 6.65% | 6.15% | 5.38% | 4.31% | 3.40% | 2.46% | 2.28% | 1.83% | 1.65% | ||||||||||||||||||||
$190,324 | $186,488 | $185,594 | $184,753 | $187,228 | $187,311 | $189,914 | $194,415 | $200,935 | $205,534 | ||||||||||||||||||||
*Q4 2017 and Q4 2018 include projections |
Inside the Credit Card Forecast
90-Day+ Credit Card Loan Delinquency Rate and Average Credit Card Loan Debt per Borrower | |||||||||||||||||||||||||||||
Q4 2009 | Q4 2010 | Q4 2011 | Q4 2012 | Q4 2013 | Q4 2014 | Q4 2015 | Q4 2016 | Q4 2017* | Q4 2018* | ||||||||||||||||||||
2.97% | 2.17% | 1.90% | 1.75% | 1.60% | 1.48% | 1.59% | 1.79% | 1.86% | 1.96% | ||||||||||||||||||||
$6,043 | $5,609 | $5,485 | $5,371 | $5,324 | $5,329 | $5,337 | $5,486 | $5,626 | $5,675 | ||||||||||||||||||||
*Q4 2017 and Q4 2018 include projections |
Inside the Auto Finance Forecast
60-Day+ Auto Loan Delinquency Rate and Average Auto Loan Debt per Borrower | |||||||||||||||||||||||||||||
Q4 2009 | Q4 2010 | Q4 2011 | Q4 2012 | Q4 2013 | Q4 2014 | Q4 2015 | Q4 2016 | Q4 2017* | Q4 2018* | ||||||||||||||||||||
1.59% | 1.27% | 1.11% | 1.15% | 1.23% | 1.19% | 1.27% | 1.44% | 1.43% | 1.46% | ||||||||||||||||||||
$14,922 | $15,031 | $15,377 | $16,061 | $16,781 | $17,456 | $18,004 | $18,391 | $18,588 | $18,694 | ||||||||||||||||||||
*Q4 2017 and Q4 2018 include projections |
Inside the Personal Loan Forecast
60-Day+ Personal Loan Delinquency Rate and Average Personal Loan Debt per Borrower | |||||||||||||||||||||||||||||
Q4 2009 | Q4 2010 | Q4 2011 | Q4 2012 | Q4 2013 | Q4 2014 | Q4 2015 | Q4 2016 | Q4 2017* | Q4 2018* | ||||||||||||||||||||
4.98% | 4.78% | 4.20% | 3.93% | 4.01% | 3.73% | 3.62% | 3.83% | 3.37% | 3.36% | ||||||||||||||||||||
$6,650 | $6,138 | $5,895 | $5,904 | $6,247 | $6,741 | $7,360 | $7,640 | $8,066 | $8,461 | ||||||||||||||||||||
*Q4 2017 and Q4 2018 include projections |
Why JPMorgan, Amex, HSBC are backing ‘isolation’ web browsing (American Banker), Rated: AAA
Often users are tricked by phishing emails that mimic a legitimate note from the boss or a senior corporate leader. And the links and sites can look secure. According to PhishLabs, nearly 25% of all phishing sites in the third quarter were hosted on HTTPS domains — almost double the rate of the previous quarter.
As part of their effort to deflect these attacks, some banks are turning to isolated browsing, or remote browsing, technology. Such systems force all internet activity to happen in a protected space on the cloud, preventing malicious code from reaching a company’s network. The technology is not brand new, but it is starting to gain traction as some large banks have finished their testing of it and are going public with their use of it.
JPMorgan Chase, American Express and HSBC announced Monday that they are leading a $40 million round of funding in the isolation-tech provider Menlo Security, bringing its total funding to $85 million.
Niche lending and fintech cross paths in Silicon Slopes (Utah Business), Rated: A
There are, however, entire demographics not serviced by tried-and-true lending institutions. Often, these folks’ credit score fails to meet a bank’s minimum standards. Or they need unconventional terms on an equipment or business loan. Whatever the reason, these transactionally marginalized sectors find themselves at the mercy of high-interest lenders. Or with no access to capital at all.
“There is a significant population of U.S. consumers who can’t get a loan,” notes Nate Heward, CFO at Acima Credit, a company that provides a point-of-sale credit platform.
Capitalism abhors a void
From the ubiquitous strip mall payday lender to the world of microfinance, a plethora of entrepreneurial solutions has emerged to get cash in the hands of would-be borrowers cut off from other avenues. These alternative lending practices have various degrees of reputability; a wide spectrum exists between the purely predatory lending shop, on the one hand, and the creative value-adding venture, on the other.
Scratching the consumer itch
In practical terms, Acima asks four simple questions of the would-be borrower:
- Do you have a three-month history with your current employer or source of income?
- Do you deposit $1,000 or more into your checking account each month?
- Have you had a checking account for at least 90 days?
- Is your checking account free from NSFs, excessive overdrafts and negative balances?
It’s all fintech
The companies profiled in this article may not be considered fintech firms per se; they’re not using technology to create a new financial paradigm a la Paypal, Indiegogo or Coinbase. They’re merely offering tried-and-true solutions to untapped consumer markets. Viewed from another angle, however, they’re fintech companies through and through. Acima, Progressive, et al are racing to deliver the most convenient financial solutions to the most people in their target customer base. And to do so, they’re relying on technology all the way.
Finance teams are ‘bottlenecking’ banks’ digital transformations (Tearsheet), Rated: A
Banks are working hard to beef up their technology and innovation teams, embrace agile developmentand move to acting like digital companies, but bank finance departments still do a lot of manual work and will start to hold their companies back from becoming digital entities. Finance teams are the control functions and scorekeepers of an organization, but if they can’t process data at the same speed as the rest of the organization they could slow down the speed of company mergers or product rollouts when competing transactions are already taking place.
Royal Business Bank Invests $ 500K in Lendistry Loan Fund, Providing Opportunity for Small Businesses in Underserved Communities (Digital Journal), Rated: A
Royal Business Bank, a wholly-owned subsidiary of RBB Bancorp, has made a $500K commitment to the Lendistry CRA Loan Fund I. Launched at a time when most banks were struggling, Royal Business Bank has been successfully serving the Asian-American community since 2008. While specializing in businesses engaging in trade with Pacific Rim countries, the bank also offers small business loans and residential mortgages.
First financial industry brief filed in CFPB English v. Trump case (Ballard Spahr Email), Rated: A
This afternoon (LT Editor: December 12,2017) the Credit Union National Association (CUNA), represented by Ballard Spahr’s Alan Kaplinsky, filed the first amicus brief from the financial industry in the English v. Trump litigation over who will succeed Richard Cordray as the head of the Consumer Financial Protection Bureau. CUNA supports the President’s authority to appoint an acting director.
Lawsuit: Trump appointee Mick Mulvaney has ‘no more right’ to lead CFPB ‘than Santa’ (Washington Examiner), Rated: A
A new federal lawsuit says President Trump’s “plainly illegal” appointment of Mick Mulvaney to be acting director of the Consumer Financial Protection Bureau must be reversed in favor of Leandra English, who also claims the title.
Ilann Maazel, an attorney for the Lower East Side People’s Federal Credit Union, told the Washington Examiner that the credit union is suing because of the feared effect of Mulvaney policies.
The legal dispute centers on whether the 2010 Dodd-Frank financial reform, which set up the CFPB, makes the deputy director the acting director if there’s a vacancy, or whether the older Federal Vacancies Reform Act gives the president that power.
US Bank sees success with Zelle (Business Insider), Rated: A
US Bank integrated Zelle — which has over 30 other banking partners like Bank of America (BofA), JPMorgan Chase, and Citi — last year. The bank saw a 104% increase in Zelle transactions in the past four months, and a 50% increase in customer enrollment in the P2P offering during that time.
To compete with big tech firms, banks need big-tech talent (American Banker), Rated: A
Nine years ago, D.J. Patil and Jeff Hammerbacher coined the term “data scientist.” Four years later, Patil and Thomas Davenport deemed the profession “the sexiest job of the 21st century” in the pages of Harvard Business Review.
For banks, this imbalance is particularly challenging at a time when the industry is increasingly vying for the same talent the tech giants are aggressively courting. To stay competitive, the financial services industry must defend against a new cast of competitors by changing how it attracts, hires and develops data science talent.
BitGo Raises $ 42.5M in Series B Funding (Finsmes), Rated: A
BitGo, a Palo Alto, CA-based company which makes digital currencies usable for businesses in a regulated economy, raised $42.5m in Series B financing.
The company intends to use the funds to accelerate enabling businesses to integrate digital currencies into their existing financial systems.
AI 100: The Artificial Intelligence Startups Redefining Industries (CB Insights), Rated: A
5 Promising Early-Stage Startups to Watch (Tech Startups), Rated: B
Throtle is a 2nd generation data onboarding company focused on deterministic matching, identity resolution and closed loop enablement, powering brands and companies with their omnichannel marketing efforts.
Affirm is a San Francisco-based financial service startup that offers installment loans to consumers at the point of sale. Its aim is to improve the banking industry to be more accountable and accessible to consumers.
Homebuying With Alternative Credit (Microbilt), Rated: B
United Kingdom
Digital challenger Starling to hit profit in 2019 says founder Anne Boden as European expansion takes crucial step (City A.M.), Rated: AAA
Digital-only challenger bank Starling will “definitely” be in profit by the end of 2019, its chief executive told City A.M., as it announced a major step in its plans for European expansion.
The bank will today announce it has become a direct member of the single euro payments area (Sepa), which allows credit transfers, direct debit and card payments in euros across the whole of the EU.
Crowdfunding a mission to save capitalism from itself (Financial Times), Rated: AAA
Jeff Lynn is on a mission to save capitalism from itself at a time when millions feel locked out, and unable to foresee themselves better off than their parents. His answer: to democratise capital.
That is one reason he founded Seedrs, an online platform through which individual investors can buy shares in high-growth companies at an early stage — a privilege once reserved for institutions and private equity funds. The other reason was to make money.
Seedrs, which along with Crowdcube dominates the UK market, has funded more than 540 deals, representing £280m of investment. Some were follow-on rounds, and in total about 400 companies have been funded. About 20-30 companies are live on the site at any time.
Crowdfunding by numbers
Critics say a big difference between crowdfunding and the stock market is liquidity — you cannot just sell your stake. But Seedrs has begun a secondary market and says it has had several exits already.
Free Agent, a Scottish maker of accounting software, floated in November 2016 at 87p. Its shares remain below the 100p Seedrs investors paid, though some sold when it hit 140p this year. Chapel Down, a vineyard, was already quoted on the Nex exchange (formerly ISDX) when it raised money at 28p a share in October 2014. It has been trading around three times that level.
China
SenseTime Raises US$ 410M Series B Financing (Finsmes), Rated: A
SenseTime, a Chinese artificial intelligence company focused on computer vision and deep learning technologies, raised US$410m series B1 B round of financing.
SenseTime has powered many industries such as finance, security, smart phone, mobile Internet, robotics, and automobile with core computer vision technologies including face recognition, video analysis, character recognition, and autonomous driving.
European Union
Linked Finance Launches New P2P Lending Pension Accounts (Better Business), Rated: AAA
Irish peer-to-peer lending company Linked Finance has launched a new type of account that allows holders of self-administered pensions to make P2P lending to Irish SMEs part of their pension investment portfolio.
With net returns of between 7 and 8.5 per cent, 24/7 online account access, complete control of lending activity, and monthly repayments of principal & interest, P2P lending is becoming an attractive asset class for a growing number of investors.
Mobile bank N26 partners with crowd-lending platform Younited Credit in France (Telecompaper), Rated: A
European start-up N26 has expanded the range of its banking services on offer in the French market via a partnership with Younited Credit, a fintech start-up specialising in short-term loans and crowd-lending.
The Advantages of #Peer-to-Peer Lending (EU Reporter), Rated: A
For many years, if someone wanted a loan, they would have to apply for one through a bank. Before they received that loan, the bank investigated their credit and decided what the rate of interest would be applicable.
However, there is another way to get a loan without worrying about a low credit score or high interest rates. This is peer-to-peer lending or P2P. Through peer-to-peer lending platforms, individuals can invest their money in other individuals, with an interest rate that the two groups have agreed is fair.
Hungarian fintech secures EUR 6 mln in Czech funding (Portfolio.hu), Rated: A
The investor will first acquire a 20% stake in Barion, which is active in online and mobile payments, for EUR 2 mln.
Finnish Crowdfunding & P2P Lending Platform Fellow Finance Receives Payment Institution Authorization (Crowdfund Insider), Rated: B
Finnish crowdfunding and peer-to-peer lending platform Fellow Finance announced on Tuesday it received payment institution authorization from the Financial Supervisory Authority of Finland. The online lender claims it is the first funding platform to receive this type of authorization, which will notably enable Fellow Finance to provide new services to its consumer and corporate customers, to expand its services further in Europe and to utilize the new payment service directive (PSD2) in the development of Fellow Finance service.
With Norrsken House, ex-Klarna executive envisions a global network of co-working spaces focused on impact (TechCrunch), Rated: A
He launched the Norrsken Foundation later that year with about $20 million of his own money. By early 2017, the first fruits of that funding took shape with the opening of Norrsken House, a co-working space in Adalberth’s hometown of Stockholm dedicated to companies that are developing technologies that have a social impact.
Now, Adalberth has committed an additional $62 million of his own money to expand that vision. The goal, he said, is to eventually create a network of 25 impact-focused co-working spaces and foundation hubs around the globe in the next 10 years. The first Norrsken House has 112 companies in it and seven have received direct investment from the Norrsken Foundation’s fund (more on that in a bit).
International
ID Finance raises $ 8.5m via exchange-traded bonds to support growth (Finextra), Rated: AAA
ID Finance, the emerging markets fintech company, today announced successful completion of its first issuance of exchange-traded bonds.
Banks, fintechs and a Brit royal to build green-lending blockchain (American Banker), Rated: A
Could fintech help the planet cope with climate change?
Some major players — Prince Charles; bankers from Barclays, Standard Chartered, and BNP Paribas; three fintechs; and professors from the University of Cambridge — all hope the answer is yes.
On Tuesday at the One Planet Summit in Paris, they are expected to announce they are developing blockchain technology that lets banks see which potential borrowers use environmentally sustainable practices and therefore are worthy of preferential lending terms. Such disclosures presumably would put pressure on companies to pollute less.
Australia
RateSetter’s Australian business hits $ 200m milestone (AltFi), Rated: AAA
RateSetter Australia has hit the AUD$200m mark in lending a little over three years removed from launching down under. The platform, which lends to both businesses and individuals, has doubled its lending volumes over the past six months.
Interestingly, 56 per cent of its investors withdrew money from bank savings accounts in order to divert them into the platform, while a further 17 per cent reallocated money from bank term deposits. The greatest proportion of the platform’s investors are millennials, at 58 per cent, although they invest the least amount of money on average of any age group at $9,454. Retirees (aged 65 and over) by contrast invest an average of $66,118.
India
Understanding the Data Protection White Paper Part XI: Establishing proper deterrent consequences for privacy violations (Tech 2), Rated: AAA
This article is Part 11 of a multi-part series explaining the recently issued white paper on data protection in India. You can read Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9 and Part 10.
Consider also the case of Sitesearch in the US, where the company bought payday loan applications and sold them to third parties, which included fraudsters, who used the data to steal more than $25 million from user accounts. Such careless buying and selling off of data should not be justifiable in the name of consent. While safeguards such as requiring that companies transfer data to only to companies with a comparable level of privacy provisions help, these must be backed up by huge penalties for violations.
For example, consider the Equifax data breach, the breach of a credit information company, leading to the loss of crucial data of over 143 million Americans. This breach was the result of a vulnerability in their web application software, a vulnerability that was discovered and for which a patch had been issued at least 2 months before the actual hack. The breach of this crucial data was thus the result of negligent, or non-implementation of the patch.
A landmark privacy judgment in India is the Canara Bank case, which struck down a provision in a law, which allowed the authorisation of ‘anyone’ to conduct investigations and demand the production and seizure of documents, including bank documents. Such a wide delegation of powers can allow any and everyone, even unscrupulous actors, permission to gain access to confidential data, which should not be allowed.
This case draws attention to an important aspect of data protection — it must be ensured that investigations, at all times, must be authorised, and by authorised personnel only. Any violations, or even exceeding of powers must be punishable.
Asia
8Percent leverages power of platform (Korea Herald), Rated: A
Companies that have used the 8Percent platform include Korea’s leading vehicle-sharing app operator Socar, solar energy firm S-Power and restaurant chains Power Plant and The Booth.
For example, a P2P investor into Socar was given a 1-hour free-driving offer each month for a year, until the loan matured. The offer was part of a return to about 600 retail investors, who lent a combined 1.3 billion won ($1.19 million) to the car-sharing firm in July 2015.
Vouchers for restaurants, such as Power Plant and The Booth, were given as rewards to investors.
According to a December estimate by 8Percent, three-fourths of investors, who offered an accumulated 97.7 billion won in loans, were from metropolitan areas — either Seoul or Gyeonggi Province — while those in their 20s or 30s accounted for over three-fourths of investors. The investors, without tax being deducted, are offered on average 9.78 percent interest for investments.
Some 65 percent of its borrowers — about 5,000 – had a credit rating between 4 and 6 on the scale of 1 to 10.
MENA
Crowdfunding real estate: a new reality booming? (Gulf News), Rated: AAA
Similarly, online REITs use online platforms and digital technology to enable wider access to REITs and quicker dissemination of REIT information. This allows mass participation and broader wealth distribution.
The ticket size to crowdfund a $1-billion airport is not exactly for everyone. However, a three-bedroom apartment in Mumbai, Manchester or Dubai Marina jointly owned by a hundred individuals sounds realistic. It also helps diversify risks for investors.
Smart Crowd is a crowdfunding platform, very different from an online REIT. The company believes it can enable anyone with Dh5,000 in savings to enter the Dubai property ladder. Its platform is awaiting final regulatory approval from the Dubai Financial Services.
Israel
MK Rachel Azaria threatens banks with P2P legislation (Globes.co.il), Rated: AAA
MK Rachel Azaria, chair of the Knesset Reforms Committee (officially known as the Special Committee on the Planning and Building Bill and the Maternity Leave and Parenting Bill) did not like the draft circular released by the Bank of Israel on regulating the relationship between the banks and the digital peer-to-peer (P2P) lending platforms on Sunday.
Azaria is now threatening to promote legislation that will regulate relations between the banks and the platforms, but this appears to be designed to pressure the Bank of Israel to publish new, more focused guidelines .
South America
Creditas Raises $ 50M in Series C Funding (Finsmes), Rated: A
Creditas, a Sao Paulo, Brazil-based digital secured loan platform provider, raised $50m in Series C funding.
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