Daily News Digest

bank-fintech partnerships

Consumers are increasingly finding that new technologies are making online lending more accessible, simple and affordable. Online lending has entered the mainstream, yet it is still a long way from challenging the domination of banks in our financial lives. Online lending has also evolved from being a competitor of traditional banks to a collaborator for greater […]

bank-fintech partnerships

Consumers are increasingly finding that new technologies are making online lending more accessible, simple and affordable. Online lending has entered the mainstream, yet it is still a long way from challenging the domination of banks in our financial lives. Online lending has also evolved from being a competitor of traditional banks to a collaborator for greater success.

A LendIt 2018 panel discussion moderated by Kevin Wack, a reporter at American Banker, delved deeper into these emerging partnerships between banks and online lenders. The moderator believes that the current discussion is the 2018 version of a 2015 discussion–partnering with banks.

In 2015, the discussion revolved more around how banks should respond to the rise of online consumer lending and whether they should become a part of the revolution. But the current discussion is about how the banking industry has shaped up with the advent of online lending.

Introduction of Panel Members

Barclays: Jeremy Takle is the head of US Digital Consumer Bank at Barclays. Introducing the company, he shared that Barclays is a relatively new entrant in the US online lending segment. The company acquired Juniper Bank in 2004 and launched a consumer lending product in 2016.

Prosper: Usama Ashraf from Prosper discussed how his company emerged as the pioneer in US online lending. The Prosper platform was founded in 2006 and since has facilitatedAshraf over $12 billion in originations.

Lending Club: Sameer Gulati, the COO of Lending Club, was also a part of the panel discussion. Lending Club has done about $32 billion in loans, which runs the gamut of personal loans, business loans, auto re-financing solutions, and patient solutions.

Lightstream: Another panelist was Todd Nelson from LightStream, a company that works to extend loans for practically everything. LightStream is a branch of SunTrust, and making loans is an important part of SunTrust. It focuses on providing the same products as SunTrust but sets broader benchmarks.

Bank, Fintech, and Online Lender Competition

Gulati holds the view that there is an increasing amount of competition from banks, but this will increase opportunity for the industry. The competition will help make online lending a mainstream product. Ashraf also believes that bank competition is increasing, but marketplace lenders are the largest players in the lending space. Banks in the US have large deposits that enable them to grow the asset side of the equation at a comparatively cheaper rate.  As a result, competition is increasing, especially for personal loans.

Takle said fintech lenders are relatively new entrants in the lending space. The fintech sector has undergone a drastic transformation thanks to the changing role of technology and innovation. The huge addressable market that online lending could fill was a major factor that attracted Barclays to this market. Moreover, Goldman Sachs and other regional banks are entering into the market to tap into the huge opportunity.

Nelson believes LightStream is customer-centric. The company designs its products according to the needs of the customer. The debt products are designed to meet the clients’ requirements and to offer flexible repayment structures. When asked how different are the credit standards at LightStream, he said LightStream is a regional bank over 100 years old. The business has a modern risk appetite but is less aggressive compared to other banking companies in the space.

Credit Risk Appetite For Banks

Ashraf Wack said traditional banks have limitations pertaining to the type of risk they will take on due to their investor base.

Gulati discussed how banks are at the top end of the credit spectrum with 40% of buying volume. That comes to about $4 billion for Lending Club. The business is focused on devising ways to say yes to more people in the credit market and is dependent on non-traditional data to increase penetration in the credit markets.

Wack asked the panel to put forth their thoughts on how “Frenemy” is used as a familiar term for the banking sector and fintechs.

Ashraf said he believes collaboration between banking and fintech is critical. In the initial days, it was not clear how banks and fintechs should work together. But now the collaboration is beneficial as banks are meaningful buyers of loans and play an active role in the capital markets. The collaboration of banks with fintechs will also provide opportunities for cross-selling products.

Takle believes there are a lot of opportunities to collaborate across both vertical and horizontal segments in online lending. This allows for rapid scaling with significant funding and access to latent demand.

Bank-Fintech Partnerships

Talking about the growth of Lending Club, Gulati shared the framework for the company’s partnerships with banks. Lending Club has been able to add new product categories on the basis of its discussions with funding partners. He also thinks that protecting the intellectual property of a business is crucial to the growth of the business. At times, few partners are inspired by the business’s products and end up developing similar products.

Nelson went on to say that banks should not be thought of as a monolithic figure and advises online lending platforms not to compete with banks for customer acquisition, but to instead benefit from the combined capabilities of both spaces.

Ashraf believes these relationships usually start with one aspect and, over time, add more elements to a mutually-beneficial relationship.

The Relative Strengths of Banks and Fintechs

Ashraf said the expertise of online lending platforms in tech combined with banks’ ability to attract customers will together help the space grow.

Nelson believes that fintechs are successful in identifying the needs of the customer quickly and banks have expertise to develop scalable products to cater to these needs. He also praised billionaire founder of Prosper and Ripple Chris Larson for his long-term vision.

Talking about banking as a service and its appetite to fulfil the customer’s needs, Ashraf said that a lot depends on the product type and the space for which it is considered. There are three main ways that banks are currently considering the fintech space, he said:

  1. Regional banks are looking to access the customer base of fintechs
  2. Banks want to incorporate technology in their systems
  3. Banks and fintechs can collaborate on a variety of products

The Final Take

Takle believes there are a lot of customers who are looking to shop around for a single product. Gulati emphasized how important customer ownership is for a company. Most players operating in the space do not understand the meaning of the term nor its implementation in business.

Customers do not want to be owned. LendingClub believes that its job is to offer the products, services, and experiences but not to control the customer. If the customer’s need is matched better elsewhere, they should go there.

Prosper strives to offer the best customer experience and works to make sure that customers are well educated on the product that the business is offering.

Conclusion

Ending the panel with a final discussion on marketing partnerships, Nelson said businesses are operating in a space where there are big aggregators who commoditize products and there is massive competition on the price. Although price constitutes an important part of the entire equation, it must not be considered the only parameter. It is important that businesses understand products should not just be commodities in number but something that is a great experience for the customer and provides overall value to all stakeholders.

Author:

Written by Stephanie Vaughn.

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

LendIt Fintech USA 2018, April 9-11 in San Francisco, was a huge success. One of the more interesting panels was on how the non-banking sector is taking over point-of-sale (POS) lending. Kim Gerhardt, director at the San Francisco office of Edgar, Dunn and Company, moderated the panel. Other panelists included Peter Kalen, Michael Garrity, Mark […]

The Technology Edge: How Non-Banks are Seeking to Dominate Point of Sale Lending

LendIt Fintech USA 2018, April 9-11 in San Francisco, was a huge success. One of the more interesting panels was on how the non-banking sector is taking over point-of-sale (POS) lending. Kim Gerhardt, director at the San Francisco office of Edgar, Dunn and Company, moderated the panel. Other panelists included Peter Kalen, Michael Garrity, Mark Lorimer, and Camilo Concha.

Kalen is founder and CEO of Flexiti Financial, a Canadian company founded in 2013 that specializes in providing easy, instant POS financing through its award-winning mobile application process.

Garrity is co-founder, CEO, and president of a platform that has enabled merchants to facilitate consumer lending since November 2010. Financeit has processed over $2.5 billion in loan applications from thousands of merchants.

Lorimer represents LendingPoint, a lending company founded in 2014 that focuses on personal loans and debt consolidation. He is chief marketing officer. LendingPoint recently acquired LoanHero, which is in the POS lending business.

Finally, Concha is founder and CEO of LendingUSA, a company that provides innovative financing solutions with a specialization in POS lending. LendingUSA was launched in 2013 and caters to consumer finance in a variety of sectors from medical, pet care, consumer goods and services, etc.

Over the years, the POS lending industry has gained scale and seen a radical change. A convergence can be witnessed in the way payments are made and fintech lending is facilitated. The opportunity in POS financing is massive, and banks seemed to have missed the ball. Traditional banks strive to serve everyone, but when it comes to POS lending, merchants have to filter their prospective customers through a narrow funnel extending loans to a comparatively small customer base.

Flexiti Financial’s Entry in POS Lending

When Peter Kalen was asked about what brought Flexiti Financial into the business, the product that it is offering, and the level of traction it has been able to create in the market among other merchants, he articulated that Flexiti’s product is somewhat similar to what Synchrony or Alliance Data System is offering. Flexiti differs in the way transactions take place and aims to reduce the time consumed in the loan application process.

Many organizations issue private label credit cards, but application processes are long and approval rates low. With its experience and vision, Flexiti Financial has successfully introduced a 100% paperless process to offer instant POS financing. Its virtual credit card application can be downloaded from the Google Play store and the Apple store.

These private label cards speed up the loan application process, bringing the process down to three minutes. This is a win-win for retailers and customers. The platform improves the online retailer’s UX by removing the friction at the front-end.

Financeit and Point of Sale Lending

Garrity also shared his views on point of sale lending. He put emphasis on the fact that personal lending is more about new transactions and focuses less on lending. Everything in POS lending, from the technology to APIs is obsessed with enabling easy sales for merchants, improving their experience, and supporting them as they try to close more business. Merchants and customers want financing options, but they do not want to indulge in complicated programs.

Another area that Financeit targets is debt consolidation. The company has delivered a platform that makes it easy for businesses to offer powerful financing options to their customers from any device.

When asked about how they excel at delivering services to customers, Garrity said they have acquired Centah Inc, a company operating in home improvement work-flow and lead management software with joint partner and investor Goldman Sachs. The company redesigned its website to create a platform that manages the process, helps businesses connect with customers, provide dispatch scheduling systems, and represent financing options to customers throughout the process. He warnes other players that if they only focus on financing and not on the transaction, they will be missing out on an important aspect of dominating this space.

LendingUSA’s Role in POS Lending

Gerhardt asked Concha about his journey into this industry. Concha shared that LendingUSA focuses on point-of-need financing, which sits at the intersection of point of sale and fintech. He believes that businesses in today’s era are not required to be good but great if they want to be successful, and they are required to be great in all aspects, namely, marketing, technology, underwriting, and risk mitigation.

Concha started with a company called 1800mysurgeon that matched cosmetic surgeons with consumers. After starting the company, he realized the need for financing as an important part of the business. He decided to create a platform to interact with both surgery and finance to enhance the merchant’s experience.

LendingPoint’s Emergence In POS Lending

LendingPoint started as a direct consumer online lender specializing in 600-700 FICO score customers. Lorimer emphasized that the company understood very early that customer experience is crucial to POS transactions. Although the players in the market now are very good at generating products that banks like to own, they do not necessarily focus on the merchandise. LendingPoint simplifies the lending process by sharing risk and administering payment plans. LendingPoint also offers merchants risk programs to extend in-house, end-to-end services.

Marketing With Established Merchants

All the banks playing in the market are working to deliver better services to customers in different ways. The biggest players historically are Wells Fargo, Citigroup, and Synchrony Financial. They all have significant relationships.

The question is whether these big banks can be a part of this game. Concha believes that banks are an important part of the ecosystem. These banks are good for purchasing loans but are constrained by reputational risks, marketing, and other issues. Lorimer added that LendingPoint also works with some established banks. Talking of the role of hard pull and soft pull in availing credit, he shared that because a hard pull impacts the credit report of the customer, it is a cause for low approval rates. Soft pulls, on the other hand, do not affect the credit score of the credit seeker leading to a higher approval rate for loans.

Garrity shared his point of view on the tie-ups with established banks and financial institutions that become balance sheet lenders. He said they are participants in securitization, originations, and selling. He believes there is clearly an opportunity for all the stakeholder businesses to grow. Online POS lending usually operates separately considering the fact that it is complicated and technology-driven. Banks are, therefore, slow followers of fintech companies.

The Technology Edge Leads to Domination

The next important aspect analyzed was whether it is the technology that enables online POS lending businesses to dominate the lending space.

Kalen believes technology is the most important element of this space. Concha believes this space is all about keeping merchants and customers happy and building long-lasting relationships with them in the process. Lorimer questions the integration of technology among banks and whether banks will be able to adapt to complex technologies. He believes banks aren’t set up to do that, but to deliver a mass homogenous customer service. Garrity, on the other hand, believes the less you see the technology, the more attractive it is; he also thinks it is better for the merchant to focus on increasing the business close rates.

Talking about data management, Lorimer believes technology definitely provides an edge to the business on the back end. The data is the source for everything and it is analyzed and configured to improve the experience. As technology enables automation and brings security, users can access everything at one place and find it already stored in the system.

Kalen agrees that technology is a boon for backend data management. He added to the discussion saying that the more established players have an edge as they have been in business for many years. They have been able to hone their skills over a period of time.

Concha also believes that technology will work for the POS lending as it is different from other businesses. There is a major role of risk, debt, and strong relationships in POS lending, and none of these can be managed properly without technology.

The Challenges of POS Lending

Technology, scale, and partnerships:
Kalen from Flexiti views POS lending as a very different business than retail lending. Getting customers and coping with technology are major challenges. Other challenges that non-bank businesses face are focusing on the scale. It is important for the business to look at the credit cycle and beware of fraudulent practices as it increases the scale of operations.

Credit cycle:
Being on the right side of the credit cycle is crucial to every lending business. The access to credit in the credit cycle determines the risk and therefore the value of the business. Businesses must prepare their strategies, keeping the future in mind.

Regulation:
Lorimer believes this space requires more regulation since the Consumer Financial Protection Bureau (CFPB) is not very active. Poor regulation and lack of control pose a major risk to the players in the market.

Availability of capital and credit risk:
Another challenge is the availability of capital to extend lending facilities. The fear of credit facilities drying up in a day also bothers businesses.

The Takeaway

Kalen has realized that success does not come easy. The companies in this space need to understand that a lot of lending capital is required along with an understanding of the tricks of the trade.

Concha believes it is a 3-step learning process where the business is required to go through a testing phase, an education phase, and an adoption phase.

With LendingPoint’s recent acquisition of LoanHero, it is comparatively a new entrant in the market.

The crux of the entire discussion is that POS lenders must be specialized to survive in the market. The business has to endeavor to offer value added merchant services instead of being a one-stop shop to be successful. There is a lot of room for growth provided one understands the complexities of the trade.

Author:

Stephanie Vaughan is vice president at  Allen TaylorPosted on Categories Alliance Data System, alternative lending, Analysis, balance sheet lending, Banks, CFPB, Citigroup, consumer lending, Credit, credit risk, Featured, FICO, Financeit, Flexiti Financial, instant financing, LendingPoint, LendingUSA, LendIt 2018, Online Lending, point of sale financing, point of sale lending, POS financing, POS lending, Regulation, Synchrony Financial, Wells Fargo

Thursday April 19 2018, Daily News Digest

Personal Loan providers

News Comments Today’s main news: Tala raises $65M for international expansion. The House Crowd hits 1M GBP in one day. Silicon Valley investment into UK hits $1B. 100Credit gets $159M from state-owned fund in China. Mintos adds ID Finance loans issued in Kazakhstan. Today’s main analysis: The 5 best personal loans for good credit. Today’s thought-provoking articles: LendIt Fintech […]

Personal Loan providers

News Comments

United States

United Kingdom

China

European Union

Other

News Summary

United States

Fintech lender raises $ 65M to expand in developing nations (American Banker) Rated: AAA

A U.S.-based lender that targets borrowers in developing nations where credit scores are often hard to come by has raised $50 million in new equity funding.

Tala, based in Santa Monica, Calif., plans to use the latest round of funding to develop new products for its customers in Kenya, Tanzania, the Philippines, India and Mexico.

It also raised $15 million in debt capital that it will use to fund loans.

Wrap-Up of LendIt Fintech USA 2018 (Lend Academy) Rated: AAA

Last week the sixth annual LendIt USA conference took place in San Francisco. Officially known as LendIt Fintech USA 2018 this event was, in my opinion, the best we have ever produced.

The opening keynote, for the second year in a row, was delivered by Scott Sanborn, the CEO of LendingClub. He gave a different kind of presentation this year. He didn’t talk much about LendingClub at all, instead choosing to focus his keynote on financial health and the looming crisis that maybe coming. He gave us all something to consider beyond just disruption, he said we should think about three key areas: financial inclusion, regulatory innovation and customer alignment. He ended with a call to action for the industry. He wanted everyone to focus on what problem you are solving and what you can do to help restore financial health to all Americans.

The 5 Best Personal Loans for Good Credit (Student Loan Hero) Rated: AAA

The average credit score of Americans is 700, based on April 2017 data from Fair Isaac Corp., an analytics company that issues the FICO credit score.

If your score meets or beats that average, it’s enough to put you in the good credit score range, which goes from 670 to 739. As a result, you should have a good chance of getting approved for some of the best personal loans for good credit.

Source: Student Loan Hero

Your Best Options If You Need a Personal Loan With a Cosigner (Student Loan Hero) Rated: A

As you compare, you’ll find LendingClubCitizens Bank, and FreedomPlus— all online lenders that accept cosigners. They all accept FICO scores under 700, with LendingClub accepting FICO scores as low as 600.

Here’s a list of some online lenders that accept cosigners for personal loans:

  • LendingClub
  • Citizens Bank
  • FreedomPlus
  • Backed
  • OneMain Financial
  • LightStream

Avant vs. LendUp: Which Is Right for You? (Student Loan Hero) Rated: A

Not only will Avant consider your application even if you have a low credit score, but working with this lender has other benefits.

  • You can get your money after one business day.
  • There are no prepayment fees.
  • Although the average customer has a credit score between 600 and 700, those with poor credit are also considered.
  • The company has a 95% customer satisfaction rate.
  • The lender offers self-service tools and live support seven days a week.

The biggest benefit of LendUp is the ability to get money fast. In certain states, you could even have your funds in 15 minutes. But there are some other positives as well.

  • There are multiple options if you’re having trouble paying back the loan.
  • Repeat customers can borrow more and at lower rates.
  • There’s an education platform with free videos and articles breaking down complex financial matters. It also teaches you how to make better money decisions.

Wunder Capital Raises $ 112 Million in Financing To Fuel Commercial Solar Growth in the U.S. (Crowdfunder Insider) Rated: A

Wunder Capital, a firm that develops and manages solar investment funds through partnerships, test processes, underwriting framework and its investment portal, announced on Wednesday it secured $112 million in equity and debt financing to accelerate the growth of the company.

9 Ways To Invest In Real Estate Without Buying Property (Forbes) Rated: A

Goldman Sachs Has Big Plans for Marcus and the Future of Retail Banking (Crowdfund Insider) Rated: AAA

Blankfein commented on the other obvious strategic advantage. Their cost of capital is super low.  Unlike many of the early entrants into the online lending sector, Marcus has access to deposits via their acquisition of GE Capital Bank several years back – something no other US based online lender can claim. Even with their industry leading interest rate for current accounts (now 1.6% when most banks pay a fraction of that), Marcus can crush the competition in loan originations.

Goldman Sachs’ hot new business is lending to subprime consumers, and Wall Street’s starting to ask questions (Business Insider) Rated: B

Marcus has originated more than $3bn of loans since inception, recently it has become know that more than 10 percent of the loans were sub prime; they have said this is a natural evolution of the loan business and they are being very selective in approving of applications.

GreenSky Personal Loans Review: Low-Interest Loans for Home Improvement (Student Loan Hero) Rated: A

As an online loan servicer, GreenSky works with borrowers and merchants to provide low-cost personal loans for home improvement, specialty retail, and healthcare expenses. It’s funded more than $10 billion in loans to over 1.3 million customers, according to the lender.

Individual borrowers can apply for home improvement loans, which can be used for flooring, windows, landscaping, or other projects. Home improvement loans come with fixed APRs between 3.99% and 23.99%, as of April 18, 2018. You can choose terms of 42, 66, or 90 months. For the most up-to-date rates, check GreenSky’s website.

Real estate crowdfunding: What you need to know (Bankless Times) Rated: A

Right now, real estate crowdfunding companies are becoming very popular because they allow you to pool your resources in order to buy property or to finance real estate companies who are looking to build properties.

48 Million Detailed Psychometric Records on Individuals Leaked (InfoSecurity Magazine) Rated: B

About 48 million records of detailed personal information on tens of millions of individuals have been leaked, containing Cambridge Analytica–style information gathered and scraped from multiple sources.

The culprit, as is the case all too often, is a misconfigured cloud storage repository, in this case belonging to a company called LocalBlox. LocalBlox bills itself as a personal and business data search service, but it’s bread and butter is data-harvesting and the creation of psychometric profiles of individuals.

Point Initiates Forward Flow Purchase Program with Atalaya: Unlocking Home Equity Wealth (Crowdfund Insider) Rated: B

Point, a fintech platform that allows homeowners to unlock home equity wealth without taking on new debt, has agreed to a forward flow purchase program with investment firm Atalaya Capital Management to purchase up to $150 million of Point’s structured home equity investment instruments.

StreetShares Appoints Mohan A. Rao New Chief Product & Technology Officer (Crowdfund Insider) Rated: B

Financing military veteran-owned small businesses lender StreetShares announced on Wednesday it has appointed Mohan A. Rao as Chief Product and Technology Officer. According to the online lender,  Rao is the former Chief Technology Officer of Hobsons, Inc., and brings more than 25 years of experience with building software products, R&D, and management consulting to the StreetShares team.

Millennium Trust Recognized as “Professional Services Company of the Year” at LendIt Fintech USA 2018 (PR Newswire) Rated: B

Millennium Trust Company, LLC, was honored at LendIt Fintech USA 2018 as the “Professional Services Company of the Year,” which is awarded to the service provider that has demonstrated deep expertise, unique value, strong ROI, commitment to clients, and the fostering of a deeper understanding of fintech. Organizations such as Cloud Lending Solutions, Deloitte, First Associates, Manatt and Salesforce also received nominations for the award.

Capsilon Expands Digital Mortgage Platform, Automating up to 80% of Manual Data Auditing & Processing Across Back Office (Capsilon) Rated: B

Capsilon, an enterprise SaaS digital mortgage solution partner to the mortgage industry, today announced the expansion of its digital mortgage platform through the addition of big data capabilities and a new set of smart tools designed to radically improve back office workflows and accelerate loan production. With this new data audit functionality, Capsilon can reduce manual data entry and speed up data auditing across the loan process, enabling companies to automate up to 80% of manual processing functions.

 

United Kingdom

Crowdfunding platform hits £1 million in a day (Growth Business) Rated: AAA

Property crowdfunding platform The House Crowd have raised just over £1.3 million over a 24-hour period to support housing developments in Greater Manchester. This is the first time the business has broken the £1 million mark in a day.

Most of the money – £1.2 million – was for its Egyptian Mill Development of 42 house and 15 apartments in Lees, just outside of Manchester. Attracted by a typical return of 10 per cent each year over a 15 month investment term, investors have clambered to raise funds and support new build houses and flats as the UK housing crisis continues.

Silicon Valley investment into the UK breaks $ 1BN for the first time (Information Age) Rated: AAA

UK law firm Pennington Manches has today revealed that British companies are enjoying an unprecedented period of investment from West Coast-based US firms, with 74 deals contributing to a total value of £1.08 billion in 2017 – the first time Silicon Valley investment into the UK has broken the billion-dollar mark.

​The new report found that software companies take the lion’s share of this investment, benefiting from £2.2 billion in funds since 2011. The number of deals from Silicon Valley into UK firms has increased by 252% over that period.

P2P lending set to pass £9bn milestone (Peer2Peer Finance) Rated: AAA

LENDING at the UK’s largest peer-to-peer finance platforms is fast approaching £9bn.

Data from the industry’s trade body the Peer-to-Peer Finance Association (P2PFA), released on Thursday, showed its eight members – Crowdstacker, Folk2Folk, Funding Circle, Landbay, LendingWorks, MarketInvoice, ThinCats and Zopa – reached cumulative lending of £8.96bn at the end of the first quarter of 2017.

The figure is up 11.5 per cent on the fourth quarter and 57 per cent higher year on year.

Transferwise becomes first non-bank to join BoE payments system (AltFi News) Rated: A

TransferWise has become the first non-bank payment services provider to hold a settlement account in the Bank of England’s Real Time Gross Settlement (RTGS) system.

The new access should lower costs for Transferwise, one of the UK’s largest fintech start-ups, as TransferWise joins the Faster Payments Scheme (FPS also).

 

Alternative funding for SMEs demystified (Business Matters) Rated: A

However, as Business Matters reported back in December, over 40 per cent of companies say they would have to put their expansion plans on hold if they could not attain funding.

Research shows that most SMEs turn to traditional sources of funding – such as overdrafts, credit cards and bank loans – when they need a cash injection. What’s more, many are unaware of – or are unclear about – the recent expansion in alternative forms of business financing such as crowdfunding or P2P lending. That’s a shame, because many of these new funding options are very well suited to the needs of SMEs and start-ups.

Crowd2Fund prepares to cross fintech bridge to Australia (Finextra) Rated: B

Leading P2P lending platform Crowd2Fund are launching an Australian office by becoming one the first UK-based companies to utilise the new ‘FinTech Bridge’ between the UK and Australia.

Mechanics Cooperative Bank chooses Finastra for core banking system (Real Wire) Rated: B

Mechanics Cooperative Bank has selected the Fusion Phoenix core banking system from Finastra, as well as a full suite of ancillary offerings, to provide its new technology foundation. The solution will bring together a wide-range of proven, specialized software into a single environment that is more easily managed in the back-office, providing greater workflow and interface efficiencies for the bank’s staff, and ultimately customers.

China

CreditEase Wins Major Awards at LendIt Fintech USA 2018 (PR Newswire) Rated: AAA

As the exclusive “Global Leader” partner of LendIt Fintech USA 2018, Yirendai was awarded “Top Consumer Lending Platform” and was the only Chinese enterprise to receive a LendIt Fintech industry award, which demonstrates high recognition of its outstanding contributions to the innovation of the financial services industry. In addition, Ms. Yihan Fang, CEO of Yirendai was nominated for “Executive of the Year” and CEFIF was nominated for “Top Fintech Equity Investor”. Both nominations are strong recognition of the great achievements CreditEase has made in both wealth management and Fintech investment fields.

Fintech Start-up 100Credit Gets $ 159M From State-owned China Reform Fund (China Money Network) Rated: AAA

China Reform Fund Management Co.,Ltd, a private equity firm backed by China Reform Holdings Corporation Ltd and other central state-owned enterprises, has led a RMB1 billion (US$159 million) series C round in 100Credit, a fintech start-up that uses big data to provide credit services.

Existing investor Sequoia Capital China also participated in the round, according to 100Credit’s announcement on its official WeChat account.

Softbank leads $ 25m Modalku round, while 500 Startups backs HelloGold (TechinAsia) Rated: B

Alipay pilots digitized national ID cards (China). The digital payments app run by Alibaba affiliate Ant Financial is testing out integration of the Chinese government’s pilot digital ID card scheme, which could one day replace physical ID cards.

European Union

Orange’s entry into digital banking forces old guard to react (Financial Times) Rated: AAA

Orange Bank has already onboarded more than 100,000 customers since launch, only Revolut and Boursorama, Société Générale’s digital banking arm have made more progress in the same timeframe; this continues the wider trend across Europe as digital banking becomes a bigger part of the financial services ecosystem.

Swedish startup Tink just smashed open the floodgates to 300 banks’ data – and it’s a game-changer for Nordic fintech (Business Insider Nordic) Rated: A

Last year, after raising €14 million in funding from a consortium of traditional and online banks, Tink pivoted to licensing its technology to banks so they can build their own apps and fintech services.

The startup is now doubling down on its B2B business by launching a third-party developer platform. This means that the same technology that Tink has provided to banks like Nordea and SEB, will now be open to any company that wants to gain access to a given consumer’s account data (with the consumer’s permission).

The Crowdfunding Trend – Threat or Opportunity? (Eureka) Rated: A

There are some concerns that the rise of crowdfunding will cause major disruption across industries. According to the world bank, 2016 saw more money raised from crowdfunding than from venture capital.

In Finland, for example, there is no requirement for crowdfunders to have an MiFID licence, which means that companies who have obtained a licence are more strictly regulated than their unlicensed competitors. Other nations have been quicker to adapt – in France and the UK existing legislation has been brought smoothly up to date to be compatible with crowdfunding.

GDPR and financial advice: Special categories of personal data (Professional Adviser) Rated: A

The difference between ‘data’ and ‘sensitive data’ – that is, between Article 6, which we considered in more detail here, and Article 9 – is that the individual must give explicit consent to the processing of each type of special category of data.

If, for example, a firm will be asking someone whether they are a smoker and will also be recording they are a member of a specific trade union, then the firm would to need capture explicit consent from the individual that they are happy for the firm to collect and process this data about their health and their trade union membership.

For financial advisers, this consent will need to be gathered early in the customer engagement process, with it being made clear the data will be processed and what it will be processed for.

International

Mintos Marketplace Adds ID Finance Loans Issued in Kazakhstan (Crowdfund Insider) Rated: AAA

Mintos, an online marketplace that provides individuals with a simplified way to invest in loans originated by a variety of alternative lending companies, announced on Wednesday that fintech firm ID Finance has further diversified investment opportunities on the Mintos marketplace by launching personal loans listed in Euro (EUR) and Kazakhstani tenge (KZT) under its Solva brand in Kazakhstan.

According to the companies, Solva uses a scoring system built around machine learning, advanced risk assessment techniques, multiple search technologies, big data and text mining. The system also evaluates the device on which the loan application is being filled out and the user’s behaviour when filling out the application.

Mo money, mo cash (Financial Times) Rated: AAA

But according to a new report published by G4S, the massive 117-year-old global security firm, we’re actually still moving in the other direction — at least in most countries.

Poor old cheques. And cryptocurrencies don’t fare too well either.

India

US-based fintech firm announces its expansion in India’s lending space (Medianama) Rated: AAA

California-based fintech company Tala said that it is bringing its lending app to India. This expansion was announced along with a new $50 million Series C funding led by Revolution Growth its operations in the country which is already in progress. In addition to Revolution Growth, Tala’s Series C round includes existing investors IVP, Data Collective, Lowercase Capital, Ribbit Capital, and Female Founders Fund. Steve Murray, managing partner at Revolution Growth, will join Tala’s board of directors.

Asia

 

Singapore Fintech Association established Marketplace Lending Committee (Finextra) Rated: AAA

The Singapore Fintech Association (SFA) today announces the launch of the Marketplace Lending committee and website, in response to the rapid growth in the sector.

In 2016, Southeast Asia’s alternative finance market reached a record US$215.94 million, a growth of 362% compared with 2015. Data for 2016 showed that Singapore’s alternative finance market size was valued at US$163.75 million, more than double the entire value from 2013-2015. This upward trend is reflected internationally. The global lending market valued at US$3.5 billion in 2013, expecting to reach US$1 trillion by 2050, according to Statista, a market research company.

Revolut empire-builder seeking to tame “the Asian dragon” (AltFi News) Rated: A

Rishi Stocker, head of partnerships at Revolut, is currently focused on coordinating the banking challenger’s entry into Japan. Speaking to AltFi, Stocker said that the Japanese market, unlike others in Asia, is a tough nut to crack.

He said that regulators are “very keen on local presence and very concerned about international companies entering and then suddenly changing their strategy and leaving”.

To allow Revolut to set up shop in Japan, regulators have insisted that the fintech firm appoint an experienced local Japanese expert as a director of the entity. “That’s quite an interesting nuance of Japan whereas a lot of other markets are a lot more open – so long as there’s a strong compliance team based in our head office in London,” explained Stocker.

Authors:

George Popescu
Allen Taylor

Thursday April 12 2018, Daily News Digest

Thursday April 12 2018, Daily News Digest

News Comments Today’s main news: Upgrade to issues ABS–but when? FCA warns Funding Circle clone. Funding Circle Netherlands approved for Guarantee SME Credit Scheme Participant. Today’s main analysis: The metro areas with the most fraud alerts. Today’s thought-provoking articles: The regulation of marketplace lending (A MUST-READ REPORT). LendIt, PitchIt award winners. Is China Rapid Finance close to profit? GDPR consent […]

Thursday April 12 2018, Daily News Digest

News Comments

United States

United Kingdom

China

European Union

International

Other

News Summary

United States

Ex-LendingClub chief’s new venture set to issue ABS (GlobalCapital), Rated: AAA

Upgrade is said to have a private warehouse facility in place and is looking to debut a securitization in the coming months, according to two people familiar with the matter.

According to an April 2017 press release, Jefferies is advising the company on its capital markets strategy and is….

LendingTree Ranks Metros with the Most Fraud Alerts (PR Newswire) Rated: AAA

With millions of Americans affected by data breaches every year, such as recent revelations at Uber and Equifax, LendingTree decided to look at anonymized data from a sample of the over 7 million My LendingTree users to see where people are most likely to have asked a credit bureau to place a fraud alert on their credit report.


Key findings of the study:

  • The average rate of fraud alert requests among all cities reviewed is 6.4 percent.
  • Las Vegas and Houston tie for the highest rate of fraud alerts, at 13.6 percent.
  • Miami and New York are close behind, tied at 12.9 percent.
  • Rochester, N.Y. has the lowest rate of people requesting fraud alerts at 2 percent. Nearby Buffalo, N.Y. has 2.6 percent.

The Regulation of Marketplace Lending: A Summary of the Principal Issues (Chapman and Cutler) Rated: AAA

So-called “true lender” litigation remains one of the most significant risks facing the marketplace lending industry. These are cases involving a claim by a borrower or regulator that the “true lender” of a loan funded by a Funding Bank for a marketplace lender is the marketplace lender rather than the
Funding Bank. Often such litigation involves asking the court to look past the form of the loan transactions to their substance in order to ascertain which party, the Funding Bank or the marketplace lender, holds the predominant economic interest in the loans. The aim of true lender claims is to subject
the marketplace lender to federal and state regulation as a non-bank lender, enabling the claimant to pursue actions based on failure to comply with state lender licensing or usury laws.

Read the full report here.

LendIt Fintech Names PitchIt Competition Winners And Second Annual LendIt Industry Award Winners (PR Newswire) Rated: AAA

Out of eight PitchIt finalists, the judge’s winner was CreditStacks, a company that offers U.S. based premium credit cards to prime, new-to-credit customers. The audience winner was Narmi, a fintech company the helps credit unions and banks deliver a unified experience with modern and secure online banking, mobile banking and websites.

Below are the second annual LendIt Industry Award winners, per category:

Fintech Innovator of the Year

Affirm

Executive of the Year

Anthony Hsieh, Founder & CEO, loanDepot

Fintech Woman of the Year

Kathryn Petralia, Co-founder & COO, Kabbage

Blockchain Innovator of the Year

ConsenSys

Most Innovative Token Economy

AxiomZen

Top Consumer Lending Platform

Yirendai

Top Small Business Lending Platform

Kabbage

Top Real Estate Lending Platform

LendInvest

Emerging Lending Platform

LendingUSA

Excellence in Financial Inclusion

Oportun

Most Promising Partnership

LendingClub + Opportunity Fund

Most Successful Cross-Border Partnership

Kasisto + DBS Bank

Most Innovative Bank

Cross River

International Innovator of the Year

IrisGuard

Top Enterprise Technology Company

ThreatMetrix

Top Emerging Technology Company

MoneyLion

Top Professional Services Company

Millennium Trust

Most Innovative Mobile Technology

Juvo

Top Fintech Equity Investor

Edison Partners

Best Journalist Coverage

Tony Zerucha, Managing Editor, Bankless Times

Top Investment Bank in Fintech

FT Partners

To modernize consumer lending, it had to strip systems to the core (American Banker) Rated: A

Replacing core systems can be an expensive and risky proposition for banks, but KeyCorp has decided the time is now to replace an antiquated legacy system.

The $138 billion-asset bank announced at the Oracle Industry Connect conference in New York this week that it plans to ditch its existing lending platform in an effort to digitize and modernize the lending process.

Appeal could jeopardize CFPB win in landmark tribal sovereignty case (Reuters) Rated: A

Online lender CashCall filed a notice of appeal Tuesday in a Consumer Financial Protection Bureau enforcement action that set precedent on whether consumer lenders can evade state interest rate caps by affiliating with Native American tribes and invoking tribal sovereignty. In 2016, U.S. District Judge John Walter of Los Angeles granted partial summary judgment to the CFPB, holding that CashCall was the true lender, rather than a company owned by a member of the Cheyenne River Sioux Tribe, so state laws govern CashCall loans. The company’s notice to the 9th U.S. Circuit Court of Appeals, filed by its lawyers at Latham & Watkins and Skadden Arps Slate Meagher & Flom, indicated that CashCall will challenge the landmark summary judgment decision on tribal sovereignty, as well as other rulings by Judge Walter.

Judge Walter, however, concluded that the bureau hadn’t shown it was entitled to any restitution and that CashCall had not knowingly flouted consumer protection laws. He awarded the bureau only $10.3 million in penalties.

Optimizing Mortgage Loan Lifecycles With Fintech (the M Report) Rated: A

Integrated properly into both the trading and operational side of the mortgage lifecycle, fintech can not only increase margins but also allow for lenders to originate more loans in less time and in a more efficient and secure manner. Additionally, by using fintech throughout the mortgage lifecycle, each phase of management is enhanced and therefore produces optimized outcomes leading to better investment returns, while still providing the borrower with a great customer experience.

A “High Level” Tech-Enabled Residential Mortgage Lifecycle*

Source The M Report

*This chart is provided as a “high level” example of what types of fintech can optimize the lifecycle. It is not to be considered a complete integration or feature roadmap.

 

Big Banks Using Non-Bank Middlemen to Lend to Subprime Borrowers (Low Cards) Rated: A

If a borrower has a low credit score and needs a loan for a $12,000 vehicle, this would not be of interest to a large bank such as Wells Fargo. But it would be an option for a non-bank lender like Exeter Finance. Exeter would screen the applicant and approve the loan at their discretion. Then, Wells Fargo would extend a loan to Exeter. The bank is still profiting from a sub-prime loan, but they are giving the money to another lender.

This does not eliminate risk on Wells Fargo’s end. However, it does push the burden onto the non-bank lender, according to The Wall Street Journal.

Two’s company (Breakingviews) Rated: A

Silicon Valley is giving two of its most noted fintech outcasts a second chance. Former Social Finance boss Mike Cagney and erstwhile LendingClub Chief Executive Renaud Laplanche are each back with new loan ventures after losing their jobs to scandals.

Between them, both men created what are now the two largest fintech lenders, having originated or facilitated some $63 billion between them in the past few years.

Blockchain makes online lenders taste own medicine (Nasdaq) Rated: A

Blockchain is giving online lenders a taste of their own medicine. The likes of Prosper, Social Finance and On Deck Capital found cryptocurrency technology trying to steal the limelight at their annual get-together in San Francisco this week. It’s a case of the disruptors being disrupted.

United Kingdom

FCA issues warning about Funding Circle clone (Peer2Peer Finance News) Rated: AAA

THE CITY watchdog has issued a warning to consumers about a clone of peer-to-peer lender Funding Circle.

The clone, Funding Circle Loans, had set up a website purporting to be the P2P platform.

Its website, , has since been suspended.

Prestige Funds partners for Innovative Finance ISA bond (The Armchair Trader) Rated: A

Prestige Funds, a specialist direct lending manager, is partnering with UK-based Goji to launch a Renewables Lending Bond which is eligible for inclusion in an Innovative Finance ISA (IFISA). IFISAs are a new, tax-free way for investors to access investment opportunities that are not available on stock exchanges.

The Goji Renewables Lending Bond will include a yield target of between 5.5% and 6.5% over three and five year terms. Interest payments on the bond will be supported by UK government subsidies, such as Feed-in-Tariffs.

The need for speed for loan approvals and payments (Credit Strategy) Rated: A

Arguably, consumer lending has come full circle.

But today’s consumer lenders are having to contend with raised customer expectations. “Empowered borrowers,” says consultancy firm PwC, expect not only a simple, but also a fast loan process.

Consumer lending research published by PwC found that other than economic factors (interest rates and closing costs) or “having an existing relationship,” the speed of the process was the most important factor for borrowers in choosing a lender.

 

Higher salaries giving fintech sector edge over traditional banking (Finextra) Rated: B

The threat from Brexit has also called into question how Britain has – and will – deal with the country’s departure from the European Union in terms of its strong worldwide financial standing. With this in mind, Joblift has analysed and compared the UK’s Fintech and traditional banking sectors over the last 12 months. The analysis shows that traditional banking has felt the effect of the competition from Fintech and the upcoming Brexit with vacancies decreasing by 3% monthly, while Fintech seems to be flourishing, with a huge growth of 9% monthly, in the face of these challenges.

China

China Rapid Finance: Is It Close To Making A Profit? (Seeking Alpha) Rated: AAA

China Rapid Finance (XRF) went public on NYSE on April 28, 2017, as the beginning of the IPO wave for China P2P companies in 2017. The company focuses their business on meeting the credit demand for EMMAs (Emerging Middle-class Mobile Active consumer) in China.

  • China Rapid Finance (XRF) has experienced a business shift from lifestyle loans (larger in size) to consumption loans (smaller size), which will lead to bigger impact from regulatory hammer;
  • Q4 earnings results didn’t satisfy investors and stock price dropped 15% in two days after the ER release;
  • Despite of the short term concerns, operating efficiency has significantly improved in 2017, which makes the profitability outlook of the firm very positive.
Source: Seeking Alpha
European Union

Ministry of Economic Affairs and Climate Approves Funding Circle Netherlands As Guarantee SME Credit Scheme Participant (Crowdfund Insider) Rated: AAA

The Ministry of Economic Affairs and Climate (EZ) has reportedly approved Funding Circle Netherlands as a Guarantee SME Credit (BKMB) scheme participant.

According to AltFi, for participating firms, which are typically major banks, the BKMB provides guarantee of up to 75% of the loan amounts that fit within its criteria. 

GDPR and financial advice: Consent for data processing (Professional Adviser) Rated: AAA

A firm could be in trouble with the Information Commissioner’s Office (ICO) if an individual makes a complaint about being marketed to by a firm and there is no consent in place, since this constitutes a breach of the GDPR.

Article 6 – lawfulness of processing

Processing shall be lawful only if and to the extent that at least one of the following applies:

a. the data subject has given consent to the processing of his or her personal data for one or more specific purposes;

b. processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract;

d. processing is necessary in order to protect the vital interests of the data subject or of another natural person;

f. processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child.

International

Mega-deals continue to shape Asian market

After rounding off 2017 at a remarkable high bolstered by megadeals, Asia continued to see large deals in Q1 2018.

Global Q1 2018 key highlights

  • Global VC investment rose from US$46 billion in Q4’17 to US$49.3 billion in Q1 2018, a solid increase buoyed by five US$1 billion+ megadeals.
  • The number of global VC deals declined for the fourth straight quarter, falling from 3,286 in Q4 2017 to 2,661 in Q1 2018. The number of VC deals has dropped by half since reaching a peak of 5,480 deals in Q1’15.
  • The Americas set a new record for VC investment in Q1 2018, with US$29.4 billion raised across 1,782 deals. Asia raised US$14.6 billion across 317 deals, and Europe raised US$5.2 billion across 548 deals.
  • Corporate participation in global VC deals set a new record for the second straight quarter, rising from 18.5% in Q4 2017 to 21% in Q1 2018.
  • New and old unicorns – companies valued at over US$1 billion – attracted a significant amount of funding with US$14 billion across 32 deals. Two unicorns went public late in Q1 2018: cloud-based security provider Zscaler and cloudstorage provider Dropbox, with both companies seeing positive results to date. With Spotify set for a direct listing in April and UK-based online loan provider Funding Circle planning to go public later this year, the IPO market may be opening up.

How global fintech trends will impact your banking (Bank Rate) Rated: A

In the last few years, the U.S. has seen the launch of a whole crop of neobanks, consumer-friendly startups that are trying to change the way we manage our money. A bunch of neobanks have appeared in Europe, too (they are called challenger banks across the pond), and it seems like they are all eyeing the U.S. market.

Last year, French firm Revolut, which includes a crypto wallet and free international transfers among its features, announced its plans to expand into the U.S. Germany’s N26 recently raised $160 million from venture capital investors to fuel a U.S. expansion. Meanwhile, British startup Cleo, which is more of an AI-powered budgeting tool than a challenger bank, recently began offering its product in the U.S.

What’s Happening with P2P Lending Blockchain Startups in 2018 (Equities) Rated: A

That is why startups like Alchemy, SALT, Eth-Lend and Celsius can be game-changers not only in peer-to-peer (P2P) lending, but for the future of the American economy as well. Based on blockchain technology, these startups are committed to creating a safe, global, and accessible source of P2P lending.

The debt is then pooled into Collateralized Debt Obligations (CDO’s) which are then organized by risk and made available to purchase on the platform. This not only provides an easy and secure source of P2P funding, but creates a sustainable ecosystem and investment opportunity for anyone on the network.

Africa

The future of financial advice is tech and touch (Moneyweb) Rated: A

There is a lot of conversation around investing digitally, right now. Supporters of the idea suggest that investors should cut out their brokers or financial advisors and take their money online by investing through digital platforms. The argument goes that while an advisor might give your investments a bit of an edge in terms of growth, the fees they charge tend to negate the value that they add.

Since both financial advisors and technology have such an important role to play in supporting individuals in making the right financial decisions, and in the convenience of access to information about their spread of financial products, I recommend a “touch-and-tech” model of engagement.

MENA

Dipping Into Digital (Global Finance) Rated: AAA

The MENA fintech sector is booming, with more than $100 million raised by start-ups in the last decade. Dubai-based digital research network Wamda’s State of Fintech report released last March predicted the total for just that year would reach $50 million, an increase of 270% over 2016.

Although online payments, remittances, crowdfunding and peer-to-peer lending attracted the largest tickets, fast-growing fintech subsectors include cryptocurrencies, artificial intelligence and digital wallets.

In 2017 some of the major deals included a $20 million capital injection in Saudi Arabia’s online payment solution PayTabs; a $10 million round by three investors, including UK firm Gocompare, for Emirati price-comparison platform Souqalmal; $13 million for Emirati Cloud HR and insurance platform Bayzat; $5 million for Emirati peer-to-peer lending company Beehive; and $3.5 million for Emirati comparison website Yallacompare.

Lebanon was one of the first MENA countries to invest massively in the digital economy. Back in 2013, the central bank, Banque du Liban, issued a circular guaranteeing up to $400 million worth of investments in innovative technologies, later raising that amount to $600 million. Today, the country is home to 15 funding institutions, as well as a myriad of accelerators and start-up support programs.

New Realities, New Technologies (Global Finance) Rated: B

Surprisingly, the UAE accounts for 70% of the investments in areas such as digital banking services, cryptocurrencies, ecommerce and fintech start-up deals. For a nascent market, the growth rate is explosive, with dozens of new start-ups launching every year. So far, online payments, remittances, crowdfunding and peer-to-peer lending have attracted the largest investments. Late last year, Bahrain introduced the world’s first shariah-compliant fintech consortium.

Authors:
George Popescu
Allen Taylor

Wednesday April 18 2018, Daily News Digest

Wednesday April 18 2018, Daily News Digest

News Comments Today’s main news: OnDeck prices $225M securitization. Prosper is looking for new whole loan contributors for securitizations. Funding Circle lends 123M GBP to businesses in March. Funding Circle SME considers new equity raise. Ant Financial to raise $9B. Today’s main analysis: Competition among lenders worth $27K to borrowers last week. The grad degrees that deliver more debt than […]

Wednesday April 18 2018, Daily News Digest

News Comments

United States

United Kingdom

China

International

Australia

India

Other

News Summary

United States

On Deck Capital (ONDK) Prices $ 225 Million Securitization (Street Insider) Rated: AAA

OnDeck announced today that it has priced $225 million initial principal amount of Series 2018-1 Fixed Rate Asset-Backed Notes (the “Notes”) in a private securitization transaction. The Notes, which will be issued in four classes, were priced with a weighted average fixed interest rate of 3.75% per annum. It is expected that DBRS, Inc., in satisfaction of one of the closing conditions, will rate the Notes at closing. The anticipated DBRS rating for the Class A Notes would be the highest rating ever for a class of notes in an asset-backed securitization of small business loans in the online lending industry.

The Notes will be issued by OnDeck Asset Securitization Trust II LLC (the “Issuer”), a wholly-owned subsidiary of OnDeck. The Notes will be secured by and payable from a revolving pool of OnDeck small business loans. The Issuer will be the sole obligor of the Notes; the Notes will not be obligations of or guaranteed by OnDeck or any of its other subsidiaries. OnDeck will act as the servicer of the loans securing the Notes.

The net proceeds from the Notes offering will be used by the Issuer together with other available funds to optionally prepay in full a prior notes issuance (the “Old Notes”) that had a weighted average interest rate of 4.7% at December 31, 2017.

Prosper to keep PMIT shelf, but seeks new blood as loan agreement winds down (GlobalCapital) Rated:AAA

Prosper will continue to issue ABS from its long standing PMIT shelf, but is looking for new whole loan contributors for its securitizations as it eyes the end of a loan consortium agreement inked last February.

Prosper’s securitizations will retain the multi-seller deal format, in which whole loan investors contribute collateral to the securitizations, said three people speaking with GlobalCapital on the sidelines at the LendIt Fintech USA 2018 event in San Francisco.

Anthony Noto on leaving Twitter for SoFi, and what comes next (Axios) Rated: AAA

Former Twitter chief operating officer Anthony Noto just finished his first month on the job as CEO of SoFi, the “unicorn” financial services company whose former CEO was booted late last year after allegations of sexual misconduct.

Axios spoke to Noto about the new job, growth plans, recruitment and that long-rumored IPO. The quick read:

  • He had always wanted to be a CEO, and felt he had accomplished what he set out to do at Twitter.
  • He believes SoFi is a cultural reclamation project, but that the core business is strong.
  • SoFi wants to launch a membership-type credit card.
  • The firm has no plans to either IPO or fundraise in 2018.
On joining SoFi as CEO, after stops at Twitter and Goldman Sachs:

“This opportunity leverages all of my professional background as a tech person, as a consumer-facing person and from a financial industry perspective.

Heard at LendIt Fintech 2018 (Crowdfund Insider) Rated: AAA

Scott Sanborn, CEO of LendingClub:

“A reckoning is coming. The US is ground zero.There is a 37 trillion dollar shortfall in the retirement sector. This is coming and we cant just think we have 32 years to solve this problem.”

Omer Ismail, Chief Commercial Officer of Marcus:

“Since we launched 18 months ago we have done $3 billion in loans and we have $20 billion in deposits and about 500,000 in customers.”

Max Levchin, CEO and founder of Affirm:

“There are 10 to 15 million people in this country who need money and can probably borrow responsibly yet they end up at payday lending.”

Jay Farner, CEO of Quicken Loans:

“If a mortgage can be done in 10 [days] a personal loan can be done in 1 [day]”

In a Bad Month for Public Equity Markets, Local Isn’t Spared (Street Fight) Rated: AAA

Source: Street Fight

Coming off one of the worst months in recent memory, March saw big declines in the public equity markets. The SCP SMB Index was the least impacted, retreating 4.1% compared to all other major indices, which declined more than 5% during the month.

The SCP SMB Index declined 4.1% in March. The S&P 500, Nasdaq, and Dow Jones all experienced losses during the month of 5.1%, 5.2%, and 6.1%, respectively.

Returns since inception (indexed at Jan 4, 2016)

Since the inception of the SCP SMB Index in January 4, 2016 (where 100% is no change), here are the returns through March 29, 2018:

  • SCP SMB Index : 144.47%
  • S&P 500: 129.43%
  • Nasdaq : 141.73%
  • Dow Jones : 139.07%

Competition Among Lenders Worth Over $ 27,000 to Borrowers Last Week (Lending Tree) Rated: AAA

We calculate the Mortgage Rate Competition Index weekly as the median spread between the lowest and highest APR offered by lenders in our marketplace. By calculating this spread, we hope to show consumers how much they stand to save by comparing rates during the lending shopping process.

Purchase loans

  • Across all purchase loan applications on LendingTree for the week ending April 8, the index was 0.59, up 0.03 from the previous week.
  • How big of a deal is it to nab a mortgage rate that’s 0.59% lower than the competition? Over 30 years, that could translate to $27,339 in savings on a $300,000 loan (see Mortgage Savings Tracker graphic below).

Refinances

  • The index was wider in the refinance market at 0.65, up from 0.63 the prior week.
  • Borrowers shopping for refi loans could have saved $30,329 by shopping for the lowest rate.

Which Graduate Degrees Deliver More Debt than Income? (Credible) Rated: AAA

Credible’s analysis of student loan debt levels and salaries across 16 graduate school majors shows that the most important consideration isn’t how much debt you’ll take on to obtain an advanced degree — or how much you’ll earn after graduation — but achieving the right balance between the two.

Key highlights

  • A Credible analysis of more than 91,000 graduate degree holders with student loans found significant debt and income differences across 16 graduate degree majors.
  • Dentists, optometrists, and veterinarians tend to have student loan debt that’s the most out of balance with their earnings soon after graduation.
  • Even years out of school, optometrists, veterinarians, physician assistants, dentists and pharmacists devote more than 10 percent of their monthly income to their student loan payments.
  • Computer scientists, MBA holders, people with masters in finance degrees (not MBA) and nurses allocate the smallest proportion of their monthly earnings to pay down their student loan debt (between 6.4 and 7.1 percent).

AUTOGRAVITY EXPANDS VEHICLE FINANCING OPTIONS TO INTERNATIONAL STUDENTS THROUGH A NEW PARTNERSHIP WITH WESTBON (Lendit) Rated: A

AutoGravity, a FinTech pioneer that empowers car shoppers to buy and finance any new or used car in minutes from their smartphone, today announced a partnership with Westbon, the first lending platform for international students in the U.S. Through this unique partnership, Westbon financing options are now accessible to international students who use AutoGravity to finance their vehicle in the United States.

FINITIVE LAUNCHES ALTERNATIVE LENDING INVESTMENT PLATFORM WITH $ 1.3 BILLION OF INITIAL TRANSACTION VOLUME (Lendit) Rated: A

​Finitive LLC (www.finitive.com), a financial technology platform providing institutional investors with direct access to alternative lending investments, announced today the launch of its zero-fee platform.

Finitive, which commenced operations in August 2017, has received commitments for transactions with an aggregate capacity of $1.3 billion. Several asset managers and banks have committed capital for transactions in the consumer, renewable energy and commercial real estate lending sectors.

NSR Invest secures growth financing with FinSight Ventures (Lendit) Rated: A

Lend Core Inc., parent company to NSR Invest and LendingRobot, announced today the close of its first external financing round with FinSight Ventures. The investment will help the company expand its investor outreach, accelerate product development and strategic partnerships. FinSight Ventures General Partner, Alexey Garyunov, and Investment Director, Maxim Nazarov, will join Lend Core’s Board of Directors.

The company’s core technologies drive innovation through interactive analytics, custom modeling, algorithmic investing, order execution, portfolio management, and transparency through blockchain application.

Alchemy Peer-to-Peer Lending Will Help Millennials Dominate the Future of Finance (TechBullion) Rated: A

One blockchain startup, Alchemy, is using the technology to create a peer-to-peer (P2P) lending system that ensures transparency and guarantees security to its participants.

Alchemy works by matching lenders and borrowers for the requested amount of capital. Because of the instant, global, and secure peer-to-peer interactions that blockchain facilitates, costs of service are kept incredibly low. Interest rates are kept as close to a free market determination as possible, ensuring a fair consumer experience that often eludes customers of big banks.

Quovo Launches New Products to Improve Lending Value Chain (Lendit) Rated: A

Quovo, a data platform that provides connectivity to consumer financial accounts, announced today at LendIt Fintech USA, new products that equip lenders with insights to streamline and improve key processes in the lending value chain, adding to Quovo’s ability to assist with underwriting, funding, and ongoing servicing workflows.

Income + Expense analyzes and summarizes recurring and irregular income and expense streams, creating a fuller picture of cash flow in linked accounts. Balance Estimator uses historical cash flows to predict future account balances up to 30 days in advance, giving loan servicers a key perspective on when customers can most
effectively meet their payment obligations.

Income + Expense and Balance Estimator provide valuable cash-flow-based insights that can be combined with Quovo’s core data products—such as Aggregation and Authentication—to create end-to-end solutions for lending, from the first loan application to the last servicing event.

MoneyLion Announces the Big Alternative to the Big Bank (Business Wire) Rated: A

MoneyLion today announced that it will be expanding its popular MoneyLion Plus membership with a full suite of checking and savings capabilities. With these additions, the new MoneyLion Plus membership will provide a comprehensive banking option for anyone with access to a smartphone, becoming the one and only financial membership consumers need to build wealth, improve credit and manage day-to-day spending.

DebtBench Consolidates The Business-to-business Loan Marketplace Into One Place (Benzinga) Rated: A

DebtBench: We are creating an Open Banking marketplace structure where business borrowers can connect and gain access to capital at lower rates, in far less time, than they would by going to a brick-and mortar institution. According to our estimates, banks, credit cards and other lending institutions generate $870B+ each year in fees and interest from over $3.2 trillion in lending activity. The interest rate spreads gained by financial institutions can be minimized.

Intrinio to Release API v2, Making Financial Data Even More Accessible (Lendit) Rated: B

Intrinio, a fintech company providing access to over 200 financial data feeds, will be releasing their API v2 this quarter.

Intrinio’s API v2 is built on the OpenAPI specification, which is a community-driven, open source, standardized API spec within the OpenAPI Initiative (OAI), a Linux Foundation Collaborative Project. This allows both humans and computers to discover and understand the capabilities of a service without requiring access to source code, additional documentation, or inspection of network traffic.

OCC Gearing Up To Publish Position On FinTech Charter (PYMNTS) Rated: B

The Office of the Comptroller of the Currency (OCC) is getting ready to release its position on a proposed charter for online lenders and other FinTech companies in the next three months.

AI and the next step in financial management tools (Venture Beat) Rated: B

An Aite Group study finding has the answer. More than 75 percent of 22- to 49-year-old consumers are interested in this kind of advice and guidance around reducing debt, achieving savings goals, and tracking their finances, as well as optimizing their overall financial health.

Funding Your Dream: Financial Tips for Startups (Axcess News) Rated: B

 

Small Business Loans

Companies like the Lending Club, make it easy for you to apply for small business loans online. You can receive several thousand dollars towards your business expenses.

 

Building a Strong Credit History Without Using Credit Cards (Analyst of Finance) Rated: B

Although many people turn to credit cards to help them build credit, there are other tools individuals can use to improve their credit scores. Since some people have trouble managing credit card debt and do not want to pay high-interest rates, they often turn to alternatives to help them build a solid credit history. Here are a few of those alternatives.

Loans to Help Build Credit
Some banks and credit unions will offer their members what are known as credit builder loans. The goal is to pay off the loan before the maturity date.

Peer-to-Peer Lending
Instead of going through a traditional financial institution, borrowers can apply for loans offered by individual investors. Known as peer-to-peer loans, consumers can apply using a reputable P2P lending website or service. The loans typically offer reasonable interest rates, and this type of financing is completely legitimate.

United Kingdom

Funding Circle lends £123m to businesses in March (Bridging & Commercial) Rated: AAA

The figure represented an increase on the £113m lent in February.

The company announced in its monthly review that in March it provided 1,831 businesses with access to finance and created 4,670 jobs (directly and indirectly) via its platform.

Funding Circle lent over £701m from September 2017 to March 2018 and more than 10,500 small businesses accessed finance through the platform in the same period.

Funding Circle SME fund considers new equity raise (Peer2Peer Finance) Rated: AAA

THE FUNDING Circle SME Income Fund is considering a potential equity raise as it assesses its growth options.

Any issue of shares or sale from treasury would be priced at NAV plus a premium to cover all issue costs, the fund said in a stock exchange announcement on Monday.

MarketInvoice joins NatWest Capital Connections panel (Finextra) Rated: A

NatWest has added invoice finance platform MarketInvoice to its Capital Connections panel, which helps SMEs unable to borrow from banks get access to alternative sources of money.

Liberis raises £57.5M to offer finance for small businesses paid back via customer card transactions (TechCrunch) Rated: A

Liberis, the London-based fintech that provides finance for small businesses, has raised £57.5 million in new funding to help support the company’s growth. The alternative finance provider makes loans against a company’s future credit and debit card sales.

The majority of the new capital being raised by Liberis  is debt, which in turn will enable it to issue more loans. The facility is being provided by British Business Investments (the commercial arm of the tax payer-funded British Business Bank), Paragon Bank, and BCI Finance.

In addition, Blenheim Chalcot has made an equity investment into Liberis. The so-called “digital venture builder” also previously backed Clearscore, the credit scoring startup recently acquired by Experian.

As good as it ap(peer)s? (Metro) Rated: A

■ Peer-to-peer lending is becoming popular in low interest times, but it’s controversial

Peer-to-peer remains controversial, especially since the government approved a new type of Isa, the Innovative Finance Isa (Ifisa), in April 2016 that allows customers to receive income from the peer-to-peer loans they make free of tax.

There are many questions you will need to ask before lending your cash. Here are some of the most important:

What returns can I really get?

When faced with the best-buy rate on an instant access current account (around 1.3 per cent according to Moneyfacts), or on a five-year, fixed- rate bond (2.75 per cent), it’s hard not to find the headline rate you would receive from a peer-to-peer lending site very attractive.

Is the platform a member of a reputable association?

The Peer-to-Peer Finance Association is the main trade body, though not all companies involved are members. Check membership at p2pfa.org.uk. Robert Pettigrew, director of the association, says: ‘Investors should understand the nature and level of risk to which they are exposed, so that they can ensure that it is commensurate with their individual risk appetite.

 

China

Jack Ma’s Ant Financial to Raise $ 9 Billion, Become World’s Biggest Unicorn (Wall Street Journal) Rated: AAA

Ant Financial Services Group, carved out of his e-commerce giant Alibaba Group HoldingLtd. BABA -0.52% seven years ago, is preparing to raise $9 billion in a private funding round, according to people familiar with the matter. That ups a previous fundraising target of $5 billion.

Ant, which owns popular mobile payments network Alipay and is one of China’s largest non-bank lenders, is currently in talks with potential investors and demand for its shares has so far been strong, the people familiar said.

The latest funding round could value Ant at close to $150 billion, according to the people, making it by far the world’s largest unicorn—a term used to describe private companies valued at over $1 billion.

X Financial Provides a Chinese Fintech Perspective at LendIt USA (Markets Insider) Rated: A

“Fintech is playing animportant role in China. Given the demands for consumer finance are not yet fully satisfied and credit system is not perfect, financial technology has a golden development opportunity in Chinawhich leads the world in data mining and processing capabilities in the mobile Internet market.” said Simon Cheng, President of X Financial, a leading fintech company in China at LendIt USA recently.

International

Is the Banking System Up for Disruption? (GURUFocus) Rated: A

The popularity of blockchain technology has grown over the last several years as the hype surrounding the cryptocurrency market has thrived. Nearly every industry is currently exploring options on how they can use this disruptive technology to make a difference in the market. Its impact on various sectors has attracted big technology companies like Microsoft Corp. (NASDAQ:MSFT) and International Business Machines Corp. (NYSE:IBM). They ventured into distributed ledger technology architecture to augment their existing businesses while simultaneously trying to exploit emerging opportunities in the industry.

Over the last two decades, the financial services sector has experienced a major technological shake-up, with emerging industries like fintech playing a vital role. PayPal Inc. (NASDAQ:PYPL) disrupted the payments industry by introducing online methods of payment. While some said credit cards and checks would be phased out in due time, they are still crucial products. It remains to be seen how long they will last, though.

On the other hand, peer-to-peer lending platforms like LendingClub Corp. (NYSE:LC) and Zorpa reinvented lending and, in the process, sparked debates on whether they could eventually overtake traditional lending in the credit market. Nothing of the sort has come to pass, yet. In fact, after peaking in the first half of the current decade, peer-to-peer lending may have started to experience a slowdown in growth.

RESPONDING TO TECHNOLOGY DISRUPTION IN WHOLESALE BANKING (International Banker) Rated: A

In this article, we explore two areas that have attracted significant interest by FinTech innovators:

  • Marketplace lenders (MPLs) that are disrupting traditional credit-underwriting models with lower overhead, higher transparency, faster loan approval and higher returns on capital.
  • Blockchain-based supply chains with the potential to disrupt entrenched payments and credit processes by managing the physical and financial flows associated with commerce. In addition, we discuss approaches to IT spending and innovation that banks can take in response.

Ezira – The distributed social media and business platform (AMBCrypto) Rated: A

Ezira will utilize the delegated proof of stake decentralized consensus algorithm used by Bitshares, EOS, and Steem. Ezira will operate on a new public blockchain, will provide a flagship user application, and a multi-token circular economic model. It will have a fairer token distribution and will share drop 10% of the EZIRA asset onto the cryptocurrency community.

The Ezira network will offer users access to a suite of cryptocurrency and social media features during its release.

Content Rewards

Users will receive content rewards for posting according to the number of votes and views that each post receives. Once per day, a content reward payment will be distributed according to the stake weight of the accounts that upvoted and viewed the content.

Ezira Cryptocurrencies

Payments using Ezira currencies will have zero transaction fees and will receive confirmation within the 3 second block time. Users send EziraCoin to a stealth address and send payments using a ring signature, and use ring confidential transactions to conceal the payment amount.

Decentralized Exchange

Users will be able to use peer to peer lending to earn interest by lending their funds to other users, based on collateral, independent verification processes, and established creditworthiness.

Australia

Online lender Prospa challenges Australia’s big banks (Financial Times) Rated: AAA

Last year Prospa passed a milestone of providing more than A$500m ($385m) in loans to 12,000 businesses.

The company offers loans of between A$5,000 and A$250,000, over a term of three to 24 months, with no security required for amounts of up to A$100,000. Its platform enables business owners to apply within 10 minutes, receive approval on the same day and funding within 24 hours.

Annual interest rates on Prospa loans vary depending on risk but typically start at roughly 12 per cent and stretch into the mid-20s.

Prospa’s growth has been supported by venture capital backers, with AirTree leading a A$25m funding round last year that valued Prospa at A$235m. The funds enabled the lender to boost its staff to 165, build a direct distribution channel and sign up 7,000 intermediary partners.

Australia lags on digital banking revolution: Oracle survey (The Sydney Morning Herald) Rated: A

New survey results from US technology firm Oracle suggest Australians are less open, compared with consumers in other large economies, to engaging with the fintech revolution.

The survey, released on Wednesday, shows only 6.25 per cent of Australians regularly use a “fintech” bank, compared with 10 per cent in the United States, 12 per cent in Britain, and 40.5 per cent in India.

Despite a growing number of digital “robo advisers”, 9.75 per cent of local respondents said they used fintech wealth advisers services frequently, compared with 16 per cent in Britain and 21.5 per cent in United States.

India

P2P lending company Faircent.com launches its open API platform (ETRise) Rated: AAA

P2P lending firm Faircent.com will soon be opening its API platform for developers. The move will enable new fintech entrants and offline businesses to leverage the company’s technological infrastructure to build new digital lending products, as well as to integrate existing solutions into their offerings.

Faircent.com’s technology stack offers a wide range of solutions pertaining to online lending such as borrower and lender verification, credit evaluation and underwriting, and payment collection and recovery, among others.

Kae Capital infuses funds in P2P digital lending startup Loanzen (ENTracker) Rated: A

Loanzen, a peer to peer business loan marketplace startup, has raised an undisclosed amount of sum from Kae Capital. The Bengaluru-based digital lending platform had earlier raised an undisclosed seed funding from Angels through TracxnSyndicate.

The fintech firm will deploy fresh funds to expand operations. It also holds NBFC licence by RBI.

Asia

How is Fintech Making Credit Cards and Personal Loans Easier to Get? (TechWorm), Rated: AAA

Fintech firms have exploded onto the financial scene in Singapore and other mature markets in Asia in recent times. Focusing on disruptive technologies like peer-to-peer lending, affordable digital payment solutions, and more accurate risk analysis among other things, these startups are winning over customers by replacing the service delivery model used by traditional banks with user-friendly technologies.

Fintech Companies Are Changing the Process of Loan Offtake

Have you ever heard about Crowdo, Capital Springboard, FundedHere, or MoolahSense? These are peer-to-peer online lending sites through which you can raise funds by sharing your story. These crowdfunding sites are revolutionising the alternative lending space through disintermediation, cost optimisation, quicker delivery, and technology modernisation.

Players like Skolafund provide deserving students a chance to get funded by potential funders for pursuing education in an affordable manner. They can match profiles and ensure that the right student meets the right funder.

SMEs, often ignored by traditional banking channels, have found their go-to source for funds. Crowd Genie, which started in 2016, is helping SMEs get loans through crowdfunding.

MENA

Start-up crowdfunding: Window of opportunity (Arabian Business) Rated: A

After witnessing the 2011 Egyptian revolution, former journalist Ahmed Moor decided to launch Liwwa, a peer-to-peer funding platform that would address the MENA region’s $240bn SME funding gap by lending money to growing businesses.

Together with co-founder and CTO Samer Atiani (former senior software developer at New York-based online retailer Etsy), Moor has managed to lend over $8m to SMEs across the region since the establishment of the Amman-based firm in 2013.

Authors:

George Popescu
Allen Taylor

Tuesday April 3 2018, Daily News Digest

FT Partners

News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

FT Partners

News Comments

United States

United Kingdom

China

International

Australia

India

Other

News Summary

United States

SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

Cities with the highest share of cash-out borrowers

Source Lending Tree

Cities with the highest cash-out loan amounts

Source Lending Tree

Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

M&A

Source: FT Partners

Read the full report here.

Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

Why Marcus Has Changed Everything (Orchard Platform), Rated: A

Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

Online lenders are getting more scrutiny.

The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

It’s not a bank, but it uses customer data to help banks find customers.

Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

The benefits of improved customer experience

More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

  •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
  • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
  • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

The Overarching Trends

The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

Adopting New Technology

Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

A Decline in Credit Card Usage

Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

The Tax Bill Could be a Boon for Small Businesses

Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

United Kingdom

Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

That represents a 20 per cent increase from when they first started their business.

China

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

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

On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

International

How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

Rakuten
Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

Overstock
For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

Sainsbury (and Tesco)
Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

Source CoinMarketCap

 

Australia

SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

India

Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

P2P lending platform

Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

Latin American

Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

Africa

Fintech is central to Nigeria’s future success (Financial Times), Rated: A

Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

Asia

Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

Authors:

George Popescu
Allen Taylor

Tuesday April 3 2018, Daily News Digest

FT Partners

News Comments Today’s main news: SoFi issues $2.6B in ABS notes in Q1 2018. GreenSky files for IPO. China’s P2P lenders brace for more regulations. FinanZero raises $3.6M. Today’s main analysis: FT Partners’ CEO alternative lending market analysis. Today’s thought-provoking articles: Cities with highest share of cash-out refinance borrowers. Retailers grow financial services capabilities. India’s unsecured instant loan interest rates […]

FT Partners

News Comments

United States

United Kingdom

China

International

Australia

India

Other

News Summary

United States

SoFi Issues a Record $ 2.6 Billion in ABS Notes in the First Quarter of 2018 (PR Newswire), Rated: AAA

SoFi announced today that it completed $2.6 billion in loan securitizations in the first quarter of 2018, a 35% increase over the prior-year period and its largest-ever quarterly ABS issuance volume.

In Q1 2018, SoFi completed a total of three securitization transactions: two student loan ABS offerings ($960 million SOFI 2018-A Notes and $869 million SOFI 2018-B Notes) and one consumer loan ABS offering ($774 million SCLP 2018-1 Notes). The SoFi 2018-B Notes marked the first time SoFi included medical residency loans as a part of the collateral.

LendingTree Ranks Cities with the Highest Share of Cash-Out Refinance Borrowers (PR Newswire), Rated: AAA

LendingTree today released the findings of its study on where cash-out refinancing was most prevalent in the past year.

Cities with the highest share of cash-out borrowers

Source Lending Tree

Cities with the highest cash-out loan amounts

Source Lending Tree

Fintech Firm GreenSky Files Confidentially for IPO (Wall Street Journal), Rated: AAA

Financial-technology firm GreenSky LLC has confidentially filed paperwork with the Securities and Exchange Commission for a sizable initial public offering that could come as soon as this summer, according to people familiar with the matter.

The Atlanta company, which operates a lending platform that enables retailers, health-care providers and home contractors to offer loans to their customers, could seek to raise $1 billion at a valuation of roughly $5 billion, some of the people said.

FT Partners’ CEO Monthly Alternative Lending Market Analysis  (FT Partners), Rated: AAA

This month’s report features an exclusive interview with Manu Smadja, co-founder and CEO of MPOWER Financing, an alternative lender that enables high-potential international students to finance their education. In our conversation with Manu, he discusses the inception of MPOWER, along with the unique opportunities and challenges of lending to this market.

M&A

Source: FT Partners

Read the full report here.

Max Levchin To Participate In A Keynote Fireside Chat At LendIt Fintech USA 2018 (PR Newswire), Rated: A

LendIt Fintech announced today that Max Levchin, Co-founder and Chief Executive Officer of Affirm, a financial services technology company that is reimagining consumer credit and banking, will be featured in a keynote fireside chat on April 9. The world’s most prominent and emerging fintech CEOs from Wall Street to Main Street will gather April 9-11 at Moscone Center in San Francisco to focus on the hot-button topics and issues exploring the future of finance.

In a session titled The future of credit: Reimagining the financing ecosystem, Levchin’s keynote fireside chat will delve into how the retail industry has evolved and how retail experiences are continuing to grow beyond the capabilities of traditional credit and lending. Levchin will share his thoughts on why the industry needs to reimagine the financing ecosystem from the ground up in order to unlock the future of credit. Levchin will also discuss why Affirm is committed to reinventing credit, starting with the belief that it should help improve consumers’ financial lives in addition to financing their purchases.

Kabbage: Small Businesses Turning To Mobile Lending In Big Numbers (Payment Week), Rated: A

Sometimes, businesses need ready cash to get from “the latest bills” to “the next paid invoice,” and that’s where lenders are coming in. A new report from Kabbage says that small businesses are turning to mobile devices to get in on that lender funding in increasing numbers.

Kabbage surveyed almost 150,000 small businesses, and found that loans accessed by mobile device had increased better than three-fold, over 360 percent, of what they were back in April 2014. While the total numbers went through the roof, the value of the loans accessed went through the roof and over the treetops, having increased over 1,220 percent.

Why Marcus Has Changed Everything (Orchard Platform), Rated: A

Fast forward almost 18 months and Marcus is the fastest growing online lender in history. They have lent $2.5 billion in this time to 350,000 customers and have 700 employees spread across three offices. Not only that, but they have grand ambitions in the space. Goldman Sachs CEO Lloyd Blankfein has repeatedly talked about the importance of Marcus to the future of Goldman Sachs.

According to a recent article in the Wall Street Journal the consumer banking business of Goldman Sachs is expected to generate $1 billion in revenue for the firm by 2020. That is significantly more revenue than LendingClub is expected to generate in 2018 as an 11-year- old business.

We have heard that Barclays and PNC Financial will be launching their own lending platforms in 2018 and there are rumors that many other large banks are going to do the same.

Most people probably don’t know Goldman Sachs offers a savings account with excellent perks — and anyone can use it with just $ 1 (Business Insider), Rated: A

Marcus— named after the Goldman Sachs founder Marcus Goldman — allows any adult (except in Maryland, where Marcus is not yet available) to create a savings account.

The big selling point for Marcus is the 1.5% annual percentage yield offered. Whereas interest rates for many banks have plummeted to as low as 0.01%, Goldman Sachs’ savings accounts create significant interest.

There is also no minimum amount needed to open an account with Marcus, and a deposit of even $1 allows users to earn the 1.5% APY.

Ohio Insurtech Root Insurance Completes Series C Round With $ 51 Million in Funding (Crowdfund Insider), Rated:A

Root Insurance, an Ohio-based car insurtech company, announced last week it secured $51 million in funding through its Series C round, which was led by Redpoint Ventures, with Scale Venture Partners and existing partners Ribbit Capital and Silicon Valley Bank Capital Partners. 

Root will use the new funding to expand into additional states and continue to invest in technology that significantly improves the customer experience.

That Fast Online Loan Could Have Super-high Interest Rates and Hidden Fees That Bankrupt Your Business (Entrepreneur), Rated: A

recent lawsuit against fintech small-business lender Kabbage Inc., charging that it partnered with a bank in order to offer interest rates that exceeded the legal limit, highlights the need for more regulatory oversight of the growing number of online lenders signing deals with small businesses.

Online lenders are getting more scrutiny.

The recent Massachusetts federal case brought by a small business against Kabbage (and its partner Celtic Bank) highlights why non-bank fintech lenders should be regulated. The suit alleges that Kabbage used its relationship with Celtic — which “rented” its balance sheet to Kabbage — as a basis to charge interest rates that violated usury laws.

How Credit Karma is using data to become a central finance hub (Tearsheet), Rated: A

It’s not a bank, but it uses customer data to help banks find customers.

Currently valued at $4 billion, Credit Karma has 80 million customers — half of whom are millennials. The company joins a growing number of financial startups like Clarity Money, SoFi, Chime and Varo Money that are aiming to become one-stop shops for customers’ finances. The field is growing increasingly competitive. Meanwhile, banks are bundling personal finance advice into their mobile apps. But Credit Karma has two advantages its competitors often struggle with — scale and data — and it’s using a chatbot to lock in the relationship with the customer.

A Chase Sapphire experiment is getting revived and expanded after the trial run blew away expectations with millennials last year (Business Insider), Rated: B

Last year, ahead of the spring homebuying season — the busiest of the year — JPMorgan Chase engineered an experiment to gain an edge in the mortgage-lending competition.

So the bank targeted its Sapphire customers, offering another 100,000 in rewards points if they closed a mortgage with the bank — a bonus worth as much as $1,500.

HNW Clients Warming Up To Digital Advice (Financial Adviser), Rated: A

In its report, “The Cerulli Edge—U.S. Retail Investor Edition, 1Q 2018 Issue,” the researcher found that more than one-quarter of investors over 70 who have $2 million to $5 million in investable assets said they would consider online-only engagement. Beyond that, high-net-worth investors in general seemingly are more receptive to digital advice platforms.

In 2015, Cerulli found that 38% of investors with investable assets of $2 million to $5 million said they were willing to engage with digital providers. Last year, that number jumped to 46%. And among investors with $5 million-plus in investable assets, those numbers went from 30% in 2015 to 38% last year.

Why borrower experience will be the principal driver of bank revenue in the lending market (Lendit), Rated: A

Tech giants such as Google and Amazon have rewritten the rulebook for consumers when it comes to what they can reasonably expect from their service providers. Consequently, bank offerings are being judged to the same standard as the most innovative digitally native products in the world.

The benefits of improved customer experience

More generally, banks must focus on improving user experience to remain competitive as digitally native fintech products flood the marketplace. Focusing especially, the motivations for improving customer experience can be described as:

  •  Differentiation Financial services can no longer lean on long-standing relationships and brand positioning to generate new customer business.
  • Positive brand response in addition to research, some customers will also emphasize the emotive impression they receive from a product when making purchasing decisions.
  • Coping with an economic downturn During a recession or other global economic hardship businesses are placed under increased financial strain. Services viewed positively by their existing clients will stand a better chance of retaining their clients as well as growing their client base during the downturn.

Pindrop Introduces New Biometric Solution: Tongueprinting (Finovate), Rated: A

Banking Technology’s Anthony Peyton reports that the Atlanta-based anti-fraud and authentication specialist has unveiled Tongueprinting, a technology that analyses every person’s unique tongue as its newest biometric engine. Banking Technology is Finovate’s sister publication.

The idea is for Tongueprinting to stop fraudsters from taking over legitimate accounts by spoofing the call centre with automated bots, social engineering, and knowledge-based authentication questions.  

HomeUnion Launches Crowdfunding Platform for Individual Investors (Business Wire), Rated: A

HomeUnion, the leader in online residential real estate investing, has launched a crowdfunding platform that allows investors to purchase stakes in funds of single-family rental (SFR) properties on its website. Starting with a minimum investment of $10,000, retail investors now have the ability to acquire interest in the HomeUnion Fix-and-Flip Fund. The fund enables consumers to invest in SFR assets acquired for fix-and-flip purposes in seven HomeUnion markets: Atlanta, Austin, Charlotte, Chicago, Dallas, Raleigh and Tampa.

Upstart tests buyer appetite with riskier loans, more sub notes (Global Capital), Rated: A

Online lender Upstart is the latest marketplace loan company to broaden the risk profile of its ABS, announcing a deal this week offering more subordinate bonds and backed by a higher proportion of longer term loans.

The California-based lender, founded by ex-Google employees, uses an underwriting model which incorporates data points beyond borrowers’ FICO scores, utilizing other factors such as schools attended, areas of study, academic performance and work history.

Is low pay hurting banks in the battle for tech talent? (American Banker), Rated: A

Conversations about pay in the banking industry typically focus on whether executives at the top are paid too much or workers at the bottom are paid too little.

But new data available as a result of the Dodd-Frank Act is drawing rare attention to the compensation of employees in the middle. In what will become an annual exercise, publicly traded U.S. companies are now required to disclose annually the median pay of their employees.

Information and Data Integrity: A Two-Way Street (Lendit), Rated: A

For many businesses, data is an important aspect of decision management. When you are choosing with whom to do business, you rely on the validity of data to guide you. If it proves faulty, you may be steered into accepting bad customers or rejecting good ones, which can seriously affect your bottom line. For consumers, inaccurate data can be equally harmful—leading to the appearance of having bad credit, denials of services or products or worse, flagged as potentially fraudulent.

Spanning both digital and real worlds, and encompassing data about identity, financial characteristics, behaviors and more, an integrated view is the foundation of enhanced insights that can ultimately improve financial outcomes. TransUnion understands the importance of current, accurate data and gives its customers access to information—including both highly-regulated and publicly available forms of alternative data—that creates powerful, comprehensive views of consumers.

Here’s Why Millennials Are Choosing Personal Loans (Lendit), Rated: A

When it comes to millennial spending habits, it looks as though they’re rounding a corner to a new kind of credit. With the vast treasure trove of accumulated data available, credit bureaus like TransUnion are seeing spikes in personal loans compared to Generation X’s spending habits in the early 2000s. It’s a tremendous opportunity for marketers to capture a demographic that expects more from their lender.

The Overarching Trends

The newly minted adults of Generation Z are at the very beginning of their financial journey, but millennials are at the age where they’re expected to make major purchases. As they struggle with the economy and student debt, they’re making different financial choices along the way.

Adopting New Technology

Lenders are turning to financial technology (fintech) to help peddle their products, which millennials are all too happy to use. Ironically, applying for a personal loan without the face-to-face connection can be far more attractive than the traditional application process.

A Decline in Credit Card Usage

Right or wrong, credit cards have long been linked to perpetual debt in many people’s minds. In 2009, the CARD Act was introduced to place stricter limits on the marketing of credit cards at college campuses. Debit cards have become more of the rule as opposed to the exception, leaping from 8 billion transactions in 2000 to 60 billion in 2015.

Small Business Confidence Is Up, What Does that Mean? (Lendit), Rated: A

The year 2017 saw small business owners across the United States grow more optimistic about the future than they’ve ever been—at least since the creation of the Optimism Index by the NFIB in the 70s.  “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan.

The Tax Bill Could be a Boon for Small Businesses

Sole proprietorships, partnerships, and S corporations are all examples of what are called pass-through businesses; and make up roughly 95 percent of all U.S. businesses. They also happen to be many of our customers at OnDeck, and other online small business lenders. One of the main components of the new tax bill is a 20 percent tax deduction for those businesses, where business owners can “shield” 20 percent of their business income from flowing through to their personal income tax returns.

Cincinnati-based financial tech startup raises $ 1.2 million (Cincinnati Business Courier), Rated: B

A Cincinnati-based financial tech startup that aims to help users secure low-dollar loans without having to resort to a payday lender raised $1.2 million in venture capital.

Mayor proposes employee loans to offset predatory lenders (Santa Fe New Mexican), Rated: B

A few months after a new annual 175 percent cap on small-loan interest rates in New Mexico went into effect, Mayor Alan Webber is proposing a short-term loan program to help municipal workers avoid payday lending businesses viewed as predatory by consumer advocates.

BlockFi Gives Hodlers Another Option to Borrow Against Crypto Assets (BitcoinMagazine), Rated: B

Options for borrowing and lending with cryptocurrencies are on the rise. One of the latest start-ups to join the likes of SALT and Unchained Capital is BlockFi, a New York City–based startup that issues loans backed by bitcoin and ether to individuals, companies and institutions in 35 U.S. states.

BlockFi takes cryptocurrency as collateral, offering interest rates on loans of around 12 percent. This is generally lower than unsecured loans and higher than loans secured with traditional assets such as securities or real estate.

eBus to offer visitors financial advice, credit reports (The Repository), Rated: B

The eBus is a mobile classroom which is equipped with 14 personal computers and satellite technology staffed by Fifth Third bankers and representatives from nonprofit community organizations. On the bus, visitors can request a credit report and review it with a professional; receive a personalized evaluation of finances; receive internet banking and bill pay demonstrations; speak with nonprofits about housing, money management and business advice; receive consultation on foreclosure prevention; and conduct online job searches.

United Kingdom

Scots ‘side businesses’ generate £1.7bn a year (The Scotsman), Rated: A

More than 500,000 people living in Scotland have started a side business, generating a collective £1.7 billion a year out of more than £33bn UK-wide, according to new research.

Online lender Sunny said many of those north of the Border turning to side businesses are doing so to help with the cost of bills, savings and debts, and bring in an average of £272 a month on top of their main income.

That represents a 20 per cent increase from when they first started their business.

China

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated: AAA

China will soon be rolling out new licensing requirements for p2p lenders; The system will kick off in April with approvals slated to come at the end of this month, but many lenders aren’t aware of the filing process; in 2016 and 2017 many p2p lenders shut down and according to data there are around 2,000 remaining; it is expected that many of the 2,000 will not pass the new requirements; the new rules won’t allow platforms to guarantee loan payments and also limit loans to individuals and businesses; it will also require that platforms use custodian banks.

China Rapid Finance Executives Selected to Speak at LendIt Fintech USA 2018 (PR Newswire), Rated: A

China Rapid Finance Limited (“China Rapid Finance” or the “Company”) (NYSE: XRF) announced today that the Company will participate as a sponsor and exhibitor at the upcoming LendIt Fintech USA 2018, to be held between Apr 9th and 11th in San Francisco, California.

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

On March 28th, cross-border payment company iPayLinks announced that it had completed, at the beginning of this year, a hundreds of million-yuan B1 round of financing led by Tencent and followed by Legend Capital.

NIFA Issues a Self-Discipline Convention for Debt-Collection Practitioners

The five-chapter convention is mainly applying to regulate the behavior of overdue debt collection within the Internet Finance industry by establishing several basic principles (e.g. observing laws and regulations, prudential regulations, protecting privacy, and strict self-discipline). In other words, the document outlines a framework of debt-collection regulation in terms of discredited punishment, business management, personnel management, information management, outsourcing management, and complaints.

China’s internet lenders fall foul of data privacy rules (Financial Times), Rated: A

More than half of Chinese internet finance lenders are failing to comply with data privacy regulations, research has found, raising risks for investors as China steps up the implementation of laws to protect consumer data.

The breaches include collecting phone numbers from users’ contact lists, which can be used to mount harassment campaigns and shame users into repaying debts.

The survey of 200 finance apps by Renmin University and Nandu Personal Data Protection Research Centre, a Beijing think-tank, ranked 111 apps as having “low” compliance.

It found that almost half — 95 apps — wanted to read users’ text messages, while 97 of them wanted access to users’ contact lists, despite such access not being necessary for the app’s functioning.

International

How retailers are growing their financial services capabilities (Tearsheet), Rated: AAA

Amazon isn’t the only retailer encroaching on the financial services space. It may be the scariest — just the rumor of it entering a company’s space will send its stock price down — but ultimately, Amazon only cares about getting more buyers and more sellers to join its platform.

Overstock’s Raj Karkara, vp of loyalty and financial services, echoed that sentiment earlier this year, saying that offering financial services or connecting customers with financial services providers is a natural extension of its retail function of buying and selling consumer goods.

Rakuten
Rakuten is Japan’s largest e-commerce site and has slowly been growing outside of the country. It has a footprint in media, video-on-demand, mobile messaging, e-books, travel, fashion, marketing and even sports. It also operates the largest online bank in the country.

Overstock
For the past few months, e-commerce company Overstock.com has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing; and, most recently, a discounted trading platform.

Sainsbury (and Tesco)
Amazon may not be interested in becoming a bank but that doesn’t mean it can’t succeed in stealing customer attention from them. The U.K.’s largest grocers have all opened banks attached to their brands —  Sainsbury’s and Tesco.

ETHLend (LEND) Token – Will It Go Down After Kyber Network Partnership? (Hot Stocked), Rated: A

ETHLend has recently partnered up with Kyber Network. The ETHLend (LEND) Token has reached a market capitalization of 45.69 Million US dollars in the last 24 hours. The token traded 9.50%higher against the U.S. dollar during the last 24 hours ending at 10:30 AM EDTon April 2nd. That rise might be as a result of the partnership. ETHLend aims to become another decentralized and secure financial marketplace, but targeting peer to peer lending agreements via Blockchain and Smart Contracts.

Source CoinMarketCap

 

Australia

SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER? (Dynamic Business), Rated: A

Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP [1], it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.

Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.

Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought.

APRA rejected CBA home loan data as inaccurate and incomplete (Financial Review), Rated: B

Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending.

The Australian Prudential Regulation Authority’s frustration with the failure of Australia’s biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week.

India

Interest rates on unsecured instant loans are high (LiveMint), Rated: AAA

Financial institutions and fintech companies have launched multiple small credit products in India in the past 1-3 years. It is now possible to get loans even on your mobile phone. But how do you pay for this convenience?

P2P lending platform

Peer-to-peer lending companies such as Faircent, i2ifunding and Lendbox connect lenders and borrowers on their platforms. Usually, the lender is an individual and not a financial institution. The interest rates are between 15% and 36% per annum and the loan amount can range from Rs50,000 to Rs5 lakh. The interest rate is decided based on the credit profile of the customer. Usually, the P2P lending companies take into account your Cibil credit score. The loan tenure is 3 months to 24 months.

Fintech eco-system is moving to blockchain and AI: Rajat Gandhi, Faircent (Economic Times), Rated: A

A lot of players have come into the fintech space. There are wallet players, then there are PPI, P2B, crowdsourcing and other payment players as well. So, regulation is one of the key challenges the private players are going through. What is your take on it?

Surprisingly, the Indian regulators, I would say, are strict. You can see the example of NBFC P2P licences regulation. It is a good rule-based model. In fact, the players themselves were pushing for some kind of regulation because financial markets need them. It’s not like e-commerce or running a taxi where the risks are not that high.

India’s Finzy Raises $ 1.3 Mln At Pre Series A Funding (Reuters), Rated: A

Finzy, India’s fastest growing peer to peer lending platform, has raised USD 1.3 million in first round of Pre Series A from investors in the industry. A second round of fundraising is expected to close with pre-identified set of investors within the next 60 days.

Latin American

Brazilian Loan Marketplace FinanZero raises USD 3.6 million in Series A Funding Round (PR Newwire), Rated: AAA

FinanZero is a leading marketplace for consumer loans in Brazil. The business is an independent broker for loans, negotiating the customer’s loan application with several banks and credit institutions, to find the loan with the best interest rate and terms for the consumer. FinanZero handles the lending process from start to finish.

The Series A round was led by Swedish publicly listed investment company, Vostok Emerging Finance, with participation by other Swedish investors, including Webrock Ventures and Zentro Founders.

Africa

Fintech is central to Nigeria’s future success (Financial Times), Rated: A

Central to this opportunity is an acceleration in the development of a modern banking and financial services sector. We are already seeing huge breakthroughs in digital banking and the adoption of fintech-based services by Nigerian consumers — be they retail or business customers. But this expansion must be encouraged by policies that will see greater inclusion of women and rural communities into mainstream banking activity.

Asia

Meet the most disruptive fintech startup in South Korea (Forbes), Rated: AAA

Viva Republica is the most disruptive fintech startup in South Korea. Since the 2015 launch of its simple peer-to-peer payments app Toss, banks are finally revamping their user experiences and customers have easier access to financial products. South Korea’s mobile payments have more than quadrupled in that time to $4.6 billion, according to Bank of Korea data.

The startup, funded at $76 million, hasn’t stopped there. After PayPal joined a $48 million investment in Toss in March, Toss has grown from a simple money-transfer app to a diverse consumer-finance platform generating Viva Republica’s $20 million in expected revenue in 2017. Toss thus joins Asia’s ranks of fast-growing mobile P2P payment services, reaching a $12 billion transaction volume in 2017.

Authors:

George Popescu
Allen Taylor

Monday April 2 2018, Daily News Digest

PeerIQ

News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

PeerIQ

News Comments

United States

United Kingdom

China

European Union

International

India

Other

News Summary

United States

Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

How have your fees changed?

Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

PeerIQ’s Credit Facility Management Suite

The Credit Facility Management Suite provides:

  • Dashboard overview of multiple facilities across various asset classes
  • Daily Covenant Calculation and Monitoring
  • Time Series Visualization and Projections
  • Automated Borrowing Base Report Generation
  • Collateral Cashflow Projections
  • Scenario Analysis
Source PeerIQ

 

Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

Who’s lending to small businesses?

“Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

Tech ever-widening domain for community banks (Banking Exchange), Rated: A

“Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

And analytics was only the second-fastest-growing team at Enova last year.

 

LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

 

United Kingdom

Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

China

Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

 

European Union

Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

Lending

Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

Escrow

Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

International

Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

Source SludgeFeed

It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

 

India

Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

Canada

THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

More about Private Equity

Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

Download the full report here.

Africa

Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

Emerging blockchain hubs

While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

Tackling real problems

To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

Fighting corruption.

Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

Authors:

George Popescu
Allen Taylor

Monday April 2 2018, Daily News Digest

PeerIQ

News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

PeerIQ

News Comments

United States

United Kingdom

China

European Union

International

India

Other

News Summary

United States

Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

How have your fees changed?

Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

PeerIQ’s Credit Facility Management Suite

The Credit Facility Management Suite provides:

  • Dashboard overview of multiple facilities across various asset classes
  • Daily Covenant Calculation and Monitoring
  • Time Series Visualization and Projections
  • Automated Borrowing Base Report Generation
  • Collateral Cashflow Projections
  • Scenario Analysis
Source PeerIQ

 

Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

Who’s lending to small businesses?

“Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

Tech ever-widening domain for community banks (Banking Exchange), Rated: A

“Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

And analytics was only the second-fastest-growing team at Enova last year.

 

LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

 

United Kingdom

Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

China

Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

 

European Union

Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

Lending

Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

Escrow

Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

International

Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

Source SludgeFeed

It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

 

India

Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

Canada

THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

More about Private Equity

Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

Download the full report here.

Africa

Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

Emerging blockchain hubs

While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

Tackling real problems

To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

Fighting corruption.

Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

Authors:

George Popescu
Allen Taylor

Monday April 2 2018, Daily News Digest

PeerIQ

News Comments Today’s main news: Landbay raises 1.2M GBP on Seedrs. Yirendai issues quarterly earnings results. Betterment boosts human advice. Flender to raise 50M Euro. Cash Suvidha raisess $1M. Today’s main analysis: The VC and PE markets in Canada. Today’s thought-provoking articles: PeerIQ’s credit facility management suite. Is community bank SMB lending eroding? Africa’s big blockchain potential. United States Betterment’s rise […]

PeerIQ

News Comments

United States

United Kingdom

China

European Union

International

India

Other

News Summary

United States

Robo Pioneer Betterment Goes Upscale, Boosts Human Advice (ThinkAdvisor), Rated: AAA

Now with $13.5 billion in assets under management, the firm claims to be the largest independent online financial advisor. Indeed, its high-net-worth offering, or Prime Plan, has been embraced by investors with accounts ranging from $100,000 to many millions, according to Holeman.

Betterment, founded in 2008 as an automated digital-only advice platform, now has 340,000 customers, ranging from millennials to 85-year-olds, with an average age of 37 and an average balance just under $40,000.

How have your fees changed?

Before, we didn’t have the ability to talk with a human advisor; now we have certified financial planners. There are two levels of pricing: the basic digital plan [no minimum account size], which is 0.25% per year and our premium plan [$100,000 minimum account] for 0.4% per year to talk with a certified financial planner on an unlimited basis.

PeerIQ’s Credit Facility Management Suite (PeerIQ), Rated: AAA

US GDP growth for the 4th quarter was revised upwards from 2.5% to 2.9%, capping an impressive 2017. Consumer spending has driven the bulk of GDP growth and it will be relevant to see if this trend continues given the weak retail sales in Q1 and softening in some leading economic indicators. Core PCE, the Fed’s preferred inflation indicator rose 1.8% YoY in February. Personal spending rose 0.2% while incomes rose 0.4% MoM suggesting that Americans are saving more – a long-term positive for growth – although a short-term pressure on retail sales and consumer spending.

PeerIQ’s Credit Facility Management Suite

The Credit Facility Management Suite provides:

  • Dashboard overview of multiple facilities across various asset classes
  • Daily Covenant Calculation and Monitoring
  • Time Series Visualization and Projections
  • Automated Borrowing Base Report Generation
  • Collateral Cashflow Projections
  • Scenario Analysis
Source PeerIQ

 

Is community bank small business lending eroding? (Banking Exchange), Rated: AAA

Quarles, speaking March 26 at a HOPE Global Forum, told of recent meetings he had had with owners of very small businesses. He noted that their comments jibed with trends the central bank has seen. A key one is that small businesses still face gaps in available credit although more than two-thirds of those studied by the Fed request less than $100,000 and many less than $25,000.

Who’s lending to small businesses?

“Large banks’ share of small business lending has grown,” said Quarles, “especially among the smallest loans. This represents a change from 20 years ago when small businesses relied more on a relationship with local community banks for access to credit.”

Quarles shared figures for loans under $100,000. He said that small banks of less than $1 billion hold 19% of such loans—versus 60% two decades ago. By contrast, he said, that 60% share is now held by banks with $50 billion or more in assets.

Quarles next discussed nonbank alternative lenders. This included fintech specialists as well as large technology firms that extend credit to merchants who are part of their customer bases. (Quarles did not mention names, but examples of the former would include online lender Kabbage and the former would include Amazon, which grants credit to small firms that are part of its base.)

Tech ever-widening domain for community banks (Banking Exchange), Rated: A

“Anybody who doesn’t believe that is kidding themselves,” says James Beckwith, president and CEO at $972.8 million-assets Five Star Bank in Rocklin, Calif.

The attractiveness of tech-based marketplace lending, for example, is only going to increase, Beckwith says. Also, payments innovations, going on inside and outside banking, can’t be ignored by consumer or business bankers.

Marlin Secures $ 300,000,000 Forward Flow Agreement to Expand Equipment Financing for Small Businesses (GlobeNewswire), Rated: A

Marlin Business Services Corp. (NASDAQ:MRLN) a leading provider of credit products and services to small businesses, today announced that it has entered into a forward flow sale agreement with Varadero Capital, L.P., a leading alternative asset management firm, to sell up to $300,000,000 in equipment leases and loans to be originated by Marlin.

Technology jobs in the Chicago area are up, but that’s not the whole story (Chicago Tribune), Rated: A

Unlike at Enova, the overall number of technology jobs in the Chicago region grew at a modest pace last year, both at tech firms and in other industries.

Even before Chicago entered the cutthroat competition last fall to win Amazon’s second headquarters, dubbed HQ2, the city promoted the growth. Emanuel’s office issued at least eight news releases in 2017 on technology companies planning to hire. One of them named more than a dozen companies with hiring goals by the end of 2017.

Enova was on that list, with an aim to hire 75. Instead, it brought on 128 new people, raising its total employee count to 1,145.

And analytics was only the second-fastest-growing team at Enova last year.

 

LendIt Fintech USA 2018 Preview Show (Lend Academy), Rated: A

This year we have the LendIt Content Team on the show discussing all the different aspects of the event and how attendees can get the most out of their time at LendIt Fintech USA 2018.

 

United Kingdom

Landbay Returns to Seedrs & Quickly Raises £1.2 Million in Funding (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer lender Landbay has launched another equity crowdfunding campaign on Seedrs and quickly secured more than £1.2 million in funding. This news comes less than a month after the online lending platform announced it hit its £100 million in lending milestone.

Deposit rates are a joke, so investors should consider peer-to-peer lending (The Times), Rated: A

Irish investors who want a regular return on their capital but are not happy to hand their money to the banks — where deposit rates are in the doldrums — have been exploring peer-to-peer (P2P) lending.

EasyMoney launches second IFISA with higher returns (Peer2Peer Finance), Rated: A

EASYMONEY, part of Sir Stelios Haji-Ioannou’s easy family of brands, has launched a second Innovative Finance ISA (IFISA) that offers higher returns than its first tax wrapper.

The recently-launched peer-to-peer lending platform said on Saturday that its ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, with a target interest rate of 7.28 per cent. Loans written for the ‘balanced’ IFISA are limited to 75% loan-to-value (LTV).

China

Yirendai (YRD) Issues Quarterly Earnings Results (The Lincolnian Online), Rated: AAA

Yirendai (NYSE:YRD) announced its earnings results on Wednesday, March 14th. The technology company reported $1.11 EPS for the quarter, topping the consensus estimate of $0.86 by $0.25, Briefing.comreports. Yirendai had a return on equity of 66.32% and a net margin of 24.69%. The company had revenue of $280.50 million for the quarter, compared to analysts’ expectations of $244.27 million.

China’s P2P lenders brace for renewed regulatory crackdown (Financial Times), Rated AAA

Thousands of online lenders could be facing extinction as China rolls out a new licensing framework, amid complaints about a lack of clarity on how the regime will work. The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

The peer-to-peer, or P2P, lending sector is braced for a second regulatory crackdown as a new “record filing” system kicks off in April. But with the first batch of approvals expected by the end of the month, lenders say they are still in the dark on the filing process itself.

 

European Union

Peer-to-peer lending start-up Flender to announce €50m debt round (The Irish Times), Rated: AAA

Dublin-headquartered fintech start-up Flender, whose backers include former EY Entrepreneur of the Year award winner Mark Roden, is set to announce a €50 million debt financing round to fund its expansion.

Having secured more than £500,000 (€569,000) to fund itself through crowdfunding, Flender announced plans to raise a £2 million (€2.2 million) funding round and £20 million (€22.7 million) in leveraged debt finance last August after receiving full authorisation from the UK financial regulator to operate in Britain.

Dutch Startup Aims To Boost Earnings Of P2P Services (Cointelegraph), Rated: A

Dutch Startup “BotBird” is launching a set of services that aims to bring together different aspects of the blockchain. While the services alone are well known amongst crypto investors the set combined might make a big difference in the scene altogether.

Lending

Crypto lending took a flight last year with lending programs popping up nearly every day. The promise was simple: Invest some bitcoin or Ethereum, get the counter value returned in alt coins minted by those lending programs and earn a certain percent of interest daily.

Escrow

Besides the fact that they actually focus on operating a sustainable service by offering a maximum of up to 10% monthly interest they also offer investment protection by 

International

Big banks on notice as tech groups ramp up pressure (Financial Times), Rated: AAA

Technology companies are set to take a big chunk of customers from banks, as they intensify their challenge to traditional lenders across a range of mass-market financial services, say industry executives and analysts. Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

Carlo Messina, chief executive of Intesa Sanpaolo, has told the Financial Times that Italy’s biggest bank by market capitalisation expects to lose market share to digitally focused rivals in many mainstream areas such as payments.

SALT: Leverage Your Blockchain Assets to Secure Cash Loans (SludgeFeed), Rated: A

One such project is SALT, a lending platform that was a built to facilitate the creation of lending agreements using blockchain assets as collateral. Through the SALT platform, individuals and businesses are able to access the largely illiquid value of their blockchain assets by putting these assets up as collateral in return for fiat loans. These lending agreements are secure, as their terms are automatically enforced through smart contracts and once a loan is repaid, crypto assets are returned to the borrower. Therefore, the SALT platform is designed for individuals and businesses that are needing immediate cash infusions but are unwilling or unable to liquidate their cryptocurrency holdings.

Source SludgeFeed

It’s important to note that there are no origination fees, closing costs, or prepayment penalties on any fixed rate term loans arranged through the SALT platform, which is very different than traditional lending systems.

Why ZPER is a Smart Investment Choice (NewsBTC), Rated: B

Against this backdrop, P2P financing has now added a new twist with a decentralized P2P finance platform, ZPER. The platform has its basis on blockchain technology and will transcend borders and currency limitations, generating innovation in the global P2P market.

 

India

Fintech Startup Cash Suvidha Raises $ 1 M in Pre-Series A Funding (Next Billion), Rated: AAA

Delhi-based online lending platform Cash Suvidha has raised $1 Mn in a Pre-Series A funding round from Initia Holdings; Vipin Agarwal, Partner in India Industrial Growth Fund and others.

The company will use the funding to increase the loan books of the company and to further strengthen its technological infrastructure.

Peer to Peer Lending Market is Anticipated Significant Growth due to Earliest Adopters of Latest Technologies (Digital Journal), Rated: A

The ‘Global and Chinese Peer to Peer Lending Industry, 2013-2023 Market Research Report’ is a professional and in-depth study on the current state of the global Peer to Peer Lending industry with a focus on the Chinese market. The report provides key statistics on the market status of the Peer to Peer Lending manufacturers and is a valuable source of guidance and direction for companies and individuals interested in the industry.

Firstly, the report provides a basic overview of the industry including its definition, applications and manufacturing technology. Then, the report explores the international and Chinese major industry players in detail. In this part, the report presents the company profile, product specifications, capacity, production value, and 2013-2018 market shares for each company.

Canada

THE VC AND PE MARKETS IN CANADA (AllAboutAlpha), Rated: AAA

The Canadian Venture Capital and Private Equity Association (CVCA) has posted what it calls an “overview” of the VC and PE Markets in that country in 2017. It reports growth in both of those markets, although growth at distinct velocities.

In 2016 there were 542 deals in the PE space. In 2017 there were 603. In 2016 the total valuation of those deals was $13.8 billion. In 2017 nearly twice that, $26.3 billion.

Looking at exits, 2016 was a slump and 2017 was a recovery. In 2016 there were only 33 exits with a total value of $0.6 billion. In 2017, though, there were 39 exits with a total valuation of $1.7 billion. A little arithmetic indicates that the average value of one of those 2017 exits was about $43 million. The average value of one of the 2016 exits was about $18 million.

More about Private Equity

Breaking down the PE highlights by city, the paper tells us that 15% of the action (89 deals totaling $6.7 billion) went to Montreal-based companies. Companies based in Calgary and Montérègie each received a 9% share. This meant 54 deals for Calgary and 53 for Montérègie.

Breaking down the highlights by sector, 19% of the PE deals closed in industry/manufacturing. The next largest share was in information and communications technology (ICT), a 16% share. The report tells us that both of these two top sectors “have been receiving a steadily increasing share of PE deal flow since 2013 when industrial and manufacturing captured only a 14% share” and ICT got 10%.

Download the full report here.

Africa

Blockchain’s big potential in Africa (Venture Beat), Rated: AAA

At the beginning of March, some of the brightest minds from the blockchain world joined representatives from the financial, legal, and global technology industries to discuss widespread blockchain adoption. But the event wasn’t held in fintech hub London, or startup mecca San Francisco. It was in Johannesburg, South Africa, at the fourth edition of the Blockchain Africa conference hosted at the Microsoft HQ.

Emerging blockchain hubs

While still in their early growth stages compared to the crypto hubs in central and eastern Europe and Switzerland, blockchain communities in Kenya, South Africa, Nigeria, and Sudan are growing steady.

BitHub Africa , based in Nairobi, is a blockchain accelerator for local startups founded in December 2015.

Tackling real problems

To date, blockchain adoption has been sporadic across Africa, but the emerging use cases are tackling real social, economic, and political problems affecting hundreds of millions of people every day:

Fighting corruption.

Combatting inflation.  In Zimbabwe, which has seen rapid inflation in recent years, Bitcoin sales have soared as locals rush to protect their savings before they devalue.

Authors:

George Popescu
Allen Taylor