Thursday April 18 2019, Weekly News Digest

digital banking

News Comments Today’s main news: Funding Circle sets new high on loans under management. SoFi partners with Lemonade, Root. Salary Finance hires SoFi co-founder, raises $32.8M. Dianrong to raise $100M. Klarna may be headed to the stock market. Linked Finance sees record quarter. Today’s main analysis: European online alternative finance grows 36%. (A MUST-READ REPORT […]

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

digital banking

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

SoFi has announced two new partnerships in the insurance space. The partnerships expand SoFi’s portfolio of offerings to include homeowners’ and renters’ insurance through Lemonade and auto insurance through Root.

LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA

Keynote Presentations

Advancements in Credit, Underwriting and Identity

Small Business Lending Innovation

Niche Lending: Looking for Yield

Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA

As the world continues to wait for the US SEC’s decision on the Bitcoin ETF applications that are still being processed months after a decision was expected, some investors may find themselves seeking alternative methods of entering into the Bitcoin market without actually having to do the dirty deed of investing in Bitcoin itself.

Crypto lending serviceshave recently reported record profits; crypto futures exchanges are also reporting higher-than-ever trading volumes.

Source: @CMEGroup on Twitter

Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA

Young adults are getting married later than previous generations. In 1980, the median age for men and women at their first marriage was 24.7 and 22, respectively. In 2018, the ages increased to 29.8 and 27.8, for men and women, respectively.

Millennials make up the largest share of homebuyers at 37%, according to a report from the National Association of Realtors.

Nearly a quarter (24%) of millennial first-time homebuyers want to own a home before getting married.

On the flip side, this means just over 3 in 4 millennial buyers (76%) want a marriage before a mortgage. Additionally, 27% of millennial buyers are postponing parenthood until they’ve achieved homeownership. Among homebuyers of all ages, nearly 2 in 5 are waiting to get a pet until after purchasing a house.

More than a quarter (26%) of first-time buyers have poor credit.

Just 15% of first-time buyers have a score of 740 or higher. Nearly 2 in 5 (38%) aren’t satisfied with their credit score, yet more than a quarter of those who are dissatisfied haven’t taken steps to improve their score. By contrast, more than 70% of repeat homebuyers are satisfied with their credit score.

GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A

GROUNDFLOOR, an investing and lending platform that allows anyone to invest fractionally in real estate, is today announcing its Q1 results and momentum. Despite the government shutdown of the U.S. Securities and Exchange Commission for 35 days, GROUNDFLOOR still experienced 123% percent non-GAAP Q1 revenue growth compared to the prior year Q1.

Additional Q1 momentum for GROUNDFLOOR includes:

  • Achieving a 166% increase in unit volume for loans closed in Q1 ’19 vs. Q1 ’18
  • More than doubling loan application volume for Q1 ’19 vs. Q1 ’18 (121% increase)
  • Selling more than $14.5M in real estate investments to retail investors on the platform
  • Surpassing more than 60,000 registered users
  • Eclipsing $100MM in loans to real estate developers to-date in more than two dozen states
  • Expanding product offerings, such as new construction loans and a fixed annualized notes product returning 5 percent on a 90-day term
  • Launching a second online public offering to purchase stock in GROUNDFLOOR directly

Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A

Reali announced Wednesday that it acquired Lenda, an online mortgage lender that launched in 2013 and currently operates in 12 states.

And with the acquisition, Reali is launching Reali Loans, a mortgage lending operation of its own.

Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A

The online lender Avant will pay $3.85 million to settle Federal Trade Commission allegations that it misled customers who were seeking to repay their loans.

The FTC said Monday that its commissioners approved the settlement by a 5-0 vote.

A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A

A San Francisco-based startup called Returnly is seeking to solve at least a portion of the headache—namely, the payment delay—by issuing instant store credit when you decide you don’t want an item. The company says that by assessing a shopper’s risk, it can offer store credit to 85% of customers on the spot, without first requiring that the item has been received or even put in the mail.

Returnly announced on Wednesday that it has raised $19 million in a Series B funding round, led by venture capital firm Craft Ventures and with participation from Max Levchin, the PayPal cofounder who currently runs Affirm.

Small businesses turning far more often to online lenders (American Banker), Rated: A

Last year 32% of credit-seeking small businesses applied to an online lender, up from 19% in 2016, according to the survey, which was released Tuesday. Over the same period, large banks, small banks and credit unions all saw either steady application rates or a slight decline in interest from those same small businesses, which typically had fewer than 10 employees.

Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A

Mastercard (NYSE: MA) today announced it has acquired Vyze, a technology platform that delivers more choice – and purchasing power – to people who want their point-of-sale payment options to match the flexibility and convenience of today’s shopping experiences.

Increasingly, consumers are seeking alternative financing options,1 leaving merchants and financial institutions with a need to deliver these services at the point of sale. In the U.S. alone, these solutions represent a more than $1.8 trillion opportunity, according to Accenture.

Earnest Launches Private Student Loans (PR Newswire), Rated: A

Earnest today announced that it’s modernizing student loans with a new in-school student lending offering.

Built based on feedback from students and people with student debt, an Earnest student loan incorporates four unique differentiators:

  • Innovative eligibility check – A quick two-minute eligibility check requires only basic personal information, school details, and an estimated credit score.
  • Cosigner invite – Earnest’s application makes it simple and easy to invite a cosigner to the process.
  • Checkout  Clients can customize their loan according to their individual financial needs with easy-to-understand terms and a clear understanding of their monthly payments after graduation.
  • 9-Month grace period – Earnest found through talking with recent graduates that they wanted the flexibility of a longer grace period after graduation to get settled. Earnest offers a 9-month grace period after graduation compared to the 6-month industry standard.

Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A

In the “If you can’t beat ‘em, join ‘em” world of bank-fintech relations these days, TD Bank’s recent agreement with the online lender Avant fits right in.

Avant is expanding its efforts to license technology to traditional banks, and TD Bank in March announced it will use the Chicago company’s technology platform, called Amount, to power the bank’s unsecured loan product, TD Fit Loan. HSBC, Regions Banks and Banco Popular also use Amount.

Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A

Over the past decade, the digital-lending industry has evolved to become more sophisticated. For example, companies are integrating big data and proprietary algorithms to analyze a borrower’s credit risk score in a matter of seconds, according to Juniper Research.

According to the firm, MPLs are projected to generate US$588 billion in loan origination value annually by 2023. This is estimated to account for 41 percent of SME funding around the world.

The research firm further reports that revenue from MPLs are predicted to grow at a 48 percent CAGR. This brings MPL platform revenue to US$137 billion annually by 2023, a 400 percent return from the estimated US$30 billion in revenue in 2019.

7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A

2. Lend to those in need and earn some interest.

Lending Club is one such peer-to-peer lending service I tried out, and I found it to be very easy to use and reliable (see my 

Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A

The odds of winning the $654 million Mega Million prize last year were put at one in 302 million, while the $345 million Powerball offered one chance in 292 million. But those astronomical odds apparently haven’t deterred the many Americans who are banking on using a lottery jackpot for their retirement nest egg.

Thirty-one percent of Americans don’t invest because they think it’s risky, but 39 percent, including 59 percent of millennials, feel it’s reasonable to think of the lottery jackpot as a potential means of retirement, according to the survey.

Miillennial men in particular (66 percent) believe the lottery is a reasonable retirement plan, compared to 58 percent of millennial women. However, if they did win the lottery, more millennial men (61 percent) than women (42 percent ) would save or invest the entire amount.

Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A

Documents filed in a New York Supreme Court case by the receiver managing Direct Lending Investments (DLI), revealed that DLI had more than 950 investors worldwide with collective investments on the books totaling over $780 million.

No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A

And now, NINA loans are back, as 360 Mortgage Group announced this week that it is launching a no-income, no-asset mortgage pilot program.

Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A

A loose-knit group of Virginians, stung by triple-digit interest rates on payday and other loans, is trying to do what the General Assembly won’t — make sure all lenders, including online ones, follow Virginia laws.

The latest lawsuit, filed last week, alleges that four web sites — Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial and Majestic Lake Financial — set up in the name of the Habematolel Pomo of Upper Lake tribe in northern California were actually operated by non-tribal members in a Kansas City suburb, including the son of a payday loan executive convicted of fraud and racketeering.

Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B

Lendio has announced the opening of a new Lendio franchise in Phoenix. Through the Lendio Franchising program, Sam Foreman will help local businesses apply for loans, review their options and secure funding, easing the financial hurdles for area small business owners.

BlueVine Partners with Ocrolus for Faster Processing of Financing Applications (Ocrolus), Rated: B

Ocrolus today announced a partnership with BlueVine. BlueVine leverages Ocrolus technology to accelerate growth and scale operations efficiently, creating a faster and more seamless experience for its customers.

United Kingdom

Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA

Loans under management grew 44 per cent to £3.4bn compared to £2.3bn in the first quarter of the previous year, and revenue growth soared by 40 per cent.

The firm reported that loan originations were up 23 per cent from £525m in the first quarter of 2018 to £644m between January and March this year.

Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA

Salary Finance, a UK-based startup focused on salary-linked savings and loans for employees, has raised $32.8 million and hired SoFi co-founder Dan Macklin for a US expansion.

Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A

WELENDUS, the peer-to-peer lender focused on short-term loans, has closed its last seed funding round, as it prepares to expand into India.

City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B

The Financial Conduct Authority is prepping new rules for cryptoassets and peer-to-peer lending, two rapidly growing areas of fintech.

China

China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA

Shanghai-based peer-to-peer lending platform Dianrong is looking to raise $100 million in fresh funding, according to a Financial Times report, a move that should give it enough buffer to meet China’s strict capital requirement for P2P players.

The GIC-backed firm has not made any official statement about its fundraising plan but analysts said the move is part of the firm’s efforts to meet Beijing’s proposed Rm500 million ($74.5 million) capital requirement for P2P operators nationwide.

National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A

It will not be soon for China’s commercial banks, consumer finance service firms and other institutions to see a national regulation governing internet-based lending activities, despite recent progress on specific rules for online peer-to-peer lending and microloans, Caixin learned.

Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A

Large platforms with loan balances of more than RMB 5 billion ($750 million) must register with the information disclosure database by the end of May.

European Union

Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA

Swedish tech unicorn Klarna is nearing the point where it could seek a stock market listing, but it’s unlikely to be this year, the CEO and co-founder of the fast-growing online payments services firm said.

Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B

The Stockholm-based fashion house Acne Studios has expanded their existing European partnership with Klarna. Showing at Paris Fashion Week, Acne Studios encompasses women’s and men’s ready-to-wear, shoes, accessories and denim, but also moves across the borders of fashion, art and design. With Klarna now available in Acne Studios’ online store, shoppers in the U.S. can choose to checkout with four equal payments – with no interest or fees.

Linked Finance marks record quarter (Tech Central), Rated: AAA

The first quarter of 2019 saw the platform provide more than €11.3 million in loans to Irish SMEs, an increase of 32% over the same period last year.

Since its establishment in 2013, Linked Finance has helped provide more than 2,000 loans and €92 million in funding to businesses across Ireland. Lenders who have supported SMEs through the platform have earned more than €7.1 million in interest and received more than €50.4 million in repaid principal since the business launched in 2013.

Linked Finance issued its largest loans ever in the quarter with a number of €300,000 loans provided. The average loan increased to €70,000.

Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA

According to CCAF, in 2017 the alternative finance market grew by 36% to € 10.44  billion – dominated by the UK.

Excluding the UK, European online alternative finance industry grew 63% from €2.06 billion to €3.37 billion in 2017.

The top three European markets following the UK, include:

  • France at €661 million
  • Germany at €595 million
  • The Netherlands at €280 million
  • The Nordic countries collectively generated €449 million, making them the third-largest regional market in Europe following France and Germany.
Source: Cambridge Centre for Alternative Finance

Read the full report here.

Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A

But before I share these top real estate crowdfunding companies, I would first want to tell you about the characteristics which a best performing real estate should have. Well, they must have:

  • Pricing power
  • High usage rates
  • Regular dividend
International

Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA

Challenger banks have leapfrogged to the forefront in overall customer satisfaction, according to a new study from FIS.

63 percent of direct bank customers report being “extremely satisfied”, compared to 52 percent of credit union customers and just 19 percent of customers of the top 50 global banks.

73 percent of all consumer interactions with banks in the US are done digitally.

Nearly two-thirds (65 percent) of younger millennials (between ages of 18 and 26) reported that they have not used any branches at all in the prior month.

Source: Tearsheet
Australia

April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA

According to new research commissioned by SME lender OnDeck, Australia’s small to medium enterprises (SMEs) are bracing for “a double whammy” of disruption from the back-to-back Easter/Anzac Day public holidays.

Over one in four (27 per cent) of SMEs expect the Easter/Anzac Day period to disrupt normal trading.

LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A

Leo Tyndall, CEO and Founder Marketlend

In the wake of the Royal Commission we’re seeing a tightening of finance for SMEs with even long time customers being turned away for loans. For years, banks have taken too long and required too much, like property collateral, from SMEs. Innovations like marketplace lending are giving SMEs transparent and prompt access to.capital when they need it.

Stephen BarnesPrincipal at Byronvale Advisors Pty Ltd

I would say that the term ‘redundant’ may not be so appropriate but certainly through a number of factors the ‘Big 4’ may be less able to meet the needs or timeliness requirements of small business. A large number of small business owners need to use personal assets, usually the family home, as security for loans.

India

P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA

A little more than a year after the (RBI) came out with guidelines for peer-to-peer (P2P) lending companies to convert into non-banking companies (NBFCs), micro and small enterprises (SME) lending has turned out to be the focus area for these companies.

However, the current regulation does not allow a single lender to lend more than Rs 10 lakh across at a time. This is hampering growth prospects, say P2P players. The association of P2P lenders has sought relaxation in the norm, and requested the to raise the limit to Rs one crore, according to sources in the industry.

Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A

Fintech startups have started offering a broader set of banking services beyond payments and lending, pointing to a deep integration with lenders that has the potential to change the way customers access banking products.
Asia

Riding the Korea FinTech Wave (Finextra), Rated: AAA

South Korean Financial Services Commission (FSC) has identified three sectors — payments, data, and lending — to protect consumers, foster fintech innovation, and ultimately remove uncertainties that may restrict investments into Korea.

Legal Framework Around Marketplace Lending

South Korea is a country that has gone through two economic crises which has made banks extremely conservative especially in terms of lending. As such, 40% of the population cannot receive loans from tier one banks and must resort to secondary markets such as savings banks with extremely high interest rates above 20% and shady underground loan sharks.

Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A

Deputy Managing Director of MAS Jacqueline Loh said the relationship demonstrates a FinTech that may extend to other countries in the ASEAN region.

MENA

A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA

This paper provides case studies and market analysis from the Arab Middle East and Africa as examples of fast-growing economies, open to best-in-class solutions, with both wealthy and underbanked populations. Key go-to-market findings serve to inform fintech firms, investors and others about participating in the region.

Download the report here.

Canada

TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA

Lendified, a Toronto-based FinTech, announced today that it has closed a $15 million CAD Series A funding round, in order to continue its growth within Canada.

The round was co-led by WD Capital Markets and INFOR Financial, and saw funding from CI Financial Corp., Windsor Private Capital, FirePower Capital, and a group of investors including Glenn Murphy, founder of FIS Holdings and former CEO of Gap Inc. and Shoppers Drug Mart.

Latin America

How sky-high interest rates are choking economic growth in Brazil (The Brazilian Report), Rated: AAA


Brazilian Credit Card Interest Rates: Enough to Choke a Horse or Risk Based Pricing? (Payments Journal), Rated: A

Bank accounts for consumers is still relatively low, with only 68%, compared to 79% in China.  Debit cards, however, outpaced credit by 2:1.

While you may see a slight uplift in the U.S. and U.K markets, consider this:

  • Annual consumer rates for credit cards topped 270 percent for unpaid balances.
  • As Brazil suffered its worst economic crisis in history, the banks raised credit card rates to a stunning 500 percent per annum on unpaid bills.
  • With Brazilians relying on credit an paying for everything from everyday goods to luxury items in installments, massive interest rates are being embedded into these payments.

Authors:

George Popescu
Allen Taylor

The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.

Thursday April 11 2019, Weekly News Digest

china p2p lending

News Comments Today’s main news: Lending Club loans $159M in the past week. OnDeck offers same-day funding. Kabbage secures $700M in funding. RateSetter ISA passes 200M GBP in subscriptions. Funding Circle CEO pocketed 4M GBP last year. Klarna launches global customer authentication platform. Today’s main analysis: Drivers of global growth in FSB’s shadow banking. (A […]

The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

china p2p lending

News Comments

United States

United Kingdom

European Union

China

Other

News Summary

United States

Need a loan for Tax Day? According to Lending Club data, you’re not aloan… er, alone (Thinknum), Rated: AAA

As seen in data from Lending Club ($NYSE:LC), there is a cyclical spike in the number of loans, as well as the money needed by those needing loans, right around the end of tax season. While this finding may seem pretty clear without any data, it essentially confirms an adage in the lending industry.

RIght now, there was only $21.5 million loaned out to lendees from April 8 to today. This past week, there was about $159 million worth of all sorts of loans — personal, mortgage, etc. — loaned out by the platform.

Lending Club Total Principal Loaned (Weekly)

ONDECK OFFERS SAME DAY FUNDING TO EMPOWER SMALL BUSINESS (OnDeck), Rated: AAA

OnDeck today announced that it will offer to fund and debit customer bank accounts with Same Day ACH transfers, eliminating a decades long pain point for small business owners accustomed to the traditional ACH transfer process, which can take multiple days and lacks certainty on when the transactions will hit bank accounts.

Same Day ACH transfers from OnDeck provide qualified OnDeck Term Loan and Line of Credit customers with funds up to the National Automated Clearing House Association (NACHA) cap of $25,000 by 5:00 pm local time on the same business day the customer books or makes a draw on their line of credit.* Qualified customers are also debited via the same day ACH service, providing them additional predictability in transaction clearing times and offering better clarity around day-to-day cash flow management.

Highlights from Jamie Dimon’s Annual Letter (PeerIQ), Rated: AAA

US payrolls rose by 196 k in March and the unemployment rate remained at 3.8%.

Source: Bloomberg, PeerIQ

Highlights from Jamie Dimon’s Letter to Shareholders

Jamie Dimon published his annual letter to shareholders. We look at some highlights below:

  • The banking system, and JPM in particular, is over-capitalized – Under the Fed’s most extreme stress-testing scenario, where 35 of the largest American banks bear extreme losses (as if each were the worst bank in the system), the combined losses are about 6% of the total loss absorbing resources of those 35 banks.
Source: JPM, PeerIQ

PM is investing billions in technology to compete – the cloud, AI, ML and digital banking

  • JPM customers can now open a bank account online in under 5 minutes and can reduce their mortgage closing times to 3 weeks.
  • The bank now has 49 Mn active digital customers, including 33 Mn active mobile customers
  • JPM is looking at fintechs in the US and in China as not just opportunities but also looming competition.

Online lender Kabbage rakes in 0m funding (Verdict), Rated: AAA

Kabbage, an online lender for small businesses, has fetched $700m in asset-backed securitisation (ABS) funding.

With the securitisation, the company’s debt funding increases to $940m.

Real-time data was Kabbage’s secret sauce, its first investor says (American Banker), Rated: A

The firm started life as a small, scrappy fintech startup in Atlanta in 2008, but has grown rapidly. It made $2 billion worth of loans in 2018 and more than $600 million in the first quarter of 2019. It also recently agreed to provide financing at the point of sale on Alibaba.com as part of a program called Pay Later.

Upstart Raises $ 50 Million and Announces New Bank Partners (Lend Academy), Rated: A

One of the big announcements on day one of LendIt Fintech USA 2019 is from consumer lender Upstart. They have announced a $50 million equity raise as well as three new partners for their “Powered by Upstart” banking as a service program. Oh, and they are getting into credit cards.

PeerStreet Lowers Minimum Real Estate Investment to $ 100 (Think Reality), Rated: A

The burgeoning peer-to-peer lending platform PeerStreet has unveiled product updates that enable investments of only $100.

The company recently announced it’s lowered the minimum investment to $100 for “small balance reinvestments” when using its automated investing product. The upgrade also expands the investment types available for automated investing to include cash offer loans and 30-day notes, which offer shorter terms than typical bridge loan investment options, the company said.

Sharestates Wins Top Real Estate Platform Award at LendIt Fintech USA 2019 (PR Newswire), Rated: A

Sharestates, a marketplace lending platform that connects real estate developers with investors, was crowned Top Real Estate Platform at LendIt Fintech USA2019 in San Francisco, California on April 9, 2019. The Top Real Estate Platform award is based on performance, volume, growth, product diversity, and responsiveness to stakeholders.

Now operating in 46 states, Sharestates offers diversified asset classes including residential, multi-family, mixed-use, commercial properties, and land acquisitions.

Since launching in 2015, Sharestates has closed on over $1.7 billion in total loan volume and returned over $675 million in principal to investors. Average annualized returns have exceeded 10% every year. As a result of its strong performance and valued relationships, 82% of Sharestates loan volume has come from repeat borrowers and 81% of its investors are repeat investors.

The stREITwise Platform Brings Real Estate Investment to All (Realty Biz News), Rated: B

The company has just announced a new acquisition to its investment portfolio, a $32 million mixed-use building in Carmel, Indiana, one of the most affluent suburbs of Indianapolis. The 140,000-square foot Allied Solutions Building, already around 87 percent leased, stands poised to increase dramatically in value thanks to its location in the heart of downtown Carmel in the heart of a busy mixed-use development surrounded by restaurants, coffee shops, fast-casual dining, service-oriented retail, and the locally renownedSun King distillery and food hall right next door.

13 cities where renting is cheaper than buying a home (AOL), Rated: A

Americans’ homeownership rate is 64.8%, according to the latest U.S. Census data.

Following are the 13 metros where renting is cheaper by more than $150 a month, beginning with cities with a smaller advantage for renters.

BlueVine Adds Term Loan to Suite of Online Working Capital Solutions to Fuel Small Business Growth (GlobeNewswire), Rated: A

BlueVine, which provides small- and medium-sized businesses with access to fast and simple online financing, announced that it is making term loan financing available for business owners through its suite of online financing solutions. The BlueVine Term Loan provides small- and medium-sized business owners with fast and simple access to financing to grow their businesses through BlueVine’s advanced online platform. More than 59 percent of businesses are looking for funds to grow their business, according to the 2017 Federal Reserve Small Business Credit Survey Report on Employer Firms. With a BlueVine Term Loan, business owners can quickly pursue larger projects and investments to bring their businesses to new heights.

Aura Approves 350,000th Affordable Loan (Bakersfield.com), Rated: A

Aura, a mission-driven financial technology company that offers affordable loans to hard-working families, this week approved its 350,000 th loan.

Since its launch in 2014, Aura has provided more than $437 million in credit-building loans to borrowers at approximately 1,200 partner locations using technology that enables local businesses to administer loan applications. Currently, Aura’s average loan size is around $1,600.

In total, Aura has raised over $403 million in social bonds across 21 bond issuances. The most recent issuance was in March for $50 million.

What Kind of Collateral Do I Need for a Business Loan? (Nav), Rated: A

Before you can qualify for a commercial loan, you’ll need to prove that doing business with your company is a good risk. This means you’ll need to pass successfully through a lender’s qualification process.

Next Wave of Personal Loan Growth May be Driven by Prime and Above Consumers (MarketWatch), Rated: A

The prime and above risk tiers have become a greater focus for lenders in recent years. Nearly two-thirds of unsecured personal loan balances originated in the first three quarters of 2018 were lent to prime and above consumers. FinTechs drove this shift as originations for prime and above grew to 62% in 2018, up from 52% in 2013. While still less conservative than banks, FinTechs’ overall risk profile for originations now aligns tightly with credit unions. At the end of 2018, FinTechs held the majority share of personal loan balances with 39%, while banks and credit unions followed with 28% and 21%, respectively.

Student Debt Isn’t Just An Employee Problem — It’s Also An Employer Problem (Killer Startups), Rated: A

The Federal Reserve Bank of New York reported in its Quarterly Report on Household Debt and Credit for the fourth quarter of 2018 that outstanding student loan debt increased to $1.46 trillion, which is $15 billion more than the previous quarter. It also reported that student loan debt rose by $79 billion in 2018.

The student debt load isn’t just impacting the individual students who enter the workforce, hoping they can find a job that enables them to make those monthly payments. I’s also slowing economic growth. A January 2019 Federal Reserve paper noted that young adults report their student loan debt is the reason they’re unable to buy a home. The same report also cited other research concluding that 20 percent of the decline in homeownership among young adults relates to student loan debt that’s been rising since 2005.

Amount Announces Cloud-Based Account Verification Platform (Kake), Rated: A

Amount today announced AmountVerify, a cloud-based platform for risk management across financial products. AmountVerify marks the first time industry leading fintech provider Avant is making a component of its cutting edge online lending platform available to financial service companies as a standalone product through Amount.

Onfido raises $ 50M to create the Identity Verification Standard for Businesses Globally (Markets Insider), Rated: A

Onfido, the global identity verification provider, today announced it has raised $50M in funding, bringing the total investment in the company to over $100M. The round was led by SBI Investment and Salesforce Ventures, with support from M12 (formerly Microsoft Ventures), FinVC and others, including existing investors.

Forward Financing Expands Capital Base with $ 90 Million Credit Facility (Yahoo! Finance), Rated: A

Forward Financing has closed on a $90 million credit facility, consisting of a $60 million senior revolving credit facility and a $30 million junior term loan. AloStar Capital Finance (“AloStar”), a division of Cadence Bank, N.A., served as the Agent on the senior facility.

Credibly Announces Investment Grade Senior Debt Offering (Yahoo! Finance), Rated: A

Today, Credibly announces the next phase in its balance sheet growth strategy with a $10 million Investment Grade-rated senior debt offering. The transaction closed on March 28, 2019.

Mitek Expands Auto-Capture User Experience Across All Digital Channels with the Addition of Desktop (GlobeNewswire), Rated: A

Mitek today announced it has upgraded its desktop browser experience to support auto-capture so customers can rapidly verify the identity of applicants across all digital channels: desktop browsers, mobile web and native applications.

According to Javelin Research, today only one third of users (34 percent) still complete the entire account opening process on their desktop.

MiSnap delivers a superior auto-capture experience for desktop and across mobile devices through:

  • Guided commands:  Real-time commands such as where to place a document in relation to the camera or detection of glare on the ID document are some of the conditions evaluated in order to help the user capture an optimal image, which improves image acceptance rates and reduces capture retries.
  • Advanced image analysis: Once MiSnap has achieved an optimal capture of the ID document, the software then further analyzes the image and makes the necessary adjustments in order to process all images consistently and accurately.
  • Modern architecture: Because MiSnap uses WebAssembly, it can perform at native speeds and is easy to integrate into customers’ web-based apps and requires minimal footprint.

58% of lenders will use AI in next two years (AI Foundry Email), Rated: A

Fannie Mae recently put out a 

  • Nearly two-thirds of lenders are familiar with AI
  • But, only 27% are using it in their businesses now, and…
  • Only half of that group are currently using it with customers (the rest are doing trials)
  • However, looking ahead two years – 58% of lenders expect to use AI/ML in their mortgage business.
  • Of the rest:
      • 22% predict they’ll be investigating AI
      • 19% foresee being in a “wait and see” mode

    These data points show us that “prime time” is coming soon for AI/ML in mortgages. 

    Fintech alone won’t be enough to boost credit union mortgage volumes (Credit Union Journal), Rated: A

    How can credit unions, especially small institutions, compete with Quicken Loans’ Rocket Mortgage “Push button, get mortgage” campaign?

    They can’t – and, sources said, they shouldn’t try.

    GROUNDFLOOR Wins 2 FinTech Awards (Groundfloor Email), Rated: B

    GROUNDFLOOR was named Best Crowdfunding Platform by the 

    Pulte Mortgage and Finicity Partner to Combat the Home Loan Paper Chase (MarketWatch), Rated: B

    Pulte Mortgage announced today it is partnering with Finicity — a leading provider of real-time financial data access and insights, to provide its borrowers with a faster, simpler and more secure way to navigate the home financing process.

    Hudson Data and LendingPoint partner to prevent Synthetic ID fraud (Finanzen), Rated: B

    Hudson Data and LendingPoint announced that they are partnering to create an industry solution to prevent synthetic identity fraud using powerful graph machine learning.

    Dharma crypto lending platform officially goes live (CoinGeek), Rated: B

    Dharma Labs completed a Series A funding round earlier this year to support its cryptocurrency lending platform project. The San Francisco-based company raised $7 million from companies such as Polychain Capital, Coinbase Ventures and others and, if there was any concern about the platform not going live, those concerns are now extinguished. Dharma announced this past Monday in a Medium post that the platform is now live.

    United Kingdom

    RateSetter ISA Milestone: Passes £200 Million in Subscriptions (Crowdfund Insider), Rated: AAA

    UK-based peer-to-peer lender RateSetter recently announced its ISA has now passed the milestone of attracting £200 million in subscriptions.

    “Investors have enjoyed an average annualised return of 4.5%, tax-free of course, since the RateSetter ISA launched in February 2018. The average RateSetter ISA balance stands at £11,000.”

    Funding Circle boss pocketed more than £4m last year (P2P Finance News), Rated: AAA

    FUNDING Circle founder Samir Desai (pictured) earned more than £4m last year, having cashed in some of his shares at the time of the peer-to-peer lender’s stock market flotation.

    Desai took home a salary of £210,000 last year, according to Funding Circle’s annual report, a four per cent increase from his salary of £202,000 in 2017.

    The majority of his total remuneration of £4.081m came from cashing in share options.

    Zopa rewrites outdated money idioms (The London Economic), Rated: AAA

    Each future-looking idiom challenges the status quo. For example, according to Zopa, the ‘signing for the bill’ gesture will be redundant soon. Instead, when people have finished their meal, people will be more likely to signal facial or iris recognition to the waiter. Jonesy gives his take and takes it one step further by illustrating a customer displaying his eyeball to request the bill.

    Source: The London Economic

    Fintech unicorns are leading job creation in London (Business Insider), Rated: AAA

    In 2018, there was a 61% increase in fintech job creation within London from the previous year, per a new report by Robert Walters, making it the fastest growing sector for vacancies in the city.

    The UK houses 25% of all fintech unicorns and their growth plans call for more talent. There are 29 fintech unicorns worldwide, seven of which are based in the UK, making the UK second only to San Francisco, which is home to nine.

    Over 30% of jobs in the UK’s fintech industry are for IT-related roles, compared with 24% in 2017. And fintech unicorns’ hiring for IT professionals increased 74% year-over-year (YoY).

    Source: Business Insider

    London to take San Francisco’s fintech unicorn crown (The Innovation Enterprise), Rated: A

    However, the report has predicted that London could take the lead as early as this year, as the city receives 39% of European fintech venture capital funding, with the runner-up, Berlin, taking just 21% of the total investment.

    With 50% against a global average of 33%, the UK also enjoys the highest rate of consumer fintech adoption of any Western country, only beaten by India and China, the report found.

    LendInvest gains £200m HSBC funding as it seeks home loan market entry (Verdict), Rated: A

    LendInvest, which operates an online marketplace for mortgages, has received an investment of £200m ($261m) from HSBC UK to support its foray into the regulated home loan sector.

    Peer-to-peer scheme for first-time buyers launches (FT Advisor), Rated: A

    Start-up company Stepladder is promoting a new way for first-time buyers to save for a house deposit.

    Arbuthnot Latham launches Arbuthnot Direct for those seeking long-term interest returns (Arbuthnot Email), Rated: B

    Arbuthnot Latham & Co., Limited (“Arbuthnot Latham”) is pleased to announce the launch of its new platform under the trading name of Arbuthnot Direct. Arbuthnot Direct offers fixed term deposits online, targeting retail customers who are seeking interest returns on their money over the longer term. The platform held a successful soft launch in February 2019 and has already met with a positive reception.

    China

    The rise and fall of P2P lending in China (Finextra), Rated: AAA

    It is worth mentioning that the size of China’s P2P industry is larger than that of the rest of the world combined, with outstanding loans of US$217.96BN.

    China’s online P2P lending industry grew rapidly between 2011 to 2015, with the number of P2P lenders growing from 50 to nearly 3,500 respectively.

    Trouble started brewing in China back in 2016, when statistics released by the Chinese Banking Regulatory Commission showed that about 40% of P2P lending platforms were in fact Ponzi schemes.

    This triggered the shutdown of P2P lending platforms; over 900 closed by the end of 2016. For 2018, only 1,021 providers remained in place.

    Source: Bloomberg News

    Shenzhen police arrest Zhang Wei, calling China Create Capital a ‘mafia-like gang’ (SCMP), Rated: A

    China Create Capital Limited, the investment holding company headed by the 46-year-old Heilongjiang native is a “mafia-style gang” involved in illegal fundraising, harassment, blackmail, illegal detention of people and the possession of firearms, the Shenzhen police said in a notice. The whereabouts of Zhang, who was arrested with 43 other executives of China Create, could not be ascertained.

    The arrests are the latest in the Chinese government’s crackdown on crime and corruption in the country’s financial system and capital markets, where 1,129 “mafia-like” syndicates were broken up across 10 provinces last year, with 4.94 billion yuan (US$737 million) of assets seized, according to the police. A number of Chinese oligarchs including Anbang Group’s

    former chairman Wu Xiaohui

    , CEFC Group’s founder Ye Jianming and financier Xiao Jianhua had fallen from grace since 2017.

    $ 60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market (CoinDesk), Rated: A

    These new crypto lenders include such notable names as Bixin Capital, FBG Capital and DGroup, founded by Dong Zhao, who made a name by operating one of the longest-running over-the-counter (OTC) trading desks in China. Along with a startup called Babelbank, these investors have originated a combined $60 million worth of loans over the last five months, denominated in cryptocurrencies or, in one firm’s case, Chinese yuan.

    European Union

    Klarna launches global customer authentication platform (Klarna), Rated: AAA

    Klarna today announced the launch of its global authentication platform — an aggregator with multiple global and local authentication solutions. The platform allows multinational businesses, including merchants and other banks, to provide a simple, secure and personalised customer authentication experience irrespective of market, through a one-time integration.

    Klarna Sees Payments as Evolving From Function to Engagement (WWD), Rated: A

    Klarna’s Hannah Bravo says customers chose brands based on payment options.

    This New Tool Is Helping Retailers Build Consumer Trust During Online Checkouts (Footwear News), Rated: B

    The Klarna platform enables businesses to choose from a range of global and local authentication methods so that they can find one that works best for their customer. Whether using SMS verification or emailed one-time passwords, brands and retailers can verify their customers’ identities with minimal interruption to the consumer’s shopping journey.

    International

    Drivers of Global Growth in FSB’s Shadow Banking (DBRS Email), Rated: AAA

    DBRS sees significant risks stemming from continued growth in shadow banking globally. Assets are now at $52 trillion globally, up from $30 trillion in 2010, according to the FSB. The U.S. has the largest concentration with 29% of global shadow banking assets. But, this is down from 48% in 2010, as other regions are growing faster.

    Summary highlights of the commentary include:

    • Shadow banking is still growing. This narrow, but rapidly growing, subset of nonbanks had assets of $52 trillion in 2017, up 75% from $30 trillion in 2010.
    • Since 2010, assets of nonbanks are also growing, up 61% to $185 trillion. That is 49% of the $378 trillion in total global assets in all financial institutions at the end of 2017, up significantly from 44% in 2010.
    • The key driver of this growth in nonbank assets is the expansion of OFIs. These OFIs are defined as all financial institutions that are NOT central banks, banks, insurance companies, pension funds, public financial institutions, or financial auxiliaries. Assets at these OFIs grew 71% since 2010 to a record $117 trillion in 2017, or just over 30% of assets in financial institutions globally.
    • By far, the largest segment of shadow banking globally is collective investment vehicles, which are subject to runs. These include fixed income funds, mixed funds, MMFs and hedge funds. Since 2010, this segment has grown by 130% to $36.7 trillion in assets. By contrast, growth in other segments has been less than $1 trillion, or even negative.

    Read the full report here.

    Crypto Lending Platform Salt Adds Support for Dash as Collateral (Crypto-Economy), Rated: A

    Cryptocurrency lending platform Salt will now be allowing its users to collateralize their Dash holdings including their Masternode staking coins to access loan facilities.

    India

    RentoMojo in talks to raise $ 40 million from GMO, others (livemint), Rated: A

    For RentoMojo, the latest fundraise comes almost two years after it raised $10 million in July 2017 from Bain Capital, Accel and Chiratae Ventures. Renauld Laplanche, chief executive of US-based Lending Club, also took part in his personal capacity.

    Asia

    Housing sector remains major source of complaints: BPKN (The Jakarta Post), Rated: A

    The BPKN received 154 complaints in the first quarter, most originating from the housing sector. BPKN communications and education coordinator Arief Safari said the agency had received 129 complaints on the housing sector in the first quarter, followed by six complaints on online peer-to-peer (P2P) lending, three on banking and the remainder on various sectors, including travel and e-commerce.

    Batumbu to help finance SMEs (The Jakarta Post), Rated: A

    PT Berdayakan Usaha Indonesia has announced that it aims to help small and medium enterprises (SME) access financial capital through a partnership program with its digital platform Batumbu.

    MENA

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday April 11 2019, Weekly News Digest appeared first on Lending Times.

    Thursday March 28 2019, Weekly News Digest

    structured debt

    News Comments Today’s main news: Klarna launches open banking platform. SoFi re-engineers home loans. Apple’s new credit card. OakNorth secures guarantee of $133M. Qupital raises $15M to bumrush China. Today’s main analysis: Arbuthnot Banking Group audited final results for 2018. Today’s thought-provoking articles: U.S. yield curve, new fintech products. Cities with most overleveraged mortgage debtors. Household debt. Expanding access to credit […]

    The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

    structured debt

    News Comments

    United States

    United Kingdom

    International

    Other

    News Summary

    United States

    SoFi Refreshes Home Loans, Making Home Buying Painless and Paperless (PR Newswire), Rated: AAA

    Today, SoFi announced the refresh of its mortgage offering as SoFi Home Loans, complete with a reengineered process that helps people buy or refinance a home with an online application, no hidden fees, or prepayment penalties.

    SoFi Home Loans offer competitive rates including affordable down payments, with as little as 10% down on loans up to $3MM, with no hidden fees or prepayment penalties. SoFi allows applicants to choose between four different loan terms and fixed or adjustable rates. Those interested in refinancing can choose between traditional mortgage refinancing, cash-out refinancing, and student loan cash-out refinancing. If SoFi Home Loans isn’t able to handle a loan request, SoFi provides an easy option to digitally transfer member information to its affiliate partner who may be able to help.

    Apple’s new credit card keeps advisors guessing (Financial Planning), Rated: AAA

    The Apple credit card is the latest offering by a Silicon Valley tech giant looking for a ready-made avenue into the financial services’ sector. While the new card mostly benefits loyal users of Apple products, it’s also an unwelcome reminder of an ever present question on the minds of wealth managers: Will the FAANG companies like Facebook, Amazon, Apple, Netflix and Alphabet continue their land grab of services historically provided by the financial services industry — and at what cost to traditional RIAs?

    Ominously, a majority of investors considering switching financial services providers said they would consider banking with a tech company like Facebook, Google or Amazon if they could, according to a recent survey by Novantis.

    US Yield Curve Inverts; New Products from FinTechs (PeerIQ), Rated: AAA

    For the first time in 3,000 days, and with much anticipation, the 3-month and 10-year treasury curve inverted. The median time to a recession after this curve inverts is between 1 to 1.5 years. However, unprecedented interventions such as QE (and higher central bank holdings globally) make it difficult to draw hard and fast conclusions. Market participants are pricing in a 41% probability of an interest rate cut in the September meeting.

    Source: PeerIQ; Bianco Research

    New Products from FinTechs

    FinTech innovation continues with new products from PeerStreet and Figure. PeerStreet has launched a 30-year loan to enable private investors to buy rental properties. Residential for Rent loans are targeted towards rental home operators. The rental market in the US has grown exponentially post-crisis people struggle to buy homes. The number of rental homes has grown from 36 Mn in 2006 to 43 Mn in 2017.

    Source: FactTank, PeerIQ

    2019’s Cities with the Most Overleveraged Mortgage Debtors (WalletHub), Rated: AAA

    Buying a home represents an important milestone for most consumers. But for those who dive in to the deep end of real estate without a financial safety net, the decision could lead to buyer’s remorse in the long run. Mortgage rates are slowly falling after reaching their latest peak in November 2018, and are close to the lowest they’ve been in the past 3 decades. This makes 2019 a tempting time to buy a home. Some industry experts believe 2019 is friendlier toward buyers than sellers because of the lower rates.

    Source: WalletHub

    Household Debt – Mixed Signals (DBRS), Rated: AAA

    The most recent Quarterly Report on Household Debt and Credit issued by the Federal Reserve Bank of New York (the Fed) and Equifax Inc. (Equifax) showed that household debt rose for the 18th consecutive period during Q4 2018 to $13.5 trillion, $869 billion higher than the peak reached in 2008. This represented the third-smallest increase (0.24%) over the 18 consecutive periods of growth, partly because of decreasing mortgage loan debt during Q4 2018 to $9.2 trillion from $9.4 trillion at the end of Q3 2018 and flat levels of auto loan debt at $1.3 trillion for both Q3 and Q4 2018.

    Expanding Access to Credit in the Land of New “Halves” (Lend Academy), Rated: AAA

    Credit is one of the largest, most powerful, lucrative and important industries in the world. It also is one of the best tools for wealth creation – home ownership, small business ownership and growth, and, leveraged investing.  This is readily accessible for prime consumers with more options now than ever before. But for the other half of the country that is non-prime, options are still limited and in many cases non-existent.

    Early pioneers of securitizations like SoFi, the scaling of marketplace lending like Lending ClubProsper and Best Egg, and new distribution models like Greensky and Affirm have contributed towards increasing comfort of these “new asset classes” that were mostly locked up in bank’s balance sheets.

    There are a lot of new “halves” in today’s world.

    Amount Delivers Seamless Digital and Mobile Lending Platform to TD Bank (PR Newswire), Rated: A

    Amount, a technology provider for financial institutions, today announced a strategic partnership with TD Bank. TD Bank, a top ten U.S. bank, is leveraging Amount’s platform to power the bank’s TD Fit Loan, which launched in August 2018. This initial offering allows consumers to consolidate higher-interest debt, while helping TD meet growing consumer demand for a seamless digital and mobile lending experience. Through this partnership, TD and Amount will roll out additional offerings, as well as standalone tools addressing fraud, verifications and decisioning.

    5 Freebies With Your Student Loans (NerdWallet), Rated: A

    1. Career coaching

    Who offers it: SoFi.

    SoFi members have received over 15,000 coaching sessions to date.

    4. Referral bonuses

    Who offers it: Multiple refinance lenders.

    • Education Loan Finance offers $400 for each successful referral, as well as $100 for the loan applicant.
    • Laurel Road lets you split its $400 bonus however you and your referral see fit.
    • Splash Financial provides $250 apiece for both parties.

    5. Charitable work

    Who offers it: CommonBond.

    If you prefer freebies that help others, CommonBond has a one-for-one social impact mission. For each loan the lender issues, it donates an amount based on a formula that funds a child’s education in a developing country through the nonprofit Pencils of Promise. Those donations have totaled over $1 million to date.

    CNote Launches Wisdom Fund to Close Lending Gap for Women (PR Newswire), Rated: A

    Women are the fastest-growing group of entrepreneurs in the U.S. Yet less than 5 percent of small business lending—only $1 in $23—goes to women. CNote aims to fix this disparity with the Wisdom Fund, a new impact investment opportunity launching today.

    Investors in the Wisdom Fund will earn an estimated 4 percent annual return, over a 60-month term, on a loan portfolio that’s diversified across established CDFIs. Email wisdomfund@mycnote.com to learn how you can help fund more women-owned businesses today.

    Women seeking loans should contact a participating CDFI. Partners in the Wisdom Fund’s first phase include:

    • Carolina Small Business Development Fund, which provides small business loans and financial training to startups, existing businesses and community organizations in North Carolina.
    • LiftFund, a Texas-based organization that empowers underserved entrepreneurs with capital and support services in 13 states.
    • TruFund, a national nonprofit organization that provides affordable capital to small businesses and nonprofits in AlabamaLouisiana and New York.

    Study Finds 70% of Americans Would Share More Personal Data for Fairer Credit Decisions (PR Newswire), Rated: A

    More than half (54%) of loan applicants don’t even have a clear understanding of why they receive the interest rate they do from a lender, while a majority (70%) say it is difficult finding lenders who will look at them as something other than their credit score.

    • 7 in 10 American adults (71%) wish there was another way to prove themselves to credit lenders outside of the standard credit score.
      • Hispanics (82%) and African Americans (81%) are more likely than Whites (67%) to want lenders to look at additional factors in lending decisions.
    • 77% believe more data is better when evaluating potential borrowers’ credit.
    • 71% would be willing to share more personal data with a lender if it resulted in a fairer credit decision. The motivation is even higher among middle-class earners. 79% of people making $50,000 to $75,000 would share more personal data to prove their creditworthiness, compared to 66% of people making over $100,000.
    • 84% think their bank should use modern technology to assess their creditworthiness.
      • Specifically, about half of loan applicants (53%) would like their ideal lender to use machine learning to make fairer credit decisions.
      • More than 2 in 5 (42%) would like their ideal lender to use machine learning to make the credit for homeownership more accessible to everyone.
      • Surprisingly, older generations want newer technology even more. Baby boomers and seniors (83% and 87%, respectively) wanted their banks to use new technologies to score them, compared to 79% for Millennials and Gen Zers.

    Survey: Alternative Data Sharing (Urjanet), Rated: B

    Urjanet surveyed more than 300 U.S.-based adults to assess consumer sentiment around alternative data sharing in the lending process. Key findings include:

    • A majority of consumers have multiple alternative sources of payment history
    • Alternative data sharing represents a huge opportunity for lenders to drive financial inclusion
    • Most consumers (59%) are willing to share utility and telecom data to boost chances of approval

    SigFig launches platform to help retail banks sell financial products (Investment News), Rated: A

    SigFig, the financial technology firm that developed digital advice platforms for several large financial institutions, wants to help banks automate more than investment management.

    Technology to Play Crucial Role in Preparing ABS Professionals for Next Economic Cycle (ABL Advisor), Rated: A

    An overwhelming majority (90 percent) of asset-backed securities (ABS) professionals feel that adopting new technologies will be important to preparing their businesses for the next economic cycle, according to Capital One’s sixth annual survey at SFIG Vegas 2019.

    The survey also revealed that ABS professionals believe the biggest risks to their businesses are uncertainty around regulatory risk and increased credit risk, both at 29 percent. However, despite regulatory risk being a top concern, the industry’s apprehension has nearly cut in half over the last two years. In 2018, 48 percent noted regulations were the biggest risk to their businesses while 58 percent thought so in 2017. Additional top-of-mind concerns for 2019 include increases in interest rates (18 percent) and increased competition (17 percent).

    TrustToken’s Stablecoin Now Available On Cred’s Crypto Earning Platform (BlockTribune), Rated: A

    Asset tokenization platform TrustToken has announced a strategic partnership with crypto lending platform Cred.

    Founded by former PayPal financial technology veterans, Cred is a decentralized global lending and borrowing platform that allows stablecoin issuers, exchanges and wallets to provide valuable earn and lending services worldwide.

    Fintech in Brief: Update on Legal Challenges to OCC Fintech Charter (JDSupra), Rated: A

    On March 19, 2019, the New York State Department of Financial Services (“NYDFS”) filed a brief in opposition to the Office of the Comptroller of the Currency’s (“OCC”) motion to dismiss the NYDFS’ lawsuit challenging the OCC’s statutory authority to grant special purpose national bank charters to Fintechs (the “Fintech Charter”). The brief in opposition signals that the NYDFS will continue its opposition to the Fintech Charter under the leadership of Acting Superintendent Linda Lacewell, who replaced outgoing Superintendent Mari Vullo in February. In opposing the OCC’s motion to dismiss, the NYDFS argued that it has standing to challenge the Fintech Charter, the matter is ripe for judicial review, and its claims are not time-barred. The NYDFS also argued that the OCC’s interpretation of the “business of banking” is not entitled to Chevron deference and “should be invalidated in its entirety.”

    Mortech Partners with Roostify for Enhanced Online Mortgage Experience (Business Wire), Rated: A

    Today, Mortech, a Zillow Group business providing mortgage technology solutions for mortgage lenders and secondary market teams, announced a new partnership between Mortech’s product and pricing engine (PPE) and Roostify, a digital lending platform that gives customers more control of their home buying process while allowing loan officers to utilize the latest technology to more easily process loans. The strategic partnership will integrate two proven mortgage technology solutions to improve the digital mortgage experience for many industry-leading lenders.

    Finastra brings community banking services outside the branch with the launch of Fusion Digital Front Office (Finastra), Rated: A

    Finastra has launched Fusion Digital Front Office, an innovative tablet-based banking platform that enables community banks and credit unions to take services directly to the consumer, outside of the branch. The solution provides a simple gateway to manage account origination, sales and service, and transaction processing from any remote location.

    Huobi’s US Arm Launches Institutional Group for OTC Crypto Trading (CoinDesk), Rated: A

    “We’re entering the market now with a real institutional offering, we’re definitely going to be offering some new products and services,” such as token lending and over-the-counter (OTC) trading, in the coming months, he added.

    Elevate Named as a Finalist for LendIt Fintech 2019’s Financial Inclusion Award (AP News), Rated: B

    Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, has been named as one of six finalists in the “Excellence in Financial Inclusion” category for the LendIt Fintech Industry Awards 2019. This award is given to the company that has made the biggest impact in expanding access to financial services in new and innovative ways.

    J.D. Power ranks Regions among top alternative lenders for personal loans (Biz Journals), Rated: B

    Birmingham’s largest bank has ranked among the top alternative lenders in the U.S. for providing personal loan satisfaction through digital applications.

    United Kingdom

    ARBUTHNOT BANKING GROUP (“Arbuthnot”, “the Group” or “ABG”) Audited Final Results for the year to 31 December 2018 (Morningstar), Rated: AAA

    FINANCIAL HIGHLIGHTS

    ·      Profit Before Tax £6.8m (2017: £2.5m)

    ·      Underlying profit before tax £7.4m (2017: £3.2m)

    ·      Operating income increased by 24% to £67.9m (2017: £54.6m)

    ·      Negative earnings per share 134.5p (2017: positive 43.9p)*

    ·      Continuing earnings per share 38.0p (2017: 14.0p)

    ·      Underlying earnings per share 40.3p (2017: 17.6p)

    ·      Final dividend per share 20p (2017: 19p), an increase of 5%

    ·      Total full year dividend per share 35p (2017: 33p)

    ·      Bonus share issue to create new class of non-voting shares

    ·      Net assets £196m (2017: £236m)

    ·      Net assets per share 1283p (2017: 1547p)

    ·      Underlying return on deployed equity 5.6% (2017: 4.2%)

    Consolidated statement of financial position

     

    At 31 December

    2018

    2017

    Note

    £000

    £000

    ASSETS

    Cash and balances at central banks

    17

    405,325

    313,101

    Loans and advances to banks

    18

    54,173

    70,679

    Debt securities at amortised cost / held-to-maturity

    19

    342,691

    227,019

    Assets classified as held for sale

    20

    8,002

    2,915

    Derivative financial instruments

    21

    1,846

    2,551

    Loans and advances to customers

    22

    1,224,656

    1,049,269

    Other assets

    24

    12,716

    20,624

    Financial investments

    25

    35,351

    2,347

    Deferred tax asset

    26

    1,490

    1,527

    Interests in associates

    27

    – 

    83,804

    Intangible assets

    28

    16,538

    15,995

    Property, plant and equipment

    30

    5,304

    3,962

    Investment property

    31

    67,081

    59,439

    Total assets

    2,175,173

    1,853,232

    EQUITY AND LIABILITIES

    Equity attributable to owners of the parent

    Share capital

    37

    153

    153

    Retained earnings

    38

    209,083

    237,171

    Other reserves

    38

    (13,280)

    (949)

    Total equity

    195,956

    236,375

    LIABILITIES

    Deposits from banks

    32

    232,675

    195,097

    Derivative financial instruments

    21

    188

    931

    Deposits from customers

    33

    1,714,286

    1,390,781

    Current tax liability

    236

    705

    Other liabilities

    34

    18,549

    16,239

    Debt securities in issue

    35

    13,283

    13,104

    Total liabilities

    1,979,217

    1,616,857

    Total equity and liabilities

    2,175,173

    1,853,232

    Read the full report here.

    Tech Nation Lists 10 Fintech Pioneers In Future Fifty 2019 Cohort (Forbes), Rated: AAA

    Revolut, Monzo, Starling Bank, Currencycloud, Aire, Blockchain, MarketInvoice, Quantexa, Nested and Salary Finance were revealed to be among the 24 most dynamic and fast-growing late-stage technology companies to be chosen to join Future Fifty’s 2019 cohort.

    Tech Nation and Dealroom data has also revealed that the U.K. has attracted a whopping $7.9 billion in funding in 2018 and closed the gap for exits of venture-backed companies with the U.S. As well as this U.K. sales, IPOs and mergers were worth $40 billion – ahead of every other European country – which points to the success of the tech sector as a whole in the country.

    OAKNORTH ANNOUNCES BRITISH BUSINESS BANK ENABLE GUARANTEE OF £133M (Business Leader), Rated: AAA

    OakNorth has today announced its participation in the ENABLE Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank. OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.

    The ENABLE Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

    Inside OakNorth’s plan to take its lending technology global (Tearsheet), Rated: A

    As a challenger bank, OakNorth charts a different course. While Revolut, Monzo, and N26 focus on putting their digital current accounts in the hands of millions, OakNorth doesn’t even offer a current account. While other challengers are racing to acquire banking licenses all over the world, OakNorth is happy with just a UK license.

    OakNorth is also posting profits while other challengers aren’t.  The bank announced a £33.9m profit for 2018, up 220 percent from 2017.

    OakNorth provides debt financing to entrepreneurs in growing businesses, lending £0.5M to £40M to profitable, scale-up, British businesses. To fund its underwriting, OakNorth offers digital savings accounts. It currently has 40,000 customers with digital savings accounts and has lend £3 billion in under four years.

    Successful UK Payday Lender Western Circle Limited Begins Offering Personal Loans Online (Finger Lakes Times), Rated: A

    Western Circle Limited has made a name for itself by offering responsible payday loans online. Their decision to branch out into the personal loans market through the new brand PersonalLoansNow.co.uk was well received by their customers.

    Five last-minute IFISA ideas (P2P Finance News), Rated: A

    THE END of the tax year is fast approaching, so if you haven’t yet taken full advantage of your £20,000 ISA allowance to make tax-free returns, now is the time. The peer-to-peer lending industry is expecting to see an uptick in inflows into Innovative Finance ISAs (IFISA) this year now that there is a much wider choice of products available and the potential for higher returns than cash with lower volatility than the stock market.

    FINTECH LAUNCHES AI LOAN COMPARISON SERVICE (Business Cloud), Rated: A

    Loan marketplace Monevo has launched a new platform to give consumers comparisons of pre-approved loans.

    Based in Macclesfield, the business is a licensed credit broker for personal and business loans and is Europe’s largest personal loan marketplace.

    An Alternative Approach (IFA Magazine), Rated: A

    When it comes to asset allocation, advisers constantly face the challenge of finding real diversification in client portfolios. Sue Whitbread met with Matthew Ardron and Benedict Yung of Basset & Gold Group, to talk about their approach of offering fixed rate bonds that invest in alternative lending.

    Half of Brits running out of cash before payday – pushing them to rogue lenders (Mirror), Rated: A

    Exclusive research for Mirror Money shows by the end of this month, those turning to payday loans will have shelled out more than £214million – that works out at £28 per second

    P2P to have strong presence at Innovate Finance Global Summit (P2P Finance News), Rated: B

    FOUNDERS of the ‘big three’ peer-to-peer lenders are among the confirmed speakers at Innovate Finance Global Summit (IFGS), which takes place next month at London’s Guildhall.

    Giles Andrews of Zopa, Samir Desai of Funding Circle and Rhydian Lewis of RateSetter are all participating in various sessions at the fintech industry trade body’s flagship conference on 29-30 April 2019, which marks the start of UK Fintech Week.

    Other confirmed speakers from the P2P world include Zopa chief executive Jaidev Janardana, ArchOver’s Angus Dent, Ali Celiker from British Pearl and Roxana Mohammadian-Molina from Blend Network.

    China/Hong Kong

    Hong Kong SME financing platform raises $ 15m for China push (Finextra), Rated: AAA

    Hong Kong-based online SME trade financing platform Qupital is targeting the mainland after closing a $15 million Series A funding round led by CreditEase FinTech Investment Fund.

    Consumers hunger for loans, lenders popping up everywhere (Shine), Rated: AAA

    Qin Shuifeng, 30, who lives in the suburban district of Jiading, went to a branch of the Postal Savings Bank of China in 2016 to seek a loan for home improvements.

    The lender granted her and her husband a credit line of 1 million yuan (US$148,600), of which they drew 600,000 yuan, with an interest rate 10 percent higher than the benchmark rate.

    Competition 

    The central government has issued a series of policies favorable to consumer lending since the second half of 2018.

    Still, risks remain. To realize sustainable development, players need to build strong operational and risk control capabilities, either by themselves or in partnership with financial technologies firms.

    European Union

    Klarna Launches Open Banking Platform (PR Newswire), Rated: AAA

    Today, Klarna, one of Europe’s leading payment providers and the global market leader in payment initiation services, announces the launch of its own Open Banking Platform. This platform will enable access to more than 4,300 European banks through a single Access to Account (XS2A) API in line with Payment Services Directive (PSD2). Klarna’s XS2A API is the most established and proven solution that has been developed at scale across markets for almost 15 years through the Klarna Group company Sofort.

    This platform provides a fully proven and mature infrastructure, superior market coverage and connectivity, with access to 99% of online banking consumers currently across 14 European markets. By opening up its own advanced technology and capabilities, Klarna is simplifying and democratising access to APIs securely. Both established and newer banks and fintechs as well as other licensed businesses, will be able to build smart and personalised offerings that meet the evolving needs of consumers across Europe. Klarna has been one of the leading proponents of the PSD2 legislation and believes high-quality APIs will drive innovation and competition but most importantly will empower consumers across Europe with increased choice, control and clarity on their finances, and ability to access better products.

    International

    Has Alternative Lending Seen Its VC Peak? (PYMNTS), Rated: AAA

    U.S. FinTech funding reached its highest level in five years in 2018, according to CB Insights data published last month, hitting $11.89 billion. Yet at a time when analysts say VCs are focusing more on late-stage investment, alternative lenders are having a tougher time securing funding, particularly market newcomers in a crowded market.

    But there is evidence that investors’ appetite for alternative lending startups is on the wane, even as overall FinTech funding continues to climb — and as the success of the alternative lending market grows, too.

    eToro buys blockchain company Firmo (Fintech Futures), Rated: A

    Just weeks after launching in the US, trading and investment platform eToro announced plans to purchase Copenhagen-based blockchain firm Firmo, reports Julie Muhn  at Finovate

    Founded in 2017, Firmo offers a programming language called FirmoLang that runs on a sidechain. Exchanges can leverage FirmoLang to create financial instruments such as P2P lending platforms or cryptocurrency derivatives with tokens. And Firmo is versatile, allowing the tokens to be run on any blockchain.

    Battlestar Capital Earns 30% Returns For Holding Crypto (ChainBits), Rated: B

    Battlestar Capital, which is a blockchain staking-as-a-service company, revealed that customers could potentially earn up to 30 percent on a yearly basis when it comes to their idle crypto holdings. Here is everything about the startup’s claims in a nutshell.

    In an interview, the company said that it has teamed up with crypto lending startup called Celsius Network in an attempt to launch a large-scale service capable of offering potentially high returns.

    Australia

    APRA Proposes Stricter Credit Risk Management Standards (Regulation Asia), Rated: AAA

    The revised prudential standard enhances board oversight of credit risk and requires more intensive credit checks on borrowers. APRA also highlights the risks of P2P originated loans.

    India

    New modes of lending, fund raising on cards (The Asian), Rated: AAA

    In a bid to change the market dynamics of the banking and financial sectors, the Reserve Bank of India (RBI) will soon come up with alternative models of lending and capital raising for the sectors.

    Asia

    Bukalapak partners three P2P lenders to provide loans for offline businesses (Tech in Asia), Rated: AAA

    Bukalapak is teaming up with Indonesian P2P lending startups Amartha, Modalku, and PohonDana to provide loan facilities in a program called Modal Mitra. The loans are available to offline vendors who are part of the company’s Mitra Bukalapak program.

    The financing offered through Modal Mitra ranges between US$70 and US$700 and can be paid back in up to six months, with weekly installments starting from US$6. It can only be used for purchases in the Mitra Bukalapak app.

    Eurasia

    Russian fintech launches digital bank 131 (Finextra), Rated: AAA

    Bank 131, a new digital bank focused on Russian companies and entrepreneurs that work for global internet companies and/or buy from global ecommerce companies with a Russia presence, announced today they have received their banking license from authorities – the first and only new bank to do so in four years.

    Canada

    Shadow banking has grown, but risks to financial systems are modest (Advisor’s Edge), Rated: AAA

    Canada’s shadow banking sector has grown substantially in recent years, but the overall financial system has grown even faster, keeping risks in check, suggests a new report from the Bank of Canada.

    In the report, the central bank details the results of its monitoring of so-called “non-bank financial intermediation” (NBFI), also known as shadow banking. Among other things, the report finds the Canadian NBFI sector has grown by 1.7 times since 2006, driven by strong growth in investment funds, securities financing transactions and private lending.

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday March 28 2019, Weekly News Digest appeared first on Lending Times.

    Thursday February 14 2019, Weekly News Digest

    OnDeck revenues

    News Comments Today’s main news: SoFi invests in Apex Clearing. Zopa chairman steps down. Ratesetter ISA tops 17M GBP in first year. Assetz Capital surpasses 700M GBP in lending. Revolut denies getting Lithuanian bank license to influence politics. Today’s main analysis: OnDeck’s Q4 earnings review. Today’s thought-provoking articles: What’s happening with auto loans. How Amazon controls small businesses with lending. Banks […]

    The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.

    OnDeck revenues

    News Comments

    United States

    United Kingdom

    European Union

    International

    Other

    News Summary

    United States

    SoFi held talks to acquire a fintech company backing some of the hottest robo advisors as it eyes expansion beyond its lending roots (Business Insider), Rated: AAA

    OnDeck Q4 2018 Earnings Review (Lend Academy), Rated: AAA

    The company achieved much of what they set to do in 2018 and posted another solid quarter as they rounded out the year. Q4 2018 net income came in at $14 million on gross revenues of $109.5 million. The company ended the year with a total of $27.7 million in net income. Below is a snapshot of their Q4 and 2018 full year highlights.

    As of Q4 2018 the company still had $246 million of excess debt capacity.

    BB&T and SunTrust merger; Tech in Bank Earnings (PeerIQ), Rated: AAA

    The Fed’s January 2019 Senior Loan Officer Survey showed that banks tightened standards for commercial real estate (CRE) loans. Overall, banks tightened standards for credit card borrowers. However, lending standards for most categories of consumer loans and C&I loans remained unchanged. Banks also reported weaker demand for both business and household loans.

    Source: Federal Reserve, PeerIQ

    BB&T agreed to buy SunTrust for $28.2 Bn – the first major mega-bank deal in a decade. This deal will create the sixth-largest US retail bank. The M&A is supported by a constructive regulatory environment fostered by the OCC and CFPB, among others. The previous large acquisition was the JP Morgan acquisition of Bank One in 2004.

    A major motivation for the deal was the ability of both banks to pool resources to build better digital offerings. SunTrust has a FinTech focused fund and has partnered with FinTech lenders to provide home improvement and small business loans. Banks are investing billions in digital tech spend to maintain relevance with customers that are increasingly eschewing bank branches for a seamless, online, full-service banking and wealth management customer experience.

    Auto Loans in High Gear (Liberty Street Economics), Rated: AAA

    Total household debt increased modestly, by $32 billion, in the fourth quarter of 2018, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. Although household debt balances have been rising since mid-2013, their sluggish growth in the fourth quarter was mainly due to a flattening in the growth of mortgage balances. Auto loans, which have been climbing at a steady clip since 2011, increased by $9 billion, boosted by historically strong levels of newly originated loans. In fact, 2018 marked the highest level in the nineteen-year history of the loan origination data, with $584 billion in new auto loans and leases appearing on credit reports, up in nominal terms from 2017’s $569 billion. In this post, we take a closer look at the composition and performance of outstanding auto loan debt using the New York Fed’s Consumer Credit Panel (CCP), which is based on anonymized Equifax credit data and also the source for the Quarterly Report.

    Amazon’s lending perpetuates the tech giant’s control over small businesses (Tearsheet), Rated: AAA

    Amazon runs a marketplace with 2.5 million sellers, 24,000 of which had more than $1 million in sales on the platform in 2018. These sellers represent the potential customer base for the company’s lending model.

    From this base of borrowers, Amazon has been able to reportedly lend over $1 billion in 2017, exceeding  $3 billion in total lending volume from its inception in 2011 to 2017. As for 2018, in its annual report, the company reported receivables outstanding from their lending program of $710 million, up from $692 million a year prior.

    With access to detailed information and data on each seller, Amazon is able to mitigate lending risk substantially. Seller metrics only available to Amazon are utilized to determine a small business’s creditworthiness. Sales history, product offerings, customer service feedback, and shipping metrics enable Amazon’s lending business to have better insight into how to accurately issue loans. This allows Amazon to have an understanding of the health of each small business on its seller marketplace.

    Goldman Sachs, Point72 and others invest $ 44 million in business credit startup Nav (Reuters), Rated: A

    Nav, a startup that gives small businesses free access to their credit reports, said on Monday that it had raised $44 million from investors including Goldman Sachs Group Inc (GS.N), Point72 Ventures and Experian Ventures (EXPN.L).

    Well Fargo Outage Points to Opportunity in Digital Banking (Lend Academy), Rated: A

    Wells Fargo is still digging out from a PR disaster last week when the bank went offline for a large segment of customers due to a fire alarm triggered in a server facility in Minnesota. Customers could not access the mobile app, the website or ATMs. The incident has been used to highlight how big an opportunity there is for fintech firms or more nimble banks.

    What the outage shows is that bank infrastructure is still stuck in the past, analysts rightly askedwhy Wells Fargo did not have the bank running on a cloud based system.

    Digital bank Chime seemed to benefit from the news with more than 10,000 accounts being opened, a record 24 hour period for the startup.

    new survey by Fraedom says 80 percent of banks believe challengers have impacted their business and 30 percent say they are their biggest threat.

    Susan Ehrlich of Earnest (Lend Academy), Rated: A

    Our next guest on the Lend Academy Podcast is Susan Ehrlich, the CEO of Earnest. They are one of the largest student loan refinancers in the country and they also offer personal loans. Back in 2017 Earnest was acquired by the student loan servicer Navient which was itself spun out from Sallie Mae in 2014.

    Government Shutdown Slows SBA Lending Volume, Approval Percentage Dipped Slightly in January (GlobeNewswire), Rated: A

    Business loan approval rates dropped three-tenths of a percent at regional and community banks in December 2018. Small bank approvals dropped a full percentage point from 49.9% in December 2018 to 48.9% in January.

    Small business loan approval rates for big banks remained at a record high 27% in January 2019, according to the Biz2Credit Small Business Lending Index, which examines more than 1,000 small business credit applications made via its online lending platform.

    Goldberg added that since reopening on January 28, her office has guaranteed more than 200 SBA loans worth $59.3 million.

    Institutional lenders climbed up to 65.1 %, a jump of three-tenths of a percent from December’s mark of 64.8%.

    Loan approval rates among alternative lenders rose from 56.6% in December to 57.3% in January, a jump of seven-tenths of a percent.

    Citi rolls out new personal loan, online savings account (American Banker), Rated: A

    Citigroup has launched a new consumer loan product and a new high-yielding savings-account as part of its rollout of its new digital bank.

    The New York bank recently introduced Citi Flex Loan, which allows select existing Citi credit card customers to convert part of their credit lines to a loan with a fixed annual percentage rate, Mark Mason, Citigroup’s incoming chief financial officer, said Tuesday at an investor conference.

    Square’s banking bid avoids backlash that doomed Walmart’s (American Banker), Rated: A

    As Square seeks federal approval for a Utah industrial loan company, the fintech’s bid has so far avoided the kind of loud, public opposition that marred past ILC bids by higher-profile nonbanks.

    Community banks still criticize the ILC charter as a banking loophole for non-financial firms, and the Independent Community Bankers of America opposes Square’s application.

    Almost 60% of small business owners launch with less than $ 25,000 (CNBC), Rated: A

    At least that’s according to entrepreneurs polled recently by Kabbage, a financial services and data platform serving small businesses. More than half of those polled, or 58 percent, started their businesses with less than $25,000. A third started with less than $5,000.

    These numbers track with the latest data from the U.S. Census Bureau, which found that the median cost to start or acquire a company is about $25,000. It did find fewer businesses that begin with less than $25,000, only 46 percent, though that could be due to its inclusion of new owners who purchase existing operations as well owner starting from scratch.

    LoanStreet Adds Commercial Lending Features for Financial Institutions (Crowdfund Insider), Rated: A

    LoanStreet, an online platform that enables traditional finance like banks credit unions and other direct lenders to streamline the process of sharing, managing, and originating loans, has added new features. The SaaS platform now offers commercial loan origination and administration solution for any size financial institution, loan or deal volume.

    LoanStreet’s new lending features include:

    • Built-in collaboration tools offering the flexibility to originate the loan best suited to your borrowers’ needs without sacrificing the ability to invite other financial institutions into the deal.
    • Single access point allowing all parties, including borrowers, lenders, attorneys and auditors, continuous and secure access to the same information.
    • Integrated platform from origination to maturity avoids re-keying, duplication of efforts and eliminates transfer errors and other critical information loss that occurs over time.
    • Efficient process management enabling online, borrower self-service of key administrative tasks — including online payment acceptance — while improving internal controls and information flow.
    • Automated reporting facilitating completion of all applicable regulatory and financial entries for you and every investor.

    Velocity Investments sues woman for breach of contract, seeks ,500 in damages (Louisiana Record), Rated: A

    Velocity Investments LLC, assignee of Lending Club Corporation, filed a complaint against Heather Darling on Feb. 12 in the 24th Judicial District Court. According to the lawsuit, the plaintiff states that the defendant has failed to pay off the balance of $22,495.23 plus interest on a contract between the parties. The defendant is accused of sums due on an open account and breach of contract.

    Online Loan Companies Are No Easy Fix for Desperate Borrowers (Real Daily), Rated: A

    Lending Club is currently the largest online lender in the world. By some estimates, Lending Club, which launched in 2007, facilitated anywhere between $35 billion and $55 billion in online loans in 2018.

    Now as more financial institutions are beginning to extend loans, Americans are falling even deeper into debt again. Americans, as individuals and households, owed over $13 trillion dollars, collectively, in 2018.

    Best News We’ve Heard All Day: More Single Women Own Homes Than Single Men (Pure Wow), Rated: A

    Online loan marketplace LendingTree reports that on average, single women own around 22 percent of homes, while single men own less than 13 percent. The study states that the gender gap in housing across the country is particularly interesting “given the average woman in the U.S. only makes 80 percent of what the average man does.” Interesting, indeed. (We can think of another word for it.)

    Thoma Bravo Is Buying Digital-Focused Mortgage Company (WSJ), Rated: A

    Thoma Bravo LLC has agreed to buy mortgage software firm Ellie Mae Inc. for $3.7 billion, the latest indication that challenges in the home-lending market are spurring consolidation across the industry.

    The transaction will give the private-equity firm control of a company whose technology has been used to help automate the closing of millions of home loans. Based in Pleasanton, Calif., Ellie Mae handles the technology that underpins the entire home-loan origination process, and its services are used in

    INSIKT Changes Name to Aura (Business Wire), Rated: B

    INSIKT, a mission-driven financial technology company that offers affordable loans to hard-working families, today announced that it has changed its name to Aura to expand its focus on creating greater financial health, independence and economic stability for millions in America.

    Roostify Expands Advisory Board with Investment Virtuoso (Roostify), Rated: B

    Roostify, the San Francisco-based digital lending platform provider, announced today the addition of financial services consultant Marshall Lux to its advisory board. Lux, a distinguished consultant, advisor and educator, brings more than 30 years’ experience in private equity to the rapidly expanding business and reflects Roostify’s commitment to perfecting a scalable operational model and further developing an ecosystem of technology partners and strategic alliances.

    LendIt Fintech USA 2019 (LendIt), Rated: B

    April 8-9
    Moscone West
    San Francisco

    HIGHLIGHTED KEYNOTES

    Sallie Krawcheck
    CEO & Co-Founder
    Ellevest

    Rob Frohwein
    CEO & Co-Founder
    Kabbage

    Steven Streit
    CEO
    Green Dot

    Mike Cagney
    Co-Founder
    Figure

    United Kingdom

    Zopa chairman Giles Andrew to step down after 15 years (Independent), Rated: AAA

    Zopa’s co-founder Giles Andrew is to step down as chairman after 15 years at Britain’s oldest peer-to-peer lender.

    Zopa appoints Virgin veteran McCallum as chairman (Finextra), Rated: A

    P2P lender Zopa has appointed former Virgin Management CEO Gordon McCallum as chairman as it gears up for the forthcoming launch of its new banking venture.

    Ratesetter ISA tops £175m in first year (AltFi), Rated: AAA

    The peer-to-peer lending platform said its ISA accounts for one-fifth of its £830m of funds under management.

    Peer-to-peer lending platform Ratesetter said it has been “blown away” by the popularity of its first ISA product, which has hit £175m of subscriptions a year after launch.

    Assetz Capital surpasses £700m lending mark (Bridging and Commercial), Rated: AAA

    Assetz Capital has now lent over £700m to SMEs and property developers since launching in 2013.

    The P2P lending platform has enjoyed significant progression, providing over £200m of funding in the eight months since it surpassed the £500m lending milestone in June 2018.

    Former Assetz Capital founder launches fintech consultancy (AltFi), Rated: A

    The co-founder of one of Europe’s largest peer-to-peer lenders has launched a fintech consultancy to help young firms “avoid some of the mistakes made by the early incumbents of the industry”.

    Former Assetz Capital chief credit officer Andrew Holgate will lead a team of City veterans at consultancy Equitivo, which will help growing fintech firms raise cash, focus on strategy, trim operations and boost performance.

    ‘There is no magic bullet, people will get P2P over time’ (FT Adviser), Rated: A

    The chief operating officer of peer-to-peer platform Relendex, Max Lehrain, has concerns about the Financial Conduct Authority’s crack down on P2P lenders and crowdfunding platforms.

    UK challenger bank Starling secures £75m for European expansion (Fintech Futures), Rated: A

    Life is sweet for UK challenger bank Starling as it has raised £75 million in funding for its expansion plans in Europe.

    It got £60 million in a Series C round led by Merian Global Investors, including the Merian Chrysalis Investment Company.

    Monzo Launches First 100 Business Accounts (Crowdfund Insider), Rated: A

    UK challenger bank Monzo announced on Monday the launch of its first 100 business accounts. This news comes just a few months after Monzo revealed it was considered business banking, with Founder and CEO, Tom Blomfield, stating 2019 plans included business accounts. Speaking about the new accounts, Monzo reported:

    Main Street banks say fintechs like Monzo, N26 and Chime pose the biggest disruptive threat to their businesses (Business Insider), Rated: A

    Main Street banks believe upstarts like Monzo, N26 and Chime, known as challenger banks, pose a significant threat to their business, according to a recent survey.

    Fraedom, a credit card specialist who works with companies like Visa, SunTrust, and Bank of Montreal, surveyed bankers on what some of the biggest impacts to their business will be in 2019. The vast majority (80%) believe challenger banks have an increased impact to their business, and 30% pegged the new competitors as the biggest disruptive threat to their business in 2019.

    Tandem Bank boss calls for rate cut to kick-start UK economy (AltFi), Rated: A

    Ricky Knox, chief executive of app-only lender Tandem Bank called on the central bank to cut rates to kick-start growth, as currently savers are locking away cash in specialist higher interest accounts.

    Peer-to-Peer Lending and Brexit (4th Way email), Rated: A

    Shares plunged and the pound plummeted to a 31-year low when the UK voted to leave the EU. More recently chaotic Brexit negotiations indicate a disorderly exit that could see investors avoid traditional investments in the UK, but what does this mean for peer-for-peer lending and should lenders be worried?

    Bank and P2P lending is far less volatile than equity investing, because:

    • It is short-term orientated.
    • Lenders easily diversify widely across thousands of investments – loans – as opposed to a typical stock investor who diversifies across hundreds of shares through share funds.
    • In P2P lending, buy/sell price swings, often fuelled by uncertainty, are usually irrelevant, since lenders hold loans for the full term.
    • Lenders are usually in a better place in the queue compared to equity investors when recovering losses is involved, which can mean smaller losses on individual investments (loans) that go wrong.
    • With lending being data driven, recession conditions are easier to plan for. A turbulent P2P Brexit would mean a tripling of defaulting loans in some kinds of lending and cut-price sales of borrowers’ assets. Interest rates and reserve funds are prepped for most disasters, leaving a very low chance of a sizeable overall loss on a well-diversified, low-risk lending portfolio.

    Most investors in peer-to-peer lending are using platforms that are run by people with relevant banking experience. The banks, when we look at their bread-and-butter lending, have found it easy to maintain net profits even during multiple downturns over the past 20 years, which includes the Great Recession. This is across the spectrum of lending, from buy-to-let mortgages to personal loans and credit cards. Perhaps surprisingly, retail and small business lending combined was still profitable for the UK’s high street banks during the 2008 and 2009 crash.

    Learn more about 4th Way here.

    Mojo Mortgages secures £7million to revolutionise the UK mortgage experience (Manchester Digital), Rated: A

    Mojo Mortgages, a fintech start up based in the North West has secured £7million in Series A funding to transform the mortgage experience.

    Mortgage Brain boosts user numbers (Mortgage Introducer), Rated: A

    Mortgage Brain welcomed over 2,000 new customers during 2018 with a host of national networks, corporate firms and individual adviser firms choosing to use one or more of its products and services.

    A number of new customers – including Censeo, Intelligence Mortgage Solutions, Your Expert Group, Affinity Mortgages and Your Mortgage Solutions – as well as a number of contract renewals and user license increases, have all contributed to Mortgage Brain’s growth throughout 2018.

    UK inflation below official target for first time in 2 years (Miami Herald), Rated: A

    Lower energy costs as well as a waning impact from the pound’s sharp fall in the aftermath of the country’s Brexit vote have helped consumer price inflation in Britain fall below the Bank of England’s target of 2 percent for the first time in two years.

    The Office for National Statistics said Wednesday that consumer prices rose by 1.8 percent in the year to January, down from the 2.1 percent recorded in the previous month. Inflation has been consistently falling since August as the effects of the pound’s decline drop out of annual comparisons. The latest decline was further accentuated by a fall in the price of electricity, gas and other fuels.

    Inflation is now at its lowest since January 2017, when inflation was also 1.8 percent.

    Arbuthnot Commercial ABL delivers £12m refinancing facility (Bridging Loan Directory), Rated: B

    Arbuthnot Commercial Asset Based Lending Ltd. is delighted to announce it has completed a £12m refinancing for L&C Limited, trading under Red 7 Marine (“R7M”), provider of nearshore access solutions to the UK marine construction and maintenance industry, and an investee company of Perwyn Private Equity (“Perwyn”).

    European Union

    UK fintech unicorn Revolut forced to deny links to Russia (Business Insider), Rated: AAA

    Unicorn challenger bank Revolut has strongly denied claims that its activities in securing a banking license in Lithuania are attempts to interfere in the country’s politics.

    Revolut was granted a European Banking License in Lithuania in December but has since faced claims of interfering in the country’s political processes by Lithuanian Member of Parliament Stasys Jakeliūnas, chair of the Lithuanian parliament’s budget and finance committee.

    German Lending Marketplace auxmoney Overtakes Midsize Banks in Consumer Loan Origination (Crowdfund Insider), Rated: AAA

    Düsseldorf-based Fintech auxmoney has surpassed its targets in 2018. Loan volume increased by 74 percent compared to 2017. Raffael Johnen, Founder and CEO of auxmoney, commented:

    “While the major German banks are in crisis mode, the leading German fintechs are always setting new records. With our continuously strong growth, we managed to be the first credit marketplace to catch up with medium-sized banks in Germany.”

    It issued new loans totaling €551 million last year.

    Auxmoney Now Stands for 0.5% of the Market of German Consumer Loans (P2P-Banking), Rated: A

    German p2p lending marketplace Auxmoney announced that it has facilitated 551M EUR in consumer loans in the year 2018. Up 74% compared to 2017. Approximately 73,000 loans were financed. That would mean Auxmoney now stands for a market share of roughly 0.5% of the market.

    Gymshark teams up with Klarna to announce pay later service (RLI), Rated: B

    Fitness wear brand Gymshark has announced the launch of a pay later service in the UK, Sweden, Norway, Finland and Denmark. The company is now in a partnership with Klarna, a payments provider which will offer Gymshark the new payment option. The payment service will allow online shoppers to try on items at home before paying for the order.

    Instantor releases report on how machine learning is revolutionising credit risk management in Europe (Fintech Finance), Rated: B

    Instantor, the 3rd. fastest growing Swedish FinTech who makes tough calls easy within credit risk management presents “Credit Risk Management 2019 – How Do You Stack Up?”, a report based on a survey conducted by Instantor across Europe among top executives within leading financial organisations. The report reveals that two-thirds of these players are well underway to implementing machine learning (ML) and the majority benefits from its implementation within credit risk management.

    International

    30 Under 30 Europe: The Young Money Merchants Shaping Financial Markets In 2019 (Forbes), Rated: AAA

    Finance is hardly known for its youthfulness, yet this year’s Finance 30 Under 30s are proving that an old industry can learn new tricks. These young venture capitalists, fintech entrepreneurs, crypto enthusiasts and Millennial bankers, with an average age of just 27, are reshaping the sector and transforming our relationship with money.

    The Next Global Financial Meltdown Is Just Around the Corner (Equities.com), Rated: AAA

    As Bloomberg reported last year:

    Shadow banking in China has ballooned into a $10 trillion ecosystem which connects thousands of financial institutions with companies, local governments and hundreds of millions of households. The practice is now at the center of a Chinese government-led regulatory crackdown aimed at defusing financial risks that threaten the wider economy. Unlike in the U.S., traditional commercial banks drive shadow banking, or unregulated lending, in China. That’s because the banks have been able to keep shadow-banking assets off their balance sheets, thereby sidestepping regulatory constraints on lending.

    About 169 million Chinese, or about 12 per cent of the population, have invested in wealth management products online, a rise of 66 per cent from two years ago, according to a Moody’s report published this month. Essentially, they are putting money into the shadow banking system.

    “The picture is different in the European Union. Here, the shadow sector now accounts for perhaps 30–40% of total financial intermediation. But it is growing. Between 2012 and 2016, shadow banking as broadly measured expanded by almost 40% in the eurozone.

    Atlanta-based IDology to Be Acquired by GBG for $ 300m (PR Newswire), Rated: A

    GBG, the UK-headquartered Identity Data Intelligence specialist, today announces that it has conditionally agreed to acquire the entire issued share capital of IDology, a US-based provider of identity verification and fraud prevention services, for $300m (£233m) in an all-cash transaction.

    Nexo lending to offer crypto-backed loans with Blockport exchange (Bankless Times), Rated: B

    Blockport users will be able to use the Nexo platform to get crypto loans, offering them another alternative to selling their cryptocurrencies for fiat currencies. Instead of selling they cryptocurrency assets, Blockport users can now keep their crypto, with all potential upsides, and leverage them to get instant access to cash.

    Australia

    Next Growth Wave: Fintech (Seeking Alpha), Rated: AAA

    In this article we look at some fintech companies, beyond investor’s normal horizon of the United States. In Australia there is a small cluster of listed fintech companies that have started to explode. Some have made gains of 400% in a year and more than 1,000% on the back of strong revenue and turnover growth. Moreover because Australian companies lack access to large scale V.C. investments, technology companies often need to capital raise through a public listing.

    Zip Co. (ASX: Z1P)

    Zip Co. is quite similar to Afterpay and in some ways its closest competitor with an established market position. However in addition to payment splitting, it also offers interest based loans and is different in other ways.

    • Zip Co. is smaller with a market capitalization of $380 M AUD (about $266 M USD), but still has 12,600 retail partners including most of Australia’s largest retailers, however it hasn’t yet entered the U.S. or the U.K.
    • Zip Co. has Zip Pay, which provides a payment splitting application with no interest, but with more flexibility in length of time or repayment amount than Afterpay’s solution.
    • Zip Co. also has Zip Money also provides loans for purchases above $1,000 AUD, with a 3 month interest free period, but with an establishment fee of up to $99.
    • Source: Seeking Alpha

    Labor’s negative gearing policies could hurt first-home buyers (Your Mortgage), Rated: A

    “Despite Australia’s tight regulations on foreign investment, other overseas property markets are tighter – including China, Canada and New Zealand,” Driscoll said. “Unlike in Australia, the Chinese lack many appealing alternative investments at home and, due to government crackdowns on peer-to-peer lending, private equity funds and with the majority of their property being leasehold, many investors are forced to look elsewhere.”

    India

    India’s fintech future looks bright, but it needs to find its raison d’être (India Times), Rated: AAA

    Yet there is more room for growth. The market in India is still small; far more deals are being done in China, and for far higher valuations. Last year alone, venture capital investments into Chinese fintechs were more than 10 times larger than those in India, with 75 percent more deals.

    Although the value of investments in India declined by 21 percent in 2018 over the previous year, the number of deals actually rose 12 percent, making 2018 the most active year on record for fintech financing.

    RBI may change Rs 10 lakh lending cap on P2P platforms, say P2P players (India Times), Rated: A

    Peer to Peer or P2P players are hopeful that the comprehensive financial data sought by the Reserve Bank of India might help the regulator to take some major policy decisions concerning the industry.

    Asia

    Hundreds of unlicensed P2P lenders still operating in Indonesia (The Jakarta Post), Rated: AAA

    The Financial Services Authority (OJK) has found that 231 illegal peer-to-peer lending (P2P) providers, including those from other countries, have been operating in the country since January.

    An Overview on Peer-To-Peer Lending in Indonesia (Legal Business Online), Rated: A

    Two years following the enactment of Financial Service Authority (Otoritas Jasa Keuangan/”OJK) Regulation No. 77/POJK.01/2016 of 2016 (POJK 77/2016), Peer-to-Peer Lending (P2P Lending) has grown popular in Indonesia. Based on data from OJK per Oct. 2018, a total of 15,990,143,141,355 rupiah has been distributed to the borrowers in P2P Lending. It has grown 432.5% from Jan. 2018 until Oct. 2018. Until Dec. 2018, the number of P2P Lending Platform which has been registered and supervised by OJK has reached 88 companies, one of them has been given a license.

    Canada

    Finastra announces Siobhan Byron as new Head of Technology Enabled Managed Services (Finastra), Rated: A

    Finastra has appointed Siobhan Byron as Senior Vice President and Head of Technology Enabled Managed Services (TEMS). In this role, she oversees planning and execution, sales and marketing, research and development and product management across four lines of business including Checks, Enhanced Services, Student Lending and Canadian Mortgage Technology, all in the Canadian market. She oversees more than 1,300 employees that make up Finastra’s TEMS business.

    Authors:

    George Popescu
    Allen Taylor

    The post Thursday February 14 2019, Weekly News Digest appeared first on Lending Times.