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 FROM THE CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE)
- Today’s thought-provoking articles: LendIt Fintech USA 2019 slide presentations. Are crypto-tracking stocks a viable alternative to a Bitcoin ETF? Nearly 1 in 4 millennial homebuyers want to buy a home before getting married. Challenger banks overtake traditional banks in customer satisfaction.
United States
- SoFi partners with Lemonade, Root. SoFi is moving aggressively into insurance products.
- LendIt Fintech USA 2019 slide presentations. Everyone should be able to find something of interest here. Start with the keynote speaker addresses: Mike Cagney of Figure, Renaud Laplanche of Upgrade, and Rob Frohwein of Kabbage.
- Are crypto-tracking stocks viable alternatives to a Bitcoin ETF? A super-interesting read, with a little nugget about crypto lending.
- Nearly 1 in 4 millennial homebuyers want a home before marriage. Interesting study from LendingTree.
- Groundfloor doubles year-over-year revenue. Groundfloor is one of the few opportunities for non-accredited investors. They are looking better every day. Disclosure: I own stock in and have an account with Groundfloor.
- Reali acquires Lenda, opens a mortgage lending platform.
- Avant to settle with Federal Trade Commission for $3.85 million.
- Returnly raises $19 million for online returns.
- Small businesses turn more often to online lenders.
- Mastercard acquires Vyze. This looks like a move to compete directly with Affirm.
- Earnest launches private student loans.
- Banks to turn to Avant, Amount to jump start digital lending.
- Digital lenders consider stricter credit approvals.
- Smart ways to invest $1,000.
- Nearly 60% of millennials consider lottery a viable retirement plan.
- Direct Lending Investments had more than 950 investors.
- 360 Mortgage launches no-income, no-asset mortgage program.
- Virginians are suing online lenders who charge 900% interest.
- Lendio opens franchise in Phoenix.
- BlueVine, Ocrolus partner.
United Kingdom
- Funding Circle sets record high on loans under management. Congratulations.
- Salary Finance hires SoFi co-founder, raises $32.8 million. The plan is to expand into the U.S.
- Welendus closes funding round, plans to expand into India.
- New rules coming for P2P lending, crypto.
European Union
- Klarna is preparing for a stock market listing. No other details at this time.
- Klarna expands relationship with Acne Studios.
- Linked Finance has a record quarter. Congratulations.
- Online alternative finance in Europe grows 36% to 10 billion euros. This report from the Cambridge Centre for Alternative Finance is a must-read.
- Top 5 real estate crowdfunding platforms to invest in.
China
- Dianrong raising $100 million.
- Rules for online lending still aways off.
- Large P2P lenders ordered to get disclosures ready.
Other
- International: Challenger banks overtake traditional banks in customer satisfaction. This is an awesome read. Challenger banks in many countries have had an uphill battle, but the tide is turning. People are now realizing that it is not only convenient to bank online, but the service is good too.
- Asia: The Korean fintech opportunity.
- MENA: A roadmap for fintech firms entering fast-growing emerging markets. A LendIt Fintech report.
- Canada: Lendified raises $15 million.
- Australia: April holidays will impact 1 in 4 SMEs.
- Brazil: Sky-high interest rates are choking economic growth.
- India: P2P lenders seek limit on lending relaxation.
- Brazil: More on credit card interest rates.
- India: Fintechs see a lucrative opportunity in open banking.
- Asia: Singapore, Cambodia partner on cross-border fintech.
- Australia: Talking about the big banks.
News Summary
- United States
- SoFi announces partnerships to expand insurance offering (Insurance Business Mag), Rated: A
- LendIt Fintech USA 2019 Slide Presentations Now Live (LendIt Fintech), Rated: AAA
- Are Crypto-Tracking Stocks Viable Alternatives to a Bitcoin ETF? (Finance Magnates), Rated: AAA
- Nearly 1 in 4 Millennial Homebuyers Want to Buy a Home Before They’re Married (LendingTree), Rated: AAA
- GROUNDFLOOR Doubles Year Over Year Revenue (PR Newswire), Rated: A
- Real estate startup Reali acquires online lender Lenda, expands into mortgages (Housingwire), Rated: A
- Avant to pay $ 3.85M to settle allegations of deceiving borrowers (American Banker), Rated: A
- A Max Levchin-Backed Startup Raises $ 19 Million To Tackle Online Returns (Forbes), Rated: A
- Small businesses turning far more often to online lenders (American Banker), Rated: A
- Mastercard Redefines Choice at Checkout with Acquisition of Vyze (Business Wire), Rated: A
- Earnest Launches Private Student Loans (PR Newswire), Rated: A
- Banks turn to a former rival to jump-start digital platforms (American Banker), Rated: A
- Digital Lending Companies Considering Stricter Credit Approvals (Investing News), Rated: A
- 7 Smart Ways To Invest $ 1,000 (Forbes), Rated: A
- Nearly 60% Of Millennials Look To Lottery For Retirement, Survey Says (FA-Mag), Rated: A
- Direct Lending Investments Had Over 950 Investors (deBanked), Rated: A
- No-income, no-asset mortgages are back (at one lender, at least) (Housingwire), Rated: A
- Some online lenders charge 900% interest and ignore Virginia law. So borrowers are suing. (Pilot Online), Rated: A
- Lendio Franchise Opens in Phoenix to Expand Access to Capital for Local Businesses (Lendio), Rated: B
- BlueVine Partners with Ocrolus for Faster Processing of Financing Applications (Ocrolus), Rated: B
- United Kingdom
- Peer-to-peer lender Funding Circle’s loans under management soar to record highs (City A.M.), Rated: AAA
- Salary Finance raises $ 32.8m, hires SoFi co-founder for US push (Finextra), Rated: AAA
- Welendus closes funding round as it prepares for India expansion (P2P Finance News), Rated: A
- City watchdog readies new rules for cryptoassets and P2P (FN London), Rated: B
- China
- China’s P2P lending platform Dianrong raising $ 100m (Deal Street Asia), Rated: AAA
- National Rules on Online Lending Still Far From Sight (Caixin Global), Rated: A
- Large P2P lenders ordered to ready disclosures for regulators (technode), Rated: A
- European Union
- Tech unicorn Klarna could quickly be prepared to contemplate bourse itemizing (Infosurhoy), Rated: AAA
- Klarna Expands Relationship with Acne Studios (Business Wire), Rated: B
- Linked Finance marks record quarter (Tech Central), Rated: AAA
- Total Online Alternative Finance Grows 36% Topping €10 Billion (Crowdfund Insider), Rated: AAA
- Top 5 Real Estate Stocks To Invest In (Prague Post), Rated: A
- International
- Challenger banks overtake traditional banks in customer satisfaction, in 4 charts (Tearsheet), Rated: AAA
- Australia
- April holidays to negatively impact 1 in 4 SMEs (My Business), Rated: AAA
- LET’S TALK: THE BIG 4 BANKS (Dynamic Business), Rated: A
- India
- P2P firms seek RBI relaxation on lending limit (Business Standard), Rated: AAA
- Fintech startups spot a lucrative space in ‘open banking’ (Economic Times), Rated: A
- Asia
- Riding the Korea FinTech Wave (Finextra), Rated: AAA
- Cambodia, Singapore In X-Border FinTech Pact (Cambodia Daily), Rated: A
- MENA
- A ROADMAP FOR FINTECH FIRMS ENTERING FAST-GROWING EMERGING MARKETS (LendIt Fintech), Rated: AAA
- Canada
- TORONTO FINTECH, LENDIFIED, RAISES $ 15 MILLION CAD SERIES A (Betakit), Rated: AAA
- 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
United States
SoFi announces partnerships to expand insurance offering (Insurance Business Mag), Rated: A
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
- Beyond the Hype: How Blockchain Changes Everything | Mike Cagney, Figure
- Three Fintech Questions that Matter in 2019 | Renaud Laplanche, Upgrade
- You Might Need Glasses, Your Vision Sucks | Rob Frohwein, Kabbage
Advancements in Credit, Underwriting and Identity
- Go with the flow? What cash flow data has to say about thin file borrowers | Melissa Koide, FinRegLab
- What are the data points telling us about the current credit market | Joseph Breeden, Prescient Models, Ram Ahluwalia, PeerIQ, Jason Laky, TransUnion Ashish Gupta, Prosper, Moderator: Julian Hebron, The Basis Point
Small Business Lending Innovation
- Evolving the SMB Toolkit to Meet New Demands in Lending | Omri Dahan, Marqeta
Niche Lending: Looking for Yield
- An In Depth Look at the Patient Lending Market | John Dwight, Simplee, Rob Seidman, HCS, Camilo Concha, LendingUSA, Howard Michalski, Sortis Holdings Moderator: Mike Sobek, medZero
- Wealth Tech : Uncorrelated Returns from Alternative Assets | Milind Mehere, Yieldstreet
- Understanding Chinese Auto Backed Assets | Richard Yi, Wangjin Financial
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.
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.
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.
(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.
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.
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 Barnes, Principal 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 Reserve Bank of India (RBI) came out with guidelines for peer-to-peer (P2P) lending companies to convert into non-banking finance 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 P2P platforms 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 RBI 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
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:
The post Thursday April 18 2019, Weekly News Digest appeared first on Lending Times.
Thursday February 28 2019, Weekly News Digest
News Comments Today’s main news: SoFi to roll out crypto trading with Coinbase. Walmart now offers Affirm loans. Funding Circle fund ups the ante on buyback strategy. Orca launches IFISA. LendDenClub cross 1 million borrowers, lenders milestone. Today’s main analysis: 2019 securitization update. How marketplace lending is a growing and dynamic global market. (A MUST-READ) Today’s thought-provoking articles: The 2009 […]
The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.
News Comments
- Today’s main news: SoFi to roll out crypto trading with Coinbase. Walmart now offers Affirm loans. Funding Circle fund ups the ante on buyback strategy. Orca launches IFISA. LendDenClub cross 1 million borrowers, lenders milestone.
- Today’s main analysis: 2019 securitization update. How marketplace lending is a growing and dynamic global market. (A MUST-READ)
- Today’s thought-provoking articles: The 2009 housing market compared to today. Personal loan interest rates for February 2019. Why Midwest BankCentre created a separate digital-only bank. Some bankers are worse off than in 2009. Dragon Victory International analysis.
United States
- SoFi to offer crypto trading through Coinbase partnership. This is the most interesting news story of the week. The largest cryptocurrency exchange partnering with one of the largest marketplace lenders to offer cryptocurrency trading will be a huge feather in the cap for both companies.
- Walmart now offers Affirm loans. We saw this one coming. In fact, I wonder why it took so long. Affirm snagging Walmart as a customer will catapult it to PayPal status fast.
- More on Affirm’s, Walmart’s partnership.
- Affirm CEO breaks it down.
- 2019 securitization update, Square charter status. Square is finally seeing some opposition to its banking aspirations. Excellent analysis from PeerIQ.
- The housing market of 2009 compared to today. A LendingTree analysis showing the markets where median home values have increased the most and the least. California is hot. The Mid-Atlantic and Eastern states are not.
- Personal loan interest rates for February 2019. A great breakdown from Nerdwallet.
- Why a small bank launched a separate digital-only branch. I think we’re going to see more of this. As more consumers demand digital banking, and Millennials are all over it, more brick-and-mortar banks will see the opportunity to launch digital-only branches as separate entities. It’s actually a smart move.
- SoFi to offer zero-fee ETFs.
- FTC orders SoFi to stop misleading consumers.
- Figure raises $65 million.
- Gen Xers have the largest auto loan burden.
- Elevate Credit posts earnings results.
- Elevate’s CIO wins award.
- Hunt Real Estate Capital buys RealtyMogul’s loan underwriting program.
- Kabbage says it’s prepared for the coming recession.
- Kabbage named one of the top workplaces among midsize companies in Atlanta.
- CrowdStreet has new self-directed IRA offering.
- Liquid P2P, Interest Radar partner.
- Direct Lending Investments suspends investor withdrawals.
- HSBC partners with Neptune Financial.
- Venmo debuts rainbow-colored card.
- Mastercard says digital identities will be very important in a few years.
- Credit Karma wants to be known for more than free credit scores.
- Brex launches credit card for e-commerce.
- YieldStreet raises $62 million.
- Guaranteed Rate listed as top loan originator.
- Americans focus on debt management more than retirement savings.
- Banking regulator challenging New York on fintech charters.
- Blockchain can be used for P2P lending.
- LoanStreet makes new hires.
- White Oak Business Capital hires new head of markets.
United Kingdom
- Funding Circle fund adds firepower for buyback strategy.
- Orca Innovative Finance ISA launches.
- Experian backs off ClearScore merger.
- NatWest launches account aggregation.
- Open Banking could boom in 2019.
- Wonga reaches from beyond the grave.
- What you need to know about crowdfunding developments.
- Aave launches bill pay platform for crypto.
International
- Some bankers are worse off than in 2009. A look at global IPOs.
- Report on how marketplace lending is still a growing and dynamic market. A must-read from DBRS.
- Enova expands worldwide credit access.
- Blossom Capital gets $85 million from Robinhood, Funding Circle investors.
- How lending can earn your Bitcoin online. I’d like to see a service where small lenders can lend fiat and earn Bitcoin.
Other
- India: LenDenClub crosses 1 million borrower, lender milestone. Congratulations! Excellent achievement.
- Mexico: PayPal to expand small business loans into country with new partnership. PayPal has begun its slow expansion internationally. Could it someday be a global powerhouse?
- China: Analysis of Dragon Victory International. A very interesting look from Seeking Alpha.
- Latin America: ID Finance Latam revenues climb 403%.
- India: Why startups, investors see big potential in lending.
- Ireland: Grid Finance suspends investments below 100,000 euro.
- Brazil: N26 expands into Brazil.
- China: Is the Chinese P2P lending boom over?
- Singapore: Fintech investments rose to $365 million USD in 2018.
- India: UDS ban will benefit P2P lending.
- Australia: How should accountants talk about fintechs?
- Singapore: Validus Capital raises $15 million for SME financing.
- China: BHB raises $20 million using fake bios of founding team.
- Africa: Fintechs inspire with mobile technology.
- China: Futu Securities downsizes U.S. IPO.
News Summary
- United States
- Fintech Startup SoFi to Roll Out Crypto Trading Via Partnership With Coinbase (CoinTelegraph), Rated: AAA
- Millennial online lender SoFi to offer zero-fee ETFs, an unexpected rival for index fund giants Vanguard, iShares (CNBC), Rated: A
- FTC orders SoFi to stop misleading consumers (MPA Mag), Rated: B
- Digital lender founded by ex-SoFi CEO raises $ 65M to fuel expansion (American Banker), Rated: A
- Walmart teams with Affirm to offer point-of-sale loans (American Banker), Rated: AAA
- Affirm’s latest partnership brings its alternative financing to Walmart’s US stores and website (TechCrunch), Rated: A
- Loan app Affirm CEO breaks down new Walmart partnership (CNBC), Rated: A
- ABS Vegas – 2019 Securitization Update; Square Charter Status (PeerIQ), Rated: AAA
- The Housing Market’s 10 Year Challenge — Comparing The Housing Market of 2009 to Today (LendingTree), Rated: AAA
- Gen Xers Carry the Biggest Auto Loan Burden; Study Finds (One World Herald), Rated: A
- Personal Loan Interest Rates for February 2019 (Nerdwallet), Rated: AAA
- Elevate Credit (ELVT) Posts Earnings Results, Meets Expectations (Fairfield Current), Rated: A
- Hunt Real Estate Capital buys RealtyMogul’s proprietary loan underwriting program (Housing Wire), Rated: A
- Elevate’s Joan Kuehl Named Dallas ORBIE CIO of the Year (The Progress), Rated: B
- A Recession Coming? Small Business Lending Platform Kabbage Says It’s Prepared (Forbes), Rated: A
- Here’s more on the AJC Top Workplaces midsize companies (AJC.com), Rated: B
- Diversifying a Self-Directed IRA Made Simple with New Offering from CrowdStreet (The Progress), Rated: A
- Liquid P2P and Interest Radar Announce Strategic Partnership (Liquid P2P), Rated: A
- Direct Lending Investments Suspends Investor Withdrawals (Lend Academy), Rated: A
- Fintech deal will provide access to midsize businesses in U.S. (American Banker), Rated: A
- Venmo debuted a limited-edition rainbow-colored card (Business Insider), Rated: A
- Why digital identities will be so important in the next few years, according to Mastercard’s vice chairman (CNBC), Rated: A
- Credit Karma’s Dana Marineau: ‘We want users to think of us as more than just free credit scores’ (Tearsheet), Rated: A
- Why this small bank created a separate, digital-first brand (American Banker), Rated: AAA
- The Future Is Plastic: Fintech Unicorn Brex Launches New Credit Card For E-Commerce Merchants (Forbes), Rated: A
- YieldStreet raises $ 62M to democratise alternative investments in shipping, real estate and more (TechCrunch), Rated: A
- Guaranteed Rate Leads Mortgage Executive Magazine’s List of Top Loan Originators in America (GlobeNewswire), Rated: A
- Americans Focus On Debt Management But Lose Focus On Retirement Savings (Forbes), Rated: A
- U.S. banking regulator fights NY lawsuit over fintech charters (Reuters), Rated: A
- Blockchain and data protection: the main concerns (JDSupra), Rated: A
- LoanStreet positions for growth with new hires (LoanStreet Email), Rated: B
- White Oak Business Capital Hires Carol Bader Apicella to Expand Northeast and Mid-Atlantic Markets (GlobeNewswire), Rated: B
- United Kingdom
- Funding Circle fund adds firepower for buyback strategy (AltFi), Rated: AAA
- Orca Innovative Finance ISA Launches, Enables Diversified P2P Investment (Crowdfund Insider), Rated: AAA
- Experian, ClearScore scrap merger plans (Reuters), Rated: A
- NatWest launches account aggregation as Open Banking takes hold (AltFi), Rated: A
- Will Open Banking boom in 2019? (AltFi), Rated: A
- Aave Launches Platform to Pay Bills Using Crypto (Finance Magnates), Rated: A
- Investing in crowdfunded development projects – what you need to know (Property Investor Today), Rated: A
- Failed Lender Reaching ‘From Beyond The Grave,’ MPs Warn (Law360), Rated: A
- International
- Some Bankers Are Doing Even Worse Than in 2009 (The Washington Post), Rated: AAA
- Marketplace Lending – A Growing and Dynamic Global Market (DBRS Email), Rated: AAA
- Bank on it: How Enova’s software expands credit access worldwide (Built in Chicago), Rated: A
- Blossom Capital scores $ 85m from Robinhood and Funding Circle backers (AltFi), Rated: A
- Eight Simple Ways to Earn Bitcoin Online Legally (The Crypto Updates), Rated: B
- European Union
- Grid Finance suspends taking investments below € 100,000 (Irish Times), Rated: AAA
- China
- Dragon Victory International: Exposure To The Chinese Crowdfunding Market At A Regulatory-Driven Discount (Seeking Alpha), Rated: AAA
- China Fintech Today: The P2P Boom Is Truly Over (SupChina), Rated: A
- A Crypto Project That Raised $ 20 Million Is Caught Faking Its Founding Team (CoinDesk), Rated: A
- Tencent-backed brokerage firm downsizes US IPO amid weak market demand (Technode), Rated: A
- Australia
- How should accountants talk to clients about fintechs? (In the Black), Rated: A
- India
- LenDenClub crosses 1,00,000 borrowers and lenders milestone (News Barons), Rated: AAA
- Why Do Fintech Startups and Investors See a Huge Potential in Lending? (Entrepreneur), Rated: AAA
- Banning of UDS to benefit P2P Lending Industry (Inventiva), Rated: A
- Asia
- Singapore fintech investments rose two-fold to US$ 365m in 2018 (SBR.com.sg), Rated: AAA
- Validus Capital raises $ 15m for SME financing (Fintech Futures), Rated: A
- Latin America
- PayPal expands its small business loans initiative to Mexico (Leaprate), Rated: AAA
- ID Finance eyes ‘pivotal moment’ for Latam fintech as revenue in region climbs 403% (Fintech Finance), Rated: A
- Challenger bank N26 expands to Brazil (Fintech Futures), Rated: A
- Africa
- How FinTech Companies Inspire Africa With Mobile Technology (PYMNTS), Rated: AAA
United States
Fintech Startup SoFi to Roll Out Crypto Trading Via Partnership With Coinbase (CoinTelegraph), Rated: AAA
Fintech startup SoFi — known for its online lending services — is partnering with major United States-based crypto exchange Coinbase to roll out crypto trading support, according to a CNBC report Feb. 26.
Millennial online lender SoFi to offer zero-fee ETFs, an unexpected rival for index fund giants Vanguard, iShares (CNBC), Rated: A
The race to zero-fee exchange-traded funds has found an unlikely competitor: Online lending and personal finance platform SoFi, which has filed for two index ETFs that will waive management fees for the first year. In making the move to zero-fee ETFs, the online lender is crashing an ETF party dominated by Vanguard and BlackRock‘s iShares.
FTC orders SoFi to stop misleading consumers (MPA Mag), Rated: B
The Federal Trade Commission has ordered online lender SoFi to stop lying about how much borrowers can save by refinancing with the company.
Digital lender founded by ex-SoFi CEO raises $ 65M to fuel expansion (American Banker), Rated: A
The new company founded by Mike Cagney, the former embattled chief executive of Social Finance, plans to announce a $65 million funding round on Wednesday, bolstering firm’s expansion into other financial services, including wealth management.
With the new venture, Cagney is using some of the strategies from his tenure at SoFi — like diversification into areas typically only occupied by traditional banks. However, the new company, Figure, is focusing on different customers, and it’s taking steps to avoid scandals similar to the ones that saw Cagney step down from the SoFi helm.
Walmart teams with Affirm to offer point-of-sale loans (American Banker), Rated: AAA
Walmart will offer its customers point-of-sale loans for the first time — both on its website and in nearly 4,000 U.S. stores — under a partnership with the Silicon Valley lender Affirm.
Under the deal, Walmart shoppers will be able to get Affirm loans of three, six or 12 months to finance purchases ranging from $150 to $2,000. The loans are already being offered in Walmart stores, and they will be available to Walmart’s online shoppers in the coming weeks.
Affirm’s latest partnership brings its alternative financing to Walmart’s US stores and website (TechCrunch), Rated: A
The companies announced this morning that Affirm’s financing options would be made available in more than 4,000 Walmart Supercenters across the U.S., and will roll out to Walmart.com in the weeks ahead.
The offering will go live across Walmart Supercenters nationwide, except in Iowa, West Virginia and Puerto Rico, and will be soon available on Walmart.com.
Loan app Affirm CEO breaks down new Walmart partnership (CNBC), Rated: A
ABS Vegas – 2019 Securitization Update; Square Charter Status (PeerIQ), Rated: AAA
In regulatory news, Square’s ILC charter application has received opposition from 37 community groups. The groups are concerned about Square’s CRA activities and have asked the FDIC to bolster Square’s CRA requirements. Before this letter from community advocates, nearly all of the 15 letters the FDIC received were in favor of Square’s bid. Square is the furthest along the path to getting an ILC charter and its experience will determine whether other FinTechs follow its lead.
Structured Credit Investor magazine explores the challenges facing the maturing marketplace lending sector. Issuers need to distinguish between the borrower experience that they provide and manage liquidity. The article also makes the point that the sector is ripe for consolidation, although we haven’t seen any M&A yet.
2019 Securitization Update
The first two months of 2019 saw 5 securitization deals totaling $1.7 Bn in new issuance. The issuance volume represents a 23% drop over that seen in the first two months of 2018, as the market recovers from the volatility in equity and credit markets seen at the end of 2018. Total securitization issuance now stands at $46.2 Bn, with 147 deals issued to date.
The Housing Market’s 10 Year Challenge — Comparing The Housing Market of 2009 to Today (LendingTree), Rated: AAA
When the real estate bubble burst in late 2008, many Americans saw their home values fall drastically, but a lot has changed in the 10 years since — housing prices have rebounded from their lows during the Great Recession. And though prices are now starting to cool, in many cases, home values have even exceeded their 2006 highs.
On average, median home values have increased by nearly $50,000 across the 50 largest metros in the United States since 2009.
Metros where housing prices have recovered the most since 2009
San Jose, Calif.
Median home value 2009: $638,300
Median home value 2017: $957,700
Median home value change: $319,400
Median unemployment rate change: -6.4%
Median household income change: $32,991
San Francisco
Median home value 2009: $591,600
Median home value 2017: $849,500
Median home value change: $257,900
Median unemployment rate change: -5.4%
Median household income change: $27,889
Los Angeles
Median home value 2009: $463,600
Median home value 2017: $617,100
Median home value change: $153,500
Median unemployment rate change: -5.0%
Median household income change: $11,467
Gen Xers Carry the Biggest Auto Loan Burden; Study Finds (One World Herald), Rated: A
According to the loan comparison website, the median balance of Gen Xers who have auto loans is $18,741 is higher than other age groups. It is 9% more than baby boomers’ $17,185 median balance. This is higher than millennials’ $16,200 and 37 percent more than the lowest median balance of $13,666 held by Gen Z.
Personal Loan Interest Rates for February 2019 (Nerdwallet), Rated: AAA
Personal loan interest rates, whether you’re considering a loan from a bank, credit union or online lender, generally range from about 6% to 36%. The actual rate you receive depends on factors such as your credit score and history, annual income, existing debt and where you get the loan.
Online lenders offer the lowest starting interest rates on personal loans to borrowers with good to excellent credit.
LightStream and Marcus both require a minimum credit score of 660. LightStream accepts joint applications, and one applicant can have a credit score lower than its minimum. SoFi has a slightly higher credit score requirement and requires at least $45,000 in annual income.
Elevate Credit (ELVT) Posts Earnings Results, Meets Expectations (Fairfield Current), Rated: A
Elevate Credit (NYSE:ELVT) announced its quarterly earnings results on Monday, February 11th. The company reported $0.09 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.09, Bloomberg Earnings reports. The business had revenue of $207.29 million for the quarter, compared to the consensus estimate of $212.42 million. Elevate Credit had a return on equity of 15.72% and a net margin of 1.59%. Elevate Credit updated its FY 2019 guidance to $0.55-0.65 EPS.
Hunt Real Estate Capital buys RealtyMogul’s proprietary loan underwriting program (Housing Wire), Rated: A
Hunt Real Estate Capital, which offers financing for all types of commercial real estate, will soon have a new underwriting system to help it originate those loans, as the company is buying a proprietary loan underwriting system from RealtyMogul.
Elevate’s Joan Kuehl Named Dallas ORBIE CIO of the Year (The Progress), Rated: B
Elevate Credit, Inc. (“Elevate”) today announced that Executive Vice President and Chief Information Officer Joan Kuehl has been named the Large Enterprise CIO of the Year by the Dallas ORBIE CIO of the Year Awards. The award honors chief information officers who have demonstrated excellence in technology leadership.
A Recession Coming? Small Business Lending Platform Kabbage Says It’s Prepared (Forbes), Rated: A
The world is bracing for a recession, with the latest data showing in the U.S. expect it to occur by the end of 2021
If those predictions prove true, it will be the first major economic downturn for some of the nation’s leading fintechs. Born out of the ruins of the recession, these startups have enjoyed nearly a decade of success buoyed by strong economic growth, a bull run in the stock market and low unemployment.
Here’s more on the AJC Top Workplaces midsize companies (AJC.com), Rated: B
Kabbage has been named to the list for five consecutive years and this is its first year in the top five. The private financial technology company, founded in 2009, has 489 global employes and 367 at its U.S. headquarters in Atlanta. Flexibility at work and perks, such as a daily catered lunch and snacks, are among reasons employees appreciate working for Kabbage. Wellness benefits include fitness classes, health equipment onsite, biweekly meditation classes, CPR training, an annual flu shot clinic and sponsoring sports clubs. It also fully pays health benefits for individuals and provides annual bonuses and a 401(k) match. Through its sabbatical program, employees of five years can receive six weeks of paid time off and an additional $6,000. In 2018, Kabbage participated in the Atlanta PRIDE parade and also took a stand against gun violence after the mass shooting at Stoneman Douglas High School. Workers in 2019 will build a Habitat for Humanity home as part of its Kabbage Kares program, which also has supported PAWS Atlanta, Easter Seals and the Epilepsy Foundation.
Diversifying a Self-Directed IRA Made Simple with New Offering from CrowdStreet (The Progress), Rated: A
CrowdStreet, an online marketplace for direct equity investment in commercial real estate (CRE), today launched a streamlined, investor-friendly approach to investing qualified retirement account funds into commercial real estate offerings. This new option makes it easier than ever for individuals to access CRE investments with their self-directed IRAs (SDIRA), thus reducing their investment exposure to a volatile stock market and achieving more independence in managing their investments.
Liquid P2P and Interest Radar Announce Strategic Partnership (Liquid P2P), Rated: A
Liquid P2P and Interest Radar are pleased to announce that they have entered into a strategic partnership. The two third-party investing services for online peer-lending giant Lending Club will combine strengths under a single platform to deliver a more comprehensive automated tool with a patent-pending liquidity solution.
Direct Lending Investments Suspends Investor Withdrawals (Lend Academy), Rated: A
Earlier this month Brendan Ross, the CEO of Direct Lending Investments, Inc., sent a letter to investors notifying them that they have suspended withdrawals and redemptions effective February 8, 2019. Lend Academy was able to obtain a copy of this investor letter, dated February 11, that provides some color into what happened. The reason given was the delinquency of a large holding, VOIP Guardian, a telecom receivables factoring company.
Fintech deal will provide access to midsize businesses in U.S. (American Banker), Rated: A
Add HSBC to the list of banks partnering with commercial online lenders.
The bank on Tuesday announced a partnership with Neptune Financial, a San Francisco online lender that focuses on businesses with $10 million to $100 million in assets. The bank estimates that, with the access it will get to Neptune customers, the deal represents a $1.5 trillion opportunity.
Venmo debuted a limited-edition rainbow-colored card (Business Insider), Rated: A
Venmo, the PayPal-owned peer-to-peer (P2P) giant, debuted a limited-edition rainbow-colored version of its physical card product. The card will function the same as regular Venmo cards, allowing customers to pay wherever Mastercard is accepted, split costs and tips, withdraw funds from select ATMs, and manage their Venmo balance, but it will only be available for as long as supplies last, according to Venmo.
Why digital identities will be so important in the next few years, according to Mastercard’s vice chairman (CNBC), Rated: A
The pace with which we are moving toward the internet of things is “very rapid” but we “can’t have the internet of everyone without the inclusion of everyone,” according to the vice chairman of payments giant Mastercard.
“You have to start focusing on how does the human get involved, and that’s going to be through having a digital identity,” Ann Cairns told CNBC’s Karen Tso on Monday at the Mobile World Congress in Barcelona.
Credit Karma’s Dana Marineau: ‘We want users to think of us as more than just free credit scores’ (Tearsheet), Rated: A
Today’s marketer on the hot seat is Dana Marineau, Credit Karma’s vice president of brand, creative and communications. People love Credit Karma for its free credit scores, but the company provides so many other free tools. Dana’s team is tasked with elevating the brand beyond just free credit scores, as a place to get help with financial decisions and achieve financial progress. She brings a 15 year experience at EA, working on many of the top sports games in the business.
Why this small bank created a separate, digital-first brand (American Banker), Rated: AAA
When Midwest BankCentre, a community bank in St. Louis, launched the digital-first Rising Bank in February, it joined the ranks of other financial companies —generally large players such as JPMorgan Chase, Wells Fargo and MUFG Union Bank — that have created separate, digital-only brands. Unlike them, the $1.9 billion-asset Midwest hopes to keep a community bank feel at the internet-only unit.
The Future Is Plastic: Fintech Unicorn Brex Launches New Credit Card For E-Commerce Merchants (Forbes), Rated: A
Brex, a San Francisco credit card startup that reached a valuation of $1.1 billion late last year, 22 months after its founding, is launching its second product, a physical credit card for e-commerce companies. Its first card, targeted to venture-backed tech startups, has attracted more than 3,000 customers by providing higher spending limits and simplifying the application process.
YieldStreet raises $ 62M to democratise alternative investments in shipping, real estate and more (TechCrunch), Rated: A
YieldStreet — which provides a platform for making alternative investments in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that in the past were only open to institutional investors — is today announcing that it has raised $62 million in a Series B round of funding.
Guaranteed Rate Leads Mortgage Executive Magazine’s List of Top Loan Originators in America (GlobeNewswire), Rated: A
For the seventh consecutive year, Guaranteed Rate has the most loan originators of any lender on Mortgage Executive Magazine’s annual list of the “Top 200 Mortgage Originators in America,” including the number one originator.
Guaranteed Rate led the way with 36 originators ranking within Mortgage Executive Magazine’s Top 200, including three of the top five. Shant Banosian of Boston, Mass., was named the nation’s 2018 Top Originator by funding $536 Million in total loan volume.
Americans Focus On Debt Management But Lose Focus On Retirement Savings (Forbes), Rated: A
Our minds are wired to prioritize the near-term over the long-term. We shouldn’t be surprised that a new survey by
U.S. banking regulator fights NY lawsuit over fintech charters (Reuters), Rated: A
The U.S. Office of the Comptroller of the Currency has asked a Manhattan federal court to dismiss a lawsuit by a New York financial regulator over its plan to issue banking charters to fintech companies, saying the lawsuit is premature.
Blockchain and data protection: the main concerns (JDSupra), Rated: A
Blockchain’s usage is no longer limited to digital crypto currencies, as blockchain databases may be deployed in innumerable circumstances and scenarios, including, for instance, within the financial services and insurance sectors for money transfer, peer-to-peer lending and transfer of securities, as well as automatic execution of contracts.
LoanStreet positions for growth with new hires (LoanStreet Email), Rated: B
After the launch of LoanStreet’s commercial lending product and the announcement of their $6.5 million funding round, LoanStreet – the first fully-integrated platform that streamlines the process of sharing, managing, and originating loans – has appointed three credit union industry veterans to support LoanStreet’s aggressive growth.
These new hires include Mike Doherty, Managing Director and Head of Credit Union Sales; Tony Harter, Business Development Director; and Joe Parvin, Business Development Director.
White Oak Business Capital Hires Carol Bader Apicella to Expand Northeast and Mid-Atlantic Markets (GlobeNewswire), Rated: B
White Oak Business Capital, Inc. (“WOBC”), an affiliate of White Oak Global Advisors, LLC, has announced that Carol Apicella has joined the firm as Senior Vice President and Senior Business Development Officer. Apicella will be responsible for expanding the firm’s markets in the Northeast and Mid-Atlantic.
United Kingdom
Funding Circle fund adds firepower for buyback strategy (AltFi), Rated: AAA
The portfolio, an investment trust, of loans originated by Funding Circle lowered its dividend expectations amid lower projected returns last year prompting a discount to its net asset value.
Following a move to a more than 10 per cent discount last year it started share buybacks in a bid to narrow its discount. It has now made additional capital available from its free cash flow to be deployed into share buybacks, the fund said yesterday.
Orca Innovative Finance ISA Launches, Enables Diversified P2P Investment (Crowdfund Insider), Rated: AAA
Orca Money is finally launching its long-anticipated Innovative Finance ISA (IFISA). Orca’s spin on the savings vehicle allows investors to spread their money across multiple peer-to-peer lenders (P2P) thus providing a heightened degree of diversification. Additionally, Orca Money conducts due diligence on behalf of IFISA investors.
Currently, the Orca IFISA allows access to 5 P2P platforms: Lending Works, Assetz Capital, Landbay, Octopus Choice and Lending Crowd.
Experian, ClearScore scrap merger plans (Reuters), Rated: A
Experian Plc, the world’s biggest credit data firm, said on Wednesday that it had agreed with rival ClearScore to abandon their proposed merger, after Britain’s competition watchdog indicated that it may block the deal.
NatWest launches account aggregation as Open Banking takes hold (AltFi), Rated: A
It’s been a long time coming, but Open Banking is finally spreading through the traditional banking industry, this week with the launch of account aggregation for NatWest customers.
The RBS subsidiary becomes the UK’s 4th bank to let customers connect rival current accounts.
Will Open Banking boom in 2019? (AltFi), Rated: A
It has been over a year since the Open Banking UK initiative under the Competition and Markets Authority order and Second Payment Services Directive (PSD2) was launched and has become one of the industry’s biggest technology and regulatory shake ups in recent years. It is no surprise that the initiative’s first year has seen a relatively low consumer uptake. This has been coupled with reports that consumers’ knowledge of the scheme appears to be markedly low.
Aave Launches Platform to Pay Bills Using Crypto (Finance Magnates), Rated: A
In an attempt to bring crypto closer to the mainstream, the London-based fintech startup has announced the launch of Aave Pay.
The app will allow its users to pay their utility bills using digital coins by converting crypto into fiat in real-time using bank transfer facility. The company is claiming that the platform can be used to business expenses as well including employee salaries, income taxes, and other commercial or corporate expenses.
Investing in crowdfunded development projects – what you need to know (Property Investor Today), Rated: A
You can invest in peer to peer development loans for the short term or in an Innovative Finance ISA for a longer commitment period, but with the potential to earn tax free returns.
By comparison, a peer to peer lending platform with its own development company will have much more control over its projects and be able to give you more detailed and trustworthy updates.
Failed Lender Reaching ‘From Beyond The Grave,’ MPs Warn (Law360), Rated: A
Failed payday lender Wonga is damaging the finances of thousands of customers “from beyond the grave” because they cannot seek redress for allegedly missold loans as the company was not covered…
International
Some Bankers Are Doing Even Worse Than in 2009 (The Washington Post), Rated: AAA
It may not feel like it, but some corners of banking are suffering as badly as they did during the depths of the financial crisis. Global volumes of initial public offerings and share placings in January and February have been nearly 60 percent lower than in the same period last year. The numbers are worse than the first two months of 2009. If activity doesn’t pick up soon, it would be worrying evidence of the fragility of investor sentiment.
The hope is that the lull is temporary, and technical. The government shutdown in Washington has gummed up U.S. IPOs. Uncertainty over the U.K.’s future relationship with Europe just drags on. And the December stock-market wobble probably killed off deals that were being planned for the window that traditionally opens between January and the start of the full-year earnings season in late February.
Marketplace Lending – A Growing and Dynamic Global Market (DBRS Email), Rated: AAA
I wanted to share with you a new joint report from our U.S. and European structured finance teams. The new report, attached to this email, analyzes the growth of the marketplace lending market around the globe.
The commentary includes the following topics:
— The evolution in finance, from traditional banking to FinTech.
— FinTech’s influence on marketplace lending around the globe.
— Growth hurdles.
— Securitization considerations.
Bank on it: How Enova’s software expands credit access worldwide (Built in Chicago), Rated: A
Not all credit histories are created equal.
That’s the case for a large part of the world’s population who can’t get access to a loan from a traditional credit provider — like a bank — creating a world in which the hardest working people don’t always get access to the credit they need. Enova, however, believes it has a solution. The fintech company draws on the power of machine learning and data to offer products that expand access to credit for consumers and small businesses.
Blossom Capital scores $ 85m from Robinhood and Funding Circle backers (AltFi), Rated: A
Blossom Capital, which has already backed five startups including rental marketplace Fat Lama, today raised $85m which it will use to lead Series A rounds of between $5m and $10m in Europe.
Eight Simple Ways to Earn Bitcoin Online Legally (The Crypto Updates), Rated: B
Earn Bitcoins as the interest payments: If you have earned some Bitcoins already, you can put the Bitcoins to earn for you. Lend them out at particular interest rate. You can lend the Bitcoins directly to someone known at a greed interest rate and repayment period. You need to assess trustworthiness of borrower. Peer to peer Bitcoin lending is another way to let the earned Bitcoins earn for you. There are many peer-to-peer lending websites where the borrowers post the borrowing requests. Over these websites, you can act as a lender. It is also possible to fund the small portion of numbers of loans to reduce the risk.
European Union
Grid Finance suspends taking investments below € 100,000 (Irish Times), Rated: AAA
One of the largest providers of peer-to-peer loans in the State has shut down a key part of its business aimed at smaller investors, blaming an absence of regulation in the crowdfunding space.
Grid Finance, which is backed by Enterprise Ireland, wrote to holders of its “Brick” accounts – that facilitate the investment of up to €100,000 – in recent days stating that it would withdraw the offering from the marketplace.
China
Dragon Victory International: Exposure To The Chinese Crowdfunding Market At A Regulatory-Driven Discount (Seeking Alpha), Rated: AAA
In recent years as China winds down its industrial and manufacturing powerhouse growth, it’s looking to other developed nations to determine which platforms it should invest in and pave the way to sustained economic growth. As most other major developed nations have done over the past century, financial services and engineering have been a very profitable platform and companies in China are quick to launch their own services to capitalize on the triple-digit growth in online financial services exhibited since 2003.
Similar to Hexindai (HX), which I’ve previously covered as a leading online lender which is capitalizing on the middle class appetite for debt to finance their lives and vacations, Dragon Victory International Limited (LYL) is taking on the crowdfunding segment in the People’s Republic of China. Similar to countless other platforms around the world, the company’s services are around financing new companies and capitalizing entrepreneurs through public funding and they already have over 4.5M users who use their services, a number nearly doubling each year.
China Fintech Today: The P2P Boom Is Truly Over (SupChina), Rated: A
This year, the government has continued to lead a reorganization of the industry:
- More companies will die: As of February 17, only 60 percent of online lending institutions had disclosed their operational information for January 2019, including five problematic platforms.
- However, the current asset quality of the online lending industry has improved significantly according the data from firms that did report.
- As of the end of January 2019, the accumulated amount of the online P2P online loan industry was about 7.78 trillion yuan ($1.16 trillion). The total loan amount in January was 91.4 billion yuan ($13.61 billion), down 55.1 percent year-on-year and down 1.3 percent from the previous month.
- Further consolidation of industry players is certain. Some experts quoted in media reports predict that the scale of future online loans will continue to shrink because of regulation.
- Some listed companies, such as Aoma Electric and Panda Financial Companies, have abandoned their P2P businesses.
- Aoma Electric issued a letter of concern to the Shenzhen Stock Exchange on February 14, attributing the decision to the broader economic slowdown, and a high number of overdue loans.
- Panda Gold Control in 2018 was also dragged down by its P2P business, and expects a net loss of 41.16 million ($6.13 million) to 57.63 million yuan ($8.58 million) in 2018. Faced with the uncertainty of the P2P sector, Panda Gold Control chose to divest.
Australia
How should accountants talk to clients about fintechs? (In the Black), Rated: A
Like the ombudsman’s office, ASIC has also made information available to educate consumers and advisers, including on its MoneySmart Borrowing Basics and Peer-to-Peer Lending sites.
Is any flexibility possible, Shiel wonders, with a peer-to-peer lending model in which the borrower likely doesn’t know who is providing the funds?
India
LenDenClub crosses 1,00,000 borrowers and lenders milestone (News Barons), Rated: AAA
LenDenClub, one of India’s fastest growing peer-to-peer (P2P) lending platforms, recently crossed an important landmark with more than 1,00,000 borrowers and lenders on its platform. The breakdown of borrowers to lenders is 83,300 and 16700, respectively. The company crossed this milestone by keeping up with latest market trends, and saw an increase in the use of its product InstaMoney, which was launched in June 2018.
Why Do Fintech Startups and Investors See a Huge Potential in Lending? (Entrepreneur), Rated: AAA
Today, thanks to the ongoing digitization, borrowing has become as easy as it can get in India. For contrast, all it takes now is the touch of a few buttons, answers to a few verification-related questions, and anyone can receive a loan in a matter of hours or days, if not minutes. And all of this is without any collateral and while enjoying the comfort of your home. Now, compare this with taking a day off to go to the bank, doing extensive paperwork, visiting frequently to check the progress of your loan application, and ultimately, getting your application rejected because of the loan officer’s misjudgement. All while wasting two months of time in the constant to and fro and taking multiple days off from your office.
It is beyond doubt that the advent of fintech startups has altered the game of lending in India. It has become both simpler and convenient to borrow using their revolutionary approaches driven by state-of-the-art technologies. Currently, more than 1,500 fintech startups (of all shapes and sizes) are catering to the Indian market, and more than half of these startups have been launched over the last 3 years. This gives us a clear picture of how lucrative the sector is becoming for our startup ecosystem. But what is essentially fuelling this trend? Let’s find out.
Banning of UDS to benefit P2P Lending Industry (Inventiva), Rated: A
The latest ordinance of the Banning of Unregulated Deposits (UDS) 2019, was passed by the government to provide a comprehensive mechanism to ban UDS as well as to protect the interest of depositors. This is in line with the Reserve Bank of India’s guidelines on the NBFC-P2P sector, issued in October 2017 to regulate the unorganized lending business in the country.
Asia
Singapore fintech investments rose two-fold to US$ 365m in 2018 (SBR.com.sg), Rated: AAA
US$102.2m of the total funds raised went to lending fintech companies such as the homegrown Funding Societies.
Fintech investments in Singapore more than doubled to US$365m in 2018 from US$180m in 2017, putting the country amongst the top five fintech markets by funds raised last year in Asia Pacific, behind China, India, Australia and Japan, according to Accenture’s analysis of CB Insights data. The number of deals in the country rose to 71 from 61 in 2017, making it the third busiest market in the region, behind only China and India.
Validus Capital raises $ 15m for SME financing (Fintech Futures), Rated: A
Validus Capital, a Singapore-based SME financing platform, has raised SGD 20.5 million ($15.2 million) in a Series B funding round, led by FMO, a Dutch public-private development bank.
Latin America
PayPal expands its small business loans initiative to Mexico (Leaprate), Rated: AAA
Online payment giant PayPal launched its Working Capital initiative in 2013 as an alternative method for business to access working capital much faster than through traditional means. Many small and medium-sized business (SMB) clients embraced the program and since then the company has advanced more than $6 billion in loans to over 170,000 businesses in the UK, US, Germany and Australia.
PayPal also recently revealed that it has partnered with Konfio, a Mexican online lender that utilizes unconventional data sources to facilitate fast credit assessments, in a deal that will allow PayPal to extend its Business loan and working capital programs to Mexican businesses.
ID Finance eyes ‘pivotal moment’ for Latam fintech as revenue in region climbs 403% (Fintech Finance), Rated: A
ID Finance, the fintech company operating in Europe and Latin America, saw revenue of $49m in 2018. This represents growth of 236% for the business, which was formally separated from its operations in Russia and CIS region last year.
The company is enjoying particularly strong growth in Latam, one of the world’s fastest growing markets for fintech adoption thanks to high mobile penetration and a sizeable underbanked population – according to the World Bank 61% of Mexico’s population is excluded from the traditional banking system, while 40% of Brazil’s 207m population are blacklisted. The company now has 141 employees in Latam and saw revenue growth of 403% in the region last year.
Challenger bank N26 expands to Brazil (Fintech Futures), Rated: A
Germany-based mobile challenger bank N26 is powering on yet again as it has revealed its plans to expand to Brazil.
Africa
How FinTech Companies Inspire Africa With Mobile Technology (PYMNTS), Rated: AAA
With the potential for rapid growth and job creation, FinTech firms in Africa have caught the attention of global investors. According to the London Stock Exchange Group’s 2019 “Companies to Inspire Africa” report, which highlights these firms, the FinTech sector has the second highest growth rate representation of technology and telecoms as well as financial services. As it stands, companies in this space represent more than a quarter of 360 featured firms from 32 different countries. Pan-African payments firm Cellulant is among the companies that appeared in the first and second editions of the report.
Authors:
The post Thursday February 28 2019, Weekly News Digest appeared first on Lending Times.
What Happened at the Money 20/20 2018 Conference in Las Vegas?
Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half […]
Its a good thing that everything that happens in Vegas doesn’t stay in Vegas, which is where the Seventh Annual Money20/20 Conference took place on October 19-21, 2018. With the goal to “fearlessly take on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole,” the three-and-a-half day event included more than 500 speakers and 15 agenda themes.
Themes included :
- Payments and Platforms
- Banking and Personal Finance
- AI and Deep Learning
- Cybersecurity and Fraud
- Alt Lending and Credit
- Blockchain and Crypto
- Digital Identity and Biometrics
- And much more
While this is going to serve as a brief overview of the Conference, some of the notables who spoke, and bigger announcements, there will be special interest on Alternative lending and credit. We’ll also look at the all-important payments race.
A lot of the coverage is available on YouTube where Money20/20 has its own channel, so, if you missed the conference, you still have free access to some of the information.
Day One
Apple Co-founder Steve Wozniak is always a good bet to help you get a financial conference rolling. The business legend’s assurances that the claims that artificial intelligence (AI) and robotics, along with other forms of technology, are going to cut into human productivity are unwarranted helped to establish an ongoing theme that tech is necessary for the broader inclusiveness of our collective financial future.
Jennifer Bailey, VP Internet Services for Apple Pay, detailed some of the expansions of the new iPhone X, which include face ID security.
Other notable speakers from the first day of the conference included John Collison of Stripe, Michael Mebach, CPO of Mastercard (who spoke on how to build a seven-trillion-dollar middle class), Anand Sanwal of CB Insights, and Bill Ready of PayPal.
Day Two
Day Two’s lineup of speakers was headed by none other than Virgin’s own Richard Branson, who told a remarkable story about how he created Virgin by renting a plane and selling seats to the other passengers scheduled to be on the American Airlines flight that was delayed. Sallie Krawcheck, Ellevest’s CEO and co-founder, had some valuable remarks on diversity, and Vanessa Colella, head of Citi Ventures and CIO of CitiGroup, shared some keen insights on partnerships.
Possibly the speaker from the conferences second day who made the biggest impression was Nikolay Storonsky, CEO of Revolut. The way money is moved is changing rapidly, but if Storonsky is correct in his predictions, it may change even faster. He predicts that in 10 years, two or three large fintech players will take 95 percent of banks’ business marking an industry overhaul akin to how Amazon bypassed the retail industry and Uber took on taxis.
Day Three
Patrick Gauthier, VP of Amazon Pay, spoke to Tracey Davies’s central theme when he talked about the use of technology to make things simpler and more natural between the merchant and the consumer. Harley Finkelstein, CEO of Shopify, pointed out that middlemen will not be totally going away in the financial realm of the future, but they will have to “provide a disproportionate amount of value for their profit margin in the future.”
Other notable speakers included Asiff Hijri, president and COO of Coinbase, who framed the crypto world well when he spoke of the two base use cases of the space, the store of value of bitcoin and the ability to build apps on top of Ethereum, while noting that we’re still looking for that breakthrough app. His quote “Fintech before crypto, and the promise of a stablecoin…is like mobile before the iPhone came along” might be one of those “remember when” moments.
NBA legend Shaquille O’Neal also spoke on the third day of the conference. Now an advisor and advocate of Steady, the platform which helps Americans find work, says his partnership with these efforts is driven by recollections of a past where the only investments that paid off were those he embarked on in order to help others.
Day Four
Much of what happened on Day Four is listed below, including the Uber/Barclays and the Grab/Mastercard partnerships, but the day also had some other mentionable happenings.
Marisol Menendez, head of open innovation for BBVA, introduced the overall winner of the 10th annual BBVA Open Talent competition, the reward going to Sedicii; founder Rob Leslie accepted the award. Sedicii provides a service that identifies data between two organizations without exposing the underlying data.
Also, adding some hope for the financial sector in general, Ripple’s Co-Founder and Executive Chairman Chris Larson stated that he thinks digital assets can help guard against another financial crisis by solving some of the key problems of global liquidity. He also predicts that a fluid digital asset (he thinks it will be XRP, of course) will make more fluid the trillions of dollars that are tied up due to the “clunkiness” of current systems.
Focus on Alternative Lending and Credit Cards
As instant payments and expanded remittance options gain more prominence in the world of payments and commerce, an app designed to speed up the remittance process, designed via Visa APIs, took top honors at the conference.
American Express and Amazon announced a partnership, which will produce a no-annual-fee business card. Cardholders (Amazon Prime members) will get to choose if they want to receive five percent rewards on any Amazon purchase (Whole Foods included) or 90-day payment terms, a reward that might benefit small businesses with cash flow issues.
Goldman Sachs’s Marcus Platform announced a new wealth management offering designed to make the financial market more inclusive for average Americans. The offering will focus on online savings accounts and personal lending, the end game being to educate customers on some of the ins and outs of the financial sector.
Grab Financial and M and A Mastercard announced a partnership that will make prepaid cards available to underbanked and underserved customers in Southeast Asia in order to bring them into the financial realm and allow them to conduct business globally.
Gregory Wright, CPO and SVP of Experian, touched on a common theme from the conference, that of businesses going forward by putting consumers first. He reinforced the platform’s focus on putting the consumer at the center of the lending decision by giving the consumer more control over his or her data to allow them to make a more informed lending decision. The goal is for lenders to make better decisions at lower risk while giving more consumers access to credit.
David Richter, global head of business and corporate development for Uber, joined with Curt Hess, CEO of BarclayCard US, to announce the unveiling of the Uber Visa card. A native app specifically designed for the Uber platform, the app will make it more engaging and enjoyable for Uber riders and Uber eaters to experience the platform. The card will also offer real-time notifications of rewards and balances, rather than customers having to wait a month for a statement as credit cards traditionally do.
Other Noteworthy Announcements
- ViSync took the grand prize in the conference’s hackathon challenge. According to a Visa spokesperson, their entry, an app designed to help send remittance payments overseas, should make it easier for migrant workers to send money back to their home countries.
- FICO announced an “Ultra” FICO rating. The new device will consider how people manage their checking accounts and will incorporate things like overdraft history to determine credit scores. The goal is to help younger people and others with little or no credit and people who are rebuilding their credit after a couple of setbacks.
- Tracey Davies, president of Money20/20, also announced the Rise Up! program, the pilot of which took place at this event. Rise Up! seeks to increase inclusion into the financial sector on all levels. This pilot program, which will expand to other demographics in the future, focused on gender (women make up 50 percent of the population, but only 20 percent of leadership roles in the financial sector.). Of the 300 women who applied to the program, only 35 were selected. Those who were selected were privy to special seminars and one-on-one access to various leaders from the financial space.
The Payments Race
Knowing how we build points of sale, I wonder if the organizers of the original event knew just how apropos the payments race would be to the overall message of the Money20/20 events. Whether they did or not, the event serves to draw a good picture of how we use and interact with different forms of currency in our daily lives.
Closely resembling the scavenger hunt of the television series The Amazing Race, five participants were given six days to make it to Las Vegas for the opening day of the convention. They drew to see which host city will host most of their scavenging, and then they all have to make it to their city and then to Vegas. Along the way, they got points for things like the number of states they visited and the different modes of transportation they use.
The catch is this: Each participant was only allowed to use one form of payment; the options were
- Team Checks
- Team Cash
- Team Credit Cards
- Team Devices (Apple Pay and such)
- Team Crypto
The episodes—all of which can be seen on YouTube—show the obstacles in trying to perform these tasks with only the given form of payment.
As you can imagine, Team Checks had a hard time of it, and they had to rely on the goodness of many others to navigate their journey. Team Cash didn’t face as many obstacles, but travel required some finagling as they got deeper into the trip. Team Crypto had some transportation issues early on, but also relied on the kindness of others to make the necessary accommodations.
Team Credit seemed to have the most ease traveling—they just rented an RV and drove—and the representative from Team Devices said after it was all over that using only devices proved to be easier than she thought it was going to be; she did have to go to some pretty significant lengths to rent a car.
In all, the little series of videos showed the importance of various forms of payment and that we still haven’t gotten to the point where we can survive conveniently on one single form of payment; still, everything from the conference seems to speak to the reality that we’ll get there.
And how did the race turn out? Well, I haven’t seen an actual crowning, but Team Crypto was the first to get to the Las Vegas sign, which was basically the finish line—I haven’t seen anything that mentioned how each fared at the number of states visited or modes of transportation used. If Team Crypto did prove the winner, it was their second straight title.
The event will return to Vegas next year, the dates being October 27-30, 2019.
Author:
Written by Paul Keenan.
Wednesday June 27 2018 Daily News Digest
News Comments Today’s main news: Consumer debt surpasses mortgage debt. Funding Circle, INTRUST Bank expand partnership. Revolut offers app store for business banking. VPC Specialty Lending hits record monthly returns. Today’s main analysis: Amazon’s big push into lending, and beyond. Today’s thought-provoking articles: The past and future of banking. Should income investors consider P2P lending? Banks can’t partner themselves into […]
News Comments
- Today’s main news: Consumer debt surpasses mortgage debt. Funding Circle, INTRUST Bank expand partnership. Revolut offers app store for business banking. VPC Specialty Lending hits record monthly returns.
- Today’s main analysis: Amazon’s big push into lending, and beyond.
- Today’s thought-provoking articles: The past and future of banking. Should income investors consider P2P lending? Banks can’t partner themselves into digital relevancy.
United States
- Consumer debt surpasses mortgage debt. This is an interesting trend, and as companies like Affirm and Klarna grow an interest in instant financing, I see trend continuing.
- Funding Circle, INTRUST Bank expand partnership. This makes me wonder if Funding Circle’s long-term strategy is to expand these types of partnerships nationally, and if they do, will they take INTRUST with them or partner with other regional banks?
- Amazon’s push into lending, and beyond. As it stands now, I don’t see Amazon competing with most online lenders. Their niche is lending to small businesses that sell on the Amazon platform. Of course, that could change at any time.
- The past and future of banking. This is something every alternative lender should consider. How much of the P2P lending pie will banks ultimately have, and are we willing to give up any of our portion?
- Banks can’t partner themselves into digital relevancy. Do they have a choice?
- Marcus is not adding credit cards any time soon.
- Finn’s challenges.
- Sharestates launches new loan programs.
- Venmo launches a debit-card with MasterCard.
- PayPal acquires Simility.
- P2Binvestor raises $17 million.
- CrowdOut Capital surpasses $100 million in loans to middle market companies.
- Interview with James Gutierrez of Insikt. Lend Academy podcast.
- StraightUp merges with Slice.
- Fair Financial to go national.
- Most Americans will not pay for summer vacation with a loan.
- Depository Network offers decentralized network for P2P lenders.
- Invoice factoring edges out short-term borrowing competition.
- Wells Fargo revamps premium credit card.
- AFR expands technology offering.
- House passes telecom, utility payments bill.
United Kingdom
- Revolut offers app store for business banking.
- VPC Specialty Lending sees monthly returns record. Congratulations.
- Should income investors consider P2p lending?
- Brokers frustrated with lenders changing their minds.
- Robo-advice acceptance on the rise.
- A guide to liquid IFISAs.
International
- Global Debt Registry launches decentralized ledger for the loan market.
- Mobilum partners with EthicHub.
Other
- China: Hui Ying lowers IPO deal size to $32 million.
- Europe: Raisin, Banco BNI Europa deepen partnership.
- Australia: Mortgage Choice partners with RateSetter.
- Australia: ING distribution head joins RateSetter.
- India: Faircent transactions go through escrow.
- Canada: Finastra to sell Collateral Management Corporation to Teranet.
News Summary
- United States
- Consumer Debt Now Surpasses Mortgage Debt (Investopedia) Rated: AAA
- INTRUST Bank and Funding Circle expand partnership (PR Newswire) Rated: AAA
- Amazon and Their Push Into Fintech (Lend Academy) Rated: AAA
- The Banking Industry: Past and Future (The Motley Fool) Rated: AAA
- Marcus Is Not Adding Credit Cards Products … Yet (Bank Innovation) Rated: A
- The challenges for a new ‘bank’ with a famous parent (American Banker) Rated: A
- Sharestates Launches New Loan Programs (PR Newswire) Rated: A
- Venmo officially launches its own MasterCard-branded debit card (TechCrunch) Rated: A
- PayPal gets anti-fraud ability with $ 120m acquisition of Simility (Fintech Futures) Rated: A
- Crowd lending fintech raises more than $ 17M (American Banker) Rated: A
- CrowdOut Capital Surpasses $ 100 Million in Loans to Middle Market Companies to Fuel Growth (Business Wire) Rated: A
- James Gutierrez of Insikt (Lend Academy) Rated: A
- Banks can’t partner themselves into digital relevancy (American Banker) Rated: AAA
- StraightUp Announces Merger With Slice (PR Newswire) Rated: A
- Mobile app for underbanked looks to go national (American Banker) Rated: A
- Majority of Americans Won’t Use a Credit Card to Pay for This Summer’s Vacation (Herald Courier) Rated: A
- House passes bill allowing telecom, utility payments in credit scores (American Banker) Rated: B
- Depositing the Future (NullTX) Rated: A
- Invoice Factoring Edges Out Competition Among Short-Term Borrowing Options (PR Newswire) Rated: A
- AFR Announces Expanded Technology Offering (AFR Wholesale) Rated: B
- Wells Fargo revamps premium card to compete on rewards (Payments Source) Rated: B
- United Kingdom
- Revolut Now Offers an App Store for Business Banking (Crowdfund Insider) Rated: AAA
- VPC Specialty Lending sees record monthly returns (AltFi News) Rated: AAA
- Should Income Investors Consider P2P Lending? (Morningstar) Rated: AAA
- Majority of brokers’ biggest frustration is lenders changing their mind on a deal (Mortgage Introducer) Rated: A
- Acceptance of robo advice on the rise (Financial Reporter) Rated: A
- A guide to liquid IFISAs (Peer2Peer Finance) Rated: A
- China
- Chinese online lending platform Hui Ying Financial lowers US IPO deal size to $ 32 million (Nasdaq) Rated: AAA
- European Union
- Raisin and Banco BNI Europa Deepen Collaboration (Crowdfund Insider) Rated: AAA
- International
- Global Debt Registry Launches Decentralized Ledger for the Loan Market (Payment Week), Rated: A
- Mobilum Crypto Payment Processor Partners With EthicHub Crowdlending Platform (Bitcoin Exchange) Rated: B
- Australia
- Mortgage Choice partners with P2P lender (The Adviser) Rated: AAA
- ING distribution boss joins RateSetter (Independent Financial Adviser) Rated: B
- India
- All Financial Transactions on Faircent Conducted through Escrow Account (BW CI World) Rated: AAA
- Canada
- Finastra to sell Canadian-based Collateral Management Corporation business to Teranet (Finastra) Rated: AAA
United States
Consumer Debt Now Surpasses Mortgage Debt (Investopedia) Rated: AAA
Mortgages may represent the largest debt for households, but as a percentage of disposable income, home loans are comprising less of a liability, LendingTree found.
In a research report, the online lender, which analyzed data from the Federal Reserve, said that mortgage-related household debt has declined 5.5%, while consumer credit, which includes revolving credit and installment loans, jumped 45%. Of that, 42% was student loan debt. What’s more, LendingTree found that American household debt is on track to hit $1 trillion above the 2008 peak by the end of June. The debt figure has been increasing at a 3.4% annual rate and includes mortgage debt.
By the end of the second quarter, LendingTree is forecasting total mortgage and consumer debt to reach $15.7 trillion compared with $14.7 trillion 10 years ago.
INTRUST Bank and Funding Circle expand partnership (PR Newswire) Rated: AAA
Funding Circle, the small business loans platform, and INTRUST Bank, a leading US regional bank headquartered in Kansas, today announced the next phase of their strategic partnership to support the growth of US small businesses. Following the successful launch of this partnership earlier this year, the second phase increases INTRUST’s funding commitment and kicks off a targeted, co-branded marketing campaign, giving business owners across Kansas, Missouri, Oklahoma, and Arkansas greater access to fast and flexible financing.
To date, over 150 American small businesses have received loans backed by INTRUST through the Funding Circle platform. The upsized commitment is anticipated to increase this number above 500.
Amazon and Their Push Into Fintech (Lend Academy) Rated: AAA
Last week CB Insights released this really interesting report titled, Everything You Need To Know About What Amazon Is Doing in Financial Services.
The report provides an in depth look at the moves Amazon has made in payments, lending, the new Amazon Cash program and also takes a look at how the company has been developing fintech programs internationally.
By the simple addition of a debit card, Amazon could move the unbanked into a quasi bank account that could be used at places beyond Amazon.
They have had a small business lending operation since 2011 and much fanfare was made about the $3 billion they have loaned through June 2017. But that doesn’t even put them in the top three online small business lenders in that time period. OnDeck, Kabbage and CAN Capital all loaned more.
To be fair Amazon is not trying to be a general purpose lender. Their SMB lending operation is targeted solely at Amazon marketplace sellers as a way to help them grow their business so they will sell more products on Amazon. It is not clear they have a desire to do more than that.
The Banking Industry: Past and Future (The Motley Fool) Rated: AAA
INDUSTRY FOCUS // Financials // 06-25-2018
One of the big things that’s happened over the past 25 years is that the big banks have gotten bigger. We now have what are known as the Big Four banks in the U.S. — Citigroup, Bank of America, Wells Fargo and JPMorgan Chase. All of those have grown substantially through acquisitions, not just from the financial crisis, which saw a lot of consolidation, but beforehand. Actually, three of the four were actually acquired themselves, and the acquiring companies just decided to keep the names because they were more recognizable.
Douglass: I believe that peer-to-peer lending will represent at least 25% of total lending spent in 25 years. Now, I only say 25%. For me, it’s very clear that peer-to-peer lending has become a lot more widespread and a lot more feasible than it was previously. I do expect the peer-to-peer lenders — or a bank, perhaps, who hops in — to help solve for one of the current difficulties, which essentially is poor underwriting by some of the peer-to-peer facilitators right now, meaning that the investors who are putting the money in aren’t making the kind of money that they’d hoped to — I believe those will ultimately be solved.
But, I only say 25% because banks have legitimately trillions of dollars to lend, and they will absolutely be looking for ways to deploy that capital effectively. So, I would expect that they will be helping facilitate a lot of these peer-to-peer loans. I believe they will be, in some cases, investing alongside. I think they will often invest in alone, and perhaps then sell it to peer-to-peer lenders for an arbitrage so that they can do it all again, sort of like you see with agency-backed mortgages.
Marcus Is Not Adding Credit Cards Products … Yet (Bank Innovation) Rated: A
The challenges for a new ‘bank’ with a famous parent (American Banker) Rated: A
When JPMorgan Chase set out to make its digital-only brand Finn, it quickly rejected the idea of using it to lure millennial customers over to the institutional side of the bank.
Finn has also found that for the 27 states where JPMorgan Chase is part of a shared ATM network but has no ATMs or branches of its own, customers have difficulty depositing cash. While those same customers can still withdraw cash and often don’t carry money with them, customers that work for tips have a hard time keeping Finn as their main banking account.
Sharestates Launches New Loan Programs (PR Newswire) Rated: A
Sharestates announced the launch of a Long-Term Portfolio Loan Program to facilitate the needs of borrowers throughout the life cycle of their real estate projects.
Some highlights of the Long-Term Portfolio Loan Program include 30 and 40-year mortgage terms, interest rates ranging from 5.99 to 7.5%, loans with a 10-year interest only period, followed by 20 or 30 years of amortization, as well as the ability to cover three or more properties under a single loan.
Venmo officially launches its own MasterCard-branded debit card (TechCrunch) Rated: A
Venmo today is officially introducing its own debit card in partnership with MasterCard, following beta tests of a Visa-branded debit card last year. The new card will allow Venmo users to pay anywhere MasterCard is accepted in the U.S., and will record transactions to the user’s Venmo account for easy splitting with friends. It can also be used at an ATM to withdraw funds from the Venmo’s account’s balance.
Unlike the beta version of the card, the MasterCard-branded Venmo card can be used to withdraw up to $400 per day at ATMs displaying the MasterCard, Cirrus, PULSE, or MoneyPass acceptance marks. No fees apply for U.S. MoneyPass ATMs, while the others will charge a $2.50 ATM domestic withdrawal fee.
There are no fees for using the card for purchases, even if you get cash back at the point of sale. However, if a signature is required to get cash back at a bank, you’ll pay a $3.00 Over the Counter Domestic Withdrawal Fee, the company says.
PayPal gets anti-fraud ability with $ 120m acquisition of Simility (Fintech Futures) Rated: A
Following on from its $400 million purchase of Hyperwallet on 20 June, it has now acquired fraud prevention and risk management platform Simility for $120 million.
Following the close of the deal, merchants on the PayPal platform will gain access to fraud tools that can be customised through their existing account management dashboard.
Crowd lending fintech raises more than $ 17M (American Banker) Rated: A
The crowd lending startup P2Binvestor has secured more than $17 million in funding from more than 20 participants to expand its bank partnership program, the company announced Thursday.
CrowdOut Capital Surpasses $ 100 Million in Loans to Middle Market Companies to Fuel Growth (Business Wire) Rated: A
CrowdOut Capital, the first tech-enabled online marketplace to fund corporate loans for middle market companies, announced it funded more than $112 million in loans in less than two years. Accredited investors choose from the company’s vetted loan offerings on a deal-by-deal basis.
CrowdOut funds loans as small as $3 million to companies with annual revenues between $10 – $500 million to fuel growth.
James Gutierrez of Insikt (Lend Academy) Rated: A
My next guest on the Lend Academy Podcast has spent his career doing just that. James Gutierrez is the CEO and Founder of Insikt. Since I last had James on the show a lot has changed but their mission is still to improve the financial health of the underserved consumer.
Banks can’t partner themselves into digital relevancy (American Banker) Rated: AAA
For banks, these partnerships won’t generate the quantum leap they need to move beyond a decades-old, product-centric mentality to deliver next-generation financial services that consumers deserve. At best, financial institutions may gain a workable solution that squats awkwardly in the existing infrastructure and brand. At worst, after a lot of time and effort — and increasing their infrastructure costs — banks will fail to deliver any noticeable difference to customers beyond a flurry of press releases.
StraightUp Announces Merger With Slice (PR Newswire) Rated: A
StraightUp, an innovative real estate-focused platform giving investors access to previously unavailable development opportunities, announced today a merger with Slice, the first blockchain-based REIT for investors around the world.
StraightUp was designed to democratize access to previously unattainable high-potential investment opportunities in New York City. As a result of merging with Slice, the new and improved platform will give international investors access to premium equity opportunities in desirable cities across the country, including New York City, Los Angeles and San Francisco.
Mobile app for underbanked looks to go national (American Banker) Rated: A
You could easily mistake Anne Leland Clark, a Twin Cities nonprofit executive, for a banker with with big, national ambitions as she discusses her organization’s digital platform for the underbanked.
The product, known as Fair Financial, launched in a pilot program this week to serve about 500 local customers over the next 18 months.
Majority of Americans Won’t Use a Credit Card to Pay for This Summer’s Vacation (Herald Courier) Rated: A
The survey of over 1,000 U.S. respondents, conducted by Affirm, found that Americans typically take their biggest vacations of the year over the summer, and cost is a major factor when planning travel.
55 percent of Americans said it’s very important to have the cost of the vacation paid off before going. The cost of a trip can linger even after the vacation is over: 32 percent of people said they regretted taking a vacation altogether.
House passes bill allowing telecom, utility payments in credit scores (American Banker) Rated: B
The legislation, authored by Rep. Keith Ellison, D-Minn., is aimed at helping consumers, those in particularly lower-income and minority households, build their credit histories.
Under the bill, information about a consumer’s utility or telecommunications service may be reported only to the extent that the information relates to payment by the consumer for such service.
Depositing the Future (NullTX) Rated: A
What differentiates Depository Network from both of those companies/platforms is the fact that Depository Network is actually not a lending platform. Rather, it is a depository infrastructure that other P2P lending platforms, banks and credit institutions can utilize. Depository Network is the world’s first fully decentralized multi-platform collateral network that connects traditional lending and blockchain technology.
Invoice Factoring Edges Out Competition Among Short-Term Borrowing Options (PR Newswire) Rated: A
When a business needs to raise capital, the more short-term the borrowing options, the better. For every option, though, business owners must weigh the increased cash flow against the trade-off. Interstate Capital looked at a breakdown of options – from bank loans to savings – invoice factoring comes out on top.
AFR Announces Expanded Technology Offering (AFR Wholesale) Rated: B
American Financial Resources, Inc. (AFR) announces that it has completed a pilot and will now be providing its broker network with notification when a house for which AFR owns the servicing is listed for sale. This will enable AFR’s broker partners an opportunity to reconnect with the homeowner and, ideally, assist with their next mortgage, on both the relisted property as well as the borrower’s next home.
Wells Fargo revamps premium card to compete on rewards (Payments Source) Rated: B
Two years after JPMorgan Chase & Co. launched an arms race in credit-card rewards with its Sapphire Reserve card, Wells Fargo will now offer three points per dollar spent on dining, travel and streaming services such as Netflix on its Propel card. Other purchases will earn one point per dollar, and points are redeemable at one cent per point.
United Kingdom
Revolut Now Offers an App Store for Business Banking (Crowdfund Insider) Rated: AAA
Revolut, a digital only bank that says it is signing up over 120 businesses per day, has launched a new services for their business customers – Revolut Connect. This new feature is described as an “App store” for businesses to help provide easier access to digital tools.
With more than 60,000 businesses uses their bank now, Revolut Connect is designed to help firms easily connect and build integrations for the most popular business apps, including accounting platforms like FreeAgent, communication tools like Slack, Apps to help with tax, payroll, expense management and more. Revolut adds that many more popular Apps are in the queue. Revolut wants to create a one stop mobile experience where businesses may manage all of their financial needs in a single mobile friendly application.
VPC Specialty Lending sees record monthly returns (AltFi News) Rated: AAA
The £289m VPC Specialty Lending investment trust has recorded its highest monthly return to date for May 2018, according to stock market filings.
Its net asset value [NAV] total return for the month of May, the latest numbers released by VPC, was 1.03 per cent for the month. Returns comprised 0.94 per cent of income gains and 0.09 per cent of capital gains.
Should Income Investors Consider P2P Lending? (Morningstar) Rated: AAA
Peer-to-peer investment trusts now have around £1 billion of assets under management between them, but the jury is still out on whether or not they are worth backing.
P2P trusts launched four years ago as direct peer-to-peer lenders including Zopa and Funding Circle were fast gaining traction. The trusts promised exposure to hundreds, or even thousands, of different peer-to-peer loans, in return for a juicy dividend yield.
Majority of brokers’ biggest frustration is lenders changing their mind on a deal (Mortgage Introducer) Rated: A
Over half (56%) of brokers said the lenders changing their mind on a deal frustrates them the most about the specialist finance market, LendInvest found from surveying brokers at the NACFB Commercial Finance Expo in Birmingham.
A quarter (24%) identified the lack of good service as their main frustration. Rates not being good enough was an issue for 14% of those surveyed, while only 6% of those surveyed cited lack of choice as their biggest frustration.
Acceptance of robo advice on the rise (Financial Reporter) Rated: A
According to a recent poll carried out at the Intelliflo Change the Game conferences held in Manchester and London, robo-advice is now regarded as less of a threat to business for advisers than it has been in recent years.
Last year, both options gained equal top share in the poll (37% each of 315 respondents), while this year,’ robo-advice’ dropped to 25.5% (419 respondents), with ‘large product providers going direct’ down slightly but still the top concern at 32.5%.
A guide to liquid IFISAs (Peer2Peer Finance) Rated: A
But the rising popularity of the secondary market and ‘instant access’ accounts have created enhanced liquidity for P2P investors. On an array of platforms, lenders can sign up for long-term loans before selling their stake to others, while some of the bigger platforms allow free or low-fee withdrawals.
We’ve put together a guide to all the platforms offering IFISAs with extra liquidity…
- Ablrate
- Abundance
- Assetz Capital
- CapitalRise
- Crowd2Fund
- Folk2Folk
- Funding Circle
- FundingSecure
- HNW Lending
- JustUs
- Landbay
- LandlordInvest
- LendingCrowd
- Lending Works
China
Chinese online lending platform Hui Ying Financial lowers US IPO deal size to $ 32 million (Nasdaq) Rated: AAA
Hui Ying Financial Holdings, which operates an online peer-to-peer lending platform in China, lowered the proposed deal size for its upcoming IPO on Tuesday.
The Shanghai, China-based company now plans to raise $32 million by offering 5.6 million shares at a price of $5.85. The company had previously filed to offer 6.8 million shares at the same price. Hui Ying Financial Holdings will raise -19% less in proceeds than previously anticipated and command a market value of $436 million. Shares are currently listed on the OTCQB under the symbol SFHD.
European Union
Raisin and Banco BNI Europa Deepen Collaboration (Crowdfund Insider) Rated: AAA
Fintechs Banco BNI Europa and Raisin have furthered the collaboration between the two firms. Banco BNI Europe says it has entered into a cooperation to allow Portuguese savers to gain access to the best savings rates available from across Europe.
International
Global Debt Registry Launches Decentralized Ledger for the Loan Market (Payment Week), Rated: A
Global Debt Registry (“GDR”)today announced the launch of its loan registry designed to verify and provide transparency on loan data on the cloud-based IBM Blockchain Platform. All loan level collateral positions and verification activity will now be immutably recorded on the decentralized registry with highly secure permissioning and access controls to provide new levels of efficiency to the $400bn asset backed securities (ABS) market.
Mobilum Crypto Payment Processor Partners With EthicHub Crowdlending Platform (Bitcoin Exchange) Rated: B
Mobilum is a cryptocurrency enabled payment processing platform which allows for cryptocurrency payments in real time at points of sale via an already existing debit or credit cards of the customer and the issuer of the Mobilum token. Mobilum recently announced its partnership with EthicHub, an affiliation that is expected to bolster a mutual sharing of investment opportunities for users on both platforms.
EthicHub’s crowd lending projects have provided financial solutions for small projects especially those involving farmers in less economically disadvantaged parts of the world, an accomplishment for which it was awarded the Best financial inclusion project at LaBitConf in Bogota as well as the award of the “Start-up with the Greatest social impact” at Unconference Fintech Awards in Madrid, Spain.
Australia
Mortgage Choice partners with P2P lender (The Adviser) Rated: AAA
Mortgage Choice has announced that it has partnered with RateSetter in a move that would provide its 600 brokers with access to personal loans and green loans offered by the P2P lender.
RateSetter CEO Daniel Foggo claimed that the partnership was part of the lender’s plan to develop its broker relationships.
ING distribution boss joins RateSetter (Independent Financial Adviser) Rated: B
ING’s former head of third-party distribution, who led relationships with financial advice and mortgage broking networks, has left to join fintech peer-to-peer lender RateSetter.
India
All Financial Transactions on Faircent Conducted through Escrow Account (BW CI World) Rated: AAA
Faircent.com was the first platform in India to meet all guidelines prescribed by RBI and receive the NBFC-P2P certification in May, this year. This is a validation of the business model that we have painstakingly built over the last five years.
All financial transactions on our platform are undertaken through an escrow account under the trusteeship of ITSL (an IDBI Trusteeship Services Ltd). Borrowers are evaluated by our fully-automated credit evaluation mechanism across more than 400 data points to understand their ability, stability and intent to repay before they are listed on the platform.
Canada
Finastra to sell Canadian-based Collateral Management Corporation business to Teranet (Finastra) Rated: AAA
Finastra today announced that it has entered a definitive agreement to sell its Canadian-based Collateral Management Corporation (CMS) business to Teranet. The transaction is expected to close in July 2018, subject to required regulatory approvals and customary closing conditions.
CMS will join Teranet as a new complementary line of business. Jointly, they will deliver enhanced, integrated solutions to a broad set of financial services customers, leveraging investments in technology, rich insightful data, and market leading electronic registry and workflow platforms.
Authors:
Monday June 18 2018, Daily News Digest
News Comments Today’s main news: Opendoor secures $325M in financing. RateSetter IFISA tops 100M GBP. China Rapid Finance’s earnings call slides. Alior Bank, solarisBank, Raisin, Mastercard partner on European digital bank. Harmoney to lend through its own platform. Amazon launches lending platform in India. Today’s main analysis: Rising interest rates and inflation. Today’s thought-provoking articles: Is P2P lending dying? The economic […]
News Comments
- Today’s main news: Opendoor secures $325M in financing. RateSetter IFISA tops 100M GBP. China Rapid Finance’s earnings call slides. Alior Bank, solarisBank, Raisin, Mastercard partner on European digital bank. Harmoney to lend through its own platform. Amazon launches lending platform in India.
- Today’s main analysis: Rising interest rates and inflation.
- Today’s thought-provoking articles: Is P2P lending dying? The economic impact of lending through Funding Circle. How the big 3 UK P2P lenders shaped the industry. California law could force online lenders to disclose rates.
United States
- Opendoor secures $325 million. Congratulations! If Opendoor secures more funding from SoftBank, it can expand even faster.
- Rising rates and inflation. This is a must-read PeerIQ analysis.
- Is P2P lending dying? No. The industry is experiencing a cooling off period, but there are still signs of growth.
- California law could force online business lenders to disclose rates. This may not be a bad thing. More transparency could make the industry more trustworthy, which would benefit all alternative lenders. Businesses can still get a better deal through most online lenders than through banks.
- Braviant Holdings gets $50 million credit facility.
- How will the Fed’s interest rate hike impact the average Joe?
- Zelle is on track to be more popular than Venmo.
- Credit union SMB loan approvals hit record lows.
- Digital-only banks grapple with integrating human interaction.
- Real estate finance is changing.
- Why digital banking, robo advice are pairing up.
- Wells Fargo simplifies pricing to compete with Square.
- New tech, customer experiences drive banking.
- Puddle shuts down.
- RealtyMogul, Comunidad Realty Partners sell Dallas investment property.
United Kingdom
- RateSetter IFISA tops 100 million GBP in record time.
- RateSetter to raise 30 million GBP.
- The economic impact of lending through Funding Circle. A must-read report.
- Funding Circle CEO on Europe’s fintech frenzy.
- How the big 3 shaped P2P lending.
- London Block Exchange to partner with UK bank.
- UK proves tech chops, Brexit causes tension.
- Alt finance funds see mixed success.
- Crowd2Fund app includes IFISA management tools.
- Redwood Bank raises 9.8 million GBP.
- BIS wants tighter rules funds offering credit.
International
Australia/New Zealand
- Harmoney to begin lending through its own online platform.
- Regulator sues Westpac for poor financial advice.
- Lending Crowd cuts rates.
- Parents give $10K toward kids first car.
India
- P2p lending companies change how they seek NBFC status.
- Amazon launches lending platform for sellers.
- World Bank lending report.
- Aye Finance secures $21.5 million.
- Can India replicate the UK P2P lending experience?
Other
News Summary
- United States
- Opendoor now has $ 325 million more. SoftBank could come next. (Recode) Rated: AAA
- Rising Rates and Inflation (PeerIQ), Rated: AAA
- Braviant Holdings Announces $ 50 Million Credit Facility with Keystone National Group (PR Newswire) Rated: A
- Is P2PLending Dying? (P2P Lending Expert) Rated: AAA
- How Will the Fed’s Interest Rate Hike Impact the Average Joe? (Dough Roller) Rated: A
- Zelle is on track to be more popular than Venmo in 2018 (Business Insider) Rated: A
- Credit Union SMB Loan Approvals Hit Record Lows (PYMNTS) Rated: A
- Digital-only banks grapple with integrating ‘human’ interaction into their products (Tearsheet) Rated: A
- Real Estate Finance Is Changing, Thanks to ‘Fintech’ Startups (The Bridge) Rated: A
- Why digital banking and robo advice are pairing up (Financial Planning) Rated: A
- Wells Fargo simplifies payments pricing to compete with Square (Payments Source) Rated: A
- New Technologies and New Customer Experiences Drive Banking Today (Lend Academy) Rated: A
- Peer to Peer Micro-Credit Site Puddle Shuts Down (Crowdfund Insider) Rated: A
- RealtyMogul, Comunidad Realty Partners Sell Dallas Area Investment Property (Herald Courier) Rated: B
- California may force online business lenders to disclose rates (American Banker) Rated: AAA
- United Kingdom
- RateSetter Reports IFISA Tops £100 Million in Record Time (Crowdfund Insider) Rated: AAA
- Peer-to-peer lender Ratesetter to raise £30m as London float looms (City A.M.) Rated: A
- THE ECONOMIC IMPACT OF LENDING THROUGH FUNDING CIRCLE (Funding Circle) Rated: AAA
- Funding Circle CEO on the Fintech Frenzy in Europe (Yahoo Finance) Rated: A
- How the big three shaped P2P (Peer2Peer Finance) Rated: AAA
- London Block Exchange To Strike Deal With UK Bank (Crypto Daily) Rated: A
- The UK proves its tech chops, Google’s massive diversity gap and Brexit cause business tensions (Elite Business) Rated: A
- Alternative finance funds see mixed success (Peer2Peer Finance) Rated: A
- Updated Crowd2Fund app includes IFISA management tools (Peer2Peer Finance) Rated: B
- Digital Challenger Redwood Bank Raises £9.8 Million (Crowdfund Insider) Rated: A
- BIS wants tighter rules for funds offering credit, fintech (Reuters) Rated: A
- China
- China Rapid Finance 2018 Q1 – Results – Earnings Call Slides (Seeking Alpha) Rated: AAA
- Chinese P2P giant Lufax dodges valuation bullet (Nasdaq) Rated: A
- European Union
- Alior Bank, solarisBank, Raisin and Mastercard to unveil European digital bank (Fintech Futures) Rated: AAA
- N26 launches a revised metal card (Tech Crunch) Rated: A
- International
- Fintechs are staring down the future of banking (Financial Post) Rated: A
- Australia/New Zealand
- Harmoney is to begin lending money through its own online platform (Interest) Rated: AAA
- Australian regulator sues Westpac for staffer’s poor financial advice (Reuters) Rated: A
- P2P lender cuts rates (Good Returns) Rated: A
- Parents giving $ 10k towards kid’s first car (Finder) Rated: A
- India
- P2P lending companies change tack in bid to become NBFCs (Business Standard) Rated: AAA
- Amazon launches lending platform for sellers (The Economic Times) Rated: AAA
- Fiscal 2015 World Bank Lending Report highlights India as one of the biggest Loan Beneficiary (Digital Journal) Rated: AAA
- Aye Finance Secures $ 21.5M in Series C Funding (Finsmes) Rated: A
- P2P lending: Can India replicate the UK experience to achieve Sabka Saath, Sabka Vikas? (Economic Times) Rated: A
- Asia
- FSC reins in P2P firms (Korea Joongang Daily) Rated: AAA
- MENA
- Where’s the money, honey? (Gulf News) Rated: AAA
United States
Opendoor now has $ 325 million more. SoftBank could come next. (Recode) Rated: AAA
Opendoor has already taken out $1.5 billion in loans for home buying. And the company now says it has accepted another $325 million in new financing that values it at more than $2 billion, according to a person familiar with the matter.
Opendoor will expand to 50 cities with the $325 million round. But SoftBank, with its huge $100 billion checkbook, could help Opendoor expand to even more as soon as later this year. The Japanese investor typically invests hundreds of millions of dollars into private companies, and that sort of check would be expected here, though some of the money tends to buy out existing investors.
Rising Rates and Inflation (PeerIQ), Rated: AAA
The Fed raised interest rates for the 2nd time in 2018 and the target Federal Funds Rate now stands at 1.75% – 2%. The committee indicated that it would raise rates twice more in 2018, a departure from the previous stance of 3 rate hikes in 2018.
The Fed summarizes member views using the “dot-plot”. The dot plot consolidates every committee member’s estimates of rates at the end of 2018, 2019, 2020 and the for long-term. The green line shows the median estimate indicating that most Fed members expect rates to be between 2.25% – 2.5% at the end of 2018, and between 3% – 3.25% at the end of 2019.
Forward Rates – Where do we go from here?
Braviant Holdings Announces $ 50 Million Credit Facility with Keystone National Group (PR Newswire) Rated: A
Braviant Holdings, a provider of tech-enabled credit solutions for underserved Americans, has entered into a $50 million senior secured credit facility with institutional investment firm Keystone National Group.
The Keystone debt facility allows Braviant to expand its newly launched near prime lending platform, Chorus Credit. Chorus is Braviant’s latest offering in support of the company’s mission to promote financial inclusion for 51 million adults considered underbanked by the FDIC. While the FDIC estimates that these adults make up 19.9% of U.S. households, data from the Fair Isaac Corporation, better known as FICO, suggests that 43% of U.S. consumers have below 700 credit scores. In the traditional banking sector, a lower than average FICO score severely limits access to credit for almost half of the nation’s population. Chorus aims to close the credit gap for middle America by offering $2,500 to $10,000 personal loans that are repaid in small, affordable installments.
Is P2PLending Dying? (P2P Lending Expert) Rated: AAA
Seriously. I’m asking. Is p2plending dying? Returns have sucked the last couple of years for all investors, but especially us retail investors since the 2015 and 2016 vintages have performed so poorly. My own returns are 400-500 basis points lower than my returns on my 2013 and 2014 vintage loans were and I know some colleagues and friends who have lost money on these investments.
But can the industry survive?
How Will the Fed’s Interest Rate Hike Impact the Average Joe? (Dough Roller) Rated: A
On Wednesday, The Federal Reserve decided it was going to increase the federal funds rate by 25 basis points, from 1.75% to 2%. This is the second rate increase already this year. In March, new chairman Jerome Powell and the Fed increased the federal funds rate from 1.5% to 1.75%. The Fed also indicated that they’d be targeting two more increases this year alone.
As I said before, when the Fed increases rates, it usually means something is going well for the economy. And all signs are pointing to that being the case. Unemployment is currently at 3.8%. In the last 50 years, unemployment has only been this low two times. That’s significant, and it means that more people are finding jobs. It may also signify a strengthening job market for you. The Fed projects unemployment will drop to 3.6 percent by the end of the year, too.
Zelle is on track to be more popular than Venmo in 2018 (Business Insider) Rated: A
Zelle is a year-old service that lets you instantly transfer money to someone else, much like Venmo or Square Cash.
But Zelle differs from either service in a major way: because it was built by seven of the largest US banks, it’s often able to integrate more seamlessly with your bank’s mobile app. While other services make you wait a few days for the money you received from friends to show up in your bank account, Zelle can transfer the money almost instantly.
For those reasons, analysts at eMarketer expect Zelle to “leapfrog” other payments services before the end of the year.
Credit Union SMB Loan Approvals Hit Record Lows (PYMNTS) Rated: A
The latest data from the monthly Biz2Credit Small Business Lending Index suggests a slump in small business lending among U.S. credit unions.
A press release issued on Wednesday (June 13) detailed the May Index’s latest findings, which found that large banks with more than $10 billion in assets are approving of nearly 30 percent of small business loan applications, a two-tenths of a percent increase from April levels. That figure is also a new high for post-recession big bank lending to small businesses.
Digital-only banks grapple with integrating ‘human’ interaction into their products (Tearsheet) Rated: A
Digital-only banks cater to younger customers who don’t want to talk to bankers at brick-and-mortar branches — or bother visiting a branch at all. Or so they think.
Recent customer surveys indicate otherwise, according to research findings released this month from Celent, commissioned by Samsung. It revealed that customers want some kind of human interaction for complex issues. The study found that about half of U.S. banking customers aged 18 to 44 said they banked digitally, but prefer to resolve some matters in-person. Overall, most customers surveyed preferred dealing with humans on matters like setting up financial goals or getting investment advice. To respond to fraud, a lost or stolen card, or identity theft, a majority of those surveyed across age categories preferred to phone the contact center or address it in a physical branch.
Real Estate Finance Is Changing, Thanks to ‘Fintech’ Startups (The Bridge) Rated: A
If your student loan debt is larger than your salary, investing in real estate might sound like a joke. But it’s doable, said Dave Conroy of the startup Meridio, a website in beta testing that lets users invest amounts of money that you might have in your wallet right now–even $20–into specific properties. Using blockchain technology keeps each transaction cost low, said Conroy, whose company is an offshoot of Bushwick-based ConsenSys, which is building myriad applications based on the Ethereum platform.
For investors, the service would reduce transactions costs and make a real-estate portfolio more liquid. For owners, it would unlock more capital and streamline transactions. While Meridio won’t provide market intelligence about properties to invest in, prospective investors can call on their own experience, says Conroy, who previously worked for the National Association of Realtors.
Why digital banking and robo advice are pairing up (Financial Planning) Rated: A
Banks and digital wealth startups are headed toward the same goal from different starting points.
Each side is increasingly seeking to package automated investment advice with checking because customers are expressing an interest in getting both services from one provider.
Fifth Third Bancorp’s securities unit teamed up with Fidelity recently to offer automated advice, while the microinvesting app Acorns rolled out a debit card called Spend and opened up 50,000 checking accounts in two days.
Wells Fargo simplifies payments pricing to compete with Square (Payments Source) Rated: A
Wells Fargo will simplify the prices it charges small businesses to accept credit and debit card transactions as the bank responds to pressure from startups such as Jack Dorsey’s Square Inc.
The changes, which are tailored for small businesses that process $100,000 a year or less, eliminate many of the complicated pricing policies that varied from client to client, according to Danny Peltz, who leads treasury management and merchant services at the company. Business customers will also be able to apply online for payment processing capabilities with Wells Fargo, Peltz said.
New Technologies and New Customer Experiences Drive Banking Today (Lend Academy) Rated: A
American Banker’s Penny Crosman sat with Cathy Bessant, Chief Operations and Technology Officer, Bank of America to discuss the bank’s use of AI. She described how the bank has inventors all over the world in their distributed innovation model.
Peer to Peer Micro-Credit Site Puddle Shuts Down (Crowdfund Insider) Rated: A
Puddle, an online lender that provided micro-credit in a peer to peer platform, is shutting down.
In an email circulated by the company, Puddle founders stated that after five years of operation the businesses model was “unsustainable.”
RealtyMogul, Comunidad Realty Partners Sell Dallas Area Investment Property (Herald Courier) Rated: B
RealtyMogul, a pioneer in providing private real estate to discerning investors, announced that it has sold an investment property in partnership with Comunidad Realty Partners at greater than 1.5 times its purchase price.
The property, Lodge at Main, a 208-unit multifamily apartment complex in the Dallas/Fort Worth, Texas area was acquired in 2015.
California may force online business lenders to disclose rates (American Banker) Rated: AAA
A bill pending in California aims to tame the disorderly, confusing and largely unregulated world of online small-business lending by mandating that borrowers receive standard price disclosures.
The bill, which passed the Senate without a vote to spare and has failed to garner much support from either the online lending industry or its critics, still faces a tough fight in the state Assembly. But if the measure does get enacted in California, it could serve as a blueprint for other states.
The legislation tackles the question of whether commercial lenders should be required to disclose the price of financing in a way that enables borrowers to compare multiple offers. Just as nettlesome is the question of how any such comparison metric should be calculated.
The bill would apply to small businesses that borrow $500,000 or less.
United Kingdom
RateSetter Reports IFISA Tops £100 Million in Record Time (Crowdfund Insider) Rated: AAA
UK based peer-to-peer lender RateSetter is reporting that subscriptions to its IFISA have surpassed £100 million. This milestone took four months to reach and, according to RateSetter, faster than any other P2P lender. To date, RateSetter has originated over £2.5 billion in online loans to both businesses and individuals. RateSetter states that more than 10,000 IFISA accounts have now been opened. The average annual return received by investors stands at 4.4% with more than £100 million in interest having been paid.
Peer-to-peer lender Ratesetter to raise £30m as London float looms (City A.M.) Rated: A
Peer-to-peer lending business Ratesetter is working on a £30m fundraising which is expected to be a prelude to a London float.
According to Sky News Ra
tesetter is working with investment bank Lazard and broker Peel Hunt to raise £30m from investors.
The funding round would value Ratesetter at about £280m.
The fundraising is expected to be a precursor to a stock market flotation which could take place as early as next year.
THE ECONOMIC IMPACT OF LENDING THROUGH FUNDING CIRCLE (Funding Circle) Rated: AAA
In the UK, where Funding Circle has been established the longest, the platform is now competing directly with banks in the small business lending market – with net lending through the platform exceeding that of the entire UK banking system for two successive quarters at the end of 2017. A survey of Funding Circle’s customers undertaken for the study suggests 89 percent of the platform’s UK small business customers would approach
Funding Circle first again in future, rather than going to a bank.
Read the full report here.
Funding Circle CEO on the Fintech Frenzy in Europe (Yahoo Finance) Rated: A
How the big three shaped P2P (Peer2Peer Finance) Rated: AAA
ALTHOUGH we still tend to think of peer-to-peer lending as a young sector, it is now 13 years since Zopa became the first lender in the market. It was joined five years later by Funding Circle and RateSetter and since then the big three have dominated the P2P market.
Here are some of the key moments in their journeys.
London Block Exchange To Strike Deal With UK Bank (Crypto Daily) Rated: A
London Block Exchange, a UK based crypto provider is alleged to be pairing up with a new UK based bank, ClearBank.
If this news is indeed true, this will mark the first time a lender has struck a deal with a cryptocurrency-based entity.
The UK proves its tech chops, Google’s massive diversity gap and Brexit cause business tensions (Elite Business) Rated: A
Out of Europe’s 34 unicorns, the UK has produced 13. These have a combined value of $23bn, equal to 38% of the European total. This puts the UK ahead of Germany and France, which have six and three scaleups valued over $1bn respectively. Given the nation has already spawned success stories like Deliveroo and Funding Circle, it’s hardly surprising that VC investment is also booming in the UK. Last year British startups raised $7.9bn compared to Germany’s $3.2bn and France‘s $2.8bn.
Brexit has made UK SMEs worry about talent
Having polled companies in 11 countries, researchers revealed that UK entrepreneurs were much less confident about the conscious uncoupling than those in the EU. Overall, 57% of respondents felt that their biggest challenge was that they had too little time and that they were doing everything themselves. This was double the 24% who thought hiring the right people were their biggest worry.
Alternative finance funds see mixed success (Peer2Peer Finance) Rated: A
Over the past year, P2P Global Investments (P2PGI), VPC Specialty Lending Investments and Ranger Direct Lending (RDL) have moved away from pure P2P to boost returns and narrow their discounts, while the Funding Circle SME Income Fund (FCIF) has remained true to its roots, all with varying outcomes.
The FCIF investment trust solely backs loans originated via the Funding Circle platform and saw its net asset value (NAV) return 6.9 per cent last year, while trading on a healthy premium.
In comparison, RDL – which has recently announced its intention to close – returned 5.4 per cent, VPC – which has shifted from P2P towards balance sheet lenders – saw its NAV total return grow by 3.07 per cent, while P2PGI – which last year merged its manager MW Eaglewood with Pollen Street Capital and is focusing more on asset-backed alternative lenders – reported a NAV return of 3.03 per cent during 2017. RDL and P2PGI are both trading at double-digit discounts to NAV.
Updated Crowd2Fund app includes IFISA management tools (Peer2Peer Finance) Rated: B
PEER-TO-PEER platform Crowd2Fund has relaunched its app to include Innovative Finance ISA (IFISA) management features via their smartphones.
Digital Challenger Redwood Bank Raises £9.8 Million (Crowdfund Insider) Rated: A
Redwood is targeting the SME market. Products include mortgages for business owners and professional landlords, as well as a range of savings accounts. Redwood seeks to offer British businesses fast, simple, transparent loans and savings accounts, coupled with superlative service. They also promise that money is being invested back into British business and into the communities they are a part of. Warrington Borough Council has a 33% stake in the firm that was pegged at £30 million.
BIS wants tighter rules for funds offering credit, fintech (Reuters) Rated: A
Regulations introduced after the financial crisis a decade ago to smooth out banking booms and busts should be extended to funds that provide credit, or shadow banks, and fintech firms, the Bank for International Settlements (BIS) said on Sunday.
The introduction of “macroprudential” policy requiring banks to build up separate “countercyclical” buffers of capital if credit markets become frothy was a core crisis-era innovation.
The buffers can be released if loans begin turning sour and maintain resilience of the financial system to shocks – a departure from the traditional “microprudential” focus on the stability of individual banks.
China
China Rapid Finance 2018 Q1 – Results – Earnings Call Slides (Seeking Alpha) Rated: AAA
Chinese P2P giant Lufax dodges valuation bullet (Nasdaq) Rated: A
Lufax is wisely trying to grow up in private. The Chinese financial technology giant, which focuses on peer-to-peer lending and wealth management, plans to raise more than $1 billion at a $40 billion valuation ahead of a delayed Hong Kong flotation, says Reuters. That makes sense. Listing now could upset Beijing, and might only be achievable at a discounted price. Abundant venture capital allows the Ping An-backed startup to keep growing without a distracting market debut.
European Union
Alior Bank, solarisBank, Raisin and Mastercard to unveil European digital bank (Fintech Futures) Rated: AAA
Poland’s Alior Bank has teamed with solarisBank, Raisin and Mastercard to unleash a pan-European digital bank.
The new offering, which is planned to be launched in the fourth quarter of 2018, will be built on the “strengths of all partners”.
Alior Bank will deliver multicurrency accounts with international transfers and deposits.
solarisBank will add the banking infrastructure with its technological, compliance and regulatory framework.
Raisin through its network of partner banks, is adding various savings and investment possibilities to the offering.
N26 launches a revised metal card (Tech Crunch) Rated: A
Fintech startup N26 is updating its N26 Metal product and launching it tomorrow. You might remember that the company first announced its premium card at TechCrunch Disrupt Berlin in December 2017. Shortly after the conference, the card was available in early access for existing N26 Black customers.
But the company had to go back to the drawing board and update the card design. N26 Metal customers had some complaints about the design of the card in particular.
International
Fintechs are staring down the future of banking (Financial Post) Rated: A
For instance, U.S.-based Lending Club, which has been around since 2007 and which is public, has arranged US$35 billion in consumer loans for its two million borrowers. The average loan — and it originates about US$2.4 billion a quarter — is about US$14,000.
Those themes were on full display this week in Toronto at an event organized by the KiWi Private Credit Fund, which raises capital from investors and purchases unsecured consumer loans and secured small business loans originated by established U.S.-based lending marketplaces.
“But they are not good at pricing a 9 per cent or 12 per cent risk,” he added, all of which allows entities such as his, to meet that need. It has US$27 million in assets; an average loan of almost US$14,000 and targets a return in the six- to eight-per-cent range.
Australia/New Zealand
Harmoney is to begin lending money through its own online platform (Interest) Rated: AAA
Peer to peer lending facilitator Harmoney Corp is making a number of tweaks to its operation, which will include the ability to lend its own money through its own platform.
The company has also renamed its ‘platform fee’ – recently the subject of Commerce Commission court action – as an ‘establishment fee’ and dropped the fee by $50 to $450. The company has also tweaked some of its interest rates higher (see below tables).
Harmoney will now be operating two different markets within its platform; the existing P2P facility and a new ‘wholesale market’ operated through a new subsidiary Harmoney Nominee.
Australian regulator sues Westpac for staffer’s poor financial advice (Reuters) Rated: A
An Australian regulator filed a lawsuit against No. 2 lender Westpac Banking Corp (WBC.AX) over a financial planner it alleges gave poor advice for years, upping its scrutiny of a sector already under fire amid an embarrassing public inquiry.
Australia’s A$5 billion ($3.7 billion) financial planning sector has provided some of the most damning evidence at an inquiry into finance sector misconduct, ordered by the government after a string of banking scandals including fraud.
P2P lender cuts rates (Good Returns) Rated: A
Peer to peer lender Lending Crowd has cut its borrower interest rates for all new business and personal loan applications including vehicle purchases and debt consolidations.
A1 grade personal borrowers will have a market leading rate of 6.89% pa and SME businesses will have rates available from 7.98%. Interest rates across all loan grades will range from a low of 6.89%
to a high of 18.96% (previously 7.90% to 19.75%).
Parents giving $ 10k towards kid’s first car (Finder) Rated: A
Survey shows 60% of parents are giving kids $10,594 to buy their first car.
According to research conducted by RateSetter, parents are stumping up $10k to get their child their first set of wheels.
RateSetter found that among parents who bought their child a car, 15% chose a new model, 71% opted for a used one and 14% donated their own vehicle. The majority of families could afford a car under $10,000, while 26% spent between $10,000 and $20,000. A lucky 12% of kids were gifted over $20,000 towards their ride. Parents in Victoria spend the most on their child, up to $13,386. In NSW, the average outlay was $10,404.
India
P2P lending companies change tack in bid to become NBFCs (Business Standard) Rated: AAA
Peer-to-peer (P2P) lending companies are changing their business model as they migrate to becoming non-banking finance companies (NBFCs).
RBI had created a special category called NBFC-P2P, in view of the proliferation of P2P entities. While mandating Rs 20 million as minimum net worth, RBI had also imposed a Rs 1-mn cap for individual lending on such platforms.
So far, a couple of these entities have got an NBFC licence from RBI. Faircent says it got the licence about 20 days earlier.
Amazon launches lending platform for sellers (The Economic Times) Rated: AAA
Amazon India has launched a platform for lenders and sellers wherein sellers can choose from competitive rates and loan offers. It will also open its APIs to lenders to plug in and lend to the sellers as part of the new programme, called the seller lending network.
India will be the first geography for Amazon where it has launched such a seller platform.
Fiscal 2015 World Bank Lending Report highlights India as one of the biggest Loan Beneficiary (Digital Journal) Rated: AAA
Fintechs offer loans to individuals with low credit scores as well. For instance, in the case of Qbera, individuals with a minimum credit score of 600 can qualify for personal finance. This is not quite so in the case of private banks – individuals need to have a minimum credit score of 750 to be eligible.
Aye Finance Secures $ 21.5M in Series C Funding (Finsmes) Rated: A
Aye Finance, a Gurgaon, India-based provider of financial services to micro and small businesses, secured $21.5m in Series C funding.
Backers included CapitalG, SAIF Partners and LFT.
The company intends to use the funds to accelerate business growth.
P2P lending: Can India replicate the UK experience to achieve Sabka Saath, Sabka Vikas? (Economic Times) Rated: A
India is still struggling with a huge credit gap that is holding back the economy. Getting a bank loan is an extremely cumbersome and long-drawn process for salaried individuals and small businesses, alike. According to a study conducted jointly by ASSOCHAM and EY, around 19% of India’s population remains unserved by the traditional banking sector.
Several million MSMEs that lack a tangible financial record are thus not eligible for credit from legacy financial institutions who still use traditional credit and financial data to evaluate eligibility. For the Indian economy to achieve the next level of growth, the current gap of nearly $200 billion in credit supply to MSMEs and significant under-banked population of India needs to be addressed immediately.
Asia
FSC reins in P2P firms (Korea Joongang Daily) Rated: AAA
In Korea, P2P firms, which directly connect borrowers with investors through online platforms, are not under the direct supervision or management of financial authorities. The Financial Services Commission (FSC) only indirectly supervises them by requiring registration of P2P firms’ lending subsidiaries, which most P2P firms use to carry out the process of lending money to borrowers.
But this safeguard also has many loopholes. TheHighOneFunding, for example, had uploaded the name of a different person as CEO when it registered its lending subsidiary with government regulators.
With more investors attracted to the idea of making easy money through high interest rates on P2P lending, the cumulative amount of loans on such platforms has dramatically increased, from 37.3 billion won in late 2015 to 3.50 trillion won as of May.
MENA
Where’s the money, honey? (Gulf News) Rated: AAA
According to the Khalifa Fund for Enterprise Development, nearly 50 to 70 per cent of loan applications made by SMEs in the UAE are declined by traditional banks, while loans to SMEs account for around four to five per cent of the outstanding bank credit in the UAE.
Enter peer-to-peer lending.
Over the years, such platforms have become big business: In 2016, the size of the peer-to-peer lending market in the US, UK, the European Union, Australia and New Zealand was estimated to be more than $72 billion, according to AltFi. In China, loan originations in 2015 were estimated at $101 billion.
Authors:
Tuesday May 22 2018 Daily News Digest
News Comments Today’s main news: Kabbage to launch payment services. Funding Circle SME Income Fund limited force signal moves past key line. Zopa boosts TruFin results. DEPO launches to help lenders accept digital assets as collateral. Qudian stock drops 16.5%. Today’s main analysis: Deep dive into MFT 2018-2 vs. AVNT 2018-A (A MUST-READ). Today’s thought-provoking articles: Credit score improvement […]
News Comments
- Today’s main news: Kabbage to launch payment services. Funding Circle SME Income Fund limited force signal moves past key line. Zopa boosts TruFin results. DEPO launches to help lenders accept digital assets as collateral. Qudian stock drops 16.5%.
- Today’s main analysis: Deep dive into MFT 2018-2 vs. AVNT 2018-A (A MUST-READ).
- Today’s thought-provoking articles: Credit score improvement on My LendingTree. GreenSky IPO offers litmust test for online lenders. Is decentralized lending too good to be true?
United States
- Kabbage to launch payment services. AT: “Expansion is a good thing, and Kabbage has been making some great strides lately. Of course, there are a few ways to expand. Expanding services is just one of them, but a very important one.”
- MFT 2018-2 vs. AVNT 2018-A. AT: “A very good, deep look at Marlette’s MFT 2018-2 securitization and Avant’s AVNT 2018-A. A great comparison. A must-read.”
- Avant continues to benefit from tighter underwriting.
- My LendingTree users improve credit scores. AT: “LendingTree provides proof of the value of its services better than anyone in the industry.”
- GreenSky’s IPO is online lending litmus test. AT: “A very good look at GreenSky’s value versus LendingClub’s and Prosper’s. We can debate why the two latter have had struggles since their IPOs, but the industry is maturing now and GreenSky’s IPO could signal a new wave of online lending IPOs. If it does well, a floodgate could open. If not, the doors may shut for a long time.”
- How to responsibly invest in Bitcoin. AT: “If you want to invest responsibly, don’t take a loan.”
- Is Mulvaney targeting fintechs or nonbanks?
- Banking overhaul could be heading to Congress.
- Hedge funds, PE firms are main street banks’ new lending competitors.
- How small banks can make tech the solution.
- Vota turns credit card transactions into recommendations and spots fraud.
- Optimal Blue offers pipeline & lock management APIs.
- Mastercard unveils initiative aimed at digital banking.
United Kingdom
- Funding Circle SME Income Fund limited force signal moves past key line.
- Zopa stake boosts TruFin results.
- UK watchdog says robo-advice falls short.
- Jamieson Blake joins Basset and Gold.
European Union
- DEPO helps lenders accept digital assets as collateral. AT: “This is a great idea. If agnostic toward type of lender, this service, if it catches on, could bring about new competition in online lending.”
- Interview with Matthias Setzer of PayU. AT: “Lend Academy podcast.”‘
- Instantor wants to change your views on data.
- Bricknode, Lendytech unite under Untie Group banner.
International
- Decentralized lending: Is it too good to be true? AT: “A sober look at a new buzzword. Lenders should be cautious about jumping on the decentralized bandwagon and throwing about a word that might be misleading or confusing. If your lending business is truly decentralized, fine, but is that really a distinction that can drive value?”
- Automation, ‘platformization’ could take hold in banking.
- New lending models in fintech.
Other
News Summary
- United States
- Online lender Kabbage to launch payment services by year-end (Reuters) Rated: AAA
- Deal Deep Dive MFT 2018-2 vs AVNT 2018-A (PeerIQ), Rated: AAA
- Avant continues to benefit from tighter underwriting criteria (Asset Securitization Report) Rated: A
- LendingTree Study Finds More than Half of My LendingTree Users Improved Credit Scores in Majority of 50 Metros Analyzed (PR Newswire) Rated: AAA
- New Fintech IPO Offers Litmus Test for Online Lenders (Wall Street Journal) Rated: AAA
- How to responsibly invest in bitcoin (Bankrate) Rated: A
- Is Mulvaney targeting fintech or nonbanks? (Respa News) Rated: A
- Banking overhaul heading for likely passage in Congress (Yahoo! Finance) Rated: A
- Main Street Banks’ New Lending Rivals: Hedge Funds and Private Equity (Wall Street Journal) Rated: A
- Making technology the solution, not the problem, at small banks (American Banker) Rated: A
- Vota turns your credit card transactions into recommendations, helps you spot fraud (Tech Crunch) Rated: A
- Optimal Blue First-to-Market with Pipeline & Lock Management APIs (Business Wire) Rated: B
- Mastercard Unveils Fintech Initiative Aimed at Digital Banking (Banker & Tadesman) Rated: B
- United Kingdom
- Funding Circle Sme Income Fund Limited Force Signal Moves Past Key Line (Concordia Review) Rated: AAA
- Zopa stake boosts TruFin annual results (AltFi News) Rated: AAA
- UK watchdog says automated financial advice falls short (Rueters) Rated: A
- Exclusive: Former ADS Securities exec Jamieson Blake joins specialty lender Basset and Gold (Leaprate) Rated: B
- China
- Why Qudian Inc Stock Dropped 16.5% Today (Motley Fool) Rated: AAA
- European Union
- European Company Helps Turning Cryptocurrency into Collateral (the Merkle) Rated: AAA
- Matthias Setzer of PayU (Lend Academy) Rated: A
- New Insight will change the way you think about data (Instantor Email) Rated: A
- Bricknode and Lendytech unite under Untie Group banner (Finextra) Rated: B
- International
- Decentralized Lending Promises Easy And Global Access To Credit, But Is It Too Good To Be True? (Forbes) Rated: AAA
- Automation, ‘platformisation’ tipped to take hold in banking (AltFi News) Rated: A
- Fin-tech changes the loan process: Meet new lending models (Bankless Times) Rated: A
- Asia
- Kieran Arasaratnam to Join Credify Founding Team as CFO (Digital Journal) Rated: B
United States
Online lender Kabbage to launch payment services by year-end (Reuters) Rated: AAA
Kabbage Inc, a U.S. online lender for small businesses, plans to launch payment processing services by year-end, President Kathryn Petralia said on Monday, helping it to diversify and compete more directly with industry leaders PayPal Holdings Inc and Square Inc.
The Atlanta-based startup will offer tools to enable clients, mostly brick-and-mortar businesses, to accept card payments in-store and online, Petralia said in an interview.
Deal Deep Dive MFT 2018-2 vs AVNT 2018-A (PeerIQ), Rated: AAA
This week we compare 2 very different MPL personal loan securitizations – Marlette’s MFT 2018-2 Prime deal and Avant’s AVNT 2018-A Near Prime deal.
Collateral Comparison
AVNT 2018-A has lower average loan size by $6,435, shorter weighted average loan terms by 9 months and higher WAC by 16.28%. This is a reflection of the quality of borrowers that Avant and Marlette target. Marlette’s prime borrowers have higher weighted average FICO scores by 59 points than Avant’s near prime borrowers. The geographic distribution is quite similar between the two deals.
Bond Characteristics and Pricing
The significantly higher WAC on AVNT 2018-A leads to a 14.8% pickup in excess spread. KBRA’s base case loss estimate is 7.4% higher on AVNT 2018-A, which leads to a 7.4% higher loss-adjusted excess spread on AVNT 2018-A.
Capital Structure
AVNT 2018-A has 3.3% lower O/C which is compensated by 14.8% higher excess spread. The A tranches have similar CE in both deals but Marlette’s A is rated one notch higher.
Avant continues to benefit from tighter underwriting criteria (Asset Securitization Report) Rated: A
The introduction of tighter underwriting criteria continues to pay off for the online consumer lender Avant.
The company, which was founded in 2012 and is based in Chicago, was able to lower the credit enhancement, again, on its latest securitization, the $221.9 million Avant Loans Funding Trust 2018-A.
Kroll Bond Rating Agency assigned an A- to the $149 million senior tranche of notes to be issued, which benefit from 38.42% credit enhancement. That’s down from 41.8% on the comparable tranche of its prior transaction, completed last year.
LendingTree Study Finds More than Half of My LendingTree Users Improved Credit Scores in Majority of 50 Metros Analyzed (PR Newswire) Rated: AAA
LendingTree today released its study on the top places with rising credit scores. With credit scores being a crucial component of personal financial stability and opportunity, LendingTree analysts decided to look at anonymized My LendingTree users who logged into their accounts in both the first quarter of 2017 and the first quarter of 2018 to determine the top metros for rising credit scores among the 50 largest in the United States.
Below are some of the key takeaways from the study.
- Jacksonville, Indianapolis, Denver and Tampa saw the highest rate of rising credit scores among the 50 biggest metros from Q1 2017 to Q1 2018.
- Virginia Beach, Va., Los Angeles and Birmingham, Ala., had the lowest rate of rising credit scores, with 47 percent of Virginia Beach users raised their credit scores.
- San Jose (Silicon Valley) saw the most dramatic rises in credit scores, with the highest rates of people who raised their score by more than 75 points and 100 points.
- In the majority of the 50 metros analyzed, more than 50 percent of users improved their credit scores between Q1 2017 and Q1 2018.
- About one in three increased their scores by over 20 points, and 3.5 percent were able to improve their scores by 100 points or more.
New Fintech IPO Offers Litmus Test for Online Lenders (Wall Street Journal) Rated: AAA
It wasn’t long ago that online lenders were ascendant. More than $3 billion in capital from investors as diverse as Japanese conglomerate SoftBank Group Corp. and celebrity chef David Chang gushed into lending startups in 2015, according to Dow Jones VentureSource. Analysts at Morgan Stanley predicted that year that the nascent industry would account for 10% of all unsecured consumer and small-business loans by 2020.
How to responsibly invest in bitcoin (Bankrate) Rated: A
Recently, Bank of America, Chase, and Citigroup joined Capital One and Discover in banning cardholders from using them to buy cryptocurrencies. Credit cards were one of the most popular payment methods because of their relatively low fees and instant transaction rates, and investors are having to look at other options to make their investments.
You can borrow money from a family member or friend, or you can use a peer-to-peer lending platform like SoFi to leverage funds for Bitcoin investments. However, be cautious when borrowing money for an investment. Interest rates can eliminate any gains you get from the investment, and the risk of losing money in such a volatile market is high.
Is Mulvaney targeting fintech or nonbanks? (Respa News) Rated: A
The acting director also responded to a question about qualified mortgages which has left the industry scratching its head since. Was Mulvaney separating fintech marketplace lending from traditional mortgage lending, or was he drawing a line between depository mortgage and non-depository mortgages?
Banking overhaul heading for likely passage in Congress (Yahoo! Finance) Rated: A
Legislation that would ease banking regulations — and modify rules governing credit reports and some consumer loans — is headed for likely passage in Congress any day now.
The bill cleared the Senate in March with some bipartisan support and is expected to be voted on by House lawmakers this week, perhaps as early as Tuesday.
The measure rolls back some of the regulations imposed by the Dodd-Frank Act of 2010. That legislation came on the heels of the financial meltdown that rocked the U.S. economy a decade ago, when risky and unaffordable mortgages contributed to millions of homeowners losing their houses to foreclosure.
Main Street Banks’ New Lending Rivals: Hedge Funds and Private Equity (Wall Street Journal) Rated: A
Main Street banks are feeling squeezed by competition from new rivals: nonbanks like hedge funds and private-equity firms that are elbowing into business loans.
Growth in business lending has picked up recently—it was up 3.3% year over year as of May 9, according to Federal Reserve data released Friday, after falling below 1% earlier this year. But the growth rate is still far below where it’s been in recent years, when loans to businesses grew at a double-digit clip for much of 2014, 2015 and 2016.
Making technology the solution, not the problem, at small banks (American Banker) Rated: A
The board members of R Bank in Round Rock, Texas — who include the Hall of Fame fireballer Nolan Ryan, a co-founder of the bank — hold accounts there, and they, like most other patrons, knew its old technology made for clunky customer service.
So, says president and CEO Steve Stapp, he channeled those irksome experiences into board support for an investment in a systems overhaul at the $455 million-asset bank.
For community banks in highly competitive markets, service with a personal touch can be a differentiator to win and keep customers. But when legacy technology hampers the customer experience, all the cups of coffee in the world won’t help.
Vota turns your credit card transactions into recommendations, helps you spot fraud (Tech Crunch) Rated: A
Blippy, which was hyped up to a $46.2 million valuation back in 2010 before the world realized that almost nobody wanted a dedicated network for sharing and viewing each others’ purchases. Well, guess what? Someone’s trying a Blippy-like thing again — this time, in the form of a new app called Vota, which automatically records your credit card purchases and the places you visit so you can share them with friends or family, or view them privately for your own reference.
As a byproduct of this data collection, you may spot credit card fraud or other errant charges, too, or just get a handle on your spending.
Optimal Blue First-to-Market with Pipeline & Lock Management APIs (Business Wire) Rated: B
Optimal Blue is proud to recognize enterprise SaaS digital mortgage solution leader, Capsilon, as its first strategic partner to complete certification with the highly anticipated Pipeline & Lock Management APIs. By debuting these innovative system-to-system API interfaces in the mortgage industry, Optimal Blue has enabled Capsilon’s digital mortgage platform to fully support the creation, management, registration, and locking of first-lien mortgages instantaneously with Optimal Blue. As a result of this advanced integration, a completed application and pre-approval are done in half the time of the traditional back-and-forth processes, empowering loan officers to be more competitive in today’s purchase market and win more business from real estate agents.
Mastercard Unveils Fintech Initiative Aimed at Digital Banking (Banker & Tadesman) Rated: B
The company on Monday announced the creation of Accelerate, a new initiative to drive growth at scale for the fast-evolving fintech industry, reflecting the company’s ongoing commitment to this sector.
Designed to operate alongside its successful Start Path program, Accelerate will broaden Mastercard’s engagement with the payment fintech community including the next generation of digital banks.
United Kingdom
Funding Circle Sme Income Fund Limited Force Signal Moves Past Key Line (Concordia Review) Rated: AAA
Checking on current RSI levels on shares of Funding Circle Sme Income Fund Limited (FCIF.L), the 14-day RSI is currently standing at 58.31, the 7-day is at 65.97, and the 3-day is resting at 83.22.
Funding Circle Sme Income Fund Limited (FCIF.L) currently has a 14-day Commodity Channel Index (CCI) of 148.41.
Shares of Funding Circle Sme Income Fund Limited (FCIF.L) have a 200-day moving average of 103.52. The 50-day is 104.93, and the 7-day is sitting at 104.82.
Zopa stake boosts TruFin annual results (AltFi News) Rated: AAA
TruFin, the AIM listed fintech lender and payments provider, has released its first set of annual results following on from its public listing back in February. The numbers show a 7.67 per cent uptick in its valuation of its stake in p2p lender Zopa in 2017.
TruFin, which says it used an external company to aid the valuation of Zopa, re-valued its holding upwards by £2.6m to £36.5m over the course of the year. The firm, which was spun out of hedge fund Arrowgrass’ fintech holdings, holds a c.15 per cent stake in Zopa bought by Arrowgrass in 2014 for £15m. TruFin was set up by Henry Kenner, one of the founders of Arrowgrass, who is also its CEO and chairman. The hedge fund itself was launched by a group of Deutsche Bank traders in the wake of the financial crisis, including Kenner.
UK watchdog says automated financial advice falls short (Rueters) Rated: A
Advice doled out online or via smartphone apps, referred to in the industry as “robo advice”, aims to cut costs for customers looking to save or invest. It also seeks to foster innovation and increase competition in financial services.
But the Financial Conduct Authority (FCA) said two reviews of the industry uncovered problems among early entrants.
Exclusive: Former ADS Securities exec Jamieson Blake joins specialty lender Basset and Gold (Leaprate) Rated: B
Following our exclusive report from earlier this month that Jamieson Blake, Head of Client Experience at the FCA regulated London based arm of ADS Securities, had resigned from the company, LeapRate has now learned that Mr. Blake has landed – at specialty lending and retail investment firm Basset and Gold, as Head of Relationship Management.
China
Why Qudian Inc Stock Dropped 16.5% Today (Motley Fool) Rated: AAA
Shares of Qudian (NYSE:QD) closed down 16.5% on Monday after the Chinese online lender announced earnings that fell short of expectations.
Qudian reported “diluted adjusted net income per share” of $0.16 but GAAP diluted net income per share of only $0.15 per share. Whichever yardstick you use, though, these numbers appear to be lower than the $0.17-per-share estimate quoted on Yahoo! Finance. Revenue, on the other hand, came in at $273.7 million, significantly above consensus expectations for $214.6 million.
European Union
European Company Helps Turning Cryptocurrency into Collateral (the Merkle) Rated: AAA
Following a similar model as traditional depository services, DEPO gives lenders the freedom to accept digital assets as loan collateral. The platform also allows borrowers to keep ownership of their digital asset during the entire loan period. The platform also protects future financial gain of the asset for borrowers with its decentralized design.
By employing the DEPO platform, lenders will be able to accept cryptocurrency as collateral for loans. To be protected, lenders can request additional collateral, or a partial sale of the asset should the market become excessively volatile at any time during the loan period.
Matthias Setzer of PayU (Lend Academy) Rated: A
In this podcast you will learn:
- The history of Naspers, the parent company of PayU.
- What PayU does and the markets where it operates.
- Why Matthias decided to leave PayPal after 12 years and move to PayU.
- How PayU approaches going into a new international market.
- The Naspers investment in Chinese giant Tencent and the PayU footprint in China.
- Why the number one country PayU is focused on today is India.
- Why they invested €110 million in Kreditech and how they are leveraging that partnership.
- The point of sale lending product they have launched in India with Kreditech.
- The biggest growth drivers for PayU over the next 12-18 months.
New Insight will change the way you think about data (Instantor Email) Rated: A
Today Instantor, the Swedish fintech company making financial decisions easy, announces Insight. A new product that will transform the way financial organisations assess risk for loan applicants. By using robust machine learning, Insight analyses more than 70 predictive features and insightful patterns in historical banking, and can be used to make better risk and opportunity decisions. Instead of having a risk team spending months testing risk models, Insight ́s intelligent features will build the most optimal risk model using the clients own data and can be up and running within a week.
Bricknode and Lendytech unite under Untie Group banner (Finextra) Rated: B
Untie Group used to be several companies, the largest of which were Bricknode and Lendytech. They had a common founder in Stefan Willebrand and used, at least to a degree, the same self developed software. Also a number of people have gone from one firm to the other over the years.
International
Decentralized Lending Promises Easy And Global Access To Credit, But Is It Too Good To Be True? (Forbes) Rated: AAA
Since the rise of cryptocurrencies, the term “decentralized” seems to be everywhere. Decentralization has been proposed in many industries as a way to heighten transparency and make transactions simpler. One field in particular which has shown great potential for the application of decentralization is money lending. As many might rightly ask, don’t we need banks who are willing to take the financial risk and approve loans? As it turns out, maybe we don’t.
Automation, ‘platformisation’ tipped to take hold in banking (AltFi News) Rated: A
The report, entitled Whose customer are you? The reality of digital banking, shows that 73 per cent of bankers believe retail banking will be at least 80 per cent automated in the next two years. A further 78 per cent see ‘platformisation’ steering the market in the future.
71 per cent of respondents are focusing their digital investment budget on cyber security, up from 34 per cent last year. Yet a mere 17 per cent are thinking about the risks of third-party integrations under Open Banking.
Fin-tech changes the loan process: Meet new lending models (Bankless Times) Rated: A
The new FinTech lending model opens new opportunities to people who were not able to borrow from traditional banks and other financial institutions because of the poor credit history and other factors. Such loans are now available to the new groups of people who need an instant funding, for instance, small business owners, students etc. In particular, entrepreneurs got a chance to get a loan without collateral, which a while ago was a real obstacle for many business owners.
Millennials Choose FinTech
Millenials are the first generation to accept the real advantages of new technologies and ready to use them for their own convenience. When it comes to lending process, millennials no longer wish to visit bank branches personally, stand in lines, deal with unnecessary paperwork and wait for months to get the approval.
End of the Line…
Today we are already witnessing a drastic change in the lending model that existed for centuries. Consumers want to have a more flexible way to lend money but most importantly, they want this process to be quick. The FinTech industry already gave us this opportunity and hopefully, the following changes will be for the better.
Asia
Kieran Arasaratnam to Join Credify Founding Team as CFO (Digital Journal) Rated: B
Credify Inc., a pioneer in decentralised reputation systems, is pleased to announce that Kieran Arasaratnam is joining the founding team as Chief Financial Officer.
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