Thursday May 3 2018, Daily News Digest

10 best states for small business lending

News Comments Today’s main news: Microloans for SMBs are becoming big business. RateSetter offers IFISA transfers. Funding Circle opens IFISA to transfers. Funding Circle SME Income Fund issues more shares. BNP Paribas Asset Management launches SME lending fund. Today’s main analysis: Lendio’s top 10 best states for small business lending. Today’s thought-provoking articles: The missing benefit in employee financial […]

10 best states for small business lending

News Comments

United States

United Kingdom

International

European Union

Other

News Summary

United States

Microloans a glimmer of hope for small businesses in need (USA Today) Rated: AAA

The microloan market has evolved in the last five years, says Antara Dutta, a social entrepreneur and mentor with the Delaware chapter of SCORE, a volunteer network of small business advisers. Many nonprofit organizations, foundations and peer-to-peer lending networks have also entered the microloan market.

One such company is Funding Circle, a San Francisco-based lending platform that connects investors with small business owners.  “Banks have really pulled back from doing small business loans over the past decade,” says Sarina Siddhanti, Funding Circle’s U.S. Head of Commercial. “We fill that gap.”

While Funding Circle awards business loans up to $500,000, they also offer microloans to entrepreneurs who need less.

Lendio Announces Annual List of Top 10 Best States for Small Business Lending (Lendio) Rated: AAA

In honor of National Small Business Week, Lendio, the nation’s leading marketplace for small business loans, today announced its third annual list of top 10 states for small business lending, based on lending data from the Lendio platform, which matches businesses with more than 75 lenders.

Source Lendio; sba.gov

CommonBond’s Latest Study Reveals the Missing Benefit in Employee Financial Wellness (Crowdfund Insider) Rated: AAA

On Tuesday, CommonBond, an online lending platform servicing the student loan market, released the results of one of the most comprehensive employee financial wellness benefits studies to date. According to the lender, the research revealed the extent to which student debt affects employees’ financial wellness, as well as how companies are meeting, or not meeting,  the financial wellness needs of their employees.

Key findings of the study included:
  • Student debt cuts across all age groups, including parents who are taking out loans for their children: Nearly 75% of all workers have taken out loans to fund their own education, while 21 percent of workers expect to take out a loan for a child or other family member’s education in the next five years. 
  • Human resources executives prioritize benefits for employees without student debt: For employees with student debt, student loan repayment is the most-requested financial wellness benefit; however, human resources teams rank student loan repayment as their third priority. 
  • Employees do not think their benefits are as innovative as human resources executives believe: 71% of human resources executives see their benefits offering as innovative, compared with 50 percent of employees. 
  • Student loan benefits attract talent, retain employees, and improve work performance: 78% of employees with current or future student loan debt want their employer to offer this benefit, and 65% of employees over age 55 in these categories want the same.

RealtyMogul Brings Fintech Solutions To Commercial Real Estate Investment (Benzinga) Rated: A

What does your company do? What unique problem does it solve?

RealtyMogul is a unique commercial real estate private markets investing platform that provides discerning investors exclusive access to thoroughly vetted opportunities, rigorous underwriting, and high-touch customer service through licensed investment professionals. We strive to build wealth through sound principles and data insights, serving real people who want a smart alternative investing strategy.

Fannie and Freddie approve thousands of loans with no formal appraisals (The Washington Post) Rated: A

For homeowners and buyers, it’s been a windfall: relief from having to pay for a traditional mortgage appraisal that usually costs between $400 and $600. The savings nationwide to consumers in just the past year alone may total tens of millions of dollars.

Last year, the two largest sources of American mortgage financing — federally backed Fannie Mae and Freddie Mac — began accepting home-purchase loans that carried no formal property appraisal.

Ryan Lundquist, an appraiser in Sacramento, noted that computer programs “cannot smell 20 cats living at the property.”

Pat Turner, a Richmond appraiser, says that, worse yet, the “savings” from Fannie and Freddie may not always flow to buyers. He cited a recent case in his area where a major online lender allegedly charged a buyer $600 on a loan with an appraisal-fee waiver.

 

After ceding a key competitive advantage to fintech companies in recent years, several mass market and regional banks are testing alternative data for use in marketing, pre-screening, and underwriting consumer loan products like credit cards and personal loans, and exploring emerging use cases in fraud prevention and other areas.

While most lender decisions still use traditional sources, such as credit file data managed by the consumer reporting agencies, the potential for alternative data to transform lending is clear. Rent and utility payments, employment information, and behavioral data paint a clearer picture of a consumer’s creditworthiness and could allow lenders to reach underserved populations. In fact, alternative data has allowed Lending Club, a marketplace lender, to extend lower-priced credit to borrowers that would otherwise be classified as subprime, according to the Federal Reserve.

Inside Bank of America’s big plans for small businesses (TearSheet) Rated: A

What about branch transformation on the small business side? How is B of A marrying its physical and digital strategies?
We know in certain pockets of towns and cities you’ll have more business owners coming in and out than in others; in those centers with high traffic of business owners we add more capabilities so we’re there for them and have more people who understand small business.

What’s an example of technology you’re investing in?
Three weeks ago we launched our relationship rewards program, which is our version of the Preferred Rewards, where when you bring more to us — more deposits or lending — you get more benefits. It’s a very straightforward way to bank with us that encompasses lending, merchants and operating accounts. That’s a technology investment in itself because we have to on the back-end tie everything together and understand the full picture of the relationship; it comes from updating our products and solutions in the backend to streamlining the underwriting and fulfillment processes.

 

 

First RealFund Raises $ 500,000 of Preferred Equity for Brooklyn Property Renovation (Citizen Tribune) Rated: B

First RealFund (“FRF”) has raised $500,000 of preferred equity financing for the renovation of a 4-story brownstone in Brooklyn’s Bedford Stuyvesant neighborhood.

Morgan Stanley kicks new tech strategy into gear (American Banker) Rated: B

Morgan Stanley CEO James Gorman has asked Rob Rooney, the investment bank’s technology chief and leader of its international unit, to return to New York to focus solely on the tech part of his job.

“We have enormous, staggering amounts of data for risk management, [anti-money-laundering], regulatory and other purposes,” Rooney said. “The use cases here are enormous. The job in our technology organization is to make sure we build a strategy we can leverage across the firm, otherwise it’s not efficient.”

The bank is increasing its investments in innovation and cybersecurity, he said.

United Kingdom

RateSetter opens IFISA to transfers (Peer2Peer Finace) Rated: AAA

RATESETTER has opened its Innovative Finance ISA (IFISA) to transfers from other providers.

RateSetter will accept full and partial transfers and there is no limit on the number of existing ISAs that can be transferred.

RateSetter introduces bonus scheme (Bridging & Commercial) Rated: B

Investors will receive a £50 bonus if they recommend the platform to a family member or friend who then invests £1,000.

The referred person can also receive a £100 bonus if they keep the £1,000 invested in RateSetter for a year.

Funding Circle opens IFISA to transfers (Peer2Peer Finance) Rated: AAA

FUNDING Circle has opened its Innovative Finance ISA (IFISA) to transfers, meaning that all of the ‘big three’ peer-to-peer lenders now offer this capability.

“Since last November more than £90m has been lent directly to businesses through the Funding Circle ISA, and we’re pleased to see so many of you taking advantage of the opportunity to earn attractive, stable returns tax-free,” the company said on a blog post on its website.

 

6%-yielding Funding Circle fund issues more shares (Citywire) Rated: AAA

The 6% yielding lender to small businesses, plans to sell up to 24.9 million shares it holds in treasury having bought them back when they briefly traded at a discount two years ago.

The shares are being offered to ‘qualified’ experienced investors at  102.2p, which is 2.2% less than the share price at Monday’s close and a 2%-3% premium to their net asset value.

Starling Bank partners with Samsung for mobile payments (AltFiNews) Rated: A

Announced today, digital bank Starling has partnered with Samsung to offer mobile payments method Samsung Pay to all Starling customers, creating the bank’s fourth partnership for making purchases via a mobile phone.

Starling users will now be able to make contactless payments at the point of sale using nothing but their Samsung phone, using iris, fingerprint or PIN recognition to prove their identity.

Nucleus targets start-ups with new type of loan (Peer2Peer Finance) Rated: A

The alternative business finance provider announced the launch of Start-up Finance on Wednesday, which is tailored to help start-ups get their business off the ground.

Young companies can borrow between £25,000 and £20m, with a secured interest-only loan, over a period of up to five years.

High-cost lending provides “a socially valuable function”, says regulator boss Bailey (City A.M.) Rated: A

The boss of the UK’s top financial regulator believes access to controversial high-cost loans is an “important feature” for many Britons to fund everyday living.

Andrew Bailey, the chief executive of the Financial Conduct Authority, today indicated a clampdown on the sector would not be forthcoming.

How to become an IFISA millionaire in 25 years (Peer2Peer Finance) Rated: B

Figures from P2P analyst 4th Way suggest if a lender invests £10,000 each year across several platforms and aims for nine per cent interest after bad debts, they could be a millionaire within two-and-a-half decades.

Rip-off debts soar as rent-to-own, catalogue credit and doorstep lending surge after payday loan crackdown (The Telegraph) Rated: B

Debts from catalogue credit, doorstep lending and rent-to-own have all more than doubled in recent years even as regulators cracked down on payday loans.

Lenders now face a crackdown as the City watchdog wants to make sure high-cost loans are only used by borrowers who can afford the debt and are helped by it.

 

China

Niwodai Seeks Partners for Fintech-driven Expansion into Southeast Asia (PR Newswire) Rated: AAA

Niwodai, one of the largest Chinese P2P lending companies, is said to be seeking a path into Southeast Asia, according to sources. The company is in frequent contact with potential partners, looking to map out a proper route to advancing their business, of which financial technology is the most powerful tool. Considering the challenges that most Chinese fintech companies have faced, proper cooperation with a local partner should be a win-win situation.

European Union

BNP Paribas Asset Management launches SME lending fund (AltFiNews) Rated: AAA

BNP Paribas Asset Management has launched a new SME lending fund for institutional investors.

The BNP Paribas Novo 2018 business loan fund follows on from its Novo 1 fund, launched in 2013. The new fund has the backing of the FF and the CDC and aims to provide new sources of financing to help French medium-sized companies expand.

BNP Paribas Novo 2018 could invest €264m over the next three years, the firm said in a statement.

German Varengold Bank Provides Credit Line to Estateguru (P2P Banking) Rated: B

Estonian property p2p lending marketplace Estateguru announced that it has secured its first institutional investor.

In March 2018, Estateguru signed the firm’s first institutional credit line to be invested in loans originated in the Baltic market with Germany based Varengold Bank AG.

International

New FIS Study Finds Larger U.S. and U.K. Banks Are Vulnerable to Losing Critical Small-Midsized Business Customers (Fintech Finance) Rated: AAA

The study found that more than 80% of surveyed SMB customers in the U.S., and 70% of SMB customers in the U.K., are satisfied with their primary banking providers. However:

  • In the U.S., SMBs report higher satisfaction with services from community banks over larger banks.
  • In the U.K., nearly one in four SMBs – most of which use larger banking providers – are planning to switch banking providers in the next 12 months
  • Common reasons cited by SMBs in both countries for switching banks are uncompetitive fees, dissatisfaction with services/products provided, outdated bank processes, or being declined for a business loan/line of credit.
  • SMBs in both countries report difficulty in obtaining reliable and accurate information from their banks, especially larger institutions, without visiting a physical bank branch.

Growing Adoption of Digital Tools

  • About 60% of SMBs in both countries have increased the number of transactions done digitally over the past year.
  • More than 40% of financial transactions were completed digitally by SMBs in both countries.
  • Acceptance of online, mobile app and person-to-person payments increased 38% over the last year for U.S. SMBs.

 

Banks are treating customers like product developers (TearSheet) Rated: A

Banks’ race to meet the customers “where they are” has taken on a new twist: customers are now product developers — not just end users.

Digital-only challenger banks like Monzo are emphasizing customer involvement to build a human connection with customers — a move others like Tandem, Revolut and Chime are also emulating. Chime, for instance, recently launched a chat feature within its mobile app that lets customers provide real-time feedback, a tool that’s used by around 50,000 users every month, according head of product Zachary Smith.

Three-year-old Monzo, which has 650,000 customers, has been active on various fronts in seeking feedback from customers on products while they’re in development — both through in-person “Testing Tuesdays” at Monzo offices and an exchange of views and polls on its online forums.

Rad Card Great HODL Survey Reveals Average Crypto User 25-34, Male (Bitcoin Exchange Guide) Rated: A

The team at Rad Card, found online at RadLending.com, just completed something called “The Great HODL Survey”.

  • The average cryptocurrency user is a male between the ages of 25 and 34
  • That person holds a bachelor’s degree
  • The average cryptocurrency users “hodls” between $1,000 and $10,000 worth of tokens, but has never used cryptocurrency for payment of goods and services
  • Crypto investors, overall, “prefer not to use their assets in real life as much as business owners”, according to the study, as well as freelancers or service providers that accept cryptocurrencies in exchange for their work, products, or services

Core features of the RAD platform include a P2P lending platform, crypto-secured lending, and a digital credit score. The company will offer its services to miners, small crypto businesses, post-ICO companies, exchanges and traders, and traditional fiat investors, all of whom can benefit from crypto-backed loans.

Fintech and the Sharing Economy (TLE) Rated: B

One of the phenomena this has supported is a surge in partnerships forged online, to provide peer to peer services.

The prediction is that the sharing economy will be worth over $335 billion by 2025. Fintech is pivotal in this, as it’s responsible for developing the accessible and efficient systems to carry out these digital “barter and buy” opportunities.

Peer to peer lending using Fintech also requires less cost to facilitate and therefore provides greater equality of opportunity.

ZPER Embeds Trustonic in New Mobile Wallet for Optimized Security (Blockchain News) Rated: B

Decentralized peer-to-peer (P2P) Lending Platform ZPER is using features from digital security semiconductor group Trustonic in its new mobile cryptocurrency wallet, claiming that it will be the most secure available.

The wallet will also be able to store and exchange multiple cryptocurrencies, thus enabling P2P cross-border value exchanges.

 

Australia/New Zealand

Online lender continues huge loan growth (Australian Broker) Rated: AAA

Neo-lender Wisr Limited saw a 42% growth in its origination of personal loans in the latest financial quarter.

This was the company’s largest quarter in loan originations since Wisr, formerly known as DirectMoney, began in 2014.

Loan originations have continued to grow over the financial year, growing by 20% in the first quarter and by 79% in the second quarter.

The FMA Makes A Guidance Note For Peer – To – Peer Lending Services & Crowdfunding Services (Mondaq) Rated: A

The Financial Markets Authority (FMA), New Zealand’s regulator for financial services, has released a guidance note to licensed peer-to-peer (P2P) lending services, licensed crowdfunding services for fair dealing in advertising and communicating offers of financial products or services.

Who is this guidance for?

  • The FMA addressed the guidance note to P2P lending services and crowdfunding services, but it is useful for anyone who is promoting or advising others about these services (i.e marketing teams, investment bankers, lawyers).
  • The fair dealing expectations stretch beyond New Zealand’s borders, so they apply to people overseas. Anyone who acts in relation to, or makes an offer of financial products or services in New Zealand should take note.
  • The guidance note is applicable to any media channel that businesses use to communicate and advertise their financial products and services (be it snail-mail or social media).

 

 

Bank names new group executive (Mortgage Business) Rated: B

Online lender ME has appointed Craig Ralston as group executive of customer banking, effective as of 1 May. He will be responsible for ME’s product and service delivery, with a focus on improving the design, simplicity and fairness of the bank’s offerings.

Mr Ralston joined ME in February 2015 as head of strategy to enhance the bank’s strategic and business planning cycle.

India

Fintech Startup OpenTap Raises ₹3 Crore from HNIs (IndianWeb2) Rated: AAA

Chennai-based OpenTap, a fintech startup focusing on the alternate lending segment, has raised about ₹3 crore funding from HNIs (high networth individuals). The capital raised will be used by the startup to strengthen its technology infrastructure and widen the reach of its financial services network across the country. The startup had earlier raised undisclosed amount in seed funding, in May 2015.

India Dealbook: MyLoanCare raise funding (Deal Steet Asia) Rated: B

Fintech startup MyLoanCare raises $975k in Series A round Online loans marketplace MyLoanCare, operated by My Finance Care Advisors Pvt. Ltd, has raised Rs 6.5 crore ($975,000) from Ncubate Capital Partners, the venture capital arm of Gurugram-based SAR Group.

Asia

Startup bags funds from Singapore ex-minister to get ultra-wealthy into crowdlending (Tech in Asia) Rated: AAA

Singapore-based Helicap is a new fintech platform that aims to bring a fund management angle in the peer-to-peer (P2P) lending space. To make this happen, it has raised US$1.5 million in seed funding.

The round was led by Teo Ser Luck, the former Minister of State for Manpower who last year decided to trade politics for the startup sector. Fintech company Nufin Data, where Teo serves as chairman, also invested.

Latin America

Neon Raises $ 22M in Series A Funding (Finsmes) Rated: AAA

Neon, a São Paulo, Brazil-based fully-digital Brazilian bank, raised $22m in Series A funding.

Propel Venture Partners, Monashees, Quona Capital, Omidyar Network, Tera, and Yellow Ventures participated in the funding round. As part of the investment agreement, Neon Pagamentos SA transferred its controlling interest to a holding company in the United Kingdom. In addition, as part of the new round, Jay Reinemann of Propel Venture Partners, and Marcelo Lima of Monashees, are joining Neon’s board of directors.

The company intends to use the funds for product expansion, investment in technology and innovation on customer experience.

Canada

On Wednesday, Lending Loop, a peer-to-peer online lending platform for small-business loans, announced a pilot project in partnership with Ontario that will provide $3-million of loans over the next two years. The government will boost Lending Loop’s loans by 10 per cent, which will help fund more than $30-million of loans to businesses across Ontario. The government will receive a full re-payment of the loan plus interest at the end of the loan terms.

Authors:

George Popescu
Allen Taylor

Thursday April 5 2018, Daily News Digest

Thursday April 5 2018, Daily News Digest

News Comments Today’s main news: KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2018-2. dv01’s Q1 securitization volume hits $2.58B. Revolut releases open API. RainFin acquires stake in 4AX. Today’s main analysis: International P2P lending volumes for March 2018. Today’s thought-provoking articles: Trends on millennials and money. A tale of two fintech sectors. Amazon could become the third largest […]

Thursday April 5 2018, Daily News Digest

News Comments

United States

United Kingdom

European Union

International

India

Africa

News Summary

United States

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2018-2 (Business Wire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to four classes of notes issued by SoFi Consumer Loan Program 2018-2 (“SCLP 2018-2”). This is a $544.6 million consumer loan ABS transaction.

This transaction represents SoFi Lending Corp.’s (“SoFi” or the “Company”) 14th rated securitization collateralized by a portfolio of unsecured consumer loans. SoFi currently originates personal loans through its state licenses or complies with certain requirements where a state lending license is not required.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2018-2

Class Preliminary Rating Initial Class Principal
A-1 AA (sf) $277,700,000
A-2 AA (sf) $127,900,000
B A (sf) $75,000,000
C BBB (sf) $64,000,000

DV01’S Q1 SECURITIZATION VOLUME TOPS $ 2.58B, ENCOMPASSING NINE DEALS FROM SIX ORIGINATORS (DV01), Rated: AAA

dv01 closed out Q1 with nine new securitizations, totaling $2.58 billion in total issuance. This represents a 141% increase from last year’s Q1 volume, which totaled $1.07 billion.

Deals were originated by six different lenders, including Prosper, Upgrade, LendingClub, CommmonBond, SoFi, and Marlette. Three of the deals (UPT I 2018-1, UPT I 2018-2, and CLUBC 2018-2) were trust certificates. dv01 was loan data agent on eight of the nine deals; loan level data and reporting tools for all the deals are accessible through dv01’s Securitizations portal.

Millennials and Money: 30+ Trends Financial Marketers Need to Know (The Financial Brand), Rated: AAA

Here are over 30 facts, statistics and insights about Millennials banks and credit unions need to know to serve this essential market segment more effectively.

  •  Millennials want to learn how to feel financially empowered. Nearly three quarters say they feel confident in their ability to make financial decisions, but they still want to learn more. 92% believe that being educated on personal finances is important. (Source: CSpace)
  • Millennials are so serious about their financial health that more than a third (34%) have a written financial plan, much higher than the 21% of Gen X and 18% of Baby Boomers who have done the same. However, 78% rarely or never make spreadsheets for their finances, and 35% say they’d rather vomit than make a spreadsheet to help them manage their finances. (Sources: Schwab, Varo Money)
  • Maybe Millennials don’t need help from real human beings. With 85% saying artificial intelligence could help them better manage their finances, banks and credit unions should use digital tools and AI to deliver the financial insights they crave. Nearly half of Millennials say they want their bank to be able to anticipate their financial needs and offer them timely advice (Sources: Varo Money, Segmint).
  • Millennials’ top savings priorities are emergency funds (64%), retirement (49%), and buying a house (33%). Nearly half already have $15,000 or more in savings, and 16% have a whopping $100,000 or more in savings. (Source: Bank of America)
  • When it comes to saving, Millennials still have significant headwinds: three in four college graduates today will have a heavy student debt load. (Source: ABA)
  • The average graduate from the university class of 2016 has $37,172 in student loan debt, up 6% from the prior year. (Source: Student Loan Hero)
  • Student loan debt is such a burden that 70% of Millennials say that financial circumstances were a key consideration in deciding whether or not to go to college. (Source: Harvard)

Publicly Listed Fintech Companies – a Tale of Two Sectors (Lend Academy), Rated: AAA

(KFTX) is a good place to start.

Since inception in June 2016, the index has returned 46%, outperforming the broad market S&P 500 by a whopping 24%, and even the tech-heavy NASDAQ by a meaningful 9%.

Source: Lend Academy

Amazon could become the third-biggest US bank if it wants to: Bain study (CNBC), Rated: AAA

Amazon could rival the nation’s big banks in as few as five years, capitalizing off its digital prowess and massive consumer base, according to a Bain & Company report.

Pushing customers toward a co-branded banking account also allows Amazon to cut down on transaction costs, Bain said.

Amazon could – according to Bain calculations – avoid more than $250,000,000 in credit card interchange fees every year if finds a bank willing to partner on checking accounts.

Source: Bain & Company

Why Amazon won’t enter the advice market (Investment News), Rated: A

Despite what many see as the inevitability of tech giants entering the financial advice business, the economics of doing so — as well as the intensely regulated nature of the business — make their entry unlikely, according to a new report from Cerulli.

The Boston-based research firm says that “companies like Facebook, Amazon, Apple, Netflix and Google (FAANGs) have the tools and data to excel, but face significant obstacles that will likely preclude their entry,”

One major obstacle, Cerulli says, is the relatively small size of the market. The firm estimates that the “digital advice opportunity segment” represents only about 12% of investors, or a segment “that would be difficult to scale to be of strategic interest to the world’s largest technology providers.”

The Credit Junction Secures $ 150 Million Credit Facility from MidCap Financial (Business Wire), Rated: A

The Credit Junction, the first data-driven, asset-based lender for small and mid-sized businesses, has secured a $150 million credit facility from MidCap Financial, a leading capital provider to the middle market specialty finance industry. The facility strengthens and expands The Credit Junction’s ability to deliver comprehensive capital solutions to businesses across the United States.

The Credit Junction combines traditional credit metrics with data intelligence and partners with business owners to deliver asset-based financing alternatives unique to the needs of each borrower. Since its launch in May 2015, The Credit Junction has helped businesses across the country achieve their growth objectives while supporting job creation and development in the communities they serve.

Real Estate Investment Platform, Sharestates, Changes the Game with User Experience (UX) (PR Newswire), Rated: A

Sharestates, an online real estate investment platform, announced today the launch of new online user portals that fully optimize the real estate investment process from beginning to end, providing investors with the first ever UX solutions in the real estate investment industry.

Sharestates’ unique solution was designed by the company’s development team alongside CEO and Co-Founder Allen Shayanfekr with UX and functionality in mind – now offering investors a streamlined “one stop shop” in real estate financing.

Banking Disruptors: Peer-to-Peer Lending and Payments (The Motley Fool), Rated: A

Peer-to-peer lending platforms such as Prosper and LendingClub (NYSE:LC) have changed the way people can borrow money, and apps such as Venmo and Zelle have made it easier and cheaper to send money.

In this segment from Industry Focus: Financials, analyst Michael Douglass and Motley Fool contributor Matt Frankel talk about the ways that technology is disrupting big banks, and what this trend could mean to the banking industry.

How Affirm Personal Loans Can Help You Finance Smaller Purchases (Student Loan Hero), Rated: A

The average student loan payment is $351. Between such a high monthly payment and rent, finding the money to furnish your home or buy a new computer can seem daunting.

If approved, you can now shop. When you’re ready to make a purchase, you can enter the total from your online shopping cart on Affirm’s site. You then choose an amount between $50 and $10,000. You’ll be provided virtual card information to complete the purchase. With some partner retailers, you might select Affirm at checkout instead.

LendingTree Launches Credit Analyzer, a Free Credit and Debt Analysis Tool (Lending Tree), Rated: A

LendingTree, the nation’s leading online loan marketplace, today announced the launch of its Credit Analyzer, a free credit and debt analyzer tool, which was created to help consumers avoid common credit mistakes, improve debt management skills and find the right financial products for their needs.

Credit Analyzer is a free tool that provides a deeper, instant analysis of consumers’ credit and debt situations and offers personalized recommendations based on individuals’ financial goals. The user experience is designed to make it easier for consumers to understand the most important factors that impact credit scores.

 

What will the financial services industry look like in five years? (Lend Academy), Rated: A

This article briefly touches on many of the themes being explored at our LendIt Fintech USA 2018 conference, which is now just days away:

Audits Will Go the Way of the Dodo Bird

The protocol of trust is here to stay, and it’s going to disrupt everything.

While the blockchain has not rendered audits unnecessary yet, I believe we’ll see it happen within the next five years.

Smart Contracts Are In, Long, Paper-Intensive Financial Processes Are Out

As I write this, Lending Robot is raising a private round of growth capital. The closing process, called “papering” for very obvious reasons, is just as onerous and Microsoft Word-oriented as I remember it back in the early 2000s when I was a young VC.

Fintech is Everywhere

Fintechs are enhancing the customer experience along four axes: choice, price, convenience, and predictability. They are meeting the needs of educated, aware, demanding consumers and they are attacking traditional financial institutions at every angle.

 

Five Things Fintech Startups Must Do In 2018 To Get Noticed, Adopted And Funded (Forbes), Rated: A

Here are five things the winners nailed that newcomers must do to compete:

  1. Build a seamless digital customer experience (CX) customized to each set of eyeballs, across platforms — plus, make financial services ubiquitous, instead of an unfortunate necessity.
  2. Streamline their lead generation and nurturing through automation, machine learning and AI, plus intelligent CRM throughout the customer journey. This powers faster, more accurate processes like loan origination, mortgage underwriting and credit application decisions, among others.
  3. Instead of being scared of increased regulation, embrace it as a driver of innovation.
  4. Upend an established Wall Street business model both by undercutting fees and over-delivering on performance.
  5. Find novel, values-driven ways to increase millennial participation in financial services.

Financing Small Businesses- 6 Tips For Finding An Online Loan (Bizztor), Rated: A

Online business loans are a popular option for financing small businesses. Over the years more small business owners have been turning to online lenders as banks have cut down on loans to smaller businesses.

With the assistance of technology and algorithm, online lenders are able to assess conventional credit standards like cash flow and personal credit score.

DriveWealth Raises $ 21M in Series B Funding (Finsmes), Rated: A

DriveWealth Holdings, Inc., a Chatam, N.J.-based fintech company, closed a $21m Series B funding.

The round was led by Raptor Group Holdings, SBI Holdings, Inc, and Point72 Ventures, LLC, as weel as existing investors Route 66 Ventures.

The company intends to use the funds to develop its technologies and scale its business.

Mosaic Readies New Solar Loan Deal (Global Capital), Rated: A

The San Diego-based company filed documents with the Securities and Exchange Commission on Monday for Mosaic Solar Loans 2018-1. The ABS-15G forms name Deutsche Bank and BNP Paribas as banks on the deal.

The transaction, Mosaic Solar Loans 2017-2, was priced at 185bp over interpolated swaps for the senior class, yielding 3.854%. Energy related ABS such as solar and Property Assessed Clean Energy (Pace) deals were heavily subscribed throughout last year, with strong issuance of residential Pace bonds and the first ever issuance of commercial Pace ABS from Greenworks Lending.

Laurel Road And Darien Rowayton Bank Officially Rebrand Under Integrated Laurel Road Name (PR Newswire), Rated: B

Laurel Road, an online lender and FDIC-insured bank, officially announced today that Darien Rowayton Bank and its national online lending division will rebrand under the integrated national Laurel Road brand. The new, unified Laurel Road brand represents a deep understanding of its customer base, best-in-class technology and industry-leading compliance and risk management.

Bankrupt Payday Lender Can’t Move Pa. AG’s Suit To Texas (Law 360), Rated: B

Think Finance LLC, a financial technology firm that critics say uses Native American tribes to skirt payday lending laws, failed to convince a Pennsylvania federal judge on Tuesday to move an action brought by the state’s attorney general to Texas, where it has filed for bankruptcy.

The company has been hit with lawsuits over its alleged role in several “rent-a-tribe” schemes, where a high-interest lender affiliates itself with a Native American tribe to shield itself from legal challenges.

Sarasota-Manatee ranks last for millennials buying homes (Sarasota Herald-Tribune), Rated: B

Millennials rank as the key target in the economic development world setting sights on future prosperity. A new study casts a pall over efforts to build the Sarasota and Manatee population of this prized demographic. Out of the largest 100 U.S. metropolitan statistical areas in the country, Sarasota-Manatee ranked dead last among cities favored by millennial homebuyers.

The study, conducted by LendingTree, focused on the percentages of all loan requests to the online loan marketplace that came from millennials. That figure for Sarasota fell far from top-ranked Des Moines, Iowa — 17.9 percent versus 42.4 percent. Fort Myers ranked just above Sarasota, with 19.8 percent.

The Online Lending Policy Institute (OLPI) Appoints Deputy Director (Lendit), Rated: B

Robert J. (Bob) Mullenbach, CRCM, Managing Director – Compliance Division Deputy at ProBank Austin – has been appointed as the Online Lending Policy Institute’s (OLPI) new Deputy Director. Mr. Mullenbach brings 25 years of regulatory compliance experience in billion-dollar financial institutions, regional and community banks, fintech’s, and leading consulting firms. In his current position, Bob audits clients on the myriad of regulatory requirements associated with consumer/commercial lending, bank secrecy act/anti-money laundering, privacy, and non-deposit investment products.

Microloans offer needy a better alternative (The Columbus Dispatch), Rated: B

Central Ohio chapters of the St. Vincent dePaul Society, an international charity run by Roman Catholic volunteers, give needy folks a better option through the society’s microloan program. Information is available through the organization’s website at svdpcolumbus.org.

Anyone of any faith who needs up to $500 for car repairs, school, home repairs or medical bills, can apply for a quick loan with a low interest rate and 12 to 15 months to pay it off.

Contrast that with the typical payday-loan operation, which loans a couple-hundred dollars and demands payment in two weeks. Many borrowers who are strapped enough to go to such a lender in the first place can’t pay it back that quickly. This leads to loans on top of loans, with tacked-on fees that can lead to an effective interest rate of nearly 600 percent.

SunTrust teams with fintech to offer loans for HVAC upgrades (American Banker), Rated: B

SunTrust Banks in Atlanta is teaming up with another fintech upstart to expand its reach in consumer lending.

The $202 billion-asset company said Wednesday that it has struck a partnership with the online lender Microf to offer point-of-sale loans to homeowners looking to replace aging residential heating, ventilation and air conditioning systems.

SunTrust will hold the loans on its books and a pay a fee to Microf for the referrals. Microf, based in Albany, Ga., offers the loans through its nationwide network of HVAC contractors.

United Kingdom

Revolut unleashes open API to all customers (Fintech Futures), Rated: AAA

APIs and open banking are hotter than a freshly tarmacked road in summer, and Revolut joins the mad-for-it crowd.

On its blog, the bank, which was launched in mid-2015 and offers a money transfer app, says account owners can generate sandbox and production keys, and set whitelisted IPs as an “extra layer of security”.

Away from these API days, the firm adds that over the last few months it’s been making updates to its business accounts.

New fintech fund could boost P2P sector (Peer2Peer Finance), Rated: A

At a time when investment trusts such as Victory Park Capital Specialty Lending have signalled a shift away from P2P opportunities, Augmentum Fintech’s investment adviser has hinted that P2P lenders could be included in the portfolio.

Augmentum Fintech was launched by Augmentum Capital, a venture capital (VC) firm backed by Lord Rothschild’s RIT Capital Partners, last month. The VC firm already had a 7.4 per cent holding in P2P giant Zopa worth £18.5m that has been transferred into the investment company portfolio and its founder Tim Levene, who is acting as investment adviser to Augmentum Fintech, said that the firm is well geared to the P2P sector.

FCA reveals it intervened in Collateral administration to protect investors (Peer2Peer Finance News) Rated: A

THE FINANCIAL Conduct Authority (FCA) has revealed that it intervened in the administration of Collateral because the peer-to-peer lender failed to seek its approval when it appointed an insolvency practitioner.

Wigan-based Refresh Recovery was selected by Collateral when the company shut down in February but it was revealed on Tuesday that the City watchdog was looking to appoint a different administrator.

“The Collateral companies were required to obtain the approval of the FCA when appointing an administrator,” the FCA said in a statement on Wednesday.

ISA countdown: The latest IFISAs on the market (Peer2Peer Finance News), Rated: A

March saw the introduction of tax wrappers from peer-to-peer property platforms The House Crowd and Safe as Houses, while EasyMoney, part of Sir Stelios Haji-Ioannou’s easy family of brands, launched its second IFISA offering.

Safe as Houses

The Safe As Houses ISA, which invests in loans made to Safe as Houses Group to develop, regenerate and sell on distressed properties, offers investors a return of six per cent.

The IFISA has a five-year term and requires a minimum investment of £5,000.

The House Crowd

The House Crowd’s IFISA invests in secured P2P loans and property development investments and offers a target return of seven per cent.

The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio.

Investors will get a fixed return paid in twice a year in October and April.

EasyMoney

The latest IFISA to hit the market before the deadline came from EasyMoney, offering target returns of 7.28 per cent. This eclipses the 4.03 per cent returns offered by its first product that launched in February.

The P2P lending platform said its new ‘balanced’ IFISA allows individuals to invest in a broader range of property-backed loans, limited to 75 per cent loan-to-value (LTV).

MINOR INVESTOR: An Innovative Finance Isa with a 7% rate is a tempting idea but tread carefully in the investing Wild West (This is Money), Rated: A

Only the peer to peer lending element can be included in an innovative Isa, not the equity version where investors take a stake in a company.

Obviously, innovative Isas don’t qualify for the savings element of the Financial Services Compensation Scheme that protects up to £85,000 per licensed bank.

Crucially, however, neither do they get the FSCS investing element that covers up to £50,000 in case your investing platform goes bust and hasn’t done what it is meant to with your money.

European Union

Robo advisors and the Data Revolution (GDPR) (AltFiNews), Rated: AAA

With just a month to go until the General Data Protection Regulation (GDPR) is implemented throughout Europe in May. We look at how the new regulatory regime will affect the nascent Digital Advice industry. Some of the upcoming regulatory changes issued from the EU and its commissioners should be positive for fintech asset managers.

With a clear focus on transparency, robo-advisors should look forward to the new era of information portability and openness.

The digital advice sector has from inception attempted to gain a competitive edge with clear transparent product engineering and pricing, but it won’t all be plain sailing and there may be headwinds ahead.

BANCO BNI EUROPA grows significantly in 2017 and attracts equity investor (Fintech Finance), Rated: A

2017 was once again characterized by the significant growth of Banco BNI Europa’s activity, increasing 41% in assets (from € 362M in 2016 to € 509M in 2017), 16% in customer deposits (from € 262M in 2016 to € 305M in 2017) and 379% in banking income (€ 2,8M in 2016 to € 13,2M in 2017). 

Net income reached € 2.3M, increasing regulatory capital to € 23.3M and the solvency ratio comfortably above the statutory limit at 13%.

International

International P2P Lending Volumes March 2018 (P2P Banking), Rated: AAA

Milestones achieved this month (overall volume since launch):

  • Landbay reached 100M GBP
  • Estateguru reached 50M EUR
  • Linked Finance reached 50M EUR
Source P2P Banking

Banking at a Tipping Point as Fintech Drives Change (Cash Lady News), Rated: AAA

According to Citigroup consumer banking currently generates around $870bn in revenues across Europe and North America, with digital innovators accounting for just 5% of that total. But if the report’s predictions are correct, by 2023, disruption by fintech companies will account for 17% of a total earnings pot of $1.200bn

Follow the Money

CitiGroup cites figures showing that global investment has risen from around $0.5bn in 2019 to just under $20bn today. And most of that investment – Citigroup puts it at 70% is focused on the key areas of personal and SME banking.

Read the full report here.

ROSCAcoin: A Self-Regulating, Autonomous and Decentralized Financial Platform for the Unbanked (BTC Manager), Rated: A

ROSCAcoin is a new decentralised autonomous and self-regulating platform built on the Ethereum blockchain. The project aims to develop an innovative financial infrastructure that allows creating solutions for people with little or no access to financial services. ROSCAcoin is set upon an ancient model of borrowing very popular in third world countries.

ROSCA, or Rotating and Saving Credit Association, is defined by a method of borrowing where a group of individuals agree to cooperate for saving and borrowing purposes within a pre-established period; is also a form of peer-to-peer banking and peer-to-peer lending. ROSCAcoin strives to introduce this method using the blockchain technology.

The platform is powered by its own currency RCA, which will be the engine of the whole ecosystem. By using smart contracts, ROSCAcoin is trying to build the ultimate financial solution for the unbanked.

“Stars are Aligned” for an Higher US Dollar Against the Swiss Franc (PoundSterling Live), Rated: B

The Dollar has risen 4.4% versus the Swiss Franc since mid-February and could be about to accelarate the move suggest analysts; this despite the sizeable global stock market sell-off which would normally be expected to support the safe-haven Franc.

Safe-haven currencies usually strengthen in times of fear, such as the present, however this does not appear to be the case with USD/CHF which has risen due to the USD outperforming CHF – not the other way round.

White Oak Signs Agreement to Acquire LDF Group (Globe Newswire), Rated: B

White Oak Global Advisors, LLC on behalf of its institutional clients (collectively “White Oak” or the “Company”), announced today that White Oak has agreed to expand its asset-based lending platform to serve clients in the U.K. and Europe through the acquisition of LDF Group (“LDF”), a U.K.-based finance company providing asset finance, business loans, commercial mortgages and education leases to small and middle-market companies.  Established in 1986, LDF is an industry leader and one of the largest independent finance providers for small businesses in the U.K.

India

Faircent brings Shalabh Gupta on-board as national sales head – lending (The Siasat Daily), Rated: A

Leading Peer-to-peer (P2P) lending company Faircent on Thursday announced that the company has hired Shalabh Gupta as national sales head – lending.

As an industry veteran with over 17 years of extensive sales experience with brands like the Times Group, Reliance Capital, HDFC Bank, and ITC Limited, Shalabh will play a crucial role in furthering the company’s impressive growth plans and vision as a part of its leadership team.

Aadhaar-Based EKYC Limitations Cause Trouble For Fintech Startups (Ink 42), Rated: AAA

Since the Supreme Court extended the deadline for linking of Aadhaar to host of services, the fintech segment has been riddled with burdens of limited Aadhaar-based eKYC. The companies have been unable to access Aadhaar database for verification of their customers.

Impact Of Aadhaar KYC On Fintech Startups

According to reports, fintech startups across the insurance, lending and broking sectors are being denied access to authentication agencies for eKYC to verify customer antecedents on the Aadhaar database amidst rising concern over data privacy.

UIDAI revokes e-KYC services for some e-wallets, online lenders (The Times Of India), Rated: A

In a move that seems to have left fintech players scrambling, the Unique Identification Authority of India (UIDAI) revoked on Tuesday their access to a dozen agencies that provide e-KYC verification and authentication services. Some of these agencies – KUAs (e-KYC user agencies) and AUAs (authorised user agencies) – will no longer be able to provide e-KYC verification to onboard new customers or authenticate financial transactions affecting e-wallets, online lenders, NFBCs and smaller fintech players.

Africa

RainFin acquires stake in 4AX (Business Tech), Rated: AAA

Fintech company RainFin has announced the conclusion of a transaction with 4 Africa Exchange Proprietary Limited (4AX), which will see the company sell to 4AX its corporate debt marketplace, in exchange for a strategic shareholding in 4AX.

RainFin’s credit marketplace technology has been utilised by companies to raise debt funding from both tradition and non-traditional sources since its formation in 2002.

Accra, Ghana to Host 2018 Startupbootcamp Africa (Tech in Africa), Rated: B

Accra, Ghana’s capital city will host the forthcoming Startupbootcamp (SBC) Africa Accelerator program. The SBC sponsors include the Old Mutual, BNP Paribas, RCS, PwC, and Nedbank. During the event, startups present to the panelists for about two hours.

Authors:

George Popescu
Allen Taylor

Microfinancing The Underbanked In China

CashBUS microfinance

China has more than 600 million people who don’t have credit scores because they aren’t easily obtained. If they could get a FICO score, it would be equivalent to 700 or less, and that adds to the difficulty of obtaining credit or loans from traditional sources. Most of these people don’t need a lot of […]

CashBUS microfinance

China has more than 600 million people who don’t have credit scores because they aren’t easily obtained. If they could get a FICO score, it would be equivalent to 700 or less, and that adds to the difficulty of obtaining credit or loans from traditional sources. Most of these people don’t need a lot of money, just a small loan to cover a gap between paychecks. They also need a way to build the equivalent of a credit history and don’t need abusive interest rates that keep them in financial bondage.

Yang Tang founded CashBUS in 2014, in Shanghai, to provide small short-term micro and installment loans to fill this need. After 15 years of entrepreneurship in Beijing, researching Wonga in the UK, and visiting LendIt in the US, Tang realized high tech and big data could be used to do credit checks, so he built CashBUS.

“If you provide a microcash loan to a user,” Tang said, “you have to know they are going to pay it back. In China, they don’t have credit histories, so they are blank. We ask the user to give us six months of telecom records. The telecom records have customer service records and more data. With authorization, CashBUS can see the record and do a credit check by looking at who you call. This telecredit can be used to calculate risk.”

By allowing access to data like phone records, the consumer is proving reliability. Further authorization of ecommerce data like transactions at JD Finance (China’s version of Amazon) shows purchase records. Other authorization allows viewing of a 12-month record on Alipay or job history.

“If the job changes a lot, maybe they are a higher risk,” Tang said. “It’s a massive challenge to calculate because the loan is very small, the equivalent of $100 US dollars for one week at $5 interest. There are millions of borrowers, some younger than 13. If a person’s telecom budget is $100 or $150, I can guess his income.”

CashBUS, the first microcash lender in China, sees less than 5% default on their microloans.

“In China, the data is very good, but in the UK, you cannot have all that data,” Tang said. “In the UK and US, they have a FICO-like score.”

CashBUS’s risk calculations take these cultural differences in culture. Loans comes from the company’s $13 million dollar venture capital and is paid back quickly because they are short-term.

CashBUS delivers its service through WeChat. There is no need to download an app. Tang anticipates 5% of the Chinese population, about 17 million users, will use his service.  “Other companies clone CashBUS,” he said.  “Borrowers are normal people: Servers, drivers, cooks, and sailors — normal people with an average salary, and they need only a small loan before payday. The foundation is data because, if you have data, you can calculate who will probably not pay you back.”

In the Chinese market, Tang said, cash loans should be small, with a fee of less than 1%. CashBUS currently charges .7% and the life of the loan is only one or two weeks.

“Payback should have a cap and not grow,” Tang said. “This is very important. It should be friendly, otherwise we do harm to the user.”

In China, a lot of people think microcash lending is high interest lending, but it’s not. Short-term loans must have a higher APR to encourage Fintech industry growth, Tang said.

In the future, Tang would like to get into insurtech since it also requires similar calculations that revolve around being consumer-friendly and responsible. He said that talent and partnership are important to building a sustainable lending business. CashBUS has grown to 1.5 million users and has the goal of creating a good environment for the industry while protecting the user.

Author:

Written by Nicki Jacoby.

Thursday April 20 2017, Daily News Digest

real estate technology

News Comments Today’s main news: California SC finds arbitration agreement waiver unenforceable. BondMason first P2P provider to launch SIPP. China’s internet finance thrives as fraud fades. Marvelstone plans robo-advisor for family offices. Today’s main analysis: Real estate tech deals tick up. Today’s thought-provoking articles: 5 areas of fintech attracting investment. UK still fintech unicorn capital of Europe. Millennials favor search […]

real estate technology

News Comments

United States

United Kingdom

European Union

Australia

China

APAC

News Summary

United States

California Supreme Court Finds Arbitration Agreement Waiver of ‘Public Right’ Unenforceable (JD Supra), Rated: AAA

On April 6, the California Supreme Court issued a unanimous opinion in McGill v. Citibank, finding that a pre-dispute arbitration agreement was unenforceable to the extent it required the plaintiff to waive her right to seek public injunctive relief. According to the court, the right to pursue a public injunction constitutes an “unwaivable public right” under California law. Therefore, “a provision in any contract ― even a contract that has no arbitration provision ― that purports to waive, in all fora, the statutory right to seek public injunctive relief . . . is invalid and unenforceable under California law.”

The California court further explained that its partial unenforceability finding is consistent with the U.S. Supreme Court’s decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985). In that case, the Court stated that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitrable, rather than a judicial forum.”

The court also acknowledged, but found no reason to address, the plaintiff’s related claim based on what is known under California law as the “Broughton-Cruz” rule, asserting that a request for a public injunction cannot be decided in arbitration. Finally, the decision remanded the case to the California Court of Appeals to consider ― if either party should raise the issue ― the question of whether the rest of the arbitration agreement remains enforceable in light of language contained in the most recent version of the underlying account agreement stating that, “if any portion of the arbitration provision is deemed invalid or unenforceable, the entire arbitration provision shall not remain in force.”

Pepper Points

  • The decision of the California Supreme Court in McGill v. Citibank will likely be appealed.
  • In light of this decision, providers of consumer products and services should review their existing arbitration agreements to determine whether the consumer’s ability to pursue a public injunction or other “public rights” is completely foreclosed.
  • McGill v. Citibank also highlights the risks of including language in an arbitration agreement (or in any contract) stating that the agreement will be invalid if any portion of the agreement is deemed invalid or unenforceable. Given the impossibility of predicting how courts may interpret even well-settled questions of law, standard severability language is always preferable unless different language is specifically mandated.

Five areas of fintech that are attracting investment (Financial Times), Rated: AAA

At the same time, some of the steam has come out of the sector. Overall investment and merger and acquisition activity in fintech almost halved from a record high of $46.7bn in 2015 to only $24.7bn last year, according to KPMG.

Another negative factor was the governance scandal last year at Lending Club, the biggest online lender in the US, combined with disappointing performances by some of its rivals, which turned investors off peer-to-peer lending.

China

Total fintech investment in Asia inched up to a new record of $8.6bn last year, although the number of deals fell by more than 8 per cent. More than half the region’s total fintech investment came from one deal: Ant Financial’s $4.5bn funding round.

Artificial intelligence

The launch of voice-activated assistants such as Amazon Alexa and Google Voice has opened up possibilities for making online banking easier for customers. Banks such as Capital One have already latched on to this trend.

Cyber security

Cyber security shot to the top of the boardroom agenda for banks after one of the biggest bank robberies in history was carried out by cyber thieves on the Bangladesh central bank via the Swift payments system in February 2016. The crooks made off with $81m that was on deposit at the US Federal Reserve.

Blockchain

Most big financial groups remain convinced of the potential for blockchain to revolutionise parts of their industry and several central banks are examining the potential for using the technology to create digital currencies. Venture capital investment in blockchain companies rose by a fifth to $544m last year, according to KPMG.

Insurtech

The insurance industry has been slower than other areas of finance to wake up to the digital disruption at its door. But recently start-ups such as So-sure, Friendsurance, Lemonade, Guevara and Brolly have emerged with plans to transform the sector. Venture capital investment in insurance technology companies doubled last year to almost $1.2bn, according to KPMG.

Real Estate Tech Deals Tick Up, But Still Well Below Peak (CB Insights), Rated: AAA

2016 was a banner year for real estate tech with over $2.6B in funding to the category across 277 deals. At the current run rate, 2017 could very well reach another consecutive funding high, even as deals are on track to come in slightly below last year’s total.

So far this year, real estate tech companies have received $733M across 61 deals.  At the current run-rate investment activity is on track to reach $2.9B invested across 247 deals.

On a quarterly basis, deals have materially declined since Q3’16.

Funding, on the other hand, has increased in each of the last three quarters and Q1’17 received the second-largest quarterly funding total ever, behind Q2’16.

Why I Don’t Believe in the Hybrid Advice Model (Lend Academy), Rated: A

On paper, it looks pretty good: let the robot do the simpler stuff, like a modern-portfolio-theory allocation between a few ETFs, and have a human being intervene to provide more sophisticated and personalized advice.

In practice, I think it’s nonsense. If you believe the market is truly efficient, then there’s no point in using an advisor, robot or human. Just invest in a broad market ETF and be done with it (except for tax harvesting).

If you think the market is efficient-ish, then low cost optimization is the solution. Go robot. If you think you need an active manager, you should read the trove of statistical analysis that demonstrate you’re simply paying for someone’s yacht. Indexes beat stockpickers [92% of time]…

It does make sense for robo-advisors to move to the hybrid model, since it allows them to differentiate and de-commoditize their service, but for their clients, not so much.

Machine learning algorithms have become so good in the last 10 years, that any number-crunching and quantitative decisions a smart but junior employee can do, the machine will do better, faster, and cheaper.

Wealthfront Now Offers Securities-Based Lending (Financial Advisor IQ), Rated: A

As its first move into lending, robo-advice provider Wealthfront has revealed it will let clients borrow money against their investments, Reuters reports.

Along with robo rival Betterment, the robo-advisor has increased competition in the wealth management space against the likes of wirehouses Merrill Lynch and Morgan Stanley, brokerages like Charles Schwab and even fund houses with direct-to-consumer offerings like Vanguard.

Investors with at least $100,000 with Wealthfront can now borrow up to 30% of their balance for loans for anything except purchasing more investments on the firm’s platform, the company announced Wednesday.

Reuters reports loans will cost between 3.25% and 4.5%, and any money a client deposits into their account after taking out a loan will pay off the balance rather than investments.

Edward Jones partners with SixThirty to support financial technology startups (PR Newswire), Rated: A

Financial services firm Edward Jones today announced a multi-year partnership with SixThirty, a St. Louis-based venture fund that invests in financial technology (FinTech) startup companies. Backed by the St. Louis Regional Chamber, SixThirty was founded in 2013 and to date has funded more than 25 startups across the globe.

As part of the partnership with SixThirty, Frank LaQuinta, a general partner with Edward Jones, has joined the organization’s Investment Committee which evaluates the investment pipeline and selects FinTech startups that SixThirty invests in.

Pi Capital Advises Money360 on $ 250 million South Korean Financing Vehicle (Yahoo! Finance), Rated: A

Pi Capital International LLC (“Pi Capital”) is pleased to announce that it was the exclusive financial advisor and placement agent to Money360, Inc. for a structured debt facility of up to $250 million. The financing vehicle is designed to allow Money360 to employ funding as it provides commercial real estate loans to its U.S. client base. The fund provides Korean investors with a short-duration, high-yield fixed-income instrument.

“The fund raise by Pi Capital will allow us to substantially increase our assets under management,” said Evan Gentry, M360 Advisors’ CEO. “We believe this gives us a competitive advantage with an anticipated $250 million investment from one of South Korea’s most reputable financial institutions.”

ApplePie Capital Announces Appointment of Chief Development Officer and Franchise Finance Company Acquisition (Yahoo! Finance), Rated: A

ApplePie Capital, the first online lender solely dedicated to the franchise industry, today announced the appointment of franchise industry veteran Ronald Feldman as chief development officer, as well as the acquisition of Funding Solutions, LLC, a well-established national franchise lending consultancy that specializes in SBA, conventional and equipment finance loans. Feldman and Funding Solutions’ managing partner Randy Jones will join ApplePie’s leadership team.

These additions position ApplePie’s financial platform to exponentially expand upon its hallmarks of speed, flexibility and efficiency with new product options, an expanded network of lending sources and an extraordinary wealth of franchise finance expertise for its growing list of franchisor partners. Currently, ApplePie serves more than 40 franchisors including Orangetheory Fitness, Jimmy John’s, Jersey Mike’s and Marco’s Pizza.

Responsible for growing ApplePie’s brand portfolio and contributing to product strategy, Ronald Feldman comes to the company with more than 20 years of experience in franchise leadership and franchise financing.  He previously served as chief development officer at FranData, the industry leader in market research, and as a principal and co-founder of Franchise America Finance (FAF) and The Siegel Financial Group. Feldman was also an early franchisee of The Goddard School system. As an active advocate of the franchising business model, Feldman currently serves the International Franchise Association (IFA) as chair of the Supplier Forum Advisory Board and sits on both the Board of Directors and the Executive Committee of the association.  Feldman was awarded the Sid Feltenstein MVP Award for service to the IFA’s Political Action Committee (FRANPAC) in 2013.

Why More Millennials Would Rather Visit The Dentist Than Listen To Banks (Forbes), Rated: A

Unfortunately, some Millennial stereotypes are rooted in fact. A 2015 PWC survey showed that only 24% of us have basic financial knowledge, and even so, only 27% of us seek financial advice on saving and investing.

When it comes to jobs, we’re not the deadbeats that people assume. In fact, a 2015 Deloitte report found that 54% of Millennials had started or had planned to start their own businesses by year-end. Although we may work differently than generations past, many of us are passionate, entrepreneurial and looking to make a difference.

“Advisors need to understand how truly connected this new generation is to each other and to information.” When it comes to trusting a financial advisor, Kamine highlights this outsider oversight as a road block.

Millennials currently represent a meaningful fraction of U.S. wealth that will grow as baby boomers continue to pass down an astounding $30 trillion over the next 30 years. When this transfer of wealth happens, an estimated 66% of Millennials will fire their parents’ financial advisor, according to InvestmentNews Data.

This year, 86% of Millennials said they are interested in socially responsible investing, according to Morgan Stanley.

The Millennial Disruption Index reports 71% of us would rather go to the dentist than listen to what banks tell us. In our financial planning, we have shorter-term goals that we’re trying to align with the things we care about.

With an average age of 51, many advisors still build financial plans based on their view of a traditional life cycle with set ages for when we start a family, buy a house, climb the corporate ladder and retire. But their view is not our reality. Kamine adds, “Financial advice has been like a structured box without much creativity or understanding of the individual. Advisors need to become more dynamic because we’re revolting against structure. I’ve told my advisors I don’t envision buying a house for at least the next five years. And I’m definitely not focused on planning for retirement 40 to 50 years from now.”

Miami fintech company DadeSystems receives $ 2 million in funding (Miami Herald), Rated: A

DadeSystems, a Miami-based provider of account receivable automation solutions, raised $2 million in funding to accelerate its growth from Miami early-stage venture firm Ocean Azul Partners.

New GAO Study Examines Fintech Industry Regulation (Banking Journal), Rated: B

The report, the first in a series on regulation in the fintech industry, focuses specifically on marketplace lenders, mobile payments, digital wealth management platforms and distributed ledger (also known as blockchain) technology.

While the GAO did not issue any recommendations in the report, it noted that regulation of these four subsectors was varied depending on the types of products or services offered and the way in which they are delivered to consumers.

College Ave Student Loans Kicks off the Naked Financial Truth Digital Tour Featuring Financial Advice for Parents and Students (BusinessWire), Rated: B

College Ave Student Loans, the leading next-generation student loan fintech lender, has teamed up with America’s #1 College Life Expert Harlan Cohen to help families get comfortable with the uncomfortable when it comes to college and money. Hosted by Harlan Cohen, author of The Naked Roommate, the Naked Financial Truth Digital Tour will feature a series of free webinars and videos focused on financial advice, strategies and tips to help parents and students plan for post-secondary education.

The first webinar, “The 7 Biggest Financial Mistakes College Students Make (And How Parents Can Help)” will be held on Tuesday, April 25 at 7 p.m. ET. Registration for the webinar is free and available online at

Ben Franklin’s Fintech Accelerator is First of its Kind in the Region. These 8 Startups Made the Cut (Biz Journals), Rated: B

These eight companies — which are required to have a presence in the region to receive an investment — will begin the 12-week accelerator on April 24, meeting with mentors and advisors selected to help guide them toward growth and fundings. They run the gamut of the financial industry, from creating data visualizations of personal assets to a student loan repayment benefit program. Four focus on putting financial technology to use solving social issues.

  • Asset-Map (Philadelphia)
  • Bright Idea Energy (Philadelphia)
  • College Affordability (Wynnewood)
  • Factury (Silicon Valley and New York City)
  • FinPay (King of Prussia)
  • FixList (Philadelphia)
  • NeedsList (Philadelphia)
  • PeopleJoy (Philadelphia)

RayJay Adds Real-Time Client Updates to Planning Tools (Financial Advisor IQ), Rated: B

In the next several weeks Raymond James is setting its sights on rolling out a revamped suite of “longevity” planning tools. The updated software comes with the kinds of bells and whistles that advisors might expect from a nearly five-year-old package – a “new look and feel” as well as a “more conversational design,” as company execs put it.

Other notable enhancements, they say, include more flexibility for analyzing portfolio return patterns and capabilities allowing real-time updates as clients’ household budgets and retirement goals change over time.

TAMARACK IMPLEMENTS ITS SALESFORCE.COM LEASE/LOAN ORIGINATOR FOR CHANNEL PARTNERS CAPITAL (NEF Association), Rated: B

Tamarack, a leader in providing independent software solutions in the equipment finance and commercial lending industry, has added Channel Partners Capital as its newest client to utilize Tamarack’s Lease/Loan Origination Accelerator on Salesforce.

Channel Partners, a leading provider of small business working capital loans, will benefit from added flexibility, streamlined operations and enhanced audit controls, as a result of using Tamarack’s Lease/Loan Origination Accelerator on Salesforce.

Tamarack’s Lease/Loan Origination Accelerator on Salesforce is a scalable solution offering users the ability to automate work queues,increase throughput of loans without additional head count and customize notifications from lead generation through to funding.

United Kingdom

UK is capital of Europe for fintech unicorns (The Telegraph), Rated: AAA

The UK dominates the European financial technology industry, with figures showing it boasts more billion-dollar fintech companies than the rest of the continent put together.

Britain houses four fintech “unicorns” – companies valued at $1bn (£780m) or more – with a combined valuation of $18.5bn, according to a report by the technology investment bank GP Bullhound.

This compares to two in the rest of Europe, which are worth $4.6bn between them.

Globally, fintech investment grew slightly to $13.6bn, although there was a decrease in the number of investments from 942 to 840.

BondMason is first P2P provider to launch a SIPP product (AltFi), Rated: AAA

BondMason has become the first peer-to-peer service provider to launch a self-invested personal pension (SIPP) product. The service aims to offer investors a flexible and tax-efficient way to save for retirement.

The new retirement product, which selects loans across P2P lending platforms, will grant UK savers exposure to higher-return assets than traditional pension savings products. Starting from a minimum investment of £5,000.

Just Google it! Millennials favour search engines over financial advice (P2P Finance News), Rated: AAA

MILLENNIALS are favouring search engines over professional financial advice when it comes to managing their own money, research claims.

A poll of more than 2,000 adults by Zurich UK claims 15 per cent of millennials, referring to those aged 18-34, are turning to search engines such as Google instead of seeking professional financial advice, more than any other age group.

Only three per cent of 35-44 year olds and nine per cent of those aged 45-54 and over 55 respectively, opt for web-based information.

Asked why they eschew professional help, one in five millennials cited confidence in their ability to sort their own financial futures as a reason for not initially seeking professional help, while 37 per cent felt they do not earn enough to need to speak to a financial adviser, and almost a quarter said they were too young.

Loan searches on the internet ‘may affect credit rating’ (BBC), Rated: B

High Street bank TSB said some loan providers make a “hard mark” on credit files when someone asks for a loan price or quote.

TSB chief executive Paul Pester said: “We estimate that consumers are losing out by as much as £400m each year, which is going straight into the pockets of aggressive loans providers. It is time the industry comes clean on these costly underhand tactics.”

P2P lending is fast becoming the go-to option (Bridging and Commercial), Rated: B

P2P lending offers an innovative funding option for businesses – including developers – and is fast becoming the go-to option.

It’s essential that the development finance sector stays competitive and vibrant, and alternative lending allows that to happen. Far from just being a back-up for situations that the traditional lending sector can’t cater to, crowdfunding and P2P platforms can actually be a more efficient source of funding.

European Union

2018 is shaping up to be a regulatory nightmare for financial services (Information-age.com), Rated: AAA

Achieving compliance will not happen overnight. Indeed, MiFID II is widely considered to be one of the most sprawling pieces of financial legislation ever devised, and thus it presents numerous challenges. One of which being that recording calls will become mandatory for all areas of financial advice.

Then, if you add GDPR (the EU’s General Data Protection Regulation), coming into effect in May 2018, into the equation, 2018 is shaping up to be a regulatory nightmare for financial services firms. Under GDPR, we all have a‘ right to be forgotten’ or a right to erasure of all personal information held on us by a particular company. This places a duty on companies to be able to quickly access and delete the information they hold on specific individuals, on request.

However, comparing the responses of IT professionals and those responsible for managing Risk & Compliance within a business shows IT teams have a better overall understanding of the consequences of non-compliance. 62% of risk and compliance managers admitted to not knowing a company can be fined up to five million euros or 10 per cent of annual turnover, compared to only 42% of IT managers and decision makers.

Tinder for microloans: How to share lending risk with strangers (Russia Beyond the Headlines), Rated: A

A stranger’s photograph appears on your smartphone screen, and you decide whether to give him or her a loan or not. The money is not yours, but instead is provided by microfinance organizations. That’s the main difference from traditional American P2P (peer-to-peer) lending, and with Suretly you can earn or lose depending on whether the recipient of your largesse proves to be a reliable borrower or not.

Suretly is geared exclusively to short-term loans of up to one month; in other words, those with the highest interest.

The money itself is loaned by the microfinance organization that the borrower applies to, but only if they attract enough sureties to cover the whole amount, plus interest. Users share the risks, and depending on whether the individual returns the money or not, they can lose or earn from $1 to $10.

On the app, borrowers are divided into seven categories from A to G depending on their trustworthiness. The higher the risk that the loan won’t be repaid, the higher the price of its surety. The maximum commission is $1.5.

Australia

Goldfields Money makes Australian BaaS play with Singapore’s Instarem (Daily Fintech), Rated: AAA

Listed Australian deposit taking institution Goldfields Money (ASX:GMY) looks to be making good on its intention to become a leading player in the digital banking product distribution and BaaS market in Australia, announcing last week that it had signed an MoU with Singapore headquartered remittance fintech Instarem.

What is interesting about the MoU is the intent to move beyond remittance towards a broader banking play for cross-border SMEs and products orientated towards visa holders visiting or living in Australia.

The two companies should have a healthy market ready to capitalise on. According to the Australian Bureau of Statistics, over the last 10 years the proportion of the Australian population born in China alone has increased from 1.2% to 2.2%, coming in just behind New Zealanders and British immigrants. Those born in India currently make up 1.9% of the population, while citizens from the Philippines, Vietnam and Malaysia collectively add up to further 2.7%.

Migration isn’t going away. And the degree to which an individual’s assets are spread across countries is also on the increase thanks to globalization.

China

China’s Internet finance thrives as fraud fades (XinhuaNet), Rated: AAA

China has four large state-owned banks, and state-owned enterprises generally have easier access to financing. Many small companies are troubled by the financing bottleneck, creating pent-up demand.

Meanwhile, working-class families struggle to figure out where to invest their savings to seek higher returns, and many of them move money online. The country, home to the world’s biggest online population, also has a number of groups, such as college students, who are underserved by banks.

By March 2017, 3,607 Chinese P2P lending platforms had run into trouble or been forced to close, with only 2,281 platforms in normal operation.

On top of P2P lending, Internet finance also covers business such as third-party online payment, crowd funding, and other financial services.

Risk caused by the Internet finance industry has wide repercussions. Some P2P lending platforms resembled hybrid financial institutions providing clients with various financial services online, analysts said.

Businesses such as P2P lending, Internet-based insurance, third-party online payment, and online asset management were among key areas for strengthened supervision, industry observers said.

Internet finance last week appeared on the top banking regulator’s list of ten most important areas for enhanced risk control, with targeted measures to be taken to stem emergence of a financial crisis.

Wang said 2017 will be a watershed year for Chinese Internet finance as the rules are tightened, bringing the industry out of the wilderness.

Tishman Speyer, CreditEase team up to invest $ 1.4b in China (Deal Street Asia), Rated: A

New York-based developer Tishman Speyer is teaming up with China’s CreditEase Wealth Management to invest $1.4 billion in China and other countries within the next three years.

The strategic partnership is aimed to extend “global cooperation in resource sharing, fund investment, buyouts and business development,” the firms said in a joint statement.

APAC

Marvelstone Capital plans a robo advisor platform for family offices (AltFi), Rated: AAA

Singapore-based Marvelstone Capital plans a robo advisor platform for the under-served family office market in Asia.

The platform is being developed with Singaporean fintech startup Smartfolios, and will be launched in the third quarter of 2017. It will be available on desktop and mobile for Marvelstone Capital’s clients.

Marvelstone will target family offices based in Singapore, Malaysia, Indonesia, Myanmar, as well as India. The company points out that Malaysia is an important market and Cho added: “It is a huge market and the culture is quite unique as well, there’s a huge Shariah-compliant market, so it is definitely one of the most important markets for us.”

No Uber Moment for Fintech Just Yet (Broadridge), Rated: AAA