- Today’s main news: SoFi raised new $105M fund.Landbay unveils March 2017 UK Rental Index.P2P-Banking launches IFISA comparison database.Personal loan applications surge in Australia.
- Today’s main analysis: Development of fintech in Hong Kong.Fintech startups in MENA raise $100M last decade.
- Today’s thought-provoking articles: OCC fintech plan uncertain as comptroller term expires.Goldman’s internal fintech revolution can’t come soon up.Why EU passporting is vital to UK’s fintech scene.How to ensure your crowdfunding campaign is successful.
- SoFi raises $105M fund. AT: “While $105 million is a drop in the bucket for SoFi, this represents a new channel for raising capital.”
- OCC fintech plan uncertain as comptroller term expires. AT: “The Trump Administration is preparing for a showdown with Dems over the fate of CFPB and the proposed fintech charter. It’s clear that Curry’s fate is signed, but what isn’t clear yet is how long the president will allow him to keep his post before replacing him. It will be an interesting year.”
- Goldman’s internal revolution can’t come soon enough. AT: “Goldman is charting new waters here. They have to be patient.”
- More on Elevate. AT: “A little insight into the Elevate Credit business model, but not much new.”
- Is an OnDeck acquisition on deck? AT: “More speculation.”
- The tax implications of RECF. AT: “You know the usual disclosure. Taxes can get sticky, so consult your tax advisor for specific tax implications for your particular situation if you plan to invest in RECF.”
- MortgageHippo raises $2.25M. AT: “Not a bad seed round, but I think new entrants to the mortgage technology sector will arise with bigger and better pools.”
- Inside Bond Street’s conent marketing strategy. AT: “I’ve done content marketing since before it was called content marketing and I like that Bond Street is concerned first with building its brand. That’s what all marketing is about. Specifically, it’s online marketing chanels are to be commended. A blog is a near necessity, but you need a dedicated content producer to keep it up. An online magazine is one of the best branding tools for content marketing, and I like that Bond Street is pursuing that channel, though I have to say its design could use a little work. Podcasting is another content marketing tool that is gaining momentum. Again, hats off to Bond Street for focusing on content that isn’t all about them.”
- Payix, Northridge Software announce strategic alliance.
- CRF will be the fifth online lender to IPO in the U.S. AT: “The second Chinese company. Nothing new in this report. The headline says it all.”
- Milbank advises College Ave student loans in capital raise.
- $3M raised through RealtyShares for apartment complex in Phoenix.
- Landbay unveils March 2017 UK Rental Index. AT: “Rents are up. Surprised?”
- P2P-Banking launches IFISA comparison database.
- Challenger bank Starling and Moneybox team up.
- BondMason comments on new SIPP service.
- Social P2P venture hindered by wholesale crackdown.
- ClearBank’s benefits. AT: “This is an interesting read and explains how ClearBank benefits retail banks, challenger banks, and fintechs.”
- UK firms VC funding holds steady.
- Which fintech stocks does Neil Woodford own?
- George Banco appoints RateSetter co-founder to board.
- Alt funding options come into focus.
- Development of fintech in Hong Kong. AT: “This is a must-read.”
- Alibaba’s Ant Financial increases bid for MoneyGram.
- Dianrong announces new leadership appointments.
- United States
- Online lender SoFi has a new $ 105 million fund for yield-hungry investors (CNBC), Rated: AAA
- OCC Fintech Plan Faces Uncertainty as Comptroller Term Expires (Credit Union Times), Rated: AAA
- For Goldman, the Fintech Revolution Can’t Come Soon Enough (NYT), Rated: A
- CREATING A BETTER TOMORROW (NYSE), Rated: A
- Is An OnDeck Acquisition On Deck? (PYMNTS), Rated: A
- Not Everyone Is Happy About Latest Fintech Charter Proposal (Corporate Counsel), Rated: A
- The Tax Implications of Real Estate Crowdfunding (Alpha Flow), Rated: A
- MortgageHippo raises $ 2.25M to help lenders give you a mortgage online (Chicago Tribune), Rated: A
- Inside Bond Street’s content marketing strategy (Tearsheet), Rated: A
- Payix and Nortridge Software Announce Strategic Alliance (BusinessWire), Rated: B
- China Rapid Finance will be the Fifth Online Lender to IPO in the US (Lend Academy), Rated: B
- Milbank Advises FinTech Lending Company College Ave Student Loans in Its $ 30 Million Capital Raise (Milbank), Rated: B
- $ 3M Raised for Clarendon Park Apartments in Phoenix Through RealtyShares (Yahoo! Finance), Rated: B
- United Kingdom
- Landbay Unveils March 2017 UK Rental Index (Crowdfund Insider), Rated: AAA
- P2P-Banking Launches Database to Enable Investors to Compare IFISA Providers Easily (P2P-Banking), Rated: AAA
- Fintech synergy as challenger bank teams up with robo advice app (AltFi), Rated: A
- CEO Stephen Findlay Comments on BondMason’s New SIPP Service (Crowdfund Insider), Rated: A
- Social P2P venture hindered by wholesale crackdown (P2P Finance News), Rated: A
- ClearBank: a MSFT Azure B2B Fintech (Daily Fintech), Rated: A
- UK Firms VC Funding Holds Steady Despite Brexit (PYMNTS), Rated: A
- Which fintech stocks does Neil Woodford own? (The Motley Fool), Rated: A
- George Banco appoints RateSetter co-founder to board (Loantalk), Rated: A
- Alternative funding options come into focus (Works Management), Rated: B
- European Union
- Why EU Passporting Is Vital For Britain’s Fintech Firms (Forbes), Rated: AAA
- Alfa Finance Launches New P2P Lender DoFinance (Crowdfund Insider), Rated: A
- Simplex Partners with Beacon – Risk Magazine’s FinTech Start-Up of the Year (BusinessWire), Rated: A
- Personal loan applications surge as credit cards wane (The Sydney Morning Herald), Rated: AAA
- Development of Financial Technologies (Legislative Council Panel on Fiancial Affairs), Rated: AAA
- Alibaba’s Ant Financial Increases Bid for MoneyGram (Crowdfund Insider), Rated: A
- Dianrong Announces New Financial Leadership Appointments (Crowdfund Insider), Rated: B
- ‘Fintech startups in Middle East, North Africa raised $ 100m last decade’ (Venture Burn), Rated: AAA
- How to make sure your crowdfunding campaign is successful (Destiny Man), Rated: AAA
- ‘Crowdfunding is the future’(Times Live), Rated: A
Online lender SoFi has a new $ 105 million fund for yield-hungry investors (CNBC), Rated: AAA
SoFi, the online lending start-up sporting a lofty $4.3 billion valuation, has just raised a $105 million fund to give outside investors another way to buy into the company’s loans.
In a regulatory filing Monday afternoon, SoFi Prime Income Fund is listed as the issuer of equity in a limited partnership. According to the filing, the fund has 33 investors that put in a minimum of $500,000 each.
Nino Fanlo, SoFi’s chief financial officer, said the fund is the first of its kind for SoFi and provides another avenue to raise capital for issuing loans. Returns after fees are expected to be in the low double digits, he said.
OCC Fintech Plan Faces Uncertainty as Comptroller Term Expires (Credit Union Times), Rated: AAA
As the term of Comptroller of the Currency Thomas Curry expires and with no replacement in sight, the OCC could be headed toward a showdown with Congress over the agency’s decision to issue special charters to fintech companies.
In March, the OCC published a draft supplement to its licensing manual, which contains existing regulations for chartering national banks.
And although Curry said the OCC will issue charters to fintech companies, his own future is in doubt. His term expired this month and President Trump has not nominated a replacement, although Joseph Otting, a former associate of Treasury Secretary Steven Mnuchin at OneWest Bank ,has been mentioned as a possible nominee.
Sens. Sherrod Brown (D-OH), ranking Democrat on the Senate Banking Committee and Jeff Merkley (D-OR) said earlier this year that authority to issue such charters must come from Congress.
Meanwhile, traditional banking and credit union trade groups are divided over the charter proposal.
Earlier this year, NAFCU said that the OCC must ensure that online lenders are subject to the same consumer protections and data standards as banks and credit unions.
The American Bankers Association has said it supports the concept of the OCC issuing fintech charters, but wanted it to ensure that companies meet the same standards as traditional banks.
For Goldman, the Fintech Revolution Can’t Come Soon Enough (NYT), Rated: A
Goldman Sachs’s internal technology revolution cannot come soon enough.
Goldman’s fledgling Main Street operation is a bright spot. With more than $115 billion in deposits, it’s already one of the top 25 banks in the United States by that measure. Marcus, as the online consumer-lending unit is called, is experiencing “demand more robust than we thought,” the unit’s boss, Harit Talwar, said recently.
Consumer lending can earn at least a 3 percent return on assets — triple what Goldman has been managing as a whole of late.
For now, lending through new web platforms remains a small industry, with just $40 billion of credit extended over a decade, according to Deloitte.
CREATING A BETTER TOMORROW (NYSE), Rated: A
Texas-based Elevate Credit (NYSE: ELVT), which recently held its IPO at the exchange, exists because of what it sees as an opportunity in the financial services market.
In between are working people, roughly 170 million residents of the U.S. and the U.K., whom Elevate refers to as “the New Middle Class.” These are people with low or no credit scores, who often have to resort to non-prime lenders in moments of personal or medical emergency.
Elevate offers three products. The first, called Rise, is an unsecured, online loan vehicle; Sunny is its U.K. counterpart, and Elastic is a line of credit issued by Kentucky-based Republic Bank, Member FDIC. While the company’s customers have credit scores typically in the 560 to 600 range, those with lower credit or no credit can also be approved, depending on what Elevate’s data analysis reveals about their reliability.
Elevate’s analytics platform, DORA, is home grown. It’s based on open-source software tools that enable model development and risk analytics. DORA inputs and outputs are monitored and evaluated to help ensure legal and regulatory compliance. Elevate’s IQ platform deploys business logic and algorithms. And driving the analytics and decision-making technology is the very human decision to create specific data sets, generated from sources that monitor non-prime customers.
The platforms draw on more than 10 different sources of consumer information, including the big three credit bureaus as well as other bureaus that specialize in non-prime customers. In addition, Elevate acquires data from LexisNexis, ID Analytics and other unique data sources to validate the applicant’s identity and to draw inferences about the applicant’s intent to repay. Elevate uses this data in ongoing tests to optimize its underwriting, to ensure that fraud and serious credit risks are more easily distinguished from acceptable risks.
In the last year, Elevate’s charge-off rates have remained steady, while its customer acquisition costs have dropped, says Rees.
Elevate also uses its nimble, data-driven underwriting model to reward its best customers. Borrowers who establish a history of on-time repayment, and who take advantage of online financial literacy tools and videos, will see their APRs drop over time. Currently, the most responsible Elevate customers pay APRs as low as 36 percent.
Is An OnDeck Acquisition On Deck? (PYMNTS), Rated: A
When OnDeck completed its IPO in 2009, it entered the public markets with a massive amount of buzz, ending the day with a share price north of $20 dollars and a valuation around $1.9 billion.
Two years out, and the banks’ lunch remains uneaten — because those alternative lenders like OnDeck have had a rather bumpy two years. OnDeck’s share price is down 75 percent since its 2014 IPO — in the last 12 months the firm has shed 37 percent of its value.
Today OnDeck’s market cap stands at $330 million.
Marathon Partners Equity Management, LLC has owned 1.75 percent of OnDeck since the end of 2016 — and the activist investor is now pushing for a new direction, preferably one that involves a sale.
That letter apparently did not get quiet enough of a reaction from the board — OnDeck’s official response was that they “value dialog with their shareholders,” and so as of the end of last week, the campaign ramped up.
Whether or not very drastic changes are coming soon to OnDeck remains to be seen — the annual meeting for shareholders will likely be spirited.
Not Everyone Is Happy About Latest Fintech Charter Proposal (Corporate Counsel), Rated: A
Public comments are now available from companies, regulators, advocacy groups and individuals weighing in on the Office of the Comptroller of the Currency’s licensing manual draft supplement for special purpose national bank charters.
The OCC received only 17 total comments on its March 15 supplement for evaluating bank charter applications from financial technology companies, far from the 120 it received on the broader whitepaper Exploring Special Purpose National Bank Charters for Fintech Companies, which introduced the idea of the OCC granting fintech companies these bank charters back in December 2016.
“While many states have made admirable efforts to align their regulations with technological innovation, state laws by and large were drafted for a physical branch banking environment that did not envision online delivery of financial services,” wrote Robert Lavet, general counsel of San Francisco-based personal finance company Social Finance, or SoFi, in his comments to the OCC.
In her comments, personal lending company Oportun Inc.’s chief compliance officer Joan Aristei voiced no concerns with the financial inclusion standards. She wrote the guidance on this type of plan will “inform our discussions regarding how we can modify and enhance the efforts we have already undertaken,” adding that she “appreciates the OCC’s willingness to innovate and look beyond traditional measures of financial inclusion.”
New York State Department of Financial Services superintendent Maria Vullo called the OCC’s proposal for fintech charters a “hasty and misguided effort.” She said that regulation for the financial technology providers is better left to the states, not the OCC.
The Tax Implications of Real Estate Crowdfunding (Alpha Flow), Rated: A
The first thing to understand is that an equity investor in a syndication is actually a partner in partnership. Investments in syndications will generally be considered “passive” activities.
When combining all passive activities, if the investor has a net passive loss, then the remaining net loss is effectively “suspended” whereby they are carried forward to future years and subject again to the passive activity rules. If an investor has passive income then that is taxed at the taxpayer’s marginal tax rate.
In the subsequent tax year, any passive losses that carried over can offset passive income that is generated.
Crowdfunding syndications offer one additional special tax advantage and that is favorable long-term capital gains rates. When a property (apartment building, retail center, etc.) is acquired through a syndication and is held for longer than one year, the sale of the property would typically result in long-term capital gains. These gains are taxed at a rate of 15% (with certain exceptions). Any depreciation that was deducted on the property would be subject to tax rates not to exceed 25%.
MortgageHippo raises $ 2.25M to help lenders give you a mortgage online (Chicago Tribune), Rated: A
MortgageHippo, a mortgage-technology startup based in Chicago, has raised about $2.25 million in seed funding, the company announced Tuesday.
CMFG Ventures, based in Madison, Wis., led the $1.5 million round that closed last week, Saportas said. CMFG is the venture capital arm of CUNA Mutual Group, which sells insurance and investment products to credit unions. The investment closed MortgageHippo’s seed funding.
Inside Bond Street’s content marketing strategy (Tearsheet), Rated: A
Jones said the company is “passionate about building a brand,” which it does by creating editorial content. It has a blog that profiles business owners Bond Street serves across the country, like the guys behind the Two Hands cafes and restaurants or the women that launched Sky Ting Yoga in New York City; and an online magazine that looks at the cultural and economic impact of independent businesses in New York (celebrity restaurateur Daniel Boulud and artist Baron von Fancy are among many interviews that address the importance of supporting local businesses). It also has a podcast called the Nitty Gritty that features the entrepreneurs behind brands like Sweetgreen, charity:water, McNally Jackson and Smitten Ice Cream; and a series of city-specific resources for female entrepreneurs.
Jones declined to share Bond Street’s annual content marketing budget, but said the company has two dedicated employees working on content marketing, out of about 40 total employees.
Marketing has become expensive for online lenders because of the high cost of customer acquisition. Partnerships are an easy way to bring that cost down, Benton said. To date, Bond Street has partnered with WeWork to offer loans to member companies of the co-working space company; SMB-focused software companies like Booker and Front Desk to offer their clients discounted loans; and most recently, with NerdWallet, the comparison shopping site for credit cards and other financial services, to help provide small business owners with financing options.
Payix and Nortridge Software Announce Strategic Alliance (BusinessWire), Rated: B
Payix® and Nortridge Software announce they have formed a strategic alliance to help lenders connect with their borrowers and improve their ability to collect payments. The alliance allows Payix to offer real-time integration between its suite of collections tools and the Nortridge Loan System (NLS).
Payix’s collections tools include its intuitive, engaging and affordable mobile collections application, as well as web, interactive voice response (IVR), text, and collector portal applications. Nortridge clients can add the Payix solutions to their existing collections tools with virtually no IT work on their part and in just a few weeks’ time.
The Nortridge and Payix teams collaborated in the development of the seamless web services interface between the Nortridge Loan System and the Payix payment system, ensuring that transactions could be carried out in real-time and without interruption.
Payix’s collections tools are white-labelled to help lenders promote their own brands with their borrowers, and they were specifically designed for any size lender to use easily and affordably.
China Rapid Finance will be the Fifth Online Lender to IPO in the US (Lend Academy), Rated: B
In late March, 2017 we learned that Chinese online lender China Rapid Finance filed to go public, hoping to raise up to $100 million. They will list on the New York Stock Exchange under the ticker symbol XRF and will be the second Chinese online lender to go public in the United States.
Milbank Advises FinTech Lending Company College Ave Student Loans in Its $ 30 Million Capital Raise (Milbank), Rated: B
Milbank, Tweed, Hadley & McCloy LLP advised College Ave Student Loans on a $30 million capital raise.
$ 3M Raised for Clarendon Park Apartments in Phoenix Through RealtyShares (Yahoo! Finance), Rated: B
RealtyShares, a leading online marketplace for real estate investing, today announced that its network of accredited investors has collectively funded a $3 million investment for the acquisition of Clarendon Park Apartments, a 138-unit multifamily property in Phoenix, Ariz.
The deal is sponsored by Rincon Partners, an Arizona-based owner and operator of multifamily properties focused primarily on the Southwestern United States. Rincon Partners intends to use the funds to rehabilitate and modernize the apartment interiors and amenities to potentially improve its position within the market.
The property is located in midtown Phoenix, between the city’s two largest employment corridors and close to shops, restaurants and newly developed amenities. The property itself features a swimming pool, spa, clubhouse and fitness center, as well as access to light rail within two blocks.
Landbay Unveils March 2017 UK Rental Index (Crowdfund Insider), Rated: AAA
Last week, UK-based peer-to-peer lending platform Landbay released the March 2017 Rental Index. This report reveals details about the country’s rental market.
“Since March 2016, average rents in the UK have risen by 0.9% to £1,191. In England, rents were up 0.87% to £1,222; in Northern Ireland, they rose by 0.07% to £557; meanwhile in Scotland rents rose to £723 following annual growth of 1.25% and in Wales, the average rent is up 1.41% to £636. Average rents for one, two and three-bed properties hit £1,012, £1,152 and £1,321 respectively in March 2017.”
P2P-Banking Launches Database to Enable Investors to Compare IFISA Providers Easily (P2P-Banking), Rated: AAA
P2P-Banking launches a new IFISA database, that enables investors an easy comparison of offers by IFISA providers. UK taxpayers can invest up to 20,000 GBP per year tax-free in ISAs. This amount is per tax year, so a person could invest 20,000 GBP this tax year and invest 20,000 GBP in a different ISA next year. The Innovative Finance ISA, short IFISA, was introduced in 2016 with most offers becoming approved by HRMC only in the 2017/2018 tax year.
The new database of IFISA offers allows speedy selection and sorting to review IFISA products by different providers and then links to the provider’s website for in detail information. Investors can filter by interest rate, term, loan type, minimum investment amount, possibility of transfers in and out, flexible IFISA, bonus & cashback promotions and several other criteria.
Fintech synergy as challenger bank teams up with robo advice app (AltFi), Rated: A
Starling Bank is partnering with app-based wealth manager Moneybox for real-time savings.
Moneybox’s savings and investment services will be now offered by digital-only bank Starling to enable customers to easily open ISAs and round up their spending in real time.
The service will be available to Starling customers as early as the end of April.
The new service is made possible through Starling’s open APIs. The integration has two distinct features. Firstly, it allows customer data to be securely shared between the two apps, meaning transactions will appear within the Moneybox app in real time as customers spend.
Secondly, the integration with Starling means that customers will be able to set up round ups from their Starling account in a matter of seconds.
Starling Bank publicly launched its API and developer platform to enable external developers and technology companies to integrate with the banking app earlier in April, and Moneybox is the first to launch a live integration on this API.
CEO Stephen Findlay Comments on BondMason’s New SIPP Service (Crowdfund Insider), Rated: A
In response to growing demand from investors in search of better investment returns for their pensions, UK P2P service provider BondMason has launched a new Self-Invested Personal Pension (SIPP) service.
The new SIPP service offers a flexible, tax-efficient way to save for retirement and allows investors to access returns from a diverse set of approved P2P Lending opportunities. Investors can open with a lump sum from £5,000 and there is no tie-in – an investor can typically exit in full within 48 hours. The service also aims to allow SIPP administrators to easily and compliantly grant their clients access to returns from P2P Lending.
Social P2P venture hindered by wholesale crackdown (P2P Finance News), Rated: A
THE FOUNDER of ThinCats has said that the regulator’s clampdown on wholesale lending will affect projects that can be funded through his social peer-to-peer lending platform Community Chest.
Kevin Caley (pictured) launched the social enterprise last year and it funded its first loan in February 2017 for £130,000. The debt facility went to a local Birmingham finance company called ART Business Loans, which supports West Midlands enterprises.
But Caley says the Financial Conduct Authority (FCA)’s tighter restrictions on wholesale lending mean that loans like these will no longer be possible, as the money was lent to another lender.
ClearBank: a MSFT Azure B2B Fintech (Daily Fintech), Rated: A
A well kept secret of the UK B2B banking sector, is now public. Clear Bank, a clearing Bank in the UK, is ready to compete with the four UK clearing banks,
- Royal Bank of Scotland (RBS).
Clear Bank is the fifth UK clearing bank and the only one that is pure B2B since it does not offer services direct to the consumer.
Back in the 60s there were 16 clearing banks in the UK. Consolidation in this part of transactional banking has left the UK currently with 4 clearing banks that process over 80 Trillion pounds annually worth of payments in the UK.
Clear Bank will be helping Challenger banks to access the payment system at the Bank of England level, at the same level as incumbents.
Clear Bank will help the 44 UK Building societies offer current account services in a cost effective way. Right now, only 2 out of the 44 offer such capabilities to their members due to prohibitive costs.
Clear Bank will boost indirectly retail banking by reducing the substantially processing costs, which will facilitate competition for incumbents in the UK.
Clear Bank will help Fintechs by providing Banking as a service through the Cloud at a very low cost. Clear Bank will be offering an API so that Fintechs can interconnect to the ClearBank Fabric.
UK Firms VC Funding Holds Steady Despite Brexit (PYMNTS), Rated: A
According to Venture Beat, U.K.-based startups raised $1.04 billion in venture capital (VC) during the first three months of 2017. That’s a slight decrease from the $1.17 billion raised during same period one year ago, but it’s above the amounts raised in each of the last three quarters.
The U.K. remains number one in Europe for VC raised, with Germany second at $779 million and France third at $665 million.
Peer-to-peer lending service Funding Circle helped push the U.K. into the number one spot, raising $97 million in VC funding and $43 million in debt funding during the first three months of 2017.
Which fintech stocks does Neil Woodford own? (The Motley Fool), Rated: A
The fintech — financial technology — sector has emerged rapidly over the last decade. The Confederation of British Industry expects it to be worth £300bn in the UK alone by 2020.
Given Neil Woodford’s long-prevailing dislike of the big banks, it’s perhaps not surprising that he’s attracted by the relatively simple business models and exciting investment opportunities in the fintech sector.
Woodford is invested in some unquoted fintech companies, such as RateSetter, a peer-to-peer lending platform, and Seedrs, which opens up venture capitalism “to anyone with an internet connection”. However, he also has two holdings that are listed on the stock market — and very interesting they are too.
P2P Global Investments (LSE: P2P) is a FTSE 250 firm with a market cap of around £700m.
VPC Specialty Lending Investments (LSE: VSL) is in the FTSE SmallCap index but is a decent-sized company with a market cap of around £290m. Its business is similar to P2P’s and like the FTSE 250 firm, considerable quantities of cash flow into shareholders’ pockets.
George Banco appoints RateSetter co-founder to board (Loantalk), Rated: A
Guarantor lender George Banco has appointed the co-founder of peer-to-peer platform RateSetter as a non-executive director.
Peter Behrens (pictured above) – who also serves as the chief operating officer at RateSetter – co-founded the platform in 2010, and has seen more than £1.8bn of loans facilitated through the company in this time.
Alternative funding options come into focus (Works Management), Rated: B
Alternative funding options will be a major theme at Business, Innovation, Technology and Efficiency (BITE) 2017 hosted by MHA Carpenter Box at the Amex Stadium, Brighton on Thursday 27 April.
Andy Davis (pictured), former editor of FT Weekend and author of the ‘Beyond the Banks’ report on alternative finance, will be one of the industry experts forming an ‘alternative funding panel’ at the free one-day conference, where he will share his expertise with local business leaders.
Why EU Passporting Is Vital For Britain’s Fintech Firms (Forbes), Rated: AAA
The impact on fintech could be significant, as an Emerging Payments Association (EPA) report Passport to the Future makes clear: “HM Treasury estimates the UK fintech market employs 60,000 people and is worth £6bn to the UK economy. Fintech is part of the UK’s financial services sector that employs 1.9 million people and contributes 10 per cent of the UK’s GDP. Payments represents over 40 per cent of financial services in revenue terms and in 2016, 40 per cent of all fintech investments were in payments companies, amounting to £10bn globally.”
In a recent survey of its members, the EPA found that 88 per cent of its members think that passporting rights are important or very important to their current businesses, while over 91 per cent think passporting is important or very important to the UK’s fintech sector and its continued growth.
As the EPA’s report states: “This could see the flight of some or part of the 5,500 licensed companies abroad and have a significantly negative impact on the UK economy.”
Alfa Finance Launches New P2P Lender DoFinance (Crowdfund Insider), Rated: A
Latvia based Alfa Finance Group has launched a new peer to peer lending platform named DoFinance. The company stated it had invested €2 million to get the P2P lender up and running. The online lender is said to be available in all EU and EEA countries.
Simplex Partners with Beacon – Risk Magazine’s FinTech Start-Up of the Year (BusinessWire), Rated: A
Simplex Inc., one of Asia’s leading financial services technology firms, announced a strategic partnership with Risk Magazine’s FinTech start-up of the year, Beacon Platform, Inc.
The partnership combines Simplex’s expertise in implementing trading and risk management solutions with Beacon’s experience in building cross-asset trading and risk management platforms for industry leaders including Goldman Sachs, JP Morgan and Bank of America Merrill Lynch.
Personal loan applications surge as credit cards wane (The Sydney Morning Herald), Rated: AAA
Australians are shunning high interest credit cards and turning to personal loans for large purchases.
Driving the switch are tech-savvy consumers taking up loans from peer-to-peer (P2P) lenders, a new breed of online competitors to banks.
Credit card applications fell by almost 4 per cent in the March 2017 quarter compared with the same quarter last year, the latest report on consumer credit by credit bureau Equifax shows. That’s the biggest fall since September 2012 quarter.
Reserve Bank figures suggest that more frequent but lower value transactions are being made on credit cards.
One P2P lender is showing an interest rate on its website of 10.3 per cent on a $10,000 unsecured personal loan paid back over three years.
Banks would typically charge 13.02 per cent for a loan on the same terms, while credit cards are higher still – typically 14.15 per cent for a non-rewards credit card and 19.6 per cent for a rewards card, plus annual fees.
Development of Financial Technologies (Legislative Council Panel on Fiancial Affairs), Rated: AAA
This paper provides an update on the local financial technologies (Fintech) landscape and measures to support the development of the industry.
The number of Fintech start-ups operating in co-working spaces and incubator/accelerator programmes in Hong Kong increased by 60% between August 2015 (86) and August 2016 (138), according to Invest Hong Kong (InvestHK)’s Start-up Profiling Survey.
Hong Kong attracted about US$400 million of venture capital (VC) investment in Fintech companies during 2014-2016, lower than the Mainland and India (both of which are economies with huge domestic markets) but ahead of regional peers such as Australia, Japan and Singapore1 .
Universities such as The Chinese University of Hong Kong and The Hong Kong Polytechnic University will launch dedicated, publicly-funded firstyear first-degree and senior year programmes in Fintech starting from the 2017/18 academic year. Moreover, The University of Hong Kong’s School of Professional and Continuing Education has been offering a part-time, four-month programme, Executive Certificate in Internet Finance.
For payment services, the general public is increasingly receptive to new products and services, as Stored Value Facility (SVF) operators are launching new services while banks are rolling out new payment services (such as a note-issuing bank’s mobile App which enables cross-bank P2P fund transfer through mobile messaging). Building on the momentum from the introduction and development of various new payment channels in the market, the Government will strive to provide more convenient means for settling government bills and fees, such as making on-line credit card payment through digital wallets in mobile phones. HKMA will also work with the Government to explore with the industry ways of improving the payment infrastructure (such as introducing the Faster Payment System in 2018) and encouraging more standardisation in payment applications across various services providers, including the use of QR codes in streamlining the payment process, and facilitating the development of new electronic and mobile payment channels by the Government for various government services.
Read the full report here.
Alibaba’s Ant Financial Increases Bid for MoneyGram (Crowdfund Insider), Rated: A
Dallas based MoneyGram (NASDAQ:MGI), a global provider of money transfer services, has become quite popular. This past January, Alibaba’s Ant Financial subsidiary announced it had offered the firm $13.25 per share to acquire the company. The two companies had entered into a definitive agreement to merge. Today, it appears that agreement was not quite as definitive as thought as Ant Financial has now increased the share offer to $18/share.
Last night, MoneyGram and Ant Financial announced they had updated the agreement in an effort to fend off a competing bid by Kansas based Euronet Worldwide.
Dianrong Announces New Financial Leadership Appointments (Crowdfund Insider), Rated: B
Chinese peer-to-peer lending platform, Dianrong, announced on Tuesday the following financial leadership changes, effective immediately: Xuxia Kuang, the lender’s CFO, has been named COO. Yawen Cui has joined Dianrong as the new CFO. Kuang and Cui will report to Dianrong founder and CEO Soul Htite.
‘Fintech startups in Middle East, North Africa raised $ 100m last decade’ (Venture Burn), Rated: AAA
Fintech startups in the Middle East and North Africa have raised $100-million over the last decade, yet 28% fail in their initial years, says a new report by business support organisation Wamda and online payment gateway Payfort.
The region was home to 105 fintech startups by the end of 2015 (see featured image), with half of these having been launched since 2012. In all 30 firms are situated in North Africa. The UAE leads with 30 fintech startups, followed by Egypt with 17 and Jordan and Lebanon with 15 each.
Just 10% of fintech startups in the region account for 43% of investments and employ 55% of the 1600 employees in the sector.
How to make sure your crowdfunding campaign is successful (Destiny Man), Rated: AAA
“The vast majority of the South African market activity – $13,8m – came from peer-to-peer consumer and business lending, with the remaining $1.2 million spread across microfinance, donation-based and reward-based crowdfunding,” according to a report published by the Cambridge Centre for Alternative Funding.
In order to reap the benefits of crowdfunding, it’s important to launch a great campaign. Patrick Schofield, CEO and founder of Thundafund, a crowdfunding platform that has helped several companies start or expand, says there are several things you can do to increase the chances of success for your business.
“Spend as much time on pre-campaigning planning as you would on your actual campaign. If you’re thinking of [running a campaign] for up to 45 days spend, 45 five days getting your ducks in a row,” he says.
Approaching journalists and key influencers will get you enough people who can make noise about what you’re doing.
‘Crowdfunding is the future’(Times Live), Rated: A
In an alternative funding benchmarking report by the UK’s Cambridge Centre for Alternative Finance, published last month, South Africa was identified as the potential leader in the growth of online and peer-to-peer lending models in Africa.
In 2015 South Africa represented 18% of the total African online alternative finance market, raising more than $15-million. Kenya was the only African country ahead of it, with $16.7-million raised. South Africa’s online alternative finance market focused more on business activity and less on charitable causes.
Local IT firm Khonology has partnered with the UK’s White Label Crowdfunding to develop bespoke crowdfunding platforms for entrepreneurs here.