Friday February 9 2018, Daily News Digest

personal loans

News Comments Today’s main news: SoFi brightens startup scene in Helena, Montana. LendingTree rates Upgrade #1 personal loan. UK P2PFA gets a new head. India considering digital payments tax rebate for P2P lenders. Today’s main analysis: Why point-of-sale lending is hot. Today’s thought-provoking articles: Industrial loan company (ILC) applications may soon be seen in a positive light. P2P lending […]

personal loans

News Comments

United States

United Kingdom

European Union

International

India

Canada

Africa

News Summary

United States

Startup Fever is Catching on Everywhere (Even in this Little Montana Town) (Inc.), Rated: AAA

There is a new millennial-friendly mixed-use development with a high-end steakhouse, movie theater, and hotel. And yes, even a town of 30,000 located more than 500 miles from the closest major metropolitan areas (Salt Lake and Seattle) has an entrepreneurial ecosystem. In fact, in some ways Helena has a startup scene larger cities would be jealous of. A few years ago, SoFi, the online student loan servicer that also provides personal loans and mortgages, contracted with two local programmers to help build their platform.

One of those programmers, David Thompson, is a graduate of the University of Montana-Western, Montana Tech, and the University of Montana. David had no interest in moving to the Bay Area, and successfully convinced SoFi to locate a substantial portion of its engineering team in Helena. Today SoFi is multi-billion-dollar startup, and David is the VP of Engineering, managing more than 100 programmers and engineers out of two locations in Helena.

For the last several decades–and especially over the last few years–we’ve heard a lot about the death of small towns and middle America. However, the success of SoFi and the emerging startup scene in Helena shows the potential for tech companies to be agents of economic revitalization in small towns and cities outside of the coasts.

LendingClub Schedules Fourth Quarter 2017 Earnings Release and Conference Call (PR Newswire), Rated: AAA

LendingClub (NYSE: LC), America’s largest online marketplace connecting borrowers and investors, announced that it will report earnings for the fourth quarter of 2017 on Tuesday, February 20, 2018, after market hours. LendingClub will host a conference call to discuss the fourth quarter financial results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) on the same day.

A live webcast of the call will be available at  under the Events & Presentations menu. To access the call please dial +1 (888) 317-6003 or outside the U.S. +1 (412) 317-6061 with conference ID 8062913 ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time).

Elevate Credit Fourth Quarter and Full Year 2017 Earnings Release Available on Its Investor Relations Website (BusinessWire), Rated: B

Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced financial results for the fourth quarter and full year 2017. Elevate has posted its fourth quarter and full year earnings release to its Investor Relations webpage at 

The Company will host a conference call to discuss its fourth quarter and full year financial results on Thursday, February 8th at 4:00 p.m. Central Time / 5:00 p.m. Eastern Time. Interested parties may access the conference call live over the phone by dialing 1-877-407-0792 (domestic) or 1-201-689-8263 (international) and requesting the Elevate Fourth Quarter and Full Year 2018 Earnings Conference Call. Participants are asked to dial in a few minutes prior to the call to register for the event. The conference call will also be webcast live through Elevate’s website at 

Upgrade, Inc. Rated #1 Personal Loan by LendingTree (PR Newswire), Rated: AAA

Upgrade, Inc. (), a consumer credit platform that combines personal loans with tools that help consumers understand and monitor their credit, announced that it has been named #1 in the personal loans category for the fourth quarter of 2017 by LendingTree.

Why point-of-sale lending is hot right now (American Banker), Rated: AAA

But research conducted by banks and fintechs has found that many younger Americans are uncomfortable carrying credit card balances, partly because they saw their parents struggle with debt during the financial crisis and prefer the more certain repayment terms of installment loans.

Personal loans issued by banks — these exclude credit cards and auto and home equity loans — hit a record $807 billion at Sept. 30, according to data from the Federal Deposit Insurance Corp., up 9% from two years earlier and nearly 30% since 2012. That’s not even including the many billions of dollars of loans made by upstart online lenders that don’t end up on banks’ balance sheets.

San Francisco-based Affirm originated more than $1 billion in point-of-sale loans last year — and, increasingly, regional banks that are funding the loans, either directly or behind the scenes.

Source: American Banker

Inside Overstock.com’s financial services strategy (Tearsheet), Rated: A

For the past few months, the 19-year-old e-commerce company has been quietly building out FinanceHub, a sort of marketplace for financial services that includes existing Overstock credit cards and insurance products; loans by LendingTree, Prosper and Sofi; a robo-adviser for automated investing, as of last week — and as of Tuesday morning, a discounted trading platform.

Fintech Firms Look to Enter Banking Via Century-Old Tactic (WSJ), Rated: AAA

Financial-technology firms eager to offer banking products are eyeing a century-old model that fell out of favor during the financial crisis but could see a revival under the Trump administration.

The industrial loan company charter, available in a handful of states and particularly popular in Utah, allows nonfinancial companies to enter the banking sector without being subject to many of its restrictions, including oversight by the Federal Reserve. Companies seeking the charters must still obtain deposit insurance from the Federal Deposit Insurance Corp., which last approved insurance for an industrial loan company in 2008.

That could soon change. President Donald Trump’s pick to head the FDIC, Jelena McWilliams, suggested during Senate testimony last month that she would look favorably on new applications.

Source: The Wall Street Journal

Who Is Chris Larsen? Founder Of Ripple Tops Forbes Cryptocurrency List (International Business Times), Rated: A

According to Forbes, Larsen’s net worth is between $7.5 billion and $8 billion in cryptocurrency, in large part thanks to his massive holding of Ripple—the cryptocurrency he co-founded in 2012.

Larsen, a Stanford M.B.A. and veteran Silicon Valley player, is no stranger to the world of digital finance. Prior to his involvement in cryptocurrency, he co-founded the online mortgage lender E-Loan. The company was valued at $1 billion in 2000. In 2006, he co-founded Prosper Marketplace—the first peer-to-peer lending marketplace in the United States.

Goldman Sachs is trying to build the ultimate financial destination for the masses (Business Insider), Rated: A

Individuals looking to saddle up with the prestigious bank needed to fork over a minimum investment of $10 million for wealth management services. The typical client had more than $50 million in investable assets.

Personal Capital Launches Socially Responsible Investing (Finovate), Rated: A

Wealth tech company Personal Capital is making it easier for investors to put their money in causes that are important to them with the launch of its Socially Responsible Personal Strategy today.

Autobooks Raises $ 10M in Series A1 Funding Round (Finsmes), Rated: A

Autobooks, a Detroit, MI-based fintech startup, raised $10M in Series A1 funding.

Toyota partners with AI firm Aire to spot finance delinquency (Motor Finance), Rated: A

Toyota Financial Services (TFS) has launched an evaluation of AI software from Aire to spot customers with higher risks of delinquency.

Aire’s machine learning technology will identify which lessees have entered customer delinquency by skipping a payment, and will give TFS an estimate on how likely they are to default on further instalments.

Aire’s software has already been used by lenders, including p2p lender Zopa, in the initial credit application phase.

Confluent Continues Momentum in 2017 with 4X Subscription Growth (Digital Journal), Rated: A

Confluent, provider of the streaming platform based on Apache Kafka, today announced 2017 results, which include 4X subscription growth year over year and 98 percent customer satisfaction.

In the 2017 Apache Kafka Report, many companies reported using the distributed streaming platform for more accurate and faster decision making, reduced operating costs, improved customer experiences and reduced risk. 1 in 4 respondents work for organizations with more than $1 billion in annual sales, illustrating how quickly this technology has gained traction across large enterprises. In addition, more than 15% of respondents are processing more than a billion messages a day.

Other 2017 highlights include:

  • Raised $30 million from Sequoia, Index Ventures and Benchmark to meet global demand for streaming platforms.
  • Expanded employee base by 120 percent, added numerous offices throughout the US and extended its footprint to six additional countries.
  • Added new customers around the globe, including Alight Solutions, Capital One, Funding Circle, HomeAway and Nordea Bank.
  • Announced the general availability of Confluent Cloud, an Apache Kafka as a Service offering that empowers enterprises and developers to move faster with streaming data.
  • Surpassed 200 partners, including some of the largest Systems Integrators and Platform partners in the industry.

Fintech partnerships can work (American Banker), Rated: A

That Radius Bank in Boston would strike another fintech partnership — it announced one Wednesday with the startup Mantl, which is trying to cut down online-account openings to four minutes — is less revealing than its part in Radius’ evolving MO.

When Nathaniel Harley, CEO of Mantl, first visited Radius, he was seeking feedback on a personal financial management technology the company was working on. But he was quickly talked into changing the direction of his company.

The two companies started building an account-opening system for all digital channels in March 2017. They worked to reduce manual entry and other hassles from the account-opening process. Mantl brought in one of its own fintech partners, Alloy, to handle much of the decisions, including anti-money-laundering checks, identity verification and fraud detection. Radius and Mantl used Alloy’s workflow management tool to configure the decision-making process.

Source: The American Banker

Mulvaney can’t just kill CFPB payday rule, but here’s what he can do (American Banker), Rated: A

Banking rules cannot be rewritten overnight, and so acting Consumer Financial Protection Bureau Director Mick Mulvaney has a tall order remaking the payday loan regulation crafted under his predecessor. But observers say Mulvaney has options for altering the rule to the industry’s favor.

One option would be to refocus the rule on disclosure requirements, which would be several steps short of a repeal but more amenable to lenders than the current CFPB regulation.

Democratic senators demand answers on CFPB’s stalled Equifax data breach investigation (Housingwire), Rated: A

Did the Consumer Financial Protection Bureau kill its investigation into Equifax’s data breach that exposed the personal information of 145.5 million U.S. consumers to hackers?

On Thursday, a group of 32 Democratic senators sent a letter to the CFPB, demanding answers on the state of the bureau’s investigation into the Equifax breach.

CFPB Seeks Comment on its Enforcement Processes (The National Law Review), Rated: A

The CFPB has issued a request for information that seeks comment on how the agency can best achieve meaningful burden reduction or other improvement in the processes it uses to enforce federal consumer financial law while continuing to meet the CFPB’s statutory objectives and ensuring a fair and transparent process.  Comments on the RFI must be received no later than 60 days after the date it is published in the Federal Register, which the CFPB expects to be February 12, 2018.

In the new RFI, the CFPB now seek comment on all aspects of its enforcement processes but lists the following seven topics:

  • Communication between the CFPB and subjects of investigations, including timing and frequency of such communications and information provided by the CFPB on the status of an investigation
  • Length of CFPB investigations
  • Notice and Opportunity to Respond and Advise (NORA) process, including whether the NORA process should be mandatory rather than discretionary and the information contained in letters the CFPB may send to potential subjects of investigations pursuant to the NORA process
  • Whether subjects of potential enforcement actions should have the right to make an in-person presentation to the CFPB before the CFPB decides whether to initiate legal proceedings
  • Calculation of civil money penalties, including whether the CFPB should adopt a civil penalty matrix
  • Standard provisions in CFPB consent orders
  • Manner and extent to which the CFPB can and should coordinate enforcement activity with other federal and/or state agencies with overlapping jurisdiction

Altegris To Merge With Artivest (PR Newswire), Rated: A

Altegris, an alternative investment research and management firm, and Artivest, an alternative investment technology firm, announced today that they plan to merge under the name Artivest, pending customary corporate and regulatory conditions to closing. The joint 100-person team will service over $3 billion in client capital—immediately becoming the largest independent alternative investment technology and solutions firm for wealth managers, fund managers, and independent advisors.

SharesPost Launches Unit Focused On Initial Coin Offerings; Hedge Fund Executive John Wu To Lead Group (BusinessWire), Rated: A

Taking a next step in its mission to provide liquidity to private growth companies,SharesPost today announced the launch of its Digital Securities Group.

The Digital Securities Group will bring security token issuers and investors into the SharesPost private marketplace. Token issuers and investors will use SharesPost’s existing Alternative Trading System to invest in ICO’s and trade in digital securities in compliance with U.S. securities laws.

Lenders to allow Airbnb income on mortgage forms (MarketWatch), Rated: A

Homeowners soon will be able to count income they earn from Airbnb Inc. rentals on applications for refinance loans.

A new program — expected to be announced on Thursday by Airbnb, mortgage giant Fannie Mae and three big lenders — will allow anyone who has rented out property on Airbnb for a year or longer to count some or all of that money as income.

SEC Exams to Focus on Disclosures, Robos, Cryptocurrencies (Financial Advisor IQ), Rated: B

In 2018 the SEC’s Office of Compliance Inspections and Examinations plans to pay closer attention to matters involving retail investors, particularly when it comes to disclosures, and zero in on cryptocurrencies, initial coin offerings and secondary market trading, the regulator says in a press release.

The regulator will also continue monitoring digital advice platforms, with a special focus on their compliance programs, including algorithm oversight, investor data protection and disclosures of conflicts of interest, according to the exam priorities. The SEC has made progress in the ratio of investment advisors it examines each year, from just 8% five years ago to 15% in fiscal year 2017, the regulator says. In 2018, the SEC plans to target those advisors it has never examined before, according to the regulator.

Former Keller Williams CEO Chris Heller joins loanDepot brand family as CEO of mello Home (loanDepot), Rated: B

LD Holdings Group, LLC, parent company of loanDepot, the nation’s fifth largest retail lender, today appointed top real estate executive Chris Heller to head its recently-launched mello Home business. Combining digital simplicity and smart local advice, mello Home seamlessly connects home buying, financing, and improvement services into a single consumer experience.

Fintech looks to the future of financial advice at T3 (InvestmentNews), Rated: B

If the theme of the 2017 T3 Conference was the fiduciary rule, 2018 was all about the future of financial advice.

Quovo launched Cue, a new alerts engine that leverages Quovo’s aggregation technology to notify financial advisers about account activity and client milestones.

MoneyGuidePro announced a new partnership with MX, a data aggregation provider, that lets advisers bring held-away assets into the financial planning software.

 

United Kingdom

UK P2P Finance Association Announces a New Leader (Lend Academy), Rated: AAA

It was through the work of the P2PFA, led by Christine Farnish, that these regulations were sensible and promoted the growth of the industry there. And while this initial regulatory framework is currently being reviewed by the FCA, today, the UK is one of the most competitive markets in the world in no small part because of these initial regulations.

Paul Smee brings more than 17 years experience in leading trade bodies in the UK. Previously, he was Director General of the Council of Mortgage Lenders for six years so he comes with experience leading finance trade bodies. He looks like a great choice to take over from Christine.

City Moves for 9 February 2018 – who’s switching jobs at Lendy, RegTek.Solutions and M&G? (City A.M.), Rated: B

Lendy, one of Europe’s leading P2P secured property platforms, is pleased to announce the appointment of Andrew Wawrzyniak as its new head of finance. Andrew was previously head of finance at Fund Partners, a leading fund manager, which specialises in the operation of collective investment schemes.

RegTek.Solutions, the market-leading control and compliance software provider for global trade and transaction reporting, has appointed Rob Bernstein as chief financial officer (CFO).

Rebuildingsociety partners with Leeds Council to support local businesses (P2P Finance News), Rated: A

PEER-TO-PEER business lender Rebuildingsociety has secured an agreement with Leeds City Council whereby the local authority funds loans through its platform.

The council will review business loan requests from companies with an LS postcode prefix, consider the industry and location of the company, and contribute to the loan amounts required by suitable applicants.

European Union

P2P Lending Is Becoming A Significant Income Source For Young Investors (Crowdfund Insider), Rated: AAA

According to Robo.cash, P2P lending is turning to a significant source of additional income for the growing number of the European investors.

The online lending platform also confirmed:

“The majority of investors are in the age groups: 25-34 years — 40%, 35-44 years — 31%, 45-60 years — 20%. The less number is the age of 18-24 years (6%) and 61 plus (3%). These figures are supported by the employment of investors: employees — 72%, entrepreneurs — 15%, students — 6%, retiree — 2%. At the same time, the most investors are just getting acquainted with P2P-services (52%) and the comparable number already has at least one-year practice: 1-3 years — 34% and over 4 years — 13%.”

Is Lithuania the most fintech-friendly destination in Europe? (Finextra), Rated: A

The country has been actively promoting itself as gateway destination to the European marketplace for non-EU firms and British startups fleeing Brexit. Registering a company takes merely three days, while getting a Payment Institution or Electronic Money Institution license takes only three months, two-to-three times faster than in other EU jurisdictions. Other perks include remote Know Your Customer (KYC) procedures, low profit tax, startup visa options and a sandbox regime for fintech startups in their first year.

The country also boasts a growing talent pool of up to 31,000 trained IT professionals with a further 8000 in the pipeline.

Lithuania Registered 35 New Fintech Companies in 2017 (Crowdfund Insider), Rated: B

This week, Invest Lithuania released the Lithuania Fintech Report 2017, which revealed that a total of 117 fintech companies were operating in the country in 2017, with 35 of them being registered last year.

International

IOU financial partners with goEBT to offer funding to network of 25,000 convenience store owners (Business Insider), Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”; TSX-V:IOU), an online lender to small businesses (IOUFinancial.com), is pleased to announce a strategic partnership with Marietta, GA-based c-store solutions provider goEBT (goEBT.com).  Through this strategic partnership, goEBT’s network of 25,000 convenience store owners nationwide will be able to access IOU’s fast, convenient, non-collateral funding solutions.

LENDDO AND EFL TEAM UP FOR FINANCIAL INCLUSION (#Include1Billion), Rated: A

Our companies come together united by the common vision of providing financial inclusion for more than one billion new and underserved individuals across the globe. We will together provide a suite of credit scoring and identity verification products to more than 20 emerging markets.

Our companies have individually facilitated over 5 million credit assessments since inception, allowing more than 50 financial institutions to disburse over $2 billion USD in credit to people with limited information.

The first joint product offering is already live in Asia and Latin America, with additional products and features scheduled for release in the coming months.

From #Include1Billion

Fuse Business Loans from Mynt began working with LenddoEFL to assess credit risk for its clients that were 80% unbanked.

Foxconn’s Gou said to invest in US crypto merchant bank venture (EJ Insight), Rated: A

Terry Gou, the billionaire chief of Taiwanese electronics giant Foxconn, is said to have invested in a cryptocurrency merchant bank being set up by Mike Novogratz, a former Wall Street macro hedge fund manager.

Citing a source familiar with the matter, Bloomberg reported that Novogratz has raised about US$250 million for his cryptocurrency merchant bank venture through a private placement.

India

Google search bias fine, Swiggy funding, Digital payments tax rebate & more (ET Tech), Rated: AAA

The government might consider giving tax rebates to merchants accepting payments digitally in order to promote the overall fintech sector, which is at its infancy at present but growing at a rapid pace, suggested the Reserve Bank of India.

Talking about the fintech sector the RBI has identified tech startups working in the space of peer-to-peer lending, blockchain, big data, smart contracts, robo advisors and online aggregators.

Read more.

HOW TO FUND YOUR HIGHER STUDIES (Money Today), Rated: AAA

Traditionally, one’s option was limited to getting an education loan from a public sector bank. Now that the demographics are favourable and the education loan market has the potential to grow, non-banking finance companies (NBFCs), fintech players and peer-to-peer (P2P) lenders are jockeying for a piece of the market.

Seek more funding: Education loans are part of the priority lending category, but unlike the US, there is no provision for student loan waiver in India. It means your loan will not go away until you pay it off. Try and find out if there is any other source of funding available, including financial aid, bursary and scholarship or upfront savings, which will bring down the loan amount.

What Banks Offer

Most of them offer education loans for studying medicine, engineering or management at graduate and post-graduate levels or for pursuing further studies in India and abroad. Some also provide categorised loans. For instance, State Bank of India (SBI) offers Scholar Loan for students who get admitted to premier institutions like IITs, IIMs, NITs and AIIMS, and a Global Ed-Vantage loan for studying in global counterparts. Bank of Baroda offers Baroda Scholar loan for studying abroad and Baroda Gyan loan for higher studies in India while separate schemes are available for courses conducted by the country’s top institutions.

Source: Money Today

Fintech/P2P Players

Landing an education loan may not be easy anymore, given the spurt in defaults. And that is where the new-age fintech firms and P2P lenders see a lucrative opportunity. “For those who fail to qualify for education loans from banks and NBFCs, P2P lending platforms can be an alternative way to borrow,” says Gaurav Aggarwal, Associate Director, Unsecured Loans, at Paisabazaar. In other words, aspiring students can raise personal loans from banks or fintech players like MoneyTap and LoanTap, or P2P lenders like Faircent and CreditMantri to cover their educational expenses.

What Lies Ahead For India’s Fintech Sector? (CXO Today), Rated: A

To understand what lies ahead for India’s fintech sector, it makes sense to understand the fintech growth is expected to boom in the Asia Pacific region. A Frost & Sullivan report predicts that the region is expected to grow at a CAGR of 72.5% from 2015 to 2020, reaching US$72 billion.

According to Quah Mei Lee, Industry Principal, ICT, Asia-Pacific, the mobile payments market in Singapore was estimated to be worth US$1.4 billion in 2017. The market is still small but is growing fast.

Indian digital payments industry is expected to reach $700 billion by 2022 in terms of value of transactions.

It is expected that more than 80% of the urban population in India will adopt digital payments as a part of their routine by 2022, and 70% of the retail chains will adopt the same.

Canada

A Canadian Way to Access US Small Business Lending (Stockhouse), Rated: AAA

Enter IOU Financial.  As “online lending” has become a 21st century reality, a financial niche has sprung up with online lending institutions that are prepared to cater to small businesses and provide badly needed capital, efficiently and affordably.

Compared to the above, IOU Financial provides easily manageable, working capital term loans for small business, and does so:

  • Quickly
  • Efficiently
  • Affordably

The speed of IOU’s loan application process is a big draw for small business owners.  IOU’s application generally takes roughly three to five minutes to complete.

Source: Stockhouse

 

Grounded Kitchen & Coffeehouse is OnDeck’s Small Business of the Month (PR Newswire), Rated: A

OnDeck (NYSE: ONDK), the online lender to small businesses, today announced that Grounded Kitchen & Coffeehouse, owned by Amir Rahim, has been selected as the OnDeck Small Business of the Month for February, 2018. The Ottawa-based restaurant is the first small business in Canada to earn the OnDeck spotlight award.

Africa

Glaring Ponzi Schemes In Ghana Now (Modern Ghana), Rated: A

So assuming I have $1000.00 I have no use for and would want to make a little interest on, All I have to do is go unto one of these platforms to match me with someone in need of $1000.00. These platforms because of the high risk they take (borrowers don’t provide tangible collaterals) usually charge higher interest and in return given higher interest to lenders than Treasury Bills will normally do. This idea is supposed to be easy and help people financially as there is gap between loans needed and financial institutions willing to give (“The two largest peer-to-peer (P2P) lending platforms, Prosper and LendingClub founded in 2005 and 2006 respectively, have originated over $6 Billion in loans to date. Although they have only begun to scratch the surface of the $3 trillion consumer debt market” Nav Athwal Cofounder and CEO of RealtyShares, a crowdfunding for real estate platform). Yet like most good things miscreants, hooligans and hoodlums find a way to make the system corrupt.

These swindlers promise up to a 100% interest rates within 5 working days. So they lure greedy but naïve people to roll in cash through mobile money. With a Minimal amount of GHC100.00 you get registered and paired with another person. You’re required to send the money to this person who they claim registered 5 days ago and the said day is the day of maturity.

Ways to spot financial scams and Ponzi schemes
1. If your interest is too good to be true, then its probably a lie. When you’re being offered an interest bigger than the T Bills in lending you should be wary and do due diligence.

2. They usually don’t tell the project in which your money will be invested.

3. Pressurised to respond quickly? 4. Are the contact details vague?

Authors:

George Popescu
Allen Taylor

Thursday March 9 2017, Daily News Digest

Thursday March 9 2017, Daily News Digest

News Comments Today’s main news: Kabbage’s prices $525M securitization. LendIt announces industry award winners. AlphaFlow launches automated real estate investing platform. Zhong An to sell 5-10% stake ahead of IPO. Ant Financial invests in Mynt. Atom Bank raises $102M for mobile-only bank. Today’s main analysis: Is the short-term credit cycle ready to roll over? TU bolsters fraud prevention exchange. Today’s thought-provoking […]

Thursday March 9 2017, Daily News Digest

News Comments

United States

  • LendIt Awards winners and PitchIt competition. GP:”In my eyes, Scott Sanborn winning best executive of the year is the award that stands out the most. The second award that was interesting is for Zopa winning best consumer lender award while also being the oldest (started in 2005!). Note: Zopa was also nominated among the most innovative platforms. Being the oldest, the one that stands out and among the most innovating is outstanding and certainly worthy of an award. A healthy industry that is growing also needs its celebrations. Having awards is a great way to bond the industry together and make it into an industry celebration. ”  AT: “Congratulations to all awards winners.”
  • Kabbage prices $525M securitization. GP:” ABS on small and medium business loans are less usual than on unsecured person. This securitization seem quite hot. Senior are anticipated to be rated A by Kroll. Expected to close arond March 20. Significantly oversubscribed. We can conclude that the SME securitization market is looking strong. We should look at the next OnDeck securitization with this in mind and hopefully be able to differentiate the market trends vs the company effect in that securitization. “
  • AlphaFlow launches new automated real estate investing platform.
  • Second sign in as many days that the short-term credit cycle will turn over. GP:” The articles on AlphaFlow are a mixed bag. One should critically evaluate the contents beyond the title. The defaults in auto and p2p are inching up as TransUnion showed recently. But very little and I wonder if it’s really significative. In p2p the defaults had inched up last year but it seemed to have been due to companies focused on growth too much. Recently OnDeck’s reserves for losses had to more then triple, however we haven’t seen this in their competitors. Perhaps not yet. I would conclude that we should watch what is going on but not panic, yet. “
  • TU bolsters fraud prevention exchange. AT: “As the number of consumers with personal loans rises the potential for fraud increases. This should be an area of concern for all lenders.”
  • Data aggregation for lending decisions.
  • CreditEase addresses top FinTech trends at LendIt.
  • Election years can disrupt Fintech too. AT: “Regulation is going to be a big discussion for the industry this year and next.”
  • StreetShares partners with Nor-Cal FDC.
  • Qapital raises $12M to expand Fintech app to more areas.

United Kingdom

European Union

China

India

Asia

News Summary

United States

Kabbage prices $ 525m securitisation (Finextra), Rated: AAA

Kabbage, a pioneering financial services, technology and data platform, today announced that on March 7, 2017, it priced $525 million of fixed-rate, asset-backed notes in a private securitization transaction.

The facility is expandable to $1.5 billion. The notes will be issued in four classes by Kabbage Asset Securitization LLC, a newly formed, wholly owned subsidiary of Kabbage Inc. The senior class of notes is anticipated to be rated “A(sf)” on the closing date by Kroll Bond Rating Agency (KBRA). Guggenheim Securities is serving as sole structuring advisor and initial purchaser of the notes. The securitization is expected to close on or about March 20, 2017, and is subject to customary closing conditions.

The securitization was significantly oversubscribed with interest from top-tier institutional investors. This represents the largest asset-backed securitization of small business loans in the online lending industry, next to Kabbage’s prior, expandable, ABS note issuance in March 2014.

LendIt Names PitchIt Competition And LendIt Industry Award Winners (PR Newswire), Rated: AAA

LendIt, the world’s largest show in lending and fintech, today announced the startup winner for its fifth PitchIt competition and 18 winners for its first LendIt Industry Awards in various categories including Innovator of the Year, FinTech Woman of the Year and Executive of the Year.

PitchIt is a leading global competition for fintech startups to earn mentorship, endorsement and exposure to institutions, investors and broad visibility. Out of eight PitchIt finalists, the judges winner as well as the audience winner was awarded to Nova Credit, the world’s first cross-border credit reporting agency. Nova Credit is fundamentally changing the way immigrants secure loans by enabling individuals to transfer their overseas data.

  • Best Journalist Coverage – George Popescu, Editor in Chief, Lending Times
  • Emerging Real Estate Platform – PeerStreet
  • Top Fund Manager – Prime Meridian Capital Management
  • International Innovator of the Year – Trulioo
  • Top Law Firm – Chapman and Cutler
  • Top Accounting Firm – Deloitte
  • Top Fintech Equity Investor – QED Investors
  • Most Innovative Bank – Cross River Bank
  • Top Service Provider – First Associates Loan Servicing
  • Best in Show – Deloitte – awarded to the best exhibitor at LendIt, judged on booth design and impression as well as staff conviction and enthusiasm.

AlphaFlow Launches New Investment Platform to Bring Automated Investing to Real Estate (BusinessWire), Rated: AAA

AlphaFlow, the leader in passive online real estate investment, today announced it has launched AlphaFlow Managed Portfolios. The company will build, manage, and rebalance a portfolio of 75-100 real estate loans for investors. This marks the first automated real estate investment service of its kind.

AlphaFlow provides clients with a first-of-its-kind set it and forget it automated service to build and manage a real estate portfolio. The company’s founders have been at the forefront of the disruption in real estate investing. In 2013, Sturm co-founded RealtyShares, one of the largest real estate crowdfunding platforms. Three years later, AlphaFlow was the first to offer funds that allowed investors to participate in loans across multiple real estate crowdfunding platforms with a single investment. AlphaFlow Managed Portfolios bring similarly innovative benefits to investors, including daily portfolio rebalancing that automatically reviews portfolios on a daily basis for opportunities to reallocate investments in order to increase diversification.

While many investors have embraced online equity investing, the real estate industry has traditionally been slow to change. As a result, the options available today are fairly limited for passive investors. AlphaFlow believes that in the next ten years, everyone will have some type of real estate in their investment portfolio.

The Second Sign In As Many Days That The Market Is Ready To Roll Over (Seeking Alpha), Rated: AAA

It has now been widely known that there is a bubble in the United States automobile market and recent exposes about subprime financing and recent commentary from dealerships about heavily discounted and incentivize selling have led us to this conclusion in a relatively straightforward fashion.

We also believe that the first loan default cracks would show in peer-to-peer lending, a riskier and lower credit worthy form of lending that exists in the spot where bankers simply used to not lend. Just days ago, we saw Lending Club, arguably the most popular peer-to-peer lender, report that delinquencies had risen significantly.

More importantly, this news pushes us further into our thesis that the short term credit cycle is likely about to turn over.

This was always a two pronged thesis: peer to peer lending and the auto market. With the second piece now falling into the puzzle, we think this is a great time to reiterate our notion that the market has hit its peak and that we think this is a great time to get hedged. In addition to having about 60% of our portfolio long and about 40% short at this time, we have also added some short-term S&P 500 puts to further hedge our long positions.

TransUnion Bolsters Fraud Prevention Exchange as Online Fraudsters Continue to Impact Personal Loan Delinquency Rates (Yahoo! Finance), Rated: AAA

Newly released TransUnion (TRU) data found that as personal loan delinquency rates rise, online fraud, which includes loan stacking, continues to make significant contributions to these increases. Serious delinquency rates (90+ days past due) at the conclusion of 2016 for personal loans originated in 2015 rose to 6.22%, up nearly 3% from the year-end 2015 delinquency rate of 6.05% for loans originated in 2014.*

Serious delinquency rates (90+ days past due) for personal loans with characteristics of online fraud stood at 11.02% at the end of 2016 for loans originated in 2015. Online fraud includes fraudulent loan stacking, which involves attempting to secure multiple loans from one or more lenders within a short period of time. While down from the 11.81% rate at the conclusion of 2015 for loans originated in 2014, it represents even more borrowers because of the continued growth in the personal loan space.

To combat online fraud, TransUnion has further expanded its Fraud Prevention Exchange to offer insights from the entire network of available TransUnion customer data — not just from Exchange members. These newest updates were unveiled today at LendIt USA 2017, a lending and FinTech conference.

The Exchange enables lenders to:

  • Reduce fraud losses without impacting the consumer experience and lending timelines.
  • Receive real-time alerts (within seconds) to mitigate instances where lenders don’t discover problematic accounts until days or weeks have passed and losses may have been incubating unknowingly inside live loans.
  • Utilize TransUnion’s vast network of customers inside and outside of the Exchange for more insight into originations fraud.
  • Quickly adjust and adapt to evolving fraud threats and trends.

Data aggregation’s new frontier: Lending decisions (American Banker), Rated: A

Financial data aggregation, long used to power digital personal financial management tools, has found a more moneymaking role — speeding up underwriting decisions.

Rather than faxing in documents or submitting PDFs of data downloaded from multiple websites, consumers and small-business owners are granting online lenders permission to use aggregation technology to grab their financial transaction data.

So long as the technology is working as intended, lenders will gain something they may have not been privy to before — years’ worth of transaction data, such as cash flows that aggregators think lenders should crunch as part of their credit analysis in addition to credit history data. And sure, banks may already count some applicants as customers and have access to their financial transactions. However, most consumers have multiple bank accounts that lenders would also need to mine.

Lenders in other countries like Australia and Europe appear to be further along than U.S. banks — especially in building open application programming interfaces to simplify the flow of data among apps.

CreditEase Addresses Top FinTech Trends at LendIt USA 2017 Conference in New York (Yahoo! Finance), Rated: A

CreditEase, China’s leading fintech company announced today that its subsidiary company, Yirendai (YRD), an leading online digital consumer financial service platform, together with CreditEase Fintech Investment Fund and CreditEase Offshore Private Credit Fund (“OPCF”) delivered a series of keynote speeches at the 2017 LendIt USA conference in New York from March 6 to 7.  LendIt annual conferences are recognized as one of the largest global fintech industry events dedicated to connecting the global fintech and lending communities.

On the main stage, Yirendai executives delivered a keynote speech named From Big to Strong: China FinTech Entering a New Era. Yihan Fang and Yang Cao of Yirendai shared with the audience the latest fintech industry trends in China, regulatory environment of online marketplace lending in China, and industry’s current challenges. In addition, Yirendai announced the launch of Yirendai Enabling Platform (“YEP”), a technology platform that enables partner companies to utilize Yirendai’s data acquisition, anti-fraud technology, as well as customer acquisition capabilities, to help optimize industry’s efficiency and enhance customer experience.

Anju Patwardhan, Senior Partner of CreditEase Fintech Investment Fund and member of Investment Committee delivered a keynote speech on financial inclusion issues for the middle class and also discussed the latest trends in fintech globally. CreditEase Fintech Investment Fund, launched in December 2015, is a venture fund investing in growth-stage fintech companies globally. The Fund has an equivalent of USD 1 billion in total committed capital.

LendIt: Election years can disrupt fintech, too (Housingwire), Rated: A

Congressman Patrick McHenry, a representative of North Carolina’s 10th congressional district and a member of the Republican Party, gave one of the first major speeches on the topic. Congressman McHenry has been a vocal proponent of fintech regulation overhaul and he discussed his priorities, beginning with the modernization of infrastructure underlying the IRS income verification form (4506T), which is used by lenders to make underwriting decisions (the form is currently manually handled by the IRS and takes 2- 8 business days for processing).

A counter-point to this speech was provided by Amias Gerety, who served in the U.S. Treasury during President Obama’s time in office. He outlined the ways in which the Treasury Department currently engages with emerging fintech companies through discussions, white papers and, eventually, changes in policy.

He addressed some of the popular requests of fintech companies including the demands for a “regulatory sandbox” for startups to innovate without the shackles of regulation.

Lastly, he discussed the shadow of the crisis on regulators’ minds as it relates to financial innovation, since many of the products that caused the 2008 recession were considered  “innovative” at the time. He encouraged companies to think about innovating across the whole spectrum of the customer value chain of acquisition, user experience, underwriting, funding and servicing / collections, since the last two stages of funding and servicing / collections tended to get overlooked during a growth cycle but tend to result in “immense bad behavior” during a downturn.

The third notable speech for the day was delivered by Thomas Curry, the Comptroller of Office of the Comptroller of the Currency. He highlighted the power of  “responsible innovation” by fintech companies to expand financial inclusion.

He confirmed that the OCC has the necessary authority and highlighted their capabilities, including “…experienced examiners who specialize in banking technology, have expert knowledge of payment systems, credit, and consumer protection, and know where companies can face pitfalls.”

He confirmed that the OCC has the necessary authority and highlighted their capabilities, including “…experienced examiners who specialize in banking technology, have expert knowledge of payment systems, credit, and consumer protection, and know where companies can face pitfalls.”

StreetShares Partners with Nor-Cal FDC to Serve California Veteran, Small Business Owners and Government Contractors (PR Newswire), Rated: A

As part of the statewide California bizWin™ and VetBizWin™ Initiatives, StreetShares has partnered with Nor-Cal FDC (Northern California Financial Development Corporation) to provide contract financing and small business lending solutions to California small and veteran-owned businesses.

As a Nor-Cal FDC premium partner, StreetShares will work with the Nor-Cal FDC Small Business Finance Support Team to assist small business and veteran business owners in obtaining funding needed to win new opportunities.

Qapital Raises $ 12M To Expand Its Fintech App Into More Areas (PYMNTS.com), Rated: A

Qapital, the FinTech startup, raised $12 million in venture funding to expand its app that enables users to make goals and save money to reach those goals.

With the app, users can integrate their checking, savings and credit card accounts, so in addition to setting financial goals, they can stay on top of their finances.

By including debit cards into the product, the report noted that it gives the startup a new revenue stream, because it can make money from the interchange fees.

United Kingdom

Zopa bags top consumer lender award (P2P Finance News), Rated: AAA

ZOPA reaffirmed its leading position in the peer-to-peer consumer space last night as it won the accolade of top consumer lending platform at LendIt’s awards in New York.

The world’s oldest P2P lender fended off competition from US consumer-finance heavyweights such as SoFi and Avant, bagging top scores on loan performance, volume, growth, and product diversity from a panel of 30 industry experts.

The new award caps off a bumper month for the platform, which posted record lending figures for February. It originated more than £81m of new loans last month – £24m more than the same month last year.

Forming new partnerships will be a key strategy going forward, according to Zopa’s chief product officer Andrew Lawson.

The P2P platform, which has so far focused exclusively on unsecured lending, is also looking to expand its range of loans and maturities. As Peer-to-Peer Finance News previously reported, this may include a move into the secured auto finance space.

Atom Bank raises $ 102M at $ 320M valuation for a mobile-only bank for millennials (TechCrunch), Rated: AAA

Atom Bank, a startup out of the U.K. that has built a mobile-only bank targeting consumers between the ages of 18 and 34, has raised another £83 million ($102 million) in funding led by BBVA, the Spanish bank and owner of Simple in the U.S. The funding gives Atom a post-money valuation of £261 million ($320 million), TechCrunch has confirmed with the company. BBVA also led Atom’s previous $128 million round in November 2015.

Robo-advice case study: Munnypot (Banking Technology), Rated: A

Munnypot looks like the archetypal disruptor. It is a sophisticated robo-advice service that allows consumers to manage their savings digitally. The platform makes straightforward and easy to understand financial advice available to everyone, at a fraction of the cost of most financial advisors or wealth managers.

First, from 2012, regulatory changes were introduced to provide much greater transparency to consumers, particularly around pricing. These changes have, however, made advice less affordable for people without large savings pots. This has contributed to the “advice gap” of 16 million people in the UK who could take advantage of financial advice if it were simpler and cheaper.

Second, the UK’s simplified tax rules similarly paved the way for providing advice to consumers on a range of more straightforward financial products.

Third, changing customer behaviour means most people are now comfortable with using technology for more and more purchases, whether via websites or apps.

Alternative lenders berate Chancellor for ineffective first budget (AltFi), Rated: A

Stuart Law, CEO and co-founder of secured business lending platform Assetz Capital, has berated Philip Hammond for delivering no news of any import for small businesses – “or indeed their lenders” – in his first budget as Chancellor.

Law said that Hammond has missed a chance to remove a “fatal flaw” from the Innovative Finance ISA tax wrapper, which allows investors to shelter peer-to-peer investments from income tax. The existing rules do not allow investors to spread their annual ISA allowance across multiple peer-to-peer platforms, which Law believes is making diversification “very difficult”.

Ex-ING Direct boss joins RateSetter board (Investor Daily), Rated: B

Peer-to-peer lender RateSetter has appointed former ING Direct chief executive Vaughn Richtor to its Australian board of directors.

European Union

PAYPAL FUNDS FINTECH PROF ROLE (Delano), Rated: AAA

The FNR Pearl chair in fintech will be jointly funded over five years by online payment giant PayPal and the National Research Fund (FNR), the government said in a press release following the signing of a memorandum of understanding on 6 March.

The chair will be established at the University of Luxembourg’s Interdisciplinary Center for Security, Reliability and Trust (SnT).

Personetics to Present Its Cognitive Banking Applications at Fintech 2017 in Zurich, Switzerland (Yahoo! Finance), Rated: A

Personetics, the leading provider of cognitive applications for the financial services sector, will present at Fintech 2017, Switzerland’s most influential fintech conference, which will take place in Zurich 9 March.

Personetics will be presenting a session entitled “Personalized Guidance: Turning Customer Data into a Delightful Customer Experience” at 10:50.

China

Zhong An plans to sell 5-10 percent stake ahead of IPO (Yahoo! Finance), Rated: AAA

Zhong An Online Property and Casualty Insurance plans to sell 5-10 percent of the company to a couple of strategic investors, to raise up to 10 billion yuan ($1.45 billion), ahead of a planned initial public offering in mainland China, according to four people with direct knowledge of the matter.

China’s first internet-only insurer, whose current major shareholders include two of China’s largest Internet companies – Alibaba Group’s Ant Financial affiliate with 16 percent and Tencent Holdings Ltd with 12 percent – is in early talks with potential investors, according to the sources who declined to be named.

China’s Biggest Blockchain Backer Launches Startup Accelerator (CoinDesk), Rated: A

A blockchain venture backed by Chinese conglomerate Wanxiang Group has launched a new startup accelerator.

The kick-off, which formally took place on 22nd February, comes soon after Wanxiang pledged to spend as much as $30bn on a smart cities initiative, set to be invested over a seven-year period. As part of that plan, Wanxiang, best known as the country’s biggest makers of automotive parts, said it would look to fund blockchain entrepreneurs.

The investors would be expected to commit at least 1 billion yuan each and the new funds would be used by Zhong An to expand its business and buy time before securing a green light from regulators for the IPO, one of the people said.

India

No misuse of Aadhaar biometrics, says UIDAI (The Indian Express), Rated: A

The Unique Identification Authority of India (UIDAI), which maintains the database of Aadhaar numbers, said on Sunday that there was no misuse of Aadhaar biometrics, which allegedly led to identity theft and financial loss.

Furthermore, with reference to the incident of misuse of biometrics reported in a newspaper, the UIDAI said it was an isolated case of an employee working with a bank’s business correspondent’s company making an attempt to misuse biometrics, which was detected by the authority’s internal security system and subsequently actions were initiated under the Aadhaar Act.

Asia

Ant Financial invests in Globe Telecom’s Mynt (Telecomasia.net), Rated: AAA

Alibaba’s Ant Financial is making its first foray into the Philippines via partnership with Ayala and an investment into Globe Telecom’s Fintech business unit Mynt.

Alibaba’s Ant Financial is making its first foray into the Philippines via partnership with Ayala and an investment into Globe Telecom’s Fintech business unit Mynt.

The flowering field of fintech (Infographic) (Tech in Asia), Rated: AAA

So, why are fintech firms so popular? What makes them better than other finance companies? One of the key reasons is that they have very stable and predictable business models, making people feel safe about their products and/or services. Investors are also attracted to businesses with predictable business models, as the risk is lower. Fintech companies are also low-cost yet deliver exceptional service.

 

Authors:

George Popescu
Allen Taylor