Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday May 23 2018 Daily News Digest

Interest rates & new delinquencies on CC debt

News Comments Today’s main news: SoFi to get into crypto investing by 2019. How Goldman Sachs predicts economic slumps. How SoFi personalizes the mobile experience. A Monzo case study. Klarna acquires Shop.co. Today’s main analysis: More Americans are struggling to pay with credit cards. Today’s thought-provoking articles: 4 in 10 Americans can’t cover a $400 emergency expense, Fed survey […]

Interest rates & new delinquencies on CC debt

News Comments

United States

United Kingdom

European Union

International

India

Other

News Summary

United States

SoFi will get crypto investing by 2019, says CEO Anthony Noto (CNBC) Rated: AAA

SoFi CEO Anthony Noto says the “modern finance” company wants members to be able to invest in cryptocurrency as soon as 2019.

“We want to accelerate our investment in some new products, one of which is our wealth products, and we want to add cryptocurrency to that,” Noto said on CNBC’s “Power Lunch.”

Goldman Sachs has a novel method for predicting the next economic slump  (Business Insider) Rated: AAA

You might remember that Goldman Sachs is lending to subprime borrowers. Turns out, it’s all part of a plan to help predict the next credit cycle.

In February, Goldman Sachs surprised Wall Street when it said that more than 80% of borrowers for its Marcus consumer-lending product had a FICO score of more than 660 at year end. The implication was that nearly 20% had a score of less than 660, placing them in a group often referred to as subprime.

In September, the bank said it saw a $1 billion revenue opportunity in the Marcus loan-and-deposit platform based on a $13 billion lending opportunity over three years. Whether it reaches that goal will depend in part on how those subprime borrowers behave.

More Americans are struggling to pay their credit cards (Business Insider) Rated: AAA

Interest rates, which influence the cost of borrowing, are on the rise after the Federal Reserve kept them near zero for years. That period of super-low interest rates achieved one key outcome: encouraging Americans to borrow, spend, and help grow the economy after the Great Recession.

Last June, credit-card debt finally hit a new high. But the share of borrowers who make payments more than 30 days late is rising along with interest rates.

Source: Business Insider

The Fed is set next month to raise its benchmark rate for the seventh time since late 2015.

Source: Business Insider

How SoFi is personalizing its mobile experience (Tearsheet) Rated: AAA

SoFi is personalizing its digital customer experience by fusing event planning, career services and personal finance insights inside its mobile app.

SoFi is joining a group of financial institutions that are letting customers aggregate accounts to get a full financial picture — even if they’re not with the same institution, with recent examples including Citi and HSBC.

As it grows its digital offerings, the company is adding services to meet the needs of a fast-growing customer cohort. SoFi currently has 500,000 customers — up 200,000 from last year.

 

 

 

50. SoFi (CNBC) Rated: A

This has been quite a year for SoFi (short for Social Finance).

The company claims to have 500,000 members and has made $25 billion in loans to date. SoFi has raised $2.1 billion in funding, including $500 million in a round led by Silver Lake Partners. In early interviews after taking over the top spot, Noto spoke about eventually taking SoFi public, but did not outline a timetable.

For millennials, it’s about having a house, children and retiring early (CNBC) Rated: A

Julia Boorstin live with SoFi CEO Anthony Noto discusses running what he describes as a “modern day” financial services company.

Watch the interview here

SoFi Makes Graduation From Student Debt An Epic Experience (PR Newswire) Rated: A

In a video released today on YouTube, SoFi made that moment of relief from student debt a grand occasion for one Midwestern woman. The company surprised Candice, a SoFi member who had refinanced her student debt, with an epic surprise “debt graduation” ceremony with friends, family, and some unconventional surprises planned by the company, together with production and entertainment studio GenPop.

Guaranteed Rate Partners with DocMagic to Cut Closing Time (Florida Newswire) Rated: A

DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that retail mortgage lender Guaranteed Rate can now cut closing time by electronically signing mortgage closing documents in advance.

Guaranteed Rate has branded the solution FlashClose, which allows customers to opt-in, review and complete most documents in advance of the notary arriving, saving an hour or more at the closing table – with some averaging a mere 10-minute appointment to provide inked signatures.

First wave of neobanks resets for new offensive (American Banker) Rated: A

BankSimple (now just called Simple) was bought by BBVA and went through a painful process of migrating accounts to the big bank’s systems; its founder recently announced he’s leaving. Moven became a seller of software to large banks including TD Bank and Westpac, while still maintaining its own mobile banking service. Varo Money has been trying for almost a year to get a banking license. Chime remained independent (in partnership with The Bancorp Bank) but is going through growing pains.

This year, all are taking up their swords again, renewing an anti-bank message of helping consumers lead financially healthy lives, with fewer fees and more helpful products and software than traditional banks. Following is a look at how the neobanks are fighting back.

Cadre seeks at least $ 100M from SoftBank (The Real Deal) Rated: A

Real estate crowdfunding platform Cadre is seeking at least $100 million from a fund started by the SoftBank Group.

Representatives for the SoftBank Vision Fund met with a top executive from Cadre recently, Bloomberg reported. The fund gets nearly half of its $100 billion from the Saudi Arabian government and at least $15 billion from the United Arab Emirates.

Lending Express garners $ 2.7 mln (PE Hub Network) Rated: A

Lending Express, the only AI-powered marketplace for business loans, today announced the securing of a $2.7 million investment round led by Entrée Capital, iAngels, and existing investors. The funds will be used to build out their innovative loan-matching technology and scale up operations in the United States and Australia.

How fintech gave this SBA lender an edge (American Banker) Rated: A

Add Seacoast Banking in Stuart, Fla., to the list of community banks that now believe in working with fintechs.

The $6 billion-asset company is gaining traction in Small Business Administration lending after partnering with SmartBiz Loans to speed its approval process. The move halved the interval from application to funding, to as little as 10 days, said Julie Kleffel, Seacoast’s community banking executive.

Four in 10 can’t cover an emergency expense of $ 400, Fed survey finds (Market Watch) Rated: AAA

The Fed’s new survey of household economics and decision-making found 41% could not cover a $400 emergency expense using cash in 2017. That’s actually a slight improvement, since 44% could not in 2016, 46% could not in 2015 and only 50% could in 2013.

Those that couldn’t afford the expense turn to credit cards or borrowing from family or friends, while only 5% would turn to a payday loan or similar product.

Source: Federal Reserve

Read the full report here.

Why real estate tech won’t kill the middleman (The Real Deal) Rated: A

Not too long ago, it seemed like the real estate business was about to enter a new era. To some observers, websites like Zillow and Trulia or their office equivalents 42Floors and LoopNet threatened to put brokers out of business (although officially these firms said no such thing). Crowdfunding startups dreamed of doing the same to pricey fund managers. Why pay a cut to an agent if you can just find your house or office online, for free? Why give your savings to a pension fund, which gives it to an asset manager, which gives it to a real estate lender, which gives it to a developer, if you can just lend the money to a developer yourself, online, and save a fortune in fees?

ENACOMM Adds FoneLogix as Ally to Bring Data-Driven AI and Phone Banking to Financial Institutions (Globe Newswire) Rated: B

ENACOMM—a fintech company that empowers banks, credit unions and credit card companies with solutions for improving the customer experience (CX), fighting financial fraud, and increasing operational efficiency—today announced a new reseller agreement with FoneLogix, an Atlanta-based provider of cloud-hosted VOIP Phone Systems, Solutions and Support.

Through the partnership, FoneLogix’s bank and credit union customers will be able to take advantage of ENACOMM’s VPA (Virtual Personal Assistant) Conversational Banking and the ENACOMM Financial Suite (EFS), which includes a hosted, dynamic interactive voice response (IVR) system for personalized customer interactions.

AI Challenging Bank Lending Practices (Forbes) Rated: A

CultureBanx notes 

The Best Business Loans and Financing Options for Freelancers (The Entrepreneur) Rated: A

Most banks view freelancers as high-risk, and as such, may be unwilling to enter a loan agreement. Because a freelancer is considered a sole proprietor, he or she alone is liable for all losses and debts his or her business may incur. If the freelancer gets hurt or sick and cannot work — or is just terrible at running a business — the bank is left holding the bag.

Online lenders offer an interesting alternative. Typically, these non-traditional lenders have more relaxed loan approval criteria and a swifter approval process. Importantly, your personal income, assets and credit score are assessed for loan approval, not the value of your business. You should expect to pay higher rates of interest, a natural trade-off for the perceived risk you present.

First Tech Federal Credit Union Personal Loans: 2018 Review (Nerdwallet) Rated: A

First Tech offers unsecured and secured personal loans as well as personal lines of credit. Annual percentage rates start at 9% on unsecured loans, or 3% on secured loans, which can be backed by a First Tech savings account, First Tech share certificates, or stock you own in the company you work for or one listed on the NYSE, Nasdaq or Amex.

You can apply for a loan of as little as $500, making First Tech a good option for borrowers looking for small loans. Payments for unsecured and secured loans are fixed over two to seven years, and you can choose between monthly or biweekly payments.

 

 

Trump signs resolution overturning CFPB auto lending rule (Consumer Affairs) Rated: B

President Trump has signed a resolution, passed by Congress, overturning the Consumer Financial Protection Bureau’s (CFPB) auto lending rule, designed to prevent racial discrimination by dealers who finance purchases.

United Kingdom

Monzo Case Study (AWS) Rated: AAA

Monzo has grown from an idea to a fully regulated bank on the AWS Cloud. A bank that “lives on your smartphone,” Monzo has already handled £1 billion worth of transactions for half a million customers in the UK. Monzo runs more than 400 core-banking microservices on AWS, using services including Amazon Elastic Compute Cloud (Amazon EC2), Amazon Elastic Block Store (Amazon EBS), and Amazon Simple Storage Service (Amazon S3).

Open banking regulations, which came in at the start of 2018, required the nine largest banks in the UK to provide an API for their users’ account information.

 

Meet the 35 most exciting young entrepreneurs, engineers, and advisors in UK fintech (Business Insider) Rated: AAA

Business Insider has covered UK fintech since our 2014 launch. The UK Fintech 35 under 35 highlights the most promising young entrepreneurs, engineers, marketers, and sector experts under the age of 35. It spans both startups and big banks operating in the sector.

35. Pierce Glennie, iwoca

The company has lent over £400 million since its founding in 2011. Glennie was one of iwoca’s first outside hires and just 21 when he joined the business.

27. Aneesh Varma, Aire

Varma, who started his career at JPMorgan, set up Aire in 2014. It is his second startup, having previously founded enterprise software business FabriQate in 2005.

24. Anil Stocker, MarketInvoice

MarketInvoice is an online platform that lets businesses borrow against unpaid invoices. The lender isn’t MarketInvoice itself but institutional investors and high net worth individuals looking for strong returns.

23. Karen Kerrigan, Seedrs

Seedrs is one of the UK’s first equity crowdfunding platforms, letting ordinary people invest in startup businesses. 600 businesses have raised over £320 million since the platform launched in 2009.

17. Simon Miller, Scalable Capital

Scalable Capital is one of a number of so-called “robo advisors” — online investment advisors and platforms — that have sprung up around the world in recent years. The company already has £600 million in assets under management and has attracted investment from asset management giant BlackRock.

13. Joe Cross, TransferWise

Cross was one of TransferWise’s first employees and has seen the international money transfer business grow from a small East London startup to business worth over $1 billion.

6. Megan Caywood, Starling Bank

She is now chief platform officer at startup, app-only bank Starling, which is trying to make a new kind of bank that functions more like an app store than a traditional lender.

5. Martin Ijaha, Neyber

Neyber works with employers to let staff borrow money then repay through salary deductions. Neyber was founded in 2012 and now works with 160 employers with a combined 1 million staff. Last year Goldman invested £100 million into the platform.

3. Tom Blomfield, Monzo

The fully licensed bank now has over 500,000 current account customers who have spent £1 billion on Monzo’s iconic hot coral cards. The company has raised over £71 million to date and is valued at £280 million.

2. Samir Desai, Funding Circle

Their platform has now lent over £4 billion to businesses across the UK, Germany, US, and the Netherlands. Desai was awarded a CBE for services to financial services in 2015 and his company is tipped to float on the stock exchange later this year with a price tag of at least £1 billion.

1. Nikolay Storonsky, Revolut

Revolut began life as a foreign exchange card linked to an app that offered rock-bottom FX prices. The company is less than three years old but the popularity of its product has already seen it hit 2 million customers and a valuation of $1.7 billion.

Proptech Startup When You Move Raises £3M in Funding (Finsmes) Rated: A

When You Move, a UK-based proptech startup, secured new funding which brings the total amount raised to £3m.

Backers included Fig, a proptech VC, and a hybrid network of friends and family, private HNW investors and incumbent shareholders.

The company intends to use the funds to build out it customer excellence teams, scale up the development team and solidify its position as the solution for professionals involved in property purchases.

The UK fintech economy will create different pockets of excellence all over the country (Computer Weekly) Rated: A

He said fintechs such as Leeds based White label Crowdfunding which build peer to peer lending software, business lender Rebuildingsociety.com also in Leeds, and Accespay in Manchester have been involved with the Fintech North events.

Mark Carney: Every household £900 worse off because of Brexit (The Telegraph) Rated: A

UK households are £900 worse off than they would have been because of Brexit, Bank of England Governor Mark Carney has claimed.

Mr Carney revealed in a Treasury Select Committee grilling that growth has been up to 2pc lower than the central bank had expected because of the UK’s decision.

Banks ‘charging more’ for overdrafts than payday lenders (BBC) Rated: A

Unarranged overdraft fees can cost borrowers up to seven times more than a payday loan, a consumer group warned.

Which? compared the cost of borrowing £100 for 30 days in an unarranged overdraft across 16 high street banks with borrowing the same amount through a payday loan.

Ireland Issues Tax Guidance On Peer-To-Peer Lending (Tax News) Rated: B

A company that pays interest on finance raised via peer-to-peer lending or crowdfunding is obligated to withhold income tax at the standard rate of tax on interest payments made on the finance raised. The underlying lenders are liable to pay income tax on any interest they earn on which withholding tax has not been suffered.

‘Lenders need to be more transparent about portfolios’ (Bridging & Commercial) Rated: A

Far from deserting the sector, lenders are now presenting landlords with a wider range of borrowing options than ever before. New figures from financial information site Moneyfacts suggests that there are currently more than 2,000 buy-to-let mortgage deals available, a new record high.

And while the various regulatory and tax changes have spelt trouble for the small-time landlords, the professionals seem to be in the ascendency. A recent study by Aldermore suggested that more than four out of 10 portfolio landlords are looking to expand their portfolios in the next 12 months.

China

Chinese fintech’s global future is arriving now (Financial Times) Rated: AAA

Ant Financial recently raised an oversubscribed $10bn round which values the firm higher than Goldman Sachs, American Express and BlackRock; the Alipay product has more than 500 million users and is incredibly simple to use; they have integrated into Alibaba’s retail operation and have the world’s largest money market fund with Yu’E Bao; they have begun expanding globally as well as they have built partnerships with firms in Africa and have tried to enter the U.S. market through an acquisition of MoneyGram which was blocked by regulators; regulators will need to figure out how handle a company that doesn’t look to fade from the financial scene anytime soon.

Legal concerns heat up for wanted Founders Group leader as partner testifies in China (Myrtle Beach Sun News) Rated: A

Liu’s partner in the Chinese company Yiqian Funding, a peer-to-peer lending business that seeks investors, testified May 3 in her fraud trial in Nanjing that Liu was in control of the company when it became unable to pay many investors what prosecutors estimate to be $1.17 billion — or 7.4 billion yuan.

 

European Union

Klarna acquires universal shopping cart Shop.co (Ecommerce News) Rated: AAA

Klarna has acquired Shop.co, a small German startup that wants to simplify online shopping by offering a universal shopping cart. There’s little known about the deal, but according to Klarna it’s mostly about the acquisition of intellectual property and taking over a mere Shop.co employees..

According to t3n, a purchase sum somewhere in the mid double-digit millions is also likely. But later on, Klarna told another media outlet, Tech.eu, that the purchase price is far lower than some media have been speculating. It also said that it’s most acquiring intellectual property and employees.

Keeping on Top of Emerging Payment Solutions – Q&A with Klarna (Retail Tech News) Rated: A

Luke Griffiths: Klarna’s approach to online commerce is very different from that of traditional providers. Our overarching philosophy is to give consumers the freedom and flexibility to decide how and when they want to pay. At Klarna, we offer three payment options that cover all consumer needs for seamless shopping: ‘Pay now’, ‘Pay later’, and ‘Slice it’.

Pay now enables straightforward and immediate online payment purchases. This option allows customers to pay for their purchases in full via Klarna’s speedy online checkout and payment service using a card. Many of our merchants choose the Klarna checkout as it is proven to reduce abandoned baskets and provide a better user experience for shoppers.

Our second payment option, Pay later, allows shoppers to ‘try before they buy’. Customers have either 14 or 30 days to pay for their goods (depending on the merchant) after their items have been delivered, with no interest or fees – or they can return the items if they’re not what they expected.

EMaC launches ‘Drive Now Pay Later’ service for dealers (Motor Trader) Rated: B

EMaC, the service plan specialist, is widening the services it offers dealers and end consumers with the launch of a pay later credit facility for vehicle repairs and accessories.

The company, which is has also launched a new identity, has teamed up with credit provider Klarna to offer the “Drive Now Pay Later” service.

EMaC said its new Drive Now, Pay Later product would give dealers access to a credit facility to assist their customers in financing repairs and other vehicle related accessories.

Banks seek tech talent for digital shift (Financial Times) Rated: A

European Banks have increased advertising for IT and engineering roles by more than 10 times in the last 3 years; a new report by the Economist Intelligence Unit and Temenos shows for the first time that bank executives believe technology like AI and blockchain will have a bigger impact than regulation; being about 10 years removed from the financial crisis has help shift the view of banks to focus more of their time on digitization instead of regulatory compliance.

 

 

International

Meet the Goldman Sachs-Backed Fintech Startup Aiming to Take Over North America (Fortune) Rated: AAA

Now Plaid, which raised $44 million in a funding round led by Goldman SachsInvestment Partners nearly two years ago, is looking to expand internationally. The company announced Tuesday that Plaid is available in Canada for the first time—and compatible with both U.S. and Canadian dollars—a move designed to both support current clients’ Canadian expansions as well as attract new Canadian fintech players.

Companies use Plaid’s APIs (or application programming interfaces) as a foundation for building their own fintech products, depending on that secure way to link customers’ bank accounts. Its extension into Canada is a sign that the nascent fintech industry is gaining traction in more parts of the world. TransferWise, a London-based cross-border payments startup that uses Plaid, recently expanded into Canada as part of a global push. And Toronto-based Drop, a loyalty rewards app, is one of Plaid’s first Canadian clients.

Is Fraud a Solved Problem? (Lend Academy) Rated: AAA

But one statement stood out to me. Jeff Stewart, the Chairman and Co-Founder of LenddoEFL said that “fraud is a solved problem”.

That is quite a bold statement. So, I reached out to Jeff yesterday to get some more color on what he really means here. He stood by what he said on the panel at LendIt. While we can’t get rid of 100% of fraud what we can do is catch fake identities, fraud rings, and large-scale theft of identity.

It is not surprising that the type and amount of fraud varies between countries. We learned from Thomas Wang of China Rapid Finance in this same session that a staggering 97% of loan applications in China are fraudulent. Think about that for a moment. Only 3% of the applications that a Chinese online lender receives is from a real person. The rest is fraudulent activity often from established fraud rings.

Small Business Banking Catching Up in Innovation Race (Bank Innovation) Rated: A

There are quite a few lending solutions these days for small businesses — Funding Circle, OnDeck, Kabbage, and Square Capital, to name a just a few — but innovation and digitization are lagging in other areas, such as digital account opening. Enter Gro Solutions, a sales and marketing platform for financial institutions.

Australia

Understanding the SME mindset (Australian Broker) Rated: A

More than one in five SMEs – a total of 22% – opted for non-bank alternatives to funding their growth. A further 24% looked to borrow from their main relationship bank, and this bank lending percentage has trended down from 38% in our initial 2014 Index.

The most popular funding choices for SMEs using alternative working capital options in 2017 were debtor finance, which was used by 77%; merchant cash advances, used by 23%; P2P lending, with a total share of 10%; and crowdfunding, utilised by 9%.

India

Payday loan firm EarlySalary acquires CashCare (Media Nama) Rated: AAA

Payday loan firm EarlySalary has acquired CashCare. CashCare sells loans to customers on websites like Infibeam and Shopclues, and accepts repayments in EMIs at annual interest rates ranging between fifteen and 25%, according to CashCare’s website. The service is offered to people who don’t have a credit card too.

While CashCare’s 15% annualized interest rate is not too different from what credit card companies charge, EarlySalary’s payday loans come at a steeper cost. Charging ₹9 for each dayper ₹10,000 borrowed, their interest rate comes out to over 30%, compared to the 1.5–3% annualized interest credit cards charge, as we’ve pointed out before.

Xiaomi to start lending operations in India; to target salaried professionals (The Economic Times) Rated: AAA

IPO-bound Chinese smartphone company Xiaomi has launched its first lending product in India on the lines of the microlending product Mi Credit that it offers in China.

The new credit product, launched in partnership with lending platform KrazyBee, has already gone live and will be officially announced in a few weeks, as per a person aware of the development.

Called CreditBee, the credit product is a payday loan starting from Rs 1,000 up to Rs 1 lakh for a period of 90 days, as per the person cited above. The credit will be offered at an interest rate of 3% per month and will be targeted at salaried professionals, the person said.

P2P lending startup Cashkumar secures angel investment (VC Circle) Rated: A

Cashkumar, a peer-to-peer (P2P) lending startup, has raised angel investment of Rs 5 crore (around $735,000) through deals platform LetsVenture.

The startup’s first external funding was led by Mohan Kumar, executive director at global investment firm Norwest Venture Partners, and telecom company Reliance Jio’s chief digital officer Vishal Sampat.

Capacity-building workshop by RBI (Tribune India) Rated: B

Rachna Dikshit, Regional Director, RBI, Chandigarh inaugurated the workshop. In the event, topics like RBI guidelines, credit guarantee architecture for MSME financing and recovery management, alternative tech driven approaches to financing MSMEs like big data, fintechs, P2P lending, TReDS, movable asset based financing, role of CERSAI, management of sick account, credit scoring and rating models for MSMEs, assessment of term loans and composite loans, effective communication were covered.

 

Asia

Fintech Firm Flywire Teams Up With SP Jain For New Student-Led Singapore-Based Startups Competition (Crowdfund Insider) Rated: A

Flywire, a fintech firm that provides global payment and receivable solutions for education, healthcare, and commercial enterprises, announced this week it has partnered with SP Jain School of Global Management to launch a startup competition, the Flywire Challenge, to power a new generation of transformative entrepreneurship in Singapore and the APAC region.

According to the duo, this competition, which is set to launch this month, solidifies Flywire’s dedication to partnering with powerful regional universities, government bodies and industry, and investing in education and the start-up space, as well as their long-term relationships with international educational and healthcare institutions as a leading payments solutions provider. Flywire will host, sponsor and evaluate a contest following an open call for teams to submit proposals for innovative start-up ideas. Any and all students and graduates, not limited to SP Jain students, will be invited to compete for three awards in the Health Technology, Education Technology and Travel Technology sectors.

Latin America

Mexican investors back microlending startup Vola (VC Circle) Rated: AAA

Bengaluru and US-based Vola, which offers an alternative lending platform for students, has raised $500,000 (Rs 3.4 crore) in a pre-Series A funding round from Mexican insurance and credit firm Credika and unnamed angel investors from the North American nation.

MENA

AI Business Loan Company Lending Express Raises $ 2.7 Million (CTech) Rated: AAA

Israeli business loan startup Lending Express announced on Tuesday it has raised $2.7 million in a seed investment round led by Entrée Capital and iAngels, among other investors.

The company said it would use the capital to further develop its loan-matching technology and scale up its operations in the U.S. and Australia.

Authors:

George Popescu
Allen Taylor

Wednesday September 13 2017, Daily News Digest

New Orchard deals platform

News Comments Today’s main news: Orchard connects institutional buyers, loan originators with new Deals platform. Funding Circle lends 91M GBP to UK businesses in August. RateSetter recovering from bad loan. Keynote speakers for LendIt Europe. India’s P2p lending rules have been finalized. Juvo takes financial inclusion to Malaysia with Tune Talk. Today’s main analysis: What Orchard’s Deals platform does, and […]

New Orchard deals platform

News Comments

United States

United Kingdom

China

European Union

India

Asia

News Summary

United States

Orchard Unveils Global Network Connecting Institutional Buyers and Loan Originators with New Opportunities in Private Credit (PR Newswire), Rated: AAA

Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. Deals is a global network where loan originators searching for new sources of financing, and institutional investors with capital to deploy, can connect, evaluate opportunities, and move forward with multiple types of transactions.

Deals is operated by Orchard Platform Markets, LLC, a wholly-owned subsidiary, SEC-registered broker-dealer, and member of FINRA and SIPC. With Deals, qualified investors gain access to a broad range of new investment opportunities, including pools of seasoned loans, forward flow agreements, and credit facilities—along with all underlying deal data and an enterprise suite of credit analytics solutions to evaluate each prospective transaction. Originators with pools of loans to sell can list deals and seamlessly share data within this global network, while working with investors who express interest in a deal to conduct due diligence and analysis, and finalize the transaction’s structure and terms.

Orchard Platform’s new features include:

  • Deals: Global network where pre-qualified loan originators and investors can browse a broad listing of investment opportunities and corresponding data, and utilize Orchard’s enterprise technology to seamlessly exchange information, assess potential transactions, and take the next steps more efficiently.
  • Capital Management: Allocation optimization, facility monitoring, and automated borrowing-base reporting offerings to help originators better monitor utilization across multiple capital sources—and manage them with greater precision and insight.
  • News & Insights: The most recent industry news, economic data, and Orchard research and commentary to keep originators and investors up-to-date on the latest industry trends and thinking. Although Deals information is only available to pre-qualified institutional investors, Orchard also provides free access to anonymized, aggregated industry data to parties seeking to learn more about the industry, including journalists, researchers, and investors.
  • Advanced Analytics: Originators can benchmark origination and performance data against an aggregated and anonymized peer group, and quickly analyze any data set under multiple scenarios, to gain deeper insights into their loan books and funding channels. Investors can also take advantage of scenario testing, data visualization, and benchmarking tools to gain actionable portfolio and market intelligence.
  • High-Quality Data Services: Data integrations with Orchard help originators improve the quality of their data, and streamline the process for client reporting.

Orchard Launches New “Deals” Platform Connecting Institutional Investors and Originators (Lend Academy), Rated: AAA

The key piece that I was interested in was the new Orchard Deals platform. The old Orchard Platform provided technology solutions for both originators and institutional investors but Deals is the piece that finally connects the dots. The platform connects institutional investors with origination platforms that have listed specific investment opportunities. Orchard has 55 institutional investors registered on their platform and 25 originators (with several more in the queue). Originators cover the gamut of consumer, small business and real estate lending.

At launch time they had an initial $500 million in active deals from 10 originators listed on the platform. These are both primary and secondary deals.

To be clear, Orchard’s new platform is far more than just a secondary market. It has several new features:

  1. Deals – Pre-qualified investors can browse listings of a range of different investment opportunities offered by originators.
  2. Capital Management – For originators to help monitor and optimize capital utilization across multiple funding sources.
  3. Advanced Analytics – Benchmarking of performance data against an anonymized peer group.
  4. Data Services – Helping originators improve the quality of their data and client reporting.
  5. News & Insights – Industry news and economic data as well as Orchard’s own research and commentary.

                                   Source: Lend Academy

CEO’s Fall Clouds Prospects for Fintech Firm SoFi (WSJ), Rated: AAA

Mike Cagney’s decision to resign as CEO of online lender Social Finance Inc. casts uncertainty over the financial-technology upstart’s business prospects, its attempt to open a bank in Utah and plans for an eventual public offering.

The company has been valued at more than $4 billion by shareholders including private-equity firm Silver Lake and Japanese conglomerate SoftBank Group Corp.

In recent weeks, however, Mr. Cagney was spending less time on business issues and more on personnel and legal matters.

When the SoFi board met by telephone on Saturday, those issues occupied much of the conversation, according to people familiar with the matter. When the board meeting reconvened on Sunday, Mr. Cagney raised the idea of moving aside, arguing that his presence risked being a burden on the company’s progress. The executive told directors it would be better for SoFi if he resigned, the people said.

How Mr. Cagney’s departure will affect SoFi’s growth plans is unclear. Its management team was thinned following the departure of Chief Financial Officer Nino Fanlo, Chief Revenue Officer Michael Tannenbaum and co-founder Dan Macklin over the past few months.

Regulators require firms that are requesting banking licenses to maintain consistency in their management teams, which will likely delay SoFi’s application, according to a person familiar with the matter.  The company has also been looking to hire a new finance chief to replace Mr. Fanlo who could guide it to an initial public offering. That search is now on hold until Mr. Cagney’s successor is named.

SoFi CEO to step down after claims of managers’ sexual harassment (USA Today), Rated: A

Cagney, who’s also co-founder, plans to remain in the role until the board names his successor, likely by the end of the year. He was replaced immediately as board chairman by venture capitalist Tom Hutton, who has been a board member since 2012.

SoFi, based in San Francisco, is one of the hottest startups in the personal finance sector, with revenue rising 67% year-over-year to $134 million in the second quarter. It also funded $3.1 billion in loans during the quarter.

SoFi Co-Founder and CEO Mike Cagney to Step Down by Year End (Lend Academy), Rated: A

Back in August there was the news of a sexual harassment lawsuit from a former employee. Before that there had been several senior executive departures, we have had a class action lawsuit and one of Silicon Valley’s most valuable and revered fintech companies was starting to lose some of its luster.

The New York Times is also reporting that “Mr. Cagney may have been overaggressive in expanding SoFi’s business, skirting risk and compliance controls.” That is the first I have heard about any compliance issues and if it is true then this could be a much bigger issue for SoFi.

Regardless of the what the real story this is not good for the industry whatsoever. Just when it felt like we had some momentum and the industry was starting to thrive again this is definitely a setback. The press is going to bring up the issues with Lending Club last year and we will have to deal with more negative sentiment.

Personal finance app MoneyLion is experimenting with augmented reality (Tearsheet), Rated: A

MoneyLion is timing its launch of an AR tool to coincide with Apple’s iOS 11 release, which is rumored to be this week. MoneyLion’s feature, called Grow Your Stack, will let customers get a visual representation of their account balance as stacks of cash projected over the customer’s view of the real world. It will use iOS 11’s ARKit technology.

MoneyLion joins a league of banks experimenting with VR and AR technology, advancements that have the potential to transform branch banking. As Tearsheet reported in June, BNP Paribas recently introduced a VR-based app for retail banking that allows users to virtually access their account activity and transaction records. Citi and Wells Fargo are also dabbling in VR technology, while in the PFM space, Intuit has experimented with visualizing one’s financial health as a forest.

Upstart, The Brainchild Of Google Execs, Is Using Fintech To Make Smarter Loans (Benzinga), Rated: A

About 40 to 50 percent of Americans have access to prime credit, yet 83 percent of people who have taken out a loan have never defaulted, said Girouard, the CEO of the San Franciscolending firm Upstart.

The groups who are often denied by traditional credit models — but aren’t necessarily risky — include millennials with a “thin” credit file, recent immigrants and self-employed people, Girouard said.

The average size of a loan from Upstart is between $11,000 and $12,000, and the average age of the company’s borrowers is 28, the CEO said.

Loans range between $1,000 and $50,000, with APRs from 7.39 percent to 29.99 percent and three- and five-year terms.

Upstart borrowers must be U.S. citizens or permanent residents and have a FICO score above 620.

Amped advice for the new retired class (Financial-Planning), Rated: A

The financial advice industry exhorts retirement preparedness but provides scant guidance for retirees after they reach that milestone, according to Matt Fellowes, well-known fintech entrepreneur who is launching a new digital advice platform.

Fellowes founded HelloWallet, a software company that Morningstar acquired in 2014 for $52.5 million. After a stint as chief innovation office at Morningstar, Fellowes left to launch United Income, which aims to serve a generation of retirees dealing with very complicated lives after work.

Fellowes finds fault in how the industry approaches its deaccumulation models, claiming its methods and assumptions are outdated. Key considerations for retirees managing their finances, he says — when will they die and how much will they spend before passing — are “two of the least studied questions in asset management today.”

FULL SERVICE
The platform offers different tiers of service, from a digital-only option with a $10,000 account minimum and a 50 basis point annual fee, to advisor-assisted service, with either a maximum 60 basis point fee for a $100,000 account minimum, or a maximum 80 basis points for a minimum $300,000 account, which is advertised as “full service.”

United Income had a goal of reaching $38 million in assets by the end of the year. It has already passed $210 million, Fellowes says.

Scotch Plains Woman Charged With Attempting to Steal $ 241,000 from Online Lender (Tapinto.net), Rated: A

A Scotch Plains woman indicted last year as a leader in an auto-theft trafficking network has been charged in a separate scheme to steal $241,000 from an online lending company.

Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced that Tyisha Brantley, 37, was charged with computer criminal activity, attempted theft by deception and falsifying records for allegedly used her work computer at Pfizer Inc. to create and send phony bank statements to iLoan Residential Mortgage lending in an attempt to obtain a $241,000 mortgage to purchase a home in Newark.

Brantley allegedly used computer software to alter two statements from her boyfriend’s bank account; adding her name as an account holder and changing the account balance from $-525.05 to $15,933.  She then allegedly used the computer to email, from her work account, the fraudulent statements to the lending company, which ultimately did not approve the loan.

Fintech: The Fastest Growing Industry in the U.S. (Them Report), Rated: A

Fintech, or financial technology, had close to $13 billion invested in it in 2016 from U.S. based companies alone.

Fintech allows digital lenders to offer competitive rates due to automation and lack of physical offices. Turner and S&P Global Market Intelligence’s estimates show that 13 of the largest digital lenders in the U.S. originated $28.39 billion in loans last year and a cumulative $68.75 billion since their respective inceptions.

S.F. fintech Plaid moves to larger HQ amid explosive growth (Biz Journals), Rated: B

San Francisco-based Plaid, which connects some of the hottest fintech apps to their users’ bank accounts, has moved to a new headquarters that’s more than double the startup’s previous home base.

Kabbage, Indeed, Microsoft Join A-List Speaker Lineup at the National B2SMB Summit (Benzinga), Rated: B

The national event takes place Oct. 3-4 and is spread over two locations in Chicago’s dynamic West Loop district: 1871 at the Merchandise Mart on Day 1, and the Revel Fulton Market on Day 2.

Other recent additions to the speaker roster include:

  • Pete Steger, Head of Business Development, Kabbage
United Kingdom

Funding Circle lends £91m to UK businesses in August (Bridging&Commercial), Rated: AAA

Funding Circle has revealed that it lent a total of £91m to UK businesses during August.

The peer-to-peer platform provided finance to 1,309 UK businesses during the month and reported that investors are set for a current estimated return of 6.7% per year.

Funding Circle reported that of its total lending, 24.7% was provided to businesses based in the South East.

Britain’s RateSetter recovering after ‘asteroid strike’ bad loan discovery (Daily Mail), Rated: AAA

Britain’s peer-to-peer lending platform RateSetter has managed to retain most of its customers despite leaving the industry’s trade body last month after breaching its transparency rules, its Chief Executive Rhydian Lewis told Reuters in an interview.

Peer-to-peer platforms, which bring together individual borrowers and lenders without a bank being involved, have grown rapidly in Britain since 2015 but are starting to come under regulatory scrutiny.

Lewis said that while the platform has lost some business, it has retained 95 percent of its customers despite offering them the chance to sell out at no cost between July 18 and Aug. 31.

Orca Co-Founder & CEO Iain Niblock Shares UK P2P Lending Market Update (Crowdfund Insider), Rated: A

Orca, an independent data, research, and analysis provider in the UK P2P lending market, recently shared an exclusive update via email: the UK P2P lending market outlook is bright.

“We are still seeing very strong growth across the UK peer to peer lending market with cumulative lending surpassing £10 billion at the very start of Q3 2017. In particular business lending has grown by 84.19% when comparing to the same period of 2016,” observed Orca Co-Founder & CEO Iain Niblock.

Goldman Sachs plans consumer lending UK push (Business Insider), Rated: A

The first phase of this expansion will see Goldman Sachs launch online deposit accounts, and the second will see the bank roll out a consumer lending offering.

Besides Goldman Sachs’ obvious clout, there are two reasons UK alt lenders should be worried:

  • The bank has already proven itself adept at dramatic pivots. Goldman Sachs originally operated as a wealth management and investment bank, and only began serving the mass market in 2016, when it eight months later, it had 

    A year in numbers! How P2P firms can help consumers beat inflation (P2P Finance News), Rated: A

    Consumer price inflation when we started in September 2016 was at one per cent. Since then, it has almost tripled to 2.9 per cent today.

    The household savings rate – the percentage of disposable income being saved – was at 5.3 per cent at the end of September 2016, but hit record lows of 1.7 per cent in the first quarter of 2017, the lowest level since records began in the first quarter of 1963.

    Savings rates have actually increased slightly. The best buy easy access rate this time last year was one per cent from RCI Bank. The same provider now offers 1.2 per cent.

    Starling Bank’s New Platform MarketPlace Integrates with Fintech Flux (Bank Innovation), Rated: A

    U.K.’s Starling Bank is embracing the PSD2 changes in finance with the launch of its Marketplace platform.

    Rewards and receipt provider Flux will be the first company to be integrated onto this platform.

    How to tell the difference between robo-advisers (City A.M.), Rated: A

    Recent research from international banking group ING highlights how cautious consumers feel about using robo-advisers.

    The report found that 29 per cent of consumers want more than just a simple online investment service – they want financial advice to guide their investment journey.

    Interestingly, the study also found that, rather than having a computer manage their money, most consumers would prefer to personally manage their investments, even if it resulted in lower expected returns.

    This 35-year-old banker left Goldman Sachs to start a fintech inspired by his mother (Business Insider), Rated: A

    Goldman Sachs has invested £100 million in a fintech startup founded by two of its former bankers that lets people borrow money and repay through their salaries.

    Neyber, founded in 2014 and launched in 2015, partners with employers to let their staff borrow money at attractive rates.

    Repayments are then deducted from future salaries, lowering the risk for the lender and hopefully helping staff manage money better.

    The startup was founded by three former investment bankers, including two Goldman alums. CEO Martin Ijaha, 35, left Goldman in 2012 and came up with the idea for the business when thinking about the experience of his family as a child.

    From ISAs to authorisations: the big stories of the past year (P2P Finance News), Rated: B

    Nick Harding, chief executive of Lending Works, argued that the arrival of the Innovative Finance ISA  (IFISA) was “far and away the most significant event” for the sector over the past year.

    John Goodall, chief executive and co-founder of Landbay, suggested that the number of Financial Conduct Authority approvals seen in the last year marked a “significant milestone” for the sector.

    Britain’s leading fintechs are banding together to work out a Brexit strategy (Business Insider), Rated: B

    Entrepreneurs from TransferWise, Funding Circle, Onfido, Monzo, FreeAgent, MarketInvoice, and Starling Bank have all joined the Fintech Delivery Panel (FDP), a new industry group that aims to “produce an ambitious post-Brexit vision for the UK’s fintech sector.”

    The panel also includes representatives from big banks such as Barclays, HSBC, RBS and Santander.

China

China’s ICO ban makes more sense in light of its history with fintech (TechCrunch), Rated: AAA

Many in the US have chided the PBOC for its apparent overreaction. AngelList co-founder Naval Ravikant called the policy a “huge gift to Silicon Valley and its resident financiers.” VC Fred Wilson penned a thoughtful post comparing China’s approach to that of the SEC in the US, opining that “We needed a cooling off period and if China’s actions are that cooling off period, then I welcome them. However, a blanket ban on ICOs seems like bad policy to me.”

From the perspective of US and European financial markets, this reaction seems like a drastic one-size-fits-all policy for a nuanced ecosystem, calling to mind the idiom “if all you have is a hammer, everything looks like a nail.” However, China’s context provides four specific insights that somewhat reframe this policy:

An ever-evolving financial regulatory regime

In a country with a stock market less than 30 years old, it’s little wonder that investor protections may not yet have evolved to be comprehensive enough for the complicated ecosystem of alternative finance. Imagine China having to replicate the regulatory framework that took decades to develop in the US following the 1929 stock market crash – all in less than 30 years!

A sketchy recent past for financial technology in the Middle Kingdom

In the peer to peer lending space (in which I used to work) China is conversationally referred to as the ‘wild west’ of fintech. Thousands of platforms sprung up almost overnight in China, promising to transform mom-and-pop savings into productive debt investments. These exchanges had raised a staggering $59 billion from unsophisticated investors by early 2016.

One in three of the country’s 3,600 platforms failed and shut down, including marketplaces like Ezubao, which defrauded over 900,000 investors out of $7.6 billion. It’s almost impossible to imagine American or European regulators allowing unaccredited investors to be exposed to comparable schemes at such a magnitude of scale.

In the peer to peer space, the PBOC had a very similar reaction to its recent ICO ban, imposing strict limits on the online lending industry to curb the risks of “shadow banking.” The only difference was that the online lending restrictions came too late, in the wake of massive investor losses.

Ping An Technology is the Sole Chinese Firm to Rank Among the Top 50 Firms (PR Newswire), Rated: B

International Data Corporation (IDC), a leading global provider of market intelligence, released the 2017 IDC Fintech Rankings Top 100 list on September 12. Ping An Technology, the top-ranked Chinese firm within the list, came in at number 38, as a result of its cutting-edge innovation and strong technology competence. The rankings serve as further confirmation of the attention and recognition that Ping An Technology is getting from IDC, on the heels of the Chinese firm’s 4th place position on the 2017 IDC China FinTech Pioneer Top 25 list.

European Union

LendIt Europe Announces Keynote Speakers for 2017 Event (Crowdfund Insider), Rated: AAA

The conference’s extensive speaker line-up includes:

  • Antony Jenkins, Founder and Executive Chair at 10x Future Technologies
  • Anne Boden, CEO and Founder of Starling Bank
  • Jaidev Janadarna, CEO of Zopa
  • Karen Mills, Senior Fellow at the Harvard Business School
  • Renaud Laplanche, Co-Founder & CEO of Upgrade

EstateGuru’s loan volume surpassed €30 million! (EstateGuru Email), Rated: A

In August, the platform’s loan volume was nearly €4 million which was a remarkable 13% from EstateGuru’s historic loan volume. In September the platform celebrates surpassing €30 million loan volume in which already 7900 investors from 39 countries have invested in. An interesting comparison can be drawn with the Baltic’s Nasdaq statistics – the largest amount of transactions were made with Siaulia Bankas (€8.4 million) and Tallink Group (€5.7 million). EstateGuru’s loan volume in August would comprise of roughly 11.5% of the entire Nasdaq Baltic transaction volume.

The growth of the firm is not only illustrated by the loan volumes but also by their strong track record.Due to the short-term nature of the loans, 70 loans worth €12 million have already been repaid to the investors, resulting in an impressive 12.4% historic interest rate. Meanwhile, loss of capital on the platform has remained €0 as the firm has not undergone any loan defaults!

Very soon, our clients will receive financial advice from a chatbot (Business-Review), Rated: A

Since the beginning of the year, BRD – Groupe Societe Generale has been developing a chatbot based on Personetics technology, which will operate via Facebook.

During Business Review’s Country Focus Community Forum in mid-June, BRD – Groupe Societe Generale CEO Francois Bloch announced the lender’s five-year plan to invest tens of millions of euros in digitalization and automation of processes. Soon, BRD clients will be the first among those of the French banking giant to benefit from financial guidance via a text conversation with an AI.

India

Peer-to-peer lending final norms to be out soon: RBI (Moneycontrol), Rated: AAA

The much-delayed peer-to-peer (P2P) lending guidelines have been finalised and will soon be released by the Reserve Bank of India (RBI) once it is notified by the government.

Jaipur-based Finova raises Series A funding from Sequoia Capital (VC Circle), Rated: A

Jaipur-based non-banking financial company Finova Capital Pvt. Ltd has raised an undisclosed amount in a Series A round from Sequoia Capital India Advisors Pvt. Ltd.

Wait for P2P lending to evolve before investing (livemint), Rated: A

Before we go any further on the subject, the most important aspect on P2P lending in India as of now is that it does not have specific regulations. At the same time, it is not illegal either. The Reserve Bank of India (RBI) has taken cognisance of the existence of P2P lending and came out with a consultation paper in April 2016. This is expected to be followed by formal guidelines for the sector, which the companies in the segment are expecting soon.

Since P2P lending is unsecured lending, it carries higher risk than other investments. The biggest risk is the borrower defaulting on repayments. These platforms claim to minimise this risk by using a strict filtering of borrowers at the time of registration itself. For instance, Faircent rejects close to 90% of applicants.

This means that there are many more borrowers than lenders. Financial planners advise planning properly before taking a loan. “Look at what is your cost of borrowing elsewhere. People need to understand that lending costs have come down across channels. If you benchmark P2P lending cost against credit card debt, it would look very attractive, but that should not be a benchmark,” said Dhawan.

If a borrower with a good credit score takes a personal loan from a bank, the landing cost of the loan could be 16-17%. The person can get the same loan at around 14% from P2P lending.

Asia

Juvo Partners With Tune Talk To Drive Financial Inclusion In Malaysia (Realwire), Rated: AAA

Juvo, the pioneer in mobile Identity Scoring, today announced its partnership with Tune Talk, the fastest growing Mobile Virtual Network Operator (MVNO) in Malaysia. The deployment, Juvo’s first in Malaysia, will drive financial inclusion across a population that has rapidly adopted smartphones in a highly saturated market.

‘Pay Later’, created by Juvo and fueled by Juvo’s Identity Scoring, is a digitized service that provides prepaid users with access to progressive levels of financial services, starting with airtime loans. By using Juvo’s proprietary data science and game mechanics technology, subscribers graduate to higher levels of credit based on top-up and repayment history, account information, and every day interaction. Pay Later enables prepaid subscribers to unlock access to advanced financial services. And, for Tune Talk, Juvo’s solution will drive higher levels of engagement, increase retention and develop an identity-based relationship between Tune Talk and its customers.

Smartphone users in Malaysia are estimated to reach 17.8 million this year, and grow to 21.3 million by 2021.

Authors:

George Popescu
Allen Taylor