Wednesday April 25 2018, Daily News Digest

banking the nonbanks

News Comments Today’s main news: Wells Fargo still the largest bank to lend to nonbanks. Digit adds credit card payments to app. UK finance chief calls for regulatory crackdown on tech giants. Humaniq implements smart biometrics identification. Today’s main analysis: World Bank releases Global Findex Database. Today’s thought-provoking articles: Credit history, debt ratio are biggest constraints for would-be homeowners. Lending […]

banking the nonbanks

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Wells Fargo Leaves a Potential Subprime Smudge on Its Way to Squeaky Clean (Bloomberg) Rated: AAA

Sloan provided some evidence for that argument last week when the bank paid a $1 billion fine to regulators to close an investigation into abusive practices in its auto lending and mortgage unit.

But a look at one of its lending businesses suggests that exposure to questionable practices isn’t so much an oversight as a business decision. Wells Fargo, according to reports over the past few years, is by far the largest lender among the big banks to payday loan companies and others that make high-interest loans to subprime borrowers, including some that regulators have accused of predatory practices.

Source: Bloomberg

Banks don’t have to report how much they lend to subprime lenders, which falls broadly into the category of nonbank lenders. Wells Fargo, at the end of last year, had by far lent the most to nonbank lenders, with $81 billion in outstanding loans. Citigroup was the bank with next largest exposure, with just $30 billion outstanding.

Source: Bloomberg

Credit History and Debt Ratio are Biggest Constraints for Would-Be Homeowners (PR Newswire) Rated: AAA

LendingTree today released the findings of its study on the cities with the highest rates of denied mortgage applications and why mortgage shoppers in those areas have been denied.

Since the financial crisis, mortgage lending standards have tightened as underwriting has become more stringent. There are numerous reasons why a lender could deny a loan, from poor credit score to prior bankruptcies, but other reasons can include a lender’s inability to verify a borrower’s employer.

Source: Lending Tree

LendingTree delved into data from more than 10 million mortgage applications using the most recent available Home Mortgage Disclosure Act data set to find out the main reasons would-be borrowers were rejected, and to see if location has any correlation for rejection.

Fintech firm Digit adds credit card debt payment to savings app (American Banker) Rated: AAA

Digit, maker of one of the first apps to help people save by automatically sweeping modest amounts of money from checking into savings, is turning its attention to credit card debt.

The app can now be set to automatically make an extra payment every month on a user’s credit card, the fintech announced Tuesday.

At the end of January, the Federal Reserve reported that U.S. consumers had $1.03 trillion in credit card debt.

Breaking Away From The Bi-Weekly Payroll Tradition (PYMNTS) Rated: A

Today, this payroll schedule means an estimated 70 percent of employees in the U.S. live paycheck-to-paycheck – and many struggle to make necessary purchases or payments in the days leading up to payday. It’s also linked to the rise in the payday loan industry, which has more U.S. storefronts today than McDonald’s, according to data from Pew. Lenders make a collective $7 billion in fees, according to analysts, and they stem from more than $46 billion worth of payday loans issued each year.

According to Steve Barha, CEO of Instant Financial, the rise of the payday loan industry and overdrafts certainly comes with its controversies, but it’s no mistake that the industry exists in the first place.

Unison Reports 1000% Growth Year over Year in Home Ownership Origination Volume (Crowdfund Insider) Rated: A

Unison, a unique financing platform for home ownership investments, is reporting strong year-over-year growth. According to the company, following a solid 2017, the origination volume for the first quarter of 2018 has grown and increased 1000 percent over the comparable period last year. This is due in part to an expansion of the management team and the availability of their service in ten new states.

Unison says these new hires will help extend their company into more states. In April alone, Unison HomeOwner and HomeBuyer programs will be available in 10 additional states including Florida, Georgia, Ohio, Michigan, Minnesota, Nevada, Colorado, North Carolina, Missouri and Delaware, bringing its total footprint to 22 states plus Washington D.C. Unison expects to broaden its reach over the course of 2018 to over 70 percent of U.S. single family residential housing units.

Mulvaney response to CFPB data security gaps baffles cyber experts (American Banker) Rated: A

Acting Consumer Financial Protection Bureau Director Mick Mulvaney has repeatedly pointed to data security as a defect in the agency’s supervisory program, but security experts are scratching their heads over the bureau’s response to such problems.

Mulvaney has said hundreds of CFPB-related data breaches justified his announcement in December that the agency would halt collecting personally identifiable information from companies it supervises.

Elevate vs. LendUp Payday Loans: Everything You Need to Know (Student Loan Hero) Rated: A

Pros of a LendUp payday loan
Getting cash fast is the main reason you’d choose a company such as LendUp. But they have some other benefits, as well.

  • If you pay your installment loan on time, you could boost your credit score.
  • The lender has an incentive program called the LendUp Ladder. You’re awarded points as you take out LendUp loans and repay them on time. As you accumulate points, the lender will reward you by allowing you to borrow at progressively lower rates.

For the sake of a side-by-side comparison, we’ll focus on Rise. Here are some pros of a Rise loan.

  • You can apply for a seven-day payment extension if you can’t pay on time.
  • The company will provide you with free access to your TransUnion credit score.
  • If you borrow from the company more than once, your interests rates could decrease.
  • Rates are lower than those offered by payday loans.
Source: Student Loan Hero

Chase customers can now use their voices to unlock their accounts (Tearsheet) Rated: A

Chase card members’ voices will soon be their passwords when they call for help.

The bank is debuting a voice-authentication feature for credit card customers dialing the call center this spring to reduce the customer burden of having to remember multiple passwords and answer cumbersome security questions. The initial launch would only be for credit card customers, but the bank plans to expand the feature to all customers by the end of the year, a spokeswoman said.

 

Hedge fund billionaire Steve Cohen’s venture capital group is on a fintech tear (CNBC) Rated: B

On Tuesday, Point72 Ventures will announce it led a $3 million investment in a startup called Extend, which has built mobile technology business owners can use to share their corporate credit cards with employees and freelancers without handing over the actual cards.

Earlier this month, the venture capital arm was a co-lead in a $29.4 million round for a New Jersey startup, DriveWealth, that has developed a mobile site for investing in exchange traded funds and stocks, and it led an $18.5 million investment in Silicon Valley-based DeepScale, which is developing autonomous driving technology.

United Kingdom

UK finance chiefs call for regulatory crackdown on tech giants Financial Times) Rated: AAA

Two of the financial technology executives involved in the FT debate — Funding Circle chief executive Samir Desai and Rhydian Lewis, his opposite number at RateSetter — agreed that GDPR was a welcome protection for consumers.

UK Fintech Humaniq Implements Smart bioID System to Further Strengthen Outgoing Transaction Security (Crowdfund Insider) Rated: AAA

UK-based fintech Humaniq announced on Tuesday it has implemented additional bioID settings that will act as an extra safeguard be integrated into Humaniq app, which the company reports has already had more than 100,000 downloads in the Google Play store.

Humaniq also revealed that the total transaction volume has reached 400,000 HMQ in more than 250,000 transactions per month. The company noted with the introduction of an additional layer of biometric authentication, this means over 10,000 transactions will be totally secured from fraud, benefitting over 100,000 users of Humaniq App.

Regtech start-up ClauseMatch lands £3.6m funding (Fintech Futures) Rated: A

ClauseMatch, a UK-based start-up in the regtech space, has raised £3.6 million ($5 million) in its Series A funding round.

ClauseMatch, specialises in smart document management. It is a graduate of Barclays’ accelerator programme, Techstars, and has Barclays and Intesa Sanpaolo on its customer list.

Could a credit card cap protect chronically broke Brits? (Guardian) Rated: B

A credit card cap is needed to protect “chronically broke” Britons struggling to make repayments on high interest loans, ministers have been told.

Labour’s Stella Creasy warned that credit card firms were pushing millions into debt in the same way payday lenders did before action was taken to prevent anyone having to pay back more than double what they borrowed.

The Walthamstow MP made the comments as she moved an amendment to the Financial Guidance and Claims Bill which would require the Financial Conduct Authority (FCA) to take tougher action on credit card firms.

Ministers must extend cap on payday loans to other high credit that’s targeting poor, vulnerable Brits, MPs say (The Sun) Rated: B

MINISTERS should “learn the lessons” of the payday loan cap and extend it to cover other forms of high-cost credit such as credit cards and doorstep lending, MPs have demanded.

In a boost for The Sun’s campaign to stop millions of families falling prey to doorstep and legal high street loan sharks, MPs called on the Government to take tough action to stop the nation “drowning in debt” and protect “chronically broke” Brits.

China

Hong Kong Approves Dual-Class Shares, Paving Way for Tech Titans (Yahoo Finance) Rated: AAA

Hong Kong Exchanges & Clearing Ltd. approved the biggest change to its initial public offering rules in two decades, putting it in a position to battle New York for some of the world’s hottest companies.

Technology firms that have shares with different voting rights will now be allowed to go public in Hong Kong, overturning rules that barred the likes of Alibaba Group Holding Ltd. from considering the former British colony. Businesses will be able to apply under the new regime starting April 30, HKEX said Tuesday.

 

European Union

Swedbank invests €3m in banking tech vendor Meniga (Fintech Future) Rated: AAA

Meniga, a white-label digital banking solutions provider, has received a €3 million equity investment from its customer, Swedbank.

The two firms partnered in 2017 to improve Swedbank’s digital customer experience through a personal finance activity feed and data aggregation platform. The new solution is intended to “give customers better control over their daily finances and a more personal, engaging experience than today”, according to Meniga.

The bank’s view of Open Banking (The Finanser), Rated: A

Another conversation about Open Banking, and an interesting point was raised by one bank. They said that they had been mapping financial moments – getting married, buying a house, having a baby, crashing your car, etc – and had started to reimagine the whole customer experience in those moments using APIs.

For example, I bring up my banking app 3-4 times a day. The bank probably thinks it’s love them as I bring up their app so often. Well I don’t love them at all. I’m just going into the app so regularly because, as a small business, I want to see if my customers have paid yet.

International

World Bank Releases the Latest Global Findex Database (Lend Academy) Rated: AAA

The Global Findex Database and accompanying report give a clear indication of how fintech is impacting access to financial services globally.

Source: World Bank

Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider. Because account ownership is nearly universal in high-income economies, virtually all these unbanked adults live in the developing world. Indeed, nearly half live in just seven developing economies: Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan.

Fifty-six percent of all unbanked adults are women. Women are overrepresented among the unbanked in economies where only a small share of adults are unbanked, such as China and India, as well as in those where half or more are, such as Bangladesh and Colombia.

Read the full report here.

US fintech funding boomed at the start of 2018 — but early-stage funding is drying up in Europe (Business Insider) Rated: A

VC-backed fintech companies raised $5.4 billion across 323 deals globally in the first quarter, according to CB Insight’s latest fintech report, released on Monday.

The figures were supported by a big uptick in deal-making activity in the US. US fintechs raised $2.1 billion across 147 deals. Notable investments include a $165 million funding round for insurance startup Oscar in March and a $110 million capital injection for San Francisco’s Collective Health in February.

Source: CB Insights

While deal activity spiked in the US and Asia, it fell to a 5-quarter low in Europe with just 63 first quarter deals.

The slump was largely down to a decline in early-stage funding deals and came despite several $100 million-plus funding rounds for European challenger banks N26 and Atom. European fintechs raised $933 million in the first quarter.

 

Will Beijing Manage to Survive the US-Chinese Trade War? (Sputnik International) Rated: A

Beijing has kicked off a number of measures aimed at bolstering its economic growth, Chinese researcher Liu Dan told Sputnik. According to Liu, the country’s internal difficulties have not been triggered by the US tariff war unleashed by the Trump administration on China.

One should not overestimate the impact of Sino-American trade frictions on China’s economy, says Liu Dan, a researcher at the Chongyang Institute for Financial Studies (RDCY) of Renmin University of China.

Australia

Lending continues to rise Down Under for RateSetter Australia (Peer2Peer Finance) Rated: AAA

PEER-TO-PEER lending platform RateSetter continues to pass lending milestones in Australia as its loanbook reached A$250m (£136.5m).

The firm, which is the only Australian P2P lender open to retail investors, also announced that it now has more than 10,000 registered users on its site.

RateSetter has doubled its investor base in the country within a year, which it says is due to customer dissatisfaction with Australian banks.

P2P lender’s growth due to consumer ‘rebellion’ (Australian Broker) Rated: A

Peer-to-peer lender RateSetter has attributed its recent rapid growth to consumers actively rebelling against the big banks.

The amount invested by these investors has increased by 14% over the last 12 months, with average investment now sitting at close to $40,000.

Asia

House hunting? Soon you can crowdsource your downpayment via blockchain and smart contracts (E27) Rated: AAA

For millennials, this presents a major barrier to homeownership. While 70% of Chinese millennials have already managed to purchase their first real estate, only 35% of their Malaysian peers have followed suit according to HSBC data. For 64% of millennials around the world a combination of low income and soaring property prices make the prospects of owning a house rather gloomy. A lot of them also do not qualify for traditional loans and do not have the family support for making that downpayment.

Add to this new concept the technology of blockchain, and you have a method by which borrowers can access an alternative down payment funding source, and an immutable record of each borrower-lender agreement is permanently recorded. This serves four purposes:

  1. Blockchain eliminates the traditional borrowing method, with its middlemen and fees. The repayment details are worked out between the borrower and the individual lender.
  2. Blockchain democratises borrowing, because credit scores, history, etc., are not factors in obtaining the loans. If a borrower can show basic ability to repay, an individual lender will be willing to put up the money at an interest rate that is mutually agreed upon.
  3. The borrower-lender arrangement is codified and recorded in a blockchain that is secure and permanent. Both borrower and lender have the security of knowing that their agreement cannot be changed except by mutual agreement.
  4. Re-payments are also recorded in the blockchain environment, so there is never a question about the amount or the ultimate meeting of a borrowing obligation to any individual lender.

Authors:

George Popescu
Allen Taylor

Tuesday February 27 2018, Daily News Digest

LendingClub

News Comments Today’s main news: SoFi’s new CEO wants to get the company ready to go public. Revolut’s transaction volumes increased 700%. China to crackdown on non-bank lending. Blender raises $16M. Today’s main analysis: Stay away from LendingClub’s notes and shares. Today’s thought-provoking articles: Legacy banks, digital startups see opportunity to go beyond storing money. LendingBlock aims to mainstream […]

LendingClub

News Comments

United States

United Kingdom

China

European Union

International

Australia

Other

News Summary

United States

Anthony Noto’s Mission as SoFi CEO: Get the Startup Ready to Go Public (Bloomberg), Rated: AAA

Anthony Noto, the new chief executive officer of Social Finance Inc., is looking to steer the company out of crisis and get it in shape for a potential initial public offering.

The vision for SoFi outlined by Noto didn’t stray far from the one set by his predecessor Mike Cagney, who was ousted after accusations of sexual misconduct inside the company. Noto wants to create a broad online financial-service company, adding checking and savings accounts and wealth management to the main business of refinancing student loans.

SoFi’s new CEO says bank charter remains an option (American Banker), Rated: A

In an interview during his first day on the job, Anthony Noto did not promise any big course changes, though he did leave open the possibility that SoFi will revive its quest to get a banking license.

LendingClub’s Underwriting: Stay Away From The Notes And The Shares (Seeking Alpha), Rated: AAA

I bought my first batch of $25 notes on April 22, 2016. Now, it is important to note that LendingClub is very clear in its advertising that “99% of portfolios with 100+ Notes have seen positive returns.” So I suppose I added a level of risk by not having a portfolio worth at least $2500. But even still, returns can be .1% annualized and count as ‘positive’, but that is not an acceptable return by anyone’s standards given the risks involved in lending to strangers.

My Portfolio

To date, I have received $436 in payments, $96 of which is interest. I have lost $100 on notes that have charged-off, meaning that there is zero expectation of future payment and LendingClub collectors have stopped attempting to reach the borrower. I also have a note that is late, and based on how things have gone so far, I fully expect that to charge-off too and will lose the $11.50 still owed. In short, I have already lost almost 20% of my initial investment, crossing my fingers that none of the 14 notes I still have that are current don’t enter a late status with more than a year to go before the oldest reaches full term. My results have been dismal.

Source: Seeking Alpha

LendingClub’s ratings are A-G, with A being the safest. As you can see, the vast majority of my portfolio sits in A-C, with one E and one G note (LendingClub did away with F and G notes last year).

Source: Seeking Alpha

Legacy Banks and Digital Startups See a Big Opportunity to Move Beyond Simply Storing Money (AdWeek), Rated: AAA

Change can be hard for the financial industry, which is dominated by decades of processes and internal systems. But with a slew of upstarts making their way into the trillion-dollar industry, the old guard is finding innovative ways to beat these challenger brands at their own game.

“A lot of these companies have what we call ‘technical debt’—very expensive mainframe systems that are very difficult to change, run [and are] expensive and obviously that limits their ability to innovate,” said Oliwia Berdak, principal analyst at Forrester Research. “The biggest challenge is often culture … In banks the attitude has always been to perfect [products] before it’s unleashed on customers and [technology] is a big change where you’re working with a certain degree of uncertainty and risk.”

According to data collected by Accenture, 90 percent of banking executives said that their companies needed to “innovate at an increasingly rapid pace just to remain competitive,” but only 47.8 percent say that they are actually “investing comprehensively” in digital.

Another challenge: For all the talk about slick mobile banking apps and services, consumers—gasp—still like going to physical banks to manage financial decisions. Eighty-seven percent of customers enjoy going to a physical bank and prefer to interact with a human while there, per Accenture.

Source: AdWeek

Retail Banks Are Missing Opportunities to Give Digital Financial Advice (Wealth Management), Rated: A

Most customers who received face-to-face financial advice from their retail bank felt their needs were completely met (58 percent), but satisfaction drops when advice is delivered by other means, according to J.D. Power’s 2018 U.S. Retail Banking Sales Practices & Advice Study. Only 45 percent of customers who received digital advice through their bank’s website or mobile app felt their needs were met and only 33 percent felt their needs were met via email.
The majority of customers surveyed for the study (58 percent) said they want to receive advice through their bank’s website and mobile app, but only 12 percent said they received advice in that manner.

Why neobanks need to find a niche offering (Tearsheet), Rated: A

Customers still aren’t excited about digital-only banks. Less than 10 percent of Americans looking to open a checking account would consider doing so at a digital bank, according to a new report by Cornerstone Advisors.

For example, San Francisco-based neobank Chime’s customers are mostly middle-income millennials, with a median age of 29 and incomes between $45,000 to $65,000. Chime says it caters to a gap in the market for younger customers who felt larger institutions weren’t meeting their needs.

Neobanks should focus on a “clear, differentiated value proposition” for the customer, but too many of them are just adding a little technology to a customer experience that’s not terribly different from what the big banks offer, said Satya Patel, a partner at Homebrew, a seed-stage venture capital firm based in San Francisco and an investor in Chime.

How Capital One is rethinking its approach to products (Tearsheet), Rated: A

For the past year, Capital One has been rethinking how it can get out of the too-common approach of “innovating” by layering new technology on top of an old product — it’s realized it needs to entirely reconsider the customer’s interaction with it.

Are banks too blasé about mobile security? (American Banker), Rated: B

About a third of companies have knowingly sacrificed security for expediency or business performance, according to a newly published study, and researchers said that bankers’ responses were consistent with the group as a whole, which included health care and other sectors.

Bringing Credit Invisibles Into Focus with Alternative Financial Data (LendIt), Rated: A

Ten percent of the U.S. adult population do not have a credit score or history with any of the big three credit bureaus.

That’s 1 in 10, or roughly 26 million people who are considered “credit invisible.”

But the financial underserved market spends $173 billion in fees and interest to use $1.94 trillion in financial services, according to the 2017 Center for Financial services Innovation study.

There are four basic categories of people who fall under the credit invisibles umbrella:

  • Millennials: People between 18– 34 and have not yet borrowed money or gotten a credit card.
  • Low-Income: People who don’t make enough money to gain access to credit.
  • Recent immigrants: People who recently moved to the U.S. but haven’t established credit.
  • Mass-affluent: People who earn more than $100,000 per year and pay with cash instead of credit.

Mobile Payments In US To Reach $ 3 Trillion Within Two Years (Payment Week), Rated: A

in 2015, mobile payments in the US represented $550 billion. That’s good by most any standard, but the growth expected is staggering. By 2020, that number is projected to hit $2.8 trillion. That represents a compound annual growth rate (CAGR) of 39.1 percent, which is far beyond most any but the most unlikely investments.

China represents $5.5 trillion in mobile payments use as of right now, a combination of various societal factors like a comparative eschewing of the personal computer in favor of the mobile device, as well as a near-ubiquity of locations that accept the system.

BREAKFORM | RE Closes a Small Lot Subdivision Development in Record Time Via Crowdfunding (PRWeb), Rated: A

BREAKFORM | RE closed its latest small lot subdivision development project in the prime West Hollywood adjacent neighborhood in record time using Equity Multiple, one of the leading real estate crowdfunding platforms. The offering was 145% subscribed in 72 hours.

Credible Appoints Chris Bishko as Chief Financial Officer (BusinessWire), Rated: B

Credible, the consumer finance marketplace that helps consumers save money and make smarter financial decisions, today announced that it has appointed Chris Bishko as chief financial officer. Mr. Bishko will report to Credible’s founder and CEO Stephen Dash.

New York Lawmakers Open to Revisiting the BitLicense (CoinDesk), Rated: B

A bill to reform the regulation could be introduced “very soon,” State Senator David Carlucci told CoinDesk.

But what is likely to remain is the animosity toward the BitLicense, as evidenced by the small but dedicated protest gathering outside just before the roundtable began, not to mention the grievances aired by the two dozen or so attendees.

United Kingdom

Transaction volumes increase 700pc at fintech firm Revolut (Independent.ie), Rated: AAA

Fintech start-up Revolut has seen its monthly transaction volume increase by over 700pc in the last 12 months to $1.5bn (€1.2bn).

Lendingblock Aims to Popularize Crypto Lending in a Secure and Transparent Way (cryptovest), Rated: AAA

Lendingblock aims to become the first to build a marketplace where cryptocurrency lenders meet borrowers, and can exchange their assets across blockchains. The platform aims to bring securities lending to the crypto economy. The current estimates of the market paint a picture of enormous potential for development: in 2017, $2 trillion of assets on loan in traditional securities lending brought approximately $4 billion in revenue. Replicating this in crypto could generate up to $300 million within 3 years as the project notes in its white paper.

 

Britain’s big banks play catch up with fintech with new apps (Reuters), Rated: A

British retail banks are poised to introduce money management apps to compete with those already launched by financial technology start-ups, betting their trusted brands, broad client base and deep pockets will help them make up lost ground.

NatWest sets up network of fintech accelerator hubs (Finextra), Rated: B

The UK’s NatWest is launching four specialist fintech accelerators based in its Bristol, Edinburgh, London and Manchester sites.

China

Screws to tighten further on non-bank lending (The Standard), Rated: AAA

China will tighten its crackdown on illegal fundraising to fend off financial risks, according to an inter-agency meeting.

European Union

European Fintech Alliance raises bank API fears (Finextra), Rated: A

The European Fintech Alliance has fired another broadside in its tussle with the financial services establishment over PSD2, raising fears that banks will develop substandard APIs as a way to fend off competition.

Specifically, the alliance of 74 fintechs, challenger banks and fintech associations is unhappy that the Regulatory Technical Standards on strong customer authentication and common and secure communication under PSD2 allow banks the possibility to be exempted by their National Competent Authority from having to accommodate licensed Third Party Payment Services Providers (TPPs) to access accounts via the so called fallback option in case of malfunction of the API.

International

Marketplace lenders worldwide raised nearly bn last year (P2P Finance News), Rated: AAA

THE GLOBAL marketplace lending sector saw nearly $9bn (£6.45bn) invested across 233 deals last year, marking a new funding record for the industry.

Consultancy firm Fintech Global, who compiled the data, found that equity investment in the sector rebounded to $8.9bn last year after a slowdown in 2016. The total was boosted by the top 10 deals, which raised a combined $4.4bn.

The second half of the year was strongest for funding, with the largest deal of the year closing in the fourth quarter when Shanghai-based peer-to-peer lender Lufax raised $1.2bn.

Online lender ID Finance bolsters security with beahvioural biometrics (Finextra), Rated: A

ID Finance, the emerging markets fintech company, is incorporating behavioural biometrics into its AI-based fraud scoring engine to eliminate fraud, boost loan approvals and reduce the incidence of non-performing loans.

The behavioural biometrics system studies the unique typing and behavioural patterns users display during the loan application process to capture a range of patterns. These include mouse movements, to how fingers interact with a keyboard. The biometrics record patterns such typing speed, typos, flight time between keys, keystroke depressions, as well as the patterns from actual input.

Celsius: Get Dollars When You Need Them or Get Paid to HODL (cryptovest), Rated: A

The global financial system is wobbling. Banks and other traditional financial institutions have so far managed to survive the crisis resulting entirely from their errors, greed, and arrogance. Now, many believe, they won’t live through the crypto revolution unless they embrace it.

Meet the Celsius Wallet – a combination of a digital wallet and a peer-to-peer lending platform where members can earn passive interest on their crypto holdings and use them as collateral to get loans in fiat currencies.

Australia

‘Essential’ brokers advising Xinja on mortgage strategy (TheAdviser), Rated: A

The chief executive of banking disruptor Xinja has revealed that mortgage brokers have been involved in the group’s home loan plans and will be “essential” to its strategy.

The crowdfunded online lender recently received an Australian credit license (ACL) from the Australian Securities and Investments Commission (ASIC) and plans to utilise the broker channel to facilitate its digital home loan approval process.

Mortgage franchise sees decline in loan settlement (AustralianBroker), Rated: A

Mortgage franchise Yellow Brick Road posted a 2% decline to $7.74bn in loan settlement volume in the first half of FY18 over the previous period as it reduced its number of branches.

Overall, the company delivered 85% growth in profitability, with net profit before tax increasing to $0.53m in the first half of FY18 over the same period of FY17. It cited higher revenue – up by 5% – and lower costs – down by 4% – as drivers of its result.

The company also expects the addition of a small business lending product through its partner Prospa to provide additional revenue opportunities for its network and support growth in commercial lending.

India

P2P platforms as NBFCs gaining popularity in small cities, but there’s a catch (Financial Express), Rated: AAA

P Kanwal is from Punjab’s Bhatinda. He has a furniture business which mainly deals in cash, because of which it was difficult for him to get a secured loan from the formal banking system. For him, a Peer-to-peer (P2P) lending platform came as a rescue, which got him an unsecured loan for his kid’s education and expanding his business.

This not just the story of Mr Kanwal, but many more small entrepreneurs who are operating their businesses in Tier-1, Tier-2 cities and far-flung areas, some not even on Google map, who are getting financial support through P2P lending.

The pattern that emerges currently from the P2P lending is that borrowers from tier-2 and tier-3 cities comprised 20% and 17% of the total number of loans disbursed through the platform. The new-to-credit borrowers comprise 35% of fulfilled borrowers, while those with poor credit ratings accounted for 10% of the overall number.

MENA

Peer-to-Peer Lending Startup Blender Raises Million in Debt Financing and Equity (CTech), Rated: AAA

Israel-based peer-to-peer lending startup Blender P2P Israel Ltd. has raised $16 million in equity and debt financing, the company announced Monday.

Latin America

Airfox Launches Mobile App in Brazil, Giving Unbanked Access to Financial Services (PRWeb), Rated: A

Airfox, a mobile financial services company, today launched its free Android app in Brazil, giving millions of people unprecedented access to much-needed financing solutions.

More than 44 percent of Brazil’s population is unbanked, another 30-44 percent lack sufficient access to mainstream financial services, and those with credit cards face interest rates upwards of 200 percent (sources: World Bank, Bloomberg).

Canada

Big banks strive to give better digital financial advice (BNN), Rated: AAA

CTV’s Chief Financial Commentator Pattie Lovett-Reid discusses the Canadian banks’ quest to deliver quality online financial advice in an effort to catch up with the digital age.

Africa

PayJoy Partners With Vodacom & CBA to Bring Smartphone Financing to Tanzania (Crowdfund Insider), Rated: AAA

PayJoy, a San Francisco fintech startup, announced this week it has teamed up with Vodacom and CBA to bring smartphone financing to the country of Tanzania.

PayJoy Teams Up With Allied Mobile to Bring More Smartphones to Africans (Crowdfund Insider), Rated: A

PayJoy, a San Francisco fintech startup, announced on Friday it has teamed up with mobile distributor Allied Mobile to bring affordable smartphone payment plans to markets across the continent of Africa. According to the duo, Allied Mobile will use PayJoy Checkout, an instant paperless finance system for customers without access to formal credit, and the patented PayJoy Lock which enables “pay-as-you-go” access to the phone. 

Authors:

George Popescu
Allen Taylor