News Comments Today’s main news: SoFi changes wealth portfolios. Silver Lake buys $500M of Credit Karma stock. Half of Zopa deposits are into IFISA accounts. Landbay considers IPO, opens Seedrs campaign. Wonga South Africa enters personal lending. Today’s main analysis: 7 reasons to hate the long bond (A GREAT READ). Today’s thought-provoking articles: The benefits of additional data from […]
SoFi makes changes to wealth portfolios. AT: “Alternative lenders must constantly and consistently reassess their offerings. Those that are willing to make adjustments based on current market conditions will survive.”
How to benefit from additional data while reviewing subprime applicants. AT: “This analysis compares two hypothetical loan applicants. It’s a great analysis with a salient point. Data doesn’t always tell the whole story, but lenders should get as much data as possible, and not be afraid to resort to alternative data when necessary.”
Sophisticated investors could be harming online lending platforms. AT: “Unfortunately, or fortunately, depending on your POV, big money wins peeing contests. Platforms need institutional money to grow, but there is a balance to spark between pursuing fast growth and creating opportunities in the hidden market. This is a balance every lender has to strike for itself.”
On Tuesday, online lending platform SoFi announced it was making changes to wealth portfolios. SoFi made changes in all five risk strategies – Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive.
Conservative:
“Our lowest risk portfolio invests heavily in bonds, which may be appropriate for someone investing with a lower tolerance for risk or a shorter time horizon, like under three years. With bonds, there are three options: Short-term bonds are considered lower-risk/lower-reward, intermediate-term bonds are considered moderate-risk/moderate-reward, and long-term bonds are considered higher-risk/higher-reward.
Source Crowdfund Insider
Moderately Conservative
“The Moderately Conservative strategy is also weighted toward short-term bonds, so it’s a fairly cautious approach. Historically, we’ve selected both investment-grade bonds (lower risk, lower interest rate) and high-yield bonds (higher risk, higher interest rate). Now, we’re reducing some of that high-yield exposure and increasing the amount of investment-grade bonds to lower the overall risk of this portfolio. This strategy also invests a bit in the stock market. Our approach here (and in other strategies) is to balance our investments across the globe. We’re putting a little less in Emerging Markets, less in U.S. Markets, and more in Developed Markets outside the U.S. (like Japan, parts of Europe, and Canada). We believe that these new allocations will give this portfolio a relatively better chance to grow.”
San Francisco based Credit Karma has received $500m in a secondary offering from Silver Lake, valuing the company at $4b.
Credit Karma isn’t receiving any proceeds or issuing any new shares as part of the transaction, Chief Executive Kenneth Lin said in an interview. Rather, Silver Lake is amassing common shares from earlier investors and employees in a so-called secondary sale that values the 11-year-old company at roughly $4 billion, according to a person familiar with the matter.
Nearly 80 million adults have what is considered subprime credit, according to Experian data.
The takeaway: while Darrell has a higher biweekly income than Nancy, he is much less stable in his borrowing history. And, while Nancy has been late on a few payments, she has a proven track record of ultimately satisfying her debts.
These examples illustrate why lenders hoping to help consumers in the growing nonprime and subprime markets stand to benefit from alternative credit data.
But lending platforms, also called peer-to-peer lending, must address a major design problem: Sophisticated investors have been gaming the system by applying specialized screening tools to scoop up the choicest loans with the lowest default rates, leaving less experienced investors with less attractive loans to choose from. After these lower-grade loans perform poorly—that is, the borrowers fall into arrears with payments or default altogether—these less savvy investors may flee the platform.
Can lending platforms make their systems more equitable for all investors?
In their new working paper Marketplace Lending: A New Banking Paradigm? Vallée and Yao Zeng, an assistant professor of finance at the University of Washington, address these issues from the perspective of what platforms can do to level the investing playing field.
The key variable to control, Vallée and Zeng found, is the amount of information available about loan applicants. When platforms share a lot of information about applicants with potential investors—data such as income, debt level, and credit history, and even whether the loan is financing a wedding, for instance—experienced investors can precisely pin down the safest loans to back.
The researchers looked at all transactions executed by LendingRobot users for a three-year period between January 2014 and February 2017, including more than $120 million invested on the two major lending platforms, LendingClub and Prosper. They found that using the LendingRobot screening model paid off by reducing the average loan default rate by more than 20 percent compared to the average level on the platforms.
Appealing to this new financial demographic is the idea behind such companies as Upstart and Social Finance Inc. (commonly known as SoFi). Since 2013, SoFi has securitized about $9.5 billion in loans, while Upstart last year packaged $338 million of personal loans into two deals.
SoFi targets top college graduates – Harvard lawyers, Yale doctors, Wharton bankers – people whose outstanding student-loan balances match their outstanding career potential. For SoFi, this cohort is a good bet to provide lower-cost loans that allow the buyers to de-lever faster and hopefully return for car loans, mortgages and wealth management services such as college and retirement savings plans. Upstart took the idea a stage further by widening the customer base beyond the Ivy League.
Mobile devices have changed consumer expectations. People now expect that you can have access to anything you might need right from your mobile device. While this has historically been the case for consumer financial apps, Kabbage released data today on small businesses which shows they too are leveraging mobile to better manage their business.
They analyzed behavior of almost 150,000 small business and found that between April 2014 and February 2018 loans accessed through mobile increased by more than 360 percent. Dollars accessed through mobile increased over 1,220 percent.
The fintech startup Petal announced a partnership Wednesday with WebBank to officially launch a credit card for the estimated 65 million people who have insufficient credit history to qualify for a traditional credit card.
The CFPB has identified 45 million people who have no credit score,” Gross said. “Experian and others have indicated that there are 50 million more people that are thin file people and have a have a credit score that’s not accurate because of limited data at the credit bureau. Andreessen Horwitz has estimated 90 million people are misscored — that’s a third of the U.S. population.
Aperture is a new platform that is focusing on the real estate marketplace putting a new spin on property crowdfunding. While not the first blockchain based real estate startup, Property Coin (PCX) is in the midst of a security token offering that is claiming first when it comes to crypto denominated securitization / structured real estate portfolio using distributed ledger technology.
Operating in the fix and flip space, Aperture says they have delivered over “50% un-levered IRRs so far – a claim that is pretty impressive.
In aggregate, their team claims they have been involved in the closing of over $150 billion of real estate financing transactions and have originated over $10 billion in mortgage loans, having worked for some of the largest investment banks in the world.
Lenda claims to make the fastest mortgages out there — currently two weeks start to finish, with an eventual goal of 30 minutes in a nearly all-digital process.
Launched in 2014, Lenda has made $200 million worth of mortgages, is licensed in 12 states and plans to expand to 12 more later this year. Jason van den Brand, its co-founder and CEO, said that despite other big players, the mortgage arena is ripe for further disruption.
How Lenda works
Lenda lets the consumer log in to their bank account from its portal to retrieve the necessary three months of bank statements. (They could also download the statements from their Dropbox, Box or Google Drive account and then upload them to Lenda.)
Income verification and employment verification are automated where possible. To be sure, some employers don’t share employment data with databases used by lenders. In such cases employment verification needs to be manual.
Consumers ready for a digital mortgage
Consumers, meanwhile, seem to be increasingly ready for digital mortgages. According to a Harris poll commissioned by Fiserv, 69% of consumers already research loan options online and 68% said they review loan documents online. Among millennials, 48% said they would be comfortable researching loan options on their smartphone.
Specifically, it looked at businesses that earn an annual revenue of less than $7,500,000, have been in business for at least six months and no longer than 60 months, and submitted a loan query to LendingTree between Jan. 1, 2016, and Jan. 23, 2018. The self-reported data was then limited to the 50 most populous metropolitan areas, and with that, a list was born.
Faced with watching some parishioners struggle to pay back high-interest loans, the Society of St. Vincent de Paul Diocese of Columbus launched its own microloan program in Licking County in late 2016. Since then, it’s expanded to four other counties.
The non-profit organization has partnered with a local credit union to offer loans of up to $500. Borrowers then make monthly payments for 12 to 15 months to pay off loans that carry an interest rate of 3 percent.
That’s a fraction of the rate for loans from payday lending businesses, where interest can exceed 600 percent.
The Catholic microloan program is open to people of all faiths, and Zabloudil says about 75 percent of loan recipients have made good on their payments. Part of the reason for that, Zabloudil says, is they work to ensure borrowers don’t get in over their head.
The program currently offers loan to people from Franklin, Delaware, Fairfield, Knox, Licking and Ross Counties. Zabloudil hopes to eventually take the program to the 17 other counties served by the Roman Catholic Diocese of Columbus.
Lennar Corp. plans to start using mortgage-application technology from San Francisco, Calif.-based startup Blend in an effort to attract younger buyers. By applying for a mortgage online or on a phone, consumers can shave 10 days off the process, executives say. The Wall Street Journal’s Laura Kusisto reports:
Making it easier for those buyers to get mortgages could help Lennar with attracting millennials, a critical group of home buyers that have been put off from buying new homes by the high prices and long commute times to many communities. An additional obstacle on the margins for younger home buyers is the complicated process of applying for a mortgage.
GoKapital, an online lender from Miami Florida, has launched an affiliate program that will allow bloggers, webmasters, and digital marketers to earn commissions when they refer new customers to one of their business loan programs.
GoKapital’s Affiliate program highlights:
Business loans ranging from $10,000 to $1,000,000 for every industry. Servicing businesses in all 50 states, Canada, and Puerto Rico
Marlette Funding, LLC, owner of the Best Egg personal loan platform, today announced the addition of Marshall Lux as an Advisor to the Board and Company.
Marshall Lux has been a Financial Services consultant and practitioner for 30 years. He began his career at McKinsey where he served all manner of financial service firms across a variety of subsectors and functional areas. Marshall led McKinsey’s and BCG’s private equity practice. He has extensive relationships across PE Firms.
Jack Henry & Associates’ banking division is in seventh heaven with the revelation that seven US community banks within the last seven months have selected to implement its Core Director processing platform.
The platform can be installed in-house or implemented through JHA OutLink Processing Services, Jack Henry Banking’s outsourced offering.
The firm names two of the banks – California International Bank and the State Bank of Bottineau, located in North Dakota. FinTech Futures has contacted Jack Henry for the other five names but they won’t be revealed yet.
Half of all customer deposits at peer-to-peer lender Zopa since the start of the year have come via its Innovative Finance Isa, despite only launching the tax-free accounts in June 2017, This is Money can reveal.
Zopa, which was the first to offer the new style Isa product, said 12,000 customers have opened one of its two Isas, which offer up to 4.6 per cent interest.
For savers with a cash Isa, the FSCS offers protection of up to £85,000 per banking licence. This means that if something goes wrong with the bank or building society where you have deposited your money, you will never lose the first £85,000.
Meanwhile for those with a stocks and shares Isa, the first £50,000 is protected, as long as the provider belongs to the scheme.
LANDBAY has announced that it is opening its latest equity funding round to new investors on Seedrs, as its chief executive unveils the company’s flotation ambitions.
The peer-to-peer lender, which specialises in buy-to-let mortgages, has already raised its target of £1.25m from this funding round but it has been opened up again to new investors.
LendingCrowd said March 28 that it secured another 2 million pounds ($2.8 million) in funding led by Equity Gap. Also participating were a number of private investors from Scotland’s entrepreneurial and finance scene and the Scottish Investment Bank. LendingCrowd, of Edinburgh, Scotland provides a peer to peer lending platform.
But technology also presents opportunities to reach new markets – making it vital that credit unions keep up with new developments, delegates at this year’s conference of the Association of British Credit Unions (Abcul) were told.
Pitching his fintech to the conference, he said it could offer new possibilities to the sector, such as partnering with the Post Office to offer branch facilities where members can deposit and withdraw money.
“Mobile use is continuing to shoot up. 78% of the UK population is using a smartphone two-four hours a day – and fastest growth is the over -55s. In the South Manchester Credit Union 65% of traffic comes from mobile devices. It’s something we’ve got to accept.”
Colchester in Essex is the top area to invest in buy-to-let based on capital growth, transaction volumes, rental yield and rental price growth, LendInvest research shows.
In Colchester prices are rising by 9.98% per year, rental growth is increasing by 3.41%, transaction volumes are rising by 2.79% and yields stand at 3.71%.
Despite topping LendInvest’s list Colchester is far from the best in terms of yield, with Manchester offering returns of 5.42%.
The worst area to invest is in East Central London, where capital gains are falling by 3.76%, rental price growth is sliding by 1.1% and transaction volume growth is down 1.73% year-on-year. Despite all of these factors landlords in that area still make a yield of 2.9%.
In a growing economy there is a balance to be struck between ensuring banks are well-capitalised and providing the credit private companies need to expand. That much is recognised by leading business figures such as Mike Welch and Jim McColl, with the latter planning to launch his own bank to help address the funding issues.
In that context, the £425 million Royal Bank of Scotland has set aside to boost competition in the banking sector for SMEs is to be welcomed.
And it is encouraging that Nationwide said it would direct that funding to the UK’s 5.7 million smaller and micro businesses rather than the big corporates, given that is arguably firms of this size which have suffered most from the tightening of bank lending. It is also SMEs, broadly speaking, which have been caught up in the shocking mistreatment scandals that have to occurred at certain banks since the financial crisis.
Investors in the Assetz Capital platform are yet to be convinced by cryptocurrencies, with just 16% seeing them as worthwhile investments.
The peer-to-peer lending platform canvassed the views of its investors in the Q1 Assetz Capital Investor Barometer. 43% believe the entire market is on the brink of collapse, while 40% feel cryptocurrencies are still too immature at present with significant risks attached. 14% feel it is a worthwhile investment but only in moderation, with just 2% thinking it is the future of investments.
One route into the fintech sector is the Spotcap Fellowship, which provides up to £8,000 towards the cost of an MBA and a path to working at the Berlin-based online lender.
Niels Turfboer, UK managing director of Spotcap and an IE Business School MBA graduate, says he created the scholarship to address a talent shortage. A survey by recruitment website Indeed found that 20 percent of top fintech job vacancies were left unfilled after 60 days.
CreditEase, a Beijing-based leading FinTech conglomerate in China, announced that its venture fund, CreditEase FinTech Investment Fund (“CEFIF”), recently joined a group of prestigious investors to participate in the Series B investment round of $70 million in Branch International. Other strategic investors in this round of financing include International Finance Corporation (IFC), Andreessen Horowitz, Trinity Ventures and Victory Park.
According to the report recently published by CreditEase, jointly with IFC and Stanford Business School, there are over two billion adults globally in the emerging markets who do not have access to basic financial services (click here to download the Financial Inclusion Report). On a daily basis, Branch processes tens of thousands of loans, in amounts ranging from $2.50 to $500, and expects its total loan origination to exceed $250 million in 2018. Recently entered into the Nigerian market, Branch is currently growing 50 percent month-over-month within that country and 20% month-over-month overall.
For millions of people, a lack of access to credit is just another part of life. Yet, without this access, it can be incredibly difficult for businesses and customers to connect with each other. In fact, according to The World Bank, despite a 20% increase between 2011 and 2014 in the number of adults with access to formal financial services worldwide, an expected 2 billion adults worldwide are unbanked. In addition, some 200 million businesses are excluded from the formal financial system.
The problem is particularly prolific in high growth markets; with a 2015 PwC report putting India’s unbanked population at 233 million (that’s nearly every 1 in 6 people). In South East Asia, a further 264 million people are without access to credit (including a staggering 80% of Cambodians). And even beyond the individuals affected, some 200 million businesses are excluded from the formal financial system.
A key way that we are achieving this at PayU is through our €110 million investment in German fintech company Kreditech, a leading technology group for digital consumer credit using machine-learning based underwriting. With traditional credit models simply not catering to large sections of the population, collaborative partnership can be instrumental in finding new ways to offer innovative solutions to the huge problem at hand.
International
Seven reasons to hate the long bond (INTL FCStone Email), Rated: AAA
The price of long-term treasuries will fall because:
1 – The global savings glut is turning into a global savings squeeze
2 – Just look at a chart of Treasury yields
3 – Speculative traders have a massive one-way bet on curve-flattening
4 – China could (should?) sell long-term Treasuries to teach Trump a lesson
5 – The Federal Reserve is reducing the size and duration of its holdings: it still has $526 bn of long bonds to sell!
6 – U.S. public debt is abnormally short: deficit-driven issuance will hit the long end disproportionately
7 – Forward guidance artificially compressed term premia: economic uncertainty will make them rise again
Source: INTL FCStoneSource: INTL FCStone
Chinese savings are unlikely to support anymore U.S. bonds for at least five reasons:
• The disappearance of China’s trade surpluses: China’s trade surplus has fallen from 10% of GDP in 2007 to 1% last year. China may become a deficit country next year.
• The Belt and Road initiative: China has found much better uses for its savings than financing the U.S. military and boomers’ Social Security claims. Going forward, China’s mountains of savings will build the infrastructure of Central Asia, the horn of Africa, Russia, Iran, Southeast Asia, and Eastern Europe, rather than flood the U.S. Treasury market.
• American protectionism: In the unlikely event that Trump’s bid to reduce the U.S.-China trade deficit by $100 billion next year is successful, China will have $100 billion less to invest in the U.S. Treasury market.
• China’s retaliation against American protectionism: Despite Trump’s claim that “trade wars are easy to win”, other countries have national interests too. China also has industries to protect, jobs to defend, and face to maintain. China is sitting on $3.1 trillion in currency reserves: according to the U.S. Treasury, China holds about $1.2 trillion in U.S. national debt (that just includes official accounts).
Fintech is disrupting the global finance industry, to the benefit of both businesses and consumers.
Advancements in communication and information technology has enabled the rapid growth of technology platforms that provide transactional services. Online payment systems, debt platforms and online exchanges allow companies to better manage their clients and use the data collected to provide the best possible service.
What Fintech products will the property industry gain the most benefit from?
Data Analytics: Using information and data from Fintech platforms will help advisors and agents to make informed decisions for their clients. They will be able to get a better understanding of the client’s overall position, while also increasing the level of personalisation for the client.
Raising Capital: There are a number of avenues available for raising capital and the digitalisation of fundraising will open up new opportunities. Using Fintech products will not only speed up the process, but it will also open the door for reaching new investors through a number of online platforms.
Despite government’s discouraging stance towards cryptocurrencies India’s crypto startups are getting their deserved thumbs-up from the industry and investors. One such promising startup known as Nuo Bank just raised about Rs. 1.6 crore ($250,000) from the CEO and MD of PayU India within a week of its launch, which shows the kind of trust that both PayU directors have in its growth potential.
Next, like other major cryptocurrency companies Nuo bank will also have its own coin. It’s going to issue 200 million Nuo tokens to customers, which represent 20% of its 1 billion token supply. The value of these tokens will be determined from smart contracts, and the smart contracts stipulate that 25% of Nuo Bank’s revenue should be kept reserved for these tokens.
From established players like Faircent to early stage companies like India Money Mart, Paisadukaan and OML P2P, all are trying to develop the industry’s first blockchain platform and also share data about lending transactions between them in order to mitigate frauds.
All these companies have applied and are waiting for the NBFC P2P licence from the Reserve Bank of India.
Faircent, the country’s largest P2P platform has committed upwards of $1 million for this kind of a solution which they feel will help them reap huge benefits when traction on these platforms gains.
The Singapore-based firm forecasts a US$2tn market opportunity in its use of blockchain to provide a secure invoice factoring solution using its customised cryptocurrency. With its token pre-sale set to end on April 8, the group’s initial coin offering will launch on April 9.
Acudeen Technologies brands its platform as “an inclusive environment for small businesses who are having a hard time getting financing using traditional means”.
Wonga, the well-known short-term lender, has added to its range of consumer finance products with a new personal loan. Like a payday loan, the personal loan is unsecured, which means assets such as vehicles and property are not required as collateral.
The key differences between payday and personal loans are the amount of money borrowers can access and the repayment period. The personal loan, also known as an installment loan, allows new customers to borrow a maximum of R4000 which they repay in equal pre-scheduled repayments (or installments) over a period of 2-6 months.
The numbers are in and the jury is out. The world over the fintech craze that underpins lending outside the traditional banking ecosystem continues unabated.
Whether the channel of consumption is online, mobile or the services packaged differently such as payday lending and layaway financing, investments continue to pour in chasing opportunities in a vertical that is quickly getting overcrowded with little to no service differentiation and a continued insistence on insight wizardry riding off copious amounts of personal data ingested.
Essentially technology can do two things for the advisor. It can significantly reduce the costs of administration and record keeping, while also making these processes simpler and more efficient.
“The whole market place is talking about digital – the rewiring of the investor and the investment advisor,” Wilson says.
News Comments Today’s main news: Prosper broadens its capital stack. MarketInvoice nabs 135M GBP from two European banks. Klarna hit by fraudsters. Square intros instant deposits in the UK. Hong Kong-China commuters now have a dual-currency prepaid credit card. Today’s main analysis: PeerIQ’s lending earnings insights. How 6 digital banking startups are challenging the retail banks (A MUST-READ). Today’s thought-provoking […]
Prosper broadens deep capital stack with ABS. AT: “Securitization has been a great way for the leading alt lending companies to stretch themselves and take the sector to new horizons. It’s good to keep innovating and developing the business model, especially as firms move beyond the startup phase into the growth phase and beyond.”
Amazon vs. Costco, PeerIQ’s lending earnings report. AT: Everyone likes to talk about Amazon moving into the lending space, but what about Costco and other retailers? But the real analysis here is the preview of PeerIQ’s lending earnings report, due to publish in a couple of days.”
This year, Prosper broadened its capital stack for the first time, including a ‘D’ class of bonds on its $647.5m offering, which was priced on Wednesday. Credit Suisse and Jefferies led the deal, with the $387.8m ‘A’ notes pricing at 70bp over euro dollar spot forwards. The $112m ‘B’ notes were priced at 125bp over EDSF, while the $79.45m ‘C’ notes were priced at 220bp over interpolated swaps. The $68.25m ‘D’ notes were priced at 300bp over IS.
In contrast to last year, Prosper also strenghtened the collateral mix on its 2018 offering. According to a presale from Kroll Bond Rating Agency, loans from Prosper’s higher quality credit tiers made up 54% of the deal, compared to 38% on its November 2017 transaction. The proportion of lower quality credit tiers also fell to 46% in this deal, compared to 62% on its last deal.
Fintech has been playing an increasing role in shaping financial and banking landscapes. In this paper, we use account-level data from LendingClub and Y-14M data reported by U.S. banks with assets over $50 billion to examine whether the fintech lending platform could expand credit access to consumers. We find that LendingClub’s consumer lending activities have penetrated areas that may be underserved by traditional banks, such as in highly concentrated markets and in areas that have fewer bank branches per capita. We also find that the portion of LendingClub loans increases in areas where the local economy is not performing well.
TransUnion (2017) reported that, as of 2017:Q3, the personal unsecured loan market had reached nearly $112 billion.
Credit cards account for the lion’s share of unsecuredconsumer debt ($731 billion in 2017:Q3).3 Interestingly, there is evidence that credit card lending is related to geographic location. Carbo-Valverde and Perez-Saiz (2016) find that the probability of obtaining a credit card or line of credit from a bank increases 60 percent when the bank has a branch within 10 km of the household.
Where are we in the credit cycle? Earnings calls indicate CEOs/CFOs are constructive on the health of the US consumer and see a tax reform as improving consumers’ disposable income.
Credit re-normalization continues across all major lending groups. Credit performance this quarter is mixed. We observe improvements, and record low delinquencies from ONDK, OMF, and FinTechs in particular. LendingClub expects 31 bps lower charge-offs going forward due to tighter credit standards. At Discover – a bellwether for personal loan performance – the net charge off rate jumped 92 bps YOY to 3.62% – the largest increase in several years.
Card issuers are increasing loan loss reserves at a higher rate than loan growth, indicating expectations of higher losses going forward. American Express increased loan loss provisions 33% although loan growth was only 14%.
Banks have started to implement behavioral biometrics more and more as it is seamless for customers and helps to better detect fraud; behavioral biometrics firms like BioCatch has provided banks with the type of security they like, customers cannot see if but it also is harder for criminals to spoof; BioCatch reviews more than 5 billion transactions per month and has about 60 million users in their system; another reason banks love this type of security is the privacy regulations are not as strict, the data is not personally identifiable and is based on type of actions.
That’s because 38% of college-educated adults think an emergency fund of $5,000 or less is sufficient. That’s the latest from online lender Laurel Road, which also found that women — particularly younger ones — are generally more conservative when it comes to building their safety nets. Specifically, millennial women think people should have an average of $9,727 in an emergency fund, compared to millennial men who think an average of $8,040 works just fine.
The majority of working U.S. adults are nowhere close to having three months’ worth of living expenses in the bank. A good 57% have less than $1,000 in savings, according to data released by GOBankingRates last year, while 39% have no savings at all. If you’re part of either statistic, it means your finances aren’t in great shape — and that you need to make changes immediately.
Lendr, a provider of flexible working capital to small- and medium-sized businesses, specializing in business finance and factoring solutions, announced today the closing of a $25 millionsenior credit facility. MidCap Financial Trust served as the Administrative Agent for the transaction. The deal agreement provides Lendr with increased financing power and the expansion of the facility to $50 million.
First RealFund (“FRF”) has raised $600,000 of preferred equity financing for an apartment building undergoing a renovation and upgrade in Brooklyn’s Clinton Hill neighborhood.
The Sponsor, Duke Properties, owns a portfolio totaling more than 400 rental units with a geographic focus centered around New York City. “We target value-add properties in emerging neighborhoods and we apply innovative and effective renovation strategies based on our 15+ years of experience,” observed Albert Dweck, CEO of Duke Properties. “Our goal is to increase the value of our buildings while contributing to each neighborhood.”
According to a 2015 survey by the Federal Deposit Insurance Corporation, approximately 7 percent of American households are unbanked (meaning they have no checking or savings account), and an additional 19.9 percent are “underbanked.” The percentages are higher—approximately 50 percent—among both low-income and minority households.
New America Report
While approximately 22 percent of adults in high-poverty African-American communities have used online banking services in the past year, a significantly higher percentage (39 percent) of adults in wealthier black communities have used the technology.
AxiomGo is a paperless checking account for customers who want an alternative to prepaid cards and traditional checking, the bank said.
The $560 million-asset Axiom partnered with the fintech firm Malauzai to design and deploy a mobile app that “meets the unique needs of a traditionally underbanked community, providing users a dynamic, bilingual, mobile banking experience,” it said Thursday.
Source FDIC, American banker
The app, which had a soft launch in December, has a Spanish-language option and enables users to open and fund an account and set up direct deposit via a mobile device. Other features include the ability to pay bills by snapping a photo; check deposit; fund transfer and peer-to-peer payments; and access to built-in budgeting and personal finance management tools.
Whether they were unable to secure credit because of bad (or nonexistent) credit history, sluggish cash flow or a lack of collateral, these growth-oriented businesses often find they’re not considered a good fit for traditional loans or lines of credit. There are, however, unexpected outlets available to them. I wish they’d been available to me when I started out 20 years ago.
The short answer: Some student loan borrowers will pay more interest.
Most student loan borrowers depend on federal student loans, which have had a fixed interest rate since 2006. Although 1.4 million people yearly also depend on private student loans, which can have either a fixed rate or a variable rate that’s connected to either the LIBOR, prime or T-bill rates.
When the Fed increases these variable rates, borrowers with variable-rate loans will likely pay more interest. However, it will depend on the benchmark, according to CNBC.
Agora Data, Inc. (“AGORA”), a Texas-based provider of technology solutions for the financial services industry, announces its partnership with industry leader Ignite Consulting Partners (“Ignite”) to provide increased transparency and security to the consumer finance marketplace through the development of a “Certified Seller Program.”
Factury Inc., the company behind FIC Network, today announced a strategic partnership with Civic Technologies Inc. The partnership brings trusted, secure identity services to the token sales participants identification and enables FIC Network to streamline the identification and KYC process, enhancing the token sales privacy and security.
Arizona has become the first state in the U.S. to adopt a “regulatory sandbox” to shepherd the development of new emerging industries like fintech, blockchain and cryptocurrencies within its borders.
The law will grant regulatory relief for innovators in these sectors who desire to bring new products to market within the state.
Business finance firm MarketInvoice has today (March 26) announced new agreements with two European banks, boosting its platform by £135m.
The London-based firm struck a deal with Portuguese bank Banco BNI Europa (BNI) to add £90m to its platform and another, with German bank Varengold Bank AG, worth £45m.
Banco BNI Europa initially invested £28.3m in 2016, following it up with £45m in May 2017 and a further £90m this month.
Square Co-Founder and CEO Jack Dorsey announced the launch of a new Instant Deposit service for UK businesses at an event at London’s British Library last night.
The new product helps to solve one of the biggest challenges small businesses face: managing cash flow.
With the launch of Instant Deposit, sellers can now click a button in the Square App to get their funds into their bank account in around 20 minutes. All they need to do is link their bank account to their Square account. Square offers competitive, flat fees of 1.75% fee when taking in-person payments, and 2.5% for payments made over the phone, online or via digital invoice. Sellers using Instant Deposit will be charged an additional 1%.
IT WOULD take 26 years to become a Zopa Innovative Finance ISA (IFISA) millionaire, the peer-to-peer lender has calculated.
Individuals would need to invest the full ISA allowance – which is £20,000 this tax year – into Zopa’s ISA Plus at today’s target return of 4.6 per cent to hit the million pound mark in 26 years.
This would result in an IFISA total of £1,009,509, with interest earned in that year of £44,395, Zopa said in a blog post on its website on Friday.
These peer-to-peer investments broad- ly fall into three sectors: Consumer, SME and Property Lending.
There are two ways to invest in an IFISA. Customers can either invest manually or defer to the platform’s auto- invest function and let this do the hard work. Notably the ‘big three’ lenders – RateSetter, Funding Circle and Zopa – purely offer auto-invest options.
Another peer-to-peer consumer lender with an IFISA on the market is Lending Works. Launched in February 2017 it offers an annual return of six per cent for five-year loans or 4.5 per cent for three-year loans. This is an auto-invest product with a minimum investment of £10.
Proplend are also offering peer-to-peer investment within an IFISA, secured against first charges on commercial property. Investors can expect returns of between five per cent and 12 per cent.
The CEO of Lloyds Bank told a conference in London on Thursday that his company is the biggest digital bank in the UK, eclipsing the wave of digital startups that have sprung up in the last few years.
António Horta Osório told the UK Treasury’s International Finance conference that Lloyds is “the largest digital bank in the UK, with a 22% share of new business.”
If the FCA does reform the home credit market, its past moves could indicate what’s in store for Provident’s door-to-door lending. The FCA’s caps on payday lenders lowered the average cost of a typical payday loan to 60 pounds from 100 pounds and slashed default rates by a third. Leading player Wonga Group Ltd. saw its sales plunge 64 percent in 2015.
A report from professional services and Big Four firm EY has shown that fintech businesses in the UK are embracing Open Banking, with 59% seeing the initiative as an opportunity to reconsider their collaborations.
The study, which surveyed more than 30 UK fintech businesses, found that more than 80% of businesses are getting ready for Open Banking, whilst 29% said that they are fully prepared for the initiative.
The study showed that businesses have started to prepare for the scheme by increasing the amount of staff they have working on Open Banking-related propositions, with 30% of businesses with 50 to 250 employees saying that they had teams of ten working on the changes.
Investors looking for a higher yield from property should consider this bond from LendInvest.
Nearly every recent issue over the last few years has been at a rate of between 4% and 6%, which is well above the rate on offer from the government (via gilts) and investment-grade corporate bonds.
The platform is focused on short term, bridging and development loans rather than buy-to-let loans. In total, its initial £50m fundraising has been invested in 89 different loans (implying an average of around £560,000 per loan), with an average loan-to-value (LTV) ratio of about 57% – so the average loan looks to be backing a project worth around £1m.
Of those 89 loans, nearly all are first charge, and at least 19 (of the 87 first-charge loans) have a LTV ratio of under 50%. That means that if there were a sharp property recession, a good proportion of the book should have plenty of equity in case of default. By contrast, 17 of the loans have a LTV of 70% or more, which might seem a slightly more worrying state of affairs in a downturn – you’d only have an equity buffer of around 25% to 30% at most. It’s also worth noting that 63% of the loans are in the Greater London area, which is arguably more vulnerable in a downturn.
The overall winner of the second annual Datathon, hosted by business advisory firm Deloitte, was ‘Data Nations’, a team of data experts who developed FinTastic; a digital tool to help people make better financial decisions at key moments in their life.
HKT and UnionPay International have launched a new Tap & Go UnionPay Prepaid Card for payments across mainland China.
The new card allows customers to instantaneously convert Hong Kong dollars into yuan using their Tap & Go mobile wallets when they are traveling in mainland China.
Customers can settle payments using their cards in mainland China as well as 168 countries and regions worldwide and for online transactions.
A recent report in ECNS indicates China wants to have a “dynamic approach” regarding Fintech or internet finance. The report was referencing a press conference following the 13th National People’s Congress that was held earlier this month that involved the Zhou Xiaochuan, Governor of the People’s Bank of China.
In many respects, China is the largest Fintech market in the world. It has the largest online lending (peer to peer lending) market by far and benefits from a population that is widely connected to the internet by mobile devices. A combination of demand from both consumers and businesses has fueled innovations in finance.
Which? received reports that in some cases thieves had entered other people’s names and addresses then intercepted the package. A few weeks later, the victims received a letter from Klarna chasing up the payment, warning the debt will impact their credit rating.
A spokesperson for Klarna said that it takes fraud seriously, and when this issue arose it immediately looked at ways to combat it. Klarna said that anyone affected by fraud should contact the company to dispute the order, and that this will in not affect a customer’s credit rating.
Europe has seen the first cohort of challenger banks (Atom Bank, Tandem Bank, Monzo, Starling Bank, Revolut, and N26) break out, collectively attracting $1B in funding and over 2.5M customers since 2014.
How challenger banks have leveraged regulation
Traditional approach: Atom Bank, Tandem Bank, and Starling Bank prioritized having a bank charter prior to launch and built a suite of services that required a charter, believing it would create a moat around the platform. Atom Bank, for example, launched a savings account and SMB lending after regulatory approval. They also plan to launch current accounts but that roll out has so far been delayed.
Semi-traditional bank: Monzo and Germany-based N26 wanted to get customers onto the platform. To do so, Monzo launched a prepaid card instead of a full account product.
Monzo was going through a period of rapid growth, adding a reported 60K users a month when the company was granted a charter. In December 2017, they stopped adding new customers and announced plans to focus on transitioning the 500K existing customers off of prepaid cards and onto Monzo’s own current accounts.
As of February 2018, the company has a waitlist for new current account registrations, which means it’s missing out on roughly 180K potential new customers (at the peak growth rate of 60K per month) as it focuses on transitioning its existing customers off of the prepaid cards.
Fast-lane approach: Revolut challenged the conventional go-to market strategy by applying for an easier-to-acquire e-money license and targeting currency exchange rather than current accounts. Revolut initially focused on frequent travelers, a niche they believed was underserved. It built a digital currency exchange app, which allowed people to exchange money more frequently across countries without establishing multiple bank accounts.
Award-winning Swiss fintech firm Loanboox is planning further expansion into Europe having obtained a foothold in Germany. The digital portal for matching institutions with investors plans a move into France and is also looking at other European markets.
Since its inception, Loanboox has now played a part in connecting around 1,000 clients and facilitating requests of some CHF9 billion ($9.5 billion) in public sector loan deals.
Millennial investors stand to inherit $30T of potential assets from baby boomers. To attract and retain this next-generation of investors, advisors need to offer sustainability, clean energy, and social impact investing strategies.
Source: CBInsights
Why now?
There are massive demographic shifts underway in wealth management. Millennials are now the largest generation in the workforce and 2x more likely than the average investor to make a sustainable investment.
Social issues like climate change and gun-control are top of mind for the next-generation, and 75% of millennial investors believe their investments can influence change, according to one survey conducted by Morgan Stanley.
Source: CB Insights
Further, impact investing is a growing part of the wealth management market. In 2016, it’s estimated that sustainable investment assets grew to $22.89T globally, up 25% from 2014 according to the Global Sustainable Investment Alliance (GSIA).
The Australian Treasurer, the Hon Scott Morrison MP, and UK Chancellor of the Exchequer, the Rt Hon Philip Hammond MP, signed an agreement in London on 22 March, 2018 to establish a FinTech bridge.
The UK-Australia FinTech Bridge will deepen collaboration between governments, regulators, and industry bodies in the two countries. It will also support improved access for Australian FinTech firms to the UK market.
The FinTech Bridge includes collaboration between Australian and UK governments to identify emerging FinTech trends and policy issues, enabling better policy positions.
While the citizens of Norway, Finland, and Denmark all have at least one bank account, there are developing countries like the Central African Republic, Niger, and Madagascar, where the percentage of the unbanked population rises well above 85%. The poverty rates in such places are quite high, and is part of a vicious circle, since the inability to get a loan or to make deposits keeps people living day to day. The only available financial resource is social borrowing from friends and family. Yet, rapid technological advancements could turn this situation around.
Micro-financial institutions (MFIs) have developed a particular product, the microcredit, as a way to grant individuals the necessary money to expand a small business or to cover some surging costs, like healthcare.
Yet, the current model for these products is far from efficient, with high operational fees which translate to interest rates around 35-40%. It has even been said that micro-loans promote poverty.
Financial technology companies have partnered with credit scoring companies to enable faster and more efficient lending. Online lending marketplaces Rubique and Bankbazaar said their partnerships with credit information companies Experian and CIBIL, respectively, to offer free credit reports to customers, made their lending more efficient.
The entire process is digitized to reduce the cost of operations and to bring speed and scale in the lending process”, said Rajiv Raj, Co-founder and director, CreditVidya.“CreditVidya is able to provide alternate data using technology we have not developed so far. We can use this data to further refine our existing credit scoring model,” said RBL Bank’s Toor.
Both Experian and CreditVidya said that alternate data is most beneficial for assesement of new – to-credit customers for whom centralized or structured data is not available.
Cerberus Capital Management, L.P. and its affiliates (“Cerberus”), a global leader in alternative investing, announced today that Roberto Nicastro has become a Senior Advisor to the firm. In this role, Mr. Nicastro will consult with Cerberus as it continues its focus on investment opportunities and strategic partnerships in the European financial services sector.
The battle between taxis and ride-sharing services might be old news already, but today, peer-to-peer lending platforms and other emerging tech-driven financial products are continuing to ruffle the feathers of our stalwart financial institutions.
Mumbai-based blockchain startup Nuo Bank has raised $250,000 (Rs 1.6 crore) from payment gateway firm PayU India’s chief executive officer Amrish Rau and managing director Jitendra Gupta, a top executive has told VCCircle.
Savings are stored on the blockchain and instead of interest on savings, customers gets a virtual share in the revenue of the bank. Nuo Bank will offer around 20% of its 1 billion tokens – Nuo Coins – to customers.
These contracts will stipulate that up to 25% of the bank’s revenue should be reserved for these tokens.
Even as mobile wallets companies are struggling to ensure that the customers comply with KYC norms in order to load money to their wallets, customers are able to circumvent the process with the use of digital gift cards.
For instance, customers can add money to their Amazon Pay wallet by purchasing gift cards of Amazon. The gift card offers a code that once added to the wallet loads the money.
Users of prepaid payment instruments (PPI) such as mobile wallets were asked to complete the KYC requirements by February 28 by the Reserve Bank of India (RBI). The regulation bars customers from loading money into their wallets if they haven’t complied with the KYC norms. It also restricts them from carrying out remittance-based transactions. They will also not be allowed to transfer the cash in the wallet to their bank accounts.
SmartOwner, India’s first and largest online marketplace for real estate investors, aims to make the process of investing in real estate a seamless and streamlined process. It was founded by Silicon Valley entrepreneurs having a considerable amount of experience in the technology and real-estate sectors. In fact, SmartOwner wants to make property investing as simple as investing in Mutual Funds and the Stock Market.
Long Blockchain Corp. (Nasdaq: LBCC) (the “Company” or “Long Blockchain”) today announced that it has closed on a strategic investment in TSLC Pte Ltd. (“TSLC”). TSLC is the parent company of CASHe, a provider of digital money and short-term financial products to young millennials across India.
In Brazil, the antitrust watchdog, Cade, is looking into the credit card industry, with an eye on possible anticompetitive practices.
The investigation comes, Reuters reports, after a complaint by Nubank, a Goldman Sachs-funded FinTech. The company offers credit cards and checking accounts to 3 million people in Brazil. Nubank also has approval in place to become a bank. Earlier this month, the company raised $150 million in a financing round that was led by DST Global Investment Partners. Last year, the company was granted a credit line of 455 million reais, or about $137.71 million.
News Comments Today’s main news: Prosper changes pricing. Revolut launches disposable virtual cards. OakNorth reports annual profit. Lufax delays IPO. eToro raises $100M for blockchain development. Today’s main analysis: Isas that pay up to 16%. Today’s thought-provoking articles: Is personal service getting lost in digital? What makes big data BIG? How quantum computing can change financial services. Can the blockchain prevent bank […]
Is personal service getting lost in the digital mindset? AT: “This is worth thinking about. While technology allows alternative lenders to do what they do affordably, efficiently, and at scale, it’s the personal touch that gives companies in this space an edge over big financial institutions.”
Earlier this week in anticipation of the Fed Rate hike, we discussed Prosper’s approach to portfolio pricing in a rising rate environment. Our goal with rate-setting is to deliver value for both sides of the Prosper platform by providing a fair price for borrowers and a reasonable return for investors.
In order to deliver on this objective, the borrower rates offered in our marketplace must react to rate changes in the economy at large. Today, the Federal Reserve announced a 25 basis point (bps) increase in the Fed Funds rate. In light of this development, the rates offered to borrowers through the Prosper platform are being modified.
Pricing Change Impact Simulation
The table below summarizes the simulated impact of the rate increase on the portfolio originated through the Prosper platform in March month-to-date (MTD) 2018. Overall borrower rates on the platform are increasing by 26 bps.
Profitability of digital-only businesses can be astounding because the model is so cost-efficient. Some just don’t want customers with “high maintenance” needs such as human customer support.
The best overall answer is to offer all options. Enable customers to interact solely in a digital way or with live support to guide through the process, answer questions and solve problems. Make it easy to use both, such as Amazon does. Online ordering is usually a breeze. But when a problem or concern arises, they have caring and competent live human beings to help.
Ways To Show That You’re Invested (Or Want To Be) In Human Caring
The paper argues that due to Big Data, “the innovation seen in systematic trading models over the past decade could accelerate” and (a closely related point) the “differences between what used to represent quantitative versus qualitative research” could disappear.
Not all Roses and Plush Toys, Though
The process by which the new data capabilities and principles get internalized by the swifter funds, those that want to be on the winning side of the arb plays, isn’t a painless one. There are “integration and cultural challenges” that have to be overcome. After all, the experts that an aspiring arbitrageur would hire come from “internet firms, gaming companies, the military” and consumer research. The world of asset management will be new to them, so everyone on the developing teams can “work effectively together.”
The explosive adoption of the digital channel is changing the nature of lending. Consumers are coming to expect the kind of convenience and speed that a digital experience can deliver, and lenders are increasingly looking to oblige. Although many of the consumer benefits of digital lending are clear, certain complications related to fraud arise when lending goes digital. This is a function of the degree of separation and anonymity in the digital lending process. Building on these factors, today’s fraudsters are relying on a diversified playbook of schemes and techniques to commit loan fraud in digital channels, including the use of synthetic identities, volumetric attacks, and technology designed to disguise their digital footprint. In this report, Javelin explores how these issues have come to unfold and the steps that lenders must take if they want to effectively resist this growing epidemic of digital lending fraud.
Key questions discussed in this report:
What effect has the use of digital channels had on the lending space?
How has fraud changed as a result of lending going digital?
What are the technology factors affecting the risk of lending fraud in digital channels?
What are the fraud risks specific to each type of loan product?
How are different segments of consumers affected by digital lending fraud?
What are the steps that FIs and other lenders can take to effectively prevent new account fraud?
A recent decision from a federal district court in Colorado, Colorado ex rel. Meade v. Avant, strikes another blow against many of the financial technology firms that are revolutionizing the way consumers and businesses access credit. Joining what is now a line of decisions, the court limited the valid-when-made doctrine, which provides that a loan that is valid when it is made does not become invalid (i.e., usurious) when it is sold or assigned to a third party.
A Colorado federal judge ruled Wednesday that the Federal Deposit Insurance Act doesn’t so completely preempt a state financial regulator’s claims against nonbank lender Marlette Funding LLC that they have to be heard in federal court.
U.S. District Judge Philip A. Brimmer remanded the case from Julie Ann Meade, the administrator of Colorado’s Uniform Consumer Credit Code, making it the second such “true lender” action to get kicked back to Denver state court this month.
In a joint annual report to Congress released Tuesday with the Federal Trade Commission about debt collection practices, the CFPB said it had initiated four enforcement actions last year, had resolved one case and has five others pending related to unlawful debt collection practices.
Acting CFPB Director Mick Mulvaney has indicated that debt collection will be a top priority for the agency. About 26% of consumers with a credit file have debt that is being collected by a third party, the CFPB said.
The CFPB recovered $577,000 in consumer relief from its enforcement actions while $78,800 was paid into the civil penalty fund, which is used to provide relief to eligible consumers who otherwise would not be compensated.
On March 14, Governor Jay Inslee of Washington signed the Washington Student Education Loan Bill of Rights. This law had been in the works since 2017 when a report, released by Attorney General Bob Ferguson in December, documented significant disparities across gender, income, age, and race in student loan borrowing and highlighted a handful of the hundreds of complaints the office received from student loan borrowers about their student loan servicers. Providing strong protections for Washington’s more than 730,000 student loan borrowers, whose debt now totals $22.9 billion, the law changes Washington’s regulatory schematic for lenders and servicers operating in the student loan marketplace in the following ways:
It creates the position of “Advocate” within the Washington Student Achievement Council to assist student education loan borrowers with student loans, akin to the position off “ombudsman” under proposed and enacted servicing bills in other states.
It requires servicers to obtain a license from the DFI.
Per this law, all student loan servicers, except those entirely exempt from the statute, are made newly subject to sundry statutory duties.
It imposes several requirements on third-parties providing student education and loan modification services.
It compels institutions of higher education to send borrower notices regarding financial aid.
It calls for the establishment, by rule, of fees sufficient to cover the costs of administering the program that it itself creates.
Lastly, the statute provides for a complete exemption for “any person doing business under, and as permitted by, any law of this state or of the United States relating to banks, savings banks, trust companies, savings and loan or building and loan associations, or credit unions.”
Upstate New York is a popular place for millennials to buy houses, according to a national survey by online lender Lending Tree. For home buyers 35 and under, Rochester ranks 16th among the nation’s 100 largest cities for home mortgage requests and offers from borrowers between Feb. 1, 2017, and Feb. 1, 2018.
LendingTree, an online lending exchange company, released a study listing the best and worst cities for a new small business, and Fresno ranked ninth for best cities to start a new small business.
Ranking at first is Sacramento.
To conduct the study, LendingTree used data from over 80,000 queries submitted by new small-business owners seeking loan offers through their small business loan marketplace to find out where businesses tend to perform the best.
The change will allow Credit.com users to get matched with personal loan offerings that can be pre-approved in real-time without leaving the site thanks to Even’s technology. Previously, users looking for personal loans on the site were referred to individual lender websites.
Roostify today announced the addition of Mark McLaughlin as the company’s Senior Vice President of Business Development. McLaughlin will be responsible for formulating the company’s overall partner strategy, creating a scalable operational model, and further developing an ecosystem of technology partners and strategic alliances.
Citigroup Inc added restrictions on firearms sales for new retail-sector clients, the Wall Street bank said on Thursday, the strongest move to date by a major U.S. lender following last month’s high school shooting in Florida.
In an emailed statement Citi said it will require those clients only sell firearms to customers who have passed a background check, restrict firearms sales for buyers under 21, and not sell so-called “bump stocks” or high-capacity magazines.
In an effort to stay one step ahead of the game at all times, digital banking app Revolut is set to launch disposable virtual cards next week to help users of its Premium service protect themselves against online card fraud.
Revolut users will be able to create disposable virtual cards for online purchases in seconds, with card details that automatically regenerate after each transaction. This will also protect users from inconveniences like chargebacks from sites on one-off purchases, as well as preventing fraudsters from tracking bank account information.
The virtual cards will work alongside existing Revolut security features, such as location-based transaction security, the familiar “freeze/unfreeze” physical card ability, as well as being able to disable swipe and contactless payments.
UK based digital bank OakNorth reported an annual profit of $149mn, becoming the first digital bank to do so; in their second year of full operations the bank has seen their loan book triple in size and deposits double in size; Rishi Khosla, OakNorth chief executive, told the Financial Times, “we build them for profit and on strong foundations so as you grow you’re scaling a real business rather than what happens to a lot of fintech where you just keep building for top-line or number of customers, but don’t necessarily have the strongest business model.”
See the table below to see what Ifisas are on the market, what industry they invest into, the minimum investment amount and what kind of returns you can expect.
Source: Which? News
Among the highest rates, FundingSecure offers up to 16% on investments from £25. However, as a peer-to-peer ‘pawnbroking platform’ borrowers are looking for urgent loans to be given within 24 hours, which are secured against their assets. Borrowers are not required to pass any credit checks. Ablrate offers variable rates up to 16%, but they’re set by the borrower and you have to decide if the return is worth the risk. Past funded loans include units for a film studio, a waste management company and a modular building company.
Where else can I find high interest rates? They may not offer 16% interest, but there are a number of current accounts that pay up to 5% – and they don’t come with the associated risks of a Ifisa.
Nationwide’s FlexDirect account offers 5% AER on balances up to £2,500 when you pay in at least £1,000 a month. This is only for the first 12 months, however.
The TSB Plus account offers 3% AER on funds up to £1,500 as long as £500 is paid in each month and you register for online and paperless banking. There’s also the opportunity to earn up to £10 cashback a month, for a limited time.
The Tesco Bank current account also offers 3% AER on balances up to £3,000. You need to pay in £750 a month and set up at least three direct debits.
From today, digital business bank Tide has been authorised by the Financial Conduct Authority (FCA) as an electronic money institution (EMI), which according to Bevis will give Tide “the option to access the same banking infrastructure as older banks”. Since the bank launched last January, 1 in 12 of all business accounts opened in the UK has been with Tide.
Now managing the accounts of over 30,000 businesses, Tide has today also launched a new vertical card and updated app design, and an integration with online accounting provider FreeAgent, which will automatically upload Tide transaction data into the software for easy expenses tracking.
Tide’s recent partnership with iwoca for business lending is also proving fruitful, with the fastest rate of service from first click to credit in the user’s account sitting at 6 minutes and 1 second.
Mark Tucker, chairman of HSBC, Britain’s largest bank, and Nigel Wilson, chief executive of Legal & General, the insurer, said that there was no room for complacency in Britain’s so-called fintech industry.
Philip Hammond, the chancellor, told an industry conference yesterday that the UK was the “global capital of fintech” and that the emerging industry contributes £7 billion to the economy.
One of China’s largest online lenders has shelved their IPO because of the regulatory crackdown on online lending; the FT reports that Lufax is waiting until the China Banking Regulatory Commission (CBRC) required online lenders to apply for a license; the current thinking is the government will approve licenses in April, though the time frame could be a bit longer; Lufax wants to ensure they get it right instead of rushing to be first.
Seventy-eight per cent of small businesses in Mainland China expect to grow in 2018 and 97.5 per cent of small business are confident that the local economy will remain the same or improve in the next 12 months. These are the best survey results for MainlandChina since 2014.
“The high rates of technology use among Mainland China’s small businesses is one of the key drivers of growth, with over 80 per cent of businesses in Mainland China earning more than 10 per cent of revenue from online sales — ranking MainlandChina at the top of the surveyed markets.
This referenced posted blog is a good question and likely the answer is ‘yes’, but also we need to wait and see how effective. Since PSD2 is a legal imperative, one key question posed by the author is whether or not end user companies (the client buying or using a particular financial services product) wishes to share actual bank or account data with the 3rd party vendors for which API-based sharing was designed to assist.
‘When it comes to new services around B2B and working capital, I believe like any good market hypotheses to test, we need to understand a basic question when it comes to corporates – will they provide third party vendors this access? I don’t know the answer to that question, but I do know it comes down to trust and value proposition. Certainly making sure vendors have the security around your bank data will be important in this age of constant hacking threats’.
Cerberus Capital Management, L.P. and its affiliates (“Cerberus”), a global leader in alternative investing, announced today that Roberto Nicastro has become a Senior Advisor to the firm. In this role, Mr. Nicastro will consult with Cerberus as it continues its focus on investment opportunities and strategic partnerships in the European financial services sector.
The raise is set to support eToro’s expansion as it heads into new markets, and continued research and development of blockchain technology and digital assets. The round brings the platform’s total capital raised to $162m, following a signficant period of growth for the business driven in part by its foray into cryptocurrency investments.
eToro added Stellar as its eighth cryptocurrency asset listed on its Crypto Copyfund in February, joining fellow cryptos Bitcoin, Bitcoin Cash, Litecoin, Ethereuem and Ripple amongst others. The trader launched its Crypto Copyfund in July 2017, which uses CFDs to enable investors to diversify across all available cryptocurrencies (weighted by market cap) with just one click.
Basically, a quantum computer doesn’t work with bits but with qubits using particles that can be in superposition (two or more quantum states added together to create another state). This is why particles can take on the value 0, or 1, or both simultaneously. The reason that this is important is that it will allow computers to process and store far more information with far less energy and far more speed than current state computers. For example, in 2016, a team of Google and Nasa scientists found a quantum computer was 100 million times faster than a conventional computer. Elsewhere, in a step towards quantum computing, researchers have guided electrons through semiconductors using incredibly short pulses of light. These extremely short, configurable pulses of light could lead to computers that operate 100,000 times faster than they do today.
This is important in banking because it could displace blockchain, ledger and digital identity developments within a decade. This is because the quantum internet would excel at sending information securely through what is known as quantum encryption. This technology enables banks and businesses to be able to send “unhackable” data over a quantum network. This is because quantum cryptography uses a mechanic called quantum key distribution (QKD), which means an encrypted message and its keys are sent separately. Tampering with such a message causes it to be automatically destroyed, with both the sender and the receiver notified of the situation.
It’s this hassle that Hnry (pronounced ‘Henry’) wants to help resolve, doing away with the need for spreadsheets, software and even costly accountants. Whether it’s income tax, GST, ACC or student loan repayments, Hnry will calculate and pay all of these for you. Same goes for your tax returns, which Hnry will complete on your behalf. It’ll also handle all your invoices, regardless of whether you work for a single client or multiple clients at the same time.
Source: the Spinoff
Jrny
Born from a desire to change how enterprise companies and individuals interact with one another, Jrny uses AI and conversational interfaces to create more relevant, two-way channels of communication. Jrny allows businesses to handle thousands of messages instantly in an effort to build a closer relationship between company and customer.
A massive fraud that cost India’s second-largest bank at least $2 billion is highlighting concerns about vulnerabilities in institutions’ internal controls and spurring some to claim that blockchain could have prevented the crime.
In a recent incident at Punjab National Bank, a deputy branch manager and his subordinate allegedly falsified 150 letters of undertaking directing other banks to give loans to a group of jewelry companies, with PNB providing surety for those letters. Virtually all of them defaulted, causing PNB to be on the hook.
What made the fraud so difficult to detect was that, as far as its internal systems were concerned, the transactions didn’t exist. The letters of undertaking were sent using the Swift network, but none were recorded on PNB’s internal record-keeping software, which wasn’t linked to the Swift system.
Source: American Banker
That’s why some are arguing that bockchain, or distributed ledger technology, could have prevented the fraud. Because immutable records are kept on a decentralized database that multiple parties can view, it’s possible that the fraud either wouldn’t have happened or could have been detected sooner.
In this virtual bank, your savings are stored in crypto format on a blockchain, and instead of interest on your savings, you get a virtual share in the revenue of the bank.
This is an unconventional concept developed by Mumbai-based entrepreneurs Varun Deshpande, Ratnesh Ray and Siddharth Verma, whose product Nuo Bank went live this week.
Naspers, the most valuable listed company in Africa, will be selling $10-billion of its shares of Chinese messaging giant Tencent to invest in fintech, classified and online food delivery businesses.
Naspers announced it will sell up to 190-million Tencent Holdings Limited shares, or 2% of Tencent’s total issued share capital. Naspers is reducing its stake in the maker of WeChat and QQ – which is worth an estimated $545-billion – from 33,2% to 31,2%.
On Tuesday, the Royal Bank of Canada (RBC) announced it has opened its very own API developer platform. According to the bank, the RBC Developers platform will allow eligible external software developers, industry “innovators,” and clients to access select RBC APIs. While sharing more details about the platform, Sumit Oberai, Senior Vice President of Digital Technology at RBC, stated: “Across other industries we’ve seen the transformational effects of APIs. By providing external developers, industry innovators, and clients with access to select RBC APIs, we have the opportunity to increase connectivity, create new tools and experience for clients, and enable open and innovative collaboration to improve the future of banking.”
