- Today’s main news: Funding Circle US launches Small Business Choice. LendingPoint closes $175.6M direct-to-consumer securitization. Chinese P2P lenders have 2 years to change business model. Klarna starts new merchant partnership every 8 minutes.
- Today’s main analysis: Cities where millennials have the highest credit card balances.
- Today’s thought-provoking articles: Schwab to acquire TD Ameritrade, new bank tech stack. Zopa running out of time on bank bid. Flender makes big mark in Irish SME lending market. State of SMEs in MENA.
- Funding Circle launches Small Business Choice. The underwriting is done first, then three loan options are offered. Interesting twist to the marketplace lending model.
- LendingPoint closes $175.6 million securitization, inaugurates $61.7 million point-of-sale loan securitization. Congratulations!
- Cities where millennials have the highest credit card balances. An interesting analysis from Experian. A great chart with the highest credit card balances among millennials in cities for each state. A lot of useful data.
- Schwab may acquire TD Ameritrade, more on the new bank tech stack. From PeerIQ.
- Interview with Max Levchin.
- Entera raises $7.5 million.
- Interview with the founder of the first digital bank, First Internet Bank.
- Wolters Kluwer launches consumer lending online applications for community banks, credit unions.
- Why small businesses need a Madden fix.
- MoneyLion names new chief operating officer.
- Supreme Court to hear CFPB constitutionality case in March.
- Zopa is running out of time on bank bid.
- It’s crunch time for Zopa.
- Marketplace lending to top 6 billion GBP this year.
- Wonga’s 400,000 mis-sold loans legacy.
- Royal Bank of Scotland to launch digital bank.
- LendInvest on building a great product.
- LendInvest promotes Andy Virgo.
- Finastra hires chief data officer.
- Flender makes big mark on Irish SME lending market.
- $110 million EIF commitment for SME funding.
- Half of European P2P investors have more than 25% of portfolio in P2P loans.
- Irish consumers don’t trust challenger banks.
- Investor confidence in P2P lending grows.
- Citadel Bank to invest in consumer loans with Fellow Finance.
- P2P lenders have two years to change business model. It looks like China is going to nix the P2P lending industry, after all.
- China bids farewell to P2P lending.
- Ping An to fold Lufax into consumer finance arm.
- Lufax prepares for life after P2P lending.
- International: Klarna partners with new merchant every 8 minutes.
- Dubai: Beehive publishes report on state of SMEs in MENA.
- Australia: 50% of Aussies have never heard of neobanks or digital-only banks.
- International: OakNorth, N26 received the most funding of all U.S., European digital banks.
- Indonesia: Amartha raises Series B funding.
- International: Dubai, Luxembourg sing fintech deal.
- United States
- Funding Circle US Launches Small Business Choice, Providing Interest Rate and Loan Term Options to Small Business Owners (BusinessWire), Rated: AAA
- LendingPoint Closes $ 175.6 Million Direct-to-Consumer Loan Securitization and Inaugural, $ 61.7 Million Point-of-Sale Loan Securitization (BusinessWire), Rated: AAA
- Cities Where Millennials Carry the Highest Credit Card Balances (Experian), Rated: AAA
- Schwab is the 800 lb Gorilla Now; Future of FinTech; Madden Fix (PeerIQ), Rated: AAA
- Full interview with Max Levchin, co-founder of Paypal (CNBC), Rated: A
- Entera Raises $ 7.5M in Funding (FinSMEs), Rated: A
- An internet banking pioneer’s view from the catbird seat (American Banker), Rated: A
- Wolters Kluwer Launches Consumer Lending Online Applications Offering for Community Banks, Credit Unions (BusinessWire), Rated: A
- Why small businesses need regulators’ proposed ‘Madden’ fix (American Banker), Rated: A
- MoneyLion : Names Samantha Roady Chief Operating Officer (MarketScreener), Rated: B
- Supreme Court to hear CFPB constitutionality case in March (American Banker), Rated: B
- United Kingdom
- Zopa is running out of time in bid to become bank (Evening Standard), Rated: AAA
- Zopa nears crunch time as investor woes worsen (Financial News), Rated: A
- Marketplace lending expected to top £6bn this year, says report (AltFi), Rated: A
- Wonga‘s legacy of nearly 400,000 mis-sold loans (Wellston Journal), Rated: A
- Britain’s RBS launches digital bank Bó to take on start-ups (Reuters), Rated: A
- Funding and technology: the foundations of building a great product (Mortgage Introducer), Rated: A
- LendInvest Promotes Andy Virgo to Key Role (Crowdfund Insider), Rated: B
- Lisa Fiondella Joins Finastra as Chief Data Officer (Markets Insider), Rated: B
- P2P: China’s once-booming lending industry must close within two years, government notice says (SCMP), Rated: AAA
- China Bids Farewell to P2P Lending (Finews.Asia), Rated: A
- Ping An to fold P2P lender Lufax into new consumer finance arm (Technode), Rated: AAA
- Lufax Prepares for Life After P2P Lending (Caixin), Rated: A
- European Union
- Flender Makes BIG Mark in Ireland’s SME Lending Market (deBanked), Rated: AAA
- Alternative Lending Marketplace October Reveals New $ 110 Million Commitment from European Investment Fund and Others to Finance European SMEs (Crowdfund Insider), Rated: A
- Half of European P2P investors have more than 25pc of portfolio in P2P loans (P2P Finance News), Rated: A
- Irish Consumers Still Don’t Trust New Technology, Including Digital Challenger Banks (Crowdfund Insider), Rated: A
- Investor confidence in P2P lending is growing in Europe (Wealth Adviser), Rated: A
- Citadele Bank to invest in consumer loans through Fellow Finance P2P platform (Finextra), Rated: B
- Klarna partners with a new merchant every 8 minutes in 2019 (PR Newswire), Rated: AAA
- OakNorth and N26 Have Received the Most Funding Out of All US and European Digital Banks (Crowdfund Insider), Rated: A
- Regulators in Dubai and Luxembourg sign fintech pact (Finextra), Rated: B
- Almost 50% of Australians Have Not Heard of Neobanks or Digital-Only Banks (Crowdfund Insider), Rated: AAA
- Indonesian P2P lender Amartha bags series B money from Line, others (Tech in Asia), Rated: AAA
- Dubai-based Fintech, Beehive, Releases State of the SME Ecosystem Report (PR Newswire), Rated: AAA
Funding Circle US today announced Small Business Choice. The newest feature of the Funding Circle US loan platform provides borrowers with three fully approved loan options with different terms and rates to give small business owners the flexibility to find the loan that best fits their needs.
Under Small Business Choice:
- Loan options are suggested after being completely underwritten by Funding Circle. Borrowers are fully approved for all three options.
- In line with Funding Circle’s global commitment to transparency, offers are presented in a straightforward way over the phone and in emails that directly outline the total loan amount, term, rate and monthly payment.
- The feature applies to all small business owner applicants, including existing borrowers, at Funding Circle US.
Data and technology platform LendingPoint today announced that it has closed two additional securitizations of loans originated on the LendingPoint platform: LendingPoint Receivables Trust 2019-2 (“LDPT 2019-2”) issued $175.65 million of KBRA-rated notes backed by a pool of direct-to-consumer loans and LP LMS 2019-1 Asset Securitization Trust (“LPMS 2019-1”) issued $61.7 million of unrated notes backed by a pool of point-of-sale loans. Guggenheim Securities was sole structuring advisor and sole manager of both transactions.
Cities Where Millennials Carry the Highest Credit Card Balances (Experian), Rated: AAA
Millennials accounted for about 20% of all credit card debt in Q2 2019, an increase of 2 percentage points year over year. Their generation was the only one to see a marked increase in overall credit card balances in Q2 2019. Since 2015, millennials have seen their average FICO Scores* increase 17 points and their average credit card balance increase by $1,390.
Cities With Highest Millennial Credit Card Balances in Each State
Schwab is the 800 lb Gorilla Now; Future of FinTech; Madden Fix (PeerIQ), Rated: AAA
Charles Schwab Corp. is in negotiation to acquire TD Ameritrade. The deal would combine two of the largest online brokerages with strong banking capabilities. Shares of both companies were up significantly in the news.
Full interview with Max Levchin, co-founder of Paypal (CNBC), Rated: A
PeerStreet Continues Rapid Growth With New Milestone: $ 3 Billion in Loan Transactions (BusinessWire), Rated: A
PeerStreet, a platform for investing in real estate backed loans, today announced that as of last month, more than $3 billion in loans have been transacted through the PeerStreet marketplace. This milestone comes on the heels of the company announcing the close of its $60 million Series C funding round coupled with $4.25 billion in new capital commitments.
Entera Raises $ 7.5M in Funding (FinSMEs), Rated: A
Entera, a San Francisco, New York and Houston-based real estate technology platform that enables investors to access, make data driven decisions and purchase residential real estate, raised $7.5m in funding.
Wolters Kluwer’s Compliance Solutions business has launched Online Applications for Consumer Lending (CLA), a digital offering that enhances the online loan origination capabilities of U.S. community banks and credit unions. CLA allows consumers to begin a loan application from any digital device, at any time. It integrates seamlessly with Wolters Kluwer’s ComplianceOne solution, an industry-leading loan documentation and processing system that helps lenders optimize their lending and document preparation processes in a secure, fast and cost-effective manner.
Why small businesses need regulators’ proposed ‘Madden’ fix (American Banker), Rated: A
Just recently, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. proposed an important clarification to the “valid when made” doctrine, which provides that if a loan’s interest rate is valid in the state of origination, that loan continues to be valid when transferred to a party in another state. That long-standing doctrine was overturned by the so-called Madden case in 2015.
MoneyLion : Names Samantha Roady Chief Operating Officer (MarketScreener), Rated: B
MoneyLion, the digital bank and financial membership platform, today announced the appointment of fintech and global finance industry veteran Samantha Roady as Chief Operating Officer, a new position within the company. She has served as a MoneyLion board member since September 2016.
Zopa is running out of time in bid to become bank (Evening Standard), Rated: AAA
PEER-to-peer lending giant Zopa faces a race against time to raise up to £150 million and satisfy regulators it is financially strong enough to become a bank.
Zopa rival Funding Circle has seen its shares crash from 400p a year ago to 99p today.
Zopa nears crunch time as investor woes worsen (Financial News), Rated: A
One of the UK’s best-known and oldest fintech companies is running up against a tight deadline to secure funding needed to maintain its banking licence, as a major investor is sidetracked by a funding crunch of its own.
Marketplace lending expected to top £6bn this year, says report (AltFi), Rated: A
Marketplace lending is expected to top £6bn this year but lenders will face a significant test of their risk management procedures, loan servicing and recovery practices should the economy worsen, a new report warns.
The report says that gross marketplace lending is likely to grow 16 percent from £5.3bn to £6.2bn from 2018 to 2019.
Wonga‘s legacy of nearly 400,000 mis-sold loans (Wellston Journal), Rated: A
Administrators for the lender, which collapsed in August 2018, have revealed that 389,621 eligible claims have been made since Wonga‘s demise.
So far, the compensation bill is £460m, with the average claim £1,181.
The administrators said they had received 560,982 claims by the end of August.
Britain’s RBS launches digital bank Bó to take on start-ups (Reuters), Rated: A
Royal Bank of Scotland has launched its standalone digital bank Bó in a plan to fend off competition from fast-growing online start-ups including Monzo and Starling.
Funding and technology: the foundations of building a great product (Mortgage Introducer), Rated: A
Disrupting the traditional mortgage process has always been our goal at LendInvest.
From the way you apply for a loan, to case management to how that loan is funded, we believe the experience can be better at every stage of that journey.
LendInvest Promotes Andy Virgo to Key Role (Crowdfund Insider), Rated: B
LendInvest, the Fintech marketplace for property finance, has promoted Andy Virgo from Business Development Manager to Head of Key Accounts for LendInvest.
Lisa Fiondella Joins Finastra as Chief Data Officer (Markets Insider), Rated: B
Finastra has hired Lisa Fiondella as Chief Data Officer to lead its comprehensive data strategy, including how data collected through the FusionFabric.cloud platform and various cloud-based solutions, can be best utilized. She will be responsible for developing a data product roadmap and manage the process of bringing new data products to market.
All existing peer-to-peer lending platforms in China must become small loan providers within two years, a notice seen by Reuters on Wednesday showed, the latest official edict aimed at curbing the once-booming industry.
- Only 427 existing peer-to-peer (P2P) firms were still operating by the end of October, down from 6,000 at their 2015 peak
China Bids Farewell to P2P Lending (Finews.Asia), Rated: A
In order to transition, firms must meet a minimum capital requirement of 50 million yuan ($7.1 million) to become a small regional lender and 1 billion yuan ($142 million) to become a small national lender.
Ping An to fold P2P lender Lufax into new consumer finance arm (Technode), Rated: AAA
Ping An Insurance has received approval from regulators to set up a consumer finance arm, a representative from its peer-to-peer (P2P) loan affiliate Lufax confirmed on Friday, in a move that is reportedly the beginning of its transition away from P2P lending amid increasingly stringent regulations.
Lufax Prepares for Life After P2P Lending (Caixin), Rated: A
Flender Makes BIG Mark in Ireland’s SME Lending Market (deBanked), Rated: AAA
The following month Flender would reveal remarkable news, a new €75 million funding line, bringing their total to €109 million raised since the company’s founding in 2015. The company is backed by Eiffel Investment Group, Enterprise Ireland, entrepreneur Mark Roden and former Ireland rugby player Jamie Heaslip.
Meawnwhile, CEO Kristjan Koik told the Irish Times that the top 3 banks in Ireland have 92 percent of the SME lending marketshare so there is still a ton of opportunity for non-banks like Flender to grab hold of.
A new €100 million (appr. $110 million) agreement was finalized by the EIF, CNP Assurances, Bpifrance, Zencap, and various other entities in order to fund European SMEs via marketplace lending platform October. These companies are part of the recent institutional fund launched last year.
MORE than half (52.3 per cent) of European peer-to-peer investors surveyed by Robo.cash have more than a quarter of their portfolio in P2P loans.
Three quarters, or 75%, of Ireland’s consumers, are only using a “high street” bank, which makes the country the most traditional in Europe.
Only around 10%, or one in ten, Irish consumers are banking only with a challenger bank. Around 11% of Millennials and 12% of Gen Z consumers in Ireland are using (only) challenger banks, the report revealed.
When looking five years ahead:
- 17% of Ireland’s consumers are expected to bank solely with a challenger bank (up from around 14% in 2019).
- 35% of Ireland’s citizens will be banking with some combination of challenger and traditional financial institutions (up from about 21% in 2019).
- 48% will be banking solely with a legacy bank (down significantly from 68% in 2019).
This, according to Fujitsu’s latest “From Demanding to Discerning: Tech and the New Banking Customer” report.
Investor confidence in P2P lending is growing in Europe (Wealth Adviser), Rated: A
According to a new survey by Robo.cash, 64.9 per cent of the European P2P investors have full confidence in P2P lending. Remarkably, 52.3 per cent of respondents mentioned that P2P loans take a considerable share of their investment portfolio – over 25 per cent.
Citadele Bank to invest in consumer loans through Fellow Finance P2P platform (Finextra), Rated: B
Citadele Bank is launching a partnership with Europe’s most advanced lending platform, Fellow Finance, which brings together individuals, businesses and investors.
Klarna partners with a new merchant every 8 minutes in 2019 (PR Newswire), Rated: AAA
During 2019, Klarna has once again seen stellar growth with 60,000 new merchants globally including River Island, Boohoo, Made.com, Michael Kors, Expedia, H&M, Abercrombie & Fitch, Timberland, Marchesa, Agent Provocateur, Rue 21, TOMS, WayFair, Microsoft, and Shein. Now over 190,00 merchants partner with Klarna.
– Consumer growth and preference builds, adding 16 million new consumers globally.
According to Crunchbase data, OakNorth ($1 billion) and N26 ($670 million) have received the most funding out of all other major US and European neobanks.
Regulators in Dubai and Luxembourg sign fintech pact (Finextra), Rated: B
The Dubai Financial Services Authority (DFSA) and the Commission de Surveillance du Secteur Financier (CSSF) Luxembourg, entered into an agreement to cooperate in the development of FinTech.
The number of users that may consider changing their primary banking institution during the coming six-month period is currently 12% or 2.5 million Australian residents, which is reportedly 9% greater than the previous year.
The Nielsen surveys revealed that around 50% of Australia’s consumers noted that they had not heard of a neobank. Only a third, or about 33%, of the nation’s consumers said they’d be willing to use a neobank as one of their financial services providers, even after the benefits of using digital-only banks were explained to them.
A quarter, or 25%, of consumers who became aware of neobanks stated they would most likely use them as one of their primary financial services providers.
Indonesian P2P lender Amartha bags series B money from Line, others (Tech in Asia), Rated: AAA
Indonesian peer-to-peer lending startup Amartha has raised an undisclosed amount of series B funding in a round led by Line Ventures, the venture capital arm of global messaging app Line.
Dubai-based Fintech, Beehive, Releases State of the SME Ecosystem Report (PR Newswire), Rated: AAA
Key findings from the report include:
- Surveyed MENA SMEs have more women in senior positions than the global average.
- 28% of respondents see innovation as a priority for growth, yet only 2% of business owners are currently trying to access finance to fund it.
- SMEs offer young people a great opportunity for development. 48% of SMEs would hire someone under 25 with no experience.
See the full report here.