Thursday December 6 2018, Daily News Digest

Consumer Spending

News Comments Today’s main news: Zopa gets banking license. SoFi cuts mortgage business jobs. KBRA assigns preliminary ratings to CLUB Credit Trust 2018-P3. Money360 surpasses $1B in loan originations and closings. SoftBank is biggest startup story in 2018. Today’s main analysis: Rate hikes pause in 2019. LendingTree Debt Report November 2019. Today’s thought-provoking articles: LendingTree Debt Report November 2019. October was biggest […]

Consumer Spending

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United States

SoFi Cutting Jobs in Their Mortgage Business (Lend Academy), Rated: AAA

Late Friday Bloomberg reported that SoFi was cutting 7% of its staff, or around 100 jobs, in the company’s mortgage department. This is due to a change in strategy as to how they underwrite mortgage loans. Rather than underwrite loans themselves, as they have done since launching their mortgage business back in 2014, they will outsource the underwriting to a partner.

KBRA Assigns Preliminary Ratings to Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (AP News), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by Consumer Loan Underlying Bond (CLUB) Credit Trust 2018-P3 (“CLUB 2018-P3”). This is a $272.40 million consumer loan ABS transaction that is expected to close December 13, 2018.

The transaction has initial credit enhancement levels of 30.87%, 22.80% and 9.70% for the Class A, Class B, and Class C notes, respectively. Credit enhancement is comprised of overcollateralization, subordination of the junior note classes, a cash reserve account and excess spread.

This transaction is LendingClub Corporation’s eighth rated sponsored securitization, fourth of 2018 and the fifth sponsored securitization consisting of prime unsecured consumer loans facilitated by LendingClub’s proprietary technology platform supporting an online marketplace that connects borrowers and investors by offering a variety of loan products originated by issuing banks through the platform, www.lendingclub.com.

Money360 Milestone: Surpasses $ 1 billion in Loans Originated & Closed (Crowdfund Insider), Rated: AAA

Real estate marketplace lender Money360 announced on Monday it has surpassed $1 billion in loans originated and closed since inception. The announcement comes just 11 months after the lending platform revealed it had hit $500 million.

Rate Hikes Pause in 2019; Performance of Credit Card Borrowers with Personal Loans (PeerIQ), Rated: AAA

US Q3 GDP showed 3.5% annualized growth, well above potential growth of 2%. Growth slowed from the blistering 4.2% pace in Q2 due to rising inventories and lower consumer spending:

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

LendingTree Debt Report November 2018 (LendingTree), Rated: AAA

Nine months into 2018, Americans had a cumulative $3.93 trillion in non-mortgage debt. About a quarter of that debt is credit cards and other revolving debt, while the remainder is for car payments, student loans and other fixed-rate loans such as personal loans.

In just five years, Americans will have increased their debt by $1 trillion. Consumer debt eclipsed the $3 trillion mark in 2013. By comparison, the previous $1 trillion milestone — from $2 trillion to $3 trillion of consumer debt — took more than 10 years.

43.5% of Purchase Borrowers Received Mortgage Rates Under 5% Last Week (LendingTree), Rated: A

For the week ending Dec. 2, 2018, the share of borrowers with rates under 5% was the highest in two months, which may lend some support to a weakening housing market.

Source: LendingTree
Source: LendingTree

LendingTree’s State Migration Study Finds Americans Are Moving South (GuruFocus), Rated: A

LendingTree today released its State Migration Study on where Americans are interested in moving. The study looked at where people moving out of state are going and discovered that of the 12.1 percent of homebuyers across the country who change states, most plan to head south.

Florida is the No. 1 destination. Florida was the top new destination for 15 of the 50 states.

Texas residents love the Lone Star State. Texas had the highest percentage of residents looking to move within state lines — 93.4 percent of purchase mortgage requests from individuals in Texas were for properties in the same state.

Source: LendingTree

October was Biggest Month for Reg CF Since May 2016 (Crowdfund Insider), Rated: AAA

October was a big month for Reg CF campaigns, according to the StartEngine Index. In fact, October booked the most money raised using the crowdfunding exemption since the rule became actionable in May of 2016.

According to StartEngine, $10.9 million in funding was raised. Until October came along, this past July held the top spot at $10.7 million. The Index indicates that Reg CF has now raised $151.7 million since inception. The Food & Beverage industry remains the most popular sector to use Reg CF followed by Tech.

Source: Crowdfund Insider

Fintechs’ Take On Installment Payments Explodes Online (Forbes), Rated: AAA

Installment payments have been around for seemingly forever but a new crop of fintechs are offering it with a twist: the ability to pay off smaller purchases in installment payments that in many cases are interest-free.

And it appears to be resonating with scores of U.S. consumers judging from the brisk business installment payment services like QuadPay.com enjoyed during the kick off to holiday shopping season this past Thanksgiving weekend. David Sykes, chief operating officer at QuadPay.com said 35% of online Black Friday sales for one large merchant customer came via QuadPay. On average Sykes said its service accounts for around 20% of all the online transaction from its roughly 500 e-commerce partners.

QuadPay.com makes money via the merchant, getting a cut of the sales generated by its service. That enables it to offer interest-free loans to consumers wanting to purchase everything from Uggs to underwear. Sykes said the average value of the orders on the platform is $150. QuadPay takes 25% of that on day one and then spreads out the remaining payments every two weeks. Because the average installment payment is around $37 there isn’t too much risk of customers defaulting on the loan.  To prevent default it won’t let a customer use the service again if they were ever late with a payment. The executive noted QuadPay approves 92% of all applicants.

How the largest US financial institutions rank on offering the mobile banking features customers value most (Business Insider), Rated: A

In Business Insider Intelligence’s second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank’s mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

Source: Business Insider

Why Wealthfront is offering free financial planning (Financial Planning), Rated: A

Wealthfront is offering its planning services for free, effectively unbundling its software, and giving millions of Americans access to a financial roadmap.

The second largest independent robo is betting the firm can steer users into fee-based accounts after they interact with its software to come up with a financial plan. The freemium software uses the firm’s automated advice engine, Path, according to the firm.

Credit Karma’s Kenneth Lin on building a billion dollar brand (Tearsheet), Rated: A

Building a great service is hard but not impossible. But building a great service and making it available for free — that’s really hard.

Credit Karma seems to have figured out a way to do both. The company, with 85 million members in the U.S. and Canada, continues to roll out free, innovative financial products to its user base. It all began 11 years ago with a simple premise: to provide users with free access to their credit scores. From there, the company has rolled out a bunch of new products, including ID monitoring, tax preparation, a financial chatbot, auto finance, and unclaimed money.

Betterment launches tool to optimize cash savings (Tearsheet), Rated: A

Automated investment advisor, Betterment is rolling out “Two-Way Sweep”, a tool that can automatically “sweep” excess money from customers’ bank accounts into a Betterment account optimized to provide better returns for cash.

What’s behind this new product: Studies show that only one in three millennials is investing in the stock market. That means they’re holding a high percentage of cash. In fact, Betterment sees 30 percent of customers with cash balances of $20,000 on average. This excess in savings earns little to no interest. Betterment’s Two-Way Sweep is intended to take the hesitation out of deploying more money into investments by automating the process.

CommonBond Acquires NextGenVest to Help Reach Generation Z (Lend Academy), Rated: A

CommonBond, best known as a leading provider of online student loans, has made its second acquisition, NextGenVest, an artificial intelligence powered advice platform for Generation Z. NextGenVest helps high school and college students in New York, Chicago and Philadelphia with their college financial needs through a combination of human “money mentors” and AI-powered suggestions delivered entirely through text messages.

OppLoans Named a Best Workplace by Glassdoor for the Second Year in a Row (GlobeNewswire), Rated: A

Chicago-based fintech firm OppLoans has been honored with a Glassdoor Employees’ Choice Award, recognizing the best places to work in 2019. This marks the second year in a row that the personal lender has been named to this prestigious list in the Small & Medium Business category. The Employees’ Choice Awards program, now in its 11th year, is based solely on the input of employees, who elect to provide feedback on their jobs, work environments and companies on Glassdoor, one of the world’s largest job and recruiting sites.

Backstage Capital-Backed CapWay Moves to Atlanta As It Expands Its Digital Banking Offerings (Hypepotamus), Rated: A

According to 2017 statistics from the FDIC, 16 percent of households in Mississippi are unbanked, choosing instead to use “predatory services” like corner store check cashing in their neighborhoods.

Allen founded her first startup, an app development shop, while still in college. After moving to Silicon Valley, Allen realized it wasn’t just rural communities that were underserved by banks. Inner city areas across the country, most of which are home to majority Hispanic and African-American populations, are also affected. An FDIC survey found that more than 15 million adults in the U.S. go unbanked.

In 2016, Allen founded CapWay with co-founder and fellow Mississippian Timothy Lampkin. The mobile-first platform is aimed at younger generations (think older millennials and Gen Z) in those unbanked communities to help them break out of the predatory economy cycle.

Finicity Announces Partnership with Princeton Mortgage for Effortless Digital Mortgage Origination (Benzinga), Rated: B

Finicity, a provider of real-time financial data aggregation and insights, announced today it is working with mortgage banker Princeton Mortgage to automate borrower asset verification for lenders. The agreement will provide Princeton Mortgage loan officers and borrowers with a faster, simpler loan origination experience that reduces both paper chase and headache.

NBKC Bank fintech accelerator participant wins $ 1M (Biz Journals), Rated: B

Onward Financial Inc., a member of the first cohort in NBKC Bank’s Fountain City Fintech accelerator program, won a $1 million award from the Communities Thrive Challenge, which is put on by The Rockefeller Foundation and the Chan Zuckerberg Initiative.

United Kingdom

P2P Lender Zopa Granted a Banking License in the UK (LendIt Fintech), Rated: AAA

Back in 2005 Zopa quietly launched their P2P lending platform in the UK, the world’s first. It was the start of a lending revolution that has moved on to all corners of the globe. Today, a new chapter begins as the company announced that regulators have approved Zopa’s banking license. With that Zopa achieves another first: becoming the world’s first combined peer to peer lending platform and digital bank.

Zopa Says it Will Redefine Banking (Crowdfund Insider), Rated: AAA

Zopa explained that this is called the “mobilisation’ phase” as regulators put some restrictions in place. A full licence will be granted once it meets the conditions set by the regulators.

Zopa said it will begin its new service next year. The digital bank will include options such as a fixed term savings product protected by the Financial Services Compensation Scheme (FSCS), credit card and a money management app.

Pointing to a statement by the FCA that just “40% of UK adults have confidence in the financial services industry,” Zopa sees opportunity in becoming a digital bank unencumbered by green-screen legacy tech and unnecessary brick and mortar branches.

Zopa explained it would redefine banking with the following services:

  • Giving customers a fair deal as standard – with no catches like sign-up offers that aren’t available to existing customers or hidden fees and charges.
  • Making sure money management is simple and a real person is available to discuss
  • Going beyond ‘good enough’

Zopa: Bank launch won’t impact P2P rates (P2P Finance News), Rated: A

ZOPA has insisted its peer-to-peer lending rates will not be dictated by the savings products on offer when its bank launched.

It currently offers target returns of 4.5 per cent on its Zopa Core product and 5.2 per cent on Zopa Plus.

Thomas Cook to slip out of FTSE 250 index in quarterly review (The Guardian), Rated: A

Other companies expected to be promoted to the FTSE 250 are peer-to-peer lending platform Funding Circle, the retirement housebuilder McCarthy & Stone and the investment trusts Smithson and Woodford Patient Capital.

Funding the future of the UK PLC (Business Leader), Rated: A

Looking at 2017, we saw some encouraging trends and one of them is in terms of diversity and choice. We saw peer-to-peer lending grow at over 50%. It’s obviously coming from a smaller base as it’s a reasonably new form of lending, but 50% growth is a very strong outcome.

Tandem’s Journey Card strives to better users’ credit scores (Alt Fi), Rated: A

Tandem Bank has announced its Journey Card has assisted nearly three-quarters (72 per cent) of its users to first-time credit or is helping individuals with poor credit history get back on track.

Due to the higher risk users it targets, the credit card carries a reasonably expensive representative APR of 24.9 per cent.

Tandem says it hopes to help the 43 per cent of Journey Card holders who have poor credit history, some of whom have defaulted with other providers.

CrowdProperty Provides Performance Metrics Disclosing Lending Returns Using Brismo Methodolgy (Crowfund Insider), Rated: A

Peer to peer property lender CrowdProperty is now disclosing their performance metrics using Brismo’s (formerly known as AltFi) standardized reporting methodology. CrowdPropert states that it is the first property development platform to incorporate the Brismo process which is described as an independent standard.

UK housebuilders back new online property listing start-up (Financial Times), Rated: A

Some of the UK’s largest housebuilders are backing a new property portal that will launch next year in the latest attempt to challenge the two dominant market leaders, Rightmove and Zoopla.

Barratt Developments, Bovis, Persimmon and Redrow have signed up to list their homes with the start-up Rummage4Property, as have Countrywide and about 30 other estate agency groups.

ARBUTHNOT BACKS MBI TEAM WITH £2 MILLION FACILITY (Arbuthnot Latham), Rated: A

Arbuthnot Commercial Asset Based Lending (ABL) has supported a highly experienced Management Buy In (MBI) team, led by Paul Hampton, with a £2m invoice discounting facility to support Premier House Investment’s acquisition of Ralph Coleman International Ltd (RCI) and provide ongoing working capital, paving the way for the company’s exciting expansion plans.

KAMBO expands its reach with two native apps (Life Pulse Health), Rated: A

KAMBO is expanding beyond desktops to become accessible on our most coveted devices, our smartphones. With the introduction of two native apps, KAMBO’s lending platform will become one of the most flexible and diverse of its kind.

The KAMBO app is now available on iOS and Android, making it the first crypto-lending platform to have an app in the App store.

LendInvest Joins Ingard’s Buy to Let Panel (Crowdfund Insider), Rated: B

Ingard, a compliance network, brokerage, and lending packager specialist, announced on Tuesday online lending platform LendInvest has joined its buy to let panel. According to Ingard, members may now access the lender’s buy to let range direct by registering through LendInvest’s online portal

China

Ping An GammaLab Wins Global AI Machine Reading Comprehension Competition (Markets Insider), Rated: AAA

Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”) is pleased to announce that OneConnect, a subsidiary of the Group, ranked first in one of the world’s most authoritative machine-reading comprehension challenges — the Stanford Question Answering Dataset 2.0 (SQuAD). GammaLab Institute of Artificial Intelligence (GammaLab), owned by OneConnect, scored 83.435, close to the human performance level of 86.831, way ahead of other companies in the challenge.

Another scenario is internet arbitration in universal financial inclusion. Small loan companies tend to turn to online arbitration, which is expensive and takes time to resolve, under the current peer-to-peer lending market. With the reading comprehension skill of GammaLab, the arbitrator will finish a case quicker, reducing the cost for arbitration.

International

International P2P Lending Volumes November 2018 (P2P Banking), Rated: AAA

Mintosleads ahead of Zopa and Ratesetter. The total volume for the reported marketplaces in the table adds up to 473 million Euro.

I removed Unilend, as the platform has closed and the company has gone into receivership.

Source: P2P Banking

CORELOGIC LAUNCHES NEW AUTOMATED VALUATION SOLUTION TO HELP STREAMLINE MORTGAGE LOAN ORIGINATIONS (CoreLogic), Rated: A

CoreLogic, a global property information, analytics and data-enabled solutions provider, announced today the introduction of its Total Home Value for Originations AVM solution.

The new Total Home Value for Originations solution is specifically calibrated and packaged to improve efficiencies when performing property valuations during the purchase and refinance loan underwriting process.

Becoming a Digital Leader: 5 Customized Fintech Strategies That Work (Cutomer Think), Rated: A

According to EY study, fintech startups have raised $41.7 billion in the first half of 2018 across the globe. So, what fintech strategies need to be implemented to transform the consumer experience on the market?

  • Consumers first
  • Rebuilding trust
  • Lack of credibility
  • Partnership instead of competition
  • Improving the quality of lives

Nasdaq buys Canadian alternative data provider Quandl (Finextra), Rated: B

Nasdaq has acquired Quandl, a Toronto-based provider of alternative and core financial data. Terms of the deal were not disclosed.

Australia

Crypto Lending Services Coming to Australian Markets (NewsBTC), Rated: AAA

Helio Lending is the first independent crypto lending company to launch on Australian shores according to reports.

The company claims to be in the position to offer 50% more spending power to clients than they would have by holding on to their crypto assets.

Lakeba Invests in Lodex to Become Latest Capital Equity Partner (CryptoTechNews), Rated: A

Lodex, Australia’s first auction-style loans and deposits marketplace leader, today announced it has secured capital investment from Lakeba Group, an established Australian technology innovator.

India

India catches up with China, records 2nd highest fintech adoption rate: Here’s all you need to know (Financial Express), Rated: AAA

India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%, which also throws a huge opportunity for India to not only make best out of financial services sector but also to disrupt it.

Southeast Asia

How Japan’s SoftBank and Its $ 100 Billion Vision Fund Became the Biggest Startup Story of 2018 (Inc.), Rated: AAA

UberWeWorkSaudi Arabia. The biggest startup stories in 2018 shared one long and influential thread: Japanese conglomerate SoftBank, its $100 billion tech investment fund, and founder Masayoshi Son.

The Vision Fund is backed by several prominent investors, including Apple and the government of Abu Dhabi, but its largest financial partner is Saudi Arabia’s sovereign wealth fund. The country’s government, under crown prince and de facto ruler Mohammed bin Salman, contributed 45 percent of the $100 billion, and in October announced plans to put another $45 billion into a second Vision Fund.

P2P lending can plug Southeast Asia’s US$ 175B business finance gap (Yahoo! News), Rated: AAA

Peer-to-peer (P2P) lending has emerged as a popular alternative financing option for small and medium enterprises (SMEs) in Southeast Asia. In 2016, P2P lending generated US$115.01 million, which accounted for more than half of total market share of Southeast Asia’s alternative financing market. In an evolving financing landscape, P2P lending complements the services banks provide and support the region in realising its growth and development potential. The very fact that investment in the region’s startups tripled from US$2.52 billion in 2016 to US$7.86 billion in 2017 is a testament of the vast potential in Southeast Asia’s FinTech startups.

Businesses, largely SMEs, benefited from such platforms too. According to a Deloitte report, SMEs contribute to 40% of Southeast Asia’s gross domestic product (GDP) and hiring 70% of the region’s workforce. Despite the importance of SMEs regionally, support is generally lacking, especially in terms of financing. This is due to strict banking regulations imposed after the 2008 global financial crisis, which have made banks and most financial institutions increasingly risk-averse. This is evidenced by McKinsey Global Institute’s report stating that 39 million Southeast Asian SMEs (or 51%) lack access to credit.

Malaysia may issue more equity crowdfunding, P2P lending licences in 2019 (Asia Asset Management), Rated: AAA

Malaysia’s securities regulator may license more operators of equity crowdfunding (ECF) and peer-to-peer (P2P) lending platforms next year, after current operators raised more than 200 million ringgit (US$48.25 million) for small firms since the industry was legislated in 2015, according to its chairman.

Singapore’s Milieu Insight raises US$ 730K to enhance market research platforms (e27), Rated: A

Singapore- and Thailand-based marketing software startup Milieu Insight has announced that it has raised S$1 million (US$730,000) from a group of private investors including former Rippledot Capital Director, Ravi Ravulaparthi.

Korean Fintech Startup HonestFund Attracts $ 12 Million Series B Investment (PR Newswire), Rated: A

HonestFund (CEO: Sanghoon Seo) has announced that the company, one of the largest marketplace lending players in South Korea, has successfully raised $12 million Series B investment.

Investment was led by Korea’s leading VCs and investment companies, such as Dunamu & Partners, MurexPartners, KB Investment, TL Asset Management, Bass Investment and HB Investment. This brings HonestFund’s total investment to $21 million, making it one of the most valuable Fintech companies in South Korea.

Canada

How experimental tech drives TD Bank’s mobile app (American Banker), Rated: AAA

While many banks have sought to employ experimental technologies when dealing with customers, including predictive virtual assistants, geolocation and advanced data analytics, few have brought all those pieces together to the degree used by TD Bank.

The bank has used such technologies live in production and won significant customer adoption, with its mobile app becoming No. 1 in the finance category in Canada for both iOS and Android. Mobile customers use the app 17 times a month on average, a figure that is growing.

OnDeck to merge Canadian operations with Evolocity Financial Group (Seeking Alpha), Rated: A

OnDeck (NYSE:ONDK) will combine its Canadian lending operations with Evolocity Financial Group, a private, Montreal-based online small business lender, to create OnDeck Canada.

Africa

Peer-to-Peer Lending as a Means of Propelling Startup Growth (Modern Ghana), Rated: AAA

Capital is the livewire of any business, especially for startups and established small businesses. Hence, they are always seeking for some additional funding that is too small for an angel investor to get a return for their effort. Banks also think it’s not worth their time. That’s where peer-to-peer (P2P) lending is working to fill that lending gap. This model may be a solution for many small businesses that are struggling with just tapping smaller funding amounts.

Authors:

George Popescu
Allen Taylor

Thursday August 3 2017, Daily News Digest

earning multiples

News Comments Today’s main news: SoFi funds over $3.1 billion in Q2. Bread raises $126M to offer white label solution for major online purchases. RateSetter offers summer prize draw. Thomson Reuters adds alt finance data to Eikon. OnDeck partners with Payment Source in Canada. Today’s main analysis: FT Partners’ CEO monthly alternative lending market analysis for August 2017. International P2P […]

earning multiples

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Asia

Canada

Africa

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News Summary

United States

FT Partners’ CEO Monthly Alternative Lending Market Analysis (August ’17) (FT Partners), Rated: AAA

We are pleased to announce our role advising 

Source: FT Partners

Read the full analysis here.

SoFi letter to investors (SoFi Email), Rated: AAA

Fintech Startup Bread Raises $ 126 Million In Bid To Finance Big Online Purchases (Forbes), Rated: AAA

When you buy something online, chances are you use your credit card. If it’s a bigger purchase, like a mattress or a washing machine, you might decide to pay it off over time. Bread is among the financial technology start-ups attempting to get you to ditch your plastic and instead opt to finance your purchase with a loan that has lower rates and predictable monthly payments.

Bread said on Wednesday it has raised $126 million through a Series B funding round to expand the number of retailers that offer its financing. Menlo Ventures led the equity portion of the investment, with participation from Bessemer Venture Partners, RRE Ventures and others. A debt facility was also provided by Victory Park Capital.

The New York-based company was founded in 2014 and offers white-label solutions for retailers who wish to offer convenient financing to their customers.

You can now use PayPal through Skype’s mobile app (TechCrunch), Rated: A

The still growing payments giant today announced a new deal with Skype that will allow users in 22 countries worldwide to send money to other Skype users through an updated version of the Skype mobile app. This extends PayPal’s potential reach by a sizable amount – the Skype app has been downloaded over a billion times to date, and has approximately 300 million monthly active users, according to Skype parent company Microsoft, as of last year.

To be clear, the feature is designed for sending money between friends and family – not payments for goods or services from a business.

How Two Brothers Turned Seven Lines of Code Into a $ 9.2 Billion Startup (Bloomberg), Rated: A

Every day, Americans spend about $1.2 billion online. That figure has roughly doubled in the past five years, according to the Department of Commerce, and it’s likely to double again in the next five as the internet continues to devour traditional retail.

In 2010, Patrick and John Collison, brothers from rural Ireland, began to debug this process. Their company, Stripe Inc., built software that businesses could plug into websites and apps to instantly connect with credit card and banking systems and receive payments.

The company now handles tens of billions of dollars in internet transactions annually, making money by charging a small fee on each one. Half of Americans who bought something online in the past year did so, probably unknowingly, via Stripe. This has given it a $9.2 billion valuation, several times larger than those of its nearest competitors, and made Patrick, 28, and John, 26, two of the world’s youngest billionaires.

One way to justify the number: Stripe’s new partnership with Amazon. com Inc., the largest and most sought-­after customer on the internet. Over the past couple of weeks, Stripe began handling a large, though undisclosed, portion of Amazon’s transactions. Neither company will address the scope of the deal—which was only revealed by Stripe’s addition of Amazon’s logo to its website—but it could help Stripe greatly increase its trans­action volume.

Seven years in, however, Stripe’s mission is less to send more books, vacuums, and grooming kits into the world than to “increase the GDP of the internet,” Patrick says. To do this, the company is beginning to move beyond payments by writing software that helps companies retool the way they incorporate, pay workers, and detect fraud. It’s part of an ambitious bid to revamp how online business has been conducted for 20 years and to give anyone with a bright idea a chance to compete.

Real Estate Lender Zeus CrowdFunding More Than Doubles Its U.S. Service Area (PR.com), Rated: A

Zeus CrowdFunding will now provide fast funding to more of America than ever before. The company more than doubled its service area this month, expanding to eight new states as well as Washington, D.C.

The full list of territories in which Zeus CrowdFunding will provide real estate listings for investment are as follows: Colorado, Connecticut, Florida, Georgia, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, North Carolina, Rhode Island, Texas, Virginia, Washington, D.C. and West Virginia.

KPMG: ALTERNATIVE INVESTMENT INDUSTRY DEAL MOMENTUM CONTINUES (All About Alpha), Rated: A

The auditing giant KPMG says in a recent report on merger and acquisition activityin the alternative asset management world that there was a dip in activity in this space in 2015, that there was a rebound “to more normalized levels” in 2016, and that the momentum off of that rebound continues in 2017, which saw 18 M&A transactions in the first quarter alone.

Stepping back a bit, the report observes that asset managers that have been focused for a long time on the long-only segment of the market are turning to M&A as one good way of capitalizing on the growing retailization of alternative strategies, “the increasing availability of liquid alternative investments to retail investors through registered investment (mutual) funds and retirement accounts.”

Another Big Picture point – various segments of the AI industry want to merge with one another. Private equity firms in particular want to “expand into adjacent asset classes such as real estate, infrastructure and hedge fund.”

RIA headcount, AUM on the rise as more firms embrace robo model (Financial-Planning), Rated: A

The RIA sector is enjoying brisk growth in both personnel and assets under management, but remains dominated by small businesses that cater to specialized sets of clients, including a growing number of firms that are rolling out interactive digital advice services.

Those are among the findings from a new report by the Investment Adviser Association, the group’s annual industry snapshot.

By the numbers, the RIA sector reached an all-time high with 12,172 SEC-registered advisers as of April 2017, up 2.7% from a year ago. Those advisers serve 35.6 million clients and manage $70.7 trillion in assets, according to the IAA’s analysis.

The data show that there are only a handful of mega-advisers serving a vast portfolio of clients, suggesting a heavy reliance on an automated advice platform. Just eight registrants report that they have more than 1 million clients.

Far more common are firms that have fewer than 100 clients, the analysis finds.

By far the largest segment of firms are those with AUMs between $100 million and $1 billion (56% of all registrants), and 87% of all registrants count fewer than 50 employees. Just 1% of registered advisers — only 124 — boast an AUM of $100 billion or more, yet those shops manage 54% of the total assets in the industry.

LendingTree, LeadsCon Announce Judges for First-Ever $ 25,000 Startup Innovation Spotlight (Markets Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, and Access Intelligence, a leading business information and marketing company, today announced the judges for its new initiative to showcase the top startup companies in financial technology (fintech) lead generation at LeadsCon this summer.

The judges for the Startup Innovation Spotlight are:

  • Doug Lebda, Founder and CEO of LendingTree
  • Matt Coffin, Founder of Coffin Capital & Ventures
  • AJ Agrawal, Founder of Verma Media and Marketing Consultant to Fortune 500 companies
  • Chris Fralic, Partner at First Round
  • Shawn Colo – Shawn is the Co-Founder & Managing Partner of 3L Capital as well as a senior advisor with Spectrum Equity Investors.

Beware the return of the ILC (American Banker), Rated: A

Recent remarks by acting Comptroller of the Currency Keith Noreika and the industrial bank application submitted by Social Finance have raised significant policy questions about the mixing of banking and commerce, really for the first time since Walmart’s and Home Depot’s failed banking bids prior to the financial crisis.

SoFi’s application, meanwhile, indicates that there may be greater interest in the last viable type of FDIC-insured bank charter still legally available to commercial firms. To be sure, the fintech-powered marketplace lender is not a commercial entity like Walmart. As a financial services provider, SoFi could apply for a mainstream bank holding company license. But SoFi’s industrial bank bid could be seen as a stalking horse, potentially opening the door for more companies — including commercial and industrial firms — that want banking powers. In addition, we should question the wisdom of granting SoFi an FDIC-insured banking license without requiring SoFI to accept regulation by the Federal Reserve as a bank holding company, as other financial owners of banks must do.

Ripple’s Product Suite is Growing (Ripple), Rated: A

And now, Ripple’s growing global payments network has 90+ customers, 75+ commercial deployments in progress and a common set of payment standards governing all transactions on the network.

Based on customer feedback, we’ve given our global payments network a name, RippleNet. This is not new – but simply an evolution of the growing network that has been building significant momentum. RippleNet is the world’s only enterprise blockchain solution for global payments.

Cloud Lending Solutions Announces Major Expansion of the CL Solution Suite With New Product: CL Portal (BusinessWire), Rated: A

Cloud Lending Solutions, a leader in cloud-based loan and leasing software, announced upgrades to its end-to-end suite of lending products for its commercial banks, retail banks and credit union clients with the expansion of its latest product CL Portal™ already in production at a Fortune Global 500 Bank.

The new CL Portal provides a differentiated borrowing experience for commercial, small business and consumer loans for borrowers, investors, and stakeholders by seamlessly integrating with loan product workflows and document management to create a personalized, unique experience for loans ranging from fully automated consumer loans to multi-entity, collaborative commercial loans. The CL Portal supports multiple borrower types including:

  • Commercial Loan Origination Portal: financial institutions can now design a commercial loan portal and enable borrowers to log on and securely upload required documents and check the status of a loan in progress. The CL Portal extends existing document management functionality already in CL Originate, to display a list of document requirements associated with the borrower and facilitate the document upload process and review process.
  • Small Business Loan Application Portal: facilitates a cost-effective, online small business loan origination process leveraging automated scoring criteria and third-party data. Designed to integrate with borrower and back office lending workflows, 3rd party data collections, document collections, and review from CL Originate.
  • Consumer Loan Application Portal: providing a multi-channel personalized and differentiated borrowing experience for consumer loan products. Configurable workflows allow banks to manage the complete consumer loan application including acknowledgments, credit, document delivery, offer, and acceptance.
  • Investor Portal works in conjunction with CL Marketplace, enables financial institutions to extend investment opportunities to their customers by making portions of loans available for investment. CL Portal enables investors to view investment opportunities, bid on applicable loans and manage existing investments.

15 Creative Ways Large Real Estate & Infrastructure Developers – Raise Millions Outside of Traditional Debt and Equity (Part I) (JDSupra), Rated: A

We know one developer who invested only $10,000 by utilizing just two of these strategies and made $35,000,000 by selling to a national homebuilder, and saving substantial within a tax preferred vehicle that his attorney helped him devise.

  1. Forward Sale Funding
  2. Overriding Royalty Interests
  3. Sponsorships
  4. Presales
  5. Crowdfunding
  6. Options Contracts
  7. Pay upon Completion Contracting
  8. Corporate Bond Funding
  9. Municipality Bonds
  10. Private Transfer Fees
  11. Sales/Leaseback
  12. 3rd Party Subordination & Cross-collateralizations
  13. Joint Ventures
  14. Subdividing
  15. Tax

Presales

Lenders typically require developers to presale or pre-lease a certain percentage (e.g. 50%) of their project before providing construction financing.

This requires that developers have the considerable skills and resources to generate presales.  While a typical sales and marketing budget may represent 5% of sales, the ability to achieve these presales makes the difference between getting funding and not.

Crowdfunding

Real estate crowdfunding continues to be a dynamic and ever-evolving industry, growing to an estimated $3.5 billion in 2016. By 2025, the crowdfunding industry as a whole is anticipated to be valued at more than $300 billion and online real estate marketplaces are primed to capitalize on that explosive growth.

 

Why young women today have a gloomier financial outlook than men (CNBC), Rated: B

Millennial women still trail their male peers when it comes to financial satisfaction, according to a new report from online loan marketplace LendingTree. Other elements point to why: The survey found women earn less, carry almost 30 percent more in outstanding debt, and are less confident about their ability to pay it off.

  • 57 percent of millennial men have an annual income of $50,000 or greater, compared to 42 percent of their female counterparts.
  • LendingTree, an online loan marketplace, says millennial women also carry almost 30 percent more outstanding total debt.
  • The top financial priority for millennial women was increasing savings while their male peers said increasing income.

Somewhat Favorable Media Coverage Somewhat Unlikely to Impact Elevate Credit (NYSE:ELVT) Share Price (Community Financial News), Rated: B

News stories about Elevate Credit (NYSE:ELVT) have trended somewhat positive recently, according to Accern. Elevate Credit earned a news sentiment score of 0.14 on Accern’s scale. Accern also gave media headlines about the company an impact score of 46.2609752435269 out of 100, meaning that recent media coverage is somewhat unlikely to have an impact on the company’s share price in the immediate future.

Fund That Flip plans to expand in Cleveland (Crain’s Cleveland Business), Rated: B

A New York City real estate services company, Fund That Flip, is bringing its sales and back-office operations to Northeast Ohio.

The three-year-old company currently has a small presence here at 1382 W. Ninth Street, and it intends to add 25 employees.

The convergence of fund administration and FinTech (Hedgeweek), Rated: A

The forces shaping industry change demand that the role of the fund administrator increasingly needs to also be that of a technology services firm, rather than simply a provider of financial services. The influence that FinTech is having on the fund administration industry is growing and the long-term demands will be even greater.

United Kingdom

RateSetter spurs on business brokers with summer prize draw (P2P Finance News), Rated: AAA

RATESETTER is giving its business finance brokers an extra incentive to find borrowers over the typically slow summer months, with a “six weeks of summer” prize draw.

The peer-to-peer lender, which originates both consumer and business loans, has previously expressed its intentions to boost its business finance segment.

RateSetter will automatically enter its business loan brokers into the draw, which started on 24 July and ends on 1 September. There is a different prize for each week within this timeframe.

Who will be the first £3bn P2P lender? (P2P Finance News), Rated: AAA

IT HAS been a busy quarter for the “big three” peer-to-peer lenders with Zopa, Funding Circle and RateSetter all reaching the £2bn lending milestone.

But who will be first to £3bn?

Zopa’s loanbook reached £2bn in January and was at £2.4bn as of the end of the second quarter of 2017, P2PFA figures show.

Funding Circle, which hit £2bn in February and was at £2.4bn by the end of the second quarter, saw 12 per cent growth since the first quarter and 45 per cent annually.

Meanwhile, RateSetter, which hit £2bn last week, had £1.9bn at the end of quarter two, up 9.6 per cent since the first quarter and up 35.9 per cent annually.

Going by growth rates, Funding Circle appears to be growing fastest so could hit the £3bn the quickest.

Meet the company behind Nutmeg’s ISA (AltFi), Rated: A

When Nutmeg launched its Lifetime ISA in April, it was through a partnership with digital wealth platform InvestCloud. The cloud computing and API-based technology allowed Nutmeg to quickly on-board clients while complying with regulators.

Asset-backed peer-to-peer lender launches IFISA (AltFi), Rated: A

There’s a new peer-to-peer ISA on the market. Asset-backed lending platform Ablrate has just launched its own take on the Innovative Finance ISA, after receiving full authorisation from the FCA in April.

Chinese investment powering regeneration of the North (Bridging&Commercial), Rated: A

One city that is often overlooked is Sheffield. There are already encouraging signs that Sheffield is a city on the up, however, and a big part of that is down to Chinese investment.

Last year it was announced that Chinese company Sichuan Guodong Construction had tied up a 60-year partnership with Sheffield City Council, with an initial commitment to spend £220m on up to five projects in the city centre over the next three years. It’s the largest Chinese investment deal in a UK city outside of London.

Folk2Folk launches Three Counties Hub (Bridging&Commercial), Rated: B

Folk2Folk has expanded its presence into Worcestershire, Herefordshire and Gloucestershire.
The peer-to-peer lending platform has repurposed its Tewkesbury office in Gloucestershire into a regional hub and, as a result, it is now active in these three counties.

When bank lenders say no, where does a business go? (RealBusiness), Rated: B

When bank lenders turn business owners away, they should refer them to alternative finance lenders instead. But how does it work?

However, accessing finance is still a bug-bear for many SME owners. Despite the increasing variety of options available, raising awareness is still crucial to the uptake of funding with many business owners still turning to bank lenders.

Tavener suggested aggregating all the funders into one place and creating a market comparison site. This is exactly what happened – pretty much every alternative funder was incorporated into Clifton’s Alternative Business Funding portal.

The platform now incorporates 120 different business funding products.

China

Intelligent finance new trend: UP Financial sets sail with “AI+big data” (PR Newswire), Rated: A

As the root of multiple industries, the financial industry’s evolution will make a significant contribution to the growth of the economy. On July 16Steven Yuan, CEO of UP Financial, at the LendIT Summit in Shanghai, presented to the whole world at the commercial application of shared AI- geometric stock, which marked the growth and imagination of China’s intelligent finance. In a speech under the title of “technology-driven new finance”, he predicted that wealth management and investment decisions will become highly intelligent for the economyIt can promote financial assets growing in a geometrical progression, and be able todrive the real economy’s development, and create unlimited value. The ultimate goal of the transformation of technological finance is to break the boundary of industrial innovations and increase the social value to the economy. New intelligent finance marks this improving direction.

What’s in a name? Everything, when it comes to China’s stock market (SCMP), Rated: A

You could be forgiven for assuming that a company with a name like Shanghai P2P Financial Information Service might be in the business of, well, peer-to-peer financial information services.

But names can be misleading, particularly when it comes to the Chinese stock market.

As of last Friday, shares of P2P Financial Information traded at 6.66 yuan, more than 72 per cent shy of its close of 23.4 yuan on June 11, 2015.

European Union

Fintech funding on the rebound as Irish start-ups play part (Irish Times), Rated: A

Ireland played its part, recording fintech investments of more than $230 million (€194 million) in the three-month period, led by Plynkwhich raised €25 million in a Series A round from Swiss Privée in June.

Total global funding to fintech firms rose to $8.4 billion (€7.1 billion) from $3.6 billion (€3 billion) with European fintech investment jumping to over $2 billion (€1.7 billion). This is well below the peak investment high of $5.8 billion (€4.9 billion) seen in the fourth quarter of 2015, but up on the $880 million (€741 million) reported in the first three months of 2017.

International

Thomson Reuters adds alternative finance data to Eikon with TAB Dashboard (Finextra), Rated: AAA

Created by Cambridge-based TAB U.K., TAB Dashboard is the world’s most comprehensive source of intelligence on the global alternative finance market, and its deployment on Eikon opens up a significant new asset class for its users.

Data on the alternative finance market is difficult to obtain, with financial professionals forced to gather information on a piecemeal basis, or direct from individual platforms, which is inconsistent between services, languages and definitions and therefore extremely hard to extract insight from. The addition of TAB Dashboard to Eikon allows customers to use extensive data in a format and environment they are comfortable with and which is consistent, shaping their strategy and keeping them aware of regulatory and policy changes.

TAB Dashboard analytics shows that in 2016 an average of $40.9M was raised every single day, more than double the daily average of $18.4M in 2014, with signs that that growth is continuing along the same path.

TAB U.K. analyses data from more than 900 different alternative finance platforms, including equity, bonds, SME debt, P2P and more, and has mapped more than ten million transactions.

International P2P Lending Volumes July 2017 (P2P-Banking), Rated: AAA

Milestones reached this month are:

  • Zopa crosses 2.5 billion GBP originated since launch
  • Ratesetter crosses 2 billion GBP originated since launch
  • Mintos loan volume since launch now over 250 million Euro
  • Lendix reaches 100 million Euro in financed loans since launch
Source: P2P-Banking

Today in Data: Mobile App News Breakdown (PYMNTS), Rated: A

225 million | Current amount of Paytm users prior to new messaging service launch at the end of August

$250 | Amount of coupons offered through grocery operator Food Lion’s new mobile app

31 | Number of European markets P2P payment service Klarna Bank’s new mobile app Wavy enables for mobile money transfers

India

Will RBI Regulations Facilitate Or Inhibit The P2P Lending Market? (Inc42), Rated: AAA

In the absence of proper regulations, people are often hesitant to use P2P platforms for lending and borrowing. To that end, the RBI has highlighted three main reasons peer-to-peer lending should be regulated in India.

In the 2016 paper, the RBI talked at great length about the risks of money laundering associated with peer-to-peer lending. To minimise these risks, the RBI is looking to cap the interest rates charged by P2P lending companies at the same level as NBFCs and microfinance institutions (MFIs). It also raised concerns regarding the lack of transparency in KYC and loan recovery practices.

  • The P2P companies would serve only as intermediaries, responsible for matching lenders and borrowers on the platform. The portal would act as the loan originator, without the lending and borrowing actually getting reflected on its balance sheet.
  • The platform will be prohibited from giving any assured return either directly or indirectly. It will, however, be allowed to opine on lender suitability and borrower creditworthiness.
  • Advertisements should contain adequate mention of P2P lending regulations.
  • The funds will have to move directly from the lender’s bank account to the borrower’s bank account to reduce the threat of money laundering.
  • Peer-to-peer lending platforms will also be prohibited from participating in cross-border transactions, under the FEMA guidelines for transactions between residents and nonresidents.

Fintech startups like Lendingkart, KredX move towards hybrid lending model  (India Times), Rated: A

Lendingkart, which has been lending through its own books as a nonbanking financial company, is set to start co-lending with banks and other financial firms through a marketplace platform in six-nine months, chief executive Harshvardhan Lunia said.

On the other hand, KredX, an invoice discounting marketplace platform for small and medium enterprises, has applied for an NBFC licence. Consumer lending company ZestMoney is also seeking to become a non-banking financial company.

Capital Float, which started its marketplace model last year and currently co-lends with five financial institutions, is set to scale up loans disbursed through its partners to 50% of its total disbursals by the end of this fiscal year. Currently, that’s at 40%.

Some digital lending companies such as BankBazaar, which runs a marketplace, and LoanTap, which lends on its books, do not see the need for a hybrid model.

Sebi forms panel to study fintech impact on securities market (Livemint), Rated: A

The Securities and Exchange Board of India (Sebi) on Wednesday formed a 10-member committee on financial and regulatory technologies, headed by Manipal Global Education chairman T.V. Mohandas Pai.

Sebi said the panel will recommend to the regulator the utilization of fintech solutions for further widening and deepening of the Indian securities market. For this, the committee has to advise Sebi on better usage of existing financing platforms, both traditional and alternative (e.g. peer to peer lending and equity crowd-funding).

The panel will also advise Sebi on how to enhance market access and improve mobilization of household savings through new delivery channels of financial products, Robo Finance, investment advisory and portfolio management services.

Asia

Polytechnics in Singapore to add fintech courses in banking and IT diplomas (Tech in Asia), Rated: A

Polytechnics in Singapore are about to start teaching fintech with the help of Germany-headquartered Fidor Bank.

The bank is working with the Monetary Authority of Singapore to insert the Fidor Student Academy Singapore program into the curriculum of banking and IT-related diplomas offered by five polytechnics in the city-state.

Canada

OnDeck partners with Payment Source in Canada (PR Newswire), Rated: AAA

OnDeck® (NYSE: ONDK), the leader in online lending for small business, announced today a partnership with Payment Source, the largest retail distribution network for prepaid products in Canada, to offer Payment Source’s Now Prepay customers access to the OnDeck online small business lending platform.

Payment Source operates the Now Prepay brand and provides prepaid mobile top ups, gift cards and financial products and services to more than 15,000 retailers throughout Canada.

Africa

Synthesis named as one of top ten fintech firms to watch (Synthesis), Rated: A

Synthesis, founded in 1997, offers highly specialised software development, consulting and integration services and technology based product solutions to banking and financial institutions in South Africa and other emerging markets.

Philippines

JG Summit diversifies into digital financing (The Standard), Rated: AAA

Conglomerate JG Summit Holdings Inc. said a unit teamed up with the founders of internet giants Skype and LU.com to form digital financial services marketplace to address the financial needs of underbanked consumers and micro and small and medium enterprises in the Philippines.

Authors:

George Popescu
Allen Taylor

Thursday August 3 2017, Daily News Digest

earning multiples

News Comments Today’s main news: SoFi funds over $3.1 billion in Q2. Bread raises $126M to offer white label solution for major online purchases. RateSetter offers summer prize draw. Thomson Reuters adds alt finance data to Eikon. OnDeck partners with Payment Source in Canada. Today’s main analysis: FT Partners’ CEO monthly alternative lending market analysis for August 2017. International P2P […]

earning multiples

News Comments

United States

United Kingdom

China

European Union

International

India

Asia

Canada

Africa

Philippines

News Summary

United States

FT Partners’ CEO Monthly Alternative Lending Market Analysis (August ’17) (FT Partners), Rated: AAA

We are pleased to announce our role advising 

Source: FT Partners

Read the full analysis here.

SoFi letter to investors (SoFi Email), Rated: AAA

Fintech Startup Bread Raises $ 126 Million In Bid To Finance Big Online Purchases (Forbes), Rated: AAA

When you buy something online, chances are you use your credit card. If it’s a bigger purchase, like a mattress or a washing machine, you might decide to pay it off over time. Bread is among the financial technology start-ups attempting to get you to ditch your plastic and instead opt to finance your purchase with a loan that has lower rates and predictable monthly payments.

Bread said on Wednesday it has raised $126 million through a Series B funding round to expand the number of retailers that offer its financing. Menlo Ventures led the equity portion of the investment, with participation from Bessemer Venture Partners, RRE Ventures and others. A debt facility was also provided by Victory Park Capital.

The New York-based company was founded in 2014 and offers white-label solutions for retailers who wish to offer convenient financing to their customers.

You can now use PayPal through Skype’s mobile app (TechCrunch), Rated: A

The still growing payments giant today announced a new deal with Skype that will allow users in 22 countries worldwide to send money to other Skype users through an updated version of the Skype mobile app. This extends PayPal’s potential reach by a sizable amount – the Skype app has been downloaded over a billion times to date, and has approximately 300 million monthly active users, according to Skype parent company Microsoft, as of last year.

To be clear, the feature is designed for sending money between friends and family – not payments for goods or services from a business.

How Two Brothers Turned Seven Lines of Code Into a $ 9.2 Billion Startup (Bloomberg), Rated: A

Every day, Americans spend about $1.2 billion online. That figure has roughly doubled in the past five years, according to the Department of Commerce, and it’s likely to double again in the next five as the internet continues to devour traditional retail.

In 2010, Patrick and John Collison, brothers from rural Ireland, began to debug this process. Their company, Stripe Inc., built software that businesses could plug into websites and apps to instantly connect with credit card and banking systems and receive payments.

The company now handles tens of billions of dollars in internet transactions annually, making money by charging a small fee on each one. Half of Americans who bought something online in the past year did so, probably unknowingly, via Stripe. This has given it a $9.2 billion valuation, several times larger than those of its nearest competitors, and made Patrick, 28, and John, 26, two of the world’s youngest billionaires.

One way to justify the number: Stripe’s new partnership with Amazon. com Inc., the largest and most sought-­after customer on the internet. Over the past couple of weeks, Stripe began handling a large, though undisclosed, portion of Amazon’s transactions. Neither company will address the scope of the deal—which was only revealed by Stripe’s addition of Amazon’s logo to its website—but it could help Stripe greatly increase its trans­action volume.

Seven years in, however, Stripe’s mission is less to send more books, vacuums, and grooming kits into the world than to “increase the GDP of the internet,” Patrick says. To do this, the company is beginning to move beyond payments by writing software that helps companies retool the way they incorporate, pay workers, and detect fraud. It’s part of an ambitious bid to revamp how online business has been conducted for 20 years and to give anyone with a bright idea a chance to compete.

Real Estate Lender Zeus CrowdFunding More Than Doubles Its U.S. Service Area (PR.com), Rated: A

Zeus CrowdFunding will now provide fast funding to more of America than ever before. The company more than doubled its service area this month, expanding to eight new states as well as Washington, D.C.

The full list of territories in which Zeus CrowdFunding will provide real estate listings for investment are as follows: Colorado, Connecticut, Florida, Georgia, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, North Carolina, Rhode Island, Texas, Virginia, Washington, D.C. and West Virginia.

KPMG: ALTERNATIVE INVESTMENT INDUSTRY DEAL MOMENTUM CONTINUES (All About Alpha), Rated: A

The auditing giant KPMG says in a recent report on merger and acquisition activityin the alternative asset management world that there was a dip in activity in this space in 2015, that there was a rebound “to more normalized levels” in 2016, and that the momentum off of that rebound continues in 2017, which saw 18 M&A transactions in the first quarter alone.

Stepping back a bit, the report observes that asset managers that have been focused for a long time on the long-only segment of the market are turning to M&A as one good way of capitalizing on the growing retailization of alternative strategies, “the increasing availability of liquid alternative investments to retail investors through registered investment (mutual) funds and retirement accounts.”

Another Big Picture point – various segments of the AI industry want to merge with one another. Private equity firms in particular want to “expand into adjacent asset classes such as real estate, infrastructure and hedge fund.”

RIA headcount, AUM on the rise as more firms embrace robo model (Financial-Planning), Rated: A

The RIA sector is enjoying brisk growth in both personnel and assets under management, but remains dominated by small businesses that cater to specialized sets of clients, including a growing number of firms that are rolling out interactive digital advice services.

Those are among the findings from a new report by the Investment Adviser Association, the group’s annual industry snapshot.

By the numbers, the RIA sector reached an all-time high with 12,172 SEC-registered advisers as of April 2017, up 2.7% from a year ago. Those advisers serve 35.6 million clients and manage $70.7 trillion in assets, according to the IAA’s analysis.

The data show that there are only a handful of mega-advisers serving a vast portfolio of clients, suggesting a heavy reliance on an automated advice platform. Just eight registrants report that they have more than 1 million clients.

Far more common are firms that have fewer than 100 clients, the analysis finds.

By far the largest segment of firms are those with AUMs between $100 million and $1 billion (56% of all registrants), and 87% of all registrants count fewer than 50 employees. Just 1% of registered advisers — only 124 — boast an AUM of $100 billion or more, yet those shops manage 54% of the total assets in the industry.

LendingTree, LeadsCon Announce Judges for First-Ever $ 25,000 Startup Innovation Spotlight (Markets Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, and Access Intelligence, a leading business information and marketing company, today announced the judges for its new initiative to showcase the top startup companies in financial technology (fintech) lead generation at LeadsCon this summer.

The judges for the Startup Innovation Spotlight are:

  • Doug Lebda, Founder and CEO of LendingTree
  • Matt Coffin, Founder of Coffin Capital & Ventures
  • AJ Agrawal, Founder of Verma Media and Marketing Consultant to Fortune 500 companies
  • Chris Fralic, Partner at First Round
  • Shawn Colo – Shawn is the Co-Founder & Managing Partner of 3L Capital as well as a senior advisor with Spectrum Equity Investors.

Beware the return of the ILC (American Banker), Rated: A

Recent remarks by acting Comptroller of the Currency Keith Noreika and the industrial bank application submitted by Social Finance have raised significant policy questions about the mixing of banking and commerce, really for the first time since Walmart’s and Home Depot’s failed banking bids prior to the financial crisis.

SoFi’s application, meanwhile, indicates that there may be greater interest in the last viable type of FDIC-insured bank charter still legally available to commercial firms. To be sure, the fintech-powered marketplace lender is not a commercial entity like Walmart. As a financial services provider, SoFi could apply for a mainstream bank holding company license. But SoFi’s industrial bank bid could be seen as a stalking horse, potentially opening the door for more companies — including commercial and industrial firms — that want banking powers. In addition, we should question the wisdom of granting SoFi an FDIC-insured banking license without requiring SoFI to accept regulation by the Federal Reserve as a bank holding company, as other financial owners of banks must do.

Ripple’s Product Suite is Growing (Ripple), Rated: A

And now, Ripple’s growing global payments network has 90+ customers, 75+ commercial deployments in progress and a common set of payment standards governing all transactions on the network.

Based on customer feedback, we’ve given our global payments network a name, RippleNet. This is not new – but simply an evolution of the growing network that has been building significant momentum. RippleNet is the world’s only enterprise blockchain solution for global payments.

Cloud Lending Solutions Announces Major Expansion of the CL Solution Suite With New Product: CL Portal (BusinessWire), Rated: A

Cloud Lending Solutions, a leader in cloud-based loan and leasing software, announced upgrades to its end-to-end suite of lending products for its commercial banks, retail banks and credit union clients with the expansion of its latest product CL Portal™ already in production at a Fortune Global 500 Bank.

The new CL Portal provides a differentiated borrowing experience for commercial, small business and consumer loans for borrowers, investors, and stakeholders by seamlessly integrating with loan product workflows and document management to create a personalized, unique experience for loans ranging from fully automated consumer loans to multi-entity, collaborative commercial loans. The CL Portal supports multiple borrower types including:

  • Commercial Loan Origination Portal: financial institutions can now design a commercial loan portal and enable borrowers to log on and securely upload required documents and check the status of a loan in progress. The CL Portal extends existing document management functionality already in CL Originate, to display a list of document requirements associated with the borrower and facilitate the document upload process and review process.
  • Small Business Loan Application Portal: facilitates a cost-effective, online small business loan origination process leveraging automated scoring criteria and third-party data. Designed to integrate with borrower and back office lending workflows, 3rd party data collections, document collections, and review from CL Originate.
  • Consumer Loan Application Portal: providing a multi-channel personalized and differentiated borrowing experience for consumer loan products. Configurable workflows allow banks to manage the complete consumer loan application including acknowledgments, credit, document delivery, offer, and acceptance.
  • Investor Portal works in conjunction with CL Marketplace, enables financial institutions to extend investment opportunities to their customers by making portions of loans available for investment. CL Portal enables investors to view investment opportunities, bid on applicable loans and manage existing investments.

15 Creative Ways Large Real Estate & Infrastructure Developers – Raise Millions Outside of Traditional Debt and Equity (Part I) (JDSupra), Rated: A

We know one developer who invested only $10,000 by utilizing just two of these strategies and made $35,000,000 by selling to a national homebuilder, and saving substantial within a tax preferred vehicle that his attorney helped him devise.

  1. Forward Sale Funding
  2. Overriding Royalty Interests
  3. Sponsorships
  4. Presales
  5. Crowdfunding
  6. Options Contracts
  7. Pay upon Completion Contracting
  8. Corporate Bond Funding
  9. Municipality Bonds
  10. Private Transfer Fees
  11. Sales/Leaseback
  12. 3rd Party Subordination & Cross-collateralizations
  13. Joint Ventures
  14. Subdividing
  15. Tax

Presales

Lenders typically require developers to presale or pre-lease a certain percentage (e.g. 50%) of their project before providing construction financing.

This requires that developers have the considerable skills and resources to generate presales.  While a typical sales and marketing budget may represent 5% of sales, the ability to achieve these presales makes the difference between getting funding and not.

Crowdfunding

Real estate crowdfunding continues to be a dynamic and ever-evolving industry, growing to an estimated $3.5 billion in 2016. By 2025, the crowdfunding industry as a whole is anticipated to be valued at more than $300 billion and online real estate marketplaces are primed to capitalize on that explosive growth.

 

Why young women today have a gloomier financial outlook than men (CNBC), Rated: B

Millennial women still trail their male peers when it comes to financial satisfaction, according to a new report from online loan marketplace LendingTree. Other elements point to why: The survey found women earn less, carry almost 30 percent more in outstanding debt, and are less confident about their ability to pay it off.

  • 57 percent of millennial men have an annual income of $50,000 or greater, compared to 42 percent of their female counterparts.
  • LendingTree, an online loan marketplace, says millennial women also carry almost 30 percent more outstanding total debt.
  • The top financial priority for millennial women was increasing savings while their male peers said increasing income.

Somewhat Favorable Media Coverage Somewhat Unlikely to Impact Elevate Credit (NYSE:ELVT) Share Price (Community Financial News), Rated: B

News stories about Elevate Credit (NYSE:ELVT) have trended somewhat positive recently, according to Accern. Elevate Credit earned a news sentiment score of 0.14 on Accern’s scale. Accern also gave media headlines about the company an impact score of 46.2609752435269 out of 100, meaning that recent media coverage is somewhat unlikely to have an impact on the company’s share price in the immediate future.

Fund That Flip plans to expand in Cleveland (Crain’s Cleveland Business), Rated: B

A New York City real estate services company, Fund That Flip, is bringing its sales and back-office operations to Northeast Ohio.

The three-year-old company currently has a small presence here at 1382 W. Ninth Street, and it intends to add 25 employees.

The convergence of fund administration and FinTech (Hedgeweek), Rated: A

The forces shaping industry change demand that the role of the fund administrator increasingly needs to also be that of a technology services firm, rather than simply a provider of financial services. The influence that FinTech is having on the fund administration industry is growing and the long-term demands will be even greater.

United Kingdom

RateSetter spurs on business brokers with summer prize draw (P2P Finance News), Rated: AAA

RATESETTER is giving its business finance brokers an extra incentive to find borrowers over the typically slow summer months, with a “six weeks of summer” prize draw.

The peer-to-peer lender, which originates both consumer and business loans, has previously expressed its intentions to boost its business finance segment.

RateSetter will automatically enter its business loan brokers into the draw, which started on 24 July and ends on 1 September. There is a different prize for each week within this timeframe.

Who will be the first £3bn P2P lender? (P2P Finance News), Rated: AAA

IT HAS been a busy quarter for the “big three” peer-to-peer lenders with Zopa, Funding Circle and RateSetter all reaching the £2bn lending milestone.

But who will be first to £3bn?

Zopa’s loanbook reached £2bn in January and was at £2.4bn as of the end of the second quarter of 2017, P2PFA figures show.

Funding Circle, which hit £2bn in February and was at £2.4bn by the end of the second quarter, saw 12 per cent growth since the first quarter and 45 per cent annually.

Meanwhile, RateSetter, which hit £2bn last week, had £1.9bn at the end of quarter two, up 9.6 per cent since the first quarter and up 35.9 per cent annually.

Going by growth rates, Funding Circle appears to be growing fastest so could hit the £3bn the quickest.

Meet the company behind Nutmeg’s ISA (AltFi), Rated: A

When Nutmeg launched its Lifetime ISA in April, it was through a partnership with digital wealth platform InvestCloud. The cloud computing and API-based technology allowed Nutmeg to quickly on-board clients while complying with regulators.

Asset-backed peer-to-peer lender launches IFISA (AltFi), Rated: A

There’s a new peer-to-peer ISA on the market. Asset-backed lending platform Ablrate has just launched its own take on the Innovative Finance ISA, after receiving full authorisation from the FCA in April.

Chinese investment powering regeneration of the North (Bridging&Commercial), Rated: A

One city that is often overlooked is Sheffield. There are already encouraging signs that Sheffield is a city on the up, however, and a big part of that is down to Chinese investment.

Last year it was announced that Chinese company Sichuan Guodong Construction had tied up a 60-year partnership with Sheffield City Council, with an initial commitment to spend £220m on up to five projects in the city centre over the next three years. It’s the largest Chinese investment deal in a UK city outside of London.

Folk2Folk launches Three Counties Hub (Bridging&Commercial), Rated: B

Folk2Folk has expanded its presence into Worcestershire, Herefordshire and Gloucestershire.
The peer-to-peer lending platform has repurposed its Tewkesbury office in Gloucestershire into a regional hub and, as a result, it is now active in these three counties.

When bank lenders say no, where does a business go? (RealBusiness), Rated: B

When bank lenders turn business owners away, they should refer them to alternative finance lenders instead. But how does it work?

However, accessing finance is still a bug-bear for many SME owners. Despite the increasing variety of options available, raising awareness is still crucial to the uptake of funding with many business owners still turning to bank lenders.

Tavener suggested aggregating all the funders into one place and creating a market comparison site. This is exactly what happened – pretty much every alternative funder was incorporated into Clifton’s Alternative Business Funding portal.

The platform now incorporates 120 different business funding products.

China

Intelligent finance new trend: UP Financial sets sail with “AI+big data” (PR Newswire), Rated: A

As the root of multiple industries, the financial industry’s evolution will make a significant contribution to the growth of the economy. On July 16Steven Yuan, CEO of UP Financial, at the LendIT Summit in Shanghai, presented to the whole world at the commercial application of shared AI- geometric stock, which marked the growth and imagination of China’s intelligent finance. In a speech under the title of “technology-driven new finance”, he predicted that wealth management and investment decisions will become highly intelligent for the economyIt can promote financial assets growing in a geometrical progression, and be able todrive the real economy’s development, and create unlimited value. The ultimate goal of the transformation of technological finance is to break the boundary of industrial innovations and increase the social value to the economy. New intelligent finance marks this improving direction.

What’s in a name? Everything, when it comes to China’s stock market (SCMP), Rated: A

You could be forgiven for assuming that a company with a name like Shanghai P2P Financial Information Service might be in the business of, well, peer-to-peer financial information services.

But names can be misleading, particularly when it comes to the Chinese stock market.

As of last Friday, shares of P2P Financial Information traded at 6.66 yuan, more than 72 per cent shy of its close of 23.4 yuan on June 11, 2015.

European Union

Fintech funding on the rebound as Irish start-ups play part (Irish Times), Rated: A

Ireland played its part, recording fintech investments of more than $230 million (€194 million) in the three-month period, led by Plynkwhich raised €25 million in a Series A round from Swiss Privée in June.

Total global funding to fintech firms rose to $8.4 billion (€7.1 billion) from $3.6 billion (€3 billion) with European fintech investment jumping to over $2 billion (€1.7 billion). This is well below the peak investment high of $5.8 billion (€4.9 billion) seen in the fourth quarter of 2015, but up on the $880 million (€741 million) reported in the first three months of 2017.

International

Thomson Reuters adds alternative finance data to Eikon with TAB Dashboard (Finextra), Rated: AAA

Created by Cambridge-based TAB U.K., TAB Dashboard is the world’s most comprehensive source of intelligence on the global alternative finance market, and its deployment on Eikon opens up a significant new asset class for its users.

Data on the alternative finance market is difficult to obtain, with financial professionals forced to gather information on a piecemeal basis, or direct from individual platforms, which is inconsistent between services, languages and definitions and therefore extremely hard to extract insight from. The addition of TAB Dashboard to Eikon allows customers to use extensive data in a format and environment they are comfortable with and which is consistent, shaping their strategy and keeping them aware of regulatory and policy changes.

TAB Dashboard analytics shows that in 2016 an average of $40.9M was raised every single day, more than double the daily average of $18.4M in 2014, with signs that that growth is continuing along the same path.

TAB U.K. analyses data from more than 900 different alternative finance platforms, including equity, bonds, SME debt, P2P and more, and has mapped more than ten million transactions.

International P2P Lending Volumes July 2017 (P2P-Banking), Rated: AAA

Milestones reached this month are:

  • Zopa crosses 2.5 billion GBP originated since launch
  • Ratesetter crosses 2 billion GBP originated since launch
  • Mintos loan volume since launch now over 250 million Euro
  • Lendix reaches 100 million Euro in financed loans since launch
Source: P2P-Banking

Today in Data: Mobile App News Breakdown (PYMNTS), Rated: A

225 million | Current amount of Paytm users prior to new messaging service launch at the end of August

$250 | Amount of coupons offered through grocery operator Food Lion’s new mobile app

31 | Number of European markets P2P payment service Klarna Bank’s new mobile app Wavy enables for mobile money transfers

India

Will RBI Regulations Facilitate Or Inhibit The P2P Lending Market? (Inc42), Rated: AAA

In the absence of proper regulations, people are often hesitant to use P2P platforms for lending and borrowing. To that end, the RBI has highlighted three main reasons peer-to-peer lending should be regulated in India.

In the 2016 paper, the RBI talked at great length about the risks of money laundering associated with peer-to-peer lending. To minimise these risks, the RBI is looking to cap the interest rates charged by P2P lending companies at the same level as NBFCs and microfinance institutions (MFIs). It also raised concerns regarding the lack of transparency in KYC and loan recovery practices.

  • The P2P companies would serve only as intermediaries, responsible for matching lenders and borrowers on the platform. The portal would act as the loan originator, without the lending and borrowing actually getting reflected on its balance sheet.
  • The platform will be prohibited from giving any assured return either directly or indirectly. It will, however, be allowed to opine on lender suitability and borrower creditworthiness.
  • Advertisements should contain adequate mention of P2P lending regulations.
  • The funds will have to move directly from the lender’s bank account to the borrower’s bank account to reduce the threat of money laundering.
  • Peer-to-peer lending platforms will also be prohibited from participating in cross-border transactions, under the FEMA guidelines for transactions between residents and nonresidents.

Fintech startups like Lendingkart, KredX move towards hybrid lending model  (India Times), Rated: A

Lendingkart, which has been lending through its own books as a nonbanking financial company, is set to start co-lending with banks and other financial firms through a marketplace platform in six-nine months, chief executive Harshvardhan Lunia said.

On the other hand, KredX, an invoice discounting marketplace platform for small and medium enterprises, has applied for an NBFC licence. Consumer lending company ZestMoney is also seeking to become a non-banking financial company.

Capital Float, which started its marketplace model last year and currently co-lends with five financial institutions, is set to scale up loans disbursed through its partners to 50% of its total disbursals by the end of this fiscal year. Currently, that’s at 40%.

Some digital lending companies such as BankBazaar, which runs a marketplace, and LoanTap, which lends on its books, do not see the need for a hybrid model.

Sebi forms panel to study fintech impact on securities market (Livemint), Rated: A

The Securities and Exchange Board of India (Sebi) on Wednesday formed a 10-member committee on financial and regulatory technologies, headed by Manipal Global Education chairman T.V. Mohandas Pai.

Sebi said the panel will recommend to the regulator the utilization of fintech solutions for further widening and deepening of the Indian securities market. For this, the committee has to advise Sebi on better usage of existing financing platforms, both traditional and alternative (e.g. peer to peer lending and equity crowd-funding).

The panel will also advise Sebi on how to enhance market access and improve mobilization of household savings through new delivery channels of financial products, Robo Finance, investment advisory and portfolio management services.

Asia

Polytechnics in Singapore to add fintech courses in banking and IT diplomas (Tech in Asia), Rated: A

Polytechnics in Singapore are about to start teaching fintech with the help of Germany-headquartered Fidor Bank.

The bank is working with the Monetary Authority of Singapore to insert the Fidor Student Academy Singapore program into the curriculum of banking and IT-related diplomas offered by five polytechnics in the city-state.

Canada

OnDeck partners with Payment Source in Canada (PR Newswire), Rated: AAA

OnDeck® (NYSE: ONDK), the leader in online lending for small business, announced today a partnership with Payment Source, the largest retail distribution network for prepaid products in Canada, to offer Payment Source’s Now Prepay customers access to the OnDeck online small business lending platform.

Payment Source operates the Now Prepay brand and provides prepaid mobile top ups, gift cards and financial products and services to more than 15,000 retailers throughout Canada.

Africa

Synthesis named as one of top ten fintech firms to watch (Synthesis), Rated: A

Synthesis, founded in 1997, offers highly specialised software development, consulting and integration services and technology based product solutions to banking and financial institutions in South Africa and other emerging markets.

Philippines

JG Summit diversifies into digital financing (The Standard), Rated: AAA

Conglomerate JG Summit Holdings Inc. said a unit teamed up with the founders of internet giants Skype and LU.com to form digital financial services marketplace to address the financial needs of underbanked consumers and micro and small and medium enterprises in the Philippines.

Authors:

George Popescu
Allen Taylor

Friday April 28 2017, Daily News Digest

10-year Treasury yields

News Comments Today’s main news: U.S. VC fintech investment rises to $1.2B. P2P Global Investments sees NAV bounce. Kuflink receives FCA authorization. Robo-advisor launches in Luxembourg. OnDeck Canada partners with Lightspeed. Ant Financial plans expansion into Japan. Today’s main analysis: Behind the 2017 bond-market rally. Today’s thought-provoking articles: China P2P industry news. Xero: Best overall fintech. Brazilians embrace robo. Who leads Africa’s fintech, […]

10-year Treasury yields

News Comments

United States

  • U.S. VC fintech investment rises to $1.2B. GP:”Total raise if you include non-VC sources is $1.5bil. New record since Q1 2016. Focs continues on lending and robo. “AT: “What I find interesting is in the report itself: The biggest deals of the quarter – SoFi’s Series G round, UniRush M&A, Zenbanx M&A, ProducePay early-stage, and Kensho Series C2 are the top 5 in the U.S. Also in top 10 are CommonBond and Upstart. Get the report here.”
  • Behind the 2017 bond-market rally. GP:”A very interesting piece worth reading to understand market reactions to the world and in fact cost of capital.”
  • Banks loosening up internally to work with startups. GP:”There is always a risk in relaxing control which translates into a cost, usually fines. To be practical, if the cost of the fines is significantly lower than the return from the business perhaps the fines become just the cost of doing business. On the other side, a regulator regularly fining a financing institution usually has a major impact on the institution reputation which has nonnegligible effects on the business. It is a very difficult to quantify where to relax by how much and the cost of doing so, especially the indirect costs. “AT: “What’s interesting are smaller banks are now starting to see the light.”
  • Mark Cuban backs an app that saves people overdraft fees. GP:”I don’t know anybody who never paid an overdraft fee. There shouldn’t be any overdraft fees, transactions should just be rejected by the bank. Or there should be a real product to compensate for it that has a reasonable cost, in line with the cost of a loan or or a credit card.”AT: “Overdraft fees are a huge frustration for a lot of young people learning how to manage their finances as an adult. It’s a part of growing up. The best solution is to learn how to balance a checkbook, but an app that does it for you on the fly isn’t a bad idea because most young people aren’t that great at balancing checkbooks.”
  • OCC: Fintech charter not a ‘ticket to light-touch supervision’. GP:”The OCC has always been very clear that the fintech charter is not light-touch; if anything it is the same-touch as for a bank while enabling them to offer a smaller amount of services. “AT: “When you’re being sued, the best course of action is to offer some sort of consolation. But you can’t say too much or it will be used against you.”
  • Chatting with PeerStreet’s founders. AT: “Expecting every type of real estate loan to go through a marketplace platform is a tall order, but I like the way BJ thinks.”
  • Debt is a deal-breaker for millennials considering marriage.
  • Quovo raises $10M in Series B. GP:”Quovo offers a series of finance APIs to enable innovation. Worth a look for sure.”
  • Robinhood hits 2 million users, raises $110M in Series C. GP:”RobinHood offers free stock trading. The consolidation that happened in the stock-brokers market from charging a large commission to free is an interesting lesson. The main driver of this cost cutting has been electronic and online trading which pushed brokers to seek an alternative business model, which happens to be in many cases selling order book data or ancillary services and products. “
  • Bitcoin values increases as SEC reconsiders ETF decision. GP:”I continue to believe that cryptocurrencies are a good remittance system. There is also a slew of new ICOs happening. And last but not least Ethereum and the smart contract world are also seeing a very large increase in demand. The main barriers to cryptos seem to be unclear regulation, unclear business model, and security risks.”AT: “It will be interesting to see if the SEC overturns its own decision to turn down the Bitcoin ETF.”
  • Easy Solutions launches AI anti-fraud service. GP:”Detection abnormal behavior on a credit card has been in place for sometimes. Government agencies have also been using abnormal behavior detection on large data for sometimes. Perhaps there is still space for improvement. “

United Kingdom

China

  • Top 5 P2P lending ratings. GP:”In China a lot of websites are trying to rate online lenders. And there is a rating of raters. Here people take a position of the top raters. Most lenders pay money to the rating websites to be rated in a process which can not always be impartial. Caution is advised and perhaps an index of the average rating per lender accross many rating websites is needed. “
  • MaizinJinfu raises Series B. GP:”Congratulations!”

European Union

Australia

India

Canada

South America

Africa

Asia

  • Ant Financial looks to expand into Japan. GP:”Japan is a mature financial system where the mentality is very conservative. I hope Ant has a Japan-adapted plan for the expansion which takes into account Japanese mentalities. In my experience this means at the minimum having Japanese employees, in Japan, and having everything done the Japanese way from the way the contracts are bound to the way you treat your customers. Japan is open to foreign products, but only if they have been well tested and are mature. In fact they seek them. I have brought multiple companies to Japan succesfully.”

News Summary

 

United States

VC Investment in Fintech Rises to $ 1.2 Billion in US: KPMG (Think Advisor), Rated: AAA

U.S. venture capital investment in fintech companies rose to $1.2 billion in the first quarter, the highest activity since last year’s first quarter, according to KPMG International’s Pulse of Fintech report, released Thursday.

Non-VC fintech investment in the U.S. reached $300 million, resulting in a total of $1.5 billion in fintech investment in the U.S. for the quarter.

“Payments and lending continue to attract the most funding globally, although we’re seeing increasing interest in a variety of technologies,” Brian Hughes, national co-lead partner in KPMG U.S. venture capital practice, said in the statement.

“In addition to continued growth in regtech and insurtech, areas such as artificial intelligence, machine learning and Internet of Things are gaining increasing investor attention.”

Next quarter, it said, robo-advisory, artificial intelligence and data analytics look to be “hot investment areas.”

KPMG reported that private equity firms in the U.S., including not-technology-focused ones, are proving robust actors in the late-stage fintech arena, with $1.2 billion in total deal value across 11 deals in the first quarter.

During the same period, however, U.S. fintech M&A got off to a slow start at just $200 million across 24 deals.

The West Coast continued to account for the largest concentration of U.S. fintech investment, with 67.6% of total value of deals in the first quarter and 39% of the total number of deals.

Get the report here.

Behind the 2017 Bond-Market Rally (WSJ), Rated: AAA

When the yield on the 10-year U.S. Treasury note fell to a record low in July, many investors agreed that the developed world was stuck in a “new normal” of ultralow growth, inflation and interest rates. Stronger U.S. economic data in subsequent months helped chip away at that view, lifting yields. They got another boost from Mr. Trump’s victory, as investors bet on a turn to expansionary fiscal policies–including an overhaul of the tax code–that would boost growth and inflation and allow the Federal Reserve to raise rates at a faster pace.

While the yield on the 10-year note is still well above its level on Election Day, that is partly because the Fed has raised short-term interest rates twice since then.

Banks are loosening up internally so they can work with startups (Tearsheet), Rated: A

With public confidence in them in the U.S. below 50 percent across the political spectrum, banks have a branding problem — one that gets even more problematic when they have to work with those outside the industry.

Wells Fargo is one of the banks that has taken active interest in facilitating dialogues with startups. While most most major banks have accelerator programs, Wells Fargo said one of the focuses of its startup program is helping banks understand startup culture and vice versa. Wells Fargo’s accelerator program mentors companies for six months and provides up to $500,000 of equity investments for selected companies. The companies may also work on proof of concepts across different business lines within the bank after the completing of the program.

For smaller banks, a focused approach ensures that the relationship will be productive. Boston-based branchless virtual bank, Radius Bank, has a staff member dedicated to partnerships with startups who carefully vets each startup for compatibility.

Mark Cuban is backing an app that’s trying to help people avoid overdraft fees (Business Insider), Rated: A

The billionaire has invested in a new app called Dave that aims to predict coming expenses for users to help prevent them from overdrafting on their bank accounts.

Once Dave connects with a user’s checking account it forecasts the account’s lowest possible balance in seven days based off the person’s spending habits.

Users are notified when their seven-day forecast is negative. That way they can be proactive and potentially avoid overdrafting and being burdened with bank fees.

According to a report by CNN Money, the top big banks – Chase, Wells Fargo, and Bank of America – raked in over $5 billion in ATM and overdraft fees in 2016. In total, overdrafts cost customers $36 billion a year.

OCC: Fintech Charter Not a ‘Ticket to Light-Touch Supervision’ (ABA Banking Journal), Rated: A

Gardineer emphasized that fintech firms granted a national bank charter would undergo the same supervision process and be held to the same capital, liquidity and consumer protection standards as OCC-supervised banks. She added that state laws on fair lending, debt collection and other things would still apply, just as they do for nationally chartered banks. Her comments came after a lawsuit filed earlier this week by the Conference of State Bank Supervisors, which said that in moving forward with the limited-purpose charter, the OCC overstepped its authority under the National Bank Act.

Chatting with Brew & Brett, Co-Founders of PeerStreet (Simple Innovative Change), Rated: A

Brew Johnson was in real estate law by chance back in the mid-2000’s, which is when he happened upon the dismal reality that our housing market was built on a house of cards through his deep research and desire to figure out what was going on. He knew something needed to change, and he had a plan for how to do it.

When the time was right he brought in Brett Crosby, Co-Founder and COO of PeerStreet to take his tech background from building Google Analytics to help revolutionize the housing market with a new approach to financing the mortgage markets.

BJ: A lot of what we’re doing at PeerStreet is informed by what I learned during that time as a real estate attorney within the securitization market.

Fast forward to 2013, and all the barriers to entry that existed in 2008 had been significantly reduced. After the market crash, government regulation started to favor the startup community, and with the advancements in technology, I felt that it would be a lot easier to create a company like this.

BJ: For me, it was about seeing the movement in marketplace lending, and the growing comfort in investing in this asset class through a new type of platform. This sudden shift in comfort coinciding with easing regulation led to a huge boom for private lending.

The reason we believe it’s so important to build a tech-enabled platform like this is because there are more independent lenders now than ever, and they’re scattered around the country, leading to a significant amount of fragmentation in the market.

What PeerStreet does is use technology to make sense of this fragmentation, and then layer a whole level of positives onto it.

BC: In other spaces like consumer credit, auto loans, and student loans, the location of the lender is not important so it’s possible to lend from a central position. In the mortgage and real estate development space, however, having local knowledge matters a great deal.

BJ: Since we partner with and provide capital to local lenders who lend to small businesses, who in turn lend to other small businesses or real estate entrepreneurs in their communities, we’re enabling our investors to support the value chain of local economies. Essentially, we are investing in communities and helping to promote the up-cycling of housing stock in those areas.

BC: The reality is many of the new business models may go out of business because they are simply taking too much risk on their loans. We’re positioning PeerStreet for the ups and downs of the American economy.

BJ: We think every type of real estate loan will go through a platform like ours eventually, so we are taking a very measured approach to how we decide to move into each of those asset classes.

Deal Breaker?! Dating and Debt (CBN News), Rated: A

According to a new study from online personal finance company, SoFi, debt is a big deal breaker to 20 percent of Millennials (ages 25-35).

“It depends on what they are paying for with their debt. If she has 10-15k in cc debt for B.S. that’s obviously a red flag. If it’s student loans, I can’t complain. If she’s not paying on any of it, run,” said another.

SoFi also looked into how much Millennials cared about a person’s future earnings when deciding whether to date them or not.

According to SoFi, Millennials don’t think debt needs to come up right away. 58 percent say it only needs to be talked about when the relationship gets serious.

Finally, SoFi asked Millennials if they would dump someone over debt. A majority, 55 percent, said no. (Still, 24 percent said they may not consider marrying someone with more than $100,000 in debt.)

Quovo Raises $ 10 Million in Series B Funding to Fuel Fintech Platform Expansion (Crowdfund Insider), Rated: A

Quovo, a Fintech company that leverages data to provide insights alongside connectivity for financial accounts, has raised $10 million in Series B funding.  Existing investors FinTech Collective and Long Light Capital were joined by F-Prime Capital and Napier Park Financial Partners to provide the capital. As one would expect, the cash will be used to fuel platform growth and build out the suite of data analytics offers which include the newly launched bank authentication API and Quovo Connect module.

Robinhood Hits Two Million Users & Raises $ 110 Million During Series C (Crowdfund Insider), Rated: A

California-based fintech company Robinhood announced on Wednesday it not only has reached two million users, but it also secured $110 million during its recent Series C funding round, which was led by DST Global, with participation from NEA, Index Ventures, Ribbit Capital, Thrive Capital and Greenoaks Capital. This brought the company’s total funding to $176 million.

Bitcoin’s value increases as the SEC reconsiders its ETF decision (The Merkle), Rated: A

Not long ago, the three-year effort put in by the Winklevoss twins to bring the Bitcoin ETF to the market was blocked by the SEC, after the agency ruled against them. What followed was a major crash bringing along a 15% decrease in Bitcoin value.

The initial Winklevoss proposal was to list the Bitcoin ETF on the Bats BZX exchange, which is one of the largest equities market operators in the United States. The exchange then decided to file a petition with the SEC, kindly asking the exchange commission to review last month’s decision. Luckily, the petition was accepted, therefore the SEC will proceed to reconsider their decision.

Optimism in the market has appeared all over again, and the price of Bitcoin again the U.S. dollar is further increasing due to these new speculations. Precisely, it has managed to increase to $1,294, from $1,251 in a single day.

Easy Solutions Launches Artificial Intelligence Anti-Fraud Service (Yahoo! Finance), Rated: B

Easy Solutions, the Total Fraud Protection company, today unveiled its new Detect TAArtificial Intelligence (AI) Fraud Assessment Service for banks and other financial institutions. Artificial Intelligence delivers a competitive edge to any business that leverages it effectively, and it is already being applied by leading financial institutions to improve fighting fraud.

United Kingdom

P2P Global Investments sees NAV bounce, expands into alternative credit (AltFi), Rated: AAA

The £833m P2P Global Investments fund saw its net asset value [NAV] rise 0.55 per cent in March, including a 0.16 per cent uplift from its share buybacks, prompting a boost to its latest quarterly returns.

Its latest numbers, however, show a boost in returns with total NAV return for Q1 2017 of 1.18 per cent, while its discount has narrowed to 15 per cent.

Kuflink’s P2P Lending Platform Receives FCA Authorization (Crowdfund Insider), Rated: AAA

On Thursday, Kuflink received full authorization from the Financial Conduct Authority (FCA) for its peer-to-peer lending platform. According to the registration, Kuflink has been given permission to provide regulated products and services, which includes accepting deposits, provide credit to consumers, offer investment advice, and arrange deals with investments.

B&C Awards 2017 shortlist announced (Bridging&Commercial), Rated: A

The top brokers, lenders and individuals in the bridging, commercial, development finance, peer-to-peer and specialist banking markets have been shortlisted and are now in the running to win one of the industry’s most prestigious awards.

The shortlist includes new categories ‘Best Use of Fintech’, ‘Specialist Product of the Year’ and ‘Best Bridging Lender Newcomer’.

Last year’s Bridging Lender of the Year, Octopus Property, has been shortlisted again in 2017 for the coveted title and will be up against fellow nominees Precise Mortgages, Together, Amicus, Funding 365, Masthaven, MTF and LendInvest.

The brand new category ‘Alternative Lender of the Year’ brought in scores of votes, with Assetz Capital, Funding Circle, LendInvest, RateSetter, Lendy and Kuflink making the shortlist.

Pariti adds second online lending partner (AltFi), Rated: A

Pariti, the personal finance management app which helps users to manage their debts, has teamed up with Lendable to broaden its range of loan options. Pariti made leading marketplace lender Zopa its first lending partner in September of last year. Pariti users looking to consolidate their debts will now receive offers from both lenders.

China

P2P Industry News (Xing Ping She Email), Rated: AAA

Top Five P2P Lending Ratings in China
Rating is an important reference for investors. A senior industry player taking the following as the top five P2P lending rating agencies in China: Online Lending House Rating, Xeenho Rating, Net Credit Eye Rating, Rong 360 Rating and Dailuopan Rating.

Online Lending House Rating
Online Lending House is one of the biggest P2P lending portal sites in China. It has been engaged in platforms’ rating since August 2013. Up to now, Online Lending House has issued 44 rating reports maintaining over 100 rated objects.

Xeenho Rating
Xeenho Rating is the first rating agency from the buyer’s perspective, and it was launched by the P2P lending funds Xeenho in October 2016. Yet it has issued its fifth report, with a selection of around 45 P2P lending platforms. The rating is neutral for it stand on the investors’ side, so its rating could be more reliable. Actually, Xeenho’s risk-control management keeping the Zero Bad Debt in the industry.

Net Credit Eye Rating
Net Credit Eye Rating is similar to Online Lending House Rating in terms of contents’ provision. It was launched in September 2015 and has issued 18 periods of reports with over 70 P2P lending platforms.

Rong 360 Rating
Rong 360 Rating is quarterly issued, so far it has 8 periods of rating reports on 70 platforms. Rong 360 includes a wider range of content compared by other agencies, therefore some low rating results may exists.

Dailuopan Rating
Dailuopan launched its own ratings services mainly based on big data method. It started from May 2016, and has issued 10 periods of reports on over 500 P2P lending platforms.

Jack Ma: We need a reliable credit system on P2P lending industry
On April 23rd, the 2017 Annual Summit of China Green Companies was held in Zhengzhou. Jack Ma attended the occasion and said, “Only when a reliable credit system has been built, the real P2P business could be exist.” He also pointed out that new finance is to create a share-benefited and fair environment for residents, which should reach the effect that “an old woman has the same rights with a bank CEO .”

In fact, Jack Ma has previously said that the P2P lending should based on three elements: data, credit system and risk control system with big data. Unlike the negative view on P2P lending five years ago, this time Jack Ma show an optimistic attitude to the industry.

MaiziJinfu Raises Series B Funding (Yahoo! Finance), Rated: A

UniFi ‘s parent company Shanghai Wheat Asset Management Co., Ltd. (“MaiziJinfu”, “Maizi” or “the Company”), a China -based Internet-based financial information service provider, today announced that it has received Series B funding,  at the Internet Finance Development and Innovative Application Forum (IFDIA), which was co-hosted by Money Weekly in Shanghai .

European Union

FINANCIAL ADVICE FROM A ROBOT LAUNCHES IN LUX. (Delano), Rated: AAA

From about $19bn under management by robo advisors in the US in 2014, this figure has since quadrupled. However, this is still small compared with traditional financial services. For example, the Luxembourg wealth management industry alone had four times these assets under management in 2015. Nevertheless, these are early days.

The grand duchy is now part of this trend with the launch of the KeyPrivate service by Keytrade Bank Luxembourg. Residents and non-residents alike can use the service. You tap in how much you want to invest, for how long, and with what risk profile, and then there’s a questionnaire to check that you have the necessary financial means.

The site will then design a portfolio based on 12 funds invested principally in shares and bonds in different international markets.

After investment, each portfolio is reviewed automatically by the robot to take the latest market developments into account. KeyPrivate chose exchange-traded funds (ETFs) to power this system. Not only is it easier and cheaper to move in and out only of ETFs than with standard funds, but these “tracker” products seek to mirror industry benchmark indexes that tend to give average returns.

The minimum investment is €15,000, and the service is provided at “a fee that is two or three times cheaper than a traditional wealth manager,” said Thibault de Barsy, CEO of Keytrade Bank Luxembourg. It is a flat fee on total assets of 0.75% plus VAT per year. There is no up-front fee, nor is there an extra charge even if the client rebalances their portfolio.

Australia

Xero wins Best Overall Fintech award (Xero), Rated: AAA

We feel humbled to be awarded the Best Overall Fintech platform by the Fintech Breakthrough Awards. It also provides validation that we’re truly changing the lives of our more than one million subscribers.

Award organizers report $36 trillion in digital payments will be processed by the end of 2017. In the past 12 months, Xero alone transacted $1.2 trillion worth of economic activity.

The very foundation of a small business owner’s financial web is secure bank integrations. These enable banking, accounting and business management to come together. Xero is building a strong, global financial web, working with 110 financial institutions and 500 ecosystem partners around the world.

Millennials fast losing interest in low-rate accounts (LendIt), Rated: A

  • Poor rates on savings accounts, pricey property and stock market volatility is leading to an influx of millennial money to P2P lending
  • The number of millennial investors has increased by >250% over the last 12 months as young savers join older investors in seeking out alternatives to traditional saving and investment products
  • Surge in millennial money has helped RateSetter reach $100m of loans funded in record time for an Australian lending platform
  • 80% of all lenders expect to increase the amount invested within the next 12 months
Source: RateSetter

RateSetter: Millennials are driving P2P growth in Australia(P2P Finance News), Rated: A

The London-headquartered P2P platform, which launched its Australian division to the public in 2014, argues that poor rates on savings accounts, high property prices and stock market volatility have pushed people aged 18-35 towards P2P lending.

RateSetter Australia said that its number of millennial investors had grown by 250 per cent over the last 12 months and now accounts for 58 per cent of total active investors.

India

Here’s all you want to know about alternative asset class – P2P lending (Financial Express), Rated: A

What P2P lending offers investors
– P2P lending in India currently gives a net return of 18-22%
– Borrowers repay principal & interest every month so there is a steady cash flow
– Investors can pursue legal recourse against the borrower in case of defaults
– By diversifying your investment across different borrowers, you will begin to mirror the overall default rate of the platform

P2P lending is like investing in debt; the capital risk is lower, and there exist ways to mitigate it. In case a borrower defaults, investors can pursue legal recourse against the borrower.

Cash in on P2P lending (Telengana Today), Rated: B

A good percentage of people in the world are involved in digitally enabled peer-to-peer exchange. This form of exchange has expanded dramatically in recent years, moving beyond simple retailing and free file exchange to personal, human-intensive services such as hosted accommodation, urban and city-to-city transportation, and peer-to-peer lending.

Here is the basic premise of P2P lending: People sign up on a P2P lending platform like PeerLend as a borrower or as a Lender. A borrower submits an application for a loan by providing his details, and KYC documents. The platform back office team performs a credit assessment of the profile and determines his credit worthiness.

From a lender’s perspective, peer to peer lending allows them to directly lend to other people by having them register on the platform by providing their ID and address proof. They also provide the bank account details that they will use to transact on the platform.

Interest rates – Various P2P platforms in India are charging a one-time registration fee ranging between Rs.500/- to Rs.1,500/-, and a loan servicing fee ranging from 3.5% to 6% of the loan amount.

Canada

OnDeck Canada Partners With Lightspeed (Yahoo! Finance), Rated: AAA

OnDeck Canada, a leading online lender to small businesses in Canada , and Lightspeed, a cloud-based point-of-sale platform for independent retailers and restaurants, have announced a partnership that will allow Lightspeed users to secure OnDeck loans. The new offering will be available to Lightspeed customers in Canada and the US providing up to $500,000 (US) term loans and $100,000 (US) lines of credit.

This strategic partnership between OnDeck and Lightspeed, who each share a focus on assisting small businesses, is a major step forward for Canadian businesses, especially those retail, restaurant, and e-commerce companies that can now acquire OnDeck financing to support their investment in the Lightspeed point of sale (POS) solution.

OnDeck loans will also enable Lightspeed clients to take advantage of growth opportunities such as buying inventory, purchasing equipment, and boosting their customer experience.

OnDeck’s advanced lending technology and staunch dedication to customer service has enabled it to deliver more than $6 billion dollars in capital to over 60,000 businesses across the United States , Canada , and Australia.

South America

Magnetis sees more Brazil investors embracing robo-advisory (NASDAQ), Rated: AAA

Magnetis Gestora de Recursos Ltda, Brazil’s first fintech asset manager, expects demand for affordable access to automated investment advice to surge in coming years as interest rates decline and economic uncertainty persists.

As the central bank undertakes the most aggressive rate cutting cycle in eight years, demand for cheap financial advice has fueled a surge in trials for robo-advisers, an automated form of passive money management that identifies a client’s risk-taking preference.

Since March 2015, Magnetis has conducted 30,000 trials for clients eager to understand a platform providing access to 15,000 different domestic tradable assets.

Growing scale has helped Magnetis cut management fees to 0.4 percent, well below the 0.8 percent to 1 percent that banks and brokerages typically charge customers.

Africa

Banks vs startups: Who leads Africa’s fintech innovation? (This is Africa), Rated: AAA

Only an estimated 34 percent of Africa’s adult population has any form of formal bank account. This is an improvement from a decade ago. Much of this progress can be credited to the growth of mobile and agent network-based banking solutions.

To scale up the trend, banks need to figure out how to effectively join Africa’s fintech innovation ecosystem.

A number of banks have launched bespoke accelerator programmes in a bid to reach out to African entrepreneurs and startups. Barclays, Standard Bank, Citi, and DBS Bank are just a few.  Others seek to partner directly with startups to develop new products and services.

In Cape Town, for example, Barclays has launched a business accelerator programme called Rise in a bid to encourage mutually beneficial collaboration between banks and startups.

Others agree. In east Africa, KCB Bank has partnered with more than 10 startups on projects and is involved with multiple projects supporting entrepreneurship in the region. This is bearing fruit: the bank’s mobile banking app was built by a startup.

Peach Payments took part in the Barclays accelerator in 2016. Upon completion, it signed a proof of concept with the bank to explore further collaboration.

However Keith Jones, co-founder at Sw7, believes that despite their efforts banks have so far failed to develop a mechanism to effectively engage with startups.

While the intent is there, he says, the strict corporate mindset of financial institutions has meant they are slow to adapt to new solutions and models. They can also have a tendency to “smother” small businesses rather than help them to thrive.

6 artificial intelligence startups in Africa to look out for (VentureBurn), Rated: A

South African startup DataProphet last year received a significant investment of an undisclosed amount from Yellowwoods Capital Holdings to expand its international offering. As part of the deal, DataProphet will act as the advanced analytics partner for the group.

The startup, based in Cape Town, has developed various machine-learning interventions, mainly for the finance and insurance sector.

Nigerian startup Kudi.ai has developed a chatbot which allows users to make payments and send money to friends and family in Nigeria via messaging. The company is a graduate of the YCombinator Winter 2017 batch.

The company uses AI to understand user requests, drive conversations, understand user spending habits and prevent fraud.

The startup has put together a business-to-business solution too, which it is piloting with banks and telecommunication companies.

Founded by former equity-derivatives specialist Annabel Dallamore (pictured here) together with Julian Dallamore and Mark Karimov in 2013, Johannesburg startup Stockshop.co.za offers a number of artificial intelligence solutions to financial institutions such as banks and insurance companies.

The startup has also developed a bot interface that completes real-time identity verification checks on behalf of banks and financial institutions in line with requirements under the Financial Intelligence Centre Act (FICA).

The startup has also developed a solution that uses an algorithm that pairs financial behaviour, spending and other data along with emotional cues and provides clients with assistance around financial matters such as payments, administration, rewards, education, analytics and tracking.

It’s also launched a micro-insurance platform in April that is unique to the African market.

Asia

Ant Financial Eyes Japan (Finews), Rated: AAA

China’s Ant Financial Services Group has said it wants to increase operations in Japan and is actively seeking a partner there.

With a deal in Korea already in the bag after a $200 million investment in South Korea’s mobile platform company Kakao Talk, the focus has turned to the world’s thrid-largest economy Japan.

Authors:

George Popescu
Allen Taylor