Thursday April 27 2017, Daily News Digest

banks online lenders

News Comments Today’s main news: Conference of State Bank Supervisors files lawsuit against OCC. The actual complaint. P2PFA members lent more than 1B GBP in Q1. Marc Franson’s comment on CSBP lawsuit: “The proposed OCC FinTech charter had enough obstacles and questions of its own, but the Conference on State Bank Supervisors has sued the OCC in […]

banks online lenders

News Comments

United States

  • CSBS files complaint against OCC. GP:”The US is in an interesting equilibrium between state power and federal power. In the internet era state control of online institutions will lead to cross-state-boarder regulation arbitrage. States entering regulator-competition could be good for the fintechs. On the other side I don’t see why and how a federal regulator isn’t allowed to create new types of charter and compete with the states as well. I do hope that the rumore is true and the states will be more constructive in offering better alternatives instead of blocking innovation. ” AT: “This has been a long-time coming, and quite frankly, I’m surprised it’s taken this long.”
  • The actual complaint against OCC. AT: “I can’t say that I disagree with the CSBS position that the OCC deciding on its own to start a charter and regulate digital banking is an overstep of its authority. Nevertheless, I’m not convinced that states are the best regulators of an industry that inherently is cross-boundary. Constitutionally, the federal government is the regulatory authority for interstate commerce.”
  • How banks can compete against an army of fintech startups. GP:”An interesting summary worth a read.”AT: “This is a great read with practical solutions, but banks will never be as agile or as nimble as tech startups.”
  • Rising rates pose risk for students looking to refinance. GP:”A raising rates environment favors for the borrowers fixed rates and for everybody else floating rates. The rism with adjustable rates credit is of course to push the borrowers into default. There is an equilibrium between lenders seeking profits and making sure not to push borrowers into default.”
  • Helping investors avoid The Lending Club trap. GP:”Global Debt Registry offers a 3rd party solution to increase investor confidence in online loans. A good approach for the industry. They already signed up a few markee customers like Avant.”
  • Fintech apps bring stability to stressed families. GP:”There is an advantage in having credit cards you can use in case of emergency. Online lines of credit will likely act in the same way”
  • Marketplace real estate lending. GP:”…growing number of online real estate platforms…”
  • Fintech funding in New York companies is tanking. GP:”New York investors are more risk averse then Silicon Valley ones. “AT: “Maybe it’s because the more interesting innovations right now are happening somewhere else.”
  • PeerStreet named ‘Best Overall P2P Lending Platform’.
  • Kabbage CEO discusses future of entrepreneurship, IP.

United Kingdom

China

International

European Union

Australia

India

Canada

News Summary

United States

CSBS Files Complaint Against Comptroller of the Currency (CSBS), Rated: AAA

The Conference of State Bank Supervisors (CSBS) announced today it has filed a complaint in the United States District Court for the District of Columbia against the Office of the Comptroller of Currency (OCC).  The complaint seeks to prevent the agency from moving forward with an unlawful attempt to create a national nonbank charter that will harm markets, innovation and consumers.

“The OCC’s action is an unprecedented, unlawful expansion of the chartering authority given to it by Congress for national banks.  If Congress had intended it to be used for another purpose, it would have explicitly authorized the OCC to do so,” said John W. Ryan, CSBS President and CEO.  “If the OCC is allowed to proceed with the creation of a special purpose nonbank charter, it will set a dangerous precedent that any federal agency can act beyond the legal limits of its authority.  We are confident that we will prevail on the merits.”

The complaint asserts that by creating a national bank charter for nonbank companies, the OCC has gone far beyond the limited authority granted to it by Congress under the National Bank Act and other federal banking laws. Those laws authorize the OCC to only charter institutions that engage in the “business of banking,” which under the National Bank Act requires an institution, at minimum, to receive deposits.  Yet the OCC is attempting to create a new special purpose charter for nonbank companies that do not take deposits, without express statutory authorization. The OCC does not have the authority to create a special purpose charter for nonbanks without specific congressional approval.

CONFERENCE OF STATE BANK SUPERVISORS v. OFFICE OF THE COMPTROLLER ) OF THE CURRENCY and THOMAS J. CURRY (BankCSBS), Rated: AAA

  1. CSBS, the nationwide organization of state banking regulators in the United States, brings this action challenging the OCC’s recent decision to create a new special-purpose national bank charter for financial technology (“fintech”) and other nonbank companies.
  2. Although the OCC’s decision primarily focuses on fintech companies, the OCC has declared that it is empowered to create a charter for nonbank financial services providers regardless of the extent to which they are technology-driven.
  3. State authorities (including CSBS’s members) have been successfully overseeing and regulating nonbank companies—including those viewed as fintechs—for many years. In addition to supervising state-chartered banks, most state banking departments regulate a variety of nonbank financial services providers, including money transmitters, mortgage lenders, consumer lenders and debt collectors. Among other prudential requirements, these companies are required to meet state safety and soundness requirements and conform to both state and federal consumer-protection and anti-money-laundering laws.
  4. The OCC contends that the number of fintech companies in the United States and United Kingdom has reached more than 4,000, with investment in the sector growing from $1.8 billion to $24 billion worldwide in just the last five years. Regardless of the accuracy of the OCC’s calculations, it is without question that the OCC’s actions will have significant economic consequences—for example, the largest 100 money transmitters alone transferred more than $800 billion in funds in 2014.
  5. The OCC’s interest in nonbanks culminated in Comptroller Curry’s announcement in December 2016 that the OCC has decided to create a new national bank charter for nonbank companies, which would pull chartered nonbank fintech companies into the national banking regulatory system, potentially preempting and replacing the licensing, regulation, and supervision responsibilities of state authorities.
  6. It is well settled by court precedent, federal banking statutes, and industry custom that carrying on the “business of banking” under the NBA requires, at a minimum, engaging in receiving deposits. Yet the OCC has, through its latest effort, created, without express statutory authorization, a new charter for nonbank companies that would not be engaged in deposit-taking and, thus, would not carry on either the business of banking or any expressly authorized special purpose.
  7. Because the OCC has acted beyond its statutory authority, its creation of a national bank charter for non-depository companies, and the regulation upon which the OCC relies in doing so, are contrary to the NBA and violate the Administrative Procedure Act (“APA”), and therefore cannot stand.
  8. Notwithstanding the significance of the Case 1:17-cv-00763 Document 1 Filed 04/26/17 Page 3 of 31 4 fintech and non-depository industries to the financial markets and the consequences of this new charter, the OCC has declined to pursue publicly vetted regulations.
  9. Instead, the OCC has indicated that it will, as part of the chartering process, determine which (otherwise inapplicable) federal banking laws will be applied to each charter holder and will incorporate those laws through private operating agreements individualized to the business model of each applicant. The OCC does not intend to publicly disclose such operating agreements, and the OCC’s negotiations with each charter holder will be secret. The OCC’s failure to follow proper rulemaking procedures in effecting such a fundamental change in national bank regulatory policy likewise violates the APA.
  10. Further, because the OCC made its decision to offer these special-purpose charters without adequately considering and addressing the myriad policy implications and concerns raised by the public or conducting an adequate cost-benefit analysis, and because the OCC has not offered a reasoned explanation for its decision, its actions should be deemed not only contrary to law, but also arbitrary, capricious, and an abuse of discretion.
  11. Finally, the OCC’s creation of this nonbank charter program will allow chartered entities to operate outside the bounds of existing state regulation, thus creating conflicts between state and federal law that will trigger significant preemption issues. Because Congress has not granted the OCC the requisite authority to charter these nonbank entities, much less expressed the intent that the OCC’s nonbank charter program should preempt state law, the OCC’s program violates the Supremacy Clause and the Tenth Amendment of the U.S. Constitution.
Read the full complaint for declaratory and injunctive relief here.

How Banks Can Compete Against an Army of Fintech Startups (Harvard Business Review), Rated: AAA

It’s been more than 25 years since Bill Gates dismissed retail banks as “dinosaurs,” but the statement may be as true today as it was then. Banking for small and medium-sized enterprises (SMEs) has been astonishingly unaffected by the rise of the Internet. To the extent that banks have digitized, they have focused on the most routine customer transactions, like online access to bank accounts and remote deposits. The marketing, underwriting, and servicing of SME loans have largely taken a backseat. Other sectors of retail lending have not fared much better. Recent analysis by Bain and SAP found that only 7% of bank credit products could be handled digitally from end to end.

The glacial pace at which banks have moved SME lending online has left them vulnerable.

Lending to small and medium-sized businesses is ready to move online

In a recent survey from Javelin Research, 56% of SMEs indicated a desire for better digital banking tools. In a separate, forthcoming survey conducted by Oliver Wyman and Fundera (where one of us works), over 60% of small business owners indicated that they would prefer to apply for loans entirely online.

Transaction costs associated with making a $100,000 loan are roughly the same as making a $1,000,000 loan, but with less profit to the bank, which has led to banks prioritizing SMEs seeking higher loan amounts. The problem is that about 60% of small businesses want loans below $100,000.

Last year, less than $10 billion in small-business loans was funded by online lenders, a fraction compared to the $300 billion in SME loans outstanding at U.S. banks. Morgan Stanley estimates the total addressable market for online SME lenders is $280 billion and predicts the industry will grow at a 47% annualized rate through 2020.

Can banks out-compete the disruptors?

Banks’ cost of capital is typically 50 basis points or less. By comparison, online lenders face capital costs that can be higher than 10%, sourced from potentially fickle institutional investors like hedge funds. Banks also have a built-in customer base, and access to proprietary data on depositors that can be used to find eligible borrowers who already have a relationship with the bank. Comparatively, online lenders have limited brand recognition, and acquiring small business customers online is expensive and competitive.

Rising Rates Pose a Risk for Students Looking to Refinance Debt (WSJ), Rated: A

Interest-rate savings on student-loan refinancing are also shrinking as short-term rates have started to move higher, according to a new report.

Refinancing student loans has taken off in the last five years as fintech lenders, led by Social Finance Inc. or SoFi, have been offering to replace borrowers’ federal student loans with new loans that have lower interest rates.

Until recent years, rates on many federal student loans weren’t based on market rates, but a higher uniform rate set by the government.

Now, the savings are declining for some of the most creditworthy borrowers. Those with the highest credit scores who refinanced early this year received an interest rate that on average was about 2.2 percentage points lower than the rate on their original loan, according to LendKey Technologies Inc., which tracks student loans at credit unions and community banks. In 2014 and 2015, the average interest rate savings exceeded 3 percentage points.

Helping Investors Avoid The Lending Club Trap (PYMNTS), Rated: A

In an interview with Karen Webster, Charlie Moore, president of loan validation platform Global Debt Registry, said that within the last 18 months there has developed a clear need for better investor confidence in online loans — specifically loans being funded by institutional capital across different lending models.

One of the big challenges, said Moore, is for the institutional investor to be able to validate the integrity of the loan data itself.

The spreadsheets themselves might indicate, hypothetically, that a woman with a 700 FICO score, between the ages of 35 and 44 in New York City has taken out a loan of $10,000, but they won’t, as Moore stated, get the full PII or validating information that this is a real person with a real income that can be used to pay that loan’s terms. “The investors are buying on trust,” he said.

The Global Debt Registry, in turn, seeks to confirm the information in the spreadsheet, with affirmation that the borrower is a real person, that they have a social security number, that the credit score is real and that they have the capacity to pay back the loan.

Fintech Apps Bring Stability to Stressed Families (WSJ), Rated: A

The past few years have seen a proliferation of apps designed to help families—not rich people looking to allocate 401(k) retirement accounts, but the larger number struggling to make it from paycheck to paycheck, coping with the uncertainty of everyday life and trying to keep the promises they made to themselves to save.

About 12% of respondents to a 2015 Federal Reserve survey said their income varied “quite a bit” from one month to the next during the past year; an additional 20% said they occasionally had some unusually high or low months.

A three-year-old app called Even, for instance, is a response to the volatility of some people’s income. Based on past paychecks, Even estimates the amount a person makes on average, advancing money on bad weeks that the user pays back on a good week. The cost of the credit extended is covered by a subscription fee—$3 a week for individuals, though for many users employers subscribe and offer Even as an employee benefit. The company has raised $12 million in venture capital.

Another app, Digit, from Hello Digit Inc., attempts to make saving easier.

The Prism app, from Prism Money, began by simply putting all of a user’s bills in one app to cut down on the hassle of keeping track of them all. But the founders realized that managing the payment of bills was a huge source of stress to many people and shifted their focus to helping users with that, says Tyler Griffin, until recently Prism’s CEO and now entrepreneur in residence at the Center for Financial Services Innovation. Users connect the app to their bank accounts and monthly bills. The app reminds users when a bill is due and allows them to pay it with one click.

 

Marketplace Real Estate Lending (Prime Meridian), Rated: A

Today, online lending to both consumers and small businesses continues to grow in acceptance and popularity, thanks to applied technology that has enabled a smoother, quicker, and better experience for the borrower relative to traditional lending.

Real estate lending has also gone online and continues to flourish for the same reasons.

There are a growing number of online real estate platforms and, combined, we estimate that they originated well over $1 billion in loans in 2016[1]. Examples of these platforms include ShareStates, Patch of Land, Realty Mogul, LendingHome, and Money360, to name just a few.

The U.S housing market demonstrated strong growth over the past year. Price appreciation accelerated from 4.9% to 5.3%, existing home sales outpaced 2015 by almost 3%, new home sales were up 13% and housing starts were up 6%[2]. We expect this positive market environment to continue in 2017, supported by demographic trends of increasing demand that should, in turn, support more renovation and new construction of most property types.

Fintech funding to New York companies is tanking (Biz Journals), Rated: A

According to data provider CB Insights, fintech funding to VC-backed New York companies fell 35 percent on a quarterly basis.

New York fintech deals increased for the second straight quarter. The tally rose 26 percent from the fourth quarter of 2016. However, that’s 33 percent below the same quarter last year.

PeerStreet Named “Best Overall Peer-to-Peer Lending Platform” In FinTech Breakthrough Awards (Yahoo! Finance), Rated: B

PeerStreet, a marketplace for investing in real estate backed loans, is pleased to announce that it has been recognized as the Best Overall Peer-to-Peer Lending Platform in the 2017 FinTech Breakthrough Awards.

The mission of the FinTech Breakthrough Awards is to honor excellence and recognize the creativity, hard work and success of FinTech companies, technologies and products. Winners are chosen by a panel of senior-level, experienced FinTech professionals that have personally worked in the industry including journalists, analysts and technology executives.

Kabbage CEO discusses the Future of Entrepreneurship and Intellectual Property (BusinessWire), Rated: B

Rob Frohwein, CEO and co-founder Kabbage, will deliver the keynote at the 13th IP Hot Topics Luncheon at Georgia State University College of Law at noon Wednesday, May 10, at the Knowles Conference Center, 85 Park Place NE, Atlanta.

Frohwein will share his experiences going from a practicing attorney to a global entrepreneur that raised nearly $1 billion based on patented IP for a global lending technology platform. An accomplished author and former radio host, Frohwein will entertain attendees with his vision of the changing industrial and financial climate.

United Kingdom

P2PFA members lent out more than £1bn in first quarter (P2P Finance News), Rated: AAA

THE PEER-TO-PEER Finance Association (P2PFA) members – including new entrant Folk2Folk – lent out more than £1bn in the first quarter of 2017.

The nine P2P platforms – Zopa, RateSetter, Funding Circle, Landbay, LendInvest, Lending Works, MarketInvoice, ThinCats and Folk2Folk – collectively represent more than 80 per cent of the UK market. They originated more than £636m in business loans during the first three months of the year and lent out around £368m to individuals, according to data released by the trade body on Wednesday.

Borrowers becoming increasingly picky (Securities Lending Times), Rated: A

This has created a buyer’s market, with borrowers picking and choosing which lenders they trade with on the basis of the RWA ratings of their available stock.

Another panellist commented that the rise of peer-to-peer lending is likely at help improve liquidity, which is a key concern for European market participants in the context on the European Central Bank’s public sector asset purchase programme.

Collateral to launch P2P app for investors and borrowers (P2P Finance News), Rated: A

The peer-to-peer pawnbroker, which offers investors annual returns of up to 12 per cent, said that it will begin the beta testing phase in the coming weeks and will fully launch the new offering in a couple of months.

Despite the P2P sector’s emphasis on technology, most of the best-established platforms still do not have their own apps. Funding Circle has an app purely for investors, but Zopa and RateSetter do not have apps available. Smaller platforms Crowd2Fund and LendingCrowd already have their own apps, just aimed at investors.

Sikoba, a Decentralized P2P IOU Platform on Blockchain, Launches Presale Ahead of Token ICO (Yahoo! Finance), Rated: A

Sikoba, a global decentralized money platform based on peer-to-peer IOUs and blockchain technology, is taking the first step towards its upcoming ICO by launching a token presale. The presale will give participants a chance to receive a 50% bonus on SKO tokens. These tokens are designed to be used for making transactions on the Sikoba platform. The ICO will run from April 25 to May 15, 2017.

Sikoba’s P2P credit relationships are governed by smart contracts with specific conditions, fee structures, and repayment rules. Through the use of ‘credit conversion’, payments between participants who either do not know or do not trust each other are made possible. Fiat currencies or cryptocurrencies can act as a medium of exchange when there are no credit links between participants, or to repay outstanding balances when needed.

My Lendy Experience – Portfolio Review After 2 Years Investing (P2P-Banking), Rated: A

Lendy is a platform offering bridge loans secured by property. I last reviewed my portfolio performance here on the blog in January 2016. Since then the following major changes have taken place at Lendy:

  1. Different interest rates
    Initially all loans had carried 12% interest. Interest range for investors on new loans now are in the range between 7 and 12%.
  2. Lendy sold the security of the second defaulted loan (Garden Center).
  3. Since March 2017 investor can not buy loans on the secondary market and deposit funds afterwards (this still is possible on the primary market).
  4. Since April 2017 there is a new default policy in effect. For loans more than 90 days overdue interest continues to accrue but will not be paid until Lendy has received payment by the borrower. All loans more than 180 days overdue are now automatically classified as default loans. The number of defaulted loans has risen to 14 at the time of this writing.

My portfolio amount is 10K GBP spread out over 14 different loans. The vast majority is in 12% interest rate loans.

My yield (self calculated with XIRR) so far is 12.1% in GBP. Unfortunately I deposited most funds during the time when the pound was at a high, therefore calculated in Euro currency the yield is only 4.4% for me.

Peer to Peer Lending Car Documentary (Gumtree), Rated: B

I am doing a documentary on the peer to peer lending phenomenon. Specifically peer to peer car lending.

Looking for to talk to anyone who has done this. Good experiences or bad.

Fee paid for your time.

China

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

The annual salary of employees from AI(Artificial Intelligence) field start from $1M!

Chinese fintech market keep booming these years, and the scarcity of talent for the area, especially those who have comprehensive abilities are the most needed. Some professional employees’ annual salary starts from $1M, and it is also very common for a professional expert to earn over one million dollars every year.

In the battle for talents between traditional financial institutions and fintech companies, some traditional institutions are restricted by salary and institution system. According to analysis from industry players, an increasing number of traditional financial institutions cooperate with fintech enterprises, leading fintech intelligence turning to the new financial area.

Chinese:
百万年薪抢夺人工智能人才,新金融公司“截胡”传统机构
金融科技热浪袭来,尤其是复合型人才缺口日益增大,金融科技人才的身价也水涨船高。尤其以人工智能领域人才最为稀缺,年薪起步价即达到百万元,相对成熟的人工智能专家百万美元年薪亦非常普遍。在传统金融机构与新兴金融科技公司争夺金融科技人才的卡位战中,受制于薪酬体系以及机构体制等要求,部分传统金融机构略显疲态。业界人士分析,传统金融机构越来越多与金融科技公司的合作,正是金融科技人才向新金融公司集中的必然走向。

Parent Company of a P2P Lending Platform divests its traditional business, taking P2P Lending as Primary Business.

Recently, P2P lending platform Niwodai reported its annual report, which showing the net profit increased fivefold. Jiayin Fin-tech(New Third Board:832031), the parent company of Niwodai, adjusted their structure of communications business of 2016. They have ceased the communication network technology services from the third quarter of 2016, which means Jiayin is gradually divesting its traditional business, and focus on P2P lending in future.

Chinese: 
你我贷母公司剥离传统业务,网贷成主营
近日发布年报净利增长5倍的互金平台你我贷的母公司嘉银金科,于2016年对通信相关业务结构进行调整,出售了主要从事通信网络技术服务的子公司上海汇祥信息工程有限公司和上海复跃信息科技有限公司,2016 年第三季度起公司不再从事通信网络技术服务。此举也意味着嘉银金科正在逐渐剥离原有传统业务,今后网贷业务将成为公司的主营业务。

60% P2P Lending Institutions may not finish Funds Depository in time.

Unlike the indifferent attitude in the past, banks begin to compete for P2P lending funds depository business after the government’s instruction released. According to a P2P lending platform with listed company background, some banks have been grabbing customers in terms of depository. However, it’s still not easy for platforms to get access to the threshold.“If a platform has not yet carried out depository, we can basically consider it may not continue their business in the near future” an insider of the P2P lending industry said,“Currently the number of potential platforms for depository cooperation is few , and it is estimated that around 60% platforms cannot accomplish depository within the rectification period.”

Chinese:
网贷存管上演“生死时速”,六成机构将“随波逐流”
某上市系网贷平台表示,过去银行对平台爱搭不理,在存管发布后已有多家银行上门咨询合作意向。看似银行已经开启抢业务模式,但网贷存管门槛仍旧不低。“如果这时候还没有开展存管业务洽谈,基本判断平台不想继续经营或实力不够已被挡在门外。”一位网贷行业人士表示,潜在签约平台已不太多,根据当前已签约机构数估计,将有六成左右平台无法在整改期限内完成存管。

CEO Tang Ning and CreditEase Honored for Contribution to Financial Literacy (PR Newswire), Rated: A

Ning Tang, Founder and CEO of CreditEase, received the China Financial Literacy Distinguished Contribution Award at the 2nd China Financial Literacy Annual Conference held in Beijing and Shanghai from March 18 to 20, 2017. As an institution, CreditEase was also honored with the China Financial Literacy Distinguished Contribution Award.

The event with the theme “FinTech and Blockchain” was co-organized by Chinese Museum of Finance Group, China Center of Financial Literacy and China Blockchain Research Center. Financial experts from China and abroad, as well as financial regulators convened to talk about opportunities and challenges brought by FinTech, particularly blockchain, as well as necessity to improve financial literacy of the general public, especially students.

During the keynote speech, Tang stated that China has become a global leader in FinTech innovation and regulation, boasting the comparatively matured payment and online lending industries and expecting more innovations aiming to solve financing difficulties of SMEs.

International

Where funding for financial technology is going, in five charts (Tearsheet), Rated: AAA

CB Insights’ Global Fintech Report reported Wednesday that investment in financial startups soared 222 percent quarter over quarter in Europe and 89 percent in Asia, while North American investment took a small dip.

In the first quarter, fintech startups raised $2.7 billion across 226 deals. That’s a 33 percent rise in funding on a quarterly basis but down 47 percent from the same quarter last year. Deal activity increased 12 percent from the fourth quarter of 2016.

At the current rate, Europe fintech deal activity could top 2016’s total by 57 percent, according to CB.

UK fintech companies raised $328 million in the first quarter, including more that $200 million invested in Atom Bank and Funding Circle.

European Union

Venture Capital Enthusiasm for Fintech Startups Shifts to Europe (Fortune), Rated: AAA

Venture capital investments in financial services startups are showing a geographical split, with funding for so-called “fintech” companies in the United States cooling but soaring in Europe, according to a new report out Wednesday.

In the first quarter this year, venture-backed fintech companies in the U.S. raised $1.1 billion, an 8% drop from the previous quarter and down 39% from the same period a year ago, according to a new report from venture capital database CB Insights.

U.S. fintech startups closed a total of 90 financing deals, down 9% from the previous quarter, and the median deal size in dollars also fell.

Meanwhile, investments during the first quarter in European venture-backed fintech companies jumped to $667 million, a 250% increase over the previous quarter and 133% climb from a year ago.

The number of fintech deals in Europe spiked 74% from the previous quarter to 73, and the average deal size ticked up.

BBVA steps up fintech acquisition strategy with purchase of Openpay (Finextra), Rated: A

BBVA’s ongoing strategy to buy out promising fintech startups has moved ahead with the acquisition of Mexican B2B payments platform Openpay.

Currently, Openpay has a network of more than 15,000 payment reception points in Mexico, connected in real time through its Paynet network, and manages more than one million transactions a month. The Openpay platform is used by more than 1000 businesses in Mexico, from startups to SMEs and large corporate clients.
Australia

Millennials’ financial heartache drives P2P lending (Financial Standard), Rated: AAA

According to P2P lending platform RateSetter, millennials are coming in droves to seek out alternatives to traditional saving and investment products. The investor group is now one of the largest retail investor groups in the P2P market after increasing its involvement by 250% in the last 12 months.

In an analysis of RateSetter investors, the platform found 64% of its millennial investors had chosen to move money from low interest savings accounts and term deposits, while 23% had redirected money from equities into the P2P investment market.

The increase in investment however did not only come from millennials. In the past 12 months, post-millennials, pre-retirees, and retirees have all increased their investment in P2P by 209%, 264%, and 212% respectively (see Table 1). As the average investor numbers continue to climb, so does the average amount of money invested, with pre-retirees increasing their average amount invested from $25,929 a year ago, to $50,123 today.

Australian Govt Regulator Inks FinTech Agreement with Indonesia (Cryptocoins News), Rated: A

Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), has entered a FinTech cooperation agreement with its Indonesian counterpart in a bid to bolster innovation in the sector.

Signed on Friday between the ASIC and Indonesia’s Otoritas Jasa Keuangan (OJK) in Melbourne, the agreement will see the two regulators combine to develop and establish a framework that promotes financial services in each other’s markets.

India

New segments to enter fintech landscape in India this year (India Times), Rated: AAA

Fintech market landscape in India has been dominated by payments and lending firms so far, although other segments, particularly personal finance and enterprise solutions, are poised to gain ground this year, a recent PwC report has found.

Canada

Mobetize and G&F Financial Group Launch Mobile Lending App (News.sys-con.com), Rated: A

Mobetize Corp. (OTCQB: MPAY), a provider of mobile financial services (MFS) technology for the multi-billion dollar business to business (B2B) segment of the Fintech as a Service (FaaS) sector, and G&F Financial Group (G&F), a full service credit union that provides personal, business and wealth financial solutions in British Columbia, are pleased to announce the launch of an online and mobile lending application “Smart Money Loan“. Both parties are excited to invite other financial institutions to join in this innovation and offer the same service to their own clientele.

Smart Money Loan is a proprietary digitized lending product that allows borrowers to apply for secured and unsecured loans ranging from $500 up to $35,000 to refinance credit card debt, student loans, weddings, or household projects.

Key benefits for FI’s include:

  • An omnichannel and simple user experience for fast loan decisions and funding
  • Digitized back-office processes and interoperability
  • Ability to lead innovation with configurable KYC and heuristic adjudication rules
  • Configurable workflow of applications
  • Easy white-labeling configurability for branding and rapid launch
  • Opportunity to leverage new lending business models
  • Ability to respond to and address security and regulatory requirements

Authors:

George Popescu
Allen Taylor