orchard – rss2

Wednesday May 9 2018, Daily News Digest

News Comments Today’s main news: SoFi is planning a credit card. LendingClub reports Q1 results. OnDeck reports Q1 results. Kabbage closes Orchard acquisition. Cross River passes $600M in monthly originations. Mintos achieves profitability. iZettle to pursue $1.1B valuation through IPO. TransferWise moves into Canada. Today’s main analysis: Review of OnDeck earnings. Today’s thought-provoking articles: Review of Marcus. Cities where borrowers save the most […]

News Comments

Today’s main news: SoFi is planning a credit card. LendingClub reports Q1 results. OnDeck reports Q1 results. Kabbage closes Orchard acquisition. Cross River passes $600M in monthly originations. Mintos achieves profitability. iZettle to pursue $1.1B valuation through IPO. TransferWise moves into Canada.
Today’s main analysis: Review of OnDeck earnings.
Today’s thought-provoking articles: Review of Marcus. Cities where borrowers save the most on mortgages. The future of credit.

United States

SoFi’s planning a credit card. AT: “I wonder how this will play out with their primary target, millennials, who aren’t warm on credit cards.”
LendingClub reports Q1 results. AT: “Looking good.”
OnDeck’s Q1 results. AT: “Still at a loss, but looking better.”
Review of OnDeck’s results. AT: “Lend Academy breaks it down and shows why OnDeck’s performance is improving.”
Kabbage closes acquisition of Orchard. AT: “Besides the technology acquisition, a big benefit to Kabbage is that Orchard’s co-founders Matt Burton and David Snitkof are staying aboard.”
Business Insider’s review of Marcus. AT: “Not only should traditional financial institutions be concerned about Marcus, but up-and-coming technology companies should be, too.”
Cities where borrowers save the most on mortgages. AT: “It pays to shop around. Alt lending firms that offer mortgages should look at the competition.”
Cross River passes $600 million in monthly loan orginations. AT: “Congratulations.”
MoneyGram seeks more digital gains.
Credit Karma monitors the dark web.
Zillow invests in house flipping.
Why fintechs should move on from millennials.
Strategies for saying good-bye to student loan debt.
Goldman, Wells Fargo look to credit cards for big returns.
Making the ask is key to success.
SmartBiz Loans adds Seacoast Bank.
Fidelity’s student debt employer contribution program still hot in attracting talent.

European Union

International

India

Other

News Summary

United States

SoFi Is Said to Plan Credit Card With Help From Former Citi Executive (Bloomberg) Rated: AAA

Social Finance Inc., a startup looking to offer a range of banking services to millennials, is working on a credit card and is bringing in a former Citigroup Inc. executive to help oversee the initiative, said people familiar with the matter.

The San Francisco-based company hopes to offer credit cards within the next year, said the people, who asked not to be identified because the plans are private. In preparation, SoFi is hiring Richard Garside to help lead the company’s operations, the people said.

Financial highlights for the first quarter include:

Delivered revenue of $151.7 million, up 22% year-over-year
Achieved 18% year-over-year growth in originations to over $2.3 billion
Improved Contribution Margin to 49.1% from 42.7% in the same quarter last year
Delivered Adjusted EBITDA of $15.3 million, or a 10.1% Adjusted EBITDA margin, compared to an Adjusted EBITDA of $0.2 million, or a 0.1% Adjusted EBITDA margin, in the same quarter last year
GAAP Consolidated Net Loss was ($31.2) million, including $17 million of expenses related to outstanding legacy issues disclosed by the Company in 2016, related to ongoing legal costs from government investigations, as well indemnification costs for the previous management.

Operational highlights for the first quarter include:

In the first quarter of 2018, LendingClub continued to execute on its mission to make credit more affordable and investing more rewarding, now having served over 2.4 million borrowers.
For Borrowers: LendingClub saw strong adoption of a new feature called Direct Payoff that allows borrowers to seamlessly pay off their credit card balances in exchange for a better rate – thereby improving their financial profile and lowering their monthly payments.
For Investors: LendingClub’s recently launched innovation, CLUB Certificates, attracted over $160 million in funding from several of the top names in asset management. The new CLUB Certificates give investors easy access to consumer credit and provide a single security that offers greater flexibility and liquidity.
Scott Sanborn, LendingClub CEO said, ‘We feel good about how we’ve kicked off the year and the fundamentals of our business continue to be strong. Our strategic initiatives are working on both sides of our marketplace and we’ll keep innovating to help more Americans on their journey to financial success.’.

OnDeck Reports First Quarter 2018 Financial Results (PR Newswire) Rated: AAA

OnDeck (NYSE: ONDK) today announced first quarter 2018 Gross revenue of $90 million, Net loss of $1.9 million, and Adjusted Net income of $6.4 million.

“Our first quarter results reflect a strong start to 2018 as we continue to execute on our strategic priorities to position our business for future success,” said Noah Breslow, chief executive officer, OnDeck. “We delivered 8% sequential loan growth while managing our sales and marketing costs, and had positive credit performance, as the 15+ Day Delinquency Ratio and Net Charge-off rate both improved significantly from a year ago.”

Review of OnDeck Q1 2018 Earnings Results (Lend Academy) Rated: AAA

While the company posted a net loss of $1.9 million for the quarter, this was within guidance. Gross revenues were $90 million, coming in at the top end of projections for the quarter. The increase in revenue was attributable to higher interest income or the company’s effective interest yield, or EIY which came in at 35.6%, compared to 34.8% in the previous quarter. OnDeck also beat on adjusted income which came in at $6.4 million (Q1 2018 guidance was between $1 and $5 million).

Source: Lend Academy

Originations were up 8% from the previous quarter at $591 million.

Source: Lend Academy

OnDeck swings to loss, but loan demand surges (American Banker) Rated: A

The New York company recorded a net loss of $2 million, or 3 cents per share, versus a loss of $11 million in the same period a year ago.

OnDeck earned $5.1 in fourth quarter, its first quarterly profit in two years. In a news release Tuesday, the company said that it would have earned $6.4 million in the quarter that ended March 31 if not for charges it took to cover the costs of leases terminations New York and Denver, severance for laid-off workers and other one-time expenses. The lease terminations are expected to save the company $2 million over the next eight years.

Kabbage’s Acquisition of Orchard Officially Closes (Crowdfund Insider) Rated: AAA

Orchard co-founder Matt Burton has emailed industry members stating the previously announced acquisition of his company by SME lender Kabbage has formally closed. The purchase had been rumored for weeks with an official announcement hitting the press at the end of April.

Burton, and co-founder and Chief Analytics Officer David Snitkof, have both joined Kabbage in leadership roles. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

We tried Goldman’s Marcus, here’s our conclusion (Business Insider) Rated: AAA

Goldman Sachs’ consumer lending platform, Marcus, appears well on its way to becoming a full-scale digital banking offering. The platform has originated some $2.5 billion in loans since launching in October 2016, and now offers savings accounts with a minimum threshold of $1.

Source: Business Insider

Here’s why FIs should be worried about Marcus:

It’s backed by Goldman’s reputation, and deep pockets.
The interface is sleek and consumer friendly.
Its offerings are extremely competitive.

LendingTree Reveals Cities Where Borrowers Save the Most by Shopping Around for Mortgage Loans (PR Newswire) Rated: AAA

LendingTree today released its Mortgage Rate Competition Indexes for the 50 largest cities in the U.S. to assess how different markets behave across the country.

Source: LendingTree

Cross River Passes $ 600 Million in Monthly Loan Originations (The Public Opinion) Rated: AAA

Continuing its strong record of growth, Cross River, a leader in the emerging Fintech industry, announced today that it has set a new monthly loan origination record of more than $600 million in April.

Cross River’s April 2018 volume represents approximately 60% growth in loan origination from April 2017, and keeps Cross River on pace to exceed $7 billion in loan originations for 2018.

MoneyGram Seeks More Digital Gains In 2018 (PYMNTS) Rated: A

MoneyGram revenue declined 2 percent year over year in the first quarter, to $380 million. That was lower than analyst expectations of about $386 million. Net income declined 19 percent, to $7.1 million, with earnings per share at $0.15 per share — below analyst expectations of $0.26.

Moneygram.com, the digital business, posted a year-over-year revenue gain of 21 percent in the first quarter, with most credit going to customer acquisitions, the company said in its financial release. Digital revenue accounted for 16 percent of all money transfer revenue in the first quarter.

Credit Karma Partners with SpyCloud to Add Dark Web Data Monitoring (Finovate) Rated: A

Credit Karma has expanded its identity theft monitoring offering to include data from the dark web. Courtesy of a partnership with fellow Finovate alum – and Best of Show winner – SpyCloud, Credit Karma will dramatically increase the number of data breaches it is able to review for its 80 million users. Currently searching 4.5 billion public breaches, the new service will boost the total number of data breaches searched to 13 billion.

Data Sheet—Zillow’s Audacious House Flipping Plan Scares Wall Street (Fortune) Rated: A

Looking merely at the numbers, Zillow reported a fine quarter Monday. The Seattle company doesn’t make money. But it does grow quickly on top of a billion-dollar-plus annual-revenue clip. It is worth more than $10 billion and is the winner of its category, having absorbed competitor Trulia and outlasted others.

Yet Zillow isn’t satisfied. It is starting a new home-flipping business using its own balance sheet to buy, touch up, and sell homes. Wall Street hates the idea, wondering why a perfectly respectable online business would wade into the messy and highly variable world of investing real money in actual houses.

Fintech Companies Should Move On From The Millennials (Forbes) Rated: A

These days, for consumer fintech companies in wealth management (we will call them fintechs for short), it is, to paraphrase Meghan Trainor, all about the millennials. Fintech unicorns are courting millennials and garnering billion-dollar valuations for succeeding at it. The Robinhood is 28, and 78% are under 35. The average age of a Betterment customer is 35 and . With three million accounts, Acorns has primarily a millennial customer base as well. However, if these companies and their millennial-chasing brethren are hoping to raise meaningful assets under management, it is time for them to move on from the millennials.

According to the , millennials today have just 4% of the nation’s wealth, compared to 50% for Baby Boomers and 33% for the Silent Generation.

3 Strategies To Help You Say “Bye, Felicia” To Student Loan Debt (Forbes) Rated: A

Goldman, Wells Fargo Look to Credit Cards for Bigger Returns (Bloomberg) Rated: A

Two of the biggest U.S. banks, Goldman Sachs Group Inc. and Wells Fargo & Co., are on the brink of piling into credit-card lending, seeking a share of the $183 billion in fees and interest tied to the product.

Making the Ask, Part 1: The Key to Entrepreneurial Success (Newswise) Rated: A

Professor Saras Sarasvathy, a renowned scholar of entrepreneurship at the University of Virginia Darden School of Business, has discovered that successful entrepreneurs are not only relentless “askers,” but they also have a repertoire of asks for different startup scenarios.

Rather than develop business plans to raise money, experienced entrepreneurs start with their means at hand — who they are, what they know and whom they know — exploring what they could do with those means. At the same time, they enlist others who want to work with them. Together, they iteratively co-create new products, ventures and markets. As more stakeholders self-select, committing their resources to the emergent ideas, the goals start to coalesce.

In the early stages of venture creation, effectual asks start as open-ended conversations.

SmartBiz Loans Adds Seacoast Bank to Technology Ecosystem (Business Wire) Rated: B

SmartBiz Loans today announced the addition of Seacoast Bank ( to the company’s unique technology ecosystem, taking the total number of banks on their platform to nine. SmartBiz Loans’ intelligent technology platform matches Florida-based Seacoast Bank to the right loan customers in a fraction of the time a referral typically can take, allowing the bank to originate SBA loans more efficiently while increasing the likelihood that small business owners get approved for funding.

Fidelity’s Student Debt Employer Contribution Program Continues to Be Selected by Leading Businesses to Attract and Retain Top Talent (Business Wire) Rated: B

With student debt levels reaching crisis proportions in the United States, Fidelity Investments announces significant response to its Student Debt Employer Contribution benefit, with 25 employers making plans to offer the Fidelity program and nearly 9,000 of their eligible employees expected to be enrolled in the program by the end of June.

United Kingdom

What are the benefits of IFIsas? (Bridging & Commercial) Rated: A

Over a third of UK savers (36%) would place their money in an IFIsa if they had the available funds, a new study has found.

The Next Gen: Investors and Savers report from P2P lending platform ArchOver found that 61% of respondents acknowledged the prospect of higher returns and better interest rates from an IFIsa.

However, over half (57%) claimed that they still didn’t fully understand the service.

China

Chinese Rural Fintech Firm Shenma Completes $ 47.3M Series C Round (Chinese Money Network) Rated: A

Shanghai-based Shenma Finance, a fintech company focused on rural mobility, has raised a RMB300 million (US$47.25 million) series C round led by China Growth Capital, Hina Group and Chinese fintech firm Tongbanjie Group.

Existing investors Credit Ease Financial Industry Investment Fund and ChinaEquity Group also participated in the round, the firm announced on its official WeChat account.

European Union

Riga-based fintech startup Mintos reaches profitability as it eyes global expansion (EU Startups) Rated: AAA

Three years after launch, the Riga-based fintech startup Mintos has turned an annual profit for the first time. The company’s revenue increased more than four-fold in 2017 to over €2.1 million and net profit for 2017 was €197K.

In more than three years since its establishment, Mintos has exceeded €660 million in cumulative investments by investors and the company expects the amount of loans funded to reach €1 billion by the end of the year.

Swedish fintech group iZettle to seek $ 1.1bn valuation in IPO (Financial Times) Rated: AAA

Some of the biggest names in payments, including Mastercard, American Express and Santander, have invested in iZettle, as have venture capital firms including Index Ventures and Dawn Capital.

International

ArthaCoin ICO (ATH Token): Long Term Crypto Lending Program? (Bitcoin Exchange Guide) Rated: A

Arthacoin is a sustainable investment-lending platform that aims at providing prosperity and guaranteed returns to its investors. Arthacoin is viewed as an alternative investment, which uses different investment methods to ensure investors get active returns using their collected funds. The platform purposes to create returns by use of derivatives and leverage in cryptocurrencies.

Besides, it is a self-managed financial system, which supports peer-to-peer transactions with a basis on the open-source platform. Arthacoin is built with a vision of creating a regular passive and sustainable income in the end for its investors.

What’s The Difference Between Trading Crypto VS. Lending Crypto (Finsmes) Rated: A

When it comes to investing in cryptocurrencies, the most common way to invest is by trading. Cryptocurrencies have revolutionized how we do business, make investments and raise funds. Some would even call blockchain technology the invention that would shape the 21st century. Trading cryptocurrencies is a fast and easy way to profit and can be interesting too.

But there is also another way to earn profits from cryptocurrencies and make your money work for you – crypto lending.

Let’s take a look at both crypto trading and crypto lending.

Crypto lending is a relatively newer way to earn profits. It revolves around the concept of shorting.

Australia

Do You Still Only Have One Bank Account? Here’s How Many You Should Have By Now (MyDomaine) Rated: A

If you’re living from pay cheque to pay cheque and can’t seem to break the cycle, chances are you’re not alone, dear millennial. In fact, it may not have even been bad shopping habits that landed you here. Whether it’s an underpaying job, or a weekly rent payment that is far from sensible, in the words of financial adviser, from Honest Money, Jacqui Park: “There’s no time like the present” to stop spending frivolously and start saving. But before you downsize, start a side-hustle, or, cut up the credit cards; it’s worth noting the basics of saving, so when you do decide to forgo life’s little luxuries you are able to make the most of it.

India

BigWin Infotech gets P2P lending licence (The Economic Times) Rated: AAA

Online lending platform BigWin Infotech has received an in-principle approval from RBI to start peer-to-peer lending operation as a non-banking finance company.

The company claims to be the first among all the P2P applicants to have received the licence and is planning to commence operations under the brand name of Paisadukaan.

Fintech companies have netted the lower-middle income consumers who have, until now, been ill-served by banks as far as credit is concerned and have had to resort to gold loans or source other types of collateral. The lending landscape has transformed in the recent times with a host of startups that provide direct and simple credit for consumers. These companies broadly offer two types of products: Cash credit from companies such as Walnut & PaySense, that can be used for any purpose.

EMI loans to purchase electronics or white goods from companies like Zest Money or Kissht competing against industry giants such as Bajaj Finance. Then there are companies like MoneyTap that provide a flexible hybrid product that is an app-based credit line.

Fintech startups that provide credit to SMEs include CapitalFloat, KredX, LendingKart, NeoGrowth, Indifi and others.

P2P loan marketplace Finzy wants to change how India sees lending (Your Story) Rated: A

The rules of investment have changed over the years. First it was traditional methods like saving with fixed deposits, and then came insurance and stock markets.

However, the rules have changed yet again, and peer-to-peer lending is being viewed as an investment avenue that is expected to give returns to the tune of 18-22 percent, according to industry estimates.

According to the company, the rate of return for investing in Finzy is 15.5 percent for investors.

Latin America

Ripio CEO: Reinventing P2P Lending With The Blockchain (PTMNTS) Rated: A

Ripio has had more than one name in its evolution as a firm – but only a single goal. Originally known as BitPagos at launch, and then rebranding to Ripio in advance of its late 2017 ICO – the Argentina-based firm wants to use the blockchain to unlock the power of P2P lendingon a global scale.

The problem with traditional credit systems, according to Ripio, is that when it comes to access, geography is more or less destiny in many cases.

Canada

Fintech company TransferWise to launch borderless debit card in Canada in 2019 (Financial Post) Rated: AAA

European financial technology company TransferWise is planning a Canadian launch next year for its borderless debit MasterCard, which allows users to hold and spend a balance in multiple currencies with lower fees than traditional banks.

Kaarmann says there would be no transaction fees for people making purchases on the borderless debit card in the currency a balance is held in.

Authors:

George Popescu

Allen Taylor

Friday April 27 2018, Daily News Digest

News Comments Today’s main news: Kabbage buys Orchard.Ascentium Capital issues $330M securitization.LendingTree reports record Q1 results.Funding Circle issues second MPL deal.Revolut raises $250M, achieves unicorn status.BBVA issues first blockchain loan from a global bank.IOU Financial releases 2017 results. Today’s main analysis: Canadian fintech funding declines 60 percent in Q1. Today’s thought-provoking articles: Where the oldest […]

News Comments

Today’s main news: Kabbage buys Orchard.Ascentium Capital issues $330M securitization.LendingTree reports record Q1 results.Funding Circle issues second MPL deal.Revolut raises $250M, achieves unicorn status.BBVA issues first blockchain loan from a global bank.IOU Financial releases 2017 results.
Today’s main analysis: Canadian fintech funding declines 60 percent in Q1.
Today’s thought-provoking articles: Where the oldest cars are bought.Mobile banking one of top 3 apps Americans use.APAC’s game-changing proptech.

United States

Kabbage acquires Orchard. AT: “This will be good for both companies. Orchard’s CEO Matt Burton will remain with Kabbage.”
Orchard deal will allow Kabbage to expand offering to banks, small businesses. AT: “This will undoubtedly spur Kabbage’s further growth. And a consequence of the deal is that Orchard will stop offering services that Kabbage’s competitors can use, which will give Kabbage another competitive advantage.”
Ascentium Capital to issue $330 million securitization. AT: “Glad to see it.”
LendingTree reports Q1 results. AT: “LendingTree is looking good overall. Mortgage revenues increased and the company achieved a record for non-mortgage products.”
Which locations buy the oldest cars. AT: “Good stuff if you’re in the used car lending business.”
Mobile banking one of the top three most used apps Americans use. AT: “No surprise. I suspect some day it will be No. 1.”
How to avoid be overcharged for loan fees.
Digital bank in a box.
RealtyMogul, Comunidad Realty Partners close $30M property deal in Texas.
PeerStreet scales real estate crowdfunding.
Citizens Bank uses Finastra, Infosys for trade finance.
Columbus consumers less likely to put fraud alerts on credit reports.
U.S. banks get more freedom to offer unsecured loans.
Big and small banks to expand in Orlando.
Free research reports on MoneyGram, Navient, Oaktree, OnDeck.
Covr appoints BOD, advisory board members.
6th Avenue promotes Darren Schulman to president.
Best Egg partners with Junior Achievement in Delaware.

United Kingdom

European Union

International

Canada

Funding for fintechs decline 60 percent in Q1. AT: “A must-read report.”
IOU Financial releases 2017 results.
BlackChain Solutions signs LOI with DMG Blockchain Solutions on crypto P2P lending.

Other

News Summary

United States

It’s Official: Kabbage To Acquire Orchard (Lend Academy) Rated: AAA

It was the worst kept secret in fintech. There were rumors flying around during LendIt Fintech earlier this month and then Bloomberg published this story a couple of weeks ago about the pending deal. Well, today it became official. In a press release this morning it was confirmed that Kabbage, the tech-focused small business lender, will acquire Orchard.

So, what will become of Matt Burton and his team? Some clues are provided in the press release:

Orchard’s CEO and co-founder, Matt Burton, as well as Chief Analytics Officer and co-founder, David Snitkof, will both join Kabbage in leadership roles upon the closing, helping oversee technology integrations and future innovations. In total, Kabbage will add more than twenty Orchard employees who are predominantly focused on advanced analytics, data science and engineering to its New York City office.

Kabbage plan in Orchard deal: Expand offerings to banks, small businesses (American Banker) Rated: A

Kathryn Petralia, president and co-founder of Kabbage, said the acquisition will help the company diversify its business and offer more data-driven services to small businesses and financial institutions. It currently works with ING, Santander and Scotia Bank. Kabbage’s U.S.-based loans are issued by Celtic Bank in Salt Lake City.

The Orchard name will not survive. “At closing we will be Kabbage,” Burton said.

Until now, Orchard has been providing loan and portfolio analysis to other online lenders. This business model will be discontinued and those relationships will most likely end. Orchard’s current clients are being told about its sale to Kabbage, Burton said.

Ascentium Capital Announces $ 330 Million Securitization (Ascentium) Rated: AAA

Ascentium Capital issued a $330 million small ticket equipment securitization of Ascentium Equipment Receivables 2018-1 Trust.

This represents the company’s ninth securitization since 2012 and the first time a non-investment grade, independent equipment finance company received triple AAA and Aaa ratings from both Standard & Poor’s and Moody’s.

LendingTree Reports Record 1Q 2018 Results (Markets Insider) Rated: AAA

LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com today announced results for the quarter ended March 31, 2018.

First Quarter 2018 Business Highlights

Revenue from mortgage products of $73.5 million represents an increase of 17% over first quarter 2017 driven by strong growth in both purchase and refinance revenues at 13% and 18%, respectively. According to Mortgage Bankers Association, originations industry-wide were projected down 4% in the comparable period.
Record revenue from non-mortgage products of $107.6 million in the first quarter represents an increase of 55% over the first quarter 2017.
Revenue from our credit card offerings continued its momentum, growing to $46.1 million in 1Q, up 36% over the first quarter 2017.
Personal loans revenue of $26.0 million grew 53% over first quarter 2017.
Home equity revenue continued to climb, growing 81% over first quarter 2017.
More than 8.0 million consumers have now signed up for free credit scores and savings alerts through My LendingTree. Revenue contribution from MyLendingTree grew 76% in the first quarter compared to the prior year period as new features, such as Credit Analyzer and free credit monitoring, are driving increased engagement.

LendingTree Study Reveals Which Places Buy the Oldest Used Cars (PR Newswire) Rated: AAA

LendingTree today released the findings of its study on the places that buy the oldest used cars. LendingTree analyzed auto loan offers for borrowers in the top 50 U.S. metros (based on population) to find the average age of used cars financed in each metro, as well as which makes of used cars were most popular.

The national average age of a used car people sought to finance was six years old, but some parts of the country prefer older used cars more than others.

Source: Lending Tree

Mobile Banking One of Top Three Most Used Apps by Americans, 2018 Citi Mobile Banking Study Reveals (Citigroup) Rated: AAA

Apps for mobile banking have become some of the most widely used by Americans, according to Citi’s 2018 Mobile Banking Study, released today. The survey of 2,000 U.S. adults found that, measured by top two ranked responses, 31 percent of consumers use their mobile banking app the most, behind only apps for social media (55 percent) and the weather (33 percent).

“Over the past year we’ve witnessed this increase in engagement first-hand, with mobile usage in North America increasing by almost 25 percent, and we don’t see this trend slowing down any time soon.”

LendingClub was sued for the fees it charges — how you can avoid being overcharged (Market Watch) Rated: A

Pay attention to both the interest rate advertised, as well as the annual percentage rate (APR), Clements said. If they’re different, the lender is likely factoring additional fees into your annual percentage rate.

You may need to borrow more money than you expected if that’s the case, he said, because the total amount you would receive will be less than you asked for.

Research several lenders before choosing which one you want, he said. And if there are any unfamiliar terms, or any confusion about how much you’ll pay back monthly, ask.

Digital bank in a box: Fintech offers branding tool (American Banker) Rated: A

The core systems provider Nymbus is offering a new product for bank customers that want to get in on the burgeoning trend of having a stand-alone, digital brand.

Dubbed SmartLaunch, the offering enables financial institutions to create a digital brand under their existing charter in as little as 90 days, according to Nymbus. The product is built on Nymbus’ cloud-based SmartCore platform, and the company says it provides banks that use the service with all outsourced operational and technological requirements to run the digital bank. Also included are client support, digital marketing and website services.

Source: American Banker

RealtyMogul and Comunidad Realty Partners Close $ 30 Million in Texas Multifamily Properties (Citizen Tribune) Rated: A

RealtyMogul, a pioneer in providing private real estate to discerning investors, announced that MogulREIT II, its real estate investment trust or “REIT,” has completed investments in multifamily apartment complexes in Fort Worth, Texas and San Antonio, Texas, consisting of over 450 units.

The properties were acquired through a partnership with Comunidad Realty Partners, a dynamic real estate investment firm specializing in workforce housing communities in culturally diverse neighborhoods.

Scaling Real Estate Crowdfunding: PeerStreet Establishes a Culture of Excellence at the Top (Crowdfund Insider) Rated: A

Loans on PeerStreet are sourced and curated from vetted private lenders throughout the United States. These lenders have real estate expertise and established borrower relationships. To date, PeerStreet has helped to finance over $900 million in loans by using this partnership approach. The properties they help finance are typically smaller in value – a segment of the industry that is usually overlooked by big institutional money. Loans range from 6 to 24 months and are first lien so investors have a good degree of security. Most of the loans are below a loan to value of 75%. About a year ago, PeerStreet announced having funded $300 million in loans. In less than 12 months, PeerStreet has funded double that number.

PeerStreet is doing small loans commercial, some multi family and mixed used properties. The largest loan size is around $5 million but there can be exceptions. The rate of return for investors during 2017 stood, on average, at 8% net of fees. As for defaults, so far only five loans have gone into foreclosure but they have not experienced any loss of principle – a positive metric.

Citizens Bank Taps Finastra and Infosys for Trade Finance Solution (Citizens Bank) Rated: A

Citizens Bank, working with Infosys as its implementation partner, has selected Finastra to power the trade finance solution it offers to its corporate clients. This new capability will enable Citizens’ corporate clients to digitize traditionally paper-based trade processes, leading to increased efficiencies and reduced costs.

The new trade finance offering will allow the bank to meet increased client demand. Citizens picked Finastra’s Fusion Trade Innovation for its end-user experience, ability to support all trade products, capacity to integrate with downstream systems through open APIs and its high level of configurability.

Consumers in Columbus less likely to put fraud alerts on their credit reports (The Columbus Dispatch) Rated: A

However, a new study finds that consumers in the biggest Midwest cities, including Columbus, are much less likely to put alerts on their credit reports than those in other cities, such as Las Vegas, Houston, Miami and New York. The study by online lender Lending Tree was based on a random sample.

US banks to get more freedom to offer unsecured loans (Financial Times) Rated: B

Joseph Otting, Comptroller of the Currency, said he believed standards should be relaxed to allow banks back into the small dollar loan market; loans would range from $500 to $5,000 and be paid back in 45 and 90 days; right now payday lenders dominate this space and typically take advantage of borrowers by charging high fees and rolling over the principal; allowing banks back into the market will help to bring more regulation and cut down on abuses.

Growth plans: Both big and small banks set to expand locally (Orlando Business Journal) Rated: B

David Stahl, senior vice president, SunTrust Bank: We acquired an online lender called LightStream two years ago, and that has been a huge opportunity for us. The days of people walking into a bank and applying for a loan are pretty much gone.

Free Research Reports on These Credit Services Stocks — MoneyGram, Navient, Oaktree Specialty Lending and On Deck Capital (PR Newswire) Rated: B

This morning, WallStEquities.com observes MoneyGram International Inc. (NASDAQ: MGI), Navient Corp. (NASDAQ: NAVI), Oaktree Specialty Lending Corp. (NASDAQ: OCSL), and On Deck Capital Inc. (NYSE: ONDK). Credit Services companies originate, acquire, and service loans to individuals and corporations. Their products include student loans, mortgages, lines of credit, private equity, and venture capital. All you have to do is sign up today for this free limited time offer by clicking www.wallstequities.com/registration

Covr Financial Technologies appoints Chris Growney to Board of Directors; Gregory Fleming and Robert Kerzner, join Covr’s Advisory Board (PR Newswire) Rated: B

Covr Financial Technologies, a digital, multi-carrier life insurance platform for financial institutions, announced that Chris Growney, an advisor with venture capital and advisory firm Nyca Partners has joined Covr’s Board of Directors following Nyca’s role in Covr’s June, 2017 fundraising. Growney, a director, advisor and investor in a broad range of start-up and growth companies was most recently the founder of Clearwater Analytics, an investment analytics and accounting software company based in Boise, Idaho.

6th Avenue Capital Announces Promotion of Darren Schulman to President (deBanked) Rated: B

6th Avenue Capital, LLC (“6th Avenue Capital”) announced today the promotion of Darren Schulman to President, effective immediately. In his new position, Schulman has oversight over originations, underwriting, operations, collections and strategic initiatives. He previously served as Chief Operating Officer, and will continue to report directly to Chief Executive Officer Christine Chang.

The company also announced today that Chang and Schulman have been appointed to the company’s Board of Directors.

Best Egg Teams with Junior Achievement of Delaware on Financial Education Initiatives (Business Wire) Rated: B

Best Egg, the consumer lending brand of Marlette Funding, LLC, is providing both classroom education and other inspiring financially-related activities for Junior Achievement of Delaware (JA of DE). This announcement coincides with National Financial Literacy Month, being celebrated throughout the month of April.

United Kingdom

Funding Circle brings second marketplace loan deal (Global Capital) Rated: AAA

Sole arranger and lead manager Deutsche Bank announced Thursday a £207m UK SME securitization from Funding Circle, Small Business Loan Origination Trust 2018-1, the second ABS offering from the online lender.

In addition to being just the second deal from Funding Circle, and the third European marketplace loan ABS overall, SBOLT 2018-1 marks the first time Kroll Bond Rating Agency has assigned a public rating for a European securitization deal.

KBRA Europe Assigns Preliminary Ratings to Small Business Origination Loan Trust 2018-1 DAC (Business Wire) Rated: A

Kroll Bond Rating Agency Europe Limited (KBRA) has assigned preliminary ratings to four classes of notes (“Rated Notes”) issued by Small Business Origination Loan Trust 2018-1 DAC (“SBOLT 2018-1”). This is a £206.6 million ABS transaction collateralised by unsecured loans made to small and medium-sized enterprises (“SMEs”) incorporated in the United Kingdom (“UK”).

This transaction represents the second ABS securitisation collateralised by unsecured loans to SMEs originated through the online lending platform operated by Funding Circle Limited (“Funding Circle”), and the first European rated ABS securitisation for KBRA.

Source: Business Wire

Confirmation of that came on Thursday as Revolut became the first of Britain’s digital-only banks to achieve “unicorn” status – in other words, a privately held start-up company with a valuation of more than $1bn (£720m).

Revolut, which was only founded in July 2015, has been valued at $1.7bn (£1.22bn) in its latest funding round.

The bank, which started out as a currency exchange app but later moved into providing personal banking and cryptocurrency trading services, raised $250m (£180m) from backers including DST Global, an investment firm backed by the Russian billionaire Yuri Milner, whose previous early-stage tech investments have included Facebook, Twitter, Airbnb and Spotify.

Ranger Direct Lending rejects investor call to wind up (City Wire) Rated: A

Ranger Direct Lending (RDL) has criticised shareholder Oaktree Capital Management for trying to force the struggling alternative income fund to wind up.

Oaktree, the second largest shareholder in the fund that invests in and through lending platforms, has made public its correspondence with Ranger, which it described as a ‘sub-scale platform’ with shares ‘too illiquid to attract large institutional investors, especially in light of its persistent trading discount to net asset value (NAV)’.

Goji passes £50m in assets (Goji) Rated: A

Goji has now got more than £50m of assets on its platform a little over a year after opening its doors to investors. With over 5,000 customer accounts, our hard earned growth is testament to the work the whole industry has done in selling the asset class to the UK public.

After campaigning hard to change the tax laws to open up the ISA rules so that non-lending platforms could also offer an IFISA, Goji was the first firm to offer investors diversification across a number of platforms through a single Innovative Finance ISA. Goji’s Diversified Lending Bonds target 5%, whilst it’s Renewables Lending Bond targets returns in excess of 8%.

A lending site where you can rent anything just scored millions in venture capital (Business Insider) Rated: A

Fat Lama, which announced $10 million in its Series A on Wednesday in a round led by Blossom Capital, says it will use its latest funding to further its reach within the US and to create a mobile-first offering (so far, the site’s mobile app is only available in the UK).

Fat Lama lets users borrow everything from drones to camera equipment to printers.

The site insures any item listed on its site for up to $30,000, and Englander said his company has plans to raise that amount to $50,000 in the near future.

Artificial intelligence backed to reduce P2P defaults (Peer2Peer Finance) Rated: A

ARTIFICIAL intelligence (AI) could provide peer-to-peer lenders with greater lending security and less chance of defaults, a technology consultancy claims.

Nick Parham, technical pre-sales consultant at NashTech, said there is much P2P platforms can learn about AI from traditional lenders.

“The traditional lending market offers us a powerful insight into the potential for AI in P2P lending,” he said.

TURNING TO YOUR PEERS (BQ Live) Rated: A

They created ArchOver, a peer-to-peer (P2P) lending platform that allows firms that have been operating for more than two years to borrow money from lenders using its website. Companies borrow a minimum of £250,000, with interest rates starting at 7.7% a year.

Since it launched in the autumn of 2014, ArchOver has helped its lenders to inject more than £65m into British businesses, bringing in more than £2.5m in interest at an average return of 7.3%. In an age when bank savings accounts are paying less than 0.5%, it’s easy to see the attraction for investors who understand the risks as well as the rewards.

European Union

Klarna integrates with Magento for streamlined checkout (Payments Source) Rated: AAA

Commerce platform Magento is giving merchants the option to activate Klarna instant credit for online checkouts.

Sweden-based Klarna is built into the latest version of Magento Commerce, giving merchants a streamlined path to offer goods consumers may opt to pay for immediately, within 30 days, or longer via installments, Klarna said in a Thursday press release.

Taaleri increases its ownership in Fellow Finance by 7.3 per cent (Globe Newswire) Rated: A

Taaleri Plc has decided to exercise its option to acquire an additional 7.3% holding in Fellow Finance Oy, as outlined in the shareholders’ agreement signed in 2015. After the transaction Taaleri’s shareholding in Fellow Finance, which offers a crowdfunding platform for companies and for consumers, will increase to 45.7%. The transaction is scheduled to be realized in April-May.

International

BBVA and Indra deliver the world’s first blockchain-supported corporate loan (BBVA) Rated: AAA

BBVA has successfully completed the first global corporate loan transaction using blockchain technology from the negotiation of the deal to its signing, in line with their close collaboration to leverage cutting-edge technologies to streamline business processes.

The pilot enabled the closing of a €75 million loan using a solution developed by BBVA based on distributed ledger technology (DLT). This demonstrates how BBVA continues to incorporate innovative and disruptive technology into its customer solutions, including those products that up to now have seen limited digital innovation, as is the case with wholesale finance.

BANKS VS FINTECHS: THE WAR FOR TALENT (International Banker) Rated: A

Many of these start-ups, moreover, are equipped with enough cash to be able to compete with their banking counterparts on salaries. According to assessments by recruitment site Glassdoor, for example, a London-based software engineer at online lender Funding Circle will earn a base salary of £51,000 on average, which is equal to the salary paid at Goldman Sachs for a similar role. At UBS, that figure is £59,000, while at challenger Monzo Bank it is currently £64,000. Speaking recently to Bloomberg, co-founder and CEO of property lending platform LendInvest, Christian Faes, asserted that between 30 and 40 percent of the company’s hires are from major financial institutions, while banks also account for 100 percent of its small-risk and compliance team. Similar trends are also being reported by UK online lender MarketInvoice Ltd., where three-quarters of its 85 employees have come from either the financial-services or accountancy space.

Source: International Banker

Deserve Raises $ 50 Million in Debt Financing (Finovate) Rated: A

In rebranding his company from SelfScore to Deserve, CEO Kalpesh Kapadia explained “we believe that access is everything and everyone deserves a chance to build a positive credit history. So we are making our products available to all students, U.S., and international, and to all those who seek to build and/or maintain a good credit history.”

And now Deserve is $50 million closer to serving this broader population of potential customers. The Accel-backed fintech has just secured a $50 million debt facility from Keystone National Group to drive growth in account receivables and help “jumpstart” first-time credit owners’ financial journeys.

Fintech for the Financially Excluded? (Stanford Social Innovation Review) Rated: A

At Bamboo Capital Partners, we believe fintech can help low-income people reduce vulnerabilities, build assets, manage cash flow, and increase income, and we have invested as such: In the last couple of years, we have made four equity investments in fintech companies in Colombia, Mexico, Chile, and Tanzania, committing more than $16 million. Our investees are helping democratize access to finance through peer-to-peer lending platforms (KuboFinanciero), promoting access to insurance (ComparaOnline), enabling mobile payments and savings for low-income people through nano deposits (Movii), and providing a smart data platform for emerging market financial institutions (First Access).

APAC

Game-changing technologies at work in Asia Pacific’s real estate (JLL) Rated: AAA

Singapore-based mall operator Capitaland has a chatbot called Sparkle on its app that responds to shoppers’ queries and make reservations or hail a ride from its malls. National Australia Bank is participating in a A$9 million investment round for real estate crowdfunding platform Brick X.

The rise of proptech, however, could be a cause for cybersecurity concerns, as highlighted in JLL’s report Clicks and Mortar: The Growing Influence of Proptech.

Source: Jill Real Views

Coast Labor MP Calls For Ban On Loan Machines (TripleM Network) Rated: A

There are calls for the Berejiklian Government to outright ban payday loan machines cropping up on the Central Coast.

There’s a Cash N Go kiosk at Wyoming offering up to $1000 at a time with minimal checks, while the devices, which look like ATMs, have also been spotted in the Hunter and Illawarra.

Latin America

Brazil’s Central Bank authorizes peer-to-peer lending (Rueters) Rated: AAA

Brazil’s Central Bank on Thursday released rules for credit start-ups that include authorization for peer-to-peer lending, as a way to increase competition in loans in a country with notoriously high interest rates for consumers.

Credit fintechs will be allowed to operate with a minimum capital of 1 million reais ($288,000), according to the new regulation. Peer-to peer lending had not yet been formally authorized in the country. The practice involves lending between individuals through online services.

Canada

Funding for Canadian Fintech Companies Declines 60 Percent in Q1 (Investing News) Rated: AAA

Canadian fintech companies received $88 million in investment over the first quarter of 2018, representing a 60-percent decline, says a new report from PwC.

Total investment in Canada in the first quarter of 2018 was over $1 billion, which is a 52-percent increase over the last quarter. A total of 105 deals were signed as compared to 81 in the previous quarter, representing a 30-percent increase.

Source: PwC

Read the full report here.

IOU Financial Inc. Releases Financial Results for the Year Ended December 31, 2017 (Benzinga) Rated: AAA

IOU FINANCIAL INC. (“IOU” or “the Company”) (TSXV:IOU) announced today its results for the year ended December 31, 2017.

Reached profitability during the year with positive adjusted net earnings of $0.1 millionin Q4.
Surpassed the half-billion loan origination mark with loan originations of $91.3 million(US) for the year.
Increased interest revenue of 8.1% to $14.4 million for the year ended December 31, 2017 vs 2016.
Reduced operating costs (excluding non-recurring costs) by 20.3% to $9.0 million for the year ended 2017.
Raised $3.5 million via a private placement.

BlackChain Solutions Signs LOI With DMG Blockchain Solutions to Bring P2P Lending to the Cryptocurrency Market (Investing News) Rated: B

Under the proposed license, BlackChain will retain exclusive rights for use of the technology for P2P Lending. DMG will be entitled to a royalty on commercial revenues generated by Blackchain using the technology. The parties intend to negotiate and finalize a definitive agreement by May 15th, 2018.

MENA

Global REIT’s crypto-powered real estate investment model will be first of it’s kind… (Global Cryptocurrency Press) Rated: AAA

Moving this structure onto the blockchain, and powering the investments with cryptocurrency now means the average cryptocurrency investor can easily access the real estate investment market. Global REIT will begin in their home of Dubai, a place where real estate is currently exploding, and acquire assets within the U.A.E, before branching out globally.

Authors:

George Popescu

Allen Taylor

Friday November 3 2017, Daily News Digest

News Comments Today’s main news: Kabbage sued over true lender doctrine. Orchard to launch online lending industry page on Bloomberg terminal. KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2017-6. DBRS assigns provisional ratings to SoFi Consumer Loan Program 2017-6. RateSetter changes approach to property loan defaults. Lendy breaks another record. MarketInvoice enters business loan market. Today’s main analysis: FT Partners’ […]

News Comments

United States

Kabbage sued by small business borrower. AT: “Lawsuits will continue to be a thorn in the side of alternative lenders until the true lender debate is resolved.”
Orchard to launch industry page on Bloomberg.
KBRA assigns preliminary ratings to SoFi Consumer Loan Program 2017-6.
DBRS assigns provisional ratings to SoFi Consumer Loan Program 2017-6.
Fintech lenders take larger share of personal loan market, increase risk-return performance. AT: “A TransUnion study shows that fintech lenders have gained an additional 2% of market share since 2016. Way to go!”
FT Partners’ CEO monthly alternative lending market analysis. AT: “As usual, a must-read.”
6th Avenue Capital gets $60M merchant cash commitment. AT: “Congratulations.”
CFPB data-sharing success depends on how guidance is enforced.
Elevate Credit announces Q3 results.
Robinhood launches Spotify-like web platform.
LendingTree releases top customer-rated lenders by loan product for Q3.
Online lenders shrug off scandals to increase market share.
R3 takes on Ripple with cross-border payments on the blockchain.
What type of data is fair in credit models?
Foundation Capital leads CoverWallet Series B round.
Affirm releases app on Apple, Android.
Patch of Land gets new CEO.
Remitly raises $115M.
CityVest enters real estate crowdfunding.
Where do home buyers want to move to and from?
Real estate investing for techies.
How SoFi grew key metric by 100 times. AT: “An excellent interview with former VP of marketing.”
Payday lending rates could drop from 600% to 28%.
Free webinar on small-dollar lending.
Elevate CEO to speak at Techweek Conference in Dallas.
Navient deal coul endanger student loan borrowers, says Warren.
BrightPlan launches hybrid robo.
Avant wants to replace loan officers with robots.
Attune hires new execs.

United Kingdom

China

European Union

Mintos scraps secondary market fees.
Telecom giant Orange gets into lending.
The future of P2P lending. AT: “Infographic.”

International

India

Asia

PeopleFund to change landscape of P2P lending.

Africa

SME failure rate to spike if funding issue is not addressed.

News Summary

United States

Small Business Borrower Sues Kabbage (PYMNTS), Rated: AAA

A small business (SMB) in Massachusetts borrowing funds via marketplace lender Kabbage has sued the platform, igniting new debate in the conversation over the definition of a “true lender,” according to reports in the National Law Review on Tuesday (Oct. 31).

The small business that sued the parties is reportedly arguing that Celtic let Kabbage “rent” that bank charter to originate loans with excessive interest rates, despite Kabbage being the “true lender,” because Kabbage, not Celtic, bears the risk of loss. The plaintiffs are using state usury and consumer protection statutes, the publication said, as well as the federal RICO statute and Lanham Act.

Orchard to Launch Online Lending Industry Page on the Bloomberg Terminal (PR Newswire), Rated: AAA

Orchard Platform’s online lending industry data and insights will be made available to Bloomberg terminal subscribers, providing a wealth of information on an asset class that offers a number of potential investment opportunities.

KBRA Assigns Preliminary Ratings to SoFi Consumer Loan Program 2017-6 (BusinessWire), Rated: AAA

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to three classes of notes issued by SoFi Consumer Loan Program 2017-6 (“SCLP 2017-6”). This is a $591 million consumer loan ABS transaction.

Preliminary Ratings Assigned: SoFi Consumer Loan Program 2017-6

Class	Preliminary Rating	Initial Class Principal
A-1	AA+ (sf)	$315,000,000
A-2	AA+ (sf)	$175,000,000
B	A (sf)	$75,000,000
C	BBB (sf)	$26,000,000

DBRS Assigns Provisional Ratings to SoFi Consumer Loan Program 2017-6 LLC (DBRS), Rated: AAA

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of notes issued by SoFi Consumer Loan Program 2017-6 LLC (SCLP 2017-6):

— $315,000,000 Class A-1 Notes at AA (sf)
— $175,000,000 Class A-2 Notes at AA (sf)
— $75,000,000 Class B Notes at A (sf)
— $26,000,000 Class C Notes at BBB (sf)

FinTechs Taking Larger Share of Personal Loan Market While Increasing Portfolio Risk-Return Performance (Globe Newswire), Rated: AAA

FinTech lenders continue to gain market share in the personal loan space while maintaining their portfolio risk-return performance. Results from TransUnion’s “Fact versus Fiction: FinTech Lenders” study were released today during the Digital Lending + Investing Conference in New York.

To better understand the personal loan market, TransUnion studied unsecured personal loan originations over the past several years, as well as more detailed portfolio performance between 2014 and 2016. The analysis differentiated between those loans issued by banks, credit unions, FinTechs and traditional finance companies to compare performance across lender types. The study found that the balance share of these loans originated by FinTechs had dramatically risen in recent years. At the end of 2016, FinTechs represented 30% of all personal loan balances, up from about 4% in 2012 and less than 1% in 2010. This trend continued through the first six months of 2017, with FinTechs now representing 32% of personal loan balances.

Share of Originated Personal Loan Balances

Timeframe/Lender	Banks		Credit Unions		FinTechs		Traditional Finance
2017 (Through June)	29	%	24	%	32	%	15	%
Full year 2016	26	%	23	%	30	%	21	%
Full year 2015	27	%	22	%	28	%	23	%
Full year 2012	35	%	32	%	4	%	29	%

As part of this study, TransUnion developed a coarse risk-return metric*. While loans provided by FinTechs experienced higher delinquencies than competitors, specifically within the lower credit risk tiers, TransUnion’s study found that they generated effective portfolio risk-return ratios that exceeded those of banks and credit unions. As of Q2 2017, FinTechs averaged an 8.7% return compared to 6.7% for banks and 6.3% for credit unions. Traditional finance companies average the highest return at 11.5%.

The study demonstrated how FinTechs focus their originations in the near prime and prime risk tiers. As of Q4 2016, 59% of FinTech balances originated were in those two risk tiers. This is slightly higher than the 57% rate in Q1 2014.

Personal Loans Continue to Grow

The study also observed general personal loan trends. Personal loan total balances and consumer participation have both grown considerably. As of Q2 2017, 16.1 million consumers possessed a personal loan, compared to 14.8 million in Q2 2016 and 13.1 million in Q2 2015. Just five years ago in Q2 2012, approximately 9.8 million consumers had a personal loan. Total outstanding balances have risen from about $45 billion in Q2 2012 to $106 billion in Q2 2017.

While conventional wisdom holds that personal loan borrowers fall in the subprime risk bucket, TransUnion data through Q2 2017 show that personal loan adoption is greatest in the near prime (26%) and prime and above (49%) risk levels. Subprime constituted only 25% of such loans.

The most recent TransUnion data show that the number of lenders issuing personal loans has decreased in recent years from 7,245 in 2012 to 6,896 in 2015 and 6,680 in 2016. However, the number of lenders issuing large volumes of personal loans (at least 10,000 annually) has nearly doubled in the last 5 years from 68 in 2012 to 128 in 2016.

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

October was another very active month for the FT Partners team as we announced seven significant FinTech transactions. We are pleased to announce our role advising:

Source: FT Partners

Download the full report here.

6th Avenue Capital Secures $ 60 Million Commitment For Merchant Cash Advance Funding (AltFi), Rated: A

6th Avenue Capital, LLC (“6th Avenue Capital”), a provider of small business financing solutions, announced today its securement of a $60 million commitment from a large institutional investor. The investor made their commitment based on 6th Avenue Capital’s industry-leading underwriting, compliance standards and processes. 6th Avenue Capital will draw from this commitment to offer merchant cash advances to small businesses through its nationwide network of Independent Sales Organizations (“ISOs”) and other strategic partnerships, such as banks and small business associations.

Success of CFPB data-sharing guidance relies on how it is enforced (American Banker), Rated: A

This month, the Consumer Financial Protection Bureau took an important step toward making that potential a reality with its release of consumer-authorized data-sharing and aggregation principles. In the principles, the bureau reiterated consumers’ right to share data, recognizing that connectivity is the underlying magic fueling the consumer fintech revolution. The guidelines will promote innovation, competition and consumer control.

Data sharing often requires consumers to provide their bank account usernames and passwords to third parties. In the guidance, the CFPB clarified that granting consumers access to their data does not necessarily mean sharing login credentials. At the same time, the bureau made it equally clear that if banks and others want to prevent the sharing of credentials, they need to find another, more secure way to provide access. Both banks and data aggregators should have an incentive to eliminate the use of credentials.

Third, banking regulators could update their third-party vendor risk management guidelines to clarify the kinds of due diligence banks are required to conduct on parties with whom they share data.

Elevate Credit Third Quarter 2017 Earnings Release Available on Its Investor Relations Website (CNBC), Rated: A

Elevate Credit, Inc. (NYSE:ELVT) (“Elevate” or the “Company”), today announced financial results for the third quarter ended September 30, 2017. Elevate has posted its third quarter earnings release to its Investor Relations webpage at
Fintech Brokerage Robinhood Launches Spotify-Like Web Platform (Benzinga), Rated: A

Robinhood, the fintech brokerage that offers commission-free trading through a mobile app, announced Wednesday it’s launching a web platform.

Bhatt says the web trading platform is primarily geared towards informing people who are interested in investing about the stock market. However, the company faces an interesting product design challenge, in that about half of its users have invested previously on another platform.

LendingTree Announces Top Customer-Rated Lenders by Loan Product for Q3 2017 (Business Insider), Rated: A

LendingTree®, the nation’s leading online loan marketplace, today released its quarterly list of the top customer-rated lenders on its network based on actual customer reviews for the third quarter of 2017. The list features the top lenders in multiple loan product categories, including Mortgages, Personal Loans, Business Loans and Auto Loans, all of which are included in LendingTree’s online loan marketplace.

Mortgage Category

#1 Winner:
Busey Bank

Personal Loans Category

#1 Winner:
Best Egg

Auto Loans Category

#1 Winner:
RefiJet

Online lenders shrug off scandals to increase US market share (Financial Times), Rated: A

The online lenders set up to upend US retail banking in the wake of the financial crisis are still expanding in spite of scandals and setbacks at some of the biggest names in the business.

Financial technology groups originated $15bn of personal loans in the first half of the year, according to figures published on Thursday by TransUnion, the credit bureau whose database covers the borrowing habits of 220m consumers.

That was almost a third of the total US market for new personal loans — a bigger share than banks or credit unions or other traditional consumer finance companies — and compares with just 4 per cent in 2012 and 28 per cent in 2015.

R3 to take on Ripple with cross-border payments blockchain (American Banker), Rated: A

R3 is working with 22 of its member banks to build a real-time, cross-border payments solution on Corda, the consortium’s “blockchain inspired” distributed ledger.

The banks include U.S. Bank, TD Bank, Barclays, BBVA, CIBC, Commerzbank, DNB, HSBC, Intesa, KBC, KB Kookmin Bank, KEB Hana Bank, Natixis, Shinhan Bank and Woori Bank, R3 said Tuesday.

What type of data is fair in credit models? (American Banker), Rated: A

It’s long been a mantra in the fintech community: Traditional underwriting models that rely heavily on conventional credit scores leave out people who haven’t built up a credit history. A percentage of these people are creditworthy, but without a history to go on, the credit bureaus haven’t created profiles of them yet.

To assess whether unscored people can repay loans, lenders are increasingly looking at “alternative data” — information that comes from someplace besides a traditional credit bureau that can help predict how a potential ….

Foundation Capital Leads CoverWallet Series B Financing (Foundation Capital), Rated: A

Which is why we’re excited to have led the Series B for CoverWallet, an online insurance broker for small businesses which is upending the industry.

Small-to-medium business (SMB) insurance is a profitable, but highly fragmented $100 billion/year market. At the present, SMB insurance is sold through 40k+ brick-and-mortar insurance brokers, which employ 500k+ agents and move 99% of premiums. The typical SMB insurance application has 27 pages, and is completed while having “the talk” with the agent, which will include many upsell & cross-sell attempts. The typical SMB insurance quote takes 7-10 days. For SMB owners, this process is time consuming and painful.

Affirm Now on Apple and Android (NewsCenter.io), Rated: A

Affirm, a popular web service that allows users to buy online and pay off their purchases in fixed monthly payments, has launched their Android and iPhone app.

Remitly Raises up to $ 115M in Series D Funding (FINSMES), Rated: A

Remitly, a Seattle, WA-based independent digital remittance company, is to raise up to $115m in Series D funding.

The financing – subject to applicable third party and regulatory approvals – will be led by Naspers’ fintech investment division PayU, a global online payment service provider, with participation from existing investors Stripes Group, DFJ, and DN Capital. In conjunction with the funding, Laurent le Moal, PayU CEO, will join Remitly’s board of directors.

New, New Real Estate Crowdfunding Platform (Business Insider), Rated: A

When you see prominent investors such as George Soros, Larry Silverstein and Goldman Sachs participating in the real estate crowdfunding business – it means something. So, let’s follow the smart money. The real estate crowdfunder that everyone is talking about now is CityVest, which claims a top pedigree of founders and investors. And CityVest.com is living up to its mission – Smarter Real Estate Investing.

CityVest provides wealthy individuals with online access to institutional real estate funds and the higher rates of return they generate.

Which States Do Home Buyers Want to Move to—and From? (Realtor.com), Rated: A

Prospective home buyers overwhelmingly want to head south, according to a recent LendingTree analysis. The online loan marketplace looked at the 1.5 million mortgage requests it received from October 2016 to October 2017 to come up with the results.

Which state do home buyers most want to move to?

But of all the Southern states, which was the most desirable? Drumroll please … that would be Florida. The Sunshine State was the top destination for folks from 18 states, or about 9.14% of those looking at loans on LendingTree.

Which state do home buyers most want to leave?

Vermont residents were the most likely to want to hightail it out of the Green Mountain State. Despite its popular ski resorts, only about 76% of locals were looking for in-state mortgages.

Which state do home buyers most want to stay in?

Texans were the most happy of any state’s residents to stay put. About 92.5% of folks looking for potential mortgages wanted to stay within Texas, according to LendingTree’s report.

Real Estate Investing For The Tech-Minded (Forbes), Rated: A

So as a techie, how does one go about evaluating not just the real estate but also the platform offering the investment?

That’s why it’s critical for real estate investing platforms to be willing and able to answer questions from prospective investors — even those would-be investors without a ton of prior real estate knowledge. These companies should take a page out of Amazon’s book and develop a customer obsession.

Be leery of any cliché claims of leveraging big data to automate underwriting. Underwriting is as much science as it is intuition/experience, and the best commercial real estate professionals have a carefully tailored mix of both.

In the long run, the track records of the platforms will speak loudest.

How SoFi 100X’ed Growth of Their Key Metric — w/ former VP Marketing Steven Dupree (Reforge), Rated: A

Steven Dupree was SoFi’s first marketing executive and VP of marketing for 3 years. He and his growth-oriented team took SoFi from originating 10 loans a day to over 1000.

The three most basic ingredients for being able to succeed in FinTech are:

1) “Good enough” technology

2) Tremendous capital markets expertise

3) Some sort of customer acquisition strategy

Companies like Experian and Equifax know if you have loan balances, and specifically they know if you have student loan balances. We sent pre-screened offers to prospects with outstanding student loan debt through physical mail about how SoFi could help them with those loans.

Plan Would Take Payday Lending Interest Rates From As High As 600% to 28% (StateNews.org), Rated: A

Several community groups rallied to show their support for a bipartisan bill they think is needed reform against predatory lending.

The bill would cap the interest rate of payday lenders at 28% and close any loopholes around that cap.
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Filene, QCash Financial, CFSI Offer Free Webinar on the Benefits of Small-Dollar Lending (BusinessWire), Rated: A

QCash Financial, a CUSO providing automated, cloud-based, omni-channel small-dollar lending technology for financial institutions, announces it will co-host a free webinar with Filene Research Institute and the Center for Financial Services Innovation to discuss the opportunities for credit unions in offering small-dollar lending on November 14.

During the webinar, QCash Financial will address our industry’s impact and opportunity to deliver small dollar loans. QCash Financial, the Center for Financial Services Innovation and Filene will collaborate to discuss the omni-channel lending solution that serves members in search of small, short-term unsecured loans.

Registration information can be found at filene.com. The webinar is scheduled from 2 p.m. CST / 12 p.m. PST until 3 p.m. CST / 1 p.m. PST.

Ken Rees, CEO of Elevate, to Speak at Dallas Techweek Conference (BusinessWire), Rated: A

Ken Rees, Chief Executive Officer at Elevate, a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, will speak on a panel session at Dallas Techweek on Thursday, November 2, at 9:15am CT. The panel will focus on data intelligence, breaking down the hype around data science, and exploring ways companies can turn that hype into actionable business intelligence.

Rees will be joined by local tech talent and founders, including Clarisa Lindenmeyer, Chief of Strategy/Partnerships at Launch DFW; Sravan Ankaraju, President of Divergence.Academy, CEO of Divergence.AI; Dave Copps, CEO of Brainspace; and Steve Hebert, Co-Founder & CEO of Nimbix, Inc.

Elizabeth Warren Warns: Navient Deal A Danger To Student Loan Borrowers (International Business Times), Rated: A

U.S. Sen. Elizabeth Warren warned Wednesday that the nation’s largest student loan servicer has positioned itself to stealthily strip consumer protections from unwitting borrowers across the country. In an interview with International Business Times, she also said the loan servicer, Navient, should not be permitted to be a government contractor handling student loans on behalf of the U.S. Department of Education.

The Massachusetts Democrat was sounding an alarm about Navient’s recent acquisition of online lender Earnest. She said the transaction opened up the possibility that the company will try to boost its profits by selling debtors on refinancing their current federal student loans with the company’s own private loans — the kind that she said to do not necessarily permit income-based repayment options.

BrightPlan Launches ‘Hybrid-Robo’ Advisory Service (Plan Adviser), Rated: B

A new robo-advisory platform has hit the market, under the moniker BrightPlan.

Important to note, according to the firm, clients are not required to invest through BrightPlan in order to receive financial planning advice. They can manually input external account balances or link external accounts from more than 10,000 financial institutions to BrightPlan, which will monitor goal progress and provide advice to stay on track.

Will a robot take your job? These startups hope so (PitchBook), Rated: B

Avant wants to replace loan officers

Avant has created an online lending platform that uses Big Data and machine learning algorithms to streamline the loan decision process helping borrowers consolidate debt through personal loans. The company, led by CEO and co-founder Al Goldstein (pictured), raised $325 million in Series E financing back in September 2015, with General Atlantic leading a round at a $2 billion valuation.

Avant isn’t alone, with competitors like publicly traded Lending Club (NYSE: LC) and VC-backed Kabbage using a similar strategy: automating the credit creation process.

Dreiling and Stamets join Attune (Royal Gazette), Rated: B

Two new appointments have been made at data-enabled platform Attune, the company jointly created last year by American International Group, Hamilton Insurance Group and Two Sigma Investments.

Martha Dreiling takes on the role of head of analytics and corporate operations, while Richard Stamets has been appointed head of underwriting strategy.

United Kingdom

RateSetter changes approach to property loan defaults (P2P Finance News), Rated: AAA

RATESETTER is changing the way it deals with defaulted property development loans, which could involve taking control of the project and completing it itself.

The peer-to-peer lender said on Wednesday that if a property development is only partially completed and has gone into default, it will now examine whether maximum value would be delivered via an immediate sale or by completing the development and then selling it.

Lendy Update: Breaks Previous Monthly Loan Repayment Record; Recovers £20 Million in October 2017 (Crowdfund Insider), Rated: AAA

UK-based peer-to-peer property platform Lendy announced on Thursday it has broken all previous records for loan repayments generated in any one month, recovering £20 million in total in October 2017 alone. The online lender reported that this exceeds its previous September 2016 high of £14.5 million. The record figure includes repayments on P2P loans on three caravan parks in Christchurch, Dorset, totaling £7.6 million and a Manchester mill of £1.35 million.

This UK fintech is taking on big banks with business loans — and one key EU law is driving it (CNBC), Rated: AAA

A digital invoice finance platform in the U.K. will provide business loans to its customers for the first time, it was announced Wednesday.

The firm said it would expand into the business lending market, pitting it against established players such as U.S. listed peer-to-peer lender LendingClub and Britain’s Funding Circle. The latter raised £82 million ($100 million) in funding from venture capital investors earlier this year.

CEO and co-founder Anil Stocker told CNBC that MarketInvoice will take advantage of an incoming European Union regulation called the Second Payment Services Directive (PSD2), which forces banks to open up data about their customers to third party companies.

Citigroup Bets Millions on U.K. Mortgage Lender (Bloomberg), Rated: A

Brexit may be roiling Westminster and inflating prices on supermarket shelves, but don’t tell that to financial institutions eyeing the U.K.’s burgeoning online-lending industry.

In the latest sign of confidence in the sector, Citigroup Inc. has agreed to provide a fintech firm called LendInvest Ltd. with funding for mortgages, the startup said in a statement Wednesday.

Citi Provides Warehouse Facility to LendInvest in Buy to Let Expansion (Crowdfund Insider), Rated: A

LendInvest, a Fintech marketplace platform for property finance, has agreed a long-term warehouse facility with Citi boosting its entry into the UK’s £40 billion buy-to-let (BTL) market.

The perils and profits of of peer-to-peer lending (The Spectator), Rated: AAA

‘We’re taking business from the banks, from the invoice discounters and from the traditional suppliers of finance, in ever larger amounts,’ says Angus Dent, chief executive of ArchOver, a P2P lender that launched in September 2014. ‘We only lend to companies with strong balance sheets and we only lend against accounts receivable (ARs). We will loan up to 80 per cent of the value of the ARs. Once the loan is made the ARs must be maintained at 125 per cent of the value of the loan, monitored by us on a monthly basis. This provides a quickly realisable asset for our investors in case the borrower gets into difficulties over repaying for the loan.’ The minimum amount that ArchOver expects clients to invest is £1,000 per project.

For Anil Stocker, chief executive and co-founder of MarketInvoice, P2P lending against receivables (amounts owed to a business) offers a particularly interesting investment class ‘because it’s of short duration, a liquid product, with invoices typically taking 45 to 50 days to be paid.

Source: The Spectator

Lenders must help brokers meet specialist challenge – LendInvest (Mortgage Solutions), Rated: A

IMLA found that lending by specialists has grown by an average of 19% each year from 2009 to 2016, with a total of almost £17bn lent last year. That’s enormous growth from a sector that was particularly badly dented by the effects of the financial crisis.

Even with these enormous annual increases in lending, the market share of these specialists remains modest. According to IMLA it has grown from 3.5% in 2009 to 6.8% in 2016, and that still lags significantly below the levels seen before the onset of the financial crisis.

UK fintechs take market share from dominant high-street banks (Financial Times), Rated: A

Britain’s leading financial technology start-ups are celebrating a record-setting week as they accelerate their push to take market share from high-street banks in areas such as payments and lending.

TransferWise will on Thursday announce that it has collected $280m from investors, a record fundraising round for a UK fintech, to finance expansion of its cross-border payments service into more countries around the world.

Meanwhile, Funding Circle has for the first time outstripped net new lending by the major high-street banks to UK small businesses, according to figures released by the Bank of England this week and data provided by Europe’s largest peer-to-peer lender to SMEs.

Britain’s small businesses bank on alternative finance options (Finextra), Rated: A

Of 1000 small biz owners quizzed by WorldPay, more than half say that they are planning for growth in 2018, yet 52% admit to being concerned that the traditional routes to finance, such as bank loans, are not going to be as easily available in the coming year.

While 21% of business owners aged 44 or under say they’re still most likely to apply for a bank loan when looking for funding, nearly as many respondents (17%) say they’re more likely to look at crowd-funding, while 11% prefer P2P lending, and six per cent say they favour business cash advance.

HSBC unveils robo-advisor plans (Business Insider), Rated: A

HSBC’s head of retail wealth, Dean Butler, provided his perspective on automated advice, and the bank’s plans for new products in the area, at the UK Robo-Advice Innovation Forum on Wednesday, attended by BI Intelligence.

Source: Business Insider

Landbay & Buy to Let Club Complete Lending to New Southgate Building in Less Than Two Months (Crowdfund Insider), Rated: A

Earlier this week, Landbay and Buy to Let Club completed lending to a new building in Southgate, a suburban area of north London, in under two months. The initial case was reportedly submitted on the broker portal by Buy to Let Club on August 24th.

Fintech firm MarketInvoice enters business loans market (Asset Finance International), Rated: A

Fast-growing fintech firm MarketInvoice has launched a new business loans service that expands its solutions beyond invoice finance.

Businesses will now be able to obtain unsecured business loans from £10,000 to £100,000 over a 12-month term, with no early repayment fees.

By expanding into the £35 billion business loans sector, MarketInvoice aims to increase support for businesses which need working capital around their invoice finance requirements.

Natural evolution (P2P Finance News), Rated: A

Stuart Lunn, co-founder and chief executive of Edinburgh-based P2P business lender LendingCrowd, sees the benefits of both.

“For P2P investing to become truly mainstream, it’s essential to simplify the products on offer and enable greater comparability between opportunities,” he asserts.

“Passive products force greater diversification and I think that will benefit the sector as a whole.”

Funding Circle and RateSetter make LinkedIn’s ‘Top 25’ companies list (P2P Finance News), Rated: A

Funding Circle and RateSetter have been placed at number eight and number 21, respectively, in the ‘LinkedIn Top 25 Companies – Startups’ list, which was released on Thursday morning.

Funding Circle was the highest-ranking P2P platform, and it was praised for funding more than 28,800 companies over the past seven years, with more than £2.8bn allocated to borrowers.

CEO switch for online lender Patch of Land (AltFi), Rated: A

Jason Fritton returns to his former post as CEO, as Paul Deitch steps down.

P2P firm Assetz continues profitability (AltFi), Rated: A

Assetz Capital notches seven figure pre-tax profit during the six months from April to September 2017.

Durham’s Atom Bank named by LinkedIn as one of UK’s top 25 start-ups (ChroncleLive), Rated: A

A North East company has been named by social media site LinkedIn as one of the country’s 25 most disruptive companies.

Durham ’s Atom Bank, which is shaking up the banking world with its mobile-based app and personalised services, is named alongside companies including Deliveroo, Uber and Airbnb, on a list of start-ups which LinkedIn says are changing the UK business landscape.

Online retailer Asos offers buy now pay later option with Klarna (Finextra), Rated: B

Today, leading European payments provider Klarna has announced a UK partnership with ASOS – one of the world’s leading destinations for fashion loving 20-somethings.

The news means that UK customers with the iOS or Android ASOS app can now use Klarna’s ‘Pay later’ solution to pay for their items up to 30 days later – with no interest or fees.

Alternative lender Sancus announces new managing director (AltFi), Rated: B

The alternative finance services firm has announced that Dan Walker will take over from current MD Caroline Langron in January 2018.

The group is part of GLI Finance, which acquired peer-to-peer lending platform FundingKnight in 2016. Earlier this year, FundingKnight was moved into Sancus BMS Group, was awarded full FCA authorisation in July.

China

Chinese Listed Banks still create more profits than BAT (Xing Ping She), Rated: AAA

In recent years, with the rise of Internet financial and the change of macroeconomic environment, the traditional commercial banks did go through a “severe winter”. Since 2011, banking climate index has been down all the way. It is not until 2017 that the new season of spring is coming.We selected 38 listed Chinese Banks in exchange of Shanghai, Hong Kong and Shenzhen as the performance comparison samples, and analyzed their comprehensive profitability based on the financial data of the first half of 2017.During this time, the total net profit of the 38 banks selected in this paper was 823.93 billion RMB, up 4.14 percent from the same period last year. The chart below described the profit data of all the 38 banks in the first half of 2017.

Profitability Banks Ranking
Among the 38 listed banks, we can also find the Top10 earning banks as follows, including 5 large-scale commercial banks and 5 joint-equity commercial banks. In addition, the net profit of Ping An Bank and Beijing Bank has reached the threshold of 10 billion RMB.

Chinese listed banks VS internet giants in profitability
According to the total value and earning data of the selected 38 listed banks as follow, their total market capitalization is about 10 trillion RMB, and the total net profit was 823.93 billion RMB. That means the net profit ratio was about 0.082.

As for the BAT giants which are closely watched in the Internet industry, the three Internet companies are worth about 6.5 trillion RMB in total for the first half of 2017, and the net profit reached 52 billion RMB. That means their net profit ratio was just 0.008, much lower than the listed banks. Obviously, Banks still have an advantage over emerging Internet companies in terms of profit creation.

In fact, research shows that the rise of the Internet financial companies has little impact on the profitability of large commercial Banks and rural commercial Banks, while has a great influence on city commercial Banks, and Joint-stock commercial Banks have been promoted instead because they can seize the Internet financial opportunities. In general, though the development of Internet finance has brought adverse effects on the profitability of commercial Banks, and also forced it to actively adjust the profit model and promote the diversified development of the profit structure.

Data resource: Wind Database

Another Chinese P2P lender! Senmiao Technology files for a $ 20 million IPO (NASDAQ), Rated: A

Senmiao Technology, a early-stage Chinese marketplace for peer-to-peer lending, filed on Monday with the SEC to raise up to $20 million in an initial public offering.

China pours millions into facial recognition start-up Face++ (Financial Times), Rated: A

Chinese facial recognition start-up Megvii Face++ has raised $460m in an investment round led by a government fund, as the country pours money into efforts to become an artificial intelligence superpower to rival the US.

The Beijing-based Face++ said on Wednesday that it had raised money from China State-Owned Venture Capital Fund and the China-Russian Investment Fund, which is backed by the sovereign wealth funds of both countries. Private investors including Alibaba’s payments affiliate Ant Financial also participated.

Chinese listed company transferred shares of Wei Dai Network, making over 1B RMB (Xing Ping She), Rated: A

On October 17, Handing Yuyou(300300.SZ), a listed company that was suspended from trading, began to transfer its assets of internet finance continuously. On October 30th, the company announced that it would transfer a 2 percent stake in the Wei Dai Network for 170m RMB, and then they announced to transfer a 1.5 percent stake in the Wei Dai Network for 127.5 million RMB. Through the two deals, Handing Yuyou(300300.SZ) will receive nearly 300 million RMB in cash. Deducting the previous investment costs, Handing Yuyou(300300.SZ) won over 100 million RMB in less than half a year. In the past three years, according to the company’s history of the investment in Wei Dai Network, we can find that the company has earned at least 10 times to the original investment.

The transferee of this transaction is Beijing Qianshan Xinyuan Investment Management co., LTD. According to the public information, Beijing Qianshan Xinyuan Investment Management co., LTD. was established in 2015 with the registered capital of 10 million RMB. Its parent company, Qianshan Capital Management co., LTD is a private company registered in 2016. The parent company also have the other several subsidiary corporations, including Qianshan Venture Investment Management co., LTD., Beijing Qianshan Wealth Management co., LTD., etc. Currently, the parent company has a total capital size of 1 billion RMB.

European Union

Mintos Scraps Secondary Market Fees (P2P-Banking), Rated: AAA

Starting from today, November 1, 2017, we have removed the 1% fee for selling loans on the secondary market of the Mintos marketplace. This means from now on, there are absolutely no fees for investing through Mintos.

Source: P2P-Banking

Orange is the new bank? Telecoms giant ventures into lending (Business Insider), Rated: A

Telecoms giant Orange launches its own bank on Thursday, aiming to win 25 percent of France’s online banking market by capitalizing on the rising use of smartphones to steal share from established lenders with inferior technology.

Orange is starting from a small base – Coisne says it has 25,000 customers have expressed interest ahead of the launch, a tiny fraction of the company’s 21 million mobile clients. But the timing of its entry gives some room for optimism.

In France, 793.4 million online banking e-payments were made last year according to the European Central Bank, up from 586.2 million in 2014.

INFOGRAPHIC: FINTECH AND THE FUTURE (Irish Tech News), Rated: A

The GetLine Network a decentralized P2P lending platform, recently reached out to us with one of their infographics on FinTech, and we thought it was appropriate and timely for our audience.

Financing and loans are even being re-thought of with new forms of capital raising, such as ICOs, crowdsourcing/crowdfunding, and P2P lending, making banks and legacy financial institutions even less needed.

Source: Irish Tech News

International

Lendio Gives supports Kiva borrowers (Bankless Times), Rated: AAA

Small business loan marketplace Lendio announced it has provided more than $25,000 in loans to over 1,200 small business owners in 75 countries around the world through its employee-based Lendio Gives program in partnership with Kiva.

The top five sectors supported by Lendio’s funding are agriculture, food, retail, clothing, and services. Of the loans Lendio has funded, 86 percent have gone to women or women’s groups. The top countries Lendio has supplied funding to include Zimbabwe, Peru, Haiti, the Democratic Republic of Congo, Ecuador, the Philippines, Kenya, El Salvador, and Senegal.

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

Thincats reached the milestone of 250 million GBP loans originated since launch.

This month I added Bolden.

Source: P2P-Banking

Fintech and Cross-Border Payments (IMF), Rated: AAA

To gauge the IMF’s most recent analysis: A speech last month, at the Bank of England, by the IMF’s Managing Director—Christine Lagarde—analyzed potential challenges posed by fintech innovations to central banking.

In my remarks here today—focusing on implications of fintech for cross-border payments—I’ll explore three broad areas: [1]
- First, a sketch of the economic framework on how fintech applications will affect financial services and the market structure.
- Second, the current landscape of cross-border payments, and the possible evolution of cross-border payment systems; and
- Third, the role of central banks, themselves, and the possible reasons for them to issue their own digital currencies.
Alternatives assets such as P2P loans to double in volume by 2025 (AltFi), Rated: B

Alternative asset classes – in particular, real assets, private equity and private debt – will more than double in size, reaching $21.1trn by 2025, accounting for 15 per cent of global AuM as investors diversify to reduce volatility and target specific return and risk outcomes, according to research by PwC.

Zelle adds major tech partners to roster (Banless Times), Rated: B

Zelle – a new, real-time payments network from bank-owned Early Warning Services – has added ACI Worldwide, CGI, D3 Banking Technology, and IBM to its growing list of technology partners.

India

One Size Fits All? Regulating Peer-To-Peer Lending Platforms (India Corporate Law), Rated: A

Briefly, as per the Master Directions:
- It is now mandatory for entities proposing to undertake this business to be registered as ‘NBFC-P2P Lending Platforms’ with the RBI (NBFC-P2P). To ensure business continuity, existing players have been given a period of three months to apply for this licence. Applicants will be scrutinised for scalable and secure technological capabilities, financial standing as well as fit and proper management.
- Fundamentally, the NBFC-P2P is expected to operate only as an intermediary and not undertake any lending activities itself or hold any funds of its participants (lenders or borrowers) on its books. Towards this end, an escrow mechanism for movement of funds has also been envisaged.
- The exposure of each lender and loans (not exceeding a three year maturity period) availed by each borrower across all NBFC-P2Ps has also been capped at INR 10 lakhs, with each borrower not permitted to avail more than INR 50,000 per lender.
- In addition, directions also prescribe that NBFC-P2Ps adopt minimum standards of transparency, disclosure requirements and fair practices.
Impact on Aggregators
- To the extent P2P lending platforms are servicing individuals and/or unregulated entities, there is merit in regulating such operators to contain any systemic risks. However, there are existing players in the market who primarily service regulated financial institutions (viz. banks and NBFCs) as lenders. The Master Directions fail to recognise this distinction.
- Separately, banks and NBFCs today use distribution channels including web-based loan aggregators.
SBI partners with Primechain Technologies and Intel to adopt blockchain-driven KYC (The Times of India), Rated: A

PrimechainTechnologies announced on Wednesday that the country’s largest bank, State Bank of India (SBI), will adopt blockchain technology to manage the mandatory Know Your Customer (KYC) details in its system. Intel Corporation will act as a technology provider to facilitate the implementation.

Asia

P2P lender PeopleFund aims to change landscape (The Investor), Rated: A

Korea’s accumulated peer-to-peer lending reached 1.47 trillion won (US$1.31 billion) by end-September as more and more borrowers are embracing the new, more convenient platforms for connecting with investors.

Considering that the figure accounts for only 60 members of the Korea P2P Finance Association among the industry estimates of 130 lenders, the market is actually bigger. It also reflects a sharp upward trend; back in June 2016, when the association first began compiling data, accumulated loans granted by 22 members stood at just 152 billion won.

Against this background, Kim founded PeopleFund in March 2015. Since then, the bank has been on a roll. On Nov. 1, its accumulated loans stood at 121 billion won, compared to 19 billion won in February. It’s the No. 3 player in the local industry.

Africa

SME failure rate set to spike unless funding issue is addressed (Engineering News), Rated: AAA

The South African SME sector is set for a major crisis unless access to adequate business funding can be ensured as a matter of urgency. This was the key takeout from the just-released Key Funding Challenges for South African SMEs 2017 report developed by online lenderLulalend.

“76% of respondents to our national survey of SMEs said they had undergone a tedious months-long paperwork-heavy process in applying for businessfunding from traditional lenders, only to have their applications denied.

Considering access to credit was the #1 business challenge for nearly three out of every five SMEs surveyed, this disconnect between the needs of business owners and the lenders that have traditionally supported them is creating conditions of high risk and volatility.”

Authors:

George Popescu

Allen Taylor

Friday September 29 2017, Daily News Digest

News Comments Today’s main news: LendingClub completes 2nd self-sponsored loan securitization with $323M deal. Funding Circle restates IPO ambitions. Robo.cash tops 2M Euro, 1000th investor. AutoGravity surpasses $1B USD in finance amount requested. Singapore banks closing cryptocurrency, payments accounts. Today’s main analysis: Risk evaluation of commercial PACE securitizations differs from residential deals. Goldman Sachs’ aggressive push into consumer banking. Today’s […]

News Comments

United States

LendingClub completes 2nd self-sponsored loan securitization.
Orchard updates Lendscape graphic. AT: We can see a growing number of institutional investors and originating banks, not to mention a push into new areas of lending with expanding categories of originators.”
Risk evaluation of commercial PACE securitizations differs from residential deals.
Top sources of small business financing based on approval rates. AT: “It looks like the year goes to institutional investors and big banks. Credit unions and alternative lenders are in decline. I guess this means you can innovate all you want, money still talks.”
AutoGravity surpasses $1B USD in finance amount requested. AT: “AutoGravity, by far, is doing the most interesting thing in the area of auto finance. This is a huge milestone. Congratulations, with the expectation to see more great achievements from this young startup.”
ID-verification firms capitalize on Equifax’s failure. AT: “This is a natural consequence, and I expect to see more alternative ID verification products hit the market in the coming year. Companies that take their time and do it right have a greater chance at success, long-term.”
OCC Fintech Charter undermines our authority, says NY Department of Financial Services. AT: “The struggle for control over regulation between the states and the federal government continues to heat up. Of course, states have no authority not granted by the Constitution, and that authority is subservient to the federal government in most cases. I suspect the federal government will win this battle, though it will take a few years.”
Stockpile raises $30M.
Chime raises $18M for no-fee mobile banking.
Shinola uses Affirm’s installment plan.
Is marketplace lending maturing?
Fintechs march to their own drum.
McHenry, Booker introduce bill to automate income verification.
Plug and Play selects winter 2017 batches.
Wunder makes Rich Mauro director of capital markets.

United Kingdom

Funding Circle CEO restates IPO ambitions.
Funding Circle is onto winning strategy.
Funding Circle post year-end highlights.
Ranger Direct Lending fund expecting nearly 50% dividend cut.
LendInvest wins most valuable tech company award.
Onfido raises $30M for regtech startup.
Wonga records 65M GBP loss. AT: “This is less than the loss in the previous year.”
How fintech is disrupting traditional banking models.
Finance Innovation Lab appoints new trustees.
How and where to get crowdlending funds for your business.

China

More Chinese fintech firms expected to pursue Hong Kong IPO. AT: “No doubt. If it worked for one company, it could work for another. Cattle follow the lead bull.”
Why ZhongAn Insurance is successful.
KKR invests in Shenzhen Suishou Technology.

European Union

Robo.Cash tops 2M Euro with 1000th investor. AT: “Congratulations.”
The end of fintech is nigh, says Twino founder/CEO.

International

Goldman Sachs’ entry into consumer banking is aggressive.
Goldmoney adds bitcoin, ethereum.
High net worth individuals would use Amazon for wealth management. AT: “I find this quite interesting. Around the globe, HNWs would use Google, Apple, Facebook, and Amazon (GAFA) for wealth management. This sounds like an invitation for the Big 4 to intro their own robo-advisors. Who knows? It could happen.”

Australia

India

Asia

News Summary

United States

LendingClub Completes 2nd Self Sponsored Loan Securitization with $ 323 Million Deal (Crowdfund Insider), Rated: AAA

LendingClub (NYSE: LC) has sponsored and contributed to its second securitization deal following the the last successful self sponsored deal this past June. The “Consumer Loan Underlying Bond” (CLUB) Credit Trust 2017-P1 (CLUB 2017-P1) issued $323.1 million in prime notes backed by consumer loan assets originated via the LendingClub platform. This is the sixth securitization supported or sponsored by LendingClub, and the fourth rated securitization of LendingClub facilitated loans overall. LendingClub described the deal as further expanding investor access.

LendingClub reported the transaction was backed by approximately $350 million of collateral and includes $217.3 million of Class A notes rated “A-(sf)”, $51.0 million of Class B notes rated “BBB (sf)” and $54.7 million of Class C notes rated “BB (sf)”.

Orchard’s Online Lending Ecosystem Update: “Lendscape” (Crowdfund Insider), Rated: AAA

Orchard Platform, the nexus of loan originators and institutional investing, has updated their ongoing graphical view of the online lending world or “Lendscape”. As the online lending universe has moved from peer to peer lending, to marketplace lending to all forms of online lending, the Lendscape has changed and grown. New lending platforms have been launched, new verticals targeted, and a growing number of ancillary services have joined the space. Orchard points to the addition of lenders like LendingPoint, Liberty Lending, Lendmart, Allegro Credit, UpLift, ArtMoney, Ascend, OppLoans, and Lendistry.

Perhaps the most important shift in online lending is the growing participation by traditional finance firms.

Source: Crowdfund Insider

Risk Evaluation of Commercial PACE Securitizations Differs From Residential Deals (Morningstar), Rated: AAA

Morningstar Credit Ratings, LLC believes the next iteration of property assessed clean energy securitizations will be in the commercial sector. While securitization of residential PACE assessments tops $3 billion, there have been no public transactions consisting primarily of commercial liens.

Evaluating Property Income Generated to Pay Debts In analyzing the credit risk of transactions backed by commercial assessments, Morningstar considers the debt service coverage ratio, because PACE lending is tied to the property rather than the owner’s creditworthiness.

Evaluating Property Income Generated to Pay Debts

Morningstar evaluates a property’s net operating income in relation to its annual debt-service payments. Among securitized commercial mortgages, the average DSCR is approximately 2.14x, according to Morningstar. C-PACE lenders and aggregators typically require a minimum total DSCR in the 1.00x to 1.15x range. Although, in some cases, the DSCR has dipped below 1.00x, especially if total debtto-value is low when operating expenses are higher than revenue. Factors possibly mitigating a lower DSCR, which include county support, property ownership affiliations within a network, liquidity account and equity position require case-by-case analysis. In addition, DSCR of the lien is more important than the DSCR of the overall debt.

Evaluating Divergent Leverage Metrics

The lien-to-value ratio is another leverage metric that Morningstar analyzes. Although a PACE assessment raises a property’s lien-to-value ratio, the increased risk to the underlying mortgage is likely minimal, as the obligation is usually small in comparison to the mortgage.

It can be more challenging to calculate the lien-to-value ratio for C-PACE levies, because the properties can run the gamut from hotels, farmlands, nursing homes, and gas stations to nonprofit buildings such as churches. Across residential PACE deals, we have seen lien-to-value ratios around 6.7% and combined PACE-lien-plus-mortgage-tovalue ratios at around 62.7%. In C-PACE, lien-to-value ratios hover around 25.0%, not including mortgage debt.

While we scrutinize total debt-to-value, the distribution of leverage offers insight into the financial health of the property. For example, we view a property with a 90% debt-to-value ratio that is composed of an 89% mortgage loan and a 1% PACE assessment more favorably than a property whose debt is composed of an 89% PACE obligation and a 1% mortgage because of higher subordination levels.

Growing Market Size

C-PACE financing has grown to about $482 million as of Sept. 1, encompassing 1,097 commercial projects, according to PACENation. More than 2,500 municipalities have C-PACE programs.

Compared with residential programs, C-PACE is in its infancy, as R-PACE financing totaled about $3.67 billion and R-PACE securitizations totaled around $3.40 billion. A sliver of
commercial assets was included in one of those securitizations, GoodGreen 2016-1, with commercial PACE levies representing approximately 4.8% of the pool’s assets.

Source: Morningstar

Get the full report here.

The Top Sources Of Small Business Financing Based On Approval Rates (Forbes), Rated: AAA

According to the latest Biz2Credit Small Business Lending Index™, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Loan approval percentages of institutional investors have continuously reached new heights this year in terms of approval rates. In August Institutional lenders’ loan approval rates in August reached 63.9%.

Alternative lenders’ approval percentages continue to decline; in August the rate dipped to 57.1%. Approval percentages have dropped every month for more than a year.

Approval percentages at small banks rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure. It is conceivable that the number may cross the 50% benchmark.

Big banks improved one-tenth of a percent to 24.6% in August, setting a new high for the Biz2Credit Index, which has tracked loan approvals since January 2011. The number is creeping up to one-in-four. It’s a good time for bank lending.

Loan approval rates at credit unions dipped to 40.3% in August, falling to a new low for this category of lenders on Biz2Credit’s index.

AutoGravity Surpasses $ 1 Billion USD In Finance Amount Requested, Launches Real-Time Dealership Inventory Nationwide (PR Newswire), Rated: AAA

AutoGravity, a FinTech pioneer on a mission to transform car shopping and financing, today announced that it has reached $1 billion USD in finance amount requested on the AutoGravity platform. Additionally, AutoGravity has announced the launch of real-time inventory for new and used cars from partner dealership groups across the nation. Car shoppers can browse real vehicle inventory on dealership lots, find the specific car that’s right for them and secure up to four finance offers in minutes on the AutoGravity smartphone app.

More over 750,000 car shoppers have downloaded AutoGravity, collectively requesting over $1 billion USD in financing. These users can now search inventory by car brand and model year – as well as characteristics such as body type, drivetrain and color. Car shoppers can find their desired car waiting for them on the showroom lot for the payment they want. With car selected and offers in hand, users can pick up their car and drive off the lot with the confidence of knowing they have secured a fair deal.

AutoGravity partnered closely with the largest dealer groups in the country to design a seamless process by which dealers can easily load inventory feeds, including vehicle details and pictures, to AutoGravity’s secure platform. Inventory is updated and shown to users in real time.

ID-verification firms seize on Equifax moment (American Banker), Rated: A

The Equifax hack, combined with the rise of online lending, may have turned 2017 into a golden age for companies with new ideas for ID.

The software company Mitek plans to roll out a product in the coming year called Mobile Verify for Lending, which offers lenders a five-step process to quickly verify customer identities. Borrowers first share their online bank account information with lenders. They then submit four pictures taken from their smartphones: the front and back of their driver’s licenses, a selfie and a pay stub.

Other players are offering digital lending solutions to make it easier for banks to keep pace with speedy fintech competitors. Upstart, for example, is marketing software, called Powered by Upstart, to banks wanting to get into digital lending.

DFS to Court: OCC Fintech Charter ‘Undermines’ Its Authority (New York Law Journal), Rated: A

The U.S. Office of the Comptroller of the Currency’s plan to offer a special-purpose bank charter for financial technology companies “undermines” the Department of Financial Services’ regulatory authority in New York, the state agency argued in court documents.

“The Fintech Charter Decision is an unlawful assertion of power that usurps New York consumer protection laws and would preempt plaintiff’s ability to regulate any number of the over 600 nondepository institutions she currently regulates,” wrote Matthew Levine, the executive deputy superintendent for enforcement at the department.

Stockpile Raises $ 30 Million to Make Stock Investing Easy for Everyone (PR Newswire), Rated: A

Stockpile, a brokerage popular with millennials that is pioneering fractional share stock investing, announced today that it has raised $30 million in Series B funding led by Fidelity backed Eight Roads Ventures, with participation by Mayfield, Arbor Ventures, Hanna Ventures, Wang Ventures, and others.

This latest investment brings the total raised by Stockpile to more than $45 million. Mayfield led Stockpile’s $15 millionSeries A in October 2015, with participation by Arbor Ventures, Stanford University, and actor Ashton Kutcher. Stockpile will use the new funds to bring stock investing to more millennial customers and expand its unique features, Lele said.

Chime raises $ 18 million for mobile banking without the fees (TechCrunch), Rated: A

Chime is raising $18 million in Series B financing for its mobile-first approach to banking. Cathay Innovation led the round with participation from Northwestern Mutual Future Ventures, Crosslink Capital, Forerunner Ventures, Homebrew and others.

It’s a bank account and debit card built for the digital age.

Without monthly fees or overdraft charges, Chime tries to appeal to the millennial generation, touting its affordability and easy-to-use app. Since launching in 2014, Chime has signed up 500,000 customers, who are typically in their late 20s and making between $50,000 and $70,000 per year.

Shinola’s new pitch: the installment plan (Crain’s Detroit Business), Rated: A

Shinola/Detroit LLC is targeting millennials by adding an option to pay for its watches and other luxury goods in an old-fashioned way: the installment plan.

The average order value for Affirm customers is 70 percent higher than the sitewide average, Kopitz said. And about half of those using the service with Shinola are 18-34 years old, the release said.

Around 1,000 retailers now accept payment through Affirm.

Is marketplace lending maturing? (Banking Exchange), Rated: A

As new as fintech and marketplace lending—once known as “peer to peer lending”—may still seem, Noreika suggested that the online lending fraternity may be moving toward maturity.

Noreika said the sweat that went into those ideas has hit $40 billion in consumer and small business credit, with volumes doubling every year since 2010. He noted that some project that at that rate, marketplace lending will hit $1 trillion by 2025—versus the $3.7 trillion in unsecured consumer lending as of yearend 2016.

Noreika pointed out that marketplace lenders have been seeing cracks in their credit since the fourth quarter of 2015.

‘Fintechs tend to march to their own rules’: former SEC chair Levitt (American Banker), Rated: A

“Hardly a day goes by where there isn’t a recording of some scandal or another,” Levitt said. “I think that’s generally true of emerging cultures and emerging standards and cultures. That makes the odds of winning much less than in well established companies with better established cultures.”

His fellow fintech panelists, Sarah Friar, chief financial officer at Square, and Scott Sanborn, CEO of Lending Club, both pointed out that established companies have had their own share of scandals.

Levitt said it’s difficult for startups to attract the kind of quality board members that larger, more mature companies are able to attract.

“Regulators are always playing catch up,” he said. “Regulation today trails the fintech world and often presents impediments and costs that are unnecessary. Regulators are constantly protecting their space so they don’t get caught up in a scandal they’re held accountable for, so there’s a tendency to over-regulate.”

McHenry and Booker Introduce Fintech Bill to Automate Income Verification (House.gov), Rated: B

Today, Chief Deputy Whip Patrick McHenry (R, NC-10), the Vice Chairman of the House Financial Services Committee, and Senator Cory Booker (D-NJ) introduced the IRS Data Verification Modernization Act of 2017. This bipartisan bill will require the Internal Revenue Service (IRS) to automate the Income Verification Express Services process by creating an Application Programming Interface (API) allowing small businesses and consumers to access accurate credit assessments more efficiently. Joining McHenry as an original cosponsor of H.R. 3860 is Congressman Earl Blumenauer (D, OR-03), a senior member of the House Committee on Ways and Means.

Plug and Play Selects Their Winter 2017 Batches (PR Newswire), Rated: B

Plug and Play formally announces the startups accepted into their Winter 2017 batches. Plug and Play will run five programs this quarter focused on Health & Wellness, Insurtech, Internet of Things, Mobility, and Travel & Hospitality.

Wunder Brings on Rich Mauro as Director of Capital Markets (Wunder Capital), Rated: B

We’re incredibly excited to welcome the newest member of Wunder Capital’s team, Rich Mauro. As Director of Capital Markets, Rich will lead Wunder’s institutional fundraising activities, bolstering our capital stack and helping us scale Wunder’s platform to the next level.

United Kingdom

Funding Circle hits £50 million in revenue as CEO restates IPO ambitions (Business Insider), Rated: AAA

Accounts for 2016 filed with Companies House this week show:

Revenue rose 59% to £50.9 million;
Operating expenses rose by 43% to £103.1 million;
Losses dipped by 3% to £35.7 million thanks partly to a foreign exchange boost;
£1 billion lent last year;
Loans outstanding rose by 61% to £1.37 billion;

‘It goes without saying that international is really hard’

While Desai is bullish on international expansion, the accounts show Funding Circle stopped operations in Spain at the start of the year, a market it entered through the acquisition of Zencap in 2015.

International revenues grew slower than UK revenues last year and Funding Circle parted ways with the head of its continental Europe operations in the middle of last year.

In the UK, economic growth is slowing and consumer debt is ballooning, leading to fears of a possible economic slowdown that could hit lenders.

Funding Circle remains a loss-making business (accumulated losses stand at £116.6 million to date) but Desai says it is on a long-term path to profitability.

Funding Circle is onto a winning strategy (Business Insider), Rated: AAA

Funding Circle, however, has remained a firm market leader, and its annual results for 2016 show it continues to do well.

Its losses narrowed 3% from £37 million ($50 million) in 2015 to £36 million ($48 million) in 2016, as revenue grew 59% year-over-year (YoY) from £32 million ($43 million) to £51 million ($68 million), and originations saw a 61% boost from £846 million ($1.1 billion) to £1.4 billion ($1.9 billion).

Source: Business Insider

Funding Circle posts 59% revenue rise (Bridging&Commercial), Rated: A

Post year-end highlights:

January 2017 – Funding Circle raised £82m equity capital
April 2017 – Funding Circles’ SME income fund – which purchases loans through the platform – raised net proceeds of £140m through a C share issue
August 2017 – Funding Circle and Aegon announced £160m investment in UK small business loans
August 2017 – Funding Circle launched new brand identity and rolled out a substantial advertising campaign in the UK.

Ranger Direct Lending fund expecting substantial dividend cut (AltFi), Rated: A

The £220m Ranger Direct Lending fund could see its dividend pay-out for the second half of 2017 fall to nearly half of that in the first six months of the year, according to a statement by Ranger.

It is expecting NAV returns in H2 2017 to average 0.4 per cent-0.5 per cent per month (c.5-6 per cent pa), and then recover to 0.6 per cent-0.7 per cent per month (c.7 per cent-9 per cent pa) in 2018, assuming the resolution of Princeton this year.

As a result aggregate dividends of c.25p are expected for H2 2017, compared to 46p in H1.

Source: AltFi

‘Oscars of the start-up world’ has an exciting new winner looking to disrupt property finance (CNBC), Rated: A

LendInvest, an online marketplace platform for property lending and investing, was named the most valuable tech company at the prestigious Investor Allstars event in London on Wednesday evening.

These 20-something Oxford grads just raised $ 30 million for their fintech startup (Business Insider), Rated: A

A “RegTech” — regulation technology — company founded by three Oxford grads all under 30 has raised $30 million (£22.4 million) from investors including Microsoft’s venture capital arm.

Onfido, an identity verification startup, has raised the “Series C” fundraising from Crane Venture Partners, Microsoft Ventures, and Salesforce Ventures, as well as existing investors. It takes the total raised by the London startup to over $60 million.

Onfido’s latest $30 million funding injection follows a $25 million investment last April. Kassai says the latest funding will go towards technology investment and global expansion.

Payday lender Wonga records £65m loss amid overhaul (BBC), Rated: A

Wonga – Britain’s biggest payday lender – posted pre-tax losses of nearly £65m in 2016, but claims its business has been “transformed”.

The lender, which operates in the UK, South Africa, Poland and Spain, saw its losses shrink from £80m in 2015 to £65m in 2016.

How Fintech Is Disrupting Traditional Banking Models (Minute Hack), Rated: A

One of the biggest changes in the financial sector in the UK has been the introduction of challenger banks.

Crucially, these banks have not been mired by the many recent scandals and still rely on customer deposits to build their balance sheets. That’s why fledgling banks such as Metro Bank, Aldermore, Tesco Bank and United Bank UK and currently dominating the best buy tables.

Retail banking is the area that has seen the biggest change as a result of the FinTech sector, but that’s not to say there hasn’t also been a significant impact in the commercial banking sector.

A perfect example is Barclay’s mobile payments service Pingit, designed to compete with Apple Pay, while other banks have launched new mobile banking businesses away from their legacy businesses in an attempt to compete in a digital age.

Bringing financial services to small businesses

One example is peer-to-peer lending, a sector that has sprung up from nothing ten years ago to lend a total of £2.9bn in 2016. This is now filling the capital void for many growing businesses and lending at lower rates than many firms would be able to access elsewhere.

New trustees join Finance Innovation Lab’s board (P2P Finance News), Rated: B

SIX new trustees have been appointed to the board of the Finance Innovation Lab.

The new trustees include Caroline Ellis, a social and organisational change consultant who is taking on the role of chair of the board, and Kate Ormiston Smith, director of finance and operations at The B Team, who is taking up the post of treasurer.

The other new members of the board are: Hanna McCloskey, founder and chief executive officer of Fearless Futures; Toyin Ogundana – investment manager at CAF Venturesome; Paul Riseborough – chief commercial officer at Metro Bank and Julian Thompson, social innovation and fundraising strategist.

How and where to get Crowdlending to fund your Business (TechBullion), Rated: B

When considering your initial application for funding, crowdlending platforms will review your business plan, financial information and other details about your company. In other words, the platforms will review your company’s financial information as well as your personal information in much the same way as banks will do before offering you a loan. Therefore, it is imperative to ensure that your business plan is engaging, comprehensive and well thought out.

Investors will usually seek to get more information about you and your business from social networks like Facebook, Twitterand LinkedIn. It will serve you well to ensure that you have an online presence before you seek for funds through crowdlending.

Going by the FundingKnightresearch, most UK investors have a love for the community and would want to give back to some UK SME to ensure its prosperity.

China

More Chinese fintech firms to eye Hong Kong IPOs, says JP Morgan (SCMP), Rated: AAA

More Chinese fintech firms vying to go public could choose Hong Kong as their listing venue, after the city’s first fintech IPO received a hot response from investors, and that Hong Kong has unique advantages compared with other global financial hubs, said JP Morgan’s head of global investment banking in China.

Zhong An Online Property and Casualty Insurance, China’s first online-only insurer, closed nine per cent up from its IPO price on Thursday in its Hong Kong debut. With an oversubscription of nearly 400 times from retail investors, the company had priced its IPO at the top end of the expected range, raising US$1.5 billion in the city’s biggest ever fintech offering.

“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”

In particular, revenue from online payment is estimated to increase to 202 billion yuan by 2020. Revenue from online distribution of financial products could grow to 52 billion yuan by then, while that for online lending and online insurance may reach 142 billion yuan and 60 billion yuan respectively.

ZhongAn Insurance Starts Trading on the Hong Kong Stock Exchange (Lend Academy), Rated: AAA

ZhongAn’s IPO will likely make the company the 4th most valuable fintech company in the world with a market cap of about US$10.4 billion, following the top three fintechs, which are Paypal ($78bn), Ant Financial ($68bn) and Lufax ($18bn).

Peter Renton interviewed the CEO of ZhongAn Insurance, Jeffrey Chen, on the Lend Academy Podcast over the summer. Jeffrey said in the interview that ZhongAn has 492 million insurance customers as of December 31, 2016. That is more than four times that of insurance giant AXA’s customer base (107 million, as of December 31, 2016). By this measure, ZhongAn truly is the world’s largest insurance company. And this is just a four-year old company!

Why ZhongAn is So Succesful

For the technology part, ZhongAn has been using artificial intelligence and big data analytics in each step of the insurance value chain, from marketing, underwriting, pricing to claims processing.

Another example is that ZhongAn has partnered with a Chinese automaker to develop internet of things (IoTs) and telematics solutions. Telematics devices can capture drivers’ behavioral data, which can be fed to algorithms using big data techniques to tailor product pricing to observed risk levels.

In ZhongAn’s early days, the revenue generated by shipping return policies accounted for almost 90% of the total revenue. This product would not have been such a success were it not for its partnership with Alibaba. Ant Financial, the financial affiliate of Alibaba, is also the single biggest shareholder (16.04%) of ZhongAn.

Source: :Lend Academy

KKR Invests in Shenzhen Suishou Technology (BusinessWire), Rated: A

Shenzhen Suishou Technology Co. (“Suishou” or the “Company”), a leading personal finance management platform in China, and global investment firm KKR today announced the signing of a definitive agreement under which KKR will invest in Suishou’s Series C funding round to support the Company’s expansion across China.

European Union

Robo.Cash Tops €2 million with 1000th Investor (Crowdfund Insider), Rated: AAA

Emerging peer to peer lender Robo.Cashhas topped €2 million in loans with the advent of the 1000th investor. According to Robo.Cash, investors are spread across most of Europe with lenders now coming from 28 different countries. The short term loans are coming from Spain and Kazakhstan.

The total sum of earned interests has amounted to more than €50,000 since the start of the platform’s work.

The End of Fintech Is Nigh (FiNews), Rated: AAA

Switzerland is one of the major global fintech centers and the industry is booming: Swisscom counted fewer than a hundred fintech startups in 2015, today there are 208 companies active in wealth management, comparative consulting, crypto finance, data management, payment services and lending (see illustration below).

Blurred Dividing Line

And this may also spell the end of fintech as we know it, in Switzerland, and abroad. That’s at least what Armands Broks (pictured below) believes. The founder and CEO of Twino, a peer-to-peer lending platform, thinks that the fine line between finance industry and fintech is about to be blurred and that fintech eventually will disappear.

The only way forward for fintech is through cooperation agreements and in doing so, «the fintech industry is signing its own death sentence,» Broks said.

PWC consultants said that about 60 percent of Swiss banks have links to fintechs. Four out of five banks are eyeing partnerships in the near future or are planning to expand existing ones.

International

Goldman Sachs’ foray into consumer banking is getting aggressive (Tearsheet), Rated: AAA

The same year it launched GS Bank, it began building a digital-only consumer loan product, Marcus, that was fully developed and on the market 12 months later. Without having the legacy infrastructure under previously existing consumer products and services, the overhaul other major banks have been experiencing don’t exist for Goldman.

“[The] platform approach has not been an obvious approach on Wall Street. Our competitors are generally structured in deep vertical silos and we have a different architecture: these shallower silos built on top of many layers of software, tech infrastructure, cybersecurity, enterprise platforms and increasingly, client platforms,” Marty Chavez, an engineer and Goldman Sachs CIO-turned-CFO this year, said in a keynote at Harvard University earlier this year.

46 percent of Goldman jobs are in technology
CB Insights analyzed more than 2,000 open Goldman Sachs job listings by division and business unit to confirm it’s focused on building its technology and digital finance units.

Many of the jobs are in digital finance. Earlier this month it reportedly poached 20 employees from New York-based online lending startup Bond Street — engineers, product developers, and risk and marketing specialists — presumably to build out a lending product.

According to the research, published Tuesday, 46 percent of all of the firm’s jobs as of Sept. 14 are in technology, with the highest amount for core platform roles, followed by operations engineering and then equities technology.

Source: Tearsheet

Marcus is expanding in the U.K.

Marcus, the online lending startup built inside the investment bank, has been growing tremendously in the eight months since it launched in October 2016. It has one product: a customizable personal loan for Prime borrowers, with at least a 660 credit score, of up to $30,000. It promises no fees and straightforward repayment terms. It recently passed $1 billion in loan originations with expectations to originate $2 billion by the end of this year. By comparison: SoFi, which launched in 2011, reached its first billion after 14 months; Avant, founded in 2012, took 28 months; 10-year-old Lending Club took 65 months; and Prosper, launched in 2006, passed $1 billion in 98 months.

Goldmoney Inc. Adds Bitcoin and Ethereum to the Goldmoney Holding (Globe Newswire), Rated: A

Goldmoney Inc. (TSX:XAU) (“Goldmoney”) (the “Company”), a precious metal financial service and technology company, today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney^® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.

Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.

HNWs Would Use Amazon for Wealth Management (Financial Advisor IQ), Rated: A

The majority of high net investors would turn to Google, Apple, Facebook and Amazon for wealth management, Bloomberg writes.

If one of the four tech giants were to enter the advice space, 56.2% of wealthy individuals would entrust them with their money, according to a Capgemini survey of 2,500 individuals with a net worth of $1 million or more in North America, Latin America, Europe and Asia-Pacific cited by the news service. And among people under 40, more than 81% would use one of the four tech firms, according to the survey.

Australia

New fintech “Study Loans” aims to help cash-strapped students (Mozo), Rated: AAA

It’s called Study Loans and is said to be the first online platform dedicated to providing loans to students for both vocational and higher education.

Working closely with education providers, the fintech will track student performance and provide funds as you study through ‘tranches’ – which are based on the number of units you do and when they are completed.

Think of tranches as a ‘pay as you go’ kind of deal. So whether you pass one unit or four, Study Loans will release the funds according to your course progression.

Study Loans has raised $5 million debt equity so far, which is ready to be distributed as the first tranche to Aussie students who have already applied through the platform.

Financing options for students:

Student loans – Student personal loans are designed to help fund your education. They often have a more lenient application criteria and have lower interest rates than standard personal loans. But you are expected to make monthly repayments – so you’ll need to make sure your budget can handle the amount.
Peer-to-peer lending
HECS-HELP – This is a Government funded scheme for students enrolled in Commonwealth supported institutions with no real interest charged on the loan. You won’t have to pay your student fees upfront, however, you are expected to make repayments once you start earning a salary of $54,869.

MONEFLY LAUNCHES FREE FINTECH PLATFORM WITH ENVESTNET | YODLEE FINANCIAL DATA (Yodlee), Rated: A

Monefly is an innovative new Fintech platform in Australia, focused on providing tools and resources that empower its members to grow income, reduce expenses, build assets, eliminate debt and protect themselves from risk. Some of these exciting tools include free property valuations, automated budgeting, credit scores, bank account consolidation and much more.

Monefly has partnered with Envestnet | Yodlee to help its members access comprehensive financial data available across banking and wealth management from over 15,500 data sources globally.

The data being integrated into Monefly includes superannuation, cash, credit cards, personal debts, mortgages, assets, shares, real estate, credit scores and other investment data.

India

MyAdvo Ties Up with Online Loan Advisor Square Capital for Loan Services (newKerala), Rated: AAA

MyAdvo, India’s leading Legal Tech Startup has entered into an agreement with Square Capital, the digital lending arm of India’s largest real estate transaction platform Square Yards to enable loan facilitation for lawyers on its panel.

Square Capital currently facilitates USD 30- 40Mn(INR 200cr – INR 260cr) of loan disbursals every month, contributed majorly by secured mortgages spread across 50+ banking partners for their different products in home loan, loan against property and business loan.

This exclusive tie-up will benefit MyAdvo registered lawyers in receiving immediate loan solutions without any hassle.

Indians are warming up to robo-advisers (livemint), Rated: A

Robo-advisers, or automated services based on computer algorithms, are catching on in the Indian market due to the relatively lower penetration of financial products in India compared to developed markets.

According to a Business Insider Intelligence forecast, robo-advisers (with some element of automation) will manage investment products worth $1 trillion by 2020, which will go up to $4.6 trillion by as early as 2022.

Scepticism notwithstanding, financial institutions in the country are realising the benefits of robo-advisory services by either building the product in-house or partnering with fintech companies to develop robo-advisers. Take the case of FundsIndia.com, which has a robo-advisory service for which it is forging partnerships with financial biggies. “We have a partnership with Axis Securities and one more company. There is a growing acceptance from the industry, and we are trying to enable better product design,” said Srikant Meenakshi, co-founder, FundsIndia.com. According to him, 15% of his company’s overall portfolio comprises robo-advisory services. Similarly, 5nance has an agreement with HDFC Mutual Fund for its robo-advisor.

Robo-advisory start-up ArthaYantra uses a patented methodology called the Personal Financial Lifecycle Management on its online platform, Arthos. Since its launch in 2008, the site claims to have helped 120,000 customers across more 650 cities and 30 countries.

Asia

Singapore Cryptocurrency Firms Facing Bank Account Closures (Bloomberg), Rated: AAA

Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.

Chia Hock Lai, president of the Singapore Fintech Association, which has broader membership than Access, said some of his organization’s members also experienced account closures, though he didn’t provide figures.

Access has 106 members and the Fintech Association has 185, though the two organizations said some companies belong to both groups.

How technology drives a new Taiwanese banking landscape (The Asset), Rated: A

According to Joseph Huang, president of E.Sun Bank, speaking in an interview with The Asset, payments is one area that every bank is looking to explore, although it does not generate huge profits for most banks.

Banks are also more frequently working with technology companies. E.Sun Bank partnered with IBM Taiwan in building its digital branch, which opened in February 2017, making it the first digital branch in Taiwan. Similarly, CTBC partnered with LINE Pay to help merge its banking services with communication apps and social media.

Taishin Bank’s e-banking application, Richart, which attracted over 120,000 subscribers, is targeting young Taiwanese users, while Cathay United Bank is also providing its products to retail customers through its platform My MobiBank.

Authors:

George Popescu

Allen Taylor

Friday September 29 2017, Daily News Digest

News Comments

United States

LendingClub completes 2nd self-sponsored loan securitization.
Orchard updates Lendscape graphic. AT: We can see a growing number of institutional investors and originating banks, not to mention a push into new areas of lending with expanding categories of originators.”
Risk evaluation of commercial PACE securitizations differs from residential deals.
Top sources of small business financing based on approval rates. AT: “It looks like the year goes to institutional investors and big banks. Credit unions and alternative lenders are in decline. I guess this means you can innovate all you want, money still talks.”
AutoGravity surpasses $1B USD in finance amount requested. AT: “AutoGravity, by far, is doing the most interesting thing in the area of auto finance. This is a huge milestone. Congratulations, with the expectation to see more great achievements from this young startup.”
ID-verification firms capitalize on Equifax’s failure. AT: “This is a natural consequence, and I expect to see more alternative ID verification products hit the market in the coming year. Companies that take their time and do it right have a greater chance at success, long-term.”
OCC Fintech Charter undermines our authority, says NY Department of Financial Services. AT: “The struggle for control over regulation between the states and the federal government continues to heat up. Of course, states have no authority not granted by the Constitution, and that authority is subservient to the federal government in most cases. I suspect the federal government will win this battle, though it will take a few years.”
Stockpile raises $30M.
Chime raises $18M for no-fee mobile banking.
Shinola uses Affirm’s installment plan.
Is marketplace lending maturing?
Fintechs march to their own drum.
McHenry, Booker introduce bill to automate income verification.
Plug and Play selects winter 2017 batches.
Wunder makes Rich Mauro director of capital markets.

United Kingdom

Funding Circle CEO restates IPO ambitions.
Funding Circle is onto winning strategy.
Funding Circle post year-end highlights.
Ranger Direct Lending fund expecting nearly 50% dividend cut.
LendInvest wins most valuable tech company award.
Onfido raises $30M for regtech startup.
Wonga records 65M GBP loss. AT: “This is less than the loss in the previous year.”
How fintech is disrupting traditional banking models.
Finance Innovation Lab appoints new trustees.
How and where to get crowdlending funds for your business.

China

More Chinese fintech firms expected to pursue Hong Kong IPO. AT: “No doubt. If it worked for one company, it could work for another. Cattle follow the lead bull.”
Why ZhongAn Insurance is successful.
KKR invests in Shenzhen Suishou Technology.

European Union

Robo.Cash tops 2M Euro with 1000th investor. AT: “Congratulations.”
The end of fintech is nigh, says Twino founder/CEO.

International

Goldman Sachs’ entry into consumer banking is aggressive.
Goldmoney adds bitcoin, ethereum.
High net worth individuals would use Amazon for wealth management. AT: “I find this quite interesting. Around the globe, HNWs would use Google, Apple, Facebook, and Amazon (GAFA) for wealth management. This sounds like an invitation for the Big 4 to intro their own robo-advisors. Who knows? It could happen.”

Australia

India

Asia

News Summary

United States

LendingClub Completes 2nd Self Sponsored Loan Securitization with $ 323 Million Deal (Crowdfund Insider), Rated: AAA

Orchard’s Online Lending Ecosystem Update: “Lendscape” (Crowdfund Insider), Rated: AAA

Perhaps the most important shift in online lending is the growing participation by traditional finance firms.

Source: Crowdfund Insider

Risk Evaluation of Commercial PACE Securitizations Differs From Residential Deals (Morningstar), Rated: AAA

Evaluating Property Income Generated to Pay Debts

Evaluating Divergent Leverage Metrics

Growing Market Size

C-PACE financing has grown to about $482 million as of Sept. 1, encompassing 1,097 commercial projects, according to PACENation. More than 2,500 municipalities have C-PACE programs.

Source: Morningstar

Get the full report here.

The Top Sources Of Small Business Financing Based On Approval Rates (Forbes), Rated: AAA

Alternative lenders’ approval percentages continue to decline; in August the rate dipped to 57.1%. Approval percentages have dropped every month for more than a year.

Approval percentages at small banks rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure. It is conceivable that the number may cross the 50% benchmark.

Loan approval rates at credit unions dipped to 40.3% in August, falling to a new low for this category of lenders on Biz2Credit’s index.

AutoGravity Surpasses $ 1 Billion USD In Finance Amount Requested, Launches Real-Time Dealership Inventory Nationwide (PR Newswire), Rated: AAA

ID-verification firms seize on Equifax moment (American Banker), Rated: A

The Equifax hack, combined with the rise of online lending, may have turned 2017 into a golden age for companies with new ideas for ID.

DFS to Court: OCC Fintech Charter ‘Undermines’ Its Authority (New York Law Journal), Rated: A

Stockpile Raises $ 30 Million to Make Stock Investing Easy for Everyone (PR Newswire), Rated: A

Chime raises $ 18 million for mobile banking without the fees (TechCrunch), Rated: A

It’s a bank account and debit card built for the digital age.

Shinola’s new pitch: the installment plan (Crain’s Detroit Business), Rated: A

Shinola/Detroit LLC is targeting millennials by adding an option to pay for its watches and other luxury goods in an old-fashioned way: the installment plan.

The average order value for Affirm customers is 70 percent higher than the sitewide average, Kopitz said. And about half of those using the service with Shinola are 18-34 years old, the release said.

Around 1,000 retailers now accept payment through Affirm.

Is marketplace lending maturing? (Banking Exchange), Rated: A

As new as fintech and marketplace lending—once known as “peer to peer lending”—may still seem, Noreika suggested that the online lending fraternity may be moving toward maturity.

Noreika pointed out that marketplace lenders have been seeing cracks in their credit since the fourth quarter of 2015.

‘Fintechs tend to march to their own rules’: former SEC chair Levitt (American Banker), Rated: A

His fellow fintech panelists, Sarah Friar, chief financial officer at Square, and Scott Sanborn, CEO of Lending Club, both pointed out that established companies have had their own share of scandals.

Levitt said it’s difficult for startups to attract the kind of quality board members that larger, more mature companies are able to attract.

McHenry and Booker Introduce Fintech Bill to Automate Income Verification (House.gov), Rated: B

Plug and Play Selects Their Winter 2017 Batches (PR Newswire), Rated: B

Wunder Brings on Rich Mauro as Director of Capital Markets (Wunder Capital), Rated: B

United Kingdom

Funding Circle hits £50 million in revenue as CEO restates IPO ambitions (Business Insider), Rated: AAA

Accounts for 2016 filed with Companies House this week show:

Revenue rose 59% to £50.9 million;
Operating expenses rose by 43% to £103.1 million;
Losses dipped by 3% to £35.7 million thanks partly to a foreign exchange boost;
£1 billion lent last year;
Loans outstanding rose by 61% to £1.37 billion;

‘It goes without saying that international is really hard’

International revenues grew slower than UK revenues last year and Funding Circle parted ways with the head of its continental Europe operations in the middle of last year.

In the UK, economic growth is slowing and consumer debt is ballooning, leading to fears of a possible economic slowdown that could hit lenders.

Funding Circle remains a loss-making business (accumulated losses stand at £116.6 million to date) but Desai says it is on a long-term path to profitability.

Funding Circle is onto a winning strategy (Business Insider), Rated: AAA

Funding Circle, however, has remained a firm market leader, and its annual results for 2016 show it continues to do well.

Source: Business Insider

Funding Circle posts 59% revenue rise (Bridging&Commercial), Rated: A

Post year-end highlights:

January 2017 – Funding Circle raised £82m equity capital
April 2017 – Funding Circles’ SME income fund – which purchases loans through the platform – raised net proceeds of £140m through a C share issue
August 2017 – Funding Circle and Aegon announced £160m investment in UK small business loans
August 2017 – Funding Circle launched new brand identity and rolled out a substantial advertising campaign in the UK.

Ranger Direct Lending fund expecting substantial dividend cut (AltFi), Rated: A

The £220m Ranger Direct Lending fund could see its dividend pay-out for the second half of 2017 fall to nearly half of that in the first six months of the year, according to a statement by Ranger.

As a result aggregate dividends of c.25p are expected for H2 2017, compared to 46p in H1.

Source: AltFi

‘Oscars of the start-up world’ has an exciting new winner looking to disrupt property finance (CNBC), Rated: A

LendInvest, an online marketplace platform for property lending and investing, was named the most valuable tech company at the prestigious Investor Allstars event in London on Wednesday evening.

These 20-something Oxford grads just raised $ 30 million for their fintech startup (Business Insider), Rated: A

A “RegTech” — regulation technology — company founded by three Oxford grads all under 30 has raised $30 million (£22.4 million) from investors including Microsoft’s venture capital arm.

Onfido’s latest $30 million funding injection follows a $25 million investment last April. Kassai says the latest funding will go towards technology investment and global expansion.

Payday lender Wonga records £65m loss amid overhaul (BBC), Rated: A

Wonga – Britain’s biggest payday lender – posted pre-tax losses of nearly £65m in 2016, but claims its business has been “transformed”.

The lender, which operates in the UK, South Africa, Poland and Spain, saw its losses shrink from £80m in 2015 to £65m in 2016.

How Fintech Is Disrupting Traditional Banking Models (Minute Hack), Rated: A

One of the biggest changes in the financial sector in the UK has been the introduction of challenger banks.

Retail banking is the area that has seen the biggest change as a result of the FinTech sector, but that’s not to say there hasn’t also been a significant impact in the commercial banking sector.

Bringing financial services to small businesses

New trustees join Finance Innovation Lab’s board (P2P Finance News), Rated: B

SIX new trustees have been appointed to the board of the Finance Innovation Lab.

How and where to get Crowdlending to fund your Business (TechBullion), Rated: B

Going by the FundingKnightresearch, most UK investors have a love for the community and would want to give back to some UK SME to ensure its prosperity.

China

More Chinese fintech firms to eye Hong Kong IPOs, says JP Morgan (SCMP), Rated: AAA

“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”

ZhongAn Insurance Starts Trading on the Hong Kong Stock Exchange (Lend Academy), Rated: AAA

Why ZhongAn is So Succesful

For the technology part, ZhongAn has been using artificial intelligence and big data analytics in each step of the insurance value chain, from marketing, underwriting, pricing to claims processing.

Source: :Lend Academy

KKR Invests in Shenzhen Suishou Technology (BusinessWire), Rated: A

European Union

Robo.Cash Tops €2 million with 1000th Investor (Crowdfund Insider), Rated: AAA

The total sum of earned interests has amounted to more than €50,000 since the start of the platform’s work.

The End of Fintech Is Nigh (FiNews), Rated: AAA

Blurred Dividing Line

The only way forward for fintech is through cooperation agreements and in doing so, «the fintech industry is signing its own death sentence,» Broks said.

PWC consultants said that about 60 percent of Swiss banks have links to fintechs. Four out of five banks are eyeing partnerships in the near future or are planning to expand existing ones.

International

Goldman Sachs’ foray into consumer banking is getting aggressive (Tearsheet), Rated: AAA

Source: Tearsheet

Marcus is expanding in the U.K.

Goldmoney Inc. Adds Bitcoin and Ethereum to the Goldmoney Holding (Globe Newswire), Rated: A

Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.

HNWs Would Use Amazon for Wealth Management (Financial Advisor IQ), Rated: A

The majority of high net investors would turn to Google, Apple, Facebook and Amazon for wealth management, Bloomberg writes.

Australia

New fintech “Study Loans” aims to help cash-strapped students (Mozo), Rated: AAA

It’s called Study Loans and is said to be the first online platform dedicated to providing loans to students for both vocational and higher education.

Think of tranches as a ‘pay as you go’ kind of deal. So whether you pass one unit or four, Study Loans will release the funds according to your course progression.

Study Loans has raised $5 million debt equity so far, which is ready to be distributed as the first tranche to Aussie students who have already applied through the platform.

Financing options for students:

Student loans – Student personal loans are designed to help fund your education. They often have a more lenient application criteria and have lower interest rates than standard personal loans. But you are expected to make monthly repayments – so you’ll need to make sure your budget can handle the amount.
Peer-to-peer lending
HECS-HELP – This is a Government funded scheme for students enrolled in Commonwealth supported institutions with no real interest charged on the loan. You won’t have to pay your student fees upfront, however, you are expected to make repayments once you start earning a salary of $54,869.

MONEFLY LAUNCHES FREE FINTECH PLATFORM WITH ENVESTNET | YODLEE FINANCIAL DATA (Yodlee), Rated: A

Monefly has partnered with Envestnet | Yodlee to help its members access comprehensive financial data available across banking and wealth management from over 15,500 data sources globally.

The data being integrated into Monefly includes superannuation, cash, credit cards, personal debts, mortgages, assets, shares, real estate, credit scores and other investment data.

India

MyAdvo Ties Up with Online Loan Advisor Square Capital for Loan Services (newKerala), Rated: AAA

This exclusive tie-up will benefit MyAdvo registered lawyers in receiving immediate loan solutions without any hassle.

Indians are warming up to robo-advisers (livemint), Rated: A

Asia

Singapore Cryptocurrency Firms Facing Bank Account Closures (Bloomberg), Rated: AAA

Singapore banks have closed accounts of several companies which specialize in providing cryptocurrency and payments services, according to two local bodies which represent financial-technology firms.

Access has 106 members and the Fintech Association has 185, though the two organizations said some companies belong to both groups.

How technology drives a new Taiwanese banking landscape (The Asset), Rated: A

Authors:

George Popescu

Allen Taylor

Wednesday September 13 2017, Daily News Digest

News Comments Today’s main news: Orchard connects institutional buyers, loan originators with new Deals platform. Funding Circle lends 91M GBP to UK businesses in August. RateSetter recovering from bad loan. Keynote speakers for LendIt Europe. India’s P2p lending rules have been finalized. Juvo takes financial inclusion to Malaysia with Tune Talk. Today’s main analysis: What Orchard’s Deals platform does, and […]

News Comments

Today’s main news: Orchard connects institutional buyers, loan originators with new Deals platform. Funding Circle lends 91M GBP to UK businesses in August. RateSetter recovering from bad loan. Keynote speakers for LendIt Europe. India’s P2p lending rules have been finalized. Juvo takes financial inclusion to Malaysia with Tune Talk.
Today’s main analysis: What Orchard’s Deals platform does, and for whom.
Today’s thought-provoking articles: Mike Cagney’s fall could delay SoFi’s progress. China’s ICO ban makes sense in light of P2P lending troubles.

United States

Orchard unveils new Deals platform. AT: “Although Lend Academy says this isn’t just a secondary market for loans, it will be interesting to see how many investors use it that way. But there are other great features, as well. This not only looks like another step in Orchard’s evolution, but in alt lending’s evolution.”
What Orchard’s new platform means. AT: “Lend Academy talks about what the new Orchard platform can do.”
CEO’s fall clouds SoFi’s prospects for growth. AT: “There are some very prescient insights here. The big takeaway is this could delay SoFi’s application for an ILC as well as its plans for an IPO. Evidently, the idea to step aside was Mike Cagney’s own idea. But if Renaud Laplanche can make a comeback, so too can Cagney. It will take some time.”
Cagney has already been replaced as chairman of the board. AT: “This change was immediate.”
More negative sentiment of the industry on the way. AT: “No doubt, SoFi’s scandal will put a blight on the entire industry. Just when we thought we were pulling out of the hole created by the Lending Club scandal, here comes another one. But I’m still optimistic in the long-term.”
MoneyLion experimenting with augmented reality.
Upstart making smarter loans.
Amped advice for the new retired class.
Woman charged with attempting to steal from online lender.
Fintech is the fastest growing industry in the U.S.
Plaid moves to larger headquarters.
Kabbage head of business development to join A-list speaker lineup at small business summit.

United Kingdom

Funding Circle lends 91M GBP to UK businesses in August.
RateSetter recovering from bad loan discovery.
Orca CEO shares UK P2P lending market update.
Goldman Sachs to make consumer lending push. AT: “Already reported, but this offers some additional insight on how it will affect P2p lending in the UK as a whole.”
How P2P firms can help consumers beat inflation.
Starling Banks platform Marketplace integrates with Flux.
How to tell the difference between robo-advisors.
The Goldman Sachs banker who left the firm to found Neyber.
P2P leaders talk about the big stories of the past year.
Britain’s leading fintechs band together on Brexit strategy.

China

China’s ICO ban makes sense in light of P2P lending troubles. AT: “An excellent breakdown of the forces at work inside China that are affecting P2P lending and digital currencies.”
Ping An Technology ranked in top 50 firms.

European Union

LendIt Europe releases keynote speaker list.
EstateGuru surpasses 30M Euro loan volume. AT: “Congratulations.”
Groupe Societe Generale says clients will receive financial advice from chatbot soon.

India

Asia

Juvo takes financial inclusion into Malaysia with Tune Talk partnership. “Juvo is also the subject of today’s featured analysis.”

News Summary

United States

Orchard Unveils Global Network Connecting Institutional Buyers and Loan Originators with New Opportunities in Private Credit (PR Newswire), Rated: AAA

Orchard Platform has rolled out Deals as a part of its new platform launch. With the addition of Deals to their suite of technology solutions for loan originators and institutional investors, Orchard Platform takes the next step in their evolution. Deals is a global network where loan originators searching for new sources of financing, and institutional investors with capital to deploy, can connect, evaluate opportunities, and move forward with multiple types of transactions.

Deals is operated by Orchard Platform Markets, LLC, a wholly-owned subsidiary, SEC-registered broker-dealer, and member of FINRA and SIPC. With Deals, qualified investors gain access to a broad range of new investment opportunities, including pools of seasoned loans, forward flow agreements, and credit facilities—along with all underlying deal data and an enterprise suite of credit analytics solutions to evaluate each prospective transaction. Originators with pools of loans to sell can list deals and seamlessly share data within this global network, while working with investors who express interest in a deal to conduct due diligence and analysis, and finalize the transaction’s structure and terms.

Orchard Platform’s new features include:

Deals: Global network where pre-qualified loan originators and investors can browse a broad listing of investment opportunities and corresponding data, and utilize Orchard’s enterprise technology to seamlessly exchange information, assess potential transactions, and take the next steps more efficiently.
Capital Management: Allocation optimization, facility monitoring, and automated borrowing-base reporting offerings to help originators better monitor utilization across multiple capital sources—and manage them with greater precision and insight.
News & Insights: The most recent industry news, economic data, and Orchard research and commentary to keep originators and investors up-to-date on the latest industry trends and thinking. Although Deals information is only available to pre-qualified institutional investors, Orchard also provides free access to anonymized, aggregated industry data to parties seeking to learn more about the industry, including journalists, researchers, and investors.
Advanced Analytics: Originators can benchmark origination and performance data against an aggregated and anonymized peer group, and quickly analyze any data set under multiple scenarios, to gain deeper insights into their loan books and funding channels. Investors can also take advantage of scenario testing, data visualization, and benchmarking tools to gain actionable portfolio and market intelligence.
High-Quality Data Services: Data integrations with Orchard help originators improve the quality of their data, and streamline the process for client reporting.

Orchard Launches New “Deals” Platform Connecting Institutional Investors and Originators (Lend Academy), Rated: AAA

The key piece that I was interested in was the new Orchard Deals platform. The old Orchard Platform provided technology solutions for both originators and institutional investors but Deals is the piece that finally connects the dots. The platform connects institutional investors with origination platforms that have listed specific investment opportunities. Orchard has 55 institutional investors registered on their platform and 25 originators (with several more in the queue). Originators cover the gamut of consumer, small business and real estate lending.

At launch time they had an initial $500 million in active deals from 10 originators listed on the platform. These are both primary and secondary deals.

To be clear, Orchard’s new platform is far more than just a secondary market. It has several new features:

Deals – Pre-qualified investors can browse listings of a range of different investment opportunities offered by originators.
Capital Management – For originators to help monitor and optimize capital utilization across multiple funding sources.
Advanced Analytics – Benchmarking of performance data against an anonymized peer group.
Data Services – Helping originators improve the quality of their data and client reporting.
News & Insights – Industry news and economic data as well as Orchard’s own research and commentary.

Source: Lend Academy

CEO’s Fall Clouds Prospects for Fintech Firm SoFi (WSJ), Rated: AAA

Mike Cagney’s decision to resign as CEO of online lender Social Finance Inc. casts uncertainty over the financial-technology upstart’s business prospects, its attempt to open a bank in Utah and plans for an eventual public offering.

The company has been valued at more than $4 billion by shareholders including private-equity firm Silver Lake and Japanese conglomerate SoftBank Group Corp.

In recent weeks, however, Mr. Cagney was spending less time on business issues and more on personnel and legal matters.

When the SoFi board met by telephone on Saturday, those issues occupied much of the conversation, according to people familiar with the matter. When the board meeting reconvened on Sunday, Mr. Cagney raised the idea of moving aside, arguing that his presence risked being a burden on the company’s progress. The executive told directors it would be better for SoFi if he resigned, the people said.

How Mr. Cagney’s departure will affect SoFi’s growth plans is unclear. Its management team was thinned following the departure of Chief Financial Officer Nino Fanlo, Chief Revenue Officer Michael Tannenbaum and co-founder Dan Macklin over the past few months.

Regulators require firms that are requesting banking licenses to maintain consistency in their management teams, which will likely delay SoFi’s application, according to a person familiar with the matter. The company has also been looking to hire a new finance chief to replace Mr. Fanlo who could guide it to an initial public offering. That search is now on hold until Mr. Cagney’s successor is named.

SoFi CEO to step down after claims of managers’ sexual harassment (USA Today), Rated: A

Cagney, who’s also co-founder, plans to remain in the role until the board names his successor, likely by the end of the year. He was replaced immediately as board chairman by venture capitalist Tom Hutton, who has been a board member since 2012.

SoFi, based in San Francisco, is one of the hottest startups in the personal finance sector, with revenue rising 67% year-over-year to $134 million in the second quarter. It also funded $3.1 billion in loans during the quarter.

SoFi Co-Founder and CEO Mike Cagney to Step Down by Year End (Lend Academy), Rated: A

Back in August there was the news of a sexual harassment lawsuit from a former employee. Before that there had been several senior executive departures, we have had a class action lawsuit and one of Silicon Valley’s most valuable and revered fintech companies was starting to lose some of its luster.

The New York Times is also reporting that “Mr. Cagney may have been overaggressive in expanding SoFi’s business, skirting risk and compliance controls.” That is the first I have heard about any compliance issues and if it is true then this could be a much bigger issue for SoFi.

Regardless of the what the real story this is not good for the industry whatsoever. Just when it felt like we had some momentum and the industry was starting to thrive again this is definitely a setback. The press is going to bring up the issues with Lending Club last year and we will have to deal with more negative sentiment.

Personal finance app MoneyLion is experimenting with augmented reality (Tearsheet), Rated: A

MoneyLion is timing its launch of an AR tool to coincide with Apple’s iOS 11 release, which is rumored to be this week. MoneyLion’s feature, called Grow Your Stack, will let customers get a visual representation of their account balance as stacks of cash projected over the customer’s view of the real world. It will use iOS 11’s ARKit technology.

MoneyLion joins a league of banks experimenting with VR and AR technology, advancements that have the potential to transform branch banking. As Tearsheet reported in June, BNP Paribas recently introduced a VR-based app for retail banking that allows users to virtually access their account activity and transaction records. Citi and Wells Fargo are also dabbling in VR technology, while in the PFM space, Intuit has experimented with visualizing one’s financial health as a forest.

Upstart, The Brainchild Of Google Execs, Is Using Fintech To Make Smarter Loans (Benzinga), Rated: A

About 40 to 50 percent of Americans have access to prime credit, yet 83 percent of people who have taken out a loan have never defaulted, said Girouard, the CEO of the San Franciscolending firm Upstart.

The groups who are often denied by traditional credit models — but aren’t necessarily risky — include millennials with a “thin” credit file, recent immigrants and self-employed people, Girouard said.

The average size of a loan from Upstart is between $11,000 and $12,000, and the average age of the company’s borrowers is 28, the CEO said.

Loans range between $1,000 and $50,000, with APRs from 7.39 percent to 29.99 percent and three- and five-year terms.

Upstart borrowers must be U.S. citizens or permanent residents and have a FICO score above 620.

Amped advice for the new retired class (Financial-Planning), Rated: A

The financial advice industry exhorts retirement preparedness but provides scant guidance for retirees after they reach that milestone, according to Matt Fellowes, well-known fintech entrepreneur who is launching a new digital advice platform.

Fellowes founded HelloWallet, a software company that Morningstar acquired in 2014 for $52.5 million. After a stint as chief innovation office at Morningstar, Fellowes left to launch United Income, which aims to serve a generation of retirees dealing with very complicated lives after work.

Fellowes finds fault in how the industry approaches its deaccumulation models, claiming its methods and assumptions are outdated. Key considerations for retirees managing their finances, he says — when will they die and how much will they spend before passing — are “two of the least studied questions in asset management today.”

FULL SERVICE
The platform offers different tiers of service, from a digital-only option with a $10,000 account minimum and a 50 basis point annual fee, to advisor-assisted service, with either a maximum 60 basis point fee for a $100,000 account minimum, or a maximum 80 basis points for a minimum $300,000 account, which is advertised as “full service.”

United Income had a goal of reaching $38 million in assets by the end of the year. It has already passed $210 million, Fellowes says.

Scotch Plains Woman Charged With Attempting to Steal $ 241,000 from Online Lender (Tapinto.net), Rated: A

A Scotch Plains woman indicted last year as a leader in an auto-theft trafficking network has been charged in a separate scheme to steal $241,000 from an online lending company.

Attorney General Christopher S. Porrino and the Office of the Insurance Fraud Prosecutor (OIFP) announced that Tyisha Brantley, 37, was charged with computer criminal activity, attempted theft by deception and falsifying records for allegedly used her work computer at Pfizer Inc. to create and send phony bank statements to iLoan Residential Mortgage lending in an attempt to obtain a $241,000 mortgage to purchase a home in Newark.

Brantley allegedly used computer software to alter two statements from her boyfriend’s bank account; adding her name as an account holder and changing the account balance from $-525.05 to $15,933. She then allegedly used the computer to email, from her work account, the fraudulent statements to the lending company, which ultimately did not approve the loan.

Fintech: The Fastest Growing Industry in the U.S. (Them Report), Rated: A

Fintech, or financial technology, had close to $13 billion invested in it in 2016 from U.S. based companies alone.

Fintech allows digital lenders to offer competitive rates due to automation and lack of physical offices. Turner and S&P Global Market Intelligence’s estimates show that 13 of the largest digital lenders in the U.S. originated $28.39 billion in loans last year and a cumulative $68.75 billion since their respective inceptions.

S.F. fintech Plaid moves to larger HQ amid explosive growth (Biz Journals), Rated: B

San Francisco-based Plaid, which connects some of the hottest fintech apps to their users’ bank accounts, has moved to a new headquarters that’s more than double the startup’s previous home base.

Kabbage, Indeed, Microsoft Join A-List Speaker Lineup at the National B2SMB Summit (Benzinga), Rated: B

The national event takes place Oct. 3-4 and is spread over two locations in Chicago’s dynamic West Loop district: 1871 at the Merchandise Mart on Day 1, and the Revel Fulton Market on Day 2.

Other recent additions to the speaker roster include:

Pete Steger, Head of Business Development, Kabbage

United Kingdom

Funding Circle lends £91m to UK businesses in August (Bridging&Commercial), Rated: AAA

Funding Circle has revealed that it lent a total of £91m to UK businesses during August.

The peer-to-peer platform provided finance to 1,309 UK businesses during the month and reported that investors are set for a current estimated return of 6.7% per year.

Funding Circle reported that of its total lending, 24.7% was provided to businesses based in the South East.

Britain’s RateSetter recovering after ‘asteroid strike’ bad loan discovery (Daily Mail), Rated: AAA

Britain’s peer-to-peer lending platform RateSetter has managed to retain most of its customers despite leaving the industry’s trade body last month after breaching its transparency rules, its Chief Executive Rhydian Lewis told Reuters in an interview.

Peer-to-peer platforms, which bring together individual borrowers and lenders without a bank being involved, have grown rapidly in Britain since 2015 but are starting to come under regulatory scrutiny.

Lewis said that while the platform has lost some business, it has retained 95 percent of its customers despite offering them the chance to sell out at no cost between July 18 and Aug. 31.

Orca Co-Founder & CEO Iain Niblock Shares UK P2P Lending Market Update (Crowdfund Insider), Rated: A

Orca, an independent data, research, and analysis provider in the UK P2P lending market, recently shared an exclusive update via email: the UK P2P lending market outlook is bright.

“We are still seeing very strong growth across the UK peer to peer lending market with cumulative lending surpassing £10 billion at the very start of Q3 2017. In particular business lending has grown by 84.19% when comparing to the same period of 2016,” observed Orca Co-Founder & CEO Iain Niblock.

Goldman Sachs plans consumer lending UK push (Business Insider), Rated: A

The first phase of this expansion will see Goldman Sachs launch online deposit accounts, and the second will see the bank roll out a consumer lending offering.

Besides Goldman Sachs’ obvious clout, there are two reasons UK alt lenders should be worried:

The bank has already proven itself adept at dramatic pivots. Goldman Sachs originally operated as a wealth management and investment bank, and only began serving the mass market in 2016, when it eight months later, it had
A year in numbers! How P2P firms can help consumers beat inflation (P2P Finance News), Rated: A

Consumer price inflation when we started in September 2016 was at one per cent. Since then, it has almost tripled to 2.9 per cent today.

The household savings rate – the percentage of disposable income being saved – was at 5.3 per cent at the end of September 2016, but hit record lows of 1.7 per cent in the first quarter of 2017, the lowest level since records began in the first quarter of 1963.

Savings rates have actually increased slightly. The best buy easy access rate this time last year was one per cent from RCI Bank. The same provider now offers 1.2 per cent.

Starling Bank’s New Platform MarketPlace Integrates with Fintech Flux (Bank Innovation), Rated: A

U.K.’s Starling Bank is embracing the PSD2 changes in finance with the launch of its Marketplace platform.

Rewards and receipt provider Flux will be the first company to be integrated onto this platform.

How to tell the difference between robo-advisers (City A.M.), Rated: A

Recent research from international banking group ING highlights how cautious consumers feel about using robo-advisers.

The report found that 29 per cent of consumers want more than just a simple online investment service – they want financial advice to guide their investment journey.

Interestingly, the study also found that, rather than having a computer manage their money, most consumers would prefer to personally manage their investments, even if it resulted in lower expected returns.

This 35-year-old banker left Goldman Sachs to start a fintech inspired by his mother (Business Insider), Rated: A

Goldman Sachs has invested £100 million in a fintech startup founded by two of its former bankers that lets people borrow money and repay through their salaries.

Neyber, founded in 2014 and launched in 2015, partners with employers to let their staff borrow money at attractive rates.

Repayments are then deducted from future salaries, lowering the risk for the lender and hopefully helping staff manage money better.

The startup was founded by three former investment bankers, including two Goldman alums. CEO Martin Ijaha, 35, left Goldman in 2012 and came up with the idea for the business when thinking about the experience of his family as a child.

From ISAs to authorisations: the big stories of the past year (P2P Finance News), Rated: B

Nick Harding, chief executive of Lending Works, argued that the arrival of the Innovative Finance ISA (IFISA) was “far and away the most significant event” for the sector over the past year.

John Goodall, chief executive and co-founder of Landbay, suggested that the number of Financial Conduct Authority approvals seen in the last year marked a “significant milestone” for the sector.

Britain’s leading fintechs are banding together to work out a Brexit strategy (Business Insider), Rated: B

Entrepreneurs from TransferWise, Funding Circle, Onfido, Monzo, FreeAgent, MarketInvoice, and Starling Bank have all joined the Fintech Delivery Panel (FDP), a new industry group that aims to “produce an ambitious post-Brexit vision for the UK’s fintech sector.”

The panel also includes representatives from big banks such as Barclays, HSBC, RBS and Santander.

China

China’s ICO ban makes more sense in light of its history with fintech (TechCrunch), Rated: AAA

Many in the US have chided the PBOC for its apparent overreaction. AngelList co-founder Naval Ravikant called the policy a “huge gift to Silicon Valley and its resident financiers.” VC Fred Wilson penned a thoughtful post comparing China’s approach to that of the SEC in the US, opining that “We needed a cooling off period and if China’s actions are that cooling off period, then I welcome them. However, a blanket ban on ICOs seems like bad policy to me.”

From the perspective of US and European financial markets, this reaction seems like a drastic one-size-fits-all policy for a nuanced ecosystem, calling to mind the idiom “if all you have is a hammer, everything looks like a nail.” However, China’s context provides four specific insights that somewhat reframe this policy:

An ever-evolving financial regulatory regime

In a country with a stock market less than 30 years old, it’s little wonder that investor protections may not yet have evolved to be comprehensive enough for the complicated ecosystem of alternative finance. Imagine China having to replicate the regulatory framework that took decades to develop in the US following the 1929 stock market crash – all in less than 30 years!

A sketchy recent past for financial technology in the Middle Kingdom

In the peer to peer lending space (in which I used to work) China is conversationally referred to as the ‘wild west’ of fintech. Thousands of platforms sprung up almost overnight in China, promising to transform mom-and-pop savings into productive debt investments. These exchanges had raised a staggering $59 billion from unsophisticated investors by early 2016.

One in three of the country’s 3,600 platforms failed and shut down, including marketplaces like Ezubao, which defrauded over 900,000 investors out of $7.6 billion. It’s almost impossible to imagine American or European regulators allowing unaccredited investors to be exposed to comparable schemes at such a magnitude of scale.

In the peer to peer space, the PBOC had a very similar reaction to its recent ICO ban, imposing strict limits on the online lending industry to curb the risks of “shadow banking.” The only difference was that the online lending restrictions came too late, in the wake of massive investor losses.

Ping An Technology is the Sole Chinese Firm to Rank Among the Top 50 Firms (PR Newswire), Rated: B

International Data Corporation (IDC), a leading global provider of market intelligence, released the 2017 IDC Fintech Rankings Top 100 list on September 12. Ping An Technology, the top-ranked Chinese firm within the list, came in at number 38, as a result of its cutting-edge innovation and strong technology competence. The rankings serve as further confirmation of the attention and recognition that Ping An Technology is getting from IDC, on the heels of the Chinese firm’s 4^th place position on the 2017 IDC China FinTech Pioneer Top 25 list.

European Union

LendIt Europe Announces Keynote Speakers for 2017 Event (Crowdfund Insider), Rated: AAA

The conference’s extensive speaker line-up includes:

Antony Jenkins, Founder and Executive Chair at 10x Future Technologies
Anne Boden, CEO and Founder of Starling Bank
Jaidev Janadarna, CEO of Zopa
Karen Mills, Senior Fellow at the Harvard Business School
Renaud Laplanche, Co-Founder & CEO of Upgrade

EstateGuru’s loan volume surpassed €30 million! (EstateGuru Email), Rated: A

In August, the platform’s loan volume was nearly €4 million which was a remarkable 13% from EstateGuru’s historic loan volume. In September the platform celebrates surpassing €30 million loan volume in which already 7900 investors from 39 countries have invested in. An interesting comparison can be drawn with the Baltic’s Nasdaq statistics – the largest amount of transactions were made with Siaulia Bankas (€8.4 million) and Tallink Group (€5.7 million). EstateGuru’s loan volume in August would comprise of roughly 11.5% of the entire Nasdaq Baltic transaction volume.

The growth of the firm is not only illustrated by the loan volumes but also by their strong track record.Due to the short-term nature of the loans, 70 loans worth €12 million have already been repaid to the investors, resulting in an impressive 12.4% historic interest rate. Meanwhile, loss of capital on the platform has remained €0 as the firm has not undergone any loan defaults!

Very soon, our clients will receive financial advice from a chatbot (Business-Review), Rated: A

Since the beginning of the year, BRD – Groupe Societe Generale has been developing a chatbot based on Personetics technology, which will operate via Facebook.

During Business Review’s Country Focus Community Forum in mid-June, BRD – Groupe Societe Generale CEO Francois Bloch announced the lender’s five-year plan to invest tens of millions of euros in digitalization and automation of processes. Soon, BRD clients will be the first among those of the French banking giant to benefit from financial guidance via a text conversation with an AI.

India

Peer-to-peer lending final norms to be out soon: RBI (Moneycontrol), Rated: AAA

The much-delayed peer-to-peer (P2P) lending guidelines have been finalised and will soon be released by the Reserve Bank of India (RBI) once it is notified by the government.

Jaipur-based Finova raises Series A funding from Sequoia Capital (VC Circle), Rated: A

Jaipur-based non-banking financial company Finova Capital Pvt. Ltd has raised an undisclosed amount in a Series A round from Sequoia Capital India Advisors Pvt. Ltd.

Wait for P2P lending to evolve before investing (livemint), Rated: A

Before we go any further on the subject, the most important aspect on P2P lending in India as of now is that it does not have specific regulations. At the same time, it is not illegal either. The Reserve Bank of India (RBI) has taken cognisance of the existence of P2P lending and came out with a consultation paper in April 2016. This is expected to be followed by formal guidelines for the sector, which the companies in the segment are expecting soon.

Since P2P lending is unsecured lending, it carries higher risk than other investments. The biggest risk is the borrower defaulting on repayments. These platforms claim to minimise this risk by using a strict filtering of borrowers at the time of registration itself. For instance, Faircent rejects close to 90% of applicants.

This means that there are many more borrowers than lenders. Financial planners advise planning properly before taking a loan. “Look at what is your cost of borrowing elsewhere. People need to understand that lending costs have come down across channels. If you benchmark P2P lending cost against credit card debt, it would look very attractive, but that should not be a benchmark,” said Dhawan.

If a borrower with a good credit score takes a personal loan from a bank, the landing cost of the loan could be 16-17%. The person can get the same loan at around 14% from P2P lending.

Asia

Juvo Partners With Tune Talk To Drive Financial Inclusion In Malaysia (Realwire), Rated: AAA

Juvo, the pioneer in mobile Identity Scoring, today announced its partnership with Tune Talk, the fastest growing Mobile Virtual Network Operator (MVNO) in Malaysia. The deployment, Juvo’s first in Malaysia, will drive financial inclusion across a population that has rapidly adopted smartphones in a highly saturated market.

‘Pay Later’, created by Juvo and fueled by Juvo’s Identity Scoring, is a digitized service that provides prepaid users with access to progressive levels of financial services, starting with airtime loans. By using Juvo’s proprietary data science and game mechanics technology, subscribers graduate to higher levels of credit based on top-up and repayment history, account information, and every day interaction. Pay Later enables prepaid subscribers to unlock access to advanced financial services. And, for Tune Talk, Juvo’s solution will drive higher levels of engagement, increase retention and develop an identity-based relationship between Tune Talk and its customers.

Smartphone users in Malaysia are estimated to reach 17.8 million this year, and grow to 21.3 million by 2021.

Authors:

George Popescu

Allen Taylor

Wednesday May 31st, Daily News Digest

News Comments Today’s main news: Behind the scenes as Orchard platform struggles, Earnest Prices $175 million Securitization, Peer-to-peer lender Wellesley & Co. pauses origination, RateSetter raises funds as it prepares to list, China Minsheng Investment leads $262m pre-IPO Today’s main analysis : LendingClub Files Presentation in Advance of Annual Shareholders Meeting, Parallels to the High Yield Bond Market, Today’s thought-provoking articles: Blackrock’s Consumer […]

News Comments

Today’s main news: Behind the scenes as Orchard platform struggles, Earnest Prices $175 million Securitization, Peer-to-peer lender Wellesley & Co. pauses origination, RateSetter raises funds as it prepares to list, China Minsheng Investment leads $262m pre-IPO
Today’s main analysis : LendingClub Files Presentation in Advance of Annual Shareholders Meeting, Parallels to the High Yield Bond Market,
Today’s thought-provoking articles: Blackrock’s Consumer ABS ETF, Fintech has peaked, claims Morgan Stanley, RBI guidelines on P2P lending platform likely by June-July

United States

Victory Park Capital sells Funding Circle US and Upstart loans GP:”A refocus on the UK market makes sense. Reduce expenses.”
Fintech has peaked, claims Morgan Stanley report GP:”Perhaps it was over opimistic and now it is realistic?”
Behind the scenes at Orchard Platform, a Struggle to Innovate GP:”Sillicon Valley is aware of a problem called : having too much capital prevents innovation. “
LendingClub Files Presentation in Advance of Annual Shareholders Meeting GP:”Interesting mostly about the details on what happened in 2016.”
Law firm-issued collections letters continue to pose high risks GP:”Take away: don’t lie or you will pay for it, end of story.”
Earnest Prices $175 million Securitization of Refinanced Student Loans; Achieves AA (High) Rating by DBRS GP:”Glad to hear Earnest is received a good reception in the capital markets.”
Elastic line of credit surpasses $200 million in outstanding loans GP:”A milestone, I think it will be more impressive if it reaches in the billions.”
Interest Rates on Connext™ Private Student Loans Decrease as Federal Student Loan Rates are Set to Rise,
Blackrock’s Consumer ABS ETF and Parallels to the High Yield Bond Market GP:”Interesting comparison. I believe in learning from other markets.”
MPOWER Financing Secures Add-on Investment from 1776 Ventures GP:”A small $500k amount, but better then nothing.”
SoFi and JetBlue Help Customers Managing Student Loans Earn Reward Travel GP:”SoFi is becoming a real brand and it is a great example of partnership and credibility in the corporate world for SoFi.”

United Kingdom

Peer-to-peer lender Wellesley & Co. publishes financial results and loan book, CFO resigns GP:”To me it seems Wellesley is struggling with operations. Never a good sign.”
Peer-to-peer lender RateSetter raises £13m, Woodford and Artemis lead GP:”Why such a small amount?”
RateSetter raises funds as it prepares to list GP:”I hope 13m GBP is enough.”
UK fintech shrugs off Brexit, trumps Germany GP:”Before Brexit UK was in the EU and was dominating the financial markets. Before it was in the EU it was also dominating the financial markets. Hundreds of years ago it was already dominating the financial markets. So keep calm and carry on.”
India’s Wadhawan Group takes stake in Zopa GP:”An interesting move. Perhaps Wadhawan will be interested in investing in the local p2p markets now.”
Seedrs has joined Funding Circle and iwoca in partnering with Natwest

China

China Minsheng Investment leads $262m pre-IPO in P2P lending firm GP:”A new IPO. Interesting. “
XIAOMI has started a $1bn Loan Refinancing
P2P Company Tuandai Raised $270m in a new round of financing

European Union

Banco BNI Europa boosts European SMEs with €10M investment in Portuguese peer-to-peer platform RAIZE GP:”That is a lot of money for a young EU p2p lender. Glad to see that other countries are also doing well besides the UK, US, China…”

Korea

Local start-up Lendit raises 10 billion won GP:”Most international investors will mix Lendit the event with Lendit the Korean P2P lender. Unfortunate choice of names.”

Australia

‘Green loan’ marketplace receives $20m

India

RBI guidelines on P2P lending platform likely by June-July GP:”This probably means Nov-Dec 2017 in fact if not later.”
“Constructive Synergy”: Indian P2P Lender Faircent Introduces New Student Loan

Singapore

Singapore’s biggest marketplace lender hits S$40 million originations GP:”A lot of potential if they can extend besides Singapore while using Singapore as a base. “

News Summary

United States

Victory Park Capital sells Funding Circle US and Upstart loans, (Peer2Peer), Rated: AAA

The London-listed investment trust said that the loans sold represented 3.65 per cent and 1.48 per cent respectively of the company’s net asset value (NAV) as of 31 March. The firm said it will retain its non-performing Funding Circle US and Upstart loans, which represented 0.68 per cent and 0.21 per cent respectively of NAV as of 31 March 2017.

VPC announced in November 2016 that it was winding down its P2P lending portfolio, after losses triggered substantial writedowns.

Taking into account the loan sales, the company’s balance sheet investments accounted for 63 per cent of the NAV as of 31 March 2017, as compared to 17 per cent for the marketplace loans.

“The company expects to re-invest substantially all of the sale proceeds into balance sheet investments, as well as other strategic uses,” it said in a stock exchange announcement on Friday.

Fintech has peaked, claims Morgan Stanley report, (Alt Fi News), Rated:AAA

In a pessimistic new report, researchers from Morgan Stanley have concluded that while fintech companies style themselves as disruptors they will do more to strengthen than undermine incumbents in the long term.

“Only five disruptors have survived as standalone entities out of over 450 fintech firms launched during the dotcom era,” the report said.

Fintech has been most promising in areas lacking infrastructure and where established players have been weakest. This was particularly true of blockchain and robo-advice.

However, these trends are reversing as major financial institutions have started building their own robo-advisors and acquiring blockchain startups.

“Independent start-ups in the robo-advisor space will struggle to be profitable given the high cost of acquisition and intensifying competition.

“We think however that established financial advisors, banks, insurers, etc. will keep automating parts of their value chain…to improve the infrastructure for established incumbents.”

“Marketplace lenders are poised to grow at a… moderate pace leveraging traditional institutions as primary sources of capital; in essence serving as a more efficient customer acquisition and servicing channel for traditional lenders.

“We remain bullish on the potential for marketplace lenders to take share, as they benefit from regulatory arbitrage and changing consumer behavior.”

Behind the Scenes at Orchard Platform, a Struggle to Innovatete, (NY Times), Rated: AAA

“We’re launching a full marketplace from scratch,” Mr. Burton said a few months later, at Orchard’s Flatiron district office, and we “hope everyone shows up.” But they didn’t.

More than a year after Mr. Burton revealed his big plans, Orchard has completed just a scattering of transactions. Over that time, it burned through more than $5 million in legal fees and other expenses.

Next month, hoping to add momentum, Orchard plans to unveil a scaled-back version of the platform, eight months later than first planned.

But regardless of the company’s fate, its struggles thus far reveal just how hard it can be for a new entrant — even one with successful founders, a promising service and big-name investors — to break into a highly regulated industry.

Seeking financial expertise, Orchard recruited a few Wall Street veterans from Merrill Lynch and Bear Stearns. In late spring of last year, Mr. Burton had more than a dozen roadshow meetings with executives from the largest loan platforms, including Lending Club, Prosper Marketplace and Social Finance.

He hoped to charge them monthly fees of $2,500 to $5,000 to participate. Orchard also offered them the ability to be its “data partners,” so Orchard could standardize their data for trading purposes — which Mr. Burton called “the big heavy lift.”

Orchard also enlisted the help of Meredith Cross, a lawyer at WilmerHale and the former head of corporate finance at the Securities and Exchange Commission, as it met with Wall Street regulators.

But in July, S.E.C. officials told Orchard that they would consider loans being traded as securities, potentially imposing a tougher level of oversight. That made some lenders nervous about participating. Some lenders were also concerned about exposing investors they had cultivated to loans from competitors.

“We do not have a current need for a trading platform,” said Ryan Rosett, a chief executive of Credibly, which offers small-business loans. “Our capital markets team has the ability to sell our loans directly to a pool of institutional investors.”

Orchard was also fighting a separate headwind. The broader market for online loans was being buffeted by higher consumer loan defaults and investor fears. Some online lenders cut staff members, and others shut down as loan growth dried up.

As Orchard X struggled to get going, he said, legal documents for trades had “ballooned to 150 pages from a 20-page contract,” leaving him exasperated. “I’m a tech guy!” he said.

As it moves forward, Orchard has played down the regulatory issue, proceeding without an explicit formal S.E.C. ruling on whether the loans are securities. It is a potentially risky move, but one the company believes will work in part because it has dropped its goal of legal standardization, cutting the need for lending platforms to agree on regulation issues. The S.E.C. declined to comment.

In January, Orchard X arranged its first sale of about $30 million in loans from an ailing platform, a small-business lender called CAN Capital. The auction took a lengthy four weeks to complete. But Orchard X did receive a fee of 0.5 percent of the sale price.

Looking back, Mr. Burton said on April 4, Orchard should not have tried to persuade lenders to join the trading platform all at once. Having raised $30 million in 2015, Orchard plans to announce next month that it has raised an additional $20 million or more and to formally roll out its revised Orchard X transaction platform.

LendingClub Files Presentation in Advance of Annual Shareholders Meeting, (Crowdfund Insider), Rated: A

The file can be found here.

LendingClub (NYSE:LC) has filed a new form with the SEC (DEF 14A) in advance of the annual shareholders meeting which is scheduled to take place on June 6, 2017. The addition to the Annual Meeting Proxy Statement, a standard filing, includes a presentation on the company asking shareholders to support Director nominees, executive compensation and ratification of the auditor.

Perhaps the most interesting aspect of the filing is the synopsis of the events in 2016 that led to the departure of founding CEO Renaud Laplanche and the ensuing aftershocks that pummeled the online lender.

Law firm-issued collections letters continue to pose high risks, (Pepper Hamilton), Rated: AAA

The CFPB has pursued lawsuits, as well as formal enforcement actions, concerning misrepresentations of attorney involvement in debt collection-related communications.

On April 17, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit in Ohio district court against the Weltman, Weinburg & Reis law firm (WWR), alleging violations of the Fair Debt Collections Practices Act (FDCPA) stemming from the firm’s issuance of debt collection demand letters. The CFPB’s allegations against WWR closely resemble the FDCPA allegations that were considered by the D.C. Circuit Court of Appeals in Jones v. Dufek, 830 F.3d 523 (D.C. Cir. 2016). Dufek also concerned a debt collection letter that was sent by an attorney acting as a debt collector and not as legal counsel. On March 20, 2017, the U.S. Supreme Court denied the Dufek plaintiff’s petition for a writ of certiorari to review the Court of Appeals’ decision in favor of the defendant attorney/collector. Notwithstanding Dufek, however, debt collectors and first-party creditors are well-advised to be extremely diligent when using law firms as debt collectors.

In actuality, the CFPB’s complaint alleges that “no attorney had assessed any consumer-specific information . . . [a]nd no attorney had made any individual determination that the consumer owed the debt, that a specific letter should be sent to the consumer, that a consumer should receive a [collections] call, or that the account was a candidate for litigation.” Thus, according to the CFPB, the subject letters contained numerous misrepresentations that violated both the FDCPA and the prohibitions of the Consumer Financial Protection Act against unfair, deceptive or abusive acts or practices.

The specific deficiencies cited in the CFPB’s complaint against WWR include the fact that subject letters were printed on law firm letterhead, which prominently included the phrase “ATTORNEYS AT LAW” (in bold type and in all caps) and included the law firm’s name in the signature line.

In determining whether the Dufek letter violated the FDCPA as a false, deceptive or misleading representation, the Court of Appeals noted, as a threshold matter, that “if an attorney is acting only as a debt collector and has not formed a legal opinion about the case, he or she cannot send a letter [stating or implying] otherwise” without misleading the recipient/debtor..

Misrepresentations regarding attorney involvement in collections letters and other communications continue to be a “hot button” issue with the CFPB. The collections letters targeted in the CFPB’s lawsuit against WWR are distinguishable from the letter at issue in Dufek in that the Dufek letter included a disclaimer regarding the attorney’s review of the underlying account. Yet, the CFPB’s complaint against WWR can be read as implying that the use of attorney letterhead and the inclusion of the law firm’s name in the signature line were per se improper.

Earnest Prices $ 175 million Securitization of Refinanced Student Loans; Achieves AA (High) Rating by DBRS, (Market Wired), Rated: A

SAN FRANCISCO, CA–(Marketwired – May 24, 2017) – Earnest today announced the close of the $175 million Earnest 2017-A transaction backed by refinanced student loans. The offering received an AA (high) rating on the senior notes by DBRS which is now only one notch below the highest attainable rating of AAA. The transaction was three-times oversubscribed and traded at the tight end of market guidance.

Earnest has now completed five securitizations of refinanced student loans since February 2016 for a total value of over $877 million. In 15 months, the company has increased its rating on the senior notes from A to AA (high), a progression that often takes several years. This speaks to the quality of the underlying collateral and the advancement Earnest has made as a programmatic issuer in the capital markets.

“This marks another strong securitization for Earnest, providing us the opportunity to welcome new investors and continue building our capital markets program. We’re thrilled at the appetite and investor confidence in our offerings,” said Louis Beryl, CEO and co-founder of Earnest.

Elastic line of credit surpasses $ 200 million in outstanding loans, (Email), Rated: A

More than $680 million funded and 155,000 customers served since 2013 validates need for expanded access to credit in the U.S.

FORT WORTH, TX – May 31, 2017 – Elevate Credit, Inc. (“Elevate”), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced the Elastic product has surpassed $200 million in total principal outstandings, with more than 120,000 open accounts.

Elastic, a bank-issued line of credit offered by Republic Bank & Trust Company (“Republic Bank”), has loaned over $680 million dollars to more than 155,000 customers, since its launch in 2013. The $200 million in total principal outstandings includes the 10% of outstandings Republic Bank retains. Elastic passed the $100 million in outstandings mark in May 2016.

About Elevate
Elevate (NYSE: ELVT) has originated $4 billion in non-prime credit to more than 1.6 million consumers to date. Its responsible, tech-enabled online credit solutions provide immediate relief to customers today and help them build a brighter financial future. The company is committed to rewarding borrowers’ good financial behavior with features like interest rates that can go down over time, free financial training and free credit monitoring. Elevate’s suite of groundbreaking credit products includes RISE, Elastic and Sunny. For more information, please visit .

Interest Rates on Connext™ Private Student Loans Decrease as Federal Student Loan Rates are Set to Rise, (Email), Rated: A

ReliaMax®, the complete private student lending solutions provider, today announced that the banks and alternative lenders participating in the Connext® Private Student Loan program will lower the interest rates on those loans. EffectiveJune 1, 2017, the lowest rates for variable- and fixed-interest rate Connext® loans for undergraduate and graduate programs will be reduced to 2.87 percent APR* and 5.40 percent APR*, respectively, and the borrower will not be charged an origination fee.

Federal student loan interest rates on new loans are scheduled to increase on July 1 for the 2017-2018 school year. These interest rates are adjusted each year based on the annual Treasury Department auction plus a set percentage amount added for each type of loan program. According to

Blackrock’s Consumer ABS ETF and Parallels to the High Yield Bond Market, (PeerIQ Email), Rated: AAA

Shares of Lending Club and OnDeck surged last Monday 3.9% and 9.5% respectively, on reporting from the

MPOWER Financing Secures Add-on Investment from 1776 Ventures, (Email), Rated: A

MPOWER Financing (www.mpowerfinancing.com) announced today that 1776 Ventures (www.1776.vc) has doubled-down its investment in the company with an additional $500,000 investment ahead of MPOWER’s planned Series B for this summer. 1776 Ventures is an investment fund focused on seed-stage investments seeking to transform complex industries. In addition to being seed and Series A round investors, their partners have also served as a mentor and close advisor to MPOWER Financing.

MPOWER Financing is an innovative fintech company and provider of educational loans to high-promise international students who do not fit the traditional credit criteria of banks or lenders.

SoFi and JetBlue Help Customers Managing Student Loans Earn Reward Travel, (PR News Wire), Rated: B

Through the partnership, JetBlue’s TrueBlue members who refinance their student loans with SoFi will now earn 1 TrueBlue® point for every $2 they refinance through the lender, up to 50,000 points. With average monthly savings of $288*, refinancing student loans with SoFi frees up extra money that members can use to pursue travel plans, save and invest for the future, or buy a home.

United Kingdom

Peer-to-peer lender Wellesley & Co. publishes financial results and loan book, CFO resigns, ( Alt Fi), Rated: AAA

Wellesley & Co., the peer-to-peer lender best-known for investing alongside its investors, has announced wide-ranging changes to the business. In addition to publishing financial results for 2016, the firm has also made a first stab at publishing its loan book online.

Wellesley has now published its audited results for the year ended 31 December 2016. Its loan book grew 10 per cent during the period, to £163.6m, versus £148.7m lent in 2015. The firm made a loss for the year of £210,288, down from a loss of £2.2m in the previous year. But it made a pre-tax profit of £1.3m in the second half of the year.

Other notable points include having supported the development of 822 “mid-priced” homes in the UK. The firm also made a number of new hires in 2016, including Stephen Bell as chief risk officer in February, and Peter Scott as non-executive director in March. The firm claims to have delivered an average interest rate across all products of 4.49 per cent to investors.

Chief financial officer Alasdair Lenman, who was appointed last summer, has resigned from the company. Lenman was hired to help the firm publish its late accounts up to December 2015 ahead of its abortive fundraise on equity crowdfunding platform Seedrs, which was pulled at the start of this year.

Further to these developments, Wellesley has temporarily paused its peer-to-peer lending operations, and is launching a new listed bond on the Irish Stock Exchange.

Turnbull said that Wellesley is pausing its P2P product in order to allow time for technical changes to be made. He said that these changes are designed to satisfy both investor demand and regulatory requirement.

Once re-launched, Wellesley & Co. will no longer deliver monthly interest payments to its investors. The monthly interest payment model was at odds with the style of development loans that the firm originates, which are repaid at maturity. Henceforth, the firm’s P2P product will offer a target rate of return, with interest repaid at maturity.

Wellesley has just launched its third bond, offering investors an annual interest rate of 4.75 per cent over 3 years, or 4 per cent over 2 years, paid monthly. The bond can be held within an ISA wrapper.

The first Wellesley bond was a mini-bond which raised a little shy of £50m. The second was listed on the Irish Stock Exchange, as is this third issue. The second bond was launched in response to ISA demand, and could be invested in via a stocks and shares ISA.

Wellesley is famed for skin-in-the-game approach to P2P, which in practical terms means that it takes a stake of every loan in a first loss position. It has previously been suggested that the proceeds of its bond listings – which in some cases may explicitly be used as working capital by the firm – have been used to fund this first-loss piece, as well as to top up its provision fund.

Peer-to-peer lender RateSetter raises £13m, Woodford and Artemis lead, (Alt Fi News), Rated: AAA

RateSetter, one of the UK’s “big three” peer-to-peer lenders, has scooped £13m in equity investment from existing backers. Investors in the round included well-known fund managers Woodford Investment Management and Artemis.

The two funds first backed RateSetter with a £20m investment in March 2015, in a round that valued the platform at £150m. This latest round takes the firm’s valuation to over £200m, with £50m in equity capital raised to date.

RateSetter has lent a cumulative total of £1.9bn since launching in 2010, according to AltFi Data, and is widely regarded as one of the UK’s “big three” P2P firms. But while the other two members in that trinity (Zopa and Funding Circle) have recently been fully authorised by the regulator, RateSetter continues to operate under interim permissions. FCA rules dictate that it will need to achieve full authorisation prior to launching its Innovative Finance ISA offering.

RateSetter raises funds as it prepares to list, ( Financial Times), Rated:AAA

The online lender has tapped existing investors for what is set to be its last round of private fundraising as the company prepares to list on the stock market to fuel its growth.
RateSetter, which has raised more than £50m of capital in total, will use the funding to launch its lending product in an Individual Savings Account, enabling investors to lend to borrowers online in a tax-free wrapper.
Funding Circle, which has in the past couple of weeks become the largest peer-to-peer site in the UK, also passed the FCA’s authorisation test last week, paving the way for its Innovative Finance ISA.

UK fintech shrugs off Brexit, trumps Germany, (Alt Fi News), Rated: A

Fintech firms based in the UK have received more than double the overall capital invested into German fintechs since the start of 2016. In fact, investments grew 81.7 per cent year on year from $284m in Q1 2016 to $516m in the opening quarter of this year, according to research by FinTech Global, a consultancy,

Investments, however, in both German and UK fintech companies have hit five-quarter high’s in Q1 2017 with $218m and $516m amount invested, respectively.

Both the UK and Germany raised nearly half of their total respective funding for 2016 in the opening quarter of the year. Therefore, fintech investment in both countries is on track to surpass the value invested last year.

UK fintech investments in Q1 was driven by the $101.8m round raised by Atom Bank while Germany’s largest deal went to deposit marketplace start-up Raisin which raised $32m Series C round.

India’s Wadhawan Group takes stake in Zopa, (P2P Finance News), Rated: A

ZOPA has raised £40m in a fresh equity fundraising round, led by Indian conglomerate Wadhawan Group.

Seedrs has joined Funding Circle and iwoca in partnering with Natwest, (Business Daily), Rated: B

Equity crowdfunding platform Seedrs has become the latest alternative finance provider to join a major Natwest programme that aims to open doors for UK SMEs to sources of finance.

“As the most active equity investor in UK private companies, Seedrs has already funded over 500 investment rounds for fast-growth SMEs, with more than £210 million invested into campaigns on our platform to date.

China

China Minsheng Investment leads $ 262m pre-IPO in P2P lending firm, (Deal Street Asia), Rated: A

China Minsheng Investment Group, one of the country’s largest private investment group, has led a RMB1.8 billion ($262 million) pre-IPO investment round in Chinese peer-to-peer lending company Tuandaiwang. Other investors in this round include Beijing Yisheng Innovation Technology and Beihai Hongtai Investment. This investment brings the company’s value up to RMB10 billion ($1.46 billion), said a report in China Money Network.

Tuandaiwang operates a P2P lending platform, which enables users to lend their saving at a higher investment return rate than traditional saving rates. It claims that individuals and companies have borrowed around RMB78 billion ($11.4 billion) since its launch in 2012 and lenders can make RMB2.3 billion ($335 million) in returns. The company said that it would spend this proceeds on the platform’s development and investment in other tech assets. The investors in its previous rounds with a combined funding of RMB675 million include JD Capital, Dongguan Securities and Giant Investment.

XIAOMI has started a bn Loan Refinancing, (Xing Ping She), Rated: A

Chinese smart phone giant XIAOMI has started a three-year loan refinancing for a 2014 loan agreement, with the maximum amount is $1bn. The borrower is XIAOMI(Hong Kong), and the parent company XIAOMI acting as the guarantor. The deadline for underwriter is 23^rdJune, and the roadshow will be held on 1^st June in Hong Kong. Deutsche Bank and Wing Lung Bank jointly served as book runners. The loan has been divided into two parts: Part A for regular loans ( $500 million) , and part B for revolving credit loan ($250 million).

It was revealed that XIAOMI’s $1 billion three-year loan in Oct 2014 was the company’s first show in the loan market. Deutsche Bank, J.P. Morgan Chase & Co. and Morgan Stanley was the initial leading and bookkeeping banks, and other 25 banks were involved in the loan.

P2P Company Tuandai Raised 0m in a new round of financing, (Xing Ping She), Rated: A

Tuandai Group has closed a new round of financing of $270m. The financing was led by Minsheng Capital with $104 million.

Tuandai was set up in 2011, and transformed its core business to P2P Lending in October 2016, dividing its services into asset sector and the internet sector. In early time this month, Tuandai changed the name of their platform from “Tuandai Network” to “Tuandai Network丨 P2P Lending Investment”, and would be engaged in the intermediary business about network lending information.

European Union

Banco BNI Europa boosts European SMEs with €10M investment in Portuguese peer-to-peer platform RAIZE, ( Email), Rated: AAA

European Bank BNI Europa signs strategic partnership with Portugal’s largest peer-to-peer lender RAIZE

Portugal/Eurozone: Portugal’s economic recovery fuels interest in SME lending through peer-to-peer platforms

Agreement follows a £45M deal with the UK’s largest invoice peer-to-peer platform in May, 2017

RAIZE (www.raize.pt) is Portugal’s largest peer-to- peer lender focusing on SME lending. The online lender operates its own payments institution licensed and regulated by the Bank of Portugal and currently has more than 10,000 investors lending to SMEs. The platform expects to lend more than €15 million in 2017.

Korea

Local start-up Lendit raises 10 billion won, ( Korea JoongAng Daily), Rated: A

Lendit, a leading marketplace lending start-up, said Monday that it has raised 10 billion won ($8.9 million) from a group of investors including Altos Ventures, a Silicon Valley-based investment firm. Local venture capital fund YellowDog and Collaborative Fund, a New York-based firm, also contributed to the Series-B financing.

“We aim to cement Lendit’s position as the top lending startup in consumer financing by using the funds to boost R&D and foster professionals for tech and finance,” said Kim Sung-joon, CEO & founder of Lendit.

Founded in 2015, Lendit is the country’s top marketplace lender in the consumer lending segment with accumulated loans at 47.4 billion won as of May 29.

Australia

‘Green loan’ marketplace receives $ 20m, (Investor Daily), Rated: A

RateSetter’s new marketplace seeks to provide “more affordable finance options” for the purchase of energy efficient products by both businesses and individuals.

The marketplace has been given a ‘kickstart’ with a $20 million cornerstone investment from the government’s Clean Energy Finance Corporation (CEFC), RateSetter said in a statement.

It is anticipated that thousands of everyday Australian investors who want to earn attractive returns, while improving the country’s energy footprint, will participate in funding green loans via the marketplace.”

India

RBI guidelines on P2P lending platform likely by June-July, ( Live Mint), Rated: AAA

The Reserve Bank is expected to come out by June-July with guidelines to regulate the Indian peer-to-peer (P2P) lending market. The RBI had floated a consultation paper in April 2016 on the Indian P2P lending that has been taking roots in India.

At present, the status is that “it has gone from the RBI to the Ministry of Finance. The Ministry of Finance has put it out to the Ministry of Corporate Affairs and they have to come back (on the subject matter),” Mathews said. Faircent.com, which went live in 2014, has so far facilitated lending to the tune of Rs20 crore from its platform and set a much bigger target for the current fiscal. “So far, we have facilitated around Rs20 crore loans from Faircent platform.

This year we are scaling, we have to do some Rs50 crore of loans this fiscal,” he added. Next week, the company will also enter into loan against property (LAP) domain and match prospecting borrowers and lenders through Faircent.com, Mathews said.

“Constructive Synergy”: Indian P2P Lender Faircent Introduces New Student Loan, ( Crowdfund Insider), Rated: A

Indian online P2P lending platform Faircent.com announced a new semi-secure student loan product in collaboration with Bangalore-based micro-lending startups.

Under the partnership, college students may fund purchase of items such as laptops, books and smart mobile, by registering their loan requirements on the platform at a “reasonable rate” with a flexible loan period ranging between 6 and 36 months.

Singapore

Singapore’s biggest marketplace lender hits S$ 40 million originations, ( Alt Fi News), Rated: A

Singaporean marketplace lender Capital Match has hit S$40 million in loans funded and has started rolling out infrastructure to onboard European investors.

“The traditional SME lending sector in Singapore is highly inefficient and oligopolistic: at present the largest four banks account for 80 percent of SME Singaporean banking relationships,” Tobias Fischer, Director of Corporate Development, told AltFi.

“[But] banks have been more strict in their lending policies so there has been huge demand on the borrowing side.

“As a result [SME lending] is incredibly profitable, so there are great opportunities for investors to achieve excess returns.”

News Comments

Today’s main news: SoFi raises $500M for international expansion. Funding Circle business jumped 50% post-Brexit. Bank lending in UK soars.
Today’s main analysis: My adventures in various p2p lenders. How P2P funds have fared over the last 12 months.
Today’s thought-provoking articles: Rise of P2P in Korea puts government on edge. Canadian regulators welcome FinTechs.

United States

SoFi raises $500 million for global expansion. GP:” The interesting story here is the purpose of the raise: International Expansion.” AT: “SoFi’s plans to expand internationally is good news for the industry. I’m excited to see where they go, and how far.”
My adventures in FinTech. GP:” Interesting coverage of Upstart, Acorn and a few others. ” AT: “Very interesting personal experience story of an investor who put money into three different platforms.”
Orchard weekly online lending snapshot. GP:” Nothing new”.
3 industries disrupted by crowdfunding. GP:” SMB, unsecured personal and real estate lending. Nothing really new.” AT: “The idea of farmers crowdfunding farm equipment is an interesting idea. Could ag crowdfunding disrupt farming and facilitate the growth of smaller farms? I also think the idea of crowdfunding home appliances is interesting.”
AutoFi unveils online multi-lender sales solution for used car dealers. AT: “This could be a step toward a viable online used car marketplace. As long as they fair better than Beepi, why not?”
Lending Club alters grace period for borrowers. GP:” Small tweak, not very significant, but a change worth thinking about none the less.”
RentRange identifies 25 markets with largest rental rate increases.

United Kingdom

Brexit terrified Desai, then FC business jumped 50%. GP:” Another proof that it’s very difficult to predict the effect of macro events on a business. We all thought that Brexit will either have no effect or reduce volumes. On the contrary.” AT: “Very interesting. Not only has Brexit not affected Funding Circle negatively, but there is at least a positive correlation.
Bank lending soars in January. GP:” This article is very missleading as there is strong seasonality between December when people are focused on spending and January when people are focused on how to pay for their past spendings. I would like to see a comparison of Jan 2017 vs Jan 2016 and not vs Dec 2016.”
How P2P funds have fared in the past year. GP: “A gread summary worth a read. I do think they are cheap and the returns are decent. The discounts seem like a good time to get in.”
RateSetter forms partnership with accountancy advisor. AT: “This could very well be a boon to RateSetter’s business. The fact that TaxAssist has 290 retail locations in the UK should provide the online lender more visibility in the market. It looks like a great partnership.”
I’d use P2P lending to beat the banks.
Welendus live on Seedrs. GP:” Seedrs seems very popular for lenders for capital.
The Funding Network celebrates 15th anniversary.

International

MPL news roundup from AltFi. AT: “Things are looking good in the UK, overall.”
FinTech that make banks better.

Australia

OnDeck exec delivers keynote at AltFi Australasia. GP:” The main message is: we need more transparency in the data, more data freely shared. I entirely agree.”
FinTech Business Awards winners announced.

China

Day of reckoning is nigh for FinTech startups.

India

Asia

Canada

Canadian regulators welcome FinTech amid rising global oversight interest. GP: ” US companies shouldn’t discount the Canadian market. It’s a good place to extend to easily.”

News Summary

United States

SoFi Raises $ 500 Million Led by Silver Lake for Global Expansion (Bloomberg), Rated: AAA

Social Finance Inc. said it raised $500 million in a financing round led by private equity firm Silver Lake Partners. It plans to use the funds for international expansion of its online lending business and development of new financial products.

Other investors in the round include SoftBank Group Corp. and GPI Capital, and the funding brings SoFi’s total investment to $1.9 billion, the company said. Several sovereign wealth funds from countries in Asia and Europe invested as well, said Mike Cagney, SoFi’s chief executive officer and co-founder. The international group will purchase SoFi’s loans in addition to taking an equity stake, he said.

SoFi said it plans to develop new personal finance tools, including mobile deposit, credit and payment products that will be rolled out this year. It also anticipates bringing its lending products to Australia and Canada by the end of the year.

My Adventures in Fintech (Wealth Management), Rated: A

Two major factors have come together to make fintech platforms so popular. First, the rise of smartphones puts the apps right into the hands of millions of users who feel alienated by slow-moving traditional banks. Second, the financial crisis of 2008 eroded the borrowing ability of many middle-class individuals and small business owners as banks curtailed unsecured lending and other high-risk loans.

From 2010 to 2015, investment in fintech has grown from $1.8 billion to $22.3 billion, according to Accenture.

Lending Club

I started investing in Lending Club in 2011. My experience is limited to being an investor. I am a fractional owner in a total of 3,167 notes (see Figure 1).

So, if any one note defaults, my downside is generally limited to $25. Of those notes, 1,387 are current (that is, the individual borrowers are current in their payments), 1,269 notes have been fully paid off, and 432 notes have defaulted and been charged off.

My 12.97 percent net annualized return will probably be reduced by 1 to 2 percentage points given the predictable defaults, but I’m very satisfied with the results to date.

I faced two major issues in managing a P2P account. First, how to select notes. Second, how to manage the small amounts of cash that accumulate every day. The Lending Club website lists tens of thousands of notes available for investment at any time, each with details about the underlying borrower such as income, credit score, whether he or she owns or rents, state of residence, purpose of loan, etc. At first, I inspected each note and selected the ones that appealed to me, but that can be a full-time job and is probably counterproductive. It’s much easier, and probably more reliable, to trust the Lending Club automated investment system.

Upstart

Almost all Upstart borrowers are recent college graduates at the beginning of their careers. This population has a much thinner conventional credit history, so Upstart developed an algorithm that looks beyond traditional credit data such as earning potential and employability. To invest with Upstart, you must be an accredited investor.

But lately, the platform is encouraging investors to determine a risk grade then automate the selection. Risk grade notes run from AAA to D. Almost every borrower signals that they intend to use Upstart funds to consolidate high interest credit card debt.

I have funded on a fractional basis 140 three-year notes from exclusively Grade B borrowers. Eight notes have matured. One borrower has defaulted. The value of my account is $13,933. I’ve made $452 in interest and my annualized IRR is 7.24 percent (Figure 3). Based on Upstart’s performance statistics (Figure 4), my performance of 7.42 percent is apparently better than the average across all notes (5.72 percent).

Acorns

I easily linked Acorns with my checking and credit card account more than a year ago. Since then, it has been systematically rounding up my purchases to the next dollar and investing the difference in a diversified portfolio of ETFs.

At the end of a year, I had contributed a total of $283.57, and earned $3.17 in dividends. I’ve paid a total of $8 in fees. The current value of my account is $282.23—not too great of a return until you consider I chose the “conservative” balanced portfolio with 39 percent in government bonds and 18 percent in corporate debt.

Fees are $1 per month or 0.25% per year, depending on your balance. The app is free and fees are waived to college students for four years.

Weekly Online Lending Snapshot – February 24, 2017 (Orchard Platform), Rated: AAA

In China, as reported by the Beijing Bureau of Financial Work, nine out of 10 of the roughly 5,000 lending platforms across the country may not survive the coming year as the government begins a well-telegraphed tightening ofregulatory supervision of these lending platforms. NatWest Bank, in the U.K., announced the launch of a digital platform for small and medium-sized businesses to apply for unsecured loans up GPB$150,000. Australian small business lender Prospa raised an AU$25 million funding round led by Sydney-based AirTree Ventures valuing the firm at AU$235 million.

3 Industries Being Disrupted by Crowdfunding (Entrepreneur), Rated: A

1. Corporate finance: From software to farm equipment

Large finance organizations can use it as a catalyst for gaining small businesses who seek to harness leased products that are tailored to them specifically. What’s more, the lower cost credit of the products they offer will appeal more to businesses that pay sky-high APRs.

For leaseholders of larger equipment, crowdfunding platforms will allow leaseholders such as farmers to finance crops and equipment from other farmers and associates.

2. Real estate: From housing to business establishments

Before crowdfunding, closing an actual real-estate deal required back and forth passing and signing of documents among lawyers. Beyond being slow, the process often added up to thousands of dollars in legal fees. Crowdfunding allows businesses of all sizes to bypass the monotonous process and dodge expenses. What’s more, real-estate crowdfunding allows potential investors access to a wider array of deals.

3. Consumer lending: Cars and home appliances

For financial institutions, this means learning to leverage a crowd’s interest to inform their lending offers. As the trend continues, new crowdfunding platforms will pop up to cater to specific lending verticals. Imagine a crowdfunding space where consumers can get loans for anything related to transportation or kitchen appliances. In this way, brands will be able to save on financing costs while gaining on capital returns.

AUTOFI UNVEILS ONLINE MULTI-LENDER SALES SOLUTION FOR USED CAR DEALERS (iLendingDirect Email) Rated: A

Today AutoFi, a financial technology company that is transforming the way cars are bought and sold, announced the launch of the first fully online sales and multi-lender financing solution for used car dealers. Financing on AutoFi’s platform will be provided by its lender network of banks, speciality lenders, and credit unions. Today, the company announced that its credit union financing will be offered in partnership with iLendingDIRECT.

The AutoFi platform is the first online point-of-sale solution for auto finance. It allows customers to purchase and finance a car completely online, either through a dealer’s website or an in-store digital experience. The company recently announced the world’s first online car sales and financing solution for new car dealers in partnership with Ford Motor Credit. Today’s announcement further expands AutoFi’s ability to serve the multi-billion-dollar used car sales market through its partnership with iLendingDirect.

AutoFi’s platform will now allow used car buyers to research a vehicle on the dealership’s website; select “Buy Now”; receive an automated credit decision; and get loan offers from banks, specialty lenders and iLendingDIRECT’s credit union network who compete for the car buyer’s business in real time.

Consumers can then customize their financing deal by selecting down payment and loan terms; choose vehicle protection products; and e-sign all financing documents online. The new platform gives used car dealers and buyers the ability to transact online with competitive financing options in a fully automated process.

Lending Club Alters Grace Period for Borrowers (Crowdfund Insider), Rated: A

Lending Club (NYSE:LC) has tweaked the way it manages the “grace period” for borrowers when they make payments past the due date. Previously, borrowers received a 15 day grace period for any penalties on payments less than 15 days late. Beginning today, Lending Club requires borrowers to pay the additional accrued interest as a result of their late payment.

RentRange Identifies 25 Markets with the Largest Rental Rate Increases (MarketWatch), Rated: A

RentRange, one of the premier providers of market data and analytics for the housing industry, today released data ranking the top 25 U.S. Metropolitan Statistical Areas (MSAs) by average rental rate increase for single-family1 homes between the fourth quarter (Q4) of 2016 and the same quarter in 2015. The data analysis also identified the average vacancy rate within these markets in Q4 2016.

The Q4 2016 RentRange® data identified rental rate increases in areas like Cape Coral and Portland, both of which moved up the list into the top five, as well as newcomers including McAllen, Denver, Boston, Nashville and Miami. While rents remain high in the Bay Area, San Francisco dropped several positions, indicating that the year-over-year rent change was not as significant as seen in past years. Comparatively, San Jose made the list as a new addition in Q4 2016.

Analyzing the average vacancy rate, which demonstrates the percentage of all available units in a rental property that are vacant or unoccupied at a particular time, shows that the highest rates, as reflected from the list, are seen in the Southeast region, where vacancy rates range from 10.5 percent in Charleston to 20.4 percent in Myrtle Beach. In these areas, builders and investors may need to compete for a limited number of renters. An oversupply of new properties can drive up the vacancy rate and eventually push rental rates down. This scenario is currently happening in Myrtle Beach, where more than 3,100 new homes were built in 2015, a 94 percent increase compared to two years earlier.

United Kingdom

Brexit Terrified This CEO. Then Business Jumped 50% (Bloomberg), Rated: AAA

At sunrise on June 24, Samir Desai rushed to his offices near St. Paul’s Cathedral in London. Britain had just voted to quit the European Union and he knew his staff at peer-to-peer lender Funding Circle Ltd. would be freaking out.

As the pound tumbled and the government quaked following the resignation of Prime Minister David Cameron, Desai walked the floor of Funding Circle’s whiteboard-decked offices, fielding anxious questions. The non-British EU citizens feared they’d have to leave the country. The sales team feared that investors funding the firm’s loans to small businesses would bail.

In the eight months since the Brexit vote, Funding Circle has been on a tear. The firm originated more than 530 million pounds ($685 million) in loans during the second half of 2016, a 50 percent jump from the same period a year earlier, according to AltFi Data Ltd., which analyzes the British peer-to-peer industry. In the fourth quarter, Funding Circle’s U.K. division became profitable for the first time.

The question now is whether Funding Circle’s post-referendum run has legs. Meekings theorizes that volume has been driven by the Bank of England’s decision to lower interest rates to 0.25 percent from 0.50 percent in August. That spurred more retail investors to chase yield in the firm’s loans, which are returning an average 6.2 percent annually. Meantime, credit-hungry borrowers may also be flocking to Funding Circle as banks retrench from lending to small companies.

The great British credit boom: Bank lending soars in January (P2P Finance News), Rated: AAA

Figures from the British Bankers Association (BBA) showed that total consumer borrowing growth rose to £538m, more than doubling from December’s figure. This was primarily driven by the increase in personal loans and overdrafts, which rose to an eight-month high of £422m.

Meanwhile, bank lending to businesses rose by £3.4bn in January, which was the largest increase since January 2015.

Banks tightened up lending after the financial crisis which had a detrimental impact on economic recovery, although it created an opportunity for the peer-to-peer lending sector.

At 44,657 in January, mortgage approvals for house purchases were up 18.6 per cent from their August 2016 low, although they were still 2.5 per cent below the January 2016 level.

Gross mortgage borrowing came in at £13.8bn, with re-mortgaging approvals 15.7 per cent higher year on year.

How P2P funds have fared over the past year (P2P Finance News), Rated: AAA

Net asset value (NAV) returns range from three per cent to 20 per cent while discounts to NAV have fallen as low as 20 per cent.

P2P Global Investments

Almost 60 per cent of the assets are in the US, with 23.2 per cent in Europe, 8.7 per cent in cash, 6.4 per cent globally and 2.2 per cent in Australia.

Over the past 12 months its NAV has grown 5.34 per cent and it is currently on a discount to premium of 20.8 per cent.

SME Loan Fund

Almost two thirds, 63 per cent, of assets are in the UK, with 13.1 per cent in the US, 18.6 per cent in Europe and the rest in cash.

The trust has seen its NAV total return grow by seven per cent over the past 12 months and it is currently trading at a discount to net asset value of 10.3 per cent.

Ranger Direct Lending

The ordinary income share class is currently on a discount to NAV of 10.5 per cent while the zero preference and c share classes are on 2.2 per cent and 1.2 per cent respectively.

Funding Circle SME Income Fund

Its regional exposure is currently broken up as 73 per cent in the UK, 17 per cent in the US, two per cent in continental Europe and eight per cent in cash.

It has seen its NAV deliver total returns of 6.7 per cent over the past 12 months and is currently on a premium of 1.6 per cent.

VPC Specialty Lending

The investment trust is composed of 36 per cent marketplace loans and 39 percent in balance sheet investments, with the rest in shares, securitisation and cash.

Its NAV has returned 3.1 per cent over the past year and it is trading at a discount to NAV of 19.4 per cent.

Honeycomb Investment Trust

It has returned 8.7 per cent over the past 12 months and is on a premium to NAV of 7.7 per cent.

RateSetter Forms Partnership With Accountancy Advisor TaxAssist to Engage With SMEs (Crowdfund Insider), Rated: AAA

Online lender RateSetter has formed a partnership with accountancy advisor TaxAssist Accountants to help engage with small and medium-sized enterprises (SMEs). TaxAssist Accountant notably specializes in all businesses with a turnover of £2 million of less. It has more than 290 locations throughout the UK.

I’d use peer-to-peer lending to beat the banks (Moneywise), Rated: A

This growing market, which is now regulated, is dominated by three players – Funding Circle, RateSetter and Zopa. The annual interest on offer varies, ranging from 2.9% (RateSetter) through to in excess of 7% (Funding Circle), but so does the degree of risk you will take.

While the 2.9% interest on offer from RateSetter comes with the backing of a ‘provision fund’ (designed to protect your capital from losses if loans turn bad), the 7% from Funding Circle has no such underpin. If a loan goes bad, your capital could be compromised.

My peer-to-peer money is spread across 16 businesses operating in everything from retail through to IT. It is effectively an investment play on UK plc. When the economy is strong, my companies are more than likely to keep repaying the loans they have secured.

Welendus Live on Seedrs (Welendus Email), Rated: A

I am pleased to announce that Welendus is now back live on Seedrs. I would like to invite you to visit our campaign and watch our video at (

The Funding Network celebrates 15th anniversary (UK Fundraising), Rated: B

The Funding Network celebrates its 15^th anniversary this March, having so far raised over £9.8 million for more than 1,450 social change projects through its live crowdfunding events since its 2002 launch.

TFN is celebrating with a special event on 16^th March at the Funding Circle’s Funderbar in London.

International

Marketplace lending news roundup 27/02/17 (AltFi), Rated: AAA

In the UK, the overall market for alternative finance has just ticked over £10bn – including crowdfunding – in terms of the amount of money lent and invested into the equity of companies via crowdfunding platforms.

UK P2P business lending Growth is still in rude health as proven by AltFi Data’s number crunching, in the same week that Funding Circle tops £2bn mark. In the funds world, P2P GI has continued its share buyback strategy while the SME Loan Fund may be about to see an investment management change by New York-based SQN.

Not so good for US-based OnDeck, which despite a surge in Q4 lending is looking to cut jobs amid rising losses.

Financial technologies that make banks better (Finextra), Rated: A

A Reykjavik-based company strongly commits to improving the way the banks function. Meniga is, mostly, known for its money management software that allows the banks to start offering great personal and business financial management applications to their clients without investing heavily into the development.

Recent developments in Payment Services Directive 2 make banking APIs so important as never before. On the one side, banks are required to provide open technology for accessing their customers’ data to third parties. And, instead of investing into the development of open APIs, a bank can pick the technology up from Kontomatik as it already has the API in place. On the other side, smart banks will not only release open APIs but will also do everything at their disposal to benefit from the access to the data of other banks.

Started in 2009, it has taken Kabbage roughly 5 years to come up with a white-label solution that allows financial companies to use its technology for assessing the risks and issuing the loans online. With white-label technologies from Kabbage, a bank should be able to launch a great B2B lending platform without investing into development, testing and implementation of the modern risk assessment models.

Australia

US Market leader delivers keynote address to AltFi Australasia (The Bull), Rated: A

A reluctance by banks and government agencies to share data with alternative lenders is driving up the cost of borrowing in Australia, a global fintech leader told the AltFi Australasia conference in Sydney today.

Rob Young, Senior Vice President, International at OnDeck Capital Inc, said that a lack of open data is a major issue for alternative lenders in the fintech space.

He explained that in Australia, there is limited sharing of credit, banking or tax data, while the UK’s open data regime has forced banks to share customer data and open up their APIs to third parties.

“The UK is a great example of where open data has been in place for several years, the alternative finance sector is flourishing, and even the banks have benefited by opening up cross-sell opportunities within their own businesses. It’s a win-win for the lending sector and its customers,” Mr Young said.

Fintech Business Awards announces 2017 winners (EconoTimes), Rated: B

Midwinter Financial Services that has developed a range of cutting edge financial planning software packages, has been recognized for the Fintech Business Excellence Award for company category, having been awarded the highest points of all winners.

Other awards in the fintech category include Fintech Mentor of the Year that was awarded to Claire Wivell Plater from The Fold Legal and Fintech Start-Up of the Year given to Valiant Finance. Apart from this, Crowdfunding Innovator of the Year, Insurance Innovator of the Year, Payments Innovator of the Year, Investment Innovator of the Year, among other awards were also recognized.

China

The day of reckoning is nigh for fintech startups (SCMP), Rated: A

What started as a venture capital-driven, primal scream against the perceived backwardness of traditional banks and financial institutions has run into problems that no other new technology has faced.

The last two years saw an expansion of incubators and platforms to cultivate fintech startups. And this year, I am observing clues in major fintech centres where leaders are quitting startups and bank sponsored vehicles.

The hope and dream of being able to disintermediate financial institutions and the entire industry is unrealistic given how much protection and restriction is needed to prevent another financial meltdown that threatens to cast a 1930s style depression across the world.

Besides BlackRock’s acquisition of the roboadvisor site FutureAdvisor in 2015 (valuing it between US$150 million to $200 million) other asset managers like Fidelity and Schwab believed they could accomplish roboadvisor front ends on their own.

So approaches and results are very mixed.

India

Fintech aims to facilitate Rs. 100 cr. loan in 100 days (The Hindu), Rated: A

Peer-to-peer lending platform Oxyloans is targeting to facilitate disbursement of Rs. 100 crore as loans in 100 days beginning March 1. The firm, which neither mobilises deposits nor disburses loans, earns revenue from the commission — 1.5% from lenders and 2.5% from borrowers — it charges.

The loans disbursed through the platform are typically short-term, from 6 months to 11 months, and the rate of interest ranges between 14% and 36%.

India to Get Its Own Fintech Hub in Vizag (NewsBTC), Rated: A

India has been making a lot of noise in the banking, fintech and cryptocurrency sector lately. The country, currently heading towards a financial revolution now has plans to set up a fintech hub. The proposed fintech hub will be established in the city of Vizag.

According to reports, the concerned government has allocated resources to set up the necessary infrastructure in the “Fintech Tower”. Slated to go live next month, Thomson Reuters and Visa will be among the first few companies to set up shop in the Fintech Tower.

Asia

Rise of peer-to-peer financing puts gov’t on edge (Korea JoongAng Daily), Rated: AAA

Starting this week, a guideline that sets ground rules for P2P platforms will go into effect nationwide. Other steps to safeguard investors from risk include ongoing efforts by the Financial Services Commission, the country’s financial regulator, to make credit businesses linked to P2P platforms register with the FSC regardless of size.

According to Crowd Institute, a research center in Korea dedicated to P2P finance, the P2P market size grew to as much as 700 billion won ($616 million) by January this year, growing almost 14 times from 2015. The number of P2P platforms also skyrocketed to 131 in January this year from 16 in January 2016.

The Crowd Institute projects that by the end of this year, the size of the market will grow to as large as 1.5 trillion won.

Of the 700 billion won already in the P2P market, over half, or around 408 billion won, is in real estate, according to the institute.

Roof Funding’s model is project financing, which means investors crowdfund a project to build a building from scratch. If the builder goes bankrupt, the ownership is transferred to the investors, and they can choose to auction off the building or sell the units after completing construction with additional funding.

For instance, interest rates on one-year fixed deposits at local commercial banks as of Feb. 21 range from 1.10 percent to 1.75 percent, according to data from the Korea Federation of Banks.

Despite the rising popularity of real estate P2P platforms, financial authorities in Korea warn that the investments may not be as safe as they seem. In one case, a firm called Money Auction declared bankruptcy last November after it was saddled with debt. Founded over a decade ago as one of the first P2P platforms in Korea, it faced a liquidity crunch after payment delays led the firm to owe over 4 billion won to investors.

Those working in the P2P industry note that many apartments are struggling to attract buyers, and when the market suffers, smaller buildings like duplexes and multiplexes (the main investment targets of most P2P platforms) will likely feel the impact first, jeopardizing lenders’ interest and principal.

Lee complains that some clauses in the guideline are too restrictive. “For instance, about 80 percent of all investment made through January exceeded 10 million won, which is especially the case for real estate P2P projects,” he said. “If investors can only invest less than 10 million won per year, it is possible that the entire industry will take a heavy blow.”

SBXbank to Launch Crypto Currency Marketplace (JakartaGlobe), Rated: A

Smart Banking Exchange, better-known as SBXbank, a London-headquartered company, is set to launch a unique marketplace called “Coinxmart,” in which transactions are done using crypto currency, an alternative digital currency not dissimilar to the old bitcoin.

Abdul Rahman Said, SBXbank’s Asean vice president of marketing, told the Jakarta Globe in an interview on Wednesday (25/2) the company seeks to sink up to Rp 100 billion ($7.5 million) into developing financial technology services that offer not only e-commerce, but also peer-to-peer investment and peer-to-peer lending, all of which will use a crypto currency.

Sedania to buy fintech firm for RM12m (The Star), Rated: A

Technology empowerment company, Sedania Innovator Bhd, has proposed to acquire a syariah-based financial technology (fintech) company, Sedania As Salam Capital (SASC), for RM12 million.

In a statement on Monday, Sedania Innovator said the purchase consideration would be satisfied via RM4 million cash, and RM8 million via the issuance of 25.8 million new Sedania Innovator shares at 31 sen each.

Sedania Innovator said under the proposed acquisition, SASC would provide a profit guarantee of RM1.5 million per year for the financial years ending Dec 31, 2017 and 2018.

To-date, it has processed over 300,000 personal financing transactions worth more than RM25 billion.

Canada

Canadian regulators welcome fintech amid rising global oversight interest (Reuters), Rated: AAA

Recognizing the need to shift its regulatory focus to accommodate the use of advanced technology in the delivery of financial services, the Ontario Securities Commission (OSC) has launched initiatives aimed at providing compliance advice and flexible regulatory requirements for fintechs.

The OSC Launchpad initiative provides some flexibility in regulatory compliance for fintechs with the aim of making it easier for startups to innovate. The types of relief or support available through the OSC LaunchPad include informal guidance on regulatory compliance matters from OSC staff and, on a case-by-case basis, eligibility for time-limited registration or exemptive relief. At the same time the OSC has stated (here) that it will continue to scrutinize fintechs for potential investor protection risks.

While the OSC is the first provincial securities regulator to undertake formal fintech initiatives, other provinces and territories have begun to recognize a need for more flexibility in overseeing fintechs. When Lending Loop, a peer-to-peer lending platform, began in Canada in 2015, it had to obtain approval from provincial securities regulators for a prospectus and comply with other securities-related regulatory requirements. The Toronto-based company subsequently paused its operations and re-launched in late 2016 under an exempt market dealer license (here) that was granted by the OSC.

Authors:

George Popescu

Allen Taylor

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Fintech Companies Should Move On From The Millennials (Forbes) Rated: A

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What are the benefits of IFIsas? (Bridging & Commercial) Rated: A

China

Chinese Rural Fintech Firm Shenma Completes $ 47.3M Series C Round (Chinese Money Network) Rated: A

European Union

Riga-based fintech startup Mintos reaches profitability as it eyes global expansion (EU Startups) Rated: AAA

Swedish fintech group iZettle to seek $ 1.1bn valuation in IPO (Financial Times) Rated: AAA

International

ArthaCoin ICO (ATH Token): Long Term Crypto Lending Program? (Bitcoin Exchange Guide) Rated: A

What’s The Difference Between Trading Crypto VS. Lending Crypto (Finsmes) Rated: A

Australia

Do You Still Only Have One Bank Account? Here’s How Many You Should Have By Now (MyDomaine) Rated: A

India

BigWin Infotech gets P2P lending licence (The Economic Times) Rated: AAA

P2P loan marketplace Finzy wants to change how India sees lending (Your Story) Rated: A

Latin America

Ripio CEO: Reinventing P2P Lending With The Blockchain (PTMNTS) Rated: A

Canada

Fintech company TransferWise to launch borderless debit card in Canada in 2019 (Financial Post) Rated: AAA

News Comments

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United States

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6th Avenue Capital Announces Promotion of Darren Schulman to President (deBanked) Rated: B

Best Egg Teams with Junior Achievement of Delaware on Financial Education Initiatives (Business Wire) Rated: B

United Kingdom

Funding Circle brings second marketplace loan deal (Global Capital) Rated: AAA

KBRA Europe Assigns Preliminary Ratings to Small Business Origination Loan Trust 2018-1 DAC (Business Wire) Rated: A

New UK banks challenge dominance of ‘big four’ (Sky News) Rated: AAA

Ranger Direct Lending rejects investor call to wind up (City Wire) Rated: A

Goji passes £50m in assets (Goji) Rated: A

A lending site where you can rent anything just scored millions in venture capital (Business Insider) Rated: A

Artificial intelligence backed to reduce P2P defaults (Peer2Peer Finance) Rated: A

TURNING TO YOUR PEERS (BQ Live) Rated: A

European Union

Klarna integrates with Magento for streamlined checkout (Payments Source) Rated: AAA

Taaleri increases its ownership in Fellow Finance by 7.3 per cent (Globe Newswire) Rated: A

International

BBVA and Indra deliver the world’s first blockchain-supported corporate loan (BBVA) Rated: AAA

BANKS VS FINTECHS: THE WAR FOR TALENT (International Banker) Rated: A

Deserve Raises $ 50 Million in Debt Financing (Finovate) Rated: A

Fintech for the Financially Excluded? (Stanford Social Innovation Review) Rated: A

APAC

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