Tuesday March 13 2018, Daily News Digest

Lending Club Average

News Comments Today’s main news: RateSetter enrolls 5K IFISA accounts in first month. OnDeck makes CFO transition. Augmentum set to IPO. TD Auto Finance, AutoGravity partner. Ranger Direct arbitration proceedings come to a halt. Investly secures 500K GBP through Seedrs. Today’s main analysis: A visualization of America’s personal loans. Today’s thought-provoking articles: UBS banned from sponsoring Hong Kong IPOs. China’s credit […]

Lending Club Average

News Comments

United States

United Kingdom

China

European Union

International

Australia

News Summary

United States

OnDeck Announces Chief Financial Officer Transition (PRNewswire), Rated: AAA

OnDeck today announced that the Company will appoint Kenneth (Ken) A. Brause as its Chief Financial Officer effective March 26, 2018, as part of a mutually agreed upon transition process between the Company and current Chief Financial Officer, Howard Katzenberg. Katzenberg will serve as an advisor to OnDeck until April 13, 2018, working closely with Brause to facilitate a smooth transition.

America’s personal loans visualized: income, principal, and credit scores (mediathinknum), Rated: AAA

Consider this: The average personal loan given out by loan giant Lending Club is for $15,000 given to a person with a sub-700 credit score and an income of $6,000 per month.

According to Experian, 73% of Americans die with an average debt balance of $61,554. This – on average – includes mortgage, credit card, auto, personal, and student loans. The average personal loan Americans take to the grave is $14,793.

That data is below and the results are fascinating and even daunting, especially for the apparent 73% of Americans who have a monthly payment to make. Read it and weep. Or make some payments.

Lending Club offers personal loans of up to $40,000. But that doesn’t mean everyone is asking for that much. Not does it mean that Lending Club is offering that much.

Interest rates are largely determined by credit score, but the average rate given out ranges from 12-14% with a peak high point in the 2013-2014 timeframe.

TD Auto Finance Partners with AutoGravity to Provide Enhanced Digital Car Buying and Financing Option (Business Wire), Rated: AAA

TD Auto Finance (TDAF), a subsidiary of TD Bank, America’s Most Convenient Bank, today announced a partnership with AutoGravity, a fintech provider modernizing the way consumers buy and finance automobiles. Through this partnership, indirect financing offers through TDAF will be made available to qualified auto buyers using AutoGravity’s digital platform to search for and finance their next vehicle from the convenience of their desktop or mobile device.

Santander Consumer USA And AutoGravity Work To Transform The Car-Buying And Financing Journey (PRNewswire), Rated: A

Santander Consumer USA Holdings Inc. (NYSE: SC) today announced it has reached an agreement with automotive technology leader AutoGravity to streamline and simplify the car-buying process for consumers. Through this agreement, Santander Consumer USA’s indirect finance offers will be available to AutoGravity customers nationwide through the AutoGravity mobile app.

BBVA Compass Express Personal Loan goes digital, opens to consumers in multiple states (BBVA Compass), Rated: A

BBVA Compass, the U.S. subsidiary of the global financial services group BBVA, now offers near instantaneous decisioning and potential same day funding for both customers and non-customers with the footprint wide1 opening of the fully digital BBVA Compass Express Personal Loan.

With the Express Personal Loan, customers and prospects can consolidate debt or fund large purchases with a low-interest personal loan that provides near instantaneous decisioning. Applicants with a BBVA Compass checking account can get same day funding upon loan approval. The loan, which represents months of effort across the entirety of the bank, underscores BBVA Compass’ drive to digital transformation and achieving excellence in customer experience.

The CIO Of The First Global Fintech Company On The Future Of Finance (Forbes), Rated: A

I recently caught up with the company’s chief information officer Bradley Strock, who has been in his role for three and a half years. We discussed PayPal’s transformation into a more customer-centric company, giving customers more choices of funding vehicles. We also covered how PayPal has successfully navigated the shift to mobile finance, resulting in a 50 percent increase in mobile payment volume in 2017.

In January of this year, Strock joined the ranks of board-level CIOs, as he commenced a directorship with $700 million revenue Elevate Credit, Inc., which provides online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700.

Peter High: Could you provide an overview of your role as CIO of PayPal?

Brad Strock: Most people are probably familiar with PayPal. We operate in over 200 markets around the globe. We are on a mission to democratize money and have had a great deal of success over the last couple of years. 2017 has been a great year in particular.

U.S. Fintech FinFit Announces $ 35 Million Senior Credit Facility With Ares Management (Crowdfund Insider), Rated: A

FinFit, a U.S.-based fintech that provides more than 80,000 American companies with a financial wellness benefit platform, announced on Monday the closing of a $35 million senior credit facility with Ares Management. The company stated it has the ability to increase the senior credit facility to $70 million and this capital raise follows a $16 million investment from Bison Capital Partners. Keefe, Bruyette & Woods was the exclusive financial advisor for the senior credit facility.

Colin Walsh of Varo (Lend Academy), Rated A

In this podcast you will learn:

  • How Colin’s background helped prepare him for his banking startup.
  • The differences he saw between what consumers wanted and what incumbent banks were delivering.
  • Why you need to offer a range of core products to move the needle on financial health.
  • How their banking partnership today enables Varo to offer banking products.
  • What banks are not doing well and how Varo is addressing this.
  • The profile of their typical customer.
  • How they are finding these customers.
  • How they are specifically helping their customers get a better handle on their finances.
  • Why Varo applied for a full national bank charter.
  • Details of the personal loan product they are offering today.
  • The traction that Varo has been getting.
  • Who Colin views as the main competition for Varo.
  • His vision for the future of Varo.

‘Women are not a target market’: Confessions of a former finance marketer (Tearsheet), Rated: A

Retail banks are missing out on $15 billion in global revenue thanks to a gender gap in access to checking and savings accounts.

A BNY Mellon report published last week in collaboration with the UN, cites flaws in design and marketing that make financial products less accessible to women than they are to men.

The report identifies gender gaps on other products; financial institutions are missing out on another $7 billion in credit card revenue, $14 billion in personal loans and $4 billion in housing, the report says.

Cloud Lending Solutions Recognized as Top 10 Best Performing Salesforce Solution Provider (Business Wire), Rated: B

Cloud Lending Solutions was recognized as a “Top 10 Best Performing Salesforce Solution Provider” of 2017 by Insight Success Magazine.

 

Eastern Bank-created fintech Numerated lands two new bank clients (American Banker), Rated: B

Numerated Growth Technologies, the online lending software startup that started life as an incubator within Eastern Bank, announced Monday it has two new clients, Franklin Synergy and MidFirst Bank.

These two additions bring the number of bank clients Numerated Software has landed to seven.

 

 

Fundbox Announces New Credit And Payments Solution To Bring $ 4.5 Trillion SMB2B Transactions Into 21st Century (Fundbox email), Rated: A

Today Fundbox announced the launch of Fundbox Pay, a new payment and credit solution servicing the $4.5 trillion small business-to-business (SMB2B) transactional market in the U.S. By addressing SMB’s lack of credit access and by facilitating credit payments between buyers and sellers, Fundbox Pay provides the 21st-century infrastructure to unlock the trapped value in the SMB2B economy.

Caliber Home Loans Launches Mobile Platform (PRNewswire), Rated: A

Caliber Home Loans, Inc. (“Caliber”) today announced the launch of a new mobile platform. Featuring three mobile phone apps customized for three user groups – borrowers, the Caliber sales force and their business associates – all users receive real-time information and the ability to respond from virtually anywhere. Caliber processes data from all three apps on the back end, which enables efficient and effective communication across the loan process.

 

 

Home Invest: When Did Investing in Rental Property Online Become Cool? (Digital Journal), Rated: B

When Home Invest entered the picture, that’s when. Home Invest allows you to run your next renovation from your laptop only, never having to walk your rental investment property.

United Kingdom

Zopa investor set to enter £94m fintech fund onto London Stock Exchange (Peer2Peer Finance), Rated: AAA

A NEW investment trust dedicated to backing fintech start-ups is set to list on the London Stock Exchange on Tuesday.

Augmentum Fintech has raised £94m through an initial public offering (IPO) alongside a Seedrs crowdfunding round that raised £695,000.

The company’s investment objective is to generate capital growth over the long term through investment in a focused portfolio of fast-growing and/or high potential private financial services technology businesses based predominantly in the UK and wider Europe.

RateSetter sees over 5,000 IFISA accounts opened in first month (Peer2Peer Finance), Rated: AAA

RATESETTER has revealed that over 5,000 Innovative Finance ISA (IFISA) accounts were opened in the first month since the product’s launch.

Ranger Direct Arbitration Proceedings Halted After Bankruptcy Filings (Interactive Investor), Rated: AAA

Ranger Direct Lending Fund PLC said on Monday Princeton Alternative Income Fund LP and Princeton Alternative Funding LLC filed voluntary petitions of bankruptcy last Friday, after arbitration proceedings following a provisional take over of a loan portfolio.

The company said that it was “disappointed” the bankruptcy filing has stopped the first phase of the arbitration, but believes Princeton’s portfolio will be investigated and the investments the fund has made will be compensated.

Starling and TrueLayer integrate for open banking (Finextra), Rated: A

Upstart challengers continue to lead the way in the UK’s open banking space, as API specialist TrueLayer integrates with Starling to enable businesses to access customer account data.

The Starling tie-up means that the bank’s customers can now share their data to use products created by these developers – including income verification tools, lending products and collated financial dashboards. The partners stress that account information will only be accessible when a customer chooses to use a new product and actively agrees to share their information through an explicit consent.

HSBC hopes to launch ‘open banking’ app within months (Financial Times), Rated: B

HSBC will launch a new app that centralises information about customers’ accounts — even those held with rival lenders — as early as next month, becoming the first major UK bank to take advantage of new regulations designed to boost competition and make it easier to switch providers.

The bank has set a target of the first week of May to release the “Connected Money” app, but Stuart Haire, HSBC’s UK head of retail banking and wealth management, told the Financial Times that he was hoping to make it widely available by mid-April.

 

 

 

 

Direct lending fund beats dividend target, launches new fundraise (AltFiNews), Rated: A

The RM Secured Direct Lending fund is looking to raise new capital through the issuance of new C shares and Zero Preference shares, according to regulatory filings.

Launched back in December 2016 raising £50.6m, the fund has raised another £30m through a C share issue in October 2017 but its managers have said on several occasions that the strategy can be scaled up significantly.  The fund has clocked up a 4.2 per cent dividend pay out last year beating its 4 per cent target.

How open APIs are paving the way for PFMs to succeed in Europe (Tearsheet), Rated: A

On Thursday, U.K. personal finance app Emma — which just launched in beta in December — announced a data-sharing agreement with challenger bank Starling Bank. It’s the second such agreement this year after a similar one with challenger bank Monzo in January.

The company’s two key revenue streams are based off interactions with customer data: referral fees from product recommendations and revenue from future financial products it could launch, including premium features within the app, he added.

 

Savers highlight interest and ROI as top priorities (Bridging & Commercial), Rated: A

The Next Gen: Investors and Savers report by P2P lending platform ArchOver has revealed that two-thirds of UK adults (67%) would call themselves ‘savers’ rather than ‘investors’.

The survey of 2,000 UK adults found that the average saver puts aside £191 a month.

Just under two-thirds of savers (66%) maintained a ‘rainy day fund’, while financing a new car or a holiday (29%) or paying for retirement (27%) were the other main reasons for saving.

The majority of savers (83%) used traditional savings accounts to build their nest eggs, followed by Isas (43%) and pension funds (33%).

China

UBS Hit With IPO Ban In Hong Kong (PYMNTS), Rated: AAA

Swiss banking giant UBS is reportedly banned in Hong Kong from sponsoring initial public offerings (IPOs), reports in Financial Times said Friday (March 9).

The publication cited UBS’s annual report, which revealed the 18-month ban from the Hong Kong Securities and Futures Commission. The regulator also fined UBS $119 million following an investigation into its sponsorship of IPOs for companies listing on the Hong Kong Stock Exchange.

According to reports, the ban comes two years after UBS warned it was also facing a suspension of corporate advisory services in Hong Kong. The bank also faced an investigation in Belgium in 2016 for money laundering allegations.

China’s Credit Crunch (The Diplomat), Rated: AAA

China Rapid Finance is one of thousands of private online micro-lending companies in China which, in recent years, have filled a critical gap in the country’s economy by extending credit to members of the lower and lower-middle classes, who traditionally have not had access to borrowing under the state-owned banking system.

Proponents of the payday and peer-to-peer loans offered by these companies assert that they offer borrowers upward financial mobility and the opportunity to achieve the trappings of a middle-class lifestyle. But the rapid proliferation of lending companies in an unregulated market has also led to widespread over-borrowing and a spate of predatory debt collection practices. More and more borrowers began to default on loans, and financial analysts and government regulators both worried that a growing debt bubble at the basement rungs of the Chinese economy might threaten the general stability of the country’s financial system.

 

European Union

Estonian P2P lender Investly Secures £500,000 Through Seedrs Campaign (Crowdfund Insider), Rated: AAA

Estonian peer-to-peer (P2P) lending platform Investly has successfully secured its initial £500,000 funding target through Seedrs. The equity crowdfunding round has so far attracted more than 375 investors.

Sweden’s VIA SMS to offer loans against crypto holdings (Finextra), Rated: A

CryptoLoan is a smart lending product offering Bitcoin-secured online loans that will allow Bitcoin investors to enjoy the value of crypto assets without selling them. The new product initially will be available for Swedish residents only, but the company is planning to open registration for other European countries shortly.

In the first phase of product development, CryptoLoan will offer online loans with Bitcoin collateral only to Swedish residents, but company development plans include expanding to other European markets shortly as well as enriching the list of accepted collateral with adding other cryptocurrencies. Customers from other European countries are welcome to sign up for news and get an exclusive opportunity to be the first to try the product as soon as it is available in the particular country.

BNP Paribas Fortis partners with Swedish fintech Tink for digital banking (AltFiNews), Rated B

Belgian bank BNP Paribas Fortis has announced it will be integrating tech from Swedish firm Tink to power its mobile banking applications.

International

Scoring with big data (The Edge Markets), Rated: AAA

The use of non-traditional data to churn out credit scores is now expanding beyond the underbanked and unbanked to reach even well-banked individuals who already have a credit score. This pool of data, which is used to discover patterns of users’ repayment behaviour based on their mobile phone and social media usage, is playing an increasingly important role in Asia alongside traditional credit scores.

Based on studies that have drawn a correlation between mobile phone usage and repayment rates, algorithms have been created to predict an individual’s potential for defaults. LenddoEFL is one of the pioneers in this field. It started its operations in the Philippines in 2011 before expanding to other countries with large underbanked populations such as Mexico and Colombia.

Mark Mackenzie, managing director for Asia-Pacific at LenddoEFL, says the company will be announcing a partnership in Malaysia in mid-2018, although he is reluctant to disclose more details.

As pointed out by impact investment firm Omidyar Network in its 2016 Big data, small credit report, it is estimated that individual consumer data production will reach 35 billion terabytes by 2020 — some 44 times the data produced in 2009. It also highlighted a few reports that had observed more than 30 companies globally that are already creating credit scorecards using non-traditional data.

Source: The Edge Markets

New Business Models and Emerging Technologies are Enabling Fintech Companies to Improve Financial Inclusion (The Financial), Rated: A

The report, Financial Inclusion in the Digital Age, was launched today during Money20/20 Asia in Singapore.

Over two billion unbanked adults in the world, representing 38 percent of all adults globally, do not have access to basic financial services and another 57 percent have basic accounts, but do not have access to diversified investments, low-cost payments systems, core household and business insurance, or credit. Financial Inclusion in the Digital Age explores some of the central frictions that prevent greater financial inclusion and financial well-being, and associated technological innovations that are fostering creative new approaches to mitigating these frictions for individuals and small businesses globally.

This serial entrepreneur wants to disrupt peer-to-peer lending, using blockchain (The Next Web), Rated: B

Most recently, he founded Celsius, the consumer credit blockchain-based startup.

The Celsius opportunity

Celsius gives its members the opportunity to use the coins they currently hold as collateral. With the Celsius Wallet, users can secure loans in dollars whenever they want by offering up their cryptocurrency as collateral. In the future, consumers will also be able to lend their crypto to others and earn interest in the process.

 

Australia

Fintech vs Banking: Which sector controls the future of money? (Small Caps), Rated: AAA

 

ApplePay is forecast to facilitate US$200 billion in payments by 2021 and already handles US$50 billion annually. Meanwhile, Amazon is preparing to cut the ribbon on its first chequing account feature by partnering with JP Morgan, a leading US bank.

According to the Australian Financial Review, 84% of millennials would consider banking with a tech giant like Google or Apple. This indicates that the average consumer puts more trust in their search engine provider than their internationally-recognised regulated Tier 1 banking institution, which only reaffirms the scale of the problem banks are now facing.

 

Authors:

George Popescu
Allen Taylor

Loan Supermarket: Taking on LendingTree

SuperMoney personal finance

The traditional bank with limited financial products has given way to a financial supermarket where consumers are spoilt for choice. But hundreds of options also leave them feeling clueless. When it comes to financial decisions, it becomes imperative to have in-depth knowledge about the pros and cons of all the products that are available in […]

SuperMoney personal finance

The traditional bank with limited financial products has given way to a financial supermarket where consumers are spoilt for choice. But hundreds of options also leave them feeling clueless. When it comes to financial decisions, it becomes imperative to have in-depth knowledge about the pros and cons of all the products that are available in the market. Though there are many platforms focused on selling financial services and products, few concentrate on truly helping people make better financial choices. Sensing the opportunity, Miron Lulic launched SuperMoney with the goal of helping “people make smart financial decisions.”

SuperMoney was launched in 2013 in Santa Ana, California. Lulic, founder and CEO, is a serial entrepreneur who is passionate about technological innovation. Prior to this, he founded LoanNow and Swagsy and worked as VP at a tax resolution firm. SuperMoney has no outside investors. Lulic himself has pumped almost $1 million into the business. He does not want to raise capital until the company achieves meaningful scale.

SuperMoney’s Humble Beginnings

When Lulic started SuperMoney, it was nothing but a small personal finance blog. Taking a cue from the Yelp business model, he built a similar platform for personal finance. Using an advanced algorithm, it ranked financial products and companies on multiple parameters. But by 2016, the platform started generating serious traffic, especially for personal loans. Then, in 2017, SuperMoney launched a loan offering engine.

The underlying principle behind SuperMoney is to provide financial transparency and help people make better financial decisions. It has partnered with a handful of lenders, and by using real-time APIs the company scores and rank products offered by those lenders on various parameters, such as origination fees, repayment costs, APR, and more.

SuperMoney’s Technology and Business Model

Since startup, SuperMoney has diversified into several verticals including personal lending, auto loans, student loans, and business lending. It sells clicks as well as leads, but it’s mainly focused on a performance-based advertising model. As such, it only gets paid when advertising partners are successful. The company charges by the loan.

The underlying technology is developed in-house and uses a proprietary segmentation system. SuperMoney has built its own weighted sorting algorithm based on attributes such as user review score, average revenue, and more. This means it is able to store tons of attributes from different lenders and help narrow the target audience for each loan offer. Its partners do not influence ratings and offering decisions. Rather, SuperMoney provides data that helps consumers make better financial decisions for their situation.

With the help of a soft credit pull that does not affect the consumer rating in any way, SuperMoney pre-approves the consumer for multiple offers they can then compare, and pick the best one.

What Differentiates SuperMoney From the Competition

Most consumer finance platforms providing similar services make a profit selling leads to the highest bidder. SuperMoney is more transparent. Instead, it calculates the total repayment cost, interest expense, origination fees, and other lending parameters for the consumer. It directly integrates with all its partners via APIs, which helps give consumers a better perspective in terms of cost associated with each product. This ability to offer apples-to-apples comparison in a clear and transparent manner is the hallmark of the marketplace.

The platform has tasted major success in recent years, and its organic search results have grown exponentially. SuperMoney currently witnesses nearly 1 million visitors per month.

Last April, it launched its personal loan engine and has received financing requests topping $400 million, with close to 1,000 personal loan applications per day. The personal loan has quickly become its biggest vertical. In August 2017, SuperMoney ventured into auto loans. It is also looking at the mortgage space and other niche verticals for future expansion.

Comparison to LendingTree

LendingTree is SuperMoney’s biggest competitor. An online lending exchange that connects consumers with multiple lenders, banks, and credit partners, it is not a direct supplier of loans, but a broker. Their core business model is selling leads to lenders. Lulic believes this is bad for consumers as they are deluged with dozens of tele-callers hawking their products.

SuperMoney is different. It does not let lenders contact the borrower unless the borrower has moved ahead with an offer. Its performance-based model enables them to align interest with end users and partners in a more fruitful manner. Even its marketing strategy is different from other platforms; SuperMoney concentrates on content marketing believing in “quality over quantity.”

Future Trends in Consumer Lending

Lulic believes the industry will witness a prolonged consolidation phase in order for market dynamics to settle. Strong performance of platforms like Golman Sachs’ Marcus will give the banking community self-belief to bring their own direct ventures into this space.

Moving forward, the big solution will be focusing on underserved niches. One such initiative is a dealer financing solution. Lately, a lot of traction has been witnessed in home improvement loans. SuperMoney wants to focus on individual contractors like roof installers, pool installers, and other service providers who do not have good financial solutions at their disposal.

Specialty financers available in the consumer lending space charge high discount rates from contractors, and that has had a ripple effect on contractor’s charges inching higher. To tackle this problem, SuperMoney tweaked its loan offering engine framework to launch a dealer-financing solution with a co-branded landing page. This will help contractors receive multiple competitive offers. It has tested the prototype with 100 dealers and further plans to move into other verticals like elective medical, funeral homes, legal service providers, and more.

SuperMoney also wants to strike additional partnership with banks, add more partners to its marketplace platform, and include dealers for the home improvement space. It is looking to collaborate with a wide variety of financial institutions and financial service providers. If everything goes according to plan, it will raise fresh capital in 2018 to fuel its growth.

Conclusion

The company has laid the blueprint to become one of the leading financial service research tool providers. By venturing into a variety of verticals, SuperMoney has made clear it has big ambitions and wants to become the premier go-to-resource for personal and business finance decisions.

Author:

Written by Heena Dhir.

Friday December 29 2017, Daily News Digest

china mobile payments

News Comments Today’s main news: OnDeck adds BlackRock-managed fund to platform. China imposes order on mobile payments. P2P lending demand booms in Australia. Moneybank launches in Vietnam. Today’s main analysis: India’s startup watchlist for 2018. Today’s thought-provoking articles: 3 trends transforming advisor practices. Is P2P lending in India truly disruptive? 7 fintech predictions for 2018. Canadians’ top priority is paying down […]

china mobile payments

News Comments

United States

China

  • China moves to impose order on mobile payments. AT: “There’s no surprise here. China is all about the regulation right now. While regulations will likely slow the growth of mobile payments in China, the sector will still outpace growth in the U.S.”

International

Australia

India

Asia

MENA

Canada

News Summary

United States

OnDeck Adds a BlackRock-Managed Fund to its Platform of Financing Partners (PR Newswire), Rated: AAA

On December 15, 2017, OnDeck introduced the BlackRock-managed fund as the Class B lender under OnDeck’s existing asset-backed, revolving credit facility with SunTrust Bank. As a result, OnDeck increased the facility’s borrowing capacity to approximately $120 million. SunTrust Bank, the Class A lender under the facility, will act as the administrative agent for both the Class A and Class B lenders.

25 Best Small Business Articles of 2017 (OnDeck), Rated: A

Here are the 25 most read articles from our blog this year. If you missed any of them, now’s your time to catch up.

Which 3 trends are transforming advisor practices? (FinancialPlanning), Rated: AAA

In the face of 2017’s unprecedented opportunities and challenges, advisors have also felt the pressure of three converging forces — and their impact will be heightened in the year ahead.

It starts with the commoditization of financial advice, best exemplified by the growing use of robo advice by both financial advisors and do-it-yourself investors. Second, the downward pressure of fee compression, as consumers demand high-value and low-cost products and services. And third, the continuing consolidation that is reshaping the advisor industry, as firms join forces to achieve greater scale and gain a competitive edge.

In 2018, the impact of commoditization, fee compression and consolidation will lead to a massive shift, shaping the products you use, the portfolios you build, and the very nature of financial advice itself.

CFP Board Revamps Standards, Seeks Comments (Financial Advisor IQ), Rated: A

The CFP Board polled around 1,000 CFP professionals on its initial revision proposal and found that 96% agreed that CFPs should be required to put their clients’ best interest first, according to WealthManagement.com.

The CFP Board is seeking comment on its revised code of ethics and standards of conduct, according to a press release from the board.

5 Trends to Watch in Fintech, Wealthtech and Regtech in 2018 (Think Advisor), Rated: B

  1. Regulation is just beginning.
  2. Technology will continue to converge.
  3. Roles will be blurred.
  4. Enterprise companies will get in the game.
  5. Non-industry brands join in the fun.

Here’s What Over 40% of Millennials Plan to Do With Their Tax Refund (The Motley Fool), Rated: A

Instead, over 40% of millennials have a sensible plan for a windfall that averaged $2,782 across all Americans getting refunds last year. Of course, not every filer will get that much (some even owe) but the 43% of millennials who get a refund will be using it to pay down bills they accrued over the holidays, according to a survey from tax preparation company Jackson Hewitt.

That’s actually a higher rate of using a tax refund to pay down holiday debt than the 31% of the general population polled who gave the same answer to the question “Do you tend to use your tax refund to pay off holiday debt/bills/credit cards?”

In general, you want to keep your credit utilization ratio below 30%. That means you should have more than 70% of your total allotment of credit across all cards available to use.

How Mike Praeger has put AvidXchange — and Charlotte — on fintech map (Biz Journals), Rated: A

When it comes to Charlotte’s business aspirations, homegrown automated payment company AvidXchange hits all the right notes.

SoFi Landing Page (dribbble), Rated: B

China

China moves to impose order on mobile payments boom (Financial Times), Rated: AAA

China’s central bank has tightened rules on mobile payments made by scanning a barcode, imposing restrictions that could slow the explosive growth for Alibaba’s financial services affiliate and that of its main rival, Tencent.

The regulations set daily limits on the amount consumers can spend each day using barcode-based payments. They also forbid “burning money” via subsidies to merchants, which are designed to capture market share from competitors.

China leads the world in mobile payments, most of which are executed by scanning a QR code. While some scans use a specialised point-of-sale (POS) terminal, others occur between mobile phones or when the consumer scans a decal posted near the checkout area.

Source: Financial Times
International

Fintech predictions BI Intelligence got right in 2017 (Business Insider), Rated: A

As 2016 drew to a close, BI Intelligence collated its top five fintech predictions for 2017. As we enter the new year, we’re revisiting them to see how they stood the test of time. Here is what we got right about 2017:

  • Insurtech will continue to ascend.
  • Alternative lending will consolidate around a few big players. Just two of the UK’s largest consumer marketplace lenders, Zopa and RateSetter, 
    Source: Business Insider
    Australia

    Demand for peer-to-peer lending booms (AustralianBroker), Rated: AAA

    Australia’s peer-to-peer lending industry nearly doubled its loan originations this past financial year writing $300m in loans, according to a recent ASIC report.

    More than 18,500 consumers and 201 businesses borrowed $300m in the 2016-17 FY, compared with $156m in 2015-16. More than 7,760 investors provided financing to the platforms.

    The average interest rate charged for these loans was 10.5%. The majority of businesses (77%) were charged an interest rate of between 12-15.99% and the majority of consumers (55%) were charged between 8-11.99%.

    India

    P2P lending in India: Is it truly delivering a disruptive new asset-class? (Economic Times), Rated: AAA

    When we started the P2P business, it was all about reaching out to borrowers who have been untapped by the formal sources of finance. I will get to that in my next point, but during our journey we have realized it was not only about the borrowers, but also about lenders. It was not easy to draw lenders to the model, but once they realized the potential, it was clear to them that P2P was a good alternate source of investment.

    The P2P industry and us included have painstakingly worked to safeguard the lender’s interest, use technology to help lenders take the most informed lending decision and strengthen every process of the P2P value chain. From having bank-grade security to having the best credit verification technologies, P2P in the country has relentlessly worked to make the sector better.

    Borrowers
    When it comes to borrowers, the impact has been more straightforward. P2P has enabled a whole new section of individuals to seek credit. What is interesting is that a large percentage of our loans today, more than 50% is business loans for small and medium businesses.

    Top 7 Fintech Predictions for 2018 (Economic Times), Rated: AAA

    UPI 2.0 – UPI has grown 400X in volume since November last year, proving to be a huge success in terms of consumer adoption. Several entities like banks, fintech players have built their own UPI solutions, contributing to this tremendous growth.

    UPI 2.0 with its two features – biometric authentication and E-mandates aim to transform the way payments are made today.

    E-Mandates – E-Mandates replace the physical mandate system of ECS (Electronic Clearing System), transforming the entire system of direct debit payments. Setting up and managing e-Mandates is fast, convenient and completely digital, reducing the payment processing time by nearly 80%.

    BharatQR – BharatQR can prove to be a boon for offline businesses and small merchants, especially in tier 2 and tier 3 cities to adopt digital payments easily.

    Peer-To-Peer (P2P) Lending

    Artificial Intelligence & Machine Learning in Payments – The trend to use artificial intelligence and machine learning in payments is fast growing. Some of the application areas of these technologies we can envisage in the near future are chatbots, voice-based payments and advanced fraud detection mechanisms.

    Blockchain – The technology can be used across several areas like digital currency exchange, cross-border payments, money transfers and smart contracts among many others.

    Startup Watchlist: 9 Fintech Startups To Watch Out For In 2018 (Inc42), Rated: AAA

    In India, the need for technological disruption in the banking sector is all the more acute, given that over 19% of the country’s population still remains unbanked.

    Forecasted to cross $2.4 Bn by 2020, as per a report by KPMG India and NASSCOM, India is currently home to more than 500 fintech startups, whose collective aim is to attain financial inclusion.

    The Explosive Growth Of Indian Fintech Sector

    Home to more than 462 Mn Internet users, the number of mobile users in India is expected to reach 1 Bn by the year 2020. In fact, it has the greatest market potential in the entire world, as determined by the Harvard Business Review (HBR) in its latest edition of Digital Evolution Index 2017.

    Post the ban on INR 500 and INR 1,000 notes, India witnessed an acute dearth of cash, which in turn caused Internet-enabled cashless transactions to sky-rocket. As reported by Inc42, digital transactions increased 22% almost immediately after the ban came into effect.

    In less than 24 hours after the embargo was announced by PM Narendra Modi-led government, Paytm saw an overwhelming 435% increase in overall traffic. Other digital wallets like PayU India witnessed a staggering 80% jump in transactions, while FreeCharge claimed that the average wallet balance on its platform increased 12 times. MobiKwik meanwhile reported an over 40% increase in app downloads within less than 18 hours of the announcement.

    Faircent

    Till date, lenders on the platform have committed to lend over $4.8 Mn (INR 31 Cr), while borrowers have sought up to $3.5 Mn (INR 23 Cr) in loans. At present, Faircent claims to receive over 225K loan requests per month, with most of them being used for funding businesses, family events, appliance purchases, debt consolidation, among others.

    Kissht

    Conceived in 2015, Mumbai-based Kissht is a fintech startup that provides instant credit to consumers for making purchases at digital points of sale (both offline and online). Through its app, users can buy various items including mobiles, laptops, jewellery, and electronics by opting for flexible EMIs even without a credit card.

    Last month, Kissht raised $10 Mn (INR 67 Cr) in a round led by Chinese investment conglomerate, Fosun International.

    Simpl

    Launched in 2015, Simpl is an online payment instrument that allows customers to make purchases and settle payments online.

    As claimed by the company’s spokesperson, Simpl boasts a customer retention of around 85% overall, which is growing at 50% monthly.

    Here’s how 2017 has been a roller coaster ride for Indian startups (Economic Times), Rated: A

    SoftBank to invest in India through its mega, technology focused $100 billion Vision Fund

    Around 50 employees of Paytm sold shares worth about Rs 100 crore to both internal and external buyers

    Flipkart raises $1.4 billion in funding from Tencent, Ebay and Microsoft

    Paytm raises $1.4 billion from SoftBank; Sees valuation jump to $8 billion

    Snapdeal sells its digital payments platform to Axis Bank, the country’s third-largest private sector lender, for Rs 390 crore.

    SoftBank pumps $2.5 billion into Flipkart, making it the biggest private investment in the country’s consumer technology sector.

    The RBI identifi es peer to peer lending startups under a separate category of non banking fi nance companies and frames rules of operation. Also opens window for applications under NBFC-P2P category

    6 amazing ways personal finance changed in 2017 (Financial Express), Rated: A

    1. Social credit scores
    2. Digital Payments
    3. eKYC and Aadhaar
    4. P2P lending
    5. Algorithmic-driven personal finance management
    6. Bitcoin and Blockchain

    How to get paperless personal loans? (SRJ News), Rated: B

    Among several other activities and banking transactions, personal loans too can be availed online. From applying for a loan to getting it sanctioned, the entire process can be carried out from the comfort of your laptop or desktop. Gone are the days of running around for paperwork and visiting bank branches. The whole process is completely digital;thus, paperless online personal loans are nothing but everyone’s saviour.

    Benefits of online personal loans

    • No physical documents are required
    You just need to upload all the identity proofs along with your bank statement online, to get your loan approved.
    • Quick disbursement route
    If you submit all the required details, along with the application and other statements, your loan can be disbursed as quickly as within 24 hours.
    • A complete online process
    You don’t need to constantly visit banks and wait for days to get your loan approved.
    • No collateral required
    You only need to share your information and documents to get the loan approved, for anonline personal loan these days no security or collateral is required.
    • Flexible tenure options
    You get comfortable EMI option on your loan tenure, starting from 12 to 36 months.

    Asia

    The future of commercial real estate investing: How the investment ecosystem is being disrupted (Moneybank Email), Rated: AAA

    Singapore based consumer finance group Silkway Ventures has expanded its operations to Southeast Asian region by opening a subsidiary in Vietnam. The group announced today that it has launched its online peer-to-peer lending platform Moneybank.vn. Over the next five years the company plans to expand its footprint to other neighboring Asian markets to tap into a potential underbanked consumer base, estimated to be 500 million people.

    Vietnam is the first international foray in the digital consumer lending space for Silkway Ventures. The country has a population of over 90 million people, where demand for consumer finance services is rising rapidly and a large percentage of the population is virtually unbanked. At the same time the rate of Internet and smartphone penetration is already significant. The digital consumer finance model offers greater customer coverage at a significantly lower cost compared to traditional banking channels. The move by Silkway Ventures into the Vietnam consumer finance market offers a welcoming Segway for fintech companies to access the market and drive further development in this sector.

    MENA

    Largest fintech hub to open in Bahrain (Zawya), Rated: A

    A facility opening in Bahrain next February will be the largest dedicated fintech hub in the Middle East and Africa, according to its developer and manager.

    Bahrain FinTech Bay, operated by Singapore-based fintech incubator Fintech Consortium, will be a 10,000 sqft facility which will include a variety of shared infrastructure, such as co-working spaces, the consortium’s Bahrain chairman Missan Al Maskati told the GDN in an exclusive interview.

    Canada

    CIBC poll shows that Canadians’ top financial priority is paying down debt (The Georgia Straight), Rated: AAA

    Once again, a large number of debt-soaked Canadians have told a pollster that they’re going to put repaying creditors at the top of their financial to-do list in the coming year.

    It’s the eighth consecutive year that this has been the Number 1 financial priority of those surveyed for CIBC by the Angus Reid Institute.

    Canada’s household debt to disposable income reached a record of 171.1 percent in the third quarter of this year.

    Authors:

    George Popescu
    Allen Taylor

Wednesday November 20 2017, Daily News Digest

credible

News Comments Today’s main news: SoFi offers 6-month grace period for SoFi ReFi. Zopa to build Open Banking infrastructure. Faircent secures $4M funding round. Assetz Capital launches IFISA. Ping An make big bet on technology. Ant Financial partners with Standard Chartered. Today’s main analysis: Student loan borrowers prefer payments over iPhone X or bitcoin. Who are LendingClub borrowers? (A must-read market […]

credible

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Behind the Investment Platform: The LendingClub Borrower (LendingClub), Rated: AAA

From 2007 through 2017, LendingClub has matched $31 billion investor dollars with 2 million borrowers’ loans.

Source: LendingClub

Today, outstanding credit card and personal loan balances in the U.S. are approximately $960 billion. Of that, two-thirds, or roughly $600 billion, represents interest-earning balances carried month-to-month —the overall addressable population. About half of the addressable population (more than $300 billion) currently meets LendingClub’s target credit profile—a market that we have only just begun to penetrate.

Read LendingClub’s Marketplace Insights report in full here.

Holiday Finance with Lending Club (ABC News), Rated: A

LendingClub Appoints Former Netflix Chief Talent Officer Patty McCord As New Board of Directors Member (Crowdfund Insider), Rated: B

Online credit marketplace LendingClub Corporation (NYSE: LC), announced on Tuesday it has appointed Patty McCord as the newest member of its Board of Directors, effective December 13, 2017.

McCord spent 14 years creating the unique and high-performing culture at Netflix and as the video streaming giant’s Chief Talent Officer, she helped create the Netflix Culture deck and experimented and cultivated new ways to work.

SoFi Now Offering Six-Month Grace Period for Graduates Using SoFi ReFi (Crowdfund Insider), Rated: AAA

On Tuesday, online lending platform SoFi announced it is now offering a six-month grace period for graduates using its newly launched SoFi ReFi program.

ABS investors could pull back from MPLs in 2018 as cycle set to turn (GlobalCapital), Rated: AAA

Interest in marketplace loan ABS from the buyside picked up in 2017, but some investors are now saying that they could sit things out in 2018 as credit concerns grow and a lack of data presents problems in the late stages of the credit cycle.

ABS volumes doubled from $3.4bn in 2016 to $7bn in 2017, with SoFi issuing more than $3bn in deals this year, according to data from JP Morgan. The introduction of multi-seller platforms from SoFi, Lending Club, Marlette Funding, Prosper Marketplace also drove liquidity for the sector, while new …

Fiserv teams with TransUnion for loan origination system (Banking Technology), Rated: A

Financial services company Fiserv and credit reporting agency and risk information provider TransUnion have joined forces, reports Julie Muhn at Finovate (Banking Technology‘s sister company).

Under the agreement, Fiserv will integrate TransUnion’s CreditVision Link to increase precision of scoring and risk modeling in its Automotive Loan Origination System.

Over 65% of students prefer student loan payments over iPhone X or Bitcoin for holidays (TechRepublic), Rated: AAA

LendEDU asked 1,000 people repaying student loans if they would prefer a popular holiday gift or a loan payment of equal value. And, despite the hype surrounding tech trends, they wanted loan payments more.

Source: LendEDU

Voice assistants like Google Home and Amazon Echo won’t change banking in 2018 (Tearsheet), Rated: A

Bankers agree voice will be the biggest and most important channel to their business after mobile, only this time, it won’t sneak up on them like mobile did. They’re looking at 2018 as a year to get their companies more involved with voice by adding features to their Alexa skills, creating an Alexa skill if they haven’t done so already or expanding Alexa capabilities to other parts of the organization. But for the most part, they’re looking for a clearer sense of how people even use Alexa.

In 2017, USAA, Ally Bank and U.S. Bank launched Alexa skills. Before this year, Capital One was the only bank with the feature, which it launched in 2016.

Upstart’s First SaaS Partner (LinkedIn), Rated: A

Earlier this year, we announced an initiative to bring the industry’s first Software as a Service (SaaS) lending platform to market, which we call “Powered by Upstart”. Now we’re excited to announce that BankMobile is the first bank to launch their personal loan program on the Upstart platform. Beginning today, BankMobile offers consumers in 43 states personal loans from $5,000 to $30,000, with no origination fees and interest rates starting at 5.99%.

Overcoming the Hurdles of Big Data Start-ups (Big Data), Rated: A

We are an early investor in the company ‘Kabbage” and Kabbage to me is a major disruption in the fund-lending and risk-analysis market. Established in 2009, Kabbage supported the emerging companies that were suffering the blow of a financial crisis. Banks were declining to lend money to small businesses and entrepreneurs had no access to capital to support their businesses. What aggravated the problem is that even if they did get access to money, the procedure for evaluating the risks of money lending were strictly based on scrutinizing the company’s financial background and fico scores instead of probing into the business. Deviating from the established model of risk analysis, Kabbage stepped into the market at a time of financial distress and operated on a completely different strategy. They would evaluate your UPA shipping data, ebay seller reviews, and other bits of information that are generated on different platforms and then assess credit card risks based on these factors and not just credit card fico scores. Kabbage started off by accumulating a ton of third party data which they ingested, analyzed and then created a solution. Over time, the company has gathered a substantial amount of primary data that they can use to tweak and refine their risk-analysis model. The company efficiently leveraged big data to provide an entire new service in the risk-analysis industry.

Anthemis Group’s Jillian Williams on tough times for personal finance apps (Tearsheet), Rated: A

It’s a space that started out with Mint ten years ago, with a new way to look at all of one’s finances in one place. The field has now grown to accommodate an ever-expanding number of direct-to-consumer PFM apps, including apps like Digit, Clarity Money, Penny and Qapital, and banks are now folding PFM capabilities into their mobile apps.

Banks have been folding in PFM features and competing apps are having trouble differentiating. Where do you see the PFM market right now?
A lot of PFM will continue to move to a business-to-business, or business-to-business-to-consumer model. Things [business-to-consumer PFMs] struggle with are being able to monetize and with customer acquisition.

What’s the problem with business-to-consumer PFM?
The market is really crowded and it’s hard to provide that extra value to really distinguish themselves from other platforms in the space.

Instant Loans at Checkout: helpful or hurtful? (MSN News Now), Rated: A

An $800 mattress for your bed. A $600 sofa for your living room. A vintage designer bag as a Christmas gift for your best friend.  They’re all pretty big purchases to buy online, but now you can get an instant loan for any of them right at checkout.

Ingle says the payment plans are different than credit card options. Companies like Affirm partner with certain retailers to offer the loans, which are installment loans with interest rates, and set payments are made over time.

India

Peer-to-peer lending platform Faircent gets $ 4m in Series B (Economic Times), Rated: AAA

Peer-to-peer lending platform Faircent has raised $4 million in a Series-B round led by Belgian impact investment fund Incofin and Muthoot Fincorp.

P2P platform Faircent raises Series B from Muthoot Fincorp, Incofin, others (Economic Times), Rated: A

In a statement Faircent said it will utilise the newly acquired funds towards strengthening the platform’s technology and creating greater awareness about P2P lending’s significance as a new and highly rewarding asset class.

Fintech Startups Seek to Shake Up Money Transfer Industry (WSJ), Rated: AAA

The race is on to become the top global app for international money transfers.

Fintech startups including WorldRemit Ltd., TransferWise Ltd. and Remitly Inc. are pulling ahead of the pack of the dozens of companies trying to disrupt the remittance industry, using the latest technology to send money internationally.

More than $600 billion is remitted world-wide every year, mostly by migrant workers from places like India, Mexico and the Philippines, who have traditionally had to deal with long lines and high fees to send money home.

Source: The Wall Street Journal

Finvasia gets licence to operate as NBFC (The Tribune), Rated: A

Chandigarh-based Finvasia, a fintech company offering zero brokerage, has received the Certificate of Registration (CoR) from RBI to operate as a non-banking financial corporation (NBFC). This extension will allow the company to offer loan-based products to retail and corporates alike. The company plans to develop block chain technology based P2P (peer-to-peer) lending platform.

Canada

Fintech Select Announces Launch of Physical Bitcoins (GlobeNewswire), Rated: A

Fintech Select Ltd. (“Fintech Select” or the “Company”) (TSX-V:FTEC) is pleased to announce that it will be launching its physical Bitcoin product alongside its Selectcoin closed loop swipe card.

Authors:

George Popescu
Allen Taylor

Thursday December 7 2017, Daily News Digest

Robinhood

News Comments Today’s main news: Credible raises $50M in Australian IPO. Kabbage considers IPO. Blockchain project gives New York homeless a digital identity. Funding Circle surpasses $5B global lending, $1B to U.S. businesses. RateSetter publishes 2016-17 accounts. Starling Bank gets full FCA, PRA approval. N26 launches premium debit card, partners with WeWork. Revolut rolls out bitcoin services. Vietnam gets first P2P lending platform. IOU […]

Robinhood

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Kabbage Mulling An IPO (Seeking Alpha), Rated: AAA

According to FT Partners, the FinTech market saw a record 412 financial deals during the third quarter of 2017. One of the largest deals in the quarter involved a $250 million investment by Softbank (OTCPK:SFTBY) in billion-dollar unicorn Kabbage (Private:KBGE).

Kabbage generates revenue from the fees on the loans. It expects revenue of over $200 million in 2017, roughly double the revenue in 2015. The company claims to have a loss rate lower than the rest of the industry, and that its direct lending business had turned profitable in the fourth quarter of 2016. It expected the whole business to be profitable in the second half of this year.

Kabbage plans to use the funds for expansion into Asia and build new products like insurance and payroll services. It will also be positioning the company for a possible IPO.

Securitizations Securing the Future (Lending Club), Rated: AAA

As we near year’s end, we’re excited to announce that LendingClub has closed its third self-sponsored securitization. The $330 million transaction saw immediate traction and has further increased access to consumer credit for the stable and scalable pool of investor capital in the liquid Asset-Backed Securities (ABS) investor market.

Of note, with 48 total securitization investors this year, over two-thirds 34 are new to LendingClub, including insurance companies, hedge funds, a bank and a pension fund.

We Analyzed 7 Of The Fastest-Growing Personal Finance Apps Of All Time To Figure Out The Secrets To Their Success (CB Insights), Rated: AAA

Ninety-two million millennials will soon be in what Goldman Sachs calls their “prime spending years.” In aggregate, they command $1.3 trillion in annual spending.

(Bankrate found 83% of millennials don’t think they’ll ever retire: they simply “don’t think they’ll have the money” to do so.)

Source: CB Insights

For three of the tools we looked at — Mint, Level Money, and Check — we studied how their product evolved all the way up to their acquisition (by Intuit, Capital One, and Intuit, respectively).

Source: CB Insights

What follows are the results of our analysis — six secrets to success in the world of personal finance management.

1. Use pre-launch marketing to build both trust and hype

Mint had by far the most significant growth in its valuation — from $0 to $170M in just two years.

Source: CB Insights

2. Making the first experience valuable

Keeping users around is hard: according to Localytics, the average mobile app loses 80% of its users within just three days of download.

The best apps retain about 70% of users after three days. The next-best retain about 60%.

Source: CB Insights

3. Design for The Specific User You Want

Source: CB Insights

Millions Are Hounded for Debt They Don’t Owe. One Victim Fought Back, With a Vengeance (Bloomberg), Rated: AAA

A few minutes later, Therrien’s phone buzzed. It was the same guy. He gave his name as Charles Cartwright and said Therrien owed $700 on a payday loan. But Therrien knew he didn’t owe anyone anything. Suspecting a scam, he told Cartwright just what he thought of his scare tactics.

Therrien had been caught up in a fraud known as phantom debt, where millions of Americans are hassled to pay back money they don’t owe. The concept is centuries old: Inmates of a New York debtors’ prison joked about it as early as 1800, in a newspaper they published called Forlorn Hope. But systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.

The problem is as simple as it is intractable. In 2012 a call center in India was busted for making 8 million calls in eight months to collect made-up bills. The Federal Trade Commission has since broken up at least 13 similar scams.

This New Blockchain Project Gives Homeless New Yorkers A Digital Identity (Fast Company), Rated: AAA

Three thousand homeless people in New York are about to receive a special holiday gift: a free smartphone that allows them to manage their digital identity, access shelters and food pantries, and make use of financial services.

The project comes from Blockchain for Change, a New York City startup that has developed a mobile app called Fummi that’s preloaded on the phone. It has teamed up with Life Wireless, which provides phones to low-income groups using federal subsidies. Also involved are NYC service providers like Urban PathwaysPart of the Solution (POTS), Hakook, and the Robin Hood Foundation.

Life Wireless is distributing the phones, starting in the Bronx. The service groups create the blockchain identities for individuals. Once on the system, they can then open an account, receive money, and track their activity.

Blockchain for Change has raised more than $500,000 in a seed round, but it’s also planning a public initial coin offering where it hopes to raise up to $50 million. It generates revenue by charging fees to users at a rate of $3 per month.

On Earnings Calls, Which Tech Company Are Senior Execs Most Obsessed With? (CB Insights), Rated: A

More than Google, Apple, or Facebook, there’s one company that CEOs and public company execs are talking about the most. We analyzed earnings call transcripts to identify the new king of technology.

Amazon has been mentioned nearly 3000 times in the last year.  That’s more than Facebook, Apple, and Microsoft combined.

Source: CB Insights

 

Global Debt Registry joins Wall Street Blockchain Alliance (Finextra), Rated: A

Global Debt Registry (GDR), the asset certainty company, today announced its membership to The Wall Street Blockchain Alliance (WSBA).

WSBA is an industry non-profit trade association created for financial market professionals, by financial market professionals. The alliance engages market participants, regulators, policymakers and technology innovators to advocate the adoption of blockchain’s distributed ledger technology.

Discover Enables Apple Pay Cash (PYMNTS), Rated: A

Discover has announced that transactions made with Apple’s new Apple Pay Cash card will leverage the Discover Network.

The card is part of the new Apple Pay functionality, which allows U.S. customers to quickly, easily and securely send and receive money among friends and family. When Apple customers receive money on a supported device, the money is added to their new Apple Pay Cash card. They can use the money instantly to pay someone or to make purchases using Apple Pay in stores, apps and on the web.

Payday lender Curo to launch in New York with $ 620m valuation (Financial Times), Rated: A

One of America’s biggest payday lenders is launching on the stock market with a $620m valuation, cashing in on mounting hopes that the Trump administration and Republicans in Congress will ease regulatory restrictions on the sector.

Curo Group, which targets “underbanked” consumers and is behind WageDayAdvance in the UK as well as Speedy Cash in the US, begins trading on the New York Stock Exchange on Thursday.

Shares in the private equity-backed company were priced on Wednesday evening at $14 per share, according to Bloomberg data.

Jury Convicts Online Lender Of $ 220M (Mondaq), Rated: A

Recently, a Manhattan federal jury convicted Richard Moseley Sr., the head of an online network of payday lenders and loan servicers, on charges of wire fraud, aggravated identity theft, and violating the Racketeer Influenced and Corrupt Organizations Act and Truth in Lending Act, among other counts.

Moseley was convicted due to his leadership role over a vast and complicated system of interrelated companies that collected over $220 million from more than 600,000 borrowers and deceived regulators in the process. Convincing state and federal regulators and even his own lawyers that his companies were based offshore and not bound by U.S. law, Moseley coordinated a network of lenders and loan servicers that routinely misled both consumers and regulators.

Instamotor Customers Can Now Apply for Financing While Shopping For A Used Car (BusinessWire), Rated: A

Instamotor, the free online used car marketplace, announced today that its customers can now apply for and receive financing for vehicles on its platform.

An estimated 54% of used car buyers need financing according to Experian. By working with leading direct-to-consumer automotive lenders, Instamotor will become one of the few true automotive marketplaces to enable its users to shop for a used car and secure the financing more than half of them will need, all conveniently integrated in one place.

Loans enabled through Instamotor will be available to consumers with FICO scores as low as 500, which are people who commonly have trouble receiving optimal loan terms through traditional financing methods. Also, the application is optimized to be completed entirely in the comfort of one’s home rather than in a dealership office or credit union.

Lendio Opens New Franchise in Nashville (Crowdfund Insider), Rated: A

Marketplace lending platform Lendio, recently announced its has opened its new franchise located in Nashville, Tennessee. Lendio revealed that its franchise program makes accessing business loans easy by helping small business owners skip the legwork of looking for a small business loan.

Progressive Leasing and Marqeta Partner to Power New Lease-to-Own Financing Experience (BusinessWire), Rated: A

Marqeta, the open API payment card issuing platform, and Progressive Leasing, a virtual lease-to-own company and a division of Aaron’s, Inc., today announced a technology partnership that will enhance the checkout process for Progressive Leasing customers.

As one of the largest players in the lease-to-own industry, Progressive Leasing sought a partner who could support their needs today and provide innovative solutions to help build their future payment checkout roadmap. Through the partnership, Marqeta will enable Progressive Leasing to issue virtual cards at the point of sale and work with them to create additional innovative payment offerings.

With the partnership, Marqeta will enable Progressive Leasing to take advantage of a wide range of modern features, including virtual card issuance, tokenization, and its patent-pending Just-in-Time (JIT) Funding, allowing Progressive Leasing to authorize and reconcile transactions in real time.

Real estate crowdfunding expands into more niche markets (Curbed), Rated: A

To those unfamiliar with real estate crowdfunding, the Fair-Haired Dumbbell development in Portland may be just the kind of wacky, esoteric project one envisions when imagining what happens when strangers pool funds online, crossing Kickstarter with construction. A pair of six-story towers connected by a skybridge, the commercial project does in fact resemble a hand weight, with an ostentatious, colorful Italianate pattern sprawled across the facade for extra impact.

Funded in part by investors who pooled money via the Crowdstreet crowdfunding platform, the building, located in a former industrial neighborhood called Burnside Bridgehead, is also open for business and looking for tenants. It’s the city’s first crowdfunded building, and a sign that the growing world of real estate crowdfunding has developed and matured since a 2012 change in investment regulations made these platforms possible.

While reliable numbers about this growing and fragmented market prove difficult to come by, research firm Massolution estimated the global market for real estate crowdfunding surpassed $3.5 billion in 2016.

Hope grows that a larger SEC crackdown on ICOs is coming — and soon (TechCrunch), Rated: A

More than $3 billion has been raised through so-called initial coin offerings so far in 2017.

That wait-and-see stance looks to evolve into much more action in 2018, suggest those who’ve either spoken with the Securities and Exchange Commission or otherwise have a vested interest in its rulings. (The SEC isn’t commenting publicly on its specific plans.)

Just Friday, a new division of the agency that’s focused on ICOs filed charges against an outfit called PlexCoin that reportedly raised $15 million from thousands of investors by promising a 1,354 percent return in 29 days or less.

Credit score row as FICO chief hits out at banks over ‘Fako’ rivals (Financial Times), Rated: A

A row has erupted over credit scoring after the head of FICO, the company whose metric underpins trillions of dollars in lending decisions in the US, hit out at some lenders for supplying customers with a rival measure he dismissed as “Fako”.

The group that supplies lenders with the rival assessment, VantageScore, hit back, saying Mr Lansing was spreading “misinformation aimed at discrediting FICO’s only real competitor”.

The spat points to the opacity of credit scoring, a crucial part of America’s consumer finance economy that is in the spotlight after the huge data loss at the credit reporting company Equifax.

Tips for Reducing College Costs (Earnest Email), Rated: B

Source: Earnest

Roostify to Integrate With Black Knight’s LoanSphere Empower Loan Origination System (BusinessWire), Rated: B

Roostify, a provider of automated mortgage transaction technology, today announced that it has signed an agreement with Black Knight, Inc. (NYSE:BKI) to integrate its platform with Black Knight’s LoanSphere Empower loan origination system (LOS). The integration will enable Empower users to add further efficiency and transparency to the loan origination process – from application to closing.

Envestnet | Yodlee Incubator Unveils New Class of Fintech Disruptors (Business Insider), Rated: B

Envestnet | Yodlee(NYSE: ENV) today announced the members of the newest Envestnet | Yodlee Incubator class.

The members of the 2017–2018 Envestnet | Yodlee Incubator class are:

  • Amplifunds helps donors find non-profits that match their interests and performance expectations.
  • Datasine turns transactional data into psychometric insights, allowing banks to better serve their customers.
  • Golden helps families care for their senior parents’ financial health, wealth and security.
  • Peanut Butter offers a cloud-based software to help employers attract college-educated talent by managing student loan assistance programs.
  • Starbutter AI makes text and voice chat Artificial Intelligence (AI) agents that help consumers pick financial products like credit cards and mortgages.
  • Stessa enables property owners to manage, track, and communicate performance of their real estate assets.
  • Tangello improves home affordability by bridging the gap between renting and buying and offering a flexible, lower cost, and quicker way to finance homes, directly from mobile devices.
  • Veryfi provides mobile-first bookkeeping software that empowers business owners by automating the tedious parts of accounting through AI and machine learning.

AutoGravity Names Sheng Wang As Chief Technology Officer (PR Newswire), Rated: B

AutoGravity has announced the appointment of Sheng Wang as Chief Technology Officer (CTO) to drive the company’s global engineering efforts. Wang joins AutoGravity’s executive team with responsibility for leading product and engineering to deliver a trustworthy and innovative car buying experience that empowers the consumer.

Prior to her appointment as CTO, Wang led AutoGravity product development as the company’s first Director of Product, building cross-functional teams to develop and launch the award-winning AutoGravity platform, as well as branded platforms for Volkswagen Credit and Kia Motors Finance. Wang joined AutoGravity with more than fifteen years of leadership experience in the technology industry and an uncompromising dedication to building dynamic teams and high-impact products that people love.

QCash Financial Wins Financial Times Future of Fintech Awards for the Innovation Category (BusinessWire), Rated: B

QCash Financial, a Credit Union Service Organization (CUSO) providing automated, cloud-based small-dollar lending technology for financial institutions, announced that it was selected as the winner of Financial Times Future of Fintech Innovation Award.

The FT Future of Fintech awards recognize pioneering companies able to demonstrate innovative ideas capable of creating lasting change in the financial services sector on a global scale. Financial Times offers an Innovation Award for newer Fintech companies that are bringing out novel solutions. QCash Financial was awarded the Innovation Award.

United Kingdom

Funding Circle passes $ 5 billion lent globally, including $ 1 billion lent to US businesses (PR Newswire), Rated: AAA

Funding Circle today announced that investors have lent more than $5 billion globally to small businesses through the Funding Circle platform. This has supported a network of 40,000 businesses across the UK, USAGermany and the Netherlands and helped to create more than 100,000 new jobs.*

Today’s news follows a record November for Funding Circle globally with the business facilitating more than $260 million of lending, including $175 million in the UK (£130m), $70 million in the US and $15 million in Continental Europe (€14.5m). Together this has helped thousands of business owners to access fast, transparent finance to grow their businesses, and will lead to an estimated 7,500 new jobs.

With US businesses now having accessed more than $1 billion in funding through the platform, Funding Circle becomes the first lending platform anywhere in the world to have facilitated more than $1 billion across two markets.

Your December Review – Insight and Analysis (Funding Circle), Rated: AAA

Your lending has reached £3 billion in the UK! November was also a record month, with £129 million lent to small businesses in the UK.

Over half of Brits (56%) think they have the skills to run their own business, but only 13% believe they’re entrepreneurial.

Source: Funding Circle
Source: Funding Circle

RateSetter Publishes 2016-2017 Accounts (Crowdfund Insider), Rated: AAA

On Wednesday, UK peer-to-peer lending platform RateSetter released its accounts for the year ending on March 31, 2017. The online lender reported that revenues were £23.7m, up 38 percent from 2015-16; loans under management grew by 23 percent, from £581m to £714m; the number of active lenders grew by 36 percent from 31,036 to 42,049; and, over the same period, the number of active borrowers grew 27 percent from 161,000 to 204,000.

Peer-to-peer lender RateSetter’s losses jump as it takes a hit from bad loan to ad company (Business Insider), Rated: A

RateSetter booked a pre-tax loss of £23.3 million in the year to March 2017, compared to a £5.3 million in the previous year. The company operates a peer-to-peer platform that matches retail investors with individuals looking to borrow money.

Operating losses were £9.2 million last year but the figure was pushed higher by a one-off write-down relating to a loan the platform made to Adpod Limited, an advertising business RateSetter lent £12 million.
‘A resilient business’
RateSetter’s accounts also show that revenue rose by 38% to £23.7 million. Loans under management rose by 23% to £714 million. The number of active lenders on the platform rose by 36% to 42,049 and the number of borrowers rose by 27% to 204,000.

Goodwill impairment helps push Ratesetter further into to the red (Verdict), Rated: A

A goodwill impairment pushed pre-tax losses for RateSetter down to £23m in the year ending March 2017, despite revenue growth of 38% to £23.7m.

The company, which launched a consumer vehicle and commercial assets HP offer this year, saw a rise of 36% in the number of lenders and 27% of borrowers. However, operating losses of £9.2m were further weighed down by a £14.1m goodwill impairment on a loan to advertising company Adpop.

In 2015 Vehicle Trading Group, a company operating in motor finance for consumers and dealerships, used a wholesale facility from RateSetter to lend £12m to Adpop. Both Vehicle Trading Group and Adpop subsequently went into financial difficulties, and RateSetter then bought the two companies.

RateSetter thus decided to back Adpop’s repayments of third party loans, preventing its provision fund from absorbing the hit, as it normally would in case a borrower defaults.

Starling Bank Receives Full Regulatory Approval from FCA & PRA to Offer Broad Portfolio of Financial Products (Crowdfund Insider), Rated: AAA

Starling Bank has been granted approval by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to offer customers a wide array of financial products by the mobile only bank.  Starling Bank received a licence to operate as a bank by the Bank of England in 2016. The digital only challenger bank will now be able to provide; mortgages, consumer loans, ISAs, and other investment products via their App. No bricks and mortar necessary.

Barnett backs P2P Global Investments for recovery (Citywire), Rated: A

P2P Global Investments (P2P), the largest of the listed alternative lending funds, has won the backing of Invesco Perpetual’s Mark Barnett, its largest shareholder, for the turnaround plan it outlined last week.

The future of advice is ‘Fintegration’ (Professional Adviser), Rated: A

The financial advisory sector has seen much change in the past few years, much of it driven by new technologies and a wave of new market entrants. While we are seeing consolidation and innovation in response, this is just the start. So if you thought the merry-go-round was slowing down, then grab hold tightly because it is only going to accelerate.

‘Fintegration’ – the integration with fintech services – is emerging as an important factor.

What is common to both groups is their appetite for financial online and digital services – from online banking and mortgage management to peer-to-peer lending platforms. There is no doubt we will shortly see the fully integrated dashboard becoming commonplace.

China

China targets booming online lending as crisis fears build (Hong Kong FP), Rated: AAA

The 24-year-old secretary is among millions of Chinese who have turned to proliferating online companies that dish out quick loans — and are worrying the country’s leadership.

Jia started accumulating her debt when she was in college, turning to tech titan Alibaba when she could not get a credit card.

The ease of a few taps on her phone and a four minute wait led Jia to borrow and borrow and when she was finally able to take out a card, she used it to repay Alibaba’s affiliate Ant Financial.

But her debt reached roughly US$9,000 this summer, and her monthly interest payments eclipsed her meagre salary.

‘Lending nirvana’ 

Alternative lending, with loans that can be wired to accounts within minutes, has taken off in China and accounts for 85 percent of the global market, according to a University of Cambridge report.

European Union

N26 launches a premium debit card for ‘the digital customer,’ partners with WeWork (TechCrunch), Rated: AAA

N26, the European mobile banking service, today announced the launch of N26 Metal, the company’s premium MasterCard-affiliated debit card “tailored to the needs of digital customers” at TechCrunch Disrupt Berlin. N26 Black customers in Germany, France, Italy and Austria will be able to sign up for the new NFC-enabled card, which obviously features a metal core made from tungsten and that makes the card weigh a lot, starting December 14.

It’s also worth noting that this is the first metal card in Europe that supports contactless payments.

What better company to partner with then than co-working and real estate startup WeWork. Using the N26 Metal service, N26 customers will also be able to join the WeWork network and get credits to reserve workspaces and conference rooms.

International

Currency trader Revolut’s offer to those champing at the bitcoin (The Times), Rated: AAA

Revolut, which provides foreign currency services to consumers and small businesses, said that from today its users would be able to buy bitcoin and other “cryptocurrencies” using 25 conventional currencies.

BFS Capital has Extended Over $ 1.7 Billion in Financing to Businesses across the US, UK and Canada (BusinessWire), Rated: A

Marking its 15th anniversary year, BFS Capital, a leading small business financing platform, announced it has now extended over $1.7 billion in financing since funding its first deal in 2002. The company also reported that over 75 percent of its originations have occurred in the last five years and more than 25 percent took place in the last 18 months. For full year 2017, BFS Capital expects to generate more than $300 million in originations, a new annual high.

Recent Origination Milestones in Online Lending (Lend Academy), Rated: A

Today, Kabbage announced they had crossed the $4 billion mark. They have now lent to more than 130,000 small businesses which they claim is the largest customer base of any online small business lender.

This week LendingHome announced it had crossed $2 billion in mortgage loans for homeowners and real estate investors.

Funding Circle UK crossed the £3 billion (approx. $4 billion) mark in small business lending for their UK business.

LendingClub quietly announced total small business originations of $500 million since 2014 in a recent blog post.

Emerging markets are under pressure, but I’m buying the dip (CNBC), Rated: A

The Chinese government instituted tough new regulations on online consumer lending platforms, which are made up of payday loans and peer-to-peer lending. Some of them are associated with large holdings in the emerging markets exchange-traded fund like Ant Financial, an Alibaba Group affiliate.

While much of this is a continuation of the Chinese debt bubble, the move suggests that it has gotten out of the regulators’ control.

We see a global trade boom continuing to drive emerging markets as global Purchasing Manager indexes show continued growth in demand for manufactured goods. For example, Korea is already registering signs of slowing Chinese demand but is still showing 9.6 percent year-on-year growth for November exports. However, we continue to watch the tone out of Washington, since a shift toward more protectionism could put a dent in this.

Viola FinTech is a new $ 100M Israel-based VC fund targeting fintech startups around the world (TechCrunch), Rated: B

Viola, the Israel-based technology investment group, is launching new independent VC fund targeting fintech startups from anywhere in the world. Dubbed Viola FinTech, the “cross-stage venture fund” has an initial closing of $100 million but will extend that towards $120-150 million. It is backed by global banks, insurance companies and asset managers from North America, Europe, APAC and Israel, including Scotiabank, The Travelers Companies, Inc and Bank Hapoalim.

Australia/New Zealand

San Francisco’s Credible Raises $ 50 Million in Australian IPO (Bloomberg), Rated: AAA

San Francisco-based financial technology company Credible Labs Inc. is going public, but not on a U.S. exchange.

The startup, a consumer loans marketplace, raised $50 million (A$66 million) in an initial public offering on the Australian Securities Exchange, according to a statement Thursday.

The IPO values Credible at A$300 million, about 50 percent higher than the valuation it got in its last fundraising round, according to people familiar with the matter, who asked not to be identified as the details aren’t public.

Yellow Brick Road Adds Prospa to Lending Panel in Boost to Aussie Small Business (Crowdfund Insider), Rated: A

Yellow Brick Road has added online lender Prospa to its lending panel. The move was described as an effort to diversify its lending offerings for Australian small business customers. Yellow Brick Road is a full service wealth management company that offers products and services for home loans, financial planning, insurance, superannuation, and investments.

Marketplace lenders must ‘start educating’ SMSFs on opportunities, discipline (Nestegg), Rated: A

Speaking to Nest Egg, CEO of fully licensed marketplace lender Zagga, Alan Greenstein said that self-directed investing is now a “very, very big part of SMSF investment” and that according to Zagga research, well over 30 per cent of SMSFs at a sophisticated wholesale level are self-directed investors.

Pointing to a recent whitepaper produced by Zagga, Mr Greenstein said SMSFs tend to be invested at either end of the spectrum; very high risk and high yielding opportunities, or very low risk opportunities.

He said that Zagga’s newly launched ZAG Fund offered a middle ground, with a targeted net return of 6.5 per cent.

Ngā Tangata Microfinance breaking hold of predatory lenders (Scoop), Rated: A

With loan capital provided by Kiwibank, Ngā Tangata Microfinance (NTM) provides no-interest loans to qualifying clients for family well-being and relief from high-interest debt.

An evaluation conducted by the University of Auckland’s Centre for Applied Research in Economics found NTM’s no-interest loans were crucial in helping low-income clients break the cycle of debt caused by predatory payday and fringe lenders.

Partnering with local budgeting advisors, NTM has now disbursed more than $660,000 in no-interest loans to more than 300 clients, with 70% of the support being for relief from high-interest debt. It is estimated these loans had potentially saved clients a total of more than $1 million in interest and additional costs. Requests for help continued to trend up – 30% more NTM loans were approved in the past 12 months compared to the previous year, amounting to nearly 130 loans worth $275,000.

India

Loans are easy to get, but are they for you? (livemint), Rated: AAA

When you buy a phone, you have the option to pay for it then or pay later. You have this option even when you are buying grocery or paying bills. Credit these days can be available relatively easily, even for amounts as low as Rs1,000. In fact, in a country where you need to have a good credit history and credit score to get loans from banks, you can now get loans on your phone—even if a bank would not lend to you.

According to data from the Centre for Monitoring Indian Economy Pvt. Ltd (CMIE), personal loans (incremental numbers) increased 179% and credit card outstanding rose 34.63% in value during April to October period in FY 2017-18. In comparison, incremental numbers during the same period for housing loans showed negative 32.7%.

Source: livemint

HDFC Bank Ltd saw a 35.75% growth in personal loans and 44.50% growth in credit card business in the second quarter (on a year-on-year basis). ICICI Bank, in its second quarter results this financial year said that its personal loan book saw a 40.1% year-on-year growth and the credit card business grew by 36.5%. And this is true for the non-banking finance companies (NBFCs) as well. Bajaj Finance Ltd saw a 42% growth in consumer lending in the same period.

Asia

Vietnam launches first peer-to-peer lending platform (XinhuaNet), Rated: AAA

Vietnam has launched its first peer-to-peer lending service Vay Muon, enabling people to borrow and lend money without having to go through a financial institution.

Matching lenders and borrowers via a smartphone application, the lending platform does not require mortgages and one-on-one meetings, local VTV online newspaper reported on Thursday.

First-time loan requests will be reviewed and disbursed within four hours and subsequent requests will be handled in just half an hour.

‘Korean startups should do what they are good at to get funding’ (The Investor), Rated: A

Korean startups flock to Silicon Valley hoping to become the next Facebook or Google. However, setting up a business from scratch where thousands of new startups come and go every year, is not easy, and becoming a “unicorn” is near impossible.

One fundamental reason is because they can’t get enough funding, according to Tim Chae, head of the Korean unit of US accelerator 500 Startups.

First of all, a company should either run a business in a certain sector for which Korea is widely famous worldwide, such as beauty and e-sports segments, rather than roll out me-too services and products.

Datarius Cryptobank Participates at BlockShow Asia 2017 (Digital Journal), Rated: B

On November 29–30 a large-scale event — Block Show Asia 2017 — was held, and Datarius Cryptobank participated in this event.

Datarius Cryptobank is a unique project. This is a first social cryptobank built on base of the distributed register technologies using neural networks and artificial intelligence. The main attractive features of the project for investors and future customers are the lowest transaction fees, as well as P2P-lending.

Canada

IOU Financial Surpasses US$ 500 Million in Loans Originated (Cision), Rated: AAA

IOU Financial Inc. (“IOU” or “the Company”) (TSXV: IOU), a leading online lender to small businesses (IOUFinancial.com), announces today that it has facilitated more than US$500 million in financing to thousands of merchants and small businesses across the United States and Canada since launching its lending platform.

Authors:

George Popescu
Allen Taylor

Helping Students Pay Off Student Loans as an Employee Benefit

CommondBond

The US student debt load currently stands at $1.4 trillion, which roughly accounts for 10 percent of all outstanding debt. It has reached a crisis proportion with over 51% students having debt greater than $50,000. The growth in cost of tuition has outstripped any inflation metric and analysts believe this is holding back new generations […]

CommondBond

The US student debt load currently stands at $1.4 trillion, which roughly accounts for 10 percent of all outstanding debt. It has reached a crisis proportion with over 51% students having debt greater than $50,000. The growth in cost of tuition has outstripped any inflation metric and analysts believe this is holding back new generations from going to college.

Source: ZeroHedge.com

This pain point is well understood by the fintech community with online lenders stealing a march over traditional banks in servicing the millennial generation. With a full suite of student loan products, CommonBond has emerged as one of the leaders of the student loans segment. Lending-Times got an opportunity to catch up with David Klein, Co-Founder and CEO of CommonBond, where he explained the vision behind the student loan juggernaut.

The Story Behind CommonBond

Klein went through the painful ordeal of funding his tuition for Wharton. The entire process was confusing, rates were excessive, and customer service was non-existent. He recognized the massive gap and launched the CommonBond platform with two co-founders he met at Wharton. Together, they created a pilot student loan program at the school. The positive response spurred them to expand and focus on providing the best student loan experience in the country. Within two years of launch, CommonBond became the No. 1 private lender in many schools. The comprehensive bouquet of products offered by the company has made them the go-to resource for students, graduates, and businesses.

The Founding Team

David Klein, Michael Taormina, and Jessup Shean founded CommonBond in November 2012 as an online lending platform to connect graduate students and investors. Prior to CommonBond, Klein worked as director of strategic planning and business in consumer finance sector at American Express. Taormina started his career with CommonBond and was associated with the company till January 2015 when he left to start another venture. Shean was associated with the company for one year and later on shifted to Greenhill as Vice President.

Funding and Securitization

CommonBond has raised around $1 billion in funding across equity and debt. It has raised around $78 million in equity with $30 million raised in Series C from a group of investors led by Neuberger Berman Group. It also managed to secure $300 million in debt financing in July 2016. The startup has been performing strongly on the securitization front, as well. Recently, the company closed $231 million in securitizations of refinanced student loans. The securitization received a rating of Aa3 by Moody’s in addition to AA from DBRS. The fourth issuance for CommonBond was its largest securitization and was oversubscribed by more than three times.

The CommonBond Product

CommonBond offers a full suite of student loan products including loans for current students, refinancing loans for graduates, and an enterprise solution. CommonBond for Business Platform, the enterprise solution, enables employers to offer student loan benefits to their employees. With 80% of millennials wanting to work for a company that helps them with their loans, this benefit has the chance to grow into the golden standard in the industry.

But the company is not all about innovation in products. It’s the right blend of advanced technology, competitive rates, and award-winning customer service that has made CommonBond a force to reckon with in the student loan segment.

CommonBond has also incorporated a “one-for-one” social mission: for every loan it funds, it also funds the education of a child in need. This social endeavor proves the company is connected to the community at large. The company has entered into a partnership with Pencils of Promise to this effect.

Acquisition of Gradible

In July 2016, CommonBond acquired Gradible, a personal finance platform. The acquisition was done largely to incorporate Gradible’s proprietary student loan evaluation technology into their CommonBond for Business platform. This integration will enable the online lender to expedite their new platform as the “401(k) for student loans.” The Gradible algorithm will assist borrowers in choosing the best repayment option for their student loans and will allow employers to make a contribution to the employee’s student debts, similar to their contribution towards the employee’s 401 (k).

Key Stats

Since its inception, the company has originated over $1 billion in loans. Its APR usually ranges from 2.87% for variable to 5.5% for fixed rate loans for students in schools. It offers multiple tenures and flexible repayment options so that borrowers can customize the loan as per his unique requirements. The company claims that the borrower can save over $24,000 by refinancing his loan from CommonBond. Its USP is its ability to analyze the creditworthiness of the borrower and offer them lower rates than traditional lenders.

Typical customers

Being a student is stressful enough, and adding the pressure of arranging funds for further studies can be a nerve-racking experience. CommonBond is the only company that helps a borrower at every stage of the student debt cycle. Its borrowers range from high school students looking for higher education loans, graduates who want to refinance their loans at lower rates, parents looking to refinance their children’s loans, and companies that wish to attract and retain the best talent by contributing towards their student loans.

Trends

Klein believes that the online lending industry has reached maturity in many ways. First, only the companies that possess both technologically innovative products and a loyal customer base can survive in the long-term. Second, more and more service providers are solely focusing on serving online lenders. This has created a positive ecosystem where the benefits accrue to the final customer. Third, with both fintech companies and traditional banks understanding each other’s importance in moving forward, the industry is now witnessing more collaboration between the two.

Future Prospects

CommonBond is planning to stay focused on education finance with its refinancing loan options, loan options for current students and the CommonBond for Business platform as main product categories. Its razor focus on customer service differentiates it from not only traditional banks but also me-too online lenders. It has an in-house “Care Team” which even sends out cookies to students during their exams. CommonBond has created a niche for itself in the student loans category; its solution for businesses is the company’s trump card and a key differentiator.

Author:

Written by Heena Dhir.

Friday October 6 2017, Daily News Digest

Funding Circle lending

News Comments Today’s main news: LendingClub completes second self-sponsored securitization. Pennsylvania AG sues Navient. Federal regulator clamps down on payday lending. Elevate supports rule on small dollar lending. RateSetter expected to profit next year. China’s pyramid schemes double in 2017. KBRA opens first European office. LendIt leadership changes. Today’s main analysis: Funding Circle’s October review. Today’s thought-provoking articles: Payday lending’s tough restrictions. Cordray’s […]

Funding Circle lending

News Comments

United States

United Kingdom

China

European Union

International

Australia

India

News Summary

United States

LendingClub Corp Completes Second Self-Sponsored Securitization (Financials Trend), Rated: AAA

LendingClub Corp (NYSE:LC), America’s leading web marketplace connecting investors and borrowers, has contributed to and sponsored its second securitization contract. The Consumer Loan Underlying Bond Credit Trust 2017-P1 released $323.1 million in prime notes supported by consumer loan assets enabled through the LendingClub platform. It marks as the sixth securitization sponsored or supported by company, and the fourth rated securitization of company facilitated loans overall.

This deal was backed by around $350 million of collateral and comprises $217.3 million of Class ‘A’ notes rated “A-(sf)”, $51 million of Class ‘B’ notes rated “BBB (sf)” and Class ‘C’ notes worth $54.7 million rated “BB (sf)”. All ratings were given by Kroll Bond Rating Agency, Inc.

Pa. attorney general files suit against student-loan company (Philly.com), Rated: AAA

The Pennsylvania Attorney General’s Office filed suit Thursday against Navient, the largest U.S. student-loan servicer, alleging widespread abuses and deceptive acts involving its administration of student loans.

The suit against Navient Corp. and its subsidiary Navient Solutions LLC, formerly a part of Sallie Mae, could affect hundreds of thousands of Pennsylvanians, Attorney General Josh Shapiro said, adding that the office is seeking restitution for all borrowers affected by the practices.

That includes anyone who received private student loans from Sallie Mae or who has had federal or private student loans serviced by Navient and has had problems with repayment.

The Wilmington-based company, which has a large servicing center in Wilkes-Barre, already is the subject of a federal lawsuit filed this year by the Consumer Financial Protection Bureau (CFPB). Washington state and Illinois also have sued the company.

Pennsylvania residents have filed 1,059 complaints against Navient with the CFPB as of September, the Attorney General’s Office said.

Online lender Earnest sells to Navient, in a disappointing deal for investors (TechCrunch), Rated: A

Earnest, a well-funded fintech startup with bold ambitions to create a modern financial institution, is selling to the student-loan company Navient for $155 million in cash.

The exit isn’t so great for Earnest’s investors. They’d plugged roughly $320 million in cash and debt into the company, which was initially centered around providing small loans to people based on their earning potential and evolved over time to provide personal loans to a broader base of customers, as well as lend money to coding academies, as it told TechCrunch in late 2015.

Fintech deal suggests everything old is new again (NASDAQ), Rated: A

Everything old is new again in finance. Navient, which services debt, is buying startup student-loan refinancer Earnest for less than half its 2015 valuation. Even then, it’ll eat into the new owner’s earnings and share buybacks. Worse, Navient faces a fresh lawsuit over dodgy practices.

The Pennsylvania attorney general’s office filed charges on Thursday that follow ones from the U.S. Consumer Financial Protection Bureau in January with Illinois and Washington. All allege that Navient in some way or other cheated borrowers paying for college, which the company denies.

Earnest’s $155 million price tag suggests most in the industry have downgraded their expectations about profitable growth.

Navient shares tumbled 12 percent, erasing market value more than three times the value of the acquisition.

Elevate Expresses Full Support for CFPB Small Dollar Lending Rule (BusinessWire), Rated: AAA

Ken Rees, CEO of Elevate Credit, Inc. (“Elevate”), a tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, issued the following statement in response to the final “small dollar lending” rule issued today by the Consumer Financial Protection Bureau (CFPB):

“We applaud the CFPB, and we fully support this rule. We believe this rule is good for consumers and for the business we have built to better serve them. The small dollar rule protects consumers from the cycle of debt inherent in payday loans, short-term auto title loans, and certain balloon payment loans, and it encourages the kind of innovation we’re doing in underwriting, pricing and product development. We are heartened that regulatory uncertainty has been lifted with today’s announcement. Our current view is that the rule requires minimal or no changes to our business.”

Federal Regulator Clamps Down on Payday Lending Industry (U.S. News), Rated: AAA

Payday and auto title lenders will have to adhere to stricter rules that could significantly curtail their business under rules finalized Thursday by a federal regulator. But the first nationwide regulation of the industry is still likely to face resistance from Congress.

The Consumer Financial Protection Bureau’s rules largely reflect what the agency proposed last year for an industry where the annual interest rate on a payday loan can be 300 percent or more. The cornerstone is that lenders must now determine before giving a loan whether a borrower can afford to repay it in full with interest within 30 days.

Because studies by the CFPB have found that about 60 percent of all loans are renewed at least once and that 22 percent of all loans are renewed at least seven times, this cap is likely to severely wound the industry’s business model. In California, the largest payday loan market, repeat borrowers made up 83 percent of the industry’s loan volume.

The CFPB estimated that loan volume in the payday lending industry could fall by 55 percent under the new rules.

Roughly 12 million people took out a payday loan in 2010, according to the Pew Charitable Trusts.

In addition to the “full payment test” and the limits on loan renewals, the CFPB rules would also restrict the number of times a payday lender can attempt to debit a borrowers’ account for the full amount without getting additional authorization.

This Government Agency Is Seriously Overstepping Its Bounds (Fortune), Rated: A

The Consumer Financial Protection Bureau (CFPB) has a mission: to protect consumers from unfair, deceptive, or abusive practices. According to a new national poll by the Cato Institute in collaboration with YouGov, protection from deceptive practices is just what the American public wants. Asked to prioritize regulatory goals, the majority of respondents put “protect consumers from fraud” front and center.

Unfortunately, the CFPB continually misses the mark, issuing rules that make splashy headlines but in practice do little to stop bad behavior. Its latest proposed rule, expected to become final soon, doesn’t target fraud itself. Instead, it goes after an entire industry and will significantly reduce consumers’ access to credit at the exact moments they need it most.

As the Cato poll finds, the majority of payday borrowers say they receive good information about rates and fees from their payday lenders.

Payday Lending Faces Tough New Restrictions by Consumer Agency (The New York Times), Rated: AAA

The operators of those stores make around $46 billion a year in loans, collecting $7 billion in fees. Some 12 million people, many of whom lack other access to credit, take out the short-term loans each year, researchers estimate.

Industry officials said on Thursday that they would file lawsuits to block the rules from taking effect in 2019 as scheduled.

Under the new rules, lenders would be allowed to make a single loan of up to $500 with few restrictions, but only to borrowers with no other outstanding payday loans.

A dropoff of that magnitude would push many small lending operations out of business, lenders have said. The $37,000 annual profit generated by the average storefront lender would become a $28,000 loss, according to an economic studypaid for by an industry trade association.

Prepared Remarks of CFPB Director Richard Cordray on the Payday Rule Press Call (ConsumerFinance.gov), Rated: AAA

After a long process of research, outreach, and review of over one million public comments, the Consumer Bureau today has issued a rule aimed at stopping debt traps on payday and auto title loans. The rule is guided by the basic principle of requiring lenders to determine upfront whether people can afford to repay their loans. These strong protections cover loans that require consumers to pay all or most of the debt at once, including payday loans, auto title loans, deposit advance products, and longer-term loans with large “balloon” payments. The new rule also curtails repeated attempts to debit checking accounts that rack up fees and make it harder for consumers to get out of debt. This provision applies to the same kinds of loans and to high-cost installment loans as well. These protections bring needed reform to a market where far too often lenders have succeeded by setting up borrowers to fail.

Loans like these are heavily marketed to financially vulnerable consumers. Though they offer cash-strapped consumers access to credit, the full-payment requirement can make these loans unaffordable.

More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or soon thereafter. In fact, about one-in-four initial payday loans are re-borrowed nine times or more, as consumers pay far more in fees than they borrowed in the first place. Just like payday loans, the vast majority of single-payment auto title loans are rolled over or re-borrowed on the day they come due or soon thereafter. And one-in-five borrowers end up having their car or truck seized by the lender because they cannot repay the debt.

Our research has shown that the business model for payday and auto title lenders is built on miring people in debt.

The new rule also addresses how lenders extract loan payments from consumers’ accounts. This part of the rule covers short-term loans, balloon loans, and high-cost longer-term loans where the lender has account access. After two straight unsuccessful attempts, the lender cannot debit the account again unless it gets a new authorization from the borrower. In addition, lenders must notify consumers in writing before attempting to debit an account at an irregular time or for an irregular amount.

The final rule issued today applies the underwriting requirements only to lenders of short-term and balloon-payment loans. This is a change from our proposal, which would have required underwriting for a wider swathe of longer-term loans. We want to take more time to consider how the longer-term market is evolving and the best ways to address practices that are currently of concern and others that may arise as the market responds to the reforms prompted by this new rule.

The Bureau has spent five years developing this rule.

Despite Ban on Payday Lending, Public Pensions Profit from Outlawed Loans (NBC New York), Rated: A

Short-term, high-interest debt known as payday loans are illegal inside New York borders. But that hasn’t stopped state and city retirement funds from investing more than $40 million in payday lenders that operate in other states.

The Finance Industry’s Complaint Against the Consumer Financial Protection Bureau (U.S. District Court, Northern District of Texas), Rated: A

Read the full complaint here.

Fifth Third Bancorp’s Greg Carmichael Discusses the Relationship Between FinTechs and Banks (The Clearing House), Rated: A

This environment presents challenges to introducing technologies, products, or services. If we have an issue, we can’t advance the products or services. A zero-tolerance regulatory environment puts constraints on products and services that we may like to get into the marketplace. For instance, small dollar lending has been problematic. As you know, Jim, small-dollar lending is a very important product for our customers. Many customers are regularly going out to payday lenders, title loans, and pawn shops to get short-term access to dollars.

When you look at the amount of capital you have to hold, and the underwriting requirements for a small business loan versus a larger loan, the cost is the same. It makes it more difficult to serve small businesses, and you see small business lending by banks being significantly reduced over what you saw pre-crisis.

This partnership has already helped us form relationships with companies like GreenSky, ApplePie Capital, Transactis, and AvidXchange. This has enabled Fifth Third to accelerate our innovation in those different areas, whether it is unsecured lending, small business franchise lending, or accounts payable automation.

Well, the interesting thing with FinTechs is that most of them need a bank as a partner to be successful.

GreenSky doesn’t exist, Lending Club doesn’t exist, OnDeck doesn’t exist without liquidity and the safe harbor banks provide for the asset. Partnerships between a bank and a FinTechs are a potential strong win for our customers and a win for our banking shareholders because we’re more efficient in how we deliver innovative products and services.

Our $30 billion community commitment focuses on supporting low- to moderate-income borrowers. $11 billion of our five-year commitment is dedicated to mortgage lending; $10 billion is for small business lending; and $9 billion is for community development lending and investments.

Balance Credit Expands to California Consumer Credit Market (BusinessWire), Rated: A

Balance Credit, a leading online lender whose analytics and technology-driven solutions have enabled nearly $100 million in credit access for underserved Americans, has expanded its personal loan offering to residents of California. The expansion will allow Balance to assist the estimated 26 percent of Californians who are currently underserved by mainstream banking products. With the launch in California, Balance has expanded its geographic coverage from 19% to 31% of US consumers.

With today’s news, California marks the 9th state where Balance Credit operates, including Delaware, Missouri, New Mexico, Ohio, South Carolina, Texas, Utah, and Wisconsin.

5 ways to buy a home with a low down payment (KHOU.com), Rated: B

In fact, the average down payment, according to the National Association of Realtors, has been 6 percent for the last three years.

What do you do if you don’t have 20% lying around?

SoFi. SoFi is new to the mortgage lending space, but it’s setting itself apart in a big way. It accepts borrowers with a 10 percent down payment, but they primarily target borrowers with higher FICO Scores — think 700+. On the bright side, they do not charge mortgage insurance. In fact, SoFi doesn’t charge any loan origination, application or broker commission fees.

Lawmakers Call Ex-Equifax CEO’s Testimony Insufficient (Law360), Rated: A

House lawmakers on Thursday sharply questioned the former chairman and chief executive of Equifax Inc. over a massive data breach that left more than 145 million Americans’ personal information exposed, raising questions about why he had appeared to testify as opposed to current executives.

Appearing in his fourth congressional hearing over a three-day span, former Equifax Chairman and CEO Richard Smith faced a flurry of questions over the details of the breach, including over curious stock trades by top company executives just before the breach was made….

Ex-Bookkeeper Stole $ 1.6M From NJ Co. Via PayPal (Law360), Rated: B

Pennsylvania federal prosecutors Thursday filed an indictment charging a Philadelphia man with using PayPal to embezzle $1.6 million from his former employer, a New Jersey company that sells products for the cellular phone industry.

Peter Goodchild, 54, who was a bookkeeper at the Florham Park, New Jersey-based QwikSource LLC, allegedly pilfered the funds over a 10-year period. He also faces charges of money laundering, aggravated identity theft and filing false income tax returns.

Barclays US tests personal finance tool (Banking Technology), Rated: B

Barclays US is dipping its toe into the financial health business, testing a personal financial management tool that aggregates all of a customer’s Barclays credit cards, personal loans and savings products – as well as accounts with other banks – in one place, reports Banking Technology‘s sister publication Paybefore.

This new service, My Personal Bank, which will be announced soon, is embedded in the bank’s credit card mobile app.

Allrise Financial moves into downtown Reno (Northern Nevada Business Weekly), Rated: B

Allrise Financial Group has leased 5,500 square feet at 200 S. Virginia Street in Reno.

Did the CEO of Hardwick Clothes Cut Ties With the NFL Over ‘Unpatriotic’ Protests? (Snopes), Rated: B

In September 2017, Tennessee businessman and CEO of Hardwick Clothes Allan Jones withdrew all NFL-related advertising for his companies, in response to “unpatriotic” national anthem protests.

Source: Snopes

On 26 September 2017, Jones, who also owns Buy Here Pay Here U.S.A. and U.S. Money Shops, posted a screenshot to his Facebook page showing an email instructing his ad-buyer to stop any commercials for his companies from being broadcast during NFL games.

United Kingdom

RateSetter will return to profit next year, says CEO (P2P Finance News), Rated: AAA

RATESETTER will return to profit next year, its chief executive and co-founder has said.

The peer-to-peer lender was profitable in the financial years ended 2014 and 2015, but has fallen into the red since then, as it has invested heavily into scaling up the business.

The ‘big three’ platform published a recording of a recent speech by Rhydian Lewis (pictured) on its website on Thursday, in which he underlined his belief that RateSetter is a “sustainable and profitable model”.

Your October Review – Insight and Analysis (Funding Circle), Rated: AAA

Last month Funding Circle investors, like you, lent over £100 million to UK businesses to help them grow and develop.

Source: Funding Circle

September industry news

Thanks to investors, last year over £1 billion was lent to 10,000 businesses through Funding Circle, helping to create 25,000 new jobs.

We recommend lending £2,000 or more, so you can lend to 100+ businesses, with no more than 1% going to each one.

Source: Funding Circle

From peer-to-peer to here: Three issues that Zopa must solve (AltFi), Rated: AAA

Zopa is the world’s original peer-to-peer lending platform and the biggest consumer-focused platform in the UK. It has also been closed to new investors for the better part of eight months. The reason is explicitly that it cannot find enough new borrowers. Demand for its loans among existing investors is more than sufficient to match demand on the other side of the marketplace. For this reason, Zopa‘s Innovative Finance ISA has largely been an exercise in tax efficiently wrapping money that it already had on the platform.

A more meaningful initiative in the platform’s ongoing plight to attract borrowers might be its latest partnership with Saffron Building Society. This, for the first time in Zopa’s 12 year history, brings it into branches. Its loans will now be made available to Saffron’s 90,000 customers in any of its 11 branches across Hertfordshire, Essex and Suffolk, as well as via the building society’s website. Applicants can expect a quote within minutes.

Zopa may well have a bright future, but in the short-term it seems to me that it has three core issues that it must iron out:

  • Finding new origination channels in order to open to new customers once more, capitalise on the IFISA opportunity and take advantage of the cost benefits of deposit funding.
  • Meaningfully speed up whatever is delaying loan sales on the platform.
  • Find a way to maintain an attractive risk-premium for its P2P investors.

LendInvest CEO Christian Faes Challenges Government to Back SME Builders: Game On (Crowdfund Insider), Rated: A

“There are five times fewer small scale developers today than in the last housebuilding boom and not a single one of today’s top ten housebuilders was created before 1990. There is a clear monopoly in the sector,” clarified LendInvest Co-Founder & CEO Christian Faes.

Online Lender Lendy Seeks IFISA Permission & Announces Repayment For Largest P2P Loan (Crowdfund Insider), Rated: A

UK-based peer-to-peer property platform Lendy is currently seeking permission to launch an innovative finance ISA (IFISA). This news comes just after the online lender announced its 2016 earnings and additional growth plans.

Meanwhile, Lendy also announced the repayment of its largest p2p loan. Bridge and Commercial reported that the loan, which was secured against former the Kentish Town Studios building in North London, has been repaid in full 21-days ahead of schedule and even returned a gross 12% per annum in interest.

Digital wealth manager Moneyfarm acquires tech behind fintech chatbot Ernest (TechCrunch), Rated: A

Moneyfarm, the U.K.-headquartered “digital wealth manager” has acquired the technology behind personal finance chatbot Ernest. Terms of the deal aren’t being disclosed, though I understand that, along with the tech, this is an acqui-hire of sorts, seeing London-based Ernest’s CTO Lorenzo Sicilia join Moneyfarm to oversee technology integration.

Starling Bank expands to offer business accounts (Banking Technology), Rated: A

Starling Bank, one of the first banking challengers to offer a mobile-only current account in the UK, is expanding into the business market.

The Starling for Business account will initially be for entrepreneurs, sole-traders, and small business owners. The aim is to offer “fast, secure, and flexible” ways of managing business finance from mobile.

Can a robot give financial advice? (Which?), Rated: B

New guidance setting out how artificial intelligence services can give streamlined financial advice has been published by the Financial Conduct Authority (FCA).

Some of the most popular include:

  • Nutmeg: an online service that suggests a diversified investment portfolio tailored to the personal information you provide. Nutmeg will continually rebalance your portfolio in line with your risk profile, unless you change your preferences.
  • BestInvest: a platform to manage your investments online, offering research and analysis tools. Further advice is provided via phone by advisers.
  • RPlan: a tool for DIY investors, with the choice to choose, track and review investments online.
  • Barclays Financial Personality Assessment: this tool helps you identify your attitude towards risk and your composure levels. Users can then work with an adviser to build a portfolio.

Robo-advice on mortgages

Aside from investing advice, online services are also helping people make another major financial decision – applying for a mortgage.

A handful of robo-advisers for mortgages are currently operating in the UK market – Trussle and Habito are both up and running, while MortgageGym was granted a license from the FCA earlier this year.

Saving by app

  • Chip is a smartphone app which analyses your spending patterns and automatically transfers your money into a savings account, based on what it thinks you can add afford to save. While its standard interest rate is 1% AER, users can earn up to 5% AER by referring friends to the app.
  • Plum operates in a similar way, analysing your transactions and recommending savings, though it communicates via Facebook Messenger.
  • Cleo analyses your spending and suggests improvements to help you save more, but it won’t move your money for you.

Where are the top 10 buy-to-let postcodes? (Bridging&Commercial), Rated: B

Luton has held off Colchester to remain top of the LendInvest buy-to-let index, while Manchester has broken into the top three amid increasingly stronger metrics in northern markets.

The top 10 buy-to-let postcodes

Source: Bridging & Commercial

The bottom 10 buy-to-let postcodes

Source: Bridging & Commercial
China

Pyramid scheme investigations in China double during 2017 (NASDAQ), Rated: AAA

The number of pyramid schemes investigated by Chinese police more than doubled in the first nine months of the year, with cases involving nearly 30 billion yuan ($4.5 billion), the official Xinhua News Agency said on Thursday.

Police investigated 5,983 schemes from January through September, an increase of 118 percent, with internet-based pyramid schemes on the rise, many involving virtual currencies, according to the report which cited the Ministry of Public Security.

European Union

Rating agency opens in Europe (Structured Credit Investor), Rated: AAA

KBRA has opened its first European office, located in Dublin, Ireland, and intends to expand into further jurisdictions (SCI passim). Several new hires and some existing staff will support the European effort, which will have a concerted focus on infrastructure and aviation securitisation, along with traditional core business areas.

MyBucks Named ‘Best Financial Inclusion Company’ at European FinTech Awards 2017 (Next Billion), Rated: B

Luxembourg-based and Frankfurt-listed fintech, MyBucks S.A., was announced as the winner of the Award for ‘Best European Financial Inclusion Company’ at the European Fintech Awards 2017 taking place in Brussels, Belgium.

International

Leadership Changes at LendIt (Lend Academy), Rated: AAA

LendIt events today look and feel very different from our early events. Along with that LendIt as an organization has grown and matured. Last month we made some internal changes that I want to share with you here.

My partner Jason Jones, who has been the driving force in the growth of our business, took over the CEO role some time ago as the business became more complex.

As of early September, Jason has transitioned out of the CEO role and is now Co-Chairman along with me. This allows him to focus his entrepreneurial drive on areas of our business where he can make the most impact. He is turning his attention to become more client focused as major global financial services and technology companies become more involved in our business.

Bo Brustkern, who has until recently stayed in the background, is now taking on the mantle of CEO of LendIt.

Similarly, we have promoted Joy Schwartz, our longtime head of operations, to become President of LendIt.

Finastra, R3 and seven banks have blockchain plan (Banking Technology), Rated: A

FinastraR3 and seven banks – including BNP ParibasBNY MellonHSBCING and State Street – are working together to create a blockchain-fuelled online marketplace for the syndicated loan market.

Underpinned by Corda, R3’s distributed ledger technology (DLT) based platform, Fusion LenderComm exposes real-time credit agreement, accrual balances, position information and transaction data to lenders, from agent bank loan servicing platforms such as Finastra’s Fusion Banking Loan IQ.

How Prodigy Finance Helped Fund My MBA At London Business School (Business Because), Rated: A

Determined to boost her business skills and gain more international exposure, Argentinian Amelia Martinez decided to pursue an MBA at London Business School (LBS).

Coming from a developing country with high levels of inflation and currency fluctuations, she faced many hurdles funding her MBA, particularly when new government restrictions were imposed preventing her from taking money out of her country to pay for the last instalment of her tuition.

With a Prodigy Finance loan however, she was able to pay for and complete her degree. Having completed her MBA at LBS, she’s since gone on to work for the company that helped her do it.

Banks team up with IBM in trade finance blockchain (Financial Times), Rated: B

A group of banks are teaming up with IBM to build a new global system for trade finance using blockchain technology that is designed to track goods and automatically release payments as they move around the world by plane, ship or truck.

Bank of Montreal, Caixabank, Erste Bank and Commerzbank are joining the project called Batavia, which was launched by UBS and IBM last year and aims to start testing the technology using real transactions by early next year.

Australia

Millennial Money: We’re not willing to pay to keep our finances in check (Stuff), Rated: A

A 2014 survey by global investment banking company UBS found millennials preferred to seek advice from their friends rather than a professional.

Most millennials, like older generations, first looked to a spouse or partner for financial advice. Their next choice is their parents, followed by friends and other family members.

Non-millennials were much bigger champions of financial advisors: 40 per cent of non-millennial respondents reported seeking advice from one as their first port of call on a financial decision, while only 14 per cent of millennials said the same.

Source: Stuff

Blockchain Driven P2P Lending & Investment Platform Announces Crowdsale (Coin Idol), Rated: B

The crowdsale for the platforms ‘LoanBit Token (LBT)’ is scheduled to go live in November, with a presale beginning on 4th October 2017, and ending on 15th October 2017.

The ICO for LoanBit is set to go live on in November and will be open for only 31 days.

LoanBit – Legit Bitcoin Lending Interest Rates & Earning Platform? (Bitcoin Exchange), Rated: A

LoanBit is a lending platform created by an Australian startup called LoanBit Proprietary Limited. The platform is designed to work as a mediator between bitcoin lenders and businesses looking for short-term loans in bitcoin.

LoanBit promises to offer you a guaranteed daily interest rate of 2% to 5%, which adds up to triple or quadruple digit guaranteed returns per year. You can invest in LoanBit for as little as 0.01 BTC.

LoanBit claims to be a legitimately registered Australian company. The company lists an address in Canberra (17/7-17 Bunda St). They also have an Australian company number (610 418 794).

In any case, the LoanBit.net website was registered on February 16, 2017. The latest version of the website, which features the HYIP scam, only appeared online on September 10, 2017 – so it’s brand new.

Yes, LoanBit appears to be a scam, based on all of the information we can find online today.

India

P2P lending norms will bring order to industry, but speed bumps ahead (VC Circle), Rated: AAA

India’s P2P lending market, which is predicted to be worth $4-5 billion by 2023 according to community loan exchange platform Faircent, has several players operating in the space, such as LenDenClub, Monexo, BillionLoans, i-Lend, LoanMeet, i2iFunding and FinMomenta. However, so far, P2P lending had been operating in a regulatory grey area. As such, the rollout of these guidelines gives legitimacy to the business.

FinMomenta co-founder and CEO Brahma Mahesh Khaderbad believes it paves the way for P2P platforms to gain legality, transparency and credibility.

The RBI has said that every company seeking registration should have a net-owned fund of not less than Rs 2 crore.

The guidelines say that any fund transfer between participants on a P2P lending platform shall be through an escrow account, which will be operated by a trustee. At least two escrow accounts, one for funds received from lenders and pending disbursal, and the other for collections from borrowers, shall be maintained.

The central bank has said that the aggregate exposure of a lender to all his/her borrowers at any point, across all P2Ps, should be capped at Rs 10 lakh. The aggregate loans taken by a borrower at any point of time, across all P2Ps, has also been capped at the same amount. The exposure of a single lender to the same borrower, across all P2Ps, shall not exceed Rs 50,000.

Read more on the guidelines here.

P2P lending platforms to get transparent, safer (Business-Standard), Rated: A

The norms on peer-to-peer (P2P) lending platforms issued by the Reserve Bank of India (RBI) will help make them more transparent and also safer for customers. “The regulations ensure that P2P platforms will protect the interests of lenders and borrowers will get faster access to credit,” says Shankar Vaddadi, founder and director of i-lend.

What peer-to-peer lending is and how RBI’s guidelines will impact it (Financial Express), Rated: B

The RBI said P2P lending, even though of no significant in value, yet can “disrupt the financial sector and throw up surprises” in future, and the associated risks to the financial system are “too important to be ignored”.

The RBI has laid down following criteria for registering under Non-Banking Financial Companies (NBFC) :

  • P2Ps should have a minimum Rs 2 crore capital
  • P2Ps cannot take any loan exposure themselves
  • P2P will undertake credit assessment and risk profiling of the borrowers and lenders
  • P2P will maintain documents related to loan agreements
  • P2P will provide assistance in disbursement and repayments of loan amount
  • P2Ps cannot hold balance sheet or funds
  • P2Ps cannot cross-sell products except for some insurance products

“This is an extremely positive step for the P2P lending business. The retail millennial lenders, an investor demographic which has been focussed on extensively in the regulations will be leveraging the power of the crowd for the benefit of small
borrowers,” Vinay Mathews, Founder & COO, Faircent.com said.

Student micro-financing startup SlicePay raises Series A round (VC Circle), Rated: A

SlicePay, a digital payment platform catering to college students, has raised $2 million (about Rs 13 crore) in a Series A round from Japanese investment fund Das Capital and Russian early-stage investor Simile Venture Partners, its co-founder told VCCircle.

Existing investor Blume Ventures also participated in the round.

YES BANK launches second cohort of YES FINTECH accelerator (YourStory), Rated: A

YES BANK, India’s fifth-largest private sector bank, has been significantly contributing to the fintech space by collaborating with and mentoring more than 100 fintech startups to co-create innovative financial solutions for its Corporate, SME, and retail customer base. In March this year, they launched a business accelerator programme for fintech startups called YES FINTECH, in association with T-Hub, Anthill, and LetsTalkPayments.

YES BANK is all set to launch the second cohort of YES FINTECH, which will kick off on November 13.

The YES FINTECH roadshow in Mumbai will include a Fireside Discussion on GES (Global Entrepreneurship Summit) and its impact on Fintech and Mumbai as India’s Fintech Hub. In conversation will be Amit Goel, Founder LTP, Puneet Shukla, NITI Aayog and Vivek Belgavi, Partner, PwC. After this, Rajeev Chari, COO, Numberz and Arpit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of being a part of the programme.

When: 6th October

Where: ISME Ace, One India Bulls, Lower Parel, Mumbai

Time: 2 pm-5pm

The YES FINTECH roadshow in Bengaluru will begin with a GES lead-up panel discussion on ‘Women in Fintech. Panellists will include Lizzie Chapman from Zestmoney, Prashanthi Reddy from YES BANK and Dr. Anna Roy of NITI Aayog.  Following this, Shankar, Founder, FRS Labs, and  Ankit Ratan, Founder, Signzy, both startups that graduated from the Summer Cohort of YES FINTECH, will share their experience of what it was to participate in the programme.

When: 11th October

Where: 91 Springboard, 8th Block Koramangala, Bengaluru

Time: 2 pm-5pm

Authors:

George Popescu
Allen Taylor