Thursday April 25 2019, Weekly News Digest

fintechs

News Comments Today’s main news: LendingClub restructures SME lending. Funding Circle lowers return projections. RateSetter receives Queen’s Award for Enterprise. SoFi could get $500M funding from Qatar. Today’s main analysis: How personal loans impact credit scores a year into repayment. Today’s thought-provoking articles: Employer payday loans and continuous billing using today’s technology. Interview with Deserve’s […]

The post Thursday April 25 2019, Weekly News Digest appeared first on Lending Times.

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United States

LendingClub shuts down SME lending arm (Banking Tech), Rated: AAA

US peer-to-peer lending pioneer Lending Club has closed the doors on its in-house small business lending operation, reports Julie Muhn at Finovate.

Opportunity Fund, a non-profit small business lender; Funding Circle, one of the largest alternative small business lending platforms in the US; and Lending Club have teamed up to offer Lending Club’s small business clients’ access to credit. Businesses can now borrow up to $300,000 for rates as low as 5%.

How Personal Loans Impact Debt and Credit Scores a Year Into Repayment (LendingTree), Rated: AAA

Key findings

  • One year after taking on a personal loan, 52% of borrowers owed less overall on credit cards and personal loans. These borrowers’ balances — the sum credit card and personal loan balances — fell $811 on average.
  • Among baby boomers who took out personal loans, 56% lowered their overall balances after their first year of repayment, compared with 52% of Generation X and 48% of millennials.
  • Boomers also lowered their balances by much larger amounts, owing an average $2,048 less after a year. Balance reductions of younger borrowers were more modest: Generation X lowered their overall balance by $338, and millennials reduced their overall balance $250.
  • A year into repaying a personal loan, credit scores declined slightly for all age groups. Boomers’ credit scores declined the least, with the median falling just 1 point from 669 to 668. The median score of Generation X personal loan borrowers fell 7 points, from 659 to 652. Millennial credit scores fell 10 points, dropping from 661 to 651.
  • Credit utilization rates — the ratio of the sum of credit card balances to the sum of credit card limits — show a similar trajectory. One month after taking a personal loan, the median utilization rate fell from 35% to 26%. But after the first month, utilization increased. The median utilization rate one year after taking a loan increases to 44%.

How To Get Your Paycheck Early (Forbes), Rated: AAA

Speaking of Walmart, the retailer has partnerships with two fintech startups–Even Responsible Finance and PayActiv–that enable its US workers get part of their salary paid before payday.

Employees can get up to eight drawdowns (called Instapays) on their salary ahead of scheduled payouts. The first eight drawdowns are free to the employees, and then in subsequent use, fees are levied across a personal finance app available through Even.

Continuous Billing

There’s no reason why billers can’t provide continuous information about what a customer owes, in real time, online or through mobile apps.

Deserve’s Kalpesh Kapadia: ‘We promise the best credit card for our customer’s profile and life stage’ (Tearsheet), Rated: AAA

The financial system has always struggled with young people. Because the system uses credit history, young people were frequently excluded from credit products because they’re new to the system. If you’re an immigrant or foreign student studying in the US, it’s way worse. Kalpesh Kapadia set out to change a system that was skewed against young people. He’s the co- founder and CEO of Deserve, which offers credit cards to college students at 2500 universities in the US.

To do this, he’s created an analytics-based lending platform that’s also branching out into powering credit cards as a service. We talk about how Deserve is able to underwrite credit-thin files and why he thinks his firm is at an advantage when it comes to competing against Marcus’s credit products and Apple’s new credit card.

Resolve Accelerates Shift to B2B eCommerce with Automated Net Payment Terms (GlobeNewswire), Rated: A

According to Forrester Research, business-to-business (B2B) eCommerce is poised to reach over $1.8 trillion by 2023. To help power this explosive growth, Resolve today announced that it has formally spun out of Affirm to launch an automated payments platform offering extended net terms. Early customers using Resolve’s payment automation technology have realized significant increases in B2B sales, growth in order size, and faster sales cycles.

Online Auto Loans: The Pros and Cons (U.S. News), Rated: A

Things are different now. Almost every financial institution has an online presence, and most offer information about car loans on their site. Most also provide an opportunity to apply for financing online, with a growing number able to take car buyers through the entire auto loan process without ever having to visit a bank or credit union branch.

It’s Not Easy Solving For $ 1.5 Trillion In Student Debt (PYMNTS), Rated: A

There is $1.5 trillion worth of student loan debt outstanding in the U.S. and it is creating problems.

Admittedly the plan is quite a bit more complex than that, as detailed by Sen. Warren in a Medium post that went live yesterday (April 22). In broad strokes, for students from families with less than $100,000 a year in annual income, $50,000 in student loan forgiveness would be available. The post also calls for “substantial debt cancellation for every person with household income between $100,000 and $250,000.” The Warren plan also calls for the elimination of tuition at all two-year and four-year public institutions of higher learning, and would create a fund of at least $50 billion specifically for historically black colleges and universities. Federals subsidies for for-profit colleges would be banned.

Would You Take a Job Just for the Fertility Insurance? (Glamour), Rated: AAA

The cost, however, put it out of reach. A single round of IVF rings in at about 

dv01 Launches Credit Risk Transfer Market Surveillance Offering (dv01 Email), Rated: A

dv01 today announces the launch of its Credit Risk Transfer (CRT) Market Surveillance offering, which will be showcased on April 25 at the 4th Annual Credit Risk Transfer Symposium in New York.

dv01’s latest offering adds $1.8 trillion of Freddie Mac (STACR) and Fannie Mae (CAS) CRT securitizations to dv01’s modern web-based data analytics platform, furthering their goal of bringing greater transparency to capital markets. Building on the success of dv01’s Market Surveillance offering for consumer loans (launched in 2017), the CRT offering will allow investors to analyze historical performance of CRT deals both individually or as combined deals, perform whole market analysis, and run cash flow scenarios.

Let’s give post offices another job (The Student Life), Rated: A

As of 2017, approximately 6.5% of households in the U.S., totaling more than eight million, don’t have an account open at an insured bank, according to the Federal Deposit Insurance Corporation. An additional 24.2 million households utilize non-traditional financial services that often make them vulnerable to usurious lending rates.

Americans utilizing alternative forms of credit spend nearly 10% of their salaries on fees alone. For a family making the average salary of $25,500 in 2012, those fees average out to $2,412.

The USPS has 59% of its locations in zip codes that have one or fewer banks, according to a 2011 government report. This could help people to overcome a geographic boundary.

Equifax acquires PayNet to help expand access to capital for small and mid-sized businesses (PR Newswire), Rated: A

Equifax Inc., a global data, analytics and technology company has acquired PayNet, a company that provides commercial credit risk underwriting and management solutions to online and alternative finance lenders, and commercial finance and leasing companies in the U.S. and Canadian markets.

Marketplace Lending Update #5: The Very Long Arm of Colorado Law (The National Law Review), Rated: A

Recently a state court in Colorado ruled that securitization trusts that acquire marketplace lender loans originated to Colorado consumers are subject to Colorado jurisdiction. The court’s ruling derailed the attempt by the securitization trusts to escape the ongoing battle between the State of Colorado and marketplace lenders over rates and fees that can be charged to Colorado residents.

Berman Tabacco Announces Major Win for Victims of Plain Green Online Lending Scheme (BusinessWire), Rated: A

In a long-awaited opinion, the U.S. Court of Appeals for the Second Circuit today ruled that borrowers who took out loans from the Native American-affiliated online lender Plain Green can proceed with their nationwide RICO class action in Vermont federal court. The Second Circuit affirmed a May 2016 ruling by District Judge Geoffrey W. Crawford and comes nearly two years after oral argument on Defendants’ appeals. Berman Tabacco and Gravel & Shea PC are Lead Counsel in the case, Gingras, et al. v. Rosette, et al., No. 5:15-cv-00101-gwc (D. Vt.).

2nd Circ. Says Tribal Officers Not Immune In Payday Loan Suit (Law360), Rated: B

The Second Circuit on Wednesday rejected a bid by officers of tribe-owned lending company Plain Green LLC to escape a suit claiming they charged exorbitant interest rates on so-called payday loans,…

White Oak Global Advisors Completes $ 30M Loan for Danimer Scientific Holdings (AP News), Rated: B

White Oak Global Advisors, LLC (“White Oak”) today announced it acted as sole lender and administrative agent to provide a $30 million senior credit facility to Danimer Scientific Holdings, LLC (“Danimer”), a manufacturer of specialty compostable and biodegradable plastics. This transaction expands on White Oak’s ESG-lending platform, which aims to finance small and medium-sized enterprises (“SMEs”) that are developing solutions to help address environmental and social issues around the world.

Online Lender Upgrade Recognized as Top Place to Work in San Francisco (Crowdfund Insider), Rated: B

Online Lender Upgrade, a Fintech serving the consumer credit market, has been named a “Best Place to Work in the Bay Area’”by the San Francisco Business Times and Silicon Valley Business Journal. Upgrade is the creation of  CEO Renaud Laplanche, the founder of publicly traded marketplace lending platform LendingClub. This is the second time Upgrade has been recognized as a nice place to work in the notoriously work focused bay area.

United Kingdom

Funding Circle lowers return projections (P2P Finance News), Rated: AAA

FUNDING Circle has revised down its annual return projections in the face of a weaker environment for consumer credit.

The peer-to-peer business lender now predicts investors in its Balanced portfolio will achieve a return of 4.5 to 6.5 per cent a year.

Investors in its Conservative portfolio, meanwhile, could achieve 4.3 to 4.7 per cent a year.

Peer to Peer Lender RateSetter Receives Queen’s Award for Enterprise (Crowdfund Insider), Rated: AAA

Peer-to-peer investment platform RateSetter has been recognized with a prestigious Queen’s Award for Enterprise for excellence in innovation.

Challenger bank Tandem to double headcount as CEO warns of Brexit brain drain (Yahoo! Finance), Rated: A

Tandem Bank said on Tuesday it had moved into a new 16,000 square foot office in London as part of plans to double headcount this year to 230 and grow to 300 people by the end of 2020.

“Last year we hit 500,000 customers when we had an expectation for 150,000,” Knox told Yahoo Finance UK.

Consumer P2P loans weigh on P2PGI fund returns (P2P Finance News), Rated: A

P2P Global Investments (P2PGI) has warned that its legacy peer-to-peer lending portfolio continues to be more volatile than expected despite posting an improved net asset value (NAV) return for 2018.

P2PGI – the world’s first P2P-focused investment trust – revealed in its annual report that its NAV for 2018 was 5.2 per cent, up from three per cent in 2017.

China

How Leverage Turns Market Corrections into Crashes (Yale Insights), Rated: AAA

Q: Is shadow borrowing unique to China?

It’s difficult to study the phenomenon very precisely. We do observe shadow lending in various forms growing throughout the world, including in the U.S., and, if left unregulated, this type of lending could mean that household and financial institution leverage keeps rising in a way that is both unregulated and undocumented.

Because the Chinese government believed that the shadow sector was partly responsible for the crash, it seized the data from some shadow lending platforms and allowed us to analyze it.

Q: Who’s providing the financing in these situations?

The exact sources of financing are not well known. Some of it could be other stock investors that have put up their own holdings as collateral and borrowed against it and then lend out the proceeds on the shadow market. It could also be peer-to-peer lending platforms. It’s also believed that some of the financial institutions and brokerage firms within China may have also lent out within the shadow sector.

Trade war with US could lead to economic ‘cold war’ for China, Beijing researchers say (SCMP), Rated: A

The tit-for-tat tariff war with the US and the broad hostility is seen as a major risk endangering China’s “economic security”, along with a property bubble, local debt, unemployment and online financing including peer-to-peer lending, according to the latest edition of China’s Economic Security Outlook.

European Union

French Lender Societe Generale Issues $ 112 Million Bond on Ethereum (CoinDesk), Rated: AAA

French financial services giant Societe Generale Group has issued about $112 million worth of bonds in the form of a security token on the public ethereum blockchain.

Announced today, a subsidiary called Societe Generale SFH used the OFH token (obligations de financement de l’habitat, or home financing obligations) to represent 100 million euros of covered bonds, a type of security that is backed by specific assets but remains on the issuer’s balance sheet.

The bond has a five-year maturity with a 12-month extension period, Moody’s said.

N26 opens tech hub in Vienna with a focus on security (TechCrunch), Rated: A

Fintech startup N26 is opening an office, its fourth, in Vienna. Eventually, the company plans to hire 300 software engineers, product managers and IT specialists.

API card platform Marqeta signs up three customers in Europe (Verdict), Rated: B

The platform has been signed up by French digital bank Morning, Swiss digital bank Yapeal, and Spanish POS lender Aplazame.

CoinLoan Plans IEO and Seeks Partners (Digital Journal), Rated: B

CoinLoan crypto-backed lending platform declares its intention to launch an Initial Exchange Offering and invites discussion with major crypto exchanges interested in the listing.

International

SoFi Is in Talks With Qatar for $ 500 Million Funding Round (Bloomberg), Rated: AAA

Fintech startup Social Finance Inc. is in the final stages of closing a funding round from the Qatar Investment Authority and others, according to four people familiar with the matter.

The new round, which could close as soon as this week, is said to value the startup at an amount similar to the $4.3 billion valuation of its 2017 funding round, led by Silver Lake. Two of the people said that in order to achieve the same valuation, investors were asking for more protections should the company raise money or sell itself for a lower price tag in the future. The terms of the deal have not been finalized and could still change, the people said. All of the people asked not to be identified because the discussions are private.

These are the top 10 hottest fintech startups and companies in the world (Business Insider), Rated: AAA

Fintech industry funding has already reached new highs globally in 2018, with overall funding hitting $32.6 billion at the end of Q3.

Brex

What it does: Brex is a US-based corporate credit card provider, which initially focused on serving startups.

Raisin

Why it’s hot in 2019: Raisin became a fintech unicorn after raising $114 million in January, and has since then formed partnerships with Commerzbank and ClearScore. Additionally, the startup partnered with Starling Bank in 2018 to launch bank accounts in the UK

SoFi

Why it’s hot in 2019: While the company previously focused on loans, including student loans, in 2019 it has made some significant moves into the wealth management space, and launched both free ETFs and an investment product, dubbed SoFi Invest. As it becomes a more rounded financial product, SoFi will be worth watching in the next few years.

Lending Express

What it does: Lending Express is a US-based lending platform, which focuses on SMBs, and helps them gain access to more funding by providing them with advice.

Volt Bank

Why it’s hot in 2019: In January, Volt became Australia’s first fully licensed neobank. The challenger bank will first offer a suite of retail banking products, as well as budgeting and account aggregation tools, and plans to enter the SMB banking sector in 2020.

U.K. fintech now has war chest to push stateside (American Banker), Rated: A

Fresh off a $100 million funding round last year, the British startup OakNorth is preparing to license its business lending technology to U.S. banks and beyond.

The 3-year-old small-business lender is entering the U.S. at a time when fintechs and banks have stepped up their digital business lending efforts. Though OakNorth has not announced any official partnerships in the U.S., CEO Rishi Khosla said there’s appetite for what the firm is offering.

BlockFi Is Now Paying Interest on $ 53 Million of Crypto Deposits (CoinDesk), Rated: A

Crypto lending startup BlockFi has gathered another $18 million of bitcoin and ether deposits since last month, bringing its total interest-earning accounts to $53 million.

The company also lowered its minimum balance to earn interest on bitcoin from 1 BTC to 0.5 BTC and expanded its operations to India, meaning its service is now available globally, except for territories sanctioned by the U.S., U.K. and E.U.

No crypto winter for BlockFi as client base reaches 50% (CoinGeek), Rated: B

Crypto lending startup BlockFi has been growing, and now claimed that it has grown its client base by 50% in just one month.

Funds at your disposal: Digital lending making inroads into traditional lending (Finextra), Rated: A

The penetration of the internet of things and devices such as smartphones has brought in many advancements. This has made economic activities available at the touch of a button. Among the various sectors, the digital world has evolved the way traditional banking processes are being carried out. A growing number of businesses and individuals are filling applications online for taking loans rather than getting into the lengthy lending process.

Microsoft Will Pay You To Develop… Ethereum? (CryptoBriefing), Rated: B

“[ConsenSys Labs] has put up a few bounties in the vein of rethinking the lending market, and thinking about a peer-to-peer lending and a decentralized credit score system,” explains ConsenSys’ Operations Lead Vivek Singh. Instead of relying on centralized credit agencies, such a system—if successful—could allow borrowers to leverage their social connections into a sort of decentralized credit score.

India

Indian lendtech ZestMoney raises $ 20m (Banking Tech), Rated: AAA

ZestMoney, a start-up that helps consumers with no credit history get loans to buy online, has raised a $20 million Series B.

‘Money Loji’ launches App that offers loans to salaried professionals within 5 Minutes (Business Standard), Rated: A

Money Loji, a modern money ending platform, has launched its App, which offers quickest and the most secure loans to salaried professionals for an immediate requirement with flexible repayment options starting from 7 days to a maximum of 90 days. They follow a unique three-step process – application, approval, disbursement which is carried out within 3-4 minutes. The eligibility criterion is a minimum in-hand of Rs 20,000/month and a minimum age of 23 years. The application requires the users to upload an identity proof, an address proof, last 3 alongside the slips.

Blockfi Launches High-Interest Crypto Lending Program in India (Bitcoin.com), Rated: A

New Jersey-based crypto startup Blockfi announced Tuesday that it has expanded service to users in India. Its flagship Blockfi Interest Account (BIA) for BTC and ETH is now available in 65 countries.

Asia

Nuo Network Crypto Lending Platform Becomes Asia’s Biggest with $ 2 Million in Reserves (Bitcoin Exchange Guide), Rated: AAA

ConsenSys ventures backed Nuo.Network, which is a non-custodial lending platform recently made it to the top 5, dollar Defi (Decentralized Finance) projects and it presently the largest lending platform based in Asia. In the past month, the value of loans given has doubled, this is partly due to the growth of DAI reserves, which is now about 500,000 USD and the surge in Maker stability fees.

Why China’s Ping An OneConnect picks Indonesia for expansion (The Asset), Rated: A

The archipelago is viewed as an ideal market to benefit from the services offered by the enterprise. According to the Ping An Group, Indonesia, at around US$27 billion in 2018, is the largest and fastest-growing internet economy in Southeast Asia.

MENA

Banks use fintech to make up for lost time on financial inclusion (Financial Times), Rated: AAA

It fell to a mobile phone company more than a decade ago to financially empower tens of millions of Africans who found themselves passed over by the traditional banking sector. Now, some 12 years after Vodafone co-founded M-Pesa, the mobile payments venture that took east Africa by storm, banks are upping their game to improve financial inclusion rates across Africa and the Middle East, as technology widens their ability to deliver banking services at lower costs.

Source: Financial Times

In east Africa, the Catalyst Fund has backed Sokowatch, a three-year-old Kenya-based fintech that enables small retailers to order goods from suppliers registered on the mobile-focused platform and receive same-day deliveries. It also offers access to credit. The platform has already expanded into Tanzania and Rwanda.

In the Middle East, Citigroup has given $5m to a microloans fund in Jordan that helps give women access to credit. The financial support will help provide loans to around 10,000 additional women.

Iraq’s financial inclusion drive boosted by homegrown fintech (Financial Times), Rated: A

Around 7m Iraqis are now receiving welfare benefits or public sector salaries electronically, as the government replaces cumbersome cash dispersals with biometric debit cards that can be used at ATMs and in shops.

Only 23 per cent of Iraqis aged 15 and over held an account with a financial institution in 2017, according to the World Bank — although that figure has doubled since 2011.

Source: Financial Times

YouHodler Cryptocurrency Lending Platform Adds Dash (Dash News), Rated: A

Users will now be able to borrow in EUR, USD, or Stablecoin against their Dash as well as use the site to covert Dash to any crypto or fiat on the platform and withdraw to their crypto or fiat wallet. If a user enters their credit/debit card on the platform then they can “convert DASH to fiat and instantly withdraw that amount onto their personal cards, adding a unique “real world” utility for crypto”.

Canada

7 ways emerging fintech hubs are taking on the giants (PaymentsSource), Rated: AAA

Toronto is another significant fintech force in North America, and the leading fintech zone in Canada, because of the high concentration of financial organizations and technology development in Ontario. Last year Toronto accounted for CA$221 million (US$165 million) in total fintech investments across 25 deals, according to a recent report from Toronto Financial International (TFI).

Toronto ranks ninth out of the top 15 global fintech hubs, according to TFI. Currently the region has more than 190 fintech companies and 20 incubator/accelerators in operation. Payments represent the single leading category of fintech investment in the Toronto area, and combined with lending and digital currencies/FX firms it accounts for half of all local fintech activity, according to TFI.
Source: PaymentsSource
Latin America

Brazilian Credit Marketplace FinanZero raises USD 11 Million in Series B Round (Yahoo! Finance), Rated: AAA

FinanZero, a Brazilian fintech that operates as a consumer loan broker, received a new round of investment, raising USD 11 millionfrom Atlant Fonder, Dunross & Co and Vostok Emerging Finance, among other investors.

Authors:

George Popescu
Allen Taylor

The post Thursday April 25 2019, Weekly News Digest appeared first on Lending Times.

Thursday December 6 2018, Daily News Digest

Consumer Spending

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

Consumer Spending

News Comments

United States

United Kingdom

International

Southeast Asia

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News Summary

United States

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

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

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

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

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

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

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

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

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

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

Source: WSJ, PeerIQ
Source: VantageScore, PeerIQ

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

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

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

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

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

Source: LendingTree
Source: LendingTree

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

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

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

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

Source: LendingTree

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

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

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

Source: Crowdfund Insider

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

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

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

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

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

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

Source: Business Insider

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

United Kingdom

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

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

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

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

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

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

Zopa explained it would redefine banking with the following services:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

International

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

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

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

Source: P2P Banking

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

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

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

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

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

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

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

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

Australia

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

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

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

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

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

India

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

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

Southeast Asia

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

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

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

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

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

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

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

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

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

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

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

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

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

Canada

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

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

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

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

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

Africa

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

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

Authors:

George Popescu
Allen Taylor

Thursday November 8 2018, Daily News Digest

LendingClub total loans

News Comments Today’s main news: LendingClub loan origination estimates better than expected, losses widen. Zopa closes 60M GBP in funding. Landbay hits 200M GBP lending landmark. N26 expands in Europe. BBVA, Red Electrica Corporation complete blockchain-based syndicated loan transaction. Today’s main analysis: Q3 earnings for GreenSky, LendingClub, OnDeck. Today’s thought-provoking articles: How GreenSky is changing financing. LendingTree’s mortgage offers report […]

LendingClub total loans

News Comments

United States

United Kingdom

International

Other

News Summary

United States

LendingClub profit beats estimates on record loan originations (Reuters), Rated: AAA

Online lender LendingClub Corp (LC.N) reported an adjusted third-quarter profit that edged past analysts’ estimates and raised its full-year earnings forecast on Tuesday, helped by record loan originations and higher transaction fees.

The company said it now expects 2018 adjusted earnings of between $89 million and $94 million, up from a previous range of $75 million to $90 million.

LendingClub loss widens on higher expenses (Reuters), Rated: A

Online lender LendingClub Corp’s quarterly net loss widened, due to higher expenses for outstanding legacy issues.

The San Francisco-based company’s net loss fell to $22.8 million, or 5 cents per share, in the third quarter ended Sept. 30, from a loss of $6.5 million, or 2 cents per share, a year earlier.

LendingClub to expand in Utah (Pulse.com), Rated: B

The Governor’s Office of Economic Development announced 

How GreenSky, In-House Financing, and Blockchain Are Transforming the World of Credit (Premier Gazette), Rated: AAA

Fifty years ago, if you needed a loan for yourself or your business, you would typically walk into a brick-and-mortar bank, fill out a bunch of paperwork, talk to a loan officer, and wait several days or weeks to find out if you were approved. Today, this story has changed, and it’s going to look even more different in the future.

Borrowers seem to like GreenSky’s new way of obtaining credit. So far, the fintech company has served more than 1.9 million customers, providing them over $13 billion. Perhaps GreenSky’s most promising distinction is that it has also been consistently profitable with its new way of providing loan services. Its transaction volume has grown steadily from $2.1 billion in 2015 to $3.8 billion in 2017. During the same time, it grew its merchant base from 5,000 to nearly 13,000. Clearly, consumers in the 21st century like the new way of borrowing.

GreenSky estimates the home improvement industry, one of its key targets, to be just south of $350 billion annually. At a transaction volume of $3.8 billion, the fintech company has roughly 1% of the market.

Source: Premier Gazette

The APR’s for GreenSky’s products tend to fall between 5% and 24%, depending on the borrower’s credit profile. Loan terms vary from 42 to 90 months, and customers can borrow up to $55,000. GreenSky does not cater to subprime borrowers.

Late in 2018, GreenSky announced a new partnership with American Express.

Roundup of Q3 2018 Earnings: GreenSky, OnDeck, LendingClub (Lend Academy), Rated: AAA

OnDeck posted gross revenues of $103 million, up 8% from the previous quarter and 23% from the prior year period. OnDeck is benefiting from higher interest income due to rate increases as well as their origination growth while being able to decrease funding costs. Effective interest yield was 36.5%, up from 33.1% last year.

Source: Lend Academy

Net income came in at $9.8 million for the quarter, up from a loss of $4.1 million from the prior year period.

Source: Lend Academy
  • Gross revenue of $392 million to $396 million, up from $380 million to $386 million,
  • Net income of $20 million to $24 million, up from $10 to $16 million, and
  • Adjusted Net income of $40 million to $44 million, up from $30 million to $36 million.

GreenSky

GreenSky reported record transaction volume in the third quarter of $1.4 billion, up 33% year over year. Revenue increased 29% to $113.9 million year over year. GAAP net income was $45.7 million.

Source: Lend Academy

LendingClub

Net revenues were $184.6 million, up 20% from the prior year period and originations were $2.9 billion, up 18% from last year. Applications also reached their highest levels, up 30% year over year.

In Q3 2018 GAAP Consolidated Net Loss was $22.7 million, or $7.3 million if you exclude $15.5 million of expenses related to outstanding legacy issues.

Source: Lend Academy

Total loans issued by the company now stands at over $40 billion.

Source: Lend Academy
  • Net Revenue in the range of $688 million to $698 million.
  • GAAP Consolidated Net Loss in the range of $129 million to $124 million, reflecting expenses related to outstanding legacy issues through the third quarter partly offset by higher Adjusted EBITDA guidance.
  • Adjusted EBITDA in the range of $89 million to $94 million.

LendingTree Mortgage Offers Report – October 2018 (Lending Tree), Rated: AAA

October’s best mortgage offers for borrowers with the best profiles (the 95th percentile of borrowers) had an average APR of 4.61% for conforming 30-year fixed-rate purchase loans, up from 4.39% in September. The APR on refinance loan offers increased 22 basis points (bps), to 4.62%.

For the average borrower, the purchase APR for conforming 30-year fixed-rate loans offered on LendingTree’s platform was 5.27%, up 18 bps from September. The loan note rate of 5.14% is the highest rate of the year.

Consumers with the highest credit scores (760-plus, representing the 65th percentile of borrowers) received an average APR of 5.12%, versus 5.42% for consumers with scores of 680 to 719. The APR spread of 30 bps between these score ranges is the same as it was in September. For the average purchase loan amount of $233,938, the spread represents over $15,000 in additional costs for borrowers with lower credit scores over 30 years.

For the average borrower, the APR for conforming 30-year fixed-rate refinance loans increased 17 bps from September to 5.26%. The spread between credit score brackets (760-plus and 680 to 719) remained the same as last month, at 24 bps. That amounts to nearly $13,000 in extra costs over the life of the loan for borrowers with lower credit scores, given an average refinance loan of $238,447.

Average proposed purchase down payments fell to $60,361, a decline of about $3,600.

Source: Lending Tree

LendingTree Study Finds Millennials in the South Owe the Most on Their Cars (Benzinga), Rated: A

LendingTree today released its study on where millennials owe the most on their cars.

Key findings

  • Even car loans are bigger in TexasMetros in the Lone Star State dominate the top of the list: McAllenHoustonEl Paso and San Antonio have the highest median auto loan balances for millennials at $23,704$20,925$20,544 and $20,521 respectively.
  • Car capital of the world has the lowest auto debt. Ironically, Motor City has the lowest levels of millennial auto debt on our list with a median debt of $10,841 as well as the lowest average debt of $14,573.
  • Great Lakes area metros shine with the least auto debt. After Detroit, millennials in Rochester, N.Y.Grand RapidsToledo, Ohio, and Cleveland carry the lowest median auto debts, at $12,165$12,429$12,678 and $12,717 respectively.
  • New York and Ogden, UtahThese metros are on opposite ends of the spectrum when it comes to carrying any auto debt at all — New York has the lowest percentage of millennials with auto debt at 41.5 percent while Ogden, Utah has the highest percentage of millennials with auto debt (64.5 percent).

Outside Financial Brings Much-Needed Transparency to Auto Lending (Digital Journal), Rated: A

To prevent the average consumer from being charged more than $1700 in hidden markups on auto loan packages, Outside Financials opens an independent loan marketplace to facilitate transparency in auto lending and auto refinance.

We got a peek at Plaid’s financials, the fintech startup whose valuation has tripled in the past 6 months to as much as $ 3 billion (Business Insider), Rated: AAA

As of October, Plaid told investors it was on track to generate about $70 million over the next 12 months, two people who were briefed on the financials tell Business Insider.

That’s up from the $50 million in revenue the company told investors just one month earlier it was on track to generate, two other people who reviewed Plaid’s financials at the time said.

Fighting financial crime without excluding the underbanked (American Banker), Rated: A

Eugene Ludwig, founder and chief executive officer of IBM’s Promontory Financial Group, said artificial intelligence — already employed to help identify potential anti-money-laundering activity — is getting smarter, and can now be used to identify vulnerable groups of people who have been incorrectly labeled as high risk.

Nerdwallet Wants To Make Comparison Shopping For Financial Services Simple (Forbes), Rated: A

For example, Nerdwallet personal loan product page sorted loans by interest rates.

“All our consumers hated it. They wanted it sorted by monthly payments, which seems odd until you put yourself in their shoes and see what is going on month by month,” Chen said. “We have to meet them where they are. If you start by wagging your finger, that’s a good way to get them to hit the back button on their browser.”

Nerdwallet has three million members and more than 100 million visits each year, Chen said.

InfoSec Governance, Risk, and Compliance Manager (LinkedIn), Rated: B

SoFi is seeking an experienced InfoSec Manager to assist in all aspects of our governance, risk and compliance program.

NRL Mortgage Selects The Riivos Mortgage Lending Application (PR Newswire), Rated: B

Riivos Mortgage, a division of Riivos, Inc., the provider of cloud-based continuous value chain management technology, today announced that NRL Mortgage, an originator serving customers coast to coast, is using the Riivos Mortgage Lending forecasting, planning and reporting application to help them analyze and capitalize on growth opportunities. NRL Mortgage is majority owned by St. Christopher’s Holdings LLC, a privately-owned holding company based in Houston, Texas.

Judge suspends compliance deadline for CFPB payday rule (American Banker), Rated: B

U.S. District Judge Lee Yeakel on Tuesday reversed a previous order from June and granted, in part, the request by acting CFPB Director Mick Mulvaney and two industry trade groups to delay the payday rule’s August 2019 compliance date. They sought a delay to prevent lenders from having to comply with the old rule before the revisions are finalized.

United Kingdom

Zopa, the UK P2P lending company, closes £60M round on path to launching a bank (TechCrunch), Rated: AAA

Obtaining a banking license and then launching an actual new retail bank requires capital. A lot of capital. Enter Zopa, the U.K. peer-to-peer lending company that wants to become a bank, which today is announcing that it has closed £60 million in further funding. Only £16 million is actually new new money, having already disclosed £44 million in August, so this is effectively an extension of that earlier fund-raise.

Landbay reaches £200m lending landmark (P2P Finance News), Rated: AAA

LANDBAY has hailed its quality service and strong broker relationships as it reached the £200m lending milestone this week.

The peer-to-peer property platform, which purely focuses on buy-to-let mortgages (BTL), said it had reached the landmark with a track record of zero defaults.

Atom is intensifying its mortgage push (Business Insider), Rated: AAA

Atom has initially introduced 2- and 5-year buy-to-let remortgage products for landlords that have four to 25 properties. Users will have to pay a 1% loan fee, and the maximum loan term is 25 years.

Source: Business Insider

Older P2P property lenders boast “negligible or zero losses” (P2P Finance News), Rated: A

THE LONGEST running peer-to-peer property platforms are providing investors with high returns and “negligible or zero capital losses,” analysis claims.

Research from P2P analysis firm 4th Way has highlighted 11 lenders who now have a track record of four years or more.

LendInvest seeds newly launched real estate debt fund with £150m (Real Assets), Rated: A

LendInvest has launched a new real estate debt fund with £150m (€171.6m) seed capital from a previous fund.

JAJA SMASHES CROWDFUNDING CAMPAIGN AS IT READIES CREDIT CARD LAUNCH (Fintech Finance), Rated: A

Jaja Finance, the company on a mission to simplify the world of consumer finance, announces that it has already reached its fundraising target of £3m on equity crowdfunding platform Seedrs. The company will use the funds to expand its team and launch its digital credit card, Jaja.

China

Chinese tech CEO predicts ‘exponential’ growth in financial technology (CNBC), Rated: A

Financial technology has reached a tipping point for China’s Ping An Technology and future growth in that area is set to be exponential, according to CEO Ericson Chan.
European Union

N26 Expansion: German Challenger Bank Brings Services to Denmark, Norway, Poland, & Sweden (Crowdfund Insider), Rated: AAA

Germany-based challenger bank N26 is bringing its services to Denmark, Norway, Poland, and Sweden.

“N26 passes on these cost benefits to its customers. N26 partners with the most innovative fintech and traditional financial companies to offer its customers best-in-class products such as TransferWise (foreign exchange), Raisin (savings), Clark and Allianz (insurance), auxmoney (credit) and others.”

International

Banks complete first syndicated loan on blockchain (BBVA), Rated: AAA

BBVA and Red Electrica Corporation have become the first businesses in the world to deliver a syndicated loan using blockchain. The €150m deal, granted by BBVABNP Paribas and MUFG, was reached in record speed using BBVA’s proprietary platform- which is powered by distributed ledger technology.

Seven Businesses That Promise Digital Can Be Ethical (Forbes), Rated: A

In financial services, an industry where trust is a particular issue, Monzo was founded on the idea that there should be an alternative to traditional banking practices. Monzo argues that banks should get rid of punitive fees, do more to ensure customers know exactly what they can expect to pay for an overdraft, and provide greater control over how people spend their money.

Start-up Wagestream has just raised £4.5m for a business it promises will kill off the payday loan sector and the ‘payday poverty cycle’.

Banks should ally with fintechs in battle against payday lenders (PaymentsSource), Rated: A

Bankers who regard payment technology companies such as fintechs as a problem may be missing opportunities.

Alternatives to payday lending are an example. These fintechs provide credit for nonprime customers, such as a recently divorced woman faced with a slew of new expenses. It is pricey credit, but cheaper than payday lenders. Unlike payday lenders, these companies provide credit reporting and reduced rates as a client pays off the loan. Eventually, a successful client qualifies for bank lending and leaves to take advantage of bank interest rates.

Source: PaymentsSource

Report: AI in Fintech (Diplomatic Courier), Rated: A

FinTech has revolutionized the way that banks and insurance companies function. Rather than prioritizing themselves and their services as in the past, banks must emphasize client needs in today’s new technological era. This focus on personalized financial services manifests itself in FinTech—a financial infrastructure for consumer enablement. As FinTech applies data and technology to financial services in an effort to address industry challenges, artificial intelligence is essential to FinTech’s existence and usage.

To read the full report click here for the digital edition.

Crypto Power Player PwC is Assisting on Cred Crypto Lending Platform’s New Stablecoin Project (Bitcoin Exchange Guide), Rated: A

A division of the worldwide accounting and consulting firm PwCis currently working with a new stablecoin project that aims at developing a U.S. Dollar-based coin. The Hong Kong division will be exploring the best practices for issuing new stablecoinsworking with the Loopring Foundation.

Research reveals three tech strategies that will benefit small and midsized financial institutions (Finastra), Rated: B

A new piece of research, sponsored by Finastraand executed by Mercator Advisory Group, shows that small and midsized financial institutions can derive significant benefits to operational efficiency by pursuing three distinct cost-saving strategies: vendor consolidation, cloud delivery, and artificial intelligence. Based on in-depth interviews with C-level representatives of community banks and credit unions with asset size between $200 million and $5 billion, the research gauges attitudes toward and levels of adoption for each strategy.

  • Consolidation of vendors ultimately eliminates the need to maintain and manage multiple systems, and can improve operational efficiency by 20-30%.i
  • Cloud delivery brings numerous benefits including the ability to easily scale system capacity to meet demand.
  • Artificial intelligence (AI), which is the least adopted of the three strategies to date, promises to make processes smarter, faster and more personalized to the consumer. However, in order to reap these rewards, banks must prioritize their vendor consolidation and cloud delivery road maps.

The white paper, titled Landmark Decisioning: Using Vendor Consolidation, Cloud Computing, and Artificial Intelligence to Improve Operational Efficiency, is available here.

Persona and FintruX announce renewed control over personal data (Leaprate), Rated: B

Persona, the blockchain-based solution for identity management,has just announced its partnership with FintruX, the P2P lending ecosystem, to streamline the onboarding process for customers while ensuring they remain in full control over their personal details.

Persona is the first identity management solution developing its own blockchain, as opposed to other projects being developed as ERC20 tokens over Ethereum.

Asia

Funding Societies | Modalku Included in Global List of 100 Leading Fintech Innovators (Markets Insider), Rated: AAA

‘Look at where debt has gone’: MAS chief warns of 3 shifts in global financial risks (Channel NewsAsia), Rated: A

While the fault lines of the last global financial crisis have been mostly addressed, risks remain and have shifted in three ways over the past 10 years, said the Monetary Authority of Singapore’s (MAS) managing director Ravi Menon on Wednesday (Nov 7).

Meanwhile, the extension of credit has shifted from banks to non-banks – one of the areas that have not been given enough attention, said Mr Menon.

Canada

Loop Partners With Equifax to Launch Canada’s First Free Business and Consumer Credit Education Platform (Newswire), Rated: AAA

Equifax Canada and Loop today announced the launch of a credit health and monitoring platform for businesses. Launched at the intersection of Small Business Month and Financial Literacy Month, the new platform empowers Canadian small business owners and entrepreneurs alike, to improve their financial and credit health through easy-to-read credit scores, reports and resources.

Crypto Loans On The Rise – BTC Used As Collateral For Canadian Dollars (Crypto Disrupt), Rated: A

It is now possible to attain a loan for Canadian Dollars (CAD) using bitcoin as collateral. The ability to use crypto as a form of collateral for fiat is a sign of further legitimacy for the sector. More providers are expected to follow suit and offer crypto loans, with a wider range of fiat currencies for a larger range of acceptable cryptocurrencies used as collateral.

Authors:

George Popescu
Allen Taylor

Thursday June 7 2018, Daily News Digest

Lending Tree Purchase APR by Month

News Comments Today’s main news: Circle seeks a banking license. Revolut has 2M users. Ping An looks beyond insurance. TransferWise partners with first big bank. Today’s main analysis: How microfinance is navigating the fintech revolution in Africa. Today’s thought-provoking articles: Where retail credit, charge cards are used the most. The case for a VRP strategy. A different type of Know Your […]

Lending Tree Purchase APR by Month

News Comments

United States

United Kingdom

International

Other

News Summary

United States

Crypto Unicorn Circle Aims to Expand Into Regulated Banking (Bloomberg) Rated: A

Circle Internet Financial Ltd., one of the world’s most valuablecryptocurrency platforms, is looking to make a big leap into the highly regulated realm of U.S. banks and brokerages.

The venture, partly backed by Goldman Sachs Group Inc., plans to seek a federal banking license to provide more services to customers. It also intends to pursue registration as a brokerage and trading venue with the Securities and Exchange Commission, so it can help investors buy and sell tokens deemed to be securities.

LendingTree Releases Monthly Mortgage Offer Report for May (PR Newswire) Rated: AAA

LendingTree today released its monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network. The purpose of the report is to empower consumers by providing additional information on how their credit profile affects their loan prospects.

Source: PRNewsfoto/LendingTree
  • May’s best rate offers for borrowers with the best credit profiles had an average APR of 4.35% for conforming 30-year fixed purchase loans, up from 4.26% in April.
  • Refinance loan offers for borrowers with the best profiles were up 12 bps to 4.35%.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were up 10 bps to 5.02%. The loan note rate of 4.91% was also up 10 bps.

CompareCards Study Reveals Which Places Use the Most Retail Credit and Charge Cards (Benzinga) Rated: AAA

CompareCards by LendingTree today released the findings of its study on the places that use the most retail credit and charge cards. The study found that some metro areas are home to heavy users of retail cards while other locations have a population who use retail cards more sparingly.

Nationally, 61.3 percent of credit card owners have at least one retail card. Of those who have at least one retail card, 30.4 percent carry a balance on a retail card, representing 11.4 percent of outstanding balances. The average balance on a retail card in the U.S. is $2,699.

Highlights from the report:

  • Residents of McAllen, Texas are by far the highest users of retail credit and charge cards. The metro earned a final score of 87.2 and ranked first in these categories:
    • The number of people who have retail cards (72%)
    • The number of retail card owners who carry a balance on their retail cards (45%)
    • And the percentage of credit card debt carried on a retail card (17%)
  • People in Charleston, S.C. have this retail card claim to fame: They carry the highest balances on their retail cards among all 100 metros, with an average balance of $4,026and a median balance of $1,746. Meanwhile, Albany, N.Y. had the lowest average balance ($2,420).
  • Honolulu has the lowest retail card usage, with a final score of 9.4. Although it didn’t rank last in any individual category, it ranked extremely low in all.
Source: Benzinga and CompareCards

AQR MAKES THE CASE FOR A VRP STRATEGY (all About Alpha) Rated: AAA

AQR Capital Management, the Greenwich, CT-based global investment firm, has posted a new discussion of thevolatility risk premium and of the advantages of strategies based thereon.

In principle the premium would disappear if markets efficiently estimated the probability of significant losses. But it remains, because investors are risk averse and tend to overestimate the probability of substantial losses.

QR models an investor who was hypothetically long the S&P 500 from 1996 to 2016, while hedging his position with a continuously rolled one-month 5% out-of-the-money put. The hedged strategy will in fact lessen portfolio volatility as measured against simply being long in the S&P without the hedge. Vol falls from 16.1% in the latter case to 14.7% in the former.

But, as noted, this risk aversion comes at a hefty cost. Average portfolio returns decline from 5.1% to just 1.8%.

Unchained Capital Raises $ 3M To Lend Fiat To HODLers (Crunchbase News) Rated: A

Austin-based crypto-finance startup Unchained Capital has raised nearly $3 million in seed funding. Unchained’s first product is a crypto asset-backed loan, which is like borrowing against one’s home—except the company lends against digital assets such as bitcoin and ethereum.

The round includes $2.4 million in new capital and $595,000 of SAFE notes converting.

Court upholds sanctions against lawyers, KC firm in payday case (Kansas City Business Journal) Rated: A

A federal appeals court upheld $150,000 in sanctions levied against Stephen Sixand Austin Moore of Stueve Siegel Hanson LLP in Kansas City, Darren Kaplan of the Darren Kaplan Law Firm PC in New York, and their respective law firms.

The plaintiff filed a class-action lawsuit that wasn’t against the online payday lending companies themselves, but against four nonlender financial institutions — Generations Federal Credit Union, BMO Harris Bank, Four Oaks Bank & Trust Co. and Bay Cities Bank — that processed the debit transactions and were paid fees.

LoanNow Reviews: Beware Personal Loan Offers With Sky-High APRs (Student Loan Hero) Rated: A

That’s where online lender LoanNow comes in. LoanNow reviews your application even if you don’t have strong credit.

Here are the ranges for APRs and repayment terms in the six states that LoanNow operates in as of June 6, 2018. Double-check the LoanNow website for the latest rates.

State Loan amount APR Repayment term
Alabama $2,500 – $5,000 29.00% – 229.00% 12 – 48 months
California $2,500 – $5,000 29.00% – 229.00% 12 – 48 months
Georgia $3,100 – $5,000 29.00% – 59.00% 12 – 48 months
Missouri $1,000 – $2,500 29.00% – 299.00% 9 – 24 months
New Mexico $2,600 – $5,000 29.00% – 229.00% 12 – 48 months
Utah $1,000 – $2,500 29.00% – 299.00% 9 – 24 months

Startup Aims to Disrupt High-Interest Payday Lending With Blockchain (Thirty K) Rated: A

Meje Tuyo thinks the payday loan industry is ripe for disruption and he wants to do it using blockchain technology. Specifically, Tuyo wants to deliver more equitable access to loans through Owo, a startup venture set to debut this fall. The company’s name means “money” in the West African language of Yoruba.

Tuyo, a native of Nigeria, is looking to, at first, address the challenges of African Americans, a population that relies more on payday loans than other groups. Another study from the Pew Charitable Trusts from 2012 found that 12 percent of African-Americans had taken out payday loans, compared with 4 percent of whites and 6 percent of Hispanics.

The company plans to launch an app called Pazimawhich will allow consumers to request loans that will be automatically repaid when they receive their paychecks.

Renovate America Named “Esoteric ABS Issuer of the Year” (PR Newswire) Rated: B

Renovate America, a leading provider of home improvement financing, has been recognized as “Esoteric ABS Issuer of the Year” in the 2018 U.S. Securitization Awards announced by GlobalCapitalmagazine. The award recognizes Renovate America’s position as a leader in the esoteric ABS market, which includes not only PACE, but also equipment leasing, containers, marketplace lending, whole business, solar, and cell tower deals, to name a handful.

Sallie Krawcheck thought she hated banking (Business Insider) Rated: A

  • Sallie Krawcheck spent years as a Wall Street exec, commonly called “the most powerful woman on Wall Street.”
  • But when she got her first investment banking job in her early 20s, she hated it, and even went back to business school to transition into her dream jobs in media.
  • It wasn’t until she asked herself what she loved about media that she could find in banking that she found a place in equity research, which launched her into a series of executive roles on Wall Street.

David Mitchell Joins White Oak Business Capital as Senior Vice President and Senior Business Development Officer (Globe Newswire) Rated: B

White Oak Business Capital, Inc. (“WOBC” or White Oak), an affiliate of White Oak Global Advisors, LLC, today announced the appointment of David Mitchell to the role of Senior Vice President and Senior Business Development Officer, responsible for expanding business in the Southeast and Mid-Atlantic markets.

United Kingdom

UK fintech start-up Revolut reaches 2 million users (The Telegraph) Rated: AAA

London fintech start-up Revolut has announced that it has grown to 2m users following its launch in 2013.

Revolut said that it has now signed up 2m customers in Europe ahead of plans to launch in the US this year. Customers have also made over 100m transactions, the company said, with a monthly transaction volume of $2bn (£1.4bn).

Going tribal: A different type of ‘know your customer’ (Mortgage Finance Gazette) Rated: AAA

The fintech industry is coming of age. Global investments in the sector have grown from $20 billion in 2014 to $39 billion in 2017, according to Fintech Global. Fintechs like Transferwise, Nutmeg, Revolut, Starling Bank and Funding Circle in the UK have grown rapidly over the last five years. A large reason for this success is attributable to the way fintechs are able to develop deep relationships with their customers who rally around them in an almost tribe-like manner. Successful firms manage to convert isolated customers into communities and finally highly engaged ‘tribes’.

Fintechs that have successfully demonstrated that they can generate a sense of community within their customer base share the following six characteristics.

  1. Transparency-or at least the perception of it – is a great way to build trust and attract younger customers. Transferwise publishes its rate card in full on its website for instance.
  2. Reachability-In general, fintechs are much more in tune with what their customers want to be developed next. Revolut got this formula right from the start – this has helped them to grow to a $1.7 billion company in just 33 months.
  3. A sense of purpose-A large part of fintechs’ success in tribe-building is their ability to generate the sense of a greater purpose. Fintechs are typically focussed on achieving a specific goal which on its own, is mundane and something on the lines of – ‘help you transfer money cheaply’. However, this mundane goal is transformed into a grandiose vision when put into the intended context— ‘transfer money cheaply and beat the big banks at their game’. An origin story is the final touch required to transform this vision into a sense of purpose for the community – ‘transfer money cheaply, beat big banks and be a part of something meaningful’.

The growing popularity of bridging loans for investors (Property Week) Rated: A

This trend has only been exacerbated by Brexit as the ongoing uncertainty around Britain’s exit from the EU leaves borrowers, banks and new lenders without a clear picture of the next few years.

In light of this, bridging loans are increasingly popular as a short-term solution for investors and a way for high-net-worth individuals to see a return on capital.

Although the recent rise of bridging loans is associated with specialist lenders, particularly in the commercial space offering non-FCA regulated loans, the product originated as an option for property buyers to bridge a gap between exchanging contracts and completion of a sale where you needed to purchase a property in the interim but did not have the capital.

China

Chinese Giant Ping An Looks Beyond Insurance To A Fintech Future (Forbes) Rated: AAA

Global 2000 list — look beyond the stodgy insurance business and into the realm of high technology, whose tentacles reach into every aspect of commerce in China and eventually show up in the mobile handsets of Chinese consumers.

European Union

Klarna at Money 20/20: Banks are obsessed with themselves (Bobs Guide) Rated: A

In a presentation entitled ‘Banking on the CX factor’, Klarna CEO Sebastian Siemiatkowski spoke to a packed crowd under The Big Top at Money 20/20 EU, Amsterdam, today, taking the opportunity to open fire on the banks.

The audience heard insight from Klarna on customer experience, including the fact that, according to the Happiness Index, consumers are more stressed and unhappy than ever before.

Auto1 Joins Deutsche Bank, Allianz in Fintech Car Financing Push (Bloomberg) Rated: A

Auto1 Group GmbH is partnering with Deutsche Bank AG and Allianz SE as the German startup expands into fintech to ease financing for customers buying its used cars.

The three partners together own more than 50 percent in a new company called Auto1 Fintech, that will offer refinancing loans and insurance products to car dealerships buying SoftBank Group Corp.-backed Auto1’s vehicles, co-Chief Executive Officer Hakan Koc said Wednesday in an interview.

International

TransferWise just partnered with its first big bank (Business Insider) Rated: AAA

UK-based cross-border money transfer company TransferWise has announced a partnership with France’s second-largest bank, BPCE Groupe, that will take effect at the beginning of 2019. Under the partnership, TransferWise will provide international money transfer services for BPCE Groupe’s customers, enabling them to send money in different currencies with TransferWise’s low standard fees.

Source: Business Insider

StartUp Nation Ventures Announces the Israel-Florida Innovation Alliance’s First Call for Proposals (PR Newswire) Rated: A

StartUp Nation Ventures (“SUNV”) in partnership with the Israel Innovation Authority (“IIA”) is proud to announce the initial Call for Proposals through the Israel-Florida Innovation Alliance (“Innovation Alliance”).

The Innovation Alliance was created to support Israeli innovation companies in the discovery and selection of Florida as their destination to establish U.S. headquarters—a gateway for expansion into the U.S., and Latin America markets.

The joint collaboration between SUNV and the IIA establishes a scalable platform to support Israeli companies that have proven the feasibility of their technologies and have a minimal viable product or working prototypes for the U.S and Latin America markets in the following areas:

  • Financial Technologies (FinTech), Blockchain, Cybersecurity, Augmented Reality/Virtual Reality (AR/VR) Entertainment, Cryptocurrency, Initial Coin Offerings (ICOs); and
  • Tech Innovation related to smart contracts, supply chain, asset verification, certification, identity, health and financial transactions, digital and mobile payments; capital markets & investing, banking & corporate finance, financial platforms, crowdfunding & peer-to-peer lending, and personal financial management.

How Fintech Is Disrupting the Personal Loans Market (The Market Mogul) Rated: A

Lending has experienced one of the biggest changes in the traditional banking marketplace with financial technology startups, or simply, fintechs, introducing disruptive products to consumers. Peer-to-peer lending platforms have been at the forefront in this space, but recent developments suggest more could be about to unfold over the coming years.

Startup lending companies have managed to gain a substantial chunk of the market over the last few years. According to credit analysts, this growth has been driven by personal loans. In a report published by TransUnion late last year, it was established that fintechs continue to disrupt the personal loans market at an alarming rate. In the report titled Fact versus Fiction, the TransUnion study found that fintechs have grown from a mere 1% of personal loan originations in 2010 to one-third of the entire personal loan market in 2017.

The 32% market share for fintechs in the personal loans market was more than the 29% for banks, 24% for credit unions, and 15% for traditional finance. This clearly shows that fintechs are on the path to dominate the entire lending market if the momentum can be maintained.

Here’s why robo-advisors won’t replace human financial advisors (CNBC) Rated: A

Robo-advisors give retail investors access to automated investment strategies, creating portfolios and coming up with an asset allocation that’s based on client data points, including time horizon and risk tolerance.

As convenient as it may be, this technology doesn’t make human financial advisors obsolete, said Joe Duran, founder and CEO of United Capital.

That’s because robo-advisors fail to account for the complexity of financial planning, he says.

Cambridge Centre for Alternative Finance Launches Global Research (Crowdfund insider) Rated: B

Having now tracked alternative finance for five years, and from this relatively short perspective, the Centre has noted an emerging industry that has progressed quickly. Where once there were only handful of early adopters and innovators in a given country, they now see an “altfin” landscape that is growing rapidly, with an exponential number of new platforms driving competition and introducing new products.

In many regions (the EU, UK, USA) the Centre is also seeing their first cases of consolidation, but with continued diversification of products and services to customers.

Africa

MICROFINANCE PAPER WRAP-UP: “How Microfinance is Navigating the Fintech Revolution in Africa” (MicroCapital) Rated: AAA

We are also looking to provide insight for microfinance stakeholders into how MFIs can leverage Fintech solutions to remain competitive in the rapidly changing financial landscape in Africa. While it is still too early to present a definitive response to the opportunities and challenges of Fintech, we are
convinced that MFIs will need to adapt to succeed in this increasingly dynamic microfinancing environment in Africa.

Source: Triple Jump

Fintech is considered more as an enabler than as a disruptor.

  • The MFIs surveyed perceived Fintech more as an opportunity than as a threat to their business (see graph 3: 88% consider it as a (very) great opportunity, while only 35% see a moderate to high threat).
Source: Triple Jump
  • Few MFIs foresee increasing competition in the future from Fintech-based (B2C) companies. This is explained by the fact that most digital lenders enter relatively easy markets with a target audience that is tech savvy, literate and more urban and where data and technical infrastructure are already available. But to access more informal and rural client segments effectively, these Fintech players face a number of challenges, such as client acquisition, initial high write-offs and limited profitability.

Read the paper in full here.

Asia

The Trillion-Dollar Investment Trend You’ve Never Heard Of And How You Can Be A Part Of It (Indonesia Expat) Rated: AAA

You can support Indonesian micro businesses and help them grow and thrive by investing in their loans. A leading, Indonesia-based peer-to-peer lending platform lets you do just that in just a few simple steps. Mekar (PT Mekar Investama Sampoerna) connects you, the investors (also called ‘funders’ in Mekar) from all over the world, with micro businesses in many provinces in Indonesia that are in need of funding.

About 99% of the micro businesses that are seeking loans in Mekar are run by women. Loans in Mekar range from around Rp 2 million (US$ 140) to Rp 8 million. For the last couple of years 99.5% of these borrowers have repaid on time.

Source: Indonesia Expat

Authors:

George Popescu
Allen Taylor

Thursday March 22 2018, Daily News Digest

Thursday March 22 2018, Daily News Digest

News Comments Today’s main news: LendingTree launches free credit monitoring. Paytm gets into P2P lending. EquityMultiple stops promoting Reg D 506c offerings. Trusted Quid customer info stolen in data breach. PPDai grows revenue as stock rises. Today’s main analysis: Why China Rapid Finance’s ownership structure is important. Today’s thought-provoking articles: Are Amazon, Costco, and Target inching into wealth management? Open banking […]

Thursday March 22 2018, Daily News Digest

News Comments

United States

United Kingdom

China

Other

News Summary

United States

LendingTree Launches Free Credit Monitoring Service (LendingTree), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today announced the launch of a free credit monitoring service within the My LendingTree platform. In partnership with TransUnion, LendingTree monitors users’ credit profiles daily and sends alerts of any changes or potential suspicious activity within 30 minutes of the credit report being updated.

Real Estate Investment Platform EquityMultiple Gives up on Reg D 506c (Crowdfund Insider), Rated: AAA

No longer will EquityMultiple publicly promote its real estate offerings online and elsewhere. Previously, EquityMultiple has leveraged Reg D 506c – a new securities exemption created by the JOBS Act of 2012. This rule allowed issuers and platforms to promote offerings on the internet – via social media and elsewhere  – in contrast to old Reg D (506b) that was barred from any advertising. And why on earth would EquityMultiple not want to promote unique and compelling investment opportunities? Because of the broken nature regarding the general solicitation rule.

Amazon in wealth management? What about Costco or Target? (Financial Planning), Rated: AAA

With Amazon inching closer to financial services, industry observers say its a worthy exercise to think about other potential retail competitors.

“People may roll their eyes in the land of wealth management and financial services, but it’s no longer a place for just banks. They don’t own it anymore,” said Doug Fritz, CEO and founder of F2 Strategy, a technology and marketing consulting firm to the wealth management industry based in the San Francisco Bay area.

Costco seems like the most obvious candidate to get into the wealth management space, said Fritz.

Incumbents such as Charles Schwab have already boxed in robos with products and are not being shy about advertising them, he adds.

5 Savvy Ways To Invest $ 10,000 In 2018 (Forbes), Rated: A

Online Real Estate Investing

Poll of SMBs Reveal Plans to Make Tech Investments Amid Strong Sales Growth (WWD), Rated: A

In a recent poll of small- to medium-sized businesses, financial and technology firm Kabbage Inc. found high expectations for sales growth this year as well as plans to make investments aimed at automation.

Kabbage, which offers lines of credit of up to $250,000 and cites retail as its top vertical, said more than 67 percent of the brick-and-mortar retailers polled expect revenue growth of over 20 percent this year. More than 73 percent of the online retailer respondents expect the same. The survey was based on responses from 800 businesses.

Regarding automation technology, nearly 44 percent of physical store retailers have plans to make investments in this area compared with 60 percent of online retailers. With cyber security and similar fraud prevention technologies, about 44 percent of both online and physical store retailers have plans to make investments in these solutions.

 

 

 

Hundreds of Start-Ups Tell Investors: Diversify, or Keep Your Money (New York Times), Rated: A

The American venture capital industry, which invested $84 billion in more than 8,000 companies last year, has long faced little to no impetus to alter its demographics. Venture firms are usually small private companies made up of former tech executives or financial types, who are mostly male and white. And because venture firms operate with long-term horizons — their funds generally invest over a 10-year period — the industry’s pace of change is often glacial.

In 2016, 11 percent of venture capital firms’ investment partners were women, according to a survey by the National Venture Capital Association and Deloitte. The survey found no black investment partners at venture firms, while 2 percent of investment partners were Latino.

Buyers acquire taste for deposit-rich banks (American Banker), Rated: A

Total loans at banks with less than $10 billion in assets rose by nearly 17% between 2012 and 2017, surpassing the roughly 5% increase in deposits over that time, according to data from the Federal Deposit Insurance Corp.

 

NYDFS sends survey request to online lenders (National Law Review), Rated: B

The New York Department of Financial Services has sent a letter directed to businesses that the DFS “understands…may be involved in online lending in the State of New York” and that asks recipients to complete a “New York Marketplace Lending Survey” that they can access online.

The letter states that the DFS is conducting the survey to gather information for a public report that it is required to issue by July 1, 2018 and which must include information about online lenders operating in New York and their business practices, including lending practices, interest rates and costs charged, and consumer complaints and investigations about the industry.

United Kingdom

Open Banking prompts UK fintechs to reassess collaboration partners (P2P Finance News), Rated: AAA

A report from accountancy firm EY, released on Thursday, found that 59 per cent of UK fintech firms see Open Banking as an opportunity to review their collaboration strategies.

The survey of 31 UK fintech firms also found that 74 per cent of respondents believe that new competitors such as tech firms will become increasingly important over time.

The new data rules, which mandate high street banks to share anonymised customer data with approved third parties, came into effect in January 2018. Peer-to-peer lenders such as Zopa and Lending Works have already announced their plans to capitalise on the new initiative.

94 per cent of fintech firms said they were focused on enhancing their current products and services and 81 per cent said they are planning to use Open Banking to build new services.

Early Returns From Open Banking Show a Mixed Picture (Lend Academy), Rated: A

Banks have not really stepped into the new world until recently as HSBC has stated they will be set to go live with a product by early May, RaboBank is creating a mobile ecosystem and RBS has explained they are working on solutions which includes a stand alone digital bank.

Digital banks Monzo and Starling Bank have already established themselves as early leaders in the market with their open APIs. Both have created financial marketplaces to allow for easy integration and access to different banking services.

Payday lender Trusted Quid admits 66,000 customers details were stolen in data breach (The Sun), Rated: AAA

Details of 66,000 customers including phone numbers, dates of birth, addresses, loan details, employment status and bank account information, were all taken from the website.

In a statement the company said: “There has been a theft of data from unauthorised access to the Trusted Quid website.”

“The incident relates to data directly entered by people applying for a loan only on the Trusted Quid website between 1 July 2016 and 17 February 2018.”

Trusted Quid say they have made three previous attempts to contact customers affected by the data breach.

 

Feature: Is London cooling? (Mortgage Strategy), Rated: A

Research from online estate agent HouseSimple in January showed only 387 properties for sale in zones 1–2 below the magic £300,000 level, rising to just 1,235 in zone 3. For homes valued at £300,001–£500,000, there were just 7,687 in zones 1-3 that were eligible for a stamp duty cut.

BUSINESS SHOWCASE : LOANBIT (Irish Tech News), Rated: A

LoanBit is a multi-currency platform that supports everything from fiat currencies to the latest cryptocurrencies. It allows you to send money in an encrypted format and secure it with state-of-the art security measures.

LoanBit offers an armor of a protection for the lenders. It safeguards the interests of the lenders in the community by covering up to 75% of the loan.

With LoanBit you can:

  • Keep money in a multi-currency wallet,
  • Trade on the integrated exchange,
  • Invest money in cryptocurrencies, and
  • Get a loan in the currency of your choice

ISAs 2018: Innovative Finance Isa can offer rates from 5 to 10 per cent (Express), Rated: A

The Innovative Finance Isa, or Ifisa, was announced by the Government in April 2016, giving ordinary savers the opportunity to invest in growing British businesses free of tax through the growing peer-to-peer (P2P) lending market, sometimes called crowdlending.

Landbay targets 3.54 per cent, Zopa aims for 4.6 per cent a year, Ratesetter offers between3and 6 per cent and Money&Co an average of 8.6 per cent.At the riskier end of the scale the RebuildingSociety is aiming for 9.7 per cent.
China

Is Ping An China’s Most Valuable Insurer or a Tech-Investing Fad? (The Wall Street Journal), Rated: AAA

The $100 billion question for the world’s second-largest insurer: is it an insurance firm or is it a technology firm?

Shares of China’s Ping An Insurance—the biggest insurer by market value after Warren Buffett’s Berkshire Hathaway—have more than doubled in the past year, far outpacing peers. The increase in its market capitalization—of more than $100 billion—is partly due to the fast growth of its life- and health-insurance business. The value of new business last year grew 33% from 2016.

Shares Rise as PPDai Reports Revenue Growth, Stock Buyback (Capital Watch), Rated: AAA

PPDai Group Inc., an online peer-to-peer lending platform in China, reported today that its operating revenues for the fourth quarter increased more than 85 percent compared with a year earlier.

The Shanghai-based company, which completed its initial public offering in November, said during the quarter, it had a net loss attributable to ordinary shareholders of $200.4 million, or 89 cents per American depositary share. That was in contrast to income of $2.8 million a year earlier. Revenue for the three months ended Dec. 31 was $140.2 million, up from $75.7 million in the year-earlier period.

Why China Rapid Finance Limited’s (NYSE:XRF) Ownership Structure Is Important (Simply Wall St News), Rated: AAA

I am going to take a deep dive into China Rapid Finance Limited’s (NYSE:XRF) most recent ownership structure, not a frequent subject of discussion among individual investors. When it comes to ownership structure of a company, the impact has been observed in both the long-and short-term performance of shares. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Therefore, I will take a look at XRF’s shareholders in more detail.

Source Simple Wall Strett

Institutional Ownership

In XRF’s case, institutional ownership stands at 18.79%, significant enough to cause considerable price moves in the case of large institutional transactions, especially when there is a low level of public shares available on the market to trade.

Insider Ownership

Another important group of shareholders are company insiders. Insider ownership has to do more with how the company is managed and less to do with the direct impact of the magnitude of shares trading on the market.

General Public Ownership

The general public holds a substantial 42.76% stake in XRF, making it a highly popular stock among retail investors.

Private Equity Ownership

Private equity firms hold a 16.12% stake in XRF.

Private Company Ownership

Potential investors in XRF should also look at another important group of investors: private companies, with a stake of 5.44%, who are primarily invested because of strategic and capital gain interests.

China toughens supervision on third party payment (xinhuane), Rated: B

Agricultural Bank of China announced in a recent notice that it would cut off the payment channel for Internet finance businesses such as peer-to-peer lending, the Xinhua-run Economic Information Daily reported.

The move followed a series of penalties levied at banks and online payment companies, which analysts said were aimed at curbing risks arising from direct clearance agreements between them.

European Union

 

Danish online lender basisbank to implement Fico Blaze Advisor (Finextra), Rated: B

With FICO Blaze Advisor decision rules management system, Basisbank risk analysts will be able to quickly make changes to credit strategies for unsecured consumer loans and point-of-sale financing in order to increase profitability and reduce the risk of loans going unpaid. Basisbank receives more than 75 percent of its credit applications from mobile devices.

International

How digital banks are raising the bar for customer experience (Tearsheet), Rated: AAA

Challenger bank N26 raised $160 million in Series C funding this week to fuel its expansion to the U.S., and other markets, later this year. Revolut, another U.K. challenger, has been planning a U.S. launch this year too and Monzo is rumored to follow.

Digital-only challenger banks have changed customer expectations, including customer service and how customers want to use financial products. Big banks are taking notice, with companies developing sub-brands to hook younger, digital-savvy customers or others — the most recent of which is rumored to be the Royal Bank of Scotland.

For Monzo, which just crossed 500,000 current account holders, the absence of physical branches doesn’t mean a lack of interaction with customers. Monzo’s approach is to release early versions of products to a group of customers and get customer feedback from within the app and through an online forum. It’s an approach that gives customers a sense of ownership and excitement about the brand. For Monzo’s marketplace beta, it sought out feedback from 3,000 customers.

India

Digital payments player paytm wants slice of P2P lending (The Economic Times), Rated:AAA

Paytm, the country’s largest digital payments company, is trying to enter the lending space and is seeking a licence from RBI to become a peer-to-peer lending platform.

According to documents sourced by ET from the Ministry of Corporate Affairs, the company moved a board resolution on February 7 saying it intends to “carry on the business of non-banking financial company — peer-to-peer”.

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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United States

United Kingdom

China

European Union

International

Australia/New Zealand

India

Canada

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United States

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

Tuesday November 21 2017, Daily News Digest

Purchase APR LendingTree

News Comments Today’s main news: Experian buys, integrates Clarity Services. Think Finance files for bankruptcy. PayPal offers robo-investing. Assetz Capital achieves 1.5M GBP funding through Seedrs. Elevate launches industry research repository. Nav Athwal steps down as CEO of RealtyShares. Ping An Insurance prepares for Lufax IPO. TransferWise doubles revenue. Today’s main analysis: LendingTree releases monthly mortgage offer report. Today’s thought-provoking articles: The […]

Purchase APR LendingTree

News Comments

United States

United Kingdom

China

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MENA

News Summary

United States

Integration of Clarity Services Inc by Experian (Experian Email), Rated: A

Dear Clarity Services Inc Supplier:

As a supplier to Clarity Services Inc, we are writing to formally notify you that as of October 6, 2017, Clarity Services Inc has been purchased by Experian Holdings, Inc.

Effective January 1, 2018, purchases and invoice payments will be processed by Experian’s centralized Procurement and Accounting departments.

Source: Experian

Think Finance Files for Chapter 11 (U.S. Bankruptcy Court), Rated: AAA

Read the court brief here.

PayPal in robo-investing venture (The Australian), Rated: AAA

The payments company was connecting its website and smartphone apps with those of Acorns Grow, a five-year-old automated savings and investment service, the two companies said on Monday.

PayPal users would be able to use their accounts to make contributions to Acorns and would be able to monitor and manage their Acorns investments from the PayPal app, said Joanna Lambert, the company’s vice-president of consumer financial services.

PayPal is rolling out the Acorns offerings in phases, with the first batch of users getting access on Monday and all US users by early 2018.

Elevate’s Center for the New Middle Class Launches Industry Research Repository (BusinessWire), Rated: AAA

The Center for the New Middle Class, a research-focused body developed by Elevate to engage and educate the public about the growing needs of individuals who do not have access to traditional credit options, today announced it has launched an industry research repository for researchers, reporters, policy makers and the general public. Known as the Resource Database, it is a curated collection of the best research on non-prime Americans and their challenges, attitudes, and needs.

In addition to containing external research and editorial content from sources such as Pew, the National Bureau of Economic Research and “The Atlantic,” the database will house research and commentary from the Center for the New Middle Class regarding economic conditions that affect America’s New Middle Class.

By visiting the database here users can search for entries, filter the results, and see the full bibliographic reference of information provided.

The Cleveland Fed Retracts Their Report on “P2P Lending” (Lend Academy), Rated: AAA

The shame of all this is that all the sensational headlines have already been written and confirmed in many people’s minds the supposed shady nature of our industry. It would have been far better for everyone if the authors of this report had done their homework and produced a thoroughly researched report in the first place.

As Todd Baker pointed out, “we really should know which online lenders are adding to consumer financial health and which ones are detracting from it.”

Why The Cleveland Fed Pulled Their Online Lending Study (PYMNTS), Rated: AAA

“[These borrowers] are not underbanked, they’re sort of overbanked,” observed Yuliya Demyanyk, a Cleveland Fed economist and co-author of the report. “Defaults on [marketplace] loans have been increasing at an alarming rate, resembling pre-2007 crisis increases in sub-prime mortgage defaults, where loans of each vintage perform worse than those of prior origination years.”

The authors of the Nov. 9 report “have received several questions about the composition of the underlying data set they used in their analysis,” the Cleveland Fed said on its website, and are “revising their paper to further clarify the data sample they used” and will post the new version as soon as it’s ready.

So, what happened?

One theory is that they may have stretched the definition of online lending so far as to make an accurate and credible apples-to-apples comparison implausible.

Karen Webster spoke with Lending Club’s head of government relations, Richard Neiman, to get a better sense of the source of discrepancy, since even Googling the definition of marketplace loan, Webster commented, might have saved the Cleveland Fed economists a lot of grief.

“The industry is so big now,” Neiman said, “that it is not easy for policymakers to fully understand the divergences between different platforms, the different products, the different modeling and the differences in levels of transparency that are now defined as online lending.”

LendingTree Releases Monthly Mortgage Offer Report for October (Business Insider), Rated: AAA

LendingTree, the nation’s leading online loan marketplace, today released its first monthly Mortgage Offers Report which analyzes data from actual loan terms offered to borrowers on LendingTree.com by lenders on LendingTree’s network.

  • October’s best loan offers for borrowers with the best profiles had an average APR of 3.75% for purchase and 3.70% for refinance, on conforming 30-year loans.
  • For the average borrower, purchase APRs for conforming 30-yr fixed loans offered on LendingTree’s platform were down 3 bps month over month, to 4.31%, the lowest since November 2016. In contrast, the loan note rate of 4.18% was up 7 bps to the highest since July.
  • Consumers with the highest credit scores (760+) saw an average APR offer of 4.18% vs 4.44% for consumers with scores of 680-719. The APR spread of 22 bps between these score ranges was 1 bps lower than in September. The spread represents nearly $12,600 in additional costs for borrowers with lower credit scores over 30-years for the average purchase loan amount of $228,730. Additional costs are due to higher interest rates, larger fees or a combination of the two.
  • Refinance APRs for conforming 30-yr fixed loans were up 10 bps to 4.26%. The credit score bracket spread widened to 16bps from 15 bps, nearly $7,500 in extra costs over the life of the loan for lower credit score borrowers given an average refinance loan of $235,844.
  • The average proposed down payment for purchase mortgages have been rising for 7 months and reached $59,680 in October.
  • Average monthly payments were little changed at just over $1,100 for both purchase and refinance. The credit score bucket spread was $241 for purchase and just $77 for refinance.
Source: Business Insider
Source: Business Insider

Inflation and Counterfeit Credit (GoldSeek), Rated: AAA

Let’s take a look at an often-repeated idea that is popular in the gold and alternative investing communities. The government possesses a printing press. Therefore, it will never default. It will just inflate its way out of the debt. It will devalue the dollar.

The government does not set the value of the dollar. And it has no mechanism to set it. So, logically, it has no mechanism to reset it. It cannot devalue it. In the same way, you cannot lower yourself down by your bootstraps since you are not lifting yourself up by them in the first place.

We must emphatically state that the government does not print. It borrows. Congress does not have a printing press, to create greenbacks. It has a Treasury that can sell bonds to cover whatever payments the government is obligated to make that it has not got tax revenues for. Over the past year, for example, the government increased its debt by over 630 billion dollars.

Like any bank, the Fed borrows to fund its purchases of interest-paying assets. It earns a spread between what it pays (currently about 1.25%) and what its asset portfolio pays (over 2%). The commercial banks currently deposit over $2.1 trillion in excess reserves, and the Fed’s total liabilities are over $4.4 trillion including Federal Reserve Notes (on which the Fed pays zero). Unlike any commercial bank, there is a law that obligates us to treat the Fed’s liabilities as if they were money.

We are working on the problem that all borrowing and lending uses the dollar. We offer gold financing, simplified and a yield on gold, paid in gold.

Source: GoldSeek

Right now speculative mania is occurring in crypto currencies so that may (but not necessarily, beware correlation!) shunt such capital flows away from gold. As to default risk, there are signs of rising stress in high yield credit markets, but it’s early yet.

Nav Athwal Exits CEO Role at RealtyShares (Crowdfund Insider), Rated: AAA

Nav Athwal, one of the more prominent founders in the real estate crowdfunding space, has announced his decision to step down from the CEO role at RealtyShares, a platform he founded four years ago.

Ed Forst, RealtyShares Board Member and former CEO of Cushman and Wakefield, has been selected as the interim CEO while the company searches for a permanent replacement.

Crowdfund Insider spoke to Athwal regarding his decision to change his leadership role at RealtyShares and he explained he would continue to be engaged with the company;

“RealtyShares is in the strongest position it’s ever been in. The company is moving from the build phase to the scale phase of its lifecycle. To best position RealtyShares for the future, I made the decision to transition out of my role as CEO to a new role on the Board of Directors. I asked Ed Forst to take on the role of interim CEO, while we look for a permanent CEO who will fit the culture and profile we’re seeking. I am still very much a part of RealtyShares and will be actively involved in strategic decision-making. I am looking forward to supporting the company in this new capacity and getting back into principal real estate investing and agribusiness. As I begin to work on additional projects, I will be sure to let you know.”

Leading RealtyShares Into Its Next Chapter (RealtyShares), Rated: A

I started RealtyShares four years ago with the idea of creating a company that would make real estate more accessible, efficient, and transparent. RealtyShares has come a long way since those early days in my living room. It is now a 100-person operation and the leading platform for online real estate investing and capital formation.

My primary focus has always been to best position RealtyShares for future success. RealtyShares is now at an inflection point. I will remain on the Board of Directors supporting the company as it continues on its journey to build a global marketplace for real estate investing.

Kabbage Releases Research: On Building Successful Small Businesses (Crowdfund Insider), Rated: A

Kabbage Inc., a global financial services, tech and data platform serving small businesses, released new data reporting on the similarities that connect all small business owners (SBOs), including personal sacrifices, professional challenges and growth expectations. Featuring responses from 400 SBOs, the data shows more than 67 percent expect to increase revenues by the end of 2017, with more than half anticipating an increase of 10 percent or higher.

In partnership with Bredin, a leading small-business market research firm, Kabbage polled small business owners across industries, including retail, education, manufacturing, food and beverage, healthcare, automotive, energy and finance.

RealtyMogul Tops $ 300 Million in Real Estate Funding (Crowdfund Insider), Rated: A

RealtyMogul has topped $300 million in total deal flow.

RealtyMogul has garnered over 140,000 investors, received over $300 million invested into deals presented on its platform and returned $65 million to its investors since its inception in 2012.

RealtyMogul Wins Gold in 2017 Stevie Awards for Women in Business (BusinessWire), Rated: A

RealtyMogul has been awarded the Gold Stevie Award in the Consumer Services category during the 14th annual Stevie Awards for Women in Business.

The Stevie Awards for Women in Business are the world’s top honors for female entrepreneurs, executives, employees and the organizations they run. All individuals and organizations worldwide are eligible to submit nominations – public and private, for-profit and non-profit, large and small. The 2017 awards received entries from 25 nations and territories.

The Postal Banking Solution (Jacobin Magazine), Rated: A

Fewer than two thousand people live in Bluff, but any one of them can walk into the post office and cash a check or apply for a loan.

Meanwhile, the United States is riddled with what are called banking deserts — inhabited areas, many of them urban, where residents have no access to a bank.

One in four US households is unbanked or underbanked, meaning they’re fully or partially boxed out of traditional financial services. Those 68 million people represent a growing market for payday loan sharks, and spend an average of 10 percent of their yearly income on the high interest and fees that go with alternative financial services — roughly the same proportion they spend on food.

But there’s a collective solution to the banking desert: we could set up a public postal banking system like New Zealand’s.

Fighting the fees: robo-advisers win followers, if only for lower costs (Pittsburgh Post-Gazette), Rated: A

But one day last year Mr. Hansen was complaining to his mother, an avid investor, about the high fees he was paying on his investment account. She suggested he look into an online investment company called Betterment that markets itself as a low-fee alternative to traditional financial advisers.

Some of the most popular robo-advisers — such as Betterment, Wealthfront and Charles Schwab’s Intelligent Portfolio — use exchange-traded funds to keep costs low. Betterment charges an annual fee of 0.25 percent of the account value. Wealthfront charges no fee for accounts $10,000 or less. Schwab’s robo-advising platform limits its fees to the operating expenses included in the ETF, which range between 0.07 percent and 0.21 percent of the fund balance.

Citizens Bank, a Providence, R.I.-based bank that claims the third-largest deposit market share in the Pittsburgh region, introduced a new digital investment and advisory platform on its online banking home page in September.

A July report by S&P Global Market Intelligence predicts that digital advice assets will grow from $98 billion at the end of 2016 to $460 billion at the end of 2021.

InterNex Capital Launches “Velocity” (PR Newswire), Rated: A

Digital asset-based lender, InterNex Capital (“InterNex”) is pleased to announce their Velocity platform for small and medium-sized businesses. Velocity provides borrowers on demand liquidity through the InterNex Line of Credit and delivers real-time access for working capital management. Velocity empowers accelerated growth and powerful analytics, traditionally only available to large enterprises.

Wells Fargo adds overdraft protection with Rewind (Bankrate), Rated: B

On Nov, 14th, Wells Fargo announced Overdraft Rewind, a new feature to help customers avoid fees for overdrawing their checking accounts right before payday, when overdrafts most commonly occur.

Going forward, the bank will not charge overdraft or insufficient funds fees if a direct deposit large enough to cover those charges is received by 9 a.m. local time the day after the account goes negative.

You don’t need to opt in; if you have a Wells Fargo account, you’re covered by default.

Fintech seeks to ‘democratize data’ with Nasdaq’s help (American Banker), Rated: A

The fintech startup Intrinio has partnered with Nasdaq to include the exchange’s real-time data feeds in its financial data marketplace.

Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept (Global Debt Registry), Rated: A

Global Debt Registry (GDR), the asset certainty company, today announced it has developed a collateral pledge registry, the first of its kind in the structured credit space, using Hyperledger Fabric, one of the Hyperledger blockchain framework implementations hosted by The Linux Foundation.

Midwest is on the rise in attracting tech investors’ interest (Crain’s Cleveland Business), Rated: A

Among those quoted in the story is Mark Kvamme, a top venture capitalist in Silicon Valley who now heads Columbus-based Drive Capital. The firm has raised $550 million and invested in 26 companies, betting, The Timessays, that “the middle of America amounts to an undervalued asset, rich in markets, new business ideas and budding entrepreneurs.”

Even so, three-quarters of all venture capital invested in America goes to California, New York and Massachusetts, the National Venture Capital Association estimates, and Ohio gets less than 1%.

Getting Help with Credit Card Debt (Business Insider), Rated: A

For the many Americans who face unmanageable credit card debt, it’s time to get their financial lives in order, says Andrew Housser, co-founder and CEO of Freedom Debt Relief– and if they need outside help, time to know how to find the right firm.

People looking for a trustworthy debt relief organization to help win the battle against debt can ask Housser’s seven questions:

  1. Does the company provide actual consultations and free advice to consumers?
  2. Does the company provide educational material, including budgeting and financial advice, free of charge?
  3. What is the background of the firm’s management team?
  4. How long has the company been in business?
  5. Request and review the company’s dropout and completion rates.
  6. What are the fees, and how will the firm assess them?
  7. How will the company help with creditor calls?

Atomist is formally launching with the Developer Automation Platform, an open source client and API. The new Development Automation Platform is designed to bring automation into the development and delivery process so that developers can focus on more important tasks.

Companies such as NVIDIA, Pivotal, Kyyti Group, Marlette Funding and Barclays Africa use Atomist for automation.

Mphasis’ top trends in Cognitive Intelligence in 2018 (CIO), Rated: B

  1. Smart environments with Pervasive Human and Machine Networks
  2. Predictive Analytics driven Customer 360
  3. Artificial Intelligence driven Multi-structured analytics – Cognitive Intelligence can enable insurance companies in analysing contact centre as well as chat data interactions in real time to predict propensity for fraud based on voice, video and text analysis and correlating the same with other similar fraudulent customer behaviors. The long term objective in such scenarios is to build machine learning based intelligent systems which learn on an ongoing basis based on historical pattern based analysis of billions of user and machine data points and predicts events.
  4. Immersive Multi-modal User Experiences
United Kingdom

Assetz Capital Achieves £1.5 Million Through Latest Seedrs Funding Round (Crowdfund Insider), Rated: AAA

Less than a month after launching its latest equity crowdfunding campaign on Seedrs, peer-to-peer lending platform Assetz Capital has successfully secured £1.5 million from more than 700 investors. The online lender took to the funding portal to raise £1 million for expansion.

Banking bots advise NatWest customers on investments (ITPro), Rated: AAA

NatWest has launched a chatbot that allows customers to seek financial advice from the comfort of their sofa.

The bot will determine the best way for customers to invest their money by asking questions such as what they want to achieve from investments, their current financial situation, what they can afford, their debts and other personal information, plus their attitude to risk.

It will then suggest ISA products they could consider for investment, plus how much they should consider investing and the most effective way to use their ISA allowance.

Monzo plans crowdfunding push to deepen ties with customers (Financial Times), Rated: A

Banking app Monzo is planning to launch one of the UK’s largest crowdfunding efforts next year to give customers in the fast-growing bank what it calls “a greater share of ownership”.

Tom Blomfield, chief executive, said the start-up, which raised £71m in a private equity fundraising earlier this month, intends to make a further cash call of between £10m and £30m in 2018.

However, the main driver of the crowdfunding push would be “to enable the customer base to own part of the bank”, Mr Blomfield said, adding that crowdfunding created a “genuine sense of ownership”.

Payday loan firm used £1.2m pension liberation scheme to pay debts (Citywire), Rated: A

Three directors of an insolvent payday loan firm which received cash from pension liberation schemes have been disqualified.

Speed-e-Loans.com (SEL), used £1.2 million from private investors via the schemes to meet its existing debts.

Directors Philip Miller, Robert Alan Davies and Daniel Jonathan Miller have been banned from acting as directors for nine, six and five years respectively for breaching fiduciary duties and the duties of care, skill and diligence.

China

Ping An Insurance Preparing For IPO Of Online Financing Platform Lufax (Asian Review), Rated: AAA

Ping An Insurance Group is working towards an initial public offering for its peer-to-peer online financing platform Lufax Holding, the Chinese insurer’s chief operating officer said on Monday.

She didn’t provide a timeline or size for the planned public offering. The company was valued at $18.5 billion after a round of fundraising last year.

Ping An Insurance sells tech, lightens assets to aid returns (Asian Review), Rated: A

Ping An Insurance Group will go light on assets and target technology exports as its next mainstay, China’s leading financial conglomerate said Monday.

European Union

TransferWise reports doubled revenue for last fiscal year (AltFi), Rated: AAA

The London-based firm’s annual revenue has grown by 140 per cent since last year, coming in at £67m this year compared to £28m in 2016. Its audited results show an adjusted operating profit of £2m, and an overall profit for the fiscal year of £7.4m.

As a result, TransferWise’s operating loss has decreased from £17m in 2016 to £56,000 in 2017.

Swiss Platform Launches ICO Engine to Host Start-ups (TheStreet), Rated: A

Switzerland headquartered Eidoo has today officially launched a initial coin offering (ICO)engine that allows companies and startups to host ICOs through the Eidoo mobile app.

According to data provider Coinschedule, $3.3 billion has been raised in more than 200 ICOsover the past 12 months alone and the popularity of this innovative ICO form of crowdfunding shows no signs of relenting.

BNP Paribas buys 10% stake in SME credit specialist Caple (AltFi), Rated: A

Through the alliance and a 10 per cent stake in Caple, BNP Paribas Asset Management (BNPP AM) is establishing a new platform to offer alternative credit to European SMEs.

Australia/New Zealand

CEO Jeff Greenslade details why Heartland Bank is moving aggressively into digital banking (Interest), Rated: AAA

Greenslade also reiterated Heartland’s forecast for June 2018 year net profit after tax of between $65 million and $68 million, an increase of up to 12% from $60.8 million in the June 2017 year.

“While some understandably lament the decline of branch banking, the bricks and mortar approach is not something we can compete in and is showing signs of obsolescence,” said Greenslade.

He pointed to Heartland’s digital services offering livestock finance, personal loans, SME working capital finance and deposits, noting “significant opportunity” to build on these.

Heartland has just six branches in Takapuna on Auckland’s North Shore, Hamilton, Tauranga, Wellington, Riccarton in Christchurch, and Ashburton.

India

Lower interest rates for borrowers in offing? Read where things stand (Financial Express), Rated: A

The Reserve Bank of India’s (RBI) guidelines for peer-to-peer (P2P) lending will attract more people to these platforms and help bring down the interest rates for borrowers, Bhavin Patel, founder and CEO of LenDen Club, told Shritama Bose. Players in the segment have sought the regulator’s clarifications on the permissibility of institutional lenders on P2P platforms, he added.

Will the RBI guidelines have an impact on the lending rates?

In the current scenario, the P2P lending market is a minuscule percentage of the huge lending market in India. But, due to the sentimental impact of the regulation, many more lenders may take to P2P lending, resulting in higher liquidity on such platforms. This will eventually lead to reduction of the interest rates offered to borrowers in this segment.

How Fintech is Shaping Up the Future of Financial Services (Dekh News), Rated: A

Traditional banking institutions have changed very little in the last hundred years. Most offer online banking and mobile apps these days, but behind the scenes, very little has changed.

In total, $49.7 billion was invested in fintech between 2012-16, which indicates just how important fintech is.

Fintech innovators are more cost-effective than traditional lenders. Their technology and business models are low cost. A traditional lender may have operating costs of around 7% compared to an online lender whose operating costs are as low as 2%.

A staggering 38% of customers no longer visit banks. The rise of online banks has proven that traditional bank branches are not essential. Online lenders such as Atom have become firmly embedded in the banking ecosystem.

MENA

A tale of how two cities thrive in FinTech world (Khaleej Times), Rated: A

Two cities thrive in this new world. Singapore and Abu Dhabi. Long before renewable energy was pervasive, Abu Dhabi had established Masdar. It has brought in the magic of the Louvre from Paris. Singapore has consistently been ahead of the curve of change. The world’s largest vertical botanical garden paves the way for urban farming. The Marina Reservoir is a masterpiece of engineering and vision that turned an inlet of the sea into a strategically critical freshwater resource for the “Little Red Dot”.

Recently, the Abu Dhabi Global Market (ADGM) held its inaugural FinTech Abu Dhabi Summit.

Two major announcements were made at the event. The first was the launch of the ADGM FinTech Innovation Centre by the first half of 2018.

The second was about a collaboration. ADGM and Plug and Play, the world’s largest startup accelerator based in Silicon Valley, signed a new partnership to launch a startup acceleration programme in Abu Dhabi, focused on FinTech. The programme, first of its kind in the Mena region, will be housed within the ADGM FinTech Innovation Centre. The partnership was signed by Ahmed Al Sayegh, chairman of ADGM, and Saeed Amidi, CEO, Plug and Play. Some of Plug and Play’s success stories include Google, Paypal, Dropbox and Lending Club.

Authors:

George Popescu
Allen Taylor

Thursday September 21 2017, Daily News Digest

RateSetter

News Comments Today’s main news: RateSetter surpasses $150M in loans. New York AG requests cybersecurity safeguards from Experian, TransUnion. Point72 Ventures leads AlphaFlow’s $4.1M seed round. Cross River appoints VP of Government Affairs to focus on regulatory framework. Clarity Money passes 500,000 user milestone. MarketInvoice’s losses doubled last year. Raisin expands into the UK with acquisition. Today’s main analysis: Millennial investors don’t […]

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Australia

India

Asia

News Summary

United States

Real estate investment platform AlphaFlow picks up $ 4.1 mln seed (PE Hub Network), Rated: AAA

AlphaFlow, an automated alternative investment platform for real estate, announced today the closing of a $4.1 million seed round funding, led by Resolute Ventures and Point72 Ventures, the venture capital arm of Steve Cohen’s Point72 Asset Management. Other investment partners include Upside Partnership, Social Capital, Y Combinator, Clocktower Technology Ventures, an affiliate of Drobny Capital, Red Swan Ventures, and more.

AlphaFlow’s seed round comes two years after the company was established by CEO and former RealtyShares Co-Founder, Ray Sturm. AlphaFlow plans to use the funding to continue scaling successful partnerships with lenders and investors, both accredited individuals and investment managers.

AlphaFlow Optimized Portfolios are available for investment professionals such as endowments, pension funds, RIAs, and wealth managers, as well as by independent investors seeking uncorrelated returns through short‐term, higher‐yielding real estate loans backed by properties.

To date, AlphaFlow’s flagship product, AlphaFlow Optimized Portfolios, boasts broad diversification across hundreds of loans in 29 states, average LTV of 72%, and target net returns between 8 to 10%. With this seed round funding, AlphaFlow intends to continue to innovate in the application of sophisticated finance mechanisms to scale within the investment industry.

Another Study Confirms It – Millennial Investors Don’t Know What They Are Doing (ValueWalk), Rated: AAA

Millennial investors are woefully underprepared for the next financial crisis according to a survey conducted by online real estate crowdfunding service Fundrise.

The Fundrise survey suggests that 67.2% of millennial investors are not prepared for the next crisis, and 47.1% feel that there is nothing that they can do to prepare for it. With 83 million millennials in the US holding an average of $75,500 in assets, this means the largest generation is at risk of losing $3.1 trillion in the next financial crisis assuming a repeat of the 50% drawdown seen last time around.

According to an annual study by Charles Schwab, 56% of millennial investors say ETFs are their investment of choice, compared to only 23% of seniors.

77.8% of respondents said that they had no interest in investing outside of the stock market while 42% of millennials surveyed said that they did not know whether it was important to invest outside of the stock market.

Source: ValueWalk

Cross River Appoints VP of Government Affairs (PR Newswire), Rated: AAA

Cross River, the financial services organization that merges the established expertise of a bank with the innovation and product offering of a technology company, announced today the appointment of Phil Goldfeder as VP of Government Affairs. Goldfeder will lead a team at Cross River working with regulatory agencies and policy makers in Washington, D.C., as well as state governments across the U.S., to implement appropriate regulatory frameworks that will encourage innovation while ensuring consumer protection.

Clarity Money Passes 500,000 User Milestone (BusinessWire), Rated: AAA

Clarity Money, the personal finance app that acts as the “Champion of your Money,” today announced that it reached 500,000 users on September 4, 2017, less than seven months after launching on iOS.

This milestone builds upon Clarity Money’s tremendous momentum in 2017, which has included:

  • Two successful rounds of funding, from noted investors such as Citi Ventures and Soros Capital
  • A nomination for the 21st Annual Webby Awards in the financial and banking services categories for mobile apps
  • Being a featured personal finance app on the Apple App Store and debuting as Apple’s #1 app under “New Apps We Love” in the Apple Store days after launching

NY AG Wants To Know About TransUnion, Experian Cybersecurity (PYMNTS), Rated: AAA

TransUnion and Experian, two of The Big Three credit reporting companies, have received letters from New York Attorney General Eric Schneiderman inquring them about their cybersecurity safeguards in the wake of the massive data breach at rival Equifax.

According to a news report in The Associated Press, the attorney general wants the two companies to describe what security systems they have in place and what changes they are implementing since data on 143 million U.S. customers at Equifax was breached.

New York’s attorney general wants to know if the companies would waive fees for consumers that needed credit freezes because of the hack.

Equifax breach has banks tightening their defenses, counseling customers (Information Management), Rated: A

Asking bankers to comment on the Equifax data breach generally evokes a cone of silenceforged out of a combination of sympathy and fear — I’m not going to speak about it because it could happen to me.

A few, though, will acknowledge the toll the breach has taken on their customers and their security departments, which have scrambled to ensure they won’t share (or haven’t shared) Equifax’s fate.

Another banker, Jim Hanlon, the chief technology officer at Dedham Savings Bank in Boston, was astounded that Equifax did not catch its breach more quickly.

“We have 60,000 customers,” he said. “If somebody came into our network and was looking at 100 files, that would raise a flag with us. If somebody’s accessing millions of records, how is something not alerting them to that fact? That’s the concerning piece to me. The documentation said they take network security seriously. But there should have been a red flag somewhere.”

Equifax’s security team detected and blocked suspicious network traffic associated with its U.S. online dispute portal web application on July 29. But the company’s investigation found that hackers had access to certain files containing personal information from May 13 through July 30.

The Equifax Breach: What You Need to Do Now (Parade), Rated: A

While I don’t have all the answers, financial/debt attorney and author of Life & Debt Leslie H. Tayne of Tayne Law Group, P.C., has some great suggestions.

Q: What can consumers affected by the breach do now to protect their information?

A: For starters, sign up for credit monitoring so that future account fraud and identify theft attempts will be noted and immediately brought to your attention. Next, get in the habit of regularly monitoring your bank and credit cards on your end for any suspicious activity. While you’re online, update your account passwords using long, strong, unique passwords for every single account.

Q: Should you freeze your credit so that no one can use your information illegally?

A: There are pros and cons to freezing your credit. The biggest pro of freezing your credit is that no one can apply for credit in your name. But that no one includes yourself, meaning it could create delays and problems when credit is needed quickly in the case of applying for a loan, credit cards or jobs or if seeking insurance, looking to buy or rent a home or contracting with a utility company during the freeze period. Yes, you can unfreeze your credit at any time, but this is also time consuming and may involve having to pay a fee.

Q: It doesn’t sound like freezing your credit is the best option right now.

A: With these types of drawbacks, a better avenue to consider may be signing up for a fraud alert.

Q: What else do consumers need to know or be on the lookout for going forward?

A: A key concern emerging from the Equifax security breach that consumers need to watch out for are cons and phishing scams. They need be wary of anyone who may approach them impersonating financial or government institutions or general companies who may come across offering support in resolving their data breach.

To Survival: Listen, Learn, Repeat (PYMNTS), Rated: AAA

While it may not be the oldest credit union around, the Boeing Employees Credit Union (BECU) of Tukwila, Washington, has been in business since the days of the Great Depression. Founded in 1935, BECU began as a credit union for employees of the Boeing Company aircraft manufacturing firm. Today, at 82 years old, BECU is looking pretty fit for its age. It currently holds more than $17.2 billion in assets and services more than 1 million members, placing it in among the top five U.S. credit unions for cash assets — and that’s without a steady diet of kale and spinach smoothies.

But, a common element with which older financial institutions must contend is new players arriving on the scene and throwing older players’ relevance into question.

Should older institutions treat these younger upstarts as rivals or as potential partners?

Doug Marshall, BECU’s senior vice president of retail, recently told PYMNTS that BECU has chosen the latter approach.

BECU has approached approximately 60 organizations in the FinTech space to explore opportunities for collaboration, Marshall said. Among the companies approached is Even, a supply-side marketplace lending company. An official partnership has not yet been established, but BECU turned to the company to explore innovations for the credit union’s own lending habits and to help members “smooth their cash flow.”

A few years ago, BECU launched an updated mobile app in partnership with MX, a technology solutions provider for financial services companies. Marshall said BECU was excited to see how members would embrace the newly-launched app. When it went live, however, it became clear they weren’t thrilled.

“We did quite [a lot] of research before we deployed,” Marshall said. “But, in some ways, we didn’t ask one of the most fundamental questions.”

According to Marshall, one of the important lessons that younger FinTechs can teach older credit unions about staying relevant is to not be afraid to fail.

“Lesson three is pivot quickly,” Marshall said. “That’s the magic of a FinTech partnership. We were able to respond and [quickly] deploy a fix.”

Morningstar CEO Kunal Kapoor tells advisers to embrace technology (Investment News), Rated: A

Imagine financial technology that can create personal portfolio indexes for individual investors or a computer program that can assign forward-looking performance ratings for mutual funds and ETFs.

That’s the way Morningstar CEO Kunal Kapoor thinks when he imagines where technology is heading, and why he believes financial advisers need to run toward technological innovation to avoid being left in the digital dust.

He compared the initial fear of robo-advice platforms to fears from the threat of online brokerage trading in the 1990s.

“The online trading platforms were supposed to put everyone out of business, but they were just absorbed into the mainstream,” he said.

Impact Housing REIT, LLC Launches $ 35 Million Equity Crowdfunding Opportunity Focused Housing Crisis in America (BusinessWire), Rated: A

Impact Housing REIT, LLC (ImpactHousing.com), a new apartment real estate investment trust led by Edward (“Eddie”) P. Lorin, a 30-year multifamily real estate veteran, is pleased to announce that its $35 million direct public offering under Regulation A+ has been qualified by the Securities and Exchange Commission (SEC) and is now open for investment. All investors – accredited and unaccredited, domestic and international – can invest directly in Impact Housing REIT Series A equity round for as little as $1,000.

Poor housing conditions due to a rising economy, extreme weather conditions, and poverty is effecting our health, quality of life, and country, as a whole. Impact Housing is the first REIT in the country using the new equity crowdfunding laws to focus on America’s housing crisis, specifically on creating affordable, livable, distinctive multifamily communities for America’s working people and their families.

Employing a strategy that Mr. Lorin has refined over decades, Impact Housing plans to buy neglected, poorly managed apartment buildings throughout the U.S., and transform them into thriving, healthy, family-oriented communities. Upgrades typically include new amenities, refreshed and upgraded interiors, resort style pools, playgrounds, state-of-the-art fitness centers, BBQs, dog parks, community gardens and open space social areas.

The technology enabling this online investment offering is backed by CrowdStreet, a leading provider of real estate fundraising and investor management solutions.

HOW AI APPS FOR BANKS ARE CHANGING THE FACE OF THE FINANCIAL SECTOR (TechGenix), Rated: A

Long before chatbots popped up as interesting business-use cases, long before mobile banking applications offered military-grade secure transactions, and much before focused analytics tools for banking made themselves known, AI apps for banks augmented by machine learning and deep learning began creating an impact in the world of banking.

The following factors make the financial sector a highly targeted market for all kinds of AI apps for banks:

  • Massive amounts of structured data from the past.
  • Consistency in data recording and archiving practices across financial institutions.
  • Quantitative nature of finance and banking business practices and operations.
  • Accuracy in data records.

AI apps for banks: Smart portfolio management for end users

These applications help banks build an online accessible tool that considers user preferences, personal demographic information, earning power, and wealth sources, and then matches these with their financial goals. In parallel, these systems take real-time market data and factor in parameters like a customer’s credit history, risk aversion, and lifestyle practices, creating a very robust portfolio of investment and saving instruments across asset classes.

Mobile banking applications like Moven and Simple leverage the idea of using algorithms that grow smarter with time. More precisely, they grow smarter by handling more data and measuring more results.

These AI-based applications can integrate with a user’s online bank accounts, debit and credit cards, and e-wallets to track their expenses, present advice on better expense management practices, and help them choose more suitable financial products that sit well with their financial habits, liquidity requirements, and short-term saving goals.

Automated hedge fund management

These models collate inputs from several sources of real-time financial information from the major financial markets of the world. Also, these models incorporate quantified inputs regarding sentiments in the financial markets.

Self-learning security systems for fraud detection

AI-based fraud detections tools of today leverage the principles of deep learning and machine learning, and are already beginning to incorporate the benefits of neural learning, and hence have tremendous potential in cybersecurity, particularly for the banking sector.

PeerStreet Named One of the Top Ten Startups to Work For in Los Angeles (Crowdfund Insider), Rated: B

Real estate crowdfunding platform PeerStreet announced on Tuesday it was named one of the Top Ten Startups to Work For in Los Angeles. The list was created by Zippia, an online startup career platform.

LendUp Appoints Jotaka Eaddy As New VP of Policy, Strategic Engagement & Impact (Crowdfund Insider), Rated: B

LendUp, a socially responsible online lender on a mission to redefine financial services for the emerging middle class, announced on Wednesday it has appointed Jotaka Eaddy as its new Vice President of Policy, Strategic Engagement, and Impact. Eaddy previously served as LendUp’s Head of Government Affairs.

LendUp has now saved borrowers nearly $135 million in interest and fees. The lender expects to surpass $200 million by the end of the year.

Need Money Fast? 4 Options for Small Business Owners (Entrepreneur), Rated: B

There’s an extremely fine line you have to walk when scaling. If you expand too quickly, hire too many employees, and order excess inventory, you could deplete your financial resources and crash. But if you don’t take any chances or prepare your business for growth, you won’t be able to respond in an efficient manner when you finally get the big break you’ve been waiting for.

So, what, exactly, can you do when you are ready and need money to expand? Here are four options.

1. Online lenders

If you need a sizable loan, you’ll still need to go through a traditional bank or lender. However, if you need only a modest amount of cash, online lending msy be the way to go.

2. Personal installment loans

If you’re really in a bind and need some quick cash, a personal installment loan might be the way to go. A lender simply checks your credit score and processes your request.

3. Line-of-credit loans

With a line of credit, your business gets approved for a certain amount of money for a specified period of time — typically one year.

4. Receivable financing (factoring)

The factor advances a portion of the receivables — likely 75 to 90 percent of the value — and then holds on to the remaining portion. It’s a good solution for businesses that have orders coming in, but don’t have the money to fill those orders.

United Kingdom

MarketInvoice’s losses doubled in 2016 (P2P Finance News), Rated: AAA

MARKETINVOICE saw its losses double during 2016, as the peer-to-peer invoice finance platform continues to use funds to scale up.

Its latest accounts on Companies House for 2016 showed a loss before taxation of £6m, increasing from £3.1m in 2015.

This is despite turnover increasing from £4.1m to £4.4m and an increasing number of invoices getting funded, at £442m, compared with £328m a year before.

Deposit marketplace fintech enters UK via acquisition (AltFi), Rated: AAA

A leading European deposit marketplace has acquired Manchester-based fintech PBF Solutions as part of its entry into the UK market. Raisin will target UK savers with its marketplace of savings accounts, while also offering an end-to-end deposit raising solution for UK banks and other firms.

Founded in Berlin in 2013, Raisin is already partnered with 40 banks and financial institutions across Europe. In the past four years the firm has also attracted over €4.3bn in what it calls “marketplace deposits”.

PBF will become Raisin UK, and will significantly increase the size of its UK-based operations over the coming months. CEO Kevin Mountford will take charge of Raisin’s UK expansion.

Lendable: the next generation lending platform that can give borrowers a small loan within two hours (Independent), Rated: A

By taking advantage of the large amount of data available in the UK at a time when consumer lending was evolving fast, Kissinger and his team conceived of a new kind of online lending that they claim is faster and more efficient than larger peer-to-peer lenders Zopa and Ratesetter.

Since 2014, they have built the third largest unsecured consumer lending platform in the UK by 2016 volume, even though – at 4.6 per cent – their market share is still small. So far it has lent a comparatively small £80m to around 20,000 borrowers. Zopa, by comparison, has approved £2.62bn in loans since 2005.

But with a growth rate of 430 per cent in the last year, Lendable is expanding quickly. It aims to be the fastest lender to decide on applications and transfer cash in the market, getting funds of between £1,000 and £15,000 in the borrower’s account in as little as two hours.

Power to the people: Meet the P2P lender that uses a centuries-old way of lending (City A.M.), Rated: A

But for many rural businesses, Folk2Folk has been a saving grace. The peer-to-peer (P2P) lending platform has helped struggling companies in a time of need, and in some cases prevented an entire community from caving in on itself.

“We don’t exist as a platform that wants to talk solely about interest rates,” says Giles Cross, the company’s chief marketing officer. “Rather, our purpose is to sustain local and rural communities around the UK – where people want to club together to make a difference.”

A large proportion of the businesses that use Folk2Folk are startups that have been starved of funding, largely because they don’t have a long-standing track record.

The House Crowd Says Investor Confidence at Record High (Crowdfund Insider), Rated: B

The House Crowd, a UK property crowdfunding platform, is reporting “record levels of investor confidence”. According to the platform, the House Crowd is experiencing high demand for its property-backed peer-to-peer lending products, with over 1,270 people having invested in one. The House Crowd states that 66% of its investors now repeatedly reinvesting their capital through the business.

FCA’s Bailey calls for govt action on debt crisis (FT Adviser), Rated: B

Higher UK interest rates could spark a consumer debt crisis unless the government intervenes, according to Andrew Bailey, chief executive of the Financial Conduct Authority (FCA).

More than 8.3m adults in the UK are struggling under the burden of debt – a higher proportion of the population than in 2016, according to figures from the Money Advice Service.

Its data revealed 15.9 per cent of the UK population is living with a debt problem, up from 15.4 per cent in 2016.

China

Social Media Giant Tencent Gets Into Old-School Finance (Bloomberg), Rated: AAA

Tencent Holdings Ltd., China’s largest social media firm, is entering the traditional finance industry by investing in CICC International Capital Corp., a move that may help the investment bank’s expansion in wealth management.

Shares of CICC jumped by a record after it said Tencent is paying HK$2.9 billion ($372 million) for roughly 5 percent of China’s oldest investment bank. The companies will team up on marketing and data analysis, according to an exchange filing.

Source: Bloomberg Technology

Ping An Securities deploys Finastra technology to boost revenue and enter new markets (The Asset), Rated: A

Ping An Securities has implemented FusionCapital from Finastra throughout its operations in Greater China.

The business, part of China’s Ping An Group, is now using the flexible Finastra platform to help extend its securities brokerage capabilities on a global scale – meaning it can boost revenues as it enters new markets.

Ping An Bank launched intelligent investment services (01Caijing), Rated: A

China Ping An “simple life” conference held in Shanghai. Ping An Bank mobile banking business – “safe pocket bank” launched a smart investment service (referred to as “safe intellectual investment”), the first open to ordinary investors to use. The service uses the Black-Litterman model (BL model) and the quantitative asset allocation method, which are widely used by overseas investment bankers, and develop personalized investment plan according to the customer’s risk appetite.

International

Japan wants to roll back regulations for financial technology startups — here’s why it could be bad for the US (Business Insider), Rated: AAA

Japan’s push to attract innovative financial technology startups to the country could spell trouble for the US.

On Wednesday at the New York Stock Exchange, Japanese Prime Minister Shinzo Abe said the government was moving forward with a plan to roll back regulations on some fintech startups to help spur the development of emerging technology and drive growth in the country.

As such, Abe is pushing for a regulatory sandbox program that would allow fintechs, startups looking to automate or digitize aspects of financial services, to operate and scale without meeting existing regulations.

While such an environment is understood to exist in Silicon Valley more broadly, Berenguer said, those hoping to break through specifically in the financial industry in the US are often required to subscribe to the same regulations as their much larger peers.

That often means paying lawyers to ensure compliance, costs that can force entrepreneurs to put off investing in their product and team. This creates a sort of Catch-22 for some startups. Venture-capital backers are less likely to give entrepreneurs money without a product, but it’s more difficult to create a product with less money when also paying legal costs. Berenguer says this has made financial technology harder to break into relative to the overall tech industry.

Singapore, UK sandbox

Some companies, he said, are seeking greener pastures in Singapore and the UK, where a sandbox program has existed for some time.

Where the huge SoftBank-Saudi tech fund is investing (Money), Rated: AAA

The Softbank Vision Fund was unveiled less than a year ago, backed by Saudi Arabia and Japan’s SoftBank (SFTBF). By May it had raised $93 billion, out of a planned $100 billion, to spend on technology businesses of the future.

Saudi Arabia is the biggest Vision Fund investor, followed by SoftBank. Other investors include Apple (AAPLTech30), Qualcomm (QCOMTech30), Foxconn, Shar (SHCAY)p and Mubadala, the sovereign wealth fund of the United Arab Emirates.

It’s already invested in 10 firms, leading funding rounds worth at least $7.7 billion.

Here’s what it has backed so far this year:

  • Slack
  • OYO
  • Fanatics
  • WeWork
  • Roivant
  • Guardant Health
  • Nvidia
  • Flipkart
  • Brain Corp
  • Plenty
Australia

P2P lender surpasses $ 150m in loans (Broker News), Rated: AAA

Peer-to-peer lender RateSetter has now reached the $150m mark in loans facilitated thanks to a rapid influx of lenders into the platform.

Millennial investors have helped to drive this growth, especially in RateSetter’s one-month market where these younger demographics make up 72% of the lender’s investors since the firm launched in 2014. This is followed by the one-year market where Millennials make up 40% of all investors.

Investment in the platform has risen by 50% over the last five months alone after RateSetter hit the $100m loan milestone in March. There are now more than 7,700 investors registered with the platform, making RateSetter the largest P2P lender in Australia.

For the one-month market, the average amount invested has increased from $3,777 two years ago to $11,483 today.

Source: Broker News
India

In Game Of Loans, RBI Arms A New Player (Bloomberg), Rated: AAA

Amit Parker, 26, needed money for his father’s heart surgery. Banks refused to lend as he had delayed repayments on a motorcycle loan three years ago. The travel firm executive tried his luck at Lenden Club (Lenden is Hindi for give-and-take), an online portal that connects individual borrowers with lenders. He managed to get Rs 70,000.

Most of these are small-ticket transactions, and the market is small. A few hundred such loans are disbursed a month with only the young with poor credit record or the tech-savvy borrowing, Rajiv Raj, co-founder of credit-scoring platform CreditVidya, told BloombergQuint. Adoption could improve once the central bank comes out with guidelines.

The Reserve Bank of India on Wednesday provided that clarity, bringing P2P lending platforms on a par with non-bank finance companies. And the opportunity is huge. More than 30 such startups have come up in the last four years, including Faircent, i2ifunding, Lenden Club and Billionloans.

Yet, since it involves lending to people with poor credit scores, interest rates can go as high as 28 percent. That didn’t deter Parker from taking another Rs 1.5-lakh loan on Lenden Club. He wishes to continue borrowing on the platform.

Millennials are the most active lenders and borrowers, Rajat Gandhi, co-founder of Faircent, said over the phone. About 60 percent of its 18,000 members are below 35 years. For its Mumbai-based rival Lenden Club, more than two-thirds of its users are 30-40 years old.

They largely borrow to improve lifestyle.

Loan marketplace Rubique targetting 250 pct growth in disbursement, 300 pct in revenue (Financial Express), Rated: A

Does the launch of your mobile app mean that you are shifting your focus to individual borrowers from SMEs?

From day one, we have maintained that our take on the opportunity in the financial space is not focused on retail or SME. The Indian financial sector is largely influencer-driven. Whenever, someone wants a loan, they go through an influencer, whether a chartered accountant or a financial advisor.

How much have you disbursed through your platform so far in FY18?

Last year, we did Rs 1,000 crore in disbursements, of which 60% was in the SME category and 40% in the retail category. This year, as a company, in the first four months (April-July), we did Rs 500 crore worth of disbursements and we have been clocking very healthy revenue. This month, we are touching around Rs 3 crore in revenue. We had been going at a monthly average of about Rs 2 crore in revenues so far. This year, we are targeting almost 250% growth over last year (in disbursements) and a healthy revenue growth. Last year, the revenue was Rs 15.5 crore. This year, we are targeting an almost 300% jump and we expect to cross `45 crore.

Buying a car this festive season? Consider these factors when comparing car loans (India Times), Rated: A

Many people wait for the festival season to make big-ticket purchases like buying a car. That is because banks and non-banking finances companies (NBFCs) usually lower their lending rates on car loans and even have offers such as writing off processing fees.

Source: India Times

“The only benefit of availing a car loan through the dealer is the slight convenience. Dealers tend to push the customer towards their captive finance arms or towards banks where they get higher commissions. So, when a customer compares the offer from the dealer with more banks or at online marketplaces, they will typically find lower interest rates and better terms than those offered by the car dealer,” says Gaurav Gupta, CEO, MyLoanCare.in, an online loans marketplace.

Source: India Times

Remittance firms should consider fintech start-ups as partners rather than competitors (The National), Rated: A

A recent Statista report estimates that fintech will be worth around US$20 billion by 2017.

For instance, 2016 GCC-wide figures by Statista showed that a full 57 per cent of banks and financial services providers saw fintech startups in their operational space as potential partners, while only 22 per cent saw them as competition.

Fintech start-ups tend to be technologically led. They harness mobile tech, social networks and a well-designed user interface to bring services directly to customers. But this technology-first model is most useful in the first and last mile fulfilment, ie, when a customer requests a transaction, or is notified of its completion. When it comes to actual transaction processing, fintech startups often lack the size, scale and well-developed treasury functions needed to fulfil global requests.

But mutually beneficial fintech partnerships can be a game changer. We are heading for what might be called a hybrid model – where a transaction is initiated in-app but is then handled by conventional partners through systems that are already compliant with regulations and have a robust track record of transaction fulfilment.

Asia

Used-car dealer taps fintech for one-stop ease (SGSME.sg), Rated: A

A USED-CAR dealership has tapped fintech to offer a paperless and hassle-free one-stop service to buyers, who can make an electronic deposit for a preferred model and submit an online car loan application, complete with insurance cover.

Orchard Credit, best known for its four decades in the vehicle financing business, recently set up a dedicated used-car showroom to provide the full range of car services to its customers.

Orchard Credit also pioneered the car loan aggregator. It is the only dealer which offers online car loans from nine banks and financial institutions – DBS, Hitachi Capital, HL Bank, Maybank, OCBC, Standard Chartered, Sing Investments and Finance, Tokyo Century and UOB.

INDONESIAN peer-to-peer (P2P) lending startup KoinWorks launches a new programme under its KoinPintar category of loans in collaboration with Binus Online Learning.

Benedicto says that KoinWorks will cover a maximum of 80% of the fees based an applicant’s finances. Loans with a flat interest rate between 9% to 12.5% will be offered to cover the rest.

How technology is changing equity trading (The Asset), Rated: A

The widespread use of algorithmic trading has lessened the need for interaction between the buyside and sellside, and brought with it increased reliability, faster speeds and lower costs. However, it also brings technology-related risks and a lack of transparency.

The widespread use of algorithmic trading – basically the process of using computers programmed to follow a defined set of instructions for placing a trade – means that it is no longer necessary for the buyside traders to speak to their counterparts every time they make a trade.

Authors:

George Popescu
Allen Taylor

Wednesday September 13 2017, Daily News Digest

New Orchard deals platform

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

New Orchard deals platform

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United Kingdom

China

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United States

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

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

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

Orchard Platform’s new features include:

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

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

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

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

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

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

                                   Source: Lend Academy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Other recent additions to the speaker roster include:

  • Pete Steger, Head of Business Development, Kabbage
United Kingdom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • The bank has already proven itself adept at dramatic pivots. Goldman Sachs originally operated as a wealth management and investment bank, and only began serving the mass market in 2016, when it eight months later, it had 

    A year in numbers! How P2P firms can help consumers beat inflation (P2P Finance News), Rated: A

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

China

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

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

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

An ever-evolving financial regulatory regime

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

A sketchy recent past for financial technology in the Middle Kingdom

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

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

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

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

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

European Union

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

The conference’s extensive speaker line-up includes:

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

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

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

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

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

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

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

India

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

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

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

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

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

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

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

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

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

Asia

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

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

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

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

Authors:

George Popescu
Allen Taylor

Tuesday August 29 2017, Daily News Digest

Global fintech

News Comments Today’s main news: Has Float shut down? Ford to use alternative data for credit scoring. OnDeck Capital, Scale Operations Management finalize partnership. Money Dashboard raises 1.33M GBP. Mintos adds Georgian ID Finance loans. Today’s main analysis: HNA raises billions from shadow banks. Today’s thought-provoking articles: SoFi personal loans help people pay off over $5B in credit card […]

Global fintech

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United States

Rumor: Online Lender Float Has Shut Down (Crowdfund Insider), Rated: AAA

Online lending platform Float has allegedly shut down. Crowdfund Insider has heard from several different sources the digital platform has called it quits. Earlier today, Crowdfund Insider attempted to contact the platform but no response has been forthcoming.

Ford to Look Beyond Credit Scores in Sales Push (Fox Business), Rated: AAA

The company says it is looking at ways to increase loan and lease approvals for applicants with limited credit histories. These consumers are often denied credit because they lack a history of managing debt and as a result have low credit scores. Ford’s credit division plans to review new data to try to determine whether these customers, as well as those with more robust borrowing histories, are likely to repay their loans.

Ford’s U.S. sales are down 4.3% during the first seven months of the year compared with the same period a year prior, while total U.S. new auto sales are down 2.8%, according to Edmunds.com. Wells Fargo & Co.’s auto lending volume fell 45% in the second quarter from a year earlier due to tightening underwriting standards. Ally Financial Inc.’s auto loan originations fell 8.5% for the same period.

Ford Credit is among the largest U.S. lenders to say that it is looking at using alternative methods of underwriting, beyond the traditional factors that are mostly centered around credit reports.

SoFi Personal Loans Help People Pay Off More Than $ 5 Billion In Credit Card Debt (PR Newswire), Rated: AAA

Today SoFi announced its members have cumulatively paid off over $5 billion dollars in credit card debt using SoFi Personal Loans, getting them out of debt faster and at lower interest rates.

Members who used SoFi Personal Loans to pay off credit cards reduced their effective interest rate by 42% on average. They also saw their credit scores rise by 17 points on average due to reduced credit utilization, a key component of credit scores.

Credit card utilization has been steadily rising since the 2008 financial crisis. Americans’ credit card debt eclipsed $1 trillion this year, according to Federal Reserve data, and the average credit card APR inched up to an all-time high of 16.14 percent, according to CreditCards.com.

SoFi offers an array of options for Personal Loans, letting members find their rate, choose their loan amount (up to $100,000), and choose their term (three, five, or seven years) through a simple, fully-online application process. Loans are funded in less than a week on average. Though SoFi Personal Loans can be used for lots of purposes, more than 70 percent of SoFi members report using them for credit card refinancing and loan consolidation.

On Deck Capital Finalizes Funding Partnership with Scale Operations Management (Digital Journal), Rated: AAA

At one point in recent history – the internet was the wild west of commerce and industry. It seemed as if anyone with a computer and an idea could start a company from their home office. Two decades later, way after the dot com bubble burst; it is clear that the internet is becoming saturated and more competitive.

The competition for attention has led to increases in advertisement costs.

Doing business online went from a luxury to a necessity and budgets went from small to large.

Andrew Ukpabi, Founder of Scale Operations Management – a business management company with 15 Million in client assets under management; believes that this trend in the short term will only grow and he explains cheerfully how this has impacted the growth of his company:

“I’ve been on a signing spree lately. In the last week I’ve signed deals with CRMS’s, chargeback mitigation platforms, and processing companies.”

The partnership with On Deck Capital (ONDK) a NYSE listed company that boasts 4 Billion in funding to more than 40,000 small business customers in the US, Australia, and Canada; is the latest in his signing spree.

NEPC SURVEYS E&F MANAGERS ABOUT ALTERNATIVE INVESTMENTS (All About Alpha), Rated: A

NEPC, the investment consulting group that caters especially to endowments and foundations, has posted a survey about what such institutions think of marketable alternatives.

This broad category “marketable alternatives” includes direct hedge funds, funds of hedge funds, liquid alternatives, and global asset allocation.

Where are these allocations headed, near future? Not quite two-thirds of the respondents (65%) planned to maintain their current level of allocation in such investments. Sixteen percent plan to make a “modest change” increasing the allocation. Symmetrically, another 16% plan to make a “modest change” in the opposite direction. Only 3% plan to decrease the allocation “substantially,” and no respondents plan to increase it substantially.

As to what they have done over the past year: 18% have increased their allocation to such alternatives, 32% have decreased it, so the remaining half have kept it where it is.

Source: All About Alpha

There is a split on the question of the classification of marketable alternatives within a foundation or endowment’s portfolio, one that reflects a series of evenly divided binary choices. Not quite half (48%) of respondents say they have a dedicated allocation to this asset class, and that’s the end of the issue for them.

So that leaves 52% who do something else. A little more than half of them (about 28% of the whole) say that they have marketable alternatives both within a dedicated allocation and as part of an allocation to another class.

Should SoFi be granted a bank charter? Rep. Waters isn’t so sure (HousingWire), Rated: A

SoFi outlined in the application that the purpose of the charter is to provide its customers a FDIC insured NOW account and a credit card product. The bank will offer no other products or services.

In response to Waters’ comments, a SoFi spokesperson said, “We’re happy to discuss our application with Rep. Waters and other interested parties, and confident the FDIC will conduct its review of our application expeditiously and in accordance with the law.”

The Independent Community Bankers of America also sent a letter to the FDIC over the application, urging the FDIC to reject the application.

ICBA also stressed that Congress should close the ILC loophole, stating it not only threatens the financial system but creates an uneven playing field for community banks.

1 Popular Way Millennials Are Cutting Back on Living Expenses (and Why There’s Nothing Wrong With It) (CheatSheet), Rated: A

Co-living has been a popular option among young people just out of college. And now businesses are also jumping on the co-living bandwagon, hoping to make some quick cash from this idea.

The act of sharing housing, work, and commuting space is second nature to millennials. Co-living is just one more option young people have to stretch their resources and meet new people if they so choose.

Research shows more millennials are living with their parents than with a spouse. Living with parents is the No. 1 living arrangement among millennials, according to Census Bureau research. In 2016, 22.9 million (31%) young adults lived with their parents.

One company that joined the co-living movement is WeWork, which originally started out offering co-working spaces to individuals and companies. WeWork branched out to co-living spaces, called WeLive, in 2016.

Some co-living buildings, such as PodShare, even provide free food and fully furnished apartments, further helping their residents keep costs down.

Thinking of going the co-living route? Here are some of your options in three major cities.

Chicago

Los Angeles

New York

Malkiel Provides Investment Advice For IRA Allocations (Financial Advisor), Rated: A

Although the top leading robo-advisor firms grew by 65 percent in eight months to $19 billion assets under management in 2014, according to Financial Advice Market Review (FAMR), robo-advice is limited to assembling a group of stocks and bonds to avoid risk in a portfolio.

CAN WE ALL PARTICIPATE IN THE NEXT UNICORN? (All About Alpha), Rated: A

With the passage of the Title III portion of the JOBS Act, this paper tries to address a very critical question: can non-accredited investors find and invest in the next unicorn?

AltFi Data [2015], a data aggregator of equity crowdfunding, published a report on equity crowdfunding from 2011 through June 30, 2015 using the five most significant online platforms based on origination volume. These include Crowdcube, Seedrs, SyndicateRoom, CrowdBnk and Venture Funders. There were 431 investment crowdfunding rounds from 367 companies. The UK report indicates that crowdfunding has revolutionized the funding of small and medium sized enterprises involving both professional and small retail investors. It is reported that 62% of crowd funding investors describe themselves as retail investors with no previous investment experience.

3 Keys To Earning Up To 7% With Peer-To-Peer Lending (Forbes), Rated: A

Lending Club, the world’s largest P2P platform, has served over $55 billion in new loans in 2017. That’s a 40% growth in loan volume compared to last year.

Now, the likes of Goldman Sachs serve about 70% of all peer-to-peer loans.

P2P lending is still a place to earn market-beating yields of up to 7%. But private investors are now competing against the world’s biggest financial institutions.

  1. Spread Your Risk and Invest No Less Than $5,000
  2. Use Automated Rebalancing Tools – NSRInvest.com is a registered advisor that offers managed accounts to P2P investors. Investors can link their Lending Club and Prosper accounts to the website and have NSR experts invest for them based on their loan selection criteria.

Depending on the selected strategy, NSR users have outperformed the market by as much as 2.6% (average is 1.5%).

  1. Enhance Your IRA with P2P

Tell Us Who Your Favorite Fintech Companies Are: Forbes Fintech 50 Call For Nominations (Forbes), Rated: B

If you own or work at a fintech firm that you think is worthy — or if you’re a fan of one — please tell us about it. The only stipulations are that it be a venture-backed startup with operations in the United States. That means no publicly traded companies or their subsidiaries and no privately held established firms.

If you are submitting a company for which you’re an owner or employee, please use this form.

If you’re nominating a startup of whose inner workings you have no knowledge, please fill this out.

The deadline for both sets of submissions is Friday, September 15, 2017. If we have more specific questions, we will be in touch.

United Kingdom

Money Dashboard Raises £1.33M in Equity Crowdfunding (Finsmes), Rated: AAA

Money Dashboard, an Edinburgh, UK-based personal finance management app, raised £1.33M in equity crowdfunding.

1708 investors have participated in the campaign via Crowdcube acquiring an equity stake of 9.55% in the company.

The company had a target of £1m at a pre-money valuation of £12.6m.

Half of UK businesses lack confidence in government’s Brexit strategy (Consultancy.uk), Rated: A

Now, a recent survey conducted by peer-to-peer finance platform Market Invoice found that 54% of 3,000 businesses polled said the government had lost its way in talks with Brussels and that Brexit Secretary David Davis lacked preparedness, while only 5% felt he was doing a good job.

Maintaining stability in the sterling was meanwhile considered important by just 7%, reversing a KPMG study of businesses performed earlier in the year. In response to the falling pound however, the UK is projected to lose as many as 40,000 investment banking jobs post-Brexit.

A total of 20% of firms voted against further financial support spent on marketing, and aim to reduce it in the nearby future. A 54% majority of small businesses have not yet witnessed Brexit leaving a negative impact on the hiring plans, as only 2% are predicted to reduce exposure to EU nationals with a further 6% being more reluctant to hire from the bloc.

Startup Accelerator Level39 Launches Cyber39 (LendIt), Rated: B

Level39 has launched Cyber39, a program focused on fighting cyberthreats in London.

China

Chinese Dealmaker Raises Billions From Shadow Banks (Bloomberg), Rated: AAA

A Bloomberg News review of more than 100 investment documents and corporate filings sheds light on how HNA has financed its remarkable run of deal-making, which has included acquiring multi-billion dollar stakes in Deutsche Bank AG and Hilton Worldwide Holdings Inc.

The documents, pieced together from fund prospectuses and disclosures to China’s Administration for Industry and Commerce, show how HNA has employed a network of trusts and asset management products, in addition to more conventional financing, to fund everything from takeovers to day-to-day expenses. Among the key findings: Units of the group have pledged more than $10 billion of unlisted shares to non-bank lenders and, in some cases, have paid interest rates on shadow debt that far exceed China’s benchmark rates for bank loans and bond issuance.

The documents, pieced together from fund prospectuses and disclosures to China’s Administration for Industry and Commerce, show how HNA has employed a network of trusts and asset management products, in addition to more conventional financing, to fund everything from takeovers to day-to-day expenses. Among the key findings: Units of the group have pledged more than $10 billion of unlisted shares to non-bank lenders and, in some cases, have paid interest rates on shadow debt that far exceed China’s benchmark rates for bank loans and bond issuance.

HNA’s parent company said in a response to questions that financing from non-bank institutions makes up a “small” portion of the group’s overall funding and that its credit limit from Chinese banks has increased by more than 100 billion yuan ($15 billion) this year. The company said its debt-to-asset ratio has dropped for the past seven years and added that HNA Group’s profitability and asset quality have been improving.

Source: Bloomberg

Taken together, the documents suggest that HNA’s main units have increased their use of shadow financing in absolute terms over the past two years.

China’s regulators preparing new rules for digital coin offerings (Reuters), Rated: A

Chinese regulators are preparing new regulations on digital coin offerings and may ban them until the rules are in place, the financial magazine Caixin reported on Monday, as interest in the new fundraising channel grows rapidly in a regulatory grey area.

Digital currencies, also called cryptocurrencies, such as bitcoin and a growing stream of alternatives, allow anonymous peer-to-peer transactions without the need for banks or central banks.

China’s top insurers ploughing billions into fintech (SCMP), Rated: A

China Life and Ping An Insurance, the country’s two largest insurers, have both been focusing heavily on investment in technology, and now it appears artificial intelligence (AI) may becoming more important than sales agents across the sector, as premium income continues to soar.

The nation’s largest insurer China Life still has 1.58 million agents, while number two Ping An has over 1.1 million, and both have previously made much of the fact they plan to expand those sales forces in future.

China Life said last Thursday it had teamed up with internet search firm Baidu to form a fund to invest 7 billion yuan (US$1 billion) in AI-related technology companies and internet finance operations. China Life will plough 5.6 billion yuan into the venture, with Baidu covering the rest.

European Union

Mintos Marketplace Adds ID Finance Loans Issued in Georgia (Crowdfund Insider), Rated: AAA

ID Finance, an emerging markets focused Fintech company, is now listing investment opportunities on the Mintos marketplace incorporating prime personal loans issued under its Solva brand in Georgia. Solva is a fully owned ID Finance subsidiary in Georgia that has disbursed 28,000 personal loans worth €12 million since late 2016.

The loan originator will offer a buyback guarantee for loans that are delinquent for more than 60 days. The share of non-performing loans for Solva is said to currently be at approximately 4%. ID Finance will keep at least 10% of each loan available on the Mintos marketplace on its balance sheet so its interests are aligned with investors.

PSD2 – What will happen in January 2018? (AltFi), Rated: A

With the inception of financial digitalization, we’ve seen new firms such as Goldman Sachs adapt their strategy to cover retail and embrace fintech, firms such as Citi and BNY Mellon have ventured into open banking and finance APIs and Vanguard has created a digital behemoth of their robo-advisor.

Open Banking is still a new concept and, as new concepts go, it will be refined by trial and error. Some banks are farther along than others, with e.g. BBVA already in commercial use with several APIs. Yet the roll out of new “API Markets”, as they are often called, will see a learning experience from both the bank providers as well as those looking to utilize them.

Swiss fintech launches first-ever mobile app for alternative investments (Opalesque), Rated: A

Opalesque Industry Update – Fundbase has announced immediate availability of Fundbase Mobile, a revolutionary application for qualified investors to source alternative investment products. With Fundbase Mobile, investors will have access to a globally diversified universe of high quality alpha producing alternative investments at their fingertips.

The majority of Fundbase users expect to improve their fund sourcing process with Fundbase Mobile by spending more time logged in, searching funds. Pancho Vanhees, of TFAL Investments, a Luxembourg-based investor, believes the mobile app will improve their systematic processes and quickly identify top performing emerging hedge fund managers while on-the-go.

Why Only Initial? Worldcore Aims to Use ICO to Conquer Blockchain Competitors (Coin Telegraph), Rated: A

In the past week alone, prominent investor Mark Cuban and entrepreneur Kim Dotcom have both signalled their involvement in ICOs.

Worldcore aims to undercut banks, banking disruptors such as TransferWise and FairFX, and soon the technologically innovative operators heavily involved with cryptocurrencies.

Offering both payments and consumer spending options such as a prepaid debit card, the company is already accepting Bitcoin as a funding option, the first step in a Blockchain rollout which will occur incrementally over several years as the technology improves.

Biometric account access in the form of face and voice recognition replaces passwords, while Blockchain offerings themselves will take the form of a payment gateway reminiscent of Ripple.

Worldcore’s fee structure, for example, is noticeably more complex than that of Bitcoin-based prepaid cards from Bitwala, ANX and others.

Fintech Can Contribute to the Quality of Country’s Financial Center (Crowdfund Insider), Rated: B

The Federal Council of Switzerland is out with a note regarding Fintech. Federal Councillor Ueli Maurer is apparently doing a swing through the Swiss Fintech scene to improve awareness and relationships.

Maurer is expected to visit Fintechs in Zurich and Zug – a fact finding mission to garner updates on current tech topics, risks, opportunities and challenges.

The Federal Council believes that a dynamic Fintech ecosystem can contribute significantly to the quality of Switzerland’s financial center – something that is strategically important. It can also boost its competitiveness around the world.

Credissimo – Contender for European FinTech Awards 2017’s Title of ‘European Innovator 2017’ (Digital Journal), Rated: B

Credissimo is the only Bulgarian company featured in the European FinTech Awards 2017 where it is nominated for the “Alternative Finance” category.

This prestigious nomination places Credissimo amongst lead European companies where it will compete with the largest FinTech organizations for 2017’s European Innovator award.

International

Alternative finance market in robust health, despite slight summer downturn (Opalesque), Rated: AAA

Opalesque Industry Update – The world’s first global Crowdfunding and Marketplace Finance Index (CAMFI) shows that the industry exhibited a slight downturn in July, dropping from 94.11 in June to 90.32 in July.

Key points:

  • The global crowdfunding and marketplace finance industry exhibited a slight downturn in July
  • Segment-wise, the Reward Sub-Index was the major cause of the July decline
  • Attribute-wise, the main declining driver was the market Scale measures
  • Industry Scale continued to shrink, most evidently in the Reward segment
  • Industry Efficiency improved significantly, with both Debt and Reward segments demonstrating growth
  • Industry Transparency underwent no noticeable changes
  • Debt has stayed relatively stable, which is expected given it is such a large and diverse market
  • Equity has seen had a significant downturn in trading
  • Rewards has had the biggest downturn, with significantly fewer campaigns, backers and amounts of money raised for each campaign during the July period

Despite the slight downturn demonstrated in June and July, data from TAB shows that the industry is growing rapidly year on year:

  • In 2014, campaigners in the UK raised over $2 billion via crowdfunding platforms. In 2016, they raised over $3.96 billion.
  • China is demonstrating huge growth, with companies raising $134 million via crowdfunding platforms in 2014. In 2016, they raised $2billion.
  • France is also seeing significant growth, with companies raising $70 million in 2014, and $159 million in 2017 to date.
  • In 2014, companies raised $5.4 billion in debt finance globally, increasing to $12.7 billion in 2016.
  • In 2014, companies raised $345 million in equity finance globally, increasing to $766 million in 2017 to date.
  • Rewards finance raised via crowdfunding globally has increased from $680 million in 2014 to $1.1 billion in 2016.
  • The Real Estate industry raised $1.2 billion via crowdfunding in 2014. In 2016, it raised to $3.8 billion.
  • The Capital Goods industry raised $751 million in 2014. This year to date, it has raised $1.4 billion.

Funding & Deals On Pace For A Record Year (CB Insights), Rated: A

Last quarter set a record for funding to VC-backed fintech companies, which raised $5.2B across 251 deals (as highlighted in the CB Insights Q2 2017 Global Fintech report). At the current run rate, deals are on pace to increase 5% this year, while investment dollars are on pace to grow 19%.

The quarter also saw new unicorn births, with 5 companies reaching new valuations of $1B+: online lending site Tuandaiwang (valued at $1.5B at the time of its unicorn round), invoice and payment company AvidXchange ($1.4B), online investment platform Robinhood ($1.3B), health insurance startup  Clover Health ($1.2B), and cloud-based communication platform Symphony Communication Services ($1B).

Source: CB Insights

Funding to global VC-backed fintech companies set a quarterly record in Q2’17, rising 83% to reach $5.2B. Deals experienced less dramatic growth, but still increased 2% from the previous quarter, reaching a five-quarter high of 251.

Source: CB Insights
Australia

Car finance drives P2P growth in Australia (P2P Finance News), Rated: AAA

CAR finance is one of the driving forces behind the growth of P2P lending among brokers in Australia.

According to new research from RateSetter’s Australian business, one fifth (20 per cent) of all broker-led loans on the platform are used for car and vehicle finance, with an average loan value of AUS$13,186 (£8,077).

Meanwhile, home improvement loans account for 19 per cent of the platform’s broker-led activity, with an average loan value of $14,299, while 12 per cent of loans are used for debt consolidation, and seven per cent are used for education.

Business borrowing accounts for nine per cent of total broker loans, but has the highest loan values with an average of $28,094 per loan.

CARS AND RENOVATIONS DRIVING GROWTH OF P2P LOANS IN THE BROKER MARKET (LendIt), Rated: A

Peer-to-peer lending is gaining traction amongst Australian brokers, with RateSetter today announcing that it has reached the milestone of 2,000 brokers accredited with the peer-to-peer lending platform. Lending volumes through the broker channel, largely driven by car and home improvement loans, are doubling approximately every six months according to RateSetter.

Vehicle financing is the most popular reason brokers are choosing peer-to-peer loans for their clients, followed closely by funding for home improvements and loans to consolidate high-interest credit card or other bank debt.

The milestone also coincides with RateSetter passing $150 million in loans facilitated since launching in 2014. Across both the broker and direct channels, lending has grown 50% in the last 5 months alone, after passing the $100m milestone in March.

An analysis of RateSetter’s loan data found that brokers are helping their clients finance loans worth an average $16,871, with an average loan term of 44 months at an average interest rate of 8.37% p.a.

Source: LendIt
Asia

Here’s How Chinese Tech Giants Including Tencent And Ant Financial Are Plowing Into Southeast Asia (CB Insights), Rated: AAA

Here’s a summary of the investment and M&A moves of the five Chinese internet giants within Southeast Asia:

Didi Chuxing: Chinese ride-hailing startup Didi Chuxing was the first among the Chinese tech giants to enter Southeast Asia, when it invested in Singaporean ride-hailing startup Grab’s $350M Series E round in 2015. It invested again in Grab in 2017, in its $2B Series B round.

JD.comThe Chinese e-commerce giant made an investment in leading Indonesian travel booking platform Traveloka this past year as part of its ongoing fund-raise, participating in $150M of its ongoing $500M round, along with Sequoia Capital, Hillhouse Capital Group, and East Ventures. Expedia contributed $350M.

TencentTencent recently invested in Indonesia’s Go-Jek, a company most widely known for its on-demand motorbike service. But Go-Jek is strategically similar to Tencent in a notable way: Like Tencent’s WeChat, Go-Jek is also developing a “super app” of sorts, which includes the ability to order food, massages, and other services, in addition to the development of its own mobile payments product called Go-Pay. In 2013, Tencent launched MNC Tencent, a joint venture with Indonesia’s MNC Media (not pictured in timeline). According to media reports, this venture was launched with the intention of pushing Tencent’s WeChat in the country. More recent reports claim that this JV hasn’t seen much traction.

Alibaba: Alibaba’s most recent investment into Southeast Asia was a $1.1B investment into Indonesian consumer-to-consumer e-commerce site Tokopedia in August 2017. This investment comes after months of rumors that JD.com was planning an investment into the company. Alibaba has also invested twice into Tokopedia’s competitor, Singapore-headquartered e-commerce site Lazada. First, in April 2016, it invested $1B in Lazada, valuing it at $1.5B. In June 2017, it upped its existing 51% stake to 83%, giving Lazada a valuation of $3.15B. It announced that this investment would leave its investments into the e-commerce site at a little over $2B.

Ant Financial: Ant Financial, Alibaba’s financial investment arm, operates Alipay and has made its fair share of investments into the region, across different countries and on different terms. In 2015, it invested in Singaporean cross-border trading platform M-DAQ. In 2016, it put money into Thai fintech company Ascend Money to help grow its digital and offline payments and financial services business. 2017 brought an entrance into the Philippines, with an investment into Globe Telecom-owned fintech company Mynt, and into Malaysia, where Ant Financial set up a joint venture with CIMB Group-owned Touch ‘n Go, which operates a smart card that works on transportation payments, like tolls and public transportation. According to reports, the joint venture would allow Ant Financial to build an e-wallet for Malaysia.

Source” CB Insights

Thai proptech startup Seekster raises seed funding from Digital Ventures, 500 Tuk Tuks and dtac Accelerate (e27), Rated: A

Seekster, an alumni from the dtac Accelerate programme batch 5, announced today it has raised an undisclosed seed funding from Digital Ventures, 500 Tuk Tuks and dtac Accelerate.

The startup is a company that connects properties to cleaning and maintenance service providers. While there are many on-demand cleaning companies, Seekster targets the commercial sector and SMEs. The startup says it facilitates about 5,000 to 6,000 jobs per month in Thailand.

Furthermore, the startup also announced it has inked a deal with real estate company Ananda Development to provide maids and technicians for its condos.

Middle East

Robo-advisory: Show me the money (Khaleej Times), Rated: AAA

Robo-advisory services describes a range of algorithm driven models that help sift and select investment options for individuals based on the investors’ requirements and risk appetite. Similar to P2P lending, this technology platform brings the customer closer to the investment. It enriches the information available through graphic rich dashboards and content that allow the investor to see how the portfolio is performing over time as well as versus benchmarks.

Deloitte’s report, The Expansion of Robo-Advisory in Wealth Management suggests that by 2020, the assets-under-management or more simply the amount of money invested via robo-advisors will be somewhere between $2.2 trillion to $3.7 trillion. By 2025, the number is expected to rise to $16 trillion or roughly three times the amount handled by the world’s biggest asset management firm, BlackRock.

Source: Khaleej Times

What I Know about the right time to crowdinvest: Eureeca’s Chris Thomas (Wamda), Rated: A

Unlike other crowdfunding platforms, Eureeca specializes in equity investment. If crowdfunding is the umbrella term for debt funding or reward funding, crowdinvesting describes the equity side of crowdfunding. At Eureeca, entrepreneurs and investors are put through a stringent vetting process before it is determined who can join the platform. For its first class of companies, Eureeca chose 60 businesses out of 3,000 applicants. With more than 14,000 active investors, the average investment amount is $5,800.

As the first company to obtain a crowdfunding license from the Dubai International Finance Centre, Eureeca – in the person of Thomas – laid out for Wamda everything from the right time for entrepreneurs to crowdinvest to what they should expect from the process.

Crowdfunding should not be your second or third choice. It should be the first place you go to try and fix your funding requirement. In the Middle East, the concept is still being socialized. Crowdfunding is essentially the online mechanism for raising money. If you are raising $100,000 or $10 billion, join a platform to see what they can do and you’ll be surprised at the support. By bringing the fundraising online, you reduce the amount of time and effort you put in and increase your reach to potential investors, including access to crossborder investments.

It works best for businesses with a consumer-facing element. People need to have an emotional connection with your business. It’s not going to work for a steel factory in Ras al Khaimah [an outlying emirate in the UAE]. If you have a product that’s already being distributed and there are people who know and love your product, they are the ones that can be converted from lovers of your business to investors in your business.

Regular fundraising prep applies. Be sure that you have a strong network and that you are constantly building your contact list.

Authors:

George Popescu
Allen Taylor